Stelrad Group Plc · LSE:SRAD
Stelrad — H1 2022 Earnings Presentation
25 slides from Stelrad's earnings presentation, Aug 12, 2022
Slide 1: Helping to heat homes sustainably
Helping to heat homes sustainably Stelrad Group plc Results for the six months ended 30 June 2022
Slide 2: Agenda
Results for the period Agenda • Overview • Financial review • Business review • Summary and outlook Trevor Harvey George Letham • Q&A Chief Executive Officer Chief Financial Officer Stelrad Group plc 2
Slide 3: Overview
Overview Trevor Harvey Chief Executive Officer
Slide 4: Interim 2022 financial performance ahead of expectations
2022 interim results summary Interim 2022 financial performance ahead of expectations • Improvement in revenue and adjusted operating profit in all territories. • Sales volumes lower than 2021: – H1 2021 was an exceptional comparative with distributors building stock due to global supply chain conce
Slide 5: Financial review
Financial review George Letham Chief Financial Officer
Slide 6: Financial review highlights
Financial review highlights Interim 2022 financial performance demonstrates Stelrad’s resilient business model and robust strategy Highlights • The Group delivered sales growth of 17.4% in the first half of 2022, increasing Revenue: £150.1m revenues from £127.9 million to £150.1 million. (2021: £127
Slide 7: Strong revenue growth in the first half of 2022, increasing by 17.4% to £150.1 million
Revenue Strong revenue growth in the first half of 2022, increasing by 17.4% to £150.1 million H1 2022 H1 2021 Movement Movement Revenue by geographical market £m £m £m % UK & Ireland 71.5 63.2 8.3 13.1 Europe 64.6 54.9 9.7 17.7 Turkey & International 14.0 9.8 4.2 42.9 Total 150.1 127.9 22.2 17.4 UK
Slide 8: Sales volumes lower than 2021 but significant increase in contribution per radiator
Financial review highlights Sales volumes in first half 2022 lower than 2021 but significant increase in contribution per radiator Radiator volumes sold Premium panel radiator Contribution per radiator volumes sold (pre-IAS 29) 2,710k units 155k units £16.06 43% 16% 8% 171 3,091 155 16.06 147 2,710
Slide 9: Adjusted operating profit improved by 13.1% to £19.0 million
Operating profit Adjusted operating profit improved by 13.1% to £19.0 million, with good progress in all territories during the first half of 2022 H1 2022 H1 2021 Movement Movement Adjusted operating profit £m £m £m % UK & Ireland 12.3 10.3 2.0 19.4 Europe 7.5 6.7 0.8 11.9 Turkey & International 2.0
Slide 10: Cash generation lower than prior year with working capital reverting to seasonal pattern
Cash flow Cash generation lower than prior year with working capital reverting to historical seasonal pattern H1 2022 H1 2021 Movement £m £m £m Operating profit 11.9 17.9 (6.0) Depreciation add back 4.2 3.8 0.4 Exceptional items add back - 1.5 (1.5) Gain on disposal of property plant and equipment (
Slide 11: Net leverage has increased since period end to finance the DL Radiators acquisition
Net debt The Group’s net leverage has increased since period end to finance the acquisition of DL Radiators 30 June 31 Dec • At 30 June 2022, £61.0 million was drawn against the facility and the Group had undrawn available facilities of £19.0 million and 2022 2021 cash of £13.5 million. £m £m • Net
Slide 12: IAS 29 Financial Reporting in Hyperinflationary Economies
IAS 29 Financial Reporting in Hyperinflationary Economies The Group is now required to adopt IAS 29 Financial Reporting in Hyperinflationary Economies in respect of its Turkish subsidiary Statutory Pre-IAS 29 • The table outlines the impact of IAS 29 on the results for the six months ended 30 June 2
Slide 13: Modelling guidance
Outlook Modelling guidance Steel price volatility has continued throughout 2022. Additional selling price increases implemented in all major markets in July 2022. Currency movements do not impact cash gains or losses due to robustness of the business model and natural hedging. DL Radiators e
Slide 14: Business review
Business review Trevor Harvey Chief Executive Officer
Slide 15: 2021 market share growth
2021 market share growth In 2021, Stelrad Group’s market share increased by 1.7 ppts vs 2020, from 16.6% to 18.3% • Stelrad’s significant share in the UK - the European country most affected by Covid-19 in 2020 - impacted the Group’s overall position in 2020. • Stelrad performed most strongly of the
Slide 16: Growing market share
Growing market share In 2021, Stelrad made important gains in share and market position across key countries, providing a strong foundation to meet future market challenges • UK share increased 1.9ppts vs 52.1% 2020 to 52.1%. UK 50.2% 49.7% #1 • In France, Stelrad Group gained #2 market position 26.
Slide 17: Acquisition of DL Radiators aligned with four key strategic objectives
Strategic objectives The acquisition of DL Radiators is strongly aligned with Stelrad Group’s four key strategic objectives Growing market • Stelrad Group is fulfilling the role of market consolidator. 1 share • Facilitates share growth in key geographic markets. • Manufactures a wide range of radia
Slide 18: DL Radiators overview
DL Radiators overview DL Radiators represents an extremely complementary acquisition for Stelrad >60% of sales are in higher 89% of sales are into France, 47% of sales are through the added value design ranges Germany and Italy DIY channel • DL Radiators’ sales will improve • Sales in France reinfor
Slide 19: Sustainability
Sustainability We are developing our ESG strategy to ensure Stelrad is fit for the future At the end of 2021, we set up a task force to develop a comprehensive and well-integrated ESG strategy. Understanding the needs of Stelrad Group’s stakeholders has been central to developing “Fit for the fu
Slide 20: Summary and Outlook
&Stelrad Group plc Summary and Outlook
Slide 21: Summary
Summary Results ahead of expectations are testament to Stelrad’s resilient business model and robust strategy • Improvement in revenue and adjusted operating profit across all territories. Strong results underpin confidence • Lower volumes more than offset by higher revenues and margins per radiator
Slide 22: Questions
&Stelrad Group plc Questions
Slide 23: Appendices
&Stelrad Group plc Appendices
Slide 24: 2022 results overview
2022 results overview H1 2022 H1 2021 Movement Movement Income statement £m £m £m % • Non cash FX loss due to Revenue 150.1 127.9 22.2 17.4 restatement of Turkish balance sheet assets and Adjusted operating profit* 19.0 16.8 2.2 13.1 liabilities due to relative strength of US dollar Exceptional item
Slide 25: DL Radiators overview
DL Radiators overview In July, Stelrad Group acquired leading Italian heat emitter manufacturer DL Radiators for €28.3 million Overview • Based in Moimacco, near Udine, Italy. • Manufactures steel panel, multicolumn steel, aluminium and towel warmer radiators with a volume of c.1 million units in 20