THIS STATEMENT CONTAINS INSIDE INFORMATION
16 May 2022
Made.com Group Plc
("MADE" or the "Group")
TRADING UPDATE
Made.com, the leading digital lifestyle brand for the home, today announces a trading update and revised guidance. The Group continues to execute its strategy and remains very confident it will achieve significant outperformance against the online furniture and home market. This builds on the achievements year-to-date, during which the company has outperformed the market by at least 20 percentage points. Customers are reacting positively to the improved proposition with average lead times consistently at the targeted 3-4 weeks average for the last two months, leading to ongoing improvements in customer feedback and growing repeat order mix (47% for Q1 2022 vs 43% for Q1 2021).
Although MADE's performance has remained strong versus pre-pandemic levels, trading has been volatile in recent months and more challenging than anticipated at the start of the year. Third-party data suggests that the online furniture and home market is down around 30-40% so far this year. Compared to the market, MADE gross sales were down only 10% in Q1 vs Q1 2021 (and up 64% vs 2019).
Based on the most recent trading we are updating expectations for the full year. We now assume the market will remain highly challenging for the rest of 2022 despite the significantly easier comps for H2. We remain very confident that MADE will continue to outperform the online home and furniture market by at least 20 percentage points. Spot freight rates continue to normalise in line with previous expectations, but lower sales mean the benefit will be reflected in gross margin later in 2022 than previously anticipated. We still expect 2022 exit rate gross margin to be around pre-pandemic levels and business shape will be set for the new operating environment. These actions will position the business to deliver positive adjusted EBITDA and free cash flow in 2023. The revised guidance range is as follows:
| | 2022 Guidance Lower | 2022 Guidance Upper |
| Gross sales | -15% | 0% |
| Net revenue | -7% | 8% |
| Adjusted EBITDA | £-35m | £-15m |
| Capex and Trouva acquisition | £13-18m | £13-18m |
| NWC/Net revenue | -11% | -11% |
| Year-end 2022 net cash | £40-45m | £60-65m |
Adjusted EBITDA includes one-time costs relating to supply chain disruption of £5m. Working capital will be higher than planned at the end of the first half, reflecting improved lead times and weaker market demand, but significant adjustments already taken will materially reduce order intake for H2. The composition of inventory is good, and the Group does not anticipate higher mark-down risk for the second half of 2022.
With a much weaker market backdrop for 2022, we now expect to achieve £1.2b of gross sales later than 2025. The Board remains very confident in the long-term value drivers of the business.
· MADE operates in a highly fragmented market, that is shifting online, with significant further market share opportunities
· Growing and loyal customer base, with improving repeat order mix and drivers in place to improve lifetime value given better Choice and Experience
· Attractive operating model, which is data led and has low capex requirement; and
· Strengthening competitive advantages of the business, with our designer ecosystem and enhanced range, boosted by the acquisition of Trouva
Nicola Thompson, Chief Executive Officer, said,
"There is no escaping the tough trading environment at the moment. However, we are laser-focused on executing our strategy and we are delivering strong progress across each of our strategic pillars. Our customers are at the heart of our business and we're seeing a really positive reaction to our improved proposition, with average lead times consistently at the targeted 3-4 weeks average for the last two months. MADE continues to outperform the online furniture and home market and I am confident the company will emerge in a very strong position."
The Group will host a conference call for analysts and investors to discuss this announcement at 8.15am today. Dial-in details are as follows:
UK +44 (0) 3333 009 785
Conference ID: 3572035
ENDS
Enquiries:
MADE
Nicola Thompson, Chief Executive Officer
Phil Clark, Investor Relations
Media
Sarah West, James Baker, Amber Ahluwalia
made@brunswickgroup.com
+44 207 404 5959
The person responsible for making this announcement on behalf of Made.com Group Plc is Lisa Tomlins, General Counsel and Company Secretary.
CAUTIONARY STATEMENT
Certain statements in this trading update are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
About MADE
MADE is the leading digitally native lifestyle brand in home, disrupting the industry with high-quality, exclusive designs underpinned by a responsible, small-batch production model, enabling customers to realise the vision of their homes.
In addition to its in-house design team and collaborations with leading designers, MADE champions independent talent, offering them a platform and access to a scalable supply chain that makes their ideas reality. These partners bring their unique perspective in the creation of bold statement collections and work with MADE to produce iconic designs.
Operating at the intersection of design and technology, proprietary algorithms take consumers on a journey: from outreach that makes designs discoverable to a frictionless digital shopping experience. Combined with an innovative 'just-in-time' order model, MADE provides a fresh and ever-changing range, with nine new collections launched every week and more than 9,500 active SKUs in the catalogue as at 31 December 2021.
Founded in 2010, MADE sells its products across the United Kingdom, Germany, Switzerland, Austria, France, Belgium, Spain and the Netherlands via its e-commerce platform. The brand also has seven showrooms globally, with flagship brand experiences in London and Paris.
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