Harvey Norman Holdings Ltd · ASX:HVN
Harvey Norman — FY2020 Earnings Presentation
23 slides from Harvey Norman's earnings presentation, Aug 28, 2020
Slide 1: Analyst Presentation for the Year Ended 30 June 2020
ANALYST PRESENTATION FOR THE YEAR ENDED 30 JUNE 2020 Australia Singapore Ireland Malaysia New Zealand Slovenia Northern Ireland Croatia
Slide 2: Contents
CONTENTS Key Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 COVID-19 Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Reported Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Reported Pr
Slide 3: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS 3 HARVEY NORMAN HOLDINGS LIMITED ® NET ASSETS $ 3.5 billion Excluding AASB 16 net impact REPORTED PBT PBT and net property revaluations $ $ 661.29m 86.73m ( 15.1%) FROM $574.56m IN 2019 $ $ 635.60m 131.35m ( 26.0%) FROM $504.26m IN 2019 up $279.53 million ( 8.7%) REPORTED PR
Slide 4: Key Financial Highlights (continued)
KEY FINANCIAL HIGHLIGHTS (continued) 4 Property • 30 June 2020: 194 franchised complexes in Australia and 96 company-operated stores overseas. • Robust $3 billion property portfolio, consisting of freehold investment properties in Australia, owner-occupied land and buildings in New Zealand, Singapor
Slide 5: COVID-19 Update
COVID-19 UPDATE Summary of temporary store closures and support & assistance received 5 Overseas Operations • Temporary closures of our company-operated stores for a 4 to 10 week period. • In aggregate, overseas subsidiaries were eligible to receive wages support and assistance of $22.28 million fro
Slide 6: Reported Profit Before Tax
REPORTED PROFIT BEFORE TAX YEAR ENDED 3! E 2020 REPORTED PROFIT BEFORE TAX PBT fetoroperty revatuations $661.29m $635.60m 1% ON 2 « 26.0% ON 2019 PROFIT BEFORE TAX AS REPORTED ($M) REPORTED PBT ssae.im $661.29m 49576 UP BY 15.1% ON 2019 - $635.60m = UP BY 26.0% ON 2019 *8:36m L__| 2018 207 oenates t
Slide 7: Reported Profit Before Tax: Key Contributors
REPORTED PROFIT BEFORE TAX: Key Contributors 7 Increase of $86.73 million (+15.1%) in Reported PBT due to: • $100.19 million increase in franchising operations segment ($348.59m vs $248.40m), up +40.3% Directly attributable to the growth in aggregated franchisee sales revenue to $6.16 billion in FY2
Slide 8: Reported Profit After Tax
REPORTED PROFIT AFTER TAX 8 • Net profit after tax (NPAT) and non-controlling interests increased by $78.22 million, or +19.4%, to $480.54 million for the 2020 financial year, from $402.32 million in the preceding year. Excluding the AASB 16 net impact and the after tax net property revaluation adju
Slide 9: Key Statistics: Balance Sheet
KEY STATISTICS: BALANCE SHEET 9
Slide 10: Review of the Balance Sheet
REVIEW OF THE BALANCE SHEET 10 JUN 2020 JUN 2019 INCREASE/(DECREASE) REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* TOTAL ASSETS $5,828.60m ($1,135.69m) $4,692.92m $4,798.74m $1,029.86m 21.5% ($105.83m) (-2.2%) TOTAL LIABILITIES $2,351.28m ($1,173.09m) $1,178.19m $1,600.95m $
Slide 11: Review of the Statement of Cash Flows
REVIEW OF THE STATEMENT OF CASH FLOWS 11 JUN 2020 JUN 2019 INCREASE/(DECREASE) REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* NET CASHFLOWS FROM OPERATING ACTIVITIES $1,056.96m ($124.77m) $932.19m $372.85m $684.12m 183.5% $559.35m 150.0% NET CASHFLOWS USED IN INVESTING ACTIVI
Slide 12: Overseas Retail Segment
OVERSEAS RETAIL SEGMENT 12 OFFSHORE SEGMENT PROFIT RESULT FY 2020 FY 2019 INCREASE/(DECREASE) RETAIL - NEW ZEALAND $99.16m $77.39m $21.76m 28.1% RETAIL - SINGAPORE & MALAYSIA $27.62m $37.06m ($9.44m) (-25.5%) RETAIL - IRELAND & NORTHERN IRELAND $16.87m $7.80m $9.08m 116.4% RETAIL - SLOVENIA & CROATI
