Slide 1: ASX cover letter: FY24 Half Year Results Presentation
Metcash Limited ABN 32 112 073 480 1 Thomas Holt Drive Macquarie Park NSW 2113 Australia 4 December 2023 Market Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney NSW 2000 Dear Sir/Madam METCASH LIMITED – FY24 HALF YEAR RESULTS PRESENTATION Please find attached for r
Slide 2: FY24 Half Year Results
FY24 HALF YEAR RESULTS 4 DECEMBER 2023
Slide 3: Group overview and divisional results
Group overview and divisional results Doug Jones Group Chief Executive Officer 2
Slide 4: Acknowledgement of country
Acknowledgement of country We acknowledge the Traditional Custodians of the lands from which we are all connecting today. We are connecting from Wallumedegal Country, and pay our respects to elders across Country, past, present and emerging. Care for Country, Maggie-Jean Douglas, Naidoc week 2021 wi
Slide 5: Group highlights
Group highlights Continued strong performance underpinned by our flywheel • Further sales growth consolidates recent extraordinary sales • Outstanding cash result performance • Well positioned with platform and resilience for future • Strong earnings performance in Food and Liquor growth and strong
Slide 6: Group highlights: sales growth and strong cash generation
Group highlights Continued sales growth and strong cash generation Group revenue1 Group EBIT Profit after tax Operating Cashflow $9.0bn $246.5m $142.5m $218m +1.6% -3.4% underlying -10.9% underlying $141.0m reported +12.2% (1H23: $90m) Operating Cashflow Earnings per share3 Interim Dividend $217.7m
Slide 7: Results overview by pillar
Results overview by pillar Food Hardware Liquor Sales revenue 1H24 1H23 (including charge-through sales ) 1 $m $m % 20% 20% Food 4,732.2 4,703.3 0.6 53% 53% Hardware 1,783.5 1,732.6 2.9 27% Liquor 2,485.2 2,426.8 2.4 27% Total sales revenue (including charge-through sales) 9,000.9 8,862.7 1.6 1 Less
Slide 8: Food – sales
Food – sales ● Strong sales performance in current market, particularly ex-tobacco 1H24 1H23 $m $m % ● Total Food sales (including charge-through) +0.6% o Supermarkets +0.6% Revenue (including charge-through) o Campbells & Convenience1 +0.7% ● Total Food sales (including charge-through) ex-tobacco +
Slide 9: Food – EBIT
Food – EBIT 1H24 1H23 $m $m % ● Food EBIT increased $3.5m or 3.6% to $101.7m, reflecting Total revenue1 (including charge-through) 4,732.2 4,703.3 0.6 o Strong trading performance ex-tobacco o Recovery of higher fuel costs from customers EBIT 101.7 98.2 3.6 o Benefits of strategic buying opportuniti
Slide 10: Hardware – sales
Hardware – sales 1H24 1H23 $m $m % ● Total sales (including charge-through) increased by 2.9% to $1.8bn with growth in Total revenue as per Statutory Accounts 1,242.9 1,187.7 4.6 Total Tools more than offsetting a slight decline in IHG o Combined network retail sales resilient, up 2.1% in a more cha
Slide 11: Hardware – sales (cont.)
