2014 fy presentation final
DESCRIPTION
Document reporting the yearly progressTRANSCRIPT
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Full year resultsYear ended 31 December 2014
17 March 2015
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Disclaimer
This presentation, which has been prepared by JUST EAT plc (the "Company"), includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms believes, estimates, plans, projects, anticipates, expects, intends, may, will, or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations. Any forward-looking statements in this presentation reflect the Companys current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. No representations or warranties are made as to the accuracy of such statements, estimates or projections. Other than in accordance with its legal or regulatory obligations, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.
In making this presentation, the Company is not seeking to encourage any investor to either buy or sell shares in the Company. Any investor in any doubt about what action to take is recommended to seek financial advice from an independent financial advisorauthorised by the Financial Services and Markets Act 2000.
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Todays agenda
Highlights David Buttress
Financials Mike Wroe
Strategy David Buttress
Q&A
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Highlights
Orders up 52% to 61.2m (2013: 40.2m)
GMV1 up 53% to 1.04bn (2013: 0.68bn)
Revenue up 62% to 157.0m (2013: 96.8m)
Underlying EBITDA2 up 131% to 32.6m (2013:
14.1m)
Cash generated 38.1m (117% Underlying EBITDA)
Continued investment for long-term growth
Active users3 up 37% to 8.1m (2013: 5.9m)
13.9
25.3
40.2
61.2
FY 2011 FY 2012 FY 2013 FY 2014
How did we do?
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Orders (millions)
1.0+bnGMV
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Highlights
Investing in our brand
Mobile-led execution
Progress on our three strategic initiatives:
improving the consumer experience
bringing greater choice
driving channel shift
Seven M&A transactions completed, including Alloresto and iFood
three further transactions completed post year-end
How did we drive results?
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Mike WroeCFO
Financials
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Income statement
Strong revenue growth
up 65% on forex neutral basis
Significant on-going investment
Operational leverage continues
Underlying EBITDA margin
expansion
All segments performing
m 2014 2013 Growth
Revenue 157.0 96.8 62%
Cost of sales (16.1) (10.0) 61%
% of Revenue 10% 10%
Salaries (52.0) (38.0) 37%
% of Revenue 33% 39%
Marketing (36.7) (23.4) 57%
% of Revenue 23% 24%
Overhead costs (19.0) (11.7) 62%
% of Revenue 12% 12%
Total Admin Costs (107.7) (73.1) 47%
% of Revenue 69% 76%
Joint venture and associates (0.6) 0.4
Underlying EBITDA 32.6 14.1 131%
Underlying EBITDA margin 21% 15%
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Income statement
Underlying EBITDA up 131%
Operating profit up 179%
Other gains are non-cash,
non-taxable
Adjusted effective tax rate4
of 22.6%
Adjusted EPS up 200%
m 2014 2013 Growth
Underlying EBITDA 32.6 14.1 131%
Underlying EBITDA margin 21% 15%
Depreciation & amortisation (6.2) (4.0)
Long term employee incentive costs (4.9) (1.7)
Exceptional items (2.7) (1.0)
Foreign exchange gains and losses 0.2 (0.6)
Operating Profit 19.0 6.8 179%
Operating Margin 12% 7%
Other gains 38.2 3.4
Finance income 0.4 0.2
Finance costs (0.2) (0.2)
Profit before tax 57.4 10.2
Taxation (5.6) (3.4)
Profit after tax 51.8 6.8 662%
Basic EPS (p per share) 9.8 1.5
Adjusted EPS4 (p per share) 4.2 1.4
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Success-based revenue model
Commissions
Payment card/admin fee revenue
Small fee typically charged when consumers pay online
Same price for consumers as ordering directly from TRs
Rate charged varies by country
A
B
Order-driven (B2C Revenue)
Top-placement fee and other revenue
Promotional top-placement
Branded commodity products (bags, pizza boxes, menu cards, etc.)
