Harvey Norman Holdings Ltd · ASX:HVN
Harvey Norman — FY2016 Earnings Presentation
21 slides from Harvey Norman's earnings presentation, Aug 31, 2016
Slide 1: Results for the year ended 30 June 2016
R ENDED 30 JUNE Ib
Slide 2: Contents
Contents Key Financial Highlights ... Integrated Strategy .......... Aggregated Sales Revenue . Franchisee Sales Revenue ... The Internet of Things Review of the Income Stat Review of the Balance Sheet Review of Cash Flows ..... BsEsssoons
Slide 3: Harvey Norman - Solutions for Every Room in the Home
HARVEY NORMAN® - SOLUTIONS FOR EVERY ROOM IN THE HOME uly the one-stop destination, Harvey Norman® offers a range of solutions for every 10 Jpport you need in Study Gym tood preparation, er CLOCEIDE! business at home. Connected Health - monitor your fitness as you go. Connected Automation & Security
Slide 4: Key Financial Highlights: Profit
4 2016 2015 Incr/(Decr) EBIT $522.47m $410.97m +27.1% Profit Before Tax (PBT) $493.76m $378.10m +30.6% PBT $445.41m $369.37m +20.6% (excluding property revaluations1) PBT $526.32m $378.37m +39.1% (excluding impairment losses2) Net Profit After Tax (NPAT) $348.61m $268.10m +30.0% NPAT $314.74m $261.8
Slide 5: Main factors impacting net profit before tax
5 Main factors impacting net profit before tax: a $67.79m (+33.8%) increase in the profitability of the franchising operations segment to $268.15m due to a $63.18m (+8.9%) increase in franchise fees & a $12.19m decrease (-15.0%) in tactical support; a $39.63m increase in the net property revalua
Slide 6: Key Financial Highlights: Balance Sheet and Dividends
6 2016 2015 Incr/(Decr) Total Assets $4.43bn $4.33bn +2.4% Total Liabilities ($1.74bn) ($1.77bn) -1.5% Net Assets $2.69bn $2.56bn +5.2% Net Debt to Equity % 18.97% 19.88% -91bps Dividends Per Share 30.0c 20.0c +50.0% Special Dividend - 14.0c - EPS 31.36c 24.51c +27.9%
Slide 7: Integrated retail, franchise, property and digital strategy
7 The integrated retail, franchise, property and digital strategy is the basis of the consolidated entity’s success and the foundation for the business’ resilience across economic cycles: • Integrated strategy places Harvey Norman®, Domayne® and Joyce Mayne® branded franchisees at the forefront of H
Slide 8: Aggregated Sales Increase in Constant Local Currencies
8 Aggregated Sales Increase / (Decrease) in Constant Local Currencies – TOTAL SALES Headline Sales 1Q2016 2Q2016 3Q2016 4Q2016 YTD 2016 Increase / (Decrease) % vs. vs. vs. vs. vs. 1Q2015 2Q2015 3Q2015 4Q2015 YTD 2015 Australian Franchisees $A 5.7% 9.4% 6.9% 8.3% 7.6% New Zealand $NZ 4.8% 7.7% 16.0%
Slide 9: Franchisee sales revenue
9 Franchisee sales revenue driven by a combination of factors including: sustained growth in retail spending, continuing housing growth, positive consumer sentiment, growth in household incomes and consumption and favourable monetary policy; Harvey Norman®, Domayne® and Joyce Mayne® branded fran
Slide 10: Connected to Everything! The Internet of Things
10 CONNECTED TO EVERYTHING! Harvey Norman ® is the destination for connected devices forming a big part of the Internet of Things (“IoT”). ~ 6.4 billion connected devices in use worldwide this year may grow by more than 3x to nearly 21 billion by year 2020. IoT is all-encompassing and it’s n
Slide 11: Total Revenues
