ALTERNATIVE PERFORMANCE MEASURES (APMs) APM Definition, purpose and reconciliation to statutory measure Unique active customers 12-month rolling growth in unique active customers who have shopped in growth the 12 months, based on Barclays transactional data. Note that Barclays data represents approximately 20% of total Dunelm transactions. To measure whether we are continuing to grow our active customer base – from both new customers and retention of existing customers. Total sales Equivalent to revenue (from all channels). This is net of customer returns. Total LFL sales Stores and online sales but excludes new stores and stores which have had a significant change of space, which have been trading for less than one full financial year prior to 27 June 2020. Measures total sales growth excluding the impacts of any significant space changes. Digital sales Digital sales include home delivery, Click & Collect (or Reserve & Collect before October 2019) and tablet-based sales in store. Digital % total sales Digital sales (as defined above) expressed as a percentage of revenue. This is not a measure that we seek to maximise in itself, but we measure it to track our adaptability to changingcustomer behaviours. Gross margin % Gross profit/revenue. Measures the profitability made on product sales prior to sales & distribution costs and administrative expenses. Operating costs to sales ratio Operating costs/revenue. To measure the growth of costs relative to sales growth. Effective tax rate Taxation/profit before taxation. To measure how close we are to the UK corporation tax rate and understand the reasons for any differences. Capex (net of disposals) Acquisition of intangible assets and acquisition of property, plant and equipment less proceeds on disposal of property, plant and equipment and intangibles. Free cash flow Net cash generated from operating activities less net cash used in investing activities less interest paid, interest on lease liabilities and repayment of lease liabilities. Measures the cash generated that is available for disbursement to shareholders. Net cash/(debt) Cash and cash equivalents less total borrowings plus unamortised debt issue costs. Excludes IFRS 16 lease liabilities. DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021 39 STRATEGIC REPORT GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION