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Q3 2014/15
RESULTS PRESENTATION 6 August 2015
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 1
DISCLAIMER AND NOTES To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements. All forward-looking statements
herein are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual
results, performance or financial position to differ materially from any future results, performance or financial position expressed or implied in this presentation. Many of
these risks and uncertainties relate to factors that are beyond METRO GROUP’s ability to control or estimate precisely. The risks and uncertainties to which these forward-
looking statements may be subject include (without limitation) future market and economic conditions, the behaviour of other market participants, investments in innovative
sales formats, expansion in online and multichannel sales activities, integration of acquired businesses and achievement of anticipated cost savings and productivity gains,
and the actions of government regulators. Readers are cautioned not to place too much reliance on these forward-looking statements. See also “Risk and Opportunity
Report” on pages 145 - 167 of the METRO GROUP Annual Report 2013/14 for risks as of the date of such Annual Report. METRO GROUP does not undertake any
obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation.
This presentation is intended for information only. It is not intended as an offer for sale, or as a solicitation of an offer to purchase, any securities in any jurisdiction.
This presentation may not be reproduced, distributed or published without prior written consent of METRO AG.
All numbers are before special items, unless otherwise stated.
The consolidated financial statements have been prepared in euros. All amounts are stated in million euros (€ million) unless otherwise indicated. Amounts below €0.5
million are rounded and reported as 0. Since 2012, only the amounts in the income statement, the reconciliation from profit or loss for the period to total comprehensive
income, the balance sheet, the statement of changes in equity and the cash flow statement were rounded to produce the respective totals. In all other tables, the individual
amounts and the totals were rounded separately. This may entail rounding differences.
Due to the sale to Hudson’s Bay Company, Galeria Kaufhof will no longer be shown as a separate segment, but as a discontinued operations. Accordingly,
METRO GROUP's financials have been recalculated to account for the disposal of Galeria Kaufhof and the previous year's figures have been adjusted. The sale is
scheduled to close in September 2015.
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 2
STRATEGIC PRIORITIES CLEARLY IDENTIFIED IN 2012
CUSTOMER VALUE
OPERATIVE
EXCELLENCE
FOCUS
1
2
3
Field Trip
May 6th
2015
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 3
OUR FRAMEWORK
PORTFOLIO OPTIMIZATION / EXTENSION
METRO GROUP STRATEGY
PARENTING
ADVANTAGE /
JOINT ASSETS
1
3
NEW BUSINESS
MODELS
SALES LINE
TRANSFORMATION
2 4
Business Innovation ACCELERATOR Business Building [!] [!]
Field Trip
May 6th
2015
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 4
GALERIA KAUFHOF: KEY TRANSACTION FACTS
Disposal of department store operations in Germany
and Belgium together with the related real estate
portfolio to Hudson’s Bay Company
Enterprise value of €2.825bn
Substantial assurances for around 21,500 employees,
HQ and stores
Significant reduction in rating-relevant1 net debt by
c.€2.7bn, including cash inflow of c. €1.6bn
Net book gain on sale of c. €0.7bn
Closing expected by end of FY 2014/15
Germany
Belgium
Total € million
FY Sales 2013/14 2,920 178 3,099
FY EBIT 2013/142 193
Stores per 31/3/2015 119 16 135 1Standard & Poor‘s methodology
2 before special items
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 5
