Kmd Brands Limited · NZX:KMD
Kmd Brands — Kathmandu Holdings — FY2015 Earnings Presentation
29 slides from Kmd Brands's earnings presentation, Sep 29, 2015
Slide 1: FY15 Results Presentation
For personal use only Wider Leadership TeamPresentation FY15 Results : May 2015 September 2015 Paul Stern : GM – Marketing, Online & International
Slide 2: Contents
Contents For personal use only 1 Results Overview 2 Key Line Items 3 Country Results 4 Cash Flow, Balance Sheet, Dividend 5 FY16 & Growth Strategy Update 6 FY16 Outlook 7 Questions A Appendix 1 2
Slide 3: Results Overview
For personal use only Results Overview
Slide 4: Results Overview: Key Points
1 Results Overview: For personal use only Key Points • Challenging year impacted by aggressive clearance in Q1 and market downturn 1H • New CEO and management team in place • Return to comparable sales growth at improved margins in Q4 Sales and Margin • Sales growth $16.5m (+4.2% at actual exchange
Slide 5: Results Overview: Year-on-Year
1 Results Overview: Year-on-Year RESULTS NZ $m*1 FY15 FY14 Var $ Var % For personal use only SALES 409.4 392.9 16.5 4.2% GROSS PROFIT 251.9 248.1 3.8 1.5% Gross Profit Margin 61.5% 63.1% Insurance Claim - 1.3 (1.3) OPERATING EXPENSES (204.8) (175.0) (29.8) 17.0% % of Sales 50.0% 44.5% EBITDA 47.1 74
Slide 6: Results Overview: Half-Year split YOY
1 Results Overview: Half-Year split YOY 1H 1H 2H 2H For personal use only RESULTS NZ $m*1 Var $ Var % Var $ Var % FY15 FY14 FY15 FY14 SALES 179.4 167.6 11.8 7.0% 230.0 225.3 4.7 2.1% GROSS PROFIT 106.3 107.1 (0.8) (0.7%) 145.6 141.0 4.6 3.3% Gross Profit Margin 59.3% 63.9% 63.3% 62.6% Insurance Clai
Slide 7: Key Line Items
For personal use only Key Line Items
Slide 8: Sales
2 Sales For personal use only SALES: +4.2% to $409.4m Group Sales (NZD $m) *1 $409.4 • Sales growth year on year:*2 $347.1 $384.0 $392.9 AU 6.3%, NZ -1.3%, UK 17.3%; $306.1 • At constant exchange rates sales growth $14.5m / 3.7%; • Online sales 6.2% of total sales. FY11 FY12 FY13 FY14 FY15 Australia
Slide 9: Same Store Sales Result
2 Same Store Sales Result AU NZ For personal use only 14.4% 12.3% 9.2% • Same store sales: *1, *2 6.5% 6.7% 6.9% -1.4% actual exchange rates 4.4% -1.9% constant currency: • Stores only -3.2% • Online only +22.7% -0.1% -1.1% -2.7% FY11 FY12 FY13 FY14 FY15 • UK SSS +15.7% GROUP - Actual Rates GROUP -
Slide 10: Gross Margin %
2 Gross Margin % AU NZ UK GROUP For personal use only 68.8% 66.9% 66.3% 66.3% 65.5% 63.4% 63.2% 63.0% 63.1% 61.5% 60.6% 58.5% 57.6% 57.7% 58.2% 57.4% 53.9% 51.9% 49.6% 50.0% FY11 FY12 FY13 FY14 FY15 • 1H gross margin decreased 460 bps YOY due to: • Excess stock clearance; • Below target sales in hig
Slide 11: Cost of Doing Business
2 Cost of Doing Business For personal use only OPERATING EXPENSES: +17% to $204.8m NZ $m FY15 FY14*1 DIFF $ DIFF % • Operating expenses increased YOY Rent 53.0 44.5 8.5 19.1% 550 bps / 5.5% of sales; % of Sales 12.9% 11.3% • Rent expenses include expanded Other operating expenses 151.8 130.5 21.3 16
Slide 12: Earnings Summary
2 Earnings Summary For personal use only EBITDA $47.1m EBIT*1 $33.2m NPAT $20.4m -36.8% -48.4% -51.7% 71.4 74.0 74.5 66.5 64.0 63.4 64.3 57.0 47.1 44.2 42.2 39.1 34.9 33.2 20.4 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 23.3% 19.2% 19.3% 19.0% 11.5% 20.9% 16.4% 16.5%
Slide 13: Country Results
For personal use only Country Results
Slide 14: Australia
3 Australia For personal use only SALES: +6.3% to $242.1m AUD $m *1 FY15 FY14 Var % • Gross margin reduction 2.9% points; Sales 242.1 227.8 6.3% • Total operating expenses (excl. depreciation): • FY15 55.1% of sales; Same store sales growth (2.7%) 6.9% • FY14 48.4% of sales. EBITDA (trading result)
Slide 15: New Zealand
