Appendix 4E
Temple & Webster Group Ltd
ABN 69 608 595 660
Financial year ended 30 June 2022
Results for announcement to the market
Annual change
Revenues from ordinary activities
Profit from ordinary activities after tax attributable
to the owners of Temple & Webster Group Ltd
Profit after tax for the year attributable
to the owners of Temple & Webster Group Ltd
2022
$’000
2021
$’000
426,335
326,344
Change
30.6%
11,968
13,953
(14.2%)
11,968
13,953
(14.2%)
Strong growth in FY22 with revenue of $426.3m which was up 30.6% vs FY21. The reduction in profit after tax reflects the
Group’s stated reinvestment strategy for FY22 which included investing in people, technology, logistics and product. The
result also included an initial investment of $1.7m into the Group’s new home improvement site, The Build. Importantly,
EBITDA guidance for FY22 was 2-4%, whilst the Group’s actual result was 3.8% which was at the high end of this guidance.
Please see the Group’s FY22 results presentation lodged with the ASX on 16 August 2022 for information relating to an
FY23 outlook.
2-Year CAGR1 using profit before tax
Revenues from ordinary activities
Profit from ordinary activities before tax attributable
to the owners of Temple & Webster Group Ltd
Profit before tax for the year attributable
to the owners of Temple & Webster Group Ltd
1. Compound annual growth rate.
2022
$’000
426,335
13,250
13,250
2020
$’000
176,342
8,017
8,017
Change
55.5%
28.6%
28.6%
Revenue for the year was $426.3m which is up 55% on a 2-year CAGR. The growth is presented this way in an attempt to
normalise for the erratic nature of growth over the preceding two years as a result of numerous lockdown periods. The
Group recommends using profit before tax as opposed to profit after tax given various tax adjustments over the 3-year
period due to the recognition of historical tax losses which impact like for like comparisons.
There were no dividends paid, recommended or declared during the current financial period. The Group did not put a
dividend reinvestment plan in place in the current financial year.
The net tangible assets per ordinary share is calculated based on 120,514,583 ordinary shares on issue as at
30 June 2022 and 120,452,928 on issue as at 30 June 2021 and is set out below:
Net tangible assets per ordinary security
2022
Cents2
73.95
2021
Cents2
57.13
2. Consistent with the Australian Securities & Investment Commission interpretation, the Right-of-use asset (AASB 16) and Right-of-return assets (AASB 15)
are intangible assets, and therefore have been excluded from Net tangible assets.
The Group holds 33% of shares in an associate, Renovai Inc.
For more detailed information please refer to the attached annual report.
The report has been audited and an unqualified opinion has been issued.
1
Appendix 4E 2022 Annual
Report 2022
Contents
1
2
4
6
8
16
27
33
Acknowledgment of Country
Summary
Chairperson’s report
CEO’s report
Operational review
Environment, social and governance
Directors’ report
Remuneration report audited
49 Auditor’s independence declaration
50 Consolidated statement of profit or loss
and other comprehensive income
51
Consolidated statement of financial position
52 Consolidated statement of changes in equity
53 Consolidated statement of cash flows
54 Notes to the consolidated financial statements
84 Directors’ declaration
85
89
Independent auditor’s report
Shareholder information
93 Corporate directory
Temple & Webster Group Ltd
ABN 69 608 595 660
1
2
4
6
8
16
27
33
Acknowledgment of Country
Summary
Chairperson’s report
CEO’s report
Operational review
Environment, social and governance
Directors’ report
Remuneration report audited
49 Auditor’s independence declaration
50 Consolidated statement of profit or loss
and other comprehensive income
51
Consolidated statement of financial position
52 Consolidated statement of changes in equity
53 Consolidated statement of cash flows
54 Notes to the consolidated financial statements
84 Directors’ declaration
85
89
Independent auditor’s report
Shareholder information
93 Corporate directory
Acknowledgement
of Country
Temple & Webster Group
acknowledges the Traditional
Owners and Custodians of
Country throughout Australia.
We recognise their enduring
connection to the lands, the
waterways, and the skies. We
acknowledge the Gadigal and
Wangal people, on whose
lands our corporate head
office is located, as well as all
other First Nation Countries
we operate across. We pay
our respects to Elders past,
present and emerging and to
all Aboriginal and Torres Strait
Islander peoples.
1
Annual Report 2022 Summary
FY22
Revenue $426.3m 2-Year
CAGR: 55%
FY22
EBITDA $16.2m 2-Year CAGR: 38%
(incl. The Build
investment)
FY22
EBITDA
Margin 3.8%
High end of
2-4% guidance
• Temple & Webster is the
leading pure play online
retailer for furniture and
homewares in Australia
• The furniture and homewares
market is large, stable and
continues to shift online
• Attractive customer and unit
economics with a track record
of taking market share
• Cash flow positive, strong
balance sheet position, $101m
cash and no debt
Sources: Euromonitor International Limited; Home Furnishings and Homewares System 2022 edition. IBISWorld
Online Home Furnishing Sales in Australia Industry Report and Online Household Furniture Sales in Australia
Industry Report
2
Temple & Webster Group Ltd 3
Annual Report 2022 Chairperson’s
report
4
Temple & Webster Group Ltd Pleasingly, the Company’s proven ability to adapt to
rapidly changing conditions has once again enabled
us to keep meeting our customers’ expectations, while
continuing to grow and take market share.
Dear shareholders,
On behalf of the Board of Directors, it gives me pleasure to
present Temple & Webster’s 2022 Annual Report.
This strategy enabled us to build a brand that is resonating
with the next generation of shoppers and assist in growing
our market share in the sectors we operate in.
Temple & Webster continues to shine
As we close out another financial year, the Temple &
Webster team has again stepped up to successfully manage
a variety of challenges throughout FY22.
Pleasingly, the Company’s proven ability to adapt to rapidly
changing conditions has once again enabled us to keep
meeting our customers’ expectations, while continuing to
grow and take market share.
Revenue for the year was $426.3m which is up 55% on a
2-year CAGR. We have presented growth this way in an
attempt to normalise for the erratic nature of growth over
the preceding two years as a result of numerous lockdown
periods. This growth reaffirms Temple & Webster’s position
as one of the fastest growing retailers in Australia. EBITDA
of $16.2m was up 38% on a 2-year CAGR basis, and EBITDA
margin came in at 3.8% which was at the high end of our
stated 2-4% range. These profit numbers include an initial
$1.7m investment in our new site, thebuild.com.au.
Market opportunity
While the directors are happy with these results, we believe
it is just a fraction of what we can achieve as the online
market for furniture and homewares continues to grow.
In Australia, the total furniture and homewares market is
worth around $16-17 billion, of which only 15-17% has moved
online. This is well behind other markets such as the US,
which has around 30% online penetration with significant
growth ahead of it.
We are also continuing to expand our activities in the
business-to-business (‘B2B’) and home improvement
markets, which increases our total addressable market to
more than $30 billion. These markets represent a significant
opportunity for our business and are a key focus of our
future growth strategy.
Investing for growth
During the financial year, we continued to follow our
short- to mid-term reinvestment strategy. This saw us
reinvest into areas that continue to build out our strategic
moats, including marketing, technology development,
product range and logistics, as well as into our new
growth horizons.
A strong balance sheet
We finished the year with a cash balance of $101m and
remain debt free. This balance sheet provides us with the
flexibility to invest in our future growth horizons, look at
inorganic opportunities where it makes sense to do so and
enact capital management strategies, whilst also ensuring
we have the financial strength to navigate potentially
challenging macro environments.
Change of company secretary
In March, the Board farewelled Company Secretary, Michael
Egan, who retired after almost seven years in the role.
Our new Company Secretary is Lisa Jones. Lisa is a
corporate lawyer and corporate governance professional
with more than 20 years’ experience in commercial law and
corporate affairs.
I wish to sincerely thank Mike for his significant contribution
to the Company and wish him all the best for his retirement.
I am also delighted to welcome Lisa to the role.
Thank you to the team
On behalf of the Board, I would like to thank our CEO,
Mark Coulter, the management team and the entire staff
of Temple & Webster for their hard work throughout the
year. Your passion and dedication is inspiring. I’d also like
to take this opportunity to extend my thanks to my fellow
directors Susan Thomas, Conrad Yiu, Belinda Rowe and our
new Company Secretary Lisa Jones for their contribution
and stewardship. Finally, I would like to thank you – our
shareholders – for your continued support.
stephen heath
Non-executive Chairperson
5
Annual Report 2022 Dear fellow shareholders,
With apologies to Tolstoy, it does feel that all challenging
years are challenging in their own way. FY22 was no
exception. It started with quasi-nationwide lockdowns,
border closures and self-isolation, moving quickly into
supply chain headaches, logistical bottlenecks, Federal
Government changes, domestic inflation and interest rate
increases, and global macro uncertainty especially with the
Russia-Ukraine conflict following.
Despite all of this, Temple & Webster has delivered another
set of strong results with record revenue of $426.3m
which is 31% up on last year and 142% on a 2-year period,
which equates to a 55% 2-year CAGR. The flexibility of the
business model was also evident with an EBITDA result of
$16.2m which is up 38% on a 2-year CAGR, and at 3.8% of
revenue, is at the highest end of our stated 2-4% range. This
result included an initial $1.7m investment in our new home
improvement site, the Build by Temple & Webster (‘the
Build’).
These results are a testament to our strategy and market
position which we continued to strengthen in FY22 through
reinvesting back into the business. This included investing in
areas that allow us to maintain our competitive advantage,
including technology and data, logistics services, content
and merchandising capabilities. We also accelerated our
investment into sectors adjacent to our core furniture and
homewares business – trade and commercial and home
improvement. These are areas we believe will deliver
significant growth for our business in the years to come. Our
results also reflect the incredible resilience of our team and
their determination to keep delivering beautiful solutions for
our customers, no matter what the pandemic throws at us.
