Capital Markets Day Wednesday 9 September 2015 Dave Forsey CHIEF - - PowerPoint PPT Presentation

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SPORTS DIRECT INTERNATIONAL PLC

Capital Markets Day

Wednesday 9 September 2015

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Dave Forsey

CHIEF EXECUTIVE

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3 SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015

Aintree Glasgow Aintree

Agenda

Welcome and Strategic review Dave Forsey, CEO 12:45 pm Baltics Market Joint Venture Are Altraja and Anti Kalle, Sportland founders 1:00 pm Premium Lifestyle Division Dave Forsey, CEO 1:45 pm Outlook and Q & A Senior Management 2:00 pm Refreshments 2:15 pm Shirebrook Warehouse and Retail tour 2:30 pm Coaches depart for Chesterfield 4:00 pm

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Group Strategy: Review

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• Unrivalled depth and breadth of product choice at

the best available prices

• Continuing roll-out of large format city centre stores
• Targeting c. 60 store openings across Sports Retail

this year

• Continued enhancement and investment in the

existing store portfolio

Aintree

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015

Glasgow Under Armour area: Glasgow

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Group Strategy: Review

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• Leading European partner with third party brands

including Nike, Adidas, Under Armour and Puma

• Phase 3 of development of our Shirebrook

National Distribution Centre nearing completion

Aintree

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015

• Further combined gym and retail opportunities

in the UK

• Successful UK launch of Click and Collect

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6 SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015

Sports Direct Campus, Shirebrook

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Brands: Wholesale

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• Expected A&P spend FY16 between £10 and £20m
• Focus on heritage products within key Group brands
• Further develop business in the Americas and Asia
• Reduction in operating costs from the consolidation of back
• ffice functions

Aintree

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015

Brands: Licensing

• Licensing model still regarded as key driver of Brands Division

growth and profitability

• Focus on growth in the Americas, Middle East and Asia
• Sports Direct Retail licensing continues to grow with 14 stores
• pen in Malaysia and 13 open in the Middle East

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ANTI KALLE (45) Education: BBA Law, University of Tartu 2006 MBA International business, EBS 1995 BBA Economics, Tallinn Technical University 1993 Member of Management Board

• Sportland International Group

Sportland Eesti AS AS Jalajälg, BC Viimsi MTU SÜKK ARE ALTRAJA (44) Education: MBA International business, EBS1995 BBA Engineering, Estonian Agricultural Academy 1993 Member on Management Board - Sportland International Group Sportland Eesti AS AS Jalajälg FC ELVA MTÜ SÜKK Estoninan Football Association

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ESTONIA

ESTONIA

• POPULATION: 1.25M (-10%)
• CAPITAL: TALLINN (0.4M)
• GDP/CAPITA: EUR 12.8K
• AV. INCOME: 930 EUR
• LANGUAGE: ESTONIAN

LATVIA

• POPULATION: 2.0M (-10%)
• CAPITAL: RIGA (0.8M)
• GDP/CAPITA: EUR 10.7K
• AV.INCOME: 700 EUR
• LANGUAGE: LATVIAN

LITHUANIA

• POPULATION: 3.0M (-15%)
• CAPITAL: VILNIUS (0.5M)
• GDP/CAPITA: EUR10.8K
• AV. INCOME: 650 EUR
• LANGUAGE: LITHUANIAN

LITHUANIA LATVIA

RIGA TALLINN VILNIUS

• POPUL. 430K

SOB 60%

• POPUL. 550K

SOB 50%

• POPUL. 800K

SOB 80%

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MACRO CONSUMER MARKETPLACE

BRANDS & CATEGORIES

▪ GROWTH IN BALTICS IS

HOLDING UP FAIRLY WELL, GIVEN THE RUSSIAN TURMOIL

▪ EXPORTS AND INVESTMENTS

ARE AFFECTED BY GEOPOLITICAL UNCERTAINTY, WHILE DOMESTIC DEMAND REMAINS STRONG.

