H1 20 RESULTS PRESENTATION - Amazon Web Services · H1 20 RESULTS PRESENTATION 17 2 ESTATE AGENT OF...

H1 20 RESULTSPRESENTATION

INTRODUCTION Vic Darvey

FINANCIAL REVIEW James Davies

STRATEGIC REVIEW Vic Darvey

Q&A

H1 20 RESULTS PRESENTATION 2

TODAY’S AGENDA


H1 20 HIGHLIGHTS

Resilient trading in face of challenging market conditions

§ Saved our customers £150m

§ 4.1 % share of UK listings

§ 5.3% share of UK houses sold

§ Canada modestly outperformed expectations

Operational excellence delivers group EBITDA profitability

§ Exit of US and AUS markets going well

§ Healthy cash balance

Good progress on strategy

§ Brand strength continues to gain traction in both markets

§ Transformation programme now underway


FINANCIAL REVIEWJames Davies


H1 20 RESULTS PRESENTATION 5H1 20 RESULTS PRESENTATION 5

REMINDER OF OUR FOCUS FOR FY20

Three key areas:

§ Capital allocation with financial discipline

§ Geographical focus

§ Investment in technology

RESILIENT UK PERFORMANCEPROFITABLE IN A CONTRACTING MARKET

• Market share of new listings maintained, despite 15% YoY instruction decline

• Market share of completions up 280bps

• ARPI increase of 12% largely compensates for the volume headwinds

• Revenue down 2.7%, ancillary share up to 45%

• Marketing investment down 9% YoY

• After house strategy investment, UK generated EBITDA of £5.5m

+12%-15% (2.7)% (34.5)%

H1 20H1 19

32,8

50

£1,3

53

£47.

1m

38,6

19

£1,2

09

£48.

4m

£5.5

m

£8.4

m

Instructions ARPI Revenue Adjusted EBITDA


UK PROGRESSINSTRUCTIONS AND ARPI

£No.

ARPIInstructions won

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

Feb-15

Apr-15

Jun-15

Aug-15

Oct-15

Dec-15

Feb-16

Apr-16

Jun-16

Aug-16

Oct-16

Dec-16

Feb-17

Apr-17

Jun-17

Aug-17

Oct-17

Dec-17

Feb-18

Apr-18

Jun-18

Aug-18

Oct-18

Dec-18

Feb-19

Apr-19

Jun-19

Aug-19

Oct-19


UK SCALE OPERATING LEVERAGE OVER TIME

UK CPI including portal costsUK adjusted overheads as % of revenue

0

50

100

150

200

250

H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19 H1 20

%

0

100

200

300

400

500

600

700

800

900

H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19 H1 20

£

25.9% reported

Marketing as % of revenue

H1 1927.9%

H1 1825.2%

H1 2026.1%

23.1% underlying


MARKET-LEADINGCANADIAN BUSINESSDRIVING GROWTH OUTSIDE QUEBEC

Completed acquisition 6 July 2018

• Two key themes – EBITDA stability in Quebec, revenue growth in Rest of Canada

• Mixed market conditions

• Revenue up 16.4%, up 13.0% at constant currency

• ARPI continues upward trajectory

• Marginally profitable despite material increase in marketing investment outside Quebec

£0.1m

20,4

86

21,4

01

£17.

7m

£15.

2m

£0.9

m

Transactions ARPI Revenue Adjusted EBITDA

H1 20H1 19Pro forma

(4)% 16.4% (89.0)%


£741

£942

27%


Guidance £m

Australia 6-8

US 4-6

Total 10-14

Current Estimate 10.5-13

Additional cash cost to close these countries is expected to be no more than £3m

AUSTRALIA/USCLOSURE UPDATE

GROUP INCOME STATEMENTContinuing operations

• Headline revenue up 12.5%, a proforma increase of 1.9%

• Disciplined marketing investment with UK savings covering increased investment in brand building in Canada

• Adjusted EBITDA profit of £4.3m for continuing operations against a loss of £21.0m in H1 last year

H1 20

£m

H1 19Pro

forma£m

Revenue 64.8 63.6

Gross margin % 60.8% 62.1%

Marketing costs (16.5) (16.7)

