Myer Holdings Limited · ASX:MYR
Myer — H1 2013 Earnings Presentation
34 slides from Myer's earnings presentation, Mar 14, 2013
Slide 1: Myer first half results for the 26 weeks ended 26 January 2013
ASX & Media Release Thursday 14 March 2013 Myer first half results for the 26 weeks ended 26 January 2013 First half total sales up 1.7 percent to $1,732.5 million Q2 total sales up 2.1 percent Operating gross profit up 2.3 percent to $714.0 million Net profit after tax up 0.7 percent to $87.9 milli
Slide 2: Sales by brand category and gross profit commentary
Sales in National brands declined 1.3 percent, impacted by the rationalisation of the electrical range (particularly TVs), the exit of DVDs, CDs, gaming and consoles, as well as the competitive furniture market. Concession sales grew by 4.9 percent, particularly driven by brands such as Country Road
Slide 3: Strengthened balance sheet and outlook
“The successful openings of two new stores at Fountain Gate (Victoria) and Townsville (Queensland) were very pleasing and both have been very well received by their communities. “Our investment in the sass & bide business again proved beneficial with another very strong half, demonstrating our abili
Slide 4: Delivering our strategic plan
DELIVERING OUR STRATEGIC PLAN We continue to make significant progress on our five-point strategic plan while implementing additional initiatives to strengthen and evolve the plan. 1. IMPROVE CUSTOMER SERVICE We have continued to invest in improving the customer experience with a number of service a
Slide 5: Myer Exclusive Brands
Our 59 Myer Exclusive Brands are comprised of brands developed by Myer, Designers @ Myer, National brands owned by Myer, and Licensed National brands. Myer Exclusive Brands are now represented across a wide range of price points and all categories. Key brands that are well-established with strong cu
Slide 6: Myer Visa card and loyalty offers
• The Myer Visa card is an important loyalty offer for our customers. With up to three MYER one rewards points offered to Myer Visa card holders, Myer Visa continues to be one of the most competitive credit cards in the market, awarded 5 stars by CANSTAR for outstanding value (with annual spend of $
Slide 7: Omni-channel and optimising the store network
• A monthly digital Emporium magazine was launched in November 2012, distributed to 1.3 million MYER one members, including interactive content and the ability to shop direct from pages. “We have successfully implemented a number of important omni-channel initiatives, with a significant pipeline of
Slide 8: Contacts and forward-looking statements
For further information please contact: Investors: Davina Gunn, Investor Relations Manager, +61 (0) 400 896 809 Olivia Reith, Investor Relations Manager, +61 (0) 438 101 789 Media: Jo Lynch, General Manager Corporate Affairs, +61 (0) 438 101 793 All numbers are unaudited. This release may contain “f
Slide 9: Table 1 – Profit & Loss Statement for the 26 weeks to 26 January
Table 1 – Profit & Loss Statement for the 26 weeks to 26 January 2013 1H 2013 1H 2012 Change vs. LY Actual Actual $m $m Total sales value 1,732.5 1,704.0 +1.7% Concessions 260.1 248.0 +4.9% Myer Exclusive Brands 342.9 311.6 +10.0% Other 1,129.5 1,144.4 (1.3%) Operating gross profit 714.0 698.3 +2.3%
Slide 10: Balance sheet, statistics, shares and dividends
Table 2: Balance Sheet as at 26 January 2013 January 2013 January 2012 Actual Actual $m $m Inventory 363 391 Other assets 43 60 Less creditors (457) (480) Less other liabilities (230) (259) Net trading investment (281) (288) Property 26 27 Fixed assets 480 497 Tangible funds employed 225 236 Intangi
Slide 11: 1H2013 results
MYER Half Year Results 2013 Half Year Results to 26 January 2013 Bernie Brookes CEO and Managing Director Mark Ashby CFO 1H2013 results Overview Financial update Delivering our five-point plan Outlook 1 14 March 2013 1
