Metcash Limited · ASX:MTS
Metcash — Investor Day (March 2024)
140 slides from Metcash's investor day presentation, Mar 12, 2024
Slide 1: Investor Day
Investor Day 12 March 2024
Slide 2: Acknowledgement of country
Acknowledgement of country We acknowledge the Traditional Custodians of the land on which we meet today, the Wurundjeri Woi-wurrung people of the Kulin nation and pay respects to Elders across Country, past, present and emerging.
Slide 3: Agenda
Agenda 10:00 Welcome, Group Overview Doug Jones Group CEO 11:15 Hardware Annette Welsh IHG CEO Lunch break 12:40 Total Tools Richard Murray Total Tools CEO 1:20 Food Grant Ramage Food CEO 2:00 Food Service Craig Phillips CEO Superior Foods Tea 3:00 Liquor Kylie Wallbridge CEO ALM 3:30 Financial Fram
Slide 4: Group Overview
Group Overview Doug Jones - Group CEO March 2024
Slide 5: Our management team
Our management team Highly capable and experienced Doug Jones Metcash Group CEO Annette Richard Grant Craig Kylie Deepa Danielle Julie Marij Welsh* Murray* Ramage* Phillips1 Wallbridge* Sita* Jenkinson* Hutton* Kouwenhoven* CEO CEO CEO CEO CEO Group CFO Chief People Chief Legal, Chief IHG Total Tool
Slide 6: Overview
Overview Accelerating growth 1 Purpose led 3 Bright future Championing Successful Independents Strong and attractive market positions • Also our strategy, and defines our operating • Hardware & Tools – positive housing model fundamentals • Extended to support of thriving local • Food & Liquor – netw
Slide 7: Our Purpose
Our Purpose Championing Successful Independents in support of thriving local communities to create sustainable shareholder value Championing Thriving Shareholder Successful communities value Independents 4
Slide 8: Australian independents – a 'national treasure'
Australian independents – a ‘national treasure’ The heart of local communities and an IGA network contribution1 enormous contributor to our economy • We service a strong and growing network of ~5,600 bannered Supports ~65,000 local jobs independent retailers across our Hardware, Food and Liquor pill
Slide 9: Hardware: Leading market positions in large attractive markets
Hardware: Leading market positions in large attractive markets Current addressable market ~$66bn + extensive adjacent markets Addressable Network sales1 Market market position Hardware & Tools Largest hardware supplier IHG ~$60bn ~$3.4bn to small & medium size builders Hardware and timber assembly S
Slide 10: Hardware: An integrated wholesale, banner and retailer operator
Hardware: An integrated wholesale, banner and retailer operator Uniquely positioned to support our independent members and franchisees Hardware & Tools Wholesale & Banners & value- Retail operations distribution added services (JV & CO stores) IHG Total Tools IHG 2 mega DCs 138 JV/CO stores DC & sto
Slide 11: Food & Liquor: Leading market positions in large attractive markets
Food & Liquor: Leading market positions in large attractive markets Current addressable market ~$190bn + extensive adjacent markets Addressable Metcash Market market sales1 position Metcash ~$147bn ~$9.6bn Largest supplier to independent food Food Food businesses in Australia Supermarkets & convenie
Slide 12: Food & Liquor: An integrated wholesale and banner operator
Food & Liquor: An integrated wholesale and banner operator A nationally scaled and efficient operation underpinning competitiveness of independent retailers Wholesale & Banners & value- Retail operations distribution added services (JV & COCO stores) Supermarkets Food Minority ownerships in a & Conv
Slide 13: Transformation to a more diversified, resilient and high quality business
Transformation to a more diversified, resilient and high quality business A balanced portfolio of businesses positioned for continued growth FY20 FY23 Post Feb 24 acquisitions1 Diverse channels, customers and A substantially 4% categories provide resilience 25% larger earnings 39% 42% 35% 37% base 5
Slide 14: Foundations of our transition
Foundations of our transition Proven growth strategies and capabilities Leveraging platform Acquire for M&A growth and Consolidate complementary Expand into enhancing fragmented markets adjacent markets businesses performance Extending through value chain for growth JVs Retail ownership New stores &
Slide 15: Strong pillar performance
Strong pillar performance A diverse and resilient earnings profile and platform for future growth Group sales revenue ($bn) Underlying EBIT ($m) and Group EBIT margin (%) 18.1 19.6 800 3.5 17.5 3.0 16.3 700 2.7 2.8 3.0 14.4 14.6 14.9 2.5 605 14.1 2.3 2.3 2.3 13.4 600 2.1 2.1 528 2.5 500 489 417 2.0
Slide 16: Accelerating Growth Momentum
Accelerating Growth Momentum 13
Slide 17: Group strategy
Group strategy Championing Successful Independents in support of thriving Purpose communities to create sustainable shareholder value Aspiration Creating sustainable value for all our stakeholders by empowering local communities to thrive and prosper in partnership with successful independents and o
Slide 18: Our flywheel
