Annual Report and Accounts 2021
Never ordinary.
Rapid growth, with financial discipline
Financial highlights 2021
+ 38% gross sales growth to £434m
1
+ 50% revenue growth to £372m
+ £56m closing deferred revenue to dispatch
in 2022
+ 1.3m active customers, AOV
2
+8%
1
, repeat
order mix growth to 44%
1
+ gross margin (694)bps
3
due to
freight cost inflation, with gross margin
excluding freight
1
+193bps
4
+ loss before tax of (£31.4m)
+ adjusted EBITDA (£14.3m), with cost
leverage across all operating cost lines, but
adversely affected by industry wide global
freight inflation and supply chain disruption
1
+ closing net cash position of £107m
1
at 31 December 2021
Contents
1 Who we are
2 At a glance
Statements
16 Chair’s statement
20 ChiefExecutiveOfficer'sstatement
How we manage the business
28 Our market
36 Our strategy and KPIs
42 Our business model
44 Stakeholder engagement
54 Sustainability
64 Financial review
75 Risk management
1. Please refer to pages 72-73 of this Annual Report for full details of these
alternative performance measures (APMs)
2. Average order value, measuring the average amount spent each time a
customer places an order
3. Basis points, equal to 0.01%
4 Pleaserefertothe'GrossProfit'tableonpage68forafurtherbreakdown
of gross margin.
Governancereport
86 Chair’s introduction to governance
90 CorporateGovernanceStatement
92 Board of Directors
102 Nomination Committee Report
107 Audit and Risk Committee Report
114 Remuneration Committee Report
120 Remuneration at a glance
122 Annual Report on Remuneration
132 MADE Directors’ Remuneration Policy
148 Directors’ Report
153 Statement of Directors’ responsibilities
Who we are
We’re makers of original homes. On a mission to
make exceptional design accessible to all.
We’re contemporary, agile and relevant.
Daring, playful and unexpected.
Obsessive about colour, material, detail and function.
We embrace the unique, and reject the generic.
Elevate the ordinary, and celebrate the statement.
Our exclusive product edit reflects these values,
and makes homes feel as personal and original as
the people living inside.
We’re a rich design ecosystem. The destination to
complete your dream home. A platform that supports
creation and curation; featuring the best in up-and-
coming and world-renowned talent, independent brands,
and pieces by our own in-house team.
Products designed by people – for people – to help them
express themselves.
1 MADE.COM Group Plc
Annual Report and Accounts
At a glance
One brand: same look and feel, same product range, same customer service excellence
150+ designers
9,500+ curated SKUs
1
Eightmarkets:UK,Germany,France,Netherlands,Austria,Spain,SwitzerlandandBelgium
1
150+
9,500+
8
1 Stock keeping unit, a unique number assigned to each product
2 MADE.COM Group Plc
Annual Report and Accounts 2021
Rapidly growing our active customers
2
1.3m
An ever-strengthening repeat order mix +263bps
44%
MADE gross sales growth
+38%
200+ globally distributed suppliers
200+
2 As at 31 December 2021
At a glance
continued
3 MADE.COM Group Plc
Annual Report and Accounts 2021
Q
Never ordinary.
We have reached scale with limited
investment.
We are growing rapidly.
Strong structural tailwinds support
our long-term growth ambition.
We’ve achieved a lot but now it’s
time to change gear.
At a glance
continued
4 MADE.COM Group Plc
Annual Report and Accounts 2021
Q
How can we make high-end
design accessible to everyone?
At a glance
continued
5 MADE.COM Group Plc
Annual Report and Accounts
Byconnectingsomeoftheworld'sbestdesignerswithcustomers.
At a glance
continued
6 MADE.COM Group Plc
Annual Report and Accounts 2021
At a glance
continued
7 MADE.COM Group Plc
Annual Report and Accounts
At a glance
continued
8 MADE.COM Group Plc
Annual Report and Accounts 2021
At a glance
continued
9 MADE.COM Group Plc
Annual Report and Accounts
By having direct relationships throughout our supply chain.
At a glance
continued
10 MADE.COM Group Plc
Annual Report and Accounts
With small batch production based on a test and
learn approach. Manufacturing driven by demand and
underpinned by data.
At a glance
continued
11 MADE.COM Group Plc
Annual Report and Accounts
At a glance
continued
12 MADE.COM Group Plc
Annual Report and Accounts 2021
“ With our distinctive brand and our unique product
proposition, MADE is in a formidable position to
achieve our ambition to become the leading home
destination for the digital generation.”
Nicola Thompson
ChiefExecutiveOfficer
At a glance
continued
13 MADE.COM Group Plc
Annual Report and Accounts 2021
14 MADE.COM Group Plc
Annual Report and Accounts
Statements:
16 Chair’s statement
20 Chief Executive Officer's statement
How we manage the business:
28 Our market
36 Our strategy and KPIs
42 Our business model
44 Stakeholder engagement
54 Sustainability
64 Financial review
75 Risk management
Strategic Report
In this section
15 MADE.COM Group Plc
Annual Report and Accounts
SusanneGiven,Chair
Chair’s statement
am very proud to introduce our
firstAnnualReportasapublicly
listed company. The year has
been unprecedented in so many ways,
but it has been a positive year for
MADE. During the year, we not only
delivered record gross sales numbers,
but successfully completed our initial
publicofferingtothemainmarketof
theLondonStockExchange('IPO').
It is a testament of the strength of
our brand and our business.
The capital raised through our
IPO, combined with the strong
foundations built to date, put us in
a great position to maximise the
opportunities ahead for our business.
Our strategy (as detailed on pages
36-38 of this Report) is to invest into
our customer proposition by:
+ enhancing the customer experience;
+ expanding our product range;
+ building our reach across
Continental Europe; and
+ further embedding sustainability
throughout our supply chain.
Following our IPO, I want to welcome
all our new shareholders and thank
them for their support in making this
possible.
I
16 MADE.COM Group Plc
Annual Report and Accounts 2021
“The business has delivered
record sales for the year, driven
by the very strong consumer
appetite for our products.”
SusanneGiven
Chair
Chair’s statement
continued
17 MADE.COM Group Plc
Annual Report and Accounts
Chair’s statement
continued
The business has delivered record gross sales for the
year, driven by the very strong consumer appetite for
our products. This performance has been achieved
against a backdrop of unprecedented supply chain
disruptions,affectingboththeproductionand
movement of goods globally. This achievement against
suchachallengingenvironmentreflectstheskilland
experience of our Executive Leadership Team and the
hard work and dedication of everyone in the business.
I would like to thank all of the team for their hard work,
commitment and enthusiasm in serving our customers.
The pandemic created real challenges for MADE, as it has
for so many companies across the globe. We continue to
prioritise the health and safety of our teams focusing on
the operation and evolution of appropriate frameworks to
ensure all MADE workplaces remain safe, employee
wellbeing is safeguarded and business continuity achieved.
An even greater challenge for the business has been
navigating the complexity and consequences of global
supply chain disruptions. I have been impressed and
pleasedinequalmeasuretoseetheextraeffortsthatour
buying, logistics, supply chain and customer services
teams have made to minimise the disruption to our
customers and our business at large. The dramatic
increaseinfreightcostshashurtourprofitability,andthe
bottlenecksacrossoursupplychaininthefinalquarter
of the year negatively impacted our ability to dispatch
products to customers. However, the agility of our
business model and the deep relationships we have built
with third parties throughout our supply chain has meant
that we have been able to adapt more quickly than most.
These disruptions are likely to persist into 2022, but
through the work we have already completed in relation
to reducing lead time to customers and the further
sophistication of our supply chain, we entered 2022 in a
more resilient position than ever before.
Governance
We are committed to the highest standards of
corporate governance and operating with a strong,
experiencedanddiverseboardofDirectors('Board').
I am very pleased with the interaction and discussions
which have taken place at Board level. The Board is
working very well with the Executive Leadership Team of
the business, fostering a healthy challenge as well as
proactive sharing of experience, knowledge and insight to
help MADE achieve our strategic goals. In 2021 we were
pleased to welcome two additional Non-Executive
DirectorstotheBoard–GwynBurrandMatthewPrice
– who bring a wealth of experience and skills including
particular expertise in public company matters and their
respective focuses on remuneration and audit and risk to
support and guide MADE through life as a public company.
ChiefExecutiveOfficer
It was with great sadness and understanding that on 21
February 2022 we announced that Philippe Chainieux
wouldstepdownfromhisroleasChiefExecutiveOfficer
oftheGroupanditsBoardforfamilyreasons.Iwouldlike
to take this opportunity to thank Philippe for his
dedication and hard work over the last nine years during
which he and the MADE team have built this exciting,
unique and successful digital consumer business.
We wish him and his family well for the future.
On the same day, we welcomed our Chief Operating
Officer,NicolaThompson,totheBoardandshe
assumedthepositionofInterimChiefExecutiveOfficer
withimmediateeffect.Wearenowpleasedtoconfirm
that Nicola has been appointed as CEO on a permanent
basis,witheffectfrom7March2022.Nicolaisan
exceptional colleague and impressive leader, and the
Board and I look forward to continuing to work with her,
alongside Adrian and the rest of the Executive
Leadership Team.
Sustainability
Our vertically integrated sourcing model allows us to
take a sustainable and long-term approach to product.
This year we have established the framework of what
will become our new sustainability strategy, Better by
Design. In this Report, we set out our progress in each
of the three pillars that comprise that framework:
People, Planet and Partners (please see pages 54-63).
The further development of this strategy is the next
stage of our journey and over the coming year this will
involve a deep analysis of key material supply chains,
extending our existing policies to cover a broader range
of raw materials and setting new targets as well as
roadmaps, metrics and key performance indicators
('KPIs')toachievethese.Ilookforwardtosharingmore
on our approach.
Outlook
MADE has grown enormously since our foundation in
2010 and we are excited by the next stage of our
journey, underpinned by clear strategic goals (as set
out on pages 36-38 of this Report). The combination of
investment into enhancing the customer experience
primarily by reducing the time customers wait to
receive product, range extension and deepening
brand awareness, while simultaneously embedding
sustainability in our business, position MADE with a
highly compelling customer propositions. Following our
IPOwenowhaveafundamentallydifferentcapital
structure which allows the business to take full
advantage of the opportunities ahead of us. I can
confidentlysaythebusinesshasneverbeeninabetter
position to capture its growth potential.
The business has fantastic talent, led by Nicola and
Adrian,theExecutiveLeadershipTeam('ELT')anda
dynamic and highly motivated team throughout the
business. The future is very exciting.
SusanneGiven
Chair
7 March 2022
18 MADE.COM Group Plc
Annual Report and Accounts 2021
Chair’s statement
continued
19 MADE.COM Group Plc
Annual Report and Accounts 2021
Nicola Thompson, Chief Executive Officer
Chief Executive Officer’s statement
would like to welcome you
toourfirstAnnualReportas
a publicly listed company.
The year has been a successful one,
with our design-led proposition allowing
us to continue to rapidly grow market
share, reporting +38% gross sales
growth to a record £434m up from
£315m in FY20
1
. This growth has been
delivered despite the direct impact
on our operations and teams caused
by industry-wide challenges including
the pandemic and the resulting global
supply chain disruptions.
We have seen a meaningful shift
of consumption moving online
during the pandemic, especially in
our home furnishings category.
With our distinctive brand and our
unique product proposition, MADE is
in a formidable position to achieve our
ambition to become the leading home
destination for the digital generation.
I
1. FY20referstothefinancialyearended31
December 2020
20 MADE.COM Group Plc
Annual Report and Accounts 2021
“We have been able to deliver such
consistent growth because of the
strength of our brand, our data-led
approach and our teams.”
Nicola Thompson
ChiefExecutiveOfficer
Chief Executive Officer’s statement
continued
21 MADE.COM Group Plc
Annual Report and Accounts
Since our foundation 11 years ago we have delivered
consistentlyhighgrowth,offeringcustomershigh-end
designatanaffordableprice.Ourhistoricalgrowthhas
been delivered through expanding our range to become
a home destination and lifestyle brand, as well as
expanding into the largest Continental European
markets. We have been able to deliver such consistent
growth because of the strength of our brand, our
data-led approach and our teams. Throughout the
pandemic, this team strength and commitment has
shone through again and again. I would like to thank
everyoneatMADEfortheiramazinghardworkand
effortsinsupportingoursuccess.
During the year, we completed our IPO on the London
StockExchange.TheGroupraised£100mofgross
proceeds from new and existing shareholders and I
want to thank all our shareholders for their support.
TheIPOputstheGroupinafantasticpositionto
accelerate our ambitious growth plans, building on our
market-leading position by investing in even better
customer experience, expanding our design-led product
range, growing brand awareness and further embedding
sustainability across our operations. As always, we will
dothiswhilemaintainingthefinancialdiscipline
demonstrated throughout our history. The last year
sets us up well, with good progress against each of our
strategic pillars and record sales despite the global
supply environment.
Financial and operational highlights
I am proud to report that MADE delivered a record year
intermsofgrosssalesandrevenue.Grosssalesgrowth
was +38% at £434m and revenue growth was 50% at
£372m. Our growth meant that MADE captured
significantmarketshareduringtheyear,reflectingthe
attractiveness of our designs, product range and service
proposition. All of these will be further strengthened in
2022, continuing to drive gross sales and revenue growth
well in excess of the market.
Regionally, the UK continued to deliver a very strong
performance, with gross sales growth of +38%.
Our Continental European business also delivered very
healthy growth, with gross sales +38%. Continental
Europe already represents 47% of our gross sales.
At the category level, MADE saw robust growth for
both furniture and homewares. Furniture delivered gross
sales growth of +37%. Homewares delivered gross
sales growth of +41% and represented 28% of our
gross sales mix.
Our customer metrics showed positive trends for the
year. Total active customers amounted to 1.3m up 26%
since 2020. When customers shop with us, they remain
loyal, as demonstrated by repeat order mix continuing
to increase, now at 44%, an increase of 263 bps
compared to 2020. Following work on our product
range, particularly on enhancing our ‘exit’ price points,
we show a strong increase in AOV to £246. This
represents an 8% increase compared to 2020.
Adjusted EBITDA in FY21
1
was (£14.3m) versus (£5.1m)
in 2020. Our 2021 adjusted EBITDA
2
was materially
impacted by two main issues. First, the dramatic
increase in the cost of freight across the global supply
chain, which increased by £32m compared to 2020
rates. This was an industry-wide issue. Many of our
peerssignificantlyincreasedtheirretailpricepointson
product throughout the year.
We took the tactical decision to implement more
modest price increases during the second half of the
year, to further improve relative price positioning.
We continue to focus on our price positioning, with us
again increasing prices below rates seen in the market
throughthefirstquarterof2022.Weanticipatethat,
under current market conditions, these price changes
will see our gross margin normalise to pre-pandemic
levels in the second half of 2022. The second impact
on 2021 adjusted EBITDA was a timing issue, relating to
delayeddispatchesofconfirmedcustomerordersdue
to the ongoing supply chain disruptions. This will have a
correspondingbenefitto2022adjustedEBITDAwhen
orders are delivered to customers. For a full breakdown
of adjusted EBITDA for FY21 please refer to the table
on page 70.
TheGroupincurredone-offcostsof£5.3mrelatedto
the IPO. Share-based payment charges were £3.5m,
including £0.4m of accelerated charges on IPO and
£1.0mofchargerelatedtoone-offIPO-relatedoption
awards. Loss before tax was £31.4m versus £14.6m in
2020.Freecashflowwas£32.1mforthefullyear.Asat
31December2021,theGrouphadcashof£107m.
Chief Executive Officer’s statement
continued
1. FY21referstothefinancialyearended31December2021
2. earnings before interest, tax, depreciation and
amortisation:forthedefinitionofadjustedEBITDAplease
see page 73 of this Report.
22 MADE.COM Group Plc
Annual Report and Accounts 2021
MADE executing well against our strategy
MADE’s strategy, as further detailed on pages 36-38,
is built around four key pillars:
+ Experience
+ Choice
+ Reach
+ Sustainability
To deliver our strategy, we are focusing on 8 core
priorities, which will deepen MADE’s competitive
advantages. We have made good progress against
our priorities in 2021:
Experience
Priority 1: Reducing lead times for customers
From our origins as a made-to-order furniture brand, we
have become adept at using data to reduce lead-time
tocustomerswhilemaintainingourhighlyefficient
negative working capital model. We are now accelerating
investment into customer experience, which means
meaningfully reducing the time customers wait to
receive their products. Due to our curated range and
deep supplier partnerships, we are well placed to do this
with a relatively limited stock investment. Historically, an
improvement of one week in our lead times has resulted
in a c.5% sales uplift and improved levels of customer
satisfaction.
During the year, we placed stock orders to accelerate
thefirstphaseofourlead-timeplan.Followingthis
strategy, we expect to deliver an average delivered
lead-timeoffertocustomersof3-4weeksinthe
firsthalfof2022,comparedtoapositionduringthe
pandemic of 7-8 weeks. Based upon data built over
many years, we expect this fundamental development
in our proposition to support our ongoing market share
gainsaswellassupportingprofitabilityenhancements
and improvements in customer satisfaction.
Priority2:Efficientlyenhancesupplychaininfrastructure
to improve service proposition
Duringtheyear,wefinishedexpansionofourlarge
goods warehousing capacity in the UK, moving from
165,000 sq. ft. to 337,000 sq. ft., with a further
incremental expansion planned in 2022. The addition
of this space gives us infrastructure for future rapid
growth in the UK and demonstrates our ability to
efficientlyaddcapacitythroughexistingpartnershipsat
low levels of capital investment and with limited impact
on day-to-day business operations. The additional
space created will allow us to scale our stock
investments and thereby reduce delivery lead times.
We have deepened relationships with last mile couriers
to improve our small goods and large goods delivery
proposition for consumers. We added in new carrier
partners in both Continental Europe and the UK to
expand network coverage and increase resilience.
This also reduced the average number of days taken to
deliver a product from our warehouse to our customers
aswellasimprovingourfirst-timedeliverysuccessrate.
Priority 3: Improved user experience
As a digital business, we are constantly improving the
user experience on our websites and over the course
of 2021, made some key enhancements including the
redesign of our customer communications programme,
adding new capability to automate the communication
of delivery date changes. We also deepened
personalisation and automation of marketing
communications based on behavioural signals. We added
the capacity for customers to self-serve for single item
refunds rather than needing to contact customer
services. We rebuilt the fabric sample order process to
make it faster and more intuitive and launched a digital
appointment solution for customers to book design
advice appointments with our showroom teams globally.
We created an entirely new digital proposition to
facilitatecustomersfindinganewhomefortheirold
products and give to charity (funded by MADE) in the
process as part of our commitment to our sustainable
goals and move towards a more circular model.
Payment options were bolstered in several of our
markets including the launch of the Klarna invoice
solutioninGermany.
Within our customer services functions, we have made
further investments in people and systems increasing
both our in-house and out-source capacities and
buildingthefirstiterationofanewproprietarytech
solution – CASPER – which centralises all third party
data into one simple interface allowing customer
serviceagentstocollateinformationtoimprovefirst
touch resolution. We have also upgraded and added
third party tools such as workforce management, crowd
source knowledge hubs and AI-driven real-time
translation software to improve our productivity and
quality of service.
Chief Executive Officer’s statement
continued
23 MADE.COM Group Plc
Annual Report and Accounts 2021
Chief Executive Officer’s statement
continued
Choice
Priority 4: Design-led and curated product range
Atitscore,MADEoffersitscustomersacurated
productoffer,witheachproductselectedwithour
target customers in mind. Through customer insights
we know that design is the number one reason for
customers to purchase from MADE. We work directly
with more than 150 of the world’s best designers,
creatingunique,differentiateddesigns.
During the year, we have continued to strengthen our
designer eco-system and have launched a series of
exciting and successful product collaborations with
designers,influencersandartists.Productnewnesshas
been a key driver of our success during the year.
Priority 5: Expanding our range
As a design-driven business, range construction is a
coredifferentiatorandwehaveinvestedheavilyinour
designer network, our product team and data analytics
toensurewealwaysofferproductsourcustomerswant
tobuy.Wehavebuiltourcuratedrangenowoffering
more than 9,500 products. Building our range has
driven consistent growth and enhanced the unit
economics of our business through increased
frequency of purchase and repeat ordering.
We began as a furniture business, and over the last
fewyearshavebeguntodevelopahomewaresoffer.
Wehaveproventhathomewaresareanefficientroute
to acquire new customers and to build loyalty with
existing customers.
We are accelerating our build of an increasingly
comprehensive range for the well-designed lifestyle,
by expanding our vertically integrated range and by
investing into the introduction of a carefully curated
marketplace of artisan brands onto our platform. We ran
a successful beta test for our marketplace through 2021.
It is early days in our marketplace expansion, but we are
encouraged with the results to date. We now have over
100 brands on the platform and have implemented the
firstphaseofourmarketplacetechnologyinfrastructure
investments which went live late in 2021 and which
enable us to accelerate the proposition in a more
scalable way. Further investments will be made in
2022 to enable us to scale up the curated marketplace
proposition.
With the support of our marketplace proposition and
introduction of new own brand products, by the end
of2022wearetargetingthetotalrangeofferedto
customers, increasing from more than 9,500 SKUs to
11,500+ SKUs.
Reach
Priority 6: Expanding within our core geographies
Our customer demographic spans eight of the largest
markets across Europe (including the UK), with the
Continental Europe market already comprising 47%
oftheGroup’sgrosssalesin2021,includingourfocus
marketsofGermanyandFrancealreadyatsignificant
scale.Today,theGroupoperatesintheUK,Germany,
France, Spain, Netherlands, Belgium, Austria and
Switzerland.Ourmarketscontinuetodemonstrate
impressive growth trajectories.
Our brand and product ranges have resonated
consistently well with a similar customer demographic
across all of the markets we are operating in.
Priority 7: Investing in brand awareness through
Continental Europe
Givenoursuccessfultrackrecordinscalingoperations
internationally, we remain focused on building brand
awareness through our core markets, leveraging our
successful marketing playbook established in the UK.
To date, we have placed a lower level of brand
awareness investment into the major Continental
European markets compared to the UK.
As we deliver customer experience and range
developments, we will take advantage of the
opportunitytoefficientlyinvestinenhancingbrand
awareness,particularlythroughFranceandGermany,
viaone-offtacticalmarketinginvestments.
24 MADE.COM Group Plc
Annual Report and Accounts 2021
Chief Executive Officer’s statement
continued
Sustainability
Priority 8: Sustainability embedded into every aspect of
MADE’s operations
Our core consumers’ expectations and preferences for
products made by value-led organisations are aligned
with our mission and business model. Our ability to
manage the end-to-end supply chain, with our own
employees on the ground in our key sourcing regions,
enables us to embed sustainability throughout our
operations from design, sourcing and production to
sales and aftersales. We design products with their
longevity in mind.
We are committed to several responsible targets over
thenextfiveyearsincluding:
+ reaching 100% recycled or recyclable packaging by
2025
+ reaching 100% sustainably sourced key materials
such as cotton and polyester (including polyester
velvet) by 2025
+ reaching 100% sustainably sourced, fully traceable
timber in 2025; and
+ aGiveAwayplatform,withaTakeBackprogrammein
the coming years
We believe our approach aligns strongly with the core
values of our predominantly millennial customer base,
who are increasingly focused on transparency,
sustainability, and integrity to inform their brand choice
and purchasing decisions. Our prioritisation of
sustainability and control of our supply chain
distinguishes us from our competitors and positions us
well to handle expected future changes in regulations
and environmental standards around sustainability.
As outlined on pages 54-63, we are committed to build
on our sustainability credentials, social positioning and
strong governance over the coming years.
We have had a fantastic 2021 and achieved so much,
despite the external challenges of Covid-19 and global
supply chain disruptions. I’m even more excited about
theoutlook.Givenalltheworkthebusinesshas
undertaken over the last couple of years, we will have a
hugely improved customer proposition for 2022 and
beyond. This all puts us in a great position to deliver
against our long-term objective to achieve £1.2bn+
gross sales and a low-teens adjusted EBITDA margin
by 2025.
Finally, I would also like to thank Philippe Chainieux for
his dedication to MADE and the key role he has played
over the past nine years as CEO in developing this
exciting and successful business. MADE is an incredible
business with a strong brand and consumer proposition
that truly understands its digital native customer base.
I look forward to continuing to work closely with the
Board and the Executive Leadership Team to execute
our strategy, focusing on enhancing the customer
experience, developing our curated range, growing our
fantastic brand internationally and building on our
sustainability credentials.
Nicola Thompson
ChiefExecutiveOfficer
7 March 2022
25 MADE.COM Group Plc
Annual Report and Accounts 2021
Chief Executive Officer’s statement
continued
26 MADE.COM Group Plc
Annual Report and Accounts
Chief Executive Officer’s statement
continued
27 MADE.COM Group Plc
Annual Report and Accounts
Our market
MADE is a digitally native business giving consumers
theconfidencetoshopfortheirhomesonlinesinceits
inception in 2010.
We operate in large markets. The furniture and
homewares addressable market is over £94bn in
the eight countries in which we currently operate.
The market structure is highly fragmented with the
top 10 players (by sales) having around 17% market
share (in aggregate).
1
Online penetration rates for the furniture and
homewares market were well below those of many
other consumer verticals, at around one third of the
apparel and footwear markets pre-pandemic.
Demand has been rapidly shifting online, a trend that
has been accelerated throughout the pandemic.
For example, in the UK, online penetration for furniture
and homewares increased by 5ppt.
2
The market is at
aninflectionpointintermsofe-commerceadoption
following trends that have been seen historically
through other major consumer verticals. Supported by
our strategic pillars, we are ideally placed to accelerate
market share gains.
Consumer tastes have been converging across Europe
in recent years. The top 50 best sellers across our
product range are remarkably similar across our core
marketsoftheUK,FranceandGermany.Oursingle
product range and consolidated inventory position
allowsustoefficientlytakeadvantageofthis
convergence.
1 Data as per IPO Analyst report. Market share based on aggregate
sales for 2019
2 Source: Euromonitor. Company own estimates from
Euromonitor International Limited, Retailing 2021 edition,
accessed 08/03/2021. Expected UK online penetration between
2019 and 2020.
28 MADE.COM Group Plc
Annual Report and Accounts 2021
Homewares and home furnishings market 2020
2
The top 10 players (by sales) having around 17% market share
Low online penetration – adoption forecast to
accelerate in the coming years
Our addressable market is over £94bn in the eight countries in which we currently operate
£94bn
17%
£94bn £151bn £504bn
MADE market
3
Rest of
Europe
Global
Source: Euromonitor
1.HomewaresandHomeFurnishingsmarketdefinedasEuromonitorPassport:categoryHomewaresandHomeFurnishingswhichincludes
cooking utensils (dishes, tableware, cutlery, drinkware, and other small articles used in a home), as well as home textiles, indoor furniture and
windowcoverings,outdoorliving(BBQ's,gardenshedsandoutdoorfurniture)andlighting(lightingsourcesandlightfixtures)
2.MADEmarketscalculatedasasumofhomewaresandhomefurnishingmarketsinUK,Germany,Austria,Belgium,France,Spain,Netherlands
andSwitzerland
3.ConsumerelectronicsmarketdefinedasEuromonitorPassport:categoryConsumerElectronics(2019onlinepenetration:23%)
4.Apparel&footwearmarketdefinedasEuromonitorPassport:Apparel&Footwear(2019onlinepenetration:25%)
~2x penetration
upside potential
30%
Consumer
electronics
3
2025E
17%
Homewares and
home furnishings
1
2020
£16Bn
Early days Acceleration Growth
35%
Apparel &
footwear
4
2025E
MADE markets
2
– online penetration by industry%
29 MADE.COM Group Plc
Annual Report and Accounts 2021
Trend: Increased urbanisation/household formation
The home and living market is
structurally attractive, and expected to
grow 4%p.a. over the next 4 years
1.
This growth is being driven by increased
household formation across Europe as
average people per household reduces,
and from increased urbanisation.
Global trends affecting the furniture and homewares industry
1. Source: Euromonitor. Company own estimates from
Euromonitor International Limited, Retailing 2021 edition,
accessed 08/03/2021. Retail value RSP incl sales tax, fixed
exchange rates,current prices
Expected market growth per annum to 2025 of:
1
4%
30 MADE.COM Group Plc
Annual Report and Accounts
Trend: Online migration
The home and living market online
penetration remains much lower than
most other large consumer segments
at c.17% online penetration in 2020
1
.
A further 3 percentage points
1
of the
market is expected to migrate online
by 2025.
1. Source: Euromonitor. Company own calculations from Euromonitor
International Limited, Retailing 2021 edition, accessed 08/03/2021. Retail
valueRSPinclsalestax,fixedexchangerates,currentprices.Migration
online of 3% in MADE addressable markets
Further online migration to 2025 of 3ppt
3ppt
31 MADE.COM Group Plc
Annual Report and Accounts 2021
Trend: Working from home
Consumer behaviour and working life has
changed dramatically since the start of
the Covid-19 pandemic.
The work-from-home shift has been
accelerated and leading to renewed
focus on making the home more
comfortable and functional.
Our market
continued
32 MADE.COM Group Plc
Annual Report and Accounts
Trend: Sustainability
Consumer awareness and demand for
more sustainable products is a key trend
within the home and living market.
Consumers want to buy products
and services from companies that
embrace the right approach to
sourcing, employment practices and
environmental impact.
“Our ability to manage the
end-to-end supply chain,
with our own employees on
the ground in key sourcing
countries enables us to embed
sustainability throughout our
operations from design, sourcing
and production to sales and
aftersales. We design products
with their longevity in mind.”
Nicola Thompson
ChiefExecutiveOfficer
33 MADE.COM Group Plc
Annual Report and Accounts 2021
Our market
continued
34 MADE.COM Group Plc
Annual Report and Accounts
Our market
continued
35 MADE.COM Group Plc
Annual Report and Accounts
Our strategy and KPIs
Our purpose
Since inception, MADE’s primary purpose has been
to make high-end design accessible to everyone.
We connect designers and customers through a
managed end-to-end supply chain, underpinned by
data. We aim to become the leading home destination
for the digital generation, making homes feel as
personal and original as the people living inside.
How we are achieving this
Asanonlinehomelifestyledestination,MADEoffers
design-focused, ever-changing product assortment at
affordableprices.Alongsidebranddevelopment,
ongoing range and geographic expansion, MADE has
consistentlydeliveredhigh,efficientgrowth.
Facilitated by capital raised through MADE’s IPO,
MADE is focusing on four key strategic pillars to further
develop our proposition, supporting ongoing market
share gains.
+ Experience
+ Choice
+ Reach
+ Sustainability
See our KPIs on pages 39-41 for more details.
36 MADE.COM Group Plc
Annual Report and Accounts 2021
Our four strategic pillars
Experience
Description
+ MADE is focused on enhancing customer
experience, primarily through the reduction
ofproductlead-timeofferingtocustomers.
Lower lead times have been shown to increase
conversion (with every one week reduction of
lead-time delivering c.5% improved gross sales)
and to improve customer satisfaction
+ Additional, ongoing customer experience
investments continue to enhance MADE’s
customer proposition
2021 performance
Logistics investments made in warehouse capacity,
incrementally expanding from 700,000 sq. ft. total
space to 1,115,000 sq. ft.
Additional stock investments made to reduce lead
times to consumers through H2 FY21
Further customer service enhancements included
introduction of ‘pay in instalments’ options in
Germanyandfurthershippingoptionsinallterritories
2022 objectives
+ reduceaveragelead-timeofferedtocustomers
from a level during the pandemic of 7-8 weeks to
3-4 weeks pre-pandemic level of through H1 FY22
1
+ increasing sophistication of supply chain to
facilitateefficientlead-timereduction
+ further experience investments, including delivery
of new payment options, customer service
investment and shipping option enhancements
+ creation of dedicated executive position of Chief
CustomerOfficer
Choice
Description
+ MADEofferscustomersacuratedrangeofunique
and exclusive products, with over 9,500 active
SKUs. Considered growth of product range has
beenakeydriverforMADEscalingefficiently,
reducing acquisition costs and increasing reasons
for customers to purchase
+ MADE is accelerating range development through
ourownbrandedoffering,aswellasbybuildingour
homewareofferthroughintroductionofacurated,
designermakermarketplaceoffering
2021 performance
IncreasedSKUofferingfrom6,000+to9,500+
Successfully completed beta test phase of curated
designermakermarketplace,nowofferingproducts
from more than 100 likeminded brands
First stage of technology infrastructure
enhancements supporting marketplace scalability
delivered. Additional functionality enables more
efficientbrandonboardinganddropshipping
2022 objectives
+ continuing to build our own range
+ grow range to 11,500+ SKUs, including
development of own brand range and marketplace
offering
+ increasinglike-mindedbrandsofferedthroughour
marketplace, building range authority through key
homewares categories
+ delivery of technical infrastructure to fully enable
efficientscalabilityofmarketplaceoffering
+ further investment into product and marketplace
teams
1,115k sq. ft. 9,500+
1 FY22referstothefinancialyearthatwillendon31
December 2022
37 MADE.COM Group Plc
Annual Report and Accounts
Our four strategic pillars
continued
Reach
Description
+ MADE has already built a meaningful business
throughout Continental Europe, with £206m gross
sales in 2021. This has been delivered despite
limited brand awareness investment in the region
to date
+ as MADE delivers experience enhancements and
curated range expansion it plans to invest in brand
awareness through key Continental European
markets
2021 performance
High growth rate delivered through all regions,
building market share, brand awareness and growth
across Continental Europe.
38% CE sales growth
Further investment into marketing tools and data
analyticstosupportefficientmarketinginvestments.
This includes positive progress on search engine
optimisation('SEO')programmeinitiatives,with
significantincreaseinkeywordcoverageandSEO
visitors increasing 63% year-on-year.
Growingmarketingteamsinpreparationfor
increased investment levels
2022 objectives
+ invest in additional brand awareness activities
through key Continental European markets, with a
particularfocusonGermanyandFrance
+ to grow Continental European business ahead of
UK in FY22
+ continue investment into marketing technology
infrastructure
Sustainability
Description
+ MADE’s ability to closely manage the supply chain
through direct relationships with our suppliers
enables us to embed sustainability throughout our
operations. MADE designs products with their
longevity in mind and is committed to several
responsible sourcing targets over the next 5 years
see page 60 for more details
2021 performance
Delivered against or exceeded all sustainability
targetsissuedatpointofMADE'sIPO(seepage60
for further details)
All targets delivered 2021
Appointment of Technical, Quality and Sustainability
Director
DeliveryofpartnershipwithGeev,offeringcustomers
the opportunity to extend the life of their old product
Furtherinvestmentinto'ontheground'sourcing
teams
2022 objectives
+ delivery against next stages of 2025 sustainability
targets (see page 60 for further details)
+ definitionof'Scope3'emissionstargetsand
initiatives during H2 FY22
+ extend Responsible Sourcing Policies and establish
due diligence processes
+ increase the choice of circular service solutions for
customers
38 MADE.COM Group Plc
Annual Report and Accounts
Key performance indicators
To manage operational performance and assess
strategicdevelopment,theGroupmonitorsaseriesof
bothfinancialandnon-financialKPIs.
Financial
Ourkeyfinancialmeasuresareinplacetodeliveran
indicationoftheoverallperformanceoftheGroup.
Thesefinancialindicatorsincludestatutorymeasures
(compliant with the UK-adopted international
accounting standards) and non-statutory alternative
performancemeasures(‘APMs’,eachasdefinedon
pages 72-73). We monitor several key metrics
totrackourfinancialandoperatingperformance.
The Directors believe that these measures provide
readerswithusefulinformationregardingtheGroup’s
financialandoperatingperformanceandfacilitatean
understanding of the underlying performance of
theGroup.WhereAPMsareused,weprovidea
reconciliation to the nearest statutory measure
(see Financial Review on page 67).
Description
Sales at the point of transaction, excluding applicable
VAT.
Performance
Continued high gross sales growth was delivered
consistently through all regions as we continued to
enhance our product range and customer proposition.
Executive remuneration is directly linked to gross sales
growth. Please see pages 122, 124 and 129 of the
Directors'RemunerationReportformoreinformation.
Description
Revenue is a statutory measure, recognising the net
value of products delivered to customers, excluding
product returns.
Performance
Revenue growth was ahead of gross sales growth due
to a high level of outstanding customer orders placed in
FY20 on extended lead times which were dispatched
and delivered to customers during FY21.
Description
Deferred revenue recognises monies received from
customers but where product has not yet been delivered
and so related revenue has not yet been recognised.
Performance
Deferred revenue remained elevated at the end of FY21
due to ongoing industry-wide supply chain disruptions.
As high levels of stock intake continue to support our
programme to reduce customer lead times to an
average of 3-4 weeks in H1 2022, we expect deferred
revenue to unwind to a more normalised level, delivering
correspondingrevenueandprofitabilityrecognition.
Grosssales
2021 £434m
2020 £315m
2019 £242m
Revenue
2021 £372m
2020 £247m
2019 £212m
Deferred revenue
2021 £56m
2020 £53m
2019 £20m
39 MADE.COM Group Plc
Annual Report and Accounts 2021
Key performance indicators
continued
Description
The exclusion of certain expenses in calculating
adjusted EBITDA facilitates operating performance
comparisons on a period-to-period basis.
See note 2 to the Financial Statements on page 176
for a full reconciliation to statutory measures.
Performance
Beforefreightcosts,theGroupdeliveredgrossmargin
improvements. Disruption in global supply chains
pushed up the cost of freight across global retail,
impactingEBITDAfortheGroup.Thisimpacted
EBITDA by approximately £32m at 2020 rates.
Tocounterfreightheadwinds,theGroupadjusted
pricespartwaythrough2021,thefulleffectofwhich
will be annualised into 2022.
SupplychaindisruptionalsoaffectedEBITDAinthe
form of delays as shipping times globally have been
stretched. This impacted revenue recognition and
timing with expected revenue for 2021 being deferred
to 2022 with a subsequent direct impact on EBITDA
Executive remuneration is directly linked to adjusted
EBITDA.Pleaseseepages122-123oftheDirectors'
Remuneration Report for more information.
Loss Before Tax
Description
Loss before tax is a statutory measure.
Performance
Loss before tax increased £16.8m year-on-year
to (£31.4m), including £5.3m of exceptional
costs relating to our IPO and £3.5m share-based
payment charges.
Description
Net working capital relates to the balance of reported
inventories, trade and other receivables, rent deposits,
trade and other payables, deferred revenue and
provisionsasperthestatementoffinancialposition.
Performance
MADE operates with structural negative working capital
During the year, inventories increased from £21.5m
to £63m following a low level of stock availability in
FY20 and an inventory build due to investment in
reduced lead-times and high associated freight rates.
An increase in creditors and deferred revenue helped
offsettheinventoryincrease.
Description
Freecashflowisdefinedasthechangeincashand
cash equivalents less cash received or utilised relating
tofinancingorshareequityissues.
See reconciliation to statutory measures on page 67.
Performance
Freecashflowwasimpactedintheyearbyfreightcost
inflationimpactingprofitability,partialnormalisationof
stock position and increased CAPEX investment into
our technology and warehouse infrastructures.
For FY22, executive remuneration will be directly linked
tofreecashflow.Pleaseseepage129oftheDirectors'
Remuneration Report for more information.
Net working capital
2021 (£54m)
2020 (£58m)
2019 (£23m)
Freecashflow
2021 (£32m)
2020 (£22m)
2019 (£18m)
2021 (£14m)
2021 (£31.4m)
2020 (£5m)
2020 (£14.6m)
2019 (£10m)
2019 (£19.3m)
Adjusted EBITDA
40 MADE.COM Group Plc
Annual Report and Accounts 2021
Non-financialkeyperformanceindicators
Customer metrics
Rapid growth of our customer base was delivered
across all regions, alongside ongoing improvements to
ourrepeatordermixaswecontinuetooffercustomers
more reasons to shop with us. During the year AOV
increased by 8% as we successfully built the exit price
point of our range.
Sustainability metrics
1
- 2021
We have successfully delivered against all 2021
sustainability targets, including reaching more than
60% fully traceable timber in our products, 25%
recycled or organic cotton and a 29% reduction in
plastic use. For full details of our sustainability
successes and targets please see page 60.
Lasttwelvemonths(LTM)activecustomers('000)
2021 1,327
2020 1,055
2019 786
Repeat order mix (%)
2021 44
2020 41
2019 40
Responsibly sourced fully traceable timber (%)
Average order value (AOV, £)
2021 246
2020 228
2019 236
Recycled or organic cotton (%)
2021 25
Target 25
2021 70
Target 60
Reduction in total packaging (%)
2021 27
Target 25
1. These sustainability KPIs were only set from 2021 onwards and
so a comparison against targets have been included in place of
year-on-year performance.
41 MADE.COM Group Plc
Annual Report and Accounts 2021
Business model
What we do
We are the leading digitally native home lifestyle brand,
operating across 8 countries.
Furniture
Offeringafullrangeofdirectlysourceddesigned
furniture for the home.
Homewares
Offeringagrowingrangeofbothdirectlysourcedand
marketplace designer-maker homeware.
Sustainability
Our sustainability programme, Better by Design, aims
to deepen our sustainability agenda and enhance our
community support activities. For more information on
our sustainability strategy please refer to pages 54-63.
Our value drivers
We are design led and with a curated product range
We collaborate directly with over 150 external designers
andartisanstocreateouruniqueanddifferentiated
curatedproductoffering.Theseproductsareboth
directlysourcedandofferedviaourmarketplace.
We have extended our range to over 9,500 SKUs
and will add to this range in 2022 and beyond.
We are a brand with strong international reach
The MADE brand is gaining momentum across all our
key markets. Strongest in the UK with over 40% brand
awareness, with Continental European awareness
growing. We have demonstrated the ability for our
brandtotravel,withsignificantbusinessalreadybuilt
through the largest markets in Europe. We address
each market with the same brand proposition, product
offeringandbusinessmodel.
We are data driven
Our business and our decision-making is centred
around technology and data – we have created a deep
pooloffirst-partydatathatdrivesbothdemand
generation and supply creation. Our technology is built
to scale.
We are striving for excellence in customer experience
Through our seven showrooms and our customer
serviceteams,weaimtooffergreatcustomerservice.
Theserviceofferingisbeingfurtherenhancedas
productleadtimesarebeingimprovedsignificantlyas
one of our strategic priorities over the last 12 months.
We manage our supply chain and source responsibly
By working directly with more than 200 product
manufacturers globally, we cut out the middleman,
enablingustoofferourcustomershigh-enddesignand
quality at a great price, while reducing the time it takes
us to get from concept-to-market. This direct
management of our supply chain ensures quality and
responsible sourcing, enabling us to introduce newness
through our test and learn model as well as ensuring we
can achieve our sustainability ambitions.
