Super Retail Group Limited · ASX:SUL
Super Retail — Investor Presentation (February 2020)
36 slides from Super Retail's investor presentation, Feb 20, 2020
Slide 1: Results for the 26 weeks to 28 December 2019
RESULTS FOR THE 26 WEEKS TO 28 DECEMBER 2019 ANTHONY HERAGHTY Group Managing Director and Chief Executive Officer DAVID BURNS Chief Financial Officer 20 February 2020 The release of this presentation has been authorised by the Super Retail Group Limited Board
Slide 2: Content
Content GROUP HIGHLIGHTS 2019/20 1st HALF PERFORMANCE STRATEGY UPDATE 2019/20 TRADING AND OPERATING UPDATE APPENDICES Performance Trends Segment Notes AASB 16 Impact on Financial Statements SUPER RETAIL GROUP 2
Slide 3: Results overview
Results overview FINANCIAL PERFORMANCE GROUP SEGMENT SEGMENT OPERATING INTERIM SALES EBITDA EBIT CASHFLOW DIVIDEND $1,443.5m $159.8m1 $115.4m1 $239.1m1 21.5 CENTS GROUP SALES SEGMENT EBITDA SEGMENT EBIT OPERATING CASHFLOW INTERIM FULLY FRANKED UP 2.9% ON PCP DOWN 3.9% ON PCP DOWN 7.3% ON PCP UP 1.6%
Slide 4: Track record of sales growth
Track record of sales growth THE GROUP HAS CONTINUED TO DELIVER SOLID TOP LINE GROWTH AND POSITIVE LIKE FOR LIKE SALES GROWTH IN A CHALLENGING RETAIL ENVIRONMENT GROUP H1 GROUP H1 H1 SALES H1 LFL SALES SALES ($M) LFL SALES GROWTH GROWTH GROWTH 1,216 1,296 1,324 1,403 1,444 4.3% 5.0% 2.2% 2.7% 1.7% 3
Slide 5: Impact of bushfires/drought on peak trade sales
Impact of bushfires/drought on peak trade sales PEAK SALES ACROSS ALL BRANDS ADVERSELY IMPACTED BY EXTREME WEATHER EVENTS H1 LFL sales - SCA H1 LFL sales - Rebel 2.7% 2.0% 2.4% 3.1% 3.4% 3.3% • Regional stores • Sales momentum in NSW, Victoria in NSW, ACT and and Queensland Victoria slowed most affe
Slide 6: Online sales growth of 22%
Online sales growth of 22% EACH OF THE BRANDS INCREASED ONLINE MARKET SHARE1 FIRST HALF ONLINE SALES ($M) BRAND PERFORMANCE 4 YR CAGR 60% 1H ONLINE ONLINE SALES 19 33 80 104 127 SALES ($M) GROWTH VS PCP 37.2 24% 59.3 21% 23.7 22% 6.6 27% Total Group 126.8 22% DEC 15 DEC 16 DEC 17 DEC 18 DEC 19 SUPER
Slide 7: Customer behaviour supports omni-retail focus
Customer behaviour supports omni-retail focus 96% OF SALES LEVERAGE THE STORE NETWORK GROUP SALES BY CHANNEL1 BRAND SALES BY CHANNEL1 Click & Home In-store Collect Delivery ONLINE % OF TOTAL SALES ONLINE SALES 94% 4% 2% 4% HOME DELIVERY 54% SALES 90% 3% 7% CHANNEL 4% 93% 5% 2% 92% CLICK & COLLECT 46
Slide 8: Customer growth outpacing store growth
Customer growth outpacing store growth ACTIVE CLUB MEMBERS HAVE INCREASED TO OVER 6.4 MILLION CLUB MEMBER NPS1 641 627 640 688 697 43.1 53.5 57.9 59.6 62.4 6.4 5.8 5.3 4.8 4.4 4 year STORES CAGR Active members: 9.8% Stores: 2.1% DEC 15 DEC 16 DEC 17 DEC 18 DEC 19 DEC 15 DEC 16 DEC 17 DEC 18 DEC 19 S
Slide 9: Growing loyalty
Growing loyalty CLUB MEMBERSHIP, CLUB MEMBER NPS AND % SALES FROM CLUB MEMBERS INCREASED ACROSS ALL BRANDS 1.70M active1 2.75M active1 1.52M active1 0.47M active1 club members 13% 8% 8% 34% club members club members club members 63% NPS2 from 60% 60% NPS2 from 57% 64% NPS2 from 67% NPS2,3 58% 40% -
Slide 10: 2019/20 1st Half Performance
GROUP HIGHLIGHTS 2019/20 1ST HALF PERFORMANCE STRATEGY UPDATE 2019/20 TRADING AND OPERATING UPDATE APPENDICES Performance Trends Segment Notes AASB 16 Impact on Financial Statements SUPER RETAIL GROUP 10
Slide 11: Group results
Group results 1H 2019/20 1H 2018/19 Change $m Pre AASB 161 Pre AASB 16 % Total sales 1,443.5 1,403.2 2.9% Total segment EBITDA 159.8 166.2 (3.9%) Segment D&A (44.4) (41.7) 6.5% Total segment EBIT 115.4 124.5 (7.3%) Normalised NPAT 74.1 81.6 (9.2%) Other items not included in normalised NPAT 12.7 9.9
