Temple & Webster Group Ltd · ASX:TPW
Temple & Webster — H1 FY23 Earnings Presentation
27 slides from Temple & Webster's earnings presentation, Feb 14, 2023
Slide 1: H1 FY23 Investor Presentation
For personal use only H1 FY23 Investor Presentation Mark Coulter CEO Mark Tayler CFO Page 1
Slide 2: H1 FY23 Financial Highlights
H1 FY23 Financial Highlights Revenue EBITDA $ EBITDA Margin For personal use only (incl The Build investment) $207.1m $7.3m 3.5% Within FY23 guidance range of 3-5% Cash Balance at 31 Dec 2022 Debt-free balance sheet leaves us well capitalised to take $102.4m further market share and pursue inorganic
Slide 3: Margin and cost base initiatives led to a more profitable Q2 vs LY
Margin and cost base initiatives led to a more profitable Q2 vs LY For personal use only FY23 on track, • H1 FY23 EBITDA margin of 3.5% Roll out of • Gross margin improvement of with The Build investment) or 4.7% 180bps to 46.5% (Q2FY23 vs pcp) H1 within margin without The Build investment due to st
Slide 4: We remain confident in our path back to double digit revenue growth
We remain confident in our path back to double digit revenue growth B2C trading TPW’s business model and Australian Furniture and For personal use only improved over the price position are natural Homewares ecommerce half; B2B trading hedges for tougher trading market is still in its remains strong
Slide 5: We are building a business that will resonate with the next wave of consumers
We are building a business that will resonate with the next wave of consumers For personal use only Australian population by generation • Millennials are becoming the largest generation and are the first digital natives to enter core furniture and Gen Alpha 12.0% homewares buying years. (0-9 years)
Slide 6: Our strategy is based on range, inspiration and service
Our strategy is based on range, inspiration and service Our Goal For personal use only Our Core Belief Our Vision Our Mission We believe everyone Our vision is to make the Our mission is to deliver We believe if we can deliver on wants to live more world more beautiful, one beautiful solutions for o
Slide 7: Revenue growth supported by growing repeat customer base
Revenue growth supported by growing repeat customer base ↑13% For personal use only Active 36% CAGR (pre Revenue per active 57% of orders are now Customers Covid) customer up 7% from repeat customers 900,000 $500 250,000 840k 800,000 First Time Repeat $450 200,000 700,000 600,000 $400 150,000 500,00
Slide 8: Canstar Blue awarded us the furniture retailer with the most satisfied customers in 2022
Canstar Blue awarded us the furniture retailer with the most satisfied customers in 2022 For personal use only Major Retailer 1 Major Retailer 2 Major Retailer 3 Major Retailer 4 Major Retailer 5 • Based on independent customer survey data, Temple & • Of the top 6 retailers we were the only online-o
Slide 9: Using data and AI to drive higher conversion rate and lower CODB
Using data and AI to drive higher conversion rate and lower CODB For personal use only Data is core to everything we do AI Interior Designer Meet Sage, our AI Chatbot We continue to expand our data capabilities: “Complete the Look” combines automatic Customer support • Expansion of our onshore Data
Slide 10: Flexing marketing spend based on market conditions
Flexing marketing spend based on market conditions For personal use only Marketing spend as % of revenue has been recalibrated 12-month marketing ROI 14% 2.4 12% 2.0 10% 1.6 8% 1.2 6% 0.8 4% 0.4 2% 0% 0.0 1H20 2H20 1H21 2H21 1H22 2H22 1H23 As at 31 Dec 2021 As at 31 Dec 2022 Customer • • Short-term
Slide 11: Private Label share continues to grow
Private Label share continues to grow, supporting our goal of this becoming the best range in our category For personal use only Private label (% of total sales) 35% 28% Private label contribution increased to 28% in H1 30% 26% 27% 25% 19% 20% The range offers better price positions relative to offl
Slide 12: Opportunity in Trade & Commercial beginning to materialise
Opportunity in Trade & Commercial beginning to materialise For personal use only Revenue Our trade and commercial division continued to $’000s. deliver a solid contribution despite challenging $20,000 macro conditions. $15,000 • +17% revenue growth YoY with a focus on margin $10,000 growth $5,000 $0
