For personal use only JB Hi-Fi Limited FY20 Results Presentation 15 AUGUST 2016 15 AUGUST 2016 17 AUGUST 2020 PAGE 1 PAGE 1
Agenda For personal use only ▪ Group overview ▪ JB HI-FI Australia and JB HI-FI New Zealand ▪ The Good Guys ▪ Group Balance Sheet and Cash Flow ▪ Group FY21 Trading Update ▪ Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB HI-FI LIMITED PAGE 2
For personal use only Grou Gr oup p Ov Over erview view 15 AUGUST 2016 15 AUGUST 2016 17 AUGUST 2020 PAGE 3 PAGE 3
Group Model For personal use only Two iconic Australian retail brands Leading retailer of home appliances Leading retailer of technology and Product offering consumer electronics and consumer electronics Strong position with home-making Target customer base / Strong position with a young tech- demographic savvy demographic families and Gen X demographics Best brands at low prices Value proposition Exceptional customer service provided by passionate, knowledgeable team Customer focus members Multi-channel In-store, online, phone, commercial leveraging a Group support function and underpinned by 5 unique competitive advantages 3 4 5 1 2 Low Cost Quality Store Supplier Multichannel Scale Operating Locations Partnerships Capability Model JB HI-FI LIMITED PAGE 4
Group Model For personal use only Underpinned by 5 unique competitive advantages Low Cost Quality Store Supplier Multichannel 1 2 3 4 5 Scale Operating Model Locations Partnerships Capability ▪ ▪ ▪ ▪ #1 player in Australian Low CODB relative to JB HI-FI Strong partnerships with all Integrated, high quality in- market with opportunity retail peers driven by: major suppliers, both store, online and phone ▪ Major shopping centres, for further consolidation CBD, homemaker locally and globally offer that provides ▪ Productive floor space centres, airports customers with choice on ▪ ▪ Store locations and high Global supplier with high sales per how to transact with us ▪ traffic websites provide relevance High foot traffic and square metre convenient locations suppliers with high visibility ▪ Store network provides: ▪ Spread investments ▪ Continued focus on for their product across a large base and The Good Guys productivity and ▪ Fast online fulfillment, ▪ Knowledgeable team drive efficiencies minimising unnecessary ▪ via delivery from store or Leading homemaker members assist and inform expenditure click and collect centres and standalones the customer of product ▪ Enabler for maintaining ▪ Online customers with ▪ Destination locations, benefits low prices (gross margins after sales service and easily accessible ▪ Dual brand retail approach of ~21.4%) and support provides: responding to market ▪ National Commercial ▪ Ranging and prices business supporting merchandising optionality corporate, government ▪ Ability to execute and education customers Sales AUD($bn) 1 62.0 CODB 1 strategic initiatives at 25.0% 24.6% scale 34.9 17.1% 16.7% 16.7% 16.0% 16.1% 14.6% 21.3 18.1 12.4 12.0 7.9 7.3 M Video JBH FNAC Darty Gome Dixons Yamada Ceconomy Best Buy M Video JBH FNAC Gome Dixons Yamada Ceconomy Best Buy Carphone Denki Darty Carphone Denki 1 Source: JBH FY20 Sales and CODB and other market leading companies’ data as reported in their most recent full year result translated to AUD. JB HI-FI LIMITED PAGE 5
Group FY20 Performance For personal use only FY20 Group Performance Growth FY20 FY20 FY20 FY19 AUD (Statutory) (Pre AASB 16) (Underlying) (Underlying) 11.6% ▲ Total sales ($m) 7,918.9 7,918.9 7,918.9 7,095.3 823.6 30.5% ▲ Earnings before interest and tax ($m) 483.2 466.7 486.5 372.8 113.6 33.2% ▲ Net profit after tax ($m) 302.3 308.7 332.7 249.8 82.9 33.2% ▲ Earnings per share (basic ¢) 263.1 268.7 289.6 217.4 +72 cps 33.1% ▲ Dividend per share (¢) 189.0 189.0 189.0 142.0 +47 cps ▪ The Statutory results for FY20 reflect the adoption of the new Accounting Standard AASB 16 Leases. The Group has adopted AASB 16 using the modified retrospective approach and, as a result, prior period comparatives have not been restated ▪ The “Pre AASB 16 ” FY20 results disclosed in this presentation are pre application of AASB 16 and exclude the impact of AASB 16 ▪ FY20 NPAT includes a AUD24.0 million (post tax) non-cash impairment of certain JB HI-FI New Zealand assets (“NZ impairment”) ▪ The “Underlying” results disclosed in this presentation exclude the impact of AASB 16 and the NZ impairment to allow for prior period comparisons ▪ Refer Appendix I for reconciliations of Statutory, Pre AASB 16 and Underlying results JB HI-FI LIMITED PAGE 6
