Slide 1: Next Plc Results Half Year Ended July 2009
NEXT PLC RESULTS HALF YEAR ENDED JULY 2009
Slide 2: Outlook
OUTLOOK CONSUMER ENVIRONMENT NET MARGINS 2010
Slide 3: Investing in the Brand
INVESTING IN THE BRAND PRODUCT STORE DEVELOPMENT MARKETING WEB DEVELOPMENT
Slide 4: Income Statement
Income Statement £m 2009 2008 Revenue 1,512.3 1,501.0 Operating profit 199.5 197.9 Interest (14.0) (24.4) Profit before tax 185.5 173.5 +6.9% Taxation (53.8) (50.3) Profit after tax 131.7 123.2 EPS 68.2p 63.4p +7.6% Interim dividend 19.0p 18.0p +5.6%
Slide 5: Balance Sheet
Balance Sheet £m 2009 2008 Fixed assets 600 636 Goodwill & Intangibles 55 38 Stocks 326 291 Debtors 575 570 Creditors (863) (781) Pension fund deficit (56) (75) Net debt (514) (755) Net assets / (liabilities) 123 (76)
Slide 6: Balance Sheet and Directory Debtors
Balance Sheet £m 2009 2008 Fixed assets 600 636 Goodwill & Intangibles 55 38 Stocks 326 291 Debtors 575 570 +1% Directory Debtors July 2009 July 2008 +2.9% £434m £422m July 2009 July 2008 Sales +1.7% Sales
Slide 7: July 2009 Net Debt £514m
July 2009 Net Debt £514m £150m 2010 Bank £295m 2013 Bank Forecast Peak £600m £283m 2013 Bond Not more than January 2010(e) £450m £250m 2016 Bond Net Debt Facilities £978m
Slide 8: Cash Flow
Cash Flow £m 2009 2008 Profit before tax 185 173 Depreciation / Disposals 62 60 Capital expenditure (46) (82) Working capital / Other 28 21 Dividends paid (71) (72) Tax paid (44) (63) Share buybacks (0) (52) Net cash flow 114 (15)
Slide 9: Cash Flow and Capital Expenditure
Cash Flow £m 2009 2008 Profit before tax 185 173 Depreciation / Disposals 62 60 Capital expenditure (46) (82) £95m £17m £80m Warehouse/other £12m £21m Store Refits £21m New Stores £57m £47m Jan 10(e) Jan 10(e) September March
Slide 10: Retail
= RETAIL 3 \ 7 2 > ( ae <a j | a = =a ‘ an —— — 1 4 ~<J : : te, J i ' : ey — 3 . hs , | f | = 4 5 a | AN a a al . = a Te ~
Slide 11: Retail: Sales Analysis
Retail : Sales Analysis £m 2009 2008 Revenue 1,004.3 996.4 + 0.8% Sales Analysis Total Net sales from new space + 3.3% Underlying LFL - 2.5% Total Sales + 0.8%
Slide 12: Retail: Sales Analysis
Retail : Sales Analysis £m 2009 2008 Revenue 1,004.3 996.4 + 0.8% Sales Analysis Total Full Price Net sales from new space + 3.3% + 3.2% Underlying LFL - 2.5% - 1.2% Total Sales + 0.8% + 2.0%
Slide 13: Retail: Profit Analysis
Retail : Profit Analysis £m 2009 2008 Revenue 1,004.3 996.4 + 0.8% Operating profit 112.3 107.6 + 4.4% % to revenue 11.2% 10.8% Margin Movement Achieved gross margin + 0.8% Bought in margin - 0.2% Markdowns + 1.0%
Slide 14: Retail: Profit Analysis
Retail : Profit Analysis £m 2009 2008 Revenue 1,004.3 996.4 + 0.8% Operating profit 112.3 107.6 + 4.4% % to revenue 11.2% 10.8% Margin Movement Achieved gross margin + 0.8% Occupancy - 0.4% Rent/Rates - 0.5% Depreciation - 0.2% Utilities/Other + 0.3%
Slide 15: Retail: Profit Analysis
Retail : Profit Analysis £m 2009 2008 Revenue 1,004.3 996.4 + 0.8% Operating profit 112.3 107.6 + 4.4% % to revenue 11.2% 10.8% Margin Movement Achieved gross margin + 0.8% Occupancy - 0.4% Branch payroll 0.0% Warehouse & distribution + 0.5% Other overheads - 0.5%
Slide 16: Retail: Space Expansion
Retail : Space Expansion Stores Sq Ft (000‟s) January 2009 510 5,506 New 8 58 Re-sites (4) - 26 Closed (3) (15) July 2009 515 5,575 + 5.1% Increase on July 2008 New Store Appraisal Net branch contribution 18% Payback 18 months Performance vs target + 1%
