Kmd Brands Limited · NZX:KMD
Kmd Brands — Kathmandu Holdings — FY2016 Earnings Presentation
28 slides from Kmd Brands's earnings presentation, Sep 21, 2016
Slide 1: FY16 Results Presentation
For personal use only FY16 Results Presentation September 2016
Slide 2: Contents
September 2016 For personal use only Contents 1. Result Overview 2. Key Line Items 3. Country Results 4. Cash Flow, Balance Sheet, Dividend 5. Strategy Update 6. FY17 Outlook 7. Questions A. Appendix 1 2
Slide 3: 1. Result Overview
For personal use only 1. Result Overview 3
Slide 4: Result Overview: Highlights
1. Result Overview: Highlights For personal use only Key Points » Sales growth at improved gross margin » Operating leverage improved » Strong operating cash flows » Record low net debt Sales and Margin » Sales increased by $16.2m / 4.0% » Same store sales growth 1.6% (at constant exchange rates) »
Slide 5: Result Overview: Year-on-Year
1. Result Overview: Year-on-Year For personal use only NZD $m*1 FY16 FY15 Var $ Var % SALES 425.6 409.4 16.2 4.0% GROSS PROFIT 266.4 251.9 14.5 5.8% Gross margin 62.6% 61.5% OPERATING EXPENSES (201.6) (204.8) 3.2 (1.6%) % of Sales 47.4% 50.0% EBITDA 64.8 47.1 17.7 37.6% EBITDA margin % 15.2% 11.5% E
Slide 6: 2. Key Line Items
For personal use only 2. Key Line Items 6
Slide 7: Sales
2. Sales For personal use only SALES: +4.0% to $425.6m Group Sales (NZD $m) » Sales growth year on year:*1 AU 7.4%, NZ 1.9%, UK -10.5% $384.0 $392.9 $409.4 $425.6 $347.1 » At constant exchange rates sales growth $21.6m / 5.3% » Online sales 6.9% of total sales FY12 FY13 FY14 FY15 FY16 Australia (AUD
Slide 8: Same Store Sales Result
2. Same Store Sales Result For personal use only SAME STORE SALES: +1.6% at constant rates Australia New Zealand 9.2% » Same store sales: 6.5% 6.7% 6.9% +0.4% actual exchange rates 4.4% 2.6% +1.6% constant exchange rates: » Stores +0.6% -0.1% -0.1% » Online +16.5% -2.7% -1.1% FY12 FY13 FY14 FY15 FY1
Slide 9: Gross Margin %
2. Gross Margin % AU NZ UK GROUP For personal use only 66.9% 66.3% 66.3% 63.4% 64.1% 63.2% 63.0% 63.1% 62.6% 61.5% 60.1% 57.6% 57.7% 58.2% 58.5% 53.9% 51.9% 50.0% 50.9% 49.6% FY12 FY13 FY14 FY15 FY16 FY16 SHARE OF BUSINESS » Average selling price improvement (GROSS PROFIT $) UK 1% » Increased full p
Slide 10: Cost of Doing Business
2. Cost of Doing Business For personal use only OPERATING EXPENSES: -1.6% to $201.6m NZD $m FY16 FY15 Var $ Var % » Rent expenses include flagship stores (Melbourne, Rent 58.3 53.0 5.3 10.0% Adelaide), new Australian distribution centre and % of Sales 13.7% 12.9% New Zealand support office Other ope
Slide 11: Earnings Summary
2. Earnings Summary For personal use only EBITDA $64.8m EBIT*1 $50.9m NPAT $33.5m +37.6% +53.3% +64.2% 74.0 74.5 66.5 64.8 63.4 64.3 57.0 47.1 50.9 44.2 42.2 33.2 34.9 33.5 20.4 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 19.2% 19.3% 19.0% 11.5% 15.2% 16.4% 16.5% 16.4%
Slide 12: 3. Country Results
For personal use only 3. Country Results
Slide 13: Australia
3. Australia For personal use only SALES: +7.4% to $260.1m AUD $m FY16 FY15 Var % Sales 260.1 242.1 7.4% » Gross margin improved 70bps / 0.7% of sales Same store sales growth 2.6% (2.7%) » Total operating expenses (excl. depreciation): » FY16 52.3% of sales EBITDA (trading result) 30.7 20.0 53.5% »
Slide 14: New Zealand
3. New Zealand For personal use only SALES: +1.9% to $141.7m NZD $m FY16 FY15 Var % Sales 141.7 139.1 1.9% » Gross margin improved 160bps / 1.6% of sales contributing to record EBITDA trading result Same store sales growth (0.1%) (1.1%) » Total operating expenses (excl. depreciation): EBITDA (tradin
Slide 15: United Kingdom
