Myer Holdings Limited · ASX:MYR
Myer — FY2012 Earnings Presentation
34 slides from Myer's earnings presentation, Sep 13, 2012
Slide 1: Myer reports a solid result in a difficult market
ASX & Media Release Thursday 13 September 2012 Myer Full Year Results ending 28 July 2012 Myer reports a solid result in a difficult market Full year sales down 1.3 percent to $3,119 million Q4 comparable sales up 0.3 percent Operating gross profit up 1.3 percent to $1,288 million Net profit after t
Slide 2: CEO commentary on FY2012 result
Myer Chief Executive Officer, Bernie Brookes, said the business had delivered a solid result in a challenging retail environment with subdued consumer confidence, finishing the year with three months of positive comparable store sales growth. “The highlight of this year’s result is the strong gross
Slide 3: Costs, one-offs and strong balance sheet
As a result of the combined effort across all stores, we successfully achieved our target of reducing shrinkage to less than one percent of sales. This result represents global best practice for department stores. Our sourcing offices have exceeded our expectations in their first year of operation,
Slide 4: Service and efficiency initiatives
Service initiatives • Targeted and measured investment in additional customer facing hours in high service categories during high service times continued. • National rollout of profit-based commission scheme to Electrical and Furniture team members, additional staffing in fitting rooms and an improv
Slide 5: Merchandise offer and Myer Exclusive Brands
Cosmetica, Kit, Benefit, Politix, Ziggy, Review, Heritage, Jane Lamerton Home, Apple, Lego, and KitchenAid. • There was continued strong sales and profit growth from sass & bide supported by the successful integration of the brand into 18 of our stores. The recent extension of sass & bide as a Myer
Slide 6: Loyalty program and omni-channel offer
• The Myer Visa card, rated five-stars by CANSTAR continues to grow and we have a number of initiatives in development to further strengthen our offers in relation to financial and corporate services. “I have no doubt that our MYER one loyalty program represents a key competitive advantage as we bui
Slide 7: Optimise our store network
5. OPTIMISE OUR STORE NETWORK We continue to review all new and existing stores, particularly in the context of lease renewal discussions. Our focus is maximising returns per square metre by improving productivity including improved store layouts for new stores, better efficiency of floor space thro
Slide 8: Ends; contact details and forward-looking statements
-ends- Note: Q1 and Q3 sales will continue to be reported to the market. For further information please contact: Investors: Davina Gunn, Myer Investor Relations Manager, +61 (0) 400 896 809 Media: Jo Lynch, General Manager Corporate Affairs, +61 (0) 438 101 793 All numbers are unaudited. This releas
Slide 9: Profit & Loss Statement for the 52 weeks to 28 July 2012
Table 1 – Profit & Loss Statement for the 52 weeks to 28 July 2012 FY 2012 FY 2011 Change vs. LY Actual Actual $m $m Total Sales Value 3,119.1 3,158.8 (1.3%) Concessions 467.2 451.9 +3.4% Operating Gross Profit 1,288.4 1,271.6 1.3% Operating Gross Profit margin 41.31% 40.26% +105bps Cash Cost of Doi
Slide 10: Balance Sheet, Other Statistics, Shares and Dividends
Table 2: Balance Sheet as at 28 July 2012 July 2012 July 2011 Actual Actual $m $m Inventory 386 381 Other Assets 43 77 Less Creditors (397) (412) Less Other Liabilities (222) (281) Net Trading Investment (190) (235) Property 27 27 Fixed Assets 488 508 Tangible Funds Employed 325 300 Intangibles 936
Slide 11: FY2012 results
MYER Full Year Results 2012 Full Year Results 13 September 2012 Bernie Brookes CEO and Managing Director Mark Ashby CFO FY2012 results • Overview • Financial update • Delivering our five point plan • Outlook 2 13 September 2012 1
