52 weeks to 28 th March 2015 FY15 Group Highlights KEY HIGHLIGHTS - - PowerPoint PPT Presentation

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52 weeks to 28 th march 2015 fy15 group highlights
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52 weeks to 28 th March 2015 FY15 Group Highlights KEY HIGHLIGHTS - - PowerPoint PPT Presentation

Oct 03, 2023 50 likes •305 views

B&M European Value Retail SA Full Year Results Presentation 52 weeks to 28 th March 2015 FY15 Group Highlights KEY HIGHLIGHTS Group revenues increased by 29.5% to 1,646.8m UK revenues +20.0% with LFL revenues +4.4% Group

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B&M European Value Retail SA Full Year Results Presentation 52 weeks to 28th March 2015

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FY15 Group Highlights

  • Group revenues increased by 29.5% to £1,646.8m
  • UK revenues +20.0% with LFL revenues +4.4%
  • Group adjusted EBITDA increased by 33.6% to £174.2m
  • Group adjusted Profit before Tax increased by 55.7% to

£135.0m

  • 52 net new stores opened in the UK
  • Integration of German acquisition proceeding to plan
  • Net cashflow from operations £152.9m, an increase of

33.3%

  • Continued investment in infrastructure and a reduction

in net debt to adjusted EBITDA multiple of 2.2 times

  • Final Proposed Dividend of 2.5p per share

KEY HIGHLIGHTS

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Paul McDonald Chief Financial Officer

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Summary Profit Before Tax

£ millions, 2014 2015 % Group Stores 373 475 Revenues 1,272.0 1,646.8 +29.5% Gross Profit 432.0 569.9 +31.9% % 34.0% 34.6% 59bps Operating Costs (301.6) (395.7) +31.2% Adjusted EBITDA 130.4 174.2 +33.6% % 10.2% 10.6% 33bps Depreciation (9.7) (15.6) +60.2% Interest (33.9) (23.6)

  • 30.4%

Adjusted Profit Before Tax 86.7 135.0 +55.7% Exceptional Costs (17.7) (24.1) +36.6% Exceptional Interest Costs (65.4) (49.2)

  • 24.9%

Profit Before Tax 3.6 61.7 +1602.2% Adjusted Earnings per Share (p) 6.9 10.3 +49.2% Statutory Earnings per Share (p) (1.9) 3.4

  • Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.
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Group Revenue Bridge

REVENUE 2014-2015

£ millions

  • 52 net new stores opened in the UK
  • Prior year openings trading in line with

expectations

  • LFL revenues +4.4% against tough

comparable of +6.5% last year

  • £120.6m of revenue from Germany for the 11

months of ownership

KEY HIGHLIGHTS

121 1,272 89 110 55 1,647 2014 FY Effect FY14 Openings Net New Stores LFL Germany 2015 199

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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Strong EBITDA Growth

ADJUSTED EBITDA BRIDGE 2014-2015

10.7% UK Margin % £ millions, 10.2% 10.6% Group Margin %

30 (5) 130 14 16 8 11 174 2014 FY Effect of FY14 Openings Net New Stores LFL Other Germany 2015

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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LFL Sales Growth

UK QUARTERLY LFL SALES GROWTH

8.7% 4.7% 7.0% 6.0% 7.3% 7.9% 6.2% 4.9% 6.0% 3.7% 4.5% 3.4%

Q1-13 H2 +4.0% H2 +5.6% Q2-13 Q3-13 Q4-13 Q2-14 Q1-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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Gross Margin Trend

  • 59 bps improvement in gross margin to 34.6%
  • UK margins have improved by 41 bps driven by:
  • Strong sell through of seasonal product
  • Better buying and hence less markdown needed in

non-grocery generally

  • Impact of German acquisition has improved the overall

group gross margin by 18 bps

  • Our strategy is to maintain price leadership to drive

growth 34.0% 34.6% 2014 2015

GROSS MARGIN (%) KEY HIGHLIGHTS

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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Operating Costs

2014 2015 Total UK 301.6 361.9 Germany

  • 33.8

Total UK % 23.7% 23.7% Germany %

  • 28.0%

£ millions,

KEY HIGHLIGHTS

  • UK Operating costs have been carefully managed in line

with revenue growth

  • Our 2 key operating cost metrics, store rents and wages are

in line with last year

  • Central costs are in line as a % of sales
  • Cost of new warehouse capacity
  • Investments in head office teams
  • Costs of operating as a PLC

