Frasers Group PLC · LSE:FRAS
Frasers — Sports Direct International — Investor Day (September 2015)
65 slides from Frasers's investor day presentation, Sep 9, 2015
Slide 1: Capital Markets Day
SPORTS DIRECT INTERNATIONAL PLC Capital Markets Day Wednesday 9 September 2015
Slide 2: Dave Forsey, Chief Executive
SPORTS COM Dave Forsey CHIEF EXECUTIVE
Slide 3: Agenda
Agenda Welcome and Strategic review Dave Forsey, CEO 12:45 pm Baltics Market Joint Venture Are Altraja and Anti Kalle, Sportland founders 1:00 pm Aintree Aintree Premium Lifestyle Division Dave Forsey, CEO 1:45 pm Outlook and Q & A Senior Management 2:00 pm Refreshments 2:15 pm Shirebrook Warehouse
Slide 4: Group Strategy: Review
Group Strategy: Review • Unrivalled depth and breadth of product choice at the best available prices • Continuing roll-out of large format city centre stores • Targeting c. 60 store openings across Sports Retail Aintree Glasgow this year • Continued enhancement and investment in the existing store p
Slide 5: Group Strategy: Review
Group Strategy: Review • Leading European partner with third party brands including Nike, Adidas, Under Armour and Puma • Phase 3 of development of our Shirebrook National Distribution Centre nearing completion Aintree • Further combined gym and retail opportunities in the UK • Successful UK launch
Slide 6: Sports Direct Campus, Shirebrook
Sports Direct Campus, Shirebrook SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 6
Slide 7: Brands: Wholesale and Licensing
Brands: Wholesale • Expected A&P spend FY16 between £10 and £20m • Focus on heritage products within key Group brands • Further develop business in the Americas and Asia • Reduction in operating costs from the consolidation of back office functions Aintree Brands: Licensing • Licensing model still r
Slide 8: Baltics Partnership
BALTICS PARTNERSHIP SEPTEMBER 2015
Slide 9: Video
VIDEO
Slide 10: Agenda
AGENDA 1. Who we are 2. Why we do it 3. What is our market 4. How we do it 5. Innovative Demand Creation & Communication 6. Vision for 2020
Slide 11: 1. Who we are?
1. Who we are?
Slide 12: Anti Kalle and Are Altraja
ANTI KALLE (45) Education: BBA Law, University of Tartu 2006 MBA International business, EBS 1995 BBA Economics, Tallinn Technical University 1993 Member of Management Board - Sportland International Group Sportland Eesti AS AS Jalajälg, BC Viimsi MTU SÜKK ARE ALTRAJA (44) Education: MBA Internation
Slide 13: 2. Why we do it?
2. Why we do it?
Slide 14: Mission
MISSION To make the lives of young people more interesting, better and emotional through our products and services.
Slide 15: 3. What is our market
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Slide 16: The Baltics
THE BALTICS ESTONIA LATVIA LITHUANIA
Slide 17: Overview – Baltics
OVERVIEW – BALTICS ESTONIA • POPULATION: 1.25M (-10%) TALLINN POPUL. 430K • CAPITAL: TALLINN (0.4M) SOB 60% • GDP/CAPITA: EUR 12.8K • AV. INCOME: 930 EUR ESTONIA • LANGUAGE: ESTONIAN LATVIA RIGA • POPULATION: 2.0M (-10%) POPUL. 800K • CAPITAL: RIGA (0.8M) • GDP/CAPITA: EUR 10.7K LATVIA SOB 80% • AV.
Slide 18: Market Overview
MARKET OVERVIEW BRANDS & MACRO CONSUMER MARKETPLACE CATEGORIES ▪ GROWTH IN BALTICS IS ▪ YOUN G CON SUME R MORE • SHOPPIN G IS HAPPE N IN G ▪ N IKE SHARE 30-35 % HOLDIN G UP FAIRLY WE LL, AN D MORE AS “ WORLD IN MALLS. SPORTIN G ▪ ADI 15-20% GIVE N THE RUSSIAN CITIZE N S” – ATTRACTE D BY GOODS & MON
Slide 19: Culture, Youth, Sport
SDI & SPORTLAND TOUCH YOUTH CULTURE SPORT
Slide 20: 4. How we do it?
