Slide 1: Preliminary Results 2014
Preliminary Results 2014
Slide 2: Introduction, Financial Performance, Trading and Strategy
Introduction Financial Performance Andrew Findlay Trading and Strategy Matt Davies Questions
Slide 3: Andrew Findlay, Chief Financial Officer
Andrew Findlay Chief Financial Officer
Slide 4: Financial Highlights
Financial Highlights Group Revenue up 7.9% to £939.7m Retail Gross Margin of 51.8%, down 144bps in line with guidance Profit Before Tax up 1.1% to £72.8m Basic Earnings Per Share up 4.0% to 28.8p Net Debt down at £99.6m Free Cashflow of £39.5m, after a one-off tax settlement of £21.0m Final Dividend
Slide 5: Retail LfLs (%)
Retail LfLs (%) Notes: Q3 in FY12, FY13 and FY14 shown as 15-week periods. Q4 in FY12, FY13 and FY14 shown as 11-week periods 5
Slide 6: FY14 Retail Revenues
FY14 Retail Revenues Total Retail LFL % Cycling +19.4 Car Maintenance +4.9 Car Enhancement -0.1 Travel Solutions +2.1 Total +7.6 Proportion of Online Proportion of Total Total Revenue Online Retail Retail Sales Retail Sales Growth % % % Home Delivery 11.8 1.3 +11.2 Click & Collect 88.2 10.0 +18.6 To
Slide 7: Retail Performance
Retail Performance FY14 FY13 Change £m £m Revenue 803.1 745.5 +7.7% Gross Profit 416.2 397.0 +4.8% Gross Margin 51.8% 53.3% -144bps Operating Costs (341.0) (323.4) +5.4% EBIT 75.2 73.6 +2.2% EBIT Margin 9.4% 9.9% EBITDA 93.6 94.6 -1.1% EBITDA Margin 11.7% 12.7% 7 Notes: All numbers shown are before
Slide 8: Gross Margin % Influences
Gross Margin % Influences The Strong Growth Of Cycling In-store Services The Launch Of PACs Promoting More Effectively The Strength of Car Clearance Maintenance Approach 8
Slide 9: Retail Operating Costs
Retail Operating Costs FY14 FY13 Change £m £m Store Staffing 92.4 85.1 +8.6% Store Occupancy 139.7 140.1 -0.3% Warehouse & Distribution 33.7 28.5 +18.2% Support Costs 75.2 69.7 +7.9% Total 341.0 323.4 +5.4% Depreciation/Amortisation/Impairment 18.8 21.8 9 Notes: All numbers shown are before non-recu
Slide 10: Autocentres Performance
Autocentres Performance FY14 FY13 Change £m £m Revenue 136.6 125.8 +8.6% Gross Profit 88.0 80.1 +9.9% Gross Margin 64.4% 63.7% +78bps Core Centres (57.9) (56.9) +1.8% New Centres (19.4) (11.3) +71.7% Operating Costs Support (6.4) (5.6) +12.5% Total (83.7) (73.8) +13.4% EBIT 4.3 6.3 -31.7% EBIT Margi
Slide 11: Cashflow and Net Debt
Cashflow and Net Debt OPERATING CASHFLOW £m FREE CASHFLOW £m NET DEBT £m EBIT 77.8 Operating Cashflow 106.8 Opening Net Debt (110.6) Depreciation/ Amortisation/ 25.4 Capital Expenditure (26.7) Free Cashflow 39.5 Loss On Disposal Employee Share Scheme 1.0 Net Finance Costs (6.7) Dividends (27.7) Work
Slide 12: FY15 Guidance
FY15 Guidance Retail Gross Margin A decline of 25-75bps Retail Operating Costs 4-5% Retail Capital Expenditure c.£35m Autocentres EBITDA Up on FY14 Autocentres Capital Expenditure c.£8m Net Finance Costs Down on FY14 Effective Tax Rate 21-22% 12 Notes: All numbers shown are before non-recurring item
Slide 13: Summary
Summary Financial Performance A significant top-line performance from Retail Retail gross margins in line with guidance Enhanced investment in Retail and Autocentres Strong cash generation and reducing Net Debt to EBITDA c.2x dividend cover over the medium term 13