This has contributed not only to the growth of our business
over the past year, but to bringing happiness into the lives of
the hundreds of thousands of Australians who bought our
products.
Building on strong foundations
Ultimately, the fundamentals of our business haven’t
changed. The market opportunity hasn’t changed. Our
strategy hasn’t changed. And, importantly, our aspirations
haven’t changed.
CEO’s
report
6
Temple & Webster Group Ltd We remain confident our strategy is resonating
with the next generation of shoppers and that we
are well placed to continue to gain share in the
markets we operate in.
our position as conditions change. Importantly, the ongoing
shift from offline to online is one driven by demographic and
consumer behaviour changes which are independent of any
cyclical macroeconomic factors.
Although FY23 year-on-year growth will be volatile as
we finish lapping COVID impacted numbers in FY22, our
strategy remains consistent. Through our growth initiatives,
we aim to maximise growth as well as to improve profit
margins. This will be done through our ongoing program
of margin improvement and cost base management, and
phasing of longer-term investments.
Thank you to the Tempster team
As always, I’d like to say a huge thank you to the Tempster
team. Dealing with everything the pandemic has thrown our
way hasn’t been easy. We salute you for the energy, passion
and drive that has allowed us to keep on delivering beautiful
solutions for our customers throughout this challenging
period.
mark coulter
Chief Executive Officer
We want to be known for having the best range in our
category. We want consumers to see us as the place to
go for great-quality products at affordable prices. We
want to inspire people to make their homes more beautiful
with inspirational content and services. We want to create
exceptional customer experience at every step of the
journey, from browsing to accepting a delivery. And we
want to achieve all of this with a strong foundation of data-
driven marketing, world-class technology and exceptional
execution from our team.
These aspirations feed into our mission to deliver beautiful
solutions for our customers’ homes and workspaces, and
for all our other stakeholders, including suppliers and
shareholders.
To do this, we intend to continue forging closer relationships
with our suppliers, investing in areas like technology
and data that allow us to differentiate our offering, and
expanding our logistics capabilities. We will also keep
pushing into the complementary markets we’ve identified
for future growth.
We remain confident our strategy is resonating with the
next generation of shoppers and that we are well placed
to continue to gain share in the markets we operate in.
Where to from here?
As we head into FY23, we understand this isn’t the time to
be complacent. With prevailing economic conditions such
as interest rate increases and cost of living pressures all
likely to weigh on discretionary spending, Australia could
be in for a difficult 12 months ahead.
At Temple & Webster, we’re not immune to these uncertain
economic conditions, but we believe we have several factors
in our favour as we consider what comes next.
The most important of these is the financial strength of our
business itself. As our FY22 results show, we are not only the
market leader in our sector but are still growing, profitably.
Our flexible business model also enables us to withstand
market pressures. We have access to a variety of variable
performance levers within the business, including overhead
management, nimble pricing, promotional strategies and a
variety of marketing channels that we can use to optimise
7
Annual Report 2022 Operational
review
8
Temple & Webster Group Ltd Market leading growth and attractive
customer metrics
Revenue of $426.3m was up 31% on FY21 and up 142% on
FY20 which is a 55% 2-year CAGR which demonstrates the
Group’s ability to consistently outperform.
Figure 1: Revenue, $m
500
450
400
350
300
250
200
150
100
50
0
FY17
FY18
FY19
FY20
FY21
FY22
Revenue growth was driven by both an increase in active
customers which were up 21% on FY21:
Figure 2: Active Customer Growth
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
7
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3
9
Annual Report 2022
Operational review
continued
And increases in revenue per active customer (‘RPAC’),
the 8th consecutive quarter of growth:
Figure 3: Revenue per active customer up 6%
$500
$450
$400
$350
$300
$250
8
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Despite inflationary pressures on Customer Acquisition
Costs (‘CAC’), our 12-month ROI has remained at ~2 with
CACs remaining below $70.
Figure 4: 12-month marketing ROI ~2 despite $69 CAC
2.4
2.0
1.6
1.2
0.8
0.4
0.0
CAC
As at 30 June 2021
As at 30 June 2022
$58
$69
Marketing ROI = Margin $ / CAC
Margin = Revenue per active customer as at 30 June 2022 x delivered margin
% for FY22
CAC = Total marketing spend for FY22 x 75% (being the estimated
percentage of marketing spent on new customer acquisition, i.e., excludes
estimated spend on repeat customers) divided by the number of first-time
customers during FY22
1010
EBITDA at the highest end of guidance
Importantly, this was profitable growth, EBITDA was $16.2m
(3.8% of revenue) which was at the high end of our stated
2-4% EBITDA range and equates to a 2-year CAGR of
38%. This result included an initial investment into the Build
of $1.7m.
Figure 5: EBITDA, $m
Covid outlier
25
20
15
10
5
0
-5
-10
FY17
FY18
FY19
FY20
FY21
FY22
Trade and Commercial (B2B) grows by 39%
This year our trade and commercial (‘B2B’) division grew
by 39% year on year. This is despite the commercial sector
experiencing significant disruptions due to the pandemic.
B2B now represents 8% of our total business, with
considerable potential to grow.
Figure 6: Revenue, $m
$10,000
$8,000
$6,000
$4,000
$2,000
0
8
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Q
Key area of focus included the development of partnership
packages for high-value builder-developer customers –
including display designs, furniture packages and marketing
and selling incentives
Temple & Webster Group Ltd Temple & Webster Group Ltd
Home improvement grows by 61%
Pleasingly, our new home improvement category grew 61%
year on year, albeit off a small base.
With the Australian home improvement market worth
$26 billion, $16 billion of which is relevant to our business,
this sector represents a significant opportunity to maximise
our share of the total spend in the home.
Currently, this market lags furniture and homewares in terms
of online penetration. However, we believe we’ll see similar
market dynamics to those we’re already seeing in furniture
and homewares. This includes a shift to online shopping as a
channel of choice for shoppers who have grown up buying
everything online and are now buying, decorating and
renovating their homes.
= $16.4b
in scope
market
opportunity
Product class
Tools and equipment
Garden and landscaping
Paint and supplies
Window furnishings
Flooring
Plumbing fixtures
Other products
Online
<5%
Less than 5%
moved online
1111
Annual Report 2022 Annual Report 2022 Operational review
continued
1212
To further capitalise on this opportunity, we launched
a new online-only store for home renovators, The Build
by Temple & Webster (thebuild.com.au). Leveraging our
core technology platform, digital marketing and data
expertise, The Build features an initial range of more than
20,000 products across 40 categories. Our goal is for it
to become Australia’s first-stop shop for all things DIY and
home improvement.
Expanding our Private Label strategy
Our owned inventory or ‘Private Label’ range remained
a strategic focus for the business in FY22.
The range is sourced and imported directly by Temple &
Webster from more than 100 overseas suppliers.
This delivers higher margins than our core drop-ship range
and provides logistical simplicity by placing inventory closer
to customers. In FY22, Private Label represented 27% of our
sales for the year.
Figure 7: Private label share (% of total sales)
26%
27%
FY21
FY22
We have also launched a new house brand – Loft 23.
Temple & Webster Group Ltd Temple & Webster Group Ltd These brands are created to facilitate user search and
discovery, especially as the catalogue continues to grow.
More brands are to be launched in FY23.
Product pages continue to be improved with additional
content added, enriching product descriptions to drive
conversion rate.
We continue to invest in people and capabilities in this area,
expanding our buying and planning teams and our data
science capabilities to improve forecasting and inventory
management.
Moving forward, we see Private Label playing a key role in
expanding longer-term margins as its share increases from
where it is today.
1313
Annual Report 2022 Annual Report 2022 Operational review
continued
Managing supply chain issues and Net Promoter Score
Temple & Webster sources products from more than 100 factories for our Private Label and more than 500 drop-ship
suppliers, who work with thousands of factories globally.
Net Promoter Score
(score range: -100% to 100%)
World Class Stretch Target (NPS = 70)
8
1
Y
F
3
Q
8
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Q
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Q
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
Our asset light supply chain provides operational excellence through a
digitally connected physical network of partners, who are collectively focused
on providing an industry-leading experience to e-commerce homewares,
furniture and home improvement customers (‘B2C’ & ‘B2B’)
Our sourcing approach
allows us to mitigate
single point reliance
Our fulfilment model
allows us to avoid
bottlenecks and other
impacts
Our delivery network
allows us to balance
demand and capacity
1,000s
of factories around
the world
100+
private label factories
240k+
products ready for
quick ship
100s
of pick up points
~65%
of population within two
hours of our private label
facilities
Delivery Partners
are integrated providing
a diversified network
Scale
1,000s of deliveries made daily
allow us to gain priority
<40 hrs
most customer orders are
picked and shipped
Forecasts
are provided to our network
of partners to secure capacity
Transport Control Tower
anticipates and resolves
delivery issues
The 65% population within two hours of our private label facilities reflects expected metric once all facilities are operational – expected early 2023.
With COVID-19 continuing to affect manufacturing and transportation this year, maintaining diversity in our supply chain
allowed us to stay ahead of logistical bottlenecks and workforce capacity issues and adapt our fulfilment strategies before
they impacted customer experience.
For example, if a particular market or factory was affected by delays, we were able to substitute other products from
our range.
Overall, having a diversified supply chain enabled us to scale sustainably during the pandemic whilst ensuring our customers
had a great experience.
1414
Temple & Webster Group Ltd Temple & Webster Group Ltd
Leading with technology
Temple & Webster continues to invest in market-leading
technology aimed at improving customer experience,
including artificial intelligence (‘AI’), augmented reality (‘AR’),
3D and mobile apps. This year, we more than doubled the
number of software engineers in our team and continued to
add to our data and analytics team.
We also increased our investment in our Israeli start-up
technology partner Renovai. Renovai’s AI interior design
tool currently powers our product recommendation
mood boards. We are also extending the service into
areas such as AI-generated display suites packages
for our developer clients.
