SPD Prelim 2015 presentation - FINAL

Transcription

SPORTS DIRECT INTERNATIONAL PLC
Preliminary Results Presentation
For the 52 weeks ended 26 April 2015
Thursday 16 July 2015
Dave Forsey
CHIEF EXECUTIVE
FY15: Group highlights of a record year….
•
Sports Retail gross margin increased by 170 bps to 44.6%
•
Group underlying EBITDA increased by 15.7% to £383.2m
•
Underlying profit before tax up 20.5% to £300.3m
•
Underlying free cash generation of £301.8m
•
Sports Retail like-for-like stores gross contribution increased
by 7.4% (FY14: 10.5%) *
•
Continued roll-out of large format city centre stores
•
Successful UK launch of Click and Collect in FY15 H2
•
Record EBITDA achieved v. 4th year Share Scheme target
•
Strategic investments working
•
Net debt decreased to £59.7m (£212.0m at 27 April 2014)
Aintree
Aintree
…..despite some headwinds.
* Excludes contribution in EAG and SIG as prior year comparative is not a full
year
SPORTS DIRECT INTERNATIONAL PLC / Preliminary Results Presentation / Thursday 16th July 2015
Glasgow
3
FINANCIAL REVIEW
FY15: Group Revenue Bridge
+14.4%
-3.0%
+4.1%
£2,833m
Revenue (£m)
+3.9%
£2,706m
•
Sports Retail revenue growth of 5.5%
•
Group revenue growth of 4.7%
5
FY15: Sports Retail Overview
Sports Retail Revenue
Sports Retail Gross Margin
45.0
44.6
44.5
2,600
£2,399m
2,400
£2,274m
£384m
2,200
Revenue (£m)
£335m
2,000
44.5
44.0
Stores and other
43.5
Gross Margin (%)
Online
42.9
43.0
43.2
42.5
42.0
41.5
41.0
40.3
40.9
40.5
40.3
40.0
FY'12
H1'13
FY'13
H1'14
FY'14
H1'15
FY'15
• Gross margin increase of 170 bps year on year, primarily due
to higher proportion of ‘better’ and ‘best’ Group branded products
1,800
1,600
Sports Retail Like-for-Like Contribution Growth
1,400
£1,939m
£2,015m
12.0%
1,200
10.6%
10.5%
10.0%
8.0%
1,000
7.4%
6.8%
6.0%
800
FY14
FY15
4.0%
2.0%
•
Online revenue growth of 14.4%
•
Stores and other growth of 3.9%
3.7%
0.7%
0.0%
FY10 FY11 FY12 FY13 FY14 FY15
• FY15 like-for-like Sports Retail stores only gross contribution:
+7.4% (2014: +10.5%) *
* A like-for-like store is one that has been trading for the full 12 months in both periods and has not been affected by a significant change, e.g, major refurbishment. Excludes contribution in EAG and SIG as
the prior year comparative is not a full year
6
FY15: Sports Retail Operating Costs
FY15
(£m)
FY14
(£m)
Change
(%)
Store Wages
239
211
13.1
Premises Costs
211
193
9.5
Other Retail costs
281
246
14.2
Currency impact*
(16)
6
-
Sports Retail Operating Costs
715
656
9.0
Sports Retail Underlying EBITDA pre associates
354
319
10.9
3
2
50.0
357
321
11.0
Associates (Heatons & others)
Sports Retail Underlying EBITDA
•
Sports Retail operating costs impacted by the full year effect of proportionally higher costs in our
acquired European businesses and costs in our recently established Fitness division
* Due to the translation of Euro denominated costs in our European businesses into Sterling
7
FY15: Premium Lifestyle
250
£214.1m
FY14
• May 2013: acquired remaining 20% of Cruise
• July 2013: acquired 51% of Pulp, a six store retail fashion chain
Van Mildert
£207.6m
Van Mildert
200
FY15
• Continued rationalisation of USC/Republic business
• Consolidation of key head office functions across the division
