Dixons Carphone plc
Trading Update
(10 weeks ended 6 January 2018)
· Group revenue up 4% year-on-year, like-for-like revenue up 6%
o UK & Ireland like-for-like revenue up 3%
§ Electricals up 1% against strong comparables, up 10% on a two-year basis
§ Mobile up 8% benefiting from phasing of iPhone X launch and new propositions
o Strong growth in Nordics; like-for-like revenue up 11%
o Excellent performance in Greece; like-for-like revenue up 23%
· Continued market share gains in electricals across the Group
· Gross margin: challenges in UK mobile continued, modest reduction in UK electricals margin
· Expect to deliver Group Headline PBT for 2017/18 in the range of £365m to £385m1
o Mobile debtor revaluation expected to be towards the better end of negative £10m-£40m range
· Stronger cash conversion with net debt expected to reduce to c. £250m by the year end
Q3 2017/18 revenue |
Reported revenue % change |
Local currency % change |
Like-for- like % change2 |
UK & Ireland |
1% |
1% |
3% |
Nordics |
9% |
8% |
11% |
Greece |
28% |
23% |
23% |
Honeybee |
(84)% |
(84)% |
n/a |
Group |
4% |
4% |
6% |
Note: In the UK & Ireland, like-for-like revenue in the quarter improved by approximately 1% as a result of sales successfully transferred from closed stores. This mainly benefited UK&I electricals, where like-for-like revenues grew 1%
Seb James, Group Chief Executive, said:
"I am pleased to announce a 6% growth in Group like-for-like revenue over Christmas this year against strong comparables last year. The stars of the show were unquestionably Greece and the Nordics where like-for-like revenues rose by 23% and 11% respectively and I was also satisfied, in this more cautious consumer environment, with like-for-like growth of 3% in the UK&I. In UK&I electricals, our Boxing Day sales did not quite mirror the promise of our very strong Black Friday week, but we are very confident that we grew market share in pretty much every category. Particularly strong this year were Large-Screen TVs, Gaming, Smart Tech, and SIM free phones; we sold just under one in three SIM free phones in the UK market over the period, further strengthening our customer relevance. Our international businesses had a terrific Christmas period with Greece enjoying its first real Black Friday and the Nordics benefiting from better availability and delivery propositions following our investment in a new small product warehouse last year.
Our UK mobile business had a strong sales period helped by better iPhone X availability and we grew share in SIM free and SIM only over the period. Current market conditions mean that gross margins continue to be challenged in phone. In short, the whole team did a great job, and my most sincere thanks to everybody for their hard work during this busy period.
Looking forward we continue to keep our antennae twitching for any material change in consumer behaviour, but remain relentless in our focus on providing the best value, choice, and service to our consumers. For the remainder of this year we have an early Easter, a new Samsung phone and the first week or two of our World Cup promotion to look forward to, and work continues on redefining and refocusing our Carphone Warehouse business to be a simpler, less capital intensive model. We expect to deliver a full-year PBT in the range £365m to £385m and, with rather better cash conversion this year, we expect year-end net debt to be c. £250m."
1 Headline PBT consensus for 2017/18: range £340m-£399m, average £377m
Operational highlights:
UK & Ireland
· Electricals like-for-like up 1%, up 10% on a 2-year basis
· Gross margin down mainly due to mobile, in electricals some increased costs in margin due to channel mix
· Growth driven by strong performance and market share gains in Large-Screen TVs, SDA, Mobile and Gaming with continued market share gains in MDA and maintained share in Computing
· Mobile like-for-like up 8% benefiting from the phasing of iPhone X as well as substantial market share growth in SIM free handsets and SIM only
· Overall handset share up, we sold just under one in three UK SIM free phones across the UK & Ireland
· Grew our Your Plan credit account base to over 500,000 with £1.6bn of credit approved since launch
Nordics
· Record Black Friday and peak period with particular strong performances in Mobile, Audio Visual and Gaming with improvements in availability and conversion
· Growth across all territories with standout performances in Sweden and Norway
· Rebranding of Lefdal in Norway to Elkjøp underway to further improve efficiency
Greece
· Excellent performance across all categories with particularly strong growth in Mobile, Large-Screen TVs and White Goods
Updated 2017/18 Financial Guidance
· Expect to deliver Group Headline PBT for 2017/18 in the range of £365m to £385m (previously £360m to £400m)
· Mobile debtor revaluation expected to be towards the better end of negative £10m to £40m range
· Exceptional cash outflow in 2017/18 now c. £50m (previously £40m) including Lefdal rebranding in Norway and tail end of the UK property optimisation programme
· Year end net debt expected to be c. £250m
· All other guidance remains unchanged
Investor and analyst call
There will be a conference call for investors and analysts at 8:30am GMT (9:30am CET) this morning
Dial-in details - UK/International: +44(0) 20 3936 2999; passcode: 18 25 77
Seven-day replay - UK/International: +44(0) 20 3936 3001; passcode: 66 57 56
Next announcement
The Group will publish its preliminary results on Thursday 21 June 2018
For further information
Assad Malic |
IR, PR & Corporate Affairs Director |
+44 (0) 7414 191 044 |
Mark Reynolds |
Head of Investor Relations |
+44 (0) 7979 696 498 |
Nick Cosgrove, Helen Smith |
Brunswick Group |
+44 (0) 207 404 5959 |
Information on Dixons Carphone plc is available at www.dixonscarphone.com Follow us on Twitter: @dixonscarphone and @DCSebJ |
About Dixons Carphone: Dixons Carphone plc is Europe's leading specialist electrical and telecommunications retailer and services company, employing over 42,000 people in nine countries. Focused on helping customers navigate the connected world, Dixons Carphone offers a comprehensive range of electrical and mobile products, connectivity and expert after-sales services from Team Knowhow. Dixons Carphone's primary brands include Carphone Warehouse and Currys PC World in the UK & Ireland, Elkjøp, Elkjøp Phonehouse, Elgiganten, Elgiganten Phone House, Gigantti and Lefdal in the Nordic countries, Kotsovolos in Greece, and Dixons Travel in a number of UK airports as well as Dublin and Oslo. Our key service brand is Team Knowhow in the UK, Ireland and the Nordics. Business-to-business (B2B) services are provided through Connected World Services, Currys PC World Business and Carphone Warehouse Business. Connected World Services aims to leverage the Group's existing expertise, operating processes and technology to provide a range of services to businesses. |
Certain statements made in this announcement are forward-looking. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward-looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Information contained on the Dixons Carphone plc website or the Twitter feed does not form part of this announcement and should not be relied on as such.
2 Like-for-like revenues are calculated based on Headline store and internet sales using constant exchange rates. New stores are included where they have been open for a full financial year both at the beginning and end of the financial period. Revenues from franchise stores are excluded and closed stores are excluded for any period of closure during either period. Customer support agreement, insurance and wholesale revenues along with revenue from Connected World Services and other non-retail businesses are excluded from like-for-like calculations. Revenues from Carphone Warehouse stores-within-a-store are included in like-for-like
