Slide 1: Preliminary Results FY15
Preliminary Results FY15
Slide 2: Introduction
Introduction Dennis Millard Financial Performance Andrew Findlay Strategic Progress and Trading Highlights Dennis Millard and Emma Fox Questions 2
Slide 3: Andrew Findlay, Chief Financial Officer
Andrew Findlay Chief Financial Officer 3
Slide 4: Financial Highlights
Financial Highlights Group Revenue exceeds £1bn, a year earlier than targeted Group EBITDA up 8.7% to £109.9m, with EBITDA margins also up Profit Before Tax up 11.4% to £81.1m Basic Earnings Per Share up 13.8% to 32.7p Net Debt at 3 April 2015 down at £61.8m with net debt:EBITDA at 0.6x Full year di
Slide 5: Retail LFLs (%)
Retail LFLs (%) 9.9 8.8 7.9 7.5 6.6 5.9 6.8 5.7 4.6 0.4 0.3 (1.1) (2.8) (2.3) (4.8) (7.5) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY12 FY12 FY12 FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 FY15 FY15 FY15 FY15 5
Slide 6: FY15 Retail Revenues
FY15 Retail Revenues Total Retail LFL % Cycling +11.4 Car Maintenance +8.5 Car Enhancement -0.5 Travel Solutions +5.4 Total +7.0 Proportion of Proportion of Online Retail Total Retail Online Retail Growth Sales Sales % % % Home Delivery 8.9 1.1 -14.0% Click & Collect 91.1 11.1 +18.1% Total 100.0 12.
Slide 7: Retail Performance
Retail Performance FY15 FY14 Change £m £m Revenue 857.9 803.1 +6.8% Gross Profit 442.0 416.2 +6.2% Gross Margin 51.5% 51.8% -30bps Operating Costs (359.3) (341.0) +5.4% EBIT 82.7 75.2 +10.0% EBIT Margin 9.6% 9.4% +27bps EBITDA 102.4 93.6 +9.4% EBITDA Margin 11.9% 11.7% +28bps Notes: All numbers incl
Slide 8: Retail Operating Costs
Retail Operating Costs FY15 FY14 Change £m £m Store Staffing 99.7 92.4 +7.9% Store Occupancy 139.3 139.7 -0.3% Warehouse & Distribution 43.5 33.7 +29.1% Support Costs 76.8 75.2 +2.1% Total 359.3 341.0 +5.4% Depreciation / Amortisation 19.7 18.4 +7.1% Notes: All numbers include the acquired Boardman
Slide 9: Warehouse & Distribution: Product mix becoming bulkier
W&D Product mix becoming bulkier… Cycling Workshop Cycle carriers Sat Nav +32% 2yr LFL +32% 2yr LFL +23% 2yr LFL -11% 2yr LFL Online sales Replenishment growing… frequency changing… Increased cube volume throughput Increased Order & Collect* volumes +39%** In two years, Retail LFL use of +14.5% with
Slide 10: Autocentres Performance
Autocentres Performance FY15 FY14 Change £m £m Revenue 147.0 136.6 +7.6% LFL% +5.3% -0.1% Gross Profit 93.1 88.0 +5.8% Gross Margin 63.3% 64.4% -109bps Operating Costs (89.3) (83.7) +6.7% EBIT 3.8 4.3 -11.6% EBIT Margin 2.6% 3.1% -56bps EBITDA 7.6 7.5 +1.3% EBITDA Margin 5.2% 5.5% -32bps Notes: All
Slide 11: Cashflow and Net Debt
Cashflow and Net Debt FY15 Cashflow £m 39.6 14.0 Debt facility amended 142.2 20.3 to £170m and extended 27.7 to November 2019 37.8 Operating Capex Boardman Tax & Returns to Other Reduction in cashflow acquisition interest shareholders net debt 139.2 Net debt £m 110.6 99.6 Net debt to EBITDA at 0.6x
Slide 12: FY16 Guidance
FY16 Guidance Cycle Republic sales growth c. 1% Retail Gross Margin A decline of 25-75bps Retail Operating Costs 4 - 5% Retail Capital Expenditure c. £45m Autocentres EBITDA Low double-digit % increase on FY15 Autocentres Capital Expenditure c. £8m Group depreciation charge c. £30m Net Finance Costs
Slide 13: FY16 Retail Opex Guidance
FY16 Retail Opex Guidance Store change initiatives c. 1-2% Cycle Republic operating costs Pay rise c. 1% Gears pay increments Volume-related cost growth offset c. 1% by targeted savings Depreciation c. 1% 13
Slide 14: Summary of Financial Performance
