Dfs Furniture Plc · LSE:DFS
Dfs Furniture — H1 FY25 Earnings Presentation
32 slides from Dfs Furniture's earnings presentation, Mar 13, 2025
Slide 1: DFS Group Interim Results
DFS GROUP INTERIM RESULTS 13 March 2025
Slide 2: Overview
FY25 INTERIM RESULTS Overview Introduction Tim Stacey Financials Marie Wall Strategy & Operational update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Marie Wall 2
Slide 3: Introduction
FY25 INTERIM RESULTS Introduction Compelling customer propositions & strong operational execution driving profit growth Growth in market share, margins and profitability: ● Outperforming a market in slight decline; order intake + 10.1% YoY £17m H1 PBTu(A) ● Continued gross margin rate improvement; +70
Slide 4: Headlines
FY25 INTERIM RESULTS Headlines +8% +19% DFS YoY order Sofology YoY order intake1 intake1 > 40% +10% DFS exclusive brands Post-delivery NPS sales mix score YoY 1 Measured using the most comparable 25 weeks of each trading period to avoid distorting impact caused by a different number of winter sale tr
Slide 5: Overview
FY25 INTERIM RESULTS Overview Introduction Tim Stacey Financials Marie Wall Strategy & Operational update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Marie Wall 5
Slide 6: Results overview
FY25 INTERIM RESULTS Results overview (£m) unless stated H1 FY25 H1 FY24 YoY 1 Order intake YoY +10.1% (1.1%) n/a Gross sales 675.6 666.2 1.4% Revenue 504.5 505.1 (0.1%) Underlying PBT(A)2 17.0 8.7 8.3 Reported PBT3 15.8 0.9 14.9 Underlying basic EPS 5.3p 2.8p 2.5p Net bank debt 116.7 133.9 (17.2) 4
Slide 7: Revenue
FY25 INTERIM RESULTS Revenue Good performance in challenging market conditions Order intake YoY1 YoY DFS (inc Dwell) +7.8% Sofology +19.1% +10.1% Gross Sales (£m) H1 FY25 YoY DFS (inc Dwell) 523.1 (0.5%) Sofology 152.5 8.5% 675.6 1.4% Revenue 504.5 (0.1%) ● Order intake +10.1%; Gross sales increased
Slide 8: Cost to Operate efficiencies
FY25 INTERIM RESULTS Cost to Operate efficiencies Another strong period of sustainable cost savings £50m Annualisation and new savings Gross margin FY26 Target opportunities ● Ongoing optimisation of product margins through redistribution of volumes with key supplier partnerships Gross margin Operat
Slide 9: Gross margin
FY25 INTERIM RESULTS Gross margin Continued gross margin rate improvement +£3.3m / +70bps 1.6% (1.4%) 0.5% - 56.7% 56.0% £6.9m delivered from cost to operate efficiencies ● Product margin improvement offsets higher interest free credit costs and freight rate increases ● 48 month interest free credit us
Slide 10: Operating costs (inc dep & interest)
FY25 INTERIM RESULTS Operating costs (inc dep & interest) Further savings supported by cost efficiencies and disciplined cost management ● Volume related costs well controlled, reflecting the strong operational leverage within the business ● Inflation impact mainly wages, contained to £3.2m ● Data drive
Slide 11: Cash Flow
FY25 INTERIM RESULTS Cash Flow Disciplined cash management and focused on improving our financial position H1 FY25 H1 FY24 ● Cash capex prioritised in the period to lower risk, short payback growth investment Underlying EBITDA / other* 81.9 75.5 ● Bank interest and tax reduction; utilisation of Capex
Slide 12: Net debt & covenants
FY25 INTERIM RESULTS Net debt & covenants Debt reducing, leverage reducing, fixed charge cover improving Pre-Covid average Net bank ● Financial strength improving; focus on strong free cash debt flow generation and reducing absolute net debt levels ● Both Leverage and FCC covenants improving Covenant
Slide 13: Capital allocation
FY25 INTERIM RESULTS Capital allocation Focused on strengthening our balance sheet Framework Current position ● Financial strength improving; focus on strong free cash flow generation and reducing absolute net debt ● Expect to continue operating outside the Group’s target leverage levels Leverage1 ra
Slide 14: Overview
FY25 INTERIM RESULTS Overview MARKET Introduction Tim Stacey CUSTOMER GROUP STRATEGY Financials Marie Wall HOME Sofology DFS Sofology Home Strategy & Operational update Tim Stacey Sourcing & Manufacturing Platform Technology & Data Platform Outlook & Summary Tim Stacey Logistics Platform People & Cu
Slide 15: Clear market leader
FY25 INTERIM RESULTS Clear market leader Position is strengthening Consumer confidence / UK Market share1 Recent market share trend2 upholstery market size Market share Adjusted for price inflation Last 12 months ● Over 3x size of nearest competitor ● Good recent growth; taking share in ● Group has a
Slide 16: Strong growth potential
FY25 INTERIM RESULTS Strong growth potential Three clear opportunities to drive profitable growth Core self help ● Consistent track record of share gains ● Up to 10-15 new Sofology showrooms ● 58% gross margin target ● Cost action plan Significant core market recovery potential ● Potentially exiting c
