Slide 1: Metcash Limited ASX cover letter: CEO Presentation
Metcash Limited ABN 32 112 073 480 4 Newington Road Silverwater NSW 2128 Australia PO Box 6226 Silverwater Business Centre NSW 1811 Australia Ph: 61 2 9741 3000 5 June 2007 Fax: 61 2 9741 3399 The Manager, Companies Australian Stock Exchange Company Announcements Office Level 4 20 Bridge Street SYDN
Slide 2: Company Results Year Ending 30 April 2007
IDI Company Results Year Ending 30 April 2007 as
Slide 3: Headlines
HEADLINES 2007 ¥ Successful integration of FAL business delivers record result: v¥ Sales up 18% to $9.7b ¥ Costs controlled (CODB down 0.34 bps) ¥ Normalised EBITA up 39% to $315m v¥ Normalised PAT up 42% to $174m v¥ Normalised EPS within guidance at 23.23cps ¥ Strong earnings and strong cashflows y
Slide 4: Metcash TSR
METCASH TSR + Under current management vs competitors and market. 2007 Note: Total Shareholder Returns (TSR) represents share price appreciation and dividend returns to shareholders. MTS TSR: 55% 3.00 Share price (rebased} np a s 1.50 a once ce As 0.00 + dan 0+ Aug 01 Apr 02 Nov 02 Jul 03. Mar 04 Oc
Slide 5: Financial Highlights - Year Ended April 2007
FINANCIAL HIGHLIGHTS — YEAR ENDED 30 APRIL 2007 Total Revenue up 18% to $9.7 billion 2007 " Wholesale Sales rose 22.7% to $9.45 billion Normalised EBITA grew 38.8% to $315 million and EBITA margin rose to 3.33% from 2.95% last year (before non-recurring items) cost a Doing Business as a percentage o
Slide 6: Wholesale Sales
WHOLESALE SALES ANNUAL WHOLESALE SALES UP 22.7% 2007 9,500 8,500 7,500 6,500 5,500. 4,500 3,500 | _ 2,500 © eg err 2006 | 2007 par os el CU Oe Millions) 5,421. | 6117 6577 6565 | 7,705 9,451 RETAIL SALES sk FINANCIAL YEAR - FULL YEAR — * BeclUbE INCREASE % 69% | 128% | 7.5% | -0.2% | 17.4% | 22.7% —
Slide 7: Market Share
MARKET SHARE NATIONAL METCASH MARKET SHARE ALL CUSTOMERS U! oF . a 10 12. oe pow . 5% IN a0te : || METCASH MARKET | SHARE UP TO 19% IN THE || QUARTER | ENDING 13 MAY 07 2002 = 2003 _— 2004 05 | ae 2007 GMAT% | 125% | 13.0% | 13.2% 1 5% 18.5% | 18.6% | FINANCIAL YEAR - -FULLYEAR UINCREASE%BPS 0.7% |
Slide 8: Full Year 2007 EBITA Up 38.8%
oo 2007 ___ FULL YEAR 2007 EBITA UP 38.8% lr EBITA AT $315M CLEARLY SHOWS IMPACT OF TARGETTED SYNERGY AND PROFIT GAINS ARISING FROM FAL . . 2002 2003 2004 ie ae a ACQUISITION lwsmillions | 1175 1527 «183.8 | (194.5 | 226.9 || CAGR 21.8%pa i ___FINANCIALYEAR-FULLYEAR SINCE 2002 “INCREASE% —«|_-28.a%
Slide 9: EBITA Margin
EBITA MARGIN 3.20% 2.80% | FULL YEAR 3.60% peg 340% 1 300% | 2.60% 7 2.40% | 220% | i 2.00% = — 2002 “~ 2004 AFRS 2005 2007 EBITAMARGIN UP 39BPS__ 2006 _AIFRS” 2007 | AIFRS (@MARGINY _ | 217% 2.50% | 280% | 2.96% 2.95% 3.33% FINANCIAL YEAR -FULL YEAR _ INCREASE % BPS __ 0.36% 0.33% 0.30% _ 0.17% - 0
Slide 10: Operating Cashflow After Tax
OPERATING CASHFLOW AFTER TAX FULL YEAR 2007 PATBDA UP STRONGLY : CASHFLOW- $M 2003-2004 PERIOD- -END CASHFLOW AGAIN SUBJECT TO TIMING _ CASHFLOW 135. 113.4 130.7 MPATBDA | 92.66 121.8. 143.5 _ FINANCIAL YEAR - FULL YEAR NOTES: 1. PATBDA=PROFIT 2. REFER AFTER TAX CASHFLOW 3. FYOS&FY06 4. FYO6 PATBDA
Slide 11: CODB as % of GP
CODB AS ‘% OF GP | 76.00% 68.00% ios + o- o = ns) | ° oO 74.00% | 72.00% | 62.00% _ FULL YEAR 2007 CODB DOWN 34 BPS 70.00% 66.00% | 64.00% | | 2002 2003 2004 2005 _AIFRS | 2006 | _AIFRS 2007 AIFRS | 70.98% 68.66% 68.45% 67.20% 66.86% |@ CODB/GP% [5.22% __ FINANCIAL YEAR - FULL YEAR _ VARIANCE %BPS |
Slide 12: PBT as % of Sales