Summary of Financial Performance The significant top-line performance from Retail continues… … and is now reflected in earnings growth Strong cash generation and reducing Net Debt Full year dividend up 15.4% Continued focus on sales-driving activity in FY16 14
Slide 15: Dennis Millard, Chairman
Dennis Millard Chairman driving stop line 15
Slide 16: Helping and Inspiring Customers with their Life on the Move
Getting Into Gear Helping and Inspiring Customers with their Life on the Move 16
Slide 17: Retail colleagues, contract hours and turnover
Retail colleagues1 Weekly Contract Hours2 9,200 25 22 8,100 17 7,700 FY13 FY14 FY15 FY13 FY14 FY15 % Full Time 3-month turnover3 36% 21% 30% 25% 12% 9% FY13 FY14 FY15 FY13 FY14 FY15 Notes: 1) As at the end of each year presented 2) The average contracted hours per week for store colleagues 3) The pr
Slide 18: Gears training, engagement and Net Promoter Score
Gears training1 Colleague Engagement2 Gear 1 96% 64% 81% Gear 2 46% April April Gear 3 over 300 2012 2015 Net Promoter Score3 72% 77% 55% FY13 FY14 FY15 Notes: 1) The Gear 1 and Gear 2 statistics represent the proportion of eligible colleagues that had qualified by the end of FY15 2) Halfords Retail
Slide 19: Store refreshes
a stores fit to shop Store owe le refreshes republic For us, learning to ride is right 2 5 yy Sam —we ca | up there with len 19 to wz ner" 6 clathine “f women’ s clothing 19
Slide 20: Strengthening authority in Auto and Cycling, community involvement
Strengthening our authority in Auto and Cycling… Expanding our community involvement… 9,000 cubs have learned about bike maintenance 12,000 children taught bike maintenance and safety at school 20,000 children and parents attended our free bike workshops Launched a new scheme to donate re-conditione
Slide 21: Tablets in store, SAP upgrade, social media
Tablets in store SAP upgrade Increased social media presence Website design refresh Continual online developments 21
Slide 22: Autocentres strategy
driving Autocentres strategy Stopline PEOPLE WHO LOVE WORKING ON CARS
Slide 23: Autocentres progress
Autocentres progress Online and technological enhancements Concept centre trial Early progress in Closer working with customer service Retail measures 23
Slide 24: Autocentres focus for FY16
Autocentres focus for FY16 10-15 new centres Light touch refresh programme Productivity and utilisation Customer retention 24
Slide 25: Emma Fox, Commercial Director
Emma Fox Commercial Director 25
Slide 26: Retail Sales Performance
Retail Sales Performance 12% Cycling 34% Car Maintenance 22% Car Enhancement Travel Solutions 32% New products and brands Customer service and expertise Better online Momentum built 26
Slide 27: Retail Performance Highlights
Retail Performance Highlights Older children’s bike Premium bikes sales sales +40.5% #1 oil brand +24.9% Strengthened Online sales Newness and authority in core exceeded £100m innovation categories 27
Slide 28: Looking ahead…
Looking ahead… New range launches Boardman accessories Cycle department refreshes Colleague training Cycle Republic: stores and online 28
Slide 29: Looking ahead…
Looking ahead… New products and extended range New and improved merchandising Festival pop-up shops Harness trend for Do It For Me Bundle promotions and package solutions 29
Slide 30: Summary
Summary Strong top line growth, with Group sales exceeding £1bn Improved specialist authority in Auto and Cycling Strategy embedded, progressing well and with great momentum Building a sustainable platform 30
Slide 31: Preliminary Results FY15
Preliminary Results FY15
Slide 32: Appendices
Appendices
Slide 33: 5 year Group results summary
5 year Group results summary 33
Slide 34: Milestones
