Good morning, everybody. Welcome to the 2025 Annual General Meeting of Temple & Webster Group Ltd. My name is Stephen Heath, and I'm the Chair of the company. It's 11:00 A.M. We have a quorum present, and I therefore declare the meeting open. Thank you for your attendance today. In accordance with our usual practices, cameras and recording devices are not to be used during the meeting. I'd also like to point out the fire exits in the event of an emergency or evacuation. These are located through the door where you entered, through the door behind me, through the door over to my right, and the door to the left. There's plenty of access. Before we begin, Temple & Webster Group would like to acknowledge the traditional owners and custodians of country throughout Australia.
We recognize 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 to all Aboriginal and Torres Strait Islander peoples. I'd like to start by introducing the members of the board and the Company Secretary. I'm joined in person by Managing Director and CEO Mark Coulter, Directors Conrad Yu, Belinda Rowe, and Michael Malone, and Company Secretary Lisa Jones. Our other Director, Melinda Snowden, is interstate today and is joining online. I'd also like to welcome the company's CFO, Cameron Barnsley, and Co-founder and Chief Experience Officer, Adam McMacWinney, along with other Temple & Webster executives here today.
The company's auditor, Rachel Rudman from EY, is in attendance and will be available to address any questions you may have about the audit of the financial statements later in the meeting. I also welcome representatives from MUFG Corporate Markets, Temple & Webster's share registry provider, who will conduct the final voting poll. The purpose of today's meeting is to do with the formal businesses set out in the Notice of Annual General Meeting. I'll deliver the Chairman's address, and then our CEO, Mark Coulter, will deliver the Group's Financial and Operational Performance for FY25, along with a trading update for FY26 year to date. We'll then consider the resolutions set out in the Notice of Meeting. I will outline voting arrangements ahead of that section. There will be an opportunity for shareholders to ask questions during the formal items of business as they relate to the resolution being considered.
Okay, let's make a start with my address. As reported in August, FY25 was another strong year for Temple & Webster. We delivered AUD 601 million in Revenue, up 21% on a year-on-year basis. This result reflects both the strength of our customer proposition and the adaptability of our business model. We were also pleased to have increased our share of the total furniture and homewares market in Australia from 2.3% to 2.7% during the year, bringing us another step closer to our goal of becoming Australia's Largest Furniture and Homewares Retailer. Our EBITDA for the financial year was AUD 18.8 million, an increase of 43% on the prior financial year. This represents an EBITDA margin of 3.1%, up 50 basis points from FY24, and was slightly above the top end of our guidance range of 1%-3%.
This is a result driven by continued fixed cost leverage and disciplined execution across the business. We ended the year with a cash balance of AUD 144 million, a 35% increase on FY24 with no debt. This robust capital position enables us to move quickly and opportunistically when growth opportunities arise, whilst providing optionality around capital management initiatives such as our on-market share buyback program, which is in place to enhance shareholder returns in the absence of more accretive opportunities. Our performance against our strategic goals continues to be underpinned by strong execution. Mark will speak to our progress in more detail, but I'll touch on a few highlights. Temple & Webster's unprompted brand awareness continued to edge higher, supported by increased brand marketing, the diversification of our channel mix, and ongoing optimization of marketing spend.
We believe growing brand awareness is a critical next step towards becoming the number one brand in our category. Our continued investment in private label and exclusive dropship products is deepening our competitive moat, with these products reaching 45% of total revenue in FY25, up from 43% in the prior year. We also expanded our use of AI-based technologies across the business, leading to improvements in customer service efficiency, continued optimization of shipping prices, and more personalized customer experiences that are driving conversion uplifts. Our focus on cost discipline across the business delivered another 70 basis point improvement in fixed costs as a percentage of total revenue. This reinforces our ability to maintain a value-led disruptive proposition for our customers. Finally, our home improvement business continues to outperform, growing revenue by 43% in FY25 and helping us to unlock another AUD 18 billion in addressable market that remains predominantly offline.