• Further growth in online sales
FY14
(£m)
Change
(%)
Premium
150
Revenue
FY15
(£m)
Premium
100
207.6
214.1
(3.0)
80.5
86.3
(6.7)
Gross margin %
38.8%
40.3%
Store Wages
(20.8)
(25.6)
Revenue
Gross margin
USC/ Republic
USC/ Republic
FY14
FY15
50
(18.8)
0
Premises Costs
(39.3)
(50.0)
(21.4)
Other Costs
(28.1)
(31.1)
(9.6)
Total Operating Costs
(88.2)
(106.7)
(17.3)
(7.7)
(20.4)
(62.3)
Division Underlying EBITDA
•
Gross margin impacted by clearance of surplus stock in our
Premium businesses
8
FY15: Brands Division
250
£217.5m
Revenue (£m)
200
32.3
£226.4m
33.1
150
100
185.2
193.3
Licensing
Wholesale
50
0
FY14
FY15
• Revenue: up 4.1%
– Licensing: up 2.5%
– Wholesale: up 4.4%
• Wholesale margin: 30.1%
– Down 310 bps
• Licensing:
– FY15: 58 deals completed / contractual minimum royalties of $25m over the life of the contracts
9
FY15: Brands Operating Costs
FY15
(£m)
FY14
(£m)
Change
(%)
Wages
21.2
22.9
(7.4)
Advertising & promotion
12.7
15.0
(15.3)
Other Brands Costs
23.1
25.2
(8.3)
Total Brands Operating Costs
57.0
63.1
(9.7)
Brands Underlying EBITDA
34.1
30.2
12.9
10
FY15: Underlying EBITDA Bridge
-15.1%
+62.3%
+12.9%
UNDERLYING EBITDA (£M)
380
-£10.1
+11.1%
£12.7m
(£10.1m)
£3.8m
360
£35.6m
340
£383.2m
320
300
£373.1m
£331.1m
280
FY14 pre Share
Schemes' non-cash
charges
•
Sports Retail
Premium Lifestyle
Brands
FY15 pre Share
Schemes' non-cash
charges
Share Schemes'
non-cash charges
FY15
Group underlying EBITDA (pre Share Scheme charges) increased by 15.7%
11
FY15: PBT / PAT / EPS
FY15
(£m)
FY14
(£m)
Change
(% )
Underlying EBITDA (pre share scheme)
383.2
331.1
15.7
Share scheme charge
(10.1)
(11.9)
(15.1)
Depreciation (excl. impairment)
(67.8)
(63.7)
6.4
(6.5)
(7.8)
(16.7)
1.5
1.6
(6.2)
Underlying PBT
300.3
249.3
20.5
Underlying Taxation
(69.1)
(62.3)
10.9
(0.9)
0.6
-
230.3
187.6
+22.8
592,294
585,514
38.9p
32.1p
Interest
Investment Income
Non-controlling interests
Underlying Profit after Tax
Number of shares (000s) (1)
Underlying Basic Earnings per Share
+21.2
(1) The weighted average number of shares includes the full year impact of the vesting of 23.5 million shares in August 2013
and October 2013 under the 2009 Share Scheme and the Executive Share Scheme respectively.
12
FY15: Depreciation & Amortisation
FY15
(£m)
FY14
(£m)
Change
(% )
50.5
49.7
1.6
Sports Retail - Change in estimated useful life – fixtures & fittings
3.6
2.2
63.6
Sports Retail - Change in estimated useful life – warehouse
4.3
-
-
58.4
51.9
12.5
Premium Lifestyle
3.2
5.4
(40.7)
Brands
6.2
6.8
(8.8)
67.8
64.1
5.8
Sports Retail - Stores, warehouse and amortisation of goodwill
Total Sports Retail
Total
FY14: The useful life of fixtures and fittings was reduced from 7 years to 6 years
FY15: The useful life of fixtures and fittings was reduced from 6 years to 5 years, and the depreciation policy was changed
from reducing balance to straight line
The useful life of our Shirebrook warehouse has been reduced from 15 to 10 years straight line
13
FY15: Taxation
FY15
(£m)
FY14
(£m)
313.4
239.5
65.8
55.1
Non-qualifying depreciation
3.5
4.9
Other differences
2.8
(0.2)
72.1
59.8
23.0%
25.0%
Reported PBT
Standard rate of corporation tax (1)
Effective tax
Actual effective tax rate
The effective rate for FY16 is expected to be in the region of 22%.
