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: Preliminary Results
WHSmith The global travel retailer Preliminary Results 10 November 2022
Slide 3: Agenda
Agenda 1▪ Introduction Carl Cowling 2▪ Financial Review Robert Moorhead 3▪ Business Review Carl Cowling 4▪ Questions 3
Slide 4: Overview: Strong year; well positioned for future growth
Overview: Strong year; well positioned for future growth Group is now in its strongest ever position as a global Travel retailer % £ Strong Multiple growth Continued success Investing for Resumption of momentum; opportunities using in winning new future growth; dividend reflects Group now trading su
Slide 5: WHSmith: A global travel retail Group
WHSmith: A global travel retail Group Travel Forensic ✓ Consistent market Retailing share growth ✓ Space management ✓ Multiple space growth ✓ Store opening programme UK High Street opportunities globally ✓ Format development ✓ Profit driven strategy ✓ Broad suite of brands ✓ In store execution ✓ Mar
Slide 6: Financial Review
Financial Review Robert Moorhead Chief Financial Officer and Chief Operating Officer
Slide 7: Group financial summary
Group financial summary1 Year to Year to Aug 2022 Aug 2021 £m £m Revenue 1,400 886 Headline Group profit / (loss) from trading operations 2 122 (20) Headline Group profit / (loss) before tax 3 73 (55) Headline earnings / (loss) per share 3, 4 41.7p (23.7)p Free cash flow (£m) 41 14 Capex 83 44 Final
Slide 8: Revenue analysis
Revenue analysis FY22 FY23 Year to 10 weeks to 5 Aug 2022 H2 % of 2019 1 Nov 2022 £m Total LFL 2 Total % to 2019 1 UK 521 109% 94% 118% North America 2, 3 288 113% 94% 117% Rest of the World 2 118 103% 82% 131% Total Travel 4 927 130% 92% 148% High Street 5 473 82% 83% 87% Total revenue 1,400 113% 8
Slide 9: Travel UK revenue by format
Travel UK revenue by format FY22 FY23 10 weeks to % of calendar 2019 1 H1 Q3 Q4 5 Nov 2022 % % % % Air 60% 111% 124% 132% Hospitals 90% 102% 110% 114% Rail 70% 87% 90% 92% Total 71% 102% 113% 118% 1 Equivalent month in 2019 9
Slide 10: Income statement
Income statement1 Year to Year to Aug 2022 Aug 2021 £m £m UK 2 54 (32) North America 2 31 6 Rest of the World 2 4 (13) Total Travel 2 89 (39) High Street 2 33 19 Headline Group profit / (loss) from trading operations 2 122 (20) Unallocated central costs (24) (19) Headline Group operating profit / (l
Slide 11: Group free cash flow
Group free cash flow1 Year to Year to Aug 2022 Aug 2021 £m £m Group operating profit / (loss) 2 98 (39) Depreciation, amortisation and impairment 3 49 50 Non cash items 8 8 Operating cash flow 4 155 19 Capital expenditure (83) (44) Working capital 3 (10) 37 Net tax (paid) / refunded (6) 10 Net inter
Slide 12: Headline net debt (pre-IFRS 16)
Headline net debt (pre-IFRS 16) Movement in Headline net debt Committed facilities £m £m Maturity At 31 August 2021 (291) 5 year convertible bond 327 May 2026 Movement in year Term debt 133 April 2025 Free cash flow 41 460 Pensions (2) Non-underlying items (16) RCF (undrawn) 250 April 2025 Net purch
Slide 13: Capital allocation policy
Capital allocation policy Capex Acquisitions Investment for growth In line with value with attractive returns creation strategy Efficient balance sheet Target leverage of 0.75-1.25x Dividend EBITDA Shareholder Dividend policy returns reinstated Surplus cash return 13
Slide 14: Business Review
Business Review Travel FOR EVERY EIEIOCIME there's a WHSmith
Slide 15: Four key pillars of Travel strategy continue to deliver
Four key pillars of Travel strategy continue to deliver ▪ Relevant for all channels and territories across Travel UK, North America, and Rest of the World Category Cost & Cash Space Growth ATV Growth Development Management ▪ Opened 98 stores ▪ Space management ▪ One-stop-shop travel ▪ Flexible rent
Slide 16: Travel North America
Travel North America FOR EVERY EXIOEMIEE there’s a WHSmith
Slide 17: North America: largest travel retail market in the world
North America: largest travel retail market in the world ▪ Significant opportunities to grow this business further ▪ Strong recovery; TSA1 data shows improved passenger numbers across US airports ▪ c.85% of US air travel is domestic ▪ Applied our forensic approach to retailing: space management; cat
Slide 18: Significant opportunity to win new business
Significant opportunity to win new business MRG/ InMotion share of News/ Specialty retail stores in top ▪ Strong track record of winning new tenders 25 North American Airports ranked by number of continues passengers 120 ▪ Attractive proposition; tailored approach to store design to meet landlord re
Slide 19: Substantial growth opportunities
Substantial growth opportunities ▪ Highly successful in winning new business under multiple brands; experts in localised store design ▪ Growing market share; opportunities are substantial ▪ Underpinned by our forensic approach to retailing and four pillars of our strategy 19
Slide 20: Travel Rest of the World (ROW)
Travel Rest of the World (ROW)
Slide 21: Major wins across multiple countries