Increase overall capex budget to ca. €2bn over the
next few years
Intensify investment activity
▪ Growth countries (METRO Cash & Carry and Media-
Saturn)
▪ Store remodellings and new store formats in inner
city locations (METRO Cash & Carry and Media-
Saturn)
▪ Complementary assets to accelerate growth in Cash
& Carry (FSD) and Media-Saturn (multi-channel)
Digital penetration of the HoReCa sector
(METRO Cash & Carry)
Strengthen financial profile
GALERIA KAUFHOF: USE OF PROCEEDS FROM SALE
RoCE* 2013/14 vs. Cost of Capital
* lease-adjusted
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 6
Q3 2014/15 PUT IN PERSPECTIVE
Reporting focus on continuing operations
LfL sales grew 0.3% if adjusted for calendar effect (mainly Easter)
EBIT above PY if adjusted for negative FX, lower real estate gains,
Easter and FIFA World Cup last year
METRO GROUP after Q3 and 9M fully on track to achieve FY guidance
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 7
Q3 2014/15 HIGHLIGHTS
METRO Cash & Carry: 8th consecutive quarter with LfL
sales growth
Media Saturn: 4th consecutive quarter with LfL sales growth
Real: Solid bottom-line performance
Transformation progress continued
▪ Delivery sales: €0.8bn (+15%)
▪ Online sales: €0.4bn (+26%)
Net debt reduced by €0.4bn to €5.1bn
Q3
13,967
Q2
13,692
Q1
17,318
Q4
14,405
Q3
14,168
Q2
13,645
Q1
17,718
2013/14 2014/15
Sales Development in € million
209
891
404253
-40
913
-24
2013/14 2014/15
EBIT in € million
Q1 Q2 Q3 Q4 Q1
-0.2
Q1
-0.4
2.7
Q2 Q3 Q1
2.3
Q4
0.6
Q3
1.7
Q2
-1.8
2013/14 2014/15
Like-for-Like Sales Development in %
Q2 Q3
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 8
APPRECIATION OF EBIT Q3 2014/15
175
253
171
Q3 2014/15
(Before
Special Items)
209
Special Items
35
Q3 2014/15
(Reported)
Q3 2013/14
(Comparable
Before
Special Items)
~243
Negative
FX Impact
~-10
Q3 2013/14
(Before
Special Items)
Special Items
83
Q3 2013/14
(Reported)
in € million -34
~601)
~301)
1) Real Estate Gains from Divestments
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 9
APPRECIATION OF EBIT 9M 2014/15
487
872
590
255
1,127
Special Items 9M 2013/14
(Reported)
Negative
FX Impact
~-100
9M 2013/14
(Before
Special Items)
9M 2014/15
(Before
Special Items)
~301)
9M 2014/15
(Reported)
Special Items 9M 2013/14
(Comparable
Before
Special Items)
~601)
in € million +49
1) Real Estate Gains from Divestments
~1,027 1,076
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 10
Q3 2014/15: SALES AND EBIT BY DIVISION
Germany and Western Europe with improved LfL sales development vs. Q2; EBIT down due to Easter shift
Positive LfL sales growth despite FIFA World Cup last year supported by good development in Eastern Europe; EBIT further improved
LfL sales development needs to be seen in the context of a strong Q3 2013/14 (+5.1%); EBIT positive driven by strict cost control and sound margin development in some categories
Others Lower gains from real estate disposals vs. last year
€ million
METRO Cash & Carry 7,449 -1.3% 0.1% 281 266 262 -4
Media-Saturn 4,620 1.2% 0.2% -70 -66 -60 6
Real 1,885 -8.2% -3.7% -3 -3 5 8
Others/Consolidation 14 - - 45 45 2 -43
METRO GROUP 13,967 -1.4% -0.4% 253 ~243 209 -34
Δ
Q3 2014/15
vs Q3 2013/14
comparable
Sales
Q3 2014/15 Change
Like-for-Like
Change
EBIT
Q3 2013/14
EBIT
comparable
Q3 2013/14
EBIT
Q3 2014/15
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 11
9M/Q3 2014/15 INCOME STATEMENT (EBIT TO EPS)
Ongoing improvement of net financial result driven by lower net debt and interest level
The high tax rate in Q3 results from our integral approach thus the adjustments for the
9M period affect Q3
Tax rate for continuing operations of 56.6% in 9M 2014/15 (9M 2013/14: 56.8%) in line
with expectations
€ million
Q3 2013/14
Q3 2014/15
9M 2013/14
9M 2014/15
EBIT 253 209 1,127 1,076
Net financial result -102 -94 -376 -269
EBT 151 115 751 807
Income Taxes -73 -113 -426 -456
