Slide 1: Disclaimer
Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of WH Smith PLC. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expr
Slide 2: WH Smith PLC Preliminary Results
WH Smith PLC Preliminary Results 11 November 2021
Slide 3: Agenda
WH Smith PLC ▪ Introduction Carl Cowling ▪ Financial review Robert Moorhead ▪ Business review Carl Cowling ▪ Questions
Slide 4: WH Smith: Overview – well placed for growth
WH Smith: Overview – well placed for growth ▪ Improvements in trading across the Group; new financial year has started well ▪ Well positioned to return to meaningful profit in 2022 ▪ Focused plan on conversion and average transaction value growth delivering good results across all markets ▪ Over 100
Slide 5: Robert Moorhead
Robert Moorhead Chief Financial Officer and Chief Operating Officer
Slide 6: Group financial summary
Group financial summary1 Year to Year to Aug 2021 Aug 2020 £m £m Revenue 886 1,021 Headline Group loss from trading operations2 (20) (43) Headline Group loss before tax3 (55) (69) Headline loss per share3, 4 (23.7)p (44.2)p Free cash flow (£m) 14 (41) Cash on deposit 103 82 1 All results are stated
Slide 7: Revenue analysis
Revenue analysis Year to Year to Aug 2021 Aug 2020 Change Total Revenue £m £m % UK 195 344 (43)% North America 1 1662 116 43% Rest of World 40 93 (57)% Total Travel 401 553 (27)% High Street 3 485 468 4% Total revenue 886 1,021 (13)% FY2021 FY2022 Q1 to % of calendar 2019 H1 Q3 Q4 date 4 % % % % Tra
Slide 8: Revenue has improved during the year
Revenue has improved during the year 100% NA 90% High Street 80% 70% UK % of Calendar 2019 Revenue 60% 50% RoW 40% 30% 20% 10% 0% Apr May Jun Jul Aug Sept Oct 2021 Travel UK Travel NA¹ Travel RoW High Street 1 Includes pro-forma MRG. Constant currency..
Slide 9: Income statement
Income statement1 Year to Year to Aug 2021 Aug 2020 £m £m UK 2 (32) (1) North America 2,3 6 (18) Rest of World 2 (13) (14) Total Travel 2 (39) (33) High Street 2 19 (10) Headline Group loss from trading operations2 (20) (43) Unallocated central costs (19) (17) Headline Group operating loss4 (39) (60
Slide 10: Non-underlying items
Non-underlying items Cash Outflow Year to Year to H1 2021(1) H2 2021(1) Aug 2021(1) Aug 2022 £m £m £m £m Attributable to Covid-19 Impairment 6 12 18 - Onerous leases 2 3 5 - Stock provisions, write-offs and other costs 5 1 6 - Restructuring 2 7 9 6 Costs associated with refinancing activity - 6 6 -
Slide 11: Group free cash flow
Group free cash flow1 Year to Year to Aug 2021 Aug 2020 £m £m Headline Group operating loss before (39) (60) non-underlying items2 Depreciation, amortisation and impairment3 50 60 Non cash items3 8 3 19 3 Capital expenditure (44) (79) Working capital3 37 40 Net tax refunded 10 5 Net interest paid (8
Slide 12: Headline net debt (pre-IFRS 16)
Headline net debt (pre-IFRS 16) £m Opening Headline net debt (301) Movement in year Free cash flow 14 Pensions (3) Non-underlying items1 (38) Equity component of Convertible bond 41 Other (4) Headline net debt 31 August 2021 (291) Cash 130 Term loan (net of fees) (132) Convertible bond (liability co
Slide 13: New financing arrangements and Liquidity
New financing arrangements and Liquidity £m Maturity 5 year convertible bond 327 April 2026 Term debt 133 April 2025 460 RCF 250 April 2025 Facilities 710 Strong liquidity position at 31 August 2021 £m RCF 250 Undrawn Cash on deposit 103 353
Slide 14: Carl Cowling
Carl Cowling Group Chief Executive
Slide 15: WH Smith Travel
WH Smith Travel EST-1792
Slide 16: Travel: Strategy
Travel: Strategy ▪ Remain focused on initiatives within our control; good progress made throughout the year with significant opportunities ahead ▪ Key areas of focus are relevant for all channels and territories across UK Travel, North America and Rest of the World Space Category Cost & Cash ATV gro
Slide 17: WH Smith Travel UK
WH Smith Travel UK EST-1792
