1H FY2023 Interim Results
Results announcement
KMD BRANDS LIMITED W kmdbrands.com
Results for announcement to the market
Name of issuer KMD Brands Limited
Reporting Period 6 months to 31 January 2023
Previous Reporting Period 6 months to 31 January 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$547,924 34.5%
Total Revenue $547,924 34.5%
Net profit/(loss) from continuing
operations
$13,977 352.2%
Total net profit/(loss) $13,977 352.2%
Interim Dividend
Amount per Quoted Equity
Security
$0.03000000
Imputed amount per Quoted
Equity Security
NIL
Record Date 15 June 2023
Dividend Payment Date 30 June 2023
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$0.14 $0.14
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
The interim results are based on accounts which have been subject to
review. Refer to accompanying unaudited financial statements.
Authority for this announcement
Name of person
authorised to
make this announcement
Frances Blundell
Contact person for this
announcement
Frances Blundell
Contact phone number +64 3 968 6110
Contact email address companysecretary@kmdbrands.com
Date of release through MAP
Wednesday, 22 March 2023
Unaudited financial statements accompany this announcement.
---
KMD BRANDS LIMITED W kmdbrands.com
KMD Brands Limited
ASX / NZX / Media announcement
22 March 2023
KMD Brands returns to growth in 1H FY23
(All amounts in NZ$ unless otherwise stated)
KMD Brands Limited (ASX/NZX: KMD, “KMD” or the “Company”) is pleased to announce its results for the
six months ended 31 January 2023 (“1H FY23”).
1H FY23 key highlights (vs 1H FY22):
• Sales growth up 34.5% to $547.9 million, a record first half for KMD Brands
• Continued sales growth for Rip Curl, strong Australian recovery for Kathmandu, and record first half
sales for Oboz
• Gross margin remains resilient, increasing +100 bps (1.0% of sales)
• Underlying EBITDA
1
of $45.3 million (1H FY22: $10.2 million) with group underlying EBITDA margin
1
improving on a rolling 12-month basis
• Statutory NPAT of $14.0 million; Underlying NPAT
1
of $16.5 million (1H FY22: loss of $5.1 million)
• Balance sheet remains strong, with expectation of inventory unwind to underpin strong cashflow
generation in the second half
• Interim dividend of 3 cents per share declared (fully franked for Australian shareholders)
Commenting on the 1H FY23 results, Group CEO & Managing Director Michael Daly said:
“We are delighted with the results our team has delivered in 1H FY23, building on the strong momentum of
the previous six months. We achieved record sales results for the Group, highlighting the strength of our
global brands.”
"For the first time since Rip Curl was acquired, the Group has experienced a full 12 months of trade without
significant interruption from the COVID pandemic, which resulted in group sales of over $1 billion.”
"Despite uncertainties in consumer outlook, all three of our brands – Rip Curl, Kathmandu, and Oboz –
delivered strong sales growth in the half, and as a group we have improved our gross margin.”
“We were also very proud to recently announce that KMD Brands and all three of its brands are now
Certified B Corporations, becoming one of the first multinational companies in Australia and New Zealand to
have all its brands individually certified. This is testament to our commitment to setting ourselves high
standards of social and environmental impact, accountability, and transparency.”
“With a healthy balance sheet, and expectations for strong cash flow generation in the second half, we are in
an excellent position to execute on our growth strategy through expanding our global footprint, investing in
digital platforms, leveraging operational excellence, and leading the industry through sustainability and
innovation.”
1
Excluding the impact of IFRS 16 and notional amortisation of Rip Curl and Oboz customer relationships
KMD BRANDS LIMITED W kmdbrands.com
Group financial performance
Statutory Underlying
2
NZ$ million
3
1H FY23 1H FY23 1H FY22 Var %
Sales 547.9 547.9 407.3 34.5%
Gross Profit 321.8 321.8 234.9 37.0%
Gross margin 58.7% 58.7% 57.7%
Operating Expenses (230.9) (276.4) (224.7) 23.0%
EBITDA 90.8 45.3 10.2 342.5%
EBIT 31.4 29.3 (3.0)
NPAT 14.0 16.5 (5.1)
The 1H FY23 Group results were boosted by record first half sales, cycling Australasian COVID lockdowns
last year, and supported by the return of international travel and tourism. Although the Group continued to
experience elevated international freight costs and raw material cost pressures, gross margin increased by
100 bps to 58.7%.
Operating expenses reflect continued investment to support brand expansion, while leveraging sales growth.
1H FY23 operating expenses are 50.4% of sales, with a strong sales recovery post-COVID lockdowns last
year. FY23 full year operating expenses are expected to be c. 48% of sales, with ongoing initiatives to further
reduce annualised operating costs by up to 2% of sales for FY24.
Rip Curl: sales growth across all channels
Underlying
2
NZ$ million 1H FY23 1H FY22 Var%
Sales 306.4 257.8 18.8%
EBITDA 37.6 33.7 11.4%
EBIT 31.5 28.8 9.4%
Rip Curl’s sales results were strengthened by growth across all channels, with total sales up 18.8% to
$306.4 million. Direct-to-consumer sales growth was particularly strong in Australasia after COVID
lockdowns last year, with Hawaii also performing strongly off the back of a return of international travel.
Wholesale sales are showing resilience with 2.2% growth at constant exchange rates, despite softening
wetsuit demand from record highs, and strategic destocking from retailers. Whilst online traffic reduced year
on year, online sales remain significantly above pre-COVID levels. The direct-to-consumer (DTC) channel,
including owned retail stores and online, generated same store sales growth of 13.9%.
EBITDA was up 11.4% to $37.6 million, moderated by the impact of channel mix and freight costs on gross
margin, and increased distribution costs.
Kathmandu: strong Australian recovery
Underlying
2
NZ$ million 1H FY23 1H FY22 Var %
Sales 194.0 128.3 51.2%
EBITDA 12.3 (18.3) -
EBIT 2.7 (26.3) -
Kathmandu’s performance in the first half of FY23 was attributed to a strong recovery in the Australian
market following COVID lockdowns last year. Total sales were up 51.2% to $194.0 million, driven by a strong
rebound in Australia (+59%) after lockdowns, the return of domestic and international tourism in New
2
Excluding the impact of IFRS 16 and notional amortisation of Rip Curl and Oboz customer relationships
3
1H FY23 NZD/AUD conversion rate 0.910 (1H FY22: 0.953), 1H FY23 NZD/USD conversion rate 0.612 (1H FY22 0.694)
KMD BRANDS LIMITED W kmdbrands.com
Zealand (+22%), and international sales of $1.4 million, which includes first deliveries to select new
wholesale customers in Europe and Canada.
Online sales normalised at c. $26 million following lockdowns last year, which represents 13.6% of
DTC sales, and continues to be significantly above pre-COVID levels.
Gross margin increased +580 bps, driven by currency benefit, and the deliberate strategy to carefully
moderate the historic “high-low” pricing model.
Oboz: underlying profit recovery following last year’s supply challenges
Underlying
2
NZ$ million 1H FY23 1H FY22 Var %
Sales 47.5 21.2 124.3%
EBITDA 2.9 (0.0) -
EBIT 2.5 (0.4) -
Oboz wholesale and online sales performed strongly in the first half, demonstrating a successful recovery
following last year’s significant supply challenges, as well as strong growth in the new online sales channel
which increased the mix of DTC sales.
Gross margin decreased 50 bps due to elevated international freight costs over the last twelve months,
noting that freight costs are now trending towards historical levels. Operating expenses reflect investment in
brand and product teams, which is expected to be leveraged as sales growth continues.
Maintaining a strong balance sheet
As at 31 January 2023, the Group had a net debt position of $84.9 million with significant funding headroom
over $200 million.
