Currys Plc · LSE:CURY
Currys — FY2021/22 Earnings Presentation
53 slides from Currys's earnings presentation, Jul 7, 2022
Slide 1: Currys plc 2021/22 Results
Slide 2: We help everyone enjoy amazing technology
We help everyone enjoy ~ amazing technology. \ @iw
Slide 3: Financial Results
Slide 4: Strong Group performance
Financial performance Strong Group performance... Revenue Adjusted PBT £10,144m £186m (3)% LFL vs. 20/21 +19% vs. 20/21 +10% LFL vs. 19/20 +60% vs. 19/20 Total indebtedness Adjusted EPS £1,506m 11.9p £(164)m vs. 20/21 +11% vs. 20/21 £(770)m vs. 19/20 +78% vs. 19/20 1 Free cash flow excluding working
Slide 5: Strong full year performance
Financial performance Strong full year performance... Currency yet F = Curren Revenue neutral % UieHaAWS Ube tari Adjusted EBIT neutral Margin YoY Yo2¥ change change UR & Ireland £5,485m (3)% (4)% +6% £111m +22% 2.0% International £4,659m 3% (1% +15% £163m (2)% 3.5% - Nordics £4,105m 2% (2)% 15% £14
Slide 6: Currys is gaining share again in UK
Financial performance Currys is gaining share again in UR Uk Electricals market share @ Having gained significant share in both channels... 16/17 7/18 18/19 19/20 20/21 21/22 Stores Online 19/20 m21/22 Source: Gfk 6
Slide 7: UK & Ireland - performance summary
Financial performance Uk & Ireland - performance summary Currency ° ° 2021/22 2020/21 2019/20 neutral % Apeneehs || Uepencele change Yo change Yo2¥ change Yo Adjusted revenue £5,463m £5,628m £6,174m (3)% (3)% (12)% Revenue £5,485m £5,642m £6,127m (3)% (3)% (10)% Online share of business 45% 65% 32%
Slide 8: UK & Ireland - adjusted EBIT bridge
Financial performance Uk & Ireland - adjusted EBIT bridge One-off impacts Underlying impacts h HN , 2.0% margin { \ | 1.6% margin eS +£ £(39)m 0.7% margin £(20)m £(15)m ez £40 m +£69m £(66)m Business rates tax IT accounting Rebased Cost Savings Underlying 2020/21 iD accounting Debtor settlements Inf
Slide 9: UK & Ireland - adjusted EBIT margin bridge
Financial performance Uk & Ireland - adjusted EBIT margin bridge we Gross margin +11O0bps * Rebased impacts neutral * Debtor movements offset iD accounting +NObps (70)bps ¢ Underlying +110bps movement driven by: 2.0% * +3Q0Obps cost savings 16% ¢ +40bps network debtor revaluation * (70)bps inflation
Slide 10: UK & Ireland - margin bridge
Financial performance ae Uk & Ireland - margin bridge Operating expense to sales (70)bps * Isolated impacts (100)bps * Business rates tax headwind +NObps (70)bps . — * |T accounting 2.0% * Underlying movement +3Obps driven by: 1.6% * Cost savings ¢ Inflationary headwinds 20/21 Gross margin Opex 21/2
Slide 11: UK & Ireland performance impacted by inflation
Financial performance Uk & Ireland performance impacted by inflation Increased . Operating colleague hourly || crosmeren | Sbetctee | tort | Wels by over 5 years Wages £17)m £(8)m £(25)m Energy £(2)m £(6)m £(8)m Experienced inflation in energy prices Shipping £(22)m - £(22)m Other £(D)m - £(1)m @ An
Slide 12: UK & Ireland performance underpinned by excellent progress on cost savings
Financial performance Uk & Ireland performance underpinned by excellent progress on cost savings We have partnered with Operating GXO Gross margin Total . expense Who are running our UK warehouse operations Supply chain £12m Elem TS Retendering and consolidating suppliers GNFR £3m £16m £19m —_—!_— T
Slide 13: Elkjøp market share has stabilised
Financial performance Elkjap market share has stabilised Nordic market share ELKJOP) #1 market share in all countries 16/17 T/18 18/19 19/20 20/21 21/22 3
Slide 14: Nordics - performance summary
Financial performance Nordics - performance summary Currency ° ° 2021/22 2020/21 2019/20 neutral % Repenedlss || keserkerlts change Yo2¥ change Yo Revenue £4,105m £4,186m £3,573m +2% (2)% +15% Online share of business 25% 29% 19% (Appts (4)ppts +6ppts Adjusted EBIT £142m £151m £126m (5)% (6)% +13% A
Slide 15: Nordics adjusted EBIT margin bridge
