Myer Holdings Limited · ASX:MYR
Myer — H1 2014 Earnings Presentation
31 slides from Myer's earnings presentation, Mar 20, 2014
Slide 1: Myer First Half Results ending 25 January 2014
ASX & Media Release Thursday 20 March 2014 Myer First Half Results ending 25 January 2014 First half total sales up 0.3 percent to $1,737 million First half sales up 1.2 percent on a comparable store sales basis Net profit after tax down 8.1 percent to $81 million Interim dividend of 9 cents, fully
Slide 2: CEO comments on awards, sass & bide and online
“We were delighted to be recently awarded ‘Department Store of the Year’ in the Roy Morgan Customer Satisfaction Awards for the second consecutive year. The poll of over 50,000 consumers once again recognised our commitment to improving our customers’ shopping experience. “The full acquisition of sa
Slide 3: Brand mix, margins, costs and cash generation
Myer Exclusive Brands continue to perform well, growing by 2.0 percent and now accounting for 20.2 percent of sales (1H FY2013: 19.8 percent). Concession sales grew by 1.6 percent and now account for 15.2 percent of sales (1H FY2013: 15.0 percent). National Brand sales fell by 0.6 percent and now ac
Slide 4: Outlook
OUTLOOK Given continued pressure on discretionary income and uncertain consumer sentiment, we remain cautious about the trading environment for the remainder of the year. Second half sales expectations Sales are expected to benefit from the completion of the refurbishment of the Adelaide (SA) store
Slide 5: Review of strategic initiatives
Review of strategic initiatives In conjunction with Mr Brookes’ reappointment, Myer continues its strategic review with the aim of optimising the company’s competitiveness in the changing retail environment. A merger with David Jones was proposed in October 2013 (and became public in January 2014).
Slide 6: Improve customer service and enhance merchandise offer
“As we continue on our journey to delight our customers, I am extremely pleased with the results so far of the ‘FeedbackASAP’ program in particular for our Platinum MYER one customers. The Net Promoter Scores are invaluable in defining our customer service achievements and opportunities,” said Mr Br
Slide 7: Emporium expansion and strengthening the loyalty program
“The Emporium development provides us with the opportunity to expand our Menswear offering in our Melbourne City store. Categories such as men’s sporting and plus size will be ranged in addition to an expanded Men’s footwear offer and a men’s personal shopping and styling destination. Within the new
Slide 8: Online fulfilment and optimising the store network
“Efficient fulfilment of orders is key to the profitability of our online store. We are delighted with the performance of our dedicated online fulfilment centre which has assisted in driving down the cost of order fulfilment by 28 percent compared with the prior year,” said Mr Brookes. 5. OPTIMISE O
Slide 9: Analyst and Investor briefing
Analyst and Investor briefing: A briefing will be held for analysts and investors today at 10:00am (AEDT time). This briefing will be webcast live at: http://streamcast.com.au/myer/HY14/ Viewers will need to register their name, email and company to access the webcast. An archive webcast of the brie
Slide 10: Table 1: Profit & Loss Statement for the 26 weeks to 25 January 2014
Table 1: Profit & Loss Statement for the 26 weeks to 25 January 2014 1H 2014 1H 2013 Change vs. LY Actual Actual $m $m Total Sales Value 1,737.1 1,732.5 +0.3% Concessions 264.3 260.1 +1.6% Myer Exclusive Brands 350.8 343.9 +2.0% Other 1,122.0 1,128.5 (0.6%) Operating Gross Profit 712.1 714.0 (0.3%)
Slide 11: Balance Sheet, Financial Ratios, Shares and Dividends
Table 2: Balance Sheet as at 25 January 2014 January 2014 January 2013 Actual Actual $m $m Inventory 351 363 Other Assets 57 43 Less Creditors (466) (457) Less Other Liabilities (199) (230) Net Trading Investment (257) (281) Property 25 26 Fixed Assets 471 480 Tangible Funds Employed 239 225 Intangi
Slide 12: MYER Half Year Results 2014
MYER Half Year Results 2014 20 March 2014 BERNIE BROOKES CEO and Managing Director MARK ASHBY Chief Financial Officer Image: Piper and Wayne by Wayne Cooper (Myer Exclusive Brands) • Overview • Financial update • Delivering our five-point plan • Outlook Image: Sportscraft 20 March 2014 1
Slide 13: 1H 2014 financial summary and highlights
MYER Half Year Results 2014 1H 2014 financial summary • Total sales up 0.3% to $1,737 million, up 1.2% on comparable store sales basis • Q2 total sales up 0.2% to $1,046 million, up 1.7% on comparable store sales basis • Operating gross profit margin down 21 bps to 41.0% • Cash CODB up 2.1% to $540
Slide 14: 1H 2014 highlights (continued)
MYER Half Year Results 2014 1H 2014 highlights (continued) • Enhanced brand offer: Napoleon Perdis, Dita Von Teese, Piper re-launch • Strong growth in online metrics: traffic, sales, basket size, units per transaction, SKUs • Dedicated online DC launched, ‘Click & Collect’ expanded • Over $23 millio
Slide 15: Financial summary
MYER Half Year Results 2014 Financial summary 1H2014 vs. 1H2013 1H2014 comparable sales up 1.2%, on top of strong growth in previous Sales $1,737m +0.3% corresponding period Margin-enhancing initiatives offset by strong Stocktake Sale, impact of Operating $712m -0.3% increase in concessions sales an
Slide 16: 1H 2014 sales performance and operating gross profit