Together, these achievements highlight Temple & Webster's ability to deliver strong, profitable growth while strengthening the foundations of our business. With a clear strategy, strong balance sheet, and disciplined execution, we are well positioned to continue building long-term value for our shareholders. In addition to the financial and strategic highlights, we also updated our corporate governance policies to further align with best practice standards. The board charter was revised to provide greater clarity on the roles and responsibilities of Directors, expectations for engagement, and the process for assessing board performance. The price-sensitive information policy was updated to more clearly articulate the respective responsibilities of the board and executive management in identifying, assessing, and disclosing material information. These enhancements reinforce our commitment to transparency, accountability, and strong governance.
Regarding matters of key management personnel, Cameron Barnsley joined as Chief Financial Officer in September last year, and we're now also pleased to announce the appointment of Michael Malone as a non-executive director, which was effective from October 2025. We welcome Michael to Temple & Webster, and we look forward to welcoming him, working with him, sorry. In closing, FY25 serves as another proof point of Temple & Webster's innovating business model, disciplined execution, and a significant opportunity for us. Despite a challenging macroeconomic backdrop, we have continued to grow market share, improve margins, and strengthen our capital position. This performance underscores both the resilience and scalability of our business and the substantial growth runway that lies ahead. On behalf of the board, I'd like to thank Mark Coulter and the entire Temple & Webster team for the dedication, focus, and hard work throughout the year.
To our shareholders, thank you for your ongoing confidence and support in what we're building together at Temple & Webster. I'll now hand over to Mark for his address.
Thank you, Stephen, and good morning, everyone. We are proud to deliver another year of strong operational and financial results. While macro headwinds persisted, almost 1.3 million customers turned to Temple & Webster to furnish their homes, a reflection of our extensive range, beautiful products, and strong value proposition, which continues to resonate. This translated into nearly 1.8 million orders, with repeat customers representing 59% of total orders, up from 57% last year. We closed the year, as Stephen said, with AUD 600 million in revenue, up 21% year-on-year, and AUD 18.8 million in EBITDA. I think on days like today, it's important to remind ourselves what we're doing. Temple & Webster is pursuing a AUD 37 billion market opportunity across furniture, homewares, and home improvement in Australia. Our core focus remains the AUD 19 billion furniture and homewares category, which continues to offer considerable runway for growth.
The AUD 18 billion home improvement market, though newer for us, represents an equally compelling opportunity. Both categories share similar structural dynamics that are favorable for Temple & Webster. They are largely unbranded, highly fragmented, and dominated by offline players, with less flexible business models. Online penetration also remains comparatively low, with furniture and homewares at around 20% in Australia, well below other retail sectors' international peers, such as the U.S., which you can see on screen, is already at 35%, and the U.K. at 29%. The home improvement category lags even further, with only 5%-10% of revenue currently online. Given these dynamics and our belief that the industry will continue its shift online, we are exceptionally well positioned to capture a greater share of this AUD 37 billion market. Our capital-light business model enables us to deliver a truly differentiated proposition centered around price and range convenience.
We also believe in the potential for the business to resonate with customers outside Australia. That is why we took our first step abroad, entering the New Zealand market in October. The New Zealand furniture, homewares, and home improvement market is greater than about AUD 3 billion and shares many of the same characteristics that underpinned our success in Australia: low online penetration, a fragmented competitive landscape, and a clear opportunity for a retailer like Temple & Webster. We are taking a measured test-and-learn approach and aim to expand our presence over several phases. Importantly, this launch will provide valuable insights to help refine our approach in future international expansion. Encouragingly, we are off to a great start in New Zealand. Revenue since launch has surpassed six figures, conversion has steadily improved, total orders are exceeding expectations, and average order value is keeping pace with levels in Australia.