Profit or loss for the period from continuing operations 78 2 325 351
Profit or loss for the period from disconinued operations 17 5 181 94
Profit or loss for the period 95 7 506 445
EPS in € from continuing operations 0.27 0.05 0.84 0.94
EPS in € 0.32 0.07 1.39 1.23
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 12
9M 2014/15: OTHER KEY FINANCIALS
Net debt further reduced by around €0.4bn to €5.1bn due to portfolio optimization and real estate
divestments
Net working capital and cash flow from operating activities impacted by FX and negative NWC
development at Media-Saturn, cash flow additionally impacted by higher tax cash out
Capex of €656m mainly invested in modernisation, expansion and remodellings
€ million
9M 2014/15 Change
Net debt (as at 30/06) 5,795 5,530 5,130 -400
Net working capital (as at 30/06) -1,776 -1,982 -1,700 282
Change in net working capital
(cash flow impact)-456 -403 -682 -279
Cash flow from operating activities 958 791 474 -317
Capex 701 558 656 98
Number of new store openings 57 57 42 -15
9M 2013/14
reported
9M 2013/14
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 13
METRO CASH & CARRY: HIGHLIGHTS Q3 2014/15
8th consecutive quarter with LfL sales growth
▪ Germany improved vs. Q2 despite shift of Easter
business
▪ Western Europe: Italy and Spain with positive LfL
sales growth
▪ Eastern Europe: esp. Russia and Turkey with positive
LfL sales development
▪ Asia: China LfL sales development impacted by giving
up low-margin volume business
Delivery sales increased by 15% (representing more
than 10% of total Cash & Carry sales)
7 new store openings, 2 store closures
Sale of METRO Cash & Carry Vietnam on track
Q3 Q2
1.1
Q1
1.4
Q4
0.1
Q3
2.0
Q2
0.8
Q1
0.9 0.1
2013/14 2014/15
Like-for-Like Sales Development in %
Q3 Q2
10.1
Q1
8.6
Q4
10.0
Q3
9.4
Q2
9.4
Q1
7.9 10.9
2013/14 2014/15
Delivery Sales Share in %
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 14
METRO CASH & CARRY: STRATEGIC UPDATE
Implementation of the New Operating Model to foster
entrepreneurship well on track
▪ New organizational structure “live” since 1 July 2015, teams
almost fully staffed
▪ Pieter Boone took his office as member of the Management Board
of METRO AG
▪ Countries currently working on the Value Creation Plans (VCPs)
together with their Operating Partners (OPs)
▪ Full implementation of the New Operating Model by October 2016
Techstars METRO Accelerator well on track
METRO Cash & Carry business in Russia under control
METRO Cash & Carry Germany
▪ Improved development of important HoReCa customer group
▪ Upgrading and rebranding of Schaper stores to METRO GASTRO
started
▪ First promising results from FSD pilot in Weiterstadt
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 15
OUR AIM AT METRO CASH & CARRY:
CAPTURE SIGNIFICANT ADDITIONAL POTENTIAL
FUTURE
System Partner
Contractual/System Partner
Emotional relationship
Significant added value through
additional services and eco-system
TODAY
Transactional
Transactional
Low switching cost
Limited value add beyond product
Franchise Innovation Expansion &
Remodelling FSD
Field Trip
May 6th
2015
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 16
METRO CASH & CARRY: ACQUISITION OF CLASSIC FINE FOODS,
AN FSD PLAYER IN THE PREMIUM SEGMENT IN ASIA (I)
UK
France
UAE
China KoreaJapan
Hong Kong
Vietnam
Thailand Philippines
MalaysiaSingaporeIndonesia
Leading FSD player in the high-margin premium segment:
Access to high growth markets
Unique service offering
Highly niche premium product portfolio
Presence in 25 mainly Asian cities across 14 countries
~6,000 active customers with focus on HoReCa customer
group
c. 800 full-time employees
Financials 2014: sales US$219m
EBITDA US$18m (margin 8%)
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 17
2. EXPANDING WHOLESALE OPERATIONS FROM 26 TO 36 COUNTRIES
FUELLING FUTURE SALES AND EARNINGS GROWTH
