Preliminary Results 2015/16 and Strategy Update 29th June 2016 - PowerPoint PPT Presentation

Preliminary Results 2015/16 and Strategy Update 29th June 2016

Seb James Group Chief Executive

Our growth story Synergies Connected Core Business World Core Knowhow Opportunities Services Business

Awards Mobile Industry Awards: FD Magazine Awards: #1 Retail Week Power List: Personality of the Year Best FTSE 100 FD Extel Awards: British Arrows Awards: Shop Idol Winner: Best IR (non-food retail) Commercial of the Year Retail Week Supply Chain Institutional Investor Awards: Retail Week Rising Stars Awards Most Honoured What Mobile Awards: Retail Week: Mobile Choice Awards: Best High Street Retailer Retailer of the Year Best Online Retailer CIPD Recruitment Awards: Creative Circle Awards: Mobile Industry Awards: Best online recruitment - CPW ‘Gold of Golds’ TV commercial Outstanding Achievement Marketing Society Awards: Institute of Internal RAD HR Awards: Customer insight Communications Awards Candidate Engagement ISell Mobile Awards: UK Search Awards: Timewise Power Part Time List: Team of the Year Best SEO campaign PriceRunner Awards: European Supply Chain Stock Market Awards: Best Online in Demark Excellence Awards Best Retail & IR comms

2015/16 Overview • Integration progressing strongly • Launched iD • 276 UK&I SWAS • Acquisitions of Simplifydigital and Infocare • Announced 3-in-1 roll-out • Norsk Prising • ‘Own the Kitchen’ store -in-store initiative • Co-branding in Norway and Sweden • New Carphone Warehouse web platform • Sprint Joint Venture launched • Carphone Warehouse Click & • honeyBee extends contract with Collect launched major US manufacturer • Share gains in all markets • CWS agreements signed with TalkTalk, EE and RBS • Pricing at most competitive ever • Customer satisfaction levels at all time highs

2015/16 Key numbers Group like-for-like revenue up 5% (UK & Ireland up 6% and Nordics up 4% ) • Strong profit performance: • Headline PBT of £447 million (2014/15: £381 million), up over 17% • Headline basic EPS 29.3p (2014/15: 25.5p) • Free cash flows of £202 million (2014/15: £89 million) and year end net debt • broadly flat year-on-year at £267 million Final dividend of 6.50p (2014/15: 6.00p) proposed, taking total dividends for • the year to 9.75p (2014/15: 8.50p), up 15% year-on-year Sprint joint venture in the US expected to contribute $40 million - $50 million • of annual EBIT to the Group by 2019/20 honeyBee platform: major 3rd party deal signed with US carrier •

Long term growth metrics UK electrical pricing Customer satisfaction Q1 CY 14 UK market shares Q1 CY 15 25.7% Q1 CY 16 23.5% 21.4% 24.7% 23.4% 13.7% CPW (Postpay) Currys PC World

Finance Update Humphrey Singer – Group Finance Director

Strong earnings growth £m YOY : +£60m (£7m) +£2m Flat +£55m +£11m +£66m 500 7 17 (21) 79 400 300 468 447 200 365 100 UK & Nordics Southern Connected EBIT Net finance PBT Ireland Europe World cost Services Finance Update

Free Cash Flow £m Headline Dep. & Working Restr. / Free cash EBIT amort. capital Capex Taxation Interest Merger Other flow 700 600 (76) 137 500 (221) 400 300 (56) (31) 468 200 (43) 24 202 100 Finance Update

Balance Sheet Acquisitions Opening Free cash and Pension Closing £m Net debt flow Dividends disposals contributions Other items Net debt (50) (100) (106) 202 (260) (267) (150) (200) (82) (250) (35) 14 (300) Finance Update

Property optimisation No. of stores 2 Jan 2016 29 Jun 2016 Future plan Ireland CPW 75 71 71 Ireland Dixons 27 24 15 UK CPW 723 715 684 UK Dixons 402 374 323 No. of UK Dixons 2 Jan 2016 29 Jun 2016 Future Plan stores - Currys 91 63 0 - PC World 60 45 0 - Currys Digital 8 2 0 - CurryPCWorld CPW 243 264 323 Total 402 374 323 Finance Update

What’s happening in Hull UK & Ireland - Property

The numbers behind the plan Store A Store B Retained Store (A) Revenue £4.8m £2.8m £7.6m Margin £1.4m £0.9m £2.3m Rent and Rates £(0.3)m £(0.3)m £(0.4)m Employees £(0.3)m £(0.3)m £(0.5)m Contribution £0.8m £0.3m £1.4m Finance Update

