Michael Hill International Ltd. · ASX:MHJ
Michael Hill International — Morgans Queensland Conference 2016
25 slides from Michael Hill International's conference presentation, Oct 13, 2016
Slide 1: Michael Hill International Limited
michael hill. INTERNATIONAL LIMITED
Slide 2: Agenda
A G E N DA For personal use only History and overview How we operate – what makes us different Growth strategy First quarter trading update Q&A 2
Slide 3: History & Overview
For personal use only HISTORY & OVERVIEW 3
Slide 4: History
H I STO RY For personal use only Sir Michael Hill opened the first store in Whangarei, New Zealand in 1979 MHI listed on the N Z X in July 19 87 and opened the first Australian store that year Head office, executive team, distribution and retail support relocated to Brisbane in 2004 IP trans
Slide 5: Total Michael Hill Stores Operating
TOTA L M I C HA E L H I LL STO R E S O P E RATI N G For personal use only 300 Store Numbers at 30 June • 2000 – 106 +4 • 2001 – 115 +9 250 • 2002 – 120 +5 • 2003 – 134 +14 • 2004 – 143 +9 200 • 2005 – 156 +13 • 2006 – 177 +21 • 2007 – 192 +15 150 • 2008 – 210 +18 • 2009 – 239 +29 • 2010 – 232 - 7 10
Slide 6: Sales by Brand / Country FY2016
S A LE S BY B RA N D / C O U NTRY FY2016 For personal use only Australia 56% New Zealand 21% Canada 18% USA 3% Emma & Roe 2% 6
Slide 7: EBIT Contributions by Country to June
E B IT C O NTR I B UTI O N S BY C O U NTRY TO 30 J U N E (AU$000’s) For personal use only 60,000 50,000 40,000 30,000 20,000 10,000 0 (10,000) 2012 2013 2014 2015 2016 Australia NZ Canada Emma & Roe USA 7
Slide 8: Earnings Before Interest & Tax to June
EA R N I N G S B E FO R E I NTE R E ST & TA X TO 30 J U N E (AU$000’s) For personal use only 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2012 2013 2014 2015 2016 8
Slide 9: Five Year Earnings and Cash Flow Growth
FI V E YEA R EA R N I N G S A N D CA S H FLO W G R O W TH For personal use only Consistent growth despite soft global environment Five year CAGR 2011 to 2016 Revenue 8.0% p.a. EBITDA 8.6% p.a. EBIT 6.2% p.a. Net earnings before tax 6.4% p.a. Net operating cash flow 7.4% p.a. 9
Slide 10: How We Operate - What Makes Us Different
For personal use only HOW WE OPERATE- WHAT MAKES US DIFFERENT 10
Slide 11: How We Operate – What Makes Us Different
HOW WE OPERATE – WHAT MAKES US DIFFERENT For personal use only The market we operate in and how we define it The Michael Hill professional selling system POS and Management Information systems In House Credit Professional Care Plans Inventory management Branded collections eCommerce
Slide 12: The Market We Operate In
TH E M A R KET W E O P E RATE I N For personal use only Metrics used to select markets, store location within a city and within a mall Store layout and size carefully planned TH E M I C HA E L H I LL P R O FE S S I O NA L S E LLI N G SYSTE M Continuous staff training and management Rigorousl
Slide 13: Inventory Management 2016 / Branded Collections 2016
I N V E NTO RY M A NA G E M E NT 2016 For personal use only Total inventory on hand was $200.0m up from $182.2m Stock turn across the Group is 1.06 for the 12 months up from 0.92. Stock turn is calculated on average monthly inventory holding. Gross margin ROI was1.39 for the year B RA N D E D
Slide 14: In House Credit North America / Professional Care Plans 2016
I N H O US E C R E D IT N O RTH A M E R I CA 2016 Loan book has grown to $13.9m, up 12.6% on prior year For personal use only Represents 25% of sales in Canada and 40% in the US Interest and other income grew 29.8% to $1.4m Bad debts run at approximately 5% of credit sales made Presents a
Slide 15: E-Commerce Trends
E-C O M M E R C E TR E N D S For personal use only e-commerce stores operating in each of our 4 markets There were 10.9m visits to our web sites over the 12 months up from 8.8m CRM capability is progressing well, with early deliverables successfully embedded. A new POS is being deployed in the
Slide 16: Growth Strategy
For personal use only GROWTH STRATEGY 16
Slide 17: Growth Drivers
G R O W TH D R I V E R S For personal use only Michael Hill Australia – grow/fine tune ~ 3 new stores p.a.; improve store locations; lift margins and operating metrics New Zealand – fine tune ~ 1 new store p.a.; ongoing refinement of business; maintain margins and operating metrics Canada
Slide 18: Segment Overview – June 2016
S E G M E NT O V E R V I E W – J U N E 2016 For personal use only MATURITY AU NZ CA USA E&R SCALE × × BRAND STRENGTH × × SALES PER STORE $1.8M $2.4M $1.4M $1.4M $0.9M GP% 62.7% 61.7% 62.1% 58.7% 69.9% EBIT% 16.4% 22.4% 10.0% (16.3%) (26.0%) POTENTIAL EBIT MARGIN 18% 23% 18% GROWTH DRIVER
Slide 19: Quarterly Trading Update – Months to September 2016
Q UA RTE R LY TRA D I N G U P DATE – 3 M O NTH S TO S E P TE M B E R 2016 For personal use only 19
Slide 20: Store Photos
For personal use only STO R E P H OTO S 20
Slide 21: Vulcan Lane, New Zealand
SF Heel Hin i Vulcan Lane, New Zealand Opened August 2015
Slide 22: For personal use only
For personal use only 22
Slide 23: Roosevelt Field, USA
Roosevelt Field, USA Opened October 2015
Slide 24: Q&A
For personal use only Q&A
Slide 25: Michael Hill International Limited
michael hill. INTERNATIONAL LIMITED
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