The higher inventory balance reflects investments in Oboz inventory to meet 2H forward orders, as well as
investments in wetsuit raw material for perennial styles to mitigate international supply challenges. The
Company expects inventory to be $270 to $280 million by the end of FY23, depending on currency
translation and timing of goods in transit. Inventory obsolescence provisions represent 1.4% of gross
inventory on hand, 50 bps below July 2022.
Operating cash flows were affected by the temporary inventory build. It is expected that an unwind of
inventory will underpin the traditionally strong operating cashflow generation in the second half.
The Company’s strong balance sheet and positive growth outlook led Directors to declare an interim
dividend of 3.0 cents per share (fully franked for Australian shareholders). The record date for this dividend is
15 June 2023, and the payment date is 30 June 2023.
Dedicated to leading in ESG
Commenting on the Group’s sustainability initiatives, Mr Daly said: “We are pleased to have made significant
progress on ESG initiatives during the half as we continue to work towards becoming a leader in ESG across
all of our businesses.”
“In addition to the recent B Corp announcement for all of our brands, the Group was also recognised with the
Deloitte New Zealand Top 200 Sustainable Business Leadership award. We have also submitted science-
based targets to SBTi, with 2030 emission reduction goals aligned to the Paris Climate agreement.”
KMD BRANDS LIMITED W kmdbrands.com
Positive 2H FY23 outlook
Positive first half sales momentum has continued through February, with continued strong diversified sales
growth across brands, channels, and key international regions. Total group sales were up 31.9% in February
2023 compared to February 2022, noting that February is not a significant trading month.
Commenting on the outlook for the Group, Mr Daly said:
“Positive direct-to-consumer sales trends have continued into the second half, and we are well positioned to
continue to benefit from the return of international travel and tourism. Products across all three of our brands
appeal to a diverse range of consumer interests, ages, and demographics.”
“While the consumer outlook remains uncertain, with high global inflation and rising interest rates expected
to impact consumer demand, we remain cautiously optimistic. The Group is well capitalised and will continue
to invest in the long-term global expansion of all 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 (Wednesday, 22 March 2023).
To pre-register and avoid a queue when calling, please follow this link:
https://event.webcasts.com/starthere.jsp?ei=1598790&tp_key=0d8b1335e6
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 445053 to the operator.
Australia Toll Free: 1800 590 693
New Zealand Toll Free: 0800 423 972
United States: 800 289 0459
France: 0805 119 536
United Kingdom: 0200 279 0424
The webcast will be available on the KMD Brands investor website following the call.
This announcement has been authorised for release to NZX / ASX by the Board of Directors of KMD Brands
Limited.
- ENDS -
For further information, please contact:
Investors
Eric Kuret, Automic Markets
P: +61 417 311 335
E: eric.kuret@automicgroup.com.au
Media
Helen McCombie, Citadel-MAGNUS
P: + 61 2 8234 0103
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KMD BRANDS LIMITED
INTERIM REPORT 2023
KMD BRANDS LIMITED - INTERIM REPORT 2023
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 2023.
Review of Operations
Group sales of $547.9 million for the interim period are a record first half result with the Group cycling over 11,000 lost trading days
from Australasian COVID lockdowns last year. The record sales result was further supported by an encouraging return of
international travel and tourism.
Although the Group continued to experience elevated international freight costs and raw material cost pressures these pressures
were offset by favorable exchange rates and careful moderation of the Kathmandu “high-low” pricing model. Gross margin was
58.7% for the period an increase of 100 basis points.
Increased operating expenses reflect continued investment to support brand expansion and leveraging the full reopening of our
store network for the period. Operating expenses for the period are 50.4% of sales, demonstrating operating leverage year-on-year.
As at 31 January 2023, the Group had a net debt position of $84.9 million with significant funding headroom over $200 million.
The higher inventory balance reflects investments in Oboz inventory to meet second half forward orders, as well as investments in
wetsuit raw material for perennial styles to mitigate international supply challenges. Inventory obsolescence provisions represent
1.4% of gross inventory on hand, 50 basis points below July 2022.
Operating cash flows were affected by the temporary inventory build. It is expected that an unwind of inventory will underpin the
traditionally strong operating cashflow generation in the second half.
The Group’s strong balance sheet and positive growth outlook resulted in a declared interim dividend of 3.0 cents per share (fully
franked for Australian shareholders).
A further review of the operations of the Group is set out in the accompanying Company’s media release of 22 March 2023
Seasonality
Due to the seasonal nature of the Group’s activities, the activities in the second half of the year historically provide a larger portion of
the sales and net profit for the full year.
Impact of COVID-19
The Group has continued to review the impact on the business from the COVID-19 situation. During the comparative period, trade at
a number of the Group’s stores was disrupted by COVID-19 related travel restrictions and government mandated lockdowns and
closures. Although these restrictions were relaxed during the half year the group continued to be disrupted by staff shortages. Refer
to note 4 of the Financial Statements for further disclosure about the impact of COVID-19.
Signed in accordance with a resolution of the Directors:
David Kirk Michael Daly
Director Director
KMD BRANDS LIMITED - INTERIM REPORT 2023
3
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Sales revenue 5 547,924 407,304 979,802
Cost of sales (226,173) (172,359) (403,069)
Gross profit 321,751 234,945 576,733
Other income 5 622 3,568 9,857
Selling expenses 6 (138,036) (99,761) (231,460)
Administration and general expenses 3, 6 (93,492) (82,604) (175,196)
(230,906) (178,797) (396,799)
Earnings before interest, tax, depreciation, and amortisation 90,845 56,148 179,934
Depreciation and amortisation 3, 6 (59,474) (55,317) (112,516)
Earnings before interest and tax 31,371 831 67,418
Finance income 291 716 394
Finance expenses (10,472) (6,447) (14,187)
Finance costs - net 6 (10,181) (5,731) (13,793)
Profit/(Loss) before income tax 21,190 (4,900) 53,625
Income tax expense 3 (7,213) (641)(16,797)
Profit/(Loss) after income tax 13,977 (5,541) 36,828
Profit/(Loss) for the period attributable to:
Shareholders of the company 13,159 (5,919) 35,952
Non-controlling interest 818 378 876
Other comprehensive income/(loss) that may be recycled through profit and loss:
Movement in cash flow hedge reserve 1,797 6,391 12,671
Movement in foreign currency translation reserve (12,638) 16,121 36,188
Other comprehensive (loss)/income for the period, net of tax (10,841) 22,512 48,859
Total comprehensive income for the period 3,136 16,971 85,687
Total comprehensive income for the period attributable to:
Owners of the company 2,412 16,547 84,576
Non-controlling interest 724 424 1,111
