B&M European Value Retail PLC · LSE:BME
B&M European Value Retail — H1 FY2016 Earnings Presentation
22 slides from B&M European Value Retail's earnings presentation, November 2015
Slide 1: Interim Results Presentation
B&M European Value Retail SA Interim Results Presentation 26 weeks to 26th September 2015
Slide 2: FY16 H1 Group Highlights
FY16 H1 Group Highlights GROUP HIGHLIGHTS • Group revenues increased by 25.8% to £930.3m • 47 net new stores opened in the UK, on track for 80 this financial year • German business, Jawoll opened 2 new stores, with 3 more openings before Christmas • UK LFL revenues +1.2% • Group adjusted EBITDA incr
Slide 3: Paul McDonald, Chief Financial Officer
Paul McDonald Chief Financial Officer Ref: 750493 3
Slide 4: Summary Profit Before Tax
Summary Profit Before Tax £ millions, H1 2015A H1 2016A % Group Stores 442 524 Revenues 739.8 930.3 25.8% Gross Profit 256.4 320.6 25.0% % 34.7% 34.5% (20)bps Operating Costs (183.4) (234.0) 27.6% Adjusted EBITDA 73.0 86.6 18.6% % 9.9% 9.3% (55)bps Depreciation and Amortisation (7.2) (9.5) 31.4% Int
Slide 5: Group Revenue Bridge
Group Revenue Bridge £ millions, REVENUE H1 2015A-2016A KEY HIGHLIGHTS 173 • +26.8% revenue growth at constant currency 10 930 • Annualisation of net 52 stores in FY2015 8 73 • 47 net new stores opened in the UK in H1 FY2016 100 • UK New Store revenue growth £173m (+25.4%) • UK LFL revenue growth £8
Slide 6: Strong EBITDA Growth
Strong EBITDA Growth £ millions, ADJUSTED EBITDA BRIDGE H1 2015A-2016A Group 9.9% 9.3% Margin % 17 8 1 1 87 9 73 (2) (3) (1) H1 2015 FY Effect of Net New LFL Gross Profit Other Germany Currency H1 2016 FY15 Openings Stores Note 1: Other is largely central overheads Note 2: Currency reflects the tran
Slide 7: Positive LFL Sales Growth
Positive LFL Sales Growth UK QUARTERLY LFL SALES GROWTH H1 +1.2% 7.9% 7.3% 6.2% 6.0% 4.9% 4.5% 3.7% 3.4% 1.1% 1.3% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Ref: 750493 7
Slide 8: Gross Margin Trend
Gross Margin Trend GROSS MARGIN (%) KEY HIGHLIGHTS 34.7% • 20 bps reduction in gross margin to 34.5% and in line with 34.5% guidance • UK margins have reduced by 11 bps, impact of adverse US$ rates, helped in part by favourable sales mix • Jawoll margins have reduced by 116 bps, largely due to €/$ •
Slide 9: Operating Costs
Operating Costs £ millions, KEY HIGHLIGHTS • UK Operating Costs increased to support store growth H1 2015A H1 2016A Total UK 168.2 216.4 • As previously guided, additional central costs have been Germany 15.2 17.6 incurred as result of the 800,000 sq ft increase in Distribution Centre capacity, whic
Slide 10: Exceptional Items
Exceptional Items £ millions, KEY HIGHLIGHTS H1 2015A H1 2016A IPO Costs / Restructuring Fees 21.3 - • New store pre-opening costs have grown in line with Jawoll Acquisition Fees 0.8 - activity Fair Value Movements 0.2 (5.5) Pre-Opening Costs 2.0 4.5 • UK store openings 49 (47 net of closures) versu
Slide 11: Interest Expenses
Interest Expenses £ millions, KEY HIGHLIGHTS H1 2015A H1 2016A Interest 11.6 10.0 FRS4 Fees 1.2 0.7 Total 12.8 10.7 • Interest and FRS4 fees relating to the bank debt Put/Call Option - 0.5 • Non-cash impact, £0.5m of IFRS accounting for Jawoll put Fees Write Off 28.8 - / call option over managements
Slide 12: Strong Cash Flow Conversion and De-leveraging
