2018 Preliminary Results 28 February 2019 Howdens 2018 Preliminary - - PowerPoint PPT Presentation

▶
2018 preliminary results
SMART_READER_LITE
LIVE PREVIEW

2018 Preliminary Results 28 February 2019 Howdens 2018 Preliminary - - PowerPoint PPT Presentation

Jan 07, 2024 482 likes •1.08k views

2018 Preliminary Results 28 February 2019 Howdens 2018 Preliminary Results Andrew Livingston Chief Executive Officer Howdens 2018 Preliminary Results Sales 1,511m, +7.7%, profit before tax 242.3m* Gr Gross oss margin d devel evelop

slide-1
SLIDE 1

Howdens 2018 Preliminary Results

2018 Preliminary Results

28 February 2019

slide-2
SLIDE 2

Howdens 2018 Preliminary Results

Andrew Livingston

Chief Executive Officer

slide-3
SLIDE 3

Howdens 2018 Preliminary Results

Sales £1,511m, +7.7%, profit before tax £242.3m*

Gr Gross

  • ss margin d

devel evelop

  • ped

ed in H H2 wi with sa sales m es mom

  • men

entum Per eriod

  • d 11

11 Success ess

  • Incentives and focus
  • Lead generation build
  • Availability (Raunds' distribution)

33 n new ew dep epot

  • ts (

s (2017 17: : 19 19 d dep epot

  • ts)

s) Ne New di digi gital tal pl platf atform l rm lau aunche nched d to to rai raise co cons nsumer bran r brand d aw aware arene ness Ne New f format trade rmat trade bo book

*(exc.

  • c. GMP e

equa ualisa sation

  • n cha

charge)

2

Howdens 2018 Preliminary Results

slide-4
SLIDE 4

Howdens 2018 Preliminary Results

Dep Depot

  • t n

net etwor work In In st stoc

  • ck

Tr Trade f e foc

  • cussed

ssed Plan anni ning s ng suppo upport rt Trade rade acco account f t faci acility ty Desi Design Qual uality ty pro products ducts UK man manuf ufac acturi uring bas ng base Ran ange ge leade aders rship Local cal pri price ces Rigi gid cabi d cabinets ts Empo Empowere red te d teams ams Dedi dicate cated d suppl upply ch y chai ain

3

Howdens 2018 Preliminary Results

slide-5
SLIDE 5

Howdens 2018 Preliminary Results

Ens Ensure ure hi high gh local cal sto tock av ck avai ailabi ability ty – a a ke key part part of

  • u
  • ur ser

servi vice Provi

  • vide

e on

  • nline

e accessi essibility Spe Speed u d up o p our ur pi picki cking ti ng time mes Impro mprove our r di displ play ay env nviro ronme nment f t for the r their r cust stom

  • mer

ers

4

Howdens 2018 Preliminary Results

slide-6
SLIDE 6

Howdens 2018 Preliminary Results

Inte nteracti ractive Input on ne new p product Ope perati rational al pri priori riti ties Sal Sales and margi and margin trac n tracki king

5

Howdens 2018 Preliminary Results

slide-7
SLIDE 7

Howdens 2018 Preliminary Results

INTERNATIONAL DIGITAL DEVELOPMENT RANGE MANAGEMENT DEPOT EVOLUTION

6

Howdens 2018 Preliminary Results

slide-8
SLIDE 8

Mark Robson

Deputy CEO and Chief Financial Officer

7

slide-9
SLIDE 9

Howdens 2018 Preliminary Results

Highlights

(3.8)* 200 225 250 2017 2018

Op Operat ating ng profit, £m £m, and and mar argi gin, n, % %

1250 1300 1350 1400 1450 1500 1550 2017 2018

Rev Reven enue, e, £m

HJ UK Cont Europe HJ UK: +7.7% (3.8)* 200 225 250 2017 2018

Profit t befo efore e ta tax, £m

30.0 27.5 48.5 44.3 68.4 68.3 47.9 62.2 50 100 150 200 250 2017 2018

Use ses o s of ‘cash ash’, £m £m

Pension def Cap ex Dividend Share rep 1,372.0 1,477.3 34.0 1,403.8 1,511.3 31.8 241.1 231.3 200 225 250 Dec-17 Dec-18

Ne Net t ca cash, h, £ £m

35.0 232.2 242.3 16.7% 15.9% 234.4 240.1 750 800 850 900 950 2017 2018

Gross ross pro rofit, , £m, , and m marg rgin, % , %

63.3% 61.7% 888.4 932.2 243.9 238.5

* GMP equalisation charge Profit before tax * GMP equalisation charge Operating profit

