Kmd Brands Limited · NZX:KMD
Kmd Brands — Investor Day (May 2023)
162 slides from Kmd Brands's investor day presentation, May 18, 2023
Slide 1: KMD Brands continues strong sales growth in Q3
KMD Brands Limited ASX / NZX announcement 18 May 2023 KMD Brands continues strong sales growth in Q3 KMD Brands Limited (ASX/NZX: KMD, “KMD” or the “Company”) is pleased to provide the following trading update for the quarter ending 30 April 2023 (Q3 FY23): • Sales growth across all brands continued
Slide 2: Investor Day 2023
For personal use only INVESTOR DAY 2023 18 MAY 2023
Slide 3: For personal use only
Sn SES EA AWAD ATUL ER —— age tia ss
Slide 4: Today's Agenda
TODAY’S AGENDA 1. INTRODUCTION 2. GROUP STRATEGY For personal use only 3. GROUP FINANCIALS 4. BUILDING GLOBAL BRANDS 5. ELEVATE DIGITAL 6. LEVERAGING OPERATIONAL EXCELLENCE 7. LEAD ESG 8. SUMMARY & QUESTIONS 3 I N V E S T O R D AY 2 0 2 3
Slide 5: Introduction
SECTION 1 For personal use only INTRODUCTION David Kirk Chairman 4 I N V E S T O R D AY 2 0 2 3 | INTRODUCTION
Slide 6: Owner of leading global outdoor brands
For personal use only OWNER OF LEADING GLOBAL OUTDOOR BRANDS 5 I N V E S T O R D AY 2 0 2 3 | INTRODUCTION
Slide 7: For personal use only
For personal use only 6 I N V E S T O R D AY 2 0 2 3 | INTRODUCTION
Slide 8: For personal use only
For personal use only 7 I N V E S T O R D AY 2 0 2 3 | INTRODUCTION
Slide 9: For personal use only
For personal use only 8 I N V E S T O R D AY 2 0 2 3 | INTRODUCTION
Slide 10: Our Team
OUR TEAM MICHAEL DALY CHRIS KINRAID FRANCES BLUNDELL For personal use only Group Chief Executive Officer Group Chief Financial Officer Chief Legal & ESG Officer 21 years with business 9 years with business 6 years with business AMY BECK President Oboz and BROOKE FARRIS JOLANN VAN DYK KMD Brands Nort
Slide 11: Group Strategy
SECTION 2 For personal use only GROUP STRATEGY Michael Daly Managing Director and Group CEO 10 I N V E S T O R D AY 2 0 2 3 | G R O U P S T R AT E G Y
Slide 12: Purpose
PURPOSE Inspiring people to For personal use only explore and love the outdoors 11 I N V E S T O R D AY 2 0 2 3 | G R O U P S T R AT E G Y
Slide 13: Vision
VISION To be the leading family For personal use only of global outdoor brands - designed for purpose, driven by innovation, best for people and planet 12 I N V E S T O R D AY 2 0 2 3 | G R O U P S T R AT E G Y
Slide 14: Video playing at the live event
For personal use only VIDEO PLAYING AT THE LIVE EVENT 13 I N V E S T O R D AY 2 0 2 3 | G R O U P S T R AT E G Y
Slide 15: B Corp Certified
B CORP CERTIFIED KMD BRANDS HAS ACHIEVED B CORP CERTIFICATION • In 2019, Kathmandu made history as one of the first significant apparel brands in ANZ to become B Corp certified • In 2023, Rip Curl and Oboz have achieved certification as well as For personal use only the Rip Curl wetsuit factory OnSm
Slide 16: Total Addressable Market
TOTAL ADDRESSABLE MARKET Outdoor and Surf are segments of a significantly larger global outerwear and footwear market For personal use only OUTDOOR US$40B*1 SURF US$8B*1 1. Statista and internal company estimates, including GIA report 2019 15 I N V E S T O R D AY 2 0 2 3 | G R O U P S T R AT E G Y
Slide 17: Delivering Value
DELIVERING VALUE For personal use only Iconic global outdoor brands, diversified by channels, geographies, products, and seasons GLOBAL BRANDS Shared group support functions: GROUP FUNCTIONS centres of excellence, implementing common platforms, and leveraging scale across brands COMMERCIAL SYSTEMS F
Slide 18: Regional Diversification
REGIONAL DIVERSIFICATION We operate over 300 stores globally, and our brands are sold in over 8,500 locations EUROPE NORTH AMERICA For personal use only ~$100m Sales 22 Owned Stores 16 Licensed Stores +2,200 Wholesale Doors ~$240m Sales 32 Owned Stores 20 Licensed Stores ASIA +4,000 Wholesale Doors
Slide 19: Strategic Pillars
STRATEGIC PILLARS For personal use only BUILD GLOBAL ELEVATE LEVERAGE LEAD IN BRANDS DIGITAL OPERATIONAL ESG EXCELLENCE Expand global footprint and Invest in Group digital Deliver operational excellence Lead in environmental, social invest in world class brand and platforms to deliver a truly to all
Slide 20: Our Advantage
