Slide 1: Building Profitable Growth
Building Profitable Growth 16 July 2024 Julie Lavington – Co-CEO and Co-Founder Ali Hall – Co-CEO and Co-Founder Steve Dilks – CFO 1
Slide 2: Agenda
Agenda • Executive Summary • The Strength of Our Brand • Financial Results FY24 / Q1 FY25 • Increasing Profitability 1. Margin 2. Further Growth in Scale at Greater Margin 3. Opening Stores 4. Expanding the Brand • The Future for Sosandar 2
Slide 3: Executive Summary
Executive Summary • Prioritisation of profitability • Driving full price sales • Uplift in margin accelerated in Q1 FY25 • Near term parity in revenue, but with greater profitability • Future revenue growth at higher margin • Imminent launch of shops in Chelmsford and Marlow • Self-funded from stron
Slide 4: The Strength of Our Brand
The Strength of Our Brand 4
Slide 5: Accessing the Customer Through All Channels
Accessing the Customer Through All Channels • Over 1 million women have Sosandar garments in their wardrobe • Over a quarter of a billion gross sales to date sosandar.com Concessions Wholesale International Own Stores 2016 2020 2022 2023 2024 5
Slide 6: The Success of the Sosandar Product Range
The Success of the Sosandar Product Range • Continual success of product across all categories • Top seller with all third-party partners • Number one contemporary womenswear brand on Next • Successful first launch internationally in Australia 6
Slide 7: Financial Results FY24 / Q1 FY25
Financial Results FY24 / Q1 FY25 7
Slide 8: KPI's: Focus On Margin and Full Price Sales
KPI’s: Focus On Margin and Full Price Sales Total Gross Profit Margin % 58.0% 20.0m Own Site - Site Visits 57.6% 57.5% 15.1m 15.1m 15.0m 57.0% 56.5% 10.0m 56.2% 56.0% 5.0m 55.5% 55.0% - FY2023 FY2024 FY2023 FY2024 Own Site Average Order Value Own Site - Conversion £103.00 £102.25 6.0% £102.00 £101.0
Slide 9: Robust FY24, Revenue +9% & Focus on Margin
Robust FY24, Revenue +9% & Focus on Margin FY2024 FY2023 Variance % £m £m £m Revenue 46.3 42.5 3.8 9% Cost of Goods (19.6) (18.6) (1.0) 5% • FY24 Revenue up 9% to £46.3m Gross Profit 26.7 23.8 2.8 12% Gross Profit % 57.6% 56.2% 144 bps • Gross margin up 140bps to 57.6% (H2 up by Admin expenses (26.4
Slide 10: Strong Cash Generation in H2: £8.3m at 31 March 2024
Strong Cash Generation in H2: £8.3m at 31 March 2024 Mar-24 Mar-23 £m £m • Strong cash balance of £8.3m Intangible assets - software 0.4 - Property, plant and equipment 0.3 0.4 Right of use asset 0.6 0.6 • Cash generative in H2 (£7.0m 30 Sept 2023) Deferred income tax asset 0.6 0.7 Total non-current
Slide 11: Self Funding Store Roll Out
Self Funding Store Roll Out FY2024 FY2023 £m £m Group EBITDA (ex. SBP charge) 0.2 2.2 Disposal of intagibles 0.1 - Change in inventory 1.4 (5.1) Change in trade and other receivables (0.0) (0.2) Change in trade and other payables (3.3) 1.6 • Store roll out will be self-funded from strong Net cash fl
Slide 12: Q1 FY25 KPI's: Substantial Improvement In Profitability
Q1 FY25 KPI’s: Substantial Improvement In Profitability Profit Before Tax Gross Margin % - 64.0% 63.4% FY2024 Q1 FY2025 Q1 (£0.1m) 62.0% (£0.2m) (£0.2m) (£0.3m) 60.0% (£0.4m) 58.0% 56.7% (£0.5m) 56.0% (£0.6m) (£0.7m) 54.0% (£0.8m) (£0.8m) 52.0% (£0.9m) FY2024 Q1 FY2025 Q1 Cash Net Revenue £12.0m £11
Slide 13: Increasing Profitability
Increasing Profitability 13
Slide 14: Strategic Goals
Strategic Goals • At least 10% PBT • £100m+ revenue • Key focuses: 1. Margin 2. Further Growth in Scale at Greater Margin 3. Opening Stores 4. Expanding the Brand 14
Slide 15: 1. Margin
1. Margin 15
Slide 16: Increasing the Margin
Increasing the Margin • Reduction of price promotions in H2 FY24 • Already sell at full RRP with all third-party partners • Significant margin gains made in FY24 • Re-basing customer expectations 16
