Currys PLC · LSE:CURY
Currys — Investor Day (November 2021)
121 slides from Currys's investor day presentation, Nov 4, 2021
Slide 1: Capital Markets Day 2021
Slide 2: Disclaimer
Disclaimer This document has been prepared and issued by and is the sole responsibility of Currys plc (the Company) It comprises the written materials for a presentation concerning the Company. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicit
Slide 3: Agenda
Agenda 9.00am Introduction Alex Baldock, Group Chief Executive Nordics Erik Sonsterud, International CEO Andreas Westgaard, International CCO Omnichannel Mark Allsop, Chief Operating Officer Customers for Life Ed Connolly, Chief Commercial Officer Paula Coughlan, Chief People Officer Q6A Lindsay Has
Slide 4: Introduction
So: Introduction Alex Baldock
Slide 5: We help everyone enjoy amazing technology
We help everyone enjoy ~ arpazing technology.
Slide 6: A stronger management team
Strat clarit A stronger management team ] Alex Baldock Group Chief Executive Officer Ed Connolly Chief Commercial Officer Mark Allsop Chief Operating Officer Assad Malic Group Strategy & Corporate Affairs Director Erik Sonsterud International CEO Nigel Paterson General Counsel & Company Secretary Br
Slide 7: Strategic clarity
Capable and committed colleagues - our greatest advantage Happy colleagues make happy customers and happy shareholders, and none of our competitors can match our thousands of expert colleagues Customers need an easy shopping experience For our customers, we will be easy to shop We're strongest when
Slide 8: Strategic clarity, simpler, transformation, sustainable progress
Simpler, Most transformation Strategic clarit moeiactcedt complete Sustainable progress Better financial shape Alot more to come We help everyone enjoy amazing technology For our customer: l be easy to shop We want to be more valuable to customers: This means doing more than selling them a box Happy
Slide 9: Simpler, more focused
Simpler, more focused Three years later... now a simpler, more focused business DIXONS RETAIL Currys @ PCWorld VEE ne ac! Nits lefdal thineds KOTEOBOAOE EF honeybee” So connecten ‘SELFRIDGES: Sprint 1D) oxonone(i EZ == etxsor) ELKJ oP) & KOTIOBOAOX
Slide 10: Hardest yards of transformation complete
Strategic clarity __ Simpler, Most transformation Sustainable progress Better financial shape Alot more to come gi u nore focused complete Hardest yards of transformation complete — International Uk issues resolved Ahead on transformation Legacy issues resolved Pandemic challenges Mgjority of naviga
Slide 11: Happier colleagues, happier customers, opportunity in ESG
Simpler, itegic clarity Sietertectenky more focused etl sie Sustainable progress Better financial shape Alot more to come We have happier colleagues, happier customers, and a real opportunity in ESG UK Colleague Engagement Uk NPS ESG is an opportunity Global top 20% companies (78) Longer life for te
Slide 12: Total indebtedness
Total indebtedness 0 (500) (1,000) (1,500) (2,000) (2,500) 2018/19 2019/20 2020/21
Slide 13: With a lot more to come
ae With a lot more to come Omnichannel Customers for Life
Slide 14: A lot more to come
Alot more to come Strategic Simpler, Most transformation Sustainable Better financial clarity more focused complete progress shape We help VY) Total everyone indebtedness, fbn enjoy amazing Colleagues 2018/19 2020/21 technology. Customers 4 Ly g s ‘aig Sustainability 14
Slide 15: 15
15
Slide 16: Bigger market, growing market leader, winning business model
© Bigger market G Growing market leader © Winning business model
Slide 17: Fit & healthy, Productive, Entertained
Fit & healthy Productive Entertained
Slide 18: Technology to stay a larger market than pre-pandemic
We expect Technology to stay a larger market than pre-pandemic we UK Electricals Market - Yo2¥ Growth 35% 30% 25% 20% 6% 10% 5% 0% Sep-20 Dec-20 Mar-21 — Jun-21_— Sep-21 Source: Gfk Continuing growth drivers * Hybrid working * Home entertainment Faster replacement * Greater usage * Greater familiari
Slide 19: Fuelled by suppliers' weight of innovation
