What we do
Our strategic priorities consist of three pillars:
Grow, Innovate and Sustain.
Luceco has a proven track record of growth. Since 2000, we have grown our sales twice as fast as the UK market and supplemented this growth by launching our successful business model overseas. We have leading positions of scale in our key UK end markets, and yet have £1.8bn of share still to take in the markets we currently address. Our strategy is to seize this opportunity.
We use market-leading innovation to seize our growth opportunities. We use it to up-sell higher function, higher margin devices in existing product categories, and to enter new product categories that can be sold to existing customers.
Our Sustain strategy has two objectives: 1) invest to sustain our competitive advantage; and 2) to make an increasing contribution to society’s sustainability goals. Over recent years, we have stepped up investment in our business infrastructure to provide a platform for long-term growth.
Our focus over the last three years has been to maximise our most profitable source of growth, namely the sale of all existing products to all existing customers through our well-developed UK infrastructure, with a particular focus on growing our share of sales to professional installers. This has proved successful as customers have rewarded our structural ability to deliver, accentuated during the pandemic, with new business wins that have been very beneficial to profit.
We have continually expanded our product range over recent years, increasing the size of our addressable market, with a focus on selling more products installed by electrical contractors. We estimate the total market for goods sold to electrical contractors in the UK totals £3.5bn, providing additional capacity for future growth.
We have used our balance sheet to accelerate share gains with professional installers with the acquisition of DW Windsor, which is highly complementary to our existing specified UK lighting offering.
Our continual re-appraisal of growth opportunities led us to invest to accelerate growth in our Southern European business in the year.
For instance, we were the first in the UK market to add USB functionality to mains sockets. Over the last seven years, we have added £16m to revenue by up-selling USB sockets to existing wiring device customers, in addition to selling to new customers. Likewise, we have added £26m to revenue over the same time period by entering the LED lighting market and cross-selling our range to wiring accessories customers.
Our push into new product categories, with a focus on those that are professionally installed, was accelerated in 2021 by the launch of both private realm EV chargers and commercial power products. The market potential of both products totals £700m in the UK alone and we are very well positioned to take our share of this opportunity.
Our Innovate strategy covers both the products that we design and the services that accompany them.
We constantly innovate to meet customer needs. In recent years we have progressively added to our range of products with “smart home” capability. We have also introduced products with greater ESG credentials such as EV chargers. Our customer-driven, bold and innovative culture is embodied within the products we develop.
We continually innovate the services that accompany our products to improve the customer experience and sell our products as part of a solution. We have well-developed lighting installation design teams to help specifiers turn their concept into a reality. We offer simple online lighting design tools for contractors. We offer comprehensive online training modules for installers via our recently launched Luceco Academy portal. We are renovating our digital estate to provide customers with online access to specification materials and to transact digitally.
We are focused on providing products to customers that meet their increasing environmental requirements.
We aim to sustain advantage through long-term investment in:
Our products are designed, made, distributed and installed by people. We invest to ensure our talented team have the skills they need to exceed customer expectations. We call them our Luceco Heroes. We also invest in training content to ensure our professional installers have the skills they need to do the job right.
We have invested in people, processes and equipment at our manufacturing facility in China to make it the best facility in the world for manufacturing British Standard wiring devices. We have invested in infrastructure, equipment and IT at our distribution centres to improve customer service levels and lower fulfilment cost.
We also aim to lead our industry by lowering our environmental footprint, and in doing so help our customers to achieve the sustainability targets they may have for their supply chain partners.
In addition to growing organically, last year we progressed our strategy to grow market share through M&A by acquiring DW Windsor Group (“DWWG”), a complementary exterior lighting and technology provider. DWWG is an established business with a recognised heritage, brand and loyal customers in the UK public realm lighting market, which we aim to expand as part of our growth strategy.
DWWG operates two businesses: DW Windsor and Urban Control.
