Metcash Limited · ASX:MTS
Metcash — H1 FY2025 Earnings Presentation
39 slides from Metcash's earnings presentation, Dec 2, 2024
Slide 1: Metcash FY25 Half Year Results Presentation ASX cover letter
Metcash Limited ABN 32 112 073 480 1 Thomas Holt Drive Macquarie Park NSW 2113 Australia 2 December 2024 Market Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney NSW 2000 Dear Sir/Madam METCASH LIMITED – FY25 HALF YEAR RESULTS PRESENTATION Please find attached for r
Slide 2: 1H25 Half Year Results
1H25 Half Year Results 2 December 2024
Slide 3: Group overview and divisional results
Group overview and divisional results Doug Jones Group Chief Executive Officer
Slide 4: Acknowledgement of country
Acknowledgement of country We acknowledge the Traditional Custodians of the land on which we are all connecting today. We are connecting from Wallumedegal Country and pay respects to Elders across Country, past, present and emerging. 3
Slide 5: Our Purpose
Our Purpose Championing Successful Independents in support of Strategy Operating Culture, Values thriving local communities Model and obsessions Guides Guides Guides Where to play How we create & How we behave How to win capture value Successful independents Thriving communities Metcash is the leadi
Slide 6: Our flywheel
Our flywheel Is at the center of our unique 03 business model 02 01 01 Supply chain and logistics capability, reach, reliability and efficiency Our core 02 Independent businesses operated by our ts Attrac wholesale independent partners rma & logistics Fo tiv an n d e dS a 03 tro n g Bran ds Support
Slide 7: Group overview
Group overview Diversified portfolio strategy continues to deliver 1. Market share held in Food and Hardware, up in 5. Hardware responding to weaker activity – Liquor ideally positioned for market improvement 2. Strong earnings growth in Food 6. Acquisitions performing as expected given market condi
Slide 8: Group financial overview
Group financial overview Group Revenue1 Group EBIT Reported PAT Strong sales performance in challenging conditions – earnings held $9.6bn $246.1m $141.8m +6.3% underlying flat +0.6% (underlying -5.5%) Cash realisation Underlying ratio2 EPS3 Total Dividend 85.5% 12.3cps 8.5cps 3yr average reported -1
Slide 9: Results overview by pillar
Results overview by pillar 1H25 $m 1H24 $m % Food Hardware Liquor Sales Revenue (including charge-through1) Food2 5,207.2 4,732.2 10.0 19% Liquor 2,536.4 2,485.2 2.1 20% Hardware 1,828.0 1,783.5 2.5 54% 53% 27% Total sales revenue 9,571.6 9,000.9 6.3 27% (including charge-through sales1) Less: Charg
Slide 10: Food sales
Food sales A larger, more diversified and more resilient business 1H25 $m 1H24 $m % Supermarkets sales Total revenue as per Statutory Accounts 4,590.5 4,116.6 11.5 • Quality and competitiveness of independents’ offer continued to resonate despite highly value-conscious environment Charge-through sal
Slide 11: Food EBIT
Food EBIT A larger, more diversified and more resilient business 1H25 $m 1H24 $m % EBIT 119.9 101.7 17.9 Supermarkets and Campbells & Convenience Supermarkets and Campbells & • Strong trading performance (ex tobacco) underpinned by EBIT margin 105.6 101.7 3.8 Convenience improvement 14.3 - - 1 Super
Slide 12: Liquor
Liquor Strong sales performance underpinned by localised offer and 1H25 $m 1H24 $m % improved execution of diversified customer strategy Total revenue as per Statutory Accounts 2,529.3 2,478.2 2.1 Sales • Independents localised and competitive offer continued to drive share gains Charge-through sale
Slide 13: Hardware
Hardware Disciplined execution in challenging market 1H25 $m 1H24 $m % Sales Total Hardware • Continued softening in Trade activity, particularly in Q2 Total revenue as per Statutory Accounts 1,351.1 1,242.9 8.7% • Total sales increased 2.5% to $1.8bn reflecting the impact of acquisitions o IHG +2.7
