Temple & Webster Group Ltd · ASX:TPW
Temple & Webster — FY2018 Earnings Presentation
27 slides from Temple & Webster's earnings presentation, Aug 21, 2018
Slide 1: FY18 Results
For personal use only FY18 Results Mark Coulter CEO Mark Tayler CFO Page 1
Slide 2: Contents
Contents For personal use only CEO Update Page 3 - 15 FY18 Financial Results Page 16 - 20 Strategy & Outlook Page 21– 24 Q&A Page 2
Slide 3: CEO Update
For personal use only CEO Update Mark Coulter CEO Pg 26 Page 3
Slide 4: Summary
Summary For personal use only FY18 Revenue H2 Revenue • Temple & Webster is the $72.6m ⇧ 25% online market leader in furniture & homewares FY18 EBITDA H2 EBITDA • ~$14b total market, less ($0.6m) $0.3m than 4% moved online • Business is now profitable June 30 Cash with top-line growth $9.9m accelera
Slide 5: Temple & Webster is the leading online retailer for furniture & homewares
Temple & Webster is the leading online retailer for furniture & homewares For personal use only Page impressions (MONTHLY) Active customers (LTM) 11m+ ~198k Website users (MONTHLY) Product listings 1.1m ~125k Email subscribers (WEEKLY) Sub-categories 1.6m+ ~185 Social media reach Average time to dis
Slide 6: Core furniture and homewares category is a $13.6 billion market, ~4% online
Our core furniture and homewares category is a $13.6 billion dollar market, with only ~4% migrated online For personal use only Furniture and Homewares Market (AUS) Furniture and homewares online penetration rates by country for CY17 16% 14.2% 13.7% 14% 12% 10% 8% 6% 3.9% 4% 2% 0% Australia US UK CY
Slide 7: Demographic and structural changes will drive strong market growth
Demographic and structural changes will drive strong market growth for years to come For personal use only 1 Millennials are now entering our core demographic 2 Structural changes in our favour Hypothetical distribution of homewares • New logistics entrants and furniture spend by age eg. SingPost, J
Slide 8: Our strategy is based on range, inspiration and service
Our strategy is based on range, inspiration and service For personal use only Our Core Belief • We believe everyone wants to live more beautifully. Our Vision • Our vision is to make the world more beautiful, one room at a time. • Our mission is to deliver beautiful solutions for our customers’ home
Slide 9: Revenue growth is accelerating
Revenue growth is accelerating For personal use only Phase 3:FY19+ Phase 2: FY18 • Accelerate top-line growth ✓ Focus on growth of core • Invest in marketing and business adjacent growth plays ✓ Reach profitability within • Look at organic and inorganic Phase 1: FY17 existing cash reserves growth op
Slide 10: Active customers are growing at +25% year on year
Active customers are growing at +25% year on year ↑13% For personal use only Active Customers Repeat and First Time Orders 210,000 200,000 190,000 45,000 180,000 40,000 35,000 170,000 30,000 160,000 25,000 150,000 20,000 140,000 15,000 130,000 10,000 120,000 5,000 110,000 0 4QFY16 1QFY17 2QFY17 3QFY
Slide 11: Customer profitability continues to improve
Customer profitability continues to improve For personal use only Revenue per Active Customer1 Conversion Rate2 Year 1 Marketing ROI 2.50% $400.00 2.30% $115 2.10% $350.00 1.90% 1.70% $300.00 1.50% $54 $250.00 1.30% 1.10% $200.00 0.90% 0.70% $150.00 0.50% Margin per Active Marketing spend Customer3
Slide 12: Our business can now scale profitably
Our business can now scale profitably For personal use only FY16 FY17 FY18 Revenue 100% 100% 100% Gross Margin 39.9% 42.7% 44.2% Delivered Margin (after all 21.7% 27.6% 31.0% distribution costs) Customer Service & Merchant 4.9% 4.7% 3.3% Fees • Includes 100% of marketing and customer service costs M
Slide 13: Our customer satisfaction continues to improve
Our customer satisfaction continues to improve For personal use only NPS Improvement: ↑ 27% Net Promoter Score (score range: -100% to 100%) ▪ Australia’s leading independent review site ▪ Awards based on highest customer satisfaction 60% ▪ Number 1 out of 346 Home & Garden Shops in 2017 50% ▪ Averag
