Naked Wines plc · LSE:WINE
Naked Wines — Majestic Wine — FY2010 Earnings Presentation
34 slides from Naked Wines's earnings presentation, June 2010
Slide 1: Majestic Wine 2009/10 Results
Majestic Wine 2009/10 Results
Slide 2: Slide 2
Slide 3: Overview
Overview >> Total Group sales £233.2m (2009: £201.8m) >> Like for like UK sales up 8.4% >> Profit before tax up 117% to £16.0m >> Underlying profit before tax up 26% >> Underlying diluted earnings per share of 18.3p (2009: 14.0p) >> 7.5p final dividend giving a total of 10.3p per share, up 5.1% >> L
Slide 4: 2
2
Slide 5: Key Sales Drivers
Key Sales Drivers >> Move to six bottle minimum purchase >> Demise of First Quench Retailing >> Good growth in new customer acquisition >> More existing customers remaining active >> Sales of Champagne in growth in H2, just down for full year >> Business sales in growth since Christmas >> Excellent
Slide 6: Move to Six Bottle Minimum
Move to Six Bottle Minimum >> Strong growth in customer database, up 13% to 472,000 active customers (2009: 418,000) >> Since the move to six bottle minimum (Sept 2009) transactions have increased by 18% whilst average spend has decreased only 7% >> Since September 2009 lfl store new customer acquis
Slide 7: Move to Six Bottle Minimum
Move to Six Bottle Minimum 12 bottles is great “ if you’re stocking up. 6 bottles is great if you're popping in. Minimum purchase now just 6 bottles. Free delivery on 12 bottle purchases and online orders. Whenitcomes & to quality and value, this is the only thing we do by halves. Minimum purchase n
Slide 8: UK Wine Market
UK Wine Market Year to end March 2010 Wine Market Still wine value growth +7.2% (2009: +4.3%) Volume growth +5.0% (2009: -0.4%) Average bottle price £4.43 (2009: £4.33) Source: A C Nielsen Majestic Value growth +11.8% (2009: +4.3%) Volume growth +7.6% (2009: -0.7%) Still wine bottle price £6.56 (200
Slide 9: Sales Trends
Sales Trends Year to end March 2010 >> Increased share of still wine sales from New Zealand, South Africa, Chile and Argentina >> Sparkling wine sales rise 22%, Champagne sales just down 3% Product Mix 2010 Still Wine % Split 2010 Still Wine 68.5% • France 35.2% Champagne 14.9% • New Zealand 18.1% S
Slide 10: Sales
Sales 52 weeks ending 29.03.10 30.03.09 Change £000’s £000’s % UK retail store sales 193,993 175,449 10.6 Sales to large corporates* 19,547 16,148 21.0 Total Majestic UK sales 213,540 191,597 11.5 Lay & Wheeler 12,414 785 1,481.4 Wine & Beer World 7,266 9,412 (22.8)** Total Sales 233,220 201,794 15.
Slide 11: Gross Margin
Gross Margin 52 weeks ending 29.03.10 30.03.09 Change £000’s £000’s % Total sales 233,220 201,794 15.6 Cost of sales (183,528) (160,148) 14.6 Gross margin 49,692 41,646 19.3 Gross margin % 21.3 20.6 Improved labour cost absorption 0.4 Increase in product margin 0.2 Currency contract mark to market 0
Slide 12: Operating Costs
Operating Costs 52 weeks ending 29.03.10 30.03.09 Change £000’s £000’s % Store occupancy costs 12,323 11,359 8.5 Fleet costs 2,779 2,846 (2.4) Store depreciation 2,275 1,873 21.5 Depot wages 1,006 1,129 (10.9) Other distribution costs 1,782 1,191 49.6 Total distribution costs 20,165 18,398 9.6 Marke
Slide 13: Profit, EPS & Dividend
Profit, EPS & Dividend 52 weeks ending 29.03.10 30.03.09 Change £000’s £000’s % Profit for the financial year 16,011 7,379 117.0 Add back: impairment charge - 5,331 Underlying profit before tax 16,011 12,710 26.0 Underlying tax charge (4,731) (4,117) Underlying profit after tax 11,280 8,593 31.3 Und
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12
Slide 15: Cash Flow
Cash Flow 52 weeks ending 29.03.10 30.03.09 Change £000’s £000’s % Operating profit 16,011 7,542 8,469 Depreciation / amortisation 3,934 8,391 (4,457) Working capital movement (764) (1,204) 440 Tax paid (4,137) (4,332) 195 Net capital expenditure (6,150) (7,074) 924 Acquisition - (5,538) 5,538 Term
