Wickes Group Plc · LSE:WIX
Wickes — FY2022 Earnings Presentation
27 slides from Wickes's earnings presentation, Mar 23, 2023
Slide 1: 2022 Full Year Results
2022 Full Year Results Record sales and further market share gains 23 March 2023 Strictly Private & Confidential
Slide 2: Chief Executive David Wood
Chief Executive David Wood Lk
Slide 3: Agenda for today
Agenda for today Key Highlights 01 David Wood Page 4 Financial Review 02 Mark George Page 5 Business Update 03 David Wood Page 13 Q&A 04 David Wood & Mark George Page 26 Wickes 3 Full Year Results March 2023
Slide 4: Record sales and further market share gains
Record sales and further market share gains • Record full year sales and market share as we continue to show the benefits of our uniquely balanced model • Membership growth of our digital TradePro scheme accelerated by 18% in 2022, driving good Core sales performance • Strong recovery in DIFM deliver
Slide 5: Financial Review
Financial Review Mark George
Slide 6: Sales and profit well ahead of pre-Covid levels
Sales and profit well ahead of pre-Covid levels Revenue £1,559m, 70bp decline in gross Strong balance sheet up 3.5% LFL profit margin reflecting with cash of £99.5m limited cost price inflation pass IFRS 16 net debt reduced Core LFL (2.0)% through and strong Trade to £(591.8)m from £(618.7)m in DIFM LFL
Slide 7: Resilient profitability despite inflation and mix effects
Resilient profitability despite inflation and mix effects £m FY2022A FY2021A Change % • LFL sales growth positive driven by strength of Local Trade and DIFM Revenue 1,559.0 1,534.9 +1.6% • Core inflation of 13%, moderating as the year progressed, LFL (%) 3.5% 13.0% na with timber now in deflation Gross
Slide 8: Strong recovery in DIFM LFL sales, Core comps eased into the second half
Strong recovery in DIFM LFL sales, Core comps eased into the second half Core: H1 H2 ● LFL declined in H1 against very tough comparatives. With first half inflation of c15%, volumes were materially lower ● Core LFL recovered in H2, with another strong performance from Trade and some stabilisation in D
Slide 9: FY2022 profit performance reflects segmental movements and cost actions
FY2022 profit performance reflects segmental movements and cost actions ● Core contribution declined as a result of lower LFL and margin rate (TradePro mix and limited inflation pass through) ● DIFM contribution increased as a result of strong delivered sales recovery ● Cost savings exceeded inflation;
Slide 10: Operational cost base inflation in 2023
Operational cost base inflation in 2023 Operating cost breakdown, including ● Minimal inflation in fixed costs expected in 2023 distribution Current inflation by cost area ● Productivity gains will offset all cost inflation except energy ● Energy costs will rise in 2023 by c£10m None ● Continued investm
Slide 11: Net cash declines due to IT separation plan
Net cash declines due to IT separation plan ● Strong cash generation from operating profit funds capex and dividends FY 2022 FY 2021 Cash on Balance Sheet £99.5m £123.4m ● Lower cash position vs last year primarily as a result of planned IT separation costs (non-recurring) and working capital movemen
Slide 12: Outlook, Technical guidance for 2023, Capital Allocation Policy
Outlook ● In the first 11 weeks, trading has been in line with our expectations ● Core sales are moderately behind the same period last year; Trade sales in growth and DIY continues to normalise ● DIFM delivered sales are slightly ahead year on year due to the elevated order book; ordered sales are i
Slide 13: Business update
Business update David Wood Lk
Slide 14: Consistent strategy based on proven growth levers
Consistent strategy based on proven growth levers Vision A Wickes project in every home Mission To be the partner of choice for Home Improvers and Local Trade Purpose Helping the nation to feel house proud Levers of Growth Customer Winning for Trade Accelerating DIFM DIY Category Wins proposition Tr
Slide 15: Growth levers consistently delivering
Growth levers consistently delivering Wickes 15 Full Year Results March 2023
Slide 16: Growth levers consistently delivering
Growth levers consistently delivering Wickes 16 Full Year Results March 2023
Slide 17: Growth levers consistently delivering
Growth levers consistently delivering Wickes 17 Full Year Results March 2023
Slide 18: Growth levers consistently delivering
Growth levers consistently delivering Wickes 18 Full Year Results March 2023
Slide 19: Our business model and strategy is delivering strong outperformance
Our business model and strategy is delivering strong outperformance Sales densities up strongly since 2019 Core market share has grown significantly Transaction Items per basket This is despite the …and capacity numbers per are up by 9%, closure of 11 growth store are up by despite the Wickes stores
Slide 20: Further investment in growth levers to drive innovation and market share
Further investment in growth levers to drive innovation and market share ● Created an additional 25,000 sq ft of fulfilment capacity across 28 stores, supporting 5k more digital customer orders per week ● New handheld technology driving faster pick speed and record service levels for click & collect
Slide 21: Further investment in growth levers to drive innovation and market share
Further investment in growth levers to drive innovation and market share ● Launched Ebay marketplace and Klarna to appeal to younger and more female customers ● Our machine-learning Missions Motivation Engine is generating identifiable revenue gains ● Achieved target of 3,000 installer teams (2021: 2
Slide 22: Wickes Lifestyle Kitchens
WICKES LIFESTYLE KITCHENS VT TO RUN HERE Wickes
Slide 23: Positive progress across all pillars of Responsible Business strategy
Positive progress across all pillars of Responsible Business strategy ● No. 1 UK retailer in Stonewall Workplace Equality Index ● 200 local organisations supported by new Wickes Community People Programme and over £2m raised for charity partner, YoungMinds ● Brought forward annual pay awards with £3
Slide 24: Market trends point to…
Market trends point to… ● Trade pipelines remain healthy: 45% of tradespeople have a pipeline of over 3 months, albeit this is slightly softer than six months ago Trade ● 20-25% still have work lined up for over 12 months ● 35% of trade have seen an increase in installation of energy saving solution
Slide 25: Investing for further outperformance
Investing for further outperformance ● Record levels of sales in 2022 and good progress across our growth levers ● 2023 year to date trading in line with expectations ● Strong productivity programme in place to mitigate cost base inflation ● Confident in our business model and investment in growth lev
Slide 26: Q&A
Q&A
Slide 27: Disclaimer
Disclaimer NOT FOR RELEASE, PRESENTATION, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, DIRECTLY OR INDIRECTLY, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. This presentation has been prepared by Wickes and