(1) The standard rate of corporation tax was 21% in FY15 (FY14: 23%)
14
FY15: Cash Flow
FY15
(£m)
FY14
(£m)
EBITDA (pre scheme costs)
Realised (loss)/profit on fx contracts
Taxes paid
383.2
(3.7)
(77.7)
331.1
1.8
(55.7)
Underlying free cash flow
301.8
277.2
Working capital
Inventory
Debtors / Creditors, other
57.0
(121.8)
(54.8)
(55.3)
Acquisitions (including debt) (1) (2)
Net (purchase of) / proceeds from investments (3)
Purchase of properties (inc. warehouses)
Proceeds from the sale of freehold properties (inc. warehouses)
Other Capital expenditure
Finance costs and other financing activities
(3.8)
4.1
(24.0)
21.2
(76.3)
(5.9)
(144.2)
(4.6)
(20.8)
(48.3)
(7.2)
Decrease/ (Increase) in net debt
152.3
(58.0)
(1) Acquisitions in FY14 included EAG, SIG, Yeomans and Gelert
(2) The purchase of EAG included 12 properties with a book value of £67.6 million
(3) Includes the purchase and sale of Debenhams shares
15
FY15: Capital Expenditure
FY15
(£m)
FY14
(£m)
Freehold acquisitions
Warehouse and Shirebrook store expansion
New stores (leasehold)*
Maintenance capex
Other
5.3
37.4
25.1
15.2
10.3
13.4
5.2
16.1
11.9
11.0
Sports Retail
Premium Lifestyle
Brands
93.6
2.3
4.4
57.6
7.0
4.5
100.3
69.1
(21.2)
-
79.1
69.1
Proceeds on disposal of Fixed Assets
Net Capital Expenditure
• FY16: target capital expenditure: c.£100m including completion of Phase 3 of the Shirebrook warehouse
* Includes gyms
16
FY15: Net Debt Bridge
-200
379.5
-150
(100.3)
-100
(68.6)
NET DEBT (£M)
-50
4.1
21.2
(77.7)
0
100
59.7
(5.9)
50
212.0
150
200
250
•
•
Net Debt
FY14
EBITDA &
FX
Working
capital &
other
Income from Capital
investments Expenditure
Sale of
freehold
property
Interest
Tax
Net Debt
FY15
Investment in working capital
Capital expenditure including stores and Phase 3 of the Shirebrook development
17
Matt Pearson
ACTING CHIEF FINANCIAL OFFICER
FINANCIAL REVIEW
OPERATIONAL REVIEW
Sports Retail: Property Portfolio UK
FY15
FY14
UK Stores (3)
440
417
Openings
39
32
12 out of the 16 closures in FY15 have been relocations into
larger and better configured space
Closures
16
10
Leasehold expiry profile is now 4.6 years (3)
SPORTSDIRECT.com fascia
428
401
c.4.75m(1)
c.4.5m
•
Square footage increased to c. 4.75m sq. ft. (1)
•
39 new stores opened in the period (2)
•
•
Retail Area (sq. ft.)
•
Target 30 to 40 store openings, 30% of which are expected to
be relocations.
•
Continued enhancement and investment in the existing store
portfolio such as:
• improved visual merchandising;
• lower stock densities; and
• specialist performance areas within stores.
•
Target c. 300k sq. ft. of existing space to be refitted
•
Continued focus on large format stores in key markets
(1)
Due to differing methodologies, this implies a range between 4.5m sq. ft. – 5.0m sq. ft.
(2)
Includes four concessions currently being trialled within Debenhams
(3)
Excluding Lillywhites Piccadilly
19
Sports Retail: Mega Store Format
Glasgow city centre
Glasgow city centre extension
•
•
•
•
New Glasgow city centre store opened in March 2015
Net sales area increased from 22,000 sq. ft. over 2 floors to
c.50,000 sq. ft. over 5 floors.
