Burberry Group Plc · LSE:BRBY
Burberry — H1 FY23 Earnings Presentation
40 slides from Burberry's earnings presentation, Nov 17, 2022
Slide 1: Burberry Interim Results
BURBERRY LONDON ENGLAND INTERIMS NOVEMBER 17,2022 INTERIM RESULTS JULIE BROWN
Slide 2: H1 FY23 Summary and Income Statement
H1 FY23 | SUMMARY Q2 comparable retail sales growth of +11%, bringing H1 to +5% Strong performance in the majority of regions in Q2 anda good recovery in Mainland China Double digit growth in Leather goods and Outerwear in Q2 Adjusted operating profit up 6% (CER) Adjusted EPS growth of +15% (CER) an
Slide 3: Regional Retail Comparable Sales Growth
H1 FY23 | REGIONAL RETAIL COMPARABLE SALES GROWTH GROUP ase H1 +5% % Ql 1% 4 Q2 +1% AMERICAS APAC HI -3% d H1 4% Qi 4% | ° E a 16% Q2 “3% | 4 Q2 +11% x MAINLAND FY22 Total Retail Sales { CHINA ] Ht 19% arerices . a -35% { Q2 “1% Asia g = Pacific by 52% EMEIA 23% Note: Comp - Comparable store sales a
Slide 4: Adjusted Operating Profit Margin and Free Cash Flow
H1 FY23 | ADJUSTED OPERATING PROFIT MARGIN £0m £39m Gra (£28m) £31m Gam Adjusted operating profit H1FY22 Underlying trading Gross margin rate improvement Note: Adjusting items are a credit of £25m (FY22 £11m) Opex Adjusted FX operating profit H1FY23 CER Adjusted operating profit H1FY23 Reported H1 F
Slide 5: = O a) Oo a ou
= O 2 a) Oo a ou
Slide 6: Customer Experience
CUSTOMEREXPERIENCE 12
Slide 7: Current Year Outlook
CURRENT YEAR OUTLOOK Confirm existing FY24 guidance of HSD revenue CAGR at CER and meaningful margin accretion No change anticipated to overall retail space FY23 wholesale expected to be broadly stable Tax rate expected to be around 22% Capex expected to be c.£170m Currency tailwind — c.£170m revenu
Slide 8: Strategy Update
STRATEGY UPDATE JONATHAN AKEROYD BURBERRY HAS AN EXTRAORDINARY LEGACY... The birth of Burberry Made for the outdoors The evolution of the Global icon of British Brand elevation and the invention of trench fashion gabardine 16
Slide 9: A Very Strong Platform for Growth
»»AND A VERY STRONG PLATFORM FOR GROWTH Globally loved Established Global network of Strong e- Unique supply Pioneers in ESG, luxury brand business across 415 luxury stores, commerce legacy, chain network, with industry- multiple categories, able to support in luxury’s fastest rooted in British lead
Slide 10: Burberry Revenue Ambition
BURBERRY REVENUE AMBITION’, £BN THE NEXT PHASE | GROWTH & ACCELERATION 1 FY22 at reported rates, all other figures at CER S+ 2.8 FY22 Medium Term ADJUSTED OPERATING 18.5% 20%+ MARGIN, % Long Term 20%++ 19 OUR PLAN | OPPORTUNITIES TO UNLOCK GROWTH IN THE NEXT PHASE 2017-2022 2022+ BRAND ELEVATION MOD
Slide 11: Key Elements
KEY ELEMENTS 1. Harness the power of our 2. Bring all product categories 3. Strengthen distribution brand to full potential SEAMLESS EXECUTION Value Chain Excellence Inspired People Values & Sustainability 21
Slide 12: Brand Firmly Anchored in Luxury
BRAND | FIRMLY ANCHORED IN LUXURY SHARE OF CONSUMERS WHO ASSOCIATE BURBERRY WITH “TRUE LUXURY” ATTRIBUTE, % 270% FY20 FY22 Source: Consumer research BRAND | SHARPEN OUR IDENTITY AND BROADEN OUR APPEAL 24
Slide 13: Refocus on Britishness
* | / 1 Ie REFOCUS ON BRITISHWESS, A A 4 ¢ we =, — CEMENT OUR CONNECTION WITH BRITISH DESIGN, CRAFT AND CULTURE r Product rooted in the Partnerships that Talent community that Amore dominant heritage of British design support British culture at represents the best of presence in brand’s home and cra
Slide 14: Amplify Brand Through Communication
AMPLIFY BRAND THROUGH COMMUNICA:
Slide 15: Action Plan
ACTION PLAN Spotlight heroes and enhance product Create a more accessible female identity Extend our brand reach through storytelling and broaden pool of female influencers unexpected activations and innovation 29 I Bete crc CUSTOMER FOCUS } f
Slide 16: Develop a Compelling Customer Proposition
