Becoming more specialist and most loved · Online sample includes PetPlanet, Amazon, Zooplus,...
Transcript of Becoming more specialist and most loved · Online sample includes PetPlanet, Amazon, Zooplus,...
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
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Becoming more specialist and most loved
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Customer vision: helping pets and their owners live long and happy lives together
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Market & competitive backdrop reinforces our aspiration to be MORE specialist and MOST loved
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Pet market continues to show resilience & premium growth vs general retail
Online participation growth is <1% per year, store collection the fastest growing segment
Pet market
General retail
2.6%
2.2%
3.5%
1.5%
2008-12 2012-14
3.4%
5.9% 7.3%
8.6%
2008 2010 2012 2014
Online sales participation of total pet market
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Market & competitive backdrop reinforces our aspiration to be MORE specialist and MOST loved
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12% 14%
75% 72%
5% 3%
1% 3% 7% 9%
2012 2014
44% 53%
47% 35%
9% 12%
2012 2014
Food & Treats* Advanced Nutrition Vet Services Accessories
33% 36%
17% 17%
22% 22%
9% 11%
20% 15%
2012 2014
Source: OC&C data. Vet corporates include CVS, Medivet and Independent Vetcare (IVC) * Total Food including grocery & Advanced Nutrition
Pets at Home Grocers Pet specialists (Incl. vets)
Online specialists Other Vet corporates Vet independents
6% 9% 11%
13%
83% 78%
2012 2014
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We are the only true omnichannel specialist pet retailer UK wide stores & C&C, services, customer loyalty programme
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Store based pet specialists Online pet specialists
Store numbers 413 50-100 ✗ Transactional website ✓ ✓ ✓
SKU counts c13,000 c3,000-40002 c7,500 – 10,0003
Colleague advice ✓ ✓ ✗ Vets & groomers ✓ ✗ ✗
Customer loyalty programme ✓ ✗ ✗4
Customer acquisition Natural search / CRM CRM driven Paid for3
C&C ✓ ✓ ✗3
Home delivery time1 Within 3 days 2-3 days 2-3 days
Avg Free delivery threshold £29 £36 £25
Avg Delivery charge1 £4.95 £6 £3.17
Source: Company websites & Brandmatch data 1 refers to standard UK delivery 2 exception Pampurred Pets 3 exception Amazon 4 exception Zooplus Store based sample includes Pets Corner, Jollyes, Pampurred Pets. Online sample includes PetPlanet, Amazon, Zooplus, Fetch, Pet Supermarket
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
And we have unique attributes & capabilities to leverage
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Market leading brands & customer relationships
Incomparable range, innovation, refreshment & sourcing advantages
Sector leading colleague expertise & qualified professionals
Best value private brands & own labels, plus exclusives
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Delivering on the PawPrint supports the core drivers of growth
Product and Innovation
Product Mix & Own Brand
Optimised Store & Pet Services
Roll Out
Key Growth Drivers
Driv
ers
of C
ore
Gro
wth
LFL
Space
Margin
VIP Club
Omnichannel
Services (Vets & Groomers)
Services Maturity
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Becoming more loved by pet owners
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Our customer is the engaged pet owner
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What defines an engaged customer?
Source: Pets at Home survey of >5,000 pet owners July 2015 Note: 5 = “Strongly agree”, 1 = “Strongly disagree” * Scores reversed for this question
2.00
2.50
3.00
3.50
4.00
4.50
My pets are avery big part of
my life
I like topamper my
pets and makethem feelspecial
I always lookfor the
cheapestprices whenbuying pet
food
Nothing that Ibuy is too good
for my pets
My pets aremy children
I tell my pets Ilove them atleast twice a
day
I take my petsto the vet
regularly forcheck-ups
Non PaH customer
PaH customer
*
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
To become more loved by engaged owners, we focus on the criteria they value most: range, quality & advice
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Customer rankings of key purchase criteria from 1-5 (where 5 is most important)
2.00
3.00
4.00
5.00
Highly engaged pet owners Low engagement pet owners
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
A wide range of Services & specialist advice from colleagues give customers more reasons to shop with us
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Showcase our knowledge & passion, to help customers make the most of their lives together
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Widen the range of care plans in our vet practices
Be the first place people think of when they buy a new pet
Ensure colleagues have more, not less, customer facing time
Help every customer to feed a better diet – bridge the gap to AN
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Strengthening our specialist credentials
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Expand & enhance our range of premium pet food diets
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New brands
Exclusive launch of US brand
High quality dehydrated food
Innovate
Develop & widen private label
New private labels
Wainwright’s frozen
Targeted at small breeds
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
And use VIP to move customers towards better pet diets & ultimately, up to Advanced Nutrition
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Sign up
Blunt relationship
Customer
Simple pet info
Generic communications
Some pet targeting
Pet Personal
Advanced Nutrition
Prescription food
Tailored food offerings
Relevant vet benefits
Tailored health and hygiene
All key pet types / ages /
Breeds ...
