OKZ.zw | FY2013 results analyst presentation

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OKZ.zw | FY2013 results analyst presentation

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OKZ.zw | FY2013 results analyst presentation

  1. 1. Full year results for the year ended 31 March 2013Presentation to Analysts12 June 2013
  2. 2. Presentation OutlineItem PresenterIntroduction V.W. ZirevaGroup Performance Highlights V.W.ZirevaGrowth Initiatives A.R. KatsandeFinancials A.E.SiyavoraOutlook V.W. Zireva
  3. 3. Size of OperationF12 F1344 457 7253254Number of Outlets
  4. 4. 4 028Number of StaffSize of Operation (cont’d)
  5. 5.  Revenue US$479.6 million up 16.3% EBITDA US$22.45million up 12.6% Profit after tax US$12.38 million up 20.1% Earnings per share 1.2 cents up 17.8% Final dividend 0.40 cents; full year dividend 0.60 cents up 20% Capital expenditure US$12.1million 5% Total assets US$116.3 million up 24.7%Company Performance Highlights
  6. 6. •Acceptable growth in revenue and earnings in an environment ofvery low inflation at 2.8% per annum with GDP growth of lessthan 5%.•A poor agricultural season•High & increasing unemployment•Tighter liquidity limiting demand•Relatively high interest ratesCompany Performance Highlights
  7. 7. Strategic initiatives
  8. 8. Driving the OK differenceCulture of continuous innovation and improvement Good skills base - senior & middle management Growing talent pipeline- retail management & graduate programmesStrong consumer loyalty and trust National pricing policy- one price nationwide Good merchandise availability Strong consistent promotionsGood and improving operational efficiencies Simple in-store processes with functional equipment Good supply chain management Focus on return on capital in all projectsWider and improved offering Good store ambience with improved and expanded offering – all refurbishments Category development in Food, C&T, House Wares, House & Home & Hitech Financial services adding a new dimension to Shop Easy cardsSTRATEGY DRIVING OUR PERFORMANCE
  9. 9. Growth initiativesOK Zimbabwe has invested in:ValueQualityServiceLower prices through sourcingInnovationStore networkMulti-channel sellingListening to customer insights
  10. 10. Striding AheadCCapacity Development
  11. 11. Store Refurbishment ProgrammeOK Masvingo, OK Kwekwe, Bon Marche Belgravia,OK Chiredzi, OK Queensdale, OK Avonlea, OK Mbare, OK Machipisa,Bon Marche Mt Pleasant, Bon Marche Chispite & Bon MarcheBorrowdaleBon Marche Avondale, OK Marimba, OK Five Ave, OK Lobengula,OK OK Kadoma & OK Chinhoyi`Capacity development reviewF137StoresF128StoresF113Stores
  12. 12. New StoresCapacity development reviewF11 F12 F130 4 1OK Mart Hre OK Victoria FallsOK Mart ByoOK Kwame NkrumahBon Marche Westgate
  13. 13. Our brands and our promotions
  14. 14. HOUSE BRANDS
  15. 15. SHOPPERS CHOICE
  16. 16. Top Notch
  17. 17. Winning the customers’ hearts withpromotions which change lives
  18. 18. EXCITING THE MARKET THROUGH LIFE CHANGING PROMOTIONSOK GRAND CHALLENGEOK BIG VALUELIVE IT UP FIESTABRILLIANT BUYS
  19. 19. •OUR IN-HOUSE IT SYSTEMS HAVE GIVEN US AN EDGE•CONTINUED DEVELOPMENT HAS SEEN US FULLY INTEGRATING ALLOPERATIONS: –Procurement & Supply Chain,Finance,Store Operations,Distribution Centre & Logistics,Inventory Management,Financial ServicesWebstores- OKmart, up and runningOK & Bon Marche in developmentTechnology
  20. 20. Bon MarchePower WalkLeading from the frontThe healthy way•Quarterly health PowerWalks•Quarterly AerobathonsCORPORATE SOCIAL RESPONSIBILITY
  21. 21. CORPORATE SOCIAL RESPONSIBILITYCommunity tree nurseries
  22. 22. •F 13 Results•Performance review•Balance Sheet•Cash Flow
  23. 23. Statement of Comprehensive Income for the year 31 March$ millions 2013 2012 Change %Revenue 479.6 412.6 16.3Net sales 478.9 412.1 16.2Underlying operating profit 17.6 15.4 14.4Net finance charges (0.74) (0.44) (68.7)Tax charge (4.5) (4.7) 3.3Attributable Income 12.4 10.3 20.1Other comprehensive income (net) 1.1 1.4 (0.2)Total comprehensive income for the year 13.5 11.7 15.4EBITDA 22.5 20.0 12.5
  24. 24. Ratios and metrics2013 2012 Change %Net Sales 478.9 412.1 16.2Gross margin 17.2% 16.9%Overheads % sales 13.6% 13.3%Underlying operating profit margin 3.7% 3.7%Net Income margin 2.6% 2.5%EBITDA margin 4.7% 4.8%Tax Rate 26.8% 31.2%ROCE 25.3% 24.8%Net sales m2 6 067 5 308
