FY24 Annual Results Announcement
Results announcement
KMD BRANDS LIMITED W kmdbrands.com
Results for announcement to the market
Name of issuer KMD Brands Limited
Reporting Period 12 months to 31 July 2024
Previous Reporting Period 12 months to 31 July 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$979,415 -11.2%
Total Revenue $979,415 -11.2%
Net profit/(loss) from continuing
operations
$(48,323) -232.0%
Total net profit/(loss) $(48,323) -232.0%
Final Dividend
Amount per Quoted Equity
Security
Nil
Imputed amount per Quoted
Equity Security
Nil
Record Date Nil
Dividend Payment Date Nil
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$0.15 $0.17
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
The year end results are based on accounts which have been subject
to audit. Refer to accompanying audited financial statements and
media release for further information.
Authority for this announcement
Name of person
authorised to
make this announcement
Frances Blundell
Contact person for this
announcement
Frances Blundell
Contact phone number +64 3 968 6110
Contact email address companysecretary@kmdbrands.com
Date of release through MAP
Wednesday, 25 September 2024
Audited financial statements accompany this announcement.
---
KMD BRANDS LIMITED W kmdbrands.com
25 September 2024
(All amounts in NZ$ unless otherwise stated)
KMD Brands FY24 Results
KMD Brands Limited (NZX/ASX: KMD, “KMD” or the “Group”) today announces its results
for the twelve months ended 31 July 2024 (“FY24”).
FY24 financial summary (vs FY23):
• Group sales down -11.2% to $979.4 million.
• Gross margin down -0.2% of sales to 58.9%.
• Underlying operating expenses
1
$19.6 million lower year-on-year (“YOY”), down -3.6%.
• Underlying EBITDA
1
$50.0 million, down -52.8% YOY due to lower sales.
• Statutory NPAT loss -$48.3 million including a one-off non-cash impairment of Oboz
goodwill of $40.3 million. Underlying NPAT
1
loss -$1.1 million.
• Net Working Capital $198.3 million, -$21.4 million lower YOY.
• Net Debt $59.7 million, with significant funding headroom of approximately $230 million.
• No final dividend declared as a result of FY24 operating performance and challenging
market conditions.
FY25 trading update for the first 8 full weeks to 22 September:
• Kathmandu Australia direct-to-consumer (“DTC”) sales up +2.1% YOY. New Zealand
DTC sales down -23.2% YOY, cycling strong end of line clearance sales last year.
• Kathmandu gross profit dollars up +5.1% YOY for the first eight full weeks.
• Rip Curl global DTC sales approximately -5% lower YOY in a seasonally non-significant
trading period.
• Wholesale forward orders are moderating from double-digit declines in FY24 to single
digit declines for the first half of FY25.
Commenting on the FY24 results, Group CEO & Managing Director Michael Daly said:
“We continued to experience the effects of weakness in consumer sentiment. Sales were
11.2% below last year’s record result; and decreased for all three of our brands.”
“Following Kathmandu’s disappointing first half result, sales trends relative to FY23 improved
through the third and fourth quarters, with enhanced in-store and online execution and the
launch of new products.”
1
Excluding the impact of IFRS 16, restructuring, the notional amortisation of Rip Curl and Oboz customer relationships, and a
one-off non-cash impairment of Oboz goodwill.
KMD BRANDS LIMITED W kmdbrands.com
“Rip Curl and Oboz cycled record sales last financial year, with direct-to-consumer sales
outperforming the wholesale channel this year. The wholesale channel has been more
challenging for both brands as wholesale accounts continued to reduce their inventory to
manage risk in a challenging economic environment.”
“In a challenging sales environment, gross margin remained resilient despite increased
promotional activity for Kathmandu. Operating costs reduced year-on-year despite ongoing
inflation pressure, and working capital reduced as inventory investments were carefully
managed.”
Group financial performance
Statutory Underlying
1
NZ$ million
2
FY24 FY24 FY23 Var %
Sales 979.4 979.4 1,103.0 (11.2%)
Gross Profit 576.5 576.5 651.9 (11.6%)
Gross Margin 58.9% 58.9% 59.1%
Operating Expenses (469.2) (526.5) (546.1) (3.6%)
EBITDA 107.2 50.0 105.9 (52.8%)
EBIT (21.1) 16.0 74.2 (78.4%)
NPAT (48.3) (1.1) 43.3 -
Gross margin decreased -0.2% of sales below last year to 58.9%. Continued gross margin
improvement for Rip Curl and Oboz was offset by increased promotional activity for
Kathmandu.
Operating expenses decreased $19.6 million below last year on an underlying
1
basis, despite
ongoing inflation pressure. Operating expenses benefited from restructuring implemented
last year and lower variable costs associated with lower sales.
Rip Curl: Sales impacted by wholesale customer caution
Rip Curl Underlying
1
NZ$ million FY24 FY23 Var%
Sales 538.9 581.5 (7.3%)
EBITDA 42.0 55.6 (24.5%)
EBIT 28.2 44.0 (35.9%)
Rip Curl total sales decreased -7.3% to $538.9 million, cycling record sales last year. Direct-
to-consumer sales, including online, outperformed the wholesale channel this year.
DTC sales decreased by -2.8% for the year, showing continued improvement on first half
sales trends during the third and fourth quarters. Stronger results were recorded in Europe,
Asia and South America, helped by new store openings. Online sales increased by +8.6% to
$37.9 million, comprising 11.9% of DTC sales.
2
FY24 NZD/AUD conversion rate 0.924 (FY23: 0.917), FY24 NZD/USD conversion rate 0.605 (FY23 0.617)
KMD BRANDS LIMITED W kmdbrands.com
Wholesale sales decreased by -13.0%, as wholesale accounts continued to reduce their
inventory holdings.
In a challenging sales environment, gross margin and operating expenses were well
controlled. Gross margin increased +0.5% of sales reflecting channel mix, improved pricing,
and exiting low margin business in North America and Europe. Operating expenses were
tightly managed despite continued inflation pressure.
Kathmandu: Sales trends improving in Australia
Kathmandu Underlying
1
NZ$ million FY24 FY23 Var %
Sales 361.1 422.2 (14.5%)
EBITDA 16.0 52.5 (69.6%)
EBIT (3.3) 33.3 -
Kathmandu total sales decreased -14.5%, cycling strong sales growth last year, with declines
in both Australia -13.9%
3
and New Zealand -15.2%.
Following a disappointing first half, sales trends improved in Kathmandu’s largest market,
Australia, in the third and fourth quarters, supported by strategic store openings, enhanced
in-store execution and the launch of new products. Economic settings in New Zealand have
resulted in a more challenging consumer environment.
Online sales decreased by -18.9% to $47.7 million, in line with pre-COVID levels, comprising
13.3% of DTC sales. Online sales trends, relative to FY23, improved each quarter to -1.5%
YOY in the fourth quarter. Search engine optimisation and new payment methods online
have improved conversion and the consumer experience.
Gross margin decreased -2.2% of sales, driven by clearance of end of line products in
August 2023, increased promotional intensity through the fourth quarter, and currency
headwinds. Excluding August 2023, gross margin for the period was -1.4% of sales lower
YOY.
Operating expenses were more than $10 million lower YOY.
Oboz: Sales impacted by wholesale customer caution
Oboz Underlying
1
NZ$ million FY24 FY23 Var %
Sales 79.4 99.3 (20.0%)
EBITDA (0.2) 7.9 -
EBIT (1.1) 7.1 -
Total sales decreased -20.0%, cycling record sales last year. Wholesale sales remained
subdued through the year, as wholesale accounts continued to reduce their inventory to
manage risk in a challenging economic environment. Oboz has been impacted by post-
3
At constant exchange rates.
KMD BRANDS LIMITED W kmdbrands.com
COVID industry challenges in the North American outdoor footwear category. Participation
levels and demand have now moderated, leaving the wider market with higher inventory
levels and aggressive promotional behaviour.
The brand benefited from a commitment to diversified sales channels. Online sales grew
strongly +31.7% YOY, with increased traffic, conversion, and strategic promotional activity.
In a challenging sales environment, gross margin and operating expenses were well
controlled. Gross margin increased +2.1% of sales with improved channel mix, improved
pricing, and new product introductions.
Oboz continued to invest in brand, product, and online to support long-term growth
objectives, including international expansion. Oboz expects the operating expense
investment to be leveraged with future sales growth opportunities as the market recovers and
international expansion continues.
Oboz goodwill has been impaired by $40.3 million. The impairment is driven by a
conservative view of near-term US wholesale market conditions. This one-off non-cash item
does not impact the day-to-day operations of the business. This impairment has been
excluded from underlying
1
results.
Balance sheet
At 31 July 2024 the Group had a net debt position of $59.7 million, with funding headroom of
approximately $230 million.
Net working capital was $21.4 million lower than 31 July 2023 despite lower sales, with a
significant reduction in inventory. Rip Curl and Oboz inventory positions continue to
moderate back towards historical levels, with further moderation expected in the second half
of FY25.
As previously communicated, the dividend policy remains aligned to earnings, with a target
payout ratio of 50% to 70% of underlying NPAT. As a result of the FY24 operating
performance and challenging market conditions, the Directors have not declared a final
dividend.
Outlook
DTC sales for the first eight full weeks to 22 September are as follows:
• Kathmandu Australia +2.1% YOY, a further improvement on the Q4 FY24 sales trend.
Kathmandu New Zealand -23.2% YOY, cycling strong end of line clearance sales in
August last year.
• Kathmandu gross profit dollars for the first eight full weeks to 22 September are +5.1%
above the equivalent period last year.
• Rip Curl global DTC sales approximately -5% lower YOY, compared to FY24 DTC sales -
2.8% YOY in a seasonally non-significant trading period.
Wholesale forward orders are moderating from double-digit declines in FY24 to single digit
declines for the first half of FY25. We are seeing order book growth YOY for some regions in
2H FY25, noting that sell-in is not yet complete. Wholesale accounts continue to remain
cautious on pre-season commitments.
KMD BRANDS LIMITED W kmdbrands.com
Commenting on the outlook for the Group, Mr Daly said:
“We remain cautious on consumer sentiment, given the challenging global macroeconomic
environment. Global inflationary pressures are easing, but it will take time to directly impact
consumer spending.”
“In this environment, we are focusing on growing our gross margin, and simplifying our
business to drive cost efficiency.”
“We remain focused on returning to sales growth and improving profitability in FY25.”
“We believe that with our portfolio of iconic global outdoor brands and leadership in
sustainability, we remain a unique investment proposition and well-placed for the future.”
Investor briefing being held today at 8:30am AEST / 10:30am NZST
Michael Daly (Group CEO & Managing Director), and Ben Washington (Interim Group CFO)
will be holding a briefing session for investors and analysts at 8:30am AEST / 10:30am NZST
today (Wednesday 25 September).
Please attend the meeting by following this link: www.virtualmeeting.co.nz/kmdfy24
You may also dial one of the numbers below and provide the conference ID 3372530 to the
operator to listen to the meeting.
Australia Toll-Free 1800 953 093
New Zealand Toll-Free +64800005652
USA & Canada Toll-Free (888) 672-2415
United Kingdom Toll-Free +44 800 524 4763
France Toll-Free +33 801 238861
Norway National +47 57 98 94 28
Spain Toll-Free +34 800 906908
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, whether an investor or media enquiry, please contact:
enquiries@kmdbrands.com
---
FY24
RESULTS
PRESENTATION
25 SEPTEMBER 2024
Michael Daly
Group CEO &
Managing Director
Ben Washington
Interim Group CFO
2
3
9
16
20
25
29
OUTLINE
1.FY24 SUMMARY
2.GROUP FINANCIALS
3.BRAND FINANCIALS
4.KATHMANDU UPDATE
5.FY25 FOCUS AND OUTLOOK
6.APPENDICES
F Y 2 4 R E S U L T S P R E S E N T A T I O N
FY24
SUMMARY
3
SECTION 1
F Y 2 4 R E S U L T S P R E S E N T A T I O N
FINANCIAL
SUMMARY
F Y 2 4 R E S U L T S P R E S E N T A T I O N
44
1.Statutory results include the impact of IFRS 16 leases. The impacts of IFRS 16, restructuring, the notional amortisation of Rip Curl and
Oboz customer relationships, and a one-off non-cash impairment of Oboz goodwill have been excluded from Underlying results. Refer
to Appendix 1 for a reconciliation of Statutory to Underlying results.
Sales
$979.4m
-11.2% YOY
FY23 $1,103.0m
Gross
margin
58.9%
-0.2% of sales
FY23 59.1%
Operating
expenses
1
$526.5m
-3.6% YOY
FY23 $546.1m
Underlying
EBITDA
1
$50.0m
-52.8% YOY
FY23 $105.9m
Net working
capital
$198.3m
-9.7% YOY
Jul 23 $219.7m
Net debt $59.7m
$230m headroom
Jul 23 $55.7m
Underlying
NPAT
1
-$1.1m
Statutory NPAT
-$48.3m
OPERATIONAL
HIGHLIGHTS
F Y 2 4 R E S U L T S P R E S E N T A T I O N
55
Digital
Operational
excellence
•Gross margin resilient in a competitive consumer environment.
•Underlying operating expenses
1
reduced by $19.6m year-on-year
(“YOY”) despite global inflation.
•Inventory and net working capital reduced.
•Capital expenditure moderated in response to market conditions.
•Kathmandu marketing returns to its authentic outdoor heritage.
•Rip Curl reigniting ‘The Search’ as a creative and marketing
vehicle using brand DNA to expand consumer reach.
•Industry-leading NPS for Kathmandu and Rip Curl.
•Oboz and Rip Curl achieved record online sales. Oboz online
+31.7% YOY to $7.4m sales. Rip Curl online +8.6% YOY to $37.9m.
•Kathmandu improving online sales trends each quarter relative to
last year, with additional payment gateways to improve the
consumer journey.
•USA retail point of sale aligned with Group technology stack, and
Club Rip Curl launched in North America.
•Rip Curl strong sales growth in Indonesia and Thailand.
•Kathmandu double-digit sales growth in North America and Europe
(off a low base) as we continue to test and learn.
•Oboz shop-in-shops launched in select Kathmandu stores.
International
Customers
1.Statutory results include the impact of IFRS 16 leases. The impacts of IFRS 16, restructuring, the notional amortisation of Rip Curl and
Oboz customer relationships, and a one-off non-cash impairment of Oboz goodwill have been excluded from Underlying results. Refer
to Appendix 1 for a reconciliation of Statutory to Underlying results.
BRAND STRENGTHS
F Y 2 4 R E S U L T S P R E S E N T A T I O N
66
•Iconic, inspirational,and authenticbrand.
•Founded in Bells Beach, Australia, in
1969.
•Renowned for high quality technical surfing
products.
•Globaldistribution.
•Diversified revenue streams across wholesale,
licensing, retail and online channels.
•Strong cash contribution.
•B Corp certified since 2023.
•Leading outdoor brand in Australasia.
•Founded in New Zealand in 1987, with deep
New Zealand heritage.
•Pipeline of innovative, sustainable, engineered,
and adaptive products.
•Loyal customers with 1.8 million active Out
There Rewards members.
•History of significantcash generation.
•B Corp certified since 2019.
•Established and distinctive American Montana-
based hiking footwearbrand, founded in 2007.
•Focused, authentic product range with
significant expansion potential.
•Strong innovation pipeline.
•Direct-to-consumeronline channel growing
strongly.
•International expansion underway.
•B Corp certified since 2023.
BRANDS WITH GLOBAL REACH
7
We operate over 300 stores globally, and our brands are sold in over 8,000 locations
NORTH AMERICA
~$205m Sales
30 Owned Stores
24 Licensed Stores
+3,800 Wholesale Doors
F Y 2 4 R E S U L T S P R E S E N T A T I O N
Global office locations
AUSTRALASIA
~$605m Sales (~80% Australia)
270 Owned Stores
21 Licensed Stores
+900 Wholesale Doors
ASIA
~$40m Sales
83 Licensed and JV stores
+600 Wholesale Doors
EUROPE
~$100m Sales
27 Owned Stores
10 Licensed Stores
+2,000 Wholesale Doors
SOUTH AMERICA
~$20m Sales
7 Owned Stores
109 Licensed Stores
+600 Wholesale Doors
AFRICA / MIDDLE EAST
32 Licensed Stores
STRATEGIC PILLARS
88
BUILDING
GLOBAL
BRANDS
Strengthen and expand
our global brand
presence.
ELEVATING
DIGITAL
OPERATIONAL
EXCELLENCE
Optimise efficiency and
effectiveness in
operations.
BEST FOR
PEOPLE AND
PLANET
Embrace responsible and
sustainable business
practices to deliver
positive social,
environmental and
financial impact.
Enhance our digital
capabilities to improve
customer experiences and
engagement.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
GROUP FINANCIAL
PERFORMANCE
9
SECTION 2
F Y 2 4 R E S U L T S P R E S E N T A T I O N
PROFIT & LOSS
10
IMPROVING QUARTERLY SALES TREND
•Continued improvement on first half sales trends during both Q3 and
Q4 (further detail on slide 12).
•Kathmandu’s Australia sales trends have continued to improve in
each quarter. New Zealand market conditions have been more
challenging.
•Rip Curl and Oboz direct-to-consumer (“DTC”) sales outperformed the
wholesale channels. Wholesale accounts continued to reduce their
inventory to manage risk in a challenging economic environment.
GROSS MARGIN REMAINS RESILIENT
•Group gross margin -0.2% of sales, remained resilient with continued
gross margin improvement for Rip Curl and Oboz, offset by increased
promotional activity for Kathmandu.
OPERATING EXPENSES TIGHTLY CONTROLLED
•Underlying operating expenses decreased by $19.6m YOY despite
ongoing inflation pressure, benefiting from restructuring implemented
last year, and lower variable costs associated with lower sales.
•Oboz goodwill has been impaired by $40.3m. The impairment is
driven by a conservative view of near-term US wholesale market
conditions.
1.Statutory results include the impact of IFRS 16 leases. The impacts of IFRS 16, restructuring, the notional amortisation of Rip Curl
and Oboz customer relationships, and a one-off non-cash impairment of Oboz goodwill have been excluded from Underlying
results. Refer to Appendix 1 for a reconciliation of Statutory to Underlying results.
2.FY24 NZD/AUD conversion rate 0.924 (FY23: 0.917), FY24 NZD/USD conversion rate 0.605 (FY23 0.617).
F Y 2 4 R E S U L T S P R E S E N T A T I O N
KMD BRANDSStatutory
Underlying
*1
NZ $m
*2
FY24FY23FY24FY23Var %
SALES979.41,103.0979.41,103.0(11.2%)
GROSS PROFIT576.5651.9576.5651.9(11.6%)
Gross margin58.9%59.1%58.9%59.1%
OPERATING EXPENSES(469.2)(451.9)(526.5)(546.1)(3.6%)
% of Sales47.9%41.0%53.8%49.5%
EBITDA107.2200.150.0105.9(52.8%)
EBITDA margin %11.0%18.1%5.1%9.6%
EBIT(21.1)76.416.074.2(78.4%)
EBIT margin %-2.2%6.9%1.6%6.7%
NPAT(48.3)36.6(1.1)43.3-
DIVERSIFIED SALES
11
F Y 2 4 R E S U L T S P R E S E N T A T I O N
SALES CHANGE FY24 VS FY23
-7.3%
Rip Curl
-14.5%
Kathmandu
-20.0%
Oboz
BY
BRAND
-9.5%
Retail
-6.4%
Online
-15.7%
Wholesale
-18.0%
Licensing / Royalties
BY
CHANNEL
-11.3%
Australia
-13.5%
New Zealand
-15.2%
North
America
-3.9%
Europe
-3.1%
Rest of World
BY
REGION
801.5
922.8
979.8
1,103.0
979.4
FY20
incl. 9 months
of Rip Curl
FY21FY22FY23FY24
SALES BY REGION (NZ $m)
AustraliaNew ZealandNorth AmericaEuropeRest of World
IMPROVING QUARTERLY SALES TREND
12
-4.6%
-13.2%
-7.6%
-2.4%
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
Q1Q2Q3Q4
FY24 YOY Sales Variance % by quarter
-24.2%
-19.4%
-11.1%
-6.9%
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
Q1Q2Q3Q4
FY24 YOY Sales Variance % by quarter
-22.8%
-13.8%
-28.7%
-7.9%
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
Q1Q2Q3Q4
FY24 YOY Sales Variance % by quarter
1
KATHMANDU
•Australian sales trends showed continued
improvement in each quarter, supported by
strategic store openings, enhanced in-store
execution, and improved products.
•Economic settings in New Zealand have
resulted in more challenging consumer
sentiment.
RIP CURL
•Continued improvement on first half trends
during Q3 and Q4.
•DTC led the Q3 and Q4 improvement,
supported by store openings.
•Wholesale sales remained challenging
through the year.
OBOZ
•Strong online sales growth.
•Wholesale sales remained subdued.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
1.Timing of certain wholesale dispatches changed YOY from
April to May, impacting Q3 and Q4 variances.
OMNI-CHANNEL PERFORMANCE
13
F Y 2 4 R E S U L T S P R E S E N T A T I O N
667.5
629.6
663.9
752.4
684.2
15.7%
14.5%
16.3%
13.2%
13.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
FY20FY21FY22FY23FY24
DIRECT TO CONSUMER SALES (NZ $m)
Retail StoresOnlineDTCOnline % of DTC sales
•Kathmandu $47.7m online sales in line with pre-COVID levels, comprising 13.3% of DTC sales.
•Rip Curl $37.9m online sales, significantly above pre-COVID levels, comprising 11.9% of DTC sales.
•Oboz $7.4m online sales, +31.7% above last year.
1.Direct-to-consumer (“DTC”) sales include all sales from retail stores, online sites and marketplaces.
2.All years include a full twelve months of Rip Curl, Kathmandu, and Oboz online and retail store sales for comparability over time, including pre-acquisition.
STRONG BALANCE SHEET
14
F Y 2 4 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 $mJul 24Jan 24Jul 23
Net working capital198.3 226.2 219.7
Inventories266.9 313.6 290.4
Current trade and other receivables89.0 78.4 102.7
Current trade and other payables(157.6) (165.8) (173.4)
Net work ing capital % of sales20.3% 22.1% 19.9%
Stock Turns
*2
1.45x 1.32x 1.54x
Net Debt(59.7) (96.2) (55.7)
Leverage Ratio
*3
1.2x 1.3x 0.5x
Net Debt to Equity
*4
7.1% 10.6% 6.2%
Fixed Charge Cover Ratio (FCCR)
*5
1.26x 1.44x 1.69x
Equity785.7 809.5 841.6
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).
DEBT
•Significant funding headroom c. $230m.
•Amended FCCR covenants in place for Jan 25 (1.20x) and Jul 25 (1.30x).
INVENTORY REDUCING
•Rip Curl and Oboz inventory positions continue to moderate back towards
historical levels, with further moderation expected in the second half of FY25.
•Jul 24 balance includes +$4m increase YOY from translation of regional
inventory balances to NZD reporting currency.
124.2105.0144.7150.5138.4
0.0
50.0
100.0
150.0
200.0
FY20*FY21FY22FY23FY24
RIP CURL INVENTORY
92.3101.5135.798.4104.9
0.0
50.0
100.0
150.0
200.0
FY20FY21FY22FY23FY24
KATHMANDU INVENTORY
12.310.015.141.523.6
0.0
20.0
40.0
60.0
80.0
100.0
FY20FY21FY22FY23FY24
OBOZ INVENTORY
228.8216.5295.5290.4266.9
0.0
100.0
200.0
300.0
FY20*FY21FY22FY23FY24
GROUP INVENTORY
CASH FLOW
15
F Y 2 4 R E S U L T S P R E S E N T A T I O N
Cash Flow (NZ $m) FY24FY23
NPAT(48.3)36.6
Change in working capital28.7(27.7)
Non-cash items164.2138.7
Operating cash flow144.7147.6
Adjusted operating cash flow
*1
53.460.7
Key Line Items:FY24FY23
Net interest paid (including facility fees)
*1
(10.6)(10.3)
Net income taxes paid(4.5)(21.1)
Capital expenditure(32.5)(36.0)
Dividends paid
*2
(22.5)(43.4)
Dividends declared (NZ cents per share)
Interim-2.03.03.0-
Final-3.03.03.0-
Total-5.06.06.0-
0.0
14.2
21.3
21.3
0.0-
21.3
21.3
21.4
-
35.5
42.5
42.7
-
FY20FY21FY22FY23FY24
Dividends declared (NZ $m)
InterimFinal
•No dividend declared as a result of the FY24 operating performance and challenging market conditions.
•Dividend policy remains aligned to earnings profile, with a target payout ratio 50% to 70% of underlying NPAT.
1.Adjusted for impacts of adopting IFRS 16.
2.Dividends paid include dividends to a minority interest partner: FY24 $1.2m, FY23 $0.7m.
BRAND FINANCIAL
PERFORMANCE
16
SECTION 3
F Y 2 4 R E S U L T S P R E S E N T A T I O N
315.7
490.4
536.8
581.5
538.9
11.6%
12.6%
13.0%
10.6%
11.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
FY20*FY21FY22FY23FY24
SALES
StoresOnline
WholesaleLicensing / Other
Total SalesOnline % of DTC
11.765.859.155.642.0
3.7%
13.4%
11.0%
9.6%
7.8%
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
FY20*FY21FY22FY23FY24
EBITDA
EBITDAEBITDA margin
RIP CURL PROFIT & LOSS
17
SALES IMPACTED BY WHOLESALE CUSTOMER CAUTION
•Total sales -7.3% YOY, cycling record sales last year (FY23 sales growth
+8.3% YOY).
•Direct-to-consumer sales (incl. online) -2.8%, reflecting weakened consumer
sentiment in key global markets. Stronger results in Europe, Asia and South
America, helped by store openings.
•Online sales +8.6% to $37.9m, comprising 11.9% of DTC sales.
•Wholesale sales -13.0%, as wholesale accounts continued to reduce their
inventory to manage risk in a challenging economic environment.
GROSS MARGIN AND OPERATING EXPENSES WELL CONTROLLED
•Gross margin increased +0.5% of sales reflecting channel mix, improved
pricing, and exiting low margin business in North America and Europe.
•Operating expenses tightly managed despite continued inflation pressure.
Operating expenses benefited from cost out initiatives and lower variable
costs associated with lower sales.
1.The impacts of IFRS 16, restructuring, and the notional amortisation of customer relationships are excluded from underlying results. Refer to Appendix 2 for a reconciliation of Statutory to Underlying results.
2.FY20 includes 9 months of Rip Curl post-acquisition.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
NZ $mFY24FY23Var %
SALES538.9581.5(7.3%)
EBITDA (underlying
*1
)
42.055.6(24.5%)
EBITDA margin %
7.8%
9.6%
EBIT (underlying
*1
)
28.244.0(35.9%)
EBIT margin %
5.2%
7.6%
Owned stores172169
KATHMANDU PROFIT & LOSS
SALES TRENDS IMPROVING IN AUSTRALIA
•Total sales -14.5% YOY, cycling strong sales growth last year (FY23 sales growth
+10.6% YOY).
•Australia sales
*2
-13.9%
YOY, improving each quarter to -4.5% YOY in the key fourth
quarter winter trading period. Supported by strategic store openings, enhanced in-
store execution, and the launch of new products.
•New Zealand -15.2% YOY in a more challenging consumer environment.
•Online sales decreased by -18.9% YOY to $47.7m, comprising 13.3% of DTC sales.
Improving trend each quarter to -1.5% YOY in Q4.
•International sales $3.0m. Our immediate focus remains on returning the local ANZ
business to sales growth in FY25.
GROSS MARGIN
•Gross margin decreased -2.2% of sales driven by specific clearance of end of line
products in August 2023, increased promotional intensity through Q4, and currency
headwinds. Excluding August 2023, gross margin for the period was -1.4% of sales
lower YOY.
OPERATING EXPENSES REDUCED
•Operating expenses more than $10m lower YOY.
SECTION 4 PROVIDES A PROGRESS UPDATE ON KATHMANDU’S FOCUS AREAS
1.The impacts of IFRS 16, restructuring, and the notional amortisation of customer relationships are excluded
from underlying results. Refer to Appendix 2 for a reconciliation of Statutory to Underlying results.
2.At constant exchange rates.
428.8
357.4
381.6
422.2
361.1
18.6%
16.0%
18.4%
14.0%
13.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0
100.0
200.0
300.0
400.0
500.0
FY20FY21FY22FY23FY24
SALES
StoresOnline
WholesaleOnline % of DTC
66.937.936.452.516.0
15.6%
10.6%
9.5%
12.4%
4.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
FY20FY21FY22FY23FY24
EBITDA
EBITDAEBITDA margin
NZ $mFY24FY23Var %
SALES361.1422.2(14.5%)
EBITDA (underlying
*1
)
16.052.5(69.6%)
EBITDA margin %
4.4%
12.4%
EBIT (underlying
*1
)
(3.3)33.3-
EBIT margin %
-0.9%
7.9%
Owned stores162158
18
F Y 2 4 R E S U L T S P R E S E N T A T I O N
OBOZ PROFIT & LOSS
19
SALES IMPACTED BY WHOLESALE CUSTOMER CAUTION
•Total sales -20.0% YOY, cycling record sales last year (FY23 sales growth
+61.8% YOY).
•Strong online sales growth +31.7%, with increased traffic, conversion, and
strategic promotional activity.
•Wholesale sales -23.1% as wholesale accounts continued to reduce their
inventory to manage risk in a challenging economic environment. Impacted
by post-COVID industry challenges in the North American outdoor footwear
category.
GROSS MARGIN AND OPERATING EXPENSES WELL CONTROLLED
•Gross margin increased +2.1% of sales with improved channel mix,
improved pricing, and new product introductions.
•Operating expenses include investment in brand, product, and online to
support long-term growth objectives, including international expansion.
•Operating expense investment to be leveraged with future sales growth as
the market recovers.
GOODWILL IMPAIRMENT
•Oboz goodwill has been impaired by $40.3m. This one-off non-cash item
does not impact the day-to-day operations of the business.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
1.The impacts of IFRS 16, restructuring, the notional amortisation of customer relationships, and a one-off non-cash
impairment of Oboz goodwill have been excluded from underlying results. Refer to Appendix 2 for a reconciliation
of Statutory to Underlying results.
57.0
75.0
61.3
99.3
79.4
0.0
20.0
40.0
60.0
80.0
100.0
FY20FY21FY22FY23FY24
SALES
OnlineWholesale
7.611.83.37.9
-0.2
13.3%
15.7%
5.4%
8.0%
-0.3%
-7.0%
-2.0%
3.0%
8.0%
13.0%
18.0%
23.0%
28.0%
33.0%
38.0%
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
FY20FY21FY22FY23FY24
EBITDA
EBITDAEBITDA margin
NZ $mFY24FY23Var %
SALES79.499.3(20.0%)
EBITDA (underlying
*1
)
(0.2)7.9-
EBITDA margin %
-0.3%
8.0%
EBIT (underlying
*1
)
(1.1)7.1-
EBIT margin %
-1.4%
7.1%
KATHMANDU
UPDATE
20
SECTION 4
F Y 2 4 R E S U L T S P R E S E N T A T I O N
CUSTOMER
Exceed the
expectations of
Outdoor Enthusiasts
REFINE BRAND EXECUTION
KATHMANDU FOCUS
21
REDUCE RELIANCE ON OUTERWEAR
PRODUCT
BRAND
•Innovation and investment in broader categories to
address year-round needs.
•Faster and more regular product drops.
•Expand third party brand strategy..
•Brand marketing more authentic to the outdoors.
•Loyalty: ‘Out thererewards’launched. Continue to
expand with further targeted personalisation.
•Premium Brand and Product experience in store and
online – bringing to life an authentic outdoors
connection, with technical and sustainable features.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
PRODUCT PROGRESS
22
•Successful 2024 launch of new products including Trailhead stretch and
insulated rainwear, and Seeker active range.
•Second iteration of quick-to-market heritage fleece and t-shirts, with the
initial launches driving strong sales.
•Increased range of third-party brands including On Running, Salomon,
and Teva, plus Hydroflask, Blunt umbrellas and Korjo travel accessories.
•New product architecture defined, focused on key activities Hike,
Outdoor Active, and Adventure Travel.
•A material investment in product design, development and
merchandising talent.
•Spring/Summer 2025 upcoming launches include:
•Hike: New UPF range with excellent breathability and comfort while
protecting from the sun, keeping you out there longer.
•Outdoor Active: Innovative Seeker range expansion, uses innovative
carbon capture technology, turning factory emissions into polyester
fibres.
•Adventure Travel: Patent Pending and ISPO Award Winning Feather
Flight carry-on, the lightest in class and extremely durable carry-on.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
REDUCE RELIANCE ON OUTERWEAR
BRAND PROGRESS
23
•New creative agency engaged. First campaign launched in September
2024. The campaign marks an authentic shift toward showcasing the
ruggedness and realness of New Zealand’s outdoor landscape, while
communicating the happiness humans experience inside when they
spend time outside.
•Campaign shot on Great Barrier Island, New Zealand featuring Great
Barrier Island locals.
•Out There Rewards replaced Summit Club, with a tiered system that
encourages and rewards members for getting ‘out there’ in the outdoors.
1.8 million active members can now earn points for participating in
outdoor activities.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
REFINE BRAND EXECUTION
CUSTOMER EXPERIENCE
24
•Removed fixtures and fittings to elevate the brand and
product experience in-store, enabling a more streamlined
consumer journey.
•Commencement of bringing to life the new range
segmentation for our customers. Activity Pillars: Hike,
Outdoor Active, and Adventure Travel.
•Focused merchandising around these activity pillars to
provide an enhanced customer experience and bring
technical and sustainable features to life:
•signage to support activity wayfinding,
•opening floor layouts and repositioning fixtures & high
walls for better sightlines, zoning and flow.
•Store of the future design concept being finalised, to be rolled
out in Chadstone this financial year.
•Ecommerce megamenu redesign, search engine optimisation
and new payment methods online have quickly improved
conversion and consumer journey.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
EXCEED THE EXPECTATIONS OF
OUTDOOR ENTHUSIASTS
FY25 FOCUS AND
OUTLOOK
25
SECTION 5
F Y 2 4 R E S U L T S P R E S E N T A T I O N
CONTINUED BRAND INNOVATION
26
RIP CURL: EDDIE AIKAU BIG WAVE
INVITATIONAL
•Rip Curl’s latest partnership in a 55-year
history of championing iconic surfing events.
•The world’s best big-wave surfers are invited
to compete at Waimea Bay, Hawaii in honour
of legendary waterman Eddie Aikau.
•Global audience of an estimated 3.5 million for
the last running of the event, plus nearly
50,000 spectators at Waimea Bay.
•Strong merchandise sales, particularly in
mainland USA and Hawaii.
KATHMANDU: FEATHER FLIGHT
•Carry-on luggage with a patent-pending hard
shell. Designed for lightness, stability, and
durability.
•Kathmandu continues to push the boundaries
of product innovation in the textiles industry.
One of the lightest bags in its class, globally,
for airline travel.
•Made from 93 per cent recycled nylon 6
combined with recycled ultra-high molecular
weight polyethylene.
•ISPO Award Winner 2024.
•Available in stores this summer.
OBOZ KATABATIC LT
•Our lightest and most breathable
collection to date that will steal the
attention of those who opt for trail running
footwear for their ‘fast and light’ hiking
adventures.
•Utilising waterproof and breathable
GORE-TEX Invisible Fit technology.
•Katabatic LT demonstrates the brand’s
market-leading innovation pipeline as
consumers continue to move toward
lighter faster footwear.
•Available in stores February 2025.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
FY25 FOCUS AND OUTLOOK
27
Stabilise sales and return to growth
Grow gross margin
Continue to simplify our business
Ongoing working capital reduction and efficiency
Return to dividends
TRADING UPDATE
•DTC sales for the first 8 full weeks to 22 September:
•Kathmandu Australia +2.1% YOY, a further improvement on the Q4 FY24 sales
trend. Kathmandu New Zealand -23.2% YOY, cycling strong end of line clearance
sales in August last year.
•Kathmandu gross profit dollars for the first 8 full weeks to 22 September are
+5.1% above the equivalent period last year.
•Rip Curl global DTC approximately -5% lower YOY, compared to FY24 DTC sales
-2.8% YOY in a seasonally non-significant trading period.
•Wholesale forward orders are moderating from double-digit declines in FY24 to single
digit declines for the first half of FY25. We are seeing order book growth YOY for some
regions in 2H FY25, noting that sell-in is not yet complete.
OUTLOOK
•Caution on consumer sentiment and the global macroeconomic environment.
•Wholesale accounts remain cautious on pre-season commitments.
•Global inflationary pressures are easing, but it will take time to directly impact consumer
spending.
•We remain focused on returning to sales growth and improving profitability in FY25.
•We believe with our portfolio of iconic global outdoor brands and leadership in
sustainability, we remain a unique investment proposition and well-placed for the future.
FY25 FOCUS
F Y 2 4 R E S U L T S P R E S E N T A T I O N
QUESTIONS
28
F Y 2 4 R E S U L T S P R E S E N T A T I O N
APPENDICES
29
SECTION 6
F Y 2 4 R E S U L T S P R E S E N T A T I O N
OWNER OF
LEADING GLOBAL
OUTDOOR BRANDS
30
OUR PURPOSE
Inspiring people to explore
and love the outdoors
OUR VISION
To be the leading family of
global outdoor brands -
designed for purpose, driven
by innovation, best for people
and planet
F Y 2 4 R E S U L T S P R E S E N T A T I O N
MEDIUM-TERM
SHORT-TERM
KPI PROGRESS UPDATE
31
Kathmandu’s International Sales target of $100m remains a long-term goal. Our immediate focus remains on stabilising and growing the local ANZ business.
160
155
158
162
Jul 21Jul 22Jul 23Jul 24Target
KATHMANDU RETAIL STORE COUNT
~200
>>
31
11.9%
9.4%
9.6%
5.1%
15.0%
Jul 21Jul 22Jul 23Jul 24Target
EBITDA MARGIN
*1
% of sales
>>
1.Underlying EBITDA excluding the impacts of IFRS 16 leases, restructuring, and a one-off non-cash impairment of Oboz goodwill.
122.1
134.3
142.8
126.2
Jul 21Jul 22Jul 23Jul 24Target
RIP CURL NORTH AMERICA SALES
NZ $m
~200
>>
14.9%
21.1%
19.9%
20.3%
18.0%
Jul 21Jul 22Jul 23Jul 24Target
WORKING CAPITAL
% of sales
>>
52.4
41.3
61.2
48.1
Jul 21Jul 22Jul 23Jul 24Target
OBOZ SALES OPPORTUNITY
US $m
~100
>>
FY24 performance impacted progress toward the
Group’s KPI targets.
Strategic plans remain unchanged, with
confidence in the Group’s ability to drive towards
these targets as consumer sentiment improves.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
OWNED STORES BY BRAND
32
165
162
160
158
155155
158
160
162
Jul 20Jan 21Jul 21Jan 22Jul 22Jan 23Jul 23Jan 24Jul 24
KATHMANDU OWNED STORE COUNT
160
162
160
162
161
170
169169
172
Jul 20Jan 21Jul 21Jan 22Jul 22Jan 23Jul 23Jan 24Jul 24
RIP CURL OWNED STORE COUNT
F Y 2 4 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
33
F Y 2 4 R E S U L T S P R E S E N T A T I O N
GROUPFY24FY23
Amortisation ofAmortisation of
NZ $mStatutory
IFRS 16
Leases
*1
Restructuring
*2
Customer
Relationships
*3
Oboz
impairment
*4
UnderlyingStatutory
IFRS 16
Leases
*1
Restructuring
*2
Customer
Relationships
*3
Underlying
SALES
979.4 - - - - 979.4 1,103.0 - - - 1,103.0
GROSS PROFIT
576.5 - - - - 576.5 651.9 - - - 651.9
Gross margin58.9%58.9%59.1%59.1%
OPERATING EXPENSES
(469.2) (99.6) 2.1 - 40.3 (526.5) (451.9) (98.2) 4.0 - (546.1)
% of Sales47.9%53.8%41.0%49.5%
EBITDA
107.2 (99.6) 2.1 - 40.3 50.0 200.1 (98.2) 4.0 - 105.9
EBITDA margin %11.0%5.1%18.1%9.6%
EBIT
(21.1) (10.6) 2.1 5.3 40.3 16.0 76.4 (11.4) 4.0 5.3 74.2
EBIT margin %-2.2%1.6%6.9%6.7%
NPAT
(48.3) 1.8 1.4 3.7 40.3 (1.1) 36.6 0.1 2.8 3.7 43.3
1.Statutory results include the impact of IFRS 16 leases. The impact of IFRS 16 is excluded from Underlying results.
2.Support office restructuring was undertaken in both FY23 and FY24. These one-off costs have been excluded from Underlying results.
3.Notional amortisation of Rip Curl and Oboz customer relationships are excluded from Underlying results.
4.Oboz goodwill from acquisition has been impaired by $40.3m. The impairment is driven by a conservative view of near-term US wholesale market conditions. This one-off non-cash item does not impact the day-to-day operations of
the business and has been excluded from Underlying results.
APPENDIX 2: SEGMENT NOTE
34
F Y 2 4 R E S U L T S P R E S E N T A T I O N
FY24FY23FY24
SALES (NZ $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
SALES per segment note
538,910 361,081 79,424 - 979,415 581,504 422,233 99,257 - 1,102,994
SALES (Underlying)
538,910 361,081 79,424 - 979,415 581,504 422,233 99,257 - 1,102,994
EBITDA (NZ $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
EBITDA per segment note
82,634 72,913 (40,065) (8,247) 107,235 97,079 105,322 8,228 (10,560) 200,069
IFRS 16 Leases
*1
(41,615) (57,474) (506) - (99,595) (43,687) (54,000) (466) - (98,153)
Restructuring
*2
956 558 - 546 2,060 2,172 1,221 134 450 3,977
Amortisation of Customer Relationships
*3
- - - - - - - - - -
Oboz impairment
*4
- - 40,331 - 40,331 - - - - -
EBITDA (Underlying)
41,975 15,997 (240) (7,701) 50,031 55,564 52,543 7,896 (10,110) 105,893
EBIT (NZ $'000)Rip CurlKathmanduObozCorporateTotalRip CurlKathmanduObozCorporateTotal
EBIT per segment note
25,734 3,375 (41,769) (8,408) (21,068) 42,124 38,243 6,603 (10,614) 76,356
IFRS 16 Leases
*1
(3,523) (7,191) 134 - (10,580) (5,390) (6,143) 138 - (11,395)
Restructuring
*2
956 558 - 546 2,060 2,172 1,221 134 450 3,977
Amortisation of Customer Relationships
*3
5,065 - 204 - 5,269 5,103 - 200 - 5,303
Oboz impairment
*4
- - 40,331 - 40,331 - - - - -
EBIT (Underlying)
28,232 (3,258) (1,100) (7,862) 16,012 44,009 33,321 7,075 (10,164) 74,241
1.Statutory results include the impact of IFRS 16 leases. The impact of IFRS 16 is excluded from Underlying results.
2.Support office restructuring was undertaken in both FY23 and FY24. These one-off costs have been excluded from Underlying results.
3.Notional amortisation of Rip Curl and Oboz customer relationships are excluded from Underlying results.
4.Oboz goodwill from acquisition has been impaired by $40.3m. The impairment is driven by a conservative view of near-term US wholesale market conditions. This one-off non-cash item does not impact the day-to-day operations of
the business and has been excluded from Underlying results.