OUR ADVANTAGE BRANDS iconic global outdoor brands DIVERSIFIED by channels, geographies, products, and seasons For personal use only PRODUCTS innovative products designed for a purpose CONSUMERS loyal, active consumers TEAM engaged and talented team ESG benefit mindset and leadership in ESG WELL POSI
Slide 21: Group Financials
SECTION 3 For personal use only GROUP FINANCIALS Chris Kinraid Group CFO 20 I N V E S T O R D AY 2 0 2 3 | GROUP FINANCIALS
Slide 22: A History of Growing Organically and Through Acquisition
A HISTORY OF GROWING ORGANICALLY AND THROUGH ACQUISITION SALES BY BRAND (NZ $m) Kathmandu Oboz Rip Curl 1,120.4 922.8 979.8 801.5 For personal use only 497.4 538.9 409.4 425.6 445.3 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Jan 23 Rolling 12 months GROUP UNDERLYING EBITDA (NZ $m)*1,2 127.1 109.5 98.4
Slide 23: Resilience Through Diversification
RESILIENCE THROUGH DIVERSIFICATION ROLLING 12 MONTH SALES MIX TO JAN 23 For personal use only Oboz Licensing / Rest of World 8% Royalties 1% 6% Europe Wholesale 9% 30% By By By Brand Channel North Region America Retail 21% Online 59% Australia Kathmandu Rip Curl 10% New 53% 40% 52% Zealand 11% 22 I
Slide 24: Group Refinance Completed
GROUP REFINANCE COMPLETED NZ$310m SUSTAINABILITY LINKED REVOLVING FACILITY SYNDICATION COMPLETED • High quality, diverse funding group secured, consisting of major Australian banks and international liquidity providers • Increased to 3.5-year tenor, providing significant liquidity head room and fund
Slide 25: Dividend History
DIVIDEND HISTORY DIVIDENDS DECLARED (NZ $m) Interim Final For personal use only ~$135m 42.5 36.2 35.5 21.3 27.2 21.3 DIVIDENDS 9.0 COVID - 14.2 21.3 21.3 DECLARED 0.0 - FY19 FY20 FY21 FY22 FY23 FY19 - FY23 DIVIDENDS DECLARED (NZ cents per share) Interim 4.0 - 2.0 3.0 3.0 Final 12.0 - 3.0 3.0 FORWARD
Slide 26: Disciplined Strategic Capital Investments
DISCIPLINED STRATEGIC CAPITAL INVESTMENTS For personal use only RETAIL BRICKS AND MORTAR DIGITAL CUSTOMER • Kathmandu store roll out ~12 • Continued system consolidation • Ongoing roll-out of Loyalty stores annually to finalise Rip Curl integration platform • Rip Curl additional stores ~10 • Supply
Slide 27: Capital Allocation
CAPITAL ALLOCATION TARGET DIVIDENDS LEVERAGE RATIO ~$300m For personal use only • Payout ratio range 50-70% of NPAT • Maintain conservative net debt to ~$300M depending on capital requirements EBITDA ratio between 0.0x to 0.5x (cash neutral position) CUMULATIVE CUMULATIVE FREE CASH FREE CASH CAPITAL
Slide 28: Q3 FY23 Trading Update
Q3 FY23 TRADING UPDATE TOTAL SALES Q3 YTD GROWTH FY23 FY23 For personal use only 3 months 9 months Feb 23 to Aug 22 to Apr 23 Apr 23 Rip Curl 7.9% 15.0% Kathmandu 11.3% 36.0% Oboz 120.3% 122.7% Group 15.6% 27.7% • Sales growth across all brands continued in Q3 • Gross margin remained resilient in Q3
Slide 29: Building Global Brands
SECTION 4 For personal use only BUILDING GLOBAL BRANDS Michael Daly Managing Director and Group CEO 28 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS
Slide 30: How We Successfully Build Global Brands
GLOBAL BRANDS HOW WE SUCCESSFULLY BUILD GLOBAL BRANDS • Clear purpose and vision for our brands • A motivated, engaged and talented team For personal use only • Strong foundations built around activities / sports • Deep understanding of our customer needs • Positive and enhanced customer experiences
Slide 31: Brooke Farris, Rip Curl CEO
For personal use only Brooke Farris Rip Curl CEO 30 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 32: Our Purpose
OUR PURPOSE For personal use only To provide an environment where our crew can live their Search and feel the spirit of surfing in their work. And, to create innovative, functional and durable products for The Search. 31 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 33: Our Vision
OUR VISION For personal use only “TO BE REGARDED IN ALL THAT WE DO AS THE ULTIMATE SURFING COMPANY…” 32 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 34: Our Regions
OUR REGIONS For personal use only AUSTRALIA USA EUROPE SMALL REGIONS & LICENSEES Number 1 Brand Top 6 Brand Clear Number 2 Brand Number 1 Brand 33 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 35: Sales History
SALES HISTORY TOTAL SALES (NZ $m) For personal use only 585 537 489 490 437 FY19 FY20 FY21 FY22 Jan 23 Rolling 12 months 1. FY19 includes management results for Rip Curl pre-acquisition 2. FY20 includes management results for Rip Curl for the three months pre-acquisition, plus nine months post-acqui
