Dfs Furniture Plc · LSE:DFS
Dfs Furniture — Investor Day (March 2022)
25 slides from Dfs Furniture's investor day presentation, March 2022
Slide 1: Capital Markets Day
DFS GROUP Capital Markets Day MARCH 2022 1
Slide 2: Introducing Tim Stacey & Mike Schmidt
Introducing Tim Stacey & Mike Schmidt 2
Slide 3: Welcome
CAPITAL MARKETS DAY Welcome 11:00 - 11:20 Welcome & Introduction Tim Stacey & Mike Schmidt Travel to stores 11:35 - 13:05 DFS & Sofology Store Visit Nick Smith & Emma Dinnis Travel & Lunch 14:05 - 14:25 Introduction to Platforms Tim Stacey & Jo Shawcroft 14:30 - 15:25 Breakout Sessions: Home & Data
Slide 4: Introduction
OVERVIEW Introduction Company overview & investment OVERVIEW highlights Market context, our Integrated CONTEXT Retail business model & why this wins From ‘3x3’ to new ‘Pillars & STRATEGY Platforms’ strategy The underlying fundamentals, the FINANCIALS new £1.4bn ambition plus growth & capital returns
Slide 5: Introduction
OVERVIEW Introduction Company overview & investment OVERVIEW highlights Market context, our Integrated CONTEXT Retail business model & why this wins From ‘3x3’ to new ‘Pillars & STRATEGY Platforms’ strategy The underlying fundamentals, the FINANCIALS new £1.4bn ambition plus growth & capital returns
Slide 6: Company Snapshot
OVERVIEW Company Snapshot Our exclusive brand partners & ranges 1969 2021 Revenues Company Founded Sofology 20.5% 5,800 colleagues DFS 79.5% Excluding Sodelco, Male 56.5%; Female = 43.5% A balanced team/workforce across age & tenure +17.4% Y-o-2Y Revenue Growth Best Companies Index Retail +2% market
Slide 7: Investment Highlights
OVERVIEW Investment Highlights Three key themes running through today: New £1.4bn revenue ambition Strong competitive advantage Growth & capital returns 7
Slide 8: Introduction
CONTEXT Introduction Company overview & investment OVERVIEW highlights Market context, our Integrated CONTEXT Retail business model & why this wins From ‘3x3’ to new ‘Pillars & STRATEGY Platforms’ strategy The underlying fundamentals, the FINANCIALS new £1.4bn ambition plus growth & capital returns
Slide 9: Strong core market
RECAP & FINANCIAL AMBITION Strong core market Sector Size Key Customer Dynamics Consistent sector growth: Replacement cycle and CAGR c.3.3% more spend on home: UK Upholstery Segment Size (£bn) Vast majority of purchase for renovation/redecoration (vs house move) 82.3% Replenishment cycle 6.8 years E
Slide 10: Our leading position
CONTEXT Our leading position Leading sector share… …including leading online UK Upholstery Sector - 2020 (%) Latest reported/estimated online sales Upholstery (% of mix) 2021 DFS Group DFS Group Online Very high 35% Market Share Made.com[1]* Likely low % 32.5 Very high 32.5 32. ScS Online[3] 5 10.0
Slide 11: Integrated Retail
CONTEXT Our winning model PHYSICAL Integrated Retail 11
Slide 12: Our winning Integrated Retail model
CONTEXT Our winning Integrated Retail model Best Experience Biggest range + the critical ‘sit test’: over 85% of DFS customers visit a store before buying PHYSICAL Best New Formats Post store refit, 58% of consumers said store was better than the competition (pre-refit = c.46%) Best Retail Estate More
Slide 13: Our winning Integrated Retail model
CONTEXT Our winning Integrated Retail model Best Experience Best Online Brand Strength Biggest range + the critical ‘DFS’ is searched for 2.3x more ‘sit test’: over 85% of DFS than the term ‘Sofas’ customers visit a store before 87% of store customers research buying online before coming instore PHY
