Slide 1: IFRS 16 and 2 year comparisons
July 2021 IFRS 16 and 2 year comparisons
Slide 2: July 2021
Next July 2021 -
Slide 3: Income Statement IFRS 16
Income Statement IFRS 16 £m July 2021 July 2019 Var Total sales 2,216 2,059 + 8% Full price sales Online + 55% Retail - 40% + 9% Total sales are not presented on a statutory basis.
Slide 4: Income Statement IFRS 16
Income Statement IFRS 16 £m July 2021 July 2019 Var Total sales 2,216 2,059 + 8% During Post Full price sales (LFL weeks) lockdown lockdown Online + 70% + 46% Retail n/a - 8% -4% open stores LFL Brand - 9% + 18% Total sales are not presented on a statutory basis. Post lockdown = stores in England op
Slide 5: Income Statement IFRS 16
Income Statement IFRS 16 £m July 2021 July 2019 Var Total sales 2,216 2,059 + 8% Operating profit 393 380 + 3% Net external interest (19) (21) Lease interest (27) (32) Interest (46) (53) Total sales are not presented on a statutory basis. July 2019 has been restated to reflect IFRS 16
Slide 6: Income Statement IFRS 16
Income Statement IFRS 16 £m July 2021 July 2019 Var Total sales 2,216 2,059 + 8% Operating profit 393 380 + 3% Interest (46) (53) Profit before tax 347 327 + 6% Tax charge (57) (60) Profit after tax 290 267 + 8% EPS 226.8p 204.4p + 11% Total sales are not presented on a statutory basis. July 2019 ha
Slide 7: Cash Flow IFRS 16
Cash Flow IFRS 16 £m July 2021 July 2019 Var Profit before tax 347 327 + 20m Depreciation and impairment 56 61 Capital expenditure (77) (65) - 12m Working capital / other 4 (35) Tax paid (63) (70) ESOT (73) (35) - 38m Cash flow before distribution 194 183 + 11m Buybacks 0 (280) Net cash flow 194 (97
Slide 8: Cash Flow IFRS 16
Cash Flow IFRS 16 £m July 2021 July 2019 Var Profit before tax 347 327 Depreciation and impairment 56 61 Capital expenditure (77) (65) Working capital / other 4 (35) + 39m Tax paid (63) Stock (70) and supplier payments 54m ESOT (73) Sale of Elmsall 3 land (35) 22m Future repayment of business rates
Slide 9: Balance Sheet IFRS 16
Balance Sheet IFRS 16 £m July 2021 July 2019 Var Fixed assets and investments 551 575 Goodwill and intangibles 74 45 Stock 572 584 - 2% Debtors / other receivables 1,170 1,254 Stock in UK Other creditors / derivatives (692) (627) - 12% Pension surplus 133 142 NEXT stock in UK - 18% Dividends payable
Slide 10: Balance Sheet IFRS 16
Balance Sheet IFRS 16 £m July 2021 July 2019 Var Fixed assets and investments 551 575 Goodwill and intangibles 74 45 Stock 572 584 Debtors / other receivables 1,170 1,254 - 84m Other creditors / derivatives July(692) 2021 (627) July 2019 Customer Pension surplusreceivables 133 £1.1bn -11% 142 £1.2bn
Slide 11: Balance Sheet IFRS 16
Balance Sheet IFRS 16 £m July 2021 July 2019 Var Fixed assets and investments 551 575 Goodwill and intangibles 74 45 Stock 572 584 Sept 2021 Debtors / other receivables 1,170 1,254 110p Other creditors / derivatives (692) (627) Special Pension surplus 133 142 dividend Dividends payable 0 (140) = £14
Slide 12: Balance Sheet IFRS 16
Balance Sheet IFRS 16 £m July 2021 July 2019 Var Fixed assets and investments 551 575 Goodwill and intangibles 74 45 Stock 572 584 Debtors / other receivables 1,170 1,254 Other creditors / derivatives (692) (627) Pension surplus 133 142 Dividends payable 0 (140) Net debt (excluding lease debt) (416)
Slide 13: Divisional Analysis: Online
DIVISIONAL ANALYSIS Online
Slide 14: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price sales 2021 v 2019 (LFL weeks) + 78% + 66% + 54% Phasing + 51% + 42% + 40% + 45% + 40%(e) Division Customer type Feb Mar Apr May Jun Jul Aug Sep
Slide 15: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price sales 2021 v 2019 By division H1 By product category NEXT Brand UK + 46% Home + 121% Phasing LABEL UK + 70% Kids + 62% UK total + 53% Adult fashion + 28% Division Overseas + 62% Customer type
Slide 16: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price returns rate % 45% H1 2019 40% NEXT Brand UK + 46% Product mix Q1 average Phasing LABEL UK + 70% 35% - 11% - 16% UK total + 53% 30% Division Customer Overseas + 62% behaviour 2021 25% - 5% Cu
