Shaver Shop Group Limited · ASX:SSG
Shaver Shop — FY2018 Earnings Presentation
32 slides from Shaver Shop's earnings presentation, Aug 23, 2018
Slide 1: Investor Presentation
Shaver Shop Group Limited INVESTOR PRESENTATION 23 August 2018 1
Slide 2: Table of Contents
TABLE OF CONTENTS 01 FY18 Overview 02 Financial Results 03 Business Cornerstones 04 FY18/FY19 Growth Plans 05 Trading Update & Outlook 2
Slide 3: FY18 Overview
01. FY18 OVERVIEW 3
Slide 4: FY18 Overview
FY18 OVERVIEW* • Up +8.7% to $154.9 million • Underlying (ex. Daigou channel) Corporate L4L sales growth up +1.6% Sales • Underlying (ex. Daigou channel) Franchise Store L4L sales down -0.8% • Total (inc. Daigou channel) Corporate Store L4L sales down -3.4% vs FY17 • Network online sales up +47% fro
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS Online World Class In-store Sales Growth Customer Service up +47% NPS > 80 38 of top 50 New Hairstyling products are & Beauty Brands exclusive . Brand Expanding “own Awareness brand” product 87% range Operating cash flow Underlying up 197% to Corporate Store $15.5m L4L growth
Slide 6: Performance Trends
PERFORMANCE TRENDS Underlying L4L Sales Growth Increasing store footprint 15.0% 140 11.0% 10.0% 115 120 108 5.2% 100 9 5.0% 2.4% 2.4% 1.6% 0.6% 100 13 84 20 Store numbers 0.0% 72 76 -0.3% 80 -5.0% 28 -3.4% -6.1% 60 -10.0% 46 106 56 95 -15.0% 40 80 56 -20.0% 20 30 -20.9% 16 -25.0% 0 Q1 FY18 Q2 FY18 Q
Slide 7: Financial Results
02. FINANCIAL RESULTS 7
Slide 8: Full Year Result
FULL YEAR RESULT Normalised EBITDA ($m) 16.0 14.0 14.9 Pro Forma1 Normalised2 Variance3 Variance 12.0 12.6 13.2 $ millions FY17 FY18 ($) (%) 10.0 Sales 142.6 154.9 12.4 8.7% 8.0 Gross profit 59.5 64.2 4.7 7.9% Gross margin % 41.7% 41.4% (0.3%) (0.7%) 6.0 7.2 Franchise & other income 3.6 2.0 (1.5) (4
Slide 9: Sales Growth
SALES GROWTH Total Sales ($ m) 180.0 154.9 160.0 142.6 5.4 140.0 12.1 Total sales up 8.7% to $154.9m 120.0 100.0 80.0 149.5 > Total FY18 like for like sales down -3.4% due to lower 60.0 130.4 Daigou channel sales in 2H FY18 vs pcp 106.7 40.0 63.2 20.0 34.1 > Excluding Daigou channel, underlying Corp
Slide 10: Gross Profit
GROSS PROFIT Total Gross Profit ($ m) 64.2 Gross profit up $4.7m (7.9%) to 59.5 $64.2m 45.6 > Increase in gross profit was primarily driven by the 26.5 increase in store numbers year over year offset by 15.1 reduced contribution from Daigou channel in FY18 and 9.9 margin compression (particularly in
Slide 11: Cost of Doing Business (CODB)
COST OF DOING BUSINESS (CODB) > Norm. CODB increased as a percentage of total sales by 40bps to 34.2% (FY17 – 33.8%) due to the reduced contribution from Daigou channel sales in FY18 Norm. CODB as % of Sales > If Daigou channel sales are removed from both years, norm. CODB% decreases 140bps to 35.5%
Slide 12: Normalised EBITDA Drivers
NORMALISED EBITDA DRIVERS 16 14.9 0.2 0.8 14 0.6 13.2 (2.8) 1.2 (0.1) (1.6) 12 10 A$ m 8 6 4 2 - FY17 EBITDA Like for Like Buybacks Greenfields Redev-Refit-Closed Marketing & Franchise & Other Other Corp. FY18 EBITDA Advertising Inc. Overheads > L4L store EBITDA declined primarily due to reduced > F
Slide 13: Conservative Balance Sheet
CONSERVATIVE BALANCE SHEET Statutory Statutory $ millions 30-Jun-17 30-Jun-18 Change $ Positioned for growth Cash 2.4 2.9 0.5 > Total inventory declined $5.2m (18%) despite 11 Trade & other receivables 1.9 2.5 0.6 additional stores at year end Inventory 29.1 23.9 (5.2) – Average inventory per store
Slide 14: Strong Cash Flow
STRONG CASH FLOW Pro Forma* Actual Variance $ millions FY17 FY18 ($) > Net operating cash flow increased $10.3m to $15.5m EBITDA 14.9 12.2 (2.7) > Sustainable working capital improvement Change in working capital and other (7.5) 6.7 14.2 > Actual FY18 cash tax payable $1.1m (FY17 - $2.7m) - Net fina
Slide 15: Business Cornerstones
03. BUSINESS CORNERSTONES 15
Slide 16: Business Cornerstones (A Recap)
BUSINESS CORNERSTONES (A RECAP) Category leadership Attractive growth category (personal care & beauty) 1 > High market share – particularly at top price points 4 > Long term category growth c.6.4%** > 115 locations across ANZ > Comprehensive and expanding range (innovation) > Offer all key brands i
Slide 17: FY18/19 Growth Plans
04. FY18/19 GROWTH PLANS 17
