Metcash Limited · ASX:MTS
Metcash — Investor Day (March 2017)
30 slides from Metcash's investor day presentation, Mar 23, 2017
Slide 1: Hardware Investor Day Presentation (ASX cover letter)
Metcash Limited ABN 32 112 073 480 1 Thomas Holt Drive Macquarie Park NSW 2113 Australia For personal use only 23 March 2017 Market Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney NSW 2000 Dear Sir/Madam HARDWARE INVESTOR DAY PRESENTATION Please find attached a pr
Slide 2: Investor day – 23 March 2017
For personal use only Investor day – 23 March 2017
Slide 3: Contents
Contents Page For personal use only 1 Metcash – network of successful independents 4 2 Independent Hardware Group 5 3 IHG management team 7 4 Hardware market 8 5 IHG network 9 6 Key strategic initiatives 14 7 Integration update 19 8 Summary 27 2
Slide 4: Successful Independents
For personal use only Successful Independents Ian Morrice Metcash CEO
Slide 5: Metcash: Food, Liquor, Hardware
Metcash For personal use only FOOD LIQUOR HARDWARE 4
Slide 6: HTH acquisition – now second largest in Hardware market
HTH acquisition – now second largest in Hardware market Independent Metcash Hardware HTH For personal use only Hardware Group Sales1 ~$1.1bn ~$1.0bn ~$2.1bn Trade | Retail sales split1 55% | 45% 62% | 38% 59% | 41% 71 majority / wholly 30 majority owned Company-owned Stores 41 wholly owned owned 23
Slide 7: Business Overview
For personal use only Business Overview Mark Laidlaw CEO, Independent Hardware Group
Slide 8: IHG management team
IHG management team For personal use only CEO MARK LAIDLAW Operations Joint Ventures/ Company Supply Chain Human Marketing Merchandise Commercial Retail & Trade Alliance Stores & Logistics Resources KAREN ANNETTE DARREN CHRIS STUART ROBIN RICHARD RICK SOLA FAHEY WELSH MANNING TSOTRA WILLINGHAM JOHNS
Slide 9: IHG – second largest player in Hardware market
IHG – second largest player in Hardware market For personal use only Trade Focus Acquisition of HTH in October 2016: Now clear #2 in Hardware market H&G Bowens Dahlsens o Natbuild Strengthened position in Trade segment Tradelink Stratco o Hardings Porters Hudsons HTH and Mitre 10 complementary wit
Slide 10: IHG brands
IHG brands For personal use only Brands Key customers # stores % IHG sales* Iconic independent and local network Operates in both Trade and DIY segments 306 47% Customers include national residential builders through to local handy-man Strong focus on Trade segment and home builders Mix of
Slide 11: An extensive national footprint
An extensive national footprint For personal use only Mitre HTH Total State 10 DCs stores stores stores 113 68 1 NSW 81 104 185 2 QLD 113 68 181 1 34 51 2 60 37 SA / NT 60 37 97 81 104 2 TAS 14 14 28 VIC 71 103 174 1* 71 103 1 WA 34 51 85 2 TOTAL 373 377 750 6 14 14 * Currently 2. South Dandenong DC
Slide 12: IHG committed to “Successful Independents”
IHG committed to “Successful Independents” For personal use only 750 bannered stores Successful Independents is key focus Independent store owners >90% of IHG network Company-owned stores are an important 71 component of the Hardware business 53 Mitre 10 JV stores (30 majority owned) 41 Co
Slide 13: Strengthened position in Trade segment
Strengthened position in Trade segment For personal use only Sales mix * Proportion of Trade sales increased from ~55% to ~60% through HTH acquisition Attractive service offer: “Get in, get out, get on with it” and “Go where the Tradies go” Mitre 10 IHG Focus on delivering what Tradies want: o
Slide 14: Consumer led strategy
Consumer led strategy For personal use only BEST STORE SHOPPER LED RANGE & BUILD DIGITAL, WORKING IN TOWN COMPETITIVE PRICING TRADE DATA, INSIGHTS SMARTER SAPPHIRE PROGRAM Good progress across all Mitre 10 stores HTH opportunities identified Combined the best of both to make a better business 13
Slide 15: Key strategic initiatives
For personal use only Key strategic initiatives Annette Welsh GM – Merchandise
