Mr Price Group Limited · JSE:MRP
Mr Price — FY2011 Earnings Presentation
36 slides from Mr Price's earnings presentation, March 2011
Slide 1: Annual results March 2011
annual results march 2011 Mr Price Group Limited Annual results March 2011 Mr Price Group Limited
Slide 2: Overview of retail environment
Overview of retail environment • Increase in retail sales in real terms for 14 consecutive months • Positive growth in GDP for six consecutive quarters • Interest rates lowest in three decades • Strong Rand helping offset impact of high oil price and increases in merchandise input prices annual resu
Slide 3: South African retail sales growth
South African retail sales growth 25% Source: Statistics SA 20% % growth 15% 10% annual results march 2011 5% 0% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2010 2011 Retailers in textiles, clothing, footwear and leather goods Total SA retail sales Mr Price Group Mr Price Group Limited 2
Slide 4: Business and consumer confidence
Business and consumer confidence 20 60 15 Consumer Business 10 40 5 0 20 -5 -10 0 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar 08 09 10 11 annual results march 2011 Consumer Business – Relatively high historically – More companies optimistic than – Outlook on own finances and economy, pes
Slide 5: Celebrating our 25th anniversary
Celebrating our 25th anniversary 420 64 360 HEPS and DPS (cents) 48 Share Price (Rand) 300 240 32 180 annual results march 2011 120 16 60 0 0 1986 1991 1996 2001 2006 2011 25 Year Compound Annual Growth Rate Share price DPS HEPS 26.2% 25.3% 23.5% Mr Price Group Limited 4
Slide 6: 2011 Group highlights
2011 Group highlights 2011 2010 Growth Retail sales R10.7 bn R9.5 bn 12.9 % Comparable sales • Including expanded and relocated stores in like-for-like locations 11.0 % • Excluding the above* - 53 weeks 10.2 % - 52 weeks 7.8 % annual results march 2011 RSP inflation 3.0 % Units sold 183 m 167 m 9.9
Slide 7: 2011 Group income statement
2011 Group income statement R’m 2011 2010 Growth Retail sales 10 673 9 454 13 % Cost of sales 6 202 5 685 9% Gross profit - Rand 4 471 3 769 19 % -% 41.9% 39.9% Other income 240 214 12 % Selling expenses 2 505 2 313 8% Administrative/other expenses 772 678 14 % annual results march 2011 Profit from
Slide 8: Operating margin analysis
Operating margin analysis Operating margin last year 10.5 % Gross profit: Input margin 1.2 % Markdowns 1.0 % Other (0.2 %) Store expenses: Employment 0.2 % Occupancy 0.3 % Other 0.5 % annual results march 2011 Administrative and central costs (0.1 %) Operating margin this year (52 weeks: 13.2%) 13.4
Slide 9: Sales and operating profit growth
Sales and operating profit growth 1st half 2nd half Full year 26 weeks 26 weeks 52 weeks Sales Apparel 11.4 % 10.4 % 10.8% Home 10.0 % 9.7 % 9.8% Total 11.0 % 10.2 % 10.5% Operating profit annual results march 2011 Apparel 34.4 % 22.3 % 27.1% Home 1 785.7 % 79.4 % 153.7% Total 57.4 % 29.7 % 39.3% •
Slide 10: Earnings per share
Earnings per share 2011 2010 Growth 53 weeks Basic earnings per share 412.3 c 273.5 c 51 % Headline earnings per share 418.9 c 276.9 c 51 % Core headline earnings per share 420.6 c 285.7 c 47 % 52 weeks Basic earnings per share 396.7 c 45 % annual results march 2011 Headline earnings per share 403.3
Slide 11: Dividends per share
Dividends per share Dividend cover retained at 1.6 times (based on 52 week HEPS) Final dividend 175.3c +38% Annual dividend 252.0c +46% 2011 2010 2009 2008 2007 annual results march 2011 2006 0 50 100 150 200 250 300 Cents per share 5 year 10 year 25 year DPS 25.5% 35.6% 25.3% • 25 year CAGR in divi
Slide 12: Financial position
Financial position R’m 2011 2010 Non-current assets Property, plant and equipment 460 530 Intangible and other assets 148 156 Current assets Inventories 954 935 Trade and other receivables 931 818 annual results march 2011 Cash and cash equivalents 1 368 1 171 3 861 3 610 Equity attributable to shar
Slide 13: Project Redgold
Project Redgold Retail Sales (R’m) annual results march 2011 STOCK TURN 5.3 5.5 5.9 6.6 Retail Sales Inventories Cash generated from operating activities 2008 2009 2010 2011 Over the last four years inventory up 5% and sales up 48% Mr Price Group Limited 12
Slide 14: Capital expenditure
Capital expenditure R156m F2012 Retail capex 160 Other 17 140 DC 11 120 IT 30 New stores 100 Revamps 24% R’m 80 33% annual results march 2011 60 Retail 40 98 Expansions 20 and relocations 0 43% 2011 Projected capex spend for F2012 - R305m, of which retail spend is R181m Mr Price Group Limited 13
Slide 15: Trade receivables
Trade receivables 2011 2010 Growth Gross trade receivables R820 m R788 m 3.9 % Net bad debts as % of credit sales* 2.1 % 3.7 % Ned bad debts as % debtors* 4.5 % 7.0 % Impairment provision (% of debtors) 9.1 % 9.1 % * Excludes collection costs, movement in provision annual results march 2011 Independ
Slide 16: Trade receivables (cont.)
