Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — H1 FY2020 Earnings Presentation
37 slides from Jb Hi-fi's earnings presentation, Feb 10, 2020
Slide 1: JB Hi-Fi Limited HY20 Results Presentation
JB Hi-Fi Limited HY20 Results Presentation 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 1
Slide 2: Agenda
Agenda ▪ Group overview ▪ JB HI-FI Australia and JB HI-FI New Zealand ▪ The Good Guys ▪ Group Balance Sheet and Cash Flow ▪ Group FY20 Trading Update and Outlook ▪ Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB HI-FI LIMITED PAGE 2
Slide 3: Group Overview
Group Overview 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 3
Slide 4: Group Model
Group Model Two iconic Australian retail brands 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-making demographic savvy demograph
Slide 5: Group Model: Unique competitive advantages
Group Model Underpinned by 5 unique competitive advantages Low Cost Quality Store Supplier Multichannel 1 Scale 2 Operating Model 3 Locations 4 Partnerships 5 Capability • #1 player in Australian • Low CODB relative to retail JB HI-FI • Strong partnerships with all • Integrated, high quality in- mar
Slide 6: Group HY20 Performance
Group HY20 Performance HY20 Group Performance HY20 HY20 HY19 Growth AUD (Statutory) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Total sales ($m) 3,995.2 3,995.2 3,843.7 151.5 3.9% ▲ Earnings before interest and tax ($m) 263.0 255.6 236.6 19.0 8.0% ▲ Net profit after tax ($m) 170.6 174.4 160.1 14.3 8.9
Slide 7: HY20 Divisional Performance
Group HY20 Performance HY20 Divisional Performance HY201 HY19 Growth (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) $m % Sales ($m) - JB HI-FI Australia 2,722.4 2,591.3 131.1 5.1% ▲ - JB HI-FI New Zealand (NZD) 132.8 131.8 1.0 0.8% ▲ - The Good Guys 1,147.5 1,130.7 16.8 1.5% ▲ Total Sales (AUDm) 3,995.2
Slide 8: Group Highlights
Group Highlights Group HY20 Financial achievements1 Group Operational achievements • Sales up 3.9% to $4.0bn with positive comparable sales growth • Sustainability policy implemented - our commitment to across all three divisions having a positive impact on our people, our environment and our commun
Slide 9: JB HI-FI Australia and New Zealand
JB HI-FI Australia and New Zealand 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 9
Slide 10: JB Hi-Fi Australia HY20 Performance
JB Hi-Fi Australia HY20 Performance 1 HY20 HY19 Growth AUD (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Sales ($m) 2,722.4 2,591.3 5.1% ▲ Gross Profit ($m) 600.8 573.6 4.8% ▲ Gross Margin (%) 22.07% 22.13% (6 bps) ▼ Cost of Doing Business (%) 13.86% ` 13.96% (10 bps) ▼ EBITDA ($m) 223.5 211.8 5.5% ▲ EB
Slide 11: JB Hi-Fi Australia HY20 Sales
JB Hi-Fi Australia HY20 Performance HY20 Sales ▪ Total sales grew by 5.1% to $2.72 billion, with comparable sales up Sales Growth 4.4%. Sales momentum has been strong through the half, but it was pleasing to deliver 4.8% comparable sales growth in the key Total Comp Christmas quarter 5.3% 5.1% 4.7%
Slide 12: JB Hi-Fi Australia HY20 Earnings
JB Hi-Fi Australia HY20 Performance HY20 Earnings1 ▪ We are a sales led organisation with a focus on growing top line sales Gross Profit and gross profit dollars. HY20 Gross profit increased by 4.8% to $600.8 million whilst gross margin was down 6 bps at 22.1%, driven by: ▪ sales mix, as we manage t
Slide 13: JB Hi-Fi New Zealand HY20 Performance
