Myer Holdings Limited · ASX:MYR
Myer — FY2014 Earnings Presentation
31 slides from Myer's earnings presentation, Sep 11, 2014
Slide 1: Full Year Results ASX & Media Release: FY2014 Financial Overview
ASX & Media Release Thursday 11 September 2014 Myer Full Year Results ending 26 July 2014 Continued comparable store sales growth and significant investment for future growth Full Year 2014 Financial Overview Sales FY2014 total sales flat at $3,143 million, up 1.2% on a comparable store sales basi
Slide 2: CEO comments and FY2014 operational performance
“Recognising Myer’s continued strong cash generation and stable balance sheet, the Board has determined a final dividend of 5.5 cents per share, taking the full year dividend to 14.5 cents per share fully franked. “Myer is positioned to deliver an anticipated improvement in sales in FY2015 benefitin
Slide 3: Category performance, margins and costs
M.A.C Cosmetics, Benefit, and Chanel. This was achieved despite ongoing price deflation in the category. Women’s Footwear and Handbags, Miss Shop (Youth) and Appliances also performed strongly. Online sales growth of more than 100 percent and an increase in average online transaction value during th
Slide 4: Balance sheet, dividend and outlook
Balance sheet and dividend Net debt finished the year slightly up at $348 million (FY2013: $340 million). Excluding the $33 million payment for the remaining 35 percent stake in sass & bide in September 2013, net debt would have dropped 7.3 percent to $315 million. The Board has determined a final d
Slide 5: For further information please contact
For further information please contact: Investors: Davina Gunn, Myer Investor Relations Manager, +61 (0) 400 896 809 Olivia Reith, Myer Investor Relations Manager, +61 (0) 438 101 789 Media: Amanda Buckley, General Manager Corporate Affairs, +61 (0) 438 101 081 Analyst and Investor briefing: A brief
Slide 6: Table 1: Income Statement for the 52 weeks to 26 July 2014
Table 1: Income Statement for the 52 weeks to 26 July 2014 FY 2014 FY 2013 Change Actual Actual vs. LY $m $m Total Sales Value 3,143.0 3,144.9 (0.06%) Concessions 491.5 485.7 +1.19% Myer Exclusive Brands 638.2 627.5 +1.71% Other 2,013.3 2,031.7 (0.91%) Operating Gross Profit1 1,285.9 1,304.5 (1.43%)
Slide 7: Table 2: Balance Sheet as at 26 July 2014
Table 2: Balance Sheet as at 26 July 2014 July 2014 July 2013 Actual Actual $m $m Inventory 377 364 Other Assets 47 54 Less Creditors (428) (388) Less Other Liabilities (191) (224) Net Trading Investment (195) (194) Property 25 26 Fixed Assets 478 483 Tangible Funds Employed 308 315 Intangibles 933
Slide 8: Full Year Results
MYER Full Year Results 2014 FULL YEAR RESULTS Thursday 11 September 2014 BERNIE BROOKES CEO and Managing Director MARK ASHBY Chief Financial Officer Image: Wayne by Wayne Cooper (Myer Exclusive Brand) FY2014 Results Overview Financial update Delivering our strategy Outlook 11 September 2014 1
Slide 9: FY2014 overview and operational highlights
MYER Full Year Results 2014 FY2014 overview • Maintained total sales despite significant disruption – Four top 25 stores under refurbishment, two store closures • Pleasingly, LFL sales growth in eight of last nine quarters, strong Q4 • Operating gross profit impacted by several factors – AUD depreci
Slide 10: FY2014 financial overview
MYER Full Year Results 2014 FY2014 Results Overview Financial update Delivering our strategy Outlook FY2014 financial overview • Total sales flat at $3,143 million, up 1.2% on a comparable store sales basis • Q4 total sales up 2.1% on a comparable store sales basis • Operating gross profit margin do
Slide 11: Financial summary
MYER Full Year Results 2014 Financial summary FY2014 vs. FY2013 Solid sales result despite disruption from refurbishments at four Sales $3,143m -0.06% top 25 stores, FY2014 LFL sales up 1.2%. Pleasing Stocktake sale result with Q4 LFL sales +2.1% Drop reflects a number of factors including impact of
Slide 12: FY2014 sales performance and operating gross profit
MYER Full Year Results 2014 FY2014 sales performance Sales drivers: Sales growth ($) and mix (%) • Myer Exclusive Brands and Concessions growth, new stores, online, +$5.8m new brands, sass & bide -$18.4m 15.6% • LFL sales growth in 8 of last 9 quarters, strong growth in Q4 • Best performing states:
Slide 13: Cash cost of doing business and capital expenditure
MYER Full Year Results 2014 Cash cost of doing business Cash CODB* increases: • Labour – Annualisation of transition of store wages penalty structure – Targeted investment in additional store labour hours • Occupancy – Market rent reviews, annualised new store costs, outgoings, store closure and ref
Slide 14: Highly cash generative; disciplined inventory management
MYER Full Year Results 2014 Highly cash generative $(m) FY2014 FY2013 Operating cash flow 262.8 300.2 Cash conversion 104.0% 98.6% Tax (49.3) (48.3) Interest (21.4) (25.0) Net cash capex paid (67.9) (67.4) (post landlord contribution) Acquisitions (36.9) (0.9) Cash flow before financing activities 8
Slide 15: Credit metrics remain strong; FY2014 in summary
MYER Full Year Results 2014 Credit metrics remain strong Key credit metrics 26 July 2014 Bank covenants Net debt / EBITDA 1 1.38x <2.5x Fixed charge cover 1, 2 1.98x >1.65x Shareholders’ equity $893m >$500m 1 Calculated on a 12 month rolling basis 2 Fixed charge cover is calculated as EBITDAR / net
Slide 16: Delivering our strategy
