Kmd Brands Limited · NZX:KMD
Kmd Brands — Kathmandu Holdings — FY2021 Earnings Presentation
38 slides from Kmd Brands's earnings presentation, Sep 21, 2021
Slide 1: Kathmandu Holdings FY21 Results Presentation
For personal use only Kathmandu Holdings FY21 Results Presentation 21 September 2021
Slide 2: Owner of leading global outdoor active brands
Owner of leading global outdoor active brands For personal use only Loyal, active Technical Iconic brands Leader in ESG Diversified consumers products • Rip Curl: top 3 global • NPS2 above 70 • R&D driving innovation • Early B-Corp adopter • Geography surf brand • Sustainable materials • Largest syn
Slide 3: Brands with global reach
Brands with global reach North America RC KMD Oboz Total Europe RC KMD Oboz Total Total Group RC KMD Oboz Total For personal use only Owned stores 31 - - 31 Owned stores 19 - - 19 Owned stores 160 160 - 320 Licensed stores 13 - - 13 Licensed stores 14 - - 14 Licensed stores 207 - - 207 Online sites
Slide 4: Financial highlights
Financial highlights For personal use only $922.8m +40 bps $113.3m Sales +15.1% Gross margin Underlying EBITDA1 improvement +35.9% $66.3m $93.3m $37.0m Underlying NPAT1 Underlying operating Net cash balance Statutory NPAT $63.4m cash flow1 Bank facility c.$300m 1. Statutory results include the impac
Slide 5: Operational highlights
Operational highlights For personal use only 19.2% We’re Out Online Store There Direct to consumer Successful brand Successful launch (DTC) same store relaunch May 21 Apr 21 sales growth 31.3% 76 NPS Wholesale Online sales growth up 4 points in FY21 Double digit growth in 12.5% of DTC sales 169,000
Slide 6: Sustainability highlights
Sustainability highlights For personal use only 3 1 2 For more information, refer to the Kathmandu Holdings Limited Sustainability Report to be released in October 2021 1. Committed to largest syndicated sustainability linked loan at time of signing 2. Certified carbon zero under the Toitu CarbonZer
Slide 7: Group Strategy
For personal use only Group Strategy 7 | KATHMANDU HOLDINGS FY21 RESULTS 0 RESULTS PRESENTATION PRESENTATION
Slide 8: Refreshed group strategy
Refreshed group strategy For personal use only Build Global Elevate Leverage Lead in Brands Digital Operational ESG Excellence Expand global footprint Invest in Group digital Deliver operational Demonstrate leadership and invest in world class platforms to deliver a excellence to all brands across e
Slide 9: Build global brands
Build global brands For personal use only ICONIC, INSPIRATIONAL, AND LEADING OUTDOOR BRAND IN ESTABLISHED AND DISTINCTIVE AUTHENTIC GLOBAL SURF BRAND AUSTRALASIA1 AMERICAN FOOTWEAR BRAND • Goal to be No.1 surf brand in Australasia, • Leverage Summit Club, with 2.1m loyal • Grow product range into ad
Slide 10: Elevate digital
Elevate digital For personal use only Significant investments being made to elevate our digital capabilities Group target: increase online to 25% of DTC sales in the medium-term through: Online platform enhancement Online platform • New Group platform launched enhancement • Platform being rolled out
Slide 11: Leverage operational excellence
Leverage operational excellence For personal use only Group target: improve underlying EBITDA margin to 15% of sales Accelerate cross-brand revenue growth opportunities The Group has invested over $20m to date on core platforms to support the growth of its brands, with over $10m to be invested in FY
Slide 12: Lead in ESG
Lead in ESG For personal use only We aspire to be a leader in ESG, to drive long-term value for our shareholders We are striving to extend Kathmandu’s B-Corp accreditation across all our brands Transparency and responsibility will continue to underpin everything we do by managing our environmental a
Slide 13: Group Financials
