Strix Group Plc · LSE:KETL
Strix — Investor Day (November 2020)
57 slides from Strix's investor day presentation, Nov 3, 2020
Slide 1: Capital Markets Day Presentation
Capital Markets Day Presentation 3rd November 2020 This document is the property of Strix Ltd and the information contained is CONFIDENTIAL. The drawings and information may not be reproduced or used without the prior written consent of Strix Ltd. The designs and concepts herein are patent and copyr
Slide 2: Agenda
Agenda Capital Markets Day 2020 2
Slide 3: Agenda
Agenda 01 Introductions & Executive Summary Financial Projections 02 Categories (KJC, SDA, Water) HaloPure New Factory & Automation 03 ESG / Sustainability 04 Laica S.p.A 05 Questions Capital Markets Day 2020 3
Slide 4: Introductions
Introductions Capital Markets Day 2020 4
Slide 5: Introduction to the Non-Execs
Introduction to the Non-Execs Gary Lamb Non-Executive Chairman of the Board Gary joined the Plc Board in 2017 and is a qualified accountant (CIMA) who has gained extensive business experience over the past 25 years in numerous senior roles. Mark Kirkland Non-Executive Director Mark joined the Plc Bo
Slide 6: Introduction to Officers
Introduction to Officers Mark Bartlett Chief Executive Officer Mark joined Strix in 2006. He leads the organisation, setting the strategic direction and policy and works closely with his leadership team to translate Strix’s strategy into tangible results. Raudres Wong Chief Financial Officer Raudres
Slide 7: Operational Board
Operational Board Nick Gibbs Matt Thomas David Trustrum Engineering Director Director of Group Commercial Director Joined 1992 Manufacturing, Engineering Joined 1991 and Customer Quality Directs Global Directs Commercial Joined 2003, Leads Global engineering team manufacturing engineering teams Oper
Slide 8: Investment Proposition
Investment Proposition Robust and resilient COVID and Brexit Position High Quality, resilient and robust business model which benefits from geographic and product diversification Manufacturing locations in Isle of Man, Italy and China, all Defensive end markets are holding up well and strong order b
Slide 9: Executive Summary
Executive Summary Shaping a safer, sustainable future Our performance in 2020: Our Aspirations for the future: Modest growth projected in PBT versus prior year Double Group revenues over the next 5 years primarily through organic growth Successful acquisition of Laica securing >20% revenue growth in
Slide 10: Financials
Financials Capital Markets Day 2020 10
Slide 11: Expecting to deliver modest growth in FY 2020 PBT
Expecting to deliver modest growth in FY 2020 PBT H1 Gross Profit loss Jul – Oct YoY GP Var H2 YoY OH LAICA Nov-Dec YoY GP Var (£2.9m) (£0.4m) £0.2m £0.2m (£0.8m) H1 Overhead savings H2 YoY GP VAR £2.6m £2.6m £1.5m (£0.4m) Jul – Oct YoY Gross profit variance H1 OVERHEADS £30.2m (£2.9m) c.£30.4m £2.6
Slide 12: Projected Revenue 2020 – 2025
Projected Revenue 2020 – 2025 Revenue Growth £199m 200 £ 34 m Appliances projected revenue growth 209% 150 From 2020 Pro Forma to 2025 £94m £111m Projected Annual Revenue £ms £ 72 m Water projected revenue growth £ 11 m Appliances 100 £2m Water 227% £ 22 m From 2020 Pro Forma to £ 13 m KC 2025 Kettl
Slide 13: Projected Gross Profit (2020 – 2025)
Projected Gross Profit (2020 – 2025) Gross Profit Growth £67m Appliances Appliances projected gross profit Water growth 60 Kettles £ 11 m 267% From 2020 Pro Forma to 2025 Projected Annual Gross Profit £ms £39m £43m £ 18 m Water 45 projected gross profit £1m £3m growth £3m £5m 260% From 2020 Pro Form
Slide 14: Categories: Kettle Controls
Categories: Kettle Controls Capital Markets Day 2020 14
Slide 15: 2020 – 2025 Revenue Growth Drivers: Kettle Controls
2020 – 2025 Revenue Growth Drivers Kettle Controls % growth Market Growth 3% CAGR 3% 2% 2020 – 2025* 14% *Incl. Covid-Rebound in 2021 New Products c 10M U9 series controls sold in 2020 Market Share 54% 57% [Global Value Share] Commercial Initiatives 2% Growth 2020-2025 KJC Baseline Value Market Gr