Slide 17: Our winning Integrated Retail proposition
FY25 INTERIM RESULTS Our winning Integrated Retail proposition Two complementary retail brands meeting our customers’ needs through our market-leading omnichannel experience Customer Behaviour Why our proposition works ● Leading marketing execution c 90% of ● Well invested websites customers ● High
Slide 18: Design, inspiration and sales force
FY25 INTERIM RESULTS Design, inspiration and sales force Best sofa ranges supported by inspirational marketing and highly skilled sales colleagues Our differentiators Best ranges: Efficient and effective marketing: Best sales people: ● Best designers in the sector ● Award winning data driven digital ● I
Slide 19: DFS
FY25 INTERIM RESULTS DFS Trading well in a subdued market ● Order intake in H1 +7.8% ● Average order values up +4% ● Exclusive brand partnership sales mix at record high of 41% ● New branded partnership launched: La-Z-boy now live ● Leading IFC proposition driving conversion and order values ● Servi
Slide 20: Sofology
FY25 INTERIM RESULTS Sofology Range changes driving significant growth ● Order intake in growth: H1 +19.1% YoY driven by volume ● Improved merchandising ● Introduction of promotional activation ● Service levels; post purchase NPS close to record high ● Q4 FY24 range changes having positive effect 20
Slide 21: Sourcing and manufacturing
FY25 INTERIM RESULTS Sourcing and manufacturing Improving our own design & manufacturing and utilising strong relationships with our partners to drive innovation & margin ● Own design and factories ○ New design and development centre driving NPD ○ Quality scores at record highs ○ Profitability improv
Slide 22: The Sofa Delivery Company
FY25 INTERIM RESULTS The Sofa Delivery Company Largest two person sofa delivery network in the UK - lowering costs whilst achieving record service levels ● Sector leading 2 person delivery and installation service ● Same infrastructure used to service both brands ● Smart well invested technology and
Slide 23: Investing in our People
FY25 INTERIM RESULTS Investing in our People Creating a great place to work where everyone is welcome and can perform at their best ● Group leadership academies ○ Senior leaders development programme ○ Management development academy delivered to over 350 colleagues ○ Data literacy programme rolled o
Slide 24: Sustainability
FY25 INTERIM RESULTS Sustainability Good progress on our commitments ● Near-term science-based emissions reduction target approved by SBTI ● Commitments secured from partners to develop their own science-based Net Zero plans ● LWG target set in 2020 achieved 24
Slide 25: Overview
FY25 INTERIM RESULTS Overview Introduction Tim Stacey Financials Marie Wall Strategy & Operational update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Marie Wall 25
Slide 26: FY25 Outlook
FY25 INTERIM RESULTS FY25 Outlook Full year profit expectations increased ● Trading has continued to be strong through the second half to date ○ YTD order intake +11% YoY (H1 +10% YoY*) ○ Ahead of our expectations ● Costs remain under good control ● Expect to deliver profit ahead of consensus** ● PBTu
Slide 27: Market drivers
FY25 INTERIM RESULTS Market drivers Outlook stable to positive supporting potential upholstery market recovery Consumer confidence - major purchases Property transactions Real household disposable income ● 80% of transactions are replacements ● Drive c20% of upholstery purchases ● Real disposable inc
Slide 28: Medium term
FY25 INTERIM RESULTS Medium term Well positioned for future growth, CMD targets in tact Illustrative without action Self help Medium term >=8% 8% 3% ‘PBT % (c6%) revenue margin’ CMD Market BoE base Higher FY25 H1 Market share Gross margin FY25 H1 GM and cost Market Future PBT demand rates inflation
Slide 29: Conclusions
FY25 INTERIM RESULTS Conclusions A strong half, well positioned for full year & medium term ● Controlling the controllables; growth in market share, gross margins and profitability ● Financial position strengthened; absolute debt and leverage reducing ● Internally well set up; Customer proposition an
Slide 30: Overview
FY25 INTERIM RESULTS Overview Introduction Tim Stacey Financials Marie Wall Strategy & Operational update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Marie Wall 30
Slide 31: Appendix
APPENDIX 31 31
Slide 32: Group Showroom Profile
FY25 INTERIM RESULTS Group Showroom Profile AS AT 29 DECEMBER 2024 (VS. 24 DECEMBER 2023) UK ROI TOTAL Large Format (c. 15,000sq.ft.+) 90 (-1) 3 93 (-1) Medium Format (c. 10,000sq.ft.) 17 2 19 Small Format (c. 5,000sq.ft.) 2 - 2 Dwell standalone 1 - 1 DFS TOTAL 110 (-1) 5 115 (-1) Large format (c. 15