B&m European Value Retail Plc · LSE:BME
B&m European Value Retail — H1 FY23 Earnings Presentation
24 slides from B&m European Value Retail's earnings presentation, November 2022
Slide 1: FY23 Interim Results Presentation
B&M European Value Retail S.A FY23 Interim Results Presentation 26 weeks to 24 September 2022
Slide 2: H1 FY23 Group Highlights
H1 FY23 Group Highlights • Group revenues increased by +1.8% year-on-year to £2,309m, or +29.1% on a 3-year basis ➢ Total sales for B&M UK fell by (6.0)% in Q1 and rose +5.0% in Q2 ➢ B&M UK LFL decreased in H1 (3.9)% vs FY22, Q2 LFLs were +2.0%, compared with (9.1)% in Q1, which was affected by the
Slide 3: Pete Waterhouse, Group Financial Controller
Pete Waterhouse Group Financial Controller Ref: 750493 3
Slide 4: Summary Profit and Loss
Summary Profit and Loss £ millions, H1 FY23 H1 FY22 YoY Change H1 FY20 3YoY Change Group Stores (number) 1,129 1,097 2.9% 1,034 9.2% Revenue 2,309 2,268 1.8% 1,789 29.1% Gross Profit 808 848 (4.7)% 614 31.7% % 35.0% 37.4% (240) bps 34.3% 70 bps Operating Costs (576) (566) 1.8% (462) 24.7% Pre-IFRS16
Slide 5: Group Revenue Bridge
Group Revenue Bridge H1 REVENUE FY22-FY23 Net New Stores £70m HIGHLIGHTS • Total Group revenue growth of +1.8% 29 2,309 • B&M UK revenue declined (0.9%) overall 2,268 30 15 61 • New store programme delivered £70m, offsetting (6 ) (4) the (3.9%) LFL decline (74) (10 ) • Q2 LFLs were up +2.0% as perfo
Slide 6: Group Adjusted EBITDA Bridge
Group Adjusted EBITDA Bridge ADJUSTED EBITDA BRIDGE H1 FY22-FY23 Group 12.4% 10.0% Margin % B&M UK 13.5% 10.6% Margin % B&M France Margin % 7.3% 9.6% B&M UK 282 fascia only £ millions, 232 1 7 7 2 1 6 (74 ) Ref: 750493 6
Slide 7: Group Interest Expense
Group Interest Expense YoY £ millions, KEY HIGHLIGHTS H1 FY23 H1 FY22 change Cash Interest Expense 18 11 54.2% Amortised Fees 1 1 22.6% • Group retains strong liquidity with key tranches of debt Interest Income - - - not due until 2025 and 2028 Adjusted Net Interest 19 12 51.8% • Ongoing adjusted ne
Slide 8: Cash Flow Generation Is Strong
Cash Flow Generation Is Strong OPERATING CASH FLOW £m COMMENTARY H1 FY23 H1 FY22 H1 FY20 • Operating cash flow of £228m compared with £68m in Adjusted EBITDA (pre-IFRS16) 232 282 151 the previous year Change in Working Capital 41 (171) (57) • New store Capex of £16m spent on opening 21 gross new New
Slide 9: Alex Russo, Chief Executive Officer
Alex Russo Chief Executive Officer Ref: 750493 9
Slide 10: Strong Growth vs Pre-Pandemic Levels
Strong Growth vs Pre-Pandemic Levels H1 GROUP REVENUE (£M) H1 GROUP ADJUSTED EBITDA (£M) AND MARGIN 3,000 300 +29% 282 3-year 2,500 growth 250 +53% 232 2,268 2,309 3-year 2,000 200 growth 1,789 1,500 150 151 1,000 100 500 50 8.5% 12.4% 10.0% 0 0 H1 FY20 H1 FY22 H1 FY23 H1 FY20 H1 FY22 H1 FY23 Ref: 7
Slide 11: Performance by Fascia
Performance by Fascia H1 H1 YoY H1 3YoY FY23 FY22 change FY20 change HIGHLIGHTS Group Stores (number) 1,129 1,097 2.9% 1,034 9.2% B&M UK 704 686 2.6% 645 9.1% • Overall Group sales densities significantly higher than Heron Foods 314 307 2.3% 290 8.3% B&M France 111 104 6.7% 99 12.1% pre-pandemic lev
Slide 12: Group Gross Margin
Group Gross Margin GROUP GROSS MARGIN (%) KEY HIGHLIGHTS Gross margin decline driven by B&M UK markdowns in the • Gross margin decline with the main driver a reduction in garden category B&M UK’s trading gross margin - this reduced by 213 bps to +70 34.9% from 37.0% bps 37.4% • Grocery gross margin
Slide 13: Operating Costs by Fascia
Operating Costs by Fascia H1 H1 YoY H1 3YoY KEY HIGHLIGHTS £ millions, FY23 FY22 change FY20 change B&M UK 452 455 (0.6)% 358 26.3% • In the core B&M UK fascia, operating costs were well Heron Foods 60 51 17.6% 47 28.1% managed, broadly flat YoY as a % of revenue B&M France 64 60 6.9% 57 11.7% Adjus
