B&m European Value Retail Plc · LSE:BME
B&m European Value Retail — H1 FY2018 Earnings Presentation
21 slides from B&m European Value Retail's earnings presentation, November 2017
Slide 1: Interim Results Presentation
B&M European Value Retail SA Interim Results Presentation 26 weeks to 23rd September 2017
Slide 2: Interim FY18 Group Highlights
Interim FY18 Group Highlights • Group revenues increased by 21.7% to £1,346.4m • B&M LFL revenues +7.5%, Q2 LFL +7.7% • Group adjusted EBITDA increased by 19.8% to £116.1m • Adjusted Diluted EPS 7.0p an increase of 18.6% • 20 UK and 7 German new store openings • Completed the acquisition of Heron Fo
Slide 3: Paul McDonald, Chief Financial Officer
Paul McDonald Chief Financial Officer Ref: 750493 3
Slide 4: Summary Profit and Loss
Summary Profit and Loss £ millions, 2017A H1 2018A H1 % Group Stores £ millions, 585 893 52.6% Revenues 1,105.9 1,346.4 21.7% Gross Profit 383.4 455.9 18.9% % 34.7% 33.9% (81)Bps Operating Costs (286.5) (339.8) 18.6% Adjusted EBITDA 96.9 116.1 19.8% % 8.8% 8.6% (14)Bps Depreciation and Amortisation
Slide 5: Group Revenue Bridge
Group Revenue Bridge £ millions, H1 REVENUE 2017A-2018A Net New Stores £101m • +21.7% revenue growth 48 1,346 • Annualisation of 53 new stores opened in FY2017 18 74 26 • 20 new stores opened in the UK, of which 3 were 87 relocations. There were additionally 2 closures (12) 1,106 • Strong UK LFL rev
Slide 6: Continued EBITDA Growth
Continued EBITDA Growth £ millions, H1 ADJUSTED EBITDA BRIDGE 2017A-2018A Margin % 8.8% 8.6% Net New Stores 4.2 2.4 116.1 6.2 (2.5) (1.7) 2.9 8.2 (0.5) 96.9 2017A FY Effect of Closed / FY18 New LFL T&D Central Costs1 Germany Heron 2018A FY17 Relocated Stores Efficiencies Openings Note 1: Central cos
Slide 7: Strong LFL Momentum
Strong LFL Momentum LAST 12 MONTHS LFL BY QUARTER COMMENTARY H2 FY17 H1 FY18 +5.4% +7.5% • LFL growth of +7.5% in H1 • The LFL trend in Q2 +7.7% was ahead of the Q1 +7.3% LFL despite Q1 benefitting from Easter 9.0% • The growth is coming from both increases in customer 8.0% 7.7% numbers and average
Slide 8: Gross Margin
Gross Margin GROSS MARGIN (%) KEY HIGHLIGHTS • 81bps reduction in group gross margin to 33.9% 34.7% • UK margins have reduced by 80 bps: • Shift in the mix towards grocery/FMCG ranges, 35bps 33.9% • Some cost price pressure absorbed on these products • Seasonal clearance activities due to wet July /
Slide 9: Operating Costs
Operating Costs £ millions, H1 2017A H1 2018A KEY HIGHLIGHTS Store Costs 199.9 226.9 Transport and Distribution 40.5 43.3 • B&M operating costs as a % of sales, 107bps lower than last Central Costs 18.8 21.9 year New Store Pre-Opening 2.3 1.7 Total B&M 261.5 293.8 • impact of living wage largely mit
Slide 10: Interest Expenses
Interest Expenses £ millions, KEY HIGHLIGHTS 2017A 2018A • Interest and amortised fees 15.4% higher than last year, Interest 8.4 9.8 following the refinancing in February 2017 Amortised Fees 0.7 0.7 Total 9.1 10.5 Put/Call Option 0.8 0.7 • Non-cash impact of £0.7m under IFRS for Jawoll put / call De
Slide 11: Cash Flow
Cash Flow £ millions, OPERATING CASH FLOW CASH FLOW STATEMENT £m H1 2017A H1 2018A Leverage less than target 2.25x Adjusted EBITDA 96.9 116.1 Change in Working Capital (19.1) (71.1) 89 New Store Capex (15.9) (12.9) 73 Infrastructure Capex (2.3) (7.9) 54 Maintenance Capex (5.3) (6.2) Capex (23.5) (27
Slide 12: Simon Arora, Chief Executive Officer
Simon Arora Chief Executive Officer Ref: 750493 12
Slide 13: The UK Customer
The UK Customer UK Retail Price Index, Y-o-Y UK Consumer Credit (£bn) 5.2% 290 278 263 245 226 3.6% 3.5% 213 196 3.2% 3.1% 2.9% 176 166 2.4% 144 147 1.7% 1.0% 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E Asda Income Tracker BRC-KPMG SALE
Slide 14: Continue to Successfully Roll Out B&M UK New Stores
Continue to Successfully Roll Out B&M UK New Stores 552 STORES AS AT SEPTEMBER 2017 FY2018 OPENINGS 20 New Store openings and 2 closures 3 openings were relocations 15 net openings 50 gross openings including 7 relocations planned for FY2018 In the UK the B&M new store target remains 950 stores STOR
Slide 15: New Store Returns
New Store Returns £ millions, FY2016 AND FY2017 STORE OPENINGS1 KEY HIGHLIGHTS Average • B&M continues to deliver industry leading new store payback periods Revenue per Store £5.14m Store EBITDA² £0.83m • This update includes all of the last 59 organic new store openings that have traded at least on
Slide 16: New Build UK Store Returns – Case Study
New Build UK Store Returns – Case Study SALISBURY STORE – OPENED AUG-16 KEY HIGHLIGHTS Construction Phase • Over half of the new store pipeline relates to new build or extensive remodelling • Newbuilds are a major part of the B&M UK new store opening program, versus pre-occupied space previously • T
Slide 17: New Warehouse Investment in the UK
New Warehouse Investment in the UK IMPRESSION OF PROPOSED NEW DC KEY HIGHLIGHTS • Exchanged contracts on the land for 1,000,000 sq ft warehouse in Bedford • 150,000 pallet spaces with chilled and frozen chambers to support Heron expansion • Capable of servicing over 300 B&M stores • Timeline: • Plan
Slide 18: International Expansion - Germany
International Expansion - Germany SUMMARY CURRENT FOOTPRINT • Delivered € revenue growth of 11.5% • A difficult gardening and plant season with a disappointing 12+1 reduction in EBITDA 1 • 7 new stores opened in H1 and now expecting 11 organic 29+3 openings in FY18 3 • Appointment of a new CEO, Chri
Slide 19: The UK Convenience Market
The UK Convenience Market LOCATION HIGHLIGHTS Main High St / City Centre 12% • There are nearly 50,000 Convenience stores in the UK Larger Parade 10% Isolated Store 41% • The market is worth an annual £38 billion and accounts for over 20% of the total grocery market and is forecast to grow to £40 bi
Slide 20: Heron – The Opportunity
Heron – The Opportunity HIGHLIGHTS • “We are pleased with what we have found” • The business is trading positively and has good LFL momentum • Complementary product offer and a “Limited Assortment Discounter” • Maximising the Heron Opportunity • rolling out expanded convenience offer in 80 larger He
Slide 21: Outlook for Full Year – FY18
Outlook for Full Year – FY18 • UK consumers are increasingly drawn to value, with grocery and FMCG trading strongly • Delighted by UK LFL momentum going into the second half and healthy new store pipeline • Stores are fully stocked and supply chain operating well • Excited by the opportunity to grow
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