Premier Investments Limited · ASX:PMV
Premier Investments — H1 2018 Earnings Presentation
40 slides from Premier Investments's earnings presentation, Mar 16, 2018
Slide 1: 2018 Half Year results overview
PREMIER INVESTMENTS LTD 2018 Half Year results overview 16 March 2018 X 0
Slide 2: Agenda
Agenda 1 Premier Investments 1H18 overview 2 Premier Investments 1H18 consolidated financial results 3 Premier Retail delivers record sales and EBIT 4 Premier Retail 1H18 EBIT 5 Premier Retail investing in growth 6 Smiggle global expansion driving growth 7 Peter Alexander performing strongly 8 Onlin
Slide 3: 1H18 Overview
PREMIER INVESTMENTS LIMITED 1H18 OVERVIEW ee Se Shale : WA aks
Slide 4: Premier Investments 1H18 overview
1 Premier Investments 1H18 overview • Group profit – Underlying net profit before tax $110.5 million, up 9.9% on 1H171 – Reported net profit after tax $78.6 million, up 9.4% on 1H17 – Increased record ordinary interim dividend of 29 cps fully franked, up 11.5% or 3 cps on 1H17 (1H17: 26 cps) • Premi
Slide 5: Premier Investments 1H18 overview
1 Premier Investments 1H18 overview • Premier Retail contribution to Premier Investments performance: – Record 1st Half sales of $630.1 million, up 7.0% on 1H17 – Record 1st Half Underlying EBIT of $102.5 million, up 10.2% on 1H171 – Record 1st Half Underlying EBIT % to Sales of 16.3%, up 47 bps on
Slide 6: Premier Investments summarised consolidated income statement
2 Premier Investments summarised consolidated income statement $m 1H18 1H17 Premier Retail EBIT – underlying 102.5 93.0 Premier Investments income from associate (BRG) 10.0 9.3 Premier Investments other revenue (Interest, Dividends, Rent & Other) 3.9 3.9 Premier Investments expenses (ex Premier Reta
Slide 7: Premier Investments summarised consolidated balance sheet
2 Premier Investments summarised consolidated balance sheet $m 27 Jan 2018 29 Jul 2017 Assets Cash and cash equivalents 185.5 170.6 Inventories 140.1 140.8 Property, plant and equipment 223.2 214.4 Other assets 33.0 35.4 Deferred tax assets 36.7 35.8 Listed investment at fair value 54.8 67.7 Investm
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Slide 9: Premier Retail delivers record sales and EBIT
3 Premier Retail delivers record sales and EBIT • Record 1st Half sales of $630.1 million, up 7.0% on 1H17 • Record 1st Half Underlying EBIT of $102.5 million, up 10.2% on 1H171 • Record 1st Half Underlying EBIT % to Sales of 16.3%, up 47 bps on 1H171 • Record 1st Half Underlying Net profit before t
Slide 10: Premier Retail performance
3 Premier Retail performance 26 weeks 26 Weeks $000 to 27 Jan 2018 to 28 Jan 2017 Var LY Sales 630,073 588,613 +7.0% LFL sales (constant currency) +2.4% +2.1% Gross Profit 397,925 376,863 +5.6% Gross margin (%) 63.2% 64.0% -87 bps Employee Expenses1 (143,360) (141,151) +1.6% % sales 22.8% 24.0% -123
Slide 11: Premier Retail 1H18 EBIT: strong growth continues
4 Premier Retail 1H18 EBIT: strong growth continues • 6 consecutive years of first half EBIT growth in the critical summer season • 1H18 Underlying EBIT % to Sales up 47 bps on 1H17 • Key Gross Margin and CODB strategies delivering Underlying EBIT – 6 Year History 120.0 17.0% 16.3% 110.0 15.8% 16.0%
Slide 12: Premier Retail 1H18 EBIT: strong growth continues
4 Premier Retail 1H18 EBIT: strong growth continues Gross Margin Strategies continue to deliver • 1H18 results were achieved notwithstanding significant external headwinds in the apparel sector, with retailers continuing to discount deeper and for longer to remain competitive • Key long term foreign
Slide 13: Premier Retail 1H18 EBIT: strong growth continues
4 Premier Retail 1H18 EBIT: strong growth continues CODB – Store Profitability Focus • Focus on strategic growth initiatives has resulted in the opening of 260 highly profitable new Smiggle and Peter Alexander stores globally in the last 5 years, with 190 of these new stores opened outside of Austra
Slide 14: Premier Retail investing in growth
5 Premier Retail investing in growth • Investment in rapid growth of Smiggle continues in international markets 5 year Cumulative Capital Investment 250.0 • Investment continues in Peter Alexander new 193.9 stores, refurbishments, refits, upsizing and back-of- 200.0 house 148.3 150.0 100.2 • Signifi
