Slide 1: FY23 Results Presentation
FY23 RESULTS PRESENTATION 20 SEPTEMBER 2023
Slide 2: Today's Agenda
TODAY’S AGENDA 1. FY23 HIGHLIGHTS 3 2. FINANCIAL PERFORMANCE 8 3. SALES GROWTH ACROSS ALL BRANDS 14 4. FOCUSED STRATEGY UNDERPINS 18 OUTLOOK 5. APPENDICES 24 2 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 3: FY23 Highlights
SECTION 1 FY23 HIGHLIGHTS 3 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 4: Financial Highlights FY23
FINANCIAL HIGHLIGHTS FY23 $1,103m 59.1% $105.9m $43.3m NZ 6 cps Sales growth Gross margin Underlying Underlying Dividends +12.6% improvement EBITDA1 NPAT1 declared +20 bps +15.1% +8.6% FY22 $979.8m FY22 58.9% FY22 $92.0m FY22 $39.8m FY22 NZ 6 cps 1. Statutory results include the impact of IFRS 16 le
Slide 5: Operational Achievements
OPERATIONAL ACHIEVEMENTS BUILDING GLOBAL ELEVATING OPERATIONAL LEAD IN BRANDS DIGITAL EXCELLENCE ESG • Sales growth across all brands and • Loyalty • EBITDA margin • B Corporations all key regions. • Club Rip Curl launched in Australasia. • 0.2% of sales improvement YOY. • Group and all brands now B
Slide 6: Brand Highlights
BRAND HIGHLIGHTS CLUB RIP CURL KATHMANDU HELI R OBOZ FAST TRAIL • Launched Rip Curl’s first-ever loyalty program. • Revamp of Kathmandu’s iconic insulation • A new fast trail category, with the successful franchise – the Heli jacket. launch of the Katabatic style. • World-first program where members
Slide 7: KPI Progress Update
7 KPI PROGRESS UPDATE SHORT-TERM MEDIUM-TERM EBITDA MARGIN*1 OBOZ SALES OPPORTUNITY KATHMANDU RETAIL STORE COUNT % of sales US $m ~100 ~200 15.0% 11.9% 160 155 158 9.4% 9.6% 61.2 52.4 41.3 Jul 21 Jul 22 Jul 23 >> Target >> >> Jul 21 Jul 22 Jul 23 Target Jul 21 Jul 22 Jul 23 Target WORKING CAPITAL RI
Slide 8: Financial Performance
SECTION 2 FINANCIAL PERFORMANCE 8 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 9: Profit & Loss
PROFIT & LOSS KMD BRANDS Statutory Underlying*1 RECORD SALES $1.1 BILLION NZ $m*2 FY23 FY22 FY23 FY22 Var % • First full year of uninterrupted trade post-pandemic.*3 SALES 1,103.0 979.8 1,103.0 979.8 12.6% • Strong sales growth from all brands in the first three quarters. GROSS PROFIT 651.9 576.7 65
Slide 10: Record Sales $1.1 Billion
RECORD SALES $1.1 BILLION TOTAL GROUP REPORTED SALES (NZ $m) 1,103.0 922.8 979.8 801.5 538.9 FY19 FY20 FY21 FY22 FY23 incl. 9 months of Rip Curl DIVERSIFIED SALES GROWTH (FY23 VS FY22) +61.8% +9.8% +11.2% Oboz Licensing / Royalties +5.6% Rest of World +11.0% Europe Wholesale BY BY BY BRAND CHANNEL +
Slide 11: Direct to Consumer Sales Growth
DIRECT TO CONSUMER SALES GROWTH DIRECT TO CONSUMER SALES (NZ $m) Retail Stores Online DTC Online % of DTC sales 900.0 35.0% 800.0 729.6 752.4 30.0% 700.0 667.5 663.9 629.6 25.0% 600.0 500.0 20.0% 15.7% 16.3% 400.0 14.5% 13.2% 15.0% 300.0 8.8% 10.0% 200.0 5.0% 100.0 0.0 0.0% FY19 FY20 FY21 FY22 FY23
Slide 12: Strong Balance Sheet
STRONG BALANCE SHEET Key Balance Sheet items and ratios*1 INVENTORY POSITION MODERATING NZ $m Jul 23 Jan 23 Jul 22 • Kathmandu inventory well positioned, with further progress in 2H, now c. $37m below Jul 22. Net working capital 219.7 244.4 207.0 • Oboz inventory position impacted by restocking, cyc
Slide 13: Positive Operating Cash Flow
POSITIVE OPERATING CASH FLOW Cash Flow (NZ $m) FY23 FY22 Dividends declared (NZ $m) NPAT 36.6 36.8 Interim Final Change in working capital (27.7) (71.3) 42.5 42.7 36.2 35.5 Non-cash items 138.7 116.3 21.3 21.4 Operating cash flow 147.6 81.8 27.2 21.3 Adjusted operating cash flow *1 60.7 (0.4) 21.3 2
Slide 14: Sales Growth Across All Brands
SECTION 3 SALES GROWTH ACROSS ALL BRANDS 14 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 15: Rip Curl Profit & Loss
RIP CURL PROFIT & LOSS NZ $m FY23 FY22 Var % • Direct-to-consumer sales growth particularly strong in Australasia following lockdowns last year, plus Hawaii and Thailand with the return of international SALES 581.5 536.8 8.3% travel. EBITDA (underlying*1) 55.6 59.1 (6.0%) • Direct-to-consumer same s
Slide 16: Kathmandu Profit & Loss
