Slide 1: FY21 Interim Results
HALFORDS GROUP PLC FY21 INTERIM RESULTS 18TH NOVEMBER 2020
Slide 2: Agenda
2 Agenda FY21 H1 Financial Performance Loraine Woodhouse, CFO FY21 H1 Strategic Update Graham Stapleton, CEO FY21 Current Trading & Summary Graham Stapleton, CEO Q&A
Slide 3: FY21 H1 Financial Performance
3 FY21 H1 FINANCIAL PERFORMANCE Loraine Woodhouse, CFO
Slide 4: FY21 H1 Group Financial Highlights
4 FY21 H1 Group Financial Highlights • Strong revenue growth of +9.6%, +6.7% LFL with an accelerating trend in Q1 followed by a strong and stable Q2 • Autocentres growth strong at +38.7% boosted by our acquisitions of McConechy’s and Tyres on the Drive • Group PBT of £56.0m, +£30.1m above last year,
Slide 5: Group Financial Overview
5 Group Financial Overview FY21 H1 vs. FY20 +9.6% YoY Revenue £638.9m +6.7% LFL Underlying PBT pre-IFRS 16 £56.0m +116.2% YoY Non-Underlying items (£0.6m) PBT after Non-Underlying items post-IFRS £55.4m 16 Basic Underlying EPS pre-IFRS 16 23.0p 121.2% YoY Free Cash Flow £169.2m +£125m YoY Net cash £
Slide 6: FY21 H1 Group PBT
6 FY21 H1 Group PBT Group PBT Bridge -£1.8m £19.5m -£2.1m £5.4m £9.2m £56.0m £25.9m Note:
Slide 7: FY21 H1 Group PBT Impacts of COVID-19
7 FY21 H1 Group PBT Impacts of COVID-19 Group PBT Bridge -£1.8m £19.5m £5.2m -£14.8m £11.8m £10.2m £56.0m £25.9m Note:
Slide 8: FY21 H1 Retail Financial Overview
8 FY21 H1 Retail Financial Overview LFL Sales Growth +4.8% YoY Revenue £524.2m +8.1% LFL 57.1% 54.9% 54.4% Gross Margin 47.0% -1 bps 3.2% Operating Costs* £190.1m -9.5% YoY Q1 Q2 H1 -23.7% Underlying EBIT* £56.2m +124.8% YoY -45.4% Motoring Cycling Note: *numbers are reflected on a pre-IFRS 16 basis
Slide 9: FY21 H1 Retail Gross Margin
9 FY21 H1 Retail Gross Margin Retail Gross Margin % Gross Margin Improvement FY 21 47.0% (90 bps) 310 bps FY 20 47.0% (220 bps) 47.0% 47.0% FY 19 46.6% FY20 Mix Profitability Commissions and FY21 improvements adjustments FY 18 45.7%
Slide 10: FY21 H1 Retail Operating Costs
10 FY21 H1 Retail Operating Costs Retail Operating Costs Bridge -£7.6m -£8.0m £0.8m £210.0m -£16.5m £11.4m £190.1m
Slide 11: FY21 H1 Autocentres Financial Overview
11 FY21 H1 Autocentres Financial Overview +38.7% YoY Revenue £114.7m Autocentres YoY -2.0% LFL EBIT by Period Gross Margin 60.6% -797 bps Operating Costs* £65.4m +22.2% YoY P1 P2 P3 P4 P5 P6 Underlying EBIT* £4.1m +28.1% YoY Note: *numbers are reflected on a pre-IFRS 16 basis
Slide 12: FY21 H1 Group Gross Margin %
12 FY21 H1 Group Gross Margin % Group Gross Margin % Bridge 150bps (220bps) 50bps (50bps) 50.1% 49.4% Note: On slide 9, Cycle Republic is included within the overall Retail bridge. Commissions on this slide are included within Rate.
