Wickes Group Plc · LSE:WIX
Wickes — FY2023 Earnings Presentation
25 slides from Wickes's earnings presentation, Mar 19, 2024
Slide 1: 2023 Full Year Results
2023 Full Year Results 19 March 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 22 Full Year Results 2023 3
Slide 4: Robust sales performance with PBT ahead of expectations
Robust sales performance with PBT ahead of expectations • Balanced business model delivers robust sales performance in a challenging market • Continued successful investment in proven growth levers ○ TradePro sales growth +11% ○ Record customer satisfaction scores ○ Wickes Lifestyle Kitchens relaunc
Slide 5: Financial Review
Financial Review Mark George
Slide 6: Good performance in challenging market conditions
Good performance in challenging market conditions Strong balance sheet Revenue £1,554m Gross margin with £98m year end cash Group LFL (0.3)% +0.2ppts £155m average cash Retail1 LFL 0.1% FY dividend 10.9p Adjusted PBT 2 Design & Installation £52.0m £10.1m of buyback LFL (1.7)% completed3 All figures a
Slide 7: Solid profit performance supported by strong cost control
Solid profit performance supported by strong cost control £m1 FY 2022 FY 2023 Change % • Revenue and LFL sales broadly in line with prior year Revenue 1,559.0 1,553.8 (0.3)% LFL, % 3.5% (0.3)% N/A • Gross margin +19bps as a result of careful management of price & promotions and Gross profit 567.1 568.
Slide 8: Balanced business model delivers resilient LFL sales
Balanced business model delivers resilient LFL sales Retail (Trade & DIY) • Three consecutive quarters of Retail LFL sales growth RETAIL DESIGN & INSTALLATION GROUP • Positive volume growth in H2 as inflation turned to mild deflation • Record TradePro customer growth with 881k members at year end; Tra
Slide 9: Adjusted PBT £52m after SaaS impact
Adjusted PBT £52m after SaaS impact • Trading margin down YoY, particularly in Design & Installation, which experienced softening demand and Revenue & Gross Margin had higher interest costs for consumer In line with FY guidance; Utilities less of an impact credit • Strong cost control and productivi
Slide 10: Cash ahead of guidance; £37.5m returned to shareholders
Cash ahead of guidance; £37.5m returned to shareholders • Strong cost and stock control delivers net cash at YE of £97.5m, after £10.1m of share buyback • Average cash through the year of £154.9m, reflecting normal working capital cycle • Working capital benefit from reduction in stock • Capex broadly
Slide 11: Outlook and guidance for 2024
Outlook and guidance for 2024 Outlook • During the first 11 weeks, Retail sales in line with last year • Challenging environment continues for larger Design & Installation purchases • Well placed to continue to outperform the market • Strong cost control & productivity will not offset all cost headwi
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: Strongest ever growth in TradePro membership
Strongest ever growth in TradePro membership • TradePro sales +11% • Further improvements to TradePro app with new functionality ○ Digital receipts ○ Filter for pricing excl.VAT ○ Project planning functionality • Machine learning tool driving significant incremental revenues • Trade pipelines remain
Slide 15: Successful innovation in Design & Installation
Successful innovation in Design & Installation • Innovation in showroom, relaunched as Wickes Bespoke Kitchens with eight new ranges • Successful relaunch of our value range as Wickes Lifestyle Kitchens, with sales +24% in H2, driven by free design service1 Intelliga - a Wickes Bespoke Kitchen • Inv
Slide 16: Digital offer and more approachable brand have broadened our DIY appeal
Digital offer and more approachable brand have broadened our DIY appeal 1 • 17 range reviews to innovate and expand product ranges in key DIY customer segments, in particular smaller DIY projects • Introduced new energy efficient products • Over 1 in 4 customers are female1 • Extended range of digital
Slide 17: Good progress on new stores and refits
Good progress on new stores and refits • Three new stores ○ Chelmsford, Widnes and Torquay ○ Creating c. 90 new jobs • Refitted 11 stores into new format ○ Sales uplift on refitted stores +25% ○ ROCE on refitted stores >25% ○ >75% of estate now in new format • Added >36,000 sq.ft of fulfilment capacity i
Slide 18: Continued progress across key measures
Continued progress across key measures Customer satisfaction Market share Sales densities 18 Percentage of customers responding ‘excellent’ or ‘good’. Home delivery refers to customer deliveries fulfilled from stores
Slide 19: Great progress in our 'Built to Last' Responsible Business strategy
Great progress in our ‘Built to Last’ Responsible Business strategy ● 8 out of 10 colleagues fully engaged1 in the business ● Winner of ‘Large Organisation of the Year 2023’ at the Rainbow Honours People ● Supported c1,500 community projects, reaching c.500,000 people across our communities ● Achiev
Slide 20: Entry into energy-saving solutions with Solar Fast acquisition
Entry into energy-saving solutions with Solar Fast acquisition • Opportunity to expand our range of Design & Installation services beyond kitchens & bathrooms • Solar is a strongly growing market ○ UK market expected to be worth £1.5bn pa by 20281 ○ Highly fragmented market, no clear brand leader •
Slide 21: Conclusion
Conclusion • Balanced business model delivers robust sales performance in a challenging market • Strong cost management and productivity resulting in profit ahead of market expectations • Delivering attractive returns to shareholders • Comfortable with FY24 consensus • Continued successful investment
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix Lk
Slide 24: 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 25: 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