Slide 1: July 2022
July 2022 All figures presented on an IFRS 16 basis Figures shown using 3 year comparisons (unless otherwise stated) Rounding differences in tables not adjusted
Slide 2: Income Statement
Income Statement £m July 2022 July 2019 Var Total sales 2,546 2,059 + 24% Full price sales Online + 46% Retail - 1% + 22% FP CAGR + 6.9% Incl. Finance Total sales are not presented on a statutory basis.
Slide 3: Income Statement
Income Statement £m July 2022 July 2019 Var Total sales 2,546 2,059 + 24% Operating profit 434 380 + 14% Lease interest (23) (32) Operating profit after lease interest 411 348 + 18% Operating profit % 16.1% 16.9% Overseas margin decline Retail margin improvement Investment in technology No catalogue
Slide 4: Income Statement
Income Statement £m July 2022 July 2019 Var Total sales 2,546 2,059 + 24% Operating profit 434 380 + 14% Lease interest (23) (32) Financing interest (10) (21) Interest (33) (53) Profit before tax 401 327 + 22% Tax charge (72) (60) Profit after tax 329 267 + 23% EPS 262.3p 204.4p + 28% Total sales ar
Slide 5: Cash Flow
Cash Flow £m July 2022 July 2019 Var Profit before tax 401 327 Depreciation and impairment 57 61 Capital expenditure (107) (65) - 42m Investments (64) (0) Working capital / other (174) (35) - 139m Tax paid (70) (70) ESOT (77) (35) - 42m Cash flow before distribution (33) 183 Buybacks (228) (280) Net
Slide 6: Cash Flow
Cash Flow £m July 2022 July 2019 Var Capital expenditure (107) (65) - 42m 8m Approximate Capacity Q1 Weekly Pick & Capacity • Multi-packing solution Volumes (units) Oct + 50% 6m • High bay storage Oct • Automated picking + 35% • 6th packing sorter 4m E3 floorspace + 15% 2m E3 Online Boxed Warehouse
Slide 7: Cash Flow
Cash Flow £m July 2022 July 2019 Var Profit before tax 401 327 Depreciation and impairment 57 61 Capital expenditure (107) (65) Investments (64) (0) Working capital / other (174) (35) - 139m Tax paid (70) (70) Stock c. - 90m ESOT (77) (35) 2021 staff incentives c. - 50m Cash flow before distribution
Slide 8: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom Jan 2023 £700m(e) Jan 2022 £600m • Interim dividend Dividends declared 66p £240m Operational Share cash flow buybacks £664m(e) Customer £228m receivables £90m(e) £740m(e) March est. Capital Investments • Reiss and other + £53m expenditure £3m • Property acquisitions
Slide 9: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom £1.25bn 2024 Bank facility £450m 2025 £250m 2026 Jan 2023 Bonds £250m £700m(e) 2028 £300m Net debt Financing
Slide 10: Net Debt and Financing | Headroom
Net Debt and Financing | Headroom £1.25bn Jan 2023 2024 £1.25bn(e) £450m 2025 £250m 2026 Jan 2023 £250m £700m(e) 56% 2028 £300m Net debt Customer Financing receivables
Slide 11: Balance Sheet
Balance Sheet £m July 2022 July 2019 Var Fixed assets and investments 709 575 + 134m Goodwill and intangibles 93 45 Investments Stock 805 584 + 109m Debtors / other receivables 1,318 1,254 Other creditors / derivatives (738) (627) Pension surplus 191 142 Dividends payable (157) (140) Net debt (exc.
Slide 12: Balance Sheet
Balance Sheet £m July 2022 July 2019 Var Fixed assets and investments 709 575 Goodwill and intangibles 93 45 + 48m Stock 805 584 Capitalised Debtors / other receivables 1,318 1,254 software Other creditors / derivatives (738) (627) Pension surplus 191 142 Dividends payable (157) (140) Net debt (exc.