Basic earnings per share 1.9 cps (0.8) cps 5.1 cps
Diluted earnings per share 1.8 cps (0.8) cps 5.0 cps
Weighted average basic ordinary shares outstanding (‘000) 711,220 709,001 709,001
Weighted average diluted ordinary shares outstanding (‘000) 716,072 715,331 717,266
KMD BRANDS LIMITED - INTERIM REPORT 2023
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 2021 626,380 1,341 (29,462) 2,637 (47) 210,036 4,070 814,955
Profit after tax - - - - - 35,952 876 36,828
Other comprehensive income - 12,671 35,953 - - - 235 48,859
Dividends paid - - - - - (42,540) - (42,540)
Issue of share capital - - - - - - - -
Share based payment expense - - - 914 - - - 914
Lapsed share options - - - (77) - 77 - -
Deferred tax on share-based
payment transactions
- - - (309) - - - (309)
Amounts transferred to initial
carrying amount of hedged items
- (7,794) - - - - - (7,794)
Dividends paid to non-controlling
interest
- - - - - - (455) (455)
Balance as at 31 July 2022 626,380 6,218 6,491 3,165 (47) 203,525 4,726 850,458
Profit after tax - - - - - 13,159 818 13,977
Other comprehensive income - 1,797 (12,544) - - - (94) (10,841)
Dividends paid - - - - - (21,340) - (21,340)
Issue of share capital 2,699 - - (2,699) - - - -
Share based payment expense - - - 925 - - - 925
Lapsed share options - - - - - - - -
Deferred tax on share-based
payment transactions
- - - 22 - - - 22
Amounts transferred to initial
carrying amount of hedged items
- (10,421) - - - - - (10,421)
Dividends paid to non-controlling
interest
- - - - - - (691) (691)
Balance as at 31 January 2023 629,079 (2,406) (6,053) 1,413 (47) 195,344 4,759 822,089
KMD BRANDS LIMITED - INTERIM REPORT 2023
5
CONSOLIDATED BALANCE SHEET
Note Unaudited
As at
31 January
2023
Unaudited
As at
31 January
2022
Audited
As at
31 July
2022
NZ$’000 NZ$’000 NZ$’000
ASSETS
Current assets
Cash and cash equivalents
85,620 58,278 70,810
Trade and other receivables
3, 8
90,630 69,204 105,526
Inventories
318,757 249,603 295,522
Derivative financial instruments 11 2,174 9,133 9,936
Current tax asset 3,401 11,099 3,640
Other current assets 2,487 2,347 2,434
Total current assets 503,069 399,664 487,868
Non-current assets
Trade and other receivables 8 1,774 1,576 1,588
Property, plant, and equipment 77,900 79,295 79,243
Intangible assets 3 704,833 697,811 719,322
Deferred tax assets 3 16,490 15,729 14,078
Right-of-use assets 9 264,705 252,340 250,372
Total non-current assets 1,065,702 1,046,751 1,064,603
Total assets 1,568,771 1,446,415 1,552,471
LIABILITIES
Current liabilities
Trade and other payables 3 165,030 131,534 194,034
Derivative financial instruments 11 4,607 - -
Current tax liabilities 1,313 2,281 1,816
Current lease liability 9 76,674 74,809 75,293
Total current liabilities 247,624 208,624 271,143
Non-current liabilities
Non-current trade and other payables 3 17,078 18,820 17,246
Interest bearing liabilities 10 170,496 106,838 110,881
Deferred tax 90,682 90,285 93,449
Non-current lease liability 9 220,802 212,032 209,294
Total non-current liabilities 499,058 427,975 430,870
Total liabilities 746,682 636,599 702,013
Net assets 822,089 809,816 850,458
EQUITY
Issued capital 629,079 626,380 626,380
Reserves (7,093) (3,536) 15,827
Retained earnings 3 195,344 182,924 203,525
Non-controlling interest 4,759 4,048 4,726
Total equity 822,089 809,816 850,458
KMD BRANDS LIMITED - INTERIM REPORT 2023
6
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Cash was provided from:
Receipts from customers 563,109 413,710 955,968
Government grants received 188 2,948 3,407
Interest received 291 140 394
Income tax received 509 - 448
564,097 416,798 960,217
Cash was applied to:
Payments to suppliers and employees 3 517,264 405,287 843,605
Income tax paid 7,923 13,982 22,181
Interest paid 8,986 6,173 12,623
534,173 425,442 878,409
Net cash inflow / (outflow) from operating activities 29,924 (8,644) 81,808
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of property, plant, and equipment - - 4
- - 4
Cash was applied to:
Purchase of property, plant, and equipment 11,311 8,929 21,567
Purchase of intangibles 3 3,533 3,754 11,266
14,844 12,683 32,833
Net cash (outflow) from investing activities (14,844) (12,683) (32,829)
Cash flows from financing activities
Cash was provided from:
Proceeds of borrowings 110,848 24,000 99,619
110,848 24,000 99,619
Cash was applied to:
Dividends paid 22,031 21,716 42,995
Repayment of borrowings 45,811 24,000 99,619
Repayment of lease liabilities 41,726 41,896 82,265
109,568 87,612 224,879
Net cash inflow / (outflow) from financing activities 1,280 (63,612) (125,260)
Net increase / (decrease) in cash held 16,360 (84,939) (76,281)
Opening cash and cash equivalents 70,810 142,614 142,614
Effect of foreign exchange rates (1,550) 603 4,477
Closing cash and cash equivalents 85,620 58,278 70,810
KMD BRANDS LIMITED - INTERIM REPORT 2023
7
RECONCILIATION OF NET PROFIT/(LOSS) AFTER TAXATION WITH CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Profit/(Loss) after income tax 13,977 (5,541) 36,828
Movement in working capital:
(Increase) / decrease in trade and other receivables 13,098 1,883 (27,953)
(Increase) / decrease in inventories (29,727) (29,973) (66,555)
(Increase) / decrease in other current assets (101) - 9
Increase / (decrease) in trade and other payables (25,256) (21,698) 31,736
Increase / (decrease) in tax liability (271) (15,562) (8,518)
(42,257) (65,350) (71,281)
Add non-cash items:
Depreciation of property, plant, and equipment 11,272 10,227 22,572
Amortisation of intangibles 7,408 5,566 12,339
Depreciation of right-of-use assets 40,794 39,524 77,605
Impairment of assets - - 940
Foreign currency translation of working capital balances (2,503) 3,327 (2,294)
Movement in deferred taxation 71 2,221 3,580
Employee share-based remuneration 925 1,205 914
Loss on disposal of property, plant, and equipment and intangibles 237 177 605
58,204 62,247 116,261
Cash inflow/(outflow) from operating activities 29,924 (8,644) 81,808
KMD BRANDS LIMITED - INTERIM REPORT 2023
8
1 GENERAL INFORMATION
KMD Brands Limited (the Company) 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, Central Christchurch, Christchurch.
These consolidated interim financial statements have been approved for issue by the Board of Directors on 22 March 2023,
and have been reviewed, not audited.
2 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These general-purpose financial statements for the six months ended 31 January 2023 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 KMD Brands Limited for
the year ended 31 July 2022 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.
The consolidated interim financial statements are presented in New Zealand dollars, which is the Group’s presentation
currency.
There have been no changes to the Group’s climate change risk since 31 July 2022.
3 ACCOUNTING POLICIES
Other than 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 KMD Brands Limited for
the year ended 31 July 2022.
Consideration of the IFRS Interpretations Committee (‘IFRIC’) agenda decision
During the year ended 31 July 2022 the Group revised its accounting policy in relation to configuration and customization costs
incurred in implementing Software-as-a-Service (SaaS) cloud computing arrangements. The Group’s previous accounting
policy was 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 31 January 2022 comparatives presented in these financial statements
have been restated to reflect these changes.
A summary of the impact of the change in accounting policy on the Group’s consolidated interim financial statements is
provided below.
