THE HUT GROUP OCTOBER 2015 UPDATE

Transcription

1 THE HUT GROUP OCTOBER 2015 UPDATE

2 THE BUSINESS: LEVERAGING PROPRIETARY TECHNOLOGY, DATA AND DISRUPTIVE MODEL TO DELIVER OWN BRAND PRODUCTS DIRECT TO GLOBAL CONSUMERS GOAL: TO BE THE WORLD S LEADING ONLINE HEALTH & BEAUTY DESTINATION 4 YEAR PLAN 750M SALES, 80M- 100M EBITDA

3 THE HUT GROUP OCTOBER 2015 THG OVERVIEW Business Model Opportunity - Health Opportunity - Beauty Future: 4 Year Plan

4 THE HUT GROUP 01 BUSINESS MODEL

5 5 THE HUT GROUP BUSINESS MODEL Trial and Error Provided Rules for THG Business Model: 1. Small, 1 Man Delivery - Global Market 2. High Repeat Products 3. Low Returns 4. Strong Working Capital Model 5. High Gross Profit Margins Barriers to Entry 6. In House Technology Data Platform / Opex Leverage Health & Beauty markets fit well within above rules: High Growth Markets 10 to 20% EBITDA margins 100% EBITDA Cash Conversion <1% Returns

6 SALES M EBITDA M 6 THE HUT GROUP BUSINESS EVOLUTION Production Facility Upgrade Data Platform Launch International Platform Launch Focus Shift To Health & Beauty THG Proprietary Tech Platform Entertainment Health & Beauty EBITDA (7.3)

7 WHAT WE DO FIND POTENTIAL CUSTOMERS SELL THEM PRODUCTS DELIVER GREAT PRODUCTS BUILD LOYALTY & RETENTION AFFILIATES & PARTNERSHIPS USER EXPERIENCE WAREHOUSING CRM SEO PRICING & OFFERS DELIVERY PPC BUYING & MERCHANDISING DISPLAY TECHNOLOGY SHOPPING SOCIAL CONTENT DATA SCIENCE Underpinning everything we do is an obsession with capturing and making decisions based on data. It allows us to be faster and smarter than our competitors across every aspect of the user experience.

8 INTERNATIONAL MIX BRAND MIX 8 THE HUT GROUP BRAND AND INTERNATIONAL MIX 3 rd Party Brand 100% FY 2010 Own Brand 57% FY rd Party Brand 43% EUROPE 25% EUROPE 35% FY 2010 FY 2015 UK 75% UK 45% ROW 20%

9 9 THE HUT GROUP We are building the world s best online retail platform 62 TRADING WEBSITES All on THG Platform including mobile-optimised variations, across 24 facias 20 LANGUAGES SUPPORTED 9 more currently in production 12 TRANSACTIONAL CURRENCIES 7 more currently in production NEW INTERNATIONAL SITES LAUNCHED FY14/15 LOCAL PAYMENT GATEWAYS In addition to world-wide accepted Visa, Mastercard and Paypal offerings AVERAGE LOAD SPEED IN CHINA (Seconds)

10 10 THE HUT GROUP CUSTOMER METRICS THE HUT GROUP PLATFORM LEVERAGE 14.2M Customers 8.0M Shipments in the last 12 months 330M Visits Per Annum 4% - 8% Conversion c6.5% Marketing Costs 3-4x Customer Frequency Per Annum 2 Billion Campaign s Per Annum

11 11 THE HUT GROUP SCALABILITY: WHY VISITS ORDERS AVERAGE ORDER VALUE E Visits (Millions) E Orders (Millions) E AOV ( ) SCALABILITY: HOW INVESTMENT IN TALENT INVESTMENT IN CAPACITY 100M investment in distribution centre (FY15-17) E Tech Headcount E Orders (Millions)

12 12 THE HUT GROUP 100m BUILD 1 Million Sq Ft in Cheshire

13 13 THE HUT GROUP MYPROTEIN: VERTICAL INTEGRATION

14 14 RESERVE YOUR SPACE GROUP EXECUTIVE STRUCTURE Excluding the founders, ALL of the Executive Management team have been internally promoted Matthew Moulding GROUP CEO Age 42 Trading Central Functions Rachel Horsefield MD PRESTIGE Age 28 Paul Gedman Andy Duckworth Adam Knappy John Gallemore Darren Rajanah Ash Ramrachia CEO BEAUTY Age 33 CEO HEALTH Age 32 CEO CONSUMER Age 25 CFO Age 45 CCO Age 35 TALENT Age 27 Fabiola Cuny OPS DIRECTOR Age 40 Ross Boardman CXO Age 37 Steven Whitehead M&A Age 35 James Pochin LEGAL Age 37 Promoted Internally

15 THE HUT GROUP TALENT 31 Staff promoted across Group in Q Average age of newly promoted staff 23 New people managers: Meritocracy 740 Staff now employed at Northwich HQ 1,500 Total staff at THG