Slide 17: Retail: Space Expansion
Retail : Space Expansion Stores Sq Ft (000‟s) January 2009 510 5,506 Retail 8 178 Home 11 126 January 2010(e) 529 5,810 + 5.5%
Slide 18: Home Stand Alone Stores
Home Stand Alone Stores Out of town stores Jan 09 Jan 10(e) Number of stores 9 20 Turnover £35m £66m Sq. Ft. 123k 249k Net store contribution 23% 20% Payback (months) 18 18
Slide 19: Directory
DIRECTORY
Slide 20: Directory: Sales Analysis
Directory : Sales Analysis £m 2009 2008 Revenue 386.2 379.9 + 1.7% Sales Drivers 2009 2008 Active customers 2.26m 2.19m + 2.8% Printed pages 1,998 1,976 + 1.1%
Slide 21: Directory: Profit Analysis
Directory : Profit Analysis £m 2009 2008 Revenue 386.2 379.9 + 1.7% Operating profit 83.3 78.4 + 6.4% % to revenue 21.6% 20.6% Margin Movement Achieved gross margin + 0.5% Bought in margin - 0.9% Markdowns + 1.4%
Slide 22: Directory: Profit Analysis
Directory : Profit Analysis £m 2009 2008 Revenue 386.2 379.9 + 1.7% Operating profit 83.3 78.4 + 6.4% % to revenue 21.6% 20.6% Margin Movement Achieved gross margin + 0.5% Warehouse & distribution + 1.2% Creation - 0.4% Other overheads - 0.3%
Slide 23: International
International £m 2009 2008 Revenue 30.0 29.5 + 1.7% Operating profit 3.1 3.4 - 8.7% % to revenue 10.4% 11.6% • Franchise partner local sales - 3.3% • AW09 new stores in Scandinavia & Germany • Full year profit circa £7m
Slide 24: Sourcing
Sourcing £m 2009 2008 Intra-group sales 250.3 238.2 + 5.1% Operating profit 16.2 10.4 + 55.5% FX translation £3m Costs down £3m Full year profit circa £37m
Slide 25: Ventura
Ventura £m 2009 2008 Revenue 72.2 87.5 - 17.5% Operating profit 2.1 3.5 - 39.8% % to revenue 2.9% 4.0% Activity down as forecast Profit ahead of expectations Full year profit circa £6m to £7m
Slide 26: Other / IFRS FX
Other / IFRS FX £m 2009 2008 Property 0.1 1.9 Associates inc. Lipsy (0.4) 0.2 Pensions - 0.6 Group / Options (7.6) (6.8) Unrealised FX (9.6) (1.3) Total (17.5) (5.4)
Slide 27: Outlook
OUTLOOK CONSUMER ENVIRONMENT NET MARGINS 2010
Slide 28: Consumer Environment: January 2009 Anxious
Consumer Environment JANUARY 2009 : ANXIOUS
Slide 29: Consumer Environment: September 2009 Cautious
Consumer Environment SEPTEMBER 2009 : CAUTIOUS Mortgages - remain cheap Inflation - under control Employment - down circa 2%1 Savings Ratios - up 1 Source: Labour Force Survey (SA)
Slide 30: Sales Outlook for 2nd Half
Sales Outlook for 2nd Half Retail LFL Directory - 6.5% to - 3.5% 0.0% to + 2.0% (Including new space) Total Brand - 2.3% to + 0.5%
Slide 31: Full Year Retail Margin Movement
Full Year Retail Margin Movement Est. Mar‟09 Est. Sept‟09 2009 2009 2008 9% 10% 11% 12% 13% BOUGHT IN GM MARKDOWNS OCCUPANCY PAYROLL OVERHEADS COST SAVINGS 9% 10% 11% 12% 13%
Slide 32: Full Year Directory Margin Movement
Full Year Directory Margin Movement Est. Mar‟09 Est. Sept‟09 2009 2009 2008 16% 17% 18% 19% 20% BOUGHT IN GM MARKDOWNS BAD DEBT & SERVICE CHARGE OTHER OVERHEADS WAREHOUSE & LOGISTICS 16% 17% 18% 19% 20%
Slide 33: Gross Margin Movement
Gross Margin Movement EFFECT ON BRAND MARGIN AW09 SS09 Theoretical FX impact - 6.9% - 3.5% VAT reduction + 0.3% + 0.6% Better sourcing + 6.0% + 2.5% Net margin change - 0.6 % - 0.4% Average selling price* - 0.2% + 2.4% * Excludes Home
Slide 34: Consumer Environment 2010
Consumer Environment 2010 next = 4 ae
Slide 35: 2010: Still Cautious
Consumer Environment 2010 2010 : STILL CAUTIOUS PUBLIC SECTOR DEFICIT Tax rises? Job cuts?
