FINAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016 26 April 2016
FY16 HIGHLIGHTS Sales up 40% year on year (42% CER) UK up 38%, rest of Europe 25% (35% CER), rest of world up 56% (63% CER) Adjusted EBITDA £18.7m Over 4 million active customers, up 34% Launch of app in UK, USA and Australia Warehouse extension completed and in operation Range extension driving growth and inclusivity of the boohoo brand 2
FINAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016 NEIL CATTO, CFO
FY16 FINANCIAL HIGHLIGHTS Revenues of £195.4m up 40% (42% CER) on 2014/15 (£139.9m) UK sales +38% year on year Rest of Europe +25% (+35% CER) Rest of world +56% (+63% CER) Gross margin 57.8% Retail gross margin 58.8% (FY15 – 60.8%) Adjusted EBITDA £18.7m (FY15 - £14.1m) Net cash £58.3m (FY15 - £54.1m) Earnings per share up 48% to 1.11p 4
SUMMARY INCOME STATEMENT (£m) FY16 FY15 Change Gross margin at 57.8% reflects Revenue 19 195.4 5.4 139.9 +40% investment in customer proposition Gross profit 112.9 112.9 85.0 +33% in UK and internationally along Gross margin 57.8% 8% 60.8% -300bps with growth in third party sales Distribution costs 45.5 45.5 30.7 +48% (-100bps impact) Administrative expenses 53.8 3.8 43.8 +23% Other income 1.4 1.4 - - Adjusted EBITDA margin 9.6% Operating profit 15.0 15. 10.6 +42% after adding back share based EBITDA (adjusted) 18.7 18. 7 14.1 +32% compensation (£0.6m), depreciation and amortisation (£3.1m) Profit before tax 15.7 15. 7 11.1 +42% 5
INTERNATIONAL Sales by geographic segment £m FY16 FY15 Change CER UK 130.1 94.3 +38% +38% Rest of Europe 22.6 18.1 +25% +35% Rest of world 42.7 27.4 +56% +63% Total revenue 195.4 139.9 +40% +42% 104.6 104.6 International UK Continued strong growth globally 90.8 90 .8 33.6 72.6 7 2.6 31.7 6 67.2 .2 Europe impacted by weak Euro 58.4 58.4 23.9 51.4 51.4 21.6 but now showing potential 18.3 20.5 71.0 59.1 48.7 45.6 Growth in rest of the world 40.1 30.9 driven by USA and Australia H1 FY14 H2FY14 H1FY15 H2FY15 H1FY16 H2FY16 6
OPERATING COSTS Year ended 29 53.6% 53.4% February £m FY16 FY15 Change 51.1% 48.6% 50.1% 47.7% Marketing 19.8 18.5 +7% 17.1% 17.3% Distribution 45.5 30.7 +48% 11.4% 16.9% 15.4% 16.8% Other admin 33.3 23.7 +40% TOTAL 98.6 72.9 +35% 23.1% 21.8% 23.7% 20.9% 22.1% 22.9% Year ended 29 February, % FY16 FY15 Change 14.5% 14.1% revenue 13.8% 12.6% 12.1% 8.0% Marketing 10.2% 13.2% -300bps H1 FY14 H2 FY14 H1 FY15 H2FY15 H1FY16 H2FY16 Distribution 23.3% 21.9% +140bps Other admin 17.0% 17.0% +0bps Other admin Distribution Marketing -160bps TOTAL 50.5% 52.1% 7
EBITDA MARGIN DEVELOPMENT 65. 65.0% 0% 18.0% 70.0% 62.2% 62.2% 61.5% 1.5% 60.5% 60 .5% 59.5% .5% Investing in the 56.8% 56.8% 16.0% 60.0% customer proposition 15.4% 14.0% 13.9% 50.0% 12.0% (price, product 40.0% 10.0% 10.6% promotion, delivery 10.1% 10.1% 8.0% 30.0% 8.4% offering) to improve 6.0% 20.0% lifetime value has aided 4.0% 10.0% 2.0% growth acceleration and 0.0% 0.0% H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 EBITDA margin development Adjusted EBITDA margin Gross profit margin 8
KPIs MONTHLY SESSIONS (MILLIONS) AND CONVERSION RATE 2 25.0 6.0% Indicator FY16 FY15 Change Sessions Conversion rate 5.0% 20.0 Active customers 1 4.0m 3.0m +34% 4.0% Number of orders 8.3m 5.8m +44% 15.0 3.0% Order frequency 4 2.08 1.93 +8% 10.0 2.0% Conversion rate 2 4.0% 3.6% +40bps 5.0 1.0% Average order value 3 £33.59 £35.28 -4.8% - 0.0% Number of items in a Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 2.62 2.56 +2.3% basket 1. Defined as having shopped in the last year 1. 2. Defined as the number of orders as a percentage of website sessions 3. Gross sales including VAT/sales tax divided by the number of orders 4. Number of orders on last 12 months divided by number of active customers 9
WORLD CLASS ECOMMERCE CAPABILITY Data science with a commercial edge Attribution modelling Improving customer lifetime value Personalisation Building order frequency Multi variant testing Marketing effectiveness/ Price elasticity analysis ROI analysis Demand forecasting Promotion analysis 10
