1H FY2022 Interim Results
Results announcement
KMD BRANDS LIMITED W kmdbrands.com
Results for announcement to the market
Name of issuer KMD Brands Limited (formerly Kathmandu Holdings Limited)
Reporting Period 6 months to 31 January 2022
Previous Reporting Period 6 months to 31 January 2021
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$407,304 -0.8%
Total Revenue $407,304 -0.8%
Net profit/(loss) from continuing
operations
($5,883) -126.8%
Total net profit/(loss) ($5,505) -124.7%
Interim Dividend
Amount per Quoted Equity
Security
$0.03000000
Imputed amount per Quoted
Equity Security
NIL
Record Date 15 June 2022
Dividend Payment Date 30 June 2022
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$0.16 $0.14
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
The interim results are based on accounts which have been subject to
review. Refer to accompanying unaudited financial statements.
Authority for this announcement
Name of person
authorised to
make this announcement
Frances Blundell
Contact person for this
announcement
Frances Blundell
Contact phone number +64 3 968 6110
Contact email address companysecretary@kmdbrands.com
Date of release through MAP
Wednesday, 23 March 2022
Unaudited financial statements accompany this announcement.
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KMD BRANDS LIMITED W kmdbrands.com
KMD Brands Limited
ASX / NZX / Media Announcement
23 March 2022
(All amounts in NZ$ unless otherwise stated)
Strategic initiatives position KMD Brands for return
to global growth
Leading global outdoor, lifestyle and sports company, KMD Brands Limited (ASX / NZX: KMD, ‘KMD’
or the ‘Company’), is pleased to announce its results for the six months ended 31 January 2022 (1H
FY22).
1H FY22 key highlights (vs 1H FY21):
• Sales of $407.3 million (1H FY21: $410.7 million)
positive Q2 rebound following Q1 COVID lockdown impacts on Kathmandu and Rip Curl in
Australasia
Oboz impacted by COVID closure of Vietnam factories (now reopened)
• Gross margin of 57.7% (1H FY21: 59.0%), due to elevated international freight costs, and
increased clearance mix for the Kathmandu brand
• Underlying EBITDA of $10.2 million (1H FY21: $48.2 million) (excluding the impact of IFRS 16)
• Statutory NPAT loss of $(5.5) million
• Strong balance sheet with $48.6 million net debt and comfortably within all covenants; significant
funding headroom of c.$250 million
• Interim dividend increased by 50% to 3.0 cents per share (fully franked for Australian
shareholders)
Commenting on the 1H FY22 results, Group CEO & Managing Director Michael Daly said:
“We continued to deliver on our strategic objectives, positioning KMD Brands for growth as travel
rebounds globally and COVID-related impacts on supply abate. We maintained a strong focus on
building our global brands, sponsoring the first ever World Surf League finals, with the men’s event
won by a Rip Curl surfer. We opened twelve new owned / licensed retail stores globally, and online
sales increased to 17.4% of direct-to-consumer sales, rewarding initiatives to elevate digital
capabilities. Substantial progress was also achieved on our ESG strategy.”
“Rip Curl delivered sales growth of 2.7% over the half, with strong sales growth in online and
wholesale channels, underpinned by strong performance in Europe and Hawaii in particular, while
North America was impacted by short-term wetsuit shortages and port congestion. Rip Curl returned to
same store sales growth in Q2, as lockdown restrictions lifted and the business rebounded.”
“The Kathmandu Australasian store network was more impacted by COVID closures in Q1 than the
Rip Curl global store network, before recovering strongly in Q2. While Kathmandu continued to feel
the impacts of COVID related travel restrictions, we were pleased to see a 46.4% increase in online
sales, and the business is well positioned to grow internationally, with the Europe Fall / Winter 22 sell-
in complete, and forward orders in line with expectations.”
KMD BRANDS LIMITED W kmdbrands.com
“Oboz was impacted by the closure of Vietnam supplier factories due to COVID lockdowns, with
approximately half of 1H FY22 orders unable to be fulfilled. However, the demand for the Oboz brand
and products has never been stronger, with forward orders into FY23 very strong and supporting our
medium-term growth targets.”
“Our rebranding to KMD Brands earlier this month reflects our purpose to inspire people to explore
and love the outdoors, with a vision of being the leading family of global outdoor brands – designed for
purpose, driven by innovation, best for people and planet. It is with this ethos in mind that we look to
develop our portfolio of global brands, underpinned by investments that deliver a world-class unified
commerce experience, and our commitment to operational excellence and leadership in ESG.”
Group financial performance
Statutory Underlying
1
NZ$ million
2
1H FY22 1H FY22 1H FY21 Var %
Sales 407.3 407.3 410.7 (0.8%)
Gross Profit 234.9 234.9 242.5 (3.1%)
Operating Expenses (178.8) (224.7) (194.3) 15.7%
EBITDA 56.1 10.2 48.2 (78.8%)
EBIT 0.9 (5.5) 33.4
NPAT (5.5) (6.8) 23.1
The 1H FY22 Group results were underpinned by positive Q2 sales following Q1 COVID lockdown
impacts on Kathmandu and Rip Curl in Australasia. While these lockdowns impacted EBITDA by c.
$35 million, Q2 underlying EBITDA was above last year reflecting the rebound in sales.
The Group invested in the long-term value of all three brands, with an additional $14 million
expenditure in 1H FY22 to support brand marketing.
Rip Curl: result underpinned by online and wholesale channel growth
Underlying
1
NZ$ million 1H FY22 1H FY21 Var%
Sales 257.8 251.1 2.7%
Gross Profit 152.7 150.3 1.5%
Operating Expenses (118.9) (101.7) 17.0%
EBITDA 33.7 48.7 (30.7%)
EBIT 26.4 41.4 (36.4%)
1
Underlying results exclude the impact of IFRS 16 leases and one-off abnormal costs
2
1H FY22 NZD/AUD conversion rate 0.953 (1H FY21: 0.931), 1H FY22 NZD/USD conversion rate 0.694 (1H FY21 0.684)
KMD BRANDS LIMITED W kmdbrands.com
Rip Curl’s results were supported by strong sales growth in online and wholesale channels, with total
sales up 2.7% on 1H FY21. Europe and Hawaii in particular achieved strong sales growth, while North
America was impacted by wetsuit shortages and port congestion, and Australia was impacted by
COVID-related store closures during Q1.
Direct-to-consumer (‘DTC’) same store sales growth (comprising owned retail stores and online) was
up 2.1%, adjusted for COVID lockdowns
3
. Q2 same store sales growth was +3.0%, with +20.1%
same store sales growth compared to Q2 FY20 (pre-COVID). Online sales grew by 14.5%, with
penetration increasing from 11.5% of DTC sales in 1H FY21 to 13.8% of DTC sales in 1H FY22.
Wholesale sales were up 16.1%, with less COVID interruption to the 1H FY22 sell-in period than last
year. The slight reduction in gross margin to 59.2% (1H FY21: 59.9%) was due to a higher wholesale
mix and elevated international freight costs.
Kathmandu: rebounded in Q2
Underlying
1
NZ$ million 1H FY22 1H FY21 Var %
Sales 128.3 129.3 (0.8%)
Gross Profit 74.3 82.0 (9.4%)
Operating Expenses (92.6) (81.4) 13.7%
EBITDA (18.3) 0.5
EBIT (26.3) (6.8)
Kathmandu’s performance continued to be impacted by COVID-related lockdowns and travel
restrictions. Same store sales (including online)
3
were up 3.0% overall, as a result of a strong Q2
rebound, where same store sales grew by +15.4%. Online sales grew 46.4%, with penetration
increasing from 14.4% of sales in 1H FY21 to 21.2% in 1H FY22.
Gross margin was impacted by an elevated clearance mix and elevated international freight costs.
Oboz: result reflects unprecedented supply challenges
Underlying
1
NZ$ million 1H FY22 1H FY21 Var %
Sales 21.2 30.4 (30.2%)
Gross Profit 7.7 10.5 (27.0%)
Operating Expenses (8.0) (6.7) 20.3%
3
Same store sales are for the 26 full weeks ended 30 January 2022 and are measured at constant currency. Adjusted same
store sales removes stores that were not able to open for a comparable period in either year because of COVID closures.
KMD BRANDS LIMITED W kmdbrands.com
EBITDA (0.4) 3.8
EBIT (0.8) 3.6
Oboz wholesale and online sales were heavily impacted by the three-month COVID-related closure of
Vietnam factories and compounded by international freight delays, with approximately 50% of 1H
FY22 orders unable to be fulfilled. Oboz Vietnam factories have since reopened and are ramping up
production, with supply expected to recover during 2H FY22.
Gross margin was impacted by significant international freight costs averaging more than 300% over
the historical average.
Strong balance sheet
The strong balance sheet position allows the Group to support growth investments and pursue
attractive M&A opportunities. The Group had a net debt position of $48.6 million, with significant
funding headroom of c. $250 million, with all debt facility covenants comfortably complied with.
Inventory is $20 million above January 2021, and is being managed to mitigate increased production
lead times and international shipping delays. January stock balances traditionally include stock build
for key Rip Curl Northern Hemisphere summer and Kathmandu winter seasons.
The adjusted operating cash outflow was $50.1 million.
As a result of the strong Balance Sheet and outlook for a recovery post-lockdowns, the Directors
declared an interim dividend of NZ 3.0 cents per share, a 50% increase from NZ 2.0 cents last year.
The interim dividend will be fully franked for Australian shareholders, and not imputed for New Zealand
shareholders. The record date for this dividend is 15 June 2022, and the payment date is 30 June
2022.
