REG - SIG PLC - Full Year Trading Update

SIGAnnouncement

11/01/2022 07:05

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RNS Number : 9958X  SIG PLC  11 January 2022

11 January 2022

SIG plc: 2021 Full Year Trading Update

 

SIG plc ("SIG", or "the Group") today issues a trading update for the year
ended 31 December 2021 ("FY21").

 

Highlights

·    2021 a pivotal and productive year for the Group.  Strong momentum
exiting the year, with Return to Growth strategy delivering results ahead of
plan

·    Full year and H2 sales growth of 8% and 15% respectively against the
non Covid-affected 2019 comparators.  Accelerating growth trend through the
year, driven most notably by UK Interiors

·    Profitability increasingly positive, with the trading performance
driving several upgrades during the year

·    Refinancing completed in late 2021 - providing a long-term platform
to support strategic growth ambitions

 

Summary

The Group's Return to Growth strategy is delivering significant progress,
including improved organic sales performance. The performance, driven by our
strategic initiatives, has also been supported by robust demand across all key
end markets, partially offset by well documented industry wide supply
constraints.  Inflationary increases in input costs have been well managed,
with the direct pass through of these reflected in the reported sales figures.

 

As a result of the above, and subject to audit, the Board expects to report
FY21 revenues from underlying operations(1) of £2,292m and an underlying(2)
operating profit no less than £40m, the latter as announced in mid-December.

 

The Group expects to report net debt, as at 31 December 2021, of approximately
£364m on a post IFRS 16 basis, with gross cash balances of £145m.  Net debt
on a pre IFRS 16 basis is expected to be £129m.  As previously guided, the
Group held higher than normal inventory levels at the year-end as part of the
proactive strategy to optimise customer service, and especially so at a time
of supply shortages.  As previously announced, the Group completed a €300m
(£253m) bond issue on 18 November 2021, and at the same time established a
new revolving credit facility of £50m, which remains undrawn.

 

Trading performance

FY21 like for like(3) ("LFL") revenues grew 24% vs prior year, which was
distorted by Covid, notably in H1, and 8% vs 2019.  Reported Group revenues
from underlying operations were 22% higher in the year vs 2020, including a 3%
adverse currency movement

 

 

 LFL sales growth  H1   Q3   Q4   H2   FY   FY 2021 sales

 2021 vs 2020
                                            £m
 UK Interiors      54%  30%  21%  26%  38%  508
 UK Exteriors      58%  24%  17%  20%  36%  422
 UK                56%  27%  19%  23%  37%  930

 France Interiors  38%  2%   10%  6%   20%  196
 France Exteriors  34%  6%   17%  12%  22%  406
 Germany           11%  7%   9%   8%   10%  393
 Poland            22%  44%  46%  45%  34%  187
 Benelux           2%   0%   17%  9%   5%   92
 Ireland           14%  18%  9%   14%  14%  88
 EU                22%  11%  16%  14%  17%  1,362

 Group             33%  17%  17%  17%  24%  2,292

 

 LFL sales growth  H1     Q3     Q4    H2    FY

 2021 vs 2019

 UK Interiors      (19)%  0%     15%   7%    (8)%
 UK Exteriors      14%    26%    29%   28%   21%
 UK                (7)%   10%    22%   15%   4%

 France Interiors  8%     1%     13%   7%    7%
 France Exteriors  19%    11%    40%   25%   22%
 Germany           1%     3%     12%   7%    4%
 Poland            20%    33%    41%   36%   29%
 Benelux           (10)%  (12)%  (1)%  (6)%  (8)%
 Ireland           (21)%  6%     15%   10%   (5)%
 EU                7%     8%     22%   15%   11%

 Group             1%     9%     22%   15%   8%

 

In the UK Interiors business, the strategic and operational changes made since
July 2020 continue to drive the business's return towards its previous market
position and performance.  The UK Exteriors business continued to perform
strongly, helped by robust demand in RMI. The UK business overall returned to
profitability for the year, with Interiors returning to profit in H2.