Slide 13: Balance Sheet
Balance Sheet £m July 2022 July 2019 Var Fixed assets and investments 709 575 Goodwill and intangibles 93 45 Stock 805 584 + 38% Debtors 6 monthly/stock other receivables balance 1,318 1,254 Warehouse stock + 27% Other £800m creditors / derivatives (738) (627) Freight lead times + 2.5 weeks Pension
Slide 14: Balance Sheet
Balance Sheet £m July 2022 July 2019 Var Fixed assets and investments 709 575 Goodwill and intangibles 93 45 Stock 805 584 Debtors / other receivables 1,318 1,254 Other creditors / derivatives (738) (627) Pension surplus 191 142 Dividends payable (157) (140) Net debt (exc. lease debt) (862) (1,193)
Slide 15: Balance Sheet IFRS 16
Balance Sheet IFRS 16 £m July 2022 July 2019 Var Fixed assets and investments 709 575 Goodwill and intangibles 93 45 Stock 805 584 Debtors / other receivables 1,318 1,254 Other creditors / derivatives (738) (627) Pension surplus 191 142 Dividends payable (157) (140) Net debt (exc. lease debt) (862)
Slide 16: Retail
Retail DIVISIONAL ANALYSIS Manchester Arndale
Slide 17: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Full Price Total sales 880 874 + 1% - 1% Like For Like full price NSVE sales LFL Full Price + 0.5% vs 3 years + 7.5% Low stock Great weather - 6.9% Q1 Q2
Slide 18: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Full Price Total sales 880 874 + 1% - 1% NEXT UK Retail full year sales history (Full price NSVE sales) £2.5bn £2bn CAGR - 6.2% 2.0bn 1.9bn £1.5bn 1.7bn 1.7bn £1bn £0.5bn £bn 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23(e)
Slide 19: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Full Price Total sales 880 874 + 1% - 1% NEXT UK Retail full year sales history (Full price NSVE sales) £2.5bn £2bn CAGR - 6.2% 2.0bn CAGR - 1.7% 1.9bn £1.5bn 1.7bn 1.7bn 1.6bn(e) £1bn 1.3bn 0.9bn £0.5bn £bn 2016/17 2017/18 2018/19 2019/2
Slide 20: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Total sales 880 874 + 1% Operating profit 101 91 + 11% Lease interest charge (19) (30) - 37% Operating profit 82 61 + 34% inc. lease interest
Slide 21: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Total sales 880 874 + 1% Operating profit 82 61 inc. lease interest % to sales 9.3% 7.0% + 2.3% Cash saving + 2.3% Increase in fully depreciated assets + 1.2% Impact of new leases / IFRS 16 timing + 0.8% Onerous Lease Provision utilisatio
Slide 22: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Total sales 880 874 + 1% Operating profit 82 61 + 34% inc. lease interest % to sales 9.3% 7.0% Total occupancy costs + 4.7% (inc. lease interest) FY 2022(e) rent reductions No. of stores Weighted avg. term Occ. saving* Annualised saving*
Slide 23: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Total sales 880 874 + 1% Operating profit 82 61 + 34% inc. lease interest % to sales 9.3% 7.0% Total occupancy costs + 4.7% (inc. lease interest) Freight costs - 0.6% Surplus - 0.8% Stock for sale + 22% Achieved gross margin - 1.4% Cash r
Slide 24: Retail | Sales and Profit Analysis
Retail | Sales and Profit Analysis £m July 2022 July 2019 Var Total sales 880 874 + 1% Operating profit 82 61 + 34% inc. lease interest % to sales 9.3% 7.0% + 2.3% Total occupancy costs + 4.7% (inc. lease interest) FY operating profit guidance Achieved gross margin - 1.4% Inc. lease interest 2022/23
Slide 25: Online
Online DIVISIONAL ANALYSIS
Slide 26: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% NEXT Online full year sales history (Full price NSVE sales) FP CAGR - 5% + 13.5% £2.5bn 2.8bn 3 YR CAGR 2.6bn(e) £2bn + 13.1% Trend 2.1bn £1.5bn 1.9bn 1.5bn 1.7bn Division £1bn 1.3bn £0.5bn Customer typ
Slide 27: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 By division H1 LABEL sales growth contribution NEXT Brand UK 24% New brands Trend LABEL UK 105% 55% UK total 48% Division Existing brands Customer type 50% Returns rat
Slide 28: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 By division H1 NEXT Brand UK 24% Trend LABEL UK 105% Exc. Russia & UK total 48% Ukraine Division Overseas 41% 55% Customer type Online total 46% 50% Returns rates
Slide 29: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 Overseas sales growth participation By division H1 NEXT Brand UK 24% Aggregators Trend LABEL UK 105% 25% UK total 48% Division Overseas* 55% NEXTdirect.com* Customer t
Slide 30: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 Overseas sales participation 2019 By division H1 Aggregators NEXT Brand UK 24% 9% Trend LABEL UK 105% UK total 48% Division 91% Overseas* 55% Customer type NEXTdirect.
