Nordic Business Update
9 September 2011 John Browett Chie f Execu tive Agenda ● Overview ● Market background ● Business model ● Country overviews ● Multi-channel opportunity ● Store tours
39 September 2011 Nordic Business Update The market leading electrical retailer in the Nordics
Single market approach Key facts
● Overall Nordic market share of more than 20% ● Group profit exceeds sum of competitors’ ● 285 stores of which 37% are franchised ● Approx 7,000 employees ● Committed and experienced management ● ”The Elkjøp concept” ● Strong culture cultivated through the organisation
49 September 2011 Nordic Business Update “The winner takes it all”
Strong track ● Outperformed market in the long and short term, good times and hard times record ● Consistent channel, format and range innovation
Cultivated ● A clear operating model that delivers results concept ● Blend local market and customer knowledge with low cost centralised operation
Strong market ● Market leaders and growing share in all Nordic countries presence
● Aggregating volume delivers unrivalled negotiating power Procurement ● Supply chain structure is cost effective for Elkjøp and suppliers
Prime location ● Strong retail sites in all countries with focused and active management
● The Elkjøp culture is ingrained throughout the business from sales to MD Culture ● Strong internal loyalty and determination to win
59 September 2011 Nordic Business Update Elkjøp Nordic Management Team
● Marianne Kuras -CFO
● Marianne Nøkleby – Director Wholesale & Supply Chain
● Robert Grefstad - IT Director
● Tone Matssen – Marketing PR and HR Director
● Per Sigvardsson -COO
● Ronny Blomseth – MD ● Eirik Jarl Nilsen - Franchise Director
● Andreas Niss - MD Elkjøp Norway
● TdSlTrond Samuelsen - MD Lefdal Norway
● Anders Nilsen - MD Elgiganten Sweden
● JBJesper Boysen - MD ElElgig ian ten Denmar k
● Irmeli Rytkonen - MD Gigantti Finland
69 September 2011 Nordic Business Update Ronny Blomseth MD - Elkjøp Agenda
● Overview ● MkMarket bac kgroun d ● Business model ● Country overviews ● Multi-channel opportunity ● Store tours
89 September 2011 Nordic Business Update ELKO ELDING PISSFIK ELKJØP ELGIGANTEN ELGIGANTEN GIGANTTI FRANCHISE FRANCHISE FRANCHISE 39 STORES 53 STORES 28 STORES 22 STORES 4 STORES 3 STORES 6 STORES
ELKJØP ELGIGANTEN F‐GROUP GIGANTTI EXPRESS FRANCHISE 65 STORES FRANCHISE 17 SSOTORE S 17 STORE S 40% OWNERSHIP 19 STORE S
ELKJØP FRANCHISE 55 STORES
LEFDAL 285 stores in 7 countries 20 STORES
LEFDAL FRANCHISE 2 STORES
99 September 2011 Nordic Business Update Elkjøp Nordic have a record of long term growth
Revenue growth Major achievements
GBPm ● 1962: Elkjøp Norway founded 2,500 ● 1986: Super store concept introduced ● 1994: ElGiganten Sweden established ● 1996: ElGiganten Denmark established 2,000 ● 1996: Acquired Lefdal Lavpris (NO) ● 1997: Nordic distribution center established 14.6% CAGR ● 1999: Gigantti Finland established 1,500 ● 2000: Acquired by Dixons Group ● 2000: Web site launched ● 2001: Acquired Super Radio (DK) 1,000 ● 2005: Acquired Markantalo (FI) ● 2005: Acquired Electronic World (DK) ● 2006: PC City transferred from Dixons Group
500 ● 2006: Acquired 40% of Fona Group (DK) ● 2007: Acquired Electric City (DK) ● 2008: Elkjøp Express established
0 ● 2009: Closed down unprofitable chains in 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Sweden (PC City) and Finland (Markantalo ● 2011: Acquired Epoq kitchen in June 2011 Source – Dixons Retail Accounts
109 September 2011 Nordic Business Update Unique business model has enabled Elkjøp to outperform the market
Elkjøp LfL Index vs retail Index
145 ● IttidInvestment in good
140 locations
135 ● Store refurbishment 130
125 ● Category development 120 ● People development 115 ● Constant low price 110 communitiication 105
100 ● Strong brand preference 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11
Elkjøp Group * Nordic Countries Index ** EU Countries Index
*Elkjøp like for like sterling revenue growth indexed to base value 100 in FY02/03 **Eurostat retail data for Norway, Sweden , Denmark and Finland are equally weighted and indexed to base value 100 in 02/03
119 September 2011 Nordic Business Update Online is the big opportunity