11 Total Revenues 2016 2015 Incr/(Decr) % Sales Revenue* $1,795.76m $1,617.15m +$178.61m +11.0% Gross Profit $563.83m $490.26m +$73.57m +15.0% Revenues & Other Income $1,230.48m $1,116.83m +$113.66m +10.2% • Includes the sales revenue of company-operated stores in NZ, Singapore, Malaysia, Ireland, S
Slide 12: Expenses & Profit
12 Expenses & Profit 2016 2015 Incr/(Decr) % Total Expenses ($1,304.90m) ($1,237.64m) -$67.26m -5.4% Share of JV investments $4.36m $8.66m -$4.30m -49.7% Profit Before Tax $493.76m $378.10m +$115.66m +30.6% Income Tax Expense ($142.42m) ($109.19m) -$33.24m -30.4% Non-Controlling Interests ($2.74m) (
Slide 13: Review of the Balance Sheet
13 2012 2013 2014 2015 2016 Total Assets $3.89bn $4.01bn $4.18bn $4.33bn $4.43bn Return on Total Assets % 4.43% 3.55% 5.07% 6.20% 7.87% Total Liabilities $1.63bn $1.64bn $1.69bn $1.77bn $1.74bn Total Equity $2.27bn $2.36bn $2.49bn $2.56bn $2.69bn Return on Equity %* 7.71% 6.10% 8.57% 10.57% 13.07% *
Slide 14: Operating Cash Flows
14 2016 2015 Incr/(Decr) % Operating Cash Flows $437.69m $340.45m +$97.24m +28.6% Operating cash $221.79m increase in receipts from customers due to higher sales revenue generated by company- flows by operated stores by $178.61m in FY16 vs. FY15; $97.24m $118.40m increase in net receipts from
Slide 15: Investing and Financing Cash Flows
15 2016 2015 Incr/(Decr) % Investing Cash Flows ($179.85m) ($81.80m) -$98.05m -120% Financing Cash Flows ($307.43m) ($220.60m) -$86.83m -39.4% Net Increase/(Decrease) in Cash Flows ($49.59m) $38.05m -$87.64m Cash & Cash Equivalents At Beginning of the Year $153.22m $115.17m +$38.05m Cash & Cash Equi
Slide 16: Franchising Operations Segment Revenue
16 2016 2015 Incr/(Decr) % Franchising Operations Segment Revenue $939.95m $870.92m +$69.03m +7.9% Franchising Operations Segment Result $268.15m $200.36m +$67.79m +33.8% Franchising Operations Margin % 5.03% 4.05% +98bps
Slide 17: Franchising operations segment revenue
17 Franchised Complexes 2014 2015 2016 Number of franchised 198 194 192 complexes in Australia Openings during year - +1 HN +1 HN Rebranded during year - +1 DM - Closures during year -7 HN -2 HN -2 HN -1 JM -4 JM -1 JM Number of franchisees in Australia 677 678 673 Franchising Increases in franchisi
Slide 18: Total Property Segment
18 Total Property Segment FY2016 FY2015 Incr/(Decr) % Property Segment Revenue $282.75m $236.13m +$46.62m +19.7% Net Property Revaluation Increment $48.36m $8.73m +$39.63m +454% Property Segment EBITDIA $202.76m $163.17m +$39.59m +24.3% Property Segment Result Before Tax $169.29m $135.19m +$34.10m +
Slide 19: Company-operated retail segment revenue
19 Company- $70.72m increase in NZ revenue due to new store openings and market share growth in all key operated retail categories; segment revenue $45.80m increase in Ireland & Northern Ireland revenue, with improved performance across all ↑by $187.64m categories and increased market share;
Slide 20: Integrated model is robust and dependable; outlook
20 Integrated retail, franchise, property and digital model is robust and dependable, providing stability when it needs to, yet flexible and swiftly responsive to emerging trends and opportunities in the market place. While macroeconomic conditions in the markets in which we operate may change,
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Harvey Norman Holdings — FY2016 Earnings Presentation on 6ix