Q4 and FY14 results and Strategy Update. Kurt Staelens CEO Jeroen Seyger CFO a.i. Eric Coorens COO

Transcription

1 Q4 and FY14 results and Strategy Update Kurt Staelens CEO Jeroen Seyger CFO a.i. Eric Coorens COO

2 2014 Highlights Kurt Staelens Financial Review Jeroen Seyger Strategy Update Kurt Staelens Q&A Kurt Staelens, Jeroen Seyger, Eric Coorens 2

3 2014 Highlights General Strong growth in Fashion under difficult market conditions further strengthened leading Benelux position Closure of 52 non-core shops Gain of market shares both offline and online Cumulative overhead savings of 2 mln in rent, savings in Re-defined brand identity for all formats headcount more than offset by establishment of in-house X- channel skill-set Successful new Manfield and Young Fashion formats implemented 3D Perfect Fit and loyalty 'passport' fully integrated in Belgium Sale of Kwantum initiated Merchandising and buying teams NL back on full strength, ready for process improvements 3

4 Strong sales growth in Fashion Core +8% and in Living +6% Impairment of 55million in Fashion NL and 11million in Fashion Belgium Gross margin decline Fashion Core from 52.6% in 2013 to 51.2% in Highlights Financial Operational cash flow of -33million, mostly from investments in stock, capex and non-core disposals Full year underlying EBIT nearly stable at -15million (FY13: -14million) Completion equity raise of 20m and refinancing of 160 million in debt facilities in November

5 2014 Highlights Market share won in all markets Sales fashion core vs market Sales Fashion core vs market Shoes, excluding clothes, accessories etc. Netherlands Belgium UK Offline Online Offline Online Offline Online Market MRG Market MRG Market MRG Market MRG Market MRG Market MRG 5

6 2014 Highlights Kurt Staelens Financial Review Jeroen Seyger Strategy Update Kurt Staelens Q&A Kurt Staelens, Jeroen Seyger, Eric Coorens 6

7 Operating performance (in million) Full Year Core Non-core Total Core Non-core Total Core Non-core Total Net sales Cost of sales Gross margin Selling Expenses Logistic expenses Overhead expenses Other operating income / expenses Total expenses Operating result

8 Operating performance (in million) Full Year Fashion Core Sales Gross margin% 51.2% 52.6% -1.4% Underlying operating income Fashion Non-Core Sales Gross margin% 45.0% 48.5% -3.5% Underlying operating income Living Sales Gross margin% 48.4% 47.1% 1.3% Underlying operating income Group Sales Gross margin% 50.1% 51.0% -1.0% Operating Income Underlying operating Income *Bridge from reported to operating income provided in next slide 8

9 Reported to underlying operating income (in million) Consolidated Asset Deals Restructuring / Adj to lease provision Other nonrecurring Underlying Variance ( ) Underlying Other nonrecurring Restructuring / Adj to lease provision Asset Deals Consolidated Fashion Living Core Fashion Living Non-Core* Other Non-allocated Total *Non-core consolidated operating income and underlying EBIT includes a release from Non-core provisions of 8,2 m in 2014 and 9,8 m in 2013 You can find further information on the core and non core splits in the appendix. 9

10 Non-Core shop development (in number of shops) 2013 Added Closed 2014 Fashion NL Fashion BeLux Fashion UK Fashion Other Fashion Living Total Further closures foreseen of 27 shops in 2015, 15 in 2016, 13 in 2017 and 22 in

11 Free Cash Flow (in million) Δ EBIT D&A EBITDA Δ Working Capital * Δ provision Capex Operational Cash Flow Net Debt *of which 15,4m from lower trade creditors; mostly due to year-end timing 11

12 2014 Highlights Kurt Staelens Financial Review Jeroen Seyger Strategy Update Kurt Staelens Q&A Kurt Staelens, Jeroen Seyger, Eric Coorens 12

13 Sharpening of Rebalancing for Profitable Growth Transformation pillars Higher profitability and cash flows Profit decline after worsening trading conditions Cost cutting in marketing Product quality Stock availability and capex. Rebalancing for profitable growth (RfPG) defined Improve stock availability Upgrade product quality Test shop concepts Increase (digital) marketing spend Improve X-channel capabilities Recruit and train new purchasers Strategy up to 2014 RfPG programme launched in H Initial results and market share growth confirm validity of RfPG Transformation program deliverables defined during Q3/Q Strategy Going Forward RfPG confirmed and sharpened in 4 transformation pillars Focus on Benelux Fashion Only as leading market positions and full country coverage are essential for X- channel transformation Disposal of other businesses effectuated over time

14 Sharpening of Rebalancing for Profitable Growth Transformation pillars Shop formats X-channel Focus on Fashion BNL Processes 14

15 Sharpening of Rebalancing for Profitable Growth Transformation pillars New Format rebranding Above-the-line pillars Shop formats X-channel +10 shop concept Brantano BE, Scapino, Manfield, Dolcis International brands layer High performance shop program Focus on Fashion BNL Processes 15

16 3h FREE click-and-collect 6h click-and-deliver 3D Perfect Fit New Format Rebranding Above-the-Line Pillars Brantano Belgium The shoe FRUN shopping experience the whole family will love What a shoe can do for you The X-channel USP s of Brantano Contemporary Affordable qualitative choice FRUN Family Local Village embeddeded store experience Existing New New International Brands 16