Slide 18: 1. Greenfield Site Opportunities
1. GREENFIELD SITE OPPORTUNITIES 8-10 NEW STORES PLANNED FOR FY19 5 new stores currently committed for 1H FY19 Confirmed Greenfield site openings: 1. New store Broadway Sydney NSW - opened early August 18 2. New store Wendouree VIC - opened mid July 18 3. New store DFO Uni Hill VIC - opened mid Augu
Slide 19: 2. New Store Design
2. NEW STORE DESIGN NEW STORE DESIGN IS DRIVING SALES GROWTH Shaver Shop Hurstville NSW May 2018 (10 year + old fit-out) 8 stores to undergo a full refit in FY19 with 4 more in Q1 FY20 > Increased number of touch and feel display units throughout store > Cleaner store layout supporting increased cus
Slide 20: 3. Product Innovation & Exclusivity
3. PRODUCT INNOVATION & EXCLUSIVITY PIPELINE OF PRODUCT INNOVATION APPEARS PROMISING Product innovation planned for launch 1H includes; 1. Exclusive NEW Dafni product (genuine product innovation) 2. Significant innovation across GHD brand including launch of GHD Platinum + 3. Exclusive new Hot Tools
Slide 21: 4. Expansion of Own/Private Label
4. EXPANSION OF OWN/PRIVATE LABEL LAUNCHING HAIR STYLING PRIVATE LABEL BRAND IN Q2 FY19 Further increase SSG point of difference via expanding own/private label across select categories; 1. Shaver Guard conversion consistently over 50% and one of the top margin contributors for the group 2. Launched
Slide 22: 5. Omni Retail Investments
5. OMNI RETAIL INVESTMENTS NETWORK ONLINE SALES UP +47% IN FY18 Investment and focus to continue over FY19 > Investment in additional talent for FY19 – New CMO to commence end August 2018 (Ex API Group Marketing Manager) – New Head of Digital to commence end August 2018 (Ex 2XU Global Digital Market
Slide 23: 6. Continued Investment in Staff Training and Development
6. CONTINUED INVESTMENT IN STAFF TRAINING AND DEVELOPMENT EVERY +1% INCREASE IN CONVERSION RATE REPRESENTS C.$4.5M IN RETAIL SALES Targeting sales conversion above 35% within two years Net Promoter Score 100 90 > Continue to invest and focus on staff training and career development opportunities tha
Slide 24: Trading Update & Outlook
05. TRADING UPDATE & OUTLOOK 24
Slide 25: Summary & Trading Update
SUMMARY & TRADING UPDATE > Shaver Shop’s core business remains robust and differentiated with continuing opportunities to grow > Investments in training, foot traffic conversion and NPS tools reinforce SSG’s unique selling proposition and are supporting growth > Improved stock turns have delivered s
Slide 26: Outlook
OUTLOOK > Significant investments being made in FY19 to build platform for future profitable growth – Omni-channel capabilities > new CMO (ex Priceline) and Head of e-Commerce (ex 2XU) appointments in Aug ’18 > Launching new CRM and ERP solutions in FY19 – Incremental training and in-store operation
Slide 27: Appendices
10. APPENDICES 27
Slide 28: Performance Metrics
PERFORMANCE METRICS Pro Forma1 Normalised2 FY17 FY18 Number of corporate stores 95 106 Number of franchise stores 13 9 Total stores 108 115 Corporate store sales ($m) 142.6 154.9 Franchise store sales ($m) 37.6 22.4 Total network sales ($m) 180.2 177.4 Corporate store LFL sales growth % 6.2% -3.4% F
Slide 29: Tax Benefit on Franchise Buybacks
TAX BENEFIT ON FRANCHISE BUYBACKS 2.0 1.8 1.8 1.6 1.6 1.4 1.2 $m 1.0 1.0 0.8 0.6 0.7 0.4 0.2 0.2 0.0 FY18 FY19 FY20 FY21 FY22 > Shaver Shop receives a tax deduction over 5 years for the cost of franchise right terminations that occur as a result of its franchise buyback program. Based on the franchi
Slide 30: Normalisation Reconciliation
NORMALISATION RECONCILIATION Reported Supplier FY15 Stamp Fraud/Stock Normalised $A m FY18 Liquidations Duty Assess. Loss FY18 Sales 154.9 154.9 Cost of goods sold (90.9) 0.2 (90.8) Gross profit 64.0 0.2 - - 64.2 Gross margin % 41.3% 41.4% Franchise and other revenue 2.0 2.0 Employee benefits expens
Slide 31: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This management presentation (“Presentation”) has been prepared by Shaver Shop Group Limited ACN 150 747 649 (“Shaver Shop”) and contains general background information about Shaver Shop, its subsidiaries and their activities which is current at the date of this Prese
Slide 32: Shaver Shop FY18 Full Year Results - Thank You
SHAVER SHOP FY18 FULL YEAR RESULTS INVESTOR PRESENTION THANK YOU 32