dsgi final results 0809 slides final - dixons carphone€¦ · intense activity on our 5 point plan...

Preliminary resultsy52 weeks to 2 May 2009

25 June 200925 June 2009

Bringing life to technologyBringing life to technology

John BrowettChief Executive

Bringing life to technologyBringing life to technology2

Group performance

• Tough consumer environment

• Significant year of change• Managing recession• Transforming prospects of the business• Transforming prospects of the business• Fully funded business plan

U d l i PBT f £50 5• Underlying PBT of £50.5m• Underlying sales down 1%• Like for like sales down 9%Like for like sales down 9% • Gross margins up 0.2% in the second half

Bringing life to technology3

52 weeks to 2 May 2009 vs. 53 weeks to 3 May 2008For definitions see appendix. Excludes PC City Sweden, Markantalo in Finland and ElectroWorld in Hungary.

Intense activity on our 5 point plan

1. Focus on the customer• Restructured TV pricing• Improved ranges• Improved ranges• 3 hour time slots with next day delivery

2 Focus on winning positions2. Focus on winning positions• Closed 87 stores across the Group

• 46 in Italy, 20 in Finland, 9 in Sweden & 11 in Spain• Turnaround in Italy on track

3. Transform the business in the UK60 t f tt d t d• 60 stores reformatted at year end

• 19 further stores reformatted to date• 101 additional stores this year

Bringing life to technology

• Delivering 11% to 65% gross profit uplift*

4*= Year on year average gross profit uplift across the different formats of transformation for the 22 week period to 18 April 2009 compared to the rest of the stores within the relevant chain excluding those stores scheduled for refurbishment.

Intense activity on our 5 point plan

4. Win in the internet market• Good growth in sales• Doubling of profit to £15m• Doubling of profit to £15m• Moving new e-merchant platform in the UK

5 Reduce costs5. Reduce costs• £95 million in the 2008/09 financial year• £200 million of further costs identified over the next 4 years• £80 million to £130 million of working capital reduction initiatives

underway.


Fully funded business plan

• £293.6 million net proceeds from equity issue

• £400m revolving credit facility amended

• Positive response from shareholders to equity raising• Positive response from shareholders to equity raising

• Suppliers supportivepp pp

• Plan will deliver 3%-4% return on sales


Nicholas CadburyyGroup Finance Director


Underlying sales

£ million 08/09 07/08 YOY LfL

UK & I l d El t i l 2 658 2 927 (9%) (10%)UK & Ireland Electricals 2,658 2,927 (9%) (10%)UK Computing 1,571 1,819 (14%) (13%)UK & Ireland 4,229 4,746 (11%) (11%)

Nordics 1,625 1,469 11% (7%)

Southern Europe 1,405 1,326 6% (13%)Central Europe 161 146 11% n/aOther International 1,566 1,472 6%

E-commerce 807 652 24% 7%

Total Group Retail 8,227 8,339 (1%) (9%)



Underlying profit

£ million 08/09 07/08UK & Ireland Electricals 17.7 93.4 UK Computing 41.0 63.2UK Computing 41.0 63.2 UK & Ireland 58.7 156.6 Nordics 76.1 97.7 Southern Europe (19 4) (14 7)Southern Europe (19.4) (14.7)Central Europe (9.9) (2.8)Other International (29.3) (17.5)

15 0 7 5E-Commerce 15.0 7.5 Central Costs (25.0) (24.4)Retail (loss)/profit 95.5 219.9 Property (losses)/profits (18.1) (7.3)Underlying net finance (cost)/income (26.9) 13.0 Underlying (loss)/profit 50.5 225.6


y g ( ) p

9


Underlying profit before tax

£ million 08/09 07/08Loss before tax (140.4) (184.1)Trading results from Businesses to be closed 14 1 15 9Trading results from Businesses to be closed 14.1 15.9

Amortisation of acquired intangibles 4.9 4.4 Strategic Reorganisation 59.1 29.5 Distribution network re-org & PC City France closure 0.0 (8.8)g y ( )Business impairment - Italy (18.8) 341.3 Business impairment - Other 126.1 23.0 Buncefield release (1.9) 0.0 P fit l f i t t 0 0 (1 7)Profit on sale of investments 0.0 (1.7)Net fair value remeasurement 7.4 6.2

Other non-underlying 176.8 393.9 Total net non-underlying charges to add back 190 9 409 7Total net non underlying charges to add back 190.9 409.7 Underlying profit before tax 50.5 225.6 Underlying adjusted diluted EPS 0.7 7.2



Free cash flow

£ million 08/09 07/08Underlying profit before tax 50.5 225.6 y g p

Businesses to be closed profit before tax (14.1) (15.9)Depreciation & amortisation 135.7 137.1 Working capital (287.5) 8.6 Taxation (35 7) (53 1)Taxation (35.7) (53.1)Capital expenditure (141.8) (165.7)Sales of freehold property 10.8 41.5 Other (65.8) (48.9)

