Interim Results 2017/ December 2017

Transcription

1 Interim Results 2017/18 13 December 2017

2 Agenda Introduction Seb James Financial update Humphrey Singer Business review Seb James Page 2

3 Summary Strong performance in electricals across the Group with growing revenues, profitability and market share Maintaining scale in UK mobile but profitability challenging Repositioning mobile business to deliver a simpler, less capital intensive business Board intends to maintain total full year dividend at 11.25p Expect to deliver full year 2017/18 Headline PBT within 360m - 400m range Headline PBT consensus for FY18: range 362m- 420m, average 383m Good start to peak trading with record Black Friday in all geographies Page 3

4 Humphrey Singer Group Finance Director

5 Financial highlights H1 2017/18 Headline revenue Headline profit / (loss) Group headline PBT of 61 million (2016/17: 154 million); YoY includes ( 58) million impact from revaluations Group H1 like-for-like revenue up 4%; Q2 like-for-like up 3% Group H1 electricals like-for-like up 7%; UK&I electricals like-for-like up 6%; Nordics like-for-like up 8%; Greece like-for-like up 7%, strong growth in all markets and growth in all categories UK H1 mobile like-for-like down 3%, including the impact of delayed iphone X launch into H2 Free cash flow of 169 million (2016/17: 64 million); reduction in capex YoY, improved stock management and favourable timing on working capital Net debt of 206 million (2016/17: 285 million) Reported Like-forlike H1 17/18 H1 17/18 H1 16/17 rate m % change % change m m UK & Ireland 3,009 (2)% 2% Nordics 1,666 13% 8% Greece % 7% 6 3 honeybee 2 (80)% n/a (12) (4) Group 4,868 3% 4% Net finance costs (9) (9) Profit before tax Full year total dividend maintained at 11.25p Page 5

6 Profit bridge YoY (96)m + 8m + 3m (8)m (93)m Flat (93)m 6 (12) (9) m UK & Ireland Nordics Greece honeybee EBIT Net finance cost PBT Page 6

7 Free Cash Flow Headline EBIT Dep. & amort. Working capital Capex Taxation Interest Restruct. Other Free cash flow (96) m 171 (30) (12) (19) Page 7

8 Balance Sheet Opening Net debt Free cash flow Acq. and disposals Dividends Pension contributions Other Closing Net debt m (271) 29 (89) (206) 169 (46) 2 Page 8

9 H1/H2 split of revaluations H1 this year includes ( 19) million of network debtor revaluation Last year + 39 million including insurance 16/17 H1 H2 FY Customer support agreements Network debtors Insurance Total Page 9

10 UK & Ireland like-for-like and Gross Margin Mobile - Q1 like-for-like flat - Q2 like-for-like (6)%, impacted by phasing of iphone launches - Trading gross margin down ~200bps - Further reduction of ~400bps due to revaluations Electricals - Q1 like-for-like +7%, +1% excl. sales transfers - Q2 like-for-like +5%, +1% excl. sales transfers - Gross margin broadly flat Page 10

11 UK & Ireland EBIT (39) Trading* m (38) 53 (19) 34 Reported Revals Excl Revals Dixons CPW Excl Revals Revals Reported 16/17 17/18 *Indicative split Page 11

12 Guidance FY 2017/18 Full year headline PBT expected to be within 360m to 400m range Consensus headline PBT for FY18: 362m- 420m, average 383m We anticipate that our electrical businesses will deliver earnings growth this year across the Group Full year headline interest of c. 18m The 2017/18 effective headline tax rate is expected to be around c.22% Mobile debtor revaluation, including EU roaming, expected to be in line with a negative 10-40m range provided Exceptional cash flow in 2017/18 c. 40m Pension contribution of 46m Capital is expected to be c. 200m: Capex by geography Greece honeybee Nordics Full year total dividend maintained at 11.25p UK&I Page 12

13 Seb James Group Chief Executive

14 Transforming Carphone Warehouse

15 The Carphone proposition remains just as relevant today ASSETS CHALLENGES Brand Strength / Relevance Compare and Save 22% market share 78% brand consideration Network Relationships Strong commercials Highly relevant to networks - 33% share of new subs Exclusive large indirect partner Deep system integration Market Change Increasing handset prices New aggressive market entrants New customer buying behaviours Cost Base and Profit High central costs driven by complex business model Service Capability 1m insurance agreements New Category Growth SIMO Customer Proposition Price difference vs. customer perception Balance Sheet Large receivable built up 1.1m repairs a year 370,000 trade in a year Multiplay +72 instore net promoter score Energy switching Page 15

