GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf ·...

17
2015 Interim Results Announcement Analyst Meeting August 11, 2015

Transcript of GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf ·...

Page 1: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

2015Interim ResultsAnnouncement

Analyst MeetingAugust 11, 2015

Page 2: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

(1) EBITDA is defined as net profit before net interest expenses, tax, depreciation and amortization. This also excludes share of results of joint ventures, material gains or losses which are of capital nature or non-operational related, acquisition related costs and non-cash gain on remeasurement of contingent consideration payable

(2) Adjusted Net Profit / (Loss): Excluding merger & acquisition costs, non-cash items and non-operational expenses, such as gain on remeasurement of contingent consideration payable, amortization of other intangible assets, non-cash interest expenses and non-operational expenses

• Turnover impacted by the tail end of exiting underperforming brands and weakness in the European markets which was largely driven by FX. Excluding these factors, turnover grew by approximately 6%

• Total margin percentage increased by 200 basis points

• Operating costs reduced due to continuous integration of our businesses and operations

• All profit lines recorded significant improvement

(US$m) 1H 2014 1H 2015 Change

Turnover 1,349 1,282 -5.0%

Total Margin 400 406 1.4%% of Turnover 29.7% 31.7%

Operating Costs 463 449 -3.2%

Core Operating Profit / (Loss) (63) (43) 32.5%% of Turnover -4.7% -3.3%

EBITDA (1) 34 47 39.6%

Net Profit / (Loss) Attributable to Shareholders (98) (35) 64.5%% of Turnover -7.3% -2.7%

Adjusted Net Profit / (Loss) (2) Attributable to Shareholders

(53) (40) 24.3%

2

Key Financial Highlights

Page 3: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

(1) Adjusted Net Profit / (Loss): Excluding merger & acquisition costs, non-cash items and non-operational expenses, such as gain on remeasurement of contingent consideration payable, amortization of other intangible assets, non-cash interest expenses and non-operational expenses

3

Net Profit Analysis

(US$m) 1H 2014 1H 2015 Change

Core Operating Profit / (Loss) (63) (43) 32.5%

Gain on Remeasurement of Contingent Consideration Payable 20 44

Amortization of Other Intangible Assets (25) (29)

One-off Reorganization and Listing Costs related to Spin-off (29) —

Other Non-core Operating Expenses (2) (3)

Non-cash Interest Expenses (9) (7)

Cash Interest Expenses (7) (21)

Share of Profits of Joint Ventures — 2

Tax 17 24

Non-controlling Interest – (2)

Net Profit / (Loss) Attributable to Shareholders (98) (35) 64.5%

Adjusted Net Profit / (Loss) (1) Attributable to Shareholders (53) (40) 24.3%

Page 4: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

• Operating cash flow remained positive despite a loss in the period

• Net debt increased for payment of prior acquisitions and investment in new licenses

- These investment will generate

positive operating cash flow in the second half of the year

(1) Total debt includes bank loan

(2) Sum of net debt and total equity

(3) Net debt divided by total capital

(US$m) Dec 2014 Jun 2015

Bank Loan 667 837

Total Debt (1) 667 837

Cash 126 102

Net Debt 541 735

Total Equity 2,475 2,443

Total Capital (2) 3,016 3,178

Gearing Ratio (3) 17.9% 23.1%

4

Balance Sheet Highlight

Page 5: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

Skewing Effect

5

0

1,000

2,000

(US$m)

39%61%1,349m

2,105m

1H 2014 2H 2014

0

1,000

2,000

(US$m)

40%60%1,330m

1,958m

1H 2013 2H 2013

Turnover 1H vs 2H in 2013

Turnover 1H vs 2H in 2014

Page 6: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

Licensed Brands

Fashion

EntertainmentCharacters

Accessories & Home

Footwear

Page 7: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

* Partial List7

A Portfolio of Power Brands*

Page 8: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

8

• Turnover affected by discontinuation of underperforming brands and weakness in the European markets which was largely driven by FX.

• Total margin percentage improved resulting from better mix of businesses, in addition to the impact of exiting underperforming brands

• Operating costs decreased as a result of rationalizing our businesses

(US$m) 1H 2014 1H 2015 Change

Turnover 1,152 1,062 -7.9%

Total Margin 347 329 -5.1%% of Turnover 30.1% 31.0%

Operating Costs 379 358 -5.6%

Core OperatingProfit /(Loss)

(32) (29) 11.0%

% of Turnover -2.8% -2.7%

Segment Highlights - Licensed Brands

Page 9: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

Controlled Brands

Fashion

Accessories

Footwear

Page 10: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

10

Seven GlobalA Portfolio ofControlled Brands*

* Partial List

Page 11: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

11

• Key Controlled Brands continued to perform well, including contribution from Juicy Couture for the full period

• Total margin percentage increased by 800 basis points due to improvement on existing margins and larger contribution from better brands

