Currys PLC · LSE:CURY
Currys — H1 2022/23 Earnings Presentation
42 slides from Currys's earnings presentation, Dec 15, 2022
Slide 1: Currys plc 2022/23 Interim Results
Slide 2: We help everyone enjoy amazing technology
We help everyone enjoy ~ amazing technology. \ @iw
Slide 3: Financial Results – Bruce Marsh
Slide 4: UK&I strengthening but International challenging
Financial performance Uk&l strengthening but International challenging > Revenue Adjusted PBT Free cash flow £4,473m £(17)m £(86)m (8)% LFL vs. 21/22 £(62)m vs. 21/22° £(271)m vs. 21/22" +7% LFL vs. 19/20 £(19)m vs. 19/20 £(163)m vs. 19/20 Total indebtedness Adjusted EPS Shareholder return £(1,617)m
Slide 5: UK&I profits strengthening but International challenging
Financial performance Uk&l Profits strengthening but International challenging Currency dyed F A Currency 7 Revenue neutral % Ue eh ie tke oe Adjusted EBIT neutral % nee Ebi change ° ° change argin Uk & Ireland £2,292m (10)% (10)% +2% £25m +25% 11% International £2,181m (2)% (6)% +12% £4m (94)% 0.2%
Slide 6: UK & Ireland - performance summary
Financial performance Uk & Ireland - performance summary 1H 22/23 1H 21/22" 1H 19/20 YoY Yo. Revenue £2,292m £2,546m £2,835m (10)% LFL +2% LFL Online share of business 43% 43% 26% - +17 ppts Adjusted EBIT £25m £20m £13)m +25% +£38m Adjusted EBIT margin 11% 0.8% (0.5)% +30bps +160bps Operating cash f
Slide 7: UK & Ireland - adjusted EBIT margin bridge
Financial performance Uk & Ireland - adjusted EBIT margin bridge Gross margin +160bps * Higher adoption rate of credit and other services — especially online +16Obps (130)bps * Monetising improved customer experience — delivery charging + Better data and analytics * Cost savings in supply chain and
Slide 8: UK & Ireland - cost inflation and headwinds
Financial performance UR & Ireland — cost inflation and headwinds Increased colleague hourly wages by . Operating Gross margin expense over 5 years Wages £(3)m £(4)m £(7)m Experienced inflation in Energy £(D)m £(10)m £(11)m energy prices Other £(3)m £(1)m £(4)m Business rates tax - £(14)m £(14)m Tot
Slide 9: UK & Ireland - cost saving programme well on track
Financial performance Uk & Ireland - cost saving programme well on track Transformed our in-store-labour model Gross margin ie Supply chain £1im - £11m Stores - £18m £18m GNFR <éim <éim etm Developing milrsklled colleagues IT & Central - £14m £14m Wolewapenmeredhaith Total cost savings £1im £35m £44
Slide 10: Goodwill impairment of £611m
Financial performance Goodwill impairment of £¢611D)m * Non-cash * Exceptional * Goodwill relates to 2014 Dixons and Carphone Warehouse merger * Predominantly driven by discount rates, now 13.0% from 10.6% « Sharp increase in UK government yields increased the impairment Risk free rate moved to 4.4%
Slide 11: Elkjøp - performance summary
Financial performance Elkjap - performance summary Currency 1H 22/23 1H 21/22 1H 19/20 neutral YoY Revenue £1,886m £1,959m £1,677m (3)% (N%LFL = HO%LFL Online share of business 23% 24% 17% n/a (1) ppts +6 ppts Adjusted EBIT £3m £57m £52m (95)% (95)% (94)% Adjusted EBIT margin 0.2% 2.9% 3.1% (270)bps
Slide 12: Nordics adjusted EBIT margin bridge
Financial performance Nordics adjusted EBIT margin bridge Gross margin down (200)bps 2.9% (200) bps * COGS inflation not fully passed to consumer + Weak demand * Excess of stock in market * Aggressive discounting from competitors ro)bps Operating expense to sales (70)bps * Costs up slightly _ * Incr
Slide 13: Kotsovolos - performance summary
Financial performance Kotsovolos - performance summary Currency 1H 22/23 1H 21/22 1H 19/20 neutral YoY Revenue £295m £28O0m £227m +5% +4%LFL +25% LFL Online share of business 7% 8% 5% n/a (1) ppts +2 ppts Adjusted EBIT £1m £11m £9m (91)% (91)% (89)% Adjusted EBIT margin 0.3% 3.9% 4.0% (350)bps + (36
Slide 14: Greece adjusted EBIT margin bridge
Financial performance Greece adjusted EBIT margin bridge Gross margin (210)bps * COGS inflation not fully passed to consumer 5.9% (210)bps * High discounting from competitors * Promotions on delivery & installation * Adverse product mix kde Operating expense to sales (150)bps * Costs up slightly + L
Slide 15: Cash generation impacted by lower profits
