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1 1 1 FY26 Results 24 September 2026 DFS Furniture PLC
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2 22 Financials Dominique Highfield Highlights Tim Stacey Strategy & Operational Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Dominique Highfield DFS FURNITURE PLC | FY26 RESULTS Agenda 2
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3 3 Strong profit performance and financial position strengthened: ● Revenue growth; +2.6% YoY in a weak market ● Gross margin target achieved; 58.1% / +160 bps YoY ● Substantial free cash flow generation: £40m ● Reintroduction of dividend Operational momentum across customers and colleagues: ● Customer experience and proposition supporting record net promoter scores ● New DFS Group purpose and values driving colleague engagement ● Continuous improvement across core operational metrics Significant growth potential: ● Core upholstery: Extend our 40% market leadership position ● £5bn Home market: Significant profit opportunity ● Market recovery potential: 40% revenue-to-profit drop-through ● Strong FCF expected: Negative working capital model Highlights 3 Strategic execution delivers profit growth, cash generation and record customer scores underpinning confidence in medium term targets £45M PBTU(A) Up +£15m YoY +7% YoY DFS customer NPS now at record levels £1.4BN REVENUE & 8% PBT MARGIN Confident in medium-term target 0.9X LEVERAGE Down from 1.4X at FY25 +19% YoY Colleague engagement scores
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4 44 Financials Dominique Highfield Highlights Tim Stacey Strategy & Operational Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Dominique Highfield DFS FURNITURE PLC | FY26 RESULTS Agenda 4
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5 5 Results overview Strong P&L and cash flow performance £m (unless otherwise stated) FY26 FY25 YoY Revenue 1,057.5 1,030.3 2.6% Underlying PBT(A)1 44.9 30.2 14.7 Reported PBT 43.7 32.9 10.8 Underlying basic EPS 13.8p 9.2p 4.6p Net bank debt 69.0 107.0 (38.0) Leverage2 0.9x 1.4x (0.5x) ● Revenue growth in a weak market; solid order intake performance and benefit of a stronger opening order book ● PBTu(A) and EPS growth driven by revenue growth, gross margin progression and cost discipline ● Continued strengthening of the balance sheet; net debt reduced significantly and leverage now within our target range 1 Excludes brand amortisation of £1.4m in each of FY25 and FY26 2 Leverage per banking covenant definition (Pre-IFRS 16) 5
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6 6 Order intake and revenue Sustained market outperformance amid macroeconomic headwinds Order intake growth: ● Order intake slightly ahead of the wider market3 and significant prior year market share gains maintained ● Solid H1 (+2.3%) softened into H2 (-4.4%) amid weaker consumer confidence and macro headwinds 1 Year on two year order intake growth calculated using weeks 2-53 of the 53 week FY24 accounting period 2 Stated after deducting VAT, the cost of providing warranty products and interest free subsidy costs from gross sales 3 Proprietary banking data covering 14 specialist upholstery retailers Order intake growth YoY H1 2.3% H2 (4.4%) Order Intake (1.0%) Gross sales & revenue growth (£m) FY26 YoY Gross Sales 1,420.1 2.3% Revenue2 1,057.5 2.6% Brand order intake growth YoY Yo2Y1 dfs (2.0%) 6.5% Sofology 2.6% 19.3% Order Intake (1.0%) 9.1% Brand order intake growth: ● Cost of living pressures impacting appetite for big ticket purchases ● More resilient demand from higher income households ● dfs exclusive brands reached record sales mix penetration (45%), Home order intake grew +10.9% and Sofology benefited from range refreshes & enhancements to customer journey Gross sales & revenue growth: ● Gross sales and revenue recognised on delivery of orders; growth rate ahead of order intake. Strong FY25 order growth resulted in a growing order bank, FY26 gross sales are more closely aligned to orders booked
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7 7 Gross margin 58% target rate achieved ..+160bps YoY.. +0.4%pts +0.5%pts +0.7%pts582 11 12 5 4 55.8% 56.5% 56.5% 58.1% 614 FY25 FY26FXFreightProduct marginVolume Product margin ● Group buying synergies ● Supplier rationalisation & redistribution ● Process optimisation in own factories ● Benefit from lower Sonia rates partially offset by interest-free credit investments. Freight & FX tailwinds ● Freight: Container rates normalised YoY, reverting toward average levels. A $1k change in cost equates to c. £7-8m annualised impact. ● FX: Benefit of 3 cents YoY. 7