• Operating costs increased due to investment in Frye, Juicy Couture and Spyder

(US$m) 1H 2014 1H 2015 Change

Turnover 196 220 12.0%

Total Margin 53 77 44.0%% of Turnover 27.3% 35.1%

Operating Costs 84 91 7.8%

Core OperatingProfit /(Loss)

(31) (14) 55.2%

% of Turnover -15.7% -6.3%

Segment Highlights - Controlled Brands

Page 12: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

- Focus on not only skiwear but also off mountain sportswear

• Appointed a new president

• Strong online sales momentum continued

• Re-launched e-commerce site to further strengthen brand storytelling and customer engagement

• Appointed a new CEO

12

Continuous Development of Key Controlled Brands• New stores opening – an additional store just opened in

August in Atlanta. Another 3 new stores are set to open this year in Dallas, New York and Washington DC

• Expanding presence to South Korea in the run up to the 2018 Winter Olympics and gearing up for China, the host country of the 2022 Winter Olympics

- Shop-in-shops and stand-alone stores opening in South Korea beginning in August

Page 13: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

13

Strengthening Women’s Fashion/Apparel Platform• An iconic American brand covering multiple categories

including womenswear, menswear, kidswear, accessories, and footwear.

• Leveraging our expertise in apparel and accessories as well as global relationships with retailers

• The brand drives close to US$1 billion in retail sales across department stores in the US as well as key international markets

• Strong sales momentum continued since launching in the first half of 2014.

• Expanding girls category with shop-in-shop opening at Harrods in the Fall, plus others scheduled to open in Asia and Middle East by the end of 2015

Page 14: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

14

• Strong focus on iconic American brands in the affordable luxury space;we are unique - we grow and globalize brands through licensing, ownership, and brand management

• We have a strong brand portfolio, leveraging our core competencies in key product categories

• Capturing new business opportunities in an evolving industry landscape (e.g. expanding portfolio of long-term licensing partnership with various brand groups)

• Capitalizing on the digital opportunities with omni-channel initiatives around the world, e.g. strategic partnership in China

• Strengthening the organization with investment in our global talent

• Improved cost efficiency across our global platform

One Year after Listing

Page 15: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

15

The Outlook

• US economy is relatively stable; Europe continues to be under pressure. Despite China growing at a slower rate than previous years, Asia continues to be relatively stronger than the rest of the world

• Margins continue to trend up

• Continue to drive operational synergies to maximize cost efficiency

• Pipeline full of exciting licensing deals

• We are focusing on a few strategic acquisition opportunities

• In line with previous years, both turnover and profits will accelerate significantly in the second half due to impact of skewing effect

Page 16: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

16

Disclaimer

This document has been prepared by Global Brands Group Holding Limited (the “Company”) solely for selected recipients for information purposes only. These materials are given to you solely for your own use and information and no part of this document may be copied, reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organization/firm) or published, or otherwise disclosed, in whole or in part, in any manner and for any purpose without the prior consent of the Company. Any forwarding, distribution or reproduction of this document in whole or in part is unauthorized.

The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions presented or contained herein. The information contained in this document should be considered in the context of the circumstances prevailing at the time, is subject to change without notice and the Company makes no undertaking to update the information in this document to reflect any developments that occur after the date of the presentation. It is not the Company’s intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company, or its financial or trading position or prospects. Neither the Company nor any of its affiliates, advisers or representatives accept any responsibility or have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.

This document may contain statements that reflect the Company’s current intent, beliefs and expectations about the future as of the respective dates indicated herein. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company’s operations and factors beyond the Company’s control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from those described in these forward-looking statements. Neither the Company nor any of its affiliates, advisers or representatives has any obligation, nor do they undertake, to update these forward-looking statements for any events or developments including the occurrence of unanticipated events that occur subsequent to such dates.

This document does not constitute, in whole or in part, an offer for subscription or for sale or invitation to purchase or subscribe for any securities for sale in the United States, Hong Kong or anywhere else. No part of this document shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Specifically, and without limiting the foregoing, these materials do not constitute, nor are they intended to constitute (i) a “prospectus’ within the meaning of the U.S. Securities Act of 1933, as amended, and the regulations enacted thereunder, or (ii) a prospectus in connection with the offering for sale or subscription of shares pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong) or the Companies Ordinance (Chapter 622 of the Laws of Hong Kong). No securities may be sold in the United States without registration with the United States Securities and Exchange Commission except pursuant to an exemption from, or in a transaction not subject to, such registration. The Company has not registered and does not intend to register any shares or conduct a public offering of securities in the United States, Hong Kong or anywhere else. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves of, and observe, any such restrictions.

Page 17: GBG 2015 Interim Analyst Meeting - 20150811file.irasia.com/listco/hk/gbg/cpresent/pre150811.pdf · (1) EBITDA is defined as net profit before net interest expenses, tax, depreciation

2015Interim ResultsAnnouncement

Analyst MeetingAugust 11, 2015