Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — FY2013 Earnings Presentation
26 slides from Jb Hi-fi's earnings presentation, Aug 12, 2013
Slide 1: JB Hi-Fi Limited Full Year Results Presentation
For personal use only JB Hi-Fi Limited Fullll Year F Y Results R lt PPresentation t ti 30 June 2013 12 A Augustt 2013
Slide 2: Agenda
AG E N DA For personal use only 1. Performance 2. Profit and Loss Statement 3. Trading Performance 4. FY13 Store Update 5. Online 6. Digital 7. Commercial 8 8. HOME 9. Cash Flow and Balance Sheet 10. Dividends 11. Key Competitive Advantages 12. Growth Opportunities 13. FY14 Store Update 14. Trading
Slide 3: Performance – FY13 Highlights
1. P E R F O R M A NC E – F Y 13 HI G HL I G HTS For personal use only Total sales up 5 5.8% 8% 2nd half total sales up 10.3% 2nd half comparable sales up 3 3.2% 2% Gross margin up 43 bps NPAT up 11.2% 11 2% EPS up 11.1% Total dividend up 10.8% to 72 cps 3
Slide 4: Performance – Summary
1. P E R F O R M A NC E - S UM M A RY For personal use only FY12 FY13 Mvt Total Sales $3.13b $3.31b +5.8% Gross Margin 21.1% 21.5% +43 bps Cost of Doing Business 14.9% 15.1% +18 bps EBIT $161.5m $177.8m +10.1% EBIT Margin 5 2% 5.2% 5 4% 5.4% +21 bps 1 NPAT $104.6m $116.4m +11.2%
Slide 5: Profit and Loss Statement
2 . P R OF I T A N D L OS S S TAT E ME N T For personal use only AUST NZ (NZD) 1 CONSOLIDATED $m FY12 FY13 Growth FY12 FY13 Growth FY12 FY13 Growth Sales 2,954.6 3,140.8 6.3% 222.2 209.4 -5.7% 3,127.8 3,308.4 5.8% Gross Profit 629.3 682.5 % 8.5% 39.2 37.1 % -5.5% 659.8 712.2 % 7.9% Gross Margin 21.3
Slide 6: Trading Performance – Sales
3. T R A DI NG P E R F O R M A NC E For personal use only Sales Sales Growth Australia: 1HY13 2HY13 FY13 1 Sales grew by 6.3% to $3.14b. Total Comps.1 Total Comps.1 Total Comps. Australia 2.8% (3.4%) 10.9% 3.5% 6.3% (0.5%) We saw positive momentum in the 2nd half with comparable1 New Zealand (NZ
Slide 7: Trading Performance – Sales (cont.) New Zealand
3. T R A DI NG P E R F O R M A NC E . . . For personal use only Sales (cont.) N New Z Zealand: l d Sales Growth 1HY13 2HY13 FY13 Sales declined by 5.7% to NZ$209.4m. Total Comps. Total Comps. Total Comps. Australia 2.8% (3.4%) 10.9% 3.5% 6.3% (0.5%) Comparable sales were negative 5.5%. New Zeala
Slide 8: Trading Performance – Gross Margin
3. T R A DI NG P E R F O R M A NC E . . . For personal use only Gross Margin Consolidated gross margin was 21.5%, a 43 bps increase on Gross Margin the pcp. FY12 FY13 In Australia, the gross margin in FY13 increased by 43 bps to Australia 21.3% 21.7% New Zealand 17.7% 17.7% 21.7%. Total 21 1% 21
Slide 9: Trading Performance – Cost of Doing Business
3. T R A DI NG P E R F O R M A NC E . . . For personal use only Cost of Doing Business (CODB) Consolidated CODB was 15.1%, up 18 bps over the pcp. CODB In Australia, CODB increased by 17 bps to 15.1% as a result FY12 FY13 Australia 14.9% 15.1% of both the +2.9% Fair Work Australia award increase
Slide 10: Trading Performance – Earnings
3. T R A DI NG P E R F O R M A NC E . . . For personal use only Earnings In Australia, EBIT was up 10.9% to $175.9m driven in part by EBIT MARGIN improved gross margins over the pcp. FY12 FY13 In New Zealand, EBIT was down 35.8% to NZ$2.3m driven by Australia 5.4% 5.6% New Zealand 1.6% 1.1% a we
Slide 11: FY13 Store Update
4 . F Y 13 S T O R E U P DAT E For personal use only 13 JB Hi-Fi stores opened in FY13 13 JB Hi-Fi stores opened in FY13: NSW: Port Macquarie, Coffs Harbour, Tamworth, Broadway, Chatswood Chase, North Sydney VIC: Fountain Gate, The Glen, Barkly Square QLD: Bundaberg Oxley Bundaberg, ACT: T
Slide 12: Online
5. o n l I n e For personal use only Goal is a “Seamless customer experience” We continue to leverage the benefits of a strong online presence combined with our bricks and mortar locations In FY13,, online sales grew g 29.8% on the pcp p p to $65.9m or 2.0% of sales (FY12: 1.6%). Unique visita
Slide 13: Digital – Digital Content Delivery Platform
6 . DI GI TA L For personal use only – Digital Content Delivery Platform! Entertainment anywhere, anytime. Device agnostic service. We need to stay relevant and follow consumers’ present and future content consumption behaviour. Allows us to stay engaged with our customers after the physical
Slide 14: Commercial – Significant growth opportunity
