Victorian Plumbing Group Plc · LSE:VIC
Victorian Plumbing — FY2023 Earnings Presentation
35 slides from Victorian Plumbing's earnings presentation, Nov 22, 2023
Slide 1: Full Year Results Presentation, Year Ended 30 September 2023
Victorian Plumbing Group ple FULL YEAR RESULTS PRESENTATION YEAR ENDED 30 SEPTEMBER 2023 22 NOVEMBER 2023 V victorian plumbing.co.u
Slide 2: Agenda
AGENDA FY23 overview & strategic focus Review of financials Competitive position Environmental, social & governance Warehouse transformation FY24 current trading & outlook Mark Radcliffe, CEO Dan Barton, CFO Q&A 2
Slide 3: FY23 Overview & Strategic Focus
FY 235 OVERVIEW & STRATEGIC FOCUS
Slide 4: Summary of strategic progress and operational performance indicators in FY23
SUMMARY OF STRATEGIC PROGRESS AND OPERATIONAL PERFORMANCE INDICATORS IN FY23. Successful re-platforming of our website in December 2022 The total number of orders increased by 6% to 932,000, 932k driving the overall revenue growth in FY23. to improve functionality and scalability. Average order valu
Slide 5: Our strategy remains unchanged: three growth horizons
OUR STRATEGY REMAINS UNCHANGED. WE CONTINUE TO FOCUS ON THREE GROWTH HORIZONS. Number one UK bathroom retailer, Increasing our growth in expansion Maximising our growing trade driving the shift in the market from categories (tiles and décor, heating and customer base. offline to online. kitchen acce
Slide 6: FY23 financial performance demonstrates resilience of our business model
OUR FY23 FINANCIAL PERFORMANCE DEMONSTRATES THE RESILIENCE OF OUR BUSINESS MODEL AND COMPETITIVE ADVANTAGE, UNDERPINNING OUR CONFIDENCE IN PROFITABLE GROWTH. STRONG BALANCE SHEET & UNRIVALLED ONE-STOP SOLUTION FOR CONSUMERS TRANSFORMATION APPROACH TO MARKETING A strong balance sheet protects us Unri
Slide 7: Review of Financials
REVIEW OF FINANCIALS
Slide 8: FY23 revenue growth of 6% and adjusted EBITDA growth of 22%
FY23 REVENUE GROWTH OF 6% AND ADJUSTED EBITDA GROWTH OF 22%, IN LINE WITH MARKET EXPECTATIONS. FY23 FY22 £m £m YoY Revenue 285.1 269.4 6% Overall revenue growth of 6% to £285.1m Cost of sales (150.5) (148.4) (1%) driven by order volumes increasing 6%. Gross profit 134.6 121.0 11% - Gross profit marg
Slide 9: Increased order volumes driving overall revenue growth of 6% to £285.1m
INCREASED ORDER VOLUMES DRIVING OVERALL REVENUE GROWTH OF 6% TO £285.1M. 300 906 932 285.1 880 1,000 +17% +6% 268.8 269.4 776 (3%) 59.5 +35% 250 45.1 52.8 800 21% 16% 20% 208.7 600 '000 200 28.6 14% 400 150 £m 200 226.7 216.6 225.6 - 100 86% 80% 79% 180.1 FY20 FY21 FY22 FY23 86% 50 350 297 306 306 2
Slide 10: Increased order volumes driving overall revenue growth of 6% to £285.1m
INCREASED ORDER VOLUMES DRIVING OVERALL REVENUE GROWTH OF 6% TO £285.1M. 932 8.0 7.3 300 285.1 906 880 +35% 1,000 +17% +6% 7.0 268.8 269.4 776 (3%) 59.5 5.4 45.1 +35% 6.0 250 52.8 21% 800 +26% 16% 4.3 20% 5.0 3.5 +23% 208.7 600 '000 4.0 £m +0% 200 28.6 14% 400 3.0 2.0 150 £m 200 1.0 226.7 216.6 225.
