Interim Results Presentation 26 weeks to 27 th September 2014 FY15 - - PowerPoint PPT Presentation

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Interim Results Presentation 26 weeks to 27 th September 2014 FY15 - - PowerPoint PPT Presentation

Sep 22, 2023 337 likes •586 views

B&M European Value Retail SA Interim Results Presentation 26 weeks to 27 th September 2014 FY15 H1 Group Highlights GROUP HIGHLIGHTS Group revenues have increased by 29.7% to 739.8m UK like-for-like revenues +4.8% Gross

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B&M European Value Retail SA Interim Results Presentation 26 weeks to 27th September 2014

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FY15 H1 Group Highlights

  • Group revenues have increased by 29.7% to £739.8m
  • UK like-for-like revenues +4.8%
  • Gross Margin improved by 80 basis points to 34.7%
  • Group adjusted EBITDA increased by 34.0% to £73.0m
  • 20 net new stores opened in the period, our 400th UK

store was opened in October 2014

  • Strong pipeline of further new stores and on track for

at least 50 net new openings this financial year

  • Integration of Jawoll Germany proceeding to plan
  • Interim dividend of 0.9p per share to be paid on 16

January 2015

GROUP HIGHLIGHTS

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Paul McDonald Chief Financial Officer

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Summary EBIT

£ millions, H1 2014A H1 2015A % Number of Stores 357 393 – (UK) 49 – (Germany) Revenues 570.5 739.8 +29.7% Gross Profit 193.2 256.4 +32.7% % 33.9% 34.7% 80bps UK Operating Costs (138.8) (168.2) +21.2% Germany Operating Costs

  • (15.2)

Adjusted EBITDA 54.5 73.0 +34.0% % 9.5% 9.9% 32bps Depreciation (4.5) (7.2) +61.7% Exceptionals (8.2) (24.0) +194.2% EBIT 41.8 41.8

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Group Revenue Bridge

H1 REVENUE 2014A-2015A

£ millions,

  • 20 net new stores opened in UK, 393 UK

stores trading at period end

  • Prior year openings trading in line with

expectations

  • H1 LFL revenues +4.8% against tough

comparable of +7.6% last year

  • £58.8m of revenue from Jawoll Germany for

the 5 months of ownership

KEY HIGHLIGHTS

570 68 15 27 59 740 H1 2014 Full Year Effect of FY14 Openings Net New Stores LFL Germany H1 2015

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Strong EBITDA Growth

H1 ADJUSTED EBITDA BRIDGE 2014A-2015A

9.7% UK Margin % £ millions, 9.5% 9.9% Group Margin %

(4) 54 9 2 5 7 73 H1 2014 Full Year Effect of FY14 Openings Net New Stores LFL Central Costs Germany H1 2015

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Strong LFL Performance

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%

Jun- 2012 Sep- 2012 Dec- 2012 Mar- 2013 Jun- 2013 Sep- 2013 Mar- 2014 H1 +4.8% Jun- 2014 Sep- 2014 Dec- 2013 H1 +7.6%

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Gross Margin Trend

  • 80 bps improvement in gross margin to 34.7%
  • UK margins have improved by 54 bps driven by:
  • Strong sell-through of Gardening and Outdoor
  • Better buying and hence less markdown needed in

non-grocery generally

  • Impact of Jawoll Germany acquisition has improved the
  • verall group margin by 26 bps
  • Our strategy going forward is to re-invest in price to

prioritise growth over further gross margin expansion. 33.9% 34.0% 34.7% 2014 H1 2014 A 2015 H1

GROSS MARGIN (%) KEY HIGHLIGHTS

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Operating Costs

H1 2014A H1 2015A Rent 26.4 32.2

  • f which Store Rent

24.4 29.1 Store Wages 52.8 63.4 Other Store Costs 30.8 37.8 Transport & Warehouse 20.1 23.2 Central Costs 8.8 11.5 Total UK 138.8 168.2 Germany

  • 15.2

% of UK Revenue Rent 4.6% 4.7%

  • f which Store Rent

4.3% 4.3% Store Wages 9.3% 9.3% Other Store Costs 5.4% 5.6% Transport & Warehouse 3.5% 3.4% Central Costs 1.5% 1.7% Total UK % 24.3% 24.7% Germany %

  • 25.9%

£ millions,

KEY HIGHLIGHTS

  • UK Operating costs have been carefully managed in line

with revenue growth

  • Other Store Costs reflects on-going investments in training
  • Some efficiency improvements in transport and warehouse

cost have been achieved

  • Central costs have increased as a % of sales
  • Cost of new warehouse capacity
  • Investments in head office teams
  • Costs of operating as a public company
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Exceptional Items

H1 2014A H1 2015A IPO Costs / Restructuring Fees 3.0 21.3 Jawoll Acquisition Fees

  • 0.8

Fair Value Movements 3.4 0.2 Pre-Opening Costs 2.2 2.0 Other (0.5) (0.3) Total 8.2 24.0

  • 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 Stores’ pre-opening costs
  • Other mainly comprises one-off income from property

disposals £ millions,

KEY HIGHLIGHTS

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Interest Expenses

H1 2014A H1 2015A Interest 15.6 11.9 FRS4 Fees 2.5 1.2 Fees Write Off

  • 28.8

Preferred Equity Certificates 33.2 15.9 Fair Value (1.3) 0.4 Total 50.0 58.2 £ millions,

  • Interest and FRS4 fees relating to the bank debt
  • Fees Write Off of £28.8m relates to the previous debt

facilities and is a non-cash item

  • Non-cash interest on the Preferred Equity Certificates

relating to the previous capital structure

KEY HIGHLIGHTS

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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.