Financial performance Nordics adjusted EBIT margin bridge 3.6% 20/21 -bps Gross margin Opex 3.5% 21/22 Gross margin flat Increased logistics cost Offset by increased store share of business Operating expense to sales (10)bps Lower government support Running dual IT systems Additional stores Offset b
Slide 16: Greece - performance summary
Financial performance Greece - performance summary Currency ° 2021/22 2020/21 2019/20 neutral % Apeneehs || Uepencele change change Yo2¥ change Yo Revenue £554m £516m £470m +13% 47% +18% Online share of business 9% 21% 8% (12)ppts (12)ppts +Ippts Adjusted EBIT £21m £19m £21m +22% +11% -% Adjusted EB
Slide 17: Greece adjusted EBIT margin bridge
Financial performance Greece adjusted EBIT margin bridge we Gross margin +200bps +200bps (190)bps * Reopening of stores * Strong performance in new insurance products 31% 3.8% Operating expense to sales (190) bps * Lower government support * Cost of opening new stores in Cyprus * Pay and fuel inflat
Slide 18: Strong cash generation
Financial performance Strong cash generation change Increase driven by cost saving programmes and reduced Operating cash flow £361m £338m +£23m cash payments for leases Capex £(133)m £(122)m £(11)m Increase due to rebrand Adjusting items £(33)m £C173)m €140m Property ane restructuring outflows and c
Slide 19: Balance sheet robust
Financial performance Balance sheet robust Total average indebtedness Cash + Average net cash £290m vs year end soo £2,622) £(2,427) £1559) £1260) Averag y oO Pension * 1AS19 deficit down to £(257)m (600) (2021/22: £(482)m) 1000) * £78m contributions + Positive impact of discount (1,500) rate * Offs
Slide 20: Uses of free cash flow
Financial performance Uses of free cash flow LY ae a be, change Free cash flow £72m £438m £(366)m Shareholder returns £(78)m - £(78)m £46m of dividends and £32m share buyback Pension £(78)m £(47)m £(31)m Resumed full contributions Share repurchase and other items £(41)m £(18)m £(23)m Purchese of own
Slide 21: Capital allocation priorities
Financial performance Capital allocation priorities After maintaining prudent balance sheet and paying required pension contributions, we have the following priorities for use of cash: Invest to grow business/profits/ cashflow Target payback of 24 months for transformation investments New post-inves
Slide 22: Outlook & guidance
Financial performance Outlook & guidance Current year outlook * Adjusted PBT £130-15Om * Capital expenditure £140-160m * Net exceptional cash costs around £40m * Expect to generate positive free cash flow * Annual pension contribution of £78m 22
Slide 23: CEO Update
CEO Update —~ Alex Baldock Group Chief Executive
Slide 24: Our Markets
Our Markets Strong International business ELKJOP)) Tech Market 13.2m® Households £15.9bn® Annual spend (20/21: £15.7bn) 32% Online share (20/21: 32%) 29.8m Households £21.2bn © Annual spend (20/21: £22.5bn) 64% Online share (20/21: 76%) 4.1m“ Households £2.2bn@) Annual spend KOTIOBOAOX (D Source: Uk
Slide 25: Our Markets
Our Markets Amazing technology plays a vital role in our customers’ lives we Continuing growth drivers We partner with 7 of the Trends Top 10 global R&D spend * Hybrid working & e-learning companies * Home entertainment 200 cc) Faster replacement * Greater usage 5 } 8B 60 + Greater familiarity 3 am
Slide 26: Our Markets
Our Markets The technology market was larger than before the pandemic... we UR Electricals Market size Nordics Electricals Market size 23 190 22 180 +19% 21 % 70 Yo2¥ D> Za 5 Fa £ 20 +14% % 160 3 Yo24¥ 3 wn 9 150 18 140 1 130 16/17 T/A 18/19 19/20 20/21 21/22 16/17 T/A 18/19 19/20 20/21 21/22 sues s
Slide 27: Our Markets
Our Markets ..and has stayed larger even in Last few months UK Electricals market vs. pre-pandemic Nordics Electricals market vs. pre-pandemic 35% 35% ’ 25% 25% 18% 18% 5% 5% 5% 5% § &@ © § F F F SB BH FW g g g g a a a oy N 8 & L 4 4 a 3 ra & 5 L i a L & 5 3 $ & £ &§& #2 8 § ® ££ % 6 8 & § & 8 8 8 =