How it works
DESIGN
+ we have created a design ecosystem to create
fantastic products
+ we collaborate with external designers and have our
own in-house design team
+ we are driven by innovation with new collections
launching each week
DATA
+ we have created proprietary predictive demand
algorithms with unique data
+ we use data driven insights to market our products
to potential customers
+ we have real time data across our supply chain
allowing us to enhance customer service
ATTRACT AND RETAIN CUSTOMERS
+ customersloveouruniqueanddifferentiatedproduct
design and brand positioning
+ we attract customers through our digital marketing,
brand building and seven showrooms
+ weareprofitableonfirstorder
+ westrivetoofferindustry-leadingcustomer
experience and customer service
SUPPLY CHAIN
+ we work directly with suppliers across the globe
allowingustoofferattractivelypricedgoods
+ product is shipped to our warehouses in the UK and
Europe
+ third party carriers deliver our products to customers
PROFITS AND CASH
+ weinvestourprofitsintoproductdevelopment,IT
and marketing to drive growth
+ ouroperatingmodelbenefitsfromnegativeworking
capital
+ we have low capital expenditure requirements
42 MADE.COM Group Plc
Annual Report and Accounts 2021
Our business model – data-led, highly scaleable business
Profits
and cash
Shareholders
Communities
and environment
Designers
and suppliers
Customers
People
Design
Data
Attract
and retain
customers
Supply
chain
Our business model ensures that MADE operates in a way that
delivers value to all stakeholders, as further detailed on pages
44-52 of this Report.
We address each market
with the same brand
proposition,productoffering
and business model.
Delivering value to
all stakeholders
Business model
continued
43 MADE.COM Group Plc
Annual Report and Accounts
Stakeholder engagement and
Section 172(1) of the Act
The Directors are responsible for promoting the
long-term success of MADE by creating and maintaining
sustainablevalueforthebenefitofMADE’sstakeholders
as a whole. This responsibility is discharged by the role
that the Directors play in reviewing and making decisions
of particular strategic importance, such as approving the
Group’soverarchingstrategy,budgetsandcapital
expenditure programmes, organisational changes and
other key policy decisions. The Board recognises that
pursuingeffectiveengagementwithMADE’skey
stakeholders is crucial to ensuring that such decision-
making processes promote MADE’s long-term success.
Where the Board does not engage directly with certain
stakeholdergroups,itoverseesmanagement's
engagement activities and receives regular updates from
management on those activities.
At MADE, our key stakeholders include our people,
customers, designers, brands and suppliers, shareholders
and the communities and environments in which we
operate. The following disclosure describes how the
Directors have had regard to the matters set out in
sections 172(1)(a) to (f) of the Companies Act 2006
(the'Act')whenperformingtheirdutytopromotethe
success of the Company.
In this section we identify our key stakeholder groups,
describe the primary ways in which we engage with
them and describe how their interests are considered
by the Board through decision-making processes and
thesettingoftheGroup’sstrategyandatpage52,
include a table identifying where further information
about our stakeholders can be found.
What’s important?
+ working culture
+ diversity and inclusion
+ wellbeing, health and safety
+ business objectives, performance and ethics
+ personal development
+ fair reward
People
At MADE, we recognise that we are reliant upon the
skills, experience and commitment of our people in order
to achieve our strategic goals. Our employees are our
greatest asset and the Board aims to attract and retain
high-quality employees from diverse backgrounds. The
Board is deeply committed to and proud of the inclusive
and collaborative culture at MADE and strives to
continue to nurture and develop it further. The Board
sees diversity of thought as critical to ongoing innovation
and MADE’s ability to create and drive future trends. For
more details on our Board Diversity Policy please see
page106ofourCorporateGovernanceStatement.
We have implemented policies, processes and
practices to ensure a high standard of employee
welfare, satisfaction and diversity to facilitate a strong
culture, where employees feel empowered in the
development of their own careers and have the
flexibilityandpositiveworkingenvironmenttoexcelin
their roles. MADE is also proud to be an equal
opportunities employer and is committed to ensuring
thatweofferallpersons,includinganyonewitha
disability or who becomes disabled during their
employment, full and fair consideration for employment
opportunities.
44 MADE.COM Group Plc
Annual Report and Accounts 2021
Customers
How do we engage?
Feedback surveys – employee feedback is sought and
monitored on a weekly basis through an online feedback
tool, along with regular Q&A sessions at our monthly
‘All Hands’ meetings. Results from this feedback is
shared with the Board, to ensure the Directors remain
informedaboutemployees'views.Wehavealsorun
specificsurveys,forexampleon‘newwaysofworking’in
light of the Covid-19 pandemic. Through the results of
this survey the Board, supported by the Human
Resources and Facilities teams, established a pilot
framework for new working practices for our employees
– either workplace, remote, or hybrid – dependent
upon job role.
Diversity and Inclusion Council – a council of employees,
championed by a member of the Executive Leadership
Team, has been established, which focuses on ensuring
theGroupoperateswithaninclusiveculture.
Recommendations from the council are presented to
the Board by the ELT representative for adoption across
theGroup.Thisyear,theBoardapprovedawiderangeof
initiatives including the roll out of diversity and inclusion
training across the business, a Mental Health First
Aiders programme and the end of our ‘refer a friend’
recruitment scheme. For more information on MADE’s
approach to diversity please see pages 58 and 106 of
this Report.
Pay and reward – MADE understands that clear
benefitsandanequitablerewardstructureiscentralto
attracting and maintaining talent. The Board recognises
the importance of incentivising employees over the
long-term, as demonstrated by its commitment to
Company-wide all-employee share plans. For more
information please see our Remuneration Committee
Report from pages 126-127 of this Report.
What’s important?
+ high-enddesignandqualityataffordableprices
+ reliability and customer experience
+ breadth of choice
+ brand values including environmental and social
impacts
MADE’s ambition is to be the leading home destination
for the digital generation and recognises that a positive
customer experience is essential to ensuring that
customers return to shop at MADE again. MADE’s
strategy is focused on delivering a best-in-class
customer experience, through the reduction of lead
times,expansionofourofferingandinvestingfurtherin
our Technology function, all of which is underpinned by
our commitment to sustainability.
For more details on our key strategic pillars, Experience,
Reach, Choice and Sustainability, please refer to pages
36-38 of our Strategic Report.
How do we engage?
Customer feedback – we gather feedback throughout
the customer journey, including onsite product reviews,
public review sites and internal customer satisfaction
measures. At each Board meeting, the Chief Executive
Officer(previouslyastheChiefOperatingOfficer)reports
the latest customer satisfaction indicators and provides
updates on key actions taken in relation to ongoing
improvements to the customer proposition at each
Board meeting. Customer feedback and satisfaction
data has been a key driver for the Board’s formulation of
the 2022 strategy – Experience, Reach, Choice and
Sustainability. The Board demonstrated its commitment
to improving customer experience by approving the hire
ofadedicatedChiefCustomerOfficertotheExecutive
Leadership Team who will join in 2022.
Performance incentives–toreflecttheimportanceof
customer satisfaction to the long-term success of the
business, the Board, supported by the Remuneration
Committee, has structured senior management
incentives to include a performance measurement
target based on customer satisfaction metrics.
Stakeholder engagement and Section 172(1) of the Act
continued
45 MADE.COM Group Plc
Annual Report and Accounts 2021
“The IPO was a starting point and
not the end of the journey. MADE is
nowevenbetterpositionedtofulfil
our ambition to be the leading home
destination for the digital generation.”
Nicola Thompson
ChiefExecutiveOfficer
Stakeholder engagement and Section 172(1) of the Act
continued
46 MADE.COM Group Plc
Annual Report and Accounts 2021
Key decision case-studies
Decision Process 1: MADE’s IPO
Principal stakeholders impacted:
+ Shareholders
+ Employees
+ Designers and suppliers
Alongside other strategic options, the possibility of an
IPO was discussed between shareholders and Board
members. The objective was to identify the most
appropriate means for MADE to raise capital for the next
stage of its journey and to return value to longstanding
shareholders. In assessing the appropriateness to pursue
an IPO, the Directors met key shareholder groups,
including investor representatives, to discuss the
opportunity and what an IPO would mean for MADE.
The Board also discussed with shareholders the steps
that would need to be taken to prepare for an IPO,
including strengthening existing corporate governance
arrangements.
The Board were acutely aware that the IPO would
haveasignificantimpactonMADE’semployeesand
were conscious of the tension that the requirement
forconfidentialityaroundtheprocesswouldcreate
with the open and honest culture that MADE prides
itself on. A dedicated internal communications working
group was established, led by MADE’s HR Director.
The Board ensured that announcements regarding key
milestones including the fact of the IPO, were made
directly by the then CEO to employees and that
employees had the opportunity to ask questions of
the then CEO and other members of the Executive
Leadership Team in a live environment during
dedicated ‘All-Hands’ meetings.
In advance of the IPO, the Board had ensured that
all-employee share option schemes were structured
in such a way as to ensure MADE’s employees would
benefitdirectlyfromanIPO.Allemployeesholding
MADExEveryoneoptionsbenefitedfromvesting
acceleration upon completion of the IPO. The Board
also used the opportunity of the IPO to establish two
new all-employee share plans. Ensuring that
optionholders understood the impact of the IPO on
them formed an integral part of the Board’s internal
communications strategy.
At the time of the announcement of MADE’s IPO,
the Board, represented by members of the Executive
Leadership Team and Operations Leadership Team,
communicated directly with key suppliers to notify
them of MADE’s IPO and to reassure them that their
working relationship with MADE would not be impacted.
Raised
£100m
Stakeholder engagement and Section 172(1) of the Act
continued
47 MADE.COM Group Plc
Annual Report and Accounts
Stakeholder engagement and Section 172(1) of the Act
continued
Designers, Brands and Suppliers
What’s important?
+ brand values
+ fair terms and conditions
+ building long term partnerships
+ market reach and performance
MADE is committed to collaborating meaningfully.
We work with a wide range of designers, artists, brands
and suppliers and are proud of the close working
relationshipsthatwefoster.MADEoffersfairpayment
terms and supports our suppliers with volumes that
match our growth. Through our homewares expansion
we are excited to widen our network of designer-maker
partnerships and provide the opportunity for increasing
numbers of artisans and small businesses to come to
market. MADE does this whilst ensuring a high standard
of business conduct and governance as well as
continually working towards improving environmental
and social credentials.
How do we engage?
Site visits – we make sure that our suppliers commit to
meeting the highest standards of business conduct
and compliance through our terms and conditions and
by monitoring compliance through our on-the-ground
site visits. The Board has delegated authority to senior
management in local territories to work closely with
our factories to meet the highest possible standards,
andensureadherencetoMADE'sSupplierCode
of Conduct in respect of working conditions,
remuneration,safeenvironmentandzerotolerance
to child or bonded labour.
Direct engagement – with feet on the ground in key
sourcingandtradingcountries,theBoardcanbenefit
fromfirst-handreportstoensureoursupplychainis
operatingeffectivelyandfairly.TheBoardhas
delegated responsibility to members of MADE’s
Executive Leadership Team and logistics and sourcing
Directors to regularly meet with our supply chain
partners to problem solve any issues, share long-term
strategies and thereby cement lasting relationships.
Designers and brands – the Board values the creative
talent of the designers and artists that we are proud
to work with and recognises the opportunity that
expandingourhomewaresrangeoffersMADE.
The Board took steps during the year to support
this key strategic objective, including by approving a
partnership with the provider of a supplier enablement
platform to assist MADE with onboarding homeware
designersandbrandsmoreefficiently.
Community and Environment
What’s important?
+ sustainability
+ human rights
+ positive community impact
At MADE we are committed to doing what is right;
we act with integrity and treat people and the
environment with respect, honesty and fairness.
Accordingly, our impact on the environment and the
communities in which we operate are key to how
MADE does business. In 2021, the Board began work
on developing a sustainability strategy by setting out
certain key sustainability commitments, as detailed on
pages 54-63 of this Strategic Report. The Board
worked with senior management and employees to
reviewexistingmeasures;benchmarktheGroup’s
position against others in the sector; and review
potentialsolutionstoreducetheGroup’senvironmental
impact over the coming years. The Board agreed key
short-term and mid-term targets and actions to reduce
the environmental impact of the business and has
committed to communicate progress against the
agreed plan to all key stakeholders.
For details on MADE’s sustainability strategy and some
of the areas outlined above, please see the Approach
to Sustainability section on pages 54-63 of the
Strategic Report.
How do we engage?
Reward – the Board sets and regularly reviews
performance against sustainability objectives and an
element of senior management performance rewards is
tied to achievement of sustainability goals.
Sustainability team – we have a dedicated team
focused on developing, implementing and tracking
progress of the sustainability strategy adopted by the
Board. The team are supported by a sustainability
councilcomprisedofemployee‘champions'from
differentrolesacrossthebusiness.Thecouncilfocuses
on the implementation of the sustainability strategy in
real business-life situations and assist in embedding
MADE’s sustainability objectives across the Company.
Site visits – our on-the-ground teams make regular
visits to our manufacturing sites, ensuring fair working
practices, materials and quality.
48 MADE.COM Group Plc
Annual Report and Accounts 2021
Shareholders
What’s important?
+ corporate strategy
+ value creation
+ compliance, ethics and standards
+ governance
MADE recognises that the support of our shareholders,
both pre and post-IPO, has been integral to our
successful growth to date. As MADE transitioned to
public ownership, the Board set in place a framework
to ensure open engagement with existing and new
shareholders and potential investors and established a
dedicated, experienced Investor Relations team which is
responsiblefordesigningandimplementingtheGroup’s
Investor Relations strategy and ensuring ongoing clarity
of engagement. The strategy has been reviewed and
approved by the Board, with regular updates and
progress reviews at each Board meeting.
How do we engage?
Investor meetings – since the IPO, the Executive
Directors have made multiple presentations and held
both ad hoc and regular meetings with investors on key
areas of investor focus, including around trading
updatesandfinancialresults.Formoredetailsplease
see the calendar of events on this page of the
CorporateGovernanceStatement.
Online tools – an explanatory video was produced with
the(former)ChiefExecutiveOfficerandChiefFinancial
OfficertoprovidekeyinformationontheGroup’s
interim results. The video was distributed across a
popular retail investor platform to ensure as wide a
reach as possible to our shareholder base. We also
publish all key information, RNS announcements and
highlights on the Investor Relations section of MADE’s
corporate website.
Direct interactions – the Chair, and the Chair of each
Board Committee, set aside time to meet with
investors as and when required. In her capacity as Chair
of the Remuneration Committee and as part of her
inductiontotherole,GwynBurrwrotetoshareholders
with details of the Directors’ Remuneration Policy,
offeringhertimetomeetwithshareholderstodiscuss
their views.
Shareholder meetings between IPO and year-end 2021
Date Meeting
July/August
2021
Shareholder meetings and follow up
Q&A sessions with Executive
Directors and Investor Relations
14-17
September
2021
Investor Roadshow following H1
Results Announcement
October and
November 2021
Investor Relations and Executive
Directors hold one to one meetings
with new shareholders
November 2021 Investec ‘Best Ideas Conference’ –
CFO and Investor Relations
presentations
9-15 December
2021
Shareholder meetings and follow up
Q&A sessions held with Executive
Directors following December
trading update
6 January 2022 Shareholder calls and follow up Q&A
sessions held with Executive
Directors following the 2021 full-year
January trading update
Stakeholder engagement and Section 172(1) of the Act
continued
49 MADE.COM Group Plc
Annual Report and Accounts 2021
Stakeholder engagement and Section 172(1) of the Act
continued
“At MADE we are committed to doing
what is right; we act with integrity and
treat people and the environment
with respect, honesty and fairness”.
Nicola Thompson
ChiefExecutiveOfficer
50 MADE.COM Group Plc
Annual Report and Accounts
Key decision case-studies
DecisionProcess2:GlobalSupplyChainConstraints
Principal stakeholders impacted:
+ Designers and Suppliers
+ Customers
+ Shareholders
The global pandemic has had meaningful impact on
businesses across the world, and MADE is no
exception. The impacts of Covid-19 and resulting
factory closures, coupled with factors such as the
blockageoftheSuezCanalinMarch2021and
bottlenecks in the freight network, have presented
a number of industry-wide challenges and have had
significantimplicationsforoursupplyand
manufacturing network, which were regularly
considered by the Board.
Throughout the pandemic, we utilised our close
workingrelationshipswithour200+factoriestofind
responsible resolutions to the problems caused by
continuedrestrictions.Viaourlocalsourcingoffices
in China and Vietnam, the Board were able to deploy
local representatives to continue site visits (where
safe to do so) and work with factories to ensure that
local Covid-19 guidance was followed and that they
were operating with appropriate health and safety
measures in place.
The pandemic resulted in both temporary and
permanent closure of some factories, which had an
impact on MADE’s ability to sell and deliver products
to customers. These issues were exacerbated during
the year by global supply chain challenges resulting in
port congestion, resource shortages and material
freightcostinflation.TheBoardreceivedregular
updates from the Operations Leadership Team on
these challenges and took actions to minimise the
impact on customers, such as increasing stock
purchases and ensuring higher levels of express
stock were made available for order, increasing
our warehouse footprint and expanding our,
predominantlylocally-sourced,homewaresoffering.In
line with MADE’s strategic goal to provide a positive
customer experience, the Board prioritised
communication to customers, introducing new
‘update’ emails to keep customers informed of
progress of their orders and increasing visibility of
product lead times on the website.
WhilstanumberofMADE’speerssignificantly
increased their product prices to mitigate the
impact of increased freight costs, MADE
implemented price changes which improved it’s
relative price positioning, staying true to our
commitmenttoofferhigh-qualityproductstoour
customersatanaffordableprice.
Thesupplychainchallengeshadafinancialimpact
on MADE. The Board, via MADE’s Investor Relations
team, regularly responded to questions from
shareholdersregardingthepossiblefinancialimpact
of the global supply chain challenges, and a trading
update was issued prior to year-end directly
addressing this topic.
Stakeholder engagement and Section 172(1) of the Act
continued
51 MADE.COM Group Plc
Annual Report and Accounts
Section 172 responsibilities
ThefollowingtableidentifieswheremoreinformationcanbefoundonhowtheBoardhasdischargeditsresponsibilities
under section 172 when making decisions to promote the long-term success of the Company.
Strategic Report GovernanceReport
The likely consequences
of the decision in the
long term
Chair’s statement (pages 16-18)
Our strategy (pages 36-38)
Business model (pages 42-43)
Our approach to sustainability (pages
54-63)
Risk and viability report (pages 75-83)
Chair’s introduction to governance (pages
86-88)
CorporateGovernanceStatement(pages
90-91)
Corporate governance framework (pages
96-97)
Key Board activities (pages 100-101)
Succession planning (page 105)
Board diversity policy (page 106)
Audit and Risk Committee report (pages
107-113)
The interests of
MADE’s employees
Chair’s statement (page 16-18)
Our approach to sustainability (pages
54-63)
Risk and viability report (page 78)
Chair’s introduction to governance (pages
86-88)
Key Board activities (pages 100-101)
Succession planning (page 105)
Board diversity policy (page 106)
Remuneration Committee report (pages
114-131)
The need to foster
business relationships
with MADE’s suppliers,
customers and others
CEO statement (pages 20-25)
Our strategy (pages 36-38)
Non-financialkeyperformanceindicators
(page 41)
Business model (pages 42-45)
Our approach to sustainability (pages
54-63)
Risk and viability report (pages 75-83)
Chair’s introduction to governance (pages
86-88)
Key Board activities (pages 100-101)
Board diversity policy (page 106)
The impact of MADE’s
operations on the
community and the
environment
Chair’s statement (pages 16-18)
Non-financialkeyperformanceindicators
(page 41)
Our approach to sustainability, including
SECR and TCFD (pages 54-63)
Risk and viability report (pages 85-83)
Key Board activities (pages 100-101)
Board diversity policy (page 106)
Human rights and modern slavery (page 151)
Remuneration Committee report (pages
113-131)
Maintaining a reputation
of high standards of
business conduct
Chair’s statement (pages 16-18)
Our approach to sustainability (pages
54-63)
Risk and viability report (pages 75-83)
Chair’s introduction to governance (pages
86-88)
CorporateGovernanceStatement(pages
90-91)
Corporate governance framework (pages
96-97)
The Board’s role and reserved matters;
independenceandconflictsofinterest
(pages 98-99)
Board evaluation (page 105)
Board diversity policy (page 106)
Audit and Risk Committee report (pages
107-113)
Acting fairly between
MADE’s shareholders
Chair’s statement (page 16-18)
CEO statement (page 20-25)
Key performance indicators (pages 39-41)
Business model (pages 42-45)
Financial review (pages 65-74)
Risk and viability report (pages 75-83)
CorporateGovernanceStatement(pages
90-91)
Remuneration Committee report (pages
114-131)
Stakeholder engagement and Section 172(1) of the Act
continued
52 MADE.COM Group Plc
Annual Report and Accounts 2021
Non-financialinformationstatement
This section of the Strategic Report constitutes MADE’s non-financial information statement. The following
table outlines where key contents requirements of the non-financial information statement (as required by
sections 414CA and 414CB of the Act) can be found in this Report.
Reporting requirement MADE policies and procedures Section of Annual Report
Environmental + Cotton Sourcing Policy
+ Timber Sourcing Policy
+ Task Force on Climate-related Financial
Disclosures (TCFD) section, pages
62-63
+ Sustainability, pages 54-63
People + Diversity, Equality and Inclusion Policy
+ Health and Safety Policy
+ Directors’ Report, pages 149-152
+ Sustainability, pages 54-63
+ Stakeholder engagement, pages 44-52
Human rights + Modern Slavery Statement
+ Ethical Trading Initiative membership
+ Supplier Code of Conduct
+ Sustainability, pages 54-63
Social matters + Employee Volunteering Policy
+ Ethical Trade Initiative Membership
+ MADE.com Supplier Audit Process and
Audit Standards
+ Sustainability, pages 54-63
Anti-corruption and
anti-bribery
+ Anti-corruption policy
+ Whistleblowing policy & hotline
+ Sustainability, pages 54-63
+ Stakeholder engagement, pages 44-52
Additional disclosure + Business Model, pages 42-43
+ Key Performance Indicators, pages
39-41
+ Principal Risks, pages 77-80
53 MADE.COM Group Plc
Annual Report and Accounts 2021
Our approach to sustainability
Our approach
At MADE, we believe in the transformative power of
great design, and its ability to have a lasting, positive
impact on people, communities and the planet.
We are committed to ensuring that sustainability is
embedded into every aspect of our operations, our
strategy and our business model.
We endeavour to produce responsibly, a goal which
aligns strongly with the values and expectations of our
customers and one which we are uniquely positioned
to deliver, thanks to our business model.
We are committed to numerous responsible sourcing
targets over the next 5 years, including:
+ reaching 100% recycled or recyclable packaging
by 2025
+ reaching 100% sustainably sourced key materials
such as cotton and polyester (including polyester
velvet) by 2025
+ reaching 100% sustainably sourced, fully traceable
timber in 2025; and
+ to give all customers the opportunity to repurpose,
refurbish and recycle preloved pieces by 2025
We are pleased to be able to report on our progress to
date against these targets on page 60 of this Annual
Report.
We recognise, however, that being a truly responsible
business requires us to think beyond our products and
packaging, to the people we employ and the designers
and suppliers we work with. During the second half of
the year, we have worked with a third-party partner
to conduct a thorough review of our sustainability
framework. This review has allowed us to identify three
key pillars that make up this framework: People,
Partners and Planet. We are pleased to be able to
report on each of these three pillars in this Annual
Report.
The work we have done to date has allowed us to
lay the groundwork for the development of our
sustainability strategy, ‘Better by Design’. Over the
coming months we will develop this strategy further so
that we will be able to set targets under each pillar to
set a clear direction for what we want to achieve. We
will also build detailed roadmaps, metrics and KPIs to
help us achieve these targets.
54 MADE.COM Group Plc
Annual Report and Accounts 2021
Better
by
design
Pillar
People
Championing diversity, wellbeing and
continuous improvement
Partners
Creating a positive and lasting impact
on the communities we work in
Planet
Leading the industry on mitigating the
environmental impact of our activities
Theme
Diversity and inclusion
Building a company that suceeds
through diverse people and viewpoints
Wellbeing and development
Enabling our people to thrive in and
out of the workplace
Supply chain
Building sustainable supply chains
that champion ethical practice
Givingback
Investing in the communities
that we operate in
Design community
Championing a vibrant, diverse and
successful design community
Reducing impact
Mitigating the impact of our activities
across manufacturing, logistics and
administration
Empowering customers
Enabling customers to make more
informed and more sustainable
decisions
Being a truly responsible business
Our approach to sustainability
continued
55 MADE.COM Group Plc
Annual Report and Accounts
Our approach to sustainability
continued
Governance:Howweembedsustainabilityin
our business
Our commitment to producing responsibly underpins
everything we do at MADE. We know that in order to
deliver against that commitment, we must ensure that
sustainability is embedded throughout the business.
To help achieve this, all our employees are encouraged
to consider the environmental and social implications
relevant to their decision-making and to hold the Board
and Executive Leadership Team to account on matters
relating to sustainability. The diagram below sets
out how we intend to govern sustainability matters
through FY22.
Board + Oversight of and responsibility for environmental,
socialandgovernance('ESG')mattersandapproval
of strategy
+ Monitors progress through KPls, Board reports and
quarterly updates at Board meetings.
+ Embedding into the ELT’s remuneration metrics
Executive Leadership Team + WillapprovetheESGstrategyforsubmissionto
the Board
+ AccountablefordeliveryofESGstrategyand
performance
+ HaveESGtargetsembeddedintotheirbonusand
long-term incentive structure
+ MonitorsESGprogressthroughKPls,reportsand
updates at fortnightly ELT meetings
+ Represented by an individual on the Diversity and
Inclusion Council
Sustainability Team + A dedicated team
+ DevelopsESGpoliciesandprovidespractical
guidance to employees on compliance
+ Keeps up to date with legal and best practice
+ Develops strategic objectives, targets and
initiatives for recommendation to the ELT and
Board
+ Provides regular, Company-wide updates on
progressagainstESGtargets
All employees + ReceiveupdatesonprogressagainstESGtargets
+ Provide challenge to the ELT on commitment to
ESGinitiatives
+ Held accountable for ensuring compliance with
best practice standards
Better by design framework
56 MADE.COM Group Plc
Annual Report and Accounts 2021
Our approach to sustainability
continued
People
+ Mission: to champion diversity, wellbeing and
development
+ Executive Leadership Team oversight: HR Director
Our people are at the core of everything we do at
MADE and the strength of our global teams is integral
to our ability to deliver consistently high growth. In line
with one of our core values, to do what is right, we are
committed to ensuring that our employees feel safe,
comfortable and supported in the workplaces in which
they operate and we have placed an increased focus on
the topics of wellbeing and development and diversity
and inclusion throughout FY21.
Wellbeing & Development
Enabling our people to thrive in and out of the
workplace
The protection of our employees’ wellbeing and health
and safety is, and has always been, a key priority at
MADE. MADE has a global Health and Safety Policy,
approved by the (then) CEO on behalf of the Board,
andwehavestronglyreinforcedtheneedforsafetyfirst
as we have continued to navigate the Covid-19
pandemic. The Health & Safety Policy sets out clear
guidance in respect of health and safety monitoring,
assessment, training and incident reporting, as well as
setting out key stakeholders and their responsibilities in
fulfillinghealth&safetyrequirements.Wewelcomeour
employees to contribute to the conversation regarding
their wellbeing and safety and ran a survey to help
gauge what our employees needed to feel safe, well
and protected as they returned to the workplace. In
response to this, we launched our ‘New Ways of
Working’ trial and continue to monitor employee
feedback on the topic of wellbeing.
Other Wellbeing & Development highlights for the year
include:
+ rolled out use of third-party software to assess
employee wellbeing
+ became the sixth in the Retail Week list of top
retailerstoworkforintheUK(4.5/5onGlassdoor
feedback)
+ Calm app rolled out
+ trained team of Mental Health First Aiders
+ delivered Management & Leadership Development
Programme, to ensure our managers have the skills
and behaviours they need to inspire and motivate
their teams
+ partneredwithMentorforGrowthforthethird
consecutive year
+ held monthly ‘All hands’ meetings sharing progress
against strategic pillars
+ launched Brilliant Breakfast webinar series, giving
employees the opportunity to hear from senior leaders
and external guests on topics such as career
development, personal success, and happiness at work
+ numerousteamoff-sitesheldtoencourage
collaboration and networking within the business
+ UK Culture Club drove numerous initiatives to help
employees feel connected and stay positive during
periods of working from home
Some areas of focus for FY22 include:
+ makingfirstdedicatedLearning&Development
leadership hire
+ developing our Learning & Development strategy to
increase visibility and accessibility of development
opportunities
+ supporting our Culture Club to enable a more global
approach
Diversity & Inclusion
Building a company that succeeds through diverse
people and viewpoints
MADE is committed to creating a diverse and inclusive
workplace in each of our locations across the globe.
Our Diversity, Equality & Inclusion Policy sets out how
we expect our people and customers to be treated
and our aspiration to promote a diverse, inclusive and
representative working environment in which everyone
is free from unlawful discrimination, harassment and
bullying, and where everyone’s voices are heard.
The policy highlights our commitment to creating a
working environment in which decisions about
recruitment and selection, promotion training or any
otherbenefitarebasedonmeritandfreefromunlawful
discrimination.
The Diversity & Inclusion Council meets regularly to
monitor the impact of the policy and updates on
topics such as gender equality are provided at Board
meetings.
57 MADE.COM Group Plc
Annual Report and Accounts 2021
Our approach to sustainability
continued
The policy is framed around three key pillars, which
underpin our diversity and inclusion strategy:
1) To Listen – MADE will listen in order to understand
its employees, customers, partners and
stakeholders.
2) To Educate – MADE will educate its employees,
offeringregularopportunitiesforongoingand
consistent learning.
3) To Challenge – MADE will invite challenges on
decision making in all areas of our business and
stand up for what is right.
In line with this strategy, in 2021 we made progress in
the following areas:
Listen + continued to sponsor the work of the
Diversity & Inclusion Council
+ reviewed how we present ourselves
and our external partnerships
Educate + inclusion training was rolled out for all
MADE employees
+ launched a Mental Health First Aid
Scheme
+ set the foundations for better data
collection on our internal diversity
metrics
Challenge + ended our ‘refer a friend scheme’
+ launched ‘Blind CV’ screening
+ launched a whistleblowing hotline for
employees
+ held Q&A sessions at our monthly ‘All
Hands’ meetings
Some of the areas of focus for FY22 include:
+ enhancing our data dashboard to better understand
the impact of our processes and the demographic of
our workforce
+ developingoffive-yearGenderPayGapstrategy
+ onboarding new tools to assist with data tracking of
our talent
Partners
+ Mission: to create a positive, lasting impact on the
communities we work in
+ Executive Leadership Team oversight: Product &
SourcingDirector/ChiefExecutiveOfficer
We recognise that we have a responsibility to our
customers to help them shop sustainably, and we know
that they genuinely care about who we partner with
andhowwelooktomakeadifferenceinthe
communities in which we trade. We collaborate
meaningfully with suppliers, charities and designers to
ensure that MADE’s impact on the planet, our people
and communities is a positive one.
Supply chain
Building sustainable supply chains that champion
ethical practice
We are committed to upholding human rights across
our supply chain. Our Modern Slavery Statement sets
out the systems and controls we have put in place in
order to safeguard against any form of modern slavery
taking place within our business and supply chain.
Our onboarding process for suppliers, as dictated by
our Supplier Audit Process & Audit Standards, includes
the requirement that all our suppliers agree to comply
with our Supplier Ethical Code of Conduct, which sets
out standards with regards to working conditions, as
well as supply chain traceability, visibility and
transparency. Our suppliers must also agree to assist
and cooperate with us on any due diligence checks,
audits and inspections that we may undertake to verify
their compliance with these commitments.
We recognise that cross-industry collaboration is
essential to tackle the human rights challenges that
arise in businesses like ours. During the year we
became a member of the Ethical Trade Initiative and
participated in numerous working groups, thereby
contributing to the dialogue about the steps
companies should take to trade ethically and to make
apositivedifferencetoworkers’lives.
Genderdisclosure
1
#
Male
#
Female
%
Male
%
Female
Board 6 2 75 25
Senior Managers
2
(the Executive Leadership Team) 3 4 43 57
Senior Managers and their Direct Reports 25 13 66 34
All employees 281 438 39 61
1. Thesefiguresreflectthepositionasat31December2021,anddonotreflecttheBoardcompositionasaresultofthedepartureofPhilippe
Chainieux as CEO or appointment of Nicola Thompson as CEO.
2 ForthepurposesoftheAct,thisreferenceto'SeniorManagers'includesalloftheDirectorsoftheCompany'ssubsidiaries.
58 MADE.COM Group Plc
Annual Report and Accounts 2021
Conducting our business in an honest and ethical
manneralsorequiresustoencourageazero-tolerance
approach to bribery and corruption at all levels within
the organisation globally. We have in place an Anti-
Corruption Policy, which outlines acceptable and
non-acceptable behaviours to ensure compliance with
anti-corruption laws. Our Whistleblowing Policy sets
out our policy on disclosing malpractice and our
confidentialwhistleblowinghotlineisavailabletoall
employees across the business. During the year we
rolled out mandatory Anti-Bribery & Corruption training
across the business to help our employees understand
the importance and relevance of these topics to their
day-to-day life at MADE.
Supply chain highlights for the year include:
+ rolled out Modern Slavery training for Executive
Leadership Team and Product Teams
+ ethically audited and graded all own label Tier One
factories
+ implemented policy restricting the onboarding of any
high-risk own-label factories
Some of the areas of focus for FY22 include:
+ rolling out Modern Slavery Training to wider business
includingregionaloffices
+ providing training to UK factories on Modern Slavery
& Labour Exploitation
+ working towards publishing a MADE factory list on our
corporate website (https://corporate.made.com/)
+ exploringacharity/NGOpartnershiptotargetakey
issue in our supply chains
GivingBack
Investing in the communities in which we operate
We believe that MADE is able to bring meaningful value
to local communities and recognise the importance of
providing our employees with the opportunity to make
their own contribution to the communities in which we
operate. Our Employee Volunteering Policy allows all
regularMADEemployeespaidtimeofftotakepartin
volunteering activities with a recognised charity or
community organisation. This policy, along with MADE’s
ongoing commitment to charitable work, has allowed us
to develop meaningful relationships with charities such
as Future Frontiers, an initiative with which we are proud
to have partnered with for a third consecutive year.
This partnership involves MADE employees giving their
time to coach students on important topics such as
university and apprenticeship plans, possible career
paths and development plans.
GivingBackhighlightsfortheyearinclude:
+ won a silver award at the Retail Week Awards in the
category ‘Best Frontline Hero Initiative’ in recognition
of the 2,500 pieces of furniture and homewares
donated to 152 hospitals during the pandemic
+ won two awards for our MADEover campaign at
InfluencerMarketingAwards–transformedspaces
such as the Future Dreams Breast Cancer support
house and Charles Pearson Court care home
+ participated in the Future Frontiers programme
mentoring disadvantaged school children
+ partnered with French charity Les Resilientes
Emmaus to launch a circular collection
Some of the areas of focus for FY22 include:
+ identifying the charitable causes close to our
employees’ hearts so that we can collectively unite
behind a common purpose
+ expanding employee volunteering opportunities by
partnering with more organisations
Design community
Championing a vibrant, diverse and successful design
community
Werecognisethatwewouldnotbeabletoofferour
customers the highly curated product selection we do
today without our unique and unreplicable design
ecosystem, comprised of external design talent,
emerging design talent, in-house design teams and
designer makers. We continue to evolve our pool of
external design talent to keep long-term partnerships
thriving, add new diverse talent and ensure we stay
current, fresh and continue to inspire. The development
ofourhomewareofferinggivesustheopportunityto
partner with up-and-coming brands and artisans (who
we call, designer makers), giving them the same
opportunitywehavealwaysofferedtoindependent
furniture designers.
Design community highlights for the year include:
+ 100+ brands onboarded at end of FY21
+ 10 new external design partnerships formed and
launched across furniture, textiles and lighting in 2021
Some areas of focus for FY22 include:
+ over 20 new designers to be added to our ecosystem
including key new taste-makers from around the
globe
+ scoping a new initiative to support emerging talent
+ continuingtoraisetheprofileofalldesignersonour
website
+ designing for circularity
Our approach to sustainability
continued
59 MADE.COM Group Plc
Annual Report and Accounts 2021
Our approach to sustainability
continued
Planet
+ Mission: to lead the industry in mitigating the
environmental impact of our activities
+ Executive Leadership Team oversight: Product &
SourcingDirector/ChiefExecutiveOfficer
Our ability to manage our supply chain allows us to
mitigate the impact of our activities and the products
we sell. We design products with their longevity in mind
and we believe that our approach in this aligns strongly
with the core values of our predominantly millennial
customer base, who are increasingly focused on
transparency, sustainability and integrity to inform their
brandchoiceandpurchasingdecisions.Byoffering
give-away and take-back schemes we want to
empower our customers to join us on our journey to
becoming a truly responsible business. For further
information on our commitment to combating climate
change what we are doing as a business to mitigate
MADE'simpactsonthePlanetandpleaseseethe
TCFD statement on pages 62-63 of the Strategic
Report.
Reducing impact
Mitigating the impact of our activities across
manufacturing, logistics and administration
During the year, we focused on four key areas where
weknowwecanmakeameaningfuldifference:
Responsible timber sourcing – many of our products
are crafted from wood. As set out in our Responsible
Timber Sourcing Policy, we’re committed to ensuring
we use timber sourced from responsibly managed
forests, avoiding contributing to deforestation. We do
this by tracing our timber back to forest level and
selecting well-managed routes/sources, as well as using
recycled wood where possible.
We are pleased to report that we have exceeded our
2021 goal for 60% of our timber to come from more
sustainable sources, which includes traceable timber,
recycledtimberorfromsourcescertifiedasbeing
responsibly managed.
+ 2021 Target: 60% responsibly sourced,
fully traceable timber
+ achieved: 70% responsibly sourced, fully traceable
timber
+ 2025 Target: 100% responsibly sourced,
fully traceable timber
Responsible textile sourcing – our choice of materials
matters. And we’re on a mission to ensure that two of
our key textiles – cotton and polyester – create less
environmental impact. Our Responsible Cotton
Sourcing Policy requires all of our suppliers to have
visibility of the source of raw cotton used in our
products, and we do not accept the procurement of
cotton from the province of Xinjiang in China or the
countriesofUzbekistanorTurkmenistan.
+ 2021 Target: 25% recycled or organic cotton, 15%
recycled or other sustainably sourced polyester
+ achieved: 25% recycled or organic cotton, 24%
recycled or other sustainably sourced polyester
+ 2025 Target: 100% sustainably sourced key
materials
Responsible packaging – there’s a delicate balance
between protecting our products in transit to prevent
damage (which creates waste) and over-packaging
(which also creates waste). From listening to our
customers’ feedback, they feel the same. So, our plan
is to eliminate all unnecessary plastic from our
packaging, and ensure that what we do use is recycled
and recyclable.
+ 2021 Target: 25% reduction in plastic, 20%
reduction in total packaging
+ achieved: 29% reduction in plastic, 27% reduction
in total packaging
+ 2025 Target: 100% sustainably sourced key
materials
Additionally, in 2022 we plan to undertake Scope 3
carbon emission assessment and agree Scope 3 action
plan and targets.
60 MADE.COM Group Plc
Annual Report and Accounts 2021
Empowering Customers
Enabling customers to make more informed and
sustainable decisions
Alongside our commitments in relation to materials and
packaging sits our commitment to embedding
circularity solutions into our business model:
Responsible end of life – we want to make it easy for
our customers to donate their old furniture, thereby
empowering them to directly tackle the waste issue
inherent in our industry. That’s why we launched our
partnershipwithGEEVduringtheyearintheUKand
France.Thisschemeofferscustomerstheopportunity
to donate 10% of their MADE order value to charity if,
at the time of placing their order, they list their
unwanteditemforsaleontheGEEVplatform.
Empowering Customers highlights for the year include:
+ 270+eligibledonationsviaGEEVsincelaunchinMay
+ introduced onsite product sustainability badges to
customers
Breakdown by emitting source 2021 2020
Scope GHG Source Unit UK RoW Tot al UK RoW Total
GlobalScope1(direct
emissions)
Natural gas tCO
2
e 21.8 14.3 36.1 23.7 17.0 40.7
Refrigerants tCO
2
e 152.7 49.1 201.8 152.7 49.1 201.8
Total combustible fuel tCO
2
e 174.5 63.4 237.9 176.4 66.1 242.5
GlobalScope2(indirect
emissions)
Purchased electricity
(location based)
tCO
2
e 220.7 61.7 282.4 204.8 123.7 328
Purchased electricity
(market based)
tCO
2
e 309.3 52.5 361.8 278.1 93.7 372
Total Scope 1 and 2 (location based) tCO
2
e 395.1 125.1 520.3 381.1 189.8 571.0
Total Scope 1 and 2 (market based) tCO
2
e 483.8 115.9 599.7 454.4 159.8 614.3
Scope 3 (other indirect
emissions)
Business travel tCO
2
e 11.1 N/A 11.1 19.0 N/A 19.0
GlobalEnergy MWh 1,204 354 1,557 1,090 466 1,556
The impact of our Scope 1 and 2 emissions per full time equivalent (FTE) employee and per square footage of
directly occupied space has been calculated and reported as key metrics in the table below:
Breakdown by Metrics 2021 2020
Scope Metric UK RoW Total UK RoW Total
Total Scope 1 and 2
(location based)
tCO
2
e per FTE employee 0.7 0.7 1.4 0.8 1.1 1.9
tCO
2
epersq.ft.floorarea 0.0 0.0 0.0 0.0 0.0 0.0
Total Scope 1 and 2
(market based)
tCO
2
e per FTE employee 0.9 0.6 1.5 1.0 0.9 1.9
tCO
2
epersq.ft.floorarea 0.0 0.0 0.0 0.0 0.0 0.0
Ouremissionshavebeenverifiedtoareasonablelevelofassurancebyanexternalthirdpartyaccordingtothe
ISO 14064-3 standard.
Some areas of focus for FY22 include:
+ select key partner(s) who will help us deliver our
ambitiontoofferatakeback/productendoflife
market in every market in which we operate
+ provide circular design training for Design team
+ establish clear roadmap for proposed 2025 MADE
take back scheme
Streamlined Energy and Carbon Reporting (SECR)
Annual Reporting and Carbon Statement
This statement has been prepared in accordance with
our regulatory obligation to report greenhouse gas,
('GHG')emissionsandenergyconsumptionin
accordance with Streamlined Energy and Carbon
Reporting requirements in the UK.
Our emissions data for the years ended 31 December
2021 and 31 December 2020 are presented in the
following table:
Our approach to sustainability
continued
61 MADE.COM Group Plc
Annual Report and Accounts 2021
Our approach to sustainability
continued
Methodology
WequantifyandreportourorganisationalGHG
emissions and energy consumption in alignment with
theWorldResourcesInstitute’sGreenhouseGas
Protocol Corporate Accounting and Reporting Standard
andinalignmentwiththeScope2Guidance.We
consolidate our organisational boundary according to
the operational control approach. We have adopted a
materialitythresholdof5%forGHGreporting
purposes.TheGHGsourcesthatconstitutedour
operational boundary for the year are:
+ Scope1:Gasandrefrigerant
+ Scope 2: Electricity
+ Scope 3: Transport fuel (petrol and diesel)
In some cases, where data is missing, values have been
estimated using either extrapolation of available data or
data from the previous year as a proxy. In relation to
energy consumption, where data is not provided in kWh
(such as Scope 3 transport data which is provided in
miles), a calculation is applied using the relevant
conversion factors as guided by the World Resources
Institute'sGreenhouseGasProtocolCorporate
Accounting and Reporting Standard. Relevant
conversion factors have also been applied against the
collated consumption data to calculate emissions.
