Slide 1: Disclaimer
Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of WH Smith PLC. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expr
Slide 2: WH Smith PLC Interim Results 2021
WH Smith PLC Interim Results 2021 29 April 2021 1
Slide 3: Agenda
WH Smith PLC ▪ Introduction Carl Cowling ▪ Financial review Robert Moorhead ▪ Business review Carl Cowling ▪ Questions 2
Slide 4: WH Smith: Overview
WH Smith: Overview ▪ Encouraging performance despite continued impact from Covid-19 ▪ Focused plan on conversion and average transaction value growth delivering good results across all markets ▪ Resilient performance from High Street business; good cash generation ▪ Strong performance from funkypige
Slide 5: Robert Moorhead
Robert Moorhead Chief Financial Officer and Chief Operating Officer 4
Slide 6: Group financial summary
Group financial summary1 6 mths to 6 mths to Feb 2021 Feb 2020 Change £m £m % Revenue 420 747 (44)% Headline Group (loss) / profit from trading (4) 93 (104)% operations2 Headline Group (loss) / profit before tax3 (19) 80 (124)% Headline (loss) / earnings per share3, 4 (13.6)p 56.1p (124)% Free cash
Slide 7: Revenue analysis
Revenue analysis 6 mths to 6 mths to Feb 2021 Feb 2020 Change Total Revenue £m £m % Travel 150 432 (65)% High Street 270 315 (14)% Total revenue 420 747 (44)% International 71 161 (56)% % of 20191 Q1 Q2 Q3 to date2 High Street 88% 84% 87% Travel 39% 34% 43% 59% 58% 60% 1 Equivalent month in 2019 2 T
Slide 8: Group loss before tax
Group loss before tax 1 6 mths to 6 mths to Feb 2021 Feb 2020 £m £m Travel trading (loss) / profit 2,3 (28) 49 High Street trading profit 2 24 44 Group (loss) / profit from trading operations 2 (4) 93 Unallocated central costs (9) (9) Group operating (loss) / profit 4 (13) 84 Net finance costs (6) (
Slide 9: Non-underlying items
Non-underlying items Cash 6 mths to outflow in Feb 20211 second half £m £m Attributable to Covid 19 Impairment 6 - Onerous leases 2 - Stock 5 - Other 2 1 15 1 Other Integration 1 1 Amortisation 2 - 1 IAS 17 basis 18 2 8
Slide 10: Group free cash flow
Group free cash flow1 6 mths to 6 mths to Feb 2021 Feb 2020 £m £m Group operating profit 2 (13) 84 Depreciation, amortisation and impairment3 25 28 Non cash items 3 2 Operating cash flow4 15 114 Capital expenditure (22) (41) Working capital3 (1) (44) Net tax refunded / (paid) - (24) Net interest pai
Slide 11: Group net debt (pre-IFRS 16)
Group net debt (pre-IFRS 16) £m Opening net debt (301) Movement in year Free cash flow (13) Pensions (1) Non-underlying items1 (22) Other 1 Net debt 28 February 2021 (336) Cash 72 Term loans (400) Finance leases (8) 1 Includes payments relating to restructurings announced and charged in 2020. (336)
Slide 12: New financing arrangements
New financing arrangements £m Maturity 5 year convertible bond 327 April 2026 Term debt 133 April 2025 460 RCF 250 April 2025 Facilities 710 11
Slide 13: Liquidity position significantly improved following the refinance
And our liquidity position has significantly improved following the refinance At 29/03/2021 Proforma 29/03/2021 Additional RCF £350m* Additional £50m £50m Cash Funding £50m £50m Additional £250m Funding Cash £50m £250m RCF RCF £200m * Known commitments of £48m being rent and creditors. 12
Slide 14: Carl Cowling
Carl Cowling Group Chief Executive 13
Slide 15: WH Smith Travel
WH Smith Travel Interim Results 2021 WHSmith EST-1792 14
Slide 16: Travel strategy: Compelling growth opportunities
Travel strategy: Compelling growth opportunities ▪ Remain focused on initiatives within our control to support in the near-term and position us well for the recovery; good progress made in H1 ▪ Key areas of focus are relevant for all channels and territories across UK Travel and International; signi
Slide 17: WH Smith UK Travel
WH Smith UK Travel Interim Results 2021 WHSmith EST-1792 16
Slide 18: UK Travel: Well positioned for the recovery in Air
UK Travel: Well positioned for the recovery in Air ▪ Focused on customer conversion and increasing ATV delivering good results; double digit ATV increases ▪ Extended product categories and ranges; health & beauty and pharmacy proposition continues to deliver good results ▪ Continue to invest in our
Slide 19: UK Travel: 'Store of the Future' at London Heathrow Terminal 5
UK Travel: ‘Store of the Future’ at London Heathrow Terminal 5 Till point area moved to end of customer Food and drinks ranges journey to improve extended throughput Clear walk-through layout New souvenir ranges improves customer journey; and fixtures drives increase in ATV 18
Slide 20: UK Travel: Looking ahead - Air
UK Travel: Looking ahead - Air ▪ c.80% of passengers travel for leisure purposes*; WH Smith customers trend more towards leisure than business; expect leisure passengers to return first ▪ Well placed to emerge stronger: ➢ Large store formats deliver significantly higher ATV and spend per passenger ➢
Slide 21: UK Travel: Hospital channel
UK Travel: Hospital channel – good opportunities for growth ▪ Prior to Covid-19, the Hospital channel was our second largest channel in the UK ▪ Now operate from c.130 stores across 100 hospitals; around 300 hospitals with scope to support at least one of our store formats ▪ Strong proposition; cont
Slide 22: UK Travel: Rail
UK Travel: Rail ▪ Rail remains an attractive channel with c.1.7bn passengers pre-Covid; leisure passengers 40%* ▪ Over 70% of our sales were at off-peak and at weekends with higher sales per passenger and ATV growth ▪ Leisure expected to recover fastest with the return of business passengers driving