  25. 25. Share Performance2013 2012 Change %# Ordinary shares in issue (millions) 1 036.7 1 015.5 2.1Share performance (cents):-Attributable earnings 1.19 1.01Headline earnings 1.19 1.02Diluted earnings 1.06 0.90Dividend per share 0.60 0.50Net asset value per share 5.44 4.68
  26. 26. • Sales growth of 16.2% ahead of inflation of +/-3% and GDP of 4%> leveraging our portfolio of store brands> the impact of our promotions> improved facilities and offering• Gross margin to 17.6% (2012 : 16.9%) - competitive pressure endures and higherconsumption of low margin basic items continues. Improvement from betterprocurement.• Overheads up 19.2% which was higher than sales growth> advertising and promotional expenses to compete for retail $> more staff engaged to provide adequate service in improved facilities andbroadened product offering. Benefits will be reaped in due course.> more use of the Distribution Centre to supply branches with importedproduct received centrally> High cost of utilities> Cost of security> depreciation of newer equipment• Stock holding more than forecast sales; to align after the Grand Challenge• Capital expenditure $12.1 million (2012: $11.5 million)• Cash position good – balance $15.6 million (2012 $11.7 million)Commentary
  27. 27. Review of performance:-shrinkage controlShrinkage %of salesShrinkage$ millions12 months to 31 March 2013 0.8 2.312 months to 31 March 2012 0.7 2.112 months to 31 March 2011 1.0 2.212 months to 31 March 2010 2.5 3.8
  28. 28. Financial review187.5257.4412.6479.6- 100.0 200.0 300.0 400.0 500.0 600.02010201120122013Revenue $ millions
  29. 29. Revenue growth%37.360.316.20.0 10.0 20.0 30.0 40.0 50.0 60.0 70.02010201120122013Revenue growth %
  30. 30. Financial review $ millions1.25.315.417.60 2 4 6 8 10 12 14 16 18 202010201120122013Operating profit $ millions
  31. 31. Financial review $ millions6.28.920.022.5- 5.0 10.0 15.0 20.0 25.02010201120122013EBITDA $millions
  32. 32. Financial Review9.613.024.825.3- 5.0 10.0 15.0 20.0 25.0 30.02010201120122013Return on capitalemployed %
  33. 33. Summary Statement of Financial Position as at 31 March$ million 2013 2012 Change %Property, plant & equipment 46.0 36.8 25.0Goodwill 0.4 0.4 0Long-term investments 0.3 0.2 9.7Inventories 49.2 42.3 16.2Trade & other receivables 4.9 1.8 171.8Cash & cash equivalents 15.6 11.7 33.3Deferred tax (6.4) (4.8) (33.6)Debt (7.0) (5.0) (40.0)Trade and other payables & provisions (46.5) (35.9) (29.4)Net assets 56.4 47.5 18.7Stock turn 8.7 9.6
  34. 34. Cash Flow at 31 March2013 2012Cash from operating activities 23.2 18.4Finance costs (0.7) (0.4)Tax payment (3.5) (3.0)Dividend payment (5.6) (3.7)Net cash from operations 13.4 11.3Net cash invested (11.9) (11.4)Net funding 2.4 5.2Cash brought forward 11.7 6.5Cash balance at year end 15.6 11.7
  35. 35. Outlook
  36. 36. •GoodOUTLOOKThe Future
  37. 37. OUTLOOK•SUBDUED BUSINESS ACTIVITY IS EXPECTED TO CONTINUE FOR THEREMAINDER OF THE CALENDAR YEAR. THINGS MAY TURNIN THE LAST QUARTER OF OUR FINANCIAL YEAR AFTER ELECTIONS.-THE MARKET WILL REMAIN COMPETITIVE BUT THE COMPANY IS WELL PLACEDTO WEATHER THE STORM. SUSTAINED EARNINGS GROWTH WILL BEACHIEVED THROUGH CLEAR LEADERSHIP, EFFICIENT PROCUREMENT,MERCHANDISE RANGE, SERVICE, QUALITY, STORE NETWORK, ONLINE CHANNELS,PRODUCTIVITY IMPROVEMENT ACTIVITIES AS WELL AS ENHANCED TOTALOFFERING.•FOCUS WILL BE ON MARKET SHARE GROWTH AND EFFICIENT USE OF EXISTINGCAPACITY-TARGET GREATER SHARE OF CUSTOMER SPEND-EXPAND SERVICES LEVERAGING ON GOOD IT SKILLS•NEW STORE DEVELOPMENT AND MAINTENANCE OF REFURBISHMENT PACE
  38. 38. New Stores in financial year F14OK Wynne StreetOK ChitungwizaBon Marche’ Eastlea (Relocation)OK HwangeCapacity Development
  39. 39. New store on Wynne Street OKWynne Street picture
  40. 40. Capacity DevelopmentOpened Today 12 June 2013New OK at Chitungwiza Town Centre
  41. 41. •GoodHiCOMING SOONOK HWANGE CURRENTLY UNDER CONSTRUCTION
  42. 42. OUTLOOKREGIONAL EXPANSION IS NOW IN OUR RADARRegistration is in progress in one of the neighbouring countriesSites have been identified & negotiations are taking place.
  43. 43. Planned Store Refurbishments•Three full refurbishments :OK WaterfallsOK Houghton Park- ExpansionOK Bindura•Partial Refurbishment:OK GweruOK MutareOKmart HarareOUTLOOK
  44. 44. New Business Even on the ground our parachuteflies!OK Money WaveMulti franchised money transfer agencyStandard Bank- SAFirst National Bank - SAMukuruEcocashTextacashElectricity VouchersThree Pilot sitesOK Fife & OK Marimba & OK Ngezi
  45. 45. TATENDATHANK YOUSIYABONGA

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