Guidance Full year Headline interest c.£20m • Effective Headline tax rate c.25% • Capex c.£250m although dependent on speed of integration work • Exceptional cash flow in 2016/17 c.£90m • Pension contribution of £36m • Brexit – areas to consider • Finance Update

Market Updates Seb James – Group Chief Executive

Successful retailing Exciting stores • Seamless digital experience • Great service and after sales support • UK & Ireland - Property

Store initiatives UK & Ireland - Property

Digital/online The Pay Monthly Journey New Carphone Warehouse website • Everyday Heroes • Soft credit check • Extension of Click & Collect to • more CPW stores Radical transparency •

Relentless focus on service Today Last year 6.1 5.8 Delivery days (ave.) 72% 66% Next Day Availability 1-3 days 2-3 days Free National Delivery 94% 94% 1-3 days Same day delivery Early bird and night owl delivery

Connectivity iD base of over 335,000 • Multiplay launched in over 270 stores • Simplifydigital • Leasing proposition •

Nordic initiatives Norway pricing • Jönköping extension • Knowhow/Infocare • B2B •

Nordic initiatives (cont.) Co-branded stores • Epoq – kitchen MDA • Accessories •

Southern Europe • Tough conditions but strong effective team • Market share gains, strong like-for-like growth • Greater focus on franchise operations • Development of new smart home proposition

Integration

Technology to drive customer excitement iPhone 7 • Samsung S7 • True wireless buds • Wallpaper TV • Continuum • Ambient computing • Virtual Reality (VIVE) •

Knowhow and CWS Andrew Harrison – Deputy Chief Executive

Knowhow Addressable Value Pools (Revenue) Installed Base and Spend on Connected Devices m units $bn £mn 16 1.8 2,500 Volume of devices 1.6 14 Computing Mobile devices White goods TV 2,000 Spend on devices £2.3bn £1.5bn £0.7bn £0.5bn 1.4 12 1.2 1,500 10 1 8 1,000 0.8 6 0.6 500 4 0.4 0 2 0.2 Repairs Insurance / Broadband Consumer Ongoing Installation Energy Setup Extended switching Credit Support switching 0 0 Warranty 2014 2015 2016 2020 Sources: Gartner Symposium/ITxpo, Nov 2015 £5bn addressable technology services market, supported by a continued increase in connected devices … fragmented and poorly served today in the UK

Leeds trial 1: Build in-home services Launching Energy Saver and Broadband & Wi-Fi Expert Compare and switch Promoted in store and in the home 2: Own repairs Mobile and computing repairs in store Up to same day turn around at new Leeds Super clinic Aim to increase chargeable repair market share in all categories 3: Acquire a membership base Demonstrate a new model that acquires and monetises customers 30 day free phone tech support to drive sign up with up sell Tailored self help content to create stickiness Knowhow

CWS Leverage the specialist skills, operating processes and technology of the Dixons Carphone business to provide services to third parties looking to develop their own connected world solutions

Support and Services Extended contract with RBS for the provision of 3 rd party mobile phone insurance Signed a new contract with EE for the provision of 3 rd party mobile phone insurance Extended contract with TalkTalk beyond mobile services to support all customer channels and categories Ambition to be the largest provider of 3rd party mobile insurance in the UK CWS

Connected Retailing • Successfully completed trial in the US resulting in the agreement to roll-out 500 stores • Conversion significantly better and customer satisfaction scores almost double • Operating 27 of Sprint’s own stores in Miami and Dallas as part of our IP work stream, with current performance +30% vs targets • Joint venture expected to contribute $40m-$50m of annual EBIT to the Group by 2019/20 CWS

Our rollout plan • c.150 stores to roll-out in the next 12 months • 5 region strategy to follow network investment to access the highest value customers • New, optimised store format created resulting in significant savings • Implemented 20 new back office systems and processes to drive greater efficiencies • 17 stores now open, 7 more in July, 14 in August & 42 in September CWS

honeyBee software MAKE HONEYBEE THE GLOBAL INDUSTRY STANDARD FOR BUILDING, DELIVERING AND MANAGING DIGITAL CUSTOMER JOURNEYS Agreement reached with Sprint to roll-out honeyBee across their entire estate in the US specialist telecoms multi-industry product multi-industry product product 35 • CWS

Summary and Q&A