nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx September 2014 Investor Presentation 1
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx Forward looking statements Forward-Looking Statements INCLUDED IN THIS PRESENTATION ARE FORWARD-LOOKING MANAGEMENT COMMENTS AND OTHER STATEMENTS THAT REFLECT MANAGEMENT’S CURRENT OUTLOOK FOR FUTURE PERIODS These expectations are based on currently available competitive, financial, and economic data along with our current operating plans and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward- looking statements. The forward-looking statements in this presentation should be read in conjunction with the risks and uncertainties discussed in the Pets At Home Annual Report and Accounts. 2
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx We have a special business with a great future 1 Clear leader & specialist retailer in the attractive UK pet care market 2 Unique ‘one stop shop’ proposition with nationwide retail footprint, pet services and omni-channel 3 Clear growth story with multiple levers 4 Strong financial performance and highly cash generative 3
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx The UK's leading specialist retailer of pet food, accessories, 1 pet-related products and services Clear leader & specialist retailer in the resilient £5.4bn UK pet care market* � 5 Flagship 386 Stores, 293 Vets, 148 Groom Rooms � 328 Superstores Stores � 52 Small Superstores � 1 New Format (Barkers) � 174 Vets in stores In-Store Services � 146 Groomers in stores � 117 Standalone Vet Practices Standalone � 2 Standalone Vet + Groomers Services Core customer is the engaged, multi-pet owner • *Source: OC&C 4
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx UK pet market is large, resilient and growing across all 1 categories Future growth driven by Positive year on year market Large and highly fragmented Services represent ~50% of humanisation, growth since 2008 delivering addressable market £5.4bn the market premiumisation and a CAGR of 2.6% increased uptake of services UK Pet Care Market CAGR CAGR 2008-12 2012-17 2008-12 2012-17 +4.3% £6.7bn Total 2.6% 4.3% Projection Insurance 8.0% 9.3% 2.6% 1.1 £5.7bn £5.4bn Grooming £5.3bn 0.2 3.3% 4.1% £5.1bn Total 0.7 £5.0bn 5.2% 3.1% 5.1% £4.9bn 0.7 Services 0.6 Vet £4.6bn 0.2 0.6 0.5 £4.4bn Services 0.5 0.2 0.2 1.4% 3.2% 1.9 0.2 0.4 0.2 0.2 0.4 0.2 0.2 1.7 1.6 Other 1.6 1.6 1.5 1.5 Accessories 0.3% 2.5% 1.4 Total 0.5 1.4 1.3% 2.6% Health & Accessories 0.4 Hygiene 0.4 2.6% 2.6% 0.4 0.4 0.4 0.5 Treats 0.4 0.3 0.4 9.5% 5.3% 0.4 0.3 0.4 0.3 Advanced 0.3 0.3 0.3 0.3 0.3 7.7% 7.7% 0.3 0.3 0.3 Nutrition 0.3 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 Total 0.1 2.4% 3.9% Food 0.8% 3.1% Other Food 1.9 1.8 1.7 1.7 1.6 1.6 1.6 1.5 1.5 2006 2007 2008 2009 2010 2011 2012 2013F 2017F UK Retail 1 : 2.2% Source: OC&C Note: All figures to calendar year end and exclude VAT 1 ONS data defined as all retailing including automotive fuel 5
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx We are gaining share across all segments of the market 1 UK Pet Care and Vet Market – Share, 2009–12 1 Food: Advanced Nutrition: Accessories: Vet Services: Potential to gain further share from Potential to gain share from Potential to gain further share from Potential to gain further share from independents & grocers vets and specialists specialists & independents independent practices Delta Delta Delta Delta 2009–12 (ppts) 2009–12 (ppts) 2009–12 (ppts) 2009–12 (ppts) 757 167 209 779 1,549 1,603 2,017 2,172 +0.4 4.4% 4.9% 1.9% 2.0% +0.1 -3.1 19.9% 6.4% 5.8% -0.6 23.0% 28.1% -6.4 2.8% 4.2% +1.4 34.5% +3.3 9.0% 5.7% 2.4% +0.0 8.4% 2.4% +0.1 -8.2 22.3% 80.8% -7.7 8.3% 30.5% 88.5% 16.8% +0.2 +0.2 0.5% 70.6% -3.7 74.3% 16.6% 0.3% 15.9% +2.3 13.5% 44.4% +6.1 38.3% 32.3% +5.2 27.0% +3.8 13.3% ³ 9.5% ³ +2.4 12.6% 10.1% 2.0% ² +3.9 5.9% ² 2009 2012 2009 2012 2009 2012 2009 2012 Pets at Home Grocers - Store Grocers - Online Other Pet Specialists Online Specialists Other Private and Small Vet Practices Source: OC&C ¹ Figures Exclude VAT 2 The 5.9% includes 3.4% from Companion Care and 2.5% from Vets4Pets (inc. Acquisition) – though V4P not acquired by Pets at Home until April 2013 3 Includes: CVS Group, IVC, Medivet Group, Vets Now (No revenue data for Goddards available) – figure is therefore likely higher 6
