Preliminary ResultsPreliminary Results · Other asset write downs (24.9) - Net fair value remeasurementNet fair value remeasurement (2.8) (0.8) Other non-underlying (300.9) 22.4 Total

Preliminary ResultsPreliminary Results52 weeks to 30 April 2011

23 June 2011

John BrowettJohn BrowettChief Executive

Renewal & Transformation plan is paying off

• Sales, margins and operating profits maintained in challenging markets

• Increasing market shares– Particularly in the UK & Nordics

• Customer satisfaction measures continue to improve• Customer satisfaction measures continue to improve

• Store transformation working– Over 380 stores now reformatted– 70 Megastores now open with average annual sales of £20m– New formats continue to deliver average gross profit uplifts

– 20% in the UK 15% in the Nordics20% in the UK, 15% in the Nordics– Maintained into second year

3 Preliminary Results 2010/1123 June 2011

The way ahead

• Delivering a customer focused model

• Further benefitsR lli t t f t d M t– Rolling out new store formats and Megastores

– Improving the selling model– Services through KNOWHOW across the Group– Development of multi-channel– Leaner operating model– Faster stock turn

• Technology cycle favours Dixons Retail– Better product mix

S i l d b i d l– Service led business model


Significant improvement in overall satisfaction with staffDi R t il F ll UK E t t St ff M b P i d (% St l A )•Dixons Retail Full UK Estate Staff Measures by Period (% Strongly Agree)

High levels particularly encouraging given old

Average increase since P4/5: 9%

+10 +10+10 +10 +8+9 +9

+6+11

+10+9

brand perceptions

P4/5 P6/7 P8/9 P10/11 P12/13

878886 86 90

72 73 73 76 75 70 70 6977 75

8471 74 72 77 76 70 69 68

76 7485

78 77 74 79 78 73 72 7180 78

8777 78 77 81 80 77 74 74

81 798883 83 83 86 85 80 79 78

86 8390

Trust the advice given

Staf f were f riendly and enthusiastic

Approached in reasonable

amount of time

Suff icient time and attention

Staf f knowledge

Told about relevant af ter

sales services

Helped me choose

product that best met my

needs

Helped me to choose all

the accessories I

needed

They kept the store clean

and tidy

Interested in what was

right for me

I didnt feel pressured to buy anything I didnt want

Base All respondents who spoke to staff: P12/13 UK: Dixons: 6401


Service led business model


Renewal & Transformation programme

• Exit poor performing

Clean up Developing core components

Roll out execution

• Format • Megastores andExit poor performing businesses

• Clear the rubble

Format

• Selling model

• Services

Megastores and 2-in-1 format

• KNOWHOW launched• Identify process

improvements

• Cost reductions

• Multi-channel

• Low cost model

launched

• Property portfolio determined

• Establish voice of the customer

• Stock management • FIVES selling model

• Internet platform established

• CRM processes in place


Renewal & Transformation opportunity

UK & I Nordics Other Int’l E-commerce

Format

Selling model

S iServices

Multi-channel

Low cost model

St k tStock management


Robust performance in UK & Ireland

• Profit held at £71million• Strong first half performance

– Strong World Cup promotion– Launch of iPads

• Good sales period over Peak pahead of VAT rise

• Weaker consumer environment in f th tfourth quarter

• 3rd year of strong gross margin performancep

• Launch of KNOWHOW• Trading ahead of the market52 weeks to 30 April 2011 vs. 52 weeks to 1 May 2010For definitions see appendix


Managing a more efficient store portfolio in the UK

• UK store portfolio reduced to 612 from 758 in 2007 • Progressing to ideal store portfolio

High Street 70

Megastores 70

2 in 1 Superstores 3102-in-1 Superstores 310

450– Pragmatic approach– 2-in-1 Superstores offer win-win for Dixons and Landlords

