Brait Plc · JSE:BAT
Brait — New Look — FY2017 Earnings Presentation
24 slides from Brait's earnings presentation, June 2017
Slide 1: Investor Presentation FY17
INVESTOR PRESENTATION FY17 52 weeks to 25 March 2017
Slide 2: Key Headlines
KEY HEADLINES ANDERS KRISTIANSEN
Slide 3: Key Headlines
3 KEY HEADLINES IT HAS BEEN A DIFFICULT YEAR AND THE RETAIL ENVIRONMENT IS NOW MORE COMPETITIVE THAN EVER • Growing shift in customer mindset during the year to ‘buy now, wear now’, which challenges us to be even faster. • The promotion-led market in the UK and some product challenges meant we had t
Slide 4: Strategic Update
STRATEGIC UPDATE ANDERS KRISTIANSEN
Slide 5: Our Strategic Initiatives
5 OUR STRATEGIC INITIATIVES BRAND INTERNATIONAL EXPANSION MULTICHANNEL PRODUCT DEVELOPMENT MENSWEAR GROSS PROFIT MARGIN RATE
Slide 6: Brand
6 BRAND DRIVING ‘FRONT OF MIND’ CONSIDERATION • No. 1 UK Womenswear retailer for women under 35 years(1). • No. 2 Womenswear retailer in the UK(2). • Increased media investment across high impact channels. • Strong press coverage, achieving a global PR value of c. £142m in FY17. • Communicating a po
Slide 7: Key Strategic International Markets: China
7 KEY STRATEGIC INTERNATIONAL MARKETS: CHINA CHINA IS A KEY PRIORITY MARKET FOR DRIVING GROWTH • Our expansion in China continued during FY17, with 110 stores trading at the year end; 94% profitable(1). • We’ve evolved and refined a China-specific store model that we can now replicate and roll out q
Slide 8: Key Strategic International Markets: RoW
8 KEY STRATEGIC INTERNATIONAL MARKETS: RoW FRANCE • Dedicated local language transactional website launched. The new, mobile optimised site provides an important complement to our store estate. • Continued investment in store relocations and refurbishments also continued, despite a tough trading env
Slide 9: Multichannel: UK Retail
9 MULTICHANNEL: UK RETAIL A SEAMLESS, CONSISTENT EXPERIENCE • UK store estate of 592 stores. • Flexible store portfolio, with average unexpired lease length of c. 4 years. • Continued strong alignment between our store estate and online, especially in the UK, giving us a valuable opportunity to conv
Slide 10: Multichannel: Ecommerce
10 MULTICHANNEL: ECOMMERCE A SEAMLESS, CONSISTENT EXPERIENCE • In November 2016, we launched our Delivery Pass, offering customers free annual delivery for a fixed fee. • The introduction of e-receipts has given customers a convenient paperless option and helps us learn about shopping habits across
Slide 11: Product
11 PRODUCT LANDING KEY PRODUCT AT THE RIGHT TIME • Social media continues to transform customers’ appetites and shopping habits, driving a ‘buy now, wear now’ mindset. • We have improved speed to market and strengthened the Buying and Design teams to ensure we land key product at the right time. • W
Slide 12: Menswear
12 MENSWEAR DRIVING INCREASED AWARENESS • Supporting growth in our Menswear business, we delivered focussed marketing activity to drive awareness of our improved and expanded product proposition. • Performance continues to strengthen, driven by a continually improving product offer and our expanded
Slide 13: Gross Margin
13 GROSS MARGIN DELIVERING A SUSTAINABLE GROSS PROFIT MARGIN • We have a number of levers to achieve this including better sourcing and product negotiation, a clear price architecture strategy, an on-going reduction of Markdown, a review of product related costs and new technology. • Our top 20 supp
Slide 14: Corporate Social Responsibility (CSR)
14 CORPORATE SOCIAL RESPONSIBILITY (CSR) WORKING ETHICALLY AND SUSTAINABLY IS FUNDAMENTAL TO WHO WE ARE AND ALL THAT WE DO • We work hard to improve lives and livelihoods across our global supply chain. • We are committed to equal and fair working practices, working with the Employers’ Network for E
Slide 15: Financial Review
FINANCIAL REVIEW RICHARD COLLYER
Slide 16: Summary Consolidated Income Statement
16 SUMMARY CONSOLIDATED INCOME STATEMENT • Revenue decreased 2.4% (£35.9m). FY17 FY16 Strong performance in E-commerce and (52 weeks) (52 weeks) £m £m 3PE partially offset underperformance in Revenue 1,454.7 1,490.6 UK Retail. Revenue decreased 3.8% in Cost of sales (707.9) (705.7) constant currenci
Slide 17: Segmental Performance
17 SEGMENTAL PERFORMANCE SALES(1) • Challenging market conditions in the UK saw sales decline 8.8% (£94.2m). • Continued strong sales growth from E-commerce of 14.3% (£28.8m), was driven by increases in online traffic and higher conversion to sales. • Business with our 3PE partners also performed st
Slide 18: Summary Consolidated Balance Sheet
18 SUMMARY CONSOLIDATED BALANCE SHEET As at As at • We continue to actively manage our 25 Mar 17 26 Mar 16 inventory position to planned levels, £m £m Derivatives 33.1 16.3 retaining flexibility to trade into trends. Other non current assets 915.2 893.8 Non current assets 948.3 910.1 • Pre currency
Slide 19: Summary Consolidated Cash Flow Statement
19 SUMMARY CONSOLIDATED CASH FLOW STATEMENT FY17 FY16 (52 weeks) (52 weeks) • Underlying free cash flow of £42.5m £m £m was £82.6m lower than FY16, reflecting Operating profit 76.4 134.4 the decrease in operating profit and Non cash items 51.7 47.4 increased investment in working capital. Changes in
Slide 20: Capital Expenditure
20 CAPITAL EXPENDITURE TARGETED INVESTMENT IN OUR FY17 FY16 STRATEGIC INITIATIVES AND (52 weeks) (52 weeks) SUPPORTING INFRASTRUCTURE £m £m Total UK 54.0 50.4 • Our core UK market: New Space 15.9 8.7 Refurbishments 4.1 11.9 • 20 new store openings, 11 relocations and IT Infrastructure 22.9 18.5 14 c
Slide 21: Summary & Outlook
SUMMARY & OUTLOOK ANDERS KRISTIANSEN
Slide 22: Summary & Outlook
22 SUMMARY & OUTLOOK IT HAS CLEARLY BEEN A DIFFICULT YEAR AND WE EXPECT CONDITIONS TO REMAIN CHALLENGING THROUGHOUT THE COMING YEAR • The retail environment is now more competitive than ever, with a growing shift to ‘buy now, wear now’, which challenges us to be even faster and more agile. • With th
Slide 23: Q&A
Q&A ANDERS KRISTIANSEN & RICHARD COLLYER
Slide 24: Nee Ou
Nee Ou