Slide 36: Investing in the Brand
INVESTING IN THE BRAND PRODUCT STORE DEVELOPMENT MARKETING WEB DEVELOPMENT
Slide 37: Investing in the Brand: Product
Investing in the Brand : Product
Slide 38: Pushing the Boundaries
Pushing the Boundaries
Slide 39: Pushing the Boundaries
Pushing the Boundaries
Slide 40: Improved Price Starters
Improved Price Starters
Slide 41: Improved Price Starters
Improved Price Starters next
Slide 42: Improved Price Starters
Improved Price Starters
Slide 43: New Products at Great Prices
New Products at Great Prices £35 BEDDING TWIN PACK £349
Slide 44: Investing in the Brand: Store Development
INVESTING IN THE BRAND STORE DEVELOPMENT
Slide 45: Slide 45
Slide 46: Store Development: Architectural Detail
Store Development ARCHITECTURAL DETAIL
Slide 47: Store Development: Heritage Panels
Store Development „HERITAGE‟ PANELS
Slide 48: Store Development: New Denim Departments
Store Development NEW DENIM DEPARTMENTS
Slide 49: Store Development
Store own ee the SHOE: room seer t
Slide 50: Store Development
Store Development GATESHEAD LEICESTER PLYMOUTH FOSSE PARK THURROCK JERSEY BLUEWATER DUBLIN CARDIFF ABERDEEN LEEDS NORTHAMPTON GLASGOW BARNSLEY
Slide 51: 85% of Portfolio New, Refitted or Redecorated
Store Development 85% OF PORTFOLIO NEW, REFITTED OR REDECORATED
Slide 52: Investing in the Brand: Marketing
INVESTING IN THE BRAND MARKETING
Slide 53: Press Advertising AW09
Press Advertising AW09 AUTUMN WINTER ADVERTISING SPEND MAINTAINED
Slide 54: Vogue Editorial AW09
Vogue Editorial AW09 Next SSse tial coats, and knits . wellbeing Feel good tips and tricks
Slide 55: Editorial Content SS09
Editorial Content SS09 +30% v LY
Slide 56: Investing in the Brand: TV Advertising
INVESTING IN THE BRAND TV ADVERTISING
Slide 57: Autumn TV Ad
Autumn TV Ad <5!
Slide 58: Investing in the Brand: Web Development
INVESTING IN THE BRAND WEB DEVELOPMENT
Slide 59: Search Redesign
Chosen Options f Women Men | Children | Fashion Brands Spo} Search Next.. jes Select Colour: Chosen Options Srey (5 Nhite (1 Select Length: View > 5 a £2 - a Select Waist: Select Waist: aay oy A \ Highwaist {6 Select Wash: ‘J Select Wash: Select Fit: ie r = E : View > = View > View > £22 Rinse B £48
Slide 60: Search Redesign
Search Redesign Search traffic + 53% 40% of purchases via search Peak 1.3m searches in one day
Slide 61: 360º Product View
Next f | Women | Men Children O ITEMS - £0.00 HOME | MY ACCOUNT | FIND A sTorE | HELP | [I (> Searcu VIEW BAG 1: CHECKOUT Fashion Brands | Sport & Leisure | Home & Furniture | Electricals Flowers & Wine | Quickshop Purple Suede Hid Platform Court Sho £35 Almond Toe Shoes £35 > ADD TO BAG Heel height
Slide 62: Social Media
Social Media Nexe FOLLOW US... FOLLOW US @ | FOLLOW US Sif FOR THE LATEST
Slide 63: Widescreen Launches Nov '09
Widescreen Launches Nov‟09 800 PIXELS 1024 PIXELS
Slide 64: Europe & Overseas
Europe & Overseas Delivery to 18 countries Delivery in 7-10 days for €5 Sales less than £3m German language site soon
Slide 65: US Site Launched September 2009
US Site Launched September 2009 Delivery in 10-14 days for $10
Slide 66: Summary
Summary Successful First Half Economy “Overcast” Resilient Strategy Plan for negative LFL‟s Control costs and stock Invest in the brand Open new space Develop online business