Slide 14: Matt Davies, Chief Executive
Hoplite Matt Davies Chief Executive
Slide 15: Our Retail Sales Performance
Our Retail Sales Performance Cycling 12% 33% Car Maintenance 23% Car Enhancement 32% Travel Solutions Product Availability An Improving Omnichannel Offer Favourable Conditions Our Colleagues 15
Slide 16: Some Retail Successes…
Some Retail Successes… Online Sales (£m) 3Bs Jobs (m) 90.9 2.9 2.6 77.2 FY13 FY14 FY13 FY14 Cycle Repair Sales (£m) Total Service Income (£m) 7.5 6.1 16
Slide 17: Getting Into Gear
Halfords Explained Getting Into Gear Helping and Inspiring Customers with their Life on the Move 17
Slide 18: 3Bs Centres: at the core of Car Maintenance
3Bs Centres: at the core of Car Maintenance A Focus On Workshop Increasingly Compelling Promotions Car Parts Direct: 130,000 SKUs 18
Slide 19: Early Success In PACs
Early Success In PACs Capability To Drive Growth Range Refreshes: Boardman And Apollo Capturing Opportunities In Key Markets Cycle Repair: A Changing Approach 19
Slide 20: cyclists of
cyclists of every age = halfords drivin Stop line 20
Slide 21: cyclists of
oe) cyclists of every age = halfords drivin Stop line 21
Slide 22: Our Major Cycle Brands
Our Major Cycle Brands Two Years Ago Today 22
Slide 23: Roof Storage: Single Pricing
Roof Storage: Single Pricing Impulse Promotions Camping : A Focus on Families And Festivals 23
Slide 24: Community Engagement
Community Engagement Over 20,000 Children Attended A Kids Bike Workshop In FY14 Great Links With The Scouts, Cubs And UK Youth Over 10,000 Bikes To Africa Generating £1.5m In New Sales 24
Slide 25: the 'h' driving factor topline
the ‘h’ driving factor topline
Slide 26: Retail Colleagues
Retail Colleagues % Full Time 10,000 30% 9,000 25% FY13 FY14 FY13 FY14 Weekly Contract Hrs Colleague Age 22 29 17 27 FY13 FY14 FY13 FY14 26
Slide 27: Around 80 Stores Refreshed by March 2015
Around 80 Stores Refreshed by March 2015 A Significant Change Programme With Material Levels Of Disruption Refreshes Will Comprise A Range Of Models 27
Slide 28: New Leadership In Supply Chain
New Leadership In Supply Chain Out-Of-Hours Deliveries Trialling More-Frequent Delivery To Stores 6pm Cut-Off For Next Day Delivery Supply Review: Underpinning Our Offer 28
Slide 29: A Step Change In Capability
A Step Change In Capability Technology To Improve Our Service Offer FY14: Fixing The Basics SAP Upgrade Complete: Optimisation Key To Unlocking Opportunities 29
Slide 30: Phase One: Complete, Further Upgrades In FY15
Phase One: Complete Further Upgrades In FY15 Mobile/Tablet Orders Up 95% 38% Of Orders Vs 24% Last Year Checkout completion up c.9% Conversion up c.20% 30
Slide 31: Milestones: Colleagues
Milestones: Colleagues FY14 FY14 FY15 FY16 Target Achieved Target Target 50% of 80% of All qualifying colleagues colleagues colleagues through through through G1 G2 G2 3-Gears Two G3 colleagues per store Reduce % Of Colleagues <12.5% <10% Leaving Within 3 Months Colleague Engagement >85% 31
Slide 32: Milestones: Operational
Milestones: Operational FY14 FY14 FY15 FY16 Target Achieved Target Target 10-15 10-15 Autocentres Opened 20-30 23 (revised) (revised) Launch PACs Annual PACs Sales Growth 20% 20% Cycle Repair Sales Growth 25% 29% 25% 25% Improved Cycle Departments 100 100 180 180 Stores In A Refreshed Format 10-15 2