Meanwhile, we have made substantial progress with live
trials of our 3D augmented reality service and building
out our library of 3D assets. These are being used to
complement existing 2D imagery on product pages.
Our goal is to have the largest 3D catalogue of furniture
and homewares in Australia.
Metrics for our iOS and Android apps continue to improve,
with more than 51% of consumer orders now placed on a
mobile device. The apps also have a higher average order
value and conversion rate than the mobile site. Customers
migrating to the app are also more likely to place a
repeat order.
1515
Annual Report 2022 Annual Report 2022 Environment,
social and
governance
16
Temple & Webster Group Ltd Our commitment to building
a more sustainable future
At Temple & Webster, we believe sustainability is an essential
part of delivering on our vision to make the world more
beautiful, one room at a time.
We have continued to make improvements across the core
areas of our business to ensure we deliver beautiful solutions
for our stakeholders while also creating long-lasting value
and meaningful impact for the future.
We are also committed to delivering positive and substantial
change for the planet, society and our shareholders. In line
with this, we’re consistently improving the standards that
underpin our actions.
Figure 8: FY22 Goals and Status
Goals
Develop a materiality assessment to identify
the key risks and opportunities relevant to
our business
Status
Complete
Establish a sustainability roadmap to guide
and prioritise future actions
Complete
Recruit a full-time Sustainability Officer
Complete
Develop supplier action plans to address
modern slavery risk
In Progress
Contribute to reconciliation and develop a
Reconciliation Action Plan
In Progress
Developing a roadmap for the future
In FY21, we committed to making considered investments to
support the development and execution of our sustainability
roadmap. This included hiring a dedicated Sustainability
Officer in our Quality, Compliance and Sustainability team
to facilitate its implementation.
Last year, we worked with an independent external
consultant, thinkstep-anz, to develop a sustainability
roadmap that will allow us to prioritise actions in the
areas that:
• are most relevant to us as a business
• deliver the most impact in our industry
• create long-term material value
• best align with global sustainability standards
and frameworks.
For completeness and quality assurance, the development
of the roadmap was informed by a materiality assessment.
This involved surveying our internal stakeholders to find out
which environmental, social and governance (‘ESG’) issues
they believe are material to our business. We also surveyed
our external stakeholders to find out which issues are
important to them.
This assessment revealed the areas where stakeholders
believe Temple & Webster has the most opportunity to
create positive sustainability outcomes for our customers,
employees and the communities in which we operate.
These are shown in Figure 9, which plots the importance
of specific issues for stakeholders and their impact on
the business.
The importance of sustainability issues and
their material impact on the business
Figure 9: Our sustainability materiality matrix
HIGH
Employee wellbeing and
diversity and inclusion
Responsible
sourcing
Responsible
packaging
MEDIUM
Waste reduction and
landfill diversion
Sustainability
communication
Carbon
emissions
Environmental
protection
Product safety
and quality
Compliance
Circular
economy
Animal
welfare
Australian
made products
Charity and
workplace
giving
Water and
energy
consumption
LOW
s
s
e
n
i
s
u
B
n
o
t
c
a
p
m
I
11
10
9
8
7
6
5
4
3
2
1
0
1
2
3
4
5
6
7
8
9
10
11
Amalgamated Stakeholder Importance
• Environmental sustainability • Social sustainability • Governance sustainability
Bubble size reflects ease of implementation (larger bubbles are easier to implement)
By identifying initiatives that correspond with our current
risks and opportunities – and aligning these with the issues
that are important to our stakeholders – we are confident we
can continue to drive sustainability across our value chain.
17
Annual Report 2022
Environment, social and governance
continued
As a result of our consultation process, we determined four key focus areas for our sustainability roadmap:
• carbon and energy management
• product stewardship (measures such as responsible sourcing, waste reduction and landfill diversion that promote
a circular economy)
•
responsible packaging
• employee wellbeing, and diversity and inclusion (‘D&I’)
We also identified several opportunities to deliver lasting and meaningful change associated with each of these focus areas
(Figure 10).
Opportunities to deliver lasting and meaningful change
Figure 10: Our sustainability focus areas
Focus area
Opportunities
Our approach
Carbon
and energy
management
We have an opportunity to:
We will:
•
transition to renewable energy sources
for our direct electricity consumption
• calculate our carbon footprint in line with the
Greenhouse Gas Protocol Corporate Standard
• collaborate with property owners to
• establish a carbon reduction plan that sets measurable
investigate renewable energy infrastructure
•
reduce our carbon footprint against
measurable targets.
emissions reduction targets and works towards
decarbonisation
•
identify and (where possible) implement energy
efficiency options.
Product
stewardship
We have an opportunity to:
We will:
•
transition to lower-impact materials,
including certified, circular, recycled and
renewable materials
•
•
increase the scope of certification of our range
reduce operational waste and increase our
office waste recovery rate
• divert more waste from landfill by moving into
the circular economy or recovery alternatives.
• continuously review end-of-life product solutions
to maximise responsible and ethical outcomes.
Responsible
packaging
We have an opportunity to meet the 2025
National Packaging Targets (refer to page 21) by:
• designing packaging for recovery and
transport efficiency
• optimising material efficiency
•
•
incorporating recycled or renewable materials
increasing recycling awareness through
education.
We will:
• capture the packaging material of our Private Label
range and establish a baseline for future reporting
• audit our Private Label packaging data to determine
recyclability, recycled content and areas for
improvement
•
identify packaging reduction strategies and implement
change where applicable.
Employee
wellbeing
and D&I
We have an opportunity to:
We will:
• continue to provide a workplace that
is inclusive and safe
• partner with more D&I service providers, mentors
and trainers to further support our D&I journey
• give employees the chance to pursue
personal and professional development
and learning.
• continue to support employee wellbeing with access to
fully reimbursed mindfulness apps and a free employee
assistance program (‘EAP’)
• encourage a growth mindset in our employees and
support their aspirations.
Our sustainability roadmap has been integrated with our broader business strategy and will guide our actions over the next
three years.
1818
Temple & Webster Group Ltd Temple & Webster Group Ltd Caring for the planet
Carbon and energy management
Climate change is one of the most significant crises of our time. It is clear that business as usual is no longer good enough.
Instead, businesses, communities and countries must step up their efforts to combat climate change by reducing the
amount of carbon they emit.
In FY21, we disclosed our intention to reduce our carbon footprint. In order to do this, we first needed to assess and
understand the scale of the issue in relation to our business.
In the current financial year, we partnered with an independent external carbon consultant, Carbon Neutral, to calculate our
carbon footprint in line with the Greenhouse Gas Protocol Corporate Standard. Carbon emissions are classified as Scope 1,
Scope 2 and Scope 3.
Scope 1 emissions are direct emissions that occur as a result of operations that we control, such as the functioning of our
head office. Scope 2 emissions are indirect emissions that relate to the consumption of electricity. Scope 3 emissions are
also indirect emissions (not included in Scope 2) that occur in the value chain outside of our operational control, such as the
manufacturing, transportation and disposal of our products.
In FY22 we focused on emissions within our operational control and calculated Scope 1 and 2 emissions. This assessment
found we emitted 197.21 tonnes of carbon dioxide equivalent in Scope 1 and Scope 2 emissions over the course of the
year. We plan to add the measurement of our Scope 3 emissions – indirect emissions that occur through our value chain –
in FY23.
Following the calculation of our carbon inventory we will establish a carbon reduction plan in H1 of FY23 and set measurable
emission reduction targets for FY24. Our goal is to achieve a 45% carbon reduction by 2030, in line with the United Nations
Sustainable Development Goal (‘SDG’) on climate action.
FY22 Key Achievements
Our Objectives
COMPLETED CARBON
ASSESSMENT
of our Scope 1 and 2 emissions
WE WILL OFFSET 100%
of our Scope 1 and 2 emissions from FY22
in FY23
WE WILL COMMENCE PROCURING RENEWABLE
ENERGY for our head office in FY23
1919
Annual Report 2022 Annual Report 2022 Environment, social and governance
continued
Product stewardship
As Australia’s leading pure play online retailer for the home, we understand that the most positive impact we can have on
the planet will stem from our range of products. We are committed to taking steps each year to improve the sustainability
credentials of our range by focusing on product design, material sourcing and end-of-life solutions.
As part of our FY21 commitment, we are continuing to work with our supply chain to expand the proportion of our range
that has achieved globally recognised third-party certification, such as OEKO-TEX, Global Organic Textile Standard, and
Better Cotton Initiative. We also maintain a stringent due diligence process to assess the legality of timber materials in our
imported product range. This process requires us to conduct a risk audit of the full chain of custody of our imported timber
products, all the way up to the point of harvest, on an ongoing basis.
In the future, we aim to promote sustainable forestry practices by sourcing more timber products that are certified under
leading certification schemes, such as Forest Stewardship Council®.
Globally recognised product certifications also assist us to combat modern slavery within our supply chains. In FY22, we
audited our suppliers for social and ethical compliance with labour standards and supported them to implement corrective
actions, where needed.
We also recognise how important it is for us to remain focused on finding more sustainable solutions for operational waste.
To do this, we are looking to introduce new methods of monitoring and reducing the amount of waste we send to landfill.
Our overall goal is to not only divert waste from landfill but to also make a difference within the broader community.
We aim to do this through collaborations with industry experts and organisations and not-for-profit and charity partners.
FY22 Key Achievements
Our Objectives
ETHICAL FACTORY AUDIT
REPORTS on file for 100%
of private label suppliers
WE WILL BENCHMARK OUR DIVERSION
ACTIVITIES and set a new diversion target
for FY24
All Australian-based employees
have access to MODERN SLAVERY
AWARENESS training
WE WILL CONDUCT A WASTE AUDIT of our
head office to optimise onsite waste collection
systems for greater diversion in H2 FY23
Procurement teams will receive SPECIALISED
MODERN SLAVERY RISK TRAINING in H2 FY23
2020
Temple & Webster Group Ltd Temple & Webster Group Ltd Responsible packaging
Reducing the amount of packaging waste that goes to landfill is of utmost importance for our customers and our business.