160,000 ●Online market now 140, 000 starting to take shape
120,000 ●Market growth expected to come 100,000 through online
80,000 channel
60,000 ●Opportunity for – Established brands 40,000 – MltiMulti-chlhannel opera tors
20,000
0 2006 2007 2008 2009 2010 2011 2012 2013 2014
Online Stores
Source: Eurostat , Datamonitor and Dixons Retail estimates
129 September 2011 Nordic Business Update Competitive landscape is comprised of a few large operators
Key Market Key characteristics Key product Competitor presence categories
Expert NO, SE , - Small and medium sized stores MDA, CE DK, FI, - Own and franchise stores EST - Acquired 30 Onoff stores July 2011
25% Komplett NO, SE, - Major eCommerce player Computing DK, FI - Ownership in MPX and computer components
Other Siba NO, SE, - Medium sized stores Computing, DK - Very strong in sales of insurance Telecom, Foto 51% 10% andditld credit sales - Ownership in NetonNet - Own stores
4% MediaMarkt SE - Large stores CE, 4% - High share of self-service and low Computing, Telecom, Foto 4% share of customer service in the 2% stores - Own stores
F-Group DK - Small and medium sized stores Brown Goods, - Own stores Entertainment - 40% owned by Elkjøp Nordic AS
Source: Annual reports, market data and management estimates
139 September 2011 Nordic Business Update Agenda
● Overview ● MktbkMarket backgroun d ● Business model ● Country analysis ● Multi-channel opportunity ● Store tours
149 September 2011 Nordic Business Update Clear business objective
VISION The Ear th’s mos t cus tomer cent ri c and pro fitabl e ret ail er !
CUSTOMER PROPOSITION Offer a rich choice of quality brands at the lowest price to most people.
BUSINESS IDEA Beinggp the most efficient and profitable distribution channel for consumer electricals, electrical household appliances and related services.
The Elkjøp concept includes centralised purchasing, centralised distribution, superstores with large showrooms and multi-channel offerings
159 September 2011 Nordic Business Update Key success factors for electricals operation
● High sales densities ● Lean back office organisation ● Cross border synergies ● Standard operating model ● Part time employees in high season ● Logistics and central distribution centre ● Common IT systems supporting the operating model ● Multichannel – internet is growing as a sales channel with low costs
169 September 2011 Nordic Business Update Elkjøp focus is to lower costs to sales
● Elkjøp has continued to lower costs even in difficult times ● Variances appear during the year, but objective remains the same
34% OnOff 32% bankrupt July 2011 30%
28%
26%
24%
22%
20%
18% 2007/08 2008/09 2009/10 2010/11
Elkjøp Fona Media OnOff SIBA “The keyyg to success is the balance between costs and margin!”
Source: Annual reports, market data and management estimates
179 September 2011 Nordic Business Update A lean organisational structure
MD
Support Operations functions
Nordic Support & Business Multichannel Finance Wholesale Control Development
PRODUCT CATEGORY
PURCHASINGPURCHASING DIRECTORPURCHASINGPURCHASING DIRECTOR BUYING DIRECTORDIRECTOR
SALESSALES SALESSALES MANAGERMANAGER CHAIN MANAGERMANAGER
DEPARTMENTSALES SALESSALES STORE MANAGERMANAGER MANAGERMANAGER
Managggqement are close to the market enabling quick decision-making
189 September 2011 Nordic Business Update Win model – best for customers and best for us
199 September 2011 Nordic Business Update In depth training and embedded culture
● Product training – Centralised traininggpy of all employees – Centralised training of specialists – Local product training in store – Online training of new employees ● Selling and win training – All employees once per year – Continuous assessment through reporting and management ● Culture – All employees includes those in back office – Strength in teamwork
209 September 2011 Nordic Business Update Centralised procurement is key
Elkjøp buying model Key elements
● Centralised ppgurchasing across territories ● Local ppgroduct managers decide ranges ● Annual purchasing contracts ● Elkjøp procurement strategy based ● Net/net pricing on huge bulk purchases
● Large volume of narrow agreed ranges ● Centralised purchasing function located in Elkjøp Nordic – Supported ● Volume forecasting by the Dixons Retail group