Committed to ESG excellence
Commenting on the Group’s ESG initiatives, Mr Daly said: “During 1H FY22, we achieved a number of
ESG milestones across our businesses. We expanded our wetsuit take-back program to all Rip Curl
stores in Australia and finalised Rip Curl’s ESG strategy. We were honoured to have Kathmandu win
the Deloitte New Zealand Top 200 Sustainable Business Leadership award, a testament to the hard
work of our team. Lastly, Oboz established an employee volunteer program, so our staff can give
back to the community.”
“We are leading the way in ESG initiatives to improve our business and have a positive influence on
the wider communities we operate within and impact. Sustainability is at the core of our businesses,
and we are working towards finalising and communicating our Group ESG strategy, which will include
setting science-based targets. We continue our work to extend Kathmandu’s B-Corp certification
across all three of our brands.”
KMD BRANDS LIMITED W kmdbrands.com
Outlook
Mr Daly said:
“While we continue to navigate impacts from COVID on global supply chains, forward demand for our
Rip Curl and Oboz products remains at record levels, and Kathmandu enters the traditionally strong
winter season well prepared.”
“We will continue to invest in building our global brands in the second half, with the launch of
Kathmandu online sites in Europe and Canada and the merging of Canada and UK fulfilment centres
for all brands.”
“We remain focused on several key initiatives to elevate our digital capabilities, with the Club Rip Curl
loyalty scheme due to launch in the second half. In addition, we will relaunch Kathmandu’s Summit
Club, with an exciting new value proposition.”
“I am excited by the opportunities we have to build our portfolio of brands under our new parent
company KMD Brands. The parent company is providing vision and strategic guidance to enable
group synergies, including sharing expertise in technology, materials and leveraging operational
excellence in sourcing, supply chain and systems, to deliver the best customer experience across our
brands.”
Investor briefing being held today @ 8:30am AEDT / 10:30am NZDT
Michael Daly (Group CEO & Managing Director) and Chris Kinraid (Group CFO) will be holding a
briefing session for investors and analysts at 8:30am AEDT / 10:30am NZDT today. To pre-register
and avoid a queue when calling, please follow this link:
https://event.webcasts.com/starthere.jsp?ei=1533195&tp_key=075e00df55
If you are unable to pre-register, at the time of the call please dial one of the numbers below and
provide the conference ID 177616 to the operator.
Australia Toll Free: 1800 590 693
Australia Local: +61 3 8317 0929
Australia Alt. Local: +61 7 3105 0937
New Zealand Toll Free: 0800 423 972
United States: 800 289 0459
Brazil +55 11 3181 5319
France +33 1 76 77 22 73
This announcement has been authorised for release to NZX and ASX by the Board of Directors of
KMD Brands Limited.
- ENDS -
KMD BRANDS LIMITED W kmdbrands.com
For further information, please contact:
Investors
Eric Kuret, Market Eye
P: +61 417 311 335
E: eric.kuret@marketeye.com.au
Media
Helen McCombie, Citadel-MAGNUS
P: + 61 2 8234 0103
About KMD Brands
KMD Brands is a global outdoor, lifestyle and sports company consisting of three iconic brands: Kathmandu, Rip
Curl and Oboz. A Certified B Corp, Kathmandu was founded in 1987 in New Zealand and specialises in quality
clothing and equipment for travel and adventure. Oboz, part of the group since 2018, is based in North America
and designs ‘True to the Trail®’ outdoor footwear to help people explore the wilderness. Rip Curl, acquired in
2019, is a leading global surf brand born in Bells Beach, Australia in 1969. Through these three brands KMD
Brands has transformed from a leading Australasian retailer to a brand-led global multi-channel business.
www.kmdbrands.com
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KMD BRANDS LIMITED
(formerly Kathmandu Holdings Limited)
INTERIM REPORT 2022
KMD BRANDS LIMITED - INTERIM REPORT 2022
2
DIRECTORS’ REPORT
The Directors of KMD Brands Limited present the Interim Report for the Company and its controlled entities for the half year ended
31 January 2022.
Review of Operations
COVID-19 continues to cause ongoing disruption to our customers, employees, and suppliers globally. The disruption has resulted
in reduced retail footfall, temporary store closures, supply chain delays and staffing constraints in many locations. As a result of
these disruptions the Group has recorded a consolidated net loss after tax for the period of NZ$5.5 million (2021: NZ$22.3 million
profit).
Significant store closures in Victoria, New South Wales, ACT and New Zealand heavily impacted Q1 sales and profitability with
underlying EBITDA down c. $35 million on the prior period. Pleasingly Q2 rebounded strongly in Australasia as Kathmandu and Rip
Curl grew on the comparable period. Oboz was materially impacted during the period as Vietnam factory shutdowns constrained
supply and its ability to fulfil demand.
Gross margin for the period was 130 basis points lower than last year due to elevated international freight costs, and increased
clearance mix for the Kathmandu brand.
Operating expenses were carefully controlled during store closures and the Group continued to invest in the long-term value of all
three brands, with an additional $14 million of expenditure in period to support brand marketing. Operating expenses reflect $15.2
million lower net government wage assistance and rent abatements than last half year.
A further review of the operations of the Company and its controlled entities is set out in the accompanying Company’s media
release of 23 March 2022.
Seasonality
Due to the seasonal nature of the Group’s activities, the activities in the second half of the year historically provide a larger portion of
the sales and net profit for the full year.
Impact of COVID-19
The Group has reviewed the impact on the business from the continually evolving COVID-19 situation. During the half year, trade at
a number of the Group’s stores continued to be disrupted by COVID-19 related travel restrictions and government mandated
lockdowns and closures. Refer to note 4 of the Financial Statements for further disclosure about the impact of COVID-19.
Signed in accordance with a resolution of the Directors:
David Kirk Michael Daly
Director Director
KMD BRANDS LIMITED - INTERIM REPORT 2022
3
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Sales revenue 5 407,304 410,713 922,792
Cost of sales (172,359) (168,196) (381,170)
Gross profit 234,945 242,517 541,622
Other income 5 3,568 20,891 29,165
Selling expenses 3, 6 (99,761) (96,710) (217,115)
Administration and general expenses 3, 6 (82,630) (71,343) (145,641)
(178,823) (147,162) (333,591)
Earnings before interest, tax, depreciation, and amortisation 56,122 95,355 208,031
Depreciation and amortisation 6 (55,241) (56,168) (115,847)
Earnings before interest and tax 881 39,187 92,184
Finance income 716 453 834
Finance expenses (6,447) (9,648) (17,311)
Finance costs - net 6 (5,731) (9,195) (16,477)
(Loss)/Profit before income tax (4,850) 29,992 75,707
Income tax expense (655) (7,713) (12,278)
(Loss)/Profit after income tax (5,505) 22,279 63,429
(Loss)/Profit for the period attributable to:
Shareholders of the company
(5,883) 21,962 63,066
Non-controlling interest
378 317 363
Other comprehensive income/(loss) that may be recycled through profit and loss:
Movement in cash flow hedge reserve
4,492 (4,194) 6,482
Movement in foreign currency translation reserve
16,121 (16,648) (17,527)
Movement in other reserves
- 14 14
Other comprehensive income/(loss) for the period, net of tax 20,613 (20,828) (11,031)
Total comprehensive income for the period 15,108 1,451 52,398
Total comprehensive income for the period attributable to:
Owners of the company
14,684 1,165 52,118
Non-controlling interest
424 286 280
Basic earnings per share (restated)
(0.8) cps 3.1 cps 8.9 cps
Diluted earnings per share (restated)
(0.8) cps 3.1 cps 8.8 cps
Weighted average basic ordinary shares outstanding (‘000)
(restated)
709,001 709,001 709,001
Weighted average diluted ordinary shares outstanding (‘000)
(restated)
715,331 711,578 713,006
KMD BRANDS LIMITED - INTERIM REPORT 2022
4
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Capital
Cash Flow
Hedge
Reserve
Foreign
Currency
Translation
Reserve
Share
Based
Payments
Reserve
Other
Reserves
Retained
Earnings
Non-
controlling
Interest
Total
Equity
NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000
Balance as at 31 July 2020 626,380 (5,141) (12,018) 608 (61) 165,415 4,007 779,190
Profit after tax - - - - - 63,066 363 63,429
Other comprehensive income - 6,482 (17,444) - 14 - (83) (11,031)
Dividends paid - - - - - (14,180) - (14,180)
Issue of share capital - - - - - - - -
Share based payment expense - - - 1,798 - - - 1,798
Lapsed share options - - - (58) - 58 - -
Deferred tax on share-based
payment transactions
- - - 289 - - - 289
Acquisition of remaining shares
in non-controlling interest
- - - - - (427) (217) (644)
Balance as at 31 July 2021 626,380 1,341 (29,462) 2,637 (47) 213,932 4,070 818,851
(Loss)/Profit after tax - - - - - (5,883) 378 (5,505)
Other comprehensive income - 4,492 16,075 - - - 46 20,613
Dividends paid - - - - - (21,270) - (21,270)
Issue of share capital - - - - - - - -
Share based payment expense - - - 1,205 - - - 1,205
Lapsed share options - - - (77) - 77 - -
Deferred tax on share-based
payment transactions
- - - 300 - - - 300
Dividends paid to non-controlling
interest
- - - - - - (446) (446)
Balance as at 31 January 2022 626,380 5,833 (13,387) 4,065 (47) 186,856 4,048 813,748
KMD BRANDS LIMITED - INTERIM REPORT 2022
5
CONSOLIDATED BALANCE SHEET
Note Unaudited
As at
31 January
2022
Unaudited
As at
31 January
2021
Audited
As at
31 July
2021
NZ$’000 NZ$’000 NZ$’000
ASSETS
Current assets
Cash and cash equivalents
58,278 228,471 142,614
Trade and other receivables
8
68,186 57,831 68,931
Inventories
249,603 229,641 216,545
Derivative financial instruments 11 9,133 93 5,285
Current tax asset 3 11,099 2,028 3,430
Other current assets 2,347 2,779 2,320
Total current assets 398,646 520,843 439,125
Non-current assets
Trade and other receivables 8 1,576 3,639 1,549
Property, plant, and equipment 79,295 82,647 79,284
Intangible assets 699,178 681,217 688,551
Deferred tax assets 3 14,200 4,755 13,977
Right-of-use assets 9 252,340 238,218 242,677
Total non-current assets 1,046,589 1,010,476 1,026,038
Total assets 1,445,235 1,531,319 1,465,163