Slide 17: Q1 FY2025 Significant Margin Increase
Q1 FY2025 Significant Margin Increase Margin 65.0% 63.4% 63.0% 61.0% Q1 Increased margin by 59.0% 57.6% 670bps on 57.0% Q1 previous year 56.0% 56.1% 55.0% 53.0% FY2022 FY2023 FY2024 FY2025 Q1 • Achieved entirely from reducing promotions • No change in intake margin or RRP 17
Slide 18: 80% Reduction in Price Promotion
80% Reduction in Price Promotion Price Promotions by Quarter on sosandar.com 80% Reduction Q1 Q2 Q3 Q4 Q1 FY24 FY25 Focus on full price sales 18
Slide 19: Why Margin is so Important: Bridge to £10m Profit
Why Margin is so Important Bridge to £10m Profit 19
Slide 20: 2. Further Growth in Scale at Greater Margin
2. Further Growth in Scale at Greater Margin 20
Slide 21: Stores Accelerate Business Growth
Stores Accelerate Business Growth Compounding Effect Stores Online Online 21 Now Future
Slide 22: Successful Peer Group Brands
Successful Peer Group Brands Brand 1 Brand 2 Brand 3 £m £m £m 25.12.2022 31.12.2022 28.01.2023 • Multi-channel Turnover £101.3m £143m £325m Gross Margin 62% 71% 60% • Large store estate PBT £11.1m £25.5m £52m PBT% 11% 18% 16% • PBT in excess of 10% No. of Stores 102 56 58 Source Latest Information a
Slide 23: 3. Opening Stores
3. Opening Stores 23
Slide 24: Sosandar Customers Want to Shop in Store
Sosandar Customers Want to Shop in Store “Open some stores as you 98% shop for clothing both in store and online are very popular. Would love to walk in to one They like the convenience of online shopping of your shops. Go on think about it.” They like the ability to touch, feel and try on pro
Slide 25: Stores Bring Increased Profitability
Stores Bring Increased Profitability Recruit Scale Margin Customers at No Cost 25
Slide 26: Shops are a Recruitment Vehicle for Customers, as Well as Being Profitable
Shops are a Recruitment Vehicle for Customers, as Well as Being Profitable in Their Own Right • 1,500 sq ft • 5-year term / 3-year break • £250k capex • £50k stock • £150k property cost • £750k - £1m p.a. average per store • Profitable - 20% contribution • Primary marketing vehicle 26
Slide 27: Store Location Criteria
Store Location Criteria • Where our existing customers’ over-index • A combination of: • Affluent market towns • Some city centres • Some shopping centres • Has to be the right location within the town • High footfall • Adjacencies include Mint Velvet and The White Company • First two shops will be
Slide 28: Bond Street, Chelmsford
88 Bond Street, Chelmsford Shop being fitted out now in Chelmsford, Mock up of how the front of the finished large scale graphics announce we are coming store will look 28
Slide 29: High Street, Marlow
22 High Steet, Marlow iMaansnecnaatehaiseae ine ie been cinld Deana ea laaaiblbait SOSANDAR
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Slide 31: Denim Lounge
DENIM LOUINGE i h Mai
Slide 32: 4. Expanding the Brand
4. Expanding the Brand
Slide 33: Other opportunities we are exploring
A Brand With Limitless Potential Other opportunities we are exploring Brand 3rd Party Franchises Licensing Growth (Longer Term) 33
Slide 34: The Future for Sosandar
The Future for Sosandar
Slide 35: The Virtuous Circle of Being a Multi-Channel Brand
The Virtuous Circle of Being a Multi-Channel Brand High Margin High Profitability Unlocking the full potential of the brand 35
Slide 36: Conclusion & Questions
Conclusion & Questions 36
Slide 37: Disclaimer
DISCLAIMER Important: Disclaimer and Notice to Readers This presentation is being made only to and directed at: (a) persons who have professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (t
Slide 38: Appendix
Appendix 38