In FY21, we committed to making packaging sustainability a key focus area for our business.
We are committed to meeting Australia’s 2025 National Packaging Targets. Launched in 2018, these targets are designed to
create a new sustainable pathway for the way packaging is managed in Australia.
The targets include:
•
100% of packaging is reusable, recyclable or compostable
• 70% of plastic packaging is recycled or composted
• an average of 50% recycled content is included in packaging
• unnecessary single-use plastic packaging is phased out.
In FY22, we became members of the Australian Packaging Covenant Organisation (‘APCO’), which aims to keep packaging
materials out of landfill and retain the maximum value of the materials within the local economy. To achieve optimal
outcomes for our packaging, we have started to capture packaging and product data. This includes requesting packaging
data from all our Private Label suppliers to understand which materials are used in our packaging and where we can have
the most impact.
Although some progress has been made, packaging remains a significant area of focus for us and we will continue to work
to divert waste from landfill and reduce our environmental impact from product packaging in FY23.
FY22 Key Achievements
Our Objectives
Became a SIGNATORY TO APCO
in January 2022
PACKAGING BASELINE ESTABLISHED
FOR 86% of our private label range
Designed new delivery satchels made
from 80% RECYCLED content
We will ENGAGE AND COLLABORATE WITH
OUR SUPPLIERS to develop strategies to
achieve the 2025 National Packaging Targets
We will REDUCE OUR PACKAGING FOOTPRINT
through increased use of recycled and recyclable
materials
We will REDUCE THE AMOUNT OF
POLYSTYRENE PACKAGING used in our private
label range
2121
Annual Report 2022 Annual Report 2022 Environment, social and governance
continued
Supporting our people and communities
COVID-19 response
During FY22, we continued to monitor the challenging situation created by COVID-19. This included surveying our
employees to understand how they felt about the pandemic and what help they needed. As a result of this consultation,
we have accommodated employees’ preferences for hybrid working and provided all employees with a $750 store credit
to ensure a comfortable and appropriate set-up of their home working environment.
To ensure team members felt supported, we hosted a number of engagement sessions including a Company-wide EAP
consultation session to help in the management of stress and anxiety caused by COVID-19.
We maintained our regular business rhythms and meeting cadence through online video conferencing, including our weekly
all hands meeting and quarterly one-on-one check-ins to facilitate ongoing human connection throughout the pandemic.
Employee development and wellbeing
At Temple & Webster, we strive to deliver the opportunities and support employees’ need to grow their careers and thrive
as individuals.
In FY22, we created a new Learning and Development (‘L&D’) team that hit the ground running. Key projects included
developing a new Learning Management System, which will launch in early FY23. Our goals with the learning platform are to:
• deliver easily accessible and quality online learning content
• establish learning pathways for all roles
• meet our regulatory and compliance training and reporting obligations
• measure on the impact of learning
• deliver scalable learning solutions at speed.
The L&D team rolled out a career development training program for leaders and employees to ensure everyone has a career
development plan to work towards. We expanded our existing training and upskilling programs to help ensure we retain our
top talent and use their strengths across the business.
As part of our commitment to supporting the health and wellbeing of our employees, team members are invited to
participate in daily mindfulness sessions when they are working in our office. Employees are also fully reimbursed for
the purchase of a mindfulness app, so they can practice meditation and mindfulness whenever and wherever they want.
We also provide all of our employees with free access to an EAP. The EAP can be accessed confidentially at any time
for support and counselling for a broad range of issues. It also offers a variety of strategies and tools to help employees
manage stress and deal with conflict in personal and professional situations.
A popular initiative in FY22 has been the introduction of catered lunches in our office three days a week. These encourage
employees to interact socially with their peers and re-establish relationships impacted by the extended lockdowns
experienced in 2021.
FY22 Key Achievements
Our Objectives
Commenced the development
of an INTERNAL LEARNING
AMBASSADORS PROGRAM
SUPPORTED R U OK? DAY with
Company-wide communications
We will ROLL OUT OUR ONLINE LEARNING
PLATFORM for all Australian-based employees
in H1 FY23
We will DELIVER LEADERSHIP CAPABILITY
PROGRAMS to all Australian-based
people leaders
2222
Temple & Webster Group Ltd Temple & Webster Group Ltd Diversity and inclusion
As a business serving a wide range of customers throughout Australia, we are committed to employing people that
represent all aspects of diversity – visible and invisible. We aim to create an environment where people can flourish
and play to their unique strengths, while experiencing a sense of belonging.
This commitment to diversity and inclusion contributes to our pride in the company we’ve built, as well as our high
employee engagement scores.
This year, we became members of Pride in Diversity – the national not-for-profit employer support program for LGBTQ
workplace inclusion. Through this partnership we provided our employees with training on LGBTQ awareness.
We rolled out an education campaign on the use of pronouns and the role they play in ensuring team members feel
respected and supported.
Another successful initiative in FY22 was our Multicultural Day in May. This fun day saw many employees dress in traditional
clothing, share delicious dishes and teach us how to say Temple & Webster’s mission in a range of languages.
FY22 Key Achievements
Our Objectives
Became an OFFICIAL PARTNER of
ACON’s Pride in Diversity Program
We will provide LGBTQ AWARENESS TRAINING
to all Australian-based employees in FY23
Established a ‘Pride Committee’ to
ensure the recruitment, onboarding
and working experience for LGBTQ
TEAM MEMBERS IS AUTHENTICALLY
SAFE AND INCLUSIVE
CREATED ALL-GENDER FACILITIES
for use by employees and visitors
We will develop a more detailed
METHODOLOGY FOR UNDERSTANDING
the diversity of our workforce
2323
Annual Report 2022 Annual Report 2022 Environment, social and governance
continued
Advancing reconciliation
We are dedicated to playing our part in advancing reconciliation in Australia and closing the gap between Aboriginal and
Torres Strait Islander peoples and all other Australians. We aim to:
• develop authentic and meaningful partnerships with Aboriginal and Torres Strait Islander communities
•
listen and work collaboratively towards defining our sphere of influence
• establish a long-term strategy to ensure our impact is positive through measurable targets and goals.
To guide us through this process, we have partnered with an independent external Indigenous consultancy, Murawin, which
is certified by Supply Nation – Australia’s largest national directory of Aboriginal and Torres Strait Islander businesses.
Working with Murawin, we have started developing our Reflect Reconciliation Action Plan. This is in line with our FY21
commitment.
We have also undertaken an Acknowledgement of Country workshop to help us understand and recognise that the work
we do is on Indigenous land and that Country underpins everything Temple & Webster does.
Our partnership also extends to developing employee capability to understand Aboriginal and Torres Strait Islander cultures,
experiences, history and how to approach working with Country to ensure mutual benefit. We also aim to develop our cultural
awareness by recognising connections with Country to inform the planning, design and delivery of place-based projects.
FY22 Key Achievements
Our Objectives
We established a RECONCILIATION
ACTION PLAN WORKING GROUP
We will have our REFLECT RECONCILIATION
ACTION PLAN SUBMITTED in H1 FY23
WE DEVELOPED OUR
ACKNOWLEDGEMENT OF COUNTRY
in collaboration with our Indigenous
consultant partner, Murawin
We will publish our ACKNOWLEDGEMENT OF
COUNTRY ACROSS MAJOR COMMUNICATION
CHANNELS in H1 FY23
2424
Temple & Webster Group Ltd Temple & Webster Group Ltd Giving back
Supporting the communities we operate in is part of our DNA. In FY22, we enjoyed another successful year of partnership
with Women’s Community Shelters (‘WCS’) – an organisation that provides community-based emergency accommodation
and support for vulnerable women and children. Our primary contributions this year included providing furniture,
homewares and styling for a new shelter at Revesby, Biyani House. We were also pleased to help fulfill many other
requests for furniture and homewares for the organisation’s shelters across New South Wales.
In June, employees had the opportunity to volunteer at a working bee for WCS in Gosford, where they helped transform
an aged care facility into a residential facility for women aged 55+ who need a home.
We also partnered for the first time with the Black Dog Institute, a not-for-profit organisation for the diagnosis, treatment
and prevention of mood disorders such as anxiety and depression. As part of our partnership, our trade and commercial
division styled and furnished treatment rooms at St Vincent’s Hospital.
Throughout the year, we encouraged employees to help where they could by donating to worthy causes – including
supporting the victims of the New South Wales and Queensland floods and Ukrainian refugee organisations – and matched
their donations. In May, we ran an auction where employees donated their skills and crafts to raise additional money for both
initiatives.
FY22 Key Achievements
Our Objectives
OVER $23,000 DONATED to various
charitable organisations
WE WILL CONTINUE TO DONATE TO
CHARITABLE ORGANISATIONS IN FY23
OVER 700 ITEMS DONATED to WCS
VOLUNTEERED TIME TOWARDS
ONSITE WORKING BEES to help
prepare shelters for WCS
We will CONTINUE OUR SUPPORT OF
WCS in the form of donated products,
other goods, and volunteer time
(working bees, expertise)
2525
Annual Report 2022 Annual Report 2022 Environment, social and governance
continued
Being a good corporate citizen
Integrity
We are committed to the high ethical standards outlined
in our Code of Conduct. We expect our employees to act
honestly and with personal integrity in all their dealings
on behalf of the Company, including in their interactions
with colleagues, business partners, customers and the
community.
Our Code of Conduct is available from
www.templeandwebstergroup.com.au.
Customer data and privacy
As a leading online retailer, our platforms need to be secure
to protect our customer and operational data. To that end,
we align our cyber security practices with Essential Eight
mitigation strategies and use ISO 27001 Information Security
Standard as a framework.
We have dedicated cyber security resources to manage the
implementation of our cyber security roadmap, including
a cyber security officer and operational cyber security
staff. We also engage independent industry experts to
perform audits across our platforms, policies and processes,
including penetration testing, with the goal of continuous
improvement.
