Capri Holdings Limited · NYSE:CPRI
Capri — Michael Kors Holdings — Deutsche Bank dbAccess Global Consumer Conference 2017
76 slides from Capri's conference presentation, Jun 14, 2017
Slide 1: Michael Kors
MICHAEL KORS JOHN IDOL, CHAIRMAN & CEO TOM EDWARDS, CFO & COO
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict
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Slide 4: Jet Set Lifestyle
UNIQUE BRAND POSITIONING JET SET LIFESTYLE A FAST-PACED, 24/7 LIFE FILLED WITH GLAMOUR, TRAVEL AND ADVENTURE.
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Slide 10: The Michael Kors Brands
THE MICHAEL KORS BRANDS n 9 x —12 ue x 9 =
Slide 11: A Glamorous, Sophisticated Collection for the Consummate Luxury Jet Setter
A GLAMOROUS, SOPHISTICATED COLLECTION FOR THE CONSUMMATE LUXURY JET SETTER.
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Slide 15: She Is Subtly Sexy, Impossibly Polished
SHE IS SUBTLY SEXY, IMPOSSIBLY POLISHED. AND ABOVE ALL, GLAMOROUS 24/7.
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Slide 19: He Is Confident, Connected, Adventurous
HE IS CONFIDENT, CONNECTED, ADVENTUROUS, AND HAS EFFORTLESS STYLE WITH A MODERN EDGE.
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Slide 23: What Makes Michael Kors Great Today
WHAT MAKES MICHAEL KORS GREAT TODAY
Slide 24: Strength 1: Powerful Iconic Brand
STRENGTH 1 POWERFUL ICONIC BRAND WITH DEEP ROOTS IN FASHION
Slide 25: Strength 2: Product & Trend Leadership
STRENGTH 2 PRODUCT & TREND LEADERSHIP FOOTWEAR READY TO WEAR ACCESSORIES MENS MENS WATCHES & SMARTWATCHES SPORTSWEAR LEATHER GOODS
Slide 26: Strength 3: Global Store Network
STRENGTH 3 GLOBAL STORE FLEET 960 GLOBAL STORE NETWORK
Slide 27: Strength 4: Digital Innovation
STRENGTH 4 DIGITAL INNOVATION
Slide 28: Strength 5: Strong Balance Sheet & Cash Generation
STRENGTH 5 STRONG BALANCE SHEET & CASH GENERATION
Slide 29: Total MKHL Revenue
TOTAL MKHL REVENUE USD in Millions $4,712 $4,371 $4,494 $3,311 $2,182 $1,302 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A
Slide 30: Total Americas Revenue
TOTAL AMERICAS REVENUE USD in Millions Licensing Wholesale Retail $3,419 $3,507 100 99 $3,141 $2,772 86 117 1,629 1,663 1,341 $1,939 87 1,336 $1,183 913 65 545 1,656 1,779 1,714 1,319 939 573 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A
Slide 31: Total EMEA Revenue
USD in Millions TOTAL EMEA REVENUE Licensing Wholesale Retail $990 $944 $885 74 60 72 406 376 $500 401 23 $221 242 - 510 508 $109 119 412 - 65 236 43 102 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A
Slide 32: Total APAC Revenue
TOTAL APAC REVENUE USD in Millions China $409 Asia $212 $215 $197 $68 $39 $10 $22 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A
Slide 33: Runway 2020
RUNWAY 2020 MICHAEL KORS’ GLOBAL COMPANY- WIDE VISION FOR THE FUTURE, ELEVATING THE BRAND FOR THE MODERN DAY JET SETTER
Slide 34: Runway2020 Vision
RUNWAY2020 VISION PRODUCT & DESIGN MICHAEL KORS FASHION LEADERSHIP PRODUCT INNOVATION REBALANCE PRODUCT MIX PRODUCT PERSONALIZATION BRAND COMMUNICATION MICHAEL’S VOICE RUNWAY LEADERSHIP JET SET LIFESTYLE STYLE EXPERIENCE CUSTOMER EXPERIENCE DIGITAL FLAGSHIPS FLAGSHIP MODEL NEW FLEET CONCEPT LUXURY S
Slide 35: Runway2020 Product
RUNWAY2020 PRODUCT MICHAEL KORS FASHION LEADERSHIP PRODUCT INNOVATION & NOVELTY DIVERSIFY PRODUCT MIX BANCROFT COLLECTION
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Slide 37: Penetration of New Collections in Accessories to Grow 3X
BY NEXT YEAR, PENETRATION OF NEW COLLECTIONS IN ACCESSORIES TO GROW 3X 70% 65% 60% 50% 40% 37% 30% 20% 20% 10% 0% SPRING 2017 SEASON FALL 2017 SEASON SPRING 2018 SEASON
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Slide 40: Fashion & Technology Are Merging
FASHION & TECHNOLOGY ARE MERGING
Slide 41: Introducing Sofie
INTRODUCING SOFIE
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Slide 43: Introducing Grayson
introducin GRAYSO
Slide 44: Grayson (Calibre) Video
GRAYSON (CALIBRE) VIDEO
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Slide 46: Diversify the Product Mix
DIVERSIFY THE PRODUCT MIX FY17 FY20 Watches Other Watches Other Men's 5% 2% 4% 1% 3% Men's Footwear 8% 11% Footwear Women's RTW 13% 10% Handbags & Women's RTW Handbags & SLG's 12% SLG's 70% 62% 46
Slide 47: Runway2020 Brand Communication
