Motorpoint Group Plc · LSE:MOTR
Motorpoint — H1 FY22 Earnings Presentation
40 slides from Motorpoint's earnings presentation, November 2021
Slide 1: Half Year 2022 Results & Strategy Update
Motorpoint Group Plc Half Year 2022 Results & Strategy Update
Slide 2: Agenda
Agenda Half Year highlights 2022 Mark Carpenter, CEO Financial highlights and performance summary Chris Morgan, CFO Strategy update and outlook Mark Carpenter, CEO Motorpoint Group Plc - Half Year 2022 Results & Strategy Update 2
Slide 3: A group focused on growth through two distinct channels
A group focused on growth through two distinct channels Non Part Exchange Non Part Exchange (Launched Summer 2021) (Launched Summer 2021) <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 leadi
Slide 4: Half Year 2022 highlights
Half Year 2022 highlights Mark Carpenter, CEO Motorpoint Group Plc - Half Year 2022 Results & Strategy Update 4
Slide 5: We’re the UK’s leading omnichannel vehicle retailer
We’re the UK’s leading omnichannel vehicle retailer Motorpoint Group Plc - Half Year 2022 Results & Strategy Update 5
Slide 6: Strong progress on strategic objectives, despite supply constraints
Strong progress on strategic objectives, despite supply constraints limiting growth and unprecedented vehicle inflation Accelerating online Four new sales purchasing, 37% and collection centres Consumer car buying customers buy online secured; more in service launched in July since branches pipeline
Slide 7: That delivered excellent results
That delivered excellent results 53.4k 60% 12.6% Vehicles Vehicles Vehicles sold across the Group. H1 FY21: 37.1k Percentage of sales online. H1 FY21: Sourced from consumers (H1 FY21: 7.6%) 62% (impacted by lockdown) 2.2% 15 £13.5m Market Share Branches Record profit before tax in H1 Share of 3-4 ye
Slide 8: And strong growth in online sales despite branch reopening
And strong growth in online sales despite branch reopening Free Home Online retail units up 32.3k £194m Delivery 40% Units - 60% Online retail revenue, up 4.1k sold online 53% Units H1 FY21: 9.5k units In H1 FY21: 62% (influenced by In H1 FY21: £127m Vehicles fulfilled lockdown) (H1 FY21: 2.9k) Moto
Slide 9: Created from further investment in our digital estate
Created from further investment in our digital estate Easy to Easy to Easy to Easy to Easy to find view buy collect contact • Improved listings • 360˚ interior and • Digital end-to-end • Reserve and Collect • Quality, service and and search exterior imaging journey fulfilment • Free Home Delivery su
Slide 10: Improved efficiencies across the Group
Improved efficiencies across the Group Finance Record Improved penetration Average margin Stock Turn > 50% prep time (September) 9.2%; - 42 days in for LFL cars APR rates improved Gross profit stock lowered from 9.9% to 8.9% 4 days £55.5m H1 FY21: 56 days H1 FY21: 42%. APR 7.9% >£25k H1 FY21: 13.2 d
Slide 11: With new branches substantially supporting market reach
With new branches substantially supporting market reach • Our market share increases Manchester (Opened October 2021) dramatically in the vicinity of new branch locations • Market share pre-opening 1.7% (0-3 year sales) • Target 10% Stockton (Opened December 2020) • Profitable in H1 Manchester branc
Slide 12: Finance and Warranty attachment rates increasing
Finance and Warranty attachment rates increasing 60% 55% Driven by: • Lower APR rate 50% • Improved online journey • New warranty product 45% Continual investment Finance and warranty in customer penetration was 43% and 40% 35% respectively in FY21 35% April May June July August September October Fi
Slide 13: Which is great value for our customers
Which is great value for our customers Motorpoint Key Motorpoint benefits Cazoo Award winning service £10,999* £169 per month Extensive Choice £10,900* £191 per month PCP 7,922 miles/70 plate 20,904 miles/18 plate Great Value Quality Standard Cinch Flexible Finance Options Online + In Branch Competi
Slide 14: Which is great value for our customers
