Preliminary Results Financial year to 30 April 2013 I NTRODUCTION - PowerPoint PPT Presentation

Preliminary Results Financial year to 30 April 2013

I NTRODUCTION • Very strong year of progress • Group underlying and LfL sales up 4% • Finished the year strongly • UK & Ireland LfL +13% in Q4 • Northern Europe +14% in Q4 • Material share gains • Significant steps taken in resolving Pixmania’s position • Ended the year with net cash - ahead of schedule Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 2 20 June 2013 Preliminary Results 2012/13

UK & I RELAND • Total sales up 7% • Operating profit up 39% to £113m • Strong market share gains • Increased value for customers • Advocacy ratings remain high • New customer initiatives • New customer journeys • Pay & Collect • White goods repairs • Showhows • 9pm next day delivery • Multi-award winning websites • Good progress on store portfolio rationalisation • Targeting 380-400 stores Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 3 20 June 2013 Preliminary Results 2012/13

UK & I RELAND MARKET SHARE Overall market Comet share winners 30% 21% 22% 25% Mass Merchants Argos & Supermarkets 20% 12% 15% 41% Single Channel Other specialists Amazon & Others 10% 4% 5% Others 0% 63% 37% S ERVICE LED L IMITED OR NO SERVICE Source: Dixons Retail estimates 4 20 June 2013 Preliminary Results 2012/13

P RICING POSITION REMAINS STRONG 125% Cheaper than CurrysPCWorld 120% 115% 110% 105% 100% More expensive than CurrysPCWorld 95% 90% 85% 80% Competitor 1 Competitor 2 Competitor 3 Competitor 4 Source: Dixons Retail Competitor Price Index 5 20 June 2013 Preliminary Results 2012/13

A DVOCACY REMAINS HIGH Very likely to recommend % 78% 76% 75% 75% 74% 74% 75% 73% 73% 72% 72% 72% 71% 71% 71% 71% 70% 69% 68% 67% 67% 67% 65% 63% 60% 57% 53% 53% 50% 48% 46% 43% 44% Source: Dixons Retail customer exit surveys UK&I only 6 20 June 2013 Preliminary Results 2012/13

N ORTHERN E UROPE • Strong growth in all markets with full year LfLs up 12% • Highest ever achieved profitability at £120.5m • Operating margin of 4.2% • New customer initiatives • Happy or Not • Knowhow • Reserve & Collect • New management team embedded Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 7 20 June 2013 Preliminary Results 2012/13

S OUTHERN E UROPE • Total sales down 4% • LfLs down 8% • Operating loss of £24m G REECE • Robust performance in a difficult market • Strong cost controls • Improved profitability y-on-y • 3 store in store trial with Carrefour/Marinopoulos Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 8 20 June 2013 Preliminary Results 2012/13

S OUTHERN E UROPE CONT ’ D I TALY • Significant improvement in profitability • Excellent cost control • Market likely to consolidate • Recent high profile awards T URKEY • Very fragmented market • Race for share growth • Good store estate of 14 stores and 18 franchise stores • Market consolidation likely Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 9 20 June 2013 Preliminary Results 2012/13

PIX MANIA • Poor performance in difficult markets • Significant actions taken during the year • Day to day control • Restructured operations • Exited 12 countries • Non-core ranges exited • Headcount reductions • Sales agreed of Webhallen and PLS • Exploring strategic opportunities Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 10 20 June 2013 Preliminary Results 2012/13

Y EAR AHEAD • Resolve strategic positions in Italy, Turkey and of PIXmania • Knowhow services • Roll out in Nordics • New added value services • Digital downloads • Customer journeys • Refrigeration • Roll out overseas • Future stores • Exciting new High street format • New superstore format in Aylesbury • Continue to deliver improving returns Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 11 20 June 2013 Preliminary Results 2012/13

S TRATEGIC PRIORITIES S USTAINABLE BUSINESS MODEL R ESOLVE STRATEGICALLY WEAK POSITIONS D EVELOPMENT OF GROUP BENEFITS F UTURE OPPORTUNITIES 12 20 June 2013 Preliminary Results 2012/13

