Stelrad Group (SRAD) Investor & Trading Update summary

Strategic Growth Drivers and Market Opportunities

• Premiumization and decarbonization are key structural growth drivers, enabling above-market growth and higher margins through premium products and sustainable heating solutions.

• The group leverages a flexible, low-cost manufacturing base, market-leading product availability, and strong brands as core competitive advantages.

• Hydronic heat emitters, especially steel panel radiators, remain central, with a 20.2% market share across Europe and a significant installed base supporting long-term replacement demand.

• The U.K. market is underpenetrated in premium radiators, presenting a substantial opportunity for profitable growth through both traditional and direct-to-consumer channels.

• Decarbonization legislation and trends are expected to drive demand for higher value, low and zero-carbon compatible radiators, with the group well positioned to capitalize.

Competitive Advantages and Operational Excellence

• Manufacturing facilities are strategically located, with the largest, most advanced site in Turkey producing 70% of annual volume and supporting pan-European supply.

• Standardized core product design enables operational flexibility, economies of scale, and rapid adaptation to market changes.

• Significant investment in automation, capacity, and supply chain resilience underpins industry-leading customer service and near-100% on-time, in-full delivery rates.

• Distribution centers and warehousing are optimized to ensure product availability and customization, minimizing obsolete stock and supporting customer needs.

• The group’s robust supply chain and long-term supplier relationships provide security and flexibility, even during global disruptions.

Market Share, Consolidation, and Acquisition Strategy

• Market share in steel panel radiators increased to 20.2% in 2023, with consistent gains across core markets and a focus on 10 key countries.

• The acquisition of Radiators S.p.A. accelerated growth in premium and designer radiators, expanded the product portfolio, and improved positioning for decarbonization.

• The market remains fragmented beyond the top players, offering further consolidation opportunities as smaller competitors struggle to adapt.

• The group is positioned as a logical consolidator, monitoring distressed competitors and ready to act on suitable M&A opportunities aligned with strategic objectives.

• Organic growth remains a priority, with 1%-2% annual market share improvement targeted over the medium term.