Adairs Ltd. · ASX:ADH
Adairs — ESG Presentation (May 2022)
27 slides from Adairs's sustainability presentation, May 31, 2022
Slide 1: ESG Presentation
Release to the Australian Securities Exchange For personal use only Adairs Limited ESG Presentation 31 May 2022 Environment, Social and Governance (ESG) Presentation The Chairman of Adairs Limited (ASX: ADH), Brett Chenoweth, and the Head of the Remuneration Committee, Trent Peterson, are this week
Slide 2: About Adairs Limited
About Adairs Limited For personal use only Adairs Limited is Australia’s largest omni channel specialty retailer of home furnishings, home furniture and home decoration products. We own and operate three vertically integrated brands in the Home category – Adairs, Mocka and Focus on Furniture. All br
Slide 3: Environmental, Social & Governance update
Adairs Limited Environmental, Social & Governance update For personal use only June 2022 Brett Chenoweth Non-executive Chairman Trent Peterson NED and Chairman of the Remuneration Committee Jordan Gove Group Head of Risk and Compliance Jamie Adamson Head of Investor Relations
Slide 4: Agenda
Agenda Page For personal use only Board of Directors 2 Director independence, gender diversity & tenure 3 Board skills and experience matrix 4 Board performance review (results) 5 Remuneration 6 Modern Slavery 10 Ethical Sourcing 11 Supply chain 12 Sustainability 13 Sustainability initiatives & targ
Slide 5: Board of Directors
Board of Directors 2 The Adairs Limited board has eight directors, a majority of whom are independent with average tenure of 7 years. 25% of directors are women with the Board committed to increasing this to at least 30% by July 2023. For personal use only (1) Audit & Risk Remuneration Nomination Bo
Slide 6: Director independence, gender diversity and tenure
Director independence, gender diversity and tenure 3 1 Director independence 2 Director gender diversity 3 Director tenure For personal use only ► The Board has a majority of independent directors ► The Board currently has two female directors ► The Board has a number of long serving (25%) and six m
Slide 7: Board skills and experience matrix
Board skills and experience matrix 4 The Board comprises directors with a broad range of skills, knowledge and experience For personal use only ► The Board undertakes an independent performance review every three years and conducts its own skills and experience assessment annually to identify the ca
Slide 8: Board performance review
Board performance review 5 The performance of the Board and its three sub-committees was independently reviewed1 in December 2021 with all Directors and members of the executive For personal use only leadership team being interviewed Key findings ► The Board is comprised of highly committed and skil
Slide 9: Remuneration – Overview and Fixed component
Remuneration – Overview and Fixed component 6 Remuneration overview Fixed Remuneration For personal use only ► Senior Executives are remunerated under a total reward structure which ► The company’s objective is setting fixed remuneration is to attract and retain key consists of three elements: talen
Slide 10: Remuneration – STI arrangements
Remuneration – STI arrangements 7 STI arrangements The STI scheme aligns Senior Executive reward with the achievement of performance targets For personal use only ► that are aligned to delivering and protecting sustainable shareholder value ► The STI scheme is primarily based upon the Group’s EBIT r
Slide 11: STI targets and outcomes
STI targets and outcomes 8 STI targets in FY21 STI outcomes in FY21 For personal use only ► Actual FY21 EBIT achieved = $109.1m (Stretch level 2 benchmark met) Tier FY21 EBIT v FY20 Potential STI ► All performance conditions (KPIs) met for named KMPs benchmark actual EBIT as % max STI Below Level 1
Slide 12: Remuneration – LTI
Remuneration – LTI 9 The Board believe that equity ownership is an important component of aligning the interests of KMP with shareholders and focusing performance on the achievement of long-term metrics including sustainable shareholder value creation (and protection). For personal use only EPS perf
Slide 13: Modern Slavery
Modern Slavery 10 Adairs has procedures in place to identify if modern slavery exists within its supply chain and broader business. Vigilance is required as risks remain, particularly where operations are several steps removed from Adairs direct involvement For personal use only Tool Explanation ► A
Slide 14: Ethical sourcing
