Airea Plc · LSE:AIEA
Airea — FY2023 Earnings Presentation
28 slides from Airea's earnings presentation, March 2024
Slide 1: Full year 2023 results
Full year 2023 results March 2024 UK design-led specialist flooring company
Slide 2: Introduction to the Group
Introduction to the Group UK design-led specialist flooring company, supplying UK and international markets Focused on the manufacture, design, marketing, and distribution of innovative floor coverings Listed on AIM, the name Airea was adopted in 2007 Designing and developing products combining the
Slide 3: Experienced Board of Directors
Experienced Board of Directors Martin Toogood Médéric Payne Conleth Campbell Tanya Ashton Independent Non-Executive Chief Executive Officer Chief Financial Officer Independent Non-Executive Chairman Director Martin joined the Group as an Médéric joined the Group on 25 Conleth joined the Group on 2 T
Slide 4: Key highlights
Key highlights Sales growth of 14.1% driven by volume and improved mix Record Burmatex® sales of £21.1m, growth in all key markets Operating profit before valuation gain increased by 9.2% to £1.8m £5.0m investment in facility to substantially increase capacity Proposed final dividend of 0.
Slide 5: Business overview and strategy
Business overview and strategy Médéric Payne CEO arctic ® UK design-led specialist flooring company 5
Slide 6: An introduction to our market leading brand
An introduction to our market leading brand British-made ISO 9001 Quality Broad customer flooring solutions Management and base including to create ISO 14001 architects, sustainable value Environmental specifiers and globally Management contractors systems - one of the UK’s leading designers and Eco
Slide 7: Our Sustainability Principles
Sustainability principles - embedded across our business We are committed to helping deliver a sustainable future because we believe that what we do matters. To help us deliver on this commitment, we have developed , our sustainability principles. Carbon Neutral Products Our Sustainability Principle
Slide 8: Competitive advantage – building a platform for success
Competitive advantage – building a platform for success Continued investment in innovation and new product development Strong working relationships with customers New channels of B2B being developed Unparalleled service reputation in market Long established brand In-house manufacturing w
Slide 9: Key market sectors we serve
Key market sectors we serve Commercial Offices Colleges & Universities Schools & Academies Student Accommodation Public Sector Leisure Residential Retail Ministry of Defence Hospitality UK design-led specialist flooring company 9
Slide 10: Product development – innovative and sustainable solutions
Product development – innovative and sustainable solutions Aligning to the sustainability principles enables us to meet the needs of our customers. The development of new product ranges and the refresh of existing ranges is pivotal to our success. First carbon-neutral range product Worked closely wi
Slide 11: Driving transformational change
Driving transformational change Strategic review of entire product range Key product ranges refreshed Lead time to market reduced by five months Launch of carbon neutral products Refresh of low carbon products Revised strategy developed and communicated sustainability principles fully
Slide 12: Financial overview
Financial overview Conleth Campbell CFO osaka® UK design-led specialist flooring company 12
Slide 13: Financial highlights
Financial highlights Group revenue Operating profit before valuation gain Profit before tax £21.1m £1.8m £1.4m 14.1% 9.2% 0.0% Cash and cash equivalents Net cash Full-year dividend £5.8m £3.4m 0.55p 0.0% 21.4% 10.0% UK design-led specialist flooring company 13
Slide 14: A record sales performance
A record sales performance £m 2023 2022 % Change • Sales up 14.1%, record level for Burmatex® Sales 21.1 18.5 14.1 • Sales growth across all key markets Operating costs (19.8) (17.1) 15.8 • Growth driven by increase in demand for the Other operating income 0.5 0.3 66.7 more sustainable product range
Slide 15: Cash flow – continued investment in business
Cash flow – continued investment in business £’000 2023 2022 EBITDA 2,550 2,250 Working capital (186) (143) • Continued investment in the business • Solar panels installed at cost of £0.8m Net capital expenditure (1,166) (235) • Ongoing investment in facility Operating cash flow 1,198 1,872 • Workin
Slide 16: Financing
Financing £m 2023 2022 Cash and cash equivalents 5.8 5.8 Coronavirus Business Interruption Loan (1.4) (1.9) Business loan (0.5) (0.7) Leased liabilities (0.5) (0.4) Net cash 3.4 2.8 • CBILS final payment May 2026 • Business loan final payment June 2026 • Uncommitted overdraft facility of £1.0m UK de
Slide 17: Summary
Summary Médéric Payne CEO dapple® UK design-led specialist flooring company 17
Slide 18: Investing for future growth
Investing for future growth £5.0m investment in manufacturing facility scheduled for completion in Q1 2025 Delivering significant increase in capacity Automation of certain processes using the latest cutting-edge Artificial Intelligence imagery and inspection technology Further enhance the G
Slide 19: Summary
Summary Established brand in a stable marketplace with high barriers to entry due to in-house manufacture, low-cost base and high service proposition Launch of sustainability principles eco2matters in 2022 to help drive the Group’s vision for the future Innovative and sustainably designed prod
Slide 20: Appendices
Appendices UK design-led specialist flooring company 20
Slide 21: A sustainability strategy to deliver commercial success
A sustainability strategy to deliver commercial success Launch of the Group’s The Group’s active pursuit in Recovery take-back service Launch of Project Zero sustainability principles reducing the Global to help customers be more Landfill in 2022, a key aligned with Warming Potential (GWP) of sustai
Slide 22: European carpet tile consumption by country
European carpet tile consumption by country 2024 forecast consumption - m² Benelux • 2023 saw a reduction of 3.1% in European carpet 9% Central Europe tile consumption 3% UK & ROI 30% • The Group outperformed the market with sales increase of 14.1% on 2022 East Europe 15% Southern Europe France 4% 1
Slide 23: UK & ROI tile consumption
UK & ROI tile consumption Total consumption - m² Tufted Loop Pile - m² Needlepunch Printed 13% Loop 15% Tufted Cut Pile 3% Level Loop 34% Level Design Loop Multi-Level 4% Design Textured Tufted Loop Loop Loop Pile 45% 2% 84% Source: AJCP – 2023 World Map – Contract Carpet Tiles UK design-led special
Slide 24: A recovering European market providing opportunities
A recovering European market providing opportunities Total European consumption - m² • Slow recovery to pre-Covid levels, notably in office space and new buildings 45.0 40.0 • Some market switch to LVT and vinyl in short-term 35.0 post Covid, but returning to carpets due to stronger sustainability c
Slide 25: Five-year record
Five-year record £’000 2023 2022 2021 2020 2019 Revenue 21,102 18,483 15,865 14,554 19,183 Underlying operating profit 1,804 1,652 1,313 698 2,166 Non-recurring items 60 - 275 125 200 Profit before financing costs 1,864 1,652 1,588 823 2,366 Net financing costs (451) (219) (297) (369) (405) Profit b
Slide 26: Advisors
Advisors Singer Capital Markets HSBC Bank plc Broker and Nominated Adviser Bankers London Leeds https://www.singercm.com/ https://www.hsbc.co.uk/ Crowe U.K. LLP Squire Patton Boggs Auditors Solicitors Birmingham Leeds https://www.crowe.com/ https://www.squirepattonboggs.com/en Yellow Jersey PR Limit
Slide 27: Disclaimer
Disclaimer For the purposes of this document, the presentation that follows (the "Presentation") shall mean and include the slides that follow, any oral briefing provided by Airea plc (the "Company") in connection with these slides, any question and answer session that follows that oral presentation
Slide 28: www.aireaplc.co.uk
www.aireaplc.co.uk UK design-led specialist flooring company 28