Victorian Plumbing Group Plc · LSE:VIC
Victorian Plumbing — H1 FY22 Earnings Presentation
36 slides from Victorian Plumbing's earnings presentation, May 17, 2022
Slide 1: Half year results presentation
Half year results presentation Six months ended 31 March 2022 17 May 2022
Slide 2: Agenda
AGENDA Today’s speakers Overview FY22 Half year results Mark Radcliffe, CEO Key drivers and strategic progress Current trading and outlook Q&A Paul Meehan, CFO 2
Slide 3: Overview
OVERVIEW Results in line with expectations in a challenging environment as we lap a period of Covid-19 related lockdowns, consolidating our position as the UK’s number one online retailer for bathroom products Strategic increase in marketing activity which has enabled us to take market share Given t
Slide 4: Half year results
HALF YEAR RESULTS Six months ended 31 March 2022
Slide 5: Financial highlights
FINANCIAL HIGHLIGHTS Revenue of £133.9m, representing growth of 39% on a two-year basis and down by 5% year-on- £134m year (H1 2021: £140.7m) despite lapping a period of Covid-19 related lockdowns Gross profit reduced by 15% to £58.5m (H1 2021: £69.0m) with Gross profit margin reducing by 44% five p
Slide 6: Operational highlights
OPERATIONAL HIGHLIGHTS Total orders for the six months ended 31 March 2022 of 453,000, a 31% increase from pre- 453k pandemic levels (H1 2020: 345,000), and just 7% down from H1 2021 in which the UK was largely under Covid-19 restrictions (H1 2021: 486,000) £296 Average order value up 2% to £296 (H1
Slide 7: Income statement
INCOME STATEMENT Income statement (£m) H1 FY22 H1 FY21 H1 FY20 YoY % 2YoY % Revenue 133.9 140.7 96.0 (5%) 39% Cost of sale (75.4) (71.7) (55.2) (5%) (37%) Gross profit 58.5 69.0 40.8 (15%) 43% Marketing costs (40.2) (38.4) (25.8) (5%) (56%) Other underlying costs (11.6) (10.5) (6.2) (10%) (87%) Adju
Slide 8: Revenue
REVENUE Total orders (‘000) Revenue (£m) YoY% 22% 41% (7%) 2YoY% 39% 486 453 345 YoY% 31% 47% (5%) H1 FY20 H1 FY21 H1 FY22 140.7 133.9 Average order value (£) YoY% 8% 4% 2% 20.9 24.6 +18% 96.0 278 289 296 13.6 H1 FY20 H1 FY21 H1 FY22 119.8 109.3 (9%) Active customers (‘000) 82.4 YoY% 19% 39% (8%) 36
Slide 9: Gross profit
GROSS PROFIT % of revenue – own brand and 3rd party brands 25% 24% 25% Gross profit (£m) and Gross profit margin (%) 75% 76% 75% YoY% 34% 69% (15%) 10 0 .0 10 0 % H1 FY20 H1 FY21 H1 FY22 Own brand Third party 90 . 0 90 % GP% 43% 49% 44% 80 . 0 80 % Gross profit – own brand margin % 7 0 . 0 7 0 % YoY
Slide 10: Underlying costs
UNDERLYING COSTS CAC - Marketing cost per order placed (£) Underlying costs (£m) YoY% 5% 7% 13% YoY% 29% 53% 6% 91 75 81 51.8 H1 FY20 H1 FY21 H1 FY22 (33%) 48.9 1.1 2.5 1.7 21% Marketing as a % of revenue 2.1 8.0 18% 30% 6.8 27% 27% 32.0 0.8 H1 FY20 H1 FY21 H1 FY22 1.2 40.2 5% 38.4 4.2 Average numbe
Slide 11: Adjusted EBITDA and cash conversion
ADJUSTED EBITDA AND CASH CONVERSION Adjusted EBITDA (£m) and Adjusted EBITDA margin (%) Free cash flow and cash conversion YoY% 57% 128% (67%) Cash conversion 25 21% AEBITDA% 9% 14% 5% 20 3.2 15 6.7 10 20.1 1.5 5 0.6 8.8 6.7 1.4 0 H1 FY20 H1 FY21 H1 FY22 Adjusted Working Capex Lease Free cash EBITDA
Slide 12: Cashflow and capital allocation
CASHFLOW AND CAPITAL ALLOCATION The Group started the financial year Half year net cash reconciliation with £32.7m of net cash Cash generated through EBITDA performance of £6.7m, offset by an investment in working capital of £3.2m 1.5 Increased working capital relates 3.5 specifically to increased s
