Full year results 2020 A winning formula for the fast-growing - - PowerPoint PPT Presentation
Full year results 2020 A winning formula for the fast-growing e-commerce zone Steve Parkin: Executive Chairman & Founder David Hodkin: Chief Financial Officer Tony Mannix : Group Chief Executive Officer Sebastien Desreumaux: Chief Executive
Steve Parkin: Executive Chairman & Founder David Hodkin: Chief Financial Officer Tony Mannix : Group Chief Executive Officer Sebastien Desreumaux: Chief Executive Officer Europe/ Group M&A
Full year results 2020 A winning formula for the fast-growing e-commerce zone
Disclaimer
Disclaimer
Extensive operational capabilities Global E-fulfilment shipping
This presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding the Company’s intentions, beliefs or current expectations. Any forward-looking statements in this presentation reflect the Company’s current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking
statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. No representations or warranties are made as to the accuracy of such statements, estimates or projections. Please note that the Directors of the Company are, in making this presentation, not seeking to encourage shareholders to either buy or sell shares in the Company. Shareholders in any doubt about what action to take are recommended to seek financial advice from an independent financial advisor authorised by the Financial Services and Markets Act 2000. 2
Contents
Investor highlights 4 Clipper overview 7 The ‘Clipper Way’ 15 Environmental, social and governance 19 E-commerce mega trends and Post-COVID-19 acceleration 23 Business case: Superdry 28 Headline financials 30 Clipper’s unique strategic position 36 Q&A 38
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Investor highlights
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Investor highlights Clipper: a clear winner in the e-commerce zone
Financial highlights: a clear winner in the e-commerce zone
year end.
Investor highlights
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A winning formula for the fast-growing e-commerce zone
Investor highlights
Leading position in the full end to end e-commerce zone Resilient & asset light Business Model 66% of Logistics revenue, +18.4% YoY Outperformed market in terms of growth and profit Revenue: £500.7m +8.8% EBIT: £24.1m +19.1% Open book: 70% of revenue Maintenance CAPEX : 0.8% High level of cash conversion and ROCE Cash conversion: 108% (IAS 17) ROCE: >30% First class and long-term customer relationship Top 5: less than 15% EBITA Typically contracted 3 to 10 years International, highly experienced entrepreneurial Executive team to accelerate growth & value creation Aggregate +100 years experience UK, Mainland Europe and USA
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Clipper overview
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Clipper overview Pan-European leader
Clipper overview
A pan-European leader in the e-commerce zone
GERMAN FACILITIES IN: BERLIN MUENCHBERG HOF NEUSS NETTETAL POLISH FACILITIES IN: POZNAN
SI SITES S TH THROUGHOUT T EU EUROPE
12million sq. ft. (1.5million sq. ft. in Europe) +15. 15.4% 4% Y YoY i increase
154m units pa. of E-fulfilment 125m units pa. of Returns 110m units pa. of Pre-Retail 121m units pa. of Retail Wholesale
Extensive operational capabilities Dedicated & shared use operations Our Retail Solutions focus on: Taking cost, risk and complexity out of the supply chain Global e-fulfilment shipping
Note: 2019 data
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Segment and business activity details
Note: The amounts and percentages shown indicate the contribution to Group revenue by each business area disregarding inter-segment sales.
E-fulfilment & returns management Commercial vehicles Non e-fulfilment
This business activity includes the receipt, warehousing, value-added processing, stock management, picking, packing and despatch of products on behalf of customers to support their online trading activities, as well as a range of ancillary support services, including the management of the returns process. This business activity includes receipt, warehousing, value-added processing, stock management, picking, packing and distribution of products on behalf of customers. The commercial vehicles business, Northern Commercials, operates Iveco and Fiat commercial vehicle dealerships from five locations, together with three sub-dealerships. It sells new and used vehicles, provides servicing and repair facilities, and sells parts.