All fuelled by our Suppliers’ weight of innovation 7 out of 10 of the top global R&D spend companies are partners to us 200 (Wied Dual Screen Laptops Windows 11 < B 60 if] 3g Pl) 3 « a oO == = 100 Microsoft 2 & Qi 50 Energy efficiency Foldable phones Food Preservation 19
Slide 20: Growing market leader in every market
We are the growing market leader, in every market we Uk&l Electricals market share Nordic market share 16/17 T/8 18/19 19/20 20/21 21/22 YTD 16/17 T/8 18/19 19/20 20/21 21/22 YTD 20
Slide 21: Our business is highly diversified
Our business is highly diversified Sales by country Sales by category Sales by channel 2020/21 2620/21 2020/21 mUK mlreland ™ Norway ™ Computing ™ Consumer electronics ™ Store Sweden Denmark Finland "Domestic appliances © Mobile ™ Online (incl. order 6 collect) OtherNordics © Greece 21
Slide 22: Omnichannel is the proven winning model
Country Market Leader Market Share Omnichannel AN IA “aay nm a ae Omnichannel BF txsomy | 27% is the proven BS sown YQ 2x winning model = ® 58x @ @ @ in tech, globally... ree eee @ @ a CECONOMY > 20% 22
Slide 23: Delivering our Omnichannel strategy
We’re delivering our Omnichannel strategy Online sales And best of stores Expert help Experience & demo 2019/20 2020/21 URS! = Nordics Greece Sources Curys Internal information To bring best of both to customers Never out of stock Get your product right now Help 24/7 O00 23
Slide 24: Building stickier, more valuable customer relationships
We’re now building stickier and more valuable customer relationships “Customers for Life” c. 80% of Uk households shop for electricals with us 80% We see ac. 30% share of their wallet on average 30% We have more customers And we're #1 in the Services that 2 we can sell to... build ‘Customers for Lif
Slide 25: Summary
Summary International business with growing #1 position in all markets Tech market is sustainably larger as a result of the pandemic Proven Omnichannel proposition to best meet customer needs Wide and valued range of Services to help everyone enjoy technology Our strategy to build on these strengths
Slide 26: Summary: Financial benefits by 2023/24
Summary; Financial benefits by 2023/24 we Steady growth EBIT margin Capital expenditure New cash exceptionals 4% 1.5% of sales Fminimal Annual sustainable free cash flow >£250m Growing shareholder return 1able free cosh flow is defined as operating cashflow less capital expenditure, exceptional cash
Slide 27: Elkjøp Nordic
wl S&S Elkj@p Nordic | Pa Erik Sonsterud 4 ——~. Andreas Westgaard ) aN
Slide 28: Elkjøp Nordic: big, successful part of the Group
Elkjop Nordic Elkjap — A big, successful part of the Group, ELKJOP) following Group strategy We help everyone enjoy amazing technology Easy to enjoy & fn) 1) Support & service, in store, online or at home Tips 6 tricks . n% Maintain, spare-parts & repair Trade-in Help to recycle ain Easy to find Str
Slide 29: Experienced management team
Elkjop Nordic Experienced management team with a winning culture ELKJOP) Erik Gunset Sonsterud, CEO Lill Beate Pedersen, CFO Andreas Westgaard, CCO + CEO Elkjop from 2019 * Joined Elkjap in 2020 as CFO + CCO from 2019 + Joined Elkjap in 2017 as CFO. 4 * Previously CFO Atea and Umoe sah + Joined Elkj
Slide 30: Growing market leader
Elkjop Nordic Elkjap is a growing market leader - #1 Preferred brand in all countries is . ELKJ oP) #1 in all ri L__\ markets. Dp "Oste Nowey~ ‘as central as possible, as local as necessary’ 9 153 stores Elkjap Nordic ELGIGANTEN) Hoos ELGIGANTEN ) > ‘S WD 38 stores \ Nordic Detbuton 175 stores Centr
Slide 31: Elkjøp is highly diversified
Elkjop Nordic Elkjap is highly diversified ELKJOP) By country! By category! By channel! By customer! 2020/21 2020/21 2020/21 2020/21 I Norway Finland 1 Domestic appliances Consumer electronics. I Store bec I Sweden Other I Computing Kitchen & Other I Online (incl. order 6 collect) en Denmark I Telec
Slide 32: Strong track record of revenue growth