Slide 15: Premier Retail investing in growth
5 Premier Retail investing in growth Premier Retail continues to invest in new stores, upgrades and refurbishments to deliver sustainable sales growth: 331 stores received capital investment, including a record 53 new stores (including 4 Myer Concessions) opened in 1H18 • 23 new stores opened in the
Slide 16: Premier Retail investing in growth
5 Premier Retail investing in growth • 1 new store opened in Australia • 1 store refurbished in existing location in Australia • 1 store relocated and refurbished in New Zealand • 2 new stores opened in Australia • 4 stores relocated and refurbished in Australia • 3 stores refurbished in existing lo
Slide 17: Smiggle: Brand delivers record result
6 Smiggle: Brand delivers record result • Sales of $170.7 million, up 26.7% on 1H17 • Another record half for the brand underpinned by strong global LFL growth and 35 new stores opened globally • Smiggle expansion in Europe and Asia continues to deliver ahead of expectations, recording sales in exce
Slide 18: Smiggle: Australia and New Zealand
6 Smiggle: Australia and New Zealand Australia and New Zealand • Another strong LFL and total sales performance in 1H18 across all channels • Online continues to grow strongly through targeted investment in this highly profitable channel • 4 new stores have opened in 1H18 and are trading ahead of ex
Slide 19: Smiggle: Asia
6 Smiggle: Asia Singapore • Another strong LFL and total sales performance in 1H18 • Business in Singapore remains buoyant with strong demand from both locals and regional tourists; the regional travellers continue to provide insight on which markets the brand could enter next • The opportunity exis
Slide 20: Smiggle: Asia
6 Smiggle: Asia Malaysia • Following a successful launch into the market in April 2016 there are now 13 stores trading well ahead of expectations • The brand has been well received by locals and tourists, with very encouraging sales results and strong momentum building • Strong operational team in m
Slide 21: Smiggle: UK the largest market for Smiggle sales
6 Smiggle: UK the largest market for Smiggle sales • Another season of strong LFL and total sales growth • 125 stores trading in the UK at the end of 1H18 • 23 new stores opened during 1H18, including the key locations of Manchester Trafford Centre, Southampton West Quay, Oxford Westgate and Glasgow
Slide 22: Smiggle Eurozone launch continues to exceed expectations
6 Smiggle Eurozone launch continues to exceed expectations Republic of Ireland • Following a successful launch into the Republic of Ireland in April 2017, 5 stores were trading at the end of 1H18, well ahead of expectations • The brand launched in Cork and Limerick ahead of the critical Christmas pe
Slide 23: Smiggle to open first store in Continental Europe in Q2 FY19
6 Smiggle to open first store in Continental Europe in Q2 FY19 • Continental Europe expansion remains on track • First store in the Netherlands planned to open in Q2 FY19 • Smiggle reaffirms the opportunity to open 40-50 stores across the Netherlands and Belgium within 4-5 years of launch Why the Ne
Slide 24: Peter Alexander performing strongly
7 Peter Alexander performing strongly Peter Alexander Sales and Store Growth 120 $114 140 $99 100 120 Number of stores at half-year-end $87 80 $73 100 Sales AUD $m $63 80 60 $51 $44 $38 120 60 40 $32 97 101 $26 84 40 59 64 20 48 39 20 32 24 - - 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 (Note
Slide 25: Peter Alexander performing strongly
7 Peter Alexander performing strongly • Sales up 15.0% on 1H17 with strong total and LFL sales in both Australia and New Zealand • The brand continued to be a destination for key gifting events, with Christmas & Father’s Day delivering strong double digit growth • 8 new stores opened: Hurstville, Sy
Slide 26: Peter Alexander 2020 Growth Plan ahead of expectations
7 Peter Alexander 2020 Growth Plan ahead of expectations • 2020 Growth Plan progressing well ahead of expectations, with annual sales expected to exceed $250m by FY20 • 7 new stores confirmed to open in 2H18: – 4 full price: Mandurah, Norwood, Balgowlah & Green Hills – 1 Myer concession: Myer Hobart
