SIG Reports 17% Revenue Growth

SIG plc has published full year results for the year ended 31 December 2022, advising of a strong year and a platform established for long term growth.

Financial highlights

• Full year Group like-for-like² ("LFL") sales growth of 17%, with revenues of £2.74bn
• Substantial increase in underlying operating profit¹ to £80m, from £41m in 2021
• Good margin progression, with underlying operating profit¹ margin up 110bps to 2.9%
• Pass-through of input cost inflation remained a strong tailwind throughout the year, although at a lower rate in H2 than H1
• Return to positive free cash flow³ for the year
• Further reduction in leverage⁴ to 2.8x (2021: 3.2x) and good liquidity; year end net debt of £444.0m post-IFRS 16 (2021: £365.0m) and £160.3m pre-IFRS 16 (2021: £128.6m)

Strategic highlights

• Benefits of a broad geographic footprint (58% of revenues from outside UK) helped to mitigate volatile market conditions:

          - Continuing good performance in France, with both businesses trading at >5% operating            margin

          - Strong performance in Germany driven by execution of strategy, with operating profit                margin up 280bps to 3.7%

          - UK Interiors returned to profitability

• Strengthened operational and commercial platform helped drive market share gains, with improved customer engagement

• Two acquisitions completed in the year for total potential consideration of £39m

• Good ESG progress: 10% reduction in emissions⁵ driven by increased use of renewable energy and improved fleet mix (% electric/hybrid); continuing increase in employee engagement ("eNPS")

• New CEO Gavin Slark (formerly CEO of Grafton Group plc) joined the Group on 1 February 2023

Commenting, Gavin Slark, Chief Executive Officer, said:

"Having joined last month, I would like to thank Steve Francis, the Executive Leadership Team and all of our people across our six European geographies who contributed to SIG's strong performance in 2022.

Over my first five weeks I have already had the opportunity to visit a number of our teams, operations, and branches.  I look forward to working with all my colleagues to drive the business forward.

Trading in the first two months of 2023 saw mid-single digit like-for-like revenue growth, with the continued effects of input price inflation more than offsetting year-over-year volume declines.  Market conditions continue to vary across our geographic footprint, but overall we expect weaker demand conditions to prevail during 2023, offset by a continued tailwind from input price inflation, albeit the latter will continue to moderate further this year.

As a European market leader in the supply of specialist insulation, SIG is well-positioned to benefit from long-term structural growth drivers, notably sustainable construction.  There is an increasing focus on the need to reduce building emissions, to increase energy efficiency and to use more sustainable materials.

With a strengthened financial position, good strategic momentum, pan-European footprint, and a diverse portfolio with opportunity for growth, I am confident in our ability to manage short-term market weakness during 2023 while maintaining a focus on sustainable long term value creation for all our stakeholders."  

Source : SIG plc

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