Boohoo Group Plc · LSE:DEBS
Boohoo — FY2024 Earnings Presentation
39 slides from Boohoo's earnings presentation, May 12, 2024
Slide 1: FY24 Results
FY24 RESULTS FOR THE 12 MONTHS ENDED 29 FEBRUARY 2024
Slide 2: Agenda
AGENDA • Introduction Mahmud Kamani • Overview John Lyttle • Financial Review Stephen Morana • Strategic Update John Lyttle • Q&A Mahmud Kamani, John Lyttle, Stephen Morana, Carol Kane 2
Slide 3: Welcome & Introduction
MAHMUD KAMANI CHAIRMAN WELCOME & INTRODUCTION 3
Slide 4: FY24 Overview
JOHN LYTTLE CEO FY24 OVERVIEW 4
Slide 5: Overview of FY24 Performance
OVERVIEW OF FY24 PERFORMANCE • Clear brand strategy for future growth, improvement in core brands • Growing confidence in marketplace • Improved EBITDA margin • Investment cycle is complete – benefits of automation and efficiency beginning to materialise across the group • Sheffield automation deliv
Slide 6: Boohoo Group Today
BOOHOO GROUP TODAY Fashion first, online apparel leader with a disruptive business model and strong market share GLOBAL UK & USA CORE 5 CORE BRANDS 8 LABELS CUSTOMER BASE MARKETS STRATEGIC FOCUS TEST & REPEAT VALUE CREDENTIALS LEANER, LIGHTER, FASTER RIGHT PRODUCT, RIGHT CUSTOMER, OUR BRANDS PROVIDE
Slide 7: Strategic Pillars – Key Priorities
STRATEGIC PILLARS – KEY PRIORITIES CUSTOMER FIRST INVESTING FOR GROWTH DELIVERING SUSTAINABLE ROI LATESTTRENDS US WAREHOUSE INTERNATIONALGROWTH OUTSTANDINGVALUE AUTOMATION REBUILDINGPROFITABILITY GREATEXPERIENCE LEANER,LIGHTER,FASTER CASH MANAGEMENT EXECUTION OF CLEAR BRAND STRATEGY 7
Slide 8: FY24 Market Dynamics
FY24 MARKET DYNAMICS HEADWINDS IMPACTED OPERATIONS ACROSS 2024 HEADWIND MITIGATING ACTION FY25 OUTLOOK CONSUMER DEMAND FRESH INVENTORY IMPROVING COST INFLATION INCREASED EFFICIENCY IMPROVING FREIGHT COSTS FLEXIBLE SOURCING NORMALISED FREIGHT LEAD STOCK MANAGEMENT NORMALISED TIMES 8
Slide 9: Financial Review
STEPHEN MORANA GROUP CFO FINANCIAL REVIEW FOR 12 MONTHS ENDED 29 FEBRUARY 2024 9
Slide 10: Financial Overview | FY24
FINANCIAL OVERVIEW | FY24 • Enhanced focus on driving profitable sales • Improved EBITDA margin to 4.0% • Successful completion of 2 major capex projects - Sheffield automation - Roll out of US distribution centre • Inventory levels higher due to US investment • Significant cost savings beginning to
Slide 11: Key Financial Data
KEY FINANCIAL | DATA 12 MONTHS TO END OF FEB (£M) FY24 FY23 CHG GMV 1,809 2,086 (13%) Revenue 1,461 1,769 (17%) Gross Margin 51.8% 50.6% 120bps Operating Costs* 699 832 (16%) Adjusted EBITDA 59 63 (7%) Adjusted EBITDA Margin 4.0% 3.6% 40bps Capex 64 91 (27)m Net Cash / (Debt) (95) 6 (101)m *Excludin
Slide 12: Why We're Reporting GMV
WHY WE’RE REPORTING GMV GMV = £30 CUSTOMER BUYS A NET REVENUE = £24* BOOHOO DRESS GROSS MARGIN = 50% CUSTOMER BUYS A GMV = £30 DRESS FROM 3rd PARTY NET REVENUE = £5-6* BRAND ON DEBENHAMS GROSS MARGIN = 100% • With the addition of Marketplace’s, commission only revenue model, GMV provides a consisten
Slide 13: FY24 GMV
FY24 GMV 2,086 -7% -6% £M H124 H224 1,809 FY24 864 945 -13% YOY (16%) (10%) Core YOY (9%) (4%) Labels YOY (7%) (6%) FY23 CORE BRANDS* LABELS FY24 *Core brands include: boohoo, boohooMAN, PrettyLittleThing, Karen Millen, Debenhams External Marketplace 13
Slide 14: FY24 Net Revenue
FY24 NET REVENUE • Market headwinds impacted consumer demand £M H1 H2 • Core brands improved in H2 vs H1 with positive impact from FY24 729 732 External Marketplace growth Core (8%) (4%) • Labels profitably managed with ongoing migration onto Labels (8%) (8%) Marketplace to support own brand product
