EVE SLEEP. Interim Results

Transcription

1 INTERIM RESULTS H1 SEPTEMBER 2018 EVE SLEEP 2018 Interim Results 1

2 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Paul Pindar Chairman 2

3 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP H Highlights GROUP REVENUE +63% (1) GROUP NON MATTRESS REVENUE +168% GROSS MARGIN 54% REPEAT PURCHASES 13% 193 Stores bps higher than guided in the trading update on 2nd July 2. Populus Omnibus June 2018 (August 2018: 11.2%) RETURN RATES 11% BRAND AWARENESS 7.6% (2) (UK un-prompted) 24 Stores 3

4 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Rationale for refocusing on UK&I and France + + UK&I and France make up approximately 50% of the European mattress market Mattress Market (1) Revenue & Contribution (2) + + Despite growth of 95% across the rest of Europe (H1 2017: 2.2m), the negative contribution Rest of Europe, 2.0bn 31% UK, 2.1bn 34% UK&I 10.3m France Rest of Europe before overhead of 2.4m (the same as UK&I and France combined) was disproportionate DE, 1.4bn FR, 0.8bn 22% 13% ( 0.7m) 3.9m ( 1.7m) 4.3m ( 2.4m) Revenue 1. Source: Euromonitor, eve estimates 2. for the period H Excludes RoW revenue Contribution after marketing, before overhead 4

5 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP financial review CFO - Abid Ismail 5

6 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Financial summary + + Top line growth of 63% YoY + + Gross margin diluted via non mattress products and + + omni channel 450 bps improvement in marketing efficiency + + Closing cash of 16.7m H H Revenue ( m) % Gross profit ( m) % Gross margin (%) 54.4% 60.4% (600bps) Marketing ( m) (12.3) (8.0) (52%) Marketing / Revenue (%) (65.2%) (69.7%) 450bps Contribution before overheads ( m) (4.8) (2.7) (78%) Contribution before overheads (%) (25.3%) (23.2%) (210bps) Mvt Adjusted EBITDA (1) ( m) (11.9) (6.9) (5.0) Adjusted EBITDA (%) (63.4%) (60.2%) (320bps) Reported Profit (12.0) (9.1) (2.9) Closing Cash (20.5) 1. Adjusted EBITDA is before accounting for IPO related expenditure (H12017: 2.1m, H12018: 0.0m) and share based payment charges (H12017: 0.0m, H12018: 0.1m) 2. Financial data has been rounded for presentation purposes. As a result of this rounding the totals, comparatives and calculations presented in this document may vary slightly from the arithmetic totals or calculations using such data. 6

7 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Revenue H % + + UK&I broadly in line with expected growth. Group Total Revenue Segmental Revenue + + Over 75% of group revenue generated in the UK&I +63% 18.8m and France. + + Direct to consumer (D2C) remains the focus and represented 85% of revenue, 11.5m 85% D2C +64% 10.3m however omni-channel (OMNI) has demonstrated good growth. 89% D2C 6.3m +53% 3.9m +95% 4.3m 11% OMNI 15% OMNI 2.5m 2.2m 0.5m (26%) 0.4m H H UK&I FRANCE RoE RoW 7

8 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Non-Mattress Revenue + + Non mattress revenue has grown YoY in line with product expansion (10 to 15) Group revenue (1) + + Revenue from non mattress products makes up 17% of group revenue (H1 2017: 10%) 11.5m 10% Non Mat 18.8m 17% Non Mat Increase in non-mattress revenue +168% 90% Mattress 83% Mattress from 1.2m to 3.2m H H Group revenue split based on total revenue attributable to mattress vs non-mattress products, and does not represent split of quantity of orders 8

9 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Return rates Stable in UK&I, improving in France + + Return rates across the group have continued to fall but are expected to 15% stabilise at current levels. 13% 11% 11% 11% 12% 13% 6% Group UK&I France Other H H Return rates % is based on returns value as a % of total sales recognised before returns. The figures contain an element of provision in line with the group accounting policies which can be referenced in the 2017 annual report. 9

10 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Gross margin bridge + Gross margins remain strong with the net 260bps reduction driven 61.00% 60.00% predominantly by the increase in non mattress sales 59.00% 58.00% (3.40%) 1.40% 57.00% 56.00% 60.4% (3.60%) 55.00% (0.40%) 54.00% 57.0% 53.00% 52.00% 54.4% 51.00% H1-17 Reported gross margin Adjust for: non underlying items (1) H1-17 Underlying gross margin Return rate movement Non mattress mix Revenue mix - Increased B2B H1-18 gross margin 1. Relates to release of provision in H

