Slide 1: Investing for the future: Final results
Investing for the future Final results For the twelve months ended 28 February 2022
Slide 2: Introduction
Investing for the future Introduction • Mahmud Kamani - Investing For The Future • John Lyttle - Strategic Update • Neil Catto - Financial Review • Carol Kane - Our Product & Our Customer 01
Slide 3: Strategic update
Strategic John Lyttle, Group CEO update
Slide 4: Year Highlights
Investing for the future 2 Year Highlights Industry leading growth • 61% growth in revenue to £1.98bn • 43% growth in active customer numbers to 19.9 million • Over 80% market share growth in UK and US • Huge addressable market of 500 million people Investing to capture future opportunities • Increa
Slide 5: Building on existing foundations
Investing for the future Building on existing foundations Short term headwinds • International delivery proposition continues to be impacted by Covid related delays • Freight cost inflation impact on EBITDA totalling £60 million • Annualising increased returns rates as product mix normalises Strong
Slide 6: International focus for next 12 months
Investing for the future International focus for next 12 months • Accelerating US opportunity through opening of US DC in 2023, driving a step change in proposition • Strategic wholesale partnerships to build awareness and complement D2C offering • Marketing focus back to driving engagement through
Slide 7: Strong 2 year growth significantly ahead of competitors and markets
STRONG 2 YEAR GROWTH SIGNIFICANTLY AHEAD OF COMPETITORS AND MARKETS THAT WE OPERATE IN STRUCTURAL GROWTH WINNERS 61% t p do s G OS xt rk x UK -27 US oz M ort ou ite GF Ne ma lan H& Bo AS EU Gr Ind Sp Pri Za oo JD oh bo Source: company data, Statista Investing for the future 06
Slide 8: The year ahead: Investing for the future
Delivered to your door NOV & DEC APR JUN JUL & AUG Opened Website relaunched Marketplace launch Added marketplace Beauty Store & with boohoo group and beauty brands app launch brands JAN - APR JAN MAY JUN SEPT & OCT JAN & FEB Website, teams and proposition rebuild Beauty Club New CEO Debenhams Homew
Slide 9: Strategic update
Strategic update Global opportunity Technology Competitive proposition Supply chain Scaling & capacity Sustainability Investing for the future 08
Slide 10: Global opportunity
Global opportunity Total 2022 sales £1,203m £452m £328m Total market -3% -9% -10% vs 2 years ago Group growth vs 2 years ago 77% 71% 13% Net sales 99% 54% 52% retention - FY22 Net sales 106% 71% 76% retention - FY20 • UK revenue retention consistently at 100% • International retention has been impac
Slide 11: Global opportunity: wholesale partnerships
Global opportunity Expanding wholesale partnerships with significant further opportunity Territories covered by our wholesale partnerships Investing for the future 10
Slide 12: Leveraging our diverse supply chain
Leveraging our diverse supply chain Increased emphasis on near shore sourcing to drive flexibility, improve visibility and shorten lead time March 21: March 22: Short Lead mix: 42% Short Lead mix: 51% Long Lead mix: 58% Long Lead mix: 49% UK China North Africa Bangladesh Europe India Pakistan Invest
Slide 13: Scaling & capacity
Scaling & capacity • Significant scale in the UK with four locations • Investment in further efficiencies through automation and scale through expansion • Capacity in place to support over £4bn net sales from the UK • US DC expected to go live in 2023, step-changing proposition Location Description
Slide 14: Scaling & capacity: US distribution centre
Scaling & capacity US distribution centre • Expected phase 1 go-live, mid-2023 • Potential for £1.3bn net sales capacity • Located in Pennsylvania • Step change in proposition with Next Day and two-day Express delivery options • 95% US coverage within 3 days • Significant headroom for growth Investi
Slide 15: Competitive proposition
Competitive proposition Online fashion stores Total number of lines Social media following 231k 7 13 34m 60m 81k FY20 FY22 FY20 FY22 FY20 FY22 Number of websites and apps New lines per week Active customers 83 20m 14m 44 5.3k 3.0k FY20 FY22 FY20 FY22 FY20 FY22 Investing for the future 14
Slide 16: Upgrading our front-end technology
Upgrading our front-end technology • Launched Debenhams with headless technology platform • Re-platformed key websites • Innovated content offering e.g. gamification, MAN Active Investing for the future 15