Furthermore, customers are already making repeat purchases, in some cases even before receiving their initial orders. To support our ability to scale quickly, we expect AUD 2 million-AUD 3 million of incremental costs for FY26 relating to New Zealand, with revenue expected to ramp more materially from H2 FY26 and into FY27. Turning now to our strategic goals, we have made meaningful progress throughout the year across each of our five key priorities. Temple & Webster's brand continues to strengthen, fueled by expanded marketing channels and ongoing data-led investment. Over the last two years, we have invested AUD 22 million in brand marketing to test new channels and optimize performance, and the results are encouraging. Unprompted brand awareness reached 9% in FY25, and our share of branded search grew from 4.3% to 4.9%. That said, there is still significant upside, with category leaders near 40% awareness today.
To build on our momentum and drive more efficient brand returns, we have shifted from short experimental bursts to an always-on strategy guided by detailed media mix modelling. Private label and exclusive dropship penetration also grew strongly, reaching 45% of total revenue in FY25. During the year, we launched over 900 proprietary designs, and nearly 80% of our top 500 selling products were exclusive to Temple & Webster. To help accelerate growth even further, we've opened a dedicated sourcing office in Shanghai, enabling faster speed to market for new private label products. Our investments in AI, data, and technology are delivering measurable benefits, both for our customers and for our operations. For example, we are experimenting with personalised website experiences and targeted marketing powered by graph data science, with early results delivering unprecedented versions. AI is also driving business. I think maybe microphone's on. We have an intruder with me.
Cyber attack. AI has also driven business, most notably in customer support, where costs as a percentage of revenue have fallen by more than 50% across FY23. Maybe it's the AI ghost in the machine. As the business continues to scale, we're also realizing greater operating leverage. Fixed costs fell to 10.6% of revenue in FY25, down from 11.3% the year prior. The scalability allows us to keep delivering on our value proposition, offering customers great prices while growing profitably. Finally, in our adjacent growth areas, home improvement continued in strong momentum, with revenue up 43% year-on-year to AUD 42 million in FY25. Growth was driven by both new and repeat customers as awareness of our offering increased. Our Trade & Commercial division services also grew 9% year-on-year, with a recent uplift in forward orders expected to drive stronger Revenue Growth in FY26.
Turning to our trading update, we continue to make significant market share gains, with revenue from 1 July to 20 November up 18% on the PCP. Key leading indicators and customer cohort performance are trending positively, with average order values up 3% versus the PCP, active customers at record levels, and the proportion of orders from repeat customers continuing to increase. Our home improvement business continues to outperform, with growth continuing to track at more than 40% versus the PCP. Our Trade & Commercial business is also performing strongly, accelerating to 23% growth year-to-date, with significant momentum in sizable orders across the holiday and student accommodation sectors. In terms of outlook, our focus remains on delivering revenue growth within our target range of FY26, and we remain on track to achieve a midterm target of AUD 1 billion in Annual Revenue.
We affirm our EBITDA margin guidance of 3%-5%, and with a cash position of over AUD 150 million, our on-market share buyback program is in place and ready to be deployed. Finally, I would like to thank our Temple & Webster Team. Your hard work and dedication underpin everything we do, and I look forward to all that we achieve together. We will achieve it together in the years to come. Thank you also to our customers, our suppliers, partners, and of course, shareholders. We value your ongoing support and trust to help create our vision of making the world more beautiful one room at a time. Thank you.
Thank you, Mark. We'll now welcome questions or comments from shareholders holding a yellow or blue card in relation to my report and the CEO's report. If you do have questions before asking those questions, please state your name and whether you are a shareholder or proxy, and state the name of the shareholder you represent. No questions? Okay. Thank you. Okay, on that basis, we'll move to the formal items. Before we do that, I'd like to outline the voting arrangements. As set out in the notice of meeting, all resolutions will be determined by poll. For those shareholders and proxies here in person who have not already cast a direct vote or proxy before today, you have been given a yellow voting card, which you should complete to vote on each of the resolutions in the notice of meeting.
If you have already voted, you'll be given a blue card, a non-voting admission card. Red cards have been assigned to visitors other than shareholders and do not carry rights to speak and ask questions when the business of the meeting is being conducted, nor the right to vote. Details of proxy and direct votes for each resolution will be shown on the screens at the conclusion of the discussion. If you have a question, please hold up either your yellow or blue admission card and state your name prior to the question being asked. Please direct any questions that you may have to me as the chairman. I'll either deal with that question personally or ask someone who's better placed to respond. We'll do our best to answer all relevant questions raised.