PBT AS % OF SALES. __ FULL YEAR 2007 PBT AS % OF SALES UP 30BPS__ 2007 3.00% 2.15% 2.50% a We 2.25% oO Son: NOTES: = Ss % 4. STATED EXCLUSIVE OF a. | ae | ) ; Doe L CULS! CUPS FINANCING a 4.75% - , Deena! Mea ae A y ) | COSTS IN FY06 AND ae . a a Co >) CO RESTRUCTURE COSTS IN 1.50% oo a) Lo Lys Ae p
Slide 13: Full Year 2007 Normalised PAT Up 41.6%
2007 FULL YEAR 2007 NORMALISED PAT UP 41.6% NOTES: 1. FY07 NORMALISED PAT IS STATED BEFORE RESTRUCTURE COSTS, NET NON- RECURRING INCOME & ACTION LOSS 2. FY06 NORMALISED PAT IS STATED BEFORE CULSi CUPS FINANCING COSTS s % i sh i . | 3. FY06 NORMALISED 2003 2004 2005 2006 : : IMPACTED BY - | AIFRS | A
Slide 14: Earnings Per Share
aos 25.00 = 20.00 45.00 10.00 5.00 _ FULL YEAR 2007 REPORTED EPS UP 62% ADJUSTED EPS UP 8% 2003-2004 2005 | AIERS 2006 __ AIFRS M@ Reported EPS 13-10 | 16.10 29.65 13.67 16.06 413.10 18.57 21.55 | || @™ Normalised EPS __ FINANCIAL YEAR - FULL YEAR Normalised EPS fails within euidan range of 2. “hNAR
Slide 15: DPS (Cents)
Dps(Cents) is FULL YEAR 2007 DPS UP 5.5 CENTS _ 2003 2004 7008 AFRS 2006. AIFRS | 2007 AIFRS 5.0 86 110 95 115 170. @ CENTS (full year) _ : FINANCIAL YEAR - FULL YEAR _ INCREASE% __ 233% 72% 28% | 14% 21% 48% NOTES: TIMING ISSUES 1. FY06 IMPACTED BY 2. METCASH DIVIDEND POLICY ADDRESSED ASSOCIATED WI
Slide 16: Dividend & Capital Management
DIVIDEND & CAPITAL MANAGEMENT = The Board’s intention is to return earnings to shareholders white? retaining adequate funds within the business to invest in future growth opportunities = In the current period the proposed dividend of 17 cents per share represents approximately 77% of Reported EPS or
Slide 17: Group Summary
GROUP SUMMARY AN EXCELLENT RESULT IN A PERIOD OF SIGNIFICANT CHANGE SHOWING 2007 GROWTH IN BOTH THE LEGACY BUSINESS AND POST FAL ENLARGED GROUP . : VARIANCE | _FYO6 FYO7 y% TOTAL SALES - sm - —— TOTAL EBITA - eM FF % # =e EBITA TO SALES —.r—OS 0.49%pts ee —“( i A Notes CODB stated before restructure
Slide 18: IGA>D - Financials
IGA>D - FINANCIALS IGA>D CONTINUES ITS IMPRESIVE PERFORMANCE AS THE 2007 POWERHOUSE OF THE GROUP WITH BOTH STRONG UNDERLYING GROWTH AND SIGNIFICANT GAINS FROM THE FAL ACQUISITION FULLYEAR —sVVARIANCE fe | AK % TOTAL IGAD WHOLESALE SALES-$M ee 27.6% EBITA TO SALES -% 008 A) OM Fara _. CS ws ff Notes
Slide 19: IGA>D - Operating Performance
IGA>D _ — OPERATING PERFORMANCE « Strong underlying performance in ‘legacy’ business: Legacy IGA « Base Business 7.8% 8.7% © " WA Business _nia_ 17.2% " =Total 7.8% 10.3% « Less: New Stores (2.0)% " =L4L Growth 5.8% * Total IGA>D market share per AC Nielsen up to 19% for the quarter ended 13 May 200
Slide 20: IGA>D - Operating Performance
IGA>D — OPERATING PERFORMANCE ___ = IGA Store development: = Supply Chain " Voice Pick implemented in dry grocery facilities in WA and perishable facilities in NSW & SA " Crestmead mega DC in Qld completed on-time & on-budget - transfer from Loganlea planned for July after commissioning completed »
Slide 21: IGA>D Fresh
IGA>D FRESH “2007 FY07 + Average weekly turnover up 26% to $2.1m * Sales building steadily: Y Total turnover (IGA>F only) of $100m for FY07 v Fresh Sales ex-Perishable DC’s $159.8m Y Sales direct to store $253.5m ¥ Charge through Fresh Sales $127.3m * Serving over 240 stores nationally by the end of
Slide 22: FAL Integration - Complete
