Temple & Webster Group Ltd · ASX:TPW
Temple & Webster — FY2019 Earnings Presentation
27 slides from Temple & Webster's earnings presentation, Jul 30, 2019
Slide 1: FY19 Investor Presentation
FY19 Investor Presentation Mark Coulter CEO Mark Tayler CFO Page 1
Slide 2: Summary
Summary Pre Audit FY19 Revenue FY18 Revenue • Temple & Webster is the $101.6m $72.2m online market leader in ~41% Growth YoY furniture & homewares FY19 EBITDA FY18 EBITDA • $13.9b total market, only $1.1m ($0.7m) 4-5% moved online • Business is now trading Jun-19 Cash Jun-18 Cash profitably with str
Slide 3: FY19 Business Update
FY19 Business Update • ~41% revenue growth • 37% active customer growth High growth in a weak • First $1 million day in June (checkout revenue) housing market • Shift to online driven by demographic changes independent of macroeconomic factors • Temple & Webster positioned as “affordable beauty”, ap
Slide 4: Temple & Webster is the leading online retailer for furniture & homewares
Temple & Webster is the leading online retailer for furniture & homewares Page impressions (JUNE) Active customers (LTM) ~14m ~271k Website users (JUNE) Product listings ~1.6m ~150k Email subscribers Sub-categories ~1.8m ~195 Social media reach Average time to dispatch ~560k ~1.5 days Source: www.te
Slide 5: Our core furniture and homewares category is a $13.9 billion market
Our core furniture and homewares category is a $13.9 billion-dollar market, with only 4-5% migrated online Furniture and Homewares Market (AUS) Furniture and homewares online penetration rates by country 2018 Data 2018 Data Source: Euromonitor International Limited; Home Furnishings and Homewares So
Slide 6: Demographic and structural changes will drive strong market growth for years to come
Demographic and structural changes will drive strong market growth for years to come 1 Millennials are entering our core demographic 2 Structural changes in our favour Hypothetical distribution of homewares • Faster internet and mobile speeds and furniture spend by age eg. NBN, 5G • New market entra
Slide 7: Our strategy is based on range, inspiration and service
Our strategy is based on range, inspiration and service 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’ homes and work Our Mission
Slide 8: It's all about the customer
It’s all about the customer Net Promoter Score (score range: -100% to 100%) 70% 60% 50% 40% 30% 20% 10% 0% Best pureplay finalist 2019 Key initiatives to further Enforcing quality Taking more control Category experts within drive customer satisfaction standards across over delivery experience custom
Slide 9: Active customers up 37% year on year
Active customers up 37% year on year ↑13% Active Customers Repeat and First Time Orders 290,000 60,000 270,000 50,000 250,000 230,000 40,000 210,000 190,000 30,000 170,000 20,000 150,000 130,000 10,000 110,000 0 First Time Repeat NB. Active customers are the number of unique customers who have trans
Slide 10: Customer metrics remain strong, Marketing ROI holding at ~2.6x
Customers metrics remain strong 12 month Marketing ROI Revenue per Active Customer2 Conversion Rate3 holding at ~2.6x1 2.8 $390 3.0% 2.4 $380 2.5% 2.0 $370 $360 1.6 2.0% $350 1.2 $340 1.5% 0.8 $330 $320 1.0% 0.4 $310 0.5% 0.0 $300 FY18 FY19 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun
Slide 11: Our Trade and Commercial (B2B) division grew 38% year on year
Our Trade and Commercial (B2B) division grew 38% year on year Our B2B Customer Proposition B2B Sales $’000s. $2,400 $2,000 $1,600 $1,200 $800 $400 $0 Sales/revenue is pre deferred revenue and refund accounting adjustments Repeat and First Time Orders 2,000 1,600 1,200 800 400 0 First Time Trade & Co
Slide 12: FY19 Key launches: We continue to innovate our offering
FY19 Key launches: We continue to innovate Increased range by 25%, to 150k products our offering Added ”Shop the Look” Begun to invest in DIY/ home functionality with 500+ improvement category proprietary images Expanded private label range into homewares Added personalisation across desktop, mobile