Slide 18: Travel UK: Improving trends across all key channels
Travel UK: Improving trends across all key channels % of FY 2021 FY 2021 FY 2022 calendar Q11 H1 H2 2019 to date 16% 17% 51% Air 65% 82% 90% Hospitals 22% 42% 73% Rail 1 9 weeks
Slide 19: Travel UK: Air
Travel UK: Air ▪ Focus on format development continues to generate significant opportunities across all channels ▪ Continue to invest in our stores; new and improved space opportunities: ➢ 30 technology stores won across UK airports branded InMotion ➢ 3 stores opened in new terminal at Manchester Ai
Slide 20: InMotion: Launch of InMotion into UK airports
InMotion: Launch of InMotion into UK airports ▪ Successfully won 30 technology stores across all UK airports ▪ Combining the learnings and expertise from North America, these stores will provide a superior customer service experience and a combination of premium products and tech accessories ▪ Stron
Slide 21: InMotion: Launch of InMotion into UK airports
InMotion: Launch of InMotion into UK airports
Slide 22: Travel UK: Hospital channel – good opportunities for growth
Travel UK: Hospital channel – good opportunities for growth ▪ Robust market with significant opportunity to improve retail offer ▪ Operate from 138 stores across 100 hospitals; around 300 hospitals with scope to support at least one of our store formats ▪ Strong proposition; continue to invest in a
Slide 23: Travel UK: Rail
Travel UK: Rail ▪ Encouraging return of leisure passengers throughout July and August 2021; faster recovery than anticipated ▪ Rail is an attractive channel with c.1.7bn passengers pre-Covid ▪ Strong weekend performance; improving weekday performance ▪ Focused plan around driving ATV continuing to d
Slide 24: WH Smith North America
WH Smith North America WHSmith
Slide 25: WH Smith North America: Attractive growth opportunities
WH Smith North America: Attractive growth opportunities ▪ Largest travel retail market in the world; valued pre-Covid at c.$3.2bn ▪ Substantial retail space due to come to tender over next ten years ▪ Distinctive retail offering with bespoke fascias; tailored to local consumers in high traffic locat
Slide 26: WH Smith North America
WH Smith North America ▪ Good recovery; TSA data shows consistent, steady recovery in passenger numbers across US airports ▪ Total revenue in October at 90% compared to 2019 levels ▪ Opened 23 new stores in 2020/21 financial year ▪ Remain confident in strong performance post recovery with continued
Slide 27: North America: Strong pipeline of new store openings
North America: Strong pipeline of new store openings New stores won 400 $31m* $19m* $15m* No. of Stores 300 InMotion 200 Resorts 100 Air 0 ▪ 39 tenders won since acquisitions, including significant tender wins for both MRG and InMotion ▪ MRG currently represented in 10 of top 50 US airports; InMotio
Slide 28: InMotion
InMotion EST-1792
Slide 29: InMotion: Further growth opportunities globally
InMotion: Further growth opportunities globally ▪ Acquired InMotion, the leading US tech accessories retailer in travel locations in 2018 ▪ Identified limited competition in most territories at point of acquisition ▪ No. 1 tech accessories retailer in travel locations in North America ▪ Now the mark
Slide 30: WH Smith Rest of the World (ROW)
WH Smith Rest of the World (ROW)
Slide 31: WH Smith: Rest of the World
WH Smith: Rest of the World ▪ WH Smith has a very low market share; significant opportunity to grow this business further ▪ Pace of recovery varies by geography with Europe and Middle East the best performing regions ▪ As expected, recovery commenced with domestic travel followed by short- haul, the
Slide 32: WH Smith Travel: Looking ahead – well positioned for further growth
WH Smith Travel: Looking ahead – well positioned for further growth ▪ Shape of the recovery remains uncertain; industry commentators suggest passenger numbers will return by 2024 ▪ Group is in a strong position as recovery continues ▪ Strong pipeline of new space across all channels and territories
