N BROWN GROUP PLC INTERIM RESULTS 16 OCTOBER

Transcription

1 N BROWN GROUP PLC INTERIM RESULTS 16 OCTOBER

2 plc ALAN WHITE CHIEF EXECUTIVE 2

3 RESULTS SUMMARY 2012 m 2011 m % Revenue EBITDA Operating Profit Trading Profit Adjusted EPS (p) Dividend (p)

4 KEY FEATURES INTERIM RESULTS Revenue improving trend Gross margin mix impact Online increasing penetration Recent acquisitions encouraging trends Stores and International progress report Update on strategy plans Current trading - positive 4

5 SUMMARISED P/L Revenue Operating Profit m TY LY % TY LY % Established International/Stores (3.7) (2.9) LFL Revenue +3.7% 5

6 KEY BRAND PORTFOLIO AGE Ladieswear Menswear Stand Alone Upmarket Brands 6

7 HOME SHOPPING CUSTOMERS Brands Target Age m % of Total % Change < > New Customer Sales +20% -2% Active established customer accounts +1% -5% Sales per established customer account +1% +6% 7

8 CUSTOMER RECRUITMENT Online Brand Advertising Mini Catalogues Press Advertising TY 44% 10% 16% 30% LY 39% 11% 13% 37% Focus On Young/Mid Focus On Mid/Old 61% of first order value online 8

9 HOME SHOPPING PRODUCTS Turnover m % of Total % Change Ladieswear Footwear Menswear Home & Leisure Ladieswear 50% Sizes Menswear 50% Waist Corsetry 75% D-L Cup Footwear 92% E-EEEEEE fitting 83% 38 + Back 41% size 7+ ASP +2% 9

10 10

11 PRODUCT DEVELOPMENT 11

12 bps PRODUCT GROSS MARGIN RATE SS10 AW10 SS11 AW11 SS12 AW12 SS12 AW12 Product mix -ve -ve Amazing value lines -- ve -ve Marketing discounts - ++ve Stock clearance - ++ve Online trading -ve -ve Net impact -90bps bps 12

13 Online Sales ( m) % of Home Shopping Sales INTERNET PENETRATION % 53% % 38% 196m 33% 175m +12% 150m +17% 25% 128m +17% 21% +21% 106m 15% +45% 73m 10% +40% 6% 52m 33m +57% 13m 21m +70% +55% Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug

14 INTERNET SALES BY CUSTOMER GROUP % Penetration % Growth TY LY < > Growth rates +7% > total 14

15 ONLINE SALES DRIVERS Customer mix Recruitment - 61% first orders online - automatic 2.3m - service - 2m Site developments - SEO - Product promotions - Size guides Social media - e.g. 75k Facebook fans (x4) - High engagement scores Faster page loads 15

16 ONLINE ONLY PRODUCT SALES Moda in Pelle AX Paris Gemma Collins Glamorise 40k Lines Sales +57% >90% DD Telephones Computer Games 16

17 Apr-11 May Jun-11 Jul-11 MOBILES & TABLETS Aug Sep Oct-11 Nov Dec Jan-12 Feb- Mar- Apr-12 May Jun-12 Jul-12 Aug Sep 20.0% 15.0% 10.0% % of session % of online demand 5.0% 0.0% Mobile optimised checkout Mobile optimised browse Convergence bounce/ conversion rates 17

18 MOBILES & TABLETS PRODUCT WINDOW SEO Copy Refine results Sort by options Same product sequencing on desktop and mobile 18

19 CUSTOMER SERVICE Inbound orders -7%, inbound enquiry -18% WECC - Affinity sales - 6m demand My Account 250k enquiry sessions / week Enquiry to order ratio down 9% Direct despatch +28% Efficiency savings at DC Next day cut off 5pm (2pm) 6pm AW12 19

20 FIGLEAVES HIGH & MIGHTY Revenue 13m Returns down 1% Gross margin up Cost savings Menswear strong New stores H Revenue up 12% Gross margin down H2 Breakeven Excellent profit 20

21 INTERNATIONAL Revenue +53% Marisota > Simply Be direct mail Simply Be strong online 60k Facebook fans Losses reduced by 0.1m Returns rate still too high Re-engineer business model 2013 Recruitment restricted to online PPC Revenue -20% Losses reduced by 0.3m System improvements H2 FY Revenue c. 12m: FY Loss c. 3.5m (LY, 4.8m) 21

22 STORES Revenue - 1.7m Online halo Jacamo in Metro Centre, Liverpool Higher fashion demand Replenishment sub-optimal Loss 1.1m Focus on Q4 trading Q evaluation 22

23 INTERIM SUMMARY Improving revenue trend Gross margin down due to product, offer and customer mix Customer base growing Online dominating business model 23

24 plc DEAN MOORE FINANCE DIRECTOR 24

25 HIGHLIGHTS 26 weeks to 1 September m 2011 m vs.ly % Turnover % Operating profit % Trading profit % Pre-tax profit % Adjusted earnings per share 12.48p 12.10p +3.1% Dividends per share 5.45p 5.29p +3.0% Borrowings % Receivables % 25