4. How we do it?
Slide 21: Diverse & Valuable Experience
DIVERSE & VALUABLE EXPERIENCE First Sportland retail Entry to store in Lithuania Finland First NIKE retail Minority participation store in Lithuania Entry to Russia Entry to Ukraine in Russia Exit from Russia First retail store First Sportland in Latvia Exit from Finland retail store Exit from Ukrai
Slide 22: SIG & Growing the Market
SIG & GROWING THE MARKET Baltic’s market Sportland International Group (“SIG”) is the #1 & fastest growing Sports Retailer in the Baltics Best locations in the 3 countries: 60 stores with total area ca 35 000 m2 (ca 379 000 sqft) 29 6.28 Mpeople Estonia Market size €180m Importance of local rele
Slide 23: Organisation structure
ANALYTIC Gerd KIILI Riina VESKIMÄGI SPORTLAND SPORTLAND SPORTLAND LATVIA CEO ESTONIA CEO OFFICE ASSISTANT OFFICE ASSISTANT OFFICE ASSISTANT Sandijs PINKULIS LITHUANIA CEO 09/2015 Vladas KORSAKOVAS Zivile CIUTIENE Liene GRASMANE Leidi LIND NIKE & ADIDAS Alvin KUIMET SPORT EQ & BIKES Henri KRUUSEL APP
Slide 24: Brands with Exclusive Rights - Growing the Market
Brands with Exclusive Rights - GROWING THE MARKET OTHER GLOBAL SPORTSBRANDS EXCLUSIVE DISTRIBUTION RIGHTS sold in SPORTLAND (57% of sales) in the Baltics (43% of sales) 38% 15% 9% 6% 1% 5% 1% 4% 8% 10% 3%
Slide 25: Brand Positioning Chart
BRAND POSITIONING CHART HIGH FASHION SPORT LOW
Slide 26: JV with SPORTSDIRECT.COM
JV with SPORTSDIRECT.COM GLOBAL SCALE FUTURE GROWTH LOCAL KNOWLEDGE • Accelerate • Pioneering the growth of 1. Sports Direct Group Baltic Sports international brands to the Baltics Market operations development 2. Big Box stores in the • Identify partners Baltics • Adopt Digital in new territories T
Slide 27: Sports Direct - Partner for Future Market Growth
SPORTS DIRECT - PARTNER FOR FUTURE MARKET GROWTH .... -2013 2013-..... EMOTION BRAND New Brands from SportsDirect PRODUCT ???? ?? ?? PRICE DISCOUNT Casual Sport Casual Sport
Slide 28: Stores
ee ~ STORES
Slide 29: Sportland Kristiine – Tallinn, Estonia
SPORTLAND KRISTIINE – TALLINN, ESTONIA
Slide 30: Sportland Akropolis – Vilnius, Lithuania
SPORTLAND AKROPOLIS (digitalisation)– VILNIUS, LITHUANIA
Slide 31: Sportland Alfa – Riga, Latvia
SPORTLAND ALFA (digitalisation)– RIGA, LATVIA
Slide 32: Sportland Viimsi – Tallinn, Estonia
SPORTLAND VIIMSI – TALLINN, ESTONIA
Slide 33: Sports Direct Olympia – Riga, Latvia
SPORTS DIRECT OLYMPIA – RIGA, LATVIA
Slide 34: Sports Direct Akropolis – Vilnius, Lithuania
SPORTS DIRECT AKROPOLIS – VILNIUS, LITHUANIA
Slide 35: 5. Innovative Demand Creation & Communication
5. Innovative Demand Creation & Communication
Slide 36: Innovative Demand Creation & Communication
4. INNOVATIVE DEMAND CREATION & COMMUNICATION 1. Approach 2. Events 3. Digitalization in retail 4. Digitalization off retail (magazine.com) 5. Paype 6. Feedback screens 7. Social media 8. Marketing KPI-s, planning, monitoring
Slide 37: Philosophy
PHILOSOPHY > OWN THE MARKETPLACE MEANS: Map high traffic places of sports in key cities and „talk“ & inspire athlete's/people – be very close to them! FIND & MAP > CREATE & LEAD & DEVELOP SPORTS CULTURE • best & biggest events (top 5) • biggest sports clubs (top 5) • drive biggest sport categories (
Slide 38: Brand Driven & Consumer Demand Oriented Approach
BRAND DRIVEN & CONSUMER DEMAND ORIENTED APPROACH TODAY E-TAILER/ E-COMMERCE