APPENDIX 3: BALANCE SHEET
35
F Y 2 4 R E S U L T S P R E S E N T A T I O N
Balance Sheet (NZ $m)Jul 24Jan 24Jul 23
Inventories266.9 313.6 290.4
Property, plant and equipment86.5 84.7 82.9
Right of Use Asset (IFRS 16)262.6 257.5 270.3
Intangible assets666.9 696.2 704.4
Other assets120.8 119.4 136.0
Total assets (excl. cash)1,403.7 1,471.4 1,484.0
Net interest bearing liabilities and cash(59.7) (96.2) (55.7)
Lease Liability (IFRS 16)(294.2) (289.5) (302.1)
Other non-current liabilities(105.6) (109.0) (109.3)
Other current liabilities(158.5) (167.2) (175.3)
Total liabilities (net of cash)(618.0) (661.9) (642.4)
Net assets785.7 809.5 841.6
IMPORTANT NOTICE AND DISCLOSURE
36
This presentation prepared by KMD Brands Limited (the “Company” or the “Group”) (NZX/ASX: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 in those 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 particular person. 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 could cause 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 events may 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 stated and 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.
F Y 2 4 R E S U L T S P R E S E N T A T I O N
---
Annual Integrated Report
2024
CONTENTS
Modern Slavery Statement
2024
Modern Slavery Statement
GRI & SASB Index
2024
GRI & SASB Index
Corporate Governance
Statement
2024
Corporate Governance Statement
Reporting suite
This report should be read in conjunction with the other documents that comprise the 2024 reporting
suite, which can be accessed by clicking the below images or visiting: kmdbrands.com/reports
KMD Brands acknowledges Tangata Whenua, the Indigenous Nations, First Peoples, and Custodians of the
lands and waterways on which our brand head offices reside in New Zealand, Australia and the United States.
We pay our respects to their Elders past and present.
About KMD Brands
KMD Brands is a global outdoor lifestyle and sports
company, proudly certified as a B Corporation. The
Group consists of three iconic brands: Kathmandu,
Oboz and Rip Curl.
Kathmandu, founded in 1987 in Christchurch, New
Zealand, equips people for travel and adventure.
Outdoor footwear brand Oboz, based in Bozeman,
Montana, in the United States, joined our Group
in 2018. Bozeman is the gateway to Yellowstone
National Park. Rip Curl, a leading global surf brand
born in Bells Beach, in the Australian state of Victoria
in 1969, became part of our family in 2019.
KMD Brands Limited is publicly listed on the New
Zealand Stock Exchange (NZX) and Australian Stock
Exchange (ASX). Initially listing in 2009 as Kathmandu
Holdings Limited, we rebranded to KMD Brands
Limited in 2022 to reflect our multi-brand nature and
future strategy, while still honouring our history.
1. OVERVIEW ............................................................2
Our group ......................................................................4
Global footprint ..........................................................6
FY24 performance overview ..............................8
Chair and CEO message .....................................10
Our board and executive team .......................12
Governance at KMD Brands .............................14
2. CREATING VALUE .........................................16
Our strategy ..............................................................18
Our creative power ...............................................28
Our products and channels .............................32
Our people .................................................................36
Our partnerships ....................................................42
Our environment ....................................................48
Our funding ...............................................................56
3. FINANCIAL REPORT .................................58
Financial statements ...........................................60
Auditors report .....................................................108
4. ADDITIONAL DISCLOSURES ............112
Statutory information .........................................114
Directory ....................................................................119
Our partners ...........................................................120
About this report
This integrated report outlines our financial,
economic, social and environmental performance
for the year ending 31 July 2024. It marks
our third year of integrated reporting.
We have prepared this report using the International <IR>
Framework. This communicates the full range of factors
affecting our ability to create value over time, and our
commitment to transparency and robust disclosure of
Environmental, Social and Governance (ESG).
KPMG has audited the financial statements, prepared
in accordance with New Zealand equivalents to
International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards (IFRS).
Non-financial information is reported with reference to
the Global Reporting Initiative (GRI) Universal Standards.
External assurance on non-financial data and information
has not been obtained.
We are working towards publishing our first climate
disclosure under the Aotearoa New Zealand Climate
Standards (NZ CS) later this year, where we will report
on our climate-related risks and opportunities and their
integration in our business strategy.
This report serves as KMD Brands’ 2024 Annual Report
to shareholders and meets the requirements of the NZX
Corporate Governance Code dated 1 April 2023.
GRI 2-5GRI 2-2
1. OVERVIEW
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4. ADDITIONAL DISCLOSURES
1
OVERVIEW
1.
KMD Brands Annual Integrated Report 202423
2. CREATING VALUE
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4. ADDITIONAL DISCLOSURES
1. OVERVIEW
Our groupOur brands
KMD Brands is a family of outdoor brands
dedicated to designing products for purpose,
driven by innovation and committed to being the
best for people and the planet. Our products are
specifically crafted for the outdoors and rigorously
tested by experts in real-world conditions.
As the parent company, KMD Brands provides vision
and strategic guidance, making Kathmandu, Oboz
and Rip Curl greater than the sum of their parts.
By sharing expertise in technology, research and
development, and by leveraging operational excellence
in sourcing, supply chain and systems, we deliver
the best customer experience across our brands.
OUR PURPOSE AND VISION
Our purpose and vision are motivated by our love of
the outdoors and a steadfast commitment to protecting
our natural environment and the people touched by
our brands.
We proudly contribute to a global cultural shift that
is redefining success, building a more inclusive and
sustainable economy, and uses business as a force
for good.
By championing responsible practices across our
brands, we protect the experiences and exhilaration
offered by the outdoors, which means so much to us
and our customers.
Kathmandu’s journey began in Aotearoa New Zealand more than 30 years
ago. We’re on a mission to improve the wellbeing of the world by getting
more people outdoors – because nature has a positive transformative
effect on us all. The outdoors makes us happier, more open, free and fun.
Our vision at Kathmandu is to be the world’s most loved outdoor brand.
Born in the legendary Greater Yellowstone Ecosystem, just outside our
front door, the mountains near Bozeman beckon us. This 10-million-
acre laboratory is where we test our designs and draw inspiration
for new ideas. It’s where we immerse ourselves in nature’s wonders.
It even inspired our name “Oboz” (Outside + Bozeman = Oboz).
Founded in 1969 in Bells Beach, Australia, Rip Curl is the ultimate surfing
company. For more than 50 years, we have led the surfing market and
become synonymous with surf culture. ‘The Search’ – the relentless
pursuit of the perfect wave – lives in the spirit of everything we do.
Our vision is to be the ultimate surfing company in all that we do.
PURPOSE
INSPIRING PEOPLE TO EXPLORE
AND LOVE THE OUTDOORS.
TO BE THE LEADING FAMILY OF
GLOBAL OUTDOOR BRANDS –
DESIGNED FOR PURPOSE, DRIVEN
BY INNOVATION, BEST FOR PEOPLE
AND PLANET.
VISION
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1. OVERVIEW
Global footprint
NORTH AMERICATOTAL
Owned stores30
Licensed stores24
Wholesale doors+3,800
Materials sourcingUSA, Mexico
Factories1
SOUTH AMERICATOTAL
Owned stores7
Licensed stores109
Wholesale doors+600
Materials sourcingBrazil
Factories9
FRANCE
BRAZIL
USA
CANADA
Bozeman
Vancouver
San Clemente
Global Office Locations
São Paulo
Hossegor
AUSTRALASIATOTAL
Owned stores270
Licensed stores21
Wholesale doors+900
Materials sourcing
Australia,
New Zealand
Factories 5
ASIATOTAL
Licensed and JV stores83
Wholesale doors+600
Materials sourcing
Vietnam, China, Thailand,
Taiwan, Japan, Indonesia, South
Korea, Bangladesh, India, Nepal
Factories 130
EUROPETOTAL
Owned stores27
Licensed stores10
Wholesale doors+2,000
Materials sourcingItaly, France
Factories 4
AFRICA &
MIDDLE EASTTOTAL
Licensed stores32
Materials sourcingSouth Africa
Factories 0
NEW ZEALAND
AUSTRALIA
INDONESIA
THAILAND
JAPAN
Chiang Mai
Fujisawa
Bangkok
Bali
Torquay
Christchurch
Melbourne
GRI 2-1
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1. OVERVIEW
FY24 vs. FY23
1. Statutory results include the impact of IFRS 16 leases. The impacts of IFRS 16, restructuring, the notional amortisation of Rip Curl and
Oboz customer relationships, and a one-off non-cash impairment of Oboz goodwill have been excluded from Underlying results.
Refer to Appendix 1 of the FY24 Results Presentation for a reconciliation of Statutory to Underlying results.
$979.4m
Total sales
-11.2%
decrease
58.9%
Gross margin
-0.2% of sales
FY23 59.1%
$50.0m
Underlying EBITDA
1
-52.8%
decrease
-$1.1 m
Underlying NPAT
1
loss
$43.3m
Underlying NPAT
1
profit
Statutory NPAT profit
FY23
-$48.3m
Statutory NPAT loss
$36.6m
FY23
NET DEBT BALANCENET WORKING CAPITAL
$59.7m
c. $230m
Bank facility headroom
$198.3m
-9.7% YOY
Jul 23 $219.7m
FY24 performance overview
SALES CHANGE FY24 VS. FY23
By
Brand
-7. 3%
Rip Curl
-14.5%
Kathmandu
-20.0%
Oboz
KATHMANDU
SALES MIXTOTAL SALES
NZD
$361.1m
ONLINE SALES
NZD
$47.7m
representing 13.3% of
direct-to-consumer sales
OBOZ
SALES MIX
RIP CURL
-15.7%
Wholesale
-18.0%
Licensing / Royalties
- 6.4%
Online
-9.5%
Retail
By
Channel
By
Region
-11.3%
Australia
-13.5%
New Zealand
-15.2%
North
America
-3.9%
Europe
-3.1%
Rest of world
Wholesale 1%
Online 9%
Online 7%North America 23%
Wholesale 39%
Online 13%
Retail 86%
Wholesales 91%
Retail 52%
AU & NZ 46%
Other 2%
Channel
Channel
Channel
International 1%
International 10%
Rest of World 13%
New Zealand 27%
Canada 7%
Europe 18%
Australia 72%
USA 83%
Region
Region
Region
TOTAL SALES
NZD
$79.4m
TOTAL SALES
NZD
$538.9m
ONLINE SALES
NZD
$7.4m
+31.7% above last year
ONLINE SALES
NZD
$37.9m
representing 11.9% of
direct-to-consumer sales
SALES MIX
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1. OVERVIEW
1. Statutory results include the impact of IFRS 16 leases. The impacts of IFRS 16, restructuring, the notional amortisation of Rip Curl and Oboz customer relationships,
and a one-off non-cash impairment of Oboz goodwill have been excluded from Underlying results. Refer to Appendix 1 of the FY24 Results Presentation for a
reconciliation of Statutory to Underlying results
Michael Daly LEFT
Managing Director and Chief Executive Officer
Chair and CEO message
In FY24, we marked our third year of aligning our
reporting with the <IR> framework. This year, we’ve further
refined our approach by structuring the report around the
key resources we depend on to create long-term value
for our investors and shareholders. We plan to continue
reporting in this manner, providing greater transparency
on the value of the Group and our three iconic brands.
FY24 was a difficult year. The Board believes the power
of the Group and brands will see us through this
cyclical downturn.
FY24 performance
Group sales were 11.2% below last year’s record
result; and decreased for all three of our brands.
Kathmandu had a disappointing first half, with a
combination of weaker consumer sentiment, the
warmest winter on record in Australia, and reliance on
winter weight product, all contributing to lower sales.
Sales trends improved in Kathmandu’s largest market,
Australia, in the third and fourth quarters, supported
by strategic airport and DFO store openings, enhanced
in-store execution and the launch of new products.
Economic settings in New Zealand have resulted
in a more challenging consumer environment.
Rip Curl and Oboz cycled record sales last financial
year, with direct-to-consumer sales outperforming
the wholesale channel this year. Wholesale accounts
continued to reduce their inventory to manage
risk in a challenging economic environment.
Rip Curl direct-to-consumer sales showed continued
improvement on first half trends during the third
and fourth quarters. Stronger results were recorded
in Europe, Asia and South America, helped by
new store openings in Europe and Brazil.
Oboz wholesales were impacted by post-COVID
industry challenges in the North American outdoor
footwear category. The brand benefited from diversified
sales channels, and strong online sales growth.
Gross margin remained resilient, decreasing just
0.2% below last year overall. Continued gross margin
improvement for Rip Curl and Oboz was offset by
increased promotional activity for Kathmandu.
Underlying operating costs were $19.6 million below
last year
1
despite ongoing inflation, benefiting from
restructuring implemented last year and lower
variable costs associated with lower sales.
Net working capital was $21.4 million lower than
31 July 2023 despite lower sales, with inventory
significantly reduced. Rip Curl and Oboz inventory
continue to track back to historical levels.
Strategy
We remain guided by our vision to be the world’s leading
family of global outdoor brands – designed for purpose,
driven by innovation, best for people and planet.
We remain focused on our strategic pillars: Building Global
Brands; Elevating Digital; Operational Excellence; and being
Best for People and Planet (previously Lead in ESG).
We continued to invest in innovation, products and
channels to Build Global Brands.
Our initiatives to Elevate Digital focused on improving
customer experience and engagement and standardising
systems to deliver efficiencies.
Our focus on integrated logistics, investment in systems
and sharing best practice drove Operational Excellence
across the Group.
As a B Corporation, our dedication to being Best
for People and Planet saw us continue to embrace
responsible and sustainable business practices,
delivering positive social and environmental impact.
As a result we continue to be an employer of choice.
Kathmandu
At our first half results release, we set out the Kathmandu
brand’s product and marketing challenges. Our goal
to reduce the brand’s reliance on outerwear and
refine its brand marketing execution continues.
Kathmandu’s product and marketing teams have
been realigned. Chief Executive Megan Welch has
separated digital from marketing, hired a new GM of
Digital and consolidated most roles in the brand’s
Christchurch headquarters to ensure cohesion.
New products and enhanced in-store execution improved
second half sales trends relative to FY23, particularly in
Australia. A new, more authentic brand identity campaign
has also been developed and will launch in early FY25.
The Board of Directors is encouraged by the
improvements underway and optimistic for the trajectory
of the brand. The Board remains committed to positioning
Kathmandu as the market leading premium outdoor
brand in ANZ.
Dividend
Our dividend policy remains aligned to earnings,
with a target payout ratio of 50% to 70% of
underlying NPAT. Given FY24 operating performance
and continuing challenging market conditions,
Directors have not declared a final dividend.
Outlook
Given the global macroeconomic environment, we
remain cautious about consumer sentiment. Inflationary
pressures are easing, but it will take time to impact
consumer spending.
We present to you the Financial Year ‘24 Annual Integrated Report for KMD
Brands. In this report, you will find a holistic overview of our business,
including how we create value for all our stakeholders, the material issues
that we have encountered this year, and how we are addressing these.
We continue to focus on tightly controlling operating
expenses and capital investments, enhancing and
growing our gross margin, and simplifying our business to
drive cost efficiency.
Our brands have a great deal of equity, and exciting
product development opportunities that will see them
through these challenging conditions.
On behalf of the Board, we acknowledge the decline in
share price and assure investors that we are committed
to taking action to improve financial performance and
enhance shareholder value. It is the Board's view that
the current share price materially undervalues our group
of iconic brands. We thank our shareholders for their
continued support and our KMD Brands employees
for their dedication during a challenging year.
We remain focused on returning to sales growth
and improving profitability in FY25. We believe
that our portfolio of iconic global outdoor brands
and leadership in sustainability makes us a unique
investment proposition in this part of the world.
David Kirk RIGHT
Chairman
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1. OVERVIEW
Our board and executive team
2. Brent Scrimshaw
Non-Executive Director
Appointed 2 October 2017
4. Andrea Martens
Non-Executive Director
Appointed 1 August 2019
6. Abby Foote
Non-Executive Director
Appointed 15 October 2021
7. Zion Armstrong
Non-Executive Director
Appointed 1 December 2022
3. Philip Bowman
Non-Executive Director
Appointed 2 October 2017
5. Michael Daly
Managing Director/Chief Executive Officer
Appointed 19 May 2021
1. David Kirk
Chairman
Appointed 21 November 2013
The Board provides overall strategic oversight of KMD Brands,
including adherence to best-practice governance principles,
maintenance of high ethical standards and protection of core
values so that the Group is managed effectively and responsibly.
A brief biography of each Board member can be found in the “Board
and Management” section of the company’s investor website.
Our FY24 Corporate Governance Statement, including Director
Skills Matrix, is available on the company's investor website.
Michael Ross
Chief Information Officer
Joined KMD Brands in 2024
Brooke Farris
Chief Executive Officer, Rip Curl
Joined Rip Curl in 2010
Amy Beck
President Oboz & KMD Brands,
North America
Joined Oboz in 2019
Frances Blundell
Chief Legal & ESG Officer
Joined Kathmandu in 2017
Linda Barlow
Chief People Officer
Re-joined Rip Curl in 2019
Lachlan Farran
Chief Commercial Officer and
Interim Co-Chief Financial Officer
Re-joined Rip Curl in 2016
Mathieu Lefin
President KMD Brands, Europe
Joined Rip Curl in 2009
Michael Daly
Managing Director &
Chief Executive Officer
Joined Rip Curl in 2002
Megan Welch
Chief Executive Officer, Kathmandu
Joined Kathmandu in August 2023
The management team takes care of the day-to-day management
and operation of KMD Brands, regularly reporting to the Board on
all aspects of group performance.
A brief biography of each member of the management team
can be found in the “Board and Management” section of the
company’s investor website.
LEFT – RIGHT: Michael Daly, Abby Foote, Brent Scrimshaw, David Kirk, Philip Bowman, Andrea Martens, Zion Armstrong.
Ben Washington
Interim Co-Chief Financial Officer
Joined KMD Brands in 2020
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1. OVERVIEW
Governance at KMD Brands
Led by a talented group of non-executive directors
and an experienced management team, KMD
Brands has a clear purpose and vision, and a defined
corporate strategy. Our well-established policies
and goals support sustainable development and
our commitment to the B Corp movement.
Kathmandu became a certified B Corporation in 2019
and recertified in 2023. Rip Curl and Oboz achieved
B Corp Certification for the first time in 2023. B Corp
is a governance structure, underpinned by a “benefit
mindset”, that balances purpose and profit. As a
business, we consider the impact of our decisions on
all stakeholders: employees, customers, the community,
the environment, shareholders, and workers in our
global supply chain. We empower employees to
consider the same principles when make decisions.
B Corps are part of a global movement driving a
more inclusive, equitable and regenerative economic
system. B Corp Certification – and recertification every
three years – guides KMD Brands’ Environmental,
Social and Governance (ESG) impact strategy and
provides a framework for continuous improvement.
The process to become B Corp Certified differs from
other ESG reporting frameworks by providing transparent
reporting and disclosure, and evaluating and validating
company performance. This enhances accountability and
transparency, giving us a pathway to reduce our negative
impacts and create value for people and the planet.
Our Group Code of Ethics embeds the benefit
mindset into employee expectations. ESG
responsibilities are included in all job descriptions,
employee goal-setting and performance reviews.
The benefit mindset is reflected in the Group’s policy
commitment to responsible business conduct.
Our culture of innovation is also aligned to ensure
new products respond to the needs of our customers
and enhance efficiencies in our business, while
minimising adverse social or environmental impacts.
KMD Brands is committed to leading the way by
considering our impact on people and planet in our
business and governance practices. This approach
protects the business for the long term, enhancing
its value, supporting future financial success and
preparing for future regulatory requirements.
These principles align with our fundamental purpose and
vision. Getting people outside and enjoying the outdoors is
at the heart of all our brands. While we are in business for
profit, we aim to be a robust and responsible business for
the long term, and B Corp Certification positions us for this.
At KMD Brands, our purpose is to inspire people to explore and
love the outdoors. This purpose drives our vision to be the leading
family of global outdoor brands – designed for purpose, driven by
innovation, best for people and planet.
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1. OVERVIEW
KMD Brands Annual Integrated Report 202414
C R E AT I N G
VA LU E
2.
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2. CREATING VALUE
By considering these material issues across the
resources we rely on to create value, we disclose
the significant impacts on value creation, preservation
and erosion, as defined under the Integrated
Reporting Framework.
Building on the significant progress we've made under
our "Lead in ESG" pillar, we have updated it to "Best for
People and Planet" to reflect our broader commitment.
This evolution allows us to maintain our momentum while
placing our employees firmly at the heart of what we do.
For more details, see "Our People" on page 36.
Four pillars support KMD Brands’ growth as a global,
multi-channel business and address our key material
issues. Amid challenging and disruptive global
conditions, we prioritise a flexible balance sheet that
supports capital returns and future acquisitions.
In the subsequent sections of this report, we outline
our observations and responses to the material
issues we encountered during the year. We consider
how our strategic pillars help us mitigate risks and
capitalise on opportunties for KMD Brands.
Our strategic pillars:
BUILDING GLOBAL BRANDS
We are building brands to connect with customers around the world. Our goal is for Rip
Curl to be recognised throughout North America, be among Europe’s top three surf brands,
and maintain its reputation as the ultimate surf brand in Australasia, South America and
South East Asia. Kathmandu is now attracting customers in Canada and Europe, proudly
sharing its New Zealand origins and maintaining its market leadership in Australasia. We
are leveraging our infrastructure in Europe and Australasia to launch Oboz in Australia, New
Zealand and Europe.
OPERATIONAL EXCELLENCE
To fuel our expansion efforts, we champion collaboration across our businesses. We
are investing in programs that strengthen cross-brand connections, drive supply chain
efficiencies and core-system capabilities. We are unlocking product innovation by working
together to ensure each brand’s products resonate in the market and continue to lead
in their respective categories. Operational excellence drives our success by improving
working capital, scaling efficiencies and sharing financial benefits to maintain a sustainable
growth trajectory.
ELEVATING DIGITAL
We are elevating our digital experience by investing in platforms that deliver a world-
class experience to everyone – consumers, wholesale partners, suppliers and our own
employees. Our digital platforms are designed to support a seamless customer experience,
streamline processes and drive efficient operations to enhance brand visibility and the
Group’s growth.
BEST FOR PEOPLE AND PLANET
The best businesses create lasting value for people and the planet, and this belief is at the
heart of everything we do at KMD Brands. By fostering a culture of excellence and high
performance, we are committed to attracting, developing, and retaining top talent. At the
same time, we are embedding our three ESG pillars – communities, climate, and circularity –
across all aspects of our business. Through transparency, accountability, and a commitment
to positive impact, we are investing in a future where both people and the planet thrive.
By connecting our customers and employees with the great outdoors and making this
connection central to our culture, we enhance people’s appreciation of our planet.
Building Global BrandsElevating Digital
Operational ExcellenceBest for People and Planet
This year, we have continued to strengthen our corporate
strategy to position KMD Brands as a global family of
outdoor brands. Our commitment remains steadfast to
the creation of high-quality, purpose-driven, innovative
products that are best for people and planet.
OUR STRATEGY
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ESG strategy and performance
We acknowledge the impact of our business and accept our responsibility to advance the United Nations Sustainable
Development Goals (SDGs). We consider the SDGs in our strategy and our reporting, which underpins all our business
activities. The goals where we have the most impact are shown below:
Our strategic pillar ‘Best for People and Planet’ and company vision drive
our ESG strategy, which is focused around three key areas: Communities,
Climate and Circularity. This page provides a snapshot of our ESG strategy,
focus areas and key FY24 performance metrics against our goals.
(The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States.)
Focus areaOur goalsFY24 performance
Provide a people-centred
culture and workplace that
fosters health, safety, wellbeing
and inclusiveness
An equitable, inclusive workplace
representative of the diversity within our
communities including:
• 40:40:20 gender representation in
leadership positions (Board, executive
and management)
13% increase in female representation in
executive leadership positions, reaching
48% (FY23: 34%)
• Increased representation in employment
of local Indigenous Peoples and people
from ethnic or racial minorities
9.2% of our team identify as belonging to
an ethnic minority
Protect human rights and
dignity by addressing modern
slavery in our value chain
through collaboration and
transparency
Genuine transparency of, and effective
worker voice communications with, strategic
suppliers for each brand
62% increase in factories using our worker
voice tools, reaching 13 factories (FY23: 8)
31% increase in individuals participating in
worker surveys, reaching 5,947, including
654 responses from Tier 2 factory workers
(FY23: 4,520 respondents)
Engage, inspire and protect the
communities where we operate
and impact
Supported local community projects,
through donations, fundraising and paid
employee time, to create a positive impact
for the wellbeing of people and planet
3.5% increase in local community
investment, reaching NZD$1.18m
(FY23: NZD$1.14m)
42% increase in employee volunteer hours,
reaching 4,860hrs (FY23: 3,405hrs)
SDG 13 Take urgent action to combat climate change and its impacts.
C L I M AT E
Transition to a low carbon future
SDG 8 Promote sustained, inclusive and sustainable economic growth,
full and productive employment and decent work for all.
SDG 10 Reduce inequality within and among countries.
COMMUNITIES
Positively impact the wellbeing of people and places touched by our brands
SDG 12 Ensure sustainable consumption and production patterns.
CIRCULARITY
Eliminate the linear take-make-waste approach to business
Focus areaOur goalsFY24 performance
1
Reduce emissions in line with
the Paris Agreement goals
Reduced absolute Scope 1 and 2 emissions
by a minimum of 47% by July 31 2030, from
a FY19 base year
NZD$91,000 invested in solar system
installation at 4 new sites
Reduced absolute Scope 3 emissions by
a minimum of 28% by July 31 2030, from a
FY19 base year
2
118 Tier 1 and 2 factories reporting to us
using verified Higg FEM data
1. Our FY24 emissions data and performance will be reported in our Climate Disclosure Statement which is to be published in November 2024.
2. Our Scope 3 target includes the following GHG Protocol categories: purchased goods and services: fuel and energy related activities, upstream
transportation and distribution, waste generated in operations, use of sold products, end of life treatment of sold products, and investments.
Focus areaOur goalsFY24 performance
Foster and invest in circular
business models across our
businesses
Commercialised brand-led circular
business models for product take-back,
renewal, repair, recommerce, rental and
recycling programs
Increased from 4 to 5 customer programs
• Rent a Wetsuit
• Watch & Wetsuit in-house repairs
• Recycle My Wetsuit
• REDU
• Upparel & ImpacTex customer textile
waste recycling
Increase responsible material
content in our products
Dedicated to our own-brand products being
responsibly sourced
Kathmandu: 64% of polyester used in
apparel is recycled or recyclable (target
100% by 2030) (FY23: 58%)
Oboz: 34% of range using a minimum of
20% environmentally preferred materials by
weight (FY23: 9.7%)
Rip Curl: 66% apparel and accessories
containing preferred fibre materials (target:
100% by 2030) (FY23: 54%)
Reduce the waste footprint
created across our businesses
Reduced operational and packaging waste
including:
• Diversion of 90% of waste to landfill from
our direct operations by 2030
4% increase in operational waste diverted
from landfill, reaching 55% / 908mt
(FY23 restated: 51%)
• All primary and secondary packaging and
promotional material is recyclable or made
using recycled materials by 2030
Strategic sourcing alignment of 100%
recycled plastic LDPE polybag for
Kathmandu and Rip Curl in bulk volume
style production (FY23: Rip Curl only)
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Materiality approach
This process involved extensive stakeholder engagement,
including surveys and confidential interviews. Polls
were also conducted in-store and across social media
platforms. Specific ESG questions were integrated into
surveys conducted at eight supplier locations in Vietnam.
We also investigated scientific, industry, economic and
political sources to understand emerging trends.
THE MATERIALITY ASSESSMENT PROCESS
More than 30 people were interviewed, representing
a broad spectrum of stakeholders. Respondents
were asked to evaluate ESG and non-ESG material
issues outlined in our FY22 Annual Integrated Report,
and to assess the importance of each issue to KMD
Brands’ business success and reputation, and our
ongoing relationship with the relevant stakeholder.
Respondents were also asked to rate the relative
importance of each material issue and assess whether
KMD Brands met their expectations on each issue.
Key stakeholders were further invited to share their
perspectives on:
• Specific ESG sub-issues addressed in our ESG strategy;
• Issues that they believe are missing from our current
material issues list and warrant greater attention;
• Emerging issues that may become more material
to KMD Brands over the next 5-10 years.
The materiality assessment refresh affirmed that
the issues identified in 2021 remain relevant. This
was validated unanimously by all stakeholders. Both
investors and employees noted progress on key ESG
issues, underscoring the importance of KMD Brands’
ESG leadership to our ongoing business success
and stakeholder engagement. Our stakeholders also
highlighted nuanced market changes and emerging
issues, prompting the inclusion of biodiversity impact
as a new material issue. We also separated geopolitics
and digital transformation into distinct categories.
OUR KEY STAKEHOLDERS
In formulating our material topics, we consulted
stakeholders who significantly influence our
Group and those on whom we have a substantial
impact through our business activities:
• Shareholders
• Board of directors, executive and functional leaders
• Employees
• Consumers and wholesale customers
• Suppliers and workers
• Financiers
• Regulators
• Community groups, including athletes and
brand ambassadors.
This inclusive approach ensures that KMD Brands’
activities are aligned with stakeholder expectations,
incorporate emerging concerns into our strategic
framework, and sustain our commitment to
transparency and accountability in ESG reporting.
We conduct a comprehensive materiality assessment every two years,
with the last one undertaken in FY23. This re-evaluated the relevance and
importance of material issues identified in 2021 and noted emerging concerns.
GRI 2-12, 2-29, 3-1
23
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
KMD Brands Annual Integrated Report 202422
BRAND POWER
Protecting and enhancing the strength of our brands
is fundamental to our business. We strive to deliver
relevant products and experiences that resonate with our
customers and secure our sustained competitiveness.
BIODIVERSITY LOSS
Biodiversity loss – which encompasses natural
resource depletion including ecosystem disruption,
habitat loss, pollution and impacts on water quality
and availability – has systemic consequences for
human health and planetary stability. We look
for ways to minimise our environmental footprint
and promote biodiversity conservation. We aim
to mitigate impacts on natural resources through
responsible sourcing and sustainable practices.
Our material issues
Our material issues are defined as those that have the most significant
impact on our ability to create value for our stakeholders.
We acknowledge that managing material issues
can involve some trade-offs. Making a substantial
investment to address one material issue may require
significant financial resources but enhance employee
satisfaction or elevate customer experience, for
instance. Prioritising sustainability initiatives may incur
higher costs but strengthen brand reputation and
customer loyalty. Each decision reflects the balancing
act that KMD Brands undertakes to maximise long-
term value while managing immediate impacts on
financial performance and stakeholder relationships.
While some factors are beyond our direct control,
proactive mitigation measures can minimise the risks to
our business. Throughout this report, we discuss these
material issues in relation to resources essential for value
creation, and how our strategic priorities are shaped to
address them. The Board has reviewed and approved
these material topics for the current reporting period.
GLOBAL ECONOMY
Managing the impacts of global inflation is crucial
as we continue to navigate rising costs across
multiple fronts. Inflationary pressures and the
rising cost of living continue to influence consumer
discretionary spending habits. Shifts in consumer
lifestyles are also influencing market dynamics.
GEOPOLITICAL LANDSCAPE
Turbulent geopolitical conditions, including ongoing
global conflicts and regional political instability,
pose risks of heightened trade tensions, regulatory
uncertainties, supply chain disruptions, potential
security threats and sanctions. These factors
could affect material sourcing, market volatility,
operational complexities and market access.
SUPPLY CHAIN RESILIENCE
All global product transport and customer delivery
operations are vulnerable to shipping delays, port
congestion, and the accessibility of regional freight
forwarding. These factors can disrupt the flow of
goods, posing challenges to timely product delivery.
CLIMATE CHANGE
Urgent transformative actions to tackle the impacts of
climate change are a significant material issue for all
businesses. Climate change presents physical, regulatory,
market and social risks, while providing opportunities for
innovation and growth through mitigation, adaptation,
transparency and collaboration. Our commitment to
reduce emissions connected with our business and our
products, and our commitment to innovate sustainably,
are critical to our long-term resilience and growth.
PEOPLE AND WELLBEING
Attracting and retaining talent in a competitive labour
market is an ongoing challenge and priority for our
business. The wellbeing of people, beyond health and
safety, continues to drive us to focus on resilience,
inclusion and fostering a supportive workplace
culture where everyone can be themselves.
DIGITAL TRANSFORMATION
Adapting to advances in digital technology enhances
operational efficiency and customer experience,
supports agile operations and ensures KMD Brands
has future-fit platforms and tools. Digital transformation
helps us to harness data to drive better decision
making and accelerate growth across our direct-to-
consumer business to elevate the customer experience,
enhance efficiency and support innovation.
CHANGE MANAGEMENT
Integrating our brands to optimise operational
and financial performance requires strategic
change management. Effective communication,
employee engagement, robust project planning
and leadership support are keys to achieving
synergies and operational success.
CYBER AND DATA SECURITY
Investing in resilient infrastructure and protecting
customer data are paramount amid rising cyber
threats. Upholding privacy standards and using data
responsibly help us to maintain trust and compliance.
MATERIALITY MATRIX
Importance to KMD Brands' business success
Importance to me as a stakeholder
Mid
Mid
High
High
Ver y High
Ver y High
Change
management
Biodiversity
loss
Global
economy
Digital
transformation
Climate
change
Cyber and
data security
Supply chain
resilience
People and
wellbeing
Brand power
Geopolitical
landscape
GRI 2-14, 3-2
KMD Brands Annual Integrated Report 20242425
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
How we create value
Our material issues
(see pages 24-25)
OUTCOMES FOR OUR STAKEHOLDERSTHE RESOURCES WE RELY ON OUR VALUE CHAIN
OUR PRODUCTS
AND CHANNELS
Sold in over 8,000 locations
(owned stores, licensed stores,
wholesale doorways)
OUR PEOPLE
4,688 employees across
15 countries
OUR PARTNERSHIPS
149 Tier 1 factories
making our products
OUR ENVIRONMENT
Materials sourced from
18 countries
FY24 OUTPUTS
TIER 4
Raw material
production
TIER 2 and 3
Raw material processing
and fabric mills
5,947
individual participants in worker voice surveys,
across 13 factories
FOR SUPPLIERS
Providing long-term partnerships, supporting
strong worker wellbeing through the use of
worker voice tools
TIER 1
Final stage manufacturing
Freight, distribution centres
and third party logistics
Retail and wholesale network
Inspiring people to
explore and love
the outdoors
OUR FUNDING
Over 10,000 shareholders
$310m syndicated debt facility
OUR CREATIVE POWER
Over 3,000 new styles
released to market
Take-back, renewal, repair,
recommerce, rental and
recycling programs
$979.4m
total sales
FOR CUSTOMERS
Designing innovative, technical outdoor lifestyle
and sports products
37,000+
training hours delivered (mix of e-learning
and facilitated sessions to over 4,500 employees)
FOR EMPLOYEES
Providing a place for all people to realise their
full potential
$1.18m
in support of local community projects
and partnerships
FOR THE COMMUNITY
Creating positive change in the communities
we impact
Underlying
1
operating expenses,
reduced year-on-year by:
$19.6m
FOR INVESTORS
Controlling operating expenses despite ongoing
inflation pressures
GRI 2-6
26.5 mt
of post customer textile waste diverted from landfill
through in-store product take-back programs
FOR THE PLANET
Striving to make a positive impact on the
environment across the whole life cycle of our
products
1.Statutory results include the impact of IFRS 16 leases. The impacts of IFRS 16, restructuring, the notional amortisation of Rip Curl and Oboz customer relationships,
and a one-off non-cash impairment of Oboz goodwill have been excluded from Underlying results. Refer to Appendix 1 of the FY24 Results Presentation for a
reconciliation of Statutory to Underlying results.
KMD Brands Annual Integrated Report 20242627
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
OUR CREATIVE POWER
adventures that inevitably follow.
First launched in the early 1990s
and modernised for 2024, The Search
captures the hearts and minds of potential
customers in surfing markets worldwide.
Kathmandu re-branded its purpose and
identity in 2021. Since then, marketing
execution has been inconsistent, leading to
a lack of connection with target consumers.
In the second half of FY24, we focussed on
addressing this, with our marketing team
undertaking a strategic realignment. New
leadership and a new agency have already
delivered fresh perspectives, with a focus on outdoor
authenticity and building customer connections. A
new brand identity campaign was developed in FY24,
launching in early FY25.
In 2024, Oboz blazed new trails, significantly increasing
education events to drive brand awareness and
community engagement. An extension of the retail
focussed Outreach + Education Van Tour that supports
partners like REI with staff training, Oboz Everywhere
also engages the brand with consumers. This year the
events extended to New York, California and Washington,
targeting the hiking community with education sessions,
product trials and guided local hikes.
In an increasingly competitive and
commoditised market, the best brands
continue to stand out to consumers.
At KMD Brands, our creative power lies in our
commitment to and investment in industry-leading
product design, development, innovation and marketing.
These critical elements enhance the short and long-
term value of our most vital assets – our brands. Brand
equity has been built over time by consistently creating
authentic and desirable products that people trust – Rip
Curl for 55 years, Kathmandu for 37 and Oboz for 17.
Though our brands have endured market highs and
lows over their lifecycles, FY24 presented a very
challenging consumer environment. Cost of living
pressures softened consumer sentiment globally, which
impacted both retail and wholesale sales for the Group.
In an increasingly competitive environment, we’ve had
to focus on creating products that truly stand out.
Marketing that connects with the
outdoors customer
In FY24, each of our brands invested in marketing
strategies to enhance their customer appeal, brand
heritage and authenticity.
Rip Curl revitalised “The Search” – a marketing campaign
that conveys the DNA of the brand and articulates
the never-ending quest for the perfect wave and the
To demonstrate Kathmandu’s authentic
Kiwi heritage, the brand engaged New
Zealand’s Liam Lawson, a Red Bull Formula
1 Reserve driver, to launch the new Epiq SE.
A special-edition matte black puffer jacket, the
Epiq SE’s outer fabric is made using recycled
plastic waste, including end-of-life car tyres. The
campaign was well received on social media and
drove significant earned media coverage in the
brand’s heartland of Australia and New Zealand.
Rip Curl signed eight times World
Champion surfer Stephanie Gilmore on an
eight-year contract this year. Stephanie had
previously worked with the brand from 2000
to 2010. Her industry-leading re-signing was
welcomed by the surf industry for setting a new
benchmark in women’s sport, with more than 50
media reports from global surf markets sharing
the news, as well as almost 100 million consumer
impressions on social media. The team has
partnered with Stephanie on a capsule collection
launching in FY25, which has already received
positive feedback from our wholesale partners.
KATHMANDU TEAMS UP WITH LIAM LAWSON
RIP CURL SIGNS STEPHANIE GILMORE
MATERIAL ISSUES: BRAND POWER • CLIMATE CHANGE • GLOBAL ECONOMY • BIODIVERSITY LOSS
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1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
KMD Brands Annual Integrated Report 202428
Innovative new products
Whether it’s for surfing, hiking or simply exploring nature,
our focus on product design, development and innovation
across our brands ensures our customers are better
equipped for their outdoor adventures.
Newness and innovation drive our global business. In
FY24, each brand created new products – over 3,000
across the Group – aimed at attracting new customers
and retaining our existing base. After a successful ANZ
launch in FY23, Rip Curl rolled out the Flashbomb Fusion
wetsuit in key Northern Hemisphere markets this year.
The innovative wetsuit was extremely well received, with
great sell-in and sell-through. In some markets the Fusion
sold out, with the team organising additional production.
Kathmandu delivered innovation that provided greater
depth in our offering across activities – hike, adventure
travel and outdoor active. These core activities will drive
focus in the product range and ensure Kathmandu is
top-of-mind for target customers. This included the new
Seeker range, targeting the active outdoor enthusiast.
Seeker’s insulated active vests and jackets are designed
for warmth during high-energy outdoor pursuits.
The main fabric and lining are also made from 100%
recycled materials.
Kathmandu also launched two new iterations of the
popular Trailhead franchise – a stretch lightweight jacket
for spring and summer, and an insulated version for cooler
months. The insulated Trailhead novaLOFT is water and
windproof. The outer shell is also 100% recycled polyester.
Both expanded their respective categories, performed
well with customers, and will form a key part of our range
in FY25.
Pioneering innovation through
circular models
We are committed to the principles of circularity and
know that design decisions determine how long a product
will stay in circulation. This means we actively look for
ways to enhance durability, extend product lifecycles, and
use materials that simplify recycling when the products
reach the end of their first life.
With a goal to deliver commercialised brand-led circular
business models for product take-back, renewal, repair,
Click or scan to
read more on
Rip Curl's
commitment to
circularity
KMD BRANDS ESG GOAL:
Commercialised brand-led circular
business models for product take-back,
renewal, repair, re-commerce, rental
or recycling.
Click or scan to
read more on
Kathmandu's
commitment to
circularity
The Katabatic Wind is the brand’s
most technically advanced footwear
yet. Featuring a forked carbon-fibre
plate, the Katabatic Wind is engineered
to reduce fatigue by channelling energy
return and providing a stable ride on
tough terrain. This advanced technology
opens doors for new distribution and
consumer connections, strengthening the
Katabatic franchise. As consumers move
toward lighter and faster footwear, the new
product demonstrates Oboz’ commitment
to a pipeline of market-leading innovation.
OBOZ ADVANCES FOOTWEAR
GRI 306
recommerce, rental or recycling we are also on the path
to ensuring our brands plan for the total lifecycle of the
products they create. In its second year of operation,
Kathmandu’s commercialised circular business model,
REDU, continued to operate at the flagship Galleria store
in Victoria. With ambitions to bring REDU to New Zealand,
the team sought customer feedback in order to improve
and evolve the offering in the coming year.
Rip Curl extended its commitment to circular business
models with the introduction of Rip Curl Wetsuit Rental
in Europe. The program allows customers to rent a
wetsuit via platform partner Lizee – a leading circular
integrated logistics model – and receive their rental
wetsuit or gear at home, or directly at their next surf
trip location. This initiative further demonstrates Rip
Curl’s commitment to innovation and increasing the
circularity of its products by building on its global
wetsuit take-back program. The program launched
in FY24 in France, with plans to extend the service to
other European countries in the coming months.
KMD Brands Annual Integrated Report 20243031
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
strengthen their product offering,
concentrating on key priorities to
improve commercial outcomes.
In FY24, Rip Curl focussed on excelling
in core categories, and building greater
depth. The brand saw a strong global
response to Kids, with increased wholesale
sell-in and sell-through in key markets.
Under new leadership, Kathmandu’s product
team focused on the key priority to reduce
the brand’s reliance on outerwear. The brand
delivered increased newness from lines including
heritage t-shirts and fleece. The brand also
reacted to the market by increasing category
depth on commercially successful products,
including packs and bags. These actions drove
stronger results, especially in the second half.
To complement the branded product offering,
Kathmandu also expanded its third-party brand
strategy, including an increased focus on Oboz. In
FY24, Kathmandu added On Running shoes, Blunt
umbrellas, Hydroflask, and Korjo travel accessories.
Optimising our store network
FY24 was a challenging year for retail due to global
market conditions. Our team focused on optimising
our sales network and positioning our brands
strategically for improved economic conditions.
Kathmandu increased its store footprint by four,
opening strategically important stores that target
customers in airports on their way to getting ‘out
there’. The brand opened locations including
Sydney domestic and Adelaide airports and a
pop-up at Sydney International Airport.
Rip Curl continued to expand its global retail footprint
with FY24 seeing the opening of stores including,
renowned big wave location Nazaré, as well as
Madeira, in Portugal, our first store in Italy, Urbn Surf
wave park and Westfield Bondi Junction in Sydney,
and Terrigal on the New South Wales Central Coast.
In Sydney the brand also refurbished its iconic
Manly store and relocated its Cronulla store.
Despite challenging market conditions
in FY24, our brands remained focused
on offering quality products and
strengthening our expansive sales network.
