Tractor Supply Company · NASDAQ:TSCO
Tractor Supply — Investor Presentation (October 2003)
31 slides from Tractor Supply's investor presentation, Oct 22, 2003
Slide 1: Tractor Supply Company Analyst Presentation, Austin, Texas, October 17, 2003
TRACTOR SUPPLY COMPANY ANALYST PRESENTATION AUSTIN, TEXAS OCTOBER 17, 2003
Slide 2: Our Mission
OUR MISSION To work hard, have fun and make money by providing legendary service and great products at everyday low prices.
Slide 3: Our Mission Goals
OUR MISSION GOALS Accelerating same store sales growth Accelerating new store openings Improving infrastructure Serving existing markets better Improving financial metrics
Slide 4: Agenda
OUR MISSION AGENDA Strategic Overview Jim Wright , President & COO TSC Customers & Brand Blake Fohl, VP Marketing Products & Partners Jerry Brase, SrVP Merchandising Stores & People Stan Ruta, SrVP Store Ops Financial Outlook Cal Massmann, SrVP/CFO Summary Q & A
Slide 5: Strategic Overview: Store Growth
STRATEGIC OVERVIEW STORE GROWTH New Stores 52 in 2004 over 60 in 2005 Replacing old stores 20 per year next 3 years "Super sizing" existing stores Target significant growth in Northeast
Slide 6: Vendor's Dock to Customer's Truck
STRATEGIC OVERVIEW VENDOR'S DOCK TO CUSTOMER'S TRUCK Supply Chain - Improving Inventory turns Logistics - Team work in action New Distribution Capacity What the customer needs, when and where she needs it
Slide 7: Strategic Overview
STRATEGIC OVERVIEW STRATEGIC OVERVIEW
Slide 8: Employer of Choice
STRATEGIC OVERVIEW Employer of Choice Selection - Behaviors and Competencies Celebrate Success Pay for Performance A great place to work precedes a great place to shop
Slide 9: Same Store Sales Growth
STRATEGIC OVERVIEW Same Store Sales Growth Customer Delight- Drives Frequency and Referrals Increasing size and number of transactions Accelerated new product introductions Improved Merchandise Presentation
Slide 10: TSC Customers & Brand: Our Objective
TSC CUSTOMERS & BRAND OUR OBJECTIVE To continue to build and leverage the emotional connection between our brand and our customer Our brand attributes have significant points of differentiation, which separates us from our competition and drives comp store sales Moving from the rational to the emoti
Slide 11: Our Customers
TSC CUSTOMERS & BRAND OUR CUSTOMERS Non-Farm Consumers 35% Commercial 11% Part-time Farmers & Ranchers 15% Hobby Farmers & Ranchers 31%
Slide 12: TSC Is Unique
TSC IS UNIQUE PRODUCTS, AND SEASONED ADVICE, WHICH ENABLES OUR CUSTOMERS TO LIVE LIFE, ON THEIR TERMS, OUT HERE
Slide 13: TSC's % of Sales by Major Department
PRODUCTS & PARTNERS 1997 2002 Livestock & Pet 25 31 Agricultural Products 10 8 Clothing & Footwear 10 9 Hardware & Tools 17 17 Seasonal Products 24 21 Truck, Trailer, Towing & Lube 13 13 TSC'S % OF SALES BY MAJOR DEPARTMENT
Slide 14: New Product Introductions Drive Comp Sales
PRODUCTS & PARTNERS NEW PRODUCT INTRODUCTIONS DRIVE COMP SALES In 2002, 31% of our sales came from SKUs less than 3 years old!
