Premier Investments Limited · ASX:PMV
Premier Investments — H1 2016 Earnings Presentation
36 slides from Premier Investments's earnings presentation, Mar 18, 2016
Slide 1: Premier Investments Limited 2016 Half Year results overview
Premier Investments Limited 2016 Half Year results overview 18 March 2016
Slide 2: Agenda
Agenda Premier Investments Limited 1 1H16 overview 8 Peter Alexander performing strongly Premier Investments 1H16 2 consolidated financial results 9 Online strategy delivering 3 Premier Retail 1H16 performance 10 Premier Retail summary 4 Gross margin strategies delivering 11 Ordinary interim dividen
Slide 3: 1H16 overview
PREMIER INVESTMENTS LTD 1H16 OVERVIEW © — . , ye H
Slide 4: Premier Investments 1H16 overview
1 Premier Investments 1H16 overview • Group profit – Net profit before tax $98.3 million, up 24.9% on 1H151 – Net profit after tax $71.5 million, up 25.9% on 1H151 – Earnings per share of 45.7c, up 25.3% on 1H151 – Ordinary interim fully franked dividend of 23 cps, up 2 cps (1H15 ordinary: 21cps) •
Slide 5: Premier 1H16 overview
1 Premier 1H16 overview • Premier Retail continuing to grow – EBIT up 29.7% to $90.7 million1 – Net profit before tax up 31.6% to $88.6 million1 – Total sales increase of 15.1% on 1H151,2 – LFL sales up 6.9%, with all brands delivering positive LFL growth1 – Smiggle Global sales up 46.5%1 – Peter Al
Slide 6: Premier 1H16 consolidated income statement
2 Premier 1H16 consolidated income statement 27 weeks to 26 weeks to $m 30 January 2016 24 January 2015 Premier revenues (ex Premier Retail) 12.8 13.8 Premier expenses (ex Premier Retail) (2.7) (2.3) Premier Retail EBIT 90.7 70.0 Finance costs (2.5) (2.8) Net profit before income tax 98.3 78.7 Incom
Slide 7: Premier summarised consolidated balance sheet
2 Premier summarised consolidated balance sheet $m 30 Jan 2016 25 Jul 2015 Assets Cash and cash equivalents 288.4 281.6 Inventories 112.6 111.8 Property, plant and equipment 129.3 123.5 Other assets 50.9 66.7 Asset classified as held for sale - 1.0 Investment in associate 213.7 209.5 Intangible asse
Slide 8: Premier Retail
Slide 9: Premier Retail 1H16 performance: highlights
3 Premier Retail 1H16 performance: highlights • EBIT up 29.7% to $90.7 million1 • EBIT margin up 180 bps to 16.1%1 • Profit before tax up 31.6% to $88.6 million1 • Total sales up 15.1%1,2 • LFL sales up 6.9%, all brands delivered positive LFL growth1 • All key growth initiatives delivering – Smiggle
Slide 10: Premier Retail performance
3 Premier Retail performance 27 weeks to 30 26 weeks to 24 $000 Jan 2016 Jan 2015 Var LY Sales1 564,951 490,837 +15.1% LFL sales +6.9% +1.1% Gross Profit1 366,020 311,179 +17.6% Gross margin (%)1 64.8% 63.4% 139bps Employee Expenses2 (137,255) (118,318) +16.0% % sales 24.3% 24.1% 19bps Rent2 (103,45
Slide 11: Gross margin strategies delivering
4 Gross margin strategies delivering • Premier Retail gross margin expanded by 139 bps 66.0% Gross Margin ‐ 5 Year History 1.10 despite the weaker AUD and a highly competitive 64.8% 1.05 65.0% market through the effective implementation of key 1.0249 1.0419 1.00 gross margin strategies: 64.0% 0.9176
Slide 12: Cost of doing business remains a focus
5 Cost of doing business remains a focus • Costs continue to be well controlled and investment continues into strategic growth initiatives, including Smiggle International (UK, Hong Kong, Malaysia), Online and Peter Alexander • The group’s two largest costs have grown less in our established brands
Slide 13: Premier Retail investing in growth
6 Premier Retail investing in growth • Investment in rapid growth of Smiggle continues in Capital investment international markets 25.0 • Investment continues in Peter Alexander new stores, 20.0 17.5 20.0 refurbishments, refits, upsizing and back-of-house 15.0 12.7 • Significant investment continues
Slide 14: 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; 244 stores received capital investment, including 37 new stores • 18 new stores opened in the United Kingdom • 4 new stores opened in Australia • 12
Slide 15: Premier Retail investing in growth
6 Premier Retail investing in growth • 3 new stores opened in Australia • 1 store relocated in New Zealand • 5 stores refurbished in Australia • 4 new stores opened in Australia and New Zealand • 2 stores relocated across Australia and New Zealand • 6 stores refurbished in Australia • Flagship Mid C
Slide 16: Smiggle: Australia and New Zealand
7 Smiggle: Australia and New Zealand • Very strong total and LFL growth in both Australia and New Zealand • Strong 1H16 for the online channel • Very pleasing results from temporary kiosks over the Christmas and Back to School period, in response to customer requests for more accessibility • Signifi
Slide 17: Smiggle: United Kingdom
7 Smiggle: United Kingdom • Smiggle UK continues to trade ahead of expectations • Rapidly investing in store and online growth as a result of strong performance • Opened 18 stores 1H16 • Targeting the opening of up to a further 28 stores in 2H16, taking the total stores up to 70 by the end of FY16 •
Slide 18: Smiggle: Singapore
7 Smiggle: Singapore • Another strong LFL result • Good growth in portfolio across both tourist and suburban stores. Continued strong acceptance of brand from regional tourists providing excellent insight into which markets Smiggle is coveted • Ion, a prime Orchard Road store which opened February 2
