For the last three years, there’s been a lot of hard work undertaken to reset our business. Over the last year or so, we have seen the results of these efforts becoming clear.
As a business, Steel & Tube has successfully refocused its efforts on our customers. This started with better data and insights, establishment of customer experience centres, a digital offering, and better supply chain management and delivery performance.
We have also improved our hub and spoke distribution model to better leverage our distribution centres. We have improved our supply planning functions and invested in the right inventory to ensure our sales teams can perform at their best by having the right product available.
Most importantly, I’m proud that we were able to support and invest in our people through the pandemic lockdowns.
Despite 2021 being a challenging year for many businesses and people throughout New Zealand, it has been a year of many learnings, achievements and highlights.
The Intersection of Resilience & Teamwork
As a business and as individuals, we had to be resilient. The arrival and spread of the COVID-19 Delta variant in the second half of the year saw us go back into lockdown, with many of our people in Auckland still working from home after 12 weeks. Things that we had never heard of two years ago have now become the norm - elbow bumps, masks, social distancing and working from home.
It’s been tough at times and the Steel & Tube leadership team appreciate the efforts of our people to get the job done, no matter where or how they were working.
Furthermore, we were pleased to be able to support all of our people with 100% of their wages throughout the lockdown period. In an effort to accelerate the uptake of the COVID-19 vaccination, we also offered a $150 incentive to our employees.
Throughout the business, I have seen great teamwork. Whether that was across the leadership team, in our warehouses or in our operational sites, the team pulled together to deliver for our customers during an uncertain time.
I also see the power of teamwork through the quality of the decisions Steel & Tubers are making daily. Decision making is far more informed by our strategy, good data and information, and is debated professionally. Most importantly, we are very deliberate and disciplined about our execution of our decisions.
Financially, we delivered a significant uplift in our earnings and profit driven by volume growth in target segments and positive market conditions, improved gross margin disciplines and continued reduction in percentage operating costs, a big turnaround from the loss we reported three years ago.
At a performance level, we’ve built an industry-leading digital platform across our business, improved our customer service and delivery, continued to invest in our people, and are creating a lean, strong and successful business. Ultimately, this will play a role in driving Steel & Tube’s continued success in 2022.
The Role of Technology
Steel & Tube’s business performance in 2021 has been, in part, informed by our investment in technology. Technology is a key focus and provides a competitive advantage. As a result, technology is now an integral part of our sales, service and people strategies at a cross-business level.
This investment was driven by an understanding of the importance of maintaining customer trust. As we offer the largest selection of steel products and services in New Zealand, product quality remains important to us. Our supplier mills are audited, and we complete random sampling to verify the standards of our products. Also, we are continually digitising the traceability of our products, improving service, reliability and access for our customers.
Our technology investment has been focused on creating an omni-channel platform, that allows our customers to engage with us through a range of different channels, and at a time and place that suits them. So, that might be on our website, through our Webshops, interacting with Stanley the chatbot, by phoning our customer service people or by visiting us in store.
Steel & Tube’s digital and customer service teams have done a fantastic job pulling this all together and creating a successful customer offer.
We’re also using technology and digital tools to streamline processes and systems within our business, providing deeper customer analytics and online training for our people. We now have more than 50 different modules in our online training library and more than 2,000 modules were completed by team members in the last financial year.
A Commitment to Sustainability
We are conscious that for businesses to survive in the modern world, we need to be sustainable. We have several initiatives in place to reduce our energy use and our carbon emissions. Steel itself offers numerous benefits as a construction material – it’s infinitely recyclable, reusable, long lasting and durable.
It was also the year that we appointed a Group Sustainability Manager. This is critical to ensuring Steel & Tube’s ability to continue operating in a way which looks after our environment and communities.
Supporting our Communities
Another 2021 highlight was our continued support of MATES in Construction. As a leader, I am thankful to those who worked diligently throughout the lockdowns of 2021 despite balancing a range of other personal commitments. It is also important to recognise the mental toll on those unable to work for prolonged periods due to COVID-19 alert level restrictions.
Many Steel & Tubers have been working enormously hard through the lockdowns and beyond. For those unable to perform their roles from home, this period was equally challenging. Wherever you sit on that scale, the pandemic has taken a toll on our wellbeing. We can all learn a lot from the team at MATES in Construction and I’d recommend reviewing their website and videos. There’s a range of easy to understand resources that helps us all better process our thoughts to positively adapt our behaviours and outcomes.
In addition to the work with MATES in Construction, we hosted a wellbeing seminar in October which had a record turnout. Due to strong interest, we hosted another webinar on The Foundations of Sleep earlier this month which was also well attended.
To the Steel & Tubers
At the heart of our business is our people. As such, our aim is to provide an environment where people feel welcome, engaged and rewarded. We also aspire to be a place where there is the opportunity to learn and develop so our people can reach their potential.
This year, we rolled out a leadership programme with more than 70 employees participating across the group. We launched a new Maori cadetship and have four great cadets currently enrolled.
In addition, we continue to support the First Foundation providing scholarships for Steel & Tube family members attending tertiary education. We also have partnered with Papakura High School on the Sector Workforce Engagement Programme with a number of students working with us this year.
We also introduced a Back to School fund to provide support for Steel & Tube families at a time of the year when additional expenses can be challenging. We will continue with this initiative next year.
Above all, I’d like to thank our people for their diligence, resilience and teamwork over the course of 2021. Our business wouldn’t be where it is today without your contributions.
Looking Ahead to 2022
We have created a strong foundation from which we will continue to build momentum in 2022. We expect market conditions to remain positive and we have a long pipeline of secured contract work in place. We are well positioned to take advantage of identified opportunities in a range of sectors and products.
Going into 2022, our focus remains on customer delivery, product and sales growth, gross margin dollar improvement and leveraging our digital platform.
To our customers, shareholders and suppliers, your support over the last year has been invaluable. I look forward to continuing to lead a business which has taken the challenges of this year in its stride. On behalf of the Steel & Tube team, thank you for placing your trust in us as we continue to evolve our business.
To the Steel & Tube team, thank for your diligence, commitment and teamwork this year. We have all collectively proven an ability to pull together and do what it takes to get the job done. Your unwavering focus on the needs of our customers has underpinned our success.
To all, stay safe and happy holidays.
Mark Malpass, Chief Executive Officer.