Metcash Limited · ASX:MTS
Metcash — FY2016 Earnings Presentation
29 slides from Metcash's earnings presentation, Jun 20, 2016
Slide 1: Metcash Limited – 2016 Full Year Results Presentation
METCASH LIMITED ABN 32 112 073 480 1 THOMAS HOLT DRIVE MACQUARIE PARK NSW 2113 AUSTRALIA 20 June 2016 Market Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney NSW 2000 Dear Sir/ Madam METCASH LIMITED – 2016 FULL YEAR RESULTS PRESENTATION Please find attached the Met
Slide 2: FY16 Full Year Results
FY16 Full Year Results 20 June 2016 1
Slide 3: Group Update
Group Update IAN MORRICE GROUP CHIEF EXECUTIVE OFFICER 2
Slide 4: Our purpose and vision
Our purpose and vision OUR PURPOSE OUR VALUES INTEGRITY IS THE FOUNDATION OF OUR VALUES: SUCCESSFUL INDEPENDENTS • Supporting our customers and suppliers • Our people are empowered and accountable Independence is worth fighting for! • Adding value in our community OUR MODEL OUR VISION OUR MARKETS Bu
Slide 5: Group update – further progress made during the year
Group update – further progress made during the year Group revenue up 1.3% Supermarkets sales up 0.5% - adjusting for estimated impact of damage to NSW distribution centre, Supermarkets revenue up 0.9% IGA retailers have experienced growth for last 4 consecutive reporting periods Liquor sale
Slide 6: NSW DC - update
NSW DC - update Huntingwood Distribution Centre damaged by hail on 25 April 2015 April 2015 Group’s contingency plans activated to ensure continuity of supply to retailers Supply restored to NSW retailers through Victoria, Queensland and ACT distribution centres Metcash reoccupied Huntingwoo
Slide 7: Financials
Financials BRAD SOLLER GROUP CHIEF FINANCIAL OFFICER 6
Slide 8: Profit & Loss
Profit & Loss FY16 FY15 Change $m $m Group Sales 13,541.3 13,369.8 1.3% Food & Grocery 179.9 216.8 (17.0%) Liquor 62.1 57.6 7.8% Hardware 32.8 30.1 9.0% 1 Corporate 0.6 (7.2) EBIT 275.4 297.3 (7.4%) Net finance costs (27.0) (55.1) 51.0% Tax (68.4) (67.2) (1.8%) Non-controlling interests (1.7) (1.4)
Slide 9: Cashflows
Cashflows FY16 FY15 $m $m Net cash from operating activities 165.8 231.7 Proceeds from disposal of Automotive business 242.1 - Proceeds from disposal of surplus assets and loan repayments 75.8 53.0 Acquisitions of businesses and associates (15.6) (42.0) Capital expenditure (64.9) (85.9) Net cash fro
Slide 10: Balance Sheet
Balance Sheet 1 30 April 2016 30 April 2015 $m $m Trade receivables and prepayments 967.7 989.1 Inventories 673.6 712.5 Trade payables and provisions (1,632.0) (1,695.4) Net working capital 9.3 6.2 Intangible assets 1,127.5 1,284.5 Property, plant and equipment 251.9 276.0 Equity accounted investmen
Slide 11: Borrowings – significantly improved debt ratios
Borrowings – significantly improved debt ratios FY16 FY15 NET DEBT $m $m Key changes in debt profile Gross debt (301.9) (751.1) Net debt reduced by ~$390m, including repayment of Cash and cash equivalents 26.4 83.3 US$200m of USPP debt Net debt (275.5) (667.8) Cancelled a further ~$130m of debt
Slide 12: Divisional Results
Divisional Results IAN MORRICE GROUP CHIEF EXECUTIVE OFFICER 11
Slide 13: Results – overview by pillar
Results – overview by pillar FY16 FY15 Change Sales Revenue (%) $m $m Sales Revenue 8% Food & Grocery 9,265.4 9,217.8 0.5% Food & Grocery 24% Liquor 3,219.3 3,103.6 3.7% 68% Hardware 1,056.6 1,048.4 0.8% Liquor Total Sales Revenue 13,541.3 13,369.8 1.3% Hardware EBIT EBIT (%) Food & Grocery 179.9 21
Slide 14: Food & Grocery - Financials
Food & Grocery - Financials FY16 FY15 Change Sales Revenue $m $m Sales Revenue Supermarkets Supermarkets 7,694.1 7,653.3 0.5% Total sales up 0.5% Convenience 1,571.3 1,564.5 0.4% Total wholesale sales (excluding tobacco) were down 1.1% Adjusting for the estimated impact of damage to the Total
Slide 15: Food & Grocery - Financials
Food & Grocery - Financials FY16 FY15 Change EBIT $m $m Sales Revenue Total EBIT of $179.9m Supermarkets 7,694.1 7,653.3 0.5% Supermarkets EBIT declined by ~$21m, largely Convenience 1,571.3 1,564.5 0.4% reflecting planned incremental price investment Total Sales 9,265.4 9,217.8 0.5% Supermark
