B&m European Value Retail Plc · LSE:BME
B&m European Value Retail — FY2020 Earnings Presentation
28 slides from B&m European Value Retail's earnings presentation, 2020
Slide 1: B&M European Value Retail Preliminary Results Presentation
B&M European Value Retail Preliminary Results Presentation 52 weeks to 28th March 2020
Slide 2: FY20 Group Highlights
FY20 Group Highlights • Group revenues increased by 16.5% to £3,813.4m B&M UK LFL revenues were +3.3% with a strong finish, Q4 LFL +6.6% 51 gross new B&M store openings in the UK, net 36 18 gross new store openings at Heron, net 12 5 new store openings and 13 conversions to the ‘B&M’ format
Slide 3: Paul McDonald, Chief Financial Officer
Paul McDonald Chief Financial Officer Ref: 750493 3
Slide 4: Summary Profit and Loss – Pre and Post IFRS16
Summary Profit and Loss – Pre and Post IFRS16 £ millions, FY19A FY20A % Change Group Stores 997 1,050 5.3% Revenues 3,272.6 3,813.4 16.5% Gross Profit 1,120.2 1,289.2 15.1% % 34.2% 33.8% (42)Bps Pre IFRS 16 Basis Operating Costs (800.6) (946.9) 18.3% Adjusted EBITDA 319.6 342.3 7.1% % 9.8% 9.0% (79)
Slide 5: Group Revenue Bridge
Group Revenue Bridge REVENUE FY19-FY20 £ millions, • +16.5% Overall Group revenue growth 154 3,813 • B&M UK revenue growth + 12.6% Net New Stores £246m 36 16 • Annualisation of FY19 new store openings 89 136 • 51 gross new stores opened in the UK (3) including 8 relocations. 7 stores closed. 113 • U
Slide 6: Continued UK EBITDA Growth
Continued UK EBITDA Growth £ millions, ADJUSTED EBITDA BRIDGE FY19-FY20 Group Margin % 9.8% 9.0% B&M Fascia 10.5% 10.2% Margin % 6.9 15.8 0.3 5.6 342.6 (8.3) 10.9 (8.6) 319.6 2019A 2020A FY19 New FY20 New LFL Babou Central Heron Relocation/ Closed Net Ref: 750493 6 Note: 1. FY19 has been restated to
Slide 7: B&M UK Fascia LFL Sales
B&M UK Fascia LFL Sales FY20 LFL COMMENTARY H1 +3.7% H2 +2.9% • Full year LFL sales growth of +3.3% • Strong Q4 as a result of the pre-lockdown ‘stock piling’ 6.6% 5.8% 3.9% 3.5% • There has been growth in both customer numbers and 1.6% 0.3% average transaction values, which together delivered growt
Slide 8: Group Gross Margin Performance
Group Gross Margin Performance GROUP GROSS MARGIN (%) KEY HIGHLIGHTS • B&M UK fascia margins were 63bps lower than last year 34.2% • Headwind of shift in the mix towards grocery / FMCG 33.8% ranges • Continued impact on growth in wholesale margin revenues of c. £16m • Heron margins were 11bps higher
Slide 9: Group Operating Costs
Group Operating Costs £ millions, KEY HIGHLIGHTS FY19 FY20 • B&M UK fascia operating costs lower than last year as a B&M 660.0 734.4 percentage of revenues Heron 91.6 97.7 • impact of living wage mitigated through productivity gains France 49.0 114.8 Adjusted Costs exc IFRS16 800.6 946.9 • improveme
Slide 10: Group Interest Expenses
Group Interest Expenses £ millions, KEY HIGHLIGHTS FY19 FY20 • Interest and amortised fees relate to the bank debt and Cash Interest 20.2 22.6 bonds Amortised Fees 1.8 2.0 Total 22.2 24.6 Put/Call Option 1.7 - • We expect a full year interest charge (including fee amortisation) in FY21 of c. £23m pl
Slide 11: Cash Flows Pre-IFRS16
Cash Flows Pre-IFRS16 OPERATING CASH FLOW £m CASH FLOW STATEMENT £m FY19A FY20A 500 Adjusted EBITDA 319.6 342.3 442 450 Change in Working Capital (62.2) 99.7 400 350 New Store Capex (40.0) (42.4) 316 300 Infrastructure / Freehold Capex (30.5) (52.0) 257 250 Maintenance Capex (34.9) (31.3) 200 152 To
Slide 12: Simon Arora, Chief Executive Officer
Simon Arora Chief Executive Officer Ref: 750493 12
Slide 13: Discount Shopper Attitudes
Discount Shopper Attitudes Which of the following statements about shopping apply to you? (% of respondents) I am using discount stores more often: I am using discount • Higher among women (51%) than men (44%) stores more often • Highest for older consumers; those aged 55-64 (55%) and those with chi
Slide 14: UK Revenue Growth: Last Reported % Revenue Increase
UK Revenue Growth 15% Last Reported % Revenue Increase 5% -5% Note: 1. Latest annual accounts or full year announcements, up to May 2020. Revenues exclude VAT Note 2. Lidl do not separately disclose UK revenues Ref: 750493 14
Slide 15: B&M’s UK LFL Performance by category