At KMD Brands, we are dedicated to creating innovative
products and using strategic channels to provide
immersive brand experiences for our customers.
FY24 presented difficult trading conditions which
materially affected our business. Kathmandu was
heavily impacted at a retail level, and wholesale
channels for Rip Curl and Oboz were also tough.
Though we have seen signs of resilience in direct-to-
consumer channels and improvements in the fourth
quarter of the year for each brand, not all of our
challenges in recent years have been due to
external factors.
Strengthening our product offering
across brands
Strong foundations are made when brands focus on key
activities that are built around a deep understanding
of customer needs. Each of our brands used FY24 to
OUR PRODUCTS AND CHANNELS
MATERIAL ISSUES: BRAND POWER • CHANGE MANAGEMENT • DIGITAL TRANSFORMATION • GLOBAL ECONOMY
33
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
KMD Brands Annual Integrated Report 202432
Oboz continued to focus on efforts to
reduce reliance on US wholesale customers.
‘Shop-in-shops' in ANZ were established in
six key Kathmandu stores including Tower
Junction in Christchurch and Frankston
in Victoria. The strategic placement of the
brand within the vast Kathmandu ANZ store
network boosted sell-through and illustrates
the power of Group integration through simple
and streamlined execution. The North American
team also activated 15 shop-in-shops across US
retailers, elevating the brand’s visual experience
for customers in its most important market.
OBOZ INCREASE DIRECT-TO-
CONSUMER OFFERING
In reflection of subdued consumer sentiment, outlets
outperformed other channels across Australia
and New Zealand in FY24. Kathmandu opened
three additional Australian outlet stores, with
these performing ahead of initial expectations.
Wholesale for Rip Curl and Oboz remained challenging
throughout FY24 as accounts reduced their own
inventory holdings due to market pressures. Rip Curl
ended the year with wholesale sales down -13.0%, and
Oboz -23.1%. Oboz experienced a greater impact due to
its higher reliance on wholesale sales, while Rip Curl was
protected by its stronger direct-to-consumer business.
Kathmandu and Rip Curl continued to
maintain strong levels of engagement with
customers in ANZ
75
Net Promoter Score
76
Net Promoter Score
Driving omnichannel performance
With an ambition to achieve increased online sales,
we enhanced the omnichannel experience of each
of our brands in FY24. Whether in-store or online,
our brands reached customers in new ways, through
strategic ecommerce and loyalty initiatives.
Kathmandu’s online sales were down year-on-year by
-18.9%, although positive signs of recovery emerged
in the last quarter of the year. A strategic realignment
of priorities led by the brand’s new General Manager
of Digital saw several improvements to the site’s user
experience (UX) and user interface (UI). Online sales
made up 13.3% of direct-to-consumer sales in FY24.
Rip Curl grew online sales in FY24 by +8.6% on the
previous year, reaching 11.9% of direct-to-consumer
sales. The brand made user and customer experience
improvements to its trading sites throughout the
year, including a UX and UI overhaul to improve
conversion. Rip Curl also introduced end of season
discounting online in FY24, which drove volume.
In only its third full year of direct-to-consumer online
trading, Oboz again demonstrated that reaching
customers through the brand's own website can unlock
growth. Sales were up +31.7%, year-on-year, benefiting
from a commitment to diversified sales channels.
Loyalty programs that connect
with customers
Customer loyalty is hard to gain, and even harder
to retain. In FY24, our marketing and digital teams
intensified our focus on providing exceptional
loyalty experiences for our customers.
Kathmandu launched Out There Rewards, replacing
Summit Club, with a tiered system that encourages
and rewards members for getting ‘out there’ in the
outdoors. Around 1.8 million active members can
now earn points for outdoor activities like hiking,
discovering a waterfall, or trying a new trail. This
proposition is quite different from the original
membership program, Summit Club, which
focused more heavily on discounts. Over
25,000 members logged outdoor activities and
top tier members benefited from targeted gifting,
as well as access to subscriptions including
AllTrails – the world’s most popular hiking app.
REWARDED FOR GETTING ‘OUT THERE’
In its second year, Club Rip Curl surpassed 400,000
members. The popular loyalty program launched in
the US and also introduced more member-focused
shopping enhancements that improved the customer
experience. Rip Curl is on track to reach member target
goals, with further rollout in other markets planned.
KMD Brands Annual Integrated Report 20243435
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
We expanded training and
development opportunities with online
global platform RedSeed. We also
increased internal training, which
included programs such as Customer
Service & Consumer Law, Cyber Security,
ESG, and Leadership Development.
In addition to this, we catered to the
specific needs of some roles by funding
industry and other types of training;
empowering teams to grow their skills
and contribute to our shared success.
To foster a culture of continuous improvement
and accountability, we updated our performance
review process. We now set clearer more meaningful
goals with quarterly check-ins and updates to keep
our teams engaged and aligned with our collective
goals. The launch of our 'Elevate' Leadership Program
equips our senior leaders with tools to encourage
innovation, coach their teams and support a culture of
real-time feedback. This ensures we remain agile and
forward-thinking. We also offered transition assistance
programs to facilitate continued employability and
management of career endings due to retirement or
termination of employment. Programs included Out
Placement Services for all employment levels.
OUR PEOPLE
Our people are at the heart of what we do.
They are passionate hikers, surfers and
adventurers, and all play a part in delivering
our vision to be the leading family of global
outdoor brands.
In response to a challenging environment for both talent
retention and employee burnout we are emphasising
our company culture and employee value proposition.
Updating our strategic pillar from ‘Lead in ESG’ to ‘Best
for People and Planet’ is an important step that places
our employees firmly at the heart of what we do.
We are focused on key initiatives that invest in the
growth and development of talent, that elevate our
health and safety systems, and improve employee
wellbeing. We are also prioritising the power of the
Group, and deploying global systems to optimise
effectiveness, such as our new company-wide intranet.
We continue to take key steps towards our long-term
goal to ensure an equitable, inclusive workplace that is
representative of the diversity within our communities.
Investing in talent, driving a high-
performance culture
In FY24, we took important steps to support our
people and drive our high-performance culture.
TRAINING HOURS IN FY24
Average hours of online
training per employee*
Male 5.9 hours
Female 6.9 hours
Another gender 7.4 hours
* Based on training modules completed
through RedSeed learning platform
2,260 hrs
additional training hours
delivered in person*
* Participant attendance is determined
by accepted calendar invitations or
attendance record. Total training
hours calculated based on average
training session length of 1 hour.
GRI 404
MATERIAL ISSUES: CYBER AND DATA SECURITY • PEOPLE AND WELLBEING
37
1. OVERVIEW
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2. CREATING VALUE
KMD Brands Annual Integrated Report 202436
PERFORMANCE REVIEWS COMPLETED FOR FY24
CategoryMaleFemaleAnother genderTotal
Group executive 100%100%0%100%
Brand executive 100%100%0%100%
Senior management 69%80%0%74%
Management 95%88%0%91%
Non-management 81%78%100%79%
TOTAL 83%80%100%81%
GRI 404
In FY24, KMD Brands introduced a
company paid parental leave policy across
Australia and New Zealand, with plans for
a North American rollout in early FY25. The
policy is designed to support families as
they welcome a new child, whether through
birth, adoption, or surrogacy. The policy
empowers parents to continue to progress
with their career at KMD Brands, providing
increased financial and vocational support.
We expect that the policy will contribute
towards our ambition to improve gender
representation across leadership positions.
SUPPORTING OUR PEOPLE WITH
PARENTAL LEAVE
MINORITY REPRESENTATION IN OUR TEAM
*Sourced from survey responses received from employees as part of the KMD Brands Global FY24 Engagement and DEI Pulse Survey.
1.1% of our team identify as
belonging to a local Indigenous group
9. 4% of our team are living with
a health condition or disability
9.2% of our team identify as
belonging to an ethnic minority
10.6% of our team identify as LGBTQIA+
GENDER DIVERSITY BY CATEGORY
FY24
TOTAL EMPLOYEES
FY23% CHANGE FY23 VS FY24
Male
Female
Other/prefer not to say
No change
+13% increase in female leadership
2% increase in female leadership
Board
Executive
Management
Non-management
71%
52%
41%
35%
36%
29%
48%
58%
65%
64%
<1%
<1%
<1%
Board
Executive
Management
Non-Management
71%
66%
44%
35%
36%
29%
34%
56%
64%
63%
1%
1%
GRI 405
KMD BRANDS ESG GOAL:
An equitable, inclusive workplace
representative of the diversity within
our communities including:
• 40:40:20 gender representation in leadership
positions (Board, executive and management).
• Increased representation in employment
of local Indigenous Peoples and people
from ethnic or racial minorities.
We also redesigned our rewards and benefits, with new
incentives that are more motivating and contribute to
our employer of choice ambitions by attracting and
retaining top talent.
As we continue to invest in our people and
cultivate a culture of high performance, we are
enhancing our team’s capabilities to drive value for
our brands, and ultimately, our shareholders.
Fostering an equitable workplace
In FY24, our commitment to fostering an inclusive and
equitable workplace was strengthened through our
active allyship training with Rainbow Tick for those in
our New Zealand head office. This team also embraced
the rich cultural heritage of Aotearoa by participating
in Te Reo training, which covered aspects of Māori
language (Te Reo) and Māori protocol (Tikanga).
We recognise that inclusion is a continuous journey.
Towards the end of the year, we also ran our annual DEI
Pulse survey which helps us understand the diverse
perspectives and experiences of our people. Though we
were pleased to have an increase in employee responses,
the difference may impact comparability with FY23 data.
By collecting employee feedback, we identified areas for
improvement which will be used to develop strategies to
promote a culture of inclusivity, equity and belonging.
KMD Brands Annual Integrated Report 20243839
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
Keeping our people safe
At KMD Brands, the health and safety of our people
is our number one priority. By this, we mean not only
physical safety, but psychological safety as well. We
strive to promote a culture of wellbeing by providing
both proactive and reactive support to our employees.
Our employee assistance program (EAP) run by Converge
International, provides our employees with access to a
suite of wellbeing resources, along with monthly wellbeing
training sessions that proactively tackle all elements of
wellbeing including psychological safety. Additionally,
Converge International provides our employees with 24/7
access to counselling services should they need it. We
actively encourage use of this service; and for issues that
can’t be tackled by Converge we seek bespoke solutions.
With insights from our workplace health and safety
platform, we can see key hazards by region, business
area, brand and site. These hazards have been identified
through hazard near-miss and incident reports, as
well as workplace inspections. This allows us to
identify issues and implement initiatives to eliminate
risks, or, where that is not possible, reduce them.
We are focused on high-risk issues as a priority.
We have established a consultation framework which
allows team members across the business to provide
input and insight into safety activities, and have
recently published a Group consultation, participation
and communication procedure. As a result of regular
consultation, operational changes to tasks are made
to ensure risks are mitigated as far as is reasonably
practicable. Our wetsuit manufacturing facility, Onsmooth
Thai, maintained its International Safety Standard
(ISO) 14001:2015 and ISO 45001:2018 certification for
Environmental and Occupational Health and Safety
Management Systems. Rip Curl and Kathmandu will
continue to work towards the International Safety
Standard ISO 45001 over the next 24 months.
Despite our best efforts to protect the health and
safety of our employees, there were 36 recordable
work-related injuries. The main types of injuries were
contusions, cuts, sprains, strains, and soft tissue injuries.
Out of these cases, none were high-consequence.
We also had 13 cases of work-related ill health
(FY23: 2 cases). Work-related ill health cases
included musculoskeletal, anxiety, PTSD and back
Great health and safety practice is also about
investing in ways to make our store locations
and places of work as safe as possible. We
take customer health and safety seriously,
and any related incidents are treated as high
priority, investigated and the appropriate
corrective action taken to prevent recurrence.
We also have quality assurance processes and
systems in place to ensure our products are
safe. During the year we were notified by a third
party about possible inconsistencies in the
Ultraviolet Protection Factor (UPF) rating of
certain Rip Curl rash vests. Because of variations
in test results, we offered customers who had
purchased two specific colours in the product
range the option of a refund for their purchase.
With customer privacy also a priority, the team
invested in a privacy project that ran across the
Group. This considered our privacy maturity and
opportunities to improve. In FY24 KMD Brands had
no substantiated complaints concerning breaches
of customer privacy or losses of customer data.
During the last year, there were several emergencies
that presented immediate safety risks to our
employees. Our Rip Curl and Kathmandu Bondi
Junction stores were caught up in an emergency
that resulted in the deaths and life-threatening
injuries of several people. Our crew in Hawaii were
impacted by the Maui wildfires which caused the
destruction of our Rip Curl Lahaina store. In Far
North Queensland, our Rip Curl Port Douglas store
bore the brunt of Tropical Cyclone Jasper. Brazil also
experienced the worst flood in 80 years, with
three licensed Rip Curl stores damaged, and
more than 100 wholesale accounts impacted.
During these emergencies, we responded
with support for our team members and the
community. In some cases this was through
financial relief, donation of product or fundraising.
Further information in relation to our Climate-related risks will be
covered in our Climate Related Disclosure which we will publish
in November 2024.
PROVIDING SUPPORT DURING EMERGENCIES
injuries. We had no incidents of noncompliance
with regulations or voluntary codes resulting in a
fine, penalty or warning. We had no instances of
fatalities from work-related ill health or injury.
GRI 403, 416, 418
KMD Brands Annual Integrated Report 20244041
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
654 Tier 2 workers, covering critical
topics such as workplace health and
safety, remuneration and equality.
These insights have identified areas
for improvement and given the facilities
a clear direction for targeted actions.
OUR PARTNERSHIPS
Our Group invests in partnerships to
enhance our communities, improve
transparency across our supply chain,
and manage ongoing risk.
In FY24, the Group and each of our brands focused on
strengthening engagement with workers, enhancing
supply chain transparency, and supporting the
communities where we operate.
We also reinforced our commitment to sustainability
and responsible business practices through a range of
significant memberships and partnerships. Our efforts
reflect our ongoing focus on maintaining high standards
in social and environmental responsibility. See ‘Our
Partners’ section on pages 120 to 126 for more detail.
Enhancing worker engagement in our
supply chain
In FY24, KMD Brands engaged AskYourTeam, a New
Zealand-based tech company, to support our Worker
Voice program. AskYourTeam provided an online solution
for surveying factory workers who are employed by
contract manufacturers that create our products. This
tool enhances our ability to directly engage with workers
and address concerns effectively.
We used this tool to collect anonymous feedback
from 5,947 workers across manufacturing facilities in
China and Vietnam. This effort included input from
In FY24, KMD Brands released its first
Policy on Gender Equality in Supply
Chains and funded implementation training
for Chinese suppliers. We also introduced
supplier Guidance on Grievance Mechanisms
to support effective and gender-sensitive
access to remedy for workers. In Bangladesh, we
commenced a women's empowerment program
in collaboration with Rip Curl's long-term trading
agent Toads, manufacturer Astex Garments and
the Awaj Foundation. This project is delivering
training in financial management, health,
leadership, rights awareness and negotiation.
PROMOTING GENDER EQUALITY
ACCOUNTABLITY
Tier 1: FY24: 100% (149) FY23: 100% (189)
Tier 2: FY24: 91 FY23: 65
TRANSPARENCY Worker Voice surveys conductedWorkers interviewed
Tier 1: FY24: 11 FY23: 8 FY24: 5947 FY23: 4520
Tier 2: FY24: 2 FY23: 0
Traced on Open Supply Hub
Tier 1: FY24: 100% (149) FY23: 100% (189)
Tier 2: FY24: 158 FY23: 65
Worker sentiment surveys conducted
Tier 1: FY24: 4 FY23: 7
Tier 2: FY24: 1 FY23: 0
MATERIAL ISSUES: GEOPOLITICAL LANDSCAPE • PEOPLE AND WELLBEING • SUPPLY CHAIN RESILIENCE • BIODIVERSITY LOSS
GRI 2-25
KMD BRANDS ESG GOAL:
Genuine transparency of, and
effective worker voice communications
with, strategic suppliers for each brand.
Tier 1:
Suppliers are 100%
accountable
Tier 1:
Increase year-on-
year where worker
voice survey tools
are in place
Tier 2:
Increase by at least one
Tier 2 supplier for each
brand per year
Tier 2:
Trace and publish the
input suppliers
of our strategic Tier 1
suppliers.
Accountability to KMD Brands
Code of Conduct
Transparency
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KMD Brands Annual Integrated Report 202442
Expanding human rights due diligence
In FY24, KMD Brands expanded the scope of our human
rights due diligence, including a deeper assessment of
risks presented by input and raw material suppliers. The
Group used the Higg Index tools to assess and measure
social and environmental performance throughout
the supply chain. Prioritising these tools reflects the
Group’s commitment to comprehensive performance
evaluation and reduction in supplier audit fatigue.
The Group also introduced human rights assessments
for non-inventory suppliers in high-risk sectors. This
comprehensive approach to human rights risk, including
forced and child labour, is detailed in the Group's annual
Modern Slavery Statement. We consider suppliers
that engage migrant workers to present an increased
risk of incidents of forced labour, as well as suppliers
engaged in manufacturing and processing beyond tier 1.
We consider the following geographic areas within our
supply chain (particularly beyond tier 1) to be at risk:
Bangladesh, Brazil, Cambodia, China, India, Indonesia,
Mexico, Taiwan, Thailand and Vietnam. 100% of tier 1
suppliers are assessed against the KMD Brands Code of
Conduct, and the experiences of workers are gathered
via grievance channels and anonymous worker surveys.
Our tier 1 manufacturing operations are lower risk due
to social screening and monitoring. Tier 2 and beyond
present a higher risk, due to less established relationships
and monitoring systems. Known instances of child
labour have been reported by the US Department of
Labor in the following countries within our supply chain:
Bangladesh, Cambodia, China, India, Indonesia and
Vietnam. We consider each of these regions to present
risk at tier 1 and beyond. 100% of our tier 1 suppliers
are accountable to the KMD Brands Code of Conduct,
which includes a prohibition against child labour.
100% of new suppliers were screened using social and
environmental criteria, and 149 tier 1 factories assessed
for social impacts across a 24-month assessment
cycle. Four tier 1 suppliers were identified as having
significant actual or potential negative impacts, such
as: underpayment of workers; potential discrimination in
remuneration; inadequate access to remedy; potential
chemical exposure; and drinking water contamination.
Similarly, four tier 2 suppliers were identified as having
issues related to worker-paid recruitment fees and
restriction of movement. Corrective action plans were
agreed upon with 100% of suppliers identified as having
significant actual or potential impacts, supported by
additional training and anonymous worker surveys
to verify effectiveness. No suppliers were exited
during FY24 as a result of social assessment.
In FY24, the Group sourced from regions with risks to
freedom of association and collective bargaining. In total,
79 KMD Brands tier 1 suppliers are located in China,
where independent union participation is restricted.
Recognising the challenges in regions like Bangladesh,
Cambodia, China, India, Thailand and Vietnam, KMD
Brands takes a zero-tolerance approach to violations
of the right to exercise freedom of association. To
mitigate this risk the Group prioritises worker voice
through anonymous worker surveys, develops supplier
capacity to provide effective grievance mechanisms,
supports the International Accord in Bangladesh and
its own grievance channels for factory workers.
Enhancing supply chain integrity
In FY24, the Group invested in advanced supply
chain management software OSC (Our Supply
Chain), an end-to-end supply chain technology
solution, to record, monitor and track progress of
factory compliance data, traceability and corrective
action plan improvements. This investment reflects
KMD Brands’ commitment to greater accountability
and high standards of supply chain integrity.
KMD Brands continued to publish 100% of tier 1
manufacturers and traced input and raw material
suppliers via Open Supply Hub. Internal and
external transparency allows the Group to identify
high risk areas and work with stakeholders on
appropriate solutions where issues are identified.
Strategic brand partnerships
This year, each of our brands worked with
commercially important partners to enhance
customer experiences and drive engagement.
Rip Curl again partnered with the World Surf
League Finals, the pinnacle event of the surfing
World Tour. In our third year as title sponsor, the
event attracted record crowds with over 25 million
fans watching across platforms. Rip Curl also saw
success with title sponsorships of other key surfing
events around the world, including Meo Rip Curl Pro
Portugal and the longest run professional surfing
event in the world, the Rip Curl Pro Bells Beach.
Rip Curl also partnered with Tourism Western Australia
on the world’s only virtual surfing event, the Rip Curl
Virtual Pro. The event encourages surfers globally
to connect and compete using data from their
everyday surfing. The global competition included
participants from over 10 countries, logging more
than 3,000 surfs and catching over 24,000 waves.
Kathmandu worked with several partners in FY24, with
the aim to extend outdoor experiences to our customers
and the broader communities where we live and operate.
The Kathmandu Coast to Coast adventure race saw the
brand complete its ninth year as title sponsor, with over
1,300 people competing. Kathmandu also worked with
Her Trails, a global platform that empowers women to
embark on extraordinary adventures in the outdoors.
Oboz launched a collaboration with Skida, a Vermont
based ski headwear and winter accessories brand.
The brands created a whimsical design for the Oboz
Whakatā Collection – the Puffy Low and Mid styles –
that featured Montana’s state flower, the Bitterroot.
Supporting the communities in which we
live and work
In FY24, KMD Brands and each of our brands
made substantial contributions to the communities
where we operate, aligning varying initiatives
with each brand's core purpose and mission.
Kathmandu
Kathmandu continued its support of Australian mental
health charity Beyond Blue and the Graeme Dingle
Foundation of New Zealand. Kathmandu sponsors
Project K, a program for teens which involves wilderness
adventures, community challenges and mentorship
to build confidence, teach life skills, promote good
health and relationships, and foster positive attitudes.
In the second year of Planet Day, Kathmandu
continued to support local community conservation
efforts in Christchurch, helping to restore and
increase the biodiversity of a local estuary.
Oboz
Oboz continued its efforts to conserve and
promote biodiversity on the trails that surround our
headquarters and beyond. In FY24, Oboz achieved
a significant milestone by planting our sixth million
tree in partnership with Trees for the Future. Oboz
plants a tree for every pair of shoes sold.
Oboz is proud to work in partnership with
Black Folks Camp Too (BFCT), furthering
our shared mission to increase unity by
getting more people to experience the great
outdoors. As part of the partnership, now
in its second year, BFCT created a series of
training modules to educate Oboz’s employees,
sales representatives and wholesale partners
on how to better serve diverse audiences. The
training commenced in FY24, with retailers
to receive the training in the new year.
BLACK FOLKS CAMP TOO
GRI 407, 408, 409, 414
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Rip Curl
In FY24, Rip Curl crew around the world participated
in Planet Day for the 23rd consecutive year.
Torquay head office staff partnered with several
local community organisations to remove invasive
weeds, revegetate eroding areas by planting native
grasses and shrubs, and removing rubbish.
Rip Curl also continued its support for Surfrider in
North America and Australia, contributing all profits
from the sale of paper bags and Surf Organics wax in-
store to support conservation efforts in coastal areas.
The brand was also the primary partner of the Surf
Aid 2023 'Make-A-Wave' campaign, which raised more
than AU$534,000 for remote surfing communities.
Rip Curl continued its reconciliation journey with
Indigenous Australians, completing a Reflect
Reconciliation Action Plan (RAP). Over the course of
FY24 we published internal cultural protocols, held
cultural education events to celebrate NAIDOC Week
and Reconciliation Week and implemented quarterly
walks on Country at Bells Beach with Wadawuruung
Traditional Owners for all new employees in Torquay.
An Innovate RAP is now underway led by the Rip Curl
RAP Committee, with plans to launch in January 2025.
KMD BRANDS ESG GOAL:
Supported local community projects,
through donations, fundraising and
paid employee time, to create a positive impact
for the wellbeing of people and planet.
FY24 PERFORMANCE
NZD $1.18m *
invested with our local community
partners in FY24 including over
4,860
volunteer hours
*includes company financial donations, product donations,
partnership fees, employee donations, and volunteer hours.
Volunteer hours calculated using average hourly rate of
NZD$30 per hour.
GRI 2-28
KMD Brands Annual Integrated Report 20244647
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In FY24 we engaged Deloitte to assist
with climate scenario risk analysis as we
work towards publication in November
2024 of our first Climate Related
Disclosure under the Aotearoa New
Zealand Climate Standards. Our Climate
Related Disclosure will include reporting
on our carbon emission data for FY24. This
is our last year certifying our emissions
impact with Toitū Envirocare; in FY25 we will
assure our greenhouse gas inventory with audit
partner KPMG which already delivers assurance
of our financial statements. Toitū Envirocare
will continue to assist us as we measure, manage
and work to reduce our climate impact, supported
by its emissions accounting platform, emanage.
While we are preparing our climate disclosures
in line with the requirements of the New Zealand
climate standards for FY24, we are continuing to
monitor the development of future international
reporting standards, like the European Corporate
Sustainability Reporting Directive and the Australian
climate-related financial disclosure regime.
Partnering to make the best products with
responsible practices
The journey from an initial idea to our customers’
wardrobes is long and requires passion and perseverance
from our product teams. We work towards delivering
more responsibly sourced products through our
material choices, production methods and finishes.
The responsible materials and innovations we choose
and co-create with our suppliers are at the core of
our products. Our diverse supply chain, including our
wholly-owned OnSmooth factory in Thailand where we
produce most of our wetsuits, reflects this commitment.
Our brands are frequently recognised for their
progress in increasing the use of responsible materials.
In FY24, our brands continued to make gains.
OUR ENVIRONMENT
We balance our commitments as a
responsible B Corp with a focus on
customer and shareholder value to ensure
our business is competitive and resilient
long-term.
In the current constrained economic climate, KMD
Brands is strategically balancing our sustainability
commitments with the need to maintain a competitive
and resilient business.
Through exploring and testing innovative practices and
our learnings from pilot projects across our Group, we are
committed to improving our environmental impact while
maintaining our competitive edge. Our approach focuses
on effective, commercial and pragmatic solutions that
support operational efficiency and responsible practices.
Responding to regulation and climate
reporting requirements
As we strive to minimise our environmental impact, we
are also preparing for the evolving global regulations and
reporting standards in development. For a business with
dual headquarters in Australia and New Zealand and an
international presence in many other jurisdictions, this
adds complexity to our financial and climate disclosures.
MATERIAL ISSUES: BIODIVERSITY LOSS • BRAND POWER • CLIMATE CHANGE • DIGITAL TRANSFORMATION
GRI 2-5
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KMD Brands Annual Integrated Report 202448
Click or scan to read
more on Kathmandu's
commitment to
responsible materials
Click or scan to
read more on Oboz's
commitment to
responsible materials
Oboz is committed to achieving a minimum
of 20% environmentally preferred materials
by weight of product across 100% of its
range by 2030. In FY24, Oboz made significant
progress towards this goal, with 75% of
new designs meeting the 20% minimum and
releasing its most sustainably crafted shoe to
date – the Cottonwood. This design required
the support of every Oboz team member, and
from our supply chain partners. By coordinating
directly with our suppliers at the start of the
development process, we collected information
about water, energy use and the material
selection process. Consequently, all styles in
the Cottonwood collection exceed the brand’s
preferred materials goals with a minimum
34% of environmentally preferred materials
by weight per shoe. The team’s persistence in
pushing the limits of innovation in responsible
material sets a new standard for Oboz.
OBOZ’ COTTONWOOD COLLECTION
SETS A NEW STANDARD
72%
responsibly sourced cotton against
our target of 100% by 2026
(FY23: 58%)
66%
apparel and accessories containing
preferred fibre materials against our
target of 100% by 2030 (FY23: 54%)
25%
of wetsuit range containing responsibly
sourced materials against our target
of 75% by 2030 (FY23: 16%)
63%
use of RWS certified wool against
our target of 100% by 2025
(FY23: 60%)
64%
of polyester used in apparel and 53%
of polyester used in equipment is
recycled or recyclable against our
target of 100% by 2030
(FY23: apparel 58%)
3.6m litres
water restoration through PolyPro
process water saving and solution dyed
fabrics (FY23: 1.4m litres)
34%
of our range using a minimum of 20% environmentally preferred materials by
weight against our target of 100% of range by 2030 (FY23: 9.7%)
FY24 PERFORMANCE
KMD BRANDS ESG GOAL:
Dedicated to our own brand products being responsibly sourced.
In FY24 Kathmandu received an indicative rating
of 'Scaling' (3) on the Textile Exchange’s Material
Change Index (MCI), the world’s largest peer-
to-peer comparison initiative within the textile
industry. Official scorecards for the prior year are
confirmed each October. The latest rating reflects the
introduction of tougher MCI criteria, highlighting the
evolving standards of the textile industry (previously
Kathmandu has received a 'Leading' or '4' rating).
Showcasing the strength of the Group, Rip Curl joined
the initiative this year with Kathmandu's support,
earning an indicative rating of 'Establishing' (2).
Additionally, Kathmandu is one of just five global brands
selected for an international working group tasked
with developing and piloting the new Materials Matter
Standard. This standard promotes clothing and textiles
that advance climate goals, uphold human rights
and animal welfare, and benefit the environment.
KMD Brands Annual Integrated Report 20245051
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2. CREATING VALUE
Click or scan to
read more on
Rip Curl's commitment
to responsible
materials
Rip Curl made strides this year by increasing the
responsible materials used in its wetsuits. Currently, 25%
of Rip Curl wetsuits contain natural rubber, a material
that uses fewer chemicals than standard neoprene. By
FY25, Rip Curl expects 50% of its wetsuits will feature
natural rubber, with an ambition to reach 75% by 2030.
This includes innovative materials like Yulex, as well as
bio-ss and eucaprene which we developed in partnership
with our long-term neoprene supplier SHEICO.
We recognise that sustainable production is rapidly
changing with new and better ways to make wetsuits.
We are committed to do better for our crew, customers
and the environment and have developed a roadmap
of multi-tiered solutions to reduce our impact from
product, to manufacturing to end-of-life solutions.
Improving our data
In FY24, we launched a pilot with Carbonfact, an AI-
assisted product lifecycle assessment (LCA) platform
specifically built for apparel and footwear. An LCA is
a methodology used to evaluate the environmental
impacts associated with all stages of a product’s life
cycle, including raw material extraction, production,
use and ultimately disposal. This four-month trial will
provide deeper insights into the lifecycle impacts of our
products and production processes, identifying those
with the highest contribution to our Scope 3 emissions.
Using the Higg Facility Environmental Module, we also
collected and benchmarked verified impact data from
65 factories in FY24. Their scores were compared
against similar factories in their own countries,
identifying key areas to improve impact. Out of the
factories providing verified data 36 have set their own
emission reduction targets, 28 have reduced emissions
against their baselines and one has phased-out coal.
We are now exploring how we can collaborate further
with our factory partners, providing them with more
detailed insights on their performance and how their
initiatives can complement our common goals.
100% of new tier 1 suppliers were screened using
environmental criteria, including assessment of
Higg Facility Environmental Module (FEM) data,
site visits and internal qualitative assessment
including investment in green technology and
preferred fibres, product and facility certifications.
In FY24 we continued to extend our environmental
monitoring by incentivising supplier Higg
FEM adoption and providing FEM training.
We also provided facility specific feedback on
opportunities to reduce environmental impacts.
Our expanded data collection efforts provide us
with valuable insights, but each discovery presents
new challenges that require communication,
understanding and long-term planning.
50
Tier 1 and 68 Tier 2 factories reporting
verified environmental performance data
Reducing and reimagining waste
Our waste management efforts are guided by the
“Seven Rs”: rethink, refuse, reduce, reuse, repair,
renew and recycle. In FY24, we continued to make
progress on waste management projects across
our stores and distribution centres with a focus on
redesigning our products, reducing waste generated
in our operations and increasing recycling rates.
Waste is generated across our business, both upstream
and downstream in our value chain from material
production and manufacturing though to packaging,
transportation and warehousing, and from operation of
our store network to our head office support functions.
In FY24, Rip Curl partnered with six
of Australia’s most iconic brands to
launch Seamless, a clothing stewardship
scheme led by the Australian Fashion
Council and supported by the Federal
Minister for Environment and Water, Tanya
Plibersek. Seamless scrutinises the entire
supply chain, from how clothes are designed
and manufactured, to how they may be better
repaired, recycled or rented. Seamless’ work to
champion a circular economy aims to encourage
all Australians to think differently about their
clothes, and we are proud to be a partner.
RIP CURL PARTNERS TO LAUNCH SEAMLESS
As a signatory of the Australian Packaging Covenant
Organisation (APCO), we submit an annual report
and action plan to support our packaging and
waste strategies for Kathmandu, Rip Curl and
Ozmosis in Australia. In FY24, we achieved a
'Leading' rating for the materials used and recovery
of our soft plastics processing in Australia.
In New Zealand, we engaged Waste Management NZ
to audit our Christchurch distribution centre and CBD
store, gaining valuable insights into our waste streams to
pinpoint opportunities for reduction and improvement.
Looking long-term, waste management is a global
challenge that requires collaboration and innovation
across the value chain. We recognise that textile and
footwear recycling is challenging and inherently complex.
A single product may have as many as 50 different
technical components, complicating the recycling
process. Current limitations in infrastructure and
technology also hamper national efforts to recycle waste,
with the need for large-scale investment by governments
to help businesses meet national landfill reduction goals.
Our soft plastic recycling program has
expanded following several years of
successful pilots. After trialling 10 Victorian
stores in FY23, we scaled this initiative in
FY24 to 31 Kathmandu, Rip Curl and Ozmosis
stores, plus two distribution centres in
partnership with MG Waste Management. This
project addresses a problematic waste stream
by turning soft plastic into valuable new products
like park benches, drainpipes and fence posts.
SOFT PLASTICS TRIAL EXPANDS
GRI 308GRI 306
KMD Brands Annual Integrated Report 20245253
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POST CUSTOMER WASTE RECOVERY FY24TOTAL – FY22 to FY24
Recycle My Rubber23.6 mt 48.13 mt
Upparel2.57 mt 2.87 mt
I m p a cTe x0.38 mt 0.38 mt
TOTAL TEXTILE WASTE RECOVERY26.55 mt51.38 mt
93%
of swing tags
made from recycled
materials
100%
of footwear boxes
made from responsibly
sourced wood paper
99.5%
of swing tags made
from materials that can
be recycled
KMD BRANDS ESG GOAL:
Reduced operational and packaging waste including:
• Diversion of 90% of waste to landfill from our direct operations by 2030.
• All primary and secondary packaging and promotional material is recyclable or made using
recycled materials.
GRI 306, 2-4
OPERATIONAL WASTE GENERATED FOR FY24
Soft plastics recycled19.5 mt
Mixed plastic recycled381.7 mt
Paper and cardboard recycled470.1 mt
Glass and aluminium recycled1.7 mt
Neoprene offcuts recycled35.5 mt
TOTAL OPERATIONAL WASTE DIVERTED
1
908.5 mt
Store/warehouses/offices/factory waste to landfill736.2 mt
TOTAL OPERATIONAL WASTE
1
1644.7 mt
55%
1
total operational waste
diverted from landfill
during FY24 including
paper and cardboard,
mixed recycling, soft
plastics, neoprene offcuts
and composting.
FY23 restated: 51%
2
1.
FY24 reported figures are based on pre-verified data for our own operations across 60 sites in Australia, New Zealand, Indonesia and Thailand, where we have
primary data. Our office and DC in Brazil and office in Europe are excluded due to insufficient data however will be included in future periods. Where primary data is
not available, estimates are used based on similar sites from our own operations or industry average figures.
2. We have restated the percentage of operational waste diverted from landfill for FY23 above as some of the operational waste data reported in FY23 was incorrectly
stated in kilograms rather than metric tonnes.
Third-party providers of waste services operate under the legislation of the respective countries in which they
operate and must meet those standards in the management of the waste collected. We collect a combination of
monthly and annual reports from our waste service providers. These include a breakdown of what types of waste
were collected and the quantities of each waste type collected. A key focus for FY25 will be improving our waste
data coverage.
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KMD Brands Annual Integrated Report 202454
Our Sustainability Linked Loan (SLL) continues to sit
across our entire debt facility, attached to sustainability
performance targets (SPTs) that align with our
existing ESG strategy and broader associated goals.
Our sustainability performance targets include:
SPT 1: Scope 3 emissions
Reduction in specified Scope 3 emissions
categories of the Group in line with the validated
Science-based target trajectory (aligned with a
‘well below 2 degrees’ scenario), and increasing
measurement and reporting of the Group’s
Scope 3 emissions from purchased goods and
services by influencing and supporting the
Group’s suppliers to disclose emissions data.
SPT 2: Scope 1 and 2 emissions
Reduction in absolute Scope 1 and Scope
2 emissions of the Group in line with the
validated science-based target trajectory.
SPT 3: B Corp Certification
Amending KMD Brands’ constitution as required
by B Lab Global (by 31 July 2024) and re-certifying
the Group as a B Corp by 31 July 2026.
SPT 4: Supply chain accountability
and transparency
Increasing accountability and facilitating transparent
disclosure for Tier 1 and Tier 2 suppliers through
encouraging adoption of, and progression towards,
verification by Higg Index Facility Social & Labor
Module and Facility Environment Module.
Each SPT has an annual defined performance threshold
for a discount to the overall interest rate we pay across
our debt facilities (except for SPT 3 in Year 3). The
thresholds are structured to be ambitious in nature
and incentivise progressive improvement compared
to the respective baselines. Each SPT also has a
'premium' threshold, which if triggered will generate
a premium payable on the interest rate overall.
OUR FUNDING
FY24 was a challenging year for our Group,
and the industry at large. We saw cost-of-
living pressures and increased geopolitical
issues have a prolonged impact on
consumer sentiment globally.
These factors contributed to an unfavorable trading
environment for our brands, particularly in retail for
Kathmandu and wholesale for Rip Curl and Oboz.
Though the first half was disappointing, we started
to see improvements in the second half.
Our performance
Group sales were down from last year’s record, with all
three brands experiencing declines. Kathmandu struggled
in the first half due to weak consumer sentiment and
unseasonal weather, coupled with product and marketing
challenges. The brand saw improvements later in the
year with strategic store openings and new products.
Rip Curl and Oboz, saw better performance in
direct-to-consumer sales compared to wholesale.
Rip Curl achieved stronger results in Europe, Asia,
and South America, helped by new store openings.
Oboz continued to deliver strong online sales
despite wholesale challenges in North America.
Overall, gross margin remained resilient, with Rip Curl
and Oboz showing continued improvement, offset
by increased promotional activity for Kathmandu.
Underlying operating expenses decreased despite
ongoing inflation pressure, benefiting from restructuring
implemented last year, and reduced variable costs
associated with lower sales. Net working capital
decreased with significant inventory reductions.
Managing our debt with support from our
banking group
We remain in a strong financial position with the
support of our banking group, and access to a $310
million debt facility. At 31 July 2024, the Group had
a net debt position of $59.7 million, with funding
headroom of approximately $230 million.
During the year, in response to the difficult trading
environment, we took pre-emptive action with the
support of our banking group to lower the FCCR
covenant ratio for the next three measurement points.
Last year, we aligned measurement of our progress
against these targets to our financial reporting
period and the next performance measurement
milestone is due at the end of October 2024.
Investing for long-term efficiencies
In FY24, we continued to harness the power of
the Group, investing in industry leading systems
to further strengthen integration. Group IT
focused efforts on standardising systems across
the brands and regions, enabling teams to work
together more seamlessly, creating efficiencies.
A global business requires systems that can support
and adapt to changing legislation and the compliance
needs of each of our brands and regions.
This year the team standardised our internal
communication and collaboration tools as well as
global processes for managing our health and safety
duties. We have also transferred our retail operations in
North America onto our global processes and systems
and will do the same for Oboz and Onsmooth (our B
Corp certified wetsuit factory in Thailand) in FY25.
This work is key to enabling a stronger technology
foundation that unlocks greater value for KMD
MATERIAL ISSUES: CHANGE MANAGEMENT • DIGITAL TRANSFORMATION • GEOPOLITICAL LANDSCAPE • GLOBAL ECONOMY
GRI 2-27
Brands’ customers, partners, and employees with
an appropriate security and control posture.
Outlook
We remain cautious on consumer sentiment, given the
challenging global macroeconomic environment. Global
inflationary pressures are easing, but it will take time to
directly impact consumer spending.
In this environment, we are focusing on growing our gross
margin and simplifying our business to drive
cost efficiency.
We remain focused on returning to sales growth and
improving profitability in FY25. We believe that with our
portfolio of iconic global outdoor brands and leadership in
sustainability, we remain a unique investment proposition
and well-placed for the future.
During the reporting period there were no
instances of significant non-compliance with
laws or regulations across the Group and no
monetary fines (FY23: NZD $3,720). KMD Brands
defines a significant instance of non-compliance
to be a fine or sanction of $100,000 or more.
KMD Brands Annual Integrated Report 20245657
1. OVERVIEW
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
2. CREATING VALUE
3.
FINANCIAL
REPORT
C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S
31 JULY 2024
KEEPING IT SIMPLE ...
Notes to the consolidated financial statements provide information
required by accounting standards or NZX Listing Rules to explain a
particular feature of the financial statements. The notes that follow
will also provide explanations and additional disclosures to assist
readers’ understanding and interpretation of the annual integrated report
and the financial statements.
IN THIS SECTION...
The consolidated financial statements have been presented in a
style which attempts to make them less complex and more relevant to
shareholders. We have grouped the note disclosures into six sections:
‘Basis of Preparation’, ‘Results for the Year’, ‘Operating Assets and Liabilities’,
‘Capital Structure and Financing Costs’, ‘Group Structure’ and ‘Other Notes’.
Each section sets out the accounting policies applied in producing the
relevant notes. The purpose of this format is to provide readers with a clearer
understanding of what drives financial performance of the Group. The aim of the
text boxes is to provide commentary on each section or note, in plain English.
CONTENTS
Directors’ Approval of
Consolidated Financial Statements .........................................60
Consolidated Statement of Comprehensive Income ......61
Consolidated Statement of Changes in Equity .................62
Consolidated Balance Sheet .........................................................63
Consolidated Statement of Cash Flows .................................64
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Section 1: Basis of Preparation ..................................................66
Section 2: Results for the Year ...................................................69
Section 3: Operating Assets and Liabilities .......................78
Section 4: Capital Structure and Financing Costs ..........91
Section 5: Group Structure .......................................................100
Section 6: Other Notes .................................................................103
Auditor’s Report .................................................................................108
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
KMD Brands Annual Integrated Report 20245859
Directors’ Approval of Consolidated
Financial Statements For the Year Ended 31 July 2024
Consolidated Statement of
Comprehensive Income For the Year Ended 31 July 2024
Authorisation for Issue
The Board of Directors authorised the issue of these Consolidated Financial Statements on 25 September 2024.