Slide 15: New Programs Introduced in 2003
PRODUCTS & PARTNERS NEW PROGRAMS INTRODUCED IN 2003 Cub Cadet Commercial Products Iams Pet Food Eukanuba Pet Food Blue Seal Livestock Feeds Levi Strauss Clothing C.E. Schmidt Clothing
Slide 16: Circle of Value
Lower Retail Price More Value to the Customer Greater Volume More Efficient Manufacturing & Distribution Lower Cost of Goods PRODUCTS & PARTNERS CIRCLE OF VALUE
Slide 17: Circle of Value Outcome
STRATEGIC OVERVIEW CIRCLE OF VALUE OUTCOME Larger Share of Market Competitive Advantage Expense Leverage Earnings Growth More New Stores Greater Shareholder Value
Slide 18: Keys to a Strong Partnership
PRODUCTS & PARTNERS 12 KEYS TO A STRONG PARTNERSHIP Embrace Values Embrace "Circle of Value" Top Quality Products First to Market Testing New Products/Programs Differentiation
Slide 19: Keys to a Strong Partnership (continued)
PRODUCTS & PARTNERS 12 KEYS TO A STRONG PARTNERSHIP Understand TSC's Customer Drive Top Line Sales Superior Inventory Productivity Reduce Supply Chain Costs Embrace Technology Support Category Management
Slide 20: The Store Experience
STORES & PEOPLE THE STORE EXPERIENCE BUILDING GREAT STORE TEAMS PROVIDING A GREAT SHOPPING EXPERIENCE FOR OUR CUSTOMERS STRIVING FOR EXCELLENCE BY KEEPING THINGS SIMPLE
Slide 21: Taking Work Out
STORES & PEOPLE TAKING WORK OUT DOING THINGS FASTER, BETTER AND CHEAPER WILL ALLOW TRACTOR SUPPLY TO IMPROVE EFFICIENCIES, TO SIMPLY BE THE MOST EFFICIENT OPERATOR
Slide 22: Supporting the Stores - Infrastructure for Future Growth
FINANCIAL OUTLOOK SUPPORTING THE STORES - INFRASTRUCTURE FOR FUTURE GROWTH ADDITIONAL DISTRIBUTION CENTERS Pendleton Purchase Georgia Facility Northeast Facility TECHNOLOGY Supply Chain and Store Systems STORE SUPPORT CENTER CONSOLIDATION
Slide 23: Investment Plans
FINANCIAL OUTLOOK INVESTMENT PLANS ADDITIONAL INVENTORY ($ 5.5 MILLION) IMPROVEMENTS - EXISTING STORES ($8.2 MILLION) SUPPORT CENTER CONSOLIDATION ($6.0 MILLION) DISTRIBUTION CENTERS ($36.0 MILLION) TECHNOLOGY ($6.9 MILLION) FASTER NEW STORE GROWTH ($20.0 MILLION) STORE RELOCATIONS & EXPANSION ($11.
Slide 24: Financial Metrics
FINANCIAL OUTLOOK Financial Metrics Comp Store Sales - 4.0% to 6.5% range EBIT margins - 30 BPS to 40 BPS Improvement per year
Slide 25: Store Growth
FINANCIAL OUTLOOK STORE GROWTH 2000 2001 2002 2003 2004E 2005E 2006E East 305 323 433 462 514 577 653
Slide 26: Total Sales Volume
FINANCIAL OUTLOOK TOTAL SALES VOLUME ($ in 000s) 2000 2001 2002 2003E 2004E 2005E 2006E East 759 850 1210 1430 1645 1910 2230
Slide 27: EBIT Margins
FINANCIAL OUTLOOK EBIT MARGINS 2000 2001 2002 2003E 2004E 2005E 2006E East 4.5 4.6 5.4 6.5 6.8 7.2 7.6
Slide 28: Return on Capital
FINANCIAL OUTLOOK RETURN ON CAPITAL 2000 2001 2002 2003 2004 2005 2006 East 10.6 14.2 17 19.5 21 23.2 25
Slide 29: Forward-Looking Statements
This presentation contains certain historical and forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 ("the Act"). All statements, other than statements of historical facts, which address
Slide 30: Summary
SUMMARY Focused market niche Clear strategy Solid financial plan Strong culture Aligned senior leadership
Slide 31: Visit us online
Visit us online... www.myTSCstore.com Visit a Tractor Supply Store Today!
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