Sanderson Design Group Plc · LSE:SDG
Sanderson Design — H1 FY22 Earnings Presentation
27 slides from Sanderson Design's earnings presentation, Oct 13, 2021
Slide 1: Interim Results
I N T E R I M R E S U LT S 13th October 2021
Slide 2: Agenda
AGEN D A I N T R O D U C T I O N 3 F I N A N C I A L H I G H L I G H T S 4 S T R AT E G Y U P D AT E 1 3 C U R R E N T T R A D I N G & O U T L O O K 2 6
Slide 3: Introduction: A committed team driving the business forward
I NTRODUC TI ON • Strong recovery continues with key financial metrics ahead of the previous two half years with continued strategic focus delivering results A COMMITTED • Revenue of £57.5m and adjusted PBT of £6.0m • Good progress with digital through D2C launches TEAM DRIVING • People – major enga
Slide 4: Key financial indicators
KEY FI N ANCI AL I N D I C ATO R S - £ m i l l i o n s REVENUE ADJUSTED PBT ADJUSTED PBT % ADJUSTED EPS REPORTED EBITDA H1 FY22 57.5 6.0 10.4% 6.53p 8.4 H1 FY21 38.8 0.4 1.0% 0.54p 3.0 H1 FY20 55.9 4.9 8.8% 5.54p 7.3
Slide 5: Key financial indicators
KEY FI N ANCI AL I N D I C ATO R S - £ m i l l i o n s NET FUNDS INVENTORY CAPEX NET CASH FLOW H1 FY22 15.4 19.4 1.2 (0.1) H1 FY21 4.5 23.4 0.4 3.2 H1 FY20 0.9 28.8 1.2 0.5
Slide 6: Income Statement Highlights
RESULTS 6 MONTHS ENDED 3 1 J ULY 2 0 2 1 H1 FY22 H1 FY21 H1 FY20 Income Statement H I G H L I G H T S £’m £’m £’m • Reported revenue for the period was £57.5m (H1 FY21: £38.8m and H1 FY20: Revenue 57.5 38.8 55.9 £55.9m) an increase of £19.3m (or 48.2%) over H1 FY21 and an increase of £1.6m (or Statu
Slide 7: Revenue
REVENUE H1 FY22 HY FY21 HY FY20 Change Change Revenue 50 45.3 46.3 £'m £'m £'m H1 FY21 H1 FY20 43.3 43.1 45 Total Brands (inc. licensing) 45.3 32.4 46.3 39.8% (2.2%) 40 35 32.4 31.1 Manufacturing 21.0 10.5 17.1 100.0% 22.8% 30 66.3 42.9 63.4 54.5% 4.6% £m 25 21.0 Internal Manufacturing (8.8) (4.1) (
Slide 8: Brands Product Revenue
BR AN DS PRODUCT REVENUE 14 13.2 12.6 12 • The Morris & Co. and Sanderson heritage brands performing exceptionally well in their 160th anniversary years 10 9.3 8.9 8.2 8.0 • Clarke & Clarke, our largest brand, strong underlying performance with 8 7.5 6.7 Kravet in the USA £m 5.4 6.0 6 5.2 • Harlequi
Slide 9: Group Income Statement
GROUP I NCOME S TAT E M E N T H1 FY22 H1 FY21 H1 FY20 Change Change Group Income Statement £'m £'m £'m FY21 FY20 Manufacturing 21.0 10.5 17.1 100.0% 22.8% Brands 43.3 31.1 43.1 39.2% 0.5% Inter-group eliminations (8.8) (4.1) (7.6) 114.6% 15.8% • Gross margin 62.4% (H1 FY21 59.0%) – in H1 FY21 Covid
Slide 10: Group Cash Flow
GROUP C AS H FLOW Cash flow H1 FY22 H1 FY21 H1 FY20 • Increased liquidity and headroom of £27.9m (31 July 2020: £19.5m) £'m £'m £'m Underlying EBITDA 8.4 3.0 5.1 • Net cash position of £15.4m (31 July 2020: £4.5m) Interest, Depreciation and Amortisation - - - • Net cash position, including lease obl
Slide 11: Net Funds
NET FUNDS • EBITDA is £8.4m on the back of strong performance across the £25.0m £8.4m (£2.7m) business in the first half – an EBITDA margin of 14.6% (£1.2m) (£1.3m) • Working capital movement is principally driven by an increase in £20.0m (£1.1m) (£2.1m) receivables due to higher sales (£0.1m) £15.5
Slide 12: Group Balance Sheet
GROUP B AL AN CE SHEET H1 FY22 FY21 H1 FY21 Balance Sheet £'m £'m £'m Intangible assets 27.6 28.3 29.1 Property, plant & equipment 11.8 12.1 13.1 • Net assets of the Group increased to £71.5m - the balance sheet strengthened with a Right-of-use assets 4.9 5.8 7.0 strong cash position and tighter wor
Slide 13: Our Live Beautiful Strategic Framework
OUR LI VE BE AU TI FUL STR ATEGI C FR AM EWOR K B R A N D S P R O D U C T S G E O G R A P H I E S C U S T O M E R S ELEVATE OUR REIMAGINE OUR GROW OUR UK, EXCEED OUR BRANDS AND PRODUCTS: FABRIC, USA AND NORTHERN CUSTOMERS’ CREATE CONSUMER WALLPAPER, PAINT EUROPE BUSINESSES NEEDS IN A DEMAND AND HOME
Slide 14: Our Purpose & Values