Our flywheel How we create value 3 2 1 Supply Demand Provide a multi-channel Generate and capture B2B platform for our customers Our Core Provide an effective Provide best possible Wholesale & and efficient route-to- range of products to Attr Logistics ts market choice for independent customers ma a
Slide 19: Replicating successful growth strategies across the Metcash Group
Replicating successful growth strategies across the Metcash Group Positioned with the platform and capabilities to grow current and future businesses IHG Total Tools Food Superior Liquor Leveraging platform Consolidate fragmented market N/A N/A N/A for M&A growth Acquire complementary businesses N/A
Slide 20: Consolidating fragmented markets
Consolidating fragmented markets Ongoing in Hardware, replicable in Foodservice Trade BB Truss Bay Timber Plumbing Plus Hazelwood & Hill Hume Hardware acquisitions include: focus Swan Plumbing H&G ATS Timber Warringah Timbers Dulux Trade Center Tradelink North Shore HNHS • HTH, Total Tools, Bianco,
Slide 21: Retail ownership and JV growth strategy
Retail ownership and JV growth strategy Key driver of growth in Hardware and Tools, replicable in Food Key driver of growth in IHG and Total Tools IHG Retail IHG retail network grown to 138 stores (JVs and network company-owned stores) – represents ~20% of store (JV and CO and 1 Frame & Truss) netwo
Slide 22: Differentiated shopper value
Differentiated shopper value Success in Food from store upgrades, ranges, brand standards and price competitiveness – accelerating in Liquor Better standards Store upgrades Store Compliance Base Range Catalogue LPED A LPED B Price Match OEP FSA Feb ’21 Jan ’24 Better Value 19 Price Paid Index
Slide 23: New store growth
New store growth A driver of market share Total Tools continues to build on its position of having the largest store footprint in the Australian professional tools market • Targeting to add ~10 stores a year • Identified new sites would increase store network from 116 to 170 IHG focused on store foo
Slide 24: Independent Media Centre
Independent Media Centre Connecting suppliers to independent shoppers Case for Retail Media Network • Revenue opportunity for independents Enablers • Significant opportunity identified for independent networks, pillars, shoppers and Ad buyers Retailers & Independents – the competitive advantage Asse
Slide 25: Continued good progress on ESG
Continued good progress on ESG 1 Group People Planet Community Achieved Interim 2030 Emissions Donations through IGA community Dow Jones Sustainability Index (DJSI) Gender Target For FY23 chest program 89th 50% Female representation at percentile FY23: 87th percentile FY22: 69th percentile <1% Board
Slide 26: Project Horizon update
Project Horizon update Solution schematic Majority complete In progress Deployment schedule Moving from legacy ERP to suite of Microsoft and best of breed strategic capabilities on evergreen cloud platform 9 Supply Chain Control Tower 13 Core finance on 12 an evergreen Inventory Transportation Prici
Slide 27: Disciplined capital management
Disciplined capital management Cash from operating Cash for investing Net interest & lease activities activities payments Core capital management principles Cash realisation Core capex Service obligations Significant growth opportunity in all pillars, requiring meaningful capital investments Strengt
Slide 28: Group CEO – key focus
Group CEO – key focus Corporate/Group Operational Our people Our people, customers and communities • Safety • Safety • Culture • Engagement and culture • Operating model and leadership team • Customer, member, franchise and JV partner business performance, and our relationships with them Enterprise
Slide 29: Trading update
Trading update Group Pillar sales – 10 months ended 25 February 20241 • Total Food sales ex-tobacco increased 5.0%, and are flat including • Total Group sales for ten months to 25 February 2024 increased 0.9% tobacco compared to the prior corresponding period: ⁻ Growth in Liquor and Hardware • Super
Slide 30: A compelling investment proposition
A compelling High quality Group Strong positions in Positioned for investment attractive markets continued growth • Diversified and resilient portfolio • Leading B2B wholesaler and • Successful growth strategies proposition • Balance of defensive and cyclical exposure marketplace ecosystem for indep
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Slide 32: Hardware
Hardware Annette Welsh - CEO IHG March 2024
Slide 33: Overview
Overview 1 Strength in market 3 Network growth • The Independent Hardware Group is the • Company-owned/Joint Venture stores core to 2nd largest player in the Australian strategy Hardware market • Diverse portfolio of store owners and end • Australia's leading hardware wholesale customers reduces exp
Slide 34: Mitre 10 celebrating 65 years
Mitre 10 celebrating 65 years In 1959 Today we have a network of 732 stores with network sales of over $4.5bn1 Eight Timber & Plumbing independents joined together to form a buying group. They met at the Mitre Tavern Melbourne. 1959 1965 2007 2012 2016 2017 2020 Mitre 10 Stores now Mighty helpful Me