▪

GDP FORECAST FOR 2015

▪ ESTONIA – 2.1% ▪ LATVIA – 1.9% ▪ LITHUANIA – 2.3% ▪

YOUNG CONSUMER MORE AND MORE AS “WORLD CITIZENS” – ATTRACTED BY GLOBAL TRENDS, STUDYING & TRAVELLING ABROAD.

▪

CONSUMERS HIGLY

• DIGITILIZED. OVER 50% OF

PHONES ARE SMARTPHONES, INTERNET PENETRATION OVER 70%

▪

SPORTS GROWING BUT GENERAL ISSUE OF KIDS NOT PHYSICALLY ACTIVE

• SHOPPING IS HAPPENING

IN MALLS. SPORTING GOODS & MONOBRAND ARE THE MAIN CHANNELS.

▪

DIGITAL GROWING, 15% OF CURRENT NIKE VOLUMES IN THE MARKET (MOSTLY CROSS-BORDER)

▪

SDI WITH FIRST STORES. IMPACT PRIMARILY MAINSTREAM SPORT STORES,

▪

POLISH SIZEER OPENED 2 STORES IN LIT, FURTHER EXPANSION UNKNOWN

▪

NIKE SHARE 30-35%

▪

ADI 15-20%

▪

THE REST OF BRANDS BELOW 10%

▪

CATEGORY (E.G RUNNING) BRANDS (E.G. ASICS), HIGH SEASONAL CHANGES (E.G. WINTER)

▪

SKIS IN WINTER & BIKES IN SUMMER

▪

GOLF, MOUNTAIN SPORT, RUGBY, ETC ARE VERY SMALL

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YOUTH SPORT CULTURE

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Introduction of Sportland brand & concept First Sportland retail store in Estonia Introduction of Nike mono-brand store concept Introduction of NetoSport concept Introduction of Franchise stores Entry to Russia First retail store in Latvia First NIKE retail store in Lithuania Expansion in Latvia via acquisition of 100% Sports Entry to Finland Entry to Ukraine Opening of Timberland stores Expansion in Estonia via acquisition of WestSport stores Exit from Finland Minority participation in Russia

1995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Number of stores 6

10 12 19 29 32 64 90 101 120 152 148 106

First Sportland retail store in Lithuania

1996

Opening of O’NEILL stores Exit from Ukraine Exit from Russia

2010 2011 2012

97 88 66

Wholesale business in Estonia

2013 2015 2014 2016

66 76 84

SportsDirect shareholder First SportsDirect store

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ESTONIA LATVIA LITHUANIA

€87m €50m €43m

SIG 40% SIG 45% SIG 45%

29 15 16

• Estonia

Latvia Lithuania Others 55% Others 55% Others 60%

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SIG Board Of Directors Anti Kalle & Are Altraja

