Victoria Plc · LSE:VCP
Victoria — H1 FY2023 Earnings Presentation
27 slides from Victoria's earnings presentation, Nov 29, 2022
Slide 1: Interim Results Investor Presentation
29 NOVEMBER 2022 “creating wealth for shareholders” INTERIM RESULTS INVESTOR PRESENTATION H1 ended 1 October 2022
Slide 2: Disclaimer
Disclaimer • The information contained in this confidential document (“Presentation”) has been prepared by Victoria PLC (the “Company”). It has not been verified by the Company and is subject to material updating, revision and further amendment. This Presentation has not been approved by an authoris
Slide 3: Table of contents
Table of contents 01 Executive Summary - Inflation 02 Key drivers - Demand - Cash generation 03 H1 FY2023 Financial Report – Record revenues and earnings 04 Operational Overview – Driving revenues and margins 2 05 Appendices
Slide 4: FY2023 H1 Executive Summary
FY2023 H1 Executive Summary • Inflationary pressures successfully managed • Revenue and earnings growth maintained • Full year earnings expected to be in line with market consensus • £100 million cash generation after exceptional costs expected in H2 3
Slide 5: Executive Summary: Record Revenue & Earnings
EXECUTIVE SUMMARY Record Revenue & Earnings REVENUE EBITDA1 EBIT1 £776.1m £100.1m £61.1m H1 FY22: £489.0m H1 FY22: £84.5m H1 FY22: £58.6m +59% +19% +4% PRE-TAX PROFIT CASH FLOW PER SHARE2 LEVERAGE3 £53.1m £0.19 3.4x Net Debt/EBITDA H1 FY22: £2.9m H1 FY22: £0.52 H1 FY22: 3.3x -63% Note 1. EBITDA and
Slide 6: Key drivers
Key drivers • Inflation • Demand • Cash generation
Slide 7: Key drivers: Inflation
Key drivers: Inflation Inflation Margin Expansion • Calibrated price increases • Synergy Gains H1 prices increases limited to cash Consolidation of manufacturing capacity margin to protect market share Insourcing logistics. Future price increases calibrated to recover % margin Rationalisat
Slide 8: Key drivers: Demand
Key drivers: Demand Demand Demand continued • Flooring is a Global Core Industry • Low Operational Gearing Long-term positive, predictable, and 45% of costs (e.g. raw materials, consistent demand growth energy, transportation) are directly • Geographic diversification variable with revenue. Anot
Slide 9: Key drivers: Balance Sheet Strength & Cash Generation
Key drivers: Balance Sheet Strength & Cash Generation Financial Resilience Cash Generation • Cash + Undrawn Credit lines £100 million net positive cash flow in H2 >£250 million • Inventory levels normalised • Bond Financing £60+ million invested in inventory to Long-Dated 1. Protect raw materi
Slide 10: H1 FY2023 Financial Report
H1 FY2023 Financial Report ICTORIA PLC
Slide 11: Segmental performance
H1 FY2023 FINANCIAL REPORT Segmental performance H1 FY2023 H1 FY2022 UK & UK & UK & UK & Europe – Europe – North Central Europe – Europe – North Central Continuing operations Australia TOTAL Australia TOTAL Soft Ceramic America costs Soft Ceramic America costs £m Flooring Tiles Flooring Tiles Underl
Slide 12: Group underlying EBITDA margin bridge from full-year FY2022
H1 FY2023 FINANCIAL REPORT Group – underlying EBITDA margin bridge from full-year FY2022 Unprecedented cost inflation during the period was, to the extent not mitigated by operational measures, passed onto customers. However this was done without any additional mark-up. Hence whilst absolute profits
Slide 13: Non-underlying items
H1 FY2023 FINANCIAL REPORT Non-underlying items H1 FY2023 3 H1 FY2022 Acquisition Other TOTAL TOTAL Non-underlying items, £m related Exceptional items Acquisition and disposal related costs (1.9) (1.9) (4.4) Reorganisation costs (4.3) (4.3) (1.2) Negative goodwill arising on acquisition 61.5 61.5 (1
Slide 14: Cash Flow – temporary inventory increase to protect market share
H1 FY2023 FINANCIAL REPORT Cash Flow – temporary inventory increase to protect market share Full year H1 FY2023 H1 FY2022 £m FY2022 Revenue 776 489 1,020 % growth 58.7% 60.1% 54.1% Underlying EBITDA 100.1 84.5 162.8 % margin 13.0% 17.3% 16.0% Payments under right-of-use lease obligations (13.5) (8.9
