Boohoo Group Plc · LSE:DEBS
Boohoo — FY2020 Earnings Presentation
42 slides from Boohoo's earnings presentation, 2020
Slide 1: Final Results
FINAL RESULTS For the twelve months ended 29 February 2020
Slide 2: Agenda
AGENDA • COVID-19 Update and FY20 Year in Review: Carol Kane, Group Co-Founder and Executive Director • Financial Review: Neil Catto, Group CFO • The boohoo group: Carol Kane, Group Co-Founder and Executive Director • Business Update: Neil Catto, Group CFO 2
Slide 3: COVID-19 Update
COVID-19 UPDATE WHAT WE ARE DOING • Flexible working arrangements • Full pay for colleagues in self-isolation • Following government health protection protocols SUPPLIERS • Inbound supply chain working efficiently • Flexible sourcing model from multiple countries • Payment terms unchanged CUSTOMERS
Slide 4: FY20 Year in Review
FY20 YEAR IN REVIEW • Strong underlying trading in our more established brands • Acquisition and integration of 3 brands • Further investment in infrastructure: Burnley automation and Sheffield chamber 2 • Proposition enhancements including more payment solutions and new apps • Fast moving and agile
Slide 5: Financial Review
FINANCIAL REVIEW FINAL RESULTS FOR THE TWELVE MONTHS ENDED 29 FEBRUARY 2020 | NEIL CATTO, GROUP CFO 5
Slide 6: Summary Group Income Statement
SUMMARY GROUP INCOME STATEMENT Y/E 29 FEBRUARY (£m) FY20 FY19 Change Y/E 29 FEBRUARY (£m) FY20 FY19 Group Sales 1,234.9 856.9 44% Acquisition Intangibles (5.1) (4.4) Gross Profit 666.2 469.0 42% Share-based Payments (11.0) (5.3) Gross Margin 54.0% 54.7% (70bps) PLT Warehouse Relocation - (6.7) Adjus
Slide 7: Growth Across All Brands and Markets
GROWTH ACROSS ALL BRANDS AND MARKETS 1,234.9 Y/E 29 FEBRUARY (£m) FY20 FY19 VAR CER boohoo 600.7 434.6 38% 39% 856.9 PLT 516.3 374.4 38% 37% Nasty Gal 98.8 47.9 106% 109% Other 19.0 - - - Total 1,234.9 856.9 44% 44% 45% of 43% of sales sales Y/E 29 FEBRUARY (£m) FY20 FY19 VAR CER FY19 FY20 UK 679.3
Slide 8: Group Operating Costs
GROUP OPERATING COSTS • Marketing as percentage of sales broadly stable Y/E 29 FEBRUARY (%) FY20 FY19 CHANGE despite investment in new brands & markets Marketing 9.5% 9.4% 10bps • Distribution costs improvements driven by Distribution 22.5% 23.4% (90)bps operational efficiencies Other Admin Costs 13
Slide 9: Summary Cash Flow Statement
SUMMARY CASH FLOW STATEMENT Y/E 29 FEBRUARY (£m) FY20 FY19 • Strong translation of EBITDA into operating and free cash flow Profit For The Year 72.9 47.5 Depreciation & Amortisation 24.6 13.9 • Year end net cash of £241m highlights balance sheet strength Share-based Payment Charges 11.0 5.3 Loss On
Slide 10: Growth Across Group KPIs
GROWTH ACROSS GROUP KPIs • Further gains across key KPIs • Growth balanced between new customer acquisition and increased loyalty in established brands Y/E 29 FEBRUARY FY20 FY19 Change (%) Active Customers 13.9m 10.6m 31% Number of Orders 42.2m 30.6m 38% Order Frequency 3.04x 2.88x 5% Average Order
Slide 11: New Customers & a Loyal Base Continue to Drive Our Growth
NEW CUSTOMERS & A LOYAL BASE CONTINUE TO DRIVE OUR GROWTH • Revenue retention remains healthy, with a loyal and sticky customer base • New customer acquisition continues to play an important role in driving our growth FY15 FY16 FY17 FY18 FY19 FY20 Pre-FY 15 FY15 FY16 FY17 FY18 FY19 FY20 Note: FYs15-
Slide 12: FY21 Financial Guidance
FY21 FINANCIAL GUIDANCE • Strong momentum maintained into early parts of FY21 • Trading more mixed in mid-March due to COVID-19 • Performance in April has improved • Reacting quickly to mitigate costs • Remaining cautious on outlook due to COVID-19 uncertainty • Confident in strength of our business
