Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — FY2017 Earnings Presentation
22 slides from Jb Hi-fi's earnings presentation, Aug 14, 2017
Slide 1: FY17 Results Presentation
For personal use only JB Hi-Fi Limited FY17 Results Presentation 15 14 AUGUST 2016 2017 PAGE 1
Slide 2: Agenda
Agenda For personal use only 1. Group Performance Overview 2. JB HI-FI 3. The Good Guys 4. Synergy Update 5. Group Balance Sheet and Cash Flow 6. Outlook 7. Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB HI-FI LIMITED PAGE 2
Slide 3: Financial highlights
1. Group Performance Overview For personal use only Financial highlights 1 AUD FY17 FY16 Growth Total sales ($m) 5,628.0 3,954.5 1,673.5 42.3% ▲ Underlying earnings before interest and tax ($m) 306.3 221.2 85.1 38.5% ▲ Underlying net profit after tax ($m) 207.7 152.2 55.5 36.5% ▲ 2 Underlying earnin
Slide 4: Divisional performance
1. Group Performance Overview For personal use only Divisional performance 1 Growth FY17 FY16 $m % Sales ($m) - JB HI-FI Australia 4,148.6 3,739.4 409.2 10.9% ▲ - JB HI-FI New Zealand (NZD) 234.0 234.6 (0.6) (0.3%) ▼ - The Good Guys 1,258.4 n/a 1,258.4 n/a Total Sales (AUDm) 5,628.0 3,954.5 1,673.5
Slide 5: JB HI-FI Australia performance summary
2. JB HI-FI For personal use only JB HI-FI Australia performance summary AUD FY17 1 FY16 Growth Sales Total sales grew by 10.9% to $4.15 billion, with Sales ($m) 4,148.6 3,739.4 10.9% ▲ comparable sales up 8.6% Gross Profit ($m) 922.8 825.8 11.7% ▲ Hardware and Services2 sales in FY17 were up 14
Slide 6: JB HI-FI Australia performance summary: Gross Profit and Margin
2. JB HI-FI For personal use only JB HI-FI Australia performance summary AUD FY17 1 FY16 Growth Gross Profit and Margin Gross profit increased by 11.7% to $922.8 million Sales ($m) 4,148.6 3,739.4 10.9% ▲ Gross margin was 22.2%, a 16 bps increase on the Gross Profit ($m) 922.8 825.8 11.7% ▲ pcp,
Slide 7: JB HI-FI Australia performance summary: CODB and EBIT
2. JB HI-FI For personal use only JB HI-FI Australia performance summary AUD FY17 1 FY16 Growth CODB CODB was 15.0%, down 21 bps on the pcp Sales ($m) 4,148.6 3,739.4 10.9% ▲ CODB in absolute terms grew 9.4% Gross Profit ($m) 922.8 825.8 11.7% ▲ Total operating costs were in line with expectat
Slide 8: JB HI-FI New Zealand performance summary
2. JB HI-FI For personal use only JB HI-FI New Zealand performance summary 1 NZD FY17 FY16 Growth Total sales were down 0.3% to NZD234.0 million, with comparable sales down 8.8% Sales ($m) 234.0 234.6 (0.3%) ▼ As highlighted in the pcp, FY16 sales were aided by Gross Profit ($m) 42.5 43.2 (1.7%)
Slide 9: The Good Guys performance summary
3. The Good Guys For personal use only The Good Guys performance summary AUD FY171 Sales For the period 28 November 2016 to 30 June 20171, total sales were up 0.2% to Sales ($m) 1,258.4 $1.26 billion, with comparable sales down 1.3% Gross Profit ($m) 267.6 Key growth categories were Cooking, Sea
Slide 10: The Good Guys performance summary: CODB, EBIT, stores
3. The Good Guys For personal use only The Good Guys performance summary AUD FY171 CODB For the period 28 November 2016 to 30 June 20171, total operating costs were in Sales ($m) 1,258.4 line with expectations and store wages remained well controlled Gross Profit ($m) 267.6 Similar to the JB HI-
Slide 11: Synergy Update
4. Synergy Update For personal use only Synergy Update We are pleased to confirm we expect to achieve the upper end of our synergy target of $15 million – $20 million. This target is now expected to be fully realised in FY19, one year earlier than originally anticipated, with approximately half of
Slide 12: Group Balance Sheet and Inventory Bridge