Slide 31: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 Overseas sales participation 2022 By division H1 Aggregators NEXT Brand UK 24% 3 year growth + 274% 22% Trend LABEL UK 105% UK total 48% Division 3 year growth Oversea
Slide 32: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 Customer participation Credit By customer type Cash UK credit + 31% 60% 56% 51% 44% 44%(e) Trend UK cash + 112% UK total + 48% Division 56% 56%(e) 49% 40% 44% Customer
Slide 33: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Full price NSVE sales 2022 vs 2019 Total NSVE sales participation Credit By customer type Cash UK credit + 31% 80% 78% 69% 67% 66%(e) Trend UK cash + 112% UK total + 48% Division Customer type 31% 33% 3
Slide 34: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Spend per customer* (exc. Russia & Ukraine) By customer type H1 2022 vs H1 2019 UK credit £243 + 19% Trend UK cash £86 + 19% UK total £156 + 6% Division Overseas £140 - 8% Country mix + 3% Customer type
Slide 35: Online | Sales Analysis
Online | Sales Analysis £m July 2022 July 2019 Var Full Price Total sales 1,427 1,005 + 42% + 46% Returns rate analysis Full price sales H1 2022 41.9% H1 2019 Average spend 41.1% + 0.9% Trend Product mix + 0.7% Division Cash / credit mix - 2.2% Aggregator & Customer type country mix + 1.4% Returns r
Slide 36: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 + 42% Operating profit 221 185 + 19% % to sales 15.5% 18.4% - 2.9% Freight costs - 0.6% LABEL vs NEXT mix - 1.5% Bought-in gross margin - 2.1%
Slide 37: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 + 42% Operating profit 221 185 + 19% % to sales 15.5% 18.4% Bought-in gross margin - 2.1% Markdown - 0.2% Achieved gross margin x- 2.3%
Slide 38: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 + 42% Operating profit 221 185 + 19% % to sales 15.5% 18.4% Achieved gross margin x- 2.3% UK cost inflation - 2.1% Warehouse & distribution - 1.4% Overseas - 0.6% Increase in ASP + 1.3%
Slide 39: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 + 42% Operating profit 221 185 + 19% % to sales 15.5% 18.4% Achieved gross margin x- 2.3% Warehouse & distribution - 1.4% FY guidance Technology - 0.7% 2022/23 margin Print + 1.5% ~15.3%(e) Total margin movement - 2.9%
Slide 40: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 Operating profit 221 185 % to sales 15.5% 18.4% Reallocate Margin by revenue stream overheads Inc. Lipsy NEXT brand UK 21.2% + 0.9% LABEL UK 13.3% - 2.2% + 1.0% Overseas 17.0% + 0.2%
Slide 41: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 Operating profit 221 185 % to sales 15.5% 18.4% Margin by revenue stream NEXT brand UK 21.0% 21.2% - 0.2% LABEL UK 13.2% 13.3% - 0.1% Overseas 7.4% 17.0% - 9.6%
Slide 42: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 Operating profit 221 185 % to sales 15.5% 18.4% Margin by revenue stream Overseas 7.4% 17.0% - 9.6% Middle East duty & import VAT - 2.7% Technology - 0.8% Selling prices Delivery costs & logistics - 2.5% Aggregator margin &
Slide 43: Online | Profit Analysis
Online | Profit Analysis £m July 2022 July 2019 Var Total sales 1,427 1,005 Operating profit 221 185 % to sales 15.5% 18.4% Margin by revenue stream Overseas 7.4% 17.0% - 9.6% H2 guidance 9.0%(e) Long term target… 12.0%
