Myer Holdings Limited · ASX:MYR
Myer — FY2011 Earnings Presentation
31 slides from Myer's earnings presentation, Sep 15, 2011
Slide 1: Full Year Results for 2011 ASX & Media Release
ASX & Media Release Full Year Results for 2011 Strong foundations deliver a solid result Stable EBIT margin of 8.20% Net profit after tax of $162.7 million Final dividend of 11.5 cents, fully franked Thursday 15 September 2011 Financial highlights (52 weeks to 30 July 2011) (see footnote on page 9)
Slide 2: CEO commentary on the results
Bernie Brookes, Chief Executive Officer commented on the results: “To deliver an NPAT result of $162.7 million in this challenging trading environment is a credit to the strong management team and contribution of our 13,000 team members. Challenging retail environment “In this context, I am pleased
Slide 3: Multi-channel offer and financial performance
“We are well progressed in developing a fully integrated multi-channel offer for consumers, including our stores, online and mobile. The redevelopment of our digital and online offer will deliver a new e-commerce site, MYER one personalisation, click and collect in stores, a private shopping club fo
Slide 4: Strong balance sheet
Strong balance sheet We maintained our focus on inventory management during the period. Taking into account stock held for our new store at Robina and the expanded Myer Melbourne, conversion of our music and DVD offering to wholesale, sass & bide and early delivery of summer FY2012 stock, inventory
Slide 5: Improving customer service remains a top priority
Improving customer service remains a top priority We remain strongly committed to improving customer service. We have implemented a comprehensive program comprising a number of initiatives including additional selling hours in high-service categories such as footwear, intimate apparel, and men’s sui
Slide 6: Strong performances in wholesale and Myer Exclusive Brands
There were a number of strong performances in the wholesale business, including Bonds, Berlei, Seafolly, Apple and the cosmetics brands MAC Cosmetics and Chanel. Also in Cosmetics, there was a particularly strong performance by Benefit, which saw strong growth in both product sales and services incl
Slide 7: Supply chain efficiencies and marketing
We have continued to gain efficiencies from the significant investment in our supply chain. During 2011, we have reduced shipping lead-times from Asia to below 24 days. MARKETING Integrated Marketing and Loyalty The overall marketing spend was consistent with last year however we have continued to r
Slide 8: Outlook and guidance for 2012
The challenging sales environment makes guidance very difficult. During 2012, we face a number of additional costs which have been factored into our guidance. Increases in store occupancy, depreciation, renegotiated Enterprise Bargaining Agreement (EBA) and penalty rates and loadings initiated by Fa
Slide 9: Consolidated Profit and Loss Statement
Table 1 – Consolidated Profit and Loss Statement for the 52 weeks to 30 July 2011 FY 2011 FY 2010 % FY 2010 % Change Change vs. Actual Proforma vs. LY Actual FY 2010 Proforma $m $m $m Total Sales 3,158.8 3,283.6 (3.8) 3324.2 (5.0) Wholesale 2706.9 2840.0 (4.7) 2,874.3 (5.8) Concession 451.9 443.6 1.
Slide 10: Balance Sheet, Statistics and Financial Ratios
Table 2: Balance Sheet as at 30 July 2011 July 2011 Actual July 2010 Actual $m $m Inventory 381 353 Other Assets 80 97 Less Creditors (416) (438) Less Other Liabilities (281) (230) Net Trading Investment (235) (218) Property 27 28 Fixed Assets 508 440 Tangible Funds Employed 300 251 Intangibles 944
Slide 11: 2011 Full Year Results Agenda
15/09/2011 2011 Full Year Results 15 September 2011 Agenda • Overview • Financial review • Operating update • Delivering our plan • Outlook 2 1
Slide 12: Solid result in challenging environment
15/09/2011 Solid result in challenging environment • Sales* down 3.8% to $3.159 billion • Gross profit margin up 63bps to 40.26% • Strong cost control: cash CODB down 3.4% • EBITDA margin up 50bps to 10.70% • Stable EBIT margin of 8.20% • NPAT* $162.7 million, down 3.6% • Final dividend of 11.5 cps
Slide 13: Strong foundations ensured resilience
15/09/2011 Strong foundations ensured resilience • Significantly improved technology, supply chain and store network • Strong cost, gross margin and inventory management • Comprehensive brand hierarchy including Myer Exclusive Brands (MEBs) • MYER one loyalty program “Experienced management” 5 OVERV
Slide 14: Financial highlights and ratios
15/09/2011 Financial highlights 2011 vs. 2010 Sales $3,158.8m (3.8%) Cash CODB $933.7m (3.4%) EBITDA $337.9m +0.9% EBIT $258.9m (4.4%) NPAT $162.7m (3.6%) “Key categories delivered solid result” 7 FINANCIAL REVIEW Financial ratios 2011 vs. 2010 Operating GP 40.26% +63 bps Cash CODB % 29.56% +13 bps
Slide 15: Continued improvement in OGP
15/09/2011 Continued improvement in OGP • Strengthened Myer Exclusive % Operating Gross Profit (%) 41.5 Brands 41.0 • Improved sourcing 40.5 40.26 40.0 39.80 39.63 • Reduced shrinkage 39.5 39.50 39.18 39.0 • Disciplined inventory control 38.5 • Optimised promotions 38.0 37.5 • Better mix and space u
