Myer Holdings Limited · ASX:MYR
Myer — FY2019 Earnings Presentation
31 slides from Myer's earnings presentation, Sep 5, 2019
Slide 1: Full Year 2019 Results
5 September 2019 FULL YEAR 2019 RESUL TS EBITDA* UP 7.2 % TO $160.1 M ILLION Net Profit after Tax* up 2.2% to $33.2 million FY2019 Results (52 weeks to 27 July 2019) compared to last year: Total sales** down 3.5% to $2,991.8 million Comparable store sales down 1.3% excluding sales in Apple produ
Slide 2: CEO commentary on FY2019 result
Myer Chief Executive Officer and Managing Director, John King, said: “This result demonstrates our focus on profitable sales, a disciplined management of costs and cash, as well as deleveraging the business. “In the first year of the Customer First Plan, we have progressed a number of strategic init
Slide 3: Cost, cash and Customer First Plan update
The $32.6 million reduction in CODB during the year reflected improved efficiencies both in stores and at the Support Office, as well as cost savings achieved in IT, occupancy and marketing. We believe further opportunities exist to reduce costs, particularly in our supply chain. Depreciation increa
Slide 4: John King concluded: Customer First Plan focus
In the past year, we have added more than 50 new brands, increasing to 90 new brands arriving in-store by this Christmas. New brands include Oasis, Warehouse, Karl Lagerfeld Paris, Selected Femme, Selected Homme, Vero Moda, Fiorucci, Rotate by Birger Christensen, Jack London, Twisted Tailor and Acqu
Slide 5: Investor and analyst briefing
-ends- Investor and Analyst briefing A teleconference will be held for investors and analysts today at 9.30am (Melbourne time). Telephone number: +61 2 8373 3610 Conference ID: 7475367 Attendees will need to have the attached slides available for the call. In addition, attendees will need to registe
Slide 6: Appendix 1: Income Statement for the 52 weeks to 27 July 2019
Appendix 1: Income Statement for the 52 weeks to 27 July 2019 FY2019 FY2018 CHANGE CHANGE $m $m $m % Total Sales 2,991.8 3,100.6 (108.8) (3.5%) Concessions 612.2 654.0 (41.8) (6.4%) Myer Exclusive Brands 527.2 517.2 10.0 +1.9% National Brands and other 1,852.4 1,929.4 (77.0) (4.0%) Operating Gross P
Slide 7: Appendix 2: Debt Covenants
Appendix 2: Debt Covenants Covenant Covenant July FY19 July FY18 Net Leverage Ratio ≤2.25 x 0.27 x 0.72 x Fixed Charge Cover Ratio ≥1.45 x 1.64 x 1.59 x Minimum Shareholders’ ≥$400m $602m $584m Funds Net Leverage Ratio = (Gross Debt (excluding capitalised borrowing costs) less Cash)/EBITDA * Fixed C
Slide 8: Myer Full Year 2019 Results to 27 July 2019
SEPTEMBER 5 2019 MYER FULL YEAR 2019 RESULTS TO 27 JULY 2019 JOHN KING NIGEL CHADWICK CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Slide 9: Important notice and non-IFRS information
Myer shares are traded on the Australian Securities Exchange (MYR). Myer has a Sponsored Level I American Depository Receipt program which trades in the United States on OTC Markets (MYRSY). Myer’s results are reported under IFRS. This document may also include non-IFRS information (also referred to
Slide 10: Introduction, FY2019 Results, Customer First Plan, Conclusion
Introduction FY2019 Results Customer First Plan Conclusion Tokito
Slide 11: FY2019 Results Summary
FY2019 Results Summary • Total sales down 3.5% to $2,991.8 million, comparable store sales, excluding sales in Apple down 1.3% Trading • Operating Gross Profit (OGP) down 1.9% to $1,162.4 million, OGP margin up 65bps to 38.9% • Cost of Doing Business (CODB) down 3.1% to $1,002.4 million • EBITDA* up
Slide 12: Customer First Plan - progress
Customer First Plan - progress • Improved store layouts, brand adjacencies in 34 stores, 11 stores in 2H2019 Store Experience • Team Member satisfaction increased 2%; as measured by our customers ‘Only at Myer’ • Significant brand refresh currently underway in stores, Myer Exclusive Brand (MEB) mix
Slide 13: FY2019 Results
Introduction FY2019 Results Customer First Plan Conclusion Champion
Slide 14: Income statement
Income statement $ MILLIONS FY2019 FY2018 CHANGE Total Sales 2,991.8 3,100.6 (3.5%) • Sales reduction reflects focus on profitable sales Operating Gross Profit 1,162.4 1,184.4 (1.9%) • Online sales*** grew by 25.6% to Cost of Doing Business (1,002.4) (1,035.0) (3.1%) $262.3 million EBITDA* 160.1 149
Slide 15: H2 trade was challenging as expected
H2 trade was challenging as expected FY2019 1H2019 2H2019 • FY2019 comparable sales were down 1.3% if Total sales movement (YOY) (3.5%) (2.8%) (4.4%) Apple was excluded Comparable store sales (YOY) (2.9%) (2.3%) (3.8%) • Maroochydore and Castle Hill refurbished Digital sales (YOY) 21.9% 18.6% 25.6%
Slide 16: Operating gross profit margin improvement
