Harvey Norman Holdings Ltd · ASX:HVN
Harvey Norman — FY2015 Earnings Presentation
22 slides from Harvey Norman's earnings presentation, Aug 28, 2015
Slide 1: Presentation of Results for the Year Ended 30 June 2015
Harvey Norman HOLDINGS LIMITED 4 PRESENTATION OF RESULTS FOR THE YEAR ENDED 30" JUNE 2015
Slide 2: Contents
2 Page 4 Key Financial Highlights 5 Key Drivers of Improved Profitability For personal use only 6 Strategy 9 Global Sales Revenue 10 Franchisee Sales Revenue 11 Review of the Income Statement for the year ended 30 June 2015 13 Review of the Balance Sheet as at 30 June 2015 15 Review of the Statement
Slide 3: Harvey Norman - Solutions for Every Room in the Home
Study Take care of HARVEY NORMAN - SOLUTIONS FOR EVERY ROOM IN THE HOME business at ho! Truly the one-stop destination, Harvey Norman offers a range of solutions for every room - superb quality and style in the living room, comfort and support you need in the bedroom, the latest innovative technolog
Slide 4: Key Financial Highlights
4 FY2015 FY2014 Incr/(Decr) For personal use only EBIT $410.97m $337.50m +21.8% EBIT Margin %1 15.12% 13.25% +187 bps PBT $369.37m $312.71m +18.1% (excluding property revaluations2) PBT $378.10m $301.06m +25.6% (including property revaluations) NPAT $261.84m $220.10m +19.0% (excluding property reval
Slide 5: Key Drivers of Improved Profitability
5 For personal use only Main factors impacting net profit before tax: a 39.4% (+$56.64m) increase in the profitability of the franchising operations segment to $200.36m due to: 7.2% (+$47.44m) increase in franchise fees; -21.2% (-$21.84m) decrease in tactical support provided to franchisees
Slide 6: Strategy: Property Foundation of the Integrated Model
6 Property: the foundation upon which the Harvey Norman integrated model is built and the basis For personal use only for our success attracts additional customers to Harvey Norman complexes through a mix of tenants; steady and reliable income stream from market-based rents and outgoings; and
Slide 7: Omni Channel Strategy
7 Omni Channel Strategy provides a For personal use only seamless experience across physical stores and digital interfaces, creating a leading Australian integrated retail network. Platform (online, mobile, social) distinctions increasingly meaningless; one digital experience Geographically dist
Slide 8: Update on Initiatives Implemented in FY15
8 For personal use only Update on 2 initiatives implemented in FY15 1. Merchandise, inventory and supplier management: deployment of various modules of system by franchisees is progressing on time and within budget implementation of enhanced real-time analytics to provide franchisees with data t
Slide 9: Global Sales Revenue
9 For personal use only Global Sales Increase / (Decrease) in Constant Local Currencies – TOTAL SALES Headline Sales 1Q2015 2Q2015 3Q2015 4Q2015 YTD 2015 Increase / (Decrease) % vs vs vs vs vs 1Q2014 2Q2014 3Q2014 4Q2014 YTD 2014 Australia $A 1.8% 2.1% 5.2% 6.1% 3.7% New Zealand $NZ 6.4% 7.4% 7.9% 4
Slide 10: Franchisee Sales Revenue
10 headline Australian franchisee sales revenue increased 3.7% to $4.95bn in FY15 vs $4.77bn in FY14 For personal use only like-for-like franchisee sales increased 4.5% to $4.92bn in FY15 vs $4.71bn in FY14 Q4 of FY15 marked the 10th consecutive quarter-on-quarter increase in Australian franch
Slide 11: Review of the Income Statement: Total Revenues
11 Total Revenues FY2015 FY2014 Incr/(Decr) % For personal use only Sales Revenue* $1,617.15m $1,513.66m +$103.50m +6.8% Gross Profit $490.26m $448.77m +$41.49m +9.2% Revenues & Other Income $1,101.29m $1,033.62m +$67.66m 6.5% * Includes the sales revenue of company-operated stores in NZ, Singapore,
