Myer Holdings Limited · ASX:MYR
Myer — FY2020 Earnings Presentation
34 slides from Myer's earnings presentation, Sep 10, 2020
Slide 1: Full Year 2020 Results
10 September 2020 FULL YEAR 2020 RESULTS RECORD GROUP ONLINE SALES OF $422.5 MILLION; 17% OF TOTAL SALES DISCIPLINED MANAGEMENT OF COSTS AND PRESERVATION OF CASH EBITDA1 down 41.6% to $93.5 million Implementation costs and individually significant items (post-tax) of $159.0 million Statutory net los
Slide 2: CEO commentary on COVID-19 response and online growth
Myer’s Chief Executive Officer and Managing Director, John King, said: “When the COVID-19 pandemic first hit, as a Board and Executive team, we acted to prioritise the health and wellbeing of our customers, team members, and the broader communities in which we operate.” The decision taken in March 2
Slide 3: Amazon Hub, extended finance facilities and Customer First plan
Myer recently announced the introduction of Amazon Hub – a network of Amazon parcel pickup points that were yesterday introduced at well-established Myer Hub counters in 21 stores. This partnership enables Amazon customers to access Myer’s extensive range of brands and services in a convenient locat
Slide 4: Footnotes and investor briefing
Footnotes 1 Excluding implementation costs and individually significant items and pre-AASB 16 2 Revenue from sale of goods excluding concession sales and sales revenue deferred under customer loyalty program was $2,047.9 million (FY19: $2,345.1 million) 3 In addition to the historical definition of
Slide 5: Myer Full Year 2020 Results to 25 July 2020
10 SEPTEMBER 2020 MYER FULL YEAR 2020 RESULTS TO 25 JULY 2020 JOHN KING NIGEL CHADWICK CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Slide 6: Important Information
Important Information The information in this document is general only and does not purport to be complete. It should be read in conjunction with Myer’s other periodic and continuous disclosure announcements. Investors or potential investors should not rely on the information provided as advice for
Slide 7: Introduction
Introduction FY20 Results Customer First Plan Conclusion
Slide 8: FY20 Results Summary
FY20 Results Summary • Group online sales* up 61.1% to $422.5 million; up 98.8% in 2H20 Stores closed April/May • Total sales down 15.8% to $2,519.4 million, reflecting solid 1H20 result and a severely disrupted 2H20; Record online sales comparable sales down 3.3%** • Operating Gross Profit (OGP)***
Slide 9: Highlights
Structured and decisive response to COVID Refocus Reboot Address known risks and capture opportunities Hibernate Adopt viable model and remain agile Protect employees, customers, preserve cash Accelerate, re-sequence or expand Re-opened stores progressively by 30th May the Customer First Plan All st
Slide 10: COVID-19: Impact and the recovery
COVID-19: Impact and the recovery • Diverse mix of channels, store locations and categories has buffered some of the impact to discretionary retail • Recovery impacted by Stage 3 restrictions implemented on July 1st (week 49); subsequently updated to Stage 4 lockdown in Melbourne Metropolitan areas
Slide 11: Gained share in the online boom
Gained share in the online boom • Myer Online* sales now $404.9 million in FY20, total Group online** sales $422.5 million (including sass & bide, Marcs and David Lawrence) • Online channel grew faster than market*** in 2H20: key categories Beauty up 218%, Homewares up 177% • More importantly Online
Slide 12: FY20 Results
Introduction FY20 Results Champion Customer First Plan Conclusion
Slide 13: Income statement (Pre-AASB 16)
Income statement (Pre-AASB 16) $ MILLIONS FY20 FY19 CHANGE • Sales reflects the impact of COVID-19, with Bricks and Mortar stores closed for Total Sales 2,519.4 2,991.8 (15.8%) up to 8 weeks. Post reopening CBD stores remain challenged by low foot traffic • Comparable sales were down 3.3% Operating
Slide 14: FY20 Results Summary
FY20 Results Summary FY20 FY20 FY19 CHANGE $ MILLIONS (Statut or y ) (pre- aasb 16) (pre- aasb 16) (pre- aasb 16) Total Sales* 2,519.4 2,519.4 2,991.8 (15.8%) EBITDA** 305.3 93.5 160.1 (41.6%) EBIT** 78.5 (6.1) 58.5 nm*** Net Profit/(Loss) after Tax** (13.4) (11.3) 33.2 nm*** Implementation Costs an
Slide 15: Operating gross profit margin (Pre-AASB 16)
Operating gross profit margin (Pre-AASB 16) Operating Gross Profit ($m) • 85bps decrease in OGP margin reflects the headwinds experienced in 2H20 associated with COVID-19 (1H20 margin increased by 62bps) 1,162 • 2H20 margin decreased by 329bps, impacted by: (192) • Higher proportion of clearance sal
Slide 16: Cost reductions achieved (Pre-AASB 16)
Cost reductions achieved (Pre-AASB 16) Cost of Doing Business ($m) Myer Group Cost Structure ($m) (6) (14) 1,002 1,002 9 864 (73) Operating Wages (52) Operating Other Costs (29) 864 Support Office CODB FY19 Inflation Investment Space Rent & Store Cost Net SSO Cost CODB FY20 FY19 FY20 in Online Reduc
Slide 17: Operating Cash Flow (Pre-AASB 16)
Operating Cash Flow (Pre-AASB 16) $ MILLIONS FY20 FY19 • Operating cash flow (before interest & tax) decreased by $31 million to $107 EBITDA* 93.5 160.1 million; conversion up Less Implementation Costs and ISIs (165.8) (12.5) • Working capital improvement predominantly due to lower inventory, but al
