City Chic Collective Limited · ASX:CCX
City Chic Collective — H1 2023 Earnings Presentation
26 slides from City Chic Collective's earnings presentation, Feb 27, 2023
Slide 1: Leading a World of Curves: 1H FY23 Results
L E A D I NG A WO R LD O F C U RV ES 1 H F Y 2 3 R E S U LT S 27 February 2023
Slide 2: Contents
Section 2, heading to be considered CONTENTS 1. 1H FY23 Result Overview 2. Pathway to Sustainable and Profitable Growth 3. 1H FY23 Financial Review 4. Trading Update & Outlook 5. Appendix Phil Ryan, CEO Peter McClelland, CFO
Slide 3: 1H FY23 Result Overview
1. 1H FY23 RESULT OVERVIEW city chic collective
Slide 4: 1H FY23 Results Overview
1H FY23 result reflects: 1H FY23 RESULTS OVERVIEW • Revenue 8% below last year1 impacted by economic Results reflect lower consumer demand and strong PCP headwinds however up 38%1 over 1H FY21 • Returning and core customers remain engaged GLOBAL SALES $168.6m ACTIVE CUSTOMERS2 1.33m • Global traffic
Slide 5: Sales by Channel & Region
SALES BY CHANNEL & REGION 1H FY23 revenue reflects: Sales reflect lower consumer demand in all regions • Demand impacted by economic headwinds, return to physical stores and post covid shopping patterns REVENUE BY REGION • Significant promotional activity across all regions which is both consumer de
Slide 6: Margin and Fulfilment Costs Review
MARGIN AND FULFILMENT COSTS REVIEW Impact of inflation and lower demand on key metrics Competition & input costs impacting margin Transitory cost pressure on fulfilment 1H FY23 Reduction of ~ 8% excluding additional Fulfilment increased by 5% of revenue in 1H FY23 due to: provisions due to: • Lower
Slide 7: Inventory Reduction Progressing Well
INVENTORY REDUCTION PROGRESSING WELL Inventory reductions on track to deliver full year targets1 INVENTORY UPDATE • Product in Market ready for 2H FY23 sales in all markets • 1H inventory reduction of $32.7m in line with expectations • EMEA is the focus of the excess inventory due to • Demand lower
Slide 8: Pathway to Sustainable, Profitable Growth
2 . P A T H W AY T O S U S TA I N A B L E P R O F I TA B L E GROWTH 8
Slide 9: Pathway to Sustainable, Profitable Growth
PATHWAY TO SUSTAINABLE, PROFITABLE GROWTH Our strategy to lead a World of Curves GLOBAL DIGITAL STORE GLOBAL PRODUCT RANGE FRONTS GLOBAL PLUS-SIZE MARKET • Strong connection with our customer • Leading brands in all markets • Significant TAM, currently addressing • Focused plus-size offering gives u
Slide 10: Continuing focus on margin and cost efficiencies
PATHWAY TO SUSTAINABLE, PROFITABLE GROWTH Continuing focus on margin and cost efficiencies 1. TARGETING TO RETURN TO HISTORICAL LEVELS OF 2. TARGETING TO RETURN FUFILMENT TO HISTORICAL GROSS MARGIN LEVELS ACTIONS TO INCREASE SELL PRICE BUILDING LONG TERM SCALABLE CUSTOMER FACING • Reduce promotional
Slide 11: International operating model has significant upside
PATHWAY TO SUSTAINABLE, PROFITABLE GROWTH International operating model has significant upside to sales and margin 4. INTERNATIONAL BUSINESS SET UP FOR GROWTH 5. MAXIMISE PARTNER OPPORTUNITY NORTH • Amazon - continuing to show exceptional • Market size represents a significant opportunity to grow AM
Slide 12: Ethical Trade Update
ETHICAL TRADE UPDATE We welcome the new opportunities and recognise the challenges that come with the growth of brands, geographic expansion and the diversification of our supply chain. We continue to build on our ethical sourcing policies and practices. Our goal is to work together with our global
Slide 13: 1H FY23 Financial Review
3. 1H FY23 FINANCIAL REVIEW 13
Slide 14: Financial Performance
FINANCIAL PERFORMANCE Sales A$m: 1H FY21 1H FY22 1H FY23 • Stores up 27% with covid closures in prior period • Online down 21% cycling strong prior comparable period Sales Revenue1 122.3 183.1 168.6 • Partners up 111% Revenue Growth vs PCP 49.7% (7.9%) 2 Gross trading margin Gross Trading Margin 76.
