Howden Joinery Group Plc · LSE:HWDN
Howden Joinery — H1 2018 Earnings Presentation
38 slides from Howden Joinery's earnings presentation, Jul 26, 2018
Slide 1: Howdens 2018 Half Year Report
Howdens 2018 Half Year Report 26th July 2018
Slide 2: Richard Pennycook, Chairman
Richard Pennycook Chairman
Slide 3: Andrew Livingston, Chief Executive Officer
Andrew Livingston Chief Executive Officer
Slide 4: Pressing Ahead: Positive start to 2018
Pressing Ahead Positive start to 2018 H1 revenue and profit growth Strong operating cash generation 4
Slide 5: Pressing Ahead: New product, distribution, depots
Pressing Ahead New product New distribution New depots 5
Slide 6: Mark Robson, Deputy CEO and CFO
Mark Robson Deputy CEO and Chief Financial Officer
Slide 7: Highlights
Highlights Revenue, £m Operating profit, £m Uses of ‘cash’, £m HJ UK Continental Europe 75 Pension def Cap ex Share repurchase 625 619.4 70 75 14.7 69.6 600 604.7 65 66.6 50 575 38 11 553.0 756.4 60 25 22 550 13.5 17 539.5 10 525 55 0 5 2017 2018 2017 2018 2017 2018 HJ UK: +12.1% Gross profit, £m, a
Slide 8: Revenue
Revenue Total +12.1% 2018 UK depot revenue £604.7m LFL +10.7% France depots 2018 continental Europe revenue £14.7m 5.5% in €s 8
Slide 9: Profit before tax
Profit before tax Group gross profit margin 2017: 64.1% 2018: 61.3% Profit before tax Gross profit £m £m Gross Volume & mix profit (revenue) 85 25 Change £25m Change £3m Currency (0) 379.5 Volume & mix Cost 65.6 68.8 354.6 (COGS) pressures, Operating (34) cost savings, costs etc. (8) (22) Price
Slide 10: Operating costs
Operating costs Change Operating £22m costs £m Growth Other related 1 309.9 8 Older depots 10 New depots 3 288.0 • 2017 2018 10
Slide 11: Income statement
Income statement £m H1 2018 H1 2017 Revenue 619.4 553.0 Cost of goods sold (239.9) (198.4) Gross profit 379.5 354.6 Operating costs (309.9) (288.0) Operating profit 69.6 66.6 Net interest (0.8) (1.0) Profit before tax 68.8 65.6 Tax (14.3) (13.5) Profit for the period 54.5 52.1 11
Slide 12: EPS, dividends & share repurchase
EPS, dividends & share repurchase H1 2018 H1 2017 Earnings per share 8.9p 8.4p Interim dividend per share 3.7p 3.6p ► Share repurchase expenditure of £38.3m 12
Slide 13: Net cash and cash flow
Net cash and cash flow £m H1 2018 H1 2017 Opening net cash 241.1 226.6 Operating cash flows before movements in working capital 85.4 81.0 Working capital (33.4) (31.2) Capital expenditure (17.1) (22.0) Interest (net) 0.3 0.1 Tax paid (21.1) (20.0) Share repurchases (38.3) (11.3) Pension contribution
Slide 14: Working capital
Working capital ► Working capital increased £33.4m – stock up £14.5m – debtors up £51.1m – creditors up £32.2m 14
Slide 15: Pension scheme deficit
Pension scheme deficit £m Current service costs + IAS19 basis admin + Net discount interest rate 11 69 109.3 Change £62.7m 46.6 Asset Contribution returns 15 10 • Dec Jun 2017 2018 15
Slide 16: Recent trading and outlook for 2018
Recent trading and outlook for 2018 ► UK depot sales in Period 7 increased 5.3% ► 2018 outlook unchanged ► Capital expenditure and operating costs expectations unchanged 16
Slide 17: Andrew Livingston, Chief Executive Officer
Andrew Livingston Chief Executive Officer
Slide 18: Trade Customer: Time is money
Trade Customer Time is money It’s the small details that matter We get the job back on track 18
Slide 19: Trade Model: local relationships and services
Trade Model We have local relationships We fix it and offer services We project manage 19
Slide 20: Business Priorities
Business Priorities TRADE CUSTOMER 20
Slide 21: Trade Convenience: UK depots
Trade Convenience 668 UK depots 30 depots by the end of the year 800 depot opportunity with Northern Ireland depots in scope 21
Slide 22: Trade Convenience: Stock availability
Trade Convenience Stock availability Clearer on stock ranging per depot Improving our disciplines in replenishment 22
Slide 23: Trade Convenience: Supply Infrastructure
Trade Convenience Supply Infrastructure Product launches at speed Peaks in trading delivery, particularly in Period 11 23
Slide 24: Trade Convenience: Online mobile technology
Trade Convenience Online mobile technology Re-platforming our website New appointment of e-Commerce Director 24
Slide 25: Business Priorities
Business Priorities TRADE CUSTOMER 25
Slide 26: Business Priorities
Business Priorities TRADE CUSTOMER 26
Slide 27: Product Leadership
Trade Product Leadership 27
Slide 28: Product Leadership
Trade Product Leadership 28
Slide 29: Product Leadership: Easier to choose, stay in stock
Trade Product Leadership Easier to choose Easier to stay in stock Easier to manufacture and source 29
Slide 30: Product Leadership: Extended appliance ranges
Trade Product Leadership Extended appliance ranges to 400 More high quality laminate worktops and quartz 30
Slide 31: Product Leadership
Trade Product Leadership - » a uh
Slide 32: Product Leadership: Pre-finished and fire doors
Trade Product Leadership Time saving pre-finished doors Extended range of fire doors and fire-rated hardware 32
Slide 33: Product Leadership
Trade Product Leadership 33
Slide 34: Product Leadership
Trade Product Leadership 34
Slide 35: Trade Value: Site visit to Howden
Trade Value Site visit to Howden Credit to the customer 35
Slide 36: Trade Value: depots in France and Europe
Trade Value 20 depots in France 2 in Belgium, 1 in the Netherlands & 1 in Germany 36
Slide 37: Summary
Summary Positive first half On track to open 30 depots Strong line of new product Focus on delivering H2 & Period 11 2018 37
Slide 38: Howdens 2018 Half Year Report
Howdens 2018 Half Year Report 26th July 2018