NEXT plc · LSE:NXT

NEXT — FY2009 Earnings Presentation

57 slides from NEXT's earnings presentation, January 2009

  1. Slide 1: Year End Statement January 2009

    YEAR END STATEMENT JANUARY 2009

  2. Slide 2: Outlook

    OUTLOOK Consumer Environment Currency Costs & Margins

  3. Slide 3: Investing in the Brand

    INVESTING IN THE BRAND Product Store Design Marketing

  4. Slide 4: Year End Statement

    YEAR END STATEMENT JANUARY 2009

  5. Slide 5: Income Statement

    Income Statement £m 2009 2008 Revenue 3,272 3,329 Operating profit 478 537 -11% Interest (49) (39) Profit before tax 429 498 -14% Taxation (127) (144) Profit after tax 302 354 EPS 156.0p 168.7p -7.5%

  6. Slide 6: Sector Profit Analysis

    Sector Profit Analysis £m 2009 2008 Retail 289 320 - 9.7% Directory 157 164 - 4.1% International 9 7 Sourcing 32 33 Brand total 487 524 - 7.0% Ventura 5 22 Other (14) (9) Operating profit 478 537

  7. Slide 7: Balance Sheet

    Balance Sheet £m 2009 2008 Fixed assets 617 615 Goodwill 55 36 Stocks 319 319 Debtors 640 591 Creditors (843) (812) Derivatives 66 12 Pension fund deficit (69) (46) Share buybacks - (54) Net debt (629) (740) Net assets / (liabilities) 156 (79)

  8. Slide 8: Balance Sheet: Directory Debtors

    Balance Sheet £m 2009 2008 Fixed assets 617 615 Goodwill 55 36 Stocks 319 319 Debtors 640 591 +8% Directory Debtors January 2009 January 2008 +5.3% £461m £438m January 2009 January 2008 Sales +2.1% Sales

  9. Slide 9: Debt and Facilities

    Debt and Facilities £150m 2010 Bank Forecast Peak £750m £295m 2013 Bank January 2009 £629m £300m 2013 Bond January 2010(e) c£530m £250m 2016 Bond Net Debt Facilities £995m

  10. Slide 10: Cash Flow

    Cash Flow £m 2009 2008 Profit before tax 429 498 Depreciation / Disposals 123 114 Capital expenditure (121) (180) Acquisitions (14) - Working capital / Other (18) 13 Dividends paid (107) (109) Tax paid (126) (119) Share buybacks (55) (513) Net cash flow 111 (296)

  11. Slide 11: Cash Flow: Capital Expenditure

    Cash Flow £m 2009 2008 Profit before tax 429 498 Depreciation / Disposals 123 114 Capital expenditure (121) (180) £180m Warehouse / other Stores £58m £121m £80m £19m £12m £122m £102m £68m NEW REFITS NEW REFITS NEW REFITS £47m £21m £63m £39m £77m £45m Jan 10(e) Jan 09 Jan 08

  12. Slide 12: Cash Flow

    Cash Flow £m 2009 2008 Profit before tax 429 498 Depreciation / Disposals 123 114 Capital expenditure (121) (180) Acquisitions (14) - Working capital / Other (18) 13 Dividends paid (107) (109) Tax paid (126) (119) Share buybacks (55) (513) Net cash flow 111 (296) Operational cash flow 166 217

  13. Slide 13: Retail

    RETAIL

  14. Slide 14: Retail: Sales Analysis

    Retail : Sales Analysis £m 2009 2008 Revenue 2,198 2,255 - 2.5% Operating profit 289 320 - 9.7% % to revenue 13.1% 14.2% Sales Analysis Total  Net sales from new space + 4.0%  Underlying LFL - 6.5% Total Sales - 2.5%

  15. Slide 15: Retail: Profit Analysis

    Retail : Profit Analysis £m 2009 2008 Revenue 2,198 2,255 - 2.5% Operating profit 289 320 - 9.7% % to revenue 13.1% 14.2% Margin Movement  Achieved gross margin + 1.4% Bought in margin - 0.1% Markdowns + 1.6% Other - 0.1%

