Slide 1: Adairs Limited FY23 Results Presentation
BAL Adairs Limited FY23 Results Presentation 21 August 2023 Mark Ronan Managing Director & CEO Ashley Gardner Chief Financial Officer
Slide 2: FY23 Group results
FY23 Group results 1 Record sales in a challenging year. Group Over 10 consecutive years of sales growth Underlying Underlying Change ($ million) FY23 FY22 v FY22 (%) Group sales of $621.3 million, up 10.1% on FY22, reflecting: ► Uninterrupted store trade saw customers return to stores and online sa
Slide 3: Adairs – FY23 financial performance
Adairs – FY23 financial performance 2 Sales up as customers returned to stores however elevated supply chain costs impacted EBIT Adairs ► Total sales up 2.9% driven by store sales (up 7.0%) with no COVID-related closures (16% of trading days Underlying Underlying Change were lost in FY22). The fully
Slide 4: Focus on Furniture – FY23 financial performance
Focus on Furniture – FY23 financial performance 3 Strong execution and compelling value proposition deliver higher sales and EBIT Focus on Furniture Underlying Reported Change ► Focus on Furniture had another excellent year, delivering a strong FY23 performance ($ million) Underlying FY22 Underlying
Slide 5: Mocka – FY23 financial performance
Mocka – FY23 financial performance 4 Strong gains in GM as operating platform stabilised, inventory rationalised and customer confidence improved ► Mocka sales declined 24.1% to $48.6 million as shoppers returned to physical stores and the Mocka brand rebuilt from its FY22 operational issues ,with c
Slide 6: Balance sheet
Balance sheet 5 ($ million) Dec 21 Jun 22 Dec 22 Jun 23 Group inventories ► Down 11% on prior year to $88m at June 2023. Inventories 100.2 99.1 106.4 87.8 Trade and other payables (52.3) (51.6) (66.8) (54.9) ► Post-pandemic international supply chains have stabilised, reducing the need to retain Def
Slide 7: Update on strategic priorities – Adairs brand
Update on strategic priorities – Adairs brand 6 Linen Lovers ► 83% of Adairs-brand sales in FY23 ► More than 1 million paid-up members with 5 years CAGR >8% Digital sales and data strategy ► Over 450,000 sign-ups in FY23 (new and renewed) ► New website launched Nov 2022 Store growth - Improved custo
Slide 8: Update on strategic priorities – Focus
Update on strategic priorities – Focus 7 New store design (Hoppers Crossing case study) BEFORE Value proposition ► Focus has performed well in a disrupted market by having high levels of product availability, short lead times and offering outstanding value for money ► Continuing to hold stock to pro
Slide 9: Update on strategic priorities – Mocka
Update on strategic priorities – Mocka 8 Product ► Mocka has unique in-house designed product (predominantly flat-pack) that offers customers excellent value for money Stabilised business operations ► FY23 saw Mocka restore customer confidence through strong execution ► The stable operating platform
Slide 10: Update on strategic priorities – Environmental, Social and Governance
Update on strategic priorities – Environmental, Social and Governance 9 Sustainability ► Traceability completed for all Tier 1 suppliers (c. 325 suppliers) ► Single use plastic bags removed from Adairs stores: - Eliminates c. 2.3 million bags per annum - 17 tonnes of surplus existing bags will be re
Slide 11: Trading update and outlook
Trading update and outlook 10 Trading results for the first seven weeks of FY24 Unaudited sales ► Margins have been carefully v FY23 managed despite the weaker (first 7 weeks of FY24) trading environment, with group Group -(8.9%) margins ahead of the same Adairs -(8.5%) period last year Mocka -(5.2%
Slide 12: Questions?
QUESTIONS? >
Slide 13: Appendices
APPENDICES 1. Who are we 2. Store footprint – Adairs 3. Adairs National Distribution Centre (NDC) 4. Store footprint – Focus on Furniture 5. Profit and loss reconciliation 6. Cashflow reconciliation 7. Sustainability 8. Glossary
Slide 14: Appendix 1 – Who we are
Appendix 1 – Who we are 13 Adairs Limited (ASX: ADH) is Australasia’s largest omni channel retailer of homewares and home furnishing products ► Own three growing and highly profitable businesses ► Vertical retail model ► Leading specialty retailer of home furnishings with a large and – in-house desi
Slide 15: Appendix 2 – Store footprint – Adairs
AppendixA2recap: Our store – Adairs strategy footprint 14 Total Stores: 171 Store Activity (FY23) 104 Regular stores (inc. 9 outlets) New stores (2) GLA (m2) 61 Homemaker stores Homemaker – Butler (WA) 750 6 Adairs Kids Regular – Bayside (VIC) 239 NDC & Head Office Total GLA increase 989 1 Closed st
Slide 16: Appendix 3 – Adairs National Distribution Centre (NDC)
Appendix 3 - Adairs National Distribution Centre (NDC) 15 Adairs has elected to take control of the NDC so that it can implement the changes it believes are necessary to improve the service to its customers and stores at a significantly lower cost than the current 3PL model. Background Investment an
Slide 17: Appendix 4 – Focus store network
Appendix 4 – Focus store network 16 Network of 23 stores, predominantly in Victoria. Typical store size is 1,500-2,000 square metres. State / Territory Stores GLA m2 Victoria (Greater Melbourne) 11 17,647 Victoria (Regional) 4 8,079 NSW (Greater Sydney) 1 3,365 NSW (Regional) 3 5,376 ACT (Canberra)
Slide 18: Appendix 5 – Profit and loss reconciliation
AppendixA5recap: Our – Profit strategy and loss reconciliation 17 FY23 reconciliation FY22 reconciliation NDC Mocka Focus NDC ($ million) Underlying AASB 16 transition Statutory Underlying AASB 16 transaction transaction transition Statutory FY23 impact costs FY23 FY22 impact costs costs costs FY22
Slide 19: Appendix 6 – Cash flow reconciliation
AppendixA6recap: – CashOur strategy flow reconciliation 18 ($ million) Underlying Underlying Underlying to statutory reconciliation FY23 FY22 FY23 reconciliation Underlying EBITDA 72.5 84.6 ($ million) Underlying AASB 16 Statutory Underlying Significant items (cash impact) (0.4) (4.3) FY23 impact FY
Slide 20: Appendix 7 – Sustainability
Appendix 7 – Sustainability 19 Adairs is committed to reducing waste, our carbon emissions, and creating better outcomes for people throughout our supply chain, business operations, and the communities we serve. PEOPLE Corporate Social Ethical sourcing Diversity Responsibility Traceability undertake
Slide 21: Appendix 8 – Glossary
AppendixA8recap: Our strategy – Glossary 20 Term Meaning Term Meaning ASP Average selling price LFL Like for like ATV Average transaction value LTM Last twelve months CAC Customer acquisition cost NPAT Net profit after tax Cost of doing business (refers to all expenses incurred by the CODB NDC Natio
Slide 22: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is general background information about Adairs Limited (ABN 50 147 375 451) (Adairs) and its activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. It should