Slide 13: The boohoo Group
THE BOOHOO GROUP CAROL KANE, GROUP CO-FOUNDER AND EXECUTIVE DIRECTOR 13
Slide 14: Seven Great Brands
SEVEN GREAT BRANDS LEADING THE FASHION E-COMMERCE MARKET 14
Slide 15: New Brands - Seamless Integration
NEW BRANDS - SEAMLESS INTEGRATION 8 weeks to integrate > £1k 80% of supply exit price point base is new 5 day turnaround 9 week lead time 150% from buy to site (from 9 months) range increase 15 15
Slide 16: Customer Behaviours and Our Response
CUSTOMER BEHAVIOURS • Still loving fashion and beauty - “Keep on being you regardless” • Still social - “Staying in is the new going out” • Still active - Exercise at home • Still engaged - With video and social content #inthehouse, #stayinginwith OUR RESPONSE • Quickly adapted production capability
Slide 17: Business Update
BUSINESS UPDATE NEIL CATTO, GROUP CFO 17
Slide 18: Market Context
MARKET CONTEXT Size of Market £71bn £399bn £336bn Online Penetration 21% 12% 19% Boohoo Group L12M Sales £679m £188m £264m % Boohoo Group Sales 55% 15% 21% % Market Share (Online) 4.6% 0.4% 0.4% % Market Share (12 months ago) 3.6% 0.3% 0.3% Source: Statista clothing and cosmetics market: all figures
Slide 19: Sustainability: Collaborating to Build Trust & Transparency
SUSTAINABILITY: COLLABORATING TO BUILD TRUST & TRANSPARENCY TACKLING WHAT MATTERS MOST ALIGNED TO ACTIONS TAKEN THIS YEAR INTERNATIONALLY 1. Detailed assessment of the fibre-mix of our garments RECOGNISED INITIATIVES … to see where we can use more recycled materials in our garments • Sustainable App
Slide 20: Suppliers: Doing the Right Thing
SUPPLIERS: DOING THE RIGHT THING • Business founded on supply chain relationships • Diverse supply chain in the UK & Internationally • Standing alongside our supply base • Not demanding discounts from suppliers or walking away from them • Keeping industry-leading payment terms • Fostering long-term
Slide 21: In Summary...
IN SUMMARY... Fast growing Proven test and eCommerce brands repeat model Track record of Building trust and delivering profitable transparency with growth ongoing ESG focus Financial robustness with strong balance Opportunity sheet and significant is significant liquidity 21 21
Slide 22: Appendices
APPENDICES FINAL RESULTS FOR THE TWELVE MONTHS ENDED 29 FEBRUARY 2020 22
Slide 23: Warehouse and Logistics
WAREHOUSE AND LOGISTICS Location Description Completion Date Capacity (units) Capacity (net sales) Burnley Extension + Automation April-19 15m units c. £1.2bn Sheffield Warehouse relocation Aug-18 7m units c. £0.6bn Sheffield Fit-out and Mezzanine Flooring 1H FY21 8m units c. £0.6bn Burnley + Sheffi
Slide 24: Our Brands
OUR BRANDS APPENDICIES 24
Slide 25: boohoo brand profile
To be the leading online fashion brand AMBITION for all 16-24 year olds STYLES over 30k TARGET DEMOGRAPHIC 16-24 year olds UK, US, Ireland, France, CORE MARKETS Germany, Australia 25 25
Slide 26: boohooMAN brand profile
To be the leading online menswear AMBITION fashion brand STYLES Over 5k TARGET DEMOGRAPHIC 16-24 year old men UK, US, Ireland, France, CORE MARKETS Germany, Australia 26
Slide 27: PrettyLittleThing brand profile
AMBITION Make every girl feel like a celebrity STYLES Over 25k TARGET DEMOGRAPHIC 16-24 year old females UK, US, Ireland, France, CORE MARKETS Australia 27 27
Slide 28: Nasty Gal brand profile
