Slide 1: Annual results FY22
Annual results FY22 14 September 2022
Slide 2: Annual Results FY22 agenda
Annual Results FY22 1 Introduction 2 Financial Review 3 1st Choice for Home 4 Q&A 2
Slide 3: Introduction – Nick Wilkinson, CEO
Introduction Nick Wilkinson CEO 3
Slide 4: FY22 highlights
Introduction FY22 highlights +16% +41% +140bps +8.5% Homewares Active Total YoY sales Total 3YoY market share customer YoY growth1 sales growth2 YoY growth3 growth4 51.2% +32% £153m 40p Profit before Ordinary Gross margin tax YoY Free cash flow5 dividends6 growth1 Financial results are for the compa
Slide 5: Delivering for all our stakeholders
Introduction Delivering for all our stakeholders Colleagues Customers Communities • Created >800 new colleague roles • Managed impact of higher cost • Reached over 1million followers of prices to ensure products offer local community initiatives • Increased support for colleague great value financia
Slide 6: Post pandemic: stronger and more ambitious
Introduction Post pandemic: stronger and more ambitious 12 month rolling sales Stronger FY20-21 £1.56bn • Digitising the business continues at pace Pandemic Years FY22 • Building new capabilities in engineering, data, product, insight & analytics • Added capacity in home delivery & furniture fulfilm
Slide 7: Looking forward: what do we see?
Introduction Looking forward: what do we see? Uncertain and changing environment • Operating and economic environment is extremely challenging • High inflation will continue • Cost of living pressures mounting on consumers, and many are fearful Requiring Outstanding value for our customers, however
Slide 8: Financial Review – Karen Witts, CFO
Financial Review Karen Witts CFO 8
Slide 9: First impressions
Financial Review First impressions Strength in our business model • Strong brand with broad appeal, in a large fragmented market • Distinctive & relevant product offer, that is largely own brand • High quality relationships with long term, committed suppliers • A ‘total retail system’ that combines
Slide 10: Financial summary
Financial Review Financial summary Memo: FY22 FY21 YoY FY22 YoY (52 weeks) (52 weeks) (52w vs 52w) (53 weeks) Sales £1,553.1m £1,336.2m +16.2% £1,581.4m +18.4% Gross margin 51.2% 51.6% -40 bps 51.2% -40 bps Operating cost % sales 37.5% 39.1% -160 bps 37.4% -170 bps Profit before tax £209.0m £157.8m
Slide 11: Sales and market share gains
Financial Review Sales and market share gains Memo: FY22 FY21 YoY FY22 YoY (52 weeks) (52 weeks) (52w vs 52w) (53 weeks) Total sales £1,553.1m £1,336.2m +16.2% £1,581.4m +18.4% Digital % total sales 1 35% 46% -11ppts 35% -11ppts Homewares market share2 10.2% 8.8% +1.4ppts 2 Furniture market share 1.
Slide 12: Strong gross margin performance
Financial Review Strong gross margin performance • Strong gross margin of 51.2% • Tight operational grip on cost price pressures • Gross margin in FY21 and FY22 higher than historic averages due to lower customer participation in events • June 2022 Summer Sale participation returned to more normal l
Slide 13: Operating costs supporting growth
Financial Review Operating costs supporting growth • Operating cost:sales of 37.5% • Strong operating leverage in stores in H1, despite reduction in government support • Inflation mainly driven by pay increases (energy a small proportion of operating costs) • Continued to invest: • Building capabili
Slide 14: Interest, tax and EPS
Financial Review Interest, tax and EPS Memo FY22 FY21 FY22 (52 weeks) (52 weeks) (53 weeks) Financial income and expenses (£4.8m) (£8.6m) (£4.9m) Profit before tax £209.0m £157.8m £212.8m Tax (£40.9m) (£28.9m) (£41.6m) Effective tax rate 19.5% 18.3% 19.5% Profit after tax £168.2m £128.9m £171.2m Bas
Slide 15: Strong cash generation
Financial Review Strong cash generation • Strong cash generation with free FY22 FY21 cash flow: operating profit ratio of (53 weeks) (52 weeks) 70% (FY21: 65%) Operating profit £217.7m £166.4m • Working capital: Depreciation & amortisation1 £79.3m £80.8m Working capital outflow (£14.8m) (£35.0m) • F
Slide 16: Capital allocation framework delivers attractive returns
Financial Review Capital allocation framework delivers attractive returns • Final dividend of 26p recognising our very strong performance in the year and our confidence in the business • Total ordinary dividend for the year of 40p, an increase of 14.3% compared to FY21 • £282m returned to shareholde
Slide 17: FY23 guidance
Financial Review FY23 guidance • Consumer behaviour highly unpredictable in current environment • Delayed Summer Sale and pent up demand in Q1 FY22 mean Q1 sales will be below last year • Gross margin: return to c.50% for the full year • Tight management of operating costs • Capex c.£20-30m, predomi
Slide 18: 1st Choice for Home – Nick Wilkinson, CEO
1st Choice for Home Nick Wilkinson CEO ANNUAL RESULTS FY22 18
Slide 19: Our plan to become our customers' 1st Choice for Home
1st Choice for Home Our plan to become our customers’ 1st Choice for Home Our purpose is ‘to help create the joy of truly feeling at home, now and for generations to come’. Now, more than ever, we are ambitious about learning, adapting and striving to do this brilliantly We continue to invest We are