Operating gross profit margin improvement Operating Gross Profit ($m) 1,184 • The 65bps increase in OGP margin did not offset 1,162 the sales volume decline (44) 6 • Margin was favourably impacted by; - Exit of lower margin brands - Improved online margins, including higher OGP Volume Rate & MEB Mix
Slide 17: Continuing focus on costs and efficiencies
Continuing focus on costs and efficiencies Cost of Doing Business ($m) Myer Group Cost Structure ($m) (8) 1,035 1,002 (25) 1,035 Operating Wages (10) Operating Other Costs (9) Support Office (5) (4) 1,002 (2) CODB Inflation Investment Space Store Support Marketing Procure- Other sass & bide CODB FY2
Slide 18: Improving operating cash flow
Improving operating cash flow $ MILLIONS FY2019 FY2018 EBITDA* 151.0 135.0 • Disciplined capital management continued Working capital movement (12.5) (4.4) • Working capital movement reflects utilisation Operating cash flow (before interest & tax) 138.5 130.6 of store closure related provisions and
Slide 19: Balance Sheet
Balance Sheet $ MILLIONS FY2019 1H2019 FY2018 Inventory 346.9 360.1 366.8 • Inventory continues to be well Creditors (372.7) (466.1) (381.2) managed, down 5.4% Other Assets 41.1 41.5 35.1 • Net debt as at end of period of $39 million Other Liabilities (225.8) (242.7) (238.7) • Net debt reduced by $6
Slide 20: New Lease Accounting Standard
New Lease Accounting Standard Estimated pro-forma impact of new lease accounting standards on FY20 • AASB 16 Leases effective from FY20 Balance Sheet (Transition) $m • Modified retrospective method adopted (no restatement of comparative amounts) Right-of-Use assets 1,350 – 1,550 Lease liabilities 1,
Slide 21: Significant headroom exists in all covenants
Significant headroom exists in all covenants $ MILLIONS FY2019 FY2018 Opening Net Debt (107.4) (112.8) • Headroom in covenants has improved from FY2018 Closing Net (Debt) / Cash (38.7) (107.4) Debt Covenants Fixed Charge Cover (FCCR) Ratio Minimum Shareholders’ Funds Net Leverage Ratio 1.64x $618m $
Slide 22: In Summary
In Summary • Improvements delivered in FY2019: - Improved OGP margin - Focus on simplification - NPAT* +2.2% despite lower sales, increased depreciation and interest - Operating cash flow up $8 million to $138 million, net debt reduced by $69 million • FY2020: - Disruption with brand exits, offset b
Slide 23: Customer First Plan
Introduction FY2019 Results Customer First Plan Conclusion
Slide 24: Our Customer First Plan – Australia's Favourite Department Store
Our Customer First Plan – Ensuring Myer is Australia’s Favourite Department Store Providing friendly helpful service, high quality and exclusive brands, and offering compelling value Our Values Customers Come First Own Our Future Do What’s Right One Inclusive Team Our Priorities 1 2 3 Transform cust
Slide 25: Customer First Plan: store experience and Only at Myer brands
Customer First Plan 1 Transform Customer Experience in Store 2 ‘Only at Myer’ brands and categories FY2019 Highlights FY2019 Highlights • Announced refurbishments of Belconnen and Cairns, • Exited unprofitable ranges, commenced improvements to providing an enhanced shopping experience promotional an
Slide 26: Customer First Plan: myer.com.au and efficiency levers
Customer First Plan 3 Continue enhancing myer.com.au 4 Efficiency Levers FY2019 Highlights FY2019 Highlights • New website continued to support strong growth in online • Realised benefits of Workforce Management investment; • Improved customer satisfaction through improved improved staff alignment t
Slide 27: Conclusion
Introduction FY2019 Results Customer First Plan Conclusion Aura by Tracie Ellis
Slide 28: Some good progress made on Customer First Plan, more to come
Some good progress made on Customer First Plan, more to come • FY2019 Highlights - Focus on profitable sales, disciplined management of costs and cash, and deleveraging the business all delivered results - Subdued consumer sentiment particularly in 2H2019 negatively impacted pace of change - NPAT* +
Slide 29: Myer Full Year 2019 Results to 27 July 2019
SEPTEMBER 5, 2019 MYER FULL YEAR 2019 RESULTS TO 27 JULY 2019 JOHN KING NIGEL CHADWICK CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Slide 30: Appendix 1: Reconciliation with statutory accounts
Appendix 1: Reconciliation with statutory accounts $ MILLIONS EBIT INTEREST TAX NPAT Statutory reported result 46.0 (11.5) (10.0) 24.5 Add back: Implementation costs and individually significant items Restructuring and redundancy costs 7.8 - (2.3) 5.5 Store exit costs/(reversals) and other asset imp
Slide 31: Appendix 2: Other Metrics and Financial Ratios
Appendix 2: Other Metrics and Financial Ratios FY2019 FY2018 Return on Total Funds Employed* 8.8% 5.9%** Gearing 6.0% 15.5%** * Calculated on a rolling 12 months basis; EBIT excludes implementation costs and individually significant items **ROFE 4.7% and Gearing 9.0% if goodwill and brand impairment