Slide 1: Record results underpinned by our resilient business model
Record results underpinned by our resilient business model Stelrad Group plc Results for the year ended 31 December 2022
Slide 2: Agenda
RESULTS FOR THE YEAR Agenda • Overview • Financial review • Business review • Summary and outlook • Q&A Trevor Harvey George Letham Chief Executive Officer Chief Financial Officer Stelrad Group plc 2
Slide 3: Overview
Overview Trevor Harvey Chief Executive Officer
Slide 4: Stelrad's resilient business model delivered record results in 2022
2022 RESULTS SUMMARY Stelrad’s resilient business model delivered record results in 2022 • Revenue, adjusted operating profit and contribution per radiator all increased to record levels, driven by proactive margin management and continuous operational improvement • Further successful production lin
Slide 5: Financial review
Financial review George Letham Chief Financial Officer
Slide 6: Record results underpinned by our resilient business model
FINANCIAL REVIEW HIGHLIGHTS Record results underpinned by our resilient business model • Record financial performance as a result of Stelrad’s resilient business model Revenue (pre-IAS 29): £312.1m (2021: £272.3m) • Revenue (pre-IAS 29) grew by 14.6% (3.0% like-for-like) • Contribution per radiator
Slide 7: Our robust financial performance positions the Group for continuing growth
FINANCIAL REVIEW HIGHLIGHTS Our robust financial performance positions the Group for continuing growth Revenue (pre-IAS 29) Adjusted operating profit Adjusted free cash flow Adjusted EPS £312.1m £34.0m £17.2m 19.11p 2022 312.1 2022 34.0 2022 17.2 2022 19.11 2021 272.3 2021 33.2 2021 21.2 2021 16.92
Slide 8: Strong growth in contribution per radiator more than offsets sales volume shortfall
FINANCIAL REVIEW HIGHLIGHTS Strong growth in contribution per radiator more than offsets sales volume shortfall Radiator volumes sold Premium panel radiator volumes sold Contribution per radiator (pre-IAS 29) 5,404k units 304k units £16.01 2022 5,404 2022 304 2022 16.01 2021 5,952 2021 346 2021 13.7
Slide 9: Revenue growth in all territories supported by the acquisition of DL Radiators
REVENUE Revenue growth in all territories supported by the acquisition of DL Radiators 2022 2022 2021 Movement Movement Revenue (pre-IAS 29) by geographical market £m % of total £m £m % UK & Ireland 138.9 44.5 130.4 8.5 6.5 Europe 147.9 47.4 118.1 29.8 25.3 Turkey & International 25.3 8.1 23.8 1.5 6
Slide 10: Adjusted operating profit rose by 2.4% to a record £34.0 million
OPERATING PROFIT Adjusted operating profit rose by 2.4% to a record £34.0 million, showing resilience in tough market conditions 2022 2021 Movement Movement Adjusted operating profit by geographical market £m £m £m % UK & Ireland 22.7 21.6 1.1 5.2 Europe 13.9 12.9 1.0 7.3 Turkey & International 2.1
Slide 11: Strong cash generation with adjusted free cash flow of £17.2 million
CASH FLOW Strong cash generation with adjusted free cash flow of £17.2 million 2022 2021 Movement £m £m £m EBITDA 42.2 40.6 1.6 Gain on disposal of property plant and equipment (0.2) (0.2) — Share-based payments 0.3 — 0.3 Working capital adjustments (adjusted for foreign exchange) (9.8) (5.7) (4.1)
Slide 12: The Group's net leverage has increased to finance the acquisition of DL Radiators
NET DEBT The Group’s net leverage has increased to finance the acquisition of DL Radiators 2022 2021 £m £m Revolving credit facility - GBP 55.3 56.5 Revolving credit facility - Euro 10.6 — Term loan 25.1 — Cash (22.6) (15.6) Net debt before financial leases 68.4 40.9 Finance leases 10.0 9.3 Net debt
Slide 13: Technical guidance
OUTLOOK Technical guidance • Sales volumes anticipated to return to usual seasonal trends in 2023 after the unseasonably strong first half performance in 2022 • Contribution per radiator in 2023 will benefit from decrease in lower margin new build volumes • Reduction in steel prices since Q2 2022 pe
Slide 14: Business review
Business review Trevor Harvey Chief Executive Officer
Slide 15: Stelrad is a leading player in the heat emitter market, with an effective multibrand strategy
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Stelrad is a leading player in the heat emitter market, with an effective multibrand strategy Stelrad operates in ten core steel panel radiator markets: • UK #1 52% share • Belgium #1 38% share • Netherlands #1 46% share • Ireland #1 53% share •
Slide 16: Stelrad's historic market outperformance demonstrates the Group's long-term resilience
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Stelrad’s historic market outperformance demonstrates the Group’s long-term resilience • Since 2000, combined share in our ten core markets increased by 7.3 ppts and contribution per radiator rose from £8 to £16, due to Stelrad’s: – Strong, long
Slide 17: Strong, long-lasting customer relationships are key to our success
