Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — FY2011 Earnings Presentation
26 slides from Jb Hi-fi's earnings presentation, Aug 8, 2011
Slide 1: Full Year Results Presentation 30 June 2011
For personal use only JB Hi-Fi Hi Fi Limited Full Year Results Presentation 30 June 2011 8 August 2011
Slide 2: Agenda
Agenda For personal use only 1. Performance Summary 2. Historic Performance 3. Profit and Loss Statement 4. Trading Performance 5. Share Buy-back y and Clive Anthonys y Restructure 6. Outlook 7. Cash Flow and Balance Sheet 8. Dividends 9. Store Update 10. Investment Checklist Terry Smart Richard Mur
Slide 3: Performance Summary
1. PERFORMANCE SUMMARY For personal use only Strong performance for 12 months to 30 June 2011 FY10 FY11 FY11 G Growth th 1 1 Statutory Statutory Normalised Normalised Sales $2.73b $2.96b $2.96b 8.3% Gross Margin 21.8% 22.0% 22.0% +28 bps Cost of Doing Business 14.5% 15.6% 14.5% 0 bps - EBI
Slide 4: Historic Performance
2. HISTORIC PERFORMANCE For personal use only Continuation of strong growth in sales and earnings since MBI in July 2000 (i) (i) (i) SALES +8% EBIT +12% NPAT +13% EPS +14% (i) (i) 134.4m 124.7cps(i) 2.96b 196.0m +13% +14% +8% +12% 2.73b + 175.1m 118.7m 109.7cps +17% +23% +26% +24% E ~$3.2b 2.33b +27
Slide 5: Profit and Loss Statement
3. PROFIT AND LOSS STATEMENT For personal use only 3 AUST NZ ((NZD)) CONSOLIDATED $m FY10 FY11 Growth FY10 FY11 Growth FY10 FY11 Growth Sales 2,598.0 2,814.6 8.3% 167.3 188.7 12.8% 2,731.3 2,959.3 8.3% Gross Profit 573.4 627.0 9.4% 26.0 32.6 25.2% 594.2 652.0 9.7% Gross Margin 22 1% 22.1% 22 3% 22.3
Slide 6: Trading Performance: Sales
4. TRADING PERFORMANCE For personal use only Sales Sales Growth FY11 Comps. Sales S l continued ti d tto be b iimpacted t dbby subdued bd d consumer Total Comps. 1HY11 2HY11 spending. JB Hi-Fi However comparable sales for JB Hi-Fi stores were positive in - Australia 9.9% (0.5%) (0.9%) 0.1% the s
Slide 7: Trading Performance: Gross Margin
4. TRADING PERFORMANCE… For personal use only Gross Margin Consolidated g gross margin g was 22.0%, %, a 28 bps p increase on the p prior p period. FY10 FY11 Growth Australia 22.1% 22.3% +21 bps New Zealand 15.6% 17.3% +171 bps Consolidated 21 8% 21.8% 22 0% 22.0% +28 bps The strength in gross m
Slide 8: Trading Performance: Cost of Doing Business
4. TRADING PERFORMANCE… For personal use only Cost of Doing Business (CODB) (i) Consolidated CODB was flat at 14.5%. (i) FY10 FY11 Growth Australia 14.4% 14.4% +0.4 bps New Zealand 17.0% 16.9% -11 bps Consolidated 14 5% 14.5% 14 5% 14.5% -0 1 bps -0.1 (i) In Australia, our CODB was flat at 14.4%
Slide 9: Trading Performance: Earnings
4. TRADING PERFORMANCE… For personal use only Earnings (i) EBIT increased 11.9% to $ $196.0m. (i) FY10 FY11 Growth Australia ($m) 178.6 197.2 10.4% - margin (%) 6.9% 7.0% +13 bps New Zealand (NZ$m) (4.3) (1.6) 64.0% - margin i (%) (2 6%) (2.6%) (0 8%) +177 (0.8%) 177 b bps Consolidated ($m) 175.1
Slide 10: Trading Performance: Online
4. TRADING PERFORMANCE… For personal use only Online We continue to develop and refine our online presence as part of our multichannel strategy. Online sales grew 51.6% on the prior year. With our high number of unique visitations (average 800,000 per week in July 2011) our online site is an i
Slide 11: Share Buy-back and Clive Anthonys Restructure
5. SHARE BUY-BACK AND CLIVE ANTHONYS RESTRUCTURE For personal use only Share Buy-back In May 2011 we completed a $173 $173.3m 3m off-market share buy-back which resulted in the purchase of 10 10.8 8 million shares, representing approximately 9.9% of the shares on issue. The buy-back will improve
Slide 12: Outlook: Stores and Trading
6. OUTLOOK For personal use only Stores T di Outlook Trading O tl k We anticipate opening 16 new JB Hi-Fi stores in FY12 (Aust: 16, NZ: 0). Maintain our target of 214 JB Hi-Fi branded stores (164 Tier 1 and 50 Tier 2 format) in Australia and New Zealand. This includes the four Clive Anthonys s
Slide 13: Outlook: Online
6. OUTLOOK… For personal use only Online Expect continued strong sales growth from online. Continued enhancement to the customer online experience including: Pickk up att store. Pi t This Thi will ill b be a new addition dditi tto our online li site it which provides customers greater convenie
Slide 14: Outlook: Digital