Slide 14: Our winning Integrated Retail model
CONTEXT Our winning Integrated Retail model PHYSICAL DIGITAL …with market leading We believe the brands leveraging data, marketing, finance, winning manufacturing and combination is Integrated Retail logistics platforms to drive future growth and optimise further both physical efficiencies & digital… T
Slide 15: Introduction
STRATEGY Introduction Company overview & investment OVERVIEW highlights Market context, our Integrated CONTEXT Retail business model & why this wins From ‘3x3’ to new ‘Pillars & STRATEGY Platforms’ strategy The underlying fundamentals, the FINANCIALS new £1.4bn ambition plus growth & capital returns
Slide 16: Looking Back: To lead sofa retailing in the digital age
STRATEGY Looking Back… OUR STRATEGY OUR VISION 2018-21: Realising the new ‘base’ To lead sofa retailing in the digital age 16
Slide 17: Today: Pillars & Platforms
STRATEGY Today… “PILLARS & PLATFORMS” GROUP STRATEGY OUR MISSION OUR VISION To lead furniture HOME retailing in the Sourcing & Manufacturing Platform digital age Technology & Data Platform 2018-21: Realising the new ‘base’ Logistics Platform People & Culture Platform ESG 17 17
Slide 18: Substantial 'Home' opportunity
STRATEGY Substantial ‘Home’ opportunity Rationale Ambition i) Market adjacency & attractiveness To drive revenues from c.£40m currently to ii) Existing customer £135m by FY26 appeal/opportunity c.£5bn market opportunity*: (c.4% market share*) Beds & Mattresses £3bn pa with incremental Dining £0.6bn
Slide 19: Introduction
FINANCIALS Introduction Company overview & investment OVERVIEW highlights Market context, our Integrated CONTEXT Retail business model & why this wins From ‘3x3’ to new ‘Pillars & STRATEGY Platforms’ strategy The underlying fundamentals, the FINANCIALS new £1.4bn ambition plus growth & capital retur
Slide 20: Investment Highlights
OVERVIEW Investment Highlights Three key themes running through today: New £1.4bn revenue ambition Strong competitive advantage Growth & capital returns 20
Slide 21: £1.15bn foundation
INVESTMENT HIGHLIGHTS £1.15bn foundation 1300 (Stated in Revenue Equivalent Terms) 1200 £1.15bn Order Intake 1100 Order Intake: 1000 +7.2% CAGR 900 growth over 800 5 years 700 2016 2017 2018 2019 2020 2021 2022 21 21
Slide 22: Strong competitive advantage: gaining share
INVESTMENT HIGHLIGHTS Strong competitive advantage: gaining share Group Sofa Market Share: 2016-21 DFS 35% ● 19 new stores opened ● £26.1m invested in store refits from FY16 to H1 FY22 Sofology ● Invested £12.7m in 17 new stores since acquisition 25% Integrated Retail/Online ● £41.4m online investmen
Slide 23: Growth
INVESTMENT HIGHLIGHTS Growth & capital returns Today’s FY15-FY17 Delivered underlying average base Earnings Growth: Revenues £0.74bn £1.15bn Profit before tax £42m £85m >£40m sustainable PBT Margin 5.6% 7%+ PBT growth 23 23
Slide 24: Net Debt Progression (£m)
INVESTMENT HIGHLIGHTS Growth & capital returns Net Debt Progression (£m) 5.1% £414m Average annual net free cash yield since IPO annual revenue 7% CAGR >2x growth in PBT * Net Capital returns consist of both ordinary and special dividends net of the £64m equity placing. 24 24
Slide 25: A flywheel for growth
INVESTMENT HIGHLIGHTS A flywheel for growth 1. CLEAR MARKET LEADER New £1.4bn revenue ambition 4. HOME 2. INTEGRATED RETAIL Strong competitive advantage MARKET BUSINESS OPPORTUNITY ENGINE Growth & capital returns 3. SUSTAINABLE BUSINESS MODEL 25 25