FAL INTEGRATION - COMPLETE AREA OF INTEGRATION STATUS/ STATUS/ 2007 SYNERGY GAINS | SYNERGY GAINS 07 08 Western Australia + Profits from WA + Ongoing * IGA>D WA operations fully established operations realised + Market share at 31.2% for Qtr ending 13/5/07 + Voice pick implemented - annualised produ
Slide 23: FAL Integration - Profit & Synergies
FAL INTEGRATION - PROFIT & SYNERGIES oe 2007 a . su FULL YEAR GAINS EXPECTED Se : . . | "80-90" METCASH’S i gg. |__| SUCCESSFUL VOLUME GAINS (IGA>D + CCC) wg )~=—|: INTEGRATION OF | - INCLUDES FRESH aS Se Se eee |- INCLUDES PURE VOLUME GAINS —__ — _ THE FAL - INCLUDES BUYING SYNERGIES _ Lo | OPERATI
Slide 24: ALM - Financials
ALM - FINANCIALS _ 2007 FULLYEAR =—sVARIANCE— Fe | OR? a : Me 6 2 EBITATOSALES-% = | 2 18 1 eS rrr—r—,C WLti‘“‘“ ‘CROUUOC;CSC oe . _. Additional IBA marketing opex noted in 1H 07 likley to be ongoing for 1-2 years w hilst leverage brand expansion STRONG SALES PERFORMANCE GIVEN LOSS OF HEDLEY/ COLES
Slide 25: ALM - Operating Performance
ALM - OPERATING PERFORMANCE ___ 2007 " Sales Growth positive in light of tough market conditions and loss of Hedleys/ Coles business = EBITA of $28.4 million down $2.3 million on last year reflects this highly competitive environment " Range of strategies undertaken to stabilise trading performance
Slide 26: ALM - Operating Performance
ALM - OPERATING PERFORMANCE ___ 2007 = Two prong growth strategy continues: 1. Liquor Alliance — A strategic long term supply partnership comprising 6 external banners and representing 653 pubs joined together to form a national marketing group. Pubs to be rebranded under new “Thirsty Camel” banner.
Slide 27: ALM - IBA Store Growth
ALM | - IBA STORE GROWTH (CELLARBRATIONS == = 9-223 eh eS ' LIQUORWISE .—rt—“‘Ct!OUCUCOC~C~C—C*S | Transfer to Bottle 0 | NA Peomco: dT rrti“‘(‘(‘OCO#CC# NEIGHBOURHOOD) i‘ “kL Ce toric) | LOCALLIQUORWISE | 196 | 159 |TransfertoBottleO| N/A | PROMOTIONAL _ GROUPS” — ,rr——“(‘CCCOti err Ce rt—“ “‘RCO*O
Slide 28: Campbells Wholesale - Financials
CAMPBELLS WHOLESALE - FINANCIALS 2007 _ FULLYEAR ~=—s“VARIANCE ~~ fe | we | 48 Se rrrrr—r——C MC EBITATOSALES -% + =—«—s_— ||_—=—=s=«*A BG =s«2.04%| «(0.19% pts SAH ll CK OS CW HAS PRODUCED A RECORD YEAR, CAPITALISING ON SYNERGIES FROM THE FAL ACQUISITION AND ITS SUCCESSFUL STRATEGY OF RESTRUCTURING
Slide 29: Campbells Wholesale - Operating Performance
CAMPBELLS WHOLESALE _ - OPERATING PERFORMANCE | L Cc cc came: Cash & Tis 24 Metro cac (with 3 in WA) Sales +18% on last year oo 62% . > Tobacco 28% © tohat |Liquor 10% | : : E CWD / (fam bel 7 CSD 4 Stockless DCs | 4 Specialist Confectionery | DCs Voice Pick | Putto Light _ Sales +50. 8% on last yea
Slide 30: Campbells Wholesale - Operating Performance
MPBELLS WHOLESALE - OPERATING PERFORMANCE * Sales up 23.5% on last year to $1.4b: - Grocery categories up 40% and represent over 55% of total sales - Confectionery up 14% or +$27m ~ EBITA up 36.1% to $28.9 million or 2.04% of sales — Product mix change: grocery and confectionery sales now over 55% o
Slide 31: Supply Chain Initiatives
SUPPLY CHAIN INITIATIVES * Metcash has implemented significant improvements to its supply chain * Initiatives have been designed to: * Improve inventory management; ¢« Shorten order-to- delivery cycle times; * Improve productivity; and « Reduce the cost of doing business. IGA?D DISTRIBUTION (EAOniG
Slide 32: Metcash DC & Supply Chain
METCASH DC & X Dock Centre Consotidation Centre IGA’D rarer is Phase 2 in Metcash’s supply chain transform- ation includes initiatives to optimise the warehouse interface with supplier and customer Campbells Adéy AUSTRALIAN LIQUOR MARKETERS) ETE