Slide 13: Overseas Retail Revenue
OVERSEAS RETAIL REVENUE 13 • $70.36m increase in Ireland & Northern Ireland sales revenue COMPANY-OPERATED RETAIL REVENUE Ireland Up by $71.47m mainly due to a strong HY20 and in 3Q20 prior to lockdown. $ 2.13 BILLION The government mandated lockdown resulted in a significant sales decrease over the
Slide 14: Overseas Retail Result
OVERSEAS RETAIL RESULT 14 • $21.76m (+28.1%) increase in NZ result from $77.39m in FY19 to $99.16m in FY20 OVERSEAS COMPANY-OPERATED M arket share growth across all key product categories in New Zealand. RETAIL SEGMENT R obust sales with solid floor margins, and an effort to curtail and streamline o
Slide 15: System Sales Revenue
SYSTEM SALES REVENUE 15 SYSTEM SALES INCREASE / (DECREASE) IN CONSTANT LOCAL CURRENCIES: TOTAL SALES 1Q2020 2Q2020 3Q2020 4Q2020 FY2020 TOTAL SYSTEM vs. vs. vs. vs. vs. SALES REVENUE OF 1Q2019 2Q2019 3Q2019 4Q2019 FY2019 8.46 BILLION $ AUSTRALIAN FRANCHISEES $A* +1.4% (-0.9%) +6.7% +29.8% +8.9% NEW
Slide 16: Franchisee Aggregated Sales Revenue
FRANCHISEE AGGREGATED SALES REVENUE 16 * Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity. Harvey Norman®, Domayne® and Joyce Mayne® retail sales in Australia are made by independently owned franchisee businesses that are not consolidated wi
Slide 17: Franchising Operations Segment
FRANCHISING OPERATIONS SEGMENT 17 FY 2020 FY 2019 INCREASE/(DECREASE) FRANCHISING OPERATIONS SEGMENT REPORTED AASB 16 IMPACT PRE-AASB 16 PRE-AASB 16* REPORTED PRE-AASB 16* FRANCHISING OPERATIONS SEGMENT REVENUE $949.04m $949.04m $838.67m $110.37m 13.2% $110.37m 13.2% AGGREGATED FRANCHISEE HEADLINE S
Slide 18: Franchising Operations Segment (continued)
FRANCHISING OPERATIONS SEGMENT (continued) 18 • $110.37m (+13.12%) increase in segment revenue from $838.67m in FY19 to $949.04m in FY20 is FRANCHISING OPERATIONS mainly due to: SEGMENT REVENUE UP BY $110.37m ( 13.2%) I ncrease in revenue received from franchisees by $112.22 million or +11.9%. Net f
Slide 19: Property Segment
PROPERTY SEGMENT 19 FY2020 FY2019 Increase/(Decrease) % PROPERTY SEGMENT REVENUE $300.53m $332.16m ($31.63m) (-9.5%) NET PROPERTY REVALUATION INCREMENT $34.96m $70.30m ($35.35m) (-50.3%) PROPERTY SEGMENT EBITDIA $199.02m $235.08m ($36.06m) (-15.3%) PROPERTY SEGMENT RESULT BEFORE TAX $173.19m $204.68
Slide 20: Review of Freehold Property Portfolio
REVIEW OF FREEHOLD PROPERTY PORTFOLIO 20 • The consolidated entity owns and manages a robust freehold property portfolio valued at over $3 billion as at 30 June 2020. • hese large-format retail properties are characterised by generous retail footprints and spacious floor layouts, providing a safer,
Slide 21: Review of Leasehold Property Portfolio
REVIEW OF LEASEHOLD PROPERTY PORTFOLIO 21 • Right-of-Use Assets: Leasehold Investment Properties (Sub-Leased to External Parties) Primarily for the purposes of being sub-leased to Harvey Norman®, Domayne® and Joyce Mayne® franchisees in Australia. A s at 30 June 2020, there were 240 leasehold invest
Slide 22: Outlook
OUTLOOK 22 • We expect to open up to 12 new Harvey Norman® company-operated stores overseas, with 3 in New Zealand, 3 in Malaysia, 3 in Singapore, 2 in Ireland and 1 in Croatia. The new store at Galway City in Ireland has already opened subsequent to balance date and is trading well. • In Australia,
Slide 23: Questions
QUESTIONS (limited to 30 minutes) 23
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