09/2015

PURCHASE DIRECTOR

Marge KAARMA

REATIL SALES, STORES, CONCEPTS

Are ALTRAJA

FINANCIAL DIRECTOR

Priit PIRKSAAR

CFO MÄGI CONTROLLER KANGUR

IT DIRECTOR Erik TAMBAUR

DEVELOPER Rait KIKKAMÄGI SECURITY & MAINTENANCE DIRECTOR Marek KÕIV

LOGISTICS MANAGER Margus METSALU

SPORTLAND ESTONIA CEO Gerd KIILI PURCHASE DIRECTOR

Alvin KUIMET

RETAIL OPERATIONS

Nelli NILSON

FINANCIAL DIRECTOR

Anne KIUDSOO

PURCHASE DIRECTOR

Nauris DIDRIHSONS

CHIEF ACCOUNTANT Ieva BETA

IT DIRECTOR Jevgemi HUDOROZKOV

CENTRAL WAREHOUSE Marius BEKERIS

SPORTLAND LITHUANIA CEO

Vladas KORSAKOVAS

PURCHASE DIRECTOR

Rimantas RAVAITIS

RETAIL OPERATIONS

Sigitas DAUKAS

FINANCIAL DIRECTOR

Kristina VAITIEKIENE

IT DIRECTOR Algirdas ZALAGAITIS ANALYTIC

Riina VESKIMÄGI SPORT EQ & BIKES Henri KRUUSEL

OUTDOOR EQ

Dima SMIRNOV

ONEILL

Jannon VIILUP

HELLY HANSEN

Annika TUISK

TIMBERLAND

Indrek UIBO

SDI BRANDS

Janno VIILUP

MARKETING DIRECTOR

Marit FINNIE

MARKETING DIRECTOR

Edita RAGAISIENE

SDI STORES

Remi AARE

NIKE & ADIDAS Alvin KUIMET

PURCHASE ASSISTANT

Kristiana JANSONE

ACCOUNTANT Karina APSITE IN STORE MARKETING Liga ALKSNE MARKETING ASSISTANT Edgars MIEZITIS MARKETING SPECIALIST Jana STRAUTINA RETAIL OPERATIONS Aivars MEZVEVERS HUMAN RESEARCH BALODE-VASILJEVSKA DIGITAL COMMUNICATION Karel KALJUSTE SPORT MAKRETING Margus REINTAL IN-STORE MARKETING Maarja NIGOL VISUAL MERCHANDISING Kristel NEI CREATIVE DESIGNER Rainer OLBRI

MARKETING DIRECTOR

Antti ADUR

MARKETING DIRECTOR

Sandijs PINKULIS

FINANCIAL DIRECTOR

Inga MEZAVILKA

INSTORE MARKETING Donatas KORSAKOVAS

PURCHASE ASSISTANT

Birgit TÕNTS

• SEN. ACCOUNTANT

Piret KALLAS ACCOUNTANT Piret PÕLDMETNS HUMAN RESEARCH Eneli VEERMÄE

FOOTWARE

Deividas MACONKA

APPAREL

Indre ZILENSKAITE

OUTDOOR

Bernardas LAUCIUS ACCOUNTANT

Daiva NARKUTE

ACCOUNTANT

Margarita NAUMOVIENE

LOGISTICS MANAGER

Jevgenijus BOCAROVAS

OFFICE ASSISTANT Zivile CIUTIENE

SPORTLAND LATVIA CEO Sandijs PINKULIS RETAIL OPERATIONS

Sandijs PINKULIS

OFFICE ASSISTANT Liene GRASMANE OFFICE ASSISTANT Leidi LIND SDI STORES

Remi AARE +

SDI STORES

Remi AARE +

SDI STORES

Remi AARE +

E-COMMERCE

TBD IT DIRECTOR

Erik TAMBAUR

Full Managment

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EXCLUSIVE DISTRIBUTION RIGHTS in the Baltics (43% of sales) OTHER GLOBAL SPORTSBRANDS sold in SPORTLAND (57% of sales)

38% 6% 5% 4% 3% 10% 8% 1% 1% 9%

15%

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HIGH SPORT FASHION LOW

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• Accelerate

growth of international

• perations
• Identify partners

in new territories

• Best in class

Logistics Support

• Promote Group

Owned Brands

• Pioneering the

Baltic Sports Market development

• Adopt Digital

Technologies to attract consumers in-store & media

• Innovative

Consumer engagement at the Sports Events & Clubs 1. Sports Direct Group brands to the Baltics 2. Big Box stores in the Baltics 3. Establish Sportland

• nline operations

utilising Sports Direct infrastructure

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New Brands from SportsDirect Casual Sport

EMOTION BRAND PRODUCT PRICE DISCOUNT

Casual Sport

.... -2013 2013-.....

???? ?? ??

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Be 1st!

