Post on 04-Aug-2020
Interim Results2018
1
INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Paul PindarChairman
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
H1 2018 Highlights
1. 200 bps higher than guided in the trading update on 2nd July 2. Populus Omnibus June 2018 (August 2018: 11.2%)
193 Stores
24 Stores
GROUPREVENUE
+63%(1)
GROSS MARGIN
54%
GROUP NON MATTRESS
REVENUE
+168%REPEAT
PURCHASES
13%
RETURN RATES
11%
BRAND AWARENESS
7.6%(2)
(UK un-prompted)
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Rationale for refocusing on UK&I and France
+ UK&I and France make
up approximately 50% of
the European mattress
market
+ Despite growth of 95%
across the rest of Europe
(H1 2017: £2.2m), the
negative contribution
before overhead of
£2.4m (the same as UK&I
and France combined)
was disproportionate
UK&I
£10.3m
(£0.7m)
£3.9m
(£1.7m)
£4.3m
(£2.4m)
Revenue
Contribution after marketing, before overhead
France
Rest of Europe
UK, £2.1bn
FR, £0.8bnDE, £1.4bn
Rest of Europe, £2.0bn
31%
22% 13%
34%
Mattress Market (1) Revenue & Contribution(2)
1. Source: Euromonitor, eve estimates
2. for the period H1-2018. Excludes RoW revenue
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
financial reviewCFO - Abid Ismail
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
1. Adjusted EBITDA is before accounting for IPO related expenditure (H12017: £2.1m, H12018: £0.0m) and share based payment charges (H12017: £0.0m, H12018: £0.1m)2. Financial data has been rounded for presentation purposes. As a result of this rounding the totals, comparatives and calculations presented in this document may vary slightly from the arithmetic totals or calculations using such data.
+ Top line growth of 63% YoY
+ Gross margin diluted via
non mattress products and
omni channel
+ 450 bps improvement in
marketing efficiency
+ Closing cash of £16.7m
H12018
H12017 Mvt
Revenue (£m) 18.8 11.5 63%
Gross profit (£m) 10.2 7.0 47%
Gross margin (%) 54.4% 60.4% (600bps)
Marketing (£m) (12.3) (8.0) (52%)
Marketing / Revenue (%) (65.2%) (69.7%) 450bps
Contribution before overheads (£m) (4.8) (2.7) (78%)
Contribution before overheads (%) (25.3%) (23.2%) (210bps)
Adjusted EBITDA(1)
(£m) (11.9) (6.9) (5.0)
Adjusted EBITDA (%) (63.4%) (60.2%) (320bps)
Reported Profit (12.0) (9.1) (2.9)
Closing Cash 16.7 37.2 (20.5)
Financial summary
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Revenue H1 2018 +63%
Group Total Revenue
Segmental Revenue + UK&I broadly in line with
expected growth.
+ Over 75% of group revenue
generated in the UK&I
and France.
+ Direct to consumer (D2C)
remains the focus and
represented 85% of revenue,
however omni-channel
(OMNI) has demonstrated
good growth.
£18.8m
£11.5m
89%D2C
85%D2C
11%OMNI
15%OMNI
+63%
H1 2017 H1 2018
£10.3m
£2.5m
£3.9m+53%
UK&I FRANCE RoW
£6.3m
+64%
£2.2m
£4.3m+95%
£0.5m £0.4m(26%)
RoE
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
1. Group revenue split based on total revenue attributable to mattress vs non-mattress products, and does not represent split of quantity of orders
Non-Mattress Revenue
+ Non mattress revenue
has grown YoY in line with
product expansion
(10 to 15)
+ Revenue from non mattress
products makes up 17% of
group revenue
(H1 2017: 10%)
£18.8m
£11.5m
H1 2018H1 2017
17%Non Mat
10%Non Mat
83%Mattress
90%Mattress
Group revenue(1)
Increase in non-mattress revenue
from £1.2m to £3.2m
+168%
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Return rates Stable in UK&I, improving in France
11% 11%
13%
11%12%
Group UK&I France
H1 2017 H1 2018
13%
15%
Other
1. Return rates % is based on returns value as a % of total sales recognised before returns. The figures contain an element of provision in line with the group accounting policies which can be referenced in the 2017 annual report.
+ Return rates across the
group have continued to
fall but are expected to
stabilise at current levels.
