Super Retail Group Limited · ASX:SUL
Super Retail — H1 FY2018 Earnings Presentation
31 slides from Super Retail's earnings presentation, Feb 20, 2018
Slide 1: Results for the 26 weeks to 30 December 2017 and Adventure Outdoors Retail Strategy update
For personal use only Results for the 26 weeks to 30 December 2017 and update of Adventure Outdoors Retail Strategy Peter Birtles Group Managing Director and Chief Executive Officer David Burns Chief Financial Officer Anthony Heraghty Managing Director – Leisure Retailing Division 20 February 2018
Slide 2: Group Strategic Plan on a Page
Group Strategic Plan on a Page OUR VISION Inspiring you to live your passion For personal use only To provide solutions and engaging experiences that inspire our customers to OUR PURPOSE make the most of their leisure time Healthy, passionate Inspired, engaged Sustainable, world Top quartile OUR GOA
Slide 3: Contents
For personal use only Contents FY18 1st Half Performance FY18 2nd Half Trading Update Adventure Outdoors Strategy
Slide 4: Group Highlights
Group Highlights Total Group sales of $1.3 billion up by 2.2% on a LFL basis For personal use only • • Total Segment EBIT of $113.6 million down by 1.4% on pcp • Normalised NPAT of $74.9 million up by 0.7% on pcp • Operating cash flow of $293.7 million up by $41.7 million on pcp • Post tax return on
Slide 5: Performance Trends
Performance Trends Reported Sales ($m) Reported Total Segment EBIT For personal use only ($m) 1,296 1,324 1,216 1,159 1,096 1,037 115.2 113.6 759 99.8 101.1 94.1 93.1 562 464 61.6 413 41.4 23.6 28.3 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 08 Dec 09 Dec 10 Dec 11 Dec
Slide 6: Performance Trends: Team and Customer
Performance Trends Team For personal use only Team Engagement * Safety Team Retention Lost Time Injury Frequency Rate 71.0 71.0 75% 75% 74% 76% 68.0 13.2 8.8 6.3 6.2 Jun 15 Jun 16 Jun 17 Jun 15 Jun 16 Jun 17 Dec 17 Jun 15 Jun 16 Jun 17 Dec 17 * Measured annually Customer Average NPS * Active Club Me
Slide 7: Our Market Opportunity
Our Market Opportunity TODAY FIVE YEARS For personal use only Grow our share of Physical customers’ total Super Physical Super spending in our Market Market Retail Retail categories across Group Group product and services Build omni-retail capabilities and compete to secure our share of customers’ M
Slide 8: Group Results
Group Results 2017/18 Change on For personal use only $m PCP • Total Sales increased 2.2% on a total and LFL basis Total Sales 1,323.7 2.2% • Gross margin increased by 30 basis points across the Group reflecting transformation and supply Total Segment EBITDA 149.3 (1.0)% chain initiatives • Operatin
Slide 9: Segment Results
Segment Results For personal use only 2017/18 2016/17 Sales Segment EBIT Sales Segment EBIT $m $m $m $m Auto Segment 516.7 55.7 489.2 53.6 Leisure Segment 299.1 16.4 311.0 20.6 Sports Segment 503.8 51.7 490.5 50.9 Group & Unallocated 4.1 (10.2) 4.8 (9.9) Total Segment Result 1,323.7 113.6 1,295.5 11
Slide 10: Auto Retailing
Auto Retailing For personal use only 2017/18 Change on • Strong like for like sales growth of 3.5% driven by $m PCP unit and ATV growth • Positive like for like sales growth across Auto Sales 516.7 5.6% Accessories, Auto Maintenance and Tools & Outdoor categories LFL Sales growth 3.5% • Digital sale
Slide 11: Leisure Retailing
Leisure Retailing • Total sales decrease reflects closure of Ray’s Outdoors stores in pcp For personal use only 2017/18 Change on • Digital sales growth of 122% across the Division – $m PCP market share of digital spending in Leisure retailers increase of 5.6% pts to 14.4% (1) Sales 299.1 (3.8)% • B
Slide 12: Sports Retailing
Sports Retailing • Creditable result given the disruption from converting 68 Amart Sports stores to Rebel For personal use only during the period 2017/18 Change on $m PCP • As anticipated, sales performance in former Amart Sports stores has strengthened in NSW Sales 503.8 2.7% and Vic and weakened i
Slide 13: Group & Unallocated
Group & Unallocated 2017/18 Change on For personal use only $m PCP • Group and Unallocated includes: Sales 4.1 (14.6)% • Corporate costs not allocated to segments • Commercial operations $m • Digital businesses EBIT (10.2) (0.3) • Corporate costs reflect reduced incentive provisions in line with com
Slide 14: Group Cash Flow
Group Cash Flow 2017/18 2016/17 For personal use only $m $m • Operating cash flow (pre store set up investment) Operating cash flow is circa $30.0 m higher than pcp driven by sales (pre store set up 303.8 273.8 growth and working capital initiatives investment) • Strong underlying operating cash flo
Slide 15: Group Balance Sheet