Business activity revenue
% of Logistics revenue
Business activity revenue
% of Logistics revenue
Segment revenue
% of Group revenue
(2019: £234m) +18.4% (2019: £145m)
(2019: £83m) 0.0%
Clipper overview
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Clipper overview
Ambition: accelerated global growth in the e-commerce zone
TO BECOME THE GLOBAL LEADING BRAND IN INTEGRATED FULL END-TO-END E-COMMERCE LOGISTICS
profitability
new territories through strategic acquisitions
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Build on market- leading customer proposition to expand the customer base
Clipper overview
Ambition: accelerated global growth in the e-commerce zone
Develop new, complementary products and services Continue European expansion Explore acquisition
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Clipper overview
Clipper at the forefront of e-commerce
Service Portfolio:
E-FULFILMENT CLICK & COLLECT RETURNS MANAGEMENT REPAIR & REMEDIAL DISPOSITION
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Clipper overview
High quality customers: Top 5 account for less than 15% EBITA
E-FULFILMENT & RETURNS MANAGEMENT SOLUTIONS DEDICATED RETURNS SOLUTIONS MULTI-CHANNEL SOLUTIONS RETAIL LOGISTICS INBOUND & PRE-RETAIL OPERATIONS HIGH VALUE/SECURITY OPERATIONS RETAIL/STORE TRANSPORT SOLUTIONS SUPPLIER COLLECTIONS RELIEF OPERATIONS 13
Clipper overview
Trusted partners: size, scale & long-term relationships
Morrisons
24 Years
John Lewis
22 Years
Liberty
21 years
Asda (Walmart)
19 years
New Look
16 years 16 years
Harvey Nichols
Clipper Account Portfolio by Turnover 14
The ‘Clipper Way’
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The ‘Clipper Way’ E-commerce long-term enabler
The ‘Clipper Way’
AGILE AND ABLE
AN EXPERIENCED ENTREPRENEURIAL & INTERNATIONAL TEAM
COLLABORATIVE AND SOLUTION DRIVEN
LONG-TERM CLIENT PARTNERSHIPS
ENABLER OF CUSTOMERS’ GROWTH AND PROFITABILITY
EXCELLENCE IN EXECUTION
A SCALABLE AND RESILIENT BUSINESS MODEL
OPEN BOOK AND SHARED USER MODEL
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The ‘Clipper Way’
Clipper delivers a broad range of value-added logistics services tailored to the emerging and future needs of our customers.
How we create value
High level of contractual certainty
Clipper provides customers with
minimum volume guarantee contract terms for 94% of our UK Logistics customers, giving us a high level of contractual certainty.
Mutually beneficial long-term relationships
We also operate closed book contracts for customers, many of whom we have worked with for several years.
Talent and expertise
In order to ensure long-term customer relationships, we continually draw on our team’s expertise to drive innovation in
cost competitive position and continue to strengthen our brand.
Innovative solutions
Clipper has developed specialist services (e.g. pre-retailing services and reprocessing of garments) to support
supply chains and to ensure that product is ready for sale in the most efficient and cost-effective manner. As the retail landscape changes to become more omni-channel focused, developing innovative solutions such as Clicklink and Boomerang to support our customers has led to Clipper retaining customers on a long-term basis as well as winning new business every year.
Commercial vehicle dealerships
In addition, our commercial vehicles division is profitable and cash generative – its profitability driven by higher margin aftersales activity, which is underpinned by legal requirements governing the inspection of commercial vehicles.
Fleet procurement benefits
Whilst Northern Commercials is not heavily dependent on the logistics division of the Group, it provides Clipper with flexibility over fleet procurement, and margins on servicing activity are retained within the Group.
Key inputs
Thought leadership and innovation
Clipper has a strong brand, long- standing customer relationships and an experienced team, which combine to deliver thought leadership and innovation in the logistics sector.
Enduring relationships
Clipper’s focus on the provision of value-added services to retailers at a competitive cost has resulted in a number of long-standing contractual arrangements with major retailers such as Asda, ASOS, John Lewis, Morrisons and Superdry.
Technologically advanced
We work in trusted partnership with
rapidly deploy solutions to the challenges they face. Our team is focused on addressing tomorrow’s challenges today and embraces new technology.
Effective financial management
We seek to efficiently use funds
generated from operations or
contractual certainty underpins financial predictability and stability.
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The ‘Clipper Way’
Clipper delivers a broad range of value-added logistics services tailored to the emerging and future needs of our customers.
How the value is shared
Shareholders
High growth market sectors, an attractive business model and a clear growth strategy combine to give
conversion, resulting in dividend distributions of circa 61% in 2020.
Employees
Over 8,000 employees have access to attractive career progression in a market-leading logistics business. The Sharesave Plan enables employees to share in the financial success of the business.
Customers
Blue-chip customers in logistics and commercial vehicles can rely on Clipper’s established reputation and high levels of service, particularly when they need it most through peak trading periods.
Suppliers
Clipper benefits from its relationships, built over many years, with large and small trusted partners and suppliers. Clipper’s diverse supply base de-risks Clipper and its customers from fluctuations in market conditions.
