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The Warehouse Group Limited 1999/00 Financial Year Results Presentation. Agenda. Financial results summary The Warehouse review The Warehouse operations Warehouse Stationery review Australia Current Trading. FY2000 Group Highlights. FY00 FY99 % Sales 1.075b 0.933b +15.3%

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The Warehouse Group Limited

1999/00 Financial Year

Results Presentation


Agenda
Agenda

  • Financial results summary

  • The Warehouse review

  • The Warehouse operations

  • Warehouse Stationery review

  • Australia

  • Current Trading


Fy2000 group highlights
FY2000 Group Highlights

FY00 FY99 %

Sales 1.075b 0.933b +15.3%

Same store sales 10.7% 13.4%

EBIT 111.3m 85.2m +30.7%

NPAT 70.5m 54.4m +29.5%

EBIT Margin 10.4% 9.1% +130bp

EPS1. 24.3c 18.9% +28.6%

Ordinary DPS2. 12.5c 9.5c +31.6%

1. Based on average number of shares

2. Adjusted for 1:1 bonus issue


The warehouse group sales growth in the decade
The Warehouse Group Sales growth in the decade

Sales ($m)

$1billion sales target surpassed in FY2000


The warehouse group profit growth in the decade
The Warehouse Group Profit growth in the decade

NPAT ($m)

29.5% increase in NPAT to $70.5m


The warehouse group eps growth
The Warehouse Group EPS growth

EPS 1.

28.6% increase in EPS

1. Adjusted for 1:1 bonus issue, based on weighted average shares on

issue during the year


The warehouse group ebit margin in the decade
The Warehouse Group EBIT margin in the decade

EBIT % (EBIT/Sales)

EBIT in excess of 10%


Financial performance summary
Financial Performance Summary

Year Ended

31 July ($m)

2000

1999

% Change

Retail Sales Revenue

E B I T

Excl. unusuals

Incl. options scheme

Pre-tax Profit

Net Profit After Tax

1,075.3

111.3

1.5

(3.1)

108.1

70.5

932.8

85.2

0.2

(1.6)

82.5

54.4

+15.3%

+30.7%

+31.0%

+29.5%


Financial performance summary unusual items
Financial Performance Summary - Unusual Items

Year Ended 31 July 2000

$m

Property Sale Profits

Australia (preliminary acquisition costs)

Business origination costs

Goodwill amortisation

Tax

Post Tax

5.6

(2.2)

(1.6)

(0.3)

1.5

(1.3)

0.2


Financial performance summary inventory
Financial Performance Summary - Inventory

  • Inventory excl GIT of $140m - increase of $24m

  • Made up of

    • increase in mobile phone stock $8m

    • two stores opening early Aug ‘00 $3m

    • WH Stationery stock increase $4m

    • ($3.2m relates to new/extended/planned stores)

    • General increase in stock $9m


Dividends
Dividends

Cents per share adjusted

for bonus issue

  • Total pay-out of 21.5 cents incl. specials (adjusted for 1:1 bonus issue) for 1999/2000

  • Ordinary dividends up 32% to 12.5c (adjusting for BI)

  • No further special dividends planned in the short term


Fy2000 red shed h1 and h2 ebit comparisons
FY2000 Red Shed H1 and H2 EBIT Comparisons


The warehouse

The Warehouse

“Red Sheds”


The warehouse customer statistics
The Warehouse Customer Statistics

YE July FY00 FY99 %

Paying customers 38.3m 35.1m 9.1%

Weekly foot traffic 1.5m 1.4m

Average sale $26.07 25.27 3.2%


The warehouse property
The Warehouse Property

1999/2000 Review

  • 2 new stores (Cambridge, Mt Wellington)

  • 3 replacement stores (Porirua, Wanganui,

  • New Plymouth

  • 14 refurbishment's and 1 extension

  • Retail space 253,717 square metres (up 5.5%)


The warehouse property1
The Warehouse Property

Next 12 months

  • 5 new stores (Queenstown, Rangiora, Belfast

  • (ChCh), Auckland Airport, Hillcrest)

  • 3 replacement stores (Glenfield Mall, Linwood

  • (Chch), Whangaparoa)

  • 15 store refurbishment's and 7 store extensions

  • Total selling space to increase by over 35,000

  • square metres by Christmas 2000 (+13.8%)


