Boohoo Group Plc · LSE:DEBS
Boohoo — FY2018 Earnings Presentation
36 slides from Boohoo's earnings presentation, April 2018
Slide 1: Final Results for the Year Ended 28 February 2018
FINAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2018
Slide 2: Agenda
AGENDA • Highlights - Mahmud Kamani, Joint CEO • Financial Review - Neil Catto, CFO • The boohoo Group - Carol Kane, Joint CEO • Outlook - Neil Catto, CFO
Slide 3: Highlights
HIGHLIGHTS •C ontinued strong Revenue growth, +97% (+92% CER) •F ull year adjusted EBITDA of £56.9m, +60% •£ 76.2m operating cash flow •9 .8m active customers (FY17: 6.5m) •F urther enhancement of customer proposition and experience • I nvested in PrettyLittleThing to support its growth •S uccessful
Slide 4: Financial Review
FINANCIAL REVIEW FINAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2018 | NEIL CAT TO, CFO
Slide 5: Summary Group Income Statement
SUMMARY GROUP INCOME STATEMENT Y/E 28 FEBRUARY (£m) FY18 FY17 CHANGE Y/E 28 FEBRUARY (£m) FY18 FY17 Group Sales 579.8 294.6 97% Acquisition Intangibles (4.4) (0.4) Gross Profit 306.4 160.8 90% Share-based payments (3.3) (1.9) Gross Margin 52.8% 54.6% (180bps) Gain on option to acquire PLT 0.0 1.4 Ad
Slide 6: Growth Across Multiple Brands and Markets
GROWTH ACROSS MULTIPLE BRANDS AND MARKETS Y/E 28 FEBRUARY (£m) FY18 FY17 VAR CER 579.8 boohoo 374.1 283.4 90.7 29% PLT 181.3 11.3 170.0 - Nasty Gal 24.4 0.0 24.4 - Total 579.8 294.6 285.2 92% Rest of World 294.6 USA Rest of Europe Y/E 28 FEBRUARY (£m) FY18 FY17 VAR CER UK UK 355.6 182.0 173.6 95% Re
Slide 7: Well-Managed Group Operating Costs
WELL-MANAGED GROUP OPERATING COSTS Y/E 28 FEBRUARY (%) FY18 FY17 CHANGE Marketing 8.2% 6.1% +210bps Distribution 21.9% 21.7% +20bps Other Admin Costs 14.1% 16.2% (210bps) •M arketing Costs driven by growth investments for PLT & Nasty Gal Total 44.2% 44.0% +20bps •D istribution cost increase reflects
Slide 8: Group Operating Cash Flow
GROUP OPERATING CASH FLOW •£ 56.9m Underlying EBITDA converted into £76.2m Operating Y/E 28 FEBRUARY (£m) FY18 FY17 Cash Flow Profit for the Year 36.0 24.7 •Y /E Net Cash of £133.0m Depreciation & Amortisation 11.0 4.7 Share-based Payment Charges 3.3 1.9 Finance (Income) / Expense (0.6) (0.6) Tax Ex
Slide 9: Growth Underpinned by a Loyal Customer Base
GROWTH UNDERPINNED BY A LOYAL CUSTOMER BASE • Customer loyalty helps drive lifetime value over many years • New customer acquisition plays an important role in driving growth • Over the last 5 years churn has more than halved Group Gross Sales by year of acquisition 34% 13% FY11 FY12 FY13 FY14 FY15
Slide 10: Multi-Brand Approach Influencing KPIs
MULTI-BRAND APPROACH INFLUENCING KPIs • Multi-brand approach driving greater share of wallet • Order Frequency in particular runs ahead of that achieved at an individual brand level • Further positive momentum achieved across all metrics Y/E 28 FEBRUARY (%) FY18 FY17 CHANGE Active Customers 8.3m 5.7
Slide 11: Market Share Gains Ahead of Peers
MARKET SHARE GAINS AHEAD OF PEERS 25% •A cquisitions of PLT and Nasty Gal drive incremental 20% market share gains in addition to that achieved by boohoo 15% 10% 5% 0% -5% -10% boohoo.com Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Competitor 6 Competitor 7 -15% Feb 17 Feb 18 So
Slide 12: The boohoo Group
THE BOOHOO GROUP LEADING THE FASHION E-COMMERCE MARKET | CAROL KANE, JOINT CEO
Slide 13: The boohoo Group Today
THE BOOHOO GROUP TODAY The boohoo Group is a leading online fashion retailer. Its brands boohoo, boohooMAN, Nasty Gal & PrettyLittleThing target fashion conscious customers in the UK & Overseas
Slide 14: We've Come a Long Way...