LIABILITIES
Current liabilities
Trade and other payables 130,105 123,211 149,206
Derivative financial instruments 11 - 11,775 1,079
Current tax liabilities 3 2,281 4,301 10,159
Current lease liability 9 74,809 74,997 75,572
Total current liabilities 207,195 214,284 236,016
Non-current liabilities
Non-current trade and other payables 15,137 13,596 14,818
Interest bearing liabilities 10 106,838 238,566 105,597
Deferred tax 3 90,285 82,720 86,182
Non-current lease liability 9 212,032 201,114 203,699
Total non-current liabilities 424,292 535,996 410,296
Total liabilities 631,487 750,280 646,312
Net assets 813,748 781,039 818,851
EQUITY
Issued capital 626,380 626,380 626,380
Reserves (3,536) (37,011) (25,531)
Retained earnings 186,856 187,377 213,932
Non-controlling interest 4,048 4,293 4,070
Total equity 813,748 781,039 818,851
KMD BRANDS LIMITED - INTERIM REPORT 2022
6
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Cash was provided from:
Receipts from customers 413,710 424,918 920,374
Government grants received 2,948 18,223 23,892
Interest received 140 453 834
Income tax received - 8 1,050
416,798 443,602 946,150
Cash was applied to:
Payments to suppliers and employees 404,812 368,268 722,656
Income tax paid 13,982 13,881 24,987
Interest paid 6,173 7,621 15,435
424,967 389,770 763,078
Net cash (outflow) / inflow from operating activities (8,169) 53,832 183,072
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of property, plant, and equipment - 24 2
- 24 2
Cash was applied to:
Purchase of property, plant, and equipment 8,929 6,125 15,044
Purchase of intangibles 4,229 6,141 20,509
Acquisition of subsidiaries - - 1,029
13,158 12,266 36,582
Net cash (outflow) from investing activities (13,158) (12,242) (36,580)
Cash flows from financing activities
Cash was provided from:
Proceeds of borrowings 24,000 - -
24,000 - -
Cash was applied to:
Dividends paid 21,716 - 14,180
Repayment of borrowings 24,000 - 128,894
Repayment of lease liabilities 41,896 43,161 89,749
87,612 43,161 232,823
Net cash (outflow) from financing activities (63,612) (43,161) (232,823)
Net (decrease) in cash held (84,939) (1,571) (86,331)
Opening cash and cash equivalents 142,614 231,885 231,885
Effect of foreign exchange rates 603 (1,843) (2,940)
Closing cash and cash equivalents 58,278 228,471 142,614
KMD BRANDS LIMITED - INTERIM REPORT 2022
7
RECONCILIATION OF NET (LOSS)/PROFIT AFTER TAXATION WITH CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
(Loss)/Profit after income tax (5,505) 22,279 63,429
Movement in working capital:
(Increase) / decrease in trade and other receivables 1,770 15,219 5,604
(Increase) / decrease in inventories (29,973) (3,015) 8,190
(Increase) / decrease in other current assets - - 431
Increase / (decrease) in trade and other payables (21,084) (25,596) 3,504
Increase / (decrease) in tax liability (15,562) (4,167) 398
(64,849) (17,559) 18,127
Add non-cash items:
Depreciation of property, plant, and equipment 10,227 10,358 20,851
Amortisation of intangibles 5,490 4,457 8,614
Depreciation of right-of-use assets 39,524 41,353 86,382
Impairment of assets - - 1,910
Paycheck Protection Program (PPP) loan forgiveness - (684) (4,025)
Foreign currency translation of working capital balances 3,327 (5,062) (3,319)
Movement in deferred taxation 2,235 (1,993) (12,057)
Employee share-based remuneration 1,205 667 1,798
Loss on disposal of property, plant, and equipment and intangibles 177 16 1,362
62,185 49,112 101,516
Cash (outflow)/inflow from operating activities (8,169) 53,832 183,072
KMD BRANDS LIMITED - INTERIM REPORT 2022
8
1 GENERAL INFORMATION
KMD Brands Limited (the Company), formerly known as Kathmandu Holdings Limited, and its subsidiaries (together the Group)
is a designer, marketer, retailer and wholesaler of apparel, footwear and equipment for surfing and the outdoors. It operates in
New Zealand, Australia, North America, Europe, South East Asia, and Brazil.
The Company is a limited liability company incorporated and domiciled in New Zealand. KMD Brands Limited is a company
registered under the Companies Act 1993 and is an FMC reporting entity under Part 7 of the Financial Markets Conduct Act
2013. The address of its registered office is 223 Tuam Street, Christchurch.
These consolidated interim financial statements have been approved for issue by the Board of Directors on 23 March 2022,
and have been reviewed, not audited.
Seasonality – due to the seasonal nature of the Group’s activities, the activities in the second half of the year historically
provide a larger portion of the sales and net profit for the full year.
2 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These general-purpose financial statements for the six months ended 31 January 2022 have been prepared in accordance with
NZ IAS 34, Interim Financial Reporting. In complying with NZ IAS 34, these consolidated interim financial statements also
comply with IAS 34.
These consolidated interim financial statements do not include all the notes of the type normally included in an annual financial
report. Accordingly, this report should be read in conjunction with the audited financial statements of Kathmandu Holdings
Limited for the year ended 31 July 2021 which have been prepared in accordance with the New Zealand equivalents to
International Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
The Group is designated as a profit-oriented entity for financial reporting purposes.
3 ACCOUNTING POLICIES
Other than the operating segment change highlighted in Note 7 and the changes noted below, the consolidated interim financial
statements have been prepared using the same accounting policies and methods of computation as those used in the audited
financial statements of Kathmandu Holdings Limited for the year ended 31 July 2021.
Selling and administrations expenses classification
During the preparation of financial statements for the year ended 31 July 2021 the Group identified an error in the Rip Curl
segment’s classification of selling expenses and administration and general expenses in the previously reported interim
financial statements for the six months ended 31 January 2021. As a result, selling expenses for the six months ended 31
January 2021 have increased by $14,414,000 with a corresponding decrease in administration and general expenses to align
with the Group policy. The restatement has no impact on total expenditure.
Tax restatements
In preparing the financial statements for the year ended 31 July 2021 the Group identified an error in the 31 January 2021
interim financial statements relating to the Rip Curl acquisition accounting. The nature of the error related to an overstatement
of deferred tax by $737,000, understatement of current tax by $2,478,000 and an understatement of goodwill by $1,741,000.
The statement of comprehensive income and cash flows remain unchanged. The 31 January 2021 comparatives presented in
these financial statements have been restated to reflect these changes.
Also during the year ended 31 July 2021 the Group recognised $9,578,000 of previously unrecognised Rip Curl US tax losses.
As a result of recognising the deferred tax losses the deferred tax asset is now separately disclosed in the consolidated
balance sheet. For consistency the 31 January 2021 deferred tax asset of $4,755,000 has also been separately disclosed in
the consolidated balance sheet. The deferred tax assets for the six months ended 31 January 2021 was previously netted off in
the deferred tax liability balance of $82,720,000.
Consideration of the IFRS Interpretations Committee (‘IFRIC’) agenda decision
In April 2021, IFRIC issued an agenda decision clarifying its interpretation on how current accounting standards apply to
configuration and customisation costs incurred in implementing Software-as-a-Service (‘SaaS’) cloud computing arrangements.
The IFRIC decision has clarified that because SaaS arrangements are service contracts that provide the Group with the right to
access the cloud provider’s application software over the contract period, costs to configure or customise this software should
be recognised as operating expenses when the services are received.
KMD BRANDS LIMITED - INTERIM REPORT 2022
9
The Group’s current accounting policy is to record these configuration and customisation costs as part of the cost of an
intangible asset and amortise these costs over the useful life of the software assets. The Group is well advanced in a detailed
review process with a professional services firm to quantify the impact of this agenda decision on the financial statements of
the Group; however, given the quantum of the amounts involved and the analysis required, this has not been finalised as at the
date of this report. We will continue our review the capitalised SaaS costs to reliably quantify the extent of any adjustment that
maybe required due to the agenda decision and therefore we have continued to capitalise new costs that have occurred after
31 July 2021 in line with the previously approved accounting policy. At 31 January 2022 the Group’s carrying value of
capitalised software is $29,165,000 which includes SaaS solutions.
It is anticipated that this exercise will be completed and reflected in the results for the financial year ending 31 July 2022.
New standards first applied in the period
There are no new standards first applied in the period.
Standards, interpretations, and amendments to published standards that are not yet effective
There are no standards or amendments published but not yet effective that are expected to have a significant impact on the
Group.
4 IMPACT OF COVID-19
COVID-19 continues to have an impact on the Group, with local and global restrictions on movement, travel and gatherings
resulting in a significant reduction in footfall during the period. Stores across our network continue to open and close based on
government mandated lockdowns and staffing constraints a result of illness and isolation requirements
As outlined in the 2021 Annual Report, there continues to be uncertainties due to the COVID-19 pandemic that affects the
Group’s key estimates and judgements, including:
Intangible assets and goodwill – the ability to achieve future forecasts and the consequential impact on the carrying value of
goodwill and other finite life intangibles. The Group have considered whether there are any events or changes in circumstances
since 31 July 2021 and the signing of the 2021 consolidated financial statements that may be an impairment indicator as at 31
January 2022.