Slide 13: Cash flow statement
CASH FLOW STATEMENT Cash flow statement H1 FY22 H1 FY21 YoY % FY21 Adjusted EBITDA 6.7 20.1 (67%) 40.1 Changes in working capital (3.2) (0.6) 426% (3.2) Cash gen. from ops. before exceptionals 3.5 19.5 (82%) 36.9 Cash flows from exceptionals (0.1) (0.1) - (9.1) Cash generated from operating activiti
Slide 14: Statement of financial position
STATEMENT OF FINANCIAL POSITION Summary Statement of financial position H1 FY22 H1 FY21 YoY % FY21 Intangible assets 3.1 2.5 24% 2.7 Strong net assets position going into H2 PPE & right of use assets 6.5 7.4 (12%) 7.0 Total non-current assets 9.6 9.9 (3%) 9.7 Stock holding increased to mitigate ongo
Slide 15: Key drivers and strategic progress
KEY DRIVERS AND STRATEGIC PROGRESS
Slide 16: Our strategy
OUR STRATEGY We think about our strategy with reference to 3 horizons Horizon 3 Horizon 2 Horizon 1 Adjacent Trade categories Core B2C Focus on sole traders and SME Support existing projects for plumbers & builders both consumers and trade Customer acquisition, new product development and innovation
Slide 17: We continue to invest in bold marketing
WE CONTINUE TO INVEST IN BOLD MARKETING . . . Brand Media Search Marketing Data-driven, in-market sales acquisition at an efficient cost per sale in PPC Largest PPC keyword coverage vs competitor set at c.200k Dominant approach, supports expansion into new categories and increasing market share Ad c
Slide 18: Allowing us to maintain our market leading position
. . . ALLOWING US TO MAINTAIN OUR MARKET LEADING POSITION Victorian Plumbing vs Unique visitors (m) (1) leading online 2x 3x 4x 6x competitors H1 FY22: Victorian Competitor Competitor Competitor Competitor 2.5 Plumbing A B C D 2.0 1.5 1.0 0.5 0.0 21 9 0 20 1 1 9 1 20 0 0 22 22 21 21 21 21 1 20 20 20
Slide 19: We are investing in our platform to support future growth
WE ARE INVESTING IN OUR PLATFORM TO SUPPORT FUTURE GROWTH Our in-house technology & infrastructure team are developing bespoke software solutions Relaunch of the new website has been the key focus of the team with UAT well underway New platform will allow more incremental changes that we can test at
Slide 20: Personalised offering to trade customers
PERSONALISED OFFERING TO TRADE CUSTOMERS Trade portal gives customers easy access to their account, which is supported by a dedicated account management team Prices shown to the customer through the portal incorporate the agreed customer discount, increasing transparency Work nearing completion on T
Slide 21: Range expansion in adjacent products
RANGE EXPANSION IN ADJACENT PRODUCTS Wall and floor tiles Lighting Increased our supplier base for lighting Number of products available increased to over 750 Increased tile ranges by 38% in H1 FY22 Layout of tile offering on site under review Revamp of tile sample process in progress Other categori
Slide 22: Making a splash in ESG
MAKING A SPLASH IN ESG We are early in our ESG journey, but we have identified three areas which we will focus on. Our reporting will align with TCFD and SASB frameworks Governance Diversity and Environmental and ethics inclusion sustainability Plc board continually assesses We have a values-led cul
Slide 23: Current trading and outlook
CURRENT TRADING AND OUTLOOK
Slide 24: Current trading
