Pets At Home Group Plc · LSE:PETS
Pets At Home — H1 FY2025 Earnings Presentation
23 slides from Pets At Home's earnings presentation, Nov 27, 2024
Slide 1: FY25 Interim Results
FY25 Interim Results 27 November 2024
Slide 2: Our strategy remains clear…
Our strategy remains clear… Our purpose To create a better world for pets and the people who love them Planet Pets People To be the best employer and developer of pet To make pet care environmentally sustainable To improve the life of every pet in the UK care talent Our vision To build the world’s b
Slide 3: …and will drive differentiated economics over the long-term
…and will drive differentiated economics over the long-term Integrated Omnichannel Consumer-centric a unified blend of products, services and advice seamlessly connected an unrivalled experience Delivering economies of scope Driving economies of scale and Fuelling consumer and revenue higher product
Slide 4: H1 was a period of further strong execution…
H1 was a period of further strong execution… Won share across Retail and Vets growing Pets Club members to 8.1m (+3%) and growing 1 Average Consumer Value to £175 Transitioned to our new digital platform as planned with encouraging early signs including a 2 near doubling of app sales. Now exited tra
Slide 5: …but against a subdued market backdrop…
…but against a subdued market backdrop… Pets at Home Market Vets 13.0% Slight growth Retail 0.1% Slight decline Total 4.1% Broadly flat 5
Slide 6: …meaning we are pleased to have delivered a resilient performance
…meaning we are pleased to have delivered a resilient performance Financial KPIs Consumer Underlying FCF EPS Revenue PBT £1.0bn £54.5m £33.1m 7.9p +4% YoY +14% YoY +43% YoY +52% YoY Strategic KPIs Active Pets Club Average Consumer % of Revenue from Clinical FTE Members Value Subscriptions Headcount
Slide 7: Delivering against our strategy
Delivering against our strategy 7
Slide 8: We have a leading position in an attractive growth market
We have a leading position in an attractive growth market We are the only true complete pet care provider with Structural trends will drive further growth a 23% share of the £8.2bn UK market (2023) £3.5bn £1.6bn £2.8bn £0.3bn Premiumisation Humanisation Penetration Food: 23% A step change Pet owners
Slide 9: But right now market growth is below trend
But right now market growth is below trend Normally Currently Puppy & Kitten market down Normalisation of pet Stable pet population has yoy but pet population population little impact on growth stable. Temporary drag on growth. Inflation Low single digit No inflation Cautious consumer Premiumisation
Slide 10: But the long-term prognosis remains positive
But the long-term prognosis remains positive We have acquired a lot of new pets over the last few years… …supporting 12-15 years of future value High spend initially in Higher spend in Vets as Retail on ‘set-up’ costs pet ages 36% of pets in our Pets Club are <3 years old Annual Spend # of pets ‘Cov
Slide 11: Our digital investments touch every part of our business
Our digital investments touch every part of our business Colleague Device Consumer App and Website Practice Management System Digital Platform Petcare Centre Consumer Vet Practices Physical Platform 11
Slide 12: Our new digital platform is launched
Our new digital platform is launched • App sales have nearly doubled, now 1/3 of our digital sales • Easy Repeat subscription sales up 21% YoY. Range broadened to 3k lines • Now leveraging proprietary data to deliver personalised recommendations and targeting • Web sales impacted by transition but n
Slide 13: Our vets continued to outperform delivering capital light growth
Our vets continued to outperform delivering capital light growth A strong start to the year A material business for our partners and the group a meaningful contribution to the group +13% +6% £ 352m £ 42m Average Practice Practice Consumer Profit Before Revenue EBITDA Revenue Tax +13% YoY +26% YoY 8%
Slide 14: We continue to invest in our stores to offer an engaging and rewarding experience
We continue to invest in our stores to offer an engaging and rewarding experience for consumers New pet care centres in FY25 3 Store refits in FY25 14 14
Slide 15: In summary
In summary 1 We have a clear and consistent strategy that we have made further progress against 2 H1 benefitted from strong execution and saw us outperform a subdued underlying market 3 We now assume this slower market growth will persist through H2 and we have reflected this in full year guidance a
Slide 16: Financial review
Financial review 16
Slide 17: H1 has seen a resilient performance in a subdued market…
H1 has seen a resilient performance in a subdued market… Financial KPIs Consumer Underlying FCF EPS Revenue PBT £1.0bn £54.5m £33.1m 7.9p +4% YoY +14% YoY +43% YoY +52% YoY Strategic KPIs Active Pets Club Average Consumer % of Revenue from Clinical FTE Members Value Subscriptions Headcount 8.1m £175
Slide 18: …consumer revenue grew at over 4% ahead of the market but below our medium-term ambition of 7%
…consumer revenue grew at over 4% ahead of the market but below our medium-term ambition of 7% Group Consumer Revenue (£m) FY25 H1 FY24 H1 YoY Total 1,048.6 1,007.7 4.1% Group Revenue (£m) FY25 H1 FY24 H1 YoY Total 789.1 774.2 1.9% Like-for-like 1.6% 6.2% Retail Revenue (£m) FY25 H1 FY24 H1 YoY Food
Slide 19: Profit growth driven by strong Vet performance and lapping last years restructuring costs
Profit growth driven by strong Vet performance and lapping last years restructuring costs YoY £m FY25 H1 FY24 H1 Change Revenue 789.1 774.1 1.9% Gross Profit 365.1 358.4 1.9% Gross Margin 46.3% 46.3% (3)bps Operating Costs (308.9) (310.5) (0.5)% Other Income 6.9 7.0 (1.5)% Net Interest (8.6) (7.1) 2
Slide 20: We grew FCF, returned over £50m to shareholders and maintained a robust balance sheet…
We grew FCF, returned over £50m to shareholders and maintained a robust balance sheet… £m FY25 H1 FY24 H1 Net cash flow from operating activities 105.7 103.1 Lease payments1 (36.1) (38.1) Net cash capex2 (25.1) (22.4) Net interest3 (8.6) (7.7) Purchase of own shares for colleague share schemes (2.9)
Slide 21: Our capital investment remains fully aligned to delivering our strategy
Our capital investment remains fully aligned to delivering our strategy £m FY25 H1 FY24 H1 Store Refit Programme 12.8 10.6 14 refits completed in FY25 H1 Digitising the Business 4.4 1.6 Digital platform transition Investing in our Supply Chain 3.5 3.3 Completing our network optimisation New Stores 2
Slide 22: We have updated our guidance to reflect near term market softness
We have updated our guidance to reflect near term market softness but our strategy is on track, our conviction is strong and the outlook remains positive Our strategy is on track and we expect pet care market growth to recover, which is supported by long term structural growth trends, meaning we loo
Slide 23: Questions
Questions 23