● Few variations ● Category purchasing managers are responsible for negotiating both ● Control of consumer product decision product prices and volumes
● Minimum need for local support ● Supporting local sales managers who are close to the customer ● ”Elkjøp” one country ● 90% of total buying
219 September 2011 Nordic Business Update Supported by an efficient distribution platform
Elkjøp vs competitors Supply chain principles
● Ranggge management – A very tight range, with wide choice for customers, but with most of the sales and profit MANUFACTURER from win products
pp Stock management CENTRAL WAREHOUSE ● DIRECTLY 90% – Manage stock by product 10%
Elkjø type, advertising, win/support lines and range
● Supplier management STORES – Part ner with k ey suppli ers t o i ncrease speed and flow of products and information
● Availability
STORES – Make sure no one tries harder than us to get great availability on advertising and win/support products – Try to always be in stock SUPPLIERS/ petitor WAREHOUSE ● Reverse logistics mm – Only send product one way, don’t spend time or Co MANUFACTURER money on reverse logistics
● 3rd party deliveries and cross docking
229 September 2011 Nordic Business Update Jönköping is a key element of centralised distribution
● All goods purchased by Elkjøp Nordic are shipped directly to Nordic Distribution Center in Jönköping, Sweden ● Built in 1997 - expanded in 2000 and 2007 ● Storage area: 95,000 m2 ● 85 doc king bays an d own ra ilway line ● 250-500 employees ● 130 forklifts ● Goods arrival: – 825,000 m3 – 22, 000 tiltrailers – 2,500 railway wagons – Online order confirmation & booking – eLOG Jönköping
239 September 2011 Nordic Business Update Road, Rail and Sea links in central location
249 September 2011 Nordic Business Update Stock management improvements
Retail Wholesale
1. Monitoring stock days rather 1. Improvement of manual than total stock levels forecasts from stores through training 2. Stock days for benchmark stores to be implemented for the rest of 2. System upgrades to support the stores more automated forecasting from stores 3. Improved systems, training and 3. 3rd party and cross -docking focus options (integrated with suppliers )
Targggeting a 10-15% improvement in stock turn
259 September 2011 Nordic Business Update Flexible store format ●4 different formats:
– Elkjøp Express
– Franchisees
– Superstores
– Megastore
●Fomats deployed depending on:
– Customer segments – Location type & drive times – Market size (by sector) – CtitiCompetition – Service requirements
269 September 2011 Nordic Business Update Express store format
● Mobile and Data commu nicat io n spec i ali st ● Located in shopping centers and on high streets ● Typically 50 sqm ● Average sales of NOK5m ● 17 stores in Norway ● Further 50 stores planned ● Expr ess custo m er s: – Young people – Older people – Women
279 September 2011 Nordic Business Update Franchise stores
● 102 stores across the Region 55 stores Represent 49% of total no. 19 stores 28% of retail revenue Represent 46% of total no. ● Avg sales area: 650 sqm 19% of retail revenue ● Purpose of franchise – Fits smaller markets – Add volume – Increased profitability 2 stores – Increased buying power Represent 10% of total no. 2% of retail revenue ● FhiFranchise concep t – No franchise fees – No royalty or license fees 17 stores – All investments and costs born by Represent 24% of total no. franchisee (incl. establishment) 11% of retail revenue ● Low investment and high profitability
289 September 2011 Nordic Business Update Superstores
●Backbone of portifolio ●144 across Nordics ●From 1,000 – 2,500 sqm ●Catchment area from 30,000 ●Typical rent of NOK1200 per Sqm ●Offering full specialist range of consumer electricals – 5,000 SKUs ●Full service offering
299 September 2011 Nordic Business Update Megastores
● First Megastore in Lorenskog opened in May 2008 ● 21 MtMegastores now open ● 5 more will open in 2011 ● Opport unit itfy for a t ttlotal of 40-50 across Nordics ● Averagg,e size of 2,500 to 5,000 sqm ● Catchment area fom 80,000 ● Extended specialist product range – 15,000+ SKUs ● Enhanced range of services and product demonstration
309 September 2011 Nordic Business Update Opportunity in added value services