Slide 39: Developer & Promoter of Sports & Active Lifestyle
Developer & Promoter of Sports & Active Lifestyle SPORTS: COMPETE & PARTICIPATE CULTURE: FREE TIME, SPORT SPECTATORS FOOTBALL (participants 100,000) MUSIC: Supporting numerous cultural events Main sponsor: ESTONIAN FA (segment 1m) Metallica in Tallinn: 80,000 audience Partner of 10 clubs in the Balt
Slide 40: Consumer Engagement
CONSUMER ENGAGEMENT Target Audience EE LV LT Total Population (01.01.2012) 1.25 2.0 3.0 6.25 (milj. inhabitants) 10-40y, active (35% from total) 180 250 350 780 (milj. inhabitants) SPORTLAND Loyal Consumers 242 124 52 418 (thousands) FaceBook Fans (thousands) 81 24 50 155 Insta Fans (04.09.2015) 7,0
Slide 41: A&A Lifetime Lifestyle – Fulfill the Mission
A&A LIFETIME LIFESTYLE – FULFILL THE MISSION TIME TO REVIEW & TIME FOR THOUGHTS, DECISIONS IDEAS & RISK ENERGY TIME SKILLS MONEY OUTCOME: ENERGY SKILLS MONEY for REINVEST MAXIMIZE MAXIMIZE AUDIENCE RETURN
Slide 42: Events Video
EVENTS VIDEO
Slide 43: Sportland Sport Events FY 2016
SPORTLAND SPORT EVENTS FY 2016 Estonia - 130 Latvia - 86 Lithuania - 50 Total- 266 events
Slide 44: Loyal Customers
LOYAL CUSTOMERS ESTONIA LATVIA LITHUANIA BALTICS Mother tongue of a registerd customer Est 80% / Rus 20% Lat 60% / Rus 40% Lit 90% / Rus 10% Number of Registered LC cards in SPO 242 393 124 919 51 899 419 211 database (TOTAL) Number of LC cards used in last 2 years 125 203 34 650 8 505 168 358 Numbe
Slide 45: Sportland Magazine, Mobile LC Card, Feedback Screens
SPORTLAND MAGAZINE & .COM MOBILE LC CARD – PAYPE CONSUMER FEEDBACK SCREENS Launch: www.SportlandMagazine.com Launch: #1 Sportland Magazine in Lithuania Launch: Consumer Feedback Panels Paype – Est Launch, Roll out Lat / Lit 2015 Customers statistics Identification statistics Offers statistics EXTRA
Slide 46: Digital Screens in Sportland Stores
DIGITAL SCREENS IN SPORTLAND STORES JUNE2015 Name Single Lite 22" Single Lite 32" Single 42" Single 48" Single 55" TvTower x2 TvTower x3 TvTower x4 Videowall x3 Videowall x4 Construction 55" 55" 55" 42" 48" 55" 22" 32" 48" 48" Example visual Resolution 1280x1080px, 1920x1080px 1920x1080px 1920x1080p
Slide 47: Sportland Facebook
SPORTLAND FACEBOOK Under the same conditions (platform logic, administration, ads & campaign budget +13% growth hand in hand with fanbase growth): +14% +14% +27% We have to consider, that we are already +50% operating with 12%+ of all local Facebook +33% users. Games and active engagement is the key
Slide 48: Sportland Instagram
SPORTLAND INSTAGRAM Under the same conditions (platform logic, administration, posts & games flow): 35000 +100% 30000 We expect booming growth of the 25000 Instagram users within next years and 20000 Estonia predict to grow fast on Sportland +114% Latvia 15000 followers. Increasingly more Lithuania
Slide 49: 6. Vision for 2020
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Slide 50: SIG & Growing the Market
SIG & GROWING THE MARKET Baltic’s market Sportland International Group (“SIG”) is the #1 & fastest growing Sports Retailer in the Baltics Best locations in the 3 countries: 60 stores with total area ca 35 000 m2 (ca 379 000 sqft) 29 6.28 Mpeople Estonia Market size €180m Importance of local rele
Slide 51: Baltic Sporting Goods Market Ready for Growth
BALTIC SPORTING GOODS MARKET READY FOR GROWTH Expenditure on sporting goods per capita is expected to grow significantly… Expenditure on Sporting goods, € per capita
