Theworks.co.uk Plc · LSE:WRKS
Theworks.co.uk — FY2021 Earnings Presentation
26 slides from Theworks.co.uk's earnings presentation, Jul 20, 2021
Slide 1: FY21 preliminary results presentation
TheWorks.co.uk What will you discover? FY21 preliminary results presentation 53 weeks ended 2 May 2021 20 July 2021
Slide 2: Agenda
Agenda • Highlights Gavin Peck (CEO) • Financial Review Steve Alldridge (CFO) • Business Review Gavin Peck (CEO) 1
Slide 3: Highlights
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Slide 4: Resilient performance against backdrop of COVID-19
• Resilient performance against backdrop of COVID-19 • Good progress made on refocussed strategy • Strong trading since coming out of lockdown 3 (2yr LFL +13.0% in 11 weeks to 18 July 2021) • Peak trading and ongoing global freight challenges still to navigate in FY22 • Emerged from pandemic a stron
Slide 5: Financial Review
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Slide 6: Adjusted EBITDA £4.3m vs. £10.8m LY (pre IFRS 16)
• Adjusted EBITDA £4.3m vs. £10.8m LY (pre IFRS 16) • Results dominated by COVID-19 impact on sales: FY21 FY20 Variance Variance £m £m £m % LFL store sales when stores open 128.9 121.6 7.3 6.0% Strong underlying performance, online and stores when able to Online sales (53 weeks) 62.1 28.1 34.0 120.9
Slide 7: Adjusted, pre IFRS 16 EBITDA
Adjusted, pre IFRS 16 EBITDA FY21 FY20 Variance • Other operating income includes furlough £'m £'m % scheme and business support grants; rates Revenue 180.7 225.0 (19.7%) relief is netted off within operating costs Product gross margin 111.5 138.9 (19.7%) Other operating costs exc. D&A (124.3) (131.
Slide 8: Revenue FY21
FY21 FY20 Variance Variance £m £m £m % LFL store sales when stores open 128.9 121.6 7.3 6.0% Online sales (53 weeks) 62.1 28.1 34.0 120.9% Total LFL sales 191.0 149.7 41.3 27.6% Non LFL store sales 15.2 104.9 (89.7) (85.5%) Total gross Sales 206.2 254.6 (48.5) (19.0%) VAT (24.3) (27.9) 0.0 (12.9%) L
Slide 9: Product gross margin
Product gross margin FY21 FY20 Var Var £m £m £m % Revenue 180.7 225.0 (44.3) (19.7%) Cost of goods sold 69.1 86.1 17.0 19.7% Product gross margin 111.5 138.9 (27.4) (19.7%) Product gross margin % 61.7% 61.8% (0.1%) • Underlying gross margin percentage in line with FY20 • Lower discounting throughout
Slide 10: Pre IFRS 16 Adjusted EBITDA analysis
Pre IFRS 16 Adjusted EBITDA FY21 % of FY20 % of Variance Variance analysis £'m revenue £'m revenue £m (%) Revenue 180.7 225.0 (44.4) (19.7) Cost of goods sold 69.1 38.3 86.1 38.2 16.9 19.7 Store payroll 37.7 20.8 42.1 18.7 4.4 10.5 Store property costs 32.7 18.1 44.3 19.7 11.6 26.1 Other direct sell
Slide 11: Capital expenditure
FY21 FY20 Variance £'m £'m £'m New stores and relocations 0.6 4.8 4.2 Store refits and rebrands 0.7 0.4 (0.3) IT hardware and software 0.6 0.8 0.2 Web development 0.5 1.4 0.9 Other 0.1 1.3 1.2 Total capital expenditure 2.4 8.7 6.3 • Capex lower than c. £3.0m guided to last year; partially reflecting
Slide 12: Cash flow and net cash
FY21 FY20 Variance £'m £'m £'m Cashflow pre-working capital 3.3 9.2 (5.9) Working capital 7.7 (8.1) 15.8 Capex (2.4) (8.7) 6.3 Tax paid 0.0 (1.0) 1.0 Interest and facility costs (0.9) 0.1 (1.0) Dividends 0.0 (2.3) 2.3 FX adjustment 0.2 0.3 (0.1) Total movement in net cash/(bank debt) 7.9 (10.5) 18.4
Slide 13: Business Review
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Slide 14: Our purpose and strategic building blocks
Our purpose: “We are people who do, inspiring people to do” 1. Develop our brand and increase our customer engagement Our building 2. Enhance our online proposition blocks 3. Optimise our store estate 4. Improve our operational capabilities Drive Invest in our Build on our Develop our Our enablers o
