Victorian Plumbing Group Plc · LSE:VIC
Victorian Plumbing — H1 2023 Earnings Presentation
34 slides from Victorian Plumbing's earnings presentation, May 23, 2023
Slide 1: Half Year Results Presentation
Victorian Plumbing Group plc Half Year Results Presentation Six months ended 41 March 2023 23 May 2023 victorian plumbing.coux
Slide 2: Agenda
AGENDA Today’s speakers V Overview FY23 half year results Key drivers and strategic progress Current trading and outlook 4 << 4 O&A A Ay = SAR ¥ Dan Barton, CFO victorian plumbing cou
Slide 3: Overview
OVERVIEW 4 4 4444 44K 4 H1 revenue growth at 10% as the Group demonstrates continued trading momentum Strengthening our position as the UK’s No. 1 retailer for bathroom products Shipping cost and foreign exchange tailwinds aids gross profit and margin progression Efficiency gains in H1 marketing act
Slide 4: Our investment case
Our investment case The market leader ina large and growing market Robust financials - track record of growth, profitability and attractive cash generation Disrupting a large and traditional industry Aclear market leadership position Significant market share gains since IPO Intelligent and now #1 re
Slide 5: FY23 Half Year Results
FY23 HALF YEAR RESULTS Vv victorian plumbing.ou
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS £147m Revenue of £146.8m (H1 2022: £133.9m) delivering a growth rate of +10% for H1 46% Gross profit increased to £66.8m (H1 2022: £58.5m) with gross profit margin ° increasing by 2ppt to 46% (H1 2022: 44%) £9 om Adjusted EBITDA growth of +48% to £9.9m (H1 2022: £6.7m) with adju
Slide 7: Operational Highlights
OPERATIONAL HIGHLIGHTS 482k _ Totalorders of 482,000 up 6% (H1 2022: 453,000) £305 Average order value up 3% to £305 (H1 2022: £296) 28% Marketing spend as a percentage of revenue decreased to 28% (H1 2022: 30%) 2 ° Trade revenue grew by 20% to £29.6m (H1 2022: £24.6m), representing 20% of O Yo tota
Slide 8: Income Statement
INCOME STATEMENT Strong H1 with revenue growth, improved margin performance and efficiency in marketing spend resulting in Adjusted EBITDA +48% YoY Income statement (£m) H1FY23, H1FY22 YoY % Revenue 146.8 133.9 10% Cost of sale (80.0) (75.4) (6%) Gross profit 66.8 58.5 14% Marketing costs (41.7) (40
Slide 9: Revenue
REVENUE Revenue (£m) en 146.8 140.7 H1FY21 H1FY23, victorian plumbing.ou Total orders (O00) vorrei om 486 453 HIFY21 H1FY22 H1FY23 Average order value (£) YoY% (4%) (2% H1FY21 H1FY22 H1FY23, Active customers (‘O00) Yor% 3) oo - _ | Ey HIFY21 HIFY22 HIFY23
Slide 10: Gross Profit
GROSS PROFIT Gross profit (£m) and Gross profit margin (%) YoY% 69% (15%) 14% ce “a & H1FY21 H1FY22 H1FY23 ™Gross profit victorian plumbing.ou % of revenue - own brand and 3" party brands 24% 25% 24% 76% 75% 76% H1FY21 H1FY22 H1FY23 m= Own brand = Third party Gross profit - own brand margin % YoY% —
Slide 11: Underlying Costs
U N DE RLYI NG COSTS Marketing as a % of revenue Underlying costs (£m) veces gg tee 27% Adi fo YoY% 10%) a HIFY21 H1FY22 H1 FY23 CAC - Marketing cost per order placed (£) 9.4 -—O@ ©& @ - Se | | =| HIFY21 H1FY22 H1FY23 YoY% H1FY23 Vv People - ongoing pay inflation and an increase in FTEs in the wareh
Slide 12: Cash Flow Statement
CASH FLOW STATEMENT Cash flow statement (£m) H1FY23 HIFY22 Adjusted EBITDA 9.9 67 Changes in working capital (1.3) (3.2) Cash gen. from ops. before exceptionals 8.6 3.5 Cash flows from exceptionals (0.1) (0.1) Cash generated from operating activities 8.5 3.4 Tax paid (2.1) (0.2) Net cash generated f
Slide 13: Capital Allocation
CAPITAL ALLOCATION Victorian Plumbing generates significant operating cashflows y, (— ) . we Most growth Group intends to Underlying priority is in — Where we have . opportunities do not adopt a dividend F to reinvest into the a i a. excess cash, we will , require significant policy aiming to . busi
Slide 14: 14
14
Slide 15: We Are the Overall Market Leader
WE ARE THE OVERALL MARKET LEADER Market share by revenue” Brand awareness") 15% 1% 7% 58% 64% 63% 64% = a 2015 2017 2019 2020 2021 aoe == _— — ® Victorian Plumbing Market share of bathrooms by revenue?) Trustpilot rating(*) roo 1 etopet Epp s2ppt ppt s2ppt_ Spt *3ppt i} 19% ! 18% 18% 2 i ! 8 I i} 8
Slide 16: Victorian Plumbing Competitor
Victorian Competitor Plumbing A 16
Slide 17: Further Development of Bespoke Technology