Elkjop Nordic Strong track record of revenue growth ELKJOP) with 10% CAGR since 2000/01 10% revenue growth p.a. from 2000/01 to 2020/7211 Revenues NOKbn 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 O9/10 10/11 1/12 12/18 18/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Single channel retaile
Slide 33: Pan-Nordic market leader
Elkjop Nordic Pan-Nordic market leader with growing ELKJOP and unrivalled >26% market share Clear market leader in all countries! Leading position in a very fragmented market Estimated market share 2020/21 Player Total revenue (NOKbn)2> Presence . Omnich Land ee a oo oo cuccr) EN igo Orem a Power 6
Slide 34: Prime technology destination
Elkjop Nordic Elkjap is the prime technology destination with a wide ELKJOP) and relevant product offering of >100,000 SKUs Elkjop is the prime Relevant and large product Strong customer technology destination range with >100,000 SkUs! guarantees building trust Providing customers with all the Using
Slide 35: Large and growing technology products and services market
Elkjop Nordic . . b Focused on the large and growing Nordic ELKJOP > technology products and services market iN .. afford amazing tech a eA [,1) ie L? ‘ & get started Credit Trade in Delivery Setup & Installation Configuration ( XM ..give your tech longer life S Vi {3 (a) fa Insurance Repair Spare p
Slide 36: Successful loyalty program
Elkjop Nordic With a successful Loyalty program that is building customers for life Successful rollout in the Nordics Clear customer benefits # of customer club members Always vty Club deals 6.3m discount every month/ 5.4m on specific week, as part - product of main categories campaign tad . leq | E
Slide 37: Delivering winning Omnichannel strategy
Elkjop Nordic Delivering our winning Omnichannel strategy, with 400+ stores ELKJOP) and a strong online business, with a scale that is difficult to match Key highlights 2020/21 Omnichannel platform with Strong online growth y 369m 60m a fully integrated offering Revenues from online, NORbn® Web site
Slide 38: Well-invested logistics, IT and store infrastructure
Elkjop Nordic Well-invested Logistics, IT and store infrastructure ELKJOP) Modern and efficient Continuously Continuously developing logistics infrastructure upgrading stores the IT platform 1 7O+ 400+ Continuously developing store formats and concepts Significant investments made in IT platform pas
Slide 39: Capable and committed colleagues
Elkjop Nordic Capable and committed colleagues — ELKJOP our greatest advantage > 1Ok+ NOK100m Capable and Annual investment committed colleagues in training 223k #1 completed Employer of the year in e-learnings in 20/21 retail in Sweden 2020!
Slide 40: Growing sales, profit and market share
Elkjop Nordic Elkjap Nordic is growing sales, profit and market share, ELKJOP) while improving customer satisfaction Elkjop Nordic performance Turnover (NOKbn) Nordic market share (GFR) 10% — we 26,8% 37,3 38,5 26,0% 34,2 25,4% L| a El — 2016/17 2017/18 2018/19 2019/20 2020/21 - 7 2017/18 2018/19 20
Slide 41: Opportunity for continued profitable growth
Elkjop Nordic And there’s plenty of opportunity to deliver continued profitable growth Clear strategic growth initiatives a8 w © eS oo Product offering Service offering B2B Finance and insure bundled solutions 2020/21 Elkjop B2B retail revenue ELKJOP) Omnichannel Best in class Omni-experiences: Expa
Slide 42: Omnichannel
Omnichanne MarkAllsop
Slide 43: Omnichannel is the proven winning model
Country Market Leader Market Share Omnichannel AN IA “aay nm a ae Omnichannel BF txsomy | 27% is the proven BS sown YQ 2x winning model = ® 58x @ @ @ in tech, globally... ree eee @ @ a CECONOMY > 20% 43
Slide 44: Omnichannel makes it easy for customers to shop
Omnichannel Omnichannel makes it easy for customers to shop however they want to shop Most customers still want to shop in stores as well as online 17% AT% Store only BothStre <¢ > | ° and Online e---------- 36% Online only y= eens . ‘Source: Currys consumer insight survey, Purchase chonnel used in
Slide 45: Omnichannel starts with a strong online business
Omnichannel ‘eae starts with a strong online business We are big online... getting better and there is more to come...
