Metcash Limited · ASX:MTS
Metcash — FY2024 Earnings Presentation
38 slides from Metcash's earnings presentation, Jun 24, 2024
Slide 1: Metcash FY24 Full Year Results Presentation ASX cover letter
Metcash Limited ABN 32 112 073 480 1 Thomas Holt Drive Macquarie Park NSW 2113 Australia 24 June 2024 Market Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney NSW 2000 Dear Sir/Madam METCASH LIMITED – FY24 FULL YEAR RESULTS PRESENTATION Please find attached for rele
Slide 2: FY24 Full Year Results
FY24 Full Year Results 24 June 2024
Slide 3: Group overview and divisional results
Group overview and divisional results Doug Jones Group Chief Executive Officer
Slide 4: Acknowledgement of country
Acknowledgement of country We acknowledge the Traditional Custodians of the land on which we are all connecting today. We are connecting from Wallumedegal Country and pay respects to Elders across Country, past, present and emerging. 3
Slide 5: Overview
Overview Strong results in challenging macro environment Strategy is working + Disciplined execution Food & Liquor • Continued to deliver strong returns • Excellent cash, cost and operational • Structurally positioned for growth performance Hardware • Results underpinned by diversification, resilien
Slide 6: Structurally positioned for enduring growth
Structurally positioned for enduring growth Core Strategies Leveraging platform for Extending through value Delivering unique, Extending and M&A growth and chain for growth and differentiated value strengthening core enhancing performance resilience (‘Best Store in Town’) competitive advantages Earn
Slide 7: Portfolio earnings maintained in more challenging macro environment
Portfolio earnings maintained in more challenging macro environment Diversified portfolio, strong execution and market performance Food Liquor Hardware Supermarkets Superior Retail / on premise IHG Total Tools Macro environment & Convenience Foods • High interest rates • Shopper focus on value • Cos
Slide 8: Group financial overview
Group financial overview Continued sales growth Group Revenue1 Group EBIT Profit After Tax and strong cash generation $18.2bn $496.3m $282.3m ↑ 0.7% ↓ 0.9% underlying ↓ 8.2% underlying $257.2m reported ↓ 0.7% Operating Cashflow Cash realisation Earnings per Total Dividend ~$483m ratio2 share3 ~30% 9
Slide 9: Results overview by pillar
Results overview by pillar FY24 $m FY23 $m % Food Hardware Liquor Sales Revenue (including charge-through1) Food 9,552.1 9,604.3 (0.5) 19% 3,476.9 3,384.3 2.7 19% Hardware Liquor 5,150.1 5,063.8 1.7 53% 53% 28% Total sales revenue 18,179.1 18,052.4 0.7 28% (including charge-through sales1) Less: Cha
Slide 10: Food
Food Further evidence of shift to sustainable, resilient business model FY24 $m FY23 $m % Supermarkets sales Total revenue as per Statutory Accounts 8,307.8 8,410.1 (1.2) • Maintained competitive position in an environment of increased value- conscious shopping Charge-through sales 1,244.3 1,194.2 4
Slide 11: Liquor
Liquor Strong results underpinned by diversified customer strategy and FY24 $m FY23 $m % continued preference for localised offers Total revenue as per Statutory Accounts 5,133.6 5,049.2 1.7 Sales • Independent network continued to perform strongly in a more challenging Charge-through sales 16.5 14.
