Boohoo Group Plc · LSE:DEBS
Boohoo — FY2021 Earnings Presentation
54 slides from Boohoo's earnings presentation, May 2021
Slide 1: Final Results: Building for the Future
FINAL RESULTS BUI LDING FOR THE FUTURE FOR THE TWELVE MONTHS ENDED 28 FEBRUARY 2021
Slide 2: Agenda
AGENDA • Mahmud Kamani - Building for the future • John Lyttle - A year of progress and change • Neil Catto - Financial review • Carol Kane - Our brands BUILDING FOR THE FUTURE
Slide 3: Building for the Future
BUILDING FOR THE FUTURE • Transforming governance and supply chain oversight with increased transparency • Investing in people and infrastructure • Developing our technology and multibrand platform • Leading the fashion e-commerce market BUILDING FOR THE FUTURE
Slide 4: A Year of Progress and Change
A YEAR OF PROGRESS AND CHANGE JOHN LYTTLE, GROUP CEO BUILDING FOR THE FUTURE
Slide 5: FY21 Year in Review
FY21 YE AR IN REVIEW • Substantial ESG progress as we embed a new way of working • Strong trading across our brands • Acquisition of Warehouse, Oasis, Dorothy Perkins, Burton and Wallis brands • Acquisition of Debenhams and the opportunity for the digital department store • New warehouses and office
Slide 6: Update on Our ESG Progress
UPDATE ON OUR ESG PROGRESS • Embedding a new way of working remains our top priority • £15m committed to sustainability and supply chain compliance since July last year • 20 of 34 Levitt recommendations implemented with the rest to follow by the end of September BUILDING FOR THE FUTURE
Slide 7: Clothes, Suppliers, Our Business
CLOTHES SUPPLIERS OUR BUSINESS 1 2 3 BUILDING FOR THE FUTURE
Slide 8: 1. Clothes
1. CLOTHES • Source more sustainable materials COLLABORATING ACROSS THE INDUSTRY • Implement more sustainable designs • WRAP’s Textiles 2030 • Reduce textile waste • Sustainable Apparel Coalition • Improve packaging • Microfibre Consortium BUILDING BUILDING FOR THE FUTUREFOR THE FUTURE
Slide 9: 2. Suppliers
2. SUPPLIERS • Transparency and traceability of our supply chain and responsible purchasing practices • Robust oversight of standards and compliance • Development of our environmental programme • Garment Workers Trust championing workers’ rights and supporting vulnerable workers BUILDING FOR THE FUT
Slide 10: 2. Suppliers: Showcasing Best in Class
2. SUPPLIERS S HOWC ASING BEST IN CL ASS • boohoo Leicester factory to open in Q3 • Producing 20-25,000 units per week • Creating 85-100 new jobs • Powered by 100% renewable energy BUILDING FOR THE FUTURE
Slide 11: 3. Our Business
3. OUR BUSINESS • Strengthened corporate governance • Taking action on sustainability & climate change • Educating our customers in marketing channels • Engaging within our communities • Member of BRC’s climate action roadmap BUILDING FOR THE FUTURE
Slide 12: Our Goals
OUR GOALS 2021 2023 2025 2030 Launch READY FOR THE FUTURE product lines and collections Appoint Sustainable Product Design Director Disclose supplier and factory list Publish purchasing practices Set up and donate £1 million to the Garment Workers Trust Launch manufacturing centre of excellence BUIL
Slide 13: Our Goals
OUR GOALS 2021 2023 2025 2030 Launch READY FOR All customer garment THE FUTURE product packaging reusable, lines and collections recyclable or compostable; plastic used will contain Appoint Sustainable > 50% recycled content Product Design Director Launch resale and Disclose supplier and recycling o
Slide 14: Our Goals
OUR GOALS 2021 2023 2025 2030 Launch READY FOR All customer garment All polyester and THE FUTURE product packaging reusable, cotton recycled or lines and collections recyclable or compostable; more sustainable plastic used will contain > 50% recycled content No textile waste Appoint Sustainable dire
