McColl ’ s Retail Group plc At the heart of your neighbourhood Preliminary Results 53 weeks to 30 November 2014
IMPORTANT NOTICE This presentation has been prepared by McColl's Retail Group plc (the " Company ") in connection with the publication of the Company’s preliminary results for the 53 weeks ended 30 November 2014. This presentation does not constitute an invitation, offer to sell or any solicitation of any offer to buy or subscribe for any securities in the Company or any of its subsidiaries or associated companies or its or their affiliates (the " Group "). No reliance may be placed for any purpose whatsoever on the completeness or accuracy of the information or opinions contained in this presentation and no member of the Group or any of their respective officers, directors, employees, representatives, agents or advisers take any responsibility for, or accepts any liability in respect of, the accuracy or completeness of such information or opinions. This presentation is directed at and is only being distributed (A) in member states of the European Economic Area to persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC, as amended); (B) in the United Kingdom to persons who have professional experience in matters relating to investments and who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the " Order ") or are high net worth companies, unincorporated associations or partnerships or trustees of high value trusts as described in Article 49(2) of the Order and investment personnel of any of the foregoing (each within the meaning of the Order); and (C) otherwise to persons to whom, or at which, it may otherwise be lawfully made, supplied or directed (each a " Relevant Person "). No other person should act or rely on this presentation and by accepting this presentation you represent, warrant and agree that you are a Relevant Person. This presentation may include statements, estimates, opinions and projections with respect to anticipated future performance of the Group (" forward-looking statements ") which reflect various assumptions concerning anticipated results taken from the Group’s current business plan or from public sources which may or may not prove to be correct. Such forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. As a result, recipients of this presentation should not rely on such forward looking statements due to the inherent uncertainty therein. Forward-looking statements speak only as of the date of such statements and, except as required by the Financial Conduct Authority, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation is not for distribution, directly or indirectly, in whole or in part, in or into the United States of America, Canada, the Republic of South Africa, Australia, Japan or any jurisdiction where it would be unlawful to do so. The distribution of this presentation or any information contained in it may be restricted by law in certain jurisdictions, and any person into whose possession any document containing this presentation or any part of it comes should inform themselves about, and observe, any such restrictions. 2 Preliminary Results 53 weeks to 30 November 2014
McColl’s executive team James Lancaster Jonathan Miller David Thomas Chief executive Chief financial officer Chief operating officer 3 Preliminary Results 53 weeks to 30 November 2014
Agenda 1 Delivering on our promises 2 Record financial performance 3 Good strategic progress 4 Growing convenience market 5 Summary 4 Preliminary Results 53 weeks to 30 November 2014
1 Delivering on our promises 5 Preliminary Results 53 weeks to 30 November 2014
1 Delivering on our promises Record financial performance Total revenue +6.1% to £922.4m Operating profit before exceptional items +13.2% to £25.5m Adjusted EBITDA +9.0% to £37.3m Pro forma earnings per share 16.9p Proposed final dividend 6.8p per share Underlying net debt reduced to £25.7m 6 Preliminary Results 53 weeks to 30 November 2014
1 Delivering on our promises Good strategic progress Accelerated expansion strategy Biggest ever year for development 800 th convenience store opened December 2014 Enhanced chilled and fresh offer Post office modernisation completed 7 Preliminary Results 53 weeks to 30 November 2014