11 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Marketing - Building a strong base United Kingdom + Investment in the eve brand has shown strong progress with unprompted brand awareness up 2x H1-18 H1-17 Movement Revenue 10.3m 6.3m +64% + Efficiency coming through - CPA down from 210 to 154 Marketing % 52.0% 64.1% (1210 BPS) CPA (1) (27%) + Impact on gross margin of non mattress mix & omni Unprompted Brand Awareness (2) 11.2% 5.4% 2x resulted in a broadly flat contribution after marketing, before overheads Contribution after marketing before overheads ( 0.7m) ( 0.7m) - 1. Defined as total marketing spend divided by total orders in the period through all channels 2. Source: Populus Omnibus August 2017, August (June 2018: 7.6%, June 2017: 4.1%) 11

12 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Marketing - Earlier investment stage than UK France + Significant increase in brand awareness with a 1.6x increase. H1-18 H1-17 Movement Revenue 3.9m 2.5m +53% + Marketing % and CPA trends highlight the earlier investment stage of France compared to the UK Marketing % 78.7% 68.0% (1070 BPS) CPA (1) (5%) Unprompted Brand Awareness (2) 5% 3% 1.6x Contribution after marketing before overheads ( 1.7m) ( 0.7m) ( 1.0m) 1. Defined as total marketing spend divided by total orders in the period through all channels 2. Source: YouGov brand tracker August 17, August 18 (February 2018: 4%) 12

13 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Cash + UK&I approached break even contribution after accounting for marketing but before overheads France contributed less than targeted owing to less efficient marketing in H1. m Other European contributions were significantly more negative 5.0 than targeted. + Non-current asset expenditure reflects investment in IT and 0.0 Opening balance Jan18 UK&I Contribution France Contribution Other territories Contribution Overheads Working Capital Adjustment & Non Cash Items Non-current asset expenditure Closing balance Jun18 lease deposits. 13

14 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP refocused strategy CEO - James Sturrock 14

15 INTERIM RESULTS H1 SEPTEMBER 2018 EVE SLEEP eve strategy core focus Positioning Build on our No.1 (1) online mattress position in the United Kingdom & France + Product Increase focus on the successful investment in mattress and non mattress ranges + Experience Use online position and offline expansion to further invest in customer experience 1. Source: google trends index, 1st Jan th June

16 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Position - Brand awareness UK - Unprompted awareness France - Unprompted awareness Silent Night Dreams Tempur Slumberland eve Sealy Sleepeezee Ikea mattresses Simba Bensons for Beds 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% Dunlopillo Epeda Bultex Simmons Mérinos Treca Tempur eve Matelas Tediber Emma DODO Simba Casper Bruno 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% Most well known bed in a box brand 5th most well known mattress brand (7th in August 2017) Most well known bed in a box brand 8th most well known mattress brand (9th in August 2017) Source: Populus Omnibus August 2017, August 2018: Source: YouGov brand tracker August 17, August 18 16

17 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Position - Google Trends United Kingdom - H France - H Source: Google Trends Index, 1st Jan - 30th June Source: Google Trends Index, 1st Jan - 30th June eve mattress Simba mattress Casper mattress Leesa mattress Otty mattress eve matelas Emma matelas Simba matelas Tediber matelas Casper matelas Most searched bed in a box brand Most searched bed in a box brand 17

18 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Position - Branded Traffic United Kingdom France 67% 58% Other Traffic % 79% 62% Brand Traffic % 33% 42% 21% 38% H H H H

19 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Products - Traction on product extensions United Kingdom France Increase in non-mattress revenue Hybrid Mattress Launched May18 Increase in non-mattress revenue Mattress orders +170% 25% +160% 8% from 0.7m to 1.8m of total mattress sales 1 from 0.3m to 0.7m with a bed frame 2 1. Based on July Trading via UK website, quantity of mattresses sold 2. Based on H trading via France website 19

20 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Experience - Partnerships 9 Stores 10 Stores 24 of 330 Stores 56 Stores 193 Stores 20

21 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR eve X Dreams - Launched July Campaign Aug18 Core message: Great sleep, delivered in a box Dreams do come true dreams.co.uk/about-eve + ITV & Channel 4 prime time coverage great sleep delivered in a box do come true + Online competition on both eve & Dreams websites eve mattresses now available to try and buy in over 195 Dreams stores nationwide X 21