16 Traditional postpay connections continue to shift with lengthening handset cycle and increased SIMO penetration Total UK mobile connections 16% 19% 19% 19% 25% 21% 19% 16% 12% 11% 13% 16% 11% 12% 34% CPW market share H1 17/18 13% 24% 4% 47% 49% 49% 49% 43% 22% FY 13/14 FY 14/15 FY 15/16 FY 16/17 1H 17/18 Postpay Postpay SIMO Prepay Prepay SIMO Page 16

17 What has caused the reduction in Carphone profitability? Rising handset prices through technology and currency effects A lower demand in smartphones (lengthening of the upgrade cycle) through a slowdown in the technology cycle and smartphone saturation Competitive SIMO pricing Reduced trading margin to achieve volumes Falling out of bundle spend, 4G data premiums and EU regulation on roaming Performance of current model being addressed Page 17 NO ROAMING REVENUE

18 How have we responded to changes in consumer behaviour so far? Handset leasing launched in Q2, credit offering to follow New SIMO offers introduced Grow id Diversification into new categories such as fixed, broadband, TV content and energy switching Multi-play market share increased to 10% Better leverage of existing 3in1 estate where appropriate Cost focus Page 18

19 What does the longer term look like? A sustainable and simpler model Improved ROCE Closer matching of P&L and cash receipts Potentially meaningful cash release Further alignment of distribution strategies Whilst maintaining relevance to the customer Page 19

20 Develop market leading Electrical businesses further

21 Q Q Q Q Q Q Q Q Q Q Q Q Q Q UK & Ireland key performance indicators UK electrical pricing UK electrical advocacy UK electricals share 100% 95% 90% 85% 25.1% 25.7% 25.8% 80% 75% 23.2% 24.0% 70% FY14 FY15 FY16 FY17 H118 Page 21

22 UK & Ireland achievements Stores 3in1 largely completed Launched new format Heathrow Terminal 3 store Opened our first cruise ship Travel store Tesco trial (2 stores) Services and range Online Launch of nationwide same day delivery Midnight cut off for next day delivery Benefiting from extended range Team Knowhow: Same day repairs and white goods promise Your Plan: 422k customers, 1.4bn of credit approved, 365m drawn Revenue 3YR CAGR 17% Traffic 3YR CAGR 8% Page 22

23 UK & Ireland initiatives Nationwide roll out of same day mobile phone repairs Launching Apple authorised same day repairs in the new year White goods same day repairs Expanding gaming proposition Online developments: New ways to pay one click check out, ApplePay Beacon technology to deliver in-store notifications Carphone new concept store rollout Expansion of multiplay and energy saving Page 23

24 UK & Ireland: Black Friday Black Friday extended this year, with excellent performance in the Why wait? and Black Tag Event campaigns New records achieved on Black Friday: Online penetration reached 41% Mobile traffic mix was up to 73% at 6am Highest average order value at 1am Orders per second reached 4.55 at 9:34am Big categories: gaming and consoles, LSTVs, headphones and smart tech On the day in Currys PC World we processed 27k Home Delivery orders and 75k Reserve & Collect Orders Page 24

25 Nordic achievements Record profits and low cost ratio in H1 Strong total sales growth of 8% in H1 Driven by online, increased range and improved availability Increased market shares in all geographies Strong growth for the consumer electronics and telecoms Improved customer satisfaction index in all markets First Nordic retailer to top 1BNOK on Black Friday More than 450k orders / 315 per minute 32% online penetration Higher order volumes 4-5pm Outperforming the market in most categories White goods Cons. electronics Small domestic appliances Telecoms Computing Elkjop Market Page 25

26 Nordic achievements (cont.) City store concept successfully launched Increased range in Jönköping Nordic DC (6,000 to 12,000 SKUs) Automatic replenishment working well, driving record availability in stores New Nordic customer contact centre up and running in Denmark Consolidated country head offices into one Oslo site Page 26

27 Greece Significant revamping of store estate New flagship stores opened Strong and growing NPS, brand awareness and market share A Big Black Friday: Online and phone inbound penetration reached 21% Mobile traffic reached 71% at 6am Highest average order value midnight to 1am Orders per minute peaked at 9.25 at 11am Launched YouTube channel, Plugged in Chef 5.3m total views (38 episodes so far) Page 27

28 Summary Strong performance in electricals across the Group with growing revenues, profitability and market share Maintaining scale in UK mobile but profitability challenging Repositioning mobile business to deliver a simpler, less capital intensive business Board intends to maintain total full year dividend at 11.25p Expect to deliver full year 2017/18 Headline PBT within 360m - 400m range Headline PBT consensus for FY18: range 362m- 420m, average 383m Good start to peak trading with record Black Friday in all geographies Page 28

29 Q&A