Group FY20 Performance For personal use only FY20 Divisional Performance 1 Growth (Underlying) FY20 FY19 $m % (Underlying) Sales ($m) 12.5% ▲ - JB HI-FI Australia 5,318.9 4,726.0 592.9 (5.7%) ▼ - JB HI-FI New Zealand (NZD) 222.8 236.2 (13.4) 11.2% ▲ - The Good Guys 2,388.8 2,147.9 240.9 11.6% ▲ Total Sales (AUDm) 7,918.9 7,095.3 823.6 EBIT ($m) 26.2% ▲ - JB HI-FI Australia 380.8 301.7 79.1 (1.0%) ▼ - JB HI-FI New Zealand (NZD) (1.9) (1.9) (0.0) 47.8% ▲ - The Good Guys 107.8 72.9 34.9 30.5% ▲ Total EBIT (AUDm) 486.5 372.8 113.6 EBIT Margin (%) +78 bps ▲ - JB HI-FI Australia 7.16% 6.38% (6 bps) ▼ - JB HI-FI New Zealand (0.85%) (0.80%) +112 bps ▲ - The Good Guys 4.51% 3.40% +89 bps ▲ Total EBIT Margin (%) 6.14% 5.25% 1 Underlying FY20 results which exclude the impact of AASB 16 and the NZ impairment. Refer Appendix I for reconciliations of Statutory, Pre AASB 16 and Underlying results JB HI-FI LIMITED PAGE 7
Group Highlights For personal use only Group FY20 Financial achievements 1 Group Operational achievements ▪ ▪ Sales up 11.6% to $7.9 billion, with Australian sales The health, safety and wellbeing of our team members, accelerating from March as customers spent more time customers, business partners and the wider community remained the Group’s highest priority working, learning and seeking entertainment at home. New Zealand sales were impacted by the temporary closure of ▪ Recognition bonus paid in June of $1,000 to all full-time stores from March through to April store and warehouse team members (pro-rated for part- ▪ Total online sales across the Group grew by 48.8% to $597.5 timers and casuals) in appreciation of the incredible million, representing 7.5% of total sales, with Q4 sales up contribution they have made during Covid-19 134.3% ▪ Commenced consolidation of 18 Bulky Goods DC’s into ▪ Group Home Delivery Centres (“HDCs”) with Sydney Underlying EBIT up 30.5% to $486.5 million. The strong operating leverage from the elevated sales growth and transitioned in September 2019, Melbourne in March 2020 disciplined cost control more than offset the investment in and Brisbane in May 2020 additional operating costs associated with ensuring team ▪ Sustainability policy implemented - our commitment to members and customers remained safe during Covid-19 having a positive impact on our people, our community and ▪ Underlying NPAT up 33.2% to $332.7 million (Statutory NPAT our environment up 21.0% to $302.3 million) ▪ Continued expansion of our Group Commercial businesses ▪ Underlying EPS up 33.2% to 289.6cps product and service offering ▪ Dividend per share up 47cps or 33.1% to 189cps 1 Underlying FY20 results which exclude the impact of AASB 16 and the NZ impairment. Refer Appendix I for reconciliations of Statutory, Pre AASB 16 and Underlying results JB HI-FI LIMITED PAGE 8
Generating sustainable long-term growth For personal use only In FY20, the Group adopted a Sustainability Policy outlining the Group’s commitment to having a positive impact on our people, our community and our environment and today released our first Sustainability Report. Sustainability Policy focus areas FY20 Achievements ▪ Prioritised the safety of team members through Covid-19 ▪ Store and warehouse team member recognition payments ▪ Mental health training provided to 332 store managers ▪ Flexible work policy launched ▪ First Sustainability Report released ▪ FY20 Workplace giving donations totalling $3.4m and $24.3m since inception ▪ Bushfire relief donations totalling $0.6m ▪ Launched eMeals, a recycling initiative that turns e-waste into meals for people in need ▪ Joined Responsible Business Alliance ▪ Launched a re-usable $1 bag as well as a 15c user-pays plastic bag option in JB HI-FI Australia in February 2020, resulting in a 72.5% reduction in plastic bag usage ▪ In FY20, JB HI-FI Australia handed out 6 million fewer plastic bags resulting in the elimination of 59 tonnes of plastic waste JB HI-FI LIMITED PAGE 9
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