KMD BRANDS LIMITED - INTERIM REPORT 2023
9
Previously
reported
Change in
accounting
policy
Restated
NZ$’000 NZ$’000 NZ$’000
Consolidated Statement of Comprehensive Income
Six months ended 31 January 2022
Administration and general expenses
(82,630) 26 (82,604)
Depreciation and amortisation
(55,241) (76) (55,317)
(Loss) before income tax
(4,850) (50) (4,900)
Income tax expense
(655) 14 (641)
(Loss) after income tax
(5,505) (36) (5,541)
Consolidated Balance Sheet
As at 31 January 2022
Current trade and other receivables
68,186 1,018 69,204
Intangible assets
699,178 (1,367) 697,811
Deferred tax assets
14,200 1,529 15,729
Total assets
1,445,235 1,180 1,446,415
Current trade and other payables
130,105 1,429 131,534
Non-current trade and other payables
15,137 3,683 18,820
Total liabilities
631,487 5,112 636,599
Retained earnings
186,856 (3,932) 182,924
Total Equity
813,748 (3,932) 809,816
Consolidated Statement of Cash Flows
Six months ended 31 January 2022
Payments to suppliers and employees
404,812 475 405,287
Net cash (outflow) from operating activities
(8,169) (475) (8,644)
Purchase of intangibles
4,229 (475) 3,754
Net cash (outflow)/inflow from investing activities
(13,158) 475 (12,683)
Other comprehensive income
Other comprehensive income reported in the consolidated statement of comprehensive income for the period ended 31
January 2022 has been restated to remove the component of cash flow hedge reserve which was transferred to the initial
carrying value of the hedged items as separately disclosed in the statement of changes in equity ($1,899,000). The
restatement is limited to the statement of other comprehensive income and has no impact on profit, cash flow or the balance
sheet of the Group.
Use of non-GAAP disclosures
At times non-GAAP disclosures have been used in the consolidated financial statements. These disclosures have been
included as they are key measurement criteria on which the Group and operating segments are reviewed by the Group Chief
Executive Officer, Group Executive Management team and the Board of Directors. The following non-GAAP measures are
relevant to the understanding of the Group's financial performance:
• Earnings before interest, tax, depreciation and amortisation (EBITDA) represents earnings before income taxes
excluding interest income, interest expense, depreciation, and amortisation, as reported in the financial statements.
• Earnings before interest and tax (EBIT) represents EBITDA less depreciation and amortisation.
• Net debt represents cash and cash equivalents less interest-bearing liabilities. Net debt does not include lease
liabilities.
Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be
KMD BRANDS LIMITED - INTERIM REPORT 2023
10
comparable to similar financial information presented by other entities. The non-GAAP information within the consolidated
financial statements is subject to review procedures.
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
The comparative half year period was impacted by COVID-19, with local and global restrictions on movement, travel and
gatherings resulting in a sustained reduction in footfall. During the comparative period stores across Australia and New Zealand
were significantly impacted by government mandated lockdowns and closures.
As outlined in the 2022 Annual Integrated Report, there continues to be uncertainties due to the COVID-19 pandemic that may
affect the Group’s ability to achieve future forecasts. Despite this 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 year and, based on the current cash flow forecasts, the
Group expects to remain compliant with all covenants 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 $84,876,000 (2022:
$48,560,000) and liquidity of $216,300,000 (2022: $247,193,000) at 31 January 2023 (refer note 10), the financial statements
continue to be prepared on a going concern basis.
5 REVENUE
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Sale of goods
540,319 401,722 969,161
Royalty revenue
7,166 5,290 10,047
Commission revenue
439 292 594
547,924 407,304 979,802
Other income includes government grants received by group entities in response to the impact of COVID-19 of nil (2022:
$2,948,000).
6 EXPENSES
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Profit/(Loss) before tax includes the following expenses:
Depreciation of property, plant, and equipment
11,272 10,227 22,572
Amortisation
7,408 5,566 12,339
Depreciation of right-of-use assets
40,794 39,524 77,605
Impairment expense
- - 940
Employee entitlements expense
119,129 94,591 201,261
Rental expense
14,536 7,225 21,122
KMD BRANDS LIMITED - INTERIM REPORT 2023
11
Finance costs
Interest income
(291) (140) (394)
Interest expense on interest bearing liabilities
3,282 629 1,809
Interest on lease liabilities
5,098 4,269 8,476
Other finance costs
1,586 1,549 3,057
Net exchange loss/(gain) on foreign currency
506 (576) 845
10,181 5,731 13,793
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 comparative information have been restated to include the Software-as-a-Service
restatement described in note 3.
- Rip Curl - designer, manufacturer, wholesaler and retailer of surfing equipment and apparel.
- Kathmandu - designer, retailer and wholesaler apparel, footwear and equipment for outdoor travel and adventure.
- Oboz - designer, wholesaler and online retailer of 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.
The default basis of allocating shared costs is percentage of revenue with other bases being used where appropriate.
31 January 2023 Rip Curl Kathmandu Oboz Corporate Total
NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000
Total segment sales 306,424 193,968 50,232 - 550,624
Sales to internal customers - - (2,700) - (2,700)
Sales to external customers 306,424 193,968 47,532 - 547,924
EBITDA 57,538 37,570 3,101 (7,364) 90,845
Depreciation and amortisation (27,033) (31,650) (791) - (59,474)
EBIT 30,505 5,920 2,310 (7,364) 31,371
Income tax expense (7,509) (2,489) (684) 3,469 (7,213)
Total segment assets 767,654 609,529 176,851 14,737 1,568,771
Total assets include:
Non-current assets 475,672 473,103 113,535 3,392 1,065,702
Additions to non-current assets 41,313 30,923 897 - 73,133
Total segment liabilities 309,613 304,125 28,646 104,298 746,682
KMD BRANDS LIMITED - INTERIM REPORT 2023
12
31 January 2022 - Restated Rip Curl Kathmandu Oboz Corporate Total
NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000
Total segment sales 257,834 128,277 21,255 - 407,366
Sales to internal customers - - (62) - (62)
Sales to external customers 257,834 128,277 21,193 - 407,304
EBITDA 52,657 8,529 109 (5,147) 56,148
Depreciation and software amortisation (24,008) (30,700) (604) (5) (55,317)
EBIT 28,649 (22,171) (495) (5,152) 831
Income tax expense (9,129) 7,375 127 986 (641)
Total segment assets 653,111 659,951 127,107 6,246 1,446,415
Total assets include:
Non-current assets 443,681 490,445 112,612 13 1,046,751
Additions to non-current assets 23,729 32,619 769 - 57,144
Total segment liabilities 251,249 261,610 19,438 104,302 636,599
8 TRADE AND OTHER RECEIVABLES
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Current
Trade receivables
68,445 53,594 87,626
Allowance for expected credit losses
(6,061) (5,193) (5,964)
Prepayments
15,597 13,433 12,928
Other receivables
12,649 7,370 10,936
90,630 69,204 105,526
Non-current
Other debtors
1,774 1,576 1,588
KMD BRANDS LIMITED - INTERIM REPORT 2023
13
9 LEASES
Right-of-use assets
The movements in right of use assets were as follows:
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Opening net book value 250,372 242,677 242,677
Additions and modifications to right-of-use asset 58,289 43,986 75,311
Depreciation for the period (40,794) (39,524) (77,605)
Impairment for the period - - (928)
Foreign exchange (3,162) 5,201 10,917
Closing net book value 264,705 252,340 250,372
Lease liabilities
The movements in lease liabilities were as follows:
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Opening lease liabilities 284,587 279,271 279,271
Additions and modifications to lease liability 58,942 44,484 75,816
Interest expense on lease liabilities 5,098 4,269 8,476
Repayment of lease liabilities (including interest) (47,477) (46,663) (91,247)
Foreign exchange (3,674) 5,480 12,271
Closing lease liabilities 297,476 286,841 284,587
10 INTEREST BEARING LIABILITIES
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Interest bearing liabilities
170,496 106,838 110,881
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 guaranteeing group
comprises entities operating in New Zealand, Australia, North America and the United Kingdom. The carrying value of the
assets pledged as security is $1,489,325,000 (2022: $1,324,675,000).
KMD BRANDS LIMITED - INTERIM REPORT 2023
14
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 range between 4.03% - 5.80% (2022: 1.00%).
11 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
(a) Financial risk factors
The Group’s activities expose it to a variety of financial risks, market risk (including currency risk and interest 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 2023. 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 2022. 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.
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.
