Debenhams. Full Year Results 2011

Transcription

1 Debenhams Full Year Results 2011

2 Debenhams Full Year Results 2011 Michael Sharp Chief Executive

3 Introduction highlights + Market share growth in key categories + Continued strong multi-channel growth + Good performance from Magasin and international franchise stores + Three new stores opened; 11 stores modernised + New ranges including Edition + Life made fabulous marketing campaign launched

4 Debenhams Full Year Results 2011 Chris Woodhouse Finance Director

5 Results highlights 2011 Group gross transaction value - 53 Weeks +4.5% - 52 Weeks +2.9% Like-for-like sales ex vat -0.3% Like-for-like sales inc vat +1.2% Gross margin % -20bps Headline profit before tax increase (a) +10.0% Net debt reduction 133.1m Earnings per share (b) 9.1p (a) After adding back 5.8m of amortisation on capitalised bank fees (FY 10: 5.7m) and before exceptional items last year of 5.4m (b) Based on total number of shares in issue as at 03 September

6 Performance track record Gross transaction ti value (LTM) (a) 5.0 Market share (LTM) (b) bn % H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H Own bought mix (LTM) (b) % Gross margin % (LTM) (b) Indexed H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H Profit before tax (LTM) (a) m 1, Net debt (a) m H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 (a) Includes Magasin (b) Excludes Magasin Note: LTM = Last twelve months H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 6

7 Trading results 2011 m Excl. Magasin Magasin % Change Gross transaction value 2, , , EBITDA before exceptionals Operating profit before exceptionals Interest (23.5) 0.1 (23.4) (49.8) Profit before tax and exceptionals Exceptional items (5.4) Profit before tax Taxation (43.1) (42.9) Profit after tax Basic earnings per share 9.1p 7.5p 75p

8 Magasin operating performance 2011 m % Change Gross transaction value % Gross margin Gross margin rate 34.7% 32.7% Costs (72.1) (56.8) EBITDA % Depreciation (5.0) (4.1) Operating profit before exceptionals % Note: weeks, weeks from 9 November

9 Sales growth % 1.2% 3.5% 1.6% 0.4% 2.5% 1.5% 1.6% +4.5% 0.5% (0.30%) (0.5%) LFL Magasin (non LFL) Week 53 International New Department Store Space 9

10 Market share 2011 Total clothing Womenswear Menswear Childrenswear Health & Beauty Source: Fashion: Kantar Worldpanel Fashion 52 weeks market share data to 4 September 2011 vs Health & Beauty: NPD 52 weeks to August

11 Margin vs. last year 2011 v LY (bps) Debenhams (ex Magasin) Own bought mix (% points) Underlying margin (5) % Faith LY (15) (20) % 80.4% Magasin Own bought mix (% points) Column % 39.6% 11

12 Online highlights 2011 Gross transaction value 180.4m GTV history ( m) (excl. Magasin) Sales growth +73.8% % GTV EBITDA +40.7% % 4.4% % Note: Online percentage of Group GTV excluding Magasin 12

13 International franchise highlights 2011 Gross transaction value 77.0m GTV history ( m) Sales growth +16.5% EBITDA +12.3% Franchise stores Countries

14 Store and distribution costs 2011 m Payroll % to sales 10.9% 11.1% 1% Store rent UK GAAP IFRS adjustment Total store rent % to sales 7.0% 6.7% Total distribution % to sales 2.6% 2.1% 14

15 Portfolio KPIs 2011 Square feet (k) Department stores Small format Total 2010 close 12, Department stores Bath H1 close Stockroom conversions 16 12, Department stores Wakefield Fareham close 12, Department stores Newbury resite close 12,

16 Capital investment guidance 17% New stores 7% 12% 11% 6% Magasin 8% 14% 5% 114m c. 120m 16% 23% Refits Systems Maintenance Warehouse Other 21% 23% 19% 18% 16

17 Balance sheet highlights 2011 m Variation Non-current assets 1,595 1,640 (45) Stock Other working capital (417) (421) 4 Net debt (384) (517) 133 Liabilities and charges (455) (494) 39 Shareholders funds

18 Stock 2011 Headline increase +8.8% New stores 1.6% Online expansion 2.2% Increased cost prices 76% 7.6% Density (2.6%) Unit density (excl. Magasin) (units per square foot) Terminal stock 26% 2.6% Debenhams Online 18

19 Operating cash flow 2011 m Reported operating profit before exceptionals Depreciation (a) Amortisation EBITDA before exceptionals Working capital (6.2) 21.2 Capital investment (114.0) (98.8) Proceeds from sale of fixed assets & investments Operating cash flow before financing, interest, taxation and exceptionals Net debt 384m 517m (a) Depreciation includes profit/loss on disposal of fixed assets and investments 19

20 Performance track record Gross transaction ti value (LTM) (a) 5.0 Market share (LTM) (b) bn % H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H Own bought mix (LTM) (b) % Gross margin % (LTM) (b) Indexed H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H Profit before tax (LTM) (a) m 1, Net debt (a) m H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 (a) Includes Magasin (b) Excludes Magasin Note: LTM = Last twelve months H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H

21 Debenhams Full Year Results 2011 Michael Sharp Chief Executive

22 Where we are today - Debenhams is a successful, profitable, cash generative business with strong financial i discipline i - Department stores are well placed to take advantage of customer demand for more choice and more ways to shop - There are clear opportunities for organic profitable growth based on meeting customers needs and behaviour 22