Major wins across multiple countries ▪ Very low market share currently; strong and compelling proposition tailored to each territory ▪ Significant opportunity to grow our footprint through news, books and convenience (NBC) and technology tenders using our three economic models: directly-run, joint v
Slide 22: Market leader in Spanish airports in NBC
Market leader in Spanish airports in NBC ▪ 15 new stores trading by end of August; brand resonates well with customers ▪ Now No.1 market leader in NBC stores across Spanish airports with over 50 stores won ▪ Airport locations include: Madrid, Barcelona, Majorca and Ibiza ▪ Store opening programme wi
Slide 23: Travel UK
Travel UK
Slide 24: Continued growth opportunities across Travel UK
Continued growth opportunities across Travel UK ▪ Travel UK is our largest division; significant player in the UK ▪ Continue to invest in our stores and identify new and better quality space opportunities across all channels: Air, Hospitals and Rail ▪ Opened 38 stores during 2021/22 financial year ▪
Slide 25: One-stop-shop for travel essentials
One-stop-shop for travel essentials ▪ Focus on format development continues to generate significant opportunities across all channels ▪ Constantly evolving and responding to customer and landlord needs; repositioning from news, books and convenience retailing to a unique one-stop-shop travel essenti
Slide 26: Successfully opened 31 InMotion stores across UK airports
Successfully opened 31 InMotion stores across UK airports ▪ Strong growth market ▪ World class customer service experience showcasing a range of premium brands ▪ Well positioned for further growth outside the UK ▪ Positive customer and landlord feedback 26
Slide 27: Opportunities to improve and grow our space
Opportunities to improve and grow our space Hospitals: ▪ Robust market with significant opportunities to grow our space ▪ Strong proposition; continue to invest using a broad suite of brands to improve the retail provision tailored to each hospital trust ✓ M&S Simply Food and M&S food implants ✓ Cos
Slide 28: WHSmith Travel: Significant growth opportunities
WHSmith Travel: Significant growth opportunities ▪ Strong recovery across all our travel markets ▪ Group in strongest ever position as a global travel retailer; no longer a UK focused business ▪ Strong double-digit ATV growth ▪ Strong pipeline of new space across all channels and territories ▪ Won 1
Slide 29: UK High Street & Online
~~ ® ® ~ ”) < SY - < =) w = < fe) 03 FOR EVERY EXIOEIISE there's a WHSmith
Slide 30: High Street business is an important cash generator
High Street business is an important cash generator ▪ Continue to react to changing market dynamics ▪ £42m cost efficiencies delivered in full year; savings from right across the business, slightly ahead of plan ▪ Flexible lease portfolio: ✓ c.450 leases up for renewal over next three years; continu
Slide 31: Funkypigeon.com - Investing for future growth
Funkypigeon.com - Investing for future growth ▪ Funkypigeon.com has recovered well ▪ Underpenetrated market; online greeting card market c.15% of UK greetings card market1 ▪ Significant opportunities to grow the platform further over the medium- term ▪ Ongoing investment for the future: ✓ Funkypigeo
Slide 32: ESG – Our journey to a better business
ESG – ‘Our journey to a better business’ Our Journey ▪ Good progress made during the year to a Sustainable Business ▪ Highest performing specialty retailer in Morningstar’s ESG Sustainalytics Benchmark ▪ Included in Dow Jones Sustainability Index for second year; one of Minimising our impact only 12
Slide 33: Video: A leading global travel retailer
A LEADING GLOBAL TRAVEL RETAILER ea WHSmith est-1792
Slide 34: Strong growth prospects for WHSmith
Strong growth prospects for WHSmith ▪ The Group is in its strongest ever position as a global travel retailer ▪ Well positioned to capitalise on existing and new opportunities ▪ Expect substantial growth in profitability in current year ▪ North America business to become a more significant part of t
Slide 35: Questions
Questions
Slide 36: Appendix
Appendix
Slide 37: IFRS 16 – Impact on balance sheet
IFRS 16 – Impact on balance sheet Headline Pre-IFRS 16 IFRS 16 IFRS 16 £m 31 Aug 2022 Adjustment 31 Aug 2022 Goodwill and other intangible assets 544 (1) 543 Property, plant and equipment 211 8 219 Right-of-use assets - 446 446 Investments in joint ventures 2 - 2 757 453 1,210 Inventories 198 - 198
Slide 38: IFRS 16 – Impact on income statement
IFRS 16 – Impact on income statement Headline Pre-IFRS 16 IFRS 16 IFRS 16 £m 31 Aug 2022 Adjustment 31 Aug 2022 Revenue 1,400 - 1,400 Travel UK trading profit1 54 6 60 North America trading profit1 31 2 33 Rest of the World trading loss1 4 (1) 3 Total Travel trading profit1 89 7 96 High Street tradi
Slide 39: IFRS 16 – Impact on cash flow statement
IFRS 16 – Impact on cash flow statement Headline Pre-IFRS 16 IFRS 16 IFRS 16 £m 31 Aug 2022 Adjustment 31 Aug 2022 Net cash inflows from operating activities 94 93 187 Net cash outflow from investing activities (83) - (83) Net cash outflow from financing activities (11) (93) (104) Total cash flow -
Slide 40: Preliminary Results
WHSmith The global travel retailer Preliminary Results