Slide 14: We continue to innovate our offering
We continue to innovate our offering Visual Search Paint Duck Trucks (Duck egg blue) For personal use only Using machine learning and Colour by Temple & Webster in Our first branded delivery van, aimed at artificial intelligence partnership with Taubmans improving the bulky delivery experience Page
Slide 15: Our B2B (Trade & Commercial) division continues to grow strongly
Our B2B (Trade & Commercial ) division continues Trade to grow strongly ↑13% For personal use only Number of Trade & Commercial Accounts Repeat and First Time Orders Trade & Commercial accounts have high repeat rates. Next phase is investment in new customer acquisition. 12,000 1,200 10,000 1,000 8,
Slide 16: FY18 Financial Results
For personal use only FY18 Financial Results Mark Tayler CFO Page 16
Slide 17: Profit and loss
Profit and loss For personal use only Like for Like Period • H2FY18 revenue growth rate of 25% YoY (which is the first A$m FY16 FY17 FY18 H2FY17 H2FY18 trading period to provide a true like-for-like comparison due Revenue 61.7 64.5 72.6 30.5 38.2 to the Milan Direct consolidation in Dec-16) Cost of
Slide 18: Our top-line is now delivering operating leverage
Our top-line is now delivering operating leverage ↑13% For personal use only Revenue by Half EBITDA by Half 40,000 2,000 36,000 0 32,000 -2,000 28,000 -4,000 24,000 -6,000 20,000 -8,000 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18 H2 FY18 milandirect.com.au
Slide 19: Balance sheet & cash flow
Balance sheet & cash flow For personal use only A$m 30-Jun-17 30-Jun-18 • Strong balance sheet position with no debt Cash & Cash Equivalents 8.7 9.9 • Benefits of our cash flow positive model are now Inventories 1.4 2.2 visible with FY18 cash flow positive (+$1.2m) Other current assets 0.9 1.2 Intan
Slide 20: Inventory productivity strong as levels start to scale with the business
Inventory productivity strong as levels start to scale with the business For personal use only Average inventory Weeks of cover Ageing profile 22 3,000,000 20 25% 2,500,000 18 20% 2,000,000 16 15% 14 1,500,000 12 10% 1,000,000 10 500,000 5% 8 0 6 0% H1 FY16 H2FY16 H1 FY17 H2FY17 H1 FY18 H2 FY18 H1 F
Slide 21: Strategy & Outlook
For personal use only Strategy & Outlook Page 21
Slide 22: Our plan to grow our market leadership in online furniture and homewares
Our plan to grow our market leadership in the online furniture and homewares market For personal use only Add depth and Leverage scale to Increase brand breadth across our core obtain cost advantage awareness through categories, expand and exclusivity on new digital and non-digital private label off
Slide 23: We are setting the business up for future growth horizons
We are setting the business up for future growth horizons For personal use only Offline New business Addressable B2B furniture & Adjacent lines, new markets furniture & homewares Categories geographies Online fitout (retail) furniture & ~$13.1b homewares ~$0.5b Maintain and Accelerate Continue to Br
Slide 24: Trading update & outlook
Trading update & outlook For personal use only The new financial year has started strongly, with trading exceeding expectations. July’s revenue grew 34% year on year and this momentum has continued into August. The Company remains confident of delivering its maiden full year profit in FY19. Revenue
Slide 25: Q&A
For personal use only Q&A Page 25
Slide 26: Disclaimer
Disclaimer This presentation (Document) has been prepared by Temple & Webster Group Limited ACN 608 595 660 (T&W Group or the Company). This Document is a For personal use only presentation to provide background information on the Company and its subsidiaries and is not an offer or invitation or rec
Slide 27: For personal use only
For personal use only Page 27
Temple & Webster Group — FY2018 Earnings Presentation on 6ix