Dfs Furniture Plc · LSE:DFS
Dfs Furniture — Investor Day (March 2022)
15 slides from Dfs Furniture's investor day presentation, Mar 15, 2022
Slide 1: Capital Markets Day: 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 2: Recap & Financial Ambition
Recap & Financial Ambition Tim Stacey & Mike Schmidt 2
Slide 3: 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 4: Our winning Integrated Retail model
RECAP & FINANCIAL AMBITION 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
Slide 5: To lead furniture retailing in the digital age
RECAP & FINANCIAL AMBITION 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 55
Slide 6: A flywheel for growth
RECAP & FINANCIAL AMBITION A flywheel for growth 1. CLEAR MARKET New £1.4bn revenue ambition LEADER 4. HOME 2. INTEGRATED MARKET RETAIL Strong competitive advantage OPPORTUNITY BUSINESS ENGINE 3. SUSTAINABLE BUSINESS Growth & capital returns MODEL 66
Slide 7: A flywheel for growth
RECAP & FINANCIAL AMBITION A flywheel for growth ‘IRIS’ DATA PLATFORM 1. CLEAR MARKET New £1.4bn revenue ambition LEADER 4. HOME 2. INTEGRATED MARKET RETAIL Strong competitive advantage OPPORTUNITY BUSINESS ENGINE 3. SUSTAINABLE BUSINESS Growth & capital returns STRONG, NEW MODEL ‘HOME’ PROPOSITION 7
Slide 8: Strong core market
RECAP & FINANCIAL AMBITION Strong core market Market Size Key Customer Dynamics Consistent market 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 9: Strong competitive advantage: gaining share
RECAP & FINANCIAL AMBITION Strong competitive advantage: gaining share Group Sofa Market Share: 2016-21 DFS LFL Stores 38% ● Integrated retail: 5%+ LFL gain from refit programme ● c.25 showrooms per annum 35% ● Exclusive product ranges, backed by brands Sofology 25% ● 6 showrooms opened in H1-22, 1 m
Slide 10: Substantial 'Home' opportunity
RECAP & FINANCIAL AMBITION 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 incremen
Slide 11: Maintaining investment for the future
RECAP & FINANCIAL AMBITION Maintaining investment for the future Showrooms Supply Chain & Sourcing £0.7m per new showroom c. £6m annual maintenance spend Average annual cash £0.3m per refit Home capability - one-off: £6m Average 5 year refit cycle Net manufacturing investment: £15m capex spend of £10m
Slide 12: Our Financial Ambition
RECAP & FINANCIAL AMBITION Our Financial Ambition 4Yrs: £280m £1.4bn in FY26 5% 8%+ Driven by £1.15bn 75%+ Post-Tax Free Cash CAGR to Medium Term Conversion PBTa Margin £1.4bn Platforms Efficient LTM Orders 3% Market Share £100m Home Target Revenues c.2% p.a Market Growth Negative Working Low Leverage
Slide 13: Capital Distribution Policy
RECAP & FINANCIAL AMBITION Capital Distribution Policy Resilient but efficient capital structure £280m+ target for free cash generation with leverage of 0.5x – 1.0x Invest to grow the business where attractive returns are available 1 Stable or growing ordinary dividend based upon 40-50% payout of unde
Slide 14: Looking ahead: 2022-26
RECAP & FINANCIAL AMBITION Looking ahead: 2022-26 ‘IRIS’ DATA PLATFORM 1. CLEAR MARKET LEADER A new £1.4bn revenue ambition 4. HOME 2. INTEGRATED MARKET RETAIL Sustainable Profit Margin of 8%+ OPPORTUNITY BUSINESS ENGINE 4 year cash generation £280m 3. SUSTAINABLE BUSINESS STRONG, NEW MODEL ‘HOME’ PR
Slide 15: Thank you
Thank you 15