For personal use only JB Hi Fi Limited JB Hi-Fi Limited Full Year Results Presentation 30 June 2011 30 June 2011 8 August 2011
Agenda For personal use only 1. Performance Summary 2. Historic Performance 3. Profit and Loss Statement 4. Trading Performance 5. Share Buy-back and Clive Anthonys Restructure y y 6. Outlook 7. Cash Flow and Balance Sheet 8. Dividends 9. 9. Store Update Store Update 10. Investment Checklist Terry Smart Richard Murray CEO CFO
1. PERFORMANCE SUMMARY For personal use only Strong performance for 12 months to 30 June 2011 FY10 FY10 FY11 FY11 FY11 FY11 Growth G th Normalised 1 Normalised 1 Statutory Statutory Sales $2.73b 8.3% $2.96b $2.96b Gross Margin 21.8% 22.0% 22.0% +28 bps - Cost of Doing Business 14.5% 0 bps 15.6% 14.5% EBIT $175.1m $162.6m $196.0m 11.9% EBIT Margin 6.4% +21 bps 5.5% 6.6% NPAT $ $118.7m $ $109.7m $ $134.4m 13.3% Earnings per share 109.7 cps 13.6% 101.8 cps 124.7 cps Total dividend Total dividend - fully franked fully franked 66 0 cps 66.0 cps 77 0 cps 77.0 cps 77 0 cps 77.0 cps +11 0 cps +11.0 cps (Final dividend - fully franked 2 = 29.0 cps) 1 FY11 normalised excludes the Clive Anthonys one-off restructuring charge announced in March 2011 ($24.7m post tax). 2 Final dividend represents a payout ratio of 60% of normalised 2HY11 earnings - to be paid on 2 nd September 2011 (record date 23 rd August 2011). 3
2. HISTORIC PERFORMANCE For personal use only Continuation of strong grow th in sales and earnings since MBI in July 2000 (i) (i) (i) SALES +8% EBIT +12% NPAT +13% EPS +14% (i) 134.4m (i) (i) 124.7cps 2.96b 196.0m +13% +14% +8% +8% +12% +12% + 2.73b 118.7m 175.1m 109.7cps +17% +26% +23% +24% E ~$3.2b 2.33b +27% 142.0m 94.4m 88.3cps +39% AR GUIDANCE +45% +45% +43% +43% 1.83b +43% 102.3m 65.1m 61.8cps +56% +59% +61% 1.28b +36% 36% FULL YEA 65.5m 38.8cps 40.4m +47% +55% +57% FY07 FY08 FY09 FY10 FY11 FY12F FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 (i) Normalised (excludes Clive Anthonys one-off restructuring charge) 4
3. PROFIT AND LOSS STATEMENT For personal use only 3 AUST NZ (NZD) ( ) CONSOLIDATED FY10 FY11 Growth FY10 FY11 Growth FY10 FY11 Growth $m 2,598.0 8.3% 167.3 12.8% 2,731.3 8.3% Sales 2,814.6 188.7 2,959.3 Gross Profit 573.4 627.0 9.4% 26.0 32.6 25.2% 594.2 652.0 9.7% Gross Margin Gross Margin 22.1% 22 1% 22.3% 22 3% +21 bps +21 bps 15 6% 15.6% 17 3% 17.3% +171 bps +171 bps 21 8% 21.8% 22 0% 22.0% +28 bps +28 bps EBITDA 1 200.3 222.7 11.2% (2.4) 0.8 132.1% 198.4 223.3 12.5% Depreciation & Amortisation 21.7 2.0 23.3 25.5 2.3 27.3 EBIT 1 178.6 10.4% (4.3) 64.0% 175.1 11.9% 197.2 (1.6) 196.0 EBIT Margin 1 +13 bps +13 bps +177 bps +177 bps +21 bps +21 bps EBIT Margin 6.9% 6 9% 7.0% 7 0% (2 6%) (2.6%) (0 8%) (0.8%) 6.4% 6 4% 6.6% 6 6% Normalised NPAT 118.7 134.4 13.3% Significant item 4 - (24.7) NPAT after Significant Item g 118.7 109.7 -7.5% Headline Statistics: Earnings per share (basic ¢) 1 109.7 124.7 13.6% Cost of doing business 1 +0.4 bps -11 bps -0.1 bps 14.4% 14.4% 17.0% 16.9% 14.5% 14.5% Stores 2 131 +13 stores 10 +3 stores 141 +16 stores 144 13 157 1 FY11 has been normalised (excludes significant item - Clive Anthonys one-off restructuring charge). 2 In FY11, 18 JB Hi-Fi stores opened (Aust: 15, NZ: 3), four Clive Anthonys stores were converted to JB Hi-Fi stores and two Clive Anthonys stores were closed. 3 Refer to Appendix II(c) for NZ P&L in AUD. 4 Significant item (Clive Anthonys one-off restructuring charge). 5
4. TRADING PERFORMANCE For personal use only Sales Sales Growth FY11 FY11 Comps. Comps. S l Sales continued to be impacted by subdued consumer ti d t b i t d b bd d Total Comps. 1HY11 2HY11 spending. JB Hi-Fi However comparable sales for JB Hi-Fi stores were positive in - Australia 9.9% (0.5%) (0.9%) 0.1% the second half in both Australia and New Zealand (NZD). - New Zealand (NZD) 28.3% 2.4% 3.9% 1.0% (ii) (ii) Total JB Hi-Fi (AUD) 10.5% (0.5%) (0.8%) (0.1%) Our market share continued to grow throughout the period. Clive Anthonys (15.5%) (13.5%) (13.3%) (14.8%) Australia: (i) Consolidated (AUD) 8.3% (1.2%) (1.5%) (1.0%) JB Hi-Fi branded store sales grew by 9.9% to $2.7b. - JB Hi-Fi stores consumer electronics (CE) sales, which represents approximately 75% of total sales, grew by 15.2% in the period. Comparable sales growth was 4.1%, with strong growth in Computers, IT and Telco. - JB Hi-Fi stores software (music, movies and games), which represents approximately 25% of