Communities
Clipper’s Corporate Social Responsibility agenda benefits local communities by providing employment opportunities, reinvesting in the local communities through sponsorship and developing green initiatives.
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Environmental, social and governance
Environmental, social and governance
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Ethical governance
Environmental, social and governance
Everyone who works for and with Clipper Logistics plc has the right to work in an environment that is free from harm and to do so freely for their own purpose. Clipper has partnered with Intertek plc to create an Ethical Trading audit that is based on the SMETA audit standards as well as being benchmarked against the Ethical Trading Initiative (ETI) standards. Sites’ contingent labour providers and onsite support functions (e.g. security, cleaning and catering companies) are audited yearly with stringent follow-up actions. This provides significant confidence to senior management and the Board on compliance with our strict ethical policies, including Modern Slavery.
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Fresh Start
potential impact of Brexit.
innovation and new ways of working.
changing stereotypes of logistics.
80% of Millennials look at Diversity & Inclusion policy
PURPOSE PARTNERS AWARDS
Disability: physical, learning or mental health Ex-Offenders Ex-Military Full-time parents
FRESH STARTERS PROFILE
Retirees Ex-Homeless Long-term Unemployed
2nd Birthday May 2020
Fresh Starters across the group
Retention rate
Environmental, social and governance
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Sustainability
Clipper recognises that every organisation has a responsibility to the environment and is committed to establishing environmental management as a corporate priority. Example programmes of work include:
save energy for the good of the planet”
SUSTAINABILITY INITIATIVES
every year in UK
and sent to Clipper for processing
the initiative
reduce vehicle trips by over 80%
GREEN FLEET
Environmental, social and governance
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E-commerce Mega trends and post-COVID-19 acceleration
E-commerce mega trends and post-COVID-19 acceleration
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Navigating through COVID-19
E-commerce mega trends and post-COVID-19 acceleration
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PEOPLE The safety and wellbeing of our colleagues has been and continues to be
priority STRATEGY The Board is monitoring events closely with regular Board oversight evaluating the impacts and designing appropriate response strategies LIQUIDITY The availability of cash resources and committed facilities, together with strong cash flow, support the Group’s liquidity and viability through the pandemic PROCESS The Clipper team has demonstrated its ability to support supply-chain continuity for existing and new customers thanks to its very agile and resilient processes
NHS PPE & other solutions: agility matched by ability
MULTIPLE ADDITIONAL OPPORTUNITIES SEIZED AS RETAILERS RESHAPE THEIR BUSINESS MODELS INCLUDING OUTSOURCING, E.G. JOULES
2 NEW SITES, E-COMMERCE & DISTRIBUTION SOLUTIONS NEW SITE DISTRIBUTION DC/DISTRIBUTION SUPPORT SUBSTANTIAL GROWTH
E-commerce mega trends and post-COVID-19 acceleration
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Supporting the supply chain, delivering for customers
E-commerce mega trends and post-COVID-19 acceleration
Responding to a request from Government, mobilisation of the solution took 4 days
including setting up a full warehouse management system for an initial 200,000 sq. ft. of warehousing space
We additionally created an online solution, working with eBay to support aspects of the primary care network and we had that
In the ‘Clipper Way’, demonstrating our agility, Clipper was able to mobilise an initial 200,000 sq. ft. solution within 4 days. We are currently utilising our logistics capabilities at several locations, thereby easing the pressure on the NHS Supply Chain network. The aim was to work with our NHS partner and establish a new supply chain for NHS Personal Protective Equipment (PPE) products. We are not only delivering to NHS Hospital Trusts, we have also developed an online eBay solution to support healthcare providers, GP surgeries, care homes and others in the primary care network across the country.
Supporting the NHS
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COVID-19: accelerated e-commerce growth
E-commerce mega trends and post-COVID-19 acceleration
Online orders increased significantly from March 2020 onwards 21% year-on-year increase in e-commerce sales in fashion, apparel and accessories globally. Dramatic change in online shopping habits over the COVID-19 lockdown period Number of consumers who say they’ve increased their online shopping rising to 36% (Mintel research conducted 16-23 April). Catalyst for a new, more omni-channel focused future 42% of respondents to a survey conducted by Retail SaaS provider Qudini are more likely to use click and collect services. Retailers without online presence threatened 42.6% of UK shoppers are spending more than usual online at the moment and 61% of those plan to keep doing so after the pandemic (Global Data’s survey May 2020). Bricks-and-mortar saw online orders increase from 52% to 76% compared with the same period last year (The Future of Ecommerce, April 2020).
