Premier Investments Limited · ASX:PMV
Premier Investments — FY2018 Earnings Presentation
56 slides from Premier Investments's earnings presentation, Sep 20, 2018
Slide 1: 2018 Full Year Results Overview
PREMIER INVESTMENTS LIMITED 2018 Full Year Results Overview 20 September 2018 X 0
Slide 2: Agenda
Agenda Premier Investments 1 FY18 overview 8 Online delivers record $112.5 million sales Premier Investments Apparel Brands delivering strong 2H18 sales 2 FY18 consolidated financial results 9 growth momentum 3 Premier Retail delivers record sales and EBIT 10 Premier Retail summary 4 Premier Retail
Slide 3: OIF YOU >
OIF YOU >
Slide 4: Premier Investments FY18 overview
1 Premier Investments FY18 overview 2018 Full Year Results Statutory Reported Excluding significant and Variance to FY17 excluding one-off items significant and one-off items (Note 1) (Note 1) Premier Retail Sales $1,182 m $1,182 m + 8.2% Premier Retail EBIT $147.9 m $150.1 m + 10.3% Consolidated ne
Slide 5: Premier Investments FY18 overview
1 Premier Investments FY18 overview • Premier Retail contribution to Premier Investments performance: – Record Sales of $1.18 billion, up 8.2% on FY17. 2H18 Sales up 9.5% – Record Underlying EBIT of $150.1 million, up 10.3% on FY171 – Record Underlying EBIT margin to Sales of 12.7%, up 25 bps on FY1
Slide 6: Premier Investments summarised consolidated income statement
2 Premier Investments summarised consolidated income statement $m FY18 FY17 Premier Retail EBIT – underlying 150.1 136.0 Premier Investments income from associate (BRG) 16.1 14.8 Premier Investments other revenue (Interest, Dividends, Rent & Other) 7.3 6.9 Premier Investments expenses (ex Premier Re
Slide 7: Premier Investments summarised consolidated balance sheet
2 Premier Investments summarised consolidated balance sheet $m 28 Jul 2018 29 Jul 2017 Assets Cash and cash equivalents 178.6 170.6 Inventories 159.3 140.8 Property, plant and equipment 238.2 214.4 Other assets 48.9 35.4 Deferred tax assets 36.6 35.8 Listed equity investment at fair value 40.7 67.7
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Slide 9: Premier Retail delivers record sales and EBIT
3 Premier Retail delivers record sales and EBIT • Record Sales of $1.18 billion, up 8.2% on FY17 • 2H18 Sales up 9.5% • Record Underlying EBIT of $150.1 million, up 10.3% on FY171 • Record Underlying EBIT margin to Sales of 12.7%, up 25 bps on FY171 • FY18 LFL sales up 3.3% on FY17 on a constant cur
Slide 10: Premier Retail performance
3 Premier Retail performance 52 weeks 52 Weeks $000 to 28 Jul 2018 to 29 Jul 2017 Var LY Sales 1,182,221 1,092,760 +8.2% LFL sales (constant currency) +3.3% +1.1% Gross Profit 738,314 689,424 +7.1% Gross margin (%) 62.5% 63.1% -64 bps Employee Expenses1 (280,268) (271,772) +3.1% % sales 23.7% 24.9%
Slide 11: Premier Retail FY18 EBIT: strong growth continues
4 Premier Retail FY18 EBIT: strong growth continues • 7 consecutive years of EBIT growth • FY18 EBIT margin to Sales up 25 bps on FY17 • Key Gross Margin and CODB strategies delivering Underlying EBIT – 7 Year History 170.0 12.7% 13.0% 12.4% 160.0 12.3% 12.5% 150.1 150.0 12.0% 140.0 136.0 11.2% 11.5
Slide 12: Premier Retail FY18 EBIT: strong growth continues
4 Premier Retail FY18 EBIT: strong growth continues Gross Margin Strategies continue to deliver • FY18 results were achieved notwithstanding significant external headwinds in the apparel sector, with retailers continuing to discount deeper and for longer to remain competitive • Key long term foreign
Slide 13: Premier Retail FY18 EBIT: strong growth continues
4 Premier Retail FY18 EBIT: strong growth continues CODB – Store Profitability Focus • Focus on strategic growth initiatives has resulted in the opening of 307 highly profitable new Smiggle and Peter Alexander stores globally in the last 6 years, with 192 of these new stores opened outside of Austra
Slide 14: Premier Retail investing in growth
5 Premier Retail investing in growth • Significant investment continues in all online 5 year Cumulative Capital Investment platforms including the rapid international and 250.0 local expansion of online capability as consumers 210.8 increasingly choose to shop this channel 200.0 162.6 • Investment i
Slide 15: Premier Retail investing in growth
5 Premier Retail investing in growth Premier Retail continues to invest in new stores, upgrades and refurbishments to deliver sustainable sales growth: 396 stores received capital investment, including a record 84 new stores (including 5 Myer Concessions and 1 Selfridges UK Concession) opened in FY1
