Slide 1: Kathmandu First Half Year Results FY12
KATHMANDU FIRST HALF For personal use only YEAR RESULTS FY12
Slide 2: Contents
Contents For personal use only • Results Overview • Key Line Items • Country Results • Cash Flow, Balance Sheet, Dividend • Growth Strategy Update • FY12 Outlook • Questions 2
Slide 3: Results Overview
For personal use only Results Overview
Slide 4: Results Overview: Key Points
Results Overview: Key Points For personal use only • Sales growth $19.6m (15.4% above last year); • Same store sales growth 8.0% (7.8% at constant exchange rates); • Gross margin 62.7%. Within target range, down 200 bps on last year; • First half operating expenses increased by 470bps as a % of sale
Slide 5: Results Overview: Year-On-Year
Results Overview: Year-On-Year For personal use only Results Overview NZ $m 1H FY12 1H FY11 DIFF $ DIFF % Sales 146.7 127.1 19.6 15.4% Gross Profit 92.0 82.2 9.8 11.9% Gross Profit Margin 62.7% 64.7% Operating expenses*1 (75.0) (59.0) (16.0) 27.1% EBITDA 17.0 23.2 (6.2) (26.7)% EBITDA margin % 11.6%
Slide 6: Key Line Items
For personal use only Key Line Items
Slide 7: Sales
Sales For personal use only SALES: +15.4% to $146.7m SALES*1 • Sales growth year on year:*2 Australia New Zealand United Kingdom AU 18.1%, NZ 13.7%, UK (13.6)%. $146.7m • At constant exchange rates sales $127.1m $3.7m 2.5% growth $19.4m / 15.2%. $4.6m $106.6m 3.6% $54.7 $5.1m 37.3% 4.8% $48.1 37.8%
Slide 8: Same Store Sales Growth
Same Store Sales Growth For personal use only AU NZ GROUP 14.1% 12.4% 12.7% 13.7% 12.1% 9.9% 8.0% 6.4% 6.5% 2.4% 2.0% -4.0% 1H FY09 1H FY10 1H FY11 1H FY12 • Same store sales growth 8.0% (7.8% on constant currency basis); • NZ/AU movements similar to the retail discretionary apparel spend trends in
Slide 9: Gross Profit Margin %
Gross Profit Margin % For personal use only AU NZ UK GROUP 68.1% 65.9% 66.1% 64.7% 63.2% 62.7% 62.4% 61.3% 59.9% 60.4% 58.9% 59.7% 57.9% 57.7% 58.4% 55.6% 1H FY09 1H FY10 1H FY11 1H FY12 • Higher proportion of clearance and SHARE OF BUSINESS (GROSS PROFIT $) discount activity; AU NZ UK 63.4% • Great
Slide 10: Cost of Doing Business
Cost of Doing Business For personal use only OPERATING EXPENSES: +27.1% to $75.0m • Higher operating expenses as a % NZ $m 1H FY12 1H FY11 DIFF $ DIFF % of sales because of: ◦ Tactical advertising spend; Rent 19.1 15.3 3.8 24.8% ◦ New brand rollout and associated old % of Sales 13.0% 12.0% asset wri
Slide 11: Cost of Doing Business
Cost of Doing Business For personal use only OPERATING EXPENSES – Pattern of Half Year / Full Year splits 1H 2H Full Yr 49.5% 51.1% 44.7% 46.4% 39.2% 41.8% 41.0% 42.2% 37.0% 38.2% FY09 FY10 FY11 FY12 • In 1H: ◦ Operating expenses are always a higher % of sales than in 2H; ◦ Indicatively opex is 45-5
Slide 12: Earnings
Earnings For personal use only EBITDA $17.0m, -26.7% EBIT*1 $12.7m, -36.2% NPAT $6.0m, -42.9% EBITDA $m*2a EBIT $m*2a 23.2 19.9 17.6 17.0 15.1 12.7 10.7 8.3 1H FY09 1H FY10 1H FY11 1H FY12 1H FY09 1H FY10 1H FY11 1H FY12 12.8% 16.5% 18.3% 11.6% 9.9% 14.2% 15.7% 8.7% EBITDA margin % EBIT margin % NPA
Slide 13: Country Results
For personal use only Country Results
Slide 14: Australia
Australia For personal use only SALES: A$67.3m, +18.1% Same store sales growth: +6.4% EBITDA (trading result): A$6.1m, - 41.9% • 10 New Stores opened: A $m 1H FY12 1H FY11 DIFF ◦ 8 in 2H FY11: Whitford City (WA), Belconnen (Canberra), Southport, Sales 67.3 57.0 18.1% Toowoomba, Orange, Cairns, Wagga
Slide 15: New Zealand
New Zealand For personal use only SALES: NZ$54.7m, +13.7% Same store sales growth: +12.7% EBITDA (trading result): NZ$10.8m, -3.6% • 6 new stores opened: ◦ 3 in 2H FY11: Papanui, Whakatane, and Ashburton; NZ $m 1H FY12 1H FY11 DIFF ◦ 3 in 1H FY12: Coastlands, The Palms, Sales 54.7 48.1 13.7% and Wil
