Victoria Plc · LSE:VCP
Victoria — FY2024 Earnings Presentation
25 slides from Victoria's earnings presentation, Jun 19, 2024
Slide 1: Investor Presentation 19 June 2024
Investor Presentation 19 June 2024 Preliminary Results for Year Ended 30 March 2024
Slide 2: Revenue & Earnings
Revenue & Earnings REVENUE1 EBITDA1 OPERATING MARGIN1 £1,256.5m £160.7m 12.8% FY23 £1,461.4m FY23 £196.0m FY23 £186.1m constant currency FY23 13.4% FY23 £1,414.7m constant currency PRE-TAX PROFIT1 NET FREE CASH LEVERAGE3 FLOW/SHARE2 £27.2m £0.92 4.4x FY23 £76.9m FY23 £1.36 FY23 3.4x Note 1. Revenue,
Slide 3: Table of contents
Table of contents 1 Executive Summary 2 FY2024 Financial Report - Segmental Performance - Non-underlying Items - Cash Generation - Net Debt 3 Operational Overview - UK & Europe Soft Flooring - UK & Europe Ceramics - Australia - North America 4 Outlook: - FY2024 bottom of the cycle? - Synergies - Inc
Slide 4: Executive Summary
Executive Summary EE VICTORIA PLC
Slide 5: Executive summary
Executive summary 1. A global flooring products group with a diverse range of brands and products • Victoria PLC is a 129-year-old global designer, manufacturer and distributor of flooring products including ceramic tiles, carpet, underlay, luxury vinyl tile (LVT), and artificial grass 2. Consistent
Slide 6: Executive summary
Executive summary 1. Softer demand (15-25%, depending upon the market, below 2019 levels) throughout FY2024 due to near-term macroeconomic conditions: i. Inflationary pressures impacting consumer discretionary spending ii. Pull-forward of demand into 2020 and 2021 during Covid-19 lockdowns 2. Howeve
Slide 7: FY2024 Financial Report
FY2024 Financial Report 6
Slide 8: Segmental performance
Executive summary Segmental performance FY2024 FY2023 UK & Europe UK & Europe UK & Europe North UK & Europe North – ceramic Australia Central costs TOTAL – ceramic Australia Central costs TOTAL Underlying P&L – soft flooring tiles America – soft flooring tiles America £m Volumes (m sqm) 132.4 43.6 2
Slide 9: Non-underlying items
Executive summary Non-underlying items FY2024 FY2023 Acquisition Non-underlying items, £m Other TOTAL TOTAL related Exceptional items Acquisition and disposal related costs (1.0) (1.0) (4.0) Reorganisation costs (20.1) (20.1) (44.4) Fixed asset impairment following acquisition - (47.5) Negative good
Slide 10: Cash generation
Executive summary Cash generation £m FY2024 FY2023 Revenue 1,256 1,461 % growth (14.0)% 43.2% Underlying EBITDA 160.7 196.0 % margin 12.8% 13.4% Payments under right-of-use lease obligations (35.6) (29.3) Non-cash items (3.5) (15.1) Underlying movement in working capital (15.2) 6.3 Operating cash fl
Slide 11: Net debt bridge
Executive summary 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 10
Slide 12: Net debt
Executive summary Net debt £m FY2024 FY2023 Net cash and cash equivalents 72.8 90.4 Senior secured debt (at par) (632.0) (660.2) Other loans and unsecured facilities (72.8) (87.5) Finance leases and hire purchase arrangements (pre-IFRS 16) (1.0) (1.0) Net debt (before obligations under right-of-use
Slide 13: Operational Overview
Operational Overview EE VICTORIA PLC
Slide 14: UK & Europe Soft Flooring – integration driving continued margin growth
UK & Europe Soft Flooring – integration driving continued margin growth and market outperformance FY24 FY23 Growth Volumes 132.4 million sqm 149.9 million sqm -11.7% Revenue £636.2 million £718.8 million -11.5%1 Underlying EBITDA £82.8 million £66.9 million +23.8% Underlying EBITDA margin 13.0% 9.3%
Slide 15: UK & Europe Ceramic Tiles – challenging macro-economic conditions
UK & Europe Ceramic Tiles – challenging macro-economic conditions FY24 FY23 Growth Volumes 43.6 million sqm 53.9 million sqm -19.0% Revenue £350.9 million £453.3 million -22.6% Underlying EBITDA £60.3 million £105.8 million -43.0% Underlying EBITDA margin 17.2% 23.3% -620bps Underlying EBIT £31.8 mi
Slide 16: Australia – stable margins despite demand softness
Australia – stable margins despite demand softness FY24 FY23 Growth Volumes 22.3 million sqm 23.3 million sqm -3.9% Revenue £106.1 million £120.9 million -12.2% Underlying EBITDA £13.4 million £15.3 million -12.3% Underlying EBITDA margin 12.7% 12.7% -bps Underlying EBIT £8.7 million £10.0million -1
Slide 17: North America – improved margins with further upside to come
North America – improved margins with further upside to come FY24 FY23 Growth Volumes 7.1 million sqm 6.1 million sqm 15.7% Revenue £163.3 million £168.4 million -3.1% Underlying EBITDA £11.8 million £9.3 million +27.4% Underlying EBITDA margin 7.3% 5.5% +170bps Underlying EBIT £6.8 million £6.0 mil
Slide 18: Outlook
Outlook - FY2024 bottom of the cycle? - £20+ million of synergies underpin financial outlook - Increasing free cash generation - Leverage ratio to fall 17
Slide 19: FY2024 Trough Earnings?
FY2024 Trough Earnings? Leading Indicators – UK construction outlook, consumer confidence, housing transaction outlook – improving 18
Slide 20: £20+ million of synergies from integration projects
£20+ million of synergies from integration projects Integration of Balta: three key projects: Integration of Graniser Ceramics There are two integration projects in progress at • Balta’s broadloom carpet manufacturing has Graniser: been relocated from Belgium to the Group’s UK • Investment in new pr
Slide 21: Increasing cash generation. How and why?
Increasing cash generation. How and why? Working Capital Management Integration Projects Complete Reduced exceptional costs Optimising SKU’s and improving inventory turn to generate €30 million cash • Redundancies payments • Restructuring costs Sale of Surplus & Non-core Assets. • £16.5 million in F
Slide 22: Leverage ratio to fall
Leverage ratio to fall Reason for the change in policy How? Victoria has for the last 10 years maintained its leverage Reducing the numerator at around 3-3.5x EBITDA – a policy that made sense to • Increasing operating cash flow from lower us given: capex and reorganisation costs • the stable nature
Slide 23: Shareholder Register
Shareholder Register 22
Slide 24: Shareholder register
Shareholder register Rank Investor Name Holding as of May 2024 % IC 1. Spruce House Investment Mgt 23,770,000 20.7 2. Mr Geoffrey Wilding 22,438,650 19.5 3. KED Victoria Investments 12,500,000 10.9 4. Vulcan Value Partners (Birmingham, AL) 9,258,346 8.2 5. Morgan Stanley Investment Mgt 6,534,039 5.8
Slide 25: Disclaimer
Disclaimer • The information contained in this confidential document (“Presentation”) has been prepared by Victoria PLC (the “Company”). The information in this Presenentation does not purport to be comprehensive and has not been verified by the Company and is subject to material updating, revision