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

Core Business Core Business Opportunities

Synergies

Connected World Services Knowhow

Our growth story

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

Awards

• Integration progressing strongly
• 276 UK&I SWAS
• Announced 3-in-1 roll-out
• ‘Own the Kitchen’ store-in-store

initiative

• New Carphone Warehouse web

platform

• Carphone Warehouse Click &

Collect launched

• Share gains in all markets
• Pricing at most competitive ever
• Customer satisfaction levels at all

time highs

2015/16 Overview

• Launched iD
• Acquisitions of Simplifydigital and

Infocare

• Norsk Prising
• Co-branding in Norway and

Sweden

• Sprint Joint Venture launched
• honeyBee extends contract with

major US manufacturer

• CWS agreements signed with

TalkTalk, EE and RBS

• 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
• f annual EBIT to the Group by 2019/20
• honeyBee platform: major 3rd party deal signed with US carrier

2015/16 Key numbers

23.4% 24.7% 25.7%

CPW (Postpay) Currys PC World

13.7% 21.4% 23.5%

Q1 CY 14 Q1 CY 15 Q1 CY 16

UK electrical pricing Customer satisfaction UK market shares

Long term growth metrics

Finance Update

Humphrey Singer – Group Finance Director

Finance Update

468 447 (21) 365 79 17 7

100 200 300 400 500 UK & Ireland Nordics Southern Europe Connected World Services EBIT Net finance cost PBT £m

YOY : +£60m (£7m) +£2m Flat +£55m +£11m +£66m

Strong earnings growth

Finance Update

202 (76) (221) (56) (31) (43) 468 137 24

100 200 300 400 500 600 700 Headline EBIT

• Dep. &

amort. Working capital Capex Taxation Interest

• Restr. /

Merger Other Free cash flow £m

Free Cash Flow

Finance Update

(267) (106) (82) (35) (260) 202 14

(300) (250) (200) (150) (100) (50) Opening Net debt Free cash flow Dividends Acquisitions and disposals Pension contributions Other items Closing Net debt £m

Balance Sheet

Property optimisation

Finance Update

• 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

stores 2 Jan 2016 29 Jun 2016 Future Plan

• Currys

91 63

• PC World

60 45

• Currys Digital

8 2

• CurryPCWorld CPW

243 264 323 Total 402 374 323

What’s happening in Hull

UK & Ireland - Property

Finance Update

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

• 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

Guidance

Market Updates

Seb James – Group Chief Executive

• Exciting stores
• Seamless digital experience
• Great service and after sales support

UK & Ireland - Property

Successful retailing

UK & Ireland - Property

Store initiatives

• New Carphone Warehouse website
• Everyday Heroes
• Soft credit check
• Extension of Click & Collect to

more CPW stores

• Radical transparency

The

Pay Monthly Journey

Digital/online

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

Relentless focus on service

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

Connectivity

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

Nordic initiatives

• Co-branded stores
• Epoq – kitchen MDA
• Accessories

Nordic initiatives (cont.)

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

Southern Europe

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

500 1,000 1,500 2,000 2,500 Repairs Insurance / Extended Warranty Broadband switching Consumer Credit Ongoing Support Installation Energy switching Setup

Addressable Value Pools (Revenue) 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 4 6 8 10 12 14 16 2014 2015 2016 2020 Installed Base and Spend on Connected Devices

Volume of devices Spend on devices

White goods

£0.7bn

Computing

£2.3bn

Mobile devices

£1.5bn

TV

£0.5bn Sources: Gartner Symposium/ITxpo, Nov 2015

$bn m units £mn

£5bn addressable technology services market, supported by a continued increase in connected devices …fragmented and poorly served today in the UK

Knowhow

Knowhow

Launching Energy Saver and Broadband & Wi-Fi Expert Compare and switch Promoted in store and in the home

1: Build in-home services

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 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

2: Own repairs 3: Acquire a membership base

Leeds trial

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

CWS

Extended contract with RBS for the provision of 3rd party mobile phone insurance Signed a new contract with EE for the provision of 3rd 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

Support and Services

• 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

Connected Retailing

• 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

Our rollout plan

MAKE HONEYBEE THE GLOBAL INDUSTRY STANDARD FOR BUILDING, DELIVERING AND MANAGING DIGITAL CUSTOMER JOURNEYS

multi-industry product multi-industry product specialist telecoms product

35

honeyBee software

Agreement reached with Sprint to roll-out honeyBee across their entire estate in the US

• CWS

Summary and Q&A

Core Business

Synergies

Core Business Opportunities Knowhow

• Price
• Market share
• Cust. satisfaction
• £80m synergies
• Property and

store initiatives

• New categories
• Digital/online
• Multi-play
• Connectivity
• honeyBee
• Sprint
• Support and

services

• Leeds trial
• National rollout

Connected World Services

Our growth story

Q&A