Auction Technology Group Plc · LSE:ATG
Auction Technology — FY2022 Earnings Presentation
35 slides from Auction Technology's earnings presentation, Dec 1, 2022
Slide 1: 2022 Full Year Results
2022 Full Year Results Twelve months ended 30 September 2022 01 December 2022 Auction Technology Group
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE STRICTLY CONFIDENTIAL AND ARE NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRI
Slide 3: Agenda
Agenda 1. Results highlights 2. Financial performance 3. Strategic update and outlook 4. Q&A Auction Technology Group 3
Slide 4: Results highlights
01. Results highlights John-Paul Savant Auction Technology Group 4
Slide 5: Unlocking the value of the curated secondary goods market
Unlocking the value of the curated secondary goods market… 172m 171 103m Trust 3,800 74,000 7m Bidding Countries Bids Auction Auctions Lots sold in which we have sessions bidders placed Houses online Auction Technology Group 5
Slide 6: Accelerating the growth of the circular economy
… and accelerating the growth of the circular economy Auctions play a critical role in facilitating the circular economy We are making it easier for consumers to make green choices The trend towards ‘re-commerce’ is growing2 44% of respondents more likely to buy second- hand than they were three yea
Slide 7: FY Highlights: a year of further growth and progress
FY 22 Highlights: a year of further growth and progress Expanded THV1 Maintained conversion rate2 Grew GMV £10.1bn 33% £3.3bn +22% flat +20% VAS rollout support take rate Double digit revenue growth Increased adjusted EBITDA 3.3% £119.8m £54.0m (0.2)ppt +0.1ppt +71% +11% +70% e ex real estate o prof
Slide 8: FY Highlights: strengthened competitive position and executed against strategic pillars
FY 22 Highlights: strengthened ATG’s competitive position and executed against our strategic pillars to sustain our growth 1 Delivered growth across all divisions against challenging comparisons and economic environment 2 Added new growth through successful rollout of Payments & Digital Marketing, w
Slide 9: Financial performance
02. Financial performance Tom Hargreaves Auction Technology Group 9
Slide 10: FY Financial Highlights: a year of strong growth and investment
FY 22 Financial Highlights: a year of strong growth and investment while maintaining adjusted EBITDA margins Revenue Adjusted EBITDA Adjusted EBITDA margin £119.8m £54.0m 45% +11%1 +70% Flat Adjusted diluted EPS Adjusted free cash flow Adjusted net debt 29.5p £49.9m £129.0m +221% 93% conversion2 2.2
Slide 11: Robust revenue growth benefiting from value-add services and FX tailwind
Robust revenue growth benefiting from successful roll out of value- add services and FX tailwind Reported growth: Actual FX rates 71% Proforma growth: Constant FX rates2 11% 1 1. Includes £0.2m for Auction Mobility. 2. Average US dollar rate: FY 22 1.27 and FY 21 1.37. 11
Slide 12: Solid progress made against our strategic KPIs
Solid progress made against our strategic KPIs GMV (£bn) Conversion rate (%) THV (£bn) YoY growth at 40% 27% YoY growth at 29% 29% actual FX rate actual FX rate YoY growth at 48% 20% YoY growth at 37% 22% constant FX rate constant FX rate £3.3bn 33% 33% £2.6bn £10.1bn £7.8bn FY 21 FY 22 FY 21 FY 22
Slide 13: Delivering growth on growth in FY22 as we lap Covid-19
Delivering growth on growth in FY 22 as we lap Covid-19, despite tougher comps in H2 GMV (£bn) THV (£bn) H2 22 YoY growth at actual FX rate 28% H2 22 YoY growth at actual FX rate 30% H2 22 YoY growth at constant FX rate 14% H2 22 YoY growth at constant FX rate 17% £1.6bn £1.6bn £4.9bn £5.2bn £1.2bn
Slide 14: A diversified and resilient revenue model
A diversified and resilient revenue model Revenue by product Revenue by geography £119.8m £119.8m 3% 3% 7% £101.8m £101.8m 15% Content 3% 15% 3% 7% Europe Auction Services 19% 15% 16% Other Marketplace 12% Value-Added Services UK 22% A&A commission 26% 82% 78% I&C Commission North America 37% 37% FY
Slide 15: Growth across each of our business segments
Growth across each of our business segments KPIs by segment Revenue by segment Proforma Proforma Reported Proforma £m I&C 2 A&A 2 £m FY 22 FY 21 YoY % YoY % YoY % 1 YoY %2 THV 5,737 +28% 4,343 +15% Arts & Antiques 55.3 16.2 241% 10% Conversion rate 45% Flat 16% Down 3ppt Industrial & Commercial 52.7
Slide 16: Strong earnings growth driven by operational leverage
Strong earnings growth driven by operational leverage, offsetting investment in future growth • Gross margin of 67%, up year-on-year as high margin Group financial summary commission revenue offset growth in payments £m Restated Reported Proforma FY 22 FY 211 YoY2 YoY3 Revenue 119.8 70.1 71% 11% • A
Slide 17: Strong cash generation drove deleveraging over the year
Strong cash generation drove deleveraging over the year Movement in cash excluding acquisition of LiveAuctioneers • 93% adjusted free cash flow conversion • Higher cash interest due to impact of USD LIBOR rate • US dollar-denominated senior loan • Adjusted net debt/ adjusted EBITDA of 2.4x • Recalcu
Slide 18: Strategic update and outlook
03. Strategic update and outlook John-Paul Savant Auction Technology Group 18
Slide 19: Six strategic growth drivers
