Q3 2022 Currys PLC Trading Statement Call Transcript

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

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : At the risk of starting with a really boring one, U.K. electrical like-for-like last year with plus 8%, and then it's minus 7% this year. I'm just trying to work out how the 2-year was plus 3%, a kind of similar maths told in the other divisions. I just want to check I'm not missing anything in terms of how that's being calculated or what's feeding into it.

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : Okay. Yes, yes, yes. Of course. Okay, fine. And then I guess if I heard you correctly, you said the market was up 8% on a 2-year-on-year view. And I guess, therefore, kind of either way, that kind of plus 3% would look to be kind of share loss on a 2-year view. Is that the correct rate to read that? And what do you think is kind of going on from that perspective?

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : So -- and then one quick one on cost. I just want to touch on mobile, if it's okay. On the cost side, I think, you mentioned some kind of variable cost element. Was there any kind of reversal of bonus accruals that you made in the first half that's kind of captured within your full year expectations?

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : Perfect. And then finally, on mobile, and that looks to have been kind of like-for-like growth in the period. And I mean I think mobile revenue is only going to be down kind of 10%, 15% or so year-on-year versus -- I think, originally, when you closed the stores, we would have expected the mobile business to kind of half year-on-year into this year as well. Can you talk a bit around what's going on there? And given that much stronger revenue performance, I presume profitability in that division is also kind of far more robust than we would have been expecting this year. Can you give a sense of kind of how far off your breakeven target you think you would be for that division this year?

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : Okay. So -- and then just a quick follow-up on that. I presume a good chunk of that mobile business is kind of postpaid sales, and well, I think one of the big cost out bucket has been kind of removing some of the IT infrastructure to do with that sort of sales base. Can you just talk around how that's been folding, whether there's actually opportunities to keep that business so the cost doesn't come out, but obviously, it still hasn't been profitable or whether you can still take that cost out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2022 / 9:00AM, CURY.L - Q3 2022 Currys PLC Trading Statement Call

Question: Tony Shiret - Panmure Gordon (UK) Limited, Research Division - Analyst : A couple of things. First of all, you talked about containing costs by cutting back on PPC. I just wondered if you could give us a bit more color on the sort of marketing strategies you've engaged in, the digital marketing strategies, and whether you're -- notwithstanding the deterioration in sales immediately prior to Christmas, what your views on the ROAS on that spend is. And the second thing is in terms of the OpEx, I sort of remember from your Capital Markets Day, you've outsourced the distribution to [XPO] or something like that. And I presume that has made distribution more of a variable type of element rather than having to pay people fixed amount and then not distributing stuff. So I just wondered what sort of benefit you've seen from that sort of move to outsource distribution.

Question: Tony Shiret - Panmure Gordon (UK) Limited, Research Division - Analyst : Just coming back. I just wondered if you might put some numbers on any of that commentary. I mean, for example, what is your percentage of organic traffic now versus a year ago, say? And what sort of pounds millions savings do you think you've made over Christmas by not having to sort of pay the whole distribution cost versus presumably some cost per piece type of arrangement with expert? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2022 / 9:00AM, CURY.L - Q3 2022 Currys PLC Trading Statement Call

Question: Adam Stuart Tomlinson - Liberum Capital Limited, Research Division - Analyst : Three from me, please, three questions. The first one, just on price increases. Can you maybe just give a little bit of color on price increases you've put through so far just underlying to try and offset some of the cost pressures, perhaps as well with reference to what you've seen in the market and any thoughts on how that might evolve in the year ahead? That's the first question. Second one is just on loyalty scheme. So I note from the statement, Nordic is doing well. And at the Capital Markets Day in November, I think the U.K. scheme, the Perks scheme there got off to a very strong start. So just if there's any update, particularly on that U.K. side of things. And then the third question, in terms of supply chain pressures, you mentioned staff levels in your -- staffing in your commentary, Alex. So just if there's any particular pressures you're seeing there. I think we're hearing quite a lot across from other retailers about staff shortages, but just what you guys are seeing as well would be helpful if that's okay.

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : I just wanted to -- you kind of referenced earlier in your opening remarks that the idea of kind of the tech demand curve, I guess, flattening through the year. We can, I guess, see from the U.K. both this year and last year that, that may well be the case. But it doesn't look to be something that's kind of going on or a dynamic that is apparent in the Nordics. And I was just wondering if you had any thoughts around why that might be different between those two regions.

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : Okay. I guess if the former of those proved to be the case and there's just a bit kind of COVID outlier, then given your kind of run rate 2-year growth is plus 4% and across the first half, let's see, you did plus 15%, one could kind of extrapolate and argue that certainly for the first half of the next fiscal year, you'll be facing in some kind of tough comparatives and year-on-year revenue declines. Is that a sensible way to at least kind of potentially think about it? And in that context, are you still comfortable that you'll be able to make kind of margin progress year-on-year if revenues next year were to decline?

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : Okay. And then just a quick kind of clarify Bruce's comments earlier. When you say you're kind of planning for peak levels with the demand you've seen recently persisting across the balance of the year, would that be you're assuming the kind of 1-year like-for-like rate persist across the balance

Question: Simon Bowler - Numis Securities Limited, Research Division - Analyst : Yes. No, there can be some fun modeling bits, of course, next year, I agree. But okay, cool. No, that's really useful.