Factors considered include:
- The Group market capitalisation remains above the net assets of the Group at 31 January 2022, this is further
supported by an increase in the share price since year end.
- The trading performance of each cash generating unit (CGU) for the period is broadly in line with our internal
expectations when the impact of the Q1 lockdowns and Oboz supply chain disruptions are excluded; and
- Each CGU continues to have sufficient headroom above the carrying value of its assets when the expected FY22
result (inclusive of the Q1 impact) is applied to the FY21 impairment models.
Having considered the above factors the Group is comfortable that there are no material adverse events or changes in
circumstances that would require impairment testing to be performed at 31 January 2022.
Trade receivables – the ability of wholesale customers to pay. The Group continues to actively monitor payment collection
rates and the level of provisions across the Group. The receivable ageing continues to improve and as a result the expected
credit loss has been adjusted (refer note 8).
Despite the continuing impact of COVID-19, the Directors are satisfied that there will be adequate cash flows generated from
operating and financing activities to meet the obligations of the Group for a period of at least 12 months from the date of
approving the consolidated financial statements. The Group was fully compliant with all banking covenants during the period
and, based on the current cash flow forecasts, the Group expects to remain compliant with all covenants at all measurement
dates for at least 12 months from the date of approving the consolidated financial statements.
Taking into consideration the current trading results, the net debt (excluding lease liabilities) of $48,560,000 and liquidity of
$247,193,000 at 31 January 2022 (refer note 10), the financial statements continue to be prepared on a going concern basis.
KMD BRANDS LIMITED - INTERIM REPORT 2022
10
5 REVENUE
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Sale of goods
401,722 406,679 915,570
Royalty revenue
5,290 3,885 6,950
Commission revenue
292 149 272
407,304 410,713 922,792
Other income includes government grants received by group entities of $2,948,000 (2021: $20,503,000) related to wage and
other subsidies received in response to the impact of COVID-19.
6 EXPENSES
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
(Loss)/Profit before tax includes the following expenses:
Depreciation of property, plant, and equipment
10,227 10,358 20,851
Amortisation
5,490 4,457 8,614
Depreciation of right-of-use assets
39,524 41,353 86,382
Impairment expense
- - 1,910
Employee entitlements expense
94,591 99,717 199,190
Rental expense
7,225 5,558 9,977
Finance costs – net consist of:
Interest income
(140) (453) (834)
Interest expense on term debt
629 1,411 2,370
Interest on lease liabilities
4,269 4,493 8,879
Other finance costs
1,549 3,929 5,358
Net exchange loss/(gain) on foreign currency
(576) (185) 704
5,731 9,195 16,477
Other finance costs relate to facility fees on banking arrangements and debt underwriting costs.
7 SEGMENTAL INFORMATION
The Group has three operating segments representing the brands owned by the Group and a Corporate segment. These
operating segments have been determined based on the reports reviewed by the Group Chief Executive Officer and Group
Executive Management team.
The operating segments have changed from those reported as at 31 July 2021 to reflect changes in the Group’s internal
organisation. Comparative information as at 31 January 2021 has been restated accordingly.
- Rip Curl - designs, manufactures, wholesales and retails surfing equipment and apparel.
- Kathmandu - designs, markets, retails and wholesales apparel, footwear and equipment for outdoor travel and
adventure.
- Oboz - designs, markets, wholesales and retails online outdoor footwear.
The Corporate segment represents group costs, holding companies and consolidation eliminations and constitutes other
business activities that do not fall within the brand segments.
KMD BRANDS LIMITED - INTERIM REPORT 2022
11
EBITDA represents earnings before income taxes (a non-GAAP measure), excluding interest income, interest expense,
depreciation, and amortisation, as reported in the financial statements. EBIT represents EBITDA less depreciation and
amortisation.
The default basis of allocating shared costs is percentage of revenue with other bases being used where appropriate.
31 January 2022 Rip Curl Kathmandu Oboz Corporate Total
NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000
Total Segment Sales 257,834 128,277 21,255 - 407,366
Sales from internal customers - - 62 - 62
Sales from external customers 257,834 128,277 21,193 - 407,304
EBITDA 52,657 8,503 (230) (4,808) 56,122
Depreciation and software amortisation (24,008) (30,624) (604) (5) (55,241)
EBIT 28,649 (22,121) (834) (4,813) 881
Income tax expense (9,129) 7,361 127 986 (655)
Total segment assets 653,111 658,771 127,107 6,246 1,445,235
Total assets include:
Non-current assets 443,681 490,283 112,612 13 1,046,589
Additions to non-current assets 23,729 32,619 769 - 57,144
Total segment liabilities 251,249 256,498 19,438 104,302 631,487
31 January 2021 (restated) Rip Curl Kathmandu Oboz Corporate Total
NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000
Total Segment Sales 251,080 129,265 32,374 - 412,719
Sales from internal customers - - 2,006 - 2,006
Sales from external customers 251,080 129,265 30,368 - 410,713
EBITDA 67,775 28,563 3,804 (4,787) 95,355
Depreciation and software amortisation (25,186) (30,748) (232) (2) (56,168)
EBIT 42,589 (2,185) 3,572 (4,789) 39,187
Income tax expense (11,253) 1,584 (833) 2,789 (7,713)
Total segment assets 629,444 769,196 124,050 8,629 1,531,319
Total assets include:
Non-current assets 419,650 489,767 101,038 21 1,010,476
Additions to non-current assets 16,213 20,272 306 21 36,812
Total segment liabilities 245,186 253,241 17,294 234,559 750,280
KMD BRANDS LIMITED - INTERIM REPORT 2022
12
8 TRADE AND OTHER RECEIVABLES
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Current:
Trade receivables
53,594 52,805 61,084
Allowance for expected credit losses
(5,193) (9,845) (5,680)
Other receivables and prepayments
19,785 14,871 13,527
68,186 57,831 68,931
Non-current:
Other receivables
1,576 3,639 1,549
9 LEASES
Right-of-use assets
The movements in right of use assets for the period ended 31 January 2022 were as follows:
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Opening net book value 242,677 258,699 258,699
Additions and modifications to right-of-use asset 43,986 24,546 76,853
Depreciation for the period (39,524) (41,352) (86,382)
Impairment for the period - - (1,894)
Exchange differences 5,201 (3,675) (4,599)
Closing net book value 252,340 238,218 242,677
Lease liabilities
The movements in lease liabilities for the period ended 31 January 2022 were as follows:
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Opening lease liabilities 279,271 298,622 298,622
Additions and modifications to lease liability 44,484 24,082 75,601
Interest expense on lease liabilities 4,269 4,493 8,879
Repayment of lease liabilities (including interest) (46,663) (47,189) (98,694)
Exchange differences 5,480 (3,897) (5,137)
Closing net book value 286,841 276,111 279,271
KMD BRANDS LIMITED - INTERIM REPORT 2022
13
10 INTEREST BEARING LIABILITIES
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Interest bearing liabilities 106,838 238,566 105,597
Group Facility Agreement
The Group has a multi-option syndicated facility agreement, with a sustainability linked loan of A$100 million, a revolving cash
advance facility of A$115 million and NZ$24 million, trade finance sub-facilities of A$30 million and NZ$10 million, and
instruments sub-facilities of A$20 million and NZ$4 million. All facilities are repayable in full on 26 May 2024.
Interest is payable based on the BKBM rate (NZD borrowings), the BBSY rate (AUD borrowings), or the applicable short-term
rate for interest periods less than 30 days, plus a margin of up to 1.25%. The debt is secured by the assets of the guaranteeing
group in accordance with the Security Trust Deed dated 25 October 2019 as amended 26 May 2021.
The covenants entered into by the Group require specified calculations of Group earnings before interest, tax, depreciation and
amortisation (EBITDA) plus lease rental costs to exceed total fixed charges (net interest expense and lease rental costs) at the
end of each half during the financial year. Similarly, EBITDA must be no less than a specified proportion of total net debt at the
end of each six-month interim period. The calculations of these covenants are specified in the bank facility agreement of 25
October 2019 as amended and restated on 26 May 2021. The Group has complied with its banking covenants at all
measurement points during the year.
The current interest rate, prior to hedging, on the term loans is at 1.00% (2021: 0.96%).
11 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
(a)Financial risk factors
The Group’s activities expose it to a variety of financial risks , marke t risk (including currency risk and interes t rate risk), credit
risk and liquidity risk . The Group’s overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial
instruments such as foreign exchange contracts and interest rate swaps to manage certain risk exposures. Derivatives are
exclusively used for economic hedging purposes, i.e. not as trading or other speculative instruments, however not all derivative
financial instruments qualify for hedge accounting.
Risk management is carried out based on policies approved by the Board of Directors. The Group treasury policy provides
written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as
they fall due. The Group manages this
risk by actively managing working capital and ensuring flexibility in funding arrangements. Refer to note 10 for details of the
funding arrangements in place as at 31 January 2022. Also refer to note 4 for the liquidity risk in relation to the impact of
COVID-19.
The consolidated interim financial statements do not include all financial risk management information and disclosures required
in the annual financial statements; they should be read in conjunction with the Group’s annual financial statements as at 31
July 2021. There have been no changes in the risk management department or in any risk.
(b)Fair value estimation
The only financial instruments held by the Group that are measured at fair value are over-the-counter derivatives. These
derivatives have all been determined to be within level 2 (for the purposes of NZ IFRS 13) of the fair value hierarchy as all
significant inputs required to ascertain the fair value of these derivatives are observable.
There were no changes in valuation techniques during the period.
The following methods and assumptions were used to estimate the fair values for each class of financial instrument.
Trade debtors, trade creditors and bank balances
The carrying value of these items is equivalent to their fair value.