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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Exceptional Items

2014 2015 IPO Costs / Restructuring Fees 6.2 20.6 Jawoll Acquisition Fees

  • 0.8

Fair Value Movements 1.9 0.6 Pre-Opening Costs 3.8 5.3 CPO Income (0.7) (1.1) Excise Duty Dispute 3.6

  • LTIP

1.4

  • Other

1.5 (2.1) Total 17.7 24.1

  • Costs associated with the IPO and the group restructuring
  • Costs incurred on the acquisition of Jawoll
  • Fair value movements on FX and inter-company loans
  • New store pre-opening costs (52 net new UK stores and 1

German store)

  • Compulsory Purchase Order income (closed stores)

£ millions,

KEY HIGHLIGHTS

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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Interest Expenses

2014 2015 Interest 33.9 21.7 FRS4 Fees

  • 1.9

Total 33.9 23.6 Fees Write Off

  • 28.8

Put/Call Option

  • 2.0

Preferred Equity Certificates 67.3 16.2 Fair Value (1.8) 2.2 Total 65.4 49.2 £ millions,

  • Interest and FRS4 fees relating to the bank debt
  • FRS4 fees write off, £28.8m relating to the previous debt

facilities

  • Non-cash impact, £2.0m of IFRS accounting for Jawoll put

/ call option

  • Non-cash interest, £16.2m on the preferred equity

certificates relating to the previous capital structure

  • Fair value, £2.2m mark to market of interest rate hedging

KEY HIGHLIGHTS

Note: The 2014 numbers relate to the 52 weeks ended 29 March 2014.

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Strong Cash Flow Conversion

Note: Cash Conversion is defined as Operating Cash Flow as a percentage of Adjusted EBITDA. The cash exceptionals relate to IPO / restructuring fees / financing fees, Jawoll acquisition fees, pre-opening costs, other. 2014 relates to the 52 weeks ended 29 March 2014.

£m 2014 2015 Adjusted EBITDA 130.4 174.2 Change in Working Capital (13.6) (15.3) New Store Capex (18.0) (21.8) Infrastructure Capex (8.0) (2.4) Maintenance Capex (7.0) (9.0) Capex (33.0) (33.2) Operating Cash Flow 83.8 125.4

OPERATING CASH FLOW CASH FLOW STATEMENT

Operating Cash flow significantly improved due to EBITDA growth and tight working capital discipline

84 125 2014 2015 % Conversion 72% 64%

£ millions,

Net debt reduced to £381m and net debt to adjusted EBITDA reduced to 2.2 times

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Simon Arora Chief Executive Officer

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Large Addressable UK Market

GENERAL MERCHANDISE FOOD RETAILERS

1 Source: Euromonitor; refers to 2013 UK store-based retail value sales (RSP) excluding sales tax.

£127bn¹ £157bn¹ CORE ADDRESSABLE MARKET £280bn+¹

  • B&M’s UK revenues £1.5bn
  • Market share c.0.5%
  • B&M enjoys 2.9m transactions per

week

  • Entrenched part of shopping habits,

despite limited advertising spend

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B&M “The Limited Assortment Discounter” Structural Growth for B&M

DISTINCTIVE MARKET POSITION

Disciplined SKU Count Diversified Product Range

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Highlights by Product Category

  • Ongoing obsession with direct sourcing! (direct import

mix increased to 29% versus 27% in 2014)

  • Expanding own label programme (132 registered

brands versus 96 in 2014)

  • ‘Direct to Retail’ licensing is working well
  • Constant investment in design and development to

keep close to consumer tastes

  • B&M is highly differentiated from category specialists

and plays the structural shift to both Value and Convenience

GENERAL MERCHANDISE

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Highlights by Product Category

  • Core food revenues continue to remain positive LFL

despite competitive environment

  • Achieved against a deflationary backdrop
  • Nimble limited assortment model.
  • We are able to “self-help” eg Own Label programme or

re-allocation of SKU’s between sub-categories

GROCERY

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UK Store Rollout Update

HIGHLIGHTS FY2015 OPENINGS

Note 1: There were 54 new stores openings and 2 closures Note 2: Source: Trevor Wood Associates : The Definitive Guide to Retail and Leisure Parks 2015

