Shaver Shop Group Limited · ASX:SSG
Shaver Shop — H1 FY2018 Earnings Presentation
32 slides from Shaver Shop's earnings presentation, Feb 23, 2018
Slide 1: 1H FY18 Results Investor Presentation
Shaver Shop Group Limited 1H FY18 RESULTS INVESTOR PRESENTATION 23 February 2018 1
Slide 2: Table of Contents
TABLE OF CONTENTS 01 Key business highlights 02 Financial results 03 Key growth drivers 04 Trading update & outlook 05 Appendices 2
Slide 3: Key Business Highlights
01. KEY BUSINESS HIGHLIGHTS 3
Slide 4: 1H FY18 Snapshot
1H FY18 SNAPSHOT Like for like sales up 5.5%, and normalised cash NPAT up 16.9% to $8.1m Sales up Insert Braun Like for Like Sales Insert Foreo Growth image with 19.0% S9 image +5.5% to $93.4m woman Norm.* Gross 4 Franchise Profit Margin Insert Dyson Buybacks 41.5% Norm.* EBITDA* Insert Dafni Normal
Slide 5: Performance Trends
PERFORMANCE TRENDS Corporate Store like for like Sales up 19% to $93.4m sales return to growth*, at 5.5% 100.0 93.4 14.0% 12.9% 90.0 12.0% 78.5 80.0 10.0% 70.0 62.2 Sales (A$m) 60.0 8.0% 6.9% 50.0 6.0% 5.5% 40.0 33.7 4.0% 30.0 2.0% 20.0 10.0 0.0% 0.0 -2.0% -0.6% 1H FY15 1H FY16 1H FY17 1H FY18 1H FY
Slide 6: Performance Trends (Cont'd)
PERFORMANCE TRENDS (CONT’D) Norm. EBITDA up 16.3% to $11.7m Corporate stores up to 106 14.0 Corporate Store Profile 12.0 120 106 Pro Forma EBITDA (A$m) 11.7 95 7 100 10.0 4 10.0 8 80 7 9.5 80 Store numbers 8.0 16 60 56 8 6.0 8 95 40 30 18 80 4.0 4.6 4 56 20 10 30 2.0 16 16 0 FY13 FY14 FY15 FY16 FY17
Slide 7: Performance Trends (Cont'd)
PERFORMANCE TRENDS (CONT’D) Websales1 up 66.6% to $11.2m – Gross margin % declined c.100 now c.10% of total sales bps in 1H FY18 12.0 11.2 50.0% 45.0% 42.5% 42.5% 41.5% 41.5% 10.0 40.0% 35.0% 8.0 6.5 6.7 30.0% $A m 6.0 25.0% 4.4 20.0% 4.0 15.0% 10.0% 2.0 5.0% 0.0 0.0% 1H FY15 1H FY16 1H FY17 1H FY18
Slide 8: Financial Results
02. FINANCIAL RESULTS 8
Slide 9: 1H FY18 vs 1H FY17
1H FY18 VS 1H FY17 Normalised* cash NPAT up 16.9% to $8.1m driven by 19.0% sales growth and 16.3% growth in normalised EBITDA Reported Normalised* Variance Variance $000's 1H FY17 1HFY18 ($) (%) Sales 78,481 93,426 14,945 19.0% Gross profit 33,324 38,755 5,430 16.3% Gross margin % 42.5% 41.5% (1.0%)
Slide 10: Total Sales Up 19.0%
TOTAL SALES UP 19.0% > Total sales up 19.0% to $93.4 million; LFL sales growth of 5.5% – Underlying Corporate Store LFL sales growth (exc. multi- unit reseller channel) of +0.7% > Total sales growth driven by LFL sales growth and 13 additional Corporate Stores > December LFL sales and margins were s
Slide 11: Gross Profit Growth
GROSS PROFIT GROWTH Normalised gross profit increased 16.3% to $38.8 million. Strong sales growth was offset partially by c.100 basis point reduction in gross margin % Growth in gross profit $, while margin % contracted: > Significant growth in Female Beauty category (up 389%) – lower than average m
Slide 12: Improved Cost of Doing Business
IMPROVED COST OF DOING BUSINESS CODB as % of Sales CODB% CODB% down to 30.4% (PCP: 32.2%) 14.0% 12.7% 12.3% > Normalised* CODB decreased c.180 bps 12.0% to 30.4% of sales in 1H FY18 10.0% > Marketing and head office employment 7.8% 7.2% 7.6% 8.0% costs scaling across a larger corporate 6.1% store fo
Slide 13: EBITDA Bridge
EBITDA BRIDGE Normalised EBITDA increased 16.3% to $11.7m. Buyback and greenfield stores were strong contributors in the half. 14,000 934 171 1,118 73 11,660 12,000 10,024 514 712 316 10,000 A$ (000's) 8,000 6,000 4,000 2,000 - FY17 EBITDA Like for Like Buybacks Greenfields Redev-Refit-Closed Market
Slide 14: Strong Balance Sheet
STRONG BALANCE SHEET Low gearing and high liquidity Statutory Statutory Statutory > Net cash of $2.2m at 31 Dec 17 $000's 31-Dec-16 30-Jun-17 31-Dec-17 > $15.7m of unutilised debt capacity Cash 14,852 2,389 9,510 > Increase in inventory (+$5.6m): Inventory 31,063 29,123 36,625 Other assets 54,804 56
Slide 15: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION Variance $'000 1H FY17 1H FY18 ($) Operating cash flow up 44% to $21.8m $21.8m EBITDA 10,023 11,169 1,146 Change in working capital and other 6,236 12,008 5,772 > H1 is seasonally strong due to extended Income tax payments (1,154) (1,409) (255) Christmas trading terms Net
Slide 16: Return and Capital Ratios
RETURN AND CAPITAL RATIOS Actual Actual Strong capital position 1H FY17 1H FY18 Number of corporate stores 93 106 > Significant debt covenant headroom > Low gearing Norm. earnings per share (EPS) - cents 5.0 5.8 > Norm Cash EPS up 17.0% Norm Cash EPS - cents 5.5 6.5 > 1H FY18 interim dividend up 12.
