Premier Investments Limited · ASX:PMV
Premier Investments — FY2017 Earnings Presentation
44 slides from Premier Investments's earnings presentation, Sep 25, 2017
Slide 1: Premier Investments Limited 2017 Full Year Results Overview
PREMIER INVESTMENTS LIMITED 2017 Full Year Results Overview 25 September 2017 X 0
Slide 2: Agenda
Agenda Premier Investments Smiggle global expansion driving 1 FY17 overview 7 growth Premier Investments 2 FY17 consolidated financial results 8 Peter Alexander performing strongly 3 Premier Retail delivers record sales and EBIT Online - delivering a world class 9 platform and customer experience 4
Slide 3: FY17 Overview
PREMIER INVESTMENTS LTD FY17 OVERVIEW
Slide 4: Premier Investments FY17 overview
1 Premier Investments FY17 overview • Group profit – Underlying net profit before tax $146.8 million, up 5.8% on FY161,2 – Reported net profit after tax $105.1 million – Increased final dividend of 27 cps fully franked (FY16: 25 cps) – Total full year dividends of 53 cps fully franked (FY16: 48 cps)
Slide 5: Premier Investments FY17 overview
1 Premier Investments FY17 overview • Premier Retail contribution to Premier Investments performance: – Record Sales of $1,092.8 million, up 5.7% on FY161 – Record Underlying EBIT of $136.0 million, up 7.3% on FY161,2 – Record Underlying Profit before tax of $131.9 million, up 7.6% on FY161,2 – FY17
Slide 6: Premier Investments summarised consolidated income statement
2 Premier Investments summarised consolidated income statement $m FY17 FY16 Premier Retail EBIT – underlying (52 weeks) 136.0 126.7 Premier Investments income from associate (BRG) 14.8 13.8 Premier Investments other revenue (Interest, Rent & Other) 6.9 8.7 Premier Investments expenses (ex Premier Re
Slide 7: Premier Investments summarised consolidated balance sheet
2 Premier Investments summarised consolidated balance sheet $m 29 Jul 2017 30 Jul 2016 Assets Cash and cash equivalents 170.6 283.2 Inventories 140.8 123.6 Property, plant and equipment 214.4 139.2 Other assets 35.4 29.8 Deferred tax assets 35.8 18.9 Available-for-sale financial assets 67.7 - Invest
Slide 8: Premier Retail
PREMIER RETAIL
Slide 9: Premier Retail delivers record sales and EBIT
3 Premier Retail delivers record sales and EBIT • Record Sales of $1,092.8 million, up 5.7% on FY161 • Record Underlying EBIT of $136.0 million, up 7.3% on FY161,2 • Record Underlying Profit before tax of $131.9 million, up 7.6% on FY161,2 • FY17 LFL sales up 1.1%1 on a constant currency basis • All
Slide 10: Premier Retail performance
3 Premier Retail performance 52 weeks 52 Weeks 53 Weeks $000 to 29 Jul 2017 to 30 Jul 20162 Var LY to 30 Jul 2016 Sales 1,092,760 1,034,075 +5.7% 1,049,226 LFL sales (constant currency)2 +1.1% +3.5% +3.5% Gross Profit 689,424 660,293 +4.4% 670,280 Gross margin (%) 63.1% 63.9% -76 bps 63.9% Employee
Slide 11: FY17 trading overview – external events
4 FY17 trading overview – external events Record FY17 Sales and EBIT were delivered notwithstanding significant external headwinds: 1. Australian consumer sentiment low • Elevated household debt, out-of-cycle mortgage rate hikes, subdued wages growth and soaring energy prices all putting pressure on
Slide 12: FY17 trading overview – external events (continued)
4 FY17 trading overview – external events (continued) 3. Earthquake in New Zealand (14 November 2016) • 26 of 44 Premier Retail stores in the earthquake impacted area of New Zealand faced temporary closures of up to 12 days • Lower Hutt, Wellington (Top 5 Shopping Centre in New Zealand) was the most
Slide 13: FY17 trading overview – external events (continued)
4 FY17 trading overview – external events (continued) 5. Chadstone Redevelopment (Q1 1H17) • All 7 Premier Retail brands faced temporary closures and were significantly disrupted in Q1 during the major redevelopment at Chadstone Shopping Centre • Since re-opening in Q2, the investment in 1H17 in Fla
Slide 14: Premier Retail FY17 EBIT: strong growth continues
5 Premier Retail FY17 EBIT: strong growth continues • 6 consecutive years of EBIT growth • EBIT % to Sales up 19 bps • Key Gross Margin and CODB strategies delivering Underlying EBIT – 5 Year History 12.3% 12.4% $150 13% $140 $136.0 11.2% $126.7 12% $130 $120 10.4% 11% 10.0% $105.7 $110 $100 $92.8 1
Slide 15: Premier Retail FY17 EBIT: strong growth continues
5 Premier Retail FY17 EBIT: strong growth continues Gross Margin Strategies continue to deliver • Key long term foreign currency hedging policies allowing for merchandise planning • Direct sourcing initiatives continued to deliver benefits from new and existing suppliers • Sourcing from new geograph
