Lovisa Holdings Ltd. · ASX:LOV
Lovisa — Macquarie Conference 2018
18 slides from Lovisa's conference presentation, May 3, 2018
Slide 1: Lovisa Holdings Limited Macquarie Conference
Lovisa Holdings Limited Macquarie Conference May 2018 SHANE FALLSCHEER STEVE DOYLE MANAGING DIRECTOROFFICER CHIEF EXECUTIVE CHRIS LAUDER CHIEF FINANCIAL OFFICER
Slide 2: Contents
Contents INTRODUCTION TO LOVISA STORE NETWORK SUPPLY AND DISTRIBUTION NETWORK HALF YEAR FINANCIALS STRATEGY RECAP QUESTIONS APPENDIX
Slide 3: Total store numbers at end of Q3 FY18
Total store numbers at end of Q3 FY18 Brand of choice for fast fashion jewellery 320 15 Highly scalable model Attractive returns Countries Gross margin Average store payback > 75% < 1 year 3
Slide 4: Introduction to Lovisa
Introduction to Lovisa • 320 stores in 15 countries • Business model underpins high gross • Proven fast fashion model that delivers margins and speed to market quality, affordable and on-trend products • Centrally controlled product from concept to shop floor in ~8-10 weeks development, distribution
Slide 5: Lovisa Store Disciplines
LOVISA STORE DISCIPLINES Lovisa Store Disciplines Average store size - 50 High pedestrian traffic sqm locations Stores are designed for Majority of stores in high intensity desirable malls and merchandising to locations maximise sales potential Standardised fit-outs Typical store is run by a maintai
Slide 6: Vertically Integrated Business Model
Vertically Integrated Business Model • Owned product and brand • In house, product-led business • Significant cost advantage via direct sourcing from factories, with product manufactured in VERTICALLY cost optimal locations (China, Thailand and INTEGRATED RETAIL MODEL India) • Strong focus on data a
Slide 7: History of rapid growth
History of rapid growth Revenue growth ($Am) – Strong growth over a number of years Number of stores – Proven ability to grow offshore 320 288 250 239 210 175 60 To end of Q3 FY18 we have 320 stores globally April June April 2011: December July July 2012: November 18 December July June 2017: Novembe
Slide 8: FY18 Store Growth
FY18 Store Growth International rollout continues with a net increase of 32 stores year to date Store number growth to end of Q3 FY18 • Number of international stores growing with offshore Est. Store territories now 53% of the network Country Q3FY18 FY17 Var Capacity • Net increase of 32 stores for
Slide 9: Supply and distribution network
Supply and distribution network ESTABLISHED LOGISTICS AND IT SYSTEMS • Vertically integrated model and speed to UK STORES market significantly reduces the risk of 25 LEGEND excess inventory and discounting FRANCE STORES LOVISA WAREHOUSE 1 • Suppliers currently located in mainland US STORES SPAIN STO
Slide 10: Financial Overview 1H FY18
Financial Overview 1H FY18 Continued earnings growth following increase in LFL sales and margin • Revenue up 18.9% with comparable store sales up 7.4% for the half year ($000) HY18 HY17 Variance • Gross profit of $95.4m up 23% reflecting improved margins Actual Actual Actual • CODB investment in glo
Slide 11: Strategy Recap
Strategy Recap • Lovisa is a vertically integrated fast fashion jewellery retailer with end to end product development capabilities supporting high gross margins • Global brand with reach across a number of countries • Scalable rollout model with centralised merchandising, marketing and back office
Slide 12: Questions
Questions Levisn.
Slide 13: Appendices
Appendices Lise
Slide 14: Board and Management
Board and Management Michael is a qualified lawyer and brings a wealth of commercial experience to Lovisa. Michael was CEO and Managing Director of listed salary packaging business MICHAEL KAY McMillan Shakespeare, a position he held for six years. Previously, Michael was CEO of national insurer AAM
Slide 15: Key Risks
Key Risks Foreign Currency • Majority of goods that are imported are priced in USD. Consequently Lovisa is exposed to movements in the USD exchange rate • As international growth continues Lovisa will be exposed to movements in the exchange rates of the countries it operates in Store Growth • Lovisa
Slide 16: 1H FY18 Balance Sheet
1H FY18 Balance Sheet Strong Balance Sheet with Significant Capacity Available To Fund Growth (A$000s) HY18 FY17 HY17 Net Cash 33,034 11,039 28,246 Receivables 3,781 3,615 3,130 Inventories 14,670 13,127 12,338 Total current assets 51,485 27,781 43,714 Property Plant & Equipment 19,685 15,658 13,081
Slide 17: 1H FY18 Cash Flow
1H FY18 Cash Flow Strong Cash Conversion and Inventory Management (A$000s) HY18 HY17 Cash from operating activities 44,929 34,942 Net interest paid (6) (275) Tax paid (7,689) (4,982) Net cash from operations 37,234 29,685 Property Plant & Equipment (7,430) (2,448) Net cash used in investing activiti
Slide 18: Forward-looking statements disclaimer
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