Slide 35: Independent Hardware Group
Independent Hardware Group A national distribution business of scale with a significant retail presence Distribution Banners Retail (Wholesale + Value-added services) (Wholesale + Value-added services + Retail ops) 3 mega DCs (Vic, WA & SA) 4
Slide 36: A national network of scale
A national network of scale # Stores % of Sales Network 368 84% sales $3.4bn 155 12% NT 139 84 3% 5 QLD 12 1% 8 619 IHG branded stores WA 1 24 Frame & Truss sites 71 77 3 Wholesale Distribution 1 SA 8 Centres 957 unbannered sites Frame & Truss sites 24 166 NSW (not shown on map) 3 VIC 135 2 1 26 TAS
Slide 37: Sales, brand and ownership mix
Sales, brand and ownership mix A leader in Trade and a growing #2 position in DIY 2019 2023 35% 37% DIY DIY and Trade 65% 63% Trade Retail 40% ownership Corporate and 42% Company Stores/JVs remains a 58% Independent 60% Independent key growth strategy 12% 4% 4% Mitre 10 32% Brand HH 64% 84% Other 6
Slide 38: Customer segmentation profile
Customer segmentation profile Focused on small/medium size builders and DIY ~5% Volume Builders 63% ~28% Small & medium Trade builders ~30% Renovations & additions 37% ~37% DIY DIY 7
Slide 39: Strong financial performance
Strong financial performance Differentiated shopper value, retail ownership and acquisitions key drivers Hardware sales ($m) Hardware EBIT ($m) and EBIT margin (%) 200 6.0 180 CAGR 22.4% 4.9 4.6 4.7 5.0 CAGR 14.9% 160 2752 2801 3.9 4.0 140 2477 4.0 3.3 136 120 3.1 128 2098 2102 2075 EBIT 100 112 3.0
Slide 40: Hardware strategy
Hardware strategy Purpose Building successful independents Aspiration Accelerate growth to consolidate leadership position supplying small and medium builders, and remain the strong #2 in DIY Indispensable partner to thriving independent hardware businesses Preferred route to market for suppliers Wh
Slide 41: Continuing to drive growth
Continuing to drive growth Differentiated shopper value, retail ownership and acquisitions key drivers IHG Total Tools Food Superior Liquor Leveraging platform Consolidate fragmented market na na na for M&A growth and Acquire complementary businesses na na enhancing performance Enter adjacent market
Slide 42: Market Landscape
Market Landscape Significant consolidation opportunities in highly fragmented market CRT BB Truss Bay Timber Hazelwood & Hill Hume Plumbing Plus Swan Plumbing H&G ATS Timber Trade Elders Tradelink H&G Bowens Tradelink North Shore HNHS Warringah Timbers Dulux Trade Center focus Natbuild Dahlsens Dulu
Slide 43: Recent acquisitions
Recent acquisitions Consolidation of fragmented market to support growth strategies Alpine Truss Bianco Construction Supplies • Largest facility in IHG network • Grows SA trade market share to >14% • Strong heritage and relationships • Adds strength in ‘Whole of House’ • Reputation for leading quali
Slide 44: Retail network – JV & CO stores
Retail network – JV & CO stores A key component of IHG’s growth strategy Better together – good for independents and good for Metcash Growth in JV and Company Owned sites Protect and defend the network, and support network DIY & Trade expansion stores 45 71 Assists members with succession planning a
Slide 45: Store network growth
Store network growth Significant new site opportunities Over 200 potential sites identified Opportunities available through: • Independent ownership NT • Joint Ventures QLD Focus on • Company-owned 4 WA top 40 3 Initially targeting 5 4 stores a year through: SA 3 Sales • Consolidation 4 • Brownfield
Slide 46: Growth through collaboration
Growth through collaboration + NT • Strategic growth opportunities QLD • Delivers stronger regional offer WA • Attracts a broader customer base • Joint location drives floor space SA productivity NSW • 10 stores to date, one Independent, 9 COS/JVs, 4 sites in the pipeline VIC • Better for the custom
Slide 47: Trade and DIY strategies
Trade and DIY strategies BUILDTRADE GROW DIY Wholeof House HousesintoHomes VISION #1 TO SMALL AND MEDIUM BUILDERS VISION #2 DIY RETAILER THROUGH CONSUMER DRIVEN APPROACH NETWORK SAPPHIRE STANDARD STRATEGIC CONSUMER BEST STORE IN NETWORK WHOLE OF HOUSE TRADE TECHNOLOGY TRADE CENTRES FOCUS SHOPPER LED
Slide 48: Build Trade strategy
Build Trade strategy Frame Foundation & Truss Lock-up Fix Fit Out BUILDTRADE Wholeof House VISION #1 TO SMALL AND MEDIUM BUILDERS NETWORK SAPPHIRE STANDARD WHOLE OF HOUSE TRADE TECHNOLOGY TRADE CENTRES GROWTH Strategic approach Best consumer STRATEGIC Target ~50% of the house build Lead in Trade Tec
Slide 49: Grow DIY strategy
Grow DIY strategy GROW DIY HousesintoHomes Consumer Shopper Best Store Network VISION #2 DIY RETAILER THROUGH CONSUMER DRIVEN APPROACH Engagement led In Town Sapphire Growth STRATEGIC CONSUMER BEST STORE IN NETWORK SHOPPER LED SAPPHIRE FOCUS ENGAGEMENT TOWN GROWTH • Loyalty • Shopper Led • Store • 3
Slide 50: Driving competitive network health
Driving competitive network health Logistics Operational Digital solutions Technology Data & Insights • 3 distribution centres excellence • eCommerce – • Point of Sale Systems • Scan data insights • National coverage • Business planning national and local • One stop shop • Benchmarking • 26,000 SKUs
