Premier Investments Limited · ASX:PMV
Premier Investments — H1 2017 Earnings Presentation
40 slides from Premier Investments's earnings presentation, Mar 21, 2017
Slide 1: Premier Investments Ltd 2017 Half Year results overview
PREMIER INVESTMENTS LTD 2017 Half Year results overview 21 March 2017
Slide 2: Agenda
Agenda Premier Investments 1 1H17 overview 8 Peter Alexander performing strongly Premier Investments 2 1H17 consolidated financial results 9 Online - delivering a world class platform 3 Premier Retail delivers record sales and EBIT 10 Premier Retail summary 4 1H17 trading overview 11 Ordinary interi
Slide 3: Premier Investments Limited 1H17 Overview
bt. 5 i BIRTHDAY BIRTHDAY PREMIER INVESTMENTS LIMITED 1H17 OVERVIEW
Slide 4: Premier Investments 1H17 overview
1 Premier Investments 1H17 overview • Group profit – Underlying net profit before tax $100.6 million, up 9.7% on 1H161,2 – Reported net profit after tax $71.9 million – Ordinary Interim Fully Franked Dividend of 26 cps, up 13.0% (1H16: 23 cps) • Premier consolidated balance sheet remains strong – Ca
Slide 5: Premier Investments 1H17 overview
1 Premier Investments 1H17 overview • Premier Retail contribution to Premier Investments Performance: – Record Sales of $588.6 million, up 7.1% on 1H161 – Record Underlying EBIT of $93.0 million, up 10.6% on 1H161,2 – Record Underlying Profit before tax of $90.9 million, up 10.8% on 1H161,2 – 1H17 L
Slide 6: Premier Investments summarised consolidated income statement
2 Premier Investments summarised consolidated income statement 26 Weeks to 27 Weeks to $m 28 Jan 2017 30 Jan 2016 Premier revenue (ex Premier Retail) 13.2 12.8 Premier expenses (ex Premier Retail) (3.0) (2.7) Premier Retail EBIT – underlying (26 weeks) 93.0 84.1 Finance costs (2.6) (2.5) Underlying
Slide 7: Premier Investments summarised consolidated balance sheet
2 Premier Investments summarised consolidated balance sheet $m 28 Jan 2017 30 Jul 2016 Assets Cash and cash equivalents 279.2 283.2 Inventories 126.9 123.6 Property, plant and equipment 206.4 139.2 Other assets 53.0 48.7 Investment in associates 218.4 213.4 Intangible assets 854.9 854.8 Total assets
Slide 8: Premier Retail
PREMIER RETAIL
Slide 9: Premier Retail delivers record sales and EBIT
3 Premier Retail delivers record sales and EBIT • Underlying EBIT up 10.6% to $93.0 million1,2 • Underlying EBIT margin up 50 bps to 15.8%1,2 • Underlying profit before tax up 10.8% to $90.9 million1,2 • Total sales increase of 7.1% on 1H161 • All key growth initiatives delivering – Smiggle global s
Slide 10: Premier Retail performance
3 Premier Retail performance 26 Weeks 26 Weeks 27 Weeks $000 to 28 Jan 2017 to 30 Jan 20162 Var LY to 30 Jan 2016 Sales 588,613 549,800 +7.1% 564,951 LFL sales (constant currency)2 +2.1% +6.3% +6.3% Gross Profit 376,863 356,033 +5.9% 366,020 Gross margin (%) 64.0% 64.8% -73 bps 64.8% Employee Expens
Slide 11: 1H17 trading overview – external events
4 1H17 trading overview – external events Record 1H17 Sales and EBIT were delivered notwithstanding significant external headwinds: 1. Unseasonably cold October Weather in Ave Daily Maximum Temperatures Australia 30.0 • 1H17 October weather was unseasonably cold, on average as much as 6 degrees 26.3
Slide 12: 1H17 trading overview – external events (continued)
4 1H17 trading overview – external events (continued) 2. Earthquake in New Zealand (14 November 2016) • 26 of 44 Premier Retail stores in the earthquake impacted area of New Zealand faced temporary closures of up to 12 days. • Lower Hutt, Wellington (Top 5 Shopping Centre in New Zealand) was the mos
Slide 13: 1H17 trading overview – external events (continued)
4 1H17 trading overview – external events (continued) 3. Hobart Cat & Fiddle building collapse (27 July 2016) • 4 Premier Retail brands faced temporary store closures • Just Jeans lost one month’s trade re-opening on 29 August 2016 • Dotti lost over five months trade re-opening on 5 January 2017, an
Slide 14: Premier Retail 1H17 EBIT: strong growth continues
