Metcash Limited · ASX:MTS
Metcash — FY2021 Earnings Presentation
37 slides from Metcash's earnings presentation, Jun 28, 2021
Slide 1: FY21 Full Year Results
FY21 Full Year Results 28 June 2021
Slide 2: About Metcash
About Metcash Our purpose Our vision Our values Best store in town We believe: Independence is worth fighting for; in treating Passionate about independents our people, retailers and suppliers the way we like A favourite place to work to be treated; and in giving back to the communities where we Bus
Slide 3: Group re-focused strategic direction
Group re-focused strategic direction Customer & Community Easy to do business with Shopper-led offer Business partner of choice for suppliers Lean, low cost operating model & supply chain INCREASED RETAILER COMPETITIVENESS DRIVING SHAREHOLDER VALUE FY20 Full Year Results FY21 Full Year Results 2
Slide 4: Improvement in ESG credentials
Improvement in ESG credentials Our commitment Environment & Climate Communities & Products Our People • Greenhouse Gas (GHG) emissions • Donations to local community • Safety performance slightly below We are committed to the reduced 14% to 72,948 CO2e organisations ~$3m via IGA FY20 reflecting incr
Slide 5: Group overview and divisional results
Group overview and divisional results Jeff Adams Group Chief Executive Officer FY20 Full Year Results 4 FY21 Full Year Results 4
Slide 6: Group highlights – a standout year
Group highlights – a standout year Record sales underpinning significant earnings growth and record operating cash flow Group revenue Group EBIT Strong sales growth in all Pillars driven by shift in consumer ↑9.9% ↑ 19.9% behaviour and success of MFuture to $14.3bn to $401.4m ↑ 10.1% to $16.4bn incl
Slide 7: Group highlights – a standout year
Group highlights – a standout year Significant return of capital to shareholders while continuing to invest in future growth Disciplined capital management FY21 acquisitions delivering attractive returns – includes Total Tools and Kollaras private label Target dividend brands payout ratio ↑ from 60%
Slide 8: Results overview by pillar
Results overview by pillar FY21 FY20 Change Sales revenue (%) $m $m % (including charge-through sales1) Sales revenue (including charge-through sales) 16% 14% Food 9,389.7 9,103.7 3.1% Liquor 4,383.2 3,678.4 19.2% 57% 25% 27% 61% Hardware 2,588.2 2,075.0 24.7% Total sales revenue (including charge-t
Slide 9: Food – sales
Food – sales Total Food sales (including charge-through) increased 3.1% to ~$9.4bn (+11.0% ex Drakes1 and FY21 FY20 Change 7-Eleven impact ) 2 $m $m % Supermarkets sales increased 10.0% (+11.6% ex Drakes impact1)3 Food 1 10mths to Feb 2021 +16.7% (ex Drakes impact ) Revenue (including charge-t
Slide 10: Food – EBIT
Food – EBIT Total Food EBIT increased $9.7m or 5.3% to $192.4m reflecting: FY21 FY20 Change $m $m % Strong volume growth Increased contribution from joint venture stores Total revenue1 (including charge-through) 9,389.7 9,103.7 3.1% EBIT improved by ~$20m or ~11% after adjusting for: EBIT 19
Slide 11: Food – MFuture initiatives going forward
Food – MFuture initiatives going forward Network of the future eCommerce and Loyalty Supply Chain • Network refresh with national brand standards • Accelerate eCommerce for IGA retailers including • Building capability to expand ranges via Direct and more consistent offer by format rollout of latest
Slide 12: Liquor – sales
Liquor – sales Total sales (including charge-through) increased a significant 19.2% to $4.4bn reflecting FY21 FY20 Change $m $m % Continued strong demand in the retail network with higher average transactions, basket size and spend Total revenue as per Statutory Accounts 4,374.3 3,670.3 19.2%
Slide 13: Liquor – EBIT