Slide 12: A solid result in FY2012
MYER Full Year Results 2012 A solid result in FY2012 • FY sales down 1.3% to $3,119 million • Q4 comparable Q p store sales upp 0.3% • Operating gross profit margin +105 bps to 41.3% • EBITDA $311.8 million*, EBITDA margin 10.0% • EBIT $230.0 million*, EBIT margin 7.4% • $139 3 million*, FY -14 NPAT
Slide 13: Financial summary
MYER Full Year Results 2012 FY2012 results Overview Financial update Delivering our plan Outlook 5 Financial summary FY2012 vs.FY2011 Improved sales from Q3 of -0.9%, to Sales , $3,119m -1.3% Q4 of -0.3%; 0 3%; Q4 comparable sales +0.3% +0 3% Strong operating gross profit (OGP) result. Operating OGP
Slide 14: Financial summary; FY2012 sales performance
MYER Full Year Results 2012 Financial summary FY2012 vs. FY2011 EBITDA $311.8m* -7.7% EBITDA margin 10.0% -70bps Increase in depreciation resulting from Depreciation $81.8m +3.6% continued capital investment EBIT $230.0m* -11.2% EBIT margin 7.37% -83bps 83bps Improving NPAT trend in 2H vs.1H Decreas
Slide 15: Improvement in Operating Gross Profit; cash cost of doing business
MYER Full Year Results 2012 Improvement in Operating Gross Profit % • Myer Exclusive Brand sales grew by $31 million to 19% of sales mix • Continued success of markdown program offsetting price harmonisation • Further reduced shrinkage • Category rationalisation, space utilisation • Improved sourcin
Slide 16: A solid EBIT result; FY2012 one-off items
MYER Full Year Results 2012 A solid EBIT result $m % EBIT EBIT Margin 400 8.25 8.20 9 350 7.20 7 37 7.37 8 300 6.40 7 5.47 6 250 5 200 4 150 2.30 271 259 3 100 213 236 230 165 2 50 1 73 0 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FINANCIAL REVIEW 11 FINANCIAL UPDATE FY2012 one-off items $m EBIT NPAT Norm
Slide 17: Improved second half performance; strong stable balance sheet
MYER Full Year Results 2012 Improved second half performance % % $m 1H 2012 1H 2011 2H 2012 2H 2011 change change Sales 1,704.0 1,733.1 (1.7) 1,415.1 1,425.7 (0.7) NPAT* 87 3 87.3 108 9 108.9 (19 8) (19.8) 52 0 52.0 53 8 53.8 (3 3) (3.3) “A year of two very different halves” * Excluding impact of on
Slide 18: Disciplined cash flow, working capital management; capital invested
MYER Full Year Results 2012 Disciplined cash flow, working capital management $(m) FY12 FY11 Operating cash flow 269.5 284.0 Cash conversion 86.4% 84.0% Tax 57 4 57.4 18 8 18.8 Interest 30.7 36.0 Net cash capex paid (post landlord contribution) 39.5 138.0 Acquisitions and other 8.4 24.8 Cash flow be
Slide 19: Key financial highlights in FY2012
MYER Full Year Results 2012 Key financial highlights in FY2012 • Sales growth from core categories • Further growth in Myer Exclusive Brand sales • Strong operating gross profit result offsetting continued cost pressures • Investment in customer service, omni-channel • Disciplined inventory manageme
Slide 20: Progress on delivering our plan
MYER Full Year Results 2012 Progress on delivering our plan 1. Improve customer service and efficiency 2. Enhance our merchandise offer 3. Strengthen our loyalty program 4. Build a leading omni-channel offer 5. Optimise our store network “Investing to deliver shareholder returns” 19 DELIVERING OUR P
Slide 21: Efficiency initiatives; enhanced merchandise offer
MYER Full Year Results 2012 521 1. Improve customer service and efficiency Efficiency initiatives • Supply chain – Improved ‘floor ready’ standards for more efficient replenishment – Out-of-stock levels significantly reduced • Infrastructure – POS clustering and consolidation in 25 stores, improved
Slide 22: Merchandise acquisition criteria; Exclusive Brand growth
MYER Full Year Results 2012 2. Merchandise – acquisition criteria • Unique brand, capitalising on established infrastructure and processes • Complements Myer’s brand hierarchy, limited cannibalisation, potential for category growth • Anticipated ROFE in excess of twice WACC 23 DELIVERING OUR PLAN 2.