Financial performance Cash generation impacted by lower profits 1H 22/23 1H 21/22° 1H 19/20 Operating cash flow £60m £131m £76m Lower profit in International business Capex £(66)m £(61)m £(98)m In line with Last year, majority of investment in IT Adjusting items £(25)m £16m £(21)m Costs of restructu
Slide 16: Uses of free cash flow
Financial performance Uses of free cash flow 1H 22/25 = 1H.21/22 Change Free cash flow £(86)m £185m £(271)m Shareholder returns £(24)m £(34)m £(10)m _ Final dividend of 2.15p per share paid in September Pension £(39)m £(39)m - Pension contribution flat with prior year Share repurchase and other item
Slide 17: Strong liquidity position
Financial performance Strong liquidity position £140m £671m £(105)m Net debt RCF to Oct 2026 RCF to Oct 2023 Total liquidity Bank covenants ° Fixed charge cover >1.75x (1H 2022/23: 1.982) ° Net debt leverage <2.5x (1H 2022/23: 0.442) 7
Slide 18: Outlook & guidance
Financial performance Outlook & guidance Second half outlook Full year guidance * URS&I to deliver robust profitability in weak « Adjusted PBT to be between £100-125m market with profit stable YoY (vs £125-145m on like-for-like basis) + International profitability to improve * Capital expenditure of
Slide 19: Alex Baldock, Group Chief Executive
Alex Baldock Group Chief Executive @ -
Slide 20: Group Summary
Group Summary UR&l Strengthening results, in challenging circumstances International Facing significant market disruption, which we expect to be temporary, and actions underway to rebuild profitability Outlook Well set for long term success, despite challenging environment 20
Slide 21: UK&I: Strengthening profits from gross margin and cost efficiency
UK&I Strengthening UR profits from continuing gross margin improvements > and cost efficiency UK Market share Gross margin showing Adjusted EBIT declined continued improvements growing again UK Market Share UR&I Gross margin £130m UK&I Adjusted EBIT (120) £34m bps YoY £26m ZI fm £20m L I alll am £c1
Slide 22: UK&I: Gross margin showing continued improvements
UK&I Strengthening UR profits from continuing gross margin improvements > Gross margin showing continued improvements UR&I Gross margin ft = == zZEE > 3 Ss S PP WR DW an nN oo sO = S38 3 &s8§ 3 Ne nS 22
Slide 23: UK&I: Confident in sustaining UK gross margin improvement
UK&I We’re confident in sustaining our UK gross margin improvement Higher Services adoption Monetising the improved customer experience Credit adoption (%) Care & Repair adoption (%) Delivery CSAT 6 6 6 a 17.0 460 +350 56 12.4 ____ bps == bps +17pts _ | H121/22 H122/23 H121/22 H122/23 Nov-18 Nov-19
Slide 24: International: Significant but temporary market disruption
International Significant (but temporary) disruption in International markets Softening demand Nordic market size (3)% Yo +15% Yo3y = = = = = es ¢- BB@R 8 2 8 B Source: GFK Overstocked market Aggressive competitors Topchef: Power har for mange varer pa lager “Chief executive: Power has too much stoc
Slide 25: International: Invested margin to maintain market leadership
International We’ve had to invest substantial margin to maintain our market leadership Steady market share Gross margin Elkjap Market Share Elkjap Gross Margin (%) (%) H1 21/22 H122/23 H1 21/22 H122/23 Source: GFK 25
Slide 26: International: Resuming Nordics long-term growth trajectory
International We’re confident in resuming Nordics long term trajectory of growth in sales and profits Revenue ry TTI | 1/12 2/13 B/14 14/15 18/16 16/17 1/18 18/19 19/20 20/21 21/22 Adjusted EBIT << . os 1/12 2/13 13/14 14/15 15/16 16/17 7/18 18/19 19/20 20/21 21/22 Source: Currys internal informatio
Slide 27: Summary: A stronger business that can weather challenging environments
Summary A stronger business that can weather challenging environments Strategic priorities International Happier colleagues Winning More Robust Market leader & customers Omnichannel Model Customers for Life balance sheet Nordics customer Group liquidity club members UK&I Product sales 68m 7.1m | 5.4
Slide 28: Our Markets: Technology market still larger than pre-pandemic
Our Markets Technology market is still Larger than before the pandemic UK Electricals market vs. pre-pandemic Nordics Electricals market vs. pre-pandemic 35% 35% HI 22/23: HI 22/23: 50% 14% 50% +15% oss Yo3Y one Yo3Y 20% 20% 15% 18% 10% 10% 5% 5% 0% Fz 0% “5% -5% > nN > & & Ra a . < a & eh we Source