• Average lease lengthsUK hi h l h 3– UK high street less than 3 years

– UK out of town less than 10 years– International less than 6 years


Transforming our services offer

SETUP & UPGRADE

HELP & SUPPORT

REPAIR & PROTECT

DELIVER & INSTALL UPGRADE SUPPORT PROTECTINSTALL

● Personalised hassle free set up

● Make it easy for

● “Help me understand it”

● Market leading delivery & installation

● Peace of mind if something goes wrong● Make it easy for

the customer● Range of

upgrades designed to

● Remove the frustration of technology

● Telephone, online and in

installation● Flexible,

reliable and unbeatable value

goes wrong● Always there to

help get it fixed

gmaximise the performance of the products for customers

online and in-home support

value● Choices to suit

the customer


Another strong performance in the Nordics

• Total sales up 8%• Like for like sales up 5% in the year

Lik f lik l 9% i H2• Like for like sales up 9% in H2• Gross margins up 0.5%

P fit t £105 6• Profits up to £105.6m– EBIT margin of 4.7%

• Internet sales up 34% to 6% of total salesInternet sales up 34% to 6% of total sales• Store refurbishment programme making good progress

– 20 Megastores now operational– 39 superstores in new format– Potential for 60 Megastores

52 weeks to 30 April 2011 vs. 52 weeks to 1 May 2010For definitions see appendix


Important transition year in the Nordics• Established clear market leadership

– Strong performance in Finland, Denmark & Sweden– Further market share development opportunity

• Preferred operating model– Efficient centralised processes– Cost to sales ratio under 20%– Low cost route to market

• Local competition lacks scale• Successful franchise model• Successful franchise model• Multi-channel opportunity

– 6% of sales online with significant f th t itfurther opportunity

• Services opportunity



Turnaround in Italy is working

Italy• EBITDA profit in the full year

– Cash flow neutral

• Turnaround ahead of planC t t l t k t d il bilit ll i d– Cost control, stock turn and availability all improved

– Gaining share in a difficult market– 19 stores in 2-in-1 format– 2 Megastores now open

• Strong World Cup performance

• Weak consumer environment continues



Other International Greece Central Europe TurkeyGreece Central Europe

• Challenging market conditions • Strong position in Czech

Turkey

• Good progress in store roll out with partnerChallenging market conditions

• Focus on– Cost management– Customer service

• Support from suppliers

Strong position in Czech Republic

• Developing business in Slovakia • 20 Stores now operational• Strong growth online

out with partner– 19 stores– 4 franchise– Focus on Istanbul, Izmir and

AnkaraO t it i d l iSuppo o supp e s

• Weakening competitor set• Market share growth

– Now 5% of sales• Loss significantly reduced

• Opportunity in developing market


Investing in e-commerce platform• Internet sales 16% of Group

• Sales growth in multichannel +13%– Multichannel driven by reserve&collectMultichannel driven by reserve&collect– Integrated operating model– Focus on profitable channel

I ti i th l tf• Investing in the e-commerce platform– e-merchant– PIXplace

P l b d d i i hi h it th– Pure play brands driving higher unit growth– Re-launched UK internet sites

• Pixmania Stores giving significant competitive advantage– Internet pricing – High sales per sqm– Potential for fast roll out


Technology cycle favours Dixons Retail

• Computing– Tablets– Windows 8– Cloud computing– Apps

White goods• White goods– Design– Energy efficiency

• Vision– 3D– Internet enabled– Picture quality – colours, refresh rate– Design – thin bezel– OLED


Nicholas CadburyNicholas CadburyGroup Finance Director

Financial summary• Underlying EBIT of £127.6m

• Group Gross Margins were up 0.1%– Second year of flat or growing gross marginsy g g g g

• Exit of loss making operations of PC City in Spain announced

• Sale and leaseback of Swedish warehouse raising £59 million

• Agreement in principle with the trustees of the UK defined benefit scheme

P iti f h fl b f t t i it f £38 9 illi• Positive free cash flow, before restructuring items, of £38.9 million

• Achieved £50 million cost reduction– Further £150 million over next 3 yearsy

• Non underlying charge of £309.4m, of which £39m is cash



Sales performance ahead of our markets• Underlying sales down 2% to £8,154.4 million

– Down 1% excluding effect of currency

• Down 2% like for like• Down 2% like for like.

