Half Year 2024 Currys PLC Earnings Call Transcript

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

Question: Matthew Abraham - Berenberg Bank - Analyst : Thanks for taking my question and congrats on a strong result. First, Currys just in reference to the cost savings target you've got for the full year. Are the announced and implemented measures in H1 sufficient to meet that target? Or is that going to be the magnitude introduce and implement new UI initiatives? The second query is in reference to that step forward in the UK&I gross margin that expanded in H1. Can you just talk to the materiality of the services as part of that gross margin expansion, given that it is in growth, as you called out, how material might be your new gross margin expansion day services continues to grow? Thank you.

Question: Matthew Abraham - Berenberg Bank - Analyst : Okay. Great. That's really helpful. Thank you. I'll pass it on.

Question: Richard Chamberlain - RBC Capital Markets - Analyst : Morning, Alex. Morning, Bruce. Three from me, please, if that's okay. Just a couple of quick ones on the Nordics. I just wondered, Alex, can just give us an update on net promoter scores there or how you're thinking about customer service and satisfaction. And it sounds like sort of mirroring the UK, priority insurance saw good growth online. How does that sort of penetration rate now compare with in store where it was a few years ago? Presumably, it's going up. And then on the pension, Bruce, I just wondered, have you had any sort of conversations with the trustees recently? I just wonder whether they're sympathetic to the idea of lower contributions now assuming Greece goes through early next year and when those lower contributions could eventually start to come through. Thanks.

Question: Adam Tomlinson - Liberum - Analyst : Morning, everyone. Three questions from me, please. The first one, just delving into the Nordics a bit more with that gross margin improvement, obviously a lot of self-help going on there. But can you maybe just talk a little bit about competitive behavior and how much confidence you have that rationality has returned to the market there and ultimately the confidence you have and the scope that gives you to return as the market recovers towards historic levels of profitability. That's the first question on the Nordics. Second question just on the UK, noting the detail you've given there around iD Mobile and the subscription base up 24% year on year. Just interested in your thoughts on what's driving that and whether that's changes at all your view in terms of the relative value of mobile operations within the group. And then finally, just the third question on stock. A little bit of color there, if that's okay, on the 200 million stock reduction year on year and how you're thinking about stock planning for the year ahead. That's the three questions. Thank you.

Question: Adam Tomlinson - Liberum - Analyst : Great. That's very helpful. Thanks a lot.

Question: Ben Hunt - Investec - Analyst : Hi there. Just wanted to focus a bit more on the UK gross margin. You mentioned many tailwinds that you're getting out of unprofitable sales that can add services element and it seems to be a much more rational market as you've seen from other players. Is there anything that's been restrained in the gross margin improvement? It's obviously, it's not a huge amount in this period. And I think one of the things you alluded to in the statement is a loss of share and online and you reference higher paid clicks. Of course, within that, do you see a way of potentially getting some cost savings through the online channel to make unit economics more sustainable? And then I have another question on the cost savings after that.

Question: Ben Hunt - Investec - Analyst : Well, yeah. You mentioned overtones that it's sort of not giving you, I mean, the modest improvement, I guess, in the gross margins. Has there been any sort of -- anything holding it back?

Question: Ben Hunt - Investec - Analyst : Sorry, just on that, we'll see attachment on subscribers, how many of them are actually getting a mobile phone on top of that connectivity?

Question: Ben Hunt - Investec - Analyst : Yes. Given that you are -- that seems to be where the market share loss is high. And you've alluded to the fact that it's the higher cost per clicks that's making it less economical. But any ways, you can improve the economics there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 14, 2023 / 9:00AM, CURY.L - Half Year 2024 Currys PLC Earnings Call

Question: Ben Hunt - Investec - Analyst : Okay, great.

Question: Nicolas Champ - Barclays plc - Analyst : Good morning. Thanks for taking my questions, I have two. To follow up on the market share erosion in the UK. I mean, do you expect this trend will continue over the coming months? And do you see any potential negative impact on your buying conditions from suppliers at some point? And the second one is about your working cap improvement in H1. I mean, appreciate the visibility is limited, but could you help us a bit on maybe what we could expect for the year? And is it sensible to forecast a working cap inflow this year given again, the improvement that you achieved in H1? Thank you.

Question: Nicolas Champ - Barclays plc - Analyst : Thanks.

Question: Warwick Okines - BNP Paribas - Analyst : Morning, everybody. Two quick questions. Firstly, I know you've answered a lot of questions about that Nordic gross margin already, but just can help us in this for the second half, is there any reason why you shouldn't see a similar and increase in the second half as you've seen in the first half? I think the sort of base of comparison is quite similar. And then secondly, you've not said much about the about products ready. So maybe you could say a bit more about the replacement cycle and an innovation cycle you're seeing at the moment?

Question: Warwick Okines - BNP Paribas - Analyst : Got it. Thanks very much, Alex.

Question: Simon Bowler - Numis Securities - Analyst : Good morning and two from myself, if I can. One, I'm obviously assuming the Greek cash comes in the sources and here at some point, and that's just kind of improve the strength of the balance sheet. Can you just tell us how we should be thinking about the impact that will have on your net finance charges and for fiscal year '25. And then secondly, can you just remind us where you are on employee pay versus the national living wage and I wrote with sensitive objects by any sort I have around and how you plan to manage that as you come through to impacting in April. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 14, 2023 / 9:00AM, CURY.L - Half Year 2024 Currys PLC Earnings Call

Question: Simon Bowler - Numis Securities - Analyst : Okay, great. Thank you. And then sorry, one final, really geeky one. Can you just kind of touch on the iD Mobile accounting and just wondering why that's the gross margin headwind. It's an attached bearing, I presume your COGS effectively is the cost of that phone. What are you recognizing in terms of revenue on day one, is that some sort of estimate of future spend or how does that part work on an IT contract?

Question: Simon Bowler - Numis Securities - Analyst : Thank you.

Question: Nick Coulter - Citigroup - Analyst : Hi. Good morning. Two very quick questions, please. I'm not sure if the granularity is available, but are you able to share your relative market share performance in the categories that matter to Currys, please. It does sound like you're winning where you choose to play. And I guess following on from that, more generally, how do you see the UK consumer at this point? I guess as Simon touched on it, seems to some degree of wage inflation that will necessarily continue to play through. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 14, 2023 / 9:00AM, CURY.L - Half Year 2024 Currys PLC Earnings Call

Question: Nick Coulter - Citigroup - Analyst : Brilliant. That's very helpful. Thank you.