8

slide-10
SLIDE 10

Howdens 2018 Preliminary Results

Revenue

20 2018 8 UK K dep epot rev evenue £1 £1,477.3m

  • total +7.7% • LFL +6.3%

201 018 Cont

  • ntinent

ntal E Eur urop

  • pe depot
  • t r

reve venu nue £ £34.0m 4.0m

  • France total (€) +4.4% • LFL +4.4%

9

slide-11
SLIDE 11

Howdens 2018 Preliminary Results

Profit before tax

£m

888.4 Change £43.8m 932.2 2017 2018

Gross profit

  • Currency

1 Cost pressure/ savings, etc.

(net)

(10) Price

(revenue)

(10) Volume & mix

(COGS)

(55) Volume & mix

(revenue)

117

2017

£m

Interest, etc. 1

Change £6.3m

Gross Profit 44

232.2 238.5

  • 2018

Profit before tax

Operating Costs* (34)

*includes £8m impact of 53rd week

Group gr p gross ss pr profit t mar argi gin

  • 2017: 63.3% • 20

2018: 18: 61. 61.7%

GMP Equalisation Charge (4)

Change £10.1m

242.3

10

slide-12
SLIDE 12

Howdens 2018 Preliminary Results

Operating costs

New depots 9

2017(1) 2018(1) Change £38.1m

Older depots 20

£m Operating costs

654.0 692.1

Growth related 9

  • Other

4

2017

646.5

53rd week 8 GMP equalisation charge 4

688.3

2018

(1) Reported

11

slide-13
SLIDE 13

Howdens 2018 Preliminary Results

Income statement

Revenue 1, 1,511 11.3 1,403.8 Cost of goods sold (579 579.1) (515.4) Gross profit 93 932. 2.2 888.4 Operating costs (before GMP equalisation charge) (688. 688.3) (654.0) GMP equalisation charge (3 (3.8 .8)

  • Operating profit

240 40.1 .1 234.4 Net interest (1. 1.6) 6) (2.2) Profit before tax 23 238. 8.5 232.2 Tax (48. 8.1) 1) (47.2) Profit for the period 190 190.4 185.0

£m 20 2018 2017

12

slide-14
SLIDE 14

Howdens 2018 Preliminary Results

Earnings per share and dividends

  • Earnings per share

31. 31.3p 3p 29.9p

  • Dividend
  • Final (recommended)

7.9 .9p 7.5p

  • Full year

11.6p 6p 11.1p 2018 final dividend costing £47.6m

£m 20 2018 2017

13

slide-15
SLIDE 15

Howdens 2018 Preliminary Results

Net cash and cash flow

£m 20 2018 2017

Opening net cash 24 241. 1.1 226.6 Operating cash flows before movements in working capital 274.6 4.6 266.6 Working capital (49 49.7 .7) (26.9) Capital expenditure (44.3 4.3) (48.5) Tax paid (45 45.4 .4) (41.8) Dividends (68. 68.3) (68.4) Share repurchases (62. 62.2) 2) (47.9) Pension contribution (16. 16.3) (21.2) Other 1. 1.8 2.6 Closing net cash 231 31.3 241.1

14

slide-16
SLIDE 16

Howdens 2018 Preliminary Results

Working capital

  • Working capital increased £49.7m

– stock up £18m – debtors up £48m – creditors up £16m

15

slide-17
SLIDE 17

Howdens 2018 Preliminary Results

Shareholder Returns 2017 2018 2019 Total

Feb 2017 programme

48 32

  • 80

March 2018 programme

  • 30

30 60

Feb 2019 programme

  • 50*

50

Total share repurchases

48 62

Dividends

68 68

Total shareholder returns

116 131

Return of excess cash to shareholders

  • Two year share repurchase programmes:
  • February 2017: £80m
  • March 2018: £60m
  • February 2019: £50m

*£50m over two years

16

slide-18
SLIDE 18

Howdens 2018 Preliminary Results

Pension scheme deficit

Dec 2017 Change £(73.3)m

Net discount rate (105)

Dec 2018

IAS19 basis

  • 109.3

36.0

Asset returns 46 Current service charge + admin cost + interest 24 Contribution (42)

£m

GMP equalisation charge 4

17

slide-19
SLIDE 19

Howdens 2018 Preliminary Results

Current trading & outlook for 2019

  • UK sales in first two periods up 4.0%, LFL +2.4%

‒ Adjusted for one fewer trading day up 5.1%, LFL +3.5%

  • Cost pressures

‒ exit of Dutch & German businesses – digital development – depreciation – growth & inflation – additional depots

  • Capital expenditure: c.£60m 2019
  • Banking arrangements
  • Brexit planning

18

slide-20
SLIDE 20

Howdens 2018 Preliminary Results

19

Howdens 2018 Preliminary Results

slide-21
SLIDE 21

Howdens 2018 Preliminary Results

DEPOT EVOLUTION INTERNATIONAL DIGITAL DEVELOPMENT RANGE MANAGEMENT

Howdens 2018 Preliminary Results

20

slide-22
SLIDE 22

Howdens 2018 Preliminary Results

Depo pot f t format rmat and l and layo ayout ut bro broadl adly y unchanged ed si since e 19 1995