total sales, declined on a comparable store basis by 9.1%, driven predominantly by the games category at negative 16.8%. This reduction came comparable store basis by 9.1%, driven predominantly by the games category at negative 16.8%. This reduction came primarily from the casual gaming category of Wii, PSP and NDS. However we continue to gain market share and saw comparable store growth in PS3, Xbox and PC gaming. We continue to invest in all software categories, with it being an important part of our new store roll-out program. New Zealand: JB Hi-Fi branded store sales grew by 28.3% to NZ$188.7m. (i) Consolidated FY11 total sales growth was impacted by the inclusion of the closed New Zealand H&S branded stores in the 2010 comparative period . (ii) Impacted due to exchange rate conversion. 6
4. TRADING PERFORMANCE… For personal use only Gross Margin Consolidated gross margin was 22.0%, a 28 bps increase on the prior period. g g %, p p p FY10 FY11 Growth Australia 22.1% 22.3% +21 bps New Zealand 15.6% 17.3% +171 bps Consolidated Consolidated 21 8% 21.8% 22 0% 22.0% +28 bps +28 bps The strength in gross margin was pleasing given the increased discounting within the market. We remain passionate about our low price promise and based on regular monitoring of competitor activity, review our pricing daily. Increased scale drove improved levels of supplier support, with the majority of the benefit returned to customers in the form of lower prices. Accessories merchandising and add-on sales strategy concentrated on margin generating products. Continued management focus on inventory management: out of stocks, shrinkage and obsolescence. g y g g Gross Margin (5 yrs) 22.1% 22.0% 21.9% 21.8% 21.6% FY07 FY08 FY09 FY10 FY11 7
4. TRADING PERFORMANCE… For personal use only Cost of Doing Business (CODB) (i) Consolidated CODB was flat at 14.5%. (i) FY10 FY11 Growth Australia 14.4% 14.4% +0.4 bps New Zealand 17.0% 16.9% -11 bps Consolidated Consolidated 14.5% 14 5% 14 5% 14.5% -0.1 bps -0 1 bps (i) In Australia, our CODB was flat at 14.4%. A pleasing result given the 4.28% retail award wage increase on 1 July 2010 and flat comparable store sales. New Zealand benefited from continued improvement in operating leverage as sales grew. New Zealand benefited from continued improvement in operating leverage as sales grew. This FY11 result demonstrates the strength and dynamic nature of our model. Our systems allow us to flex with the changing market conditions whilst ensuring that customer service is maintained at the highest level. CODB (5 CODB (5 yrs) ) 16.1% 15.4% 14.7% 14.5% 14.5% (i) FY07 FY08 FY09 FY10 FY11 (i) Normalised (excludes Clive Anthonys one-off restructuring charge). 8
4. TRADING PERFORMANCE… For personal use only Earnings (i) EBIT increased 11.9% to $196.0m. $ (i) FY10 FY11 Growth Australia ($m) 178.6 197.2 10.4% - margin (%) 6.9% 7.0% +13 bps New Zealand (NZ$m) (4.3) (1.6) 64.0% - margin (%) i (%) (2 6%) (2.6%) (0 8%) (0.8%) +177 bps 177 b Consolidated ($m) 175.1 196.0 11.9% - margin (%) 6.4% 6.6% +21 bps Overall EBIT growth was driven by a combination of improved gross profit and a flat cost of doing business. In New Zealand we increased EBITDA by NZ$3.2m to NZ$0.8m and reduced our EBIT loss by 64.0% to NZ$1.6m. $ $ % $ Depreciation increased 17.2% on a consolidated basis and reflected our store rollout program and ongoing merchandising upgrades in our existing stores. (i) NPAT was up 13.3% to $134.4m. NPAT EBIT Margin 6.6% $134.4m 6.4% $118.7m 6.1% $94.4m 5.6% $65.1m $40.4m 5.1% (i) (i) FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 (i) Normalised (excludes Clive Anthonys one-off restructuring charge). 9
4. TRADING PERFORMANCE… For personal use only Online We continue to develop and refine our online presence as part of our multichannel strategy. Online sales grew 51.6% on the prior year. With our high number of unique visitations (average 800,000 per week in July 2011) our online site is an increasingly important sales generator for both in store and online sales. f b th i t d li l Our buying power and low cost of business ensured we remained competitive online. Focussed on ensuring that our unique brand personality is consistent across all mediums (i.e. in store, online, mobile and print media). Note: screen print taken from the JB Hi-Fi website on 29 July 2011 (prices current as at that date). 10
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