Slide 17: Upgrading our back-end systems
Upgrading our back-end systems • Digitising back office functions to support scaling of our platform • Launched supplier hub, improving onboarding and engagement process • PO tracking launched, driving improved visibility of goods in our supply chain Investing for the future 16
Slide 18: Sustainability
Investing for the future Sustainability • Completed Agenda for Change programme ahead of the timescale outlined from the Independent Review’s recommendations • Member of Better Cotton Initiative, with great progress made in sourcing of BCI cotton • Working with Cotton Connect to grow responsible env
Slide 19: Resale site
resale site • Developed resale platform with in-house technology • Entry into rapidly growing resale market • Further extending our target addressable market • Leveraging brand awareness and reach to launch at scale Investing for the future 18
Slide 20: Summary
Investing for the future Summary Strong growth over last 2 years • Sales +61% at £1.98bn • Active Customers +43% to 19.9m • Extended TAM to up to half a billion people through M&A Strategic priorities in the year ahead • Improving agility • Control overhead • Developing wholesale partnerships • Land
Slide 21: Financial review
Financial Neil Catto, Group CFO review
Slide 22: Summary group income statement
Summary group income statement Twelve months End February (£m) FY22 FY21 FY20 Change 2 Year Change Group Sales 1,983 1,745 1,235 14% 61% Gross Profit 1,041 945 666 10% 56% Gross Margin 52.5% 54.2% 54.0% (170)bps (150)bps Adjusted EBITDA 125 174 127 (28)% (1)% Adjusted EBITDA Margin 6.3% 9.9% 10.3% (
Slide 23: Segmental result
Segmental result Twelve Months End February UK USA ROE ROW Total Sales (£m) 1,203 452 219 109 1,983 Change (%) 27% 4% (10)% (9)% 14% 2 Yr Change (%) 77% 71% 16% 6% 61% UK International 780 800 556 369 1,203 224 945 679 488 356 FY18 FY19 FY20 FY21 FY22 Investing for the future 22
Slide 24: Established brand 2 year growth is strong
Established brand 2 year growth is strong Vs. 2 Years Ago: Established brands+36% UK: +39% International +33% FY18 FY19 FY20 FY21 FY22 Established Brands UK Established Brands International • Established brands’ growth robust in UK – consolidating and improving on significant market share gains made
Slide 25: Group KPIs
Group KPIs • Growth in active customers remains high • Gains delivered across all major KPIs on a 1 and 2 year view, with significant share of wallet captured • Underpinning future growth potential Twelve months to 28 FY22 FY21 Change (%) 2 Yr February Change (%) Active Customers 19.9m 18.0m 10% 43%
Slide 26: Customer retention
Customer retention • Group growth continues to be driven by existing customers and new customer acquisition • Retention in FY22 impacted by strong customer acquisition at onset of pandemic in FY21 and international proposition challenges • Revenue retention in the UK remains robust, at approximately
Slide 27: Group operating costs
Group operating costs Twelve months to 28 February FY22 FY21 FY20 1 Yr 2 Yr As a % of net sales Change Change Marketing 11.1% 9.1% 9.5% 200bps 160bps Distribution 24.6% 24.2% 22.5% 40bps 210bps Other Admin Costs 12.6% 12.4% 13.3% 20bps (70)bps Total 48.3% 45.7% 45.3% 260bps 300bps Twelve months to 2
Slide 28: Impact of short-term freight cost headwinds
Impact of short-term freight cost headwinds Amount Ocean Freight Rate / Container (Jan 2020 = 100) +400% Outbound Carriage Inflation £38 million 500 Inbound Freight Inflation £22 million 400 Total Short-Term Cost Headwind £60 million 300 200 100 Outbound Carriage costs: FY22 vs. Pre-pandemic 0 Jan 2
Slide 29: Impact of transient headwinds and investments
Impact of transient headwinds and investments £11m £22m £60m £218m £185m £125m FY22 Freight EBITDA Multi-brand New EBITDA EBITDA inflation Pre Covid Platform Brands potential Costs Investment Marketing • FY22 EBITDA includes £60 million of Covid-related costs • Equivalent to 300 basis points of marg
Slide 30: Summary group cash flow statement
Summary group cash flow statement Twelve months to 28 February (m) FY22 FY21 Profit for the year (4) 93 Shared based payments 26 20 Depreciation & Amortisation 54 30 Finance income - (1) • Operating cash flow of £10 million driven by working capital investments Finance expense 2 0 • Elevated capital
Slide 31: Spotlight on Sheffield automation
