Myer Holdings Limited · ASX:MYR
Myer — H1 2021 Earnings Presentation
31 slides from Myer's earnings presentation, Mar 4, 2021
Slide 1: Half Year 2021 Results
4 March 2021 For personal use only HALF YEAR 2021 RESULTS STRONG GROWTH IN GROUP ONLINE SALES1, UP 71.0% TO $287.6 MILLION NET PROFIT AFTER TAX2 UP 8.4% TO $42.9 MILLION NET CASH IMPROVED BY $98.2 MILLION TO $201.1 MILLION 1H21 RESULTS (post-AASB 16) for the 26 weeks to 23 January 2021, compared to
Slide 2: CEO commentary: sales, online, operating gross profit
Myer’s Chief Executive Officer and Managing Director, John King, said: “The first half result reflects several positive achievements including the continued strength of our online business, now representing 21% of total For personal use only sales, as well as sustained disciplined management of cost
Slide 3: MYER one, board update and briefing details
Following several enhancements to the MYER one program, there was increased engagement during the period and an increase in MYER one sales as a percentage of total sales to 69.2% at the end of the period. For personal use only The valuable data and insights from MYER one are being used to improve bu
Slide 4: Half year results to January 2021
TO 23 JANUARY 2021 FOHNEKING NIGEL-CHADWICK ‘Chief Executive Officer Chief Financial Officer
Slide 5: Important information
Important information For personal use only The information in this document is general only and does not purport to be complete. It should be read in conjunction with Myer’s other periodic and continuous disclosure announcements. Investors or potential investors should not rely on the information p
Slide 6: For personal use only
For personal use only 3
Slide 7: 1H21 Results Summary
1H21 SUMMARY 1H21 Results Summary For personal use only Record online sales continues • Group online sales 1 up 71.0% to $287.6 million • Comparable sales down 3.1% 2 ; up 6.3% if CBD stores excluded • Total sales 3 down 13.1% to $1,398.0 million, reflecting forced closures and reduced CBD traffic •
Slide 8: Operational Highlights
1H21 SUMMARY Operational Highlights For personal use only Online • Group Online Sales1 21% of sales mix in 1H21 (up 100% YoY) • Improved checkout, browse experience led to conversion uplift of 81bps • Record online customer NPS2, MYER one penetration and traffic measures MYER one • Launched $10 rewa
Slide 9: Online provides platform for future growth
1H21 SUMMARY O n l i n e p r o v i d e s p l a t f o r m f o r f u t u r e g r o wt h Group Online1 Sales For personal use only Group online1 Sales • Group online1 sales now $287.6 million, up 71.0% in 1H21 – making Myer one % of Total Group Sales 17% of Australia’s largest and fastest growing onlin
Slide 10: Achievements and macro challenges
1H21 SUMMARY Achievements and macro challenges For personal use only Achievements • Online scale and momentum has accelerated our digital transition; online performance partially mitigated impact of store closures • Online customer experience (including fulfilment) has significantly improved • More
Slide 11: 1H21 Results
Sans LUM MARY —1H21 BESUETE |
Slide 12: Income statement (post-AASB 16)
1H21 RESULTS Income statement (post-AASB 16) For personal use only $ MILLIONS 1H21 1H20 Change • Total Sales1 reflects COVID-19 closures and reduced CBD footfall; comparable sales3 were down 3.1% Total Sales1 1,398.0 1,607.9 (13.1%) Operating Gross Profit 539.8 629.6 (14.3%) • Group online sales4 gr
Slide 13: CBD footfall continues to impact businesses
1H21 RESULTS CBD footfall continues to impact businesses For personal use only • Myer CBD stores2 were the largest impact to comparable sales and remain challenged with restricted workforce, tourism and subdued confidence from continued shutdowns • 1H21 comparable sales1 would have been up 6.3% if M
Slide 14: Operating gross profit
1H21 RESULTS Operating gross profit For personal use only Operating Gross Profit ($m) • Margin rate declined by 55bps reflecting a changing sales mix from COVID-19 specific factors: 630 (86) • Less new inventory in the business early in 1H21 particularly in apparel categories; • The need to clear se
Slide 15: Cost of Doing Business
1H21 RESULTS Cost of Doing Business For personal use only Cost of Doing Business ($m) Myer Group Cost Structure ($m) - Pre AASB 161 516 -1.3% -2.6% 537 -7.6% 530 516 477 (105) 50 200 195 187 (2) 411 15 136 (24) (14) (12) (18) 199 200 199 187 (32) 325 138 135 130 104 CODB 1H20 AASB 16 CODB 1H20 Inves
Slide 16: Operating cash flow (post-AASB 16)