£ million 10/11 09/10 YOY (1) LfL

UK & Ireland 3,816.1 4,013.5 (5%) (3%)

Nordics 2,268.9 2,093.7 +7% +5%

Other International 1,226.7 1,291.6 (2)% (5%)

E-commerce 842.7 921.2 (5)% (5%)co e ce 8 9 (5)% (5%)

Total Group 8,154.4 8,320.0 (1)% (2%)

52 weeks to 30 April 2011 vs. 52 weeks to 1 May 2010For definitions see appendix(1) Currency neutral sales performance


Profit before tax flat year on year in tough markets

£ million 10/11 09/10

UK & Ireland 71.3 71.1 N di 105 6 97 4Nordics 105.6 97.4 Other International (21.6) (8.3)E-Commerce 0.9 11.3 Central Costs (15.8) (19.5)Property losses (12.8) (18.8)EBIT 127.6 133.2 Underlying net finance cost (42.3) (42.3)Underlying profit before tax 85 3 90 9Underlying profit before tax 85.3 90.9 Non-Underlying items (309.4) 21.8 Statutory profit/ (loss) before tax (224.1) 112.7



Non underlying items - predominantly non-cash

£ million 10/11 09/10

Underlying Profit Before Tax 85.3 90.9 Trading results from Businesses to be closed (8 5) (0 6)Trading results from Businesses to be closed (8.5) (0.6)

Amortisation of acquired intangibles (4.5) (4.6)Strategic Reorganisation (17.1) (5.6)Business impairment - Pixmania (106.3) - Business impairment - Spain (70.6) - Business impairment - Greece (53.2) - Business impairment F Group (21 5)Business impairment - F-Group (21.5) - Change in pension benefits - 33.4 Other asset write downs (24.9) - Net fair value remeasurement (2.8) (0.8)Net fair value remeasurement (2.8) (0.8)

Other non-underlying (300.9) 22.4 Total net non-underlying charges (309.4) 21.8 Total (loss) / profit before tax (224 1) 112 7


Total (loss) / profit before tax (224.1) 112.7


Positive free cash flow• Positive free cash flow - despite significant capex investment in R&TPositive free cash flow despite significant capex investment in R&T

• Negative paid days stock

• Closing Net Debt £206.8 million (including £120.3 million restricted funds)

£ million 10/11 09/10

U d l i l b f t 85 3 90 9

g ( g )

Underlying loss before tax 85.3 90.9 Closed Businesses loss before tax (8.5) (0.6)Depreciation & amortisation 139.4 128.6 Working capital 40.4 39.7 g pTaxation (26.2) (31.9)Capital expenditure (223.2) (165.3)Other 31.7 (33.3)

Free Cash Flow before restructuring items 38 9 28 1Free Cash Flow before restructuring items 38.9 28.1

Net restructuring and impairment (28.9) (45.7)

Free Cash Flow 10.0 (17.6)52 weeks to 30 April 2011 vs. 52 weeks to 1 May 2010For definitions see appendix


Cost reduction programme

• Organisation simplification and process improvements– £150m targeted over next 3 years