Approval by Directors
The Directors present the Consolidated Financial Statements of KMD Brands Limited for the year ended
31 July 2024 on pages 61 to 107.
David Kirk Date
Michael Daly Date
For and on behalf of the Board of Directors
25 September 2024
25 September 2024
Section2024
NZ$’000
2023
NZ$’000
Sales2.2979,4151,102,994
Cost of sales(4 0 2,95 4)(4 51,0 4 9)
Gross profit 576,461651,945
Other income2.22,8311,840
Selling expenses(255,527)( 2 6 7,74 3 )
Administration and general expenses(176,199)(185,973)
Goodwill impairment expense3.3(4 0,331)-
(4 6 9,226)(4 51,876)
Earnings before interest, tax, depreciation, and amortisation107,235200,069
Depreciation and amortisation 3.2-3.4(128,303)(123,713)
Earnings before interest and tax
(21,068)76,356
Finance income1,322886
Finance expenses(26,966)(24,940)
Finance costs (net)4.1.1(25,6 4 4)(24,054)
(Loss)/Profit before income tax(46,712)52,302
Income tax expense 2.3(1,611)(15,688)
(Loss)/Profit after income tax(48,323)36,614
(Loss)/Profit for the year attributable to:
Shareholders of the Company(4 9,76 0)35,139
Non-controlling interest1,4371,475
Other comprehensive income that may be recycled through profit or loss:
Movement in cash flow hedge reserve 4.3.28,2318,499
Movement in foreign currency translation reserve4.3.213,4333,055
Other comprehensive income for the year, net of tax21,66411,554
Total comprehensive (loss)/income for the year(26,659)48,168
Total comprehensive (loss)/income for the year attributable to:
Shareholders of the Company(28,201)46,838
Non-controlling interest1,5421,330
Basic earnings per share2.4(7.0cps)4.9cps
Diluted earnings per share2.4(6.9cps)4.9cps
Weighted average basic ordinary shares outstanding (‘000)2.4711,548711,283
Weighted average diluted ordinary shares outstanding (‘000)2.472 3,78 4719,546
KMD Brands Annual Integrated Report 20246061
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Consolidated Statement of
Changes in Equity For the Year Ended 31 July 2024
Consolidated Balance Sheet As at 31 July 2024
Share
capital
NZ$’000
Cash flow
hedge
reserve
NZ$’000
Foreign
currency
translation
reserve
NZ$’000
Share-
based
payments
reserve
NZ$’000
Other
reserves
NZ$’000
Retained
earnings
NZ$’000
Non-
controlling
interest
NZ$’000
To t a l
equity
NZ$’000
Balance as at 31 July 2022626,3806,2186,4913,165(47)203,5254,726850,458
Profit after tax-----35,1391,47536,614
Other comprehensive income-8,4993,200---(145)11,554
Dividends paid-----(42,6 81)-(42,6 81)
Issue of share capital2,699--(2,699)----
Share based payment expense---568---568
Deferred tax on share-based
payment transactions
---252---252
Amounts transferred to initial
carrying amount of hedged items
-(14,443)-----(14,443)
Dividends paid to
non-controlling interest
------(685)(685)
Balance as at 31 July 2023629,0792749,6911,286(47)195,9835,371841,637
(Loss)/Profit after tax-----(4 9,76 0)1,437(4 8,323)
Other comprehensive income-8,23113,328---10521,664
Dividends paid-----(21,340)-(21,340)
Issue of share capital304--(30 4)----
Share based payment expense---291---291
Deferred tax on share-based
payment transactions
---(265)---(265)
Lapsed share options---(184)-184--
Amounts transferred to initial
carrying amount of hedged items
-(6,821)-----(6,821)
Dividends paid to
non-controlling interest
------(1,165)(1,165)
Balance as at 31 July 2024629,3831,68423,019824(47)125,0675,748785,678
Section2024
NZ$’000
2023
NZ$’000
ASSETS
Current assets
Cash and cash equivalents3.1.233,94849,488
Trade and other receivables3.1.388,992102,696
Inventories3.1.1266,877290,420
Derivative financial instruments4.23,6382,560
Current tax asset9,33012,278
Other current assets3.1.52,0361,860
Total current assets404,821459,302
Non-current assets
Trade and other receivables3.1.32,1961,856
Property, plant and equipment3.286,46182,942
Intangible assets3.3666,859704,402
Deferred tax assets2.314,69214,650
Right-of-use assets3.4.1262,571270,327
Total non-current assets1,032,7791,074,177
Total assets1 , 4 3 7,6 0 01,533,479
LIABILITIES
Current liabilities
Trade and other payables3.1.61 5 7, 5 5 6173,392
Derivative financial instruments4.21401,160
Current tax liabilities845718
Lease liabilities3.4.284,77683,232
Total current liabilities243,317258,502
Non-current liabilities
Trade and other payables3.1.616,14115,988
Interest bearing liabilities4.193,600105,209
Deferred tax liabilities2.389,46493,275
Lease liabilities3.4.2209,400218,868
Total non-current liabilities408,605433,340
Total liabilities651,922691,842
Net assets785,678841,637
EQUITY
Contributed equity - ordinary shares4.3.1629,383629,079
Reserves4.3.225,48011,204
Retained earnings125,067195,983
Non-controlling interest5,74 85,371
Total equity785,678841,637
KMD Brands Annual Integrated Report 20246263
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Consolidated Statement of Cash Flows
For the Year Ended 31 July 2024
Section2024
NZ$’000
2023
NZ$’000
Cash flows from operating activities
Cash was provided from:
Receipts from customers996,3271,103,833
Government grants received1406,019
Interest received1,322886
Income tax received6,6411,892
1,004,4301,112,630
Cash was applied to:
Payments to suppliers and employees824,489919,8 47
Income tax paid11,18122,969
Interest paid24,10722,226
859,777965,042
Net cash inflow from operating activities144,6531 47, 5 8 8
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of property, plant and equipment--
--
Cash was applied to:
Purchase of property, plant and equipment3.224,3142 7,6 6 5
Purchase of intangible assets3.38,2078,323
32,52135,988
Net cash (outflow) from investing activities(32,521)(35,988)
Cash flows from financing activities
Cash was provided from:
Proceeds from borrowings220,419132,955
220,419132,955
Cash was applied to:
Dividends paid22,50643,366
Repayment of borrowings235,08013 4,074
Repayment of lease liabilities91,20886,919
348,794264,359
Net cash (outflow) from financing activities(128,375)(131,404)
Net (decrease) in cash and cash equivalents held(16,243)(19,804)
Opening cash and cash equivalents 49,48870,810
Effect of foreign exchange differences703(1,518)
Closing cash and cash equivalents3.1.233,94849,488
RECONCILIATION OF NET PROFIT AFTER TAXATION WITH CASH INFLOW FROM
OPERATING ACTIVITIES
Section2024
NZ$’000
2023
NZ$’000
(Loss)/Profit after taxation(4 8,323)36,614
Movement in working capital:
(Increase) / decrease in trade and other receivables16,049(776)
(Increase) / decrease in inventories28,751(1,121)
(Increase) / decrease in other current assets(14 4)510
Increase / (decrease) in trade and other payables(19,114)( 17, 3 6 0 )
Increase / (decrease) in current tax liability3,203(9,002)
28,74 5( 2 7,74 9 )
Add non-cash items:
Depreciation of property, plant and equipment3.222,94022,824
Amortisation of intangibles3.316,34814,132
Depreciation of right-of-use assets3.4.189,0158 6,75 7
Impairment of assets3.3, 3.4.141,872(1,675)
Foreign currency translation of working capital balances(4 61)11,809
Increase / (decrease) in deferred taxation(6,131)3,610
Employee share-based remuneration6.3291568
Loss on sale of property, plant and equipment and intangibles3.2, 3.3357698
164,231138,723
Cash inflow from operating activities144,6531 47, 5 8 8
KMD Brands Annual Integrated Report 20246465
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Section 1: Basis of Preparation
IN THIS SECTION...
This section sets out the Group’s accounting policies that relate to the consolidated financial
statements as a whole. Where an accounting policy is specific to one note, the policy is described in
the note to which it relates.
1.1 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, Southeast Asia, Brazil and Japan.
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.
The Company is listed on the NZX and ASX.
The consolidated financial statements of the
Group have been prepared in accordance with the
requirements of Part 7 of the Financial Markets
Conduct Act 2013 and the NZX Listing Rules.
These audited consolidated financial statements have
been approved for issue by the Board of Directors on
25 September 2024.
1.2 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
These consolidated financial statements have been
prepared in accordance with Generally Accepted
Accounting Practice. They comply with the New
Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and other applicable Financial
Reporting Standards, as appropriate for for-profit entities.
The consolidated financial statements also comply with
International Financial Reporting Standards (IFRS).
The consolidated financial statements are presented
in New Zealand dollars, which is the Group’s
presentation currency.
1.2.1 Basis of preparation
The principal accounting policies adopted in the
preparation of the consolidated financial statements are
set out below. These policies have been consistently
applied to all periods presented, unless otherwise stated.
Basis of consolidation
The consolidated financial statements reported are for
the consolidated Group, which is the economic entity
comprising KMD Brands Limited and its subsidiaries.
The Group is designated as a for-profit entity for financial
reporting purposes.
Subsidiaries are consolidated from the date on which
control is obtained to the date on which control is lost.
Non-controlling interests are measured at their
proportionate share of the acquiree’s identified net assets
at the acquisition date. Changes in the Group’s interests
in a subsidiary that do not result in a loss of control are
accounted for as equity transactions.
In preparing the consolidated financial statements, all
material intra-group transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated. When
necessary, amounts reported by subsidiaries have been
adjusted to conform to the Group’s accounting policies.
Historical cost convention
These consolidated financial statements have been
prepared under the historical cost convention, as
modified by the revaluation of certain assets as identified
in the specific accounting policies provided below.
Critical accounting estimates
The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
discussed below.
Estimates and judgements are continually evaluated
and are based on historical experience as adjusted for
current market conditions and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances.
Further explanation as to estimates and assumptions
made by the Group can be found in the following notes to
the consolidated financial statements:
Area of estimationSection
Goodwill and brand
– assumptions underlying recoverable value
3.3
Foreign currency translation
The results and financial position of all the Group entities
(none of which have the currency of a hyper-inflationary
economy) that have a functional currency different
from the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities for each balance sheet presented
are translated at the closing rate at the date of that
balance sheet;
• Income and expenses for each statement of
comprehensive income are translated at average
exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the
dates of the transactions); and
• All resulting exchange differences are recognised in
other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations,
and of borrowings and other currency instruments
designated as hedges of such investments, are taken to
shareholders’ equity.
Changes in accounting policies
Details about changes in accounting policies
applied during the period are included in the
following notes to the financial statements:
Section
New standards and interpretations first applied
in the period
6.8
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 comparable to similar financial information
presented by other entities. The non-GAAP information
within the consolidated financial statements is subject
to audit.
KMD Brands Annual Integrated Report 20246667
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
1.3 CLIMATE CHANGE RISK
The Group’s operations may be impacted by future
climate change. These impacts may be physical (e.g.
severe or unusual weather patterns and events) or
transitional (e.g. changes to government regulations or
customer and supplier needs and demands).
The Group regularly assesses its operating environment
to monitor its exposure to risk, including climate
related risk. During the year ended 31 July 2024 the
Group completed a climate-related risk assessment to
inform its first Climate-Related Disclosure under the
Aotearoa New Zealand Climate Standards (NZ CS).
As part of this assessment, we have not identified any
significant impacts requiring specific disclosure in the
financial statements. Specific consideration has been
given in these financial statements to the impact of
future climate change on the useful lives of the Group’s
property, plant, and equipment (note 3.2), the inclusion
of expected renewals in the lease term for right-of-use
assets (note 3.4) and sustainability linked loans (note 4.1).
The identified climate-related risks and opportunities
including both physical and transitional impacts have
been considered as part of the above accounting
judgements and estimates. The Group will publish its
first Climate-Related Disclosure under NZ CS in
November 2024.
Section 2: Results for the Year
IN THIS SECTION...
This section focuses on the results and performance of the Group. On the following pages you will
find disclosures explaining the Group’s results for the year, segmental information, taxation and
earnings per share.
2.1 SEGMENT INFORMATION
An operating segment is a component of an entity that
engages in business activities that earns revenue and
incurs expenses and where the chief decision maker
reviews the operating results on a regular basis and
makes decisions on resource allocation.
The Group has three operating segments, representing
three brands owned by the Group and a Corporate
segment. These segments have been determined based
on the reports reviewed by the Group Chief Executive
Officer and Group Executive Management team.
Rip Curl – designer, manufacturer, wholesaler and retailer
of surfing equipment and apparel.
Kathmandu – designer, retailer, and wholesaler of
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 July 2024Rip Curl
NZ$’000
Kathmandu
NZ$’000
Oboz
NZ$’000
Corporate
NZ$’000
To t a l
NZ$’000
Total segment sales538,910361,30882,640-982,858
Sales to internal customers-2273,216-3,443
Sales to external customers538,910361,08179,424-979,415
Goodwill impairment expense--(4 0,331)-(4 0,331)
EBITDA82,63472,913(40,065)(8,247)107,235
Depreciation and amortisation(56,900)(69,538)(1 ,70 4)(161)(128,303)
EBIT25,7343,375(41,769)(8,408)(21,068)
Income tax expense(5,819)(2,280)2696,219(1,611)
Total segment assets732,670571,408120,54312,9791 , 4 3 7,6 0 0
Total assets include:
Non-current assets496,876452,85380,8982,1521 ,0 3 2,7 7 9
Additions to non-current assets5 7, 3 2 951,2883611,542110,520
Total segment liabilities293,679231,86326,51499,866651,922
KMD Brands Annual Integrated Report 20246869
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
31 July 2023Rip Curl
NZ$’000
Kathmandu
NZ$’000
Oboz
NZ$’000
Corporate
NZ$’000
To t a l
NZ$’000
Total segment sales581,504422,233102,819-1,106,556
Sales to internal customers--3,562-3,562
Sales to external customers581,504422,23399,257-1,102,994
Goodwill impairment expense-----
EBITDA9 7, 0 7 9105,3228,228(10,560)200,069
Depreciation and amortisation(54,955)( 6 7,0 7 9 )(1,625)(54)(123,713)
EBIT42,12438,2436,603(10,614)76,356
Income tax expense(9,826)(9,820)(1,407)5,365(15,688)
Total segment assets759,398586,676179,6697,7 3 61,533,479
Total assets include:
Non-current assets488,2504 6 6,7 78118,40174 81,074,177
Additions to non-current assets80,6735 9,73 31,004810142,220
Total segment liabilities2 9 7, 0 4 1258,25825,596110,947691,842
Sales to external customers by region
2024
NZ$’000
2023
NZ$’000
Australia493,9295 5 7,0 1 3
New Zealand110,867128,185
North America20 6,473243,398
Europe101,246105,325
Rest of world66,90069,073
979,4151,102,994
Non-current assets by region
2024
NZ$’000
2023
NZ$’000
Australia686,545681,420
New Zealand145,878160,327
North America140,449180,136
Europe34,81129,240
Rest of world25,09623,054
1 ,0 3 2,7 7 91,074,177
Sales to external customers by channel
2024
NZ$’000
2023
NZ$’000
Retail591,232653,108
Online92,98899,300
Wholesale284,011336,952
Licensing10,87313,158
Other311476
979,4151,102,994
2.2 PROFIT BEFORE TAX
Revenue recognition
The Group recognises revenue from the sale of footwear,
clothing and equipment for surfing and the outdoors, and
brand licencing arrangements. Revenue comprises the
fair value of the consideration received or receivable for
the sale of goods and brand licences, excluding goods
and services tax and discounts, and after eliminating
sales within the Group.
Retail sales
For sales of goods to retail customers, revenue is
recognised when control of the goods has transferred,
being at the point the customer purchases the goods at
a retail outlet. Payment of the transaction price is due
immediately at the point the customer purchases the
goods.
Online sales
For online sales, revenue is recognised when control
of the goods has transferred to the customer, being
at the point the goods are delivered to the customer.
Delivery occurs when the goods have been shipped to
the customer’s specific location. When the customer
initially purchases the goods online, the transaction price
received by the Group is recognised as a contract liability
until the goods have been delivered to the customer.
Wholesale sales
For sales to the wholesale market, revenue is recognised
when control of the goods has transferred, being when
the goods have been shipped to the wholesaler’s specific
location (delivery). Following delivery, the wholesaler has
full discretion over the manner of distribution and price
to sell the goods, has the primary responsibility when on
selling the goods and bears the risks of obsolescence and
loss in relation to the goods. A receivable is recognised
by the Group when the goods are delivered to the
wholesaler as this represents the point in time at which
the right to consideration becomes unconditional, as only
the passage of time is required before payment is due.
Sales returns
Under the Group’s standard contract terms, customers
have a right of return, typically within 30 days. At the
point of sale, a returns liability and a corresponding
adjustment to revenue is recognised for those products
expected to be returned. The Group uses its accumulated
historical experience to estimate the number of returns
on a portfolio level using the expected value method.
Given the consistent level of returns over previous years,
it is considered highly unlikely that a significant reversal
in the cumulative revenue recognised will occur.
Royalty revenue
Royalty revenue from brand license arrangements is
related to the provision of a right to access the license.
Revenue from sales-based royalties is recognised based
on a reliable estimate of subsequent sales made by
a licensee.
2024
NZ$’000
2023
NZ$’000
Sale of goods971,0551,091,290
Royalty revenue7,6 2 610,819
Commission revenue734885
979,4151,102,994
A breakdown of revenue by operating segment, sales
channel and geographical area is provided in note 2.1
Other income
2024
NZ$’000
2023
NZ$’000
Government grants140366
Insurance proceeds931-
Other1 ,76 01,474
2,8311,840
Government grants are not recognised until there is
reasonable assurance that the grants will be received and
that the Group will comply with the conditions attached
to them. Government grants that compensate the Group
for expenses incurred are recognised as revenue in the
statement of comprehensive income on a systematic
basis in the same period in which the expenses are
recognised. In both periods Government grants relate to
Apprenticeship Boost payments and grants to support
sustainability initiatives.
In the current period insurance proceeds relate to
the loss of the Maui store as result of the August
2023 wildfires.
KMD Brands Annual Integrated Report 20247071
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Employee entitlements
2024
NZ$’000
2023
NZ$’000
Wages, salaries, and other
short-term benefits
213,309218,104
Post-employment
benefits
13,60212,459
Employee share-based
remuneration
291568
2 2 7, 2 0 2231,131
2024
NZ$’000
2023
NZ$’000
Short-term lease expense3,0387, 9 24
Low-value lease expense1,1501,176
Variable lease expense1,8 47439
Rent concessions and
abatements
(920)(738)
Lease outgoings1 9,76 517,6 6 7
Depreciation right-of-use
asset (note 3.4.1)
89,0158 6,75 7
Interest expense related
to lease liabilities (note
3.4.2)
12,21711,022
126,112124,247
Lease expense
The Group is a lessee. Refer to note 3.4 for further details
around the Group’s leases and lease accounting policies.
Lease amounts recognised in the consolidated
statement of comprehensive income:
Some of the property leases in which the Group is the
lessee contain variable lease payment terms that are
linked to sales generated from the leased stores. Variable
payment terms are used to link rental payments to store
cash flows and reduce fixed cost.
Overall, the variable payments constitute up to 1.5%
(2023: 0.4%) of the Group's entire lease payments. The
variable payments depend on sales and consequently
on the overall economic development over the next few
years. Considering the development of sales expected
over the next three years, variable rent expenses are
expected to continue to present a similar proportion of
store sales in future years.
The total cash outflow for leases amounts to $132,177,000
(2023: $128,003,000).
2.3 TAXATION
KEEPING IT SIMPLE...
This section lays out the tax accounting policies, the current and deferred tax charges or credits
in the year (which together make up the total tax charge or credit in the consolidated statement of
comprehensive income), a reconciliation of profit before tax to the tax charge and the movements in
deferred tax assets and liabilities. The Group is subject to income taxes in multiple jurisdictions.
As a result there is complexity and judgement involved in determining the worldwide provision for
income taxes.
Accounting policies
Current and deferred income tax
The tax expense for the period comprises current and
deferred tax. Tax is recognised in the consolidated
statement of comprehensive income, except to the extent
that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is
recognised in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated based on the
tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Company and the
Company’s subsidiaries operate and generate taxable
income. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate based on
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between tax
bases of assets and liabilities and their carrying amounts
in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction
other than a business combination, that at the time of the
transaction, affects neither accounting nor taxable profit
or loss. Deferred income tax liability is not recognised if
it arises from the initial recognition of goodwill. Deferred
income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when
the related deferred income tax asset is realised, or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax is provided on temporary
differences arising on investments in subsidiaries,
except where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable
that the temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets and liabilities are offset
when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the
deferred income tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where
there is an intention to settle the balances on a net basis.
Goods and Services Tax (GST)
The consolidated statement of comprehensive income
and the consolidated statement of cash flows have been
prepared so that all components are stated exclusive
of GST. All items in the consolidated balance sheet are
stated net of GST, except for receivables and payables,
which include GST invoiced.
KMD Brands Annual Integrated Report 20247273
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Taxation – Consolidated statement of comprehensive income
The total taxation charge in the consolidated statement of comprehensive income is analysed as follows:
2024
NZ$’000
2023
NZ$’000
Current income tax charge7, 8 6 912,078
Deferred income tax charge / (credit)(6,258)3,610
Income tax charge reported in the consolidated statement of comprehensive income1,61115,688
To understand how, in the consolidated statement of comprehensive income, a tax charge of $1,611,000 (2023:
$15,688,000) arises on (loss)/profit before income tax of $(46,712,000) (2023: $52,302,000), the taxation charge that
would arise at the standard rate of New Zealand corporate tax is reconciled to the actual tax charge as follows:
Adjustments for prior periods primarily arise where an outcome is obtained on certain tax matters which differs from
expectations held when the related provision was made. Where the outcome is more favourable than the provision made,
the difference is released, lowering the current year tax charge. Where the outcome is less favourable than the provision,
an additional charge to the current year tax will occur.
During the year the Group did not recognise any new previously unrecognised tax losses (2023: nil).
2024
NZ$’000
2023
NZ$’000
(Loss)/Profit before income tax(4 6,71 2)52,302
Income tax calculated at 28%(13,079)14,645
Adjustments to taxation:
Adjustments due to different rate in different jurisdictions(308)321
Non-taxable income(3,099)(1 ,7 9 9)
Expenses not deductible for tax purposes14,1192,427
Utilisation of tax losses by group companies11(35)
Forfeited foreign tax credits1,145-
Adjustments in respect of prior years1,857(370)
Tax losses not recognised965499
Income tax charge reported in the consolidated statement of comprehensive income1,61115,688
The tax credit / (charge) relating to components of other comprehensive income is as follows:
2024
NZ$’000
2023
NZ$’000
Movement in cash flow hedge reserve before tax8,815)6,018
Tax (charge) / credit relating to cash flow hedge reserve(584)2,481
Movement in cash flow hedge reserve after tax8,231)8,499
Foreign currency translation reserve before tax13,4333,055
Tax credit / (charge) relating to foreign currency translation reserve-)-
Movement in foreign currency translation reserve after tax13,433)3,055
Other reserves before tax-)-
Tax credit / (charge) relating to other reserves-)-
Movement in other reserves after tax-)-
Total other comprehensive income / (expense) before tax22,248)9,073
Total tax (charge) / credit on other comprehensive income(584)2,481
Total other comprehensive income / (expense) after tax21,664)11,554
Current tax-)-
Deferred tax(584)2,481
Total tax credit / (charge) on other comprehensive income(584)2,481
KMD Brands Annual Integrated Report 20247475
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Taxation – Balance sheet
The following are the major deferred taxation liabilities and assets recognised by
the Group and movements thereon during the current and prior year:
Employee
obligations
NZ$’000
Intangibles
NZ$’000
Leases
NZ$’000
Other
temporary
differences
NZ$’000
Reserves
NZ$’000
Tax losses
NZ$’000
To t a l
NZ$’000
AS AT 31 JULY 2022
5,406)(116,299)12,343)14,065)(2,930)8,044)(79,371)
Recognised in the consolidated
statement of comprehensive income
(124)1,504)(665)(6,56 4)-)2,239)(3,610)
Recognised in other
comprehensive income
-)-)-)-)2,481)-)2,481)
Recognised directly in equity252)-)-)-)-)-)252)
Foreign exchange(112)2,395)(282)(214)47)(211)1,623)
AS AT 31 JULY 2023
5,422)(112,400)11,396)7, 2 8 7)(4 0 2)10,072)(78,625)
Recognised in the consolidated
statement of comprehensive income
(828)2,003)(476)8,0 47)-)(2,488)6,258)
Recognised in other
comprehensive income
-)-)-)-)(584)-)(584)
Recognised directly in equity(265)-)-)-)-)-)(265)
Foreign exchange72)(2,099)162)206)(13)116)(1,556)
AS AT 31 JULY 2024
4,401)(112,496)11,082)15,540)(999)7,7 0 0)( 74,7 72)
The deferred tax balance relates to:
• Property, plant and equipment temporary differences arising on differences in accounting and tax depreciation rates
• Employee benefit accruals
• Brands and customer relationships
• Unrealised foreign exchange gain / loss on intercompany loans
• Realised gain / loss on foreign exchange contracts not yet charged in the consolidated statement of
comprehensive income
• Lease accounting
• Inventory provisioning
• Temporary differences on the unrealised gain / loss in hedge reserve
• Employee share schemes
• Historic tax losses recognised
• Thin capitalisation interest denial
• Other temporary differences on miscellaneous items
Unrecognised deferred tax assets
Deferred tax assets have not been recognised
in respect of the following items:
2024
NZ$’000
2023
NZ$’000
Deductible temporary
differences
--
Tax losses6,9124,73 5
6,9124,73 5
The deductible temporary differences do not expire
under current tax legislation. Deferred tax assets have
not been recognised in respect of overseas subsidiaries
where it is not yet probable that future taxable profit will
be generated in those territories to utilise these benefits.
Imputation credits
The above amounts represent the balance of the
imputation account as at 31 July 2024, adjusted for:
• Imputation credits that will arise from the payment of
the amount of the provision for income tax.
• Imputation debits that will arise from the payment of
dividends recognised as a liability at the reporting date.
• Imputation credits that will arise from the receipt
of dividends recognised as receivables at the
reporting date.
The balance of Australian franking credits able to be used
by the Group in subsequent periods as at 31 July 2024 is
A$138,000 (2023: A$1,312,000).
2024
NZ$’000
2023
NZ$’000
Imputation credits
available for use in
subsequent reporting
periods based on a tax
rate of 28%
11990
2.4 EARNINGS PER SHARE
KEEPING IT SIMPLE...
Earnings per share (‘EPS’) is the amount
of post-tax profit attributable to each share.
Basic EPS is calculated by dividing the (loss)/
profit after tax attributable to equity holders
of the Company of $(49,760,000) (2023:
$35,139,000) by the weighted average number
of ordinary shares in issue during the year of
711,547,792 (2023: 711,283,439).
Diluted EPS reflects any commitments the Group
has to issue shares in the future that would
decrease EPS. In the current year, these are in the
form of share options / performance rights. To
calculate the impact, it is assumed that all share
options are exercised / performance rights taken,
and therefore, adjusting the weighted average
number of shares.
2024
’000
2023
’000
Weighted average
number of basic ordinary
shares in issue
711,548711,283
Adjustment for:
Share options /
performance rights
12,2368,263
72 3,78 4719,546
KMD Brands Annual Integrated Report 20247677
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Section 3: Operating Assets and Liabilities
IN THIS SECTION...
This section shows the assets used to generate the Group’s trading performance and the liabilities
incurred as a result. Liabilities relating to the Group’s financing activities are addressed in Section 4.
Deferred tax assets and liabilities are shown in note 2.3.
KEEPING IT SIMPLE...
Working capital represents the assets and liabilities the Group generates through its trading activity.
The Group therefore defines working capital as inventory, cash, trade and other receivables, other
financial assets, other current assets and trade and other payables and other financial liabilities.
3.1 WORKING CAPITAL
3.1.1 Inventory
Accounting policies
Inventories are stated at the lower of cost and net
realisable value. The Group uses the weighted average
cost, first in first out and standard cost methods to
determine cost. Cost includes expenditure incurred
in acquiring the inventories and bringing them to
their existing location and condition. In the case of
manufactured inventories and work in progress, cost
includes an appropriate share of production overheads
based on normal operating capacity. Net realisable value
is the estimated selling price in the ordinary course
of business, less applicable variable selling expenses.
Inventory is considered in transit when the risk and
rewards of ownership have transferred to the Group.
The Group assesses the likely residual value of inventory.
Inventory provisions are recognised for inventory that
is expected to sell for less than cost, and for the value
of inventory likely to have been lost to the business
through shrinkage between the date of the last applicable
stocktake and balance sheet date. In recognising the
provision for inventory, judgement has been applied
by considering a range of factors including historical
results, stock shrinkage trends and product lifecycle.
Inventory is broken down into trading
stock and goods in transit below:
Inventory has been reviewed for obsolescence
and a provision of $4,747,000 (2023:
$5,026,000) has been made.
3.1.2 Cash and cash equivalents
2024
NZ$’000
2023
NZ$’000
Raw materials and
consumables
5,9509,680
Work in progress8302,144
Trading inventory24 3,5 47252,399
Goods in transit16,55026,197
266,877290,420
2024
NZ$’000
2023
NZ$’000
Cash on hand496525
Cash at bank31,91546,390
Short term investments
convertible to cash
1,5372,573
33,94849,488
The carrying amount of the Group's cash and cash
equivalents are denominated in the following currencies:
2024
NZ$’000
2023
NZ$’000
USD9,3879,75 8
THB7, 9 2 64,571
EUR5,64614,348
AUD3,76 26,206
IDR2,0912,151
BRL1,6092,868
CAD1,1692,996
GBP9902,093
JPY565574
NZD3782,899
Other currencies4251,024
33,94849,488
2024
NZ$’000
2023
NZ$’000
USD28,89745,583
AUD14,53017, 3 9 7
THB9,8798,048
EUR8,8048,637
NZD8,0757, 1 5 8
BRL6,6515,349
GBP6,1604,956
CAD5,1554,094
CHF1,1661,100
IDR1,1621,454
JPY524460
Other currencies185316
91,188104,552
3.1.3 Trade and other receivables
Accounting policies
Trade and other receivables are recognised initially
at the value of the invoice sent to the customer (fair
value) and subsequently at the amounts considered
recoverable (amortised cost). The collectability of trade
and other receivables is reviewed on an on-going basis.
An allowance for lifetime expected credit losses is
recognised for trade and other receivables based on
the Group’s historical credit loss experience, adjusted
for factors that are specific to the debtors, general
economic conditions, and an assessment of both the
current as well as the forecast direction of conditions at
the reporting date, including time value of money where
appropriate. The expected credit loss is estimated as
the difference between all contractual cash flows that
are due to the Group in accordance with the contract
and all the cash flows that the Group expects to receive,
discounted at the original effective interest rate.
2024
NZ$’000
2023
NZ$’000
Current
Trade receivables68,10779,933
Allowance for expected
credit losses
(5,973)(5,620)
Prepayments18,29918,156
Other receivables8,55910,227
88,992102,696
Non-current
Other debtors2,1961,856
2,1961,856
Other non-current debtors include security deposits paid
in relation to store leases.
The carrying amount of the Group’s trade and other
receivables are denominated in the following currencies:
KMD Brands Annual Integrated Report 20247879
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Allowance for expected credit losses
2024
NZ$’000
2023
NZ$’000
Opening balance(5,620)(5,96 4)
Additional allowance
recognised in the
consolidated statement
of comprehensive income
(2,290)(820)
Receivables written-off
during the year
698256
Unused provision
released to the
consolidated statement
of comprehensive income
during the year
1,1801,023
Foreign exchange59(115)
Closing balance(5,973)(5,620)
3.1.4 Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails
to meet its contractual obligations.
RiskExposure
arising from
MonitoringManagement
Credit riskCash and cash
equivalents
Credit ratingsObtaining
customer
credit rating
information
Trade and other
receivables
Aging analysisConfirming
references
Derivative
financial
instruments
Review of
exposure with
regular terms of
trade
Setting
appropriate
credit limits
Exposure to credit risk
The below balances are recorded at their carrying
amount after any allowance for expected credit loss on
these financial instruments. The maximum exposure to
credit risk at reporting date was (carrying amount):
2024
NZ$’000
2023
NZ$’000
Cash and cash equivalents33,45248,963
Trade receivables (net)62,13474,313
Other receivables9,35710,922
Derivative financial instruments3,4981,400
108,441135,598
As at balance sheet date the carrying amount is
considered to approximate fair value for each of the
financial instruments.
The credit quality of cash and cash equivalents can be
assessed by reference to external credit ratings, such as
Standard & Poors or Moody’s (if available) or to historical
information about counterparty default rates:
2024
NZ$’000
2023
NZ$’000
Cash and cash equivalents:
Standard & Poors - AA-6,23611,605
Standard & Poors - A+2,9957,0 1 5
Standard & Poors - A560588
Standard & Poors - A-8,5788,949
Standard & Poors - BBB+6,24310,75 7
Standard & Poors - BBB7, 5 4 03,599
Standard & Poors - BBB--2,208
Standard & Poors - BB+1,203-
Standard & Poors - BB301,380
Standard & Poors - BB-672,862
33,45248,963
Trade and other receivables consist of a large number of
customers spread across diverse geographical regions,
which reduces credit risk.
As at balance sheet date, trade and other receivables
of $24,771,000 (2023: $32,318,000) were past due. A
provision of $5,973,000 (2023: $5,620,000) is held
against these overdue amounts. This provision is based
on expected life time credit losses, taking into account
historic loss rates, age of the outstanding balances,
customer payment history and any arrangements,
leverage or security in place with the customer. Interest is
charged on overdue debtors in some instances.
The ageing analysis of these past due trade
receivables is:
2024
NZ$’000
2023
NZ$’000
0 to 30 days6,4198,117
30 to 60 days5,0594,432
60 to 90 days3,2324,251
90 days and over10,06115,518
24,7 7132,318
The Group considers a financial asset to be in default
when the debtor is unlikely to pay its credit obligations in
full, without recourse by the Group. The gross carrying
amount of a financial asset is written off when the
Group has no reasonable expectations of recovering
a financial asset in its entirety or a portion thereof.
3.1.5 Other assets
Accounting policies
Other assets relate to rights of return assets. Rights of
return recognises the estimated returned sales under
the Group's returns policies. Management estimates the
returned sales based on historical sales return information
and any recent trends that may suggest future claims
could differ from historical amounts. For sales that are
expected to be returned, the Group recognises a returns
provision as disclosed in note 3.1.6. The associated
inventory value for sales that are expected to be returned
is recognised as a right of return asset. The costs to
recover the products are not material because the
customers usually return them in a saleable condition.
2024
NZ$’000
2023
NZ$’000
Right of return assets
Opening balance1,8602,434
Additional amounts
recognised
2,804199
Amounts incurred
and charged
(2,668)(709)
Foreign exchange40(6 4)
2,0361,860
3.1.6 Trade and other payables
Accounting policies
Trade payables, sundry creditors and accruals
principally comprise amounts outstanding for trade
purchases and ongoing costs. Trade and other
payables are initially measured at fair value and
subsequently measured at amortised cost, using
the effective interest method. The carrying value
of trade payables is considered to approximate fair
value as amounts are unsecured and are usually paid
by the 30th of the month following recognition.
Employee entitlements relates to benefits accruing to
employees in respect of wages and salaries, annual leave,
and long service leave when it is probable that settlement
will be required, and they are capable of being measured
reliably. Provisions made in respect of employee benefits
expected to be settled within 12 months are measured
at their nominal values using the remuneration rate
expected to apply at the time of settlement. Provisions
made in respect of employee benefits which are not
expected to be settled within 12 months are measured
as the present value of the estimated future cash
outflows to be made by the Group in respect of services
provided by employees up to the reporting date.
2024
NZ$’000
2023
NZ$’000
Current
Trade payables85,13889,909
Employee entitlements24,92525,105
Sundry creditors and
accruals
39,53949,904
Provisions7, 4 5 37, 8 6 2
Revenue received in
advance
501612
1 5 7, 5 5 6173,392
Non-current
Employee entitlements3,6003,020
Provisions12,54111,832
Sundry creditors and
accruals
-1,136
16,14115,988
The carrying amount of the Group’s trade and other
payables are denominated in the following currencies:
2024
NZ$’000
2023
NZ$’000
AUD65,52161,855
USD58,84372,523
NZD18,12124,531
EUR11,14014,552
THB6,8196,663
GBP3,805357
IDR2,8602,302
BRL2,5314,983
CAD2,1941,243
Other currencies1,863371
173,697189,380
KMD Brands Annual Integrated Report 20248081
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Provisions
A provision is recognised if, as a result of a past event,
the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle
the obligation.
The warranties provision represents the present value
of the estimated future outflow of economic benefits
that will be required under the Group’s obligations for
warranties under local sale of goods legislation. The
provision relates to wetsuits, watches and footwear and
is based on estimates made from historical warranty data
associated with similar products and services.
A restructuring provision is recognised when the Group
has approved a detailed and formal restructuring plan,
and the restructuring has either commenced or has been
announced publicly at balance date.
Lease restoration provision represents the present value
of the estimated cost to restore leased properties to their
original condition upon expiry of the lease.
Where a customer has a right to return a product within
a given period, the Group recognises a returns provision
for the consideration received that will be required to
be refunded to customers on return of the product. The
Group also recognises a right to the returned goods as
disclosed in note 3.1.5.
Other provisions relate to miscellaneous amounts that
meet the definition of a provision and do not relate to the
other categories.
Warranties
NZ$’000
Restructuring
NZ$’000
Lease
restoration
NZ$’000
Sales returns
NZ$’000Other
To t a l
NZ$’000
Year ended 31 July 2023
Opening balance1,95244511,3945,1157941 9,70 0
Additional provisions recognised6941 ,74 51,056411-3,906
Provisions used during the year(6 4 4)(167)---(811)
Provisions remeasured
during the year
(4 0 5)(113)(528)(1,0 4 4)(789)(2,879)
Foreign exchange(27)37(90)(137)(5)(222)
Closing balance1,5701,9 4711,8324,345-19,694
As at 31 July 2023
Current1,5701,9 47-4,345-7, 8 6 2
Non-current--11,832--11,832
1,5701,9 4711,8324,345-19,694
Year ended 31 July 2024
Opening balance1,5701,9 4711,8324,345-19,694
Additional provisions recognised4569849396,820-9,199
Provisions used during the year(4 9 4)(1,553)(423)(6,497)-(8,967)
Provisions remeasured
during the year
(73)(209)-(4 4)-(326)
Foreign exchange3618193147-394
Closing balance1,4951,18712,5414,7 71-19,994
As at 31 July 2024
Current1,4951,187-4,7 71-7, 4 5 3
Non-current--12,541--12,541
1,4951,18712,5414,7 71-19,994
KEEPING IT SIMPLE...
The following section shows the physical assets used by the Group to operate the business,
generating revenues and profits. These assets include store and office fit-out, as well as equipment
used in sales and support activities.
Assets are recognised only when it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
3.2 PROPERTY, PLANT AND EQUIPMENT
Accounting policies
Property, plant and equipment
All property, plant and equipment are stated at historical
cost less depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the
acquisition of the items. Cost may also include transfers
from equity of any gains / losses on qualifying cash flow
hedges of foreign currency purchases of property, plant
and equipment.
The assets’ residual value and useful lives are reviewed
and adjusted if appropriate at each balance sheet date.
Capital work in progress is not depreciated until available
for use.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Depreciation
Depreciation of property, plant and equipment is
calculated using straight line and diminishing value
methods to expense the cost of the assets over
their useful lives. Store and office fitouts are typically
depreciated over the expected primary lease term. The
rates are as follows:
Buildings 5 – 10%
Leasehold improvements 5 – 50%
Office, plant and equipment 5 – 50%
Furniture and fittings 10 – 50%
Computer equipment 10 – 50%
The useful lives of the Group’s property, plant and
equipment including store and office fitouts and wetsuit
manufacturing facilities are reviewed annually to
determine whether there have been any changes due to
operational or external factors, including climate change
considerations, and updated as appropriate. There have
been no such changes identified during the financial year.
Impairment of assets
Property, plant and equipment is reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an
asset’s fair value less costs of disposal and value in use.
KMD Brands Annual Integrated Report 20248283
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Land &
buildings
NZ$’000
Leasehold
improvements
NZ$’000
Office, plant &
equipment
NZ$’000
Furniture &
fittings
NZ$’000
Computer
equipment
NZ$’000
To t a l
NZ$’000
As at 31 July 2022
Cost 8,832)101,681)31,253)115,582)19,293)276,641)
Accumulated depreciation(4,197)(76,237)(1 8,7 73)(82,503)(15,688)( 1 9 7, 3 9 8 )
Closing net book value4,635)25,444)12,480)33,079)3,605)79,243)
Year ended 31 July 2023
Opening net book value4,635)25,444)12,480)33,079)3,605)79,243)
Additions493)12,002)3,014)11,024)1,132)2 7,6 6 5)
Disposals-)(95)(86)(512)(7)(700)
Depreciation(404)(10,376)(1,598)(8,96 4)(1,482)(22,824)
Transfers between categories &
to intangibles
201)1,141)(669)(1,651)276)(702)
Foreign exchange463)(266)(75)9147)260)
Closing net book value5,388)2 7, 8 5 0)13,066)33,067)3,571)82,942)
As at 31 July 2023
Cost 10,382)108,370)32,325)97,762)17, 8 7 9)26 6,71 8)
Accumulated depreciation(4,994)(80,520)(19,259)(64,695)(14,308)(1 8 3,7 76)
Closing net book value5,388)2 7, 8 5 0)13,066)33,067)3,571)82,942)
Year ended 31 July 2024
Opening net book value5,388)2 7, 8 5 0)13,066)33,067)3,571)82,942)
Additions2,099)8,859)1,145)10,971)1,240)24,314)
Disposals-)(68)(15)(113)(4 5)(241)
Depreciation(4 0 8)(8,366)(1,642)(10,961)(1,563)(22,940)
Transfers between categories &
to intangibles
85)288)(78)751)30)1,076)
Foreign exchange100)498)163)518)31)1,310)
Closing net book value7, 2 6 4)29,061)12,639)34,233)3,264)86,461)
As at 31 July 2024
Cost 12,435)1 17, 3 0 5)33,499)10 9,017)18,875)291,131)
Accumulated depreciation(5,171)(88,24 4)(20,860)( 74,78 4)(15,611)(204,670)
Closing net book value7, 2 6 4)29,061)12,639)34,233)3,264)86,461)
Depreciation expense is excluded from administration
and general expenses in the consolidated statement of
comprehensive income.
Sale of property, plant and equipment
Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These
are included in the consolidated statement of
comprehensive income.
Capital commitments
Capital commitments contracted for at
balance sheet date include property, plant and
equipment of $654,000 (2023: $1,790,000).
2024
NZ$’000
2023
NZ$’000
Loss on sale of property,
plant and equipment
240698
Property, plant and equipment
Property, plant and equipment can be analysed as follows:
3.3 INTANGIBLE ASSETS
KEEPING IT SIMPLE...
The following section shows the non-physical assets used by the Group to operate the business,
generating revenues and profits. These assets include brands, customer relationship, software
development and goodwill.
This section explains the accounting policies applied and the specific judgements and estimates made by the
Directors in arriving at the net book value of these assets.
Accounting policies
Goodwill
Goodwill arises on the acquisition of subsidiaries. Goodwill
represents the excess of the cost of the acquisition over
the Group’s interest in the net fair value of the assets and
liabilities of the acquiree. Separately recognised goodwill
is tested annually for impairment or more frequently
if events or changes in circumstances indicate that it
might be impaired. It is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not
reversed.
Goodwill is allocated to cash-generating units for the
purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating
units that are expected to benefit from the business
combination in which the goodwill arose.
Brand
Acquired brands are carried at original cost based on
independent valuation obtained at the date of acquisition.
The brand represents the price paid to acquire the
rights to use the Kathmandu, Oboz or Rip Curl brand.
The brand is not amortised. Instead, the brand is tested
for impairment annually or more frequently if events
or changes in circumstances indicate that it might
be impaired and is carried at cost less accumulated
impairment losses.
Customer relationships
Acquired customer relationships are carried at original
cost based on independent valuation obtained at the date
of acquisition less accumulated amortisation. They are
amortised on a straight-line basis over a useful life of five to
10 years. The estimated useful life and amortisation period
is reviewed at the end of each annual reporting period.
Software costs
Software costs have a finite useful life. Software costs are
capitalised and amortised over the useful economic life.
Costs associated with maintaining computer software
programs are recognised as an expense when incurred.