Hardware – sales (cont.) 1H24 1H23 $m $m % Total Tools Total revenue as per Statutory Accounts 1,242.9 1,187.7 4.6 ● Total sales increased 18.2% to $350.9m largely reflecting the impact of additional majority-owned joint venture stores Charge-through sales 540.6 544.9 (0.8) 1 o Total network retail
Slide 12: Hardware – EBIT
Hardware – EBIT ● EBIT decreased $6.0m or 5.1% to $110.6m with increased earnings in Total 1H24 1H23 Tools offset by a decline in IHG $m $m % o Excluding acquisitions, EBIT decreased $13.8m or 11.8% o Lower sales volumes Total revenue1 (including charge-through) 1,783.5 1,732.6 2.9 ‒ Increased CODB
Slide 13: Liquor – sales
Liquor – sales 1H24 1H23 $m $m % ● Total sales (including charge-through) increased 2.4% to $2.5bn Total revenue as per Statutory Accounts 2,478.2 2,420.6 2.4 o Continued strong performance in a challenging market o Growth in sales to retail customers more than offset decline in sales to Charge-thro
Slide 14: Liquor – EBIT
Liquor – EBIT 1H24 1H23 $m $m % ● EBIT increased $1.5m or 3.0% to $50.8m Total revenue1 (including charge-through) 2,485.2 2,426.8 2.4 o Contribution from sales growth EBIT 50.8 49.3 3.0 o Improved leverage 2 o Good cost management EBIT margin 2.04% 2.03% 1bp ● Continued focus on productivity levels
Slide 15: Good progress with strategic initiatives
Good progress with strategic initiatives Food Hardware Liquor Continued improvement in Growing store and customer Investment in network network competitiveness network growth and enhancement • Network of the Future – • Network growth through • Store and cool room upgrades continued strong progress i
Slide 16: Digital and Horizon update
Digital and Horizon update Digital Horizon Accelerating digital progress for shoppers, retailers, and Driving efficiencies, simplification and suppliers – focus on both B2C and B2B growth through replacement of legacy systems Food • Accelerated take-up of IGA Rewards (currently in ~530 stores) • Con
Slide 17: ESG Highlights
Metcash’s partnership with Greening Australia in action ESG Highlights Group ● Increased to 89th percentile of People, Planet and Community DJSI international assessment ● Key safety measure (TRIFR) improved ~17% to 16.4 ‒ (FY23: 87th percentile; FY22: ● Emissions reduced 5.2% to 69,829t CO2e (2023
Slide 18: Group financials
Group financials Alistair Bell Group Chief Financial Officer 17
Slide 19: Financial highlights
Financial highlights Outstanding cash performance and strong financial position • Continued sales growth • Acquisitions post balance date (2H24) o Remaining 15% of Total Tools Holdings - • Outstanding operating cashflows – $101.5m 30 Nov 23 effective working capital management o Strategic growth in
Slide 20: Capital management
Capital management Framework 1H24 outcomes Cash from Cash for Net interest operating activities investing activities & lease payments 1H23 Cash realisation Sustaining capex Service obligations Operating cashflow $218m CRR 92% $90m CRR 37% Sustaining capex Includes Stay-In-Business and Core growth in
Slide 21: Profit and loss
Profit and loss 1H24 1H23 % $m $m Sales revenue including charge-through sales 9,000.9 8,862.7 1.6 Charge-through sales (1,163.2) (1,124.9) 3.4 Sales revenue per statutory accounts 7,837.7 7,737.8 1.3 1 EBITDA 340.8 341.0 (0.1) Depreciation and amortization (94.3) (85.9) (9.8) EBIT 246.5 255.1 (3.4)
Slide 22: Cashflows
Cashflows 1H24 1H23 $m $m Operating cash flows 217.7 89.6 Investing cashflows, net (71.1) (106.8) Capital expenditure (including Project Horizon, DC upgrades and store upgrades) (57.2) (81.1) Acquisitions of businesses (19.0) (28.6) Net loan repayments and other investing activities 5.1 2.9 Financin
Slide 23: Balance sheet
