PRELIMINARY RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2014 AND Q1 FY2015 REVIEW
TODAY’S AGENDA 1. Highlights Carol Kane 2. Financial review Neil Catto 3. Business review Carol Kane 4. Q&A 1
HIGHLIGHTS For the year to 28 February 2014 For the year to 28 February 2014 For Q1 FY15 to 31 May 2014 For Q1 FY15 to 31 May 2014 q Pro forma EBITDA £16.0m Trading in line with q expectations for the full year Revenue up 63% to £109.8m q (2013 £67.3m) Acceleration in marketing q spend and growth through 2.3 million active customers q the quarter up 54% Global advertising campaign q Significant infrastructure q building momentum investment in warehouse and IT #experienceeverything First foreign language website q launched in France Range extension and the q launch of boohooMan 2
NEIL CATTO, CFO NEIL CATTO, CFO
FINANCIAL HIGHLIGHTS For the year to 28 February 2014 For the year to 28 February 2014 For Q1 FY15 to 31 May 2014 For Q1 FY15 to 31 May 2014 Revenue up 63% to £109.8m q Acceleration in growth q (2013 £67.3m) through the quarter driven by increased marketing spend Pro forma EBITDA £16.0m q q Revenue growth 24% (28% (2013 £8.6m) CER) on top of 128% growth Pro forma gross margin at 63% q in Q1 FY2014 Increase in capex focussed on q q Gross margin stable at 63% warehouse and IT 3
SUMMARY INCOME STATEMENT Ye Year ended 28 February 2014 2014 2013 2013 Ch Change (£m) m) q Strong revenue Revenue Revenue 109.8 109.8 67.3 67.3 +6 +63% growth in all markets Gross profi fit 64.9 64.9 36.7 36.7 +7 +77% q Gross margin Gross margin 59.1% 54.5% +460bps increase due to change in sourcing Operating profi fit 10.8 10.8 3.3 3.3 +229% +2 model Profi fit befo fore tax x 10.7 10.7 3.2 3.2 +237% +2 q Operating margin 9.9% Pro forma gross profit 1 68.9 43.3 +59% +5 q Pro forma EBITDA Pro forma gross margin 62.8% 64.3% -150bps margin 14.6% Pro fo forma ma EBITDA 16.0 16.0 8.6 8.6 +8 +86% Pro fo forma ma EBITDA ma margin 14.6% 14.6% 12.8% 12.8% +180bps +1 1 Unaudited pro forma gross profit is adjusted to reflect direct sourcing by 4 boohoo.com plc, not via (now discontinued) related party companies
INTERNATIONAL Sales by geographic segment £m 2014 2014 2013 2013 Ch Change CER CE UK 71.0 44.3 +6 +60% +6 +60% Rest of Europe 13.1 7.4 +7 +78% +7 +71% Rest of world 25.7 15.6 +6 +65% +8 +80% +6 +63% +6 +66% To Total revenue 109.8 109.8 67.3 67.3 109.8 109.8 International q Strong growth globally 38.8 UK 67.3 67.3 q Rest of world growth driven by English 23.0 speaking markets in the 29.0 29.0 24.5 24.5 71.0 Southern Hemisphere 2.9 2.5 44.3 and North America 26.1 22.0 FY11 FY12 FY13 FY14 5
OPERATING COSTS £m m 2014 2014 2013 2013 Ch Change 52.1% 52.1% 50.7% 50.7% 49.7% 49.7% 49.6% 49.6% Marketing 15.3 10.5 +47% 14.6% 12.9% Distribution 24.3 13.6 +78% 14.0% 15.5% Other admin 15.0 9.3 +61% +64% TOT TOTAL AL 54.6 54.6 33.4 33.4 24.0% 23.1% 22.1% 20.2% % r % revenue evenue 2014 2014 2013 2013 Ch Change 14.4% 13.8% 13.8% 13.6% Marketing 14.0% 15.5% -150bps Distribution 22.1% 20.2% +190bps FY11 FY12 FY13 FY14 Other admin 13.6% 13.8% -20bps Marketing Distribution Other admin +10bps TOT TOTAL AL 49.7% 49.7% 49.6% 49.6% 6
OPERATING CASH FLOW £m £m 2014 2014 2013 2013 q Efficient conversion of EBITDA to cash Profi fit fo for the year 8.4 8.4 2.6 2.6 Depreciation/amortisation 1.0 0.5 q Inventory tightly controlled on 8 weeks historical cover Tax expense 2.3 0.6 Finance expenses 0.1 0.1 q Increase in trade Increase in inventories (2.9) (3.4) receivable due to loans to related parties as a result of Increase in receivables (3.2) - transition to buying direct Increase in payables 2.1 5.3 Operating ca cash fl flow 7.8 7.8 5.7 5.7 q Capital expenditure Capital expenditure (4.6) (4.6) accelerated to increase operating capacity Free ca cash fl flow 3.2 3.2 1.1 1.1 Cash generated by related parties 3.8 3.8 Profo forma ma fr free ca cash fl flow 1 7.0 7.0 1 Unaudited pro forma free cash flow is adjusted to reflect direct sourcing by 7 boohoo.com plc, not via (now discontinued) related party companies