Costs that are directly associated with the creation or
acquisition of an identifiable software asset controlled
by the Group, and that will probably generate economic
benefits exceeding costs beyond one year, are recognised
as intangible assets. Direct costs include the costs of
software development employees and contractors.
Software is amortised over the estimated useful
economic life of the asset ranging from two to 10 years.
Software-as-a Service (SaaS) arrangements
SaaS arrangements are arrangements in which the Group
does not currently control the underlying software used
in the arrangement.
Where implementation costs for SaaS arrangements
result in the creation of an identifiable software asset,
and where the Group has the power to obtain the future
economic benefits flowing from the underlying resource
and to restrict the access of others to those benefits,
such costs are recognised as a separate intangible
software asset and amortised over the useful life of the
software on a straight-line basis.
Where costs incurred to configure or customise SaaS
arrangements do not result in the recognition of an
intangible software asset, then those costs that provide
the Group with a distinct service (in addition to access to
the SaaS software) are recognised as expenses when the
supplier provides the services. When such costs incurred
do not provide a distinct service, the costs are recognised
as expenses over the duration of the expected renewable
term of the arrangement.
KMD Brands Annual Integrated Report 20248485
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Other intangibles
Other intangibles relate to lease rights expenditure
associated with acquiring existing lease agreements for
stores where there is an active market for key money.
They are carried at original cost less accumulated
impairment losses. Other intangibles have an indefinite
useful life and are tested annually for impairment.
Impairment
Assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying
amount may not be recoverable. Intangible assets that
have an indefinite useful life, including goodwill, are
not subject to amortisation and are tested annually for
impairment irrespective of whether any circumstances
identifying a possible impairment have been identified. An
impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an
asset’s fair value less costs of disposal and value in use.
For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there
are separately identifiable cash flows e.g., cash
generating units.
Intangible assets
Goodwill
NZ$’000
Brand
NZ$’000
Customer
relationship
NZ$’000
Software
NZ$’000
Other
intangibles
NZ$’000
To t a l
NZ$’000
As at 31 July 2022
Cost 291,272368,16742,8928 4,4714,162790,964
Accumulated amortisation(1,271)-(15,164)( 5 3,73 3)(1,474)(71,642)
Closing net book value290,001368,1672 7,7 2 83 0,73 82,688719,322
Year ended 31 July 2023
Opening net book value290,001368,1672 7,7 2 83 0,73 82,688719,322
Additions---8,323-8,323
Disposals------
Amortisation--(5,303)(8,822)(7)(14,132)
Transfers from property, plant and---702-702
equipment
Foreign exchange(2,121)( 7, 24 6 )( 70 4)(13)271(9,813)
Closing net book value2 8 7, 8 8 0360,92121,72130,9282,952704,402
As at 31 July 2023
Cost 289,151360,92141 ,73 995,1094,582791,502
Accumulated amortisation(1,271)-(20,018)(64,181)(1,630)(87,100)
Closing net book value2 8 7, 8 8 0360,92121,72130,9282,952704,402
Year ended 31 July 2024
Opening net book value2 8 7, 8 8 0360,92121,72130,9282,952704,402
Additions---8,178298,207
Disposals---(117 )-(117 )
Amortisation--(5,269)(11,079)-(16,348)
Impairment(4 0,331)----(4 0,331)
Transfers from property, plant and equipment---(1,076)-(1,076)
Foreign exchange4,5786,8253413027612,122
Closing net book value252,1273 6 7,74 616,7 9 32 7, 1 3 63,057666,859
As at 31 July 2024
Cost 294,6843 6 7,74 642,570104,1194,728813,8 47
Accumulated amortisation(42,5 57 )-(25,777)(76,983)(1,671)(146,988)
Closing net book value252,1273 6 7,74 616,7 9 32 7, 1 3 63,057666,859
Sale of intangibles
Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These
are included in the consolidated statement of
comprehensive income.
Impairment tests for goodwill and brand
The aggregate carrying amounts of goodwill and
brand allocated to each unit for impairment testing are
as follows:
2024
NZ$’000
2023
NZ$’000
Loss on sale of intangibles117-
GoodwillBrand
2024
NZ$’000
2023
NZ$’000
2024
NZ$’000
2023
NZ$’000
Kathmandu122,599122,041152,210150,352
Oboz36,07574,10142,48940,699
Rip Curl93,45391,738173,0 47169,870
252,1272 8 7, 8 8 03 6 7,74 6360,921
For the purposes of goodwill and brand impairment
testing, the Group operates as three cash generating
units, Kathmandu, Rip Curl and Oboz, which are
aligned to the Group’s operating segments as outlined
in note 2.1. Impairment testing for the Oboz CGU
has been considered in a separate section below.
The recoverable amount of the Kathmandu and Rip Curl
CGU’s have been determined based on the fair value
less cost of disposal (FVLCOD). Five-year projected
cash flows are used to determine the FVLCOD.
The discounted cash flow valuations were calculated
using post tax cash flow projections based on financial
budgets prepared by management and approved
by the Directors for the year ended 31 July 2025.
Cash flows beyond July 2025 are based on three-
year business plans presented to the Directors.
Assumptions used:
20242023
KathmanduRip CurlKathmanduRip Curl
Pre-tax WACC rate14.6%14.5%14.6%14.4%
Post-tax WACC rate10.3%10.2%10.3%10.1%
Terminal growth rate2.9%3.0%2.9%3.0%
The terminal growth rate assumptions are based on
current inflation targets and do not exceed the historical
long-term average growth rate for each CGU. Pre-
tax discount rates are calculated based on a market
participant expected capital structure and cost of
debt to derive a weighted average cost of capital.
The expected continued promotion and marketing
of the Kathmandu and Rip Curl brands support the
assumption that the brands have an indefinite life.
The Group has considered the impact of climate
change on the key assumptions included in its
impairment testing and has concluded that it will not
have a material impact on the key assumptions.
The FVLCOD calculations for Kathmandu and Rip Curl
confirmed that the recoverable amount exceeds the
carrying value and as a result there was no impairment
of goodwill and brand during the year (2023: nil).
Impairment of Oboz CGU
The recoverable amount of the Oboz CGU has been
determined based on the higher of fair value less
cost of disposal and value in use, using five-year
projected cashflows.
The discounted cash flow valuations were calculated
using post tax cash flow projections based on FY25
financial budgets prepared by management and
approved by the Directors for the year ended 31 July
2025. The valuation cash flows beyond July 2025 are
based on strategic plans, future growth ambitions and
historic revenue growth rates coupled with a conservative
near term view of the US wholesale market.
The key assumptions used within the Oboz impairment
model include;
• Compound annual sales growth rate
of 12.4% from 2024 to 2029
• Terminal growth rate of 2.5% (2023: 2.5%)
• Post-tax discount rate of 11.0% (2023: 10.7%)
KMD Brands Annual Integrated Report 20248687
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
The calculation indicated the carrying value of the Oboz
CGU exceeded its recoverable value and therefore a
goodwill impairment of $40,331,000 (USD $24,400,000)
has been recognised in the current period.
Prior to COVID-19 the Oboz CGU achieved year on year
double digit revenue and EBITDA growth percentages.
Previously we expected to achieve an EBITDA margin of
16% by FY26, however, given the current prevailing market
conditions the likely timeframe has been extended
beyond FY29. Oboz brand sales are down 20% year on
year as wholesalers reduced their inventory holdings in
response to a challenging consumer environment. The
current Oboz orderbooks for US wholesale customers
remain subdued indicating a more gradual recovery back
to the average long run sales growth rates from FY26.
If the wholesale market in the US does not rebound as
expected in FY26 the Group may need to reconsider the
operating cost base of the Oboz CGU. The three-year
strategy plans have the Oboz CGU delivering at least 11%
EBITDA margin in FY27.
The impairment model remains highly sensitive to
changes in key assumptions and estimates. The
sensitivities below illustrate the range of the potential
impacts to the recoverable amount from changes in key
assumptions with all other factors remaining unchanged.
• A sales change of +/- 10.0% per annum results in
a change in the impairment loss of approximately
$14,300,000.
• An increase in the terminal growth rate of 0.5% results
in a reduction in the impairment loss of approximately
$4,900,000. A decrease in the terminal growth rate of
0.5% results in an increase in the impairment loss of
approximately $4,400,000.
• An increase in the discount rate by 1.0% results in
an increase in the impairment loss of approximately
$11,200,000. A decrease in the discount rate by
1.0% results in decrease in the impairment loss of
approximately $14,400,000.
The Group will continue to complete annual impairment
testing of the Oboz CGU, however, impairment losses on
goodwill are not reversed.
The expected continued promotion and marketing of the
Oboz brand supports the assumption that the brand has
an indefinite life.
3.4 LEASES
KEEPING IT SIMPLE...
The following section shows the assets
leased by the Group to operate the business,
generating revenues and profits. These assets
include the lease of retail stores.
This section explains the accounting policies
applied and the specific judgements and
estimates made by the Directors in arriving
at the carrying value of these assets and the
corresponding lease liability.
Accounting policies
The Group assesses whether a contract is or contains a
lease, at inception of a contract. The Group recognises
a right-of-use asset and a corresponding lease liability
with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases
with a term of 12 months or less) and leases of low value
assets. For these leases, the Group recognises the
lease payments as an operating expense on a straight-
line basis over the term of the lease unless another
systematic basis is more representative of the time
pattern in which economic benefits from the leased asset
are consumed.
Lease liability
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing
rate. The Group’s incremental borrowing rate has been
determined as the rate of interest that the Group would
have to pay to borrow over a similar term and with a
similar security the funds necessary to obtain an asset
of a similar value to the right-of-use asset in a similar
economic environment.
Lease payments included in the measurement of the
lease liability comprise:
• fixed lease payments (including in-substance fixed
payments), less any lease incentives; and
• variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and
by reducing the carrying amount to reflect the lease
payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use
asset) whenever:
• the lease term has changed in which case the lease
liability is remeasured by discounting the revised lease
payments using a revised discount rate;
• the lease payments change due to changes in an
index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease
payments using the initial discount rate (unless the
lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate
is used);
• a lease contract is modified, and the lease modification
is not accounted for as a separate lease, in which case
the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
Right-of-use asset
The right-of-use assets comprise the initial measurement
of the corresponding lease liability, lease payments made
at or before the commencement day and any initial direct
costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to
dismantle and remove a leased asset, restore the site
on which it is located or restore the underlying asset to
the condition required by the terms and conditions of
the lease, a provision is recognised and measured under
NZ IAS 37. The costs are included in the related right-of-
use asset.
Right-of-use assets are depreciated over the lease term
including expected renewals. The depreciation starts at
the commencement date. Changes due to operational or
external factors, including climate change are considered
when assessing the inclusion of expected renewals in the
lease term.
The Group applies NZ IAS 36 Impairment of Assets to
determine whether a right-of-use asset is impaired and
accounts for any identified impairment loss.
Variable rents
Variable rents that do not depend on an index or rate
are not included in the measurement of the lease liability
and the right-of-use asset. The related payments are
recognised as an expense in the period in which the
event or condition that triggers those payments occurs
and are included in the selling expenses line in the
consolidated statement of comprehensive income.
Group as a lessee
The Group leases several assets including buildings and
motor vehicles. Some of the existing lease arrangements
have right of renewal options for varying terms. Renewal
options are included within the lease if the Group is
reasonably certain to take up the option. The average
lease term for property leases, including expected rights of
renewal, is nine years (2023: nine years). The average lease
term for vehicle leases is four years (2023: three years).
3.4.1 Right-of-use assets
The movements in right of use assets were as follows:
2024
NZ$’000
2023
NZ$’000
Opening net book value270,327250,372
Additions and modifications to
right-of-use asset
77,999106,231
Depreciation for the period(89,015)(8 6,75 7 )
Impairment for the period(1,541)1,675
Foreign exchange4,801(1,194)
Closing net book value262,571270,327
Cost598,218518,760
Accumulated amortisation
& impairment
(335,6 47 )(248,433)
Closing net book value262,571270,327
KMD Brands Annual Integrated Report 20248889
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Gross lease
payments
NZ$’000
Interest
NZ$’000
Carrying
amount
NZ$’000
As at 31 July 2023
Within 1 year92,839(9,607)83,232
1 to 5 years195,533(16,168)179,36 5
Beyond 5 years41,651(2,148)39,503
330,023(27,923)302,100
Current83,232
Non-current218,868
302,100
As at 31 July 2024
Within 1 year95,544(10,76 8)84,776
1 to 5 years1 9 7, 2 7 9(16,206)181,073
Beyond 5 years29,550(1,223)28,327
322,373(28,197)294,176
Current84,776
Non-current209,400
294,176
Lease liability maturity analysis
3.4.2 Lease liabilities
The movements in lease liabilities were as follows:
2024
NZ$’000
2023
NZ$’000
Opening lease liabilities302,100284,587
Additions and modifications to lease liability78,289108,025
Interest expense on lease liabilities12,21711,022
Repayment of lease liabilities (including interest)(10 3,716)(99,736)
Foreign exchange5,286(1 ,7 9 8)
Closing lease liabilities294,176302,100
Section 4: Capital Structure and
Financing Costs
IN THIS SECTION...
This section outlines how the Group manages its capital structure and related financing costs,
including its balance sheet liquidity and access to capital markets.
Capital structure is how an entity finances its overall operations and growth by using different
sources of funds. The Directors determine and monitor the appropriate capital structure of the
Group, specifically how much is raised from shareholders (equity) and how much is borrowed from
financial institutions (debt) to finance the Group’s activities both now and in the future.
The Directors consider the Group’s capital structure and dividend policy at least twice a year ahead
of announcing results and do so in the context of its ability to continue as a going concern, to
execute strategy and to deliver its business plan.
4.1 INTEREST BEARING LIABILITIES
Accounting policies
Interest bearing liabilities are the Group’s borrowings.
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in the consolidated statement of
comprehensive income over the period of the borrowings
using the effective interest method.
Borrowings are classified as current liabilities unless the
Group has a right to defer settlement of the liability for at
least 12 months after the balance sheet date.
The table below separates borrowings into current and
non-current liabilities:
2024
NZ$’000
2023
NZ$’000
Current portion--
Non-current portion93,600105,209
93,600105,209
Group Facility Agreement
The Group has a multi-option syndicated facility, which
consists of an A$240 million multi-currency revolving
facility and a NZ$54 million multi-currency revolving
facility. Both facilities are sustainability linked with targets
such as reducing greenhouse gas emissions, continued B
Corp certification, and improving transparency within the
Group supply chain, including the wellbeing and labour
conditions of workers, and environmental metrics. All
facilities are repayable in full on 12 November 2026.
Interest is payable based on the BKBM rate (NZD
borrowings), the BBSY rate (AUD borrowings), SOFR
rate (US borrowings) or the applicable short-term rate
for interest periods less than 30 days, plus a margin
of between 1.05% - 1.31%. The debt is secured by the
assets of the guaranteeing group in accordance with the
Security Trust Deed dated 25 October 2019 as amended
12 May 2023. The guaranteeing group comprises entities
operating in New Zealand, Australia, North America and
the United Kingdom. The carrying value of the assets
held by the guaranteeing group are $1,351,957,000 (2023:
$1,444,870,000).
The covenants entered into by the Group require
specified calculations of Group earnings before interest,
tax, depreciation and amortisation (EBITDA) plus lease
rental costs to exceed total fixed charges (net interest
expense and lease rental costs) at the end of each half
during the financial year. Similarly, EBITDA must be no
less than a specified proportion of total net debt at the
end of each six-month interim period. The calculations
of these covenants are specified in the bank facility
agreement of 25 October 2019 as amended and restated
on 12 May 2023. The Group obtained a reduction of the
fixed cover covenant for the January 2024, July 2024,
January 2025 and July 2025 measurement points. The
Group has complied with its revised banking covenants at
all measurement points during the period.
The current interest rate, prior to hedging, on the term
loans is 5.54% (2023: 5.31% - 6.65%).
KMD Brands Annual Integrated Report 20249091
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
-1%+1%
Carrying
amount
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
As at 31 July 2024
Financial assets
Cash and cash equivalents33,948(24 4)-244-
Financial liabilities
Interest bearing liabilities93,600674-(674)-
Net increase / (decrease)430-(430)-
-1%+1%
Carrying
amount
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
As at 31 July 2023
Financial assets
Cash and cash equivalents49,488(356)-356-
Financial liabilities
Interest bearing liabilities105,209758-(758)-
Net increase / (decrease)402-(402)-
4.1.3 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
RiskExposure arising fromMonitoringManagement
Liquidity riskTrade and other payablesCash flow forecastingActive working capital management
Interest bearing liabilitiesFlexibility in funding arrangements
The Group has borrowing facilities of $318,026,000 (2023: $311,605,000) and operates well within this facility. This
includes short term bank overdraft requirements, and at balance sheet date no bank accounts were in overdraft.
Of this total facility $26,002,000 is available for instruments including letters of credit and bank guarantees.
Reconciliation of movement in borrowings
2024
NZ$’000
2023
NZ$’000
Opening balance105,209110,881
Net cash flow movement(14,661)(1,119)
Capitalised borrowing costs712(1,419)
Foreign exchange movement2,340(3,134)
Closing balance93,600105,209
Borrowings maturity analysis
2024
NZ$’000
2023
NZ$’000
Principal of
interest-bearing liabilities:
Payable within 1 year--
Payable 1 to 2 years--
Payable 2 to 3 years93,600-
Payable 3 to 4 years-105,209
93,600105,209
4.1.1 Finance costs
2024
NZ$’000
2023
NZ$’000
Interest income(1,322)(886)
Interest expense on interest
bearing liabilities
10,3737, 8 2 8
Interest on lease liabilities12,21711,022
Other finance costs3,71 13,692
Net exchange loss / (gain) on
foreign currency
6652,398
25,64424,054
Other finance costs relate to facility fees on banking
arrangements and debt underwriting costs.
4.1.2 Cash flow and fair value interest rate risk
Interest rate risk is the risk that fluctuations in interest
rates impact the Group’s financial performance.
RiskExposure arising
from
MonitoringManagement
Interest
rate risk
Interest bearing
liabilities at
floating interest
rates
Cash flow
forecasting
Sensitivity
analysis
Interest rate
swaps
Refer to note 4.2 for notional principal amounts and
valuations of interest rate swaps outstanding at balance
sheet date. A sensitivity analysis of interest rate risk on
the Group’s financial assets and liabilities is provided in
the table below.
At the reporting date the interest rate profile of the
Group's banking facilities was (carrying amount):
2024
NZ$’000
2023
NZ$’000
Total secured borrowings93,600105,209
Less principal covered by
interest rate swaps
--
Net principal subject to
floating interest rates
93,600105,209
Interest rate swaps have the economic effect of
converting borrowings from floating to fixed rates. The
cash flow hedge loss on interest rate swaps at balance
sheet date was nil (2023: nil).
Interest rate sensitivity analysis
The following table summarises the sensitivity of the
Group’s financial assets and financial liabilities to interest
rate risk.
A sensitivity of 1% (2023: 1%) has been selected for
interest rate risk. The 1% is based on reasonably possible
changes over a financial year, using the observed range
of historical data for the preceding five-year period.
Amounts are shown net of income tax. All variables other
than applicable interest rates are held constant. The
impact on equity is presented exclusive of the impact on
retained earnings.
KMD Brands Annual Integrated Report 20249293
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
4.2 DERIVATIVE FINANCIAL INSTRUMENTS
KEEPING IT SIMPLE...
A derivative is a type of financial instrument typically used to manage risk. A derivative’s value
changes over time in response to underlying variables such as exchange rates or interest rates and is entered
into for a fixed period. A hedge is where a derivative is used to manage an underlying exposure.
The Group is exposed to changes in interest rates on its borrowings and to changes in foreign exchange rates on
its foreign currency (largely USD) purchases. The Group uses derivatives to hedge these underlying exposures.
Derivative financial instruments are initially included in the balance sheet at their fair value, either as assets or
liabilities, and are subsequently remeasured at fair value at each reporting date.
An interest rate swap is an instrument to exchange a fixed rate of interest for a floating rate, or vice versa, or
one type of floating rate for another.
Accounting policies
Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and are
subsequently remeasured to their fair value. The method
of recognising the resulting gain or loss depends on
whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged.
The Group designates certain derivatives as hedges of
highly probable forecast transactions (cash flow hedges).
At inception of the hedging relationship, the Group
documents the economic relationship between hedging
instruments and hedged items, including whether
changes in the cash flows of the hedging instruments
are expected to offset changes in the cash flows of
the hedged items. The Group also documents its risk
management objectives and strategy for undertaking its
hedge transactions.
Cash flow hedge
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedges is recognised in equity in the hedging reserve.
The gain or loss relating to the ineffective portion is
recognised immediately in the consolidated statement of
comprehensive income.
Amounts accumulated in equity are recycled in the
consolidated statement of comprehensive income in the
periods when the hedged item will affect profit or loss.
However, when the forecast transaction that is hedged
results in the recognition of a non-financial asset (for
example, inventory) or a non-financial liability, the gains
and losses previously deferred in equity are transferred
from equity and included in the measurement of the initial
cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or
terminated, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in
the consolidated statement of comprehensive income.
When a forecast transaction is no longer expected to
occur, the cumulative gain or loss that was reported in
equity is immediately transferred to the consolidated
statement of comprehensive income.
Foreign currency transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognised in the consolidated statement
of comprehensive income, except when deferred in
other comprehensive income. Translation differences on
monetary financial assets and liabilities are reported as
part of the foreign exchange gain or loss.
KEEPING IT SIMPLE...
The table below analyses the Group’s financial liabilities and net-settled derivative financial liabilities into
relevant maturity groupings based on the remaining period at the balance sheet date to the contractual
maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows, so will not
always reconcile with the amounts disclosed on the balance sheet.
Less than
1 year
NZ$’000
Between
1 - 2 years
NZ$’000
Between
2 - 5 years
NZ$’000
Over 5 years
NZ$’000
As at 31 July 2023
Trade payables and accrued expenses1 3 3,7 9 41,136--
Interest bearing liabilities5,73 55,751112,563-
139,5296,887112,563-
As at 31 July 2024
Trade payables and accrued expenses119,308---
Interest bearing liabilities5,2375,23795,121-
124,5455,23795,121-
The Group enters into forward exchange contracts to manage the risks associated with the purchase of foreign currency
denominated products.
The table below analyses the Group’s derivative financial instruments that will be settled on a gross basis into relevant
maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows. They are expected to occur and affect the
profit or loss at various dates between balance sheet dates and the following five years.
Less than
1 year
NZ$’000
Between
1 - 2 years
NZ$’000
Between
2 - 5 years
NZ$’000
Over 5 years
NZ$’000
As at 31 July 2023
Forward foreign exchange contracts
Inflow178,278)---
Outflow(176,878)---
Net inflow / (outflow)1,400)---
As at 31 July 2024
Forward foreign exchange contracts
Inflow2 0 7, 4 9 2)---
Outflow(203,994)---
Net inflow / (outflow)3,498)---
KMD Brands Annual Integrated Report 20249495
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
-10%+10%
Carrying
amount
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
As at 31 July 2024
Financial assets
Cash and cash equivalents33,9481,934-(1,582)-
Trade and other receivables71,4915,528-(4,523)-
Foreign exchange contracts
– cash flow hedge
3,638-(19,812)-16,209
Financial liabilities
Trade and other payables(173,697 )(12,446)-10,183-
Interest bearing liabilities(93,600)( 7, 4 8 8 )-6,127-
Foreign exchange contracts
– cash flow hedge
(140)-(2,699)-2,208
Net increase / (decrease)(1 2,472)(22,511)10,20518,417
-10%+10%
Carrying
amount
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
Profit
NZ$’000
Equity
NZ$’000
As at 31 July 2023
Financial assets
Cash and cash equivalents49,4882,625-(2,147 )-
Trade and other receivables85,2346,560-(5,367)-
Foreign exchange contracts
– cash flow hedge
2,560-(12,251)-10,023
Financial liabilities
Trade and other payables(189,380)(13,188)-10,7 9 0-
Interest bearing liabilities(105,209)(8,417 )-6,886-
Foreign exchange contracts
– cash flow hedge
(1,160)(6,626)-5,422
Net increase / (decrease)(12,420)(18,877)10,16215,445
Derivative financial instruments
2024
NZ$’000
2023
NZ$’000
Foreign exchange contracts
Current asset3,6382,560
Current liability(140)(1,160)
Net foreign exchange
contracts - cash flow hedge
(asset / (liability))
3,4981,400
Interest rate swaps
Current liability--
Non-current liability--
Net interest rate swaps - cash
flow hedge (asset / (liability))
--
Total derivative financial
instruments
3,4981,400
The above table shows the Group’s financial derivative
holdings at year end.
Interest rate swaps - cash flow hedge
Interest rate swaps are to exchange a floating rate of
interest for a fixed rate of interest. The objective of the
transaction is to hedge the core floating rate borrowings
of the business to minimise the impact of interest rate
volatility within acceptable levels of risk thereby limiting
the volatility on the Group's financial results. The notional
amount of interest rate swaps at balance sheet date was
nil (2023: nil). The fixed interest rate is nil (2023: nil). Refer
to note 4.1.3 for timing of contractual cash flows relating
to interest rate swaps.
Foreign exchange contracts - cash flow hedge
The objective of these contracts is to hedge highly
probable anticipated foreign currency purchases against
currency fluctuations. These contracts are timed to
mature when import purchases are scheduled for
payment. The notional amount of foreign exchange
contracts amounts to US$112,850,000 / NZ$185,976,000
(2023: US$109,254,000 / NZ$173,717,000).
No material hedge ineffectiveness for interest rate swaps
or foreign exchange contracts exists as at balance sheet
date (2023: nil).
Refer to note 4.2.1 for a sensitivity analysis of foreign
exchange risk associated with derivative financial
instruments.
4.2.1 Foreign exchange risk
Foreign exchange risk is the risk that fluctuations
in exchange rates will impact the Group’s financial
performance. The Group operates internationally and is
exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the AUD,
USD and EUR.
RiskExposure
arising from
MonitoringManagement
Foreign
exchange risk
Foreign
currency
purchases
(over 90% of
purchases in
USD)
Forecast
purchases
Reviewing
exchange rate
movements
USD foreign
exchange
derivatives
The Group is exposed to currency risk on any cash
remitted between entities in different jurisdictions. The
Group does not hedge for such remittances. Interest
on borrowings is typically denominated in either New
Zealand, Australian or US dollars and is paid for out of
surplus operating cashflows generated in New Zealand,
Australia and the US.
Foreign currency sensitivity analysis
The following table summarises the sensitivity of the
Group’s financial assets and financial liabilities to foreign
exchange risk.
A sensitivity of -10% / +10% (2023: -10% / +10%) for
foreign exchange risk has been selected. While it is
unlikely that an equal movement of the New Zealand
dollar would be observed against all currencies, an
overall sensitivity of -10% / +10% (2023: -10% / +10%) is
reasonable given the exchange rate volatility observed
on a historic basis for the preceding five-year period and
market expectation for potential future movements.
Amounts are shown net of income tax. All variables other
than applicable exchange rates are held constant. The
impact on equity is presented exclusive of the impact on
retained earnings.
KMD Brands Annual Integrated Report 20249697
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
2024
NZ$’000
2023
NZ$’000
Cash flow hedging reserve
Opening balance2746,218
Realised (gains) / losses transferred to hedged asset(6,821)(14,443)
Revaluation movement8,8156,018
Deferred taxation movement2.3(584)2,481
Closing balance1,684274
Foreign currency translation reserve
Opening balance9,6916,491
Currency translation differences – gross13,3283,200
Currency translation differences – taxation2.3--
Closing balance23,0199,691
Share-based payments reserve
Opening balance1,2863,165
Change during the year291568
Deferred taxation movement2.3(265)252
Transfer to share capital on vesting of shares to employees(30 4)(2,699)
Share options / performance rights lapsed(184)-
Closing balance8241,286
Other reserves
Opening balance(47 )(47 )
Current year expense recognised in other comprehensive income--
Deferred taxation movement2.3--
Closing balance(47 )(47 )
Total reserves25,48011,204
4.3.3 Dividends
2024
NZ$’000
2023
NZ$’000
Prior year final dividend paid21,34021,340
Current year interim
dividend paid
-21,341
Dividends paid21,34042,681
Dividends paid represent NZ$0.03 per share
(2023: NZ $0.06).
4.3.4 Capital risk management
The Group’s capital includes contributed equity, reserves
and retained earnings.
The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
To maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell
assets to reduce debt or draw down more debt.
4.3 EQUITY
KEEPING IT SIMPLE...
This section explains material movements recorded in shareholders’ equity that are not explained
elsewhere in the financial statements. The movements in equity and the balance at 31 July 2024 are
presented in the consolidated statement of changes in equity.
Accounting policies
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown
in equity as a deduction, net of tax, from the proceeds.
Dividends
Dividends are recognised through equity following
the approval by the Company’s Directors.
4.3.1 Contributed equity - ordinary shares
2024
NZ$’000
2023
NZ$’000
Ordinary shares fully paid629,383629,079
Opening balance629,079626,380
Shares issued under
Executive and Senior
Management Long-Term
Incentive Plan
3042,699
Shares issued under
share entitlement offers
and share placement
--
Closing balance629,383629,079
Number of issued shares
2024
’000
2023
’000
Opening balance711,3 47709,001
Shares issued under Executive
and Senior Management Long
Term Incentive Plan
3202,346
Shares issued under share
entitlement offers and share
placement
--
Closing balance711,667711,3 47
As at 31 July 2024 there were 711,667,484 (2023:
711,347,722) ordinary issued shares in KMD Brands
Limited and these are classified as equity.
319,762 shares (2023: 2,346,338) were issued under the
‘Executive and Senior Management Long Term Incentive
Plan 24 November 2010’ during the year.
All ordinary shares carry equal rights in respect of voting
and the receipt of dividends. Ordinary shares do not have
a par value.
Refer to note 6.3 for employee share-based remuneration
plans.
4.3.2 Reserves and retained earnings
Cash flow hedging reserve
The hedging reserve is used to record gains or losses
on a hedging instrument in a cash flow hedge that are
recognised directly in other comprehensive income,
as described in the accounting policy in note 4.2. The
amounts are recognised in profit or loss when the
associated hedged transaction affects profit or loss.
Foreign currency translation reserve
The foreign currency translation reserve is used to
record foreign currency translation differences arising
on the translation of the Group entities results and
financial position. The amounts are accumulated in other
comprehensive income and recognised in profit or loss
when the foreign operation is partially disposed of or sold.
Share-based payments reserve
The share-based payments reserve is used to recognise
the fair value of share options and performance rights
granted but not exercised or lapsed. Amounts are
transferred to share capital when vested options are
exercised by the employee or performance rights
are vested.
KMD Brands Annual Integrated Report 20249899
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
5.2 DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations (wholly owned
Companies) Instrument 2016/785, the Australian-
incorporated wholly owned subsidiaries listed in note 5.1
as parties to the Deed of Cross Guarantee are relieved
from the Corporations Act 2001 requirements for
preparation, audit and lodgement of financial reports and
directors’ reports in Australia.
It is a condition of the ASIC Corporations Instrument that
the Company and each of the subsidiaries listed enter a
Deed of Cross Guarantee. The effect of the Deed is that
each party guarantees to each creditor of each other
party payment in full of any debt in the event of winding
up of the other party under certain provisions of the
Corporations Act 2001. If a winding up occurs under other
provisions of the Act, the guarantee will only apply if after
six months after a resolution or order winding up any
creditor has not been paid in full.
A consolidated statement of comprehensive income
and balance sheet are prepared for the Company and
controlled entities that are parties to the Deed of Cross
Guarantee, which eliminate all transactions between
parties to the Deed of Cross Guarantee. These financial
statements are included as a separate disclosure within
the Consolidated Financial Statements in order to meet
the Group’s Australian statutory reporting obligations.
Consolidated Statement of Comprehensive Income and Retained Earnings for the year ended 31 July 2024
2024
NZ$’000
2023
NZ$’000
Sales51 2,71 35 78,7 9 4
Expenses(494,776)( 5 3 4,747 )
Finance costs – net( 17, 2 2 8 )(25,281)
Profit before income tax70918,766
Income tax expense(1,950)(6,429)
(Loss)/Profit after income tax(1,241)12,337
Other comprehensive income6,9042
Total comprehensive income for the year5,66312,339
Opening retained earnings(86,911)(56,567)
(Loss)/Profit for the year after income tax(1,241)12,337
Dividends paid(21,340)(42,6 81)
Share options / performance rights lapsed184-
Closing retained earnings(109,308)(86,911)
Section 5: Group Structure
KEEPING IT SIMPLE...
This section provides information about the entities that make up the KMD Brands Limited Group
and how they affect the financial performance and position of the Group.
5.1 SUBSIDIARY COMPANIES
Subsidiaries are all entities over which the Group has control. Control is achieved when the Group:
• has power over the entity;
• is exposed to, or has rights to, variable returns from its involvement with the entity; and
• can use its power to affect returns.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary. All subsidiaries in the Group have a balance date of 31 July.
The following entities comprise the significant trading and holding companies of the Group:
Companies
Parties to Deed of
Cross Guarantee
Country of
incorporation
Parent % holding
20242023
Parent entity:
KMD Brands Limited√New Zealand
Subsidiaries:
Kathmandu Group Limited√New Zealand100%100%
KMD Brands Investments Limited√New Zealand100%100%
KMD Brands Finance (NZ) LimitedNew Zealand100%100%
KMD Brands Finance (AU) Pty Limited√Australia100%100%
KMD Brands Managed Services (NZ) Limited√New Zealand100%100%
KMD Brands Managed Services (AU) Pty Ltd√Australia100%100%
Kathmandu LimitedNew Zealand100%100%
Kathmandu Pty Ltd√Australia100%100%
Kathmandu (U.K.) LimitedUnited Kingdom100%100%
Kathmandu US Holdings LLCUnited States of America100%100%
Oboz Footwear LLCUnited States of America100%100%
Barrel Wave Holdings Pty Ltd√Australia100%100%
Rip Curl Group Pty Ltd√Australia100%100%
Rip Curl International Pty Ltd√Australia100%100%
PT JarositeIndonesia100%100%
Rip Curl Pty Ltd√Australia100%100%
Onsmooth Thai Co LtdThailand100%100%
Rip Curl (Thailand) LtdThailand50%50%
Ozmosis Pty LtdAustralia100%100%
Rip Curl Japan Co., LtdJapan100%100%
Curl Retail No 1. Pty LtdAustralia100%100%
RC Surf NZ LimitedNew Zealand100%100%
Rip Curl Finance Pty Ltd√Australia100%100%
Rip Curl Europe S.A.SFrance100%100%
Rip Curl Spain S.A.USpain100%100%
Rip Curl Suisse S.A.R.LSwitzerland100%100%
Rip Surf – Artigos De Desporto, Unipessoal, LDAPortugal100%100%
Rip Curl UK LtdUnited Kingdom100%100%
KMD Brands Germany GmbHGermany100%100%
Rip Curl Nordic ABSweden100%100%
KMD Brands Italy SRLItaly100%100%
Rip Curl IncUnited States of America100%100%
Rip Curl Canada IncCanada100%100%
Rip Curl Brazil LTDABrazil100%100%
KMD Brands Annual Integrated Report 2024100101
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
Section 6: Other Notes
6.1 RELATED PARTIES
All transactions with related parties were in the normal
course of business and provided on commercial terms.
No amounts owed to related parties have been written
off or forgiven during the period.
Key management personnel compensation
2024
NZ$’000
2023
NZ$’000
Salaries6,5345,442
Other short-term employee
benefits
120120
Post-employment benefits163344
Termination benefits--
Share-based payments
expense
152568
6,9696,474
6.2 FAIR VALUES
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 estimated
based on current market rates available to the Group for
debt of similar maturity. The fair value of term liabilities
equates to their current carrying value.
Foreign exchange contracts and interest rate swaps
The fair value of these instruments is determined using
valuation techniques (as they are not traded in an active
market). These valuation techniques maximise the use of
observable market data where it is available and rely as
little as possible on entity specific estimates.
Specific valuation techniques used to value financial
instruments include the fair value of interest rate
swaps. These are calculated at the present value of the
estimated future cash flows, based on observable yield
curves and the fair value of forward foreign exchange
contracts, as determined using forward exchange rates
at the balance sheet date, with the resulting value
discounted back to present value.
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.
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 are approximately nil. All guarantees are
payable on demand.
6.3 EMPLOYEE SHARE-BASED
REMUNERATION
Accounting policy
Equity settled long term incentive plan
The Executive and Senior Management Long Term
Incentive plan grants Group employee’s performance
rights subject to performance hurdles being met. The
fair value of rights granted is recognised as an employee
expense in the consolidated statement of comprehensive
income with a corresponding increase in the employee
share-based payments reserve. The fair value is
measured at grant date and amortised over the vesting
periods. The fair value of the rights granted is measured
using the KMD Brands Limited share price as at the grant
date less the present value of the dividends forecast to
be paid prior to each vesting date. At each balance sheet
date, the Company revises its estimates of the number
of shares expected to be distributed. It recognises the
impact of the revision of original estimates, if any, in the
consolidated statement of comprehensive income, and a
corresponding adjustment to equity over the remaining
vesting period.
Executive and Senior Management Long Term
Incentive Plan
On 20 November 2013, shareholders approved at the
Annual General Meeting the continuation of an Employee
Long Term Incentive Plan (LTI) (previously established 24
November 2010) to grant performance rights to Executive
Directors, Senior Managers and Other Key Management
Personnel.
Consolidated Balance Sheet as at 31 July 2024
Note 5.2 Deed of Cross Guarantee continued
2024
NZ$’000
2023
NZ$’000
ASSETS
Current assets
Cash and cash equivalents5,3347,6 1 8
Trade and other receivables24,10434,945
Inventories111,640111,095
Derivative financial instruments2,4562,084
Current tax asset4,8437, 9 47
Other current assets113752
Total current assets148,490164,441
Non-current assets
Trade and other receivables156,252104,918
Investments353,435351,251
Property, plant and equipment46,62745,691
Intangible assets478,0 92475,9 03
Right-of-use assets153,244152,099
Total non-current assets1 , 1 8 7,6 5 01,129,862
Total assets1,336,1401,294,303
LIABILITIES
Current liabilities
Trade and other payables75,61488,967
Derivative financial instruments57518
Current lease liabilities56,44356,171
Total current liabilities132,114145,656
Non-current liabilities
Non-current trade and other payables7, 9 9 88,619
Interest bearing liabilities94,014101,049
Loans with related parties390,93930 8,174
Deferred tax72,39273,011
Non-current lease liabilities115,593116,258
Total non-current liabilities680,936607,111
Total liabilities813,050752,767
Net assets523,090541,536
EQUITY
Contributed equity – ordinary shares629,383629,079
Reserves3,015(632)
Retained earnings(109,308)(86,911)
Total equity523,090541,536
KMD Brands Annual Integrated Report 2024102103
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
The fair values of the EPS rights have been assessed as the KMD Brands Limited share price as at the grant date less
the present value of the dividends forecast to be paid prior to each vesting date. The estimated fair value for each
tranche of options issued is amortised over the vesting period from the grant date.
Vesting of Long Term Incentive performance rights also require remaining in employment with the Company during the
performance period.
Short Term Performance Rights
Transitional performance rights granted to Senior Managers are all Short Term Incentives under the shareholder
approved Employee Long Term Incentive Plan, and are summarised below:
Opening balanceGranted during
the year
Vested during
the year
Lapsed during
the year
Closing balance
Grant date
20 Dec 2023-1,539,998-(4 6 6,241)1,073,757
20 Dec 20222,899,082--(2,899,082)-
2,899,0821,539,998-(3,365,323)1,073,757
Short Term Incentive performance rights vest:
• upon the Company achieving non-market performance
hurdles; and
• the employee remaining in employment with the
Company until the vesting date.
The performance period and vesting dates are
summarised below:
20242023
Grant date20 Dec 202320 Dec 2022
Performance period
(year ending)
31 July 202431 July 2023
Vesting date31 July 202531 July 2024
The fair values of the rights were assessed as the KMD
Brands Limited share price at the grant date less the
present value of the dividends forecast to be paid prior to
the vesting date.
The non-market performance hurdles set for the year
ending 31 July 2024 were not met and accordingly no
expense (2023: nil) was recognised in the consolidated
statement of comprehensive income in respect of Short
Term Incentive performance rights granted 20 December
2023 and 20 December 2022.
Expenses arising from equity settled share-based
payments transactions
2024
NZ$’000
2023
NZ$’000
Long term performance rights291616
Short term performance rights-(4 8)
291568
6.4 CONTINGENT LIABILITIES
The Group is subject to litigation incidental to its
business, none of which is expected to be material.
No material provision has been made in the Group’s
consolidated 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 financial position, results of operations
or cash flows. There are $513,000 of contingent
liabilities as at 31 July 2024 (2023: $677,000).
6.5 CONTINGENT ASSETS
There are no contingent assets as at 31 July 2024
(2023: nil).
6.6 EVENTS OCCURRING AFTER BALANCE
S H E E T DAT E
There are no other events after balance date which
materially affect the information within the financial
statements.
Long Term Performance Rights
Performance rights granted to Executive Directors and Senior Managers are summarised below:
Opening
balance
Granted during
the year
Vested during
the year
Lapsed during
the year
Closing
balance
Grant date
20 Dec 2023-9,882,905-(1,241,622)8,641,283
20 Dec 20223,70 4,76 7--( 70 4,7 7 9)2,999,988
20 Dec 20211,314,284--(116,699)1 , 1 9 7, 5 8 5
22 Dec 2020826,533-(31 9,76 2)( 5 0 6,7 71 )-
5,845,5849,882,905(31 9,76 2)(2,569,871)12,838,856
Long Term Incentive performance rights vest in equal
tranches. In each tranche the rights are subject to a
combination of a relative Total Shareholder Return
(TSR) hurdle and / or an EPS growth hurdle. The relative
weighting and number of tranches for each grant date are
shown in the table below:
Grant dateTrancheEPS
weighting
TSR
weighting
20 Dec 2023Tranche 150%50%
20 Dec 2022Tranche 150%50%
20 Dec 2021Tranche 150%50%
22 Dec 2020Tranche 150%50%
The proportion of rights subject to the relative TSR
hurdle is dependent on KMD Brands Limited’s TSR
performance relative to a defined comparable group of
companies in New Zealand and Australia listed on either
the ASX or NZX. The percentage of TSR related rights
vest according to the following performance criteria:
KMD Brands Limited
relative TSR ranking% vesting
Below 50th percentile0%
50th percentile50%
51st – 74th percentile50% + 2% for each percentile above
the 50th
75th percentile or above100%
The TSR performance is calculated for
the following performance periods:
Tranche20242023
Tranche 136 months to 1
December 2026
36 months to 1
December 2025
The fair value of the TSR rights have been valued under
a Monte Carlo simulation approach predicting KMD
Brands Limited’s TSR relative to the comparable group
of companies at the respective vesting dates for each
tranche. The fair value of TSR rights, along with the
assumptions used to simulate the future share prices
using a random-walk process are shown below:
20242023
Fair value of TSR rights$0.18$ 0.72
Current price at grant date$ 0.73$1.06
Risk free interest rate4.38%4.26%
Expected life (years)33
Expected share volatility25.8%70.0%
Tranche20242023
Tranche 1FY26 EPS relative
to FY23 EPS
FY25 EPS relative
to FY22 EPS
The estimated fair value for each tranche of rights issued
is amortised over the vesting period from the grant date.
The proportion of rights subject to the EPS growth
hurdle is dependent on the compound average annual
growth in KMD Brands Limited’s EPS relative to the year
ending 31 July 2023 (2023: 31 July 2022). The applicable
performance periods are:
The percentage of the December 2023 EPS growth
related rights scales according to the compound average
annual EPS growth over three years. Each year’s target is
set annually, and an average is taken over the three years
to determine overall achievement.
