Pets At Home Group Plc · LSE:PETS
Pets At Home — H1 FY23 Earnings Presentation
39 slides from Pets At Home's earnings presentation, Nov 23, 2022
Slide 1: FY23 Interims result presentation
Pets at Home Group Plc FY23 Interims result presentation 23 November 2022
Slide 2: Overview
Pets at Home Group Plc FY23 Interim Results 2 November 2022 Overview A unique business in a resilient and growing market A growing market; premiumisation and humanisation drive growth Defensiveness of pet care spend evident; H1 Retail LFL +6% YoY, vet practice sales +7% YoY Higher pet ownershi
Slide 3: Early priorities
Pets at Home Group Plc FY23 Interim Results 3 November 2022 Early priorities Getting to know our operations and our people Gaining deep and actionable data and insight on the sector Reorganisation to simplify, delayer and integrate A step-change in customer centricity Evaluating our strate
Slide 4: A strong and differentiated business
Pets at Home Group Plc FY23 Interim Results 4 November 2022 A strong and differentiated business A market in structural growth; not just a pandemic boost Our expert colleagues and our culture are a strategic competitive advantage Category authority and pet-centric purpose Scale and reach giv
Slide 5: Significant opportunities ahead
Pets at Home Group Plc FY23 Interim Results 5 November 2022 Significant opportunities ahead A customer-centric focus A growing base of highly engaged pet owners Extensive proprietary data capability supporting greater personalisation Innovating across product, services and subscriptions A
Slide 6: Balanced, sustainable growth and returns
Pets at Home Group Plc FY23 Interim Results 6 November 2022 Balanced, sustainable growth and returns Strong shareholder returns balanced across top line growth, cash generation and progressive dividends Capital allocation framework unchanged A growing pet care platform across healthcare, digit
Slide 7: A strong start to the year
Pets at Home Group Plc FY23 Interim Results 7 November 2022 A strong start to the year Strong trading performance across H1 Continued growth in new customers, consumer demand resilient Deepening customer relationships and improving retention Ensuring pet care remains convenient and affordabl
Slide 8: Delivering strong revenue growth whilst investing for the future
Pets at Home Group Plc FY23 Interim Results 8 November 2022 Delivering strong revenue growth whilst investing for the future Group Revenue Group LFL Group Gross Group Underlying Margin PBT £727.2m +6.4% 47.5% £59.2m +7.3% YoY (123)bps YoY (9.3)% YoY Group FCF Net Cash CROIC Interim Dividend £41.4m £
Slide 9: A unique business in a resilient and growing market
FY23 Interim Results Pets at Home Group Plc 9 November 2022 A unique business in a resilient and growing market
Slide 10: We operate in a large and resilient market that is in structural growth
Pets at Home Group Plc FY23 Interim Results 10 November 2022 We operate in a large and resilient market that is in structural growth A large & Proven Track record of taking growing market resilience market share £6.7bn c90% c24% UK pet care market of customers not intending to Pets at Home market sh
Slide 11: Robustness of pet care spend is evident
Pets at Home Group Plc FY23 Interim Results 11 November 2022 Robustness of pet care spend is evident Non-Discretionary Products Need-Driven Services +8% +3% +4% +7% Food tonnage Consumables volume Dogs groomed Vet practice LFL YoY growth growth YoY YoY sales growth +14% c25% +8% +14% Advanced Nutrit
Slide 12: A unique combination of products, services and advice
Pets at Home Group Plc FY23 Interim Results 12 November 2022 A unique combination of products, services and advice Pureplays Grocers Lack of services Limited product range No store network for fulfilment No support or advice High customer acquisition costs Lack of pet data All channels All segments
Slide 13: A strategy to drive long-term, sustainable growth
FY23 Interim Results Pets at Home Group Plc 13 November 2022 A strategy to drive long-term, sustainable growth
Slide 14: Our strategy of building an integrated omnichannel pet care ecosystem continues to deliver
Pets at Home Group Plc FY23 Interim Results 14 November 2022 Our strategy of building an integrated omnichannel pet care ecosystem continues to deliver A customer-centric focus A unique omnichannel approach A truly integrated ecosystem The investments we are making today will drive long-term s