Slide 51: Market data - Trade
Market data - Trade IHG trade sales growth (CAGR +18.7%1) well above housing market Australian dwelling starts forecast (‘000)2 Australian renovations forecast ($bn)2 141 52.5 132 122 47.3 46.4 46.0 108 112 110 49.1 48.3 107 42.6 43.4 43.2 102 96 98 97 84 89 71 73 76 72 63 2017/18 2018/19 2019/20 20
Slide 52: Market data – DIY
Market data – DIY IHG DIY sales growth (CAGR +12.5%1) well above market DIY market sales ($bn) 25.9 26.7 25.0 25.4 25.4 23.8 21.5 18.8 19.1 19.5 18.2 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24(f) 2024/25(f) 2025/26(f) CAGR FY16 to FY23 +5.7% DIY market continues to be at
Slide 53: Fundamentals for growth remain solid
Fundamentals for growth remain solid #1 hardware wholesaler in Australia 2024 2025 and beyond • Lower confidence levels • Housing demand strengthens • Low housing build cycle • Population growth forecasted • Independents and suppliers leveraging IHG’s value • Government planning 1.2 million homes ov
Slide 54: Summary
Summary Strong Proven Track record Significant Fundamentals Ideally market strategy for of successful opportunities for return to positioned to positions continued acquisitions to continue market capitalise on growth and synergies market share growth are improvement realisation growth sound in activ
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Slide 56: Total Tools
Total Tools Richard Murray - CEO March 2024
Slide 57: Overview
Overview #1 professional tools retailer with growing Strong omni-channel shopping experience national footprint through physical stores, online and app 10 new stores per year with target Best in class Loyalty program driving hyper- network size of ~170+ stores personalisation; 90%+ of sales through
Slide 58: Total Tools milestones
MTS moves to 85% of TTH Total Tools milestones Total Tools acquires further 15 JV stores A history of consistent store and sales growth Total Tools acquires 12 JV stores Network sales $972m Metcash acquires Network 70% of TTH sales $1bn+ Name changed Pronto ERP $658m network to Total Tools upgrade c
Slide 59: Diverse network structure
Diverse network structure Supports capability to drive growth with new and existing partners Number of Retail SQM 1 stores today 115 ~152k+ Ownership mix Network Avg sales Retail network sales (L12M) per store 52 9 15 $1.1b $10.3m Franchise 54 1 9 3 4 13 15 Customer NPS Insider penetration 2 IHG 4 8
Slide 60: Competitive landscape
Competitive landscape Largest participant in growing professional tools segment Our differentiated market position is complementary to IHG Professional tools market • $6.4bn retail market with positive long-term outlook ~17% market share in High professional tool retailing • Current housing market u
Slide 61: Retailer of choice for major tool distribution partners
Retailer of choice for major tool distribution partners Long-term relationships with many major tool distribution partners Largest professional tool specialist retailer in ANZ for majority of our distribution partners 6
Slide 62: Exclusive brands
Exclusive brands Differentiated range, 12% of network sales, available penetration >20% 7
Slide 63: Track record of success
Track record of success Store network expansion and JV strategy key drivers of growth Network sales Store numbers Majority-owned JV 115 Franchisee @ 31 March 2024 $1,085M $1,107M 110 112 $972M 100 $868M 89 30% 44% 48% 9% 91% 70% 56% 52% FY21 FY22 FY23 Oct-23 LTM FY21 FY22 FY23 1H24 LFL sales per sto
Slide 64: Sales & margin profile
Sales & margin profile Investment in retail network JV’s influences the blended EBIT % TT sales & EBIT performance 1,200 90 1,085 1,107 80 1,000 972 17.0% 17.3% 70 800 868 60 14.0% LTM Network sales 14.3% 50 EBIT $m 600 40 7.7% 7.9% 400 30 6.5% 4.5% 84 20 200 64 49 24 10 0 0 FY21 FY22 FY23 HY24 EBIT
Slide 65: Total Tools strategy
Total Tools strategy Purpose Championing Successful Independents Aspiration #1 retailer of choice for Tradespeople, first choice for trade quality tools • Australia • Professional Tools retailing Where to • In store, online and app • Commercial B2B play For the tradie For the retailer For the suppli
Slide 66: Accelerating momentum
Accelerating momentum IHG Total Tools Food Superior Liquor Leveraging platform Consolidate fragmented market na na na for M&A growth Acquire complementary businesses na na and enhancing performance Enter adjacent markets na Extending Retail – Company-owned na na through value Retail – JVs na chain f
Slide 67: Store network growth
Store network growth Targeting ~10 additional stores per year Average 10+ stores per year 170+ 145 135 Average ~9 stores per year 121 110 100 81 89 79 68 59 41 49 33 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24F FY25F FY26F Future Retail Stores Track record of network growth Significant gr
Slide 68: JV strategy remains critical to success