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8 8 Operating costs (inc dep & interest) Ongoing cost savings & lower financing costs, partially offset cost inflation & funded investment ● Volume: Wage commissions and delivery costs ● Inflation: Primarily wage related and NIC rate / threshold change ● Marketing: Building awareness of Home proposition and Sofology brand via ‘So Fussy’ campaign ● Investments: Partially self-funded growth investments into revenue drivers (including +1 Sofology showroom) and technology initiatives ● Cost savings: Cost savings (e.g. customer service efficiencies, property rationalisation and business rates) ● Debt Interest & depreciation: Lower average debt, SONIA rate & leverage premium, lease interest saving from average term reduction and impact of lower recent capital investment levels 55.8 % 56.5% 552 3 11 7 569 FY25 FY26InvestmentsMarketingInflationVolume (6) Debt interest & depreciation (4) Savings ..+£17m / +3% YoY.. 6
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9 9 Cash flow Strong cash generation supporting increased growth investment, debt reduction and recommencement of ordinary dividend payments ● Capital investment rose to fund growth projects, including a new mezzanine to support our Home proposition, one new Sofology showroom and store refurbishments across both retail brands ● Net interest cash outflows reduced due to lower average net debt levels combined with a lower average funding rate ● Corporation tax increase driven by YoY profit growth ● Lease payments reduced year on year resulting from the exit of warehouse leases as we continued to optimise our Sofa Delivery Company operations, moving to fewer larger sites ● Working capital ○ FY26 benefited from renegotiated payment terms and shift in mix to suppliers with longer terms ○ Significant strengthening in trading performance in FY25 drove large inflow ● Share purchases incurred to satisfy anticipated future employee share scheme vesting ● Significant reduction in leverage to 0.9x (target range 0.5x-1.0x) £m (unless otherwise stated) FY26 FY25 Underlying EBITDA1 162.9 157.2 Capex (27.6) (20.9) Interest (9.1) (14.0) Tax (6.6) (3.7) Principal & interest paid on lease liabilities (86.6) (88.7) Working capital 10.2 24.9 Share transactions (3.8) - Other2 0.9 3.7 Underlying free cash flow 40.3 58.5 Non-underlying items - (0.7) Free cash flow 40.3 57.8 Ordinary dividends (2.3) - Cash flow (38.0) 57.8 Closing net bank debt (69.0) (107.0) Leverage3 0.9x 1.4x Fixed Charge Cover3 1.9x 1.8x 1 Underlying operating profit before interest, tax, depreciation, amortisation and impairment 2 Other of £0.9m (FY25: £3.7m) includes losses/gains on disposal of assets, FX revaluations, share based payment expense and adjustment for non-underlying P&L charge/credit 3 Per banking covenant definitions (Pre-IFRS 16)
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10 10 Balance Sheet & Liquidity Organic Investment Ordinary dividend Supplementary Returns Capital allocation Remain focused on further strengthening our balance sheet over time, balanced with growth investment and shareholder returns Leverage 0.5x-1.0x Strategic organic capital investment to deliver attractive returns Dividend cover ratio of 2.25x - 2.75x When operating below target leverage special dividends / buybacks will be considered by the Board ● Making strong progress with the ratio now in target range. ● Further reduction remains a high priority ● Maintenance capital requirements c.2.0% of revenue ● Total FY26 cash capital expenditure was £27.6m. Focus remains on low risk growth projects with proven returns ● FY27 capex expectation c£27-32m ● Reintroducing the ordinary dividend; recommending a total dividend of 3.0p per share (4.6x cover) for FY26 (1.0p interim / 2.0p final) ● Outside of policy range, reflecting demand drivers remaining uncertain, a desire to further de-lever and focus on organic investment ● No supplementary returns as the Group is operating towards the top of our target leverage range Framework Current Position
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11 11 11 11 11 11 Financial performance summary Navigating macro pressures to deliver profit growth and shareholder value Balance sheet healthPBT growthUpweighted guidance delivered Outperformed market demand in H2 through strong customer proposition and disciplined strategic execution. Strong cash flow generation and reduced debt provide Board confidence to reinstate shareholder dividends. Driven by solid gross margin progression and sharp cost discipline across the business.