KATHMANDU PROFIT & LOSS NZ $m FY23 FY22 Var % • Australia sales +7.0%. Kathmandu’s largest market saw a strong recovery following COVID lockdowns last year. Q4 cost of living pressures softened SALES 422.2 381.6 10.6% consumer sentiment. Kathmandu faced the warmest winter on record in Australia EBIT
Slide 17: Oboz Profit & Loss
OBOZ PROFIT & LOSS NZ $m FY23 FY22 Var % • Record sales achieved. SALES 99.3 61.3 61.8% • Wholesale sales recovered strongly following last year’s significant supply challenges. EBITDA (underlying*1) 7.9 3.3 137.0% • Strong online sales growth with high gross margins increasing the mix of EBITDA mar
Slide 18: Focused Strategy Underpins Outlook
SECTION 4 FOCUSED STRATEGY UNDERPINS OUTLOOK 18 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 19: Strategic Priorities
STRATEGIC PRIORITIES BUILDING GLOBAL ELEVATING OPERATIONAL LEAD IN BRANDS DIGITAL EXCELLENCE ESG • Continued design, development, and • Loyalty • Working capital • Responsible materials launch of market-leading innovative • Relaunch Kathmandu loyalty • Working capital target 18% of • Increase respon
Slide 20: Continued Brand Innovation
CONTINUED BRAND INNOVATION FUSION WETSUIT KATHMANDU OUT THERE REWARDS TRAILHEAD STRETCH • North American launch of the world’s most • Relaunch of Kathmandu’s highly successful • Kathmandu's most versatile raincoat yet. innovative wetsuit. loyalty program. • Waterproof, windproof, breathable and now
Slide 21: Path to 15% Underlying EBITDA Margin
PATH TO 15% UNDERLYING EBITDA MARGIN SPECIFIC TARGETS FOR BRANDS AND CORPORATE FUNCTIONS Restructuring & cost-out completed: ALIGNED TO GROWTH STRATEGY • Support offices and wetsuit production facility. • Marketing normalisation. • Retail labour optimisation. UNDERLYING EBITDA MARGIN*1 % of sales Op
Slide 22: Trading Update and Outlook
TRADING UPDATE AND OUTLOOK FY24 OUTLOOK • Group sales for Aug 23 -6.4% below last year. • Kathmandu Q4 sales trend continues, but consistent with pre-pandemic sales levels for this time of year. • Rip Curl and Oboz have seen good momentum in direct-to-consumer sales. • Strategic plans remain unchang
Slide 23: Questions
QUESTIONS 23 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 24: Appendices
SECTION 5 APPENDICES 24 F Y 2 3 R E S U LT S P R E S E N TAT I O N
Slide 25: Appendix 1: Statutory to Underlying Profit & Loss
APPENDIX 1: STATUTORY TO UNDERLYING PROFIT & LOSS GROUP FY23 FY22 Amortisation of Amortisation of IFRS 16 Customer IFRS 16 Customer NZ $m Statutory Leases *1 Restructuring*2 Relationships *3 Underlying Statutory Leases *1 Restructuring*2 Relationships *3 Underlying SALES 1,103.0 - - - 1,103.0 979.8
Slide 26: Appendix 2: Segment Note
APPENDIX 2: SEGMENT NOTE FY23 FY22 SALES (NZ #039;000) Rip Curl Kathmandu Oboz Corporate Total Rip Curl Kathmandu Oboz Corporate Total SALES per segment note 581,504 422,233 99,257 - 1,102,994 536,830 381,628 61,344 - 979,802 SALES (Underlying) 581,504 422,233 99,257 - 1,102,994 536,830 381,628 61,344
Slide 27: Appendix 3: Balance Sheet
APPENDIX 3: BALANCE SHEET Balance Sheet (NZ $m) Jul 23 Jan 23 Jul 22 Inventories 290.4 318.8 295.5 Property, plant and equipment 82.9 77.9 79.2 Right of Use Asset (IFRS 16) 270.3 264.7 250.4 Intangible assets 704.4 704.8 719.3 Other assets 136.0 117.0 137.3 Total assets (excl. cash) 1,484.0 1,483.2
Slide 28: Brands with Global Reach
BRANDS WITH GLOBAL REACH We operate over 300 stores globally, and our brands are sold in over 9,000 locations EUROPE NORTH AMERICA ~$100m Sales 24 Owned Stores 14 Licensed Stores +2,000 Wholesale Doors ~$240m Sales 31 Owned Stores 20 Licensed Stores ASIA +4,200 Wholesale Doors ~$40m Sales 75 License
Slide 29: Important Notice and Disclosure
IMPORTANT NOTICE AND DISCLOSURE This presentation prepared by KMD Brands Limited (the “Company” or the “Group”) (ASX/NZX:KMD) provides additional comment on the financial statements of the Company, and accompanying information released to the market. As such, it should be read in conjunction with th