23 Nov

Annual General Meeting - Presentation

2021 AGM 23 NOVEMBER 2021 AGENDA 1. Chair’s address 2. CEO’s address 3. Trading update 4. Formal business 5. General Q&A 6. Close 2 3 CHAIR’S ADDRESS JASON MURRAY, NON - EXECUTIVE CHAIR 4 CEO’S ADDRESS RODNEY ORROCK, CHIEF EXECUTIVE OFFICER Strong FY21 performance driven by disciplined execution of growth strategy Exceeded FY21 Prospectus forecasts on all key metrics Performance of core non - discretionary categories reinforce defensive characteristics Key strategic initiatives progressed in difficult trading environment Listed on the ASX in July Strong balance sheet and net cash position, well positioned for the bounce back RECORD PROFIT IN A MILESTONE YEAR 5 FY21 OVERVIEW $663.2m 10.8% Revenue LFL revenue growth $71.6m 48.9% EBITDA Gross margin 10.8% EBITDA margin Up 6.1% (FY20: $625.0m) Up 165.2% ( 18.0% ahead of Prospectus forecast ) Up 650bps (FY20: 4.3%) $47.0m NPAT Up 191.9% (18.1% ahead of Prospectus forecast) Up 430bps (FY20: 44.6%) Pro forma financials for the 52 weeks ended 27 June 2021. All comparisons relate to the prior corresponding period ( pcp ) unless otherwise stated. 6 DELIVERY AGAINST OUR GROWTH STRATEGY Increase share in baby • Introduced online Baby Land hub for improved customer engagement • Introduced silicone feeding lines to extend category presence • Increased size range in reaction to customer research of core volume lines Increase share in kids • Introduced new sizes for girls and boys based on customer research • Increased availability of volume lines to lift service proposition • Conducted market research on wardrobe composition Increase share in womenswear • Increased sales due to improved denim offer • Increased size availability in underwear categories • Increased ASP through improved mix Above market online sales growth • Continued improvement to Click & Collect and store fulfilment • Improved conversion and transaction volumes • Delivered mobile platform Increasing gross margin % to sales • Implementing Product Lifecycle Management (PLM) system • Continued enhancement of mix and ASP growth • Ongoing management of current inventory ageing profile Targeted store network expansion • Optimisation of store network largely complete • 4 net new stores committed for FY22 to date • Continued focus on expansion in under serviced catchments CODB cost reduction initiatives • Implemented Tanda workforce management system • 60 lease renewals to be negotiated in FY22 • Everyday Low Cost ("EDLC") culture 7 • Online sales up 33.5% on FY20 and 109.2% on FY19 (pre - COVID) • Customer conversion now 3.26% (FY20: 2.33%) due to improved customer experience and fulfilment capability • ‘Click and collect’ and ‘ship from store’ driving increased transaction volume • Introduction of 'Baby Land' online hub has increased session duration by 162% and conversion by 80% • Best & Less mobile app launched in July – increased session duration by over 20% and mobile conversion by 17% • 'Click and collect' being trialed in NZ after successful Australian rollout ONLINE INVESTMENT DELIVERS RESULTS 8 0.4 m 0.6 m 0.8 m 1.1 m 1.3 m 1.7 m FY16 FY17 FY18 FY19 FY20 FY21 1 Active contactable members who have opted - in to receive regular Best & Less email offers. Historical active customer data assume s the current total member to active member ratio between Best and Less and Postie businesses is similar, given Postie active member data is not available. BLG loyalty members 1 CONNECTED TO MUM QUALITY AND SAFETY • 100 - day guarantee • Quality Assurance team • Reputable safety record COMMUNITY • Supported 173 different charities through Good360 • Partnered with Drought Angels ETHICAL SOURCING • Modern Slavery Statement • 217 supplier audits • Workers Grievance Hotline • PLM implementation • Sedex membership LIVING WAGES • Living Wage Statement • Gap analysis conducted • Next step open costings to identify labour component SUSTAINABILITY • All packaging re - usable, recyclable or compostable by 2025 • Integrating UN SDGs 1 • GOTS 2 certified organic cotton range • Carbon audit complete • Bronze membership to NSW Sustainability Advantage program ANIMAL WELFARE • No fur used in our garments 1 United Nations Sustainable Development Goals 2 Global Organic Textile Standard VALUES - LED APPROACH TO ESG 9 • Material COVID - 19 impact with 9,272 (27.5%) trading days lost due to government - mandated retail store closures • Customer shopping behaviour has remained cautious • All stores now reopened across Australia and New Zealand 1 • Bounce back in trading activity occurring ahead of Black