DEVELOP A COMPELLING PROPOSITION Build customer proposition and engagement models across channels CUSTOMER | ACTION PLAN ACQUIRE CUSTOMERS AT PACE Set ambitious acquisition targets across every customer touchpoint DRIVE LOYALTY AND RETENTION Drive “24/7 relationship” with the brand Develop a 360-deg
Slide 17: Bring All Product Categories to Full Potential
2. BRING ALL-PRODUCT CATEGORIES TO FULL POTENTIAL OPPORTUNITIES FOR GROWTH ACROSS ALL CATEGORIES TOTAL RETAIL AND WHOLESALE REVENUE MIX, % Ambition to increase r Accessories to >50% vs 37% in FY22 Children’s Accessories 37% 5 , Long-term plan to reduce Men's 29% - share of RTW, while growing total s
Slide 18: Medium Term Targets
MEDIUM TERM TARGETS leather goods business shoe sales women’s ready-to-wear, rebalancing offering and driving high potential categories outerwear sales Based on Retail revenue NN2X LEATHER GOODS BUSINESS
Slide 19: Leather Goods Action Plan
AESTHETIC Develop iconic shapes Strengthen use of brand signatures and codes CREATE NEW CREATIVE LEATHER GOODS | ACTION PLAN “ EVOLVE WOMEN’S BAGS Protect and animate core handbag pillars Broaden menu of styles and functionalities ae EXPAND MEN’S BAGS Reinforce and expand commercial core Inject fash
Slide 20: Shoes Action Plan
ACTION PLAN REBUILD CATEGORY, AND DEVELOP IMAGE-DRIVING BURBERRY SNEAKERS Develop shoe architecture, Create a unique and distinctive Create image-driving Burberry Create a new outdoor focusing on clear icon products Burberry aesthetic sneakers assortment, harnessing our brand's spirit of exploration
Slide 21: Women's Ready-to-Wear Action Plan
ACTION PLAN REDEFINE THE BURBERRY WOMAN'S WARDROBE, WITH A MODERN, RELATABLE AND FEMININE AESTHETIC Focus on femininity Create elevated silhouettes, playing into modern British luxury Strengthen the connection with image and runway and what customers can find in store Create a wearable, relatable an
Slide 22: Outerwear Action Plan
CONTEXT | ACROSS THE GLOBE, BURBERRY IS PERCEIVED AS THE LEADING OUTERWEAR BRAND LUXURY CONSUMERS INDICATE BURBERRY AS TOP 2 OUTERWEAR BRAND BASED ON QUALITY ACROSS THE US, THE UK AND CHINA Q: Which of the following brands are of the best quality in outerwear? = x2 = + e BURBERRY — | “Burberry is a
Slide 23: Distribution Action Plan
1 ow AL HEN DisTRISUTioN : Aa a \ DISTRIBUTION | ACTION PLAN RETAIL WHOLESALE E-COMMERCE MARKETS Accelerate store Maintain wholesale Maximise e-commerce Accelerate momentum in investment and transform presence to reach new potential core markets productivity luxury consumers 46
Slide 24: Distribution Medium Term Targets
| MEDIUM TERM TARGETS converted to new store — 2 — concept by FY26 5 ree )| a 5 \ Drive store productivity to — Double e-commerce sales, reaching retail penetration 47 ACCELERATE STORE INVESTMENT AND*FRANSFORM PRODUCTIVITY:
Slide 25: Our New Store Concept Is Highly Effective
OUR NEW STORE CONCEPT IS HIGHLY EFFECTIVE more productive higher AUR higher basket size Based on performance of 43 stores, predominantly in Asia, in H1 FY23, excluding Childrenswear, compared to similar stores in each sub-region 49 RETAIL | PLAN TO REACH PRODUCTIVITY OF £25K PER SQM MAXIMISE OPPORTU
Slide 26: Ensure 100% of Stores Converted to New Concept by FY26
RETAIL | ENSURE 100% OF STORES ARE CONVERTED TO THE NEW STORE CONCEPT BY FY26 BURBERRY STORE CAPEX INVESTMENT, £M, FY22-FY26 % of FP stores 615% 40% 60% NB5% 100% converted to new concept ~120 "120 ™120 Increase investment to accelerate store refurbishments to drive consistent brand image 100% of st
Slide 27: Wholesale Action Plan
WHOLESALE | ACTION PLAN WHOLESALE TARGETS Maintain wholesale presence to reach new WHOLESALE REVENUE’, CER, £M luxury consumers Share of totalrevenue 18% 15 hes : woe % Leverage wholesale channel to drive sales in high- ° growth categories of leather goods and shoes 720 . oo, . 600 Build reputation
Slide 28: E-commerce Action Plan
