B&m European Value Retail Plc · LSE:BME
B&m European Value Retail — FY2016 Earnings Presentation
21 slides from B&m European Value Retail's earnings presentation, May 2016
Slide 1: Preliminary Results Presentation, 52 weeks to 26th March 2016
B&M European Value Retail SA Preliminary Results Presentation 52 weeks to 26th March 2016
Slide 2: FY16 Group Highlights
FY16 Group Highlights • A record number of 79 UK store openings (net 74 openings) and 6 new stores in Germany • Group revenues increased by 23.6% to £2,035.3m • UK LFL revenues +0.3% and underlying LFL +2.4% • Group adjusted Profit before Tax increased by 19.5% to £161.4m • Net cashflow from operati
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, March year end 2015A 2016A % £ millions, Group Stores 475 555 16.8% Revenues 1,646.8 2,035.3 23.6% Gross Profit 569.9 703.0 23.4% % 34.6% 34.5% (6)Bps Operating Costs (395.7) (500.5) 26.5% Adjusted EBITDA 174.2 202.5 16.2% % 10.6% 9.9% (63)Bps Depreciation and Amo
Slide 5: Group Revenue Bridge
Group Revenue Bridge £ millions, REVENUE 2015A-2016A 371 12 2,035 242 5 • +24.3% revenue growth at constant currency • Annualisation of net 52 new stores from FY2015 129 • 74 net new stores opened in the UK • £12m of revenue from Jawoll relating to the 1,647 additional month trading, the 6 new store
Slide 6: Continued EBITDA Growth
Continued EBITDA Growth £ millions, ADJUSTED EBITDA BRIDGE 2015A-2016A Margin % 10.6% 9.9% New Stores LFL Stores 1 2 Note 1: Infrastructure largely comprises the fixed cost of the new warehouse Ref: 750493 Note 2: Germany includes £0.9m of translational currency loss 6
Slide 7: LFL Sales
LFL Sales UNADJUSTED DEFINITION, FY2016 UNDERLYING LFL, FY2016 +0.3% +2.4% Unadjusted LFL +0.3% Underlying LFL only includes those stores that have traded for at least 14 months and excludes those stores that have New Store ‘Halos’ +0.6% been impacted by new store openings 1. Cannibalisation +1.5% U
Slide 8: Store Opening Financial Strategy
Store Opening Financial Strategy CASE STUDY – BOSTON, LINCOLNSHIRE • Existing town centre Bargain store annual revenues £3.9m • New Out Of Town Homestore opened 1.3 miles away on outskirts on 2nd May 2015 and was part of a “package” • Existing store revenues –23%, a reduction of £0.9m • New store es
Slide 9: Gross Margin Outturn
Gross Margin Outturn GROSS MARGIN (%) KEY HIGHLIGHTS • 6 bps reduction in group gross margin to 34.5% and in line 34.6% with guidance 34.5% • UK margins have reduced by 12 bps, impact of adverse US$ rates mitigated by favourable sales mix • Jawoll margins have improved by 105bps • Our strategy conti
Slide 10: Operating Costs
Operating Costs £ millions, KEY HIGHLIGHTS • Store costs as a % of sales were 22bps higher than last year 2015A 2016A reflecting flat LFL sales growth and some higher costs as we Store Costs 279.8 353.0 move further South Transport and Distribution 51.8 75.5 Central Costs 30.3 34.2 • Transport and D
Slide 11: Interest Expenses
Interest Expenses £ millions, KEY HIGHLIGHTS 2015A 2016A Interest 21.7 19.3 Amortised Fees 1.9 1.4 Total 23.6 20.7 • Interest and amortised fees relating to the bank debt Put/Call Option 2.0 0.7 • Non-cash impact, £0.7m of IFRS accounting for Jawoll put Fees Write Off 28.8 - / call option over manag
Slide 12: Strong Cash Flow Conversion and De-leveraging
Strong Cash Flow Conversion and De-leveraging £ millions, OPERATING CASH FLOW CASH FLOW STATEMENT 88% conversion £m 2015A 2016A Adjusted EBITDA 174.2 202.5 Change in Working Capital (15.3) (23.4) New Store Capex (21.8) (38.2) Infrastructure Capex (2.4) (4.8) Maintenance Capex (9.0) (13.1) Capex (33.
Slide 13: Simon Arora, Chief Executive Officer
Simon Arora Chief Executive Officer Ref: 750493 13
Slide 14: B&M Continues to Drive Revenue Growth
B&M Continues to Drive Revenue Growth +£376m in the % Revenue Increase UK Source : Latest annual accounts, or full year announcements (May 2016). Revenues exclude fuel, financial services and VAT except Sainsbury’s whose revenues are inclusive of VAT Ref: 750493 14
Slide 15: Continue to Successfully Roll Out New Stores
Continue to Successfully Roll Out New Stores 499 STORES AS AT MARCH 2016 FY2016 OPENINGS Record number of openings: 79 (net 74 stores) Consistent high store returns STORES PER 100,000 POPULATION 1.5 to 2.0 1.0 to 1.5 0.5 to 1.0 0 to 0.5 Ref: 750493 Source: Management information. 15
Slide 16: Compelling Value Leads to High Volumes
Compelling Value Leads to High Volumes SIGNIFICANT VOLUMES SOLD ON LINES WE OFFER 8.5m 3m packs of 2.6m 32m Birdseed 2.3m 2.6m Health & Beauty Duracell Batteries Duvet Sets Balls Pyjamas LED Light Sets Gift Sets 6.6m 1.1m Small 3.2m 105,000 8.2m 31,000 Mario Christmas Appliances Cushions Patio Sets
Slide 17: Product Range Enhancements
Product Range Enhancements RANGE EXTENSIONS – D.I.Y. BRANDED VALUE GOOD, BETTER, BEST £49.99 £69.99 £149.99 Ref: 750493 17
Slide 18: Productivity Returning in Distribution
Productivity Returning in Distribution NOVEMBER 2015 DISTRIBUTION COST % SALES1 MARCH 2016 DISTRIBUTION COST % SALES1 +120bps +15bps Nov FY15A Nov FY16A Mar FY15 Mar FY16 Note 1 : Variable Transport and Warehousing costs expressed as a % of revenues Ref: 750493 18
Slide 19: International Expansion - Germany
International Expansion - Germany SUMMARY CURRENT FOOTPRINT – GERMANY • Delivered € revenue growth of 18.1%, inclusive of extra month of trading • 6 new stores opened in the year including smaller footage trial • Attractive new store returns, with 10 planned for FY2017 • Meaningful EBITDA growth sin
Slide 20: Capital Structure and Dividends
Capital Structure and Dividends DE-LEVERAGING PROFILE CAPITAL RETURN • Net Debt to Adjusted EBITDA target 2.25 3.10 • Commencing a £100m capital return via a Special Dividend 2.19 • Record date, 10th June and paid 8th July 2016 1.75 ORDINARY DIVIDENDS • Proposed final dividend 3.2p and full year 4.8
Slide 21: Outlook for 2017
Outlook for 2017 • UK market remains competitive but relatively stable • Slow start to seasonal outdoor ranges in April trading but rebounding in May • Capital return to shareholders highlights our robust cash generative model • We are making good strategic progress: • Record number of store opening
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