FURTHER DEVELOPMENT OF BESPOKE TECHNOLOGY PLATFORM UNDERPINS FUTURE GROWTH Technology platform a Successful migration and launch of re- fe] platformed website without any issues or downtime a New site is highly scalable and significantly faster, supporting improved conversion rates a Improved functi
Slide 18: Progress in Key Strategic Areas
PROGRESS IN KEY STRATEGIC AREAS Trade VY Competitive discounts for trade consumers alongside dedicated account management encourages a high repeat rate amongst our trade customers (H1 FY22: 86%, H1 FY23: 88%) V Increase in range of smaller plumbing parts to become a one-stop shop for trade Trade rev
Slide 19: New Distribution Centre for Future Growth
NEW DISTRIBUTION CENTRE FOR FUTURE GROWTH victorian plumbing.ou Y New 20-year lease for a 544,000 sq. ft purpose-built DC will support fulfilment of medium-term growth ambitions Estimated to be operational by H2 2024 c.£26m of capex spend (pre-tax) over the next 18 months (£7m in H2 23 / £19m in FY
Slide 20: Our ESG Focus
OUR ESG FOCUS We are progressing on our ESG journey with a continued focus on three core strategic areas Environmental sustainability Y We reported our scope 1 and scope 2 emissions in our annual report with a small increase due to a full year of operating out of a larger warehouse space Y Scope 3 e
Slide 21: 21
21
Slide 22: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK Continued trading momentum ¥ Consumer demand in April and the early part of May remained robust, with order volume led growth and continued increase in our market share ¥ Gross margin continues to improve as the tailwinds from shipping and foreign exchange begin to cycle
Slide 23: Q&A
Q&A plumbing.co.ux
Slide 24: Disclaimer
DISCLAIMER 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 opinions). Any statement in this presentation that is not a statement of histori
Slide 25: Appendix
APPENDIX
Slide 26: Milestone events
Listed 24th in The Sunday Times Fast Track 1002 – fastest Tech Hub opened growing private Operations move to Listed 16th in The in Manchester Skelmersdale companies Sunday Times Fast Warehouse Track 1001 – fastest 3 million Over 175k growing private orders(3) Trustpilot reviews companies New HQ open
Slide 27: Our Strategy
OUR STRATEGY We think about our strategy with reference to 3 horizons Horizon1 Core B2C v Customer acquisition, new product development and innovation v Further market share gains, ongoing competitor weakness v Increase in addressable market as online penetration continues its upward shift v Opportu
Slide 28: Online penetration and market growth
1.4 c.1.4 CAGR 2022-2027: 0.3% Acceleration due to 28 Source: Euromonitor, Mintel Note: (1) Penetration defined as e-commerce share % of total sales (value)
Slide 29: Online specialists are taking market share
ONLINE SPECIALISTS ARE TAKING MARKET SHARE, WITH VICTORIAN PLUMBING TAKING AN OUTSIZED SHARE Retail sales by channel CcY2015 cy2019 cyY2021 victorian victorian lumbing.oux plumbing.ou . . p Se victorian plumbing.ou 3% N% 19% Source: Mintel victorian plumbing.ou
Slide 30: Victorian Plumbing is the online market leader
VICTORIAN PLUMBING IS THE ONLINE MARKET LEADER Rapid market share expansion to become No. 1 online specialist bathroom brand and now also the UK’s No. 1 retailer for bathroom products across both online and offline channels Market share of bathrooms by revenue!) (2015 versus 2021) i | | sis2ppt | -0
Slide 31: One-stop shop for a customer's bathroom needs
ONE-STOP SHOP FOR A CUSTOMER’S BATHROOM NEEDS Bathroom Furniture | Shower Enclosures Showers | FY22 Revenue by product category ee ee se a ~3,500 sius 52 sranas ~1,900 suus 35 branas ~2,100 swus 39 eran Bathroom Tiles Basins Cutis le Bathroom Hi Bathroom Suit: Bathroom Accessories Baths Taps Toilets
Slide 32: Strong stable of own & third party brands
STRONG STABLE OF OWN & THIRD PARTY BRANDS Own brand gross margin significantly higher than third party brands HY23 revenue split Selected own brands >25 brands TURIN, are720 CHATSWORTH victorian Stonehouse Studio plumbing. couk Selected third party brands >100 brands mira eritace = BRISTAN BATHROOMS
Slide 33: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Summary Statement of financial position (£m) H1FY23. HIFY22 FY22 Intangible assets 3B) 31 3.3 PPE & right of use assets 5.4 65 338) Other non-current assets 03 - 0.8 Total non-current assets 9.2 9.6 10.0 Inventories 36.0 Son) 33.9 Trade and other receivables 9.2 44 Sy
Slide 34: Slide 34
Victorian Plumbing Group — H1 2023 Earnings Presentation on 6ix