Slide 1: Interim Results 2020
BURBERRY LONDON ENGLAND INTERIM RESULTS 2020
Slide 2: Marco Gobbetti, Chief Executive Officer
MARCO GOBBETTI CHIEF EXECUTIVE OFFICER
Slide 3: Agenda
AGENDA INTRODUCTION PROGRESS TO DATE FINANCIAL RESULTS STRATEGY AND OUTLOOK Q&A 3
Slide 4: Half Year Results
HALF YEAR RESULTS Total revenue £878m Adjusted operating profit £51m 4
Slide 5: Momentum disrupted by COVID, but rapidly recovering
MOMENTUM DISRUPTED BY COVID, BUT RAPIDLY RECOVERING TOTAL COMP SALES GROWTH – BY QUARTER % 11% -6% -45% FY19 FY20 FY20 FY21 FY20 FY21 Dec 29 - Jan 25 Q1 Q2 5
Slide 6: Recovery accelerating in the last two months
RECOVERY ACCELERATING IN THE LAST TWO MONTHS TOTAL COMP SALES GROWTH – BY MONTH % June July August September October FY21 FY21 FY21 FY21 FY21 6
Slide 7: Strategic Progress
STRATEGIC PROGRESS Momentum disrupted by COVID, but good strategic progress driving recovery Outperformance of full-price channels Traction in leather goods High double-digit digital growth High share of new and younger customers 7
Slide 8: Collection Performance
COLLECTION PERFORMANCE 8
Slide 9: Traction in Leather Goods
TRACTION IN LEATHER GOODS % YoY sales growth LEATHER GOODS - MAINLINE AND DIGITAL COMP SALES £ FY20 FY21 Q2 Q2 Note: Graph not to scale 9
Slide 10: Full Price Channel Mix
FULL PRICE CHANNEL MIX Increase vs LY (p.p.) SHARE OF FULL PRICE CHANNELS1 WITHIN TOTAL COMP SALES % DD Q2 FY20 Q2 FY21 1 Includes full price and markdown sales from mainline and digital channels 10
Slide 11: Brand Activations
BRAND ACTIVATIONS UNEXPECTED VISIBILITY FASHION SHOW CAMPAIGNS INNOVATIVE CLIENT FORMATS NATIVE & CREATIVE COLLABORATIONS CAPSULES B SERIES NEW COLLECTIONS BURBERRY COMMUNITY POP-UPS AND VM 11
Slide 12: Strong Recovery in Asia and Americas
STRONG RECOVERY IN ASIA AND AMERICAS TOTAL COMP SALES – ASIA TOTAL COMP SALES – AMERICAS % GROWTH % GROWTH 21% 10% -10% FY21 FY21 -70% Q1 Q2 FY21 FY21 Q1 Q2 12
Slide 13: Mainland China
MAINLAND CHINA LOCAL CAMPAIGNS AND CONTENT NEW ACTIVATIONS DIGITAL 13
Slide 14: Korea
KOREA NATIVE CONTENT COLLABORATIONS POP-UPS AND IN-STORE INSTALLATIONS INNOVATIVE CLIENT FORMATS 14
Slide 15: Americas
AMERICAS IMAGE FOR VIRTUAL EVENT TO COME CULTURALLY RELEVANT CONTENT BURBERRY COMMUNITY NEXT GENERATION STORE EXPERIENCE 15
Slide 16: Digital Sales
DIGITAL SALES % YoY sales growth DIGITAL COMP SALES £ Q2 FY20 Q2 FY21 Note: Graph not to scale 16
Slide 17: Digital Activations
DIGITAL ACTIVATIONS IMMERSIVE WORLDS ON .COM DIGITAL POP-UPS ACTIVATIONS ON THIRD PARTY PLATFORMS 17
Slide 18: BAK.
BAK.