3rd party services
Designed around My VIP
We are here
Develop the relationship with our VIPs, moving towards a lifetime value view of the customer
Personalised online offers & content
Repeat order reminders
Brand specific rewards
Tailored services
Pet specific content
Best value and priority for VIPS
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
c50% of our online orders are picked up in-store
Store convenience for frequent food purchase
Stores will always be a fundamental part of our proposition
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Vet & grooming services will never be delivered online
Live pet & grooming provides entertainment & education
Customers want to bring their pet, & talk pet with other
owners Average basket <£20, not a
natural online market
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Whilst adapting to our customers shopping habits by working towards a seamless offline & online experience
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Order in-store kiosks
Increase extended
online product range
Order in-store via colleague
PetPads
Richer online content & imagery
Digital screens to showcase
extended range
Greater potential for
online bookings
VIP App
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Trialling new formats offers further routes to growth & retains our specialist edge over the competition
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Niche, additional market segment Highly engaged dog owners Affluent high street locations
For the core Pets at Home customer Convenience format Infill locations or towns without retail parks
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Primary Practices
In-store or standalone
Extended hours
Super Surgery
24/7
CT scanner
Particular pet
specialists
Grow our veterinary business through through convenience & specialisms
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Our primary practices can inter-refer & leverage the benefits of other Vet Partners
CT scanner
Particular pet specialists
Super Surgery
In-store or standalone
Extended hours
24/7
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Acquiring specialist referral hospitals to access an additional and complementary segment of the market
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Solidifies our specialist credentials & reputation Captures additional market spend Vertical integration Minimises revenue leak from primary practices
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
The long term potential of our retail and services model
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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
We know that Services and omnichannel bring a strong benefit to our retail business
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191 237 179 233 290 417
Store Other Vet, Groom, Web
Additional customer
spend
Last 12 Month VIP Club Member Spend (£)
145
Captures last 12 month VIP send to start Oct 2015. Vets consist of Companion Care practices. Accounts for total transactions including online
Visit Freq 6.9 9.5 10.0 9.3 14.1
# VIPs 2,262,418 104,682 67,739 207,688 8,490
12.7
22,812
21.4
1,183
17% 26% 40% 30% 69% 36% 81% y/y growth
Store only Store + Groomer
Store + Online
Store + Vet
Store + Vet + Groomer
Store + Vet + Online
Store + Vet + Groomer + Online
71 83 183
297
336
436
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Services will also underpin margin & deliver accretion over time
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Store only Store + Groomer + Vet
EBITDA/sq ft from store
EBITDA/sq ft from store,
groomer & vet fee income
Combined Services
Uplift +24%
Vet rent payment to store
Store only represents mature superstores opened FY10 & earlier Store + Vet + Groomer represents mature superstores, mature vets opened in FY08 & earlier, and Groomers opened FY12 & earlier Number of stores used in analysis: Store only = 92, Store + Vet + Groomer = 9
The uplift has grown as vets &
groomers mature further
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
FY10 FY11 FY12 FY13 FY14 FY15
> 5 yrs old≥ 1 yr & ≤ 5 yrs old
Core superstore portfolio is delivering returns in line with our expectations & gives us confidence in our rollout plans
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Growing retail sales densities across the store estate
Store age …
Mature stores
Immature stores
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
205
130
229
413
83
132
62
120
89
87
Groom Room
Standalone Vet
In-store Vet
Stores
Existing Potential Retrofits Potential New
Current Portfolio (excludes Barkers & new formats)
Our opportunity is both large & long term: growth will be fuelled by rollout and maturity benefits for at least another 15 years
Total Potential UK Estate
Approximate time to full rollout & maturity
1
1
25
>500
>450
>250
>350
11 yrs
16 yrs
16 yrs
10 yrs
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$33.8m
$38.7m
H1 FY15 H1 FY16
6.3p
7.2p
H1 FY15 H1 FY16
£381.5m
£404.5m
H1 FY15 H1 FY16
Strong growth & highly cash generative business
EPS Revenue & Like-For-Like Growth
4.2% 1.8%
FCF & Conversion
38.0% 47.3%
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£22.3m
£29.5m
Net debt / EBITDA
2.0x
H1 FY15
1.5x
H1 FY16
nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx
Becoming MORE specialist and MOST loved
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Operating as the significant leader in a resilient market
Continue to accentuate our strengths with core focus on the engaged pet owner
Delivered through our stores, colleagues, services and VIP club
Long term maturing store and services opportunity underpinning space and profit growth
Consistent cash returns on invested capital & strong cash generation