2019 europe presentation -final - the home depot/media/files/h/homedepot...microsoft powerpoint -...
TRANSCRIPT
December 6, 2017
Isabel JanciVice President, Investor Relations
Tim WalshDirector, Investor Relations
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Europe January 2019
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Forward Looking Statements and Non-GAAP Financial Measurements
Certain statements contained herein constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the demand for our products and services; net sales growth; comparable sales; effects of competition; implementation of store, interconnected retail, supply chain and technology initiatives; issues related to the payment methods we accept; state of the economy; state of the residential construction, housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; demand for credit offerings; inventory and in-stock positions; management of relationships with our suppliers and vendors; continuation of share repurchase programs; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of the Tax Cuts and Jobs Act of 2017; store openings and closures; guidance for fiscal 2018 and beyond; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and benefits of those acquisitions. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control or are currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, “Risk Factors,” and elsewhere in our Annual Report on Form 10-K for our fiscal year ended January 28, 2018 and in our subsequent Quarterly Reports on Form 10-Q.
Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the Securities and Exchange Commission
This presentation is also supplemented with certain non-GAAP financial measures. We believe these non-GAAP financial measures better enable management and investors to understand and analyze our performance. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Reconciliations of the supplemental information to the comparable GAAP measures can be found on our Investor Relations website at ir.homedepot.com.
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Financial Results and Long-Term Targets
Company Initiatives
Discussion Overview
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The Home Depot: 3-Year View
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13.3%
14.2%14.5%
12%
13%
14%
15%
2015 2016 2017
Operating Margin
$5.46
$6.45
$7.29
$4.00
$5.00
$6.00
$7.00
$8.00
2015 2016 2017
Earnings Per Share
28.1%31.4%
34.2%
10%
20%
30%
40%
2015 2016 2017
ROIC
$88.5B
$94.6B
$100.9B
$80B
$90B
$100B
$110B
2015 2016 2017
Sales
Driving Consistent Results Across the Business
One Home Depot: 2020 Targets
Enhancing the Customer Experience, Investing for the Future, Creating Value
*As of May 15, 2018
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Sales Operating Margin ROIC
14.5%
2020T20172020T
$101B
2017
34.2%
2017 2020T
~$120.4B ~15.0% ~40%+
~$115.5B
~14.4%
*
Financial Results and Long-Term Targets
Company Initiatives
Discussion Overview
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Retail Environment is Changing Rapidly
HD Must Continue to Keep Pace with Changing Environment
Retail Customers Expect More
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Personalized Experiences
SeamlessCheckout
ImprovedDelivery
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Strategic Investments for the Future
(1) Investments: Capital and Expense, excludes incremental depreciation. Amounts shown are estimates as of December 2017.(2) BAU represents our spend in a “business as usual” environment.
2018 – 2020 Investments(1) ($ in billions)
BAU
Investment
SupplyChain
IT /Online
Stores5.0
0.6
1.8
0.8
2.9
Other
New Stores
0.8
0.6
Supply Chain
IT
Other
New Stores
0.2
1.7
Stores2.4
$5.7B
$11.1B
TargetBAU (2)
Improving the Customer Shopping Experience Both In-Store and Online
Investing in Stores & Associates
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Maintaining Our Position as the #1 Retailer for Product Authority in Home Improvement
Investing in Product & Innovation
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Delivering Tailored Marketing Messages to Create a More Personalized Shopping Experience
Investing in Personalized Experiences
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Leveraging Data and Analytics to Better Understand and Serve our Pro Customers
Investing in Pro & Services
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Investing ~$1.2B over 5 Years to Reach 90% of the U.S. Population with Same Day/Next Day Delivery
Investing in Supply Chain & Delivery
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Vendors
DC Network(Bulk / Stocking / Flow)
Upstream
Leverage our Competitive Advantage
Customers
Downstream
Build a Competitive Advantage
Productivity is Our Virtuous Cycle
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Cost ofGoods Sold
Operating Expenses
Continued Focus on Productivity
December 6, 2017
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