Enhanced in-store concepts.
Collaboration with key suppliers e.g. Under Armour.
Leeds city centre
• New Leeds city centre store to open summer 2015
• Existing store trades 16,000 sq. ft. over 2 floors.
• New store will trade c. 50,000 sq. ft. over 4 floors.
Before
Narrow entrance with no
ground floor area
After
New ground floor sales entrance leading
to extended and refurbished store
Leeds city centre – new store
Birmingham city centre
• Contractually committed to take the former Primark unit in
Birmingham city centre.
• Relocating from c 18,000 sq. ft. to c.60,000 sq. ft.
• Expected to open during 2017/18
Close to securing other large format city centre store
opportunities
20
Sports Retail: Property Portfolio EU
Stores
FY15
Stores
FY14
Austria
46
52
Belgium
43
44
Estonia (1)
24
20
Latvia (1)
13
13
Lithuania (1)
12
12
Portugal (2)
17
15
Slovenia
15
15
Poland
10
7
France
7
6
Czech Republic
6
4
Holland
6
6
Cyprus
6
5
Hungary
5
4
Slovakia
4
3
Germany
3
3
Luxembourg
2
2
Spain
1
1
Switzerland
1
0
221
212
Territory
•
•
•
Square footage remained at c. 3.0m sq. ft.
16 new stores opened in nine different countries in FY15
7 closures in two countries in FY15
•
Leasehold expiry profile is now 4 years
•
Target is to open between 20 and 30 new stores in seven countries in FY16
•
Continued roll-out of the Boot Room concept
Associates
Salzburg Kasern
(1)
(2)
(3)
No. of Stores
Rep. of Ireland (3)
27
Iceland (4)
1
Total
28
Includes only stores with SPORTLAND or SPORTSDIRECT.com fascias, Sports Direct owns a
60.0% stake in this business
Sports Direct owns a 50.1% stake
Sports Direct owns a 50.0% stake
Total
(4) Sports Direct owns a 40.0% stake
(5) Due to differing methodologies, this implies a range
between 2.5m sq. ft. - 3.5m sq. ft.
21
Sports Retail: Austria and Baltics Update
Austria
•
Continued reconfiguration of Mega stores
•
Key Austrian Mega stores to be re-branded to
Lillywhites fascia
•
Similar to UK city centre format
•
Wintersports/outdoor still key areas
•
Collaboration with key suppliers (e.g. Salomon)
•
Sportsdirect stores (former Sports Experts) continue
to be relocated and/or upgraded
Lillywhites, Innsbruck
Baltics
•
Two stores in Estonia opened under the
SPORTSDIRECT.com fascia
•
2 stores in Lithuania and 1 store in Latvia opening
during FY16 under the SPORTSDIRECT.com fascia
•
Sportland investment in relocations/new sites/re-fits
•
Strengthen relationships with key suppliers
Sportland, Estonia
22
Sports Retail: Fitness Division Created
•
Acquired 25 former LA Fitness sites
•
Opened an additional 2 gyms in Aintree and Keighley in FY15.
•
Aintree is a new build site with:
•
40,000 sq. ft. retail space over 2 floors
•
A separate 20,000 sq. ft. dry gym
•
Additional gym openings planned for FY16.
•
Continuing to explore combined gym and retail
opportunities in the UK
Aintree
23
Sports Retail: Marketing
•
February 2015 saw adidas launch its final version of the
iconic F50 football boot, with Sports Direct channels
chosen as key marketed distribution points
•
Executed in store through bespoke window executions
and refreshed fixturing and supported online with
product & ambassador assets through Sports Direct and
Soccer Scene
• In collaboration with Under Armour, the Ground Floor of
our new extended Glasgow City Centre store has opened
during July 2015
• Through high quality store in store visual merchandising
and a wide range of sporting and lifestyle products the
concept is fully aligned with the Under Armour brand
identity.