JB Hi-Fi New Zealand HY20 Performance 1 HY20 HY19 Growth NZD (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Sales ($m) 132.8 131.8 0.8% ▲ Gross Profit ($m) 23.0 23.1 (0.1%) ▼ Gross Margin (%) 17.36% 17.51% (16 bps) ▼ Cost of Doing Business (%) 15.76% 15.66% +10 bps ▲ EBITDA ($m) 2.1 2.4 (13.2%) ▼ EBITDA
Slide 14: JB Hi-Fi New Zealand HY20 Sales and Earnings
JB Hi-Fi New Zealand HY20 Performance HY20 Sales Sales Growth ▪ Total sales were up 0.8% to NZD132.8 million, with comparable sales up 0.8%. Whilst Q2 sales moderated as we cycled strong comparable sales in Total the pcp (HY19 Q2 comparable sales growth of 14.4%), we are pleased Comp with the progre
Slide 15: JB HI-FI Australia and New Zealand Focus Areas
JB HI-FI Australia and New Zealand Focus Areas JB HI-FI continues to execute well, whilst positioning for future growth FY20 Focus Areas Sales • Continue driving sales across all channels - in-store, online and commercial • Focus on growing top line sales and gross profit dollars Category evolution
Slide 16: The Good Guys
The Good Guys 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 16
Slide 17: The Good Guys HY20 Performance
The Good Guys HY20 Performance 1 HY20 HY19 Growth AUD (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Sales ($m) 1,147.5 1,130.7 1.5% ▲ Gross Profit ($m) 237.6 233.2 1.9% ▲ Gross Margin (%) 20.71% 20.62% +8 bps ▲ Cost of Doing Business (%) 15.79% 16.18% (38 bps) ▼ EBITDA ($m) 56.4 50.3 12.2% ▲ EBITDA Marg
Slide 18: The Good Guys HY20 Sales
The Good Guys HY20 Performance HY20 Sales Sales Growth ▪ Total sales grew by 1.5% to $1.15 billion, with comparable sales up Total 0.6%. Sales momentum improved through the half with 2.7% Comp comparable sales growth in the key Christmas quarter 3.2% 2.7% ▪ The key growth categories were Dishwashers
Slide 19: The Good Guys HY20 Earnings
The Good Guys HY20 Performance HY20 Earnings1 Gross Profit ▪ Gross profit was $237.6 million with gross margin up 8 bps to 20.7%, driven by improvements in gross margin partially offset by sales mix $238m ▪ CODB was 15.8%, down 38 bps, and in absolute terms declined $229m $233m 0.9% as store wages r
Slide 20: The Good Guys Focus Areas
The Good Guys Focus Areas Strong first half results with continued opportunities for improvement FY20 Focus Areas Sales • Continue to focus on driving sales - in-store, online and commercial • Establish leading position in the growing Connected Home Appliances market Category evolution • Improve Coo
Slide 21: Group Balance Sheet and Cash Flow
Group Balance Sheet and Cash Flow 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 21
Slide 22: Group Balance Sheet
Group Balance Sheet and Cash Flow Group Balance Sheet Inventory Bridge – HY19 to HY20 AUDm HY20 HY201 FY19 HY19 (Statutory) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Cash 76.8 76.8 119.2 117.1 Receivables 386.6 386.6 254.4 311.2 $53.2m Inventories 1,132.3 1,132.3 886.7 1,076.4 $7.9m Other 37.6 37.8
Slide 23: Group Cash Flow Statement and Performance Indicators
Group Balance Sheet and Cash Flow Group Cash Flow Statement Group Performance Indicators 1 1 AUDm HY20 HY20 HY19 HY20 HY19 (Statutory) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Statutory EBITDA 372.1 281.9 264.3 Fixed Charge Ratio 3.0x 2.9x Change in Working Capital (17.7) (20.3) 84.5
Slide 24: Capital Management: HY20 dividend up 8.8% to 99 cps
Group Balance Sheet and Cash Flow Capital Management HY20 dividend up 8.8% to 99 cps ▪ The Board regularly reviews the Company’s capital structure Final and believes the current dividend payout ratio of 65% Interim appropriately balances the distribution of profit to shareholders, 51 46 the repaymen