Adjusted operating (loss)/profit (1.2) 4.8Adjusted EBITDA 4.3 8.4


CONSOLIDATED CASH FLOW BRIDGE


£m

0

60

40

20

80

Cash

at 3

0 Ap

ril 2

019

Hom

eday

UK

EBIT

DA

Cana

da E

BITD

A

befo

re m

arke

ting

Cana

da m

arke

ting

cost

sU

S pr

e-cl

ose

EBIT

DA

AUS/

US

open

ing

cred

itors

, wor

king

capi

tal, c

apex

and

fina

nce

Cash

at 3

0 O

ctob

er 2

019

62.85.5

(4.2)

41.6(4.6)

4.3

(2.7)

(10.2)

(9.3)

AUS/

US

clos

ure

EBIT

DA


§ Significant strategic changes

§ Positive £25m swing in Group Adjusted EBITDA

§ Focus on operational excellence and underpin strong foundations

§ Investing for market share growth to take advantage of pent up demand

IN SUMMARY

STRATEGIC REVIEWVic Darvey


OUR VISION

To be the only place people go to buy, sell

and let their home

OUR MISSION

10% market share in 3 – 5 years

OUR VALUES

PEOPLE AND CULTURE

MARKET-LEADING BRAND

EVOLVE OUR

PRICING

ESTATE AGENT OF

THE FUTURE

ENHANCEPERFORMANCE

IN THE FIELD

TRANSFORM CUSTOMERPROCESSES

HOUSESTRATEGY



EVOLVE OUR PRICING1

! Multi-method approach applied to ensure a more

differentiated perspective on pricing.

! Reducing the level of the upfront fee will widen the

market opportunity.

! The overall fee can be increased further than the £999

and £1,499 if split between publication and completion

! In-market tests to be carried out for a split model and

technology changes are already being scoped out

! By increasing the overall fee, there’s a greater

opportunity to further increase amount paid to LPEs

Conclusion


ESTATE AGENT OF THE FUTURE2

Re-accelerate the growth of core by delivering rapid

innovation of the customer journey

Increase LPE productivity by delivering greater automation and efficiency

Start building the foundationsof an estate agent

of the future



Great first impressions Living room

experience Kept in the loop

When things go wrong Getting over the

lineThe big day

!"#$%&'() !"#$%#&$&'()*+%#",&-./.()&$)0&/%"$%#*1

*+&,-#.#/0()2344("%&(3"&#)*.)##".)*&%#$,/&%(&#5#63%#&()&%7./&/%"$%#*1


3


ENHANCING PERFORMANCEIN THE FIELD

Improving effectiveness and efficiency in the field

! Automation of key processes

! Real-time market data improving conversion

in the living room

Training and ongoing performance management

! Investments in recruitment, the Academy

and in-field training

The right structure for the future

! Make better use of data to ensure everyone has access to the

same opportunities

! Create a field-based team better paid than

their High Street counterparts



4


Investing to enhance customer engagement

! World Class Manager training programme and

Contact Centre School

! Deployment of new Omni Channel customer

engagement platform

Investing in Proactive post sales support

! Reduced time to complete from SSTC

to completion by 7 days

! Increased number of houses we sell

Delivering great customer service

! A world class Net Promoter Score of 80

! Feefo Gold Trusted Service Award

TRANSFORMING OUR CUSTOMER PROCESSES


CANADA OUTPERFORMS IN A DIFFICULT MARKET


! Strong market share in Quebec

! Purplebricks has quickly cemented a place of prominence in the market, and has now reached 56% prompted awareness in English Canada.

! In English Canada, brokerage volumes significantly ahead YoY – driven by conversion and successful buyside agent recruitment

! Total opportunity is 3x Quebec in terms of annual listings and we remain optimistic about the opportunity

H1 Update


H2 20 FOCUSContinue to deliver operational excellence

§ Achieved revenue growth and EBITDA profit

§ Increased number of houses sold

§ Strong cash position

Deliver Phase 2 of Strategy - Focus on 4 key initiatives

§ Pricing tests in market

§ Estate agent of the future

§ Enhancing performance in the field

§ Transforming our customer processes

Moving forward

§ We remain confident of medium term objective of 10% market share

H1 20 RESULTS PRESENTATION - Amazon Web Services · H1 20 RESULTS PRESENTATION 17 2 ESTATE AGENT OF...

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