Slide 17: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price returns rate % Dispatches + 34% 45% H1 2019 40% NEXT Brand UK + 46% Product mix 35% Phasing LABEL UK + 70% UK total + 53% 30% Division Customer behaviour Overseas + 62% 2021 Saving £20m 25% C
Slide 18: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price sales analysis By customer type H1 UK credit + 34% Phasing UK cash + 125% Division Overseas + 62% NEXTdirect.com + 49% Customer type Online total + 55% Aggregators + 210%
Slide 19: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price sales analysis Spend per July 2021 By customer type H1 customer * v 2019 UK credit + 34% £256 + 25% Phasing UK cash + 125% £88 + 22% Division NEXTdirect.com + 49% £148 + 3% Customer type Onli
Slide 20: Online | Sales Analysis
Online | Sales Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Full price sales analysis By customer type UK spend per customer UK credit £30 2021 Phasing UK cash Division £25 2019 Customer type £20 Feb Mar Apr May Jun Jul Spend per customer is for online transacti
Slide 21: Online | Profit Analysis
Online | Profit Analysis £m July 2021 July 2019 Var Full Price Total sales 1,522 1,005 + 52% + 55% Operating profit 318 183 + 74% % to sales 20.9% 18.2% + 2.7% Freight costs - 0.4% LABEL participation - 0.7% NEXT product mix - 0.3% Bought-in gross margin - 1.4% July 2019 has been restated to reflect
Slide 22: Online | Profit Analysis
Online | Profit Analysis July 2021 July 2019 Var Total sales 1,522 1,005 Operating profit 318 183 % to sales 20.9% 18.2% + 2.7% Bought-in gross margin - 1.4% Surplus + 1.0% Stock for sale + 12% Achieved gross margin - 0.4% Markdown sales + 10% July 2019 has been restated to reflect IFRS 16
Slide 23: Online | Profit Analysis
Online | Profit Analysis July 2021 July 2019 Var Total sales 1,522 1,005 Operating profit 318 183 % to sales 20.9% 18.2% + 2.7% Achieved gross margin - 0.4% Catalogues & photography + 1.9% Lower Online returns rate + 1.3% Warehouse & distribution + 0.6% Overseas surcharges - 0.8% Fixed cost leverage
Slide 24: Online | Profit Analysis
Online | Profit Analysis July 2021 July 2019 Var Total sales 1,522 1,005 Operating profit 318 183 % to sales 20.9% 18.2% + 2.7% Achieved gross margin - 0.4% Catalogues & photography + 1.9% FY guidance Warehouse & distribution + 0.6% 2021/22 margin Systems + 0.4% 20%(e) Central costs + 0.2% Total mar
Slide 25: Divisional Analysis: NEXT Finance
DIVISIONAL ANALYSIS NEXT Finance
Slide 26: NEXT Finance | Key Drivers of Sales and Profit
NEXT Finance | Key Drivers of Sales and Profit £m July 2021 July 2019 Var Credit sales* 939 833 + 13% Avg. customer receivables 1,020 1,167 - 13% Monthly closing customer receivables balance £1,300m £1,186m £1,052m £1,100m £993m £900m £700m £500m Jan 2019 Jul 2019 Jan 2020 Jul 2020 Jan 2021 Jul 2021
Slide 27: NEXT Finance | Key Drivers of Sales and Profit
NEXT Finance | Key Drivers of Sales and Profit £m July 2021 July 2019 Var Credit sales* 939 833 + 13% Avg. customer receivables 1,020 1,167 - 13% Monthly closing customer receivables balance Monthly credit sales (incl. interest income) £1,300m £200m £1,100m £150m £900m £100m £700m £50m £500m £m Jan
Slide 28: NEXT Finance | Income Statement
NEXT Finance | Income Statement £m July 2021 July 2019 Var Credit sales* 939 833 + 13% Avg. customer receivables 1,020 1,167 - 13% Interest income 119 134 Bad debt charge (17) (19) Overheads (21) (21) Profit before cost of funding 81 94 Cost of funding (16) (18) Net profit 66 76 - 13% ROCE (after co
Slide 29: Divisional Analysis: Retail
Fosse Park West, Leicester Opened April 2021 DIVISIONAL ANALYSIS Retail
Slide 30: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2021 July 2019 Var Total sales 540 874 - 38% LFL full price sales (for the LFL weeks stores were open) - 4% By month 5% + 2% 0% - 1% 0% - 5% - 3% - 6%(e) - 10% - 12% - 15% Feb Mar Apr May Jun Jul Aug Sep
Slide 31: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2021 July 2019 Var Total sales 540 874 - 38% LFL full price sales (for the LFL weeks stores were open) By store type Participation % by sales Regional Year to Jan 2020 City centres shopping Retail parks centres + 2% City centres - 7% 27% Jul 2021 - 11% vs J