Friday and Christmas • Positive like - for - like (LFL) trading performance from 23 August 2021 to 14 November 2021: ? LFL sales up +5.6% on FY21 and +23.8% on FY20 ? Online sales up +34.9% on FY21 and +147.2% on FY20 • Gross profit margin percentage remains ahead of Prospectus forecast • CY21 Prospectus pro forma profit forecasts affirmed • Healthy inventory and strong balance sheet FY22 TRADING UPDATE 10 1 Mt Druitt and Toormina stores remain closed due to storm damage • Deliver critical Black Friday and Christmas trading period • Committed to being an employer of choice – more than 450 new team members hired in last four weeks • Continue to increase attractiveness of our offer • Grow share of baby, kids and womenswear markets • Invest in developing outstanding people, process and capability • Enhance online offer and customer engagement through effective use of data • Grow store network • Keep the customer at the heart of everything we do LOOKING AHEAD 11 IMPORTANT NOTICE AND DISCLAIMER IMPORTANT NOTICE The material in this presentation has been prepared by Best & Less Group Holdings Limited (ASX:BST) ABN 76 642 843 221 ("BLG" or the Company") and is general background information about BLG's activities, current as at the date of this presentation. By reviewing/attending this presentation, yo u a gree to be bound by the following conditions. No representation or warranty, expressed or implied, is made as to the fairness, accuracy, completeness or correctness of the in formation, opinions and conclusions contained in this presentation. To the maximum extent permitted by law none of BLG, its subsidiaries, or their respective officers, employees, age nts or consultants nor any other person accepts any liability, including, without limitation, any liability arising out of the fault or negligence, for any loss or damage arisin g f rom the use of this presentation or information contained in it, including any error or omission in connection with it. The information in this presentation is given in summary form and does not purport to be complete in every aspect. In particu lar you are cautioned not to place undue reliance on any forward - looking statements regarding our belief, intent or expectations with respect to BLG's businesses, market conditions and/or results of operations, as although due care has been used in the preparation of such statements, actual results may vary in a material manner. Information in this presen tat ion or subsequently provided to a recipient of this presentation, whether orally or in writing, including forecast financial information, should not be considered advice or a re com mendation to investors or potential investors in relation to holding, purchasing or selling securities in the Company. This presentation is for information purposes only and is not a prospectus or product disclosure statement, financial product or investment advice or a recommendation to acquire BLG shares or other securities. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in par tic ular, you should seek independent financial advice. The financial information should be read in conjunction with the basis of preparation set out in Note 2 of the Company's fina nci al statements and BLG's other periodic and continuous disclosure announcements. Forward - looking statements This presentation may contain forward - looking statements which are statements that may be identified by words such as "may", "wi ll", "would", "could", "expects", "intends", "anticipates", and other similar words that involve risks and uncertainties. These statements are based on an assessment of p res ent economic and operating conditions and on a number of best estimate assumptions regarding future events and actions that, at the date of this document, are expected to t ake place. No person who has made any forward - looking statements in this document has any intention to update or revise forward - looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this document, other than to the extent required by law or any relevant stock exchange listing rules. Such forward - looking statements are not guarantees of future performance and involve known and unknown r isks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company. This presentation also contains references to certain intentions, expectations and plans of the Company. These intentions, ex pec tations and plans may or may not be achieved. They are based on certain assumptions which may not be met or on which views may differ. 12
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