Slide 1: JB Hi-Fi Limited FY18 Results Presentation
JB Hi-Fi Limited FY18 Results Presentation 15 13 AUGUST 2016 2018 PAGE 1
Slide 2: Agenda
Agenda 1. FY18 Financial Results i. Group Performance Overview ii. JB HI-FI Australia iii. JB HI-FI New Zealand iv. The Good Guys v. Group Balance Sheet and Cash Flow 2. FY19 Trading Update and Outlook 3. Group Strategic Update 4. Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB
Slide 3: Group Performance Overview
1. FY18 Financial Results i. Group Performance Overview 1,2 AUD FY18 FY17 Growth Total sales ($m) 6,854.3 5,628.0 1,226.4 21.8% ▲ Earnings before interest and tax ($m) 350.6 306.3 44.3 14.5% ▲ Net profit after tax ($m) 233.2 207.7 25.4 12.3% ▲ Earnings per share (basic ¢) 203.1 186.0 +17 cps 9.2% ▲
Slide 4: Group Performance Overview by segment
1. FY18 Financial Results i. Group Performance Overview 1,2 Growth FY18 FY17 $m % Sales ($m) - JB HI-FI Australia 4,539.7 4,148.6 391.1 9.4% ▲ - JB HI-FI New Zealand (NZD) 231.5 234.0 (2.5) (1.1%) ▼ - The Good Guys 2,101.3 1,258.4 842.9 67.0% ▲ Total Sales (AUDm) 6,854.3 5,628.0 1,226.4 21.8% ▲ EBIT
Slide 5: JB HI-FI Australia Sales
1. FY18 Financial Results ii. JB HI-FI Australia 1 Sales AUD FY18 FY17 Growth ▪ Total sales grew by 9.4% to $4.54 billion, with Sales ($m) 4,539.7 4,148.6 9.4% ▲ comparable sales up 6.2% ▪ Hardware and Services2 sales in FY18 were up 11.9%, Gross Profit ($m) 1,006.5 922.8 9.1% ▲ with comparable sale
Slide 6: JB HI-FI Australia Gross Profit and Margin
1. FY18 Financial Results ii. JB HI-FI Australia 1 Gross Profit and Margin AUD FY18 FY17 Growth ▪ Gross profit increased by 9.1% to $1.0 billion Sales ($m) 4,539.7 4,148.6 9.4% ▲ ▪ Gross margin was 22.2%, a 7 bps decrease on the pcp, primarily driven by: Gross Profit ($m) 1,006.5 922.8 9.1% ▲ ▪ sale
Slide 7: JB HI-FI Australia CODB
1. FY18 Financial Results ii. JB HI-FI Australia 1 CODB AUD FY18 FY17 Growth ▪ Our low CODB remains a competitive advantage and Sales ($m) 4,539.7 4,148.6 9.4% ▲ is maintained through continued focus on productivity and minimising unnecessary expenditure Gross Profit ($m) 1,006.5 922.8 9.1% ▲ ▪ CODB
Slide 8: JB HI-FI New Zealand
1. FY18 Financial Results iii. JB HI-FI New Zealand 1 ▪ Total sales were down 1.1% to NZD231.5 million NZD FY18 FY17 Growth ▪ Comparable sales were up 2.4% Sales ($m) 231.5 234.0 (1.1%) ▼ ▪ Online sales in New Zealand for FY18 grew 96.3% on Gross Profit ($m) 40.9 42.5 (3.8%) ▼ the pcp to NZD9.6 mill
Slide 9: The Good Guys
1. FY18 Financial Results iv. The Good Guys 1 ▪ All performance indicators and ratios for FY17 are AUD FY18 FY17 Growth 1 for the period of ownership Sales ($m) 2,101.3 1,258.4 67.0% ▲ Sales Gross Profit ($m) 426.1 267.6 59.2% ▲ ▪ Total sales for the twelve months to 30 June 2018 were $2.10 billion
Slide 10: The Good Guys
1. FY18 Financial Results iv. The Good Guys ▪ All performance indicators and ratios for FY17 are AUD FY18 FY171 Growth for the period of ownership1 Sales ($m) 2,101.3 1,258.4 67.0% ▲ Gross Profit and Margin Gross Profit ($m) 426.1 267.6 59.2% ▲ ▪ Gross profit was $426.1 million with gross margin at
Slide 11: Group Balance Sheet and Inventory Bridge
1. FY18 Financial Results v. Group Balance Sheet and Cash Flow Group Balance Sheet Inventory Bridge – FY17 to FY18 AUDm FY18 FY171 $6.7m Cash 72.0 72.8 $27.8m Receivables 204.7 193.6 Inventories 891.1 859.7 ($3.1m) Other 42.7 41.4 Total Current Assets 1,210.5 1,167.5 $891.1m Fixed Assets 198.0 208.2
Slide 12: Group Cash Flow Statement and Performance Indicators
1. FY18 Financial Results v. Group Balance Sheet and Cash Flow Group Cash Flow Statement Group Performance Indicators AUDm FY18 FY17 FY18 FY17 Statutory EBITDA 411.7 337.9 Fixed Charge Ratio 2.9x 3.2x Change in Working Capital (6.6) (52.7) Interest Cover 21.1x 28.8x Net Interest Paid (14.5) (7.6) Ge
Slide 13: Capital Management
1. FY18 Financial Results v. Group Balance Sheet and Cash Flow Capital Management FY18 dividend up 11.9% to 132 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
Slide 14: FY19 Trading Update and Outlook
2. FY19 Trading Update and Outlook July 2018 sales update: ▪ Total sales growth for JB HI-FI Australia was 2.9% (July 2017: 9.3%) with comparable sales growth of 0.3% (July 2017: 6.5%) ▪ Total sales growth for JB HI-FI New Zealand was -2.1% (July 2017: -0.7%) with comparable sales growth of 3.4% (Ju
