15 July 2020 Audited Results for the 53 Weeks Ended 2 May 2020 Good progress on strategy, robust performance in Electricals despite Covid-19 Group adjusted* profit before tax fell to £166m (2018/19: £339m) due to Mobile performance and Covid-19 closures Group statutory loss before tax of £140m (2018/19: loss of £259m) reflecting UK Mobile store closure costs UK & Ireland Electricals revenue +1% (LFL* +1%), adjusted EBIT £162m, -10% year on year (Statutory EBIT £119m) o Market share gains online and in-store, totalling +0.7% o Investment in customer offer offset by cost savings as planned; year-on-year profit decline due to Covid-19 o Online sales +22% including +166% in April International revenue +2% (LFL +4%), adjusted EBIT £136m, +8% year on year (currency neutral) (Statutory EBIT £135m) o Nordics share growth +0.5%, Greece share growth +0.4% o Nordics adjusted EBIT growth (currency neutral) averages +11% per annum over last three years o Online sales +22% including +114% In April UK & Ireland Mobile revenue -20%, adjusted EBIT loss £104m, a £154m year on year decline (Statutory EBIT loss £282m) o Constrained postpay offer drove sales decline on a legacy fixed cost base o Sales worse than expected due to enforced 3-in-1 store closures and low sales transfer to online Strong progress on transformation priorities o Omnichannel: Online in-store sales +64% pre Covid-19. 121 UK stores remodelled o Credit: UK Credit sales up +27% year on year, active customers almost 1.2m* o Services: Strong uptake of protection products in UK&I. Nordics customer club grew to over 3m members o Mobile: UK small, standalone store closures a significant step towards elimination of losses Free cash flow* £109m (2018/19: £153m). Net debt* £284m (2018/19: £265m) Over £1bn of liquidity headroom at year-end provides security against downside risk and confidence to invest *See page 41 for further information on our alternative performance measures (APMs) and glossary. This includes definitions, purpose, changes to the prior year, and reconciliation to the nearest IFRS measures. The basis of preparation of our IFRS measures is included on page 28. Alex Baldock, Group Chief Executive “The first ten months of the year was a story of delivering on our promises and accelerating the transformation of Dixons Carphone. We gained market share online as well as in stores, grew Credit and Services, drove big improvements in customer satisfaction, took difficult but essential decisions such as closing our UK standalone mobile stores, and were on track to meet financial expectations. With Covid-19, our immediate priorities abruptly changed to keeping everyone safe, helping our customers and securing our future. Our colleagues have delivered on all three, and I thank every one of them for the skill and determination with which they’ve responded. I’m struck by the vital role that technology has played in helping millions of families through this crisis, and I’m proud of how our business has stepped up, online-only outside the Nordics, to provide that help. Since the year end, all our Electricals businesses have continued to grow sales. Where our stores have reopened we’ve performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning. We’ve learned a lot during this crisis and will emerge a better business from it. We’ve pioneered new ways of shopping, empowered our colleagues to move faster, and seen how technology is set to play an ever-bigger role in everyone’s lives. We’re also more convinced than ever that Dixons Carphone has the right strategy for our customers, our colleagues and our shareholders in the years ahead.” 1
Summary of Performance Local Like-for- Full Year Revenue 2019/20 2018/19 Reported Currency Like £m £m % change % change % change UK & Ireland Electricals 4,538 4,475 1% 1% 1% International 4,043 3,960 2% 5% 4% - Nordics 3,573 3,501 2% 6% 4% - Greece 470 459 2% 3% 2% Electricals 8,581 8,435 2% 3% 2% UK & Ireland Mobile 1,589 1,998 -20% -20% Group 10,170 10,433 -3% -1% Group adjusted PBT of £166m was around £44m below the guidance that we reiterated in January. We were on track to achieve that guidance before the impact of Covid-19. In UK&I Electricals, adjusted EBIT declined -10% due to the impact of Covid-19, which was partially offset by operating cost reductions. As expected, our underlying gross margin was down reflecting the planned investment in the customer offer and accelerating channel shift but this impact was more than offset by cost savings. In International, adjusted EBIT grew +2% (+8% currency neutral) as strong underlying performance was offset by Covid-19 related