Metcash Limited · ASX:MTS
Metcash — Corporate Update (April 2012)
20 slides from Metcash's corporate update, Apr 3, 2012
Slide 1: Metcash Limited – Investor Market Update (ASX cover letter)
Metcash Limited ABN 32 112 073 480 50 Waterloo Road Macquarie Park NSW 2113 Australia PO Box 6226 Silverwater Business Centre NSW 1811 Australia 3 April 2012 Ph: 61 2 9751 8200 Fax: 61 2 9741 3027 The Manager, Companies Australian Securities Exchange Company Announcements Office Level 4 20 Bridge St
Slide 2: Investor Market Update
Investor Market Update Andrew Reitzer Chief Executive Officer Adrian Gratwicke Chief Financial Officer 3 April 2012
Slide 3: Agenda
Agenda Andrew Reitzer, CEO Metcash Limited – Group Update Adrian Gratwicke, CFO – Financial Impact Questions & Answers 1
Slide 4: Andrew Reitzer, CEO Metcash
Andrew Reitzer CEO Metcash 2
Slide 5: Overview: Trading conditions continue to be challenging
Overview Trading g conditions continue to be challenging g g Unprecedented and prolonged challenging operating conditions - Value-conscious consumer is here to stay (high savings and only buys on special - now above 50% of the basket) - Deflation persists - currently -0.9% YTD - Consumer sentiment
Slide 6: Overview: Our business model continues to be resilient
Overview Our business model continues to be resilient Building a network of independently owned stores under a common brand with world class logistics, strong merchandise and marketing has been a success over the past 14 years and will continue to be Clear need to adapt aspects of our business mod
Slide 7: What the Strategic Review entailed
What the Strategic Review entailed 15 projects made up of cross pillar / cross functional teams Review all p Reduce duplication - cost out and improve p efficiency y Metcash No change to customer service and the things we do for them operations Process innovation Close if loss making and s
Slide 8: Restructure outcomes
Restructure outcomes One off restructuring cost of $34 - $43m made up mostly lease tails from branch closures and staff redundancies Delivers savings: FY13: $25 - $30m FY14: $10 - $15m, incremental Payback of 1.3 1 3 years 6
Slide 9: FoodLink business sold
FoodLink business sold Non-core food service business Profitable but it was difficult to get the scale needed to make it a national player l The majority of our customers were national operators It was difficult to gain their support while FoodLink remained a state- based business Terms of
Slide 10: Progress on Franklins stores transfer
Progress on Franklins stores transfer Integration of business / progress as anticipated 34 stores sold and to be handed over by July/August 2012 Further 10 store sales close to finalisation 21 store sales in progress or under consideration 15 stores to exit or sell outside of IGA 9 Frank
Slide 11: No Frills launched as part of tiered private label strategy
No Frills launched as part of 3 tiered private label strategy Quality, Value & Community Value you can Trust Simply Savings Launched nationally 9
Slide 12: Two Queensland joint ventures restructured
Two Queensland joint ventures restructured Cornetts and Walters businesses have been impacted by: deflation and a weak Queensland economy natural t l disasters di t over th the pastt year value-conscious consumers p expansion rapid p in recent yyears succession planning issues Joint re
Slide 13: Adrian Gratwicke, Chief Financial Officer
Adrian Gratwicke Chief Financial Officer 11
Slide 14: JV impairment
JV impairment The following analysis takes the mid point of the impairment range to illustrate the nature of the components charges: Non cash Cash Total $m $m $m Queensland Joint Ventures Equity investment and intangibles 37.3 37.3 Other O e non-current o cu e asseassets s 5.1 5 5.1 5 Equipment leas
Slide 15: Strategic Review cost analysis
Strategic Review cost analysis The following analysis takes the mid point of the restructure cost range to illustrate the nature of the components costs. Total $m Strategic Review Redundancy costs 14.3 Asset impairment 9.8 L Lease ttailil and d exit it costs t 14 7 14.7 Business disposal (net) (7.0)
Slide 16: Points to note
Points to note Due to the cash component p of the Strategic g Review restructure costs there will be a minor increase in gearing; The lease tails identified are expected to be paid over an extended period and d are nott immediate i di t cash h costs; t There is no anticipated impact on the Gro
Slide 17: Outlook
Outlook Market environment will continue to be challenging: Shift in consumer patterns: − Spending less and saving more − Seeking better value for money & buying more on promotion now above 50% Deflation persists The Strategic Review positions Metcash to better respond to business conditions
Slide 18: Questions?
Quest o s Questions? 16
Slide 19: For additional information contact
For additional information contact: Adrian Gratwicke, Chief Financial Officer Phone: 61 2 9741 3248 Fax: 61 2 9741 3027 E-mail: [email protected] Or visit our website: www.metcash.com 17
Slide 20: Disclaimer
Disclaimer This presentation contains summary information about Metcash Limited (ABN 32 112 073 480) (Metcash) and its activities current as at the date of this presentation. The information in this presentation is of general background and does not purport to be complete. It should be read in conju