JV strategy remains critical to success Providing a sustainable model for retention and growth Background • One of the key objectives of the joint venture with MTS for the TTH shareholders was to provide a path for succession for its network of franchise stores over time, and to partner with retaile
Slide 69: Category expansion - Outdoor Power Equipment
Category expansion - Outdoor Power Equipment Capitalising on existing capability and competency to win in high growth category Expansion into fast-growing category The opportunity Total Tools is well positioned • Capitalise and drive share in the fastest growing • Leveraging existing Total Tools eco
Slide 70: Expansion into Commercial market
Expansion into Commercial market B2B a key growth opportunity – more than doubles addressable market Industrial (Commercial) and Professional tools landscape Professional tools market • Ability to leverage existing Total Tools ecosystem, including technology (B2B Stealth Group – Retail Brands Mega M
Slide 71: Customer experience
Customer experience Delivering an excellent customer value proposition to Tradies Focused on servicing 1.5m Tradies1 Providing shoppers with a best-in-class experience Carpenter Value Loyalty 23% proposition program Omnichannel Differentiated User led range of ~2m Insider Rewards 9% e-commerce from
Slide 72: Cordless - significant growth potential remains
Cordless - significant growth potential remains Capitalising on battery technology improvements, NPI and new market segments Traditional Cordless Innovation and New Products • Australians remain early adopters of new products • Continued leverage of cordless systems growing user acquisition • Key br
Slide 73: Whole of Trade strategy
Whole of Trade strategy Well positioned through our highly engaged Insider program Where they work Where they live • Innovation and new products • Home security • New technologies • Garage (automotive, storage) • High voltage battery tech • Garden (OPE, storage) • Emerging categories • Mancave / BBQ
Slide 74: Digital Store
Digital Store Enhancing customer experience and store efficiency to drive process optimisation, revenue growth, and working capital reduction • Immediate Uncapped Price Updates • Aged and Deleted Stock Reduction • 1st Australian Retailer Working Capital nearing 100% rollout • Minimise working capita
Slide 75: On track to deliver our ambitious growth plans
On track to deliver our ambitious growth plans Clear #1 in Network Track record New products Professional Growth to 145 of delivering and technology Tools segment stores by FY26 innovative shifts continue with further solutions to Insights ensure to provide growth support our we provide a growth opp
Slide 76: March 2024
March 2024
Slide 77: Food
Food Grant Ramage – CEO Food March 2024
Slide 78: Overview
Overview Metcash Food has proven to be a resilient business with excellent potential for further growth The Food businesses was reset We are now positioned for and returned to growth pre-COVID accelerated growth through: • Expanding the store network • Further differentiating the IGA offer • Unlocki
Slide 79: Diversified across supermarkets, foodservice & convenience
Diversified across supermarkets, foodservice & convenience Core IGA business now represents ~50% of Food pillar sales Metcash Food Superior Campbells & Supermarkets Foodservice Convenience Other Shipping - 1% Other Independents - 16% • Both Food and 1% Superior’s purpose Protein - 1% is supporting O
Slide 80: Superior acquisition
Superior acquisition Enables delivery of an extensive product catalogue to more independents, more often Highly complementary distribution Greater scale & efficiency network and reach for our stakeholders • Better range & availability Metcash Food major DCs • Locally competitive prices Campbells & C
Slide 81: Metcash Food
Metcash Food 5
Slide 82: Metcash Food
Metcash Food From traditional food wholesaler to integrated wholesaler, banner-operator and retailer Distribution Banners Retail (Wholesale + Value added services) (Wholesale + Value-added services + Retail ops) To come: expanded Metcash Food JV role in retail to protect the network and accelerate s
Slide 83: Further growth through Sorted platform
Further growth through Sorted platform Opportunity to expand reach from ~1k to +50k B2B customers The Jul-Aug Feb 2020 Apr 2021 May 2022 Sept 2022 Nov 2023 Beyond 2024 journey Clear customer Automated Launch of Sorted Launch of product Over 1,000 Retailers Campbells and New Buyers pain points Charge
Slide 84: IGA national store network
IGA national store network Quality brands and range of store formats Store network now in right channels and formats Store format # stores 7 Large format catering NT 4 to price-sensitive (<1%) catchments WA QLD 221 215 Competitive large format 252 local supermarkets1 (19%) Our sweet Core IGA spot at
Slide 85: Differentiated shopper value
Differentiated shopper value Improved network competitiveness through better retailer standards Better stores + Better value for shoppers Store compliance Price Paid Index Base Range Catalogue LPED A LPED B Price Match OEP FSA Feb 21 Jan 24 Healthier retailer Compliance improves Margin expansion Sus
Slide 86: Campbells & Convenience