CURRENT TRADING Through the first quarter of FY22 (Oct-Dec 21) demand and revenue were broadly the same as last year and 47% ahead of FY20 Whilst Q2 comparatives were much tougher, we delivered 33% revenue growth versus FY20 and (8%) vs FY21 when the UK was in full lockdown Q3 trading has begun well
Slide 25: Outlook
OUTLOOK Our business is built on good foundations. We have grown revenue rapidly over a number of years and operate with industry leading margins, driving a highly cash generative model with no debt Our strong balance sheet is an advantage in a competitive market, supporting being bold in our market
Slide 26: Q&A
O&A victorian plumbing.cou
Slide 27: Disclaimer
DISCLAIMER The information and opinions provided in this presentation are provided as of the date of this presentation. Certain statements in this presentation constitute forward looking statements (including beliefs or opinions). Any statement in this presentation that is not a statement of histori
Slide 28: Appendix
APPENDIX victorian
Slide 29: Our journey to date
OUR JOURNEY TO DATE Listed 24th in The Sunday Times Fast Track 1002 – fastest Tech Hub opened growing private Operations move to Listed 16th in The in Manchester companies Skelmersdale Sunday Times Fast Warehouse Track 1001 – fastest 3 million growing private orders(3) companies Digital Growth New H
Slide 30: Large and growing market opportunity
LARGE AND GROWING MARKET OPPORTUNITY Sales of core bathroom products and bathroom accessories in the UK UK home improvement and gardening e-commerce penetration(1) Market value (£bn inclusive of VAT) 50% 1.8 c.1.6 40% % 38% 5: 3.0 40% 35% -202 020 33% 1.6 1.4 C AGR 2 29% 30% 8% 5-2020: 2. 20% 22% Ac
Slide 31: Online specialists are taking market share, with Victorian Plumbing taking an outsized share
ONLINE SPECIALISTS ARE TAKING MARKET SHARE, WITH VICTORIAN PLUMBING TAKING AN OUTSIZED SHARE Retail sales by channel CY2015 CY2019 CY2020 -0ppt Other Builders' Other Builders' Other Builders' merchants ~2% merchants ~2% merchants ~1% +1.2ppt -0ppt ~8% ~13% -5ppt DIY retailers Independent~8% DIY reta
Slide 32: Victorian Plumbing is the online market leader
VICTORIAN PLUMBING IS THE ONLINE MARKET LEADER Rapid market share expansion to become #1 online bathroom brand in the UK and #1 specialist bathroom brand Market share of bathrooms by revenue -3.3ppt +10.9ppt -0.1ppt -1.6ppt +1.3ppt +2.4ppt -0.3ppt +2.0ppt +2.5ppt +0.7ppt -0.2ppt +0.1ppt -8.2ppt -3.8
Slide 33: One-stop shop for a customer's bathroom needs
ONE-STOP SHOP FOR A CUSTOMER’S BATHROOM NEEDS Bathroom Furniture Shower Enclosures Showers (1) FY21 Revenue by product category Shower Enclosures Other ~3,200 SKUs 51 Brands ~2,600 SKUs 39 Brands ~2,500 SKUs 42 Brands Bathroom Baths Taps Toilets Furniture Bathroom Suites Showers Toilets ~1,350 SKUs
Slide 34: Strong stable of own & 3rd party brands
STRONG STABLE OF OWN & 3RD PARTY BRANDS Own brand gross margin significantly higher than third party brands FY21 revenue Selected own brands split Selected third party brands >20 brands >100 brands 24% 76% Source: Company information 34
Slide 35: Our business model
OUR BUSINESS MODEL Victorian Plumbing’s business model benefits from a virtuous cycle of investments in NPD & marketing building competitive moats Source: Company information 35
Slide 36: victorian
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Victorian Plumbing Group — H1 FY22 Earnings Presentation on 6ix