Slide 15: Our Goals
OUR GOALS 2021 2023 2025 2030 Launch READY FOR All customer garment All polyester and All materials used will be THE FUTURE product packaging reusable, cotton recycled or more sustainable lines and collections recyclable or compostable; more sustainable plastic used will contain Reduce carbon across
Slide 16: Growth Since IPO
GROWTH SINCE IPO REVENUE (£M) SOCIAL MEDIA FOLLOWERS ACTIVE CUSTOMERS 18m 1,745 47m 14m 11m 1,235 36m 8m 4m 6m 857 2m 3m 27m 580 17m 295 14m 110 140 195 8m 2m 5m FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 ADJ. EBITDA (£M) ORDER NUMBERS OUR PEOPLE 174 53m 4,971 12
Slide 17: Growth Over the Last 2 Years
GROWTH OVER THE L AST 2 YE ARS ONLINE FASHION STORES REVENUE SOCIAL MEDIA FOLLOWING £1,745m £857m 27m 47m 4 13 FY19 FY21 FY19 FY21 FY19 FY21 OUR PEOPLE ADJ. EBITDA ACTIVE CUSTOMERS 4,971 £174m 18m £85m 11m 3,084 FY19 FY21 FY19 FY21 FY19 FY21 BUILDING FOR THE FUTURE
Slide 18: Growth of Our Brands
GROWTH OF OUR BRANDS UK FY21: £945m +39% USA FY21: ROE FY21: £435m £245m +65% +30% ROW FY21: £120m +16% BUILDING FOR THE FUTURE
Slide 19: Acquisitions in the Last 12 Months
ACQUISITIONS IN THE L AST 12 MONTHS • 6 new websites up and running and integrated with our multi-brand platform • Investment in building the new brands • Acquired remaining minority stake in PLT • Secured up to 1,000 jobs, and creating future employment opportunities across the group BUILDING FOR T
Slide 20: The Digital Department Store
THE DIGITAL DEPARTMENT STORE HOMEWARE SPORT KIDSWEAR MASSTIGE BEAUTY FASHION PRESTIGE BEAUTY OWN 3RD PARTY BRANDS BRANDS BUILDING FOR THE FUTURE
Slide 21: Supporting Growth
SUPPORTING GROWTH W AR EHOU SES • Addition of 2 new warehouses to increase sales capacity • Investment in automation in our Burnley and Sheffield sites OF F IC E S • New office purchased in London • Expanded our head office in Manchester • Added overseas offices, extending our global footprint BUILD
Slide 22: Investing in Technology
INVESTING IN TECHNOLOGY DR I V I N G I N N O V AT I O N AN D C HA NGE Last year: landed over 90 key change projects Year ahead: more than 115 key projects in scope Delivering projects to underpin our future success: - Product: order app, supplier portal - Infrastructure: 2 warehouses, automation, ne
Slide 23: People
PEOPLE KEY HIRES TO S U PPO R T G R O WT H • Director of Responsible Sourcing & Group Product Operations • Head of Sustainability • Head of Ethical Product Compliance • Head of Ethical Compliance • Head of Product Operations • Senior UK Ethical Compliance Manager • MD for Dorothy Perkins, Burton and
Slide 24: Supporting Our People
SUPPORTING OUR PEOPLE BOOHOOFORYOU • Focused on the wellbeing of our people during a year of uncertainty and change • Enhanced our boohoo for you intranet site • Covid testing across our sites • All employees made shareholders to share in our success EM PLOYE E ENGA G EM ENT SU R VEY 81% said they f
Slide 25: Building for the Future
BUILDING FOR THE FUTURE • Embedding positive change through our ambitious UP.FRONT sustainability strategy • Continued growth with £1.75bn sales over the last 12 months • Integration of newly acquired brands • Launch of the Debenhams digital department store • Increasing warehouse and office capacit
Slide 26: Financial Review
FINANCIAL REVIEW NEIL CATTO, GROUP CFO BUILDING FOR THE FUTURE
Slide 27: Summary Group Income Statement
SUMMARY GROUP INCOME STATEMENT Y/E 28 FEBRUARY (£m) FY21 FY20 Change Group Sales 1,745.3 1,234.9 41% Gross Profit 945.2 666.3 42% Gross Margin 54.2% 54.0% 20bps Adjusted EBITDA 173.6 126.6 37% Y/E 28 FEBRUARY (£m) FY21 FY20 Adjusted EBITDA Margin 10.0% 10.2% (20)bps Acquisition Intangibles (5.5) (5.