Which is great value for our customers Motorpoint Key Motorpoint benefits Cazoo Award winning service £25,999* £392 per month Extensive Choice £26,150* £459 per month PCP 2,930 miles/ 70 plate 2,955 miles/20 plate Great Value Quality Standard Cinch Flexible Finance Options Online + In Branch Competi
Slide 15: Whilst still delivering the best service and quality
Whilst still delivering the best service and quality 34.5% Motorpoint Quality Standard sits at the Repeat customers core of our operations, ensuring we deliver the highest levels of quality of FY21 33% product and service along the entire <30 mins customer journey. This latest pillar to Average hand
Slide 16: And acting responsibly
And acting responsibly By supporting our environment and our communities • Head of Sustainability started in October “ Motorpoint has • Employees Enterprise • ESG committee established always been heavily Network • Partnership with iOffset to reduce business immersed in • Automotive 30% Club – emiss
Slide 17: Strong demand in branch and online since April reopening
Back open for business Strong demand in branch and online since April reopening despite supply chain constraints 17 Motorpoint Group Plc - Half Year 2022 Results & Strategy Update
Slide 18: Financial highlights and performance summary
Financial highlights and performance summary Chris Morgan, CFO Motorpoint Group Plc - Half Year 2022 Results & Strategy Update 18
Slide 19: Financial highlights
Financial highlights £’m unless stated H1 FY22 H1 FY21 Change Record breaking performance post lock down Revenue 605.2 387.7 +56.1% • Retail volume growth in H1 of 46%, significantly ahead of used car market which grew 31% Profit before tax 13.5 9.7 +39.2% • Profit before tax up 39.2%, despite strat
Slide 20: Operating results
Operating results £’m H1 FY22 H1 FY21 Change Revenue • April and May record months. Sales moderated from ₋ Retail 512.0 318.9 June due to vehicle shortages, but demand remains ₋ Wholesale 93.2 68.8 strong, with stock turning quickly Total revenue 605.2 387.7 +56.1% • Online sales over 60% of overall
Slide 21: Balance sheet
Balance sheet £’m H1 FY22 H1 FY21 Fixed assets 18.6 18.3 • Manchester branch opened 1 October, with number of locations in pipeline (15 locations now in total; 13 at H1 FY21). Right of use assets 47.6 41.3 • Motherwell prep centre opened in August; increasing preparation Inventories 154.9 102.5 capa
Slide 22: Cashflow
Cashflow 30 25 18.3 3.4 3.8 20 1.9 1.8 15 11.7 10 4.3 5 6.0 6.0 - Opening net EBITDA Capex Interest and tax Lease Shares Stock net of Working capital Closing net cash payments purchased for financing and other cash the EBT facilities movements 22 Motorpoint Group Plc - Half Year 2022 Results & Strat
Slide 23: Capital light model generates high ROCE
Capital light model generates high ROCE Return on capital employed 140% 120% 117% 102% 100% 97% • Leasehold property model • Stock majority funded by third parties 80% • Vehicle paid for prior to delivery/collection 60% • 25% Stock turn improvement in 53% 53% FY22 40% • ROCE in FY21 and H1 FY22 infl
Slide 24: Financial and non-financial KPIs
Financial and non-financial KPIs H1 FY22 H1 FY21 FY21 H1 FY22 H1 FY21 FY21 Volumes Finance Penetration – Branch 51% 47% 48% Retail 34,400 23,546 43,144 Finance Penetration – Online 37% 34% 38% Wholesale 18,986 13,577 24,367 Total 53,356 37,123 67,511 Preparation pu 232 174 198 Transport pu 93 91 97
Slide 25: Strategic update and outlook
Strategic update and outlook Mark Carpenter, CEO Motorpoint Group Plc - Half Year 2022 Results & Strategy Update 25
Slide 26: Our ambition remains to grow revenue to more than £2 billion
Our ambition remains to grow revenue to more than £2 billion in the medium term 26 Motorpoint Group Plc - Half Year 2022 Results & Strategy Update
Slide 27: A reminder of what our ambition looks like
A reminder of what our ambition looks like Double revenue Online revenue Gross Profit margin Profit Before Tax margin EBITDA £1.0bn £0.4bn 7.8% 1.8% 2.7% Actual FY20 Medium term targets >£2.0bn >£1.0bn >8% >2% >3% Across retail and wholesale sales Whilst balancing customer Whilst investing in data,