Slide 36: Highlights
HIGHLIGHTS VIDEO PLAYING AT THE LIVE EVENT For personal use only 35 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 37: Growth Initiatives
GROWTH INITIATIVES For personal use only 1. BRAND 2. PRODUCT 3. CHANNEL 4. GEOGRAPHIES 36 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 38: 1. Brand
1. BRAND For personal use only 37 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 39: Respect for the Environment
RESPECT FOR THE ENVIRONMENT IN WHICH WE SEARCH. For personal use only 38 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 40: Club Rip Curl
CLUB RIP CURL THE LARGEST AND MOST ENGAGED SURF AND BEACH COMMUNITY ON THE PLANET For personal use only 39 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 41: Consumer Driven Content
CONSUMER DRIVEN VIDEO PLAYING CONTENT AT THE LIVE EVENT For personal use only 40 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 42: High Performance
HIGH PERFORMANCE WSL WORLD TOUR For personal use only 41 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 43: 2. Product
2. PRODUCT For personal use only 42 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 44: Product
PRODUCT For personal use only QUALITY SUSTAINABILITY INNOVATION CREATIVITY 43 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 45: Best at Categories
BEST AT CATEGORIES WETSUITS BOARDSHORTS SWIM TIDE WATCHES For personal use only 44 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 46: Product in Focus
PRODUCT IN FOCUS WOMENS KIDS WINTER For personal use only 45 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 47: Women in Focus
WOMEN IN FOCUS For personal use only Design Products with Purpose Elevate and Expand Wholesale Create Inclusive Content Open Women's Stores Cultivate Culture and Leadership 46 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 48: Lead in Innovation
LEAD IN INNOVATION MIRAGE ACTIVATE THE ONE FUSION For personal use only 47 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 49: Innovation Road Map
INNOVATION ROAD MAP 2023 — 2025 For personal use only 48 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 50: Search GPS
SEARCH GPS AN EVOLUTION OF A REVOLUTION For personal use only 49 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 51: Apple Watch App
APPLE WATCH APP For personal use only 50 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 52: Rip Curl Search GPS Virtual Pro
RIP CURL SEARCH GPS VIRTUAL PRO For personal use only 51 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 53: Video playing at the live event
For personal use only VIDEO PLAYING AT THE LIVE EVENT 52 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 54: 3. Channel
3. CHANNEL For personal use only 53 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 55: Sales Mix by Channel
RIP CURL SALES MIX BY CHANNEL Licensing / Other 2% For personal use only Licensing / Other 2% Wholesale 43% Retail Stores ROLLING Retail Stores 49% 12 MONTHS 49% Wholesale FY19 46% JAN 23 Online 3% Online 6% 1. FY19 includes management results for Rip Curl pre-acquisition 54 I N V E S T O R D AY 2 0
Slide 56: Multi-Channel Excellence
MULTI-CHANNEL EXCELLENCE For personal use only DIRECT TO WHOLESALE CONSUMER 55 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 57: Direct to Consumer
DIRECT TO CONSUMER Operated by Rip Curl ANZ NA EU JAPAN BRAZIL THAILAND OTHER TOTAL Rip Curl Flagship 51 25 19 1 96 Rip Curl Outlets 15 7 3 4 29 For personal use only Multi Brand 45 45 Ecommerce 2 1 1 1 1 6 Sub-Total * 113 33 23 1 6 0 0 176 Operated by Partners ANZ NA EU JAPAN BRAZIL THAILAND OTHER
Slide 58: Expanding Direct to Consumer
EXPANDING DIRECT TO CONSUMER For personal use only Global Implementation of Club Rip Curl Launch and Leverage Unified Commerce Launch Marketplace Website Upgrade and CX Enhancements Expansion of Flagship Stores 57 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 59: Expanding Direct to Consumer: Retail
EXPANDING DIRECT TO CONSUMER For personal use only RETAIL Airports, Beach, Wave Pools and Women's Stores Strategic, Productive and Sustainable Ozmosis 10 New Stores per Year 58 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL 58
Slide 60: Growing Wholesale
