Motorpoint Group Plc · LSE:MOTR
Motorpoint — FY2021 Earnings Presentation
47 slides from Motorpoint's earnings presentation, 2021
Slide 1: Full Year 2021 Results & New Strategic Objectives
Motorpoint Group Plc Full Year 2021 Results & New Strategic Objectives
Slide 2: Agenda
Agenda Who we are Mark Carpenter, CEO / Chris Morgan, CFO Full Year highlights 2021 Mark Carpenter, CEO Financial highlights and performance summary Chris Morgan, CFO Strategy update and outlook Mark Carpenter, CEO 2 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 3: We're the UK's leading omnichannel vehicle retailer
We’re the UK’s leading omnichannel vehicle retailer 3 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 4: A group focused on growth through two distinct channels
A group focused on growth through two distinct channels Non Part Exchange Non Part Exchange (Launches Summer 2021) (Launches Summer 2021) <3 years >3 years <30,000 miles >30,000 miles Part Exchange Part Exchange <3 years >3 years <30,000 miles >30,000 miles Motorpoint Auction4Cars.com The UK’s leadi
Slide 5: More than trebling revenue and gross profit since 2012
More than trebling revenue and gross profit since 2012 Revenue (£m) Gross profit (£m) 1200.0 90.0 1058.7 79.9 78.9 1018.0 80.0 76.4 991.2 1000.0 % 9.1 % 70.0 2 0.9 )1 ) vid vid 62.2 62.5 Co Co 822.0 800.0 re 60.0 re (P 729.2 (P 55.7 GR GR 721.4 CA CA 50.0 600.0 563.1 40.1 473.1 40.0 33.5 400.0 367.7
Slide 6: With huge opportunity for growth
With huge opportunity for growth £ 100 Market bn opportunity Addressable UK market bigger as we are Online and In Branch >800K UK network Accelerated unique Online of sales and digital customer Wholesale collection transformation email opportunity branches addresses New branches will drive market We
Slide 7: We have the most comprehensive market offering
We have the most comprehensive market offering Motorpoint Cazoo Cinch Carvana Auto1 Revenue £1,018m (FY20) >£150m (Yr 1 to 11/20) N/A $5,587m (FY20) €3,476m (FY19) Market Cap (May 21) £0.25bn £5bn (prediction) £5bn (prediction) $46bn $10.3bn Best value - price promise Next Day Home Delivery End-to-e
Slide 8: Motorpoint - the Car Buyer's Champion
Motorpoint - the Car Buyer’s Champion 14 UK wide branches 1.5m Our addressable annual vehicle market <3 years <30,000 miles Motorpoint The UK’s leading omnichannel vehicle retailer We sell cars under 3 years old, Our broad UK coverage provides strong with less than 30,000 miles strategic advantage a
Slide 9: Making car buying easy Online or In Branch
Making car buying easy Online or In Branch Easy to Easy to Easy to Easy to Easy to find view buy collect contact Breadth and range of Convenience and Financing and Part vehicles available speed of vehicle Exchange completed 24 hours comparison in privacy of own home and with access Range of collecti
Slide 10: Auction4Cars.com – all online and a unique revenue stream
Auction4Cars.com – all online and a unique revenue stream No movement >9,000 fees customers Faster Very low stock turn overheads (14 days) Trusted Low brand by buyer’s wholesale Auction4Cars.com customers fees The UK’s leading independent Trade car auction site 10 Motorpoint Group Plc - Full Year Re
Slide 11: Auction4Cars.com – a huge opportunity
Auction4Cars.com – a huge opportunity Marketplace allowing vendors to Non Part Exchange channel sell vehicles, commission based (Summer 2021) (late 2021) Auctioneer market >1.5m units Trade buyers looking for new and per annum efficient ways to buy stock We currently wholesale We have the property c
Slide 12: Full year 2021 highlights
Full year 2021 highlights Mark Carpenter, CEO 12 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 13: Transforming through agility achieved in a year of macro challenges
Transforming through agility achieved in a year of macro challenges Accelerating online Sales team repurposed Our conversion of purchasing, 37% during lockdown to online traffic is stronger customers buy online outbound and handover than ever, since branches reopen duties approaching 4% 83 NPS for o
Slide 14: That delivered results
That delivered results 68k 25k Vehicles* 69% Vehicles* Vehicles sold across the Group. FY20: 96K Percentage of sales online. FY20: 54% Vehicles sold online to trade via Auction4Cars.com. FY20: 36K *Impacted by Covid *Impacted by Covid 22% 9,300 Vehicles 14 Branches Of retail vehicles delivered Deliv
Slide 15: And strong growth in online sales
And strong growth in online sales + 89% 57% 47k + 35% Online retail Online retail Home Delivery sales Units revenue Q4 Jan – Mar 2021 Vehicles sold online and fulfilled 69% sold online in FY21 In FY21 through Home Delivery in Q4 (FY20: 54%) 15 Motorpoint Group Plc - Full Year Results 2021 and New St
Slide 16: Created from further investment in our digital estate
Created from further investment in our digital estate Easy to Easy to Easy to Easy to Easy to find view buy collect contact • Improved listings • 360˚ interior and • Digital end-to-end • Reserve and Collect • Quality, service and and search exterior imaging journey fulfilment • Free Home Delivery su