Slide 44: NEXT Finance
NEXT Finance DIVISIONAL ANALYSIS 1 year comparison vs 2021/22
Slide 45: NEXT Finance | Key Drivers of Sales and Profit
NEXT Finance | Key Drivers of Sales and Profit £m July 2022 July 2021 Var Credit sales* 967 939 + 3% Avg. customer receivables 1,152 1,020 + 13% Closing customer receivables balance by month £1.3bn 2019/20 2020/21 2021/22 2022/23 £1.2bn £1.1bn Average + 13% £1bn £900m Feb May Aug Nov Feb May Aug Nov
Slide 46: NEXT Finance | Key Drivers of Sales and Profit
NEXT Finance | Key Drivers of Sales and Profit £m July 2022 July 2021 Var Credit sales* 967 939 + 3% Avg. customer receivables 1,152 1,020 + 13% Closing customer receivables balance by month £1.3bn 2019/20 2020/21 2021/22 2022/23 £1.2bn Forecast £1.1bn + 8% £1bn £900m Feb May Aug Nov Feb May Aug Nov
Slide 47: NEXT Finance | Income Statement
NEXT Finance | Income Statement £m July 2022 July 2021 Var Credit sales* 967 939 + 3% Avg. customer receivables 1,152 1,020 + 13% Interest income 134 119 + 12% Bad debt charge (10) (17) Covid provision release 3 Debt sale 3 Reduced provision rate 3 * Inc. Online and Retail sales paid on a NEXT credi
Slide 48: NEXT Finance | Income Statement
NEXT Finance | Income Statement Provision provision rate and defaults Observed default rate 4.5% 4.3% 3.7% 3.7% 3.9% 3.4% 3.3% 3.3% 3.4% 3.2% Defaults & insolvencies (net of expected recoveries) as a % of average customer receivables Jan Jan Jan Jan Jan Jan Jan Jan Jan Jul 2014 2015 2016 2017 2018 2
Slide 49: NEXT Finance | Income Statement
NEXT Finance | Income Statement Provision rate and defaults 10.0% 9.8% Closing provision 9.2% for future defaults 8.8% 7.0% Observed default rate 4.5% 4.3% 3.7% 3.7% 3.9% 3.4% 3.3% 3.3% 3.2% 3.4% Jan Jan Jan Jan Jan Jan Jan Jan Jan Jul 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022 (Annualised)
Slide 50: NEXT Finance | Income Statement
NEXT Finance | Income Statement Payment rates 17% 2018/19 2019/20 2020/21 2021/22 2022/23 16% May 15% Monthly payments as a % 2021 of customer balance 14% Feb Feb 2020 July 2018 13% 2022 Avg. 14.4% Higher than 12% pre-Covid Avg. 12.5% 11% Feb 2019 Feb 2020 Feb 2021 Feb 2022
Slide 51: NEXT Finance | Income Statement
NEXT Finance | Income Statement £m July 2022 July 2021 Var Credit sales 967 939 + 3% Avg. customer receivables 1,152 1,020 + 13% Interest income 134 119 + 12% Bad debt charge (10) (17) Overheads (27) (21) Profit before cost of funding 96 81 Cost of funding (16) (16) Net profit 81 66 + 23% ROCE (afte
Slide 52: 2022/23 Outlook
“ There are two kinds of forecasters. Those who don’t know, and those who don’t know they don’t know.” John Kenneth Galbraith 2022/23 Outlook NEXT PLC
Slide 53: 2022/23(e) Full Price Sales | Year Comparison vs 2021/22
2022/23(e) Full Price Sales | 1 Year Comparison vs 2021/22 Q2 Q3 Q4 May Jun Jul Aug Sep Oct Nov Dec Jan + 4.9% To 24th Sept + 5.0% - 3.1%
Slide 54: 2022/23(e) Full Price Sales | Year Comparison vs 2021/22
2022/23(e) Full Price Sales | 1 Year Comparison vs 2021/22 Q2 Q3 Q4 May Jun Jul Aug Sep Oct Nov Dec Jan + 4.9% To 24th Sept + 5.0% PREVIOUS rest of year forecast + 1.0% + 1.0% - 0.3% STD - 3.1%