1H21 RESULTS Operating cash flow (post-AASB 16) For personal use only $ MILLIONS 1H21 1H20 • Operating cash flow (before interest & tax) increased by $36 million to $326 million; cash conversion substantially increased EBITDA1 214.6 218.4 • Working capital improvement includes the benefits of mainta
Slide 17: Balance sheet (post-AASB 16)
1H21 RESULTS Balance sheet (post-AASB 16) For personal use only $ MILLIONS 1H21 FY20 1H20 • Inventory down 22%, reflecting merchandise cycle improvements, better stockturn and some product availability issues Inventory 265.8 256.0 340.7 • Creditors reflects the business continuing to pay merchandise
Slide 18: Progress on deleverage provides the platform
1H21 RESULTS Progress on deleverage provides the platform For personal use only Net Cash ($m) – 1H18 to 1H21 • Net cash position of $201.1 million 201 • Lower inventory levels and changes to the merchandise cycle have had a material impact on cash flow and borrowing needs • Myer did not utilise any
Slide 19: In summary
1H21 RESULTS In summary For personal use only • Achieving earnings growth in the 1H21 sales environment was a solid outcome • Online sales continue to grow with improving profitability • Focus on driving CODB lower continues • Merchandise cycle has improved • We have achieved progress in our goal of
Slide 20: Conclusion / Appendices
“CONCLUSION "APPENDICES
Slide 21: Customer First Plan: Our way forward
CUSTOMER FIRST PLAN O u r wa y f o r wa r d For personal use only COVID-19 overlay The Customer First Plan and its focus on retail execution continues to underpin our approach Actions taken Accelerate Re-sequence Expand Myer Online is now one of Australia’s leading digital retailers and is a key pri
Slide 22: Customer First Plan: execution priorities
CUSTOMER FIRST PLAN The Customer First Plan and its focus on retail execution continues to underpin our approach For personal use only Refocus Merchandise Customer Experience In-store • Inventory cleanest it has ever been, down 22%. Working with • Team member and staff safety protocols working well
Slide 23: Accelerating online plans
CUSTOMER FIRST PLAN A c c e l e r a t i n g o n l i n e p l a n s wi l l u n d e r p i n p r o f i t a b l e g r o wt h trajectory For personal use only Online experience uplift • Significant experience improvement planned around search, navigation and product sequencing will underpin increased conv
Slide 24: MYER one provides a competitive advantage
CUSTOMER FIRST PLAN M YE R o n e p r o v i d e s a c o m p e t i t i v e a d v a n t a g e a c r o s s o u r o m n i - c h a n n e l n e t wo r k For personal use only Increased MYER one experience changes, acquisition flow and onboarding • Increasing MYER one engagement with tag rate improving to 6
Slide 25: Space reductions for greater flexibility
CUSTOMER FIRST PLAN Space reductions to provide greater operational and balance sheet flexibility For personal use only • Our priority was executing additional rent and outgoing waivers of $18 million in Department Stores Lease Liability Profile1 1H21 ($32 million in total since March 2020); with fo
Slide 26: For personal use only
For personal use only 23
Slide 27: Conclusion
CONCLUSION Conclusion For personal use only • Focus on our Customer First Plan is producing positive results • Online scale and growth provides platform for profitable growth • MYER one momentum is underpinning improved connection and engagement with our customers • Continued discipline in cost mana
Slide 28: Appendices
1H21 SUMMARY 1H21 RESULTS CUSTOMER FIRST PLAN CONCLUSION APPENDICES
Slide 29: Appendix: NPAT reconciliation to statutory accounts
1H21 RESULTS A p p e n d i x 1 : N PAT r e c o n c i l i a t i o n t o s t a t u t o r y a c c o u n t s For personal use only $ MILLIONS ebit interest tax npat Statutory reported result 109.2 (47.5) (18.7) 43.0 Add back: Implementation costs and individually significant items Store exit costs/(reve
Slide 30: Appendix 2: Income statement – AASB impact
1H21 RESULTS Appendix 2: Income statement – AASB 16 impact For personal use only 1H21 aasb 16 1H21 1H20 CHANGE $ MILLIONS (pre-aasb16) (statutory) impact (pre-aasb16) (pre-aasb16) Total Sales1 1,398.0 - 1,398.0 1,607.9 (13.1%) Operating Gross Profit 539.8 0.1 539.9 629.3 (14.2%) Cost of Doing Busine
Slide 31: Appendix 3: Operating cash flow – AASB impact
1H21 RESULTS Appendix 3: Operating cash flow – AASB 16 impact For personal use only 1H21 aasb 16 1H21 1H20 $ MILLIONS (statutory) impact (pre-aasb16) (pre-aasb16) EBITDA1 214.6 (101.4) 113.2 113.1 Add/(Less) implementation costs and ISIs 0.2 - 0.2 (19.0) Add non-cash asset impairments 0.3 - 0.3 1.0