Slide 18: Balance Sheet – Net Cash of $7.9 million
Balance Sheet – Net Cash of $7.9 million FY20 aasb 16 FY20 FY19 $ MILLIONS (pre- (pre- • Inventory down 26%, reflecting lower purchases in response to lower (statutory) impact aasb16) aasb16) demand during 2H20, as well as supplier/option rationalisation Inventory 256.0 - 256.0 346.9 • Creditors/Lia
Slide 19: Refinancing Key Terms
Refinancing Key Terms NEW OLD • Completed with current syndicate which is fully 31 August 2022 28 February 2021 Term supportive (18 month extension) (2.5yrs) • Meets expected requirements and provides Facility Amount $340m $400m liquidity through seasonal cycle Core Term Loan $80m (amortising by $10
Slide 20: In Summary
In Summary • Business well positioned leading into COVID-19 • Minimised cash burn during shut-down periods and positioned the business for recovery; albeit with a c$250 million impact on sales • Online channel the standout • Further strengthened balance sheet; increase in net cash $46.6m; 26% reduct
Slide 21: Customer First Plan
Introduction FY20 Results Customer First Plan Conclusion
Slide 22: Customer First Plan: accelerated, re-sequenced and expanded
Customer First Plan: accelerated, re-sequenced and expanded • The Customer First Plan remains ‘fit for purpose’ but COVID-19 has escalated the change required, and our response reflects this • We are adjusting Customer First Plan initiatives by accelerating, re-sequencing or expanding in response to
Slide 23: Accelerate online & F2C
Accelerate online & F2C Key online investments brought forward Trends we have observed Deliverable Highlights • The Myer brand is trusted online and we have won share in core categories Online Experience Uplift • COVID-19 has catalysed a step change in e-Commerce growth Simpler online check out and
Slide 24: Accelerate online & F2C
Accelerate online & F2C Building on momentum gained online as a result of investments made pre COVID-19 Key progress highlights Myer Online* sales vs Market Indicators Myer Online* sales growth by category for 2H20 % growth vs LY % sales ($) vs LY (FY20) 105.7% 218% NAB Online Retail Sales Index** 1
Slide 25: Refocus Merchandise
Refocus Merchandise Focus on increasing agility to meet changing consumer demand, as trading conditions remain challenging Trends we have observed Home & Women’s offer • Near-term sales environment to remain difficult as a result of the ongoing health and economic crises linked to COVID-19 • Change
Slide 26: Re-engage consumers & adapt in-store experience
Re-engage consumers & adapt in-store experience First priority remains the safety of our people and customers, particularly during peak trading periods Trends we have observed Customer Service Satisfaction* • Creating a safe place for customers and employees is paramount – this has led to unpreceden
Slide 27: Reduce costs – property & overheads
Reduce costs – property & overheads Continue to proactively realign our cost base to manage profitability and increase flexibility Trends we have observed Department Stores - key progress highlights • Store re-openings have been achieved profitably, under current arrangements Lease expiry profile* S
Slide 28: Conclusion
Introduction FY20 Results Aura by Tracie Ellis Customer First Plan Conclusion
Slide 29: Balanced approach in response to macro environment, refocused Customer First Plan
Balanced approach in response to macro environment, refocused Customer First Plan • Health and wellbeing of customer and team members remains our priority • Demonstrated prudent fiscal management, acting swiftly to reduce costs across all areas of the business and preserve cash • Strengths vs weakne
Slide 30: Myer Full Year 2020 Results to 25 July 2020
10 SEPTEMBER 2020 MYER FULL YEAR 2020 RESULTS TO 25 JULY 2020 JOHN KING NIGEL CHADWICK CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Slide 31: Appendix 1: NPAT Reconciliation with statutory accounts
Appendix 1: NPAT Reconciliation with statutory accounts $ MILLIONS ebit interest tax npat Statutory reported result (142.9) (98.2) 68.7 (172.4) Add back: Implementation costs and individually significant items Restructuring and redundancy costs 11.9 - (3.6) 8.3 Myer one loyalty program change 6.9 -
Slide 32: Appendix 2: Implementation Costs and Individually Significant Items
Appendix 2: Implementation Costs and Individually Significant Items $ MILLIONS Pre Tax Post Tax Restructuring and redundancy costs 11.9 8.3 Myer one loyalty program change 6.9 4.8 Clearance floor closure and brand exit costs and related asset impairments 18.5 13.1 Impairment of brand names 131.4 95.
Slide 33: Appendix 3: Income statement – AASB 16 Impact
Appendix 3: Income statement – AASB 16 Impact $ MILLIONS FY20 aasb 16 FY20 FY19 CHANGE (statutory) impact (pre-aasb16) (pre-aasb16) (pre-aasb16) Total Sales* 2,519.4 - 2,519.4 2,991.8 (15.8%) Operating Gross Profit 958.2 (0.9) 957.3 1,162.4 (17.6%) Cost of Doing Business** (652.9) (211.0) (863.8) (1
Slide 34: Appendix 4: Operating cash flow – AASB 16 Impact
Appendix 4: Operating cash flow – AASB 16 Impact $ MILLIONS FY20 aasb 16 FY20 FY19 (statutory) impact (pre-aasb16) (pre-aasb16) EBITDA* 305.3 (211.8) 93.5 160.1 Less Implementation Costs and ISIs (221.4) 55.6 (165.8) (12.5) Add Non-Cash Asset Impairments 185.2 (53.0) 132.2 3.4 Working capital moveme