Headlam Group Plc · LSE:HEAD
Headlam — Investor Presentation (January 2023)
20 slides from Headlam's investor presentation, January 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION January 2023 The leading floorcoverings distributor
Slide 2: Agenda
AGENDA Chris Payne Chief Executive • About Us • 2022 Backdrop and Outturn • Growth Strategy • ESG Update and Board • Summary 2
Slide 3: 30 Years, 67 Businesses, 22 Main Distribution Sites
30 Years Delivering flooring products, expertise and solutions across the industry 67 Businesses To capture regional and national sales, supported by group’s centralised resources and processes 22 Main Distribution Sites Extensive nationwide network, with ongoing investment (incl. systems, equipment
Slide 4: 2022 Backdrop and Outturn
2022 BACKDROP AND OUTTURN 4
Slide 5: 2022 Backdrop and Outturn
2022 BACKDROP AND OUTTURN Delivery of the strategy helping to offset weaker residential demand 2022 Backdrop and Trends • Weak UK residential sector demand due to cost of living crisis (group revenue split: 69% residential, 31% commercial) • However, good progress under the growth strategy helping t
Slide 6: Growth Strategy
GROWTH STRATEGY 6
Slide 7: Strategy
STRATEGY Driving additional revenue growth from a more efficient operating base • Focus on operating efficiency • Investing in the network (sites and equipment) and systems to optimise performance and support revenue growth • Modernisation and digitalisation to increase revenue opportunities and hel
Slide 8: Strategy: Key revenue growth drivers
STRATEGY Key revenue growth drivers Significant additional revenue growth opportunities Trade Counters Multiple Retailers / Digital and Products and Roll-out Larger Customers Ecommerce Brands Accelerating roll-out of new Actively targeting the Enhanced Digital and New launches and relaunches and imp
Slide 9: Trade Counters
TRADE COUNTERS Accelerating roll-out of new and improved sites nationwide Fast growing business unit: • 53 uninvested sites in 2021 • Target of 90 fully invested sites by 2025 • Adding c £120m of new revenue to base of £80m • Total capex of c £25m Good progress being made: • 58 sites at end of 2022,
Slide 10: Multiple Retailers and Larger Customers
MULTIPLE RETAILERS AND LARGER CUSTOMERS Significant revenue opportunity from a modest position, good progress being made Offering a strong service proposition: • Reduces complexity and cost for customer and supplier, work closely with both • Tailored solutions • Supply chain management / stockholdin
Slide 11: Multiple Retailers and Larger Customers: Case Studies
MULTIPLE RETAILERS AND LARGER CUSTOMERS Case Studies Homebase Top 10 UK housebuilder • 2 year contract signed in May 2022 • Vast majority of all new UK homes sold with flooring • A leading home improvement retailer and garden centre, with over 150 stores • Headlam’s first national contract with a ho
Slide 12: Digital and Ecommerce
DIGITAL AND ECOMMERCE Increasing revenue opportunities and helping lower the cost to serve Investment being made in: • New and improved digital channels, including B2B websites and myheadlam app • Product brand awareness • Core operating system • Further systems integration, to particularly support
Slide 13: Product and Brands
PRODUCT AND BRANDS Brands being refreshed and relaunched to support increased sales Leveraging Headlam’s brands • Headlam offers product from less than £10 per sqm to over £150 per sqm (retail prices) • Headlam owns a number of well regarded and recognised brands, including: Crucial Trading (upper p
Slide 14: Everyroom
EVERYROOM Launch of new and exclusive affordable residential range in 2022 • Available to all Headlam customers, with free sampling • Helping to secure sales at a time when end-consumers more cost conscious • Very positive feedback, sales of +£6m since formal launch in Q3 2022, and now a finalist fo
Slide 15: Acquisition of Melrose Interiors in 2023
ACQUISITION OF MELROSE INTERIORS IN 2023 Supports delivery of the strategy in a number of areas Leading distributor of rugs • Largest independent supplier to UK online rug industry (Headlam very underweight) • Many larger customers, including major high street and online retailers (new to Headlam) •
Slide 16: ESG Update and Board
ESG UPDATE AND BOARD 16
Slide 17: ESG Update and Board
ESG UPDATE AND BOARD Continuing to meaningfully develop and progress the established ESG Strategy Recent ESG Updates Recent Board Appointments Environmental Increased oversight and contributions to strategy • Net Zero 2035 (Scope 1 and 2) transition • Karen Hubbard, formerly CEO of Card Factory plan
Slide 18: Summary
SUMMARY 18
Slide 19: Summary
SUMMARY Strategy proving an effective countermeasure against current weaker UK residential demand Solid base • Market leading by a significant degree • Strong balance sheet and shareholder returns profile • Many opportunities to increase overall market share Comprehensive strategy • Revenue growth d
Slide 20: Q&A
Q&A headlamgroup@headlam.com