Harvey Norman Holdings Ltd · ASX:HVN
Harvey Norman — H1 FY2020 Earnings Presentation
23 slides from Harvey Norman's earnings presentation, Feb 28, 2020
Slide 1: Analyst Presentation for the Half-Year Ended 31 December 2019
ANALYST PRESENTATION FOR THE HALF-YEAR ENDED 31 DECEMBER 2019 For personal use only ACN 003 237 545
Slide 2: Contents
2 CONTENTS Key Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Offshore Financial Achievements for HY20 . . . . . . . . . . . . . . . . 4 For personal use only Impact of Adopting AASB 16 Leases in HY20 . . . . . . . . . . . . . . 5 Reported Profit Before Tax
Slide 3: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS 3 REPORTED PBT REPORTED PROFIT AFTER TAX & NCI 544 FRANCHISEES $ 301.15m $213.59m IN AUSTRALIA 194 FRANCHISED COMPLEXES For personal use only DOWN 14.53m ( 4.6%) FROM 315.68m IN DEC 2018 $ $ DOWN 9.18m ( 4.1%) FROM 222.77m IN DEC 2018 $ $ 95 OFFSHORE HARVEY NORMAN® PBT PROFI
Slide 4: Offshore Achievements for HY20
OFFSHORE ACHIEVEMENTS FOR HY20 4 OPE N E D 5 N E W STOR E S 27 % OF TOTAL CONSOLIDATED I N M AL AYS I A I N H Y20 : • Mid Valley Southkey, Johor Bahru For personal use only PBT NOW COMES FROM OVERSEAS Opened July 2019 44,165 sq.ft COMPANY-OPERATED STORES • AEON Mall, Kota Bahru Opened October 2019 4
Slide 5: Impact of Adopting AASB 16 Leases in HY20
IMPACT OF ADOPTING AASB 16 LEASES IN HY20 5 HALF-YEAR ENDED 31 DECEMBER 2019 LEASES OF LEASES OF PROPERTIES For personal use only EXPENSES UNDER AASB 16 LEASES: OWNER-OCCUPIED SUB-LEASED TO TOTAL LEASES PROPERTIES EXTERNAL PARTIES Property, plant & equiment: Right-of-use asset $29.62m - $29.62m Depr
Slide 6: Reported Profit Before Tax
REPORTED PROFIT BEFORE TAX 6 For personal use only
Slide 7: Reported Profit Before Tax: Key Contributors
REPORTED PROFIT BEFORE TAX: Key Contributors 7 Decrease of $14.53m in Reported PBT due to: • ($34.61) million decrease in franchising operations segment result ($123.86m vs $158.47m), down -21.8% For personal use only R evenue from franchisees decreased by $21.92 million, or -4.2%, to $497.84 millio
Slide 8: Key Statistics: Balance Sheet
KEY STATISTICS: BALANCE SHEET 8 Increase/ HY2020 HY2019 (Decrease) TOTAL ASSETS $6.05bn $4.83bn 25.1% For personal use only TOTAL LIABILITIES ($2.77bn) ($1.68bn) 64.3% NET ASSETS $3.28bn $3.15bn 4.2% NET DEBT TO EQUITY % 16.57% 22.35% DIVIDENDS PER SHARE 12.0c 12.0c EPS 17.70c 19.12c (7.4%)
Slide 9: Overseas Retail Segment
OVERSEAS RETAIL SEGMENT 9 31 DEC 2019 31 DEC 2018 INCREASE/(DECREASE) OFFSHORE SEGMENT PROFIT RESULT REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* For personal use only RETAIL - NEW ZEALAND $48.53m (-$0.28m) $48.80m $42.01m $6.51m 15.5% $6.79m 16.2% RETAIL - SINGAPORE & MALA
Slide 10: Overseas Retail Segment: Significant Increase in Offshore Retail Revenue
OVERSEAS RETAIL SEGMENT Significant Increase in Offshore Company-Operated Retail Revenue 10 Record offshore retail revenue of $1.15bn for HY20 due to increase in offshore company-operated sales OFFSHORE COMPANY-OPERATED revenue by $71.45m (+6.8%), from $1.05bn to $1.12bn: RETAIL REVENUE • $29.83m in
Slide 11: Overseas Retail Segment: Highest Ever Offshore Retail Profit Result
OVERSEAS RETAIL SEGMENT Highest Ever Offshore Company-Operated Retail Profit Result 11 • $6.79m* ( 16.2%) increase in NZ result from $42.01m in HY19 to $48.80m* in HY20 OVERSEAS COMPANY-OPERATED Strong sales growth with improved margins, accentuated by exclusive product lines and strong supplier RET
Slide 12: Aggregated Sales Revenue: Headline & Comparable
AGGREGATED SALES REVENUE: Headline & Comparable Aggregated Sales Revenue 12 AGGREGATED SALES INCREASE / (DECREASE) IN CONSTANT LOCAL CURRENCIES: For personal use only TOTAL SALES 1Q2020 2Q2020 HY2020 HEADLINE AGGREGATED SALES OF vs. vs. vs. 4.1bn FOR HY20 $ 1Q2019 2Q2019 HY2019 vs $4.0bn FOR HY19 AU
Slide 13: Franchisee Aggregated Sales Revenue
FRANCHISEE AGGREGATED SALES REVENUE 13 For personal use only * Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity. Harvey Norman®, Domayne® and Joyce Mayne® retail sales in Australia are made by independently owned franchisee businesses that a
Slide 14: Segment Analysis: Franchising Operations Segment
SEGMENT ANALYSIS: Franchising Operations Segment 14 31 DEC 2019 31 DEC 2018 INCREASE/(DECREASE) FRANCHISING OPERATIONS SEGMENT REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* For personal use only FRANCHISING OPERATIONS SEGMENT REVENUE $443.81m $443.81m $468.64m (-$24.82m) -5.