Slide 28: Growth Across Markets
GROWTH ACROSS MARKETS 1,745 1,235 Y/E 28 FEBRUARY (£m) FY21 FY20 VAR CER UK 945 679 39% 39% Rest of Europe 245 188 30% 30% USA 435 264 65% 63% Rest of World 120 104 16% 19% Total 1,745 1,235 41% 41% FY20 FY21 • Strong growth across all geographies • Standout growth in the USA, now 25% of sales (FY20
Slide 29: Costs
COSTS Y/E 28 FEBRUARY (%) FY21 FY20 CHANGE Marketing 9.1% 9.5% (40)bps 6.1% Distribution 24.2% 22.5% 170bps 8.2% 9.5% 9.1% 9.4% Other Admin Costs 12.4% 13.3% (90)bps Total 45.7% 45.3% 40bps 21.7% 21.9% 23.4% 22.5% 24.2% 16.2% 14.1% 13.1% 13.3% 12.4% Y/E 28 FEBRUARY (%) FY21 FY20 CHANGE Marketing 159
Slide 30: Summary Group Cash Flow Statement
SUMMARY GROUP CASH FLOW STATEMENT FY21 FY20 Adj EBITDA 173.6 126.6 28 174 Change in working capital 27.5 0.5 (49) Operating cash flow 201.1 127.3 201 276 Capex (49.3) (26.2) 241 (39) (5) Acquisitions (235.3) (19.4) (235) Tax paid (38.3) (11.6) (38) Free cash flow (121.8) 70.1 Shares issued 201.4 2.7
Slide 31: KPIs
KPIs M ULTI-BRAND ST R AT EG Y D R IVING F UR T H E R I NCRE ASES IN SHA R E O F WA L L ET 2021 2020 CHANGE Active customers 17.8m 13.9m 28% Number of orders 53.4m 42.2m 27% Order frequency 3.00x 3.04x (1)% Average order value £46.06 £43.50 6% Items/basket 3.32x 3.06x 8% BUILDING FOR THE FUTURE
Slide 32: Customer Cohorts
CUSTOMER COHORTS T H E M A J O R IT Y O F R E V E N UE S C O M E F R O M R E T UR N I N G C US T O ME RS • Strong revenue retention across our existing customer base • New customer acquisitions continue to grow year on year • Increase in net spend > increase in gross spend due to lower returns FY15
Slide 33: FY22 Guidance
FY22 GUIDANCE • Revenue growth expected to be around 25% • Adjusted EBITDA margin 9.5%-10% - Broadly stable year on year within established brands - 50-100bps dilution from investments in new brands • Capex: £125 million to £175 million, excluding £72 million on the new head office • Effective tax r
Slide 34: Our Brands
OUR BRANDS CAROL KANE, GROUP CO-FOUNDER AND EXECUTIVE DIRECTOR BUILDING FOR THE FUTURE
Slide 35: Slide 35
Slide 36: Customer Engagement
CUSTOMER ENGAGEMENT SOCIAL MEDIA FOLLOWERS • We’ve responded to lockdowns by tailoring our product ranges and marketing towards working from home and loungewear • Targeted campaigns for dressing up and occasion wear to inspire customers • We’re now looking towards opening up and going out BUILDING F
Slide 37: Customer Behaviour
CUSTOMER BEHAV IOUR • Adapting to changing customer demands • Proven agility of the test and repeat model • Move to more online shopping BUILDING FOR THE FUTURE
Slide 38: Building Brands: Months On
BUILDING BRANDS 18 MONTHS ON • Grown to 5,000 styles • Newly launched loungewear, jewellery, lingerie and nightwear • International launch in the US • Grown to 3,600 styles • Added jewellery and accessories tailored to home workouts • Focus on black tie, red carpet and girls occasionwear BUILDING FO
Slide 39: Building Brands: 6-9 Months On
BUILDING BRANDS 6-9 MONTHS ON • Trend led with a focus on the ‘it’ moment of the season • Launching targeted monthly campaigns with WH ICONS • New collaborations with floral artists • Focus on denim • Recently launched kidswear BUILDING FOR THE FUTURE
Slide 40: Brand Development
BRAND DEVELOPMENT Launch brand Develop website Invest in Extend Explore new International and build and launch on marketing range categories expansion product our multi-brand range platform BUILDING FOR THE FUTURE
Slide 41: The Digital Department Store
THE DIGITAL DEPARTMENT STORE We have relaunched the brand, giving it a fresh new look and we are excited to: - Broaden the target market, making it attractive to a wider audience - Expand our offering into beauty, homeware and sport - Create a new channel to market for our existing brands BUILDING F