Corporate governance
The Board of Directors (‘the Board’) of Temple & Webster
Group Ltd is committed to high standards of governance,
legislative compliance and financial and ethical behaviour.
It is responsible for the overall operation, stewardship and
governance of the Company.
The Board has adopted a framework of corporate
governance principles, policies and practices that are in line
with the ASX Principles and Recommendations to promote
responsible governance.
Our Corporate Governance Statement reports the
Company’s compliance with the fourth edition of the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations and has been approved
by the Board.
The Corporate Governance Statement and further details
about corporate governance policies adopted by the
Company and the Board are available on the Company’s
website, www.templeandwebstergroup.com.au.
2626
Temple & Webster Group Ltd Temple & Webster Group Ltd Directors’ report
The directors present their report, together with the consolidated financial statements, on the consolidated entity (referred
to hereafter as the ‘Group’) consisting of Temple & Webster Group Ltd (referred to hereafter as the ‘Company’ or ‘parent
entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were directors of Temple & Webster Group Ltd during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Stephen Heath
Susan Thomas
Conrad Yiu
Mark Coulter
Belinda Rowe
Principal activities
Temple & Webster is Australia’s largest pure play online retailer of furniture and homewares.
Temple & Webster has over 200,000 products on sale from hundreds of suppliers. The business runs an innovative drop-
shipping model, whereby products are sent directly to customers by suppliers, enabling faster delivery times and reducing
the need to hold inventory, allowing for a larger product range.
The drop-ship range is complemented by a private label range which is sourced directly by Temple & Webster from
overseas suppliers.
The Build by Temple & Webster (www.thebuild.com.au) is a pure play online retailer for home improvement. Sharing the
same mission as its leading furniture and homewares sister site Temple & Webster, The Build helps Australians make their
homes more beautiful and turn home renovators’ visions into reality by providing the biggest and best range, a beautiful
and easy shopping experience, and inspirational content.
Temple & Webster Group’s registered office and principal place of business is Unit 1a, 1-7 Unwins Bridge Road, St Peters,
Sydney, Australia and it is listed on the Australian Securities Exchange under the code TPW.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Operating and financial review
Key operating and financial metrics for the year ended 30 June 2022 include:
• Record revenue result of $426.3m which is up 31% on FY21 and up 142% on FY20 which equates to a 55% 2-year CAGR
• Revenue result was driven by increase in both active customers (up 21% on FY21) and revenue per active customer
(up 6% on FY21)
• Gross margin % in line with last year at 45.2%, despite significant inflationary pressures, which is a testament to the
diversification in the Group’s supply chain and strategic positioning with suppliers
• EBITDA of $16.2m was at the highest end of the Group’s communicated range (of 2-4%) at 3.8%. This result included an
initial investment in the Group’s new site – thebuild.com.au of $1.7m
• The Group’s ability to drive positive cash flows was also on display with an ending cash position of $101.0m which was up
$3.5m on FY21, despite investments into inventory, new HQ office fit-out ($4.2m) and a further investment of USD $1.5m
into the Group’s Israeli artificial intelligence and augmented reality (AI/AR) start-up – Renovai
Please refer to the operational review section and the Group’s FY22 results presentation for further commentary on the
Group’s financial and operational results.
2727
Annual Report 2022 Annual Report 2022 Directors’ report
continued
Key business risks
There are a number of market, financial and operational risks both specific to the Group and externally that could have
an adverse effect on the Group’s future performance. The Group has a risk management framework in place with internal
control systems to identify key business risks and mitigate them to an acceptable level. The material business risks are
summarised below.
Key risk
Description
Continued
growth of retail
e-commerce in
general and growth
in demand may
be affected by
economic factors
New and existing
competitors could
adversely affect
prices and demand
and decrease the
Group’s market
share
Supply chain might
be disrupted
Political, economic
or social instability
While the B2C retail e-commerce market and the online market for furniture and homewares have
been growing there is no guarantee this will continue into the future. The Group is subject to factors
outside its current control including Australia’s outlook for economic growth, cash rate, taxation,
unemployment rate, consumer sentiment, global economic outlook, foreign economic shocks and
building activity. One or more of these factors could cause a slowing or contraction in the forecasted
growth in the market and industry.
The furniture and homewares segment is highly fragmented. Competition can arise from a number of
sources including traditional offline retailers, multi-channel, mono-channel, multi-branded retailers, and
online-only e-commerce competitors. Existing online competitors may strengthen through funding or
industry consolidation, or through financial or operational advantages which allow them to compete
aggressively on pricing. Competition may also come from third-party suppliers establishing their own
online presence as opposed to utilising the Group’s platform. As a result, this may increase the costs
of customer acquisition, lower margins due to pricing pressure and reduce the Group’s market share
in the furniture and homewares segment.
There remains a risk that the spread of COVID-19, or a similar event, has an adverse impact on
the Group’s supply chain. This could occur if the ability to transport products between countries
is disrupted, the Group’s key suppliers are negatively affected or the Group is otherwise unable
to efficiently distribute products to customers. In the event that the supply chain of the Group is
disrupted, this may have a material adverse effect on the Group’s operating performance and earnings.
The Group’s suppliers and service providers are also subject to various risks which could limit their
ability to provide the Group with sufficient, or any, products or services. Some of these risks include
raw material costs, inflation, labour disputes, union activities, boycotts, financial liquidity, product
merchantability, safety issues, natural disasters, disruption in exports, trade restrictions, currency
fluctuations and general economic and political instability (including as a result of pandemics such
as COVID-19). The Group is also exposed to risks related to labour practices, environmental matters,
disruptions to production and ability to supply, and other issues in the foreign jurisdictions where
suppliers and service providers operate. Any of these risks, individually or collectively, could materially
adversely affect the Group’s financial and operational performance.
Performance,
reliability and
security of websites,
databases and
operating systems
The Group’s financial and operational performance could be adversely affected by a system failure
that causes disruption to its websites, or to third-party suppliers of its systems and products.
This could directly damage the reputation and brand of the relevant platform and could reduce
visitors to the Group’s website and directly influence sales to customers. The Group’s databases and
systems are hosted on platforms provided by third-party providers. As a result, the Group is subject
to its own disaster planning contingencies and those of its third parties to deal with events that are
beyond the control of those parties such as natural disasters, infrastructure failures, terrorist attacks
and cyber attacks. A material failure in the systems of a third-party provider is likely to have a material
impact on the systems and operations of the Group’s platforms.
Unauthorised use of
intellectual property
or independent
development of
technology
Substantial parts of the Group’s online platforms, distribution software, applications, data analytics
and customer databases are seen as proprietary information. Unauthorised parties may obtain
or copy, or seek to imitate, all or portions of this intellectual property or independently develop
technology that is similar and may be in breach of proprietary rights. In this instance, the Group may
seek legal actions to remedy the breach of proprietary information. This may incur legal or other
fees and if unsuccessful may have a material adverse effect on the Group’s financial and operational
performance in the future.
28
28
Temple & Webster Group Ltd Temple & Webster Group Ltd Key risk
Description
Laws and
regulations
may change
Key Management
Personnel (‘KMP’)
The Group is subject to, and must comply with, a variety of laws and regulations in the ordinary course
of its business. These laws and regulations include those that relate to fair trading and consumer
protection, product safety, employment, property, taxation (including goods and services taxes and
stamp duty), accounting standards, customs and tariffs. Failure to comply with, or changes to, laws
and regulations may adversely affect the Group, including by increasing its costs either directly or
indirectly (including by increasing the cost to the business of complying with legal requirements).
The Group relies on the expertise, experience and strategic direction provided by its KMP.
These individuals have extensive experience in, and knowledge of, the Group’s business.
Additionally, successful operation of the Group’s business depends on its ability to attract and retain
quality employees. Competition could increase the demand for, and cost of hiring, quality employees.
The Group’s ability to meet its labour needs while controlling costs associated with hiring and training
employees is subject to external factors such as unemployment rates, prevailing wage legislation and
changing demographics.
Significant changes in the state of affairs
During the period, the Group increased its investment in Renovai, Inc; a start-up developing AI/AR interior design tools to
accelerate the Company’s growth after a successful pilot. The additional investments entailed cash considerations totalling
to USD $1,500,000 in exchange for additional shares in the Company, enabling the Group to exercise significant influence
over the investee from the investment date onwards.
The Group’s investment is in alignment with its strategy to innovate its digital offering through 3D and AI/AR generated
tools to help customers navigate the vast range of furniture and homewares to aid engagement and conversion.
The Group also launched The Build by Temple & Webster (www.thebuild.com.au), a new online-only store for home
renovators providing an easier and more convenient way to shop for all things DIY, renovation, and home improvement.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect, the
Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
Likely developments in the operations of the consolidated entity and expected results of those operations are contained
in the Chairperson’s and the CEO’s reports.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Share Options
Unissued shares
As at the date of this report and at the reporting date, there were 5,543,078 unissued ordinary shares under options.
Refer to the remuneration report for further details of the options outstanding for KMP.
2929
Annual Report 2022 Annual Report 2022 Directors’ report
continued
Information on directors
Name:
Title:
Stephen Heath
Independent Non-Executive Director and Chairperson
Qualifications:
Graduate of the Australian Institute of Company Directors.
Experience and
expertise:
Other current
directorships:
Stephen is a specialist in consumer goods brand management with over 25 years of manufacturing/
wholesale distribution and retail experience. Stephen spent 16 years as CEO of some of Australia’s
best-known consumer brands that include Rebel Sport, Godfrey’s and Fantastic Holdings with
operations experience in Australia, New Zealand and Asia. His experience includes working for
both ASX listed and Private Equity owned companies.
Non-executive director of Best & Less Group Holdings Ltd (appointed on 24 June 2021).
Former directorships
(last 3 years):
Chair of Shiro Holdings Limited (appointed on 24 October 2019 and resigned on 2 November 2021).