22 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Experience - Repeat purchases United Kingdom France 16.0% 16.0% 14.0% 13.5% 14.0% 13.4% 12.0% 11.9% 12.0% 10.0% 9.0% 10.0% 9.6% 8.0% 8.0% 6.0% 6.0% 4.0% 2.0% 2.3% 4.0% 2.0% 3.3% 0.0% H1-15 H1-16 H1-17 H % H1-16 H1-17 H1-18 Based on orders in a period from previous customers as a % of total orders via websites 22

23 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Building on strong base in UK & FR Experience - Customer advocacy United Kingdom France 23

24 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Progress in July and August Restructure Trading New TV creative Product launches + + Refocused geographically to focus on UK&I and France + + July & August combined have delivered YoY revenue + + New TV creative and combined offline and + + Launch of expanded mattress and bed frame in H growth of c40% across UK&I online campaign targeted range planned for Q4 + + Cost savings plan initiated Planned marketing spend in H2 to be reduced, and France + + The eve/dreams August campaign was very for late October + + Aspirational campaign which will build on the remaining spend re-focused, successful and the successful learnings from headcount reduced by partnership is currently the sleep rich TV creative c20%, and other overheads trading ahead of initial rationalised expectations + + Restructuring costs estimated at approximately 0.8m for the year + + New CEO appointed James Sturrock 24

25 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP + + Market opportunity remains undiminished + + Shift to online is continuing H Summary + + eve is the most well known bed in a box brand in the UK and France + + Operating metrics in the UK are improving, confident in France + + Restructuring has been swift and effective + + Renewed focus on core markets + + Confident in long term prospects 25

26 INTERIM RESULTS H1 SEPTEMBER 2018 EVE SLEEP 2018 Appendix 26

27 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Income Statement H1-18 H1-17 Movement Loss for the period + + Adjusted EBITDA for the period was 11.9m loss Revenue ( m) % Gross margin ( m) % % of revenue 54% 60% +600bps Distribution costs ( m) (2.3) (1.3) (75%) % of revenue (12%) (11%) (100bps) Marketing (12.3) (8.0) (52%) % of revenue (65%) (70%) +500bps Wages & salaries (2.8) (2.0) (44%) % of revenue (15%) (17%) +200bps Other admin expenses (4.8) (2.5) (87%) % of revenue (25%) (22%) (300bps) Administrative expenses ( m) (19.9) (12.6) (58%) % of revenue (105%) (109%) +400bps Adjusted EBITDA (11.9) (6.9) (73%) % of revenue (63%) (60%) (300bps) Loss for the period (12.0) (9.1) (32%) 1. Financial data has been rounded for presentation purposes. As a result of this rounding the totals, comparatives and calculations presented in this document may vary slightly from the arithmetic totals or calculations using such data 2. Adjusted EBITDA is before accounting for IPO related expenditure (H12017: 2.1m, H12018: 0.0m) and share based payment charges (H12017: 0.0m, H12018: 0.1m) 27

28 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Jun-18 Dec-17 Jun-17 Balance sheet Non Current Assets - m Property, Plant and equipment Intangibles Inventories remain at low levels despite growth + + Capital expenditure requirements remain low due to the group s outsourced business model + + Closing cash of 16.7m at 30 June 2018 Other non-current assets Current Assets - m Inventories Trade and Other Receivables Cash and Cash Equivalents Total Assets - m Current Liabilities - m Trade and other payables Provisions for liabilities and charges Total Liabilities - m Net Assets - m Equity attributable to equity holders of the parent Share Capital Share premium Share based payments reserve Retained Earnings (22.1) (10.2) (1.9) Total equity - m

29 INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP Cash flow H1-18 H1-17 FY Closing cash of 16.7m Operating Loss ( m) (12.0) (9.1) (19.0) IPO related expenditure ( m) Operating loss before IPO related expenditure ( m) (12.0) (6.9) (16.9) Depreciation & amortisation ( m) Share based payment charge ( m) Working capital movement ( m) 2.1 (1.3) (3.0) Net cash outflow from operations ( m) (9.7) (8.2) (18.1) Net cash outflow from investing activities ( m) (0.6) (0.0) (0.4) Net cash inflow from financing activities ( m) Net increase/(decrease) in cash for the period ( m) (10.3) Opening cash for the period ( m) Closing cash ( m)