Slide 12: First half EBIT margin drivers
First half EBIT margin drivers FOCUS ON DELIVERING HIGHER GROSS MARGIN AND COST SAVINGS FROM BUSINESS SIMPLIFICATION TO OFFSET HIGHER LABOUR AND RENTAL COSTS • EBIT margins declined by 90bps from 8.9% in pcp to 8.0% primarily due to: First half EBIT margins - increase in store based wages due to new
Slide 13: Segment results
Segment results FIRST HALF EBIT CONTRIBUTION (BY BRAND) $m 1H 2019/20 1H 2018/19 Segment Sales EBIT1 Sales EBIT 2% Supercheap Auto 550.7 57.3 530.8 57.1 9% Rebel 542.8 53.7 523.9 54.4 46% BCF 283.5 12.1 281.4 15.4 43% Macpac 66.5 2.3 67.1 7.5 Group and (10.0) (9.9) Unallocated Total 1,443.5 115.4 1,
Slide 14: Supercheap Auto
Supercheap Auto • Total sales growth of 3.7% driven by like-for-like sales growth and 1H 2019/20 1H 2018/19 Change contribution from new stores $m Pre AASB 161 Pre AASB 16 on PCP • Like-for-like sales growth of 2.4% driven by growth in average transaction value Sales 550.7 530.8 3.7% • Auto maintena
Slide 15: Rebel
Rebel • Total sales growth of 3.6% driven by like-for-like sales growth 1H 2019/20 1H 2018/19 Change on • Like-for-like sales growth of 3.3% was supported by transaction $m Pre AASB 161 Pre AASB 16 PCP growth and increased units per sale driving higher average transaction value Sales 542.8 523.9 3.6
Slide 16: BCF
BCF • Total sales increased by 0.7% to $283.5 million 1H 2019/20 1H 2018/19 Change $m Pre AASB 161 Pre AASB 16 on PCP • Like-for-like sales decreased by 0.5% primarily due to the impact of extreme weather events in the peak trading Sales 283.5 281.4 0.7% period • BCF stores not impacted by fire/drou
Slide 17: Macpac
Macpac • Sales fell by 0.9% as a result of a 7.0% decline in like-for-like 1H 2019/20 1H 2018/19 Change on $m sales Pre AASB 161 Pre AASB 16 PCP • In Australia, like-for-like sales decreased by 9.5% as a result of the impact of summer bushfires on peak trading, with Victoria Sales 66.5 67.1 (0.9%) a
Slide 18: Group & unallocated
Group & unallocated • Group and unallocated includes: 1H 2019/20 1H 2018/19 Change on • Corporate costs not allocated to segments $m Pre AASB 161 Pre AASB 16 PCP • Commercial operations • Omni-retail development EBIT (10.0) (9.9) (0.1) • Total costs of ($10.0m) (EBIT) in line with guidance Comprisin
Slide 19: Group balance sheet
Group balance sheet Pro Forma Statutory Jun 19 • Inventory has increased by $3.2m from December 2018 and Dec 19 $m Dec 191 Pre AASB 16 reflects ongoing focus on ensuring in-stock availability in peak pre AASB 162 trading period Inventory • Supercheap Auto inventory has increased due to currency Supe
Slide 20: Group cash flow
Group cash flow • Strong operating cash flow of $239.1m (pre AASB 16) 1H 2019/20 1H 2019/20 1H 2018/19 $m Statutory Pre AASB 161 Pre AASB 16 • The overall profile of the Group’s capital expenditure Operating cash flow (pre store reflects continued investment in omni-retail capabilities 349.3 247.8 2
Slide 21: Impact of AASB 16 on balance sheet, earnings and cash flow
Impact of AASB 16 on balance sheet, earnings and cash flow Approach to AASB 16 • The Group has adopted AASB 16 from 30 June 2019 with retrospective adjustments • The adjustments arising from the new leasing rules are recognised in the opening balance sheet on 30 June 2019 • Recognition of right of u
Slide 22: Returns and capital ratios
Returns and capital ratios • Normalised EPS of 37.5 cents was 9.2% lower than pcp Pro Forma 1H 2018/19 1H 2019/20 • Basic EPS (Pre AASB 16) of 31.1 cents was 14.3% lower than pcp Pre AASB 16 Pre AASB163 • Normalised fixed charge cover ratio of 2.1 approaching target of Normalised EPS1 37.5c 41.3c 2.