GROWING WHOLESALE For personal use only Focus on Most Valuable Partner Accounts Target Category Growth Opportunities Open New Wholesale Doorways Open Licensed Stores with Key Partners 59 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL 59
Slide 61: Growing Wholesale: Shop in Shop Buildouts
GROWING WHOLESALE SHOP IN SHOP BUILDOUTS For personal use only 60 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 62: 4. Geographies
4. GEOGRAPHIES For personal use only 61 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 63: Sales Mix by Geography
RIP CURL SALES MIX BY GEOGRAPHY Rest of World 12% For personal use only Rest of World 18% Australia 44% Australia 42% Europe 17% Europe 16% ROLLING FY19 12 MONTHS JAN 23 North America New Zealand 25% 2% North America 22% New Zealand 2% 1. FY19 includes management results for Rip Curl pre-acquisition
Slide 64: North America
NORTH AMERICA For personal use only New Leadership Grow in Core Specialty Stores Expand License Stores: Airport, Mexico and Central America focus Hawaii Retail Expansion Re-Launch Amazon Marketplace Be Bold and Brave with our Products 63 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CU
Slide 65: Global
GLOBAL For personal use only Explore New Product Licensing Opportunities Identify New Licensees, Champion Our Existing Ones A Stronger Indonesia and Thailand Explore New Countries for Retail Expansion Grow Our European Marketplace Presence Test Company Owned Retail in Brazil 64 I N V E S T O R D AY
Slide 66: Metrics That Matter
METRICS THAT MATTER For personal use only 10 NEW STORES 15% WOMENS ONLINE 25% PER YEAR EBITDA 50/50 OF DTC 18% 1 MILLION CLUB B CORP TOP 3 NORTH WORKING RIP CURL CERTIFIED AMERICA CAPITAL MEMBERS 65 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 67: World's Number 1 Surf Brand
WORLD'S NUMBER 1 SURF BRAND For personal use only 66 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | RIP CURL
Slide 68: Michael Daly, Kathmandu CEO
For personal use only Michael Daly Kathmandu CEO 67 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 69: Our Purpose
OUR PURPOSE For personal use only 68 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 70: Global vision statement
For personal use only It’s a truly global vision. To strive for something this ambitious, we’ll need the most courageous, joyful, open people along for the ride. We’ll need to design our little hearts out, we’ll need to challenge convention and be a little more out there. We’ll need to come together
Slide 71: Kathmandu Sales Performance
KATHMANDU SALES PERFORMANCE SALES HISTORY (NZ $m) For personal use only 481 475 445 447 426 429 409 382 357 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Jan 23 Rolling 12 months 70 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | K AT H M A N D U
Slide 72: Growth Initiatives
GROWTH INITIATIVES For personal use only 1 2 3 4 BRAND PRODUCT CHANNEL GEOGRAPHIES 71 71 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | K AT H M A N D U
Slide 73: 1. Brand
For personal use only 1. BRAND 72 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | K AT H M A N D U
Slide 74: Refining Our Core Target Focus
REFINING OUR CORE TARGET FOCUS For personal use only % % % % % 45 18 14 12 11 % of market (ANZ) Balance Outdoor Outdoor Social Experience Seekers Enthusiasts Athletes Butterflies Seekers 73 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | K AT H M A N D U
Slide 75: Target Customer: Outdoor Enthusiasts
TARGET Outdoor Enthusiasts CUSTOMER “I’m constantly thinking about my place in the world. I want to have an impact beyond my own life.” For personal use only “Going outdoors helps me reflect, to slow down and take stock of everything.” “I feel calmed by fresh air so I’ll do anything from Kayaking to
Slide 76: Outdoor Active
For personal use only Outdoor Active HIKE ACTIVE JOURNEY
Slide 77: Connecting with the Outdoors
Connecting with the Outdoors For personal use only COMMUNITY PARTNERSHIPS AMBASSADORS
Slide 78: Out There Rewards
OUT THERE REWARDS For personal use only 77 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 79: Video playing at the live event
For personal use only VIDEO PLAYING AT THE LIVE EVENT 78 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | K AT H M A N D U
Slide 80: 2. Product
For personal use only 2. PRODUCT 79 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 81: Key Product Categories