Slide 16: Market Growth: Kettle Controls
Market Growth +14% (3% CAGR) Kettle Controls Strix continues to target growth in key categories China kettle volumes are expected to increase by and regions. Euromonitor predicts a 39% increase in 14% or almost 7M pieces from 2020 – 2024 whilst kettle retail sales value from 2020-2024 in USA, ASP is
Slide 17: NPD – Kettle Controls
NPD – Kettle Controls +3% Short-Medium Term: Next Generation Control Longer Term: Value Driving Suite Development Features & Benefits 15 Amp control Cost Savings Sustainability: Design with intent Connectivity & IoT expansion; faster speed OEM Benefits across the product lifecycle. to boil tar
Slide 18: Commercial Excellence - Our Key Initiatives
Commercial Excellence - Our Key Initiatives +2% Invest in US Market; Reviewed Global Pricing Drive consumer Drive Consumer Strategy & Policy Refresh Awareness of Quality Awareness & Increase • Value & Margin Incentives & Reliability through Household Penetration • MOQ & Small Order Surcharge Promoti
Slide 19: Categories: Appliances
Categories: Appliances Capital Markets Day 2020 19
Slide 20: 2020 – 2025 Revenue Growth Drivers: Appliances
2020 – 2025 Revenue Growth Drivers Appliances % growth Market Growth 9% 9% CAGR 147% 2020 - 2025 Market Expansion From UK Global Baby Care 54% Category Expansion Garment Care > 200MPA pcs Market Size by 2025 Commercial Initiatives 9% *Source: Statista Appliances Baseline Market Growth New Products
Slide 21: Market Growth: SDA & Baby Care
+54% Market Growth: SDA & Baby Care (9% CAGR) Euromonitor predicts over Statista predicts a $27.7 Billion GFK report 9% growth in 17 million additional Small increase in the Global baby care SDA during H1 2020 Cooking Appliances to be sold product market from in China by 2024 2020-2026 Sources: Euro
Slide 22: NPD - Small Domestic Appliances
NPD - Small Domestic Appliances +147% Mission: Our Roadmap: To deliver innovative appliances that take the is therefore built upon convenient, simple and frustrations out of everyday tasks, sustainably. sustainable solutions. Short-Medium Term: Expand HWoD product range, bolster & refine Medium-Long
Slide 23: NPD - Baby Care
NPD - Baby Care +147% Mission: Vision: Make parents’ life easier whilst keeping their To become the go to supplier for innovative baby babies safe with our reliable technology. care appliance ranges. NAM APAC 2021 2021/22 2022 & Launching steriliser Formula Prep dryer across APAC expansion beyon
Slide 24: Commercial Excellence: Our Key Initiatives
Commercial Excellence: Our Key Initiatives +9% Initiative Objective & Description Improve Make Desirable products, consistently. Leverage product range to capture Design value across multiple price points, whilst looking to develop product mix via Execution Strix Home initiative. Focus on a streamli
Slide 25: Categories: Water
Categories: Water Capital Markets Day 2020 25
Slide 26: 2020 – 2025 Revenue Growth Drivers: Water
2020 – 2025 Revenue Growth Drivers Water (Commercial & Domestic) % growth Market Growth 48% 15.6% CAGR 70% 105% New Products 20+ Product Launches Global Position From #5 to #2 Market Expansion China & North America Baseline Value Market Growth New Products Commercial Initiatives 2025 Target Capital
Slide 27: Market Growth: Water
+105% Market Growth: Water (15.4% CAGR) Strix continues to target key growth regions such as Chinese market is expected to generate a revenue of North America and China. The USA Market has 69% USD 9.0 Billion by 2025. Driven largely by urbanisation household penetration, and a low brand loyalty and
Slide 28: NPD – Domestic Water (On-The-Go)
NPD – Domestic Water (On-The-Go) +70% Short Term: Medium-Long Term: Expand Filtration bottle product range, Sustainable Materials and emerging contaminant protection & Innovative Designs Waste Building Specialty Consumer Polyester Blocks Copolyesters Products Roadmap • Lighter Weight • Ergonomic Des
Slide 29: NPD – Domestic Water (At Home)