Slide 19: Adapting In-Store Experiences
ADAPTING IN-STORE EXPERIENCES % YoY sales growth MAINLINE REVENUE GENERATED FROM APPOINTMENTS £M FY20 Q2 FY21 Q2 19
Slide 20: Balance Sheet and Liquidity
BALANCE SHEET AND LIQUIDITY CASH AND LIQUIDITY COST MANAGEMENT 20
Slide 21: People and Responsibility
PEOPLE AND RESPONSIBILITY OUR PEOPLE AND COMMUNITES RESPONSIBILITY 21
Slide 22: Slide 22
Slide 23: Agenda
AGENDA INTRODUCTION PROGRESS TO DATE FINANCIAL RESULTS STRATEGY AND OUTLOOK Q&A 23
Slide 24: Julie Brown, Chief Operating & Financial Officer
JULIE BROWN CHIEF OPERATING & FINANCIAL OFFICER
Slide 25: H1 2021 Summary Financials
H1 2021 SUMMARY FINANCIALS ------ CHANGE ------ H1 2021 H1 2020 Reported CER £m £m FX Revenue 878 1,281 (31%) (30%) Adjusted Adjusted operating profit 51 203 (75%) (71%) Adjusted operating margin 5.8% 15.9% (10.1% pts) (9.3% pts) Adjusted diluted EPS 4.6p 36.9p (88%) (85%) Free cash flow (45) (29) D
Slide 26: Retail Comp Growth
RETAIL COMP GROWTH IMPROVING QUARTERLY PERFORMANCE Group APAC EMEIA Americas H1 -25% H1 flat H1 -56% H1 -28% 21% 10% -6% -10% -39% -45% -70% -74% Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2
Slide 27: Group Revenue -30% (CER)
GROUP REVENUE -30% (CER) £1,281m -25% -4% £892m £878m -38% -30% -31% -24% -1% Revenue Retail Comp Retail Space Wholesale Licensing Revenue H1 FX Revenue H1 H1 FY2021 FY2021 reported FY2020 at CER
Slide 28: Retail & Wholesale Revenue by Product
RETAIL & WHOLESALE REVENUE BY PRODUCT H1 FY2021 H1 FY2020 H1 FY2021 Q2 FY2021 CER H1 FY2021 CER Reported Growth* Growth Growth (5%) £860m £1,257m (32%) (31%) £387m (38%) (37%) (16%) Women’s £242m --- Apparel (65%) --- £347m (26%) (25%) 2% Men’s £66m £258m (10%) (8%) 27% Children’s & Other £59m £457m
Slide 29: Income Statement
INCOME STATEMENT ------ CHANGE ------ H1 2021 H1 2020 Reported CER £m £m FX Revenue 878 1,281 (31%) (30%) Adjusted Gross profit 598 68.1% 865 67.5% (31%) Operating expenses (547) (662) (17%) Adjusted operating profit 51 5.8% 203 15.9% (75%) (71%) Adjusting operating items 37 (1) Tax* (25) 51% (43) 2
Slide 30: Adjusted Operating Profit Bridge
ADJUSTED OPERATING PROFIT BRIDGE £203m -£263m £112m total opex reduction YoY -17% £22m £59m -£8m £51m £49m £41m £7m Adjusted Operating Trading GM Increase People Property Other Opex Adjusted Operating FX Adjusted Operating Profit Decline Profit Profit H1 FY2021 H1 FY2020 H1 FY2021 CER Reported FX No
Slide 31: Free Cash Flow
FREE CASH FLOW H1 2021 H1 2020 £m £m Adjusted operating profit 51 203 Depreciation and amortisation 129 160 Working capital (90)* (120) Other (4) 18 Cash inflow from operations 86 261 Payment of lease liabilities (62) (125) Capex (46) (68) Interest (14) (9) Tax (9) (88) Free cash flow (45) (29) * In
Slide 32: Cash Movement
CASH MOVEMENT Cash net of overdrafts +£297m £1,138m Cash net of overdrafts £887m +£1m -£46m -£3m +£4m -£300m +£298m March FCF Capex Investment FX/Other RCF CCFF Bond September 2020 2020 Pre Capex Repayment March September 2020 2020 0.7x Net debt / Cash, net of overdrafts 887 1138 Net debt / 0.9x adj
Slide 33: Sustainability Bond
SUSTAINABILITY BOND Sustainability Bond: 5 yr, £300m 1.125% senior, unsecured, unsubordinated • Baa2 credit (stable outlook) rating from Moody’s • 8x over-subscribed • Provides medium term financing • Sustainability bond framework reviewed by Sustainalytics Use of proceeds • Finance eligible project
Slide 34: Brexit