As Chairman of the meeting, it is my intention to cast any Undirected Proxy Votes in favor of all resolutions. I will declare the proxies held by me at the start of each resolution by showing them on the screen. As you'll see from the notice of meeting, the Board recommended voting by direct vote for all resolutions. Direct voting enables shareholders to vote without attending the meeting or appointing a proxy. Voting on all items of business will be conducted by a poll. The vote by poll will be conducted by Link, and I now declare the poll open for each of the resolutions in the notice of meeting. Andrew Martin from our share registry, MUFG, will conduct the poll as returning officer. Your voting cards will be collected by Andrew at the conclusion of the formal business.
If you need to leave early, please complete your voting card and present it to a staff member at the doors before you exit. A copy of the notice of meeting and explanatory statement containing the resolutions to be considered today were provided to the shareholders last month. I will take that notice of meeting as read. I now move to the formal agenda of the meeting. The first item of business is to receive and consider the annual financial report of the company for the financial year ended 30th of June 2025, together with the declaration of the directors, the directors' report, the remuneration report, and the auditor's report. The reports are contained in the annual report, which was released to the ASX on the 30th of September 2025. I'll take the reports as read and now formally lay them before the meeting.
Shareholders were invited to submit questions in advance of today's meeting to our auditor on the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by Temple & Webster relating to the preparation of the financial statements, and the independence of the auditor in conducting the audit. Are there any questions on the annual report or audit opinion for either the auditor or the board? No? There is no requirement for a vote on item one, so I now move to the items of business which require a formal resolution. Resolution 1 is an advisory non-binding resolution required by the Corporations Act in relation to the adoption of the remuneration report, which forms part of Temple & Webster's Annual Report released on the 30th of September 2025.
The remuneration report is set out on pages 69 to 90 of the annual report and provides information concerning executive and director remuneration. The resolution is displayed on the screens. I'll now be happy to answer any questions or receive any comments you may have on the remuneration report. No questions? Details of the direct and proxy votes that have been received are displayed on the screen. Resolution number 2 concerns a re-election of Conrad Yu. The resolution being considered is displayed on the screens. Conrad's credentials have been outlined in the explanatory statement attached to the notice of meeting and are outlined in the annual report. Conrad is a co-founder of the company, is the Deputy Chair, and a member of the Audit and Risk Committee and Nominations and Remuneration Committee. Would anyone like to ask any questions or express a view on this item? No?
Details of the direct and proxy votes have been received and displayed on the screen. It's an overwhelming vote for Conrad. Congratulations on your re-election. Resolution 3 concerns the election of Mr. Michael Malone. Michael was appointed as the director of the company by the board on October 1, 2025, after an extensive recruitment process, and now seeks election. He is a member of the Audit and Risk Committee and Nomination and Remuneration Committee. The resolution being considered is displayed on the screens. Michael's credentials have been outlined in the explanatory statement to the notice of meeting and an outline in the annual report. Given Michael's new, I will ask Michael to come up and introduce yourself and say a few words.
Thank you, Chairman, directors, and fellow shareholders. It gives me great pleasure to present for election as a director of Temple & Webster. I joined the board in September this year, October, and serve as a member of the Audit and Risk Committee, as well as a member of the Nominations and Remuneration Committee. I grew up in a family business in Perth and studied Mathematics and Computer Science at UWA. I co-founded iiNet in 1993 and listed on the ASX in 1999. I have been an ASX public company director for nearly 30 years. At least in the Telecommunications Industry, I think iiNet became an Iconic Brand associated with innovation and putting customers first. Since leaving iiNet, I Co-founded a Cybersecurity firm and have invested and worked in many rapidly scaling technology companies such as Airtasker, AutoCell, and HealthEngine.