Slide 46: Already big and growing fast online
Omnichannel We are already big... and growing fast UK&I online business has more than doubled Nordics online grown +75% Currys UR&! Electricals Online sales Elkjap Online sales 14.2 BNOK £3.4bn +75% +114% 8.1BNOR £1.6bn 2019/20 2020/21 2019/20 2020/21 And grown faster than rivals... And grown faster
Slide 47: Driving online growth through better retail basics
Omnichannel We've driven online growth through better “retail basics” Larger range UK&I more than doubled in two years UR&I SKUs 26k >100% 18k tek URS! 2019/20 ™2020/21 ™2021/22 forecast Lots of headroom; Sweden at 9Ok+ SKUs Sources Curys Internal information Investing in price Clear price promise “
Slide 48: Improving online gross margin
Omnichannel We are already improving Uk&l online gross margin as we level up we channel profitability a” Credit adoption increasing Q. Services adoption increasing ©) orine UR&I Credit adoption EB orine UR&I Care & Repair adoption 2020/21 YTD (P5) 2021/22 YTD (PS) 2020/21 YTD (P5) 2021/22 YTD (PS) /
Slide 49: New website and colleague tools
Omnichannel More to come... we’re now unlocking further growth and margin we improvements, through a new website and colleague tools It’s cleaning up... New sites and tools * Customer-facing website * Customer app * Colleague hub & store mode Easier to shop * Easier to trade-up and bundle * Easier t
Slide 50: Stores are profitable and flexible
Stores are profitable and flexible... and our Expert Colleagues add the magic ingredient
Slide 51: Investments paying off as customers return to stores
Omnichannel Investments are paying off as customers return to stores Expert face to face help & home of the demo Store mix normalising to ~60/50 as expected Store-originated sales mix” 2019/20 2020/21 2021/22 YTD (P5) customer experience i “Store- originated sales: sales made in store (inc store sto
Slide 52: Capable and committed colleagues
Omnichannel Capable and committed colleagues continue to be our greatest advantage Investing in colleagues Training New LIFE selling journey * Sales, margin and CSAT up Tools Store mode, helping colleagues to help customers * Fuelled by data Reward Aligned with strategy, colleagues rewarded when hel
Slide 53: Store estate rightsized under one brand
Omnichannel Uk&l store estate is now rightsized under one brand 10yr UR&I store evolution Number of stores and total selling space | Currys @ PCWorld Doxons wa (7) > at end of financial year 1600 8.5 82 1400 16 75 66 1200 ! 68 64 58 8 1000 °° 88 s 865 2 fa 849 B 824 2 800 6 5 Ps 773 735 5 u 630 600
Slide 54: Stores profitable and flexible
Omnichannel ..and is profitable and flexible, even as we invest in colleagues >97% of Uk&l stores profitable post pandemic 61% of UR&I stores with lease break in <5 years re-opening Forecast 2021/22 Uk&l store contribution’ Lease break distribution 301 stores positive contribution Holding over <lyr
Slide 55: Bringing stores and online together
Slide 56: Never out of stock
Omnichannel Never out of stock: stores provide customers with access to our we complete and growing online range All stores can sell the Our online range Supports stock optimisation complete online range is getting bigger across the estate 26k 12k 2019/20 ™2020/21 ™ 2021/22 forecast +152% growth in
Slide 57: Get your product right now
Omnichannel Get your product right now: stores and online working together makes it easier for customers to get their product quickly No customer should have to wait more than 30 minutes for their tech Strong foundations More to come F Over 50% ‘ . are in place Store forsume omy Standardise 30 min K
Slide 58: Help 24/7: ShopLive
Omnichannel Help 24/7: ShopLive brings amazing in-store expertise to customers online... and we’re only getting started Significant benefits vs unassisted online Customers are more likely to get what they want ~Ax +40% conversion AOV i Are more likely to And are highly satisfied protect their tech a
Slide 59: Omnichannel: the winning model
Omnichannel Omnichannel: the winning model » Online We are big, getting better and there is more to come; gross margin upside Stores Our stores are profitable and flexible... colleagues are our greatest advantage Omnichannel is the best of both For customers: Never out of stock | Get your product ri
Slide 60: Customers for Life
So A Ss Customers forLife Ed Connolly
Slide 61: Building on core strategy to create stickier customers
Customers for Life Customers for Life: building on our core strategy to create stickier, more valuable customers Capable and committed colleagues - easy shopping experience We are building Customers for Life v e& z < a We're changing from a business that just ‘sells boxes’ to anonymous customers thi