Slide 15: The Group Model
3. Group Strategic Update i. The Group Model A dual branded retail combination Leading retailer of technology and Leading retailer of home appliances Product offering consumer electronics and consumer electronics Target customer base / Strong position with a young tech Strong position with home-maki
Slide 16: The Group Model - key enablers
3. Group Strategic Update i. The Group Model - 5 key enablers Low Cost 1 Scale 2 Operating Model 3 Quality Store Locations 4 Supplier Partnerships 5 Multichannel Capability • #1 player in fragmented Lowest CODB of any major JB Hi-Fi • Strong partnerships with all • Integrated, high quality in- Austr
Slide 17: JB HI-FI Group - Key Focus Areas
3. Group Strategic Update ii. JB HI-FI Group – Key Focus Areas Last 12 Months (FY18) Next 12 Months (FY19) • Group operating model developed Establish a Group Merchandise function led by Cameron Trainor as Managing Director Group • Shared capability across the Group Establish Merchandise, to: Group
Slide 18: JB HI-FI - Key Focus Areas
3. Group Strategic Update ii. JB HI-FI – Key Focus Areas Last 12 Months (FY18) Next 12 Months (FY19) • Category evolution: Continued focus on driving sales - instore, online Sales and commercial • Drones Category • Home security Gaming, Telco and Connected Tech evolution • Telco eSports Melbourne eS
Slide 19: The Good Guys - Key Focus Areas
3. Group Strategic Update ii. The Good Guys – Key Focus Areas Last 12 Months (FY18) Next 12 Months (FY19) • New Executive team in place Continued focus on driving sales - instore, online Sales and commercial • Increased customer transactions (comp and total) • Improved in-store conversion Category T
Slide 20: Investment Checklist
4. Investment Checklist Unique and relevant brands Flexible business model – history of category growth and development Diversity of product categories across brands Scale operator, market leader Global best in class metrics including low cost of doing business and high sales per square metr
Slide 21: Group Profit and Loss - Breakdown
Appendix I Group Profit and Loss - Breakdown 1 FY18 FY17 JB HI-FI JB HI-FI JB HI-FI JB HI-FI Growth TGG Group TGG Group AUDm AUST NZ (NZD) AUST NZ (NZD) Sales 4,539.7 231.5 2,101.3 6,854.3 4,148.6 234.0 1,258.4 5,628.0 21.8% ▲ Gross Profit 1,006.5 40.9 426.1 1,470.3 922.8 42.5 267.6 1,230.5 19.5% ▲
Slide 22: FY17 Underlying Reconciliations
Appendix II a) Group FY17 underlying EBIT reconciliation c) Group FY17 underlying EPS reconciliation AUDm FY17 FY17 Statutory EBIT 268.2 Underlying NPAT (AUDm) 207.7 Adjustments Weighted average number of ordinary shares (m) 111.7 - Transaction Fees 14.1 - Implementation Costs 8.3 Underlying EPS 186
Slide 23: Group CODB Reconciliation
Appendix II d) Group CODB reconciliation AUDm 1 FY18 FY17 Other income (ex interest received) (0.6) (0.3) Sales and marketing expenses (App 4E) 695.1 580.1 Occupancy expenses (App 4E) 305.7 248.6 less depreciation, amortisation & impairment (56.0) (50.0) Administration expenses (App 4E) 42.2 36.2 le
Slide 24: Group Store Reconciliation
Appendix III 311 stores across Australia and New Zealand1 Group store reconciliation1 FY18 FY17 Opened Converted Closed Total Australia JB HI-FI 126 8 - - 134 JB HI-FI HOME 59 - - - 59 185 8 - - 193 1 New Zealand 2 JB HI-FI 12 - 4 (1) 15 23 JB HI-FI HOME 4 - (4) - - 14 38 16 - - (1) 15 22 JB HI-FI T
Slide 25: Group Profit and Loss
Appendix IV a) Group Profit and Loss AUDm 1 FY18 FY17 FY16 FY15 FY14 Sales 6,854.3 5,628.0 3,954.5 3,652.1 3,483.8 Gross Profit 1,470.3 1,230.5 865.4 798.3 756.0 Gross Margin 21.45% 21.86% 21.88% 21.86% 21.70% EBITDA 411.7 360.3 262.1 240.0 226.7 Depreciation & Impairment 61.1 53.9 40.9 39.1 35.5 EB
Slide 26: Group Balance Sheet
Appendix IV b) Group Balance Sheet AUDm FY18 FY171 FY16 FY15 FY14 Cash 72.0 72.8 51.9 49.1 43.4 Receivables 204.7 193.6 98.0 81.5 70.7 Inventories 891.1 859.7 546.4 478.9 458.6 Other 42.7 41.4 6.1 7.4 5.3 Total Current Assets 1,210.5 1,167.5 702.4 616.9 578.1 Fixed Assets 198.0 208.2 183.6 176.2 181
Slide 27: Group Cash Flow
Appendix IV c) Group Cash Flow AUDm FY18 FY17 FY16 FY15 FY14 Statutory EBITDA 411.7 337.9 262.1 240.0 226.7 Change in Working Capital (6.6) (52.7) (15.9) (4.6) (122.0) Net Interest Paid (14.5) (7.6) (3.1) (5.1) (7.1) Income Tax Paid (114.8) (98.5) (66.2) (59.9) (60.6) Other 16.3 11.4 8.3 9.5 4.4 Net