Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — FY2016 Earnings Presentation
28 slides from Jb Hi-fi's earnings presentation, Aug 15, 2016
Slide 1: FY16 Results Presentation
For personal use only FY16 Results Presentation 15 AUGUST 2016 PAGE 1
Slide 2: Agenda
Agenda For personal use only 1. Highlights 2. FY16 Results Trading performance Balance sheet and cash flow Capital management 3. Business Update Our objectives The JB HI-FI model Store portfolio Home appliances Sydney International Airport JB HI-FI Solutions Online Supply chain
Slide 3: Financial highlights FY16
1. Highlights For personal use only Financial highlights FY16 Total sales up 8.3% to $3.95 billion Comparable sales up 5.4% Gross profit up 8.4% EBIT up 10.1% to $221.2 million NPAT up 11.5% to $152.2 million EPS up 11.5% to 153.8 cps FY16 dividend up 10 cps to 100 cps 3 15 AUGUST 2016
Slide 4: Trading performance - Profit and Loss Statement
2. FY16 Results For personal use only Trading performance - Profit and Loss Statement AUST NZ (NZD) CONSOLIDATED $m FY15 FY16 Growth FY15 FY16 Growth FY15 FY16 Growth Sales 3,456.0 3,739.4 8.2% 211.1 234.6 11.2% 3,652.1 3,954.5 +8.3% Gross Profit 762.6 825.8 8.3% 38.3 43.2 12.7% 798.3 865.4 +8.4%
Slide 5: Trading performance - Sales
2. FY16 Results For personal use only Trading performance - Sales Sales Growth 1HY16 2HY16 FY16 Total consolidated sales grew by 8.3% to $3.95b, with comparable Total Comps. Total Comps. Total Comps. sales up 5.4% Australia 7.5% 5.2% 9.1% 5.8% 8.2% 5.5% Sales momentum was solid throughout the ye
Slide 6: Trading performance - Gross Margin
2. FY16 Results For personal use only Trading performance - Gross Margin Consolidated gross profit increased by 8.4% to $865.4m GROSS PROFIT GROSS MARGIN Consolidated gross margin was 21.9%, a 3 bps increase FY15 FY16 Growth FY15 FY16 Growth on the pcp Australia $762.6m $825.8m 8.3% 22.07% 22.08
Slide 7: Trading performance - Cost of Doing Business (CODB)
2. FY16 Results For personal use only Trading performance - Cost of Doing Business (CODB) CODB Consolidated CODB was 15.2%, down 1 bps on the pcp FY15 FY16 Australia 15.20% 15.18% Total operating costs remained well controlled and were in line with New Zealand 16.21% 16.33% Company expectations,
Slide 8: Trading performance - Earnings
2. FY16 Results For personal use only Trading performance - Earnings EBIT MARGIN Consolidated EBIT was up 10.1% to $221.2m, driven by Australia with growth of 10.4% FY15 FY16 over the pcp Australia 5.77% 5.89% New Zealand 0.74% 0.42% Consolidated EBIT margin was up 9 bps on the pcp at 5.6%, with
Slide 9: Balance Sheet and Inventory Bridge – FY15 to FY16
2. FY16 Results For personal use only Balance Sheet Inventory Bridge – FY15 to FY16 $9.4m AUDm FY15 FY16 ($17.8m) Cash 49.1 51.9 $54.5m Receivables 81.5 98.1 Inventories 478.9 546.4 Other 7.4 6.1 Total Current Assets 616.9 702.5 $27.3m $46.1m ($5.8m) $546.4m Fixed Assets 176.2 183.6 Intangibles & Go
Slide 10: Cash Flow Statement and Performance Indicators
2. FY16 Results For personal use only Cash Flow Statement Performance Indicators AUDm FY15 FY16 Performance Indicators: FY15 FY16 EBITDA 240.0 262.1 Inventory Turnover 6.09x 6.03x Change in Working Capital 1 (4.6) (15.9) Creditor Days 40.2d 42.0d Net Interest Paid (5.1) (3.1) Income Tax Paid (59.9)
Slide 11: Capital Management: FY16 dividend up 10 cps
2. FY16 Results For personal use only Capital Management FY16 dividend up 10 cps JB HI-FI regularly reviews its capital structure with a focus on maximising returns to shareholders The Board believes the current dividend payout ratio of 65% appropriately balances the distribution of profit to sh
Slide 12: Our objectives
3. Business Update For personal use only Our objectives Create an engaging and entertaining shopping experience Delight customers with authentic, honest and knowledgeable service Provide a wide range of the best products at great prices Maintain our strong and unique culture Recognise and
Slide 13: The JB HI-FI Model
3. Business Update For personal use only The JB HI-FI Model JB HI-FI has the ability to bring brands to life and create engagement in categories Reputation for taking the deal and price leadership Technology leader – 1st to market Convenient and high foot traffic locations High level of cu
Slide 14: The JB HI-FI Model
3. Business Update For personal use only The JB HI-FI Model Constant evolution of the model, including the categories and products ranged, maintains our sales productivity and drives new and replacement sales IN CAR IN AUDIO AUDIO VISUAL VISUAL AUDIO VISUAL VISUAL IN CAR VISUAL MOVIES MOVIES MOVIE