5. Group Balance Sheet and Cash Flow For personal use only Group Balance Sheet Inventory Bridge – FY16 to FY17 AUDm FY17 FY16 Cash 72.8 51.9 $267.4m Receivables 196.6 98.0 Inventories 859.9 546.4 $23.1m $23.0m Other 41.4 6.1 Total Current Assets 1,170.7 702.4 $859.9m Fixed Assets 208.2 183.6 Intangi
Slide 13: Group Cash Flow Statement and Performance Indicators
5. Group Balance Sheet and Cash Flow For personal use only Group Cash Flow Statement Group Performance Indicators AUDm FY17 FY16 FY17 FY16 Statutory EBITDA 337.9 262.1 Fixed Charge Ratio 3.2x 3.5x Change in Working Capital (52.7) (15.9) Interest Cover 28.8x 57.3x Net Interest Paid (7.6) (3.1) Gearin
Slide 14: Capital Management
5. Group Balance Sheet and Cash Flow For personal use only Capital Management FY17 dividend up 18.0% to 118 cps The Board regularly reviews its capital structure with a focus on maximising returns to shareholders and believes the current dividend payout ratio of 65% appropriately balances the dist
Slide 15: Outlook
6. Outlook For personal use only Outlook July 2017 sales update: Total sales growth for JB HI-FI was 8.8% (July 2016: 13.4%) with comparable sales growth of 5.8% (July 2016: 9.5%) Total sales growth for The Good Guys was 6.8% with comparable sales growth of 5.7% FY18 Guidance: In FY18 the Comp
Slide 16: Investment Checklist
7. Investment Checklist For personal use only Unique and relevant brands Flexible business model – history of category growth and development Diversity of product categories across brands Low cost of doing business New store and online opportunities Meaningful synergies to be realised fr
Slide 17: Appendix I: Underlying reconciliations
Appendix I For personal use only a) Group underlying EBIT reconciliation c) Group underlying CODB reconciliation AUDm AUDm FY17 FY17 FY16 Statutory EBIT 268.2 Other income (ex interest received) (0.3) (0.03) Adjustments Sales and marketing expenses (App 4E) 580.1 404.6 - Transaction Fees 14.1 Occupa
Slide 18: Appendix II: Group store reconciliation
Appendix II For personal use only 303 stores across Australia and New Zealand1 Group store reconciliation FY17 FY16 Acquired Opened Closed Total Australia JB HI-FI 124 - 2 - 126 JB HI-FI HOME 55 - 4 - 59 179 - 6 - 185 1 New Zealand 2 JB HI-FI 11 - 1 - 12 JB HI-FI HOME 4 - - - 4 21 15 - 1 - 16 14 37
Slide 19: Appendix III: Group Profit and Loss
Appendix III For personal use only a) Group Profit and Loss AUDm 1 FY17 FY16 FY15 FY14 FY13 Sales 5,628.0 3,954.5 3,652.1 3,483.8 3,308.4 Gross Profit 1,230.5 865.4 798.3 756.0 712.2 Gross Margin 21.86% 21.88% 21.86% 21.70% 21.53% EBITDA 360.3 262.1 240.0 226.7 211.0 Depreciation & Amortisation 53.9
Slide 20: Appendix III: Group Profit and Loss - Breakdown
Appendix III For personal use only b) Group Profit and Loss - Breakdown 1 FY17 FY16 JB HI-FI JB HI-FI JB HI-FI JB HI-FI Growth TGG Group Group AUDm AUST NZ (NZD) AUST NZ (NZD) Sales 4,148.6 234.0 1,258.4 5,628.0 3,739.4 234.6 3,954.5 42.3% ▲ Gross Profit 922.8 42.5 267.6 1,230.5 825.8 43.2 865.4 42.
Slide 21: Appendix III: Group Balance Sheet
Appendix III For personal use only c) Group Balance Sheet AUDm FY17 FY16 FY15 FY14 FY13 Cash 72.8 51.9 49.1 43.4 67.4 Receivables 196.6 98.0 81.5 70.7 64.2 Inventories 859.9 546.4 478.9 458.6 426.0 Other 41.4 6.1 7.4 5.3 6.0 Total Current Assets 1,170.7 702.4 616.9 578.1 563.7 Fixed Assets 208.2 183
Slide 22: Appendix III: Group Cash Flow
Appendix III For personal use only d) Group Cash Flow AUDm FY17 FY16 FY15 FY14 FY13 Statutory EBITDA 337.9 262.1 240.0 226.7 211.0 Change in Working Capital (52.7) (15.9) (4.6) (122.0) (8.2) Net Interest Paid (7.6) (3.1) (5.1) (7.1) (8.4) Income Tax Paid (98.5) (66.2) (59.9) (60.6) (39.6) Other 11.4