Metcash Limited · ASX:MTS
Metcash — H1 FY2021 Earnings Presentation
33 slides from Metcash's earnings presentation, Dec 7, 2020
Slide 1: FY21 Half Year Results
FY21 Half Year Results 7 December 2020
Slide 2: About Metcash
About Metcash Our purpose Our vision Our values Best store in town Championing Passionate about independents We believe Independence is worth fighting Successful for; in treating our people, retailers and suppliers the way Independents A favourite place to work we like to be treated; and in giving b
Slide 3: Group update and Pillar results
Group update and Pillar results Jeff Adams Group Chief Executive Officer 3 3 FY20 Full Year Results
Slide 4: Adapted to COVID-19 challenges
Adapted to COVID-19 challenges Metcash is extremely proud of how its employees, suppliers and customers have responded to the evolving COVID-19 restrictions and the unprecedented demand across all Pillars Pillars adapted to strictly follow COVID Safe work practices, while meeting elevated levels
Slide 5: Adapted to COVID-19 challenges continued
Adapted to COVID-19 challenges continued Metcash invested to support the independent retail network Launched online retail offering for both Food and Liquor Successful transition to new DC in South Australia Continued investment in MFuture initiatives despite more challenging work environmen
Slide 6: Group highlights
Group highlights Significant growth in sales volumes across all Pillars Strong earnings growth with underlying Group EBIT up 30.4% to $203.0m Group revenue increased 12.2% to $7.1bn and 12.3% to $8.1bn including charge-through sales Strong sales growth underpinned by investment in MFuture in
Slide 7: Results overview by pillar
Results overview by pillar 1H21 1H20 Change Sales revenue (%) * $m $m % Sales revenue (including charge-through sales) Food Food 4,795.9 4,381.1 9.5% 16% Liquor Liquor 2,039.1 1,784.2 14.3% Hardware Hardware 1,258.9 1,044.2 20.6% 25% 59% Total sales revenue (including charge-through sales) 8,093.9 7
Slide 8: Food – sales
Food – sales Total Food sales (including charge-through) up 9.5% to $4.8bn (+16.3% ex-Drakes1 and 2 7-Eleven impact ) 1H21 1H20 Change 1 Supermarkets sales increased 14.6% to $4.1bn (+18.3% ex-Drakes ) $m $m % 1 Supermarket sales ex-tobacco increased 13.0% (+16.7% ex-Drakes ) Revenue (includin
Slide 9: Food – EBIT
Food – EBIT Total Food EBIT increased $14.6m or 16.5% to $103.0m Strong growth in sales volumes 1H21 1H20 Change Higher contribution from joint venture stores $m $m % There was no benefit from resolution of onerous leases in 1H21 (1H20: benefit of ~$6m) 1 Total revenue (including charge-thro
Slide 10: Food - MFuture initiatives
Food - MFuture initiatives Store Store Private Low cost clarity network label operator New IGA brands and channel Further strengthening of network Community Co continues to be New Distribution Centre in SA standards developed with retailer underpinned by strong sales growth well supported by
Slide 11: Liquor – sales
Liquor – sales 1H21 1H20 Change Total sales (including charge-through) increased 14.3% to $2.0bn reflecting: $m $m % Strong demand in retail network, more than offset: Total revenue as per Statutory Accounts 2,035.5 1,781.0 14.3% Adverse impact of COVID-19 trading restrictions on ‘on-premise’
Slide 12: Liquor – EBIT
Liquor – EBIT 1H21 1H20 Change EBIT increased $9.4m or 30.6% to $40.1m $m $m % Contribution from strong sales growth 1 Total revenue (including charge-through) 2,039.1 1,784.2 14.3% Costs continued to be well managed despite additional expenditure related to COVID-19 EBIT 40.1 30.7 30.6% EBI
Slide 13: Liquor - MFuture initiatives
Liquor - MFuture initiatives Digital Store On- Private & network premise Exclusive label Continued rollout of ‘Shop My Strong focus on further improving ‘On-premise’ customers at Developed and commenced Local’ online offer – launched April network competitiveness (range, various stages of re
Slide 14: Hardware – sales
Hardware – sales Total sales (including charge-through) increased 20.6% to $1.3bn, with 1H21 1H20 Change significant growth in DIY sales $m $m % Excluding acquisitions1, total sales increased 16.2% Total revenue as per Statutory Accounts 759.3 599.9 26.6% Strong DIY sales underpinned by: Charg
Slide 15: Hardware – EBIT
Hardware – EBIT 1H21 1H20 Change EBIT increased $25.6m or 65.8% to $64.5m, reflecting: $m $m % Significant increase in sales volumes Total revenue2 (including charge-through) 1,258.9 1,044.2 20.6% Increased weighting of higher margin DIY in sales mix Acquisitions1 contributed $8.5m to earnin
Slide 16: Hardware - MFuture initiatives
Hardware - MFuture initiatives Sapphire Build Grow Digital & Program Trade retail Trade network technology Modernises store look, delivers Total Tools acquisition – largest Company-owned retail network Click & Deliver added to Click & Collect greater range and space to professional tool reta
Slide 17: New distribution centre in SA
New distribution centre in SA Opened new 68,000m2 purpose built DC at Gepps Cross in December 2020 despite COVID-19 related challenges Replaces aged, range constrained and inefficient existing facility and unlocks potential for higher teamwork scores and greater efficiencies for the retail netwo
Slide 18: Financials
Financials Brad Soller Group Chief Financial Officer 18 18 FY20 Full Year Results
Slide 19: Profit & Loss
Profit & Loss 1H21 1H20 Change $m $m % Sales revenue 7,059.7 6,289.8 12.2% EBITDA 280.9 234.7 19.7% Depreciation and amortisation (77.9) (79.0) 1.4% EBIT 203.0 155.7 30.4% Net finance costs (21.3) (27.0) 21.1% Profit before tax and NCI 181.7 128.7 41.2% Tax (51.7) (37.6) 37.5% Non-controlling intere
Slide 20: Cashflows
Cashflows 1H21 1H20 $m $m Net cash from operating activities 314.9 88.8 Net cash used in investing activities (102.1) (29.8) Capital expenditure (30.4) (30.5) Acquisitions of businesses (101.1) (23.2) Receipts from subleases 22.2 21.4 Proceeds from sale of assets/businesses and net loan movements 7.