Slide 32: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2021 July 2019 Total sales 540 874 Operating (loss)/profit (18) 91 Operating (loss)/profit including lease interest (39) 61 2021/22(e) FY guidance including lease interest £60m July 2019 has been restated to reflect IFRS 16
Slide 33: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis Focus on rent payable 2021(e) 2019 annualised annualised Var Gross rent, rates and service charge payable £308m £347m - 11% FY 2021(e) rent reductions Weighted No. of stores Rent reduction average term Annualised saving 73 - 52% 3.0 years £11.5m Including 28 flexib
Slide 34: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis Focus on rent payable 2021(e) 2019 annualised annualised Var Gross rent, rates and service charge payable £308m £347m - 11% TOC deal example Turnover (VAT ex.) £1.6m Before After Rent £200k Rates £124k Service charge £88k £412k £230k - 44% 3 years % of turnover 14%
Slide 35: Estimated Impact of Lockdown
Estimated Impact of Lockdown
Slide 36: Estimated Impact of Lockdown
Estimated Impact of Lockdown Full price Retail Sales lost - £250m Sales gained in rebound + £20m Net sales lost - £230m
Slide 37: Estimated Impact of Lockdown
Estimated Impact of Lockdown Full price Retail UK Online Net sales lost / gained - £230m + £155m 67% Full price margin - £125m 54% + £60m 39% Rates relief + £20m - Recharges & cost savings + £19m - £14m Lower customer returns - + £20m Effect of lockdown on profit - £86m + £66m - £20m UK Online inclu
Slide 38: NEXT PLC 2021/22 Outlook
NEXT PLC 2021/22 Outlook
Slide 39: Central Guidance | Full Price Sales 2021/22(e) v 2019/20
Central Guidance | Full Price Sales 2021/22(e) v 2019/20 + 8.8% Previous guidance + 6% H1 H2(e)
Slide 40: Central Guidance | Full Price Sales 2021/22(e) v 2019/20
Central Guidance | Full Price Sales 2021/22(e) v 2019/20 New guidance + 12% Season to date + 8.8% + 20%(e) Rest of season + 10%(e) H1 H2(e)
Slide 41: Central Guidance | Full Price Sales 2021/22(e) v 2019/20
Central Guidance | Full Price Sales 2021/22(e) v 2019/20 2021/22 v 2019/20 £ Var Retail - 25% - £410m Online + 44% + £840m Finance - 8% - £20m + 11% + £410m FY(e)
Slide 42: Central Guidance | Profit 2021/22(e)
Central Guidance | Profit 2021/22(e) FP margin before FP sales fixed overheads movement Profit performance 2019/20 - £410m Retail lost profit £220m £749m 54% NEXT UK Online + £330m £156m 48% LABEL + £280m 28% £77m Overseas + £230m 17% £40m Total Platform & Partners £10m Numbers are stated on an IFRS
Slide 43: Central Guidance | Profit 2021/22(e)
Central Guidance | Profit 2021/22(e) FP sales movement Profit performance 2019/20 - £410m Retail lost profit £220m £749m NEXT UK Online Online LABEL Total Platform &Overseas Partners + £840m £156m £283m £77m £40m £10m Finance - £20m £17m Cost increases + £410m £135m Cost savings 2021/22(e) £140m + 6
Slide 44: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom Jan 2021 £610m £402m(e) Special dividend Paid Sept. 2021/22(e) Profit Operational cash flow £140m 110p £800m £692m(e) Reiss investment Customer receivables £43m Capital £116m(e) expenditure £185m(e) Net debt
Slide 45: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom Jan 2021 Jan 2022 £610m £610m(e) Special dividend and/or investments £208m(e) Special dividend Operational cash flow £140m £692m(e) Reiss investment Customer receivables £43m Capital £116m(e) expenditure £185m(e) Net debt
Slide 46: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom Customer receivables 58% £1.1bn Jan 2022 Jan 2022 £610m(e) Net debt Financing
Slide 47: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom £1.3bn Headroom(e) 2024 Customer £450m Bank facility >£500m receivables 2022/23 Peak(e) £100m £1.1bn 2025 £250m 2026 Jan 2022 Jan 2022 Bonds £250m £610m(e) After £325m 2028 repayable Oct 2021 £300m Net debt Financing
Slide 48: The Journey
The Journey
Slide 49: The Journey
The Journey Jan 2017 Jan 2019 July 2021 ...at this time of significant uncertainty, we feel that the decision to buy back shares is best left to shareholders themselves.
