Slide 1: Preliminary Results for the Twelve Months Ended 31 March 2017
PRELIMINARY RESULTS FOR THE TWELVE MONTHS ENDED 31 March 2017 Christopher bailey chief creative & chief executive officer
Slide 2: 2017 Highlights: Year of Transition
INTRODUCTION — FINANCIAL PERFORMANCE — PRODUCTIVITY & EFFICIENCY 2017 PROGRESS 2017 HIGHLIGHTS 2017: Year of Transition Repositioning Burberry • More focused luxury retail and digital business • Encouraging early success • Full benefits will build through time Revenue of £2.8bn -2% underlying • Reta
Slide 3: Financial Highlights
JULIE BROWN chief operating & financial officer FINANCIAL HIGHLIGHTS ---------- Change --------- Revenue -2% underlying Retail +3% underlying 12 months to 31 March 2017 2016 Reported Underlying • Wholesale and licensing declined £m £m FX • Revenue 2,766 2,515 10% (2%) Adjusted PBT -21% underlying Ad
Slide 4: FY 2017 Revenue
FY 2017 REVENUE £2,766m +12% +10% +3% (11%) £2,515m (20%) (48%) £2,454m (2%) Total FY 2016 Retail Wholesale ex Beauty Licensing Underlying sales Currency Total FY 2017 Beauty Axis starts at £2,400m 7 This page is intentionally blank
Slide 5: Reshaping the Business in the Last Years
RESHAPING THE BUSINESS IN THE LAST 10 YEARS Group revenue by channel (£m) Retail/wholesale revenue by product category (£m) 3,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 6: Adjusted Operating Profit
ADJUSTED OPERATING PROFIT £459m £131m +10% £418m £328m -21% FY 2016 Wholesale inc Licensing Strategic cost Strategic Other* Underlying Currency FY 2017 Beauty savings investment CHART NOT TO SCALE * Other includes the year-on-year movement in PRP, store impairments, other gross margin and opex chang
Slide 7: Income Statement
INCOME STATEMENT 12 months to 31 March 2017 2016 £m £m Retail/wholesale adjusted operating profit 437.0 380.9 Licensing adjusted operating profit 21.7 36.9 Adjusted operating profit 458.7 417.8 Commentary Net finance credit 3.7 2.8 Adjusted profit before tax 462.4 420.6 Adjusted PBT -21% underlying
Slide 8: Free Cash Flow
FREE CASH FLOW 12 months to 31 March 2017 2016 £m £m Adjusted operating profit 458.7 417.8 Depreciation and amortisation 144.0 132.2 Employee share scheme costs 13.1 (0.3) Decrease/(Increase) in inventories 8.4 (49.3) Decrease/(Increase) in receivables 19.7 (33.3) Increase in payables 27.6 9.1 Other
Slide 9: Capital Allocation Framework
Driving shareholder value CAPITAL ALLOCATION FRAMEWORK Reinvest for Progressive Return Strategic organic dividend excess to investments * growth policy shareholders 1 2 3 4 Maintain strong balance sheet with solid investment grade credit metrics * Typically these investments tend to be infrequent, b
Slide 10: FY 2018 Outlook
FY 2018 OUTLOOK Retail Focus on productivity, no net contribution from new space Wholesale H1 wholesale expected down a mid single digit percentage, reflecting potential Sales business disruption from Beauty Licensing Up 20% underlying including new Beauty licence from H2 Adjusted PBT Benefit from c
Slide 11: Key Strategic Pillars
Christopher bailey chief creative & chief executive officer Key strategic pillars Revenue Drivers OPTIMISING EFFICIENCY Product Focus Productive Space E-commerce Leadership Operational Excellence Inspired People One label New customer Burberry Business Redesigned our Launched redesigned Simplified o
Slide 12: Product Focus and Productive Space
PRODUCT FOCUS Simplification • SKU reduction of 15-20% • One label strategy Strategic category approach • Developing high potential categories including handbags Focus on fashion and newness • Success of runway collections • Enhanced novelty across assortment Beauty • Strategic partnership with Coty
Slide 13: E-commerce Leadership
E-COMMERCE LEADERSHIP Converting digital awareness to e-commerce sales • Relaunched mobile site • Mobile sales up almost 50% YoY Innovated with third parties • Collaborations with traditional online retailers • Innovating in social commerce Using digital technology • Increased speed of response to c
Slide 14: Operational Excellence: Operating Cost Base
operational excellence Operating cost base Group opex of £1.5bn split (%) Other IT costs Employees Marketing Depreciation/ Amortisation Property related costs 27
Slide 15: Operational Excellence and Cost Savings
Operational excellence Burberry Business Services • Increased productivity and efficiency by simplifying processes and fostering teamwork across functions Process • Significant savings through reduced office space requirements in London Simplification Non Stock Procurement • Global communications co
Slide 16: Measuring Our Performance
Measuring our performance Revenue Drivers OPTIMISING EFFICIENCY Product Focus Productive Space E-commerce Leadership Operational Excellence Inspired People Traffic Performance Operating margin management Sales (by category) Conversion Inventory turn Development Full price sell through Retention Savi
Slide 17: 2017: A Year of Transition, Laying Foundations for Future Growth
2017: A YEAR OF TRANSITION, laying foundations for future growth — on track with executing the productivity and efficiency agenda returning Burberry to growth — FULL BENEFITS WILL BUILD THROUGH TIME This page is intentionally blank
Slide 18: Appendix: Disclaimer
APPENDIX DISCLAIMER The financial information contained in this presentation is unaudited. Certain statements made in this presentation 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 res
Slide 19: Alternative Performance Measures
Alternative performance measures All metrics and commentary in this presentation are at reported FX and exclude adjusting items unless stated otherwise. Adjusting items are: • £26m Beauty licence intangible charge • £21m restructuring costs relating to the cost efficiency programme • £15m costs asso
Slide 20: Movement in Net Cash
MOVEMENT IN NET CASH 12 months to 31 March 2017 2016 £m £m Free cash flow 465.1 273.8 Acquisitions (68.8) - Dividends (164.5) (158.4) Share buyback (97.2) - ESOP purchases/other (11.7) (8.7) Exchange difference 26.0 1.4 Movement in net cash 148.9 108.1 Net cash at 31 March 809.2 660.3 37 Exchange ra
Slide 21: Licensing and ROIC Reconciliation
LICENSING 12 months to 31 March 2017 2016 Revenue £m £m • 1% of group revenue • Underlying -48%, reported FX -41% Revenue 25 42 • Planned expiry of Japanese licence Gross margin at 100% 25 42 Operating profit • Down £15m year-on-year Operating expenses (3) (5) • Reflecting lower revenue and costs re
Slide 22: IR Contacts
IR CONTACTS Charlotte Cowley Horseferry House VP, Investor Relations Horseferry Road charlotte.cowley@burberry.com London SW1P 2AW Annabel Gleeson Tel: +44 (0)20 3367 3524 Senior Investor Relations Manager annabel.gleeson@burberry.com www.burberryplc.com www.burberry.com Bryony Dimmer www.twitter.co