Slide 16: Premier Retail FY17 EBIT: strong growth continues
5 Premier Retail FY17 EBIT: strong growth continues CODB – Store Profitability Focus • Focus on strategic growth initiatives has resulted in the opening of 234 highly profitable new Smiggle and Peter Alexander stores globally in the last 5 years, with 143 of these new stores opened outside of Austra
Slide 17: Premier Retail investing in growth
6 Premier Retail investing in growth • Investment in rapid growth of Smiggle continues in international markets 5 Year Cumulative Capital Investment • Investment continues in Peter Alexander new stores, refurbishments, refits, upsizing and back-of- 200.0 179.6 house 150.0 132.5 • Significant investm
Slide 18: Premier Retail investing in growth
6 Premier Retail investing in growth Premier Retail continues to invest in new stores, upgrades and refurbishments to deliver sustainable sales growth: 267 stores received capital investment, including 74 new stores in FY17 • 38 new stores opened in the United Kingdom • 2 new stores opened in the Re
Slide 19: Premier Retail investing in growth
6 Premier Retail investing in growth • 3 stores relocated and refurbished in Australia, including Chadstone Flagship • 5 stores refurbished in existing locations in Australia Chadstone Image to be inserted • 3 stores relocated and refurbished in Australia, including Chadstone Flagship • 6 stores ref
Slide 20: Smiggle: sales planned to exceed $400 million by FY20
7 Smiggle: sales planned to exceed $400 million by FY20 • Sales of $238.9m, up 28.8% on FY161 • Another record year for the brand 250 $239 400 underpinned by strong global LFL Smiggle Sales and Store Growth 225 growth and 58 new stores opened 350 globally 200 $185 300 Number of stores at year-end •
Slide 21: Smiggle: Australia and New Zealand
7 Smiggle: Australia and New Zealand • Another strong LFL and total sales performance in FY17 across all channels • Strong sales growth across both online and stores • Refurbishments in key flagship destinations have been highly successful, with further targeted investments to continue. Potential fo
Slide 22: Smiggle: Asia
7 Smiggle: Asia Singapore • Another strong LFL and total sales performance in FY17 • 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 • 2 new stores opened
Slide 23: Smiggle: Asia
7 Smiggle: Asia Malaysia • Following a successful launch into the market in April 2016 there are now 11 stores trading well ahead of expectations • 2 confirmed sites to open in 1H18 with potential for 4 further stores to open in 2H18 • The brand has been well received by locals and tourists, with ve
Slide 24: Smiggle: UK continues to trade ahead of expectations
7 Smiggle: UK continues to trade ahead of expectations • 102 stores trading in the UK at the end of FY17 • Another year of strong LFL and total sales growth • Despite FY17 being characterised by the uncertainty of Brexit, this was a year of records for the brand in the UK • 38 new stores opened duri
Slide 25: Smiggle Eurozone successful launch
7 Smiggle Eurozone successful launch Republic of Ireland • Smiggle’s first Eurozone country, Republic of Ireland, launched successfully in 2H17 • 2 stores opened in Dublin and both trading well ahead of expectations • A further 2 stores confirmed to open in 1H18, with potential for another 2 stores
Slide 26: Smiggle to enter Continental Europe
7 Smiggle to enter Continental Europe • Smiggle announces further growth by entering into Continental Europe • Smiggle to open first stores in the Netherlands and Belgium during calendar year 2018 Why the Netherlands and Belgium? • Combined personal stationery market of USD$1.7 billion* • In depth i
Slide 27: Peter Alexander performing strongly
8 Peter Alexander performing strongly Peter Alexander Sales and Store Growth 200 $191 140 180 $167 120 160 $140 Number of stores at year-end 140 100 $122 120 Sales AUD $m $101 80 100 $86 $73 60 80 109 $61 99 60 $50 89 $47 40 76 40 59 48 39 20 20 32 22 24 - - FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 F
Slide 28: Peter Alexander performing strongly
8 Peter Alexander performing strongly • Sales up 14.0% with strong total and LFL sales in both Australia and New Zealand1 • Celebrated 30 years of Peter Alexander Sleepwear • Excellent results from Christmas, Easter and Mother’s Day trading periods continuing to cement brand as a key gifting destina
Slide 29: Peter Alexander 2020 Growth Plan announced