Slide 15: Store portfolio
3. Business Update For personal use only Store portfolio New stores Nine new stores were opened in FY16 (five JB HI-FI HOME stores, three JB HI-FI stores and a multi location store inside Sydney International Airport) and two stores were closed Seven new stores are expected to open in FY17 (six
Slide 16: Home appliances
3. Business Update For personal use only Home appliances The home appliances market in Australia is circa $4.6 billion, larger than many of the other categories JB HI-FI operates in, and presents a significant opportunity for the Company JB HI-FI HOME Our HOME stores require ~400 sqm of addition
Slide 17: Sydney International Airport
3. Business Update For personal use only Sydney International Airport JB HI-FI has signed a 6.5 year cooperation agreement with Heinemann Tax & Duty Free to be the exclusive technology partner at Sydney International Airport We commenced trading on 1 April 2016 and results to date are in line wi
Slide 18: JB HI-FI Solutions
3. Business Update For personal use only JB HI-FI Solutions We recorded double digit sales and earnings growth in FY16 The business comprises: Corporate, Government and Education Sales - Account Managers and sales support teams based in offices in Melbourne, Sydney, Brisbane and Perth - We des
Slide 19: Online
3. Business Update For personal use only Online We continue to leverage the benefits of a strong online presence combined with our bricks and mortar locations Online sales for FY16 grew 35.8% on the pcp to $119.1m or 3.0% of total sales (FY15: 2.4%) Unique visitors to JB HI-FI’s websites durin
Slide 20: Supply chain
3. Business Update For personal use only Supply chain We have developed a low cost, fit-for-purpose supply chain and logistics solution, with facilities operating in Melbourne, Sydney, Brisbane, Perth, Newcastle and Auckland. We are currently investigating an additional facility in Adelaide In o
Slide 21: People and culture
3. Business Update For personal use only People and culture Realigned executive team responsibilities In May 2016 James Saretta joined the executive team as Strategy and Digital Director. His role includes strategic responsibility for Online Cameron Trainor has taken on responsibility for Market
Slide 22: The Good Guys sale process
3. Business Update For personal use only The Good Guys sale process As noted in our ASX release on 11 August 2016, JB HI-FI continues to participate in The Good Guys sale process JB HI-FI has made no decision and nor has it entered into any agreement with respect to an acquisition of The Good Gu
Slide 23: Trading Outlook
4. Trading Outlook For personal use only Trading Outlook July 2016 sales update: Consolidated total sales growth was +13.4% (July 2015: +7.6%); and Consolidated comparable sales growth was +9.5% (July 2015: +5.7%) The sales result in July 2016 was a very pleasing start to FY17. Visual sales we
Slide 24: Appendix I: Store movements and geographic breakdown
Appendix I For personal use only a) Store movements during FY16 b) Geographic breakdown2 FY16 FY15 Opened Converted Closed Total Australia JB HI-FI 133 3 (12) - 124 JB HI-FI HOME 40 5 12 (2) 55 173 8 - (2) 179 New Zealand 2 JB HI-FI 11 1 (1) - 11 JB HI-FI HOME 3 - 1 - 4 35 14 1 - - 15 TOTAL 187 9 -
Slide 25: Appendix II: EBIT and CODB reconciliations
Appendix II For personal use only a) EBIT reconciliation b) NZ Profit and Loss statement (AUD) AUDm FY15 FY16 AUDm FY15 FY16 Profit for the full-year (App 4E) 136.5 152.2 Sales 196.1 215.1 add back Gross Profit 35.6 39.6 - income tax expense (App 4E) 59.0 65.7 Gross Margin 18.16% 18.42% Profit befor
Slide 26: Appendix III: Profit and Loss
Appendix III For personal use only a) Profit and Loss AUDm FY12 FY13 FY14 FY15 FY16 Sales 3,127.8 3,308.4 3,483.8 3,652.1 3,954.5 Gross Profit 659.8 712.2 756.0 798.3 865.4 Gross Margin 21.10% 21.53% 21.70% 21.86% 21.88% EBITDA 192.2 211.0 226.7 240.0 262.1 Depreciation & Amortisation 30.8 33.2 35.5
Slide 27: Appendix III: Balance Sheet
Appendix III… For personal use only b) Balance Sheet AUDm FY12 FY13 FY14 FY15 FY16 Cash 39.7 67.4 43.4 49.1 51.9 Receivables 58.4 64.2 70.7 81.5 98.1 Inventories 428.3 426.0 458.6 478.9 546.4 Other 7.7 6.0 5.3 7.4 6.1 Total Current Assets 534.1 563.7 578.1 616.9 702.5 Fixed Assets 182.0 181.1 181.6
Slide 28: Appendix III: Cash Flow
Appendix III… For personal use only c) Cash Flow AUDm FY12 FY13 FY14 FY15 FY16 EBITDA 192.2 211.0 226.7 240.0 262.1 Change in Working Capital 80.3 (8.2) (122.0) (4.6) (15.9) Net Interest Paid (12.2) (8.4) (7.1) (5.1) (3.1) Income Tax Paid (49.3) (39.6) (60.6) (59.9) (66.2) Other 3.9 1.7 4.4 9.5 8.3