17 3h FREE click-andcollect 6h click-and-deliver 3D Perfect Fit 3h FREE click-andcollect 6h click-anddeliver 3h FREE click-andcollect 6h click-anddeliver 3h FREE click-andcollect 6h click-and-deliver 3D Perfect Fit 3h FREE click-andcollect 6h click-and-deliver 3D Perfect Fit New above-the-line format pillars Netherlands A-brand quality at the lowest price Shoe shopping experience the whole family will love Steve Madden, Ecco, lowest price guarantee Dr Visser kids Strong private labels & sport brands (MountainPeak, Osaga) Niche: diabetic, obese Mix of A brands and private labels 65% leather = quality New International Brands Affordable, Timeless style & quality Affordable Trendy Trendy Sneakers Almost Mono brand (Manfield private label) Up-stretch the Manfield brand via Van Lier, Steve Madden Own invito label Catwalk themes Bloggers content & video feeds Trendy sneakers of TOP A- brands NEW Pro Femme: 40% unique products 17

18 + 10 Store Concept Initial Pilot Results New Manfield shop format piloted in Amsterdam and Rotterdam Results initial pilot period are very promising Sales +41% Net Margin +34% Visitors +53% Conversions -1% #Transactions +28% Ticket amount +11% Stock (partially) in shop Next 10 shops rolled out in Q and further shops in remainder of Design and roll out of other formats started in

19 + 10 Store Concept Concept launch in 15Q3 with initial pilot during 2015 Roll out planned in Shop concept will include full X-channel facilities with 'internet zuilen', X-channel pick-up and returns, 3D Perfect Fit 19

20 Sharpening of Rebalancing for Profitable Growth Transformation pillars New Format rebranding Above-the-line pillars Shop formats X-channel Real time total (online and in-store) stock view +10 shop concept Brantano BE, Scapino, Manfield, Dolcis International brands layer 3h free Click-and-collect 6h Click-and-deliver 3D Perfect Fit High performance shop program Multi-channel CRM (and smarter markdown) Focus on Fashion BNL Processes 20

21 Rebalancing for Profitable Growth Transformation Pillars Best Product Younger X-channel model superior than online-only model proven by 2014 market share trends X-Channel Online only 0 extra-cost-possibility for return, size exchange, delivery via click-and-collect Easier return, size exchange, pay-after-you-fit in Benelux stores Operational Excellence Customer Intimacy 21

22 3D Perfect Fit fully operational in Belgium, and rolled-out in NL in % of children wear inappropriate shoes 3D Perfect Fit is the main CRM vehicle to capture data in a foot passport The foot passport is the basis for customized promotions Perfect fit data will provide input for product development of private labels with optimized fit Results so far: 110,000 active family foot passports ; return % from 25% to 15%; +29% in average ticket value 22

23 Sharpening of Rebalancing for Profitable Growth Transformation pillars New Format rebranding Above-the-line pillars Shop formats X-channel Real time total (online and in-store) stock view +10 shop concept Brantano BE, Scapino, Manfield, Dolcis International brands layer 3h free Click-and-collect 6h Click-and-deliver 3D Perfect Fit High performance shop program Multi-channel CRM (and smarter markdown) Own product development and concentration of manufacturers Implementation of UK E2E product process in Benelux Focus on Fashion BNL Processes Rent renegotiations Supplier renegotiations Synergies in Benelux distribution centers Standardisation of back-office, X-channel/CRM, 23

24 Best practice E2E processes bring margin improvement of up to 2-3% Intake margin +1% Mark- down -7% Stock as % revenue -7% 24

25 Sharpening of Rebalancing for Profitable Growth Transformation pillars New Format rebranding Above-the-line pillars Shop formats X-channel Real time total (online and in-store) stock view +10 shop concept Brantano BE, Scapino, Manfield, Dolcis International brands layer 3h free Click-and-collect 6h Click-and-deliver 3D Perfect Fit High performance shop program Multi-channel CRM (and smarter markdown) Sale of Kwantum Sale of Nea Sale of Fashion UK 'Manage for cash' of 108 remaining non-core shops Investigate options for cooperation and/or consolidation Focus on Fashion BNL Processes Own product development and concentration of manufacturers Implementation of UK E2E product process in Benelux Rent renegotiations Supplier renegotiations Synergies in Benelux distribution centers Standardisation of back-office, X-channel/CRM, 25

26 Focus on Fashion Benelux Retail landscape is toughening in all countries Shake out in the market ongoing Focus on leading market positions and full country coverage are essential for X-channel transformation and provides best value Enables strategic cooperation and consolidations Macintosh shop concepts are underinvested in for years Divestments allow for accelerated investments as it frees up resources which can be allocated to a smaller base Investments to upgrade Benelux shop formats Proceeds will allow for strengthening of balance sheet Savings from lower interest cost, in turn, can be re-invested in the business 26

27 2014 Highlights Kurt Staelens Financial Review Jeroen Seyger Strategy Update Kurt Staelens Q&A Q&A Kurt Staelens, Kurt Staelens/ Jeroen Seyger, Jeroen Seyger Eric Coorens 27

28 Appendix

29 Reported to underlying operating income Core and Non Core (in million) Asset Deals Other operating cost Provision Release Other Underlying Variance ( ) Underlying Other Provision Release Other operating cost Asset Deals Consolidated Consolidated Core Fashion Living Other Non-allocated Total Non-Core Fashion Other Living Other Non-allocated Total Total Non-core Provision Total