Slide 13: FY19 Key launches: Site functionality
FY19 Key launches: Site functionality Product Recommendations Room Ideas / Shop the Look Using AI and machine learning Leveraging back catalogue of proprietary imagery Page 13
Slide 14: FY19 Key launches: Showroom & Studio
FY19 Key launches: Showroom & Studio By appointment New showroom photographic Personal service studio with dedicated Dedicated account manager photographic for our Trade & studio; multiple Commercial room sets; customers; touch & warehouse feel key product storage for new lines; view samples product
Slide 15: FY19 Financial Results
FY19 Financial Results Mark Tayler CFO Page 15
Slide 16: Profit and loss
Profit and loss Pre Audit FY18 AASB 15 FY18 FY19 • Revenue growth for the year of ~41% A$m Pre Adj Adjustment Post Adj Revenue 72.6 (0.4) 72.2 101.6 • Delivered margin increased by 37%, however margin % is down Cost of Sales (40.5) 0.2 (40.3) (56.3) slightly YoY due to increased fulfillment costs as
Slide 17: We are taking market share in a weak macro environment
We are taking market share in a weak macro environment Pre Audit ↑13% Revenue by Half $000 56,000 • Although macro conditions have been difficult 48,000 throughout FY19 (weak retail sales, low wages growth, negative housing market) , TPW’s growth 40,000 rate has remained consistent. 32,000 • At curr
Slide 18: Profitability is allowing the business to reinvest for growth
Profitability is allowing the business to Pre Audit reinvest for growth FY17 FY18 FY19 Revenue 100% 100% 100% Gross Margin 42.7% 44.1% 44.6% Delivered Margin (after all 27.6% 31.0% 30.1% distribution costs) Customer Service Staff & 4.7% 3.3% 3.3% Merchant Fees Advertising Costs 12.6% 11.3% 10.9% Con
Slide 19: Realising benefits of a cash flow positive model
Realising benefits of a cash flow positive model Pre Audit Cash flow by Half $000 • Closing cash of $13.5m 14,000 • Cash flow positive year +$3.6m was driven by a positive EBITDA 12,000 result and benefits from the group’s cash flow positive business model 10,000 • Strong balance sheet position with
Slide 20: Strategy & Outlook
Strategy & Outlook Page Page 20 20
Slide 21: Given the growth opportunity, our focus is on Australia
Given the growth opportunity, our focus is on Australia Key Addressable FY19 TPW Market categories market size Revenue Share Furniture, Future B2C homewares, (Residential ~$25b ~$95m <0.5% phases of home & home improvement, growth office) appliances include International (e.g. NZ / SE Asia); offline
Slide 22: Our plan to grow our leadership in the online B2C furniture and homewares market
Our plan to grow our leadership in the online B2C furniture and homewares market Add depth and Leverage scale to Increase brand breadth across our core obtain cost advantage awareness from 31% to categories (including and exclusivity on new +80% through digital DIY); expand private product ranges an
Slide 23: Our plan to grow our market share of the B2B furniture and homewares market
Our plan to grow our market share of the B2B furniture and homewares market Add Trade & Add inbound sales staff Continue pilot of Commercial exclusive (onshore & offshore); Sydney by product ranges and outbound appointment business development showroom managers Continue to improve Innovate offering
Slide 24: Trading update & outlook
Trading update & outlook FY20 has started strongly with July’s YoY revenue growth tracking in line with FY19. The company remains committed to a high growth strategy to take advantage of the structural shift towards online. TPW will be reinvesting short term operating leverage into growth initiative
Slide 25: Q&A
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 presentation to provide background information on the Company and its subsidiaries and is not an offer or invitation or recommendation to subscri
Slide 27: Temple & Webster
TEMPLE WEBSTER
Temple & Webster Group — FY2019 Earnings Presentation on 6ix