Small & MidCap seminar. Thursday, October 7 th 2010

Transcription

1 BoConcept Holding A/S Small & MidCap seminar Thursday, October 7 th

2 Agenda BoConcept in short Strategic focus back on profitable growth Financial developments in Q1 2010/11 Long-term targets short-term guidance Forward-looking statement This presentation includes forward-looking statements, including forecasts for revenue, earnings cash flow. BoConcept Holding stresses that forecasts are subject to considerable uncertainty with respect to the level of activity we will see in the future due to high global macro-economic volatility subsequently reduced revenue visibility. The revenue generated by the franchise chain BoConcept will thus be sensitive to fluctuations in macro-economic factors such as GNP growth, number of home sales, consumer confidence, disposable income trends in the group's markets. Should these variables deteriorate, the franchise chain will have even tougher sales conditions to contend with, thus management's expectations with respect to future financial trends may not be realised. Hans Barslund, EVP & CFO 2

3 3 BoConcept in Short

4 BoConcept a global br business International retail-oriented concept holder within furniture lifestyle products for private homes Affordable luxury products primarily sold via 239 franchise-based BoConcept Br Stores in app. 50 countries Strong br highly coordinated commercial collection with attractive market positioning 4

5 Ambitious vision dedicated mission Vision To make BoConcept no. 1 br within urban interiors Mission Through passionate persistent performance we make customized coordinated design furniture accessories affordable to the urban-minded customer 5

6 6 Collections positioned to reduce exposure to price competition

7 The world is our marketplace Americas EMEA Asia Pacific 15% of revenue 66% of revenue 19% of revenue 40 Br Stores 154 Br Stores 46 Br Stores = Distribution centres 7

8 Creating a unique customer experience at the centre of our focus Our br stores must be inspiring exiting to visit Our staff must offer an exceptional competent service We will constantly proactively explore new ways of addressing shopping trends behavior 8

9 Business model based on refined core skills award winning franchisee model Customers Sales, delivery after-sales services Franchisees General support Franchise masters Br, concept products BoConcept A/S Sourcing ownprod. Supply chain mgt. Design product dev. Marketing comm. IT, training specialist support Business dev. admin. 9

10 BoConcept A/S provides a full business concept platform for br stores Customers Sales, delivery after-sales services Franchisees General support Franchise masters Br, concept products BoConcept A/S Concept business strategy Bring, design, Sourcing ownprod. Supply chain mgt. Design product dev. Marketing comm. IT, training specialist support Business dev. admin. Specialist support training Supply chain warehouses IT systems 10

11 De-central retail organisation provides strong customised support to franchisees Customers Br, concept products Sales, delivery after-sales services Franchisees General support Franchise masters BoConcept A/S BoConcept A/S + 8 external BoConcept A/S plus 7 external partners Retail Account Managers Marketing guidelines support Pricelevels Axapta support Sourcing ownprod. Supply chain mgt. Design product dev. Marketing comm. IT, training specialist support Business dev. admin. 11

12 Br stores focus on providing customers with a unique experience increasing same-store-sales Br, concept products Customers Sales, delivery after-sales services Franchisees General support Franchise masters BoConcept A/S Approx. 150 across the world Rent agreement Local marketing Sales Deliveries & assemply BoConcept A/S + 8 external After sales service Sourcing ownprod. Supply chain mgt. Design product dev. Marketing comm. IT, training specialist support Business dev. admin. 12

13 Strategy Focus back on profitable growth 13

14 Strategy focused at utilising strong business model market uptake to increase growth STRATEGY FOR PROFITABLE GROWTH TRACK l TRACK ll TRACK lll Growth though increased same-store-sales Growth though more br stores Cost reduction though increased productivity 14

15 Track l: Growth through increased same-store-sales 2011 collection focused on functionality, flexibility customisation Highly commercial 2011 collection - >25% of collection has been renewed - Most introductions in lower end of price range to accommodate customer dem - Upholds market position as 'affordable luxury' BoConcept inspiration Camp (BiC) format changed to focus on execution - Products store lay-out in centre of attention - Moved to May to align with collection roll-out 15

16 Track l: Growth through increased same-store-sales Introducing e-learning to accelerate growth in same-store-sales New e-learning platform will become central in BoConcept University's training activities INTRO E-LEARNING SALES E-LEARNING PRODUCTS E-LEARNING PRACTI- CAL SALES FACE-TO-FACE INTERIOR DECO. FACE-TO-FACE Increase knowledge service levels to boost hit rate basket size, while - Reducing training cost for both BoConcept franchisees - Reducing time-to-market Roll-out out commences in summer 2010 through

17 Track l: Growth through increased same-store-sales Multi Channel Retail meet the customers where they want to meet us! Multi Channel Retail strategy will become a cornerstone in increasing traffic to both website br stores going forward Initial platform which integrates with Axapta consist of - Newly designed website - Home Creator a new online 3D configuration program - MyBoConcept a personal end-user universe Later introductions include CRM e- commerce (2011) 17

18 Track ll: Growth through more br stores Renewed br stores To stimulate pipeline build-up accelerate opening of new stores, BoConcept will - Exp store concept to include smaller stores - Allocate DKK 10m in FY 2010/2011 to facilitate financing for suitable potential franchisees Expansion of franchise chain in both A- markets new markets - ADC important part in penetration of Asian market - Regional director based in Hong Kong 18