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Business case
Business case
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Superdry
Business case
within 24 hours
We partnered with Superdry to develop automation solutions to speed up the processing of e-commerce returns, making them available for sale again quickly. We looked at the flexibility robots could offer us in an automated goods-to-person system. The pilot project for handling e-commerce returns was conducted in 2018. After the success of that project, we moved on with planning expansion. Over 80,000 sq. ft. of warehouse space at our Burton facility is being set out with 1,000 transportable pick-wall modules and 12 pick-to-light stations to facilitate the adoption of the robots. The site is also being prepared for the robot fleet by positioning QR codes on the floor for the robots to follow. The solution will not only be able to process all existing e-commerce returns but will now also be able to process returns from store. Once live, this will cater for around 50% of the site’s outbound activity. The expansion will take us from six robots and 92 modules to 46 robots and 1,000 modules.
Putaway rates increased by
Pick rates increased by
locations served by robots.
Use of robots has increased putaway and pick rates, which in turn has increased productivity.
Use of automation to speed up processing
This will allow over 32,000 locations to be serviced by robots. Our plan is then to further expand the solution to include menswear next year. This will involve additional automation projects, redesign of the mezzanine floors as forward reserve storage to enable fast replenishment and reduced handling of goods to the High Productivity Racking area.
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Headline financials
Headline financials Outperforming the market
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160.7 201.2 234.8 290.3 340.1 400.1 460.2 500.7 12.9 13.5 15.7 19.8 23.1 25.9 30.3 34.6 100 200 300 400 500 600 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A Revenue EBITDA
Headline financials
Historic performance
Clipper’s track record demonstrates capability to seize opportunities:
1992: Clipper founded by Steve Parkin 2014: successful IPO 2014-2020: post IPO CAGR: Revenue 16%; EBITDA 17%
Group Revenue and EBITDA 2013-2020 Financial Year £’m
IPO
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Operating and financial review
Group revenue Group EBIT
£m Including Underlying non-underlying factors 2020 2019 Change % 2020 2019 Change % E-fulfilment & returns management services 277.0 233.9 +18.4% 277.0 233.9 +18.4% Non e-fulfilment logistics 143.8 145.3
143.8 142.2 +1.1% Total value-added logistics services 420.8 379.2 +11.0% 420.8 376.1 +11.9% Commercial vehicles 82.5 82.6
82.5 82.6
Inter-segment sales (2.6) (1.6) (2.6) (1.6) Group Revenue 500.7 460.2 +8.8% 500.7 457.1 +9.5%
e-fulfilment & returns management business activity, which grew by 18.4%.
Warehouse, Brissi, Tech Data, Neon Sheep, Levi Strauss, Sports Direct, Vestel and Ginger Ray);
Sleep, Amara, Shop Direct, Loyalti, N Brown, SLG, the NHS, Joules and New Girl Order); and
9.5%. Underlying EBIT from e-fulfilment & returns management services grew by 16.2% on revenue growth of 18.4%.
Note: All numbers are presented on an IAS 17 basis to aid comparability, with IFRS 16 impact shown as a single adjustment (1) £m Including Underlying Non-underlying factors 2020 2019 Change % 2020 2019 Change % E-fulfilment & returns management services 17.6 13.6 +29.4% 15.8 13.6 +16.2% Non e-fulfilment logistics 14.2 13.0 +9.2% 12.4 9.9 +25.3% Central logistics overheads (6.9) (5.5) +25.5% (6.7) (5.9) +13.6% Total value-added logistics services 24.9 21.1 +18.0% 21.5 17.6 +22.2% Commercial vehicles 2.0 1.1 +81.8% 2.0 1.1 +81.8% Head office costs (2.8) (2.0) +40.0% (2.6) (2.8)
IFRS 16 impact (1) 8.4
32.5 20.2 +60.9% 20.9 15.9 +31.4%
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Headline financials
Operating and financial review
Group Income Statement For the year ended 30 April
management services.
IFRS 16 and non-underlying factors.
based payments, underlying EBIT is up year on year by 31.4%.