Slide 11: Shift towards own brand products, representing 78% of total revenue
3PPTS SHIFT TOWARDS OWN BRAND PRODUCTS, REPRESENTING 78% OF TOTAL REVENUE. 300 60% 53% 53% 49% 50% 50% Gross Profit Margin 63 250 22% 40% 65 67 24% 25% 30% 20% 200 52 10% 25% 0% 150 FY20 FY21 FY22 FY23 £m +20 +10% 222 60% 204 202 78% 100 76% 75% 50% Gross Profit Margin 157 75% 40% 33% 30% 29% 50 30%
Slide 12: Gross profit increased by 11% to £134.6m
GROSS PROFIT INCREASED BY 11% TO £134.6M, WITH GROSS PROFIT MARGIN INCREASING BY 2PPTS TO 47%. 160.0 50% 49% 49% 49% 49% 140.0 48% 48% 120.0 47% 47% 100.0 46% Gross Profit Margin 46% Gross Profit (£m) 45% 45% 45% 80.0 45% 44% 134.6 44% 130.5 121.0 +11% 44% 60.0 +42% (7%) 43% 92.0 43% 40.0 +49% 42% 2
Slide 13: Marketing costs reduced as a % of revenue
MARKETING COSTS REDUCED AS A % OF REVENUE WHILE DELIVERING BRAND AWARENESS GROWTH. 120.0 FY20 FY21 FY22 FY23 5.7 Marketing 25.0% 25.9% 28.3% 27.8% 100.0 6.3 4.2 5.1 People costs* 4.5% 5.1% 5.9% 6.9% 2.8 4.1 19.6 Property costs 1.2% 1.5% 1.9% 2.2% 16.0 80.0 13.8 Other overheads 0.9% 1.0% 1.6% 2.0% Un
Slide 14: Adjusted EBITDA increase of 22%
REDUCED SHIPPING COSTS, FAVOURABLE FX RATES AND SHIFTS IN PRODUCT MIX ALL CONTRIBUTE TO A 22% INCREASE IN ADJUSTED EBITDA AND A 1PPT INCREASE IN ADJUSTED EBITDA MARGIN. 45 15% 40 13% 35 30 Adjusted EBITDA (£m) 25 8% 7% 40.1 20 +53% 15 26.2 +128% 23.8 19.5 +22% 10 (51%) 5 0 FY20 FY21 FY22 FY23 Adjust
Slide 15: Adjusted PBT, EPS and dividend growth
RETURN ON CASH DEPOSITS HELPS TO BOOST GROWTH OF ADJUSTED PBT AND ADJUSTED EPS, WHICH POWERS UP AN INCREASED DPS WITH REDUCED COVER - A SIGN OF OUR CONFIDENCE IN THE BUSINESS. 40.0 14% 5.0 35.0 4.5 11% 4.0 30.0 3.5 25.0 Adjusted PBT (£m) 3.0 7% Pence 20.0 2.5 36.8 4.7 6% +55% +24% 2.0 15.0 3.8 3.4 x
Slide 16: Strong cash generation with free cash flow up 13% to £16.1m
WE CONTINUE TO ACHIEVE STRONG CASH GENERATION WITH AN INCREASE IN FREE CASH FLOW OF 13% TO £16.1M, RESULTING IN ROBUST CASH CONVERSION OF 68%. FY23 FY22 FY23 FY22 YoY £m £m YoY £m £m Adjusted EBITDA 23.8 19.5 22% Free cash flow1 16.1 14.3 13% Movement in working capital (4.0) (1.2) 233% Cash convers
Slide 17: Competitive Position
COMPETITIVE POSITION
Slide 18: Hitting marketing objectives with efficiency and improving brand awareness
HITTING OUR MARKETING OBJECTIVES WITH EFFICIENCY AND IMPROVING BRAND AWARENESS. 100% 90% 80% 70% 60% The only major retailer to grow our brand awareness. 50% New distinctive brand asset to communicate to our 89% 40% 81% 80% target audience: homeowner aged 25+. 30% 64% Marketing efficiency driven by
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Slide 20: Bolton Wanderers partnership and FY24 brand plans
New Victorian Plumbing audience by launching our 3- year partnership with Bolton Wanderers Football Club. Initiatives planned to establish our brand in the community, in association with the partnership. FY24 plans to further boost brand led activity. Evolving ‘Boss Your Bathroom’ into even more adv
Slide 21: One-stop solution for bathroom-related purchases
WE ARE THE ONE-STOP SOLUTION WHEN CONSIDERING A BATHROOM- RELATED PURCHASE. OUR EXTENSIVE RANGE OF PRODUCTS, DEEP AND TRUSTED RELATIONSHIPS WITH SUPPLIERS AND HARD WORKING TEAM ENSURE WE MAINTAIN OUR ‘EXCELLENT’ RATING. SUPPLY CHAIN & CUSTOMER OFFERING • Unrivalled product range and excellent availa
