Premier Investments Limited · ASX:PMV
Premier Investments — FY2015 Earnings Presentation
38 slides from Premier Investments's earnings presentation, Sep 18, 2015
Slide 1: Premier Investments Ltd 2015 Full Year results overview
PREMIER INVESTMENTS LTD 2015 Full Year results overview 18 September 2015
Slide 2: Agenda
Agenda Premier Investments Limited 1 FY15 overview 8 Smiggle International Premier Investments FY15 2 consolidated financial results 9 Peter Alexander growth continues Supply chain 3 Premier Retail performance 10 transformation complete 4 Gross Margin 11 Summary 5 CODB remains a focus 12 Dividends P
Slide 3: FY15 Overview
PREMIER INVESTMENTS LTD FY15 OVERVIEW
Slide 4: Premier Investments FY15 overview
1 Premier Investments FY15 overview • Group profit – Underlying profit before tax $118.6 million, up 11.9% on pcp2 – Reported net profit after tax $88.1 million, up 20.7% on pcp – Earnings per share of 56.5c, up 20.2% on pcp – Increased final fully franked dividend of 21 cps (FY14: 20 cps) – Full ye
Slide 5: Premier Investments FY15 overview
1 Premier Investments FY15 overview • Premier Retail continuing to grow – Underlying net profit before tax up 16.0% to $100.9 million2 – Total sales increase of 6.4% pcp1 ; 2H15 total sales up 8.3% – LFL sales up 2.2%; 2H15 LFL sales up 3.4% – Online sales up 31%; 2H15 online sales up 38% – Peter Al
Slide 6: Premier Investments FY15 consolidated income statement
2 Premier Investments FY15 consolidated income statement 52 weeks to 52 weeks to $m 25 July 2015 26 July 2014 Premier revenues (ex Premier Retail) 23.5 23.9 Premier expenses (ex Premier Retail) (4.9) (4.4) Premier Retail EBIT – underlying 105.7 92.8 Finance costs (5.7) (6.3) Net profit before one of
Slide 7: Premier Investments summarised consolidated balance sheet
2 Premier Investments summarised consolidated balance sheet $m 25 Jul 2015 26 Jul 2014 Assets Cash and cash equivalents 281.6 313.3 Inventories 111.8 98.5 Property, plant and equipment 123.5 109.0 Other assets 57.0 32.1 Asset classified as held for sale 1.0 - Investment in associates 209.5 188.4 Int
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Slide 9: Premier Retail FY15 performance: highlights
3 Premier Retail FY15 performance: highlights • Underlying profit before tax up 16.0% to $100.9m1 • Underlying EBIT up 13.9% to $105.7m1 • Underlying EBIT margin up 74 bps to 11.2%1,2,3 • Total sales up 6.4%3; LFL sales up 2.2% – 2H15 total sales up 8.3%; LFL sales up 3.4% • All key growth initiativ
Slide 10: Premier Retail performance: underlying financial results
3 Premier Retail performance: underlying financial results 52 weeks 52 Weeks $000 to 25 Jul 2015 to 26 Jul 2014 Var LY Sales1 945,707 888,426 +6.4% LFL sales +2.2% +4.7% Gross Profit1 596,769 551,492 +8.2% Gross margin (%)1 63.1% 62.1% +103 bps Employee Expenses2 (239,831) (224,688) +6.7% % sales 25
Slide 11: Gross margin
4 Gross margin • Gross margin expanded by 103 bps despite Gross margin — 5 year history weaker AUD and highly competitive market • Strategies to offset the impact of the weaker AUD have been effectively implemented across all brands and markets • Direct sourcing initiatives continuing to deliver ben
Slide 12: CODB remains a focus
5 CODB remains a focus • Costs continue to be well controlled despite strategic investment in growth initiatives, including online, Peter Alexander and Smiggle UK • Labour productivity gains exceeded labour cost increases for established brands • Store rent for established brands declined 0.2% in FY
Slide 13: Premier Retail online strategy delivering
6 Premier Retail online strategy delivering • Online sales up 31% for the year and up 38% in 2H15 – well ahead of market Online sales growth growth of 8.6%1 for the 12 months ended July 2015 • Successfully launched new sites in New Zealand and the United Kingdom – Dotti.co.nz for New Zealand custome
Slide 14: Premier Retail investing in growth of all brands
7 Premier Retail investing in growth of all brands Premier Retail continuing to invest in new stores, upgrades and refurbishments to deliver sustainable sales growth; 220 capital investment initiatives across the network, including 50 new stores • 13 new stores opened across Australia and New Zealan
Slide 15: Premier Retail investing in growth
7 Premier Retail investing in growth • 16 new stores opened in the United Kingdom • 9 new stores opened across Australia and Singapore • 4 stores relocated • 13 Christmas kiosks opened in Australia • 24 stores received POS upgrades • 3 new stores opened in Australia • 2 stores relocated and upgraded
Slide 16: Smiggle International: United Kingdom
8 Smiggle International: United Kingdom Results to date • Positive profit contribution to the group in FY15 • Brand has been extremely well received in the market with results to date well ahead of expectations • 24 stores trading at end FY15 (16 opened FY15) • Zero compromise in centre and site loc
Slide 17: Smiggle International: United Kingdom
8 Smiggle International: United Kingdom 24 stores trading at the end of FY15 with a further 16 targeted to open prior to Christmas 2015 • 24 stores trading in the UK at the end of FY15 • A further 16 new stores targeted to open by the end of calendar 2015 • Negotiations for a further 20-25 stores ar
Slide 18: Smiggle International: Singapore
8 Smiggle International: Singapore Smiggle Singapore continues to be a significant profit driver for the brand • Another rewarding year for Singapore with a strong contribution to the brand’s global performance • 19 stores now trading in Singapore • New ION store opened in Feb 2015, a prime Orchard
Slide 19: Smiggle International: Asia Expansion 2016
8 Smiggle International: Asia Expansion 2016 • Two new markets to be opened in calendar year 2016 – Hong Kong – Malaysia • Comprehensive desktop and in market due diligence has been completed in both markets • Potential for 50 stores within 5 years across these two new countries • Smiggle Managing D
Slide 20: Why Hong Kong?