Slide 23: WH Smith International
WH Smith International Interim Results 2021 WHSmith EST-1792 22
Slide 24: WH Smith North America: Attractive growth opportunities
WH Smith North America: Attractive growth opportunities ▪ Largest travel retail market in the world; valued pre-Covid at c.$3.2bn ▪ 85% of passengers are domestic; more leisure focused ▪ Substantial retail footage up for tender over next ten years ▪ Distinctive retail offering tailored to local cons
Slide 25: WH Smith North America: Encouraging performance
WH Smith North America: Encouraging performance ▪ Total revenue in March at 61% compared to 2019 levels ▪ Encouraging recovery; TSA data shows consistent, steady recovery in passenger numbers across US airports ▪ 221 stores trading ▪ MRG are a leading player in resorts and tourist locations, primari
Slide 26: WH Smith North America: Strong pipeline of new store openings
WH Smith North America: Strong pipeline of new store openings H2 FY FY FY 2021 2022 2023 2024 Total MRG stores won at acquisition 4 8 11 1 Total new wins post acquisition 1 7 16 5 Total MRG stores won and to open 5 15 27 6 Total InMotion stores won and to open 3 3 2 1 Total North America stores to o
Slide 27: WH Smith International
WH Smith International ▪ WH Smith has a small market share of the international NBC market ▪ Recovery expected to start with domestic, then short-haul, then long-haul ▪ New space opportunities emerging ▪ 12 new stores won, including a significant tender at Adelaide Airport, Australia, ▪ Opened 5 new
Slide 28: WH Smith Travel: Looking ahead – strong pipeline of new space
WH Smith Travel: Looking ahead – strong pipeline of new space ▪ Strong pipeline of new space across all channels and territories ▪ Won c.100 new stores due to open over next three years; majority in North America ▪ Expect gradual improvement in Air; domestic travellers to return first, particularly
Slide 29: WH Smith High Street
WH Smith High Street Interim Results 2021 WHSmith EST-1792 28
Slide 30: High Street: Strategy continues to deliver
High Street: Strategy continues to deliver ▪ High Street strategy is as relevant today as it has ever been and continues to serve us well; focused on creating sustainable profits Space Category Cost Margin growth management management management ▪ Robust performance in first half delivering £24m of
Slide 31: High Street: Focus on space and category management
High Street: Focus on space and category management ▪ Forensic approach to space management continues; ability to manage our categories on a store by store basis ▪ Successfully implemented new ‘Working from Home’ and electrical accessories ranges across c.500 of our stores ▪ Strong performance from
Slide 32: High Street: Cost efficiencies
High Street: Cost efficiencies ▪ Cost efficiencies key to strategy; £24m of cost savings delivered in H1; on track to deliver £37m in the current financial year ▪ Savings from right across the business; rent reductions at lease end of over 45% ▪ Flexible lease portfolio with c.430 leases due to expi
Slide 33: Record performance from funkypigeon.com
Record performance from funkypigeon.com ▪ Online platform continues to drive strong profit growth; on track to deliver profit of mid-teens this financial year ▪ Record performances from personalised cards and attached gifting over the key trading periods ▪ Online card market has a small penetration
Slide 34: WH Smith: ESG – Our journey to a better business
WH Smith: ESG – ‘Our journey to a better business’ ▪ UK operations now carbon neutral ➢ International operations by 2025 ▪ Launched responsible sourcing requirements; vast majority of paper products now from sustainable sources ▪ Continue to champion literacy; working in partnership with the Nationa
Slide 35: Looking ahead: Well positioned for recovery
Looking ahead: Well positioned for recovery ▪ Financially strong with good liquidity ▪ Important travel retailer for landlords with proven strategy ▪ Continue to invest in new stores and store formats in the UK and North America where we see attractive opportunities for profitable growth ▪ Significa
Slide 36: Appendix
Appendix Interim Results 2021 WHSmith EST-1792 36
Slide 37: IFRS 16 – Impact on balance sheet
IFRS 16 – Impact on balance sheet 28 Feb 2021 IFRS 16 28 Feb 2021 £m (Pre-IFRS 16) Adjustment (Post-IFRS 16) Goodwill and other intangible assets 472 (1) 471 Property, plant and equipment 178 4 182 Right-of-use assets - 370 370 Investments in joint ventures 2 - 2 652 373 1,025 Inventories 123 - 123
Slide 38: IFRS 16 – Impact on income statement
IFRS 16 – Impact on income statement 28 Feb 2021 IFRS 16 28 Feb 2021 £m (Pre-IFRS 16) Adjustment (Post-IFRS 16) Revenue 420 - 420 Travel trading (loss) / profit 1 (28) (3) (31) High Street trading profit 1 24 9 33 Group (loss) / profit from trading operations 1 (4) 6 2 Unallocated central costs (9)
Slide 39: IFRS 16 – Impact on cash flow statement
IFRS 16 – Impact on cash flow statement 28 Feb 2021 IFRS 16 28 Feb 2021 £m (Pre-IFRS 16) Adjustment (Post-IFRS 16) Net cash flows from operating activities (14) 41 27 Net cash outflow from investing activities (21) - (21) Net cash outflow from financing activities (1) (41) (42) Total cash flow (36)
Slide 40: WH Smith PLC Interim Results 2021
WH Smith PLC Interim Results 2021 29 April 2021 41