SPORTS DIRECT INTERNATIONAL PLC Capital Markets Day Wednesday 9 September 2015
Dave Forsey CHIEF EXECUTIVE
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 and Retail tour 2:30 pm Coaches depart for Chesterfield 4:00 pm Glasgow SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 3
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 portfolio Under Armour area: Glasgow SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 4
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 of Click and Collect SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 5
Sports Direct Campus, Shirebrook SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 6
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 regarded as key driver of Brands Division growth and profitability • Focus on growth in the Americas, Middle East and Asia • Sports Direct Retail licensing continues to grow with 14 stores open in Malaysia and 13 open in the Middle East SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 7
BALTICS PARTNERSHIP SEPTEMBER 2015
VIDEO
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
1. Who we are?
ANTI KALLE ( 4 5 ) Education: BBA Law, University of Tartu 2006 MBA International business, EBS 1995 BBA Economics, Tallinn Technical University 1993 Mem ber of Managem ent Board - Sportland I nternational Group Sportland Eesti AS AS Jalajälg, BC Viimsi MTU SÜKK ARE ALTRAJA ( 4 4 ) MBA International business, EBS1995 Education: BBA Engineering, Estonian Agricultural Academy 1993 Mem ber on Managem ent Board - Sportland I nternational Group Sportland Eesti AS AS Jalajälg FC ELVA MTÜ SÜKK Estoninan Football Association
2. Why we do it?
MISSION To make the lives of young people more interesting, better and emotional through our products and services.
3. What is our market
THE BALTICS ESTONIA LATVIA LITHUANIA
OVERVIEW – BALTICS ESTONIA TALLINN • POPULATION: 1.25M (-10%) POPUL. 430K • CAPITAL: TALLINN (0.4M) SOB 60% • GDP/CAPITA: EUR 12.8K ESTONIA • AV. INCOME: 930 EUR LANGUAGE: ESTONIAN • LATVIA RIGA • POPULATION: 2.0M (-10%) POPUL. 800K • CAPITAL: RIGA (0.8M) LATVIA SOB 80% • GDP/CAPITA: EUR 10.7K • AV.INCOME: 700 EUR • LANGUAGE: LATVIAN LITHUANIA LITHUANIA VILNIUS • POPULATION: 3.0M (-15%) POPUL. 550K • CAPITAL: VILNIUS (0.5M) SOB 50% • GDP/CAPITA: EUR10.8K AV. INCOME: 650 EUR • • LANGUAGE: LITHUANIAN
MARKET OVERVIEW BRANDS & CONSUMER MACRO MARKETPLACE CATEGORIES ▪ ▪ ▪ GROWTH IN BALTICS IS • YOUNG CONSUMER MORE NIKE SHARE 30-35% SHOPPING IS HAPPENING AND MORE AS “WORLD ▪ HOLDING UP FAIRLY WELL, IN MALLS. SPORTING ADI 15-20% CITIZENS” – ATTRACTED BY GIVEN THE RUSSIAN GOODS & MONOBRAND ▪ THE REST OF BRANDS GLOBAL TRENDS, TURMOIL ARE THE MAIN CHANNELS. BELOW 10% STUDYING & TRAVELLING ▪ EXPORTS AND INVESTMENTS ▪ ABROAD. DIGITAL GROWING, 15% OF ARE AFFECTED BY CURRENT NIKE VOLUMES ▪ CATEGORY (E.G RUNNING) GEOPOLITICAL IN THE MARKET (MOSTLY ▪ BRANDS (E.G. ASICS), HIGH CONSUMERS HIGLY UNCERTAINTY, WHILE CROSS-BORDER) SEASONAL CHANGES (E.G. DIGITILIZED. OVER 50% OF ▪ DOMESTIC DEMAND WINTER) PHONES ARE SDI WITH FIRST STORES. REMAINS STRONG. ▪ SMARTPHONES, INTERNET IMPACT PRIMARILY SKIS IN WINTER & BIKES IN ▪ PENETRATION OVER 70% SUMMER GDP FORECAST FOR 2015 MAINSTREAM SPORT ▪ ▪ ESTONIA – 2.1% STORES, GOLF, MOUNTAIN SPORT, ▪ SPORTS GROWING BUT ▪ RUGBY, ETC ARE VERY ▪ LATVIA – 1.9% POLISH SIZEER OPENED 2 GENERAL ISSUE OF KIDS SMALL STORES IN LIT, FURTHER NOT PHYSICALLY ACTIVE ▪ LITHUANIA – 2.3% EXPANSION UNKNOWN
SDI & SPORTLAND TOUCH YOUTH CULTURE SPORT
4. How we do it?
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 Ukraine Wholesale in Estonia business in Estonia 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of stores 6 10 12 19 29 32 64 90 101 120 152 148 106 97 84 88 76 66 66 First Introduction of Nike Introduction of SportsDirect mono-brand store Sportland brand & store Expansion in Latvia via concept Opening of O’NEILL SportsDirect concept Introduction of acquisition of 100% stores shareholder Franchise stores Sports Opening of Introduction of Timberland stores NetoSport concept Expansion in Estonia via acquisition of WestSport stores
SIG & GROWING THE MARKET Baltic’s market Sportland International Group (“SIG”) is the #1 & fastest growing Sports Retailer in the Baltics 6.28 Mpeople 29 Best locations in the 3 countries: 60 stores with total area ca 35 000 m2 (ca 379 000 sqft) Market size €180m Estonia (inlc. Web) Importance of local relevance : 3 languages, engaged with local teams & athletes Latvia 15 Exclusive distributor for numerous leading sporting goods brands Owners/co-CEOs founded the business in 1995, and have since obtained experience also from 16 Finnish, Russian and Ukrainian market Lithuania Number of stores per Largest number of Facebook fans among Estonian & Latvian companies: on path for future growth country as of September, 2015 through innovation, modern communication, emotional retail & with our two fascias (SPO & SDI) SIG: Increasing Market Share & growing the Market with our two fascias LATVIA LITHUANIA ESTONIA SIG 40% SIG 45% SIG 45% €87m €50m €43m Market size in each countryand SIG’s market share Source: SIG Others 60% Others 55% Others 55%
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