Carphone Warehouse 2009 Annual Report Download - page 20
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16 The Carphone Warehouse Group PLC Annual Report 2009
StrategyKey Performance Indicators
Connections (m)
12.5m
09 12.5
08 11.5
07 10.0
06 8.2
Revenues (£bn)
£3.6bn
09 3.6
08 3.1
07 2.9
06 2.5
Headline EBIT (£m)
£101m
09 101
08 151
07 154
06 116
The Carphone Warehouse has survived
and thrived in a highly competitive
mobile industry by constantly identifying
changes in consumer behaviour which
present opportunities if we address
them and threats if we do not. Over the
last two years we have been undergoing
our biggest evolution yet, as we
address the opportunity presented
by the “Connected World” – and this
governs the main elements of our
divisional strategy.
Evolving the retail proposition
to embrace a broader array of
connectivity services
We have been very successful in
developing our existing store proposition
to offer a wider range of connected
devices, to reect new services available
in the market and customers’ changing
technology needs. Mobile broadband,
laptops and smartphones have been
signicant contributors to top line growth
this year. Looking ahead, this is set to
continue as we rene the small store
offer and roll out 30-40 of our new,
mid-sized stores.
European handset market
After ve years of strong and consistent
growth, 2008 witnessed a slight fall in the
European handset market. A combination
of market saturation, the macroeconomic
environment and a lack of new products
in the mid-tier all contributed to this
decline. At this stage we expect a similar
trend in 2009, followed by stabilisation
in 2010.
Laptop sales and penetration
The laptop market is set for continued
strong unit growth as prices fall,
hardware becomes subsidised
with mobile broadband, and smaller,
“netbook” type products proliferate.
The market in Western Europe was up
41% in 2008 but is still only a fraction
of the size of the mobile phone market.
Growing our market share of mobile
connections
Market share has long been a key
element of our strategy. Signicant
share makes us an important partner
to network operators and handset
manufacturers alike. The opportunity
for market share growth is greater in a
weak handset market, as more marginal
players struggle to compete with our
proposition. We estimate that our market
share improved signicantly year-on-year
and we aim to deliver further strong gains
over the next 12 months.
Launching a multi-channel consumer
electronics business
With our partners Best Buy, the
acknowledged global champions of
Big Box consumer electronics retailing,
we are planning to launch a major assault
on the UK electricals market. Our rst
out-of-town stores are scheduled to open
in spring 2010 and, if successful, we
will roll out a presence across the UK
supported by a full multi-channel service
offering. We are condent that the planned
investments will generate a new and
material leg of growth for the business.
Marketplace Trends
Handset sales Western Europe*
(units sold, millions)
08 94.8
07 95.1
06 89.1
05 79.6
Source: GFK
* For the nine markets in which Best Buy Europe operates.
Laptop sales Western Europe*
(units sold, millions)
08 15.4
07 10.9
06 7.6
05 5.4
Source: GFK
* For the nine markets in which Best Buy Europe operates.