Slide 15: Unparalleled proprietary data insights to drive customer share of wallet
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 15 November 2022 Unparalleled proprietary data insights to drive customer share of wallet and provide a joined-up pet care experience ACQUIRE DEEPEN RETAIN customers relationships lifetime value +14% +600bps (230)bps
Slide 16: Acquire: Puppy & Kitten club registrations 3x higher than pre-pandemic
Customer-centric Omnichannel Integrated FY22 Prelim Results Pets at Home Group Plc FY23 Interim Results 16 May 2022 November 2022 Acquire: Puppy & Kitten club registrations 3x higher than pre- pandemic Registrations in Q2 FY23 averaged c29,000, over 3x higher than pre-pandemic c20% spend uplift
Slide 17: Deepen: 2 million VIPs now use > 1 channel, +30% in 2 years
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 17 November 2022 Deepen: 2 million VIPs now use > 1 channel, +30% in 2 years Store £115 £175 £670 £425 Online £105 £450 £630 £250 Veterinary £475 £290 £350 £50 Grooming VIPs engaging all channels spend 9x more vs sto
Slide 18: Retain: Many levers to drive lifetime loyalty
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 18 November 2022 Retain: Many levers to drive lifetime loyalty Data & CRM Subscriptions Private Label (230)bps +900bps +500bps Reactivation campaigns Customers on a Customers who shop have supported a 230bps su
Slide 19: Our growing range of pet care plans offer value and convenience
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 19 November 2022 Our growing range of pet care plans offer value and convenience Flea & Worm Easy Repeat Veterinary Healthplan monthly treatment food auto-ship preventative healthcare from £4/month up to10% discount
Slide 20: We are making good progress on project Polestar
Customer-centric Omnichannel Integrated FY23 Interim Results 20 Pets at Home Group Plc November 2022 We are making good progress on project Polestar; a significant enabler of future growth Delivered Delivered FY22 FY23 FY23 FY24 FY24 Single Sign On Pet Care App Pet Care Plans Booking Engine Pet Care
Slide 21: Our ongoing store transformation programme is making pet care even more convenient and engaging
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 21 November 2022 Our ongoing store transformation programme is making pet care even more convenient and engaging for customers Store refurbs to date 65 Planned rollout per annum 40 Online sales fulfilled from store n
Slide 22: Our smaller format stores have proved highly successful, with further rollout planned
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 22 November 2022 Our smaller format stores have proved highly successful, with further rollout planned Well-invested, localised community hubs for pet owners and pets All-in-one conveniently-located formats acros
Slide 23: Our new distribution facility will support our long term growth plans
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 23 November 2022 Our new distribution facility will support our long term growth plans Single purpose-built c670k sq.ft facility; optionality over c100k sq.ft additional space Consolidating legacy infrastructure
Slide 24: Our Vet Group and JV partners in increasingly strong health
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 24 November 2022 Our Vet Group and JV partners in increasingly strong health Practice Estate Vet Group FY23 H1 vs FY19 H1 FY23 H1 vs FY19 H11 Practice Sales EBITDA Revenue PBT +c55% +c600% +c75% +c110% # Profitable #
Slide 25: 62% of JV practices yet to reach full maturity
Customer-centric Omnichannel Integrated FY23 Interim Results Pets at Home Group Plc 25 November 2022 62% of JV practices yet to reach full maturity £1.6m Average practice customer sales Average practice PBT (pre fee income) £1.4m Average fee income to PaH £1.2m £1.0m £0.8m £0.6m £0.4m £0.2m £0.0m Pr
Slide 26: Many levers to drive growth over and above practice maturity
Customer-centric Omnichannel Integrated Pets at Home Group Plc FY23 Interim Results 26 November 2022 Many levers to drive growth over and above practice maturity Practice rollout & extension Improving clinical capacity Enhancing practice capabilities 5-15 new practice openings per year; Pathfinder i
Slide 27: Integrating our physical and digital proposition