TheScope2Guidancerequiresthatwequantifyand
reportScope2emissionsaccordingtotwodifferent
methodologies (‘dual reporting’): (i) the location-based
method, using average emissions factors for the
country in which the reported operations take place;
and (ii) the market-based method, which uses the
actual emissions factors of the energy procured.
Statement of exclusions
No known exclusions.
Energyefficiencyaction
Overthecomingyear,theGroupplanstoreduce
energy consumption through our supply chain and
infrastructure footprint, as it has during 2021.
Continuedinitiativesincludeofferingcustomers
opportunities for their old products to have a second
life,improvingenergyefficiencythroughtheGroup’s
officesandincreasinglyworkingwithlogisticspartners
who promote the use of renewable energy sources and
moreenergyefficientwaysofworking.
Task Force on Climate-related Financial Disclosures
As a responsible retailer of high-quality furnishings and
homeware, MADE is committed to implementing the
recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD). The Board recognises
MADE’s responsibility to combat climate change in its
ownoperationsandsupplychain,whichisreflectedin
ourBetterbyDesignESGstrategyoutlinedonpages
54-60. Our disclosures in accordance with Listing Rule
9.8.6(8), which relate to the TCFD recommendations
and recommended disclosures, are set out below.
Throughout the year, MADE has taken a number of
steps towards being able to comply fully with the TCFD
recommended disclosures. Where full compliance is not
yet possible, disclosure is included as to the future work
planned to facilitate full compliance, in particular the
recommended disclosures (c) in relation to Strategy and
(a) and (c) in relation to Targets and Metrics.
Governance
TheBoardhasultimateoversightoverallESGmatters,
including climate-related risks and opportunities, and
willapprovetheESGstrategytobedevelopedin2022.
The Board will be responsible for monitoring of progress
againstbothclimate-relatedandbroaderESGgoals
and targets which will be a regular agenda item. The
Board will also be supported by the Audit and Risk
Committee, which is responsible for the oversight of
risk management processes and controls, and which will
consider climate-related risks as part of its role in
reviewingMADE'sprincipalandemergingrisks.
The Executive Leadership Team, which reports to the
Board, is accountable for the delivery and performance
of our climate strategy, and will monitor climate-related
issues (including climate-related risks and
opportunities) and progress against the strategy
through KPIs, reports from third-party consultants
such as Flourish CSR and updates at fortnightly ELT
meetings. The ELT will provide regular updated to the
Board on the climate strategy issues to enable the
Boardtoexerciseaneffectiveoversightroleand
monitor relevant goals and targets.
In 2022, the Board will adopt a formal governance
timetable,withquarterlyupdatesonESG-related
matters being provided to the Board by the ELT to
further drive the understanding of, and responsibility
for, climate-related issues at Board-level.
MADEhasidentifiedthreeclimateactionworkstreams
withinitsESGstrategy:(1)NetZeroandClimate
Resilience, (2) Responsible Materials and (3) Packaging
and Circularity.
OurapproachtoESGgovernanceissetoutonpage56.
Strategy
In 2021, we engaged with a third-party consultant,
Flourish CSR, who worked closely with members of
the ELT and Sustainability Team, to undertake an
initialassessmentofMADE’sexposuretoESGrisks,
including both physical and transitional climate-related
risks,usingtheLandmarkRiskHorizonsystem.
Theassessmentidentifiedhighlevelrisksbyindustry
sectorsandgeographicalregionsasdefinedbythe
Sustainable Accounting Standards Board (SASB) using
data from authoritative global databases.
62 MADE.COM Group Plc
Annual Report and Accounts 2021
Throughout 2022 we will be taking further steps to
integrate climate-related risk management into MADE’s
existing risk management processes, with a focus on
identifyinghowthemostsalientrisksidentifiedinthe
initial assessment below impact on the business,
strategyandfinancialplanning.Risksdenotedwitha*
are considered at this stage as the risks most
impacting MADE and our business model which could
potentiallyhaveafinancialimpactonMADE.
Short term (1-2 years)
Physical risks
+ Supply chain disruption impacting materials sourcing
and manufacturing as a result of extreme weather
events(e.g.forestsfires,droughts,orfloods)*
Transition risks
+ increased reporting requirements and compliance
(including TCFD, waste regulation and plastics tax)
+ resource and budget impacts related to medium- and
long-term delivery of decarbonisation targets,
mapping, and reporting
+ Likelihood of increased logistics, freight & shipping
costsasdeliverynetworksdecarbonise*
Medium term (until 2030)
Physical risks
+ impacts to access of materials, including the
restrictions, cost, types, and supply security of
availablematerials*
Transition risks
+ disruption to logistics as a result of changes to
shipping routes, delivery times, cost and carbon tax,
andwarehousinglocations*
+ regulatory barriers relating to product design,
end-of-life recycling & labelling requirements
+ reputational risks arising from inaction on climate
risks and dependency on non-renewable resources
Long term (until 2050)
MADE plans to conduct analysis into a number of
potential climate related scenarios in order to fully
understand our long-term climate-related risks and
opportunities.
Actions
As a result of this risk assessment, we have committed
to the following short term (in the next 1-2 years) and
medium term (by 2030) actions.
Short term
+ developafullESGstrategyin2022
+ target key material supply chains for deeper analysis
– mapping lower tiers to improve transparency and
identify climate and social risks
+ extend the Responsible Sourcing Policies to cover a
broader range of raw materials used in MADE products
Medium term
+ deliver against the next stages of the 2025
sustainability targets
+ increase the choice of circular service solutions
for customers
+ establish due diligence processes for Responsible
Sourcing Policy enforcement
+ establish a chemical policy and associated due
diligence programme
+ model impacts against 2ºC and 4ºC global heating
scenarios
The Board is continuing to assess the resilience of
MADE'sstrategytoclimate-relatedrisksand
opportunities and the scenario modelling described
above will assist with this. The Board intends to take the
sameapproachasforprincipalrisks(asidentifiedon
pages 75-80) in determining how MADE’s strategy and
financialplanningmightevolvetotakeaccountof
climate-relatedrisksandopportunitiesidentified.
Risk Management
Risk management is an integrated part of the overall
governanceandmanagementoftheGroup.Following
our initial salient risk assessment described above, our
ongoingidentification,assessmentandmanagementof
climate-related risks and opportunities are integrated
into the existing processes of the Audit and Risk
Committee, which are detailed on pages 107-113.
Regulatory developments in response to climate
change were assessed as a principal risk in 2021 and a
number of mitigating actions have been implemented
as a result (see further detail on page 80). The Board
willcontinuetoundertakehorizonscanningtoidentify
emerging climate-related risks.
Metrics and Targets
InourfirstyearofreportingunderTCFD,wehave
started to identify the risks and opportunities that we
consider material to our business model and strategy.
In2022wewillassesswhichspecifictargetsand
metrics we consider to be most relevant for our
businesstoeffectivelymonitorandmanageclimate-
related risks and opportunities.
These climate-related metrics and targets will be
monitored in conjunction with the metrics and targets
we plan to develop in 2022 as well as those already
developed and outlined on pages 54 and 60 of the
Strategic Report. to monitor progress against our
‘BetterbyDesign’ESGstrategy,whichwillbe
embedded into the remuneration metrics of the
Executive Leadership Team.
In 2021 we completed a Scope 1 and 2 Carbon
Emission Assessment, which is detailed on page 61.
In 2022, we will undertake a Scope 3 assessment to
formulate our Scope 3 action plan and targets.
Our approach to sustainability
continued
63 MADE.COM Group Plc
Annual Report and Accounts 2021
AdrianEvans,ChiefFinancialOfficer
hrough 2021 we continued to
deliverstrongfinancialresults.
We delivered gross sales growth of
38% year-on-year to £434m, revenue
growth of 50% year-on-year to
£372m, adjusted EBITDA of £(14.3)m,
loss before tax of (31.4m) and with
£107m net cash at 31 December 2021.
We delivered these results despite
extensive industry-wide supply chain
disruptions experienced due to the
Covid-19 pandemic. Through the year
wemanagedtolimitfinancialimpacts
through self-help mitigations we put
in place.
T
Financial review
64 MADE.COM Group Plc
Annual Report and Accounts 2021
“We have focused on investing in
reduction of lead times to our
customersanddeliveringthefirst
stages of our technical infrastructure,
enabling us to scale our curated
marketplace following a successful
beta test. These investments are
already delivering positive results.”
Adrian Evans
ChiefFinancialOfficer
Financial review
continued
65 MADE.COM Group Plc
Annual Report and Accounts
Financial review
continued
Rapidgrowth,deliveringunderlyingcostefficienciesand
with a strong balance sheet
On 16 June 2021 we listed on the premium segment of
the London Stock Exchange. The listing raised £100m
gross proceeds, which leaves us with a strong balance
sheet and the ability to invest into our strategic growth
initiatives to enhance customer experience, accelerate
range expansion and build Continental European brand
awareness. In line with expectations set at the point of
our listing, through the second half of the year we have
focused on investing in reduction of lead times to our
customersanddeliveringthefirststagesofourtechnical
infrastructure, enabling us to scale our curated market
marketplace following a successful beta test. These
investments are already delivering positive results.
Financial highlights for 2021 are presented below:
+ strong trading performance delivering £434m gross
sales, +38% year-on-year growth, +79% growth on
a two-year basis and +40% on a constant FX basis
1
+ customer metrics underpin gross sales growth, with
last 12 month active customers at 1.3m, +26%
year-on-year, with AOV at £246, +8% year-on-year
1
+ revenue of £372m, +50% year-on-year
+ deferred revenue closed the period at £56m, +6%
year-on-year +184% on a two-year basis,
representing a high level of customer orders remaining
to be delivered and recognised as revenue in 2022
+ gross margin was 46.3%, down 694 bps year-on-year
primarilyduetoglobalfreightinflationarypressures.
Grossmarginexcludingfreightcostswas193bps
year-on-year
1
+ reported losses before tax were £(31.4m) including
one-offIPO-relatedP&Lchargesof£5.3mand
share-based payment charges of £3.5m
+ adjusted EBITDA of (£14.3m) a movement of (£9.2m)
year-on-year, with cost leverage across all operating
costlines,butadverselyaffectedbyindustrywide
globalfreightinflationandsupplychaindisruption
impactingrevenuerecognitiontimingduringthefinal
quarter of 2021
+ capital expenditure in the year was £14m or 3.8% of
revenue. This included ongoing investments into our
logistics and technology infrastructures
+ inventories increased 193% year-on-year to £63m,
reflectingourinvestmentincustomerexperienceby
reducing lead times, whilst maintaining a negative
working capital position and a low inventory base
in 2020
+ net cash was £107m at the end of the period giving
usaveryrobustbalancesheet.Freecashflowwas
£(32)m as working capital and inventory were partly
normalised
1
1 Please refer to pages 72-73 for full details of these APMs and
reconciliation to statutory measures.
66 MADE.COM Group Plc
Annual Report and Accounts 2021
Financial review
continued
Year to
31 December
2021
Year to
31 December
2020 Change
Revenue (£m) 372 247 50%
UK 193 129 50%
Continental Europe 179 118 51%
Grossmargin 46.3% 53.2% (6.9ppt)
Grossmarginexcludingfreight 58.5% 56.5% 1.9ppt
Fulfilmentcosts(%revenue)
1
21.5% 22.9% (1.4ppt)
Marketing costs (% of revenue)
1
17.8% 20.3% (2.5ppt)
Marketing costs (% of gross sales)
1
15.3% 16.0% (0.7ppt)
UK 11.3% 11.9% (0.6ppt)
Continental Europe 19.7% 20.6% (0.9ppt)
Overhead costs (% of revenue)
1
10.8% 12.1% (1.3ppt)
Adjusted EBITDA (£m) (14.3) (5.1) 180%
Adjusted EBITDA margin
1
(3.8%) (2.1%) (1.7ppt)
UK 7.4% 12.9% (5.5ppt)
Continental Europe 1.2% 0.8% 0.4ppt
Reported loss before tax (£m) (31.4) (14.6) 115%
Capital Expenditure (£m) 13.7 5.6 145%
Net Working Capital (£m)
1
(54) (58) (7%)
Net Cash (£m)
1
107 50 114%
Free Cash Flow (£m)
1
(32) 22 (245%)
1 Refertopages72-73fordefinitionsofeachoftheseAPMs
67 MADE.COM Group Plc
Annual Report and Accounts
Financial review
continued
Revenue and deferred revenue
Year to
31 December
2021
£'m
Year to
31 December
2020
£'m Change
Grosssales
(1)
434 315 38%
UK 228 165 38%
Continental Europe 206 150 38%
ConstFXGrossSales 434 310 40%
Deferred revenue 56 53 6%
Revenue 372 247 50%
UK 193 129 50%
Continental Europe
179 118 51%
Const FX Revenue 372 246 51%
FY21 revenue grew at 50% year-on-year to £372m, with the growth rate in the UK at 50% and 51% in
Continental Europe.
Year-on-year revenue growth was ahead of gross sales growth due to a high level of outstanding customer orders
placed in FY20 being dispatched and delivered to customers during FY21 and thus being recognised as revenue
in FY21.
Deferred revenue (customer orders taken, but not yet delivered) remained elevated at the end of FY21 due to
ongoing industry-wide supply chain disruptions. Deferred revenue as of 31 December 2021 was £56m,
representing 6% year-on-year growth. As high levels of stock intake continue to support our programme to
reduce customer lead times to an average of 3-4 weeks in H122 we expect deferred revenue to unwind to a more
normalised level, delivering corresponding revenue recognition and associated adjusted EBITDA.
GrossProfit
Year to
31 December
2021
£'m
Year to
31 December
2020
£'m Change
Grossprofit 172.1 131.6 31%
Grossmargin 46.3% 53.2% (6.9ppt)
Freight costs 45.3 8.2 452%
Grossmarginexcludingfreight 58.5% 56.5% 1.9ppt
ConstFXGrossMargin 46.3% 53.7% (7.4ppt)
Industry-wide global freight costs have risen materially during the year, being the primary driver of a 694bps gross
margin headwind compared to 2020.
Market spot rates for freight increased materially during the year. Through our relationships with freight forwarders
wehavebeenabletolimitmuchofthisimpact.However,westillsawfreightcostssignificantlyimpactgross
margin in the year moving from £8.2m in FY20 to £45.3m in FY21, an increase of 452% impacting gross margin
(887 bps).
Grossmarginexcludingfreightcostsincreased193bpsyear-on-yearduetoanimprovedmixoffullpricesales,
foreign exchange gains and price changes made through H2 2021 to partly mitigate freight cost pressures.
Price changes were made in a way which protected our relative price positioning.
Asabrand,weretainahighlevelofflexibilitytoadjustpricesforcustomersdependinguponthemacroenvironment.
68 MADE.COM Group Plc
Annual Report and Accounts 2021
Operating expenditure and adjusted EBITDA
1
Year to
31 December
2021
£'m
Year to
31 December
2020
£'m Change
Fulfilmentcosts(£m) 79.9 56.6 41%
Marketing costs (£m) 66.4 50.3 32%
Overhead costs (£m) 40.1 29.8 34%
Adjusted EBITDA (£m) (14.3) (5.1) 180%
Adjusted EBITDA margin (%) (3.8) (2.1) (1.7ppt)
Fulfilmentcosts(as%revenue) 21.5 22.9 (1.4ppt)
Marketing costs (as % revenue) 17.8 20.3 (2.5ppt)
Marketing costs (as % gross sales) 15.3 16.0 (0.7ppt)
Overhead costs (as % revenue) 10.8 12.1 (1.3ppt)
1. please refer to page 70 for a breakdown of the calculation of adjusted EBITDA.
Costbaseefficienciesweredeliveredsuccessfullyaswescaledandleveragedexistinginvestmentsmadeinour
fulfilment,marketingengineandoverheadstructure.
Fulfilmentcostsasapercentageofrevenuefell139bpsyear-on-yearto21.5%,drivenbyhigheraverageorder
valuesandunderlyingefficiencyimprovements.Fulfilmentcostsincludedtheextensionintoadditionalwarehouse
footprint through H2 2021, nearly doubling our large goods capacity in the UK.
Marketing costs remained low throughout the year at 15.3% of gross sales, 67bps lower on a year-on-year basis.
Improvedefficiencylevelsweresupportedbyunderlyingimprovementstocustomertargetingandincreased
repeat order mix.
Overhead costs reduced 128bps to 10.8% of revenue, as we leveraged existing investments and central costs.
Adjusted EBITDA was (£14.3m), representing a (£9.2m) year-on-year decline. The disruption to global supply chains
described above meant revenue recognition was deferred to 2022 in turn having a direct impact on adjusted
EBITDAfor2021.Additionally,adjustedEBITDAwasadverselyimpactedbyfreightcostinflationintheyear.
Financial review
continued
69 MADE.COM Group Plc
Annual Report and Accounts 2021
Profitbeforetax
Year to
31 December
2021
£m
Year to
31 December
2020
£m Change
Loss before tax (31.4) (14.6) 115%
Depreciation of property, plant and equipment 2.4 2.4 –
Amortisation of intangible assets 4.8 4.0 20%
Depreciation of right of use assets 4.3 3.9 10%
Netfinanceexpense 1.6 1.4 14%
EBITDA (18.3) (2.9) 531%
Adjustments for:
Depreciation of right of use assets (4.3) (3.9) 10%
Interest expense on lease liabilities (0.5) (0.5) 2%
Share based payment expense 3.5 0.6 469%
Exceptional items
Restructuring – 0.9 –
Fundraising 5.3 0.5 960%
Supply chain transformation – 0.2 100%
Adjusted EBITDA (14.3) (5.1) 180%
Loss before tax increased £16.8m year-on-year to (£31.4m), including £5.3m of exceptional costs relating to our
IPO and £2.9m of additional share-based payment costs.
Depreciation and amortisation excluding right of use assets increased £0.8m year-on-year to £7.2m.
Share-based payment expenses of £3.5m in the period included an ‘all company’ share option grant at the start
of the year, accelerated vesting on options related to our IPO and an award of other option grants on IPO.
Taxation
During the period we recognised a tax credit of £3.6m, relating to a revaluation of the existing deferred tax asset
following a change to the UK corporation tax rate being substantively enacted as part of the Finance Bill 2021.
Earning per share
Basic losses per share increased from (2.6p) to (7.9p).
Inventories and working capital
Inventoriesincreasedfrom£21.5mattheendof2020to£63mattheendof2021reflectinginventory
investment related to reducing lead-times to customers, delayed dispatch phasing due to industry-wide supply
chain disruptions, higher freight costs and moving from a low comparator position in 2020. Approximately half of
closing inventories were goods in transit at the end of 2021.
Weoperateanefficientbalancesheetwithstructurallynegativenetworkingcapital(seepage73fordefinition).
Net working capital was (15%) of revenue for 2021, which included higher than normal deferred revenue at (£56m)
due to later than normal dispatch phasing due to supply chain disruptions during 2021.
Capital expenditure
Capital expenditure during the period was £13.7m, a 145% year-on-year increase. Capital expenditure was primarily
focused on intangible assets as we continued our programme of ongoing investments into our technology
platform £6.5m and expansion of our warehousing capacity to support lead time reduction £6m.
Cash
Closingnetcashwas£107m.Netcashinflowsthroughtheyearwere£56.8m,comparedto£32.8mprioryear.
Inflowincluded£100mofgrossproceedsraisedfromourIPOand£8.1mrelatingtotheexerciseofshareoptions.
Freecashflowwas(£32.1m)intheperiodasinventorylevelsandleadtimesbegantonormalise.
Financial review
continued
70 MADE.COM Group Plc
Annual Report and Accounts 2021
Financial review
continued
Customer metrics and gross sales
We have continued to deliver strong year-on-year gross sales growth through the period, supported by high
levels of market demand for our design-led digitally native proposition. Following the same customer
proposition and marketing playbook, gross sales growth has been delivered at consistently high levels across
all of our territories.
LTM active customer numbers stepped up to 1.3m or +26% year-on-year, with repeat order mix continuing
to grow to 44%, an increase of 2.6ppts, supported by increased customer loyalty as we invest in our range
and service proposition.
Despitesalesmixbetweenfurnitureandhomewaresproductremainingbroadlyflatonayear-on-yearbasis,
wedelivered+8%AOVincreaseto£246,supportingincreasedcostbaseefficiency.
Year to
31 December
2021
Year to
31 December
2020 Change
Key performance measures
Grosssales(£m) 434 315 38%
UK 228 165 38%
Continental Europe 206 150 38%
Grosssales(constant'21forex,£m) 434 310 40%
UK 228 165 38%
Continental Europe 206 145 42%
LTM Active customers (‘000) 1,327 1,055 26%
UK 640 532 20%
Continental Europe 687 523 31%
Orders (£’000) 1,766 1,377 28%
UK 904 727 24%
Continental Europe 862 650 33%
Repeat order mix (%) 44% 41% 2.6ppt
UK 51% 48% 3.4ppt
Continental Europe 36% 34% 2.3ppt
Average order value (AOV, £) 246 228 8%
UK 252 227 11%
Continental Europe 239 230 4%
Homeware sales mix (% of total gross sales) 28% 27% 0.6ppt
71 MADE.COM Group Plc
Annual Report and Accounts
Financial review
continued
Alternative performance measures (APMs)
Wemonitorseveralkeymetricstotrackourfinancialandoperatingperformance.Thesemeasuresarederived
fromtheGroup’sinternalfinancialandanalyticssystems.TheDirectorsbelievethatthesemeasuresprovide
readerswithusefulinformationregardingtheGroup’sfinancialandoperatingperformanceandfacilitatean
understandingoftheunderlyingperformanceoftheGroup.Assomeofthesemeasuresarenotdeterminedin
accordance with statutory measures and are thus susceptible to varying calculations, they may not be
comparable with other similarly titled measures of performance of other companies.
TosupportunderstandingofAPMspresentedbytheGroup,definitionsarepresentedbelow.
APMs Definition Rationale and reconciliation
Grosssales Sales at the point of transaction
excluding applicable VAT
Measure of customer demand which,
unlike statutory revenue, does not
include cancellations, returns or the
timingdifferencebetweencustomer
order and delivery
LTM active customers Number of customers who have placed
at least one order during the last 12
months (LTM)
Indication of customer volume
development, providing an understanding
of future growth opportunity and
ongoing customer engagement
Orders Total number of orders received during
the period, inclusive of orders that may
eventually be returned or cancelled
Enables a bridge to average order value
Average order value (AOV) Value of gross sales divided by the
number of orders
Indication of development of units per
basketandaveragesellingprice,offering
insightintotheGroup’sabilitytodeliver
operating leverage
Repeat order mix (%) Percentageofordersexcludingfirst
time customer orders
IndicationofGroup’sabilitytoretain
customers once acquired
Homeware sales mix
(% of total gross sales)
Percentage of gross product sales
relating to homeware products (lighting,
textiles, home accessories, kitchen and
dining accessories, outdoor and leisure).
Calculation excludes shipping and other
gross sales.
Insight into the product types sold
Fulfilmentcosts The main cost categories are
warehousing costs (including own
personnel), delivery costs, transaction
processing fees and returns processing.
Fulfilmentcostsareequalto
distribution costs (as per statutory
accountdefinition)plustheinterest
expense related to warehousing lease
costslessone-offitems
ClearinsightintotheGroup’scosts
directly linked to delivery of product to
the point of sale as determined by the
customer
Please see Table 1 on page 74 for
reconciliation to statutory measures
Marketing costs Allonlineandofflineadvertising
expenditure, the cost of public
relations, non-working media, in-house
influencerteamsandshowrooms
(including showroom lease charges and
staffcosts).
Clear visibility of costs related to
acquiring new customers and retaining
existing customers
See Table 1 on page 74 for reconciliation
to statutory measures
Grossmarginexcluding
freight
Grossprofitlessfreightcostsdivided
by revenue
Givenmaterialmovementinfreight
costs, gives a view of gross margin
movements outside of freight costs
72 MADE.COM Group Plc
Annual Report and Accounts 2021
Financial review
continued
APMs Definition Rationale and reconciliation
Overhead costs Consists of the employment costs of
allheadofficefunctions(including,legal,
finance,humanresources,product
buying, logistics, IT and sales and
marketing), IT maintenance costs, lease
charges and other property-related
costsfortheoffice,generalofficecosts,
professional fees, and net foreign
exchangedifferences.Overheadcosts
exclude depreciation, amortisation and
impairment of intangible assets,
exceptional items and share-based
payments
Clear visibility of overhead costs
reconciling to adjusted EBITDA
See Table 1 on page 74 for reconciliation
to statutory measures
Adjusted EBITDA Includes the unwinding of the discount
on lease liabilities and depreciation of
right-of-use assets (from the date of
adoptionofIFRS16)toreflectthefact
that lease-related costs are key
underlying business operating expenses;
excludes the impact of any share-based
paymentexpensestoreflectthefact
that this item is not directly correlated
to underlying business performance;
and excludes the impact of any items
deemed to be exceptional in nature
The exclusion of certain expenses in
calculating adjusted EBITDA facilitates
operating performance comparisons on a
period-to-period basis
See note 12 to the Financial Statements
for a reconciliation to statutory measures
Net Cash Cash on hand less interest bearing loans
and borrowings
Indication of liquidity position of the
business
See Table 2 on page 74 for reconciliation
to statutory measures
Freecashflow Freecashflowisdefinedasthechange
in cash and cash equivalents less cash
receivedorutilisedrelatingtofinancing
or share equity issues and associated
costs
Freecashflowrepresentsthecash
generated after accounting for cash
outflowstosupportoperationsand
maintain capital assets
See Table 2 on page 74 for reconciliation
to statutory measures
Net working capital Net working capital relates to the
balance of reported inventories, trade
and other receivables, rent deposits,
trade and other payables, deferred
revenue and provisions as per the
balance sheet
A measure of liquidity and the ability to
meet short-term obligations, as well as
ability to fund operations of the business
See Table 2 on page 74 for reconciliation
to statutory measures
Constant currency Variance when restating 2020 gross
sales, revenue or gross margin at
effective2021exchangerate
Grosssalesataveragerateforeach
period, revenue at average rates
accounting for gains and losses on EUR
hedges, cost of goods sold at average
rates accounting for gains and losses on
USD hedges
Offersunderstandingoffinancial
performance excluding foreign exchange
fluctuations
73 MADE.COM Group Plc
Annual Report and Accounts 2021
Financial review
continued
Fulfilment,marketingandoverheadcostreconciliation
Thefulfilment,marketingandoverheadcostsrepresentthefollowingitemsintheConsolidatedIncomeStatement
Table 1
Year ended
31 December
2021
£m
Year ended
31 December
2020
£m
Fulfilmentcosts (79.9) (56.6)
Marketing costs (66.4) (50.3)
Overhead costs (40.1) (29.8)
Total (186.4) (136.7)
Distribution expenses (79.7) (56.6)
Administrative expenses (122.2) (88.2)
Depreciation and amortisation (excl. right of use assets) 7.2 6.4
Interest expense on lease liabilities (0.5) (0.5)
Share based payment expense 3.5 0.6
Exceptional items 5.3 1.6
Total (186.4) (136.7)
Reconciliationtofreecashflow
Thefollowingtablesetsoutthereconciliationoffreecashflowtochangeincashandcashequivalents:
Table 2
Year ended
31 December
2021
£m
Year ended
31 December
2020
£m
Change in cash and cash equivalents 56.8 32.8
Plus IPO related costs 9.2 –
Less proceeds from IPO share issue and exercise of share options (108.1) (0.6)
Less proceeds and plus repayment of borrowings 10.0 (10.0)
Freecashflow (32.1) 22.2
Adrian Evans,
ChiefFinancialOfficer
7 March 2022
74 MADE.COM Group Plc
Annual Report and Accounts 2021
Risk and viability report
Risk management is an integrated part of the overall
governanceandmanagementoftheGroup.Aspartof
the preparation for the IPO in June 2021, some aspects
of risk governance were enhanced and formalised,
although the underlying key elements were in place
throughout the year. The Audit and RIsk Committee is
ultimately responsible for risk management, with the
day-to-day execution of risk management processes
delegated to the Executive Team. Executive Team
meetings are the main forum for strategic discussion
and decision making regarding ongoing risk
management.
The following processes are in place to monitor and
manage risk:
+ board meetings cover regular reviews of longer-term
risks,includingscanningthehorizonforanynewand
emerging risks
+ strategic planning incorporates Board-led reviews of
the market position, successes, lessons learned and
development of the strategic plan in the context of
the risk landscape
+ management of operational risks is delegated to the
Executive Leadership Team
+ creationofspecificprojectteamstoassessand
manage risks as/when they arise
+ maintenance of a Corporate Risk Register and risk
appetite which is reviewed by the Board, managed by
the Executive Leadership Team and embedded into
the business processes
+ annual review of Corporate Risk Register
We will continue to focus on developing and embedding
our risk management framework across the business
and will report on this progress in our 2022 Annual
Report.
Risk appetite
The Board has established a risk appetite to help guide
strategicandoperationaldecisionmakingthatreflects
boththeGroup’spositionasamarketdisrupterand
rapidly growing business, as well as the corporate values
that underpin the day-to-day operations of the
business, including doing what is right, challenging
convention, and aiming for greatness. The Board
recognises the need for informed risk-taking to deliver
strategic business growth and accepts a moderate-to-
high risk in pursuit of product innovation, building brand
awareness and market expansion. Our risk appetite is low
aroundlegal,compliance,governanceandfinancialrisks
as well as environmental and social risks throughout our
own business and supply chain, including third-party
suppliers and partners. As described below, the Board
hasundertakenarobustassessmentoftheCompany's
principal and emerging risks.
Emerging risks
As part of the risk management process, the Board
undertakehorizonscanningtoidentifyanyemerging
risks. Emerging risks are new and evolving, therefore
their full potential impact is still uncertain.
Thekeyemergingriskthathasbeenidentifiedbythe
Board is in relation to geopolitical risks, particularly as
thesadeventsinUkraineunfold.TheGrouphasa
strong presence in the Far East, including sourcing
operations in China and Vietnam. We also have a heavy
reliance on third-party suppliers based in these regions,
andanygeopoliticalunrestcouldhaveasignificant
impact on the supply chain operations.
The board also acknowledges that climate change
could potentially create future risks to the business
broaderthantheprincipalriskalreadyidentifiedonpage
80 (Risk 8). Refer to the Task Force on Climate Related
Disclosures statement on page 62-63 for further
detailsaboutclimate-specificriskassessment
management.
Principal risks
The Board considers principal risks to be the most
significantrisksfacedbythebusiness,includingthose
that are the most material to performance and that could
threaten the business model or future long-term viability.
Board
Overall responsibility for risk management
Audit and Risk Committee
Responsible for oversight of risk management
processes and controls
Executive Leadership Team
Day-to-day execution of risk management
processes and controls
Our approach to risk management
75 MADE.COM Group Plc
Annual Report and Accounts 2021
Risk and viability report
continued
Set out below is a heat map illustrating the Board’s
viewoftheprincipalriskscurrentlyfacingtheGroup,
reflectingthenetriskassessmentincorporatingthe
impact of any risk management and mitigating actions
in place.
Principal risks
1 Brand awareness and customer engagement
2 Globalsupplychaindisruption
3 Talent attraction and retention
4 Information and cyber security and dependency
on IT systems
5 Disruption to warehousing network
6 Shift in market demand
7 Foreignexchangefluctuations
8 Regulatory developments in response to climate
change and environmental sustainability
Details of the principal risks, along with the risk impact
assessment and examples of mitigating and risk
management actions in place are described below.
Thislistisnotexhaustive.TheGroupwillbeexposedto
risks wider than those listed; however, the principal risks
are those likely to have the greatest impact on the
Groupdeliveringourstrategicobjectives.Additionalrisks
not known to management, or currently deemed to
belessmaterial,mayalsohaveanadverseeffecton
our business.
Risk heatmap
2
4 5
6
7
8
SignificanceofImpact
low high
Likelihood
low high
3
1
76 MADE.COM Group Plc
Annual Report and Accounts 2021
Risk 1:
Brand awareness and customer engagement
Risk description
MADE’s success depends on a strong brand, a
positive customer experience and our ability to
anticipate, identify and respond quickly to new and
changing design trends and customer preferences.
Failure to enhance and maintain the brand, a positive
customer experience and to respond to changing
trends and preferences could lead to increased
marketing costs and reduced sales, potentially having
amaterialadverseeffectonMADE’sbusinessand
prospects.
There is also a risk that we fail to acquire new
customers, or retain our existing customer base, if
wedonotsufficientlyidentifyandrespondto
channel shifts in how our customers best engage
with the brand. If we cannot target our marketing
effortsinacost-effectiveway,thereisariskofboth
margin erosion and the achievement of revenue
growth targets.
Link to strategy
Reach
Risk assessment
Medium
Mitigating actions
+ enhancing customer experience and satisfaction
by investing in reducing our product lead times
+ maintaining design credentials by working directly
with more than 150 of the world’s best designers
and investing into our product teams
+ utilising a diverse range of platforms and constantly
testing new potential marketing platforms
+ operating an in-house marketing team that has
been built as a core competency within the
business to remove reliance on third parties
+ utilising in-house predictive modelling to most
effectivelyallocatemarketingspend
Risk 2:
Globalsupplychaindisruptions
Risk description
The structure of our supply chain means that
we are dependent upon third-party suppliers to
manufacture and deliver our products.
DisruptiontotheGroup’ssupplychain(including
issues with third-party suppliers, warehouses and
freight service providers) could result in a reduction
in conversion rates, failure to retain existing
customers and increased cost to serve, which could
haveamaterialadverseeffectontheGroup’s
business.
Our business model is also subject to potentially
significantfluctuationsinpricesincludinginflationon
raw materials, people costs, foreign exchange, freight
and logistics costs. There is a risk that input price
increases could result in our price point needing to
change, becoming too high and discouraging our
customers from buying our products, or conversely
erodingourprofitmarginsifwedon'tincreaseour
prices to retain the customer demand.
Link to strategy
Choice, Experience
Risk assessment
Medium
Mitigating actions
+ maintaining our global supplier base, with close
relationships across our 200+ factories
+ building a supplier base with major and minor
productionoptionsindifferentregionsforeach
production specialism
+ providing long-term forecasts to suppliers and
working with them in partnership so they have a
view of the long-term aspirations of the business
and its needs
+ operating on-the-ground sourcing teams in the
regions where our key supply markets are to build
and maintain strong relationships with our suppliers
+ securing long-term forward contracts where
possibleonsignificantcostssuchasfreight
+ maintainingaflexiblecostbase.Ownbrand
productofferingtheopportunitytosetourown
pricing to customers
Risk and viability report
continued
77 MADE.COM Group Plc
Annual Report and Accounts 2021
Risk 4:
Information and cyber security and dependency on
IT systems
Risk description
MADE’s business model relies on the integration of
ourwebsite,logisticsitesandtheorderfulfilment
and delivery operations.
ThesesystemsholdconfidentialCompany,customer
and employee information, which, as a result of
malicious activity or issues with integrity of our
systems may be leaked.
Disruption to MADE’s platforms, computer systems
or software, or the systems and software of our
third-party suppliers, could damage our reputation
and result in a loss of customers, which could have a
materialadverseeffectonthebusiness.
OurdifferentITsystemsareinterdependent,anda
failure of any of the core IT systems may result in
failures of other IT systems, which in turn could
prevent MADE from capturing customer orders on the
Made.com website or processing customer orders.
In addition, with the increasing complexity of social
engineering and ransomware there is a risk that we
couldsufferacybersecuritybreach.
Thiscouldleadtosignificantreputationaldamage,loss
ofintellectualproperty,andsignificantregulatoryfines.
Link to strategy
Experience, Reach
Risk assessment
Medium
Mitigating actions
+ regular independent security testing audits are
carried out
+ we engage with industry standard security vendors
on the corporate and consumer side
+ MADE employs best practices in terms of scanning
for vulnerabilities
+ MADE has rolled out a formal Incident
Management Policy
+ we maintain and renew an appropriate level of
Cyber Insurance
+ multiple redundancies have been built into our
environment to improve resilience
+ we maintain nightly back-ups of our systems
Risk and viability report
continued
Risk 3:
Talent attraction and retention
Risk description
There is a risk that MADE cannot attract or retain
the talent that we require for the business to be
successfulduetoanunattractiveorinsufficient
employee remuneration package or employee value
proposition (including development opportunities,
valuesasabusiness,flexibleworkinganddiversity
and inclusion). This could lead to key talent being
lost to other organisations that recruit from a similar
talent pool.
Link to strategy
Reach, Choice, Experience
Risk assessment
Medium
Mitigating actions
+ MADE has a strong culture built on our core values
+ collectweeklyfeedbackfromallstaffthrougha
digital engagement tool to make informed and
timely decisions
+ an employee-led Diversity & Inclusion Council has
been set up
+ MADE actively encourages employee engagement
via initiatives such as the Culture Club
+ MADE maintains an active presence on platforms
suchasLinkedInandGlassdoor
+ MADE has a strong commitment to employee
share ownership through schemes such as
MADE x Everyone
+ wehaveabenchmarked,competitivebenefits
package with an annual process
78 MADE.COM Group Plc
Annual Report and Accounts 2021
Risk 6:
Shift in market demand
Risk description
The online home and furniture industry in the markets
where MADE operates may not sustain or improve
upon current levels of demand and customer
acceptance in line with our expectations. Additionally,
new competitors may come into the market either
onlineorofflinewhichMADEmayfailtocompetewith
effectively.ThiscouldleadtoMADEbeingunableto
achieve our strategic objectives and growth
aspirations due to an inability to respond quickly
enough to the changes in the external market.
Link to strategy
Reach
Risk assessment
Medium
Mitigating actions
+ wemaintainaflexiblecostbasetoenablerapid
adaptation
+ we have a test and learn process throughout the
business that enables nimble and agile response to
changes in the market including new competitors
+ we perform constant market monitoring to identify
new potential competitors
+ weensurepointsofdifferencearemaintainedand
amplifiedthroughourstrategicpillars
Risk 5:
Disruption to warehousing network
Risk description
We place reliance on being able to continuously move
stock to meet customer demand and there is a risk
thatasignificanteventoccursthatmeanswecannot
access either our physical warehouses or our
warehouse management systems. This would result in
thepotentialbuild-upofstockatports,significantly
increasing cost, and impact our ability to despatch
orders, adversely impacting our customers and
incurringsignificantcosttotrytokeepthebusiness
operational through emergency measures that would
need to be put in place.
Link to strategy
Choice, Experience
Risk assessment
Medium
Mitigating actions
+ we have training and health and safety guidelines in
all the warehouses to minimise the risk of an
incident
+ we have the option to move between our UK and
European warehouse bases
+ we maintain separate small and large goods
warehouse operations
+ we use logistics carriers that have functionality to
run warehouses
+ options exist on short-term space and storage for
carriers
+ we have secured short-term warehousing options
on the supply side
+ we have Business Interuption insurance policies in
place
+ thesizeandscaleofourEuropeanwarehousing
partner is such that there is business continuity
planning capability built into the overall site
Risk and viability report
continued
79 MADE.COM Group Plc
Annual Report and Accounts 2021
Risk 8:
Regulatory developments in response to climate
change and environmental sustainability
Risk description
There is a risk that our products are deemed to be
damaging to the environment due to regulatory
responses to the threats posed by climate change
and environmental sustainability (including increasing
requirements relating to traceability). This could lead
tosignificantlychangingcostprices,anadditional
burden as audit expectations increase or punitive
dutiesonspecificproductswhichwouldadversely
impactourbusinessoperationsandfinancialposition.
Link to strategy
Choice, Experience, Sustainability
Risk assessment
Low
Mitigating actions
+ we have quality and standards procedures in place
to enable compliance with current requirements
+ we work with a third-party traceability service who
perform external diligence on sourcing procedures
+ we have in-house quality and sustainability teams
+ our vertically integrated supply base provides
greater level of control than others
+ we utilise on-the-ground sourcing teams to ensure
standards and material origins
+ we have environmental targets which are tracked
and reported on a regular basis
Risk and viability report
continued
Risk 7:
Foreignexchangeratefluctuations
Risk description
MADEcurrentlymakesalesinEURaswellasinGBP
and pay for products in EUR and USD. As a result,
theorganisationisexposedtoriskaroundsignificant
fluctuationsinForeignExchangeRates.
ThereisariskthatMADEsuffersanegativeimpact
fromfluctuationsinForeignExchangeRatesduetoa
number of factors, including:
+ ineffectivehedgingarrangementsbeinginplace
+ nonaturalhedgesinplaceagainstUSDfluctuations
+ thelevelofpurchasesinEURissignificantlylower
than the level of sales in EUR
Thiscouldleadtoasignificantnegativeimpacton
profitmargins.
Link to strategy
Choice, Experience, Reach
Risk assessment
Low
Mitigating actions
+ we have a detailed hedging policy in place which
builds out a hedging portfolio over a 12-month
period in a non-speculative manner
+ thereisflexibilitywithinthehedgingpolicyto
extend the hedging period out in the case of
extreme FX market conditions, via Board approval
80 MADE.COM Group Plc
Annual Report and Accounts
Viability and going concern statement
InaccordancewiththeUKCorporateGovernance
Code2018(the'Code'),theDirectorshaveassessed
going concern over a eighteen-month period from the
balance sheet date to June 2023 and have assessed
theviabilityoftheGroupoverafour-yearperiodto
December 2025. The assessment period for viability
looks beyond the period considered for going concern
and is aligned with the strategic outlook timeframe.
As part of this assessment, the Directors have
analysedtheprospectsoftheGroupbyreferenceto
itscurrentfinancialposition,recenttradingtrendsand
momentum,forecastsandfinancialprojections,
strategy, economic model and the principal risks and
mitigatingfactorsidentifiedonpages76-80.
Groupplanningprocess
Our annual planning process begins in September with
a detailed review of the key strategic goals by the
Board of Directors and the Executive Team, following
whichanupdatedlong-termfinancialplanisderived.
A detailed, bottom-up budget for the year ahead is
thenprepared,whichissignedoffbytheBoardin
November. We monitor our performance throughout
thefinancialyearagainstthisbudgetandprioryear
actual results with a regular formal re-forecasting
process conducted on a quarterly basis, or as required.
Base case
The strategic plan forms the base case for the scenario
modelling that underpins the viability assessment and
going concern assessment. It has been built out from
the 2022 Board approved budget. Principal
assumptions include an improvement of lead time for
delivery to customers; range and brand awareness
investments driving sales and revenue growth; margin
benefitsfrompricingincreases;stabilisationoffreight
rates;efficienciesindistributioncostswithscale;
continued growth in overhead costs linked to scale and
strategic initiative implementation; and ongoing capital
expenditure on key areas of technology, warehousing
and infrastructure. The Base Case assumes that the
shiftofdemandtoonlineintheGroup’smarkets
continues.
