City Chic Collective Limited · ASX:CCX
City Chic Collective — FY2022 Earnings Presentation
39 slides from City Chic Collective's earnings presentation, Aug 25, 2022
Slide 1: Leading a World of Curves – FY22 Results
LEADING A WORLD OF CURVES FY22 RESULTS 25 August 2022
Slide 2: Contents
CONTENTS 1. Building a global business 2. FY22 Result Overview 3. Inventory Review 4. Channel and Regional Overview 5. FY22 Financial Review 6. FY23 Update and Outlook 7. Appendix Phil Ryan, CEO Peter McClelland, CFO
Slide 3: Building a Global Business
1. BUILDING A GLO B A L B US I N E SS 3
Slide 4: Building a Global Business
BUILDING A GLOBAL BUSINESS OUR VISION IS TO LEAD A WORLD OF CURVES THE DESTINATION FOR HER EVERY LIFESTYLE NEED GLOBAL EXECUTING OUR GLOBAL GLOBAL DIGITAL PLUS-SIZE STRATEGY PRODUCT RANGE STORE FRONTS MARKET Delivering our product range to the global plus-size market 8k+ 15+ US$180b1 & Partners + St
Slide 5: Building a Global Business – Growing Customer Numbers
BUILDING A GLOBAL BUSINESS – GROWING CUSTOMER NUMBERS Category leader with strong execution of digital growth strategy GLOBAL CUSTOMER BASE1 ONLINE PENETRATION2 ONLINE CUSTOMER ENGAGEMENT3 Customer Numbers '000 Global Revenue $m 82% Traffic '000 Online Sales 1,395 78.6 303 1,070 58.1 196 663 44% 34.
Slide 6: Sustained Revenue and Profit Growth
BUILDING A GLOBAL BUSINESS SUSTAINED REVENUE AND PROFIT GROWTH Demonstrated ability to drive sales and earning growth through volatile trading conditions SALES $m Underlying EBITDA1 $m Underlying EBIT1 $m $369.2 $47.1 $40.1 $42.4 $36.0 $265.6 $199.7 $24.9 $26.5 $20.9 $20.6 $149.5 2 2 2 FY19 FY20 FY2
Slide 7: Investment in Global Distribution Network
BUILDING A GLOBAL BUSINESS INVESTMENT IN GLOBAL DISTRIBUTION NETWORK FY20 FY22 • >99% of product sourced from • 75% of product sourced China from China • ~40 tier 1 factories controlling • ~100 tier 1 factories with 75% of all logistics shift to in-country ownership PRODUCT PRODUCT SOURCING DISTRIBU
Slide 8: FY22 Result Overview
2 FY22 RESULT OVERVIEW city chic collective
Slide 9: FY22 Result Highlights
FY22 RESULT HIGHLIGHTS For the 53 weeks7 ending 3 July 2022 $369.2m Global Sales Australia, New Zealand, USA, Canada, UK, Europe, Middle East 82% 39.0% 25.5% $369.2m 1.4m 78.6m Online Sales Top-line Sales Comp Sales Penetration (LTM)2 Growth Growth1 Global Sales6 Active Customers3,6 Global Traffic5,
Slide 10: FY22 Financial Highlights
FY22 FINANCIAL HIGHLIGHTS 39.0% top line and 25.5% comparative sales growth driven by expansion of omni-channel offering with growth across all channels and regions (except stores impacted by closures in 1H) FY22 included 53 weeks trading. The net impact of this is: Revenue $5.4m and EBITDA $1.2m Ge
Slide 11: FY22 Operational & Strategic Highlights
FY22 OPERATIONAL & STRATEGIC HIGHLIGHTS Continued global range expansion to over 8,000 styles and 15 lifestyle brands Partnership strategy implemented globally with $30m global partner business ANZ store network invested in with 12 Premium Flagship stores Conservative product stream launched in Aust
Slide 12: Inventory Review
3. INVENTORY REVIEW city chic collective
Slide 13: Strategic Sourcing Decision FY22
STRATEGIC SOURCING DECISION FY22 As previously outlined in FY21 a decision to review the way we source product in FY22 was made to: • Achieve greater supply chain diversity due to volatility and disruption caused by geopolitical and pandemic related issues • Avoid supply chain inflation • Build out
Slide 14: Inventory Investment for Growth
INVENTORY INVESTMENT FOR GROWTH • In FY22 we invested in inventory to drive our continued growth including: • High levels of organic growth • Evans and Navabi required material stock investments • Partner growth globally • Canada stock pool established • The closing inventory includes : • Early rece