5 Premier Retail 1H17 EBIT: strong growth continues • EBIT % to Sales up 50 bps • 5 consecutive years of first half EBIT growth in the critical summer season • Key Gross Margin and CODB strategies delivering Underlying EBIT – 5 Year History 15.8% 16% 15.3% $100 $93.0 15% $90 14.3% $84.1 14% $80 13.1
Slide 15: Premier Retail 1H17 EBIT: strong growth continues
5 Premier Retail 1H17 EBIT: strong growth continues Gross Margin Strategies continue to deliver • Key long term foreign currency hedging policies allowing for merchandise planning • Direct sourcing initiatives continued to deliver benefits from new and existing suppliers • Sourcing from new geograph
Slide 16: Premier Retail investing
6 Premier Retail investing • Investment in rapid growth of Smiggle continues in Capital investment international markets 25.0 23.0 • Investment continues in Peter Alexander new stores, 20.0 refurbishments, refits, upsizing and back-of-house 20.0 17.5 • Significant investment continues in all online
Slide 17: Premier Retail investing in growth
6 Premier Retail investing in growth Premier Retail continues to invest in new stores, upgrades and refurbishments to deliver sustainable sales growth: 183 stores received capital investment, including 37 new stores in 1H17 • 26 new stores opened in the United Kingdom • 4 new stores opened in Malays
Slide 18: Premier Retail investing in growth
6 Premier Retail investing in growth • 2 stores relocated and refurbished in Australia, including Chadstone Flagship • 3 stores refurbished in existing locations in Australia Chadstone Image to be inserted • 2 stores relocated and refurbished in Australia, including Chadstone Flagship • 3 stores ref
Slide 19: Smiggle: global expansion driving growth
7 Smiggle: global expansion driving growth • 1H17 sales of $134.7m, up 26.4% (total sales up 81% over 2 years)1 • Another record season for the brand underpinned by strong global LFL growth • Sales have more than doubled in under 3 years • Nearly 60% of total global revenue was generated outside Aus
Slide 20: Smiggle: Australia and New Zealand
7 Smiggle: Australia and New Zealand • Another strong performance in 1H17 • Exceptional growth in online sales • Significant growth in gifting categories - Smiggle is now a key Christmas shopping destination • Growth also continues in key back-to-school product categories • Smiggle continues to deli
Slide 21: Smiggle: UK remains on track to deliver annual sales of $200m by 2019
7 Smiggle: UK remains on track to deliver annual sales of $200m by 2019 • 90 stores trading in the UK prior to the key Christmas period, at the top end of previous guidance • Strong LFL sales growth in 1H17 • 26 new stores opened during 1H17, including the key locations of London Kings Road, Liverpo
Slide 22: Smiggle: Asia
7 Smiggle: Asia Singapore • Business in Singapore remains buoyant with strong demand from both locals and regional tourists • Reopened 1 store, Compass One, in 1H17 following the full centre redevelopment in 2015-16 • One new store at Jurong Point to open in March 2017 due to the high demand in this
Slide 23: Smiggle: Asia
7 Smiggle: Asia Malaysia • Successfully launched Smiggle into the market in April 2016 • Now trading from 5 stores having opened 4 stores in 1H17 • The brand has been well received by locals and tourists, with very encouraging sales results and strong momentum building • 6 stores confirmed to open i
Slide 24: Smiggle to enter the Eurozone
7 Smiggle to enter the Eurozone • New market to open in 2H17, Republic of Ireland, our first Eurozone country • Comprehensive deep dive and in market due diligence has been completed, identifying substantial synergies with the existing UK business • The market has potential for 15-20 stores within 3
Slide 25: Peter Alexander performing strongly
8 Peter Alexander performing strongly • Sales up 13.8% with strong total and LFL sales in both Australia and New Zealand1 • Excellent results from Christmas trading period continuing to cement brand as a key gifting destination • 3 new stores opened: Greenwood Plaza, Macarthur Square and Noosa all t
Slide 26: Peter Alexander future growth
8 Peter Alexander future growth The brand sees future growth opportunities including: • 3 new stores confirmed in 2H17: Woden, Watergardens and Hurstville • 1 store confirmed to be refurbished and upsized in 2H17: Chermside • 5-7 new stores per year in calendar years 2017, 2018 and 2019 • 3-5 store