 

Performance in the EU was also encouraging in H2, with a good improvement in
Q4 growth.  The performance remains strong in our French businesses, with the
Exteriors business in particular maintaining good growth in Q4 despite some
strong comparators.  Our Polish business continued to perform strongly
against both 2020 and 2019 comparators, and was helped further by an
especially high inflationary impact.  Our Germany and Benelux businesses both
have new, experienced leadership in place, and we are confident that they will
continue to build on the early signs of improvement already seen in Q4.
Ireland was, as anticipated, a further driver for the H2 acceleration vs 2019,
rebounding after the H1 impact of local Covid-related restrictions.

 

Pass through of product price inflation added to the top line in all
geographies, to an increasing degree in H2.  We estimate the impact on
revenue for the full year to be around 6-7%.  Profitability continued to
improve in H2 compared to the first half, with underlying operating profit
approximately doubling in H2 vs H1.

 

Outlook

The Board believes the Group is well placed to build on the significant
progress made in 2021.  Whilst the Covid-19 backdrop may continue to create
some market uncertainty, the fundamentals of the Group's markets remain sound,
notably with the increasingly robust Europe-wide commitments on energy
efficiency and carbon reduction.

Our order books continue to be robust, and we remain confident in the
effectiveness of our supply chain management in meeting customer requirements
and continuing to manage any potential volatility in supply and in input
costs.  As a result, the Board is confident that the momentum built in 2021
will continue in 2022 and, providing there is no material disruption to either
our business or end markets, expects the Group to deliver solid organic
revenue growth in the coming year.

The numbers in this update remain subject to final close procedures and to
audit.

 

1. Underlying operations excludes businesses divested or closed, or which the
Board has resolved to divest or close.

2. Underlying represents the results before Other items. Other items relate to
the amortisation of acquired intangibles, impairment charges, profits and
losses on agreed sale or closure of non-core businesses and associated
impairment charges, net operating profits and losses attributable to
businesses identified as non-core, net restructuring costs, and other
non-underlying profits or losses.

3. Like-for-like is defined as sales per working day in constant currency,
excluding completed acquisitions and disposals.

 

Contacts

 SIG plc                                                     +44 (0) 114 285 6300
 Steve Francis       Chief Executive Officer
 Ian Ashton          Chief Financial Officer

 FTI Consulting                                              +44 (0) 20 3727 1340
 Richard Mountain

 Peel Hunt LLP - Joint broker to SIG                         +44 (0) 20 7418 8900
 Mike Bell / Charles Batten

 Jefferies International Limited - Joint broker to SIG       +44 (0) 20 7029 8000
 Ed Matthews / Will Soutar

 

LEI: 213800VDC1BKJEZ8PV53

 

Cautionary Statement

This document contains certain forward-looking statements concerning the
Group's business, financial condition, results of operations and certain
Group's plans, objectives, assumptions, projections, expectations or beliefs
with respect to these items. Forward-looking statements are sometimes, but not
always, identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should',
'expects', 'believes', 'intends', 'plans', 'potential', 'targets', 'goal',
'forecasts' or 'estimates' or similar expressions or negatives thereof.

 

Forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the Group's actual financial condition,
performance and results to differ materially from the plans, goals, objectives
and expectations set out in the forward-looking statements included in this
document.

 

All written or verbal forward-looking statements, made in this document or
made subsequently, which are attributable to the Group or any persons acting
on its behalf are expressly qualified in their entirety by the factors
referred to above. Accordingly, readers are cautioned not to place undue
reliance on forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised; actual events or
results may differ materially as a result of risks and uncertainties facing
the Group. Subject to compliance with applicable law and regulation, the Group
does not intend to update the forward-looking statements in this document to
reflect events or circumstances after the date of this document and does not
undertake any obligation to do so.

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