Slide 55: 2022/23(e) Full Price Sales | Year Comparison vs 2021/22
2022/23(e) Full Price Sales | 1 Year Comparison vs 2021/22 Q2 Q3 Q4 May Jun Jul Aug Sep Oct Nov Dec Jan + 5.0% NEW rest of year forecast - 0.3% Aug / Sept - 2.0% - 2.0%
Slide 56: 2022/23(e) Full Price Sales | Year Comparison vs 2021/22
2022/23(e) Full Price Sales | 1 Year Comparison vs 2021/22 Q2 Q3 Q4 May Jun Jul Aug Sep Oct Nov Dec Jan ? + 5.0% - 0.3% Aug / Sept - 2.0% - 2.0%
Slide 57: 2022/23(e) Full Price Sales | Year Comparison vs 2021/22
2022/23(e) Full Price Sales | 1 Year Comparison vs 2021/22 H1 Aug/Sep Rest of year Full year Retail + 66% + 3% + 3% + 26% Online - 6% - 3% - 5% - 5% Finance + 12% + 8% + 6% + 9% Group sales + 12.4% - 0.3% - 2.0% + 4.8%
Slide 58: Central Guidance | Profit 2022/23(e)
Central Guidance | Profit 2022/23(e) Previous guidance £860m vs 2019 New guidance £840m + 2.1% EPS* 545.1p + 2.7% * EPS includes the effects of buybacks and assumes 19% corporation tax.
Slide 59: 2023/24
2023/24 Cimnemeyir
Slide 60: 2023/24 | Currency
2023/24 | Currency NEXT US$ exchange Cost of $1 90p 80p 79p 73p + 8% 70p Fully contracted $1.37 $1.27 60p SS 2022 SS 2023 * US Dollar spot rate on 27 September 2022
Slide 61: 2023/24 | Currency
2023/24 | Currency NEXT US$ exchange Cost of $1 93p 90p + 26% 80p 79p 73p 74p 70p Fully Current contracted spot* $1.37 $1.36 $1.27 $1.07 60p SS 2022 AW 2022 SS 2023 AW 2023 * US Dollar spot rate on 27 September 2022
Slide 62: 2023/24 | Currency
2023/24 | Currency NEXT US$ exchange Cost of $1 Mitigators Local currencies 79p ? Factory capacity Freight costs + 8% Commodity prices Overseas revenue UK cost base SS 2023 AW 2023
Slide 63: 2023/24 | Looking Ahead
2023/24 | Looking Ahead Financial Continued New Strength Investment Priorities
Slide 64: Financial Strength
Financial Strength Strong balance sheet Net debt 56% of customer receivables Cash flow Highly cash generative Profit £840m(e) Margin Operating profit margin ~ 16%
Slide 65: Continued Investment: Product, Technology
Continued Investment Product Technology
Slide 66: Greater Focus: Managing costs
Greater Focus Managing costs • Efficiencies • Service
Slide 67: Greater Focus: Managing margins
Greater Focus Managing costs Managing margins • Overseas • LABEL
Slide 68: Greater Focus: Managing choice
Greater Focus Managing costs Managing margins Navy Blue Slim fit Managing choice Dark Blue Straight fit French Navy Regular fit • Duplication v choice Airforce Blue Skinny fit Bright Blue Mid Blue 500+ forward locations Stock & availability
Slide 69: Greater Focus: Managing choice
Greater Focus Navy Airforce Bright Dark Mid Managing costs Slim Managing margins Managing choice Straight • Duplication v choice Regular Skinny
Slide 70: Greater Focus: Managing choice
Greater Focus Managing costs Managing margins Managing choice • Duplication v choice • Attribution • Website navigation • Filters • Personalisation
Slide 71: Greater Focus: Managing cost of goods
Greater Focus Managing costs Managing margins Managing choice Managing cost of goods • Ethical • Reliable • Good quality • Good design
Slide 72: NEXT July 2022
NEXT July 2022