Slide 15: Gross Margin
GROSS MARGIN Unlocked savings: • Growth of high margin Marketplace model • Deflation, freight prices & raw material prices • Investment in air freight offset by savings Reinvestment in: • Lower prices for consumers. This is now complete, expect this margin impact to unwind in FY25 • Speed to ensure
Slide 16: Managing Costs with Opportunity Ahead
MANAGING COSTS WITH OPPORTUNITY AHEAD TWELVE MONTHS TO END % FY24 FY24 FY23 CHG OF FEB (£M) NET REVENUE MARKETING 186 191 (3%) 13% DISTRIBUTION 327 407 (20%) 22% ADMIN COSTS 186 234 (20%) 13% OPERATING COSTS* 699 832 (16%) *Excluding depreciation, amortisation, exceptional items & share based paymen
Slide 17: EBITDA Margin
EBITDA MARGIN • Gross margin uplift driven by marketplace & capturing cost benefits • Significant cost reduction driven by ongoing programme & unlocked from Sheffield automation • US investment includes DC costs, marketing investment & carriage saving • Other Marketing spend value flat YOY however i
Slide 18: Exceptional Costs & Impairment of Assets
EXCEPTIONAL COSTS & IMPAIRMENT OF ASSETS TWELVE MONTHS TO END OF FEB (£M) FY24 FY23 Distribution centre closures (53.3) (13.4) Distribution centre set up & automation (18.2) (13.1) Impairment of brands (22.4) - Reclassification to profit or loss of disc. hedges - (14.3) Other exceptionals (9.1) (4.1
Slide 19: Robust Balance Sheet
ROBUST BALANCE SHEET £M FY24 FY23 • Strong cash position with £230m RCF drawn down (325) (325) of headroom Cash & cash equivalents 230 331 • Solid asset base Inventory 208 178 Land & Buildings* 124 128 • Investment in US inventory. Items are largely staple, Incl. Soho Office & Islington Studio regul
Slide 20: Clear Path to Improving Profitability
CLEAR PATH TO IMPROVING PROFITABILITY MARKETPLACE EXPANSION COST CONTROL VOLUME GROWTH AUTOMATION BENEFIT 6 –8% UNLOCK INPUT COST DEFLATION INVESTING IN PRODUCT & PROPOSITION 3.6% 4.0% DELIVERING SUSTAINABLE ROI FY23 FY24 Medium Term Adjusted EBITDA Margin 20
Slide 21: 2025 Outlook
2025 OUTLOOK • Targeting GMV growth in FY25 • Continued improvement to adjusted EBITDA margin • Significantly reduced capex vs prior periods, investment cycle completed • On track to deliver annualised cost savings of £125m across cost of goods, supply chain and overheads in FY25 • Positive free cas
Slide 22: Strategic Update
JOHN LYTTLE GROUP CEO STRATEGIC UPDATE 22
Slide 23: Fashion First Brands
CONFIDENT, 16-24 YEAR OLDS FASHION FIRST AFFORDABLE ARE PROUD TO YOUNG VALUE BRANDS WEAR EXCLUSIVE INFLUENCER LATEST TRENDS PERSONALISED COLLABORATIONS DRIVEN 23
Slide 24: Established Brand Forward
ESTABLISHED BRAND OUR B R A N D NICOLE ARI P A R K E R Design and craftsmanship are key, with a focus on both A trailblazing talent on both stage and screen, FORWARD investment pieces and affordable luxury, all product and American actor and producer Nicole Ari Parker is the prints are designed in-h
Slide 25: Debenhams: First Stop for Fashion, Beauty and Home
Striving to be first stop for consumer’s Fashion, Beauty and Home needs 3,500 brands, 50+ premium fashion, 230+ premium beauty DESIGNERS AT DEBENHAMS Working Rapid 100% Capital capital growth margin light positive Heritage makes us credible but the future drives us 25
Slide 26: Efficiency with Automation
EFFICIENCY WITH AUTOMATION o Cost per throughput unit down 47% (£0.38 vs £0.72) o 10x pick rate improvement (516 units p/h vs 54 units p/h) o FTE headcount down 81% o Supports growth o Expected 5 year payback Comparisons show automated operation peak trading November FY24 vs peak trading manual oper
