Kmd Brands Limited · NZX:KMD
Kmd Brands — Kathmandu Holdings — FY2010 Earnings Presentation
28 slides from Kmd Brands's earnings presentation, Sep 24, 2010
Slide 1: Kathmandu – FY10 Results Presentation
For personal use only KATHMANDU – FY10 RESULTS PRESENTATION 1
Slide 2: Contents
CONTENTS For personal use only • Results Overview • Key Line Items • Country Results • Cash Flow, Dividend, Balance Sheet • FY11 Outlook • Growth Strategy Update • Questions 2
Slide 3: Results Overview
For personal use only 3 OVERVIEW RESULTS
Slide 4: Results Overview: Year-On-Year
RESULTS OVERVIEW: Year-On-Year For personal use only Denominated in: NZ $m A $m *1 FY10 FY09 DIFF $ DIFF % FY10 FY09 DIFF $ DIFF % Sales 245.8 215.6 30.2 14.0% 196.6 175.5 21.1 12.0% Gross Profit 155.3 138.8 16.5 11.9% 124.2 113.0 11.2 9.9% Gross Profit Margin 63.2% 64.4% 63.2% 64.4% Operating expen
Slide 5: Results Overview: Half-Year Split
RESULTS OVERVIEW: Half-Year Split For personal use only First half year Second half year NZ $m 1H FY10 1H FY09 DIFF $ DIFF % 2H FY10 2H FY09 DIFF $ DIFF % Sales 106.6 83.6 23.0 27.5% 139.2 132.0 7.2 5.5% Gross Profit 65.3 52.2 13.1 25.1% 90.0 86.6 3.4 3.9% Gross Profit Margin 61.3% 62.4% 64.7% 65.6%
Slide 6: Results Overview: Comparison to Prospectus (Normalised FY10)
RESULTS OVERVIEW: Comparison to Prospectus (Normalised FY10) For personal use only NZ $m FY10 PROSPECTUS DIFF $ DIFF % Sales 245.8 240.0 5.8 2.4% Gross Profit 155.3 153.7 1.6 1.0% Gross Profit margin % 63.2% 64.0% Operating expenses*1 (101.8) (96.6) (5.2) 5.4% EBITDA 53.5 57.1 (3.6) -6.3% EBITDA mar
Slide 7: Results Overview: Summary
RESULTS OVERVIEW: Summary For personal use only • Very strong first half followed by a much weaker second half. We noted at the half year and in subsequent market update there was the possibility of result being influenced by an uncertain economic environment. Trading was more challenging than we ex
Slide 8: Key Line Items
For personal use only 8 ITEMS KEY LINE
Slide 9: Key Line Items: Sales
KEY LINE ITEMS: Sales For personal use only SALES: up 14.0% to NZ$245.8m SALES*1 • Sales growth year on year:*2 New Zealand Australia United Kingdom NZ 10.8%, AU 15.2%, UK 16.7%. NZ$245.8m • At constant exchange rates sales growth $9.6m NZ$240.0m $11.6m NZ$215.6m $29.3m / 13.5%. $9.5m $141.9 $134.8
Slide 10: Key Line Items: Same Store Sales Growth
KEY LINE ITEMS: Same Store Sales Growth For personal use only NZ AU UK GROUP 14.1% 13.0% 12.1% 9.9% 5.8% 0.6% 0.8% 1.3% 0.3% -4.7% -5.5% -8.3% 1H FY10 2H FY10 FY10 • Full year same store sales growth 1.3%: first half year 12.1%, second half year (5.5%) • Second half year: − Easter trading in AU and
Slide 11: Key Line Items: Gross Profit Margin %
KEY LINE ITEMS: Gross Profit Margin % For personal use only NZ AU UK Group 66.7% 65.4% 64.4% • Gross Profit margin 120 bps below 62.0% 63.2% FY09 and 80 bps below Prospectus 60.3% forecast. 57.2% 55.8% • Gross Profit margin variations • First half clearance activity level FY10 Full Yr FY09 Full Yr (
Slide 12: Key Line Items: Cost Of Doing Business
KEY LINE ITEMS: Cost Of Doing Business For personal use only OPERATING EXPENSES: up 11.9% to NZ$101.4m NORMALISED OPERATING EXPENSES: NZ$101.8m COMPARISON TO FY09 • Normalised operating expenses*1 NZ$5.2m NZ $m FY10 FY09 DIFF $ DIFF % (5.4%) above Prospectus forecast. Made up Rent 25.6 23.1 2.5 10.8
Slide 13: Key Line Items: EBITDA and EBIT
KEY LINE ITEMS: EBITDA and EBIT For personal use only SALES: up 14.0% to NZ$245.8m OPERATING EXPENSES: up 11.9% to NZ$101.4m EBITDA: up 11.8% to NZ$53.9m EBITDA EBIT NZ$57.1m NZ$53.9m NZ$50.6m NZ$48.2m NZ$47.9m NZ$42.6m FY10 Prospectus FY09 FY10 Prospectus FY09 21.9% 23.8% 22.4% 19.5% 21.1% 19.8% EB
