91WZ Morrison.wm 31

TIDM91WZ

RNS Number : 1625H

Morrison(Wm.)Supermarkets PLC

04 April 2022

Date: 4 April 2022

WM MORRISON SUPERMARKETS LIMITED

INVESTOR UPDATE

Wm Morrison Supermarkets Limited (formerly Wm Morrison Supermarkets PLC) (the "Company" and together with its consolidated subsidiaries, the "Group", "Morrisons", "we" or "our") announces the following updates regarding certain financial data, current trading and non-financial data to investors.

Financial Data

-- The Group released the audited consolidated financial statements of the Group for the 39 weeks ended 31 October 2021 prepared in accordance with UK-adopted International Financial Reporting Standards and the applicable legal requirements of the Companies Act 2006 and IFRS adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union available at: www.morrisons-corporate.com/investor-centre/financial-reports

-- The Group released the unaudited condensed consolidated interim financial statements of the Group for the 13 weeks ended 30 January 2022 prepared in accordance with UK-adopted IAS 34 Interim Financial Reporting with the comparative audited financial information for the 39 weeks ended 31 October 2021 and the unaudited comparative financial information for the 13 weeks ended 31 January 2021 available at: www.morrisons-corporate.com/investor-centre/financial-reports

   --      Structuring EBITDA[1] for the 52 weeks ended 30 January 2022:  GBP1,178 million 
   --      EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: 
 
                                 For the            For the            For the             For the            For the 
                                 39 weeks           39 weeks           13 weeks            13 weeks           52 weeks 
                                 ended 1            ended 31            ended              ended 30           ended 30 
                                 November           October           31 January           January            January 
                                   2020               2021               2021                2022               2022 
          EBITDA[2] 
            (GBPm)                595                378                 200                290                668 
                        -----------------  -----------------  ------------------  -----------------  ----------------- 
          Adjusted 
          EBITDA[3] 
            (GBPm)                660                625                 350                316                941 
                        -----------------  -----------------  ------------------  -----------------  ----------------- 
       Adjusted EBITDA 
          Margin[4] 
             (%)                  5.0                4.6                 7.8                6.9                5.2 
                        -----------------  -----------------  ------------------  -----------------  ----------------- 
 
   --      Capex Components (as a percentage of a revenue): 
 
                                     For the 
                                     52 weeks 
                                     ended 30 
                                     January 
                                       2022 
          Store Refresh, 
        New Space & Growth            0.9% 
                             ---------------- 
         Maint. & Produc.             1.9% 
                             ---------------- 
              Other                    NA 
                             ---------------- 
              Total                   2.8% 
                             ---------------- 
 
   --      Online Estimated Market Share (based on third-party research): 
 
                                 As of December 
                                      2021 
       Estimated Market 
             Share                     9% 
                          --------------------- 
 

Current Trading

-- We believe that the developments in the geopolitical environment since the beginning of February 2022 as well as ongoing and increasing inflationary pressure is impacting consumer sentiment and spending, which we expect to adversely impact the wider grocery market as well as our performance while these conditions persist - we are unable to predict how long that will be. We believe that these developments have had an impact on sales and EBITDA since the beginning of February 2022. We are taking steps to mitigate the impact of these developments on our EBITDA for the remainder of the year. Unless these conditions improve, the impact of these developments could have a material adverse effect on our sales and EBITDA for the year.

Non-Financial Data

-- On 28 February 2022, Market Holdco 3 Limited (the "Parent") and Market Parent Finco Plc (the "Senior Notes Issuer") , among others, entered into a purchase agreement with a major institutional investor pursuant to which , subject to customary closing conditions, this investor agreed to purchase GBP1,200,000,000 in aggregate principal amount of 6 3/4 % senior notes due 2029 (the "Senior Notes") from the Senior Notes Issuer. The principal indirect beneficial owners of the Parent and the Senior Notes Issuer are funds managed or advised by Clayton, Dubilier & Rice, LLC. The Senior Notes were issued on 1 April 2022. The Senior Notes Issuer on-lent the net proceeds from the issuance of the Senior Notes to the Parent, who used such proceeds to repay in full the amounts outstanding under t he senior bridge loan facilities incurred by Parent .

-- On or prior to 6 May 2022, the Company expects to redeem its GBP181,100,000 aggregate principal amount outstanding of 4.625 per cent. Notes due 8 December 2023 (the "2023 Notes"), at a price equal to the aggregate principal amount of the 2023 Notes outstanding plus the accrued and unpaid interest plus the applicable premium.

-- Michael Gleeson recently notified the Company of his resignation and stepped down from his position as Chief Financial Officer on 4 April 2022 but will remain in the business for a period of time to ensure an orderly transition. It is expected that, subject to any CMA consent requirements , Trevor Strain will supervise the Company's finance function on an interim basis following the departure of Michael Gleeson, with the new Chief Financial Officer to be appointed in the next few weeks.

-- On 4 March 2022, the Company changed its accounting reference date for its fiscal year end from 31 January, with the year end typically on the Sunday falling between 29 January and 4 February, of each year to 31 October, with the year end on a Sunday not more than seven days before or after that date.

For further information please contact:

Rebecca Jones, Head of Finance - Investor Relations, at rebecca.jones@morrisonsplc.co.uk

Richard Nichols, Finance Director - Tax and Treasury, at richard.nichols@ morrisonsplc.co.uk

Important Notice

Forward-looking statements

Certain statements in this announcement are forward-looking. Where the announcement includes forward-looking statements, these are made by the Directors in good faith based on the information available to them at the time of their approval of this report. Such statements are based on current expectations and are subject to a number of risks and uncertainties, including both economic and business risk factors that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. Unless otherwise required by applicable law, regulation or accounting standards, the Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Non-IFRS Measures

Certain financial data included in this announcement consists of "non-IFRS financial measures." These non-IFRS financial measures may not be comparable to similarly-titled measures as presented by other companies, nor should they be considered to be alternatives to the historical financial results or other indicators of the Company's income or cash flow based on IFRS.

[1] Structuring EBITDA is defined as operating profit plus depreciation and amortisation, less cash operating leases and business rates relief phasing, plus exceptionals, supply chain disruption and direct COVID-19 costs, as further adjusted for recovery of lost profit, dividend from joint ventures, public listing savings and share based payments and pro forma initiatives and synergies. In the prior Investor Update dated 6 December 2021 (the "December Update"), we classified supply chain disruption costs as part of exceptionals.

[2] EBITDA is defined as operating profit plus depreciation and amortisation . In the December Update, we defined EBITDA as operating profit plus exceptionals, depreciation and amortisation . Therefore, the EBITDA figures presented in the December Update are not directly comparable to EBITDA figures presented herein.

[3] Adjusted EBITDA is defined as operating profit plus depreciation and amortisation, less cash operating leases and business rates relief phasing, plus exceptionals, supply chain disruption and direct COVID-19 costs . In the December Update, we (i) classified supply chain disruption costs as part of exceptionals, and (ii) did not include business rates relief phasing in the definition of Adjusted EBITDA. However, we believe that these changes do not impact comparability of Adjusted EBITDA figures presented in the December Update and Adjusted EBITDA figures presented herein.

   [4]      Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenue. 

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April 04, 2022 07:43 ET (11:43 GMT)