We continue to execute against our six strategic growth drivers Pursue accretive Grow take M&A rate via VAS Expand operational leverage Enhance the network effect Grow the conversion rate Extend the TAM Auction Technology Group 19
Slide 20: Invested to improve our product and develop our team
In FY 22, we invested to improve our product and develop our team which will help to drive future growth Improved the bidder experience Developed an integrated bidding including upgraded auctioneer solution to make it easier to and lot content, improved cross-list taxonomy and better search function
Slide 21: Auctioneer marketing programme provides a revenue opportunity
Our auctioneer marketing programme provides a revenue opportunity for both ATG and auctioneers Auctions supported with paid for We have upgraded our onsite New marketing features should marketing deliver better results: advertisement experience further drive conversion SEO rich Proxibid auctions sup
Slide 22: Payments is a significant new revenue stream
Payments is a significant new revenue stream and is critical in improving the buying process on our marketplaces 79% of bidders’ and 71% of auctioneers’ Both auctioneers and bidders are increasingly adopting our payments solution on LiveAuctioneers pain points are related to payments1 75% US-based a
Slide 23: Investing in our single technology platform
We are investing in our single technology platform to drive growth and improve efficiency Moving from silos to a single technology platform architecture • Single platform will enable acceleration of new product Current set up New Architecture development Common infrastructure Common operating model
Slide 24: Leading the transformation of the auction industry
ATG is leading the transformation of the auction industry, adding value for both bidders and our auctioneer partners Horizon 1 Horizon 2 Horizon 3 EXPANSION E2E EXPERIENCE • Expand further into value-add services • Extend into financing, insurance, • Build high standard e-commerce restoration, repai
Slide 25: Our TAM is very large and growing
Our TAM is very large and growing, with the ongoing shift to online auctions providing further opportunity for ATG Industrial & Arts & Antiques Commercial UK, North America and W. North America & UK total used £47bn Europe A&A market1 I&C equipment market £64bn A&A auction market £23bn including “Bi
Slide 26: Significant scope across all drivers in FY23
We see significant scope across all drivers in FY 23 • Drive new THV by actively • Invest in single technology platform identifying new auction houses Expand to provide flexibility and agility Extend • Grow penetration with existing operational • Invest in long term scalability of our the TAM auctio
Slide 27: Confident in our ability to lead the transformation of the auction industry
We remain confident and excited in our ability to lead the transformation of the auction industry • In the medium term, we remain confident in achieving our target of mid-teen plus revenue growth and mid-high 40’s adjusted EBITDA margin percentages, as value-add services ramp alongside core growth l
Slide 28: A strong FY22; confident into FY23 and medium term
A strong FY 22; confident into FY 23 and over the medium term • Another year of strong performance, demonstrating the resilience and attractiveness of the ATG model • We have a compelling investment case ✓ Structural shift of auction industry online ✓ Strong competitive position ✓ Diversified and re
Slide 29: Q&A
04. Q&A Auction Technology Group 29
Slide 30: Appendix
05. Appendix Auction Technology Group 30
Slide 31: Glossary of key definitions
Glossary of key definitions Term Definition A&A Arts and Antiques GMV gross merchandise value, representing the total final sale value of all lots sold via winning bids placed on the marketplaces or the platform, on a proforma basis, excluding additional fees (such as online fee and auctioneers’ com
Slide 32: FY23 Financial guidance
FY 23 Financial guidance High single digit to low double digit at constant currency with higher rate Revenue growth of growth in the second half of the year Adjusted EBITDA margin Broadly flat reflecting ongoing investments to support future growth Net finance cost USD LIBOR1 + 3% margin on c.$145m
Slide 33: Reconciliation of APMs
Reconciliation of APMs Reconciliation of profit before tax to Reconciliation of loss after tax to adjusted Cash generated from operations and adjusted EBITDA earnings adjusted free cash flow FY 22 FY 21 FY 22 FY 21 FY 22 FY 21 £m £m £m £m £m £m Profit/(loss) before tax 9.3 (25.0) Loss attributable t
Slide 34: Auction Services & Content
Auction Services & Content Auction Service Revenue Content Revenue £8.6m £3.2m £3.1m £7.1m FY 21 FY 22 FY 21 FY 22 Auction Technology Group 34
Slide 35: The world's leading marketplaces and auction services for curated online auctions
The world’s leading marketplaces and auction services for curated online auctions United Kingdom United States Germany (ATG Headquarters) Harlequin Building 4411 S 96th St Große Bäckerstraße 9 65 Southwark Street Omaha 20095 London, SE1 0HR NE 68127 Hamburg +44 203 725 5500 +1 877 505 7770 +49 (0) 4
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