Lovisa Holdings Ltd. · ASX:LOV
Lovisa — Macquarie Conference 2017
22 slides from Lovisa's conference presentation, May 3, 2017
Slide 1: Macquarie Conference May 2017
MACQUARIE CONFERENCE MAY 2017
Slide 2: Total Store Numbers
TOTAL STORE NUMBERS BRAND OF CHOICE FOR FAST FASHION JEWELLERY 268 12 HIGHLY SCALABLE MODEL ATTRACTIVE COUNTRIES RETURNS AVERAGE STORE GROSS PAYBACK MARGIN <1 YEAR > 75% 2
Slide 3: Contents
CONTENTS STRATEGY INTRODUCTION TO LOVISA STORE NETWORK SUPPLY AND DISTRIBUTION NETWORK HALF YEAR FINANCIALS TRADING UPDATE QUESTIONS APPENDIX 4
Slide 4: Global Brand Strategy
G L O B A L B R A N D S T R AT E G Y • Internationally recognised brand VISION • Global footprint • Brand of choice for fast fashion jewellery • High Margin business operating in small store footprint • Fit out cost generally low with compelling return and pay back period GROWTH ENGINE • Inexpensive
Slide 5: Introduction to Lovisa
INTRODUCTION TO LOVISA • 268 stores in 12 countries • Business model underpins high gross margins and speed to market • Proven fast fashion model that delivers quality, affordable and on-trend products from • Centrally controlled product concept to shop floor in ~8-10 weeks development and distribut
Slide 6: Lovisa Store Disciplines
LOVISA STORE DISCIPLINES Average store High size - 50 sqm pedestrian traffic locations Stores are Majority of designed for high stores in intensity desirable merchandising to malls and maximise sales locations potential Standardised fit- Typical store is outs maintain run by a store customer manager
Slide 7: Vertically Integrated Business Model
V E R T I C A L LY I N T E R G R AT E D B U S I N E S S M O D E L • Business model underpins consistently high gross margins (>75%) • In house product-led business • Product manufactured in cost optimal locations VERTICALLY (China, Thailand and India) INTEGRATED RETAIL MODEL • Significant cost advan
Slide 8: History of Rapid Growth
HISTORY OF RAPID GROWTH Revenue growth ($Am) – Strong growth expected to continue Number of stores – Proven ability to grow offshore 153 FY16A FY16A We expect to close FY17 with circa 290 stores April June 2010: April 2011: December July 2012: July 2012: November 18 April 2015: December July 2016: 2
Slide 9: Store Roll-out History
STORE ROLL-OUT HISTORY Estimated store FY11A FY12A FY13A FY14A FY15A FY16A HY17A capacity Australia 45 54 160 165 146 144 149 150 New Zealand 6 6 6 14 14 18 18 18-20 South Africa - - - 10 36 36 38 50+ Singapore - - 6 10 15 19 21 20-25 Malaysia - - 3 7 15 14 17 20-25 Middle East(1) - - - 2 13 16 17 5
Slide 10: Store Network Operating
S T O R E N E T W O R K O P E R AT I N G Country Stores Labour cost Occupancy cost Australia 149 New Zealand 18 Malaysia 17 Singapore 21 South Africa 38 United Kingdom 7 Middle East 17 N/A - franchise territory N/A - franchise territory Vietnam 1 N/A - franchise territory N/A - franchise territory L
Slide 11: Supply and Distribution Network
S U P P LY A N D D I S T R I B U T I O N N E T W O R K 7 UK STORES CHINA SUPPLIERS LEGEND LOVISA WAREHOUSE 17 HONG KONG SUPPLIERS WAREHOUSE UAE STORES INDIA 1 VIETNAM SUPPLIERS THAILAND SUPPLIERS 21 SOPHISTICATED IT SYSTEMS 17 SINGAPORE STORES MALAYSIA STORES • Strong focus on data analytics for inv
Slide 12: Half Year Financial Overview
HALF YEAR FINANCIAL OVERVIEW ($’000) FY17 FY16 Variance Actual Actual Actual Revenue 99,740 82,622 20.7% Gross profit 77,592 61,984 25.2% EBITDA 30,841 20,809 48.2% EBIT 28,194 17,946 57.1% NPAT 20,272 13,540 49.7% EPS cents 19.3 12.9 49.7% • Revenue up 20.7% with comparable sales up 12.6% for the p
Slide 13: Trading Update
TRADING UPDATE • Trading to 30 April 2017 has continued to be strong and above expectations • Same store sales growth for the March quarter was 6.7% • Same store sale growth for the 10 months to April was 10.9% • Following the lift in expectations we expect Full Year Earnings before Interest and Tax
Slide 14: Strategy Recap
STRATEGY RECAP • Lovisa is a vertically integrated fast fashion jewellery retailer with end to end product development capabilities • Global brand with reach across a number of countries • We enjoy high gross margins with demonstrated pricing elasticity • Scalable rollout model with centralised merc
Slide 15: Questions
QUESTIONS 15 15
Slide 16: Appendix
APPENDIX 16 16
Slide 17: Balance Sheet – HY17
BALANCE SHEET – HY17 (A$’000s) HY17 FY16 HY16 Net Cash 28,246 4,729 8,583 Receivables 3,130 2,293 2,181 Inventories 12,338 15,034 16,789 Derivatives 693 (909) (211) Total current assets 44,407 21,147 27,342 Property Plant & Equipment 13,081 13,123 12,591 Intangibles 2,328 2,073 1,390 Deferred tax as
Slide 18: Cash Flow - HY17
CASH FLOW- HY17 (A$’000s) HY17 HY16 Cash from operating activities 34,942 20,314 Net interest paid (275) (331) Tax paid (4,982) (3,786) Net cash from operations 29,685 16,197 Property Plant & Equipment (2,448) (5,404) Net cash used in investing activities (2,448) (5,404) Repayment from borrowings (2
Slide 19: Board & Management
BOARD & MANAGEMENT Michael is a qualified lawyer and brings a wealth of commercial experience to Lovisa. Michael was CEO and MICHAEL KAY Managing Director of listed salary packaging business McMillan Shakespeare, a position he held for six years. Previously, Michael was CEO of national insurer AAMI
Slide 20: Board & Management
BOARD & MANAGEMENT Tracey joined BB Retail Capital in 1981 and is the nominated representative of BB Retail Capital on the Board of Lovisa. Over the past 35 years, she has held a number of senior executive positions across BB Retail Capital’s TRACEY BLUNDY brands, including Chief Executive Officer o
Slide 21: Key Risks
KEY RISKS Foreign Currency Majority of goods that are imported are priced in USD. Consequently Lovisa is exposed to movements in the USD exchange rate. As international growth continues Lovisa will be exposed to movements in the exchange rates of the countries it operates in Store Growth Lovis
Slide 22: Forward-looking statements
Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect the current intentions, plans, expectations, assumptions and beliefs about future events of Lovisa H