Spotlight on Sheffield automation Sept 2018: Feb 2021 SPRING 2023 DC move complete, May 2020: Work completed on Migration of out- Operational ramp- operational chamber 2 Mezzanine bound operations to up completed from first chamber second chamber April 2018: Sept 2019 Sept 2020 Autumn 2022 Announce
Slide 32: FY23 financial guidance
Investing for the future FY23 financial guidance FY23 SALES AND EBITDA GUIDANCE • Focussed on retaining significant market share gains made over the last two years • Revenue percentage growth expected to be low-single digit • Adjusted EBITDA margins of 4% to 7%, reflecting elevated pandemic-related
Slide 33: Summary
Investing for the future Summary • Robust business model • Performance in core UK market demonstrates strength of the offering • Focussing on leveraging overheads, and landing strategic growth and efficiency initiatives • As pandemic-related headwinds ease, positioning the group to rebound to: • nor
Slide 34: Our product & our customers
Our product & our customers Carol Kane, Group Co-Founder & Executive Director
Slide 35: Introduction
Investing for the future Introduction • Product and market trends • The evolving customer • KM 2 years on 34
Slide 36: Slide 36
Slide 37: Price
AGE PRICE Investing for the future 36
Slide 38: Our product
Investing for the future Our product Changing product mix • Fashion is changing and as always we’re adapting accordingly. In the second half of last year: • Dress sales up over 100% YOY • Soft tailoring and Jumpsuits both up over 250% YOY • Denim down 25% YOY, Jersey Casual down ~40% • Returns impac
Slide 39: Brand Evolution
Brand Evolution ADAPTING TO CHANGING CUSTOMER DEMANDS Investing for the future 38
Slide 40: Marketing strategy
Investing for the future Marketing strategy • Optimising marketing spend across geographies • Relevant collaborations across brands • Driving engagement through physical events • Entering the metaverse 39
Slide 41: Karen Millen 2 years on
Investing for the future Karen Millen 2 years onHow the story has evolved • Strong growth in the UK • Successful launch into the US • Added additional categories, over 4k options available on site • Sales up ~70% on last year • One-third of sales are international 40
Slide 42: Summary
Investing for the future Summary • Phenomenal growth over the past two years • Continued strong growth in the UK where we have the right product, price and proposition • Focus on building infrastructure to be well positioned to take advantage of future growth opportunities • Increase capacity • Tran
Slide 43: Appendices
Appendices
Slide 44: Reported revenue
Reported revenue FY21 & FY22 Reported 3 Mths to 31st May 3 Mths to 31 August 4m to 31 December 2m to 28 February Sales FY22 FY21 % CHG % CER FY22 FY21 % CHG % CER FY22 FY21 % CHG % CER FY22 FY21 % CHG % CER Breakdown (£m) Total 486.1 367.8 +32% +32% 489.8 448.7 +9% +10% 714.5 660.8 +8% +9% 292.5 268
Slide 45: Group balance sheet
Group balance sheet Twelve Months End February (£m) FY22 FY21 Assets Intangible assets 128.5 118.3 Property, plant and equipment 349.2 141.6 Right-of-use assets 49.7 16.7 Financial assets 2.8 13.1 Deferred tax 7.5 3.2 Non-Current Assets 537.7 292.9 Working capital (12.7) (90.9) Lease liabilities (51
Slide 46: Financial calendar
Financial calendar FY21 & FY22 DATE EVENT 16 June 2022 (TBC) 1Q 23 TRADING UPDATE September / October 2022 (TBC) 1H 23 RESULTS ANNOUNCEMENT January 2023 (TBC) P3 23 TRADING UPDATE May 2023 (TBC) FY23 RESULTS ANNOUNCEMENT Investing for the future 45
Slide 47: Glossary
Glossary FY21 & FY22 ADJUSTED EBITDA Calculated as PBT, interest, depreciation, amortisation, share-based payment charges and exceptional items ADJUSTED EBIT Calculated as EBIT excluding share-based payment charges, amortisation of acquired intangible assets and exceptional items ADJUSTED PBT Calcul
Slide 48: Forward looking statements & disclaimer
Forward looking statements & disclaimer Forward looking statements Certain statements included or incorporated by reference within this presentation may be, or may be deemed to be, “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition. T
Slide 49: Forward looking statements & disclaimer
Forward looking statements & disclaimer Disclaimer This presentation and information communicated orally does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Company, nor shall it or any part of it or