Trade receivables (cont.) 2011 2010 Growth Number of active accounts 1 034 k 903 k 14.5 % Average credit limit R2 228 R2 378 (6.3 %) Average balance R792 R873 (9.2 %) % able to purchase 89 % 88 % New application approval rate 41 % 38 % annual results march 2011 Average debtor credit limits and balan
Slide 17: Cash flow – significant items
Cash flow – significant items 2 000 1 535 1 500 1 000 R’m 500 223 0 (156) (161) annual results march 2011 (500) (210) (444) (512) (1 000) Operating Working Net interest Tax Capex Net purchase Dividends to profit capital received of shares by shareholders changes staff share trusts Cash sales 83.8% (
Slide 18: Finweek Top Review – March 2011
Finweek Top 200 Review – March 2011 Measure Ranking on JSE Market capitalisation R16.5bn 59 Profit after tax R694m 62 Internal rate of return 32.8% 23 Return on equity 42.7% 26 Return on average total assets 27.2% 49 Interest cover 188 times 20 annual results march 2011 Cash flow to debt 4.3 times 3
Slide 19: Divisional Performance
annual results march 2011 Mr Price Group Limited Mr Price Group Limited 18 Divisional Performance .
Slide 20: Segmental performance – Apparel
Segmental performance – Apparel All segmental and divisional information is based on 52 weeks for both periods, or 26 weeks for the 2nd half 2011 2010 Growth Retail sales R7.4 bn R6.7 bn 10.8 % Retail sales and other income R7.6 bn R6.9 bn 10.9 % Comparable sales - year 6.3 % - 2nd half 6.1 % Unit s
Slide 21: Mr Price
Mr Price 2011 2010 Growth Retail sales R5.9 bn R5.2 bn 11.8 % Comparable sales - year 7.5 % - 2nd half 7.3 % Unit sales 8.6 % RSP inflation 3.1 % Weighted average space growth 5.3 % annual results march 2011 Trading density R28 094 m-2 R26 414 m-2 6.4 % Stock turn (times) 7.2 7.0 Number of stores 34
Slide 22: Highlights
Highlights 2011 2010 Market Contribution Market share to sales share Clothing 13.4% 86% 13.4% Footwear 8.5% 14% 7.7% Total 12.4% 100% 12.3% • Per AMPS, division increased its overall shopper numbers by 16% and annual results march 2011 those in its target market by 30% • Per Bateleur Khanya, Mr Pric
Slide 23: Mr Price Sport
Mr Price Sport 2011 2010 Growth Retail sales R542 m R437 m 24.0 % Comparable sales - year 7.1 % - 2nd half 7.1 % Unit sales 25.1 % RSP inflation (0.7 %) Weighted average space growth 5.2 % annual results march 2011 Trading density R12 241 m-2 R10 382 m-2 17.9 % Stock turn (times) 5.1 3.8 Number of s
Slide 24: Highlights
Highlights • Sales exceeded R500 million in just over four years % contribution to sales Apparel 52% Footwear 15% Equipment and accessories 33% Total 100% • annual results march 2011 Enhancements to procurement process and leveraging off group purchasing power strengthened value offer • Opened first
Slide 25: Miladys
Miladys 2011 2010 Growth Retail sales R1.0 bn R1.0 bn 0.2 % Comparable sales - year 0.9 % - 2nd half 0.7 % Unit sales (15.9 %) RSP inflation 18.7 % Weighted average space growth (4.4 %) annual results march 2011 Trading density R14 834 m-2 R14 158 m-2 4.8 % Stock turn (times) 6.4 6.7 Number of store
Slide 26: Highlights
