Slide 1: Full Year Results 2020/21
Update picture FULL YEAR RESULTS 2020/21 30 June 2021
Slide 2: Today's agenda
Today’s agenda FINANCIAL RESULTS Jonny Mason BUSINESS UPDATE Alex Baldock 2
Slide 3: Financial Results
FINANCIAL RESULTS Jonny Mason Group Chief Financial Officer 3
Slide 4: Group financial highlights 2020/21
FINANCIAL RESULTS 2020/21 Group financial highlights 2020/21 2020/21 2019/20 YoY Group Revenue £10,344m £10,170m +2% Electricals Revenue £9,623m £8,581m +12% Adjusted EBIT £262m £214m +22% Adjusted EBIT % 2.5% 2.1% +40bps Adjusted PBT £156m £116m +34% Statutory PBT £33m £(140)m +£173m Free cash flow
Slide 5: We have grown sales strongly in all markets
FINANCIAL RESULTS 2020/21 We have grown sales strongly in all markets LIKE FOR LIKE SALES UK&I ELECTRICALS UK&I ONLINE +16% +145% +114% +12% +14% +98% H1 H2 2020/21 H1 H2 2020/21 INTERNATIONAL INTERNATIONAL ONLINE +18% +95% +79% +14% +15% +56% H1 H2 2020/21 H1 H2 2020/21 5
Slide 6: Computing has been standout category
FINANCIAL RESULTS 2020/21 Computing has been standout category Computing Consumer Domestic Electronics Appliances +25% +9% +8% 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21 +39% Tablets +13% Large +64% Home Screen TVs Baking +43% Gaming +7% Smart tech +57% Coffee Machines Source: Top level categor
Slide 7: UK&I Electricals
FINANCIAL RESULTS 2020/21 UK&I Electricals 2020/21 2019/20 YoY Revenue £4,921m £4,538m +8% (ccy neutral) Online share of revenue 69% 35% +34ppts Adjusted EBIT £209m £164m +27% (ccy neutral) Adjusted EBIT % 4.2% 3.6% +60bps Operating cashflow £246m £210m +22% (ccy neutral) Operating cashflow margin 5
Slide 8: UK&I Electricals – Revenue
FINANCIAL RESULTS 2020/21 UK&I Electricals – Revenue • Online sales +114%, £1.8bn more sales than last year • Travel sales almost zero • Market share temporarily declined (1.7)% due to enforced temporary store closures but large gains online Online • Share losses expected to 69% reverse in 2021/22 O
Slide 9: UK&I Electricals EBIT Margin
FINANCIAL RESULTS 2020/21 UK&I Electricals EBIT Margin Add furlough and rates to savings – split out leverage To be updated • Shift to online had c.270bps impact on gross margin • Loss of high margin Travel sales offset by rent savings • Savings generated by flexing of store operating costs and busi
Slide 10: UK&I Electricals segmental free cash flow
FINANCIAL RESULTS 2020/21 UK&I Electricals segmental free cash flow Prior Yr 368 (170) 12 210 (106) (46) 34 92 YoY 33 15 (12) 36 47 (17) (31) 35 • Operating cashflow +£36m yoy, driven by better profit outturn • Capital expenditure down £47m with spending on logistics and IT • Adjusting items increas
Slide 11: Nordics
FINANCIAL RESULTS 2020/21 Nordics 2020/21 2019/20 YoY Revenue £4,186m £3,573m +15% (ccy neutral) Online share of revenue 29% 19% +10%pts Adjusted EBIT £151m £126m +20% (ccy neutral) Adjusted EBIT % 3.6% 3.5% +10bps Operating cashflow £176m £162m +7% (ccy neutral) Operating cashflow margin 4.2% 4.5%
Slide 12: Nordics – Revenue
FINANCIAL RESULTS 2020/21 Nordics – Revenue • Total sales +15% (ccy neutral) • Online sales +74% to £1.2bn • Store sales positive • Market share increased in every market when both channels were open Online Online 29% 19% 12
Slide 13: Nordics segmental free cash flow
FINANCIAL RESULTS 2020/21 Nordics segmental free cash flow To be updated Prior Yr 248 (91) 5 162 (63) 117 216 YoY 23 (9) 0 14 11 (53) (28) • Operating cashflow +7% (ccy neutral), driven by higher EBIT • Capital expenditure down £11m with spending on Next Generation Retail and store refits • Working
Slide 14: Greece
FINANCIAL RESULTS 2020/21 Greece 2020/21 2019/20 YoY Revenue £516m £470m +8% (ccy neutral) Online share of revenue 21% 8% +13%pts Adjusted EBIT £19m £21m (14)% (ccy neutral) Adjusted EBIT % 3.7% 4.5% (80)bps Operating cashflow £24m £28m (11)% (ccy neutral) Operating cashflow margin 4.7% 6.0% (130)bp
Slide 15: UK&I Mobile
FINANCIAL RESULTS 2020/21 UK&I Mobile 2020/21 2019/20 YoY Adj Revenue £707m £1,636m (57)% (ccy neutral) Adjusted EBIT £(117)m £(97)m +(23)% (ccy neutral) Operating cashflow £(108)m £(101)m (2)% (ccy neutral) Segmental free cash flow £143m £(109)m +231% • Revenue down reflecting planned closure of st
Slide 16: UK&I Mobile free cash flow