Slide 13: Good progress with Home Improvement, with a more prudent investment approach
Good progress with Home Improvement, with a more prudent investment approach For personal use only • Home improvement (across T&W and The Build) Attractive growth horizon and up 12% and represents ~6% of the Group complementary • Large $16b addressable market which lags furniture revenue stream and
Slide 14: H1 FY23 Financial Results
For personal use only H1 FY23 Financial Results Page 14
Slide 15: H1 result within our 3-5% target range, despite revenue headwinds
H1 result within our 3-5% target range, despite revenue headwinds For personal use only A$m H1FY22 H1FY23 As foreshadowed, revenue This presented the Group with declined 12% YoY for the half as an opportunity to leverage Revenue 235.4 207.1 a result of comparing against investments made during Cost
Slide 16: Q2 metrics are even better with YoY growth in EBITDA
Q2 metrics are even better with YoY growth in EBITDA For personal use only Unit economics continue Strong positions with suppliers A$m Q2FY22 Q2FY23 to improve despite YoY assisted with negotiating better Revenue 114.5 108.0 revenue headwinds, margin outcomes (despite Cost of Sales (63.4) (57.8) lea
Slide 17: Our longer-term margin targets (+15%) remained unchanged
Our longer-term margin targets (+15%) remained unchanged For personal use only Longer T&W Group FY17 FY22 Key Levers Term Goal Substantial progress has Revenue 100% 100% 100% been made from FY17 to FY22 in terms of the unit Scale benefits with suppliers, private Delivered Margin (after label/made-to
Slide 18: Strong net cash position, with excess funds to be deployed
Strong net cash position, with excess funds to be deployed For personal use only A$m 30-Jun-22 31-Dec-22 Balance sheet Our capital light Lease liabilities have Assets strength with business model ensures increased as a result of Cash & Cash Equivalents 101.0 102.4 cash levels in balance sheet risks
Slide 19: Strategy & Outlook
For personal use only Strategy & Outlook Page 19 Page 19
Slide 20: Resilient market with a group TAM now in excess of $30billion
Resilient market with a group TAM now in excess of $30billion For personal use only The ~$18b furniture and homewares market is stable and has shown Home improvement adds a further ~$16b to our TAM steady growth, even through periods of high interest rates, high (in-scope categories only) inflation,
Slide 21: Our core furniture and homewares category will provide strong growth for many years
Our core furniture and homewares category will provide strong growth for many years due to online penetration and market share increases For personal use only Australia furniture and homewares market significantly lags the In the US, the online market leader, Wayfair, tripled its market share of the
Slide 22: Our core markets have different fundamentals than many other ecommerce categories
Our core markets have different fundamentals than many other ecommerce categories, providing a clearer path to sustainable profit For personal use only Fundamental Quality Benefit • Many costs are variable and related to the order (e.g. pick & pack, customer care) Large AOV/ • Higher Average Order V
Slide 23: Our strategy to continue to take further market share
Our strategy to continue to take further market share For personal use only Add depth and breadth Expand digital capabilities: Increase brand awareness across our core and adjacent data, personalisation, AI, from 63% to +80% through categories; grow private augmented reality digital and non-digital
Slide 24: Trading update & outlook
Trading update & outlook For personal use only • Sales from the 1st of Jan to the 5th of February (first 5 weeks of 2H FY23) were down 7%, noting the pcp was significantly impacted from strong ecommerce demand during the Omicron outbreak. • We note that December 2022 sales were up slightly vs Decemb
Slide 25: Q&A
For personal use only Q&A Page 23 25
Slide 26: Disclaimer
Disclaimer This presentation (Document) has been prepared by Temple & Webster Group Limited ACN 608 595 660 (T&W Group or the Company). This For personal use only Document is a presentation to provide background information on the Company and its subsidiaries and is not an offer or invitation or rec
Slide 27: For personal use only
For personal use only Page 27
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