BETTER IMAGE NEEDED
24
Sports Retail: Marketing
•
•
In only its second period of audit circulation
results our consumer magazine, Forever Sports,
is now ranked as the bestselling sports magazine
in the UK
•
Even within the highly competitive Men’s Lifestyle
category, Forever Sports is now the 2nd best
selling title, ahead of the like of GQ & Esquire
Lonsdale ambassador Carl Froch stunned a sell out
Wembley Stadium audience of 80,000 with an 8th
round KO of George
Groves in May 2014
25
Sports Retail: Online Overview
Overview
•
•
•
•
•
•
•
Successful UK launch of Click and Collect – now over 20%
of all UK orders delivered by Click and Collect
o Exceptional considering the £4.99 charge
Resulting in accelerated online growth in FY15 H2
Continued improvements to responsive websites
Mobile site visits continue to increase and now represent
over 50% of all traffic
Mobile site ranked in the top four retailers in the FTSE 100
in terms of mobile website performance*
Checkout redesign - introduction of a guest checkout and
streamlining of the checkout process
Improvements to our Customer Relationship Management
system resulting in better response times and ability to pool
resource from other parts of the business
Objectives:
• Introduction of a fast pay check-out solution
• Introduction of dedicated websites and new payment types
for our European business
Online Sports Sales
£450m
£384m
£400m
£350m
£335m
£300m
£264m
£250m
£200m
£174m
£150m
£100m
£50m
£0m
FY12
FY13
FY14
FY15
* The Search Agency UK’s Mobile Experience Scorecard: FTSE 100 Companies –
http://go.thesearchagency.com/mobile-experience-scorecard-ftse-100-2015
SPORTS DIRECT INTERNATIONAL PLC / Interim Results Presentation / Thursday 16th July 2015
26
Premium Lifestyle
•
Consolidation of key head office functions in
Flannels.com, Cruise and Van Mildert, resulting in
operating cost savings
•
Beginning to see the benefit of the re-structuring of
Republic in the prior year and the closure of lossmaking stores in FY15
•
Successful launch of Click and Collect in USC stores
now over 15% of all UK orders delivered by Click and
Collect
•
•
Strong growth in online revenue driven by stock
availability and system improvements
Continue to strengthen relationships with key
suppliers
Store count
Fascia
April 2015
April 2014
USC
66
90
Cruise
10
10
Flannels.com
8
8
Van Mildert
10
9
Others
9
9
Total
103
126
27
Brands: Wholesale
• Overall wholesale revenue of £193.3m up 4.4% on prior
year
• Sales growth in a challenging UK wholesale market
• US trading in line with expectations and remains c.40% of
total wholesale sales
• Sales in Europe down 3.8% due to the adverse trading
conditions in Southern Europe in H2
• Wholesale gross margin down by 310 basis points to
30.1% due to a shift in sales mix towards lower margin
lines
• Investment in key Group Brands expected to continue at
similar levels to previous years
• Expected A & P spend FY16 between £10 and £20m
28
Brands: Licensing
• Licensing revenues were up 2.5% to £33.1m.
• 58 new license agreements, covering multiple brands and
product categories, were signed during the year with minimum
contracted values of $25.0m over the term of the agreements
• Group has 401 license agreements worldwide across 264
licensees, with contracted minimums of $305m over the
remaining life of the agreements
• Sports Direct Retail licensing continues to grow with 14 stores
open in Malaysia and 13 open in the Middle East
• Everlast, Dunlop & Slazenger continue to drive growth,
representing c. 65% of total licensing income between them
• Growth in Australia due to numerous Dunlop & Slazenger
agreements following the purchase of the IP in the region
• Licensing in certain territories has become challenging due to
currency devaluations, in particular Russia and India
• Licensing model still regarded as key driver of Brands division
growth and profitability
29
FY16: Outlook Statement
•
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 introduction
of UK Click and Collect
•
Growing proportion of ‘better’ and ‘best’ Group branded
products in key categories
•
Investment in store portfolio
Group’s success underpinned by delivering exceptional quality and unbeatable value to our
consumers
Our returns for shareholders are driven by our workforce: All targets for 2011 Bonus Share
Scheme are achieved, c.5m shares to c.2,000 participating employees
30
QUESTIONS?

SPD Prelim 2015 presentation - FINAL

Transcription

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