The warehouse merchandise
The WarehouseMerchandise

1999/2000 Highlights and Review

  • Apparel sales up 30%

  • Green garden sales up 23%

  • Books up 18%

  • BBQ’s and related Y2K product up 31%

Next 12 months

  • Continue to grow apparel business

  • Sanyo brand to be launched in Warehouse at the end of Oct 2000

  • Bigger push into sporting goods


The warehouse merchandise1
The WarehouseMerchandise

Merchandise Forecasting System

  • Accurate short and long range customer demand forecasts

    • purchase according to forecast demand instead of replacing sales

    • share forecasts with suppliers


The warehouse merchandise2
The WarehouseMerchandise

Merchandise Forecasting System

  • Contribution analysis

    • work with suppliers to improve performance of poor sellers, optimise good sellers

  • Implementation Time

    • Pilot November / December 2000

    • Phased implementation starting Q1 2001


The warehouse operations
The Warehouse Operations

“Back dock” to “Red Bag” review

  • Objectives

    • standardise procedures in store

    • review areas such as price change management, checkout design, communication, Merchandising standards, debtors, returns, repairs, rainchecks and layby, Customer service.

    • 40 projects identified


The warehouse operations1

Improve the checkout processes

Objectives

Reduction in transaction time by over 30%

Improve customer Interaction

Labour cost savings

Enhance Loss Prevention

OSH improvements

Implementation

being rolled out to new stores

retro-fits to selected existing stores

The Warehouse Operations

Sprint Checkouts


The warehouse logistics
The Warehouse Logistics

1999/2000 Highlights and Review

  • NIDC extension completed on time for Christmas ‘99

  • 300% increase in suppliers moving to cross dock (200 suppliers versus 65 in Aug. 1999)

  • Escalation of partnership agenda’s with suppliers

  • Continued to improve forecasting accuracy

Next 12 months

  • Implement 12 major supply chain development projects within Clints

  • Apparel automation project to support next 5 years growth in apparel

  • Integration Merch. Planning with Supply Chain development


The warehouse operational performance
The Warehouse Operational Performance

  • Operations highlights

    • shrinkage down for H2 2000

  • Safety

    • LITFR 1997 - 5.28

    • LTIFR 1998 - 3.07

    • LTIFR 1999 - 1.64

    • LTIFR 2000 - 2.94

      The higher rate in 2000 reflects longer time off period

      per injury rather than an increase in injury frequency

  • Team Member Satisfaction

    • 83% of team members agreed that “The Warehouse is where people come first” (up from 76%)


Warehouse stationery blue sheds
Warehouse Stationery“Blue Sheds”


Warehouse stationery blue sheds1
Warehouse Stationery“Blue Sheds”

1999/2000 Highlights and Review

FY00 FY99 %

Sales 63.1m 45.9m +37.4%

Same store sales 23.3% 29.0%

EBIT 5.0m 3.0m +64.9%

NPAT 3.2m 2.0m +62.5%

EBIT Margin 7.9% 6.6%


Fy2000 blue shed h1 and h2 ebit comparisons
FY2000 Blue Shed H1 and H2 EBIT Comparisons


Warehouse stationery blue sheds2
Warehouse Stationery“Blue Sheds”

1999/2000 Highlights and Review

  • Stores

    • Six stores added in the year

    • retail space 29,062 - up 40%

  • New Categories and initiatives

    • Gateway computers

    • Revamp of four major categories

    • E-Commerce Trial

    • Exploring alternative markets

    • NZ’s first priced stationery catalogue


Warehouse stationery blue sheds3
Warehouse Stationery“Blue Sheds”

The next 12 months

  • Store rollout

    • 7 new stores in FY2001, with 6 in place by Christmas

    • Pukekohe

    • Taupo

    • Paraparaumu

    • Timaru

    • Blenheim

    • Downtown (Auckland)


Australia
Australia

Clint’s and Solly’s

  • acquisition effective from 1 August 2000

  • expect settlement at the end of September 2000

  • debt raising mandate awarded for A$150m Clint’s fund raising

  • buyback of up to A$33m will begin after settlement, planned start of buyback October 2000

  • strategy is to improve infrastructure and systems to provide a sound base for sustainable profitable growth

  • strategy is long term, with benefits coming from year 3

  • seeking ASX Foreign Exempt listing late in 2000


Current trading and future outlook
Current Trading and Future Outlook

Good start to the new financial year

  • Warehouse store total sales up 15% on August 1999

  • Warehouse Stationery total sales up 40% on August 1999

  • Clint’s trading on plan

    Macro conditions:

  • Consumers sentiment rattled by higher petrol prices and increased mortgage interest rates

  • Current trading suggests consumers are still spending but they are being more price sensitive

  • Too early to draw any conclusions about H1 2001


Where everyone gets a bargain

‘Where Everyone Gets a Bargain’

Thank you for your attendance

from the people at The Warehouse


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