Slide 15: Brand and customer engagement
• Proposition has resonated particularly well with customers during COVID-19. Confidence in: Increased clarity of purpose Opportunity to increase loyalty of, and engagement with, existing customers Ability to attract new customers • Key work underway to support this: Key brand differentiator
Slide 16: Enhance our online proposition
• Online channel remains: A key differentiator in the value retail sector An opportunity to attract new customers to the brand • FY21 was a transformational year for our online business − Sales more than doubled – growth from new and existing customers − New web platform successfully launched in
Slide 17: Optimise our store estate
• Store estate remains lifeblood of business and will be for many years to come • New store rollout scaled-back from turn of 2020 – focus on driving improvements through existing store estate Improving customer experience through better ranging, merchandising and navigation Refit programme to br
Slide 18: Improve our operational capabilities: supply chain
• Continuing journey to becoming a more agile and modern business • Initial focus on supply chain End to end stock management review underway Targeting improved product availability and increased efficiency • Priority areas of focus Improving our import supply chain Refining our approach to
Slide 19: Enablers: people, efficiency, systems and ESG
• Developing our people New purpose and values defined – embedding in FY22 Record annual colleague engagement score achieved in FY21 Investing in capability and capacity across IT, Supply Chain and Digital New leadership team in place • Driving operational efficiency New store labour model
Slide 20: Current trading and outlook
• Strong sales performance – ahead of internal plan • 2yr LFL +13.0% Positive LFLs in stores – strong growth in ATV offsetting lower retail footfall Online sales double 2019 levels – despite lower promotions and reduced marketing spend • Sales growth being driven by: Continued strong demand fo
Slide 21: Summary and conclusions
• Resilient performance against backdrop of COVID-19 • Good progress made on refocussed strategy • Strong trading since coming out of lockdown 3 (2yr LFL +13.0% in 11 weeks to 18 July 2021) • Peak trading and ongoing global freight challenges still to navigate in FY22 • Emerged from pandemic a stron
Slide 22: Questions
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Slide 23: Appendices
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Slide 24: IFRS 16 impact on PBT
FY21 FY20 £'m £'m Rents excluded from IFRS 16 calculation 27.6 25.9 Right of use asset depreciation (22.9) (22.8) Lease liability interest charge (4.9) (4.0) IFRS 16 charges (27.7) (26.8) IFRS 16 effect on Adjusted PBT (0.2) (0.9) IFRS 16 effect on Adjusting items (impairment) 0.1 (2.9) PBT impact o
Slide 25: Carolyn Bradley biography
Carolyn Bradley • Extensive marketing and commercial experience at Tesco including • Group Brand Director • UK Marketing Director • Chief Operating Officer for Tesco.com. • Non-executive roles since leaving Tesco in 2013 including • Senior Independent director and Rem Co Chair at the SSP Group plc •
Slide 26: Summary balance sheet extract
FY21 FY20 Summary balance sheet extract £'m £'m Non current assets 135.4 142.8 Stock 29.1 26.6 Other current assets 7.6 10.3 Gross cash 8.3 6.5 Total assets 180.4 186.3 Interest bearing borrowings 7.1 13.5 Other current liabilities 60.1 49.2 Non current liabilities 104.4 110.2 Total liabilities 171.