B&m European Value Retail Plc · LSE:BME
B&m European Value Retail — H1 FY2017 Earnings Presentation
19 slides from B&m European Value Retail's earnings presentation, Nov 15, 2016
Slide 1: Interim Results Presentation, 26 weeks to 24th September 2016
B&M European Value Retail SA Interim Results Presentation 26 weeks to 24th September 2016
Slide 2: Interim FY17 Group Highlights
Interim FY17 Group Highlights • Group revenues increased by 18.9% to £1,105.9m • UK LFL revenues +0.2% and Underlying LFL +1.9% • Group adjusted Profit before Tax increased by 17.2% to £77.9m • Adjusted diluted EPS 6.1p an increase of 17.3% • UK: 29 new stores, of which 6 were relocations, and 3 clo
Slide 3: Paul McDonald, Chief Financial Officer
Paul McDonald Chief Financial Officer Ref: 750493 3
Slide 4: Summary Profit and Loss
Summary Profit and Loss £ millions, 2016A H1 2017A H1 % Group Stores 524 585 11.6% £ millions, Revenues 930.3 1,105.9 18.9% Gross Profit 320.6 383.4 19.6% % 34.5% 34.7% 21bps Operating Costs (234.0) (284.2) 21.4% Adjusted EBITDA 86.6 99.2 14.6% % 9.3% 9.0% (33)Bps Depreciation and Amortisation (9.5)
Slide 5: Group Revenue Bridge
Group Revenue Bridge £ millions, H1 REVENUE 2016A-2017A • +18.9% revenue growth Net New Stores £153m LFL Stores £2m • Annualisation of 79 new stores opened in FY2016 15 20 1,106 (13) 41 • 29 new stores opened in the UK, of which 6 were relocations 122 (10) • 3 store closures • UK LFL revenues +0.2%
Slide 6: Continued EBITDA Growth
Continued EBITDA Growth £ millions, H1 ADJUSTED EBITDA BRIDGE 2016A-2017A Margin % 9.3% 9.0% Net New Stores LFL Stores 1 (3) 4 99 (1) 1 12 (1) 87 2016A FY Effect of Closed / FY17 New Underlying LFL Planned Impact Central Costs Germany 2017A FY16 Openings Relocated Stores 1 Note 1: Infrastructure lar
Slide 7: Consistent Underlying LFL Sales
Consistent Underlying LFL Sales LFL SALES H1 UNDERLYING LFL H1 H1 +0.2% H1 +1.9% 2.0% 3.5% 3.3% 1.8% 1.6% 3.0% 1.5% 2.5% 2.4% 2.4% 2.0% 1.9% 1.9% 1.0% 1.7% 1.5% 0.6% 0.5% 1.0% 0.3% 0.0% 0.5% 0.0% 0.0% 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 FY16 FY16 FY16 FY16 FY17 FY17 -0.5% FY16 FY16 FY16 FY16 FY
Slide 8: Gross Margin
Gross Margin GROSS MARGIN (%) KEY HIGHLIGHTS • 21 bps improvement in group gross margin to 34.7% 34.7% 34.5% • UK margins have improved by 20 bps, in spite of adverse £ : $ currency movement offset by • strong sell through on seasonal areas • Direct Sourcing of DIY ranges • sales mix benefit from ne
Slide 9: Operating Costs
Operating Costs £ millions, KEY HIGHLIGHTS • Overall opex costs are tracking in line with plan H1 2016A H1 2017A Store Costs 166.2 200.5 • Store costs as a % of sales were 43bps higher than last year Transport and Distribution 32.3 40.5 Central Costs 17.9 19.2 • 17bps as a result of the cannibalisat
Slide 10: Interest Expenses
Interest Expenses £ millions, KEY HIGHLIGHTS 2016A 2017A • Interest and amortised fees 15% lower than last year, Interest 10.0 8.4 following a reduction in the margin on the debt Amortised Fees 0.7 0.7 Total 10.7 9.1 • Non-cash impact of £0.8m under IFRS for Jawoll put / call option over management’
Slide 11: Strong Cash Flow Conversion and De-leveraging
Strong Cash Flow Conversion and De-leveraging £ millions, OPERATING CASH FLOW CASH FLOW STATEMENT £m H1 2016A H1 2017A 81 Adjusted EBITDA 86.6 99.2 58 Change in Working Capital (37.9) (17.9) 49 New Store Capex (24.9) (15.9) Infrastructure Capex (4.8) (2.3) 17 Maintenance Capex (2.4) (5.3) Capex (32.
Slide 12: Simon Arora, Chief Executive Officer
Simon Arora Chief Executive Officer Ref: 750493 12
Slide 13: UK Customer Behaviour Appears Stable
UK Customer Behaviour Appears Stable B&M UK CUSTOMERS AND TRANSACTION VALUES HIGHLIGHTS 23/06/16 Brexit 4.5 16.00 • Trading patterns following usual weather and calendar Customers in Millions 4.0 14.00 3.5 12.00 effects of Easter, Bank Holidays, school vacations 3.0 10.00 ATV £ 2.5 8.00 2.0 1.5 6.00
Slide 14: Continue to Successfully Roll Out New Stores
Continue to Successfully Roll Out New Stores 519 STORES AS AT SEPTEMBER 2016 FY2017 OPENINGS 29 New Store openings and 3 closures Of which 6 were relocated stores not classed as LFL, net impact is equivalent to c. 4 new store openings 56 store openings (45 net) in FY2017 50 stores planned for FY2018
Slide 15: New Store Returns
New Store Returns £ millions, FY2015 AND FY2016 STORE OPENINGS1 KEY HIGHLIGHTS Average • B&M continues to deliver industry leading new store Revenue per Store £4.89m payback periods • This update includes all of the last 72 organic new store Store EBITDA² £0.75m openings that have traded at least on
Slide 16: Resilience of Gross Margin vs Currency
Resilience of Gross Margin vs Currency 35.5% 1.61 1.58 1.59 1.7 35.0% 1.51 1.6 34.5% 34.5% 34.4% 34.2% 34.3% 1.5 34.0% 33.9% 1.37 1.4 33.5% 1.3 33.0% 1.2 Mar-13 Mar-14 Mar-15 Mar-16 6m to Sept-16 Gross Margin % GBP/USD - Annual average Note: 1. The margins are the UK only gross margin %’s Note: 2. A
Slide 17: UK Advertising Campaign
UK Advertising Campaign SUMMARY TONE OF VOICE • B&M has grown, with a zero advertising budget, to a £2 billion • Simple and straightforward, not contrived or wacky revenue UK retailer • ‘Relatable’ not niche – B&M for everyone • This has been achieved through “word of mouth” • We are investing c. £3
Slide 18: International Expansion - Germany
International Expansion - Germany SUMMARY CURRENT FOOTPRINT • Delivered € revenue growth of 14.4% • 7 new stores opened in the year and on target for 10 organic openings in FY17 • Completed the acquisition of a 9 store privately owned retail chain • 8 of the stores will have been converted to the Ja
Slide 19: Outlook for 2017
Outlook for 2017 • Too early to call any change in consumer behaviour, but B&M has historically performed well in challenging economic environments • Q3 has had a solid start, with peak trading just a few weeks away our stores and supply chain are set up well for the Christmas season • “Level playin
B&M European Value Retail — H1 FY2017 Earnings Presentation on 6ix