Slide 16: United Kingdom
United Kingdom For personal use only SALES: UK£1.9m, -13.6% Same store sales growth: -13.6% EBITDA (trading result): UK£(0.5)m, -25.0% UK £m 1H FY12 1H FY11 DIFF • Total operating expenses (excl. depreciation): ◦ 1H FY12 81.9% of sales; Sales 1.9 2.2 (13.6)% ◦ 1H FY11 76.6% of sales. Same store sale
Slide 17: Cash Flow, Balance Sheet, Dividend
For personal use only Cash Flow Balance Sheet Dividend
Slide 18: Cash Flow
Cash Flow For personal use only • Capital expenditure NZ$10.3m NZ $m 1H FY12 1H FY11 vs 1H FY11 $4.1m: EBITDA 17.0 23.2 ◦ New stores capex $7.4m (including refurbishments, relocations and expansions), 1H FY11 $2.8m; Change in working capital (28.6) (20.0) ◦ Maintenance $1.3m, unchanged from 1H FY11
Slide 19: Balance Sheet
Balance Sheet For personal use only • Inventories +38.4% (+21.4% per store) 0.8 NZ $m 1H FY12 1H FY11 $0.674 $0.571 $0.555 0.6 Inventories 76.8 55.5 $0.432 0.4 Property, plant and equipment 37.9 29.5 0.2 Intangible assets 248.2 247.2 0 1H FY09 1H FY10 1H FY11 1H FY12 Other assets 6.0 5.7 • Inventory
Slide 20: Foreign Currency
Foreign Currency For personal use only FORWARD HEDGING POSITION 2H FY12 1H FY13*1 • Effective US$ hedge rates 1H FY12: ◦ A$/US$ 0.938 1H FY12 vs 0.843 1H FY11; A$ / US$ % covered 90.1% 90%+ ◦ NZ$/US$ 0.736 1H FY12 vs 0.676 1H FY11. Effective Rate 1.008 0.996 • Forward Hedging Position: NZ$ / US$ % c
Slide 21: Dividend
Dividend For personal use only • NZ 3.0 cents per share; • Full year pay-out ratio is intended to remain within expected 50 to 60% of NPAT; • AU dividend fully franked, NZ dividend fully imputed; and • Record date 08 June 2012, payment date 19 June 2012. 21
Slide 22: Growth Strategy Update
For personal use only Growth Strategy Update
Slide 23: Growth Strategy Update
Growth Strategy Update For personal use only Kathmandu core growth paths continue to provide varied strategic choices GROWTH STRATEGY UPDATE • New stores continue to perform to expectation, and still targeting up to 15 stores per annum • 150 stores targeted for New store • Goal remains to optimise o
Slide 24: Growth Strategy Update (continued)
Growth Strategy Update (continued) For personal use only Kathmandu core growth paths continue to provide varied strategic choices GROWTH STRATEGY UPDATE • Increase sales through product range growth • Inventory investment targeted at key performing product lines Enhance • Ongoing investment in resea
Slide 25: FY12 Outlook
For personal use only FY12 Outlook
Slide 26: FY12 Outlook
FY12 Outlook For personal use only Kathmandu • Targeting to open a minimum of 6 further permanent new stores by year end. Sites at Tamworth, Moorabbin, Shellharbour and The Rocks are at various stages of completion; • Store relocations and upgrades: two major relocations in 2H FY12 – Newmarket and P
Slide 27: Summary
Summary For personal use only • Maintaining / growing market share a primary focus in this environment; • Despite the lower first half earnings, the Board and Management remain confident in the Kathmandu business model and on-going growth strategies; • Two large promotional campaigns still to come w
Slide 28: Appendix – Reconciliation of Country Trading Results
Appendix – Reconciliation of Country Trading Results For personal use only Australia (NZ $m) 1H FY12 1H FY11 New Zealand (NZ $m) 1H FY12 1H FY11 Segment profit 3.7 10.9 Segment profit 8.8 9.6 Net interest 1.1 1.1 Net interest 0.8 0.9 Facility fees 0.5 0.5 Facility fees 0.6 0.5 Depreciation 2.7 2.1 D
Slide 29: Questions
For personal use only Questions