Myer Holdings Limited · ASX:MYR
Myer — FY2018 Earnings Presentation
27 slides from Myer's earnings presentation, Sep 12, 2018
Slide 1: Full Year 2018 Results and Refinancing
12 September 2018 Full Year 2018 Results and Refinancing Myer Holdings Limited (MYR) today announced its financial results for the 52 weeks to 28 July 2018 reporting Net Profit After Tax (NPAT) of $32.5 million before implementation costs and individually significant items. Myer Chairman, Garry Houn
Slide 2: Second Half 2018 Results
Second Half 2018 Results During the second half, sales were down 2.6% to $1,380.9 million. Comparable store sales were down 2.4%. Operating gross profit was $539.0 million, which represented an improvement on last year. Operating gross profit margin improved by 109 basis points to 39.0% in the secon
Slide 3: Customer First Plan
“Later this month, we will launch our new Myer website, which will significantly enhance the overall user experience, in particular on mobile devices, with improved and faster search capability, clearer filtering and navigation, improved presentation of merchandise and clearer, more engaging brand a
Slide 4: Myer shares are traded on the Australian Securities Exchange (MYR)
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). The financial information provided includes non-IFRS information which have not been audited or reviewed in a
Slide 5: Table 1: Profit & Loss Statement for the 52 weeks to 28 July 2018
Table 1: Profit & Loss Statement for the 52 weeks to 28 July 2018 FY2018 FY2017 Change vs. LY Change vs. LY $m $m ($m) (%) Total Sales 3,100.6 3,201.9 (101.3) (3.2%) Concessions 654.0 701.7 (47.7) (6.8%) Myer Exclusive Brands 517.2 546.8 (29.6) (5.4%) National Brands and other 1,929.4 1,953.4 (24.0)
Slide 6: Table 2: Balance Sheet as at 28 July 2018
Table 2: Balance Sheet as at 28 July 2018 July 2018 July 2017 $m $m Inventory 367 372 Other Assets 35 30 Less Creditors (381) (380) Less Other Liabilities (239) (282) Property 23 24 Fixed Assets 401 436 Intangibles 485 986 Total Funds Employed 691 1,186 Comprising of: Debt (149) (143) Less Cash 42 3
Slide 7: Table 4: Other Statistics and Financial Ratios
Table 4: Other Statistics and Financial Ratios FY2018 FY2017 Return on Total Funds Employed* 5.9%** 8.9% Gearing 15.5%** 9.5% Net Debt/EBITDA* 0.72x 0.58x *Calculated on a rolling 12 months basis **ROFE 4.7% and Gearing 9.0% if goodwill and brand impairment is excluded from Total Funds Employed Tabl
Slide 8: John King, Chief Executive Officer; Nigel Chadwick, Chief Financial Officer
JOHN KING NIGEL CHADWICK CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Slide 9: The Agenda
MYER THE AGENDA Introduction FY2018 Results Customer First Plan Conclusion
Slide 10: FY2018 Results
FY2018 Results FY2018 Results: - Total sales down 3.2% to $3,100.6 million, total online sales of $239.4 million’ Operating gross profit margin up 8bps to 38.2% CODB up 1.5% to $1,035.0 million, down 1.1% adjusted for Mares & David Lawrence (MDL) - NPAT $32.5 million (excluding implementation costs
Slide 11: The Agenda
MYER THE AGENDA Introduction FY2018 Results Customer First Plan Conclusion
Slide 12: FY2018 results
FY2018 results ¢ Subdued sales partly offset by continued growth in online sales Sales 3,100.6 3,201.9 (8.2%) - Comparable sales down 2.7% (1H -3.0%, OH -2.4%) oap L 1844 1,220.4 (2.9%) "Le /O. ‘ . : , OGP margin (%) 38.20 38.12 +8bps - Sales/m? (rolling 12 months basis) down 1.2% margin eo) ps to $
Slide 13: Source: Coremetrics
• - - - • • • • • • Source: Coremetrics
Slide 14: Operating Gross Profit margin stable
