Jb Hi-fi Limited · ASX:JBH

Jb Hi-fi — FY2019 Earnings Presentation

27 slides from Jb Hi-fi's earnings presentation, Aug 12, 2019

  1. Slide 1: FY19 Results Presentation

    JB Hi-Fi Limited FY19 Results Presentation 15 12 AUGUST 2016 2019 PAGE 1

  2. Slide 2: Agenda

    Agenda 1. FY19 Performance Overview i. Group ii. JB HI-FI Australia iii. JB HI-FI New Zealand iv. The Good Guys 2. Group Balance Sheet and Cash Flow 3. FY20 Trading Update and Outlook 4. Group Strategic Update 5. Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB HI-FI LIMITED PAG

  3. Slide 3: FY19 Performance Overview: Group

    1. FY19 Performance Overview i. Group AUD FY19 FY18 Growth Total sales ($m) 7,095.3 6,854.3 241.0 3.5% ▲ Earnings before interest and tax ($m) 372.8 350.6 22.3 6.4% ▲ Net profit after tax ($m) 249.8 233.2 16.7 7.1% ▲ Earnings per share (basic ¢) 217.4 203.1 +14 cps 7.1% ▲ Dividend per share (¢) 142.

  4. Slide 4: FY19 Performance Overview: Group by segment

    1. FY19 Performance Overview i. Group Growth FY19 FY18 $m % Sales ($m) - JB HI-FI Australia 4,726.0 4,539.7 186.3 4.1% ▲ - JB HI-FI New Zealand (NZD) 236.2 231.5 4.7 2.0% ▲ - The Good Guys 2,147.9 2,101.3 46.7 2.2% ▲ Total Sales (AUDm) 7,095.3 6,854.3 241.0 3.5% ▲ EBIT ($m) - JB HI-FI Australia 301.

  5. Slide 5: JB HI-FI Australia: Sales

    1. FY19 Performance Overview ii. JB HI-FI Australia Sales AUD FY19 FY18 Growth  Total sales grew by 4.1% to $4.73 billion, with comparable Sales ($m) 4,726.0 4,539.7 4.1% ▲ sales up 2.8%. It was a pleasing finish to FY19, with strong sales in the key tax time promotional period driving Q4 Gross Pro

  6. Slide 6: JB HI-FI Australia: Gross Profit and Margin

    1. FY19 Performance Overview ii. JB HI-FI Australia AUD FY19 FY18 Growth Gross Profit and Margin  We continue to focus on growing top line sales and Sales ($m) 4,726.0 4,539.7 4.1% ▲ gross profit dollars Gross Profit ($m) 1,046.2 1,006.5 3.9% ▲  Gross profit increased by 3.9% to $1.05 billion. Gro

  7. Slide 7: JB HI-FI Australia: CODB

    1. FY19 Performance Overview ii. JB HI-FI Australia AUD FY19 FY18 Growth CODB  Our low CODB remains a competitive advantage and is Sales ($m) 4,726.0 4,539.7 4.1% ▲ maintained through our continued focus on productivity, Gross Profit ($m) 1,046.2 1,006.5 3.9% ▲ minimising unnecessary expenditure an

  8. Slide 8: JB HI-FI New Zealand

    1. FY19 Performance Overview iii. JB HI-FI New Zealand Sales NZD FY19 FY18 Growth  Total sales were up 2.0% to NZD236.2 million, with Sales ($m) 236.2 231.5 2.0% ▲ comparable sales up 8.2% Gross Profit ($m) 40.8 40.9 (0.1%) ▼  The key growth categories were Communications, Gross Margin (%) 17.29%

  9. Slide 9: The Good Guys: Sales

    1. FY19 Performance Overview iv. The Good Guys AUD FY19 FY18 Growth Sales  Total sales grew by 2.2% to $2.15 billion, with Sales ($m) 2,147.9 2,101.3 2.2% ▲ comparable sales up 0.9% Gross Profit ($m) 442.7 426.1 3.9% ▲  The key growth categories were Refrigeration, Gross Margin (%) 20.61% 20.28% +

