Please don’t Germany Analyst and Investor Day Hamburg, 17 June 2016
Today’s Itinerary Please don’t 8:45AM – 10:00AM Management Presentation & Q&A 10.15AM – 10.45AM Tour of Jawoll store in Soltau 11.00AM – 11.30AM Tour of Jawoll Distribution Centre 11.30AM – 1.00PM Lunch – drive to Stade 1.00PM – 1:30PM Tour of Jawoll Stade (smaller format store) Travel to Hamburg Airport 1.30PM – 3.00PM Ref: 750493 2 June 2016 – Germany Analyst and Investor Day
Today’s Presentation Please don’t Presenter 8:45AM – 9:00AM I. Rationale for the Jawoll Acquisition Simon Arora, B&M Group CEO 9.00AM – 9.40AM II. Jawoll’s history and growth plans Ingo Stern, Jawoll CEO Nils Hansen, Jawoll CFO III. Financial Performance Paul McDonald, B&M Group CFO 9.40AM – 10.00AM IV. Q&A Ingo Stern / Simon Arora Ref: 750493 3 June 2016 – Germany Analyst and Investor Day
I. Rationale for the Jawoll Acquisition 4 4
Jawoll: a good platform Please don’t B&M ACQUIRED 80% OF JAWOLL IN APRIL 2014, REMAINDER OWNED BY JAWOLL MANAGEMENT TEAM 1 Jawoll is a successful regional retailer that delivered consistent growth and profits 2 Jawoll business model is similar to B&M, a discount variety good retailer with significant store roll out opportunity 3 Jawoll is well positioned to expand in the General Merchandise discount market in Germany through shared best practice with B&M Ref: 750493 5 June 2016 – Germany Analyst and Investor Day
Jawoll is a successful, growing business Please don’t ( € m) Jawoll opened 2 / 3 stores per year on average since 2007… …and delivered healthy margins. 56 17 50 49 48 2 45 14 42 41 12 12 182 36 163 2 27 155 154 146 143 141 9.3% 9.0% 7.6% 7.6% 113 105 1 2 1 2 2007 2008 2009 2010 2011 2012 2013 FY 2015 FY 2016 2012 2013 2015 2016 Net sales ( € m) Stores Ajusted EBITDA ( € m) % Adj. EBITDA Acquisition of a 11 months ending small chain Hafu March 2015 1 Years 2007 to 2013 are December Year-ends and German GAAP 2 FY15 (11 months) and FY16 are March Year-ends and IFRS Ref: 750493 6 June 2016 – Germany Analyst and Investor Day
Store roll-out opportunity exists even in Core Region Please don’t REASONS FOR NOT VISITING, GIVEN BY THOSE AWARE OF JAWOLL, (2014 ONLINE SURVEY, N=483) Other The products are • Despite modest store footprint, there is 32% 16% poor quality awareness of Jawoll brand in its Core North 3% 3% I prefer to visit a West Germany Region 12% different store 68% Not aware Another store is more convenient for me • Two thirds of those aware of Jawoll do not No nearby have a convenient store nearby Aware 32% 67% Jawoll store North-West region Aware of Jawoll Note: Core region is North-West Germany including Niedersachsen and Schleswig-Holstein Ref: 750493 7 June 2016 – Germany Analyst and Investor Day
Jawoll and B&M share key structural similarities Please don’t MEANING WE CAN LEVERAGE SYNERGIES… JAWOLL MODEL IS COMPATIBLE WITH B&M’S 1 Comparable store size and locations to B&M Homestore model • Direct Sourcing in Far-East • Buying scale & relationships 2 • Merchandising know-how & Strong overlap in product categories across both retail disciplines businesses • Roll-out experience 3 Similar financial metrics, at store and central level …PARTICULARLY AS WE BUILD SCALE. Ref: 750493 8 June 2016 – Germany Analyst and Investor Day
Both B&M and Jawoll are similarly positioned in large markets Please don’t SPECIALIST RETAILERS SPECIALIST RETAILERS € 210bn 1 £129bn ¹ € 2bn 1 £7bn ¹ £163bn ¹ € 195bn 1 FOOD RETAILERS GENERAL MERCHANDISE DISCOUNTERS FOOD RETAILERS GENERAL MERCHANDISE DISCOUNTERS 1 Source: Company estimates Ref: 750493 9 June 2016 – Germany Analyst and Investor Day
There is no dominant discount variety retailer Please don’t Company Revenues Store Numbers ( € m) 1 350 250 182 56 OOT 110 118 100 56 70 40 467 1,293 330 In- 300 town 116 206 95 181 66 177 Ref: 750493 10 1 Jawoll estimate of Retail Revenues – Thomas Philipps is a franchise business June 2016 – Germany Analyst and Investor Day
Jawoll is well positioned to expand nationally Please don’t Jawoll is a profitable business, which delivers Jawoll will increasingly target the Category attractive returns despite its current modest size specialists rather than Grocery Integration has gone well • Jawoll can now access B&M’s Far East supply chain • Invested in IT and physical infrastructure ahead of future growth • Expanded buying and new store development teams (12 hires) Jawoll is now drawing on B&M best practices… • Progressively reducing SKU count (now c. 10,000 SKU’s, down from c.15,000 SKU’s) • Successfully launched smaller store format • Introducing Auto-Replenishment and Merchandising Principles … and can rely on its own strengths. • Jawoll buying team selects the product offer • Retains expertise in plants and flowers category • Continued success in direct marketing / leafleting campaigns Ref: 750493 11 June 2016 – Germany Analyst and Investor Day