WE’VE COME A LONG WAY… Second Burnley warehouse built Acquired PLT & Nasty Gal boohooMAN Listed website REVENUE on AIM launched Acquired Burnley warehouse Warehouse Menswear extension launched. completed Founded by 1st foreign 1st TV language website Mahmud Kamani Campaign in & Carol Kane in France
Slide 15: ...But Are Just Getting Started
…BUT ARE JUST GETTING STARTED SERVICE FASHION OUR VISION: LEADING THE GLOBAL FASHION E-COMMERCE QUALITY PRICE MARKET CHOICE
Slide 16: One Group. Multiple Brands.
ONE GROUP. MULTIPLE BRANDS. TARGETING A FASHION CONSCIOUS GLOBAL AUDIENCE •W hat are we? A multi-brand international online retailer, targeting Website Share for Feb 2017 a fashion-conscious audience NEXT 5.6% • The UK best illustrates the impact of our multi-branded approach ASOS 7.0% New Look 4.1%
Slide 17: Highly Engaging Content Reaching a Social Audience
HIGHLY ENGAGING CONTENT REACHING A SOCIAL AUDIENCE Leading-edge fashion + Aspirational collaborations + Exciting campaigns & imagery Bringing our brands to life •C ollaborations with key influencers elevate brand awareness across markets •E xtensive social media coverage and marketing reinforces eac
Slide 18: We Keep Raising Our Game
WE KEEP RAISING OUR GAME • We leverage great product with Pricing & Promotions, Marketing and Customer Experience to drive growth • Operational agility allows the right levers to be pulled at the right time • In the last 12 months we have invested heavily into the customer • And will continue to do
Slide 19: Laying Foundations for Global Growth
L AYING FOUNDATIONS FOR GLOBAL GROWTH • Almost 40% of Sales are International •Investing ahead of the curve into our infrastructure and capabilities • Targeting markets that we know and understand remains our focus •S ize of the opportunity is significant • Service investments will continue to impro
Slide 20: Outlook
OUTLOOK FINAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2018 | NEIL CAT TO, CFO
Slide 21: Investing for the Long-Term
INVESTING FOR THE LONG-TERM INFRASTRUCTURE INTERNATIONAL • Second warehouse at Burnley completed. Automation • T ailored approach to focus markets expected to be completed by end FY19 •R einvesting gains and efficiencies to improve proposition • PLT warehouse move expected to complete by end 1H FY19
Slide 22: Warehousing
WAREHOUSING • Options continue to be evaluated in creating infrastructure for £3bn sales capacity • PLT warehouse: offering more options & flexibility. Expected to complete by end 1H 19 • Burnley: second warehouse build completed, automation expected to go-live end FY19 (£1bn net sales capacity) • C
Slide 23: FY19 Financial Guidance
F Y19 FINANCIAL GUIDANCE •G roup Sales Growth 35%-40% •A djusted EBITDA Margin range: 9-10%, whilst continuing to invest in opportunities to support future growth •D epreciation & Amortisation of £12m-£14m, with Capex £50m-£60m •E ffective Tax Rate: 18-19% (FY18: 16.9%) •A djusting Items £12-15m (sh
Slide 24: Summary
SUMMARY • A leading multi-brand fashion group • Operating in the attractive and growing e-commerce market • Highly cash generative • Significant market share opportunities available in all markets that we operate • Expect to deliver another year of strong profitable growth in FY19 • Continuing to in