6%
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
51.00%
52.00%
53.00%
54.00%
55.00%
56.00%
57.00%
58.00%
59.00%
60.00%
61.00%
Gross margin bridge
+ Gross margins remain
strong with the net
260bps reduction driven
predominantly by the
increase in non mattress
sales
H1-17 Reported
gross margin
Adjust for: non underlying
items(1)
H1-17 Underlying
gross margin
Return rate movement
Non mattress mix
Revenue mix - Increased B2B
H1-18 gross margin
60.4%
(3.40%)
57.0%
1.40%
(3.60%)
(0.40%)
54.4%
1. Relates to release of provision in H1 2017.
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Marketing - Building a strong base United Kingdom
H1-18 H1-17 Movement
Revenue £10.3m £6.3m +64%
Marketing % 52.0% 64.1% (1210 BPS)
CPA(1) £154 £210 (27%)
Unprompted Brand Awareness(2) 11.2% 5.4% 2x
Contribution after marketing before overheads (£0.7m) (£0.7m) -
+ Investment in the eve brand
has shown strong progress
with unprompted brand
awareness up 2x
+ Efficiency coming through
- CPA down from £210
to £154
+ Impact on gross margin of
non mattress mix & omni
resulted in a broadly flat
contribution after marketing,
before overheads
1. Defined as total marketing spend divided by total orders in the period through all channels
2. Source: Populus Omnibus August 2017, August 2018. (June 2018: 7.6%, June 2017: 4.1%)
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
H1-18 H1-17 Movement
Revenue £3.9m £2.5m +53%
Marketing % 78.7% 68.0% (1070 BPS)
CPA (1) £255 £243 (5%)
Unprompted Brand Awareness (2) 5% 3% 1.6x
Contribution after marketing before overheads (£1.7m) (£0.7m) (£1.0m)
Marketing - Earlier investment stage than UK France
+ Significant increase in
brand awareness with a
1.6x increase.
+ Marketing % and CPA
trends highlight the earlier
investment stage of France
compared to the UK
1. Defined as total marketing spend divided by total orders in the period through all channels
2. Source: YouGov brand tracker August 17, August 18 (February 2018: 4%)
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Cash
+ UK&I approached break
even contribution after
accounting for marketing
but before overheads.
+ France contributed less
than targeted owing to
less efficient marketing
in H1.
+ Other European
contributions were
significantly more negative
than targeted.
+ Non-current asset
expenditure reflects
investment in IT and
lease deposits.
£m
26.9
16.7
0.71.7
2.4
7.1
2.3 0.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Openingbalance Jan18
UK&IContribution
FranceContribution
Other territoriesContribution
Overheads WorkingCapital
Adjustment &Non Cash Items
Non-currentasset
expenditure
Closingbalance Jun18
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
refocused strategyCEO - James Sturrock
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Positioning Build on our No.1(1) online mattress
position in the United Kingdom
& France
eve strategycore focus
ProductIncrease focus on the successful
investment in mattress and non
mattress ranges
Experience Use online position and offline
expansion to further invest in
customer experience
+ +
1. Source: google trends index, 1st Jan 2018 - 30th June 2018
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Building on strong base in UK & FRPosition - Brand awareness
• Most well known bed in a box brand• 5th most well known mattress brand
(7th in August 2017)
• Most well known bed in a box brand• 8th most well known mattress brand
(9th in August 2017)
UK - Unprompted awareness France - Unprompted awareness
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%
Bruno
Casper
Simba
DODO
Emma
Tediber
eve Matelas
Tempur
Treca
Mérinos
Simmons
Bultex
Epeda
Dunlopillo
Source: Populus Omnibus August 2017, August 2018: Source: YouGov brand tracker August 17, August 18
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%
Bensons for Beds
Simba
Ikea mattresses
Sleepeezee
Sealy
eve
Slumberland
Tempur
Dreams
Silent Night
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Most searched bed in a box brand Most searched bed in a box brand
Building on strong base in UK & FRPosition - Google Trends
39
35
21
97
evemattress
Simba mattress
Casper mattress
Leesa mattress
Ottymattress
24
21
11
96
evematelas
Emmamatelas
Simba matelas
Tediber matelas
Caspermatelas
United Kingdom - H1 2018 France - H1 2018Source: Google Trends Index, 1st Jan - 30th June Source: Google Trends Index, 1st Jan - 30th June 2018
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Building on strong base in UK & FRPosition - Branded Traffic
H1 2018H1 2017 H1 2018H1 2017
58%67%79%
62%
42%33%21%
38%
Brand Traffic %
Other Traffic %
United Kingdom France
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Building on strong base in UK & FRProducts - Traction on product extensions
Increase in non-mattress revenue
from £0.7m to £1.8m
+170%
Hybrid MattressLaunched May18
of total mattress sales1
25%Increase in
non-mattress revenue
from £0.3m to £0.7m
+160%
Mattress orders
with a bed frame2
8%
1. Based on July Trading via UK website, quantity of mattresses sold2. Based on H1 2018 trading via France website
United Kingdom France
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Building on strong base in UK & FRExperience - Partnerships
9 Stores
10 Stores
56 Stores
193 Stores
24 of 330 Stores
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
+ 360 Campaign Aug18Core message:
“Great sleep, delivered in a box… Dreams do come true”
+ ITV & Channel 4 prime time coverage
+ Online competition on both eve & Dreams websites
Building on strong base in UK & FReve X Dreams - Launched July 2018
X
great sleep delivered
eve mattresses now available to try and buy in over 195 Dreams stores nationwide
dreams.co.uk/about-eve
do come truein a box
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Based on orders in a period from previous customers as a % of total orders via websites
3.3%
9.6%
13.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
H1-16 H1-17 H1-18
Building on strong base in UK & FRExperience - Repeat purchases
2.3%
9.0%
11.9%
13.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
H1-15 H1-16 H1-17 H1-18
United Kingdom France
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Building on strong base in UK & FRExperience - Customer advocacy
United Kingdom France
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Progress in July and August
+ Refocused geographically
to focus on UK&I and France
in H2-2018.