Slide 15: Net debt bridge
H1 FY2023 FINANCIAL REPORT Net debt bridge 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 14
Slide 16: Overview of net debt – stable leverage
H1 FY2023 FINANCIAL REPORT Overview of net debt – stable leverage H1 FY23 H1 FY22 YE FY22 £m Net cash and cash equivalents 73.5 167.9 258.0 Senior secured debt (at par) (659.4) (642.0) (631.6) Unsecured loans and finance leases (pre- IFRS16) (65.6) (45.3) (33.0) Net debt (before obligations under ri
Slide 17: Operational overview
Operational overview • Focus on operations and acquisition integration • Significant synergies will drive material earnings and cashflow growth over the next 2 years 16
Slide 18: UK & Europe Soft Flooring – focus on integration and productivity
UK & Europe Soft Flooring – focus on integration and productivity Underlying metrics H1 FY23 H1 FY22 Growth Revenue £372.0 million £214.0 million +73.8% EBITDA £37.2 million £38.6 million -3.5% EBITDA margin 10.0% 18.0% -802bps EBIT £15.7 million £27.0 million -41.7% EBIT margin 4.2% 12.6% -838bps C
Slide 19: UK & Europe Soft Flooring – underlying EBITDA margin bridge
OPERATIONAL OVERVIEW UK & Europe Soft Flooring – underlying EBITDA margin bridge from full-year FY2022 Note 1. Calculation of cost inflation pass-through within LFL margin analysis based on average cost and price inflation, using volume growth for key product categories. Overall cost inflation is as
Slide 20: UK & Europe Ceramic Tiles – record revenues and profits
UK & Europe Ceramic Tiles – record revenues and profits Underlying metrics H1 FY23 H1 FY22 Growth Revenue £254.4 million £182.5 million +39.4% EBITDA £51.0 million £37.4 million +36.1% EBITDA margin 20.0% 20.5% -48bps EBIT £37.5 million £25.9 million +44.5% EBIT margin 14.7% 14.2% +52bps Higher ener
Slide 21: UK & Europe Ceramic Tiles – underlying EBITDA margin bridge
OPERATIONAL OVERVIEW UK & Europe Ceramic Tiles – underlying EBITDA margin bridge from full-year FY2022 Note 1. Calculation of cost inflation pass-through within LFL margin analysis based on average cost and price inflation, using volume growth for key product categories. Overall cost inflation is as
Slide 22: Australia – strong organic revenue and EBITDA growth
Australia – strong organic revenue and EBITDA growth Underlying metrics H1 FY23 H1 FY22 Growth Revenue £64.2 million £53.4 million +20.2% EBITDA £8.2 million £7.1 million +15.8% EBITDA margin 12.8% 13.3% -49bps EBIT £5.6 million £4.8 million +15.6% EBIT margin 8.8% 9.1% -35bps • Volumes and profitab
Slide 23: Australia – underlying EBITDA margin bridge
OPERATIONAL OVERVIEW Australia – underlying EBITDA margin bridge from full-year FY2022 Note 1. Calculation of cost inflation pass-through within LFL margin analysis based on average cost and price inflation, using volume growth for key product categories. Overall cost inflation is assessed using an
Slide 24: North America – +13% LFL revenue growth and efficiency gains
North America – +13% LFL revenue growth and efficiency gains Underlying metrics H1 FY23 H1 FY22 Growth Revenue £80.9 million £39.1 million +106.6% EBITDA £4.9 million £2.6 million +88.6% EBITDA margin 6.0% 6.6% -57bps EBIT £3.7 million £2.1 million +75.7% EBIT margin 4.6% 5.4% -81bps Distribution •
Slide 25: North America – underlying EBITDA margin bridge
OPERATIONAL OVERVIEW North America – underlying EBITDA margin bridge from full-year FY2022 Note 1. Calculation of cost inflation pass-through within LFL margin analysis based on average cost and price inflation, using volume growth for key product categories. Overall cost inflation is assessed using
Slide 26: Appendix – Shareholders
Appendix — Shareholders VICTORIA PLC
Slide 27: Shareholder register
Shareholder register Rank Investor Name Holding as of October 2022 % IC 1. Spruce House Investment Mgt 23,545,000 20.5 2. Mr Geoff Wilding 22,438,500 19.5 3. Vulcan Value Partners (Birmingham AL) 12,792,708 11.1 4. KED Victoria Investments Vulcan Value Partners 12,500,000 10.9 5. Capital Research Gl