BALANCE SHEET £m £m 2014 2014 2013 2013 As Assets ets q Accelerated investment Intangible assets 3.1 0.6 programme funded from Property, plant and equipment 6.2 5.0 operating cash flow Non-cu -current assets 9.3 9.3 5.6 5.6 q IPO proceeds of £46m (net of transaction related Working capital (1.1) (5.0) costs) received after the Cash and cash equivalents 5.4 4.6 balance sheet date Debt (2.7) (2.8) q £2.7m warehouse loan repaid in April 2014 Current tax liability (1.1) (0.6) Net assets Net as ets 9.8 9.8 1.8 1.8 8
KPI S Monthly sessions (mi millions) and co conversion rate 2 14 9% Indica cator 2014 2014 2013 2013 Ch Change 8% 13 7% 12 Active customers 1 2.3m 1.5m +54% +5 6% 11 Number of orders 4.2m 2.5m +7 +71% 5% 10 4% Conversion rate 2 6.9% 6.0% +15% +1 9 3% Average order value 3 £37.48 £39.02 -4% -4 8 2% 7 1% Number of items in a 2.38 2.18 +9% +9 basket 6 0% 1 Defined as having shopped in the last year 2 Defined as the percentage of monthly unique visitors to site making a purchase 3 Gross sales including VAT/sales tax divided by the number of orders 9
INVESTING IN OUR WAREHOUSE INFRASTRUCTURE Investing ahead of f the cu curve fo for £1bn annual gr annual gross sales oss sales q Current phase of mezzanine construction nearly complete q Planning approval for 110,000 sq. ft warehouse extension q 670,000 sq. ft additional storage space q Enough for 8m additional units/4x current capacity q £15m in capex planned over next two years q Warehouse management team strengthened 10
INVESTING IN OUR IT SYSTEMS Flexi xible, open arch chitect cture Current Initiatives Cu q Flexible and agile systems q Optimisation of foreign architecture with Enterprise language websites front end Service Bus at the centre q Further foreign language sites q Enables fast integration of many q Further currency options on different projects – joining our English speaking site systems together q Reduces impact of inter-project q Payment gateway dependencies q Warehouse Management q Gives us the ability to have System (JDA ) multiple front ends (or q Personalisation “channels”) q Enhancement of mobile site q Web vs mobile q Device responsive mobile sites q Foreign languages q Multiple currencies q Data warehouse improvements q Pricing by region q Network infrastructure upgrades 11
Q1 UPDATE Highlights Highlights Gross margins maintained at 63% q Record quarter with sales up 24% (28% CER) q UK growth +44% − Rest of Europe +36% (41% CER) − Rest of the world down 20% (-7% CER) − Versus comparative quarter growth of 128% in Q1 FY2014 q Comps on top of last year ease through the year with H1 FY2014, q growth 100% and H2 FY2014, growth 41% Strong balance sheet £53m net cash post IPO proceeds q 12
Q1 UPDATE Q1 acce cceleration in ma marke keting spend ¡80 ¡ ¡ ¡12 ¡ ¡ Revenue trends closely linked q ¡70 ¡ ¡ ¡10 ¡ ¡ to marketing spend ¡60 ¡ ¡ Marketing expenditure was q ¡8 ¡ ¡ ¡50 ¡ ¡ 14.0% of revenue for the year to ¡40 ¡ ¡ ¡6 ¡ ¡ 28 February 2014 Q4 FY2014 marketing reduced ¡30 ¡ ¡ q ¡4 ¡ ¡ to 12.4% of revenue to allow for ¡20 ¡ ¡ investment in the warehouse ¡2 ¡ ¡ ¡10 ¡ ¡ and IT ¡-‑ ¡ ¡ ¡ ¡ ¡-‑ ¡ ¡ ¡ ¡ Q1 FY2015 marketing increased q to 17.7% leading to May revenue growth twice that Revenue ¡ Marke5ng ¡ seen in March 13
CAROL KANE, JOINT CEO
THE GLOBAL FASHION LEADER FOR A SOCIAL GENERATION Our fa fashion q Our focus remains on 16-24 year olds q Dresses represent over 30% of sales mix q Boutique grew by 170% during the year q Swimwear, knitwear and playsuits more than doubled q boohooMan building momentum (+175% for the year) q boohooPlus launched q Plans for a petite range 14
MARKETING Biggest ever TV ca camp mpaign rolled out this summe mmer #exp xperience ceeverything Global campaign q Translated into some European q languages Highly soci cially engaged TOP UK CL CLOTHING AND APPAREL SI SITES Website We Rank k custome cu mer base Next 1 2.1 million facebook likes q ASOS 2 385k+ Twitter followers q New Look 3 River Island 4 294k Instagram followers q Boohoo.co com 5 Blogger activity/music partners q Top Shop 6 Source: Hitwise 15
STYLE FOR STROKE Coverage ¡so ¡far… ¡ ¡ ¡ ¡OK, ¡Hello!, ¡Reveal, ¡Closer, ¡Now, ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡The ¡Express, ¡The ¡Sun, ¡Look ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡Cosmopolitan, ¡The ¡Daily ¡Mail Mel ¡B ¡ Binky ¡Felstead ¡ Lucy ¡Watson Barry ¡Sloane 16 Nick ¡Ede Kelly ¡Osbourne Sarah-‑Jayne ¡Crawford Lilah ¡Parsons
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