KMD BRANDS LIMITED - INTERIM REPORT 2023
15
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
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Assets
Derivative financial instruments
2,174 9,133 9,936
Total assets
2,174 9,133 9,936
Liabilities
Derivative financial instruments
4,607 - -
Total liabilities
4,607 - -
12 COMMITMENTS
Capital commitments
Capital commitments contracted for at balance date are:
Unaudited
Six Months
Ended
31 January
2023
Unaudited
Six Months
Ended
31 January
2022
Audited
Year
Ended
31 July
2022
NZ$’000 NZ$’000 NZ$’000
Property, plant, and equipment
131 2,902 868
Intangible assets
3,506 11,108 2,962
Intangible asset commitments as at 31 January 2023 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 2023 (2022: nil).
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 22 March 2023, the Directors declared an interim dividend of NZ 3.0 cents per share to be paid on 30 June 2023. 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 2023
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 (Deregistered 29 January 2023)
Blue Surf Pty Ltd (Deregistered 29 January 2023)
RC Surf Pty Ltd (Deregistered 29 September 2022)
Rip Curl Airport & Tourist Stores Pty Ltd (Deregistered 29 January 2023)
JRRC Rundle Mall Pty Ltd (Deregistered 29 January 2023)
Rip Curl (Thailand) Ltd (Group owns 50%)
RC Airports Pty Ltd (Deregistered 29 January 2023)
Ozmosis Pty Ltd
RC Chermside Pty Ltd (Deregistered 29 January 2023)
Bondi Rip Pty Ltd (Deregistered 29 January 2023)
Rip Curl Japan
Curl Retail No 1. Pty Ltd
RC Surf Sydney Pty Ltd (Deregistered 29 January 2023)
RC Surf South Pty Ltd (Deregistered 29 September 2022)
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 (Retired 1 December 2022)
Philip Bowman Non-Executive Director
Brent Scrimshaw Non-Executive Director
Andrea Martens Non-Executive Director
Abby Foote Non-Executive Director
Zion Armstrong Non-Executive Director (Appointed 1 December 2022)
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 2023
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.
© 2023 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 on pages 3
to 15 do not:
i. present fairly in all material respects the
Group’s financial position as at 31 January
2023 and its financial performance and
cash flows for the 6 month period ended on
that date; and
ii. comply 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
2023;
— 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 also provided other services to the group in relation to tax compliance services. 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 control to enable the preparation of a consolidated interim financial
statements that is fairly presented and 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 interim financial 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
22 March 2023
---
1H FY23
RESULTS
PRESENTATION
22 MARCH 2023
2
3
8
16
20
24
TODAY’S AGENDA
1.KMD RETURNS TO GROWTH IN 1H FY23
2.STRONG FINANCIAL PERFORMANCE
3.GROWTH ACROSS ALL BRANDS
4.FOCUSED STRATEGY UNDERPINS
GROWTH OUTLOOK
5.APPENDICES
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
KMD RETURNS TO
GROWTH IN 1H FY23
3
SECTION 1
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
FINANCIAL HIGHLIGHTS 1H FY23
4
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
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 1 for a reconciliation of Statutory to Underlying results
Dividend
declared
58.7%
Gross margin
improvement
100 bps
$45.3m
Underlying
EBITDA
1
$16.5m
Underlying
NPAT
1
$547.9m
Sales growth
+34.5%
NZ 3cps
1H FY22 $10.2m1H FY22 57.7%1H FY22 $407.3m1H FY22 -$5.1m
1H FY22 NZ 3cps
OPERATIONAL ACHIEVEMENTS
5
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
•Sales growth across all brands and
all key regions
•Rip Curl
•Retail store expansion, with net 9
new stores. USA sales +8%
•Kathmandu
•First deliveries to wholesale partners
in Europe and Canada
•Oboz
•Record first half sales, and successful
product range expansion
•Loyalty
•Club Rip Curl launched. +120,000
members
•Pricing
•Rip Curl retail store pricing aligned
with online
•Online
•Kathmandu French, German and
Canadian websites launched. Oboz
online sales up >500%
•EBITDA margin
•Rolling 12 month basis up, targeting
underlying EBITDA margin
*1
15% of
sales
•Leverage
•Leveraging scale across brands to
reduce overheads
•Leases
•Portfolio approach to lease
negotiations achieving net 2%
reduction across leases renewed in
first half
•B Corp
•Rip Curl, Kathmandu, and Oboz now
B Corp certified
•Science-based targets
•Submitted to SBTi, 2030 emission
reduction goals aligned to Paris
Climate agreement
•Leadership
•Winner of the Deloitte New Zealand
Top 200 Sustainable Business
Leadership award 2022
•Reconciliation
•Rip Curl Reconciliation Action Plan
(“RAP”) formally approved by
Reconciliation Australia
BUILD GLOBAL
BRANDS
ELEVATE
DIGITAL
LEVERAGE OPERATIONAL
EXCELLENCE
LEAD IN
ESG
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded from underlying results
MEDIUM-TERM
SHORT-TERM
KPI PROGRESS UPDATE
6
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
158
155155
Jan 22Jul 22Jan 23Target
KATHMANDU RETAIL STORE COUNT
~200
>>
6
7.8%
9.4%
11.3%
15.0%
Jan 22Jul 22Jan 23Target
EBITDA MARGIN
*2
% of sales
>>
1.All charts show rolling 12 month historical results
2.Underlying EBITDA excluding the impact of IFRS 16 leases
121.6
134.3
146.4
Jan 22Jul 22Jan 23Target
RIP CURL NORTH AMERICA SALES
NZ $m
~200
>>
1.7100.0
Jan 23Target
KATHMANDU INTERNATIONAL
SALES
NZ $m
~100
>>
20.4%
21.1%
21.8%
18.0%
Jan 22Jul 22Jan 23Target
WORKING CAPITAL
% of sales
>>
45.7
41.3
53.7
Jan 22Jul 22Jan 23Target
OBOZ SALES OPPORTUNITY
US $m
~100
>>
B CORP CERTIFIED
7
KMD BRANDS HAS ACHIEVED B CORP CERTIFICATION
•In 2019, Kathmandu made history as one of the first significant apparel brands in
ANZ to become B Corp certified
•In 2023, Rip Curl and Oboz have achieved certification as well as the Rip Curl
wetsuit factory OnSmooth in Thailand. The Kathmandu brand achieved re-
certification with major improvements that were commended by B Lab
•KMD Brands is one of the first multinational companies in ANZ to be certified in its
entirety, and one of only 45 listed businesses globally (out of 6,000+ B Corps)
•B Corp Certification is a significant achievement for KMD Brands because our
business and brands have been independently verified to meet globally
recognised high standards of social and environmental performance, public
transparency and legal accountability
•This globally recognised certification demonstratescommitment to leading inESG
and is a significant achievement for a company of our size, complexity and scale
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
STRONG FINANCIAL
PERFORMANCE
8
SECTION 2
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
PROFIT & LOSS
9
RECORD FIRST HALF SALES
•Q1 strong sales recovery, cycling Australasian COVID lockdowns last year
•Q2 sales growth on last year’s post-COVID lockdown rebound, supported by
return of international travel and tourism
GROSS MARGIN REMAINS RESILIENT
•Group gross margin +100 bps (1.0% of sales), reflecting improved
Kathmandu performance
