Presentation is loading. Please wait.

Presentation is loading. Please wait.

Interim Results 2013 Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of.

Similar presentations


Presentation on theme: "Interim Results 2013 Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of."— Presentation transcript:

1 Interim Results 2013 Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of WH Smith PLC. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. Nothing in this presentation should be construed as a profit forecast. The financial information referenced in this presentation does not contain sufficient detail to allow a full understanding of the results of WH Smith PLC. For more detailed information, please see the interim results announcement for the six months ended 28 February 2013 which can be found on the Investor Relations section of the WH Smith PLC website -

2 Interim Results 2013 WH Smith PLC Interim Results April 2013

3 Interim Results 2013 WH Smith PLC  IntroductionKate Swann  Financial reviewRobert Moorhead  Business reviewStephen Clarke  SummaryKate Swann

4 Interim Results 2013 Group – overview  Further strong profit performance from the Group, another resilient performance from High Street with further good growth from Travel  Cash generative Group with a strong balance sheet - optimal use of cash continues to be a focus  Returned £28m to shareholders via the share buyback  Interim dividend up 13% YoY  Challenging economic environment – continue to manage the business tightly whilst investing for the future  Resilient business with consistent record of profit growth and cash generation  Opportunities for continued growth

5 Interim Results 2013 Robert Moorhead Group Finance Director

6 Interim Results 2013 Group financial summary 6 mths to Feb 2013 £m 6 mths to Feb 2012 £m Change % Revenue638665(4)% Profit from trading operations % Profit before tax69665% EPS p40.0p11% Free cash flow (£m)5863(8)% Interim dividend per share9.4p8.3p13% 1 Stated after directly attributable share-based payment and pension service charges 2 Diluted (weighted average number of shares 2013:129m; 2012:135m)

7 Interim Results 2013 Group profit before tax 6 mths to Feb 2013 £m 6 mths to Feb 2012 £m Growth % Travel trading profit % High Street trading profit % Profit from trading operations % Unallocated central costs(8) Group operating profit69665% Net finance cost(1) Pension interest 2 11 Profit before tax69665% 1 Stated after directly attributable share-based payment and pension service charges 2 From 1 September 2013 the revised IAS 19 requires pension interest to be based on the net balance sheet pension surplus or deficit. This is currently nil. As we continue not to recognise the accounting surplus on our balance sheet, there will be no pension interest income in our Income Statement (comparatives will be adjusted for prior periods).

8 Interim Results 2013 Revenue analysis Revenue 6 mths to Feb 2013 £m 6 mths to Feb 2012 £m Change % LFL Change % Travel %(4)% High Street422448(6)%(5)% Total revenue638665(4)%(5)% LFL sales by category 6 mths to Feb 2013 % Stationery(2)% Books(6)% News & Impulse(4)% Total(5)%

9 Interim Results 2013 Profit from trading operations 6 mths to Feb 2013 £m 6 mths to Feb 2012 £m Change % Revenue638665(4)% Gross contribution Costs(269)(276) Costs – occupation costs(119)(118) – store costs(98)(101) – other costs(52)(57) Profit from trading operations % Gross margin54.2%52.6%160bps 1 Before interest and tax and after directly attributable share-based payment and pension service charges

10 Interim Results 2013 Group free cash flow 6 mths to Feb 2013 £m 6 mths to Feb 2012 £m Operating profit6966 Depreciation, amortisation and impairment18 Working capital-(1) Net capital expenditure(24)(19) Net tax received / (paid)(7)(5) Provisions(1)- Non cash items34 Free cash flow5863

11 Interim Results 2013 Group net funds 6 mths to Feb 2013 £m 6 mths to Feb 2012 £m Free cash flow5863 Dividends paid(23)(20) Pension deficit and retirement benefit funding(6)(7) Net purchase of own shares for employee share schemes-(3) Purchase of own shares for cancellation(22)(21) Acquisition of Fresh Plus and Funky Pigeon earnout(2)- Net cash movement512 Closing net funds4153

