“Our focus on operational excellence is paying off: substantial improvements in safety and productivity and significant savings in strategic procurement.”

Kati ter Horst, Divisional CEO, EMEA
Kati ter Horst, Divisional CEO, EMEA
Kati ter Horst

Divisional CEO, EMEA

In 2023, we have doubled down on our efforts to boost the efficiency and sustainability of our operations, despite challenging market conditions across much of the region. We continue to invest to better serve our customers and in anticipation of growth picking up again.

Our focus has also been on modernising our existing plants, with major capital expenditure at our Mannheim plant in Germany to extend and modernise the main production centre for our market-leading FRIATEC brand. We’ve put additional investment into automation and business management systems in Italy and Spain.

Our commitment to Growth with Purpose remains steadfast as we continue to make progress on transitioning to 100% renewable electricity by 2025. Substantial investments and progress were made in Germany, Switzerland, Italy, and Spain build upon earlier successes in the Netherlands and Poland, notably through solar panels.

The pace of this transition has now accelerated. As a result of negotiations which took place in 2023, we’ve signed a 10-year Virtual Power Purchase Agreement (VPPA) with the Hamburg-based Encavis to generate 50 GWh a year of renewable power, enough to cover a good portion of Aliaxis’ electricity consumption in Europe by 2025.

Operational excellence is about improving our performance in manufacturing, supply chain, with safety as our top priority. Here, we have had a major success in reducing our Reportable Incident Rate by 25% during 2023, marking a third year in a row of remarkable improvement in safety.

Another area where we made great improvements is in procurement where thanks to strong alignment, greater focus and collaboration between central procurement and the EMEA team, we have achieved savings of over €20 million in 2023.

We continue to focus intently on close cooperation with our customers, to ensure that we create innovative solutions that are relevant to them. Customer satisfaction has increased strongly in EMEA in the year, with our Net Promoter Score rising 10 points.

Investment in internal growth is being matched by our success in growing the Aliaxis family of companies through M&A.

2023 saw us crown three years of collaboration with Zypho, a pioneering start-up in drain water heat recovery technology, by acquiring the company and by jointly developing and launching new products based on its original breakthrough solution.

The shower drain heat recovery systems, which transfer the heat from outgoing hot water to the incoming cold water, can recycle up to 75% of the energy used to heat the shower water. Together, we can bring these products to a much wider market, not just in Europe but across our global network of businesses and brands.

The year also saw the successful integration of Lareter, Italy’s leading producer of industrial pressure pipes, which we acquired in late 2022. It is performing above our original objectives, bolstering our operations both in Italy and more widely in the region.

These are great achievements which came despite a difficult trading environment.

With many of our main markets still experiencing high inflation and high interest rates, which depressed investment particularly in the building market, and with raw material prices remaining volatile, there was an inevitable impact on our results.

The UK building market was particularly severely hit, weighing down our overall result and leading us to restructure the business to reflect changing market conditions. Infrastructure remained strong in the UK and elsewhere in the region building markets were more robust.

Revenue

-5.8%

on a like-for-like1 basis vs. 2022

Recurring EBITDA

-5.2%

on a like-for-like1 basis vs. 2022

1 2022 adjusted on a pro-forma basis to reflect the impact of the acquisition of Harco Fittings LLC in April 2022, Aquarius Spectrum in August 2022, OptiRTC Inc. in November 2022, Lareter in December 2022, Zypho in May 2023, Valencia Fittings LLC in June 2023 and the discontinued operations in Russia in June 2022. Impact of FX excluded to reflect underlying performance at constant exchange rate.

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