Slide 1: FY22 Results Presentation
Adairs Limited MARK RONAN MANAGING DIRECTOR & FY22 Results Presentation CHIEF EXECUTIVE OFFICER 22 AUGUST 2022 ASHLEY GARDNER CHIEF FINANCIAL OFFICER
Slide 2: FY22 Group summary
FY22 Group summary 1 Strong progress made on our strategic priorities Adairs Linen Lovers ► More than 1 million paid-up members (+32% in last 3 years) Adairs store growth continues ► Store floorspace (GLA) +7% on FY21 (+22% in last 3 years) ► 4 new stores, 11 stores upsized Omni-channel strategy del
Slide 3: Sustainability
Sustainability 2 Adairs released its inaugural Sustainability Report with its FY22 Annual Report. The Group coordinates its sustainability initiatives through its People, Product and Planet (PPP) strategy, with representation from all business units. Corporate Social PEOPLE Ethical sourcing Diversit
Slide 4: FY22 builds on our history of steady and consistent growth
FY22 builds on our history of steady and consistent growth 3 Historic growth (since IPO) Future growth drivers and 5-year target The Adairs Group comprises three vertically integrated brands, all with Group Sales ($m, FY15-FY22) Group EBIT ($m, FY15-FY22) attractive economics, clear growth pathways
Slide 5: FY22 Group results
FY22 Group results 4 Record sales offset by higher costs associated with one-off COVID disruptions. Results well above FY20 (pre-COVID). Group sales up despite COVID store closures Group Underlying Underlying Underlying Change Change ► Group sales of $564.5 million, +12.9% on FY21 (+45.1% on FY20) (
Slide 6: Adairs – FY22
Adairs – FY22 5 Solid performance given mandated store closures and cycling a record FY21 Financial performance Adairs ► Total sales -4.8% driven by COVID-related store closures with 16% of total trading days being lost and Underlying Underlying Change Change cycling record FY21 year. ($ million) FY
Slide 7: Mocka – FY22
Mocka – FY22 6 Disappointing FY22 with focus now on resetting the business for a successful FY23 and beyond Mocka ► Total sales of $64.1m (+6.5% on FY21) were well below plan following a weaker 2H-FY22 sales result Underlying Underlying Change ► Weaker 2H sales were due to significant supply chain i
Slide 8: Focus on Furniture – FY22
Focus on Furniture – FY22 7 FY22 performance gives us confidence in Focus’ value proposition and capacity for growth Focus Acquisition and strategic rationale Underlying ($ million) ► Focus on Furniture (‘Focus’) was acquired in December 2021. FY22 – highly profitable vertically integrated omni-chan
Slide 9: Inventory
Inventory 8 Higher in-stock inventory provides a competitive advantage during current period of significant global supply chain disruptions ► Whilst improving at the margin, global supply chains remain significantly disrupted. The Group has been agile to adapt strategies and implement learnings from
Slide 10: Capital management and dividend
Capital management and dividend 9 Balance sheet ► Net debt of $93.2m, post-Focus acquisition and final Mocka earn-out payment with term debt facilities of $135m ► Net debt / Proforma EBITDA1 is <1.0x ► Significant funding and covenant headroom to accommodate potential adverse changes in the general
Slide 11: FY23 Outlook & Guidance
FY23 Outlook & Guidance 10 The Group is well placed to grow both sales and profits in FY23, even with a tougher trading environment Group positioning FY23 Guidance The Group is well placed to navigate emerging macro trading environment Group Sales ($m) 625 – 665 headwinds with the strength of the bu
Slide 12: Trading update
Trading update 11 Trading results for the first seven weeks of FY23 are in line with plan and consistent with guidance Unaudited sales (first 7 weeks of 1H FY23) v FY22 Group total +44.8% Group (ex. Focus) total +3.9% Based on real-time written sales ► A direct comparison of the first seven weeks of
Slide 13: Questions?
QUESTIONS?
Slide 14: Appendices
APPENDICES 1. Who are we 2. The strength of our business model 3. Store footprint – Adairs 4. Store footprint – Focus on Furniture 5. Like for like sales growth history by brand 6. Profit and loss reconciliation 7. Cashflow reconciliation 8. Glossary
Slide 15: Appendix 1 – Who we are
Appendix 1 – Who we are 14 Adairs Limited (ASX: ADH) is Australasia’s largest omni channel retailer of homewares and home furnishing products ► Own three growing and highly profitable businesses ► Vertical retail model ► Leading specialty retailer of home furnishings with a large and – in-house desi
Slide 16: Appendix 2 – The strength of our business model
Appendix 2 – The strength of our business model 15 Our business model Our brands Our TAM Our business outcomes Vertically integrated Size of Australian furniture Superior customer and furnishings market experience Exclusive products and $13.3b channels that we own High customer loyalty Omni channel
Slide 17: Our store footprint – Adairs
AppendixA3recap: – Adairs Our store footprint strategy 16 Store Activity (FY22) Total Stores: 172 104 Regular stores (inc. 10 outlets) New stores (4) GLA (m2) 59 Homemaker stores Homemaker – Karrinyup (WA) 568 8 Adairs Kids Homemaker – Burleigh (QLD) 683 1 Urban Home Republic (UHR) Homemaker – Mille
Slide 18: Appendix 4 – Focus store network
Appendix 4 – Focus store network 17 Network of 23 stores, predominantly in Victoria. Typical store size is 1,500-2,000 square metres. State / Territory Stores GLA m2 Victoria (Greater Melbourne) 11 17,647 Victoria (Regional) 4 8,079 NSW (Greater Sydney) 1 3,365 NSW (Regional) 3 5,376 ACT (Canberra)
Slide 19: Appendix 5 – Like for like sales history by brand
Appendix 5 – Like for like sales history by brand 1,2 18 46.3% 35.2% 30.6% 31.4% 30.9% 14.3% 15.9% 14.5% 16.2% 7.2% 6.5% (3.3%) (6.1%) FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY20 FY21 FY22 Notes: 1. Like-for-like sales growth (“LFL”) has been adjusted for any store closures and is calcula
Slide 20: Appendix 6 – Profit and loss reconciliation
AppendixA6recap: Our – Profit strategy and loss reconciliation 19 FY22 reconciliation FY21 reconciliation ($ million) Mocka Focus NDC Mocka NDC Underlying AASB 16 transaction transaction transition Statutory Underlying AASB 16 transaction transition Statutory FY22 impact costs costs costs FY22 FY21
Slide 21: Appendix 7 – Cash flow reconciliation
AppendixA7recap: – CashOur strategy flow reconciliation 20 ($ million) Underlying Underlying Underlying to statutory reconciliation FY22 FY21 FY22 reconciliation Underlying EBITDA 84.6 119.6 ($ million) Underlying AASB 16 Mocka Statutory Underlying FY22 impact earn-out FY22 FY21 Significant items (c
Slide 22: Appendix 8 – Glossary
AppendixA8recap: Our strategy – Glossary 21 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 23: 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