Slide 1: Preliminary Results 52 Weeks to 28 March 2008
Preliminary Results 52 Weeks to 28 March 2008 City Presentation Centre 5 June 2008
Slide 2: Richard Pym, Chairman
Richard Pym Chairman
Slide 3: Highlights
Highlights Strong set of results building on consistent, well executed strategy z Financial Sales £797.4m (2007: £744.0m); Growth +7.2%; LFL +4.3% Profit before tax £90.2m (2007: £83.5m1) Basic EPS 29.3p (2007:26.6p1) The Board is recommending a final dividend of 10.35p, making a total divid
Slide 4: Nick Wharton, Finance Director
Nick Wharton Finance Director
Slide 5: Financial Highlights
Financial Highlights z Sales £797.4m (2007: £744.0m) z Gross and operating margins maintained z Operating profit £101.0m (2007: £93.5m) z Profit before tax £90.2m (2007: £83.5m1) z Basic EPS 29.3p (2007: 26.6p1) z Share buy back: 9.5m shares acquired, during the year, at a cost of £30.3m (319.6 penc
Slide 6: Profit and Loss Account
Profit and Loss Account 2007/08 2006/07 Growth £m £m % Revenue 797.4 744.0 +7.2% Gross profit 402.5 376.1 +7.0% Gross profit % 50.5% 50.6% -10bps Net operating expenses (301.5) (282.6) +6.7% Operating profit 101.0 93.5 +8.0% Net finance costs1 (10.8) (10.0)1 +8.0% Profit before tax 90.2 83.5 +8.0% B
Slide 7: Sales Growth
Sales Growth 2007/08 2006/07 No. of Easters - 2 No. of Easters -1 % % Like-for-like sales growth 4.0 5.3 Non comparable Easters 0.3 0.7 Net new space 2.9 3.1 Total sales growth 7.2 9.1 Easter adjusted like-for-like comparatives: 800 797 Two decades of uninterrupted 682 744 700 organic sales growth 6
Slide 8: Net Operating Expenses
Net Operating Expenses % £m Revenue 2006/07 operating costs 282.6 38.0% 2007/08 non comparables1 (0.4) Space increase 7.8 z Reduction in underlying cost inflation Underlying cost inflation (4.1%) 11.5 (2007: 4.8%) 2007/08 operating costs 301.5 37.8% z Underlying store payroll productivity improvemen
Slide 9: Balance Sheet
Balance Sheet 2007/08 2006/07 £m £m Growth Goodwill and intangible assets 256.8 257.8 -0.4% Property, plant and equipment 116.2 107.5 +8.1% Derivative financial instruments 1.6 (1.0) - Net working capital1 57.6 45.7 +26.0% Net debt (181.7) (180.0) -0.9% Creditors > 1 year (28.8) (26.9) -7.1% Net ass
Slide 10: Capital Expenditure Summary
Capital Expenditure Summary 2007/08 2006/07 £m £m New stores and re-sites 12.1 11.3 Store conversions 1.8 2.3 Czech Republic 1.5 0.4 Total portfolio 15.4 14.0 Head office systems (incl. Web) 5.5 2.2 Store systems 6.3 4.2 Supply chain 0.7 0.5 Other 1.6 2.6 Total capital expenditure 29.5 23.5 z Record
Slide 11: Cash Flow and Net Debt
Cash Flow and Net Debt Operating cash flow Free cash flow Net debt1 £m £m £m Operating profit 101.0 Op. cash flow 111.6 Net debt 31.03.07 (180.0) Depreciation/Amortisation 21.4 Net finance cost (9.4) Free cash flow 40.2 Employee share scheme 1.0 Taxation (27.1) Share buyback (30.9) Fixed asset write
Slide 12: Debt Structure & Profile
Debt Structure & Profile Debt Structure z £180m 5 year term loan, repayment July 2011 z £120m revolving credit facility. z Coterminous £70m interest rate swap Net Debt FY06 - FY08 FY06 H1 FY07 FY07 H1 FY08 FY08 200,000 Debt Profile 180,000 z Statutory half / full year represents peak 160,000 £000 14
Slide 13: Overview: Halfords' platform for future growth
Overview Halfords’ platform for future growth Trading Momentum Maintained z Sales and market share growth in each category z Resilient business model evidenced z Scale and service advantage z Gross and Operating Margins maintained Execute Strategic growth plan Investing in the store portfolio Le
Slide 14: Investing in the Store Portfolio
Investing in the Store Portfolio z 450 stores now trading: Store Portfolio and Total Retail Space 390 superstores 31 metros 4 50 400 3800000 3 70 0 0 0 0 3 50 3600000 Square Footage 300 3 50 0 0 0 0 Number 24 neighbourhoods 5 Bikehuts 2 50 200 3400000 3300000 150 10 0 3200000 z Format options in pla
Slide 15: Investing in the Store Portfolio: Superstores and Neighbourhood
Investing in the Store Portfolio Superstores Retail Park Participation: Planning Consent z Format of choice 22 357 z 390 stores, 231 with mezzanine 42 175 162 z Premium location (217 on A1 parks) presents 0 50 100 150 200 250 300 350 400 portfolio opportunity Number of Stores z Opportunity for over
Slide 16: Investing in the Store Portfolio: Central European Development
Investing in the Store Portfolio Central European Development z Initial three store pilot on track z Encouraging performance Strong consumer acceptance Sales levels and mix positive ¾ Cycling/Car Maintenance performing strongly ¾ Garage utilisation ahead of expectation ¾ Technology participation
