City Chic Collective Limited · ASX:CCX
City Chic Collective — Investor Presentation (June 2024)
42 slides from City Chic Collective's investor presentation, Jun 21, 2024
Slide 1: Sale of Avenue, Business Transformation & Equity Raising
Slide 2: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER The following disclaimer applies to this investor presentation prepared by City Chic Collective Limited ACN 057 569 169 (City Chic) and is dated 18 June 2024 (Presentation), This Presentation has been prepared in relation to a proposed institutional placement of new ful
Slide 3: Important Notice & Disclaimer (Cont.)
IMPORTANT NOTICE & DISCLAIMER (CONT.) Forward-looking statements and future performance This Presentation contains forwarc-looking statements and comments about future events, including about the plans, strategies and objectives of City Chie's management, City Chic’s expectations about the performan
Slide 4: Business transformation through divestment of Avenue to focus on the core CCX customer base
Business transformation through divestment of 1 Avenue to focus on the core CCX customer base through a single brand in both ANZ and US Rebased business unlocking additional cost 2 savings with positive sell price and gross margin momentum leading into FY25F Amended debt facility, equity raise and a
Slide 5: Table of Contents
TABLE OF CONTENTS 1 Business Transformation 2 Financial Overview 3 Growth Strategy 4 Equity Raising Summary 5 Key Risks 6 Foreign Jurisdictions & Summary Underwriting Terms 7 AASBI16 Summary & Financials Basis of Preparation Phil Ryan, CEO Peter McClelland, CFO
Slide 6: Executive Summary
EXECUTIVE SUMMARY Business transformation initiatives to accelerate City Chic’s strategy: Sale of Avenue, further material right- sizing and simplification of the cost base plus balance sheet enhancements Avenue Divestment . Business Transformation . Balance Sheet : & Capital . Structure : Trading U
Slide 7: Business Transformation
Slide 8: Avenue Divestment Summary
AVENUE DIVESTMENT SUMMARY The divestment of Avenue allows City Chic to focus on its core customer in ANZ and the US + City Chic has agreed to divest Avenue assets to FullBeauty Brands (FBB) for total consideration of US$12m (-A$18m), to be paid on completion in all cash!. City Chic will continue tra
Slide 9: Cost Reduction Initiatives
COST REDUCTION INITIATIVES 2 Total planned cost savings of $20.3m with $8.8m! in savings already achieved in FY24F with a further $11.5m to be achieved in FY25F? simplifying the business for improved operating leverage Incremental Realised Expected Commentary Savings! Savings? Lower operating * Busi
Slide 10: Balance Sheet & Capital Structure
BALANCE SHEET & CAPITAL STRUCTURE 3 Equity raising combined with key initiatives to strengthen the balance sheet, creating a resilient platform to deliver sustainable growth Debt Refinance’ vy Strengthens balance sheet to support a return to profitability and cash + flow generation DivestmentotAvent
Slide 11: Financial Overview
Slide 12: FY24F Trading Update
FY24F TRADING UPDATE Continued challenging trading conditions, with signs of positivity starting to show Ne (trading conditions have remained challenging with forecast \ Group sales for FY24F! down ~30% compared to FY23 PCP to $187 million ANZ Stores have stabilised with rolling LTM sales broadly fl
Slide 13: Forecast FY24 Statutory & Pro Forma P&L
FORECAST FY24 STATUTORY & PRO FORMA P&L! Forecasted pro forma EBITDA (post-AASBI16)* of $(9.3)m excluding the impact of Avenue and other one-off items Stat PAL View ea Pro Forma 1 2 3 Gross up of Removal of ‘avenue ‘Avenue Avenue _ Other Rest Stat. P&L Trading Stat P&S = Trading impairment Costs & —
Slide 14: Run Rate Cost Savings in the Rebased Business
RUN RATE COST SAVINGS IN THE REBASED BUSINESS Incremental cost savings of $11.5m are expected to be achieved in FY25 (of which $6.4m have already been implemented'), and have been illustrated below showing the impact on the FY24F CODB if the initiatives had been implemented from 1 July 2023 Cost of
Slide 15: Current Trading Metrics (Excluding Avenue)