OPERATING CASH FLOW Efficient conversion of EBITDA to cash with free Year ended 29 February, £m FY16 FY15 cash flow up 109% year on year. Profit f Pr ofit for the period or the period 12.4 12.4 8.4 8.4 Depreciation/amortisation 3.1 2.0 Working capital inflow of £7m or 3.6% of sales. Share-based payment charges 0.6 0.3 Tax expense 3.2 2.7 Operating cash flow increase of 85% year on year. Finance income (0.6) (0.5) Capital expenditure reflects investment in Increase in inventories (7.5) (1.4) warehouse extension and purchase of two Increase in receivables (2.5) (0.5) properties in Burnley and Manchester. Increase in payables 17.0 3.1 Oper Operating cash flo ting cash flow w 25. 25.7 7 13.9 13.9 Positive free cash flow with significant Capital expenditure (13.6) (8.2) infrastructure investment to underpin future growth. Fr Free cash flo ee cash flow w 12.1 12. 1 5.8 5.8 11
BALANCE SHEET At 29 February, £m FY16 FY15 Assets Continued investment in warehouse and IT Intangible assets 4.5 4.6 infrastructure. Property, plant and equipment 21.4 10.9 Deferred tax 0.2 - Negative net working Non-current assets 26.2 15.5 capital. Working capital (4.2) (2.9) Net financial assets (4.9) 0.8 Capital employed £15.1m, Cash and cash equivalents 58.3 54.1 excluding excess cash. Current tax liability (2.0) (1.2) Net as Net assets sets 73.4 3.4 66.4 66.4 12
CAPEX 16.0 Capital expenditure £M Capital expenditure of £13.6m for 2.0 13.6 13.0 FY16 included £3.4m expenditure 2.5 1.5 3.4 to purchase two properties: one in 2.5 0.6 Burnley to increase the ultimate 8.2 1.8 capacity of the distribution centre 3.1 4.5 11.5 (cost of £1.8m) and one in 9.0 7.8 Manchester to secure the future 3.3 4.7 of the head office functions in 0.9 Manchester (cost of £1.6m). FY 14 FY15 FY16 FY16 actual FY17 guidance guidance Property investments Other IT Warehouse 13
GUIDANCE Revenue growth c.25% EBITDA in line with current expectations Management will look at opportunities to further invest in customer lifetime value and market reach which may impact margins in the short term CAPEX £16.0m 14
FINAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016 CAROL KANE, JOINT CEO
BRAND UPDATE THE LEADING ONLINE FASHION BRAND FOR ALL 16-24 YEAR OLDS We are the young inclusive brand Think of us as your fashion best friend We Are Us, We Are You, We Are Boohoo QUALITY ¡ ¡ ¡ FASHION ¡ ¡ ¡ SERVICE ¡ ¡ ¡ REACH ¡ ¡ ¡ INTERNATIONAL ¡ PRICES ¡ ¡ ¡ CHOICE ¡ ¡ UNBEATABLE ¡ UP ¡TO ¡DATE ¡ INCREDIBLE ¡ FANTASTIC ¡ GREAT ¡ ¡ 16
UP TO DATE FASHION Trend led authoritative fashion Inclusive fashion for all Maximising the best Fast response supply chain, test and repeat model Plus, Petite, Tall, Main Range 17
INCREDIBLE PRICES Best price in the market for fashion Clear price architecture and stretch with entry and exit prices Promotional strategy to attract and convert visits to site 18
UNBEATABLE CHOICE 30,000 styles delivered to site in the last twelve months Best choice with nearly 20,000 styles available to shop Investment: 9,000 new styles in petite, plus and footwear New: 1,000 new styles in tall, lingerie and soft tailoring Continued introduction of new collections and Boohoo brands: e.g. wedding guest and prom 19
FANTASTIC SERVICE Free UK delivery after 9pm and international markets with thresholds £1.99 next day delivery promotion throughout the day for next day service available until 9pm Order up to midnight for next evening delivery (6pm-10pm) available seven days a week Free returns in UK, Ireland and France Collect returns service in the UK, Ireland and France. Introduction of web chat service, looking to start a trial at the beginning of May 20
GREAT QUALITY Expanded QA team focused on UK supply chain, and all off-shore supply Supplier education with training & development program for key supply base Building block library to standardize fits 21
UK Continued focus on our Marketing Strategy, a combination of content created for above the line, and all Digital Channels Retention Marketing, to increase lifetime value of our Customer Utilise our Social Activity, so Customers become our Brand Ambassadors 22
USA 23
FRANCE 24
MENSWEAR BOOHOO MAN - Website now Launched Looking to market directly to a Male Consumer To do this we have unified a Menswear Focussed Team Faced the brand with Celeb – Scotty T Working with Male Influencers, across, TV, Gaming, Football, etc… MTV Male dedicated Idents 25
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