Dfs Furniture Plc · LSE:DFS
Dfs Furniture — FY2022 Earnings Presentation
33 slides from Dfs Furniture's earnings presentation, September 2022
Slide 1: FY22 Results Presentation
DFS GROUP Image: Storeaway FY22 Results Claire Rushdon? Presentation SEPTEMBER 2022 1
Slide 2: Overview
FY22 RESULTS PRESENTATION Overview Introduction Tim Stacey Financials Mike Schmidt Strategy Update Tim Stacey Outlook & Summary Tim Stacey Q&A Tim Stacey & Mike Schmidt 2
Slide 3: FY22 Summary
FY22 RESULTS PRESENTATION FY22 Summary Revenue Strong financial performance £1,149.8m Revenue and profit growth vs FY19, robust financial position +20.1% vs FY191 1 Pre-pandemic comparator from continuing operations excluding Sofa Workshop Underlying PBTA: Formally launched new strategy at CMD Leading
Slide 4: To lead furniture retailing in the digital age
FY22 RESULTS PRESENTATION CMD March 2022 “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 4
Slide 5: A strong, robust sector leader
FY22 RESULTS PRESENTATION A strong, robust sector leader 1. BEST CUSTOMER PROPOSITION & BRANDS gaining share Short-term sector share opportunities 4. INVESTING 2. BEST FOR THE PLATFORMS FUTURE & SCALE Long-term, underpins financial ambition E.g. Home, Digital, with better cost Data & ESG base & margi
Slide 6: Historically, DFS gains share in tough environments
FY22 RESULTS PRESENTATION Historically, DFS gains share in tough environments DFS Group Upholstery Sector Share (%) 2022 Sector Share: (& UK upholstery segment size £bn) Fragmented sector; on-going exits present further share gain opportunities 36% DFS Group Other: general retailers & 36% independan
Slide 7: Overview
FY22 RESULTS PRESENTATION Overview Introduction Tim Stacey Financials Mike Schmidt Strategy Update Tim Stacey Outlook & Summary Tim Stacey Q&A Tim Stacey & Mike Schmidt 7
Slide 8: Results overview
FY22 RESULTS PRESENTATION Results overview FY 2022 FY 2021 FY 2019 (£m) unless stated LTM to LTM to LTM to 26-Jun-221 27-Jun-211 30-Jun-192 Revenue - Continuing operations 3 1,149.8 1,055.1 957.44 Growth vs FY19 +20.1% +10.2% n/a Reported PBT - Continuing operations 58.5 102.6 46.04 Underlying PBTA
Slide 9: Fluctuating trading pattern
FY22 RESULTS PRESENTATION Fluctuating trading pattern Strong trading in Q1 and Q3 with weaker trading Q2 and Q4: Operationally highly challenging Volume Growth (vs FY19) Value Growth (vs FY19) 9
Slide 10: Managing inflationary pressure
FY22 RESULTS PRESENTATION Managing inflationary pressure Cash gross profit growth coming from higher volumes, but inflation pass through has lowered our reported margins Cash Gross Profit £m % Gross Profit * * *FY21 excludes Sofa Workshop for consistency, sold in September 2020 10
Slide 11: Growing operating cost efficiency
FY22 RESULTS PRESENTATION Growing operating cost efficiency Operating cost:sales ratio reducing relative to pre-pandemic from efficiency of growing revenue base, despite Covid disruption cost:sales (ex-property) cost:sales cost:sales 34.8% (ex-property) (ex-property) 37.6% 34.9% *Underlying operating co
Slide 12: Cash generation & leverage
FY22 RESULTS PRESENTATION Cash generation & leverage Robust balance sheet position at year end: increase in debt driven by expected working capital normalisation and shareholder returns 12
Slide 13: Developing our asset base: Capex
FY22 RESULTS PRESENTATION Developing our asset base: Capex Re-investment Expected annual spend of Growth Ongoing investment in our £35-£40m of cash capex plus Projects with strong value physical and digital asset £10m of leased asset spend creation business cases- most base to maintain high commonly
Slide 14: Our variable and controllable cost base
FY22 RESULTS PRESENTATION Our variable and controllable cost base Ability to influence our cost base as the environment changes Cost of Sales - 59% of Gross Sales ● Primarily product costs, but also VAT, far-east freight and interest free subsidy costs Directly ● £13.7m one-off costs in FY22 relating
Slide 15: Delivering on our financial principles
FY22 RESULTS PRESENTATION Delivering on our financial principles 1. Revenue 2. Growing 3. High-teens 4. Return of Growth Profit Base ROCE Capital 6% 5% 15.4% CAGR CAGR 5 Year Average £10m Buyback extension 3.7p Final 1 2 3 dividend 1 FY19 Revenue excludes discontinued operations and Sofa Workshop 2 FY
Slide 16: Overview
FY22 RESULTS PRESENTATION Overview Introduction Tim Stacey Financials Mike Schmidt Strategy Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Mike Schmidt 16