Viability assessment
TheDirectorshavereviewedtheGroup’slong-term
forecasts and projections for the four-year period to
December 2025 (the ‘Assessment Period’), which is
alignedtotheGroup’scurrentstrategiclong-term
planning cycle. A four-year outlook is considered
sufficienttocapturetheimpactofanyexistingmaterial
long-term obligations, such as capital expenditure
projects and any lease contracts factoring in the timing
of any break clauses, whilst also providing a realistic
timeframe to achieve the current strategic goals.
TheGrouphasastandardinvestmenttimehorizonof
three years, and so again the Director’s believe that the
four-yearassessmentperiodsufficientlycapturesany
current investment plans.
The Directors have assessed the future viability of the
GroupbyreviewingtheBaseCaseandriskscenarios
based on the Principal Risks and then identifying a
stress-test scenario and point in time at which the
business would become unviable due to a series of
circumstances and then considering the mitigating
actions that would be available. These circumstances
have been evaluated based on principal and emerging
risksidentifiedbymanagementthroughitsrisk
management process, with consideration given to
broader factors such a socioeconomic upheaval and
risksidentifiedbytheTCFD.
Risk and viability report
continued
81 MADE.COM Group Plc
Annual Report and Accounts
Scenarios modelled Rationale and reconciliation
Scenario 1
Major blockage of global
supply chains impacting
sourcing from the Far East
and resulting in an inability
to deliver goods to
customers
For the Assessment
Period, assume sales
growth decline of 16%
and margin downgrade of
3ppt from base case
Risk 2:Globalsupplychain
disruptions
Risk 5: Disruption to
warehousing network
Scenario 2
Drop in consumer demand
driven by recession,
inflationarypressureson
households disposable
income and severe drop in
the furniture and
homeware sector
For the Assessment
Period, a sales growth
decline of 37% and margin
downgrade of up to 3ppt
from base case
Risk 6: Shift in market
demand
Risk 1: Brand awareness
and customer
engagement
Scenario 3
A combination of scenario
1 and scenario 2
Risk 1: Brand awareness
and customer
engagement
Risk 2:Globalsupplychain
disruptions
Risk 5: Disruption to
warehousing network
Risk 6: Shift in market
demand
Depending on how these hypothetical scenarios unfold,
thereareaseriesofmitigatingactionswithinMADE's
controlthatcouldbetakentoprotecttheGroup’s
activities including to:
+ RebalancetheGroup’ssourcingnetworksincluding
sourcing alternative near-shore arrangements
+ Shiftproductofferingmix
+ Enter strategic partnerships to charter vessels directly
+ Increase prices on products with lower price elasticity
to absorb any additional distribution costs
+ Postpone longer-term capital expenditure in
warehouse infrastructure projects
+ Leverage promotional activity to attract more
customers
+ Reducefixedmarketingspendandmanagevariable
marketing spend appropriately
+ Consideralternativepaymentmethodsandfinancing
arrangements to support customers managing their
finances
+ Renegotiate payment terms with suppliers
TheGrouphasastrongliquiditypositionfollowingthe
successful IPO primary issue in June 2021 which raised
£100mandtherepaymentoftheGroup’sloanwith
Silicon Valley Bank of £10.0m in July 2021. Under stress
test conditions, sales would have to fall by more than
50% of 2021 before additional funding would be
required within the Assessment Period.
Following consideration of the various risk impact
assessments and scenarios and stress tests models
performedandtakingintoaccounttheGroup'scurrent
position and principal risks the Directors have a
reasonable expectation that the business will be able
to continue in operation and meet its liabilities as they
fall due over the Assessment Period.
Goingconcernassessment
TheGrouphasreportedalossof£(31.4)mforthe
12 months ended 31 December 2021 (2020: loss of
£(14.6)m) and is in a net asset position of £85.1m as at
31 December 2021 (31 December 2020: net asset
position £0.0m), with a net current asset position of
£51.2m (31 December 2020: net current liability
positionof£(16.6)m).TheGrouphadacashbalanceof
£107m at 31 December 2021 following the successful
IPO primary issue in June 2021 which raised £100m and
therepaymentoftheGroup’sloanwithSiliconValley
Bank of £10.0m in July 2021.
Sinceearly2020,theGrouphasbeenexposedto
extraordinary market conditions due to the Covid-19
pandemic. During this period, despite disruptions to its
supplychain,theGrouphasdeliveredongoingstrong
gross sales growth, broadly aligned to levels delivered
through previous years. Supply chain disruptions have
meantthattheGroupsoldproductonextendedlead
times for much of 2020 and 2021. This impacted
customer conversion which in turn reduced gross sales
growth. The supply chain disruptions also impacted
revenue recognition timing, resulting in a high level of
deferred revenue at 31 December 2021.
TheDirectorshavereviewedtheGroup’sforecastsand
projections for the period to June 2023 (the ‘Forecast
Period’), including their assessment of trading and
associatedcashflowforecastsandforecastliquidity.
Risk and viability report
continued
Customer demand is directly linked to MADE’s ability
to procure and deliver physical goods to customers.
TheDirectorshaveconsidereddifferentplausiblescenarios
thatwouldcreateaseveredisruptiontotheGroup’s
operatingmodelaffectingtherelationshipbetween
customers and access to MADE’s product, including:
82 MADE.COM Group Plc
Annual Report and Accounts 2021
In considering the appropriateness of adopting
thegoingconcernbasisinpreparingthefinancial
statements the Directors have assessed the potential
cashgenerationoftheGroupandconsideredarange
of downside scenarios. The scenarios were informed
by a comprehensive review of the macroeconomic
environment, including the impact of the current
invasionofUkraine,andtheGroup’sexperienceof
trading through the pandemic over the last two years.
The assumptions to which the forecasts are most
sensitive are the expected growth in sales and the
continued freight cost pressures.
TheGroup’sbasecaseforecastisasdescribedabove
on page 81. Alternative scenarios considered include:
+ a severe-but-plausible downside scenario
representing a 23% reduction in forecast sales on
the base case and a 3ppt downgrade of gross margin,
withnooffsettingmitigatingcostreductionactions,
atwhichpointtheGroupwouldstillcontinueto
maintain liquidity at June 2023; and
+ a reverse stress test scenario that models a gross
sales decline of 50% year-on-year followed by 0%
sales growth into 2023. Additionally, an immediate
decline of 5.7ppt in gross margin from the base
case is assumed, without cost mitigation actions.
This stress test is considered remote and the
mitigating actions discussed above on page 82 would
be taken before reaching this point.
Following the various scenarios and stress tests
performedtheGroupwouldhavesufficientcash
headroom and liquidity to continue trading throughout
the period to June 2023. Consequently, the Directors
have concluded that using the going concern basis
for the preparation of the Financial Statements is
appropriate.
Risk and viability report
continued
83 MADE.COM Group Plc
Annual Report and Accounts 2021
84 MADE.COM Group Plc
Annual Report and Accounts
86 Chair’s introduction to governance
90 Corporate Governance Statement
92 Board of Directors
102 Nomination Committee Report
107 Audit and Risk Committee Report
114 Remuneration Committee Report
120 Remuneration at a glance
122 Annual Report on Remuneration
132 MADE Directors’ Remuneration Policy
148 Directors’ Report
153 Statement of Directors’ responsibilities
In this section
Governance report
85 MADE.COM Group Plc
Annual Report and Accounts 2021
Chair’s introduction to governance
Dear Shareholders,
As Chair of the Board of Directors of MADE.COM
Group Plc (the ‘Board’), I am pleased to introduce, on
behalf of all of the Directors, the MADE Corporate
Governance Report for our first year as a publicly listed
company. In this report, we set out the corporate
governance arrangements that we put in place both
prior to, and following, our IPO and admission to trading
on the main market of the London Stock Exchange in
June 2021; summarise how the Board has discharged
its responsibilities in 2021; and illustrate the Board’s
commitment to embedding high standards of
governance across the Group. In particular, this Report
sets out:
+ how we enhanced our Board composition, skills and
experience in preparation for our IPO (see below on
page 87)
+ how we have engaged with our key stakeholders (see
pages 44-52)
+ our commitment to maintaining MADE’s culture and
values (see pages 57 and 101)
+ biographical information about our Board (see pages
92-95)
+ details of the role of the Board, its Committees and
the division of responsibilities (see pages 96-97);
+ the Nomination Committee Report (see pages
102-106)
+ the Audit and Risk Committee Report (see pages
107-113)
+ the Directors’ Remuneration Report (see pages
114-131); and
+ the Directors’ Report (see pages 148-153)
As Chair, it is my principal role to lead the Board and
ensure that we operate effectively, efficiently and with
the strategic aims of the Group in mind, to deliver
stakeholder value and promote the success of the
Group.
Enhancing our Board in preparation for listing
As a Board, we are responsible for setting the tone and
culture of the MADE Group. We recognise the weight
of this responsibility and are firmly committed to doing
business the right way by operating with the highest
standards of professional and personal integrity.
“The challenges we have faced
throughout 2021 do not need
overstating, but I am incredibly proud
and grateful for the commitment,
determination and the exceptional
work carried out by our teams during
these challenging conditions.”
Susanne Given
Chair
86 MADE.COM Group Plc
Annual Report and Accounts 2021
In preparation for our IPO, we undertook a thorough
review of the skills and experience of the existing
Directors of MADE, to ensure that when we became a
public company, the Board would have the appropriate
structure, composition and skill base to not only meet
the requirements of the UK Corporate Governance
Code 2018 (the ‘Code’) but also succeed in delivering
MADE’s purpose and strategic objectives. Following this
review, we were very pleased to welcome two new
independent Non-Executive Directors to the Board in
May 2021, prior to the IPO. Matthew Price and Gwyn
Burr have brought with them a wealth of skills,
experience and knowledge of publicly listed companies
across a variety of sectors. Full details of their skills and
experience, along with those of the other members of
our Board, can be found in the Board of Directors
section on pages 92-95.
I am also pleased to announce that the Board, led by
the Nomination Committee, has commenced a
process to recruit an additional independent Non-
Executive Director who we aim to appoint in advance
of our forthcoming AGM in May 2022. As disclosed at
the time of our IPO it is expected that, Bruno Crémel
will be stepping down from the Board before our first
AGM. On behalf of the Board, I would like to express
our sincere gratitude to Bruno for his dedication and
support to MADE throughout his six-year tenure.
For further details on our approach to succession
planning for our Board and Executive Leadership Team
please refer to our Corporate Governance Statement
on pages 90-91 and the Nomination Committee Report
on page 105.
Chief Executive Officer
It was with great sadness and understanding that on
21 February 2022 we announced that Philippe
Chainieux would step down from his role as Chief
Executive Officer of the Group and its Board for family
reasons. As a result, we welcomed our Chief Operating
Officer, Nicola Thompson, to the Board and she
assumed the position of Interim CEO with immediate
effect. We are now pleased to confirm that Nicola has
been appointed as CEO on a permanent basis, with
effect from 7 March 2022. Nicola is an exceptional
colleague and impressive leader, and the Board and I
look forward to continuing to work with her, alongside
Adrian and the rest of the Executive Leadership Team.
Corporate Governance Arrangements
As a privately owned company, high standards of
corporate governance were always key to how the
legacy MADE Board operated and how we conducted
ourselves as a business. Therefore, when it came to
preparing for MADE’s IPO, we were able to build upon
the strength of our existing governance arrangements
to establish a corporate governance framework
appropriate for a publicly listed company. More detail
about these arrangements and our compliance with
the Code can be found on pages 90-91.
Board focus
The Board and its Committees have covered an
important and wide-ranging agenda during the year.
During the first half of the year the Board were
particularly focused on preparing for and completing
the IPO, whilst simultaneously ensuring that the
business had appropriate arrangements in place to
navigate the ongoing challenges related to the Covid-19
pandemic. The challenges we have faced throughout
2021 do not need overstating, but I am incredibly proud
and grateful for the commitment, determination and
the exceptional work carried out by our teams during
these challenging conditions, enabling us to achieve
MADE’s most successful year to date.
Throughout the second half of the year, as well as
ensuring MADE’s smooth transition to life as a publicly
listed company, the Board’s focus has been on
monitoring the delivery of the strategy outlined at the
time of the IPO, with regular updates on progress
against our key performance measures being provided
at Board meetings.
Details of the key topics discussed by the Board during
the year and up to the date of this report can be found
on pages 100-101.
Stakeholder engagement
A key focus for the Board in 2021 has been maintaining
and enhancing the engagement strategies that MADE
utilises with each of our key stakeholder groups: our
people, our customers, our designers and suppliers and
the communities and environments in which we operate.
These strategies are detailed on pages 44-52 of our
Strategic Report. Please also refer to pages 47 and 51 for
case studies that provide a snapshot of how the Board
has considered key stakeholder groups in principal
decision-making processes throughout the year.
Chair’s introduction to governance
continued
87 MADE.COM Group Plc
Annual Report and Accounts 2021
Chair’s introduction to governance
continued
While the Board is confident that the current strategies
in place are effective in facilitating an open dialogue
with our key stakeholder groups, we remain cognisant
of, and open to, new ways of improving these methods.
By way of example, we consider that the workforce
engagement strategies in place (as detailed on pages
44-45 of the Strategic Report) are compliant with
Provision 5 of the Code and enable the Board
to understand the views and experiences of our
employees to help inform our decision-making.
However, as part of our transition to a publicly listed
company, the Board has considered a range of
additional methods of engagement and plans to
establish an employee forum to be made up of
representatives from a variety of roles and territories.
It is expected that the employee forum will meet with
two Non-Executive Directors periodically as part of a
Board listening group, to establish regular, direct
two-way communication between the Board and the
workforce on a range of people topics such as reward,
culture, wellbeing, diversity and sustainability. It is
proposed that insights from these sessions will then
be fed back to the full Board, to:
+ assist them in ensuring our culture continues to align
with our strategy
+ ensure an understanding of views is taken into
consideration when making Board decisions related
to matters that impact our teams, such as reward
wellbeing and new ways of working; and
+ further strengthen our engagement with employees
across the business
Further, following our IPO we established a new,
dedicated Investor Relations team to help maintain
appropriate lines of communication with all our new and
existing shareholders. Details of the strategies in place
are further detailed on page 49 of the Strategic Report.
I, along with the Chairs of each Committee and the
Executive Directors, continue to set aside regular time
to meet with shareholders on areas of importance. We
also look forward to the upcoming AGM which will
provide an opportunity for me to explain the Company’s
progress and, along with other members of the Board, to
answer any questions raised by our shareholders.
Susanne Given
Chair of the Board
7 March 2022
88 MADE.COM Group Plc
Annual Report and Accounts 2021
Chair’s introduction to governance
continued
89 MADE.COM Group Plc
Annual Report and Accounts
As a premium listed company, MADE is committed
to applying the principles and complying with the
provisions set out in the Code. The Code, issued by
the Financial Reporting Council (‘FRC’), provides a
framework for best practice in corporate governance
and covers five broad key areas:
+ Board leadership and company purpose
+ division of responsibilities
+ composition, succession planning and board
evaluations
+ audit, risk and control; and
+ remuneration
The Code is available on the FRC website at www.frc.
org.uk.
Since our IPO in June 2021 and to the date of this
Report, the Board has worked to ensure the principles
of the Code have been applied and compliance with all
applicable provisions of the Code with the overall aim of
promoting long-term sustainable success for MADE.
MADE is proud to confirm that we are compliant with
the Code, with the exception of the following matters:
Code Reference Explanation Rationale and Action to Comply
Provision 11
At least half of the
Board (excluding the
Chair) should comprise
independent Non-
Executive Directors.
Currently, two of the
Board’s seven
Directors (excluding
the Chair) are
considered
independent for the
purposes of the Code.
The Board considered that its composition as at the time of
IPO, in particular following the addition of two independent
Non-Executive Directors, was appropriate as MADE
transitioned from being a privately-held company to a publicly
listed company. The Company’s prospectus also outlined the
steps the Board intended to take to comply with this provision
over the medium-term. In light of this, the Nomination
Committee has commenced a search to recruit a further
independent Non-Executive Director, to be appointed prior to
our first AGM in May 2022, to replace Bruno Crémel who will be
stepping down from the Board. In addition, George McCulloch
will step down from the Board and be replaced by a further
independent Non-Executive Director by no later than the AGM
held in 2023. Once these appointments have been made, four
of the seven Directors, representing more than half of the
Board (excluding the Chair), will be considered independent.
For more information please refer to pages 104-105 of the
Nomination Committee Report.
Provision 21
There should be a
formal and rigorous
annual evaluation of
the performance of
the Board, its
committees, the Chair
and individual
Directors.
The Board carried out
an informal evaluation
process this financial
year. The Chair held
individual meetings
with the Non-
Executive Directors,
the Executive
Directors and the
General Counsel and
Company Secretary,
during which the Chair
spoke with
participants about the
Board and its
effectiveness, along
with individual
performance and
opportunities for
growth.
As the Board (in its form as at 31 December 2021) was only
established in June 2021 and in light of the review work that
was undertaken at the time of the IPO into the composition
and effectiveness of the Board, it was decided not to
undertake a further, formal evaluation of the Board, its
Committees or individual Directors during the 2021 financial
year. The Board, supported by the Nomination Committee,
concluded that it would be more valuable to undertake an
extensive evaluation process after the existing Directors had
worked together as a unit for a longer period, and following the
appointment of the new Non-Executive Director expected to
be appointed in advance of the 2022 AGM.
Formal evaluations will take place during 2022 and will be
reported on in the next Annual Report. In accordance with
Provision 21 of the Code, it is expected that an external
evaluation will take place at least every three years.
For more information please refer to page 105 of the
Nomination Committee Report.
Corporate Governance Statement
90 MADE.COM Group Plc
Annual Report and Accounts 2021
Code Reference Explanation Rationale and Action to Comply
Provision 24
The Board should
establish an Audit
Committee of three
independent Non-
Executive Directors.
One of the three
members of the Audit
and Risk Committee,
George McCulloch, is
not considered
independent for the
purposes of the Code.
The Board considers that George McCulloch has recent and
relevant financial experience for the purposes of the Code and
that he would bring valuable insights as a third member of the
Audit and Risk Committee for a transitional period following the
Company’s IPO, notwithstanding that he is not considered to
be independent for the purposes of the Code. At least one of
the independent Non-Executive Directors to be appointed (as
noted above) will be recruited with the relevant skills,
experience and attributes to replace George as the third
independent member of the Audit and Risk Committee.
For more information please refer to page 107 of the Audit and
Risk Committee Report.
Provision 41
What engagement
with the workforce
has taken place to
explain how executive
remuneration aligns
with wider company
pay policy.
No direct employee
engagement took
place during FY21
regarding the
executive
remuneration package
and its alignment with
the wider company
pay policies.
As the Remuneration Committee, was only established in
June 2021 in connection with the IPO, there was limited time
before the end of FY21 in which to design and implement the
executive remuneration policy to align with public company
market standards. In this first year as a public company, the
Board and the Remuneration Committee considered that there
was no appropriate forum in existence at MADE at that time to
effectively engage with a cross-section of MADE’s people to
facilitate productive and constructive engagement on the
remuneration policy. As such, the Board and the Remuneration
Committee concluded that it was not practical in FY21 for any
direct engagement to take place. However, in designing the
new remuneration policy, the Remuneration Committee have
remained cognisant on wider pay policies across MADE with
the aim of ensuring equitability.
An employee forum is to be established with representatives
from diverse roles and regions during FY22, which will provide an
appropriate forum to discuss matters, including remuneration,
directly with a Non-Executive Director going forward. As such,
the Company aims to be compliant with Provision 41 in FY22.
For more details on how MADE has applied the principles and complied with the provisions of the Code please
refer to the following sections of this Annual Report.
Board Leadership and
Company Purpose
A. Promote Long-Term Sustainable Success – pages 90-91 and 96
B. Purpose, Values, Strategy and Culture – pages 86-91 and 101
C. Resources and Control – pages 98, 101 and 111
D. Stakeholder Engagement – pages 44-52
E. Policies and Practices – pages 44, 55 and 109
Division of Responsibilities F. Objective Judgement, Openness and Debate – pages 97 and 100
G. Board Composition and Division of Responsibilities – pages 92-97
H. Non-Executive Directors – pages 92-97
I. Board Support and Functionality – pages 92-97
Composition, Succession
Planning and Board Evaluations
J. Board Appointments, Succession and Diversity – pages 104-106
K. Skills, Experience and Knowledge – pages 92-95
L. Board Evaluations – pages 105
Audit, Risk and Control M. Auditor Independence – pages 111-112
N. Position and Prospects – pages 108-110, 148
O. Risk Management – pages 75-80 and 111
Remuneration P. Remuneration and Strategy – pages 118-119
Q. Developing Remuneration Policy – pages 114-147
R. Judgment and Discretion – pages 114-147
Corporate Governance Statement
continued
91 MADE.COM Group Plc
Annual Report and Accounts 2021
The Board composition metrics on pages 92-93 are accurate as at the date of publication of this Annual Report.
Board of Directors
Committees:
Nomination Committee (Chair)
Remuneration Committee
Disclosure Committee (Chair)
Experience
Susanne has extensive experience in top management
positions, having worked in the consumer-facing sector
for 25 years. During her executive career, Susanne
managed leading brands such as SuperGroup PLC
where she served as the Chief Operating Officer, TK
Maxx UK/Ireland as Managing Director, and as Director
for Fashion and Beauty for the John Lewis Partnership.
In addition to her experience in leading executive
positions, Susanne acts as a Non-Executive Director
for an extensive portfolio of companies.
Susanne graduated from Studenter Eksamen,
Brønderslev Gymnasium.
Contribution
Through her tenure as a Director and Chair of the MADE
Board, Susanne has established an in-depth knowledge
of MADE’s history and business, enabling her to provide
an invaluable contribution to the Board in ensuring that
the culture and values of MADE remain at the core of
our strategy as we begin the next stage of growth as a
publicly listed company. The strength of her experience
in the consumer-facing sector provides crucial insight
and value as MADE continues to enhance its service
proposition. Susanne has shown exemplary leadership
since the IPO and is utilising her skills gained through
other listed appointments to effectively run the Board.
Other key appointments
+ Forward Partners Plc (NED)
+ Hush Homeware Ltd (Non-Executive Chair)
+ Trent Holdings Ltd (NED)
+ Guy’s & St Thomas’ Foundation Trust (Chair)
Committees:
Disclosure Committee
Experience
Nicola joined MADE in September 2019 as Chief
Operating Officer and was appointed as Chief Executive
Officer of the Group in February 2022, initially on an
interim basis, before being appointed as MADE’s
permanent CEO in March 2022. Nicola has over 20
years of retail experience, with over 10 years in senior
leadership positions within high growth e-commerce
businesses in fashion. Prior to joining MADE, Nicola was
part of the Executive Board at ASOS Plc where she
was responsible for Global Customer Development,
covering international growth and expansion strategy
and overseeing customer services. Prior to taking on
the Global Customer role at ASOS, Nicola held a
number of senior commercial and merchandising roles.
Nicola holds a Bachelor of Science in Geography from
the University of Manchester.
Contribution
As COO of the Group, Nicola has been integral to the
design and implementation of MADE’s strategy over the
past 3 years. With her experience on the Executive
Leadership Team and as a key driver of the strategy
and operations of the Group, as well as her extensive
retail experience across a number of high growth
e-commerce businesses, the Board believes she is well
placed to fulfil the role of CEO.
Susanne Given
Non-Executive Chair
Appointed:
June 2015 (appointed as
Chair in April 2016)
Nicola Thompson
Chief Executive Officer
Appointed:
February 2022
Board gender split Board tenure split
0–3 years 4
3–6 years 3
6–10 years 1
1. Male 5
2. Female 3
92 MADE.COM Group Plc
Annual Report and Accounts 2021
Committees:
Disclosure Committee
Experience
Adrian has spent most of his career helping to scale
fast growing digital companies. Before joining MADE
5 years ago, Adrian held various senior leadership roles
at THE NET-A-PORTER GROUP, including Group
Financial Controller, Director of Strategy and Chief
Financial Officer. He played a key role in the sale of the
group to YOOX to become YOOX NET-A-PORTER
GROUP. Following the transaction, Adrian served on
the Executive Team as Commercial Director for two
years before joining MADE.
Adrian holds a Bachelor of Science in Physics from the
University of Sheffield and is an Associate of The
Chartered Institute of Management Accountants.
Contribution
Adrian’s track record of scaling fast growing digital
companies and his transactional experience has enabled
him to contribute enormous value during MADE’s IPO
process. Further, Adrian’s background in both strategic
and financial roles has enabled him to provide integral
leadership for the Board in designing and developing
MADE’s strategy and plans for future growth.
Committees:
Remuneration Committee (Chair)
Audit and Risk Committee
Nomination Committee
Experience
Gwyn has expertise in marketing, customer services,
human resources, sustainability and strategy, which she
obtained while working in senior roles at major retail
brands, including Asda and Sainsbury’s. Gwyn has served
on the boards of a diverse range of companies and has
experience as both member and chair of remuneration
committees.
Gwyn holds a BSc (Hons) in Economics and History
from the University of Bradford and has completed
business programmes at both Stanford and Harvard
Business School.
Contribution
Gwyn’s vast experience as a non-executive director on
boards of other listed companies has proven pivotal in
assisting the MADE Board’s transition from a private to
a public sphere. Gwyn’s extensive board experience and
understanding of different points of view and business
circumstances also underpin her role as the Senior
Independent Director. Further, her ability to contribute
her extensive insights into remuneration best practice is
of integral importance as we develop and enhance
MADE’s strategy.
Other key appointments
+ Hammerson Plc (SID)
1
+ Just Eat Takeaway.com N.V. (SID)
2
+ Metro AG (NED)
+ Taylor Wimpey Plc (NED)
1. Gwyn will be stepping down from the Board of Hammerson Plc in
April 2022.
2. Gwyn will be stepping down from the Board of Just Eat in May 2022.
Board of Directors
continued
Adrian Evans
Chief Financial Officer
Appointed:
May 2021 (appointed as
CFO July 2017)
Gwyn Burr
Senior Independent
Director
Appointed:
May 2021
Board skills matrix
Key skills Tot al
Brand and Consumer 7/8
Digital and E-Commerce 6/8
Operations and Logistics 7/8
Financial 5/8
Public Company (UK) 3/8
93 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
Committees:
Audit and Risk Committee (Chair)
Remuneration Committee
Nomination Committee
Disclosure Committee
Experience
Matthew has significant experience in finance and in
consumer facing business, currently serving as Chief
Financial Officer of the Global Fashion Group and
having previously served as Chief Financial Officer of
MoneySuperMarket.com. He has also previously served
as Finance Director of Costa Coffee and Managing
Director of its business in China. Matthew also
previously held senior finance and commercial roles at
Sodexo and Sainsbury’s, including Divisional Finance
Director and Retail Finance Director respectively.
Matthew holds a Bachelor of Arts in History from the
University of Southampton. He also completed an
advanced management programme at INSEAD and is
a qualified chartered accountant, having trained and
qualified with Deloitte in its corporate finance practice.
Contribution
Matthew’s financial and accounting experience is of key
importance to the development and maintenance of
MADE’s audit, risk and control framework and his
guidance and leadership in these areas contributes
great value. Matthew also has public-company board
experience through his roles at Global Fashion Group
and MoneySuperMarket.com and he is utilising this
experience to help the Company transition to life as a
public company.
Other key appointments
+ Global Fashion Group (CFO)
Committees:
Nomination Committee
Experience
As well as founding the Company and being its Chief
Executive Officer until December 2016, Ning founded
Typology, a Paris-based skincare brand providing highly
natural, vegan products and co-founded MYFAB, a
Paris-based décor and gadget category business, where
he served as the Chief Executive Officer until 2009.
Ning holds a Master of Science degree from HEC Paris.
Contribution
Ning has over a decade of experience as an
e-commerce entrepreneur and has extensive
experience in executive roles within this market.
This sector experience contributes enormous value in
developing MADE’s strategy while Ning’s deep-rooted
knowledge of MADE’s core values and culture ensure
these continue to remain aligned.
Other key appointments:
+ Good Brands SAS (Director)
+ Haka Investments Limited (Director)
+ Typology (Founder and CEO)
Matthew Price
Independent
Non-Executive Director
Appointed:
May 2021
Ning Li
Non-Executive Director
Appointed:
May 2015
94 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
Committees:
Audit and Risk Committee
Experience
George has extensive experience as a director of, and
investor in, private and public growth technology
companies and funds. He is a co-founder and partner at
Level Equity Management, LLC, a private investment
firm that invests in growth-stage software and internet
businesses. George was previously a managing director
at Insight Partners and a member of the technology
investment team at Summit Partners. He is presently a
director of various privately-held technology businesses
and served as a director at publicly-traded Medidata
Solutions from 2004 until 2019.
George holds a Bachelor of Arts degree from Stanford
University.
Contribution
George’s background as both a director and investor in
numerous technology companies has contributed great
value to MADE’s ongoing commitment to maintaining
quality stakeholder engagement. His financial
background makes him an invaluable member of MADE’s
Audit and Risk Committee.
Other key appointments:
+ Level Equity (Founder and Partner)
Committees:
Nomination Committee
Experience
Bruno started his career as a senior civil servant in the
French Ministry of Economy, managing the privatisation
of various banks and public insurance companies before
being appointed Chief of Staff of the Minister of
Economy and Finance.
In addition to his considerable public sector experience,
Bruno has 20 years of experience in senior executive
positions in the private sector. He was the CEO of Darty
France, leading electricals retailer, a general partner and
executive board member at LBO France and also held
different senior executive positions at worldwide retail
leader Kering. Bruno currently serves as an independent
director on the board of EDF. Bruno is also a general
partner at Partech, specialising in growing digital
companies and a board member at Rouje SAS, Studocu,
Evaneos, Exporo, M-Files Oy and SendinBlue SAS.
Bruno graduated from the Institut d’Etudes
Politiques Paris and holds a Master of Science from the
École Centrale Paris.
Contribution
Bruno’s extensive private and public sector experience
enabled him to provide an invaluable contribution to the
Board as MADE navigated the IPO in 2021. During his
six-year tenure Bruno has developed a detailed knowledge
of the MADE business and culture, which has proven
integral in the search for new Non-Executive Directors to
further enhance the skillset of the MADE Board.
Other key appointments:
+ Partech Partners SAS (General Partner)
+ EDF (NED)
1. Bruno Crémel is expected to step down from the Board before
our first AGM.
George
McCulloch
Non-Executive Director
Appointed to Board:
December 2011
Bruno Crémel
1
Non-Executive Director
Appointed to Board:
June 2015
95 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
The Board of Directors
1
Chair: Susanne Given
The Board is ultimately responsible for the strategic leadership of the MADE Group. The Board determines
MADE’s fundamental management policies and oversees the performance of the business as a whole to meet
its strategic objectives. It is the principal decision-making body for all matters that are significant to the Group,
whether in terms of their strategic, financial or reputational implications, and has adopted a schedule of matters
reserved for its approval. The Board has delegated some of its responsibilities to formal Committees of the
Board (as detailed in this diagram). In addition, the Group has established an Executive Leadership Team, who
are responsible for the long-term growth plans of the MADE business and the Group’s day-to-day strategic and
financial planning.
Remuneration
Committee
Chair: Gwyn Burr
Responsible for
designing and
implementing the
remuneration policy for
MADE’s Executive
Directors and Chair,
along with MADE’s
wider senior
management. The
Committee also makes
recommendations for
the grants of awards
under MADE’s share
incentive plans.
See pages 114-131 for
the Remuneration
Committee Report.
Executive Leadership Team
Chair: Nicola Thompson
The Executive Leadership Team supports the Chief Executive Officer in the execution of the Group’s strategy
and in the management of the day-to-day activities of the Group.
Audit and Risk
Committee
Chair: Matthew Price
Responsible for
reviewing and
maintaining the Group’s
financial control and
other internal risk
management systems
and advises the Board
on MADE’s risk
strategy, policies and
potential exposures.
The Committee also
assists the Board in
monitoring the integrity
of the Group’s Financial
Statements and the
effectiveness of the
external auditors.
See pages 107-113 for
the Audit and Risk
Committee Report.
Nomination
Committee
Chair: Susanne Given
Assists the Board in
reviewing the
structure, size and
composition of the
Board and its
Committees and
evaluating the balance
of skills, knowledge,
experience and
diversity. The
Committee is also
responsible for
succession planning
and advises the Board
on the retirements and
appointments of
additional and
replacement Directors
and MADE’s Executive
Leadership Team. See
pages 102-106 for the
Nomination Committee
Report.
Disclosure
Committee
Chair: Susanne Given
A standing committee
of the Board, which
meets on an ad hoc
basis as and when
required. Responsible
for timely and accurate
disclosure of
information required to
be disclosed to meet
the Group’s legal and
regulatory obligations.
Corporate governance framework
1. The schedule of matters reserved for the Board, along with each Committee’s terms of reference, are available to view on the Company’s
website at https://corporate.made.com/investors/corporate-governance/.
96 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
Leadership roles and division of responsibilities
Chair + leadership and effective running of the Board and promoting the highest standards of
integrity, probity and corporate governance
+ ensuring the Board plays a full and constructive part in the development and
execution of the Group’s strategy
+ leading constructive challenge of the Executive Leadership Team
+ ensuring compliance with the Board’s approved policies, including Matters Reserved
for the Board
+ setting the Board agenda and chairing each Board meeting
+ overall responsibility for the induction and training of each Director
+ ensuring the performance of the Board and each Committee is formally and
rigorously evaluated each year
+ facilitating effective communication to shareholders and ensuring the views of
shareholders are communicated to and understood by the Board as a whole
Chief Executive Officer + overall responsibility and oversight for managing all business activities, operations and
performance of the Group, within the authority delegated by the Board
+ development and implementation of the Group’s strategy and commercial
objectives, in consultation with the Chair and the Board
+ regularly reviewing the Group’s operational performance and strategic direction
+ identifying and executing strategic opportunities for the Group
+ managing the Group’s risk profile
+ ensuring a clear management structure with appropriately delegated authorities to
suitably experienced staff
+ ensuring effective policies for the development of senior management, including
performance reviews and succession planning
+ ensuring effective communication with shareholders, employees and other key
stakeholders
Chief Financial Officer + providing strategic and financial guidance to ensure the Group’s financial
commitments are met
+ overall responsibility for the Group’s financial and accounting records and systems
+ devising the financial and tax strategies of the Group in line with the agreed risk
appetite
+ overall responsibility for producing the Group budget
Non-Executive Directors + reviewing proposals put forward by the Executive Directors and providing strategic
guidance
+ bringing external perspective, together with independent and constructive challenge
to the Executive Directors
+ monitoring the Group’s performance and execution of the Group’s strategy
Senior Independent
Director
+ leading the appraisal of the Chair’s performance
+ supporting and deputising for the Chair
+ intermediary for other Directors
+ available to communicate with shareholders
Executive Leadership
Team
+ supporting the Chief Executive Officer in execution of the Group’s strategy
+ supporting the Chief Executive Officer in management of the operational activities
and risk management of the Group
+ overseeing employee communication and development of talent
+ supporting the Chief Executive Officer in monitoring Group performance and delivery
of the Group budget
General Counsel and
Company Secretary
+ advising the Board on matters of corporate governance
+ overall responsibility for ensuring that Board procedures are followed and that the
Board has the policies, processes, information, time and resources it needs in order
to function effectively and efficiently
+ overall responsibility for ensuring that applicable laws, rules and regulations are
complied with
+ remaining the principal point of contact for investors on matters of corporate
governance
97 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
The Board’s Role and Reserved Matters
The Board is ultimately responsible for the overall
leadership of the Group, for developing and determining
MADE’s strategy and overall commercial objectives.
The Board is the principal decision-making body for all
matters that are significant to MADE, whether in terms
of their strategic, financial or reputational implications.
The Board has adopted a schedule of matters
specifically reserved for its approval, which is updated
and approved annually and includes:
+ overall leadership of the Group, including setting
MADE’s values and standards and promoting
alignment of culture
+ approval of the Group’s strategy, business plan and
budget
+ any decision to materially change the Group’s
business, including the nature or geographical scope;
+ approval of any changes to the Group’s capital and/or
corporate structure
+ approving the fundamental policies of the Group;
+ implementing and overseeing the Group’s operations,
including financial reporting procedures, risk
management policies and other internal and financial
controls
+ approval of material contracts and/or commitments
in excess of certain defined value thresholds
+ approving changes to the structure, size or
composition of the Board, including the appointment
or removal of Directors and executive management
+ determining the remuneration policy for the Directors
and senior management and ensuring the
independence of Directors and that potential
conflicts of interest are managed; and
+ calling shareholder meetings and ensuring appropriate
communication with shareholders
Retirement and Election of Directors
In accordance with Provision 18 of the Code, at the
AGM each year each Director shall retire from office
and seek re-election by shareholders. The Nomination
Committee considered the matter of the annual
re-election of Directors at the AGM based on key
criteria including performance, contribution,
independence and respective time commitments.
On recommendation from the Nomination Committee
and in accordance with the Articles and the Code, the
Board has recommended that all Directors (with the
exception of Bruno Crémel, who it is expected will be
stepping down prior to the AGM as planned at the time
of the IPO) stand for re-election at the 2022 AGM.
For further details on the appointment of Directors,
including Board inductions and succession planning,
along with MADE’s Board Diversity Policy, please see
page 106 of the Nomination Committee Report.
98 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
Board Meetings and Attendance
The Board held three scheduled meetings during the
period under review, which took place between the IPO
in June 2021 and the end of the financial year on
31 December 2021. The Board is satisfied by the
commitment of the Directors’ to discharging their
duties during this time. The Directors’ attendance at
the Board meetings are shown in the table below:
Director Board
Board meeting attendance
Susanne Given 3/3
Gwyn Burr 3/3
Matthew Price 3/3
Ning Li 3/3
George McCulloch 3/3
Bruno Crémel 3/3
Philippe Chainieux
1
3/3
Adrian Evans 3/3
Nicola Thompson
2
-/-
1 Philippe Chainieux resigned from the Board with effect from 21
February 2022.
2 Nicola Thompson was appointed to the Board with effect from 21
February 2022.
Independence and Conflicts of Interest
The Board considers there to be an appropriate
combination of Executive and Non-Executive Directors
to enable constructive challenge and stewardship of
MADE’s management teams. Nonetheless, the Board is
fully committed to ensuring compliance with Provision
11 of the Code and is actively working towards achieving
at least half of the Board (excluding the Chair) being
considered independent within the next two financial
years. The Nomination Committee has commenced
a recruitment process to appoint an additional
independent Non-Executive Director to the Board
and it is expected that Bruno Crémel, who is not
considered independent for Code purposes, will be
stepping down accordingly prior to the 2022 AGM.
Further details can be found on page 104 of the
Nomination Committee Report.
The Directors are cognisant of their duty under the Act
to avoid potential conflicts of interest with the
Company. Accordingly, the Board has put in place
processes to identify, review and, if appropriate,
authorise any such conflicts in accordance with the
Company’s articles of association (the ‘Articles’),
should they arise. All Directors are required to inform
the General Counsel and Company Secretary on an
ongoing basis of their relationships with external
companies, including directorships or other
appointments. A standing item is included on the
agenda of each Board meeting to allow for the
declaration of any conflict of interest or potential
conflict of interest by the Directors. If a conflict is
deemed to arise then the relevant Director is excluded
from voting on, or being counted in quorum, for any
resolution that relates to matters in which they have a
conflict of interest, or potential conflict of interest.
Since the IPO, no Director has taken on any additional
external appointments that are considered significant
for the purposes of Provision 15 of the Code.
In addition, in accordance with Provision 15 of the
Code, before making any new appointment to the
Board, potential appointees are required to disclose
any significant external appointments to MADE, to
ensure that they can dedicate sufficient time to the
commitment of being a MADE Board member and to
ensure that there are no existing conflicts of interest.
All conflicts arising in respect of transactional matters
are reviewed as they arise. The Directors have authority
to authorise conflicts of interest in accordance with
the Articles.
99 MADE.COM Group Plc
Annual Report and Accounts 2021
Summary of Key Board Activities and Work Undertaken
During the Year
Overview
Although this has been an unprecedented year for
MADE and one of significant change, the principal
role of the Board remains the same: to provide clear,
entrepreneurial and responsible leadership to the
Group, whilst ensuring that the Group has an
appropriate risk and internal control environment,
adequate resources and appropriate values and
standards to deliver its strategic objectives and
promote the long-term success of the Group for the
benefit of its shareholders and stakeholders as a whole.
The General Counsel and Company Secretary, in
conjunction with the Executive Directors and the Chair,
is responsible for agreeing agendas in advance of Board
and Committee meetings. Board papers are circulated
in a timely manner to enable the Directors to undertake
full and detailed consideration of agenda items in
advance of meetings taking place. Board papers are
made available on an online Board reporting portal that
can be accessed by each Director at any convenient
time.
Key agenda items at each Board meeting usually
include:
+ regular updates on operational activities and trading;
+ reports on the progress of strategic initiatives;
+ new matters arising for Board approval; and
+ updates on action points from previous Board
meetings.
Each Board meeting will also typically contain a
standing item for the Chair of each principal Board
Committee to report to the full Board on key matters
that have arisen during the previous cycle and to make
recommendations for formal Board approval as
necessary. The open dialogue between the Board and
each Committee ensures that the Board retains
sufficient oversight of its delegated authority and
maintains overall strategic leadership of the Group.
The Board’s agenda cycle also makes provision for
updates on the key areas of the Group’s business model
and enabling functions, including Operations, Finance,
Technology, Legal and Human Resources.
