Burberry Group Plc · LSE:BRBY
Burberry — FY2023 Earnings Presentation
35 slides from Burberry's earnings presentation, May 18, 2023
Slide 1: Preliminary Results 18 May 2023
PRELIMINARY RESULTS 18 MAY 2023 1 AGENDA Jonathan Akeroyd Chief Executive Officer 2
Slide 2: Agenda and Opening Remarks
AGENDA Opening Remarks Financial Results Business Update Q&A 3 OPENING REMARKS • Strong full-year performance, with positive revenue momentum in Q4 • Clear ambition and strategy for Burberry’s next phase, and significant progress on plan • Confirming outlook for FY24 and £4bn revenue ambition in med
Slide 3: Summary of FY23 Performance
FINANCIAL RESULTS Ian Brimicombe Interim Chief Financial Officer 5 SUMMARY OF FY23 PERFORMANCE • FY23 retail comparable sales growth +7%, +14% excluding Mainland China • Total revenue growth +5% at CER and +10% reported • Adjusted operating profit margin +60bps to 19.0% at CER, 20.5% reported • Adju
Slide 4: FY23 Income Statement
FY23 | INCOME STATEMENT Period ended FY23 FY22 Reported change CER change £m £m % % Revenue 3,094 2,826 +10% 5% Gross profit 2,182 1,995 9% 4% Gross margin % 70.5% 70.6% (10bp) (80bp) ADJUSTED Adjusted operating profit 634 523 21% 8% Adjusted operating profit margin 20.5% 18.5% +200bp +60bp Adjusted
Slide 5: FY23 Retail Comp Sales Growth and Regional Performance
FY23 | RETAIL COMP SALES GROWTH, QUARTERLY REVENUE PERFORMANCE GROUP COMP STORE SALES BY QUARTER COMP STORE SALES EX MAINLAND CHINA BY QUARTER 16% 16% 17% 15% 14% 11% 11% Q1 Q2 Q3 Q4 FY23 7% MAINLAND CHINA COMP STORE SALES BY QUARTER 13% 1% 1% -1% -11% Q1 Q2 Q3 Q4 FY23 -23% -35% Q1 Q2 Q3 Q4 FY23 9 F
Slide 6: FY23 Adjusted Operating Profit Margin and Free Cash Flow
FY23 | ADJUSTED OPERATING PROFIT MARGIN +21% £634m (£25m) £78m (£32m) £556m £99m £523m (£9m) £514m Margin at Reported Margin Margin CER Margin 18.5% 18.4% 19.0% 20.5% Adjusted 53rd week Adjusted Underlying Gross Opex Adjusted FX Adjusted operating operating trading margin rate operating operating pr
Slide 7: Strong Cash Position with £400m Share Buyback Completed; FY24 Outlook
STRONG CASH POSITION WITH £400M SHARE BUYBACK COMPLETED £393m (£179m) £572m (£203m) (£6m) £1,177m (£400m) £298m £961m £298m £879m £663m Apr-22 FCF Capex Dividends Inorganic Buybacks Apr-23 Pre Capex Investments Net debt/ Net debt/ Adjusted EBITDA Adjusted EBITDA 0.2x CAPITAL ALLOCATION FRAMEWORK APP
Slide 8: Business Update: Realising our potential as The Modern British Luxury Brand
BUSINESS UPDATE Jonathan Akeroyd Chief Executive Officer 15 Realisingour potential as The Modern British Luxury Brand 16
Slide 9: Our Plan: Modern British Luxury
OUR PLAN MODERN BRITISH LUXURY Harness the power Bring all product categories Strengthen distribution of our brand to full potential OPERATIONS Value Chain Excellence Inspired People & Talent Values & Sustainability 17 Brand 18
Slide 10: A New Brand Identity
A NEW BRAND IDENTITY 19 A NEW BRAND IDENTITY 20
Slide 11: Consistently Rolled Out Across Our Stores
CONSISTENTLY ROLLED OUT ACROSS OUR STORES REGENT ST | LONDON 21 SLOANE ST | LONDON 22
Slide 12: Spring Street New York and St Honoré Paris
SPRINGSTREET SPRING STREET | NEW | NEW YORK YORK 23 ST HONORÉ | PARIS (TOM ATTON MOORE) 24
Slide 13: A New Creative Expression, Anchored in Britishness
A NEW CREATIVE EXPRESSION, ANCHORED IN BRITISHNESS, HERO-ING OUR ICONIC PRODUCTS 25 A SHARPER, MORE COHERENT BRAND IMAGE Los Angeles Tokyo WMAG | IG Harper’s Bazaar April Issue 26
