Lewis Group Limited · JSE:LEW
Lewis — FY2009 Earnings Presentation
20 slides from Lewis's earnings presentation, May 18, 2009
Slide 1: Results Presentation: 12 months ended 31 March 2009
RESULTS PRESENTATION For the 12 months ended 31 March 2009 2009 1
Slide 2: Agenda
AGENDA 1. The Year in Review 2. Debtor Analysis 3. Summary Financial Results 4. Outlook 5. Questions 2
Slide 3: 1. The Year in Review
1. THE YEAR IN REVIEW R3807m 22.1% R670m 637.1c 323c + 5.9% 22.1% + 20.4% - 7.6% Maintained Revenue Operating Cash Flow Headline Dividend Margin from Earnings per Operations per Share Share 3
Slide 4: The Year In Review (Cont'd)
The Year In Review (Cont’d) • Extremely challenging year for credit retail. • Improving turnover levels in 2nd half of the year. • Merchandise innovation. • Introduction of furniture range to Best Home & Electric. • New format Lewis store. • Average price inflation – 5%. • Stock turn improved from 5
Slide 5: The Year In Review (Cont'd)
The Year In Review (Cont’d) • Debtor costs – a reflection of consumer stress. Bad debts written off + 17% Total doubtful provision + 35% • The rate of growth in the doubtful debt provision improved in 2nd half of the year (H1 R92; H2 R45). • Unemployment – although not yet a factor – remains a risk.
Slide 6: 2. Debtor Analysis
2. DEBTOR ANALYSIS Group Ltd
Slide 7: Debtor Analysis
Debtor Analysis FY09 FY08 Rm Rm Net debtors 3 388 2 939 Bad debts written off 202 172 17.3% Doubtful debts provision – Balance Sheet 533 396 34.6% Doubtful debt provision as a % of net Debtors 15.7% 13.5% Bad debts as a % of net Debtors 6.0% 5.9% Debtor costs as a % of net Debtors 10.0% 6.5% Credit
Slide 8: Debtor Payment Analysis
Debtor Payment Analysis NUMBER OF CUSTOMERS DOUBTFUL DEBT PROVISION % Debtor's Payment Analysis 2009 2008 2009 2008 Customers fully up to date No. 497,296 534,286 including those who have Satisfactory paid paid 70% or more of amounts due over the % 72.0% 75.1% 0% 0% contract period Customers who hav
Slide 9: Analysis of NCA Business
Analysis of NCA Business NUMBER OF CUSTOMERS NCA NCA 24 Months Over 24 Months Customers fully up to date No. 269,491 175,940 including those who have paid Satisfactory paid 70% or more of amounts due over % 81.5% 83.7% the contract period No. 20,732 10,895 Customers who have paid between Slow payers
Slide 10: 3. Summary Financial Results
3. SUMMARY FINANCIAL RESULTS 10 10
Slide 11: Income Statement
Income Statement FY09 FY08 % Rm Rm Revenue 3 807 3 596 5.9% Merchandise sales 1 920 1 890 1.6% Gross profit % 31.3% 32.7% Operating profit 840 930 (9.7%) Operating margin % 22.1% 25.9% Attributable earnings 567 642 (11.7%) EPS (cents) 643 717 (10.3%) Headline EPS (cents) 637 690 (7.6%) 11
Slide 12: Trading Performance
Trading Performance Best Lifestyle Group Lewis Electric Living Revenue growth 5.9% 5.7% 9.1% (0.5%) Merchandise sales % contribution 100% 81.7% 11.8% 6.5% Merchandise sales growth 1.6% 1.7% 3.6% (2.8%) No. of stores – total 535 427 88 20 12
Slide 13: Segmental Analysis
Segmental Analysis Risk Financial Retail Services Services Total Rm Rm Rm Rm 2009 Revenue 2 214 581 1 012 3 807 Operating profit 286 183 371 840 Operating margin 12.9% 31.4% 36.7% 22.1% 2008 Revenue 2 141 564 891 3 596 Operating profit 307 175 448 930 Operating margin 14.4% 31.1% 50.2% 25.9% 13
Slide 14: Analysis of Costs
Analysis of Costs (Excluding Debtor Costs) 2009 2009 Like for Change Like % Change % In terms of IAS18, initiation fees and directly related costs are Employment costs 6.8% 3.6% recognised over the period of the contract on Admin and IT 3.7% 0.7% an effective yield basis. Marketing 15.9% 4.9% Occupa
Slide 15: Balance Sheet Overview
Balance Sheet Overview FY09 FY08 Rm Rm Property, plant and equipment 230 201 Investments 734 665 Tax and Deferred tax - 30 Inventory 228 230 Net Debtors after Doubtful Debts 2 944 2 615 Cash 54 67 Total Assets 4 190 3 808 Shareholders’ equity and reserves 2 940 2 730 Retirement benefits 54 58 Tax an
Slide 16: Capital Ratios
Capital Ratios FY09 FY08 Rm Rm Gearing ratio 23.2% 23.3% Share repurchases 51 162 Total dividend (cents) 323 323 ROE – after tax 20.0% 24.4% ROCE – after tax 17.7% 21.4% ROA – before tax 22.9% 27.8% 16
Slide 17: 4. Outlook
4. OUTLOOK 17 17
Slide 18: Outlook for 2009/10
Outlook for 2009/10 • The proven business model will remain our competitive advance. • Innovative merchandise offers – increased furniture sales. • Revised price inflation expectations. • Management of Debtor book will continue to be a top priority. • Benefit from competitor brand reduction and stor
Slide 19: Outlook for 2009/10 (Cont'd)
Outlook for 2009/10 (Cont’d) • Expand selectively – 20 to 25 stores. • Capital management: ¾ No further buy back planned ¾ Maintain gearing at current levels • Continued improvement in sales post year end. 19
Slide 20: 5. Questions
5. QUESTIONS 20 20