Summary
Set out below is a summary of key activities covered during the period under review and to the date of this report:
Strategy + approved the Group’s Five-Year Strategic Plan
+ monitored the implementation and execution of the Group’s strategy through
regular updates from the Executive Directors
+ reviewed the Group’s approach to external pressures including supply chain and
freight cost risks
+ reviewed progress against the Group’s sustainability targets
+ received updates from the Chief Technology Officer on the strategic technology
roadmap
+ reviewed progress of key technology projects linked to execution of the strategy
Governance and risk
management
+ approved new delegation of authorities and Board reserved matters schedule
+ approved Modern Slavery Act statement
+ reviewed the adequacy of Group processes in relation to whistleblowing, anti-
bribery and corruption and diversity and inclusion
+ reviewed principal risks and mitigation planning
+ reviewed the risk and control environment
+ reviewed the effectiveness of the external auditor
+ approved the Annual Report
People and culture + board succession planning, appointment of new Non-Executive Director and Chief
Customer Officer
+ reviewed and approved salary and incentives for the Board and senior managers
+ received updates from the Remuneration Committee on Group-wide remuneration
arrangements
+ reviewed arrangements for workforce engagement
+ monitored Company culture and received updates from HR on employee survey
results, including the bespoke ways of working survey
Financial performance + reviewed and approved the half year and year end results
+ reviewed and approved the annual budget
+ reviewed going concern and viability status
+ reviewed liquidity arrangements and the Group’s financing arrangements
+ received regular updates from the CFO on financial performance against budget
Board of Directors
continued
100 MADE.COM Group Plc
Annual Report and Accounts 2021
Board of Directors
continued
Key Activities: In Focus
Culture and values
At MADE we are proud of our culture, and as discussed in
more detail on page 57 of this Report, we are committed
to maintaining a diverse and inclusive workplace for our
employees. Personality is at the heart of everything we do
as a business and this starts with championing our people,
and our core values. At MADE:
+ We challenge convention. We aren’t afraid to try new
things. We’re always curious to see if something can
be done differently, or better. Our philosophy: be
brave, go for it. Bringing fresh perspective to every
situation to keep us ahead of the game
+ We love what we do. We’re passionate creators,
problem solvers and innovators. We believe everyone
should have access to great design and we’re
dedicated to finding ways to make it happen
+ We aim for greatness. Our ambition is big, our
standards high. We never give up on our goal to
deliver outstanding quality and value
+ We do what’s right. We act with integrity in everything
we do. We treat customers, collaborators and
colleagues with respect, honesty and fairness. If we
get it wrong, we own it, and we make it right
MADE has always welcomed the views of our people
to keep us honest to these values and commitments,
particularly as we grow as a business. Monthly ‘All
Hands’ meetings provide an opportunity for managers
and employees to nominate those individuals they feel
have ‘MADE it Great’ during the month, excelling in
their role and in embodying the MADE values.
MADE’s internal Culture Club and Diversity and
Inclusion Council have also been integral to maintaining
a strong culture, particularly in a remote working
environment. With the sponsorship of the Executive
Leadership Team, they organised remote celebrations
and gratitude giveaways, along with week-long events
on areas such as Wellness and Inclusion with the aim of
ensuring our employees continued to feel part of the
wider MADE community. These events were intended
by many of the Board, including the Chair who
presented at MADE’s regular ‘Brilliant Breakfast’ series
sharing her insights into women in leadership, and also
joined MADE’s ‘Proud to Be’ session during Black
History Month. When restrictions allowed, our team
offsite meetings created an environment for employees
to engage and collaborate with our Executive
Leadership Team and representatives of the Board
during workshops framed around our strategy.
The Board regularly reviews the mechanisms in place
to monitor culture and receives regular feedback from
employees through reports from the HR Director and
realtime feedback from the Executive Directors. As at
the date of this report the Board is satisfied that the
Company’s culture is aligned with the Company’s
purpose, values and strategy.
Covid-19
As noted above, a key area for the Board’s focus in
2021 has been navigating the ongoing and evolving
complexities and challenges of the Covid-19 pandemic.
For MADE, the Board’s focus has fallen broadly into two
key areas: our people and our customers.
The wellbeing and safety of MADE’s employees has
always been, and remains, a key priority for the Board.
Throughout the first half of 2021, the majority of our
office-based employees continued to work from home
in line with government guidance. Conversely, for some
of our team members, such as our warehouse and
showroom employees, remote working was not
possible. The Board focused on overseeing the
continued operation and evolution of appropriate
frameworks and measures to ensure all MADE
workplaces remain safe, employee wellbeing is
safeguarded and business continuity is achieved.
Enhanced health and safety measures relating to social
distancing, regular cleaning and split shift arrangements
were implemented in our warehouses from the start
and continue to be regularly reviewed.
We also developed our new ways of working framework,
recognising that there is no ‘one size fits all’ approach
with roles mapped to workplace-based, hybrid or
remote arrangements. This framework remains under
regular review and is underpinned by our strong
commitment to protecting the physical and mental
health of our staff, customers and other key
stakeholders while continuing to achieve the strategic
aims of the business.
As a Board, we have also focused on addressing the
significant supply chain disruption throughout 2021
caused by the Covid-19 pandemic, along with additional
factors such as the blockage of the Suez Canal in
March 2021 and factory closures across Vietnam in
late summer, to ensure we continued to deliver our
best possible service proposition to our customers.
As disclosed at the time of our IPO, this supply chain
disruption resulted in longer and less predictable lead
times for our customers. As a Board, we are acutely
aware of the potential for such disruption to have a
material adverse impact on not only reputation and
brand image, but our financial performance and
prospects. A key focus for the second half of 2021 has
been on accelerating our strategic pillar of investing in
customer experience, primarily through the reduction in
product lead times, supported by the expansion of our
warehouse footprint. For more information on MADE’s
response to the challenges of the global pandemic and
supply chain crises please refer to pages 51, 77 and 101
of this Report.
For a summary of the Board’s engagement with
stakeholders on principal decision-making processes
please refer to the Board engagement and section 172
statement at pages 44-52 of the Strategic Report.
101 MADE.COM Group Plc
Annual Report and Accounts 2021
Nomination Committee Report
“We are confident that the diversity of
skills, experience and backgrounds of
our existing Board members furnishes
the Board with the requisite skills
needed to lead the Company in its
next chapter of growth.”
Susanne Given
Chair
Committee membership and attendance
Member Independent Attendance
Susanne Given (Chair) √ 1/1
Gwyn Burr √ 1/1
Ning Li 1/1
Bruno Crémel 1/1
Matthew Price √ 1/1
Role of the Committee and Key Responsibilities
+ regularly reviewing the structure, size and composition
of the Board (including the balance of skills,
knowledge, experience and diversity) and proposing
changes where necessary
+ reviewing the Group’s approach to succession
planning for Directors and senior executives, including
ensuring plans are in place for an orderly succession
and overseeing the development of a diverse pipeline
for succession
+ keeping under review the leadership needs of the
business to ensure MADE continues to compete
effectively in the market
+ making recommendations to the Board for the
appointment of new Directors and overseeing the
recruitment process (mindful of the balance of skills,
knowledge, experience and diversity on the Board).
+ reviewing the Group’s arrangements and objectives
regarding equality, diversity and inclusion
+ coordinating the Board evaluation process, reviewing
the results in conjunction with the Chair and making
any necessary recommendations to the Board.
+ reviewing the performance of Non-Executive
Directors annually
Key Areas of Focus During the Year
+ initiated the recruitment process to appoint a new
Independent Non-Executive Director
+ reviewed succession planning arrangements for the
Executive Directors and senior managers
+ reviewed Directors’ time commitments and
independence and made recommendations to the
Board regarding any new external commitments for
Directors.
+ reviewed the Group’s approach to diversity at Board
and senior manager level
+ coordinated an informal Board evaluation review in
conjunction with the Chair
+ considered and made a recommendation to the
Board on the retirement and election of Directors at
the 2022 Annual General Meeting
102 MADE.COM Group Plc
Annual Report and Accounts 2021
Dear Shareholder,
I am pleased to present the first report of MADE’s
Nomination Committee (the ‘Committee’). Here, we
set out an overview of the Committee’s role and the
activities it has undertaken during the period under
review, as well as our key focus areas for 2022.
The Committee has already undertaken a significant
amount of work since the IPO in June 2021, key
highlights include:
+ reviewing the Board’s composition – we are confident
that the diversity of skills, experience and
backgrounds of our existing Board members furnishes
the Board with the requisite skills needed to lead the
Company in its next chapter of growth in line with
MADE’s strategy; and
+ leading the process for the recruitment for a new
Independent Non-Executive Director, who is
expected to join the Board prior to the 2022 AGM
– we remain mindful of the Code and particularly
Provision 11, with which we are working to comply in
the medium term. Through the recruitment of a
further independent Non-Executive Director, we are
excited by the prospect of enhancing the Board’s
composition with another fresh perspective
The Committee, and the Board, actively encourage,
embrace and seek cognitive diversity, and recognise
that good decision making is grounded in the ability
for leaders to harness their individual perspectives and
challenge one another when necessary. As such, the
Committee will continue to keep the composition
of the Board under review and will make further
recommendations as necessary to ensure the Board
has the appropriate and diverse range of skills,
background, experience and attributes to achieve
the Group’s strategic objectives.
Looking ahead to 2022, Committee members remain
mindful of, and committed to, their responsibilities
under the Code, particularly those in relation to
diversity, inclusion and culture, which will form an
important part of the Committee’s activity and focus
over the next year. For further information on the
Board’s Diversity Policy please see page 106 of this
Report.
Susanne Given
Chair of the Nomination Committee
7 March 2022
Nomination Committee Report
continued
103 MADE.COM Group Plc
Annual Report and Accounts 2021
Nomination Committee Report
continued
Board Appointments
In accordance with Principle J of the Code, the
Committee adopts a formal, rigorous and transparent
procedure for the appointment of new Directors to the
Board. External consultants are used to assist in
identifying suitable external Board candidates, based on
a written specification for each appointment. In line with
the Board Diversity Policy, where external search firms
are used they will only be engaged to the extent that
they adhere to appropriate codes of conduct, which
include aligned principles around diversity and inclusion.
The Chair leads the process, in conjunction with the
Senior Independent Director, and is responsible for
providing a shortlist of candidates for consideration by
the Nomination Committee. When shortlisting
candidates, consideration will be given to a wide range
of demographics including age, ethnicity, race, gender,
professional experience, educational background and
other relevant personal attributes. The Nomination
Committee then makes its recommendation on the
appropriate candidate for final approval by the Board.
In preparing MADE for its IPO, a need was identified for
the recruitment of two additional Non-Executive
Directors, including a Senior Independent Director and
a Chair of the Audit and Risk Committee, to ensure the
Board had the right balance of skills and experience for
life as a publicly listed company. The Group engaged
executive search firm Russell Reynolds in February 2021
to assist with the search, due to their reputation working
with other growth stage, technology-enabled businesses
and following endorsement by the Chair, who had been
impressed with their work from previous engagements.
Russell Reynolds were briefed to assist the Group in
building a multi-faceted team of individuals who meet
the needs of the public markets but who could also
embody the MADE brand and see themselves as
custodians of our business. The search was therefore
centred around candidates with public company,
international, eCommerce, direct-to-consumer and
digital experience. Although all appointments within the
Group are made on merit and suitability for the role, it
was made clear as part of the brief to Russell Reynolds
the importance of diversity, equity, inclusion and
sustainability and that the new Board appointments
should embody diversity in every regard.
Russell Reynolds assisted in drawing up a shortlist of
suitable candidates and arranging interviews conducted
by the Chair and certain other members of the existing
Board. It was concluded that Gwyn Burr and Matthew
Price possessed the key skills required to complete our
IPO Board and crucially encapsulated the culture and
values that MADE is proud of. Their appointments were
approved by the Board and they formally joined MADE
in May 2021 prior to the IPO.
Russell Reynolds have recently been engaged by MADE
to lead the process for appointing a new Independent
Non-Executive Director to replace Bruno Crémel. Full
details of this recruitment process will be included in
the next Annual Report.
Made also utilises the services of Russell Reynolds
when making certain senior appointments below Board
level. Russell Reynolds has no other direct connection
with the Group or individual Directors.
Nicola Thompson joined the Board in February 2022,
initially as interim CEO. On 7 March 2022, Nicola was
appointed as the CEO of MADE on a permanent basis.
This appointment was made following consideration of
existing succession plans with Nicola considered to be
the right candidate not only to meet the Group’s
short-term needs but also to lead on delivering the
Company’s strategy and fulfilling its potential over the
long-term.
Board Induction and Training
On joining the Board, each Director is provided with a
personalised induction to the business, which includes
meetings with the Executive Leadership Team.
In light of MADE’s geographical reach, Board meetings
have historically been held across different geographical
offices throughout the year, as an opportunity for the
Directors to meet local managers and employees, and
see first-hand the local showrooms and business
operations in action. Due to the impact of Covid-19, all
meetings during the period under review have been held
either virtually or in the UK. We hope to resume
overseas meetings in 2022 or when restrictions allow.
Directors are also provided with access to a detailed
information pack covering Group policies, Directors’
duties and responsibilities as well as other key
governance documents, which they can access through
an online Board reporting portal. Gwyn Burr and
Matthew Price, who were appointed during the year,
have received an induction to the business in line with
the above. Beyond the formal induction programme, all
Directors are encouraged to undertake additional
training where it is considered appropriate for them to
do and can also seek the advice of the General Counsel
and Company Secretary or external legal counsel as
appropriate on any relevant matters.
104 MADE.COM Group Plc
Annual Report and Accounts 2021
Board and Senior Management Succession Planning
Since the IPO in June 2021 the Committee has taken
an active role in reviewing the Group’s approach to
succession planning. Mindful of its responsibilities,
particularly under Principle J and Provision 17 of the
Code, the Committee is focused on the establishment
and maintenance of a strong and diverse pipeline of
senior talent within the Group. Consideration will always
be made to the existing balance of skills on the Board
(as exemplified by the matrix on page 91 of this Report)
to ensure an appropriate balance of skills, experience
and other relevant personal attributes is maintained.
At its December meeting, the Committee reviewed
and discussed the arrangements MADE has in place for
the long-term succession of the Executive Directors
and other members of the Executive Leadership Team,
as well as immediate term arrangements for caretaker
successors in the event of sudden or urgent changes.
The Committee is pleased to say that due to the
existing pipeline of strong talent at MADE, it is satisfied
that, in the majority of cases, existing employees have
already been identified within the Group’s succession
plans in both the immediate and long-term. In a limited
number of cases, it has been determined that it would
be appropriate to look externally for a successor for
specific Executive roles as and when the need arises.
Existing succession plans informed the basis of Nicola
Thompson’s appointment as CEO.
Board Evaluation
The Committee is responsible for managing the Board
and Committee evaluation processes in each year. The
Committee, and the Board, are cognisant of Provision
21 of the Code and recognise the importance of
rigorous performance evaluations as one of the many
checks and balances to ensure the Board, and each
Committee, continue to operate effectively and
thereby drive MADE’s achievement of its strategic
objectives.
As the Board (in its form as at 31 December 2021) was
only established in June 2021 and in light of the review
work that was undertaken at the time of the IPO into
the composition and effectiveness of the Board, it was
decided not to undertake a further, formal Board
evaluation during the 2021 financial year.
The Board, supported by the Committee, concluded
that it would be more valuable to undertake an
extensive evaluation process after they had worked
together as a unit for a longer period and following
the appointment of a new Non-Executive Director
expected to join the Board prior to the 2022 AGM.
Similarly, as each Board Committee was only
established in June 2021 and have only had a limited
opportunity to meet up to the end of the 2021 financial
year, it was concluded that formal evaluation process
into their effectiveness would not be appropriate at
this time.
Working towards full compliance with Provision 21
of the Code, since the IPO, the Chair held individual
meetings with the Non-Executive Directors, the
Executive Directors and the General Counsel and
Company Secretary, during which the Chair spoke with
participants about the Board and to consider and
evaluate its effectiveness. The Chair noted that
participants thought the Board was functioning well so
far and that each Director was devoting sufficient time
to their respective roles, but that the Directors were
looking forward to the opportunity to hold more
physical meetings during FY22 following easing of
Covid-19 restrictions to further embed the new
appointees. The Chair also welcomed participants’
views, insights and recommendations with the aim of
continually monitoring and enhancing the strength,
collaboration and impact of the Board, which will
continue to be a focus as the Board considers its
composition going forward, as discussed on page 90.
In accordance with Principle L and Provision 21 of the
Code, the Committee will facilitate a formal and
rigorous evaluation of the operation and effectiveness
of the Board, its Committees and individual Directors
on an annual basis beginning in 2022, with at least
one evaluation being facilitated externally every
three years. Details on the process undertaken and the
outcomes of the evaluation will be reported in the next
Annual Report.
Nomination Committee Report
continued
105 MADE.COM Group Plc
Annual Report and Accounts 2021
Nomination Committee Report
continued
The Board Diversity Policy
As detailed earlier in this Report, MADE has a long-
standing commitment to being a diverse and inclusive
business and the Board pledges to lead by example,
with the objective of ensuring that its representation,
and its actions, reflect the diverse environment in which
MADE, our customers, our employees and our other
key stakeholders, operate. The Board’s commitments in
this important area are formally encapsulated in the
MADE Board Diversity Policy, which it is proud to have
adopted earlier this year. Key elements of this policy
are summarised below.
The Board actively encourages, embraces and seeks
cognitive diversity. It recognises that good decision
making is grounded in the ability for leaders to harness
their individual perspectives and engage in constructive
challenge to achieve MADE’s strategic objectives and
to ensure that we remain contemporary, agile and
relevant to our customer demographic.
Accordingly, although appointments to the Board and
MADE’s Executive Leadership Team will always be made
on merit, the Board, and the Nomination Committee,
recognises their responsibility to consider a broad range
of personal attributes including (amongst others)
gender, ethnicity, age and educational background,
alongside knowledge and skills, when assessing the
diversity of representation on the Board and the
Executive Leadership Team.
The Committee is responsible for assessing the
composition and effectiveness of the Board and for
recommending the appointment of new Directors and
senior executives. In making its recommendations to
the Board, the Committee will have due regard to the
Code and will consider the balance of skills, experience,
independence and knowledge of the Board and the
Executive Leadership Team, as well as their respective
diversity of representation and functionality as a group.
Where vacancies arise, the Committee is committed
to ensuring that an appropriately diverse range of
candidates is identified and shortlisted.
The Board recognises the value in striving to achieve
the respective targets set out by in the Hampton-
Alexander and Parker Reviews to achieve its broader
diversity objectives and the Board’s commitment to
diversity is reflected by its current composition. As at
31 December 2021, women represented 25% of the
Board’s composition and held both the Chair and
Senior Independent Director positions. As a result of
changes since year end, women now represent 37%
of the Board’s current composition and hold the Chair,
Senior Independent Director and CEO positions.
Further, MADE is proud to report that women
represent 34% of MADE’s senior management
(as defined in the Code). Details of gender diversity
across our full employee base can be found on page 58.
In addition, the current composition of the Board also
reflects the recommendations made by the Parker
Review with at least one Board member from a black,
Asian or minority ethnic background. For a breakdown
of the current composition of the Board please also
refer to pages pages 92-93 of this Report.
The Board recognises that while these current
achievements are positive and reflective of MADE’s
long-standing commitment to being a diverse and
inclusive business, we will not be complacent. In line
with MADE’s culture and values and to achieve the
strategic aims of the business, the Committee and
the Board recognise that it is important to consider
the matters of diversity and inclusion at all levels.
Accordingly, the Board is committed to facilitating and
sponsoring broader diversity initiatives across MADE,
with the support of the Nomination Committee, the
Executive Leadership Team and the Diversity and
Inclusion Council.
106 MADE.COM Group Plc
Annual Report and Accounts 2021
Audit and Risk Committee Report
“The focus for 2022 will be on further
development of the business’s control
framework, including the recruitment
of a Head of Risk and Internal Audit.”
Matthew Price
Chair
Committee membership and attendance
Member Independent Attendance
Matthew Price (Chair)
1,2
√ 2/2
Gwyn Burr
1
√ 2/2
George McCulloch
1
√ 2/2
1. Director has recent and relevant financial experience (in compliance
with Provision 24).
2. Director has competence in accounting and auditing (in compliance
with DTR 7.1.1A(2)).
Committee Membership and Attendance
As discussed in the Corporate Governance Statement
on page 91 the Board is aware that the current
composition of the Committee is not fully compliant
with Provision 24 of the Code as not all members are
considered independent. As noted in the Nomination
Committee Report on page 104, a recruitment process
is currently underway for a new independent Non-
Executive Director. It is expected that the relevant
appointee will possess the relevant skills and
experience to replace George McCulloch as the third
independent member of the Committee.
In accordance with the Committee’s terms of
reference, meetings of the Audit and Risk Committee
can also be attended by other Directors, key
employees and the external auditor, when deemed
appropriate. The Chair, Chief Executive Officer, Chief
Financial Officer, Group Financial Controller, General
Counsel and Company Secretary and the external
auditor attended both of the meetings that took place
during the period under review.
Key Responsibilities
+ monitoring the integrity of the Financial Statements.
+ assessing the appropriateness of the Group’s
accounting policies
+ reviewing and challenging the clarity and
completeness of disclosures in the Company’s
financial report and providing advice to the Board on
whether the Annual Report and Financial Statements
are fair, balanced and understandable
+ advising the Board on the Company’s overall risk
appetite, tolerance and strategy and monitoring the
effectiveness of the Group’s internal control and risk
management framework
+ overseeing the Group’s relationship with its external
auditor, including their appointment, remuneration,
independence and the effectiveness of the audit
process
+ reviewing the adequacy and security of the Group’s
policy and procedures in relation to whistleblowing,
fraud and anti-bribery and corruption
107 MADE.COM Group Plc
Annual Report and Accounts 2021
Dear Shareholder,
I am pleased to present the first Report of MADE’s
Audit and Risk Committee (the ‘Committee’).
This Report describes the Committee’s ongoing
responsibilities and key activities undertaken since
MADE’s IPO in June 2021 and details how the
Committee has carried out its responsibilities to ensure
that the Group complies with relevant parts of the
Code, the Listing Rules and other legislation that
applies to MADE as a publicly listed company.
As part of the preparation for the IPO, the Group’s
existing system of internal controls and risk
management was subject to a rigorous review by
external advisors. It was confirmed that the Group
had a robust internal control and risk management
framework, but that there were some areas that could
be strengthened further. Following this, the Board of
Directors committed to a scheduled timetable of
further improvements in relation to the Company’s
financial position and prospects procedures, referred to
as ‘post-IPO FPPP actions’. The Committee has taken
an active role in reviewing the Company’s progress
against these action items, and I am pleased to report
that we are making excellent progress, with the
formalisation of a number of policy documents across
key business areas and the delivery of a business risk
framework. The focus for 2022 will be on further
development of the business’s control framework,
including the recruitment of a Head of Risk and Internal
Audit.
Whilst this Audit and Risk Committee Report describes
some of the key matters addressed during the year, it
should be read in conjunction with the Financial
Statements.
Matthew Price
Chair of the Audit and Risk Committee
7 March 2022
Key Areas of Focus During the Year
+ reviewing the Group’s risk management process
and internal control systems. More details on the
Company’s approach to risk management can be
found on pages 75-83
+ reviewing and approving the interim Financial
Statements and the half year results
announcement
+ monitoring the Company’s progress against the
post-IPO FPPP actions
1
, as identified at the time
of IPO
+ approving the Company’s policy relating to the
provision of non-audit services by the external
auditor
+ monitoring the Company’s arrangements for
whistleblowing and anti-bribery
+ discussing the Company’s approach and project
plan for the preparation of the Annual Report
Since the end of the financial year the Committee
has held one further meeting where it received
updates on and discussed the following key issues:
+ whether this Annual Report, taken as a whole, is
fair, balanced and understandable. The resulting
statement of Directors’ responsibilities can be
found on page 153
+ the Company’s going concern status and medium-
to longer-term viability. The associated Going
Concern statement and Viability Statement can be
found on pages 81-83 of the Strategic Report
+ the effectiveness of the external audit process,
the independence and objectivity of the external
auditor and the supply of non-audit services by the
external auditor; and
+ the effectiveness of the Company’s internal audit
arrangements and progress made towards recruiting
a new Head of Risk and Internal Audit
1. FPP: the Group’s financial position, prospects and procedures, as
identified at the time of the IPO.
Audit and Risk Committee Report
continued
108 MADE.COM Group Plc
Annual Report and Accounts 2021
Audit and Risk Committee Report
continued
Compliance with anti-corruption and whistleblowing
policies
MADE takes a zero-tolerance approach to corruption.
We expect all our employees and partners to act with
honesty and integrity and never to engage in any
activity that could be considered to be accepting or
giving a bribe or otherwise in breach of anti-corruption
laws. Our Anti-Corruption and Bribery Policy (ABC)
provides our employees with clear guidance on
acceptable and non-acceptable behaviours in relation
to gifts, entertainment and hospitality, including what
may and may not be accepted and the records to be
kept; the absolute prohibition on facilitation payments;
procurement and tender processes; and unauthorised
political community and charitable contributions.
The ABC Policy sets out our expectations that they
each play an active role in helping to prevent bribery
and corruption and is available for all employees to
access on the Company’s intranet. In line with the ABC
Policy, mandatory training was rolled out across the
business during 2021. No incidents have been raised
during the year and to the date of this Report.
At MADE we want to encourage a working environment
where people feel comfortable highlighting malpractice
of any kind. The Group has a Whistleblowing Policy,
which was updated during the year and is available to
all employees through MADE’s intranet site. Under this
policy, malpractice is defined broadly to cover criminal
activity, breach of legal regulations, endangering
somebody’s health or safety, environmental damage,
any attempt by any person to conceal any such
matters, and any other malpractice forbidden by the
Company’s policies. During the year, MADE also
introduced an externally facilitated whistleblowing
hotline, through which employees can raise concerns
anonymously if they wish. There is a robust process in
place to investigate any allegations made through the
hotline, and to escalate any findings of wrongdoing to
the Chair of the Committee. Updates on any such
matters would be made at each Committee meeting
and the Chair of the Committee would report to the
Board on any whistleblowing reports made during his
regular updates which form part of the Board’s routine
review of the Company’s whistleblowing processes and
procedures. Again, we are pleased to report that no
significant issues arose during the year and to the date
of this Report.
Underpinning our ABC and Whistleblowing policies is
the controls framework and environment established by
the business, as well as the culture of honesty and
integrity fostered by the Company. At MADE we have
established processes that are designed to mitigate
and prevent fraudulent activity, including system access
controls; security systems installed at physical
locations; segregation of duties; and effective
management oversight. These controls and processes
have been operating effectively throughout the year.
Viability assessment
The Committee assessed the viability of the Group
over a four-year period to December 2025, which is
aligned with the strategic outlook timeframe and that
is considered sufficient to capture the impact of any
existing material long-term obligations, whilst also
providing a realistic timeframe to achieve the current
strategic goals. As part of this assessment, the
Committee reviewed the risk assessments, strategic
plans and stress test models prepared by management,
and where appropriate challenging the assumptions
underlying these assessments to validate the
conclusion reached on viability. More information can
be found in the Group’s viability statement on pages
81-83.
Going concern assessment
The Committee also assessed the shorter-term
prospects of the Group over an eighteen-month period
from the balance sheet date to June 2023 for the
purposes of concluding on the appropriateness of the
going concern basis of preparation. As part of this
assessment the Committee reviewed the budget base
case and scenario models prepared by management,
and where appropriate challenged the assumptions
included in these models to validate the conclusion
reached on going concern. More information can be
found in the Group’s going concern statement on pages
81-83.
Fair, balanced and understandable
The Annual Report and Accounts must be fair,
balanced and understandable to provide external
stakeholders with the necessary information to assess
the position, performance, business model and
strategy of the Group. The Committee is responsible
for providing the assurance to the Board that a fair,
balanced and understandable statement can be given
on behalf of the Directors.
109 MADE.COM Group Plc
Annual Report and Accounts 2021
Audit and Risk Committee Report
continued
In reviewing this Annual Report and Accounts, the
Committee considered various factors including:
+ the balance of focus on positive and negative factors
within the Strategic Report
+ the adequacy of disclosures of principal and emerging
risks
+ the completeness and transparency of the viability
and going concern statements; and
+ the consistency of reporting of financial and other
measures, including APM
The Committee had an active oversight role in the
preparation of the Annual Report and Accounts, which
included regular updates on progress from the relevant
members of the Executive Leadership Team and timely
reviews of drafts of the Annual Report to enable the
Committee to provide feedback and gain confidence
that the Report was presenting a balanced view.
Any questions raised were discussed with the
appropriate team members and comments provided
by the Committee on the Annual Report were worked
into the draft as appropriate.
Further, the Committee received advice from the
external auditor and other professional advisors during
the drafting process. As a result of the processes
highlighted above, the Committee, and the Board, are
satisfied that this Annual Report is fair, balanced and
understandable when taken as a whole.
Significant financial reporting issues, judgements and
estimation uncertainty
As noted above, a key area of focus for the Committee
is to review and monitor the integrity of MADE’s
financial reports, which for this financial year included
the Half Year and Full Year Results for 2021. In addition
to focusing on areas including revenue recognition (see
page 108 below) and share option valuations (see page
109 below), the Committee also carefully reviewed the
accounting treatment of IPO-related matters. Detailed
papers were presented by the
CFO and the Group’s Financial Controller at each
Committee Meeting to provide sufficient explanation
and support for the treatment of significant accounting
areas. In addition, the Financial Statements were
reviewed by the Committee in a timely manner for
comment prior to publication.
Revenue recognition
Revenue on the sale of products to customers is
recognised at the point of delivery to the customer.
An element of estimation is applied at the point of
dispatch from the warehouse based on average delivery
days to calculate the value of dispatched but
undelivered revenue at the reporting date which is
then recognised in deferred revenue.
At the same time, a provision for future returns need to
be calculated. These are estimated based on historical
returns and are recorded to allocate them to the same
period in which the original revenue is recorded.
The Committee has held discussions with management
and the external auditors, as well as reviewing reports
detailing management calculations of both the average
delivery days applied to the revenue cut off as well
as the calculation of the sales return provision.
The Committee has challenged the assumptions
and estimates in these models. Based on this, the
Committee is satisfied that revenue has been
appropriately recognised for the 12 months ended
31 December 2021.
IPO-related accounting matters
As a result of the IPO process that the Group went
through in the year, there were a number of one-off
accounting-related matters that required consideration
by the Committee, including:
a) Group reorganisation – as part of the preparation
for the IPO, a pre-IPO restructuring of the Group
was implemented to create a suitable UK-based
listing vehicle. Management worked with external
legal, tax and accounting advisers to formulate a
step plan and accompanying papers to assess the
impact of the reorganisation. The Committee
reviewed these papers and held discussions with
management with a focus on key areas including
the use of continuation accounting and valuation
of the investment held by the parent entity. Based
on these factors, the Committee are satisfied that
the reorganisation has been appropriately reflected
in the final presentation of the consolidated Group
Financial Statements for the year ended 31
December 2021. Refer to note 2 in the Financial
Statements for further details on the Group
Reorganisation.
b) IPO-related transaction costs – in preparation for
the IPO, the Group incurred a number of significant,
one-off costs. The Committee has reviewed the
accounting treatment of these costs, including the
allocation of share issuance costs, and is
comfortable that the costs have been accurately
accounted for and appropriately presented in the
Financial Statements of the Group for the year
ended 31 December 2021. Refer to notes 7 and 23
in the Financial Statements for further details on
IPO related costs.
110 MADE.COM Group Plc
Annual Report and Accounts 2021
Audit and Risk Committee Report
continued
Share option valuation
The Group granted a number of share option awards
during the year. The calculation of the fair value of
these awards is considered to be complex, including
the requirement to use a number of different valuation
models. External advisers were engaged to run these
models and produce the fair value calculation.
The Committee has reviewed the reports prepared
summarising the output of these valuation models,
including the key inputs and assumptions that have
been made, and is satisfied that the fair values assigned
to the grants in the year ended 31 December 2021 are
appropriate. Refer to note 24 in the Financial
Statements for further information in share option
schemes.
Other significant accounting matters
During the current financial year, the Committee has
also considered papers prepared by management on
the impact and accounting treatment of other
significant or complex accounting matters including any
significant judgments required for new leases; the
assessment of the valuation and recoverability of
inventory on hand; and the capitalisation of technology
development costs. The Committee is satisfied with
the conclusions that the management team has
reached in respect of these areas. Refer to note 3 in
the Financial Statements for further details on areas of
significant judgement and estimation.
Risk, Internal Audit and External Audit
A key focus for the Committee during the 2021 financial
year has been to assess and develop MADE’s risk and
control framework, as it transitioned from a private to a
public company. As discussed further below, a significant
amount of work took place in advance of the IPO, to
establish the robustness of MADE’s existing processes
and to identify the areas for further improvement.
Risk management and internal control
The Board of Directors recognises its overall
responsibility for the Group’s frameworks for risk
management and internal control and for monitoring
their effectiveness. The Board has delegated
responsibility for management of the process for
identifying, evaluating and managing risk, to the
Committee. This responsibility includes the
management and oversight of the post-IPO FPPP
actions and the Committee continue to monitor
MADE’s progress against these areas to ensure that
actions are being embedded within the business.
The Group maintains a Corporate Risk Register, which
is formally reviewed, agreed and subsequently approved
by the Committee at least annually. The Risk Register is
designed to identify, in so far as possible, the key risks
identified for the Group and its strategy. In light of
these key risks, control processes have been
established, which are designed to manage as far as
reasonably possible the risk of failure and provide some
assurance against material misstatement and loss.
Details of how the Group manages its principal risks are
set out on pages 75-83.
The Board, on the recommendation of the Committee,
remains satisfied that the risk management process
and internal control environment continues to be
effective in identifying, assessing and ranking the various
risks facing the Group, and in monitoring and reporting
on progress in mitigating their potential impact on the
business.
Internal Audit
A key priority of the Committee for the post-IPO
period has been to establish a new internal audit and
risk management function. As such, and as noted above
in this Report, MADE is currently recruiting a Head of
Internal Audit and Risk Management, who will be
responsible for:
+ the review and oversight of the framework for risk
management and internal control across the Group
to identify, monitor and manage principal risks and to
establish a risk appetite for each principal risk beyond
which corrective action is required
+ the development of an assurance programme to
ascertain whether the controls around principal risks
are designed and operating effectively
+ reporting on the operation of the Group’s policies,
standards and procedures including their use and
appropriateness
+ reporting on the operation of the Group’s financial
control procedures including their use and
appropriateness
+ reviewing and reporting on the operation of the
Group’s corporate governance arrangements; and
+ formulating the annual plan of internal audits and
taking into account the principal risks facing the
Group when approving such plan.
The new Head of Internal Audit and Risk Management
is expected to be appointed in H1 2022 and we look
forward to reporting formally in next year’s Annual
Report on the transition to a formal internal audit and
risk management function.
111 MADE.COM Group Plc
Annual Report and Accounts 2021
Audit and Risk Committee Report
continued
In the absence of a formal internal audit function, the
Finance Team will continue to be responsible for the
activities outlined above, under the supervision of the
Committee. The Committee will continue to engage
with external independent advisors where necessary to
help to manage a programme of internal audit. During
2021 a detailed review of the internal control framework
at MADE was carried out by external advisors who
provided assurances in the robustness of existing
processes. The work of the external auditor has not
been impacted by the current lack of an internal audit
function. As a result, the Committee is satisfied that
the internal control framework currently in place
operates effectively until the new internal audit
function is established.
External auditor
The Committee manages the relationship with
the external auditor on behalf of the Board and is
responsible for recommending to the Board the
appointment, re-appointment and removal of the
external auditor. Ernst & Young LLP have been auditor
of the Group since 2014 and became the auditor of
the Company at the point of the IPO in June 2021.
The current audit partner is Julie Carlyle, who was
also appointed at the time of the IPO in June 2021.
The members of the Committee met with the external
auditor without Executive Directors or management
present at its September meeting. Going forward the
Committee will continue to set time aside to meet
with the external auditor, in the absence of
management.
Safeguarding the auditor’s independence
In 2021 the Committee approved MADE’s Policy on
Non-Audit Services (the ‘Policy’), which incorporates
the requirements of Revised Ethical Standard issued
by the FRC in December 2019. MADE is considered a
public interest entity (PIE) and in line with the FRC
requirements the external auditor is prohibited from
providing any non-audit services other than those on
the FRC ‘whitelist’ of permissible services, and any
non-audit services that are provided will be subject to
a cap of 70% of the average statutory audit fee. The
Committee recognises that it is of paramount
importance that the external audit function remains
independent. To this end, the Policy has been
established to ensure that the provision of non-audit
services do not impact on the external auditor’s
independence and objectivity. The key elements of
the policy can be summarised as follows:
+ fees for non-audit services provided by the statutory
auditor in any year may not exceed 70% of the
average fees for the Group statutory audit in the
three previous years
+ the auditor is only permitted to provide non-audit
services on the FRC whitelist; and
+ the external auditor may not be engaged to provide any
non-audit services without the agreement of the
Audit and Risk Committee. Approval may be obtained
from the Chair of the Committee between meetings
and subsequently ratified at the next Committee
meeting
The Policy is designed to ensure that the external
auditor is only appointed to provide a non-audit service
where it is considered to be the most suitable supplier
of that service, whilst recognising that there are certain
types of work where a detailed knowledge of the
company’s business is advantageous. The Policy also
puts in place safeguarding measures to eliminate or
reduce the risk that any such appointments could
threaten the independence and objectivity of the
external auditor.
At its November meeting, Ernst & Young LLP provided
a report to the Committee, which outlined its own
internal safeguards that are in place to mitigate any
risks to their independence and objectivity. Ernst &
Young LLP are also required to disclose to the
Committee any significant facts and matters that may
reasonably impact on their independence or on the
objectivity of the lead partner and the audit team.
No such disclosures were made during 2021 and up to
the date of this Report.
Audit fees were payable to Ernst & Young LLP during
the year in relation to the interim review, year-end audit
and statutory audit of the subsidiary company and are
detailed on page 185 in note 10 to the Financial
Statements.
Non-audit fees of £1m were paid to Ernst & Young LLP
during the period. These fees include professional
advisory services provided by Ernst & Young LLP prior
to the IPO (£0.9m). Ernst & Young LLP were appointed
from a group of potential services providers, following
an independent tender process. Subsequent to the
IPO, the only non-audit services were procedures
performed as part of the review of the half year results
(£0.1m). Notwithstanding these activities and the
associated fees, the Committee and the Board were
satisfied that Ernst & Young LLP remained independent.
112 MADE.COM Group Plc
Annual Report and Accounts 2021
Audit and Risk Committee Report
continued
Effectiveness of the Auditor
It is the responsibility of the Committee to assess the
effectiveness and independence of the external audit
process in accordance with Provision 25 of the Code.
At its November meeting Ernst & Young LLP presented
the Committee with a detailed audit plan and explained
the proposed scope and areas of Audit focus.
At its February 2022 meeting the CFO and his team
presented to the Committee the financial results for
the Group for the year ended 31 December 2021, and
Ernst & Young LLP presented their review of the audit
for the same period. The Committee assessed the
performance of the external auditor and the
effectiveness of the external audit at this meeting.
As part of their assessment, the Committee reviewed
amongst other matters:
+ feedback on the effectiveness and performance of
the external audit from the CFO, Group Financial
Controller and senior members of the Legal and
Finance teams who were closely involved in both the
half year and full year reporting process
+ Ernst & Young LLP’s fulfilment of the agreed audit
plan
+ reports highlighting the material issues and
accounting judgements that arose during the
conduct of the audit; and
+ Ernst & Young LLP’s objectivity and independence
during the process
The Committee concluded that the audit process as a
whole had been conducted robustly and that the team
selected to undertake the audit had done so
thoroughly, professionally and independently. Ernst &
Young LLP’s performance as auditor to the Group was
therefore considered to be satisfactory. As such, the
Committee has recommended to the Board that Ernst
& Young LLP be reappointed as external auditor for the
financial year ending 31 December 2022. The Company
will be seeking shareholder approval for the reappointment
of Ernst & Young LLP at its AGM to be held in May 2022.
113 MADE.COM Group Plc
Annual Report and Accounts 2021
Remuneration Committee Report
Committee membership and attendance
The Remuneration Committee (‘Committee’) comprises
two independent Non-Executive Directors and the
Non-Executive Chair of the Board. All members of
the Committee have the right balance of skills and
experience. None of the Committee members has any
personal financial interest (other than as shareholders)
in the decisions made by the Committee, cross-
directorships or day-to-day involvement in running the
business. Internal support may be provided by the
Executive Directors, General Counsel & Company
Secretary and Group HR Director, whose attendance at
Committee meetings is by invitation from the Chair. No
Director was present for any discussions that related
directly to their own remuneration.
The Committee’s key responsibilities
+ determine the Remuneration Policy for the
Company’s Chair, Executive Directors, the General
Counsel & Company Secretary and other members of
the Executive Leadership Team
+ determine the individual remuneration packages of
the Directors within the Remuneration Policy and the
Executive Leadership Team
+ review the appropriateness of the Remuneration
Policy on an ongoing basis
+ oversee wider workforce pay practices, including the
operation of the Group’s employee share schemes
+ appoint independent remuneration advisers as required
Key areas of focus during the year
Focus areas since IPO
+ development of the Remuneration Policy for approval
+ shareholder consultation on the Remuneration Policy
+ granting one-off IPO awards
+ granting the first long-term incentive plan awards
+ approval of the implementation of the all-employee
share plans
+ understanding wider workforce pay arrangements
+ appointing independent Remuneration Committee
advisers
+ approving matters relating to the former CEO’s
relocation
Focus areas for FY22
+ ongoing implementation of the Remuneration Policy
+ monitoring developments in the market and best
practice
+ approval of the FY22 annual bonus targets
+ approval of the FY22 long-term incentive targets
+ granting of FY22 long-term incentive awards
+ operation of all-employee share plans
+ continuing to review wider workforce pay arrangements
+ review the Committee’s effectiveness for the first year
+ approve the remuneration arrangements for the
former CEO, Philippe Chainieux
+ approve the remuneration arrangements for our
newest Executive Director and CEO, Nicola
Thompson
“I am excited as we embark on our
journey as a public company. The
remuneration arrangements we put
in place at the IPO support the
delivery of our strategy and generation
of sustained long-term value for
shareholders, customers and wider
stakeholders.”
Gwyn Burr
Chair
Committee membership and attendance
Member Independent Attendance
1
Gwyn Burr (Chair) √ 4/4
Susanne Given √ 4/4
Matthew Price √ 4/4
1. Three scheduled meetings and one unscheduled meeting to review
and approve arrangements for the former CEO in light of his relocation
to France.
114 MADE.COM Group Plc
Annual Report and Accounts 2021
Dear Shareholder,
As Chair of the Committee, I am pleased to present
this first Report on Directors’ Remuneration since
MADE’s admission to the London Stock Exchange on
21 June 2021. It has been a historic year for the Group
and I have taken the opportunity to explain the
Committee’s work up to and after the Group’s IPO.
Departure of Philippe Chainieux
On 21 February 2022 we announced that Philippe
Chainieux would step down from his role as CEO of
the Group and its Board for family reasons. As a result,
we welcomed our Chief Operating Officer, Nicola
Thompson, to the Board and she assumed the position
of Interim CEO initially and subsequently was
appointed to the CEO role on a permanent basis with
effect from 7 March 2022.
Full details of Philippe’s termination arrangements may
be found in the section 430(2B) statement on the
Company’s website, and will also be fully disclosed in
next year’s Remuneration Report. Details of the
remuneration arrangements for Nicola may also be
found in an announcement on the Company’s website
and will also be fully disclosed in next year’s
Remuneration Report.
Context of remuneration
Approach to remuneration
In the lead up to the IPO the Committee focused its
attention on designing and implementing a new
remuneration framework for our Executive Directors
and Executive Leadership Team. The key features
of the proposed Policy were set out in the IPO
prospectus. The Policy which is set out on pages
132-147 of this Report will be submitted to shareholders
for approval at our AGM.
The Group’s approach to remuneration is based on a
philosophy that remuneration should support the
delivery of the business strategy and outcomes should
be linked to the generation of sustained long-term value
for shareholders, customers and wider stakeholders.