  • Stores coming equally from ‘Retailers Rightsizing’, Lease

expiries and Newbuild development

  • Both infill and new regions, with limited cannibalisation
  • 42 of the stores were in Out of Town locations
  • We expect to open 60 net new stores in FY2016

52 Net New Store Openings¹

TOP 10 RETAIL PARK TENANTS2

2014 Rank 2013 Rank Retailer m Ft Sq 2014 m Ft Sq 2013 % inc in area 1 1 B & Q 8.07 8.13

  • 1%

2 3 Currys 4.95 5.01

  • 1%

3 2 Homebase 4.80 5.15

  • 7%

4 4 Matalan 3.93 3.85 2% 5 5 Next 3.36 3.30 2% 6 11 B&M 2.97 2.28 30% 7 6 Carpetright 2.75 2.81

  • 2%

8 7 Argos 2.74 2.80

  • 2%

9 8 Pets at Home 2.70 2.60 4% 10 9 TK Maxx 2.68 2.45 9%

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Strong Results Across The South

FY2015 SOUTHERN OPENINGS HIGHLIGHTS

  • We have opened 19 stores in the South during FY2015
  • In the last 3 years there have been 60 new store
  • penings in the South of the UK, this represents 38% of

store openings

  • In the last 3 years 50% of the top 20 stores opened

have been in the South

  • The returns from new stores in the South are

consistent with other areas of the country

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Soltau Head Office

International Expansion

KEY HIGHLIGHTS FOOTPRINT – GERMANY

  • Trading in line with management expectations
  • Good customer response to the direct sourced product

from B&M’s Far East supply chain

  • Further penetration of direct sourced products

planned for H2

  • Two new pilot stores opened, one on 28/3/15

(1,336m2) and the second on 9/4/15 (1,063m2)

  • Warehouse expansion underway in readiness for

future store growth, approx. €4.5m capex

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Jawoll now Sourcing from B&M Supply Chain Expansion – Product Development

  • Approximately 1,200 SKU’s now in

store

  • Jawoll buyers supported by dedicated

support staff in the Far East to broaden penetration of B&M product

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Looking Forward……..Investment for Growth

  • Higher capital expenditure per new store, to deliver consistency, strongly

branded and brighter stores

  • Invested £6.6m in maintenance capex and continuous store refresh

(2014: £7.0m)

To exploit strong pipeline of new store

  • pportunities

DISTRIBUTION AND CAPACITY STORE ESTATE

  • Refresh of HGV, trailer fleet and forklifts
  • Fit out of additional DC capacity planned for 2015/16 - capex of £3.5m
  • An infrastructure refresh is on-going
  • Investment in new Warehouse Management System and Voice Picking

IT INFRASTRUCTURE PEOPLE

  • On-going investment in senior management and support teams across

Buying, Operations and Distribution

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Capital Allocation Priorities

  • The business model is very cash generative
  • Rolling out stores with strong payback profile
  • Modest maintenance capital expenditure requirements
  • Maintain a disciplined approach to M&A
  • Within this context our capital allocation framework is as

laid out

CAPITAL ALLOCATION FRAMEWORK

STORE ROLLOUT ORDINARY DIVIDEND M&A OPTIONALITY RETURN SURPLUS CASH TO SHAREHOLDERS

Our Current Approach

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  • 40 New Store Openings
  • UK LFL Sales Budgeted 4%
  • Maintain Gross Margin
  • UK Operating Costs tightly controlled
  • Integrate German acquisition
  • Reduce net debt to EBITDA

Solid Delivery in FY2015 P P P P P P

Message at IPO FY2015

  • 52 New Store Openings
  • UK LFL Sales +4.4%
  • Gross Margin improved
  • Stable UK operating costs
  • Integration proceeding to plan
  • Net debt to EBITDA reduced to 2.2 times

Result

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Outlook for FY2016

  • Compelling retail proposition, with clear strategy for growth
  • Expect to open 60 net new UK stores
  • Modest headwind to gross margin from currency movement alongside ongoing infrastructure

investment

  • Competitive market conditions with slow start to Outdoor product
  • Promising start in Germany
  • Well placed for continued strong profit growth and cash generation