KEY PRODUCT CATEGORIES For personal use only INSULATION BOTTOMS PACKS 80 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 82: Product Innovation
PRODUCT INNOVATION For personal use only 2021 2022 2023 2023 2023 AUTUMN 21 WINTER 22 UPF50 + CARILLON SHIRT HELI R BIOFLEECE LAUNCH BIODOWN LAUNCH PEPPERMINT HOLLOW FIBER DIGITAL PRODUCT ID (ISPO AWARD) SUN-SCOUT 81 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A
Slide 83: Bringing Product Innovation to Life
BRINGING PRODUCT INNOVATION TO LIFE For personal use only
Slide 84: Breadth of Offer
BREADTH OF OFFER For personal use only Fringe Core Customer Fringe Reset of core lines to reduce SKU volume and align Balance of seasonal range to ensure sustainable stock ranges more to current customer management whilst providing a better experience for core products through availability 83 I N V
Slide 85: 3. Channel
For personal use only 3. CHANNEL 84 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 86: Channel Mix
CHANNEL MIX For personal use only Online 10% Online 16% ROLLING FY19 12 MONTHS JAN 23 Retail Stores Retail 84% Stores 90% 85 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 87: Retail
RETAIL Kathmandu Retail Store Count For personal use only ~200 168 165 160 155 155 >> Jul 19 Jul 20 Jul 21 Jul 22 Jan 23 Target • Opportunity to increase retail store penetration in Australasia 86 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 88: Online
ONLINE Over the last 9 months we have doubled down on user experience and customer centricity by implementing: • Fully personalised product pages and recommendations for every single customer to drive engagement and revenue For personal use only • Shoppable user generated content to further increase
Slide 89: Wholesale
WHOLESALE Kathmandu International Sales (NZ $m) For personal use only ~100 1.4 >> Jan 23 Target 6 months • Assessment of focus markets this year, before accelerating execution 88 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 90: 4. Geographies
For personal use only 4. GEOGRAPHIES 89 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 91: International Expansion
INTERNATIONAL EXPANSION For personal use only 90 I N V E S T O R D AY 2 0 2 3 | B U I L D I N G G L O B A L B R A N D S | K AT H M A N D U
Slide 92: Video playing at the live event
For personal use only VIDEO PLAYING AT THE LIVE EVENT 91 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | K AT H M A N D U
Slide 93: Metrics That Matter
METRICS THAT MATTER • Kathmandu Opportunities; Same store growth (less breadth, more depth), New Stores, Online penetration/Marketplaces. B CORP 20% GROW TO ONLINE 25% For personal use only CERTIFIED EBITDA 200 STORES OF DTC NEW LOOK AND 15% $100M RE-LAUNCH FEEL STORE WORKING INTERNATIONAL LOYALTY C
Slide 94: Amy Beck, President Oboz and KMD Brands North America
For personal use only Amy Beck President Oboz and KMD Brands North America 93 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
Slide 95: For personal use only
For personal use only 94 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
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For personal use only 95 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
Slide 97: Video playing at the live event
For personal use only VIDEO PLAYING AT THE LIVE EVENT 96 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
Slide 98: Supply Chain Impacts
SUPPLY CHAIN For personal use only IMPACTS 97 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
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For personal use only 111 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
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For personal use only 112 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
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For personal use only 113 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
Slide 115: North America, Canada Focus, Europe Relaunch, Australia & New Zealand
NORTH AMERICA AUSTRALIA & CANADA FOCUS NEW ZEALAND EUROPE RELAUNCH FY24 LAUNCH SPRING 24
Slide 116: For personal use only
For personal use only 115 I N V E S T O R D AY 2 0 2 3 | BUILDING GLOBAL BRANDS | OBOZ
Slide 117: Elevate Digital