Slide 23: Strategy Update
GROUP HIGHLIGHTS 2019/20 1ST HALF PERFORMACE STRATEGY UPDATE 2019/20 TRADING AND OPERATING UPDATE APPENDICES Performance Trends Segment Notes AASB 16 Impact on Financial Statements SUPER RETAIL GROUP 23
Slide 24: Our strategy
Our strategy THE THREE PRIMARY VALUE LEVERS FOCUS ON GROW BE AN ORGANIC ANNUAL EFFICIENT GROWTH & CUSTOMER OMNI- CAPITAL VALUE RETAILER DISCIPLINE 5 STRATEGIC DRIVERS GROW THE CORE LEVERAGE CLOSENESS CONNECTED OMNI- SIMPLIFY THE EXCEL IN OMNI- 4 BRANDS TO OUR CUSTOMER RETAIL SUPPLY CHAIN BUSINESS RE
Slide 25: Strategy execution
Strategy execution GROW THE CORE LEVERAGE CLOSENESS CONNECTED OMNI- SIMPLIFY THE EXCEL IN OMNI- 4 BRANDS TO OUR CUSTOMER RETAIL SUPPLY CHAIN BUSINESS RETAIL EXECUTION Current Focus Areas • All 4 core brands have • 6.4m active club members • Reduced supply chain • Organisation-first KPIs in • 22% gro
Slide 26: 2019/20 Trading and Operating Update
GROUP HIGHLIGHTS 2019/20 1ST HALF PERFORMACE STRATEGY UPDATE 2019/20 TRADING AND OPERATING UPDATE APPENDICES Performance Trends Segment Notes AASB 16 impact on financial statements SUPER RETAIL GROUP 26
Slide 27: Trading and operating update
Trading and operating update Trading update • Group like-for like sales growth H1 (weeks 1-26) H2 (weeks 27-33) Year to date (weeks 1-33) Supercheap Auto 2.4% 3.1% 2.6% Rebel 3.3% 5.8% 3.8% BCF (0.5%) (8.0%) (2.1%) Macpac (7.0%) (0.4%) (5.8%) • Supercheap Auto and Rebel have traded well in the first
Slide 28: Trading and operating update continued
Trading and operating update continued Enterprise Agreement • The Enterprise Agreement (EA) for retail and clerical team members was approved by the Fair Work Commission in February 2020 • The Group previously flagged that wage inflation resulting from the EA is expected to have an incremental EBITD
Slide 29: Appendices
GROUP HIGHLIGHTS 2019/20 1ST HALF PERFORMANCE STRATEGY UPDATE 2019/20 TRADING AND OPERATING UPDATE APPENDICES Performance Trends Segment Notes AASB 16 Impact on Financial Statements SUPER RETAIL GROUP 29
Slide 30: Performance trends
Performance trends Reported Sales ($m) Reported Total Segment EBIT ($m) 124.5 115.2 113.6 115.4 99.8 101.1 94.1 1,444 93.1 1,216 1,296 1,324 1,403 1,037 1,096 1,159 61.6 759 413 464 562 41.4 23.6 28.3 Reported EPS (c) Reported Post Tax ROC (%) 37.7 36.6 36.3 30.9 31.3 29.1 19.8 19.4 22.8 17.1 22.0 1
Slide 31: Segment note 2019/20
Segment note 2019/20 SUPER RETAIL GROUP 31
Slide 32: Segment note 2018/19
Segment note 2018/19 SUPER RETAIL GROUP 32
Slide 33: AASB 16 Leases impact on Consolidated Income Statement
AASB 16 Leases impact on Consolidated Income Statement SUPER RETAIL GROUP 33
Slide 34: AASB 16 Leases impact on Consolidated Balance Sheet (1 of 3)
AASB 16 Leases impact on Consolidated Balance Sheet (1 of 3) SPLIT TABLE IN TWO TO MAKE MORE LEGIBLE SUPER RETAIL GROUP 34
Slide 35: AASB 16 Leases impact on Consolidated Balance Sheet (2 of 3)
AASB 16 Leases impact on Consolidated Balance Sheet (2 of 3) SUPER RETAIL GROUP 35
Slide 36: AASB 16 Leases impact on Consolidated Balance Sheet (3 of 3)
AASB 16 Leases impact on Consolidated Balance Sheet (3 of 3) SUPER RETAIL GROUP 36
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