12 Interim Results 2013 Group balance sheet Feb 2013 £m Aug 2012 £m Goodwill & other intangible assets5854 Property, plant & equipment Working capital(45)(52) Corporation tax(45)(40) Provisions(7) Other assets74 Operating assets employed Net funds 4136 Total net assets (excluding pensions) Pension liability-(1) Total net assets161149

13 Interim Results 2013 Return of cash to shareholders Financial Year Ordinary Dividend £m Buyback £m Special Dividend £m Total £m & Consistent record of growing dividends Supplemented by buybacks and a special dividend Whilst continuing to invest in the business 2 1 Cash dividend paid and interim dividend announced. 2 £28m returned at 10 April

14 Interim Results 2013 Group key indicators 6 mths to Feb mths to Feb 2012 Growth % EPS44.2p40.0p11% Fixed charges cover1.8x1.7x ROCE58%61% Free cash flow (£m)5863 Interim dividend per share9.4p8.3p 13%

15 Interim Results 2013 Stephen Clarke Group Chief Executive Designate

16 Interim Results 2013 Travel – overview  Good profit performance up 7% to £29m, despite economy  Total sales flat; LFL sales down 4%  Gross margin improvement of c.160 bps YoY; costs well controlled  Continue to invest for the future: technology, resources, space and format development  Well-positioned for further growth in the UK and internationally  as the economy improves and UK passenger numbers return to growth; well positioned across 5 UK channels  UK unit growth continues; 12 opened in H1; 30 planned for the year  successful international development; performance good; 78 units now open; 121 units won in total internationally

17 Interim Results 2013 Travel – Air  In Air, LFL sales down 4%  Economic climate impacting UK passenger numbers; continued variability between airports  Medium-term forecasts show return to growth; we are well positioned for recovery  Margin and cost management successful  Continue to invest in service and improved efficiency  Continue to win new space; 4 new units opened in the UK in H1; further 3 units due to open in the UK in H2

18 Interim Results 2013 Travel – Rail and Motorway Rail  In Rail, LFL sales down 5%  LFL London mainline rail down 5%, regional rail down 6%  Invest in new technology to improve efficiency  Continue to win new space; 1 new unit opened in H1; further 4 units due to open in H2 Motorway  Performance in line with expectations  1 new unit opened  122 units trading, all bar 7 units operate as franchises

19 Interim Results 2013 Travel – Hospitals and Workplace Hospitals  Further good progress made in the hospital channel  In Hospital, LFL sales were down 1%, demonstrating different channel dynamics to other areas of our business  119 units now open in this channel  5 new units opened in H1; further 5 due to open in H2  Expect to continue to open new space into the long-term Workplace / Other  24 units now open and performing well  1 new unit opened in H1; further 6 due to open in H2  Expect to continue to open new space in this underdeveloped channel

20 Interim Results 2013 Travel – International  International continues to grow rapidly; performance continues to be good  Successful first half in terms of winning new stores; announcing today a further 20 new units, plus an additional 30 kiosks in China  Total of 121 units now opened or planned internationally  Continue to utilise three operating models across four channels  Around 2/3 of units run as franchises LocationUnits openUnits plannedTotal Middle East SE Asia / Australasia India25429 Other Europe10111 Scandinavia9110 Total China kiosks121830

21 Interim Results 2013 Travel – International Chinese KioskQatar Airport

22 Interim Results 2013 Travel – Margin and cost management  Expect economic conditions to continue to remain challenging in the short-term  Continue to manage margins and costs in line with the trading climate  Margin management opportunity continues:  category mix management  Cost efficiency improvements through:  improved use of technology  supply chain  back office efficiencies

23 Interim Results 2013 Travel – Space management  Invest in active management of our space  Constant effective evolution of space mix  Meet customer and landlord needs, optimise category mix and improve service and efficiency  Examples in H1 include:  reduction in Book space in Air; increase in Impulse space  increase in space to Kids categories  further space to self – checkouts in Air and Rail  Further opportunities