Slide 14: A More Inspirational and Elevated Brand Expression on Social Media
HEATHROW T2 | LONDON 27 A MORE INSPIRATIONAL AND ELEVATED BRAND EXPRESSION ON SOCIAL MEDIA 28
Slide 15: Daniel's Debut Collection Autumn Winter 23
DANIEL’S DEBUT COLLECTION AUTUMN WINTER 23 29 A BOLD NEW COLOUR PALETTE 30
Slide 16: A Fresh Take on Our Signature Codes; Exceptional Critical Response
A FRESH TAKE ON OUR SIGNATURE CODES 31 EXCEPTIONAL CRITICAL RESPONSE “Burberry’s Brand Britain comes “Daniel Lee’s vision for Burberry to life on the catwalk” is an ode to Britishness” “A clever balance of reinterpreting tradition through a youthful lens” “L’identité britannique en majesté” “The fut
Slide 17: Consumer Engagement
CONSUMER ENGAGEMENT CONSUMER SENTIMENT POST CAMPAIGN AW23 SHOW LIVESTREAM VIEWS Percentage of positive sentiment on earned posts, % Number of views, # +50% 97% 99% International Platforms Chinese Platforms AW22 AW23 1 Positive and neutral sentiment on earned posts, based on Linkfluence (Feb-23); Int
Slide 18: Acceleration Across Core Categories in FY23
ACCELERATION ACROSS CORE CATEGORIES IN FY23 OUTERWEAR LEATHER GOODS +7% +12% FY22 FY23 FY22 FY23 High single digit growth in FY23, +30% in Q4 Double digit growth in FY23, +15% in Q4 Note: Growth rates are based on comparable store sales 35 OUTERWEAR | HEROED OUR ICONIC RAINWEAR OFFER Image WIP CAMPA
Slide 19: Leather Goods: Strong Performance Across Women's Bag Pillars
LEATHER GOODS | STRONG PERFORMANCE ACROSS OUR WOMEN’S BAG PILLARS LOLA FRANCES VINTAGE BURBERRY CHECK LINE Double digit growth YoY Very strong performance since launch in Launched in Q4 FY23 Top selling bag pillar in FY23 Q3 FY22, reinterpreted seasonally through Gaining strong traction with consume
Slide 20: AW23 Women's Bags and Shoes
AW23 WOMEN’S BAGS 39 AW23 SHOES 40
Slide 21: AW23 Women's Ready-to-Wear; Distribution
AW23 WOMEN’S READY-TO-WEAR 41 Distribution 42
Slide 22: Progress Across Distribution Pillars; EMEIA Tourist Recovery
PROGRESS ACROSS DISTRIBUTION PILLARS MARKETS RETAIL STORES E-COMMERCE Robust performance in EMEIA and strong Acceleration of store refurbishment A clear plan to unlock e-commerce momentum in Asia Pacific programme and improvement in store potential productivity 43 EMEIA | TOURIST RECOVERY DRIVING GR
Slide 23: Americas: Improving Business Mix, Despite Soft Performance
VENDOME | QATAR, EMEIA 45 AMERICAS | IMPROVING BUSINESS MIX, DESPITE OVERALL SOFT PERFORMANCE RETAIL COMPARABLE SALES GROWTH -3% -7% • Softening performance in FY23, driven by pressure in entry-level categories • Positive traction in higher priced items, particularly in Leather Goods • New and refur
Slide 24: Asia Pacific: Strong Momentum Across Markets
NORTHPARK | DALLAS, AMERICAS 47 ASIA PACIFIC | STRONG MOMENTUM ACROSS MARKETS RETAIL COMPARABLE SALES GROWTH +2% +19% • Strong growth acceleration in Q4, driven by reopening in Mainland China • Significant recovery of Chinese tourists • Continued progress on full-price store new openings and refresh
Slide 25: Store Refurbishment Programme Progressing at Speed
TAIKOO LI | CHENGDU, MAINLAND CHINA 49 STORE REFURBISHMENT PROGRAMME PROGRESSING AT SPEED ~100% >50% ~30% NEW AND ~15% REFURBISHED FP STORES1 FY22 FY23 FY24 FY26 Note: 1 Based on full price network SHINSEGAE GANGNAM SEOUL WW | KOREA, APAC 50
