Harvey Norman : HVN Presentation of Results for FY20

ANALYST PRESENTATION

FOR THE YEAR ENDED 30 JUNE 2020

Australia	Singapore	Ireland	Malaysia
New Zealand	Slovenia	Northern Ireland	Croatia

CONTENTS

Key Financial Highlights . . . . . . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	. .	3
COVID-19 Update . . . . . . . . . . . . . . . . . . .	. . . . . . . .	.	.	.	.	.5. . . . . .
Reported Profit Before Tax . . . . . . . . . . . .	. . . . . . . .	.	.	.	...	6. . . . . .
Reported Profit Before Tax: Key Contributors	. . . . . . . .	. .	. .	.7. .
Reported Profit After Tax . . . . . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	. .	8
Key Statistics: Balance Sheet . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	. .	9
Review of the Balance Sheet . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	. 10
Review of the Statement of Cash Flows . . . .	. . . . . . . . . .		. .	.	...	11
Overseas Retail Segment . . . . . . . . . . . . . . . . . . . . . . . ... .12. . . .
Overseas Retail Revenue . . . . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	.. 13
Overseas Retail Result . . . . . . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	.. 14
System Sales Revenue . . . . . . . . . . . . . .	. . . . . . . .		. . .	15. . . . . . .
Franchisee Aggregated Sales Revenue . . . . . . . . . . . . . .	.	.	. .	.16
Franchising Operations Segment . . . . . . . . . .	. . . . . . . . . .		. .	.	. 17
Property Segment . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	.. 19
Review of Freehold Property Portfolio . . . .	. . . . . . . .	. .	. .20. . . .
Review of Leasehold Property Portfolio . . . . .	. . . . . . . . . .		. .	.	. 21
Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . .		. .	.	. 22
Questions . . . . . . . . . . . . . . . . . . . . .	. . . . . . .	.	.	.	23. . . . . . .

KEY FINANCIAL HIGHLIGHTS

3

HARVEY NORMAN® HOLDINGS LIMITED

NET ASSETS

REPORTED PBT

$661.29m

$86..73m ( 15.1%) FROM $574..56m IN 2019

REPORTED PROFIT AFTER TAX & NCI

$480.54m

$78..22m ( 19.4%) FROM $402..32m IN 2019

EBITDA

$944.67m

$256..07m ( 37.2%) FROM $688..60m IN 2019

EBIT

$721.08m

$117..74m ( 19.5%) FROM $603..34m IN 2019

Excluding AASB 16 net impact

PBTand net property revaluations

$635.60m

$131..35m ( 26.0%) FROM $504..26m IN 2019

Excluding AASB 16 net impact PROFIT AFTER TAX & NCI and net property revaluations

$462.16m

$109.08m ( 30.9%) FROM $353.09m IN 2019

EBITDA	Excluding AASB 16 net impact
and net property revaluations
$742.47m

$124..18m ( 20.1%) FROM $618..30m IN 2019

EBIT	Excluding AASB 16 net impact
and net property revaluations
$654.86m

$121..82m ( 22.9%) FROM $533..04m IN 2019

$3.5 billion

up $279.53 million ( 8.7%)

$3.0 billion

FREEHOLD PROPERTY

PORTFOLIO

NET CASH FLOWS FROM

OPERATING ACTIVITIES

$1.1 billion

up $684.12 million ( 183%)

PBT RETURN ON NET ASSETS

19.02%

NET DEBT TO EQUITY: NIL

	UNUSED, AVAILABLE
NET CASH OF $15.35m vs NET DEBT OF $626.47m in FY19	FINANCING FACILITIES OF
$685m
AN IMPROVEMENT OF $641.83m
	AS AT 30 JUNE 2020

TOTAL SYSTEM SALES REVENUE

$8.46 billion AGGREGATED HEADLINE FRANCHISEE SALES REVENUE* . . $6.16bn COMPANY-OPERATEDSALES REVENUE . . . . . . . . . . . . . . . . . . $2.29bn

* Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity.

HNHL CONSOLIDATED REVENUES

3.55 billion	. . . . . . . .REVENUES AND OTHER INCOME ITEMS . . .	. . $195.00m
$	SALES OF PRODUCTS TO CUSTOMERS . . . . . . . . . . . .	. . . . $2.29bn
REVENUE RECEIVED FROM FRANCHISEES . . . . . . . .	$1,055.87m

up from 18.0% in 2019

BASIC EARNINGS PER SHARE

39.19c

from 33.94c in 2019

DIVIDENDS PER SHARE

(Fully-Franked)

24.0c

KEY FINANCIAL HIGHLIGHTS (continued)	4

Property

• 30 June 2020: 194 franchised complexes in Australia and 96 company-operated stores overseas.
• Robust $3 billion property portfolio, consisting of freehold investment properties in Australia, owner-occupied land and buildings in New Zealand, Singapore, Slovenia, Ireland and Australia and joint venture assets.
• 5 new company-operated stores opened during the first half of FY20 in Malaysia at Mid Valley South Key, Johor Bahru (July 2019), AEON Mall, Kota Bahru (October 2019), IPC Toppen, Johor Bahru (November 2019), Ipoh Parade, Ipoh (November 2019) and Batu Kawan, Penang (December 2019).
• The remaining 5 stores that were due to open in the second half of FY20 in Malaysia (2), Singapore (1) and Ireland (2) did not occur as planned due to the government lockdowns and business closures in response to COVID-19.
• 1 new company-operated store opened in Takanini in South Auckland, New Zealand (March 2020)
• We intend to open up to 12 new stores overseas during FY21.
  Galway City store already opened in Ireland on 22 July 2020 and the Sligo store is anticipated to open in October 2020.
  Pula store in Croatia on track to open in November 2020.
  3 new stores to open in Singapore before December 2020.
  3 new stores to open in Malaysia between October 2020 and May 2021.
  3 new stores/outlets in New Zealand by December 2020.
• We anticipate recommencing the premium refit plan in FY21.

Mid Valley Southkey, Johor Bahru		AEON Mall, Kota Bharu		IPC Toppen, Johor Bahru		Ipoh Parade, Ipoh		Batu Kawan, Penang		Takanini, Auckland