  16. Slide 16: Retail: Profit Analysis

    Retail : Profit Analysis £m 2009 2008 Revenue 2,198 2,255 - 2.5% Operating profit 289 320 - 9.7% % to revenue 13.1% 14.2% Margin Movement  Achieved gross margin + 1.4%  Occupancy - 2.1% Rent/Rates/Service charge - 1.3% Depreciation - 0.4% Utilities - 0.4%

  17. Slide 17: Retail: Profit Analysis

    Retail : Profit Analysis £m 2009 2008 Revenue 2,198 2,255 - 2.5% Operating profit 289 320 - 9.7% % to revenue 13.1% 14.2% Margin Movement  Achieved gross margin + 1.4%  Occupancy - 2.1%  Branch payroll + 0.1% Fixed Variable  Warehouse & Distribution - 0.3% - 0.6% + 0.3%  Overheads / Other - 0.2

  18. Slide 18: Retail: Space Expansion

    Retail : Space Expansion Stores Sq Ft (000’s) January 2008 502 5,201 New 19 306 Re-sites (11) - 72 Closed (11) (73) January 2009 510 5,506 + 5.9% New Store Appraisal  Net store contribution 17%  Payback 19 months  Performance vs target - 2%

  19. Slide 19: Retail: Space Expansion

    Retail : Space Expansion Stores Sq Ft (000’s) January 2008 502 5,201 New 19 306 Re-sites (11) - 72 Closed (11) (73) January 2009 510 5,506 + 5.9% Mainline 140 Home 120 2009/10(e) 260 + 4.7%

  20. Slide 20: Home Stand Alones

    Home Stand Alones A tough market but...  Comprehensive range  Market share potential  Good space opportunity

  21. Slide 21: Home Stand Alones: Current Out of Town Stores

    Home Stand Alones Current Out of Town Stores Number of stores 9 MAT sales £35m Square feet 122k Net store contribution 23% Payback 18 months

  22. Slide 22: Directory

    DIRECTORY

  23. Slide 23: Directory: Sales Analysis

    Directory : Sales Analysis £m 2009 2008 Revenue 816 800 + 2.1% Operating profit 157 164 - 4.1% % to revenue 19.3% 20.6%  Full price sales + 0.5% Sales Drivers 2009 2008  Active customers 2.20m 2.16m + 1.9%  Printed pages 3,960 3,652 + 8.4%

  24. Slide 24: Directory: Profit Analysis

    Directory : Profit Analysis £m 2009 2008 Revenue 816 800 + 2.1% Operating profit 157 164 - 4.1% % to revenue 19.3% 20.6% Margin Movement  Achieved gross margin - 1.2% Bought in margin - 0.9% Markdowns - 0.3%

  25. Slide 25: Directory: Profit Analysis

    Directory : Profit Analysis £m 2009 2008 Revenue 816 800 + 2.1% Operating profit 157 164 - 4.1% % to revenue 19.3% 20.6% Margin Movement  Achieved gross margin - 1.2%  Bad debt 0.0%  Service charge + 0.2%  Book creation / Marketing - 0.4%  Warehouse & Other + 0.1%

  26. Slide 26: International

    International £m 2009 2008 Revenue* 69 56 + 22% Operating profit 9 7 + 25% % to revenue 13.1% 12.8% • Franchise partner sales + 7% • Eastern Europe now wholly owned • Profits boosted by overhead savings & FX • 2009/10(e) sales down, profits ~ £7m * Prior year restated to include Denmark

  27. Slide 27: Sourcing

    Sourcing £m 2009 2008 Intra-group sales 595 613 -3.0% Operating profit 32 33 -2.6%  Local currency sales and profits decline  Offset by sterling translation gains  2009/10(e) profits ~ £32m

  28. Slide 28: Ventura

    Ventura £m 2009 2008 Revenue 162 204 - 20% Operating profit 5.1 21.5 - 76% % to revenue 3.1% 10.6%  Reduced client activity  Increased client in-sourcing  Reduced margin on key contract  2009/10(e) profits ~ breakeven

  29. Slide 29: Other

    Other £m 2009 2008 Property 0.8 3.9 Associates 0.9 1.2 Lipsy (1.4) - Group / Other (2.3) (7.2) Total (2.0) (2.1)

