Investment case

A success story

Strix offers an attractive investment case with its market leading kettle controls position as well as significant growth opportunities in the water and appliances categories, strongly underpinned by the Group’s focus on ESG and sustainability.

Dominant market position in global kettle controls with high barriers to entry

Expanded its global market value share of the kettle controls market from c.54% to c.55% and medium-term target to grow market share to c.57%

Regulated segments grew with a strong contribution from the UK, North America, Australia and New Zealand offsetting declines in Mainland Europe.

Less Regulated segments also grew, with strong growth in South East Asia, the Middle East and Russia, offsetting declines in South Africa and Eastern Europe. Recovery expected in the Chinese market - particularly affected by COVID-19 - after a year.

Patent portfolio underpins Strix technologies with successful campaigns globally (including China) aimed to remove infringing products and initiate regulatory enforcement actions.

Significant growth opportunities in water and appliances categories

Forecasting revenue CAGR of over 25% in both categories over the next five years, delivering a doubling of Strix Group revenue.

A year of major change for Strix water category, following the acquisition of LAICA in October and the delivery of record sales by the Aqua Optima brand for yet another year.

Launch of the HaloPure technology, followed by a contract obtained in China recently and the evolution of this technology to farming solutions for clean drinking water, which is likely to result in significant incremental business opportunities.

Strong progress in the group’s five-year strategy in the appliances category through own brand and third-party brand launches as well as by entering into new categories such as health and wellness.

Strong ESG credentials with structural growth tailwinds

S

Comprehensive, Board-led sustainability strategy embedded within core business activities and aligned with key and relevant UN Sustainable Development Goals.

Range of initiatives that focus on the full spectrum of Environmental, Social and Governance with baselines established to track improvements and to clearly monitor progress year on year.

KPIs will be set in Q4 following the completion of the new factory as this will have a significant and positive impact on these measures.

Strong free cash flow generation with unique working capital cycle

Customers typically pay in advance, reducing nonpayment risk and increasing cash conversion cycle.

Low requirement for maintenance capex (excluding investment in new factory that remains on schedule to complete in August 2021).

Operating free cash flow (before financing and tax and exceptional factory capex) to EBITDA conversion of 73%.

Market leading adjusted EBITDA margin of 40%

M

Significant investment in automation, as well as ongoing focus on other efficiency measures and strategic initiatives underpinning EBITDA margin uplift. 

Numerous opportunities at LAICA have been identified to improve its margins as the business transitions to Strix’s standard corporate policies.

Increasing the appliance product mix further boosts margins as these are typically more complex technologies that can command a higher price point.

Increased capacity at the new factory allows for in-sourcing of additional products and components with margin benefit.

Extensive patent portfolio and safety actions underpin margins, with campaigns to report infringements and remove counterfeit products from the market.

Low leverage with disciplined Capital Allocation Framework

L

The Group has a conservative balance sheet which provides significant flexibility.

Investment in compelling growth opportunities with particular focus on new product development and commercialisation strategy that support the medium term growth ambition to prudently invest in growth opportunities.

The Board continues to seek strategically compelling acquisition opportunities which further complement its existing product portfolio and R&D capabilities.

Board commitment to the progressive dividend policy linked to underlying earnings has been maintained reflecting the Board’s confidence in the outlook for the
Group.

Strix Plc
Isle of Man, British Isles
+44 (0)1624 829 829
Mon-Fri, 8.00-17.00 (UK Time)
info@strix.com
Mon-Fri, 8.00-17.00 (UK Time)
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