B&M’s UK LFL Performance by category FY20 CATEGORY LFL SALES % FY20 CATEGORY LFL MARGIN % O O E H B E N I I G G B D N FY 20 LFL FY 20 LFL Cash H D Sales +3.3% Margin +2.1%, J J primarily due to category mix A A K L M M C C Clothing category, deliberately cut back and L K represents under 2% of mix F
Slide 16: New Store Programme
New Store Programme FY20 OPENINGS 656 STORES AS AT MARCH 2020 • 51 gross openings (net 36 stores due to 8 relocations and 7 store closures) UK Store Target • Consistently high new store remains at least 950 Stores returns • Expect to open just 30 net new stores in FY21, due to Covid-19 disruption •
Slide 17: Heron Foods Update
Heron Foods Update HIGHLIGHTS • Heron has performed above our expectations in FY20 • The buying and merchandising function on ambient food is now integrated with B&M’s function, whilst preserving unique competences in frozen & chilled • Positive LFL performance in FY20, helped by a very strong finis
Slide 18: Bedford is now fully operational
Bedford is now fully operational BEDFORD DISTRIBUTION CENTRE KEY HIGHLIGHTS • Facility was developed over FY18 , FY19 and FY20 at a cost of £103.7m • Sale & leaseback released £149.5m of capital, net of UK corporation tax on the development profit • Surplus capital returned to shareholders by Specia
Slide 19: B&M UK Covid-19 Response
B&M UK Covid-19 Response • Taking lead from Supermarkets, rapid implementation of social distancing guidelines at all stores – including masks, gloves, sanitiser, protective checkout screens and occupancy limits managed by social distancing marshals. • Leveraging 30 year trading relationships with o
Slide 20: Covid-19 Factors Create Uncertainty on FY21 B&M UK EBITDA
Covid-19 Factors Create Uncertainty on FY21 B&M UK EBITDA IMMEDIATE FULL YEAR Lockdown impact on high ticket Garden Furniture, high value D.I.Y. projects and pull forward because of record May weather Net positive so far Definite impact Net impact uncertain Tailwind Headwind Footfall impact from Soc
Slide 21: Babou France Update
Babou France Update • At FY20 year end we had 101 stores, of which 19 were under the ‘B&M’ banner • Progress made in switching products to the B&M supply chain in Asia whilst reducing exposure to Clothing and introducing a modest amount of Grocery/FMCG • Babou’s supply chain navigated peak stock int
Slide 22: Trading Since Year End
Trading Since Year End • Overall B&M UK Fascia LFL +22.7% after 8 weeks trading. LFL excluding Gardening and DIY +10.3% • B&M UK Fascia customer count -28.9% whilst traffic to UK retail parks generally was -70% to -50% over that period (Springboard) • B&M UK Fascia average transaction value +72.5%,
Slide 23: Capital Structure
Capital Structure DE-LEVERAGING PROFILE CAPITAL ALLOCATION FRAMEWORK 1.45x after UK STORE ROLLOUT AND INVEST IN BABOU payment of £150m Special Dividend in April 2020 2.19 1.84 1.92 1.91 ORDINARY DIVIDEND 1.71 1.02 M&A OPPORTUNITY FY15A FY16A FY17A FY18A FY19A FY20A RETURN SURPLUS CASH TO SHAREHOLDER
Slide 24: Outlook for FY21
Outlook for FY21 • Our variety retailing model, with our strength in Everyday Essentials, a well-invested infrastructure, strong value credentials and a convenient store network mean we are better positioned than most. • Business Rates holiday likely to be fully offset by Covid-19 related costs, dep
Slide 25: Summary
Summary • B&M’s value led variety retailing model has proved extremely resilient in the crisis and we have had a good start to the year. • There are a great deal of uncertainties ahead for the remainder of FY21, particularly in relation to duration and nature of social distancing requirements. • Our
Slide 26: Questions and Answers
Questions and Answers Ref: 750493 26
Slide 27: Appendix
Appendix Ref: 750493 27
Slide 28: IFRS16 Profit and Loss Account Reconciliation
IFRS16 Profit and Loss Account Reconciliation Appendix 1 £ millions, Pre FY19 IFRS16 Post FY19 Pre FY20 IFRS16 Post FY20 Revenues 3,272.6 - 3,272.6 3,813.4 3,813.4 Gross Profit 1,120.2 1,120.2 1,289.2 1,289.2 Operating Costs (800.6) 162.6 (638.0) (946.9) 186.2 (760.7) Adjusted EBITDA 319.6 162.6 482
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