II. Jawoll’s history and growth plans 12 12
The Jawoll team Please don’t INGO STERN NILS HANSEN RALF HARTWICH Managing Director Finance Director Trading Director • Ingo joined Jawoll in 2000 and has been the • Nils joined Jawoll as Finance Director in 1999. • Ralf joined Jawoll in 1997 and has been the Chief Executive Officer of Jawoll since 2007. • He has over 16 years of experience in Trading Director since 2007. • He has over 30 years of experience as a buyer • He has over 20 years of experience in the accounting and finance in retail. in the German retail industry. German retail industry. Current Senior Management Organization chart CEO FINANCE OPERATIONS PROPERTY TRADING DIRECTOR DIRECTOR DIRECTOR ACQUISITION (2) BUYING LOGISTICS IT REGIONAL (25) MANAGER MANAGER TEAMS Ref: 750493 13 June 2016 – Germany Analyst and Investor Day
Jawoll’s history Please don’t COMPANY HISTORY Mr Dieter Stern opens the first Consolidation of distribution Acquisition and Integration of Introduction of a new ERP Jawoll store in Soltau between the four partners a small chain (HAFU) 1985 1987 2000 2007 2008 2009 2012 2014 Progressed integration of Association of local retailers Ingo Stern and Ralf Hartwich Jawoll stores & expanded DC Jawoll becomes part of B&M. under the Jawoll brand take over the business capacity …AND GENERATING HEALTHY MARGINS JAWOLL KEPT GROWING… • 56 Jawoll has consistently generated healthy EBITDA margins since 2007. 50 49 48 45 • 42 Jawoll operates in OOT retail parks and stand-alone stores, usually near 41 182 36 mainstream hypermarkets and specialist retailers. 163 2 27 155 154 146 143 • 141 The Jawoll brand enjoys strong recognition in its catchments through extensive marketing activity over many years. 113 105 • Jawoll benefits from a loyal and experienced team of 1,200 colleagues. 2 1 2007 2008 2009 2010 2011 2012 2013 FY 2015 FY 2016 Net sales ( € m) Own stores 11 months ending March 2015 1 Years 2007 to 2013 are December Year-ends and German GAAP Ref: 750493 14 2 FY15 (11 months) and FY16 are March Year-ends and IFRS June 2016 – Germany Analyst and Investor Day
Customer Profile and Shopping Behaviours Please don’t Typical Jawoll customers include two particular profiles 1 2 Low income earners Hobby gardeners & home DIY • • Average household disposable income of c. € 32k in Germany 1 Gardening is amongst the most popular outdoor activities in Germany • • Loyal weekly shoppers (c.30% of Jawoll clients visit every week 1 ) More occasional shoppers, looking for value items and Seasonal purchases • • Price sensitive Car users • • Car users Biased towards older demographic MOST CUSTOMERS MISSIONS ARE PLANNED AND REGULAR Jawoll customers missions are similar to other OOT peers Observed frequency of visit 1 Just passing by 11% 13% Less than once a 24% General browsing month 24% Weekly for deals 20% 30% 31% Follow-up on 30% advertisement Planned Purchases Average basket Buy a specific 34% 32% € 17.70 item 1-3 times 1 2 Jawoll Out of town per month 50% 1 Company estimate Ref: 750493 15 2 OOT includes Jawoll, Thomas Philipps, Pfennigpfeiffer, Posten Boerse and Zimmermann June 2016 – Germany Analyst and Investor Day
Product mix Please don’t BROAD PRODUCT MIX WITH A DIFFERENTIATED PROPOSITION % of net sales, FY16a • Jawoll offers more choice than limited assortment grocers with c.10,000 continuity lines across broad spectrum of categories Food Homewares 18% 23% • On average 4,000 shoppers per week per store. Grocery Non-Grocery Drinks 32% 68% • 4% The Jawoll average basket is € 17.70 FMCG • Seasonal Two trading peaks during the year: 10% 10% • March to June for outdoor, gardening items & plants Clothing & shoes Plants 8% • Christmas and New-Year, with a particular strength in fireworks 9.5% Gardening DIY, car & bike 8.5% 9% JAWOLL OFFERS BOTH EVERYDAY AND SEASONAL ITEMS Ref: 750493 16 June 2016 – Germany Analyst and Investor Day
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