B&M European Value Retail S.A.

Morning, everybody. Thank you for coming. And clearly a big thank you to America. Investors, I'm sure it's quite early and you will be listening. So much appreciated, okay? Hopefully the presentation will be fairly short and punchy. And I will try to leave as much time for Q&A at the end. Questions, as always, if you're not here, they will come to Dave and Dave will fire them back at the end. Third presentation, you've seen me here in the first two. We basically introduce different team members. It's a different group today. They will introduce themselves. I will just introduce them with the first name. Gareth, you met him before. Leslie. The two of them will have some interesting bits to share. B&M core business. And then we have Cedric and Vianney. French team. Mark doesn't need introduction. And you will hear from the guys in a couple of minutes, okay? So... Presentation is quite simple. I think you can see it on the screen. I will just concentrate on two or three key points, okay? First half, as you know, double-digit top line growth and EBITDA 16% growth in the half. I'm comfortable with that position entering into the second half. Cash, very well controlled. Mike is going to expand on his section, but what I would like to highlight is the quality of the stock exit in the first half, which gives us a lot of confidence into the entry golden quarter margin performance. The stock is in very good shape exiting the half. Just to anchor that, which is important, we've grown the top line at 10%. And we have almost held stock at cost flat, pounds, half and half. So I think that's a key point heading into golden quarter that shouldn't be lost. Edit the range full year, 620 to 630. We still have 19 weeks to trade. We are in the middle of golden quarter. It's a narrow range. But I think the way to think about that range for the full year is I'm very confident That is a base case. It will not take a lot to breach it. So let me give you a bit of color without getting into the numbers. Franz and Heron have very strong momentum. So it's a big tick. So just to give you some color in here. We never shoot to a midpoint. So you can assume that I shoot to the top end. And this conservative range does not require much more than very low positive single LFL. So if you were to take the last three weeks of the golden quarter guidance I have given you, and that's a big assumption, but if that 4.5% of the last three weeks of golden quarter are sustained into golden quarter, this will be breached at the top end. So three points in there. It's a base case conservative range. Margin performance is entering golden quarter in top shape. Stock is clean. Sell through is where it needs to be. I'm confident. And of course, Mike is going to elaborate very tight. Conservative range. Underpinned by LFL momentum. Very strong gross margin performance. And cost control. Store openings, this has nothing to do with Wilco, by the way. So what gives me the confidence of being able to increase that range is three things. Yes, the pipeline is being built very confidently with a high level of quality site selection, but operationally, where is retail standards Gareth? Where is supply chain? Where is buying flexibility? allows me the confidence to start ramping up store openings. So it's a combination of quality of sites, operational standards, and basically the buying supply chain piece. The key word in here, guys, is not less than. I'm not saying $1,200. It's not less than. And when you look at the RNS, I'm saying, current year 35 and for the next two financial years again I haven't said 45 I've said not less than not less than one point of color you can assume that the store openings into next financial year are going to be heavily front-ended why because the pipeline is ramping nicely you can extrapolate what that means for the P&L. That's a good thing, tick. So I want you to take a couple of messages in here. This range with 19 weeks to go, it's a conservative range, doesn't take much to beat it. I'm just telling you 19 weeks in advance. Baseline, margin momentum tick, stock very clean, and the pipeline actually in good shape. I'm not going to get into this graph, as you know it. I just want to remind ourselves of one key number. Pre-pandemic year, FY20, 342. This range already takes us back to the peak of FY21. So this is a business that has shown discipline on capital, on returns. And we have gone four years from 342 to a range of 620, 630, reach 630. All of those conversations we used to have a year, year and a half ago, was it the pandemic, was it not the pandemic, I think those two charts sum it up for me. Very briefly, I'll expand on stores. They're in pretty good shape. I'm very comfortable how standards continue to increase. The discipline, availability is where it needs to be. Pipeline, we've spoken. France and Hebron continue to motor ahead. I'll answer one quick question straight on. Why is the EBITDA margin of France in the half slightly lower than last year? It's because basically you have a COVID one-off last financial year. So I'm flying the businesses in pretty good shape. Okay. Mike, to you.

