Kmd Brands Limited · NZX:KMD
Kmd Brands — FY2024 Earnings Presentation
36 slides from Kmd Brands's earnings presentation, Sep 24, 2024
Slide 1: FY24 Results Presentation
FY24 RESULTS PRESENTATION 25 SEPTEMBER 2024 Michael Daly Ben Washington Group CEO & Interim Group CFO Managing Director
Slide 2: Outline
OUTLINE 1. FY24 SUMMARY 3 2. GROUP FINANCIALS 9 3. BRAND FINANCIALS 16 4. KATHMANDU UPDATE 20 5. FY25 FOCUS AND OUTLOOK 25 6. APPENDICES 29 2 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 3: FY24 Summary
SECTION 1 FY24 SUMMARY 3 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 4: Financial Summary
-11.2% YOY Sales $979.4m FY23 $1,103.0m Gross -0.2% of sales margin 58.9% FY23 59.1% Operating -3.6% YOY $526.5m FY23 $546.1m expenses 1 FINANCIAL Underlying -52.8% YOY SUMMARY $50.0m FY23 $105.9m EBITDA 1 Underlying Statutory NPAT -$1.1m -$48.3m NPAT 1 Net working -9.7% YOY $198.3m Jul 23 $219.7m c
Slide 5: Operational Highlights
Operational • Gross margin resilient in a competitive consumer environment. excellence • Underlying operating expenses1 reduced by $19.6m year-on-year (“YOY”) despite global inflation. • Inventory and net working capital reduced. • Capital expenditure moderated in response to market conditions. Cust
Slide 6: Brand Strengths
BRAND STRENGTHS • Iconic, inspirational, and authentic brand. • Leading outdoor brand in Australasia. • Established and distinctive American Montana- • Founded in Bells Beach, Australia, in based hiking footwear brand, founded in 2007. • Founded in New Zealand in 1987, with deep 1969. New Zealand he
Slide 7: Brands with Global Reach
BRANDS WITH GLOBAL REACH We operate over 300 stores globally, and our brands are sold in over 8,000 locations EUROPE NORTH AMERICA ~$100m Sales 27 Owned Stores 10 Licensed Stores +2,000 Wholesale Doors ~$205m Sales 30 Owned Stores 24 Licensed Stores ASIA +3,800 Wholesale Doors ~$40m Sales 83 License
Slide 8: Strategic Pillars
STRATEGIC PILLARS BUILDING ELEVATING OPERATIONAL BEST FOR GLOBAL DIGITAL EXCELLENCE PEOPLE AND BRANDS PLANET Strengthen and expand Enhance our digital Optimise efficiency and Embrace responsible and our global brand capabilities to improve effectiveness in sustainable business presence. customer exp
Slide 9: Group Financial Performance
SECTION 2 GROUP FINANCIAL PERFORMANCE 9 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 10: Profit & Loss
PROFIT & LOSS KMD BRANDS Statutory Underlying*1 IMPROVING QUARTERLY SALES TREND NZ $m*2 FY24 FY23 FY24 FY23 Var % • Continued improvement on first half sales trends during both Q3 and Q4 (further detail on slide 12). SALES 979.4 1,103.0 979.4 1,103.0 (11.2%) • Kathmandu’s Australia sales trends have
Slide 11: Diversified Sales
DIVERSIFIED SALES SALES BY REGION (NZ $m) 1,103.0 922.8 979.8 979.4 801.5 FY20 FY21 FY22 FY23 FY24 incl. 9 months of Rip Curl Australia New Zealand North America Europe Rest of World SALES CHANGE FY24 VS FY23 -20.0% -18.0% -3.1% Oboz Licensing / Royalties -3.9% Rest of World -15.7% Europe Wholesale
Slide 12: Improving Quarterly Sales Trend
IMPROVING QUARTERLY SALES TREND 10.0% 10.0% 10.0% 5.0% FY24 YOY Sales Variance % by quarter 5.0% FY24 YOY Sales Variance % by quarter 5.0% FY24 YOY Sales Variance % by quarter1 0.0% 0.0% 0.0% -5.0% -2.4% -5.0% -5.0% -10.0% -4.6% -10.0% -7.6% -6.9% -10.0% -7.9% -15.0% -15.0% -11.1% -15.0% -13.2% -13.