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12 1212 Financials Dominique Highfield Highlights Tim Stacey Strategy & Operational Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Dominique Highfield DFS FURNITURE PLC | FY26 RESULTS Agenda 12
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13 13 Our Purpose and Mission Furnishing better lives, together. Through our passion for style and comfort, we help customers create spaces they love to live in. Our updated growth strategy Strengthen our upholstery leadership position, capture more Home spend and leverage our platforms Furnishing better lives, together Leverage and build platforms Build and scale our Home business Play to win in the sofa market Scale and Vertical Integration Data, Technology and AI People and Culture Our Growth Strategy Strengthen our upholstery leadership position, capture more Home spend, and leverage our platforms to drive sustainable growth. Our Key Enablers Help us succeed and drive sustainable growth.
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14 14 Market share evolution Steady and consistent market share gains, extending our market leadership position DFS Group: ● Steady share progression, extending market leadership position ● Significant uplift in 2021 following major competitor closure Retail park: ● Examples: Furniture Village, ScS/Poltronesofa, Barker & Stonehouse ● Share recovery since 2021/22 following a period of decline Home multiples: ● Examples: Argos, John Lewis, Next, M&S, IKEA and Dunelm ● Overall relatively stable market share, occasionally impacted by new entrants / departures Online pure plays: ● Examples: Very Group, Amazon, Dusk, Wayfair ● Share relatively stable, elevated in COVID pandemic period Independents: ● Had been in long term decline ● Share relatively stable; stronger players remain DFS Group Retail park Home multiples Online pure plays Independents Market share Source: Globaldata August 2026, stated on calendar year basis
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15 15 Consumer Confidence Market drivers and market size Demand remains low relative to long term averages, potential for significant market recovery if macro conditions improve Property transactions Upholstery market size Adjusted for price inflation Consumer confidence: GFK Property transactions: HMRC - March - May 2025 and 2026 average used to avoid distorting impact of stamp duty changes in the prior year Interest rates on secured lending: Bank of England UK upholstery segment size: GlobalData
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16 16 Medium term opportunity Significant profit growth potential Sofa Delivery Company; Three existing customers, integration technology developed, now able to scale £5bn TAM Mezzanine trials delivering strong returns; Potential for further 20+ Digital strategy and curated range opportunity 10+ New Sofology showrooms Sofology estate uplift potential following successful test & learn refurbishment DFS range expansion 55.8 % 45 FY26 Partial market recoveryPlatformsHomeCore Upholstery Market c20%+ below long term average level Significant operating leverage Partial (7%) recovery results in 8% margin High free cash flow generation resulting from negative working capital model 100 70 Sub-total 4.5% PBT Margin 6% PBT Margin 8% PBT Margin …Multiple growth levers within our control… …Market recovery …will drive significant… profit uplift… En route to £1.4bn revenue target
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17 17 Market Leadership & Scale 40% share with integrated end-to-end platform Scale protects leadership and underpins our 58% gross margin. Leveraging our scale & vertical integration Driving leadership through market reach, exclusive partnerships and innovation Exclusive Partnerships 45% dfs brand sales from exclusive brand partnerships. Exclusive brands expanding into Home proposition Product, Showroom & Brand Innovation Smart, tech-enabled ranges displayed in elevated showroom formats and mezzanines Sofology 'So Fussy' campaign featuring Craig Revel Horwood, driving brand presence. 40% MARKET SHARE
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18 18 Data, technology and AI Enhancing our data and technology lever through scaling our proven AI capabilities Logistics & Routing: 20% reduction in overtime costs and an 18% cut in road miles via Apollo route planning tool. Colleague Capacity: 17k tickets handled monthly, cutting admin time by up to 5 minutes per interaction. Where we are with AI: We already know AI works for us. Where we are going with AI: An AI-Enabled Organisation People & Upskilling Multi-phase deployment of model-agnostic tools to empower our teams safely. Front-End Growth Driving higher search-to-sale conversions online and in showrooms. Back-End Efficiency Re-imagining workflows across the supply chain to unlock capacity and drive down costs. Inspire Audio-integrated ranges and immersive room sets - like Cinesound - bringing cinema-style tech and comfort directly into the home. Discover Personalised web experience and augmented reality in-room viewing, connecting digital browsing with the showroom journey. Transact Soft credit checks, complete-at-home transactions, and automated basket recovery making buying effortless at every step. Support AI chatbots, intelligent call routing, and The Sofa Delivery Company Satalia logistics solution delivering fast, proactive support through to delivery.