26 GROUP TRADING ACCOUNT 26 weeks to 1 September m 2011 m vs.ly % Group Turnover % Gross Profit % Gross Margin % 53.3% 54.9% -160bps Distribution Costs (31.7) (31.6) +0.3% Sales and Administration (124.7) (121.0) +3.1% Group Operating Profit % Operating Margin 12.0% 12.9% 26

27 GROUP PROFIT & LOSS ACCOUNT 26 weeks to 1 September m 2011 m vs.ly % Group Operating Profit % Finance Costs (net) (3.7) (3.0) +23.3% Group Trading Profit % Unrealised FX movement (0.2) Profit Before Tax % Taxation (7.2) (10.8) -33.3% Profit After Tax % 27

28 REVENUE SPLIT 26 weeks to 1 September m 2011 m vs.ly % Product Sales Services

29 Gross Margin PRE-TAX MARGIN 26 weeks to 1 September 2012 Product Bad Debt /Financial Income Yield -90bps -70bps Operating Costs Cost base savings +80bps Finance Costs Refinancing -20bps Pre-tax margin (11.1%) -100bps 29

30 NET ASSET SUMMARY At 1 September m 2011 m vs.ly % Non Current Assets % Inventories % Receivables/Prepayments % Creditors/Accruals (148.6) (153.8) -3.4% Retirement Benefit Surplus/(Deficit) 1.6 (0.2) - Net Borrowings (188.1) (196.7) -4.4% % Gearing 45% 53% 30

31 RECEIVABLES AND PROVISIONING 26 weeks to 1 September wks to Aug 2012 m 26 wks to Aug 2011 m Year to Feb 2012 m Gross Trade Receivables Opening Bad Debt Provision Bad Debt Charge Debtors Written Off (27.8) (27.9) (53.8) Closing Bad Debt Provision Bad Debt Provision % 9.3% 8.3% 8.9% Bad Debt Charge % 8.0% 7.4% 7.7% Average Balance

32 BAD DEBT PERFORMANCE 9.50% 9.00% 8.50% 8.00% 7.50% 7.00% 6.50% 6.00% Policy reversed to recruitment Arrears stable Cash collect strong Recovery rates stable Charge % Turnover Provision % Receivables 32 32

33 OPERATING CASHFLOW 26 weeks to 1 September m 2011 m Operating Profit Depreciation & Amortisation/Share Option Charge Decrease/(increase) in Stock 1.1 (6.0) Increase in Receivables (14.3) (17.0) Increase/(decrease) in Payables 13.1 (3.1) Pension Obligation (2.3) (1.8) Cash Generated from Operations

34 GROUP CASHFLOW 26 weeks to 1 September m 2011 Cash Generated from Operations Taxation Paid (12.4) (7.7) Dividends Paid (21.5) (20.3) Investing Activities (12.0) (12.7) Share Issue Proceeds/(Purchases) 0.3 (0.5) Finance Costs (net) (3.6) (2.8) Net Cash inflow/(outflow) 4.4 (15.8) Opening Borrowings (192.5) (180.9) Closing Borrowings (188.1) (196.7) m 34

35 GROUP BORROWINGS At 1 September 2012 Facility m Drawndown m Securitisation Debt Bilateral Loans Overdraft 9 - Gross Borrowings Cash in Hand (62) Net Borrowings 188 All facilities in place until March

36 plc ALAN WHITE CHIEF EXECUTIVE 36

37 KEY AREAS OF FOCUS 2012/13 INTERNATIONAL BRAND DEVELOPMENT MULTI- CHANNEL STORES PRODUCT DEVELOPMENT KEY AREAS OF FOCUS CUSTOMER SERVICE KEY VALUE INDICATORS ONLINE TRADING CONTACT OPTIMISATION TERMS OF TRADE 37

38 BRAND DEVELOPMENT - 36% of revenue - revamp catalogue & website presentation - make product more contemporary Focused customer recruitment investment Brand management strengthened Brand charters established Brand awareness increasing - 75% women Brand profitability focus - 55% men Brand differentiation or rationalisation 38

39 ONLINE TRADING Endeca Pagebuilder Product windows - customer reviews - choose multiple options Product details - larger images - social media integrated - outfit building Checkout rebuild Service s - order confirmation - order despatch Contact optimisation Tablet optimisation 39

40 CASH & CREDIT TERMS Tests underway Orders not catalogue requests credit scored Up front payment option if credit spurned Market personal account advantages Reduce marketing costs for high scorers Benefits 2013/14 onwards 40

41 CURRENT TRADING Revenue +10.1% LFL +9.4% Favourable weather patterns Stronger customer database Lower input prices Gross margin flat Online sales +20% Revenue comparatives get tougher Margin comparatives get easier 41

42 Positive trends Revenue Gross margin SUMMARY Online trading opportunities Stores and International progress 42

43 plc INTERIM RESULTS 16 OCTOBER