Chair of Redhill Education Limited (appointed to Board on 1 September 2019, elected as Chair on
1 December 2020 and resigned on 30 October 2021).
Special
responsibilities:
Chair of the Board
Interests in shares:
34,000
Interest in options
over shares:
Interests in
restricted rights:
181,026
1,946
Name:
Title:
Susan Thomas
Independent Non-Executive Director
Qualifications:
Bachelor of Commerce and Bachelor of Law from the University of New South Wales.
Experience and
expertise:
Other current
directorships:
Susan is an experienced company director and audit and risk committee chair. Susan has expertise
in technology and law. Susan founded and was the Managing Director at FlexiPlan Australia, an
investment administration platform sold to MLC.
Director of Fitzroy River Holdings Limited (appointed on 26 November 2012), Director of Nuix Limited
(appointed on 18 November 2020), Director of Cash Converters International Limited (appointed on
1 April 2022) and Maggie Beer Holdings Limited (appointed on 1 July 2022).
Former directorships
(last 3 years):
In February 2020, Fitzroy River Holdings Limited acquired 100% of Royalco Resources Limited
(‘Royalco’). Accordingly, Royalco is no longer a listed entity; however, Susan Thomas is still a director of
Royalco (appointed on 22 February 2017).
Special
responsibilities:
Chair of the Audit and Risk Management Committee and Chair of the Technology Management
Committee
Interests in shares:
Nil
Interests in options
over shares:
181,026
Interests in
restricted rights:
Nil
30
30
Temple & Webster Group Ltd Temple & Webster Group Ltd Information on directors
Name:
Title:
Conrad Yiu
Non-Executive Director
Qualifications:
Bachelor of Commerce from the University of New South Wales and a Master of Business
Administration from the University of Cambridge.
Experience and
expertise:
Conrad is a co-founder of Temple & Webster and joined the Board on its formation in July 2011.
Conrad was Chairperson of the Company until immediately prior to the IPO. Conrad has over 25 years’
commercial and advisory experience with a focus on investing in, acquiring and building high growth
businesses in the consumer and technology sectors. Conrad was previously Director of Corporate
Development within the digital division of Newscorp Australia (formerly News Digital Media), co-founder
and Director of a London-based mobile technology company, a manager at Arthur Andersen and is a
principal of ArdenPoint, an investment firm which he co-founded with Mark Coulter in 2011, the CEO
of Temple & Webster Group Ltd. Conrad is a co-founder and current partner of AS1 Growth Partners,
a private investment firm focused on growth and technology investments in public and private markets.
Other current
directorships:
Non-Executive Director of FiscalNote (NYSE: NOTE) (appointed on 25 October 2020).
Former directorships
(last 3 years):
None
Special
responsibilities:
None
Interests in shares:
2,327,933
Interests in options
over shares:
Interests in
restricted rights:
181,026
5,837
Name:
Title:
Belinda Rowe
Independent Non-Executive Director
Qualifications:
Bachelor of Arts Monash University, AFA (‘Advertising Federation Australia’) Graduate, GAICD
(‘Australian Institute Company Directors’)
Experience and
expertise:
Belinda is a very experienced business leader and successful marketing executive. Belinda’s extensive
professional experience lies in marketing communications, content, media and digital marketing
technologies. Belinda led media and marketing communications businesses for Zenith and Publicis Media
globally based in the UK, and held many senior roles in the marketing industry, including at Telefonica O2
in UK (now Virgin Media O2) leading Brand and Marketing Communications.
Belinda was also Executive Director of Mojo Australia, CEO of ZenithOptimedia Australia and New
Zealand and former Chair of the Advertising Council Australia (previously Advertising Federation of
Australia).
Other current
directorships:
Independent Non-Executive Director of HT&E Limited (appointed on 5 February 2019), 3P Learning
Limited (appointed in September 2021) and Nominated Director of Soprano Design Limited (appointed
on 22 September 2020).
Former listed enitity
directorships
(last 3 years):
None
Special
responsibilities:
Chair of the Nomination and Remuneration Committee
Interests in shares:
3,500
Interests in options
over shares:
Nil
Interests in
restricted rights:
1,946
3131
Annual Report 2022 Annual Report 2022 Directors’ report
continued
Information on directors
Name:
Title:
Mark Coulter
Managing Director
Qualifications:
Bachelor of Law and Bachelor of Science (Biochemistry) from the University of Sydney.
Experience and
expertise:
Mark is a co-founder of Temple & Webster and has been involved as an advisor to the Group since its
inception. Previously, Mark worked at News Limited where he was Director of Strategy for the Digital
Media properties and managed a portfolio of businesses including Moshtix, a digital ticketing company.
Mark was also a solicitor at Gilbert + Tobin and management consultant at McKinsey & Company.
Mark is a co-founder of a logistics and technology company servicing many of Australia’s largest online
and omni-channel retailers.
Other current
directorships:
None
Former directorships
(last 3 years):
None
Special
responsibilities:
Chief Executive Officer
Interests in shares:
1,895,322 ordinary shares
Interests in options
over shares:
5,000,000
Interests in
restricted rights:
Nil
‘Other current directorships’ quoted above are current directorships for listed entities only and exclude directorships of all
other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last three years for listed entities only and
exclude directorships of all other types of entities, unless otherwise stated.
Company secretary
Lisa Jones is Company Secretary of Temple & Webster Group Ltd. Lisa is a corporate lawyer and corporate governance
professional with more than 20 years’ experience in commercial law and corporate affairs, working with both publicly listed
and private companies in Australia and in Europe after starting her career in the corporate practice of Allens. She was
appointed Company Secretary on 30 March 2022 following Michael Egan’s resignation.
Meetings of directors
The number of meetings of the Group’s Board of Directors (‘the Board’) held during the year ended 30 June 2022, and the
number of meetings attended by each director were:
Full Board
Nomination and
Remuneration
Committee
Audit and Risk
Management
Committee
Technology
Management
Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Stephen Heath
Susan Thomas
Conrad Yiu
Belinda Rowe
Mark Coulter
11
12
12
12
12
12
12
12
12
12
5
5
4
5
–
5
5
5
5
–
6
6
6
6
–
6
6
6
6
–
–
2
2
2
2
–
2
2
2
2
Held: represents the number of meetings held during the time the director held office.
32
32
Temple & Webster Group Ltd Temple & Webster Group Ltd Remuneration report audited
Dear shareholders,
On behalf of the Board, it gives me great pleasure to present the FY22 remuneration report.
As Stephen mentioned in his Chair letter, FY22 was certainly another year full of events challenging the team, the strategy
and the business model. Pleasingly, the results presented in the Annual Report show that the Group performed strongly
during periods of both high consumer demand brought on by lockdowns, but also performed strongly from a profit
perspective, during periods of weaker consumer demand, showcasing the Group’s capital light, flexible business model.
These results have all been underpinned by the strength of the Temple & Webster team and culture.
Off the back of a successful FY22, the Board has put in place a remuneration framework that provides a clear line of sight
between the Group’s performance and remuneration outcomes, as well as driving deep alignment between the interests of
directors, employees and shareholders. The Board is confident in the Group’s remuneration structures and firmly believes
the FY22 Remuneration outcomes described below are fair and reasonable, and also achieve the appropriate balance of
rewarding and incentivising our key executives, while also meeting the needs of shareholders.
FY22 Remuneration Outcomes
The key remuneration outcomes for FY22 were:
• There were no changes to the remuneration package for Mr Mark Coulter, Chief Executive Officer (‘CEO’) although, as
noted below, a new package is being finalised by the Board for FY23 and moving forward.
• Both Mr Adam McWhinney, Chief Experience Officer (‘CXO’) and Mr Mark Tayler, Chief Financial officer (‘CFO’) received
an increase in fixed remuneration. These increases were approved by the Board since their prior remuneration was
assessed by independent benchmarking as being below median for comparable roles in the market. The increases also
reflect the growth of the Company and the increased complexity of their roles in a growing business. More detail on the
benchmarking approach regarding Executive KMP is set out in section 3.2 below.
•
In FY22 the CFO’s target Short-Term Variable Remuneration (‘STVR’) target remained at 25%, but his maximum STVR
opportunity increased to 43.75% of his Fixed Remuneration. The CXO was also eligible for a FY22 STVR with the same
target and maximum opportunity, as a percentage of his fixed remuneration, as the CFO. The FY22 STVR outcomes for
the CFO and CXO were 107% and 97% of target respectively. Further details regarding the STVR outcomes are set out
in Section 4.2 of this Report.
• Performance rights were granted in FY20 to selected executives including the CFO (but excluding the CEO and CXO)
under the FY20 Long-Term Variable Remuneration (‘LTVR’) awards. The share price hurdle based on a 30-day VWAP of
Company shares up to and including 30 June 2022 was met and the awards will vest in August 2022. Shares acquired on
vesting of rights under this award will be subject to a two-year holding lock.
• There were no changes to Non-executive Directors’ (‘NED’) base or committee fees in FY22. A new NED Equity Plan was
introduced for Non-executive Directors in FY22 and the majority of Non-executive Directors elected to have a portion
of their Directors’ fees paid in Restricted Rights under the Temple & Webster Group Ltd NED Equity Plan (‘NED Equity
Plan’) described further below in section 6.1.
Looking forward to FY23
• Discussions between the Board and the CEO, regarding a new package for FY23 and beyond, are well advanced. It is
anticipated that this will involve an increase in fixed remuneration and a new award of options designed to incentivise
and retain the CEO to continue to drive the Company over the medium term. Once finalised, details of the new package
will be disclosed to the ASX, any new equity award put to shareholders for approval at the next Annual General Meeting,
and all aspects of the package will be detailed in the FY23 Remuneration Report.
• Neither the CXO nor CFO will receive an increase in fixed remuneration for FY23. There will also be no change in the
structure of their remuneration package or remuneration mix. The only change being considered by the Board is the
addition of an internal financial measure for the LTVR awards, in addition to the existing Indexed Total Shareholder
Return measure.