Slide 26: Improvement in Productivity; Plan to Unlock E-commerce Potential
IMPROVEMENT IN PRODUCTIVITY BURBERRY RETAIL PRODUCTIVITY £25k/sqm FY22 FY23 MEDIUM- TERM Note: Retail productivity graph not to scale HANKYU UMEDA | JAPAN, APAC 51 A CLEAR PLAN TO UNLOCK E-COMMERCE POTENTIAL Brand.com 3P MAXIMISE & OPTIMISE ELEVATE CUSTOMER ENHANCE PRODUCT & DEEPEN 3P DEMAND EXPERIE
Slide 27: A Stronger Operating Model with Product Front and Centre
Operations 53 A STRONGER OPERATING MODEL WITH PRODUCT FRONT AND CENTRE • Established a more vertical operation to support our product ambition, integrating Product Development and Supply Chain, led by newly appointed Chief Supply Chain and Industrial Officer • Strengthened connection between Merchan
Slide 28: Process Simplification; Expanding Capabilities and Securing Capacity
PROCESS SIMPLIFICATION TO DRIVE AGILITY IN OUR VALUE CHAIN • Streamlined our collection structure, thereby simplifying product development and optimising in-store delivery • Improved delivery flow and availability of core product offer across our store network, globally 55 EXPANDING CAPABILITIES AND
Slide 29: CFO Appointment; Progress on Responsibility Commitments
CFO APPOINTMENT Announced appointment of Kate Ferry as CFO Joining in July 57 PROGRESS ON OUR RESPONSIBILITY COMMITMENTS PRODUCT PLANET PEOPLE COMMUNITIES Responsible Becoming Climate Champion inclusion and Positively Impact Craftsmanship Positive wellbeing Young People Expanded aftercare services t
Slide 30: Conclusion and Q&A
CONCLUSION • Exceptional response to new creative expression • Strong performance across strategic product categories • Improvement in store productivity, as store refurbishment programme progresses at pace • Strengthened execution, setting up operating model and leadership team for the future • Del
Slide 31: Appendix: Disclaimer
APPENDIX 61 DISCLAIMER The financial information contained in this presentation is unaudited. Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual
Slide 32: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES APM Description and purpose GAAP measure reconciled to Constant Exchange Rates (CER) This measure removes the effect of changes in exchange rates and the 53rd week Results at reported rates in the prior period. The constant exchange rate incorporates both the impact
Slide 33: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES APM Description and purpose GAAP measure reconciled to Net Debt Net debt is defined as the lease liability Cash net of overdrafts: recognised on the balance sheet plus borrowings less cash net of overdrafts. Period ended As at As at £m 1 April 2023 2 April 2022 Cash
Slide 34: FY24 Financial Outlook; Foreign Exchange Rates
FY24 | FINANCIAL OUTLOOK Retail space Space is expected to be broadly stable in FY24 REVENUE Wholesale revenue is expected to decline around low double digits in H1 Wholesale FY24, and broadly stable for the full year PROFIT Tax rate We expect the adjusted effective tax rate to be around 27% Based o
Slide 35: IR Contacts
IR CONTACTS JULIAN EASTHOPE REPORTING CALENDAR VP, Investor Relations Q1 trading update 14 July 2023 julian.easthope@burberry.com LAUREN WU LENG Director, Investor Relations Horseferry House lauren.wuleng@burberry.com Horseferry Road London RHIAN POWELL SW1P 2AW Investor Relations Coordinator Tel: +