SECTION 5 For personal use only ELEVATE DIGITAL Michael Daly Managing Director and Group CEO 116 I N V E S T O R D AY 2 0 2 3 | E L E V AT E D I G I TA L
Slide 118: Elevate Digital: Focus Areas
ELEVATE DIGITAL E-Commerce and FOCUS AREAS Marketplaces • Key opportunity to accelerate global brand growth • Platforms are being put in place, with focus shifting to For personal use only online trading and execution • Significant potential for all brands to expand loyalty and Unified commerce pers
Slide 119: E-Commerce
E-COMMERCE ONLINE SALES ARE SIGNIFICANTLY ABOVE PRE-COVID LEVELS • In the last twelve months, consumers have returned to shopping in stores. Our omni-channel offer supports this consumer choice • Online sales have stabilised c. 66% above FY19 pre-COVID levels For personal use only • Online comprised
Slide 120: E-Commerce by Brand
E-COMMERCE BY BRAND KATHMANDU ONLINE SALES (NZ $m) 120.0 Online sales % of DTC sales 25.0% SIGNIFICANT E-COMMERCE OPPORTUNITIES 100.0 18.8% 18.7% 20.0% 16.0% 15.9% • Kathmandu is a more mature online business, supported by class leading 80.0 15.0% platforms 9.6% 10.3% 80.4 60.0 7.7% 71.5 70.7 10.0%
Slide 121: Marketplaces
MARKETPLACES MARKETPLACES TO SUPPLEMENT AND ACCELERATE E-COMMERCE GROWTH: For personal use only • Greater international reach • Consumer choice and convenience • Cost-effective to launch • Accelerate growth and brand recognition in new markets • Additional channel for excess stock 120 I N V E S T O
Slide 122: Digital Platforms
DIGITAL PLATFORMS • Significant investment since Rip Curl acquisition in customer-facing, best in class digital platforms to support unified commerce objectives DIRECT TO CONSUMER • Both Rip Curl and Kathmandu are utilising the full functionality of these For personal use only platforms in Australas
Slide 123: Rip Curl Loyalty
RIP CURL LOYALTY GROUP TECHNOLOGY PLATFORMS FOR SUCCESS • Industry-leading global technology platforms selected for unified customer data and personalisation, enabling more targeted communication with the Group’s most valuable customers For personal use only • For the first time, Rip Curl customers
Slide 124: Kathmandu Loyalty
KATHMANDU LOYALTY KATHMANDU HAS AN ACTIVE AND ENGAGED CUSTOMER BASE • 2 million active Summit Club members • c. 70% of Kathmandu sales are from Summit Club members • Summit Club members spend over 20% more per transaction than non- For personal use only members • Net Promoter Score 73 across all cus
Slide 125: Other Digital Initiatives
OTHER DIGITAL INITIATIVES OPPORTUNITIES TO FURTHER ENHANCE THE DIGITAL EXPERIENCE • B2B platform roll out to all brands in all regions • Complete unified commerce initiatives to further improve consumer experiences including: For personal use only • Membership • Find In Store • Gift Cards • Instore
Slide 126: Metric That Matters
METRIC THAT MATTERS LONG-TERM TARGET ~25% For personal use only 30.0% ONLINE % OF DTC SALES 25.0% 25.0% 20.0% 15.8% 16.5% 14.7% 14.1% 15.0% 8.9% 10.0% 7.7% 6.0% 5.0% 0.0% FY17 FY18 FY19 FY20 FY21 FY22 Jan 23 Long-term -5.0% Rolling Target 12 months 1. DTC sales include all sales from retail stores,
Slide 127: Leveraging Operational Excellence
SECTION 6 LEVERAGING For personal use only OPERATIONAL EXCELLENCE Chris Kinraid Group CFO 126 I N V E S T O R D AY 2 0 2 3 | L E V E R A G I N G O P E R AT I O N A L E X C E L L E N C E
Slide 128: Introduction: Short-Term Targets
INTRODUCTION SHORT-TERM TARGETS EBITDA MARGIN*2 % of sales 15.0% For personal use only 11.3% 9.4% 7.8% Jan 22 Jul 22 Jan 23 >> Target WORKING CAPITAL % of sales 18.0% 20.4% 21.1% 21.8% Jan 22 Jul 22 Jan 23 >> Target 1. All charts show rolling 12 month historical results 2. Underlying EBITDA excludin
Slide 129: Driving Margin Expansion
DRIVING MARGIN EXPANSION For personal use only SHORT-TERM UNDERLYING EBITDA MARGIN TARGET ~15% OF SALES 128 I N V E S T O R D AY 2 0 2 3 | L E V E R A G I N G O P E R AT I O N A L E X C E L L E N C E
Slide 130: EBITDA Margin Target
EBITDA MARGIN TARGET UNDERLYING EBITDA MARGIN*1,2 % of sales ~15% ~3% ~1% For personal use only 11.3% 9.4% 7.8% Jan 22 FY22 Jan 23 >> Gross Margin Operating Expense Target Rolling Rolling Expansion Leverage GROSS MARGIN EXPANSION driven by: OPERATING EXPENSE LEVERAGE driven by: • Consolidation of su
Slide 131: Working Capital Management
