Naked Wines Plc · LSE:WINE

Naked Wines — Investor Meet Company Event (January 2024)

22 slides from Naked Wines's conference presentation, Jan 23, 2024

  1. Slide 1: Investor Meet Company Presentation

    Investor Meet Company Presentation 23rd January 2023

  2. Slide 2: Disclaimer

    Disclaimer This presentation (the “Presentation”) has been produced for discussion purposes only. The information contained in the Presentation is not intended for any other use. The Presentation is being made only to, and is only directed at, persons to whom it may lawfully be communicated (“releva

  3. Slide 3: James Crawford, Group CFO

    naked! James Crawford Group CFO ee

  4. Slide 4: About Us

    About Us Naked Wines supports independent winemakers who make exclusive wines at preferential prices Our mission: To disrupt the wine industry for the benefit of our customers, winemakers and our people. Our purpose: Connect everyday wine drinkers with the world’s We pass these preferential prices o

  5. Slide 5: Our virtuous circle

    Our virtuous circle Working together harmoniously for the benefit of all Our Angels generate a stream of cash and product data We use this money to back independent winemakers to make wine exclusively for us; the data enables them to make better wine Winemakers focus on creating beautiful wines and

  6. Slide 6: Current challenges borne out of pandemic growth

    Current challenges borne out of pandemic growth 250,000 L12M Sales Total Inventory 200,000 150,000 Angels 100,000 Angel Funds 50,000 Net cash 0 31 Jan 21 30 Jun 21 30 Nov 21 30 Apr 22 30 Sep 22 28 Feb 23 31 Jul 23 31 Dec 23 -50,000 6 Naked Wines plc Investor Meet Company Presentation

  7. Slide 7: Introduction, HY24 Results and Strategy

    Introduction HY24 Results and Rowan Gormley Strategy Executive Chairman

  8. Slide 8: Strategy to get Naked back on track

    Strategy to get Naked back on track by… Strengthening the Making the profit Profitable balance sheet sustainable growth • Rightsizing inventory • £3m out of costs, • Rebuild paybacks to and commitments to £10m+ to come enable growth at pre- winemakers pandemic levels • Ensure profitability at • Rele

  9. Slide 9: Where are we? The good news and the bad

    Where are we? The good news … & … the bad • Moving towards cash generation • New customer acquisition remains tough • £40-50m of cash release to come from inventory • Costs coming down, £10m+ more to come • Existing customer base strong: Sales per customer up YoY, attrition rates down 9 Naked Wines

  10. Slide 10: Cash consumption moderated, entering cash generation period

    Cash consumption moderated, entering cash generation period FY24 H1 FY23 H1 £m £m Operating loss (8.7) (0.2) add back: Depreciation and Amortisation 1.6 2.0 Add back: Impairment 11.5 - Add back: Other non-cash charges (0.7) 2.7 Change in inventory (19.8) (50.9) Change in payables 3.8 18.5 Change in

  11. Slide 11: £40-50m of cash to be released from inventory by end FY25

    £40-50m of cash to be released from inventory by end FY25 Group inventory balance (£m) £40-50m cash released from inventory over 2 years 11 Naked Wines plc Investor 2024 HalfMeet YearCompany Results Presentation Presentation

  12. Slide 12: Angel fund redemptions remain stable, ABL replacement commenced

    Angel fund redemptions remain stable, ABL replacement commenced Total Angel balance (£m) and withdrawals (as a % of balance) Process commenced to replace ABL ● Debt advisor appointed ● Preliminary view that replacement on improved terms may be available 12 Naked Wines plc Investor Meet Company Prese

  13. Slide 13: Taking actions on cost to reduce reliance on sales levels

    Taking actions on cost to reduce our reliance on sustained sales levels Breakeven Sales £m Business as configured at end H1 required nearly £280m of sales to remain profitable at adjusted EBIT level With cost actions just taken this will reduce to under £250m Current Breakeven Sales Breakeven Sales

  14. Slide 14: Repeat customers are performing well

    Repeat customers are performing well Sales per Active Angel (£m) L6M Active Angel Although trading has been disappointing, ALL of the sales decline is due to lower customer numbers, which in turn is due to lower new customer recruitment. The existing customer base is healthy. 14 Naked Wines plc 2024

  15. Slide 15: Customer recruitment is undertaken against a well established investment model

    Customer recruitment is undertaken against a well established investment model ● Upfront investment in new customers = Marketing plus profit / loss on first order ● Lifetime value = sum of profits over 5 years from subsequent orders Period Cumulative ● Historically delivered >2x payback (LTV / Inves

  16. Slide 16: Lower customer recruitment remains the key challenge

    Lower customer recruitment remains the key challenge Last 12 month new members New Members, Investment and Payback 1,600,000 2.9x 2.8x 3.1x 4.0x 1400k 2.5x 2.3x 2.2x 2.0x 1.8x 1.7x 1.7x 1.2x 1.4x 1.5x 1,400,000 1200k 2.0x UK 1000k £27.7m £23.9m 0.0x 1,200,000 US 800k £22.5m £20.7m AUS 600k -2.0x £11

  17. Slide 17: Testing of new customer recruitment approach showing uplifts

    Testing of new customer recruitment approach is showing us considerable uplifts in value of traffic in certain segments While we have promising data for nearly 12 months, important to understand the long-term retention characteristics of these customers Days 17 Naked Wines plc Investor Meet Company

  18. Slide 18: Expect to be profitable and cash generative whether or not payback trends are fixed

    Whether we fix trends in investment paybacks, we expect to be profitable and cash generative FY24-26 New customer acquisition Cumulative Implied Payback FY26 Sales FY26 EBIT assumption Operating Cashflow Structurally harder than pre- 1.5 - 1.75x ~£280-300m ~£10m ~£70m COVID Return to long-term targe

  19. Slide 19: H1'24 Results - Recap

    H1’24 Results (26 weeks to 2 Oct 23) - Recap Financial highlights: ● Total revenue £132.3m, (20)% at reported currency rates vs H1’23 ((18)% constant currency) ● Adjusted EBIT £2.2m, (52)% at reported currency rates vs H1’23 ((44)% constant currency) ● Loss before tax £(9.7)m (H1’23 £(0.2)m) ● Net c

  20. Slide 20: Peak Trading Period and Q4 Updates

    Peak Trading Period and Q4 Updates Peak trading in line with expectations, pleasing ongoing strategic progress: ● Constant currency sales -10% versus prior year, in line with expectations, showing an improving trend from -18% during H124 ○ Average repeat customer base 12% smaller ○ Sales per repeat

  21. Slide 21: Summary: Delivering a leaner and stronger Naked

    Summary: Delivering a leaner and stronger Naked • Well established business with high levels of customer loyalty, recovering from challenges of post-covid period • Good progress with testing an enhanced customer proposition, seeing signs of new customer acquisition coming back to life • Moving towar

  22. Slide 22: naked

    naked:

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