Slide 17: To lead furniture retailing in the digital age
FY22 RESULTS PRESENTATION CMD March 2022 “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
Slide 18: DFS Highlights: Strong on-going performance
FY22 RESULTS PRESENTATION DFS Highlights: Strong on-going performance New Strategic Ongoing Intelligent brand range investment lending marketing development in format platform Resulting in positive shift in Winning exclusive brands & Transformation roll out New features (e.g. soft search) Brand Conn
Slide 19: Sofology Highlights: Continued growth & development
FY22 RESULTS PRESENTATION Sofology Highlights: Continued growth & development Driving brand Investing in Store rollout Leveraging awareness product range programme group platforms 7 new stores, 55 in total 2 On-going full integration TVC & collaboration with E.g. new new stores planned for with Sode
Slide 20: Home Highlights: Sustained investment in building the foundations
FY22 RESULTS PRESENTATION Home Highlights: Sustained investment in building the foundations Unlocking Driving Building Beds & Online awareness & supply chain Mattresses performance conversion capability opportunity Focusing on £3bn Launch of first ever beds Beds online sales: Unlocking capability to
Slide 21: Platform Highlights
FY22 RESULTS PRESENTATION Platform Highlights “PILLARS & PLATFORMS” GROUP 1. Sourcing & Manufacturing STRATEGY Commenced refurbishment of Doncaster site. Focus on OUR MISSION optimising mix of Europe & Asia to support UK manufacturing 2. Technology & Data HOME Launch IRIS (integrating 35+ data sourc
Slide 22: ESG Highlights
FY22 RESULTS PRESENTATION ESG Highlights First year of reporting under the TCFD reporting requirements Positive progress made in the year, including: E: 4-year Carbon Footprint model Leveraging extensive primary data to enable broad/deep planning & decision making, incl S1 & 2 external assurance SOF
Slide 23: Overview
FY22 RESULTS PRESENTATION Overview Introduction Tim Stacey Financials Mike Schmidt Strategy Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Mike Schmidt 23
Slide 24: Our winning Integrated Retail model
FY22 RESULTS PRESENTATION Our winning Integrated Retail model PHYSICAL DIGITAL …with sector 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 efficie
Slide 25: Disciplined Investment Platforms
FY22 RESULTS PRESENTATION Long-term ambition remains Growing Growing Growing Revenues Margins Free Cash £1.4bn 8%+ Well-Underpinned 75%+ Post-Tax Free Cash FY26/FY27 Target Medium-Term Conversion PBTa Margin Platforms Household Efficient Growth Home Share Sales Gain Negative Working Low Leverage and U
Slide 26: FY23 Full Year Outlook Scenarios
FY22 RESULTS PRESENTATION FY23 Full Year Outlook Scenarios Profit expectations influenced by sector volume decline LOW MEDIUM HIGH Current trading: LFL SECTOR VOLUME ● Too short a period to extrapolate (vs. FY19) -15% -10% -5% ● September towards high-end as some Q1 consumer demand constraints lessen
Slide 27: Summary
FY22 RESULTS PRESENTATION Summary 1. BEST CUSTOMER PROPOSITION & BRANDS gaining share Short-term sector share opportunities 4. INVESTING 2. BEST FOR THE PLATFORMS FUTURE & SCALE Long-term, underpins financial ambition E.g. Home, Digital, with better cost Data & ESG base & margins 3. PROVEN, RESILIENT
Slide 28: Overview
FY22 RESULTS PRESENTATION Overview Introduction Tim Stacey Financials Mike Schmidt Strategy Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Mike Schmidt 28
Slide 29: Thank you
Thank you 29
Slide 30: Appendix
Appendix 30
Slide 31: Brand Performance
FY22 RESULTS PRESENTATION Brand Performance Selling and Distribution Revenues (£m) Gross Margin (£m) ● Strong showroom and web order intake ● Decrease largely due to movement of Group Central ● Reduction largely due to the movement of ● Driven by double digit order intake growth and Costs to own seg
Slide 32: Group Showroom Profile
FY22 RESULTS PRESENTATION Group Showroom Profile AS AT 26 JUNE 2022 (VS. 27 JUNE 2021 EXCLUDING SOFA WORKSHOP) UK ROI Holland Spain TOTAL Large Format (c. 15,000sq.ft.+) 91 3 - (-2) - (-1) 94 (-3) Medium Format (c. 10,000sq.ft.) 18 2 - (-4) - 20 (-4) Small Format (c. 5,000sq.ft.) 3 (-1) - - - (-1) 3
Slide 33: Disclaimer
FY22 RESULTS PRESENTATION Disclaimer This presentation contains statements that constitute forward-looking statements relating to the business, financial performance and results of the Company and the industry in which the Company operates. These statements may be identified by words such as “may”, “w