16 16 WANT TO RUN A BUSINESS OR BUILD INDUSTRY LEADING TECHNOLOGY #1 PLACE FOR AMBITIOUS GRADUATES JOINED IN 2011 JOINED IN 2013 ADAM KNAPPY CEO, Consumer Division WING CHAN Director, Group Marketing Graduated from Durham in Physics and joined THG aged 22. Held various roles analysing and improving our businesses and within 2 years promoted to CEO of Consumer Division Top ranked Computer Scientist at Cambridge in Joined THG as a Software Engineer. Now responsible for Group Marketing, c 320m of Group Sales and over 100 staff. JOINED IN 2014 JOINED IN 2015 JOINED IN 2013 BILLY COLE ZARA HILL DAVID GREENWOOD Promoted within a year to lead a commercial team of 5 in Beauty Promoted within 6 months to lead affiliates and partnerships for all beauty websites Promoted within a year to be responsible for managing the IWOOT business. 2016: 100k Tech Challenge

17 17 WANT TO RUN A BUSINESS OR BUILD INDUSTRY LEADING TECHNOLOGY #1 PLACE FOR GRADUATES JOINED IN 2014 JOINED IN 2014 CAROLINE McKENNA HEAD OF TRADING - BEAUTY ZARA HILL HEAD OF BEAUTY AFFILIATES Lancaster Joined THG in June 2014 Started as web analyst Promoted Commercial Manager in Beauty Now Head of Trading for Beauty Head of Beauty Affiliates Studied Marketing & Lancaster Joined THG in July 2014 Promoted within a 6 months to lead affiliates and partnerships for all beauty websites in the group JOINED IN 2015 GHALIA KHAN Marketing Management grad from Lancaster Marketing Campaign Manager across Beauty division JOINED IN 2015 JOSHUA PAYNE Studied Management Information Technology Commercial Financial Analyst for Supply Chain and Merchandising.

18 18 WANT TO RUN A BUSINESS OR BUILD INDUSTRY LEADING TECHNOLOGY #1 PLACE FOR GRADUATES JOINED IN 2014 CALLUM McGUINNESS INTERNATIONAL TRADING MANAGER JOINED IN 2013 MADELEINE LEAF HEAD OF EUROPEAN AFFILIATE MARKETING Graduated from Durham in Physics and joined THG aged 22. Held various roles successfully and now responsible for growth strategy in 6 global new markets including: Netherlands, Russia, Romania, Croatia, Slovenia and c 30m revenue Graduated from Durham in History Now heads the international affiliate team across the group and manage our key European partnerships, network relationship and expansion opportunities, including new site launches. Responsible for over 25 million revenue JOINED IN 2015 AMY BRAWN English Lit grad from Durham SEO & Social Marketing Executive for Health & Vitamins division JOINED IN 2015 LUCY COLGRAVE Biology Graduate from Durham Women's clothing category management + responsibility of Australian market bus development

19 DEGREE MIX UNIVERSITY MIX

20 20 THE HUT GROUP UK 10% HEALTH ROW 90% THE HUT GROUP 02 OPPORTUNITY - HEALTH Sports Nutrition (2019) : $16BN Sports Nutrition (2015) : $11BN Vitamins & Supplements : $95BN Weight Management : $15BN Source: Euromonitor 2015

21 Millions Millions 21 MYPROTEIN SALES GROWTH MYPROTEIN EBITDA GROWTH Year International CAGR 120% 4 Year UK CAGR 32% 25 4 Year CAGR 63% (calendar yrs) UK International EBIDTA

22 22 MYPROTEIN CASE STUDY DISRUPTOR MODEL MARKET WHEY PRODUCTION BRAND NPD TECH DATA MANUFACTURER PLATFORM PLATFORM INTERNATIONAL PLATFORM CLOTHING DIRECT TO CONSUMER Est FY15 Sales* GLOBAL c 150M UK Est c 40M SCANDINAVIA Est c 85M US c 600M** *Management Estimates **Relate to Glambia Global Performance Nutrition Shaded boxes represent hybrid Denotes planned further vertical intergration

23 23 MYPROTEIN DISRUPTOR MODEL 24 Trading Websites 10 Currencies 20 Languages 2000 Broader Product Range 1 Ranked for value in US across 73 competitors April 15

24 24 THE HUT GROUP UK 10% UK 10% BEAUTY ROW 90% THE HUT GROUP 03 OPPORTUNITY - BEAUTY Premium Beauty : $110BN Source: Euromonitor 2015

25 Millions Millions 25 THE HUT GROUP BEAUTY SALES GROWTH THE HUT GROUP BEAUTY EBITDA GROWTH Year 40% CAGR International 9 4 Year CAGR 36% 80 4 Year 32% CAGR UK UK INTERNATIONAL EBITDA

26 26 BEAUTY CASE STUDY DISRUPTOR MODEL MARKET MANUFACTURE BRAND OWNERSHIP STORES SUBSCRIPTION/ BEAUTY BOX TECH PLATFORM DATA PLATFORM INTERNATIONAL PLATFORM Est. FY15 Sales* GLOBAL c 100M GLOBAL c 3.5BN UK/EU c 50M UK c 80M *Management Estimates Denotes planned further vertical intergration

27 THE HUT GROUP 04 FUTURE: 4 YEAR PLAN

28 THE HUT GROUP FUTURE: 4 YEAR PLAN c25% Sales Growth CAGR 750M Sales 80M- 100M EBITDA 65% Sales Own Brand 70% Sales International > 40% Gross Profit Margin 100% Profit Conversion to Cash

29 THANK YOU