Slide 33: Development - Crestmead Mega DC
Development — CRESTMEAD ME Ane ees mi hi ig shh su dalgnnnne nye IGA2D Campbells A AUSTRALIAN LIQUOK MARKETERS;
Slide 34: Balance Sheet - Extract
BALANCE SHEET - EXTRACT 2007 FYApros $million [iventoy tg | Trade Payables eon Netinvestmentin inventory (3788) | Receivables ee eee | Net Assets heldforresale _ a | Other Creditors : 2 (3839) Working Capital 2 | Fixed Assets and investments 1779 o | Intangibles doe TotalFunds Employed = : _ 1,561.8
Slide 35: Cashflow - Extract
CASHFLOW - EXTRACT FORTHE YEARENDED 30 APRIL 200700 — —____ 7 2007) ee oo : oe FY Apr 07° a FY Apr 06 : : a goon § $000 s000 ~~ $000 ETA Bb46e1 eran : NetinterestPaid a rrrr—“(—i—iCiCS : (87.240) Taxation Paid _ a ae (61,927) sea : a _ - : — 24641 462,708 Working capital Movement __ — : eres . 79,96
Slide 36: Plans
— PLANS LE >. ree LEZADING IMDEPEMOENTS FORWARD [Campnelis WHOLESALE Aa AUSTRALIAN LIQUOR MARKETERS PPTy. LTD. >» MORENEWSTORES _ > PENETRATION OF MODERN : P&C MARKET _» GROWING RETAIL _ POWER » HIGH REFURBISHMENT PLAN | » GROWTH IN CORE ccc & CW BUSINESS > LEVERAGE UNIQUE | MARKETING POSITION | > I
Slide 37: Earnings Guidance
EARNINGS GUIDANCE 2007 Sales continue to perform strongly in May Structural trading environment uncertain in context of Coles sale * In absence of any major changes emanating from Coles ‘shake-up’ Management anticipate: * Sales growth of 6-7% in FY08 * EBITA growth to be leveraged in the high single
Slide 38: Appendix
APPENDIX 1. Directory of Terms 2. Trading Overview 3. Dividend Policy & Capital Management IGA>D Camphelis h a AUSTRALIAN LIQUOR MARKETERS # 21%, ETE,
Slide 39: Dictionary of Terms
DICTIONARY OF TERMS * Non-recurring items — comprise 1H Action loss plus net non-recurring income « Restructure costs — relate to costs booked in the first half re FAL integration and are non-recurring ($9.8m pre tax; $7m post tax) * Normalised — adjusts for non-recurring items « Legacy — Core busin
Slide 40: Overview - Year Ended April 2007
OVERVIEW — YEAR ENDED 30 APRIL 2007 « Another excellent result capitalising on the strong first half result posted. 2007 « Group turnover up 18% to $9.7b and profit after tax up 105.5% to $166.8m. « Normalised profit after tax (before restructure costs) was up 43.5% to $174.4m. «This has produced a
Slide 41: Overview - Year Ended April 2007
OVERVIEW — YEAR ENDED 30 APRIL 2007 « Metcash’s specialized convenience distribution division, Campbells 2997 Wholesale had an excellent year benefiting from the addition of the WA FAL operations, improved negotiating ability arising from its new national footprint, increased modern petrol and conve
Slide 42: Dividend Policy & Capital Management
DIVIDEND POLICY & CAPITAL MANAGEMENT 2007 = The Board’s intention is to return earnings to shareholders whilst retaining adequate funds within the business to invest in future growth opportunities =» In the past the company’s dividend payout ratio has ranged between approximately 51- 66% of EPS on a
Slide 43: Dividend Policy & Capital Management
DIVIDEND POLICY & CAPITAL MANAGEMENT + Consistent with the Board’s determination of the company’s Dividend Policy is its approach to Capital Management 2007 + In the past, Metcash has used its funds to pay dividends, finance growth, provide trading opportunities and strengthen its balance sheet - Th
Slide 44: Champion of the Independent - The Third Force