Looking forward to 2019, we anticipate a year of challenge and uncertainty; a period of consolidating markets, rapid digital sector growth and Brexit.
However, we enter 2019 from a position of strength. Last year we exceeded our £160m UK and Ireland sales target and slightly over-delivered on our commercial EBITDA commitment.
We achieved this by being agile and controlling our costs, making an important contribution to the overall Ideal Standard International result and earning the confidence of our group colleagues in the process.
Of course, our priorities as a cluster need to reflect those of the wider group. For 2019, these are cost competitiveness through manufacturing productivity and supply chain efficiencies; and winning profitable market share through volume recovery, pricing and new product introductions.
We are now part of a new European commercial organisational structure of four clusters, which has seen the UK and Ireland forming a Western Europe cluster with the Netherlands – a 21m EUR business generating healthy and comparable EBITDA percentages to the UK.
Our priorities in the UK and Ireland are to deliver continued profitable market share growth, increase our business agility and grow our future pipeline.
Expanding on these priorities, it will be critical to our success to outperform the market in sectors across our core specification business, particularly with regional housebuilders, high rise, education and healthcare. Whilst this core business gives us an inherent resilience, we can be sure that in a year of such uncertainty we will need to find alternative paths to achieving our targets when things don’t go as expected.
One of the challenges we face is to continue to broaden our sales into new and under-penetrated markets such as retail and online. At the same time, we need to manage our costs to ensure growth isn’t at the expense of profit. To realise this, we have to achieve more with existing resources by making our cross-functional working more effective, removing costs which don’t add value to the business and redirecting these costs into investments that generate returns.
Our priorities are broken down into specific objectives and I have outlined these in an Elevating Performance communication which will be distributed by email next week. I encourage you to read this as it further illustrates how we plan to hit our 2019 AOP (Annual Operating Plan) and is intended to help you understand your contribution.
I believe we are well equipped to achieve our ambitions for 2019. I thank you for your continued hard work and dedication and look forward to working together and making this year both an enjoyable and successful one!
Stephen