Howdens 2018 Preliminary Results

21

slide-23
SLIDE 23

Howdens 2018 Preliminary Results

Respo pondi nding g to to chan hangi ging ng re requ quire reme ments nts Space Space max maximi misati ation 18 18 dep epot

  • t t

test est

22

Howdens 2018 Preliminary Results

slide-24
SLIDE 24

Howdens 2018 Preliminary Results

23

Respo pondi nding g to to di differe rent nt re requ quire reme ments nts Space Space max maximi misati ation 18 18 dep epot

  • t t

test est

Howdens 2018 Preliminary Results

slide-25
SLIDE 25

Howdens 2018 Preliminary Results

Cre reati ating ng the the be best t en envi viron

  • nmen

ent Space Space max maximi misati ation 18 18 dep epot

  • t t

test est

24

Howdens 2018 Preliminary Results

slide-26
SLIDE 26

Howdens 2018 Preliminary Results

Two Two mod

  • del

el for

  • rmats

25

Howdens 2018 Preliminary Results

slide-27
SLIDE 27

Howdens 2018 Preliminary Results

Impro mproved di d displ play ay env nviro ronme nment

26

Howdens 2018 Preliminary Results

slide-28
SLIDE 28

Howdens 2018 Preliminary Results

Op Open en, a accessi essible e of

  • ffices f

es for

  • r i

improved

  • ved

con

  • nver

versa sation

  • ns

27

Howdens 2018 Preliminary Results

slide-29
SLIDE 29

Howdens 2018 Preliminary Results

Testi ting g a bro a broade ader r hardw hardware are o

  • ffer

28

Howdens 2018 Preliminary Results

slide-30
SLIDE 30

Howdens 2018 Preliminary Results

Servic ice v vis isib ibilit ility

29

Howdens 2018 Preliminary Results

slide-31
SLIDE 31

Howdens 2018 Preliminary Results

30

Howdens 2018 Preliminary Results

slide-32
SLIDE 32

Howdens 2018 Preliminary Results

Impro mproved d de design gn and and pre presentati ntation n faci aciliti ties

31

Howdens 2018 Preliminary Results

slide-33
SLIDE 33

Howdens 2018 Preliminary Results

Wareh ehou

  • use

se – re restructure tructured d the the space pace, impro mproved d pi picki king g times es

32

Howdens 2018 Preliminary Results

slide-34
SLIDE 34

Howdens 2018 Preliminary Results

Con

  • nver

versi sion

  • n of
  • f 3 ol
  • lder

er dep epot

  • ts

6 mor

  • re d

e dep epot

  • ts

s con

  • nver

verted ed by August

33

Howdens 2018 Preliminary Results

slide-35
SLIDE 35

Howdens 2018 Preliminary Results

New ew 10 10,000 sq sq.f .ft. a . and 6 6,000 sq sq.f .ft. . formats rmats Bot

  • th c

can su suppor

  • rt full Howd
  • wden

ens of s offer er Op Open ens s up access ess to

  • new

ew loc

  • cation
  • ns

s to to cre create ate oppo pportuni rtunity ty for aro r around nd c. c. 850 50 d dep epot

  • ts

34

Howdens 2018 Preliminary Results

slide-36
SLIDE 36

Howdens 2018 Preliminary Results

RANGE MANAGEMENT INTERNATIONAL DIGITAL DEVELOPMENT DEPOT EVOLUTION

35

Howdens 2018 Preliminary Results

slide-37
SLIDE 37

Howdens 2018 Preliminary Results

Howd

  • wden

ens d s desi esign cen entre

36

Howdens 2018 Preliminary Results

slide-38
SLIDE 38

Howdens 2018 Preliminary Results

Industrial i influences

37

Howdens 2018 Preliminary Results

slide-39
SLIDE 39

Howdens 2018 Preliminary Results

Eme Emergi rging g line near ar tre trend nd

38

Howdens 2018 Preliminary Results

slide-40
SLIDE 40

Howdens 2018 Preliminary Results

Gre rey an and Nav d Navy y re remai main n po popu pular ar

39

Howdens 2018 Preliminary Results

slide-41
SLIDE 41

Howdens 2018 Preliminary Results

Ne New ch charco arcoal al

40

Howdens 2018 Preliminary Results

slide-42
SLIDE 42

Howdens 2018 Preliminary Results

41

Howdens 2018 Preliminary Results

slide-43
SLIDE 43

Howdens 2018 Preliminary Results

42

Howdens 2018 Preliminary Results

slide-44
SLIDE 44

Howdens 2018 Preliminary Results

43

Howdens 2018 Preliminary Results

slide-45
SLIDE 45

Howdens 2018 Preliminary Results

44

Howdens 2018 Preliminary Results

slide-46
SLIDE 46

Howdens 2018 Preliminary Results

45

Howdens 2018 Preliminary Results

slide-47
SLIDE 47

Howdens 2018 Preliminary Results

In Increa eased sed new p ew prod

  • duct sa

sales es on

  • n

fewer ewer new ew kitchen en r ranges es Rebal balanc ancing ng our ur sto tocki cking po ng points nts

