Wm Morrison Supermarkets (WMS) Q4 2024 earnings summary

Executive summary

• Like-for-like sales rose 4.1% year-over-year, with Q4 up 4.9%, marking the strongest quarter in four years.

• Underlying EBITDA increased by 11.2% to GBP 835 million for the year, and debt was reduced by 40%.

• Operational improvements included enhanced availability, value, loyalty, and range, supported by extensive customer and colleague engagement.

• The More Card loyalty program saw linked sales rise from 47% to 76% in 18 months.

• The business completed the McColl's conversions, expanded convenience and online channels, and modernized Market Street and manufacturing operations.

Financial highlights

• Q4 sales reached GBP 3.8 billion, up 4.9% like-for-like; full-year underlying EBITDA was GBP 835 million, up GBP 84 million.

• Q4 underlying EBITDA was GBP 275 million, up 6.2% year-on-year; margin rate improved to 7.3%.

• Operating cash flow for the year was GBP 401 million; free cash flow was GBP 320 million.

• CapEx for the year was GBP 321 million, GBP 77 million lower year-on-year.

• Leverage reduced to 4.9x total, or 4.1x pro forma for MFG shareholding; GBP 1 billion revolving credit facility remains undrawn.

Outlook and guidance

• Underlying EBITDA is expected to grow again in FY 2025, despite cost headwinds from national insurance and wage increases.

• CapEx planned at around GBP 400 million for FY 2025, with continued focus on estate modernization and automation.

• Positive cash generation expected, supported by lower interest costs and working capital improvements.

• Insurance claim for the Q1 technology incident is progressing, with coverage exceeding losses.