SuperGroup Plc ("SuperGroup" or the "Group")
Capital Markets Update
Superdry - a global digital brand
25 September 2017
SuperGroup is hosting a two day Capital Markets Update at its Cheltenham headquarters entitled Superdry - a global digital brand. The presentations1 being given and a video of the event will be made available on the Group's website.
The event will outline the transformation of the business since March 2015, when the Group last presented its strategy update, demonstrate established global leadership based on Superdry's unique product DNA, a clear brand positioning, consistent delivery and describe how the business is leveraging its position as a global digital brand, with a compelling vision for further growth through eight different channels to market.
The Capital Markets Update will describe the Group's plans to continue to deliver long-term sustainable profit growth and returns to shareholders, as follows:
· The transformation of the business since March 2015:
o Development of a global digital brand with brand revenue2 of £1.2bn
o Strong and consistent delivery of financial and strategic commitments:
- 25% CAGR revenue growth over a three and five year horizon
- 25% Return on Capital Employed3 sustained over a three and five year horizon
- 10 consecutive quarters of Retail Like-for-Like4 sales growth, averaging 12%
- Strongly cash generative with low lease adjusted gearing
- Significant infrastructure change delivered
o Market leading Wholesale and Ecommerce growth:
- Wholesale growth accelerated to average 30% p.a. since 2015 re-set
- Ecommerce growth in line with pure-plays
o Diversified geographic revenues led by global Ecommerce capability:
- Mainland Europe established as largest Superdry market, representing 49% of brand revenue
o Payment of Ordinary and Special Dividends totalling £58m
· The introduction of a refined Strategic Framework to deliver high returns from maximum focus on:
o Global Digital Brand
o Relentless Innovation
o World Market Opportunity
o Operational Excellence
· The name of the Group will change to Superdry Plc reflecting our focus on developing the brand globally and digitally.
· The announcement of three stretching corporate responsibility goals to underpin Superdry's continued global development.
Global Digital Brand: Superdry is a globally recognised brand with consistent consumer perceptions and a clear brand purpose and essence. Our digital marketing approach developed through innovative partnerships with digital leaders, is introducing new consumers to Superdry and deepening our engagement with existing consumers.
With a strong Ecommerce business, Superdry already serves consumers digitally in 148 countries through 20 websites, which generate over 25% of Retail revenues having grown by an average of 50% each year since 2015.
Relentless Innovation: Innovation is at the heart of the business, from our product designs, to our tailored approach to each new market, to constantly striving to find the fastest and most efficient ways to serve our global consumers. The Superdry product range is constantly innovated with over 5,000 new styles introduced every year, contributing to our established category leadership position in jackets, hoods, sweats and graphics.
World Market Opportunity: Whilst Superdry is present in 148 countries, many of the world's largest markets are still untapped opportunities. The Group has established capabilities in eight different channels through which we optimise our presence in each country. Our future growth will have a greater bias towards Ecommerce and Wholesale which provide flexible, low capital routes to market.
These channels complement an owned store network that delivers attractive returns on capital while providing a complete brand experience. Furthermore, the improvements and efficiencies identified from our Next Generation store re-fit programme is allowing us to improve the payback on future owned stores to 20 to 24 months.
Operational Excellence: The Group is on track with its five year programme to build our capability to support future growth and improve operational and working capital efficiency. Investments in best of breed systems, in global colleague learning and development, distribution infrastructure and local sourcing offices provide the foundation from which significant improvements in unit cost efficiency and revenue growth are anticipated from the current financial year.
Sustainability lies at the heart of the Superdry brand values, and remains front of mind in the design and production of our high-quality products. Against that backdrop, we are announcing three stretching new corporate responsibility goals, to be delivered by 2040 - the Super Responsible 40:
· 100% organic cotton usage
· 100% renewable electricity in everything we do
· Helping 100,000 young people to positively contribute to their community
Cotton is Superdry's single biggest input material. As with all commodities, producing it at scale comes at a cost to the land and environment. We believe setting this ambitious target and working with suppliers and the supply chain beyond them will support the sector to grow in order to produce more organic cotton, benefiting farmers' livelihoods and wellbeing, as well as the environment.
Electricity generation from the burning of fossil fuels is one of the major factors contributing to climate change. Superdry will be 100 per cent renewable in its stores and offices by 2020 and will then extend its horizon to renewable energy in the supply chain working with its franchisees and distribution partners to ensure that they use only renewables by 2030 and with its suppliers to a 2040 deadline.
Superdry's people are at the heart of everything it does. We are extending our partnership with the Prince's Trust and looking to enter into similar initiatives with other partners in all of our major markets to make a real difference for 100,000 young people helping them gain experience in the workplace, improving their practical and social skills, improving their mental health and encouraging them into education or training.
Euan Sutherland, Superdry Chief Executive Officer, said:
"Superdry is a global digital brand with huge opportunities ahead of it. Over the past three years our business has delivered a fundamental transformation becoming increasingly diversified not only internationally, but also by channel, product and in the customers we attract.
"Looking forward we believe we are better placed than ever before to deliver on our global digital brand aspirations. Our unique capability across Ecommerce, Wholesale and store channels provide significant opportunity for growth in the world's largest apparel markets with our focus on operational excellence enhancing returns from this growth.
"Changing the name of the Group to Superdry is an important step reflecting our focus on developing the iconic Superdry brand globally and digitally.
"Our three stretching Super Responsible 40 targets reflect the scale of our ambition for the Superdry brand and our aspiration to be a leader in corporate responsibility.
"We are more excited today than we have ever been before about the future of Superdry and our ability to create long-term sustainable growth for our investors by delivering on our compelling strategy."
For further information:
44 (0)1242 586456
Chief Financial Officer
44 (0) 20 7353 4200
1. The presentation materials will be available on the Company's website (www.supergroup.co.uk) at the conclusion of the event. No new material information will be provided.
2. Brand revenue represents reported sales for each financial period stated with Wholesale revenues adjusted to consumer retail prices.
3. Return on Capital Employed is defined as underlying earnings before interest and tax as a proportion of invested capital being total assets less current liabilities and cash.
4. Like-for-Like sales growth is defined as the year-on-year growth for stores and concessions open for more than one year and includes Ecommerce revenues. Foreign currency sales are translated at the average rate for the month in which they are made.
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Notes to Editors
Superdry is a British global lifestyle brand, designed for attitude not age with affordable, premium-quality clothing, accessories, footwear and cosmetics.
As we develop the breadth and nature of our product range, we continue to appeal to a much broader, aspirational age group. Those who want to feel amazing in what they wear and appreciate style, quality and attention to detail.
Already well established in the UK - our home market - we operate a significant and continually expanding international business, selling through our websites, wholesale partners and a network of both franchise and owned stores. We are becoming a more efficient business as we improve our process from Design to Customer and refine our wholesale model. Simultaneously, we are focused on expanding our business globally with a clear strategy for growing our Ecommerce business as well as our operations in key markets within Europe, North America and China.
We have a physical presence in 62 countries and 863 stores and concessions globally. We also have a successful Ecommerce business with 27 international websites across 18 countries covering 12 different languages.