For personal use only Group Financials 13 | KATHMANDU HOLDINGS FY21 RESULTS PRESENTATION
Slide 14: Group result underpinned by strong Rip Curl performance
Group result underpinned by strong Rip Curl performance GROUP Statutory Underlying For personal use only • FY21 result includes a full twelve months of Rip Curl, compared to NZD $m *2 FY21 FY21 FY20 Var % FY20 which includes nine months of Rip Curl post-acquisition SALES 922.8 922.8 801.5 15.1% • Ex
Slide 15: Group sales growth
Group sales growth 1,000.0 Total Group Reported Sales ($m) Online Sales ($m) For personal use only 900.0 922.8 +21.9% CAGR 800.0 Online sales (FY17 - FY21) 801.5 % of DTC sales 700.0 106.4 600.0 90.5 500.0 538.9 492.9 400.0 440.0 65.1 56.7 300.0 200.0 41.0 100.0 5.8% 7.6% 8.8% 15.7% 14.4% 0.0 FY17 F
Slide 16: Strong balance sheet with $37m net cash
Strong balance sheet with $37m net cash Key Balance Sheet items ($m) and ratios*1 Jul 21 Jul 20 For personal use only 40 Net Cash / (Net Debt) Net cash / (Net interest bearing liabilities) 37.0 (9.4) NZD $m 37.0 Leverage Ratio *2 -0.3x 0.1x Net Debt to Equity *3 n.m. 1.2% 20 Inventories 216.5 228.8
Slide 17: Resilient cash flows and resumed dividends
Resilient cash flows and resumed dividends For personal use only 60.0 Cash Flow (NZD $m) FY21 FY20 Dividends declared (NZ $m) NPAT 63.4 8.9 50.0 Interim Final Change in working capital 18.1 57.8 Non-cash items 11.8 26.4 40.0 36.2 35.5 Adjusted operating cash flow *1 93.3 93.1 32.9 30.0 26.2 21.3 27.
Slide 18: For personal use only
For personal use only 18 | KATHMANDU HOLDINGS FY21 RESULTS PRESENTATION
Slide 19: Rip Curl result underpinned by growth in surfing
Rip Curl result underpinned by growth in surfing Rip Curl owned for a full twelve months in FY21 compared to nine months in FY20 • Outperforming acquisition expectations For personal use only Pre IFRS 16 • Total sales 10.5% above the prior comparable twelve months, with RIP CURL FY21 FY20 sales cont
Slide 20: Continued innovation excellence on land and in water
Continued innovation excellence on land and in water For personal use only Icons of Surf Mirage Ultimate Surf Series A selection of the most iconic logos in the industry The most unique and innovative swimwear in Technical surf inspired products surf, tested by the world’s best. From a surf trip dow
Slide 21: Focus on leadership and technology
Focus on leadership and technology For personal use only The Rip Curl World Surf League (WSL) Finals The all new E7 Heatseeker For the first time in history, the WSL world title was decided in a one-day Combining the best of Rip Curl’s stretch and warmth technologies, this is the single competition,
Slide 22: For personal use only
For personal use only 22 | KATHMANDU HOLDINGS FY21 RESULTS PRESENTATION
Slide 23: Kathmandu result reflects COVID impacts
Kathmandu result reflects COVID impacts For personal use only KATHMANDU Pre IFRS 16 • Total sales by market (at constant exchange rates): NZD $m FY21 FY20 Var % • Australia -18.0%, with 4,700 lost trading days in FY21 vs 4,400 in FY20 SALES 354.0 426.4 (17.0%) • New Zealand -14.1%, with 400 lost tra
Slide 24: Building a strong, meaningful, differentiated brand
Building a strong, meaningful, differentiated brand Strong brand fundamentals: For personal use only Number 1 outdoor brand in Australasia 1 : • Kathmandu dominates the category in both AU and NZ; leading the market for top of mind awareness consideration, preference and equity • 97% brand awareness
Slide 25: Year-round product desirability and innovation
Year-round product desirability and innovation • For personal use only Establish year-round relevance and excitement • Become in summer, what we are in winter • Activate on the 8 months of ‘transitional’ weather opportunity • Reduce reliance on travel activity • Reach a younger, more diverse, more c
