Burberry Group plc · LSE:BRBY
Burberry — FY2015 Earnings Presentation
29 slides from Burberry's earnings presentation, May 20, 2015
Slide 1: Preliminary Results for the Twelve Months Ended 31 March 2015
PRELIMINARY RESULTS FOR THE TWELVE MONTHS ENDED 31 March 2015 CHRISTOPHER BAILEY — CHIEF CREATIVE AND CHIEF EXECUTIVE OFFICER
Slide 2: Highlights
FINANCIAL REVIEW — PRODUCTIVITY and service: THE CUSTOMER OPPORTUNITY — QUESTIONS HIGHLIGHTS • YOUNG OLD COMPANY • STRONG FINANCIAL PERFORMANCE • FOUR THEMES DROVE PERFORMANCE – Brand first – Famous for product – Customer centric – Productive and responsible
Slide 3: Brand First/Famous for Product; Customer Centric
BRAND FIRST/FAMOUS FOR PRODUCT • HERITAGE – Trench coats – Cashmere scarves – My Burberry – Ponchos • GLOBAL EVENTS – Shanghai to Los Angeles • DIGITAL INNOVATION – Social media platforms • FESTIVE CAMPAIGN CUSTOMER CENTRIC • MERGING ONLINE AND OFFLINE – Collect in store – Mobile relaunch – Third pa
Slide 4: Productive and Responsible
Productive and responsible • PRODUCTIVE – Across product, retail and processes • RESPONSIBLE – Environment – Communities – Our culture
Slide 5: Financial Highlights
CAROL FAIRWEATHER — CHIEF FINANCIAL OFFICER FINANCIAL HIGHLIGHTS CHANGE 12 MONTHS TO 31 MARCH 2015 2014 REPORTED UNDERLYING £M £M FX REVENUE 2,523 2,330 8% 11% ADJUSTED PBT 456 461 (1%) 7% ADJUSTED DILUTED EPS 76.9p 75.4p 2% NET CASH 552 403 37% DIVIDEND PER SHARE 35.2p 32.0p 10%
Slide 6: Revenue Grew 11% Underlying
REVENUE GREW 11% UNDERLYING £40m - £2,523m £225m £2,330m (£72m) FY 2014 EXCHANGE RETAIL WHOLESALE LICENSING FY 2015 RATES REVENUE REVENUE GREW 11% UNDERLYING • RETAIL – 71% of revenue – 14% underlying growth, up 11% at reported FX • Comparable sales up 9% (H1: 10%; H2: 9%) – Opened sixteen mainline
Slide 7: Growth by Product Division and Region
growth BY product division and Region BEAUTY: 8% CHILDRENS: 3% 26% GROWTH 1% GROWTH AMERICAS: 27% 16% GROWTH ASIA PACIFIC: 38% ACCESSORIES: 36% 9% GROWTH MENS: 23% 12% GROWTH 10% GROWTH EMEIA: 35% 12% GROWTH WOMENS: 30% 11% GROWTH FY 2015 RETAIL/WHOLESALE REVENUE % GROWTH ON UNDERLYING BASIS ADJUSTE
Slide 8: Retail/Wholesale Profit Up 8% Underlying
RETAIL/WHOLESALE PROFIT UP 8% UNDERLYING ADJUSTED OPERATING MARGIN 17.5% (0.6%) (0.6%) 16.3% £393m (£26m) £32m £399m FY 2014 EXCHANGE UNDERLYING FY 2015 RATES ADJUSTED RETAIL/WHOLESALE OPERATING PROFIT RETAIL/WHOLESALE PROFIT 12 MONTHS TO 31 MARCH 2015 2014 £M £M CHANGE RETAIL/WHOLESALE REVENUE 2,45
Slide 9: Licensing Profit
LICENSING PROFIT 12 MONTHS TO 31 MARCH 2015 2014 £M £M REVENUE 67.7 79.2 GROSS MARGIN AT 100% 67.7 79.2 OPERATING EXPENSES (11.7) (12.4) OPERATING PROFIT 56.0 66.8 OPERATING MARGIN 82.7% 84.3% £/YEN RATE 164 137 FY 2015 INCLUDES NEGATIVE FX IMPACT OF £11.5M IN REVENUE AND GROSS MARGIN AND NIL IN OPE
Slide 10: Income Statement
INCOME STATEMENT 12 MONTHS TO 31 MARCH 2015 2014 £M £M ADJUSTED OPERATING PROFIT 455.2 460.3 NET FINANCE CREDIT 0.6 0.7 ADJUSTED PROFIT BEFORE TAX 455.8 461.0 ADJUSTING ITEMS (11.2) (16.6) PROFIT BEFORE TAX 444.6 444.4 TAX (103.5) (112.1) NON-CONTROLLING INTEREST (4.8) (9.8) ATTRIBUTABLE PROFIT 336.
