Ambitious about being a good company SUSTAINABILITY Employee net promoter score (eNPS) CO emissions METRICS 2 Year-on-year improvement %pts tCOe/£1m Group revenue2 +1.0% 11.8 Percentage of own brand cotton pts BONUS tCO/£1m2 products whichmeet our ‘More 2 Responsibly Sourced Cotton’ standard. Target FY22-24: 80% reduction +49 25.6 LTIP NEW 21.6 16.6 14.8 11.8 Reduction in plastic packaging of +14 +9 +1 own brand products against FY20 2018 2019 2020 2021 2017 2018 2019 2020 2021 base. We measure our colleague engagement We have worked with the Carbon Trust in Target FY22-24: 20% reduction every six months in our colleague survey. the year to develop a robust method of LTIP NEW Overall, employee NPS has again improved calculation of our Scope 1 and Scope 2 in the year, which is pleasing given the emissions. Since April 2019, the majority continued disruption to the working of our electricity is from renewable sources % of own brand products for which environment due to the ongoing pandemic. certified as REGO (Renewable Energy we offer an easy-to-use take-back Why this measure is important Guarantees of Origin), but for the purpose service. This measure rates our colleagues’ of the above metric we have included carbon experience with us and the survey helps us emissions from electricity calculated using Target FY22-24: 50% reduction understand where we need to improve. It is the location-based methodology. LTIP NEW also used as an executive bonus measure. Why this measure is important Owing to the lockdown period, we This measure helps us to understand how postponed the May 2020 survey, and the successful we are in reducing our impact on These targets were chosen because 2020 year-on-year improvement quoted the environment and achieving our long they are aligned to our focus areas compares the November 2019 survey to the term carbon reduction targets. and ambitions, and cover areas November 2018 survey, and the 2021 year- where we are able to make the on-year improvement compares the May most impact on the environment 2021 survey to the November 2019 survey. and provide the most benefit to our 2. tCO2e is based on Scope 1 and Scope 2 customers and our communities. emissions. Ambitious about profitable growth Profit beforeta x3 Free cash flow4 Diluted earnings per share £m and % sales £m pence and growth % £157.8m BONUS £108.5m BONUS 62.9p LTIP 11.4% 11.4% 11.8% 37.8% 46.6% 10.3% 0.3% 9.7% (14.0%) 174.7 (28.2)% 157.8 152.8 62.9 125.9 109.1 108.5 49.9 42.9 109.3 102.0 36.1 36.2 12.8 51.0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Profit before tax (PBT) in the period was Free cash flow was £108.5m in the year, Diluted earnings per share increased to £157.8m (FY20: £109.1m), an increase of and this includes the reversal of part of the 62.9p reflecting the significantly higher sales £48.7m year on year, despite stores being exceptional working capital benefit from and profit in the year. closed for a longer period in FY21 compared FY20, as we have rebuilt our stockholding. Why this measure is important to FY20. This reflects the strong sales Why this measure is important Earnings per share is a key measure for performance whilst the stores were open, Dunelm is highly cash generative. This shareholders and one of the performance the impact ofClick & Collect remanini g measure allows the Board to monitor cash criteria for senior management remuneration operational whilst stores were closed and flows to support investment decisions for including LTIPs. the strong online performance. long-term profitability, or to return surplus Why this measure is important cash to shareholders. PBT measures overall financial performance of the business, reflecting sales, gross margin and cost control. It is also used as a key bonus measure. 4. Free cash flow is defined as net cash generated from operating activities less capex (net of 3. Profit before tax is presented before disposals), net interest paid, interest on lease exceptional costs. liabilities and repayment of lease liabilities. DUNELM GROUP PLCANNUAL REPORT & ACCOUNTS 2021 33 STRATEGIC REPORT GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION