Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — FY2020 Earnings Presentation
40 slides from Jb Hi-fi's earnings presentation, Aug 17, 2020
Slide 1: JB Hi-Fi Limited FY20 Results Presentation
JB Hi-Fi Limited FY20 Results Presentation 15 17 AUGUST 2016 2020 PAGE 1
Slide 2: Agenda
Agenda ▪ Group overview ▪ JB HI-FI Australia and JB HI-FI New Zealand ▪ The Good Guys ▪ Group Balance Sheet and Cash Flow ▪ Group FY21 Trading Update ▪ Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB HI-FI LIMITED PAGE 2
Slide 3: Group Overview
Group Overview 15 17 AUGUST 2016 2020 PAGE 3
Slide 4: Group Model
Group Model Two iconic Australian retail brands Leading retailer of technology and Leading retailer of home appliances Product offering consumer electronics and consumer electronics Target customer base / Strong position with a young tech- Strong position with home-making demographic savvy demograph
Slide 5: Group Model: Unique competitive advantages
Group Model Underpinned by 5 unique competitive advantages Low Cost Quality Store Supplier Multichannel 1 Scale 2 Operating Model 3 Locations 4 Partnerships 5 Capability ▪ #1 player in Australian ▪ Low CODB relative to JB HI-FI ▪ Strong partnerships with all ▪ Integrated, high quality in- market wit
Slide 6: Group FY20 Performance
Group FY20 Performance FY20 Group Performance FY20 FY20 FY20 FY19 Growth AUD (Statutory) (Pre AASB 16) (Underlying) (Underlying) Total sales ($m) 7,918.9 7,918.9 7,918.9 7,095.3 823.6 11.6% ▲ Earnings before interest and tax ($m) 483.2 466.7 486.5 372.8 113.6 30.5% ▲ Net profit after tax ($m) 302.3
Slide 7: Group FY20 Performance: Divisional Performance
Group FY20 Performance FY20 Divisional Performance 1 FY20 FY19 Growth (Underlying) (Underlying) $m % Sales ($m) - JB HI-FI Australia 5,318.9 4,726.0 592.9 12.5% ▲ - JB HI-FI New Zealand (NZD) 222.8 236.2 (13.4) (5.7%) ▼ - The Good Guys 2,388.8 2,147.9 240.9 11.2% ▲ Total Sales (AUDm) 7,918.9 7,095.3
Slide 8: Group Highlights
Group Highlights Group FY20 Financial achievements1 Group Operational achievements ▪ Sales up 11.6% to $7.9 billion, with Australian sales ▪ The health, safety and wellbeing of our team members, accelerating from March as customers spent more time customers, business partners and the wider community
Slide 9: Generating sustainable long-term growth
Generating sustainable long-term growth In FY20, the Group adopted a Sustainability Policy outlining the Group’s commitment to having a positive impact on our people, our community and our environment and today released our first Sustainability Report. Sustainability Policy focus areas FY20 Achievem
Slide 10: Managing through Covid-19
Managing through Covid-19 The Group’s highest priority is the health, safety and wellbeing of our team members, customers, business partners and the wider community, whilst also responding to our customers’ changing needs and maintaining financial stability 1 Health & Safety 2 Responding & Adapting
Slide 11: JB HI-FI Australia and New Zealand
JB HI-FI Australia and New Zealand 15 17 AUGUST 2016 2020 PAGE 11
Slide 12: JB HI-FI Australia FY20 Performance
JB HI-FI Australia FY20 Performance 1 FY20 FY19 Growth AUD (Underlying) (Underlying) Sales ($m) 5,318.9 4,726.0 12.5% ▲ Gross Profit ($m) 1,169.0 1,046.2 11.7% ▲ Gross Margin (%) 21.98% 22.14% (16 bps) ▼ Cost of Doing Business (%) 14.09% ` 14.89% (80 bps) ▼ EBITDA ($m) 419.5 342.3 22.6% ▲ EBITDA Mar
Slide 13: JB HI-FI Australia FY20 Performance: Sales
JB HI-FI Australia FY20 Performance FY20 Sales ▪ Total sales grew by 12.5% to $5.32 billion, with comparable sales Sales Growth up 12.2%. Sales momentum was strong through the year and accelerated in Q4 as customers spent more time working, learning Total 31.4% 31.4% and seeking entertainment at hom
Slide 14: JB HI-FI Australia FY20 Performance: Earnings