  30. Slide 30: Lipsy

    Lipsy £m 2009 Loss -1.4 Currency impact 0.6 Acquisition & integration costs 0.6 Alignment of accounting policies 0.3 Underlying profit 0.1  Logic of acquisition  Up to 10 retail stores by Jan 2010  Expand internet business  2009/10(e) profits ~ £700k

  31. Slide 31: Outlook

    OUTLOOK Consumer Environment Currency Costs & Margins

  32. Slide 32: Consumer Outlook for 2009

    Consumer Outlook for 2009 Fear & uncertainty Interest rates falling Property values falling Energy prices falling Falling employment Fuel prices down

  33. Slide 33: Next Outlook for 1st Half 2009(e)

    Next Outlook for 1st Half 2009(e) Retail LfL Budget Directory Budget -6% to -9% 0% to -2% No change in markdown strategy * Sales are VAT exc.

  34. Slide 34: Outlook: Currency

    OUTLOOK Currency

  35. Slide 35: £/$ Exchange Rate

    £/$ Exchange Rate MARCH 2008 $2.0 MARCH 2009 $1.4

  36. Slide 36: Currency Impact on Price

    Currency Impact on Price ~£21 £20 Margin Margin Reduction Margin Supplier Costs Cost +32% Cost VAT Reduction 2008 2009 * Illustration only – not to scale

  37. Slide 37: Outlook: Costs & Margins

    OUTLOOK Costs & Margins

  38. Slide 38: Retail Margin 2009/10(e)

    Retail Margin 2009/10(e) 8% 9% 10% 10% 11% 12% 13% 14% 15% 16% 17% 18% BOUGHT IN MARGIN 2009/10(e) Retail OCCUPANCY Margin COST CONTROLS OVERHEADS

  39. Slide 39: Directory Margin 2009/10(e)

    Directory Margin 2009/10(e) 14% 15% 16% 17% 18% 19% 19% 20% 21% 22% 23% 24% BOUGHT IN MARGIN 2009/10(e) 2008/09 WAREHOUSE & LOGISTICS SAVINGS Directory Margin

  40. Slide 40: NEXT Brand Response

    NEXT Brand Response... ? EXCITING EXCELLENT QUALITY PRESENTED IN COLLECTIONS THAT REFLECT THE ASPIRATIONS AND MEANS OF OUR CUSTOMERS

  41. Slide 41: Investing in the Brand

    INVESTING IN THE BRAND Product Store Design Marketing

  42. Slide 42: Investing in the Brand: Product

    Investing in the Brand : Product Womenswear March new lines SS09 58% SS08 47% QUALITY DESIGN NEWNESS

  43. Slide 43: Investing in the Brand: Store Design

    INVESTING IN THE BRAND Store Design

  44. Slide 44: Store Design

    Store Design Sq Ft ‘000 New Refits Redec’ Total To Jan 2009 900 1,600 1,100 3,600 To Jan 2010(e) 1,200 2,100 1,700 5,000 % of portfolio 21% 36% 28% 85% % of turnover 17% 41% 30% 89%

  45. Slide 45: Store Evolution: Natural Materials

    Store Evolution Natural materials

  46. Slide 46: Store Evolution: New Paint Finishes, New Wall Units

    Store Evolution New paint finishes New wall units

  47. Slide 47: Store Evolution: Props

    Store Evolution Props

  48. Slide 48: Store Evolution: New Home Shopfit

    Store Evolution New Home shopfit

  49. Slide 49: Investing in the Brand: Marketing

    INVESTING IN THE BRAND Marketing

  50. Slide 50: Spring Summer Advertising Spend Maintained

    Spring Summer Advertising Spend Maintained

  51. Slide 51: Editorial Content AW08

    Editorial Content AW08 +130%

  52. Slide 52: Spring TV Campaign

    Spring TV Campaign next

  53. Slide 53: The New Face of Next Menswear

    The NEW Face of Next Menswear Next

  54. Slide 54: Summary

    Summary Outlook tough but NEXT will... control budgets and costs not compromise the Brand continue to invest...

  55. Slide 55: Slide 55

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  57. Slide 57: (en Saas | ea

    (en Saas | ea

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