Slide 22: Developing bespoke platforms to improve consumer experience
WE CONTINUE TO DEVELOP OUR BESPOKE PLATFORMS TO ADVANCE OUR FUNCTIONALITY AND IMPROVE THE CONSUMER’S EXPERIENCE. • Continuous improvements to the website to • New app has now been released. • Continuous development of our existing make searching even easier. warehouse management system. • The app wi
Slide 23: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE
Slide 24: Taking our environmental, social and governance responsibilities seriously
WE TAKE OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE RESPONSIBILITIES SERIOUSLY AND ARE TAKING ACTION TO MAKE A DIFFERENCE TO OUR PEOPLE, OUR COMMUNITIES AND THE WIDER ENVIRONMENT. ENVIRONMENTAL SUSTAINABILITY DIVERSITY & INCLUSION GOVERNANCE & ETHICS • Progress in the level of our Scope 1 and Scope 2 •
Slide 25: Warehouse Transformation
WAREHOUSE TRANSFORMATION
Slide 26: A reminder of the benefits
A REMINDER OF THE BENEFITS Enhances the customer experience (i.e. extended next day ordering). Space to expand the range in tiles & décor, heating and kitchen accessories. Replaces margin dilutive expensive short term rental cost that impedes profitable growth. Facilitates scalability and increased
Slide 27: Transformational year to come following new Lancashire distribution centre
WE HAVE A TRANSFORMATIONAL YEAR TO COME, FOLLOWING THE ON SCHEDULE LEGAL COMPLETION OF OUR NEW LANCASHIRE DISTRIBUTION CENTRE IN OCTOBER 2023. FY23 FY24 + Practical c.12 months Fit-out: £2m capex Lancashire BAU & end of completion warehouse spent in FY23 and transition double running double running
Slide 28: FY24 Current Trading & Outlook
FY24 CURRENT TRADING & OUTLOOK
Slide 29: Current trading and outlook
• Albeit early in the year and against a volatile consumer backdrop, the Group has had a positive start to FY24 with continued revenue growth, and gross profit margin progression versus the comparative period last year. • The opening of our new distribution centre in 2024 will remove space constrain
Slide 30: Victorian Plumbing
victorian plumbing.ou
Slide 31: Disclaimers
PLEASE READ THE FOLLOWING DISCLAIMERS WHEN USING THE INFORMATION IN THIS PRESENTATION. 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 opin
Slide 32: Appendices
APPENDICES
Slide 33: Bathroom market forecast to grow by 3.9% in 2023 to £1,734m
BATHROOM AND BATHROOM ACCESSORIES MARKET FORECAST TO GROW BY 3.9% IN 2023 TO £1,734M. BETWEEN 2024 AND 2028 THE MARKET IS ESTIMATED TO GROW BY A FURTHER 2%. 2,000 45% 1,800 40% 1,600 35% 1,400 30% 1,200 25% 1,000 £m 20% 800 15% 600 10% 400 200 5% - 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 202
Slide 34: Consistent market leader amongst online specialist bathroom retailers
CONSISTENT MARKET LEADER AMONGST ONLINE SPECIALIST BATHROOM RETAILERS, WITH INCREASE OF 3PPTS DURING FY23. Victorian Plumbing 1 SimilarWeb 34
Slide 35: Number one retailer for bathroom products across online and offline channels
NUMBER ONE RETAILER FOR BATHROOM PRODUCTS ACROSS BOTH ONLINE AND OFFLINE CHANNELS. ppt change 2015 to 2021 +15.2ppt (0.3ppt) +1.9ppt (2.2ppt) +3.1ppt +3.0ppt (1.1ppt) +0.3ppt (2.0ppt) +0.1ppt +1.4ppt (8.2ppt) (1.9ppt) 18.5% 18.1% 17.8% 10.5% 9.7% 8.6% 8.2% 7.5% 6.6% 4.4% 4.5% 3.5% 3.8% 3.3% 3.4% 2.3
Victorian Plumbing Group — FY2023 Earnings Presentation on 6ix