Highlights 2011 2010 Market Contribution Market share to sales share Outerwear 4.8% 65% 5.4% Intimatewear 2.9% 10% 2.6% Footwear 3.1% 13% 3.4% Accessories 8.8% 10% 10.2% Cosmetics 0.4% 2% 0.1% annual results march 2011 Total 3.8% 100% 4.1% • Per AMPS, 7% increase in brand recall among customers surv
Slide 27: Segmental performance - Home
Segmental performance - Home 2011 2010 Growth Retail sales R3.0 bn R2.7 bn 9.8 % Retail sales and other income R3.1 bn R2.8 bn 9.9 % Comparable sales - year 11.2 % - 2nd half 12.2 % Unit sales 7.5 % RSP inflation 2.8 % annual results march 2011 Weighted average space growth (2.9 %) Trading density R
Slide 28: Mr Price Home
Mr Price Home 2011 2010 Growth Retail sales R2.1 bn R1.9 bn 9.6 % Comparable sales - year 11.2 % - 2nd half 11.1 % Unit sales 8.0 % RSP inflation 2.3 % Weighted average space growth (2.9 %) annual results march 2011 Trading density R14 729 m-2 R12 925 m-2 14.0 % Stock turn (times) 5.8 4.7 Number of
Slide 29: Highlights
Highlights 2011 2010 Market Contribution Market Share to sales share Domestic textiles 27.3% 55% 25.9% Household utensils 20.2% 13% 19.7% Accessories and décor 12.6% 32% 13.5% Total 19.3% 100% 19.5% annual results march 2011 • Bateleur Khanya research reflected Mr Price Home as the most loved and mo
Slide 30: Sheet Street
Sheet Street 2011 2010 Growth Retail sales R933 m R846 m 10.3 % Comparable sales - year 11.1 % - 2nd half 14.3 % Unit sales 6.5 % RSP inflation 3.8 % Weighted average space growth (3.0 %) annual results march 2011 Trading density R19 040 m-2 R16 715 m-2 13.9 % Stock turn (times) 5.9 4.8 Number of st
Slide 31: Highlights
Highlights 2011 2010 Market Contribution Market share to sales share Domestic textiles 21.0% 84% 20.1% Accessories and décor 3.3% 16% 3.5% Total 9.8% 100% 9.8% • Per Bateleur Khanya, voted second most loved and third most known annual results march 2011 and most shopped textile brand • Winner of Ask
Slide 32: Mr Price International
Mr Price International • African footprint now 67 stores: 43 owned, 24 franchise • Sales to franchisees: R94m • Approval for bond store granted, phase-in has commenced • Strategic focus is on corporate owned stores in areas where critical mass can be achieved - Nigeria, Angola and Ghana • Initial gr
Slide 33: Economic outlook
Economic outlook • Recent data indicates that the recovery remains fragile • Real GDP growth of 3% to 4% in medium term • Interest rate cycle may change in 2nd half • Reserve bank recently raised its inflation outlook – expected to breach the 6% level in Q4 2011 annual results march 2011 • Job creat
Slide 34: Prospects
Prospects • Rise in living standards for most South Africans will continue to benefit industries catering to consumers • Trend has recently been driven by rising real incomes rather than debt Migration through the LSM's LSM’s targeted by Mr Price Group 7 000 6 000 annual results march 2011 No. of ad
Slide 35: Focus going forward
Focus going forward • Accelerate growth in categories where we are underpenetrated • Identifying space opportunities – plan to open 40 to 50 stores in F2012. Closing space growth to be 4% to 5% • International – country research completed, focus is now ‘on the ground’ • Development of supply chain b
Slide 36: Thank You
annual results march 2011 Thank You Mr Price Group Limited 35