Slide 19: Smiggle: Hong Kong
7 Smiggle: Hong Kong Hong Kong • First store to open, Telford Plaza May 2016, a major centre with over 114 million footfall per annum • Further two sites have already been signed to open later in the year, one before end of FY16 and another in 1H17 • Advanced discussions with a further three centres
Slide 20: Smiggle: Malaysia
7 Smiggle: Malaysia Malaysia • First store to open, Suria KLCC April 2016, the number one centre in Kuala Lumpur • Two further sites have been signed off, with an additional four sites in ongoing discussions • Landlords acceptance of the brand is strong • High calibre in-market team recruited and in
Slide 21: Peter Alexander
8 Peter Alexander Peter Alexander continues to perform strongly • Total sales up 22.5% from all channels with strong total and LFL sales in both Australia and New Zealand • Excellent results from Christmas trading period • Eight new stores opened, six in Australia including first Airport store in Br
Slide 22: Online strategy delivering
9 Online strategy delivering • Online sales up 47.7% in 1H16 – well ahead of Online sales growth market growth of 7.1%1 for the 12 months ended December 2015 • Online channel delivers significantly higher EBIT margin than the Group average • Strong performance of new sites: – Smiggle.co.uk for UK/Eu
Slide 23: Premier Retail summary 1H16
10 Premier Retail summary 1H16 Smiggle achieves significant growth • Smiggle global sales up 46.5% with strong LFL growth in all countries (Australia, New Zealand, Singapore and United Kingdom) • Solid pipeline of new stores identified for accelerated UK roll out in FY16 and beyond – plans for up to
Slide 24: Premier Retail summary 1H16
10 Premier Retail summary 1H16 Peter Alexander performing strongly • Peter Alexander sales up 22.5% with strong total and LFL sales growth in Australia and New Zealand • New store roll out program in Australia and New Zealand delivering profitable growth • Key investments continue in marketing and o
Slide 25: Premier Retail summary 1H16
10 Premier Retail summary 1H16 Core brands strategies on track • All brands delivered positive LFL sales growth in 1H16 • Gross margin improved 139 bps despite weaker AUD and a highly competitive market • Inventories very clean • Portmans achieved excellent 1H16 result with total sales up 18.9%, str
Slide 26: Ordinary interim dividend
ORDINARY INTERIM DIVIDEND
Slide 27: Ordinary interim dividend
11 Ordinary interim dividend • The Premier Board has declared an ordinary interim dividend fully franked of 23 cps, up 2 cps (1H15: ordinary 21 cps) • The Board’s decision to pay ordinary dividends is always shaped by: – Assessment of the result – Outlook for the market – Confidence in the operation
Slide 28: Premier Retail brand by brand performance
<— i] l a6 a i & ; PREMIER RETAIL BRAND BY BRAND PERFORMANCE
Slide 29: Highlights (Smiggle)
12 Highlights • Total sales growth of 46.5% on 1H15 (total sales up 74% over 2 years) • Result underpinned by very strong LFL’s in all markets • 4 new stores opened in Australia and 18 in the UK; one closure in Singapore (full centre redevelopment) • 42 stores plus online trading in the UK at the en
Slide 30: Highlights (Peter Alexander)
12 Highlights • Total sales growth of 22.5% • Online growth exceptional and well ahead of fashion market • Strong margin growth despite weaker Australian dollar • Engineered product for outlet stores performing well • New Zealand delivered impressive growth on the back of double digit growth last ye
Slide 31: Highlights (Portmans)
12 Highlights • 1H16 delivered strong sales of 18.9% • Significant LFL sales growth and margin expansion was achieved • Benefit of new sourcing initiatives continues to improve margin • Online initiatives drove online sales up 35.6%, well ahead of fashion market at 7.1% 1 • Investment in Jess Hart a
Slide 32: Highlights
12 Highlights • Total sales up 7.4% • Positive LFL sales growth across all channels • 3 new stores opened • Online sales up 32.0%, well ahead of the fashion market up 7.1% 1 • Reinvigorated Special Occasion Collection delivered incremental growth during the strong Christmas trading period. • High cu
Slide 33: Highlights
12 Highlights • Total sales growth of 4.8% • Strong growth from denim and shorts across men's and women's • Branded Denim drove a very strong performance led by Levi's, Guess and Calvin Klein • Strong Q2 driven by new women's ranges • New store format developed for launch with the opening of a new M
Slide 34: Highlights (Jay Jays)
12 Highlights • Total sales up 3.1% • LFL sales even stronger than total sales with the closure of unprofitable stores since last year1 • New store format performing exceptionally well • Gross margin expansion continues through key product development and new sourcing initiatives Overview of Results
Slide 35: Highlights
12 Highlights • Total sales up 2.2% • LFL sales positive • 2 unprofitable stores closed during the half • Seasonal programs continue to perform strongly from special climatic ranges • Sourcing from new geographies delivering positive margin results • 2 stores relocated in New Zealand including the f
Slide 36: Appendix: Overview of Premier's non-IFRS financial information
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