3 New Zealand For personal use only SALES: -1.3% to $139.1m NZD $m *1 FY15 FY14 Var % • Improved gross margins in 2H offset 1H Sales 139.1 141.0 (1.3%) decline; • Total operating expenses (excl. depreciation): Same store sales growth (1.1%) (0.1%) • FY15 37.9% of sales; • FY14 33.5% of sales. EBITDA
Slide 16: United Kingdom
3 United Kingdom GBP £m*1 For personal use only SALES: +17.3% to £2.8m FY15 FY14 Var % Sales 2.8 2.4 17.3% • Same store sales growth 15.7%: • Stores only 6.9%; • Online only 56.6%.*2 Same store sales growth*2 15.7% 12.7% • Online total sales growth 79.3%, including the EBITDA (trading result) (1.0)
Slide 17: Cash Flow, Balance Sheet, Dividend
For personal use only Cash Flow Balance Sheet Dividend
Slide 18: Cash Flow
4 Cash Flow For personal use only Capital expenditure $20.0m (LY $24.2m): NZD $m FY15 FY14 NPAT 20.4 42.2 • New stores capex $6.6m (LY $8.7m): • 10 new stores; Change in working capital (3.3) (22.6) • 3 relocations. Change in non-cash items 12.5 11.6 • Existing stores capex $3.6m (LY $6.1m): Operati
Slide 19: Balance Sheet
4 Balance Sheet For personal use only Stock Per Store (NZ $m) NZ $m FY15 FY14 Inventories 113.3 103.8 Property, plant and equipment 54.1 48.4 $0.692 $0.708 $0.591 Intangible assets 240.0 238.7 $0.584 $0.486 Other assets 21.4 10.2 Total assets (excl. cash) 428.8 401.1 FY11 FY12 FY13 FY14 FY15 Net int
Slide 20: Dividend
4 Dividend For personal use only • NZ 5.0 cents per share final dividend; full year payout NZ 8.0 cps (2014 NZ 12.0 cps); • Supplementary dividend payable to non-NZ shareholders of NZ 0.8824 cps; • AU dividend will be fully franked; • NZ dividend will be fully imputed; • Record date 9 November 2015;
Slide 21: Foreign Currency
4 Foreign Currency For personal use only • Effective USD hedge rates FY15: FORWARD HEDGING POSITION FY16 FY17 • AUD/USD 0.886 FY15 vs 0.961 FY14; % covered 90%+ 10%+ • NZD/USD 0.815 FY15 vs 0.805 FY14. AUD/USD Effective Rate 0.790 0.710 • Forward Hedging Position: • Longest dated hedges September 20
Slide 22: FY16 & Growth Strategy Update
For personal use only FY16 & Growth Strategy Update
Slide 23: FY16 actions taken
5 FY16 actions taken For personal use only Key focus areas for FY16 Efficiencies Customer centric Brand distinctiveness • Lower cost base locked in – restructuring of Australian and New Zealand support offices completed with 10% reduction in support office staff; • UK review completed – all physical
Slide 24: Growth Strategy – Australasian sales growth
5 Growth Strategy – Australasian sales growth Review of promotions and pricing architecture underway, focus For personal use only on: • Advertising strategy that is lower cost, with more efficient use of social and digital media channels • Optimise the pricing and • Promotional spend that activates
Slide 25: Growth Strategy – continued
5 Growth Strategy – continued For personal use only • Online sales FY15 growth c. 28% • Build a true omni-channel offering, integrating online with in-store sales and expanding click and collect offering Online • Realise online potential • Improved site visitation through targeted campaigns, affilia
Slide 26: FY16 Outlook
For personal use only FY16 Outlook
Slide 27: FY16 Outlook
6 FY16 Outlook For personal use only • New CEO in place, and for FY2016 plans are well developed with detailed objectives and metrics in place; • August/September trading to date on track, with improved gross margin outcome; • Achievement of FY16 margin recovery through: - profitable sales growth in
Slide 28: Questions
For personal use only Questions
Slide 29: Appendix – Historical Store count
Appendix 1 – Historical Store count For personal use only Permanent Open Stores*1 157 160 149 136 139 129 114 120 110 97 100 90 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 1. Ten new stores opened during FY15, plus Cashel St Re-Start (Christchurch)