Boohoo Group Plc · LSE:DEBS
Boohoo — boohoo.com — H1 2015 Earnings Presentation
22 slides from Boohoo's earnings presentation, October 2014
Slide 1: Interim Results for the Six Months Ended 31st August 2014
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31ST AUGUST 2014
Slide 2: First Half Highlights
FIRST HALF HIGHLIGHTS þ Warehouse capacity þ Four further currency options increased for Scandinavian customers þ Warehouse extension þ #experienceeverything started þ #wherewestand þ WMS system implemented þ New payment gateway þ Spanish language website þ International price changes þ Ge
Slide 3: Neil Catto, CFO
NEIL CATTO, CFO NEIL CATTO, CFO
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS q Revenue up 31% to £67.2m (2013 £51.4m) q UK growth 47% year on year q Accelerating international sales growth Q1 to Q2, with return to growth in Australia q Underlying EBITDA £6.8m (10.1% of sales) q Gross margin at 62.3% q Warehouse capacity increased q Significant IT
Slide 5: Summary Income Statement
SUMMARY INCOME STATEMENT Six months ended 31 August 2014 2013 Change (£m) q Accelerating Revenue 67.2 51.4 +31% revenue growth Gross profit 41.8 29.6 +41% q Gross margin Gross margin 62.3% 57.5% +480bps increase due to Operating profit 4.3 3.7 +16% change in sourcing EBITDA (adjusted) 6.8 4.2 +63%
Slide 6: International
INTERNATIONAL Sales by geographic segment £m Six months Six months Change CER ended ended 31 August 2014 31 August 2013 UK 45.6 30.9 +47% +47% Rest of Europe 8.7 6.1 +43% +51% Rest of world 12.9 14.4 -11% +1% Total revenue 67.2 51.4 +31% +36% q Strong growth globally International q Europe showing
Slide 7: Accelerating Growth
ACCELERATING GROWTH UK q Accelerating revenue growth in all regions q Quarter on quarter growth of 20% - strongest for 7 quarters q UK driven by marketing investment and promotional strategy 50% q Europe - foreign language websites and marketing investments 44% q Rest of world - Australian turn
Slide 8: Operating Costs
OPERATING COSTS 6 months ended 2014 2013 Change 53.4% 31st August,£m 50.1% 49.4% Marketing 9.8 7.1 +38% Distribution 14.6 10.8 +36% 14.5% 13.8% 14.0% Other admin 11.5 7.9 +45% TOTAL 35.8 25.8 +39% 21.8% 20.9% 22.1% 6 months ended 2014 2013 Change 31 August, % revenue Marketing 14.5% 13.8% +73bps 15.
Slide 9: Operating Cash Flow
OPERATING CASH FLOW 6 months ended 31 August, £m 2014 2013 q Efficient conversion of EBITDA to cash Profit for the period 3.3 2.8 q Inventory tightly controlled on 8 Depreciation/amortisation 0.8 0.4 weeks historical cover Share based payment charges 0.4 - q Working capital inflows in H1 from Tax
Slide 10: Balance Sheet
BALANCE SHEET At 31 August, £m 2014 2013 q IPO proceeds of £46m (net Intangible assets 3.8 1.1 of transaction related costs) Property, plant and equipment 7.0 5.3 q £2.7m warehouse loan Deferred tax 0.1 - repaid in April 2014 Non-current assets 10.9 6.5 q Negative net working capital now purely w
Slide 11: KPIs
KPIs Monthly sessions (millions) and conversion rate2 Indicator 2014 2013 Change 4.0% 14 12 Active customers1 2.7m 2.0m +33% 3.5% 10 Number of orders 2.7m 1.9m +40% 8 3.0% 6 Conversion rate2 3.5% 3.3% +20bps 2.5% 4 Average order value3 £36.90 £37.56 -2% 2 2.0% 0 Number of items in a 01-Mar-12 01-Sep
Slide 12: Investing in Our Warehouse Infrastructure
INVESTING IN OUR WAREHOUSE INFRASTRUCTURE Investing ahead of the curve for £1bn annual gross sales q Mezzanine construction complete q Construction of 110,000 sq.ft warehouse extension under way q 670,000 sq. ft additional storage space q Enough for 8m additional units/3x current capacity q War
Slide 13: Investing in Our IT Systems
INVESTING IN OUR IT SYSTEMS Delivered in the last six months Current initiatives • WMS – went live 4th Sept • Front end optimisation – – Better stock management – Enhanced personalisation – More efficient picking and packing • Additional payment options – More efficient use of warehouse • Recently o
Slide 14: Carol Kane, Joint CEO
CAROL KANE, JOINT CEO
Slide 15: Our Fashion
THE GLOBAL FASHION LEADER FOR A SOCIAL GENERATION Our fashion q Our focus remains on 16-24 year olds q We publish100 new styles daily with over 9,000 styles available q Womens tops now represent over 15% of sales, second to dresses our leading category at 34% of sales q New ranges performing wel
Slide 16: Marketing
MARKETING Top 500 most engaged brands on Biggest ever TV campaign rolled Instagram out this summer Rank Brand Name Photo Likes #experienceeverything case study 1 Brandy Melville 10,502,824 2 Free People 3,832,598 • Instagram reach of 24m 3 Nike 3,340,055 • Twitter reach of 54m 4 Nike Football 2,909,
Slide 17: Marketing: #wherewestand
MARKETING #wherewestand • Launched 8th September with TV ad and social media campaign • Insert flyer in 500,000 parcels globally • Blogger dinners conducted in Europe to launch campaign • #wherewestand hashtag to encourage audience interaction whilst dual screening • Social tags across underground c
Slide 18: TV Advertising
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Slide 19: International
INTERNATIONAL • New foreign language websites ‒ France – showing continued momentum ‒ Spain – testing lower price points ‒ Germany – launched without free returns ‒ Italy – recently launched • New currencies launched ‒ Norway, Sweden, Denmark • In country teams update ‒ Australia in place, USA, Euro
Slide 20: In Summary: Six Months of Progress
MOBIL IN SUMMARY SIX MONTHS OF PROGRESS • Scaled up management team (IT, HR, Buying, Marketing) • New foreign language websites (Spain, Germany, Italy) • New responsive website design • Warehouse investment (Mezzanine, WMS, extension commenced) • Extension of range (The Edit, boohoo Petite with more
Slide 21: Disclaimer
DISCLAIMER This presentaOon has been prepared by Boohoo.com plc (“Boohoo” or the “Company”) and the informaOon contained herein is restricted and is not intended for distribuOon to, or use by any person or enOty in any jurisdicOon or country where such distribuOon or use would be contrary to local l
Slide 22: Glossary
GLOSSARY AcOve customers: defined as having shopped in the last year Conversion rate: defined as the percentage of monthly unique visitors to the site making a purchase Average order value: calculated as gross sales including sales tax divided by the number of orders Number of items per basket: defined