Slide 14: Key Line Items: NPAT
KEY LINE ITEMS: NPAT For personal use only SALES: up 14.0% to NZ$245.8m OPERATING EXPENSES: up 11.9% to NZ$101.4m EBITDA: up 11.8% to NZ$53.9m NPAT (EXCL IPO COSTS): up NZ$10.3m to NZ$25.2m • Reduced net debt levels from FY09 NPAT (excl. IPO costs net of tax) NZ$155.7m to FY10 NZ$49.3m NZ$30.9m • To
Slide 15: Country Results
For personal use only 15 COUNTRY RESULTS
Slide 16: Country Results: New Zealand
COUNTRY RESULTS: New Zealand For personal use only NZ $m FY10 FY09 DIFF • Sales up 10.8% to NZ$94.3m Sales 94.3 85.1 10.8% • Same store sales growth 0.6% Same store sales 0.6% -1.0% 160 bps • New Stores 2H FY10: EBITDA (trading result) 27.7 23.7 16.9% - 3 new stores opened – Hastings, Gisborne, EBIT
Slide 17: Country Results: Australia
COUNTRY RESULTS: Australia For personal use only A $m FY10 FY09 DIFF • Sales up 15.2% to A$113.5m Sales 113.5 98.5 15.2% • Same store sales growth 0.8% Same store sales 0.8% -0.8% 160 bps • New Stores 2H FY10: - 4 new stores opened – Ballarat, Fremantle, EBITDA (trading result) 23.5 21.1 11.4% Tea T
Slide 18: Country Results: United Kingdom
COUNTRY RESULTS: United Kingdom For personal use only UK £m FY10 FY09 DIFF • Sales up 16.7% to £4.2m Sales 4.2 3.6 16.7% • Same store sales growth 5.8% Same store sales 5.8% 16.3% -1050 bps • Total operating expenses (excl. depreciation): EBITDA (trading result) (0.5) (0.7) -28.6% - FY10 69.1% of sa
Slide 19: Cashflow, Dividend, Balance Sheet
For personal use only CASHFLOW DIVIDEND BALANCE SHEET 19
Slide 20: Cash Flow
CASH FLOW For personal use only NZ $m FY10 PROSPECTUS FY09 Pro forma • Capital expenditure $13.6m vs Prospectus EBITDA 53.9 57.1 48.2 forecast NZ$12.6m: - New stores capex - NZ$8.3m for 15 new Change in working capital (1.8) 1.9 3.3 stores and 2 relocations (Prospectus NZ$5.6m for 12 new stores) Cha
Slide 21: Dividend
DIVIDEND For personal use only • 7.0 cents per share, compared to 6.7 cents per prospectus forecast • Payout ratio of 55% of NPAT adjusted for IPO costs net of tax • AU dividends franked to 100%, but note that some future interim dividends may be franked at a lower level • NZ dividends fully imputed
Slide 22: Balance Sheet
BALANCE SHEET For personal use only • Year-end inventories per store down 20.1%: NZ $m FY10 FY09 - FY10 NZ$0.386m - FY09 NZ$0.483m Inventories 37.4 39.6 - Average month-end inventories per store Property, plant and equipment 28.0 21.3 across year down 22.6% Intangible assets 241.8 243.9 • Reduced ne
Slide 23: Foreign Currency
FOREIGN CURRENCY For personal use only FORWARD HEDGING POSITION FY11 FY12 • Effective US$ hedge rates FY10 similar to FY09: A$ / US$ % covered 90%+ 20%+ - A$/US$ 0.812 FY10 vs 0.812 FY09 - NZ$/US$ 0.680 FY10 vs 0.687 FY09 Effective Rate 0.840 0.878 • Forward Hedging Position: NZ$ / US$ % covered 90%
Slide 24: FY11 Outlook
For personal use only 24 FY11 OUTLOOK
Slide 25: FY11 Outlook
FY11 OUTLOOK For personal use only Kathmandu • Store rollout in FY11 readily achievable- matches what we achieved in FY10 • Approximately 50% of stores over 3 yrs old will have been refurbished and/or relocated by end of FY12 • Significant product design and development investment over recent years
Slide 26: Growth Strategy Update
For personal use only GROWTH STRATEGY UPDATE 26
Slide 27: Growth Strategy Update
GROWTH STRATEGY UPDATE Kathmandu core growth paths continue to provide varied strategic choices For personal use only GROWTH STRATEGY UPDATE • 4 already confirmed, Logan (Queensland), Whitford City (Perth), New store Wollongong, Orange. At least 2 more confirmations expected for 1H FY11 • Objective
Slide 28: Questions?
For personal use only 28 QUESTIONS?