Free Cash Flow before restructuring items (347.9) 129.2

Net restructuring and impairment (64.7) (37.6)

Underlying Free Cash Flow (412 6) 91 6Underlying Free Cash Flow (412.6) 91.6



Funding - Net funds

£ million 08/09 07/08Opening Net Funds 50.1 224.9

Free Cash Flow (412 6) 91 6Free Cash Flow (412.6) 91.6

Dividends (60.3) (160.8)

Share buy back programme - (100.0)

Acquisitions & disposals (27.6) (19.7)

Discontinued operations (13.2) (5.0)

Special pension contribution (12 0)Special pension contribution (12.0) -

Other items (1.9) 19.1

Other movements in net funds (115.0) (266.4)Closing net (debt) / funds (477.5) 50.1

Restricted Funds (included in net debt) 67.6 66.5



John BrowettChief Executive


Outlook

• Following pattern of normal recession

• Planning for weak sales environment• Planning for weak sales environment

• Roll out of new format stores continues

• Fully funded business plan

• Continued focus on improving working capital andContinued focus on improving working capital and costs

• Will be well placed as we emerge from the recessionWill be well placed as we emerge from the recession

• Plan will deliver 3-4% return on sales over the medium term


term

14


25 June 200925 June 2009


Appendicespp


Appendices

1. Group 5 Year Financials

2. Group LFL Sales Trends

3 Group Store Numbers and Space3. Group Store Numbers and Space Trends

4 B k f ilit t4. Bank facility covenants

5. Shares in issue

6. Notes and definitions


1. Group 5 year financials

£ million 08/09 07/08 06/07 05/06 04/05

IFRS IFRS IFRS IFRS IFRS

Sales (1) 8,227 8,339 7,835 6,888 6,392

Retail Prof it 96 220 278 288 260

O i f i (2) 77 213 286 295 270Operating prof it (2) 77 213 286 295 270

Operating margin (2) 0.9% 2.6% 3.7% 4.3% 4.2%

Net Finance Income (2) (27) 13 22 27 28Net Finance Income ( ) (27) 13 22 27 28

Prof it bef ore tax (2) 51 226 308 322 299

Adjusted diluted EPS 0.7p 7.2p 9.6p 10.2p 9.3p

Depreciation (3) 136 137 137 131 128

Free cash f low (413) 92 166 297 290


(1) Excludes PC City France from 06/07(2) Figures shown on an underlying basis (3) Includes amortisation of other intangibles18

2. Group like for like sales trend

08/09 08/09 08/09 07/08 07/08 07/08 FY H2 H1 FY H2 H1 UK Computing (13%) (14%) (11%) (5%) (9%) 2%UK & Ireland Electricals (10%) (12%) (6%) 3% 0% 6%UK & Ireland (11%) (13%) (8%) 0% (3%) 5%

Nordics* (7%) (9%) (5%) 2% 0% 4%

Italy (9%) (9%) (7%) (11%) (14%) (7%)Greece (14%) (19%) (9%) 4% 3% 7%Spain (21%) (22%) (19%) (14%) (17%) (10%)Spain (21%) (22%) (19%) (14%) (17%) (10%)Southern Europe (13%) (15%) (10%) (8%) (11%) (4%)

Total International (10%) (12%) (8%) (3%) (5%) 0%

E Commerce 7% 6% 9% 27% 28% 26%E-Commerce 7% 6% 9% 27% 28% 26%

Total Group (Underlying) (9%) (11%) (7%) 1% (1%) 5%


* 07/08 Nordics like for like shown as previously reported, including PC City Sweden and Markantalo.

3. Group - stores & space

Total UK & IrelandStore numbers 08/09 07/08 06/07 05/06

UK Electricals 519 537 535 568Ireland 32 30 28 21UK & Ireland Electricals 551 567 563 589UK Computing 161 160 164 151Total UK & Ireland 712 727 727 740

Space 000 sq ft 08/09 07/08 06/07 05/06

UK Electricals 4,988 5,052 4,966 5,005Ireland 329 303 281 211Ireland 329 303 281 211UK & Ireland Electricals 5,317 5,355 5,247 5,216UK Computing 2,545 2,528 2,513 2,421Total UK & Ireland 7,862 7,883 7,760 7,637


, , , ,

20

3. Group - stores & space

Total InternationalStore numbers 08/09 07/08 06/07 05/06

Nordics 247 238 216 199Southern Europe 325 333 277 219Central Europe 29 22 17 10pOther International 354 355 294 229Total International 601 593 510 428

Space 000 sq ft 08/09 07/08 06/07 05/06

Nordics 3,562 3,493 3,163 2,899, , , ,Southern Europe 4,593 4,775 3,950 3,332Central Europe 755 709 570 371Other International 5,348 5,484 4,520 3,703