Stock Management

Store operating costs

Central functions

St k t St ff t i R l f d li ti• Stock turn improvements

• Buying – local and Group

• Staff rostering• Optimise store

footprintFrom 612 to 450 stores

• Removal of duplication• Brno – central services• Call centre diagnostics

Group• Reductions in aged

stock and returns

− From 612 to 450 stores− Mezzanines

• Energy efficiencies• POS efficiencies and

• Advertising

POS efficiencies and simplification


Implementing cost efficiencies

CheaperEasierBetter

Easier for staff to set-upStandardise Point of Sale fixtures £6mClearer communication

with customersEasier for staff to set up

generic point of sale fixtures and signage

Reduced Stock Loss £9mEasier for staff to fulfil

customers ordersImproved availability of

products

£18.5mImproved Staff Scheduling

Right staff in the store to meet customer requirements

More time for sales staff to assist customersrequirements

Combining home delivery and

installation service£27m

Faster and cheaper delivery services and installation on delivery

Greater job satisfactioninstallation service installation on delivery


Rephased maturity profile of Bonds and RCF

• November 2012:– £160m Bond repayment– £65m net hedge cost£65m net hedge cost

• August 2013– RCF working capital facility matures– Renegotiate prior to 2012 Bond repayment

• November 2015– £150m Bond repayment


Flexibility in capex plans

• Over 380 stores transformed to date, including 70 Megastores− Core base providing cash and profit momentum

• Complete balance as soon as practical• Complete balance as soon as practical

• However, retain flexibility to respond to consumer environment

2010/11 2011/12 2012/13 2013/14

Maintenance £40m £40m £40m £40m

Renewal & Transformation £170m £60m to £120m £40m to £110m £100m to £150m

No. stores 125 40 - 125 60 - 125 80 - 150


Flexibility to meet capital commitments

Cash generation Cash requirementsCas ge e at o Cas equ e e ts

Capex flex +£50m to +£150m Pension fund -£6m to - £8m

Working capital +£10m to +£40m Bond repayment -£160m principal-£65m hedge cost

Warehouse +£59m

F ilit t £100Facility up to £100m


Summary

• Stable gross margins

• Focused on cash generationg– Flexibility in capex plans– Cost reduction plans

P t di l ti d– Property disposals actioned– Closed loss making operations in Spain– Working capital opportunities

• Maintaining significant headroom on facility


John BrowettJohn BrowettChief Executive

Summary

• Renewal & Transformation plan is working

• Gross margins stableGross margins stable

• Business is improving for customers

• Growing market shares

• Cautious about short term outlook• Cautious about short term outlook

• Significant opportunity for profit improvement


AppendicesAppendices

All t t t th th t t t f hi t i l f t d i thi t ti i l di ith t

Cautionary statement● All statements other than statements of historical fact made in this presentation, including, without

limitation, those regarding Dixons Retail’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Dixons Retail’s renewal and transformation plan, the roll out of “Megastores”, its focus on increasing its presence on the web and its ongoing expansion in the Nordics and Central and Eastern Europe), are forward looking statements. Such statements are based on current expectations and are subject to a g p jnumber 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.

● Such forward-looking statements are based on numerous assumptions regarding Dixons Retail’s present and future business strategies and the environment in which Dixons Retail will operate in the future. Among the important factors that could cause Dixons Retail’s actual results, performance orfuture. Among the important factors that could cause Dixons Retail s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, the continuing impact of the economic downturn on consumer spending, the actions of its competitors, difficulty in implementing the renewal and transformation plan, stock availability from or change in the commercial relationships with third-parties whose products we sell, failure to meet debt obligations, changing technology or consumer preferences, seasonality of our business, the effects of deflationary pricing on money margins and other such risk factors Forward-looking statements should thereforepricing on money margins and other such risk factors. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this presentation. Unless otherwise required by applicable law, regulation or accounting standard, 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.

● The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advise or recommendation with respect to such securities or other financial instruments.


