Half Year Results & Strategy Update 12 December 2018
Today’s agenda OUR VISION, STRATEGY & TRANSFORMATION PLAN Alex Baldock H1 RESULTS OVERVIEW & FINANCIAL GUIDANCE Jonny Mason CLOSING REMARKS Alex Baldock Q&A Alex Baldock & Jonny Mason 2
OUR VISION, STRATEGY AND TRANSFORMATION PLAN Alex Baldock Group Chief Executive 3
A business with great strengths and big opportunities Strengths Opportunities 4
Building a sustainable business… Financial Upside Top line ≥3.5% EBIT >£1bn growth Margin free cash flow 5 5
Building a sustainable business… Financial Growth Customer One Mobile Upside Opportunities Experience Business Top line Lower Market Credit Easy Colleagues growth leading cost Customers Stronger Profitable & Shareholders ≥3.5% EBIT >£1bn Services Online infra- cash Margin free cash flow structure generative …more valuable for its shareholders in the long run 6
The opportunity starts with the customer… They find …but also They value …and to tech exciting confusing help to afford the …to get the and and discover and item they most out of it amazing… expensive choose… really want… … and Dixons Carphone is uniquely placed to help 7
Market shares UK&I electricals UK&I mobile (postpay) 26.3% 25.6% 25.7% 24.6% 24.7% 23.8% 21.9% 23.0% 20.6% 19.2% We are the 2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 clear market H1 H1 leader Nordics Greece 35.2% 34.4% 32.2% 28.7% 25.4% 25.0% 24.2% 26.3% 21.1% 2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 H1 H1 8 Sources: GfK. DC internal analysis and supplier data. Nordics data unavailable on same basis for 2014/15
Online revenue as a % of sales UK mobile UK electricals International +510bps We are big 26.2% +260bps and growing 22.1% 21.1% 19.5% online as +220bps well as in 12.6% 10.4% stores 2015/16 2017/18 2015/16 2015/16 2017/18 2017/18 9 Source: Dixons Carphone Group online revenues including order and collect as a % of mobile and electrical revenues
We have a strong 687m 220m customer franchise Store visits Website visits 10 Source: Dixons Carphone Group store visits and total website visitors during 2017/18
Core retail New skills Capabilities Strong People capabilities Flexible well invested Services stores 11
We need… DIRECTION FOCUS ON THE CORE ONE BUSINESS STRONGER INFRASTRUCTURE DISCIPLINED EXECUTION 12 21
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We are underway… TRANSFORM AND PERFORM • LFL growth and share gains DIRECTION • New long term direction • Plan that starts with the customers FOCUS ON THE CORE • Dealt with distractions • Opportunity in the core ONE BUSINESS • Good progress, but will take time STRONGER INFRASTRUCTURE • IT and Supply Chain DISCIPLINED EXECUTION • New team and structure • Business aligned around the vision • Transformation programme underway 14
We offer amazing We have an easy Capable and We are big – we advice to our end to end Our sites and stores committed have something for customers through customer are amazing colleagues everyone; range assisted selling experience We are with our We understand We are affordable: customers Our partnerships We work together technology and trusted on price throughout the life with suppliers make as One Business our customers; of the product – and through credit a big difference data via our Services We serve our Stronger customers however Mobile is central to infrastructure they want to shop: our vision online or in store 16
We offer amazing We have an easy Capable and We are big – we advice to our end to end Our sites and stores committed have something for customers through customer are amazing colleagues everyone; range assisted selling experience We are with our We understand We are affordable: customers Our partnerships We work together technology and trusted on price throughout the life with suppliers make as One Business our customers; of the product – and through credit a big difference data via our Services We serve our Stronger customers however Mobile is central to infrastructure they want to shop: our vision online or in store 17
We offer amazing We have an easy Capable and We are big – we advice to our end to end Our sites and stores committed have something for customers through customer are amazing colleagues everyone; range assisted selling experience We are with our We understand We are affordable: customers Our partnerships We work together technology and trusted on price throughout the life with suppliers make as One Business our customers; of the product – and through credit a big difference data via our Services We serve our Stronger customers however Mobile is central to infrastructure they want to shop: our vision online or in store 18
We offer amazing We have an easy Capable and We are big – we advice to our end to end Our sites and stores committed have something for customers through customer are amazing colleagues everyone; range assisted selling experience We are with our We understand We are affordable: customers Our partnerships We work together technology and trusted on price throughout the life with suppliers make as One Business our customers; of the product – and through credit a big difference data via our Services We serve our Stronger customers however Mobile is central to infrastructure they want to shop: our vision online or in store 19
We offer amazing We have an easy Capable and We are big – we advice to our end to end Our sites and stores committed have something for customers through customer are amazing colleagues everyone; range assisted selling experience We are with our We understand We are affordable: customers Our partnerships We work together technology and trusted on price throughout the life with suppliers make as One Business our customers; of the product – and through credit a big difference data via our Services We serve our Stronger customers however Mobile is central to infrastructure they want to shop: our vision online or in store 20
We offer amazing We have an easy Capable and We are big – we advice to our end to end Our sites and stores committed have something for customers through customer are amazing colleagues everyone; range assisted selling experience We are with our We understand We are affordable: customers Our partnerships We work together technology and trusted on price throughout the life with suppliers make as One Business our customers; of the product – and through credit a big difference data via our Services We serve our Stronger customers however Mobile is central to infrastructure they want to shop: our vision online or in store 21
Colleagues Assisted selling Range Easy Sites and stores One Business Data Credit Services Suppliers Stronger Online Mobile infrastructure 22
We offer amazing advice to our customers through assisted selling We understand technology and our customers; data 23
We are big – we Assisted selling have something for everyone; range We are affordable: Data trusted on price and through credit We serve our customers however they want to shop: online or in store 24
We are big – we Assisted selling have something for everyone; range We are affordable: Data trusted on price and through credit We serve our customers however they want to shop: online or in store 25
Credit: largest and fastest growing segment of services 5yr CAGRs Services Addressable Market (0.4)% 0.8% 1.5% 8.6% 1.1% 2016/17 2017/18 2018/19 2019/20 2020/21 Delivery Credit Installation and set up Protection Repair 26 Source: Dixons Carphone Group internal analysis
Credit: growth opportunity Credit adoption drives higher average basket value with strong foundations • Customers afford more and better technology • Reason to shop with us Average basket value • Installments help services • Profitable • Responsible lender Good for Good for Good for us 0% 5% 10% 15% 20% customers suppliers Adoption Source: Dixons Carphone internal data: credit sales by 27 27 different price bands for the 24 months to 27/10/2018
Credit: our strong foundations Your Plan 800 700 600 500 400 300 200 100 0 Sales Customers (£m) (000s) 2016/17 2018/19 28 28 Source: Dixons Carphone internal data - credit sales (2016/17 actual, 2018/19 forecast) and customer bases (as at 25/10/16 and 20/11/18)
Credit: much improved deal with BNP Paribas “We’re delighted to extend our strategic partnership with Dixons Carphone…to create innovative solutions and provide customers with helpful, affordable finance solutions to buy the technology they want.” BNP Paribas Personal Finance UK CEO, Stephen Hunt 29
Credit: we’re underway Much improved BNP Paribas partnership We expect to at least double credit New credit offer and platform adoption from 8% Trained colleagues today Building capability and experience 30
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