H1 20 RESULTS PRESENTATION
TODAY’S AGENDA INTRODUCTION Vic Darvey FINANCIAL REVIEW James Davies STRATEGIC REVIEW Vic Darvey Q&A H1 20 RESULTS PRESENTATION 2
H1 20 HIGHLIGHTS Re Resilient tradi rading in face ace of ch chal allenging mark market co condi ditions Saved our customers £150m § 4.1 % share of UK listings § 5.3% share of UK houses sold § Canada modestly outperformed expectations § Op Oper eration onal ex excel ellen ence d e del eliver vers g s grou oup EB EBITDA p profi ofitability Exit of US and AUS markets going well § Healthy cash balance § Go Good pro rogre ress on strat rategy Brand strength continues to gain traction in both markets § Transformation programme now underway § H1 20 RESULTS PRESENTATION 3 H1 20 RESULTS PRESENTATION 3
FINANCIAL REVIEW James Davies H1 20 RESULTS PRESENTATION 4
REMINDER OF OUR FOCUS FOR FY20 Three key areas: Capital allocation with financial discipline § Geographical focus § Investment in technology § H1 20 RESULTS PRESENTATION 5 H1 20 RESULTS PRESENTATION 5
RESILIENT UK PERFORMANCE PROFITABLE IN A CONTRACTING MARKET Market share of new listings • -15% +12% (2.7)% (34.5)% maintained, despite 15% YoY instruction decline Market share of completions up • 280bps ARPI increase of 12% largely • compensates for the volume £48.4m headwinds £47.1m £8.4m 32,850 £1,209 £5.5m 38,619 £1,353 Revenue down 2.7%, ancillary • share up to 45% Instructions ARPI Revenue Adjusted EBITDA Marketing investment down • 9% YoY H1 20 H1 19 After house strategy investment, • UK generated EBITDA of £5.5m H1 20 RESULTS PRESENTATION 6
UK PROGRESS INSTRUCTIONS AND ARPI No. £ 8,000 1,800 1,600 7,000 1,400 6,000 1,200 5,000 1,000 4,000 800 3,000 600 2,000 400 1,000 200 0 0 Apr-14 Jun-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Dec-15 Feb-16 Apr-16 Jun-16 Dec-16 Feb-17 Apr-17 Jun-17 Dec-17 Feb-18 Apr-18 Jun-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-14 Aug-15 Oct-15 Aug-16 Oct-16 Aug-17 Oct-17 Aug-18 Aug-19 Oct-19 ARPI Instructions won H1 20 RESULTS PRESENTATION 7
UK SCALE OPERATING LEVERAGE OVER TIME UK adjusted overheads as % of revenue UK CPI including portal costs £ % 250 900 800 Marketing as % of revenue 200 700 H1 18 H1 19 H1 20 25.2% 27.9% 26.1% 600 150 500 400 100 300 200 50 25.9% reported 100 23.1% underlying 0 0 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19 H1 20 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19 H1 20 H1 20 RESULTS PRESENTATION 8
MARKET-LEADING CANADIAN BUSINESS DRIVING GROWTH OUTSIDE QUEBEC (4)% 27% 16.4% (89.0)% 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 £17.7m £15.2m 20,486 £0.9m £0.1m 21,401 £942 £741 ARPI continues upward trajectory • Marginally profitable despite • Transactions ARPI Revenue Adjusted EBITDA material increase in marketing investment outside Quebec H1 19 H1 20 Pro forma H1 20 RESULTS PRESENTATION 9
AUSTRALIA/US CLOSURE UPDATE 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 H1 20 RESULTS PRESENTATION 10
GROUP INCOME STATEMENT Continuing operations H1 20 H1 19 Headline revenue up 12.5%, • Pro a proforma increase of 1.9% forma £m Disciplined marketing £m • investment with UK savings Revenue 64.8 63.6 covering increased investment Gross margin % 60.8% 62.1% in brand building in Canada Marketing costs (16.5) (16.7) Adjusted EBITDA profit of • Adjusted operating (loss)/profit (1.2) 4.8 £4.3m for continuing Adjusted EBITDA 4.3 8.4 operations against a loss of £21.0m in H1 last year H1 20 RESULTS PRESENTATION 11
CONSOLIDATED CASH FLOW BRIDGE Cash at 30 April 2019 £m 40 60 20 80 0 62.8 UK EBITDA 5.5 Canada EBITDA before marketing 4.3 Canada marketing costs (4.2) US pre-close EBITDA (2.7) AUS/US closure EBITDA AUS/US opening creditors, working (9.3) capital, capex and finance (10.2) Homeday (4.6) Cash at 30 October 2019 H1 20 RESULTS PRESENTATION 12 41.6
IN SUMMARY 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 H1 20 RESULTS PRESENTATION 13 H1 20 RESULTS PRESENTATION 13
STRATEGIC REVIEW Vic Darvey H1 20 RESULTS PRESENTATION 14
HOUSE STRATEGY 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 ESTATE TRANSFORM EVOLVE ENHANCE AGENT OF CUSTOMER OUR PERFORMANCE PRICING THE FUTURE IN THE FIELD PROCESSES OUR VALUES PEOPLE AND CULTURE MARKET-LEADING BRAND H1 20 RESULTS PRESENTATION 15
1 EVOLVE OUR PRICING Conclusion 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 H1 20 RESULTS PRESENTATION 16
2 ESTATE AGENT OF THE FUTURE Re-accelerate the growth Increase LPE productivity by delivering Start building the foundations of core by delivering rapid greater automation and efficiency of an estate agent innovation of the of the future customer journey H1 20 RESULTS PRESENTATION 17
2 ESTATE AGENT OF THE FUTURE Great first Living room impressions experience Kept in the loop When things go wrong Getting over the line The big day !"#$%&'() !"#$%#&$&'()*+%#",&-./.()&$)0&/%"$%#*1 *+&,-#.#/0() 2344("%&(3"&#)*.)##".)*&%#$,/&%(#63%#&()&%7./& /%"$%#*1 H1 20 RESULTS PRESENTATION 18
2 ESTATE AGENT OF THE FUTURE H1 20 RESULTS PRESENTATION 19
3 ENHANCING PERFORMANCE IN 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 H1 20 RESULTS PRESENTATION 20 H1 20 RESULTS PRESENTATION 20 H1 20 RESULTS PRESENTATION 20
4 TRANSFORMING OUR CUSTOMER PROCESSES 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 ! H1 20 RESULTS PRESENTATION 21 H1 20 RESULTS PRESENTATION H1 20 RESULTS PRESENTATION 21
CANADA OUTPERFORMS IN A DIFFICULT MARKET H1 Update 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 20 RESULTS PRESENTATION 22
H2 20 FOCUS Continue 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 23 H1 20 RESULTS PRESENTATION 23
Q & A
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