SPECIALIST OPPORTUNITY ● A trusted, knowledgeable technology expert who’s always by your side andidd on your side
RELATIONSHIP OPPORTUNITY ● Convert ‘service-minded’ segments from occasional customers into life time members
INCREASED VOLUME & QUALITY OF SALES OPPORTUNITIES ● Step-change sales of existing attached services ● Create new range of AVS services to enable customers to get ‘more out of…’ ● Drive sales of repair and fix services as default/trusted option ● Create relationships with non-Elkjøp customers
319 September 2011 Nordic Business Update Roll out plan for a wide range of added value services
DELIVER & SETUP & HELP & REPAIR & INSTALL UPGRADE SUPPORT PROTECT
● Delivery options ● Computer “ready to go” ● Support agreements ● Insurance – Express – Time to suit ● Mobile “ready to go” ● Data transfer ● Instant replacement (under NOK1000) ● Installation ● Mobile “ready to go” ● Date erase advanced standalone ● StSystem rescue – Computer ● GPS “ready to go” – Aerial ● Online storage/sharing – Set top boxes ● Internet ready set-up – MDA ● iPad media stream ● Camera set up ● Installation with ● Virus removal delivery ● Memory upgrade ● Home network trouble – Laundry – Refrigeration ● Software installation shooting – Swap doors Operating system Driver downloads – Cooking ● ● install/upgrade for: – Built-in ● Health check – TV system set up – Computer – TV Wall mount – Mobile ● Speed up your PC – GPS ● Home Network set up ● Data recovery ● Component upgrade Home entertainment Data recovery ● Online tutorials ● setup ● Advanced
● Repairs
329 September 2011 Nordic Business Update Flexible operating model
1. 100% outsourced and 3rd party solution ● Repairs today ● Home delivery in Norway, Sweden and Finland
2. Partnership with ownership ● Home delivery in Denmark
3. In house solution ● Technical helpdesk for Elkjøp Nordic
339 September 2011 Nordic Business Update Example from Norway “Computer – Support agreement”
● What we do for the customer 1. Unpack PC start up 2. Run full preparation and image install 3. Install software and tune for best performance 4. Install Online backup and anti virus protection 5. Setup of wireless network 6. Function test 7. Always avail abl e to suppor t 8. 36 month insurance ● Price NOK 3, 495,- good margin ● Approx 1/3rd are sold with “ready to go”
349 September 2011 Nordic Business Update Agenda
● Overview ● MktbkMarket backgroun d ● Business model ● Country analysis ● Multi-channel opportunity ● Store tours
359 September 2011 Nordic Business Update Outperformance has been in all product categories, in all countries (last 18 months)
92 90 91 96 Brown Goods* 98 110 108 109
100 104 97 105 White Goods* 104 114 117 117
103 106 105 109 SDA* 111 119 142 122
102 102 98 110 Computing** 109 106 117 125
106 101 100 103 Telecoms** 110 117 120 105
Base level = 100 Base level = 100 Base level = 100 Base level = 100
Market Index FY 2010 + H1 2011 Elkjøp Index FY 2010 + H1 2011
- Elkjøp Index is based on sales to retail, compared to last year sales - Market Index is based on Dixons Retail estimates - Data are sales values (*) or sales volumes (**)
369 September 2011 Nordic Business Update Elkjøp and Lefdal – leaders in Norway
Extensive store network Historical performance
Sal es NOKm
9000
8500
Norway 8000 • 39 Elkj øp s tores • 17 Elkjøp Express stores 7500 • 55 Elkjøp franchise stores • 20 Lefdal stores • 2 Lefdal Franchise stores
• 2,000 Employees (FTE) 7000
• 115,230 Sqm selling space 6500 • Main competitors: 2008/09 2009/10 2010/11 • Expert • Komplett • Euronics
379 September 2011 Nordic Business Update Elkjøp market leader in all major cities, Lefdal no.2
●The Elkjøp Group has a c.30% market share in Norway – Ekjøp is definite market leader – Competes alongside Expert in major cities – Elkjøp possesses si gnifi cant b argai n ing power against suppliers – Strong brand awareness – Excellent store portfolio
●Elkjøp expected to be less exposed to current global downturn ●Expert operates more stores than Elkjøp, but those are smaller and have lower turnover ●Well developed31% eCommerce market – Komplett no. 3 regardless of channel
389 September 2011 Nordic Business Update Positive outlook for electricals in Norway