Slide 17: Investing in the Store Portfolio: Stand Alone Bikehut
Investing in the Store Portfolio Stand Alone Bikehut Second Bikehut: Putney z Pilot scale achieved z Growing credibility/reputation Exclusive products; Condor, Rocky Mountain, Boardman and Animal Service/repair offer taking local market share Strong accessories mix z Operating performance in l
Slide 18: Paul McClenaghan, Director of Trading
Paul McClenaghan Director of Trading
Slide 19: Overview: Halfords' platform for future growth
Overview Halfords’ platform for future growth Trading Momentum z Sales and market share growth in each category z Resilient business model evidenced z Scale and service advantage z Financially strong: Gross and Operating Margins maintained Execute Strategic growth plan Investing in the store portf
Slide 20: Leveraging the Halfords Brand: Car Maintenance
Leveraging the Halfords Brand Automotive Car Maintenance z Remain the No. 1 retailer of car parts z Fastest growing category in 2007/08 z High margin, needs driven product z Promotional focus targets higher retail conversion z Successful new ranging z Car specific ranging supports our competitive ad
Slide 21: Leveraging the Halfords Brand: Car Enhancement
Leveraging the Halfords Brand Automotive Car Enhancement z Remain No. 1 retailer of in-car technology z Continued growth in own-brand electronics z Sat-Nav remains positive z Launched new Navsure in-dash Sat-Nav z Underpinned by fitting capability z Strong performance from MP3/iPod and mobile phone
Slide 22: Leveraging the Halfords Brand: Travel Solutions & Camping
Leveraging the Halfords Brand Leisure Travel Solutions & Camping z No.1 in Travel and Touring z Our best ever Leisure season z Successful sub-shop introduction z Opportunity for further growth in camping z New premium camping brand drives increased ATV z New ranges and packaging improves sales and A
Slide 23: Leveraging the Halfords Brand: Cycling
Leveraging the Halfords Brand Leisure Cycling z No.1 retailer of cycles z Apollo remains UK no.1 bike brand z Carrera remains UK’s no.1 premium bike brand - new ranges introduced including Carbon and Kids. z New “safest ever” kids range and merchandising proved successful at Christmas z Strong perfo
Slide 24: Multi-channel
Multi-channel z Strong year for multi-channel z Visitors up over 60%, transactions up 250% z Halfords ranked No.1 Sport and Fitness website1 z Reserve and Collect launched prior to Christmas and now nationwide – 200,000 orders to date z 4 ways to shop – Catalogue introduction in 2008 z More sites to
Slide 25: Marketing the Service Advantage
Marketing the Service Advantage Unique Service Proposition z wefit re-branding now complete z Over 1.3m fitting jobs carried out z Continued momentum in wefit and werepair jobs, +13% year on year z Colleagues trained to high standard: 800 trained in cycle repair 2,000 accredited to fit child sea
Slide 26: Marketing the Service Advantage: Marketing
Marketing the Service Advantage Marketing In-store z New environment implemented Sub-shops created across the sales floor Introduction of navigational signage Promotional stand out improved New seasonal space format successful Advertising z “Ready to go” TV campaign successful z Services ide
Slide 27: Marketing the Service Advantage: Key Sponsorship
Marketing the Service Advantage Key Sponsorship Cycling z GB cycling - First Commercial Sponsor z Team Halfords Bikehut ride Boardman bikes z Tour de France ITV1 sponsorship Motoring z British Touring cars team sponsor z “Dave” motoring sponsorship 27 Halfords Group plc Preliminary Results – 5 June
Slide 28: Supply Chain Development
Supply Chain Development Far East Direct Sourcing z Penetration continues to improve z Introduced additional buying office in Shanghai z Strong Far East expertise in the UK Camping over 90% Far East sourced Cycles over 70% Far East sourced z Own brand development in electronics proving successfu
Slide 29: Developing a Platform for Growth
Developing a Platform for Growth Building Growth on a Solid and Robust Foundation z Resilient and defensive business model z Margin stabilised z Growth driven across product range z Potential to exploit further growth opportunities z Confidence in future prospects 29 Halfords Group plc Preliminary R
Slide 30: Appendix
Appendix z Portfolio by Store Type 30 Halfords Group plc Preliminary Results – 5 June 2008
Slide 31: Portfolio By Store Type
Portfolio By Store Type Retail Space 3,767,828 ft2 Mezzanine Flat Neighborhood Metro Bikehut Total SM/M F N Me BH Opening Number 211 165 15 33 2 426 New Store 13 4 8 1 3 29 Closures (1) (2) (2) (5) Conversions 8 (8) 1 (1) 0 Closing Number 231 159 24 31 5 450 07/08 store rollout Q1 Q2 Q3 Q4 New store