Lewis Group Limited · JSE:LEW
Lewis — H1 2010 Earnings Presentation
23 slides from Lewis's earnings presentation, November 2009
Slide 1: Results Presentation for the 6 months ended 30 September 2009
RESULTS PRESENTATION For the 6 months ended 30 September 2009 september 2009 1
Slide 2: Agenda
AGENDA 1. Overview of Results 2. Debtor Analysis 3. Summary Financial Results 4. Board and Management 5. Outlook 6. Questions 2
Slide 3: 1. Overview of Results
1. OVERVIEW OF RESULTS 3
Slide 4: Overview of Results
Overview of Results R1 946m 21.8% R424m 290.5c 144c + 7.9% 21.8% + 4.3% - 3.9% Maintained Revenue Operating Operating Headline Dividend Margin Profit Earnings per per Share Share 4
Slide 5: Overview of Results (cont'd)
Overview of Results (cont’d) 1. Improving sales trend since year end – up 6.8% Furniture & appliances (80% of business) – up 7.8% Electronic sales (20% of business) – up 2.8% 2. Exclusivity of merchandise a key focus New ranges launched. 3. Extended furniture range in Best Home and Electric 4. Small
Slide 6: Overview of Results (cont'd)
Overview of Results (cont’d) 5. Improving Credit/Cash mix – 68.5% (H1-09: 65.8%) 6. Gross profit margin improved to 33.5% (H1-09: 33.1%) 7. Debtor costs 5% of net Debtors (H1-09: 4.5%) 8. Cost of forward cover R30 million 9. Costs tightly managed 6
Slide 7: 2. Debtor Analysis
2. DEBTOR ANALYSIS 7
Slide 8: Debtor Costs
Debtor Costs H1/2010 H1/2009 Rm Rm Total Debtor costs 189 143 Bad debts written off 53 51 Provision for doubtful debts 136 92 Debtor costs as a % of net debtors 5.0% 4.5% 8
Slide 9: Doubtful Debt Provision
Doubtful Debt Provision H1/2010 H1/2009 Rm Rm Net Debtors before DD prov. 3 738 3 154 Doubtful debt provision 668 488 Doubtful debt provision % 17.9% 15.5% Credit application decline rate 27.4% 24.5% IAS 39 – Net present value of expected cash flow discounted at interest rate applicable to contract
Slide 10: Debtor Payment Analysis
Debtor Payment Analysis NUMBER OF CUSTOMERS DOUBTFUL DEBT PROVISION MARCH H1/2010 H1/2009 H1/2010 H1/2009 '09 Satisfactory paid Customers fully up to date No 491 614 515 471 including those who have paid 70% or more of amounts due over the 0% 0% 0% contract period % 69.6% 72.5% Slow payers Customers
Slide 11: Analysis of NCA Business
Analysis of NCA Business Number of Customers NCA NCA 24 Months Over 24 Months Satisfactory paid Customers fully up to date including those No. 262,566 228,068 who have paid 70% or more of amounts due over the contract period. % 76.7% 82.4% Slow payers Customers who have paid between 70% and No. 24,3
Slide 12: 3. Summary Financial Results
3. SUMMARY FINANCIAL RESULTS 12
Slide 13: Income Statement
Income Statement H1/2010 H1/2009 % Rm Rm Revenue 1 946 1 803 7.9% Merchandise sales 951 890 6.8% Gross profit margin % 33.5% 33.1% Operating profit 424 407 4.3% Operating margin % 21.8% 22.6% Attributable earnings 261 270 (3.3%) EPS (cents) 297 305 (2.6%) Headline EPS (cents) 290 302 (3.9%) 13
Slide 14: Segmental Analysis
Segmental Analysis Best Home Lifestyle H1/2010 Group Lewis Electric Living Revenue (Rm) 1 946 1 644 239 63 Revenue growth (%) 7.9% 7.9% 10.2% 0.8% Operating profit (Rm) 424 377 46 1 Operating margin H1:10 21.8% 23.0% 19.3% 1.1% H1:09 22.6% 23.9% 20.7% (3.7%) Number of stores 539 431 89 19 IFRS8: OPE
Slide 15: Business Split
Business Split Risk Financial Retail Services Services Group Rm Rm Rm Rm H1/2010 Revenue 1 083 292 571 1 946 Operating profit 134 76 214 424 Operating margin H1:10 12.4% 26.0% 37.5% 21.8% H1:09 12.1% 36.3% 36.0% 22.6% • Supplied for continuity purposes only. Our business is not managed in accordance
Slide 16: Analysis of Costs
Analysis of Costs (Excluding Debtor costs) H1/2010 H1/2009 Change Rm Rm % Employment costs 296 270 9.5% Admin and IT 92 87 6.6% Marketing 71 67 6.0% Occupancy costs 78 72 9.0% Transport/Travel 64 71 (9.6%) Depreciation 27 28 (4.9%) Other operating costs 72 63 14.0% Total 700 658 6.4% % of revenue 36
Slide 17: Balance Sheet Overview
Balance Sheet Overview H1/2010 H1/2009 Rm Rm Property, plant and equipment 232 207 Investments 803 707 Tax - 11 Inventory 306 269 Net Debtors after Doubtful Debts 3 147 2 705 Cash 67 99 Total Assets 4 555 3 998 Shareholders’ equity and reserves 3 049 2 751 Retirement benefits 55 60 Tax and Deferred
Slide 18: Capital Ratios
Capital Ratios H1/2010 H1/2009 Gearing ratio (%) 27.4% 24.2% Share repurchases (Rm) - 51 Interim dividend declared (cents) 144 144 ROE – after tax (%) 17.6% 19.8% ROCE – after tax (%) 16.4% 17.2% ROA – before tax (%) 21.0% 22.6% 18
Slide 19: 4. Board and Management
4. BOARD AND MANAGEMENT 19
Slide 20: Board and Management
Board and Management • Johan Enslin appointed CEO and executive director • Alan Smart retired and appointed non executive director • Further two non executive directors appointed Ave length of service • Six operating board members 12 • Four operations general managers 19 • Twelve divisional general
Slide 21: 5. Outlook
5. OUTLOOK Group Ltd
Slide 22: Outlook
Outlook • Trading prospects. • Gross profit expected to improve in H2. • Management of the debtor book the top priority. • More aggressive store expansion: Small store concept - exciting opportunity FY 2010 15 - 20 stores FY 2011 30 - 40 stores 22
Slide 23: 6. Questions
6. QUESTIONS 23