Group Balance Sheet Dec 17 Jun 17 For personal use only $m $m • Working capital management has focused on Inventory improved inventory performance with Auto and Leisure achieving lower inventory balances on - Auto Retailing 199.2 187.7 pcp - Leisure Retailing 144.0 126.9 - Sports Retailing • Sports
Slide 16: Returns & Capital Ratios
Returns & Capital Ratios • Normalised EPS of 38.0c, an increase of 0.8% on 2017/18 2016/17 For personal use only pcp Normalised EPS 38.0c 37.7c • Normalised fixed charge cover ratio, calculated on a rolling12 month basis Basic EPS 36.6c 37.7c • Average net debt improvement is due to working capital
Slide 17: FY18 Segment Note
For personal use only FY18 Segment Note 17
Slide 18: FY17 Segment Note
For personal use only FY17 Segment Note 18
Slide 19: Contents
For personal use only Contents FY18 1st Half Performance FY18 2nd Half Trading Update Adventure Outdoors Strategy
Slide 20: 2nd Half Trading Update
2nd Half Trading Update Auto Retailing For personal use only • LFL sales growth in the first 7 weeks of second half circa 4.5% • Supercheap Auto store development: plan to open 4 new stores and close 4 stores, 5 store refurbishments Leisure Retailing • LFL sales growth in the first 7 weeks of second
Slide 21: Contents
For personal use only Contents FY18 1st Half Performance FY18 2nd Half Trading Update Adventure Outdoors Strategy
Slide 22: Executive Summary
Executive Summary Super Retail Group to launch integrated adventure offering through the acquisition of Macpac. For personal use only Super Retail Group has determined that the most value accretive strategy in the adventure outdoors sector is to acquire, consolidate and grow The Group has agreed
Slide 23: The Australian Outdoor Market
The Australian Outdoor Market The Australian outdoor market consists of two clear segments: leisure and adventure. BCF is a For personal use only strong player in leisure; adventure is an attractive and underserviced opportunity. Total Outdoor Market (~A$3.5b) Leisure Consumer Adventure Consumer (~A
Slide 24: Evolution of our adventure outdoors strategy
Evolution of our adventure outdoors strategy Fishing deletion For personal use only Rays (Urban Stores) LFL% - Rolling 12 mths 15.0% Workwear de-ranging Caravan & 4WD de-ranging 10.0% Ray’s Outdoors Strategic Review 5.0% 0.0% New adventure ranging -5.0% refurbishments -10.0% Aged inventory clearance
Slide 25: Adventure Outdoors Strategy: Macpac
Adventure Outdoors Strategy: Macpac Super Retail Group’s vision is to be Australia and New Zealand’s favourite adventure outdoors For personal use only retailer, offering apparel and equipment across online, mall stores and new one-stop megastores under the Macpac brand OUR FIVE YEAR VISION: Vision
Slide 26: History
History The Macpac brand was founded by Bruce McIntyre in 1973 in Christchurch, New Zealand, with the For personal use only goal of making more practical, technical and superior quality backpacks 1973 1979 1982 1989 2008 2016 2018 Bruce McIntyre Started selling Merged with Started selling Bruce McIn
Slide 27: About Macpac
About Macpac A leading Australasian vertically integrated, outdoor adventure retailer of apparel and equipment For personal use only • One of New Zealand’s most recognisable 54 stores across Australia and New Zealand leisure brands, with growing presence in Australia • Products sold through 54 retai
Slide 28: Why Macpac?
Why Macpac? For personal use only Heritage brand with deep roots in adventure NZ heritage brand, which resonates globally Strong reputation for technical expertise Established loyalty club ‘Macpac Club’ with ~330,000 members Strong apparel private label capabilities In-house apparel design a
Slide 29: Why Macpac?
Why Macpac? For personal use only Experienced management team Management team with depth of experience in retail and track record of success Contributed to formulation of the strategy and incentivised to achieve it Opportunity to increase revenue and profit Small format store roll-out Megast
Slide 30: Clear roadmap for sustained growth
Clear roadmap for sustained growth For personal use only Near term Medium term Macpac new store roll out Commence integration: Roll-out megastores and small format stores Launch new website Transition Rays to Refine megastores Macpac control Supply chain integration and optimisation st
Slide 31: Appendix
Appendix Quantium NAB Data Disclaimer: This report comprises, and is the subject of intellectual property (including copyright) and For personal use only confidentiality rights of one or multiple owners, including The Quantium Group Pty Limited (Quantium) and where applicable, its third- party data