Slide 14: Hardware - IHG
Hardware - IHG 1H25 $m 1H24 $m % Sales IHG • Further softening in Trade activity, particularly in Q2 3 Total revenue (including charge-through) 1,471.4 1,432.6 2.7 • Market share held • Online sales +5.4%, conversion rate +17% Total network retail sales 1,695.1 1,745.6 (2.9) 1 • DIY loyalty sales +1
Slide 15: Hardware – Total Tools
Hardware – Total Tools Total Tools sales 1H25 $m 1H24 $m % • Sales growth reflects new store roll out, partly offset by impact of: o Intense price competition in Q1 Total Tools o Weaker Trade activity Total revenue (including charge-through) 356.6 350.9 1.6 o Trades people buying less due to cost-of
Slide 16: Hardware – strong fundamentals in challenging market
Hardware – strong fundamentals in challenging market Focus on costs, cash and accelerating growth Actions Actions Long term market fundamentals remain positive • Strong focus on costs (reduction of headcount • Margin initiatives • Australia’s housing under-supply and labour hours, and elimination of
Slide 17: Group financials
Group financials Deepa Sita Group Chief Financial Officer
Slide 18: Financial Overview
Financial Overview • Continued sales growth in challenging external conditions, supported by strategic acquisitions • Financial position includes benefit of Superior Foods acquisition on 3 June 2024 o Enterprise Value $412m • Excellent cost performance through disciplined execution • 3yr cash realis
Slide 19: Capital Management
Capital Management Framework 1H25 Outcomes Consistent and disciplined application of capital framework Cash from Cash for Net interest operating investing & lease 1H24 $164m activities activities payments Operating cashflow $218m Cash realisation Core capex Service obligations Capex & M&A 1 $471m $7
Slide 20: Profit and Loss
Profit and Loss 1H25 ($m) 1H24 ($m) % Sales revenue including charge-through sales 9,571.6 9,000.9 6.3 Charge-through sales (1,100.7) (1,163.2) (5.4) Sales revenue per statutory accounts 8,470.9 7,837.7 8.1 1 EBITDA 360.0 340.8 5.6 Depreciation and amortisation (113.9) (94.3) (20.8) EBIT 246.1 246.5
Slide 21: Cashflows
Cashflows 1H25 ($m) 1H24 ($m) Operating cashflows 1 164.0 217.7 Investing cashflows , net 2 (465.5) (71.1) Capital expenditure (including Project Horizon, DC upgrades and store upgrades) 3 (71.0) (57.2) Acquisitions of businesses 1, 4 (400.1) (19.0) Net loan repayments and other investing activities
Slide 22: Balance Sheet
Balance Sheet 3 31 Oct 24 ($m) 30 Apr 24 ($m) Capital expenditure ($m) % Trade and other receivables and prepayments 2,192.6 1,906.2 Sales ($bn) Inventories 1,529.0 1,196.9 19 400 18 Trade payables and provisions (3,163.1) (2,635.0) 17 300 Net working capital 558.5 468.1 16 1 200 15 Intangible asset
Slide 23: Debt Management
Debt Management 1 Debt facility maturity profile Group cash movements for 1H25 ($m) % 300 200 $m 100 0 FY25 FY26 FY27 FY28 FY29 FY30 FY32 Working capital Bi-lateral facility Syndicated facility (725) et ebt perating et ape Ac uisitions ut option et lease et dividend et ebt • Net debt of $725.0m (FY2
Slide 24: Dividends
Dividends Dividend • Interim dividend 8.5 cps o Ex dividend date: 13 December 2024 o Record date: 16 December 2024 o Payment date: 29 January 2025 Dividend reinvestment plan • No discount • Participation deadline: 17 December 2024 • Pricing period: 6 January 2025 – 17 January 2025 • Announcement of
Slide 25: Disciplined Execution
Disciplined Execution Cost Savings Working Capital Synergies Continued focus on costs, working capital • Cost-out program launched • Review of debt management to • Supplier trading term and synergies successfully across the Group, manage aged debt through the cycle negotiations underway targeting op
Slide 26: Group outlook