The Committee has, therefore, developed an approach
to remuneration which is competitive to retain and
attract diverse talent, rewards the achievement of
challenging short and long-term strategic objectives and
aligns executives’ interests with those of stakeholders
without creating incentives that will encourage excessive
risk taking or unsustainable Group performance.
The Committee is also very mindful of the focus of
executive pay in the UK listed company environment
and the continually evolving corporate governance
landscape. Accordingly, we have ensured that the
Group’s remuneration framework is aligned with the
Code and takes account of best practice.
One-off IPO Awards
On Admission and as referenced in the IPO prospectus,
one-off awards were granted to the Executive Directors
and our Executive Leadership Team under the
Made.com Group Plc Incentive Plan (‘MIP’) (‘IPO
Awards’). For the former CEO and CFO the value of the
awards were equal to 300% of salary. The purpose of
the IPO Awards was to ensure ongoing retention and
incentivisation and in particular, focus the leadership
team on maximising shareholder value in the period
following the IPO. Details of the performance targets
and measures were set out in the IPO prospectus and
we also disclosed the performance targets when these
awards were granted. Half of the IPO Award will vest
two years from the date of grant, with the remaining
half vesting three years from the date of grant.
Conditions of vesting are linked to absolute TSR, gross
sales growth and continued employment (equally
weighted), which are detailed on page 124.
The IPO Award was part of the remuneration agreed
whilst the Company was private and therefore is not
part of the Group’s ongoing remuneration framework.
In line with the reporting guidelines, the value of the
component of the IPO Award which is subject to
continued employment only is reported in the single
total figure of remuneration for FY21. The value of the
component of the IPO Award which is subject to TSR
and gross sales performance targets will be reported
when vesting outcomes are known.
Pre-Admission incentives
Many employees across the Group hold equity
incentives which were in place prior to the IPO to
ensure ongoing retention, incentivisation and alignment
with shareholder interests. This extends to our former
CEO and CFO. All equity which was granted pre-IPO is
fully vested and full details of the former CEO’s and
CFO’s share interests are set out on page 125. These
equity incentives do not form part of the remuneration
provided as a listed company.
Performance and reward for FY21
Impact of Covid-19
A key area for the Board’s focus in 2021 has been
navigating the ongoing and evolving complexities and
challenges of the Covid-19 pandemic. For MADE, this
focus has fallen broadly into two key areas: our people
and our customers.
The wellbeing and safety of our employees has always
been a key priority. While most office-based employees
continued to work from home in the first half of 2021,
for some of our team members, such as our warehouse
and showroom employees, remote working was not
possible. The Board focused on overseeing the
continued operation and evolution of appropriate
frameworks and measures to ensure all MADE
Remuneration Committee Report
continued
115 MADE.COM Group Plc
Annual Report and Accounts 2021
Remuneration Committee Report
continued
workplaces remained safe and business continuity could
be achieved. Enhanced health and safety measures
relating to social distancing, regular cleaning, and split
shift arrangements were implemented in our warehouses
from the start and continue to be regularly reviewed.
We also developed our new ways of working framework,
recognising there is no ‘one size fits all’ approach with
roles mapped to workplace-based, remote and hybrid
arrangements. This remains under regular review.
During the year, no employee was furloughed and no
government support was required.
As a Board, we have also focused on addressing the
significant supply chain disruption throughout 2021
caused by the Covid-19 pandemic, along with additional
factors. A key focus for the second half of 2021 has
been on accelerating our strategic pillar of investing in
customer experience, primarily through the accelerated
reduction in product lead times, supported by the
expansion of our warehouse footprint.
Business performance highlights
MADE had a very successful year in terms of gross sales
performance. For the full year, the business delivered
38% gross sales, a dramatic outperformance
of the furniture and homeware market. This is due to the
ongoing attractiveness of our unique designs, compelling
value and service proposition. Newness of products
resonated well for both new and existing customers.
The business has made good progress on its key
strategic initiatives. Range expansion has continued,
with SKU count increasing to over 9,500, so we are
offering even more great choice to our customers.
We have made good underlying progress on our service
proposition, but have been adversely affected by the
global supply chain disruption. This disruption has both
increased freight costs, negatively impacting our
profitability in 2021, and impacted our service levels.
We are conscious of the impact this has had on our
customers and we have put in place a strategy to
ensure we deliver on our customer service proposition
during 2022.
Annual bonus
The bonus for FY21 was based on the framework in
place prior to the IPO. The vast majority of the
maximum opportunity (approximately 86%) was based
on Group performance targets relating to: gross sales
growth, EBITDA, customer satisfaction, sustainability
goals and the remainder (approximately 14%) related to
the successful execution of the IPO. The maximum
opportunity for the former CEO and CFO was £126k
and £112k respectively. Based on performance in FY21,
the outcome equals 62% of the maximum opportunity.
This results in the following bonus outcomes: £78k
(17% of salary) in respect of the former CEO and £69k
(21% of salary) in respect of the CFO. The Committee
believes the formulaic outcomes are appropriate in light
of Company and strong individual performance in FY21
and no discretion has been exercised to vary those.
Further details on the FY21 bonus can be found on
page 122. As at the date of writing, no determination
has been made in respect of the former CEO’s
termination arrangements (including in relation to
bonus). The outcome referred to above has, however,
been included in the single figure of remuneration for
FY21 for the former CEO. Full details of the former
CEO’s termination arrangements will be be fully
disclosed in next year’s Remuneration Report.
These arrangements will be in line with our proposed
Remuneration Policy, which will be subject to
shareholder approval at the 2022 AGM. From FY22 the
Executive Directors’ bonus opportunity will be 150% of
salary.
Long-term incentive awards granted
The first long-term incentives awards were made under
the MIP on 12 July 2021. These took the form of
performance share awards (PSP awards). The value of
the awards for the former CEO and the CFO was equal
to 200% of base salary and the number of nil cost
options awarded was determined using the IPO price of
£2.00. The PSP awards are subject to stretching
performance targets based on gross sales growth,
relative TSR, EPS and ESG measures (all equally
weighted at 25%). Details of the performance targets
were set out when the PSP awards were granted and
full details are set out on page 123.
Proposed Policy and shareholder engagement
The Committee adopted a pay positioning policy
post-IPO which takes into account the size and
complexity of the Group and market practice in
the sectors within which the Group operates and
competes for talent (retail and e-commerce).
The Committee also took into account practice
observed within recent mid-cap IPOs. The Committee
also recognises that the Group is competing for talent
in a global environment and this, therefore, poses
potential challenges in recruitment scenarios.
The Committee has developed a remuneration
framework which seeks to strike a balance between
these aforementioned factors.
116 MADE.COM Group Plc
Annual Report and Accounts 2021
The Committee and the Executive Directors felt that it
was necessary to have a total remuneration package
that was more heavily weighted towards variable pay to
preserve the performance-based culture of the
organisation and to ensure sustained focus on the
Group’s performance post-IPO. This also complements
the high shareholdings that the Executive Directors have
in the Group. As a principle, the Committee seeks to
provide total target remuneration around the median of
the chosen peer group, which comprises companies in
the sectors where we operate and compete for talent.
The Committee believes that it is important to
recognise the diverse global environment in which the
Group is competing for talent. Therefore, in the case of
recruitment scenarios for Executive Directors, an
exceptional limit of up to 400% of salary may apply in
relation to the long-term incentive plan opportunity.
In assessing the appropriate level of any incentives, the
Remuneration Committee will take into consideration a
range of factors including any buy-out awards which, for
the avoidance of doubt, are outside these limits.
During the early part of 2022, we engaged with major
shareholders and the main shareholder representative
bodies. We set out the proposals for the Remuneration
Policy in a detailed letter. On behalf of the Board, I would
like to thank those who provided us with feedback.
No material issues or concerns were raised during these
shareholder meetings and as a result, no changes were
made to the original Policy proposals. We will continue
to maintain an open and transparent dialogue with our
shareholders.
Implementation of the Policy for FY22
This section sets out how the Policy will be
implemented for FY22. On 21 February 2022 we
announced that Philippe Chainieux would step down
from his role as CEO of the Group and its Board for
family reasons. As a result, we welcomed our COO,
Nicola Thompson, to the Board and she assumed the
position of Interim CEO initially and subsequently was
appointed to the CEO role on a permanent basis with
effect from 7 March 2022.
Base salary
In the IPO prospectus, we signposted that there would
be a phased increase to the Executive Directors’
salaries such that at the 2022 AGM and subject to
satisfactory corporate and individual performance,
salary levels will be increased to the market median of
the chosen peer group. This positioning philosophy is
consistent with our overall approach to be a market
median and reflects MADE’s approach that remuneration
levels should be fair and competitive and be aligned
with levels amongst peers. The intention was that base
salaries for the former CEO and CFO would be
increased from £450,000 to £550,000 and £325,000
to £365,000, respectively. The Committee has
considered this further, and whilst the leadership
following the IPO has been exceptional and we are
making strong progress against executing our strategy,
we are also very aware that the changes proposed are
material and given the wider macroeconomic
environment and external headwinds impacting the
business, the proposed increase would not be
appropriate at this time. With this in mind, the
Committee has determined that the standard increase
to the Executive Director’s salaries will be in line with
the general workforce increase of 2.5%, and we will
defer the increases we set out in the IPO prospectus.
The salary for the CFO for FY22 will be £333,125.
Details of the remuneration arrangements for Nicola
Thompson may be found in an announcement on the
Company’s website and will also be fully disclosed in next
year’s Remuneration Report. These arrangements will be
in line with our proposed Remuneration Policy, which will
be subject to shareholder approval at the 2022 AGM.
Pension
We have aligned workforce pension levels in the UK
and the employer rate is 5% of salary for all employees.
This rate will apply to incumbent and future Executive
Directors who are based in the UK.
Annual bonus and long-term incentives
From FY22, the normal annual maximum bonus
opportunity is 150% of salary and the long-term
incentive is plan opportunity is 200% of salary.
The same incentive levels apply for Executive Directors.
Bonus arrangements and long-term incentives will
operate in line with the proposed Policy. The bonus
will be assessed against a combination of financial,
strategic and operational objectives. PSP awards for
FY22 will be based on the performance measures
and weightings as the FY21 award: gross sales
growth (25%); EPS (25%); relative TSR (25%)
and environmental sustainability goals (25%).
Further details on the targets together with the
implementation of the Policy are set out on page 129.
Remuneration Committee Report
continued
117 MADE.COM Group Plc
Annual Report and Accounts 2021
Remuneration Committee Report
continued
PSP grant for FY22
The PSP award for FY22 is due to be granted in
April 2022.
The Group’s share price has been volatile and negatively
impacted by global supply chain challenges facing the
sector. The Committee is very aware of the need to
ensure that the Executive Directors do not receive
unjustified windfall gains. Given the current share price,
the Committee has decided that an average share price
from the date of the IPO up to the date of grant of the
FY22 PSP awards will be applied for the purposes of
determining the number of nil-cost options that will
be granted. By using an average share price, we are
mitigating the impact of windfall gains. The Committee
will also review the the value of PSP awards at vesting to
ensure it is fully reflective of the performance delivered
and there are are no unjustified windfall gains. Details of
the average share price used will be set out in the RNS
announcement issued once the PSP awards are granted.
Wider workforce reward
As a Committee, we monitor wider workforce reward
arrangements. Following the IPO, the Company has
taken the opportunity to develop a clear reward
strategy which cascades across the organisation.
The key principles of this reward strategy include:
providing market competitive reward, ensuring
consistency and fairness, encouraging collaboration,
driving performance and ensuring simplicity and
shareholder alignment.
Prior to the IPO, we operated the MADE x Everyone share
scheme under which equity awards were granted to all
eligible employees globally, subject to local regulatory
requirements. We are proud that our employees were able
to share in the Group’s success and that so many of our
employees are also shareholders. In 2022, the Company
intends to grant an award of free shares under the Share
Incentive Plan (‘SIP’) on a global basis and launch a
Sharesave Plan (‘Sharesave’).
We also plan to set up an employee forum with
representatives from diverse roles and regions to enable
employees to have a voice on matters such as
wellbeing, diversity, culture, sustainability, and reward.
To ensure two-way meaningful communication, a
Non-Executive Director will meet with the forum twice
a year and insights outside of these sessions will be fed
back to the Committee to ensure the wider workforce
views are taken into consideration when making
decisions. I look forward to being able to update you on
progress next year.
Gender pay gap reporting
We have reported on gender pay now for a number of
years. The Committee is very aware that this is an area
where there is still work to be done to close our mean
pay gap in the UK of 22.5%. While MADE has 57%
female representation at Executive Team Level, our pay
gap is influenced by a higher proportion of men at the
senior management level below, as well as in certain
areas of our business such as Technology which
typically attract a competitive market rate in the
current environment. We understand that we need
Illustration of the key features of the Policy
The diagram below summarises the key features of the Policy to apply for Executive Directors. Our Policy is
forward looking and, if approved, is intended to apply for three years from the date of the AGM.
Remuneration elements Year 1 Year 2 Year 3 Year 4 Year 5
Fixed Pay Base salary
Benefits and
Pension
Annual bonus
+ Maximum of 150% of
salary
+ Malus and clawback
provisions apply
Up to 100%
of salary is
paid in cash
Bonus above 100% deferred into shares
Three-year deferral period
No further performance conditions
Long-term incentive plan
(PSP awards)
+ Normal maximum of
200% of salary
+ Malus and clawback
provisions apply
Three-year vesting period subject to financial and
strategic targets.
Two-year holding period
No further performance
conditions
Shareholding
requirements
Executive Directors build and maintain a 350% of salary minimum shareholding
requirement whilst in employment and post-employment for two years
118 MADE.COM Group Plc
Annual Report and Accounts 2021
to do more to progress female talent through to
leadership roles, and to attract and retain a balanced
workforce overall. Taking steps to further understand
the root causes and reviewing and developing our
action plan will be a key focus for the coming year.
Environmental, social and governance
We are very mindful of the importance of linking our
executive remuneration framework to our Environmental,
Social and Governance (ESG) goals. As you will have
seen earlier in this Annual Report, MADE is committed
to ensuring that our business choices minimise our
impact on people and the planet. We have set some
very clear sustainability commitments up until 2025 and
we have incorporated these commitments within our
annual bonus for FY22 and our PSP performance
conditions for both the FY21 award and the FY22 award.
The Group is focusing on the development of its wider
ESG strategy over the coming year. Alongside this, it is
the Committee’s intention to focus on how we can best
reflect our wider ESG goals and their impact on different
stakeholder groups, within our executive remuneration
framework. This is a critical area for the Group and we
intend to evolve our approach.
Concluding remarks
We are committed to meaningful, transparent and clear
disclosure and I hope that you find our first Directors’
Remuneration Report useful and insightful.
The Committee believes the Policy being proposed is
linked to the delivery of exceptional business results
and the generation of sustained long-term value for
shareholders, customers and wider stakeholders. I look
forward to your support for both the Annual Report on
Remuneration and the proposed Policy.
We welcome any feedback or comments that you
have on this Directors’ Remuneration Report. Whilst
we actively engaged with our shareholders during the
early part of 2022 on our Policy, if you have questions
or comments on any aspect of this Directors’
Remuneration Report, I would be very happy to
hear from you. You can email me at
companysecretary@made.com.
Gwyn Burr
Chair of the Remuneration Committee
7 March 2022
Remuneration Committee Report
continued
119 MADE.COM Group Plc
Annual Report and Accounts 2021
Remuneration at a glance
MADE’s remuneration principles
Performance highlights for FY21
Single figure of total remuneration for FY21 (£000)
Philippe
Chainieux
Adrian
Evans
0
Fixed remuneration (base salary, benefits, pension)
Annual bonus
200
400
800600
1,000
Long-term incentives (IPO award based on continued employment only)
38%
Gross sales growth
1.3m
active customers
50%
increase revenue
growth
100%
Sustainability
targets achieved
Reward outcomes
should be fair
and based on the
delivery of results
Reward should be
aligned with the
Group’s strategy
Reward needs to
be competitive to
recruit new talent
Reward framework
needs to be
acceptable in the
UK listed company
environment
and to wider
stakeholders
Reward framework
should be simple,
flexible and
consistent
Reward should
recognise the
Group focus on
high levels of
employee equity
ownership
Group bonus outturn for FY21
Performance condition Weighting Performance targets vs actual Outturn as a % of maximum
Gross sales growth 40%
EBITDA 20%
Customer 20%
Sustainability 20%
Tot a l 100%
83%
0%
0%
100%
120 MADE.COM Group Plc
Annual Report and Accounts 2021
Alignment of performance measures with strategy/KPIs
Looking ahead to FY22 - Executive Directors
Base salary
1
(£000’s)
Annual bonus PSP award Shareholding guideline
Standard salary increases
will be aligned with the
general wider workforce
increase of 2.5%. Salary
for CFO will be £333k.
Max: 150% salary, over
100% deferred into
shares for three years
Max: 200% salary
Performance shares with
three-year performance
period and two-year
holding period
In-employment: 350%
salary
Post-cessation: 350%
salary (or shareholding at
cessation) for two years
Our four strategic pillars
+Experience +Choice +Reach +Sustainability
Our KPIs which link to our strategic pillars
Gross Sales Deferred Revenue Net working capital Customer
Revenue Adjusted EBITA Free cash flow Sustainability
The incentive metrics we use support our KPIs
Annual bonus for FY22 (measures and weightings) PSP awards for FY22 (measures and weightings)
Gross sales growth 50%
Adjusted EBITDA 25%
Free cash flow 15%
Environmental 10%
Gross sales growth 25%
Earnings per share 25%
Environmental goals 25%
Relative TSR 25%
Shareholder alignment
1
1. TSR directly measures shareholder returns relative to industry
peer (bespoke group of retailers) and general indices (FTSE 250)
1. Details around the FY22 remuneration arrangements for the newly appointed CEO, Nicola Thompson, may be found in an announcement
on the Company’s website and will also be fully disclosed in next year’s Remuneration Report. These arrangements will be in line with our
proposed Remuneration Policy, which will be subject to shareholder approval at the 2022 AGM.
G
G
G
D N C
R
R
R
R
A F
F
S
S
S
D
N
A
A
C
C
Remuneration at a glance
continued
121 MADE.COM Group Plc
Annual Report and Accounts
Annual Report on Remuneration
In this section, we set out the remuneration earned by each of our Executive Directors from 20 April for the
former CEO, and 7 May for the CFO, to our financial year end of 31 December 2021. These starting dates reflect
the point at which the individuals became Directors of Made.com Group Plc. This is prior to the IPO date and in
accordance with the statutory reporting requirements. To aid transparency, we have also disclosed the payments
made to Executive Directors during FY21.
Single Total Figure of Remuneration for each Executive Director for FY21 (audited)
All figures shown
in £’000
1
Base salary
Taxable
benefits
1
Pension
2
Annual
bonus
3
PSP
award
4
Other share
Award
5
Tot al
remuneration
Total fixed
remuneration
Total variable
remuneration
Philippe
Chainieux
6
290 4 17 54 0 450 815 311 504
Adrian
Evans 197 2 8 45 0 325 577 207 370
Full year Single Total Figure (shown to allow for year-on-year comparison in future years)
All figures shown
in £’000
1
Base salary
Taxable
benefits Pension
Annual
bonus
PSP
award
Other share
Award
Tot al
remuneration
Total fixed
remuneration
Total variable
remuneration
Philippe
Chainieux 384 5 21 78 0 450 938 410 528
Adrian
Evans 285 2 8 69 0 325 689 295 394
1. Benefits in the year for the Executive Directors comprised private health cover and life assurance. Philippe Chainieux relocated to France on
1 October 2021 and as required by French law, became eligible for local market standard benefits from this point. These local benefits include
medical cover (‘mutuelle’) and income protection/critical illness cover (‘prévoyance’) and are included in the figures above. UK private health
cover ceased on 30 September 2021 but Philippe Chainieux continues to be eligible for life assurance. Philippe Chainieux did not receive any
payment in relation to his relocation to France.
2. The Company operates a defined contribution pension scheme and the Executive Directors are eligible to participate in this scheme.
From 21 June 2021, the UK-based Executive Directors were eligible to receive 5% of salary as an employer contribution. Philippe Chainieux
received 3% pension contributions up to 21 June 2021 and 5% employer contributions up to 30 September 2021, prior to his relocation.
From 1 October 2021, no employer pension contribution has been made, instead local French retirement benefits apply via the French social
security system. Adrian Evans joined the pension scheme in July 2021 receiving 5% employer contributions. With effect from 1 January 2022,
employer contributions for all UK employees is 5% of base salary.
3. This represents the bonus for the period from when the Executive Directors became Directors of the Group up to 31 December 2021.
Details of performance against annual bonus targets are provided in the next section below. The value shown for the former CEO represents
the formulaic performance outcome. As at the date of writing, no determination has been made in respect of the former CEO’s termination
arrangements (including in relation to payment of bonus).
4. The first PSP award was granted in 2021 and therefore no vesting occurred in FY21.
5. A one-off award of nil cost options was made to Executive Directors (IPO award) in June 2021. As one-third of the award is based on continued
employment only, the figure above represents the value of the portion of the total award that is not subject to performance conditions.
The amount is based on the share price at the date of grant and full details can be found on page 124.
6. The former CEO’s salary is £450,000 per annum and is paid in Euros via the French payroll to enable the necessary French income tax and
social security deductions to be made. A monthly exchange rate is used to convert his salary from Pound Sterling to Euros. For full transparency
the amount paid to the CEO in Euros during the year was €131,989, covering the period from October to December for which the average
exchange rate across the period was 0.8524.
7. No amount of the single total figure is attributable to share price appreciation.
Annual bonus outturn for FY21
For FY21, Executive Directors had the potential to receive an absolute amount of on-target bonus opportunity;
80% of this opportunity was dependent on meeting Group targets and the remaining 20% was based on personal
performance specifically related to the successful execution of the IPO. The on-target bonus opportunity was
£90k and £80k, and the maximum opportunity was £126k and £112k for the former CEO and CFO, respectively.
The following table sets out the performance targets and outcomes. For FY21, no discretion was applied to the
bonus outcome.
The FY21 bonus was set when MADE was a private company and approved by the Board at that time. The FY21
bonus is a cash based plan. The bonus opportunity from FY22 onwards will be a maximum of 150% of salary for
Executive Directors and any payout greater than 100% of salary will be deferred into shares for three years.
122 MADE.COM Group Plc
Annual Report and Accounts 2021
Performance condition
Weighting of
Group measures Threshold On-target Maximum Actual Outturn
Weighting
achieved
Gross sales growth
(year on year)
40% 25% 32% 50% 38% 35.3%
EBITDA 20% £8m £15m £25m (£14.3m) 0.0%
Customer
1
20% Satisfactory Good Excellent Below
threshold
1
0.0%
Sustainability
2
20% 0pts 3pts 5pts 5pts 20.0%
Total Group 100% 55.3%
1. The customer measure is a holistic assessment of our achievement against customer-focused goals, including our net promoter score.
Challenging targets were set at the start of the year by the Board and given some of the challenges faced in 2021 as a result of supply chain
issues, these targets were not met.
2. A system of points to assess the achievement of our 2021 sustainability plan: 1pt: 60% timber sustainably sourced end of 2021, 1pt: 25%
organic cotton in our textile range end of 2021, 1pt: 100% recycled polyester in velvet end of 2021, 1pt: 25% reduction of packaging end of
2021, ½pt: launch of the give away platform, ½pt: consumer facing communication in place.
Annual bonus – individual performance
For FY21, the Board at the time incorporated an individual performance element into the annual bonus in relation
to the successful execution of the IPO. The IPO itself was executed according to plan and the leadership of the
Executive Directors during the IPO was exceptional and therefore, this element of the bonus was met in full.
Total bonus for FY21
Group performance Individual performance
Maximum
Opportunity
Group
outturn
Group
element
payment
Maximum
Opportunity
Individual
outturn
Individual
element
payment
Total bonus
FY21
Philippe Chainieux £108,000 55.3% £59,760
1
£18,000 100% £18,000 £77,760
1
Adrian Evans £96,000 55.3% £53,120 £16,000 100% £16,000 £69,120
1. As at the date of writing, no determination has been made in respect of the former CEO’s termination arrangements (including in relation to
payment of bonus)
Scheme interests awarded in FY21 (audited)
PSP awards granted in FY21 (audited)
The first PSP awards in the form of nil cost options were granted under the MIP in July 2021. The PSP awards will
vest subject to the achievement of performance conditions measured over three financial years, as listed below,
and the individual’s continued employment for three years from the date of grant. The PSP awards are subject to
a two-year post-vesting holding period.
Director
Basis of award
(% of base
salary)
Date of
grant
Number of
shares subject
to award
Face value of
award (£’000)
Share price at
date of grant
1
Philippe Chainieux 200% 12 July 2021 450,000 900 £2.00
Adrian Evans 200% 12 July 2021 325,000 650 £2.00
1. The IPO price was used.
Annual Report on Remuneration
continued
123 MADE.COM Group Plc
Annual Report and Accounts 2021
Performance conditions
Performance condition
Targets
1
Weighting
Threshold
(25% payable)
Maximum
(100% payable)
Gross sales growth performance 25% CAGR 32% CAGR 25%
Relative TSR vs FTSE 250 comparator group
Median position Upper quartile position
12.5%
Relative TSR vs Bespoke group of retail and
e-commerce companies
2
12.5%
Earnings per share 3.5p 5p 25%
ESG: Timber sourcing – tracing back to forest
level and achieving target of sustainably
sourced, fully traceable timber
70% 80% 8.33%
ESG: Textile sourcing – choice of materials
and achieving target of sustainability sourced
key materials
70% 80% 8.33%
ESG: Product packaging – achieving target of
recycled or recyclable materials
90% 100% 8.33%
1. Vesting between threshold and maximum is on a straight-line basis.
2. E-commerce and retail comparator group comprises: Asos, Boohoo Group, Casper Sleep, Dfs Furniture, Dunelm Group, Ebay, Etsy, Farfetch,
Home24, Maisons Du Monde, Marks & Spencer Group, Next, Roche Bobois, The Hut Group, Wayfair, Westwing Group and Zalando.
IPO Awards granted in FY21 (audited)
On IPO, as disclosed in the prospectus, one-off awards in the form of nil cost options were granted under the
MIP to the Executive Directors and other selected members of the Executive Leadership Team. The purpose of
the IPO Award was to ensure ongoing retention and incentivisation and, in particular, focus the leadership team
on maximising shareholder value in the period following the IPO.
Director
Basis of award
(% of base
salary)
Date of
grant
Number of
shares subject
to award
Face value of
award (£’000)
Share price at
date of grant
1
Philippe Chainieux 300% 21 June 2021 675,000 1,350 £2.00
Adrian Evans 300% 21 June 2021 487,500 975 £2.00
1. The IPO price was used.
Performance conditions
Performance condition Detail Weighting
Absolute TSR performance This element of the award will vest if the
Company’s TSR (calculated on a compound annual
growth (‘CAGR’) basis) is equal to or greater than
20% per annum at the TSR measurement dates
of 21 June 2023 and 21 June 2024.
33.33% (equally split
between the two- and
three-year vesting dates)
Gross sales growth This element of the award will vest if the Group’s
gross sales (calculated on a CAGR basis) is equal to
or greater than 25% per annum at the relevant
measurement dates.
The gross sales growth condition will be measured
over the period to the end of the financial year
ending 31 December 2022 and the end of the
financial year ending 31 December 2023.
33.33% (equally split
between the two- and
three-year vesting dates)
Continued employment Directors’ continued employment up to the vesting
dates of 21 June 2023 and 21 June 2024.
33.33% (equally split
between the two- and
three-year vesting dates)
Annual Report on Remuneration
continued
124 MADE.COM Group Plc
Annual Report and Accounts 2021
Executive Director shareholding guidelines
The Committee has adopted formal shareholding guidelines that will encourage the Executive Directors to build
up, over a five-year period from date of appointment and then subsequently hold a shareholding equivalent to
350% of base salary.
The shareholding requirement is calculated as follows:
+ wholly owned shares vested from incentive schemes (including SIP or Sharesave schemes) or purchased by
the individual.
+ unvested deferred bonus shares and any PSP shares in the two-year holding period (included on a notional net
of tax basis).
Both the former CEO and CFO have exceeded the shareholding guidelines and the following chart shows actual
holdings against the requirement.
Shareholding requirement graph
Philippe
Chainieux
Adrian
Evans
0
0%
Shares owned outright Other shares included in holding requirement
500%
350% of salary – Shareholding requirement
1,000% 1,500% 2,000% 2,500% 3,000% 3,500% 4,000% 5,000%4,500%
Statement of Directors’ shareholding and share interests (audited)
Director
Shares owned
outright at
31 December
2021
Shares
under award
subject to
Performance
Conditions
1
Net shares
under award
subject to
continued
service only
2
Net shares
vested
but not
exercised
3
Total no.
Shares
considered
for holding
requirement
Philippe Chainieux
4
4,054,547 900,000 123,750 6,387,008 10,565,305
Adrian Evans
5
– 650,000 89,375 1,750,000 1,839,375
Susanne Given 750,430 N/A N/A N/A N/A
Ning Li
6
33,832,633 N/A N/A N/A N/A
Bruno Crémel
7
– N/A N/A N/A N/A
George McCulloch
8
– N/A N/A N/A N/A
Gwyn Burr – N/A N/A N/A N/A
Matthew Price – N/A N/A N/A N/A
1. Shares under award include the IPO Awards and the PSP awards granted in June 2021 and July 2021. All interests in shares which are not
beneficially owned are in the form of options. Except for part of the IPO Award (see note 2) these shares do not count towards the
shareholding requirement as they remain subject to the achievement of performance conditions.
2. One-third of the IPO Award granted in June 2021 was subject to continued employment only and this one-third of the net award counts
towards the shareholding requirement.
3. Vested shares granted to the Directors pre-IPO but not yet exercised count towards the shareholding requirement.
4. Phillipe Chainieux exercised 8,176,222 shares, which he was awarded while MADE was a private company, on 21 June 2021. The share price at
the date of exercise was £2.00.
5. Adrian Evans exercised 750,000 shares, which he was awarded while MADE was a private company, on 21 June 2021. The share price at the
date of exercise was £2.00.
6. Ning Li’s shareholding is through Haka Investments Limited, a personal investment company wholly owned by Ning.
7. Bruno Cremel holds indirect interests in Made.com Group Plc as he is a connected person to Partech Partners SAS (as manager of Partech
Growth FPCI). As at 31 December 2021, Partech Growth FPCI held 55,304,527 shares in Made.com Group Plc.
8. George Mculloch holds indirect interests in Made.com Group Plc as he is a connected person to Level Equity Management. As at 31 December
2021, Level Equity Management held 37,051,720 shares in Made.com Group Plc.
9. No deferred shares (DSP awards) were granted under the MIP in 2021.
10. Since 31 December 2021 there have been no changes in the Directors’ interests in shares
Annual Report on Remuneration
continued
125 MADE.COM Group Plc
Annual Report and Accounts 2021
Annual Report on Remuneration
continued
Single Total Figure of Remuneration for Non-Executive Directors (audited)
In this section, we set out the remuneration earned by each of our Non-Executive Directors in the 2021 financial
year for the period they became a Director of Made.com Group Plc to 31 December 2021. These dates are prior
to the IPO date and in accordance with the statutory reporting requirements; however, to aid transparency, we
have also disclosed the payments made to Non-Executive Directors during FY21.
Tot al Fee
£’000
1
Taxable
benefits
£’000
Tot al
remuneration
£’000
1
Susanne Given
2
168 – 168
Ning Li 40 – 40
Bruno Crémel
3
0 – 0
George McCulloch
3
0 – 0
Gwyn Burr 52 – 52
Matthew Price 44 – 44
Full year Single Total Figure (shown to allow for year-on-year comparison in future years)
Fees
£’000
Taxable
benefits
£’000
1
Tot al
remuneration
£’000
1
Susanne Given 211 211
Ning Li 55 55
Bruno Crémel – –
George McCulloch – –
Gwyn Burr 52 52
Matthew Price 44 44
1. Fee amounts are pro-rated from the point the individual became a Director of Made.com Group Plc up to 31 December 2021. For Ning Li this
was 20 April 2021; for Susanne Given, Bruno Crémel, George McCulloch and Gwyn Burr this was 7 May 2021; and Matthew Price, 14 May 2021.
2. As set out in the prospectus, Susanne Given was awarded a one-off fee of £1,000,000 in recognition of the services provided to the Group
prior to the IPO and the significant increase to her workload in preparing for the IPO. This is not part of the post-IPO Remuneration Policy and
reflects a legacy arrangement negotiated pre-IPO. The full net amount of this fee was used to acquire shares.
3. This nil amount reflects that Bruno Crémel and George McCulloch waived their Director fees.
4. Non-Executive Directors are not eligible to receive any variable pay.
5. For annualised fee amounts for Non-Executive Directors please see page 129.
Fairness, diversity and wider workforce considerations
Overview of the Committee’s process
The Committee is committed to ensuring the reward framework is applied appropriately across the organisation
with a particular focus on Executive Directors and the Executive Leadership Team. By maintaining oversight of
employee pay, policies and incentives, the Committee ensures the approach to Executive Director remuneration
is consistent with that applied to all employees. The Committee remains cognisant and informed about wider
workforce pay, policies and incentives.
Reward at MADE
The pay and reward framework should be transparent and fair, for all employees, in a way that is meaningful and
useful. The Committee therefore takes appropriate steps to ensure that consistent principles are applied in
this regard.
126 MADE.COM Group Plc
Annual Report and Accounts 2021
The following summarises the key elements of MADE’s reward framework.
Elements within MADE’s reward framework
Fixed remuneration
Salary
Benefits
Pension
Salaries are reviewed annually
taking into account market
benchmarking, performance,
growth in role and promotion
and affordability.
We are committed to the
principles of the Real Living
Wage, ensuring all employees are
paid at or above this level based
on contractual hours.
Benefits and pensions align with
local markets. From FY22, MADE
pension contributions are 5% of
base salary for all UK employees.
Equity ownership
Made x Everyone
SAYE
SIP
Equity ownership for employees
is a key part of MADE’s culture,
and all employees who were
employed by the Group as at
1 December 2020 were given
the opportunity to participate in
our MADE x Everyone Company
Share Option Plan.
We intend to grant free shares
under the SIP and offer
participation in the Sharesave
during 2022, to further enhance
our offering of equity ownership
to employees.
Performance-based
remuneration
Annual bonus
Long-term incentives
Bonus plans operate across
different populations in the
workforce with payouts linked to
financial and non-financial
objectives.
Participation in PSP awards for
FY21 was wide across the
leadership team and we granted
awards to individuals who can
influence the delivery of
stretching performance targets
linked to our long-term strategy.
Workforce engagement
Employees have not been directly consulted on
Executive Directors’ remuneration; however, we plan to
set up an employee forum with representatives from
diverse roles and regions to enable employees to have
a voice on matters such as wellbeing, diversity, culture,
sustainability, and reward. To ensure two-way
meaningful communication, a Non-Executive Director
will meet with the forum twice a year and insights
outside of these sessions will be fed back to the
Committee, as appropriate, to ensure the wider
workforce views are taken into consideration when
making decisions.
Diversity, equal opportunities and gender pay gap
reporting
MADE is a global, diverse and supportive organisation,
and is committed to creating and maintaining a diverse
and inclusive workplace across all levels of our business
and in each of our locations. We have an established
diversity and inclusion council dedicated to raising
awareness and developing initiatives and commitments
across all areas of our business, including building
MADE’s talent pipeline, educating existing teams and
embedding diversity into MADE’s designer pool.
Gender pay gap reporting helps us to understand the pay
gap between our male and female employees and to
ensure we remain focused on building a balanced
workforce. We recognise that there is still work to be
done to close our mean pay gap in the UK of 22.5%.
While MADE has 57% female representation at
Executive Team Level, our pay gap is influenced by a
higher proportion of men at the senior management level
below, as well as in certain areas of our business such as
Technology which typically attracts a competitive market
rate. We understand that we need to do more to
progress female talent through to leadership roles, and
to attract and retain a balanced workforce overall.
Taking steps to further understand the root causes and
reviewing and developing our action plan will be a key
focus for the coming year.
Annual Report on Remuneration
continued
127 MADE.COM Group Plc
Annual Report and Accounts 2021
Annual Report on Remuneration
continued
Our headline gender pay gap figures as at 5 April 2021
are shown below and our full gender pay gap report can
be viewed on our corporate website.
22.5% 21.6%
Mean pay gap Median pay gap
CEO pay ratio
The table below shows how the former CEO’s single
figure remuneration for FY21 compares to equivalent
single figure remuneration for full-time equivalent UK
employees, ranked at the 25th, 50th and 75th percentile.
Year Methodology
25th
percentile
ratio
50th
percentile
ratio
75th
percentile
ratio
2021 Option A 44:1 32:1 20:1
We have chosen Option A under the Regulations, which
is a statistically robust calculation approach and uses
the total pay and benefits for all UK employees. This is
the same methodology used to calculate the former
CEO’s single figure of remuneration. Total pay and
benefits for employees have been calculated as at
31 December 2021, using full-time equivalent pay data
from April to December, by approximately up-rating
elements of pay proportionately for part-time and/or
part-year employees. When calculating employee
bonus, we have used an estimate to assess the
personal performance element as actuals were not
known at the date of analysis. We have not omitted any
pay elements from the calculation.
Pay data 2021
Base Salary
£000
Total Pay &
Benefits
£000
Former CEO 289 352
75th percentile employee 39 41
50th percentile employee 24 25
25th percentile employee 17 18
The period used to calculate the CEO pay ratio is 20 April to
31 December 2021 which is in line with the single figure table.
Base salaries for employees, including the former CEO,
are determined with reference to a range of factors
including market practice, experience and performance
in role. Due to the nature of his role, the former
CEO’s remuneration package has higher weighting on
performance-related pay (including the annual bonus
and long-term incentives) compared to the majority of
the workforce. This means the pay ratios are likely to
fluctuate depending on the outcomes of incentive
plans in each year. For these reasons, the Committee
considers that the median CEO pay ratio is representative
of the UK employee base and consistent with the
Group’s reward policies.
We believe the median pay ratio this year is consistent
with pay, reward and progression policies for UK
employees as it reflects the consistent approach to pay
along with MADE’s policy to pay for performance.
Change in the Directors’ remuneration compared with
employees
Given the change to the remuneration framework on
Admission, the Committee does not believe that a
year-on-year comparison would be meaningful. As such,
no comparison with prior year data has been provided
this year, but the Committee intends to provide such
comparisons in future years.
Relative importance of spend on pay
The table below shows the expenditure of the
Company on all employee remuneration and
distributions to shareholders. Given the date of the IPO
was 21 June 2021, a prior year comparison is not
provided. Full disclosure of year-on-year change will be
provided in subsequent remuneration reports.
Relative importance of the spend on pay
2021
£m
All employee remuneration 30.3
Dividends
1
–
1. No dividends or share buybacks were paid to shareholders during
the year.
2. No other significant distributions were made in the year.
Dilution
Awards made under the MIP, which incorporates the
DSP, PSP and IPO awards, as well as awards which are
intended to be made under Sharesave and SIP awards
will be satisfied through the funding of an Employee
Benefit Trust (administered by an external trustee)
which will be established in 2022. The Group monitors
the levels of share grants and the impact of these on
the ongoing requirement of shares. In accordance with
guidelines set out by the Investment Association (‘IA’)
the Group’s share plans are subject to dilution limits set
by the IA in respect of all of the share plans (10% in any
rolling 10-year period) and discretionary share plans (5%
in any rolling 10-year period).
128 MADE.COM Group Plc
Annual Report and Accounts 2021
Statement of Implementation of the Remuneration Policy for FY22
Remuneration Element Implementation for FY22
Base salary Standard salary increases for the Executive Directors will be in line with the
general workforce increase of 2.5%. The CFO’s FY22 salary is £333,125, effective
1 January 2022. Details around the FY22 salary for the newly appointed CEO,
Nicola Thompson can be found in an announcement on the Company’s
website and will also be fully disclosed in next year’s Remuneration Report.
These arrangements will be in line with our proposed Remuneration Policy, which
will be subject to shareholder approval at the 2022 AGM.
Pension
1
We have aligned workforce pension levels in the UK and from FY22 the rate is 5%
of base salary. This is the rate that also applies to incumbent and future
Executive Directors who are based in the UK.
Benefits
1
We will provide market standard benefits to our Executive Directors.
Annual bonus Maximum opportunity will be 150% of salary with deferral where payout is greater
than 100% of salary.
The performance conditions for the FY22 annual bonus will be: Gross sales
growth (50%); Adjusted EBITDA (25%); Free cash flow (15%); and Environmental
(10%). Targets are considered commercially sensitive, and will be disclosed in full
retrospectively in next year’s Report.
PSP Award Maximum opportunity will be 200% of salary. As set out in the Chair’s letter on
page 118, the Committee has decided that an average share price from the date of
the IPO up to the date of grant of the FY22 PSP awards will be applied for the
purposes of determining the number of nil-cost options that will be granted.
By using an average share price, this will mitigate the impact of windfall gains.
The Committee will also review the the value of PSP awards at vesting to ensure
it is fully reflective of the performance delivered and there are are no unjustified
windfall gains. Details of the average share price used will be set out in the RNS
announcement issued once the PSP awards are granted.
The performance measures which applied to the FY21 grant will also apply to the
FY22 grant as these remain aligned with our long-term business plan and strategy.
Further details for the PSP to be awarded in FY22 are shown in the table on the
following page.
Shareholding Requirement 350% of salary for Executive Directors to be built up over five years.
Post-cessation, Executive Directors will be expected to retain the lower of the
shares held at cessation of employment and shares to the value of 350% of
salary for a period of two years.
NED Fees per annum Chair fee: £300,000
Non-Executive Director base fee: £60,000
Additional Senior Independent Director fee: £10,000
Additional Committee chair fee: £10,000
1 The former CEO, Philippe Chainieux, is a French national and in 2021 he relocated to France to be with his family. His place of work during FY22
remained our UK Head Office and all relocation and travel expenses associated with his relocation and travel between France and the UK were
met by Philippe. There are certain pension and benefits we are required to provide under French law.
Annual Report on Remuneration
continued
129 MADE.COM Group Plc
Annual Report and Accounts 2021
Annual Report on Remuneration
continued
FY22 PSP Award: Performance targets
Measure Weighting Threshold Maximum
Gross Sales
Growth
25% 25% CGAR 32% CGAR
Relative TSR 25% Median percentile Upper quartile percentile
EPS 25% 8.1p 9.9p
ESG
1
25% 80% responsibly sourced,
fully traceable timber
80% Recycled or organic cotton
80% Recycled or other
sustainably sourced polyester
100% recycled or recyclable materials
80% sustainably sourced materials
100% responsibly sourced,
fully traceable timber
100% Recycled or organic cotton
100% Recycled or other
sustainably sourced polyester
100% recycled or recyclable materials
100% sustainably sourced materials
1 The maximum ESG targets are aligned to the 2025 enviornmental strategy targets.
External appointments for Executive Directors
Executive Directors are permitted to hold external
directorships subject to the prior approval of the Board
and are permitted to retain any fees paid. Philippe
Chainieux holds the positions of Non-Executive Director
of Fédération du E-commerce et de la Vente a Distance
(FEVAD) and Director of Groupe La Centrale. Adrian
Evans does not hold any external directorships.