Slide 12: A solid result in 1H2013
MYER Half Year Results 2013 A solid result in 1H2013 • 1H sales up 1.7% to $1,732.5 million, up 1.4% on a comparable store sales basis • Q2 sales up 2.1%, up 1.7% on a comparable store sales basis • Operating gross profit margin +23 bps to 41.21% • EBITDA up 1.4% to $185.4 million • EBIT down 1.0% t
Slide 13: Financial summary
MYER Half Year Results 2013 1H2013 results Overview Financial update Delivering our five-point plan Outlook 4 Financial summary 1H2013 vs.1H2012 Third consecutive quarter of comparable Sales $1,732m +1.7% store sales growth Operating Further progress on key initiatives $714m +2.3% gross profit offse
Slide 14: Financial summary and 1H2013 sales performance
MYER Half Year Results 2013 Financial summary 1H2013 vs.1H2012 EBITDA $185m +1.4% Solid result reflecting strong operating gross profit offsetting EBITDA margin 10.7% (3bps) increased cash CODB EBIT $141m (1.0%) Depreciation increased by $3.9m to $43.9m due to continuing capital EBIT margin 8.2% (21
Slide 15: Improvement in operating gross profit and cash cost of doing business
MYER Half Year Results 2013 Improvement in operating gross profit • Strong growth in Myer Exclusive Brands and % Operating gross profit margin 41.5 Concessions 41.21 40.98 • Continued benefits from Myer sourcing offices 41.0 40.54 • Improved space productivity supported by 40.5 completion of categor
Slide 16: Solid EBITDA result and cash flow
MYER Half Year Results 2013 Solid EBITDA result $m 11.7% 11.7% 300 11.1% 12.0% 10.7% 10.7% 10.1% 9.7% 250 9.2% 10.0% 211 8.4% 8.2% 203 195 200 30 183 185 8.0% 35 34 40 44 150 6.0% 100 4.0% 181 168 161 143 141 50 2.0% 0 0.0% 1H09 1H10 1H11 1H12 1H13 EBIT Depreciation EBIT Margin EBITDA Margin “Increa
Slide 17: Strong, stable balance sheet and capital invested
MYER Half Year Results 2013 Strong, stable balance sheet Key credit metrics 26 January 28 January Bank covenants 2013 2012 Net debt $242m $298m Net debt / EBITDA 0.78 0.94 <2.5x Fixed charge cover* 2.28x 2.26x >1.65x Shareholders’ equity $915m $885m >$500m “Strong cash flow and balance sheet providi
Slide 18: Key financial highlights in 1H2013
MYER Half Year Results 2013 Key financial highlights in 1H2013 • Continued growth in sales from core categories Womenswear, Menswear, Cosmetics, Fashion Accessories, Childrenswear • Solid performance by new and established Myer Exclusive Brands and Concessions • Continued strong operating gross prof
Slide 19: Progress on delivering our plan: improve customer service
MYER Half Year Results 2013 Progress on delivering our plan 1. Improve customer service 2. Enhance our merchandise offer 3. Strengthen our loyalty program 4. Build a leading omni-channel offer 5. Optimise our store network “Investing to deliver shareholder returns” 16 DELIVERING OUR PLAN 1. Improve
Slide 20: Efficiency initiatives and Myer's merchandise offer
MYER Half Year Results 2013 1. Improve customer service Efficiency initiatives • Harvesting year-two benefits from new POS system • Improved supplier compliance to ‘floor-ready’ standards • Out-of-stocks reduced significantly • New labour management tool optimising labour investment • Customer-frien
Slide 21: Price harmonisation and enhanced merchandise offer
MYER Half Year Results 2013 2. Price harmonisation supported by leading suppliers “Strong support from leading suppliers delivering more globally competitive prices, an ongoing process” 20 DELIVERING OUR PLAN 2. Enhanced merchandise offer • Brands that performed well included: – sass & bide, Country
Slide 22: Myer Exclusive Brand growth and integrated sourcing
MYER Half Year Results 2013 2. Myer Exclusive Brand growth continues • Myer Exclusive Brands now represent 19.8% of overall mix • Top performing Myer Exclusive Brands in 1H2013 – Basque, Regatta, Reserve, Blaq, Jayson Brunsdon Home, Piper • Successful introduction of new Myer Exclusive Brands – Tren