CURRENT TRADING METRICS (EXCLUDING AVENUE) Strong momentum in key business metrics underpinning future growth Group ASP (exc. Avenue) Commentary - ASP now exceeding historical levels $80 Monthly Rolling 6 Months + ASP increasing with product mix and move back to elevated essentials and new lifestyle
Slide 16: Current Customer Metrics (Excluding Avenue)
CURRENT CUSTOMER METRICS (EXCLUDING AVENUE) Growth in high value customers and returning customers in the last 10 weeks (to 26 May 2024) is an early indication of the top-of-funnel marketing strategy and product mix working Proportion of Units Sold Jun-20 Jun-21 Jun-22 Jun-23 May-24 There has been a
Slide 17: Top Ranked Most Loved Retailers
TOP RANKED MOST LOV=D R= TAIL=RS The Iconic | ! | I —/ = CITY CHIC HAS BEEN eh gr) RANKED IN THE TOP 4 MOST AS ' "| LOVED RETAILERS OUT OF nee serous mee 8°" © 100 OF AUSTRALIA'S BEST _ FereterNen Dusk RETAILERS BY NPS SCORE NPS SCORE: 63 NPS SCORE: 62 Source: Power Retail - Most Loved Retailers 202
Slide 18: Growth Strategy
Slide 19: A Business Dedicated to Her
A BUSINESS DEDICATED TO HER Streamlined business with a return to a single brand focus and a strong omnichannel presence Leveraging a long history of knowledge and experience, in an attractive market segment, under the high value City Chic brand. A customer research led brand refresh through product
Slide 20: Growth Strategy - Focus on Core
GROWTH STRATEGY - FOCUS ON CORE The transformation initiatives accelerate City Chic's strategy Amplify our focus on Her, forging genuine emotional connections Increase ASP retention and profitability Focused marketing investment © avenue Divestment - provides a dedicated focus on the core City Chic
Slide 21: Outlook
OUTLOOK City Chic is focussed on delivering profitable and sustainable long-term growth \ (‘Financial Outlook > Additional Commentary Trading conditions expected to remain uncertain Expecting the higher ASP and gross margin trends from H2 FY24F to continue Marketing focus on brand engagement in ANZ
Slide 22: Investment Highlights
INVESTMENT HIGHLIGHTS Returning to a proven model with a dedicated focus on Her and a strong platform for profitability city chic collective 1 Refocus on growing the core business, targeting a higher value customer broadening reach through brand refresh and product and marketing initiatives Clean an
Slide 23: Equity Raising Summary
Slide 24: Details of the Offer
DETAILS OF THE OFFER + A$23.0m equity raising (Equity Raising) consisting of: - An underwritten institutional placement (Placement) to raise approximately A$5.4m - A1 for 2.04 pro-rata accelerated non-renounceable entitlement offer (Entitlement Offer) to existing shareholders to raise approximately
Slide 25: Sources and Uses of Funds and Debt Funding
SOURCES AND USES OF FUNDS AND DEBT FUNDING Providing a solid foundation through strengthening the balance sheet Sources and Uses of Funds Sources Equity Raising (underwritten component)! Divestment of Avenue® Total Source of Funds Uses Repayment of existing NAB Facility and Associated Fees Working C
Slide 26: Offer Timetable
OFFER TIMETABLE Event Date! Equity Raising announced and investor presentation lodged to the ASX Friday, 21 June 2024 Institutional Entitlement Offer and Placement opens Pre-Market, Friday, 21 June 2024 Institutional Entitlement Offer and Placement closes 5.00pm. Friday 21 June 2024 Results of Insti
Slide 27: Dec-23 Pro Forma Balance Sheet
DEC-23 PRO FORMA BALANCE SHEET! Balance shest Pro Forma Adjustments Pro Forma Commentary Dec-23 + Adj #1- Net Equity Raise - This relates to the underwritten component of the proposed " 2 S ee eauity raise of $17.5m, net of expected transaction costs amounting to $2.lm asm Neale Sale of Avenue Net d
Slide 28: Key Risks
Slide 29: Key Risks
KEY RISKS RISK FACTORS There are a number of factors, both specific to City Chic and of a general nature, which may affect the future operating and financial performance of City Chic, its products, the industry in which it operates and the outcome of an investment in City Chic. There canbe no guaran
Slide 30: Key Risks (Cont.)