METRO CASH & CARRY: ACQUISITION OF CLASSIC FINE FOODS,
AN FSD PLAYER IN THE PREMIUM SEGMENT IN ASIA (II)
Superior sales growth (CAGR FY 10-14: 15%) and EBITDA margin (8%) compared
to FSD peers and Cash & Carry segment
1. HIGHLY ATTRACTIVE PREMIUM FSD BUSINESS MODEL FOR STRONG
IMPROVEMENT OF FSD COMPETENCE
CFF sales (in US$m)
118
208
0k
0k
0k
0k
0k
0k
2010A 2011A 2012A 2013A 2014A
Source: Company Information
Hotel Restaurants Others
CFF extends METRO’s FSD capabilities to widen service for its HoReCa customers
3. TOP MANAGEMENT TEAM TO LEVERAGE SYNERGY POTENTIAL
Further growth potential by expanding CFF in selected European MCC markets
219
126
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 18
Deal rationale for MCC Valuation and deal structure
Acquire full FSD capabilities
Accelerate growth in the HoReCa sector
Expand into additional countries
Add strong management capabilities
Capture additional value through
▪ Strengthened access to exclusive
assortment
▪ Support of international expansion
▪ Capture opportunities for selected store
operations in new regions
Seller: Klassisk Holding Limited (EQT)
Share deal
Enterprise value of US$290m + earn-out
Valuation multiple of 11.6x (EV/2015E EBITDA)
in line with peers (MARR1)12.3x; Sysco1)10.1x)
METRO CASH & CARRY: ACQUISITION OF CLASSIC FINE FOODS,
AN FSD PLAYER IN THE PREMIUM SEGMENT IN ASIA (III)
1) Valuation as at 28 July 2015 based on factset
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 19
MEDIA-SATURN: HIGHLIGHTS Q3 2014/15
4th consecutive quarter with positive LfL sales growth
▪ Germany impacted by missing sales from FIFA
World-Cup last year
▪ Western Europe: All major countries grew
▪ Eastern Europe: Positive despite Russia suffering
from crisis
Continued strong growth in online sales of +24%
(representing 9% of total Media-Saturn sales)
Internet product offering further increased to
▪ about 130,000 SKUs at www.mediamarkt.de
▪ about 120,000 SKUs at www.saturn.de
4 new store openings, 5 store closures
Q3
0.2
Q2
5.2
Q1
3.8
Q4
1.7
Q3
-0.2
Q2
-3.7
Q1
-1.0
2013/14 2014/15
Like-for-Like Sales Development in %
404436512
353328358398
Q3 Q2 Q1 Q4 Q3 Q2 Q1
2013/14 2014/15
Online Sales in € million
1 1
1Adjusted for Redcoon Denmark and France
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 20
MEDIA-SATURN: STRATEGIC UPDATE
Business transformation well on track
▪ European market leadership extended by 0.6%pt to 13.4% (highest market share ever!)
▪ Market leadership in 9 countries, market share increased in 11 countries
▪ Market share gains in all categories
▪ All countries contribute to improved operating performance
Implementation of electronic shelf labelling (ESL)
Further roll-out of city center formats to meet customer needs
Ongoing portfolio optimisation
(space reductions / store closings)
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 21
MEDIA-SATURN LAUNCHES NEW ENTERTAINMENT PORTAL JUKE
German launch of JUKE (joint digital entertainment platform)
on 3rd August 2015
Strategic expansion of Media-Saturn’s digital business through
comprehensive digital offering:
▪ >30 million songs
▪ >15,000 movies and TV series
▪ 1.5 million e-books
▪ 2,400 PC games
▪ 2,400 PC software applications
Free JUKE app pre-installed on various devices and available for
download on Google Play and iOS App Store
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 22
REAL GERMANY: HIGHLIGHTS Q3 2014/15
+1.4% LfL sales growth over two years
Good performance of fruit & vegetables as well as
household goods
Online sales with strong improvement
EBIT with stable development driven by tight cost
control and sound margin development in some
categories
Joint venture with Carlton Investment to further
enhance attractiveness and footfall of 10 Real
hypermarkets
1 store closure
0.9
Q2 Q3 Q1
5.1
0.2
Q4
-6.6
Q2 Q1
1.1
-2.1
Q3
-3.7
2013/14 2014/15
Like-for-Like Sales Development in Germany in %
