Lords Group Trading Plc · LSE:LORD
Lords Group Trading — FY2023 Earnings Presentation
20 slides from Lords Group Trading's earnings presentation, May 15, 2024
Slide 1: FY23 Results
LORDS GROUP TRADING FY23 Results 15 May 2024
Slide 2: Agenda
Agenda Overview Shanker Patel, CEO Financial review Chris Day, CFO & COO Strategy update & ESG Shanker Patel / Chris Day Summary & outlook Gary O’Brien, Chairman Q&A Lords Group Trading PLC
Slide 3: Overview
Overview
Slide 4: FY23 Highlights
FY23 Highlights Resilient performance despite challenging economic backdrop with strategic actions to protect profitability and cashflow • Performance in line with market expectations with Group revenue at record high (+2.8%) and LFL revenues resilient (-1.2%) • Robust Plumbing & Heating division de
Slide 5: Financial Review
Financial Review
Slide 6: FY23 Financial Highlights
FY23 Financial Highlights • 2.8% revenue growth despite FY23 FY22 Change challenging market conditions Revenue £462.6m £450.0m +£12.6m / +2.8% • EBITDA margin impacted by market conditions, operational Adjusted EBITDA £26.8m £30.0m -£3.2m / -10.5% leverage and Alloway acquisition Adjusted EBITDA Mar
Slide 7: FY23 Financial Highlights – Merchanting
FY23 Financial Highlights – Merchanting Resilient performance in Merchanting amidst a challenging trading environment, service-led proposition continues to attract and retain customer base. FY23 FY22 Change Total revenue £214.9m £220.8m -£5.9m / -2.6% LFL Growth vs FY22 -6.3% Adjusted EBITDA £14.0m
Slide 8: FY23 Financial Highlights – Plumbing & Heating
FY23 Financial Highlights – Plumbing & Heating Robust P&H result in the year, growing like for like sales via range extension and market focus. FY23 FY22 Change Total revenue £247.7m £229.3m +£18.4m / +8.0% LFL Growth vs FY22 +3.7% Adjusted EBITDA £12.9m £13.8m -£0.9m / -7.1% Margin 5.2% 6.0% -0.8%
Slide 9: Stable balance sheet
Stable balance sheet • Debt structure refinanced on 5 April 2023, moving to a syndicate structure with HSBC, Natwest and BNP Paribas • Plus 1 extension agreed in April 2024 extending maturity date to 5 April 2027 • Facility extension reflects lender confidence and endorsement of Lords resilience and
Slide 10: FY23 Financial highlights – Free cash flow
FY23 Financial highlights – Free cash flow £m FY23 FY22 EBITDA 23.5 28.6 • Free cash flow (from EBITDA) of £13.9m, 59.2%1 Exceptional Items and share based payments 3.4 1.3 Adjusted EBITDA 26.8 30.0 • Working capital continues to be tightly Working capital movement (0.8) (2.0) controlled Tax (3.1) (
Slide 11: Strategic Update
Strategic Update
Slide 12: Track record of growth
Track record of growth Revenue (Figures in £m) Adjusted EBITDA (Figures in £m) 500 35 10-year CAGR: 36% 30 10-year CAGR: 37% 400 25 300 20 200 15 10 100 5 0 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 • 10 year CAGR profile reflects
Slide 13: Renewables range: Well positioned
Renewables range: Well positioned • Renewables category enjoyed 60% revenue growth in FY23 • Air Source Heat Pump sub-category delivered strong momentum, with revenue growth of 300% in FY23. Average sale price of £2.8k v Boiler of £0.9k • Lords is uniquely positioned to supply – distribution, mercha
Slide 14: Renewables range: Transition plan
Renewables range: Transition plan • Government announced 12 month adjustment to introduction of Clean Heat Market Mechanism (‘CHMM’), now planned for April 2025 • CHMM incentivises boiler manufacturers and homeowners to accelerate the transition towards renewable energy sources in UK homes • Initiat
Slide 15: Consolidation Model
Consolidation Model • A strong track record of acquisitions with inhouse M&A expertise – 15 acquisitions completed since 2016 • All fully integrated and performing ahead of expectations, delivering 25%+ return on investment2 • Management teams retained and incentivised to perform • Significant oppor
Slide 16: ESG: Developing our strategy
ESG: Developing our strategy • Strategy developed in FY22, providing an effective framework to drive our ESG performance • Implemented new environmental policy outlining ambition to reduce Scope 1 & 2 emissions by 90% by 2035 and reduce Scope 3 emissions by 90% by 2050 • Revised our supplier code of
Slide 17: The Lords Investment Case
The Lords Investment Case A leading, high-growth distributor of building materials in the UK Unique Customer First Proposition Successful Value-Creative M&A Track Record • Customer service excellence is the central pillar of our strategy • Independent merchants hold 42% of market and are prime for c
Slide 18: Outlook
Outlook
Slide 19: Outlook
Outlook Whilst mindful of the macro-economic environment and its impact on the sector in the short term, the Group continues to trade in line with market expectations. The fundamentals of the Lords investment proposition remain: • High growth reflected by 10 year CAGR – Revenue +36%, Adjusted EBITDA
Slide 20: Disclaimer
Disclaimer This presentation may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of Lords Group Trading plc (the “Company”). Such statements and forecasts involve risk and uncertainty because they ar