FINANCIAL RESULTS 2020/21 UK&I Mobile free cash flow Prior Yr (62) (48) 9 (101) (7) (48) 133 (86) (109) YoY (41) 35 (1) (7) 6 (62) 258 57 252 • Operating cashflow £(108)m • Capital expenditure was almost nil • Adjusting items relate to property and redundancy costs due to standalone store closures •
Slide 17: Group cash flow
FINANCIAL RESULTS 2020/21 Group cash flow Prior Yr 299 (191) (94) 133 8 155 (46) 109 (131) (22) YoY 39 69 (79) 258 55 342 (13) 329 66 395 17
Slide 18: Group Balance Sheet significantly stronger
FINANCIAL RESULTS 2020/21 Group Balance Sheet significantly stronger 300 Balance sheet liabilities 200 2018/19 2020/21 • Substantial cash release from Mobile network debtor 100 • Lease liability reduced - • Provisions reduced to £(85)m (100) • Bank facilities reduced and (200) extended (300) • New p
Slide 19: Financial Guidance
FINANCIAL RESULTS 2020/21 Financial Guidance Current year Medium Term To generate cumulative free cash flow of Maintain net cash position more than £1bn At least 4.0% EBIT margin by 2023/24 Capital expenditure of around £190m (equivalent to 3.5% on a pre-IFRS16 basis) Exceptional cash costs of less
Slide 20: Business Update
BUSINESS UPDATE Alex Baldock Group Chief Executive 20
Slide 21: We help everyone enjoy amazing technology
WE HELP EVERYONE ENJOY AMAZING TECHNOLOGY we are \ Dixons Q Carphone
Slide 22: Summary
FULL YEAR 2020/21 Summary Technology a sustainably larger market post-pandemic We are the growing #1 Ours is the winning business model with Omnichannel and Services Our strategy to build on these strengths is visibly working Issues of Mobile and Covid-19 are largely behind us Very strong cash gener
Slide 23: Amazing Technology now plays a more vital role in customers' lives
FULL YEAR 2020/21 Amazing Technology now plays a more vital role in millions of customers’ lives CONNECTED FED CLEAN FIT & HEALTHY PRODUCTIVE ENTERTAINED 23
Slide 24: We expect Technology to stay a structurally larger market than pre-pandemic
FULL YEAR 2020/21 We expect Technology to stay a structurally larger market than pre-pandemic The market is larger now UK Electricals Market – Yo2Y 1. Reasons to believe continuing 23 UK Electricals Market Growth (rolling 4-week average) growth drivers: 40% • Hybrid working 22 • Home entertainment 3
Slide 25: We are the growing market leader
FULL YEAR 2020/21 We are the growing market leader UK&I ELECTRICALS Like-for like UK&I ELECTRICALS MARKET SHARE 40.0% 30.0% 20.0% +14% 10.0% 24.2% 25.1% 25.2% 25.8% 26.5% 24.7% 25.6% 0.0% 15/16 16/17 17/18 18/19 19/20 20/21 21/22 YTD 20/21 NORDICS MARKET SHARE Absolute revenue growth in 2021 35.0% 2
Slide 26: We are well diversified
FULL YEAR 2020/21 We are well diversified Geography Category Suppliers Greece Mobile Computing >20 UK & Top 5 Ireland Nordics White Goods Cons Elec 6-20 26
Slide 27: Omnichannel is the winning model in this category
FULL YEAR 2020/21 Omnichannel is the winning model in this category UK&I Electricals - Online Share of business Country Market Leader Market Share Omnichannel 100% 80% 38% 60% 40% 21% 20% 20% 0% JUL-20 JUN-20 JUN-21 DEC-20 FEB-20 SEP-20 OCT-20 FEB-21 NOV-20 M AR - 2 0 M AR - 2 1 M AY - 2 0 M AY - 2
Slide 28: We're also #1 in Credit and Services
FULL YEAR 2020/21 We’re also #1 in the Credit and Services that build valuable customer relationships Customer Journey: Discover Delivery & Set up & Trade-in and Afford Protect Repair installation connectivity & upgrade Choose 10.8% 26m >100,000 9m 1.7m >250,000 UK sales deliveries in product set-up
Slide 29: Our business model means we're best placed to win
FULL YEAR 2020/21 Our business model means we’re best placed to win Growing market leader Diversified Omnichannel Differentiating Credit & Services 29
Slide 30: Delivering our strategy to be Omnichannel, starting with online
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE We’re delivering our strategy to be “Omnichannel”, starting with a stronger online business Online Group Electricals Revenue 5 £4.7bn 4.5 4 £1.3bn 3.5 +103% 3 Revenue 2.5 £2.3bn 2 £0.7bn £3.4bn 1.5 1 £1.6bn 0.5 0 19/20 20/21 UK International 30
Slide 31: We've driven online growth through better retail basics
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE We’ve driven online growth through better “retail basics”… Range & Availability Price Customer Experience Larger range across the group Improved delivery Number of SKUs experience 104k SKUs and growing UK CSAT for delivery 100 70 90 60 +13pts 80
