Lovisa Holdings Ltd. · ASX:LOV
Lovisa — H1 2021 Earnings Presentation
23 slides from Lovisa's earnings presentation, Feb 19, 2021
Slide 1: Lovisa Holdings Limited 2021 Half Year
Lovisa Holdings Limited 2021 HALF YEAR SHANE FALLSCHEER MANAGING DIRECTOR 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. HALF YEAR OVERVIEW 2. FINANCIAL OVERVIEW 3. IMPACT OF COVID 4. TRADING PERFORMANCE 5. CASHFLOW AND BALANCE SHEET 6. STORE GROWTH 7. DIGITAL UPDATE 8. BEELINE EUROPE ACQUISITION 9. TRADING UPDATE AND OUTLOOK 10. SUMMARY 11. APPENDICES 3
Slide 4: Half Year Overview
HALF YEAR OVERVIEW1 • Improving sales performance for the period with positive • Global rollout strategy remains a key focus and continued global comparable store sales for Q2 at a slower pace with 25 net new stores opened for the half year • Comparable store sales down 4.5% for the period and total
Slide 5: Financial Overview
FINANCIAL OVERVIEW1 ($000) HY21 HY21 (pre HY20 (pre Variance • Financial result continued to be impacted by COVID-19 Statutory AASB 16) AASB 16) (pre AASB 16) economic lock-downs Revenue 146,871 146,871 162,761 -9.8% • Revenue down 9.8% with comparable store sales down 4.5% for Gross profit 113,414
Slide 6: Impact of COVID on Store Network
IMPACT OF COVID ON STORE NETWORK • Store network continued to be impacted by temporary closures across multiple markets due to government response to COVID FY20 FY21 outbreaks • Performance has been strongest in Australia and New Zealand as the markets that have been trading longest post re-opening
Slide 7: Trading Performance - Sales
TRADING PERFORMANCE - SALES Sales recovery on track 180 • Total Global Sales Revenue down 9.8% to $146.9m 160 • Benefits of increasing store network offset by impacts from COVID-19 on Northern Hemisphere markets 140 • Comp sales down 4.5%, however stronger particularly 120 through the Christmas peri
Slide 8: Trading Performance - Sales
TRADING PERFORMANCE - SALES Sales growth driven by Southern Hemisphere Region ($AUD '000) HY21 HY20 Variance • Australia/New Zealand region delivered strong growth with positive comp sales for these markets Australia / NZ 82,508 82,798 -0.4% • Europe and USA sales reflect continued new store growth
Slide 9: Trading Performance - Gross Margin
TRADING PERFORMANCE - GROSS MARGIN Historical Gross Margins 90.0% Gross Margin at Constant Currency* 80.0% 70.0% HY21 HY21 HY20 60.0% Currency USD 0.70 0.71 0.71 50.0% Sales 146,871 146,871 162,761 40.0% 78.3% 77.8% 80.4% 81.0% 78.9% 77.2% 75.0% 30.0% Cost of Sales (33,457) (32,614) (34,308) 20.0% G
Slide 10: Cost of Doing Business
COST OF DOING BUSINESS1 Strong cost control continued 60% CODB % Sales1 50% • Strong focus on store wage management during the period delivered lower wage % vs prior year 40% • Tightening of support cost structures through COVID closures benefited into FY21, offsetting one-off costs of the beeline d
Slide 11: Cash Flow
CASH FLOW1 Continued investment in store rollout (A$000s) HY21 HY20 • Cash flow from operating activities was $52m with (pre AASB 16) (pre AASB 16) operating cash conversion at 131% as a result of tight working capital management during COVID impact Cash from operating activities 52,028 45,969 and r
Slide 12: Balance Sheet
BALANCE SHEET1 Strong Balance Sheet Remains HY21 FY20 HY20 (A$000s) (Statutory) (Statutory) (Statutory) • Significant actions taken to conserve cash during COVID closure Net Cash 42,505 20,434 12,572 period Receivables 6,993 7,876 7,121 Inventories 25,533 21,714 28,372 • Focus on disciplined invento