OPERATING EXPENSES RETURN TO HISTORICAL LEVELS POST-COVID
•Operating expenses leveraged, with post-COVID lockdown sales recovery in
Q1
•1H FY22 operating expenses included the benefit of $5.1m one-off COVID
assistance
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impacts of IFRS 16 and the notional amortisation of
Rip Curl and Oboz customer relationships are excluded from Underlying results. Refer to Appendix 1 for a reconciliation of
Statutory to Underlying results
2.1H FY23 NZD/AUD conversion rate 0.910 (1H FY22: 0.953), 1H FY23 NZD/USD conversion rate 0.612 (1H FY22 0.694)
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
KMD BRANDSStatutoryUnderlying
NZ $m
*2
1H FY231H FY221H FY231H FY22Var %
SALES547.9407.3547.9407.334.5%
GROSS PROFIT321.8234.9321.8234.937.0%
Gross margin58.7%57.7%58.7%57.7%
OPERATING EXPENSES(230.9)(178.8)(276.4)(224.7)23.0%
% of Sales42.1%43.9%50.4%55.2%
EBITDA90.856.145.310.2342.5%
EBITDA margin %16.6%13.8%8.3%2.5%
EBIT31.40.829.3(3.0)
EBIT margin %5.7%0.2%5.4%-0.7%
NPAT14.0(5.5)16.5(5.1)
STRONG DIVERSIFIED SALES GROWTH
10
229.0
363.7
410.7
407.3
547.9
1H
FY19
1H FY20
incl. 3 months
of Rip Curl
1H
FY21
1H
FY22
1H
FY23
RECORD FIRST HALF SALES
TOTAL GROUP REPORTED SALES (NZ $m)
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
+18.8%
Rip Curl
+51.2%
Kathmandu
+124.3%
Oboz
BY
BRAND
+46.2%
Retail
-2.2%
Online
+27.1%
Wholesale
+37.2%
Licensing / Royalties
BY
CHANNEL
+33.6%
AU & NZ
+52.8%
North
America
+6.9%
Europe
+31.5%
Rest of World
BY
REGION
SALES GROWTH 1H FY23 VS 1H FY22
DIVERSIFIED CHANNEL MIX
11
321.0312.0248.1228.1333.5
24.5
30.1
36.3
47.7
46.6
7.1%
8.8%
12.8%
17.3%
12.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1H
FY19
1H
FY20
1H
FY21
1H
FY22
1H
FY23
DIRECT TO CONSUMER SALES (NZ $m)
Retail StoresOnlineOnline % of DTC sales
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 Rip Curl, Kathmandu, and Oboz online and retail store sales for comparability over time, including pre-acquisition
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
OMNI-CHANNEL: CONSUMERS HAVE RETURNED TO SHOPPING IN STORES
•Omni-channel offering providing consumers the choice of in store or online
•Online CAGR since 1H FY19 +17.4%, significantly above pre-COVID levels
•Kathmandu $26.0m online sales, comprising 13.6% of DTC sales
•Rip Curl $17.8m online sales, comprising 9.6% of sales
•Oboz $2.8m online sales, +591% above last year
DELIVERING OPERATING LEVERAGE
12
MAINTAINING OPEX INVESTMENT WHILE LEVERAGING SALES GROWTH
•1H FY23 operating expenses 50.4% of sales, demonstrating operating leverage
YOY with post-COVID lockdown sales recovery
•Leveraging sales growth of +34.5%, with total operating expense growth of
+23.0% (+20.3% excluding $5.1m one-off COVID assistance received in 1H
FY22)
•Operating expense $ increase: c. 80% relates to variable costs of operating
stores following COVID lockdown closures in 1H FY22
•Brand and Marketing spend held flat to prior half. Expect to deliver further
leverage as sales growth continues
•Improved leverage in 2H due to sales weighting in the Australasian winter
season
•FY23 full year operating expenses expected to be c. 48% of sales
•Ongoing initiatives to further reduce annualised operating costs by up to 2% of
sales for FY24
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
52.3%
48.0%
56.4%
46.7%
50.4%
1H
FY21
2H
FY21
1H
FY22
2H
FY22
1H
FY23
OPERATING EXPENSES % OF SALES
Variable ExpensesFixed ExpensesTotal Operating Expenses
excl. COVID assistance
1.Operating expenses % of sales adjusted to exclude one-off COVID assistance
2.Variable expenses include retail store, online, wholesale and distribution operating expenses including rent
3.Fixed expenses include all brand and marketing expenses and support office costs
STRONG BALANCE SHEET
13
INVENTORY POSITION REFLECTS
•Kathmandu inventory well positioned, c. $24m below Jul 22
•Oboz inventory growth to meet 2H forward orders, cycling significant supply
challenges last year
•Rip Curl strategic wetsuit raw material and product investment for perennial
styles to mitigate international supply challenges c. $20m. Expected to
moderate over the next twelve months
•Rip Curl inventory balance expected to reduce during the second half as
purchase orders placed during 1H align to improved supply chain timelines
c. $15m
•Clearance stock levels are below Jul 22. Inventory obsolescence provisions
represent 1.4% of gross inventory on hand, 50 bps below Jul 22
•Inventory balance Jul 23 expected to be $270m -$280m depending on
currency translation and timing of goods in transit
DEBT
•Significant funding headroom over $200m
•Long-term leverage ratio target <0.5x Net Debt / EBITDA
1.Key ratios calculated using 12 month underlying P&L measures
2.COGS / Average Inventories YOY
3.Net Debt / EBITDA
4.Net Debt / (Net Debt + Equity)
5.(EBITDA + Rent)/(Rent + Net Finance Costs excl. FX)
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
Key Balance Sheet items and ratios
*1
NZ $mJan 23 Jul 22 Jan 22
Net working capital244.4 207.0 187.3
Inventories318.8 295.5 249.6
Current trade and other receivables90.6 105.5 69.2
Current trade and other payables(165.0) (194.0) (131.5)
Net work ing capital % of sales21.8% 21.1% 20.4%
Stock Turns
*2
1.61x 1.57x 1.61x
Net Debt(84.9) (40.1) (48.6)
Leverage Ratio
*3
0.7x 0.4x 0.7x
Net Debt to Equity
*4
9.4% 4.5% 5.7%
Fixed Charge Cover
*5
1.96x 1.77x 1.61x
Equity822.1 850.5 809.8
HALF YEAR DIVIDEND DECLARED
14
•NZ 3.0 cents per share interim dividend
•Dividend will be fully franked for Australian shareholders
•Dividend will not be imputed for New Zealand shareholders
•Record date 15 June 2023, payment date 30 June 2023
9.0
0.0
14.2
21.3
21.3
27.2
-
21.3
21.3
36.2
-
35.5
42.5
FY19FY20FY21FY22FY23
Dividends declared (NZ $m)
InterimFinal
Dividends declared (NZ cents per share)
Interim4.0-2.03.03.0
Final12.0-3.03.0
Total16.0-5.06.0
•Operating cash outflow impacted by inventory build
•Expecting an unwind of inventory to underpin traditionally strong
operating cashflow generation in the second half year
1.Adjusted for impacts of adopting IFRS 16
2.1H FY23 Dividends paid include $0.7m to a minority interest partner
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
Cash Flow (NZ $m) 1H FY231H FY22
NPAT14.0(5.5)
Change in working capital(42.3)(65.3)
Non-cash items58.262.2
Operating cash flow29.9(8.6)
Adjusted operating cash flow
*1
(11.8)(50.5)
Key Line Items:1H FY231H FY22
Net interest paid (including facility fees)
*1
(3.6)(1.8)
Net income taxes paid(7.4)(14.0)
Capital expenditure(14.8)(12.7)
Dividends paid
*2
(22.0)(21.7)
ROLLING 12 MONTHS
15
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
GROUP SALES OVER $1 BILLION IN THE LAST 12 MONTHS
•For the first time since Rip Curl was acquired, the Group has experienced a full 12
months of trade without significant interruption from the COVID pandemic
•Achieved the acquisition expectation of a global $1 billion outdoor company
922.6
922.8
979.8
1,120.4
FY20
Pro Forma
FY21FY22Jan 23
Rolling
ROLLING 12 MONTHS SALES BY BRAND (NZ $m)
KathmanduObozRip CurlTotal
95.1
109.5
92.0
127.1
FY20
Pro Forma
FY21FY22Jan 23
Rolling
SALES MIX
ROLLING 12 MONTHS TO JAN 23
Rip Curl
52%
Kathmandu
40%
Oboz
8%
BY
BRAND
