Adairs Ltd. · ASX:ADH
Adairs — Investor Day (May 2018)
17 slides from Adairs's investor day presentation, May 8, 2018
Slide 1: Adairs Investor Day May 2018
Adairs Investor Day May 2018 For personal use only MARK RONAN CHIEF EXECUTIVE OFFICER
Slide 2: Objectives of Today
A recap: Our strategy For personal use only Objectives of Today Help our investors better understand management’s views on the key drivers to Adairs’ sales growth, and what that means for our future… Offer our perspective on a range of key business drivers: ▪ A recap: our strategy ▪ Adairs performan
Slide 3: Recap: Our Strategies
A recap: Our strategy Recap: Our Strategies For personal use only Product, Product, Product develop design led on-trend quality products with focus on delivering value and category expansion More inspiring larger stores store rollout and selective store upsizing Best in class omni channel retail cap
Slide 4: Our Performance – key trends
Continuous LFL sales growth Adairs strategy has delivered LFL sales growth which is on average 8~9% above our view of the long term growth rate of our For personal use only market (2~4%) Our Performance – key trends Adairs LFL Sales Growth Adairs EBIT Result (5 year average of ~11%) (5 Year CAGR of
Slide 5: Market at a Glance: $4~5bn
Our Range and Product differentiation For personal use only Market at a Glance: $4~5bn Premium: Sheridan | David Jones Middle: Adairs | Bed Bath & Table | Myer | Country Road • Estimate that the market is $4~5bn and growing at 2~4% p.a Low Price: Kmart | Target | BigW | IKEA | Spotlight • Made up of
Slide 6: Adairs Market: competitors and our customer
Our Range and Product differentiation For personal use only Adairs Market Our sub-segment is large and competitive. Customers cross shop. Successful differentiation requires a keen understanding of the customer and a passion to meet their needs. Our Main Competitors are: Our Customer is: • Myer • A
Slide 7: Product, Product, Product
Product, Product, Product Product, Product, Product Adairs is a commercial business with a broad customer base. We offer on-trend home decorator products to complement our range of quality staples. For personal use only PRODUCT DIFFERENTIATION • Key to our competitive advantage especially from our m
Slide 8: Enhanced Product Range
Enhanced Product Range Adairs has expanded its product range materially over the last 5 years, and this remains a core strategy Adairs Product Mix% For personal use only 39.5% Expansion 37.4% 36.9% Expansion 33.6% Expansion Expansion 60.5% 63.1% 62.6% 66.4% Core Core Core Core FY15 FY16 FY17 FY18E •
Slide 9: Our Store Portfolio
Our Store Portfolio For personal use only More inspiring larger stores 80 Homemaker & Mini Homemaker Stores Count • Larger store formats improves the shopping experience and supports 70 the strategy of furnishing more of our customers living spaces 60 • Store roll out, and selectively upsizing shopp
Slide 10: Higher returns from upsizing
Passionate High Performing Teams For personal use only Higher returns from upsizing We are focusing on increasing the footprint of our stores. This includes larger shopping centre and homemaker stores and the introduction of mini homemakers. Mini homemakers are typically conversions/ relocations of
Slide 11: Our Online Result
Our Online Result Online sales are now ~13% of total company sales and expected to reach ~15% in FY19. For personal use only Given the size of online and its strong contribution margin this is a material contributor to our underlying profit. Online Sales and % Mix 350 18% 300 15% 250 13% 200 10% 150
Slide 12: Our Omni Channel Approach
Our Omni Channel Approach Our Omni Channel Approach The role of our webstore is much more than sales generation/execution. It is an integral component of our business, and a key engagement point with our customers…. For personal use only Deliver a seamless Drive traffic to Adairs Grow our online sto
Slide 13: Strong Omni Channel Execution
Strong Omni Channel Execution For personal use only Our Omni Approach 900 Per Active Member Annual Spend ($) • Our ‘multi-channel’ customer is more engaged and 800 more valuable to Adairs 700 • We appear to get a materially higher share of her 600 510 wallet in our category 500 • She shops more ofte
Slide 14: Loyalty Program – Linen Lovers Club
For personal use only Loyalty Program – Linen Lovers Club Membership fee Members Benefits Everyday discount $19.95 650,000+ Free online delivery members Exclusive products, offers and events for 2 years is “paid for” Member numbers and store sales correlate strongly Member shop OMNI channel Member b
Slide 15: FY18 Outlook
FY18 Outlook 2018 Financial Outlook For personal use only Year End Stores 166 – 168 Sales ($m) 310 – 315 Gross Margin% 60% - 61% EBIT ($m) 44.0 – 46.5 Capital Investment ($m) 7–9 14
Slide 16: Questions?
FY18 Outlook Questions? For personal use only 15
Slide 17: Disclaimer
Strong Omni Channel Execution For personal use only Disclaimer Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Adairs Limited current intentions, pl