Preliminary Results 2020 Richard Harpin Founder & Chief - PowerPoint PPT Presentation

Preliminary Results 2020

Richard Harpin Founder & Chief Executive homeserveplc.com

Highlights FY20 revenue split FY20 revenue split • Another successful year – Revenue up 13% to over £1.1bn 7% 6% – Adjusted operating profit up 15% to £201.7m • Strong performance across all our Me Membership businesses – Successful launch in Japan • 15 HVAC acquisitions to advance our buy and build strategy 87% • Productive year in Ho Home Expe perts • 10% increase in final dividend to 17.8p reflecting strong FY20 performance and confidence in our resilient business model. HVAC Home Experts Membership homeserveplc.com 1

Coronavirus response Looking after our people • Swift implementation of working from home for all 6,000 office-based staff; gradual return to the office • No furloughing or redundancies during current lockdowns. Using spare capacity productively • Innovation accelerated in HomeServe Now and Checkatrade. Delivering for customers • Over 2,000 jobs completed under free emergency repairs offer for NHS and social care workers in the UK. Supporting trades • Alternative membership options at Checkatrade. homeserveplc.com 2

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David Bower Chief Financial Officer homeserveplc.com

Divisional financial summary Revenue Adjusted operating profit/ (loss) Δ % Δ % CC ¹ Δ % Δ % CC ¹ £million FY FY20 FY19 FY FY20 FY19 UK 37 372.9 391.7 (5)% (5)% 81 81.0 66.0 23% 23% North America 42 429.5 333.4 29% 25% 85 85.4 67.6 26% 23% France 111. 111.8 104.6 7% 8% 33.8 33. 33.3 1% 3% Spain 15 154.1 140.8 9% 11% 20 20.1 17.7 13% 16% New Markets – – – – (4 (4.7) (2.4) 91% 91% Home Experts 71 71.8 .8 40.4 78% 78% (13 (13.9) (7.4) 86% 86% Inter-segment (7 (7.8) (7.3) 6% 6% – – – – Group 1, 1,13 132.3 1,003.6 13% 12% 20 201.7 174.8 15% 15% ¹ Constant currency: • £7.6m net exceptional charge (FY19: net exceptional gain of £4.6m) $1.31:£1 € 1.13:£1 – £3.8m gain from sale of Italian associate – £3.6m gain from acquisition of remaining 30% of Habitissimo – £15m charge associated with impairment of LeakBot. homeserveplc.com 3

Highly cash generative and well funded Δ % Δ % CC ¹ £million FY19 FY20 Adjusted EBITDA 275.3 221.9 24% 24% Net Debt (including IFRS 16 lease liabilities) 509.0 304.7 67% Net Debt : Adjusted EBITDA 1.8x 1.4x £million Maturity profile £million FY20 Total gross debt <1year 639 36 Less IFRS 16 leases 2-4 years (59) 110 >4 years Gross bank debt Gr 634 580 58 Cash & cash equivalents 78 780 (130) Ne Net Debt (exc. IFRS RS 16) 450 45 Total debt facilities (Bank & US Private Placements) 780 ¹ Constant currency: $1.31:£1 Headroom 330 € 1.13:£1 • c.£330m headroom against available facilities • Year end leverage of 1.8x in line with expectations • Resilient, cash generative model. homeserveplc.com 4

Cash flow 58.1 Cash generated by operations £240.4m 2.9 11.8 (FY19: £202.2m) 73.5 11.5 148.3 Statutory Capex £85.9m 8.4 (FY19: £115.7m) 275.3 509.0 6.9 450.8 79.0 304.7 18.5 30.2 12.4 44.1 9.2 Net Debt 31 Adjusted Non Cash Working Repayment Tax Net Interest Capex - Capex - M&A Italy sale Ordinary Foreign Net debt Other Leases Net Debt 31 March 2019 EBITDA Items Capital of lease ordinary policy book dividend exchange acquired March 2020 principal M&A • £93.4m free cash flow (FY19: £44.3m) • £85.9m capex, £44.1m working capital absorption, in line with guidance • Rigorous approach to capital investment; large capital projects coming to an end, prepared & ready to act if suitable M&A targets become available. homeserveplc.com 5

Tom Rusin Global CEO Membership homeserveplc.com

Membership – strong growth • Sustainable growth in No North Ame merica – 4.4m customers (+9%), 250 new partners – Two new partners since year end – 1.7m households – Acquisition of ServLine for $24.1m brings new channel and product opportunities – Two whole home acquisitions for $8.0m to inform total home warranty product launch. • UK UK profit growth driven by efficiency gains and value add • Highest ever gross new customers in Fr France (0.2m) • Record number of jobs in Claims in Sp Spai ain. homeserveplc.com 6