  • ver
  • ver t

time Time mely y di disco conti ntinuati nuation o

  • f unde

under r pe perf rformi rming ng ran range ges

46

Howdens 2018 Preliminary Results

slide-48
SLIDE 48

Howdens 2018 Preliminary Results

DIGITAL DEVELOPMENT RANGE MANAGEMENT DEPOT EVOLUTION INTERNATIONAL

47

Howdens 2018 Preliminary Results

slide-49
SLIDE 49

Howdens 2018 Preliminary Results

Bui uildi ding di ng digi gital tal capabi capability ty

  • Im

Improve

  • ve inter

erface e for

  • r c

cust stom

  • mer

ers

  • In

Increa ease a se awa waren eness ess

  • Stre

Streaml amlined o d ope perati rating ng proc

  • cesses

esses Ne New pl platf atform rm

  • Mobile

ile fr frie iendly ly

  • Traf

raffic c gro growth th

  • Impro

mproved l d lead ad qual quality ty

48

Howdens 2018 Preliminary Results

slide-50
SLIDE 50

Howdens 2018 Preliminary Results

In Increa easi sing con

  • nsu

sumer er a awa waren eness ess

  • Gre

reate ater r visibi bility ty in s searc arch

  • Eas

Easier r ac acce cess to to pro products ducts, st styles es an and co d colours urs

  • Stro

Stronge nger s r soci cial al me medi dia a pre presence nce

49

Howdens 2018 Preliminary Results

slide-51
SLIDE 51

Howdens 2018 Preliminary Results

Bette tter r co conne nnecti tivity and ty and ope perati rating ng proc

  • cesses

esses

  • Mobile

ile fir first

  • Dep

Depot

  • t i

in p poc

  • cket

et

  • Trade

rade l logi gin n are area

  • Acc

ccount manage unt manageme ment nt

  • In

Infor

  • rmation
  • n a

access ess

50

Howdens 2018 Preliminary Results

slide-52
SLIDE 52

Howdens 2018 Preliminary Results

INTERNATIONAL DIGITAL DEVELOPMENT RANGE MANAGEMENT DEPOT EVOLUTION

51

Howdens 2018 Preliminary Results

slide-53
SLIDE 53

Howdens 2018 Preliminary Results

2018: 18: 24 d dep epot

  • ts

s in 4 4 c cou

  • untries

es Fre reestandi tanding ng marke market t esti timate mate FR € €1.6 1.6bn v v UK €2.1b .1bn DIY DIY kitchen en sa sales es - FR 91% 1% v v UK K 50 50% Mature e Fren ench d dep epot

  • ts

s sa sales es - €2.1m .1m (simi milar ar to to comparabl mparable UK de depo pots ts)

52

INTERNATIONAL

Howdens 2018 Preliminary Results

slide-54
SLIDE 54

Howdens 2018 Preliminary Results

Loc

  • cal clust

ster er ben enef efits City bas ty based d :

  • Re

Reach lo local l scale le

  • Es

Establ tablish acc accoun unts ts

  • Build Howd
  • wden

ens ‘ s ‘ know

  • w-how
  • w

an and cul d culture ture

Ta Targe rget A Are reas

53

Howdens 2018 Preliminary Results

slide-55
SLIDE 55

Howdens 2018 Preliminary Results

Rebrandi branding to ng to gai gain adv n advan antage tages fro rom m :

  • UK brand e

brand equi quity ty

  • Onl

nline ne search arch re reputati putation

  • Busi

siness ef ess efficien encies es

54

Howdens 2018 Preliminary Results

slide-56
SLIDE 56

Howdens 2018 Preliminary Results

Pri rice ce i incre creas ase i in J n January anuary Op Open en 4 40 UK K dep epot

  • ts

Bre rexit pl t plan anni ning ng 5.1% 5.1% Sales es growt

  • wth on
  • n a

a sa same e day basi sis s – P1 1 & P & P2

55

2019

Howdens 2018 Preliminary Results

slide-57
SLIDE 57

Howdens 2018 Preliminary Results

Exp xpo V

  • Visi

sit – 4th

th Ap

April il 2019

56

Howdens 2018 Preliminary Results

slide-58
SLIDE 58

Howdens 2018 Preliminary Results

2018 Preliminary Results

28 February 2019