Motorpoint Group Plc · LSE:MOTR
Motorpoint — H1 2023 Earnings Presentation
39 slides from Motorpoint's earnings presentation, 2022
Slide 1: Motorpoint Group Plc Half Year 2023 Results and Strategy Update
Motorpoint Group Plc Half Year 2023 Results and Strategy Update
Slide 2: Agenda
Agenda Half Year highlights 2023 Mark Carpenter, CEO Financial highlights and ESG update Chris Morgan, CFO Strategy update and outlook Mark Carpenter, CEO Motorpoint Group Plc – Half Year 2023 Results & Strategy Update 2
Slide 3: Half Year 2023 highlights
Half Year 2023 highlights Mark Carpenter, CEO We are the UK’s leading omnichannel used vehicle retailer, investing for significant, profitable long term growth Motorpoint Group Plc – Half Year 2023 Results & Strategy Update 3
Slide 4: A group focused on growth through two distinct channels
A group focused on growth through two distinct channels Sell Your Car (C2B) Sell Your Car (C2B) <4 years >4 years <30,000 miles >30,000 miles Part Exchange Part Exchange <4 years >4 years <30,000 miles >30,000 miles Motorpoint Auction4Cars.com The UK’s leading omnichannel used vehicle retailer The U
Slide 5: The Motorpoint Virtuous Circle
The Motorpoint Virtuous Circle Motorpoint Group Plc – Half Year 2023 Results & Strategy Update 5
Slide 6: Record turnover and further strong market share gains
Record turnover and further strong market share gains KPI HY23 FY22 HY22 Market share (0-4 year old market, Q3) 3.7% 3.1% 2.9% Avg share - 30 min drive time from branch * 9.5% 7.7% 7.3% Number of market areas (current in HY23) 19 17 14 Total revenue £786.7m £1,322.3m £605.2m Total E-commerce revenue
Slide 7: Continued momentum
Continued momentum KPI HY23 HY22 FY22 Strategic investment – incremental expense £3.5m £Nil £1.0m PBT £3.0m £13.5m £21.5m Customer acquisition cost per retail unit £250 £295 £300 Days in stock 50 50 54 Net cash / (debt) £4.5m £6.0m £(21.2)m Available stocking facility £195m £106m £195m Customer NPS
Slide 8: Investment in strategic objectives achieves market share gains
Investment in strategic objectives achieves market share gains Two new market areas Continued strong in H1; five opened since No structural debt; market share gains Oct 2021 (now in 19 substantial headroom markets) Further investment in Customer NPS of 84 Price leadership infrastructure, tech mainta
Slide 9: Market share gains in all markets; accelerated since increased brand investment
Market share gains in all markets; accelerated since increased brand investment Site Catchment Market Share 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 2020 2021 2022 * Q3 data = SMMT July to September. Chart shows Motorpoint Group Plc – Half Year 2023 Results & Strategy
Slide 10: High performance Digital Team now embedded
High performance Digital Team now embedded Digital Marketing • In-housing of team drives advanced thinking and techniques • Significantly reduced operating costs compared to outside agencies Product • Opportunities to increase sales, improve CX and generate business efficiencies • Reduction in devel
Slide 11: Digital Marketing
Digital Marketing Key activities completed • Integration of paid marketing platforms with key business MI such as SalesForce CRM; smarter targeting and reduce wastage • New SEO strategy to drive significant organic search growth • Targeted brand awareness support • eCRM capability developed to allow
Slide 12: Product Delivery highlights
Product Delivery highlights • New header and footer – premium look and feel builds trust; improved mobile performance • New home page – lifestyle imagery to inspire, easier navigation, enhanced content • Product information improvement – EV data (above), MOT history, key number etc. • Better visibil
Slide 13: Product Delivery highlights
Product Delivery highlights • Enhanced car imagery (right) • Was/now pricing, with savings added (left) • New Wishlist and vehicle comparison tools • Vehicle availability inc same day drive away and home delivery • New checkout journey – bespoke for buy and reserve • PCP finance banner added to high
Slide 14: Achieving market share growth in every market
