Burberry Group Plc · LSE:BRBY
Burberry — H1 2020 Earnings Presentation
40 slides from Burberry's earnings presentation, 2019
Slide 1: Interim Results 2019
INTERIM RESULTS 2019 MARCO GOBBETTI CHIEF EXECUTIVE OFFICER 1
Slide 2: Two years ago we set out our vision to reposition the brand to luxury fashion
AGENDA TWO YEARS AGO WE SET OUT OUR VISION TO REPOSITION THE BRAND TO LUXURY FASHION … 2
Slide 3: ... and we are starting to see the first results
… AND WE ARE STARTING TO SEE THE FIRST RESULTS 3
Slide 4: Collection performance
COLLECTION PERFORMANCE NEW PRODUCT PERFORMANCE TRANSLATING TO COMP GROWTH 4
Slide 5: Growth reflected across all regions
GROWTH REFLECTED ACROSS ALL REGIONS JULIE BROWN CHIEF OPERATING & FINANCIAL OFFICER 5
Slide 6: H1 2020 Summary Financials
H1 2020 SUMMARY FINANCIALS ~ H1 2020 pro forma results - -- Reported under IFRS 16 -- +4% -2% £1,220m Comparable store sales +4% Revenue Retail Wholesale H12019 ; £1,255m +4% 43% Licensing Revenue H1 2020 at CER > | Revenue 1,281 1,220 5% 3% 1,281 5% Hi a 2. | Adjusted operating profit 187 178 5% (4
Slide 7: Abbreviation definitions
HT- high teens; MT- mid teens; LT- low teens; LDD- low double digit, HSD- high single digit; MSD- mid single digit; LSD- low single digit; HDD- high double digit 7
Slide 8: Income Statement
INCOME STATEMENT -- H1 2020 pro forma results - Reported under IFRS 16 - “Effective tax rate on adjusted profit before tax improved 200bps to 22.0%. Note the table above shows the reported tax Revenue 1,281 1,220 5% 3% 1,281 5% z Gross profit 865 67.8% | 825 | 67.6% | 5% 865 5% 3 Operating expenses
Slide 9: Free Cash Flow
FREE CASH FLOW H1 2020 INCLUDES THE ADOPTION OF IFRS 16 Adjusted operating profit 203 178 Depreciation and amortisation 52 56 Depreciation on right of use asset 108 - Working capital* (10) (92) Restructuring costs (20) (16) Other 19 8 Cash inflow from operations 251 134 Payment of lease liabilities
Slide 10: Outlook
• • • • * Excludes the impact of IFRS 16, which is expected to benefit FY 2020 operating profit by c£30m-£35m and PBT by £5m-£10m • • • 10
Slide 11: Marco Gobbetti, Chief Executive Officer
MARCO GOBBETTI CHIEF EXECUTIVE OFFICER 11
Slide 12: Communications
COMMUNICATIONS 12
Slide 13: Native Content
NATIVE CONTENT NOWNESS DAZED Mille UK/US/ China Korea UAE 13
Slide 14: Burberry campaign imagery
}\URBERRY _ LONDON ENGLAND . 2019 CYKK #2, Rik T AH 14
Slide 15: Influencer and User Generated Content, Social Media
INFLUENCER AND USER GENERATED CONTENT SOCIAL MEDIA 15
Slide 16: Instagram and WeChat
burberry & INSTAGRAM REACH ENGAGEMENT RATE # % H12019 H12020 H12019 H1 2020 < Burberry & WECHAT REACH ENGAGEMENT RATE # % R#SSH, 9 A BSeries EXAFS Lola REBARS A, PRA 24 aie H12020 H12019 H12020 2020 ENB A KAB a HT 2019 Nee) Esmee) BRAT aa 16
Slide 17: Product: Riccardo's Product
PRODUCT RICCARDO’S PRODUCT Note: mainline and digital only 17
Slide 18: SS20 Press Coverage and Reach
SS20 PRESS COVERAGE AND REACH 18
Slide 19: Earned Media Value, Leather Goods
EARNED MEDIA VALUE AW19 SHOW SS20 SHOW LEATHER GOODS 19
Slide 20: Distribution
LEATHER GOODS DISTRIBUTION 20
Slide 21: Photo to be replaced - outside
PHOTO TO BE REPLACED - OUTSIDE 21
Slide 22: 22
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Slide 23: Digital
DIGITAL 23
Slide 24: Tmall Monogram Activation
TMALL MONOGRAM ACTIVATION 48 24
Slide 25: Driving forward our commitment to sustainability
DRIVING FORWARD OUR COMMITMENT TO SUSTAINABILITY 25
Slide 26: Looking Ahead
LOOKING AHEAD LOOKING AHEAD, WE HAVE AN OPPORTUNITY TO ACCELERATE 26
Slide 27: Product: Importance of Inspiration
PRODUCT IMPORTANCE OF INSPIRATION 27
Slide 28: China remains greatest contributor to luxury growth
CHINA REMAINS GREATEST CONTRIBUTOR TO LUXURY GROWTH 28
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Slide 30: 30
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Slide 31: Digital
DIGITAL tT] ©) z > fe) m m 31
Slide 32: a is ae
a is ae 32
Slide 33: Burberry x Tencent
TENCENT BURBERRY x TENCENT 33
Slide 34: Conclusion
CONCLUSION BUILDING MOMENTUM DELIVERING RESULTS PREPARING FOR NEXT PHASE APPENDIX 34
Slide 35: Disclaimer
DISCLAIMER The financial information contained in this presentation is unaudited. Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to d
Slide 36: IFRS 16 adopted in FY 2020
IFRS 16 ADOPTED IN FY 2020 Modified retrospective adoption approach Balance Sheet Recognition of right of use asset (“ROU”) Recognition of lease liabilities Income statement Replacement of minimum lease payments with lease interest expense and depreciation of right of use asset Cash flow Payment of
Slide 37: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES Description and purpose GAAP measure reconciled to Pro formaresults This measure is an estimation of the results for the period when applying the previous accounting standard for leases, IAS 17 Leases. It has been included as IFRS 16 was, adopted without restatement
Slide 38: Retail & Wholesale Revenue by Region
RETAIL & WHOLESALE REVENUE BY REGION H1 2020 H1 2019 YOY Growth YoY CER Reported Growth 5% 3% £1,257m £1,198m ASIA PACIFIC 6% 4% £500m £472m EMEIA 6% 5% AMERICAS 2% (3%) FOREIGN EXCHANGE RATES Euro 114 112 112 1.13 113 US Dollar 1.28 1.27 1.26 1.33 131 Chinese Renminbi 8.92 8.73 8.71 8.78 8.82 Hong
Slide 39: Adjusting Items and Store Portfolio
Restructuring costs Disposal of Beauty operations Revaluation of deferred consideration liability Adjusting operating items Adjusting financing items ADJUSTING ITEMS (1) (1) (10) (5) (1) STORE PORTFOLIO Stores Concessions Outlets Total At 30 March 2019 233 146 52 431 44 Additions 7 8 3 18 - Closures
Slide 40: IR Contacts
‘preliminary date IR CONTACTS Annabel Gleeson VP, Investor Relations annabel.gleeson@burberry.com Stephanie Crinnegan Senior Investor Relations Manager stephanie.crinnegan@burberry.com Sophie Parker Investor Relations Coordinator sophie.parker@burberry.com 40