Kmd Brands Limited · NZX:KMD
Kmd Brands — Kathmandu Holdings — H1 2014 Earnings Presentation
27 slides from Kmd Brands's earnings presentation, Mar 24, 2014
Slide 1: 1H FY14 Results Presentation
1H FY14 Results Presentation 1March 2014
Slide 2: Contents
Contents • Results Overview • Key Line Items • Country Results • Cash Flow, Balance Sheet, Dividend • Growth Strategy Update • FY14 Outlook • Questions • Appendix 1 2
Slide 3: Results Overview
Results Overview
Slide 4: Results Overview: Highlights
Results Overview: Highlights Summary • Solid result in a relatively difficult trading environment; • Australian growth potential demonstrated through 28% profit uplift; • New stores continue to perform to expectation; • Gross margin at the top end of target range; • Significant exchange rate impact
Slide 5: Results Overview: Year-On-Year
Results Overview: Year-On-Year Results Overview NZ $m*1 1H FY14 1H FY13 DIFF $ DIFF % Sales 167.6 165.9 1.7 1.0% Gross Profit 107.1 104.1 3.0 2.9% Gross Profit Margin 63.9% 62.7% Operating expenses (84.5) (83.2) (1.3) 1.6% % of sales 50.4% 50.1% EBITDA 22.6 20.9 1.7 8.1% EBITDA margin % 13.5% 12.6%
Slide 6: Key Line Items
4 Key Line Items
Slide 7: Sales
Sales Group (NZ$) *1 SALES: +1.0% to $167.6m $165.9 $167.6 $146.7 $127.1 • Sales growth year on year:*2 $106.6 AU 14.8%, NZ 5.6%, UK (33.0)%; • At constant exchange rates sales growth $17.4m / 10.5%; • Online sales 4.7% of total sales. 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 Australia (A$) New Zeala
Slide 8: Same Store Sales Growth
Same Store Sales Growth AU NZ 14.1% 12.4% 12.7% 9.9% • Same store sales growth 9.6% (including Online) +5.4% (- 6.4% 6.6% 6.5% 3.5% on constant currency 3.2% basis); *1 1.3% • UK same store sales 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 +4.5% in 1H FY14 (+1.4% GROUP - Actual Rates GROUP - Constant Ra
Slide 9: Gross Profit Margin %
Gross Profit Margin % AU NZ UK GROUP 68.1% 67.4% 66.1% 66.1% 64.7% 63.2% 62.7% 63.9% 62.7% 61.3% 59.9% 59.7% 58.9% 57.7% 58.6% 58.4% 57.3% 55.6% 53.1% 50.4% 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 • Gross Profit margins remained strong SHARE OF BUSINESS (GROSS PROFIT $) through the key Christmas and
Slide 10: Cost of Doing Business
Cost of Doing Business OPERATING EXPENSES: +1.6% to $84.5m NZ $m 1H FY14 1H FY13 DIFF $ DIFF % • Operating expenses up 30 bps as Rent 21.8 22.1 (0.3) (1.4)% a % of sales YOY; % of Sales 13.0% 13.3% Other operating expenses 62.7 61.1 1.6 2.6% • Rent decreased 30 bps as a % of % of Sales 37.4% 36.8% s
Slide 11: Earnings
Earnings EBITDA $22.6m, +8.1% EBIT $17.6m, +11.4% NPAT $11.4m, +10.7% EBITDA $m EBIT $m *1 23.2 22.6 19.9 20.9 17.6 17.6 17.0 15.1 15.8 12.7 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 16.5% 18.3% 11.6% 12.6% 13.5% 14.2% 15.7% 8.7% 9.5% 10.5% EBITDA margin % EBIT
Slide 12: Country Results
- Country Results
Slide 13: Australia
Australia SALES: A$93.9m, +14.8% Same store sales growth: +6.6% EBITDA (trading result): A$11.5m, +27.8% A $m 1H FY14 1H FY13 DIFF • 9 New Stores opened since 1H FY13: Sales 93.9 81.8 14.8% ‒ 5 in 2H FY13: ‒ Sydney (Eastgardens, Penrith); Same store sales growth 6.6% 9.6% ‒ Melbourne (The Glen, Nuna
Slide 14: New Zealand
