Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — Macquarie Emerging Leaders Conference 2008
16 slides from Jb Hi-fi's conference presentation, May 2008
Slide 1: JB Hi-Fi Limited – Macquarie Emerging Leaders Conference May 2008
For personal use only JB Hi-Fi Limited Macquarie Emerging Leaders Conference – May 2008
Slide 2: Agenda
AGENDA For personal use only 1. Performance 2. Historical Performance 3. Trading Update 4. JB Model – CODB and EDLP 5. Dividends & Cashflow 6. Store Update 7. Investment Checklist Richard Murray CFO 2
Slide 3: Performance
1. PERFORMANCE For personal use only Strong performance for 6 months to 31 December 2007: HY08 Growth q Sales $988.5m 50.0% Û q Comparable store sales growth 18.8% (Aust: 19.6%, NZ: 0.4%) q EBIT Margin 6.6% +22 bps Û q NPAT $41.9m 60.2% Û q Earnings per share 40.0 cps 58.2% Û q Interim dividend - fu
Slide 4: Historical Performance
2. HISTORICAL PERFORMANCE For personal use only Strong growth in sales & earnings since MBI in July 2000 SALES HY08 EBIT HY08 NPAT HY08 +50% +55% +60% ~ 90-94m ~ 1.8b ~ 57-60m 65.5m 64.8m 1,282m +47% +55% +36% 41.9m 40.4m +60% +57% 989m 946m +50% 44.5m +36% +28% 34.7m 25.8m 694m +52% +32% +54% 19.5m
Slide 5: Trading Update
3. TRADING UPDATE For personal use only Trading Outlook FY08 • Since reporting in mid February, trading in February, March and April has been solid. • We anticipate being towards the top end of our guidance. • Strong result considering continued investment in telco and our NZ expansion. • Guidance a
Slide 6: JB – the model
4. JB – the model For personal use only JB has the biggest brands at the lowest prices, how do we achieve this? § Scale in everything we do. § We operate mainly in the high growth home entertainment and technology sector, delivering high sales volumes. § Sales culture – we sell! It’s in our culture
Slide 7: JB Model - EDLP & CODB: Low CODB enables EDLP strategy
4. JB Model - EDLP & CODB. . . 4. Low CODB enables EDLP strategy For personal use only In a fragmented and competitive market place, JB has the lowest CODB of listed Consumer Electronic (CE) retailers which enables our EDLP strategy Cost of doing business (CODB) 25.0% Key competitors to JB Hi-Fi • M
Slide 8: EDLP strategy drives EBIT margin expansion
4. JB Model - EDLP & CODB. . . 4. EDLP strategy drives EBIT margin expansion For personal use only § Our lower cost of doing business (CODB) has allowed us to manage the impact of product mix on our gross margins; support our every day low pricing philosophy and improve our earnings margin. § Reduct
Slide 9: Dividends & Cashflow
5. DIVIDENDS & CASHFLOW For personal use only § The half year dividend increased 100% to 10.0 cps fully franked. § The board is targeting a full year payout ratio of 40% in FY08. (FY07: 30%). § The board is confident that continuing strong cashflows from ~23.0 ~13.0 existing stores and overall marke
Slide 10: Continued growth in Cashflow position
5. DIVIDENDS & CASHFLOW . . . Continued growth in Cashflow position For personal use only 100.0 100 89 80.0 80 66 60.0 60 48 Store No. $m 40.0 76 40 64 52 20.0 40 20 30 16 - - -3 -13 -19 -20.0 -20 FY05 FY06 FY07 EBITDA Operating Cashflow Free cashflow Stores 10
Slide 11: Strong Balance Sheet at Dec 07
5. DIVIDENDS & CASHFLOW . . . Strong Balance Sheet at Dec 2007 For personal use only $m HY08 HY07 Performance Indicators: Stock Turnover 6.4 5.8 Creditors Days 58.4 64.7 Fixed Charge Ratio* 3.4 3.0 Interest Cover (times) 15.4 11.0 Return on Equity 27.8% 25.5% Return on Invested Capital 31.3% 34.9% §
Slide 12: Store Update
6. STORE UPDATE For personal use only 20 stores to open in FY08 Ø 16 JB Hi-Fi stores have been opened during FY08: • NSW: Rouse Hill, Westfield Kotara, Westpoint Blacktown, Westfield Parramatta, Strand Arcade • QUEENSLAND: Toowoomba, Westfield Strathpine, Townsville • VICTORIA: Epping Plaza, Westfie
Slide 13: Store Ramp Up Profile & Maturity Mix
6. STORE UPDATE . . . Store Ramp Up Profile & Maturity Mix For personal use only Ø Store Ramp Up Profile - a JB Hi-Fi store takes on average 3 years to mature, sales mature faster than earnings. Ø Approximately 50% of our stores are still in their maturity ramp up and with 24 new stores in FY09, JB
Slide 14: Upgrade of Store Rollout Guidance
6. STORE UPDATE . . . Upgrade of Store Rollout Guidance For personal use only Ø In March 2008 upgraded expected number of JB Hi-Fi branded stores from the previous guidance of circa 120 stores in Australia & NZ to circa 150 stores. Ø The company has 88 JB Hi-Fi branded stores in operation today. Ø T
Slide 15: Store Update: new stores to open in FY09
6. STORE UPDATE . . . 24 new stores to open in FY09 For personal use only Ø 21 JB Hi-Fi stores will be opened during FY09: • NSW: Albury, Tweed Heads, undisclosed (Syd.), Pagewood (Syd.), Penrith (Syd.) • QUEENSLAND: Morayfield, North Lakes (Bris.), Cairns, Rockhampton • VICTORIA: Bendigo • WA: Mala
Slide 16: Investment Checklist
7. INVESTMENT CHECKLIST For personal use only P Strong and unique retail model. P Operates mainly in high growth home entertainment and technology sector. P Low cost of doing business – best of listed retailers. P Many new store opportunities - JB circa 150 in Australia and New Zealand (88 today) -
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