KMD BRANDS LIMITED - INTERIM REPORT 2022
14
Term liabilities
The fair value of the Group's term liabilities is approximately carrying value.
Foreign exchange contracts and interest rate swaps
The forward foreign exchange contracts have been fair valued using forward exchange rates that are quoted in an active
market. Interest rate swaps are fair valued using forward interest rates extracted from observable yield curves. The effects of
discounting are insignificant for these derivatives.
Guarantees and overdraft facilities
The fair value of these instruments is estimated on the basis that management do not expect settlement at face value to arise.
The carrying value and fair value of these instruments is approximately nil. All guarantees are repayable on demand.
The following table presents the Group’s assets and liabilities that are measured at fair value at balance date:
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Assets
Derivative financial instruments
9,133 93 5,285
Total assets
9,133 93 5,285
Liabilities
Derivative financial instruments
- 11,775 1,079
Total liabilities
- 11,775 1,079
12 COMMITMENTS
Capital commitments
Capital commitments contracted for at balance date are:
Unaudited
Six Months
Ended
31 January
2022
Unaudited
Six Months
Ended
31 January
2021
Audited
Year
Ended
31 July
2021
NZ$’000 NZ$’000 NZ$’000
Property, plant, and equipment
2,902 2,945 4,110
Intangible assets
11,108 13,669 7,271
Intangible asset commitments as at 31 January 2022 relate to various projects across the Group to upgrade information
technology software and systems.
13 CONTINGENT LIABILITIES
The Group is subject to litigation incidental to its business, none of which is expected to be material. No provision has been
made in the Group’s consolidated interim financial statements in relation to any current litigation and the Directors believe that
such litigation will not have a material effect on the Group’s consolidated interim financial position, results of operations or cash
flows.
14 CONTINGENT ASSETS
There are no contingent assets as at 31 January 2022 (2021: nil).
KMD BRANDS LIMITED - INTERIM REPORT 2022
15
15 RELATED PARTY DISCLOSURES
No amounts owed to related parties have been written off or forgiven during the period.
16 EVENTS OCCURRING AFTER BALANCE DATE
On 23 March 2022, the Directors declared an interim dividend of NZ 3.0 cents per share to be paid on 30 June 2022. This
dividend will not be imputed but will be fully franked for Australian shareholders.
There are no other events after balance date which materially affect the information within the financial statements.
KMD BRANDS LIMITED - INTERIM REPORT 2022
16
STATUTORY INFORMATION
GROUP STRUCTURE
KMD Brands Limited owns 100% of the following companies unless otherwise stated:
Milford Group Holdings Limited
Kathmandu Limited
Kathmandu Pty Limited
Kathmandu (U.K.) Limited
Kathmandu US Holdings LLC
Oboz Footwear LLC
Barrel Wave Holdings Pty Ltd
Rip Curl Group Pty Ltd
Rip Curl International Pty Ltd
PT Jarosite
Rip Curl Pty Ltd
Onsmooth Thai Co Ltd
Rip Curl Investments Pty Ltd
Blue Surf Pty Ltd
RC Surf Pty Ltd
Rip Curl Airport & Tourist Stores Pty Ltd
JRRC Rundle Mall Pty Ltd
Rip Curl (Thailand) Ltd (Group owns 50%)
RC Airports Pty Ltd
Ozmosis Pty Ltd
RC Chermside Pty Ltd
Bondi Rip Pty Ltd
Rip Curl Japan
Curl Retail No 1. Pty Ltd
RC Surf Sydney Pty Ltd
RC Surf South Pty Ltd
RC Surf NZ Limited
Rip Curl Finance Pty Ltd
Rip Curl Europe S.A.S
Rip Curl Spain S.A.U
Rip Curl Suisse S.A.R.L
Rip Surf LDA
Rip Curl UK Ltd
Rip Curl Germany GMBH
Rip Curl Nordic AB
Rip Curl Inc
Rip Curl Canada Inc
Rip Curl Brazil LTDA
DIRECTORS’ DETAILS
David Kirk Chairman, Non-Executive Director
Michael Daly Managing Director and Group Chief Executive Officer
John Harvey Non-Executive Director
Philip Bowman Non-Executive Director
Brent Scrimshaw Non-Executive Director
Andrea Martens Non-Executive Director
Abby Foote Non-Executive Director (Appointed 15 October 2021)
EXECUTIVES’ DETAILS
Michael Daly Group Chief Executive Officer
Chris Kinraid Group Chief Financial Officer
DIRECTORY
The details of the Company’s principal administrative and registered office in New Zealand are:
223 Tuam Street
Christchurch Central
PO Box 1234
Christchurch 8011
KMD BRANDS LIMITED - INTERIM REPORT 2022
17
SHARE REGISTRY
In New Zealand: Link Market Services (LINK)
Physical Address: Level 30, PWC Tower
15 Customs Street West
Auckland 1010
New Zealand
Postal Address: PO Box 91976
Auckland, 1142
New Zealand
Telephone: +64 9 375 5999
Investor enquiries: +64 9 375 5998
Facsimile: +64 9 375 5990
Internet address: www.linkmarketservices.co.nz
In Australia: Link Market Services (LINK)
Physical Address: Level 13, Tower 4
727 Collins Street
Melbourne VIC 3000
Australia
Postal Address: Locked Bag A14
Sydney, South NSW 1235
Australia
Telephone: +61 3 9067 2005
Investor enquiries: +61 1300 554 474 (toll free within Australia)
Facsimile: +61 2 9287 0303
Internet address: www.linkmarketservices.com.au
STOCK EXCHANGES
The Company’s shares are listed on the NZX and on the ASX as a foreign exempt listing.
INCORPORATION
The Company is incorporated in New Zealand.
© 2022 KPMG, a New Zealand Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited
by guarantee. All rights reserved.
Independent Review Report
To the shareholders of KMD Brands Limited
Report on the consolidated interim financial statements
Conclusion
Based on our review, nothing has come to our
attention that causes us to believe that the
consolidated interim financial statements of KMD
Brands Limited (the ‘Company’) and its subsidiaries
(the ‘Group’) on pages 3 to 15 do not:
i.present, in all material respects the
Group’s financial position as at 31 January
2022 and its financial performance and
cash flows for the 6 month period ended
on that date in compliance with NZ IAS 34
Interim Financial Reporting.
We have completed a review of the accompanying
consolidated interim financial statements which
comprise:
— the consolidated balance sheet as at 31 January
2022;
— the consolidated statements of comprehensive
income, changes in equity and cash flows for the
6 month period then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of consolidated interim financial statements in accordance with NZ SRE 2410 Review of Financial
Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited assurance
engagement. The auditor performs procedures, consisting of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of KMD Brands Limited, NZ SRE 2410 requires that we comply with the ethical requirements
relevant to the audit of the annual financial statements.
Our firm has not provided other services to the group. Subject to certain restrictions, partners and employees of
our firm may also deal with the group on normal terms within the ordinary course of trading activities of the
business of the group. These matters have not impaired our independence as reviewer of the group. The firm has
no other relationship with, or interest in, the group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we might
state to the shareholders those matters we are required to state to them in the Independent Review Report and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the shareholders as a body for our review work, this report, or any of the opinions we have formed.
Responsibilities of the Directors for the consolidated interim financial
statements
The Directors, on behalf of the group, are responsible for:
— the preparation and fair presentation of the consolidated interim financial statements in accordance with NZ
IAS 34 Interim Financial Reporting;
— implementing necessary internal controls to enable the preparation of consolidated interim financial
statements that are free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the consolidated financial
interim statements
Our responsibility is to express a conclusion on the consolidated interim financial statements based on our review.
We conducted our review in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether
anything has come to our attention that causes us to believe that the consolidated interim financial statements
are not prepared, in all material respects, in accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially less than those performed in an audit conducted in
accordance with International Standards on Auditing (New Zealand). Accordingly, we do not express an audit
opinion on these consolidated interim financial statements.
This description forms part of our Independent Review Report.
KPMG
Christchurch
23 March 2022
---
1H FY22
RESULTS
PRESENTATION
23 MARCH 2022
(Formerly Kathmandu Holdings Limited)
CONTENTS
1.INTRODUCING KMD BRANDS
2.FIRST HALF HIGHLIGHTS
3.GROUP FINANCIALS
4.RIP CURL
5.KATHMANDU
6.OBOZ
7.SECOND HALF FOCUS
8.APPENDICES
3
7
11
17
20
23
25
29
1H FY22 RESULTS PRESENTATION
2
INTRODUCING
KMD BRANDS
1H FY22 RESULTS PRESENTATION
3
SECTION 1
Inspiring people to explore and
love the outdoors.
1H FY22 RESULTS PRESENTATION
4
OUR PURPOSE
To be the leading family of global
outdoor brands - designed for
purpose, driven by innovation,
best for people and planet.
1H FY22 RESULTS PRESENTATION
5
OUR VISION
OWNER OF LEADING
GLOBAL OUTDOOR
ACTIVE BRANDS
1H FY22 RESULTS PRESENTATION
6
As a portfolio, our brands provide all the
fundamentals for strong long-term growth.
Technical and innovative products and practices;
brands with global reach and diversification;
capabilities across multiple geographies and
channels and a strong base of loyal, active
customers.
As the parent company, KMD Brands brings vision
and strategic guidance to enable group synergies
and to create more than the sum of the parts. Like
sharing expertise in technology, product research
and development, or leveraging operational
excellence in sourcing, supply chain and systems
to enable the best delivery of customer experience
across our brands.
FIRST HALF
HIGHLIGHTS
1H FY22 RESULTS PRESENTATION
7
SECTION 2
OUR STRATEGY
1H FY22 RESULTS PRESENTATION
8
BUILD GLOBAL
BRANDS
LEAD IN
ESG
ELEVATE
DIGITAL
LEVERAGE
OPERATIONAL
EXCELLENCE
Expand global footprint and
invest in world class brand and
customer experiences.