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is
excluded from Underlying results
2.FY20 Pro Forma includes management results for Rip Curl for the three months pre-acquisition
ROLLING 12 MONTHS UNDERLYING EBITDA
*1
(NZ $m)
GROWTH ACROSS
ALL BRANDS
16
SECTION 3
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
RIP CURL PROFIT & LOSS
17
TOTAL SALES +18.8% WITH GROWTH ACROSS ALL CHANNELS
•Direct-to-consumer sales growth particularly strong in Australasia following
lockdowns last year, and Hawaii with the return of international travel
•Direct-to-consumer same store sales (incl. online) +13.9%
*2
•Online traffic reduced YOY, cycling COVID lockdown boost last year. Sales
remain significantly above pre-COVID levels
•Wholesale showing resilience with +2.2%
*3
growth, despite softening wetsuit
demand from record highs, and strategic destocking from retailers
EBIT IMPACTED BY GROSS MARGIN MIX AND DISTRIBUTION COSTS
•Gross margin decreased -30 bps (0.3% of sales), impacted by channel mix
and freight costs
•Distribution costs have been impacted by inflation pressures globally,
particularly in North America
1.The impacts of IFRS 16 and the notional amortisation of customer relationships are excluded from underlying results. Refer toAppendix 2 for a reconciliation of Statutory to Underlying results
2.Same store sales are for the 26 full weeks ended 29 January 2023, and are measured at constant currency
3.Wholesale sales growth +2.2% at constant exchange rates, and +8.7% at reported NZD exchange rates
4.1H FY20 includes 3 months of Rip Curl post-acquisition
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
134.9
251.1
257.8
306.4
6.5%
11.5%
13.8%
9.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
1H
FY20*
1H
FY21
1H
FY22
1H
FY23
SALES
StoresOnline
WholesaleLicensing / Other
Total SalesOnline % of DTC
18.448.733.737.6
13.7%
19.4%
13.1%
12.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
1H
FY20*
1H
FY21
1H
FY22
1H
FY23
EBITDA
EBITDAEBITDA margin
NZ $m1H FY231H FY22Var %
SALES306.4257.818.8%
EBITDA (underlying
*1
)
37.633.711.4%
EBITDA margin %
12.3%
13.1%
EBIT (underlying
*1
)
31.528.89.4%
EBIT margin %
10.3%
11.2%
KATHMANDU PROFIT & LOSS
18
TOTAL SALES +51% WITH STRONG AUSTRALIAN RECOVERY
•Australia +59%
*2
. Kathmandu’s largest market saw a strong recovery following
COVID lockdowns last year
•New Zealand +22%, supported by the return of domestic and international tourism
during Q2
•International sales of $1.4m including first deliveries to select new wholesale
customers in Europe and Canada
•Online sales normalised at c. $26m following lockdowns last year, now 13.6% of
DTC sales. Online CAGR since 1H FY19 +12.8%, significantly above pre-COVID
levels
•Same store sales (incl. Online) +48.8%
*3
GROSS MARGIN IMPROVEMENT
•Gross margin increased +580 bps (5.8% of sales) with currency benefit, and the
deliberate strategy to carefully moderate the historic “high-low” pricing model
1.The impacts of IFRS 16 are excluded from underlying results. Refer to Appendix 2 for a reconciliation of Statutory
to Underlying results
2.At constant exchange rates
3.Same store sales are for the 26 full weeks ended 29 January 2023, and are measured at constant currency
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
200.4
196.5
129.3
128.3
194.0
8.1%
10.6%
14.3%
21.0%
13.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0.0
50.0
100.0
150.0
200.0
1H
FY19
1H
FY20
1H
FY21
1H
FY22
1H
FY23
SALES
StoresOnline
WholesaleTotal Sales
Online % of DTC
24.118.30.5
-18.3
12.3
12.0%
9.3%
0.4%
-14.3%
6.3%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1H
FY19
1H
FY20
1H
FY21
1H
FY22
1H
FY23
EBITDA
EBITDAEBITDA margin
NZ $m1H FY231H FY22Var %
SALES194.0128.351.2%
EBITDA (underlying
*1
)
12.3(18.3)-
EBITDA margin %
6.3%
-14.3%
EBIT (underlying
*1
)
2.7(26.3)-
EBIT margin %
1.4%
-20.5%
OBOZ PROFIT & LOSS
19
DIVERSIFIED SALES CHANNELS
•Strong online sales growth with high gross margins increasing the mix of
direct-to-consumer sales
•Wholesale recovered strongly following last year’s significant supply
challenges
UNDERLYING PROFIT RECOVERY
•Gross margin decreased -50 bps (-0.5% of sales) due to elevated
international freight costs over the last twelve months
•Operating expenses include investment in brand and product teams, to be
leveraged as sales growth continues
•North American wholesale operating margin remains below historic levels,
with full extent of increased wholesale selling prices to be realised from 2H
•International freight costs are now trending towards historical levels
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
28.6
32.3
30.4
21.2
47.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1H
FY19
1H
FY20
1H
FY21
1H
FY22
1H
FY23
SALES
OnlineWholesaleTotal Sales
4.95.13.8
0.0
2.9
17.1%
15.8%
12.5%
-0.2%
6.1%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
1H
FY19
1H
FY20
1H
FY21
1H
FY22
1H
FY23
EBITDA
EBITDAEBITDA margin
1.The impacts of IFRS 16 and the notional amortisation of customer relationships are excluded from underlying
results. Refer to Appendix 2 for a reconciliation of Statutory to Underlying results
NZ $m1H FY231H FY22Var %
SALES47.521.2124.3%
EBITDA (underlying
*1
)
2.9(0.0)-
EBITDA margin %
6.1%
-0.2%
EBIT (underlying
*1
)
2.5(0.4)-
EBIT margin %
5.2%
-1.7%
FOCUSED
STRATEGY
UNDERPINS
GROWTH OUTLOOK
20
SECTION 4
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
STRATEGIC PRIORITIES
21
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
•Comparable sales growth for all
brands
•Rip Curl
•Improve North America market share
and operating margins
•Kathmandu
•Increase Australasian stores to c.200;
grow international sales through
wholesale and DTC channels
•Oboz
•North American growth in both
wholesale and DTC channels.
•Expand outside of North America
•Loyalty
•Continue global rollout of Club Rip
Curl, and relaunch of Kathmandu
loyalty programme
•Personalisation
•Implement personalisation at scale
across Kathmandu and Rip Curl
•B2B
•Oboz B2B platform launch utilising
Group technology
•Working capital
•Ongoing inventory management.
Working capital target 18% of sales
•EBITDA margin
•Leverage operating cost base to
deliver Group underlying EBITDA
margin
*1
target: 15% of sales
•Leverage
•Ongoing consolidation of
procurement and supply chain
operations to support achievement of
operating margin targets
•Circularity
•Roll out circular business models
across brands: launch KATHMAN-
REDU apparel repair and re-
commerce pilot in select Victorian
stores, plus continued global
expansion of Rip Curl TerraCycle
wetsuit take-back and recycling
programme
•Science-based targets
•Approval from SBTi of science-based
targets, and development of emission
reduction roadmap
BUILD GLOBAL
BRANDS
ELEVATE
DIGITAL
LEVERAGE OPERATIONAL
EXCELLENCE
LEAD IN
ESG
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded from underlying results
TRADING UPDATE AND OUTLOOK
22
TOTAL SALES
GROWTH
MONTH OF
FEB 23
FEB 23
YTD
Rip Curl13.3%18.0%
Kathmandu20.8%47.8%
Oboz1,992%161%
Group31.9%34.1%
POSITIVE 2H FY23 OUTLOOK
•Positive direct-to-consumer sales trends continue
•Group well positioned to continue to benefit from return of international travel and tourism.