NPD – Domestic Water (At Home) +70% Short Term: Medium-Long Term: Expand water device installations with a Expand & Innovate a range range of Jugs and Water Stations of filtration technology Roadmap Tap Filtration Systems Capital Markets Day 2020 29
Slide 30: Commercial Excellence: Our Key Initiatives
Commercial Excellence: Our Key Initiatives +48% Initiative Objective & Description Global Strategic and aggressive expansion into the largest and fastest growing water Distribution markets in China and North America. Approach 3 Global Insight driven product and brand stories that resonate and win in
Slide 31: HaloPure
HaloPure Capital Markets Day 2020 31
Slide 32: HaloPure Overview
HaloPure Overview Strategy has been redefined following the acquisition to focus on Sterilization and Purification of water Initial geographical focus has been applied to China given the size of the opportunity and “specialists” within the Halosource team Opportunity for the livestock application is
Slide 33: HaloPure; Commercial Water
HaloPure; Commercial Water +62% Benefits & Value to Livestock Farming: • Providing animals with safer and cleaner • Increase animal weight & egg production quality drinking water rate • Cutting off waterborne disease transmission • Improvement in farmer’s economic return by killing pathogenic microo
Slide 34: Route to Market - Halopure
Route to Market - Halopure Market Characteristics 4 Routes • A specialised and price sensitive industry with lots of specialist knowledge required • Market promotion in the industry is mostly through seminars and exhibitions 4 Routes to market • Strategic partner – customised designs for equipment s
Slide 35: New Factory & Automation
New Factory & Automation Capital Markets Day 2020 35
Slide 36: New Factory
New Factory Milestones • The main build construction completed in July • Factory move to be completed by July 2021 • Electronic installation and inner building work is • Fully operational in August 2021 in progress • Project continues to run on schedule and below • Target to complete all the constru
Slide 37: Automation
Automation 32.7m c.85% U90 series controls machine efficiency achieved on sold to date new U90 Automation line +53% 67% improvement in customer quality of lines expected to results (ppm) from 2019 automated in 2020 Capital Markets Day 2020 37
Slide 38: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) Capital Markets Day 2020 38
Slide 39: Executive Summary
Executive Summary Keys to our sustainability strategy: Impact of our strategy: Embed functional excellence Reduction in single use plastics across ALL disciplines Reduction in raw/virgin materials within our production processes High exacting standard of products Efficient products limiting the life
Slide 40: Our Products and their Potential Global Impact
Our Products and their Potential Global Impact Strix sold c.5.6m filters in 2019 Global Kettle penetration from equating to 38% to 50% would save 14bn kg CO2 56m single use plastic bottles assuming a energy p.a. 10% conversion Our Dual Flo appliance as part of our 2 second saving in steam USA Kettle
Slide 41: Key pillars of Strix's sustainability strategy
Key pillars of Strix’s sustainability strategy SOLUTIONS FOR To develop products that reduce the impact on the environment, particularly reduction in SUSTAINABLE LIVING energy consumption in our key kettle market, and promote benefits to customers. PROMOTE CUSTOMER Our efforts are encompassed by Str
Slide 42: Kettle controls
Kettle controls SDC Issue Description Strix solutions Examples Improved filling visibility Average UK kettle 30% Auto volume kettles Kettle overfill overfilled Dual chamber kettles One cup systems Ensure access to affordable, reliable, sustainable and modern Delayed switch-off to ensure Technologies
Slide 43: Kettle – efficient method of boiling water
