Investor Presentation 26 November 2024
Results for H1 FY2025
Revenue & Earnings
REVENUE1
£568.8m
(-7.5% LFL variance)2
H1 FY24 £624.6m
PRE-TAX PROFIT1
£(13.6)m
H1 FY24 £31.5m
EBITDA1
£50.2m
(-45.0% LFL variance)2
H1 FY24 £92.7m
NET FREE CASH
FLOW/SHARE3
£0.28
H1 FY24 £0.48
EBITDA MARGIN1
8.8%
H1 FY24 14.8%
LEVERAGE4
6.2x
H1 FY24 3.9x
Note
- Revenue, EBITDA, EBIT and PBT shown before exceptional and non-underlying items (continuing operations)
- LFL variance calculated on a constant currency basis, without adjusting for acquisitions
- Cash flow per share based on underlying operating cash flow before interest, tax and exceptional items, and current number of shares outstanding (non-diluted)
- Applying our lending banks' measure of financial leverage (adjusted net debt / EBITDA), adjusting to take into account the full annual contribution from acquisitions and consistent translational FX
1
Table of contents
1 Executive Summary
- Financial Report
- Operational Overview
4 Outlook
5 Appendices:
Shareholder Register
2
Executive
Summary
3
Executive summary
- Soft demand due to near-term macroeconomic conditions, but fundamental sectoral drivers sustain long-term, steady growth in a global flooring market believed to be worth $200 billion and growth over the last 25 years of c.3% per annum.
- Victoria's focus is on efficiency gains and market share growth via:
- Complete integration of recent acquisitions,
- Forensic examination of every expense item for savings.
Well positioned for the demand recovery with lower fixed costs, higher operational gearing, and increased market share.
- Net operating cash flow before interest, tax and exceptional items was £31.7 million.
- Importantly, after three consecutive years of cash being absorbed in working capital, there was a decrease of £2.1 million in H1 FY2025. This must - and will - continue to improve with specific plans being executed by all managers.
- Victoria continued to maintain a strong liquidity position and the Group finished the period with cash and undrawn credit lines in excess of £200 million. During the year the Company has completed the sale of a property in Belgium for €39.7 million and (post the H1 balance sheet date) realised €36.8 million from the sale of Graniser, which reduced leverage by 0.5x.
- For the five year period FY2015-2019, the Group averaged cash conversion of EBITDA to Net Free Cash Flow of 55%*, which the Board believes is a sustainable, long-term ratio and one management is focused on returning to in the near-term..
- Cash generated afterreplacement capex, interest, and tax as a percentage of EBITDA
4
Financial Report
5
Financial Report
Segmental performance
H1 FY2025 | H1 FY2024 | |||||||||||
Underlying P&L | UK & Europe | UK & Europe | ||||||||||
(Continuing | UK & Europe | Australia | North | Central costs | TOTAL | UK & Europe | Australia | North | Central costs | TOTAL | ||
Operations) | - soft flooring | - ceramic | America | - soft flooring | - ceramic | America | ||||||
tiles | tiles | |||||||||||
£m | ||||||||||||
Volumes (m sqm) | 60.3 | 17.4 | 11.4 | 3.4 | - | 92.6 | 61.1 | 22.7 | 11.3 | 3.5 | - | 94.2 |
Revenue | 284.8 | 151.4 | 54.7 | 77.9 | - | 568.8 | 318.6 | 166.5 | 54.0 | 85.5 | - | 624.6 |
% growth | (10.6)% | (9.1)% | 1.3% | (8.9)% | n/a | (8.9)% | ||||||
Gross profit | 78.6 | 45.6 | 18.3 | 37.2 | - | 179.7 | 101.4 | 63.3 | 17.1 | 41.1 | - | 222.9 |
% margin | 27.6% | 30.1% | 33.5% | 47.8% | - | 31.6% | 31.8% | 38.0% | 31.6% | 48.1% | - | 35.7% |
Underlying EBITDA1 | 25.5 | 19.5 | 7.2 | 2.4 | (4.4) | 50.2 | 43.2 | 36.1 | 6.9 | 9.6 | (3.0) | 92.7 |
% margin | 9.0% | 12.9% | 13.2% | 3.1% | - | 8.8% | 13.6% | 21.7% | 12.8% | 11.2% | - | 14.8% |
Underlying EBIT1 | 2.7 | 5.8 | 4.5 | (0.5) | (4.8) | 7.7 | 20.7 | 22.8 | 4.4 | 7.2 | (3.3) | 51.8 |
% margin | 0.9% | 3.8% | 8.2% | (0.6)% | - | 1.4% | 6.5% | 13.7% | 8.1% | 8.5% | - | 8.3% |
Note