3. United Kingdom For personal use only SALES: -10.5% to £2.5m GBP £m FY16 FY15 Var % Sales 2.5 2.8 (10.5%) » Same store sales growth 3.7% assisted by store closures Same store sales growth 3.7% 15.7% » Gross margin improved 90bps / 0.9% of sales EBITDA (trading result) (0.2) (1.0) 76.0% » Total ope
Slide 16: 4. Cash Flow, Balance Sheet, Dividend
4. Cash Flow, Balance Sheet, Dividend For personal use only 16
Slide 17: Cash Flow
4. Cash Flow For personal use only Operating cash flow: NZD $m FY16 FY15 » Strong operating cash flow generated through improved profitability, inventory management NPAT 33.5 20.4 and timing of lease incentives (Australian Change in working capital 20.5 (3.3) distribution centre) Change in non-cash
Slide 18: Balance Sheet
4. Balance Sheet For personal use only Stock Per Store (NZ $m) NZD $m FY16 FY15 $0.708 Inventories 95.4 113.3 $0.692 $0.591 $0.584 $0.589 Property, plant and equipment 61.6 54.1 Intangible assets 234.0 240.0 Other assets 15.3 21.4 Total assets (excl. cash) 406.3 428.8 FY12 FY13 FY14 FY15 FY16 Net in
Slide 19: Dividend
4. Dividend For personal use only » NZ 8.0 cents per share final dividend; full year payout NZ 11.0 cps (FY15 NZ 8.0 cps) » Dividend will be fully imputed for New Zealand shareholders » Dividend will be fully franked for Australian shareholders » Supplementary dividend of NZ 1.411 cents is payable t
Slide 20: Foreign Currency
4. Foreign Currency For personal use only FORWARD HEDGING POSITION FY15 FY16 FY17 FY18 % covered 100% 100% 90%+ 10%+ AUD/USD Effective Rate 0.886 0.796 0.720 0.760 % covered 100% 100% 90%+ 10%+ NZD/USD Effective Rate 0.815 0.732 0.659 0.724 » c. 10% deterioration in hedge rates for FY17 weighted to
Slide 21: Strategy Update
5. Strategy Update For personal use only “Design great, innovative, distinctive and sustainable quality products” “Be customer-centric in everything we do” 21
Slide 22: Strategy Update – Continuous Improvement
5. Strategy Update – Continuous Improvement For personal use only » Promote brand distinctiveness with a focus on products that reinforce our expertise in adventure travel Brand and » Inspire our customers through personalised digital marketing, social media customer engagement, and CRM capability »
Slide 23: Strategy Update – Continuous Improvement
5. Strategy Update – Continuous Improvement For personal use only » Invest in our online platform to improve useability and functionality » Integrate inspirational online content in the path to purchase » Leverage our online platform in store to maximise customer conversion Omni-channel » Improve si
Slide 24: Strategy Update – Growth
5. Strategy Update – Growth For personal use only » Leverage our brand equity and online platform to expand internationally using a capital light model International » Entry strategies will be tailored to each key growth market, and may include online only, wholesale distribution, or franchised reta
Slide 25: 6. FY17 Outlook
For personal use only 6. FY17 Outlook 25
Slide 26: FY17 Outlook
6. FY17 Outlook For personal use only » Too early to comment on FY17 trading due to promotional calendar timing changes » Challenging retail environment characterised by increasing competition » Continued focus on leveraging investments made » International to become step by step a stronger focus 26
Slide 27: Questions
For personal use only 7. Questions 27
Slide 28: Appendix – Historical store count
A. Appendix 1 – Historical store count For personal use only Australia and New Zealand Stores 161 156 145 131 114 104 91 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1. Permanent open stores at balance date 2. Five new stores opened during FY16, and three UK stores closed. Excludes Online stores 28