moving forward trinity limited annual
TRANSCRIPT
21 March 2016
Trinity Limited
Stock Code: 891
MOVING FORWARD ANNUAL RESULTS 2015
21 March 2016
ANNUAL RESULTS 2015
2
AGENDA
– Market backdrop
– Update since August
– Annual results for 2015
– Outlook
– Global Strategy
Financial Performance
ANNUAL RESULTS 2015
3
MARKET BACKDROP
– Economic challenges continue
– Sector performance
– RMB depreciation
– Dampened consumer spending - Q4 2015
Financial Performance
ANNUAL RESULTS 2015
4
INTERNAL CHALLENGES
– One off restructuring costs
– Store closure
– Reorganised sourcing and production processes
Financial Performance
ANNUAL RESULTS 2015
5
UPDATE SINCE AUGUST
What we said :
– Ongoing restructuring
– Streamline processes
– Consolidate store portfolio
– Maintain positive EBITDA and margins in low 70s
Financial Performance
ANNUAL RESULTS 2015
6
UPDATE SINCE AUGUST
Financial Performance
What we said :
– Ongoing restructuring
– Streamline processes
– Consolidate store portfolio
– Maintain positive EBITDA and margins in low 70s
ANNUAL RESULTS 2015
7
REDUCED HEADCOUNT RESULTED IN ONE-OFF COST OF 59.6 MILLION
– Significant reduction in recurring staff costs
Financial Performance
Headcount summary 2015 31 Dec
2015 30 Jun
2014 31 Dec
2014 30 Jun
Group total 2,738 2,951 3,330 3,558
ANNUAL RESULTS 2015
8
UPDATE SINCE AUGUST
Financial Performance
What we said :
– Ongoing restructuring
– Streamline processes
– Consolidate store portfolio
– Maintain positive EBITDA and margins in low 70s
ANNUAL RESULTS 2015
9
STREAMLINE PROCESSES
– Completed first phase of production and sourcing process reorganisation
– Reduced selling, marketing and distribution expenses by 11%
– Value of inventory reduced to HK$591.9 million in December 2015 from HK$612.5 million in December 2014
Financial Performance
ANNUAL RESULTS 2015
10
UPDATE SINCE AUGUST
Financial Performance
What we said :
– Ongoing restructuring
– Streamline processes
– Consolidate store portfolio
– Maintain positive EBITDA and margins in low 70s
ANNUAL RESULTS 2015
11
CONSOLIDATE STORE PORTFOLIO
Financial Performance
2015 31 Dec
2015 30 Jun
2014 31 Dec
2014 30 Jun
Group total 349 386 399 433
ANNUAL RESULTS 2015
12
UPDATE SINCE AUGUST
Financial Performance
What we said :
– Ongoing restructuring
– Streamline processes
– Consolidate store portfolio
– Maintain positive EBITDA and margins in low 70s
ANNUAL RESULTS 2015
13
ACHIEVED POSITIVE EBITDA AND 70% MARGINS – Achieved margins within the low 70s despite difficult economic climate
– Positive EBITDA
Financial Performance
ANNUAL RESULTS 2015
Results for 2015
ANNUAL RESULTS 2015
15
FINANCIAL SUMMARY
Financial Performance
HK$ million 2015 2014 15 vs 14 Variance
Revenue 1,914.1 2,623.6 (27.0%)
Gross Profit * Gross margin
1,385.2 72.4%
1,942.9 74.1%
(28.7%) -1.7 pp
Operating (Loss) / Profit Operating margin
(117.6) -6.1%
172.8 6.6%
na. -12.7 pp
(Loss) / Profit Attributable to Shareholders Net margin
(88.5) -4.6%
160.9 6.1%
na. -10.7 pp
* Excluding the adjustments for inventory provision movements, the gross profit margin for the Group increased by 0.3 percentage points.
ANNUAL RESULTS 2015
16
SAME-STORE SALES
Financial Performance
– Majority of stores in Greater China make positive contribution
– Biggest adverse impact in stores in Northern China
2015 2014
Group total -25.7% 0.3%
ANNUAL RESULTS 2015
17
REDUCED SELLING, MARKETING AND DISTRIBUTION EXPENSES BY 11%
Financial Performance
HK$ million 2015 2014
Selling, marketing and Distribution expenses 1,179.1 1,329.1
ANNUAL RESULTS 2015
18
STATE OF THE BUSINESS
Financial Performance
– Experienced management team
– Strong international brands
– Strong retail network in Greater China
– Healthy balance sheet
– Gearing ratio of less than 15%
– Reduced inventories
– Existing licensing revenue stream from strong partnerships
ANNUAL RESULTS 2015
19
OUTLOOK
– Difficult economic conditions to continue in Greater China
– Underlying strategy to ‘Target Globally, Think Locally’ remains sound
– Continued restructuring and streamlining of manufacturing and supply chain functions
– 2015: initiated key measures and processes to better position the Group
– 2016: reposition the Group globally
Financial Performance
ANNUAL RESULTS 2015
Global Strategy
ANNUAL RESULTS 2015
21
GLOBAL STRATEGY – Chinese consumer increasingly travelling and spending overseas
– International wholesale, franchising and retail opportunities
– Expansion opportunities in Europe, the US and the Middle East
– Investment in e-commerce and digital marketing
– David Beckham partnership for Kent & Curwen to globalise the brand
– Addition of Hardy Amies to Trinity’s heritage brand portfolio
Financial Performance
ANNUAL RESULTS 2015
22 Hardy Amies
ANNUAL RESULTS 2015
Stepping Forward
ANNUAL RESULTS 2015
24 Stepping Forward
ANNUAL RESULTS 2015
25 Stepping Forward
ANNUAL RESULTS 2015
26 Stepping Forward
ANNUAL RESULTS 2015
27 Stepping Forward
ANNUAL RESULTS 2015
28 Stepping Forward
ANNUAL RESULTS 2015
29 Stepping Forward
ANNUAL RESULTS 2015
30 Stepping Forward
ANNUAL RESULTS 2015
31 Stepping Forward
ANNUAL RESULTS 2015
32 Stepping Forward
ANNUAL RESULTS 2015
33 Stepping Forward
ANNUAL RESULTS 2015
34 Stepping Forward
ANNUAL RESULTS 2015
35 Stepping Forward
ANNUAL RESULTS 2015
36 Stepping Forward
ANNUAL RESULTS 2015
37 Stepping Forward
ANNUAL RESULTS 2015
38 Stepping Forward
ANNUAL RESULTS 2015
39 Stepping Forward
ANNUAL RESULTS 2015
40 Stepping Forward
ANNUAL RESULTS 2015
41 Stepping Forward
ANNUAL RESULTS 2015
42 Stepping Forward
ANNUAL RESULTS 2015
43 Stepping Forward
ANNUAL RESULTS 2015
44
THANK YOU
ANNUAL RESULTS 2015
45
Disclaimer
– The information contained in this presentation is intended solely for your personal reference. Such
information is subject to change without notice and no representation or warranty express or implied is made as to, and no reliance, should be placed on, the fairness, accuracy, completeness or correctness of the information contained in this presentation. This presentation does not intend to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of the Company’s financial or trading position or prospects. None of the Company nor any of its respective affiliates, advisors or representatives shall have any liability (in negligence or otherwise) whatsoever for any loss or damage howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
– This presentation contains projections and forward looking statements that may reflect the Company’s current views with respect to future events and financial performance. Readers are cautioned not to place undue reliance on these forward-looking statements which are subject to various risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
– This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or the provision of any investment advice, and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto, nor does this presentation constitute a recommendation regarding the securities or financial instruments of the Company.