Victorian Plumbing Group Plc · LSE:VIC
Victorian Plumbing — FY2024 Earnings Presentation
37 slides from Victorian Plumbing's earnings presentation, Jan 15, 2025
Slide 1: Victorian Plumbing Group plc Full Year Results Presentation
> 2 Victorian Plumbing Group plc FULL YEAR RESULTS PRESENTATION YEAR ENDED 30 SEPTEMBER 2024 Presented by Mark Radcliffe (CEO) and Daniel Barton (CFO) victorian 15 JANUARY 2025 plumbing coun
Slide 2: Summary of strategic progress and operational performance indicators in 2024
SUMMARY OF STRATEGIC PROGRESS AND OPERATIONAL PERFORMANCE INDICATORS IN 2024. Lease exchange – January 2023. Fit-out start – October 2023. Revenue of £281.0m (-1%), outperforming First dispatched order – August 2024. the wider RMI market1. Project complete – December 2024. Acquired – May 2024. Trade
Slide 3: Review of Financials
REVIEW OF FINANCIALS
Slide 4: 2024 group revenue growth of 4% and adjusted EBITDA growth of 14%
2024 GROUP REVENUE GROWTH OF 4% AND ADJUSTED EBITDA GROWTH OF 14%, IN LINE WITH MARKET EXPECTATIONS. Victorian Plumbing Victoria Plum 2024 2023 YoY YoY £m £m £m £m Group LFL Revenue 281.0 14.7 295.7 285.1 4% (1%) Cost of sales (139.3) (8.6) (147.9) (150.5) 2% 8% Gross profit 141.7 6.1 147.8 134.6 10
Slide 5: Order volume up 3%, outperforming the wider RMI market
ORDER VOLUME UP 3%, WITH OVERALL SPENDING OUTPERFORMING THE WIDER RMI MARKET. 1,200 1,022 0.0% 1,000 -1.0% 800 -2.0% '000 YoY Movement 600 -3.0% 932 956 906 880 +6% +3% +17% (3%) -4.0% 400 776 +35% -5.0% 200 -6.0% - 2020 2021 2022 2023 2024 -7.0% LFL orders Group orders Barclays - household - spendi
Slide 6: Continued shift to own brand products reflected in a reduced AOV
CONTINUED SHIFT TO OWN BRAND PRODUCTS REFLECTED IN A REDUCED AOV. 300 285.1 281.0 350 268.8 269.4 306 306 297 +3% +0% 295 59.5 250 42.1 52.8 64.0 +10% (4%) 21% +8% 300 16% 20% 23% 269 208.7 +2% 200 28.6 14% 250 79% 78% 150 3.30 £m 3.19 3.14 3.14 3.18 200 226.7 216.6 225.6 217.0 (4%) £ 100 86% 80% 79
Slide 7: 23% growth in tiles & décor revenue to £12.4m
23% GROWTH IN TILES & DÉCOR REVENUE TO £12.4M, WITH MORE TO COME… 25.0 20.0 15.0 12.4 £m CAGR +28% 10.0 5.0 4.6 - 2020 2021 2022 2023 2024 FUTURE 7
Slide 8: Continued benefit from shift to own brand products maintains high gross margin
CONTINUED BENEFIT FROM SHIFT TO OWN BRAND PRODUCTS MAINTAINS HIGH GROSS MARGIN. 300 60% 55% 53% 53% 49% 50% 50% Gross Profit Margin 63 59 40% 250 (1ppt) 65 22% 21% 67 30% 24% 25% 20% 200 52 10% 25% 0% 150 2020 2021 2022 2023 2024 £m 60% 222 222 204 202 +1ppt 100 78% 79% 50% 76% 75% Gross Profit Marg
Slide 9: Gross profit increased by 5% to £141.7m, margin up 3ppts to 50%
GROSS PROFIT INCREASED BY 5% TO £141.7M, WITH GROSS PROFIT MARGIN INCREASING BY 3PPTS TO 50%. 51% 50% 160.0 50% 50% 49% 49% 48% 140.0 49% 46% 45% 45% 120.0 45% 44% 47% 43% Gross Profit (£m) 100.0 80.0 45% 40% 141.7 44% 130.5 134.6 +5% +42% 121.0 +11% 60.0 (7%) 92.0 40.0 +49% 35% 20.0 Covid - 30% 202
Slide 10: Continued investment in brand marketing, paving the way for future growth
CONTINUED INVESTMENT IN BRAND MARKETING, PAVING THE WAY FOR FUTURE GROWTH. 90.0 2020 2021 2022 2023 2024 Online marketing 25.0% 25.9% 27.3% 26.3% 26.2% 80.0 4.2 6.9 Brand marketing - - 1.0% 1.5% 2.5% 2.6 Total marketing 25.0% 25.9% 28.3% 27.8% 28.7% 70.0 60.0 8.0 50.0 7.0 £m 6.0 40.0 2.9 73.6 75.0 7
Slide 11: Marketing and property efficiencies offset by rising people costs
MARKETING AND PROPERTY EFFICIENCIES OFFSET BY RISING PEOPLE COSTS. 120.0 2020 2021 2022 2023 2024 Marketing 25.0% 25.9% 28.3% 27.8% 28.7% 9.3 People costs* 4.5% 5.1% 5.9% 6.9% 8.0% 12.0 100.0 Property & other overheads 1.2% 1.5% 1.9% 2.2% 1.4% 9.3 Underlying costs 31.6% 33.6% 37.7% 38.9% 40.0% 22.4
Slide 12: Shift in product mix contributes to 14% increase in adjusted EBITDA