store closures in Greece and the strengthening of sterling relative to the Nordic currencies. In UK&I Mobile, trading was worse than expected after the closure of all our small standalone shops due to the enforced closure of all our other UK stores and low sales transfer to the online business. Our year end net debt increased slightly to £284m as working capital outflow caused by lower sales was offset by reducing capital expenditure and deferral of taxes and rent. Profit, EPS and Net Debt* 2019/20 2018/19 2019/20 2018/19 Currency Statutory Statutory Adjusted Adjusted Neutral EBIT £m £m £m £m % change % change UK & Ireland Electricals 119 94 162 180 -10% -10% 8% International 135 121 136 133 2% 10% - Nordics 115 100 116 112 4% - Greece 20 21 20 21 -4% -1% Electricals 254 215 298 313 -5% -3% na UK & Ireland Mobile (282) (438) (104) 50 na Group EBIT (28) (223) 194 363 -47% -45% Depreciation & Amortisation 367 174 128 146 -12% Group EBITDA 339 (49) 322 509 -37% -35% Net finance costs (112) (36) (28) (24) (Loss) / profit before tax (140) (259) 166 339 Tax (21) (52) (70) (41) Discontinued operations (2) (9) (Loss) / profit after tax (163) (320) 125 269 (Loss)/earnings per share (13.9)p (26.8)p 10.8p 23.2p Net debt* (284) (265) *See page 41 for further information on our alternative performance measures (APMs). This includes definitions, purpose, changes to the prior year, and reconciliation to the nearest IFRS measures. The Group’s net debt APM does not have a direct IFRS equivalent measure. This has been reconciled back to the statutory balance sheet within the financial information. 2
Outlook & Financial Guidance The Covid-19 pandemic has had a significant impact on the world, and the wide-ranging repercussions of the crisis will be felt for many years. It could have a significant impact on consumer spending power across all our markets. Against this backdrop, technology retailing is resilient. Customers need us, and we have strong foundations; across our operations we have competitive pricing, market leadership and strong supplier relationships that allow flexibility on our inventory intake. Our extensive network of almost 940 stores and 11.5m sq.ft. of selling space across Europe and the thousands of expert colleagues in them are our most differentiating assets. Delivering a digital first, omnichannel experience requires these assets now as much as ever. Our low average lease lengths and standing as an anchor tenant at many locations give us flexibility to continue to optimise our estate. This crisis has shown us more than ever that our Vision – We Help Everyone Enjoy Amazing Technology – is the right one. Our business and strategy have so far successfully navigated a stressful period. As we raise our gaze beyond the crisis, our big priorities around Omnichannel, Credit and Services remain. Customers need help now as ever to discover, choose, afford and enjoy tech, for life, especially if they’re feeling the pinch of a recession. We are closely monitoring the external forecasts and are prepared for a range of economic outcomes. Due to the high levels of uncertainty we are not issuing guidance on Electricals sales or profits for 2020/21. We remain focused on keeping our colleagues safe, helping our customers and securing our cash position. We will make prudent investment decisions as our understanding of the current crisis and potential economic consequences evolves. We expect the following: Group To maintain good liquidity having started the year with over £1bn of unutilised committed debt facilities Working capital to include outflow of c.£70m relating to government endorsed tax payment delays before the 2019/20 year end To pay 2020/21 annual pension contribution of £46m in monthly instalments. Annual contributions will rise to £78m from 2021/22 Exceptional transformation cash costs to be c.£175m in 2020/21, mainly related to previously announced Mobile restructuring UK & Ireland Mobile Mobile adjusted EBIT losses in 2020/21 to be slightly worse than 2019/20 due to impact of Covid-19 on trading and as a result reaching breakeven 6-12 months later than previously expected 2020/21 cashflow from Mobile to be slightly negative as operating losses and restructuring costs will be largely offset by net working capital unwind The previously guided £220m cash costs of restructuring and working capital inflow of £500m by 2023/24 remain unchanged but the higher trading losses will mean that the total positive cashflow from Mobile will be lower than the previous guidance of c.£200m and in the range of £125m-175m 3
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