Strix Group plc (LON:KETL) Chief Executive Officer Mark Bartlett caught up with DirectorsTalk for an exclusive interview to discuss highlights from their full-year results, how the business performed across its three product areas, what the LAICA acquisition brings to the business, sustainability and what we can expect from the company over the next year.
Q1: Mark, Strix Group have released 2021 full-year results this morning, can you just take us through the highlights?
A1: It’s been a very solid year for us. Revenues have increased by 28.8^ on a constant currency basis and we secured an increase in our adjusted EBITDA of 6.3% so that, coupled with our cash generative business, has really allowed us to increase our dividend to 8.35p per share which is in line with our dividend policy.
Throughout the year, you would’ve have seen some real positives, we had the integration of the acquisition of LAICA, that has performed extremely well and the team secured more than 20% growth despite all of the numerous headwinds.
We completed a new factory in China which has more than doubled our manufacturing space, on time, on budget and during a pandemic. Tremendous credit has to go to the team in China as they’ve even increased the number of fully automated production lines to 73% during that build.
We also saw some positive new product releases, that included the Aurora and the Dual Flo, all of which have exceptional sustainability benefits.
Talking about sustainability, from an ESG perspective, we made a commitment to the net zero scope 1 and 2 by 2023 and we’re well on track to achieve that.
So, overall, a very positive year despite some very significant headwinds.
Q2: How has the company performed across its three product categories; kettle controls, water, and appliances?
A2: The kettle control business continues to be very resilient and robust with a 7% growth and we managed to secure an additional 1% share, taking us now to a global value share of 56% of the market, well on track to our five-year commitment.
In the appliance category, again we saw an outstanding growth of 244% during the year, supported in part by the acquisition of LAICA. We also saw some excellent product releases with the Aurora water station being particularly successful, proving instant chilled, hot or true boiled filtered water on demand.
Finally, the water category also performed well despite some quite significant headwinds, with an 82% growth year-on-year. We have also secured some really strong contracts with major retailers globally giving us increased store listings for the year, particularly with the Aqua Optima brand.
Q3: You mentioned the LAICA acquisition a couple of times now, it completed about 18 months, can you just tell us how the integration is going and what LAICA brought to the company?
A3: The integration is going really well. LAICA, as I say, has an exceptional year in 2021 with growth rates above 20%.
We have started to realise the benefits of cross-selling between our brands within this category now and we’ve launched some really exciting products with Visione being the first Strix-manufactured LAICA appliance. It’s the first induction kettle of its kind with a patented technology providing all the benefits of a kettle on an induction hob.
Of course, location has also been a tremendous benefit as we did have some issues relating to Brexit in 2021, particularly for our Aqua Optima brand, and having that manufacturing facility and warehouse in Europe has removed all of those issues, as from November of last year.
I think definitely worth a shout, finding the people, the roadmap of new products and that Italian passion are really evident and that’s really helped us to secure that positive growth during what was a challenging year.
Q4: Now, you mentioned the launch of the company’s sustainability report and ‘Sustainability, Innovative, Dependable’ strategy. Can you just explain a little bit more in detail what this is?
A4: This is a really important part of our five-year strategy. Back in 2020, we made a commitment to achieve net zero by 2023, we are well on the way to achieving that, and now really working hard on scope 3 and 4 as well, and certainly leading the way I believe in this particular area.
We’ve always had a culture in the business for continuous improvement but I have to say I’m really impressed in the way our people have got behind all aspects of the sustainability initiative within the company.
In particular, in China, we secured the ISO50001 for energy management, just one month after we completed the factory build. I think that really does show our commitment to that sustainability strategy.
Q5: Finally, just looking forward, what can we expect to see from Strix Group in the next year?
A5: I think more of the same, so the same drive and passion to secure our commitments.
We’ve just launched a new website which is certainly well worth a look, a lot more information on there. We have a strong roadmap of new products lined up to drive the growth in our various categories and we will remain focussed on developing sustainable products that will allow consumers to live a safer, more convenient and sustainable life at home.
In addition, we’re continuing to look for strategic acquisitions and they would be incremental to our five-year plan and certainly, we’re engaged in active discussions with a target list of opportunities.
We made a commitment back in 2020 to double the revenues in the five years, we’re just really one full year into that plan, we’re well on track and I hope you can see that we’re committed to delivering against our target.
We really believe we’re establishing a world-leading innovative and sustainable technology business and really working to realise and unleash the full potential of our business.