8 Peter Alexander 2020 Growth Plan announced Peter Alexander 2020 Growth Plan Sales planned to exceed $250 million by FY20 • Targeting 40 new stores over next three years - 8 New stores and 4 New Myer concessions already confirmed to open in 1H18 • 12 existing stores identified to be upsized or refu
Slide 30: Peter Alexander 2020 Growth Plan – Merchandise Initiatives
8 Peter Alexander 2020 Growth Plan – Merchandise Initiatives • 3 key merchandise initiatives – Bath & Body, P.A. Plus Size expansion and Childrenswear expansion Bath & Body • Natural extension of the Peter Alexander brand • Trial of selected gift lines for Christmas 2017 • Full offer launched in the
Slide 31: Online – delivering a world class platform and customer experience
9 Online – delivering a world class platform and customer experience • Online sales of $68.1m up 44.3% on FY161 – well ahead of market growth of 0.7%2 for the 12 months ended July 2017 • The online business has grown from 1.1% of the respective markets’ sales in FY11 to 7.1% in FY17 • Investment con
Slide 32: Premier Retail summary FY17
10 Premier Retail summary FY17 Smiggle achieves significant growth • Record year for Smiggle with global sales of $238.9m up 28.8% (total sales up 80% over 2 years)1 • 58 new stores opened globally in FY17 - more than one new Smiggle store opened around the globe per week for the second consecutive
Slide 33: Premier Retail summary FY17
10 Premier Retail summary FY17 Peter Alexander performing strongly • Peter Alexander sales up 14.0% to $190.9m with strong total and LFL sales growth1 • Peter Alexander’s 2020 growth plan announced today – annual sales planned to exceed $250m by FY20 – Targeting 40 new stores to open over the next t
Slide 34: Dividends
DIVIDENDS
Slide 35: Dividends
11 Dividends • The Premier Board has declared an increased final dividend of 27 cps fully franked, up 8.0% (FY16 Final: 25 cps) • Total full year ordinary dividends of 53 cps fully franked, up 10.4% (FY16: 48 cps) Premier Investments Full Year Ordinary Dividends per share (cents) fully franked 34
Slide 36: Premier Retail Appendix A: Brand by Brand performance
PREMIER RETAIL Appendix A: ree Brand by Brand performance =~
Slide 37: Highlights: Smiggle
A Highlights Overview of Results • Record year with sales growth of 28.8%1 to Sales $238.9m $238.9m (total sales up 80% over 2 years) Var LY +28.8%1 • Record year underpinned by strong global LFL growth Store • 58 stores opened across Europe and Asia with movements Jul 16 Open Close2 Jul 17 more tha
Slide 38: Highlights: Peter Alexander
A Highlights • Peter Alexander sales up 14.0%1 to $190.9m with strong total and LFL sales growth • Peter Alexander’s 2020 growth plan announced: annual sales planned to exceed $250m by FY20 – Targeting 40 new stores to open over the next three years – 12 existing stores identified to be upsized and
Slide 39: Highlights
A Highlights • Solid sales growth of 1.5%1 compared to domestic market competitors • Investment in flagship store at Chadstone which opened in October 2016 delivering positive results • FY17 Sales were negatively impacted by one-off temporary store closures including the relocation at Chadstone, ear
Slide 40: Highlights
A Highlights • LFL Sales were stronger than overall sales and the brand delivered a seventh consecutive year of improved gross margins • 3 stores were closed in FY17 as part of the ongoing program to close unprofitable stores • Investment in flagship store at Chadstone which opened in October 2016 c
Slide 41: Highlights
A Highlights • FY17 Sales were negatively impacted by one-off temporary store closures including the relocation at Chadstone, earthquake impacted Lower Hutt (NZ) and building collapse at Cat & Fiddle (Hobart) • Investment in flagship store at Chadstone which opened in October 2016 delivering positiv
Slide 42: Highlights
A Highlights • Nicole Naccarella appointed as the new Group General Manager of Jacqui E (joined the business in June 2017). Nicole has deep Womenswear product development experience which will be of significant benefit to lead a revitalised Jacqui E product team in FY18 • FY17 Sales were negatively
Slide 43: Highlights
A Highlights • Portmans leadership team has been completely revitalised and renewed with the appointment of Linda Levy as the new Group General Manager of Portmans effective April 2017 • Return to positive LFL Sales during the last 7 weeks from mid-July giving the brand renewed momentum into FY18 •
Slide 44: Appendix B: Overview of Premier's non-IFRS financial information
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 r