Holiday destination (Hawaii and Queensland) and Australian airport stores sales have
achieved strong sales growth YOY, and are tracking above pre-COVID levels
•Kathmandu seeing increased purchases from inbound tourists
*1
and increasing customer
intention to resume outbound international travel
*2
•Products across all three brands appeal to a diverse range of consumer interests, ages,
and demographics
•Consumer outlook remains uncertain, with high global inflation and rising interest rates
expected to impact consumer demand
•Wholesale market inconsistent, with retailers strategically destocking, and increased
promotional activity from competitors
•The second half is traditionally the strongest cash generating period
•The Group is well capitalised, continuing to invest in the long-term international expansion
of our brands
•Rip Curl sales growing, cycling FY22 growth
•Kathmandu sales momentum continues into 2H FY23
•Oboz recovery from supply challenges last year
•Continued strong diversified sales growth by Brand,
Channel, and Region
•February is not a significant trading month
1.Kathmandu international credit card spend
2.TruRatingcustomer responses at checkout to the question “is today’s purchase for an overseas trip?”
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
QUESTIONS
23
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
APPENDICES
24
SECTION 5
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
APPENDIX 1: STATUTORY TO UNDERLYING
PROFIT & LOSS
25
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded from Underlying results
2.Notional amortisation of Rip Curl and Oboz customer relationships are excluded from Underlying results
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
GROUP1H FY231H FY22
IFRS 16Amortisation ofOtherIFRS 16Amortisation ofOther
NZ $mStatutoryLeases
*1
Customer Relationships
*2
Abnormals
UnderlyingStatutoryLeases
*1
Customer Relationships
*2
Abnormals
Underlying
SALES
547.9 - - - 547.9 407.3 - - - 407.3
GROSS PROFIT
321.8 - - - 321.8 234.9 - - - 234.9
Gross margin58.7%58.7%57.7%57.7%
OPERATING EXPENSES
(230.9) (45.5) - - (276.4) (178.8) (45.9) - - (224.7)
% of Sales42.1%50.4%43.9%55.2%
EBITDA
90.8 (45.5) - - 45.3 56.1 (45.9) - - 10.2
EBITDA margin %16.6%8.3%13.8%2.5%
EBIT
31.4 (4.7) 2.7 - 29.3 0.8 (6.4) 2.5 - (3.0)
EBIT margin %5.7%5.4%0.2%-0.7%
NPAT
14.0 0.6 1.9 16.5 (5.5) (1.3) 1.8 (5.1)
APPENDIX 2: SEGMENT NOTE
26
1.Statutory results include the impact of IFRS 16 leases. For comparability, the impact of IFRS 16 is excluded from Underlying results
2.Notional amortisation of Rip Curl and Oboz customer relationships are excluded from Underlying results
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
1H FY231H FY221H FY23
SALES (NZ $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
SALES per segment note
306,424 193,968 47,532 - 547,924 257,834 128,277 21,193 - 407,304
SALES (Underlying)
306,424 193,968 47,532 - 547,924 257,834 128,277 21,193 - 407,304
EBITDA (NZ $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
EBITDA per segment note
57,538 37,570 3,101 (7,364) 90,845 52,657 8,529 109 (5,147) 56,148
IFRS 16 Leases
*1
(19,968) (25,314) (226) - (45,508) (18,925) (26,829) (149) - (45,904)
Amortisation of Customer Relationships
*2
- - - - - - - - - -
EBITDA (Underlying)
37,570 12,256 2,875 (7,364) 45,337 33,732 (18,300) (40) (5,147) 10,245
EBIT (NZ $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
EBIT per segment note
30,505 5,920 2,310 (7,364) 31,371 28,649 (22,171) (495) (5,152) 831
IFRS 16 Leases
*1
(1,540) (3,241) 67 - (4,714) (2,291) (4,135) 45 - (6,381)
Amortisation of Customer Relationships
*2
2,571 - 101 - 2,672 2,455 - 89 - 2,544
EBIT (Underlying)
31,536 2,679 2,478 (7,364) 29,329 28,813 (26,306) (361) (5,152) (3,006)
APPENDIX 3: BALANCE SHEET
27
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
Balance Sheet (NZ $m)Jan 23 Jul 22 Jan 22
Inventories318.8 295.5 249.6
Property, plant and equipment77.9 79.2 79.3
Right of Use Asset (IFRS 16)264.7 250.4 252.3
Intangible assets704.8 719.3 697.8
Other assets117.0 137.3 109.1
Total assets (excl. cash)1,483.2 1,481.7 1,388.1
Net interest bearing liabilities and cash(84.9) (40.1) (48.6)
Lease Liability (IFRS 16)(297.5) (284.6) (286.8)
Other non-current liabilities(107.8) (110.7) (109.1)
Current liabilities(170.9) (195.8) (133.8)
Total liabilities (net of cash)(661.1) (631.2) (578.3)
Net assets822.1 850.5 809.8
BRANDS WITH GLOBAL REACH
28
We operate over 300 stores globally, and our brands are sold in over 8,500 locations
NORTH AMERICA
~$240m Sales
32 Owned Stores
20 Licensed Stores
+4,000 Wholesale Doors
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
Global office locations
AUSTRALASIA
~$700m Sales (~80% Australia)
266 Owned Stores
52 Licensed Stores
+900 Wholesale Doors
ASIA
~$40m Sales
72 Licensed and JV stores
+600 Wholesale Doors
EUROPE
~$100m Sales
22 Owned Stores
16 Licensed Stores
+2,200 Wholesale Doors
SOUTH AMERICA
~$20m Sales
5 Owned Stores
105 Licensed Stores
+800 Wholesale Doors
AFRICA / MIDDLE EAST
35 Licensed Stores
B CORP DETAIL
29
WHO IS B LAB?
•B Lab is a non-profit organisation, founded in United States in 2006, that is transforming
the global economy to benefit all people, communities, and the planet
•B Lab creates standards, policies, tools, and programs to help businesses balance profit
with purpose. Its international network of organisations leads economic systems change
to support the collective vision of an inclusive, equitable, and regenerative economy
WHAT ARE B CORPS?
•Certified B Corporations (B Corps) are for-profit organisations that use the power of
business to build a more inclusive and sustainable economy
•B Corps are independently verified by B Lab to meet high standards of social and
environmental performance, accountability and transparency. B stands for ‘benefit for all’
WHAT IS THE PROCESS TO BECOME A B CORP?
•B Corp certification is a highly rigorous process that can take months or years.
Companies must measure and document their impact to qualify, and performance is
measured across five impact areas: governance, workers, customers, community and
the environment
•B Corps must meet a minimum of 80 points in the B Impact assessment to certify -the
average score of ordinary businesses is 50.2
•To maintain certification, B Corps must undergo an independent verification process
every three years and outline a path for ongoing improvements
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
IMPORTANT NOTICE AND DISCLOSURE
30
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.
1 H F Y 2 3 R E S U L T S P R E S E N T A T I O N
---
Distribution Notice
KMD BRANDS LIMITED W kmdbrands.com
Section 1: Issuer information
Name of issuer KMD Brands 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 15/06/2023
Ex-Date (one business day before the
Record Date)
14/06/2023
Payment date (and allotment date for
DRP)
30/06/2023
Total monies associated with the
distribution
1
$21,340,431.66
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, 22 March 2023
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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