MYER Full Year Results 2014 FY2014 Results Overview Financial update Delivering our strategy Outlook Image: Sportscraft Delivering our strategy Improve customer service Enhance our merchandise offer Strengthen our loyalty program Build a leading omni-channel offer Optimise our store network Image: M
Slide 17: Improve customer service
MYER Full Year Results 2014 Improve customer service Service initiatives • ‘Feedback ASAP’ digital customer interactions exceeded 42,000 • Improved customer satisfaction as measured by Net Promoter Score • Commenced roll-out of enhanced theatre and experiences in-store • Personal shopping now in 29
Slide 18: Improve customer service; enhance our merchandise offer
MYER Full Year Results 2014 Improve customer service Efficiency initiatives • Focus on process efficiencies to allow team members to spend more time with customers • Online booking system for services including personal shopping and in store services • New initiative to improve stock flow now in 13
Slide 19: Enhance our merchandise offer: Myer Exclusive Brands
MYER Full Year Results 2014 Enhance our merchandise offer Optimising the Myer Exclusive Brands strategy • Re-engineering of Myer Exclusive Brands portfolio − Focus on key master brands that span multiple categories supported by improved marketing − Consolidation of certain brands, small number of br
Slide 20: New brands; strengthen our loyalty program
MYER Full Year Results 2014 Leading brands recently introduced at Myer ALEX PERRY BY JOHNNY M.J. BALE LITTLE JOE WOMEN L LISA HO Strengthen our loyalty program • A leading Australian loyalty program with $2,162 million in sales • Over $50 million in Rewards Cards distributed in FY2014 • Average spen
Slide 21: Build a leading omni-channel offer
MYER Full Year Results 2014 Build a leading omni-channel offer Solid progress on delivering omni-channel strategy • Online sales more than doubled – Supported by improved customer engagement and average transaction value growth • Website visits grew by 74 percent to over 38 million visits • Sales vi
Slide 22: Build a leading omni-channel offer: MyCustomer Orders
MYER Full Year Results 2014 Build a leading omni-channel offer MyCustomer Orders • iPads with a customised Myer ‘app’ - Significantly expanded range available to customers in every store - Provides a new sales channel for team members in stores - App provides customer information and order capabilit
Slide 23: Optimise our store network
MYER Full Year Results 2014 Optimise our store network • Four significant refurbishments either completed or well progressed − Space handed back to landlord to improve productivity − Enhanced layouts and merchandise offer with introduction of new brands • Store closures: Dandenong (October 2013), El
Slide 24: Optimise our store network: refurbishments
MYER Full Year Results 2014 Adelaide Refurbishment Indooroopilly Refurbishment Optimise our store network • Continued improvement in SLA/GLA ratio via: 1. Productive new stores 2. Refurbishments 3. Store closures 4. Space hand backs • Continued growth in comparable sales per square metre • 18 major
Slide 25: Senior management renewal
MYER Full Year Results 2014 FY2014 Results Overview Financial update Delivering on our strategy Outlook Image: Sportscraft Senior management renewal Christopher Colfer CEO sass & bide Years experience: 22 Former roles: extensive international luxury goods experience including CEO Alfred Dunhill Ltd
Slide 26: FY2015 key strategic priorities
MYER Full Year Results 2014 Strong leadership team OUTLOOK / 37 FY2015 key strategic priorities Customer • Strengthen frontline management capability in store service • Enhance in-store theatre program • Further improve Net Promoter Score Merchandise • Enhanced design, speed to market, product devel
Slide 27: Sales growth and accelerating investment in FY2015
MYER Full Year Results 2014 Sales growth in FY2015 • Anticipated sales growth underpinned by: − Full benefit of refurbished Adelaide and Indooroopilly stores − Additional space at our Melbourne City store − Opening of two new stores before Christmas (Mt Gravatt and Joondalup), partly offet by annual
Slide 28: FY2015 outlook
MYER Full Year Results 2014 FY2015 outlook • Anticipate sales growth • Modest growth in operating gross profit margin driven by: − Improved sourcing − Mix benefit of Myer Exclusive Brands growth − Offset by lower average exchange rate • Committed to investing in the business • Strong cash generation
Slide 29: Current store network; indicative new stores schedule
MYER Full Year Results 2014 Current store network Indicative new stores* By anticipated opening FY2015 FY2016 FY2017 Existing stores * Subject to variation and review APPENDIX / 43 Indicative new stores schedule* Size Centre Estimated Metro Growth Regional Store State Year (GLA Landlord MAT2 catchme
Slide 30: Historical sales including concessions
MYER Full Year Results 2014 Historical sales including concessions 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Total sales 688.0 1,044.4 652.5 759.9 691.1 1,046.0 646.5 759.4 $m* Total Sales +1.0% +2.1% +0.5% -0.8% +0.4% +0.2% -0.9% -0.1% growth LFL sales +0.8% +1.7% +0.4% -1.6% +0.4% +1.7% +0.2% +2.1%
Slide 31: Disclaimer
MYER Full Year Results 2014 Disclaimer All numbers are unaudited. The financial information includes non-IFRS information which has not been specifically audited in accordance with Australian Accounting Standards but has been extracted from the Preliminary Full-Year Financial Report (Appendix 4E). T