D
Connection fees revenue
One-off cost paid by TRs to join the network5
Pricing depends on market maturity
C
89% of revenue driven by consumer orders
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6%13%
76%
5%
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13.9
25.3
40.2
61.2
FY 2011 FY 2012 FY 2013 FY 2014
Revenue drivers
+9%2.29
(2013: 2.11)
ARPO6
Orders (millions)
Active users (million)
2.4
4.1
5.9
8.1
FY 2011 FY 2012 FY 2013 FY 2014
17.0
29.9
36.4
45.7
FY 2011 FY 2012 FY 2013 FY 2014
+22% +26%
Takeaway Restaurants (000)
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+82% +59% +52%
+71% +44% +37% +76%
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13.9
25.3
40.2
61.2
FY 2011 FY 2012 FY 2013 FY 2014
Revenue drivers
Orders (millions)
Active users (million)
2.4
4.1
5.9
8.1
FY 2011 FY 2012 FY 2013 FY 2014
17.0
29.9
36.4
45.7
FY 2011 FY 2012 FY 2013 FY 2014
+22% +26%
Takeaway Restaurants (000)
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+82% +59% +52%
+71% +44% +37% +76%
Frequency of orders increased
Orders per restaurant growing
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Revenue growthFY 2014 Revenue growth by segment (m)
66% 10% 83%7
96.8
43.9 1.4 1.2
13.5 0.2 157.0
Revenue FY2013
UK -B2C UK - B2B DK Other Head Office Revenue FY2014
Forex neutral: 16% 96% 65%
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62%
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Revenue grew 62% to 157.0m
Gross margin remains steady
Strong operational leverage
52.0m(+37%)
Employee costs
36.7m(+57%)
19.0m(+62%)
Marketing Overhead costs
Continue to invest for growth
Continued to benefit from operational leverage
33% of revenue(2013: 39%)
23% of revenue(2013: 24%)
12% of revenue(2013: 12%)
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Underlying EBITDA by Segment
131% increase in underlying EBITDA
UK Underlying EBITDA margin up to 40%
Other segment revenues up 83%
(up 97% forex neutral); losses flat
Continued investment in growth
tech and product
marketing
centre
m 2014 2013
UK 45.9 25.5
Margin % 40% 37%
DK 5.1 4.6
Margin % 40% 40%
Established geographies
UK + DK 51.0 30.1
Margin % 40% 37%
Other (11.8) (11.7)
Margin % (40)% (72)%
JV and associates (0.6) 0.4
Head Office (6.0) (4.7)
Underlying EBITDA 32.6 14.1
Margin % 21% 15%
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Net incomeFY 2014 net income to Underlying EBITDA (m)
4.2p9.8p
Adjusted EPS9
Basic EPS
15
52.0
20.622.4
32.6
2.7
4.92.1
6.5 0.8
3.3
(0.6) (0.2) (38.2)
(0.3) (0.4)
Netincome8
Taxes Forex Other gains Exceptionalitems
Long termemployeeincentive
costs
Adjustednet income
Acquiredamortisation
Taxadjustment
Adjustednet income
Net financeincome and
NCI
Taxes Internallygenerated
amortisation
Depreciation UnderlyingEBITDA
Net income8
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117% cash conversionFY 2014 Underlying EBITDA to operating cash flow bridge (m)
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133% 117%
43.3
38.1
32.6
11.5
6.0
(4.4)(2.3) (0.1) (5.2)
UnderlyingEBITDA
Increase incash due torestaurants
Net changein otherworkingcapital
Tax IPO costs Others10 Normalisedoperatingcash flow
Loanrelated to
LTIP
Statutoryoperatingcash flow
Others10
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Cash flow
A
B
C
Net cash from operating activities 38.1m 117% conversion to operating cash flow Impacted by JSOP loans
Net cash from financing activities 78.9m Net proceeds from the IPO 95.7m less 18.1m dividend
paid in April 2014
Net cash used in investing activities 19.3m 7 M&A transactions, including Alloresto and iFood
A