Slide 16: Mitre – “Best Store in Town”
Mitre 10 – “Best Store in Town” For personal use only OBJECTIVE ROLL OUT PLAN RESULTS • Re-invest in Top 50 stores based • 10 per year • Store sales up ~17% on Sapphire Standards • 18 completed to date • Basket numbers up 13% • Targeted sales uplift 15% • Basket size up 4% Sapphire stores delivering
Slide 17: Mitre – Shopper led range
Mitre 10 – Shopper led range SALES GROWTH BEFORE AFTER For personal use only Growth FASTENERS 6% Growth HAND TOOLS 10% Growth POWER TOOLS 9% Growth PAINT 3% Growth 14% CEMENT Core ranging delivering strong sales growth – ability to roll out to HTH 16
Slide 18: Competitive pricing
Competitive pricing For personal use only Scan data received from ~120 stores Competitor pricing information provided to the network (~6,000 SKUs) Competitive pricing program on top 500 KVIs o >85% price matched1 Private label provides competitive entry point pricing o “Buy Right” has ~250 S
Slide 19: Digital data and insights
Digital data and insights For personal use only LOYALTY WEB, PROGRAM CLICK & COLLECT SOCIAL MEDIA • Mighty Rewards Loyalty Program in • Relaunched website Sept 2016 160 Mitre 10 stores • 6,000 SKUs online • HTH DIY Rewards Card in 134 stores • Click & Collect 1,100 SKUs TRADE BENCHMARKING DIGITAL &
Slide 20: Integration update
For personal use only Integration update Mark Laidlaw CEO, Independent Hardware Group
Slide 21: Integration update
Integration update For personal use only Steering Committee oversight Key focus areas: o Retention of customers o Cost synergies o Merchandise benefits o Branding On track to achieve net synergy benefits (after sharing with store owners) at upper end of $15m – $20m target range by end of FY18
Slide 22: Integration update (cont.) – Retention of customers
Integration update (cont.) For personal use only Retention of customers First gathering of new IHG network at EXPO held in February 2017 o ~2,100 attendees including ~1,050 store delegates and ~950 suppliers o High level of goodwill and optimism from store owners Woolworths removed HTH retention
Slide 23: Integration update (cont.) – Property rationalisation
Integration update (cont.) For personal use only Property rationalisation Two unprofitable stores retained by Woolworths (Launceston, Gungahlin) now closed Rationalisation of DC network – South Dandenong exit planned for April Head Office consolidated at Heatherton, Victoria Management structu
Slide 24: Integration update (cont.) – Merchandising synergies
Integration update (cont.) For personal use only Merchandising synergies Focus on delivering store owners the best products at the most competitive prices Alignment of supplier trading terms Consolidation of core ranges Increased volumes expected to result in more competitive pricing Savin
Slide 25: Marketing – Mitre
Marketing – Mitre 10 For personal use only • The Block • Sports • LAM • Catalogues + TV • Radio MMM • NSW 2GB • Mighty Rewards • MCG signage • Perth/Sydney/Tas • Click & Collect • Digital (eComm) • Footy Tipping • SA Garden • Seasonal Theming • Catalogues • Facebook • Scott Cam • Doors/Plumbing 24
Slide 26: Marketing – HTH
For personal use only Marketing – HTH 25
Slide 27: Marketing – Video
For personal use only Marketing – Video 26
Slide 28: Summary
For personal use only Summary Mark Laidlaw CEO, Independent Hardware Group
Slide 29: Summary
Summary For personal use only • IHG is clear number 2 in Hardware market with an extensive national footprint • Strengthened position in Trade segment, which accounts for ~60% of our sales • Strong focus on supporting our independent store owners and growing our brand footprint • Our Sapphire and Co
Slide 30: Disclaimer
Disclaimer This presentation contains summary information about Metcash Limited (ABN 32 112 073 480) (Metcash) and its activities current as at the date of this presentation. The information in this presentation is of general background and does not purport to be complete. It For personal use only s