Michael Hill International Ltd. · ASX:MHJ
Michael Hill International — Investor Presentation (February 2023)
22 slides from Michael Hill International's investor presentation, Feb 27, 2023
Slide 1: FY23H1 Results
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Slide 2: Disclaimer
DISCLAIMER Certain statements in this announcement constitute forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and the anticipated or planned financial and operational performance of Michael Hill International
Slide 3: CEO and CFO FY23H1 Update
Michael Hill International Limited CEO and CFO FY23H1 Update • FY23H1 Performance Overview • FY23H1 Financial Results • Group Results • Key Performance Insights • Segment Results • Outlook • Strategy Update – Emphasis on Growth • Appendices 3
Slide 4: FY23H1 Performance Overview
FY23H1 Performance Overview • Record sales, gross profit and comparable EBIT driven by: • Brand elevation • Retail fundamentals • Product evolution • Digital-first expansion • Loyalty penetration • Strategic initiatives align to lift performance - best evidenced by 19% productivity increase over the
Slide 5: FY23H1 Financial Results Snapshot
FY20H1 FY23H1 Financial Group Results Snapshot FY23H1 FY22H1 Change • Record H1 revenue with growth of $36m Revenue $363m $327m +11% • Record H1 gross profit up $24m Gross Profit $237m $213m +11% • Elevated gross margin maintained Gross Margin 65.2% 65.1% +10bps • Record H1 comparable EBIT up 6% Com
Slide 6: Key Performance Insights
FY20H1 FY23H1 KeyFinancial Snapshot Performance Insights 6
Slide 7: FY23H1 Australia Segment Results
FY23H1 Australia Segment Results Australia (AUD) Change to Change to FY23H1 FY22H1 FY21H1 FY20H1 FY22H1 FY20H1 Revenue 191m 162m 175m 174m +18% +9% Gross profit 123m 105m 108m 104m +18% +18% Gross margin 64.4% 64.7% 61.4% 59.9% -30bps +450bps Segment Comparable EBIT 38.4m 33.5m 35.3m 22.7m +14.7% +6
Slide 8: FY23H1 New Zealand Segment Results
FY23H1 New Zealand Segment Results New Zealand (NZD) Change to Change to FY23H1 FY22H1 FY21H1 FY20H1 FY22H1 FY20H1 Revenue 76m 67m 69m 70m +14% +9% Gross profit 48m 43m 42m 41m +12% +16% Gross margin 62.6% 63.5% 61.1% 58.8% -90bps +380bps Segment Comparable EBIT 17.0m 18.6m 19.1m 14.5m -8.2% +18.0%
Slide 9: FY23H1 Canada Segment Results
FY23H1 Canada Segment Results Canada (CAD) Change Change FY23H1 FY22H1 FY21H1 FY20H1 to FY22H1 to FY20H1 Revenue 92m 93m 75m 80m -1% +15% Gross profit 59m 60m 46m 47m -2% +27% Gross margin 64.3% 64.6% 61.5% 58.2% -30bps +610bps Segment Comparable EBIT 18.5m 22.2m 12.0m 7.9m -16.5% +133.5% Comparable
Slide 10: Outlook
Outlook • Putting the significant and sustained NZ weather events to one side, sales for the first eight weeks of FY23H1 are in-line with expectations • On the basis that retail trading conditions do not materially deteriorate, the Company anticipates full year comparable EBIT will be ahead of prior
Slide 11: Strategy Update - Emphasis on Growth
Strategy Update - Emphasis on Growth Modern, differentiated, omni-channel jewellery brand Brand & Loyalty with loyal customers Retail Elevated productivity & customer experience Fundamentals Digital & Omni-first, digital-led & channel agnostic Omni-channel Product Evolution Elevated yet accessible,
Slide 12: Brand and Product Elevation
Brand and Product Elevation Marking the moments that create the story of our lives Elevated emotive brand-led campaigns Emphasis on craftmanship, quality & sustainability Relentless focus on creative & visual excellence Elevated, modern & accessible product Diamonds at our core Increasing ATV demons
Slide 13: Leveraging of Loyalty Program
Leveraging of Loyalty Program Your love for jewellery rewarded Over 1.7 million loyalty members Increased focus on customer segmentation and Member ATV personalisation vs Targeted AI and data insights non-member ATV Loyalty members are significantly more valuable Loyalty members represent ~82% of sa
Slide 14: Retail Productivity & Store Investment
Retail Productivity & Store Investment Elevating productivity & retail execution Productivity up 19% since FY20 and up in all markets Focus on in-store experience, delivering increased customer engagement Dynamic rostering driving more productive labour Elevated visual merchandising resulting in inc
Slide 15: Digital Growth Initiatives
Digital Growth Initiatives Omni-first, digital-led & channel agnostic Expansion of core DTC channels, omni now embedded into stores, >49% with customers embracing the aspirational brand journey Marketplaces – growth in existing & new geographies Early insights from THE BAY validate Quebec opportunit
Slide 16: New Revenue Streams
New Revenue Streams Launching circular economy offering re:new, encompassing: • Digitally-enabled gold recycling platform, driving incremental sales in-store • Launching a diamond upgrade program • Reimagining and expansion of jewellery repair business Development of a new digitally-led bespoke diam
Slide 17: Capital Management Framework
Capital Management Framework Record interim dividend of AU4.0 cps On-market share buy-back resulting in 8.63m shares acquired at a cost of $10.2m, representing 2.2% of share capital Dividend Policy Cash reserves retained for deployment into new organic 50% - 75% adjusted NPAT Organic Growth growth a
Slide 18: Q&A
Q&A You are able to listen to Q&A via this platform If you would like to ask a question, please click on ‘Request to Speak’ button at the bottom of the broadcast window. If you are in full screen broadcast mode you will need to minimise to see this button.
Slide 19: Appendices
Appendices
Slide 20: Appendix A: Bridge from Comparable EBIT to Statutory EBIT
Appendix A: Bridge from Comparable EBIT to Statutory EBIT Calculated as follows: (AUD million) FY23H1 FY22H1 Comparable EBIT 54.5 51.6 Impact of AASB16 Leases 4.8 3.7 Impact of IFRIC SaaS-related guidance -0.5 -2.3 Government grants received (AU, NZ, CA) - 2.8 Statutory EBIT 58.8 55.8 20
Slide 21: Appendix B: AASB16 Leases & SaaS Impact
Appendix B: AASB16 Leases & SaaS Impact FY23H1 Impact of FY23H1 FY22H1 Change (AUD million) Stat AASB16 & SaaS pre-adjustments pre-adjustments pre-adjustments Revenue 363.4 - 363.4 327.1 +11.1% Cost of sales -126.5 - -126.5 -114.2 +10.8% Gross profit 236.9 - 236.9 212.9 +11.3% Employee benefits expe
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