Slide 25: Appendices
APPENDICES FINAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2018
Slide 26: Group Balance Sheet
GROUP BAL ANCE SHEET Y/E 28 FEBRUARY (£m) FY18 FY17 Assets Intangible assets 30.9 35.4 Property, plant and equipment 72.0 32.0 Financial assets 2.4 0.2 Deferred tax 4.4 1.9 Non-Current Assets 109.7 69.5 Working capital (31.0) (11.8) Net financial assets 5.5 (11.8) Cash 142.6 70.3 Interest bearing lo
Slide 27: Financial Summary: Last 5 Years
FINANCIAL SUMMARY: L AST 5 YEARS £580m £56.9m Sales Adjusted EBITDA £35.6m £295m £195m £18.7m £140m £14.1m £110m £12.2m FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Adjusted PBT £51.0m Adjusted EBITDA Margin 12.1% 11.1% 10.1% 9.8% 9.6% £31.9m £16.3m £11.2m £11.8m FY14 FY15 FY16 FY17 FY18 FY14 F
Slide 28: Reported Revenue: FY17 & FY18
REPORTED REVENUE : F Y17 & F Y18 Reported Sales 3 Mths to 31st May 3 Mths to 31st Aug 4 Mths to 31st Dec 2 Mths to 28 Feb 12 Mths to 28 Feb Breakdown (£m) FY18 FY17 %Chg FY18 FY17 %Chg FY18 FY17 %Chg FY18 FY17 %Chg FY18 FY17 %Chg Total 120.1 58.2 106% 142.8 69.1 107% 228.2 114.3 100% 88.7 53.0 67% 5
Slide 29: Brand KPIs
BRAND KPIs BOOHOO KPIs NASTY GAL KPIs Y/E 28 FEBRUARY FY18 FY17 CHANGE Y/E 28 FEBRUARY FY18 (£m) Active Customers 6.4m 5.2m +22% Active Customers 0.4m Number of Orders 13.6m 11.1m +22% Number of Orders 0.6m Order Frequency 2.13 2.13 - Order Frequency 1.37 Conversion Rate 4.3% 4.0% +30bps Conversion
Slide 30: Financial Calendar
FINANCIAL CALENDAR DATE EVENT 12TH JUNE 2018 Q1 TRADING UPDATE 26TH SEPTEMBER 2018 1H19 RESULTS ANNOUNCEMENT JANUARY 2019 (TBC) P3 TRADING UPDATE APRIL 2019 (TBC) FY19 RESULTS ANNOUNCEMENT
Slide 31: Supplier Management
SUPPLIER MANAGEMENT KEY FACTS • Member of SEDEX and require all suppliers to undertake SMETA We have c. 450 suppliers across 11 countries (SEDEX Members Ethical Trade Audit) 72% of goods sold are from the UK, China, India and Turkey • Undertake regular, unannounced audits by the Sourcing and Complia
Slide 32: Employment Policies
EMPLOYMENT POLICIES HIGH PROPORTION OF PERMANENT EMPLOYEES • boohoo maintained a ratio of 67% permanent employees to 33% agency workers in FY18 • Additional agency workers will be recruited during seasonally busy periods ACTIVE POLICY OF TRANSFERRING AGENCY WORKERS TO PERMANENT CONTRACTS • Agency wo
Slide 33: Glossary
GLOSSARY Calculated as PBT, interest, depreciation, amortisation, ADJUSTED EBITDA share-based payment charges and option gain on PrettyLittleThing acquisition (2017) Calculated as EBIT excluding share-based payment charges, ADJUSTED EBIT amortisation of acquired PrettyLittleThing and Nasty Gal intan
Slide 34: Group Websites
GROUP WEBSITES www.boohoo.com www.boohooman.com de.boohoo.com www.boohooman.com/au www.boohooman.com/us it.boohoo.com www.boohooman.com/eu ca.boohoo.com fr.boohoo.com nl.boohoo.com dk.boohoo.com www.prettylittlething.com mena.boohoo.com www.prettylittlething.com.au ie.boohoo.com ie.prettylittlething
Slide 35: Disclaimer
DISCL AIMER Certain statements included or incorporated by reference within this presentation may, or may be deemed to be, “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a numbe
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