Slide 33: Milestones: Customers
Milestones: Customers FY14 FY14 FY15 FY16 Target Achieved Target Target >75% >75% Retail Net Promoter Score >60% 72% (revised) (revised) Majority of Stores working stock 25% 33% stores outside peak trading hours 33
Slide 34: Autocentres
Autocentres H2 Initiatives Driving The FY15 Focus Leveraging The Relationship With Retail New Leadership For The Business 34
Slide 35: Autocentres
Autocentres Addressing Significant Opportunities, Such As Female Motorists Focusing On Quality New Centres Incremental Investment Required To Underpin The Strategy 35
Slide 36: Summary
Summary A Good Year But Early Days Encouraging Signs From Our Strategy Specialist Credentials: The Core Of Our Identity Growth Earlier Than Anticipated 36
Slide 37: Preliminary Results 2014
Preliminary Results 2014
Slide 38: Appendices
driving Appendices
Slide 39: Group Income Statement
Group Income Statement FY14 FY13 Change £m £m Revenue 939.7 871.3 +7.9% Gross Profit 504.2 477.1 +5.7% Operating Costs 426.4 399.0 +6.9% EBIT 77.8 78.1 -0.4% EBIT Margin % 8.3% 9.0% -68bps EBITDA 101.1 103.4 -2.3% EBITDA Margin % 10.8% 11.9% -106bps Net Finance Costs (5.0) (6.1) -18.0% PROFIT BEFORE
Slide 40: Group Components
Group Components Retail Autocentres Amortisation Group FY14 £m £m £m £m Revenue 803.1 136.6 - 939.7 Gross Profit 416.2 88.0 - 504.2 Operating Costs (341.0) (83.7) (1.7) (426.4) EBIT 75.2 4.3 (1.7) 77.8 EBITDA 93.6 7.5 - 101.1 Retail Autocentres Amortisation Group FY13 £m £m £m £m Revenue 745.5 125.8
Slide 41: Group Balance Sheet
Group Balance Sheet FY14 FY13 YOY Change £m £m £m Goodwill and Intangible Assets 342.2 342.2 - - Property, Plant & Equipment 95.2 90.6 +4.6 +5.1% Derivative Financial Instruments (2.1) 1.7 -3.8 -223.5% Net Working Capital 36.9 42.1 -5.2 -12.4% Net Debt (99.6) (110.6) +11.0 -9.9% Other Creditors (46.
Slide 42: Capital Expenditure
Capital Expenditure FY14 FY13 £m £m Store Portfolio1 13.9 5.8 Infrastructure Systems 9.7 5.0 Other 0.8 2.4 Retail 24.4 13.2 Autocentres 6.0 5.6 TOTAL 30.4 18.8 Notes: 1) Before capital contributions deferred over the period of the lease 42
Slide 43: Retail Portfolio – FY14 Space
Retail Portfolio – FY14 Space Average Total Average Average Average Ground Trading Space, Mezzanine Leaseable Floor Trading including Trading Space Space1 (sq.ft) Space (sq.ft) Mezzanine (sq.ft) (sq.ft) 9,174 8,122 6,499 3,051 Notes: 1) Ground floor only, including back of house 43
Slide 44: Retail Portfolio – Lease Expiries
Retail Portfolio – Lease Expiries Expiries FY15 22 FY16 24 FY17 18 FY18 16 Total Expiries 80 Average remaining leases (total portfolio): 6.8 years 44
Slide 45: Autocentres Portfolio
Autocentres Portfolio Centres Acquired 223 FY11 230 FY12 250 FY13 283 FY14 303 Average remaining leases: 7.7 years 45
Slide 46: Contact and Newsflow
Contact and Newsflow For further information, please go to ww.halfordscompany.com or contact Craig Marks Head of Investor Relations & Corporate Communications craig.marks@halfords.co.uk Landline: +44 (0)1527 513 113 Mobile: +44 (0)7712 888 807 Next newsflow: 10 July: Q1 Interim Management Statement
Slide 47: 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