H1, £m 2014A 2015A Adjusted EBITDA 54.5 73.0 Change in Working Capital (37.0) (31.0) New Store Capex (8.0) (6.5) Infrastructure Capex (2.1) (2.1) Maintenance Capex (2.4) (3.9) Capex (12.5) (12.4) Operating Cash Flow 4.9 29.6 Cash Exceptionals (13.6) (24.0) Tax (7.4) (2.1) Jawoll net of cash acquired

  • (54.4)

Operating and Investing Cash Flow (16.1) (50.9)

OPERATING CASH FLOW CASH FLOW STATEMENT

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

5 30 H1 2014 H1 2015 % Conversion 41% 9%

£ millions,

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Simon Arora Chief Executive Officer

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Our focus is on the £127bn specialty retail segment

Our Market

SPECIALIST RETAILERS FOOD RETAILERS GENERAL MERCHANDISE DISCOUNTERS

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

£127bn¹ £6bn¹ £157bn¹

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Unique, Disruptive Business Model

Compelling higher ticket non-grocery

  • ffer

5,500 SKU discipline Targeted grocery

  • ffering

Seasonal flex Format flexibility Cost efficiency Disruptive sourcing process

The B&M Flywheel

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Future UK store estate:

  • c. 850

STORES PER 100,000 POPULATION

Huge White Space Opportunity

Source: Management information, ONS, store count as at 13 March 2014, OC&C March 2014.

1.5 to 2.0 1.0 to 1.5 0.5 to 1.0 0 to 0.5

C.450 ADDITIONAL CATCHMENTS COULD SUPPORT A B&M STORE Transport / Factory Outlet Proximity to Existing B&M Store Population Density Population Affluence Competitive Intensity High Rent

4,379 RETAIL CATCHMENTS SCREENED

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Store Rollout Update

HIGHLIGHTS H1 OPENINGS

  • 20 net new stores opened in H1 against a target of 40

stores for the full year

  • New stores are performing in line with internal

expectations with no material regional differences emerging

  • Now expect to open at least 50 net new stores this

financial year

  • FY2015 store roll-out benefitted from opportunistic
  • penings that became available.
  • We now revise our FY2016 forecast openings up from our

previous target of 40 to at least 45 store openings

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Soltau Head Office

International Expansion

  • Acquisition closed on 30 April 2014, so 5 months trading
  • Trading ahead of prior year and pleased with what we

have found

  • Management retain 20% and incentivised to drive future

financial performance to 2018

  • Jawoll has invested in buying teams and I.T. systems
  • Jawoll buyers now ordering inventory from B&M supplier

base; initial stock deliveries arriving in Q4 and response will be gauged by Q1 of FY2016

KEY HIGHLIGHTS CURRENT FOOTPRINT – GERMANY

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Investing Ahead of Growth

Distribution and Maintenance Capital Expenditure

  • New 500,000 sq ft DC opened on time and on budget in Feb-14 and is
  • perating efficiently in first trading peak
  • Invested £3.9m in maintenance capex and store refresh (2014: £2.4m)

I.T. Infrastructure

  • An infrastructure refresh is on-going which will provide a resilient and future

proof platform

  • Time and attendance software successfully rolled out across the store

estate

  • Refreshing our store communications infrastructure

People

  • Strengthening of the senior leadership team, appointment of Karen Hubbard

as UK COO in October 2014

  • Further investments in store manager and colleague training, including a

step up programme for managerial positions

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Summary

  • Strong profitable growth with revenues up by 29.7% and

adjusted EBITDA by +34.0%

  • New store opening programme ahead of expectations
  • Good pipeline of stores for next financial year, new target
  • f at least 45 new stores for the UK
  • Strengthened management team and continued

investment in central functions and infrastructure

  • Progress from leveraging sourcing synergy from

successful Jawoll Germany acquisition

  • Strong operating cash flow
  • Confident of achieving full year expectations

KEY HIGHLIGHTS

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Strategy for Growth

1 3 2

Pillars of Future Growth

Like-for-Like Growth Flexible and Disciplined Store Roll-

  • ut

International Expansion Underpinned by a Well Invested Infrastructure

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Appendix

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28th September 2013 27th September 2014 Non-Current Assets 955.0 1031.6 Inventories 169.7 219.3 Receivables 47.5 59.1 Cash 6.6 15.4 Total Assets 1178.8 1325.4 Current Liabilities (729.1) (131.1) Non-Current Liabilities (474.1) (516.9) Net Assets (24.4) 677.4 Share Capital 97.2 100.0 Share Premium / Other Reserves (97.2) 617.5 Retained Earnings (24.4) (40.1) Total Equity (24.4) 677.4 Net Debt 451.1 424.6

Summary Balance Sheet

£ millions,

Net Debt excludes FRS4 fees.