Lovisa Holdings Ltd. · ASX:LOV
Lovisa — H1 2022 Earnings Presentation
19 slides from Lovisa's earnings presentation, Feb 24, 2022
Slide 1: Lovisa Holdings Limited 2022 Half-Year
Lovisa Holdings Limited 2022 HALF-YEAR VICTOR HERRERO CHIEF EXECUTIVE OFFICER CHRIS LAUDER CHIEF FINANCIAL OFFICER
Slide 2: Forward-looking statements
Some of the information contained in this presentation contains “forward - looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect the current intentions, plans, expectations, assumptions and beliefs about future events of Lovisa
Slide 3: Contents
CONTENTS 1. STRATEGY RECAP 2. HALF-YEAR OVERVIEW 3. FINANCIAL OVERVIEW 4. TRADING PERFORMANCE 5. COST OF DOING BUSINESS 6. CASHFLOW AND BALANCE SHEET 7. STORE GROWTH 8. DIGITAL UPDATE 9. TRADING UPDATE AND OUTLOOK 10. SUMMARY 11. APPENDICES 3
Slide 4: Strategy Recap
STRATEGY RECAP Our strategic plans remain in place OUR PAST OUR PRESENT OUR FUTURE 12 years ago we set out to develop a fast Although we have some short-term Continued expansion in our current fashion jewellery concept to meet challenges with COVID we are well on the markets with the same successful
Slide 5: Half Year Overview
HALF YEAR OVERVIEW1 • Strong sales performance for the period with positive • Global rollout strategy remains a key focus with 42 net global comparable store sales for the half-year of +21.5% new stores opened for the period and 126 more stores compared to 1H21 compared to December 2020 • Total sale
Slide 6: Financial Overview
FINANCIAL OVERVIEW1 • Improved financial performance as key markets traded well as HY22 HY22 HY21 Variance economic activity improved across most markets ($000) (Statutory) (pre AASB 16) (pre AASB 16) (pre AASB 16) • Disruptions impacted on Q1 in particular with a number of Revenue 217,822 217,822 1
Slide 7: Trading Performance - Sales
TRADING PERFORMANCE - SALES Sales recovery continues • Total Global Sales Revenue up 48.3% to $218m, returning to 240 previous sales growth trajectory 220 • Benefits of increasing store network offset by impacts from 200 COVID-19 lockdowns and disruptions across all markets, 180 with stores subject
Slide 8: Trading Performance - Sales
TRADING PERFORMANCE - SALES Strong Sales momentum • Australia/New Zealand region delivered growth despite Region ($AUD '000) HY22 HY21 Variance significant impacts from temporary store closures primarily in Q1, with strong comp sales for these markets after re-opening Australia / NZ 83,874 82,508 1.
Slide 9: Trading Performance - Gross Margin
TRADING PERFORMANCE - GROSS MARGIN Gross Margin at Constant Currency* HY22 HY22 HY21 Currency USD 0.74 0.70 0.70 Sales 217,822 217,822 146,871 Cost of Sales (47,165) (49,991) (33,457) Gross Profit 170,657 167,831 113,414 Gross Margin 78.3% 77.0% 77.2% *Constant currency impact on inventory purchases
Slide 10: Cost of Doing Business
COST OF DOING BUSINESS1 Cost pressures well managed • CODB well managed despite impacts of significant CODB % Sales1 temporary store closures in Q1 with minimal government wage subsidies or rent abatements globally • Elevated logistics costs continued during the period, remaining well above pre COVI
Slide 11: Cash Flow
CASH FLOW1 Continued investment in store rollout HY22 HY21 (A$000s) (pre AASB 16) (pre AASB 16) • Cash flow from operating activities $53.6m with operating cash conversion at 93% as a result of Cash from operating activities 53,629 52,028 investment in inventory to mitigate supply chain risks and Ne
Slide 12: Balance Sheet
BALANCE SHEET1 Continued Balance Sheet strength HY22 FY21 HY21 (A$000s) (Statutory) (Statutory) (Statutory) • Inventory holdings increased reflecting store network growth, new Net Cash 52,694 35,552 42,505 Poland DC, and increased stock on hand to mitigate supply chain risks Receivables 12,450 11,32
Slide 13: Store Growth
STORE GROWTH International Rollout continued with 42 net new stores opened Store number growth • Number of international stores continued to grow with offshore Country HY22 FY21 HY21 Var 6 mths Var YOY territories now 73% of the store network Australia 158 153 156 5 2 New Zealand 24 24 24 0 0 • 49 n
Slide 14: Digital Update
DIGITAL UPDATE • Focus on our digital capabilities accelerated over the last 2 years, with enhanced website performance and user experience • Improved customer service levels with investment in customer support • All company owned markets serviced via digital store fronts • Online sales grew by 36%
Slide 15: Trading Update and Outlook
TRADING UPDATE AND OUTLOOK • Trading for the first 8 weeks of the second half has seen a continuation of the strong performance of the first half, with comparable store sales for this period of +12.1% on FY21. Total sales for this period are 61.7% up on the same period in FY21 • Cost pressures in gl
Slide 16: Summary
SUMMARY • Sales recovery has been strong across most markets, however parts of Europe and Asia still impacted by ongoing COVID-19 disruption • Progress continues to be made in digital with increasing contribution from online sales and opportunity for further improvements to be made • EBIT of $49.1m
Slide 17: Appendices
APPENDICES 17
Slide 18: Appendix 1: Disclosing non-IFRS financial information
APPENDIX 1 ASIC Regulatory Guide 230 Disclosing non-IFRS financial information In December 2011 ASIC issued Regulatory Guide 230. To comply with this Guide, Lovisa Holdings Limited is required to make a clear statement about the non-IFRS information included in the Profit announcement and Half-Year
Slide 19: Appendix – Profit and Loss Statement
APPENDIX 2 – PROFIT AND LOSS STATEMENT1 Impact of HY22 HY22 HY21 Variance Variance ($’000) application of HY21 Statutory Statutory (pre AASB 16)* (pre AASB 16) (Statutory) (pre AASB 16*) AASB 16 Revenue 217,822 0 217,822 146,871 146,871 48.3% 48.3% Cost of sales (47,165) 0 (47,165) (33,457) (33,457)