Slide 17: Key Growth Drivers
03. KEY GROWTH DRIVERS 17
Slide 18: Strong Websales Growth Up 66.6%
STRONG WEBSALES GROWTH UP 66.6% > Ongoing investments in our digital platform to enhance the way customers engage with Shaver Shop: – Improved user experience including single click checkout – Customer product reviews & ratings – Buy-now pay later options – Click & collect trial – Broadened marketpl
Slide 19: Technology Transformation Initiatives
TECHNOLOGY TRANSFORMATION INITIATIVES > Shaver Shop is implementing technology solutions to drive sales growth, improved customer experience as well as operating efficiency > A number of projects underway: – Launching new CRM for omnichannel view of customer in H2 FY18 – Implemented new foot traffic
Slide 20: Exceptional Growth in Female Categories
EXCEPTIONAL GROWTH IN FEMALE CATEGORIES > Female beauty category up c.388% and now represents c.8% of corporate sales – Strong sales of Stylpro in lead up to Christmas – Foreo supply remains constrained > Launched Dyson SupersonicTM in Q2 FY18 – Hair Styling category sales declined 25% (LFL) – Dyson
Slide 21: New (Greenfield) Store Rollout
NEW (GREENFIELD) STORE ROLLOUT 7 GREENFIELD STORES OPENED IN 1H FY18 > Greenfield stores overall are meeting returns target > Continuing to refine new store formats > 1 new store committed in late H2 FY18 – Bundaberg (NSW) > Belrose site – further time required to determine larger store format and h
Slide 22: Franchise Buybacks
FRANCHISE BUYBACKS 4 franchise buybacks completed in H1 FY18 > 9 franchises remaining in store network (4 owners) > Penrith Plaza (NSW), Bankstown (NSW) acquired in late November 2017 > Remaining franchise stores are amongst the largest stores (by sales) and well run making it more difficult to buyb
Slide 23: Trading Update & Outlook
04. TRADING UPDATE & OUTLOOK 23
Slide 24: Trading Update
TRADING UPDATE > Total like for like sales growth of +0.8% for the period 1 January to 15 February 2018 (Underlying LFL sales down -0.3%) > Sales and margin softness experienced in December continued in January – Total Corporate Store LFL sales declined -0.8% in January (Underlying LFL sales down -1
Slide 25: Key Initiatives in H2 FY18
KEY INITIATIVES IN H2 FY18 1. Major new supplier launch (Q4) 2. Launch of fully functioning CRM and omni-channel customer view 3. Continued expansion across female beauty category – including launch of own brand range 4. Introduction of buy-now pay later option in-store (Q4) 5. Technology transforma
Slide 26: Summary & Outlook
SUMMARY & OUTLOOK Summary > Strong H1 financial results, even with weak December > Maintaining customer focus and investing further to enhance in-store and online experience as well as drive productivity > Increased relevance to female customers, albeit some high growth lines are at lower than avera
Slide 27: Appendices
A q J ily RM NOURBE ” Ud 2 a) a rT Oo a <
Slide 28: 1H FY18 Key Highlights
1H FY18 KEY HIGHLIGHTS Solid like for like sales and earnings growth in 1H FY18 in a challenging December retail environment • Total Sales up 19.0% to $93.4m on prior corresponding period (pcp) Store • 1H FY18 LFL Corporate Store Sales growth +5.5% (pcp -0.6%), Franchise +0.8% (pcp +0.4%) sales • YT
Slide 29: Key Performance Metrics
KEY PERFORMANCE METRICS Reported Normalised 1H FY17 1H FY18 Number of corporate stores 93 106 Number of franchise stores 15 9 Total stores 108 115 Corporate store sales ($'000) 78,481 93,426 Franchise store sales ($'000) 19,801 13,997 Total network sales ($'000) 98,282 107,423 Corporate store LFL sa
Slide 30: Normalised P&L 1H FY18
NORMALISED P&L 1H FY18 Reported Normalised $A 000s 1HFY18 Normalisation 1H FY18 > In September 2017, two of Shaver Shop’s Sales 93,426 93,426 new suppliers (the suppliers were related Cost of goods sold (54,826) 154 (54,672) Gross profit 38,601 154 38,755 parties) went into liquidation Gross margin
Slide 31: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This management presentation (“Presentation”) has been prepared by Shaver Shop Group Limited ACN 150 747 649 (“Shaver Shop”) and contains general background information about Shaver Shop, its subsidiaries and their activities which is current at the date of this Prese
Slide 32: Thank You
SHAVER SHOP 1H FY18 RESULTS INVESTOR PRESENTION THANK YOU 32