We're going to build segment revenue and ebitdar forecast for Burberry using assumptions provided in the segments tab and also using the information contained in the financial statements provided. Now if we scroll down we can see from the historical data that Burberry has three business segments retail wholesale and licensing. And it reports revenues for each of these segments.

As you can see here on page 51 of their financial statements.

So we're going to forecast revenue for each of these segments separately. However, forecasting ebitda margins is a bit more complex.

Page 53 of the financial statements combines operating profits for the retail and wholesale business as you can see here. But it also doesn't tell us how depreciation amortization is allocated between these businesses.

However page 131 of the financial statements shows us that all the depreciation and amortization is attributable to the retail and wholesale segment. So we're going to forecast the events are margin of the retail and wholesale segment on a combined basis, but separately from the ebitda of the licensing business. As you can see from the historic information retail revenue is the largest revenue segment. So the majority of our revenue analysis will focus on this segment.

You can see in rows 38 to 42 that we have some assumptions already provided for a bottom-up revenue build for this segment. the revenue build here relies on two key drivers the number of retail units and the revenue per average number of units Burberry discloses the number of retail units on page 55 of its financial statements where as you can see here. They reconcile opening and closing numbers of stores.

You can see in our assumptions that there are no forecast changes to the number of stores.

That's based on the fact that management guidance in the Strategic review are shown here is the store openings to be offset by a similar number of store closures for the next year. The assumptions here also show forecasted revenue growth per store of four to five percent. Again, that's based on the management guidance shown here that there will be low single digit percentage growth in retail revenue for the next year.

We can take the growth assumption multiply by the historic revenue per store to give forecast revenue per store.

We can take the growth assumption multiplied by the historic revenue per store to give forecast revenue per store. So let's do that first.

We can then multiply the revenue per store by the average number of stores in the year to give forecast retail revenue. So let's do that next.

As a sense check, we'll then calculate the implied retail revenue growth rate.

Let's copy our formulas over to the right.

And then we're going to take our growth assumption and we're also then going to pull our retail revenue growth into our segment summary in row 18.

We're now going to also pull the retail revenue into our segment summary here in row 18.

We can now pull our retail revenue forecast into our segment summary in row 18.

Wholesale revenue is a bit simpler to forecast as it's less material. This is just going to be forecast using a standard revenue growth assumption and that comes from row 6.

It's worth noting that the growth rate here is very modest. Again, this is based on guidance provided by management.

Which states that wholesale revenue will be broadly unchanged in the six months to September 2015.

We can take the growth assumption multiplied by the historic revenue to give our forecast wholesale revenues. So let's do that calculation now.

And we can now combine this with the retail revenues to give total segment revenue.

We can now also calculate ebitdr for this segment by multiplying the ebitdar margin assumption from row 7 by segment revenue. We can now also calculate ebitda for this segment by multiplying the ebitdr margin assumption from row 7.

By our segment revenue the assumptions here hold margins constant throughout the forecast period this is despite the fact that the retail business is growing more quickly than the whole cell business and retail would usually attract higher margins than wholesale business. This assumption is based on management guidance the segment profits that FX and tight cost control will be offset by geographic and channel mix effects in the next year. Let's take our ebitda margin and use that to calculate our ebitdar forecasts.

Now, let's move on to the licensing segment. part of the business forecast this using a standard revenue growth assumption and that's given to us in row 13.

It's worth noting that this growth rate is actually negative in the next forecast year and then starts to normalize in the third forecast year.

This is based on the management guidance shown here from page 55 in the financial statements that licensing revenue for fy16 is planned to be down by about 40% due to expiry of Japanese licenses. We can take this growth rate assumption and use it to forecast our licensing revenues.

We can now forecast EV itself for this segment by multiplying the ebitda margin assumption for this segment by our segment revenue.

We can now think about our ebitdar assumption for this segment and if we scroll up. We can see a large drop off in the ebitda margin in our first forecast year this reflects the fact that the licensing segment has a high level of fixed costs. In fact, it doesn't actually have any cost of goods sold at all. So margins will contract significantly as revenues fall. Let's forecast our ebitda numbers.

We've now completed our revenue and ebitda forecasts for all of our business segments.