Slide 23: sass & bide success story and focus on newness
MYER Half Year Results 2013 2. Merchandise - sass & bide success story Myer acquired 65% of sass & bide in 2011 January 2011 January 2013 Number of Myer stores Nil 20 concessions Number of standalone stores 15 20 Brand extensions Nil Sunglasses, Intimate apparel Online sales Minimal 4th largest sass
Slide 24: MYER Half Year Results 2013
MYER Half Year Results 2013 26 27 14 March 2013 14
Slide 25: 3. Strengthen our loyalty program
MYER Half Year Results 2013 28 3. Strengthen our loyalty program • Represents approximately 70% of sales enabling greater engagement with high-value customers • Customer analytics capability supports key business decisions • Communicate with members across multiple channels with over 2 million email
Slide 26: MYER one smartphone app and omni-channel offer
MYER Half Year Results 2013 3. MYER one smartphone app 30 DELIVERING OUR PLAN 4. Build a leading omni-channel offer • Over 8 million visits, 90 million page views during the half • Recent improvements driving rapid growth in sales and key customer metrics including conversion • Enhanced mobile site
Slide 27: Omni-channel roadmap and optimising our store network
MYER Half Year Results 2013 4. Our omni-channel roadmap continues to evolve Introduced In development The future • Transactional website • Customer order management • Personalisation – MYER one • Core infrastructure • Social media interface • In store multi-channel experience • • Enhanced mobile tec
Slide 28: MYER Half Year Results 2013
MYER Half Year Results 2013 Fountain Gate 34 Townsville 35 14 March 2013 18
Slide 29: Optimise our store network
MYER Half Year Results 2013 5. Optimise our store network • Continued commitment to refurbishments – Refurbishment completed at Highpoint – Refurbishments commenced at Indooroopilly, Miranda and Adelaide • Proactive lease negotiations yielding results • Ongoing review of merits of all existing and p
Slide 30: Innovation to inspire and delight; competitive advantages
MYER Half Year Results 2013 Innovation to inspire and delight • Continually testing new ideas and concepts • Initiatives successfully adopted in past 6 months: – Commonwealth Bank ‘pay-with-points’ initiative – MYER one smartphone app with real time shopping credits and rewards balances, and exclusi
Slide 31: Outlook
MYER Half Year Results 2013 1H 2013 results Overview Financial update Delivering our five-point plan Outlook 40 Outlook • Remain cautious about outlook due to challenging trading environment, election uncertainty. We do not intend to provide guidance for FY2013 • Cost pressures to continue in second
Slide 32: Historical sales including concessions
MYER Half Year Results 2013 Half Year Results to 26 January 2013 Bernie Brookes CEO and Managing Director Mark Ashby CFO Historical sales including concessions 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Total Sales 657.3 768.4 681.4 1022.6 651.1* 766.0 688.0 1,044.4 $m Total Sales -2.1% -5.8% -3.5% -0.
Slide 33: Indicative new stores schedule
MYER Half Year Results 2013 Indicative new stores schedule* Centre Estimated Size Metro Growth Regional Store State Year Landlord MAT** catchment (GLA sqm) infill corridor city $mill population Townsville QLD FY2013 12,000 Stockland 230 174,000 Fountain Gate VIC FY2013 12,000 Westfield 654 180,000
Slide 34: MYER one – a leading loyalty program
MYER Half Year Results 2013 MYER one – a leading loyalty program Member shops at Myer Store Myer engages with or online Accumulates a MYER one members with 2 Shopping Credits relevant and targeted per $1 spent offers at Myer Receives Myer accumulates $20 MYER one Reward valuable data relating to mem