Slide 29: Capable and committed colleagues
Capable and committed colleagues More engaged colleagues mean more satisfied customers... Colleague Engagement Customer Satisfaction 19 UKS&I NPS. Nordics Happy or Not UK&I Retail only eSat 2021/22 2022/23 HI HI Nov 2020 Oct 2019/20 2022/23 2022 HI Ht Source: Currys internal information 29
Slide 30: Continued progress on retail fundamentals
Retail fundamentals Continued progress on retail fundamentals Larger range Invested in price Easier experience UR&I Range continuing to grow Clear price promise Improved delivery and “You won't get it cheaper. collection experience UR&I SKUs Full stop.” 5 y teuwortfindit cheaper Full stop. CSAT my”
Slide 31: Omnichannel
Omnichannel Omnichannel is the preferred model for customers and we’re building on our strengths Omnichannel is the preferred Investment in stores New online platforms model Tech customers use both channels Investing in colleagues, while Invested in new platforms which are increasing flexibility and
Slide 32: Customers for Life: Growing Services
Customers for Life Growing Services to help build customers for life We help you afford the amazing tech 17.0% UK&I Credit adoption, +46Obps YoY 11.0% Nordics Credit adoption, +250bps YoY Source: Currys internal information Installation adoption increased in all markets Now installing one quarter (2
Slide 33: Customers for Life: Credit is valuable and growing
Customers for Life Credit is valuable and growing Credit is an important driver of lifetime value Spend more on products and services Are more satisfied And likelier to return Source: Currys internal information x) | i ke Products Services Online In-store ™Non-credit ™ Credit We are growing Credit M
Slide 34: Customers for Life: Growing Credit by levelling up
Customers for Life We've grown Credit by “levelling up” across channels and better offers Levelling up across channels Yo3Y 16.3% Wiese 13.1% NT% 11.6% 9.0% Stores Online 2019/20 H1 2021/22 H1 «2022/23 H1 Source: Currys internal information Improved offers with stronger messaging Tech now, pay later
Slide 35: Customers for Life: Leaders in protecting and repairing products
Customers for Life We’re leaders in protecting and repairing products We have scale in number of customers... 14m # Total active protection plans ™Greece “Nordics = UK Source: Currys internal information and in capability... and increasingly satisfied customers 1,500 # of Engineers 1.7m # Repairs pe
Slide 36: Outlook & guidance
Financial performance Outlook & guidance Second half outlook * Uk&I to deliver robust profitability in weak market with profit stable YoY + International profitability to improve compared to first half * Group to generate cash in second half Full year guidance « Adjusted PBT to be between £100-125m
Slide 37: Outlook: Medium term targets
Outlook Medium term targets Steady growth EBIT margin Capital expenditure New cash exceptionals >3% <1.5% of sales Fminimal Annual sustainable free cash flow >£150m Growing shareholder returns Annual sustainable free cash flow is defined as operating cash flow less capital expenditure, exceptional c
Slide 38: Currys Summary
Currys Summary Challenging market backdrop UR&I profits strengthening as transformation benefits show International profits hit by (temporary) market disruption Record colleague engagement and customer satisfaction Making more of proven Omnichannel model Building more customers for life through Serv
Slide 39: Best deals
Best deals Getting ready for the final? Don’t miss these deals... Philips 65” OLED sve PEMBY SONY 55” OLED el £999 PHILIDS: BRAVIA ¥R i SONY sane r JER BLED Motion | WHAT HI-FI?) * With Ambilight to enhance your viewing experience! + Lowest ever price on Sony 55” OLED KARE * Pay nothing for 12 month
Slide 40: Best deals
Best deals And incredible offers on our energy efficient tech, mobile & Laptops Tefal Actifry Genius KL Air Fryer exclusively at Currys Save £100 PERFECTLY EVEN RESULTS Heat Pump Tumbles from just £349... save up to £300 a year on energy bills FX ce] Beko A Rated Washing machine With AquaTech Large
Slide 41: We help everyone enjoy amazing technology
We help everyone enjoy ~ amazing technology. \ @iw
Slide 42: Visit our corporate website
Visit our corporate website www.currysplc.com