Campbells & Convenience A leading wholesale food distributor serving multiple non-supermarket channels Business overview Customer base • Cash & carry front door stores and online Revenue by channel (ex-tobacco) Campbells portal for small customers (e.g. milk bars) • Wholesale distribution for foodse
Slide 87: Financial performance
Financial performance Resilience post-COVID despite legal tobacco decline Food revenue1 ($bn) Food EBIT ($m) and EBIT margin (%) 220 2.5 2.1 2.1 2.1 2.1 2.0 2.0 2.0 2.0 210 2.0 200 1.5 190 9.5 9.6 1.0 9.4 180 204 9.2 200 9.1 9.1 192 8.8 8.8 188 0.5 170 180 180 183 183 160 0.0 FY16 FY17 FY18 FY19 FY2
Slide 88: Accelerating momentum
Accelerating momentum Significant growth opportunities IHG Total Tools Food Superior Liquor Leveraging platform Consolidate fragmented market na na na for M&A growth Acquire complementary businesses na na and enhancing performance Enter adjacent markets na Extending Retail – Company-owned na na thro
Slide 89: Growing market share
Growing market share Network expansion and improving store sales Network growth (m2) Retail excellence (sales/m2) Sustainable growth through new retailers, Support IGA retailers to implement category management and reinvest new stores and growing footprint in their stores – lifting productivity in o
Slide 90: Improving store performance
Improving store performance 45,000 Western Australia example Sales $/m2 40,000 Great examples exist today in our network 35,000 Fresh solutions – value-added fruit & veg, home meal replacement options: ready to eat/heat/cook 30,000 Multiple Store Owners (MSOs) and Single Store Owners (SSOs) 25,000 B
Slide 91: Kinross
Kinross Socio-economics Mid-affluent Competition New Coles opened 1.2km away • Revitalised fresh Store size Large Store specialties • Repurposed deli • Activated fresh solutions Store status Recently refurbished with DSA • In-store kitchen 15
Slide 92: Carine
Carine Socio-economics Affluent Competition Specialist food store adjacent tenancy • Expanded fresh Store size Medium Store specialties • Activated fresh solutions • Very high sales/m2 Store status Recently extended to adjacent tenancy 16
Slide 93: Myaree
Myaree Socio-economics Mid-affluent Store specialties • Exemplary fresh • Commercial kitchen • Fresh solutions pioneer Store size Large • Very high sales/m2 New owner, refurbished with DSA & Store status extended 17
Slide 94: Network expansion
Network expansion 45,000 Sales $/m2 Western Australia example 40,000 Pace of store rollout can be accelerated – by replicating and productionising ‘1200sqm standard’ modern IGA store 35,000 Attractive option for developers 30,000 Accelerating network growth 25,000 Category management incorporated in
Slide 95: Piara Waters
Piara Waters Mid-affluent. Growing, • Commercial kitchen Socio-economics Store specialties master planned suburb • Fresh solutions • Full grocery range, locally Store size Medium competitive pricing • Above average sales/m2 with scope to grow with new housing Store status Opened Oct 23; low-cost fit
Slide 96: Langley Park
Langley Park Socio-economics CBD Perth Store specialties • Commercial kitchen • Fresh solutions • Full supermarket offer – 1st in Store size Medium eastern CBD • Already above average sales/m2 Store status Opened 17 Jan 2024 with excellent growth potential 20
Slide 97: Network expansion
Network expansion Prioritising openings of ‘sweet spot’ IGA stores 900-1500m2 IGA new store development by format (net store/size mix) FY22 FY23 FY24F +20 stores +23 stores +16 stores +13 +11 +7 +7 +7 +5 +2 +2 +5 12 12 17 17 15 12 5 6 7 -3 -5 -5 -2 -4 -4 -6 -7 -8 S M L S M L S M L 21 nb: Store closu
Slide 98: Summary
Summary Healthy Earnings growth Highly relevant supermarket ‘through the local offer, more network – ready cycle’ – growing competitive to unlock latent volume than ever potential Superior Campbells & Focused on our acquisition Convenience core strengths supports retaining and differentiated winning
Slide 99: March 2024
March 2024
Slide 100: Superior Food
Superior Food Craig Phillips CEO March 2024
Slide 101: Proud new member of Metcash family
Proud new member of Metcash family 1 Metcash is the ideal partner to take Superior provides scale and capability Metcash and Superior create a formidable force in Superior to the next level through its: to Metcash in corporate and street foodservice: • Existing wholesaling and distribution foodservi
Slide 102: About Superior
About Superior Industry leader servicing a broad range of customers across the foodservice sector A wide range of dry, chilled, frozen, meat, smallgoods and seafood lines Partnerships with mining sites, restaurants, cafes, canteens, caterers, schools, universities, healthcare and aged care facilitie
Slide 103: Our history
Our history Supporting foodservice for over 30 years 1992 2005 2008 2011 2015 2016 2019 2021 2024 First Acquired Domino’s Acquired Quadrant Acquired Won Acquired Joins delivery Cameron Victoria Money Savers investment Sealanes Compass QFB Brisbane Metcash Wholesale distribution Sydney Perth tender F