JB HI-FI Australia FY20 Performance FY20 Earnings1 ▪ We are a sales led organisation with a focus on growing top line sales and Gross Profit gross profit dollars. FY20 gross profit increased by 11.7% to $1.17 billion whilst gross margin was down 16 bps at 22.0%, driven primarily by sales mix, as a r
Slide 15: JB HI-FI New Zealand Impairment
JB HI-FI New Zealand Impairment ▪ The Group is focussed on continuing to improve FY20 Impairment NZD $m performance in New Zealand however, as a result of Right of use asset (onerous lease) impairment 15.4 past performance and the ongoing uncertainty arising from the current environment, the Group F
Slide 16: JB HI-FI New Zealand FY20 Performance
JB HI-FI New Zealand FY20 Performance 1 FY20 FY19 Growth NZD (Underlying) (Underlying) Sales ($m) 222.8 236.2 (5.7%) ▼ Gross Profit ($m) 36.8 40.8 (9.8%) ▼ Gross Margin (%) 16.54% 17.29% (75 bps) ▼ Cost of Doing Business (%) 16.57% 16.71% (14 bps) ▼ EBITDA ($m) (0.1) 1.4 (105.3%) ▼ EBITDA Margin (%)
Slide 17: JB HI-FI New Zealand FY20 Performance: Sales and Earnings
JB HI-FI New Zealand FY20 Performance FY20 Sales Sales Growth ▪ Total sales were down 5.7% to NZD222.8 million, with comparable sales Total down 5.7%. Q4 sales were materially impacted by the temporary closures Comp 3.8% 3.8% of stores resulting from the New Zealand Government restrictions ▪ The key
Slide 18: JB HI-FI Australia and New Zealand Focus Areas
JB HI-FI Australia and New Zealand Focus Areas JB HI-FI continues to execute well, whilst positioning for future growth FY21 Focus Areas Covid-19 ▪ Continue to prioritise the safety of team members and customers through Covid-19 ▪ Continue to respond and adapt to our customers’ changing needs Sales
Slide 19: The Good Guys
The Good Guys 15 17 AUGUST 2016 2020 PAGE 19
Slide 20: The Good Guys FY20 Performance
The Good Guys FY20 Performance 1 FY20 FY19 Growth AUD (Underlying) (Underlying) Sales ($m) 2,388.8 2,147.9 11.2% ▲ Gross Profit ($m) 490.2 442.7 10.7% ▲ Gross Margin (%) 20.52% 20.61% (9 bps) ▼ Cost of Doing Business (%) 15.42% 16.63% (121 bps) ▼ EBITDA ($m) 121.8 85.5 42.4% ▲ EBITDA Margin (%) 5.10
Slide 21: The Good Guys FY20 Performance: Sales
The Good Guys FY20 Performance FY20 Sales Sales Growth ▪ Total sales grew by 11.2% to $2.39 billion, with comparable sales Total up 10.8%. Sales momentum improved through the year, and 30.2% 30.2% Comp accelerated in Q4 as customers spent more time working and learning at home as well as upgrading t
Slide 22: The Good Guys FY20 Performance: Earnings
The Good Guys FY20 Performance FY20 Earnings1 Gross Profit ▪ Gross profit was $490.2 million whilst gross margin was down 9 bps to 20.5%, with sales mix offsetting gross margin improvements ▪ CODB was 15.4%, down 121 bps, and in absolute terms grew $490m 3.2% as store wages remained well controlled
Slide 23: The Good Guys Focus Areas
The Good Guys Focus Areas The Good Guys continues to leverage its unique offer and capabilities with opportunities for improvement FY21 Focus Areas Covid-19 ▪ Continue to prioritise the safety of team members and customers through Covid-19 ▪ Continue to respond and adapt to our customers’ changing n
Slide 24: Group Balance Sheet and Cash Flow
Group Balance Sheet and Cash Flow 15 17 AUGUST 2016 2020 PAGE 24
Slide 25: Group Balance Sheet and Cash Flow
Group Balance Sheet and Cash Flow Group Balance Sheet Inventory Bridge – FY19 to FY20 $3.1m AUDm FY20 FY201 FY19 ($6.8m) (Statutory) (Pre AASB 16) (Pre AASB 16) ($143.6m) Cash 251.5 251.5 119.2 Receivables 220.3 220.3 254.4 Inventories 739.3 739.3 886.7 Other 34.7 34.8 34.6 $886.7m Total Current Ass
Slide 26: Group Cash Flow Statement and Performance Indicators
Group Balance Sheet and Cash Flow Group Cash Flow Statement Group Performance Indicators AUDm FY20 FY201 FY19 FY201 FY19 (Statutory) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Statutory EBITDA 717.9 526.6 429.1 Fixed Charge Ratio 3.4x 3.0x Change in Working Capital 402.1 406.7 (16.9) Interest Cover 4
Slide 27: Capital Management