DW Windsor is a leader in the design and manufacture of high quality outdoor and streetlighting equipment for the specification market, selling mainly to UK local authority end customers.
Urban Control provides network solutions for infrastructure assets facilitating data collection and control, including the monitoring and control of streetlights.
DW Windsor is one of the strongest brands in the UK’s specification exterior lighting industry with a strong track record of delivery on public sector lighting projects and impressive network technology credentials.
It is highly complementary with the Group’s Kingfisher Lighting business, which supplies non-public sector projects, and we are excited about the opportunity to offer the expanded product portfolio to both customer groups.
This acquisition is part of our strategy to use M&A to gain share in the market for electrical products installed by professional contractors.
- Leader in the design and manufacture of high quality outdoor streetlighting
- Strong track record of delivery
- Highly complementary with the Group’s Kingfisher Lighting business
- £16.3m investment in October 2021
2021 Group revenue growth
2021 M&A investment
We use simple but deceptively hard to replicate innovation to gain market share and grow the value of the products we sell.
An illustration of this is the double switched mains socket – the mainstay of our Wiring Accessories business.
The basic product has not changed in form or function in decades.
Our strategy over many years has been to use low cost, low risk, high return product development to complement the basic product with a comprehensive range with increasingly sophisticated design and technology.
The graphic below illustrates how this strategy converted the humble mains socket into a stylish household device that has an increasing impact on our customers’ daily lives.
The market-leading integration of existing technology from outside our industry into our devices has allowed us to gain share and command a higher price and higher margin for the products we sell.
- The average person now owns 6.5 connected devices
- Our sockets with multiple functions are perfectly suited to the modern home
- Our most sophisticated sockets now deliver a 50% charge in just 30 minutes – 70% faster than standard 5W charging
- Our market-leading technology has allowed us to gain market share and command a higher price
2021 R&D expenditure
2021 New product SKUs
We see significant opportunity in the EV charging market, supported by government regulation and a shift in consumer preferences driven by environmental awareness.
Electric car sales are booming despite the pandemic impacting the number of new car sales. In 2021, new car registrations grew just 1%, and were almost 30% on pre-pandemic levels in 2019. However, EVs had their most successful year ever, with new EV registrations 76.3% higher than the year before or 190,727 new electric cars being sold. This represents an 12% share of all new cars sold. The significant growth in registrations yet relatively small share of sales highlights the huge opportunity in this space.
Following billions of pounds of investment into new technology by manufacturers, more than 40% of models are now available as plug-ins. Indeed, the shift in customer preference for these new technologies continues apace, with December 2021 seeing battery electric vehicles (“BEVs”) take a record market share in a non-locked down trading month, accounting for 25.5% of all new registrations.
The UK Government has announced its intention to ban the sale of new internal combustion engine vehicles by 2030, which will lead to greater penetration of EVs. In turn, this increases demand for chargers or Electric Vehicle Supply Equipment (“EVSE”) for installation in private residential and workplace parking, a key target market for Luceco.
Last year, we launched Mode 2 EV chargers and we will imminently be launching higher power and smart-technology enabled Mode 3 chargers which will become the mainstay of private realm vehicle charging in years to come. We have high hopes for the EV market opportunity and expect to gain good market share in the medium term.
Cleanest and greenest
As well as signifying future potential revenue growth for Luceco, the trend for increasing sales of EVs will also fulfil our mission – to build a leading portfolio of thoughtfully designed and diligently made products that provide environmentally responsible electrical and lighting solutions to our customers.
- Employee satisfaction in the UK increased 4.4% to 90.5% in 2021
- Rollout of new online training portal to sustain employee development during COVID
- Introduction of the Luceco Academy to support professional development within the electrical contractor community
- Headline sponsors of the new eFixx 30 under 30 awards, recognising up-and-coming talent in the electrical industry
- Hybrid working adopted post-lockdown to maintain productivity benefits we have seen from home working whilst ensuring employees remain connected
2021 UK employee satisfaction