Morgan Stanley Global Consumer & Retail Conference

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Morgan Stanley Global Consumer & Retail Conference

  1. 1. Morgan Stanley Global Consumer & Retail Conference November 14, 2007
  2. 2. Safe Harbor Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995 This presentation may contain forward-looking statements, which are subject to risk and uncertainty. A variety of factors could cause our actual results to differ materially from the anticipated results expressed in such forward- looking statements, including, among other things, factors listed in our Annual Report on Form 10-K filed with the SEC on 5/02/07. That 10-K describes additional factors that could cause actual results to differ materially from those contemplated by the forward-looking statements made in this presentation. 2
  3. 3. Dave Morrish Senior Vice President – PC Mobility Solutions 3
  4. 4. Sean Skelley Senior Vice President – Services 4
  5. 5. History of Growth Diluted EPS1 ROIC2 21% +4 pts CAGR 22% $2.79 21% 20% $2.27 19% 17% 16% $1.75 $1.44 $1.11 $1.07 FY02 FY03 FY04 FY05 FY06 FY07 FY02 FY03 FY04 FY05 FY06 FY07 2Fiscal years 2002 thru 2005 have not been adjusted for FAS 123 1 Pro-forma adjusted for FAS 123 expense expense Revenue Growth FY07 Results 15% ($ in billions) CAGR Total revenue growth 16% $35.9 Comp revenue growth 5.0% $30.8 $27.4 $24.5 Operating income % +23 bps $20.9 $17.7 Diluted EPS growth 23% Market share 20% 5 FY02 FY03 FY04 FY05 FY06 FY07
  6. 6. Revenue Mix and Growth Revenue Mix Comparable Store Summary Sales Three Months Ended Three Months Ended Sept. 1, 2007 Sept. 1, 2007 38% (1.6)% Consumer Electronics 31% 9.8% Home Office 16% 9.3% Entertainment Software 8% (7.1)% Appliances 6% 5.3% Services 1 n/a1 1% Other 1 100% 3.6% Total 1Other includes fees received from cardholder account activ ations that are def erred and recognized ov er time, resulting in rev enue recognition that is not indicativ e of the v olume of activations in the current period. These rev enues are excluded from our comparable store sales calculation. Other also includes revenue from the sale of products unrelated to our core offerings. For this reason, we do not prov ide a comparable store sales metric f or this revenue category. 6
  7. 7. Our Journey Fiscal 2006 Now Before Customer Centricity 7
  8. 8. Winning with Customers 25% Total U.S. Market Share 20% 15% + 10% Computer Return & Exchange Rate 5% 0% 1997 '99 2001 '03 '04 '05 '06 Improving the Experience and Growing Share 8
  9. 9. Imagine if… You can trust Best Buy and Geek Squad to make your computer and everything you connect to it always work seamlessly so that you can enjoy your passions. This is Why We Come to Work 9
  10. 10. Trusted Perspective For Inspired Living You can trust Best Buy and Geek Squad to make your Assortment & Reputation Experience computer and everything you connect to it always work Store & seamlessly so that you can Transparency Online enjoy your passions. Support We > Me Customer Resolution 10
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  14. 14. Addressing Customer Needs 14
  15. 15. Unique Customer Solutions 15
  16. 16. Trusted Perspective For Inspired Lives You can trust Best Buy and Geek Squad to make your Assortment & Reputation Experience computer and everything you connect to it always work Store & seamlessly so that you can Transparency Online enjoy your passions. Support We > Me Customer Resolution 16
  17. 17. EXPANDING ON GEEK SQUAD’S FOOTHOLD IN THE HOME Geek Squad is now the master services brand for Best Buy (except appliances). Making Geek Squad a resource for “whole home” tech support in advance of convergent technology. Expands the ranks of our agents and installers to 17,000. Car Electronics 17 Computer Support Home Theater
  18. 18. GEEK SQUAD CITY 165,000 square ft. centralized repair facility in Louisville, KY (partnered with UPS) Over 500 dedicated employees on-site to speed turn-times and improve repair quality/consistency. Go-to backup for service and repair work that can’t be performed inside a Best Buy store. Rallying point for our agents - a spiritual home for the Geek Squad brand. 18
  19. 19. GOING BEYOND BREAK/FIX Sky high (85%) consumer awareness of mature break/fix business. Raising awareness of Geek Squad services in growing categories like wireless networking. Showing consumers ways they can proactively engage Geek Squad. We can help with wants and needs. Telling them how Geek Squad services are truly different from competitors (e.g. phone & cable co’s) 19
  20. 20. The Services Story Partnerships Small Business Managed Green Migration Services & Disposal International Assurance Home Web 2.0 Integration R&D / New Product Tr ials Global W orkforce Customer Focused Agents BUILD Decision Support Data An alytics SERVICES Claims Pro cessing Call Center OPERATION Remote Services C SI S h pat c co re Br / Dis s tem an t in g rm / Ro u d ys G MR S fo d u le MyAgent ee nt h Sche at me Uta k Pl I Sq e ag ng ny ua an lli dM d on Bi ie l C d it y F tJ an en ct tra Ag on C Services Foundation 20
  21. 21. Adapting to Serve Customers 21
  22. 22. Customer Research Tools 22
  23. 23. Adding On-Line Capabilities • Customer Ratings and Reviews • Independent Research • Launched website in Spanish • Earn and redeem Reward Zone points on-line Core Program RZ MasterCard ~25M Members 1M+ Members 23
  24. 24. Part of a Global Community • Nominated for U.S. Chamber of Commerce Corporate Citizenship Award (11/07) • Named one of top 100 U.S. Corporate Citizens in 2007 by CRO magazine • Donated approximately $25 million to our communities in fiscal 2007 • Facilitated 30,000 tons of e-waste recycling in fiscal 2007 – more than any other retailer in the U.S. Our Employees Providing Leadership for our Industry, our Customers and Our Communities 24
  25. 25. Technology: Not Just a Lifestyle… It’s the infrastructure of life Home Theater Systems DVR Gaming System Desktop Notebook Digital Camera iPhone Networking Satellite Radio Phone 25
  26. 26. Your Questions 26

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