STEALTH GROUP HOLDINGS LTD — Earnings Release 2023

Aug 13, 2023

ASX NEWS RELEASE

Monday, 14 August 2023

Chairman BOARD OF DIRECTORS STEALTH REPORTS HISTORIC FY23 FINANCIAL RESULTS

Strategic success fuels strong results; Company projects more growth in 2024.

Stealth Global Holdings Ltd (ASX: SGI), an Australian industrial distribution group, releases its preliminary unaudited financial results for the year ending June 30, 2023. Stealth will present a detailed overview of its FY23 audited results on or before August 30, 2023.

FINANCIAL HIGHLIGHTS – RECORD 12 MONTH GROWTH

• Total Revenue of $111.0 million, an increase of 11.4%2 , or 14.9% on a daily, constant value basis.
• After accounting for discontinued unprofitable customers, revenue increased by 17.8%.
• Achieved EBITDA1 of $5.3 million, up 32.5%.
• Profit before tax of $1.3 million, up 85.7%.
• Delivered EPS of $0.91, up 51.7%.
• Free cash flow generated of $5.6 million, significantly surpassed expectations.
• Net debt cut by 29.4%, to $7.2 million; $5.2 million is related to revolving working capital.
• Inventory as of June 30 was $14.8 million, 13.3% of annual sales, down from 14.2%.
• Conservative balance sheet with $7.7 million cash, $2.3 million undrawn in working capital.

FINANCIAL SUMMARY	FY2023	2FY2022	Change v Prior
Revenue	$111.0m	$99.6m	11.4%
Gross Profit	$32.6m	$30.1m	8.3%
EBITDA1	$5.3m	$4.0m	32.5%
Earnings before Tax	$1.3m	$0.7m	85.7%
NPAT	$0.9m	$0.6m	50.0%
Basic earnings per share (EPS)	0.91	0.60	51.7%
CASH AND DEBT
Free cash flow	$5.6m	($0.4m)	$6.0m
Cash and cash equivalents	$7.7m	$4.7m	63.8%
Inventories	$14.8m	$14.1m	4.7%
Net debt	$7.2m	$10.2m	(29.4%)
Net assets	$16.1m	$15.1m	6.6%
RATIO'S
Price-Earnings Ratio (PE)	13.8x	16.7x	17.4%
Return on capital employed (%)	9.9%	6.0%	390 bps
EBITDA margin	4.8%	4.0%	18.9%
Inventory / Sales	13.3%	14.2%	-90 bps
Net debt ratio / EBITDA	1.4x	2.6x	53.8%

1Earnings before interest, tax, depreciation, amortisation after underlying unusual costs.

2 Comparatives are from continuing operations.

Chris WhartonAM Chairman

Michael Arnold Group Managing Director & CEO

John Groppoli Non-Executive Director

Simon Poidevin Non-Executive Director

John Boland Company Secretary

ISSUED CAPITAL 99.7 million Ordinary Shares

PRINCIPAL OFFICE Level 2/43 Cedric Street Stirling, Western Australia 6021

CONTACT

Michael Arnold Group Managing Director & CEO

John Boland Group Chief Financial Officer

P: +61 8 6465 7800 E: investors@stealthgi.com

W: www.stealthgi.com

ABN: 25 615 518 020

GROUP OPERATING BRANDS

• › Heatleys Safety & Industrial
• › C&L Tool Centre
• › Skipper Transport Parts
• › Industrial Supply Group
• › United Tools Group

WEBSITES

• › www.heatleys.com.au
• › www.cltoolcentre.com.au
• › www.skippertp.com.au
• › www.isgaus.com.au
• › www.unitedtools.com.au

ASX: SGI

OPERATIONAL KEY METRICS3

FULL YEAR 2023	% Growth v Prior Year
Sales per day	14.9%
Sales value per order	17.4%
Sales per employee	19.6%
Gross Profit $ per day	31.3%
Gross Profit $ per order	14.2%
Gross Profit $ per employee	36.7%

3 from distribution and retail operations, excluding buying group operations.

SUMMARY

Stealth has experienced solid growth due to its expansion plans, investment in e-commerce, and strong customer relationships. Unification investments have enhanced the organisation, driving volume growth, broadening product selection, enabling cross-selling and promotions, and increasing customer value.

Over the last 12 months, Company revenue, profit and free cash flow has been on an upward trajectory, helped by focusing on higher-growth opportunities and ongoing demand in the industrial consumables sector.

CAGR (Compound Annual Growth Rate)	3-YEAR CAGR4
Revenue	29.0%
Gross Profit	29.7%
EBITDA	34.6%
NPAT	38.1%

4 from continuing operations.

After keeping prices stable in the first half of FY23, Stealth reviewed its pricing strategy in the core business, adjusting prices to combat inflation. A strategy anticipated to boost future profits.

Over 95% of Stealth's products are non-discretionary. As an 'all-weather' distributor, Stealth is well-positioned to withstand economic downturns.

OUTLOOK

The Company's financial outlook is positive, with strong FY23 results and an upbeat outlook for the current year.

Despite fluctuations in economic conditions, the demand from mining, resources, transportation, infrastructure, construction, repairs-maintenance, and the home improvement market provide long-term resilience for the Company.

Further consolidation of operating banners in FY24 provides significant untapped revenue and cost synergies. Along with promising strategic opportunities, this is anticipated to result in outperformance in the wider industrial sector.

Capital investment will be directed at supply chain efficiency, rightsizing, channel growth, new services, merchandising, store network expansion, enhanced digital channels, (including AI), and improvements to store and distribution centres.

-ENDS-

ASX NEWS RELEASE (CONT)

This announcement was authorised to be given to the ASX by the Board of Directors of Stealth Global Holdings Ltd.

For Further Enquiries:

Mike Arnold Chris WhartonAM John Boland Group Managing Director & CEO Chairman CFO and Company Secretary

Corporate Office: +61 (0) 8 6465 7800

ABOUT STEALTH GLOBAL HOLDINGS

ASX CODE: SGI

Industrial Supplies and Solutions for Every Workplace

Stealth Global Holdings Limited (Stealth) is a wide range distributor of Industrial, Safety, Truck & Automotive and Workplace supplies and other related products and solutions.

Headquartered in Perth, Western Australia, Stealth provides supplies and solutions for every workplace that extends across the whole supply chain to Customers of all types and sizes. Stealth's large distribution network provides multiple channels-to-market through three operating divisions: Distribution (B2B), Retail & Trade (B2C), and Specialist Wholesale (B2B2C).

Under Stealth's portfolio is five market facing operating brands:

• Heatleys Safety & Industrial
• C&L Tool Centre
• Industrial Supply Group
• United Tools
• Skipper Transport Parts