MYER Half Year Results 2014 1H 2014 sales performance Highlights: Sales growth ($) and mix (%) • Myer Exclusive Brands, Concessions, new stores, online, new brands, +$4.2m sass & bide -$6.5m 15.2% • Cycling growth in previous corresponding period • LFL sales growth in 6 of last 7 quarters • Best sta
Slide 17: Cash cost of doing business and capital expenditure
MYER Half Year Results 2014 Cash cost of doing business Costs driven by: $m CODB $m CODB/Sales % % • Increased store labour and occupancy 600 35 30.25 30.51 31.08 costs (utilities, rates, taxes) 550 28.82 30 • Annualised new store costs 500 25 • Operating expenses for online 450 20 • Store closure a
Slide 18: Strong cash flow, working capital management and key credit metrics
MYER Half Year Results 2014 Strong cash flow, working capital management $(m) 1H2014 1H2013 Operating cash flow 259 272 Cash conversion 150% 147% Tax (27) (30) Interest (12) (14) Net cash capex paid (post landlord contribution) (35) (33) Acquisition of non-controlling interests (33) - Cash flow befo
Slide 19: 1H 2014 in summary
MYER Half Year Results 2014 1H 2014 in summary • Sales growth despite major refurbishments, one store closure and cycling strong 1H 2013 result. Q1 sales growth continued into Q2 • Full acquisition of sass & bide now complete, continued sass & bide sales growth • Progress in margin-enhancing initiat
Slide 20: Progress against five-point plan
MYER Half Year Results 2014 Progress against five-point plan Improve customer service Enhance our merchandise offer Strengthen our loyalty program AA Build a leading omni-channel offer Optimise our store network “We continued to progress our five-point plan with new initiatives to drive sales and pr
Slide 21: Improve customer service; enhance merchandise offer
MYER Half Year Results 2014 1. Improve customer service Efficiency initiatives • Safety record further improvement, LTIFR* 7.1 (1H FY13: 7.9) • Shrinkage further reduced, now surpassing global best practice • Online booking for in-store services • Supplier ‘floor-ready’ compliance at record high lev
Slide 22: Napoleon Perdis; Myer Exclusive Brands growth
MYER Half Year Results 2014 Napoleon Perdis • Launched in 61 stores in November 2013 • Further 5 stores to launch in coming months • Excellent customer response 2. Enhance merchandise offer Myer Exclusive Brands growth continues • Now represent 20.2% of sales mix • Top performing Myer Exclusive Bran
Slide 23: New brands coming to Myer
MYER Half Year Results 2014 New department store exclusive brands • Peter Alexander • Seafolly • Baker by Ted Baker • Aquila New brands coming to Myer 20 March 2014 12
Slide 24: Strengthen our loyalty program
MYER Half Year Results 2014 3. Strengthen our loyalty program • Represents ~70% of sales • Highly effective tool to evaluate business including stores, brands, space, product, service and marketing • Over $23 million MYER one Reward Cards distributed, average spend on redemption of 4.0 times the car
Slide 25: Build a leading omni-channel offer
MYER Half Year Results 2014 4. Build a leading omni-channel offer Solid progress demonstrated by key metrics • Continued strong growth in online sales, climbing store rankings • Increased sales via mobile devices (phone and tablet) AA • Online basket size and order value increased • Conversion impro
Slide 26: Optimise our store network
MYER Half Year Results 2014 5. Optimise our store network • Store network integral to omni-channel strategy • New stores due to open 1H FY15: Joondalup (WA), Mt Gravatt (QLD) • Greenhills (NSW) confirmed with a planned opening in FY17 • Decision not to proceed with Plenty Valley (VIC) • Store closur
Slide 27: Improving the productivity of our network
MYER Half Year Results 2014 Improving the productivity of our network Historical SLA/GLA ratio – Myer store network • Targeting improved SLA/GLA 71.9 72.0 ratio via: 70.9 71.0 1. Productive new stores 71.0 2. Refurbishments 70.0 3. Store closures 69.0 4. Space hand backs • Continued comparable sales
Slide 28: Strategic initiatives and Outlook
MYER Half Year Results 2014 Strategic initiatives • Ongoing strategic review to optimise competitiveness in changing retail environment • David Jones merger proposal represents unique opportunity • Significant analysis undertaken • All stock nil premium merger to unlock substantial synergy value • A
Slide 29: Historical sales including concessions
MYER Half Year Results 2014 20 March 2014 BERNIE BROOKES CEO and Managing Director MARK ASHBY Chief Financial Officer Image: Piper and Wayne by Wayne Cooper (Myer Exclusive Brands) Historical sales including concessions 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Total sales 649.1 766.0 688.0 1,044.4 65
Slide 30: Indicative new stores
MYER Half Year Results 2014 Indicative new stores* By anticipated opening FY2015 FY2016 FY2017 Existing stores * Subject to variation and review APPENDIX / 37 Jennifer Hawkins: Kris Smith: Kate Peck: Face of Myer Ambassador Ambassador Lauren Phillips: Laura Dundovic: Jodi Anasta: Ambassador Ambassad
Slide 31: Disclaimer
MYER Half Year Results 2014 Disclaimer All numbers are unaudited. The financial information includes non-IFRS information which has not been specifically audited in accordance with Australian Accounting Standards but has been extracted from the Half Year Financial Report (Appendix 4D). This release