PHILOSOPHY

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E-TAILER/ E-COMMERCE

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SPORTS: COMPETE & PARTICIPATE CULTURE: FREE TIME, SPORT SPECTATORS

FOOTBALL (participants 100,000)

Main sponsor: ESTONIAN FA (segment 1m) Partner of 10 clubs in the Baltics: FC FLORA, Nõmme Kalju, TAMMEKA, METTA

RUNNING (segment 1m)

Organizer of Baltics largest running events: Tallinn Marathon & 10k: 20,000 participants Nike Run Riga: 6,000; Nike Run Vilnius: 5,000 Tallinn Women's Run: 12,000

EXTREME SPORTS & SKATEBOARDING Partner of Simpel Session – the world premier skateboard & BMX competition (segment 50k)

MUSIC: Supporting numerous cultural events

Metallica in Tallinn: 80,000 audience

(Segment size in the Baltics: 3m)

MOTORSPORTS (segment 50k): Partner & Co-Developer of the Baltic largest event: Rally Estonia WINTER SPORTS (segment 200k): Developer of numerous cross-country ski events

BASKETBALL (segment 3m)

Main sponsor: Lithuanian BA (seg. 3m) Partner & Sponsor of Top 5 Baltic clubs NATIONAL COMBINED SPORTS EVENTS (segment

500k): Developer

FITNESS & GYM

(segment 300 k)

Developer: #1 Fitness club chain in Estonia; Partner of coaches & gyms OLYMPICS (segment 1m) Main sponsor: Estonian Track & Field Fed. & Estonian Olympic Committee

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Target Audience EE LV LT Total

Population

(01.01.2012)

(milj. inhabitants)

1.25 2.0 3.0 6.25

10-40y, active

(35% from total) (milj. inhabitants)

180 250 350 780

SPORTLAND Loyal Consumers

(thousands)

242 124 52 418

FaceBook Fans (thousands)

81 24 50 155

Insta Fans (04.09.2015)

7,057 4,127 102 11,286

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OUTCOME: for REINVEST

SKILLS MONEY ENERGY TIME SKILLS MONEY ENERGY MAXIMIZE AUDIENCE MAXIMIZE RETURN TIME TO REVIEW & DECISIONS TIME FOR THOUGHTS, IDEAS & RISK

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ESTONIA LATVIA LITHUANIA BALTICS Mother tongue of a registerd customer Est 80% / Rus 20% Lat 60% / Rus 40% Lit 90% / Rus 10% Number of Registered LC cards in SPO database (TOTAL)

242 393 124 919 51 899 419 211

Number of LC cards used in last 2 years

125 203 34 650 8 505 168 358

Number of LC cards used in last March 2015

16 579 4 610 286 21 475

% of purchases which had LC card used in Aug 2014

24% 11% 0.31%

Number of cards which have email address tagged to it

53 546 37 746 8 699 99 991

Number of card which have mobile nr. taged to it

82 985 48 678 19 340 151 003

How many loyal customer emails are sent

• ut as a newsletter

1-2 times per week 1 time per 2 weeks ~1 times per week

FORMAT OF LC CARD ESTONIA LATVIA LITHUANIA Plastic VIRTUAL LOYALTY CARD - MOBILE ESTONIA LATVIA LITHUANIA Launches in April in Est - Loyalty cards, gift cards directly to consumer mobile phone. Synced with current database. Transfering plastic card consumers to mobile users. Linking with ID number (unique for consumer and easy to idetntify)

Joined 2500 consumers

planned launch by Q3 planned launch by Q4

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Name Single Lite 22" Single Lite 32" Single 42" Single 48" Single 55" TvTower x2 TvTower x3 TvTower x4 Videowall x3 Videowall x4 Construction Example visual Resolution 1280x1080px, 1920x1080px 1920x1080px 1920x1080px 1920x1080px 1920x1080px 1080x3840px (Video - 2X 1920x1080px) 1080x5760px (Video - 3X 1920x1080px) 1920x4320px (Video - 4X 10800x1920px) 5760x1080px (Video

• 3X 1920x1080px)