£m 2020 2019 Change % Revenue 500.7 460.2 +8.8% Cost of sales (358.7) (331.9) Gross profit 142.0 128.3 +11.6% Other net gains 4.1 (0.3) Admin expenses (114.7) (108.4) Operating profit before share of equity-accounted investees, net of tax 31.4 19.5 +61.0% Share of equity-accounted investees, net of tax (0.2) (0.4) Operating profit 31.2 19.1 +63.4% EBIT (excluding non-underlying factors) 20.9 15.9 +31.4% IFRS 16 impact 8.4 Non-underlying factors 3.2 4.3 EBIT 32.5 20.2 +60.9% Less: amortisation of other intangible assets (1.2) (1.2) Share of tax and finance costs of equity-accounted investees (0.1) 0.1 Operating profit 31.2 19.1 Net finance costs (11.1) (2.1) Profit before income tax 20.1 16.9 +18.9% Income tax (3.9) (3.5) Profit for the financial period 16.2 13.4 +20.8% Basic earnings per share (p) 15.9 13.2 +20.5%
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Headline financials
Operating and financial review
Group Statement of Financial Position At 30 April
liabilities of £190.2 million on transition in FY20.
million were reclassified to ROU assets.
stocking credit line.
grow, with unbilled reconciliation income on open books; and certain short-term
as obligations previously classified within this caption are now included within lease liabilities.
directly recoverable from customers through the open book charging mechanism.
Note: 2020 presented on an IFRS 16 basis; 2019 under IAS 17.
£m 2020 2019 Intangible assets 37.9 37.3 Property, plant & equipment 29.0 61.5 Interest in equity-accounted investees 0.6 0.9 Right-of-use assets 186.2
1.2
1.9 1.9 Non-current assets 256.8 101.6 Inventories 27.9 24.0 Trade & other receivables 102.7 96.4 Cash & cash equivalents 2.7 3.5 Current assets 133.3 123.9 Trade & other payables 130.8 126.0 Borrowings 19.3 12.3 Lease liabilities 38.4
0.1 0.2 Current tax liabilities 1.8 0.8 Current liabilities 190.4 139.3 Borrowings 0.1 39.1 Lease liabilities 163.9
6.5 1.6 Deferred tax liabilities
Non-current liabilities 170.5 43.0 Net assets 29.2 43.2
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Headline financials
Operating and financial review
Group Statement of Cash Flows For the year ended 30 April
improvement of £34.9 million - excluding this there was a £3.6 million improvement YoY.
expenditure in the year ended 30 April 2019, and to a lesser extent increased interest costs on the commercial vehicles stocking lines.
million).
business combination.
£5.7 million in 2020 down from £18.7 million in the prior year.
impact as a result of IFRS 16.
Note: 2020 presented on an IFRS 16 basis; 2019 under IAS 17.
£m 2020 2019
EBIT 24.1 20.2 Depreciation & Amortisation 5.3 8.2 Other non-cash items 1.2 (0.7) IFRS 16 Impact 34.9
1.3 0.6 Cash generated from operations 66.8 28.3 Net interest paid (2.9) (1.9) Tax paid (3.5) (4.3) Net cash flows from operating activities 60.4 22.1 Net capital expenditure (11.7) (25.9) Acquisition of subsidiaries (2.9) (0.5) Net cash flows from investing activities (14.6) (26.4) Net drawdown of bank loans 1.2 7.2 Finance lease drawdowns 5.7 18.7 Repayment of capital on finance leases (8.4) (10.4) IFRS 16 Impact (34.9)
0.1 0.3 Dividends paid (10.2) (8.9) Net cash flows from financing activities (46.5) 6.9 Net increase / (decrease) in cash & cash equivalents (0.7) 2.6
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Headline financials
Clipper’s unique strategic position
Clipper’s unique strategic position
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A clear winner, uniquely placed to accelerate growth and create value
Clipper’s unique strategic position
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Strong trading picture in 2020 with more growth ahead in online shopping post COVID-19. Substantial organic growth opportunities in the UK and mainland Europe where Clipper grew respectively 43% in FY19 and 34% in FY20. M&A opportunities in the UK, mainland Europe and North America to deploy Clipper’s expertise across new geographies and enhance value to customers and shareholders. An experienced team led by Clipper’s founder, Steve Parkin, with an effective, efficient and entrepreneurial approach. A leading e-commerce logistics company with nearly 30 years’ experience in a fast-growing, rapidly changing retail marketplace. Uniquely placed in the full end-to-end e-commerce zone including e-fulfilment, click & collect, returns management, repair & disposal. Strong track record based on the combination of operational excellence, innovation and technology-driven solutions. Out-performed market both in terms of growth and profitability: CAGR revenue 16%, EBITDA 17% since IPO.
Q & A
Q & A
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Thank you
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