Balance sheet 31 Oct 2023 30 April 2023 Capital expenditure ($m)1 $m $m Sales ($bn) Trade and other receivables and prepayments 1,952.8 1,764.7 160 19 Inventories 1,403.8 1,183.4 140 18 120 Trade payables and provisions (2,857.3) (2,460.1) 17 100 16 Net working capital 499.3 488.0 80 15 60 Intangibl
Slide 24: Debt management
Debt management Debt facility maturity profile1 Group cash movements for 1H24 ($m) 400 300 200 $m 100 0 FY24 FY25 FY26 FY27 FY28 FY29 (329) Working capital Bi-lateral facility Syndicated facility other ● Net debt of $329.4m (FY23: $349.6m), including cash and cash equivalents of $96.9m (FY23: $89.5m
Slide 25: Shareholder distributions
Shareholder distributions ● Dividend policy – target annual payout ratio ~70% of underlying profit after tax Distributions ● FY24 interim dividend 11.0 cents per share, fully franked ‒ Ex-dividend date: 14 December 2023 450 30 ‒ Record date: 15 December 2023 ‒ Payment date: 30 January 2024 400 ● Div
Slide 26: Group outlook
Group outlook Doug Jones Group Chief Executive Officer 25
Slide 27: Outlook
Outlook Group Pillar sales – first 4 weeks of 2H24 ● Sales growth has continued into 2H24 Group ● Total sales increased 0.8% with growth in Food ex-tobacco, Hardware and Liquor ● Food and Liquor continued to perform well supported by their compared to the prior comparable period competitiveness and
Slide 28: Appendices
APPENDICES 01. Financial history 02. Total Tools & put option accounting 03. Put options 04. Total tools sales & margins 05. Bannered store numbers 27
Slide 29: Financial history
Financial history 01. 1H24 1H23 1H22 1H21 1H20 Financial Performance Sales revenue ($m) 7,837.7 7,737.8 7,150.6 7,059.7 6,289.8 Sales revenue (including charge-through sales) ($m) 9,000.9 8,862.7 8,129.1 8,093.9 7,209.5 EBIT ($m) 246.5 255.1 231.2 203.0 155.7 EBIT margin1 (%) 2.7 2.9 2.8 2.5 2.2 Net
Slide 30: Total Tools and put option accounting
Total Tools and put option accounting 02. ● By virtue of put option accounting requirements, Metcash consolidates 100% of the Total Tools Group including JV store earnings (with no non-controlling interest) and 100% of balance sheet, notwithstanding: ● Metcash’s ownership interest of 85% in Total To
Slide 31: Put options – maturity and subsequent event proforma
Put options – maturity and subsequent event proforma 03. $m Put option maturity at 1H24 and showing TTH put Corporate 1H24 1H24 Financial 1H24 JV store 1H24 option store proforma proforma impact of step acquisitions post 1H24 stores Year as reported exercise1 reset2 divestment3 proforma stores State
Slide 32: Put options (cont)
Put options (cont) 03. 1. Subsequent to 1H24, Metcash increased its ownership in Total Tools Holdings Pty Ltd (TTH) from 85% to 100% for $101.5m of cash consideration, paid on 30 November 2023. 2. Subsequent to 1H24, Metcash increased its ownership interest in 11 JV stores by step acquisition for $4
Slide 33: Total Tools – sales & margins
Total Tools – sales & margins 04. TT Sales & EBIT performance 1,200 1,107 90 1,085 17.3% 80 17.0% 1,000 868 972 70 LTM Network sales ($m) 14.3% 14.0% 800 60 EBIT ($m) 50 600 7.9% 40 7.7% 6.5% 400 30 4.5% 20 200 24 64 84 49 10 0 0 FY21 FY22 FY23 HY24 EBIT $m LTM Network sales EBIT/Reported sales % LT
Slide 34: Bannered store numbers
Bannered store numbers 05. Store movement in period April October 2023 opened/joined closed/left 2023 banner group banner group Supermarkets Supa Valu IGA 3 - - 3 Core IGA 990 14 (21) 997 Small Format IGA 328 4 - 324 1 Total IGA bannered stores 1,321 18 (21) 1,324 Village Grocer/Friendly Grocer/Eziw
Slide 35: Contact details
Contact details Contact details For additionalinformation For additional informationcontact: contact: Steve Ashe Merrin Hodge General Manager Corporate Affairs & Investor Relations Investor Relations Manager +61 408 164 011 +61 429 235 104 Visit our website: steve.ashe@metcash.com merrin.hodge@metca
Slide 36: Championing successful independents
Championing successful independents