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx Online expected to gain share in pet products market by c1% per 1 annum, Click & Collect projected to outpace home delivery UK Pet Care Pet Products Online Fulfilment Projection Online Penetration of Pet Products vs Retail 2012 1 CAGR Total Pet Products 7.3% 2012-2017 Total UK Grocery 4.5% 40.0% Electronics & Electricals % of Total Category Sales 20.4% Vitamins & Dietary Supplements 17.4% Contact Lenses 16.8% Sports Nutrition +12.3% £386m 15.6% Clothing & Footwear £348m 15.0% Baby Home and Travel Equipment +61.2% 87 £314m 54 (23%) 10.5% Homewares (small) (16%) £281m 34 6.8% Home & DIY £249m 21 (11%) 4.9% Health & Beauty (8%) £216m 13 (5%) 8 (4%) Online Penetration of Pet Products 1,2 +7.5% 299 294 280 260 (77%) (84%) 236 (89%) (92%) 208 (95%) (96%) 7.3% 6.5% 2012 2013F 2014F 2015F 2016F 2017F 5.9% 5.1% Online Penetration 7.3% 8.1% 8.8% 9.6% 10.2% 11.0% 3.4% of Pet Products 2008 2009 2010 2011 2012 Home Delivery Click & Collect ² Source: OC&C 1 I ncludes Click & Collect 2 Food & Non-Food 7
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx Pets at Home’s core customers are engaged – driving enhanced 2 customer spend Pets at Home vs. Non Pets at Home Customers – Pet ownership Level of customer engagement drives increased spend 1 Dog Cat Average Total 1,000 £620 £890 1,000 Annual 900 900 Average Annual Spend of Average Annual Spend of Pets at Home Customer (£) Pets at Home Customer Spend 800 800 700 700 600 600 500 500 (£) 400 400 100% 300 300 200 Cat Multi 200 Cat Multi 100 100 0 0 Multiple 80% <3.5 3.5-6.5 >6.5 <3.5 3.5-6.5 >6.5 44.1% Pet Engagement (Out of 10) Engagement (Out of 10) Customers 57.2% Dog Multi Dog Multi Influence of engagement on customers’ key purchase criteria 2 60% Less Important More Important Other Only (4)% 40% Other Only (16)% Cat only Single Cat only 55.9% Pet (3)% Customers 42.8% Products and Products and Price is more important to less 20% Price is more important to less 5% services are more services are more engaged customers engaged customers 1% important to highly important to highly Dog only Dog only engaged customers engaged customers (11)% 0% (7)% Non Pets at Home Customer Customer 8% Note: All charts based on survey of >5,000 pet owners conducted in July 2013 7% Price Products 1 Engagement score based on sum of scores (1-5) for 2 questions — I tell my pets I love them at least twice a day 17% — I take my pets to the vet regularly for check-ups Convenience Colleagues 2 Difference of engaged customers vs. less engaged customers, showing % delta from the average score 8
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx Colleague & customer engagement is central to our success 2 LFL Growth: Engagement High Colleague Engagement and Retention Trained and Experience Colleagues 93% 93% 4 step training; enhanced salaries for qualified colleagues 91% 83% 83% Step 4 Step 3 81% Step 2 Step 1 Engagement Retention Expertise FY12 FY13 FY14 Pawsitively Engagement Retention outrageous Selling service through Outrageous Customer Service Resulting in Higher Basket Size 1 expertis e Fish4Opinion Net Promoter Score Friendliness Knowledge £22.00 84% 84% £22.04 5% 7% £21.01 £20.64 77% Less than satisfied Highly satisfied Less than satisfied Highly satisfied FY12 FY13 FY14 9 1 Data from FY14 prepared by SMG
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx Our Strategy: Delivering across the PawPrint allows us to drive 3 growth in like-for-like, space and gross margin Key Growth Drivers Product and Innovation VIP Club LFL Omnichannel Drivers of Core Growth Services (Vets & Groomers) Optimised Store & Pet Services Roll Space Out Product Mix & Own Brand Gross Margin Services Maturity 10
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