B&M: Annual Sales Close In On £5bn

• Strong growth and disciplined delivery in FY23, excellent profitable momentum into FY24

B&M European Value Retail S.A., the UK's leading variety goods value retailer, today announces its Preliminary Results for the 52 weeks to 25 March 2023.  

HIGHLIGHTS

• Group revenues of £4,983m were 30.7% ahead of pre-pandemic FY20 levels on a constant currency(1) basis
  
  
• Group adjusted EBITDA(4) (pre-IFRS 16) of £573m normalising from COVID boosted FY22 of £619m; in line with guidance and significantly ahead of pre-pandemic FY20 levels of £342m

• Group adjusted EBITDA(4) (pre-IFRS 16) margin of 11.5% has stepped up compared to the 9.0% achieved in FY20. Group adjusted EBITDA4 (post-IFRS 16) was £796m (FY22: £828m)
  
  
• Group cash generated from operations was £866m (FY22: £598m), year-on-year ("YoY") growth of 44.8% reflecting planned stock reductions of £99m YoY and inventory discipline

• Group statutory profit before tax of £436m (FY22: £525m) with statutory diluted earnings per share 34.7p (FY22: 42.1p)

• B&M UK LFL customer transaction numbers increased every month since June - demonstrating underlying growth and widening of appeal

• B&M UK fascia(2) revenue increased by 4.0% YoY, driven by one-year like-for-like(3) ("LFL") revenue increase of 0.7% and the increase in space through new store openings. Q4 LFL run rate of 3.2%, exiting the year with momentum

• B&M UK fascia adjusted EBITDA4 % (pre-IFRS 16) normalised to 12.4% (FY22: 14.4%), with a full year trading trading gross margin(8) % reduction of 148 bps. Trading gross margins significantly improved into the second half versus the first, with a 92 bps reduction versus last year

• 707 B&M stores in the UK with 21 gross new store openings offset by 15 closures and relocations. Total average selling area increased by 3.6% with relocated stores providing typically 3x greater sales square footage helping drive total sales growth from relocations

• Sales in France increased by 22.1% YoY with adjusted EBITDA4 (pre-IFRS 16) of £41m (FY22: £32m), representing a margin of 9.6% (FY22: 9.2%) further evidences the continued strategic and operational progress as product ranging is evolved

• Sales in Heron Foods increased by 18.1% YoY with adjusted EBITDA4 (pre-IFRS 16) of £30m (FY22: £23m), representing a margin of 6.1% (FY22: 5.5%) which underlines the attraction of our convenience discount offering to customers

• In the first 9 weeks of FY24, B&M UK LFL sales have run at 8.3%, France and Heron continue their trading momentum and we expect full year Group adjusted EBITDA4 (pre-IFRS 16) to be higher than FY23

• Year-end net debt(5) of £724m, with net debt5 to adjusted EBITDA4 leverage ratio (pre-IFRS 16) of 1.3x (FY22: 1.3x)

• Recommended final dividend(6) of 9.6p per share (FY22: 11.5p), bringing the full year ordinary dividend to 14.6p per share (FY22: 16.5p) in addition to the 20.0p special dividend(6) paid in January 2023 (FY22: 25.0p)

Alejandro Russo, Chief Executive, said, 

"FY23 has been another year of strong underlying progress for B&M and the long-term future looks very positive. It has also been a year of planned management transition. Simon Arora has stepped down after 19 years of leading this business and we thank him and wish him well for the future. 

B&M has many years of profitable growth ahead, to be delivered through our four channels of growth (existing B&M UK stores, new B&M UK stores, France and Heron) and in delivering this growth, B&M will generate cash and compound earnings growth for our shareholders. We are actively responding to the short-term pressure on consumers from the cost-of-living crisis, with a relentless focus on price and value. A strengthened management team and the hard work of our 39,000 employees executing our unchanged strategy will help us deliver in the current financial year. We expect to grow sales and profits in FY24, despite economic uncertainty."

Financial Results 

1.   Constant currency comparison involves restating the prior year Euro revenues using the same exchange rate as that used to translate the current year Euro revenues.

2.   References in this announcement to the B&M UK business includes the B&M fascia stores in the UK except for the 'B&M Express' fascia stores. References in this announcement to the Heron Foods business includes both the Heron Foods fascia and B&M Express fascia convenience stores in the UK. When reporting adjusted EBITDA, B&M UK also includes the corporate segment as referred to in Note 2 of the financial statements, an adjusted loss of £1m (FY22: profit of £1m).

3.   One-year like-for-like revenues relate to the B&M UK estate only (excluding wholesale revenues) and include each store's revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding part of FY22. This 14-month approach has been adopted as it excludes the two-month halo period which new stores experience following opening. Three-year like-for-like revenues also relate to the B&M UK estate only, and includes each store's revenue for that part of the current period that falls at least 38 months after it opened compared with its revenue for the corresponding part of FY20.

4.   The Directors believe that our adjusted figures - as described in Note 1 of the financial statements - provide users of the accounts with measures of performance which are appropriate to the retail industry and presented by peers and competitors. Adjusted values are considered to be appropriate to exclude unusual, non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with an additional metric to compare periods of account. See Note 3 of the financial statements for further details. Adjusted figures exclude the impact of IFRS 16.

5.   Net debt comprises interest bearing loans and borrowings, and cash and cash equivalents. Net debt was £724m at the year end, reflecting £961m as the value of gross debt netted against £237m of cash.  See Notes 17, 20 and 27 of the financial statements for more details.

6.   Dividends are stated as gross amounts before deduction of Luxembourg withholding tax, which is currently 15%.

7.   Net capital expenditure includes the purchase of property, plant and equipment, intangible assets and proceeds from the sale of any of those items.  These exclude IFRS 16 lease liabilities.

8.   Trading gross margin is considered to be a meaningful measure of profitability as it refers to the measure of gross margin used by management to commercially run the business. It differs to the statutory definition for B&M, which declined 177 bps from 37.4% to 35.7%, due to technical accounting adjustments in relation to the allocation of gains and losses from derivative accounting, storage costs and commercial income, with the derivative adjustments the main factor. 

9.   UK market share is calculated based on the reported revenues of B&M UK and Heron Foods, compared to NIQ Scantrack, Total Store, Total Coverage inc. Discounters, 52 weeks ending 31.12.22.

10. NIQ Homescan, year to March 2023.

Source : B&M

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