Slide 27: Progress in the US
PROGRESS IN THE US • Distribution centre launched with PLT & Nasty Gal • Next day & express delivery available in 50 US states • Investment in inventory to support the opening of the US DC • Short term EBITDA impact while investment phase completes • Focus is on achieving scale and driving profitabl
Slide 28: Summary
SUMMARY • Core brands rebounding quickly • Improving margin mix with rapid marketplace growth • Continued cost reduction & increasing efficiencies • Loyal & engaged customer base • Consumer demand strengthening • Focus on sustainable profit growth 28
Slide 29: Q&A
Q&A MAHMUD CAROL JOHN STEPHEN KAMANI KANE LYTTLE MORANA Founder & Group Founder & Group Group CEO Group CFO Executive Chairman Executive Director 29
Slide 30: Appendices
APPENDICES 25 30
Slide 31: Key Financial Data
KEY FINANCIAL DATA (£M) H224 H124 GMV 945 864 Revenue 732 729 Gross Margin 50.1% 53.4% Adjusted EBITDA 27 31 Adjusted EBITDA Margin 3.7% 4.3% Net Cash / (Debt) (95) (35) 31
Slide 32: Sales by Geography
SALES BY GEOGRAPHY (£M) FY24 FY23 UK 921.5 1091.5 USA 299.1 363.7 Rest of Europe 165.8 206.5 Rest of World 74.6 107.0 Total 1461.0 1768.7
Slide 33: Customer KPIs
CUSTOMER KPIs 12 MONTHS TO END OF FEB (£M) FY 24 FY 23 Active Customers 16m 18m Number of Orders 48.5m 55.5m Order Frequency 2.8x 3.1x Conversion rate to sale 3.8% 3.7% Average Order Value £51.68 £53.32 Items per basket 2.8 2.8 Premier order mix 35% 30% 26 33
Slide 34: Income Statement
INCOME STATEMENT TWELVE MONTHS TO END OF FEB (£M) FY24 FY23 Revenue 1461.0 1768.7 Cost of sales (704.9) (873.5) Gross profit 756.1 895.2 Gross margin 51.8% 50.6% Operating costs (698.8) (832.1) Other income 1.3 0.2 Adjusted EBITDA 58.6 63.3 Adjusted EBITDA % 4.0% 3.6% Depreciation & Amortisation (76
Slide 35: Group Balance Sheet
GROUP BALANCE SHEET 12 MONTHS TO END OF FEB (£M) FY 24 FY 23 Intangible assets 104.3 131.5 Property, plant and equipment 349.3 371.6 Right-of-use assets 85.6 136.4 Financial assets - 0.3 Investments 29.9 15.3 Deferred tax 32.1 23.5 Non-current assets 601.2 678.6 Working capital (92.8) (104.9) Lease
Slide 36: Group Cash Flow
GROUP CASH FLOW 12 MONTHS TO END OF FEB (£M) FY 24 FY 23 Profit for the year (137.8) (75.6) Share based payments 17.5 32.0 Depreciation and Amortisation 160.6 82.0 Finance income (9.5) (3.5) Finance expense 22.5 12.0 Loss on unsettled ineffective hedge contracts (13.9) 14.3 Revaluation gain on inves
Slide 37: Glossary
GLOSSARY All merchandise sold to customers after cancellations and returns, including VAT, carriage receipts and premier GMV subscription income Calculated as PBT, interest, depreciation, amortisation, share-based payment ADJUSTED EBITDA charges and exceptional items Calculated as EBIT excluding sha
Slide 38: Forward Looking Statements
FORWARD LOOKING STATMENTS This Presentation contains statements, included or incorporated by reference, which may be, or may be deemed to be, “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition and other matters that are not historical
Slide 39: Disclaimer
DISCLAIMER Forward-looking statements speak only as at the date of this [Presentation/Announcement]. Except as required by applicable law or regulation (including to meet the requirements of the AIM Rules, the Market Abuse Regulation as it forms part of domestic law in the United Kingdom by virtue o