Slide 104: Consolidating a fragmented market
Consolidating a fragmented market Management is experienced in identifying and integrating M&A targets Grown national distribution network across states Seafood distribution Fresh & frozen suppliers Foodservice QLD TAS NSW Allclypt Built network to Foodservice Marine logistics ~600 suppliers Protein
Slide 105: Our network
Our network ~20k ~6% Customers Market share QLD ~600 ~15k 7 branches WA 3 branches SA Suppliers SKUs 1 branch NSW 23 ~290 8 branches VIC Branches Vehicles 2 branches nationwide TAS 2 branches 6 Source: Superior Food internal analysis and management estimates
Slide 106: Foodservice market
Foodservice market Expected to grow strongly Australian Foodservice market size ($bn)1 Superior is positioned strongly in the foodservices market Key drivers: Large convenience and out of home eating 27 Cements Metcash’s position ~$3.3b ~$2.2b +5% as largest wholesaler and 25 distributor of Food to
Slide 107: Quadrant ownership
Quadrant ownership Invested in 2015 with aim of helping create 3rd national foodservice provider Quadrant’s support and investment 01 02 03 04 05 06 07 Targeting and Organic growth New A new ERP Safety Investment in Sound investing in (customer wins management (Pronto) new trucks business advice gro
Slide 108: Innovation
Innovation Sign on Glass – the future of foodservice New digital platform integrated to existing ERP and web solution Delivers the following benefits: Real-time updates SMS for expected Ability to place Driver records on orders via web delivery time orders with drivers temperatures for chilled/froze
Slide 109: Synergies from Superior acquisition
Synergies from Superior acquisition ~$14m+ annualised Implementation: Network optimisation Utilising the combined supply ~$1m+ and shared services chains of Metcash & Superior High confidence level with track record of over delivery Unlocking mutual benefit from Procurement benefits ~$7m+ scale & ef
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11
Slide 111: Liquor
Liquor Kylie Wallbridge – CEO ALM March 2024
Slide 112: Serving the independent market across all liquor channels
Serving the independent market across all liquor channels Strong market position Competitive advantage Growth opportunities • Second largest supplier of liquor in • The only scaled national logistics network • Significant growth and outperformance Australia serving independents in liquor in recent y
Slide 113: Our wholesale scale, efficiency and services enable independents to be competitive
Our wholesale scale, efficiency and services enable independents to be competitive Distribution Banners (Wholesale + value added services) Off-Premise IBA banner group Wholesale and value-added services Examples On Premise WA/VIC (pubs, venues) Contract Customers Other on & off premise independent g
Slide 114: Independents' market share has grown significantly
Independents’ market share has grown significantly Metcash supplies ~85%1 of all independent liquor retailers 1 Australian Liquor Market FY22 - $21.9bn (total packaged liquor)2 FY24 - $21.8bn (total packaged liquor) Metcash sales mix: 87% retail 27% 13% on-premise 30% Metcash Liquor Store mix: Metca
Slide 115: The largest network of bannered liquor stores in Australia & NZ
The largest network of bannered liquor stores in Australia & NZ Network of >1,700 IBA stores and portfolio of leading brands Branded banner store network 496 1,395 NT 26 QLD AU 476 177 WA SA 370 130 82 NSW 264 NZ 363 Store network includes an additional ~1,000 Liquor@ stores VIC 537 128 NZ 370 TAS 8
Slide 116: Sustained revenue & profitability growth
Sustained revenue & profitability growth +60% revenue growth and doubled EBIT since FY14 Liquor revenue ($bn) Liquor EBIT ($m) and EBIT margin (%) 140 2.5 2.1 120 2.0 2.0 2.0 2.0 2.0 1.9 1.9 1.9 2.0 100 1.6 80 1.5 4.8 5.0 60 4.4 104 1.0 3.7 3.7 97 3.3 3.5 89 3.2 3.1 3.2 40 67 70 71 73 58 62 0.5 52 2
Slide 117: Continuing momentum
Continuing momentum 7
Slide 118: Liquor strategy
Liquor strategy Purpose Championing successful independents Consolidate 2nd largest Grow IBA, on premise and support contract Aspiration liquor position in ANZ customers through wholesale excellence • Indispensable provider of scale economics to • Australia and New Zealand Where to thriving small in
Slide 119: Continuing to drive growth
Continuing to drive growth Building on strong foundations IHG Total Tools Food Superior Liquor Leveraging platform Consolidate fragmented market na na na for M&A growth Acquire complementary businesses na na and enhancing performance Enter adjacent markets na Extending Retail – Company-owned na na t
Slide 120: Differentiated shopper value
Differentiated shopper value Continuing to drive growth and the IBA network Network of the Future Value added services Right formats Promotional programming each market and location Retail development (signage, store fit-outs and layout) Brand standards Digital Driving Improving compliance the flywh
Slide 121: Differentiated shopper value