19 Track ll: Growth through more br stores New Inspiration Store Concept to complement existing br stores To increase br awareness traffic, BoConcept launches Inspiration Stores BoConcept Inspiration Stores are small units - Central stores on high traffic locations - Concession stores in department stores as Harrods, Selfridges ECI September 30 th BoConcept opened the first Inspiration Store in Denmark Will be a satellite for close-by br stores - Owned by existing franchisees - Generate marketing, administration logistic synergies 19

20 Track lll: Cost reductions through increased productivity Focus on strengthening profitability maintaining cash flow Focus on strengthening profitability cash flow by reducing cost optimising capital structure will be maintained To utilise BoConcept's business model's potential for high marginal profits, future initiatives will be focused on - Continue to secure attractive contracts with strategic sourcing partners - Optimise supply chain to enable faster delivery times at lower cost - Maintain an asset light model low overheads 20

21 Track lll: Cost reductions through increased productivity ADC - an important part in expansion strategy optimising supply chain New Asian Distribution Centre (ADC) in Shanghai up running in April Tokyo facility has been phased-out during Summer 2010 Considerably more efficient competitive location in terms of sales, delivery time costs A central location for providing support to general build-up br store penetration ti of new Asian markets 21

22 Financials Developments in Q1 2010/11 22

23 Positive same-store-sales in Q1 2010/2011 Strong same-store-sales (SSS) recovery, primarily driven by increased hit rate basket size - SSS (invoiced) up 8,2% in Q1 (11% in Q4). SSS(Order intake) up 1% 5.3% in Q1 10% (19% in Q4) 0% 30% 20% Quartely development in same store sales Invoicing Order intake 10% SSS target for 2010/11 remains at 5%- 10% 20% Managed to strengthen sales at the franchisee as an example the introduction of Interior Decoration 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007/ / / /11

24 New br stores in new markets Open year to date Closed year to date Status as of 31/ Own stores Stores Studios BoConcept introduced br France 30 stores in new markets Germany 14 7 USA Spain Japan 19 5 Denmark 10 8 UK Most closings in Spain as a consequence of pending turnaround Norway Sweden The number of qualified franchise applications are growing which China 1 14 will secure a stable pipeline in the years to come A markets total B&C markets Total Target for openings has been raised by five the expected openings is now in the range of 30-35

25 Expected EBIT improvement 40,00 EBIT in mill. DKK 30,0 20,0 10,0 - (10,0) (20,0) (30,0) / / / /11 Q1 EBIT at DKK 4.0m vs. a loss of DKK 1.7m last year - Q1 EBIT-margin improvement from -0,8 % to 1.7% (Q4 EBIT-margin at -0.9% vs %) - Strong focus on savings in all parts of value chain Q1 has generated a net financial cost of DKK 1.2m vs. DKK 2.0m last year. The reduction is mainly due to decreasing interest cost on net liabilities Target for EBIT 2010/11 remains at 3-4% after Q1

26 Positive cash flows continue in Q1 2010/11 80,00 60,0 40,0 20,0 0,0 20,0 40,0 60,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2006/ / / / /11 Q1 CFFO of DKK 12.1m 1m - Positive cash flow as a result of stronger operational performance intense focus on reducing capital tied up in NWC Net investments at DKK 10.2m Cash flow before instalments on non-current debt at DKK 1.9m corresponding to 0.8% of revenue Target for cash flow before instalments remains at 3% of revenue after Q1

27 Outlook Long term targets short-term guidance 27

28 Sales store expansion strategy to take advantage of market uptake Reinforced focus on utilising improved marked conditions optimised asset light business model to increase earnings cash flow By FY 2014/2015 BoConcept is expected to - Grow revenue by 10-15% 15% p.a. by increasing same-store-sales store sales br store portfolio to units (incl. inspiration stores) - Maintain the gross margin level - Generate high marginal earnings (>25% on EBIT-level) to realise an overall EBIT-margin of 12% - Generate cash flows of 6% of revenue RoA of 30% - Maintain asset light setup equity ratio of 30-40% Long-term targets based on a continued improvement in market conditions.

29 Focus on increasing revenues in FY2010/2011 New collection with attractive price points, focus on Interior Decoration roll-out of Multi Channel Retail platform combined with moderately improved underlying markets expected to grow order intake same-store-sales Continued focus on efficiency, optimisation of supply chain profitability throughout the value chain improve earnings CAPEX NWC/revenues expected to be maintained at current levels Guidance FY2010/2011E FY2009/2010R Revenue Same-store-sales (invoiced) Losses on bad debt EBIT-margin Cash flow in % of rev. Investments Net chg. # br stores DKK 950-1,000m (5-10%) 5-10% DKK 12m 3-4% 3% DKK 30m Net addition of 5-10 DKK 910m (-9%) -7% DKK 18m 14% 1.4% 8.5% DKK 29m Net reduction of openings 21 openings 29

30 Attractive long-term investment case with upside potential as market gradually improves Global br with strong market position in high end of global middle market Business model core competencies cover entire value chain from design, bring, marketing, production, supply chain management sales training BoConcept's franchise model concept competencies remain attractive to both customers franchisees - Highly attractive collection focus on flexibility customisation - Rewarded franchise model even stronger after having been optimised After considerable restructuring initiatives during global recession, focus is back on profitable growth - BoConcept will take advantage of favorable position to grow same-store-sales increase the number of stores considerably - BoConcept will generate substantial marginal earnings high cash flows as growth increases by leveraging on its optimised business model with high cost efficiency an asset light structure 30

31 Thank you for your attention For further information visit our website 31