Slide 26: For personal use only
For personal use only 26 | KATHMANDU HOLDINGS FY21 RESULTS PRESENTATION
Slide 27: Oboz result underpinned by strong hiking participation
Oboz result underpinned by strong hiking participation OBOZ Pre IFRS 16 • Outperforming acquisition expectations For personal use only FY21 FY21 FY20 Var % NZD $m Reported Constant Reported Constant • Oboz sales above last year with a strong recovery from Currency Currency COVID closures. Also drive
Slide 28: New online store and broader product appeal
New online store and broader product appeal Strong product launches and robust brand activations For personal use only lead footwear brand to new heights Product highlights: • Sypes Franchise delivers: Highlight of Spring/Summer 2021 line is strong across North America • Mountain Town Insulated: New
Slide 29: Outlook
For personal use only Outlook 29 | KATHMANDU HOLDINGS FY21 RESULTS PRESENTATION
Slide 30: COVID continues to impact the global business
COVID continues to impact the global business For personal use only • Lost trading days due to COVID lockdown restrictions FY21 c. 13,000 vs FY20 c. 15,000 • Widespread lockdowns in NSW, VIC, ACT and NZ to date will impact the first half result • Trade in airport locations and emerging markets of Br
Slide 31: Key FY22 priorities
Key FY22 priorities For personal use only Build Global Brands Elevate Digital Leverage Operational Lead in ESG Excellence • Increase investment in marketing • Launch Rip Curl loyalty • Complete Group executive • Extend Kathmandu B Corp and sustainability initiatives to programme in ANZ structure to
Slide 32: Trading update and outlook
Trading update and outlook For personal use only Trading update • Same store sales (incl. online) for the six full weeks to 12 September 2021 were significantly impacted by ongoing Australasian COVID lockdowns: • Rip Curl -12.8% overall, +3.6% adjusted for COVID lockdowns1 • Kathmandu -19.9% overall
Slide 33: Questions
For personal use only Questions 33 | KATHMANDU HOLDINGS FY21 RESULTS PRESENTATION
Slide 34: Appendix 1: Statutory to underlying profit & loss
Appendix 1: Statutory to underlying profit & loss For personal use only GROUP FY21 FY20 NZD $m IFRS 16 Transaction Other IFRS 16 Transaction Other *1 *2 *1 *3 Statutory Leases Costs one-offs Underlying Statutory Leases Costs one-offs*3 Underlying Sales 922.8 - - - 922.8 801.5 - - - 801.5 Gross profi
Slide 35: Appendix 2: Segment note
Appendix 2: Segment note For personal use only SALES EBIT FY21 (NZD $'000) Outdoor Surf Corporate Total FY21 (NZD $'000) Outdoor Surf Corporate Total SALES per segment note 432,354 490,438 - 922,792 EBIT per segment note 43,897 59,122 (10,835) 92,184 IFRS 16 Leases Adjustment (6,169) (2,195) - (8,36
Slide 36: Appendix 3: Segment summary
Appendix 3: Segment summary For personal use only NZD $m FY21 FY20 Var % Gross Profit $ Mix FY21 Kathmandu sales 354.0 426.4 (17.0%) Oboz Rest of World Oboz sales 78.4 59.4 31.9% Other 7% 5% 3% Outdoor segment sales 432.4 485.8 (11.0%) Wholesale Europe 8% 24% Surf segment sales 490.4 315.7 Kathmandu
Slide 37: Appendix 4: Balance sheet
Appendix 4: Balance sheet For personal use only Balance Sheet (NZD $m) Jul 21 Jul 20 Inventories 216.5 228.8 Property, plant and equipment 79.3 88.5 Right of Use Asset (IFRS 16) 242.7 258.7 Intangible assets 688.6 689.9 Other assets 95.5 89.6 Total assets (excl. cash) 1,322.6 1,355.5 Net interest be
Slide 38: Important notice and disclosure
Important notice and disclosure This presentation prepared by Kathmandu Holdings Limited (the “Company” or the “Group”) (ASX/NZX:KMD) provides additional comment on the financial For personal use only statements of the Company, and accompanying information released to the market. As such, it should