Wickes Group Plc · LSE:WIX
Wickes — H1 2024 Earnings Presentation
28 slides from Wickes's earnings presentation, Sep 10, 2024
Slide 1: 2024 Half Year Results
2024 Half Year Results 10 September 2024
Slide 2: Introduction
Introduction David Wood Lk
Slide 3: Agenda
Agenda Key Highlights 1 David Wood Page 4 Financial Review 2 Mark George Page 5 Business Update 3 David Wood Page 12 Q&A 4 David Wood & Mark George Page 21 Full Year Results 2023 3
Slide 4: Resilient performance in H1, with improved trend so far in Q3
Resilient performance in H1, with improved trend so far in Q3 • Balanced business model delivers resilient performance in H1 with record market share gains in Retail • Investment in proven growth levers delivering progress in key metrics ○ TradePro sales growth +14% ○ Wickes Lifestyle Kitchens sales
Slide 5: Financial Review
Financial Review Mark George
Slide 6: Resilient performance in challenging H1 market conditions
Resilient performance in challenging H1 market conditions Revenue £799.9m Gross margin Strong balance sheet Group LFL (3.9)% +24 basis points with £152m cash Retail1 LFL 0.6% Interim dividend 3.6p Adjusted PBT 2 Design & Installation £23.4m £25m share buyback LFL (18.3)% nearing completion3 All figur
Slide 7: Balanced business model & tight cost control deliver resilient performance
Balanced business model & tight cost control deliver resilient performance £m1 HY 2023 HY 2024 Change % • Sales & volume growth in Retail; Revenue 827.7 799.9 (3.4)% H1 market remained challenging in Design & Installation LFL % 0.7% (3.9)% N/A Gross profit 297.3 289.2 (2.7)% • Gross margin +24bps as
Slide 8: Sales & volume growth in Retail; market remained challenging in Design & Installation
Sales & volume growth in Retail; market remained challenging in Design & Installation Retail (Trade & DIY) • Achieved record market share RETAIL DESIGN & INSTALLATION GROUP • Positive LFL driven by volume • TradePro sales +14% with 18% increase in active TradePro members and healthy trade pipelines
Slide 9: Adjusted PBT reflects challenging H1 market conditions in Design & Installation
Adjusted PBT reflects challenging H1 market conditions in Design & Installation Revenue and trading margin • Trading margin expansion in Retail Revenue & • Weakness in Design & Installation, Gross Margin In line with FY guidance; which experienced softening Utilities less of an impact demand and high
Slide 10: Cash of £152m after £29m returned to shareholders
Cash of £152m after £29m returned to shareholders • £65m working capital inflow reflects normal seasonal trading pattern • Capex broadly in line with guidance ○ 2024 guidance of c.£30m excluding SaaS investments • £5.1m net initial consideration for acquisition of 51% stake in Solar Fast • £29m return
Slide 11: Outlook and guidance for 2024
Outlook and guidance for 2024 Outlook • Trading in Q3 so far has seen an improved trend • Well placed to continue to outperform the market • Current trading combined with actions to mitigate inflation underpins management’s outlook for FY24 adjusted PBT 1 Technical guidance for 2024 - unchanged • Net
Slide 12: Business Update
Business Update David Wood Lk
Slide 13: Winning strategy based on proven growth levers
Winning strategy based on proven growth levers 13
Slide 14: Current market trends
Current market trends ● Trade pipelines remain healthy: ○ c50% of tradespeople continue to have a pipeline of over 3 months1 Trade ○ c25% have a pipeline of over 12 months1 ● Traders remain thrifty, with 28% being careful with quantity of materials bought 2 ● Planned spend on a new kitchen or bathro
Slide 15: Retail continuing to outperform the market
Retail continuing to outperform the market • Record market share1, with particular gains in decor, garden, tiles & flooring • TradePro sales +14% ○ Active members +18%2 ○ Machine learning driving deeper customer relationships and extracting greater lifetime value ○ >1m total members3 • 10 range revie
Slide 16: Strategic differentiation in Design & Installation
Strategic differentiation in Design & Installation • Soft market environment in H1 for large consumer purchases; particularly impacted Wickes Bespoke Kitchens • Ongoing strategic focus on our lower-priced Wickes Lifestyle Kitchens1 driving sales +19% • Total ordered sales2 of kitchens, bathrooms & i
Slide 17: Design & Installation - Initial roll-out of Wickes Solar
Design & Installation - Initial roll-out of Wickes Solar • Solar is in long-term growth ○ UK market expected to be worth £1.5bn pa by 20281 ○ Highly fragmented market, no clear brand leader • With a trusted brand and significant experience in design and installation services at scale, Wickes is well-
Slide 18: Investment in new stores and refits driving returns
Investment in new stores and refits driving returns • Refitted 3 stores into new format Ashford - before refit ○ ROCE on refitted stores 25% • Two new stores ○ Long Eaton and Durham ○ Creating c. 60 new jobs • New format stores now 179, out of 229 total Ashford - after refit • On track for 2024 plans ○
Slide 19: 'Built to Last' strategy recognised with entry into FTSE4Good index
‘Built to Last’ strategy recognised with entry into FTSE4Good index ● Flexible working rolled out to all roles in Support Centre and all store management teams, as part of our Colleague Promise People ● Supported >1,300 community projects across the country ● Raised >£1m in partnership with The Brai
Slide 20: Conclusion
Conclusion • Balanced business model delivers resilient performance in a challenging H1 market • Trading in Q3 so far has seen an improved trend • Current trading combined with actions to mitigate inflation underpins management’s outlook for adjusted PBT • Delivering attractive returns to shareholder
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix Lk
Slide 23: A uniquely balanced business supporting three customer propositions
A uniquely balanced business supporting three customer propositions 23 All data as at FY 2023
Slide 24: Our 4C customer service model
Our 4C customer service model Design & Installation 24 DIFM or Do It For Me now known as Design & Installation
Slide 25: How we deliver our unique customer proposition
How we deliver our unique customer proposition 25 All data as at FY 2023
Slide 26: Sustainable competitive advantage driving investment returns
Sustainable competitive advantage driving investment returns 26 All data as at FY 2023
Slide 27: Capital allocation
Capital allocation Revised policy announced in July 2023 • Maintain strong balance sheet with significant liquidity at all times ○ Hold min.£50m cash at December YE, the seasonal low point ○ Average cash considerably higher in a normal trading cycle, typically by £30-50m • RCF provides additional liq
Slide 28: Disclaimer
Disclaimer This presentation has been prepared by Wickes Group Plc. To the extent it includes forward-looking statements, these statements are based on current plans, estimates, targets and projections, and are subject to inherent risks, uncertainties and other factors which could cause actual resul