Group Balance Sheet and Cash Flow Capital Management Final dividend up 76.5% to 90 cps ▪ The Board regularly reviews the Company’s capital structure Total dividend up 33.1% to 189 cps and believes the current dividend payout ratio of 65% appropriately balances the distribution of profit to sharehold
Slide 28: Impact of new lease accounting standard AASB 16 Leases
Group Balance Sheet and Cash Flow Impact of new lease accounting standard AASB 16 Leases AASB 16 Leases was adopted on 1 July 2019 and has significantly changed the FY20 reported results however has had no economic impact on the Group, its cashflows, debt covenants or shareholder value. The impact o
Slide 29: FY21 Trading Update
FY21 Trading Update 15 17 AUGUST 2016 2020 PAGE 29
Slide 30: Group FY21 Trading Update
Group FY21 Trading Update July 2020 sales update ▪ Total sales growth for JB HI-FI Australia was 42.1% (July 2019: 4.1%) with comparable sales growth of 44.2% (July 2019 : 3.2%) ▪ Total sales growth for JB HI-FI New Zealand was 9.1% (July 2019: -0.4%) with comparable sales growth of 9.1% (July 2019:
Slide 31: Investment Checklist
Investment Checklist 15 17 AUGUST 2016 2020 PAGE 31
Slide 32: Investment Checklist
Investment Checklist Unique and relevant brands Flexible business model – history of category growth and development Diversity of product categories across brands Scale operator, market leader Global best in class metrics including low cost of doing business and high sales per square metre
Slide 33: Appendices
Appendices 15 17 AUGUST 2016 2020 PAGE 33
Slide 34: Appendix I: Profit and Loss reconciliation
Appendix I a) Group Profit and Loss reconciliation to Pre application AASB 16 b) 5 year Group Profit and Loss and Underlying results AUDm FY20 AASB 16 FY20 NZ FY20 FY20 FY19 FY18 FY17.1 FY16 (Statutory) Impact (Pre AASB 16) Impairment (Underlying) (Underlying) Sales 7,918.9 - 7,918.9 - 7,918.9 7,918
Slide 35: Appendix I: Divisional EBITDA and EBIT reconciliation
Appendix I c) Divisional EBITDA and EBIT reconciliation to Pre application d) 5 year Divisional EBITDA and EBIT AASB 16 results and Underlying results AUDm FY20 AASB 16 FY20 NZ FY20 FY20 FY19 FY18 FY17.1 FY16 (Statutory) Impact (Pre AASB 16) Impairment (Underlying) (Underlying) EBITDA - JB HI-FI Aus
Slide 36: Appendix I: Group CODB reconciliation
Appendix I e) Group CODB reconciliation AUDm FY20 FY20 FY20 FY19 (Statutory) (Pre AASB 16) (Underlying) Other income (ex interest revenue) (2.5) (2.5) (2.5) (1.6) Sales and marketing expenses 786.4 786.4 786.4 731.0 Occupancy expenses 313.1 315.5 310.8 306.4 less depreciation, amortisation & impairm
Slide 37: Appendix I: Group Balance Sheet Reconciliation
Appendix I f) Group Balance Sheet Reconciliation to Pre application AASB 16 g) 5 year Group Balance Sheet results AUDm FY20 AASB 16 FY20 FY20 FY19 FY18 FY17 FY16 (Statutory) Impact (Pre AASB 16) (Pre AASB 16) Cash 251.5 - 251.5 251.5 119.2 72.0 72.8 51.9 Receivables 220.3 - 220.3 220.3 254.4 204.7 1
Slide 38: Appendix I: Group Cash Flow Reconciliation
Appendix I h) Group Cash Flow Reconciliation to Pre application AASB 16 i) 5 year Group Cash Flow results AUDm FY20 AASB 16 FY20 FY20 FY19 FY18 FY17 FY16 (Statutory) Impact (Pre AASB 16) (Pre AASB 16) Statutory EBITDA 717.9 (191.3) 526.6 526.6 429.1 411.7 337.9 262.1 Change in Working Capital 402.1
Slide 39: Appendix II: Group Profit and Loss Breakdown
Appendix II Group Profit and Loss – Breakdown1 FY201 (Underlying) FY19 Growth JB HI-FI JB HI-FI JB HI-FI JB HI-FI (Underlying) TGG Group TGG Group AUDm AUST NZ (NZD) AUST NZ (NZD) Sales 5,318.9 222.8 2,388.8 7,918.9 4,726.0 236.2 2,147.9 7,095.3 11.6% ▲ Gross Profit 1,169.0 36.8 490.2 1,694.1 1,046.
Slide 40: Appendix III: Stores across Australia and New Zealand
Appendix III 1 314 stores across Australia and New Zealand Group store reconciliation FY20 FY19 Opened Converted Closed Total Australia 1 JB HI-FI 138 2 - (4) 136 JB HI-FI HOME 58 1 - - 59 2 196 3 - (4) 195 23 New Zealand 14 39 JB HI-FI 14 - - - 14 JB HI-FI HOME - - - - - 22 14 - - - 14 5 JB HI-FI T