Lovisa Holdings Ltd. · ASX:LOV
Lovisa — FY2021 Earnings Presentation
24 slides from Lovisa's earnings presentation, Aug 25, 2021
Slide 1: Lovisa Holdings Limited 2021 Full Year
Lovisa Holdings Limited 2021 FULL 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. STRATEGY RECAP 2. FULL YEAR OVERVIEW 3. FINANCIAL OVERVIEW 4. IMPACT OF COVID 5. TRADING PERFORMANCE 6. COST OF DOING BUSINESS 7. CASHFLOW AND BALANCE SHEET 8. STORE GROWTH 9. DIGITAL UPDATE 10. BEELINE EUROPE ACQUISITION 11. TRADING UPDATE AND OUTLOOK 12. SUMMARY 13. APPENDICES 3
Slide 4: Strategy Recap
STRATEGY RECAP Our strategic plans remain in place OUR PAST OUR PRESENT OUR FUTURE 12 years ago we set out to develop a fast Although we have some short-term Continued expansion in our current fashion jewellery concept to meet challenges with COVID we are well on the markets with the same successful
Slide 5: Full Year Overview
FULL YEAR OVERVIEW1 • Improving sales performance for the period with positive • Global rollout strategy remains a key focus with 109 net global comparable store sales for the year of +8.1% new stores opened for the year including 87 acquired and compared to FY20 converted to Lovisa as part of the b
Slide 6: Financial Overview
FINANCIAL OVERVIEW1 FY21 FY21 FY20 Variance ($000) (Statutory) (pre AASB 16) (pre AASB 16) (pre AASB 16) • Improved financial performance as key markets traded well on Revenue 288,034 288,034 242,176 18.9% re-opening from economic lockdowns, however number of trading days lost to lockdowns higher th
Slide 7: 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 outbreaks • Performance was strongest in Australia and New Zealand as the markets that traded with the least restrictions in place throughout th
Slide 8: Trading Performance - Sales
TRADING PERFORMANCE - SALES Sales recovery continues to be on track subject to lockdowns 320 300 • Total Global Sales Revenue up 18.9% to $288.0m, returning 280 to previous sales growth trajectory 260 240 • Benefits of increasing store network offset by impacts from 220 COVID-19 lockdowns and disrup
Slide 9: Trading Performance - Sales by Region
TRADING PERFORMANCE - SALES Sales growth driven by Southern Hemisphere and USA • Australia/New Zealand region delivered strong growth with Region ($AUD '000) FY21 FY20 Variance positive comp sales for these markets • Europe sales reflect continued new store growth with an Australia / NZ 157,163 124,
Slide 10: Trading Performance - Gross Margin
TRADING PERFORMANCE - GROSS MARGIN Gross Margin at Constant Currency* 90% Historical Gross Margins FY21 FY21 FY20 80% Currency USD 0.71 0.71 0.71 70% Sales 288,034 288,034 242,176 60% Cost of Sales (67,070) (67,061) (54,907) 50% Gross Profit 220,963 220,973 187,269 40% 77% 79% 80% 80% 77% 77% 74% 30
Slide 11: Cost of Doing Business
COST OF DOING BUSINESS1 Strong cost control continued • Strong focus on store wage management during the period 70% delivered lower wage % vs prior year CODB % Sales1 60% • Tightening of support cost structures through COVID closures benefited into FY21, offsetting one-off costs of the beeline 50% d
Slide 12: Cash Flow
CASH FLOW1 Continued investment in store rollout FY21 FY20 • Cash flow from operating activities $66.4m with (A$000s) operating cash conversion at 110% as a result of tight (pre AASB 16) (pre AASB 16) working capital management Cash from operating activities 66,381 51,684 Net interest paid (586) (99
Slide 13: Balance Sheet