BREXIT Brexit planning for all outcomes • Supply chain operations • Incremental duty • Authorised Economic Operator status • Trade compliance • Inventory management and logistics • People
Slide 35: FY2021 Financial Outlook
FY2021 FINANCIAL OUTLOOK Recovery well underway but continuing impact of COVID-19 brings macro-economic uncertainty Guidance updates • Impact of EMEIA lockdown • Markdowns materially reduced in H2 FY2021 mainly falling in Q3 FY2021 • Space neutral in the FY (H2 FY2021 +3%) • FY tax rate expected to
Slide 36: H1 FY2021 Impacted by Store Closures
H1 FY2021 IMPACTED BY STORE CLOSURES H1 PERCENTAGE OF STORES CLOSED H1 -25% AND MONTHLY COMPARABLE SALES GROWTH ~60% +LSD ~50% -LSD -HSD -HSD ~-20% ~15% ~-45% LDD MSD MSD LSD LSD ~-60% End Mid End End End End End Current Apr May Jun July Aug Sept Oct Mar May June July Aug Sep Oct 36
Slide 37: Summary
Summary • Good recovery from COVID-19 • Liquidity strengthened • Capex focused on rebounding economies • Opex redirected to customer facing areas from enabling areas Strong foundations in place to position us well to drive long term growth
Slide 38: Marco Gobbetti, Chief Executive Officer
MARCO GOBBETTI CHIEF EXECUTIVE OFFICER
Slide 39: Where We Are in Our Journey
WHERE WE ARE IN OUR JOURNEY ACCELERATE AND GROW STRENGTHEN SET THE FOUNDATION • Accelerate growth • Adapt business to the COVID environment • Ignite brand heat with influencers and • Continue to strengthen key opinion leaders brand and product • Manage product transition and invest in image-driving
Slide 40: Clear Plans in Place to Drive Performance
CLEAR PLANS IN PLACE TO DRIVE PERFORMANCE 1. SHARPEN OUR LUXURY BRAND 4. GROW LEATHER AND 5. ADAPT THE LUXURY 6. SUPERCHARGE 2. ACCELERATE CHINA 3. FOCUS ON LOCAL MESSAGE OUTERWEAR STORE EXPERIENCE DIGITAL FLEXIBILITY AND AGILITY SUPPORT OUR PEOPLE AND COMMUNITIES BALANCE SHEET AND LIQUIDITY 40
Slide 41: Sharpen Our Luxury Brand Message
SHARPEN OUR LUXURY BRAND MESSAGE SOCIAL CONTENT AT SCALE LOCAL AND GLOBAL BURBERRY INNOVATIVE FORMATS TO DRIVE COMMUNITIES ENGAGEMENT 41
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Slide 43: Accelerate Mainland China
ACCELERATE MAINLAND CHINA DRIVE LOCAL RELEVANCE HERO NEW PRODUCT CONNECT WITH REPATRIATED CUSTOMERS 43
Slide 44: Full Bleed Photo of Digital or In-Store Activation
FULL BLEED PHOTO OF [DIGITAL OR IN-STORE ACTIVATION] 44
Slide 45: Focus on Local Consumer
FOCUS ON LOCAL CONSUMER PROGRAMME OF LOCALLY RELEVANT NEW FORMATS TO ENGAGE LOCAL EVENTS CONSUMERS 45
Slide 46: Grow Leather and Outerwear
GROW LEATHER AND OUTERWEAR REINFORCE LEATHER GOODS CONTINUE BUILDING DESIRE FOR SUPPORT WITH BAGS AND OUTERWEAR- ARCHITECTURE OUTERWEAR DEDICATED CALENDAR MOMENTS 46
Slide 47: Adapt Luxury Store Experience
ADAPT LUXURY STORE EXPERIENCE SUPERCHARGING APPOINTMENTS INTRODUCING NEW ONLINE TO OFFLINE CUSTOMER JOURNEYS 47
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Slide 49: Supercharge Digital
SUPERCHARGE DIGITAL STEP-CHANGE INSPIRATION CURATED PRODUCT 49
Slide 50: Strong Business Foundation
STRONG BUSINESS FOUNDATION LOCAL EXECUTION CASH AND COST MANAGEMENT AGILITY AND OPERATIONAL EFFICIENCY DRIVING POSITIVE CHANGE 50
Slide 51: Key Messages
KEY MESSAGES Strong strategic progress despite COVID Still a challenging period ahead, but clear plans in place to drive performance in the next 12-18 months 51
Slide 52: Q&A
Q&A
Slide 53: Q&A
Q&A