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19 19 Our Purpose Furnishing better lives, together Through our passion for style and comfort, we help customers create spaces they love to live in. Harnessing our unique culture Driven by our purpose, values and communities +19% YoY Engagement Our values give us our focus , drive, and strength. Bringing these values into our everyday leadership is creating a culture where colleagues feel supported, heard, and motivated to grow. Social Impact Launching our partnership with BBC Children in Need to tackle furniture poverty and support local communities. Colleague Networks Building an inclusive culture of belonging through our seven colleague-led networks, creating a safe, welcoming community where everyone can thrive.
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20 2020 Financials Dominique Highfield Highlights Tim Stacey Strategy & Operational Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Dominique Highfield DFS FURNITURE PLC | FY26 RESULTS Agenda
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21 21 21 21 Medium Term ● Multiple growth levers fully within control to drive future performance ● Better positioned than ever to capitalise on future market recovery ○ Highest market share ○ All areas of the business in great shape; record customer NPS scores ● Confident in delivering medium-term financial targets Near Term ● We are planning for a flat market ● Expect to deliver moderate profit growth YoY driven by our compelling customer proposition and continued cost discipline ● Comfortable with consensus PBT forecasts* ● Trading through first 12 weeks has been in line with our expectations; order intake -2.5% YoY ● Cash capex guidance: £27-32m *Company compiled consensus £48.0m PBTu(a) Outlook Expect to deliver moderate profit growth in FY27 in a soft market. Confident in achieving medium term targets
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22 22 22 22 22 22 ● Delivered upgraded profit guidance despite market softening in H2 ● Strong cash generation and reduced leverage Conclusions Strong profit progression, well positioned for future growth Strong Financial Performance Growth Potential Operational Momentum ● Business operations in great shape ● Structurally better positioned for market recovery ● Multiple growth levers within our control ● Confident in delivering medium term targets
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23 2323 Financials Dominique Highfield Highlights Tim Stacey Strategy & Operational Update Tim Stacey Outlook & Summary Tim Stacey Questions & Answers Tim Stacey & Dominique Highfield DFS FURNITURE PLC | FY26 RESULTS Agenda 23
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24 24 24 Q&A
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25 25 25 Appendix
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26 26 Group showroom profile As at 28 June 2026 (Vs June 2025) UK ROI TOTAL Large format (c. 15,000sq.ft.+) 91 (+1) 3 94 (+1) Medium format (c. 10,000sq.ft.) 17 2 19 Small format (c. 5,000sq.ft.) 2 - 2 DFS outlet 0 (-1) - 0 (-1) DFS TOTAL 110 (0) 5 115 (0) Large format (c. 15,000sq.ft.+) 54 (-1) - 54 (-1) Medium format (c.10,000-15,000 sq.ft) 2 - 2 Sofology TOTAL 56 (-1) - 56 (-1)