Slide 28: Capable and committed colleagues
Capable and committed colleagues More engaged colleagues mean more satisfied customers... Colleague Engagement Customer Satisfaction age 19 « 3 j Z © 5 > Qa - 3 > 8 S 9 5 2 67 Nov Apr : 2019/20 2021/22 2019/20 2021/22 2020 2022 28
Slide 29: Capable and committed colleagues
Capable and committed colleagues We’ve worked hard for higher colleague engagement we Purpose & values Learning & development Reward & recognition We help everyone enjoy ~ 600k hours 12,60 O amazing technology. in training for colleagues Colleagues received shares \% Sid 9 programmes 29% increase in
Slide 30: Omnichannel
Omnichannel Continued progress on retail fundamentals Larger range Invested in price Easier experience UK&I more than doubled in two years Clear price promise Improved delivery and collection “You won't get it cheaper. experience UR&I SRUs 3k Full stop.” “] ~100% Yo2¥ CSAT e i i He ry ELKJOP) 2019/2
Slide 31: Omnichannel
Omnichannel Omnichannel is the proven winning model... Proven winning model in global tech retail Market Share Omnichannel Online SoB il FNAC DARTY > 17% = CECONOMY Sources: Company information, Gfk, Euromonitor and peer results publications. Tech customers use both channels 19% 46% Store only Both
Slide 32: Omnichannel
Omnichannel ...and stores have performed better than expected we UK Electricals Market growth by channel Store sales surged as we emerged from the YoY pandemic 100% 92% 100% 75% 50% MN% 0% -25% -21% 19% -60% -44% 20/21 21/22 22/23 YTD @Stores m Online Store closure periods —==Market =—=Currys 32
Slide 33: Omnichannel
Omnichannel Online we are big...even without stores we’d be the clear market leader Very popular websites Number of Website visits in 2021/22 Cin millions) KOTIOBOAOL 391 @ Amongst most visited retail websites in every country Sources: Currysinternat information ..mean we are much bigger than compet
Slide 34: Omnichannel
Omnichannel We have fewer, better stores... 10yr Uk&I store evolution Number of stores and total selling space Peeters | curs @rcwan Eon @ 1600 9 85 82 1400 16 75 8 66 1200 65 64 T 58 56 55 6 8 1000 g 865 3 Ee 824 5 5 173 735 = 630 ‘ 600 3 400 10 2 524 TN 479 200 i 4aT 375 368 361 358 34 1 ° ' ° 201
Slide 35: Omnichannel
Omnichannel ..that are flexible and profitable Amore flexible estate... Holding over || 35 99 140 10yr+ 3 4 182 With shorter average lease AAyears UR & Ireland lengths... 3.6 years Nordics 2.9 years Greece On better terms... 41% average net effective rent reduction on the 40 stores renewed in UR & I
Slide 36: Omnichannel
Omnichannel Omnichannel: stores and online together give customers the best of we both worlds Never out of stock Uk&l Online-in-store sales Order & Collect sales 150 130 slle) 90 70 50 30 10 -10 2019/20 2020/21 2021/22 Get your product Help 24/7 right now ShopLive URE! Nordics © 4.4/5 customer ratin
Slide 37: Customers for Life
Customers for Life Our opportunity is to grow share of wallet from our many existing we customers ~80% of UK households But we get a ~30% share shop for electricals with us! of their wallet 80% 50% We don’t need to invest lots in ..Significant headroom remains to grow acquiring new customers... shar
Slide 38: Customers for Life
Customers for Life Nordic customer club continues to grow Club membership is growing Club members more More opportunity ahead >50% of Nordic households engaged and profitable Revenue per customer in g Adding more customers to Club ™ Sweden iv) 2021/22 iy Higher ™ Norway ener + see . 6.8m shopping (7
Slide 39: Customers for Life
Customers for Life In the Uk, Currys Perks is showing early promise Perks membership is growing Perks members spend More opportunity ahead Number of permissions and customers tim 9.6m @ Contactable UK customers. m_ 2019/20 2020/21 2021/22 Since launch — Perks almost half of revenue ™ Perks Customer
