MADE Confirms new CEO; Reports Full-Year Loss

Made.com Group Plc ("MADE" or "the Company"), the leading digital native lifestyle brand in home, today announces the confirmation of Nicola Thompson, Interim CEO, as permanent CEO with immediate effect and announces its Full Year Results for the year ended 31 December 2021. 

Financial Highlights 

• Strong gross sales growth underpinned by positive customer metrics, with last twelve month active customers ⁽¹⁾ at 1.3m, +26% compared to 2020, repeat order mix up to 44% and average order value (AOV)⁽¹⁾ at £246, +8% year-on-year
  
  
• Revenue of £372m, +50% year-on-year, with deferred revenue at period end at £56m, remaining at elevated levels due to extended lead-times driven by the global supply chain challenges
  
  
• Gross margin was impacted by global freight inflationary pressures, down 694bps compared to prior year Excluding freight costs, gross margin improved 193bps on better full price sales mix, higher input margin and foreign exchange benefit

• Adjusted EBITDA of (£14.3m), a movement of (£9.2m) year-on-year, with cost leverage across all operating cost lines, but adversely affected by industry wide global freight inflation and supply chain disruption impacting revenue recognition timing during the final quarter of 2021

• Reported losses before tax were (£31.4m) including one-off IPO related P&L charges of £5.3m, compared to (£14.6m) for the same period in 2020
  
  
• Net cash was £107m at the end of the period.  Free cash flow ⁽¹⁾ was (£32.1m), compared to £22.2m in 2020 as inventory intake normalised towards the end of 2021

Susanne Given, Chair of MADE, commented: 

"The Board is delighted to confirm Nicola's appointment as CEO. She is an impressive and compassionate leader and the right person to lead the business into its next phase of growth."

"I am proud of the excellent growth and strategic progress the business has delivered since its IPO. We have a strong strategic plan in place to drive further and continuous growth. We will build on MADE's position as the leading digital destination for home through investing in the customer experience, the further development of our curated homewares range and growing the brand internationally. The strength of the brand and the management team combined with its strong cash position means MADE is uniquely placed to act on the opportunities ahead."

Nicola Thompson, Chief Executive Officer of MADE, commented:

"I am thrilled to be confirmed as CEO of MADE and excited to lead this great business and brand forward. We are delighted to report another period of strong financial performance and solid operational progress, with revenue growing by 50% year on year and continued delivery against our key strategic pillars as set out at our IPO." 

"MADE has an unrivalled understanding of its digital native customer base and this has enabled us to upgrade our proposition and significantly increase market share. We have a clear strategy, talented team and multiple levers to drive growth in the years ahead. I look forward to working with the very experienced Board and the team at MADE as we continue to listen to our customers' needs and aspirations in order to help them curate the vision they have for their homes." 

Strategic and operational highlights 

• Significant strategic progress delivered against all four of our pillars, consistent with the strategy set out at the time of the IPO, strengthening our position as the leading digitally native lifestyle brand in home, delivering a step change to our proposition and driving market share gains
  
  
• Update on key strategic pillars:
  
  
• EXPERIENCE

 o  Significant warehousing and logistics capacity secured at our existing sites to support high growth and lead-time service improvements, with a 3-4 average lead time expected to be achieved during H1 2022

o  Logistics investments made in warehouse capacity, incrementally expanding from 700,000 sq. ft. total space to 1,115,000 sq. ft., with further expansion planned in 2022

• CHOICE 

o  Further growth of our design led range, with accelerated new product releases, increasing our range to more than 9,500 SKUs including third party brands

o  Successfully completed our beta testing of curated marketplace, offering third-party artisan brands to give even greater choice of homeware products to our design loving customers

o  Delivered the first stage of our technology infrastructure enabling the curated marketplace proposition to scale efficiently 

• REACH

o  Positive progress on search engine optimisation (SEO) programme initiatives, with significant increase in keyword coverage and SEO visitors growth significantly above total traffic growth

o  Launched new brand creative to be leveraged against brand marketing spend in strategic German and French markets 

• SUSTAINABILITY

o  As part of the group's ESG strategy, we launched our circularity initiative with Geev, a third-party platform to allow customers to give a second life to their products in the UK and France

o  Delivering strong progress against our 2021 sustainability targets including increasing responsibly sourced fully traceable timber to 70%, 100% recycled polyester velvet, 25% recycled or organic cotton, and a 27% reduction in total packaging

Outlook

• Following the softness of consumer demand so far in 2022, we are no longer anticipating any tailwind from the market in 2022.  Growth will be driven by our dramatically improved customer proposition, through improved experience, broader product choice and through enhanced reach. On this basis, we expect gross sales £500-540m (~+15-25% year-on-year), with higher growth in H2 than H1 due to 2021 comparative phasing

• Full year revenue expected to be ~£465-500m (~+25-35% year on year) with positive adjusted EBITDA between £5 and £15m, assuming global supply chain disruptions normalise by year-end 2022, but freight costs remain higher than pre-pandemic levels
  
  
• Average lead times expected to be reduced to 3-4 weeks by end of H1 2022
  
  
• A growth in choice taking us from more than 9,500 SKUs to more than 11,500 SKUs
  
  
• The Group will maintain a disciplined and focused approach to customer acquisition. Priority will remain on maintaining strong conversion rates and doing so at low cost to drive attractive payback and quality lifetime value
  
  
• The Group has significant cash headroom to fully execute the strategic plan and move to sustainable positive free cash flow.  Net working capital to sales ratio expected to be between -7% and -9% at year-end 2022
  
  
• Ambition of £1.2bn+ gross sales and low teens adjusted EBITDA margin by 2025 remains unchanged, as the large and underpenetrated furniture and homeware market shifts online and we accelerate investment into our core customer proposition development - range expansion, industry leading lead-times and international expansion

Source : MADE.com

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