WORKING CAPITAL MANAGEMENT For personal use only SHORT-TERM WORKING CAPITAL TARGET ~18% OF SALES 130 I N V E S T O R D AY 2 0 2 3 | L E V E R A G I N G O P E R AT I O N A L E X C E L L E N C E
Slide 132: Working Capital Target
WORKING CAPITAL TARGET WORKING CAPITAL*1 % of sales 21.1% 21.8% ~3% 20.4% ~1% ~18% For personal use only Jan 22 Jul 22 Jan 23 >> Inventory Trade Payables Target Management Improvement INVENTORY MANAGEMENT driven by: TRADE PAYABLES improvement driven by: • Return to pre-COVID buying timelines • Suppl
Slide 133: Functional Focus
FUNCTIONAL FOCUS Group Functions For personal use only COMMERCIAL SYSTEMS FINANCE HR LEGAL ESG KEY OPPORTUNITIES • Portfolio negotiation of leases • Supply chain efficiency (distribution and sourcing) • Freight consolidation • Consolidation of purchasing power: inventory and non-inventory • Rational
Slide 134: Metrics That Matter
METRICS THAT MATTER For personal use only SHORT-TERM SHORT-TERM UNDERLYING EBITDA MARGIN WORKING CAPITAL ~18% TARGET TARGET ~15%UNDERLYING ~15% ~18% WORKING CAPITAL TO OF SALES OF SALES SALES 133 I N V E S T O R D AY 2 0 2 3 | L E V E R A G I N G O P E R AT I O N A L E X C E L L E N C E
Slide 135: Lead ESG
SECTION 7 For personal use only LEAD ESG Frances Blundell Chief Legal & ESG Officer 134 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 136: Our Focus Areas
OUR FOCUS AREAS Communities For personal use only our people, our communities Climate science-based climate action Circularity circular business models Transparency and Accountability 135 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 137: Transparency and Accountability
Transparency For personal use only and accountability 136 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 138: B Corp - What Is It?
B CORP – WHAT IS IT? • All three brands, and KMD Brands itself, now B Corp certified • B Corp certification underpins our ESG strategy – guides our direction on best practice and provides a pathway for continuous improvement For personal use only • B Corp provides meaning by connecting us to a globa
Slide 139: Communities
For personal use only Communities 138 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 140: Our People, Our Communities
OUR PEOPLE, OUR COMMUNITIES POSITIVELY IMPACT THE WELLBEING OF PEOPLE AND PLACES IMPACTED BY OUR BRANDS For personal use only • Provide a people-centred culture and workplace that fosters health, safety, wellbeing and inclusiveness • Protect human rights and dignity by addressing modern slavery in o
Slide 141: Inclusion
INCLUSION INCREASED REPRESENTATION IN EMPLOYMENT OF LOCAL INDIGENOUS PEOPLES, PEOPLE FROM ETHNIC OR RACIAL For personal use only MINORITIES, AND GENDER DIVERSITY ACROSS MANAGEMENT LEVELS • Making formal commitments with recognised industry bodies to ensure we include Indigenous peoples in our workfo
Slide 142: Worker Wellbeing
WORKER WELLBEING GENUINE TRANSPARENCY OF, AND EFFECTIVE WORKER VOICE COMMUNICATIONS WITH, STRATEGIC SUPPLIERS For personal use only FOR EACH BRAND, INCLUDING: Accountability to KMD Brands code of conduct Transparency: Tier 1 % increase year on year where worker voice survey tools are in place Tier 2
Slide 143: Transparency: Tracing Tier Suppliers
TRANSPARENCY: TRACING TIER 2 SUPPLIERS Tier 1 Tier 2 Tier 3 Tier 4 FINISHED MATERIAL RAW MATERIAL RAW MATERIAL For personal use only PRODUCTS PRODUCTION PROCESSING PRODUCTION Assembly and manufacture Fabric, Trim and other Raw materials are processed Extraction, farming, and/or of final products com
Slide 144: Community Outreach
COMMUNITY OUTREACH SUPPORTED LOCAL COMMUNITY PROJECTS, THROUGH DONATIONS, FUNDRAISING AND PAID EMPLOYEE TIME, TO CREATE A POSITIVE IMPACT FOR THE WELLBEING OF PEOPLE AND PLANET For personal use only 143 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 145: Community Targets
COMMUNITY TARGETS An equitable, inclusive workplace representative of the diversity within our communities including: For personal use only • 40:40:20 gender representation in leadership positions (board, executive and management) • Increased representation in employment of local Indigenous Peoples
Slide 146: Climate
For personal use only Climate 145 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 147: Science-Based Climate Action
SCIENCE-BASED CLIMATE ACTION TRANSITION TO A LOW CARBON FUTURE For personal use only Reduce emissions in line with the Paris Climate Agreement goals 146 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 148: Climate: How We Measure Our Impact