40,000 10.0%
35,000 8.0%
30,000 6.0%
25,000 4.0%
20,000
2.0% 15,000
0.0% 10, 000
(2.0)% 5,000
0 (4.0)% 2007 2008 2009 2010 2011F 2012F 2013F 31% Electricals spend Growth
Source Dixons Retail estimates NOKM
399 September 2011 Nordic Business Update ElGiganten 50% growth since Media Markt entry
Largest store network Historical performance
SlSales NOKm
7,000
Sweden • 53 El-Giganten stores 6,000 • 17 El-Giganten franchise stores • Electroworld on line brand 5,000 • 1,350 Employees (FTE) • 108,063 Sqm selling space • Main competitors: • Media Markt • Siba/NetonNet 4,000 • Expert 2008/09 2009/10 2010/11
409 September 2011 Nordic Business Update Sweden is the biggest market but extremely competitive
●ElGiganten has a c.18% market share in Sweden – Market leader, but tough competition from Media Markt
●Fragmented market – Several competitors with 5-10% market shares
●Consolidation has started – NetOnNet acquired by SIBA in February – OnOFF bankrupt in July – Growth opportunity ●eCommerce market well developed – Dustin and CDon are largest ppylayers – Competitive opportunity through elgiganten.se and electroworld.se
419 September 2011 Nordic Business Update Forecasts for steady growth in Sweden
4,600 6.0%
4,400 5.0%
4, 200 40%4.0%
4,000 3.0%
3,800 2.0%
3,600 1.0%
3,400 0.0% 2007 2008 2009 2010 2011F 2012F 2013F Electricals spend Growth
Source Verdict electrical spend Eurom
429 September 2011 Nordic Business Update Danish operations developed with Elkjøp “win-model”
Growing store network Historical performance
Sales NOKm 3500 Denmark • 28 ElGiganten stores • 800 Employees (FTE) • 47,527 Sqm selling space 3000 • Main competitors: • Expert • Fona
2500
2000 2008/09 2009/10 2010/11
439 September 2011 Nordic Business Update Danish market is consolidating
●ElGiganten has c.14% market share in Denmark – Market leader – Has benefitted from consumers move from high street to out of town
●ElGiganten, Expert and F-Group are largest players – Many niche stores – 8 big mixed electrical retail brands have closed since 2000
●Success with ”win-model” since 2009 – Outperforming market and increasing market share
●Potential for ElGiganten franchise and some more stores
449 September 2011 Nordic Business Update Strong recovery since 2009 in electricals spend
2,650 6.0%
2,600 5.0%
4.0% 2,550
3.0% 2,500
2.0% 2,450 1.0% 2, 400 0.0%
2,350 (1.0)%
2,300 (2.0)%
2,250 (3.0)%
2,200 (4.0)% 2007 2008 2009 2010 2011F 2012F 2013F Electricals spend Growth
Source Verdict electrical spend Eurom
459 September 2011 Nordic Business Update Solid earnings in Finland post closure of Markantalo
Established store network Historical performance
Sales NOKm 400,000 Finland • 22 Gigantti stores • 19 Gigantti f ranchi se stores • 600 Employees (FTE) • 45,658 Sqm selling space 350,000 • Main competitors: •Expert • Verkkokaupa •Musta PÖrssi • Veikon Kone 300,000
250,000
200,000 2008/09 2009/10 2010/11
469 September 2011 Nordic Business Update Finnish Gigantti has a strong brand in both channels
●Gigantti has c.23% market share in Finland
●Very strong brand recognition – Service – Low price perception
●Gigantti and Expert are largest players – Fragmented market – Many niche stores
●Tough competition from verkakkauppa.com
●Fantastic success since the start
●Potential for growing the franchise business
479 September 2011 Nordic Business Update Finish market expecting more modest recovery €M 2,600 7.0%
2,580 6.0%
5.0% 2,560
4.0% 2,540 30%3.0% 2,520 2.0% 2,500 1.0% 2,480 0.0% 2,460 (1.0)%
2,440 (2.0)%
2,420 (3.0)%
2, 400 (4. 0)% 2007 2008 2009 2010 2011F 2012F 2013F
Electricals spend Growth
Source Verdict electrical spend Eurom
489 September 2011 Nordic Business Update Agenda
● Overview ● MktbkMarket backgroun d ● Business model ● Country analysis ● Multi-channel opportunity ● Store tours
499 September 2011 Nordic Business Update A difficult birth… “Internet is a flop” “Internet is a temporary trend”
Multichannel milestones: 1996 Elkjøp Contact centre was launched 1997 ElGiganten Sweden contact centre launched 1998 cyberia.no was launched – “games” 1998 ElGiganten Denmark contact centre launched 1999 elkjop.no was launched 2000 elgiganten.se, elgiganten.dk, gigantti.fi launches 2002 Full eCommerce platform was launched 2008 Elkjøp online market leader within Multichannels 2009 Elkjøp online market leader within B2C 2010 Gigantti contact centre launches