Liquor – EBIT EBIT increased a significant $15.9m or 21.8% to $88.7m FY21 FY20 Change $m $m % Contribution from significant sales growth Total revenue1 (including charge-through) 4,383.2 3,678.4 19.2% Costs continued to be well managed EBIT 88.7 72.8 21.8% EBIT margin in line with prior year
Slide 14: Liquor – MFuture initiatives going forward
Liquor – MFuture initiatives going forward Digital Drive brand awareness Owned & Supply chain flexibility transformation and appeal Exclusive brands (O&E) and efficiency • Integrated POS – enabling closed • Brand positioning – giving • Leverage acquisition of Kollaras • Partner with key suppliers to
Slide 15: Hardware – sales
Hardware – sales Total sales (including charge-through) increased 24.7% to $2.6bn largely reflecting significant FY21 FY20 Change growth in DIY sales and a return to growth in Trade $m $m % Total IHG sales (excludes Total Tools Holdings1) increased 17.9% (FY20: -1.3%) Total revenue as per Statut
Slide 16: Hardware – EBIT
Hardware – EBIT Substantial increase in EBIT, up $51.8m or 61.5% to $136m, driven by: FY21 FY20 Change $m $m % Strong growth in sales volumes, particularly DIY Increased contribution from company-owned / joint venture stores Total revenue1 (including charge-through) 2,588.2 2,075.0 24.7% Acq
Slide 17: IHG – MFuture initiatives going forward
IHG – MFuture initiatives going forward GROW IN DIY BUILD TRADE Continue to open Trade Centre Expanding Sapphire store upgrade program from – Sapphire stores to support 200 to 300 stores by 2025 goal of being #1 in Trade. Targeting 50 Trade Centres by PROTECT FY24 & GROW Continued focus on STORE Exp
Slide 18: Total Tools – key drivers of future growth
Total Tools – key drivers of future growth Grow Store Online JV Conversions Customer Synergies Network • Strong growth • Website enhancement • Successfully completed • Complete ‘Generation 2’ • Joint ranging and opportunities of 8-10 • Endless aisle acquisition of 12 JV store upgrades sourcing oppor
Slide 19: Group financials
Group financials Alistair Bell Group Chief Financial Officer FY20 Full Year Results 18 FY21 Full Year Results 18
Slide 20: Profit & Loss
Profit & Loss FY21 FY20 Change $m $m % Sales revenue including charge-through sales 16,361.1 14,857.1 10.1% Charge-through sales (2,045.8) (1,831.7) 11.7% Sales revenue per statutory accounts 14,315.3 13,025.4 9.9% 1 EBITDA 565.1 492.1 14.8% Depreciation and amortisation (163.7) (157.2) 4.1% EBIT 40
Slide 21: Cashflows
Cashflows FY21 FY20 $m $m Net cash from operating activities1 475.5 117.5 Net cash used in investing activities (171.7) (36.4) Capital expenditure (85.6) (61.5) Acquisitions of businesses (143.1) (29.7) Proceeds from sale of businesses / assets and net loan movements 12.7 9.6 Receipts from subleases
Slide 22: Balance Sheet
Balance Sheet 30 April 30 April 2021 2020 Capital Expenditure ($m) $m $m 300 Trade receivables and prepayments 1,607.8 1,559.0 200 Inventories 1,008.0 1,032.2 Trade payables and provisions (2,234.4) (2,181.9) 100 Net working capital 381.4 409.3 0 Intangible assets 729.1 581.8 FY17 FY18 FY19 FY20 FY2
Slide 23: Debt management
Debt management FY21 FY20 Debt facility maturity profile1 $m $m 400 Net cash 350 300 Gross debt - (188.4) 250 Cash and cash equivalents 124.6 275.1 200 $m Net cash 124.6 86.7 150 100 50 Debt metrics and ratios 0 FY22 FY23 FY24 FY25 FY26 Weighted average debt maturity 2.0 years 1.8 years Working capi
Slide 24: Capital management – up to ~$175m Off-Market Buy-Back
Capital management – up to ~$175m Off-Market Buy-Back • Metcash’s strong FY21 performance reflects our ability to successfully • After considering various alternatives for returning excess capital, the Board navigate significant COVID related challenges and uncertainty, while determined an off-marke