24 Interim Results 2013 Travel – Format development  Opportunity to build on our expertise with the travelling customer  Opportunity to build on our relationships with landlords and extend into new areas  Aim to leverage our operating expertise and infrastructure  Trials to extend the WHSmith brand and develop and trial new brands: - WHSmith Express - Funky Pigeon - WHSmith BooksPlus - Memories of WHSmith Café - Zoodle - Fresh Plus  Trials working in partnership with other third party brands: - Costa - Marks & Spencer

25 Interim Results 2013 Travel – Format development

26 Interim Results 2013 WHSmith High Street

27 Interim Results 2013 High Street – overview  Strategy continues to deliver  Resilient profit performance in challenging trading conditions  LFL sales down 5%  Good market shares  Further improvement in gross margin; up by c.160 bps  Cost savings of £9m delivered; in line with revised guidance  Continued strong cash generation  Resilient business well positioned to continue to perform

28 Interim Results 2013 Category performance - Stationery  Continue to build on market positioning in Stationery  Good shares across Stationery category  New gifting ranges performed well over Christmas  Post Christmas stock position in line with plan Funkypigeon.com  Strong performance over the Christmas period and Valentine’s day  Encouraging results from new ranges  New tablet and phone apps launched

29 Interim Results 2013 Category performance - Books  Market performance continues to vary by category  Continue to utilise space to optimise category dynamics  Consistently robust market share performance reflects our continued appeal to consumers in the physical books market  Customer base lighter, less affluent book readers with relative strength in Kids and Non-Fiction  eBooks incremental opportunity for WHSmith  Around 80% of eBook downloads are Fiction  Optimise space between physical books, eReaders and other categories

30 Interim Results 2013 Kobo performance  Territory deal with Kobo in the UK  Good performance from new season eReaders over Christmas period  Price deflation in eReader market – WHSmith competed strongly  Launched Kobo shops into our 100 largest High Street stores  Positive customer feedback and encouraging performance to date  Agreement to launch further 100 Kobo shops by Autumn 2013

31 Interim Results 2013 Category performance – News & Impulse  News and Magazine market continues to be tough  Continue to grow market share  Further development of strongly-growing bookazine category  Impulse provides opportunity for growth  Strong performance from seasonal impulse ranges

32 Interim Results 2013 High Street – Space management  Optimal use of space has been one of the fundamentals of our strategy  Enabled us to change category mix dramatically, improve margins and increase store efficiency  Space treated as a strategic asset  High level of expertise in the area  Major space changes conducted at least twice a year  Key changes in H1 focussed on cost reduction  Continue to see opportunities

33 Interim Results 2013 Margin optimisation  Margin growth of c.160 bps, delivered through continued focus on category mix management both across and within categories  Additional margin growth from:  better buying terms and improved sourcing, including further Far East office utilisation  improved mark-down and promotional management  improved shrinkage  Continue to see further opportunities to grow margin

34 Interim Results 2013 Cost efficiency  Continued successful and focussed cost control  Delivered savings of £9m in H1, in line with revised guidance  Continually aim to adjust variable costs to sales  Savings from across the business, projects large and small New tills Voice picking Increasing sorter productivity

35 Interim Results 2013 Kate Swann Group Chief Executive

36 Interim Results 2013 Summary  Strong profit performance from the Group  Economic environment continues to be challenging; continue to manage the business tightly whilst investing for the future  Strong profit performance in Travel demonstrating the strength of the business, with further opportunities for growth in both the UK and internationally  Robust performance from High Street, demonstrating profit growth and continued strong cash generation  Good progress with share buyback - £28m returned to shareholders to date  Interim dividend up 13% YoY  Resilient Group with clear strategy, well executed and further growth opportunities both in High Street and Travel

37 Interim Results 2013 WH Smith PLC Interim Results April 2013


Download ppt "Interim Results 2013 Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of."

Similar presentations


Ads by Google