Slide 62: Substantial opportunity to grow share of wallet
Customers for Life We have a substantial opportunity to grow share we of wallet from our large existing customer base ~80% of UK households We see a ~30% share shop for electricals with us! of their wallet on average 80% 50% We don’t need to invest lots in ..ut huge headroom remains to grow acquirin
Slide 63: Grown customer base and can talk to more
Customers for Life We've grown our Customer base significantly, we can talk to more of them... and the results are already showing We have grown our customer = base... 2 £ 3 4m g 2017/18 2021/22 YTD ..and we can 8 talk to many f a more of them 3 o 2 o ° 2019/20 2021/22 YTD + Active customers are def
Slide 64: Successful loyalty program in Nordics
Customers for Life In Nordics we have built a successful loyalty program Successful rollout in the Nordics Clear customer benefits # of customer club members Always vty Club deals 6.3m discount every month/ 5.4m on specific week, as part - product of main categories campaign tad . leq | Extended vip
Slide 65: Launch of Currys Perks
Customers for Life Which has inspired the launch of Currys Perks lourys Pers Perks matches the best from the Nordics with offers that have high appeal for UK customers The best of us, a Member discounts on to with extra perks. @ tech throughout the ‘lear Get access to exclusive discounts, partner be
Slide 66: Bringing data together for stickier customers
Customers for Life Perks is just the first step in bringing together our data and using it to create stickier and more valuable customers We are bringing our disparate customer bases With this combined insight we can: together to create a single view of our customers ous Personalise oo ld {2.6m cust
Slide 67: Driving increased customer loyalty
Customers for Life We are driving increased customer loyalty For example: We can measure the loyalty of our We have 100k customers customer base by calculating how likely ’ 2 : a they are to return the next year in a particular segment: @aGA08888888 88) “Likelihood to Return” or LTR Based on modelli
Slide 68: Omnichannel shopping and frequency drive loyalty
Customers for Life Omnichannel shopping and frequency are key loyalty drivers - and already a core part of our strategy Omnichannel and cross-category behaviour: Customers who purchase from more than one category are 20% more likely to return? Customers who shop across both stores and online, are 27
Slide 69: Services and Credit are strongest loyalty drivers
Customers for Life But Services - Credit especially — are the strongest Loyalty drivers of all % of sales % Credit Sales with a service +71% : Customers without Services (ex. Credit) Credit Customers any Service Customers Impact on loyalty LIR of active Uk customers Credit helps customers afford the
Slide 70: Strengths across four stages of Services
Customers for Life We’re building on strengths across all four stages of Services We help you afford the amazing tech 10.8% UR sales through credit 1.4m UK Credit customers 02 27m deliveries in UK >6m Installations in UK >16Ok product set-ups >1.1m Products collected from home We help give your tech
Slide 71: Credit is strong with improvements coming
Customers for Life Credit is already strong - with improvements coming for new and existing customers We have strong foundations Our growth strategy is focused on four areas: Active credit accounts in UK . F . a, * Payind More flexible and tailored credit propositions: , Bonet oprcinel + Stimulate r
Slide 72: Customers value paid-for Services
Customers for Life In addition to Credit, we know customers value paid-for Services, and we have plenty of headroom The total market for Services ..and customers demonstrate a Currys has an estimated is Large... high appetite for paid-for services! 17% share in Services vs. our product share of 26%
Slide 73: Plans to turbo charge Services offer
Customers for Life We have committed plans to turbo charge our Services offer, moving from ‘transactional to ‘lifetime’ focus Transaction focused » 2 Lifetime solution ¥ Awider range of Services Y Customer insight driven features Y Transparent and competitive prices v Increases addressable market An
Slide 74: Services allow more sustainable choices
Customers for Life Services allow customers to make more sustainable choices 74
Slide 75: Customers for Life: building on core strategy
Customers for Life Customers for Life: building on our core strategy to create stickier, more valuable customers Capable and committed colleagues - easy shopping experience We are building Customers for Life \ie Data-driven personalised experiences @ Launched Currys Perks @ Insight-led new propositi
Slide 76: Questions?