Slide 12: Review of the Income Statement: Expenses & Profit
12 Expenses & Profit FY2015 FY2014 Incr/(Decr) % For personal use only Total Expenses ($1,222.10m) ($1,198.83m) -$23.27m -1.9% Share of JV investments $8.66m $17.50m -$8.84m -50.5% Profit Before Tax $378.10m $301.06m +$77.04m +25.6% Income Tax Expense ($109.19m) ($88.82m) -$20.36m -22.9% Non-Control
Slide 13: Balance Sheet: Key Stats
BALANCE SHEET: KEY STATS NET DEBT TO EQUITY RATIO | IMPROVEMENT IN NET DEBT TO EQUITY RATIO DOWN FROM 22.40* TO 19.88" $2,378.59m oo ae 7.69" LOW NET DEBT as ne TO EQUITY RATIO Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun i1 Juni2 Juni3 Jun44 Juni5 = Juni1 Jun12 Juni3 Jun 14 Jun 15 NET DEBT TO EQUITY RATI
Slide 14: Review of the Balance Sheet
14 2011 2012 2013 2014 2015 For personal use only Total Assets $3.98bn $3.92bn $4.04bn $4.21bn $4.36bn Return on Total Assets % 6.34% 4.39% 3.52% 5.03% 6.15% Total Liabilities $2.21bn $1.66bn $1.67bn $1.72bn $1.80bn Net Assets $2.23bn $2.27bn $2.36bn $2.49bn $2.56bn Return on Net Assets %* 11.50% 7.
Slide 15: Statement of Cash Flows: Operating Cash Flows
15 FY2015 FY2014 Incr/(Decr) % For personal use only Operating Cash Flows $340.45m $338.94m +$1.51m +0.45% Operating cash $116.77m increase in receipts from customers due to higher sales revenue generated by company- flows by operated stores by $103.49m in FY15. $1.51m $3.52m decrease in inter
Slide 16: Statement of Cash Flows: Investing and Financing
16 FY2015 FY2014 Incr/(Decr) % For personal use only Investing Cash Flows ($81.80m) ($113.12m) +$31.31m +27.7% Financing Cash Flows ($220.60m) ($235.21m) +$14.62m +6.2% Net Increase/(Decrease) in Cash Flows $38.05m ($9.40m) +$47.44m Cash & Cash Equivalents At Beginning of the Year $115.17m $124.57m
Slide 17: Franchising Operations Segment
17 FY2015 FY2014 Incr/(Decr) % For personal use only Franchising Operations Revenue $870.80m $814.02m +$56.78m +7.0% Franchising Operations Result $200.36m $143.72m +$56.64m +39.4% Franchising Operations Margin % 4.05% 3.01%
Slide 18: Franchising Operations: Complexes and Revenue
18 Franchised Complexes 2013 2014 2015 For personal use only Number of franchised 206 198 194 complexes in Australia Openings during year +7 HN - +1 HN +1 DM - - Rebranded during year - - +1 DM Closures during year -13 HN -7 HN -2 HN -2 JM -1 JM -4 JM Number of franchisees in Australia 696 677 678 F
Slide 19: Property Segment
19 Total Property Segment FY2015 FY2014 Incr/(Decr) % For personal use only Property Revenue $236.13m $219.42m +$16.72m +7.6% Net Property Revaluation Adjust. $8.73m ($11.65m) +$20.38m +175% Property EBITDIA $163.17m $152.06m +$11.11m +7.3% Property Result Before Tax $135.19m $123.67m +$11.53m +9.3%
Slide 20: Company-Operated Retail Segment
20 For personal use only Company- $57.54m increase in NZ revenue due to: operated retail $63.45m increase in sales due to new store opening at Napier (Sep-14) and full year‟s trading of revenue ↑by Hornby & Tauranga stores (opened FY14), favourable economic conditions and robust housing $98.10m
Slide 21: Outlook
21 For personal use only Investment in the realisation of further operational efficiencies, and ongoing enhancement of the Omni Channel service offering will see margins improve and enable additional market share gains by franchisees in Australia and company-operated stores in international market
Slide 22: For personal use only
For personal use only
Harvey Norman Holdings — FY2015 Earnings Presentation on 6ix