Dunelm Group Plc · LSE:DNLM
Dunelm — H1 FY25 Earnings Presentation
35 slides from Dunelm's earnings presentation, Feb 11, 2025
Slide 1: Interim results FY25
Interim results FY25 11 February 2025
Slide 2: Interim results FY25 agenda
Interim results FY25 1 Introduction 2 Financial review 3 Unlocking our full potential 4 Q&A 2
Slide 3: Introduction
Introduction Nick Wilkinson CEO 3
Slide 4: Highlights
Highlights +2.4% +30bps +4.3% +10bps Total sales Market share Active customers Gross margin growth growth1 growth2 growth £123m £169m 16.5p 35.0p FY24 H1: £123m FY24 H1: £91m FY24: 16.0p Profit before Free cash Interim dividend per Special dividend tax flow3 share per share 1 GlobalData UK combined
Slide 5: Driving good growth and returns
Driving good growth and returns • Maintaining our customer focus • Relentless focus on value and relevance amidst ongoing consumer caution • Harnessing insight and data to better understand and serve a growing range of customer missions • Playing to our strengths as a differentiated specialist • Ele
Slide 6: Financial review
Financial review Karen Witts CFO 6
Slide 7: Financial summary
Financial summary H1 FY25 H1 FY24 YoY Sales £893.7m £872.5m +2.4% Gross margin 52.8% 52.7% +10 bps Operating costs % sales 38.6% 38.1% +50 bps Profit before tax £123.2m £123.0m +0.2% Diluted earnings per share 45.0p 44.6p +0.9% H1 FY25 H1 FY24 YoY Free cash flow1 £168.5m £91.1m +£77.4m Net cash2 £57
Slide 8: Sales, customers and market share growth
Sales, customers and market share growth H1 FY25 H1 FY24 YoY Total market share2 Total sales £893.7m £872.5m +2.4% +30bps Digital % total sales1 39% 36% +3ppts vs 2023 Market share 2024 2023 YoY Market share2 7.8% 7.5% +30bps Active customer growth3 +4.3% • Sales growth driven by volume, against a c
Slide 9: Strong gross margin
Strong gross margin 52.7% 52.8% 51.8% 51.5% - 52.0% 51.1% 50.8% 50.1% 49.0% H1 H2 FY H1 H2 FY H1 FY FY23 FY24 FY25 • Strong gross margin of 52.8% in the first half, +10bps year-on-year • Well controlled input costs, continued operational grip • Maintained value proposition across all value tiers, wh
Slide 10: Cost grip in an inflationary environment
Cost grip in an inflationary environment £8m • Volume-driven variable costs added £9m £345m £7m (£11m) £7m • Continued inflationary headwinds due to sustained high wage inflation £333m across operational areas C:S • Investment includes manufacturing 38.0% and store operations in Made-to- 38.1% Costs
Slide 11: Approach to sustaining stable PBT margins
Approach to sustaining stable PBT margins • Track record of maintaining PBT margins through a period of significant cost inflation • Generate further operational leverage through our scale and capabilities • Cost mitigation focused on continuous improvement alongside targeted longer-term productivit
Slide 12: PBT, interest, tax and EPS
PBT, interest, tax and EPS H1 FY25 H1 FY24 Financial income and expenses (£5.4m) (£3.9m) Profit before tax £123.2m £123.0m Tax (£31.6m) (£32.3m) Effective tax rate 25.6% 26.3% Profit after tax £91.6m £90.7m Basic earnings per share 45.2p 44.9p Diluted earnings per share 45.0p 44.6p • PBT of £123.2m,
Slide 13: Strong cash generation
Strong cash generation H1 FY25 H1 FY24 • Free cash flow £169m (FY24 H1: Operating profit £128.6m £126.9m £91m), including £88m timing benefit Depreciation & amortisation1 £40.9m £40.4m which reversed on the first working Working capital inflow / (outflow) £93.6m (£3.0m) day of H2 (also reflected in
Slide 14: Continued attractive returns
Continued attractive returns Dividend history (pence per share) 100.0 91.5 • Capital light business model 77.0 82.0 78.5 returns surplus cash to 65.0 shareholders after prioritising 60.0 70.0 56.6 37.0 40.0 35.0 investment in the business 32.0 31.5 • Progressive interim dividend of 26.0 26.5 42.0 43
Slide 15: FY25 guidance
FY25 guidance • Environment remains challenging with volatile weekly trading patterns • FY25 gross margin to continue to be strong, now expected between 51.5% and 52.0% • Further acquisition in Greater London in legals; completion would result in FY25 capex of £60m – £70m, above previous guidance •
Slide 16: Unlocking our full potential
Unlocking our full potential Nick Wilkinson CEO 16
Slide 17: Interim results FY25
fe IN-STORE | ONLINE | LECT : y a
Slide 18: Unlocking our full potential as The Home of Homes
Unlocking our full potential as The Home of Homes • Building the Home of Homes, the UK’s most trusted and valuable brand for homewares and furniture 1. Elevate 2. Connect 3. Harness • Interconnected focus areas give structure our product offer x with more customers x our operational capabilities to
Slide 19: Elevate our product offer: Better value
