Preliminary Results 2006/07 20 June 2007

Transcription

1 Preliminary Results 2006/07 20 June 2007

2 John Clare Group Chief Executive

3 Group performance Year of significant change Underlying sales Underlying Like for Like sales Underlying PBT Gross margins down 0.3% 7.93bn 295.1m +14% +4% 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

4 Group performance Strong demand for digital products Units Value Flat Panel Televisions +104% +70% Laptops +59% +33% Satellite Navigation +109% +54% Digital Audio Products (excl. UK) +42% +49% 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006

5 Italy Significant restructuring programme Decentralised to centralised Weak economy Competitive markets Distribution centre Store

6 Italy Management team strengthened Marketing investment Store refurbishment programme 35 in 8 weeks further 25 planned Improved shopping experience

7 Italy Improved ranging, pricing and availability Brand awareness and value perception improving Store portfolio expansion Improved internet offer launched Confident in long term prospects

8 Eldorado Group has terminated the agreement Significant progress in understanding Corporate, economic and political risks Russia remains a potential opportunity 100 million share buy back

9 Kevin O Byrne Group Finance Director

10 Underlying sales million 06/07 05/06 YOY UK & Ireland Electricals 2,809 2,743 2% International Electricals 2,472 2,169 14% Total Electricals 5,281 4,912 8% UK Computing 1,851 1,752 6% International Computing % Total Computing 2,198 2,040 8% e-commerce n/a Underlying sales * 7,930 6,984 14% 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix * Underlying sales total include Codic

11 Underlying profit million 06/07 05/06 UK & Ireland Electricals International Electricals Total Electricals UK Computing International Computing (28.2) (22.2) Total Computing e-commerce Corporate centre (25.7) (27.3) Property profits Underlying net finance income Underlying profit weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

12 Underlying profit before tax million 06/07 05/06 Reported PBT Net fair value remeasurement 10.5 (10.3) Profit on sale of investments - (2.9) Profit on sale of subsidiary - - Amortisation of acquired intangibles Restructuring costs One off charges - impairment / other Effect of changes in pension benefits (4.7) - Net charges Underlying profit before tax Underlying adjusted diluted EPS 10.9p 11.8p 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

13 Restructuring and one off costs million million Restructuring costs (55.4) Distribution network (17.0) PC City operating model (38.4) Charges relating to UniEuro (115.1) 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

14 Free cash flow million 06/07 05/06 YOY Underlying profit before tax (16) Depreciation & Amortisation Working capital (37) Working capital impact of PAYG (67) (86) 19 Taxation (101) (85) (16) Capital Expenditure (136) (153) 17 Sales of freehold property Other (11) 3 (14) Free Cash Flow before restructuring items (23) Logistics restructure (27) 37 (64) Exceptional items (37) (3) (34) Underlying Free Cash Flow (120) 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

15 Net funds Million Opening funds Free cash flow Dividends Acquisitions / Disposals Pension contribution Other Closing funds 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

16 Taxation Underlying tax charge 89m Full year tax rate 30% Increase in effective overseas tax rates 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

17 Dividends & share buy back Final dividend 6.85p +5% Full year dividends of 8.87p Underlying earnings cover 1.22 Dividend covered by Free Cash Flow Dividends grow in line with earnings over time 100 million share buy back initiated 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006 For definitions see appendix

18 Cost savings Incremental savings million 06/07 07/08 Information systems 5m 5m Logistics 5m 10m General 15m 10m 25m 25m Underlying LfL cost inflation of 2.5% - 3.0%

19 John Clare Group Chief Executive

20 Year of change Significant number of actions taken Discontinued operations Communications - changing market PC City France - focus on e-commerce F r a n c e

21 Investment in customer service Engagement and development programme Team bonuses Training in product and customer handling Launch of The TechGuys European service opportunities

22 Investment in support 50 million investment UniEuro restructuring International buying teams UK logistics infrastructure

23 Investment in e-commerce

24 International growth Elkjøp Sales growth of 217% since acquisition Kotsovolos Sales growth of 67% since acquisition PC City Spain now profitable NOK Millions 14,000 10,000 6,000 2, Euro Millions % % Electro World in Czech now profitable

25 International growth Sharing of best practices across countries 1.6 million ft 2 of new space mostly outside UK International represents 41% of Group sales % Sales m % 35% 30% 25% 20% 15% 10% 5% /00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 0% Acquired Growth post acquisition Investments % of underlying Group sales

26 Outlook Year started well Cautious in many markets Exciting product pipeline Earnings back on track

27 Preliminary Results 2006/07 20 June 2007

28 Appendices

29 Appendices Group 5 Year Financials Group LFL Sales Trends Group Store Numbers and Space Trends Shares in issue Notes and definitions 52 weeks to 28 April 2007 vs. 52 weeks to 29 April 2006