Group outlook Doug Jones Group Chief Executive Officer
Slide 27: Outlook and trading update
Outlook and trading update Group Pillar sales – first 4 weeks of 2H25 1 Group Total Group revenue for the first four weeks of 2H25 has been strong with growth in the Food, Liquor and Hardware pillars, partly buoyed by acquisitions. • Total sales +8.0% Total Food revenue has increased significantly,
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Slide 29: Appendices
Appendices 1 Financial history 2 Total Tools EBIT margin 3 Put options Total Tools & put option accounting and maturity 4 Bannered store numbers 5 Pillar strategic initiatives 6 ESG highlights 7 Project Horizon update 8 Pro-forma average net debt – 1H25
Slide 30: Financial history
Financial history 01. 1H25 1H24 1H23 1H22 1H21 Financial Performance Sales revenue ($m) 8,470.9 7,837.7 7,737.8 7,150.6 7,059.7 Sales revenue (including charge-through sales) ($m) 9,571.6 9,000.9 8,862.7 8,129.1 8,093.9 Underlying EBIT ($m) 246.1 246.5 255.1 231.2 203.0 Underlying EBIT margin1 (%) 2
Slide 31: Hardware – Total Tools (EBIT margin deep dive)
Hardware – Total Tools (EBIT margin deep dive) 02. Focus on maximising EBIT dollars TT Sales & EBIT performance Expanding JV store network is a key growth strategy 1200 60 • 21.6% 1,108 1,137 Results in: 1000 50 LTM Network sales ($m) • 1,031 800 904 14.0% 40 o Additional EBIT dollars 15.8% EBIT ($m
Slide 32: Total Tools and put option accounting
Total Tools and put option accounting 03. By virtue of put option accounting requirements, Metcash consolidates 100% of the Total Tools JV store earnings (with no non-controlling interest) and 100% of the balance sheet, notwithstanding Total Tools oldings’ ownership interest of between % - 95% in 52
Slide 33: Put options – maturity
Put options – maturity 03. Put option maturity at 1H25 Number Financial Put option of stores Year value $m Statement of Financial Position Total Tools JV Stores Between May 2025 and July 2025 4 FY26 5.0 Between May 2026 and July 2026 2 FY27 7.8 Between May 2027 and July 2027 25 FY28 63.5 Between May
Slide 34: Bannered store numbers
Bannered store numbers 04. Store movement in period October 2024 opened / joined closed / left April 2024 Supermarkets banner group banner group Supa Valu IGA 4 4 Large format IGA 244 244 Medium format IGA 637 642 Small Format IGA 400 391 1 Total IGA bannered stores 1,285 15 (11) 1,281 Total Superma
Slide 35: Strategic initiatives update
Strategic initiatives update 05. Food Liquor Hardware Leveraging platform for • Completed acquisition of Superior Food in June • N/A • Completed acquisition of Bianco and Alpine Truss in March 2024 M&A growth and 2024 • Total Tools accelerated growth in commercial enhancing performance segment (+22%
Slide 36: Continued good progress on ESG
Continued good progress on ESG 06. Disclosures Improvements Targets Impact Achieved Interim 2030 Emissions Donations through IGA community Modern Slavery Statement Total Reportable Injury Frequency Rate Target for FY24 NGER chest program 'B' by Monash University – released Nov 2024 12.05 16% FY24 im
Slide 37: Project Horizon
Project Horizon 07. Solution schematic Substantially In progress complete Moving from legacy ERP to suite of Microsoft and best of breed strategic capabilities on evergreen cloud platform Deployment schedule Core finance on Supply Chain Control Tower an evergreen Inventory Pricing data transactional
Slide 38: Pro-forma average net debt – 1H25
Pro-forma average net debt – 1H25 08. Metcash’s pro-forma average net debt during the six months of 1H25 was $878.1m This equates to a DLR of 1.53x10, which is within the target range of 1.0x to 1.75x Notes: 1. Represents the actual net debt position at the end of April 2024. Note that this included
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