1. Elevate our product offer Better value 1 2 3 Bathroom textiles Window dressing • Choice extends through nine value tiers from £4 • Curtains and blinds choice extends from ready- ‘good’ to £24 ‘best’ for a bath towel mades to bespoke Made-to-Measure • Quality upgrade to new & improved Egyptian • E
Slide 20: Braver designs and collaborations
1. Elevate our product offer Braver designs and collaborations 1 2 3 Elevated design Bolder collaborations • Elevation through design built on deep capabilities • Sophie Robinson x Dunelm collaboration launched established over time for SS25 • Extending popular furniture designs into • Elevating col
Slide 21: Better channel experiences (1/2)
2. Connect with more customers Better channel experiences (1/2) 1 2 3 Better search Social proofing • Differentiated products fuel our digital channels, and make personalisation meaningful • Continual optimisation and experimentation has a significant aggregate impact • Own and partner capabilities
Slide 22: Better channel experiences (2/2)
2. Connect with more customers Better channel experiences (2/2) 1 2 3 • Westfield: a different format, optimised to build awareness and consideration • Inspiring through collections and coordination • Highlighting quality at every price point • Early results encouraging for reaching new customers an
Slide 23: Acquisition of Home Focus
2. Connect with more customers Acquisition of Home Focus 1 2 3 • A heritage soft furnishings retailer with 13 small stores in high-quality locations across Ireland • Opportunity to connect with more customers in c.£1bn1 Ireland homewares market • Pleased with quality of the business and early tradin
Slide 24: Expanding our Click & Collect proposition
3. Harnessing our operational capabilities Expanding our Click & Collect proposition 1 2 3 Better customer journey Opportunity for efficiencies Customers • Click & Collect channel combines store-stocked • Self-service Click & Collect now available, lines plus centrally-fulfilled items and being furt
Slide 25: Driving productivity initiatives
3. Harnessing our operational capabilities Driving productivity initiatives 1 2 3 Performance marketing Self-serve checkouts • Optimising performance marketing across more of • Successful trial in three stores, being extended to the funnel and more channels some of our largest stores • AI search imp
Slide 26: Summary and outlook
Summary and outlook • Good performance in a challenging environment, with profits broadly flat year-on-year • High-quality sales growth underpinned by increased volumes, customer numbers and market share • Disciplined approach to pricing whilst maintaining outstanding value, and now expect FY gross
Slide 27: Q&A
Q&A 27
Slide 28: Appendix
tas om as] S vy a < ~~
Slide 29: Income statement
Income statement H1 FY25 H1 FY24 YoY Revenue £893.7m £872.5m £21.2m Cost of sales (£421.8m) (£413.0m) (£8.8m) Gross profit £471.9m £459.5m £12.4m Gross margin % 52.8% 52.7% +10 bps Operating income £1.6m - £1.6m Operating costs (£344.9m) (£332.6m) (£12.3m) Operating profit £128.6m £126.9m £1.7m Fina
Slide 30: Balance sheet
Balance sheet H1 FY25 H1 FY24 FY24 28 December 2024 30 December 2023 29 June 2024 Right-of-use assets £218.8m £222.7m £222.9m Other non-current assets £211.2m £185.1m £186.2m Inventories £228.5m £231.5m £223.0m Cash £57.1m £56.2m £23.4m Other current assets £38.7m £25.6m £26.5m Total assets £754.3m
Slide 31: 5-year financial summary
5-year financial summary FY20 FY21 FY22 FY23 FY24 H1 FY24 H1 FY25 (52 weeks) (52 weeks) (53 weeks) (52 weeks) (52 weeks) Total sales £1,057.9m £1,336.2m £1,581.4m £1,638.8m £1,706.5m £872.5m £893.7m Total sales growth (3.9%) 26.3% 18.4% 3.6% 4.1% 4.5% 2.4% Gross margin % 50.3% 51.6% 51.2% 50.1% 51.8
Slide 32: 10-year dividend history
10-year dividend history FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Ordinary dividend per share Interim 6.0p 6.5p 7.0p 7.5p - 12.0p 14.0p 15.0p 16.0p 16.5p Final 19.1p 19.5p 19.5p 20.5p - 23.0p 26.0p 27.0p 27.5p n/a Total 25.1p 26.0p 26.5p 28.0p - 35.0p 40.0p 42.0p 43.5p n/a Special Dividends
Slide 33: ESG highlights
ESG highlights Our Home the • Continuing to develop our Dunelm Circularity strategy and training commercial teams on circular design principles and how to implement within existing design processes Planet • Continuing to purchase 100% renewable electricity and installing solar PVs across our stores
Slide 34: Investment proposition
Investment proposition Compelling runway to grow share of a large, A winning and advantaged fragmented addressable market business model: Growth Consistent track record of share gains over recent and long-term history Market leading brand Low share of a c.£24bn1 highly fragmented market Specialist p
Slide 35: Thank you
Thank you 35