Slide 15: Our Accelerated Inbounding Programme Has Now Concluded
OUR ACCELERATED INBOUNDING PROGRAMME HAS NOW CONCLUDED 196 Core inventory to • Inventory level has now peaked be sold <12 months 23 from purchase 35 • Inventory will unwind over FY23 through: 35 • The reduction of the ‘future period 126 inventory’ to a more normalised level 29 17 • The conclusion of
Slide 16: Seasonless Inventory – Core Sells All Year
SEASONLESS INVENTORY – CORE SELLS ALL YEAR
Slide 17: Seasonless Inventory – Classic Shapes and Styling
SEASONLESS INVENTORY – CLASSIC SHAPES AND STYLING THAT TRANSCEND SEASONS Best Seller Best Seller Best Seller Best Seller 4+yrs Best Seller Best Seller all year round all year round all year round Winter 22 Summer 22 AVENUE/EVANS CITY CHIC Timeless Winter Timeless Winter Timeless Winter Best Seller 4
Slide 18: Channel and Regional Overview and Growth Drivers
4. CHANNEL AND R E G I O N A L OV E RV I E W A N D G R OW T H DRIVERS 18
Slide 19: Sales Performance by Channel & Region
SALES PERFORMANCE BY CHANNEL & REGION 53 weeks in FY22 vs 52 weeks in FY21 REVENUE BY REGION • Top line sales growth of 39.0% and Sales Sales Sales comp sales growth of 25.5% Sales Sales Comp Growth Comp Sales Growth since Growth Growth 2H FY22 Revenue FY22 Revenue Sales (A$m) Reporting Growth2 Apri
Slide 20: Current Brand Portfolio & Strategic Opportunity
CURRENT BRAND PORTFOLIO & STRATEGIC OPPORTUNITY Opportunity to address global plus-size market with our portfolio of brands FASHION / YOUTH CONSERVATIVE INTIMATES OUR BRANDS AUSTRALIA & Market Entry Opportunity Market Share Expansion and Greater Share of Wallet NEW ZEALAND (Launched August 2021) Gre
Slide 21: ANZ: Expanding Omni-Channel Presence
ANZ: EXPANDING OMNI- AUSTRALIA & NEW ZEALAND CHANNEL PRESENCE FY22 OPERATIONAL HIGHLIGHTS Stores 38% Online • Strong growth in active customers, web traffic and spend per $161.8m customer Revenue • Launched ‘World of Curves’ conservative market segment Online 62% into the Collective Stores • 13.4% o
Slide 22: Americas: Investing to Support Sustained Growth
AMERICAS: INVESTING TO AMERICAS SUPPORT SUSTAINED GROWTH Wholesale 3% Marketplace 12% FY22 OPERATIONAL HIGHLIGHTS 53% top line • Strong growth in active customers and web traffic with revenue spend values maintained $162.4m growth • Fashion segment through City Chic’s better dressing Revenue generat
Slide 23: EMEA: Established Footprint to Build Scale
EMEA: ESTABLISHED FOOTPRINT EMEA TO BUILD SCALE Wholesale 2% Marketplace 9% FY22 OPERATIONAL HIGHLIGHTS 223% top line • EMEA is now a substantial business with $45m of revenue revenue growth • CCX fashion & conservative assortment strong appeal in UK market $45.1m Revenue • 8% increase in web traffi
Slide 24: FY22 Financial Review
5. FY22 FINANCIAL REVIEW city chic collective
Slide 25: Financial Performance
FINANCIAL PERFORMANCE 53 weeks in FY22 vs 52 weeks in FY21 Strong revenue growth of 39%: • Organic and inorganic as business expands its operating model and geographic presence (despite COVID disruptions) • Freight recovery reclassified4 to revenue (current and comparative periods) A$m: Continuing O
Slide 26: Financial Position
FINANCIAL POSITION Balance sheet provides platform for growth Inventory $195.9m A$m 27 Jun 21 26 Dec 21 3 Jul 22 Cash and cash equivalents 71.5 38.7 10 • 48% of inventory available for sale, 52% secured for release over future periods Inventories 67.0 125.7 195.9 Other 12.5 22.8 15.9 • Supports grow
Slide 27: Cash Flow