Strong Cash Flow Conversion and De-leveraging £ millions, OPERATING CASH FLOW CASH FLOW STATEMENT £m H1 2015A H1 2016A 48 49 Adjusted EBITDA 73.0 86.6 Change in Working Capital (25.3) (37.9) 35 New Store Capex (6.5) (24.9) Infrastructure Capex (2.1) (4.8) 17 Maintenance Capex (3.9) (2.4) Capex (12.4
Slide 13: Simon Arora, Chief Executive Officer
Simon Arora Chief Executive Officer Ref: 750493 13
Slide 14: A Very Large Addressable Market
A Very Large Addressable Market SPECIALIST RETAILERS £127bn¹ £157bn¹ £7bn¹ FOOD RETAILERS GENERAL MERCHANDISE DISCOUNTERS Ref: 750493 1 Source: Euromonitor; refers to 2013 UK store-based retail value sales (RSP) excluding sales tax. 14
Slide 15: B&M Still Regional and not National
B&M Still Regional and not National 373 STORES AS AT MARCH 2014 472 STORES AS AT SEPTEMBER 2015 STORES PER 100,000 POPULATION 1.5 to 2.0 1.0 to 1.5 0.5 to 1.0 0 to 0.5 Ref: 750493 Source: Management information. 15
Slide 16: Expansion in both Infill and New Regions
Expansion in both Infill and New Regions YTD FY2016 OPENINGS HIGHLIGHTS • We have opened 47 net new stores, of which only 20 were in the South Deliberate impact on the LFL estate: H1 LFL excluding • Stores coming equally from ‘Retailers Rightsizing’, this impact is +2.5% Lease expiries and Newbuild
Slide 17: B&M UK Store Target is 850 Stores
B&M UK Store Target is 850 Stores UK COVERAGE - 472 STORES AS AT 26 SEPTEMBER 2015 4,379 RETAIL CATCHMENTS SCREENED Proximity to Existing B&M Store Transport / Factory Outlet Population Density Population Affluence Competitive Intensity High Rent STORES PER 100,000 POPULATION UK STORE TARGET : 850 1
Slide 18: New Store Returns
New Store Returns £ millions, FY2013 AND FY2014 STORE OPENINGS1 RAPID MATURITY PROFILE - 52 WEEK REVENUE FOR NEW STORES Average Revenue per Store £4.4m Our Week 53 LFL 160 methodology means reported LFL is depressed by Store EBITDA² £0.7m c. 50 bps in the following year Seasonally adjusted weekly re
Slide 19: Product Highlights
Product Highlights • Grocery / FMCG remains positive LFL, although the environment remains deflationary • We continue to maintain the price advantage on grocery / FMCG products • Indoor furniture ranges in the new larger stores performing well • Continued product innovation on grocery and general me
Slide 20: Investment in Infrastructure
Investment in Infrastructure UK REVENUE GROWTH H1 WAREHOUSE EXPANSION UK revenue growth +27% Existing New £862m £681m Middlewich Sept-15 450k H1 2015 H1 2016 sq ft Runcorn Jun-15 360k sq ft UK COLLEAGUE GROWTH • Strengthened our pool of store managers in training with over 60 new starters • Moved fr
Slide 21: International Expansion - Jawoll
International Expansion - Jawoll KEY HIGHLIGHTS NEW STORE OPENINGS SINCE ACQUISITION • Stable trading performance, with some gross margin impact from weaker € • 6 new stores to open this calendar year • Increased penetration of direct sourced products for the Autumn / Winter season Soltau Head Offic
Slide 22: Outlook for 2016
Outlook for 2016 • Group grew revenues by 25.8%, with a record 47 UK net new stores opened. Some deliberate impact on LFL sales metric but strong financial returns from these new stores • Two additional UK DC's, totalling 800,000 sq ft, operational from Q2 with some short term disruption to store se
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