Slide 33: WH Smith High Street
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Slide 34: High Street business is an important cash generator
High Street business is an important cash generator ▪ High Street business comprises store portfolio, whsmith.co.uk, cultpens.com and funkypigeon.com ▪ Retail market changed rapidly during pandemic; high street footfall down 25% on 2019 levels ▪ Well located portfolio; 95% of stores in prime pitch l
Slide 35: High Street: Strategy continues to deliver
High Street: Strategy continues to deliver ▪ High Street strategy continues to serve us well; strategy as relevant today as it has ever been Space Category Cost management management Margin growth management Utilise space to Improve ranges Category mix Rent reductions maximise return management on e
Slide 36: High Street: Cost efficiencies
High Street: Cost efficiencies ▪ Cost efficiencies key to strategy; £30m of cost savings delivered in the year ▪ Savings from right across the business; rent reductions at lease end of over 50% ▪ Flexible lease portfolio with c.430 leases due to expire over next three years ▪ Continue to evaluate ea
Slide 37: Funkypigeon.com: Fast-growing online business
Funkypigeon.com: Fast-growing online business ▪ Funkypigeon.com – a leading online personalised greeting cards and gifts solution ▪ High growth business since launch in 2010 ▪ Underpenetrated market; online greetings card market c.15% of UK greetings card market1 ▪ Record performances from personali
Slide 38: Funkypigeon.com: considerable growth opportunities ahead
Funkypigeon.com: considerable growth opportunities ahead ▪ Continue to invest for the future ➢ Funkypigeon.com app development ➢ Platform enhancements; enhanced CRM capabilities ➢ Additional fulfilment centres; leveraging Group assets ➢ Extended cut-off times to market leading 9:30pm for next day de
Slide 39: WH Smith: ESG – 'Our journey to a better business'
WH Smith: ESG – ‘Our journey to a better business’ ▪ Met target to reach carbon neutrality for UK operations in the year ➢ International operations by 2025 ➢ Engagement starting with key suppliers to reduce indirect emissions ▪ Ongoing focus on more environmentally responsible sourcing practices; pa
Slide 40: Looking ahead: Well positioned for the future
Looking ahead: Well positioned for the future ▪ Important travel retailer for landlords with proven strategy ▪ Continue to invest in new stores and store formats where we see attractive opportunities for profitable growth ▪ Substantial growth opportunities in North America ▪ InMotion now the market-
Slide 41: Appendix
Se tll MN L io Appendix EST -1792
Slide 42: IFRS 16 – Impact on balance sheet
IFRS 16 – Impact on balance sheet £m Headline Pre-IFRS 16 IFRS 16 IFRS 16 31 Aug 2021 Adjustment 31 Aug 2021 Goodwill and other intangible assets 474 (1) 473 Property, plant and equipment 167 7 174 Right-of-use assets - 328 328 Investments in joint ventures 2 - 2 643 334 977 Inventories 135 - 135 Pa
Slide 43: IFRS 16 – Impact on income statement
IFRS 16 – Impact on income statement Headline £m Pre-IFRS 16 IFRS 16 IFRS 16 31 Aug 2021 Adjustment 31 Aug 2021 Revenue 886 - 886 Travel UK trading loss1 (32) 3 (29) North America trading profit1 6 (4) 2 Rest of World trading loss1 (13) (4) (17) Total Travel trading loss1 (39) (5) (44) High Street t
Slide 44: IFRS 16 – Impact on cash flow statement
IFRS 16 – Impact on cash flow statement Headline £m Pre-IFRS 16 IFRS 16 IFRS 16 31 Aug 2021 Adjustment 31 Aug 2021 Net cash inflow from operating activities 17 83 100 Net cash outflow from investing activities (43) - (43) Net cash inflow / (outflow) from financing 48 (83) (35) activities Total cash
Slide 45: WH Smith PLC Preliminary Results 2021
WH Smith PLC Preliminary Results 2021 11 November 2021