Slide 13: Omni-Channel Performance
OMNI-CHANNEL PERFORMANCE DIRECT TO CONSUMER SALES (NZ $m) Retail Stores Online DTC Online % of DTC sales 900.0 35.0% 800.0 752.4 30.0% 700.0 667.5 663.9 684.2 629.6 25.0% 600.0 500.0 20.0% 15.7% 16.3% 400.0 14.5% 13.2% 13.6% 15.0% 300.0 10.0% 200.0 5.0% 100.0 0.0 0.0% FY20 FY21 FY22 FY23 FY24 • Kath
Slide 14: Strong Balance Sheet
STRONG BALANCE SHEET Key Balance Sheet items and ratios*1 DEBT NZ $m Jul 24 Jan 24 Jul 23 • Significant funding headroom c. $230m. • Amended FCCR covenants in place for Jan 25 (1.20x) and Jul 25 (1.30x). Net working capital 198.3 226.2 219.7 Inventories 266.9 313.6 290.4 INVENTORY REDUCING Current t
Slide 15: Cash Flow
CASH FLOW Cash Flow (NZ $m) FY24 FY23 Dividends declared (NZ $m) NPAT (48.3) 36.6 Interim Final Change in working capital 28.7 (27.7) 42.5 42.7 Non-cash items 164.2 138.7 35.5 21.3 21.4 Operating cash flow 144.7 147.6 21.3 Adjusted operating cash flow *1 53.4 60.7 21.3 21.3 - 14.2 - 0.0 - 0.0 Key Li
Slide 16: Brand Financial Performance
SECTION 3 BRAND FINANCIAL PERFORMANCE 16 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 17: Rip Curl Profit & Loss
RIP CURL PROFIT & LOSS NZ $m FY24 FY23 Var % SALES IMPACTED BY WHOLESALE CUSTOMER CAUTION SALES 538.9 581.5 (7.3%) • Total sales -7.3% YOY, cycling record sales last year (FY23 sales growth +8.3% YOY). *1 EBITDA (underlying ) 42.0 55.6 (24.5%) EBITDA margin % 9.6% • Direct-to-consumer sales (incl. o
Slide 18: Kathmandu Profit & Loss
KATHMANDU PROFIT & LOSS NZ $m FY24 FY23 Var % SALES TRENDS IMPROVING IN AUSTRALIA SALES 361.1 422.2 (14.5%) • Total sales -14.5% YOY, cycling strong sales growth last year (FY23 sales growth +10.6% YOY). *1 16.0 52.5 (69.6%) EBITDA (underlying ) EBITDA margin % 4.4% 12.4% • Australia sales*2 -13.9%
Slide 19: Oboz Profit & Loss
OBOZ PROFIT & LOSS NZ $m FY24 FY23 Var % SALES IMPACTED BY WHOLESALE CUSTOMER CAUTION SALES 79.4 99.3 (20.0%) • Total sales -20.0% YOY, cycling record sales last year (FY23 sales growth +61.8% YOY). *1 EBITDA (underlying ) (0.2) 7.9 - EBITDA margin % -0.3% 8.0% • Strong online sales growth +31.7%, w
Slide 20: Kathmandu Update
SECTION 4 KATHMANDU UPDATE 20 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 21: Kathmandu Focus
KATHMANDU FOCUS REDUCE RELIANCE ON OUTERWEAR • Innovation and investment in broader categories to address year-round needs. PRODUCT • Faster and more regular product drops. • Expand third party brand strategy.. CUSTOMER Exceed the expectations of Outdoor Enthusiasts REFINE BRAND EXECUTION • Brand ma
Slide 22: Product Progress
PRODUCT PROGRESS REDUCE RELIANCE ON OUTERWEAR • Successful 2024 launch of new products including Trailhead stretch and insulated rainwear, and Seeker active range. • Second iteration of quick-to-market heritage fleece and t-shirts, with the initial launches driving strong sales. • Increased range of
Slide 23: Brand Progress
BRAND PROGRESS REFINE BRAND EXECUTION • New creative agency engaged. First campaign launched in September 2024. The campaign marks an authentic shift toward showcasing the ruggedness and realness of New Zealand’s outdoor landscape, while communicating the happiness humans experience inside when they
Slide 24: Customer Experience
CUSTOMER EXPERIENCE EXCEED THE EXPECTATIONS OF OUTDOOR ENTHUSIASTS • Removed fixtures and fittings to elevate the brand and product experience in-store, enabling a more streamlined consumer journey. • Commencement of bringing to life the new range segmentation for our customers. Activity Pillars: Hi
