Full Year 2025 WH Smith PLC Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Harry Gowers - JPMorgan Chase & Co - Analyst : Yeah, thank you. Good morning, everyone. First question, maybe I could just ask sort of on the UK profit bridge from 2025 to 2026. And if you could give any detail, maybe on the moving parts around sort of underlying growth, inflationary pressures and the reinvestment or disruption costs that you envisage. And then the second question, just again on the UK, you talk about a bit of a tougher consumer outlook. So how are you seeing that kind of manifest itself in the UK estate? Like are you seeing any pressure on spend across any of the formats or categories? And then a third question just on North America, clearly the more normalized margin going forward is going to be seven to 8% into next year. But what is the midterm margin potential of this business off the lower base? Is it all about the mixed shift towards travel essentials and away from in motion and resorts or what other positive margin drivers should we be thinking about? Thanks a lot.

Question: Harry Gowers - JPMorgan Chase & Co - Analyst : All very clear, thank you.

Question: Richard Taylor - Barclays - Analyst : Yeah, thank you. I've got two questions, please. One is on capex and returns. You've been very clear you will be returns focused on your investments going forward. So I realize you're not going to chase contracts. But if there are good contracts out there in the US, do you have enough headroom in terms of investment capacity, in terms of the of the debt you're happy to run with? albeit making the paybacks are quite quick by the looks of it and related to that is your interest coupon at all affected by the sort of leverage you're running apps and so is there a level of debt that [Daru] would ideally stay below and does that have any knock-on effects for investment decisions? And secondly, I you've talked about the profit bridge in the UK but can you give us some colour on longer term margin? It sounds like quite a few headwinds this year from specific items so How should we think about that longer term versus the 15.6 and the union just reported? Thank you.

Question: Jonathan Pritchard - Peel Hunt LLP - Analyst : Morning all. The question we threw up, may just to follow up on how his question on travel essentials margin in the States. Can you just give us another level of granularity and understand that the way that the mix in the States will be affected by more travel essentials in the mix. But how specifically will you widen that? trouble essentials margin? That's the first question. Definitely we've got the sort of medium term dream for the States. We've got the medium term dream for the UK. Just give us the medium long term rest of the world dream from a margin perspective. I get 5% for next year, but where can that go? And then a lot of people have written a lot of words on this, but what's your opinion? What's wrong with Las Vegas? Maybe there were some structural issues with the fashion and specialty stores. um But it seems as though Vegas

Question: Jonathan Pritchard - Peel Hunt LLP - Analyst : Yeah, absolutely, thank you very much.

Question: Fintan Ryan - Goodbody Stockbrokers UC - Analyst : Good morning, everyone. Just one question for me, please. And I think really following on from the last point around the US margins, I appreciate there's a lot of things have been revealed in the last few months. But if we are comparing to the 13% to 14% margin that maybe people had in their numbers on sort of June, July for North America versus the sort of 7% to 8% margin that you're talking to now for FY26. Can you sort of appreciate you've given bridges in terms of supplier financing and inventories, but now that you've given the disclosure around the resorts in motion and sort of travel essentials, can you sort of bridge that gap in terms of like, was previously in your numbers in motion was a double-digit margin. Now it's a 5% margin and like resorts was The teens now it's under 10%. I guess also just with that point as well, given you're taking a review of some of the in motion estate and the resorts part of the estate, there are a risk or need to maybe review some of the contracts that you have in your sort of core travel essentials business and potentially go back to landlords for rent reviews or other sort of things that might have now come out of the woodwork given the more forensic approach that you're taking to that region. Thank you.

Question: Tim Barrett - Deutsche Bank AG - Analyst : Hello. Morning all of you. I just wanted to start with a big picture question really in terms of the four to five percent cost inflation we talk about in the UK. It feels a bit higher than I might have guessed. What are the main contributors to that? And do you think you can pass much of it on through price in the year ahead? And I think just secondly, a procedural thing really, how long do you think the FCA investigation will take? And have you put anything in terms of any m outcome of that in your net debt guidance? Thanks very much.

Question: Tim Barrett - Deutsche Bank AG - Analyst : Okay, sorry, just a boring follow-up. Business rates, is there much inflation there following the um budget? How does that work actually in places like airports? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 19, 2025 / 8:30AM, SMWH.L - Full Year 2025 WH Smith PLC Earnings Call

Question: Tim Barrett - Deutsche Bank AG - Analyst : Understood. All right.

Question: Hai Hyun - UBS - Analyst : Hi, I have a couple of questions, please. First of all, the like for like. So in North America, so in current trading, it's around 1%. Could you walk me through how you're building up to the 6% to 8% total growth guidance in North America? given that you're also doing a portfolio review there, right? Opening 35 to 40 stores, but closing 30 stores. So that's the first question. The second one is on the UK. Also similar kind of question where, like for like a 2% year to date, how do you get to 3% to 5% growth given there'll be trading disruptions from portfolio review as well? And actually on that, on the UK, are you also seeing a softening in terms of airports? besides the UK rail softening.

Question: Hai Hyun - UBS - Analyst : Understood, thank you. And sorry, just to follow up with the last one in terms of, so this year it looks like elevated closures to go to portfolio review and moving to franchise model in the rest of the world. But how do you see the medium term store opening target going forward?

Question: Hai Hyun - UBS - Analyst : That's it. Thank you very much. Thank you.

Question: Nicholas Barker - BNP Paribas - Analyst : Thank you very much for taking my question and good morning to you all. Just a little bit of a clarification. So you've explained how you can widen the North American Travel Essentials margin from around that 10%. Will that ever reach the kind of 14%, 15% margin seen in the UK? And if so, Why not? if so, how quickly could that happen? And then my second question would just be on the uh CEO recruitment process. How is that going? And is there any update there? Thank you. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 19, 2025 / 8:30AM, SMWH.L - Full Year 2025 WH Smith PLC Earnings Call