Nasty Gal provides the space to be a AMBITION girl in progress STYLES Over 16k TARGET DEMOGRAPHIC 18-27 year old females US, UK, Ireland, France, CORE MARKETS Australia 28
Slide 29: MissPap brand profile
To give a girl a champagne lifestyle AMBITION on a lemonade budget STYLES Over 3k TARGET DEMOGRAPHIC 16-24 year old females CORE MARKETS UK, US, Ireland, Australia 29 29
Slide 30: Karen Millen brand profile
Everyday elevated – presenting the best AMBITION version of yourself STYLES Over 1k Dresses, Tops, Knitwear, Trousers, CORE PRODUCTS Skirts, Accessories TARGET DEMOGRAPHIC Over 25 year old females CORE MARKETS UK, US, Australia 30
Slide 31: Coast brand profile
Make an entrance - Fashion should be AMBITION fun and dressing up is for every day STYLES Over 1k Dresses, Tops, Trousers, CORE PRODUCTS Accessories TARGET DEMOGRAPHIC 19-34 year old females CORE MARKETS UK 31 31
Slide 32: Additional Information
ADDITIONAL INFORMATION APPENDICIES 32
Slide 33: Financial Summary: Last 5 Years
FINANCIAL SUMMARY: LAST 5 YEARS Sales Adjusted EBITDA £1,235m £127m £857m £85m £580m £57m £36m £295m £195m £19m FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Adjusted PBT Adjusted EBITDA Margin £108m 12.1% £76m 10.2% 9.6% 9.8% 9.9% £51m £32m £16m FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
Slide 34: Reported Revenue: FY19 & FY20
REPORTED REVENUE: FY19 & FY20 Reported Sales 3 Mths to 31st May 3 Mths to 31st Aug 4 Mths to 31 Dec 2 Mths to 28/29 Feb 12 Mths to 28/29 Feb Breakdown FY20 FY19 VAR CER FY20 FY19 VAR CER FY20 FY19 VAR CER FY20 FY19 VAR CER FY20 FY19 VAR CER (£m) Total 254.3 183.6 39% 39% 310.5 211.7 47% 47% 473.7 32
Slide 35: Group Balance Sheet
GROUP BALANCE SHEET Y/E 28/29 FEBRUARY (£m) FY20 FY19 Intangible assets 42.3 27.2 Property, plant and equipment 119.2 108.5 Right-of-use assets 14.6 0.0 Financial assets 4.5 3.8 Deferred tax 6.0 4.0 Non-Current Assets 186.5 143.5 Working capital (63.9) (65.0) Lease liabilities (16.2) 0.0 Net financi
Slide 36: Social Media Reach
SOCIAL MEDIA REACH Q E D Instagram Facebook Twitter boohoo 6.4M Followers 3.2M Followers 0.5M Followers boohooman 1.0M Followers 0.2M Followers 58K Followers Prettylittlething 12.3M Followers 2.1M Followers 0.3M Followers Nasty Gal 4.4M Followers 1.4M Followers 0.2M Followers MissPap 2.5M Followers
Slide 37: Supplier Management Key Facts
SUPPLIER MANAGEMENT • Member of SEDEX and require all third party audits to be conducted in line with SEDEX’s SMETA (SEDEX Members Ethical Trade Audit) framework • Undertake regular, unannounced audits by the Sourcing and Compliance team in addition to audits KEY FACTS • Suppliers sign compliance fo
Slide 38: Employment Policies
EMPLOYMENT POLICIES INVESTMENTS INTO OUR STAFF AND FACILITIES SUPPORTING EMPLOYEE RETENTION & A HIGH PROPORTION OF PERMANENT EMPLOYEES • Burnley warehouse upgraded to include an automated solution, significantly helped to reduce the physical aspects of operational roles • boohoo maintained a ratio o
Slide 39: Group Websites
GROUP WEBSITES www.karenmillen.com www.boohoo.com www.boohooman.com www.karenmillen.com/us de.boohoo.com www.boohooman.com/au www.karenmillen.com/au it.boohoo.com www.boohooman.com/us ca.boohoo.com www.boohooman.com/de fr.boohoo.com www.boohooman.com/fr nl.boohoo.com www.boohooman.com/eu www.coastfa
Slide 40: 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 41: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCLAIMER FORWARD LOOKING STATEMENTS 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 financial condition. F
Slide 42: 42
42