Strix Group plc (LON:KETL) Chief Executive Officer Mark Bartlett caught up with DirectorsTalk for an exclusive interview to discuss interim results, growth in water & appliance categories, the kettle controls market, sustainability agenda and what we can expect from the Group for the rest of the year.
Q1: Strix Group has released its interim results this morning, can you just start by talking us through the highlights?
A1: This has clearly been another challenging macroeconomic and geopolitical environment, but I think the Group has delivered a very robust performance across its three categories. We’ve also made very solid progress towards our 2025 targets that we set out at our Capital Markets day back in 2020.
We made really good progress with our net zero commitments and remain on target to achieve net zero by 2023.
Our new factory is now fully operational and we continue to receive good improvement in efficiency as we manage our cost base, given these challenging times. We’ve now managed to achieve full automation on 77% of our production lines.
We have overcome the various obstacles we’ve reported of supply issues and Brexit within the water category, and we’re now producing and distributing products from both our own factory in China as well as our Italian facilities as well.
Finally, we have managed to secure several quite material contracts within both the water and appliance categories, really enhancing our online sales and network globally, and that really does give us confidence in our midterm targets.
Q2: As you say, the Group has seen growth in both the water and appliances categories and has also been recognised for the domestic appliances that it produces in those categories. Could you tell us more about this and what it actually means for the Group?
A2: These two categories are really important to us as they really are the key growth areas for us in the five year plan that we put out. We have seen very significant process in the global expansion with launches in North America and significantly increased presence across Europe as well in that digital platform.
I think perhaps the most rewarding has been the feedback on our appliances, particularly the Aurora range. Sales for this product have exceeded our expectations and the range has won numerous awards, including the Quiet Mark and also the ‘Sustainable Product of the Year’, which we we’re very pleased to receive.
Q3: Now, you’ve maintained the market leading share position of 56% for the global kettle controls market by value, how is this side of the business performing?
A3: The kettle market has been quite challenging this year and the global market has seen some softening due to the conflict in Ukraine and also some of the recessionary fears in the regulated market.
However, we managed to maintain our market share throughout this period and the market itself has proven very resilient. Historically when you look at this market in such challenging times, we’ve always experienced a drop in demand as we go into these periods, and then we always see a sharp recovery as we exit. Typically, that’s normally one to three quarters, and we’ve already seen two quarters of weakness so far this year so really, it’s just a question of when we start to see the recovery.
We absolutely remain very confident that recovery will come and then our midterm targets will be unaffected and we are very well positioned to maximise the opportunities as that recovery starts to occur.
Q4: You did touch on this earlier, but I know the Group’s sustainability agenda remains a high priority for the company. Are you able to tell us more about it and how it’s developing?
A4: We’re making really good progress here and sustainability really is at the heart of our culture, whether it’s in the new product development, whether it’s in operations or in continuous improvement initiatives that we’ve got across the company. It’s really encouraging just to see how our employees have embraced that culture.
As I say, we are well on track to deliver our net zero and we’re working really hard now with our customers and suppliers on Scope 3.
We have put out an updated report this morning on our website and one thing you will note that in 2021, we actually were running for a period of time, at least two factories as we brought out the new factory. Now, we’ve just got the one custom built factory so we’re really going to start to see some very, very positive improvements as we look forward now with all the features and benefits that have been built into the new factory.
That will include things like improved efficiencies, we’ve now got 70% of our production lines, I mentioned, automated, but also reduction in energy consumption and significantly improved facilities for our staff.
Q5: Just looking forward, what else can we expect to see from Strix Group for the rest of the year?
A5: Still a lot for us to do. So far this year, we’ve launched 89 SKU’s into the market and we’re looking to deliver on 150 by the end of the year, so there’s still plenty to do, and all of those remain on target.
We’re going to see increased cross-selling between the LAICA and the Aqua Optima brands. If you go on Amazon today, you can see those in both the UK and Italy so very good progress being made on the integration of LAICA, which will continue as we go forward .
We continue to drive sales within that water and appliance category, by adding additional sales channels to really maximise that opportunity through the rest of the year.