Slide 12: Hardware
Hardware Pleasing result in face of rapid slowing in builder confidence and FY24 $m FY23 $m % LfL2 % market activity Sales Total Hardware • Total sales increased 2.7% to $3.5bn reflecting the impact of acquisitions Total revenue as per Statutory Accounts 2,471.0 2,344.1 5.4 o IHG sales flat o Total
Slide 13: Hardware - IHG
Hardware - IHG FY24 $m FY23 $m % LfL4 % Sales IHG • Outperformed market trends o Further softening in construction activity Total Sales 2,797.8 2,800.8 (0.1) (3.0) o Weighted market decline ~6% (new housing -14%; renovations -3%; DIY flat)1 3,402.1 3,436.2 (1.0) (3.1) Total network retail sales • Sa
Slide 14: Hardware – Total Tools
Hardware – Total Tools FY24 $m FY23 $m % LfL3 % Total Tools sales Total Tools • Sales growth largely reflects network expansion and acquisitions • More challenging market conditions Total Sales 679.1 583.5 16.4 (1.3) o Slowdown in retail conditions Total network sales 1 1,112.3 1,084.5 2.6 (2.3) o I
Slide 15: Hardware – Total Tools (EBIT margin deep dive)
Hardware – Total Tools (EBIT margin deep dive) Focus on maximising EBIT dollars TT Sales & EBIT performance 1200 90 • Expanding JV store network is a key growth strategy 17.0% 17.3% 1,112 80 1000 1,085 Results in: LTM Network sales ($m) • 972 70 800 868 14.3% 60 o Additional EBIT dollars 12.1% EBIT
Slide 16: Strategic acquisitions – update
Strategic acquisitions – update Aligned to Purpose of Championing Successful Independents in support of thriving local communities Superior Food Alpine Truss Bianco • Attractive adjacent growth market • Supports IHGs ‘Whole of House’ and network expansion strategy • Logical extension of Food strateg
Slide 17: Summary and looking ahead to FY25
Summary and looking FY24 FY25 recap focus ahead to FY25 • Strong results • Continued business Structurally underpinned by performance in positioned for diversification, resilience challenging markets growth – and disciplined execution • Bedding down and continued focus • Pleasing pillar extracting v
Slide 18: Group financials
Group financials Deepa Sita Group Chief Financial Officer 17
Slide 19: Financial overview
Financial overview • Continued sales growth • Excellent cash and cost performance through disciplined execution • Successfully completed equity raise and increased debt facilities to support strategic acquisitions o $300m institutional placement – completed February 2024 o $60m share purchase plan –
Slide 20: Capital Management
Capital Management Framework FY24 Outcomes Cash from Cash for Net interest Consistent and disciplined application of capital framework operating investing & lease activities activities payments FY23 Cash realisation Core capex Service obligations Operating cashflow $483m (CRR 102%) $373m $342m Stren
Slide 21: Profit and loss
Profit and loss FY24 ($m) FY23 ($m) % Sales revenue including charge-through sales 18,179.1 18,052.4 0.7 Charge-through sales (2,266.7) (2,249.0) 0.8 Sales revenue per statutory accounts 15,912.4 15,803.4 0.7 1 EBITDA 688.3 675.8 1.8 Depreciation and amortisation (192.0) (175.0) (9.7) EBIT 496.3 500
Slide 22: Cashflows
Cashflows FY24 ($m) FY23 ($m) Operating cashflows 482.6 372.7 Investing cashflows, net (328.4) (199.6) Capital expenditure (including Project Horizon, DC upgrades and store upgrades) 1 (135.9) (152.1) Acquisitions of businesses 2 (205.6) (60.4) Net loan repayments and other investing activities 13.1
Slide 23: Balance Sheet
Balance Sheet 2 30 Apr 24 ($m) 30 Apr 23 ($m) Capital Expenditure ($m) % Trade and other receivables and payments 1,906.2 1,764.7 Sales ($bn) Inventories 1,196.9 1,183.4 250 19 18 Trade payables and provisions (2,635.0) (2,460.1) 200 17 Net working capital 468.1 488.0 150 16 100 15 Intangible assets
Slide 24: Debt Management
Debt Management 1 Debt facility maturity profile Group cash movements for FY24 ($m) % 350 250 150 $m 50 -50 FY25 FY26 FY27 FY28 FY29 FY30 FY32 Working capital Bi-lateral facility Syndicated facility Refinancing • Net debt of $251.9m (FY23: $349.6m), including cash and cash equivalents cashflows othe