HVAC – increasingly valuable • c.100k new customers in FY20 • Revenue up 83% to £80.9m • 15 HVAC acquisitions for a cash outflow of £25m across North America, France and Spain • Converting HVAC into an attractive Membership business – Leverage Membership marketing expertise to turn service and repair customers into members – Cross-sell plumbing & electrics cover – Completing repairs for existing Membership customers. homeserveplc.com 7

Ho How important is your Ho HomeS eSer erve e Current trading and outlook cover now cov now com compared to o a mont onth ago? go? 3% No change • Membership business model remains resilient 36% More • Solid performance at height of March and April lockdowns important 61% Less – Cancellations and renewals in line with historic trends important – Continued to provide high levels of service • Membership cost base c. 1/3 variable 69% 66% 50% • More impact in HVAC but continue to complete installations and repairs • Solid outlook for FY21: continued growth in North America; UK and France stable, reduced demand for I am more My home I'm more worried about environment is cautious at home Claims in Spain home more important to avoid things emergencies than ever going wrong • Milestone 2 targets for North America remain unchanged. Source: So April 2020 survey of HomeServe UK customers. homeserveplc.com 422 respondents. 8

Richard Harpin Founder & Chief Executive homeserveplc.com

A productive year Trades (k) Website Visitors (m) FY20 50 30.0 23.6 17.9 • Increasing consumer awareness – 32% increase in 16.1 40 20.0 web visitors to 24m 30 10.0 • Trades up 9% and revenue up 30%. 20 0.0 39 36 29 10 -10.0 Current trading 0 -20.0 • Consumer demand now at c. 85% of pre-crisis level FY18 FY19 FY20 • Trade membership holding up well, reaching 40k Revenue (£m) ARPT (£) 1,023 • Supporting trades through the crisis 930 1,000 839 35.0 800 • Continuing to innovate – affiliate memberships to 600 drive trades recruitment, video quotations 25.0 38.5 400 29.8 15.0 • £10m+ net P&L investment in FY21; break even for 22.4 200 FY23 - 5.0 FY18 FY19 FY20 • Milestone 1 targets unchanged. homeserveplc.com 9

Progress across the rest of Home Experts • Acquired remaining 30% of Ha Habi bitissimo in June 2019 and appointed Sarah Harmon as CEO – Working with Membership & growing national accounts • Profitable entry into Home Experts in North America with eLocal eLoc al – Low risk affiliate model generating automated calls to trades • New associate structure to expand Home Experts France • Small to medium impact at Habitissimo; $10m+ adjusted operating profit expected at eLocal in FY21. homeserveplc.com 10

Conclusion • Resilient Membership model; continuing to build Our purpose is to make Home Experts home repairs and • Key learnings improvements easy. – Developing a full Membership model with HVAC For both homeowners – Potential for profitable entry into new markets and trades. – Opportunities from more regular home working – We employ great people; phenomenal response to the crisis • Solid performance expected in FY21 with longer term growth prospects and stated milestone targets unchanged. Membership Home Experts HVAC Every job. Every home. homeserveplc.com 11

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Appendix • Group financial performance • Divisional KPIs and financial performance • Membership – UK – North America – France – Spain • Home Experts – Checkatrade – Habitissimo – eLocal • Group balance sheet • Group cash flow • Foreign exchange • IFRS 16 • Milestone targets • Business model homeserveplc.com 13

FY20 Group financial performance Δ % Δ % CC ¹ £million FY19 FY20 Total revenue 1,132.3 1,003.6 13% 12% Adjusted operating profit 201.7 174.8 15% 15% Interest (20.7) (13.1) 58% 57% Adjusted profit before tax 181.0 161.7 12% 12% Net Debt 509.0 304.7 67% Adjusted EBITDA 275.3 221.9 24% Net Debt : Adjusted EBITDA 1.8x 1.4x Adjusted earnings per share 41.3p 37.5p 10% Ordinary dividend per share 23.6p 21.4p 10% ¹ Constant currency: Currency benefit of c. £1.3m to adjusted operating profit • $1.31:£1 € 1.13:£1 Statutory PBT of £137.9m (down 1%) reflects net £7.6m exceptional charge • 10% growth in DPS reflects strong FY20 performance and expected resilience in the year ahead. • homeserveplc.com 14