TOTAL BURBERRY E-COMMERCE SALES CONTEXT | GROW E-COMMERCE TO REACH ITS FULL POTENTIAL FY22, MEDIUM- AND LONG-TERM AMBITION, £M FY22 Medium Term Long Term E-COMMERCE PENETRATION, AS % 10% "15% 20% OF RETAIL REVENUE 55 E-COMMERCE | ACTION PLAN NEW ENERGY ON .COM PRODUCT LOCAL EXECUTION OMNICHANNEL INN
Slide 29: Accelerate Momentum in Core Markets
ACCELERATE MOMENTUM IN CORE MARKETS Grow market share, especially with high-net worth clients Accelerate store refurbishment ACTION PLAN Significantly drive local clients Step-change store productivity Accelerate store refurbishment A Continue to focus and grow in Mainland China Scale business in So
Slide 30: Value Chain Excellence Action Plan
| D | | HUEE! aut Streamline key processes, including dedicated oversight to ensure adherence to critical path ACTION PLAN O as Improve efficiency in product development and supply chain, and connection between merchandising and design 60
Slide 31: Product and Planet Responsibility
PRODUCT: RESPONSIBLE CRAFTSMANSHIP Ensure 100% of key raw materials in our products are certified by 2025 Continue to evolve aftercare offer and trial new circular business models Eliminate plastic from our consumer packaging by 2025 RESPONSIBILITY | PRODUCT AND PLANET PLANET: BECOME CLIMATE POSITIV
Slide 32: People and Communities
PEOPLE AND COMMUNITIES Empower young people to create better futures Increase representation and become the best place to through work with The Burberry Foundation work for women in the industry Continue to ensure ethical trading standards are Increase volunteering opportunities for employees upheld
Slide 33: The Next Phase: Our Plan
THE NEXT PHASE |OUR PLAN MODERN BRITISH LUXURY 1. Harness the power of our 2. Bring all product categories 3. Strengthen distribution brand to full potential SEAMLESS EXECUTION Value Chain Excellence Inspired people Values & Sustainability 65 THE NEXT PHASE | AMBITION TO REACH £5BN IN REVENUE IN LON
Slide 34: Bold Targets to Reach £4bn in Sales in Medium Term
THE NEXT PHASE | BOLD TARGETS IN PLACE TO REACH £4BN IN SALES IN THE MEDIUM TERM, SUPPORTED BY INVESTMENT IN KEY STRATEGIC PRIORITIES MEDIUM TERM £4bn Revenue’ TARGETS 20+% Adjusted operating margin’ ™ 2x leather goods, and women’s ready-to-wear, and > 2 shoes ~1,5x outerwear All stores converted to
Slide 35: Appendix: Disclaimer
APPENDIX 69 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
Slide 36: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES APM n and purpose GAAP measure reconciled to Constant Exchange Rates (CER) This measure removes the effect of changes in exchange rates and the 53rd Results at reported rates week in the prior period. The constant exchange rate incorporates both the impact of the mov
Slide 37: Alternative Performance Measures: Net Debt and EBITDA
APM. Description and purpose ALTERNATIVE PERFORMANCE MEASURES GAAP measure reconciled to Net Debt Net debt is defined as the lease liability recognised on the balance sheet plus borrowings less cash net of overdrafts. Cash net of overdrafts: Period ended 26 weeks ended 26 weeks ended £m 1 October 25
Slide 38: Adjusting Items and Foreign Exchange Rates
H1 FY23 | ADJUSTING ITEMS fal E Inventory provisions (recognised in COGS) 1 6 4 | Rent concessions 7 9 2 Government grants 1 1 fal r COVID-19 related adjusting items 9 16 rs) Restructuring costs (1) (5) Revaluation of deferred consideration liability (2) - Profit on sale of property 19 - Total Adjus
Slide 39: Retail & Wholesale Revenue by Product
H1 FY23 | RETAIL & WHOLESALE REVENUE BY PRODUCT V LY Reported CER Growth Growth £1,324m £1,193m 1% 5% Children’s & Other £89m £81m 10% 3% Accessories £495m £435m 14% 7% Men's 10% 4% 1 Women’s 8% 3% H1 FY23 H1FY22 77 COMPARABLE SALES VS PRE-PANDEMIC LEVELS EMEIA -8% -7% 7% Americas 29% 37% 33% Mainla
Slide 40: IR Contacts
IR CONTACTS REPORTING CALENDAR Q3 trading update 18 January 2023 Horseferry House Horseferry Road London SW1P 2AW Tel: +44 (0)20 3367 3524 investor.relations@burberry.com 79