Slide 17: With new branches substantially supporting market reach
With new branches substantially supporting market reach Stockton-on-Tees (Opened December 2020) • Our market share increases • Sales and Customer Fulfilment Branch, dramatically in the vicinity of preparation fulfilled by increased capacity new branch locations in Birtley • Streamlined Branch team,
Slide 18: Which is great value for our customers (vs Cazoo)
Which is great value for our customers Motorpoint Key Motorpoint benefits Cazoo Award winning service £19,999* £20,500* Extensive Choice 2,869 miles/69 plate 18,738 miles/69 plate Great Value AutoTrader Price Position AutoTrader Price Position 91.97% Quality Standard 99.15% Flexible Finance Options
Slide 19: Which is great value for our customers (vs Cinch)
Which is great value for our customers Motorpoint Key Motorpoint benefits Cinch Award winning service £8,599* £9,250* Extensive Choice 8,059 miles/19 plate 8,046 miles/68 plate Great Value Quality Standard Flexible Finance Options Online + In Branch Competitive Part Exchange Prices Test Drives Readi
Slide 20: Whilst we deliver the best service and quality
Whilst we deliver the best service and quality 33% Repeat customers Motorpoint Quality Standard sits at the core of our operations, ensuring we deliver the highest levels of quality FY20: 30% <30 mins of product and service along the Average handover entire customer journey. This latest pillar to ou
Slide 21: And acting responsibly
And acting responsibly By supporting our environment and our communities Birmingham Clean The following initiatives were “ Motorpoint has • Employees Enterprise Air Zone Initiative undertaken in FY21 always been heavily Network Birmingham City Council partnered with us to offer people • 4,528 tyre c
Slide 22: Powered by our people
Powered by our people # 1 Automotive Team 4.5/5 company turnover Best Companies ranking Reduced to 19% in FY21 (FY20: 26%) Our Glassdoor score overall #18 • The Inclusion Committee is chaired by the Chief People Officer and has eight other team member representatives from 46 c.800 across the group a
Slide 23: Strengthened by our leadership at all levels
Strengthened by our leadership at all levels Good mix of new skills and industry experience to deliver and accelerate E-commerce transformation Chief Executive Officer Chief Chief Chief Financial Chief Technical Chief Marketing Chief Digital Chief People Operating Commercial Officer Officer Officer
Slide 24: Back open for business
Back open for business Huge online growth in Q4 Strong demand In Branch and Online since April reopening 24 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 25: Financial highlights and performance summary
Financial highlights and performance summary Chris Morgan, CFO 25 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 26: Financial highlights
Financial highlights £’m unless stated FY21 FY20 Change Revenue 721.4 1018.0 (29.1)% Resilient performance during lockdown, increasing online activity Profit before tax 9.7 18.8 (48.4)% • Revenue reduction consequence of pandemic and Cash 6.0 0.8 5.2 government lockdowns • Decisive action to preserv
Slide 27: Operating results
Operating results £’m FY21 FY20 Change Revenue • 68k vehicles sold (FY20: 96k), 43k to retail customers. ₋ Retail 593.8 839.0 Of total, 69% vehicle sales online ₋ Wholesale 127.6 179.0 • Online retail revenue up 35% Total revenue 721.4 1018.0 (29.1)% • 9,300 vehicles home delivered • Gross margin im
Slide 28: Balance sheet
Balance sheet £’m FY21 FY20 Fixed assets 16.1 18.9 • One new site opened in Stockton-on-Tees Right of use assets 43.6 41.6 • Sales and leaseback of Swansea site completed Q421 • Planned stock build up for April 2021 Inventories 128.4 111.8 • Stock funding in trade payables £89.2m (FY20: £86.1m) Net
Slide 29: Cashflow
Cashflow 25 • Cash supported by Government support (CJRS £3.9m and rates relief £1.8m) 6.1 • Capital expenditure includes Stockton-on-Tees 20 18.3 • Disposal relates to Swansea sale and leaseback • Stock build up in Q4 in advance -5.7 of reopening 15 -3.6 • Closing monthly net cash balances positive
Slide 30: Capital light model generates high ROCE
Capital light model generates high ROCE Return on capital employed 140% • ROCE reduction consequence of pandemic and government 117% lockdowns 120% • Leasehold property model 102% 91% 97% • Stock funded by third parties 100% • Vehicle paid for prior to delivery/collection 80% • Stock turn improvemen
Slide 31: Strategic update and outlook
Strategic update and outlook Mark Carpenter, CEO 31 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 32: Our ambition is to double revenue to more than £2 billion
Our ambition is to double revenue to more than £2 billion in the medium term 32 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 33: What does this ambition look like?