Slide 16: Premier Retail investing in growth
5 Premier Retail investing in growth • 2 new stores opened in Australia • 2 stores refurbished in existing locations in Australia • 3 stores relocated and refurbished across Australia and New Zealand • 3 new stores opened in Australia • 7 stores relocated and refurbished in Australia • 7 stores refu
Slide 17: Smiggle: Brand expansion continues to deliver record results
6 Smiggle: Brand expansion continues to deliver record results • Sales of $293.0 million, up 22.7% on previous record FY17 • Another record year for the brand with 52 new stores opened globally and online sales in countries with a transactional website exceeding 10% of sales • Smiggle offshore expan
Slide 18: Smiggle: Australia and New Zealand
6 Smiggle: Australia and New Zealand Australia and New Zealand • Smiggle celebrated its 15th Birthday in 2H18, with the launch of a highly successful limited edition range, loved by fans and testament to the brands longevity • Positive total sales and LFL sales growth across Australia and New Zealan
Slide 19: Smiggle: Asia – Singapore, Hong Kong and Malaysia
6 Smiggle: Asia – Singapore, Hong Kong and Malaysia Asia • LFL sales growth across Asia has far outstripped expectations in FY18 • Asia has grown rapidly to become a key region with more than half of the brand’s global top 20 stores for sales • 31 stores opened across HK and Malaysia since April 201
Slide 20: Smiggle: Asia – Hong Kong
6 Smiggle: Asia – Singapore, Hong Kong and Malaysia Hong Kong • 4 new stores opened in FY18, including key flagship locations in Harbour City, Tsim Sha Tsui and Windsor House in Causeway Bay, HK Island • Sales densities in the top stores are on par with the brand’s very best stores around the world
Slide 21: Smiggle: Asia – Malaysia
6 Smiggle: Asia – Singapore, Hong Kong and Malaysia Malaysia • 6 new stores have opened in FY18 • There are now 17 stores trading, well ahead of previous guidance • One additional store in Kuala Lumpur already opened in 1H19 • Opportunities remain to open further standalone stores as well as an opti
Slide 22: Smiggle: Europe – UK delivers strong sales growth
Smiggle: Europe – UK delivers strong sales growth and brand opens in 6 key global flagship locations United Kingdom • Strong sales growth delivered with Smiggle navigating Brexit better than most retailers due to the unique nature of the brand, coupled with high quality management • 134 stores tradi
Slide 23: Smiggle: Europe - Oxford Street flagship store launch May 2018
6 Smiggle: Europe - Oxford Street flagship store launch May 2018 Flagship Oxford Street Store, London – Opened May 2018 22
Slide 24: Smiggle: Europe – Online exceeding expectations
6 Smiggle: Europe - Online exceeding expectations UK Online • Online sales have once again significantly outperformed the brand’s most optimistic expectations • Sales from the UK proprietary transactional website have now grown to 15% of total sales in just the third full year of operation, double A
Slide 25: Smiggle: Europe – Selfridges concession exceeding all expectations
6 Smiggle: Europe – Selfridges concession exceeding all expectations Selfridges Oxford Street concession • Opened in Selfridges Oxford Street in May 2018, the world’s first ever Smiggle concession store • Selfridges is amongst the most iconic department stores in the world and provides incredible ex
Slide 26: Smiggle: Europe – Selfridges concession exceeding all expectations
6 Smiggle: Europe – Selfridges concession exceeding all expectations Selfridges Oxford Street concession • Since opening in May 2018, the Selfridges concession has ranked as the 4th highest for sales in the UK (some weeks store number one globally) • The deployment of capital was at one tenth of an
Slide 27: Smiggle: Europe – Republic of Ireland performing strongly
6 Smiggle: Europe – Republic of Ireland performing strongly Republic of Ireland • 7 stores successfully trading ahead of expectations in the Republic of Ireland within 15 months of market launch • 5 new stores have opened in FY18 • Two Dublin stores are in the global top 20 stores for sales • Reaffi
Slide 28: Smiggle strategy to accelerate global expansion
6 Smiggle strategy to accelerate global expansion Smiggle announces major strategic plan to accelerate global growth Accelerated global expansion will come from 4 major channels: 1. Online growth, both proprietary and third party 2. Concession partnerships with iconic global retailers 3. Wholesale i
Slide 29: Smiggle accelerated global growth strategy - Online