Ethical sourcing 11 Supply chains are complex structures, particularly where they cross country borders and involve multiple levels of suppliers and sub- contractors across the production process. These complexities raise the risk of unethical practices and require robust processes and vigilance. Fo
Slide 15: Supply chain - Country of origin / supplier concentration
Supply chain - Country of origin / supplier concentration 12 Country of origin 1 Adairs Focus Mocka Group For personal use only China (ex HK) 64% 86% 93% 75% India 10% - 4% 6% Bangladesh 6% - - 4% Australia 5% - - 3% Malaysia - 9% 2% 3% Vietnam 3% 5% - 3% Turkey 4% - - 2% Hong Kong 4% - - 2% Indones
Slide 16: Sustainability - Our Product, People and Planet program
Sustainability - Our Product, People and Planet program (PPP) 13 We seek to create better outcomes for people throughout our supply chains, business operations and the communities within which we operate through initiatives in the areas of product, people and planet For personal use only PRODUCT PEO
Slide 17: Sustainability – Product initiatives
Sustainability – Product initiatives 14 Initiative Goal / Target Update / Timing For personal use only Product Many of our products are already sustainably sourced and/or have sustainable attributes, and we will Already in progress with new initiatives to be sustainability continue to increase the s
Slide 18: Sustainability – Product initiatives (continued)
Sustainability – Product initiatives (continued) 15 Initiative Goal / Target Update / Timing For personal use only Sustainable Replace all single-use plastic bags in Adairs stores with re-useable bags designed by 1 July 2022 (Western Australia) in-store bags Adairs. These will be sold with all profi
Slide 19: Sustainability – People initiatives
Sustainability – People initiatives 16 Initiative Goal / Target Update / Timing For personal use only Ethical Sourcing Factory ethical audit and code of conduct assessment of Tier 1 factories fully traced for Adairs. • all direct suppliers (Tier 1 factories) and Mocka and Focus tier 1 factories to b
Slide 20: Sustainability – People initiatives (continued)
Sustainability – People initiatives (continued) 17 Initiative Goal / Target Update / Timing For personal use only Team engagement 80% team engagement (annual independently-conducted engagement survey) FY22 survey underway with results to be communicated in the FY22 Annual Report (August 2022) Team s
Slide 21: ESG documents (where to find)
ESG documents (where to find) 18 The following documents are available on the Adairs Investor Relations website (https://investors.adairs.com.au/investors/) For personal use only 1 Constitution & Charters 3 Policies • Constitution (Adairs Limited) • Anti-Bribery & Corruption Policy • Board Charter •
Slide 22: Appendices
APPENDICES 1. Overview of Adairs Limited For personal use only 2. Non-executive Director Profiles 3. LTI Options issued to KMP 4. Executive Leadership Team
Slide 23: Appendix – Who we are
Appendix 1 – Who we are 20 Adairs Limited (ASX: ADH) is Australasia’s largest omni channel retailer of homewares and home furnishing products For personal use only ► Own three growing and highly profitable businesses ► Vertical retail model ► Specialty retailer of home furnishings with a large and –
Slide 24: Appendix - Non-executive director profiles
Appendix 2 - Non-executive director profiles 21 Non-executive Director’s have a broad range of relevant backgrounds, current roles and directorships across multiple sectors. Background & experience Other listed board positions For personal use only Brett Chenoweth • Former CEO and Managing Director
Slide 25: Appendix - LTI Options issued to KMP
Appendix 3 - LTI Options issued to KMP (at June 2022) 22 KMP LTI Options Fair value per option Exercise Testing Vesting Expiry For personal use only granted at Grant Date Price Date Date Date Mark Ronan FY18 900,000 $0.39 $1.75 28 Jun 2020 30 Jun 2021 2 Nov 2023 FY19 540,000 $0.43 $2.40 27 Jun 2021
Slide 26: Appendix – Executive Leadership Team
Appendix 4 – Executive Leadership Team 23 Group functions Male Female For personal use only Managing Director and CEO (KMP) Group Chief Financial Officer (KMP) Group Executive Leadership Team Group Head of Property & Business Development (KMP) Gender Diversity Group Commercial Strategy & Opera
Slide 27: Disclaimer
For personal use only Strong Omni Channel Execution Disclaimer Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Adairs Limited current intentions, pl