Slide 14: B&M UK: LFL Sales in H1 FY23
B&M UK: LFL Sales in H1 FY23 H1 FY23 SALES LFL COMMENTARY 14% • On a 1-year basis, LFL sales decreased (3.9)% in the first half of the year 10% • In Q1 - the decline of (9.1)% was affected by the exceptionally strong seasonal sales in the comparative 6% period 2% • Q2 LFL sales increased by +2.0%; L
Slide 15: B&M UK: Q2 Category LFL Performance
B&M UK: Q2 Category LFL Performance A A B B C C D D E E F F G G H H I I J J M M N N O O P P Q Q -15% -5% 5% 15% 25% 35% 45% -30% -25% -20% -15% -10% -5% 0% 5% Ref: 750493 15
Slide 16: B&M UK: Grocery & Non-Grocery Highlights
B&M UK: Grocery & Non-Grocery Highlights GROCERY • Our price position remains consistently strong against the competition • Supplier collaboration is very strong in driving volume growth • Stock availability consistently strong NON-GROCERY • Direct sourcing model and strong supplier relationships ma
Slide 17: B&M UK: Store Standards & Store Openings
B&M UK: Store Standards & Store Openings STORE STANDARDS H1 FY23 OPENINGS Strong focus on our retail standards through a clear scoring metric Continued investment in new stores remains but also a focus on independent from our field teams. relocations and expansions of the current store portfolio whe
Slide 18: B&M France: Proposition Highlights
B&M France: Proposition Highlights CATEGORY STRATEGY • Grocery departments lead the LFL growth thanks to a new category mix & new partnerships with leading brands such as L’Oreal, Nestlé, Ferrero and Mars • Food categories such as confectionery, soft drinks and pantry goods are driving footfall and
Slide 19: B&M France: Operational Standards
B&M France: Operational Standards STORE STANDARDS • Gradual increase of the share of company operated stores vs mandated managers operated stores (31 out of 111 total) • Transport and distribution continues to improve service levels with good operational flexibility • Focus on availability of best s
Slide 20: B&M France: Growth
B&M France: Growth H1 FY23 OPENINGS • 4 new store openings, 3 on 2,500 sqm format, 1 on 2,000sqm concept • Paris region (Flins) • Lyon region (Saint Bonnet) • East (Haguenau) • Centre (Moulins) • All 4 new stores are company operated • High contribution stores • Future store pipeline continues to bu
Slide 21: Heron Foods: Proposition Highlights
Heron Foods: Proposition Highlights AMBIENT CHILLED • Big brands, low prices • Big brands, low prices • Full focus on our ‘key’ categories of confectionary, soft • Price investment across key categories to increase drinks and crisps shopper numbers • Increased the ambient range to have a more compel
Slide 22: Heron Foods: Proposition Highlights
Heron Foods: Proposition Highlights FROZEN • Big brands, low prices • Full focus on ‘clearance’ and one-off footfall driving promotional activity • Collaborative and transactional relationships with suppliers to ensure we are getting the best products • ‘Meal deal’ focus as a point of difference in
Slide 23: Heron Foods: Operational Standards
Heron Foods: Operational Standards STORE STANDARDS • Great standards and availability = great sales • Show the value, show the deal, every product has a price • Order accuracy to sales, promotions, best sellers, accurate stock files • Chase the gaps! • Increase range & space through new fixturisatio
Slide 24: Outlook for H2 FY23
Outlook for H2 FY23 • Well positioned for Golden Quarter with the right stock availability across the business • In the first six weeks of Q3, B&M UK LFL sales have risen +2.5% with strong momentum in France • Gross margin is expected to improve in H2 as our stock position is well controlled and Aut
B&M European Value Retail — H1 FY23 Earnings Presentation on 6ix