Slide 16: Ecommerce
Ecommerce >> Sales from orders placed on-line up 19.7% to £19.4m representing 10% of UK retail sales (2009: 9.1%) >> Transactions increase of 21% (2009: 12%); average spend of £139 (2009: £140) >> 21% increase in sales derived from PPC search engine advertising to £5.4m >> 217,000 customer email add
Slide 17: Ecommerce
Ecommerce CLOU DF. B AY Ret Bes ibotioNuG 27-006 Available for the first time in the UK, exclusively from majestic.co.uk £108 per case of 6 bottles Equivalent to just £18 per bottle 15
Slide 18: Fine Wine
Fine Wine >> Sales growth of 22.7% in 2009/10 >> Total sales of £9.9m representing 5.1% of UK store sales >> Average bottle price of £23.50 >> Fine wine now installed in 50% of Majestic stores >> Progressive rollout to all stores 16
Slide 19: Fine Wine
Fine Wine 17
Slide 20: Majestic Commercial
Majestic Commercial >> Sales to businesses now represent 22% of total UK sales >> Team of 25 Business Development Managers selling business to business >> They manage sales of £17.8m, up 6.7% on last year >> Kings Cross team focus on large corporates in central London as well as restaurants and cont
Slide 21: Majestic Commercial
Majestic Commercial On-trade Specialists # 19
Slide 22: Customer Engagement
Customer Engagement >> Series of initiatives aimed at bringing to life Majestic’s point of difference - the quality of its staff >> “Grape to Glass” - a quality seasonal guide to the world of wine written by our own staff >> “The Wine Course” - a free two hour wine and food tasting course held in-st
Slide 23: Customer Engagement
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Slide 24: Lay & Wheeler
Lay & Wheeler >> Profit of £248k before amortisation of £225k >> Lay & Wheeler is a specialist in en primeur, cellarage and broking >> Cost base now slimmed down to an appropriate level >> Cellarage pricing reduced to be competitive >> Trialling sales of customers reserves through Majestic stores >>
Slide 25: Lay & Wheeler
Lay & Wheeler ins the ranks of the best vintages of the last 30 years Vintage Summary ‘Our Wine Consultants’ Recommendations Full 2009 Vintage Tasting Notes CHATEAU ON Hal LA CHAPEL [SMISSION HAI
Slide 26: Majestic in France
Majestic in France >> Sales decline of 28% >> Profit before tax of £416k (2009: £405k) after cost savings from re-structuring in 2009 >> New marketing message introduced in February >> Guaranteed £2 a bottle saving on Majestic UK prices >> Tiered pre-order discount structure >> Increased frequency o
Slide 27: Majestic in France
Majestic in France WINE<°EWORLD PAY £2 LESS a7 BIE RR WINE=-2WORLD JUST 24 MILES ACROSS THE CHANNEL OVER 300 WINES £2 LESS PER BOTTLE THAT’S 1 EXTREMELY WORTHWHILE TRIP G majesticinfrance.co.uk 25
Slide 28: New Stores
New Stores 6 new locations 1 re-site Southend West End, Glasgow Shrewsbury Leith Walk, Edinburgh Openings since the year end: Market Harborough Redhill Abingdon Sale To give 153 stores in the UK Next openings Windsor - July Canterbury - August Expected 12 openings in 2010/11 All new stores now have
Slide 29: New Store
New Store Sale 27
Slide 30: Majestic People
Majestic People >> Continued investment in recruitment at graduate level >> Increased investment in internal training >> All retail staff take Wine and Spirit Education Trust (WSET) Advanced Certificate >> 149 staff either hold or are studying for the WSET Diploma >> Share options issued to staff do
Slide 31: WSET Winners
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Slide 32: 2009/10 Awards
2009/10 Awards International Wine Challenge High Street Chain of the Year Decanter Magazine High Street Chain of the Year Readers Awards Best Large Wine Merchant Off Licence News High Street Chain of the Year Innovation of the Year Management Today Most Admired Specialist Retailer The Drinks Busines
Slide 33: 2009/10 Awards
2009/10 Awards 31
Slide 34: Slide 34