Achieving market share growth in every market Manchester (Opened October 2021) Key: Maidstone (Opened February 2022) New sites in FY23 Portsmouth (Opened March 2022) Opened pre FY22 Opened in FY22 Edinburgh (Opened September 2022) Coventry (Opened October 2022) Strong pipeline in place • Target 10%
Slide 15: Greater investment in our brand drives market share gains
Greater investment in our brand drives market share gains Site Catchments (30 mins) Brand Awareness Market Share HY23 (Spontaneous) April 2022 Openings Pre 2013 22% 10.9% Openings 2013 - 17 11% 7.4% Openings 2017 - 21 12% 9.3% Openings in the last 12 months 3% 2.7% Strong correlation between new mar
Slide 16: Price leadership is at the heart of what we do
Price leadership is at the heart of what we do 99.9% of Motorpoint stock displayed Low, Great or Good price indicator flags on Autotrader during H1 FY23* “My experience with “No haggling with trade in “Got a good price for my old Motorpoint has been value of your old vehicle. car. Motorpoint do ever
Slide 17: Motorpoint always offers the best value
Motorpoint always offers the best value Motorpoint Motorpoint Motorpoint £20,999* £306 per month £42,999* £609 per month £12,999* £198 per month 11,509 miles/21 plate 4,568 miles/71 plate 4,145 miles/22 plate Arnold Clark Hartwell Group Cazoo £24,998* £422 per month £46,999* (£pm not detailed) £14,4
Slide 18: NPS continues to strengthen
NPS continues to strengthen Key Motorpoint benefits Award winning service Extensive Choice NPS sold since 2017 Great Value 86 Quality Standard 84 Flexible Finance Options 82 Competitive Part Exchange Prices 80 Test Drives Readily Available 78 Buy Online, Collect In Branch 76 Free Home Delivery 74 Sa
Slide 19: Financial highlights and ESG update
Financial highlights and ESG update Chris Morgan, CFO Record revenue and return to cash surplus. Margins impacted by market conditions and investment Motorpoint Group Plc - Half Year 2023 Results & Strategy Update 19
Slide 20: Financial Highlights
Financial Highlights £’m unless stated H1 FY23 H1 FY22 Change Revenue 786.7 605.2 +30.0% Gross profit 48.7 55.5 -12.3% Profit before tax 3.0 13.5 -77.8% EBITDA 10.5 18.3 -42.6% ROCE (%) 40.3 51.2 -10.9ppts Motorpoint Group Plc - Half Year 2023 Results & Strategy Update 20
Slide 21: Operating Results
Operating Results £’m H1 FY23 H1 FY22 Change Revenue 653.1 512.0 • Record first half revenue of £786.7, up 30% (H1 FY22: ₋ Retail £605.2m) helped by vehicle mix and price inflation 133.6 93.2 ₋ Wholesale • Increased market share of the 0-4 year old market to Total revenue 786.7 605.2 +30.0% 3.7% (H1
Slide 22: Balance Sheet
Balance Sheet £’m H1 FY23 H1 FY22 FY22 Fixed assets 13.3 18.6 10.9 • New openings at Edinburgh and Coventry; major refit at Newport Intangible assets 1.9 - 0.6 • Intangible asset reflects software and website Right of use assets 57.8 47.6 46.7 development Assets held for sale - - 9.2 • Assets held f
Slide 23: Cashflow
Cashflow Motorpoint Group Plc - Half Year 2023 Results & Strategy Update 23
Slide 24: Responsibility towards our environment and communities
Responsibility towards our environment and communities By supporting our environment and our communities • ESG Board committee now operational • First ED&I survey completed by • Purchased carbon credits to offset first year employees of customer driving emissions We want to be viewed • New applicant
Slide 25: Strategic update and outlook
Strategic update and outlook Mark Carpenter, CEO Good progress towards delivering £2bn in medium term as well as other strategic targets Continuing to invest in strategy despite current macro headwinds Motorpoint Group Plc – Half Year 2023 Results & Strategy Update 25
Slide 26: Significant progress after 18 months
Significant progress after 18 months Five Substantial new branches Digital first Sell Market share in last 13 Your Car growth months platform (19 total) Significant Efficiency investment in activity Digital improving KPIs capability Motorpoint Group Plc – Half Year 2023 Results & Strategy Update 26
Slide 27: Strategy successful, despite challenging headwinds