Slide 27: Online – delivering a world class platform
9 Online – delivering a world class platform • Investment continues in technology, people and Online sales growth ahead of market new marketing initiatives to deliver both: – a world class platform – annual online sales of $100m by 2020 • Online sales up 48.0% in 1H171 – well ahead of market growth
Slide 28: Premier Retail summary 1H17
10 Premier Retail summary 1H17 Smiggle achieves significant growth • 33 new stores opened in 1H17 across 4 countries - more than one new Smiggle store opened around the globe per week • Another record half for Smiggle in sales, with sales up 26.4% (total sales up 81% over 2 years)1 • Nearly 60% of t
Slide 29: Premier Retail summary 1H17
10 Premier Retail summary 1H17 Peter Alexander performing strongly • Peter Alexander sales up 13.8% with strong total and LFL sales growth in Australia and New Zealand1 • New store roll out program in Australia and New Zealand delivering profitable growth • Key investments continue in marketing and
Slide 30: Ordinary Interim Dividend
ORDINARY INTERIM DIVIDEND
Slide 31: Ordinary Interim Dividend
11 Ordinary Interim Dividend • The Premier Board has declared an increased interim dividend fully franked of 26 cps, up 13.0% (1H16: ordinary 23 cps) • The Board’s decision to pay ordinary dividends is always shaped by: – Assessment of the result – Outlook for the market – Confidence in the operatio
Slide 32: Brand by Brand Performance
BRAND BY BRAND PERFORMANCE
Slide 33: Highlights
12 Highlights • Record half with sales growth of 26.4%1 (total sales up 81% over 2 years) to $134.7m • Record season underpinned by strong global LFL growth • 33 stores opened across UK and Asia with more than 50% of stores outside of Australia for the first time • Online success in both Australia a
Slide 34: Highlights
12 Highlights • Sales growth of 13.8%1 to $99.4m • Strong LFL sales growth in both Australia and New Zealand • 1H17 Sales were negatively impacted by one-off temporary store closures including the relocation at Chadstone and earthquake impacted Lower Hutt (NZ) • Online continues to be a driver for g
Slide 35: Highlights
12 Highlights • Strong sales growth of 4.7%1 in a highly competitive market • Investment in flagship store at Chadstone which opened in October-16 delivering positive results • 1H17 Sales were negatively impacted by one-off temporary store closures including the relocation at Chadstone, earthquake i
Slide 36: Highlights
12 Highlights • Investment in flagship store at Chadstone which opened in October-16 delivering positive results • New store format continuing to perform well, delivering improved profitability and customer experience • 1H17 Sales were negatively impacted by one-off temporary store closures includin
Slide 37: Highlights
12 Highlights • Dotti delivered positive sales growth of 0.5%1 in 1H17, after excluding the negative impact of one-off temporary store closures including the relocation at Chadstone, earthquake impacted Lower Hutt (NZ) and building collapse at Cat & Fiddle (Hobart) • Investment in flagship store at
Slide 38: Highlights
12 Highlights • Jacqui E delivered a sales decline of 2.5%1 in 1H17, after excluding the negative impact of one-off temporary store closures including the relocation at Chadstone, earthquake impacted Lower Hutt (NZ) and building collapse at Cat & Fiddle (Hobart) • Investment in flagship store at Cha
Slide 39: Highlights
12 Highlights • After delivering exceptionally strong 15.3% growth in 1H16, sales in 1H17 were down 5.8%1 in a challenging half • 1H17 Sales were negatively impacted by one-off temporary store closures including the relocation at Chadstone, earthquake impacted Lower Hutt (NZ) and building collapse a
Slide 40: Appendix
A Appendix Overview of Premier’s non–IFRS financial information • IFRS financial information is financial information that is presented in accordance with all relevant accounting standards. • Non-IFRS financial information is financial information that is presented other than in accordance with all