OUR PURPOSE & VAL UES “TO BRING THE BEAUTIFUL INTO PEOPLE’S HOMES & LIVES” I N T R E P I D I M A G I N A T I V E R E S P E C T F U L WE’RE BRAVE, WE’RE WE TAKE A CREATIVE WE CONSIDER CUSTOMERS, BOLD, WE TAKE THE AND INNOVATIVE COLLEAGUES, THE PLANET LEAD AND INSPIRE APPROACH TO AND THE PEOPLE WHOO O
Slide 15: Harlequin
HARLEQUIN FABRIC AND WALLPAPER WoosNOHONOISIANOSUIONYS NINDSTEVH 15
Slide 16: Strategic Outlook
STR ATEGI C OUTLOOK 2019 Strategic Framework - business transformation – elevating the brands has brought traction, strengthened the foundation and is starting to show results. We also see the benefit of overhead savings, cost control, inventory efficiency and focus on strategic levers live beautifu
Slide 17: Our Live Beautiful Vision
OUR LI VE BE AU TI FUL VI SI ON “T O LEAD THE INTERIORS INDUSTRY IN TRANSFORMING THE WAY WE DESIGN, MANUFACTURE AND DISTRIBUTE, ENRICHING PEOPLE’S LIVES, HELPING THEM TO LIVE BEAUTIFUL”
Slide 18: Progress Against Key Strategic Milestones
PROGRESS AG AI N S T KEY STR ATEGI C M I LESTONES J A N ’ 2 1 J A N ’ 2 2 J A N ’ 2 3 J A N ’ 2 4 ✓ Leadership team effective Rebrand group • Group re-established as market leader in UK • B2C new income streams ✓ Brands differentiated Brand-led communications • Growth in all brands • All markets
Slide 19: Product Efficiency
PRODUCT EFFI CI ENCY S K U s R E V E N U E / S K U (Fabric and Wallpaper sales only) (Fabric and Wallpaper sales only) 25.0 50.0% 43% 20.0 40.0% 20.0 17.7 16.6 30.0% 13.5 GROWTH % 15.0 SKUs '000 20.0% 10.0 8% 10.0% 5.0 0.0% (4%) Jan-20 Jul-20 Jan-21 Jul-21 - -10.0% Jan-20 Jul-20 Jan-21 Jul-21 Avg Re
Slide 20: Marketing & Digital Highlights
M AR KE TI NG & DI GI TAL HI GHLI GHTS N E W A R C H I V E B R A N D • Developed in-house and launched on 1st September 2021 direct to consumer • Product range to include fabrics and wallcoverings, curtains and, cushions and lamps • 16k* website sessions (12k users), 197* product samples and over 57
Slide 21: Marketing & Digital Highlights
M AR KE TI NG & DI GI TAL HI GHLI GHTS BRAND PR TRADE HUB CONSUMER PATTERN FANS POUNDS USERS WEB VISITS BOOK COST UP BY 64% UP BY 15% UP BY 22% UP BY 35% DOWN BY 33% Increased Instagram Increased PR Media Increased Increased average Cost reduced to £2.2m*** followers to 463k* (from Value (AVE**) mon
Slide 22: Licensing Highlights
LI CENSI NG HI GHLI GHTS M O M E N T U M C O N T I N U E S • Core licensing income up 20% on FY20 driven by bedding, blinds and rugs • Clarke & Clarke first ever licensing agreement signed with Asiatic rugs • Morris & Co. USA licence with Williams Sonoma, America’s market leader in high quality kitc
Slide 23: USA - A Core Growth Market
US A - A CORE GROWTH M ARKE T H 1 R E V E N U E • H1 2021 v H1 2020 +75.5% , v H1 2019 +11% K R AV E T - C L A R K E & C L A R K E • August 2021 v 2020 +74%, vs 2019 +53% B R A N D S • Morris +113%, Sanderson +80%, Harlequin +61%, Zoffany +53% E - C O M M E R C E • Represents 10% of total sales SDG
Slide 24: Manufacturing
M AN UFAC TU RI NG • Brexit and post-Covid demand drive order books to record levels • Increased productivity driving high levels of profit and group contribution • Third-party experience enhanced through digital pattern books and 3D virtual showroom tours • New ERP system implementation on track at
Slide 25: People Highlights
PEOPLE HI GHLI GHTS L I V E B E A U T I F U L • Employee engagement at all time high 78%, new goal 80% 2023 • Ambition to achieve the Great Place to Work status by 2024 • Variable-pay for all employees including personal objective on sustainability • Collaborating with United in Design to widen acce
Slide 26: Current Trading & Outlook
CURRENT TR ADI NG & OUTLOOK The first six months of our financial year have continued the strong recovery of the business. As we enter the second half of the financial year, we are mindful of the cost, supply chain and other issues affecting the UK and international business environment. We are focu
Slide 27: Slide 27
Sanderson Design Group — H1 FY22 Earnings Presentation on 6ix