Slide 25: FY25 Focus and Outlook
SECTION 5 FY25 FOCUS AND OUTLOOK 25 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 26: Continued Brand Innovation
CONTINUED BRAND INNOVATION RIP CURL: EDDIE AIKAU BIG WAVE KATHMANDU: FEATHER FLIGHT OBOZ KATABATIC LT INVITATIONAL • Carry-on luggage with a patent-pending hard • Our lightest and most breathable • Rip Curl’s latest partnership in a 55-year shell. Designed for lightness, stability, and collection to
Slide 27: FY25 Focus and Outlook
FY25 FOCUS AND OUTLOOK TRADING UPDATE FY25 FOCUS • DTC sales for the first 8 full weeks to 22 September: • Kathmandu Australia +2.1% YOY, a further improvement on the Q4 FY24 sales trend. Kathmandu New Zealand -23.2% YOY, cycling strong end of line clearance sales in August last year. Stabilise sale
Slide 28: Questions
QUESTIONS 28 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 29: Appendices
SECTION 6 APPENDICES 29 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 30: Our Purpose
OUR PURPOSE OWNER OF Inspiring people to explore LEADING GLOBAL and love the outdoors OUTDOOR BRANDS OUR VISION To be the leading family of global outdoor brands - designed for purpose, driven by innovation, best for people and planet 30 F Y 2 4 R E S U LT S P R E S E N TAT I O N
Slide 31: KPI Progress Update
KPI PROGRESS UPDATE SHORT-TERM MEDIUM-TERM FY24 performance impacted progress toward the Group’s KPI targets. EBITDA MARGIN*1 KATHMANDU RETAIL STORE COUNT % of sales Strategic plans remain unchanged, with ~200 15.0% confidence in the Group’s ability to drive towards these targets as consumer sentime
Slide 32: Owned Stores by Brand
OWNED STORES BY BRAND RIP CURL OWNED STORE COUNT KATHMANDU OWNED STORE COUNT 165 162 160 158 158 160 162 170 169 169 172 155 155 160 162 160 162 161 Jul 20 Jan 21 Jul 21 Jan 22 Jul 22 Jan 23 Jul 23 Jan 24 Jul 24 Jul 20 Jan 21 Jul 21 Jan 22 Jul 22 Jan 23 Jul 23 Jan 24 Jul 24 32 F Y 2 4 R E S U LT S P
Slide 33: Appendix 1: Statutory to Underlying Profit & Loss
APPENDIX 1: STATUTORY TO UNDERLYING PROFIT & LOSS GROUP FY24 FY23 Amortisation of Amortisation of IFRS 16 Customer Oboz IFRS 16 Customer NZ $m Statutory Underlying Statutory Underlying Leases *1 Restructuring *2 Relationships *3 impairment*4 Leases *1 Restructuring*2 Relationships *3 SALES 979.4 - -
Slide 34: Appendix 2: Segment Note
APPENDIX 2: SEGMENT NOTE FY24 FY23 SALES (NZ $'000) Rip Curl Kathmandu Oboz Corporate Total Rip Curl Kathmandu Oboz Corporate Total SALES per segment note 538,910 361,081 79,424 - 979,415 581,504 422,233 99,257 - 1,102,994 SALES (Underlying) 538,910 361,081 79,424 - 979,415 581,504 422,233 99,257 -
Slide 35: Appendix 3: Balance Sheet
APPENDIX 3: BALANCE SHEET Balance Sheet (NZ $m) Jul 24 Jan 24 Jul 23 Inventories 266.9 313.6 290.4 Property, plant and equipment 86.5 84.7 82.9 Right of Use Asset (IFRS 16) 262.6 257.5 270.3 Intangible assets 666.9 696.2 704.4 Other assets 120.8 119.4 136.0 Total assets (excl. cash) 1,403.7 1,471.4
Slide 36: Important Notice and Disclosure
IMPORTANT NOTICE AND DISCLOSURE This presentation prepared by KMD Brands Limited (the “Company” or the “Group”) (NZX/ASX:KMD) provides additional comment on the financial statements of the Company, and accompanying information released to the market. As such, it should be read in conjunction with th