6 Smiggle accelerated global growth strategy - Online Online strategy • Online growth has significantly exceeded our expectations as consumers increasingly shop this channel • Online sales in countries with a transactional website now exceeds 10% of sales, with UK online sales already 15% of total U
Slide 30: Smiggle accelerated global growth strategy - Online
6 Smiggle accelerated global growth strategy - Online Online strategy • Continue to grow the existing business in Australia and the UK through the roll out of a suite of initiatives already underway including click & collect (UK), e-receipts, additional payment options (UK) for customers and increas
Slide 31: Smiggle accelerated global growth strategy – Global concession model
6 Smiggle accelerated global growth strategy – Global concession model Global concession model • Global concession model to drive Smiggle’s future store growth • Following exceptional results in Selfridges London the brand will embrace a low capital, highly productive roll out in iconic internationa
Slide 32: Smiggle accelerated global growth strategy – Global concession model
6 Smiggle accelerated global growth strategy – Global concession model Global concession model • Concession results have been exceptional since opening • Smiggle is now in discussion with other major global high performing retailers throughout Continental Europe with concessions targeted to commence
Slide 33: Smiggle accelerated global growth strategy – Wholesale model
6 Smiggle accelerated global growth strategy – Wholesale model Wholesale model • Smiggle announces today its intention for a multi-country expansion through wholesale relationships with key retailers in major markets of significant opportunity • The demand for the brand in markets where Smiggle eith
Slide 34: Smiggle accelerated global growth strategy – New standalone stores
6 Smiggle accelerated global growth strategy – New standalone stores New standalone store growth strategy • Today Smiggle has announced the strategic intent to accelerate worldwide distribution through online, concession and wholesale formats delivering high returns to shareholders for significantly
Slide 35: Smiggle accelerated global growth strategy – Summary of new standalone store and concession capacity
Smiggle accelerated global growth strategy – Summary of new 6 standalone store and concession capacity in current markets New standalone store and concession growth strategy for current markets Estimated Standalone New Standalone Concession Country FY18 Store and Stores Capacity Capacity Concession
Slide 36: Smiggle accelerated global growth strategy – Entry into Continental Europe
Smiggle accelerated global growth strategy – Entry into Continental 6 Europe Continental Europe strategy • Given the stand out successes of Smiggle’s online business in the UK and concession stores with Selfridges and Harrods, Smiggle is reviewing the nature of its retail channel entry into the Neth
Slide 37: Smiggle accelerated global growth strategy – Summary
6 Smiggle accelerated global growth strategy – Summary Smiggle accelerated global growth strategy summary • Smiggle is Premier retail’s largest brand with EBIT margins well above the Group’s average • Smiggle has once again delivered a record year in FY18 • The brand’s appeal is ubiquitous and the g
Slide 38: Peter Alexander performing strongly
7 Peter Alexander performing strongly Peter Alexander Sales and Store Growth $219 220 140 200 $191 120 180 $167 Number of stores at year-end 160 100 $140 140 $122 Sales AUD $m 80 120 $101 100 $86 129 60 $73 109 80 99 $61 $50 89 60 $47 76 40 59 40 48 39 20 20 32 22 24 - - FY08 FY09 FY10 FY11 FY12 FY1
Slide 39: Peter Alexander performing strongly
7 Peter Alexander performing strongly • Sales up 14.5% on FY17 with strong total and LFL sales in both Australia and New Zealand • 16 new stores opened: Hurstville, Sydney Airports T2 and T3, Wollongong, Rockhampton, Rockingham, Midland Gate, Adelaide Harbour Town, Mandurah, Norwood, Highpoint Junio
Slide 40: Peter Alexander 2020 Growth Plan ahead of expectations
7 Peter Alexander 2020 Growth Plan ahead of expectations • 2020 Growth Plan progressing well ahead of expectations, with annual sales expected to exceed $250m by FY20 • 21 stores opened in FY18 puts the brand ahead of target to deliver 40 new stores as planned in the three years FY18 to FY20 • 5 new
Slide 41: Online – delivers record $112.5 million sales
9 8 Online – delivers record $112.5 million sales • 2020 Online Sales target of $100 million delivered more than two years ahead of original plan 12.0% 11.0% • Online sales up 65.3% on FY17 to $112.5 million 140.0 • Online sales grew to 11.0% of the respective 120.0 112.5 10.0% markets’ sales in FY1
