Supreme Plc · LSE:SUP
Supreme — H1 FY24 Earnings Presentation
26 slides from Supreme's earnings presentation, December 2023
Slide 1: Results for the six months ended 30 September 2023
Results for the six months ended 30 September 2023
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Supreme plc (“Supreme” these presentation slides to or in any such jurisdiction. Past performance is no guide to future performance. If you are or the “Company”) and the information contained herein is considering engaging in investment activity, you
Slide 3: Meet the team
Meet the team SANDY CHADHA SUZANNE SMITH ANDREW BEAUMONT DAVID NEILSON MIKE HOLLIDAY JAMES WILLIAMS • The Executive Team is supported by 4 Divisional (product) leaders • Each has deep sector and industry knowledge and experience • Wholly responsible for their own category • 100 years’ service for Su
Slide 4: Supreme at a glance
Supreme at a glance • Supreme is a manufacturer, licensee, brand owner and distributor of branded, ‘value’ staple consumer goods sold principally to UK high street discount retailers and supermarkets • Our products are high-repeat, non-discretionary purchases and principally in the following categor
Slide 5: Vertically integrated platform
Vertically integrated platform Offers a seamless route to market for both owned and other leading brands NEW • Both developed in-house by PRODUCTS Supreme alongside new third-party launches • Own brand and licensed brands BRANDS • Distribution agreements • Own brands plus private label brand Marketi
Slide 6: Key investment highlights
Key investment highlights Leveraging our vertically integrated platform to take fast-moving consumer brands to our extensive customer network Diverse Compelling product & Proven and customer customer High quality successful offering with portfolio management M&A strategy emphasis on Strong value We
Slide 7: Financial highlights
● Revenue up £40.5m (63% growth) to £105.1m with ElfBar contributing £26.4m to this growth ● 32% growth in core vaping activities to £42.1m Financial highlights revenue (H1 FY23 £31.8 million) ● Adjusted EBITDA1 up 88% to £15.2m (H1 FY23: £8.1m) ● Pre-tax profit up 179% to £12.3m (H1 FY23: £4.4m) ●
Slide 8: Operational summary
Operational summary ● Completed on the fit-out of the Ark warehouse – on time and on budget – supporting organic and acquisitive growth ● Rolled out and significantly scaled the new Elfbar distribution opportunity ● Integrated the FY23 acquisitions into the Group’s core manufacturing hub and continu
Slide 9: Outlook
Outlook ● The second half of FY24 has begun well; with continued growth reported across all areas of the business ● As a result, FY24 Adjusted EBITDA1 is now expected to be £32–35m around £4.5m higher than the previously-issued company guidance, 15% profit upgrade ● £1.5m incremental Adjusted EBITDA
Slide 10: Vaping: 'Outstanding performance'
Vaping ‘Outstanding performance' • Consumer demand for both reusable and disposable products strong £42.1m 32% • Manufacturing capacity increased at revenues sales growth Manchester site by 25% to enable four sites 40% to be consolidated into one and to allow for of group revenue future growth (66%
Slide 11: Branded Distribution: 'Delivering significant growth'
Branded Distribution ‘Delivering significant • Rolled out and significantly scaled the new growth’ Elfbar distribution opportunity £30.6m £3.4m • Completed new customer onboarding and revenue gross profit extensive product testing £26.4m revenue from ElfBar & • Opportunity illustrates Supreme’s agil
Slide 12: The UK Government is looking for balanced measures
The UK Government is looking for balanced measures Recent communication directly from the Government We are wasting no time in delivering on our promise to create a smoke-free generation We will introduce legislation for a smoke-free generation We will restrict the marketing and sale of e-cigarettes