Slide 40: Customers for Life
Customers for Life We’re building on strengths in Services We help you afford the amazing tech 2021/22 - Group 12.4% Sales through Credit 3.2M Credit customers 11.7m Deliveries >1.4m Installations >9OOKk Product set-ups We help give your tech longer life >4.7m Protection plans sold in year >13M Tota
Slide 41: Customers for Life
Customers for Life Credit helps customers afford the tech they need Credit is an important driver of lifetime value Spend more on products and services Are more satisfied And likelier to return t) oi .7° Products Services Online In-store ™Non-credit ™ Credit We are growing Credit 1.7m | a customers
Slide 42: Customers for Life
Customers for Life We've grown Credit by “levelling up” across channels and better offers Levelling up across channels Improved offers with stronger messaging 15.5% 190 & S a 290 & 11.9% & 9.8% & Tech now, pay later. 24.9% APR representative (variable). Pay nothing for up to 12 months. No deposit. N
Slide 43: Customers for Life
Customers for Life We are on track for 16% adoption with significant potential in we unutilised balances UK Credit adoption rising quickly 16.0% | 1.2% 10.8% © © | | | 2018/19 2019/20 2020/21 2021/22 Target 2023/24 With plenty of headroom for growth from existing customers >, 12% Credit £5.5bn balan
Slide 44: Customers for Life
Customers for Life We’re leaders in protecting and repairing products we We have scale in number of and in capability... and increasingly satisfied customers... customers 1 600 : In-home Repair Service NPS , # of Engineers @ @ 13m # Total active protection plans 1.7m # Repairs per 2020/21 2021/22 20
Slide 45: Customers for Life
Customers for Life Trade-in: how we give longer life to existing tech AND sell more new Customer hesitation about buying new Trade-in: Answers both concerns Affordability: “Can | afford Trade-in makes new tech this now?" more affordable "Ge iy K We re-use, re-sell, harvest parts or recycle 45
Slide 46: Customers for Life
Customers for Life Great progress on net zero targets 185,368 169,942 146,092 (88)% 107,997 60,584 36,863 [35,321 } (400% 2014/15 2015/16 2016/17 2017/18 2018/19 = 2019/20 = 2020/21 = 2021/22 Targets ADS. 50% reduction in scope 1, 2 and 3 emissions by 2029/30 against 2019/20. Net zero by 2040 for sc
Slide 47: Customers for Life
Customers for Life Our ESG Ratings are climbing fast @ Our ESG Ratings Rating provider Score Date FTSE4Good 43 Jun-22 ee ISS@ 1 Jun-22 ee S&P 32 Mar-22 ee CPD A Dec-21 ee Sustainalytics 13.3 - Low risk Oct-21 (DISS Environmental QualityScore. Recent improvement in Scores 5.f 4.3 Jun-21 7 Jun-22 FTSE
Slide 48: Outlook
Outlook A stronger business Strong Internationally ~60% of Profits International Bigger Market Uk Market size 23 (bn) 22 21 20 19 18 Tv Growing #1 ELKJOP)) Winning Omnichannel Model Uk&I Product sales @ = Store-only = Omnichannel Online-only More Customers for Life Nordics customer club members 6.8m
Slide 49: Outlook
Outlook Stronger Currys: more help for customers in cost of living crisis we Range Price Credit Longer life & %, S 2 MONTH * AY DELAY § 49
Slide 50: Outlook
Outlook ae 2023/24 Targets EBIT margin Capital expenditure New cash exceptionals 5% <1.5% of sales Fminimal Annual sustainable free cash flow >£150m Growing shareholder returns Annual sustainable free cash flow is defined as operating cosh flow less copital expenditure, exceptioncl cash flow, cash t
Slide 51: Currys Summary
Currys Summary Strong results, from a stronger Currys International business, #1 in all markets Tech market is sustainably larger post pandemic Record colleague engagement and customer satisfaction Making more of proven Omnichannel model Building more Customers for Life through Services The hardest
Slide 52: We help everyone enjoy amazing technology
We help everyone enjoy ~ amazing technology. \ @iw
Slide 53: Visit our corporate website
Visit our corporate website www.currysplc.com