Slide 52: Retail Concepts – Positioning Estonia 2015
RETAIL CONCEPTS – POSITIONING ESTONIA 2015 Retailing concept through shop brand positioning EMOTION BRAND PRODUCT PRICE DISCOUNT -% sales Casual Sport
Slide 53: Retail Concepts – Positioning Latvia 2015
RETAIL CONCEPTS – POSITIONING LATVIA 2015 EMOTION EMOTION BRAND BRAND PRODUCT PRODUCT PRICE PRICE DISCOUNT DISCOUNT Casual Sport
Slide 54: Retail Concepts – Positioning Lithuania 2015
RETAIL CONCEPTS – POSITIONING LITHUANIA 2015 EMOTION EMOTION BRAND BRAND PRODUCT PRODUCT PRICE PRICE DISCOUNT DISCOUNT Casual Sport
Slide 55: Pah S
Pah S SPORTLAND S DIRECT. Jf -_~ aT ws —
Slide 56: Premium Lifestyle Division
Premium Lifestyle Division SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 1
Slide 57: Premium Lifestyle Division
“The pinnacle retail fascias within the SDI group, featuring clothing, footwear and accessories from the most premium, directional and exclusive brands available from around the world” Premium Lifestyle Division SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 2
Slide 58: Premium Lifestyle Stores
8 Stores 17 Stores 54 Stores SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 3
Slide 59: Operational Improvements
Operational Improvements The key benefits of a group approach: • Shared stock – group buying • Enhanced buying controls generating improved colour/size sell through • Stabilising core product range to provide constant availability • Improved automated allocation & replenishment system • Automated we
Slide 60: Strategy Improvements
Strategy Improvements • Enhancing existing retail space • Investing in new flagship locations • Offer our customers the best branded premium fashion range, across all categories and genders • Deliver great customer service to our customers at all times through a multi-channel approach • Website bene
Slide 61: In store Concept
In store Concept • The new FLANNELS.com concept takes inspiration from the highest level of store design with the aim of enhancing our position as the premium multi-brand retail destination • The main features of the store design are high quality materials, clean simple lines to accentuate and hero
Slide 62: In store Concept
In store Concept • A contemporary colour palette mix of greys, whites and blue highlights give an exceptional contrast and provide the overall tone for the store environment • Each floor will have its own subtle look and feel to be targeted at the gender and relevant brand mix SPORTS DIRECT INTERNAT
Slide 63: Leading multi-brand high street fashion retailer in the UK
• Aim to be the leading multi-brand high street fashion retailer in the UK • Specialising in branded denim and footwear • Key brands including G-Star, Lacoste, Emporio Armani & Hilfiger • Located in key macro market cities and shopping centres • In store environment aimed at a shop in shop brand exp
Slide 64: Outlook
Outlook • Trading since the year end has been in line with management’s expectations, underpinning the revised FY16 target of £420m for the 2015 Bonus Share Scheme • Performance continues to be driven by • Investment in product range and availability • Optimisation of in-store and web offer and intr
Slide 65: Questions?
SPORTS | ECT.com EXCEPTIONAL QUALITY * UNBEATABLE VALUE
Sports Direct International — Investor Day (September 2015) on 6ix