6. OUTLOOK… For personal use only Digital New “JB HI-FI NOW” music service anticipated to launch in the second quarter of FY12. JB Hi-Fi to launch new music subscription streaming service. service This new service will leverage off our strong music heritage. Natural extension to our current
Slide 15: Cash Flow Statement
7. CASH FLOW & BALANCE SHEET For personal use only Cash Flow Statement AUDm FY10 FY11 (i) EBITDA 198.4 223.3 Change in Working Capital 1.2 (62.2) Nett IInterest N t t Paid P id (5.0) (5 0) (3 8) (3.8) Income Tax Paid (53.5) (52.2) Other 11.0 4.8 Net Cash Flow from Operations 152.1 109.9 Purchases of
Slide 16: Working Capital and Key Ratios
7. CASH FLOW & BALANCE SHEET… For personal use only Working Capital and Key Ratios AUDm FY10 FY11 Inventory Management. Management (Increase)/decrease in current assets - Inventory levels and mix are in line with internal Inventory (10.0) (73.4) expectations. The movement from the prior year was R
Slide 17: Balance Sheet
7. CASH FLOW & BALANCE SHEET… For personal use only Balance Sheet AUDm FY10 FY11 Cash 51.7 27.2 Receivables 63.5 58.3 Inventories 334 8 334.8 406 9 406.9 Other 4.5 8.6 Total Current Assets 454.5 501.1 Fixed Assets 164.0 169.6 Brandname & Goodwill 83 9 83.9 78 7 78.7 Other 12.0 17.8 Total Non-Current
Slide 18: Dividends
8. DIVIDENDS For personal use only Dividends The final dividend is 29 29.0 0 cents per share fully franked franked. Total dividends of 77.0 cents per share represents a 16.7% increase over the prior year. (i) 77 cps p This represents ap payout y ratio of 60% of normalised FY11 +17% earnings an
Slide 19: Store Update: FY11 openings
9. STORE UPDATE For personal use only 18 new JB Hi-Fi stores opened in FY11 18 JB Hi-Fi stores opened in FY11: VIC: Airport West, Bayside Frankston, Chadstone – Warrigal Rd, Forrest Hill, Mildura, Sunshine NSW: Charlestown, Merrylands, Westfield Sydney NZ: Bayfair, Dunedin, Sylvia Park QLD
Slide 20: Store Update: FY12 openings
9. STORE UPDATE… For personal use only 16 new JB Hi-Fi stores to be opened in FY12 16 JB Hi-Fi stores to be opened in FY12 including: VIC: Greensborough#, Hoppers Crossing#, Traralgon, Thomastown, Springvale NSW: Caringbah#, Bankstown, Jamisontown, North Sydney QLD: Mackay, Garden City AUS
Slide 21: Investment Checklist
10. INVESTMENT CHECKLIST For personal use only Strong and unique retail model. Operates mainly in high growth home entertainment and technology sector. Low cost of doing business – best of listed retailers. Many new store opportunities - JB Hi-Fi circa 214 (164 Tier 1 format and 50 Tier 2 fo
Slide 22: Appendix I: Store movements
Appendix I For personal use only Store movements during FY11 Geographic breakdown# FY11 FY10 Opened Rebranded Closed Total Australia JB - Tier 1 107 12 4 - 123 JB - Tier 2 13 3 - - 16 120 15 4 - 139 Clive Anthonys 11 - (4) (2) 5 131 15 - (2) 144 1 New Zealand JB - Tier 1 8 1 - - 9 32 JB - Tier 2 2 2
Slide 23: Appendix II: EBIT and CODB reconciliation
Appendix II For personal use only a) EBIT reconciliation b) CODB reconciliation AUDm FY10 FY11 AUDm FY10 FY11 Profit for the year (App 4E) 118 7 118.7 109 7 109.7 Other income ((ex interest received)) ((0.3)) ((0.1)) Sales and marketing expenses (App 4E) 265.1 286.8 add back Occupancy expenses (App
Slide 24: Appendix III: Profit and Loss Statement (5 years)
Appendix III For personal use only Profit and Loss Statement (5 years) AUDm FY07 FY08 FY09 FY10 FY11(i) FY11(ii) Sales 1,281.8 1,828.6 2,327.3 2,731.3 2,959.3 2,959.3 Gross Profit 283 4 283.4 399 7 399.7 503 6 503.6 594 2 594.2 652 0 652.0 652 0 652.0 Gross Margin 22.1% 21.9% 21.6% 21.8% 22.0% 22.0%
Slide 25: Appendix III: Balance Sheet (5 years)
Appendix III… For personal use only Balance Sheet (5 years) AUDm FY07 FY08 FY09 FY10 FY11 Cash 23.7 (1.5) 35.8 51.7 27.2 Receivables 45.2 53.0 60.3 63.5 58.3 Inventories 211 3 211.3 271 9 271.9 324 5 324.5 334 8 334.8 406 9 406.9 Other 3.5 5.3 5.7 4.5 8.6 Total Current Assets 283.7 328.7 426.2 454.5
Slide 26: Appendix III: Cash Flow Statement (5 years)
Appendix III… For personal use only Cash Flow Statement (5 years) AUDm FY07 FY08 FY09 FY10 FY11 (i) EBITDA 76.4 117.0 160.7 198.4 223.3 Change in Working Capital 5.6 (44.8) 19.6 1.2 (62.2) N t IInterest Net t t Paid P id (7 1) (7.1) (8 9) (8.9) (6 7) (6.7) (5 0) (5.0) (3 8) (3.8) Income Tax Paid (15