I've served on the boards of Seven West Media, Superloop, NBN Co, and WiseTech, as well as Autism West and the State Training Board. I believe I can complement the board's overall skills with my specific interest in technology, cybersecurity, and consumer marketing, and I particularly enjoy working with founder-led companies like Temple & Webster. I've been a happy customer of your company, so I'm surprised and delighted to be here as a board member. Your company has such a talented and committed workforce with a passion for creativity, style, and outstanding customer experience. I'm also proud to be part of a well-functioning board, and I want to thank my fellow board members for their trust in inviting me to join them. It's with great enthusiasm that I put myself forward for election as a Director, and I would be honored to serve you, our shareholders, as one of your Directors.
Thank you.
Thank you, Michael. Would anyone like to ask any questions on this item? No? Details of the direct and proxy votes that have been received are displayed on the screen. Another overwhelming result for. Congratulations, Michael. By now, that concludes all of the items. I now ask Shareholders, Proxy Holders, and Corporate representatives holding yellow voting cards to complete the card, if you have not already done so, to finalize your poll votes. Andrew, would Andrew of MUFG please come forward to collect the voting cards? Andrew will forward these cards to the share registry for the completion of the poll. Please put your voting card in the collection boxes as I brought around. If you do not have a pen or pencil, please raise your hand, and a staff member will pass you one. Thank you.
Does anyone who feels they're entitled to vote actually have a card and has done so? If you haven't got a card and you think you should have one, also raise your hand. No? All good? All voting cards collected. Thank you. I now declare the polls on the resolutions closed. MUFG will now count the votes, and the results will be available on the ASX platform later today. As I mentioned, and as you can see from the numbers, all resolutions will pass by a majority. Are there any general questions from the floor?
I looked this morning. The share price for Temple & Webster has dropped by about 28% this morning. Are you able to comment on that at all or not?
I think I might ask Mark to express his view. It's a bit early days at the moment. I think there's, you know, in the share price has certainly been expectation built into the share price, and we've come across a time where I think the market's a little bit soft at the moment. There's a little bit of competitive pressure, and the market's trying to form a view of what that means for the future. It's very early days for us, but yes, it was quite a substantial adjustment to the share price. I will ask Mark to comment on his views.
Yeah, I think the first thing I'd say is, obviously, of the history of Temple & Webster, we've seen the roller coaster highs and lows. I think the thing you have to remember is that it's still very early days for online furniture and homewares. You know, we're still talking about markets, only 20% of the total market. You know, we're only 2.7% market share. I think these, you know, analysts are doing forecasts, and consensus is picked around a certain number. There's always going to be points in the trend on the trend line which are below and above that trend line. That's how trend lines work. Over a course of our history, we've had, you know, points which are significantly above the trend line and significantly below the trend line. The trend line is still maintained that we still keep growing.
We're, you know, on track to be a $700 million plus business. I think you have to remember that, that it is going to be, you know, some periods of, and that depends on competition. It depends on people going back to stores because the stores are really heavily promoting at the moment, which they all are. There's a lot of factors going in. The first principles, which is what I tried to do in the speech, is go back to and go, it's a big market. You know, you add in home improvement, we're talking about $40 billion. You know, you just have to believe that we catch up to the U.S. and U.K., and we will double by doing nothing other than holding on to our current market share.
We are the market leader with more resources, more, you know, investment, more capability, bigger ranges, better sourcing team, now sourcing office in China. All these things will leverage and make sure that we can grow our market share. You add that market share, and it's just a matter of time. Now, I can't promise every point is going to be above the trend line because that means the trend line will be wrong, you know, but what I can promise is that, you know, we're in the best position that we've ever been in.
Good question. Thanks for the question. Very relevant, obviously, today. Any other questions? No more questions? Okay. All righty. Given there's no more questions, I'd like to thank you for attending today. In addition, I would like to thank all our shareholders and our customers, the executive leadership team, and the staff of Temple & Webster for another outstanding year, the company advisors and auditors, and of course, MUFG. Ladies and gentlemen, that concludes the business for today. I now declare the meeting closed and invite you to join us for some morning tea, which is over at the kitchen. Thank you.