1 Strong track record Operating profit before Revenue (£m) exceptional items (£m) 2014 922.4 25.5 2014 869.4 2013 2013 22.5 844.7 2012 2012 21.3 804.8 2011 2011 19.0 Adjusted EDITDA (£m) Convenience store numbers 2014 37.3 2014 799 2013 34.2 2013 707 2012 33.3 655 2012 2011 31.2 588 2011 8 Preliminary Results 53 weeks to 30 November 2014
2 Record financial performance 9 Preliminary Results 53 weeks to 30 November 2014
2 Financial highlights 2014 2013 Increase restated Revenue £922.4m £869.4m 6.1% 0.7% (1) Like for like sales 2.2% Operating profit before exceptional items £25.5m £22.5m 13.2% Adjusted EBITDA £37.3m £34.2m 9.0% Profit after tax £9.9m £5.1m 92.7% Pro forma earnings per share 16.9p n/a 8.5p (2) Dividend per share n/a Underlying net debt £25.7m £86.2m Adjusted for 53 rd week (1) 10 Preliminary Results 53 weeks to 30 November 2014 (2) Comprising 1.7p paid and 6.8p proposed
2 Increased revenue driving operating profit growth Summary income statement 2014 2013 £m unless stated restated Growth driven by store acquisitions Revenue 922.4 869.4 6.1% and developments Like for like sales 0.7% 2.2% Slight change in margin due to Gross profit 222.8 211.0 5.6% mix Gross profit margin 24.2% 24.3% Administrative expenses (223.0) (213.0) 4.7% Continued control of costs Administrative expenses/revenue 24.2% 24.5% Positive impact of post office Other operating income 25.7 24.5 4.9% developments Operating profit before 25.5 22.5 13.3% exceptional items Adjusted EBITDA 37.3 34.2 9.1% Adjusted EBITDA margin 4.0% 3.9% 11 Preliminary Results 53 weeks to 30 November 2014
2 Positive sales growth Current period sales growth % 6.0 5.0 5.1 4.8 4.0 4.3 4.1 3.0 3.2 2.0 2.2 1.0 1.0 0.7 0.0 -0.5 -1.0 -1.0 -2.0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total year LFL sales growth (adjusted for 53rd week) Total sales growth (adjusted for 53rd week) 12 Preliminary Results 53 weeks to 30 November 2014
2 Reduced finance costs boost net profit Summary income statement 2014 2013 £m restated IPO costs £(1.8m), share based Operating profit before exceptional items 25.5 22.5 payment £(5.5)m, property provisions £(2.4)m, net PO Net exceptional items (3.4) - income £6.3m Operating profit 22.0 22.5 Significant reduction post IPO Net finance costs (6.2) (13.0) Net exceptional finance costs (3.2) (5.6) Profit before tax 12.6 4.4 Taxation (2.7) 1.3 2014 effective tax rate 21.6% Profit after tax 9.9 5.1 13 Preliminary Results 53 weeks to 30 November 2014
2 Shareholder returns Earnings and dividend per share Basic earnings per share 10.2p 6.9p Full year earnings per share Adjusted basic earnings per share 15.6p 12.6p pro forma for new capital Pro forma earnings per share (A) 16.9p n/a structure Interim dividend paid 1.7p n/a Current period dividend paid Final dividend proposed 6.8p n/a pro rata for the period post Total dividend for period 8.5p n/a IPO Full year equivalent (B) 10.2p n/a Pay out ratio (B/A) 60.0% n/a 14 Preliminary Results 53 weeks to 30 November 2014
2 Strong cash flow funding increased capex Cash flow 2013 2014 £m restated Adjusted EBITDA 37.3 34.2 Cash impact of exceptional items 2.0 0.0 Working capital inflow of £9.4m Tax paid (2.4) (3.6) adjusting for impact of 53 rd week Change in working capital (2.3) (2.2) Operating cash flow 34.6 28.4 Net capital expenditure (20.7) (10.9) Significant reduction in cash Net interest paid (4.2) (10.4) interest Dividend paid (1.8) - Net cash generated 7.9 7.1 Primary IPO proceeds utilised in Net changes to capital structure (20.0) (35.8) current period to repay mezzanine Net cash flow (12.1) (28.7) loan 15 Preliminary Results 53 weeks to 30 November 2014
2 Increased capex reflecting accelerated development Capital expenditure 2014 2013 £m 60 new stores acquired Acquisition of businesses 16.8 5.4 Freehold property 2.1 - Includes acquisition refits as well as Store conversions and refits 8.2 7.3 premium convenience, food and Maintenance capex 3.7 3.1 wine and PO conversions Other 1.2 0.4 Disposal proceeds (11.3) (5.3) Principally disposal of acquired Net capital expenditure 20.7 10.9 freeholds on sale and leaseback Less: inventory acquired within (1.4) (0.3) business acquisitions 19.3 10.6 16 Preliminary Results 53 weeks to 30 November 2014
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