Slide 25: Impact of new lease accounting standard AASB 16 Leases
Group Balance Sheet and Cash Flow Impact of new lease accounting standard AASB 16 Leases AASB 16 Leases was adopted on 1 July 2019 and has significantly changed the HY20 reported results however has had no economic impact on the Group, its cashflows, debt covenants or shareholder value. The impact o
Slide 26: FY20 Trading Update and Outlook
FY20 Trading Update and Outlook 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 26
Slide 27: Group FY20 Trading Update and Outlook
Group FY20 Trading Update and Outlook January 2020 sales update: ▪ Total sales growth for JB HI-FI Australia was 6.5% (January 2019: 3.0%) with comparable sales growth of 6.0% (January 2019 : 1.5%) ▪ Total sales growth for JB HI-FI New Zealand was -1.6% (January 2019 : -1.8%) with comparable sales g
Slide 28: Investment Checklist
Investment Checklist 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 28
Slide 29: Investment Checklist
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 metre
Slide 30: Appendices
Appendices 15 10 AUGUST 2016 FEBRUARY 2020 PAGE 30
Slide 31: Appendix I: Group Profit and Loss reconciliation
Appendix I a) Group Profit and Loss reconciliation to Pre application AASB 16 b) 5 year Group Profit and Loss results 1 AUDm HY20 AASB 16 HY20 HY20 HY19 HY18 HY17. HY16 (Statutory) Im pact (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Sales 3,995.2 - 3,995.2 3,9
Slide 32: Appendix I: Divisional EBITDA and EBIT reconciliation
Appendix I c) Divisional EBITDA and EBIT reconciliation to Pre application d) 5 year Divisional EBITDA and EBIT AASB 16 results AUDm HY20 AASB 16 HY20 HY20 HY19 HY18 HY17.1 HY16 (Statutory) Im pact (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) EBITDA - JB HI-FI
Slide 33: Appendix I: Group CODB reconciliation
Appendix I e) Group CODB reconciliation AUDm HY20 HY20 HY19 (Statutory) (Pre AASB 16) (Pre AASB 16) Other income (ex interest revenue) (0.8) (0.8) (0.7) Sales and marketing expenses 395.7 395.7 379.3 Occupancy expenses 149.4 153.5 151.4 less depreciation, amortisation & impairment (104.6) (21.8) (23
Slide 34: Appendix I: Group Balance Sheet reconciliation
Appendix I f) Group Balance Sheet Reconciliation to Pre application AASB 16 g) 5 year Group Balance Sheet results AUDm HY20 AASB 16 HY20 HY20 HY19 HY18 HY17 HY16 (Statutory) Im pact (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Cash 76.8 - 76.8 76.8 117.1 182.7
Slide 35: Appendix I: Group Cash Flow reconciliation
Appendix I h) Group Cash Flow Reconciliation to Pre application AASB 16 i) 5 year Group Cash Flow results AUDm HY20 AASB 16 HY20 HY20 HY19 HY18 HY17 HY16 (Statutory) Impact (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Statutory EBITDA 372.1 (90.2) 281.9 281.9 2
Slide 36: Appendix II: Group Profit and Loss Breakdown
Appendix II Group Profit and Loss – Breakdown1 HY20 1 (Pre AASB 16) HY19 (Pre AASB 16) Growth JB HI-FI JB HI-FI JB HI-FI JB HI-FI (Pre AASB 16) TGG Group TGG Group AUDm AUST NZ (NZD) AUST NZ (NZD) Sales 2,722.4 132.8 1,147.5 3,995.2 2,591.3 131.8 1,130.7 3,843.7 3.9% ▲ Gross Profit 600.8 23.0 237.6
Slide 37: Appendix III: Stores across Australia and New Zealand
Appendix III 1 318 stores across Australia and New Zealand Group store reconciliation1 HY20 FY19 Opened Converted Closed Total Australia JB HI-FI 138 3 - - 141 JB HI-FI HOME 58 - - - 58 1 196 3 - - 199 2 New Zealand 23 JB HI-FI 14 - - - 14 JB HI-FI HOME - - - - - 14 40 14 - - - 14 23 JB HI-FI TOTAL