CASH FLOW Strategic investment in inventory Strong Cash conversion from underlying trade2 of $37.0m • Non operating items3 of ($6.7m) A$m: Continuing Operations FY20 FY21 FY22 Working Capital increase of $90.3m with the investment in Inventory Receipts from customers 214.2 288.8 401.8 • Investment i
Slide 28: FY23 Update and Outlook
6. FY23 UPDATE AND OUTLOOK city chic collective
Slide 29: FY23 Current Trade Update
FY23 CURRENT TRADE UPDATE • Trading in the first seven weeks of FY23 has been broadly in line with the prior corresponding period, with a return to positive momentum through August. • Regional and Channel performance for the YTD1 is outlined below: - AU stores are trading above expectations and ahea
Slide 30: FY23 Outlook
FY23 OUTLOOK • Ongoing profitable growth • Notwithstanding global uncertainty, growth to be underpinned by geographic, channel and lifestyle diversification • Key building blocks for FY23: - Partners annualise and grow globally - Stores open for the 13.4% of closed days - Evans annualising logistics
Slide 31: Appendix
7. APPENDIX city chic collective
Slide 32: Key Initiatives to Lead a World of Curves
KEY INITIATIVES TO LEAD A WORLD OF CURVES MARKET ENTRY FOR MARKET SHARE EXPANSION MARKET SHARE EXPANSION ‘CONSERVATIVE LIFESTYLE’ IN MARKET ENTRY IN EUROPE IN THE AMERICAS IN THE UK ANZ • Significant opportunity in US$49bn1 • Significant opportunity in US$7bn1 • Significant opportunity in US$2bn • S
Slide 33: Ethical Trade Update
ETHICAL TRADE UPDATE We welcome the new opportunities and recognise the challenges that come with the growth of brands and the diversification of our supply chain. Our goal is to work together with all our global partners for a more positive impact to people and planet. Right of every worker in our
Slide 34: Global Plus-Size Landscape
GLOBAL PLUS-SIZE LANDSCAPE Currently address US$100bn+ of the US$180bn1 total global plus size market Entry into US$45bn European market in FY22 with Navabi acquisition2 GROWTH • Plus-size market forecast to grow c.7%1 annually ANZ, $2bn • Average annual spend in plus-size is currently materially le
Slide 35: Store Network
STORE NETWORK • 90 own stores as at period end • Portfolio rotation to newer fit-outs in FY22: 12 new stores opened, 11 closures; 4 relocations to a larger format site; 8 relocations/refits moving stores with ‘old’ look to the ‘Gold’ design look • 12 larger format flagship stores with average footpr
Slide 36: Impact of AASB16
IMPACT OF AASB16 AASB16 adopted from 1 July 2019 Profit & Loss (Continuing Operations) FY22 Post AASB 16 FY22 Pre Underlying FY22 Underlying FY21 Underlying Variance Variance A$ m illion AASB16 Im pact AASB16 Adj1 Pre AASB161 Pre AASB161 $ % Sales 369.2 - 369.2 - 369.2 265.6 103.6 39.0% Costs of Inv
Slide 37: Earnings Reconciliation
EARNINGS RECONCILIATION Continuing A$ million FY21 FY22 Underlying EBITDA 42.4 47.1 Depreciation & amortisation (6.4) (7.0) Underlying EBIT 36.0 40.1 1 Net Interest expense (0.4) (0.6) Underlying NPBT 35.6 39.5 Taxation on Underlying NPBT (10.7) (11.0) Underlying NPAT 24.9 28.5 2 Transaction-related
Slide 38: 53rd Week & Delivery Fee Reclassification
53RD WEEK & DELIVERY FEE RECLASSIFICATION Impact of Week 53 FY22 is a 53-week period from 28 June 2021 to 3 July 2022 (inclusive). FY21 is a 52-week period from 29 June 2020 to 27 June 2021 (inclusive) The FY22 revenue and financial information in this presentation reflects the group’s statutory res
Slide 39: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER This presentation has been prepared by City Chic Collective Limited (the “Company”). It contains general background information about the Company’s activities and does not purport to be complete. It should be read in conjunction with the Company’s other periodic and con