Invest in Group digital
platforms to deliver a truly
world-class, unified commerce
experience.
Deliver operational excellence
to all brands across shared
group support functions.
Demonstrate leadership across
environmental, social and
governance by transforming
business culture and mindset.
Maintain balance sheet flexibility to support organic growth and M&A opportunities.
DELIVERING ON OUR STRATEGY
1H FY22 RESULTS PRESENTATION
9
BUILD GLOBAL
BRANDS
ELEVATE
DIGITAL
LEVERAGE OPERATIONAL
EXCELLENCE
LEAD IN
ESG
President of KMD Brands Europe
appointed.
New Loyalty Management System
software in place across Rip Curl
and Kathmandu in ANZ.
Group appointments made in HR and
Commercial (Supply Chain, Property
and Procurement).
Group ESG focus areas determined
(refer to Appendix 1).
Sponsored the first ever WSL finals,
held in the USA, with the men's
event won by a Rip Curl surfer.
Opened 10 new owned / licensed
retail stores globally.
+14.5% online sales growth, with
penetration increasing to 13.8% of
DTC sales.
Rip Curl and Kathmandu now
operating the same Point of Sale
system across Australasia.
Expanded wetsuit take-back
program to all Rip Curl stores in
Australia.
Rip Curl ESG strategy finalised.
General Manager of International
appointed.
Kathmandu Europe Fall / Winter 22
sell-in complete. Forward orders in
line with expectations.
+46.4% online sales growth, with
penetration increasing to 21.2% of
sales.
Utilising Rip Curl infrastructure to
drive international expansion to
Europe and Canada.
Kathmandu won the Deloitte New
Zealand Top 200 Sustainable
Business Leadership award.
Demand for Oboz brand and
products has never been stronger.
Forward orders into FY23 support
the medium-term growth targets.
Following successful online launch,
sales starting to build.
Implementation of group business
intelligence tool into Oboz.
Employee volunteer program
established.
Q2 REBOUND AS STORES REOPEN
1H FY22 RESULTS PRESENTATION
10
Rip Curl store network more diversified globally, with lower store concentration
in Australasian locked down regions.
Q1 included 4,249 lost trading days due to COVID lockdowns compared to
3,700 in Q1 last year.
Q2 same store sales growth +3.0% following COVID lockdowns in Q1.
1.Same store sales are for the 26 full weeks ended 30 January 2022, and are measured at constant currency.
-9.4%
3.0%
-1.5%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
Q1Q21H
Same store sales
(incl. online)
64%
67%
80%
98%
100%
98%
-120%
-70%
-20%
30%
80%
130%
AugSepOctNovDecJan
Rip Curl COVID store closures
OpenClosed
47%
46%
66%
97%
99%
99%
-120%
-70%
-20%
30%
80%
130%
AugSepOctNovDecJan
Kathmandu COVID store closures
OpenClosed
-18.0%
15.4%
3.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
Q1Q21H
Same store sales
(incl. online)
Kathmandu heavily impacted by Q1 lockdowns, with higher store concentration
in Australasian locked down regions.
Q1 included 6,891 lost trading days due to COVID lockdowns compared to
2,432 in Q1 last year. For a 3 week period in Aug / Sep over 70% of the store
network was closed.
Upon reopening, Q2 same store sales growth rebounded to +15.4%,
demonstrating the lost sales opportunity in Q1.
GROUP FINANCIALS
1H FY22 RESULTS PRESENTATION
11
SECTION 3
PROFIT & LOSS
1H FY22 RESULTS PRESENTATION
12
SALES: Positive Q2 rebound as Kathmandu and Rip Curl stores in Australasia
reopened.
Oboz heavily impacted by temporary closure of Vietnam factories (supply now
recommenced).
GROSS MARGIN: 130 bps (1.3% of sales) below last year due to elevated
international freight costs, and increased clearance mix for the Kathmandu
brand.
OPERATING EXPENSES: Carefully controlled during store closures.
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded
from Underlying results. Refer to Appendix 3 for a reconciliation of Statutory to Underlying results.
2.1H FY22 NZD/AUD conversion rate 0.953 (1H FY21: 0.931), 1H FY22 NZD/USD conversion rate 0.694 (1H
FY21 0.684).
KATHMANDU GROUPStatutoryUnderlying
NZD $m
*2
1H FY221H FY221H FY21Var %
SALES
407.3407.3410.7(0.8%)
GROSS PROFIT234.9234.9242.5(3.1%)
Gross margin57.7%57.7%59.0%
OPERATING EXPENSES(178.8)(224.7)(194.3)15.7%
% of Sales
43.9%55.2%47.3%
EBITDA
56.110.248.2(78.8%)
EBITDA margin %13.8%2.5%11.7%
EBIT
0.9(5.5)33.4
EBIT margin %0.2%-1.3%8.1%
NPAT(5.5)(6.8)23.1
P&L reflects the short-term impact of COVID.
SALES
1H FY22 RESULTS PRESENTATION
13
21.6
24.8
30.3
36.5
48.1
6.1%
7.1%
8.8%
12.8%
17.4%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1H FY181H FY191H FY201H FY211H FY22
Online Sales ($m)
Online sales% of DTC sales
Online
Sales
(NZD $m)
YOY
Var %
% of DTC
1H FY22
Rip Curl20.514.5%13.8%
Kathmandu27.246.4%21.2%
Oboz0.4
AU & NZ
66%
North
America
18%
Europe
9%
Rest of World
7%
BY
REGION
DTC
Retail
Stores
56%
DTC
Online
12%
Wholesale
31%
Other
1%
BY
CHANNEL
Rip Curl
63%
Kathmandu
32%
Oboz
5%
BY
BRAND
Q1
COVID
impacted
Q1
COVID
impacted
Q2
rebound
Q2
rebound
202.9
229.0
363.7
410.7
407.3
1H FY181H FY19
incl. 6 months
of Oboz
1H FY20
incl. 3 months
of Rip Curl
1H FY211H FY22
Total Group Reported Sales ($m)
1.Direct to consumer (“DTC”) sales include all sales from retail stores, online sites and marketplaces.
2.All years include a full six months of both Kathmandu and Rip Curl online and total DTC sales for
comparability over time, including pre-acquisition.
Sales Mix 1H FY22
EBITDA
1H FY22 RESULTS PRESENTATION
14
Lockdowns in Australasia were
more severe than last year, and
less government support and rent
assistance was received, impacting
YOY EBITDA by c. $35m..
Q2 EBITDA above last
year reflecting
rebound in sales.
STRONG BALANCE SHEET
1H FY22 RESULTS PRESENTATION
15
The strong balance sheet position allows the Group to support organic growth
and M&A opportunities.
DEBT:Significant funding headroom of c. $250m.
Long-term leverage ratio target c. 0.5x Net Debt / EBITDA.
All debt facility covenants comfortably complied with.
INVENTORY: $20m above Jan 21, being managed to mitigate increased
production lead times and international shipping delays.
January inventory balances traditionally include stock build for key Rip Curl
Northern Hemisphere summer and Kathmandu winter seasons.
1.Key ratios calculated using 12 month underlying P&L measures.
2.Net Debt / EBITDA.
3.Net Debt / (Net Debt + Equity). At July 21, the net cash position means this measure is not meaningful (“n.m.”).
4.(EBITDA + Rent)/(Rent + Net Finance Costs excl. FX).
5.COGS / Average Inventories YOY.
Key Balance Sheet items and ratios
*1
NZD $mJan 22
Jul 21
Jan 21
Net cash / (Net interest bearing liabilities)
(48.6)
37.0
(10.1)
Leverage Ratio
*2
0.6x
-0.3x
0.1x
Net Debt to Equity
*3
5.6%
n.m.
1.3%
Fixed Charge Cover
*4
1.65x 1.98x
1.68x
Net working capital187.7
136.2
164.2
Inventories249.6
216.5
229.6
Curent trade and other receivables68.2
68.9
57.8
Current trade and other payables(130.1)
(149.2)
(123.2)
Net work ing capital % of sales
20.4% 14.8% 19.3%
Stock Turns
*5
1.61x 1.71x 1.49x
Equity813.7
818.9 781.0
INTERIM DIVIDEND UP 50%
1H FY22 RESULTS PRESENTATION
16
NZ 3.0 cents per share interim dividend, increased from NZ 2.0 cents last year.
Dividend will be fully franked for Australian shareholders.
Dividend will not be imputed for New Zealand shareholders.
Record date 15 June 2022, payment date 30 June 2022.
8.1
9.0
0.0
14.2
21.3
24.8
27.2
-
21.3
32.9
36.2
35.5
FY18FY19FY20FY21FY22
Dividends declared (NZD $m)
Interim4.04.0-2.03.0
Final11.012.0-3.0
Total15.016.0-5.0
Operating cash outflow a result of COVID lockdowns in Q1, and inventory build
to mitigate international supply challenges.
Q2 operating cash flow strongly positive.
Non-cash items include depreciation and amortisation of $15.7m.
1.Adjusted for impacts of adopting IFRS 16.
Ca sh Flow (NZD $m) 1H FY221H FY21
NPAT(5.5)22.3
Change in working capital(64.9)(17.6)
Non-cash items20.36.0
Adjusted operating cash flow
*1
(50.1)10.7
Key Line Items:1H FY221H FY21
Net interest paid (including facility fees)(1.8)(2.7)
Net income taxes paid(14.0)(13.9)
Capital expenditure(13.2)(12.2)
Dividends paid(21.7)-
RIP CURL
SECTION 4
1H FY22 RESULTS PRESENTATION
17
RIP CURL PROFIT & LOSS
1H FY22 RESULTS PRESENTATION
18
Total sales: +2.7% growth, with strong sales growth in online and wholesale
channels.