30 Group 5 year financials IFRS IFRS IFRS UK GAAP UK GAAP UK GAAP Sales 7,930 6,984 6,452 6,452 5,947 5,294 Operating profit (1) Operating margin (1) 3.5% 4.1% 4.1% 4.2% 4.7% 4.7% Net Finance Income (1) Profit before tax (1) Adjusted diluted EPS 10.9p 11.8p 10.9p 11.3p 11.1p 10.0p Depreciation (2) Free cash flow (1) Figures shown on an underlying basis (2) Includes amortisation of other intangibles

31 Group like for like sales trend 06/07 06/07 06/07 05/06 05/06 05/06 FY H2 H1 FY H2 H1 UK Electricals 3% 1% 5% 3% 8% (3%) Ireland 8% 3% 14% 11% 15% 6% UK & Ireland Electricals 3% 1% 5% 3% 8% (2%) Elkjøp 9% 6% 11% 7% 10% 5% UniEuro (8%) (6%) (10%) 3% 2% 4% Kotsovolos 7% 5% 8% 7% 3% 10% Southern Europe (3%) (2%) (5%) 4% 2% 6% Total Electricals 3% 1% 4% 4% 7% 0% PC World 4% 4% 3% (4%) 0% (8%) E-Commerce 182% 176% 192% n/a n/a n/a Total Group (Underlying) 4% 3% 5% 2% 6% (1%)

32 Group - stores & space UK & Ireland Electricals Store numbers 06/07 05/06 04/05 03/04 UK Electricals Ireland UK & Ireland Electricals Space 000 sq ft 06/07 05/06 04/05 03/04 UK Electricals 4,966 5,005 4,983 5,147 Ireland UK & Ireland Electricals 5,247 5,216 5,154 5,306

33 Group - stores & space International Electricals Store numbers 06/07 05/06 04/05 03/04 Elkjøp UniEuro Kotsovolos Electro World Int l Electricals Space 000 sq ft 06/07 05/06 04/05 03/04 Elkjøp 3,493 3,181 2,434 2,260 UniEuro 2,505 2,111 1,952 1,722 Kotsovolos Electro World Int l Electricals 7,596 6,541 5,428 4,363

34 Group - stores & space Computing Store numbers 06/07 05/06 04/05 03/04 UK Computing Int l Computing Total Computing Space 000 sq ft 06/07 05/06 04/05 03/04 UK Computing 2,513 2,421 2,355 2,243 Int l Computing Total Computing 3,512 3,296 2,998 2,691

35 Group - stores & space total Store numbers 06/07 05/06 04/05 03/04 UK & Ire Electricals Int l Electricals UK Computing Int l Computing Total Group 1,299 1,215 1,152 1,145 Space 000 sq ft 06/07 05/06 04/05 03/04 UK & Ire Electricals 5,247 5,216 5,154 5,306 Int l Electricals 7,596 6,541 5,429 4,363 UK Computing 2,513 2,421 2,355 2,243 Int l Computing Total Group 16,356 15,053 13,581 12,360

36 Geographical store distribution 06/07 05/06 04/05 UK & Ireland Southern Europe Owned Stores Franchises Nordic Owned Stores Franchises Central Europe Total Group (underly ing) 1,299 1,215 1,152 Owned Stores 1,180 1,145 1,098 Franchises

37 Shares in issue Number of shares at year end 06/07 05/06 04/05 FY FY FY Number of shares in issue 1,842.7m 1,824.7m 1,892.0m Weighted average number 1,836.7m 1,844.7m 1,922.1m of shares for basic eps Weighted average number 1,855.8m 1,863.2m 1,941.5m of shares for diluted eps

38 Notes and definitions (1) Unless otherwise stated, figures relate to continuing operations. (2) Like for like sales are calculated based on stores that have been open for a full financial year both at the commencement and end of the financial period. Customer support agreement sales are excluded from all UK like for like calculations to remove the distorting effect of the introduction of pay as you go customer support agreements. Chains that are subject to closure have sales excluded as of the announcement date. (2) Throughout this statement, references are made to 'underlying' performance measures. Underlying results are defined as being before amortisation of acquired intangibles, exceptional asset impairments, restructuring and other one off items, profit on sale of investments, net fair value remeasurements of financial instruments and, where applicable, discontinued operations. (3) Free Cash Flow relates to continuing operations and comprises net cash flow from operating activities before special pension contributions, plus net finance income, cash flows related to finance leases, less income tax paid and net capital expenditure.

39 Preliminary Results 2006/07 20 June 2007