  10. Slide 10: The Good Guys: Gross Profit and Margin

    1. FY19 Performance Overview iv. The Good Guys AUD FY19 FY18 Growth Gross Profit and Margin  Gross profit was $442.7 million with gross margin up Sales ($m) 2,147.9 2,101.3 2.2% ▲ 33 bps to 20.6%. 2HY19 gross margin was up 88 Gross Profit ($m) 442.7 426.1 3.9% ▲ bps as we benefited from initiatives

  11. Slide 11: Group Balance Sheet and Inventory Bridge

    2. Group Balance Sheet and Cash Flow Group Balance Sheet Inventory Bridge – FY18 to FY19 AUDm FY19 FY18 Cash 119.2 72.0 $16.0m ($4.2m) ($16.3m) Receivables 236.0 204.7 Inventories 886.7 891.1 Other 34.6 42.7 Total Current Assets 1,276.5 1,210.5 Fixed Assets 191.5 198.0 $891.1m $886.7m Intangibles &

  12. Slide 12: Group Cash Flow Statement and Performance Indicators

    2. Group Balance Sheet and Cash Flow Group Cash Flow Statement Group Performance Indicators AUDm FY19 FY18 FY19 FY18 Statutory EBITDA 429.1 411.7 Fixed Charge Ratio 3.0x 2.9x Change in Working Capital (16.9) (6.6) Interest Cover 26.1x 21.1x Net Interest Paid (13.1) (14.5) Gearing Ratio 1.0 1.1 Incom

  13. Slide 13: Capital Management

    2. Group Balance Sheet and Cash Flow Capital Management FY19 dividend up 7.6% to 142 cps  The Board regularly reviews the Company’s capital structure and believes the current dividend payout ratio of 65% appropriately balances the distribution of profit to shareholders, the repayment of debt and th

  14. Slide 14: Impact of new lease accounting standard AASB 16 Leases

    2. Group Balance Sheet and Cash Flow Impact of new lease accounting standard AASB 16 Leases The implementation of AASB 16 Leases will significantly change reported results however will have no economic impact on the Group, its cashflows, debt covenants or shareholder value. The estimated impact, con

  15. Slide 15: FY20 Trading Update and Outlook

    3. FY20 Trading Update and Outlook July 2019 sales update:  Total sales growth for JB HI-FI Australia was 4.1% (July 2018: 2.9%) with comparable sales growth of 3.2% (July 2018: 0.3%)  Total sales growth for JB HI-FI New Zealand was -0.4% (July 2018 : -2.1%) with comparable sales growth of -0.3% (

  16. Slide 16: The Group Model

    4. Group Strategic Update The Group Model A dual branded retail combination Leading retailer of technology and Leading retailer of home appliances Product offering consumer electronics and consumer electronics Target customer base / Strong position with a young tech Strong position with home-making

  17. Slide 17: The Group Model - key enablers

    4. Group Strategic Update The Group Model - 5 key enablers Low Cost Quality Store Supplier Multichannel 1 Scale 2 Operating Model 3 Locations 4 Partnerships 5 Capability • #1 player in fragmented Low CODB relative to major JB HI-FI • Strong partnerships with all • Integrated, high quality in- Austra

  18. Slide 18: Group - Key Focus Areas

    4. Group Strategic Update Group – Key Focus Areas Last 12 Months (FY19) Next 12 Months (FY20) • Relocation of the JB HI-FI and The Good Group Merchandising • Consolidate brand data and drive market insights Guys support offices to a joint location in • Continued supplier engagement Southbank, Melbou

  19. Slide 19: JB HI-FI - Key Focus Areas

    4. Group Strategic Update JB HI-FI – Key Focus Areas Last 12 Months (FY19) Next 12 Months (FY20) • Appointment of Cameron Trainor – Sales • Continued focus on driving sales - in-store, online and Managing Director Australia commercial • Appointment of Cherie Kerrison – Managing Category evolution •