Slide 13: Supreme supportive of legislative change
Supreme supportive of legislative change • Supreme’s aim has always been to provide credible and safer alternatives for nicotine consumption • We do not design, market or sell vaping products to underage vapers • Supreme welcomes legislative action that will effectively combat underage vaping • We b
Slide 14: Supreme has already announced a number of proactive measures
Supreme has already announced a number of proactive measures Use of plain packaging only Discontinue all bright-coloured disposables Age-appropriate flavours only (e.g. “Peach Dream” to become “Peach”) To trade only with retailers with robust age verification protocols Responsible location of produc
Slide 15: Sports Nutrition & Wellness: 'Gaining market share'
Sports Nutrition & Wellness • Gross margin grew to 27% ‘Gaining market share' • Raw material pricing now stabilising alongside efficiencies gained across inhouse manufacturing +17% 18% → 27% increase in gross margin • Sci-MX benefitting from strategic rebrand and new revenue increase brand ambassado
Slide 16: Lighting: 'Continued recovery'
Lighting • Lighting delivered a highly credible ‘Continued recovery' performance, growing H1 revenue by 21% • Delivered sustained progress since £7.5m 38% overstocking challenges and temporary revenue gross profit margin slow-down in consumer spending • Customer relationships and listings remain str
Slide 17: Batteries: 'Stable core product set'
Batteries ‘Stable core product set’ • Solid performance across H1 £15.9m 15% • Remains a cash-generative dependable “door- revenue of group revenue opener” for cross-sell opportunities 13% gross profit • Supreme responsible for 30% of all margin UK battery sales £39.5m £36.6m £36.4m £34.9m £34.4m £3
Slide 18: Financial summary
Financial summary 18
Slide 19: Income statement
Income statement H1 FY24 H1 FY23 % change £m £m • Revenue +63% to £105.1m (from a Revenue 105.1 64.6 +63% combination of new opportunities, M&A Gross profit 28.5 18.2 +57% and organic growth) Gross profit margin 27% 28% -1% • Gross profit +57% to £28.5m (via Admin expenses 13.3 10.1 +32% scaled manu
Slide 20: Segmental breakdown
Segmental breakdown H1 FY24 H1 FY23 % change • The Vaping division up £10.3m (+32%) revenue £m £m due to: Revenue • FY 2023 M&A Batteries 15.9 15.7 +1% Lighting 7.5 6.2 +21% • growth on core 10ml distribution Vaping 42.1 31.8 +32% • increased volumes of HMPPS Sports Nutrition & Wellness 8.9 7.6 +17%
Slide 21: Revenue bridge
; SUPREME Revenue bridge £m £120.0 £3.8 £4.9 | £100.0 £5.4 | £26.4 | £80.0 £64.6 £60.0 £40.0 £20.0 £0.0 H1 FY23 Elfbar distribution FY23 M&A Vaping Other divisions H1 FY24 21
Slide 22: Gross profit bridge
SUPREME Gross profit bridge £m £30.0 £2.6 £28.5 £20.0 £18.2 £15.0 £10.0 £5.0 £0.0 H1 FY23 Elfbar distribution Better gross margins FY23 M&A Sales volume growth H1 FY24 22
Slide 23: Balance sheet
Balance sheet H1 H1 FY24 FY23 FY23 • Further strengthening of the balance sheet in £m £m £m the period Fixed Assets Property, Plant & Equipment 21.8 5.3 20.8 • Investment in working capital to support Intangibles incl. goodwill 14.4 14.1 15.3 Elfbar distribution TOTAL 36.2 19.4 36.1 Working capital
Slide 24: Cash flow statement
Cash flow statement H1 H1 FY24 FY23 FY23 • The Group reported a net cash outflow of £m £m £m £2.7m Adjusted EBITDA 15.2 8.1 19.4 Movement in working capital – Elf only (16.4) - - • This included an investment of £16.4m in Movement in working capital 4.6 (0.5) 2.6 working capital to service the ElfBa
Slide 25: Summary
Summary ● H2 FY24 has begun well; with continued growth reported across all areas of the business ● As a result, FY24 Adjusted EBITDA1 is now expected to be £32–35m around £4.5m higher than the previously-issued company guidance, 15% profit upgrade ● £1.5m incremental Adjusted EBITDA1 arising from t
Slide 26: Supreme plc
SUPREME PLC