CLIMATE HOW WE MEASURE OUR IMPACT For personal use only 147 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 149: Science-Based Targets Approved
SCIENCE-BASED TARGETS APPROVED For personal use only 1 2 3 4 5 Initial screening Lead reviewer Appointed Target validation Communication To determine if all desk review approver review team discussion decisions and necessary information Lead reviewer performs Appointed approver Target validation tea
Slide 150: Climate Targets
CLIMATE TARGETS • Reduced absolute scope 1 and 2 GHG emissions by a minimum of 47% by 2030, from a FY19 base year (4.2% per annum emissions reduction) For personal use only • Reduced absolute scope 3 GHG emissions from purchased goods and services, fuel and energy related activities, upstream transp
Slide 151: Circularity
For personal use only Circularity 150 I N V E S T O R D AY 2 0 2 3 | LEAD ESG
Slide 152: Circular Business Models
CIRCULAR BUSINESS MODELS ELIMINATE THE LINEAR TAKE-MAKE-WASTE APPROACH TO BUSINESS For personal use only • Foster and invest in circular business models across our businesses • Increase responsible material content in our products • Reduce the waste footprint created across our businesses 151 I N V
Slide 153: Commercialising Circularity
COMMERCIALISING CIRCULARITY KATHMAN-REDU For personal use only • KATHMAN-REDU programme: apparel repair and re-commerce pilot in select Victorian stores • Helping to keep gear in use and out of landfill one stitch at a time • We source it: all products are sourced directly from our supply chain or r
Slide 154: Priorities & Progress
PRIORITIES & PROGRESS DEDICATED TO OUR OWN-BRAND PRODUCTS BEING RESPONSIBLY SOURCED For personal use only • 100% responsible wool standard (RWS) by • 100% responsibly sourced cotton by 2026 • 100% leather working group certified leather 2025 uppers by 2023 • 100% apparel and accessories in preferred
Slide 155: Circularity Targets
CIRCULARITY TARGETS For personal use only Commercialised brand-led circular business models for product take back, renewal, repair, re-commerce or recycling Dedicated to our own-brand products being responsibly sourced Reduced operational and packaging waste including: • Diversion of 90% of waste to
Slide 156: Our ESG Goals
OUR ESG GOALS KMD Brands ESG Strategy Our pillars Our People, Our Communities Science-based Climate Circular business models Positively impact the wellbeing of people and Action Eliminate the linear take-make-waste places impacted by our Brands Transition to a low carbon future approach to business
Slide 157: Summary and Questions
SECTION 8 For personal use only SUMMARY AND QUESTIONS Michael Daly Managing Director and Group CEO 156 I N V E S T O R D AY 2 0 2 3 | S U M M ARY AN D Q U E S T I O N S
Slide 158: Our Advantage
OUR ADVANTAGE BRANDS iconic global outdoor brands DIVERSIFIED by channels, geographies, products, and seasons For personal use only PRODUCTS innovative products designed for a purpose CONSUMERS loyal, active consumers TEAM engaged and talented team ESG benefit mindset and leadership in ESG WELL POSI
Slide 159: Strategic Pillars
STRATEGIC PILLARS For personal use only BUILD GLOBAL ELEVATE LEVERAGE LEAD IN BRANDS DIGITAL OPERATIONAL ESG EXCELLENCE Expand global footprint and Invest in Group digital Deliver operational excellence Lead in environmental, social invest in world class brand and platforms to deliver a truly to all
Slide 160: Metrics That Matter
METRICS THAT MATTER SHORT-TERM MEDIUM-TERM EBITDA MARGIN*2 OBOZ SALES OPPORTUNITY KATHMANDU RETAIL STORE COUNT % of sales US $m For personal use only ~100 ~200 15.0% 11.3% 158 155 155 9.4% 53.7 7.8% 45.7 41.3 >> >> >> Jan 22 Jul 22 Jan 23 Target Jan 22 Jul 22 Jan 23 Target Jan 22 Jul 22 Jan 23 Targe
Slide 161: Questions
For personal use only QUESTIONS 160 I N V E S T O R D AY 2 0 2 3 | S U M M ARY AN D Q U E S T I O N S
Slide 162: Important Notice and Disclosure
IMPORTANT NOTICE AND DISCLOSURE This presentation prepared by KMD Brands Limited (the “Company” or the “Group”) (ASX/NZX:KMD) provides additional comment on the financial statements of the Company, and accompanying information released to the market. As such, it should be read in conjunction with th