Super Retail Group Limited · ASX:SUL
Super Retail — Super Cheap Auto Group — H1 FY2006 Earnings Presentation
19 slides from Super Retail's earnings presentation, Feb 23, 2006
Slide 1: Super Cheap Auto Group
Super Cheap Auto Group Results for the 26 weeks to 31 December 2005 23 February 2006
Slide 2: Group Results – 26 Weeks to 31 December 2005
Group Results – 26 Weeks to 31 December 2005 • Strong underlying profit performance driven by good $m Reported Underlying control of gross margins and costs change change on py on py • Strong cash flow arising from inventory reductions Sales 264.7 19.3% 14.3% • Net Debt reduced by $4.4m despite $28m
Slide 3: Super Cheap Auto Results - 26 weeks to 31 December 2005
Super Cheap Auto Results - 26 weeks to 31 December 2005 • Store opening schedule on track 2005 % change – 225 Stores at 31 December 2005 $m on py – 14 stores opened during 1st half - 9 in Sales Australia and 5 in New Zealand - Total 246.2 11.0% • Stronger performance across Oils, Batteries, Car Care
Slide 4: BCF Results - 26 weeks to 31 December 2005
BCF Results - 26 weeks to 31 December 2005 • Business launched as BCF on 15 October 2005 2005 $m – 4 stores traded under Camp Mart brand from start of the half until BCF launch Sales 18.5 • 12 BCF stores at 31 December 2005 • Performance across the business better Gross margin 35.5% than initial pro
Slide 5: Group Cash Flow
Group Cash Flow 2005 2004 • Strong cash flow performance driven by the $m $m reduction in net inventory investment per store in the SCA business Operating cash flow 34.3 11.1 – This has delivered a cash flow benefit of (pre BCF set up) $12.1m • When comparing against 2004, the 2005 BCF set-up costs
Slide 6: Group Balance Sheet
Group Balance Sheet • SCA average inventory per store reduced Dec June from $568k at June to $511k at 2005 2005 December – Improved inventory management $m $m resulting from supply chain focus and investment in forecasting and replenishment systems Inventory – Has been achieved whilst improving - SC
Slide 7: Group Key Financial Ratios
Group Key Financial Ratios Dec Dec • Investment in BCF launch and Bathurst 2005 2004 investment has impacted on reported financial ratios EPS pre abnormals 9.6c 7.7c • Underlying performance is positive Fixed charge cover 2.0x 2.0x • AIFRS has had a minor detrimental impact on the ratios due to the
Slide 8: Impact of AIFRS
Impact of AIFRS Explanation of AIFRS adjustments: 2005 2004 • Lease make good costs – under AIFRS projected costs to be incurred at the end of a $m $m lease are expensed over the life of the lease Reported EBIT under • Goodwill amortisation is not allowed under AGAAP AIFRS – Goodwill is subject to a
Slide 9: Group Strategy Update
Super Cheap Auto Group Group Strategy Update
Slide 10: Group Strategy Update
Group Strategy Update • Driving LFL sales growth in Supercheap Auto • Expansion of the Supercheap Auto network • Expansion of BCF network • Developing Procurement and Supply Chain capabilities • Developing our people 10
Slide 11: Driving LFL Sales Growth in SCA
Driving LFL Sales Growth in SCA • Investigating new category opportunities • Developing local ranging capabilities • Focus on enhancing product knowledge and selling skills across our team • Drive to reduce product quality issues with some imported lines • Trialing new store layout • Targeted refurb
Slide 12: Expansion of SCA Network
Expansion of SCA Network • 227 stores trading today • Expect 233 stores by 30 June • Market opportunities exist for 300+ stores • Current format may have potential for 250 to 270 stores • Investigating opportunities for alternative formats – Convenience model – Extended range model 12
Slide 13: Expansion of BCF Network
Expansion of BCF Network • Performance to date has reinforced confidence in potential for at least 60 stores • 13 stores trading today • Will open between 10 to 15 new stores in 2006/07 • New Stores will be targeted towards NSW, WA and Qld • Business will investigate acquisition opportunities if org
Slide 14: Developing Procurement and Supply Chain Capabilities
Developing Procurement and Supply Chain Capabilities • Establishing container consolidation operation managed by third party in Ningbo - China • Developing domestic logistics facilities – Expanding Melbourne third party DC – Rationalising third party facilities in Brisbane – Expanding New Zealand DC
Slide 15: Developing our People
Developing our People • New Senior Management responsibilities now in place – David Ajala – Chief Operating Officer – SCA • Joined SCA in July 2005 • Extensive merchandise and retail management experience within Coles Supermarkets – Steve Doyle – Chief Operating Officer – BCF • Joined SCA in May 200
Slide 16: Outlook for Full Year FY06
Super Cheap Auto Group Outlook for Full Year FY06
Slide 17: Outlook for Full Year FY06
Outlook for Full Year FY06 Super Cheap Auto • Full year sales expected to be between $490 and $495m • Year on year savings in advertising expenditure in the 2nd half • AIFRS - Full year impact will be circa $2m additional occupancy costs • EBIT margin expected to be circa 6.8% for the full year (pos
Slide 18: Appendices
Super Cheap Auto Group Appendices
Slide 19: Appendix 1: Underlying Group Results - 26 weeks to 31 December 2005
Appendix 1: Underlying Group Results - 26 weeks to 31 December 2005 • The Group’s reported results have been impacted by long term business investment % • $4.0m of BCF set up costs: EBIT 2005 2004 change – Concept development costs $m $m on py – Pre launch operating costs – Store set up costs Report
Super Cheap Auto Group — H1 FY2006 Earnings Presentation on 6ix