Jb Hi-fi Limited · ASX:JBH
Jb Hi-fi — HY19 Earnings Presentation
26 slides from Jb Hi-fi's earnings presentation, Feb 11, 2019
Slide 1: HY19 Results Presentation
JB Hi-Fi Limited HY19 Results Presentation 15 11 AUGUST 2016 FEBRUARY 2019 PAGE 1
Slide 2: Agenda
Agenda 1. HY19 Financial Results i. Group Performance Overview ii. JB HI-FI Australia iii. JB HI-FI New Zealand iv. The Good Guys v. Group Balance Sheet and Cash Flow 2. FY19 Trading Update and Outlook 3. Group Strategic Update 4. Investment Checklist Richard Murray Nick Wells Group CEO Group CFO JB
Slide 3: Group Performance Overview
1. HY19 Financial Results i. Group Performance Overview AUD HY19 HY18 Growth Total sales ($m) 3,843.7 3,689.8 153.9 4.2% ▲ Earnings before interest and tax ($m) 236.6 225.8 10.8 4.8% ▲ Net profit after tax ($m) 160.1 151.7 8.4 5.5% ▲ Earnings per share (basic ¢) 139.4 132.2 +7 cps 5.4% ▲ Dividend pe
Slide 4: Group Performance Overview by segment
1. HY19 Financial Results i. Group Performance Overview Growth HY19 HY18 $m % Sales ($m) - JB HI-FI Australia 2,591.3 2,476.0 115.3 4.7% ▲ - JB HI-FI New Zealand (NZD) 131.8 124.6 7.2 5.8% ▲ - The Good Guys 1,130.7 1,099.8 30.9 2.8% ▲ Total Sales (AUDm) 3,843.7 3,689.8 153.9 4.2% ▲ EBIT ($m) - JB HI
Slide 5: JB HI-FI Australia: Sales
1. HY19 Financial Results ii. JB HI-FI Australia Sales AUD HY19 HY18 Growth ▪ Total sales grew by 4.7% to $2.59 billion, with comparable sales up 3.0%. It was pleasing to see continued sales Sales ($m) 2,591.3 2,476.0 4.7% ▲ growth in Q2 as we cycled strong product releases in the Gross Profit ($m)
Slide 6: JB HI-FI Australia: Gross Profit and Margin
1. HY19 Financial Results ii. JB HI-FI Australia Gross Profit and Margin AUD HY19 HY18 Growth ▪ We are a sales led organisation with a focus on Sales ($m) 2,591.3 2,476.0 4.7% ▲ growing top line sales and gross profit dollars ▪ Gross profit increased by 5.2% to $573.6 million. Gross Profit ($m) 573.
Slide 7: JB HI-FI Australia: CODB and EBIT
1. HY19 Financial Results ii. JB HI-FI Australia CODB AUD HY19 HY18 Growth ▪ Our low CODB remains a competitive advantage and Sales ($m) 2,591.3 2,476.0 4.7% ▲ is maintained through our continued focus on productivity, minimising unnecessary expenditure and Gross Profit ($m) 573.6 545.3 5.2% ▲ lever
Slide 8: JB HI-FI New Zealand: Sales
1. HY19 Financial Results iii. JB HI-FI New Zealand Sales NZD HY19 HY18 Growth ▪ Total sales were up 5.8% to NZD131.8 million, with Sales ($m) 131.8 124.6 5.8% ▲ comparable sales up 12.6% Gross Profit ($m) 23.1 21.8 5.8% ▲ ▪ The key growth categories were Communications, Games Hardware, Fitness and
Slide 9: The Good Guys: Sales
1. HY19 Financial Results iv. The Good Guys Sales AUD HY19 HY18 Growth ▪ Total sales grew by 2.8% to $1.13 billion, with Sales ($m) 1,130.7 1,099.8 2.8% ▲ comparable sales up 1.5% Gross Profit ($m) 233.2 228.6 2.0% ▲ ▪ The key growth categories were Refrigeration, Laundry, Floorcare, Televisions, Co
Slide 10: The Good Guys: Gross Profit and Margin
1. HY19 Financial Results iv. The Good Guys Gross Profit and Margin AUD HY19 HY18 Growth ▪ Gross profit was $233.2 million with gross margin at Sales ($m) 1,130.7 1,099.8 2.8% ▲ 20.6%, slightly down on the pcp but a significant improvement from the performance in the second Gross Profit ($m) 233.2 2
Slide 11: Group Balance Sheet and Inventory Bridge
1. HY19 Financial Results v. Group Balance Sheet and Cash Flow Group Balance Sheet Inventory Bridge – HY18 to HY19 AUDm HY19 FY18 HY18 Cash 117.1 72.0 182.7 $76.0m Receivables 307.7 204.7 302.2 Inventories 1,076.4 891.1 986.7 $17.9m Other 41.2 42.7 45.3 ($4.1m) Total Current Assets 1,542.4 1,210.5 1
Slide 12: Group Cash Flow Statement and Performance Indicators
1. HY19 Financial Results v. Group Balance Sheet and Cash Flow Group Cash Flow Statement Group Performance Indicators AUDm HY19 HY18 HY19 HY18 Statutory EBITDA 264.3 256.3 Fixed Charge Ratio 2.9x 3.0x Change in Working Capital 84.5 179.3 Interest Cover 33.2x 27.2x Net Interest Paid (6.5) (8.5) Geari
Slide 13: Capital Management
1. HY19 Financial Results v. Group Balance Sheet and Cash Flow Capital Management HY19 dividend up 5.8% to 91 cps ▪ The Board has today declared an interim dividend of 91 cents per share (cps) fully franked, up 5 cps from the pcp, Final representing 65% of NPAT. The record date for the interim Inter