Europe and Hawaii in particular achieved strong sales growth.
North America was impacted by wetsuit shortages and port congestion.
Australia was impacted by store closures in Q1, rebounded in Q2.
Direct to consumer same store sales results (incl. online)
1
:
+2.1% adjusted for lockdowns
2
;
-1.5% overall.
Q2 same store sales growth +3.0%, with +20.1% same store sales growth
compared to Q2 FY20 (pre-COVID).
Online sales: +14.5% growth, with penetration increasing from 11.5% of DTC
sales in 1H FY21 to 13.8% of DTC sales in 1H FY22.
Wholesale sales: +16.1% growth, with less COVID interruption to the 1H FY22
sell-in period than last year.
Gross margin impacted by higher wholesale mix and elevated international
freight costs.
Continued investment in the long-term value of the brand, including sponsorship
of the first ever World Surf League (“WSL”) finals.
Depreciation includes notional amortisation of Rip Curl customer relationships
($2.5m in both 1H FY21 and 1H FY22).
AU & NZ
54%
North
America
21%
Europe
14%
Rest of World
11%
BY
REGION
DTC
Retail
Stores
50%
DTC
Online
8%
Wholesale
40%
Other
2%
BY
CHANNEL
1.Same store sales are for the 26 full weeks ended 30 January 2022, and are measured at constant currency.
2.Adjusted same store sales removes stores that were not able to open for a comparable period in either year
because of COVID closures.
RIP CURL Pre IFRS 16
NZD $m1H FY221H FY21Var %
SALES257.8251.12.7%
GROSS PROFIT152.7150.31.5%
Gross margin59.2%59.9%
OPERATING EXPENSES(118.9)(101.7)17.0%
% of Sales46.1%40.5%
EBITDA (underlying)
33.748.7(30.7%)
EBITDA margin %
13.1%19.4%
EBIT (underlying)26.441.4(36.4%)
EBIT margin %10.2%16.5%
INVESTING IN BRAND, CUSTOMER CONNECTION
AND SUSTAINABLE SOLUTIONS
1H FY22 RESULTS PRESENTATION
19
RIP CURL WSL FINALS
The most watched day in the history of professional
surfing.
The Rip Curl WSL finals in the USA drew a record
6.8 million live video views as surfing fans globally
witnessed the crowning of the 2021 male and
female world surfing champions. Rip Curl team rider
Gabriel Medina won his third world title, driving both
viewership and Rip Curl’s claim on professional
surfing in the USA.
INTERACTIVE BIKINI FIT GUIDE
Shot on the women behind the brand.
The Interactive Fit Guide featured real women and
real shapes, promoting size inclusivity and offering a
whole new shopping experience for bikinis both
instore and online.
SALTWATER CULTURE
Made with Sustainability in mind.
A preferred fibre list driving sustainable solutions
and collections featuring cotton through the Better
Cotton Initiative, recycled synthetics, Forest
Stewardship Council (FSC)-accredited viscose and
Bloom biobased EVA foam created from cleaning up
algae-polluted waterways.
KATHMANDU
SECTION 5
1H FY22 RESULTS PRESENTATION
20
KATHMANDU PROFIT & LOSS
1H FY22 RESULTS PRESENTATION
21
Total sales by market (at constant exchange rates):
Australia +4.3%, with 5,220 lost trading days in 1H FY22 vs 2,306 in 1H FY21.
New Zealand -4.0%, with 1,961 lost trading days in 1H FY22 vs 266 in 1H FY21.
Same store sales results (incl. online)
1
:
+15.9% adjusted for COVID lockdowns
2
;
+3.0% overall.
Strong Q2 rebound, with same store sales growth of +15.4% following Q1 lockdowns.
Kathmandu same store sales remained -21.1% below Q2 FY20 (pre-COVID) due to
continued restrictions on international travel and tourism.
Online sales: +46.4% growth, with penetration increasing from 14.4% of sales in 1H
FY21 to 21.2% of sales in 1H FY22.
Gross margin impacted by elevated clearance mix and elevated international freight
costs.
Second half gross margins are currently expected to be above last year based on
promotional plans, and expectations of international freight costs and currency
impacts.
Operating expenses carefully controlled through lockdowns, while continuing to
invest for long-term brand growth. Brand momentum is building as a result of a
renewed focus on marketing and product.
DTC
Retail
Stores
79%
DTC
Online
21%
BY
CHANNEL
1.Same store sales are for the 26 full weeks ended 30 January 2022, and are measured at constant currency.
2.Adjusted same store sales removes stores that were not able to open for a comparable period in either year
because of COVID closures.
KATHMANDUPre IFRS 16
NZD $m1H FY221H FY21Var %
SALES128.3129.3(0.8%)
GROSS PROFIT74.382.0(9.4%)
Gross margin57.9%63.4%
OPERATING EXPENSES(92.6)(81.4)13.7%
% of Sales72.2%63.0%
EBITDA (underlying)(18.3)0.5
EBITDA margin %-14.3%0.4%
EBIT (underlying)(26.3)(6.8)
EBIT margin %-20.5%-5.3%
KATHMANDU
1H FY22 RESULTS PRESENTATION
22
STRONG BRAND & CUSTOMER FUNDAMENTALS:
•Kathmandu dominates the category in AU and NZ; leading the market for top-of-mind awareness,
consideration, brand desire and digital visitation.
1
•NPS across ANZ of 76 across all customer groups, 2 million active Summit Club members.
INVESTING IN LONG TERM BRAND EQUITY:
•Summer campaign has built ‘all season’ perceptions with increased consideration for summer
contributing to building brand desire. Driving key brand differentiators, especially amongst millennial
consumer.
1
•Delivered over 72 million paid and owned digital impressions across ANZ, total editorial reach of 31
million with 91% overall positive social sentiment across paid and organic channels.
PRODUCT DRIVING YEAR-ROUND RELEVANCE:
•Successful new summer specific product franchises launched in graphic T’s, SUN-stopper, EVRY-day
shorts building on continued momentum in Camp.
•Autumn / Winter sees new franchise launches of ANY-time sweats and franchise extensions with
Heli-anoraks, and COZY fleece.
LEADING THE INDUSTRY IN GROUND-BREAKING SUSTAINABILITY INNOVATIONS
•Bio-down launches Winter 2022: breakthrough sustainability innovation, and winner of the Outdoor
Retailer Innovation Awards in January 2022.
1.Kantar Brand Health Report Aug 2021 to Jan 2022.
OBOZ
SECTION 6
1H FY22 RESULTS PRESENTATION
23
OBOZ PROFIT & LOSS
1H FY22 RESULTS PRESENTATION
24
1H FY22 supply challenges were unprecedented and transitory:
Wholesale and online sales heavily impacted by three-month COVID closure of
Vietnam factories and compounded by international freight delays.
Approximately 50% of 1H FY22 orders unable to be fulfilled.
Gross margin erosion due to international freight costs averaging more than
300% over historical average.
Operating expenses have been carefully managed, while continuing
investments to support brand momentum.
Depreciation includes notional amortisation of Oboz customer relationships
($0.1m in both 1H FY21 and 1H FY22).
Brand momentum remains strong:
Demand outstrips supply due to increased consumer focus on outdoor
experiences.
Forward orders into FY23 support the medium-term revenue growth targets.
Online performance indicates a significant growth opportunity.
OBOZPre IFRS 16
NZD $m1H FY221H FY21Var %
SALES21.230.4(30.2%)
GROSS PROFIT7.710.5(27.0%)
Gross margin36.1%34.5%
OPERATING EXPENSES(8.0)(6.7)20.3%
% of Sales37.9%22.0%
EBITDA (underlying)(0.4)3.8
EBITDA margin %-1.8%12.5%
EBIT (underlying)(0.8)3.6
EBIT margin %-3.7%11.8%
SECOND HALF
FOCUS
1H FY22 RESULTS PRESENTATION
25
SECTION 7
KEY 2H FY22 STRATEGIC PRIORITIES
1H FY22 RESULTS PRESENTATION
26
BUILD GLOBAL
BRANDS
ELEVATE
DIGITAL
LEVERAGE OPERATIONAL
EXCELLENCE
LEAD IN
ESG
Continue the global rollout of new
Group-wide loyalty management,
customer data, and online trading
platforms.
Merging of Canada and UK
fulfillment centres for all brands.
Group ESG strategy finalised for Oct
22 communication.
Science-based targets set.
Opening new stores in the key
growth markets of North America
and Europe.
Club Rip Curl loyalty scheme launch
in Australia in 2H FY22, with pre-
registrations underway.
Launch additional marketplace
channels in key markets.
Continued rollout of Group POS and
ERP systems, enabling Rip Curl to
leverage unified commerce
opportunities.
Progressing towards B-Corp
accreditation.
New global Autumn / Winter range
launches into market.
Planning for Kathmandu USA launch
underway.
Launch of Kathmandu online sites in
Europe and Canada.
Kathmandu Summit Club relaunch,
with exciting new value proposition.
Leverage enhanced functionality of
new merchandising, allocations and
replenishment software.
New Kathmandu Bio Down product,
winner of the Outdoor Retailer
Innovation Awards, will launch in 2H
FY22.
Oboz Vietnam based factories are
ramping up production. Supply to
gradually recover in 2H FY22.
Sawtooth X key product launch, in
market from April.
Building on positive launch of the
online platform, online sales
opportunity.
Progressing towards B-Corp
accreditation.
OUTLOOK
1H FY22 RESULTS PRESENTATION
27
BRANDS UPDATE
Rip Curl wholesale order books remain strongly above pre-COVID levels.
Kathmandu enters the traditionally strong winter season well prepared.
Oboz Vietnam based factories have reopened following COVID shutdowns and are ramping up production.