Slide 42: The Digital Department Store: Beauty
THE DIGITAL DEPARTMENT STORE • One of the UK’s leading beauty retailers #2 player in prestige beauty #1 player in makeup #2 player in skincare • Access to 6m existing beauty shoppers • Continue to add leading beauty brands to the site, including value end, mid market and prestige BUILDING FOR THE FU
Slide 43: The Digital Department Store: Homeware
THE DIGITAL DEPARTMENT STORE • Launched initially with bedding and towels • Continue to expand the category across soft furnishings • Adding fashion element to homeware BUILDING FOR THE FUTURE
Slide 44: Full Market Coverage
FULL MARKET COVERAGE OU R PR OPOSI T I O N CO VERS THE VALUE, MI D A N D PRE M I U M E N D S O F T H E M A RK E T PRICE TREND LED FASHION BUILDING FOR THE FUTURE
Slide 45: Building for the Future
BUILDING FOR THE FUTURE • Successful year with strong growth across all our geographies • Strengthened management team • Focused on investing in the new brands • Developing our warehouse and office capacity • Enhancing our platform technology • Building for the future and leading the fashion ecommer
Slide 46: Appendix
APPENDIX BUILDING FOR THE FUTURE
Slide 47: Cash Flow Statement
CASH FLOW STATEMENT Y/E 28 FEBRUARY (£m) FY21 FY20 Profit For The Year 93.4 72.9 Depreciation charges and amortisation 29.8 24.7 Share based payments 19.7 11.0 Loss On Sale Of Fixed Assets 0.0 0.2 Finance (Income) / Expense (0.6) (1.3) Tax Expense 31.3 19.3 Change In Working Capital 27.5 0.5 Operati
Slide 48: Reported Revenue FY20 & FY21
REPORTED REVENUE FY20 & FY21 Reported Sales 3 Mths to 31st May 3 Mths to 31 August 4 Mths to 31 Dec 2 Mths to 28 Feb Breakdown FY21 FY20 % CHG % CER FY21 FY20 % CHG % CER FY21 FY20 % CHG % CER FY21 FY20 % CHG % CER (£m) Total 367.8 254.3 45% 45% 448.7 310.5 44% 44% 660.8 473.7 40% 40% 268.0 196.3 37
Slide 49: Group Balance Sheet
GROUP BAL ANCE SHEET Y/E 28 FEBRUARY FY21 FY20 Assets Intangible assets 118.3 42.3 Property, plant and equipment 141.6 119.2 Right-of-use assets 16.7 14.6 Financial assets 13.1 4.5 Deferred tax 3.2 6.0 Non-Current Assets 292.9 186.5 Working capital (90.9) (63.9) Lease liabilities (18.3) (16.2) Net f
Slide 50: Financial Calendar
FINANCIAL CALENDAR DATE EVENT 15 June 2021 1Q 22 TRADING UPDATE September/October 2021 1H22 RESULTS ANNOUNCEMENT January 2022 (TBC) P3 22 TRADING UPDATE April/May 2022 (TBC) FY22 RESULTS ANNOUNCEMENT BUILDING FOR THE FUTURE
Slide 51: Glossary
GLOSSARY ADJUSTED EBITDA Calculated as PBT, interest, depreciation, amortisation, share-based payment charges and exceptional items ADJUSTED EBIT Calculated as EBIT excluding share-based payment charges, amortisation of acquired intangible assets and exceptional items ADJUSTED PBT Calculated as PBT,
Slide 52: Group Websites
GROUP WEBSITES www.boohoo.com www.boohooman.com www.nastygal.com www.karenmillen.com de.boohoo.com www.boohooman.com/au www.nastygal.com/eu www.karenmillen.com/us it.boohoo.com www.boohooman.com/us www.nastygal.com/gb www.karenmillen.com/au ca.boohoo.com www.boohooman.com/de www.nastygal.com/ie fr.b
Slide 53: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCL AIMER F O R W AR D L O O K I N G S TAT E ME NT S Certain statements included or incorporated by reference within this presentation may be, or may be deemed to be, “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or finan
Slide 54: Disclaimer
FORWARD LOOKING STATEMENTS & DISCL AIMER D IS C L AIMER This presentation and information communicated orally does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Company, nor shall it or any part of i