Slide 13: FY21 H1 Group Cash Flow
13 FY21 H1 Group Cash Flow FY21 FY20 YOY £m £m £m Average stock EBIT 58.4 24.4 34.0 Depreciation & Amortisation 18.0 19.4 -1.4 £188.5m Working Capital* 98.1 33.5 64.6 Provisions Movement* 9.9 -1.5 11.4 Employee Share Scheme 1.6 1.1 0.5 Operating Cash Flow 186.0 76.9 109.1 £148.6m Capex -11.9 -16 4.1
Slide 14: Net Cash and Dividend
14 Net Cash and Dividend Net Cash £m 97.8 (62.6) (73.2) P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 FY21 FY20 Net Debt to EBITDA Dividend per Ordinary Share Debt target of 1x 2 (with range up to 1.5x for M&A) 1.5 1 0.5 17.00p 17.50p 18.00p 18.57p 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 F
Slide 15: Strategy Update
15 STRATEGY UPDATE Graham Stapleton, CEO
Slide 16: Summary of FY21 H1
16 Summary of FY21 H1 Group PBT Group sales growth • Proven operational agility and resilience £56m +9.6% • Capitalised on tailwinds (+116% YoY) • Mitigated headwinds Cycling GP% Growth of Group Improvement service-related sales • Good financial performance +300bps +16.0% • Strong progress against o
Slide 17: Our strategy is more relevant than ever given changes in customer behaviour
17 Our strategy is more relevant than ever given changes in customer behaviour Growth of Group online Group sales through • Accelerated shift to online and home sales online delivery channels +148% 49% (+26.7ppts YOY) Autocentre sales Average growth in jobs through Halfords • Convenience and safety
Slide 18: To Inspire and Support a Lifetime of motoring and cycling
18 To Inspire and Support a Lifetime of motoring and cycling
Slide 19: Strategic Pillars
19 Strategic Pillars 1 Inspire our customers through a differentiated, super-specialist shopping experience 2 Support our customers through an integrated, unique and more convenient services offer 3 Enable a lifetime of motoring and cycling Underpinned by: Focus on Cost and Efficiency Investment in
Slide 20: Reminder of our accelerated strategy
20 Reminder of our accelerated strategy “Evolve into a consumer and B2B services-focused business, with a greater emphasis on motoring, generating higher and more sustainable financial returns.”
Slide 21: Our Strategic Focus for FY21
21 OUR STRATEGIC FOCUS FOR FY21
Slide 22: A Reminder of our FY21 Priorities
22 A Reminder of our FY21 Priorities A focus on cost and efficiency, creating a leaner and more profitable business Continue to build a unique and market-leading position for motoring services Enhancing our Group web platform and digital customer experience, to create an even more differentiated and
Slide 23: Strategic Highlights: Cost and Efficiency
23 Strategic Highlights A focus on cost and efficiency, creating a leaner and more profitable business • On track to deliver cycling profitability improvements of +300bps o Simplifying our ranges and componentry o Improvements in buying terms o Promotional effectiveness o Lower working capital requi
Slide 24: Strategic Highlights: Motoring Services
24 Strategic Highlights Continue to build a unique and market-leading position for motoring services • Increased the scale of our Halfords Mobile Expert proposition by adding more vans, more technicians and hubs to serve a wider geographic reach. • Rolled out our upgraded ‘PACE’ system, our in- gara
Slide 25: Strategic Highlights: Web Platform and Digital Experience
25 Strategic Highlights Enhancing our Group web platform and digital customer experience, to create an even more differentiated and specialist proposition • Conversion improvements of +47% driven by; o New stock availability comms – “Email me when back in stock” and registration for new ranges o “Fr
Slide 26: Strategic Highlights: CRM and Cross-Shop
26 Strategic Highlights Double the number of customers shopping across the Group through further development of our CRM capabilities and cross-shop opportunities • Launched our ‘WeCheck’ app to digitally capture information from our motoring WeCheck services • Integration of Tyres on the Drive to ou
Slide 27: FY21 Additional Investments
27 FY21 Additional Investments • Fusion o New store and garage formats, aligning physical locations with our mobile capability and digital experience • Lifetime o Initiate a meaningful step towards playing a broader more engaged role in customers lives, ultimately driving relevance around existing a
Slide 28: Strategic Highlights: Investment in our Colleagues
28 Strategic Highlights Investment in our Colleagues • Large scale recruitment programme underway to fill motoring and cycling service-related roles across the Group • Investment in skills and training • Focus on colleague safety • Frontline Colleague Support Scheme paying over £2.3m to colleagues w
Slide 29: Current Trading and Summary
29 CURRENT TRADING AND SUMMARY
Slide 30: Current Trading
30 Current Trading • Halfords continues to operate as an essential retailer – all stores and garages remain open • Colleague and customer safety remains our number one priority • Shape of trading was strong over 5 weeks to the 5th of November • Trading has been impacted since lockdown; o Cycling gro
Slide 31: Summary of FY21 H1
31 Summary of FY21 H1 Group PBT Group sales growth • Proven operational agility and resilience £56m +9.6% • Capitalised on tailwinds (+116% YoY) • Mitigated headwinds Cycling GP% Growth of Group Improvement service-related sales • Good financial performance +300bps +16.0% • Strong progress against o
Slide 32: Q&A
32 halfords Q&A
Slide 33: Contact and Newsflow
33 Contact and Newsflow For further information, please go to www.halfordscompany.com or contact: Neil Ferris Corporate Finance Director neil.ferris@halfords.co.uk Next newsflow: 14th January 2021: FY21 Q3-week trading update