Kmd Brands Limited · NZX:KMD
Kmd Brands — Kathmandu Holdings — Macquarie Conference 2014
36 slides from Kmd Brands's conference presentation, May 7, 2014
Slide 1: Macquarie Presentation
For personal use only Macquarie Presentation Peter Halkett – Chief Executive Officer Grant Taylor – Chief Information Officer 7 May 2014
Slide 2: Agenda
Agenda For personal use only 1. Kathmandu Business Overview 2. Key Growth Strategies 3. Systems Deep Dive 4. Market Update & Outlook 5. Questions
Slide 3: Kathmandu Business Overview
For personal use only Kathmandu Business Overview
Slide 4: Brief History
Brief History For personal use only Leading brand and vertical retailer of clothing and equipment for outdoor, travel and adventure in Australia, New Zealand and UK • 1987 - First Australian store opened Hardware Lane, Melbourne • 1991 - First New Zealand store opened High Street, Christchurch • 199
Slide 5: Brief History (continued)
Brief History (continued) For personal use only • 2009 - Kathmandu is publicly floated and dual listed on the Australian (ASX) and New Zealand (NZX) stock exchanges • 2011 - Brand relaunch / 100th store opened • 2012 - New website platform • 2013 - Reached 1 million Summit Club members • 2014 - Laun
Slide 6: Business Overview Today
Business Overview Today For personal use only • Vertically integrated business, 143 stores. • Designing / sourcing / selling technical outdoor product. • Total sales split FY13 c.65/35 apparel / equipment. • Multiple effective & profitable store formats, aligned to market demographics and retail pre
Slide 7: Growth since IPO, November 2009
Growth since IPO, November 2009 For personal use only Group Sales FY09 - FY13 1H FY14 (NZ $m) (NZ $m) $384.0 $347.1 $306.1 $245.8 $215.6 FY09 FY10 FY11 FY12 FY13 Current Analysts’ consensus FY14* • Sales c.$405.2m • EBIT c. $68.7m (FY10 $48.5m) • NPAT c.$45.9m (FY10 $25.2m) *(Bloomberg 29 April)
Slide 8: Store Roll Out
Store Roll Out For personal use only • We have opened 51 new stores since the start of FY11. • From end FY11, all new stores have been designed incorporating new brand identity. • In same period, we have refurbished or re-located a further 29 stores. • Capex on store rollout and refurbishment/re-loc
Slide 9: Store Environment
Store Environment For personal use only Hay Street, Perth 2013 Lichfield Street, Christchurch 2002
Slide 10: Flagship Stores
Flagship Stores For personal use only Broadway, Auckland External signage application is much more prominent, in tandem with choice of prime locations Perth, WA Broadway, Auckland
Slide 11: New Website in 2012
For personal use only New Website in 2012
Slide 12: Online and Digital
Online and Digital For personal use only • Rapid growth - 3yr CAGR 86% from FY10 to FY13. • Mobile optimised site and international shipping launched. • Amazon & NEXT UK operational – provides access to 144 million potential customers. • Future enhancements: click and collect, online sales in-store,
Slide 13: Product Range
Product Range For personal use only • Inventory investment targeting key growth categories. • Total SKU count to remain around current level. • Ongoing investment in research and product development, particularly in technical fabrics. • Best in field testing programme established to enhance technica
Slide 14: Comparison of international Outdoor Brands
Comparison of international Outdoor Brands For personal use only Source: Company filings, media releases, press releases, mergermarket ¹ Most recently reported / quoted revenue converted to US$ at 28-Mar spot rates * Doesn’t include some Asian and other brands
Slide 15: Brand lifestyle stages
Brand lifestyle stages For personal use only Sales per capita FY13 - $32.39 NZD 1 store per 92k population Sales per capita FY13 - $8.89 AUD 1 store per 240k population Sales per capita FY13 - £0.04 GBP 1 store per 15.925m population
Slide 16: Key Growth Strategies
For personal use only Key Growth Strategies
Slide 17: Growth Strategy Update
Growth Strategy Update For personal use only GROWTH STRATEGY UPDATE • Success of new formats has allowed a revised target of 180 • New target of 180 stores New store for Australia and New • New store performance continues to meet expectations rollout Zealand • On track to open 15 new stores in FY14
Slide 18: Growth Strategy Update
Growth Strategy Update For personal use only GROWTH STRATEGY UPDATE • Invest in growth categories • Maximise sales • 3 year product roadmap established Enhance productivity of existing • Continued investment in technical resources, research and development, product range and design to further develo
Slide 19: Growth Strategy Update
Growth Strategy Update For personal use only GROWTH STRATEGY UPDATE • Focus on this area has increased greatly • Online sales grew by 49% YOY at constant exchange rates. • Aus / NZ working towards full integration with stores • International shipping launched, will assist in growing international Su
Slide 20: Systems Supporting Growth Strategies
Systems Supporting Growth Strategies For personal use only • Over the last 3 years, Kathmandu has focussed on transformation for: - Brand; - Product; - Stores. • Dependency on IT and systems to support the next phase of Kathmandu growth. • Grant Taylor – Chief Information Officer.