Slide 15: Financial Position
FINANCIAL POSITION Working Capital • Inventory reduction program on track with 1H reduction of $32.7m Inventory reductions on track and expected to continue into 2H with lower purchases • Additional inventory provisions of $19.6m • Trade & other payables reduced $34m since end of FY22 A$m 26 Dec 21
Slide 16: Trading Update & Outlook
4. T R A D I N G U P D AT E & OU TLOOK 16
Slide 17: FY23 Current Trade Update
FY23 CURRENT TRADE UPDATE Global trading remains uncertain, with recent sales trends continuing TRADING FOR 7 WEEKS TO 19 FEBRUARY 2023 • Sales down 17% which is an improvement from the November and December trends: • Stores have improved materially • ANZ and US improving • EMEA trend remains unchan
Slide 18: FY23 Outlook
FY23 OUTLOOK Navigating economic headwinds Benefits of strategic actions in logistics and margin expected to start to materialise towards end of 2H and into FY24 Market conditions expected to remain uncertain in 2H Inventory position better placed to navigate the uncertainty On track for inventory t
Slide 19: Summary
SUMMARY Strong fundamentals, with significant growth opportunity ahead PATHWAY TO SIGNIFICANT GLOBAL CUSTOMER-CENTRIC SIMPLIFIED OPERATING SUSTAINABLE, OPPORTUNITY APPROACH MODEL PROFITABLE GROWTH • Market-leader in global • Focus on who she is • Return to agile operations • Leverage existing cost p
Slide 20: Appendix
5. APPENDIX 20
Slide 21: Global Plus-Size Landscape
GLOBAL PLUS-SIZE LANDSCAPE Currently address US$100bn+ of the US$180bn1 total global plus size market Entry into US$45bn European market in FY22 with Navabi acquisition2 GROWTH • Plus-size market forecast to grow ANZ, $2bn c.7%1 annually • Average annual spend in plus-size is currently materially le
Slide 22: Our Global Presence
OUR GLOBAL PRESENCE Diversified business across geographies and categories AUSTRALIA & NEW ZEALAND AMERICAS EMEA Partners Wholesale Wholesale 1% 3% Marketplace 1% Marketplace 16% 14% Stores $79.5m 45% $68.9m $20.2m Online Revenue Revenue Revenue 54% Online 81% Online 85% • 555k Active Customers1 (up
Slide 23: Store Network
STORE NETWORK • 90 own stores as at period end • Portfolio rotation to newer fit-outs in 1H FY23: 2 new stores opened, 2 closures; 3 relocations/refits moving stores with ‘old’ look to the ‘Gold’ design look • 17 larger format flagship stores with average 1 footprint of c.200m2 with at least 1 in ev
Slide 24: Impact of AASB16
IMPACT OF AASB16 AASB16 adopted from 1 July 2019 Profit & Loss 1H FY23 1H FY23 1H FY23 1H FY22 Statutory AASB16 Underlying Underlying Variance A$ million Pre Underlying Variance % Post Impact Adjustments1 Pre $m AASB16 Pre AASB16 AASB16 AASB16 Sales 168.6 - 168.6 - 168.6 183.1 (14.6) (8.0%) Purchase
Slide 25: Earnings Reconciliation
EARNINGS RECONCILIATION A $ million 1H FY23 1H FY22 Underlying EBITDA 1 (17.8) 27.6 Depreciation & amortisation (7.8) (7.1) Underlying EBIT1 (25.7) 20.5 Net interest expense2 (1.5) (0.7) Underlying NPBT1 (27.1) 19.8 Taxation on Underlying NPBT 0.9 (6.1) Underlying NPAT (26.2) 13.6 Transaction relate
Slide 26: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER This presentation has been prepared by City Chic Collective Limited (the “Company”). It contains general background information about the Company’s activities and does not purport to be complete. It should be read in conjunction with the Company’s other periodic and con