Slide 14: FY19 Trading Update and Outlook
2. FY19 Trading Update and Outlook January 2019 sales update: ▪ Total sales growth for JB HI-FI Australia was 3.0% (January 2018: 7.5%) with comparable sales growth of 1.5% (January 2018: 4.8%) ▪ Total sales growth for JB HI-FI New Zealand was -1.8% (January 2018: -2.0%) with comparable sales growth
Slide 15: The Group Model
3. Group Strategic Update i. The Group Model A dual branded retail combination 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-maki
Slide 16: The Group Model - key enablers
3. Group Strategic Update i. The Group Model - 5 key enablers Low Cost Quality Store Supplier Multichannel 1 Scale 2 Operating Model 3 Locations 4 Partnerships 5 Capability • #1 player in fragmented Lowest CODB of any major JB HI-FI • Strong partnerships with all • Integrated, high quality in- Austr
Slide 17: JB HI-FI Group FY19 Key Focus Areas Update
3. Group Strategic Update ii. JB HI-FI Group – FY19 Key Focus Areas Update Focus Area Update • Function established Establish a Group Merchandise function led by • Supplier benchmarking undertaken monthly to Group Merchandising Cameron Trainor as Managing Director Group identify underperformance Mer
Slide 18: JB HI-FI FY19 Key Focus Areas Update
3. Group Strategic Update ii. JB HI-FI – FY19 Key Focus Areas Update Focus Area Update Continued focus on driving sales - instore, online and Sales • Positive HY19 comparable sales commercial • New store format trialled at Westfield Sydney Category evolution Gaming, Telco and Connected Tech • Recent
Slide 19: The Good Guys FY19 Key Focus Areas Update
3. Group Strategic Update ii. The Good Guys – FY19 Key Focus Areas Update Focus Area Update Continued focus on driving sales - instore, online and Sales • Positive HY19 comparable sales commercial • Connected appliances are continuing to grow and Category evolution Technology enabled Home Appliances
Slide 20: Investment Checklist
4. 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 metr
Slide 21: Appendix I: Group Profit and Loss Breakdown
Appendix I Group Profit and Loss - Breakdown HY19 HY18 JB HI-FI JB HI-FI JB HI-FI JB HI-FI Growth TGG Group TGG Group AUDm AUST NZ (NZD) AUST NZ (NZD) Sales 2,591.3 131.8 1,130.7 3,843.7 2,476.0 124.6 1,099.8 3,689.8 4.2% ▲ Gross Profit 573.6 23.1 233.2 828.0 545.3 21.8 228.6 793.9 4.3% ▲ Gross Marg
Slide 22: Appendix II: Group CODB reconciliation
Appendix II Group CODB reconciliation AUDm HY19 HY18 Other income (ex interest received) (0.7) (0.4) Sales and marketing expenses (App 4D) 379.3 357.4 Occupancy expenses (App 4D) 151.4 148.4 less depreciation, amortisation & impairment (23.3) (25.1) Administration expenses (App 4D) 24.6 25.6 less de
Slide 23: Appendix III: Group store reconciliation
Appendix III 316 stores across Australia and New Zealand Group store reconciliation HY19 FY18 Opened Converted Closed Total Australia JB HI-FI 134 4 - - 138 JB HI-FI HOME 59 - - - 59 1 193 4 - - 197 New Zealand 2 JB HI-FI 15 - - (1) 14 23 JB HI-FI HOME - - - - - 15 - - (1) 14 14 39 JB HI-FI TOTAL 20
Slide 24: Appendix IV: Group Profit and Loss
Appendix IV a) Group Profit and Loss AUDm 1 HY19 HY18 HY17 HY16 HY15 Sales 3,843.7 3,689.8 2,616.2 2,116.8 1,965.1 Gross Profit 828.0 793.9 571.1 459.6 427.3 Gross Margin 21.54% 21.52% 21.83% 21.71% 21.74% EBITDA 264.3 256.3 203.9 157.9 148.7 Depreciation & Impairment 27.7 30.5 23.1 19.7 18.8 EBIT 2
Slide 25: Appendix IV: Group Balance Sheet
Appendix IV b) Group Balance Sheet AUDm HY19 HY18 HY17 HY16 HY15 Cash 117.1 182.7 124.5 101.4 68.1 Receivables 307.7 302.2 257.5 146.1 150.5 Inventories 1,076.4 986.7 898.1 621.5 572.6 Other 41.2 45.3 47.5 9.7 5.7 Total Current Assets 1,542.4 1,516.9 1,327.6 878.7 796.8 Fixed Assets 206.8 207.2 215.
Slide 26: Appendix IV: Group Cash Flow
Appendix IV c) Group Cash Flow AUDm HY19 HY18 HY17 HY16 HY15 Statutory EBITDA 264.3 256.3 188.5 157.9 148.7 Change in Working Capital 84.5 179.3 117.0 134.4 146.6 Net Interest Paid (6.5) (8.5) (0.1) (1.7) (2.7) Income Tax Paid (58.6) (58.9) (34.2) (33.6) (29.0) Other (3.4) 5.4 4.8 2.6 1.8 Net Cash F