Strategy successful, despite challenging headwinds • Nearly-new vehicle shortages • Reduction in market size of 0-4 year old vehicles • Unprecedented vehicle inflation • Rapidly increasing cost inflation, with reduction in customer disposable income • Huge investment from ‘on-line’ players Market Sh
Slide 28: Rapidly upscaling our E-commerce capability
Rapidly upscaling our E-commerce capability • Recruitment of Chief Digital Officer; Technology advisor to Board appointed (George Goley - Sears, Microsoft, Amazon, HRG), and new Chief Technology Officer to join in early 2023 • New technology capability building; focus on product development, enginee
Slide 29: Increase customer acquisition and retention
Increase customer acquisition and retention • Five new market area locations since October 2021; more opportunities in the pipeline • New branches accelerate market share in new markets • Price leadership drives significant market outperformance • Increased product choice for customer (SKU unique mi
Slide 30: Expand wholesale channels
Expand wholesale channels • Sell Your Car service now a fully automated digital first offering • No admin or payment fees for Sell Your Car customers; payments made instantly on collection • More vehicles sourced directly from consumers in H1 FY23 than in entire FY22 • Including PX, 22.6% (H1 FY22:
Slide 31: Operational efficiency through technology and innovation
Operational efficiency through technology and innovation • Efficiency improvement in branch, prep and back office functions • Automation supporting headcount reduction, despite increases in digital capability and new branches • Ongoing review of remaining manual processes to establish what can be au
Slide 32: Outlook
Outlook • Price leadership is vital; we continue to offer the best value for our customers • Rising inflation, interest rates, consumer uncertainty and vehicle supply challenges will likely significantly impact used car demand • Macro factors will continue to challenge financial performance in FY23
Slide 33: Appendix
Appendix Motorpoint Group Plc - Half Year 2023 Results & Strategy Update 33
Slide 34: Capital light model still generates strong ROCE, despite lower profit
Capital light model still generates strong ROCE, despite lower profit Return on capital employed 120% 102% 100% 97% • Leasehold property model • Two sale and leasebacks of last remaining building properties 80% 75% • Stock funded by third parties, which increased from £104.0m to £124.6m at the same
Slide 35: Financial KPIs (1 of 2)
Financial KPIs (1 of 2) H1 FY23 H1 FY22 Volumes Retail 31,527 34,400 Wholesale 17,431 18,986 Total 48,958 53,356 Online 10,579 13,285 Branch 20,948 21,115 Total Retail 31,527 34,400 Total GP per retail unit 1,373 1,328 GP per retail unit % 6.6% 8.9% Total GP per wholesale unit 304 517 GP per wholesa
Slide 36: Financial KPIs (2 of 2)
Financial KPIs (2 of 2) H1 FY23 H1 FY22 Average time to prep car (0-3 years) - days 7.1 7.7 Average time to prep car (3 years+) - days 9.7 10.9 Transport pu £ 109 93 Marketing £m 7.9 10.2 Marketing pu (CAC) £ 250 295 People costs £m 20.5 19.3 People costs pu £ 649 561 Depreciation and Occupancy £m 5
Slide 37: Digital Team Investment
Digital Team Investment Chief Digital Officer Principle Product Digital Product Digital Marketing Head of Brand Owner Design Manager Director Digital Head of Paid PR Manager Product Owner UX Designer Head of SEO Head of eCRM Head of Content Partnerships Digital Analyst Media Manager eCRM Partnership
Slide 38: Our Strategic Pillars – a reminder
Our Strategic Pillars – a reminder Rapidly upscaling our Operational efficiency Increase customer Expand wholesale E-commerce through technology and acquisition and retention channels capability innovation • Increased investment in technology • Open 12 sales and collection • Invest in Auction4Cars.c
Slide 39: Disclaimer
Disclaimer The information, opinions and statements contained in this presentation and any associated discussion (this “Presentation”) has been prepared by Motorpoint Group PLC (the “Company”) and has not been independently verified. The Presentation is only intended for information and reference pu