Adairs Ltd. · ASX:ADH
Adairs — H1 FY2023 Earnings Presentation
19 slides from Adairs's earnings presentation, Feb 20, 2023
Slide 1: Adairs Limited 1H FY23 Results Presentation
Adairs Limited 1H FY23 Results Presentation 20 February 2023 MARK RONAN ASHLEY GARDNER MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER
Slide 2: Group result – 1H FY23
Group result – 1H FY23 1 Record Group sales with consumer shift back to stores highlighting benefits of the omni-channel strategy. Focus on Furniture (‘Focus’) had a very strong half while higher supply chain costs impacted contributions from Adairs and Mocka. Sales ► Store sales +65% and online sal
Slide 3: Update on strategic priorities
Update on strategic priorities 2 Highlights for the half include a strong performance from Focus on Furniture, a new Adairs website, and continued store growth Focus on Furniture ► First calendar year of ownership (12 months) contributed underlying EBIT of $30.8 million ► By providing high levels of
Slide 4: Adairs – 1H FY23
Adairs – 1H FY23 3 Record sales in 1H FY23 despite supply chain challenges Adairs ► Adairs sales +13.1% to a record $220.4 million Underlying Underlying Change ($ million) – store sales up +22.9% with no COVID-related closures (31% of trading days were lost in 1H FY22) HY23 HY22 v HY22 (%) – online
Slide 5: Focus on Furniture (‘Focus’) – 1H FY23
Focus on Furniture (‘Focus’) – 1H FY23 4 Strong 1H FY23 performance, well ahead of business case expectations Focus on Furniture Reported Underlying Underlying Change ► Focus delivered a strong 1H FY23 performance with sales +20.1% to $78.6 million ($ million) Underlying HY22 HY22 v HY22 HY23 (26 wk
Slide 6: Mocka – 1H FY23
Mocka – 1H FY23 5 Operational platform restored delivering improved customer experience ► Mocka sales fell -26.8% to $25.1 million as the brand resolved the operational issues of 2H FY22 and cleared Mocka excess inventory. The impact of customers returning to stores has been felt by most pure play o
Slide 7: Capital management and dividend
Capital management and dividend 6 Inventories ► Inventory across all three brands closed in line with business expectations ► Mocka reduced its previously elevated inventory holdings by c.20% over 1H FY23 with excess and underperforming inventory being cleared ► Supply chain volatility has reduced h
Slide 8: Trading update and FY23 guidance
Trading update and FY23 guidance 7 Trading results for the first 7 weeks of 2H FY23 remain in line with plan. Trading update and outlook FY23 guidance Unaudited Sales Current trading conditions are broadly in line with plan and as a result the v 2H FY22 ► (first 7 weeks of 2H FY23) existing FY23 sal
Slide 9: Questions?
QUESTIONS?
Slide 10: Appendices
APPENDICES 1. Who are we 2. Positioning of our Group 3. Store footprint - Adairs 4. Store footprint – Focus 5. Group profit and loss 6. Profit and loss reconciliation 7. Group cashflow 8. Glossary
Slide 11: Appendix – Who we are
Appendix 1 – Who we are 10 Adairs Limited (ASX: ADH) is Australasia’s largest omni channel retailer of homewares and home furnishing products ► Own three growing and highly profitable brands ► Vertical retail model ► Specialty retailer of home furnishings with a large and – in-house design growing o
Slide 12: Appendix – Positioning of our Group
11 Appendix 2 – Positioning of our Group Our three brands remain well placed to navigate the near term macro economic headwinds with the strength of the portfolio becoming more apparent as consumers become more value-focused Defensive attribute Share of Group revenue 68% 24% 8% Strong value proposit
Slide 13: Appendix – Our store footprint – Adairs
AppendixA3recap: – Adairs Our store footprint strategy 12 Total Stores: 172 Store Activity (1H FY23) New stores (2) GLA (m2) Homemaker – Butler (WA) 750 1 Regular – Bayside (VIC) 239 Total GLA increase 989 Closed stores (2) GLA (m2) Kids - Werribee (VIC) 191 20 Kids – Chadstone (VIC) 152 Total GLA d
Slide 14: Appendix – Focus store network
Appendix 4 – Focus store network 13 Network of 23 stores, predominantly in Victoria. Typical store size is 1,500-2,000 square metres. State / Territory Stores GLA m2 Victoria (Greater Melbourne) 11 17,647 Victoria (Regional) 4 8,079 NSW (Greater Sydney) 1 3,365 NSW (Regional) 3 5,376 ACT (Canberra)
Slide 15: Appendix – Underlying Group profit and loss
Appendix 5 – Underlying Group profit and loss 14 Adairs Mocka Focus Group Underlying Underlying Underlying Underlying Underlying Change ($ million) HY23 HY23 HY23 HY23 HY22 v HY22 (%) Store sales 161.9 - 73.7 235.6 143.0 +64.7% Online sales 58.5 25.1 5.0 88.6 98.7 -(10.2%) Total sales 220.4 25.1 78.
Slide 16: Appendix – Profit and loss reconciliation
AppendixA6recap: Our – Profit strategy and loss reconciliation 15 1H FY23 reconciliation 1H FY22 reconciliation NDC Focus NDC ($ million) Underlying AASB 16 transition Statutory Underlying AASB 16 transaction transition Statutory 1H FY23 impact costs 1H FY23 1H FY22 impact costs costs 1H FY22 Sales
Slide 17: Appendix – Group cashflow
Appendix 7 – Group cashflow 16 ($ million) Underlying Underlying Underlying to statutory reconciliation 1H FY23 1H FY22 1H FY23 reconciliation Underlying EBITDA 39.7 37.2 ($ million) Underlying AASB 16 Statutory Underlying Significant items (cash impact) (0.2) (3.9) FY23 impact 1H FY23 1H FY22 Share
Slide 18: Appendix – Glossary
AppendixA8recap: Our strategy – Glossary 17 Term Meaning Term Meaning ASP Average selling price NPAT Net profit after tax ATV Average transaction value NDC National Distribution Centre CAC Customer acquisition cost Online Online gross profit (including all online distribution costs) less customer co
Slide 19: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is general background information about Adairs Limited (ABN 50 147 375 451) (Adairs) and its activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. It should