Slide 11: Cash Inflow from Operations
CASH INFLOW FROM OPERATIONS 12 MONTHS TO 31 MARCH 2015 2014 £M £M ADJUSTED OPERATING PROFIT 455.2 460.3 DEPRECIATION AND AMORTISATION 123.7 123.7 EMPLOYEE SHARE SCHEME COSTS 21.0 25.4 INCREASE IN INVENTORIES (15.1) (68.2) INCREASE IN RECEIVABLES (44.0) (58.1) INCREASE IN PAYABLES 19.7 42.3 OTHER 7.6
Slide 12: Movement in Net Cash
MOVEMENT IN NET CASH £568m (£156m) (£114m) (£145m) (£4m) £552m £403m FY 2014 OPERATING CAPITAL TAX DIVIDENDS OTHER FY 2015 CASHFLOW EXPENDITURE MOVEMENT IN NET CASH 12 MONTHS TO 31 MARCH 2015 2014 £M £M CASH INFLOW FROM OPERATIONS 568.1 535.5 CAPITAL EXPENDITURE (155.7) (154.0) ACQUISITIONS (3.4) (2
Slide 13: Net Cash/(Debt)
Net cash/(debt) • NET CASH OF £552M – After nearly £1bn of investment over last five years FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 – Over £700m of capital expenditure £552m – Over £200m on acquisitions, including Beauty and China £403m £298m £338m £297m • LEASE-ADJUSTED NET DEBT OF £402M NET – Calcu
Slide 14: FY 2016 Outlook
Rebasing fy 2015 £455m £10m (£28m) £437m £402m £412m £53m £25m FY 2015 EXCHANGE RATES JAPAN LICENSING REBASED FY 2015 JAPAN LICENSING RETAIL/WHOLESALE AND OTHER LICENSING ADJUSTED OPERATING PROFIT FY 2016 OUTLOOK RETAIL Low single-digit % growth in retail revenue from net new space WHOLESALE Unchang
Slide 15: Robust Business Momentum, Strong Financial Position
ROBUST business MOMENTUM — STRONG financial POSITION — FOCUS ON WHAT WE CAN CONTROL in more UNCERTAIN ENVIRONMENT
Slide 16: Productivity and Service: The Customer Opportunity
Steve sacks — CHIEF customer OFFICER PRODUCTIVITY AND SERVICE — THE CUSTOMER OPPORTUNITY
Slide 17: The Customer Opportunity
THE CUSTOMER OPPORTUNITY RETAIL EXCELLENCE BURBERRY PRIVATE CLIENTS CUSTOMER SERVICE CUSTOMER ANALYTICS OUR DATA PHYSICAL DIGITAL SOCIAL FOOTFALL INTERACTIONS INTERACTIONS INTERACTIONS CUSTOMER MARKETING PRODUCT MACRO SERVICE SPEND INFORMATION VARIABLES
Slide 18: Single Global View of the Customer
Single GLOBAL view of the customer How our Whether our customers have customers have When our customers browsed our interacted with us purchased and how long website on social media until they re-purchase What the most successful customer journeys are for individuals How many emails our The national
Slide 19: We Know Who Our Customers Are and Where They Shop
WE KNOW WHO OUR CUSTOMERS ARE AND WHERE THEY SHOP European Chinese NORTH American Middle eastern Brazilian Asian ex. china WE Know WHAT CHINESE CUSTOMERS want to BUY KEY ITEMS BOUGHT AT HOME KEY ITEMS BROWSED ON WEBSITE KEY ITEMS BOUGHT ABROAD
Slide 20: Spend Around Lunar New Year
We know when AND WHERE Chinese customers shop 70%+ OF SPEND AT HOME WEEKS SPEND AROUND LUNAR NEW YEAR benefits TO RETAIL • INSIGHT ENABLES BETTER DECISION-MAKING BY GLOBAL TEAMS • MAXIMISE SALES AND PROFIT – Right product, right store, right time • REFINE CUSTOMER SERVICE – Language speakers – Focus
Slide 21: Customer Value Management
CUSTOMER VALUE MANAGEMENT LIFETIME VALUE (£) ELITE CONNOISSEUR CLASSIC EXPLORER ASPIRER CVM ENABLES PERSONALISATION EXPERIENCE PRODUCT SERVICE
Slide 22: Benefits of CVM
BENEFITS OF CVM 150 150 100 100 CONTROL GROUP CVM CUSTOMERS CONTROL GROUP CVM CUSTOMERS % CUSTOMERS WHO RETURN AVERAGE CUSTOMER SPEND DIGITAL ANALYTICS
Slide 23: Driving Sales and Views: Digital Analytics
Driving sales: 100%+ sales uplift BEFORE AFTER Driving Views: 10%+ conversion uplift LEFT HAND NAVIGATION US LEFT HAND NAVIGATION VISUAL LINKS OTHER/BLEND JAPAN VISUAL LINKS PREFERRED NAVIGATION TOOLS
Slide 24: Regional Marketing
marketing REGIONAL MARKETING • BALANCE OF MARKETING – Local pre-travel – Marketing at destination • OPTIMISING REGIONAL MESSAGES
Slide 25: Targeted Marketing: Existing Customers on Social Media
Targeted MARKETING EXISTING CUSTOMERS ON SOCIAL MEDIA ACTIVE LAPSED HERITAGE CUSTOMERS CUSTOMERS Creating value from data today AND tomorrow
Slide 26: Continue to Embed Customer Analytics Throughout the Organisation
CONTINUE TO EMBED CUSTOMER ANALYTICS THROUHGHOUT THE organisation — ENHANCE AND PERSONALISE THE CUSTOMER EXPERIENCE THROUGH OUR OMNI-CHANNEL CAPABILITY — EXTEND AND DEEPEN CVM TO SERVE MORE CUSTOMERS AND TO DRIVE Retention
Slide 27: Appendix: Disclaimer
APPENDIX DISCLAIMER Certain statements made in this presentation are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward-l
Slide 28: Adjusted Measures
ADJUSTED MEASURES All metrics and commentary in this presentation are at reported FX and exclude adjusting items unless stated otherwise. Adjusting items are: A charge of £14.9m in reported operating expenses being the amortisation of the fragrance and beauty licence intangible asset (2014: £14.9m
Slide 29: IR Contacts
IR CONTACTS Fay Dodds Horseferry House VP, Investor Relations Horseferry Road fay.dodds@burberry.com London SW1P 2AW Charlotte Cowley Tel: +44 (0)20 3367 3524 Director of Investor Relations charlotte.cowley@burberry.com www.burberryplc.com www.twitter.com/burberrycorp Megan Saia www.burberry.com Inv