Slide 21: Balance Sheet
Balance Sheet 31 October 2020 30 April 2020 31 October 2019 $m $m $m Trade receivables and prepayments 1,660.9 1,559.0 1,526.2 Inventories 1,109.1 1,032.2 1,061.0 Trade payables and provisions (2,445.5) (2,181.9) (2,333.6) Net working capital 324.5 409.3 253.6 Intangible assets 666.7 581.8 586.4 Pro
Slide 22: Net debt/cash
Net debt/cash 1H21 FY20 Debt Facility Maturity Profile $m $m 400 Net debt 350 Gross debt - (188.4) 300 Cash and cash equivalents 172.5 275.1 250 Net cash 172.5 86.7 200 $m 150 Debt metrics and ratios 100 50 Weighted average maturity of debt facilities 2.0 years 1.8 years 1 0 Weighted average cost of
Slide 23: Total Tools
Total Tools Acquisition of 70% stake in Total Tools Holdings (‘TTH’) completed 1 September 2020 Purchase price ~$57m based on normalised earnings excluding COVID-19 related uplift 1H21 includes two months trading from TTH Sales of $18.6m and EBIT of $4.8m Network at end of 1H21 comprised 8
Slide 24: Dividend
Dividend FY21 interim dividend of 8.0 cents per share, fully franked (1H20: 6.0 cents) Ex-dividend date: 22 December 2020 Record date: 23 December 2020 Payment date: 29 January 2021 Dividend payout ratio ~60% of underlying profit after tax for 1H21, in line with current policy 24 FY21 Half
Slide 25: Group outlook
Group outlook 25 25 FY20 Full Year Results
Slide 26: Outlook
Outlook Group Strong start to 2H21 with sales momentum continuing in all Pillars in the first five weeks of 2H21 Subject to an adverse change in government restrictions, trading is expected to benefit from more people travelling domestically over the Christmas/New Year period and our retail netw
Slide 27: Outlook
Outlook Liquor Liquor sales in the first five weeks of 2H21 up 16.9% with continued elevated demand in the retail network more than offsetting the adverse impact of COVID-19 restrictions on ‘on-premise’ customers. ‘On-premise’ customers have started to recover in States with easing restrictions
Slide 28: Appendices
Appendices 1 Financial history 2 Bannered store numbers 28 28 FY20 Full Year Results
Slide 29: 1. Financial history
1. Financial history 1H21 1H20 1H191 1H181 1H171 1H161 Financial Performance Sales revenue ($m) 7,059.7 6,289.8 6,189.2 6,054.8 5,743.7 5,698.5 EBIT ($m) 203.0 155.7 158.1 156.3 132.1 140.7 Net finance costs ($m) (21.3) (27.0) (14.5) (15.2) (16.9) (19.8) Underlying profit after tax ($m) 129.6 90.6 1
Slide 30: 2. Bannered store numbers
2. Bannered store numbers October April 2020 2020 Pillar Supermarkets 1,612 1,623 Campbells 16 16 Liquor 2,790 2,679 Hardware 730 650 Total 5,148 4,968 Supermarkets Campbells Liquor Hardware Total Store movement Number of stores at April 2020 1,623 16 2,679 650 4,968 Stores opened / joined banner gr
Slide 31: 2. Bannered store numbers
2. Bannered store numbers October April 2020 2020 Supermarkets Supa IGA 324 323 IGA 785 789 IGA-Xpress 221 225 Total IGA bannered stores 1,330 1,337 Friendly Grocer/Eziway 282 286 Total Supermarkets 1,612 1,623 Liquor Cellarbrations 553 543 Bottle-O & Bottle-O Neighbourhood 248 232 IGA Liquor 474 47
Slide 32: Disclaimer
Disclaimer This presentation contains summary information about Metcash Limited (ABN 32 112 073 480) (Metcash) and its activities current as at the date of this presentation. The information in this presentation is of general background and does not purport to be complete. It should be read in conju
Slide 33: Food Liquor Hardware
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