7. COM ME R C IA L For personal use only Commercial – Significant growth opportunity! JB Hi-Fi has continued to see strong growth in Commercial; while off a relatively small base, revenue has grown 68.7% in FY13. We have doubled our sales staff in Australia and NZ in the last 12 months. Th Com
Slide 15: HOME – Leveraging the power of the brand
8 . H OME For personal use only HOME – Leveraging the power of the brand! Home appliance categories is a circa $4.6 billion market opportunity. opportunity Trial store setup has demonstrated we can integrate appliance categories within our existing model and maintain the unique JB Hi-Fi brand pe
Slide 16: Cash Flow and Balance Sheet
9. C A S H F L O W A N D B A L A NC E S H E ET For personal use only Cash Flow Statement Working Capital AUDm FY12 FY13 EBITDA 192.2 211.0 AUDm FY12 FY13 Change in Working Capital 80.3 (8.2) (Increase)/decrease in current assets Net Interest Paid (12.2) (8.4) Inventory (21.0) 4.5 Income Tax Paid (49
Slide 17: Working Capital & Performance Indicators
9. C A S H F L O W A N D B A L A NC E S H E ET. . . For personal use only Working Capital & Performance Indicators Working capital performance was solid with increased inventory turnover, decreased inventory levels and increased creditor days. Inventory Inventory management: 500 - inventory leve
Slide 18: Balance Sheet
9. C A S H F L O W A N D B A L A NC E S H E ET. . . For personal use only Balance Sheet AUDm FY12 FY13 Cash 39.7 67.4 Receivables 58.4 64.2 Inventories 428.3 426.0 Other 7.7 6.0 Total Current Assets 534.1 563.7 Fixed Assets 182.0 181.1 Intangibles & Goodwill 78.8 83.7 Other 16 2 16.2 14 8 14.8 Total
Slide 19: Dividends
1 0. DI V I D E N DS For personal use only Dividends The final dividend is 22.0 cents per share fully franked. This brings total dividends for FY13 to 72.0 cps, up 10.8% or 7.0 cps from the pcp. Maintenance of our current circa 60% payout ratio enables the Company to continue to grow through its
Slide 20: Key Competitive Advantages
1 1. K E Y COMP ET I T I V E A D VA N TAG E S For personal use only Key Competitive Advantages Value / low price focus, we have always been a discount retailer supported by our low cost Market Position – model. Very distinctive and engaging brand personality that is unlike most other local or over
Slide 21: Growth Opportunities
1 2 . G R O W T H OP P O RT UN I T I E S For personal use only Growth Opportunities – Solid pipeline of properties (12 new JB Hi-Fi stores expected to open in FY14). New stores – Will continue our disciplined approach to selecting new stores based on high foot traffic locations. – Target of 214 JB
Slide 22: FY14 Store Update
13. F Y 1 4 S T O R E U P DAT E For personal use only 12 new JB Hi-Fi stores to be opened in FY14 NSW: 3 VIC: 3 QLD: 1 WA: 1 TAS: 1 FY14F ~189 AUST: 2 177 14 NZ: 1 168 NZ 13 157 AUST 1 of the FY14 stores is classified as Tier 2. 13 141 13 4 stores are expected to open in the first
Slide 23: Trading Outlook
1 4 . T R A DI NG O U T L O O K For personal use only Trading Outlook FY14 July sales update: - total consolidated sales growth in July 2013 was 8.0%; and - consolidated comparable1 sales growth in July 2013 was 2.2%. • Sales in July 2013 were pleasing given we were cycling the Olympics in July 20
Slide 24: Investment Checklist
1 5. I N V E S TME N T C H E C K L IS T For personal use only Unique and relevant brand. Low cost of doing business. Flexible business model – history of category growth and development. Diversity of product categories. New store, online and digital opportunities. Experienced management
Slide 25: Appendix I – Store movements and geographic breakdown
Ap p e n dix I For personal use only Store movements during FY13 Geographic breakdown# FY13 FY12 Opened Rebrand Closed Total Australia JB HI-FI - Tier 1 135 8 (8) - 135 JB HI-FI - Tier 2 18 5 - (3) 20 JB HI HI-FI FI HOME - - 8 - 8 153 13 - (3) 163 Clive Anthonys 2 - - (1) 1 155 13 - (4) 164 2 New Ze
Slide 26: Appendix II – EBIT and CODB reconciliations
Ap p e n dix I I For personal use only a) EBIT reconciliation b) NZ Profit and Loss statement (AUD) AUDm FY12 FY13 AUDm FY12 FY13 Profit for the year (App 4E) 104.6 116.6 Sales 173.2 167.6 add back Gross Profit 30.6 29.7 - income tax expense (App 4E) 43.7 51.4 Gross Margin 17.7% 17.7% P fit before P