7680x1080px (Video - 4X 1920x1080px) File Formats JPG, GIF, PNG, PDF, DOC, XLS, PPT, WAV, AVI, MOV, MP1 JPG, GIF, PNG, PDF, DOC, XLS, PPT, WAV, AVI, MOV, JPG, GIF, PNG, PDF, DOC, XLS, PPT, WAV, AVI, MOV, JPG, GIF, PNG, PDF, DOC, XLS, PPT, WAV, AVI, MOV, JPG, GIF, PNG, PDF, DOC, XLS, PPT, WAV, AVI, MOV, MP4 JPG, GIF, BNG, MP4, AVI, MOV JPG, GIF, BNG, MP4, AVI, MOV JPG, GIF, BNG, MP4, AVI, MOV JPG, GIF, BNG, MP4, AVI, MOV JPG, GIF, BNG, MP4, AVI, MOV BALTICS TOTAL 134 13 55 95 52 23 1 2 19 2 ESTONIA (new only) 55 7 55 1 42 14 1 1 5 2 LITHUANIA 60 2 44 6 2 11 LATVIA 19 4 50 4 7 1 3

55" 48" 55"

55"

48" 22" 32" 55" 48" 42"

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

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5000 10000 15000 20000 25000 30000 35000 2015y 2016y 2017y Estonia Latvia Lithuania

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ESTONIA LATVIA LITHUANIA

€87m €50m €43m

SIG 40% SIG 45% SIG 45%

29 15 16

• Estonia

Latvia Lithuania Others 55% Others 55% Others 60%

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Premium Lifestyle Division

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 1

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Premium Lifestyle Division

“The pinnacle retail fascias within the SDI group, featuring clothing, footwear and accessories from the most premium, directional and exclusive brands available from around the world”

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 2

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8 Stores 17 Stores 54 Stores

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 3

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Operational Improvements

The key benefits of a group approach:

• Shared stock – group buying
• Enhanced buying controls generating improved colour/size sell through
• Stabilising core product range to provide constant availability
• Improved automated allocation & replenishment system
• Automated web stock requirement
• Maintaining product availability both in-store & online
• Centralised group markdowns / promotional activity
• All enabling a cleaner stock package / improved sell-through / higher achieved margin and stronger

visual merchandising in store

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 4

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Strategy Improvements

• Enhancing existing retail space
• Investing in new flagship locations
• Offer our customers the best branded premium fashion range, across all categories and genders
• Deliver great customer service to our customers at all times through a multi-channel approach
• Website benefits from ongoing investment into the core group platform
• Working closely with our global brand partners to deliver best in class visual merchandising

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 5

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In store Concept

• The new FLANNELS.com concept takes inspiration from the

highest level of store design with the aim of enhancing our position as the premium multi-brand retail destination

• The main features of the store design are high quality materials,

clean simple lines to accentuate and hero the product and detailed atmospheric lighting

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 6

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In store Concept

• A contemporary colour palette mix of greys, whites and blue

highlights give an exceptional contrast and provide the overall tone for the store environment

• Each floor will have its own subtle look and feel to be targeted at

the gender and relevant brand mix

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 7

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• Aim to be the leading multi-brand high street

fashion retailer in the UK

• Specialising in branded denim and footwear
• Key brands including G-Star, Lacoste, Emporio

Armani & Hilfiger

• Located in key macro market cities and shopping

centres

• In store environment aimed at a shop in shop

brand experience

• Key denim brands (G-Star, Replay, Levis, Hilfiger)

Lifestyle brands (Lacoste, Pretty Green, Luke, Jack & Jones) and Footwear brands (Puma, Converse, Adidas, Vans)

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015 8

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Outlook

Group’s success underpinned by delivering exceptional quality and unbeatable value to our consumers

• Trading since the year end has been in line with management’s expectations, underpinning the revised FY16

target of £420m for the 2015 Bonus Share Scheme

• Performance continues to be driven by
• Investment in product range and availability
• Optimisation of in-store and web offer and introduction
• f UK Click and Collect
• Growing proportion of ‘better’ and ‘best’ Group branded

products in key categories

• Investment in store portfolio

SPORTS DIRECT INTERNATIONAL PLC / Capital Markets Day / Wednesday 9 September 2015

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QUESTIONS?