Slide 23: Delivering our plan
MYER Full Year Results 2012 25 DELIVERING OUR PLAN 26 DELIVERING OUR PLAN 13 September 2012 13
Slide 24: Integrated sourcing; MYER one loyalty loop
MYER Full Year Results 2012 2. Merchandise - integrated sourcing • Sourcing offices exceeding expectations • Supporting growth in Myer Exclusive Brands • Improvements in margin, quality, and lead time, all above expectations • Expanding into new categories • Broadening supply sources “Improving spee
Slide 25: Personalised loyalty communications; strengthen loyalty program
MYER Full Year Results 2012 3. Personalised loyalty communications Personal information including: • Name Personalised messages: • Points balance • You’re Y ’ nearly l th there gift ift card d • Tier • Tier increase/decrease • Membership • Season message • Birthday message • E-commerce customer mess
Slide 26: Build a leading omni-channel offer
MYER Full Year Results 2012 4. Build a leading omni-channel offer • Over 14 million unique visits last year • Over 30,000 skus online • Sales and key customer metrics all improved • Myer brand, depth of range and sourcing, store network, MYER one, all competitive advantages • Integrated marketing ac
Slide 27: Omni-channel roadmap continues to evolve
MYER Full Year Results 2012 4. Our omni-channel offer continues to evolve 33 DELIVERING OUR PLAN 4. Our omni-channel roadmap continues to evolve Introduced In development The future • Transactional website • Customer order management • In store multi-channel experience • Core infrastructure • Social
Slide 28: Optimise our store network; new store at Fountain Gate
MYER Full Year Results 2012 5. Optimise our store network • Extensive store network supports omni-channel • Further ongoing lease renegotiations • Timelines for new stores impacted by landlords • Improved operating gross profit per square metre • Anticipate maintaining current total floor space • Co
Slide 29: New store at Townsville; optimise store network
MYER Full Year Results 2012 5. New store at Townsville • Only full-line department store in region • Follows success of Mackay • Current catchment 174,000, with above average income • Strong population growth 12 000 2, two • 12,000m t levels l l • Opening October 2012 37 DELIVERING OUR PLAN 5. Optim
Slide 30: Competitive advantages
MYER Full Year Results 2012 Competitive advantages • Increased customer service investment • Established vertically-integrated vertically integrated exclusive brand model supported by sourcing offices • Brand acquisitions and increasing exclusivity • Unique and valuable loyalty program • Strength of
Slide 31: Outlook
MYER Full Year Results 2012 Outlook • Five-point strategic plan provides clear direction • Anticipate further improved gross profit margin to offset known cost headwinds • Tough retail trading environment and subdued consumer sentiment expected to continue • Myer does not intend to provide sales or
Slide 32: Brand hierarchy example; historical sales including concessions
MYER Full Year Results 2012 Brand Hierarchy example MEB National Designers International Blaq Blazer Trent Nathan Hugo Boss Blazer $200.00 Blazer $ 269.95 Blazer $299.95 Blazer $699.00 Polo $59.95 Shirt $89.95 Knit $99.95 Shirt $250.00 Chino $89.95 Pant $99.95 Chino $109.95 Trouser $299.00 Total: $3
Slide 33: Indicative new stores schedule
MYER Full Year Results 2012 Indicative new stores schedule* Centre Estimated Size Metro Growth Regional Store State Year Landlord MAT** catchment (GLA sqm) infill corridor city $mill population Townsville1 QLD FY2013 12,000 Stockland 230 174,000 9 Fountain Gate1 VIC FY2013 12,000 Westfield 654 180,0
Slide 34: Disclaimer
MYER Full Year Results 2012 Disclaimer All numbers are unaudited. This release may contain “forward-looking statements”. Forward-looking statements can generally be id ifi d by identified b the h use off words d suchh as “may”, “ ” “will”, “ ill” “expect”, “ ” “intend”, “i d” “plan”, “ l ” “estimate