Payments to past Directors (audited)
There were no payments to past Directors in FY21.
Payments for loss of office (audited)
There were no payments for loss of office made in FY21.
Performance graph against the FTSE 250
The following graph shows the value at 31 December
2021 of a hypothetical £100 invested in MADE on
21 June 2021 (date of IPO) compared with the value of
£100 invested in the FTSE Small Cap of which MADE is
a constituent and is the most appropriate benchmark
for the purposes of the graph. An additional line to
illustrate the Company’s performance against the
FTSE250 is also included as our long-term incentive
plan performance is tracked against this index.
Total Shareholder Return since 21 June 2021
21/06/20210
20
40
60
80
100
120
140
MADE FTSE 250
21/07/2021 21/08/2021 21/09/2021 21/10/2021 21/11/2021 21/12/2021
FTSE Small Cap
130 MADE.COM Group Plc
Annual Report and Accounts 2021
Chief Executive Officer’s historical remuneration
The former CEO’s single total figure of remuneration in
2021 is shown below (as set out in the single figure
table on page 122). Given the date of the IPO was
21 June 2021 a year-on-year comparison of CEO
remuneration is not provided. Year-on-year comparisons
will be provided in future Annual Reports in line with
guidelines, building up each year to 10 years.
Year ended 31
December
Single total
figure (£000s)
Annual bonus
(% max)
1
LTIP vesting
(% max)
2021 815 62 N/a
1 The % of maximum shown represents the formulaic performance
outcome. As at the date of writing, no determination has been made
in respect of the former CEO’s termination arrangements (including
in relation to payment of bonus)
Committee support during the year
During FY21, PwC advised the Committee on all
aspects of the remuneration policy for the Directors
and members of the Executive Leadership Team,
including the development of the policy prior to the
IPO. PwC was formally appointed by the Committee
following a selection process post-IPO. PwC is a
member of the Remuneration Consultants Group and
the voluntary code of conduct of that body is designed
to ensure objective and independent advice is given to
remuneration committees. Fees of £22,500 were paid
to PwC during the year in respect of remuneration
advice received, accrued on a time and expenses basis.
PwC provides other services to the Company, in
relation to accounting, tax advice, reporting, internal
audit and risk management. The Committee is satisfied
that no conflicts of interest in regard to advice provided
to the Committee exist. It is also satisfied that the
members of PwC’s team do not have connections with
the Company or any individual Director which might
impair their independence.
Internal support may be provided by the Executive
Directors, Group Company Secretary and Group HR
Director, whose attendance at Committee meetings is
by invitation from the Chair. No Director is present for
any discussions that relate directly to their own
remuneration.
Statement of shareholding voting
Our first AGM as a publicly listed company will be held
on 5 May 2022. Disclosure of the voting results at the
forthcoming AGM will be disclosed on our website and
also presented in the Annual Report on Remuneration
for FY22.
Annual Report on Remuneration
continued
131 MADE.COM Group Plc
Annual Report and Accounts 2021
MADE Directors’ Remuneration Policy
This section contains Made.com Group Plc’s proposed
Directors’ Remuneration Policy (‘Policy’) that will govern
and guide the Group’s future remuneration payments.
The Policy described in this section is intended to
apply for three years and if approved will take effect
following the Company’s 2022 Annual General Meeting
on 5 May 2022.
In anticipation of the IPO, the Company undertook
a review of the Group’s remuneration policy for the
Directors, to ensure that it is appropriate as a listed
company. In the IPO prospectus, the Company set out
a summary of the key features of MADE’s executive
remuneration framework and a summary of the Group
employee share plans.
In advance of the 2022 AGM, the Remuneration
Committee of the Board (the ‘Committee’) has
reviewed this Policy to ensure it continues to align
with the Group’s strategy and remuneration philosophy.
The Committee oversees the implementation of the
Policy and seeks to ensure that the Executive Directors
are fairly rewarded for the Group’s performance over the
short and long-term.
Development of the Policy
MADE’s approach to remuneration is based on a
philosophy that remuneration should support the
delivery of the business strategy and outcomes be
linked to the generation of sustained long-term value
for shareholders, customers and wider stakeholders.
The Committee has, therefore, developed an approach
to remuneration which it believes is competitive
to retain and attract diverse talent, rewards the
achievement of challenging short and long-term
strategic objectives and aligns Executive Directors’
interests with those of stakeholders without creating
incentives that will encourage excessive risk taking or
unsustainable Company performance.
The Company’s remuneration framework is underpinned
by a core set of principles which are cascaded
throughout the business. These principles are set
out below:
Remuneration principle Description
Reward outcomes should
be fair, based on the
delivery of results
Both fixed and variable elements of pay should be fair and linked to appropriate
market comparators with the possibility of earning competitive levels of reward
for the achievement of stretching performance targets.
Reward should be aligned
with the Group’s strategy
There should be provision of a clear link between reward, driving performance and
the creation of value for shareholders. Performance metrics should support the
business strategy over the short and long-term.
Competitive to recruit new
talent
The reward framework must be able to attract talent by ensuring that the
remuneration approach for new hires is sufficiently competitive relative to the
Company’s competitors for talent (some of whom are global) but at the same
time the Company must not pay more than necessary to secure a preferred
candidate.
Reward framework needs
to be acceptable in
the UK listed company
environment and to wider
stakeholders
Remuneration must be palatable to shareholders in a UK listed environment and
be clear and explainable to all stakeholders.
Reward framework should
be simple, flexible and
consistent
The reward structure should be clear, transparent and well understood by all
stakeholders to help retain, motivate and recruit talent. There should be
sufficient flexibility built within the policy to take into account the Group’s
changing priorities over time. Where appropriate, the reward philosophy should
provide alignment between executives and all employees.
Reward should recognise
the Group focus on high
levels of employee equity
ownership
The reward structure for the Executive Directors and the Executive Leadership
Team should reflect the Company’s strong equity ownership culture, support
common behaviours and provide ‘skin in the game’.
132 MADE.COM Group Plc
Annual Report and Accounts 2021
Alignment with Provision 40 of the UK Corporate Governance Code
As part of its review of the Policy, the Committee has considered the factors set out in provision 40 of the UK
Corporate Governance Code (the ‘Code’). In the Committee’s view, the Policy addresses those factors as set out
below:
Provision 40 How the Policy aligns
Clarity
Remuneration
arrangements should be
transparent and promote
effective engagement with
shareholders and the
workforce and link to
strategy
The Policy is designed to support long-term, sustainable performance. The
Committee has clearly outlined the performance conditions or the annual bonus
and long-term incentive plans, the maximum potential value of the elements of
executive remuneration, and the areas in which discretion can be applied
throughout the Policy.
The Policy takes into account of the UK corporate governance best practice, and
so aims to be well understood by participants, shareholders and the wider
workforce.
The Committee proactively seeks engagement with shareholders on
remuneration matters, will be implementing processes and mechanisms to allow
employees to share views on remuneration and receives regular updates on
workforce pay and benefits across the Group.
Simplicity
Remuneration structures
should avoid complexity
and their rationale and
operation should be easy
to understand
The Policy is designed to be simple and support long-term, sustainable
performance. The Company’s remuneration structure comprises both fixed and
variable remuneration through the use of market standard annual bonus and
long-term incentive structures. The performance conditions for variable
elements are clearly communicated to, and understood by, participants as well
as being aligned with the Group’s strategy.
Risk
Remuneration
arrangements should
ensure reputational and
other risks from excessive
rewards, and behavioural
risks that can arise from
target-based incentive
plans, are identified and
mitigated
The majority of the Executive Directors’ total remuneration opportunity is
weighted to the longer term and delivered in shares. Any bonus amount earned
over 100% of salary is deferred into shares for three years to ensure continued
alignment with share price performance. Furthermore, a shareholding requirement
is in place (both in employment and post-cessation). These features ensure robust
shareholder alignment and discourage unnecessary risk taking.
The Committee retains discretion to override formulaic outcomes for incentive
plans. Malus and clawback provisions are in place, which mitigate behavioural risks
by enabling payments to be reduced or reclaimed in specific circumstances. No
Executive Director is present when their own remuneration is under discussion.
Predictability
The range of possible
values of rewards to
individual directors and
any other limits or
discretions should be
identified and explained
at the time of approving
the Policy
The Policy sets out the maximum potential value for each element of executive
remuneration. Potential outcomes are easily quantifiable and are set out in the
scenario charts on page 139.
MADE Directors’ Remuneration Policy
continued
133 MADE.COM Group Plc
Annual Report and Accounts 2021
Provision 40 How the Policy aligns
Proportionality
The link between
individual awards, the
delivery of strategy
and the long-term
performance of the
company should be clear.
Outcomes should not
reward poor performance
The Committee has set out to balance remuneration appropriately between fixed
and variable pay. The annual bonus and long-term incentives are designed to reward
the successful implementation of the Company’s strategy and are aligned with
long-term value creation for shareholders via stretching targets linked to strong
corporate performance. The Committee will have discretion to override formulaic
outcomes to ensure that remuneration appropriately reflects overall performance.
The scenario charts on page 139 set out the split of variable/fixed pay.
Alignment to culture
Incentive schemes should
drive behaviours
consistent with the
company’s purpose, values
and strategy
The annual bonus and long-term incentives are measured against the key
performance measures which underpin the Company’s culture and strategy.
The emphasis on long-term shareholding is a core part of MADE’s culture
throughout the Group. The Committee will take into account fairness and the
wider workforce when determining Executive Director remuneration outcomes.
Remuneration Policy table for Executive Directors
The following table describes each element of the Policy for the Executive Directors, explaining how each
element operates.
Base salary
Purpose Base salary helps to attract, motivate and retain high-calibre Executive Directors
to deliver the leadership and management needed to execute the Group’s strategy
and business plan. To reflect experience, skills and knowledge of Directors.
Operation Base salaries will be reviewed annually and take into account several factors
including:
+ remuneration practices for the wider workforce
+ change in scope, role and responsibilities
+ the performance of the Group
+ the experience of the Director
+ the economic environment; and
+ when the Committee determines a benchmarking exercise is appropriate,
salaries within the ranges paid by the companies who the Committee believe
are appropriate comparators for the Group in the peer groups are used for
remuneration benchmarking
Any changes are normally effective from January. Where there is a change in
position or responsibility or if the Committee deems it appropriate, an out-of-
cycle review may be undertaken.
Where an Executive Director is based outside the UK, their salary would normally be
paid in local currency. Where this is not the case the amount paid to the Executive
Director will normally be converted using an average foreign exchange rate relevant to
the country in which they are based, as determined by the Committee.
Maximum potential value There is no maximum limit. Ordinarily, any increase to Executive Directors’ base
salaries will generally be no higher than the average increase for the UK workforce.
However, a higher increase may be proposed in the event of a role change or
promotion, or in other exceptional circumstances.
Individuals who are recruited or promoted to the Board may, on occasion, have
their salaries set below the targeted policy level until they become established in
their role. In such cases, subsequent increases may be higher than the general
rises for employees until the target salary positioning is achieved. An explanation
will be provided in the Directors’ Remuneration Report should higher increases be
approved in exceptional cases.
Performance metrics N/A
MADE Directors’ Remuneration Policy
continued
134 MADE.COM Group Plc
Annual Report and Accounts 2021
Pensions
Purpose To provide market competitive retirement benefits and enable the Executive
Director to build retirement benefits.
Operation Pension arrangements are structured in accordance with the plans operated in
the location in which the Executive Director is based and will be in line with
local legal obligations.
Executive Directors in the UK can participate in a defined contribution pension
plan or receive a cash payment in lieu of a pension contribution. For Executive
Directors based outside of the UK, local retirement arrangements will apply.
Maximum potential value The maximum employer contribution to a pension plan and/or cash payment in
lieu of pension contribution for UK-based Executive Directors is 5% of salary in
line with the wider UK workforce.
Where an Executive Director is based outside the UK, their maximum pension
contributions will be aligned with the arrangements available for the wider
workforce in the relevant location.
Performance metrics N/A
Benefits
Purpose To provide market competitive benefits which helps to recruit and retain
Executive Directors.
Operation The Company’s approach is to ensure that benefits are tailored to reflect market
practice in the location in which the Executive Director is based and different
benefits may apply in the context of the Executive Director’s location.
Typical benefits for Executive Directors based in the UK include but are not
limited to, private medical cover, life assurance, holiday and sick pay, and MADE
discount in line with all employees.
For Executive Directors based outside of the UK, additional standard local
market benefits may apply, and will be in line with the wider workforce in the
relevant location.
Other market standard benefits, including (but not limited to) relocation
allowances or expatriate benefits, including personal tax advice and filing services,
may be provided, as appropriate. Different benefits may apply in the context of
the Executive Director’s location.
The Company provides Directors’ and Officers’ Liability Insurance and may
provide indemnities to the fullest extent permitted by the Act.
Maximum potential value Benefits are set at a level appropriate to the individual’s role, location and
circumstances. The maximum opportunity will depend on the type of benefit and
cost of its provision, which will vary according to the market and individual
circumstances.
Performance metrics N/A
MADE Directors’ Remuneration Policy
continued
135 MADE.COM Group Plc
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MADE Directors’ Remuneration Policy
continued
Annual bonus
Purpose To reward and incentivise the delivery of pre-defined annual financial and
operational targets linked to the business plan and the deferred portion of the
bonus will align with shareholders’ interests.
Operation The annual bonus is subject to challenging performance measures set by the
Committee for the financial year. The Committee will determine any bonus
payment at the end of the performance period.
For threshold performance, 25% of the maximum opportunity will normally pay
out. For on-target performance, 50% of the maximum opportunity will be paid.
Straight-line vesting will apply between these points. There will be no pay out if
threshold performance is not achieved.
The bonus earned up to 100% of base salary is normally paid in cash. Amounts in
excess of 100% are deferred into shares which vest after three years subject to
continued service. No further performance conditions will apply to the deferred
element of the bonus.
Participants may be entitled to dividends or dividend equivalents (where
applicable) on the deferred shares representing the dividends paid during the
vesting period (which may assume reinvestment into an additional number of
deferred shares).
Malus and clawback provisions apply as set out on page 140.
The Committee will have the discretion to adjust bonus outcomes if it believes
the outcome is not a fair and accurate reflection of the business’ performance,
the individual’s personal performance and such other factors as the Committee
may consider appropriate, including but not limited to share price performance.
The exercise of this discretion may result in a downward or upward movement in
the amount of bonus earned resulting from the application of the performance
measures but will not exceed maximum opportunity.
Any adjustments or discretion applied by the Committee will be fully disclosed in
the following year’s Directors’ Remuneration Report.
Maximum potential value 150% of base salary
Performance metrics The annual bonus will be based on stretching financial, strategic and operational
targets which are linked to Company strategy.
The majority of the bonus (at least 50%) will be linked to financial measures.
The Committee may amend the measures used each year in line with business
strategy as well as vary weightings from year to year.
In exceptional circumstances where the Committee believes the original
measures and/or targets are no longer appropriate, the Committee has discretion
to amend performance measures and targets during the year.
136 MADE.COM Group Plc
Annual Report and Accounts 2021
Long-term incentive plan
Purpose To reward and incentivise the delivery of long-term performance and shareholder
value creation.
Operation Long-term incentive awards are made under the Made.com Incentive Plan (‘MIP’).
The Committee may award Executive Directors annual grants of shares which are
subject to performance conditions (‘PSP awards’) and will be in the form of
conditional shares or nil cost options.
PSP awards will normally vest three years from the date of grant and vesting will
be subject to continued service and the achievement of stretching performance
measures.
Up to 25% of the award may vest at threshold performance and awards are
capped at maximum. There is straight-line vesting between threshold and
maximum and if the threshold level is not achieved, no payment will arise.
A two-year holding period will apply following the three-year vesting period, during
which the Executive Directors may not normally dispose of their vested shares
except such number as is necessary to pay tax and social security contributions
arising in respect of the vesting of their awards.
Participants may be entitled to dividends or dividend equivalents (where
applicable) on the shares representing the dividends paid during the vesting and
holding period (which may assume reinvestment into an additional number of
deferred shares).
Malus and clawback provisions apply as set out on page 140.
Maximum potential value 200% of base salary.
In exceptional circumstances (such as recruitment) up to 400% of base salary
may be awarded.
Performance metrics Vesting of awards will be based on stretching performance targets which will
relate to shareholder returns and financial, strategic and/or operational measures
linked to the Group’s business plan.
The Committee will review and set measures, weightings and targets before each
grant to ensure they remain appropriate and may change the balance of the
measures, or use different measures for subsequent awards, as appropriate.
In exceptional circumstances where the Committee believes the original
measures, targets and/or weightings are no longer appropriate, the Committee
retains discretion to amend performance measures, targets and/or the
weightings attached to performance measures part-way through a performance
period.
The Committee will have the discretion to adjust award outcomes if it believes
the outcome is not a fair and accurate reflection of the business’ performance,
the individual’s personal performance and such other factors as the Committee
may consider appropriate, including but not limited to share price performance.
The exercise of this discretion may result in a downward or upward movement in
the amount of award earned resulting from the application of the performance
measures.
Any adjustments or discretion applied by the Committee will be fully disclosed in
the following year’s Directors’ Remuneration Report.
MADE Directors’ Remuneration Policy
continued
137 MADE.COM Group Plc
Annual Report and Accounts 2021
MADE Directors’ Remuneration Policy
continued
All-employee share plans
Purpose To encourage wider share ownership among employees (subject to local regulatory
requirements), including the Executive Directors, in addition to aligning with
shareholders’ interests.
Operation Executive Directors may participate in all-employee plans operated by the Group
on the same basis as other eligible employees.
Currently, the all-employee plans which have been established are the Made.com
Group Plc Share Incentive Plan (‘SIP’) and the Made.com Group Plc Sharesave
Plan (‘Sharesave’).
Both plans are designed to meet the requirements of tax advantaged UK all-
employee plans and allow participants to acquire shares in a tax-efficient manner.
The Group may also operate other international all-employee share plans for
employees outside the UK.
Maximum potential value Limits are in line with the relevant local legislation. The Committee may
determine that different limits shall apply in the future should the relevant
legislation change and may determine that different limits apply for international
all-employee share plans.
Performance metrics N/A
Shareholding requirements
Purpose To align the interests of Executive Directors with shareholders over a long-term
period including after departure from the Group.
Operation In-employment requirement
During employment, Executive Directors are required to build and maintain a
minimum shareholding of 350% of base salary, within five years of appointment.
Executive Directors are required to retain all of the net of tax number of shares
they receive through the PSP awards and vested DSP awards until the
shareholding requirement has been met. Progress towards the requirement will
be reviewed by the Committee on an annual basis.
Post-employment requirement
Executive Directors are required to hold shares after cessation of employment to
the full value of the shareholding requirement (or the existing shareholding if lower
at the time) for a period of two years. The post-employment shareholding
requirement will apply to all awards made after the approval of the Policy by the
Company’s shareholders. Shares purchased by Executive Directors using their own
funds will not be included in the post-employment shareholding requirement.
Maximum potential value 350% of base salary.
In-employment requirement
The shareholding requirement for Executive Directors is 350% of base salary to
be built up within five years of appointment. The Committee may impose a lower
shareholding requirement for new Executive Directors.
Post-employment requirement
Executive Directors will be expected to retain the lower of the shares held at
cessation of employment and the in-employment shareholding requirement for
a period of two years. In the case of newly appointed Executive Directors, the
Committee may impose a lower shareholding requirement.
Performance metrics N/A
138 MADE.COM Group Plc
Annual Report and Accounts 2021
Illustrations of the application of the Remuneration Policy
The composition and value of the Executive Directors’ remuneration packages at below threshold (minimum),
target and maximum performance scenarios are set out in the charts below.
Executive Directors’ remuneration packages
Minimum
100% 38%
27%
36%
23%
33%
19%
27%
44%
36%
100% 38%
27%
36%
23% 19%
33% 27%
44%
36%
18%
£0.5m
£1.3m
£2.1m
£2.6m
£0.4m
£0.9m
£1.6m
£1.9m
0
£0.5m
£1.0m
£1.5m
£2.0m
£2.5m
£3.0m
Target
CEO CFO
Maximum Minimum Target MaximumMaximum
(with 50%
share price
appreciation)
Maximum
(with 50%
share price
appreciation)
Fixed remuneration Annual bonus PSP award Share price growth
18%
1. Minimum performance is equivalent to fixed remuneration which consists of base salary (as at 1 January 2022) + pension (5% of salary) +
benefits (as per the annualised single figure table). The base salary for the CEO for illustrative purposes is the former CEO’s salary with a 2.5%
increase applied reflecting the wider workforce increase in FY21.
2. Target performance consists of fixed remuneration + target annual bonus (50% of maximum opportunity) + target PSP opportunity (50% of
maximum opportunity with no share price appreciation).
3. Maximum performance consists of fixed remuneration + maximum annual bonus (100% of maximum opportunity) + maximum PSP (100% of
maximum opportunity with no share price appreciation).
4 Maximum performance (with share price appreciation) consists of fixed remuneration + maximum annual bonus (100% of maximum opportunity)
+ maximum PSP (100% of maximum opportunity with an assumed 50% share price appreciation ignoring any dividend equivalents).
MADE Directors’ Remuneration Policy
continued
139 MADE.COM Group Plc
Annual Report and Accounts 2021
MADE Directors’ Remuneration Policy
continued
Choice of performance measures and targets for the
annual bonus and PSP awards
Each year the Committee will select the most
appropriate performance measures and the
respective targets for the annual bonus and PSP
awards. The measures selected will be aligned with
the Group’s strategy and key performance indicators.
Measures will be financial, strategic and/or operational
with respective targets for each measure set by the
Committee each year in conjunction with the Board
which will be aligned with key business goals
determined at the start of each year. The Committee
sets targets for the performance measures each year,
taking into account market conditions, the business
plan and other circumstances as appropriate.
Discretions retained by the Committee in operating the
incentive plans
The Committee operates the Group’s incentive plans
according to their respective rules and in accordance
with applicable legislation and regulatory requirements.
To ensure that pay outcomes appropriately reflect
individual and Group performance, the Committee may
apply certain operational discretions, within the limits
of the Policy and relevant plan rules. The Committee
has overriding discretion on Directors’ pay in addition
to the ability to apply malus, clawback and responsible
application of discretion to override formulaic outcomes
of the incentive schemes. The Committee may apply
certain discretions set out below and include but not
limited to:
+ determining the participants in the plans
+ determining the timing of grants and/or payments
+ determining the size of grants and/or payments
(within the limits set out in the Policy table)
+ determining the appropriate choice of measures,
weightings and targets for the incentive plans from
year to year including any use of discretion to reduce
the outcome, as appropriate
+ determining ‘good leaver’ status and the extent of
vesting and or payment under the incentive plans
+ determining the extent of vesting of awards under
share-based plans in the event of a change of
control; and
+ taking any appropriate adjustments required in
certain circumstances (e.g. rights issues, corporate
restructuring events, variation of capital and special
dividends)
The Committee may also amend the Group’s incentive
plans in accordance with the rules of those plans and
establish plans for overseas employees based on
those plans.
The Committee retains discretion to vary, substitute
or waive the performance conditions applying to
outstanding awards in exceptional circumstances if an
event occurs which causes the Committee to consider
that the original condition would no longer operate as
intended. Any amendment to the performance
conditions can be made, provided the Committee
considers the amendment is reasonable and, except
in the case of waiver, produces a fairer measure of
performance and is not materially less difficult to satisfy
than the original conditions would have been but for
the event in question.
Malus and clawback
In line with UK corporate governance best practice,
clawback (repayment) and malus (forfeiture) provisions
will apply to the annual bonus plan, DSP awards
under the MIP, and the PSP awards under the MIP.
The following provisions apply:
1. Annual bonus – cash awards: malus will apply up to
the bonus payment and clawback will apply for a
period of two years after the bonus payment.
2. Annual bonus – DSP awards: malus will apply during
the period of three years following the payment of
the cash bonus to which the deferred share award
relates.
3. PSP awards: malus will apply during the vesting period
and clawback will apply for a period of two years
post-vesting.
Malus and clawback provisions may be applied in the
following circumstances:
+ material financial misstatement resulting in an
adjustment to the audited accounts
+ where an annual bonus or PSP award under the MIP
was granted, or performance was assessed, based on
an error or inaccurate or misleading information
+ action or conduct of a participant which amounts to
fraud or gross misconduct
+ events or the behaviour of a participant have led to
censure of the Company or Group by a regulatory
authority or cause significant detrimental reputational
damage; and
+ material failure of risk management or corporate
failure
140 MADE.COM Group Plc
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Legacy incentives
The Policy gives authority to the Committee to honour any commitments entered into with current Executive
Directors prior to the IPO or to internally promoted future Directors prior to their appointment or prior to
shareholder approval of the Policy.
All equity awards which were granted pre-IPO are fully vested and details of the former CEO’s and CFO’s share
interests are set out in the Annual Report on Remuneration on page 125. These legacy equity awards do not form
part of the Group’s ongoing remuneration framework.
On IPO, a one-off award was granted to the former CEO and CFO (‘IPO Awards’) and other selected members of
the Executive Leadership Team. The IPO Award is a legacy incentive; granted on IPO, and it was agreed whilst the
Company was private and therefore is not part of the Group’s ongoing remuneration framework. However, as
awards will vest during the Policy period, details of the award is set out in the table below.
One-off IPO Award
Purpose To encourage ongoing retention and incentivisation, and to focus the Executive
Leadership Team on maximising shareholder value in the period following IPO.
Operation Subject to the achievement of performance conditions and the individual’s
continued employment over the vesting period.
50% of the IPO Award will normally vest two years from the date of grant and
the remaining 50% will normally vest three years from the date of grant.
Malus and clawback provisions apply.
Maximum potential value The maximum opportunity of the IPO Award for Executive Directors and
other members of the Executive Leadership Team was 300% of salary at grant.
No more than 25% of the IPO Award will vest for threshold performance.
There is straight-line vesting between threshold and maximum and if the
threshold level is not achieved, no payment will arise.
Performance metrics Based on stretching financial targets as set out in the RNS announcement
published on 21 June 2021 and also set out in this Directors’ Remuneration
Report on page 124 The following three measures are used, equally weighted:
Absolute Total Shareholder Return; Gross Sales Growth; and individual continued
employment.
The Committee will have the discretion to adjust IPO Award outcomes if it
believes the outcome is not a fair and accurate reflection of the business’
performance, the individual’s personal performance and such other factors as
the Committee may consider appropriate, including but not limited to share price
performance. The exercise of this discretion may result in a downward or upward
movement in the amount of IPO Award earned resulting from the application of
the performance measures.
In exceptional circumstances where the Committee believes the original measures,
targets and/or weightings to no longer be appropriate, the Committee retains
discretion to amend performance measures, targets and/or the weightings
attached to performance measures part-way through a performance period.
Any adjustments or discretion applied by the Committee will be fully disclosed in
the following year’s Directors’ Remuneration Report.
MADE Directors’ Remuneration Policy
continued
141 MADE.COM Group Plc
Annual Report and Accounts 2021
MADE Directors’ Remuneration Policy
continued
Statement of consideration of shareholder views
The Committee values the views of shareholders and
guidance from the main shareholder representative
bodies. The Committee engaged with major
shareholders as well as the main shareholder
representatives as part of the Policy development
process and welcomes continued dialogue with its
shareholders. The proposed Policy reflects guidance
from shareholders and representative bodies received
during the engagement process. If the Committee were
to consider changes to the Policy, it would be subject
to prior consultation with major shareholders, as
appropriate.
Consideration of employment conditions elsewhere in
the Company
In setting the remuneration for Executive Directors
the Committee considers the overall approach to
remuneration for the Group. All employees including
Executive Directors are paid taking into account a
number of factors including the market median (where
appropriate) and base salaries are reviewed annually.
The Group operates whereby there are several diverse
roles and therefore, where appropriate, additional
reward through incentive payments linked to the
achievement of stretching performance targets will
apply. This remuneration philosophy applies to all levels
of the business.
Equity is an important part of our pay philosophy.
The PSP awards are cascaded appropriately across
the management team with size of grants increasing
depending on seniority. In view of the greater potential
remuneration, the Executive Directors have a greater
proportion of their pay at ‘risk’ and are subject to
deferral and holding periods. The Group also has
established the all-employee Sharesave and SIP in
which UK employees are eligible to participate where
those plans are operated.
The Committee pays close attention to the general
workforce remuneration and related policies, and the
alignment of incentives and rewards with culture when
setting and operating the Policy for Executive Directors’
remuneration; Before the end of FY21 the Board, and
the Remuneration Committee, considered that there
was no appropriate forum in existence at MADE to
effectively engage with a cross-section of MADE’s
people to facilitate a productive and constructive
engagement on the Policy. As such, no direct
engagement took place. An employee forum will be
established with representatives from diverse roles and
regions during FY22, which will provide an appropriate
forum to discuss matters, including remuneration,
directly with a Non-Executive Director going forward.
The Group’s HR Director regularly updates the
Committee on any changes to the wider Group’s
remuneration policy.
Appointment of new Executive Directors
The Committee’s principle is that the remuneration of
any new recruit will be assessed in line with the same
principles as for the current Executive Directors. The
Committee is mindful that it wishes to avoid paying
more than it considers necessary to secure a preferred
candidate of the appropriate calibre and with the
experience needed for the role.
For external appointments, it is recognised that the
Group may need to provide compensation for forfeited
awards from the individual’s previous employer (‘buy-
out awards’). To the extent possible, the design of
buy-out awards will be made on a broadly like-for-like
basis taking into account the value of any incentives
that will be forfeited on cessation of an Executive
Director’s previous employment, the performance
conditions attached to the vesting of the forfeited
incentives, the timing of vesting and the likelihood
of vesting.
The Committee believes that it is important to
recognise the diverse global environment in which the
Group is competing for talent. To recognise the Group’s
competitors for talent, the maximum level of variable
remuneration that may be offered to an Executive
Director is 550% of base salary (excluding buyout
awards), i.e. annual bonus of 150% of salary and a PSP
award of 400% of salary in exceptional circumstances,
for the year of recruitment, and 350% of base salary in
a normal year.
142 MADE.COM Group Plc
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The recruitment policy is summarised below:
Remuneration element Policy
Base salary The reward framework must be able to attract talent by ensuring that the
remuneration approach for new hires is sufficiently competitive relative to the
Company’s competitors for talent (some of whom are global) but at the same
time the Company must not pay more than necessary to secure a preferred
candidate.
Pension and benefits Benefits and pension will be set in line with the Policy.
Annual bonus Joiners may receive a pro-rated annual bonus award based on their employment
for the proportion of the financial year and targets may be different to those set
for other Executives.
Long-term incentive plan In exceptional circumstances, in the year of recruitment, the Committee may
grant a PSP award under the MIP of up to 400% of salary. Any award in the year
of recruitment may be granted such that the performance conditions and
vesting terms are aligned with grants previously made to other employees in that
year.
Relocation If an Executive Director needs to relocate in order to take up the role, the Group
may cover the costs of relocation including (but not limited to) actual relocation
costs, temporary accommodation and travel expenses.
Buy-out awards The Group recognises that it may need to provide compensation for forfeited
awards from the individual’s previous employer (‘buy-out awards’). To the extent
possible, the design of buy-out awards will be made on a broadly like-for-like basis
taking into account the value of any incentives that will be forfeited on cessation
of an Executive Director’s previous employment, the performance conditions
attached to the vesting of the forfeited incentives, the timing of vesting and the
likelihood of vesting. For avoidance of doubt, any buy-out awards are not subject
to a formal maximum.
Internal appointment to
the Board
When existing employees are promoted to the Board, the Policy will apply from
the point of appointment to the Board and not retrospectively. In addition, any
existing remuneration and awards will continue to be honoured.
Policy on payment for departure from office
When determining any loss of office payment for a
departing Executive Director, the Committee will
always seek to minimise the cost to the Group while
complying with contractual terms and seeking to reflect
the circumstances in place at the time. The Committee
reserves the right to make additional payments where
such payments are made in good faith in discharge of
an existing legal obligation (or by way of damages for
breach of such an obligation) or by way of settlement
or compromise of any claim arising in connection with
the termination of an Executive Director’s office or
employment. Consistent with market practice, the
Company may pay reasonable legal fees on behalf of
the Executive Director for entering into a settlement
agreement and in addition may pay a contribution
towards outplacement services as part of a negotiated
agreement.
Executive Directors have a service contract requiring
12 months’ notice of termination from either party and
includes the ability for the Group to make a payment in
lieu of notice. On termination of an Executive Director’s
service contract, the Committee will take into account
the departing Director’s duty to mitigate their loss
when determining the amount of compensation.
An Executive Director’s contract may be terminated
without notice and without further compensation
(except for sum earned up to the date of termination)
for certain events such as gross misconduct.
MADE Directors’ Remuneration Policy
continued
143 MADE.COM Group Plc
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MADE Directors’ Remuneration Policy
continued
The Committee’s normal Policy is described below and will be implemented taking into account the contractual
entitlements, the specific circumstances for the departure applicable legislative or regulatory requirements and
the interests of shareholders.
Pay element Good leaver
1
Other leaver
Base salary Executive Directors may be required to work during notice period or if not, 12
months’ salary normally payable monthly and subject to mitigation if payment is
made in lieu of notice.
Pension Ceases on termination and no payment for loss of pension.
Benefits Ceases on termination and no payment for loss of benefits.
Annual bonus – cash A cash bonus may be payable subject to
performance.
Performance conditions will be measured at
the bonus measurement date and payment
made in line with other Executive Directors.
Any cash award will normally be pro-rated for
the period worked during the financial year.
Payment will usually be made at the same time
as Executive Directors but if the Executive
Director has left employment by that date, it
may be paid solely in cash.
No bonus will be payable for the
year of cessation.
Annual bonus – DSP
awards
All in-flight DSP awards will normally vest on the
normal vesting date, unless the Committee
determines earlier vesting.
Unvested awards lapse on the
termination date.
One-off IPO awards and
PSP awards
All in-flight awards will normally vest on the
normal vesting date, subject to performance
conditions unless the Committee determine
otherwise.
Awards that vest will normally be pro-rated
based on proportion of the vesting period
that has elapsed up to termination, unless
Committee agrees otherwise.
The PSP holding period will continue to apply
unless Committee determine otherwise.
Unvested awards lapse on the
termination date.
PSP awards in a holding
period
The holding period will normally continue to apply to vested PSP award shares as
normal; however, the Committee retains discretion to allow the shares to be
released when cessation of employment occurs in certain exceptional
circumstances.
All-employee share plans Treatment of awards under any all-employee share plan including the SIP and
Sharesave plans would be in line with relevant legislation.
Buy-out awards Treatment of the buyout award would be in line with the terms of the buyout
award agreed.
Post-employment
shareholding requirement
Executive Directors are expected to hold shares after cessation of employment
to the full value of the shareholding requirement (or the existing shareholding if
lower at the time) for a period of two years. The post-employment shareholding
requirement will apply to all awards made after shareholder approval of the Policy.
Shares purchased by Executive Directors using their own funds will not be
included in the post-employment shareholding requirement.
1. Subject to the relevant plan rules and any applicable legislative or regulatory requirements, ‘Good Leaver’ status will typically be if employment
ceases because of, for example, death, ill-health, injury, disability, redundancy, retirement with the agreement of their employer within the
Group or being employed by a company which ceases to be a Group company or being employed in an undertaking which is transferred to a
person who is not a Group company or any other circumstances determined at the Committee’s discretion.
144 MADE.COM Group Plc
Annual Report and Accounts 2021
Change of control
The following treatment will apply on a change of control of the Company as set out in the relevant plan rules.
Remuneration element Policy
Annual bonus – cash
awards
In the event of a change of control, cash awards under the annual bonus may be
payable early and where paid early will be subject to performance assessment to
the date of the change of control.
The Committee will consider the relevant circumstances at the time to
determine whether it is appropriate not to pro-rate the bonus for time.
Annual bonus – DSP
awards
In the event of a change of control, inflight DSP awards will vest. The proportion
of the DSP awards which vest shall be determined by the Committee in its
absolute discretion taking into account such factors as the Committee may
consider relevant including, but not limited to, the period of time the DSP awards
have been held by the participant.
If there is a change of control event resulting in a new person or company
acquiring control of the Company, the Committee may (with the consent of the
acquiring company) decide that DSP awards will not vest but will be replaced by
equivalent new awards over shares in the new acquiring company.
PSP and IPO awards In the event of a change of control, inflight PSP awards will vest. The holding
period will not apply on change of control.
The proportion of the PSP awards which vest shall be determined by the
Committee in its absolute discretion taking into account such factors as the
Committee may consider relevant including, but not limited to, the period of
time the PSP award has been held by the participant and having regard to any
applicable performance conditions.
The Committee’s normal policy is that it will pro-rate the PSP awards for time,
but any decision on pro-rating will be taken based on the circumstances of the
change of control.
If there is a change of control event resulting in a new person or company
acquiring control of the Company, the Committee may (with the consent of the
acquiring company) decide that PSP awards will not vest but will be replaced by
equivalent new awards over shares in the new acquiring company.
All-employee share plans The treatment of awards under any all-employee share plan including awards
under the SIP and options under Sharesave are governed by the rules of those
plans and applicable legislation.
Buy-out awards Where an Executive Director has been granted a buy-out award, the treatment
of the buyout award on a change of control would be in line with the terms of the
buyout award.
MADE Directors’ Remuneration Policy
continued
145 MADE.COM Group Plc
Annual Report and Accounts 2021
MADE Directors’ Remuneration Policy
continued
Remuneration Policy table for the Chair and Non-Executive Directors
The Chair and Non-Executive Directors will receive an annual cash fee for their services, with additional fees for
Committee chairs. Fee levels have been set to ensure the attraction of appropriate levels of experience required
and to reflect the sector in which the Group operates.
Chair and Non-Executive Director fees
Purpose To provide an appropriate fee level to attract and retain the Chair and Non-
Executive Directors and to appropriately recognise their responsibilities and time
commitment.
Operation Non-Executive Directors are paid a base fee and additional fees for acting as
Senior Independent Director and Chair of Board Committees (or to reflect other
additional responsibilities and/or additional/unforeseen time commitments).
The Chair of the Board receives an all-inclusive fee. Neither the Chair of the
Board nor the Non-Executive Directors will participate in any incentive plans.
Maximum potential value The Chair’s fees are determined by the Committee whilst those of the other
Non-Executive Directors are determined by the Chair and the Executive
Directors.
The fees for the Non-Executive Directors and Chair are set taking into account
the time commitment of the role and market rates in comparable companies.
The fees are normally reviewed annually (but not necessarily increased) effective
from the start of the financial year. The Company retains the flexibility to pay
fees for the membership of Committees and for any additional Board duties.
In general, fee level increases will be in line with independent advice and the
market. The Company will reimburse any reasonable expenses incurred (and
related tax if applicable).
Fees for new Non-Executive Directors will be in line with the Policy and the fees
provided for the other Non-Executive Directors.
The Company will pay reasonable expenses incurred by the Non-Executive
Directors and Chair and may settle any tax incurred in relation to these.
Performance metrics N/A
146 MADE.COM Group Plc
Annual Report and Accounts 2021
Executive Director service contracts and letters of appointment
Employment contracts for Executive Directors are held at MADE’s head office and can be viewed upon request.
Executive Director
Date of current appointment to
Made.com Group Plc Notice from the Group and individual
Philippe Chainieux 20 April 2021 12 months
Adrian Evans 7 May 2021 12 months
Non-Executive Directors’ (NED) terms of appointment
The NEDs do not have service contracts with the Group but instead have letters of appointment (for terms
lasting up to six years). The date of appointment and the length of notice for each NED are shown in the table
below:
Executive Director
Date of current appointment to
Made.com Group Plc Notice from the Group and individual
Susanne Given 7 May 2021 3 months
Ning Li 20 April 2021 3 months
Gwyn Burr 7 May 2021 3 months
Bruno Crémel 7 May 2021 3 months
George McCulloch 7 May 2021 3 months
Matthew Price 14 May 2021 3 months
This Report has been prepared in accordance with Schedule 8 to The Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 as amended in 2013, 2018 and 2019, the Provisions of the
current Code and the Listing Rules.
Gwyn Burr
Chair of the Remuneration Committee
7 March 2022
MADE Directors’ Remuneration Policy
continued
147 MADE.COM Group Plc
Annual Report and Accounts 2021
Directors’ report
Introduction
The Directors of MADE are pleased to present their
Annual Report for the financial year ended 2021 which
comprises pages 86-113 and 148-153 of this Report.
The Directors’ Report includes information required to
be disclosed under the Act, the Code, the Financial
Conduct Authorities Listing Rules (‘Listing Rules’) and
the Disclosure Guidance and Transparency Rules (‘DTRs’).
The Strategic Report and this Directors’ Report,
together with sections of the Corporate Governance
Report incorporated by reference, form the
Management Report for the purpose of DTR 4.1.8R.
The Directors’ Report fulfils the requirements of the
corporate governance statement for the purposes of
DTR 7.2.3R. Certain disclosure requirements for
inclusion in the Directors’ Report have been
incorporated into this Report by reference:
Other information relevant to
the Directors’ Report Page
Employee share schemes
and share ownership
45, 78 and 126-127
Future business
developments
23-25, 36-38 and 42-43
Going concern and viability 81-83, 107 109 and note 2
to the Financial
Statements (page 172)
Risk management 76-83
GHG emissions and energy
consumption
61-63
Financial instruments and
risk management
Notes 18 (pages 192-193)
and 26 (pages 200-201 to
the Financial Statements
Research and development Note 2 to the Financial
Statements on page 175
Information required by Listing Rules 9.8.4R
1
Page
Statement of capitalised interest Note 2 to the
Financial
Statements,
pages 172-180
1. LR 9.8.4(2)R, 9.8.4(5) and (6)R, 9.8.4(7) and (8)R, 9.8.4(7) and (8)R,
LR 9.8.4R(9), 9.8.4(10)(a)R, 9.8.4(10)(b)R, 9.8.4(11)R, 9.8.4(12) and
(13)R, 9.8.5G and 9.8.4(14)(a) and (b)R are not applicable.
Fair, balanced and understandable
The Board considers, on the advice of the Audit and
Risk Committee, that the Annual Report, taken as
a whole, is fair, balanced and understandable and
provides the information necessary for shareholders
to assess the Company’s and the Group’s position,
performance, business model and strategy.
Relating to Directors
Directors
The Directors who have held office during the year
ended 31 December 2021, together with biographical
details of each Director, are provided on pages 92-95.
In addition, Philippe Chainieux was a director during the
period under review and stepped down from the Board
on 21 February 2022. Nicola Thompson was appointed
to the Board on 21 February 2022.
The appointment and retirement of Directors is governed
by the Company’s articles of association (the ‘Articles’),
the Code, the Act and other related legislation.