1. Underlying figures are presented before exceptional and non-underlying items
6
Financial Report
Non-underlying items
H1 FY2025 | H1 FY2024 | |||
Non-underlying items, £m | Acquisition / disposal | Other | TOTAL | TOTAL |
related | ||||
Exceptional items | ||||
Acquisition and disposal related costs | (0.3) | (0.3) | (0.7) | |
Reorganisation costs (cash) | (1.1) | (1.1) | (7.2) | |
Reorganisation costs (non-cash) | 0.8 | 0.8 | - | |
Gain on disposal of fixed assets and investments | 2.9 | 2.9 | - | |
Loss on disposal of subsidiaries | (6.8) | (6.8) | - | |
Intangible and tangible asset impairment | (120.0) | (120.0) | - | |
(4.2) | (120.3) | (124.5) | (7.9) | |
Other non-underlying operating items | ||||
Acquisition-related performance plans | 0.1 | 0.1 | (5.3) | |
Non-cash share incentive plan charge | (1.8) | (1.8) | (1.2) | |
Amortisation of acquired intangibles | (18.4) | (18.4) | (19.4) | |
Depreciation of fair value uplift to acquisition property | (3.3) | (3.3) | (2.7) | |
Hyperinflation accounting items | (0.6) | (0.6) | 3.5 | |
(21.6) | (2.4) | (24.0) | (25.1) | |
Finance costs | ||||
Preferred equity - host instrument cost | (10.4) | (10.4) | (14.0) | |
Preferred equity - warrants | 7.1 | 7.1 | - | |
Amortisation inception derivative | 0.6 | 0.6 | 0.6 | |
Unwinding of present value of deferred and contingent earn-out liabilities / fair value adjustment | 0.7 | 0.7 | (0.3) | |
Mark to market adjustments on foreign exchange forward contracts | (2.0) | (2.0) | 1.4 | |
Translation difference on foreign currency loans | (1.5) | (1.5) | (3.3) | |
Hyperinflation - finance portion | (0.2) | (0.2) | (1.6) | |
- | (5.7) | (5.7) | (17.2) | |
Cash items |
7
Financial Report
Operational cash generation
£m | H1 FY2025 H1 FY2024 | Full year | |
FY2024 | |||
Revenue | 570 | 626 | 1,234 |
% growth | (9.0)% | (13.9)% | (11.9)% |
Underlying EBITDA | 50.2 | 92.7 | 159.0 |
% margin | 8.8% | 14.8% | 12.9% |
Payments under right-of-use lease obligations | (18.9) | (16.1) | (34.8) |
Non-cash items | (2.2) | (1.1) | (3.4) |
Underlying movement in working capital | 2.1 | (20.7) | (10.9) |
Operating cash flow before interest, tax and exceptional | 31.7 | 54.8 | 106.4 |
items | |||
% EBITDA conversion1 | 92% | 70% | 85% |
Interest paid | (17.1) | (13.1) | (29.7) |
Income taxes received / (paid) | - | 1.0 | (2.3) |
Capital expenditure - replacement / maintenance net of | (27.3) | (13.6) | (42.0) |
disposals | |||
Free cash flow before exceptional items | (12.7) | 29.1 | 35.9 |
% EBITDA conversion1 | (37)% | 37% | 28% |
Expansionary and synergy capex | (5.8) | (12.8) | (19.2) |
Surplus real estate asset disposal proceeds | - | - | 27.9 |
Proceeds on disposal of real estate via sale and leaseback | 30.4 | - | - |
Deferred consideration and earn-out payments | (2.9) | (10.5) | (14.9) |
Exceptional reorganisation cash items | (3.5) | (19.2) | (31.1) |
Exceptional M&A cash items | (0.3) | (0.7) | (1.0) |
Share buy back | (1.1) | - | (3.2) |
Proceeds on disposal of business, net of cash | 1.2 | - | - |
Dividends | - | - | - |
Note
1. Conversion against continuing underlying EBITDA (pre-IFRS 16)
8
Financial Report
Movement in net debt
Bridge of opening to closing statutory net debt
657.8m | 12.7m | 1.1m | 9.3m | 3.2m | 15.2m | 8.1m | 658.2m | |||||||||||||
(17.6m) | ||||||||||||||||||||
(31.6m) | ||||||||||||||||||||
Opening | Free cash | Buy back of | Expansionary | Sale & leaseback | Acquisition | Discontinued | Movement in | Translation | Closing net debt |
net debt | flow before | ordinary shares | capex and | and subsidiary | and disposal | operations | factoring | differences on | |
exceptional | cost for | proceeds | related | foreign | |||||
items | synergy | expenditure | currency cash | ||||||
intiatives | and loans |
Note
1. Net debt shown before right-of-use lease liabilities, bond premia and prepaid finance costs, consistent with the measure used by our lending banks
9