• There will be no changes to existing Board base or Committee fees for FY23 other than the fees for the new Technology
Management Committee. The Technology Management Committee was established in FY22 with the aim to provide the
Board with focused advice and recommendations regarding the ongoing development and oversight of the Company’s
technology infrastructure. The Chair and Committee fees for this Committee will be recommended by the Nomination
and Remuneration Committee and approved by the Board in FY23.
I hope the additional information and disclosures contained in this year’s remuneration report provide a deeper
understanding of remuneration governance and practices for our shareholders, and that you will agree we have
struck the right balance for a Group that is scaling rapidly in what has been another challenging, yet successful, year.
Belinda Rowe
Chair – Nomination and Remuneration Committee
33
Annual Report 2022 Directors’ report
continued
The Directors of Temple & Webster Group Ltd present the Remuneration Report (‘the Report’) for the Group and its
controlled entities for the year ended 30 June 2022. This Report forms part of the Directors’ Report and has been prepared
in accordance with the Corporations Act 2001 (‘the Act’), Corporations Regulation 2M.3.03, in compliance with AASB 124
Related Party Disclosures, and audited as required by section 208(3C) of the Act.
The Report is divided into the following sections:
Section
Description
1. Persons covered by this
Report
This section provides details of the directors and executives who are subject to the
disclosure requirements of this report, together with the KMP, including roles and
changes in roles.
2. Remuneration overview
This section provides an overview of performance and reward for FY22, including
at a glance summaries.
3. Remuneration framework,
strategy and governance
This section provides details of the elements of the remuneration framework,
including market positioning, changes to fixed remuneration, variable remuneration
principles, and the terms of variable remuneration.
4. FY22 Executive Short-Term
Variable Remuneration
(‘STVR’) Plan and Outcomes
This section outlines the key terms of the FY22 STVR Plan, the key metrics that
apply to Executive KMPs under the STVR Plan and their STVR outcomes.
5. Executive Long-term Variable
Remuneration (‘LTVR’)
This section outlines the key terms of the FY22 LTVR Plan awards and key prior
year equity awards.
6. Non-executive Director
remuneration
7. Statutory tables and
supporting disclosures
This section outlines the Non-executive Director fee policy, aggregate Board fees,
Board and Committee fees. It also sets out details of the new FY22 NED Equity
Plan and any prior years equity awards to Non-executive Director awards.
This section provides the statutory disclosures not addressed by preceding
sections of the Report, including statutory remuneration tables, changes in equity,
KMP service agreements, related party loans/transactions, and the engagement of
external remuneration consultants.
1. Persons covered by this report
This report covers KMP which are defined as those who have the authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the
Group. The below table outlines the KMP of the Group:
Name
Role
Appointed
Non-executive
Directors
Stephen Heath
Independent Board Chair
15 October 2016
Susan Thomas
Independent Non-executive Director
23 February 2016
Conrad Yiu
Non-executive Director
6 October 2015
Belinda Rowe
Independent Non-executive Director
26 February 2021
Executive KMP
Mark Coulter3
Managing Director and Chief
Executive Officer (‘CEO’)
22 April 2016
Adam McWhinney3
Customer Experience Officer (‘CXO’)
1 July 2017
Mark Tayler
Chief Financial Officer (‘CFO’)
18 April 2016
Committee membership1
Nomination
and
Remuneration
Audit
and Risk
Technology2
M
M
M
C
n/a
n/a
n/a
M
C
M
M
n/a
n/a
n/a
n/a
C
M
M
M
n/a
n/a
1. M = Member, C = Chair.
2. The Technology Management committee was established in FY22 with the purpose of assisting the Board in fulfilling its oversight responsibilities to
managing technology and cyber risks. The Chief Information Officer of the Group is also a member of this committee.
3. These individuals are considered co-founders of the Company and referred as ‘founder executives’ in this report.
34
34
Temple & Webster Group Ltd Temple & Webster Group Ltd 2. Remuneration overview
2.1 Executive remuneration structure at a glance
The following diagram outlines the Executive KMP remuneration cycle under the remuneration framework as applicable
to FY22:
The timeline below outlines how remuneration is delivered.
Executive Remuneration Components
Component
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Fixed
Remuneration
Salary and statutory
superannuation
STVR
2022
1 year performance period ▲
• Y1 STVR performance
period commences
• STVR performance
tested
• STVR award delivered
in Q1, Y2 – 100%
cash unless Board
determines otherwise
LTVR
●
2022-2024
• Y1 LTVR performance
period commences
• Performance rights for Y1
LTVR granted in Q1, Y1
• LTVR service tested in Y1
■
• Y1-Y3 LTVR
performance tested
Two-year additional
disposal restriction
Once Rights vest participants have until 15 years
from grant to exercise
Q1, Y1
30 June
Y1
Q1, Y2
30 June
Y2 Q1, Y3
30 June
Y3
Q1, Y4
Performance rights granted
Shares released
Performance tested, and cash award paid
Performance tested, vested performance rights converted to Shares
The Board determined that the LTVRs granted to the CEO in FY19, subject to vesting conditions being met in August 2022,
are sufficient variable remuneration for FY22. The structure outlined above only applied to the CXO, CFO and non-KMP
executives in the current financial year.
The FY22 STVR outcomes for participating Executive KMP are set out in Section 4.2.
3535
Annual Report 2022 Annual Report 2022
Directors’ report
continued
2.2 Group’s performance at a glance
The following outlines the Group’s performance in FY22 in the context of the prior four years, which is intended to assist
in demonstrating the link between performance, value creation for shareholders, and executive reward:
FY end date
30/06/2022
30/06/2021
30/06/2020
30/06/2019
30/06/2018
Normalised
NPAT1
$000s
8,973
12,088
4,560
637
(524)
NPAT1
$000s
11,968
13,954
13,909
3,764
(21)
Share
price2
$000s
Change in
share price
$
Dividends3
$
3.32
10.79
6.31
1.35
0.76
(7.47)
4.48
4.96
0.59
0.58
–
–
–
–
–
Change in
shareholder
wealth4
%
Rolling
3-year
annualised
TSR5
%
(69%)
71%
367%
78%
322%
35%
142%
227%
113%
n/a
1. Normalised Net Profit After Tax (‘Normalised NPAT’) is calculated as NPAT adjusted for any benefits received from the recognition and utilisation
of historical tax losses.
2. Share price at the end of the financial year.
3. Dividends paid during the financial year.
4. Share price change plus dividends on prior financial year.
5. Total shareholder return (‘TSR’) is the sum of share price appreciation and dividends (assumed to be reinvested in shares) during the Measurement Period
expressed as a growth %. While the Group is not paying the dividends, it’s equal to a rolling 3-year annualised share price growth.
3. Remuneration framework, strategy and governance
3.1 Executive remuneration – fixed remuneration, total remuneration package and variable remuneration framework
Total remuneration package (‘TRP’) is intended to be composed of an appropriate mix of remuneration elements including
fixed remuneration, short-term variable remuneration and long-term variable remuneration. This structure applies to all
Executive KMP other than the CEO.
Fixed Remuneration
Short-term variable remuneration
Long-term variable remuneration
Fixed remuneration comprises of
base salary, plus any other fixed
elements such as superannuation,
allowances, benefits, fixed equity
and fringe benefits tax for example.
Fixed remuneration is intended
to be positioned competitively in
the market when assessed against
suitable benchmarks but may vary
with decisions around the mix of
cash, equity and performance-
linked remuneration as negotiated
between the Board and each
incumbent on a case-by-case and
fit-for-purpose basis.
100% of the FY22 STVR will be paid in cash.
Performance is measured over the financial
year, with a combination of financial and non-
financial goals. For Executive KMP, both at
a Group and Individual scorecard level with
threshold, target and stretch levels.
FY22 STVR goals were:
• Group Targets (75%)
• Group revenue growth (60%)
• Customer satisfaction (20%)
Performance rights vesting after
three years.
The LTVR program aligns executives
to shareholder interests through
iTSR targets (indexed relative Total
Shareholder Return) measured over
a three-year measurement period.
Any shares allocated after vesting
are subject to an additional disposal
restriction of two years after the
measurement period.
• Employee engagement (20%)
See more detail in section 5.1.
• Various individual goals tied to role (25%)
See more detail in section 4.1
Variable remuneration is not a ‘bonus’, but a blend of at-risk remuneration (below target) and incentives (above target
and up to stretch). Metrics selected are intended to be linked to the primary drivers of value creation for stakeholders,
and successful implementation of the long-term strategy over both the short- and long-term. Thresholds are intended to
be a near-miss of expectations, while target is intended to be a challenging but realistically achievable objective with a
probability of around 50% to 60%. Stretch, on the other hand, is designed to be exceptionally challenging with a probability
of around 10% to 20%.
36
36
Temple & Webster Group Ltd Temple & Webster Group Ltd 3.2 Benchmarking Approach
Executive KMP remuneration is tested regularly by reference to appropriate independently sourced comparable benchmark
data, and specific advice as may be appropriate from time to time. Benchmark groups are generally designed to be based
on 20 companies from the same market sector (including technology, online retail and other consumer discretionary
companies), with 10 larger companies and 10 smaller companies by market capitalisation. It is expected these companies
face similar operational challenges to those faced by the Group. Further background is also sought by reviewing data
from an industry comparator group of 20 companies, 10 larger and 10 smaller by market capitalisation. Benchmarks may
be adjusted upwards or downwards for variations in role design compared to market benchmark roles, and individual
remuneration may vary by +/– 20% compared to the policy midpoint, to reflect individual factors such as experience,
qualifications and performance.
During FY22, both the CFO and CXO received Fixed Remuneration increases. The Board considered this appropriate as
these roles were benchmarked by an external consultant with both Fixed Remuneration and Total Remuneration Package
(‘TRP’) assessed at below the median against the comparator groups. The increases also reflect the continued expansion
of the Company and complexity of these roles. The Board will continue to monitor market positioning to ensure that
appropriate talent can be attracted, retained and aligned to the strategic needs of the business. More detail on the TRP is
set out in section 7.1 below.