Slide 42: Apparel Brands delivering strong 2H18 sales growth momentum
9 Apparel Brands delivering strong 2H18 sales growth momentum • Apparel brands 2H18 sales up 5.5% on 2H17 • Strong growth momentum in Q4-18 with sales up 8.1% on Q4-17 • Ongoing investment in product and merchandise teams delivering growth • Focus on disciplined execution of markdown management in a
Slide 43: Premier Retail summary FY18
10 Premier Retail summary FY18 Smiggle achieves record growth and announces accelerated growth strategy • Record year for Smiggle with global sales of $293.0 million up 22.7% (total sales up 58% over two years) • 52 new stores opened globally in FY18 • Smiggle offshore expansion continued to deliver
Slide 44: Premier Retail summary FY18
10 Premier Retail summary FY18 Peter Alexander performing strongly • Record year for Peter Alexander with sales up 14.5% on FY17 to $218.7m (total sales up 31% over two years) • Peter Alexander’s 2020 growth plan progressing well ahead of expectations – annual sales expected to exceed $250m by FY20
Slide 45: Dividend
NY Vee DIVIDEND
Slide 46: Dividend
11 Dividend • Due to the continued strength of the Premier Balance Sheet and the strong performance of Premier Retail, the Premier Board has declared an increased record final dividend of 33 cps fully franked, up 22.2% on FY17 (FY17 Final: 27 cps) • Total full year ordinary dividends of 62 cps fully
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Slide 48: Smiggle highlights
A Highlights • Record year with sales growth of 22.7% on FY17 to $293.0m (total sales up 58% over 2 years) • 52 stores opened globally with 67% of sales now outside of Australia • Online has significantly outperformed expectations and Smiggle will continue to invest in people, technology and marketi
Slide 49: Peter Alexander highlights
A Highlights • Peter Alexander sales up 14.5% on FY17 to $218.7m with strong total and LFL sales growth • Peter Alexander’s 2020 growth plan progressing ahead of expectations: annual sales expected to exceed $250m by FY20 • 21 stores opened in FY18 puts the brand ahead of target to deliver 40 new st
Slide 50: Portmans highlights
A Highlights • Turnaround continues to gain momentum under a revitalised Portmans leadership team following the appointment of Linda Levy as the new Group General Manager of Portmans in April 2017 • FY18 Sales up 11.3% on FY17 to $124.1m, with 2H18 Sales up 17.4% • LFL sales were stronger than overa
Slide 51: Jacqui E highlights
A Highlights • Turnaround continues to gain momentum under a revitalised Jacqui E leadership team following the appointment of Nicole Naccarella as the new Group General Manager of Jacqui E in June 2017 • FY18 Sales up 5.3% on FY17 to $69.2m, with 2H18 Sales up 9.4% • FY18 Online Sales up 43% on FY1
Slide 52: Just Jeans highlights
A Highlights • FY18 Sales of $212.7m driven by strong 2H18 performance including Q4-18 LFL Growth up 8.5% • Three stores were closed in FY18 as part of the ongoing program to close unprofitable stores, including the Melbourne flagship Bourke Street Mall store • Just Jeans has a strong, distinctive a
Slide 53: Jay Jays highlights
A Highlights • FY18 Sales of $158.1m driven by strong 2H18 performance including Q4- 18 Sales Growth up 5.3% • Three stores were closed in FY18 as part of the ongoing program to close unprofitable stores • Jay Jays has a strong, distinctive and competitive market position • Investment to continue ac
Slide 54: Dotti highlights
A Highlights • The appointment of Judy Coomber to role of Managing Director Peter Alexander and Dotti, together with the return of Deanna Moylan to the group as Dotti Group General Manager in March 2018 reporting to Judy, is already delivering a turnaround in performance with Q4-18 returning to posi
Slide 55: Appendix: Notes on significant and one-off items
B B Appendix Notes regarding significant and other one-off items excluded from underlying results • During 2008, Premier Investments acquired Just Group Limited, and in line with Accounting Standards upon acquisition, recognised $477.1 million in goodwill and $376.2 million in brand names. In accord
Slide 56: Appendix: Overview of Premier's non-IFRS financial information
B B Appendix Overview of Premier’s non–IFRS financial information • IFRS financial information is financial information that is presented in accordance with all relevant accounting standards. • Non-IFRS financial information is financial information that is presented other than in accordance with al