Slide 20: Growing our product offer
1st Choice for Home Growing our product offer Continued growth across all categories (in FY22) Everyday Rewarding Decorative Room Considered Customer necessities… essentials… enhancements… refreshes… permanents… missions used day to day where comfort matters that enhance the look to keep the home up
Slide 21: More customers, shopping more frequently
1st Choice for Home More customers, shopping more frequently More Customers Shopping more frequently • 8.5% more customers shopped • Store channel grew strongly in with us in last 12 months1 FY22, driving 12-month shopping frequency +10.4%3 • All regions contributing2 (London & South accounting for
Slide 22: Strengthening: Choice and value
1st Choice for Home Strengthening: Choice and value ‘Value, Dun Your Way’ Winter Warm Every Pound Counts More volume into new Good lower-priced microfibre option More volume into 100% cotton Better option, available in more colours Highest sales growth in Dorma Best ‘best’ option, despite small pric
Slide 23: Strengthening: Good and circular
1st Choice for Home Strengthening: Good and circular Textile take-back Conscious Choice collection Continuing strong customer response to second life Conscious Choice ‘collection’ to help customers textile take-back service make more informed purchasing decisions 23 ANNUAL RESULTS FY22
Slide 24: Strengthening: Friendly and expert
1st Choice for Home Strengthening: Friendly and expert Product content and friendly services amplified though own channels: email, local store community channels (which have reached 1m followers), and re-posted customer generated content ANNUAL RESULTS FY22 24
Slide 25: Strengthening: Easy and convenient
1st Choice for Home Strengthening: Easy and convenient Our most recent store opening: Rugby. A re-site of a superstore opened 29 years ago. Using our colleagues and technology to help customers find, buy and fit everything they need for their home ANNUAL RESULTS FY22 25
Slide 26: Summary and Outlook
1st Choice for Home Summary and Outlook • Very strong performance in FY22 • We are a bigger, more resilient and more ambitious business than three years ago • Cost of living pressures will continue to mount, with high inflation this year and maybe beyond • Consumer reaction unpredictable; our primar
Slide 27: Q&A
Q&A ANNUAL RESULTS FY22 27
Slide 28: Appendices
Appendices ANNUAL RESULTS 2022 28
Slide 29: Income statement
Appendix Income statement FY22 FY21 YoY FY22 YoY (52 weeks) (52 weeks) (52w vs 52w) (53 weeks) Revenue £1,553.1m £1,336.2m £216.9m £1,581.4m £245.2m Cost of Sales (£757.5m) (£647.3m) (£110.2m) (£772.0m) (£124.7m) Gross Profit £795.6m £688.9m £106.7m £809.4m £120.5m Gross margin % 51.2% 51.6% (40) bp
Slide 30: Balance sheet
Appendix Balance sheet FY22 FY21 (53 weeks) (52 weeks) Right-of-use assets £248.5m £262.0m Other non-current assets £192.3m £189.1m Inventories £223.0m £172.4m Cash £30.2m £128.6m Other current assets £46.2m £14.6m Total assets £740.2m £766.7m Lease liabilities (£278.1m) (£293.3m) Bank loans (£52.8m
Slide 31: 5-year financial summary
Appendix 5-year financial summary FY18 FY19 FY201 FY21 FY22 (52 weeks) (52 weeks) (52 weeks) (52 weeks) (53 weeks) Total sales £1,050.1m £1,100.4m £1,057.9m £1,336.2m £1,581.4m Total sales growth 9.9% 4.8% (3.9%) 26.3% 18.4% Gross margin % 48.0% 49.6% 50.3% 51.6% 51.2% Profit before tax2 £102.0m £12
Slide 32: Performance vs GfK homewares panel and Covid disruption
Appendix Performance vs GfK homewares panel and Covid disruption Dunelm vs GfK homewares panel Covid disruption Q1 Q2 Q3 Q4 FY20 FY21 FY22 All channels fully open Partial store closures / regional lockdowns All stores closed. Click and Collect and home delivery only All stores closed. Home delivery
Slide 33: 10-year dividend history
Appendix 10-year dividend history FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Ordinary dividend per share Interim 4.5p 5.0p 5.5p 6.0p 6.5p 7.0p 7.5p - 12.0p 14.0p Final 11.5p 15.0p 16.0p 19.1p 19.5p 19.5p 20.5p - 23.0p 26.0p Total 16.0p 20.0p 21.5p 25.1p 26.0p 26.5p 28.0p - 35.0p 40.0p Special
Slide 34: Investment proposition
Appendix Investment proposition Brand purpose A brand appealing to a wide range of customers, market leader in a large fragmented market, with a challenger brand mentality Product proposition A distinctive and specialist product portfolio - offering quality, value and style - largely own brand and s
Slide 35: Plan on a Page (1 of 2)
Appendix Plan on a Page (1 of 2) ANNUAL RESULTS FY22 35
Slide 36: Plan on a Page (2 of 2)
Appendix Plan on a Page (2 of 2) ANNUAL RESULTS FY22 36
Slide 37: Dunelm ESG highlights
Appendix Dunelm ESG highlights Key • Reduced our scope 1 carbon emission intensity (per £1m revenue) by 19.6% vs FY19 baseline performance • Reduced plastic packaging on own brand products (by weight per £1 of sales) by 22.7% vs FY20 baseline indicators • 61.3% of own brand products for which we off
Slide 38: Thank you