KEY RISKS (CONT.) Changes in technology Online channel risks Services provided by third party payment providers Landlord relationships and store sites Competition risk Warranty risk and product liability exposure Insurance risk Intellectual property and patent risk Maintenance of reputation Key pers
Slide 31: Key Risks (Cont.)
KEY RISKS (CONT.) Regulatory and compliance risk Completion risk for Avenue Sovereign risk Exchange rates Changes in interest rates Dilution risk Funding risk Underwriting risk There can be no guarantee that City Chic will be able to comply with the regulatory requirements imposed on it (whether in
Slide 32: Key Risks (Cont.)
KEY RISKS (CONT.) GENERAL RISK FACTORS Forecast risk Share market Dependence on general economic conditions Tax risk Litigation risk Legislative and regulatory changes Accounting standards Speculative investment city chic co The forecast has been developed based on a number of key assumptions which
Slide 33: Foreign Jurisdictions & Summary of Underwriting Terms
Slide 34: Foreign Selling Jurisdictions
FOREIGN SELLING JURISDICTIONS International Offer Restrictions This document does not constitute an offer of new fully paid ordinary shares in City Chic (“New Shares”) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Sh
Slide 35: Foreign Selling Jurisdictions (Cont)
FOREIGN SELLING JURISDICTIONS (CONT) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Ac
Slide 36: Summary of Underwriting Terms
SUMMARY OF UNDERWRITING TERMS City Chic has entered into an underwriting agreement with Canaccord Genuity (Australia) Limited (Underwriter), pursuant to which the Underwriter has been appointed as bookrunner, lead manager and underwriter to the Entitlement Offer and Placement (together, Offer) (Unde
Slide 37: Summary of Underwriting Terms (Cont'd)
SUMMARY OF UNDERWRITING TERMS (CONT’D) * any eventin the Offer timetable is delayed (unless a variation to the timetable is consented to by the Underwriter in accordance with the agreement); * City Chic publicly states or notifies the underwriter that it does not intend to proceed with the Debt Refi
Slide 38: AASB-16 Summary & Financials Basis of Preparation
Slide 39: Impact of AASB16
IMPACT OF AASBI6 Gross up of Avenue F "i Stat P&L Incl. Pro Forma AUD in $m Stat. P&L Trading 4 7 (iscon. Ops) Discon Ops Adjusted EBITDA (post AASBI6) (20.4) (5.6) (26.0) (9.3) AASBI6 adjustments (12.7) - (12.7) (12.7) EBITDA (pre AASBI16) (33.0) (5.6) (38.6) (22.0) city chic collective 1. AASBI6 a
Slide 40: Basis of Preparation & Key Assumptions - Pro Forma
BASIS OF PREPARATION & KEY ASSUMPTIONS - PRO FORMA PROFIT & LOSS + City Chic prepares its financial statements in accordance with Australian Accounting Standards. The accounting policies upon which the pro-forma profit and loss statement and balance sheet has been prepared are set out in the City Ch
Slide 41: Basis of Preparation & Key Assumptions - Balance Sheet
BASIS OF PREPARATION & KEY ASSUMPTIONS - BALANCE SHEET City Chic prepares its financial statements in accordance with Australian Accounting Standards. The accounting policies upon which the pro-forma profit and loss statement and balance sheet has been prepared are set out in the City Chic Collectiv
Slide 42: Thank you for your attendance and participation
Thank you for your attendance and participation www.citychiccollective.com.au
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