Slide 25: Capital management – Off-Market Buy-Back
Capital management – Off-Market Buy-Back • Target size 1 Up to ~$175m • Discount 8% - 14% of Market Price (5 day VWAP to 13 August 2021) • Composition Capital component: $0.85 per share Balance is a fully franked dividend • Key dates (refer Appendix 3) 30 June: Last day shares can be acqui
Slide 26: Dividends
Dividends Increase in target payout ratio from 60% to 70% of underlying net profit after tax (effective FY21) Distributions FY21 final dividend 9.5 cents per share, fully franked (FY20: 6.5c) 300 20 Ex-dividend date: 1 July 2021 250 150 Record date: 2 July 2021 200 Payment date: 11 Augus
Slide 27: Group outlook
Group outlook Jeff Adams Group Chief Executive Officer FY20 Full Year Results 26 FY21 Full Year Results 26
Slide 28: Outlook
Outlook Group The Group has continued to benefit from the shift in consumer behaviour with strong sales in the first eight weeks of FY22 Sales comparisons will be provided against FY20 (in addition to FY21) where appropriate to assist disclosure of performance excluding significantly higher sale
Slide 29: Outlook continued
Outlook continued Liquor Very strong sales have continued in the first eight weeks of FY22, increasing 26.0% compared with the same period in FY20, and 17.3% compared with the same period in FY21 The significant uplift reflects continued strong demand across retail stores and an improvement in s
Slide 30: Appendices
Appendices 1. Financial history 2. Bannered store numbers 3. Buy-Back timetable 4. Total Tools accounting FY20 Full Year Results 29 FY21 Full Year Results 29
Slide 31: Financial history
1. Financial history FY21 FY20 FY191 FY181 FY171,2 Financial Performance Sales revenue ($m) 14,315.3 13,025.4 12,660.3 12,442.2 12,293.0 EBIT($m) 401.4 334.9 330.0 334.6 304.8 Net finance costs ($m) (42.6) (52.0) (28.9) (26.4) (33.6) Underlying profit after tax ($m) 252.7 198.8 210.3 216.9 194.8 Rep
Slide 32: Bannered store numbers
2. Bannered store numbers April April 2021 2020 Pillar Supermarkets 1,641 1,623 Convenience 16 16 Liquor 2,838 2,679 Hardware 731 650 Total 5,226 4,968 Supermarkets Convenience Liquor Hardware Total Store movement Number of stores at April 2020 1,623 16 2,679 650 4,968 Stores opened / joined banner
Slide 33: Bannered store numbers
2. Bannered store numbers April April 2021 2020 Supermarkets Supa Valu IGA 2 - Core IGA 1,084 1,094 Small Format IGA 254 243 Total IGA bannered stores 1,340 1,337 Friendly Grocer / Eziway 301 286 Total Supermarkets 1,641 1,623 Liquor Cellarbrations 548 543 Bottle-O & Bottle-O Neighbourhood 250 232 I
Slide 34: Off-Market Buy-Back timetable
3. Off-Market Buy-Back timetable Announcement of Buy-Back 28 June Last day shares can be acquired to be eligible to participate in the Buy-Back and to qualify for franking credit 30 June entitlements in respect of the Buy-Back consideration Buy-Back ex-entitlement date 1 July Buy-Back record date 2
Slide 35: Total Tools accounting
4. Total Tools accounting Metcash is required to consolidate 100% of Total Tools Group earnings (with no non-controlling interest) and 100% of Total Tools Group balance sheet, notwithstanding: Metcash’s ownership interest of 70% in Total Tools Holding (TTH), acquired 1 September 2020 TTH’s own
Slide 36: Disclaimer
Disclaimer This presentation contains summary information about Metcash Limited (ABN 32 112 073 480) (Metcash) and its activities current as at the date of this presentation. The information in this presentation is of general background and does not purport to be complete. It should be read in conju
Slide 37: Championing Successful Independents
Championing Successful Independents