8 Smiggle International: Asia Expansion 2016 Why Hong Kong? • Large personal stationery market - US$840m (Singapore US$412m)* • Population of 7.2m with 61m tourists annually (47m from mainland China) • Consistent with Singapore, stationery is a highly desired category in the market for an extensive
Slide 21: Why Malaysia?
8 Smiggle International: Asia Expansion 2016 Why Malaysia? • Large personal stationery market - US$830m (Singapore US$412m)* • Population 30.7m • Large number of Malaysian tourists are already Smiggle fans, shopping in Singapore • Initial focus will be in the capital city of Kuala Lumpur • Malaysia
Slide 22: Smiggle International: Future Growth Strategy
8 Smiggle International: International – Future Growth Strategy Further Asia Expansion – Hong Kong & Malaysia • Having established a solid foundation in Singapore rollout will now commence into new markets in Asia, starting with Hong Kong and Malaysia in calendar year 2016 • An entry into these mark
Slide 23: Peter Alexander growth continues
9 Peter Alexander growth continues Three year strategic growth plan on track – sales are up 40% in 2 years • Total sales growth 14.9% on LY • 14 new stores opened in Aus/NZ in FY15, including new flagship Brisbane CBD store • Online sales growth of 21% • Continued focus on delivering unique customer
Slide 24: Supply Chain transformation complete
10 Supply Chain transformation complete New Australian national distribution centre operational • Transition of operations to new Australian National distribution centre completed • All brands and online now operating from the new National DC • DC operational capability well established with optimis
Slide 25: Summary
11 Summary Online growth continues to outperform the broader market • FY15 growth of 31% (2H15 growth 38%) - well ahead of the market • Continued investment in technology, people and marketing to maximise growth • Multi channel initiatives delivering incremental sales and EBIT • Online channel extre
Slide 26: Summary
11 Summary Smiggle International driving future growth • Smiggle performing well in all markets • UK results exceeding expectations, with 24 stores trading at end FY15 and 40 targeted to be trading by Christmas 2015 • UK market achieved profit in FY15 and has exceeded expectations • Solid pipeline o
Slide 27: Summary
11 Summary Core brands strategies on track • All brands delivered positive sales growth in FY15 • Jay Jays turnaround strategy on track with continued strong sales growth, margin expansion and pleasing response from customers to new store format • Portmans and Dotti achieved excellent 2H15 results •
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Slide 29: Dividends
12 Dividends • The Premier Board has declared an increased final fully franked dividend of 21 cps (FY14 Final: 20 cps) • The Board’s decision to pay ordinary dividends is always shaped by: – Assessment of the result – Outlook for the market – Confidence in the operational performance of Premier’s pe
Slide 30: Premier Retail Brand by Brand Performance
PREMIER RETAIL _ BRAND BY BRAND PERFORMANCE
Slide 31: Highlights
13 Highlights • Total sales growth 26% (1H15 +19%; 2H15 +36%) • Strong LFL growth in all markets • A buoyant 2H15 driven by excellent growth in core markets supported by continued success in rolling out the brand in the United Kingdom • 7 new stores opened in Australia*, 2 in Singapore and 16 in the
Slide 32: Highlights
13 Highlights • Total sales growth +14.9% on LY (total sales growth up 40% over 2 years) • 14 new stores opened – Australia 10 new stores – New Zealand 4 new stores • Online sales growth excellent, +21% • Database growth +53%, Facebook followers +19% • Trialled a number of new product initiatives- b
Slide 33: Highlights
13 Highlights • Strong LFL growth throughout FY15 • Gross margin expansion continues from – Assortment improvement – Sourcing initiatives – Mix of regular vs clearance sales • New store format well received in the 6 stores completed in 2H15 Fountain Gate, Vic Albany, NZ Cranbourne, Vic Loganholme, Q
Slide 34: Highlights
13 Highlights • Strong growth from core denim and bottom of body categories across mens, womens and junior • New branded denim ranges (eg Guess) delivering solid results • New store format developed for launch with the opening of a new Sydney CBD store in 1H16 • Ash Hart launched as the new brand am
Slide 35: Highlights
13 Highlights • Strong performance in 2H15 – sales up 6.1% • Online sales grew by 29% on last year – New Zealand dedicated web site launched and trading ahead of plan • New stores in premium locations performing ahead of plan – Brisbane CBD, Parramatta, Canberra • Reinvigorated core merchandise stra
Slide 36: Highlights
13 Highlights • 2H15 delivered strong sales & profit growth (2H15 sales up 8.4%) • Seasonal categories of Coats & Knitwear drove majority of this result • Strong recovery in all other apparel categories for 2H15 • Benefit of sourcing initiatives realised in quality elevation & margin growth, enablin
Slide 37: Highlights
13 Highlights • Strong performance in the newly launched pants perfected range offering a core range of everyday work pants • Continued growth in the dress category • Double digit growth in accessories • Strong performance from work wear jackets and a continuation to build a destination for work wea
Slide 38: Appendix: Overview of Premier's non-IFRS financial information
A Appendix Overview of Premier’s non–IFRS financial information • IFRS financial information is financial information that is presented in accordance with all relevant accounting standards. • Non-IFRS financial information is financial information that is presented other than in accordance with all