Slide 27: Online – now expects to deliver $100 million annual sales, 2 years ahead of original 2020 plan
Online – now expects to deliver $100 million annual sales, 2 years ahead of 8 original 2020 plan • Online sales up 71.2% on 1H17 to $56.0 million • Online sales 10.2% of the respective markets’ sales 80.0 12.0% in 1H18 10.2% 70.0 • Investment continues in technology, people and new 60.0 56.0 10.0% m
Slide 28: Premier Retail summary 1H18
9 Premier Retail summary 1H18 Smiggle achieves significant growth • Record half for Smiggle with global sales of $170.7m up 26.7% on 1H17 (total sales up 60% over 2 years) • 35 new stores opened globally in 1H18 - more than one new Smiggle store opened around the globe per week for the fifth consecu
Slide 29: Premier Retail summary 1H18
9 Premier Retail summary 1H18 Peter Alexander performing strongly • Peter Alexander sales up 15.0% on 1H17 to $114.4m with strong total and LFL sales growth • Peter Alexander’s 2020 growth plan progressing ahead of expectations – annual sales expected to exceed $250m by FY20 – 7 stores to open in 2H
Slide 30: Dividends
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Slide 31: Dividend
10 Dividend • The Premier Board has declared an increased record interim dividend of 29 cps fully franked, up 11.5% on 1H17 (1H17 Interim: 26 cps) • The interim ordinary dividend will be payable on 15 May 2018 with record date of 1 May 2018 Premier Investments Interim Ordinary Dividends per Share (c
Slide 32: Premier Retail – Appendix A: Brand by brand performance
PREMIER RETAIL Appendix A A: BRAND BY BRAND PERFORMANCE
Slide 33: Highlights
A Highlights • Record half with sales growth of 26.7% Overview of Results on 1H17 to $170.7m (total sales up 60% Sales $170.7m over 2 years) Var LY +26.7% • Record half underpinned by strong global LFL growth Store movements Jul 17 Open Close1 Jan 18 • 35 stores opened globally with 60% of Australia
Slide 34: Highlights
A Highlights • Peter Alexander sales up 15.0% to $114.4m with strong total and LFL sales growth • Peter Alexander’s 2020 growth plan progressing ahead of expectations: annual sales expected to exceed $250m by FY20 – 7 stores to open in 2H18 puts the brand on target to deliver 40 new stores over the
Slide 35: Highlights
A Highlights • Turnaround continues to gain momentum under a revitalised Portmans leadership team following the appointment of Linda Levy as the new Group General Manager of Portmans in April 2017 • LFL sales were stronger than overall sales, with LFL Sales up 19.8% in Q2 and up 33.4% in January. Th
Slide 36: Highlights
A Highlights • Turnaround continues to gain momentum under a revitalised Jacqui E leadership team following the appointment of Nicole Naccarella as the new Group General Manager of Jacqui E in June 2017 • LFL sales were up 6.8% in Q2 and up 16.1% in January. The first 6 weeks of 2H18 have started st
Slide 37: Highlights
A Highlights • After delivering strong 4.7% sales growth in 1H17, sales in 1H18 of $107.3m were down 3.6% on a LFL basis. Pleasingly, Just Jeans led by Group General Manager Matthew McCormack has returned to positive LFL sales for the first 6 weeks of the new season • 3 stores were closed in 1H18 as
Slide 38: Highlights
A Highlights • Jay Jays, led by Group General Manager Linda Whitehead, delivered positive LFL Sales for the half • 3 stores were closed in 1H18 as part of the ongoing program to close unprofitable stores • Jay Jays has a strong, distinctive and competitive market position • Focus on disciplined exec
Slide 39: Highlights
A Highlights • Appointment of Judy Coomber to role of Managing Director Peter Alexander and Dotti, recognising Judy’s experience and track record of delivering results throughout her career. Together with the return of Deanna Moylan to the group as Dotti Group General Manager in March 2018 reporting
Slide 40: Appendix B: Overview of Premier's non-IFRS financial information
B B Appendix Overview of Premier’s non–IFRS financial information • IFRS financial information is financial information that is presented in accordance with all relevant accounting standards • Non-IFRS financial information is financial information that is presented other than in accordance with all