BALANCE SHEET1 Strong Balance Sheet Remains FY21 FY20 (A$000s) (Statutory) (Statutory) • Although inventory holdings increased from the artificially low level in Net Cash 35,552 20,434 the year prior due to cancellations from the outbreak of COVID, Receivables 11,325 7,876 management are comfortable
Slide 14: Store Growth
STORE GROWTH International Rollout continued with 109 net new stores opened Store number growth • Number of international stores continued to grow with offshore territories now Country FY21 FY20 Var 72% of the store network Australia 153 152 1 New Zealand 24 23 1 • Net 22 new stores plus 87 SIX and
Slide 15: Digital Update
DIGITAL UPDATE • Focus on our digital capabilities accelerated over the last 18 months, with enhanced website performance and user experience • Improved customer service levels with investment in customer support structures including global 24/7 live chat • All company owned markets serviced via dig
Slide 16: Beeline Europe Acquisition
BEELINE EUROPE ACQUISITION • Acquisition of beeline retail business in Europe completed from March through to May 2021 • Allowed Lovisa to enter 6 new markets in Europe (Germany, Switzerland, Netherlands, Belgium, Austria, Luxembourg) as well as Netherlands (6) Germany (38) accelerated our French st
Slide 17: Beeline Europe Acquisition
BEELINE EUROPE ACQUISITION • Local E-commerce sites operational to support our physical stores Country # of Stores to provide complete customer experience Germany 38 • New 3PL warehouse in place in Poland to support the significantly larger European business allowing faster replenishment times into
Slide 18: Trading Update and Outlook
TRADING UPDATE AND OUTLOOK • Trading for the first 8 weeks of FY22 has seen continued strong performance of markets where COVID related restrictions are low and stores are able to trade, with comparable store sales for this period of +37.8% on FY21. Total sales for this period are 56% up on the same
Slide 19: Summary
SUMMARY • Sales recovery has been solid, with ongoing COVID-19 disruption still slowing progress • Good progress being made in digital with increasing contribution from online sales and opportunity for further improvements to be made • EBIT of $42.7m up 39.4% on FY20 • Comparable store sales up 8.1%
Slide 20: Appendices
APPENDICES 20
Slide 21: Appendix 1 - Disclosing non-IFRS financial information
APPENDIX 1 ASIC Regulatory Guide 230 Disclosing non-IFRS financial information In December 2011 ASIC issued Regulatory Guide 230. To comply with this Guide, Lovisa Holdings Limited is required to make a clear statement about the non-IFRS information included in the Profit announcement and Full Year
Slide 22: Appendix 2 - Profit and Loss Statement
APPENDIX 2 – PROFIT AND LOSS STATEMENT1 Impact of FY21 (pre AASB FY20 (pre AASB Variance Variance (pre ($’000) FY21 Statutory application of FY20 Statutory 16)* 16) (Statutory) AASB 16*) AASB 16 Revenue 288,034 0 288,034 242,176 242,176 18.9% 18.9% Cost of sales (67,070) 0 (67,070) (54,907) (54,907)
Slide 23: Appendix 2 - Balance Sheet
APPENDIX 2 – BALANCE SHEET Impact of FY21 (pre AASB (A$000s) FY21 (Statutory) application of AASB FY20 (Statutory) 16)* 16 Net Cash 35,552 0 35,552 20,434 Receivables 11,325 0 11,325 7,876 Inventories 34,211 0 34,211 21,714 Derivatives 0 0 0 207 Total current assets 81,088 0 81,088 50,231 Property P
Slide 24: Appendix 2 - Cash Flow
APPENDIX 2 – CASH FLOW Impact of FY21 FY21 FY20 FY20 (A$000s) application of (Statutory) (pre AASB 16) (Statutory) (pre AASB 16) AASB 16 Cash from operating activities 101,850 35,469 66,381 83,570 51,684 Net interest paid (586) 0 (586) (99) (99) Tax paid (15,968) 0 (15,968) (3,471) (3,471) Net cash