Slide 32: Recovering customer satisfaction from the pandemic's disruption
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE …and recovering customer satisfaction from the pandemic’s disruption UK Online NPS UK&I NPS 55 flat 45 NPS Score 35 25 15 19/20 20/21 TrustPilot Score International Happy or Not 3.4 +1pts +143% 1.4 19/20 20/21 19/20 20/21 Sources: Dixons Carphon
Slide 33: Further upside online as we remove legacy technology constraints
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE There’s further upside online as we remove the constraints of legacy technology platforms New technology platforms in FY22 Benefits include: • Premium product sales • Bundling • Credit & Services adoption Online growth and Gross Margin improveme
Slide 34: Investing in store benefits of expert face-to-face advice
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE Meanwhile, we’re investing in the store benefits of expert face-to-face advice and tech demos… Skills SpaceMix Store Safety & Wellbeing <INSERT IMAGE> Inclusion & Diversity WOW experience zones Tools Incentives Rebranded Stores 34
Slide 35: Bringing online and stores together
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE …and bringing online and stores together, so every customer benefits from both Never Stores sell complete online range out of • +76% YoY growth Growth stock Order & Collect “Omnichannel”: Get your Stores product • +112% YoY growth in UK&I and ri
Slide 36: Credit is progressing well despite impact of Covid
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE Credit is progressing well despite impact of Covid UK Active Credit Accounts in UK Reinforced partnerships in the Nordics 1600 1.4m Credit Sales +8% vs 2019/20 1400 1.2m +56% 1200 Accounts 1000 0.9m Yo2Y Credit Adoption 10.8%,(40)bps YoY 800 600
Slide 37: UK Services were disrupted by pandemic store closures
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE UK Services were disrupted by pandemic store closures; we expect much progress this year FY21 disruption FY22 Stores open and better selling of services online UK Repairs 1.6m -38% 1m #1 for sustainability Protection Repairs Longer life for Re-u
Slide 38: Nordics Customer Club is a growing success
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE In Services, Nordics Customer Club is a growing success, building more valuable customer relationships Continued increase Higher annual spend & Providing rich data in adoption profit per customer Club customers = 38% sales +59% Revenue per custo
Slide 39: We have many more customers we can sell to
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE We have many more customers we can sell to 12 13 More Customers1 More contactable customers 12.5m 9.6m 13 10 12 Active UK customers, millions 8 12 Active UK customers, millions 11 10.8m +33% +174% 6 11 10.2m 10 4 3.5m 10 9.4m 9 2 9 8 0 17/18 18/
Slide 40: Legacy Mobile transformation is on track
FULL YEAR 2020/21 OMNICHANNEL CREDIT & SERVICES MOBILE Legacy Mobile transformation is on track, despite pandemic disruption Strong cashflow from On track for P&L Free of legacy Further upside transformation Breakeven constraints to come All legacy volume New UK Mobile offer >£200m 19/20 20/21 21/22
Slide 41: Integrating UK mobile into One Business allows move to One Brand
FULL YEAR 2020/21 Integrating UK mobile into One Business allows move to One Brand • Customers can see our scale and breadth • Build perception of Currys as natural choice for all things Tech • Right point in transformation to invest in brand • Legacy constraints removed • Customer satisfaction impr
Slide 42: Behind all this progress are much more engaged colleagues
FULL YEAR 2020/21 Behind all this progress are much more engaged colleagues Colleague Engagement We’ve invested in: 85 80 Global top 20% companies (78) -1pts 75 Global Benchmark (74) +3pts Retail Benchmark (72) +5pts 70 +8pts 65 77 69 60 55 50 2020 2021 42 Sources: Dixons Carphone internal informati
Slide 43: Progress will translate into shareholder value
FINANCIAL PROFILE Progress will translate into shareholder value Confident of building on track record of growth 4.0% margin target on track (equivalent to pre-IFRS16 3.5%) Net cash balance sheet Current year is peak investment year Exceptional costs will reduce substantially after this current year