Financial review

F INANCIAL SUMMARY • Underlying profit before tax of £94.5 million • Group gross margins down 0.7% • Predominantly product mix • £45 million cost reduction achieved • Year 1 of £90 million 2 year programme • Positive free cash flow of £173.2 million, before restructuring items • Net cash of £42.1 million • RCF extended to June 2015 • Reducing to £200 million by August 2013. Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 14 20 June 2013 Preliminary Results 2012/13

U NDERLYING PROFIT BEFORE TAX £ Million 250 24.4 200 31.3 120.5 16.9 150 25.2 136.0 41.5 100 94.5 113.3 50 0 UK & Northern Southern Pixmania Central Property EBIT Net finance Underlying Ireland Europe Europe costs PBT Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 15 20 June 2013 Preliminary Results 2012/13

U NDERLYING PROFIT BEFORE TAX UK & Ireland Northern Europe £m £m £m £m 4,100 120 3,500 125 110 120 3,900 3,000 100 115 3,700 2,500 90 110 80 3,500 2,000 105 70 100 3,300 1,500 60 95 50 3,100 1,000 90 40 2,900 500 30 85 2,700 20 0 80 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13 Operating profit (RH scale) Sales (LH scale) Operating profit (RH scale) Sales (LH scale) Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 16 20 June 2013 Preliminary Results 2012/13

N ON UNDERLYING ITEMS £ million 12/13 11/12 Underlying profit before tax 94.5 82.1 Business exited/to be exited (7.7) (8.5) Business impairment (79.4) (196.0) Net restructuring charges (89.4) (16.3) Amortisation of acquired intangibles (4.2) (4.5) Jönköping disposal - 37.2 Other items (10.2) (4.3) Loss on sale of Equanet (9.6) - Net fair value remeasurement (1.9) (2.8) Net Pension Interest (7.4) (5.7) Total net non-underlying charges (209.8) (200.9) Total (loss) / profit before tax (115.3) (118.8) Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 17 20 June 2013 Preliminary Results 2012/13

P OSITIVE FREE CASH FLOW • Strongly cash generative • Closing net funds £42.1 million (net debt £104.0 million last year) • including £110.2 million restricted funds £ million 12/13 11/12 Underlying profit before tax 94.5 82.1 Businesses exited/to be exited (7.7) (8.5) Depreciation & amortisation 134.0 138.8 Working capital 94.6 15.8 Taxation (11.8) (26.8) Capital expenditure (92.4) (101.5) Property Disposal Proceeds - 70.2 Historical currency hedges (62.6) - Other 24.6 4.0 Free Cash Flow before restructuring items 173.2 174.1 Net restructuring (19.8) (43.8) Free Cash Flow 153.4 130.3 Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 18 20 June 2013 Preliminary Results 2012/13

S UMMARY • Improving profitability in our multi-channel businesses • UK & Ireland and Northern Europe growing profits substantially • Improved performances in Italy and Greece • Restructured PIXmania • Delivered £45 million of cost reductions • Further £45 million targeted in year ahead • Generated £153m of free cash • Net cash position for first time in 5 years • Focused on our strategic priorities • Drive towards improving return on capital employed • Cautious about the consumer outlook Financial Year to 30 April 2013 vs Financial Year to 28 April 2012 For definitions see appendix 19 20 June 2013 Preliminary Results 2012/13

Appendices

Appendices 1. Group LFL Sales Trends 2. Group Store Numbers and Space Trends 3. Shares in issue 4. Notes and definitions 21 20 June 2013 Preliminary Results 2012/13

1. G ROUP LIKE FOR LIKE SALES TREND 12/13 12/13 12/13 11/12 11/12 11/12 10/11 10/11 10/11 FY H2 H1 FY H2 H1 FY H2 H1 UK & Ireland 7% 10% 3% (4%) 0% (8%) (4%) (7%) 1% Northern Europe 12% 12% 11% 6% 6% 5% 5% 8% 1% Southern Europe* (8%) (6%) (9%) (8%) (10%) (5%) (6%) (6%) (5%) PIXmania* (24%) (31%) (9%) (10%) (7%) (16%) (1%) (4%) 3% Total Group (Underlying) * 4% 5% 3% (3%) (1%) (5%) (2%) (4%) 1% * Note: Southern Europe 10/11 restated to exclude PC City Spain. Pixmania H1 12/13 restated to exclude businesses exited/to be exited. 22 20 June 2013 Preliminary Results 2012/13