Good morning. So I'm going to start with an overview of the P&L. This is, to my mind, a straightforward and strong picture. Firstly, revenue up 10.4%, reflects all three of the businesses growing strongly from our proven strategy. Secondly, gross profit margin up 191 basis points. Two things behind this. firstly the expected improvement in our trading margins if you look at BNM UK our trading gross margin increased by 114 bps which really reflects the quality of the execution of the garden and outdoor season this year we had a clean stock position coming in this year and we've got a clean stock position on exit very importantly the balancing item in there principally is our usual foreign exchange hedge accounting that shifts costs some extent between administration costs and cost of goods sold. As we reported last November, there was an unusually large swing in the prior year comparable. I think if you focus on the trading margin improvement, I think that gives you a particularly fair picture of underlying what we've seen in the business. Moving on to our key measure of profit, adjusted EBITDA. That's up 16.1%. Alongside the higher gross margins we've already talked about, our actual operating costs are growing at a slower rate than revenues. So a strong operating performance overall. So looking at the detail of the revenue, you can see progress in each of the businesses. UK like-for-like growth. up 6.2%, total sales growth up 8.1%, particularly strong first quarter, after which we saw the expected second quarter moderation. As with many retailers, this was also accentuated by the impact of unseasonable weather. As you've seen in the past, in a business that's as dynamic as ours, extrapolating very, very short-term sales growth periods leads you to the wrong conclusion. What is very clear to us is that over time, we're consistently outperforming the UK market, as we have done over the last 12 months. With our continued like-for-like share gain and also our new store openings, we see the UK as having significant long-term growth ahead. France and Heron's revenue growth speaks very much for itself. Both have double-digit like-for-like, underpinning those total revenue growth numbers you see below. Finally, though, the critical metric that we really do focus on is our customer transaction numbers. And once again, I can confirm that they are meaningfully positive for each business in the period. On adjusted EBITDA, I'll just focus on the margins generated. The UK, up from 10.6% to 11.4%, driven by the gross profit margin recovery, together with cost discipline. These are strong margins in the sector. and are an appropriate benchmark to my mind for our future first halves of the year. For France, our margin is up 50 bps to 7.8% on an underlying basis, as Alex has touched on. That's good progress this year and is another step towards moving the French profit margins towards the benchmark level seen in the UK. Helen, 6.6% for the period. Once again, sector leading. Our underlying operating costs are shown on slide 11. So as I've mentioned before, these exclude FX hedge accounting and similar elements that distort the year-on-year operating comparison. This year, we of course had to mitigate the 9.7% increase in UK minimum wage rates and properly serve our transaction volume increases that we've seen. In considering the pressure that we've had to manage here and remembering that employment costs making up more than half our operating cost base, it's great to see the UK coming in with 50 bps lower operating costs year on year. This discipline and cost is particularly evident in France, where the greater sales growth has also driven strong operating leverage within the business. Finally, moving on to cash generation on slide 12. We very much returned to a normal seasonal trading cash flow pattern this year, similar to that which we saw pre-pandemic, with a modest working capital outflow in the first half as we build up high-quality stock to trade our golden quarter. Year on year, our group stock position, Alex mentioned this, is up a little over 2%. Our revenues are up over 10%. That's the discipline we're working with. Our working capital outflow will reverse through to the end of our 52nd week, and we'll maintain our approach of keeping the stock position very much clean and tight. Our CapEx approach has been disciplined, focused on the new stores that drive the proven returns, alongside spending on appropriate maintenance. This is particularly stark, the numbers there, as you note that the consideration for the Wilco's transaction is included within the infrastructure line. And with that discipline on profits, on working capital, on capex, you see, once again, our operating cash generation has been strong, leading to a step down on our net debt and our leverage ratio to 1.1 times. We're therefore declaring a 5.1 pence interim dividend calculated with reference to the top end of our usual payout range of 30 to 40% of after-tax profit. So finally, just to sum up before handing back to Alex, a few points of emphasis for me. Firstly, revenue growth. Total of 10.4% for the period, driven in the right way by increased customer transaction numbers. Secondly, discipline. For me, that's discipline in the cost base, discipline in the stockholding, discipline in the capital that we're investing. And thirdly, that means that's generating the free cash flow. On that debt, £36 million lower year on year after the right investment in the business's growth. and also after £345 million of dividend payments in the last 12 months. So that's over £380 million of cash generated in the last 12-month period. We're going to focus on these points as we go forwards through the remainder of the financial year and beyond. Thank you. Back to you, Alex.

Thank you, Mike. Gareth, if you've leaked the screen, you kick us off with BNM UK.