Slide 13: Store Growth
STORE GROWTH International Rollout continues with 25 net new stores opened • Number of international stores continued to grow with Store number growth offshore territories now 66% of the store network Country Dec 2020 June 2020 Dec 2019 Var 6 mths Var YOY • 29 new stores opened with 4 store closures
Slide 14: Digital Update
DIGITAL UPDATE • Focus on our digital capabilities accelerated through COVID lockdown • We now service all 8 major markets via digital store fronts across the globe • Total Online sales grew by 335% for 1H21, compared to +311% during FY20 • We continue to invest in support team and infrastructure to
Slide 15: Beeline Europe Acquisition
BEELINE EUROPE ACQUISITION • Acquisition of beeline retail business in Europe agreed in November 2020 • Lovisa will enter 6 new markets in Europe (Germany, Switzerland, Netherlands, Belgium, Austria, Luxembourg) as well as accelerate Netherlands (6) Germany (38) our French store rollout UK (42) • Pu
Slide 16: Beeline Europe Acquisition
BEELINE EUROPE ACQUISITION • Local E-commerce sites to be operational in Q4 to support Country # of Stores physical stores to provide complete customer experience Germany 38 • Acquisition cash flow positive immediately, with acquired cash of €11.8m offsetting implementation costs and aggregate capex
Slide 17: Trading Update and Outlook
TRADING UPDATE AND OUTLOOK • Trading for the first 7 weeks of the second half has seen continued strong performance from the Southern Hemisphere markets with challenging trading conditions in the Northern Hemisphere, delivering comparable same store sales for this period of +12% overall • The acquis
Slide 18: Summary
SUMMARY • Sales recovery on track through 1H21, with markets still heavily impacted by COVID-19 slowing progress • Progress in digital continuing with increasing contribution from online sales • EBIT of $30.9m • Comparable store sales down 4.5% for the half year however accelerated since Q1 with pos
Slide 19: Appendices
Loisr APPENDICES
Slide 20: Appendix 1 - Disclosing non-IFRS financial information
APPENDIX 1 ASIC Regulatory Guide 230 Disclosing non-IFRS financial information In December 2011 ASIC issued Regulatory Guide 230. To comply with this Guide, Lovisa Holdings Limited is required to make a clear statement about the non-IFRS information included in the Profit announcement and Half Year
Slide 21: Appendix - Profit and Loss Statement
APPENDIX 2 – PROFIT AND LOSS STATEMENT1 Impact of HY21 HY21 HY20 Variance Variance ($’000) application of 1 (Statutory) (pre AASB 16) (pre AASB 16) (Statutory) (pre AASB 161) 1 AASB 16 Revenue 146,871 0 146,871 162,761 (9.8%) (9.8%) Cost of sales (33,457) 0 (33,457) (34,308) (2.5%) (2.5%) Gross prof
Slide 22: Appendix - Balance Sheet
APPENDIX 2 – BALANCE SHEET Impact of application HY21 FY20 HY20 (A$000s) HY21 (Statutory) of AASB 16 (pre AASB 16)1 (Statutory) (Statutory) Net Cash 42,505 0 42,505 20,434 12,572 Receivables 6,993 0 6,993 7,876 7,121 Inventories 25,533 0 25,533 21,714 28,372 Derivatives 0 0 0 207 0 Total current ass
Slide 23: Appendix - Cash Flow
APPENDIX 2 – CASH FLOW Impact of HY21 HY21 HY20 (A$000s) application of (Statutory) (pre AASB 16)1 (pre AASB 16)1 AASB 16 Cash from operating activities 62,912 10,884 52,028 45,969 Net interest paid (292) 0 (292) (8) Tax paid (6,022) 0 (6,022) (9,517) Net cash from operations 56,598 10,884 45,714 36