Slide 16: Food & Grocery – FY16 key initiatives and FY17 focus
Food & Grocery – FY16 key initiatives and FY17 focus NETWORK INVESTMENT & RETAIL EXCELLENCE Target of ~150 Diamond stores achieved Sales uplift from Diamond Stores continues, with a ~16% increase in both warehouse and retail sales 100 Diamond stores refurbished in FY16 Metcash Training Acade
Slide 17: Diamond Transformation scorecard
Diamond Transformation scorecard Phase 1 Phase 2 Phase 3 Fix the Basics Invest in Growth Sustain Growth FY15 / FY16 FY15 / FY17 FY17 / FY19+ Expand innovation in price Make every store famous as a local Offer competitive prices and promotions and promotions – “Price Match” shopper destin
Slide 18: Liquor - Financials
Liquor - Financials FY16 FY15 Sales Revenue Change $m $m Total sales increased by 3.7% Sales Revenue 3,219.3 3,103.6 3.7% 1 LfL retail sales in the IBA bannered network increased 3.5% EBIT 62.1 57.6 7.8% In line with strategy, continued to convert wholesale customers to IBA bannered network. W
Slide 19: Hardware - Financials
Hardware - Financials FY16 FY15 Change $m $m Sales Revenue 1,056.6 1,048.4 0.8% Sales Revenue Total Hardware sales up 0.8% EBIT 32.8 30.1 9.0% Wholesale LfL growth was up 2.5% EBIT (%) 3.1% 2.9% 23bps Trade and joint ventures experienced solid growth EBIT EBIT increased by $2.7m (+9.0%) Ke
Slide 20: Working Smarter – continued progress
Working Smarter – continued progress THE WHY THE HOW • We need to simplify the way we operate so we can meet Working Smarter will make doing business with Metcash the future needs of our customers, retailers, and suppliers simpler for customers, suppliers and our people through: • Our organisation h
Slide 21: Group Outlook
Group Outlook IAN MORRICE GROUP CHIEF EXECUTIVE OFFICER 20
Slide 22: Group outlook
Group outlook FY17 includes a 53rd trading week1 Highly competitive trading conditions remain in all our markets. Additional impact from increased Food & Grocery competition in both the South Australian and Western Australian markets The Food & Grocery business continues to face headwinds fr
Slide 23: Appendices
Appendices 1. Financial highlights 2. Restated Sales and EBIT to reflect the sale of Automotive 3. Bannered store numbers 4. Contact details 22
Slide 24: Financial highlights
Financial highlights FY16 FY15 FY14 FY13 FY12 Financial Performance Sales ($m) 13,541.3 13,369.8 13,175.0 12,893.1 12,501.1 EBIT ($m) 275.4 297.3 368.4 437.7 441.5 Net finance costs ($m) (27.0) (55.1) (57.3) (61.7) (67.6) Underlying profit after tax ($m) 178.3 173.6 218.4 261.2 252.8 Reported profit
Slide 25: Restated Sales and EBIT to reflect sale of Automotive
Restated Sales and EBIT to reflect sale of Automotive FY15 FY14 FY13 FY12 Full year result ($m) Sales Food & Grocery 9,217.8 9,072.4 9,120.6 9,331.7 Liquor 3,103.6 3,160.8 2,917.6 2,336.2 Hardware 1,048.4 941.8 854.9 833.2 Continuing operations 13,369.8 13,175.0 12,893.1 12,501.1 Discontinued operat
Slide 26: Bannered store numbers
Bannered store numbers April April 2016 2015 Pillar Supermarkets 1,678 1,708 Campbells 18 18 Liquor 2,674 2,571 Hardware 378 396 TOTAL 4,748 4,693 Supermarkets Liquor Hardware Store movement Number of stores at April 2015 1,708 2,571 396 Stores joined banner during the period 44 399 10 Stores left b
Slide 27: Bannered store numbers
Bannered store numbers April April 2016 2015 Supermarkets Supa IGA 415 428 IGA 822 829 IGA-Xpress 202 198 Total IGA bannered stores 1,439 1,455 Friendly Grocer / Eziway 239 253 Total Supermarkets 1,678 1,708 Liquor Cellarbrations 518 478 Bottle-O & Bottle-O Neighbourhood 601 636 IGA Liquor 491 486 O
Slide 28: Contact details
Contact details For additional information contact: Ross Moffat, Acting Head of Investor Relations Phone: +61 2 9751 8368 E-mail: ross.moffat@metcash.com Merrin Hodge, Investor Relations Manager Phone: +61 2 9647 0866 Email: merrin.hodge@metcash.com Cait Tynan, Head of Corporate Affairs Phone: +61 2
Slide 29: Metcash
Metcash FY16 Full Year Result 20 June, 2016 28