New Zealand SALES: NZ$62.3m, +5.6% Same store sales growth: +3.2% EBITDA (trading result): NZ$12.2m, +9.9% NZ $m 1H FY14 1H FY13 DIFF • 3 new stores opened since 1H FY13: Sales 62.3 59.0 5.6% ‒ 2 in 2H FY13: Same store sales growth 3.2% 1.3% Auckland (Westgate) and Pukekohe; ‒ 1 in 1H FY14: EBITDA (
Slide 15: United Kingdom
United Kingdom SALES: UK£1.2m, -33.0% Same store sales growth: +4.5% EBITDA (trading result): UK£(0.6)m, -50.0% • 1.1% of Group Gross Profit in 1H FY14; UK £m 1H FY14 1H FY13 DIFF • Consolidated to 4 stores, no new stores planned: Sales 1.2 1.8 (33.0)% 1 new store opened, 3 stores closed since 1H FY
Slide 16: Cash Flow, Balance Sheet, Dividend
Cash Flow Balance Sheet 16 Dividend
Slide 17: Cash Flow
Cash Flow Capital expenditure $8.1m (LY $10.7m): NZ $m 1H FY14 1H FY13 NPAT 11.4 10.3 • New stores capex $1.9m (LY $6.4m): Change in working capital (35.2) (19.9) - 5 new stores; - 1 relocation. Change in non-cash items 7.8 4.0 • Existing stores capex $2.0m (LY $1.4m). Operating cash flow (16.0) (5.
Slide 18: Balance Sheet
Balance Sheet • Inventories ($m) per store up 14.4%:*1 0.8 $0.732 NZ $m 1H FY14 1H FY13 $0.651 $0.640 $0.544 0.6 Inventories 102.5 84.5 $0.423 0.4 Property, plant and equipment 42.2 44.7 0.2 Intangible assets 231.8 245.6 0 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 Other assets 14.5 11.7 • Targeted inv
Slide 19: Dividend
Dividend • NZ 3.0 cents per share interim dividend; • Full year payout ratio to remain within expected 50 to 60% of NPAT; • AU dividend will be fully franked; • NZ dividend will not be imputed (as signalled in FY13 due to profit growth being primarily generated from Australia); • Record date 06 June
Slide 20: Foreign Currency
Foreign Currency FORWARD HEDGING POSITION 2H FY14 1H FY15 • Effective US$ hedge rates 1H FY14: ‒ A$/US$ 0.984 1H FY14 vs 1.007 1H FY13; A$ / US$ % covered 90%+ 90%+ ‒ NZ$/US$ 0.808 1H FY14 vs 0.782 1H FY13. Effective Rate 0.946 0.891 • Forward Hedging Position: ‒ Longest dated hedges March 2015; NZ$
Slide 21: Growth Strategy Update
Growth Strategy Update
Slide 22: Growth Strategy Update
Growth Strategy Update GROWTH STRATEGY UPDATE • Success of new formats has allowed a revised target of 180 • New target of 180 stores New store for Australia and New • New store performance continues to meet expectations rollout Zealand • On track to open 15 new stores in FY14 • Small formats increa
Slide 23: Growth Strategy Update (continued)
Growth Strategy Update (continued) GROWTH STRATEGY UPDATE • Invest in growth categories • Maximise sales • 3 year product roadmap established Enhance productivity of existing • Continued investment in technical resources, research and development, product range and design to further develop key prod
Slide 24: FY14 Outlook
FY14 Outlook
Slide 25: FY14 Outlook
FY14 Outlook Market / Environment • Current economic conditions still uncertain globally, and particularly in Australia; • Outdoor category remains resilient; • Two large weather dependent promotions to come. These remain critical to the full year outcome. Summary • A positive start to FY14; • Conti
Slide 26: Questions
Questions 26
Slide 27: Appendix 1 – Reconciliation of Country Trading Results
Appendix 1 – Reconciliation of Country Trading Results Australia (NZ $m) 1H FY14 1H FY13 New Zealand (NZ $m) 1H FY14 1H FY13 Segment profit 2.8 1.9 Segment profit 9.9 9.1 Net interest 1.0 1.1 Net interest 0.6 0.9 Facility fees 0.1 0.2 Facility fees 0.1 0.2 Depreciation 2.9 3.4 Depreciation 1.9 1.5 I