Appendices

1. Group LFL Sales Trends

2. Group Store Numbers and Space Trends

3 Shares in iss e3. Shares in issue

4. Notes and definitions


1. Group like for like sales trend

10/11 10/11 10/11 09/10 09/10 09/10 08/09 08/09 08/09 FY H2 H1 FY H2 H1 FY H2 H1 UK & Ireland (3%) (7%) 2% (3%) 3% (11%) (11%) (13%) (8%)

Nordics 5% 9% 1% 13% 16% 11% (7%) (9%) (5%)

Other International* (5%) (6%) (5%) 0% 4% (4%) (12%) (14%) (9%)

Pure play e-commerce (5%) (8%) 0% 11% 12% 9% 7% 6% 9%

Total Group (Underlying) * (2%) (4%) 1% 2% 6% (4%) (8%) (10%) (6%)

* Note: Comparatives restated to exclude PC City Spain


2. Group - stores & space total

Store numbers 10/11 10/11 09/10 09/10 08/09 08/09FY H1 FY H1 FY H1

UK & Ireland 642 653 683 697 712 725N di 285 276 269 259 253 247Nordics 285 276 269 259 253 247Other International 308 293 291 283 304 314Pure play e-commerce * 17 17 16 16Discontinued or closed 34 32 32 32 89 87Total Group 1,286 1,271 1,291 1,287 1,358 1,373

Space 000 sq ft 10/11 10/11 09/10 09/10 08/09 08/09FY H1 FY H1 FY H1

UK & Ireland 8,187 7,957 7,889 7,897 7,862 7,911Nordics 4,223 4,209 4,061 3,821 3,675 3,671Other International 4,429 4,189 4,311 4,290 4,488 4,759Pure play e-commerce * 24 24 23 23Pure play e commerce 24 24 23 23Discontinued or closed 414 408 408 408 1,588 1,580Total Group 17,277 16,787 16,692 16,439 17,613 17,921

* e-commerce comparatives for 10/11 and 09/10 restated to include Pixmania pick up stores and space.


3. Shares in issue

Number of shares10/11 09/10 08/0910/11 09/10 08/09

FY FY FY

Number of shares in issue 3,610.4m 3,609.9m 1,772.4m

Weighted average number 3,606.6m 3,495.6m 2,148.7m of shares for basic eps *of shares for basic eps

Weighted average number 3,618.9m 3,519.5m 2,151.8mf h f dil t d *of shares for diluted eps *

* The weighted average number of shares used in the calculation of loss per share for 2008/09 and the weighted average relating to the relevant weeks of 2009/10 prior to the rights issue have 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 & Definitions

1. Underlying results are defined as excluding trading results from businesses to be closed and closedbusinesses, the amortisation of acquired intangibles, net restructuring and business impairmentcharges and other one off non-recurring items, profit on sale of investments, net fair valueremeasurements of financial instruments and, where applicable, discontinued operations.Discontinued operations comprise Hungary and Poland Business to be Closed comprises PC CityDiscontinued operations comprise Hungary and Poland. Business to be Closed comprises PC CitySpain. Closed businesses 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 thecommencement and end of the financial period, and are calculated using constant exchange rates.Customer support agreement sales are excluded from all UK like for like calculations Operations thatCustomer support agreement sales are excluded from all UK like for like calculations. Operations thatare subject to closure have sales excluded as of the announcement date. Stores subject to arefurbishment are excluded during the period of refurbishment. All e-commerce pick up store sales areincluded in like for like sales.

3 The change in underlying sales for the Group excludes businesses to be closed closed businesses and3. The change in underlying sales for the Group excludes businesses to be closed, closed businesses anddiscontinued operations.

4. UK & Ireland comprises Currys, CurrysDigital, PC World, DSGi Business, KNOWHOW and DixonsTravel as well as the operations in Ireland. Like for like sales exclude DSGi Business.

5. Nordics comprises the Elkjøp Group and Dixons Travel Denmark.

6. Other International comprises Greece (Kotsovolos), Italy (UniEuro, PC City store in store and DixonsTravel Italy), and Electro World in Turkey, Czech Republic and Slovakia.

7. Pure play e-commerce division comprises Dixons.co.uk and PIXmania.


Documents

Preliminary ResultsPreliminary Results · Other asset write downs (24.9) - Net fair value remeasurementNet fair value remeasurement (2.8) (0.8) Other non-underlying (300.9) 22.4 Total