Differentiated shopper value Driving sales growth through best-in-class fit-outs and refresh projects Signage Refresh Coolroom Refresh Store Refurb New Store Design Consistent branding creates Improving shopping experience – Insight led store design driving growth Providing our members a visual a co
Slide 122: Platinum program
Platinum program Acceleration of growth through digital, data, standards & compliance Platinum program Activity/capability Current program Platinum program Collaboration and commitment between retailers, Preferred POS vendor suppliers and IBA to increase sales and improve margins Scan data Host supp
Slide 123: Owned and Exclusive brands
Owned and Exclusive brands Quality products, value for shoppers, good margins for retailers and volumes for IBA Continuing to leverage acquisition • Quality, value and margin • Innovation backed by consumer, proposition remains centre of strategy • Team of experts delivering against Independent Bran
Slide 124: Diversifying supplier base supports differentiated and tailored range
Diversifying supplier base supports differentiated and tailored range Providing a route to market for independent suppliers ~ 150 new suppliers every year
Slide 125: ALM Connect
ALM Connect Growth through an extended aisle for all customers across all channels ‘Endless Aisle’ - a broader Expanded supplier network ‘Nursery’ – provide craft and Creates ease of doing Nurturing new products product range (currently creating a broader supplier independent suppliers an business f
Slide 126: Positioned to continue growth momentum
Positioned to continue growth momentum Continued focus on growing independent share of liquor market and the IBA network Confidence in success underpinned by: • Strong market positions • Competitive advantages • Growth initiatives: • Network of the Future acceleration • Data and digital (Platinum &
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Slide 128: Financial Framework
Financial Framework Deepa Sita - Group CFO March 2024
Slide 129: Key focus areas
Key focus areas Maintaining a Maintaining a disciplined approach Active capital strong and flexible to working capital and costs allocation balance sheet • Maintain appropriate inventory • Underpins long term earnings and • Maintain net debt levels within to ensure our retailers have cash flow growt
Slide 130: Capital management framework
Capital management framework Cash from Cash for Net interest operating investing & lease activities activities payments Cash realisation Core capex Service obligations Strengthening the core capex Includes Maintenance and Expansion (M&A & new business development not included) Maintain strong balanc
Slide 131: Working capital
Working capital • Strong focus on cash management ‒ Timely collection of debtors and inventory management • Factors impacting inventory levels and cash realisation ratio Inventory ($m) and inventory days ‒ Growth in sales and price inflation 40 1500 32.7 ‒ Seasonality and daily operational cash cycl
Slide 132: Active capital allocation
Active capital allocation Capex investment is categorised to focus on achieving attractive portfolio returns Strengthening the core Strategic growth Maintenance Expansion M&A and new business development • Replacement of capital items that have reached the • Initiatives to deliver synergies, • Inves
Slide 133: Capital allocation
Capital allocation Capital expenditure ($m)2 200 20 • Capital investment categories/projects have differing rates of 150 18 returns but are expected to achieve hurdle rates above the long term WACC, and overall achieve attractive blended returns for the 100 16 Group 50 14 • DCF/IRR and ROFE analysis
Slide 134: Debt management
Debt management • Continued focus on optimisation of debt book ‒ Maintain flexibility at competitive average cost of debt ‒ Maintain a strong credit profile Debt facility maturity profile ‒ Ensure a balanced maturity profile – average tenure >2.7yrs (1H24) ‒ Flexibility to accommodate seasonal fluct
Slide 135: Capital management framework
Capital management framework Cash from Cash for Net interest operating investing & lease Commentary Guidance activities activities payments Cash realisation ratio dependent on working capital ~75-85% Cash realisation Core capex Service obligations rolling 3yr av management, significant items and tra
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2024
Slide 137: Wrap up
Wrap up Doug Jones - Group CEO March 2024
Slide 138: Summary
Summary The way forward 1 Purpose led 3 Bright future Championing Successful Independents Strong and attractive market positions in support of thriving communities • Hardware & Tools – positive housing • Is our strategy fundamentals • Provides a large opportunity • Food & Liquor – networks and offer
Slide 139: A compelling investment proposition
A compelling High quality Group Strong positions in Positioned for investment attractive markets continued growth • Diversified and resilient portfolio • Leading B2B wholesaler and • Successful growth strategies proposition • Balance of defensive and cyclical exposure marketplace ecosystem for indep
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