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 23
REAL GERMANY: STRATEGIC UPDATE
Additional initiatives to further improve performance
▪ Service agreement with Markant for complete settlement
▪ Striving for in-house collective agreement
Commercial Model will drive top-line performance
▪ 82 stores already remodeled, 25 to follow in Q4 2014/15
▪ Remodeled stores continue to outperform the other stores by round
about 2%
Supply chain optimization moving forward
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 24
OUTLOOK 2014/15: FINANCIAL TARGETS
€ billlion
Reported
FY 2013/143
Guidance
FY 2014/15
Sales growth1.2 +1.3% >0%
LFL sales growth +0.1% >0%
EBIT before special items 1,531 >1,5312
Capex 1.0 ~1.5
Net debt 4.7flat <3.2
Number of new store openings 68flat ~501Adjusted for portfolio changes 2Based on constant foreign exchange rates3Adjusted for Galeria Kaufhof
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 25
Q&A
Mark Frese
CFO
Olaf Koch CEO
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 26
CONTACT
Investor Relations
Metro-Straße 1
40235 Duesseldorf
Germany
Tel.: +49 (0)211 6886-1051
Fax: +49 (0)211 6886-3759
Email: investorrelations@metro.de
Internet: www.metrogroup.de
BACK-UP
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 28
9M 2014/15: SALES AND EBIT BY DIVISION
8th consecutive quarter with LfL growth; EBIT above PY level if adjusted for FX
4th consecutive quarter with LfL growth; significant EBIT improvement driven by operating leverage and cost control
LfL sales impacted by intense competition; EBIT development influenced by targeted marketing investments and costs for store remodellings.
Others Higher rental costs and lower gains from real estate disposals vs. last year
Change
Like-for-Like
Change
€ million
METRO Cash & Carry 22,338 -2.5% 0.9% 864 ~754 781 +27
Media-Saturn 16,655 3.8% 3.2% 205 ~215 309 +94
Real 5,944 -9.4% -0.6% 54 54 53 -1
Others/Consolidation 40 - - 5 5 -66 -71
METRO GROUP 44,977 -1.2% 1.6% 1,127 ~1,027 1,076 +49
Sales
9M 2014/15EBIT
reported
9M 2013/14
EBIT
comparable
9M 2013/14
EBIT
reported
9M 2014/15
Δ
9M 2014/15
vs 9M 2013/14
comparable
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 29
SPECIAL ITEMS
€ million
Q3 2013/14
Q3 2014/15
9M 2013/14
9M 2014/15
Portfolio Optimisation Measures -18 11 -13 11
Restructuring and Efficiency-
Enhancing Measures-60 -42 -149 -95
Goodwill-Impairments 0 0 -88 -470
Others -5 -3 -6 -35
METRO GROUP -83 -35 -255 -590
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 30
STORES BY DIVISION AND COUNTRY
*including 4 stores in the Others segment
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 31
“FAST FORWARD” WITH THE TECHSTARS METRO ACCELERATOR
Seeking the best digital innovations for hotels
and restaurants
Intensive start-up-bootcamp
Broad network of experienced mentors
3 prestigious partners
10 companies to be chosen
techstars METRO ACCELERATOR with R/GA
Berlin – 2015/2016
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 32
WE SEE GREAT INTEREST IN OUR ACCELERATOR PROGRAMME,
ESPECIALLY IN OUR HORECA FOCUS COUNTRIES
As of July 28th
METRO GROUP, Q3 2014/15 Results Presentation
6 August 2015 | © METRO AG 2015 33
FROM PUSH TO PULL TO CURATED PUSH
TRADITIONAL RETAIL
“We have PRODUCTS. Let’s FIND
customers who want to buy them!”
…highly interactive, social shopping, shared
economy
and target group specific marketplaces
…to selling services
…to growing share-of-wallet with existing
customers based on analytical insights
…to offering the best solution
Profit pools shift from selling products…
Growth potential shifts from conquering new markets
and market shares…
Our USP shifts from offering best prices...
Customer preferences shift from anonymous
shopping and consumption to…
MODERN RETAIL
“We have CUSTOMERS. We understand
and fulfill their NEEDS!”
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