Slide 16: Continued focus on costs; EBIT
15/09/2011 Continued focus on costs $m % 1150 32.47% Cash CODB Cash CODB / Sales 33 1100 31.21% 31 1050 1,068 29.95% 1,036 29.43% 29.56% 1000 29 950 976 967 934 900 27 850 800 25 FY07 FY08 FY09 FY10 FY11 11 FINANCIAL REVIEW EBIT reflects resilient business model $m % 350 Full Year EBIT FY EBIT Margi
Slide 17: Strong balance sheet; other financial impacts
15/09/2011 Strong balance sheet • Successful debt refinancing in June – Negotiated lower interest margins – Extended maturity to 3 and 4 years – Continued strong support from lenders • Significant ‘headroom’ in banking covenants • Capital expenditure $113m • Creditor days improves working capital 13
Slide 18: Financial highlights summary
15/09/2011 Financial highlights summary • Improved operating gross profit margin • Improved EBITDA margin • Stable EBIT margin • Disciplined inventory management • Strong balance sheet • Full year dividend increased “Solid financial structure ensures we are well positioned for growth” 15 FINANCIAL R
Slide 19: Operating highlights; optimising store network
15/09/2011 Operating highlights • Melbourne relaunch and two new stores • Investment in service funded by optimised promotions • Enhanced merchandise offer • Sourcing offices established in Asia • Acquisition of 65% of sass & bide • Digital marketing, social media focus 17 OPERATING UPDATE Continual
Slide 20: Strong performances by key categories
15/09/2011 Strong performances by key categories • MEBs now 17.7% of sales • Standout performer Miss Shop (Youth) • Womens and Mens apparel, Home and Cosmetics performed well • Top performing brands include: – MAC Cosmetics, Chanel, Howard Showers, Metalicus, Bonds, Benefit, Wayne by Wayne Cooper, U
Slide 21: sass & bide, Arthur Galan AG
15/09/2011 sass & bide Arthur Galan AG 21 22 11
Slide 22: VUE outdoor furniture, BIB, Jayson Brunsdon
15/09/2011 VUE outdoor furniture 23 BIB Jayson Brunsdon Black Label 24 12
Slide 23: Re-engineered Electrical category
15/09/2011 Katy Perry Fragrance Benefit 25 Re-engineered Electrical category • Strong value-add positioning with Bose,Cisco and enhanced accessories range Reduced Electrical offering impacted • Strong Apple presence sales but increased profitability 11% • Strength in Small Electrical 16% 14% 12% • N
Slide 24: Sourcing offices; integrated and targeted marketing
15/09/2011 Sourcing offices to drive MEB growth • Improved gross profit, speed to market, better control over production cycle – Shanghai office to manage China sourcing – Hong Kong office to manage other markets and new opportunities – Quality Control, Quality Assurance focus “Speed to market is es
Slide 25: Delivering our plan
15/09/2011 Agenda • Overview • Financial review • Operating update • Delivering our plan • Outlook 29 Delivering our plan Sales and profit to be driven by: • New stores and refurbishments • Further strengthen merchandise portfolio • Continue to build and strengthen MYER one • Space optimisation to i
Slide 26: Investing in customer service; multi-channel landscape
15/09/2011 Investing in customer service • Additional selling hours supported by reinvestment of savings from optimised promotions • Focus on high-service categories (footwear, apparel, intimates, men’s suiting) • Program initiatives include – Service and product knowledge – Sales based incentives t
Slide 27: Multi-channel offer
15/09/2011 Multi-channel offer Website Advertising Mobile Email STORES Digital Installations* Search Social Events Technical infrastructure Supply chain & inventory management Human resources and talent *e.g. Kiosks, interactive signage 33 DELIVERING OUR PLAN Agenda • Overview • Financial review • O
Slide 28: Outlook
15/09/2011 Outlook • Investment since 2006 delivered robust operating model • Challenging environment makes guidance very difficult • Additional costs factored in to our guidance total $48 million • Assuming current trading conditions do not deteriorate further: – We anticipate FY2012 sales to be fl
Slide 29: Appendix: Store Network
15/09/2011 Appendix 37 APPENDIX Store Network Estimated Size Centre Metro Growth Regional Store State Year Landlord Catchment (GLA sqm) MAT $mill Infill Corridor City population Mackay1 QLD FY2012 10,000 Lend Lease 287 133,000 Townsville1 QLD FY2012 12,000 Stockland 230 174,000 Fountain Gate1 VI
Slide 30: Myer's store expansion on track
15/09/2011 Myer’s store expansion on track Approved New Stores North Lakes By Anticipated Opening* Darwin Chermside Brookside Brisbane City 2012 Indooroopilly Carindale 2013 Mt Gravatt Cairns Loganholme 2014 2015 Townsville Coomera Northern Mackay Existing Stores Territory Pacific Fair Queensland Ro
Slide 31: Statutory NPAT reconciliation; Disclaimer
15/09/2011 Statutory NPAT reconciliation $m Statutory NPAT 159.7 IPO costs (After Tax) 3.5 Profit on sale financial asset (After Tax) (8.2) Store closure & restructuring costs (After Tax) 7.6 Normalised NPAT per ASX release 162.7 41 APPENDIX 41 Disclaimer This release includes “forward-looking state