2011 annual general meeting - myerinvestor.myer.com.au/downloadfile.axd?file=/report/...nov 25, 2011...
TRANSCRIPT
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Strong Foundations
2011 Annual General Meeting25 November 2011
Bernie BrookesCEO and Managing Director
Mural Hall, Myer Melbourne
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Strong Foundations
Agenda• Chairman’s address
• CEO update
• Formal business
– Resolutions
– Shareholder questions
• Meeting concludes
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Strong Foundations
Agenda• CEO update
– FY2011 financial results
– FY2011 operating highlights
– Delivering our plan
• Customer service
• Omni-channel
– Key focus areas for 2012
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Solid result in challenging environment
• Sales* down 3.8% to $3,159 million• Gross profit margin up 63bps to 40.26% • Strong cost control: cash CODB down 3.4%• EBITDA margin up 50bps to 10.70%• Stable EBIT margin of 8.20%• NPAT* $162.7 million, down 3.6%• Final dividend of 11.5 cps
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*Consolidated sales. NPAT: pre sale of shareholding in Harris Scarfe, restructuring costs and residual IPO costs
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Strong foundations ensured resilience
• Significantly improved technology, supply chain and store network
• Strong cost, gross margin and inventory management
• Comprehensive brand hierarchy including Myer Exclusive Brands (MEBs)
• MYER one loyalty program
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“Experienced management”
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39.8039.50
39.18
39.63
40.26
37.5
38.0
38.5
39.0
39.5
40.0
40.5
41.0
41.5
FY07 FY08 FY09 FY10 FY11
Operating Gross Profit (%)%
Continued improvement in OGP
• Strengthened Myer Exclusive Brands
• Improved sourcing• Reduced shrinkage• Disciplined inventory control• Optimised promotions• Better mix and space utilisation
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Focus on more profitable categories
• Responding to changing customer demands
• Managed exit of whitegoods, rationalised music/DVD offering
• Reallocation of floor space to higher margin products
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“Space optimisation delivered increased profitability”
Reduced Electrical offering
16% 11%
FY10 FY11
14% 12%
$32.4m
Sales Operating Gross Profit
Electrical category Remaining categories
Impact of Electrical restructure
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EBIT reflects resilient business model
165
213236
271 2595.00%
6.40%7.20%
8.25% 8.20%
0
1
2
3
4
5
6
7
8
9
0
50
100
150
200
250
300
350
FY07 FY08 FY09 FY10 FY11
Full Year EBIT FY EBIT Margin
$m %
FINANCIAL REVIEW
Consumer Downturn
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Financial Crisis
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Financial highlights summary
• Improved operating gross profit margin• Improved EBITDA margin• Stable EBIT margin• Disciplined inventory management• Strong balance sheet• Full year dividend increased
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“Solid financial structure ensures we are well positioned for growth”
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Strong Foundations
Agenda• CEO update
– FY2011 financial results
– FY2011 operating highlights
– Delivering our plan
• Customer service
• Omni-channel
– Key focus areas for 2012
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Operating highlights in FY2011
• Melbourne relaunch and new stores• New store opened recently at Mackay• Investment in service funded by
optimised promotions• Enhanced merchandise offer • Sourcing offices established in Asia• Acquisition of 65% of sass & bide
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Myer Melbourne awarded World Retail store design of the year 2011
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Mackay successfully launched and trading ahead of expectations
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Continually optimising store network
• Completed three refurbishments. Works underway at Liverpool and Carindale
• Townsville, Fountain Gate and Shell Harbour under construction. Only full-line department store in all locations– Anticipate Townsville opening August 2012
• Replacement stores at Hobart and Werribee
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“We will continue to assess the financial merits of all new and existing stores”
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sass & bide Arthur Galan AG
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BIB
Jayson Brunsdon Black Label
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Newness, Inspiration, Fashionability
New brands improve depth of offerWomens: sass & bide, Arthur Galan AG, Simona, Fleur Wood,
Howard Showers, Urbane activ, BIB, Jayson Brundson Black Label, Morrison, Sass
Footwear: Stephane Kelien, BalmainYouth: Lipsy, MossimoMens: Domingo, Cambridge, Arthur Galan AG, Jack Stone,
DKNY, Le Coq Sportif, T.M.Lewin, RM Williams, Elwood, Diesel
Home: Heritage furniture, KitchenAid, Delicious, Luke Nguyen, Jayson Brunsdon Home Collection
Childrens: Little Leona, Purebaby, GumbootsInternational: The Row, Hoss, Jaeger, Matthew Williamson Escape,
Vanessa Bruno, Isabelle Marant
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Katy Perry Fragrance Benefit
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Sourcing offices to drive MEB growth
• Improved gross profit, speed to market, better control over production cycle– Shanghai office to manage China sourcing– Hong Kong office to manage other markets and
new opportunities– Quality Control, Quality Assurance focus
“Speed to market is essential in fashion”
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Strong Foundations
Agenda• CEO update
– FY2011 financial results
– FY2011 operating highlights
– Delivering our plan
• Customer service
• Omni-channel
– Key focus areas for 2012
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Investing in customer service
• Additional selling hours supported by reinvestment of savings from optimised promotions
• Focus on high-service categories (footwear, apparel, intimates, men’s suiting)
• Program initiatives include
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– Service and product knowledge training
– Reward and recognition– Individual sales
productivity focus
– Sales based incentives– POS clustering– New navigational signage
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Technical infrastructure Supply chain & inventory management Human resources and talent
Omni-channel offer
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Search Social
Digital Installations*
Mobile
Website
Advertising
Email STORES
DELIVERING OUR PLAN
Events
*e.g. Kiosks, interactive signage
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Integrated and targeted marketing
• Continued marketing mix reallocation• Digital marketing, social media, part of
everyday focus• Sales to MYER one customers over $2 billion• Over 1,000 MYER one affiliate locations• MYER one customer analysis enables targeted
and relevant offers• Rationalised events program
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Christmas campaign
• Fully integrated campaign across stores, marketing, events and online
• Focus on gift giving• Melbourne Christmas Spectacular• Christmas Windows in Melbourne and Brisbane• Program of in store events in downtown stores
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“Jump in it’s Christmas”
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Reinvigorated Stocktake Sale
• Australia’s biggest Stocktake Sale• New and different creative• Heightened sense of urgency• Integrated approach across all channels
“The countdown begins!”
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Strong Foundations
Agenda• CEO update
– FY2011 financial results
– FY2011 operating highlights
– Delivering our plan
• Customer service
• Omni-channel
– Key focus areas for 2012
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Key focus areas for 2012• New stores and refurbishments• Optimise promotions• Reduce shrinkage• Increase Myer Exclusive Brands mix• Further develop leading omni-channel offer• Strengthen MYER one loyalty program
“Underpinned by improved customer service”
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