Customer-centric Omnichannel Integrated Petsat at Pets Home Home Group Group Plc Plc FY23 Interim Results 27 November 2022 Integrating our physical and digital proposition ‘Pet Expert Live’ linking online customers live to in-store colleagues ‘One Device’ empowering colleagues across inventory manag
Slide 28: Financial review of FY23 interim results
FY23 Interim Results Pets at Home Group Plc 28 November 2022 Financial review of FY23 interim results
Slide 29: Delivering strong revenue growth whilst investing for the future
Pets at Home Group Plc FY23 Interim Results 29 November 2022 Delivering strong revenue growth whilst investing for the future Group Revenue Group LFL Group Gross Group Underlying Margin PBT £727.2m +6.4% 47.5% £59.2m +7.3% YoY (123)bps YoY (9.3)% YoY Group FCF Net Cash CROIC Interim Dividend £41.4m
Slide 30: Customer acquisition drives strong trading performance across the Group
FY23 Interim Results Pets at Home Group Plc November 2022 30 Customer acquisition drives strong trading performance across the Group Group Revenue (£m) H1 FY23 H1 FY22 Change Total1 727.2 677.6 7.3% Like-for-like 6.4% 22.2% Retail Revenue (£m) H1 FY23 H1 FY22 Change Food 387.6 336.7 15.1% Accessorie
Slide 31: Gross margin inline with plan
Pets at Home Group Plc FY23 Interim Results 31 November 2022 Gross margin inline with plan Group underlying gross margin bridge (123)bps Retail (129) bps1 Vet Group +8 bps1 Central (2) bps1 48.7% (49) bps +37 bps (29) bps (2) bps 47.5% (147) bps +67 bps H1 FY22 Freight Product Foreign Exchange Joint
Slide 32: Tight operational grip on costs and self help levers support further investment
Pets at Home Group Plc FY23 Interim Results 32 November 2022 Tight operational grip on costs and self help levers support further investment to drive growth Operational Efficiency Supporting our Growth 11.3% 4.1% growth 7.2% growth growth +£3.3m +£0.1m +£3.2m +£8.1m +£4.9m (£1.5m) +£4.6m Support Sto
Slide 33: Strong underlying trading performance offset by industry-wide cost headwinds
Pets at Home Group Plc FY23 Interim Results 33 November 2022 Strong underlying trading performance offset by industry-wide cost headwinds Group underlying PBT (9.3)% 9.6% margin 8.1% margin (£8.1m) £68.1m £10.9m (£4.0m) £65.3m (£4.9m) £59.2m H1 FY22 Underlying Digital investment YoY Freight YoY Ener
Slide 34: Investment fully aligned to our strategy
Pets at Home Group Plc FY23 Interim Results 34 November 2022 Investment fully aligned to our strategy £m H1 FY23 H1 FY22 Spend includes Investing in our Supply Chain 19.3 5.7 Development of new distribution facility Store Refurbishment 13.4 3.7 13 refurbishments in FY23, 65 to date, and maintenance
Slide 35: Positive working capital supports our strong cash generation
Pets at Home Group Plc FY23 Interim Results 35 November 2022 Positive working capital supports our strong cash generation £m H1 FY23 YTD movement H1 FY22 YTD movement Inventories (15.3) 2.9 Trade and other payables1 49.6 56.5 Trade and other receivables (7.7) (1.3) Trading working capital 26.6 58.1
Slide 36: Our strong cash generation enables accelerated investment to grow our business
Pets at Home Group Plc FY23 Interim Results 36 November 2022 Our strong cash generation enables accelerated investment to grow our business £m H1 FY23 H1 FY22 Group operating cashflow1 105.6 150.5 Tax and interest (8.4) (15.8) Net capex (41.0) (28.0) Purchase of own shares for colleague share scheme
Slide 37: Financial strength and resilience
Pets at Home Group Plc FY23 Interim Results 37 November 2022 Financial strength and resilience Net cash Low leverage Good liquidity £43.1m (0.3)x £343.1m1 Strong cash generation Robust balance sheet, Extended £300m revolving strong cash generation credit facility to March 2027 Record investm
Slide 38: In summary: H1 FY23 key financial measures
Pets at Home Group Plc FY23 Interim Results 38 November 2022 In summary: H1 FY23 key financial measures Revenue & like-for-like growth Underlying gross margin1 & YoY change +10.5% +5.9% +65bps (142) bps 55.3% £661.5m 46.7% £63.8m Vet Group Retail Vet Group Retail Underlying PBT2 & margin Underlying
Slide 39: Delivering sustainable, dependable, quality results for our stakeholders
Pets at Home Group Plc FY23 Interim Results 39 November 2022 Delivering sustainable, dependable, quality results for our stakeholders Organic business Value-accretive Provide a progressive Return surplus free cash investment to drive quality opportunities, including dividend to shareholders flow to