Questions?
Slide 77: Sustainable Business
So: Sustainable Business Assad Malic
Slide 78: Our vision has a powerful purpose at its heart
Y | Our vision, ee” to help everyone enjoy amazing technology, has a powerful purpose at its heart
Slide 79: Proud of our achievements from 20/21
Sustainable business We're proud of our achievements from 2020/21 £ We help customers reduce We're taking action to reduce We are collaborating with 2 their environmental impact our environmental impact suppliers as a force for good Cc g 104k 4% 1.7m fot Tonnes e-waste collected across our group Red
Slide 80: Giving technology longer life
Sustainable business We’re leading the way in giving technology longer life - helping our we customers make greener choices and reduce their environmental impact We help you afford, choose and get started * Discover and choose * Afford * Delivery and installation * Set up and connectivity We help gi
Slide 81: Protecting our environment
Sustainable business Businesses have a crucial role to play to protect our environment, and that’s exactly what we're doing Beat previous targets We've reduced emissions by 80% since 2014/15 New targets — 50% reduction in scope 1, 2 and 3 emissions by 2029/30 against 2019/20. Net zero by 2040 for sc
Slide 82: Partnerships with suppliers are key
Slide 83: Equal access to the benefits of technology
Slide 84: Our colleagues are one team
Slide 85: Recognised and rated favourably
Slide 86: Our priorities
Slide 87: Our priorities
Slide 88: ESG metrics make up 40% of bonus scorecard
Slide 89: Financial profile
Slide 90: Key cashflow drivers
Slide 91: Targeting more than £250m sustainable free cash flow
Slide 92: Strong track record of revenue growth
Slide 93: Growth fuelled by complementary initiatives
Slide 94: What we sell
Slide 95: Who we sell to
Slide 96: How we sell it
Slide 97: Where we sell it
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Slide 100: Take out further ~£300m costs by 2023/24
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Slide 103: Right-shoring and digitising to reduce contact centre costs
Slide 104: Store colleagues to spend more time with customers
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Slide 109: Capital expenditure to normalise
Slide 110: Plan does not require more material exceptional cash costs
Slide 111: Drives £250m of annual sustainable free cash flow
Slide 112: Capital Structure & Allocation
Slide 113: Total indebtedness
500 500 0 0 • (500) (500) (1,000) (1,000) • (1,500) (1,500) (2,000) (2,000) • (2,500) (2,500) 2018/19 2019/20 2020/21 Average net cash / (debt) Working capital facilities Pension deficit (IAS17) Lease liabilities (IFRS16) Total indebtedness
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Slide 115: Aim to maintain prudent balance sheet
Slide 116: Capital allocation priorities
Slide 117: Shareholder return
Slide 118: Summary
Slide 119: Summary: Financial benefits by 2023/24
Slide 120: Questions?
Slide 121: Visit our new corporate website