KMD Brands Annual Integrated Report 2024104105
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
New Accounting
Standard
Effective Date
Applicable to the Group
Summary of Changes
NZ IFRS 18 Presentation
and Disclosure in
Financial Statements
1 August 2027NZ IFRS 18 Presentation and Disclosure in Financial
Statements will supersede NZ IAS 1 Presentation
of Financial Statements and is intended to
improve comparability and transparency in
the presentation of financial statements.
NZ IFRS 18 introduces three key new requirements
(among others):
• A change in the structure of the statement of profit or
loss – requires the presentation of profit and loss items
by operating, investing and financing activities and
specified subtotals including operating profit or loss
• Management defined performance measures (MPMs)
to be included in a note in the financial statements
• Enhanced aggregation/ disaggregation clarification
The new standard also amends the classification
in the statement of cash flows.
The Group’s assessment of the impact remains ongoing.
There are no other standards or amendments published but not yet effective that are expected to have a significant
impact on the Group.
6.7 SUPPLEMENTARY INFORMATION
Directors’ fees
2024
NZ$’000
2023
NZ$’000
Directors’ fees1,0771,084
Directors’ fees for the Company were paid to
the following:
• David Kirk (Chairman)
• Abby Foote
• Andrea Martens
• Brent Scrimshaw
• Philip Bowman
• Zion Armstrong
Audit fees
During the year, the following fees were paid or payable
for services provided by the auditor of the Company,
its related practices and other network audit firms:
2024
NZ$’000
2023
NZ$’000
Audit services – Group auditor
Group audit - KPMG New Zealand538513
Group audit - KPMG Australia--
France statutory audit - KPMG
France
6958
Thailand statutory audit - KPMG
Thailand
3938
UK statutory audit - KPMG
New Zealand
--
646609
Audit services - other audit firms117114
Total fees for audit services763723
Non-audit services – Group auditor
Taxation services - KPMG US223332
Employee Retention Credits
application - KPMG US
-87
Revenue certificates - KPMG
New Zealand
11
Banking compliance certificates -
KPMG New Zealand
65
230425
6.8 NEW ACCOUNTING STANDARDS
AND INTERPRETATIONS
New standards and interpretations first applied
in the period
There are no new or amended accounting standards or
interpretations first applied in the period that have had a
material impact on the Group.
Standards, interpretations and amendments to
published standards that are not yet effective
Classification of Liabilities as Current or Non-current
(Amendments to NZ IAS 1) and Non-current Liabilities
with Covenants (Amendments to IAS 1) were early
adopted in the previous period. No other new and
amended accounting standards and interpretations
issued but not yet effective have been early adopted.
KMD Brands Annual Integrated Report 2024106107
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
KMD Brands Annual Integrated Report 2024108109
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
© 2024 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.
Document classification: KPMG Public
Independent Auditor’s Report
To the shareholders of KMD Brands Limited (Group)
Report on the audit of the consolidated financial statements
Opinion
We have audited the accompanying consolidated
financial statements which comprise:
the consolidated balance sheet as at 31 July
2024;
the consolidated statements of comprehensive
income, changes in equity and cash flows for the
year then ended; and
notes, including material accounting policy
information and other explanatory information.
In our opinion, the accompanying consolidated
financial statements of KMD Brands Limited (the
Company) and its subsidiaries (the Group) on pages
61 to 107 present fairly in all material respects:
the Group’s financial position as at 31 July
2024 and its financial performance and cash
flows for the year ended on that date; and
In accordance with New Zealand
Equivalents to International Financial
Reporting Standards (NZ IFRS) issued by
the New Zealand Accounting Standards
Board and the International Financial
Reporting Standards issued by the
International Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of KMD Brands Limited in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (Including International Independence Standards) (New
Zealand) issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Our firm has provided other services to the Group in relation to tax compliance services and reasonable
assurance engagement in relation to bank covenant compliance. 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 auditor of the
Group. The firm has no other relationship with, or interest in, the Group.
2
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and on the consolidated financial statements as a whole. The materiality for the consolidated financial statements
as a whole was set at $3.6 million determined with reference to a benchmark of the Group’s EBITDA. We chose
the benchmark because, in our view, this is a key measure of the Group’s performance.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements in the current period. We summarise below those matters and our key audit
procedures to address those matters in order that the shareholders as a body may better understand the process
by which we arrived at our audit opinion.
Our procedures were undertaken in the context of and solely for the purpose of our audit opinion on the
consolidated financial statements as a whole and we do not express discrete opinions on separate elements of
the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
Impairment assessment of indefinite life intangible assets - goodwill and brands
Refer to Note 3.3 to the financial
statements.
The group has goodwill and brand assets of
$252.1 million and $367.7 million respectively.
An impairment of $40.3 million was
recognised on the Oboz goodwill.
These assets are a result of the historical
acquisitions of the Kathmandu, Oboz and
Rip Curl businesses.
Impairment assessment of goodwill and
brand assets is considered to be a key audit
matter due to the significance of these
assets to the group’s financial position and
the level of management judgement
involved in the impairment assessment.
These judgements include:
— Determination of cash generating units
(CGUs), or group of CGUs, to consider for
testing;
— Forecast future performance for each
CGU, or group of CGUs; and
— Assessment of discount and terminal
growth rates.
Our audit procedures included:
Assessing the consistency of management’s approach against
the requirements of the accounting standards, including
assessment of the CGU level at which to test the intangible
assets;
Utilising our corporate finance specialists to challenge and
assess management’s assumptions, including terminal growth
rates and discount rates. This involved independently developing
a range for terminal growth and discount rates based on market
data to challenge the rates determined by the external expert;
Assessing the integrity and mechanical accuracy of the
impairment models;
Challenging the forecast cash flows in light of current market
conditions and past performance of the group; and
Considering the sensitivity of key assumptions to changes within
a reasonably possible range and associated financial statement
disclosures.
We did not identify any material misstatements in relation to the
impairment assessment of indefinite life intangible assets or
associated disclosures.
© 2024 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.
Document classification: KPMG Public
Independent Auditor’s Report
To the shareholders of KMD Brands Limited (Group)
Report on the audit of the consolidated financial statements
Opinion
We have audited the accompanying consolidated
financial statements which comprise:
the consolidated balance sheet as at 31 July
2024;
the consolidated statements of comprehensive
income, changes in equity and cash flows for the
year then ended; and
notes, including material accounting policy
information and other explanatory information.
In our opinion, the accompanying consolidated
financial statements of KMD Brands Limited (the
Company) and its subsidiaries (the Group) on pages
61 to 107 present fairly in all material respects:
the Group’s financial position as at 31 July
2024 and its financial performance and cash
flows for the year ended on that date; and
In accordance with New Zealand
Equivalents to International Financial
Reporting Standards (NZ IFRS) issued by
the New Zealand Accounting Standards
Board and the International Financial
Reporting Standards issued by the
International Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of KMD Brands Limited in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (Including International Independence Standards) (New
Zealand) issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Our firm has provided other services to the Group in relation to tax compliance services and reasonable
assurance engagement in relation to bank covenant compliance. 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 auditor of the
Group. The firm has no other relationship with, or interest in, the Group.
© 2024 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.
Document classification: KPMG Public
Independent Auditor’s Report
To the shareholders of KMD Brands Limited (Group)
Report on the audit of the consolidated financial statements
Opinion
We have audited the accompanying consolidated
financial statements which comprise:
the consolidated balance sheet as at 31 July
2024;
the consolidated statements of comprehensive
income, changes in equity and cash flows for the
year then ended; and
notes, including material accounting policy
information and other explanatory information.
In our opinion, the accompanying consolidated
financial statements of KMD Brands Limited (the
Company) and its subsidiaries (the Group) on pages
61 to 107 present fairly in all material respects:
the Group’s financial position as at 31 July
2024 and its financial performance and cash
flows for the year ended on that date; and
In accordance with New Zealand
Equivalents to International Financial
Reporting Standards (NZ IFRS) issued by
the New Zealand Accounting Standards
Board and the International Financial
Reporting Standards issued by the
International Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of KMD Brands Limited in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (Including International Independence Standards) (New
Zealand) issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Our firm has provided other services to the Group in relation to tax compliance services and reasonable
assurance engagement in relation to bank covenant compliance. 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 auditor of the
Group. The firm has no other relationship with, or interest in, the Group.
KMD Brands Annual Integrated Report 2024110111
1. OVERVIEW
2. CREATING VALUE
4. ADDITIONAL DISCLOSURES
3. FINANCIAL REPORT
4
Auditor’s responsibilities for the audit of the consolidated
financial statements
Our objective is:
— to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error; and
— to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but it is not a guarantee that an audit conducted in
accordance with ISAs NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the
consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located at the
External Reporting Board (XRB) website at:
https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor’s report is Peter Taylor.
For and on behalf of:
KPMG
Christchurch
25 September 2024
3
Other information
The directors, on behalf of the Group, are responsible for the other information. The other information comprises
information included in the Annual Integrated Report but does not include the financial statements and our
auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover any other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other
information and in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears materially
misstated.
If, based on the work we have performed, we conclude there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the shareholders. Our audit work has been undertaken so
that we might state to the shareholders those matters we are required to state to them in the independent
auditor’s report and for no other purpose. To the fullest extent permitted by law, none of KPMG, any entities
directly or indirectly controlled by KPMG, or any of their respective members or employees, accept or assume
any responsibility and deny all liability to anyone other than the shareholders for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of directors for the consolidated financial
statements
The directors, on behalf of the Group, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with NZ
IFRS issued by the New Zealand Accounting Standards Board and the International Financial Reporting
Standards issued by the International Accounting Standards Board;
— implementing the necessary internal control to enable the preparation of a consolidated set of financial
statements that is free from material misstatement, whether due to fraud or error; and
— assessing the ability of the Group 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.
4.
ADDITIONAL
DISCLOSURES
KMD Brands Annual Integrated Report 2024112113
1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
Statutory information
DISCLOSURE OF INTERESTS BY DIRECTORS
In accordance with section 140(2) of the Companies Act 1993, the Directors named below have made a general
disclosure of interest, by a general notice disclosed to the Board and entered in the Company’s interests register,
during the reporting period:
DAVID KIRK
NZ Rugby Players AssociationChairperson
Forsyth Barr Group Limited and Forsyth Barr LimitedChairperson / Director
Bailador Investment Management Pty LimitedManaging Partner
Bailador Technology Investments Limited (including investee companies)Chairperson
NZ Performance Horses LimitedDirector
Kiwi Harvest LimitedChairperson
Sydney Festival**Chairperson
New Zealand Food Network LimitedChairperson
New Zealand Food Rescue TrustDirector
ABIGAIL FOOTE
Freightways Group LimitedDirector
Sanford Limited**Director
Christchurch City Holdings Limited (including subsidiary companies)**Chairperson
ANDREA MARTENS
The Association for Data-driven Marketing and Advertising (ADMA) CEO
HYG Holdco Pty LimitedDirector
Kennards Hire Pty Limited*Director
BRENT SCRIMSHAW
Enero Group Limited CEO
Rhinomed Limited**Director
PHILIP BOWMAN
Sky Network Television Limited Chairperson
Majid Al Futtaim Properties LLCChairperson
Tegel Group Holdings LimitedChairperson
Ferrovial SEDirector
Better Capital PCC Limited**Director
Vinula Pty LtdDirector
Vinula Superfund Pty LtdDirector
Tom Tom Holdings IncDirector
Majid Al Futtaim Capital LLCDirector
Majid Al Futtaim Holding LLCDirector
ZION ARMSTRONG
Cosmostar LimitedDirector
Les Mills International** Strategic operating partner
Kavier Trust LimitedDirector
Kavier Capital LimitedDirector
Jamie Kay Group Holding Limited (including subsidiary companies)*Director and CEO
* Commenced appointment during the year ended 31 July 2024
** Ceased to hold office during the year ended 31 July 2024
DIRECTORS’ DETAILS, REMUNERATION AND OTHER BENEFITS
During the year ended 31 July 2024, the Directors and former directors of the Company received the following
remuneration and other benefits, which were approved by the Board:
DirectorTotal RemunerationOther benefitsRole
David KirkNZD $273,073NoneChairperson, Non-Executive Director
Abigail FooteNZD $181,282NoneNon-Executive Director, Chairperson
of Audit and Risk Committee
Andrea MartensNZD $180,062NoneNon-Executive Director, Chairperson of
People and Remuneration Committee
Brent ScrimshawNZD $147,697NoneNon-Executive Director
Philip BowmanNZD $147,697NoneNon-Executive Director
Zion ArmstrongNZD $147,697NoneNon-Executive Director
Michael DalyNZD $1,337,280$51,407Managing Director and Group
Chief Executive Officer
DONATIONS
During the year ended 31 July 2024, the Group has made total donations of NZD $576,249.42. The Group also invested in
partnership fees, product donations and volunteer hours during FY24. See page 46 of this report for further information.
EMPLOYEE REMUNERATION
During the year ended 31 July 2024, a number of employees or former employees, not being Directors of the Company,
received remuneration and other benefits that exceeded NZ$100,000 in value as follows:
Remuneration (NZD $)Number of Employees
$100,000-$110,000
51
$110,000-$120,000
41
$120,000-$130,000
42
$130,000-$140,000
35
$140,000-$150,000
22
$150,000-$160,000
23
$160,000-$170,000
24
$170,000-$180,000
19
$180,000-$190,000
14
$190,000-$200,000
17
$200,000-$210,000
10
$210,000-$220,000
6
$220,000-$230,000
10
$230,000-$240,000
8
$240,000-$250,000
7
$250,000-$260,000
5
$260,000-$270,000
2
$270,000-$280,000
5
$280,000-$290,000
5
Remuneration (NZD $)Number of Employees
$290,000-$300,000 2
$300,000-$310,000
5
$310,000-$320,000
1
$320,000-$330,000
3
$330,000-$340,000
2
$340,000-$350,000
1
$360,000-$370,000
3
$380,000-$390,000
3
$410,000-$420,000
1
$430,000-$440,000
3
$510,000-$520,000
2
$520,000-$530,000
1
$550,000-$560,000
1
$590,000-$600,000
2
$630,000-$640,000
1
$640,000-$650,000
1
$780,000-$790,000
1
$940,000-$950,000
1
1,380,000-1,390,000
1
KMD Brands Annual Integrated Report 2024114115
1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
SUBSIDIARY COMPANY DIRECTORS
Section 211(2) of the Companies Act 1993 requires the Company to disclose, in relation to its subsidiaries, the total
remuneration and value of other benefits received by Directors and former Directors.
No subsidiary has Directors who are not full-time employees of the Group.
The remuneration and other benefits of such employees (received as employees) totalling NZD$100,000 or more during
the year ended 31 July 2024, is included in the relevant bandings for remuneration disclosed on page 115.
No employee of the Group appointed as a Director of KMD Brands Limited, or its subsidiaries, receives or retains any
remuneration or other benefits in their capacity as a Director.
The persons who held office as Directors (or the legal equivalent in various jurisdictions) of subsidiary companies at 31
July 2024, and those who ceased to hold office during the year ended 31 July 2024, are as follows:
* Ceased to hold office during the period ending 31 July 2024
Company Director / office holder
KMD Brands
Investments Limited
KMD Brands Managed
Services (NZ) Limited
KMD Brands Finance
(NZ) Limited
RC Surf NZ Limited
Benjamin Washington,
Frances Blundell,
Chris Kinraid*
KMD Brands Managed
Services (AU) Pty Limited
KMD Brands Finance
(AU) Pty Limited
Chris Kinraid*, Lachlan Farran,
Benjamin Washington
Kathmandu Group Limited
Kathmandu Limited
Chris Kinraid*, Benjamin
Washington, Megan Welch
Kathmandu (U.K) LimitedChris Kinraid*, Benjamin
Washington, Mathieu Lefin
Kathmandu Pty Ltd
Chris Kinraid*, Lachlan Farran,
Michael Daly*, Megan Welch
Barrel Wave
Holdings Pty Ltd
Chris Kinraid*, Lachlan
Farran, Michael Daly
Kathmandu US
Holdings LLC
Chris Kinraid*, Michael Daly
Oboz Footwear LLCAmy Beck, Chris Kinraid*,
Michael Daly
Rip Curl, IncDiem Culley*, Michael Daly*,
Brooke Farris, Christa Prince
Rip Curl Canada IncDiem Culley*, Nick
Russell, Brooke Farris
Company Director / Office holder
Rip Curl International Pty Ltd
Rip Curl Proprietary Limited
Rip Curl Finance Pty Ltd
Rip Curl Group Pty Ltd
Michael Daly, Brooke
Farris, Lachlan Farran
Curl Retail No 1 Pty Ltd
Ozmosis Pty Ltd
Brooke Farris, Lachlan Farran
Rip Curl Brazil LTDACarla Trindade
Rip Curl Japan Co LtdMitsu Nishina
Onsmooth Thai Co LtdDuncan Stewart, Michael Daly
PT Jarosite
James Hendy, Lachlan
Farran, Michael Daly
Rip Curl Europe S.A.SMathieu Lefin and
Isabelle Espil
Rip Curl Spain SA Unipersonal
Rip Curl UK Ltd
Rip Surf Artigos De
Desporto Unipessoal LDA
KMD Brands Germany GmbH
KMD Brands Italy SRL
Mathieu Lefin
Rip Curl Suisse S.A.R.LMathieu Lefin and
Julien Haueter
Rip Curl Nordic ABMathieu Lefin, Alois Bersan,
and Isabelle Espil
50% subsidiary interests:
Rip Curl (Thailand) Co. LtdSermchai Putamadilok,
Patranist Putmadilok,
Brooke Farris
PRINCIPAL SHAREHOLDERS
The names and holdings of the 20 largest shareholders as at 20 August 2024 were:
NameOrdinary shares%
Citicorp Nominees Pty Limited84,167,21611.83
New Zealand Superannuation Fund Nominees Limited82,021,65811.53
HSBC Custody Nominees (Australia) Limited65,268,9689.17
Briscoe Group Limited48,007,4656.75
J P Morgan Nominees Australia Pty Limited44,918,4236.31
Accident Compensation Corporation40,897,0005.75
Bnp Paribas Nominees NZ Limited Bpss4030,938,7544.35
New Zealand Depository Nominee23,937,9093.36
HSBC Nominees (New Zealand) Limited21,197, 5672.98
Tea Custodians Limited16,260,0302.28
Bnp Paribas Nominees Pty Ltd13,349,2751.88
Citibank Nominees (Nz) Ltd11,752,1111.65
Pt Booster Investments Nominees Limited8,167,1361.15
FNZ Custodians Limited6,797,4 8 50.96
Forsyth Barr Custodians Limited6,551,3880.92
Citicorp Nominees Pty Limited5,363,9270.75
Custodial Services Limited4,480,8560.63
New Zealand Permanent Trustees Limited3,999,1000.56
HSBC Custody Nominees (Australia) Limited3,958,8510.56
Hailong Investments Pte Limited3,696,3390.52
DIRECTORS’ SHAREHOLDINGS
Directors held interests in the following ordinary shares of the Company at 31 July 2024:
Director/Senior managerNature of interestNumber held at
31 July 2023
AcquiredDisposedTotal held at
31 July 2024
David KirkBeneficial owner993,336306,664-1,300,000
Abigail FooteRegistered holder
and beneficial owner
130,000--130,000
Andrea MartensRegistered holder
and beneficial owner
-25,000-25,000
Brent ScrimshawBeneficial owner-54,545-54,545
Philip BowmanBeneficial owner1,000,000600,000-1,600,000
Michael DalyBeneficial owner473 , 3 863 47,099-820,485
Zion ArmstrongRegistered holder
and beneficial owner
-42,33042,330
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1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
Michael Daly held the following interests in convertible financial products in the Company as at 31 July 2024 due to his
participation in the Company’s LTI Plan in his capacity as Group Chief Executive Officer.
No other Directors held interests in convertible financial products of the Company as at 31 July 2024.
Performance share rights granted will, subject to satisfaction of performance conditions, vest on the basis of one
ordinary share for each performance share right which vests, on the vesting date for each grant.
Executive director – Michael Daly
Nature of interestNumber
granted
Grant
date
Vesting
period
Vesting
date
Total fair value of performance
Rights at grant date $AUD
Performance Share Rights1,565,97219 Dec 233 years30 Sep 26$1,127,500
Performance Share Rights876,94420 Dec 223 years1 Aug 25$789,250
Performance Share Rights503,46222 Dec 213 years1 Dec 24$719,950
NZX CLASS WAIVERS RELIED ON
During the year, the Company did not rely on any rulings or waivers granted by NZ RegCo.
DIRECTORS’ AND OFFICERS’ INSURANCE AND INDEMNITY
The Group has arranged, as provided for under the Company’s Constitution, policies of Directors’ and Officers’
Liability Insurance which, with a Deed of Indemnity entered into with all Directors, provides that generally Directors
will incur no monetary loss as a result of actions undertaken by them as Directors. Certain actions are specifically
excluded, for example, the incurring of penalties and fines which may be imposed in respect of breaches of the law.
DISTRIBUTION OF SHAREHOLDERS AND HOLDINGS AS AT 31 JULY 2024
Number of holders%Number of ordinary shares%
1 to 1,000276326.541,564,8870.22
1,001 to 5,000361434.729,415 ,1321.32
5,001 to 10,000144913.9211,299,3721.59
10,001 to 50,000194118.6544,420,4906.24
50,001 to 100,0003403.2725,237,9513.55
100,001 and over3022.9619,729,65287.08
To t a l10,409100%711 ,667, 484100%
SUBSTANTIAL PRODUCT HOLDERS
The substantial product holders of ordinary shares (being the only class of quoted voting products) of the Company and
their relevant interests as at 31 July 2024, were as follows:
Ordinary shares%
Allan Gray Group114,981,79416.16
New Zealand Superannuation Fund Nominees Limited9 0,4 41 , 82912.71
Yarra Capital Management Limited50,902,0127.16
Briscoe Group Limited48,007,4656.75
Accident Compensation Corporation39,897,0005.61
As at 31 July 2024, the Company had 711,667,484 ordinary shares on issue.
The details of the Company’s principal administrative and registered office in New Zealand is:
223 Tuam Street
Christchurch Central
PO Box 1234
Christchurch 8011
New Zealand
SHARE REGISTRY
In New Zealand: MUFG Corporate Markets (MUFG) (formerly Link Market Services)
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: MUFG Corporate Markets (MUFG) (formerly Link Market Services)
Physical Address: Level 1, 333 Collins Street
Melbourne, VIC 3000
Australia
Postal Address: Locked Bag A14
Sydney, South NSW 1235
Australia
Telephone: +61 2 8280 7111
Investor enquiries: +61 2 8280 7111
Facsimile: +61 2 9287 0303
Internet address: www.linkmarketservices.com.au
STOCK EXCHANGES
The Company’s ordinary shares are quoted on the NZX and the ASX.
INCORPORATION
The Company is incorporated in New Zealand.
Directory
GRI 2-1
KMD Brands Annual Integrated Report 2024118119
1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
‘Our partners’ include paid memberships and subscriptions,
technology platforms that support our ESG goals, major
community and charity partnerships.
B CORP
We are part of a global movement of certified B
Corporations® that use the power of business to build a
more inclusive and sustainable economy.
CARBON DISCLOSURE PROJECT
We submit an annual report to CDP, which is considered
the ‘gold standard’ of environmental reporting.
CASCALE
Formerly Sustainable Apparel Coalition, Cascale brings
together 300 members, including KMD Brands, with a
shared vision of an industry that gives back more than it
takes to the planet and its people.
OUR PARTNERS
ASKYOURTEAM
We use AskYourTeam’s real-time, transparent survey
system, Ethical Voice, to gather feedback and insights
from workers in our factories.
CONVERGE
This employee assistance program helps our people resolve
personal problems that may be negatively influencing their
day-to-day lives and workplace performance.
OPEN SUPPLY HUB
Open Supply Hub is powering the transition to safe and
sustainable supply chains with the world’s most complete,
open and accessible map of global production.
AUSTRALIAN PACKAGING
COVENANT ORGANISATION
We submit an annual report and action plan to APCO,
which supports our packaging and waste strategies.
MAINETTI
Mainetti helps us continually challenge and adjust
our supply chain process to support a more
sustainable future.
INTERNATIONAL ACCORD
KMD Brands is a signatory to the International Accord which
promotes workplace health and safety through independent
safety inspections, training programs, and a complaints
mechanism for factory workers located in Bangladesh.
OUR SUPPLY CHAIN
This end-to-end supply chain technology solution is used
to record, monitor and track progress of factory data
around compliance, traceability and ethical sourcing.
SOCIAL LABOR CONVERGENCE PROGRAM
We are a signatory to this multi-stakeholder initiative
that facilitates the sharing of comparable, verified data
about supply chain working conditions. This partnership
helps us to reduce factory audit duplication and redirect
resources to improvement actions.
SCIENCE BASED TARGETS INITIATIVE (SBTi)
We set targets with the Science Based Targets initiative
(SBTi) in 2023, which allowed us to set a clearly
defined path to reduce emissions in line with the
Paris Agreement goals.
TEXTILE EXCHANGE
Membership supports our materials strategy,
and we participate in the Preferred Fiber &
Benchmarking Program.
TOITŪ ENVIROCARE
An annual carbon audit with Toitū Envirocare helps us to
measure, manage and reduce our carbon footprint.
WORDLY
We use the Higg Index, hosted by Worldly, which is the
most widely used measure of environmental and social
impact globally for apparel, footwear and textiles.
FAIR LABOR ASSOCIATION
We are proud to be recognised as a Fair Labor Accredited
company. Fair Labor Accreditation verifies that our
company has systems in place to protect the workers
who manufacture our products, based on the Fair Labor
Association’s internationally recognised labor standards.
KMD Brands Annual Integrated Report 2024120121
1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
BEYOND BLUE
We collaborate with Beyond Blue to host challenge events
that get people outdoors and share the benefits of nature
to support good mental health.
GRAEME DINGLE FOUNDATION
Our partnership encourages young people in New
Zealand to get outdoors for their mental health, wellbeing
and personal growth.
PRIDE PLEDGE
We have made a public commitment to use our voice
to support visibility, safety, tolerance, love, diversity and
inclusion for all LGBTQ+ people.
RAINBOW TICK
Our Rainbow Tick accreditation demonstrates our
commitment to diversity and inclusion in our New
Zealand based workplaces.
U PPAR E L & I M PACTEX
We partner with Upparel and ImpacTex to help our
customers keep their gear in circulation for longer and
keep valuable textiles out of landfill.
52 HIKE CHALLENGE
Together with Osprey and Outdoor Research, we
launched a global movement that encourages people to
undertake one hike each week for a year.
GALLATIN VALLEY LAND TRUST
We support work to conserve open spaces and create
trail systems in the Gallatin Valley in Bozeman, Montana.
BLACK FOLKS CAMP TOO
BFCT’s mission is to increase diversity in the outdoors
and we collaborated on the O FIT Insole® ‘Unity Blaze’
that directs a portion of proceeds to BFCT’s Digital
Education Initiative.
THE CONSERVATION ALLIANCE
The Conservation Alliance harnesses the collective
power of business and outdoor communities to fund
and advocate for the protection of North America’s
wild places.
CONTINENTAL DIVIDE TRAIL COALITION
We adopted a four-mile section of the Continental Divide
National Scenic Trail in Montana in 2022.
TREES FOR THE FUTURE
Oboz has planted a tree for every pair of shoes sold since
2007 – more than six million trees - and through our
partnership with TREES we launched the Tabora Forest
Garden Project in Tanzania.
KMD Brands Annual Integrated Report 2024122123
1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
AIRSTEP AUSTRALIA
Our partnership with Airstep Australia repurposes
neoprene offcuts created in the Rip Curl wetsuit factory
into carpet underlay.
TERRACYCLE
TerraCycle’s partnership on our wetsuit take back
program has helped us to find innovative ways to reuse
and repurpose wetsuits for another life.
THE SURFRIDER FOUNDATION
Through our partnership with the Surfrider Foundation
we play our part to protect the world’s ocean, waves and
beaches for all people.
WORLD SURF LEAGUE
We proudly partner with WSL, the global home of
competitive surfing, and together champion ocean
protection, equality, our sport’s rich heritage, progression
and innovation.
SURFAID
We partner with SurfAid to support its mission to improve
the health, wellbeing and resilience of remote surfing
communities.
AUSTRALIAN INDUSTRY GROUP
Our membership with Ai Group gives us unlimited access
to workplace advice and updates to ensure we’re creating
the best workplaces for our people.
SEAMLESS
In 2023 Rip Curl joined Seamless as a one of six
foundation members to support the transformation of the
textile industry in Australia. Seamless aims to create a
circular clothing industry by 2030.
These partners support KMD Brands' preferred materials goals and our
focus on reducing our impact across our value chain.
BETTER COTTON
Our membership with Better Cotton means we support
farmers who care for the environment and respect the
rights and wellbeing of workers.
BLOOM
BLOOM transforms algae biomass into performance-
driven foam, which allows us to replace a percentage of
polymers in conventional midsoles and insoles with a
plant-based product.
Our product partners
BLUESIGN ®
This independent chemical auditor supports our
chemicals management program so that our products are
more environmentally and socially friendly.
SYSTEM
PARTNER
CANOPY
Canopy works collectively with some of the world’s largest
brands, including Kathmandu, to protect the world’s
remaining ancient and endangered forests.
ECONYL
ECONYL® is regenerated nylon made from discarded
fishing nets, fabric scraps and other waste and is
infinitely recyclable.
GLOBAL ORGANIC TEXTILE STANDARD
From harvesting raw materials to environmentally
and socially responsible manufacturing, to labelling,
GOTS certifies textiles to provide a credible assurance
to consumers.
ECOVERO
The responsible production process of LENZING™
ECOVERO™ fibres uses at least 50% less water and
emits at least 50% less carbon dioxide compared to
generic viscose fibres.
LEATHER WORKING GROUP
This partnership helps us to assess the environmental
compliance and performance capabilities of our tanneries
and to promote sustainable environmental business
practices within the leather industry.
KMD Brands Annual Integrated Report 2024124125
1. OVERVIEW
2. CREATING VALUE
3. FINANCIAL REPORT
4. ADDITIONAL DISCLOSURES
PRIMALOFT BIO
The first biodegradable synthetic insulation and fibre
developed from 100% recycled materials helps us to
reduce the long-term impact of microplastics in oceans,
landfills and waterways.
LENZING GROUP
We work with Lenzing Group to integrate innovative fibres
made from botanic products into our products.
Q - CYCLE®
We use Q-CYCLE yarns, which are produced by recycling
post-consumer waste such as end of life tyres, in jackets
including our Kathmandu EPIQ SE.
REPREVE
REPREVE® is the world’s leading brand of recycled
performance fibre and has transformed billions of
discarded plastic bottles into sustainable polyester.
RESPONSIBLE DOWN STANDARD
We are committed to this voluntary standard, which
incentivises the down and feather industry to treat
ducks and geese humanely and rewards organisations
leading the way.
RESPONSIBLE WOOL STANDARD
This voluntary standard recognises best practices of
farmers, ensuring that wool comes from farms with a
progressive approach to land management and from
sheep that have been treated responsibly.
TENCEL
TENCEL™ branded fibres are made from controlled
or certified natural raw material wood in production
processes that maximise resource efficiency and
minimise environmental impact.
YULEX
We use Yulex, a sustainable, plant-based rubber
as an alternative to traditional neoprene in some of
our wetsuits.
GRI 2-28
SEACELL
We use SeaCell, a biodegradable and breathable clothing
fibre made from seaweed and wood pulp, in some of
our products.
TOPGREEN
We use TopGreen Recycled Filament, a sustainable textile
material made from recycled plastic waste, in some Rip
Curl boardshorts, jackets and walkshorts.
KMD Brands Annual Integrated Report 2024126
KMDBrands.com
---
Corporate Governance
Statement
2024
1
Corporate Governance Statement
The Board and management of KMD Brands Limited (the
“Company”) and its related companies (“the Group”)
are committed to adhering to best practice governance
principles and maintaining the highest ethical standards.
The Board is responsible for the overall governance
of the Group, including adopting the appropriate
policies and procedures and guiding Directors,
management, and employees of the Group’s businesses
to fulfil their functions effectively and responsibly.
The Company regularly examines its governance
arrangements against national and international
standards. The Company has developed its
corporate governance policies and practices in
line with the principles and recommendations set
out in the New Zealand Stock Exchange (“NZX”)
Corporate Governance Code 1 April 2023 (“NZX
Code”) and Listing Rules (“NZX Listing Rules”).
This Corporate Governance Statement details the
Company’s key corporate governance arrangements.
Our disclosures below also include disclosures under
the Global Reporting Initiative (“GRI”) Universal
Standards. For the duration of the reporting period,
the Company has followed the recommendations set
out in the NZX Code where appropriate, having regard
to the size of the Group and the Board, the resources
available and the activities of the Group’s businesses.
After due consideration, the Board notes that the
Company’s corporate governance practices during
the reporting period only vary significantly from the
recommendations set out in the updated NZX Code in
relation to Recommendation 2.5. This recommends that
an organisation must state a specified period for the
measurable objects for achieving gender diversity in
relation to the composition of its board. Information about
the Company’s approach in these areas is separately
identified in this Corporate Governance Statement.
The Company’s relevant charters and policies
are available in the “Governance” section of
the Company’s Investor Website at www.
kmdbrands.com/corporate-governance.
The information in this Corporate Governance
Statement is provided as at 31 July 2024 (except where
otherwise specified). This Corporate Governance
Statement has been approved by the Board.
PRINCIPLE 1 – CODE OF
ETHICAL BEHAVIOUR
The Company is committed to fostering a culture of best
practice and ethical behaviour and therefore expects
the members of its Board and all employees to act in
accordance with the Company’s values, policies and
legal obligations. All Directors and employees joining
the Group are provided with information and training on
the Group’s values and the following policies. Updates
and refreshers are provided on a regular basis.
Code of Ethics
The Board is committed to the highest standards of
ethical corporate practice and business conduct. The
Board has a formal Code of Ethics, to be followed by
all Directors and employees, which provides a guide
for both behaviour and decision making, reflecting
the values of the Group. Any material breaches of
the Code of Ethics are reported to the Board.
The key aspects of the Code of Ethics are to:
• act with openness, fairness and integrity including full
and prompt disclosure of any conflicts of interest;
• consider the impacts of decisions on wider stakeholders;
• operate with diligence and carry out
responsibilities to the highest standard;
• act ethically, responsibly and to comply with the law;
• be accountable for acts and decisions; and
• speak up if aware of conduct that may
be a breach of the Code of Ethics.
Training on the Code of Ethics was last provided to all
employees in Australia, New Zealand, USA and Canada
in November 2023; 61% of employees completed
training during the current reporting period.
The Group maintains a formal Whistleblowing Policy
recognising that the protection of whistleblowers
is integral to fostering transparency, promoting
integrity and detecting misconduct. The best way to
fulfil this commitment is to create an environment in
which employees who have genuine concerns about
improper conduct, unacceptable behaviour or wrong-
doing feel safe to report it without fear of reprisal.
GRI 2-15, 205
KMD Brands Corporate Governance Statement 20242
Our Whistleblowing Policy outlines the mechanisms
available to raise concerns about the organisation’s
business conduct including reporting to the designated
Whistleblower Protection Officer or to KMD Brands’
external and independent Whistleblower hotline.
Any material incidents are required to be
communicated to the Board throughout the year.
In the current reporting period, no critical concerns
were required to be communicated to the Board.
Securities Trading Policy
The Company has a formal Securities Trading Policy that
outlines how Directors and employees are to deal in the
Company’s securities. This policy provides transparent
expectations and requirements. The Securities Trading
Policy is not designed to prohibit Directors and
employees from investing in the Company’s securities
but recognises that there are times when Directors or
employees cannot, or should not, deal in those securities.
In addition to the overriding restriction that persons
may not deal in the Company’s securities while they
are in possession of non-public material information,
all Company personnel are not permitted to deal
in securities during certain ‘blackout periods’.
Blackout periods are set eight weeks prior to release
of the Company’s half-year and full-year balance
date, until the first trading day after the release of
the half and full year results announcements.
Directors and senior executives must always receive
clearance from the Chairperson of the Board before
any proposed dealing in Company securities. Where a
Director or senior executive is subject to exceptional
circumstances (such as severe financial hardship),
written approval may be granted by the independent
Directors for the disposal of Company securities during
a blackout period, provided the individual concerned is
not in possession of any non-public material information.
The Securities Trading Policy prohibits Directors,
senior executives, key management personnel and
all other employees from entering into hedging or
other arrangements that have the effect of limiting the
economic risk in connection with unvested securities
issued pursuant to any employee option or share plan.
PRINCIPLE 2 – BOARD COMPOSITION AND
PERFORMANCE
Roles and responsibilities
The Board is responsible for the overall supervision
and governance of the Group. A framework for the
effective operation of the Board is set out in the Board
Charter, which includes the following responsibilities:
• the long-term growth and profitability of the Company;
• developing the strategic and financial
objectives for the Company, including those
related to sustainable development;
• monitoring management’s implementation of key
policies, strategies and financial objectives;
• directing, monitoring and assessing the Company’s
performance against strategic business plans;
• approving and monitoring the progress of
major capital expenditure, capital management,
and acquisitions and divestitures;
• identifying the principal risks of
the Company’s business;
• reviewing and ratifying the Company’s systems of
internal compliance and control, risk management,
legal compliance, corporate governance
practices, financial and other reporting;
• appointing and removing the Group
Chief Executive Officer (“CEO”);
• ratifying the appointment, and where appropriate,
the removal of the senior executives of the Group;
• approving the remuneration framework for the
Group; and
• monitoring and reviewing Board succession planning.
The Board is ultimately responsible for overseeing the
processes to identify and manage the Group’s impacts on
the economy, environment and people, and has appointed
the Group CEO to direct the day-to-day management
of Group operations and engage with stakeholders to
support these processes. Each of the Group executive
team members has been delegated specific areas of
responsibility for managing these impacts across the
businesses’ operations. This includes: the Chief Legal
& ESG Officer, who is responsible for execution of the
Group ESG strategy; the Chief People Officer who is
GRI 2-16, 2-26
3
responsible for policies and initiatives to support a
people-centred culture and workplace that fosters
health, safety, wellbeing and inclusiveness; the Chief
Commercial Officer who is responsible for supply chain
impacts; and the Chief Financial Officer (“CFO”) (noting
that co-interim arrangements are currently in place for
this role) who oversees financial health and stability
for the Group. Each of the brand CEOs are ultimately
responsible for driving activities within their individual
brand business units. All Group officers report directly
to the Group CEO, with written and in-person updates
provided on the management of economic, environmental
and people impacts at regular Board meetings, which
occur at least eight times a year. Matters reserved for
the Board and the scope and limitations of delegations
to the Group CEO, Group executives and management
personnel are set out in a Group Delegated Authority
Policy approved by the Board on an annual basis.
Board composition
At 31 July 2024, the Board is comprised of seven
Directors, namely David Kirk, Abby Foote, Andrea
Martens, Brent Scrimshaw, Philip Bowman, and
Zion Armstrong. The Chairperson of the Board
is David Kirk, an independent Director. Six out of
the seven Directors are non-executive Directors.
Michael Daly (Managing Director and Group CEO)
is the only executive Director on the Board.
The Board assesses the independence of its Directors
in accordance with the requirements set out in
the Board Charter, the NZX Listing Rules and the
NZX Code. Michael Daly, as Managing Director, is
employed by the Company in an executive capacity
and is not considered to be an independent Director.
David Kirk, Abby Foote, Andrea Martens, Brent
Scrimshaw, Philip Bowman, and Zion Armstrong
are considered to be independent Directors and
none of the factors identified in the commentary to
Recommendation 2.4 of the NZX Code apply to them.
A brief biography of each Board member can be
found in the “Board and Management” section of the
Company’s Investor Website, including the relevant
qualifications and experience of each Board member.
Nomination and appointment
New Directors are selected through a nomination
and appointment process administered by the
Board, as outlined in the Board Charter.
The Board has systems in place which require that
appropriate checks are conducted before appointing
any new Director, or putting a candidate forward
to the Company’s shareholders for election as a
Director. These established systems ensure that, as
a collective group, Board members hold the skills,
experience, knowledge and diversity needed to
discharge the Board’s functions and responsibilities.
The Company enters into written agreements with
each newly appointed Director or senior executive
establishing the terms of their appointment.
LEFT – RIGHT: Michael Daly, Abby Foote, Brent Scrimshaw, David Kirk, Philip Bowman, Andrea Martens, Zion Armstrong.
GRI 2-9, 2-10, 2-11, 2-13
KMD Brands Corporate Governance Statement 20244
Skills Matrix
The Board benefits from the Directors’ diverse
combination of skills, experiences and expertise and
the insights that result from this diversity. The Board
is satisfied that the current composition of the Board
reflects an appropriate range of the skills, experience,
knowledge and diversity needed to discharge the Board’s
functions and responsibilities and to achieve the strategic
aims of the Group. The Board continues to monitor and
review Board composition. The Board has developed a
skills matrix which it uses to assist in developing plans
for long-term succession planning to identify current and
future skills gaps.
During the year, the measures taken to advance the
collective knowledge, skills and experience of the Board
on sustainable development include information on the
NZ Climate-Related Disclosure reporting framework and
proposed changes to the Privacy Act in Australia.
The following chart summarises the skills, attributes and
experience held by the Directors of the Company during
the reporting period.
BUILD GLOBAL BRANDSSUBSTANTIALMEDIUM
Global brand, consumer goods product development
Customer omni-channel management
Strategy development and commercial acumen
ELEVATE DIGITAL
Customer-centric e-commerce, digital and data
BEST FOR PEOPLE AND PLANET
Sustainability for communities, climate and product circularity
Governance experience of listed companies
Risk management including non-financial risk
LEVERAGE OPERATIONAL EXCELLENCE
Finance, integrated reporting and audit
Capital allocation including M&A
Human capital, talent and culture
International business development
Executive leadership at scale
SKILLS OF OUR DIRECTORS
GRI 2-17
5
Te n u r e
Directors are appointed and retire by rotation in
accordance with the Company’s constitution and the
NZX Listing Rules. Director tenure is taken into account
by the Board when considering the independence of
each Director in accordance with the NZX Code.
The average tenure for non-executive Directors
is five years with the following tenure mix:
Tenure of Non-Executive Directors
>10 years 1
6 – 10 years 2
3 – 5 years 2
<2 years 1
Measuring Board Performance
The Board undertakes an annual self-evaluation
of its performance against the requirements and
expectations of the Board Charter and the Board’s role
in overseeing the Group, including its impacts on the
economy, environment and people. The performance
of the Board’s committees and each individual Director
is also reviewed on an annual basis, alongside the
Board’s goals and objectives for the upcoming year.
This performance review also identifies any changes
needed to the Board and Committee Charters and
is used to assist in developing plans for long-term
succession planning for Board composition and future
training needs. The Board approves the criteria for
assessing annual performance of the Group CEO.
The Board has undertaken a review of its performance
during the reporting period through an external
facilitator, including interviews with each Director.
The Board makes appropriate training available
to all Directors to enable them to discharge their
responsibilities to the best of their ability, and to keep
up to date on changes in areas relevant to their roles.
Diversity and Inclusion
The Group embraces and encourages a diverse
and inclusive workplace culture. This enriches
collaborative and creative thinking to provide
innovative products and world-class customer
service to an equally diverse global community.
The Company maintains a written Diversity Policy
in accordance with the NZX Code, which affirms the
Group’s commitment to harnessing differences to
encourage an innovative, responsive and productive
workplace, creating value and rewards for customers,
the team, shareholders, and the community.