What does this ambition look like? Double revenue Online revenue Gross Profit margin Profit Before Tax margin EBITDA £ 1.0bn £ 0.4bn 7.8% 1.8% 2.7% Actual FY20 Medium term targets >£2.0bn >£1.0bn >8% 2-3% 3-4% Across retail and wholesale sales Whilst balancing customer Whilst investing in data, tech
Slide 34: Our medium term operating margins
Our medium term operating margins FY20 Medium term base case Gross Profit 7.8% >8.0% Staff costs 3.0% c. 2.7% Marketing 0.7% c. 1.2% Depreciation/Occupancy 0.7% c. 0.6% Other 1.2% c. 1.1% Interest 0.4% c. 0.4% Profit Before Tax 1.8% >2.0% 34 Motorpoint Group Plc - Full Year Results 2021 and New Stra
Slide 35: We see huge potential in the current market
We see huge potential in the current market… 8 million annual Huge potential. 1.5 Disrupt established used car million units in <0-3 auction wholesale transactions market market Industry low levels of Fragmented Growing availability customer satisfaction “competition of smaller fulfilment and trust
Slide 36: Customer
We’ve continued to invest in our evolving customer for over 20 years What matters to the customer: Drive our investment in: • Value The best price • Choice Make and model Location Technology + E-commerce • Quality Assurance Warranty Customer • Service Fluid between Customer Care Agents channels • Se
Slide 37: Our model is shifting as the online channel grows
Our model is shifting as the online channel grows Customer migration online Availability of smaller space Hub and spoke • Accelerated by Covid • OEMs rationalising costly dealer • Sales and fulfilment centres Increased market networks satisfying online demand • 36% of sales have been online since re
Slide 38: Meeting the potential across the UK through Hub and Spoke
Meeting the potential across the UK through Hub and Spoke FY20 Regional nearly new market share* 66% • Opportunity to further increase market share by reducing drive within time to branch 60 • Smaller ”spoke” branches provide strong brand awareness and support online Reserve and Collect minutes and
Slide 39: Both branch cohorts and online growth drive market share
Both branch cohorts and online growth drive market share Potential Sales Channel mix 80% Market 60% 3.5 share 40% years grows 20% 0% Average repeat cycle Market share grows over 8 FY20 FY21 FY22 FY23 FY24 years as customers repeat Branch Online Branch cohorts prove market share growth 15% 10% 33% 5%
Slide 40: Increased investment into technology, data, E-commerce and capacity will accelerate growth
Increased investment into our technology, data, E-commerce and capacity will accelerate our growth 40 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 41: Our strategy to grow revenue to more than £2 billion in medium term
Our strategy to grow revenue to more than £2 billion in medium term Rapidly upscaling our Operational efficiency Increase customer Expand wholesale E-commerce through technology and acquisition and retention channels capability innovation • Increased investment in technology • Open 12 sales and coll
Slide 42: Our people and culture will continue to underpin our strategic growth
Powered by Our People Our people and culture will continue to underpin our strategic growth People strategy Enabled by Targeted Goals • Growth • Organisational design to meet • Employees become • Performance digital transformation shareholders • Reputation • Acquisition of new skills • Maintain 3* b
Slide 43: A proven profitable growth model full of opportunity
A proven profitable growth model full of opportunity Opportunities for growth Motorpoint today • Relentless focus on E-commerce • High online sales content • Increasing shift to online provides operating model opportunities • High In Branch NPS • Greater market share accessed • Leading Value retaile
Slide 44: Q+A
Q+A 44 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 45: Appendix
Appendix Financial and non-financial KPIs 45 Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives
Slide 46: Financial and non-financial KPIs
Financial and non-financial KPIs FY21 FY20 FY19 FY21 FY20 FY19 Volumes Finance Penetration – Branch 48% 48% 47% Retail 43,144 60,475 63,429 Finance Penetration – Online 38% 34% 33% Wholesale 24,367 35,772 38,472 Total 67,511 96,247 101,901 Preparation pu 198 213 206 Transport pu 97 94 88 Online 22,5
Slide 47: Disclaimer
Disclaimer The information, opinions and statements contained in this presentation and any associated discussion (this “Presentation”) has been prepared by Motorpoint Group PLC (the “Company”) and has not been independently verified. The Presentation is only intended for information and reference pu