Slide 25: Dividends
Dividends FY24 dividends • Total 19.5 cps fully franked • Interim dividend 11.0 cps • Final dividend 8.5 cps o Ex dividend date: 16 July 2024 o Record date: 17 July 2024 o Payment date: 27 August 2024 Dividend reinvestment plan • Discount 1.0% • Participation deadline: 18 July 2024 • Pricing period:
Slide 26: Disciplined execution
Disciplined execution Cost savings Working Capital Synergies Continued focus on costs, working capital • Achieved ~$13m in-year cost • Optimising accounts • Superior Foods – some benefits and synergies savings in FY24 (ahead of receivable already captured in non-trade guided annualised target) spend
Slide 27: Group outlook
Group outlook Doug Jones Group Chief Executive Officer 26
Slide 28: Outlook
Outlook Group Pillar sales – first 7 weeks of FY25 Group Total Group sales for the first seven weeks of FY25 have continued to be in growth despite continuation of challenging market conditions. • Total sales (including two weeks sales in Superior Foods) increased 2.2%. Excluding Superior Foods, tot
Slide 29: Appendices
Appendices 01. Financial history 02. Total Tools & put option accounting 03. Put options 04. Bannered store numbers 05. Pillar strategic initiatives 06. ESG Highlights 07. Project Horizon update 08. Pro-forma net debt FY24 28
Slide 30: Financial history
Financial history 01. FY24 FY23 FY22 FY21 FY20 Financial Performance Sales revenue ($m) 15,912.4 15,803.4 15,164.8 14,315.3 13,025.4 Sales revenue (including charge-through sales) ($m) 18,179.1 18,052.4 17,405.7 16,361.1 14,857.1 EBIT ($m) 496.3 500.8 472.3 401.4 334.9 EBIT margin1 (%) 2.7 2.8 2.7 2
Slide 31: 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 JV store earnings (with no non-controlling interest) and 100% of balance sheet, notwithstanding Total Tools Holding’s ownership interest of between 51% - 95% in 51
Slide 32: Put options – maturity
Put options – maturity 03. Put option maturity at FY24 Number Financial Put option of stores Year value $m Statement of Financial Position Total Tools JV Stores Between May 2024 and July 2024 4 FY25 20.8 Between May 2025 and July 2025 16 FY26 47.0 Between May 2026 and July 2026 1 FY27 6.3 Between Ma
Slide 33: Bannered store numbers
Bannered store numbers 04. Store movement in period April 2024 opened / joined closed / left April 2023 1 Supermarkets banner group banner group Supa Valu IGA 4 3 Large format IGA 244 257 Medium format IGA 642 651 Small Format IGA 391 400 2 Total IGA bannered stores 1,281 26 (56) 1,311 Total Superma
Slide 34: Strategic initiatives update
Strategic initiatives update 05. Food Liquor Hardware Leveraging platform for • Completed acquisition of Superior Food in June • N/A • IHG completed acquisitions of Bianco and Alpine Truss in March 2024 M&A growth and 2024 • Total Tools accelerated growth in commercial enhancing performance segment
Slide 35: Continued good progress on ESG
Continued good progress on ESG Group People Planet Community Achieved Interim 2030 Emissions Donations through IGA community Dow Jones Sustainability Index (DJSI) Gender Target for FY24 chest program Female representation: 89th FY23: 87th percentile FY22: 69th percentile 60% Leadership team 50% NEDs
Slide 36: Project Horizon – no change to March investor day update
Project Horizon – no change to March investor day update Solution schematic Majority complete In progress Deployment schedule Moving from legacy ERP to suite of Microsoft and best of breed strategic capabilities on evergreen cloud platform 9 Supply Chain Control Tower 13 Core finance on 12 an evergr
Slide 37: Pro-forma net debt – FY24
Pro-forma net debt – FY24 Metcash expects to carry forward ~$1.03bn of ‘core’ net debt into FY25 ($1.14bn gross debt) This equates to a DLR of 1.68x9, which is within the target range of 1.0x to 1.75x Notes: 1. Represents the actual net debt position at the end of April 2024. Note that this included
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