Total International 8,910 8,977 7,683 6,602

21

3. Group - stores & space total

Store numbers 08/09 07/08 06/07 05/06

UK & Ireland 712 727 727 740International 601 593 510 428Discontinued 9 9 18 17Businesses to be closed 30 45 44 30Businesses to be closed 30 45 44 30Total Group 1,352 1,374 1,299 1,215

Space 000 sq ft 08/09 07/08 06/07 05/06

UK & Ireland 7,862 7,883 7,760 7,637, , , ,International 8,910 8,977 7,683 6,602Discontinued 299 299 429 397Businesses to be closed 429 505 484 417


Total Group 17,500 17,664 16,356 15,053

22

3. Geographical store distribution

08/09 07/08 06/07 05/06UK & Ireland 712 727 727 740Southern Europe 325 333 277 219Owned Stores 230 261 236 218

Franchises 95 72 41 1Franchises 95 72 41 1

Nordic 247 238 216 199Owned Stores 148 140 138 130

Franchises 99 98 78 69

Central Europe 29 22 17 10Total Group (underly ing) 1,313 1,320 1,237 1,168p ( y g) , , , ,Owned Stores 1,118 1,149 1,118 1,098

Franchises 195 171 119 70


Bank facility covenants

Revised covenants to be tested quarterly (previously half-yearly)

Period ending on or about FCC EBITDA Leverage Interest Cover

30 April 200931 October 2009

1.20x1.30x

3.75x3.05x

Not tested4.90x

31 January 201030 April 201031 July 201031 October 2010

1.29x1.15x1.24x1.25x

2.20x4.25x4.20x3.65x

4.49x2.90x3.50x3.60x

31 January 201130 April 201131 July 2011

1.40x1.40x1.40x

2.50x2.50x2.50x

5.00x5.00x5.00x

NoteFCC EBITDA covenant calculated as EBITDA after adding back rental and operating lease expenses to the aggregate of interest and rental operating lease expenditure

● Margin structure375bps

FCC EBITDA covenant calculated as EBITDA after adding back rental and operating lease expenses to the aggregate of interest and rental operating lease expenditureLeverage covenant calculated as consolidated net debt to EBITDAInterest Cover covenant calculated as EBITDA to interest

Utilisation fee applicable+50bps if >50% drawn+150bps if >75% drawn


Shares in issue

Number of sharesPost rights 08/09 07/08Post rights 08/09 07/08& placement FY FY

Number of shares in issue 3,609.9m 1,772.4m 1,772.4m

Weighted average number 2,148.7m 2,184.6m of shares for basic eps *of shares for basic eps

Weighted average number 2,151.8m 2,190.4mf h f dil t d *of shares for diluted eps *


* The weighted average number of shares used in the calculation of earnings per share for both 2008/09 and 2007/08 has been multiplied by an adjustment factor to reflect the bonus element of the shares issued under the terms of the rights issue. The adjustment factor used was 1.2138.

Notes & Definitions1. Underlying results are defined as excluding trading results from businesses to be closed, the

amortisation of acquired intangibles, net restructuring and business impairment charges and other one off items, profit on sale of investments, net fair value remeasurements of financial instruments and, where applicable, discontinued operations. Discontinued operations in 2008/09 comprise Hungary and in 2007/08 comprised Hungary The Link and Genesis Businesses to be closedHungary, and in 2007/08 comprised Hungary, The Link and Genesis. Businesses to be closed comprise the operations of PC City in Sweden and Markantalo in Finland.

2. Like for like sales are calculated based on stores that have been open for a full financial year both at the commencement and end of the financial period. Customer support agreement sales are excluded from all UK like for like calculations. Operations that are subject to closure have salesexcluded from all UK like for like calculations. Operations that are subject to closure have sales excluded as of the announcement date. Stores subject to a refurbishment are excluded during the period of refurbishment.

3. UK & Ireland Electricals comprises Currys, Currys.digital and Dixons Travel as well as the operations in Ireland.

4. UK Computing comprises PC World, DSGi Business and The TechGuys. Like for like sales are for PC World only.

5. Nordics comprise the Elkjøp Group, and no longer include the results of PC City Sweden and Markantalo which are now classified as businesses to be closed within non-underlying items.

6. Southern Europe comprises Greece (Kotsovolos and Electro World), Italy (UniEuro), Spain (PC City Spain) and Turkey (Electro World).

7. Central Europe comprises Electro World operations in the Czech Republic, Poland and Slovakia and no longer includes the results of the discontinued operation Electro World Hungary. Central Europe

lt l d d f lik f lik i th b f t t di i i ffi i t f


results are excluded from like for like comparisons as the number of stores trading is insufficient for a meaningful like for like comparison to be made.

8. e-commerce division comprises PIXmania and Dixons.co.uk.26


25 June 200925 June 2009


dsgi final results 0809 slides final - dixons carphone€¦ · intense activity on our 5 point plan...

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