Milestones FY15 FY15 FY16 Target Achieved Target G2: 80% of 40-50% of colleagues 3-Gears colleagues through 46% G3: 2 colleagues in G2 most stores Reduce % Of Colleagues Leaving maintain FY15 <12.5% 9% Within 3 Months levels Colleague Engagement n/a n/a >85% >75% maintain FY15 Retail Net Promoter Sc
Slide 35: Group Income Statement
Group Income Statement FY15 FY14 Change £m £m Revenue 1,004.9 939.7 +6.9% Gross Profit 535.1 504.2 +6.1% Operating Costs (450.5) (426.4) +5.7% EBIT 84.6 77.8 +8.7% EBIT Margin % 8.4% 8.3% +14bps EBITDA 109.9 101.1 +8.7% EBITDA Margin % 10.9% 10.8% +18bps Net Finance Costs (3.5) (5.0) -29.5% PROFIT B
Slide 36: Group Components
Group Components Retail Autocentres Amortisation Group FY15 £m £m £m £m Revenue 857.9 147.0 - 1,004.9 Gross Profit 442.0 93.1 - 535.1 Operating Costs (359.3) (89.3) (1.9) (450.5) EBIT 82.7 3.8 (1.9) 84.6 EBITDA 102.4 7.6 - 109.9 Retail Autocentres Amortisation Group FY14 £m £m £m £m Revenue 803.1 13
Slide 37: Group Balance Sheet
Group Balance Sheet FY15 FY14 YOY Change £m £m £m Goodwill and Intangible Assets 356.8 342.2 +14.6 +4.3% Property, Plant & Equipment 103.8 95.2 +8.6 +9.0% Derivative Financial Instruments 3.8 (2.1) +5.9 +281.0% Net Working Capital 27.6 47.2 -19.6 -41.5% Net Debt (61.8) (99.6) +37.8 +38.0% Other Cred
Slide 38: Cashflow and Net Debt
Cashflow and Net Debt OPERATING FREE £m £m NET DEBT £m CASHFLOW CASHFLOW EBIT 87.6 Operating Cashflow 142.2 Opening Net Debt (99.6) Depreciation/ Amortisation/ 27.4 Capital Expenditure (39.6) Free Cashflow 66.4 Loss On Disposal Employee Share Scheme 1.4 Net Finance Costs (3.1) Dividends (28.4) Worki
Slide 39: Capital expenditure
Capital expenditure FY152 FY14 £m £m Store Portfolio1 18.5 13.9 Infrastructure Systems 11.8 9.7 Other 0.4 0.8 Retail 30.7 24.4 Autocentres 6.8 6.0 TOTAL 37.5 30.4 Notes: 1) Before capital contributions deferred over the period of the lease 2) FY15 capital expenditure represents the 53 weeks to 3 Apr
Slide 40: Capital expenditure FY14-FY16
Capital expenditure FY14-FY16 FY14 FY152 FY16 Total actual actual estimate estimate £m £m £m £m Store Portfolio1 13.9 18.5 Infrastructure Systems 9.7 11.8 Other 0.8 0.4 Retail 24.4 30.7 c. 45.0 c. 100.0 Autocentres 6.0 6.8 c. 8.0 c. 20.0 TOTAL 30.4 37.5 c. 53.0 c. 120.0 Notes: 1) Before capital cont
Slide 41: Retail Portfolio – FY15 space
Retail Portfolio – FY15 space 1 Average Average Average Total Trading Average Ground Lease-able Space, Mezzanine Floor Space2 including Trading Trading (sq.ft) Mezzanine Space (sq.ft) Space (sq.ft) (sq.ft) 9,121 8,120 6,429 3,092 Notes: 1) Excluding Cycle Republic 2) Ground floor only, including bac
Slide 42: Retail Portfolio – Lease Expiries
Retail Portfolio – Lease Expiries Expiries FY14 6 FY15 12 FY16 18 FY17 15 FY18 16 Total Expiries 67 Average remaining leases (total portfolio): 6.7 years 42
Slide 43: Autocentres Portfolio
Autocentres Portfolio Centres Acquired 223 FY11 230 FY12 250 FY13 283 FY14 303 FY15 305 Average remaining leases: 6.9 years 43
Slide 44: Forward-Looking Statements
Forward-Looking Statements INCLUDED IN THIS PRESENTATION ARE FORWARD-LOOKING MANAGEMENT COMMENTS AND OTHER STATEMENTS THAT REFLECT MANAGEMENT’S CURRENT OUTLOOK FOR FUTURE PERIODS These expectations are based on currently available competitive, financial, and economic data along with our current oper
Slide 45: Contact and Newsflow
Contact and Newsflow For further information, please go to www.halfordscompany.com or contact Adam Phillips Head of Investor Relations adam.phillips@halfords.co.uk Landline: +44 (0)1527 513 113 Mobile: +44 (0)7703 890142 Next newsflow: 15 July 2015: Q1 trading update 45