Wm Morrison Supermarkets — Investor Presentation (May 2013)
15 slides from Wm Morrison Supermarkets's investor presentation, May 17, 2013
Slide 1: Taking Morrisons online
Taking Morrisons online The Morrisons Difference, Delivered 17 May 2013
Slide 2: The Morrisons Difference, Delivered
The Morrisons Difference, Delivered 1 Wm Morrison Supermarkets PLC
Slide 3: Key points for today
1 2 3 Key points for today 1 Why this deal? ▪ Online is what customers want – now we can serve them there this financial year ▪ This model provides us with a clear path to profitability ▪ We are bringing our unique affordable fresh proposition to customers’ homes, leveraging a world-class technology
Slide 4: Why this deal? This is a fantastic deal for customers
1 2 3 WHY THIS DEAL? This is a fantastic deal for customers ▪ Our unique offer, online: – Customers are already shopping online, and now we’ll be there for them with a unique offer: Morrisons affordable fresh proposition and their market-leading technology, logistics and delivery platform – We’ll br
Slide 5: Why this deal? And for shareholders
1 2 3 WHY THIS DEAL? And for shareholders ▪ Strong financials: There’s a clear path to profitability ▪ Lower costs: We benefit from certainty on capital investment, as well as shared infrastructure operating costs ▪ Lower risk: We will launch with the confidence and reassurance of 11 years of online
Slide 6: The customer only sees Morrisons
1 2 3 HOW WILL IT WORK? The customer only sees Morrisons Demand Planning Suppliers Customer Morrisons.com Morrisons Manufacturing & DCs Inbound Dordon Outbound Spoke Customer Last mile 5 Wm Morrison Supermarkets PLC
Slide 7: Impact: Investment
1 2 3 WHAT WILL THE IMPACT BE? Impact: Investment INITIAL: ▪ Total investment of £216m in this FY, including: –Purchase of Dordon (£82m), 50% of equipment (£58m) – plus £16m for our share of capacity extension –Licence and integration fee: £30m –Vans, spokes and Morrisons IT integration: £30m ▪ Grou
Slide 8: Continuing operations
1 2 3 WHAT WILL THE IMPACT BE? Continuing operations ▪ R&D contribution: £8m p.a. for 2014/15 and 2015/16, then up to 1/3 of ongoing R&D costs, capped at £8m p.a. ▪ IT annual fee: 1% of sales to £1bn – reducing scale thereafter ▪ Management fee: 4% of operating costs ▪ Bonus fee: 25% of positive Mor
Slide 9: Alignment and protections
1 2 3 WHAT WILL THE IMPACT BE? Alignment and protections We have structured an agreement that has fundamentally aligned incentives and robust protections Ocado are obliged to: ▪ Provide Morrisons the best end-to-end operating model in the UK ▪ Provide Morrisons with the same standard of service as i
Slide 10: Core, Convenience and Online channels
▪ Improving promotional Morrisons, effectiveness ▪ Emphasising points of difference Core M-Local, ▪ Enhancing Own Brand ▪ Rolling out Fresh formats Morrisons.com ▪ Driving growth in our Convenience convenience network ▪ Trading 100 stores by the end of the financial year ▪ Growing in geographies whe
Slide 11: Taking Morrisons online
Taking Morrisons online The Morrisons Difference, Delivered 17 May 2013
Slide 12: Further details
FURTHER DETAILS Neen eee
Slide 13: Dordon CFC
1 2 3 HOW WILL IT WORK? Dordon CFC ▪ Dordon situated centrally in the country, with great transport connections on the M6 and M40/42 ▪ Well-placed to reach Morrisons northern heartland, as well as London and the South East 12 Wm Morrison Supermarkets PLC
Slide 14: Summary of Morrisons ongoing obligations
1 2 3 WHAT WILL THE IMPACT BE? Summary of Morrisons ongoing obligations ▪ Dordon operating costs: 50% of the fixed costs and our variable costs ▪ Management fee: 4% surcharge on Morrisons share of operational costs of services provided by Ocado COSTS ▪ IT annual fee: 1% of sales to £1bn, then reduce
Slide 15: Disclaimer and cautionary statement
Disclaimer and cautionary statement This presentation is for information purposes only Forward-looking statements involve risks and Past performance is no guide to future and does not constitute an invitation or uncertainties, because they relate to events and performance and persons needing advice
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