Headlam Group Plc · LSE:HEAD
Headlam — Shareholder Meeting (May 2022)
23 slides from Headlam's shareholder meeting presentation, May 2022
Slide 1: 2021 Summary and AGM Trading Update
2021 SUMMARY AND AGM TRADING UPDATE First four months to 30 April 2022 Europe’s leading floorcoverings distributor
Slide 2: Agenda
AGENDA Chris Payne Chief Executive • About Us • Board • 2021 Financials • Capital Allocation Priorities • Strategy and Operations • ESG Update • 2022 Trading Update (4 months) • Summary 2
Slide 3: About Us
ABOUT US Europe’s leading floorcoverings distributor Market Leading • 30 years operating • 25,000 trade customer accounts • Most comprehensive service offering • Servicing residential and commercial sectors • 39,000 SKUs Nationwide Operations • 66 businesses, and dedicated sales teams • 21 distribut
Slide 4: Board
BOARD Expanded skills and experience Keith Edelman Chris Payne Patrick Butcher Non-Executive Chairman Chief Executive Interim CFO • Appointed Chair at 2022 AGM • Appointed Chief Executive in • Joined as temporary CFO in March 2022 April 2022 • Extensive commercial experience • Joined as CFO in 2017
Slide 5: Financials
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Slide 6: 2021 Financial Highlights
2021 FINANCIAL HIGHLIGHTS Strong recovery from impact of COVID-19 Revenue • Revenue +15.4% at £667.2m, a strong rebound from 2020 which was materially impacted by COVID-19 related closures of operations in H1 20 (2020: £578.1m) • Gross margin increased to a record 33.0% (2020: 30.8%) owing to the in
Slide 7: UK Distribution Daily Sales (2019–2021)
UK DISTRIBUTION DAILY SALES (2019 – 2021)* £000 Sales per Day 3,000 2,500 2,000 1,500 1,000 500 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 2021 *Calculated on a like-for-like basis, being based on activities and businesses that made a full contribution in both the current and previo
Slide 8: Financial Track Record
FINANCIAL TRACK RECORD Financial strength, and track-record of returns Revenue Statutory basic (loss)/earnings per share Underlying operating profit £667.2m 719.2 667.2 23.5p £37.3m 42.2 37.3 578.1 +15.4% +213.5% +114.4% (2020: £578.1m) (2020: (20.7)p) (2020: £17.4m) 17.4 Statutory operating profit
Slide 9: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Strong foundations, investment, and shareholder returns Capital Allocation Priorities* Maintain strong balance sheet Increased Investment • Trade counter roll-out (see page 13) • Replacing / upgrading warehouse Investment in the business equipment and MHE Ordinary Divid
Slide 10: Strategy and Operations
STRATEGY AND OPERATIONS 10
Slide 11: Business Change Strategy
BUSINESS CHANGE STRATEGY Meaningful organic revenue growth from an efficient operating base • Operational efficiency through simplification, cost control and digitalisation • Actively targeting a larger share of the £3 billion* UK market • Improved service propositions to all customer segments £3 bi
Slide 12: Strategy in Action
STRATEGY IN ACTION Benefits flowing through both operationally and financially Operating Product and Suppliers and ESG Efficiency Brands Buying Strategy Network and delivery Refocusing of some Increased engagement and First full-form report consolidations (reductions in recognised product brands str
Slide 13: Trade Counters
TRADE COUNTERS Accelerating roll-out of new and improved sites nationwide New ‘blueprint’ sites performing well 13 sites operating under the new ‘blueprint’ by end of May 2022 (54 sites in total) Positive feedback from customers and employees Encouraging early performances: • Higher revenue • Accele
Slide 14: Multiple Retailers
MULTIPLE RETAILERS Substantial scope to develop the revenue opportunity New Customer: Oak Furnitureland Specialist British furniture retailer with 70 stores across the UK New customer since Q4 2021 Partnered with Headlam to launch their new engineered wood flooring proposition • Headlam significantl
Slide 15: Digital and Ecommerce Applications
DIGITAL AND ECOMMERCE APPLICATIONS Increasing revenue opportunities and efficiency Industry-leading fully transactional mobile app launched in November 2021 Enabling customers to trade with Headlam in a quick and easy way • Curated suite of digital products launched to • Access to all Headlam accoun
Slide 16: Product and Brand Development
PRODUCT AND BRAND DEVELOPMENT Refocusing, relaunches and launches Refocusing of recognised brands • Investment in dedicated team to support product and brand development • Refocusing of recognised product brands to keep them fresh, increase sales opportunity ‘Wool Britannia’ sustainable product rang
Slide 17: Suppliers and Buying
SUPPLIERS AND BUYING Long-established relationships, with many opportunities Inventory Management Sustainability • Maintained inventory levels despite • Supply Risk Assessment underway recent industry supply issues • Further sustainable product • Testament to long-established launches planned in con
Slide 18: ESG Update
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Slide 19: ESG Strategy
ESG STRATEGY Full-form ESG Report published alongside 2021 Annual Report Core focuses • Reducing contribution to Greenhouse Gas (‘GHG’) emissions and climate change • Becoming a more sustainable business, including through cultural development and increased oversight • Increasing the sustainability
Slide 20: 2022 Trading Update
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Slide 21: Performance and Market Backdrop
PERFORMANCE AND MARKET BACKDROP First four months trading • Overall revenue performance in-line with 2021, with profit above 2021 • Some softening in residential sector (-0.5% v same 2021 period) and delayed orders, however: • Commercial sector continued to show recovery following severely impacted
Slide 22: Summary
SUMMARY Well positioned despite expected market weakening in residential Comprehensive growth focused strategy • Demonstrating progress in multiple areas • Increasing contributions expected • Should provide a countermeasure and some protection against the weaker underlying market Continue to be comf
Slide 23: Q&A
Q&A headlamgroup@headlam.com 23