Strategic rationale for the acquisitions
C. Key Risks
This section includes details of the key risks attaching to an investment in shares in Metcash and key risks associated with the Acquisitions. These risks may affect the future operating and financial performance
of Metcash and the value of Metcash shares. The key risks are not set out in any particular order. Before deciding whether to invest in Metcash shares, you should consider whether such an investment is suitable
for you having regard to publicly available information (including this presentation), your personal circumstances and following consultation with a financial or other professional adviser. Additional risks and
uncertainties that Metcash is unaware of, or that it currently considers to be immaterial, may also become important factors that adversely affect Metcash's operating and financial performance.
You should note that the occurrence or consequences of many of the risks described in this section are partially or completely outside the control of Metcash, its directors and senior management. Further, you
should note that this section focuses on the potential key risks and does not purport to list every risk that Metcash may have now or in the future. It is also important to note that there can be no guarantee that
Metcash will achieve its stated objectives or that any forward looking statements or forecasts contained in this presentation will be realised, eventuate or align with market expectations. All potential investors
should satisfy themselves that they have a sufficient understanding of these matters, including the risks described in this section, and have regard to their own investment objectives, financial circumstances and
taxation position.
The key business risks of Metcash as set out in this section will also apply to the combination of Metcash, Superior Food, Bianco and Alpine Truss (Combined Group).
1. Key business risks
1.1 Strategy and disruption risks
Consumer behaviour and preferences continue to change and are influenced by factors such as economic conditions, digital and technological development and disruption, healthy living trends, sustainability
preferences and an increasing choice in both online and in-store retail options.
While Metcash's business operations and strategic priorities are frequently reviewed and developed, and management regularly reviews the Metcash Group's (Group) plans against market changes and modifies
its approach (where necessary), such reviews and modifications may be ineffective in light of significantly changed conditions. For example, tobacco sales, which represent a significant proportion of the products
Metcash supplies to its independent retailers, have been and may continue to be adversely impacted by healthy living trends, cost of living pressures and the prevalence and supply of illicit tobacco.
Further, while Metcash is accelerating its investment in digital solutions, expanding its capability and improving the delivery of digital solutions to its retailers and shoppers, there is a risk that Metcash may
experience project execution issues or may not realise the full benefits of these projects. There is also a risk that projects may experience scope variations, delays or cost overruns.
Accordingly, if the Group fails to adjust or execute its strategies to respond to changes in consumer behaviour and preferences, this may have a material adverse impact on the Group's financial performance and
profitability.
1.2 Increased competition resulting in loss of volume to existing customers
Any increase in competitive activity from new or existing competitors (including in the form of acquisitions by competitors of independent stores in our network, competitors soliciting customers to operate
under non-Metcash banners, competitors engaging in price wars or competitive discount promotions, a new market entrant with a wholesaler model, where suppliers sell directly to the Group's customers, where
customers form their own buying groups to collectively negotiate and purchase directly from suppliers or where indirect competitors change their business models to compete directly with the Group) may have
a detrimental effect on the Group's operations, particularly if Metcash fails to respond effectively to that competitive activity or its response is delayed (for example, as a result of the time required to engage
with the Group's independent retailer network in order to implement an initiative). Increased competition may also adversely impact Metcash's long-term performance and profitability.
1.3 General economic conditions and geopolitical risks
General macroeconomic conditions and factors including inflation, low levels of unemployment, monetary policy and variability in interest rates, changes in governments and their approach to fiscal policy
including increasing taxes, levies and other imposts, variability in energy and input costs, cyclicality in building and construction markets, and changes in consumer purchasing behaviour may adversely impact
our customers as well as Metcash's earnings, cost of doing business and profitability.
Metcash
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