Slide 50: The Journey
The Journey Jan 2017 Jan 2019 July 2021 15 year stress test £12bn
Slide 51: The Journey
The Journey Jan 2017 Jan 2019 July 2021 DECREASING Retail Threat INCREASING Online Opportunities
Slide 52: Sales Participation
July 2021 Sales Participation DECREASING Online & Finance Retail Threat 40% Online & Finance 70% INCREASING Retail Online 60% Retail Opportunities 30% 2015/16 2021/22(e)
Slide 53: Sales Participation: Four areas of focus
July 2021 Sales Participation DECREASING Online INCREASING Online & Finance Retail Threat 40% Online Opportunities & Finance 70% Retail Four areas 60% Retail of focus 30% 2015/16 2021/22(e)
Slide 54: Online Opportunities: NEXT Product Choice
Online Opportunities NEXT Product Choice Options growth + 120% Fabrics Fits Sizes 55k 25k Prices Designs Categories H1 2016 H1 2021
Slide 55: Online Opportunities: 320+ New Brands
Online Opportunities 320+ New Brands in the last two years NEXT Product Choice HOME BEAUTY LABEL Product + 65 + 85 FASHION + 170 Full price sales £m 710 + 270% 192 Platform Plus 48 hours Jan Jan Jan Jan Jan Jan 2017 2018 2019 2020 2021 2022(e)
Slide 56: Online Opportunities: Online Marketing
Online Opportunities Online Marketing NEXT Product Choice LABEL Product Digital Customer Growth + 400% Jan 2021 £65m 8.4m customers + 40% v 2 years £13m + 73% v 5 years Jan Jan 2017 2022(e)
Slide 57: Online Opportunities: Online Marketing
Online Opportunities Online Marketing NEXT Product Choice £100m LABEL Product Total Customer Growth £35m Other Jan 2021 £65m Digital 8.4m customers £28m + 40% v 2 years £13m + 73% v 5 years Jan Jan 2017 2022(e)
Slide 58: Online Opportunities: Collaborative Marketing
Online Opportunities Collaborative Marketing NEXT Product Choice £100m LABEL Product Total Customer Growth £35m Other Jan 2021 £65m Digital 8.4m customers + 40% v 2 years + 73% v 5 years Jan Jan 2017 2022(e)
Slide 59: Online Opportunities 2021/22(e)
Online Opportunities 2021/22(e) NEXT Product Choice Gross sales* £50m LABEL Product TP profit £3m 6% Customer Growth Equity profit £7m Total Platform £10m * Excludes retail sales in Victoria’s Secret stores
Slide 60: Online Opportunities Tough Questions
Online Opportunities Tough Questions NEXT Product Choice Are lockdown customers here to stay? LABEL Product Can our warehouses cope? Customer Growth Total Platform Is our technology ready?
Slide 61: Are lockdown customers here to stay?
Are lockdown customers here to stay? Customer Retention + 28% + 9% New + 60% New New Existing Existing + 18% Existing Jan 2019 Jan 2020 Jan 2021
Slide 62: Are lockdown customers here to stay?
Are lockdown customers here to stay? Customer Retention Q4 cohort (Nov to Jan) 1.4m New 806k New New Existing Existing Existing Jan 2019 Jan 2020 Jan 2021
Slide 63: Are lockdown customers here to stay?
Are lockdown customers here to stay? Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Spend per Remain active customer ~ 9 months 806k 147k £83 18% Q4 recruits 1.4m ~ 9 months 275k £102 19% + 23%
Slide 64: Are lockdown customers here to stay?
Are lockdown customers here to stay? Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 ~ 18 months 436k 80k £155 18% ~ 18 months Q1 recruits 369k 85k £179 23% + 16%
Slide 65: Are lockdown customers here to stay?