3.3 Remuneration governance framework
The Board takes an active role in the governance and oversight of the Group’s remuneration policies and practices.
Approval of certain key remuneration practices is reserved for the Board, including appointing the CEO, and monitoring
their performance and other key senior executives. In addition, the Board has final approval of the Company’s remuneration
framework, including approving remuneration of the CEO and the remuneration policy and succession plans for the CEO.
However, the Board is assisted by the Nomination and Remuneration Committee to assist the Board in fulfilling its corporate
governance and oversight responsibilities in terms of the remuneration structures, processes and annual remuneration cycle
of the Board and its senior executives, including all Executive KMP, as well as Company culture and employee engagement.
The Nomination and Remuneration Committee has a formal Charter which outlines the roles and responsibilities of the
Committee. This is available on the Group website. The Committee’s responsibilities include:
• providing advice and recommendations to the Board with respect to the appointment and removal of Directors and
senior executives;
• providing the Board with advice and recommendations regarding executive and senior executive remuneration policy;
•
reviewing and providing recommendations to the Board with respect to the remuneration packages of senior executives
and executive directors;
• providing advice to the Board with respect to Non-executive Directors’ remuneration;
•
•
reviewing and providing recommendations to the Board with respect to incentive schemes; and
reviewing and providing recommendations to the Board on the Company’s remuneration, recruitment, retention
and termination policies.
The Company has a Securities Dealing Policy which outlines under what circumstances and when trading in the Group’s
securities by KMP and other nominated employees may be permitted or prohibited. This is available on the Group website.
The Company also has a Diversity Policy, which supports the Board and management in making sustainable and appropriate
decisions around hiring, career development and remuneration.
External remuneration consultants (’ERC’)
External Remuneration Consultant Engagement Policy is intended to ensure the independence of any recommendation
received regarding KMP remuneration and supports the Board’s published statements regarding such recommendations.
In addition to the requirements outlined in the Corporations Act, it requires the external remuneration consultant notify
the Board if management contacts the external remuneration consultant on remuneration matters outside of interactions
approved or supervised by the Board, such as the provision of factual information for benchmarking purposes.
3737
Annual Report 2022 Annual Report 2022 Directors’ report
continued
During FY22, the Board engaged external remuneration consultants to provide KMP remuneration recommendations and
other services as outlined below:
Name
Godfrey
Remuneration
Group Pty Ltd
Board Assessment of
Independence
Rationale for Board
Assessment
Services
Fees (inc. GST)
$
The consultant
provided statements
that they viewed the
advice they gave as
being independent
from undue influence,
which the Board
agrees with.
The Board is of
the view that the
recommendations
received were
independent and free
from undue influence
of any KMP to whom
the recommendations
related, because the
ERC complied with
the Group’s policy for
engaging ERCs.
Modelling and other
remuneration advice
and analysis
Benchmarking and
recommendations
regarding executive
remuneration strategy,
quantum and structure
16,456
18,700
4. FY22 Executive STVR Plan and outcomes
4.1 FY22 STVR Plan
A description of the STVR structure applicable for FY22 is set out below.
Purpose
Measurement
period
Opportunity
To provide at-risk remuneration and incentives that reward executives for performance against
annual objectives set by the Board at the beginning of the financial year. Objectives selected
were designed to support long-term value creation for shareholders, and link to the long-term
strategy on an annual basis.
The financial year of the Group ending 30 June 2022.
The target value was 25% of Fixed Remuneration, with a maximum stretch target of 43.75% of
Fixed Remuneration (Individual Targets are capped at 100% of target and Group Targets have a
200% stretch potential).
Financial gateway
Before any payment is made under the STVR Plan, a 2% EBITDA margin gateway must be met.
Outcome metrics
and weightings
The STVR was dependent on meeting Group and individual performance objectives.
For FY22, the metrics were as follows:
Group Targets – weighted at 75% of target opportunity. These Group Targets include:
•
revenue growth – 60% weighting;
• customer satisfaction – 20% weighting; and
• employee engagement – 20% weighting.
Individual Targets - weighted at 25% of target opportunity. The CXO and CFO also have four
to five Individual targets tailored to their role.
These metrics were selected because they are viewed by the Board as the primary drivers
of value creation for the business in FY22.
Settlement
Awards are determined following auditing of accounts after the end of the financial year.
The Board has discretion to determine whether the STVR award is settled in cash or in equity
interests such as rights.
The Board elected to settle the FY22 STVR in cash.
38
38
Temple & Webster Group Ltd Temple & Webster Group Ltd Malus and
clawback
The STVR is currently not subject to any malus or clawback clauses or policies, however, this may
be reviewed in the next financial year.
Board discretions
The Board has discretion to modify the awards payable to participants regardless of any
performance outcome or gate, to ensure that outcomes are appropriate to the circumstances
that prevailed over the Measurement period.
Corporate actions
The Board has discretion to determine the treatment of unpaid STVR in the case of major
corporate actions such as a change in control, delisting, major return of capital or demerger.
4.2 Executive KMP STVR plan - objectives and outcomes
All Executive KMP aside from the CEO participated in the STVR Plan in FY22. In FY22 the 2% EBITDA margin gate was met
which allowed bonuses to be paid, subject to revenue growth and individual targets achievement.
Metric/Measure
Weight
Performance/Comment
Revenue growth exceeding market growth
60%
Group Targets (75% of total opportunity)
This measure tracks TPW’s growth relative to
online sales growth, which is a measurement of
growth in market share which is a driver of share
price growth.
Revenue growth was strong in FY22. This performance
reflects the Group’s revenue is growing significantly
quicker than the average of the online market1 over the
year.
Customer satisfaction
20%
Customer experience and satisfaction are critical
to the success of the Group. This measure tracks
customer satisfaction using Net Promoter Score
(‘NPS’) scoring, with last year’s NPS as the
benchmark.
Employee engagement
20%
The Group’s employees are one of its key assets
and primary drivers of success. It is vitally
important they are engaged as measured by
Industry Employee Engagement Benchmarks.
In FY22 this hurdle was not achieved. Despite a strong
NPS performance of just under 60%, the Company set
a challenging NPS threshold metric, reflecting the high
standards required in the Company when measuring
customer satisfaction. Despite coming just under the
threshold, the Board determined that the NPS score
achieved was not sufficient in FY22 to pay out any
portion of this measure.
The FY22 result was 12% above the comparative
group (the Company measures itself against other
technology companies who typically have high employee
engagement) which demonstrates the extremely high
level of employee engagement across the employee base.
Individual Targets (25% of total opportunity)
CXO’s personal targets include: implementation
of key projects focused on customer care,
inspirational content and product quality,
as well as corporate and social responsibility goals.
CFO’s personal targets include: inventory and
cost management goals, governance and growth
initiatives and implementation of key projects.
The CXO achieved a 50% score against all of his
personal targets. This indicates the stretch nature of
these KPIs given the achievements made over the year.
Key successes were maintaining quality ratings in the
business, strong achievements in the areas of Corporate
Social Responsibility and solid progress on key projects.
The CFO achieved a 89% score against his personal
targets. Key achievements included achieving key cost
savings plans, the implementation of key strategic and
governance initiatives and inventory management targets
to budget.
1. As measured by the NAB Online Sales Index (Domestic Homewares and Appliances).
3939
Annual Report 2022 Annual Report 2022
Directors’ report
continued
The table below sets out the actual STVR outcomes as a percentage of their maximum STVR opportunity for FY22
and FY21.
Executive KMP1
Adam McWhinney
Mark Tayler
FY22
55.6%
61.2%
FY212
n/a
70%
1. The CEO did not participate in the STVR Plan in either FY21 or FY22.
2. The CXO did not participate in the STVR Plan in FY21.
The Board views the outcomes of remuneration for FY22 performance as appropriately aligned, given the strong Group and
individual performance against annual targets, and progress towards strategic growth objectives made by the executive
team, despite challenging economic circumstances.
5. Executive long-term variable remuneration plans and outcomes
5.1 Executive long-term variable remuneration plan
A description of the LTVR awards granted in FY22 to Executive KMP under the Temple & Webster Group Ltd Rights Plan
(‘the Plan’) is set out below.
Purpose
Measurement
period
Opportunity
Instrument
To provide at-risk remuneration and incentives that reward executives for performance against
long-term value creation objectives set by the Board at the beginning of the financial year and to
align the interests of executives with the interests of shareholders.
3 years from 1 July 2021 to 30 June 2024.
The target value is 25% of Fixed Remuneration, with a maximum stretch of double the target, or
50% of Fixed Remuneration.
The LTVR is granted under the rights plan which allows for performance rights, service rights
or restricted rights, each of which may be constructed as a share appreciation right (‘SAR’),
which is equivalent to an Option, when an exercise price is specified. For FY22, performance
rights were used for the purposes of the LTVR. Rights are not subject to dividend or voting
entitlements.
Price
The price is nil because it forms part of the remuneration of the participant.
Exercise price
The exercise price is nil.
Allocation
method
The grant number is determined by dividing the stretch LTVR value by the 30-day volume
weighted average price (‘VWAP’) following the release of unaudited financial results for FY21.
40
40
Temple & Webster Group Ltd Temple & Webster Group Ltd Performance
metrics and
weightings
FY22 granted performance rights have an indexed Total Shareholder Return (‘iTSR’) vesting
condition (100% weighting). The vesting of such performance rights will be determined by
comparing the Group’s TSR over the Measurement Period with the TSR of the ASX 300
Industrials Total Return Index, according to the following vesting scale:
Performance level
Stretch
Target
Threshold
Below threshold
TSR of the Group vs TSR of the
ASX 300 Industrials Total Return Index
Index TSR + 10% TSR p.a.
Index TSR + 5% TSR p.a.
Index TSR
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