Kettle –efficient method of boiling water Key phase Kettles are the most of lifecycle efficient way of boiling water • In-use accounts for c.95 % • Efficient energy transfer, low energy leakage of whole life emissions for • Average UK kettle uses 167kWh of electricity a year the average kettle (c.5%
Slide 44: Sustainability
Sustainability Strix has been driving down the use of Scarce Resources Many of our product Silver reduction innovations in recent years (U18 as a baseline) have been focused on 100% reducing energy in use, which 56% represents about 95% of the 40% 46% 32% 28% Energy footprint for a kettle. 17% Over
Slide 45: Water and appliance categories
Water and appliance categories SDG Strix solutions Examples Ensure healthy lives and Tommee Tippee prep machines deliver safe powder milk promote well-being for all at for babies. Expanding technology into Asia and North all ages America. Ensure availability and HaloSource has brought new technology
Slide 46: Hot Cup Case Study
Hot Cup Case Study Strix have sold 3 Million Hot Cups to date Assuming consumers use five times per day, and have boiled only the water they need through Hot Cup as opposed to boiling double the savings to date are; The total saving to date is; £20,000,000 Enough to power Totalling Equivalent to 34,
Slide 47: Hot Water on Demand
Hot Water on Demand • Kettle lifetime energy footprint studies show that the energy consumed in ‘use’ (96%) is far greater than the energy consumed in any other stage of the product life-cycle. • Internal research also shows that consumers boil up to 100% more water than what they require. • Strix’s
Slide 48: Internal operations
Internal operations Current position Current actions Future Plans Energy Electricity intensity Increased automation New Chinese facility improved 3% in 2019 Extend IoM recovery system Further automation efficiency ISO5001 implementation in ISO5001 (energy process management) Emissions GHG intensity
Slide 49: Medium term plans
Medium term plans Scope 1 & 2. Look to adopt ISO5001; assess renewable opportunities in all key locations. EMISSIONS Scope 3 reassess business travel policy; improved auditing/collaboration with suppliers. Continued development of recycle/reuse particularly of packaging. Develop circular economy RES
Slide 50: LAICA S.p.A
LAICA S.p.A Capital Markets Day 2020 50
Slide 51: Executive Summary
Executive Summary Strategy: Laica overview: Drive sales growth to greater than €30m in 5 years Established in Vicenza, Italy in 1974 New product development will include: instant filter Product range comprises two main areas; units, tap filters and baby formula makers - Water treatment - Healthy lif
Slide 52: Laica Overview
Laica Overview Revenue split by Laica Projected Sales Revenue geography (FY19) RoW, 6% 35 Water Projected revenue growth Appliance Europe ex 25 Italy, 20% 60% From 2021 to 2025 15 €ms sales 5 €20.4m -5 2020 2020 2021 2022 2023 2024 2025 FY 20 revenue PRO FORMA Italy, 75% €2.5m FY 20 EBITDA DEFERRED
Slide 53: Mission and Vision
Mission and Vision Mission: Vision: Laica is committed to offering functional Laica designs innovative products which provide products that support your everyday life satisfaction and gratification of consumers' desires, at home with the people we love. with respect for the environment and for the f
Slide 54: Strategic Fit
Strategic Fit 1 Growth markets: Laica operates in both the Water and Appliance categories - the perfect fit with Strix’s growth aspirations Market positioning: Laica, Aqua Optima and Astrea will become the challenger brand with the aspiration and drive to become the 2 no. 2 player globally 3 Global
Slide 55: Synergies
Synergies • Expansion of LAICA’s revenue mix using Strix’s global marketing and sales network Revenue Cross-selling synergies • Cross-selling and up-selling of Aqua Optima and LAICA’s established product range and NPD roadmap Marketing • Consolidation of marketing expertise significantly expanding c
Slide 56: Capital Market Day Presentation
Capital Market Day Presentation 56
Slide 57: Questions
Questions Capital Markets Day 2020 57