+ Cost savings plan initiated
– Planned marketing spend
in H2 to be reduced,
remaining spend re-focused,
headcount reduced by
c20%, and other overheads
rationalised
+ Restructuring costs
estimated at approximately
£0.8m for the year
+ New CEO appointed
James Sturrock
Restructure
+ July & August combined
have delivered YoY revenue
growth of c40% across UK&I
and France
+ The eve/Dreams August
campaign was very
successful and the
partnership is currently
trading ahead of initial
expectations
Trading
+ New TV creative and
combined offline and
online campaign targeted
for late October
+ Aspirational campaign
which will build on the
successful learnings from
the sleep rich TV creative
New TV creative
+ Launch of expanded
mattress and bed frame
range planned for Q4
Product launches
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
H1 2018 Summary
+ Market opportunity remains undiminished
+ Shift to online is continuing
+ eve is the most well known bed in a box brand in the UK and France
+ Operating metrics in the UK are improving, confident in France
+ Restructuring has been swift and effective
+ Renewed focus on core markets
+ Confident in long term prospects
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Appendix2018
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INTERIM RESULTS SEPTEMBER 2018 H1 EVE SLEEP
Income Statement
1. Financial data has been rounded for presentation purposes. As a result of this rounding the totals, comparatives and calculations presented in this document may vary slightly from the arithmetic totals or calculations using such data2. Adjusted EBITDA is before accounting for IPO related expenditure (H12017: £2.1m, H12018: £0.0m) and share based payment charges (H12017: £0.0m, H12018: £0.1m)
H1-18 H1-17 Movement
Revenue (£m) 18.8 11.5 +63%
Gross margin (£m) 10.2 7.0 +47%
% of revenue 54% 60% +600bps
Distribution costs (£m) (2.3) (1.3) (75%)
% of revenue (12%) (11%) (100bps)
Marketing (12.3) (8.0) (52%)
% of revenue (65%) (70%) +500bps
Wages & salaries (2.8) (2.0) (44%)
% of revenue (15%) (17%) +200bps
Other admin expenses (4.8) (2.5) (87%)
% of revenue (25%) (22%) (300bps)
Administrative expenses (£m) (19.9) (12.6) (58%)
% of revenue (105%) (109%) +400bps
Adjusted EBITDA (11.9) (6.9) (73%)
% of revenue (63%) (60%) (300bps)
Loss for the period (12.0) (9.1) (32%)
+ Adjusted EBITDA for the
period was £11.9m loss
Loss for the period
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
Balance sheet
+ Inventories remain at low
levels despite growth
+ Capital expenditure
requirements remain
low due to the group’s
outsourced business model
+ Closing cash of £16.7m at
30 June 2018
Jun-18 Dec-17 Jun-17Non Current Assets - £m
Property, Plant and equipment 0.0 0.0 0.0
Intangibles 0.6 0.4 0.0
Other non-current assets 0.4 -
Current Assets - £m
Inventories 1.0 0.7 0.5
Trade and Other Receivables 2.8 4.2 1.5
Cash and Cash Equivalents 16.7 26.9 37.2
Total Assets - £m 21.5 32.2 39.1
Current Liabilities - £m
Trade and other payables 5.6 4.5 3.4
Provisions for liabilities and charges 1.0 0.8 0.8
Total Liabilities - £m 6.6 5.4 4.2
Net Assets - £m 14.9 26.8 35.0
Equity attributable to equity holders of the parent
Share Capital 0.1 0.1 0.1
Share premium 36.7 36.7 36.7
Share based payments reserve 0.1 0.1 -
Retained Earnings (22.1) (10.2) (1.9)
Total equity - £m 14.9 26.8 35.0
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP
H1-18 H1-17 FY-17
Operating Loss (£m) (12.0) (9.1) (19.0)
IPO related expenditure (£m) - 2.1 2.1
Operating loss before IPO related expenditure (£m) (12.0) (6.9) (16.9)
Depreciation & amortisation (£m) 0.1 0.0 0.0
Share based payment charge (£m) 0.1 - 1.8
Working capital movement (£m) 2.1 (1.3) (3.0)
Net cash outflow from operations (£m) (9.7) (8.2) (18.1)
Net cash outflow from investing activities (£m) (0.6) (0.0) (0.4)
Net cash inflow from financing activities (£m) 0.0 40.8 40.8
Net increase/(decrease) in cash for the period (£m) (10.3) 32.6 22.3
Opening cash for the period (£m) 26.9 4.6 4.6
Closing cash (£m) 16.7 37.2 26.9
Cash flow
+ Closing cash of £16.7m
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INTERIM RESULTS SEPTEMBER — 2018 H1 EVE SLEEP