Leif Osvold, Norwegian debater Ines Uusmann, Swedish Minister of communication Dagens N æringsliv, 20 August 1996 Svenska Dagbladet , 12 May 1996
509 September 2011 Nordic Business Update Importance of online retailing
Why internet is important Key features
● eCommerce is a major global trend Cheaper 67% penetrating the traditional brick store concept Easier 55% ● Online retailing possesses several 46% Found what I wanted advantages over traditional retailing
Easy to compare prices 39% – Allows business without barriers of time and distance Open 24/7 28% – Expands market size – Reduces direct cost of sales Door delivering 27% ● 7% of online buying is at Easy to get info 26% elkjop.no, Elgiganten.se, Elgiganten. dk and Gigantti.fi Fast delivery 22% – Expected to increase in coming years
Used to shop online 21% ● Elkjøp has the preferred homepage Ok terms of payment 9% for seeking information in Norway and Finland
Source: Carat Insight & Norstat,
519 September 2011 Nordic Business Update Pureplay vs Multichannel
Local Global Local Global Multichannels Multichannels Pureplayers Pureplayers
Example Example Example Example
Prime strategy Prime strategy Prime strategy Prime strategy
529 September 2011 Nordic Business Update Top 5 Nordic internet operators
Operator Markets Customer Focus and Traffic rank* Annual turnover Profit presence segment focus range online .SE B2B, B2C (80/20) Consumer NO 392 / SE 192 € 440 M € 5,4 M electronics, .NO Pureplayer DK 1195 ~ 24,4% market share 11.900 SKU’s .DK All B2B, B2C (60/40) Consumer NO 78 / SE 164 € 331 M €5,7 M electronics PlPureplayer w p ikick- DK 354 ~ 18, 4% mar ke t s hare up points 6.300 SKU’s
All B2C Consumer NO 74( #1) / € 220 M n/a electronics, SE 127 (#2) Multichannel Domestic DK 70 (#1) / ~12,2% market share appliances FI 96 (#2)
4.900 SKU’s All B2C Entertainment NO 136 € 150 M n/a products, consumer Pureplayer electronics SE 78 ~ 8,3% market share
448.000 SKU’s All B2C, B2B (90/10) Consumer ? € 107 M n/a eltlectroni cs, Pureplayer, ~ 5,9% market share Multichannel 14.300 SKU’s
* Estimated total Nordic eCom market 2011, 1,8 bn Euro * Statistics from Alexa.com
539 September 2011 Nordic Business Update Multi-channel offering wins
● Multi-channel better than pure play
● Largest competitors have weak multi- chlffihannel offering – e.g. Media Markt, Komplett and Expert
● Internet sites – Keeping customers with Elkjøp while leveraging on eCommerce trends – Provides extended range in stock efficient manner – Launched in 2000 – Opportunity for higher average purchase – Stores provide after sales comfort to customers
● Physical stores – Core distrib ut ion c hanne l – Several size formats
● Collect@Store – EhEnhance d mu lti-chlittihannel integration – Provides convenience and lower cost (no postage) for the customer – Minimal incremental cost to Elkjøp
549 September 2011 Nordic Business Update Multichannel strategy Contact Stores WEB Franchise Centre
● Variable ranges ● Widest range ● WEB offer ● Variable ranges ● Variable prices ● Lowest price ● Variable prices
rrent ● Variable service ● Variable service ● Variable service uu
C ● Variable offer ● Variable offer ● Variable offer
● Equal ranges ● Equal ranges ● Equal ranges ● Equal ranges ● Equal prices ● Equal prices ● Equal prices ● Equal prices ure
tt ● Equal service ● Equal service ● Equal service ● Equal service
Fu ● Equal offer ● Equal offer ● Equal offer ● Equal offer
Store sizes will vary: We will not overinvest to provide Everyygthing to Ever yone Ever ywhere!
559 September 2011 Nordic Business Update Summary
● Very strong business model
● Leading market shares
● High sales densities
● Centralised operational structure
● Low cost to sales
● Opportunities to take market share
● Growing markets
569 September 2011 Nordic Business Update 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 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. ● 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 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, 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.
579 September 2011 Nordic Business Update