23 Listening to our customers Service when it s needed More choice: more brands,,products and ways to shop Inspiration Promotions and sales Designer products at affordable prices Contemporary, modern, accessible shopping Less clutter Exclusive brands Newness and creativity Everyday value 23

24 A leading international, multi-channel l retailer 24

25 A leading international, multi-channel retailer Focusing on UK retail Delivering a compelling customer proposition Increasing availability and choice through multi-channel Expanding the brand internationally 25

26 A leading international, multi-channel retailer Focusing on UK retail Improve Accelerate store Open new stores UK core stores modernisations 26

27 A leading international, multi-channel retailer Focusing on UK retail Improve UK core stores Rationale All core stores make cash contribution ti but need to restart like-for-like sales growth Opportunities to improve performance ahead of modernisation Issue of focus rather than increasing costs or capex Key actions Management review Space optimisation Replacing choice lost through concession closures Improving presentation standards Tight management of costs, margins and stockloss 27

28 A leading international, multi-channel retailer Focusing on UK retail Accelerate store modernisations Rationale Improve customer experience and choice Results in uplift in sales and margins plus good return on capital Grow higher margin own bought brands Key actions All 45 outstanding modernisations will be completed within next 2 years Includes Oxford Street flagship in 2013 Rolling programme thereafter 28

29 A leading international, multi-channel retailer Focusing on UK retail Gloucester 29

30 A leading international, multi-channel retailer Focusing on UK retail Open new stores Rationale Key actions Geographically immature store portfolio Drive sales and market share growth Disciplined approach to capex gives strong returns Flexible model: new stores work in all sizes and demographics Currently 163 stores in UK/RoI 9 new stores contracted 30 more in discussion Could be up to 240 department stores 30

31 A leading international, multi-channel retailer Delivering a compelling customer proposition Brand and Instore execution Communicating product strategy the proposition 31

32 A leading international, multi-channel retailer Delivering a compelling customer proposition Brand and product strategy A unique and differentiated offer Designers at Debenhams 750m sales over medium-term Jenny Packham joining the portfolio Core brands Offering great value every day International brands Adding choice and prestige Exploit category opportunities ii Still a role for concessions 32

33 A leading international, multi-channel retailer Delivering a compelling customer proposition Brand and product strategy Focus on cash margin Category mix Choice and resilience Own bought mix 85% target Intake margin Sourcing: fabric and geography Exit margin Reducing markdown 33

34 A leading international, multi-channel retailer Delivering a compelling customer proposition Instore execution Getting it right instore Changing perceptions Visual merchandising Product presentation Price and value confidence Exploit cross shopping opportunities Between departments Beauty Club Increase ATV within departments 34

35 A leading international, multi-channel retailer Delivering a compelling customer Deliver a compelling proposition proposition Communicating the proposition Joined-up marketing Consistent messaging Life made fabulous Designers at Debenhams Speak with one voice for premium and promotional marketing Marketing and PR aligned Balance between traditional and new media 35

36 A leading international, multi-channel retailer Delivering a compelling customer Deliver a compelling proposition proposition Communicating the proposition Speaking with one voice 36

37 A leading international, multi-channel retailer Increasing availability and choice through multi-channel Increasing Wider choice of More ways availability products and brands to shop 37

38 A leading international, multi-channel retailer Increasing availability and choice through multi-channel Increasing availability Availability of products Smallest store offers same range as largest store Availability of stock Using stock from all locations in the business Endless Aisle Last Year Today Autumn 2012 Online distribution centre (DC) Online DC + 30 store stockrooms Online DC + all store stockrooms + shopfloors 38

39 A leading international, multi-channel retailer Increasing availability and choice through multi-channel Wider choice of products and brands All own brand products now online Most concessions online Online only brands Category opportunities: Furniture Electricals Cosmetics Additional/peripheral sizes online 39

40 A leading international, multi-channel retailer Increasing availability and choice through multi-channel More ways to shop 40

41 A leading international, multi-channel retailer Increasing availability and choice through multi-channel More ways to shop 41

42 A leading international, multi-channel retailer Expanding the brand internationally International Owned International franchise stores international assets online 42

43 A leading international, multi-channel retailer Expanding the brand internationally International Rationale Status & plans franchise stores Low capital, low risk way of extending brand reach Increases scale of own bought sourcing Currently 65 stores in 25 countries ti Double in next 5 years 14 new stores contracted Over 50 more new stores under discussion 10 new markets under discussion 43

44 A leading international, multi-channel retailer Expanding the brand internationally Owned international assets Magasin du Nord Good performance in first full year of ownership On course to meet targets Online opportunity Blueprint for other acquisitions Acquisitions remain on the agenda 44

45 A leading international, multi-channel retailer Expanding the brand internationally International online 45

46 A leading international, multi-channel retailer Focusing on UK retail Delivering a compelling customer proposition Increasing availability and choice through multi-channel Expanding the brand internationally 46

47 Debenhams Full Year Results 2011 Appendix

48 Guidance Margin + % to sell maintained - Store payroll + % to sell maintained i - Rent + % to sell maintained - Warehouse & distribution + % to sell increase by 40 bps - Other costs + % to sell maintained - Taxation headline rate + 25% - Interest + Annualisation of 0.5% interest rate saving 48