Are lockdown customers here to stay? Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Spend per customer ? Remain active ~ 9 months 806k Early days… 147k £83 18% Q4 recruits Work from home 1.4m ~ 9 months 275k £102 19% + 23% Stores open five months ~ 18 months Staycations 436k 80k £155 18% ~ 18 months Q
Slide 66: Can our warehouses cope?
Can our warehouses cope?
Slide 67: Can our warehouses cope?
Can our warehouses cope? Weekly Picking Capacity 4.5m + 15% 4m 2021 = 3.9m units/wk 3.5m 2019 = 3.4m units/wk 3m 2.5m 2m Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Slide 68: Can our warehouses cope?
Can our warehouses cope? Weekly Picking Capacity 2021/22(e) 4.5m Mid Season Sale Summer Sale 4m Markdown 3.5m Full price 3m 2.5m Actual Forecast 2m Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Slide 69: Can our warehouses cope?
Can our warehouses cope? Packing Volumes 11pm 3 hrs 2am MONDAY 11pm Markdown TUESDAY Full price 10pm 9pm 8pm Actual Forecast 5pm 8pm 11pm 2am 5am 8am 11am
Slide 70: Can our warehouses cope?
Can our warehouses cope? Packing Volumes 8pm 6 hrs 2am MONDAY 11pm Markdown TUESDAY Full price 10pm 9pm 8pm Actual Forecast 5pm 8pm 11pm 2am 5am 8am 11am
Slide 71: Can our warehouses cope?
Can our warehouses cope? Packing Volumes 8pm 6 hrs 2am MONDAY Markdown TUESDAY Full price 10pm 9pm 11pm 8pm Actual Forecast 5pm 8pm 11pm 2am 5am 8am 11am
Slide 72: Can our warehouses cope?
Can our warehouses cope? Weekly Picking Volumes (Main Boxed Warehouse) 8m 2021 2022 2023 Elmsall 3 (mechanised) 6m 6th sorter (existing) Floorspace (Elmsall 3) + 45% 4m + 15% Jul 2022 Oct 2023 2m 0m
Slide 73: Elmsall 3
Phase 1 + 45% Elmsall 3
Slide 74: Elmsall 3 and Elmsall 4?
Phase 1 + 90% & Phase 2 18 months lead time Elmsall 3 Elmsall 4?
Slide 75: Is our technology ready?
Is our technology ready?
Slide 76: The Need to Modernise
Is our technology ready? The Need to Modernise Function rich Resilient Marketing & but… Monolithic Secure content mgt. Log in Payment Product page Search Shopping bag Navigation e.g. E-Commerce system
Slide 77: Modular Development
Is our technology ready? Modular Development Marketing & content Product Shopping Log in mgt. Search Navigation page bag Delivery Payment Communication layer
Slide 78: Is our technology ready?
Is our technology ready? Sept 2020 2021 2022 2023 2024 1. E-Commerce (major) Log in Marketing & content mgt. Search Navigation Product page Shopping bag Delivery Payment 1. E-Commerce (minor) • Header & navigation LIVE • ‘My Account’ services 2024 • Footer & services LIVE • Delivery page 2024 • Clou
Slide 79: Modernise and Develop
Is our technology ready? Sept 2020 2021 2022 2023 2024 1. E-Commerce (major) 1. E-Commerce (minor) 2. HR & Payroll MODERNISE 3. Big Data & Analytics 4. Buying & Merchandising 5. Finance & Accounting 6. Payment Processing DEVELOP 7. Warehousing >> 8. Contact Centres & CRM
Slide 80: The Cost
Is our technology ready? The Cost £40m £40m Capex Infrastructure £36m £36m Capex Software £30m 25% £21m 75% £20m £10m £9m £4m £0m Jan 2019 Jan 2020 Jan 2021 Jan 2022(e) Jan 2023(e) Jan 2024(e)
Slide 81: The Cost
Is our technology ready? The Cost £170m £160m Revenue £142m £154m +107% Capex £120m £104m £97m £82m £80m £40m £0m Jan 2019 Jan 2020 Jan 2021 Jan 2022(e) Jan 2023(e) Jan 2024(e)
Slide 82: The Cost
Is our technology ready? The Cost £160m Revenue Capex £120m PEOPLE £80m • Reorganise • Regrade £40m £0m Jan 2019 Jan 2020 Jan 2021 Jan 2022(e) Jan 2023(e) Jan 2024(e)
Slide 83: Challenges & Uncertainties
Challenges & Uncertainties Online Opportunities Are lockdown customers NEXT Product Choice here to stay? LABEL Product Can our warehouses cope? Customer Growth Is our technology ready? Total Platform