Lovisa Holdings Ltd. · ASX:LOV
Lovisa — H1 2018 Earnings Presentation
20 slides from Lovisa's earnings presentation, Feb 21, 2018
Slide 1: Lovisa Holdings Limited 2018 Half Year
For personal use only Lovisa Holdings Limited 2018 HALF YEAR STEVESTEVE DOYLEDOYLE CHIEFCHIEF EXECUTIVE OFFICER EXECUTIVE OFFICER CHRIS LAUDER CHIEFCHIEF FINANCIAL OFFICER FINANCIAL OFFICER CHRIS LAUDER 1
Slide 2: Forward-looking statements
For personal use only Some of the information contained in this presentation contains “forward - looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect the current intentions, plans, expectations, assumptions and beliefs about f
Slide 3: Half year headline results
EBIT up 23% NPAT $24.8M $34.7M up 23% For personal use only Like for Like Sales Revenue up 18.9% +7.4% $118.6M Total Stores Interim Dividend 319 13.0 CPS Net increase of 31 stores Fully Franked 3
Slide 4: Contents
Contents For personal use only 1. HALF YEAR OVERVIEW 2. FINANCIAL OVERVIEW 3. TRADING PERFORMANCE 4. CASHFLOW AND BALANCE SHEET 5. STORE GROWTH 6. TRADING OUTLOOK 7. SUMMARY 8. APPENDICES 4
Slide 5: Half Year Overview
Half Year Overview For personal use only • EBIT up 23% to $34.7m • We continue to invest in the structure of the business to support global growth, with investment in rollout of new • Comparable store sales growth of 7.4% following strong territories, global support structures and the expanded Chris
Slide 6: Financial Overview
Financial Overview For personal use only Continued earnings growth following increase in LFL sales and margin • Revenue up 18.9% with comparable store sales up 7.4% for the ($000) HY18 HY17 Variance half year Actual Actual Actual • Gross profit of $95.4m up 23% reflecting improved margins Revenue 11
Slide 7: Trading Performance Sales
Trading Performance Sales Comparable sales up 7.4% For personal use only 120 $118.6m $99.7m 100 $82.6m Revenue ($AUDm) 80 $73.0m 60 40 20 0 HY15 HY16 HY17 HY18 • Total Global Sales Revenue up 18.9% to $118.6m • Comparable sales up 7.4% driven by strong performance of Christmas and Boxing day sales p
Slide 8: Trading Performance Sales by region
Trading Performance Sales Sales increase across all regions Region ($AUD '000)* HY18 HY17 Variance For personal use only Australia / NZ 76,479 70,755 8.1% Asia 17,267 14,793 16.7% Africa 15,998 11,548 38.5% Europe 8,112 2,216 266.1% North America 151 - - Total 118,007 99,312 18.8% *Sales revenue exc
Slide 9: Trading Performance Gross Margin
Trading Performance Gross Margin Gross margin increased to 80.4% For personal use only Gross Margin at Constant Currency* • Gross profit increased 22.9% to $95.4m FY18 FY18 FY17 • Gross Margin was 80.4% up 260 basis points from 77.8% in the prior year Currency USD 0.75 0.71 0.71 • Gross Margin on a
Slide 10: Cost of Doing Business
Cost of Doing Business Continued investment in global rollout For personal use only • CODB as a percentage to sales 60% CODB % Sales increased to 48.1% as a result of 50% ongoing investment into growing the business 40% • Operating costs remain well controlled with CODB increases 30% 50% 50% 48% foc
Slide 11: Cash Flow
Cash Flow For personal use only Strong Cash Conversion and Inventory Management (A$000s) HY18 HY17 Cash from operating activities 44,929 34,942 • Cash flow from operations lifted 25.4% to $37.2m Net interest paid (6) (275) with operating cash conversion at 117% Tax paid (7,689) 4,982) • Capital expe
Slide 12: Balance Sheet
Balance Sheet For personal use only Strong Balance Sheet with Significant Capacity Available To Fund Growth (A$000s) HY18 FY17 HY17 • Disciplined inventory management with growth in Net Cash 33,034 11,039 28,246 Receivables 3,781 3,615 3,130 inventory levels in line with growth in store numbers Inve
Slide 13: Store Growth
Store Growth For personal use only International Rollout Continues with A Net Increase of 31 Stores Store number growth Est. Store • Number of international stores growing with offshore Country HY18 FY17 Var Capacity territories now 53% of the network Australia 151 145 6 150+ New Zealand 18 18 - 18-
Slide 14: Trading Outlook
Trading Outlook For personal use only • Whilst the result for the half year reflects a strong start to the financial year, in particular in relation to sales and gross margin, it is important to note that Lovisa has a disproportionate mix of EBIT weighted to the first half, which has also been enhan
Slide 15: Summary
Summary • EBIT of $34.7m and 80.4% gross margin For personal use only • Comparable store sales growth of 7.4% • Lift in margin following tight inventory management and strong Christmas and Boxing Day sales period • CODB investment well managed to focus on laying the platform for future growth • Tigh
Slide 16: Appendices
For personal use only Appendices 16
Slide 17: ASIC Regulatory Guide Disclosing non-IFRS financial information
Appendix 1 ASIC Regulatory Guide 230 Disclosing non-IFRS financial information In December 2011 ASIC issued Regulatory Guide 230. To comply with this Guide, Lovisa Holdings Limited is required to make a clear statement about the non-IFRS information For personal use only included in the Profit annou
Slide 18: Appendix – Profit & Loss Statement
Appendix 2 – Profit & Loss Statement ($’000) HY18 HY17 Variance Actual Actual Actual For personal use only Revenue 118,615 99,740 18.9% Cost of sales (23,227) (22,148) 4.9% Gross profit 95,388 77,592 22.9% Employee expenses (28,167) (23,261) 21.1% Property expenses (16,407) (14,009) 17.1% Distributi
Slide 19: Appendix – Key Risks
Appendix 3 – Key Risks Foreign Currency • Majority of goods that are imported are priced in USD. Consequently Lovisa is exposed to movements in the USD exchange rate For personal use only • As international growth continues Lovisa will be exposed to movements in the exchange rates of the countries i
Slide 20: Appendix – Global Brand Strategy
Appendix 4 – Global Brand Strategy Vision • Internationally recognised brand For personal use only • Global footprint • Brand of choice for fast fashion jewellery Growth Engine • High Margin business operating in small store footprint • Fit out cost generally low with compelling return and pay back