2H OUTLOOK
Second half gross margins are currently expected to be in line with last year based on promotional plans, and expectations ofinternational freight costs and currency
impacts.
COVID continues to cause ongoing disruption to our consumers and employees, particularly in the current New Zealand Omicron outbreak.
Some supply challenges are beginning to ease, while forward demand for our products remains at record levels.
The second half is traditionally the strongest cash generating period.
The Group is well capitalised, investing in the long-term international expansion of our global house of brands.
1.Adjusted same store sales removes stores that were not able to open for a comparable period in either year because of COVID closures.
QUESTIONS
1H FY22 RESULTS PRESENTATION
28
APPENDICES
1H FY22 RESULTS PRESENTATION
29
SECTION 8
APPENDIX 1: LEAD IN ESG
1H FY22 RESULTS PRESENTATION
30
OUR ESG COMMITMENT:
Totransform business culture through purpose-driven innovation and
collaboration. We adopt a mindset which acknowledges the interdependence of
our business with the wider communities we operate within and impact.
THREE KEY PILLARS OF THE GROUP ESG STRATEGY:
•Our people, our communities – positively impact the wellbeing of people
and places touched by our brands.
•Science based climate action –transition to a low carbon future with a
clearly defined methodology to reduce emissions in line with the Paris
Climate goals.
•Circular business models – foster and invest in innovation for circular
business systems throughout the value chain. Eliminate the linear take-
make-waste approach to business and protect biodiversity and natural
systems.
APPENDIX 2: BRANDS WITH GLOBAL REACH
1H FY22 RESULTS PRESENTATION
31
North AmericaRCKMDObozTotal
Owned stores31--31
Licensed stores15--15
Online sites1113
Wholesale doors1,927-1,9153,842
Europe RCKMDObozTotal
Owned stores20--20
Licensed stores18--18
Online sites11-2
Wholesale doors2,046261882,260
Total GroupRCKMDObozTotal
Owned stores162159-321
Licensed stores223--223
JV stores23--23
Online sites64111
Wholesale doors6,655262,1038,784
AsiaRC
Licensed stores50
JV stores23
Online sites1
Wholesale doors684
AU & NZRCKMDTotal
Owned stores107159266
Licensed stores18-18
Online sites224
Wholesale doors1,082-1,082
Africa/ Middle EastRC
Licensed stores25
South AmericaRC
Owned stores4
Licensed stores97
Online sites1
Wholesale doors916
RC Rip Curl | KMD Kathmandu | Oboz Oboz
KEY
APPENDIX 3: STATUTORY TO UNDERLYING
PROFIT & LOSS
1H FY22 RESULTS PRESENTATION
32
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded from Underlying results.
2.1H FY21 interest costs include $2.1m one-off bank facility underwriting costs ($1.5m net of tax).
GROUP1H FY221H FY21
IFRS 16TransactionOtherIFRS 16TransactionOther
NZD $mStatutoryLeases
*1
CostsAbnormals
UnderlyingStatutoryLeases
*1
Costs
*2
Abnormals
Underlying
SALES
407.3 - - - 407.3 410.7 - - - 410.7
GROSS PROFIT
234.9 - - - 234.9 242.5 - - - 242.5
Gross margin57.7%57.7%59.0%59.0%
OPERATING EXPENSES
(178.8) (45.9) - - (224.7) (147.2) (47.1) - - (194.3)
% of Sales43.9%55.2%35.8%47.3%
EBITDA (underlying)
56.1 (45.9) - - 10.2 95.4 (47.1) - - 48.2
EBITDA margin %13.8%2.5%23.2%11.7%
EBIT
0.9 (6.4) - - (5.5) 39.2 (5.8) - - 33.4
EBIT margin %0.2%-1.3%9.5%8.1%
NPAT
(5.5) (1.3) (6.8) 22.3 (0.7) 1.5 - 23.1
APPENDIX 4: SEGMENT NOTE
1H FY22 RESULTS PRESENTATION
33
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded from Underlying results.
1H FY22
1H FY21
SALES
(NZD $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
SALES per segment note257,834 128,277 21,193 - 407,304 251,080 129,265 30,368 - 410,713
SALES (Underlying)257,834 128,277 21,193 - 407,304 251,080 129,265 30,368 - 410,713
EBITDA
(NZD $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
EBITDA per segment note
52,657 8,503 (230) (4,808) 56,122 67,775 28,563 3,804 (4,787) 95,355
IFRS 16 Leases
*1
(18,925) (26,829) (149) - (45,904) (19,105) (28,014) - - (47,119)
Abnormals- - - - - - - - - -
EBITDA (Underlying)33,732 (18,326) (379) (4,808) 10,218 48,670 549 3,804 (4,787) 48,236
EBIT (NZD $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
EBIT per segment note28,649 (22,121) (834) (4,813) 881 42,589 (2,185) 3,572 (4,789) 39,187
IFRS 16 Leases
*1
(2,291) (4,135) 45 - (6,381) (1,140) (4,627) - - (5,767)
Abnormals- - - - - - - - - -
EBIT (Underlying)26,358 (26,256) (789) (4,813) (5,500) 41,449 (6,812) 3,572 (4,789) 33,420
APPENDIX 5: BALANCE SHEET
1H FY22 RESULTS PRESENTATION
34
Balance Sheet (NZD $m)Jan 22 Jul 21 Jan 21
Inventories249.6 216.5 229.6
Property, plant and equipment79.3 79.3 82.6
Right of Use Asset (IFRS 16)252.3 242.7 238.2
Intangible assets699.2 688.6 681.2
Other assets106.5 95.5 71.2
Total assets (excl. cash)1,386.9 1,322.6 1,302.8
Net interest bearing liabilities and cash(48.6) 37.0 (10.1)
Lease Liability (IFRS 16)(286.8) (279.3) (276.1)
Other non-current liabilities(105.4) (101.0) (96.3)
Current liabilities(132.4) (160.4) (139.3)
Total liabilities (net of cash)(573.2) (503.7) (521.8)
Net assets813.7 818.9 781.0
IMPORTANT NOTICE AND DISCLOSURE
1H FY22 RESULTS PRESENTATION
35
This presentation prepared by KMD Brands Limited (the “Company” or the “Group”) (ASX/NZX:KMD) provides additional comment on the financial statements of the Company, and
accompanying information released to the market. As such, it should be read in conjunction with the explanations and views inthose documents.
This presentation is not a prospectus, investment statement or disclosure document, or an offer of shares for subscription, or sale, in any jurisdiction.Past performance is not indicative of
future performance and no guarantee of future returns is implied or given.
The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation
has been prepared without taking into account the investment objectives, financial situation or specific needs of any particularperson. Potential investors must make their own independent
assessment and investigation of the information contained in this presentation and should not rely on any statement or the adequacy or accuracy of the information provided.
This presentation includes certain “forward-looking statements” about the Company and the environment in which the Company operates. Forward-looking information is inherently uncertain
and subject to contingencies, known and unknown risks and uncertainties and other factors, many of which are outside of the Company’s control, and may involve significant elements of
subjective judgement and assumptions as to future events which may or may not be correct. A number of important factors couldcause actual results or performance to differ materially from
the forward-looking statements. No assurance can be given that actual outcomes or performance will not materially differ from the forward-looking statements. The forward-looking
statements are based on information available to the Company as at the date of this presentation.
To the maximum extent permitted by law, none of the Company, its subsidiaries, directors, employees or agents accepts any liability, including, without limitation, any liability arising out of
fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the
accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects, statement or returns contained in this presentation. Such forecasts,
prospects, statement or returns are by their nature subject to significant uncertainties and contingencies. Actual future eventsmay vary from those included in this presentation.
The statements and information in this presentation are made only as at the date of this presentation unless otherwise statedand remain subject to change without notice.Some of the
information in this presentation is based on unaudited financial data which may be subject to change. Information in this presentation is rounded to the nearest hundred thousand dollars,
whereas the financial statements of the Company are rounded to the nearest thousand dollars. Rounding differences may arise in totals, both dollars and percentages.
All intellectual property, proprietary and other rights and interests in this presentation are owned by the Company.
All currency amounts in this presentation are in NZD unless stated otherwise.
---
Distribution Notice
KMD BRANDS LIMITED W kmdbrands.com
Section 1: Issuer information
Name of issuer KMD Brands Limited (formerly Kathmandu Holdings Limited)
Financial product name/description Ordinary Shares
NZX ticker code KMD
ISIN (If unknown, check on NZX website) NZKMDE0001S3
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 15/06/2022
Ex-Date (one business day before the
Record Date)
14/06/2022
Payment date (and allotment date for
DRP)
30/06/2022
Total monies associated with the
distribution
1
$21,270,041.52
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.03000000
Gross taxable amount
3
$0.03000000
Total cash distribution
4
$0.03000000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.00000000
Section 3: Imputation credits and Resident Withholding Tax
5
Is the distribution imputed No imputation
If fully or partially imputed, please state
imputation rate as % applied
6
N/A
Imputation tax credits per financial
product
N/A
Resident Withholding Tax per financial
product
$0.00990000
1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction
of Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution
is fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not
constitute advice as to whether or not RWT needs to be withheld.
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.
Distribution Notice
KMD BRANDS LIMITED W kmdbrands.com
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
Start date and end date for determining
market price for DRP
Date strike price to be announced (if not
available at this time)
Specify source of financial products to be
issued under DRP programme (new issue
or to be bought on market)
DRP strike price per financial product
Last date to submit a participation notice
for this distribution in accordance with
DRP participation terms
Section 5: Authority for this announcement
Name of person
authorised to make this
announcement
Frances Blundell
Contact person for this announcement Frances Blundell
Contact phone number +64 3 968 6110
Contact email address companysecretary@kmdbrands.com
Date of release through MAP
Wednesday, 23 March 2022
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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