Carphone Warehouse 2012 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2012 Carphone Warehouse annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

Carphone Warehouse Group plc Annual Report 2012 3
Overview Business review Governance Financial statements
In the UK and in Europe, wehave
a proven way forward tomeet
consumers’ demand forthe
Connected World.
Roger Taylor, Chief Executive Officer
IN SUMMARY
CPW Europe
— Profits maintained with Headline EBIT
of£135.0m (2011: £134.6m) despite
shiftfrom 18 to 24 month contracts,
decline in the prepay market and
toughconsumer environment
— New contract terms with
operatorsnow starting to yield
material benefitsas the shift from
18to24month contractscompletes
— Continued payback from Wireless
World store format and momentum
innon‑cellular product categories
Virgin Mobile France
— Revenue up 18.8% to £390.2m
(2011:£328.4m)
— Business robust despite increased
competitive pressures
Global Connect
— Global Connect launched
inNovember2011
— Expect to have 14 Best Buy Mobile
branded stores in China byAugust
2012 under this new venture
Following the disposal of our interest in Best Buy Mobile
andtheclosure of Best Buy UK, the Group now comprises our
50% interest in the core European retail business, CPW Europe,
anda47% interest in France’s leading MVNO, Virgin Mobile France.
Inaddition, we own properties in London and the north ofEngland,
and have substantial cash balances.
For the year just ended, we delivered Headline earnings in line
withguidance and maintained a strong cash position for the Group.
CPW EUROPE
CPW Europe delivered Headline EBIT in line with last year at
£135.0m (2011: £134.6m) despite a challenging consumer and
mobile market. Revenue of £3,313.1m was 5.5% lower year‑on‑year
(2011:£3,504.8m), but this was largely anticipated. Revenues
associated with our German service provider business fell by around
£100m, as we concluded its migration to a more typical retail model.
In addition, alack ofattractively priced smartphone products in the
prepay segment and a weak consumer environment caused a drop
of 30–40% in prepay volumes in some markets. This had an impact
onrevenue, but a limited effect onprofitability.
Looking ahead, pressure on mobile ARPUs as a result of regulation,
competition and the challenging consumer environment will continue.
Against this, however, the mobile market shift from 18 to 24 month
contracts is now complete and we are starting to enjoy the anticipated
benefits from our new contract terms with the network operators.
We are also seeing continued payback from our investment in the
roll‑out of our Wireless World store format, as well as continued
momentum in non‑cellular product categories where we see real
opportunity. Although the prepay market currently remains weak,
we have some reason to be more optimistic about the increasing
availability of lower priced prepay smartphones in the year ahead.
In the UK and in Europe, we have a proven way forward to meet
consumers’ demand for the Connected World. Built around the
central theme of connectivity, our newer format Wireless World
stores offer a wider range of mobile and other connected devices
CHIEF EXECUTIVE OFFICER’S REVIEW
392
NUMBER OF WIRELESS WORLD STORES
392
2012
106
2011
36
2010