B
C
m 2014 2013
Underlying EBITDA 32.6 14.1
IPO costs (2.3) (1.4)
Other (0.1) (0.9)
Operating cash flow 30.2 11.8
Change in working capital 17.5 11.6
JSOP receivable* (5.2) -
Taxes paid (4.4) (4.2)
Net cash from operating activities 38.1 19.2
Net cash used in investing activities (19.3) (7.7)
JSOP subscription proceeds* 5.3 -
Net cash from financing activities 78.9 -
Net increase in cash and cash equivalents 103.0 11.5
Cash and cash equivalents at the beginning
of the year 61.6 50.0
FX movement (0.5) 0.1
Net cash and cash equivalents at the
end of the year11
164.1 61.6D Since year-end, c. 35m invested in M&A
D
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Balance sheet
Goodwill and other non-current assets
increased due to M&A activity
Cash includes IPO proceeds
Cash balance includes 27.7m of cash
due to restaurants (2013: 16.2m)
Non-current liabilities includes amounts
due to get 100% ownership of all
subsidiaries
Post year-end signed 90m RCF;
undrawn to date
31 Dec 31 Dec
m 2014 2013
Goodwill 51.2 10.2
Property, plant and equipment 7.2 5.5
Other non-current assets 28.4 12.1
Non-current assets 86.8 27.8
Cash and cash equivalents 164.4 61.6
Other current assets 12.4 4.9
Current assets 176.8 66.5
Trade and other payables (59.1) (33.4)
Other current liabilities (6.5) (5.1)
Current liabilities (65.6) (38.5)
Net current assets 111.2 28.0
Non-current liabilities (14.2) (2.2)
Net assets 183.8 53.6
Share capital and premium 126.2 55.8
All other reserves and Non-controlling Interests 57.6 (2.2)
Total equity 183.8 53.6
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Key takeaways
Revenue
+62%157.0m
(2013: 96.8m)
EBITDA
+131%32.6m
(2013: 14.1m)
CashConversion
117%38.1m
(2013: 19.2m)
All segments continue to perform
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David ButtressCEO
Strategy
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Selecting global markets with real long-term opportunity
Clear leadership in each market (at least 3-5x size of
competitors)
Excellent local execution many small details
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What delivers success in Online Takeaway?
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A scalable, proven, innovative mobile and web platform
A world-class, industry-experienced team
Deliver sustainable and profitable long-term order growth
Takes time to build a strong local market position
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How JUST EAT delivers
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Europe
UK 100% Mar-06 #1
Denmark 100% Aug-01 #1
France 80% Dec-11 #1
Spain 100% Nov-10 #1
Ireland 100% Apr-08 #1
Switzerland12 100% Mar-11 #1
Italy 100% May-11 #2
Norway13 100% Dec-09 #1
Benelux 100% Jul-07 #2
Americas
Canada13 100% Aug-09 #1
Brazil12 30% Aug-11 #1
Mexico 100% Feb-15 #1
Clear market leaderRegion Country Launch Market position
Source: Google Analytics, JUST EAT management estimates
Note: Countries in bold font indicate JUST EATs key markets
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Ownership
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5.5 0.2
2.0
2.6
2.2
8.8
Significant runway for growthTotal annual delivery takeaway market (bn)
UK CanadaFrance Spain Brazil, Norway, Switzerland, Italy, Ireland, Mexico, Benelux
Denmark
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21.3bn
Source: Market size as per Callcredit Report and/or JUST EAT.
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Significant potential at scale
France, Ireland and SpainUK Denmark
25Source: Market size as per Callcredit Report and JUST EAT.