SHIFT IN PRODUCT MIX IS A KEY CONTRIBUTOR TO A 14% INCREASE IN ADJUSTED EBITDA AND A 1PPT INCREASE IN ADJUSTED EBITDA MARGIN. 50.0 12.0% 15% 2.7% 45.0 13% 10.0% 40.0 -1.0% 9.2% -0.8% 35.0 8.3% 8.0% Adjusted EBITDA (£m) 9% Adjusted EBITDA Margin 30.0 8% 25.0 7% 6.0% 40.1 20.0 +53% 15.0 27.2 26.2 4.0%
Slide 13: Strong cash generation, with 16% increase in free cash flow to £18.6m
CONTINUE TO ACHIEVE STRONG CASH GENERATION, WITH A 16% INCREASE IN FREE CASH FLOW TO £18.6M, RESULTING IN ROBUST OPERATING CASH CONVERSION OF 68%. 35.0 105% 30.0 25.0 81% 73% Free Cash Flow (£m) 68% 68% 20.0 IMAGE TO BE INCLUDED 32.6 15.0 +18% 27.6 +254% 10.0 18.6 16.1 +16% 14.3 +13% (56%) 5.0 - 202
Slide 14: Closure of Victoria Plum & Warehouse Transformation
CLOSURE OF VICTORIA PLUM & WAREHOUSE TRANSFORMATION
Slide 15: Acquired. Closed. Confusion factor removed.
ACQUIRED. CLOSED. CONFUSION FACTOR REMOVED. PAVES THE WAY FOR FUTURE GROWTH. Underlying fixed cost base was disproportionately large compared to its customer base. Working from home culture impaired turnaround strategy. Doncaster lease expired in December 2024 (subsequently extended to January 2025)
Slide 16: A reminder of the benefits
A REMINDER OF THE BENEFITS. Space to grow core bathrooms and expansion categories. Enhances the customer experience (e.g. extended next day ordering). Replaces margin dilutive expensive short-term rental cost that impedes profitable growth. Facilitates scalability and increased efficiency to support
Slide 17: Strategy Update
STRATEGY UPDATE
Slide 18: Our strategy remains unchanged; three growth horizons
OUR STRATEGY REMAINS UNCHANGED. WE CONTINUE TO FOCUS ON THREE GROWTH HORIZONS. Number one UK bathroom retailer, Increasing our growth in expansion Broadening our continuing the market shift from offline to categories by dedicated marketing marketing approach to online. campaigns. specifically target
Slide 19: 2024 performance demonstrates resilience of our business model and competitive advantage
OUR 2024 FINANCIAL PERFORMANCE DEMONSTRATES THE RESILIENCE OF OUR BUSINESS MODEL AND COMPETITIVE ADVANTAGE, UNDERPINNING OUR CONFIDENCE IN PROFITABLE GROWTH. ONE-STOP SOLUTION FOR CONSUMERS STRONG BALANCE SHEET & UNRIVALLED WAREHOUSE TRANSFORMATION APPROACH TO MARKETING Unrivalled product range and
Slide 20: Investing in our future through category leading brand awareness
INVESTING IN OUR FUTURE THROUGH CATEGORY LEADING BRAND AWARENESS. 100% 90% 80% 70% 60% 50% Continued growth of our brand awareness to 66% 85% (2023: 64%). 40% 77% 77% 30% 66% 61% Closing the gap on bricks & mortar retailers. - B&Q 89% in 2023 (+25ppt on Victorian Plumbing), 20% reducing to 85% in 20
Slide 21: Reinvesting paid search efficiencies into brand budgets
By reinvesting paid search (PPC) efficiencies back into brand budgets, we invest further in the future of the Victorian Plumbing brand. Closure of Victoria Plum drives natural improvements in advert attribution and strengthens our brand position. We continue to invest across a diverse range of media
Slide 22: We are the one-stop solution for a bathroom-related purchase
WE ARE THE ONE-STOP SOLUTION WHEN CONSIDERING A BATHROOM- RELATED PURCHASE. SUPPLY CHAIN & CUSTOMER OFFERING • Unrivalled product range and excellent availability. • Developed over 25 own brands, all exclusively available on the Victorian Plumbing platforms. IMAGE TO BE INCLUDED • Local experts and
Slide 23: We continue to develop our bespoke platforms
WE CONTINUE TO DEVELOP OUR BESPOKE PLATFORMS, ADVANCING OUR FUNCTIONALITY AND IMPROVING THE CUSTOMER EXPERIENCE. • Development of an in-house AI model to • App released in October 2023 with full • Enhancing our existing warehouse improve the speed and accuracy of launch in summer 2024: c.2% revenue
Slide 24: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE
Slide 25: We take our environmental, social and governance responsibilities seriously