Slide 15: Segment Analysis: Franchising Operations Segment (continued)
SEGMENT ANALYSIS: Franchising Operations Segment (continued) 15 FRANCHISING OPERATIONS • Impacted by $21.92m (-4.2%) decrease in revenue received from franchisees [$497.84m vs $519.76m] due to: SEGMENT REVENUE reduction in franchise fees received from franchisees by $23.67 million, incorporating a r
Slide 16: Segment Analysis: Property
SEGMENT ANALYSIS: PROPERTY 16 HY2020 HY2019 Increase/(Decrease) % For personal use only PROPERTY SEGMENT REVENUE $156.91m $164.80m ($7.89m) (4.8%) NET PROPERTY REVALUATION INCREMENT $20.28m $36.56m ($16.28m) (44.5%) PROPERTY SEGMENT EBITDIA $107.09m $119.85m ($12.76m) (10.7%) PROPERTY SEGMENT RESULT
Slide 17: Review of the Income Statement
REVIEW OF THE INCOME STATEMENT 17 31 DEC 2019 31 DEC 2018 INCREASE/(DECREASE) INCOME STATEMENT REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* SALES OF PRODUCTS TO CUSTOMERS* $1,239.08m $1,239.08m $1,175.25m $63.84m 5.4% $63.84m 5.4% For personal use only GROSS PROFIT $403.87m
Slide 18: Review of the Income Statement (continued)
REVIEW OF THE INCOME STATEMENT (continued) 18 • +$16.31m increase in finance costs relating to recognition of $20.73m interest on lease liabilities (accretion) as a TOTAL EXPENSES result of adoption of AASB 16 Leases. UP BY $12.04m ( 1.7%) • +$7.05m increase in marketing expenses to drive sales, mai
Slide 19: Review of the Balance Sheet
REVIEW OF THE BALANCE SHEET 19 31 DEC 2019 31 DEC 2018 INCREASE/(DECREASE) REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* For personal use only TOTAL ASSETS $6,049.01m (-$1,066.02m) $4,982.99m $4,834.43m $1,214.57m 25.1% $148.56m 3.1% TOTAL LIABILITIES $2,765.02m (-$1,132.86m
Slide 20: Review of the Statement of Cash Flows
REVIEW OF THE STATEMENT OF CASH FLOWS 20 31 DEC 2019 31 DEC 2018 INCREASE/(DECREASE) REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* For personal use only NET CASHFLOWS FROM OPERATING ACTIVITIES $298.77m (-$61.86m) $236.91m $145.36m $153.41m 105.5% $91.55m 63.0% NET CASHFLOWS
Slide 21: Review of the Statement of Cash Flows (continued)
REVIEW OF THE STATEMENT OF CASH FLOWS (continued) 21 • $17.57m increase in cash outflows for the purchase and refurbishments of investment properties. • $16.93m increase in cash outflows for the purchase of property, plant and equipment and intangible assets INVESTING CASH OUTFLOWS For personal use
Slide 22: Outlook
OUTLOOK 22 • Locally, the economic outlook appeared to be more positive going into calendar 2020 – with record low interest rates, the momentum building up in the residential property market, ongoing spending on infrastructure and a brighter outlook for the resources sector. For personal use only •
Slide 23: Questions
QUESTIONS (limited to 30 minutes) 23 For personal use only
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