“Our aim is to tackle some of the world’s most pressing water and clean energy challenges. We’re using our scale, skills and resources and turning that ambition into action.”
The challenges we face around water are already immense and will only intensify without urgent action.
The facts are staring us in the face. Today, billions of people lack access to clean water or sanitation, while 35% of the water distributed through networks is lost in leaks. The impact of climate change is also increasingly evident in extreme weather events, heat waves, floods, droughts, disappearing glaciers and wildfires.
Aliaxis can make a real difference in tackling these challenges because they go to the heart of what we do, every day.
With over 75% of our products used to distribute, treat and store our most precious resource, water is a major part of our raison d’être. Our solutions also play an important role in storing and transporting clean energies.
United by our purpose
So, for us, the call to action could not be stronger. In 2022 we underlined our commitment to create positive change by restating our purpose with a clear but simple phrase:
“We exist to bring solutions to the world’s water challenges and to accelerate the transition to clean energy.”
Our Growth with Purpose strategy, launched in 2021, has sustainability and innovation at its heart and is focused on taking immediate action up to 2025.
Backed by ambitious targets, it is all about creating value by operating sustainably and bringing game-changing water and clean energy solutions to our customers at greater speed. As one of the most international companies in our sector, we have the scale and the local market knowledge to make a real impact.
Dare, care, deliver
We know what we want to achieve and how to get there. And we are energised by our new behaviours – “we dare, we care, we deliver” – which are inspiring people across Aliaxis to focus on tackling climate change and the water crisis with the urgency they demand.
We dare
To challenge the status quo, to innovate and learn fast |
We care
For the environment, for our customers and for each other; safety being our top priority |
We deliver
By taking accountability for our decisions and actions |
Our Growth with Purpose strategy in action
In 2022, we made tremendous progress on our Growth with Purpose strategy.
Since 2021, we’ve transitioned about a quarter of our operations to renewable electricity. We are well on course to meet our target of 100% renewable across all our operations by 2025.
We’re making solid progress in quadrupling the amount of recycled material we use in our products, with each of our regions bringing great new ideas to market. And our efforts to get smart water solutions to customers faster are advancing at pace.
We’ve massively stepped up our capital expenditure on internal growth by more than tripling our level of investment with a plan to invest over €1 billion between 2022 and 2025.
In 2022, we invested €325 million to expand capacity both by modernising existing facilities and production lines, and by building new plants. That includes a new state-of-the-art factory in North Carolina, in the US, two new greenfield facilities in India, with a further three to follow, a plant modernisation in Germany and a highly automated plant in Australia.
We’re growing through acquisitions as well and were delighted to welcome two great companies with proud histories into the Aliaxis family last year – Harco in the US, and Lareter in Italy. Our new division, Aliaxis Next, set up in 2022 to invest in and partner with promising water tech start-ups, has already invested €60 million in ground-breaking disruptive digital water solutions businesses.
Where innovation is concerned, we are increasing customer intimacy to make sure we create the right solutions for the right markets. In 2022, we boosted R&D spending to over €30 million, our goal being to invest up to €65 million by 2025.
The percentage of sales from new products (less than five years old) has risen steeply from 4.3% to 6.2%, representing €260 million in additional sales. Our target is for new-to-market solutions to account for 10% of total sales by 2025.
Powerful performance
Despite a challenging economic environment, we had another very strong year in 2022, continuing the big leap forward in our performance that we achieved in 2021.
Current EBITDA grew from an average of around €450 million between 2016 and 2020 to €674 million in 2021, and came in at €728.2 million last year, an increase of 8% as reported (stable on a like-for-like1 basis vs 2021 and 48.7% vs 2020).
Although our CEBITDA margin declined slightly, from 18.3% to 16.8%, it remained above 15% for the third consecutive year. We were delighted to be named Belgium’s EY Company of the Year. It recognises how Aliaxis is a purpose driven company, aiming to solve some of the world’s water challenges and accelerate the transition to clean energy. This recognition validates our choices in the eyes of our employees, shareholders, and customers.
Net profit in 2022 was €371 million, while revenues grew 11.3% on a like-for-like1 basis to €4.3 billion.
These excellent results were underpinned by a powerful performance in North America and the Pacific, which offset slightly weaker results in EMEA, India and Latin America where a variety of pressures, including high inflation, resin price volatility and slower demand, impacted us.
Short-term challenges ahead
The road ahead this year and next could be bumpier and we expect our recent powerful growth trajectory to moderate slightly. We will control our costs and manage our inventory carefully.
But we are clear about two things.
First, we will continue with our plans to invest in sustainability, innovation, productivity, and customer intimacy, even in these challenging times. We think it is right to keep investing wisely for the future and have the resources to do so, combining both internal and external growth.
Secondly, we remain confident we can achieve our goal to reach Current EBITDA of €850 million by 2025, based on our success to date and our ability to overcome short-term disruptions thanks to the combination of our teams and business model.
Committed and energised
I’m greatly encouraged that people throughout Aliaxis are committed to our purpose and our strategy and have been energised by the culture we are creating. That’s true right across the company, from our strengthened leadership team right through to colleagues on the ground. It’s been great to get out and meet many more of them in the last year.
Our strategy is on course, and I sense that people across the company share not just my optimism but also my belief that – when we put our minds together, learn from and challenge each other – there’s nothing we can’t do, no problem we can’t solve and nothing we can’t overcome.
Eric Olsen
Chief Executive Officer
1 2021 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 and Lareter in December 2022. Impact of FX excluded to reflect underlying performance at constant exchange rate.