The Diversity Policy considers factors beyond gender
diversity (such as ethnicity, cultural background,
sexual orientation, age and skills). The People and
Remuneration Committee is responsible for setting
diversity objectives and monitoring progress.
More information about the Group’s approach to
diversity and inclusion, including progress against
the measurable objectives set by the People
and Remuneration Committee, can be found in
the “Our People” section of our FY24 Annual
Integrated Report (“FY24 Annual Report”).
Gender Composition of the Company’s Board of
Directors and Officers
The Group has set a measurable objective for achieving
gender diversity in relation to the composition of its
Board and Officers, of not less than 40% who self-
identify as male and 40% who self-identify as female.
The Board has not determined a specified period for
meeting this measurable objective. In recruitment, the
Company seeks candidates with specific capabilities,
including global apparel experience, required to
support the Group, selecting from a balanced pool
of candidates. Ultimately, the best person for the role
is selected, notwithstanding gender identification.
The Company is committed to its stated targets and
initiatives to improve diversity and will transparently
disclose its progress on these objectives.
For the purposes of the table below, “Officer” means
the Group executive team, being those roles reporting
to Michael Daly in his capacity as Group CEO.
GRI 2-18
KMD Brands Corporate Governance Statement 20246
As at 31 July 2024, the gender composition of the
Company’s Board and officers is as follows:
DirectorsOfficers
FY24FY23FY24FY23
Male5544
Female2254
Gender diverse0000
To t a l7798
% Male71%71%4 4%50%
% Female29%29%56%50%
Gender Pay Gap
As at 31 July 2024, the Group had a total of 2985 female
employees, 1681 male employees, 7 gender diverse
employees and 15 employees with undisclosed gender.
In FY24, we completed an equal pay analysis across
our support office roles. This reviewed any instances
where we have two or more employees within a brand
and region that share a job title to flag any differences
in pay for individual review as part of FY25 remuneration
setting processes, to ensure fair treatment of employees.
The Group is focused on a number of activities to
reduce the gender pay gap for the longer term,
including a new parental leave policy which was
introduced in FY24 to better support working
parents to keep in touch and return to work after
the birth of a child; enabling continued career
progression and income earning potential.
Given the global nature of our business, gender pay
gap analysis across our multiple operating locations
needs to account for regional variations in currency
and cost of living. We continue to consider what
level of meaningful disclosure we can make about
gender pay gap information within our global Group.
For more information in relation to gender pay gap
for our Australian workforce, please refer to our 2023
Australian Workplace Gender Equality Agency (WGEA)
report at www.kmdbrands.com/communities.
PRINCIPLE 3 – BOARD COMMITTEES
The Board has established and maintains two committees
to assist with discharging the Board’s responsibilities:
the Audit and Risk Committee; and the People and
Remuneration Committee. The Board may establish
other committees based on the needs of the Group.
Each Committee is governed by its own Charter,
which has been adopted by the Board, and is reviewed
periodically. The Committee Charters are available in
the “Corporate Governance” section of the Company’s
Investor Website at www.kmdbrands.com/corporate-
governance.
Membership of each Committee is based on the needs of
the Company, relevant legislative and other requirements,
and the skills and experience of individual Directors. Each
Committee makes recommendations to the full Board for
consideration and decision-making as and when required.
The Company does not have a nomination committee.
Due to the size of the Company’s Board, the Board as a
whole retains the responsibility for recommending new
Director appointments. The Board considers that it is able
to deal efficiently and effectively with the processes of
appointment and reappointment of Directors to the Board
and considerations of Board composition and succession
planning. The Board draws on the experience and advice
of external recruitment specialists for assistance
when required.
The Board will continue to review the needs of the
Group in relation to the Director nomination process and
whether a change of approach in this area is needed.
A summary of the roles, responsibilities and membership
of these two Board Committees (as at 31 July 2024) is
set out on the following page.
7
AUDIT AND
RISK COMMITTEE
PEOPLE AND
REMUNERATION COMMITTEE
Roles and responsibilities• Overseeing the process of financial
reporting, internal control, continuous
disclosure, financial and non-financial
risk management, compliance,
and external audit, including
compliance with relevant climate-
related disclosure regulations;
• Monitoring the Group’s compliance
with laws and regulations and
the Company’s Code of Ethics;
• Encouraging effective relationships
with, and communication between,
the Board, management and the
Company’s external auditor; and
• Evaluating the adequacy of
processes and controls established
to identify and manage areas
of potential risk and to seek to
safeguard the Company’s assets.
• Overseeing the development and
application of the Group Human
Resources strategy, the remuneration
framework and associated policies;
• Assisting the Board in relation to
matters concerning remuneration of
senior executives and Directors;
• Providing effective remuneration
policies and programs to motivate high
performance from all employees; and
• Confirming that appropriate and
effective policies for managing the
performance and development of
employees at all levels are in place.
MembershipAt least three members, a majority of
whom must be independent Directors
and all of whom must be non-executive
Directors. At least one member must
have an accounting or financial
background. The Chair is to be an
independent non-executive Director,
who is not the Chair of the Board.
Current members:
• Abby Foote (Chair)
• David Kirk
• Philip Bowman
• Zion Armstrong
Senior executives may attend
Audit and Risk Committee
meetings by invitation only.
At least three members, a majority of
whom must be independent Directors
and all of whom must be non-executive
Directors. The Chair is to be an
independent, non-executive Director.
Current members:
• Andrea Martens (Chair)
• Brent Scrimshaw
• David Kirk
Senior executives may attend People
and Remuneration Committee
meetings by invitation only.
GRI 2-12
KMD Brands Corporate Governance Statement 20248
Attendance
The number of meetings of the Board of Directors and the Board Committees held during the year ended 31 July 2024
and the numbers of meetings attended by each Director were:
Board Audit and Risk Committee
People and
Remuneration Committee
AttendedEligible to
attend
AttendedEligible to
attend
AttendedEligible to
attend
David Kirk886644
Abby Foote8866--
Andrea Martens88--44
Brent Scrimshaw88--44
Michael Daly88----
Philip Bowman8866--
Zion Armstrong 8856--
Takeover Protocols
The Board has appropriate protocols in place that
set out the procedure to be followed if there is an
offer to take a controlling interest in the Company.
A committee of independent Directors would be
formed which would have responsibility for managing
the takeover process in accordance with the Board
protocols and the New Zealand Takeovers Code.
PRINCIPLE 4 – REPORTING
AND DISCLOSURE
The Company is committed to promoting investor
confidence by providing all stakeholders with timely,
accurate and balanced disclosure of information regarding
its financial, non-financial and operational matters.
The Company’s Code of Ethics, Board and
Committee Charters and other key governance
policies and documents are available on its
Investor Website at www.kmdbrands.com/
investor-centre/corporate-governance/.
Continuous Disclosure Policy
The Company’s Continuous Disclosure Policy provides
that all Directors, executives and employees are
required to be aware of and fulfil their obligations in
relation to the timely disclosure of material information.
The Continuous Disclosure Policy explains the
respective roles and responsibilities, procedures and
processes in place to ensure the Company observes
its continuous disclosure obligations under the NZX
Listing Rules. The Continuous Disclosure Policy is
available and accessible to all Group employees
and training on its contents is provided regularly.
Financial Reporting
The Audit and Risk Committee oversees the
quality of external financial reporting including
the veracity, comprehensiveness and timeliness
of financial statements. The Company seeks to
provide clear, concise financial statements.
9
Non-Financial Reporting
The Company is committed to sharing information
about its environmental and social impact. Across the
Group, the Company is committed to protecting workers’
rights, minimising waste and lowering the environmental
impacts of business operations by understanding
its supply chain. Throughout its Annual Integrated
Reporting, the Company has described the material
ESG risks faced by the Group and how the Company
plans to manage those risks. The Company uses and
reports in reference to the GRI Standards framework
and the Sustainability Accounting Standards Board
(SASB) requirements, as well as the B Corp framework
to identify, monitor and manage those risks. The
Company intends to publish its first Climate-Related
Disclosure statement under the Aotearoa New Zealand
Climate Standards by the end of November 2024.
PRINCIPLE 5 – REMUNERATION
The People and Remuneration Committee is
responsible for reviewing remuneration packages
for the Group CEO and senior executives and
making recommendations to shareholders in relation
to non-executive Directors’ remuneration.
The People and Remuneration Committee adopts
a series of principles in determining remuneration
related decisions. The principles used are:
• the remuneration structure should reward those
employees who can influence the achievement of
the Group’s strategic objectives and business plans
to enhance shareholder value for successful Group
performance outcomes and their contribution to these;
• executive remuneration should be market competitive,
and generally account for market practice including
consideration of employee place of domicile;
• executives’ remuneration packages have a mix
of fixed and variable pay and should have:
– a substantial portion of their total remuneration
that is “at risk” and aligned with reward
for creating shareholder value;
– an appropriate balance between short and long-
term performance focus and outcomes; and
– a mix of cash and equity-based remuneration;
• due to the Group CEO’s leadership role in establishing
and delivering achievement of medium and long-term
Group strategic objectives and business plans, and
increasing shareholder value over that period, the
Group CEO, relative to other executives, should have:
– a greater proportion of total remuneration (at
least 50%) that is “at-risk”, i.e. contingent upon
the achievement of performance hurdles; and
– a greater proportion of “at-risk”
remuneration weighted towards equity-
based rewards rather than cash;
• non-executive Directors’ remuneration should
enable the Company to attract and retain high
quality Directors with the relevant experience. In
order to maintain independence and impartiality,
non-executive Directors should not receive
performance-based remuneration; and
• the Board uses discretion when setting remuneration
levels, taking into account interests of shareholders, the
current market environment and Group performance.
The current approved pool of remuneration available for
payment to non-executive Directors is AUD $1,250,000
in aggregate. This was approved by shareholders at the
Annual Shareholders’ Meeting on 16 November 2022.
In the year ended 31 July 2024, total fees paid to non-
executive Directors amounted to NZD $1,077,508.
Details of the total remuneration and value of
other benefits received by each Director from the
Company during the reporting period is set out in the
Statutory Information of our FY24 Annual Report.
Remuneration Policy
The Company maintains a Remuneration Policy in
relation to its Directors, executives and employees which
provides for remuneration at fair and reasonable levels
throughout the Group. The purpose of the Remuneration
Policy is to provide for coherent remuneration practices
which enable the attraction and retention of high calibre
individuals who contribute positively to the achievement
of the Group’s strategy and objectives, and ultimately
create value for the Company’s shareholders. The
remuneration of executive and non-executive Directors
is clearly differentiated in the Remuneration Policy.
The Board, through the Remuneration Committee,
undertakes its governance role in setting Group
executive remuneration including, where required,
use of external independent remuneration
GRI 2-19, 2-20
KMD Brands Corporate Governance Statement 202410
consultants and/or available market information.
The Group executive remuneration structure has
three components:
• base salary and benefits (reviewed annually
to assess appropriateness to the position
and competitiveness within the market);
• Short Term Incentives (“STI”) determined on the basis
of achievement of specific targets and outcomes
relating to annual Group financial performance, and
individual value adding performance objectives; and
• Long Term Incentives (“LT I”) via participation
in the Company’s LTI Plan.
Short Term Incentives
Group executives and certain senior employees are
eligible to participate in an annual STI that delivers
rewards by way of cash. Group Earnings Before Interest
and Tax (“EBIT”) has been determined as the appropriate
financial performance target to trigger payment of STI.
The amount of any STI paid in a year is dependent upon:
a) the level of performance achieved against the Group’s
financial performance target (EBIT) for the year; and
b) the outcome of individual value adding
performance, measured by achievement of
individual Key Performance Indicators (“KPIs”),
subject to a minimum level of performance
achieved by the Group relative to the financial
performance target (EBIT) for the year.
STI outcomes for the executive team are aligned
with the Group’s strategic objectives. Each of the
Group executive team members, including our CEO,
has individual KPIs linked to our four Group strategic
pillars, including non-financial performance objectives,
specific to each executive’s role and responsibility.
Long Term Incentive Plan
Performance Share Rights (“PSRs”) under the
Group’s LTI Plan have been offered each year since
the LTI Plan was originally implemented in 2010.
The LTI Plan is intended to focus performance on
achievement of key long-term performance metrics. The
selected performance measures provide an appropriate
balance between relative and absolute Company
performance. The Board continues to reassess the plan
and its structure to confirm it will best support and
facilitate the growth in shareholder value over the long-
term relative to current business plans and strategies.
PSRs granted to the Group executive during the
reporting period are dependent upon the following:
• 50% of vesting is subject to an Earnings Per Share
(“EPS”) Compound Annual Growth Rate (“CAGR”)
hurdle over a three-year period between 1 August 2023
and 31 July 2026 (“Performance Period”). Vesting
is on a sliding scale proportionate to the total EPS
CAGR over the three-year performance period; and
• 50% of vesting is subject to the Company achieving
relative Total Shareholder Return (“TSR”) targets
over a three-year period from 1 August 2023 to
31 July 2026. TSR is measured on a relative basis
against a comparator group of Australian Stock
Exchange (“ASX”) listed companies in the Consumer
Discretionary, Distribution & Retail GICS Sector
(excluding Wesfarmers, companies belonging to the
Automotive Retail GICS Sub-Industry and Thorn Group
Limited) as at the date of the grant. Vesting is on a
sliding scale proportionate to the TSR performance.
Performance measurement is at the end of the
applicable Performance Period with no ability to re-
test. In respect of PSRs granted during the reporting
period, the relevant portion of the award that will vest
is determined based on the percentile ranking of the
Company against the comparator group at the end of
the Performance Period. PSRs are granted at nil cost.
11
Group CEO Remuneration
Group CEO remuneration comprises a mixture of base
salary, STI and LTI.
The Group CEO remuneration for the year ending
31 July 2024 is set out in the table below:
Michael Daly Group CEO
Remuneration package for FY24
AUD$
Fixed
(Base salary, superannuation)
$1,127,500
($1,100,000 plus
super $27,500)
STI
(max potential 90% of fixed)
$1,014,750
LT I
(max potential 100% of fixed)
$1,127,500
Maximum potential
remuneration
$3,269,750
The annual total compensation ratio for the Group
CEO, as the highest paid individual in the Group, to the
median annual total compensation of the rest of the
Group’s employees is $24:1. For FY23, this ratio was also
NZD $24:1. For the purposes of this calculation, full-
time equivalent rates have been used for each part-
time employee. The types of compensation included
in the calculation are base salary, superannuation
contribution, bonuses and deferred equity incentives.
The key principles of the Company’s Remuneration
Policy for the Group CEO remuneration package are:
• More than half the total remuneration
for the Group CEO is at-risk;
• Over 85% of the at-risk remuneration (all
except for the STI KPIs) is solely dependent
on outcomes of Group financial performance
against short-term and long-term targets; and
• All LTI (100% of fixed annual remuneration) will be
measured on a single three-year Performance Period.
FY24 STI Outcome
For the year ended 31 July 2024 the Group
financial performance targets were not met and
as a result, no short-term cash incentives were
paid to the Group CEO or the Group executive.
PRINCIPLE 6 – RISK MANAGEMENT
The identification and proper management of the
Group’s material risks is an important priority of the
Board. The Company has a central risk management
framework in place to identify, oversee, manage and
control risks. The KMD Brands risk framework supports
risk identification to reduce potential negative impacts
and improve the likelihood of beneficial outcomes, while
providing a standard to drive consistency and, in turn,
confidence that risk is being managed consistently.
The KMD Brands risk framework sets out the guiding
principles, roles and responsibilities, the risk assessment
process and reporting requirements. The KMD Brands
risk framework is aligned to ISO 31000:2018 Risk
Management Guidelines. The Board regularly reviews
the KMD Brands risk framework and the assessments
of how the material risks are impacting its business. The
Board recognises that some element of risk is inherently
necessary in order to achieve the strategic aims for the
Group’s businesses and deliver value to shareholders.
Risk Management Policy
The purpose of the Company’s Risk Management
Policy is to highlight the risks relevant to the Group’s
operations, and the Company’s commitment to
designing and implementing systems and methods
appropriate to minimise and control its risks.
The Audit and Risk Committee assists the Board
in discharging its responsibility for monitoring risk
management. The Committee is responsible for
establishing procedures which seek to provide assurance
that major business risks are identified, consistently
assessed, and appropriately addressed in line with
the Group’s risk appetite and defined tolerances.
This Committee oversees the implementation of the
risk management framework, monitors its ongoing
effectiveness, and regularly reports to the Board.
GRI 2-21
KMD Brands Corporate Governance Statement 202412
Health, Safety and Wellbeing
The Company is dedicated to cultivating a strong
safety culture and awareness of health and safety
risks, performance and management within the Group.
The Company has adopted an integrated approach
to safety and wellbeing across the Group, which
recognises that workplace safety, health and mental
health all contribute to an employee’s overall wellbeing.
The Board receives and reviews detailed reports on
health and safety matters at each Board meeting. As
a lag indicator of health and safety risks, performance
and management, the rolling lost time injury*
frequency rate (*number of lost injuries per 1,000,000
hours worked) was 2.48 (target of 5.0) during the
reporting period for the year ending 31 July 2024.
The total recorded injury frequency rate for the reporting
period was 4.24.
More information on the health, safety and wellbeing
of Group employees can be found in the Our
People section of the FY24 Annual Report.
PRINCIPLE 7 – AUDITORS
The Audit and Risk Committee is responsible for
making recommendations to the Board about the
appointment or replacement of, and for monitoring
the effectiveness and independence of, the Group’s
external auditor. The Audit and Risk Committee
Charter requires that the external auditor or lead audit
partner be changed at least every five years. The
Audit and Risk Committee reviews and assesses the
independence of the external auditor on an annual basis.
The Company’s external auditor is KPMG, appointed
in December 2021. The audit partner responsible has
continued from that date.
During the reporting period, the Company has scaled
back its internal financial audit function due to
resource constraints. The Company considers that it
has sufficient systems for evaluating and continually
improving the effectiveness of its risk management
and internal processes. This includes through the
external advisors it currently engages, as well as other
internal established processes, including the verification
process required to achieve B Corp certification
and information and cyber security frameworks.
The Company’s external auditor attends the annual
meetings of the Company and is available to answer
any questions from investors relevant to the audit.
PRINCIPLE 8 – SHAREHOLDER RIGHTS
AND RELATIONS
The Company is committed to keeping its stakeholders
and owners effectively and comprehensively
informed of all relevant information affecting the
Group in accordance with all applicable laws and
the Company’s communication strategy.
Information is communicated to investors through
the lodgement of all relevant financial and other
information with NZX and ASX, publishing information
on the Company’s Investor Website, annual
shareholder meetings, annual and interim reporting,
analyst and investor briefings and roadshows.
Investor Website
The Company’s Investor Website (www.kmdbrands.
com) contains all key communications concerning the
Company and information about its brands: Kathmandu,
Rip Curl and Oboz. Shareholders can also view
profiles of the Company’s Board and Group executive
management team on the Investor Website, along
with its key governance policies, the Charters of the
Board Committees, copies of current and past annual
reports and webcasts of annual shareholder meetings.
All relevant announcements made to the market
are shown on the Company’s Investor Website as
soon as they have been released to NZX and ASX
and can also be accessed through the Company’s
Investor Website. Investors can subscribe through
the Investor Website to receive an email alert
when a new announcement is lodged.
Communication
The Board encourages investors to communicate
with the Company electronically. Investors can
contact the Company through the Investor
Website at www.kmdbrands.com/contact.
Investors have the option of receiving their
communications, which includes the Annual Integrated
Report, from the Company electronically.
The Company actively engages with its investors through
annual shareholder meetings, its investor briefings and
roadshows, and meeting with stakeholders on request.
13
Approach to Seeking Additional Equity Capital
The Board acknowledges Recommendation 8.4 of the
NZX Code which suggests that where the Company
requires additional equity capital, where practical, the
Board should favour capital raising methods that provide
existing equity security holders with an opportunity to
participate in the offer on a pro-rata basis, and on no
less favourable terms, before further equity securities
are offered to other investors. The Board has taken
Recommendation 8.4 of the NZX Code into account,
along with a number of other factors when considering
options for the capital raisings in previous reporting
periods. Ultimately the Board will choose methods to
raise equity, when needed, which are necessary and
desirable to achieve the best outcomes for the Company
in the context of any anticipated transaction or proposal
for which additional equity capital may be required.
Meetings and Voting
Where voting by shareholders on a matter concerning
the Company is required, the Board encourages
investors to attend the annual shareholders’ meeting
or to send in a proxy vote. All voting at the Company’s
annual shareholder meeting is conducted by way
of poll on the basis of one share, one vote.
In 2019, the Company began using a virtual meeting
platform for its shareholder meetings to allow
participation where a shareholder is unable to attend
in person. The Company’s notice of meeting will be
available at least 20 working days prior to the meeting
at www.kmdbrands.com/announcements.
KMDBrands.com
---
Modern Slavery Statement
2024
We recognise and pay respect to the Elders, past and present, and
communities of the lands touched by KMD Brands. We recognise and
acknowledge Indigenous Peoples across the world and their survival of
practices that today are referred to as modern slavery, as well as the
unresolved nature of these wrongs.
As a B Corporation (B Corp), KMD Brands Limited (KMD Brands) is committed
to balancing profit with our impact on people and planet, including respecting
internationally recognised human rights throughout our supply chain. KMD
Brands entities take a consolidated approach to Environment, Social and
Governance (ESG). As such, this is a joint statement made on behalf of KMD
Brands Limited and the following KMD Brands controlled entities: Kathmandu
Pty Ltd (ACN 007 047 547), Rip Curl Group Pty Ltd (ACN 068 999 520), Rip
Curl Canada Inc, Rip Curl UK Ltd and Rip Curl, Inc.
This is the KMD Brands Modern Slavery Statement 2024, pursuant to its
obligations under Australia’s Modern Slavery Act 2018 (Cth), Canada’s Fighting
Against Forced Labour and Child Labour in Supply Chains Act 2023, the United
Kingdom’s Modern Slavery Act 2015 and the California Transparency in Supply
Chains Act (Steinberg, 2010). This statement covers the reporting period 1
August 2023 to 31 July 2024.
The principal address of KMD Brands Limited is 223 Tuam Street, Christchurch
8011, New Zealand. Australian Registered Body Number of KMD Brands Limited
is 139 836 918. You can report a suspected incident of modern slavery linked to
KMD Brands via email to workers.rights@kmdbrands.com.
This statement was approved by the Board of Directors of KMD Brands on
25 September 2024 as principal governing body on behalf of each reporting
entity covered by this Statement.
KMD Brands
Modern Slavery
Statement 2024
1
Contents
1. KMD Brands structure, operations and supply chain
2. Risks of modern slavery in KMD Brands operations
and supply chain
2 .1 Geographic risk (tier 1 regions)
2.2 Product risk
2.3 Sector risk
2.4 Tier 2+ manufacturing, processing and production
2.5 Licensed products
2.6 Third party products sold by KMD Brands
2.7 Indirect products and services
2.8 Operational risks
3. Actions taken by KMD Brands to assess and
address the risks of modern slavery
3.1 Governance
3.2 Commercial practices
3.3 Due diligence controls:
assessment and monitoring
3.4 Partnerships
4. How KMD Brands assesses the effectiveness
of our actions
5. Consultation
6. Looking ahead
7. Appendix
How this statement addresses the reporting criteria
3
1. KMD Brands structure, operations and supply chain
Founded in New Zealand as an outdoor apparel and
equipment retailer in 1987, KMD Brands became a publicly
listed company in 2009. KMD Brands is publicly listed
on the NZX and ASX. KMD Brands is a group of three
brands: Kathmandu, Oboz and Rip Curl. KMD Brands is
headquartered at 223 Tuam Street, Christchurch, New
Zealand.
Kathmandu, Oboz and Rip Curl products are distributed
via online websites and at wholesale and retail levels.
Rip Curl products are also distributed through Rip Curl’s
owned and operated chain of Ozmosis branded stores.
Kathmandu designs and manufactures outdoor apparel,
footwear and equipment sourced from factories in China,
Indonesia, Italy, Nepal, New Zealand, Spain and Vietnam.
Oboz designs and manufactures outdoor footwear
sourced from factories located in Vietnam and China.
Rip Curl designs and manufactures surf apparel and
accompanying products, as well as sponsoring athletes
and surfing events. Rip Curl products are manufactured in
factories in Australia, Bangladesh, Brazil, Cambodia, China,
France, India, Indonesia, Mexico, Thailand and Vietnam.
The Rip Curl brand is licensed to five third-party licensees
operating in Argentina, Uruguay, Chile, Peru, Fiji, Papua
New Guinea, Malaysia, Singapore and South Africa. The
brand is also licensed to global merchandise licensees in
eyewear, watch bands, phone cases and auto accessories.
Please refer to the figure below for a breakdown of the
number and location of office locations, stores, materials
sourcing and factories. Kathmandu, Rip Curl and Oboz
factory lists are also publicly available on the Open
Supply Hub.
As of 31 July 2024 KMD Brands employs 4,688 employees.
Please see pages 5-6 of GRI & SASB Index 2024 for
breakdown by age, employment type and region.
NORTH AMERICATOTAL
Owned stores30
Licensed stores24
Wholesale doors+3,800
Materials sourcingUSA, Mexico
Factories (Total Tier 1,
% of KMD Brands Spend
on Branded Products)
Mexico (1, <1%)
SOUTH AMERICATOTAL
Owned stores7
Licensed stores109
Wholesale doors+600
Materials sourcingBrazil
Factories (Total Tier 1,
% of KMD Brands Spend
on Branded Products)
Brazil (9, 2%)
FRANCE
BRAZIL
USA
CANADA
Bozeman
Vancouver
San Clemente
Global Office Locations
Sao Paulo
Hossegor
AUSTRALASIATOTAL
Owned stores270
Licensed stores21
Wholesale doors+900
Materials sourcing
Australia,
New Zealand
Factories (Total Tier 1,
% of KMD Brands Spend
on Branded Products)
Australia (3, <1%),
New Zealand (2, <1%)
ASIATOTAL
Licensed and JV stores83
Wholesale doors+600
Materials sourcing
Vietnam, China, Thailand,
Taiwan, Japan, Indonesia, South
Korea, Bangladesh, India, Nepal
Factories (Total Tier 1,
% of KMD Brands Spend
on Branded Products)
China (79, 35%), Vietnam
(22, 31%), Indonesia (6, 13%),
Bangladesh (7, 8%), India (10,
5%), Thailand (3, 5%), Cambodia
(2, <1%), Nepal (1, <1%)
EUROPETOTAL
Owned stores27
Licensed stores10
Wholesale doors+2,000
Materials sourcingItaly, France
Factories (Total Tier 1,
% of KMD Brands Spend
on Branded Products)
France (2, <1%),
Italy (1, <1%),
Spain (1, <1%)
AFRICA &
MIDDLE EASTTOTAL
Licensed stores32
Materials sourcingSouth Africa
Factories 0
NEW ZEALAND
AUSTRALIA
INDONESIA
THAILAND
JAPAN
Chiang Mai
Fujisawa
Bangkok
Bali
Torquay
Christchurch
Melbourne
GLOBAL FOOTPRINT
KMD Brands Modern Slavery Statement 20244
2. Risks of modern slavery in KMD Brands operations
and supply chain
KMD Brands implements an evolving due diligence
framework to identify and mitigate potential risks in our
supply chain that could be associated with or contribute
to modern slavery. In this report, we use the term “modern
slavery” to refer to forced labour and child labour. The
actions we take to assess and address the risks of modern
slavery in our operations and supply chain are outlined
at Section 3. Inherent geographic, sector and product
risks are integrated with supplier specific risks to inform
individual facility risk profiles. The risks factors identified
below may indicate increased vulnerability to modern
slavery, though this does not necessarily mean modern
slavery is occurring, or that these risks are present in our
own operations.
The boundaries between substandard working conditions
and severe exploitation can sometimes be unclear. In
some cases, exploited workers may recognise a lack of
decent work but not identify themselves as victims of
modern slavery. As such, we integrate modern slavery risk
management within our wider human rights due diligence
program and commitment to respect human rights.
2.1 GEOGRAPHIC RISK (TIER 1 REGIONS)
KMD Brands works with 149 tier 1 manufacturing
suppliers to create Rip Curl, Kathmandu and Oboz
branded products. We currently source approximately
6% of products (by spend) from suppliers in regions with
extreme risk of slavery (Cambodia and Thailand) and 83%
of products from suppliers in regions with a high risk of
slavery (China, India, Indonesia and Vietnam).
Modern slavery is more prevalent in certain countries,
including some of the locations KMD Brands sources from.
The following geographic risk ratings are based on the
Walk Free Foundation’s Global Slavery Index (Walk Free,
The Global Slavery Index 2023 - https://walkfree.org/
global-slavery-index/
EXTREME-RISK GEOGRAPHIC REGIONS
Cambodia
The apparel industry in Cambodia is characterised by high
levels of excessive overtime, poor wages and poor health
and safety conditions. Considering these risks, KMD
Brands only works with tier 1 suppliers in Cambodia with
whom we have long, well-established relationships, and
demonstrate strong internal compliance practices.
Thailand
The risk of forced labour remains at extreme levels in
Thailand. A large population of ethnic people continue to
lack citizenship rights and are particularly vulnerable to
abuse and exploitation. Rip Curl manufactures in three
factories in this region. One is Onsmooth Thai, a certified
B Corp factory owned by Rip Curl. Rip Curl has owned and
operated this factory for 27 years. The second two are
long-standing Rip Curl partners that are visited regularly
by our internal production team.
HIGH-RISK GEOGRAPHIC REGIONS
China
Discriminatory government practices are a key contributor
to modern slavery risks in China, including the internment
of Chinese citizens of ethnic Turkic origin in the Xinjiang
region and forced labour by prisoners incarcerated in
China’s regular judicial system. Increasing concerns over
forced labour risks and geopolitical uncertainties are
driving diversification of KMD Brands sourcing outside
of China.
The prohibition on traditional forms of collective
bargaining continues to impact forced labour risk.
Internal migrant workers are also particularly vulnerable
to exploitation. We also continue to encounter risks
to audit transparency due to inconsistent wage and
attendance records.
Both Kathmandu and Rip Curl tier 1 manufacturing
facilities are predominately located in export-oriented
centres that are under significant government and
customer pressure to operate in a socially and
environmentally responsible manner. KMD Brands
engages a China operations manager who regularly visits
factories in China to assess workplace compliance. We
also continue to increase direct worker consultation and
engage a China-based employee relations consultancy to
mitigate these risks.
India
Bonded labour in India is still prevalent and the risk of
child labour is extreme. We have been monitoring the
impact of amendments to the Factories Act in Karnataka
that increase permissible working hours and permit
women to work night shifts. These changes may impact
worker conditions and the health and safety of female
workers. KMD Brands works with one tier 1 supplier in this
5
region. The general working hours in this facility remain
unchanged (9.00am – 5:30pm) and verified working hours
are below the legal requirement.
KMD Brands engages a regional quality manager who
regularly visits factories in India.
Indonesia
The textile and garment industry plays a key role in the
Indonesian economy. Subcontracting to suppliers with
below standard labour conditions is common, as is verbal
and physical harassment of workers. In recognition of this
broader risk, Kathmandu works with four suppliers with
strong human rights awareness and dedicated social and
environmental teams. Rip Curl partners with two long-
standing factories that are visited regularly by members of
the Rip Curl Indonesia team.
In FY23, a social assessment found one of Rip Curl’s
Indonesian suppliers was paying workers below the
minimum government regulation. Following a period
of open communication and education, this supplier
has increased worker remuneration to meet regulation
requirements. KMD Brands conducted a worker survey in
July 2024 to confirm the increase and worker satisfaction
with both remuneration and broader working conditions.
In FY24, in-person visits to Rip Curl and Kathmandu
suppliers in Indonesia also enabled increased
understanding of facility modern slavery risk
management practices.
Vietnam
The garment and footwear industries are important
drivers of the Vietnamese economy. Excessive overtime
and poor job security are prevalent within the sector,
which increase the risk of forced labour. The state of the
global economy is also placing pressure on factories.
Given the large percentage of products sourced from
Vietnam and prevailing risks, KMD Brands surveyed over
4,000 workers in Vietnam in FY23. In FY24, we conducted
follow-up surveys to assess the impact of corrective
action taken by factories and compare working conditions
in a differing season.
The majority of factories engaged by Kathmandu, Rip
Curl and Oboz in Vietnam are progressive Environmental
Social Governance (ESG) partners with dedicated social
and environmental teams that prioritise worker wellbeing.
Oboz also has a representative office in Vietnam and
factories are visited regularly by Oboz employees. In FY24,
in-person visits to Kathmandu suppliers in Vietnam also
allowed for enhanced understanding of suppliers’ modern
slavery risk management practices.
In FY24, we were approached regarding allegations
of labour rights abuse linked to a facility in
Oboz’s supply chain. Together with the Fair Labor
Association (FLA), we investigated the allegations
and provided a public response that is available via
Business and Human Rights Resource Centre.
MEDIUM-RISK GEOGRAPHIC REGIONS
Bangladesh
The Bangladesh Government has taken a strong stance
on addressing modern slavery. However, poverty and
social instability continue to present labour risks and
monitoring of labour law enforcement is limited. During
FY24, workers in the garment sector were killed by
police during protests and a union leader murdered. The
government-imposed shutdowns of July and August 2024
have disrupted factory operations, jeopardising worker
safety and creating human rights and labour concerns.
There is a risk of lost wages that could impact workers’
financial wellbeing. KMD Brands confirmed that all factory
partners in Bangladesh provided full compensation for the
government-imposed holidays.
We continue to monitor closely the welfare of workers
in Bangladesh, supported via regular factory visits by
Rip Curl’s regional quality manager. Strong relationships
with our suppliers in Bangladesh assist in providing good
visibility of working conditions, in many cases to tier 3
level due to the vertical nature of many of these suppliers.
KMD Brands is also a signatory to the International
Accord and Bangladesh Safety Program. All tier 1 factories
manufacturing our branded products participate in the
inspection, remediation and safety training programs.
Brazil
Labour risk in Brazil is significant in relation to
unauthorised subcontracting, freedom of association and
child labour. Accelerating urbanisation has also resulted in
an increase in modern slavery in the textile industry.
The Brazil region is a signatory to the ABVTEX
certification association. Rip Curl’s global office in Brazil
works with factories that are audited for social and
environmental performance under this scheme and
subject to the KMD Brands Code of Conduct.
KMD Brands Modern Slavery Statement 20246
Mexico
Modern slavery in Mexico is driven by inequality and
exacerbated by the impact of conflict (Walk Free,
The Global Slavery Index 2023). Mass migration
from Mexico to the United States fuels forced labour.
Migrants also flee other countries and congregate
on the border between the United States and
Mexico. Mexico has enacted legislation that prohibits
companies from importing goods produced through
forced labour, though needs to further strengthen
legislation to tackle modern slavery in supply chains.
LOW-RISK GEOGRAPHIC REGIONS
Rip Curl and Kathmandu work with trusted, long-term
supplier partners in Australia, France, Italy, Nepal, New
Zealand and Spain. Each have undergone third-party or
internal social assessments and have been classified as
low-risk.
2.2 PRODUCT RISK
Materials commonly used in KMD Brands
apparel, footwear and equipment products
include cotton, down, leather and neoprene.
Large amounts of the world's cotton are produced in
countries with a high risk of forced labour, including
Uzbekistan, Turkmenistan and the Xinjiang region of
China. The Xinjiang region is the source of over 80%
of China’s cotton which is used in supply chains in
China or processed into yarn or textiles and exported
to other countries for incorporation into finished
goods. The forced labour risk for most companies is
from the cotton, yarn, or textiles produced in Xinjiang
and then incorporated into finished goods in other
parts of China or Asia (FLA, Issues Brief, 2020).
Forced labour has also been found in leather tanneries
in China, Indonesia and Vietnam, as well as in the rubber
plantations of Indonesia and Thailand (Know The Chain,
Labor Risks in Leather Supply Chains, 2017).
A very small amount of metal is used in outdoor apparel
and equipment. Aluminium, titanium and steel are
sourced to produce some hard goods and accessories
products. As of 2024, there are forced labour concerns
associated with the production of aluminium in China (US
Department of Labor). There is also no known child labour
or forced labour concerns associated with natural fibres
like merino wool and duck/goose down (US Department
of Lab o r).
The core ingredient in traditional wetsuits is oil or
limestone-based neoprene foam. The former involves
oil drilling and the latter limestone mining. Limestone
neoprene and natural rubber foam are used in Rip Curl
wetsuits. Extractive industries are at risk of modern
slavery, in part due to driving migration that causes higher
vulnerability to severe exploitation (Walk Free, The Global
Slavery Index 2023).
2.3 SECTOR RISK
Within the apparel and footwear industries, the following
factors have a major influence on modern slavery risk:
Unauthorised subcontracting
The risk of involvement in modern slavery through the
supply chain increases as supplier subcontracting grows.
Unauthorised subcontracting is common within the
apparel industry in China, Vietnam and Indonesia.
Reliance upon temporary or migrant workers
Workforces with high numbers of temporary, seasonal,
or agency workers contribute to heightened worker
vulnerability. These sectors also tend to depend on labour
recruiters for their recruitment activities. This creates an
additional layer of separation between employers and
workers, leaving workers exposed to deceptive or coercive
recruitment practices.
Complex and fast-paced supply chains
Rapid turnaround times for production and the necessary
flexibility to produce goods affected by shifting demand
can drive worker exploitation. This may include long
working hours and forced overtime during periods of high
consumer demand.
There are increased risks associated with the difficulty
of managing and monitoring a complex global supply
chain. Workers are often isolated due to physical, cultural,
technological and/or strategic isolation. They may have
poor access to external grievance channels due to the
difficulty faced by customers in gaining transparency of
upstream operating environments.
7
Reliance upon low-skilled or unskilled labour
Unskilled work is typically low-paying and undervalued.
These jobs often employ particularly vulnerable workers
and marginalised individuals such as migrants and
minorities. Unskilled or illiterate workers are also typically
less aware of their rights than more skilled and better
educated workers.
Substandard working and/or living conditions
The fast-paced, price sensitive nature of apparel
production drives worker exposure to poor health and
safety measures, verbal harassment and bullying. Workers
may also be exposed to detrimental synthetic chemicals
that are commonly used in apparel production.
Gender inequality
Within apparel and footwear supply chains, women remain
at particular risk of human rights abuses, including forced
labour and trafficking. Approximately 80% of the world’s
garment workers are women, who may be exposed to
violence, including sexual harassment and abuse.
2.4 TIER 2+ MANUFACTURING,
PROCESSING AND PRODUCTION
Our visibility of supplier operating environments beyond
tier 1 varies by brand, product category and supplier
structure. For example, we have good visibility within our
wetsuit supply chain, but significantly less understanding
of modern slavery risks in the production of materials
we do not develop directly with input suppliers, such as
lighting or surf hardware. The risks of modern slavery
are more significant in areas where we lack a direct
contractual relationship with input suppliers or have
limited visibility. Our current monitoring and capacity
building programs do not extend to all tier 2 suppliers,
nor the input suppliers we are yet to trace. We recognise
this increased risk, particularly in locations or industries
characterised by poor labour practices.
In FY24, we became aware of alleged indicators of
forced labour within two fabric mills and one dyeing
facility connected to the KMD Brands supply chain in
Taiwan. These included the payment of recruitment fees,
threatened repatriation and restriction of movement. This
investigation is ongoing, and we are collaborating closely
with other brands and suppliers on investigation and
remediation of these findings.
KMD Brands has limited visibility of raw material suppliers
and our monitoring and capacity building programs
extend to a few key producers. We are yet to reliably
assess modern slavery risks at raw materials level across
the Group and recognise that raw materials suppliers
present significant modern slavery risk.
2.5 LICENSED PRODUCTS
Rip Curl has several external licensees, some of
whom source all product from existing Rip Curl
approved and monitored suppliers, while others
have a license to produce independently. Rip Curl
licensees are required to manufacture to an agreed
standard, which includes compliance with the KMD
Brands Code of Conduct and third-party social
assessments. Independent manufacturing presents a
risk due to a lack of clear visibility and transparency
of factories used, as well as poor compliance with
evidence requirements by some external licensees.
The licensee for Malaysia and Singapore currently sources
all product from existing Rip Curl approved and monitored
suppliers. Licensees operating in Argentina, Chile, Peru,
South Africa and Fiji are authorised to both produce
independently and sell product locally. These facilities
are required to manufacture to an agreed standard under
the license terms. The risk profile of these facilities varies
based on location, agreement to the KMD Brands Code of
Conduct, third-party oversight of operating conditions and
length of supplier relationship.
We consider production in Argentina, Fiji and South Africa
to present low risk due to third-party oversight, high rates
of KMD Brands Code of Conduct agreement and long-
term relationships. The licensee for South Africa also
manufactures products in China in an existing, approved
Rip Curl factory.
Production in Chile and Peru is of higher risk due to lack of
robust third-party social assessments and higher inherent
supply chain risk driven by working hours and wage
concerns in these regions. The licensees for Chile and
Peru manufacture products both locally and in China; 60%
of these facilities have agreed to the KMD Brands Code of
Conduct and 50% have provided evidence of third-party
social monitoring.
Global merchandise licensees in eyewear, watch
bands, phone cases and auto accessories are required
to manufacture to agreed social and environmental
KMD Brands Modern Slavery Statement 20248
standards. We have full visibility of tier 1 production of
auto accessories and all facilities have agreed to the KMD
Brands Code of Conduct and provided evidence of third-
party social monitoring.
2.6 THIRD-PARTY PRODUCTS SOLD BY
KMD BRANDS
Rip Curl, Kathmandu and Ozmosis retail stores sell
products from third-party brands. KMD Brands does
not currently conduct formal monitoring of third-party
brands with modern slavery legislation, though social and
environmental requirements are a condition of contracts
signed in FY24.
2.7 INDIRECT PRODUCTS AND SERVICES
KMD Brands procures non-inventory products and
services across the following categories:
- Marketing and advertising;
- Information technology;
- Freight and logistics;
- Retail operations (store fitout and
consumables, postage, facilities management,
loss prevention and utilities); and
- Support operations (professional services
and office supplies).
We have identified the following categories as presenting
medium or high-risk:
- Retail operations, focusing on store fitout, facilities
management and loss prevention; and
- Supply chain, focusing on freight and logistics.
KMD Brands engages suppliers to provide fitout,
maintenance and security across our extensive network of
retail stores. Although many of our indirect suppliers are
located in low-risk regions, unauthorised subcontracting,
short-term engagements, underpayment of wages and
poor occupational health and safety are features of these
industries. There is also a high reliance on migrant workers
within these sectors, who may be vulnerable to worker
exploitation due to visa insecurity, non-standard operating
hours and language barriers.
We also use third-party international shipping providers.
Worker isolation, substandard living conditions, poor
access to grievance mechanisms and restriction of
movement are risk factors in this sector. Workers may
also be required to pay large recruitment fees to obtain
employment.
2.8 OPERATIONAL RISKS
KMD Brands operates in accordance with robust
legislation in relation to employment rights and human
rights in both Australia and New Zealand and is required
by law to maintain internal best practices, systems
and policies that support individual employees as well
as facilitate protected disclosures. These policies and
practices apply to activities globally across the Group.
Group level controls in relation to recruitment, onboarding
and support of international employees are managed by
the human resources team in the relevant regions. The
KMD Brands Code of Ethics guides our behaviour and
decision making.
9
3. Actions taken by KMD Brands to assess and
address the risks of modern slavery
3.1 GOVERNANCE
As a Group, we are consistently reviewing the regulatory
landscape to inform and improve our due diligence
program. Our program is guided by the United Nations
Guiding Principles on Business and Human Rights
(UNGPs), the OECD Guidelines for Multinational
Enterprises Responsible Business Conduct (MNE
Guidelines), current and emerging modern slavery and
human rights due diligence legislation, import bans, and
consumer and investor expectations.