RUNWAY2020 BRAND COMMUNICATION MICHAEL’S VOICE 360 MARKETING STRATEGY DIGITAL FLAGSHIPS
Slide 48: Michael Kors Is a Digital Marketing Leader
MICHAEL KORS IS A DIGITAL 360 MARKETING LEADER FLAGSHIP NATIONAL ADVERTISING IN-STORE EXPERIENCE BUZZ CUSTOMER-CENTRIC CATALOG VISUAL CONTINUOUSLY ENGAGED MERCHANDISING ACROSS ALL CHANNELS EMAILS TRAFFIC REPEAT OUTDOOR SOCIAL MEDIA DIGITAL BANNERS PAID SEARCH GLOBAL PR PURCHASE VIPS GLOBAL EVENTS
Slide 49: Michael Kors Is Red Carpet Glamour
49 49 MICHAEL KORS IS RED CARPET GLAMOUR KATE HUDSON MING XI ROSIE HUNTINGTON MIRANDA KERR YANG MI WHITELEY
Slide 50: Michael Kors Is A-List
MICHAEL KORS IS A-LIST CATHERINE OLIVIA WILDE HEIDI KLUM VIOLA DAVIS LILY ALDRIDGE MICHELLE OBAMA DUCHESS OF JENNIFER LOPEZ CAMBRIDGE
Slide 51: Marketing Celebrities
MARKETING CELEBRITIES CHINA TOP INFLUENCERS/CELEBRITIES (WEIBO/WECHAT) YANG MI, 72M FOLLOWERS
Slide 52: Strong Global Brand Awareness
STRONG GLOBAL BRAND AWARENESS US 92% CANADA 87% UK 86% GERMANY 79% SOUTH KOREA 68% FRANCE 58% CHINA 54% JAPAN 46% *2016 BRAND AWARENESS STUDY
Slide 53: Social Leadership
SOCIAL LEADERSHIP With a global audience1 of 35.8 million ENGAGED fans (+25% vs. LY) LINE JAPANESE SOCIAL PLATFORM 17M 3.5M 10M 604K 52K 3.7M
Slide 54: Runway2020 Customer Experience
RUNWAY2020 CUSTOMER EXPERIENCE ELEVATE FLAGSHIPS RIGHT SIZE & FLEET OPTIMIZATION RENOVATE STORES GLOBALLY
Slide 55: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON
Slide 56: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON
Slide 57: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON di |
Slide 58: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON
Slide 59: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON _— = — a
Slide 60: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON
Slide 61: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON LJ cy
Slide 62: Regent Street, London
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Slide 63: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON
Slide 64: Michael Kors Regent Street, London
MICHAEL KORS REGENT STREET, LONDON
Slide 65: Windows: Madison Avenue Spring Collection, New York
MADISON AVENUE SPRING 17 COLLECTION, NEW YORK WINDOWS
Slide 66: Madison Avenue – Mother's Day, New York
MADISON AVENUE – MOTHER’S DAY, NEW YORK
Slide 67: Loyalty, Styling & Service
LOYALTY, STYLING & SERVICE • L O YALT Y P R O G R AM : K O R S V I P • FAS H I O N / S T Y L E • I N S I D E R AC C E S S • SERVICE • K O R S V I P AP P • S T Y L E C H AT • B O O K AP P O I N T M E N T S • V I P S E R V I C E S & R E WAR D S • L U X U RY S E R V I C E I N S T O R E • S AM E D AY D
Slide 68: Store Fleet Optimization
STORE FLEET OPTIMIZATION • MODERNIZE 100 STORES • RIGHT SIZE GLOBAL FLEET • CLOSE 100-125 STORES OVER TWO YEAR PERIOD • INCREASE PROFITABILITY; ULTIMATELY ANNUALIZED PICK UP OF $60M 68
Slide 69: Wholesale Strategy
WHOLESALE STRATEGY • ENHANCE THE CONSUMER EXPERIENCE THROUGH A MORE ELEVATED PRODUCT AND SHOP DESIGN • RENOVATE FLAGSHIP SHOPS WITH NEW STORE DESIGN CONCEPT
Slide 70: SOGO, Hong Kong
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Slide 71: Michael Kors SOGO, Hong Kong
MICHAEL KORS SOGO, HONG KONG
Slide 72: Runway 2020 Financial Plan
RUNWAY 2020 FINANCIAL PLAN
Slide 73: Runway2020 Expected to Drive Improved Financial Performance
RUNWAY2020 EXPECTED TO DRIVE IMPROVED FINANCIAL PERFORMANCE • PRODUCT & DESIGN RETURN TO REVENUE GROWTH • MICHAEL KORS FASHION LEADERSHIP • PRODUCT INNOVATION AND EXPANSION • PRODUCT INNOVATION • STABILIZE THE BASE • REBALANCE PRODUCT MIX • GLOBAL EXPANSION • CUSTOMIZATION • COLLABORATIONS • BRAND C
Slide 74: Financial Outlook
FINANCIAL OUTLOOK FY 2018 FY 2019 FY 2020 REVENUE APPROXIMATELY $4.25B LOW SINGLE DIGIT GROWTH LOW SINGLE DIGIT GROWTH COMPARABLE HIGH SINGLE DIGIT DECLINE EVEN POSITIVE SALES GROSS MARGIN APPROXIMATELY 60% STABLE IMPROVING OPERATING EXPENSE APPROXIMATELY 44% STABLE STABLE PERCENT* OPERATING APPROXI
Slide 75: Efficient Capital Deployment
EFFICIENT CAPITAL DEPLOYMENT BUILD ON OUR STRONG FINANCIAL FOUNDATION: • STRONG FREE CASH FLOW • STRONG BALANCE SHEET CAPITAL ALLOCATION PRIORITIES: • INVEST IN THE BUSINESS • RETURN EXCESS CASH TO SHAREHOLDERS • OPPORTUNISTIC M&A
Slide 76: Q&A
Q&A
Michael Kors Holdings — Deutsche Bank dbAccess Global Consumer Conference 2017 on 6ix