Christmas 2016/17 Trading and Management Update

24 Jan 2017

Fifth consecutive year of Christmas growth

Trading update (10 weeks ended 7 January 2017)

Q3 2016/17 revenue Year-on-year
Sterling
Year-on-year
local currency
Like-for-like1
UK & Ireland 4% 3% 6%
Nordics 15% 1% (1)%
Southern Europe 24% 6% 5%
CWS 38% 34% n/a
Group 8% 3% 4%

1 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

Note
In the UK & Ireland, like-for-like revenue improved by approximately 4% as a result of sales transferred from closed stores. This mainly affected UK&I electricals, where year-on-year sales for these products were +5% with like-for like revenue at +9%. We anticipate that this programme will be substantially complete by the end of the financial year.

Seb James, Group Chief Executive, said:

“I am pleased to be reporting another good Christmas period of growth – our fifth consecutive year. At a time of significant political uncertainty around the World, it was heartening to see that customers were choosing to enjoy the benefits that new technologies could bring to their lives during this holiday season. This year, as a result of our scale in all of our markets, we were able to offer prices that were truly ground-breaking during both our Black Friday week and our annual Boxing Day week sales - while maintaining margins - and we believe that we have outperformed the market during the period. As a result, and despite the fact that there is quite a bit of the year to go, we anticipate a meaningful uplift in year-on-year profitability this year over last and confirm our outlook in line with market consensus at £475m-£495m of headline profit before tax for the year ending 29 April 2017.

It was interesting to see the shape of peak trading this year: Black Friday was our biggest ever across the Group and in the UK we saw trading stretch further across the week as well. Customers across the Nordics have taken Black Friday truly to their hearts, although the Nordic market was a little quieter than normal across the period. The Nordic team took the decision to optimise margins which were up year-on-year as a consequence. In all markets it was a strong year online with significant growth, including white goods. Patchy availability of the larger, higher margin phones and tablets made these categories tougher this year but - on the other hand - offers up opportunities for next year where we do not expect the same issues. Large screen TV, in our view a bellweather for consumer sentiment, showed a solid performance over peak in all markets which we were glad to see. Finally, the KNOWHOW trial in Leeds is achieving fantastic NPS levels and we are also delighted to welcome a very experienced and senior CEO for this division, Feilim Mackle, with a remit to transform and grow our successful services proposition.

Generating a successful Christmas means starting planning in January, and the teams are already hard at work making sure that our next Christmas season will be even better. I would like to thank my remarkable, hard-working and resilient colleagues for the time and effort that they have put in over this holiday period to achieve these results. I am very proud to be a part of this great company, as we look forward to another year of innovation and growth.”

Investor and analyst webcast

There will be a management presentation for investors and analysts at 09:00 am (GMT) this morning. The presentation will be broadcast on our website, www.dixonscarphone.com via a listen-in only webcast.

Dial-in - UK/Int’l: +44 (0) 20 3059 8125; passcode: 6389 (to be quoted to the operator)

Seven-day replay - UK/Int’l: +44 (0) 121 260 4861; passcode: 5028006 followed by #

Next announcement

The Group will publish its Q4 trading update Wednesday 24 May 2017.

For further information

Kate Ferry
IR, PR & Corporate Affairs Director
+44 (0)7748 933 206

Mark Reynolds
Head of Investor Relations
+44 (0)7979 696 498

Hannah Collyer
Head of Media Relations
+44 (0)7834 256 775

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 eleven 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 the Geek Squad and Knowhow.

Dixons Carphone's primary brands include Carphone Warehouse, CurrysPCWorld and Simplifydigital in the UK & Ireland, Elkjøp, Elkjøp Phonehouse, Elgiganten, Elgiganten Phonehouse, Gigantti and Lefdal in the Nordic countries, Kotsovolos in Greece, Dixons Travel in a number of UK & Ireland airports and Phone House in Spain. Our key service brands include Knowhow in the UK, Ireland and the Nordics, and Geek Squad in the UK, Ireland and Spain.

Business-to-business (B2B) services are provided through Connected World Services (including honeyBee software products), 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.

Dixons Carphone was voted ‘Retailer of the Year’ at the Retail Week Awards 2016.

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.