Reporting to the KMD Brands Board on human rights and
modern slavery progress occurs twice per year. The Board
also approves ESG strategy and modern slavery reporting.
KMD Brands Workplace Code of Conduct
KMD Brands requires all suppliers of Rip Curl, Kathmandu
and Oboz branded products to commit to uphold the
KMD Brands Code of Conduct, allow workplace
inspection by approved third parties and to remediate
issues as they arise. The important aspects of our
Code as it applies to modern slavery are transparency,
employment relationship, non-discrimination, harassment
or abuse, forced labour, child labour and freedom of
association and collective bargaining. Suppliers must
agree to comply with all relevant and applicable laws and
regulations of the country in which workers are employed
and to implement the KMD Brands Code of Conduct in
their applicable facilities. Transparency is prioritised in
relation to both owned and subcontracted facilities.
Modern slavery policies, procedures and
internal training
KMD Brands has company policies that address modern
slavery, including a Child and Forced Labour Policy and a
Migrant Labour Policy. New employees are trained in these
policies as part of their orientation. Support office staff
receive annual training aimed at increasing awareness
of modern slavery risks and the KMD Brands policy
framework. In FY24, in-person training was conducted for
over 400 employees across the KMD Brands head office
in Australia, the Rip Curl head offices in Australia and the
United States, the Oboz head office in the United States
and the Kathmandu head office in New Zealand.
Pre-sourcing assessments
KMD Brands has a comprehensive onboarding procedure
for new suppliers which includes a mandatory social
and environmental assessment. Once new suppliers and
factories have been selected, Kathmandu, Rip Curl or
Oboz initiates the onboarding process which introduces
our shared values alongside a Supplier Manual.
3.2 COMMERCIAL PRACTICES
Purchasing of branded products
We understand the impact purchasing practices play on
labour rights abuses within supply chains and that decent
working conditions, increased worker productivity and
long-term business competitiveness are interconnected.
Genuine consultation and engagement with stakeholders
play a key role in our efforts to balance the competitive
manufacturing environment and our social and
environmental expectations.
KMD Brands has a Responsible Purchasing Policy which
includes information on the Group’s commitment to
worker wellbeing and responsible production planning.
In FY24, sourcing teams of all brands received training
in responsible purchasing practices. This training
emphasised timely payment of suppliers, not placing
unreasonable pressure on cost, setting achievable delivery
timelines and requirements for responsible supplier exit.
All brands have clear supplier terms of purchase
that include agreement on detailed payment terms
and process for factory exit. Production planning
is a collaborative process by season that includes
forecasts, mutual agreement for order modifications and
commitment to spreading order volume.
Long-term supplier relationships assist each brand
in understanding and addressing risks of modern
slavery with tier 1 suppliers. Each brand conducts
regular reviews with suppliers, which includes a
detailed social performance component that assists
in identifying risks of modern slavery. In FY23,
all tier 1 suppliers were invited to provide formal
feedback on our commercial terms, purchasing
practices and barriers to social and environmental
improvement. This process will be repeated in FY25.
Purchasing of indirect products and services
Social and environmental criteria are considered as part
of new provider evaluations and requests for proposal for
indirect product and services.
KMD Brands Modern Slavery Statement 202410
Purchasing of third-party products sold by
KMD Brands
Clauses relating to modern slavery and wider human
rights considerations are included in KMD Brands
standard terms for the purchase of goods.
3.3 DUE DILIGENCE CONTROLS:
ASSESSMENT AND MONITORING
KMD Brands has a due diligence program to identify and
assess human rights impacts in operations, supply chains
and business relationships guided by the MNE Guidelines.
The figure below outlines how we monitor compliance
with human rights controls and manage human rights risk.
100% of tier 1 manufacturing suppliers (149) and 52 tier
2 suppliers have been subject to social assessments that
include human rights criteria. 17 were third-party audits
commissioned by KMD Brands, 182 were third-party copy
audits and 2 were conducted internally by KMD Brands.
99% of total audits were conducted by a third-party
auditor. Assessments incorporate information on our own
supplier relationships and their business models, as well as
individual analysis of social and environmental indicators.
Accepted copy audits must meet our quality standards
and verify compliance with the KMD Brands Code of
Conduct and the FLA Workplace Code of Conduct. We
also monitor public reporting on the geographic and
product risk landscape.
We continue to use third-party audits to gain a high-level
overview of social and environmental risk, particularly
in relation to health and safety and compliance with
government requirements. In FY24, we invested
over $20,000 in third-party social assessments
of manufacturing sites. Audits have enabled us to
identify potential modern slavery indicators relating
to underpayment of workers and recruitment fees. We
recognise the limitations of audits in relation to facilitating
long-term improvements and use them as one tool within
our monitoring program. Where we request a third-party
audit, it is stressed to suppliers that our focus is on
transparency and clear expectation of improvement where
required, not tick-the-box compliance. Our commissioned
audits are independent and either announced or semi-
announced. Whilst we support suppliers to address
potential or actual risk where required, if a supplier is
unable to address a critical or major finding, we may
terminate and exit in line with our Responsible Exit Policy.
In FY24, no suppliers were exited for non-compliance.
Governance, transparency and partnerships
4. Non-Compliance,
grievance or Identified
risk management
including resolution
support and verification
1. Pre-sourcing
assessment
2. Supplier contractual
engagement,
including workplace
code of conduct
3. Ongoing monitoring
including third-party
auditing, internal
assessments and
worker surveys
5. Supplier capacity
building, including
training and collaboration
DUE DILIGENCE PROCESS
11
KMD Brands is a signatory to the Social Labor
Convergence Program (SLCP), a multi-stakeholder
initiative facilitating the sharing of comparable, verified
data about supply chain working conditions. As a
signatory, we encourage the use of the SLCP’s Converged
Assessment Framework to eliminate factory audit
duplication and redirect resources to improvement
actions. Where we consider it necessary to commission
an audit, we use LRQA’s full audit tool, which includes an
occupational health and safety review, consultation with
unions and worker representatives and an anonymous
worker survey. To ensure consistency in how KMD Brands’
standards are assessed, formal field instructions are
shared with all auditors. The field instructions provide
guidance on numerous issues including the priority we
place on transparency, worker voice and the participation
of union and/or worker representatives in the opening and
closing meetings during the audit.
From FY24, we have adopted a human rights-based
approach to auditing. Previously, all facilities were audited
using the same tool over the same period, whereas we
now employ a wider range of assessment tools driven by
potential risk to workers. All facilities are assessed within
a 24-month period, however, a low-risk facility may be
assessed internally, whilst a high-risk facility may undergo
a third-party assessment, worker surveys and an internal
visit within the same timeframe. When commissioning
audits, we ensure facilities understand the purpose of the
audit and how audit findings will be managed. This allows
us to ensure that the assessment type is appropriate,
respects supplier progress and that resources are
targeted to addressing critical and major findings as part
of wider capacity building priorities. We seek to work
collaboratively with suppliers to address problems rather
than using our buying power to enforce action.
This year we became aware of alleged labour rights
violations of workers manufacturing materials supplied
to KMD Brands tier 1 factories (detail provided in section
2.4). Prior to this, we tracked the presence of labour
brokers within our tier 1 manufacturing using third-party
audits and supplier disclosures. In response, we are now
extending our migrant workforce and recruitment tracking
across all tiers. In FY24, we also prioritised auditing of tier
2 facilities engaging foreign migrant workers.
In FY24, we invested in advanced supply chain
management software to support social and
environmental risk management and traceability. This
software supports our ability to track performance
improvement, analyse risk trends and increase visibility
beyond tier 1.
We appreciate the need to better understand the causes
of forced labour in supply chains from workers, trade
unions and worker organisations. In FY24, we continued
to prioritise direct engagement with workers. Further
information is available in the Our Partnerships section of
our FY24 Annual Integrated Report.
We rely on relationships and contractual terms with our
tier 1 suppliers to gain visibility of upstream operations.
All suppliers agree to provide input supplier information
and require equivalent social standards of these suppliers.
While we do not require tier 1 suppliers to certify that
materials incorporated into the product comply with
modern slavery legislation, suppliers agree to prohibit
modern slavery within their own supply chains and comply
with labour laws in all countries in which they do business.
In FY24, 158 facilities beyond tier 1 were disclosed via
Open Supply Hub, of which 58% have agreed to the
standards of the KMD Brands Code of Conduct. KMD
Brands prioritises sourcing from input and raw materials
facilities that hold accreditations encompassing social and
environmental criteria including bluesign®, ZDHC, OEKO-
TEX, ISO 14001 and ISO45001, Better Cotton Initiative
(BCI), Responsible Down Standard (RDS), Global Organic
Textile Standard, Organic Content Standard, Global
Recycled Standard, Fair Labor Association and Fair Trade.
Indirect suppliers
In FY24, we developed a Modern Slavery Self-Assessment
Questionnaire (SAQ) for high-risk indirect suppliers. The
questionnaire supports us in engaging with existing
and potential suppliers to understand how they manage
modern slavery risk, including their employment, training
and management practices. This SAQ was trialled with
two high-risk tender projects (solar installation and freight
forwarding) to assess potential suppliers.
Grievance process
KMD Brands supplier agreements require a functioning
grievance procedure at all tier 1 factories and worker
access to KMD Brands confidential channel. Our grievance
channel is displayed on all Codes of Conduct and business
cards provided to workers during factory visits. In China
and Vietnam, there are additional channels in the form
of links to the social media platforms used by workers. A
WeChat (China) or Zalo (Vietnam) QR code is included on
all Supplier Codes of Conduct displayed in tier 1 factories
KMD Brands Modern Slavery Statement 202412
in these countries. Workers are also able to raise concerns
during confidential interviews conducted during on-site
social assessments.
In FY24, we published a revised KMD Brands Grievance
Handling Procedure for Supply Chains in line with the
UNGPs. We are currently investigating one complaint
raised through our external grievance mechanism relating
to underpayment of insurance benefits. We also published
a Factory Guidance Document on Grievance Mechanisms
in Supply Chains to support suppliers in ensuring the
effectiveness of internal grievance mechanisms. This
Guidance was accompanied by two implementation
training sessions for suppliers in China.
Worker voice
We use worker feedback to uncover practices such
as substandard working conditions or underpayment.
Although not classified as modern slavery, these
practices may be illegal and present in some situations
of modern slavery.
In FY24, we extended our use of worker surveys to both
tier 1 and 2 facilities for Rip Curl and Kathmandu in
China. We also conducted secondary surveys to assess
the effectiveness of corrective actions by Kathmandu
suppliers in Vietnam. Further information is included
in our FY24 Annual Integrated Report. KMD Brands
utilised technology developed by New Zealand company,
AskYourTeam, to offer a real-time survey to workers
relating to worker wellbeing and engagement. 5,947 office
and production workers completed the survey, 654 of
whom work in tier 2 facilities. Workers provided feedback
on a range of topics, from human rights to workplace
health and safety, remuneration to worker aspirations. We
identified risks relating to inadequate remuneration and
ineffective grievance mechanisms and are supporting
suppliers to address these concerns.
In response to feedback at one facility in China, we
engaged a China-based employee relations consultancy
to support our supplier to address worker concerns.
The consultancy supported our supplier to identify the
root causes of worker concerns and developed tailored
training to address the gaps. We will continue to monitor
the impact of the corrective actions taken, including via
follow-up worker surveys later in calendar year 2024.
Transparency
Making our own supply chain more transparent is a
central part of our due diligence program. We publish
three tiers of supply chain data via the Open Supply Hub.
Open Supply Hub is an open-source, neutral and publicly
accessible database. Every tier 1 facility making KMD
Brands product can be identified and located on a global
map, where it is accessible to unions, workers
and consumers.
In FY24, this public disclosure allowed two civil society
organisations to contact us about potential issues in our
supply chain. This enabled us to join with other brands
and stakeholders to remediate collaboratively, rather than
having to reactively engage after a public report had
been released. This not only assisted KMD Brands to help
resolve individual issues, but to better understand systemic
risks in our supply chain and join with other organisations
to support solutions. One example of this was a joint letter
to the Taiwan government advocating for action to better
protect the rights of foreign migrant workers.
3.4 PARTNERSHIPS
KMD Brands focuses on building long-term, mutually
respectful relationships with suppliers that share our
values. These relationships are supported by investing in
training and education, providing support for remediation,
engaging in research and taking the time to understand
suppliers’ strengths and challenges in relation to human
rights risk.
Training
In FY24, KMD Brands hosted two in-person training
workshops for 35 suppliers located in China. These
workshops were delivered by a China-based consultancy
and were designed to support suppliers to develop
policies and practices to prevent discrimination in the
workplace and promote gender equality.
KMD Brands also engaged Awaj Foundation, a grassroots
labour rights organisation in Bangladesh, to deliver a
women’s empowerment program to 250 female workers
employed by a long-term Rip Curl supplier. Awaj
Foundation is delivering training for workers on financial
management, health, leadership, rights awareness
and negotiation.
We also engaged 14 suppliers in Vietnam and Indonesia to
understand their learning needs and priorities to improve
future training support.
13
Tracking remediation
KMD Brands monitors and supports suppliers to
remediate critical and major findings from factory
assessments. The Corrective Action Plan (CAP) process
is a collaborative process between the facility, the auditor,
and the relevant brand. Addressing findings via the CAP
process is an expectation that is shared with suppliers
during the onboarding and audit process. We recognise
the limitations of the CAP process in improving working
conditions and require an additional root cause analysis
for all critical issues. Conducting a root cause analysis
is the responsibility of the factory, with the CAP then
reviewed by the KMD Brands ESG team. When needed,
the auditors work with the KMD Brands ESG team to
provide guidance documents on root cause analysis as
part of their improvement services for suppliers.
KMD Brands includes high-level remediation reports in
our Annual Integrated Report with reference to the Global
Reporting Initiative (GRI) Universal Standards. Please refer
to page 44 of our Annual Integrated Report for discussion
of actual or potential negative impacts identified in FY24
and how these were addressed.
Empowering workers to protect their own rights
In FY24, KMD Brands renewed its commitment as a
signatory to the International Accord. The Accord is
focused on ensuring workplace safety for garment workers
in Bangladesh and Pakistan. Unlike traditional multi-
stakeholder initiatives, the terms of the Accord are legally
binding between brands and trade unions. As a signatory,
we are supporting the active engagement of workers
through training that includes awareness of rights and
an accessible complaints mechanism. The factories we
source from in Bangladesh are frequently inspected under
the Accord initiative and covered by elected participatory
committees consisting of workers and managers.
To support rights to exercise freedom of association and
collective bargaining, KMD Brands focuses on supplier
relationships and emphasises a zero-tolerance approach
to violation of the right to exercise freedom of association.
Collaboration
KMD Brands is engaged in several multi-stakeholder
initiatives that are valuable in generating ESG-
related dialogue and supporting collaboration
on remediation. We also responded in full to
enquiries received from the Business and Human
Rights Resource Centre and Transparentum.
External collaboration in FY24 included:
THE INTERNATIONAL ACCORD
The International Accord is a set of legally binding
agreements between global unions, IndustriALL
and UNI Global Union, and signatory brands and
retailers with the purpose of ensuring health and
safety within garment factories. The Accord covers
over 1,600 factories in Bangladesh and provides an
independent enforcement body that manages factory
inspections and upgrades, and engages workers to
help identify instances of workplace violations.
FAIR LABOR ASSOCIATION
KMD Brands is an accredited member of the Fair Labor
Association, a collaborative effort of socially responsible
companies, colleges and universities and civil society
organisations. We use FLA tools and resources including
the FLA Fair Compensation Dashboard and independent
assessments within our supply chain. The FLA also
provides guidance on how to address modern slavery
risks, including responsible recruitment guidance,
benchmarks of best practice and forced labour indicators.
In FY24, KMD Brands worked with the FLA to
investigate labour risks in Vietnam and joined
other FLA members as signatory to a letter to
the government of Bangladesh promoting an
increased minimum wage for apparel workers.
CASCALE (formerly the Sustainable Apparel Coalition)
KMD Brands is a member of Cascale, an alliance of
apparel, footwear and textile companies working together
to further sustainable production. Our membership
requires a commitment to supply chain social and
environmental monitoring, transparency, sharing best
practice and making meaningful improvements. Our
progress is assessed each year, both by Cascale and via
the Brand Retail Module.
KMD Brands Modern Slavery Statement 202414
4. How KMD Brands assesses the effectiveness of
our actions
Rip Curl, Kathmandu, Oboz and Onsmooth Thai are
all certified B Corporations. Our approach to ESG and
associated actions are independently assessed by
the relevant B Lab offices responsible for certification.
KMD Brands practices relating to forced labour, social
monitoring and compliance are also annually assessed
and independently monitored by the FLA.
The effectiveness of our program and quality of disclosure
is also assessed by civil society organisations, including as
part of the Baptist World Aid Ethical Fashion Report, the
Textile Exchange Material Change Index and the Fashion
Revolution Transparency Index.
We have a strong commitment to continuous
improvement. This is reflected in the linking of KMD
Brands debt finance facilities to our performance
against key sustainability indicators including supply
chain monitoring. Our broader progress will also be
independently verified through the Higg Brand Retail
Module assessment in FY25. We continue to work
with Oxfam Australia and Aotearoa in its independent
assessment of our performance relating to our
commitment to living wages, supply chain transparency,
gender policy and freedom of association.
We also review our processes and performance internally,
including via reporting to the Board on key metrics,
reviewing monitoring trends and analysing supplier and
employee feedback on KMD Brands monitoring and
training. Metrics relating to our internal assessment of
accountability, transparency and worker engagement can
be accessed in the Our Partnerships section of our Annual
Integrated Report.
15
5. Consultation
KMD Brands ESG team members, sourcing teams and
leaders from all brands were consulted throughout the
creation of this statement. ESG is a Group function at
KMD Brands. There are team members based in Torquay
(Rip Curl head office), Melbourne (KMD Brands office),
Christchurch (Kathmandu head office) and Bozeman
(Oboz head office). There is strong consultation at
brand level to ensure strategic alignment and effective
implementation. Our approach to human rights due
diligence is defined at a Group level, drawing on the
expertise and experience of brand level employees.
The KMD Brands, Kathmandu, Rip Curl and Oboz teams
collaborate extensively on our Annual Integrated Report
and B Corp certification, which necessitates consultation
around our ESG initiatives, including our shared response
to modern slavery.
6. Looking ahead
KMD Brands remains committed to action that reduces
the risk of vulnerability to modern slavery. In FY25, we will
continue to monitor the effectiveness of our due diligence
program and emphasise the integration of human rights
risk into Group-wide risk management.
KMD Brands will continue to prioritise responsible
purchasing practices that support positive working
conditions such as on-time payment to suppliers
and mutually agreed ordering patterns. In FY25, we
will publish our revised KMD Brands Responsible
Purchasing Policy and assess the effectiveness
of associated training through formal supplier
feedback on our purchasing practices.
Our participation in the FLA initiative remains important
and we will continue to collaborate in advocating to
address the structural challenges that enable modern
slavery. We recognise the role living wages play in
mitigating modern slavery risk and intend to publish a
report on the status of living wages in our supply chain in
FY25. This analysis will be supported by the FLA’s living
wage resources.
Direct engagement with workers remains a key priority
and we will continue our investment in worker voice tools,
rights-awareness training and supporting suppliers to
address worker feedback. We will also continue to exert
meaningful pressure to improve working standards, whilst
respecting supplier perspectives.
KMD Brands Modern Slavery Statement 202416
MODERN SLAVERY ACT 2018
(AUSTRALIA)
REFERENCE IN THIS
S TAT E M E N T
MODERN SLAVERY ACT 2023
(CANADA)
REFERENCE IN THIS
S TAT E M E N T
MODERN SLAVERY ACT 2015
(UK)
REFERENCE IN THIS
S TAT E M E N T
CALIFORNIA TRANSPARENCY IN SUPPLY
CHAINS ACT 2010
REFERENCE IN THIS
S TAT E M E N T
Identify the reporting entityPage 1Describe the organisation’s structures,
activities, and supply chains
Section 1,
page 4
Describe the organisation’s structure,
its business, and its supply chains
Section 1,
page 4
Verification of product supply chainSection 1,
page 4
Describe the reporting entity’s structure,
operations, and supply chains
Section 1,
page 4
Describe the parts of its business
and supply chains that carry a risk of
forced labour or child labour being
used and the steps it has taken to
assess and manage that risk
Sections 2 and 3,
pages 5-14
Parts of the organisation's business
and supply chains where there is a
risk of slavery and human trafficking
taking place, and the steps it has taken
to assess and manage that risk
Due diligence controls, including
grievance mechanisms
Sections 2 and 3,
pages 5-14
Describe whether the reporting
entity provides company employees
and management, who have direct
responsibility for supply chain
management, training on human
trafficking and slavery, particularly
with respect to mitigating risks within
the supply chains of products
Modern slavery policies,
procedures and internal
training, page 10
Describe the risks of modern
slavery practices in the operations
and supply chains of the reporting
entity, and any entities that the
reporting entity owns or controls
Section 2,
pages 5-9
Describe any measures taken to remediate
any forced labour or child labour and any
measures taken to remediate the loss of
income to the most vulnerable families
that results from any measure taken to
eliminate the use of forced labour or child
labour in its activities and supply chains
Section 3,
pages 10-14
Key performance indicators to measure
the effectiveness of steps being taken
Section 4,
page 15
Describe whether the reporting entity has
required direct suppliers to certify that
materials incorporated into the product
comply with the laws regarding slavery
and human trafficking of the country or
countries in which they are doing business
Section 3.3,
page 12
Describe the actions taken by the
reporting entity and any entity that
the reporting entity owns or controls,
to assess and address those risks
Section 3,
pages 10-14
Describe how the entity assesses its
effectiveness in ensuring that forced
labour and child labour are not being
used in its business and supply chains
Section 4,
page 15
Training on modern slavery and trafficking
Policies relating to slavery
and human trafficking
Modern slavery policies,
procedures and internal
training, page 10
Describe audits of suppliers to evaluate
their compliance with company
standards for trafficking and slavery
Section 3.3,
page 11-13
Describe how the reporting entity
assesses the effectiveness of
such actions
Section 4,
page 15
An entity may comply with the
reporting requirements by providing
a report in respect of the entity; or
by being party to a joint report in
respect of more than one entity
Page 1;
Section 5,
page 16
Internal accountability standards and
procedures for employees or contractors
failing to meet company standards
regarding slavery and trafficking
Modern slavery policies,
procedures and internal
training, page 10
Describe the process of consultation
with any entities the reporting entity
owns or controls or is issuing a joint
modern slavery statement with
Section 5,
page 16
Describe its policies and its due
diligence processes in relation to
forced labour and child labour
Section 3,
pages 10-14
The following table identifies where each reporting criterion is disclosed within this Statement.
Appendix
How this statement addresses the reporting criteria
KMD Brands Modern Slavery Statement 20241718
KMDBrands.com
---
GRI & SASB Index
2024
1
Statement of Use: KMD Brands Limited has reported the information cited in this GRI content index for the financial
year 1 August 2023 to 31 July 2024 with reference to the GRI Standards.
The 2024 reporting suite referenced in this GRI Index can be accessed by visiting:
kmdbrands.com/reports
Contact point: companysecretary@kmdbrands.com
Published: 25 September 2024
GRI Index
GRI REFDESCRIPTIONDOCUMENTREFERENCEPAG E #
THE ORGANISATION AND ITS REPORTING PRACTICES
2-1Organisational detailsAnnual Integrated ReportOverview – Our group, Our brands,
Global footprint
Additional Disclosures – Directory
P. 1-7
P. 1 19
2-2Entities included in
the organisation's
sustainability reporting
Annual Integrated ReportOverview – About KMD Brands
Financial Report – Section 5:
Group Structure
P. 1
P. 10 0
2-3Reporting period, frequency
and contact point
Annual Integrated ReportRefer to statement of
use above
2-4Restatements of informationAnnual Integrated ReportCreating Value – Our environmentP. 5 5
2-5External assuranceAnnual Integrated ReportOverview – About this reportP. Inside cover
ACTIVITIES AND WORKERS
2-6Activities, value chain and
other business relationships
Annual Integrated ReportCreating Value – How we create value
Financial Report – Section 1:
Basis of Preparation
P. 26-27
P. 6 6 - 67
2-7Employees GRI & SASB IndexTables 1 and 2P. 5
2-8Workers who are not employeesInformation unavailable/incomplete
GOVERNANCE
2-9Governance structure
and composition
Annual Integrated Report
Corporate Governance Statement
Overview – Our board and executive team
Principle 2
P. 1 2-13
P. 2- 3
2-10Nomination and selection of
the highest governance body
Corporate Governance Statement Principle 2P. 3
2-11Chair of the highest
governance body
Corporate Governance Statement Principle 2P. 3
2-12Role of the highest governance
body in overseeing the
management of impacts
Annual Integrated Report
Annual Integrated Report
Corporate Governance Statement
Overview – Our board and executive team
Creating Value – Materiality approach
Principle 3
P. 1 2-13
P. 2 2
P. 6 -7
2-13Delegation of responsibility
for managing impacts
Corporate Governance Statement Principle 2P. 2- 3
2-14Role of the highest governance
body in sustainability reporting
Annual Integrated ReportCreating Value – Our material issuesP. 24-25
2-15Conflicts of interestCorporate Governance Statement Principle 1P. 1
2-16Communication of
critical concerns
Corporate Governance Statement Principle 1P. 2
2-17Collective knowledge of the
highest governance body
Corporate Governance Statement Principle 2P. 4
2-18Evaluation of the performance
of the highest governance body
Corporate Governance Statement Principle 2P. 5
2-19Remuneration policiesCorporate Governance Statement Principle 5P. 9
2-20Process to determine
remuneration
Corporate Governance Statement Principle 5P. 9 -1 1
2-21Annual total compensation ratioCorporate Governance Statement Principle 5P. 1 1
KMD Brands GRI & SASB Index 20242
GRI REFDESCRIPTIONDOCUMENTREFERENCEPAG E #
STRATEGY, POLICIES AND PRACTICES
2-22Statement on sustainable
development strategy
Annual Integrated ReportCreating Value – Our strategyP. 18 -21
2-23Policy commitmentsAnnual Integrated ReportOverview – Governance at KMD BrandsP. 14
2-24Embedding policy
commitments
Annual Integrated ReportOverview – Governance at KMD BrandsP. 14
2-25Processes to remediate
negative impacts
Annual Integrated ReportCreating Value – Our partnershipsP. 42
2-26Mechanisms for seeking
advice and raising concerns
Corporate Governance Statement Principle 1P. 2
2-27Compliance with laws
and regulations
Annual Integrated ReportCreating Value – Our fundingP. 57
2-28Membership associationsAnnual Integrated Report Creating Value – Our partnerships
Additional Disclosures - Our partners
P. 4 5 - 4 6
P. 120 - 127
STAKEHOLDER ENGAGEMENT
2-29Approach to stakeholder
engagement
Annual Integrated ReportCreating Value – Materiality approachP. 2 2
2-30Collective bargaining
agreements
N/A
MATERIAL TOPICS
3-1Process to determine
material topics
Annual Integrated ReportCreating Value – Materiality approachP. 2 2
3-2List of material topics Annual Integrated ReportCreating Value – Our material issues P. 24-25
3-3Management of material topicsAnnual Integrated ReportRefer to sections referenced within each
material topic index
GRI 205: ANTI-CORRUPTION
GRI 33-3 Management of
material topics
Corporate Governance Statement Principle 1 P. 1
205-2Communication and training
about anti-corruption
policies and procedures
Corporate Governance Statement Principle 1P. 1
GRI 306: WASTE
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our environment
Creating Value – Our creative power
P. 4 8 - 5 5
P. 28 - 31
306-1Waste generation and
significant waste-related
impacts for the organisation
Annual Integrated ReportCreating Value – Our environmentP. 5 3
306-2Management of significant
waste-related impacts
Annual Integrated ReportCreating Value – Our creative power
Creating Value – Our environment
P. 31
P. 5 3
306-3Waste generatedAnnual Integrated ReportCreating Value – Our environmentP. 5 5
306-4Waste diverted from disposalAnnual Integrated ReportCreating Value – Our environmentP. 5 5
306-5Waste directed to disposalAnnual Integrated ReportCreating Value – Our environmentP. 5 5
GRI 308: SUPPLIER ENVIRONMENTAL ASSESMENT
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our environmentP. 4 8 - 5 5
308-1New suppliers that
were screened using
environmental criteria
Annual Integrated ReportCreating Value – Our environmentP. 52
3
GRI REFDESCRIPTIONDOCUMENTREFERENCEPAG E #
308-2Negative environmental
impacts in the supply
chain and actions taken
Annual Integrated ReportCreating Value – Our environmentP. 52
GRI 401: EMPLOYMENT
GRI 33-3 Management of
material topics
GRI & SASB IndexTa b l e s 1- 5P. 5 -7
401-1New employee hires and
employee turn over
GRI & SASB IndexTables 1-3 – Employee DataP. 5 - 6
401-2Benefits provided to full-
time employees that are
not provided to temporary
or part-time employees
GRI & SASB IndexTable 4 – Employee BenefitsP. 6
401-3Parental leaveGRI & SASB IndexTable 5 – Parental LeaveP. 7
GRI 403: OCCUPATIONAL HEALTH AND SAFETY
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our peopleP. 3 6 - 41
403-1Occupational health and
safety management system
Annual Integrated ReportCreating Value – Our peopleP. 4 0
403-2Hazard identification,
risk assessment, and
incident investigation
Annual Integrated ReportCreating Value – Our peopleP. 4 0
403-4Worker participation,
consultation, and
communication on
occupational health and safety
Annual Integrated ReportCreating Value – Our peopleP. 4 0
403-5Worker training on occupational
health and safety
Annual Integrated ReportCreating Value – Our peopleP. 4 0
403-6Promotion of worker healthAnnual Integrated ReportCreating Value – Our peopleP. 4 0
403-7Prevention and mitigation
of occupational health and
safety impacts directly linked
by business relationships
Annual Integrated ReportCreating Value – Our peopleP. 4 0
403-9Work related injuriesAnnual Integrated ReportCreating Value – Our peopleP. 4 0
403-10Work related ill healthAnnual Integrated ReportCreating Value – Our peopleP. 4 0
GRI 404: TRAINING AND EDUCATION
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our peopleP. 3 6 - 41
404-1Average hours of training
per year per employee
Annual Integrated ReportCreating Value – Our peopleP. 3 6
404-2Programmes for upgrading
employee skills and transition
assistance programmes
Annual Integrated ReportCreating Value – Our peopleP. 3 6
404-3Percentage of employees
receiving regular
performance and career
development reviews
Annual Integrated ReportCreating Value – Our peopleP. 3 8
KMD Brands GRI & SASB Index 20244
GRI REFDESCRIPTIONDOCUMENTREFERENCEPAG E #
GRI 405: DIVERSITY AND EQUAL OPPORTUNITY
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our peopleP. 3 6 - 41
405-1Diversity of governance
bodies and employees
Annual Integrated ReportCreating Value – Our peopleP. 3 9
GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our partnershipsP. 42- 4 8
407-1Operations and suppliers in
which the right to freedom
of association and collective
bargaining may be at risk
Annual Integrated ReportCreating Value – Our partnershipsP. 4 4
GRI 408: CHILD LABOUR
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our partnershipsP. 42- 4 8
408-1Operations and suppliers
at significant risk for
incidents of child labour
Annual Integrated ReportCreating Value – Our partnershipsP. 4 4
GRI 409: FORCED OR COMPULSORY LABOUR
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our partnershipsP. 42- 4 8
409-1Operations and suppliers
considered to have significant
risk for incidents of forced
or compulsory labour
Annual Integrated ReportCreating Value – Our partnershipsP. 4 4
GRI 414: SUPPLIER SOCIAL ASSESSMENT
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our partnershipsP. 42- 4 8
414-1New suppliers that were
screened using social criteria
Annual Integrated ReportCreating Value – Our partnershipsP. 4 4
414-2Negative social impacts in the
supply chain and actions taken
Annual Integrated ReportCreating Value – Our partnershipsP. 4 4
GRI 416: CUSTOMER HEALTH AND SAFETY
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our peopleP. 3 6 - 41
416-2Incidents of non-compliance
concerning the health
and safety impacts of
products and service
Annual Integrated ReportCreating Value – Our peopleP. 4 0
GRI 418: CUSTOMER PRIVACY
GRI 33-3 Management of
material topics
Annual Integrated ReportCreating Value – Our peopleP. 3 6 - 41
418-1Substantiated complaints
concerning breaches of
customer privacy and
losses of customer data
Annual Integrated ReportCreating Value – Our peopleP. 4 0
5
TABLE 2: EMPLOYEE DATA BY GENDER
FEMALEMALEOTHERUNDISCLOSEDTOTAL
TOTA L2,9851,6817154,688
BY EMPLOYMENT TYPE
Full-time1,239795342,041
Part-time59128104876
Casual1,155605471 ,771
BY CONTRACT TYPE
Permanent1 ,7471,034382,792
Te m p o r a r y834200125
Non-guaranteed hours1,155605471 ,771
NEW HIRES
Number1,360787652,158
Rate45%46%73%73%45%
TURNOVER
Number1,3597956112,171
Rate45%46%113%113%46%
TABLE 1: EMPLOYEE DATA BY REGION
AUSNZTHAIUSAEUROTHERTOTAL
TOTA L2,7566214373962861924,688
BY EMPLOYMENT TYPE
Full-time6952994371872411822,041
Part-time3542610209439876
Casual1 ,7076100211,771
BY CONTRACT TYPE
Permanent1,0415574373702151722,792
Te m p o r a r y830266919125
Non-guaranteed hours1 ,7076100211,771
GENDER
Female1 ,78 4398339220158862,985
Male955218981761281061,681
Other175000022
NEW HIRES
Number1,42427624253123582,158
Rate51%43%5%61%44%30%45%
TURNOVER
Number1,39830328296114322,171
Rate50%47 %6%72%41%17 %46%
KMD Brands GRI & SASB Index 20246
TABLE 3: EMPLOYEE DATA BY AGE
<3030-5050+TOTAL
TOTA L2,6741,6483664,688
BY EMPLOYMENT TYPE
Full-time6411,1742262,041
Part-time55823880876
Casual1,475236601 ,771
BY CONTRACT TYPE
Permanent1,1011,3883032,792
Te m p o r a r y98243125
Non-guaranteed hours1,475236601 ,771
BY LEVEL (%)
Group Executive0%78%22%100%
Brand Executive0%67%33%100%
Management25%61%13%100%
Non-Management62%31%7%100%
NEW HIRES
Number1 ,710381672,158
Rate62%23%19%45%
TURNOVER
Number1,620452992,171
Rate59%27%28%46%
TABLE 4: EMPLOYMENT BENEFITS PROVIDED TO PERMANENT EMPLOYEES BUT NOT PROVIDED TO CASUAL EMPLOYEES
BENEFIT TYPEBRAND / REGION BENEFIT APPLICABLE TO
Life insuranceKMD Brands - NZ head office, North America
Kathmandu - NZ head office, DC & Store Managers
Rip Curl - North America
OBOZ - $10,000 per employee
Health care/InsuranceKMD Brands - NZ head office, North America
Kathmandu - NZ head office, DC & Store Managers
Rip Curl - North America, Indonesia & Brazil employees
OBOZ - 100% for medical, dental and vision care for employees & 50% for dependents
Disability and invalidity coverageKMD Brands, Rip Curl - Europe, USA & Indonesia employees
OBOZ - Short-term disability cover
Parental leaveAll Brands - As per Government requirements
KMD Brands, Kathmandu, Rip Curl, Ozmosis - Australia, New Zealand, 14 weeks paid primary carers
leave, 2 weeks leave for the partner of a primary carer
Retirement provisionKMD Brands, Kathmandu, Rip Curl - As per Government requirements
OBOZ - Company-sponsored 401(k) Plan offered to eligible employees
Others - to eligible employeesKMD Brands, Kathmandu , Rip Curl - Product allowance & discounts, Flu vaccine, EAP, Super salary
sacrifice option, phone/car allowances
Rip Curl - rice allowance (Onsmooth), social security
OBOZ - product allowance & discounts, EAP, up to 16 hours paid time off for volunteering
7
TABLE 5: PARENTAL LEAVE
FEMALEMALEOTHERUNDISCLOSEDTOTAL
Number of employees by gender who
were entitled to parental leave
2,0231,095483,130
Number of employees by gender who took parental leave70160086
Number of employees who returned to work
after parental leave ended by gender
41110052
Number of employees who returned to work after
parental leave ended who were still employed 12
months after their return to work by gender
3720039
Retention rate of employees who returned to
work after parental leave ended by gender
47 %67%N/AN/A48%
We have updated our retention rate calculation methodology therefore figure not directly comparable to prior year
KMD Brands GRI & SASB Index 202489
Sustainability Accounting Standards
Board (SASB) Index
SASB is an independent standards-setting organisation that promotes disclosure of material sustainability information by
companies to their investors. The index below refers to relevant indicators from the following SASB Standards; Consumer
Goods Sector - Apparel, Accessories & Footwear [CG-AA], Multiline and Specialty Retailers and Distributors [CG-MR],
and E-Commerce [CG-EC]. References and hyperlinks provided are to sections within this Report, or to information
available on our websites.
The 2024 reporting suite referenced in this SASB Index can be accessed by visiting:
kmdbrands.com/reports
TOPICACCOUNTING METRICSASB CODECATEGORYUNIT OF MEASURERESPONSE / REFERENCE
Management
of Chemicals
in Products
Discussion of processes to maintain compliance with restricted
substances regulations
CG-AA-250a.1Discussion and Analysisn/aWe maintain compliance and manage risks associated with chemicals in our products through our Restricted
Substances lists. Please refer to links below.
Discussion of processes to assess and manage risks and/or
hazards associated with chemicals in products
CG-AA-250a.2
CG -MR-410a.2
Discussion and Analysisn/ahttps://files.kathmandu.co.nz/pdf/reports-policies/kathmandu_rsl_2023_for_website.pdf
https://www.ripcurl.com/media/productattachments/0/160/Rip_Curl_Restricted_Substances_List-02-09-2022_online.pdf
https://obozfootwear.com/en-gb/oboz_chemical_policy_2022
Environmental
Impacts in the
Supply Chain
Percentage of (1) Tier 1 supplier facilities and (2) supplier
facilities beyond Tier 1 in compliance with wastewater
discharge permits and/or contractual agreements
CG-AA-430a.1 QuantitativePercentage (%)100% of KMD Brands tier 1 suppliers and 58% of traced suppliers beyond tier 1 are accountable to our Code of
Conduct. This Code of Conduct includes requirements around environmental compliance including wastewater permits
or industry standards, and an expectation for suppliers to incorporate environmentally responsible practices.
A copy of the KMD Brands Supplier Code of Conduct is available at: https://www.kmdbrands.com/communities
Percentage of (1) Tier 1 supplier facilities and (2) supplier
facilities beyond Tier 1 that have completed the Sustainable
Apparel Coalition’s Higg Facility Environmental Module (Higg
FEM) assessment or an equivalent environmental
data assessment
CG-AA-430a.2QuantitativePercentage (%)34% of Tier 1 supplier facilities completed verified Higg FEM2023. 43% of traced Tier 2 supplier facilities completed
verified Higg FEM2023. These assessments cover a significant percentage of our total spend with suppliers.
Labour Conditions in
the Supply Chain
Percentage of (1) Tier 1 supplier facilities and (2) supplier
facilities beyond Tier 1 that have been audited to a labour code
of conduct, (3) percentage of total audits conducted by a third-
party auditor
CG-AA-430b.1QuantitativePercentage (%)100% of Tier 1 supplier facilities and 33% of Tier 2 supplier facilities have been audited to the KMD Brands Code of
Conduct. 99% of audits were conducted by a third-party auditor.
Priority non-conformance rate and associated corrective action
rate for suppliers’ labour code of conduct audits
CG-AA-430b.2 QuantitativeRateIn FY24, 8 suppliers were identified as having priority non-conformances. Corrective action plans were agreed upon
with 100% of suppliers. See also page 44 of our FY24 Annual Integrated Report.
Description of the greatest (1) labour and (2) environmental,
health, and safety risks in the supply chain
CG-AA-430b.3Discussion and Analysisn/aModern slavery, labour, health and safety risks are described in our 2024 Modern Slavery Statement.
Raw Material
Sourcing
(1) List of priority raw materials; for each priority raw material:
(2) environmental and/or social factor(s) most likely to threaten
sourcing, (3) discussion on business risk and/or opportunities
associated with environmental and/or social factors, and
(4) management strategy for addressing business risks and
opportunities
CG-AA-440a.3Discussion and Analysisn/aEnvironmental and social risks, at the raw materials level, are assessed within the existing Code of Conduct only when
such suppliers are fully vertical and also manufacture the final product.
These risks are discussed in the following sections of the Annual Integrated Report:
Creating Value – Our partnerships (P. 42-48)
Creating Value – Our environment (P. 48-55)
Please refer also to the 2024 KMD Brands Modern Slavery Statement.
(1) Amount of priority raw materials purchased, by material, and
(2) amount of each priority raw material that is certified to a
third-party environmental and/or social standard, by standard
CG-AA-440a.4QuantitativeMetric tons (t)The amount of priority raw materials, by brand, certified to a third-party environmental and/or social standard, is
reported in the Creating Value – Our environment section of our FY24 Annual Integrated Report (P. 48-55).
KMD Brands GRI & SASB Index 20241011
TOPICACCOUNTING METRICSASB CODECATEGORYUNIT OF MEASURERESPONSE / REFERENCE
Data Privacy &
Advertising Standards
Number of users whose information is used for secondary
purposes
CG-EC-220a.1QuantitativeNumberKMD Brands refrains from using consumer personal information without consent for purposes that do not align with
our established Privacy Policies/Statements.
Description of policies and practices relating to behavioral
advertising and user privacy.
CG-EC-220a.2Discussion and Analysisn/ahttps://help.kathmandu.co.nz/support/solutions/articles/51000164408
https://www.ripcurl.com/au/policies/privacy
https://obozfootwear.com/en-us/privacy-policy
Data SecurityDescription of approach to identifying and addressing data
security risks
CG-MR-230a.1
CG-EC-230a.1
Discussion and Analysisn/aRefer to Creating Value – Our people (P. 36-41) of our FY24 Annual Integrated Report.
(1) Number of data breaches, (2) percentage involving
personally identifiable information (PII), (3) number of
customers affected
CG-MR-230a.2
CG-EC-230a.2
QuantitativeNumber,
Percentage (%)
Refer to Creating Value – Our people (P. 36-41) of our FY24 Annual Integrated Report.
Labour Practices(1) Voluntary and (2) involuntary turnover rate for in-store
employees
CG-MR-310a.2
CG-EC-330a.2
QuantitativeRateOur total turnover rate is 46% for FY24.
Please refer to Table 1-3 of this GRI / SASB Index for more information.
Product Packaging
& Distribution
Discussion of strategies to reduce
the environmental impact of
product delivery
CG -EC-410a.2Discussion and Analysisn/aRefer to Creating Value – Our environment (P.48-55) of our FY24 Annual Integrated Report.
Activity MetricNumber of (1) Tier 1 suppliers and
(2) suppliers beyond Tier 1.
CG-AA-000.AQuantitativeNumberKMD Brands has 149 Tier 1 suppliers and 158 traced Tier 2 suppliers as at 31 July 2024. We are working to trace and
publish the input suppliers of our strategic Tier 1 suppliers in future reporting periods.
Number of: (1) retail locations and
(2) distribution centers
CG-MR-000.AQuantitativeNumberRefer to Overview – Global footprint for a map and number of locations by country (P. 6-7) of our FY24 Annual
Integrated Report.
KMDBrands.com
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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