Operating Gross Profit margin stable * Operating gross profit impacted by 3.2% reduction in sales ¢ 8 bps improvement in rate driven by: - MEB sourcing benefits - Reduction in markdowns - Full year of MDL, post acquisition In part offset by: - lower supplier contributions from reduced purchases and
Slide 15: Cost reduction reflects ongoing focus on efficiencies
Cost reduction reflects ongoing focus on efficiencies * Excluding MDL, CODB reduced by 1.1% * Disciplined cost focus continues, reflected by business efficiencies including: - Back office efficiencies Cost of Doing Business ($ millions) . (il) - Store rostering - Space reductions - Procurement savin
Slide 16: 2H FY2018 compared to 1H FY2018
2H FY2018 compared to 1H FY2018 * Decline in comparable store sales and sales / m2 slowed in 2H Comparable Store Sales (3.0%) (2.4%) ¢ OGP margin reflects: Sales / m2? movement* (2.6%) (1.2%) Operating Gross Profit Margin 37.5% 39.0% * Product mix (increased MEBs) ae Operating Gross Profit Margin *
Slide 17: Focus on Cash
Focus on Cash * Improvement in net cash flow of $16m (vs pep) reflects reduction in CAPEX and dividends as earnings declined ¢ Disciplined working capital management continued: - Inventory reduction, down 1.5% to $366.8 million - Improvement in payables metrics Offset by: - Utilisation of onerous le
Slide 18: Net Debt Reduction and Covenant headroom
Net Debt Reduction and Covenant headroom Net Debt $ MILLIONS F2ois Opening net debt Closing net (debt) / cash Debt Covenants Fixed Charges Cover Ratio 1.79x FY2017_ FY2018 MYER * Net debt of $107 million, down $6 million (102) ¢ Headroom in current covenants (113) Minimum Shareholders’ Funds $1,073m
Slide 19: Refinancing Key Terms
Refinancing Key Terms Completed with current syndicate which is fully supportive Meets Myer’s business requirements and provides ample liquidity through seasonal cycle Stable platform whilst management works to improve the business Relaxed covenant conditions allows management flexibility to execute
Slide 20: The Agenda
MYER THE AGENDA Introduction FY2018 Results Customer First Plan Conclusion
Slide 21: Our Customer First Plan - Ensuring Myer is 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 Value Customers Come First Own Our Future Our Priorities Simplified ‘Work smarter MYER Transform customer experie
Slide 22: The Agenda
MYER THE AGENDA Introduction FY2018 Results Customer First Plan Conclusion
Slide 23: Conclusion
Conclusion Platform to deliver improvements - Strengthened Executive ‘Team and streamlined organisational structure - 9H FY2018 showed some improvement on 1H FY2018 - Online continues to perform well, with focus shifting to improving profitability - Disciplined approach to capital saw a reduction in
Slide 24: John King, Chief Executive Officer; Nigel Chadwick, Chief Financial Officer
JOHN KING NIGEL CHADWICK CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Slide 25: Appendix: Individually significant items and implementation costs
Appendix: Individually significant items and implementation costs are largely non-cash adjustments announced at 112018 INDIVIDUALLY SIGNIFICANT ITEMS AND IMPLEMENTATION COSTS | FY2ois | tHe $ MILLIONS PRE-TAX | POST-TAX | PRE-TAX | POST-TAX Restructuring and redundancy costs 9.2 6.4 6.5 4.6 Store ex
Slide 26: Appendix: Reconciliation with statutory accounts
Appendix: Reconciliation with statutory accounts $ MILLIONS EBIT INTEREST a NPAT Statutory reported result (485.8) (9.0) (486.0) Add back: Implementation Costs and Individually Significant Items Restructuring and redundancy costs 9.2 - (2.8) 6A 75 2 (2.0) 5.5 Store exit costs and other asset impairm
Slide 27: Disclaimer
claimer r 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). The financial information provided includes non-IFRS information which have not been audited or reviewed