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Strong, long-lasting customer relationships are key to our success • Continued to develop our business with leading pan-European distributor Saint-Gobain in France, Sweden and Denmark, overall volume increasing by 7.0% versus 2021 • Introduced t
Slide 18: Flexible, low-cost manufacturing drives the Group's competitive advantage
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Flexible, low-cost manufacturing drives the Group’s competitive advantage • Continue to invest following the £25m programme of investment in our operational facilities between 2015 and 2021 • Completed further production line transfers to our lo
Slide 19: Stelrad provides market-leading product availability and customer service performance
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Stelrad provides market-leading product availability and customer service performance • Stelrad’s market-leading product availability provides clear competitive advantage • Stelrad has the largest radiator distribution centres in the UK and main
Slide 20: Stelrad's resilient business model has enabled market share growth
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Stelrad’s resilient business model has enabled market share growth • Since 2018, Stelrad has outperformed its peers in market share gains • Share increased by 0.7ppts, from 17.7% in 2018 to 18.4% in 2021 • Following the acquisition of DL Radiato
Slide 21: DL Radiators provides attractive growth and synergies
STELRAD IS WELL-POSITIONED TO PROFIT FROM HEALTHY LONGER-TERM FUNDAMENTALS DL Radiators provides attractive growth and synergies • Stelrad’s market position will move from #5 to #3 in Germany following the acquisition of DL Radiators • Commissioning a new, state-of-the-art production line at Moimacc
Slide 22: A significant replacement market offers growth potential in premium design radiators
STELRAD IS WELL-POSITIONED TO PROFIT FROM HEALTHY LONGER-TERM FUNDAMENTALS A significant replacement market offers growth potential in premium design radiators • Replacement represents 69% of steel panel radiator volume in Western Europe, 75% in the UK, providing insulation from new build cyclicalit
Slide 23: The regulatory backdrop for decarbonisation remains supportive
STELRAD IS WELL-POSITIONED TO PROFIT FROM HEALTHY LONGER-TERM FUNDAMENTALS The regulatory backdrop for decarbonisation remains supportive EU UK Reduce net greenhouse gas emissions Reduce net greenhouse gas emissions by ≥ 55% by 2030 by ≥ 78% by 2035 • 2021 - mandatory for all new buildings to be • B
Slide 24: Stelrad is innovating to meet growing demand for low and zero carbon heating systems
STELRAD IS WELL-POSITIONED TO PROFIT FROM HEALTHY LONGER-TERM FUNDAMENTALS Stelrad is innovating to meet growing demand for low and zero carbon heating systems • Continue to expand our portfolio of higher output heat emitters, including 900mm heights, vertical radiators and triple panel, triple conv
Slide 25: Sustainability is increasingly at the heart of Stelrad's business model
STELRAD IS WELL-POSITIONED TO PROFIT FROM HEALTHY LONGER-TERM FUNDAMENTALS Sustainability is increasingly at the heart of Stelrad’s business model • Fit for the Future sustainability framework • Stelrad’s core purpose: helping to heat homes sustainably • Two strategic pillars, driving better environ
Slide 26: Summary and outlook
Summary and outlook Trevor Harvey Chief Executive Officer
Slide 27: Stelrad's four key strategic objectives provide clear direction
RECORD RESULTS UNDERPINNED BY RESILIENT BUSINESS MODEL Stelrad’s four key strategic objectives provide clear direction Growing market share 1 Improving product mix 2 Optimising routes 3 Positioning effectively 4 to market for decarbonisation • Strive for cost leadership • Accelerate upselling to • A
Slide 28: In 2022, Stelrad delivered record results in a challenging macroeconomic environment
SUMMARY In 2022, Stelrad delivered record results in a challenging macroeconomic environment… …underpinned by Stelrad’s resilient and sustainable business model... • Powerful brands • Strong, long-lasting customer relationships • Flexible, low-cost manufacturing • Market-leading product availability
Slide 29: Questions
@Stelrad Group plc
Slide 30: Appendices
@Stelrad Group plc Appendices
Slide 31: The Group was required to adopt IAS 29 Financial Reporting in Hyperinflationary Economies
IAS 29 FINANCIAL REPORTING IN HYPERINFLATIONARY ECONOMIES The Group was required to adopt IAS 29 Financial Reporting in Hyperinflationary Economies during 2022 in respect of its Turkish subsidiary Statutory Pre-IAS 29 • The table outlines the impact of IAS 29 on the position IAS 29 position results
Slide 32: Consolidated income statement summary
CONSOLIDATED INCOME STATEMENT SUMMARY 2022 2021 Movement Movement £m £m £m % Revenue (post-IAS 29) 316.3 272.3 44.0 16.2 • Non cash FX loss due to restatement of Turkish Revenue (pre-IAS 29) 312.1 272.3 39.8 14.6 balance sheet assets and liabilities due to relative strength of US dollar Adjusted ope