Overall Takeaway Delivery Market size (bn)
5.5 0.2 4.4 11.2 21.3bn
Potential JUST EAT % share at scale14
45% 60% 45% 30% n/m
Commission rate (2014)
12% 10% 10-12% c.10% n/m
Implied JUST EAT commission revenue at scale (m)15
297 12 213 344 866m
Implied other revenue (m)
75 6 67 95 243m
Total implied potential revenue (m)
372 18 280 439 1,109m
Current revenue as % of potential
30% 74% 7% c. 4% c.15%
IT, BR, MX, BE, NL,
NO, CA, CH Total
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Strategic initiatives
Improving the consumer experience
Bringinggreater
choice
Drivingchannel
shift
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3
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Improving the consumer experience
Product improvements
Continued innovation
Better apps and web platform, 50 UK updates
Order Tracking
Restaurant technology
Web refresh
Saved cards rolled out internationally
Drive distance/geo-location/maps for iPad
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Bringing greater choice
Over 45,700 restaurants
over 9k net additional restaurants contracted
Collection market significantly grows opportunity
adds 2.6bn16 addressable potential to UK
collection orders growing dramatically, now
representing c.2% of orders
dedicated collection focussed app acquired July 2014
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Driving channel shift
Mobile-led strategy
Building the brand
TV advertising in 11 markets
#Minifistpump campaign
Top-of-mind awareness at 44%17
Use of trains, taxis, trams and Rams (sponsor Derby County FC)
c. 61% of UK orders are now made through mobile devices18
Launched iPad, Android tablet and Windows app in UK
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Disciplined approach to M&A
In-market M&A
Out-of-market M&A
Transactions completed
Focus on leaders in markets of significant scale
Consolidate in-market position by acquiring complementary businesses
Proven track record of acquiring, integrating and operating
Cash on balance sheet plus new 90m RCF
Seven acquisitions completed in 2014
Post year-end19: eat.ch (Jan 2015); Sindelantal Mexico (Feb 2015);
increase stake in Brazil JV
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Long-term strategic leadership in LatAm
Brazil and Mexico: two largest markets20 in LatAm for online takeaway
JE now clear leader in this thriving region
Mexico
Recently acquired Sindelantal Mexico (Feb 2015)
Clear market leader
Early stage business growing rapidly with significant potential
Brazil
One of the worlds most exciting markets for online takeaway
Joint venture with iFood completed in November
JE stake 30% (increased from 25% post year-end)
IF-JE has clear leadership with 80% market share21
JEs 2nd largest market on an order basis21; growing rapidly
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JUST EAT proven, global executor
Another year of excellent growth
investing for long-term
further margin improvement
Continued momentum into 2015
revenue expected to marginally exceed 200m at
current exchange rates
All segments delivering
Delivering sustainable, profitable, long-term growth
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Thank you
Any questions?
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Appendix
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Footnotes
1. Gross Merchandise Value.2. Underlying EBITDA (defined as earnings before finance income and costs, taxation, depreciation and amortisation) excludes the Groups share of
depreciation and amortisation of joint ventures and associates, long term employee incentive costs, exceptional items, foreign exchange gains and losses and other gains and losses (being profits/losses arising on the disposal of operations). At a segmental level, Underlying EBITDA also excludes intra-group franchise fee arrangements and incorporates an allocation of Group technology and centre costs (all of which net out on a consolidated level).
3. An Active User represents an account that has placed at least one order within the last 12 months.4. Adjusted to remove amortisation of acquired intangibles, long term employee incentive costs, exceptional items, other gains, foreign exchange
gains and losses and the tax impact of these adjusting items.5. With the exception of Denmark and France, where Takeaway Restaurants (TRs) also pay a small annual subscription fee.6. Average revenue per order (ARPO) is calculated by dividing total commission revenue and payment card admin fees by the number of orders.7. LFL growth of 55%; LFL at constant currency 64%.8. Attributable to owners of the company after adjusting for (0.2)m due to Non-Controlling Interests.9. Adjusted to remove amortisation of acquired intangibles new measure of Adjusted EPS (2013: 1.4p).10. Others includes acquisition costs, foreign exchange gains and losses, results of joint venture and associates, losses on the disposal of fixed asses
and cash long term incentive costs.11. Cash and cash equivalents are shown net of borrowings of 0.3m (2013: nil). 12. Post year-end ownership of Switzerland increased to 100% from 64%; that of Brazil to 30% from 25% post year-end.13. Canada and Norway exclude restaurant chains. 14. Managements strategy is to target a 45% market penetration in the UK and 30% in other key countries as per its mature Danish market. There is
no certainty that this penetration target will be achieved or in what timeframe.15. Calculated by multiplying market size by target market share and commission rate. This revenue figure is illustrative only and is based on a target
market share which may not be achieved.
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Footnotes
16. Phone and collect market. 17. Based on a UK survey conducted by YouGov of adult takeaway users.18. Including those orders placed using tablet devices. 19. Increased stakes in Alloresto.fr to 80% from 50%; and in eat.ch to 100% from 64%. 20. Management estimate.21. On 100% basis.
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