Slide 28: Operating margin breakdown
Operating margin breakdown FY20 H1 FY22 Medium term base case Gross Profit 7.8% 9.2% >8.0% Staff costs 3.0% 3.2% c. 2.7% Marketing 0.7% 1.7% c. 1.2% Depreciation/Occupancy 0.7% 0.7% c. 0.6% Other 1.2% 1.1% c. 1.1% Interest 0.4% 0.3% c. 0.4% Profit Before Tax 1.8% 2.2% >2.0% 28 Motorpoint Group Plc -
Slide 29: Huge potential in the current market remains
Huge potential in the current market remains...... 8 million Huge potential. Disrupt established underlying annual 2 million units in <0-4 auction wholesale used car market market transactions Industry low levels of Fragmented Growing availability customer satisfaction “competition of smaller fulfil
Slide 30: We’ve continued to invest in our evolving customer
We’ve continued to invest in our evolving customer for over 20 years What matters to the customer: • Value The best price • Choice Make and model Location • Quality Assurance Customer Warranty Fluid between • Service channels Customer Care Agents • Seamless processes • Security In Branch • Convenien
Slide 31: Our model is shifting as the online channel grows
Our model is shifting as the online channel grows Customer migration online Availability of smaller space Hub and spoke • Accelerated by Covid • OEMs rationalising costly dealer networks • Sales and fulfilment centres satisfying online demand Increased market • 37% of retail sales have been online s
Slide 32: Meeting the potential across the UK through Hub and Spoke
Meeting the potential across the UK through Hub and Spoke FY22 Regional nearly new market share* 66% within 60 0% to 1% 1% to 2% minutes 2% to 3% 3% to • Opportunity to further increase 4% market share by reducing drive 4% to time to branch 66% of 0-3 market is within 5% 60 minutes of a Motorpoint 5
Slide 33: Both branch cohorts and online growth drive market share
Both branch cohorts and online growth drive market share Potential Sales Channel mix 80% Market 60% 2.75 share grows 40% years 20% 0% Average repeat cycle (FY21: Market share grows over 8 FY20 FY21 FY22 FY23 FY24 3.5 years) years as customers repeat Branch Online Branch cohorts prove market share gr
Slide 34: Investment into technology, data, E-commerce and capacity will accelerate growth
Investment into our technology, data, E-commerce and capacity will accelerate future growth Motorpoint Group Plc - Full Year Results 2021 and New Strategy Objectives 34
Slide 35: Good progress in H1 to grow revenue to >£2 billion in medium term
Good progress in H1 to grow revenue to >£2 billion in medium term Rapidly upscaling our Operational efficiency Increase customer Expand wholesale E-commerce through technology and acquisition and retention channels capability innovation • Significant number of new tech roles • Manchester sales and c
Slide 36: Our people and culture will continue to underpin our strategic growth
Powered by Our People Our people and culture will continue to underpin our strategic growth People strategy Enabled by Targeted Goals • Growth • Organisational design to meet • Employees become • Performance digital transformation shareholders • Reputation • Acquisition of new skills • Maintain 3* b
Slide 37: New roles recruited to fuel growth
New roles recruited to fuel growth Technology Marketing and focus Branch People Additional investment Managers new roles in Brand, in Chief Digital Officer, Performance Head of Retail and Engineers, Data marketing and General Sales Insight, Business A4C/Commercials. Managers appointed Analysts and P
Slide 38: A proven profitable growth model full of opportunity
A proven profitable growth model full of opportunity Motorpoint today Opportunities for growth • High online sales content • Relentless focus on E-commerce • High In Branch NPS • Increasing shift to online provides • Leading Value retailer in nearly operating model opportunities new cars • Greater m
Slide 39: Q+A
Q+A 39 Motorpoint Group Plc - Half Year 2022 Results & Strategy Update
Slide 40: 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