Slide 21: Systems Deep Dive
For personal use only Section Divider Systems Deep Dive
Slide 22: Introduction
Introduction For personal use only • Grant Taylor CIO • Joined August 2010 • Kathmandu’s vertical strategy a competitive advantage but… • Best of Breed IT strategy heavily reliant on overnight integrations and not scalable and issues with features and functionality • Data accurate… but accurate yest
Slide 23: Need for change
Need for change For personal use only • The current solutions would not achieve future requirements • Requirements for real time information, improved customer information and experiences • Expectations of customers have become more sophisticated. It’s expected that the availability of stock, offers
Slide 24: What we were looking for
What we were looking for For personal use only • An end to end solution • A commitment to the retail vertical • A roadmap for the future • The ability to work with leading partners • Scalability • Fit our business • Affordability
Slide 25: Specific Benefits
Specific Benefits For personal use only • Timely, accurate information and the ability to scale to accommodate growth and new markets. • Flexibility at Point of Sale: promotions, mobility, improved performance. • Customer Loyalty: targeted offers, improved sign up process, seamless online and in-sto
Slide 26: Examples of what it would achieve
Examples of what it would achieve For personal use only • Timely, accurate information and the ability to scale to accommodate growth, new markets • Flexibility at Point of Sale: promotions, mobility, improved performance • Customer Loyalty: targeted offers, improved sign up process, seamless online
Slide 27: How to achieve it
How to achieve it For personal use only • Look to a vertical retail specific partner who has a leading product offering, a strong roadmap for the future and leverage their expertise • Microsoft AX for Retail was selected • Microsoft AX is helping to resolve Kathmandu’s integration and data issues wh
Slide 28: How to achieve it
For personal use only How to achieve it
Slide 29: What have we done so far
What have we done so far For personal use only • Virtualized server infrastructure in the Cloud • New global Wide Area Network • Microsoft Dynamics Customer Relationship Management (CRM) • AX Product Information Management (PIM) • Point of Sale (POS) to 140+ stores in NZ, AU and the UK • Just Enough
Slide 30: What we are working on
What we are working on For personal use only • AX Financials • Warehouse Management • Allocation and Replenishment • Product Lifecycle Management (PLM) • Additional Online functionality • Microsoft Lync • More CRM • More PIM
Slide 31: What next
What next For personal use only • Wireless in stores • Mobile POS • Additional Online functionality • More CRM • More Product Information • Supplier Portal • Supply Chain automation • New markets • International shipping
Slide 32: Summary
Summary For personal use only • The legacy systems at Kathmandu would not deliver future requirements and Microsoft was chosen as a core platform • There is an extensive roadmap and plan for the future - Step change! • A large amount of work has already been successfully completed and is in progress
Slide 33: Market Update & Outlook
For personal use only Market Update & Outlook
Slide 34: Third Quarter Sales
Third Quarter Sales For personal use only • Total Group sales for the 13 weeks, 27 January to 27 April $93.0m, up 3.6% YOY at actual exchange rates (12.9% at constant exchange rates). • Same store sales for the same period down 0.6% YOY at actual exchange rates (up 8.2% at constant exchange rates).
Slide 35: Full Year FY14 Outlook
Full Year FY14 Outlook For personal use only • No change to commentary provided with our 1HFY14 result at end February. • Winter sale in June/July is our largest promotional event each year, and weather is a key variable relevant to relative success of this sale. • A positive start to FY14. • Contin
Slide 36: Questions?
For personal use only Questions?