Slide 1: FY19 Preliminary Results
HALFORDS GROUP PLC FY19 PRELIMINARY RESULTS ST MAY 21 2019 Classification: Restricted
Slide 2: Agenda
2 Agenda CEO Update Graham Stapleton, CEO FY19 Financial Performance & FY20 Outlook Loraine Woodhouse, CFO Summary Graham Stapleton, CEO Q&A Classification: Restricted
Slide 3: CEO Update
3 CEO UPDATE Graham Stapleton, CEO Classification: Restricted
Slide 4: FY19 Group Financial Summary
4 FY19 Group Financial Summary • Group revenue +1.1% LFL; Retail +0.8% and Autocentres +2.6% • Gross margin improved by 70bps • Operating costs well controlled in H2; Full year cost growth 4.3% • Underlying PBT of £58.8m, down £12.8m year- on-year • Strong cash generation with Free Cash Flow up £1.2
Slide 5: FY19 Operational Highlights
5 FY19 Operational Highlights • Positive progress against strategy set out at CMD • Strengthening market leadership in Cycling • Autocentres second consecutive year of profit growth • Continuing to increase the number of services and for our customers; Group service related sales represent 24% of ov
Slide 6: FY20 Outlook
6 FY20 Outlook • FY20 Profit Before Tax broadly in line with FY19* • Consumer confidence and the economic environment remain challenging • Greater emphasis on cost control and efficiency key to underpinning profit growth in FY21 • Strategy remains the right direction for Halfords • Capital investmen
Slide 7: FY19 Financial Performance & FY20 Outlook
7 FY19 FINANCIAL PERFORMANCE & FY20 OUTLOOK Loraine Woodhouse, CFO Classification: Restricted
Slide 8: Retail Financial Overview
8 Retail Financial Overview LFL Sales growth +0.0% YoY 12.4% Revenue £977.2m +0.8% LFL Gross margin 48.0% +60bps 3.3% 2.6% Operating costs £410.5m +5.0% YoY 1.0% FY19 H1 FY19 Q3 FY19 Q4 FY19 -0.3% -0.4% Underlying EBITDA £87.1m -12.0% YoY -3.4% -5.4% Underlying EBIT £58.8m -19.0% YoY Motoring Cyclin
Slide 9: Retail Gross Margin
9 Retail Gross Margin FY19 48.0% *FY19: $1.32 48.0% (10 bps) 10 bps *FY18: $1.29 20 bps FY18 47.4% 40 bps FY17 48.6% *FY17: $1.41 47.4% FY16 51.2% *FY16: $1.55 *Average USD$ rate Classification: Restricted
Slide 10: Retail Operating Costs
10 Retail Operating Costs Retail operating cost growth 8.0% 5.0% 2.0% FY19 H1 FY19 H2 FY19 Extract from interim results presentation: November 2018 Classification: Restricted
Slide 11: Autocentres Financial Overview
11 Autocentres Financial Overview +2.2% YoY £5.5m Revenue £161.4m +2.6% LFL £4.1m Gross margin 68.0% +50bps Operating costs £104.2m +1.7% YoY £2.1m Underlying EBITDA £11.1m +5.7% YoY FY17 FY18 FY19 Underlying EBIT £5.5m +34.1% YoY EBIT Classification: Restricted
Slide 12: Group financial overview
12 Group financial overview +0.3% YoY Revenue £1,138.6m +1.1% LFL Gross profit £579.0m +1.5% YoY Underlying PBT £58.8m -17.9% YoY Basic Underlying EPS 24.1p 24.5p -18.6% -17.2% YoY Free Cash Flow £42.7m +2.9% YoY Full Year Dividend* 18.57p +3.0% YoY Notes: *Classification: Full year Restricted propo
Slide 13: Group Cash Flow
13 Group Cash Flow -£10.4m -£29.4m £90.4m -£7.9m -£36.7m £42.7m £6.0m EBITDA Working Capex Tax & Free Cash Ordinary Net cash Capital other Flow Dividend & inflow other Classification: Restricted
Slide 14: Group Cash Flow – movement year-on-year
14 Group Cash Flow – movement year-on-year -£4.0m £7.6m -£14.3m £11.9m £41.5m £42.7m £10.6m FY18 EBITDA Stock Capex Tax/other FY19 Classification: Restricted
Slide 15: Net debt to EBITDA
15 Net Debt 1.8 1.6 1.4 Debt target of 1x (with range up to Net debt to EBITDA 1.2 1.5x for M&A) 1 0.8 0.6 0.4 0.2 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Classification: Restricted
Slide 16: FY20 Guidance
16 FY20 Guidance • FY20 Profit Before Tax to be broadly in line with FY19* • Expect underlying sales growth to be muted in FY20, given the current challenging economic backdrop and consumer environment • Expect underlying cost growth in FY20 to be lower than FY19 despite inflation • Operating cost i
Slide 17: Summary
17 SUMMARY Graham Stapleton, CEO Classification: Restricted
Slide 18: Summary
18 Summary • Positive sales growth despite a tough retail backdrop • Strong cash generation supporting the full year dividend • Underlying Profit Before Tax disappointing, but in line with guidance given in January • FY20 Profit Before Tax to be broadly in line with FY19 • CMD Strategy continues to
Slide 19: Q&A
Q&A Classification: Restricted
Slide 20: Appendix
20 APPENDIX Classification: Restricted
Slide 21: Medium-term financial targets
21 Medium-term financial targets 1 Grow sales faster than the markets in which we operate 2 Increased Free Cash Flow over the period FY19 to FY21 compared to previous 3 years 3 Grow the ordinary dividend every year 4 Net debt target of 1.0x EBITDA with a range of up to 1.5x for appropriate M&A Class
Slide 22: Capital allocation priorities
22 Capital allocation priorities 1 Maintaining a prudent balance sheet 2 Investment for growth 3 Grow the ordinary dividend 4 Appropriate M&A 5 Surplus cash returned to shareholders Classification: Restricted
Slide 23: Contact and newsflow
23 Contact and newsflow For further information, please go to www.halfordscompany.com or contact Nima Dattani Head of Investor Relations and Corporate Finance nima.dattani@halfords.co.uk Mobile: +44 (0)7484 938360 Next newsflow: 4 September 2019: FY20 20 week trading update th Classification: Restri