WE TAKE OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE RESPONSIBILITIES SERIOUSLY AND ARE CONTINUOUSLY TAKING ACTION TO MAKE A DIFFERENCE TO OUR PEOPLE, OUR COMMUNITIES AND THE WIDER ENVIRONMENT. ENVIRONMENTAL SUSTAINABILITY DIVERSITY & INCLUSION GOVERNANCE & ETHICS • Solar panels mounted to the roof of o
Slide 26: Current Trading & Outlook
2025 CURRENT TRADING & OUTLOOK
Slide 27: Overall Q1 revenue was up 3% on 2024
• Overall Q1 revenue was up 3% on 2024, against a tough comparator. • Trading in October and November was soft, impacted by: • A cautious approach to marketing as we sought to bed in our new warehouse infrastructure without disrupting the customer experience; and • Ongoing UK consumer uncertainty. •
Slide 28: victorianplumbing.com
victorian plumbing.ou
Slide 29: Appendices
APPENDICES
Slide 30: Robust balance sheet recognising new distribution centre as right-of-use asset
ROBUST BALANCE SHEET RECOGNISING OUR NEW DISTRIBUTION CENTRE IN LANCASHIRE AS A RIGHT-OF-USE ASSET AND CORRESPONDING LEASE LIABILITY. SIGNIFICANT INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT FOR WAREHOUSE TRANSFORMATION. 2024 2023 2024 2023 £m £m Days Days Goodwill 18.8 - Creditor days 64 72 Property
Slide 31: Closing cash of £11.2m following acquisition and warehouse spend
CLOSING CASH OF £11.2M FOLLOWING SIGNIFICANT INVESTMENT IN THE ACQUISITION OF VICTORIA PLUM AND WAREHOUSE TRANSFORMATION SPEND. Victorian Victoria 2024 2023 Plumbing Plum £m £m Adjusted EBITDA 29.4 (2.2) 27.2 23.8 Movement in working capital (5.9) 1.1 (4.8) (4.0) Cash generated from operating activi
Slide 32: The journey to closure
THE JOURNEY TO CLOSURE. 17 May 2024 Further closure costs c.£7m Victorian Plumbing Ltd acquires AHK Designs Ltd on cash free, debt free basis for £22.2m (from existing cash reserves) Stock transferred to Victorian Plumbing c.£8.5m Purchase price: Revenue: £22.2m £14.7m 20% Annualised revenue: Adj. E
Slide 33: Warehouse fit-out complete with all orders dispatched from new warehouse
WAREHOUSE FIT-OUT COMPLETE WITH ALL ORDERS NOW BRING DISPATCHED FROM THE NEW WAREHOUSE INFRASTRUCTURE. FY 2023 FY 2024 FY 2025 Practical Legal completion on 4 Warehouse fit-out: Lancashire BAU & end of completion October 2023 – £45m £23m cash outflow transition double running ROU & £42m lease up to
Slide 34: Bathroom and accessories market forecast to grow by 1.6% in 2024
BATHROOM AND BATHROOM ACCESSORIES MARKET FORECAST TO GROW BY 1.6% IN 2024 TO £1,742M. UPTICK IN GROWTH EXPECTED IN 2027 AND 2028 TO 3.5% AND 2.4%, RESPECTIVELY. 2,000 35% 1,800 30% 1,600 1,400 25% 1,200 20% 1,000 £m 15% 800 600 10% 400 5% 200 - 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 20
Slide 35: Consistent market leader amongst online specialist bathroom retailers
CONSISTENT MARKET LEADER AMONGST ONLINE SPECIALIST BATHROOM RETAILERS, WITH A GROWING ONLINE MARKET SHARE. 45% 42% 42% 42% 40% 40% 40% 40% 40% 38% 38% 38% 38% 39% 39% 38% 38% 38% 37% 37% 38% 37% 37% 36% 35% 36% 35% 34% 34% 35% 30% 25% 23% 24% 23% 23% 21% 21% 20% 18% 18% 18% 17% 17% 15% 15% 16% 14% 1
Slide 36: Number one retailer for bathroom products across online and offline channels
NUMBER ONE RETAILER FOR BATHROOM PRODUCTS ACROSS BOTH ONLINE AND OFFLINE CHANNELS. 19.9% 20.0% 18.1% 16.3% 15.0% 10.8% 9.7% 10.0% 8.6% 7.9% 7.3% 7.0% 6.8% 6.4% 5.0% 4.5% 4.1% 3.3% 3.5% 3.1% 2.3% 1.6% 1.4% 0.3% 0.0% 2015 2023 2015 2023 Online specialists Store-based retailers 1Mintel Bathroom and Bat
Slide 37: Please read the following disclaimers
PLEASE READ THE FOLLOWING DISCLAIMERS WHEN USING THE INFORMATION IN THIS PRESENTATION. The information and opinions provided in this presentation are provided as of the date of this presentation. Certain statements in this presentation constitute forward looking statements (including beliefs or opin
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