  20. Slide 20: The Good Guys - Key Focus Areas

    4. Group Strategic Update The Good Guys – Key Focus Areas Last 12 Months (FY19) Next 12 Months (FY20) • Positive comparable sales and stabilised • Continued focus on driving sales - in-store, online and earnings Sales commercial • Circa 30% of stores upgraded providing • Connected Home Appliances -

  21. Slide 21: Investment Checklist

    5. Investment Checklist Unique and relevant brands  Flexible business model – history of category growth and development  Diversity of product categories across brands  Scale operator, market leader  Global best in class metrics including low cost of doing business and high sales per square metr

  22. Slide 22: Appendix I: Group Profit and Loss - Breakdown

    Appendix I Group Profit and Loss - Breakdown FY19 FY18 JB HI-FI JB HI-FI JB HI-FI JB HI-FI Growth TGG Group TGG Group AUDm AUST NZ (NZD) AUST NZ (NZD) Sales 4,726.0 236.2 2,147.9 7,095.3 4,539.7 231.5 2,101.3 6,854.3 3.5% ▲ Gross Profit 1,046.2 40.8 442.7 1,527.1 1,006.5 40.9 426.1 1,470.3 3.9% ▲ Gr

  23. Slide 23: Appendix II: Group CODB reconciliation

    Appendix II Group CODB reconciliation AUDm FY19 FY18 Other income (ex interest revenue) (1.6) (0.6) Sales and marketing expenses (App 4E) 731.0 695.1 Occupancy expenses (App 4E) 306.4 299.7 less depreciation, amortisation & impairment (47.7) (50.0) Administration expenses (App 4E) 44.5 48.2 less dep

  24. Slide 24: Appendix III: Group store reconciliation

    Appendix III 315 stores across Australia and New Zealand Group store reconciliation FY19 FY18 Opened Converted Closed Total Australia JB HI-FI 134 5 1 (2) 138 JB HI-FI HOME 59 - (1) - 58 1 193 5 - (2) 196 New Zealand 2 JB HI-FI 15 - - (1) 14 23 JB HI-FI HOME - - - - - 15 - - (1) 14 14 39 JB HI-FI TO

  25. Slide 25: Appendix IV: Group Profit and Loss

    Appendix IV a) Group Profit and Loss AUDm 1 FY19 FY18 FY17 FY16 FY15 Sales 7,095.3 6,854.3 5,628.0 3,954.5 3,652.1 Gross Profit 1,527.1 1,470.3 1,230.5 865.4 798.3 Gross Margin 21.52% 21.45% 21.86% 21.88% 21.86% EBITDA 429.1 411.7 360.3 262.1 240.0 Depreciation & Impairment 56.2 61.1 53.9 40.9 39.1

  26. Slide 26: Appendix IV: Group Balance Sheet

    Appendix IV b) Group Balance Sheet AUDm FY19 FY18 FY17 FY16 FY15 Cash 119.2 72.0 72.8 51.9 49.1 Receivables 236.0 204.7 193.6 98.0 81.5 Inventories 886.7 891.1 859.7 546.4 478.9 Other 34.6 42.7 41.4 6.1 7.4 Total Current Assets 1,276.5 1,210.5 1,167.5 702.4 616.9 Fixed Assets 191.5 198.0 208.2 183.6

  27. Slide 27: Appendix IV: Group Cash Flow

    Appendix IV c) Group Cash Flow AUDm FY19 FY18 FY17 FY16 FY15 Statutory EBITDA 429.1 411.7 337.9 262.1 240.0 Change in Working Capital (16.9) (6.6) (52.7) (15.9) (4.6) Net Interest Paid (13.1) (14.5) (7.6) (3.1) (5.1) Income Tax Paid (116.4) (114.8) (98.5) (66.2) (59.9) Other 18.9 16.3 11.4 8.3 9.5 N

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