Directors’ share interests
Details regarding the share interests of the Directors in
the share capital of the Company are set out in the
Directors’ Remuneration Report on page 125.
Directors’ powers
In accordance with the Articles and the Act, the Board
may exercise all of the powers of the Company, including
in relation to the allotment and issuance of shares and
the buying back of shares (subject to the necessary
shareholder authorities being in place). This authority will
always remain subject to any directions given by the
Company by special resolution and any relevant statutes
and regulations. Matters reserved for determination by
the Board are summarised on page 98.
Directors’ indemnities and insurance
In accordance with the Articles, which provide that
each Director is eligible to benefit from a directors’
indemnity, MADE entered into a deed of indemnity
in favour of each Director at the time of the IPO.
The Group also maintains at its expense a directors’
and officers’ liability insurance policy to provide cover
for any legal action brought against the Directors.
The policy does not provide cover where the director
or officer has acted fraudulently or dishonestly.
A review will be carried out on an annual basis to ensure
that the Board remains satisfied that an appropriate
level of insurance cover is in place.
148 MADE.COM Group Plc
Annual Report and Accounts 2021
Directors’ report
continued
Substantial shareholdings
Information provided to the Company by major shareholders pursuant to the FCA’s Disclosure Guidance and
Transparency Rules (DTR) is published via a Regulatory Information Service and is available on the Company’s
website. As at 31 December 2021 and 7 March 2022
11
the Company had received notification of the following
interests in voting rights pursuant to Chapter 5 of the DTR
12
:
11. Being the latest practicable date prior to publication of this Annual Report.
12. Notification is only required when the next applicable percentage threshold is crossed, meaning these holdings may have changed since
notification was last required.
Name of notifying entity/nature of holding
Number
of shares
disclosed
as at
31 December 2021
% interest in
voting rights
as at
31 December 2021
Level Equity Management, LLC 65,497,741 16.84%
Partech Growth FPCI 55,304,527 14.26%
The Capital Group Companies, Inc. 30,679,670 7.91%
Majedie Asset Management Limited 26,007,994 6.70%
Eight Roads Shareholdings Limited 23,310,474 5.99%
For the purposes of DTR 5, no changes to the shareholdings set out in this table have been disclosed to the Company since 31 December 2021
to the date of thie Report.
Compensation for loss of office
There are no agreements between the Company and
its Directors or employees providing for additional
compensation for loss of office or employment
(whether through resignation, redundancy or otherwise)
that occurs because of a takeover bid.
Relating to the Company’s share capital
Share capital
Details of the Company’s issued share capital are set
out in note 23 to the Financial Statements on page 194.
As at 31 December 2021 the Company had one class of
share: ordinary shares of 0.0001 pence nominal value,
each of which carries the right to one vote at general
meetings of the Company and to an equal proportion of
any dividends declared and paid. Holders of ordinary
shares are entitled to receive the Company’s Annual
Report and Accounts. Subject to meeting certain
thresholds, holders of ordinary shares may requisition a
general meeting of the Company or the proposal of
resolutions at AGMs. The rights and obligations attached
to the ordinary shares are governed by English law and
the Company’s Articles. No person has any special rights
of control over the Company’s share capital and all
issued shares are fully paid.
Voting
Each of the Company’s ordinary shares carries a right to
attend, speak and vote at general meetings of the
Company, which may be exercised in person, by proxy,
or, in relation to corporate members, by corporate
representatives. For the valid appointment of a proxy,
notice of appointment must be received by the
Company not less than 48 hours before the relevant
general meeting at which the person named in the
Form of Proxy proposes to vote. The Directors may in
their discretion determine that, in calculating the
48-hour period, no account be taken of any part of a
day which is not a working day. Any ordinary shares held
in treasury have no voting rights.
Restrictions on transfer of shares
Save as described below, the Company is not aware
of any restrictions on the transfer of the Company’s
ordinary shares and the Company is not aware of any
agreements between shareholders that may result in
restrictions on the transfer of shares or on voting rights.
IPO Lock-Up Arrangements – In connection with
the IPO, the Company entered into an underwriting
agreement with its joint global co-ordinators (JP
Morgan and Morgan Stanley) (the ‘Joint Global Co-
ordinators’) and certain principal shareholders (the
‘Underwriting Agreement’). In addition, certain deeds of
election were entered into between the Company and
minority shareholders and/or optionholders, who agreed
to participate in a secondary offering under the IPO
(the ‘Deeds of Election’). Pursuant to the terms of the
Underwriting Agreement and the Deeds of Election,
the Major Shareholders, the Directors and the Minority
Shareholders (each as defined in the prospectus
issued in connection with the IPO and available on
the Company’s corporate website) agreed to enter
into lock-up arrangements. Under these lock-up
arrangements, each signatory agreed that they will not,
without the prior written consent of the Joint Global
Co-ordinators, issue, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce
an offer of any shares or enter into transaction with the
same economic effect as any of the foregoing.
149 MADE.COM Group Plc
Annual Report and Accounts 2021
These restrictions (subject to certain exceptions) applied
to the Company, the Major Shareholders and the Minority
Shareholders for a period of 180 days following the IPO
and therefore came to an end on 18 December 2021.
In the case of the Executive Directors, Chair and certain
other senior management who hold options and/or shares
in the Company, the lock-up restrictions will continue to
apply for a period of 360 days following the IPO and will
end on 16 June 2022.
Share dealing code – Under the Company’s code on
dealings in securities in the Company, persons
discharging managerial responsibilities and some other
senior executives may, in certain circumstances, be
restricted as to when they can transfer shares in the
Company.
Restrictions under the Articles – The Board may, in
its absolute discretion, refuse to register a transfer in
certain situations, as specified by the Company’s
Articles. Under the Articles the Board may refuse to
register the transfer of certificated shares which are
not fully paid, provided that the refusal does not
prevent dealings in shares in the Company from taking
place on an open and proper basis.
No shareholder holds securities carrying any special
rights or control over the Company’s share capital.
Dividends
The Company intends to retain any earnings to finance
the growth and deployment of the business and
therefore does not intend to pay a dividend at this
time. The Company intends to revisit its dividend policy
in future years and may revise its dividend policy from
time to time.
Relating to the Company
Articles of Association
The Company’s Articles may only be amended by special
Directors’ report
continued
Subsidiaries and branches
The Group has the following subsidiary companies:
Subsidiary Jurisdiction of Incorporation Parent
Made.com Design Ltd England Made.com Group Plc
Made.com Limited (in
voluntary solvent liquidation) Gibraltar Made.com Group Plc
Made.com Netherlands B.V Netherlands Made.com Design Ltd
Made.com Trading Limited Hong Kong Made.com Design Ltd
Made.com Company Limited China Made.com Design Ltd
resolution at a general meeting of the shareholders.
In accordance with the Act, the Group also discloses
below the subsidiary companies that have branches
outside the UK:
+ Made.com Design Ltd (French Branch)
+ Made.com Design Ltd (German Branch)
+ Made.com Design Ltd (Netherlands Branch)
+ Made.com Design Ltd (Vietnam Representative
Office)
Significant agreements with change of control provision
The Group is a party to the following significant
agreements, which subsisted during the period under
review and that take effect, alter or terminate upon a
change of control following a takeover bid:
Silicon Valley Bank – Made.com Design Ltd was the
Borrower under a mezzanine term loan agreement
dated 14 May 2020, under which Silicon Valley Bank
could make available an amount up to £10,000,000
for the Borrower’s general corporate purposes.
The agreement contained a change of control provision
pursuant to which the consent of Silicon Valley Bank
was required to permit the direct or indirect change
of control or ownership of at least 40% of the voting
shares of Made.com Limited (the parent company of
the Group prior to the IPO). The mezzanine term
loan was prepaid in full and terminated at the time
of the IPO.
Made.com Design Ltd was also the Borrower under
a revolving line credit facility made available by Silicon
Valley Bank of an amount up to £10,000,000.
The revolving line credit facility matured and was
terminated on 17 January 2022. The agreement
contained a change of control provision pursuant to
which the consent of Silicon Valley Bank was required to
permit the direct change of control or ownership of at
least 40% of the voting shares of Made.com Design Ltd.
150 MADE.COM Group Plc
Annual Report and Accounts 2021
As disclosed at the time of the IPO, the consent of
Silicon Valley Bank was obtained for the changes of
control that occurred in relation to the IPO, including
the pre- and post-IPO Group reorganisation.
iForce Limited – Made.com Design Ltd is party to an
agreement with iForce Limited (iForce), under which
MADE is provided with warehouse facilities for small
interior and household goods. iForce is currently our
only provider of such warehousing facilities for small
goods in the UK. The agreement contains a termination
right for iForce in the event of a change in the direct,
or indirect, control or ownership of at least 50% of the
voting securities, or other such ownership interest, in
Made.com Design Ltd to a person who iForce
reasonably considers to be:
– a competitor of iForce;
– not financially viable; or
– any organisation who’s method of doing business
might reasonably be expected to adversely affect
MADE’s ability to perform its obligations under the
agreement.
Be2Bill – Made.com Design Ltd is party to an
agreement with Credorax Bank Limited and
Rentabiliweb Europe SAS for the provision of credit
card processing and related payment services.
The agreement contains an immediate termination
right in the event of a change of control of Made.com
Design Ltd, its business or location and such change is
not acceptable to the counterparties.
Employment Policies
Information on the Group’s employment policies can be
found on pages 57-58 of the Strategic Report.
Employee engagement and communication
For more information on how the Board has engaged
with MADE’s employees during the year under review,
please refer to the stakeholder engagement and
section 172 statement on pages 44-52 of the
Strategic Report.
Customer, supplier and other stakeholder views
For more information on how the Board has engaged
with MADE’s customers, designers and suppliers during
the year under review, please refer to the stakeholder
engagement and section 172 statement on pages
44-52 of the Strategic Report.
Political donations
The Group did not make any political donations or
incur any political expenditure during the year ended
31 December 2021. Although the Group has no intention
of making any political donations or incurring any political
expenditure it is possible that certain routine activities
may unintentionally fall within the broad scope of the
Act’s provisions relating to the same. Accordingly, the
Directors will be seeking authority to incur political
expenditure and make political donations at the
forthcoming AGM, in accordance with relevant
institutional investor guidelines.
Human Rights and Modern Slavery
MADE has prepared a Modern Slavery Statement in
accordance with Section 54(1) of the Modern Slavery
Act 2015. The statement is reviewed and approved by
the Board annually and can be accessed on our website
at https://www.made.com/modern-slavery-act/.
The statement details MADE’s actions to combat
modern slavery across the Group and throughout our
supply chain.
The MADE sustainability team created and internally
launched the business’ first sustainability strategy in
2020. At MADE, our commitment to great design has
extended into making better business choices that
minimise our impact on people and the planet and we
are committed to making sustainability a part of
everything we do. This is not simply business strategy,
but our moral obligation. For MADE, sustainability is not
only about our impact on the environment but also our
impact on people, and our strategy incorporates
MADE’s social responsibility more widely. MADE is fully
conscious of the close link between people and planet
and understands that the climate crisis aggravates
human rights issues, including modern slavery. That is
why our approach to sustainability is strategically
multi-disciplinary and ensures both elements are
equally weighted. In 2021, we focused on four key areas:
– Responsible timber sourcing: making sure the timber
we buy is only sourced from responsibly managed
forests creates less environmental impact.
– Responsible textile sourcing: we’re on a mission to
make sure two of our key materials – cotton and
polyester – are only from recycled or other
sustainable sources.
– Responsible packaging: looking at innovative ways to
reduce the amount we use to protect our products,
especially plastic.
– Responsible end of life: we launched a giveaway
service with Geev to tackle waste.
Directors’ report
continued
151 MADE.COM Group Plc
Annual Report and Accounts 2021
Directors’ report
continued
For more information on our commitments to
sustainability please refer our corporate website at
https://corporate.made.com/about/sustainability/
Disclosure of information to the auditor
Each Director as at the date of approval of this Annual
Report confirms that:
+ so far as the Director is aware, there is no relevant
audit information of which the Company’s auditor is
unaware; and
+ the Director has taken all the steps that he/she
ought to have taken as a Director in order to
make himself/herself aware of any relevant audit
information and to establish that the Company’s
auditor is aware of that information
The confirmation is given and should be interpreted
in accordance with the provisions of section 418 of
the Act.
Annual General Meeting
The forthcoming AGM is scheduled to take place on
5 May 2022. Full details are contained in the Notice
convening the AGM, which will be sent to shareholders
shortly after the publication of this Report.
The Directors’ Report has been approved by the Board
and signed on its behalf by:
Susanne Given
Chair
7 March 2022
152 MADE.COM Group Plc
Annual Report and Accounts 2021
The Directors are responsible for preparing the Annual
Report including the Directors’ Remuneration Report
and Policy and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare
Financial Statements for each financial year. The
Directors are required by the IAS Regulation to prepare
the Group Financial Statements under UK-adopted
international accounting standards and have elected to
also prepare the Company Financial Statements in
accordance with UK-adopted international accounting
standards.
The Financial Statements are also required by law to
be properly prepared in accordance with the Act and
Article 4 of the IAS Regulation. Under company law, the
Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and the
Group and of the profit or loss of the Company and the
Group for that period.
In preparing the Company Financial Statements, the
Directors are required to:
+ select suitable accounting policies and then apply
them consistently
+ make judgements and accounting estimates that are
reasonable and prudent
+ state whether applicable UK Accounting Standards
have been followed, subject to any material
departures disclosed and explained in the Financial
Statements; and
+ prepare the Financial Statements on the going
concern basis unless it is inappropriate to presume
that the Company will continue in business
International Accounting Standard 1 requires that the
Financial Statements present fairly for each financial
year the relevant entity’s financial position, financial
performance and cash flows. This requires the faithful
representation of the effects of transactions, other
events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities,
income and expenses set out in the International
Accounting Standards Board’s ‘Framework for the
preparation and presentation of Financial Statements’.
In virtually all circumstances, a fair presentation will be
achieved by compliance with all applicable reporting
standards.
Statement of Directors’ responsibilities
Directors are also required to:
+ properly select and apply accounting policies
+ present information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information
+ provide additional disclosures when compliance with
the specific requirements in UK-adopted international
accounting standards are insufficient to enable users
to understand the impact of particular transactions,
other events and conditions on the entity’s financial
position and financial performance
+ make an assessment of the Company’s and the
Group’s (as the case may be) ability to continue as a
going concern.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s and the Group’s transactions on
an individual and consolidated basis and disclose with
reasonable accuracy at any time the financial position
of the Company and the Group and enable them to
ensure that the Financial Statements comply with the
Act. They are also responsible for safeguarding the
assets of the Company and the Group and hence for
taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Group’s website. Legislation in the
UK governing the preparation and dissemination of
Financial Statements may differ from legislation in
other jurisdictions.
Each Director confirms that, to the best of his or her
knowledge:
a) the Group and Company Financial Statements in
this Annual Report, which have been prepared in
accordance with the applicable financial reporting
framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Company and of the Group taken as a whole; and
b) the Annual Report includes a fair review of the
development and performance of the business and
the position of the Company and the Group taken
as a whole, together with a description of the
principal risks and uncertainties they face.
This responsibility statement was approved by the
Board of Directors on 7 March 2022 and is signed on its
behalf by:
Nicola Thompson Adrian Evans
Chief Executive Officer Chief Financial Officer
7 March 2022 7 March 2022
153 MADE.COM Group Plc
Annual Report and Accounts 2021
Opinion
In our opinion:
+ Made.com Group Plc’s Group financial statements and Parent Company financial statements (the “financial
statements”) give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2021 and of the Group’s loss for the year then ended;
+ the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
+ the Parent Company financial statements have been properly prepared in accordance with UK adopted
international accounting standards as applied in accordance with section 408 of the Companies Act 2006;
and
+ the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
We have audited the financial statements of Made.com Group Plc (the ‘Company’) and its subsidiaries (the
‘Group’) for the year ended 31 December 2021 which comprise:
Group Parent Company
Consolidated statement of financial position as at 31
December 2021
Statement of financial position as at 31 December 2021
Consolidated income statement for the year then
ended
Statement of changes in equity for the year then ended
Consolidated statement of comprehensive income for
the year then ended
Related notes to the financial statements including a
summary of significant accounting policies
Consolidated statement of changes in equity for the
year then ended
Consolidated statement of cash flows for the year
then ended
Related notes 1 to 30 to the financial statements,
including a summary of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted
international accounting standards and as regards the Parent Company financial statements, as applied in
accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the
Company and we remain independent of the Group and the Company in conducting the audit.
154 MADE.COM Group Plc
Annual Report and Accounts 2021
Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the Group and Company’s ability to continue to adopt the going concern basis of accounting
included:
+ updating our understanding of management’s process and approach related to the assessment of going
concern;
+ obtaining management’s going concern model which included a base case, severe yet plausible downside and
reverse stress case cash flow scenarios covering the going concern assessment period;
+ testing the inputs to the model and agreeing them to the latest Board approved forecasts;
+ checking the arithmetical accuracy of the cash flow forecast models and assessing management’s ability to
forecast with reference to historical accuracy of forecasts prepared for going concern in prior periods;
+ challenging management’s key assumptions within the base case, severe yet plausible downside and reverse
stress case cash flow forecasts, including the gross sales assumptions, reduction in lead times and freight
costs stabilisation in the context of evidence sourced from external market data and analysts’ forecasts;
+ evaluating a reverse stress test on gross sales and freight costs, the most sensitive of the key assumptions;
+ assessing potential mitigating actions identified by management and whether these were realistic and within
management’s control;
+ assessing the likelihood of the various scenarios (including the impact of a gross sales decline of 50% year-on-
year followed by 0% gross sales growth in 2023 and an immediate decline of 5.7% in gross margin from the
base case is assumed, without cost mitigation actions) that could erode liquidity headroom;
+ assessing the adequacy of the going concern assessment period until 30 June 2023 and inquiring of
management as to their knowledge of events, or conditions beyond the period of their assessment that may
cast significant doubt on the Group’s ability to continue as a going concern;
+ comparing management’s forecasts to actual results through the subsequent events period and performing
inquiries to the date of this report;
+ reviewing minutes of board meetings, including management’s assessment of the impact of the conflict in the
Ukraine, analysts’ reports and trading updates released to the market with a view to identifying any matters
which may impact the going concern assessment and contradict the findings made from the procedures we
performed above; and
+ assessing if the going concern disclosures in the financial statements are appropriate and in accordance with
the reporting standards.
The directors’ assessment forecasts that the Group will maintain sufficiently liquidity throughout the going
concern assessment period in the base case and reasonably plausible downside scenarios. Management also
modelled a reverse stress scenario which is considered remote where gross sales would have to decline to
pre-2020 levels with minimal cost mitigations modelled before liquidity is eliminated at June 2023.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s and Company’s ability to
continue as a going concern for a period to 30 June 2023.
In relation to the Group and Company’s reporting on how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report. However, because not all future events or conditions can be predicted, this
statement is not a guarantee as to the Group’s or Company’s ability to continue as a going concern.
155 MADE.COM Group Plc
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for the year ended 31 December 2021 continued
Overview of our audit approach
Audit scope + We performed an audit of the complete financial information of two components.
+ The components where we performed full audit procedures accounted for 100%
of revenue, 90% of loss before tax and 100% of total assets.
Key audit matters + Revenue recognition including the risk of management override (Group)
+ Accounting for the pre-IPO reorganisation and related IPO costs (Group and
Company)
+ Valuation of inventory (Group)
Materiality + Group materiality of £2.4m which represents 0.75% of revenue.
An Overview of the Scope of the Company and Group Audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality
determine our audit scope for each company within the Group. Taken together, this enables us to form an
opinion on the consolidated financial statements. We take into account size and risk profile when assessing the
level of work to be performed at each component.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had
adequate quantitative coverage of significant accounts in the financial statements, we selected two
components covering entities within the UK, which represent the principal business units within the Group.
Of the two components selected, we performed an audit of the complete financial information (“full scope
components”) which were selected based on their size or risk characteristics.
The full scope components where we performed audit procedures accounted for 100% of the Group’s revenue,
90% of the Group’s loss before tax and 100% of the Group’s total assets.
The remaining three components together represent 10% of the Group’s loss before tax. For these components,
we performed other procedures, including analytical review and, testing of consolidation journals and
intercompany eliminations and foreign currency translation recalculations to respond to any potential risks of
material misstatement to the Group financial statements. We also performed cash confirmation procedures for
review scope components.
Involvement with component teams
All audit work performed for the purposes of the audit was undertaken by the Group audit team in the UK.
During the current year’s audit cycle, the Covid-19 pandemic had minimal impact on our audit procedures.
We attended physical stock counts at all warehouse locations as the Covid-19 restrictions eased. This gave us
appropriate evidence for our opinion on the Group financial statements.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies.
The Group has determined that the most significant future impacts from climate change on its operations
will be from extreme weather events. These are explained on pages 62-63 in the Task Force for Climate related
Financial Disclosures and on pages 75 in the principal risks and uncertainties, which form part of the “Other
information,” rather than the audited financial statements. Our procedures on these disclosures therefore
consisted solely of considering whether they are materially consistent with the financial statements or our
knowledge obtained in the course of the audit or otherwise appear to be materially misstated.
Our audit effort in considering climate change was focused on the adequacy of the Group’s disclosures in the
financial statements and the appropriateness of management’s conclusion that no issues were identified that
would impact the carrying values of non-current assets or that have any other impact on the key audit matters
below for Made.com Group Plc. We also challenged the directors’ considerations of climate change in their
assessment of going concern and viability and associated disclosures.
156 MADE.COM Group Plc
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for the year ended 31 December 2021 continued
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements as
a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters
Revenue recognition including the risk of management override
£371.9 million (2020: £247.3 million)
Refer to the Audit Committee Report (page 11); Accounting policies (page 173) and note 5 of the Consolidated
Financial Statements (page 183)
The majority of Group’s revenue transactions are non-complex, with little judgement applied. However,
management processes manual adjustments relating to revenue cut-off at year-end which involve estimates.
These include an estimate of the product dispatched but not yet delivered and an estimate of the returns
provision.
All gross sales are initially recognised as deferred revenue until the product is delivered to customers. As deferred
revenue is released to revenue when the product is dispatched, there is a manual reversal for any product which
has not arrived at the customer at the end of the period. This adjustment is £7.4m at year-end (2020: £4.5m).
An estimate of the delivery lead time is applied to the average revenue for December 2021 to estimate the value
of the adjustment at year end. Management also makes a provision for product delivered to customers that may
be returned post year end. The level of returns is estimated based on current and historical return rate trends.
Our assessment of the risk is that revenue may be misstated through incorrect manual cut-off adjustments, due
to the estimates involved.
In addition, revenue recognition is a presumed significant risk due to the risk of material misstatement through
fraudulent or erroneous financial reporting.
Our audit responses to the Risk
Revenue recognised + We performed walkthroughs of significant classes of revenue transactions to
understand the related significant processes over the revenue recognition process.
+ We used data analytics tools on 100% of revenue populations in the year to test
the correlation of invoiced revenue to cash receipts to verify the occurrence of
invoiced revenue.
+ We verified the occurrence of revenue by performing testing over a sample of
dispatched revenue transactions pre-year end, to check that they were sold and
dispatched during the year.
+ We tested the completeness of revenue/deferred revenue by performing cut-off
testing over a sample of dispatched revenue transactions post year-end, to check
that they were released to the revenue account in the appropriate period.
Deferred revenue
adjustments – delivery
lead time
+ We held discussions directly with the Head of Transport and Operations to
understand the process of obtaining delivery data and obtain an understanding of
the conclusions drawn by the operational team;
+ We assessed the appropriateness of the average delivery lead time estimates
used in the deferred revenue adjustments calculation through comparison to third
party data where available;
+ For those regions with no delivery data available, we performed sensitivity analysis
to determine the impact of applying longer delivery times; and
+ We assessed the appropriateness of the underlying revenue data used to
calculate the estimate through reconciling it back to the dispatched revenue data
listing which was tested at year end.
157 MADE.COM Group Plc
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Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Returns provision + We evaluated management’s provision calculation basis and assessed historical
accuracy of estimating the provision; and
+ We independently developed an expected range of returns provision using
historical returns profile and post year-end actual returns data and critically
assessed whether the difference between the provision recorded by management
and the nearest point of our range was material.
Journal entry testing We performed other audit procedures specifically designed to address the risk of
management override of controls. This included journal entry testing, applying
particular focus to significant manual or unusual journal entries posted to revenue
accounts to ensure each entry is supported by an appropriate, underlying business
rationale, is properly authorised and accounted for in the correct period.
Key observations communicated to the Audit Committee
Based on the procedures performed, we did not identify any evidence of material misstatement in the revenue
recognised in the year.
Key audit matters
Accounting for the Pre-IPO reorganisation and related IPO costs
Refer to the Audit Committee Report (page 13); Accounting policies (page 171) and note 7 and 23 of the
Consolidated Financial Statements (page 184 and pages 194 - 196)
As part of its preparation for the initial public offering (“IPO”), a pre-IPO restructuring was implemented to
create a suitable listing vehicle (that is, Made.com Group Plc) to simplify the Group’s capital structure.
The Group incurred £9.2 million of costs relating to the IPO transaction in the financial year.
There is a risk that the transaction steps and accounting consequences are not completely and accurately
accounted for and the amounts relating to these transactions are incorrectly valued or disclosed within the
financial statements and other information presented in the Annual Report and Accounts due to the complexity
and judgement involved.
Our audit responses to the Risk
Accounting for the
pre-IPO reorganisation
With support from our accounting advisory specialists, we performed the following
procedures:
+ Developed an independent understanding of the transaction steps in
management’s legal steps paper;
+ Identified the most complex steps from an accounting perspective and sceptically
assessed the judgement applied. These included:
Application of reverse acquisition accounting for the acquisition of Made.com
Limited by Made.com Group Plc
+ We independently assessed whether the transaction was in the scope of IFRS 3
Business Combinations and determined it did not meet the criteria due to the
acquisition of Made.com Group Plc not constituting a business.
+ We considered the Interpretations Committee (‘IFRIC’) report issued in November
2012 and March 2013 and assessed whether management’s judgement that this
situation was analogous to a reverse acquisition and therefore that they should
apply continuation accounting was appropriate.
+ We verified whether the accounting entries were recorded appropriately in the
Consolidated Financial Statements. The transaction affected the following equity
accounts: share capital, preference shares, share premium and merger reserves.
Assessment of IAS 27 Investment in Subsidiaries paragraph 13
+ We assessed that the relative and absolute control of the Group pre and post the
share for share exchange purchase of Made.com Limited, to ensure that the
investment in subsidiaries has been correctly recorded in Made.com Group Plc.
158 MADE.COM Group Plc
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Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Assessment of
management’s specialists
+ We assessed the competence, capabilities and objectivity of RSM who were
engaged by management as an accounting expert to support their judgements
and conclusion.
Other procedures + We understood the tax implications in the legal steps plan and evaluated the
Group’s tax exposures as a result of the transaction.
+ We validated that the replacement share options granted in Made.com Group Plc
were exchanged under the same terms and conditions as the previous grants in
Made.com Limited and as a result that there was no change in the fair value of the
share options pre- and post- the transaction.
IPO related costs + We understood and assessed the nature and amount of cost recognised split by
workstream and service type.
+ We substantively tested management’s split of share issuance costs and
exceptional costs to verify that only incremental costs which were directly
attributable to issuing new shares have been deducted from equity under IAS
32.37 and challenged the classification of costs as exceptional that may otherwise
be considered to be underlying in nature.
+ We assessed the classification of the exceptional items in accordance with the
Group’s accounting policy.
+ We assessed whether the costs were adequately disclosed with sufficient detail in
the financial statements and the other information presented in the Annual
Report and Accounts.
Key observations communicated to the Audit Committee
+ We conclude the accounting for pre-IPO reorganisation and the valuation and presentation of the IPO related
costs to be appropriate in the Annual Report and Accounts.
Key audit matters
Valuation of inventory
Inventory at 31 December 2021 £63.0 million (2020: £21.5 million)
Freight costs capitalised into inventory £12.7 million (2020: £1.0 million)
Inventory provision £0.1 million (2020: nil)
Refer to the Audit Committee Report (page 14-15); Accounting policies (page 175) and note 15 of the
Consolidated Financial Statements (page 189)
Furniture and homeware products are subject to changing consumer demands. The increase in stock holding
in the current year means that the Group bears an increased risk of recovering the value of stock on hand.
Judgement is required to assess the appropriate level of provisioning for items at risk of obsolescence
particularly given the significant increase in freight cost capitalised. Hence, our assessment is that the valuation
of inventory is a significant risk.
Our audit responses to the Risk
Estimate of freight
costs capitalised
+ We updated our understanding of management’s process for estimating the
amount of freight costs capitalised into inventory.
+ We reviewed and reperformed management’s calculation of the amount of freight
cost capitalised, challenged the timing of cost recognition and validated the
inputs to the underlying transactional data used.
+ We validated the freight rate used in calculating the freight costs capitalised in
inventory at year-end through testing a sample of freight costs incurred during the
shipping lead time period.
+ We developed an expectation of the freight cost rate to be capitalised into
inventory to third party sea freight indices and investigated any differences to our
expectation.
159 MADE.COM Group Plc
Annual Report and Accounts 2021
Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Our audit responses to the Risk continued
Inventory provision + We updated our understanding of the inventory provisioning process and assessed
the appropriateness of the Group’s inventory provision policy.
+ We reviewed and reperformed the provision calculation and verified inputs to
check for existence and accuracy.
+ We assessed whether there was any inventory at risk of obsolescence and
challenged the completeness of the provision through the following:
Stock on hand
+ Challenged if freight costs capitalised were captured as part of the provisioning
assessment for those items at risk of obsolescence;
+ Assessed whether there were any inventory lines with a high rate of return which
may become slow-moving or sold below cost;
+ Assessed if there were any inventory lines which were aged and had little or no
sales during 2021 which would indicate a risk of impairment;
+ Assessed if any inventory items were being sold at negative margin as a result of
sales promotion or higher freight costs which may require being provided for; and
+ Performed enquiries across the business, observed the inventory counts and
obtained independent confirmation from third party warehouses to verify any
damaged or obsolete items.
Stock in transit
+ We tested a sample of stock in transit at year-end comparing them to cancelled
sales orders to assess whether cancelled orders may indicate a possible
recoverability risk; and
+ The inventory provision was recorded against stock on hand items at risk of
impairment. We challenged whether any of the goods in transit were also at risk of
impairment through comparing the product lines provided with those goods in
transit to assess whether any of the goods in transit were also at risk.
Other inventory
valuation procedures
+ We reviewed and reperformed management’s inventory reconciliation and
investigated material differences.
+ We performed testing of both the appropriateness of the cost recorded and the
Net Realisable Value (NRV) by inspecting the latest stock purchase invoice and the
latest sales price which are net of sales discount/promotion, on the basis IAS 2
requires inventory to be carried at the lower of cost and NRV.
+ We performed cut-off testing to ensure the inventory is recognised in the correct
period.
Key observations communicated to the Audit Committee
Based on the procedures performed, we conclude that the value of inventory and the recoverability of inventory
are appropriate at year-end.
160 MADE.COM Group Plc
Annual Report and Accounts 2021
Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of the financial statements. Materiality provides a
basis for determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £2.4 million (2020: £1.8 million), which is 0.75% (2020: 0.75%) of
Group revenue. We believe that revenue provides us with an appropriate measure given the Group is loss making
and this aligns to a key measure for the users of the financial statements.
We determined materiality for the Company to be £1.0 million, which is 0.5% of total assets.
During the course of our audit, we reassessed initial materiality and the actual revenue was higher than the
Group’s initial estimates used in planning. However, due to the status of our procedures we did not change our
materiality assessment to reflect this.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment,
our judgement was that performance materiality should appropriately be 50% (2020: 50%) of our planning
materiality, namely £1.2m (2020: £0.9m), due to the IPO transaction in the period.
In the current year, the performance materiality allocated to the only component audited by the Group team
was £1.2m.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess
of £0.1m (2020: £0.1m), which is set at 5% of planning materiality, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed
above and in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report as set out on pages 1 to 153 other
than the financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
161 MADE.COM Group Plc
Annual Report and Accounts 2021
Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
+ the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
+ the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company and its environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
+ adequate accounting records have not been kept by the Company, or returns adequate for our audit have not
been received from branches not visited by us; or
+ the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
+ certain disclosures of directors’ remuneration specified by law are not made; or
+ we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group and company’s compliance with the provisions of the
UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the Corporate Governance Statement is materially consistent with the financial statements or our knowledge
obtained during the audit:
+ Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified set out on page 83;
+ Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers
and why the period is appropriate set out on page 81;
+ Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in
operation and meets its liabilities set out on page 82;
+ Directors’ statement on fair, balanced and understandable set out on page 148;
+ Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
pages 75-80;
+ The section of the annual report that describes the review of effectiveness of risk management and internal
control systems set out on page 111; and;
+ The section describing the work of the audit committee set out on pages 107-113.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 153, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
162 MADE.COM Group Plc
Annual Report and Accounts 2021
Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the company and management.
+ We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and
determined that the most significant are those that relate to the form and content of the financial
statements, such as the UK-adopted international accounting standards and the UK Corporate Governance
Code and the relevant tax compliance regulations in the jurisdictions in which the Group operates. In addition,
we concluded that there are certain significant laws and regulations which may have an effect on the
determination of the amounts and disclosures in the financial statements being the Listing Rules of the UK
Listing Authority, and those laws and regulations relating to health and safety and employee matters.
+ We understood how Made.com Group Plc is complying with those frameworks by making enquiries of
management, those responsible for legal and compliance procedures. We corroborated our enquiries through
our review of the legal matters report, Board minutes and paper provided to the Audit Committee and
attendance at all meetings of the Audit Committee.
+ We assessed the susceptibility of the Group’s financial statements to material misstatement, including how
fraud might occur by meeting with management from various parts of the business to understand where it
considered there was susceptibility to fraud. We also considered performance targets and their propensity to
influence efforts made by management to influence the perceptions of analysts. We considered the policies
and controls that the Group has established to address risks identified, or that otherwise prevent, deter and
detect fraud; and how senior management monitors those policies and controls. Where the risk was
considered to be higher, we performed audit procedures to address each identified fraud risk (for example with
respect to our work on revenue recognition noted in the key audit matters section). These procedures included
incorporating data analytics in testing of manual journals and were designed to provide reasonable assurance
that the financial statements were free from fraud or error.
+ Based on this understanding we designed our audit procedures to identify non-compliance with such laws and
regulations. Our procedures involved journal entry testing, with a focus on manual/unusual journals posted to
revenue accounts; enquiries of general counsel, Group management and divisional management; and focused
testing, as referred to in the key audit matters section above.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Other matters we are required to address
+ Following the recommendation from the Risk and Audit committee, we were appointed by the company on 13
September 2021 to audit the financial statements for the year ending 31 December 2021 and subsequent
financial periods. The period of total uninterrupted engagement including previous renewals and
reappointments is one year, covering the years ending 31 December 2021 to 31 December 2022.
+ The audit opinion is consistent with the additional report to the Risk and Audit committee.
163 MADE.COM Group Plc
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Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Julie Carlyle (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP
Statutory Auditor
London
8 March 2022
164 MADE.COM Group Plc
Annual Report and Accounts 2021
Independent Auditor’s report to the members of Made.com Group Plc
for the year ended 31 December 2021 continued
Notes
2021
£m
2020
£m
Revenue 5 371. 9 247 .3
Cost of sales (199.8 ) (115. 7 )
Gross profit 172. 1 131.6
Distribution expenses (79. 7 ) (56.6 )
Administrative expenses (122.2 ) (88.2 )
Operating loss 6 (29.8 ) (13.2 )
Finance costs 8 (1.6 ) (1.4 )
Loss before tax (3 1.4 ) (14.6 )
Income tax credit 11 3.6 6.6
Loss for the year attributed to equity holders of the Company (27 .8 ) (8. 0 )
Loss per share (pence per share):
Basic and diluted loss for the year attributable to ordinary
equity holders of the Company 22 (7 .9 )p (2.6 )p
Non-GAAP measures:
Adjusted EBITDA loss 7 £(14. 3 )m £(5. 1 )m
165 MADE.COM Group Plc
Annual Report and Accounts 2021
Consolidated income statement
for the year ended 31 December 2021
2021
£m
2020
£m
Loss for the year (27 .8 ) (8. 0 )
Other comprehensive income/(loss)
Other comprehensive income to be reclassified to profit or loss in
subsequent years (net of tax):
Net unrealised gains/(losses) on cash flow hedges
Exchange differences on translation of foreign operations – –
Net other comprehensive income/(loss) to be reclassified to profit or
loss in subsequent years 5 .0 (2. 1 )
Other comprehensive income/(loss) for the year, net of tax 5 .0 (2. 1 )
Total comprehensive loss for the year, net of tax, attributable to equity
holders of the Company (22.8 ) (10. 1 )
166 MADE.COM Group Plc
Annual Report and Accounts 2021
Consolidated statement of comprehensive income
for the year ended 31 December 2021
Group Company
Notes
2021
£m
2020
£m
2021
£m
2020
£m
Non-current assets
Intangible assets 13 10. 7 8.9 – –
Property, plant and equipment 12 8 .1 3.4 – –
Right of Use Assets 14 2 1 .7 12. 3 – –
Deferred tax asset 11 14.8 12.2 – –
Rent deposits 0.5 0.5 – –
Investment in subsidiaries 28 – – 53.5 –
Current assets
Inventories 15 63.0 21.5 – –
Trade and other receivables 16 16.5 13.2 20.5 –
Derivative asset 18 1.9 1.2 – –
Cash 17 107 .2 50.4 82.4 –
Total assets 244.4 123.6 156.4 –
Current liabilities
Trade and other payables 19 (77.6 ) (39.6 ) (0.6) –
Derivative liability 18 (0.2 ) (6.0 ) – –
Lease liabilities 14 (3. 7 ) (4.5 ) – –
Deferred revenue 21 (55.9 ) (52.8 ) – –
Provisions 20 – – –
(13 7 .4 ) (1 02.9 ) (0.6) –
Non-current liabilities
Lease liabilities 14 (19. 7 ) (9. 7 ) – –
Provisions 20 (2.2 ) (1 .3 ) – –
Interest bearing loans and borrowings 18 – (9. 7 ) – –
(21. 9 ) (20. 7 ) – –
Total liabilities (159.3 ) (123.6 ) (0.6) –
Net assets 85. 1 0 .0 155.8 –
Capital and reserves
Share capital 23 0 .0 0 .0 – –
Share premium 23 0 .0 62.2 – –
Foreign currency translation reserve 23 0.0 0 .0 – –
Hedging reserve 23 1.6 (3.4 ) – –
Merger reserves 23 42. 0 (20.2 ) (51.6) –
Retained earnings 4 1.5 (38.6 ) (104.2) –
The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006
not to publish its individual income statement and related notes. The loss for the year for the Company was
£2.8m.
The financial statements for Made.com Group Plc (Company Registration No. 13346124 (England and Wales)) on
pages 165 to 203 were approved by the Board of Directors on 7 March 2022 and signed on its behalf by:
…………………………. ………………………….
N Thompson A Evans
167 MADE.COM Group Plc
Annual Report and Accounts 2021
Consolidated and company statement of financial position
as at 31 December 2021
Share capital
£m
Share
premium
£m
Foreign
currency
translation
reserve
£m
Hedging
reserve
£m
Merger
reserves
£m
Accumulated
deficit
£m
Total
£m
At 1 January 2020 0.0 62.5 0 .0 (1.3 ) (20.2 ) (32. 3 ) 8 .7
Loss for the year – – – – – (8.0 ) (8. 0 )
Other comprehensive income:
Movements in cashflow hedges – – – (2.5 ) – – (2.5 )
Translation differences – – – – – – –
Tax on other comprehensive
income – – – 0.4 – – 0.4
Total comprehensive loss
fortheyear – – – (2. 1 ) – (8.0 ) (10. 1 )
Share based payments – – – – – 0.6 0.6
Share options exercised – 0.6 – – – – 0.6
Warrants issued – – – – – 0.2 0.2
Reclassification of reserves – (0. 9 ) – – – 0 .9 –
At 31 December 2020 0 .0 62.2 0 .0 (3.4 ) (20.2 ) (38.6 ) 0.0
Loss for the year – – – – – (27 .8 ) (27 .8 )
Other comprehensive income:
Movements in cashflow hedges – – – 6.2 – – 6.2
Translation differences – – 0 .0 – – – –
Tax on other comprehensive
income – – – (1.2 ) – – (1.2 )
Total comprehensive income/(loss)
for the year 0 .0 0 .0 0 .0 5 .0 0.0 (27 .8 ) (22.8 )
Share based payments – – – – – 2.9 2.9
Share-for-share exchange – (62.2 ) – – 62.2 – –
Share capital issued 0 .0 96. 9 – – – – 96.9
Share options exercised 0 .0 8 .1 – – – – 8 .1
Capital reduction – (105. 0 ) – – – 105.0 –
At 31 December 2021 0.0 0 .0 0.0 1.6 42.0 4 1.5 85. 1
All equity disclosed above is attributable to the owners of the parent.
168 MADE.COM Group Plc
Annual Report and Accounts 2021
Consolidated statement of changes in equity
for the year ended 31 December 2021
Share capital
£m
Share
premium
£m
Hedging
reserve
£m
Merger
reserves
£m
Accumulated
deficit
£m
Total
£m
At 1 January 2020 – – – – – –
Loss for the year – – – – – –
Other comprehensive income:
Total comprehensive loss for the year – – – – – –
Capital contribution – – – – – –
Share based payments – – – – – –
Share options exercised – – – – – –
Warrants issued – – – – – –
Reallocation of reserves – – – – – –
At 31 December 2020 – – – – – –
Loss for the year – – – – (2.8) (2.8)
Other comprehensive income:
Total comprehensive income/(loss) for the
year – – – – (2.8) (2.8)
Share based payments – – – – 2.0 2.0
Group reorganisation – – – 51.6 – 51.6
Share capital issued 0.0 96.9 – – – 96.9
Share options exercised 0.0 8.1 – – – 8.1
Capital reduction – (105.0) – – 105.0 –
At 31 December 2021 0.0 – – 51.6 104.2 155.8
169 MADE.COM Group Plc
Annual Report and Accounts 2021
Company statement of changes in equity
for the year ended 31 December 2021
Group Company
Notes
2021
£m
2020
£m
2021
£m
2020
£m
Operating activities
Loss before tax (3 1.4 ) (14.6 ) (2.8) –
Adjustments to reconcile loss before tax
to net cash flows
Depreciation of property, plant and
equipment 12 2.4 2.4 – –
Amortisation of intangible assets 13 4.8 4 .0 – –
Depreciation of right of use assets 14 4 .3 3.9 – –
Share-based payment expense 24 3 .1 0.6 – –
Finance costs 8 1.6 1.4 – –
Working capital adjustments:
Decrease in trade receivables 0 .1 0 .3 – –
(Increase)/decrease in inventories (42. 3 ) 4 .1 – –
Increase in other receivables, prepayments
and accrued income (3.6 ) (5.5 ) (20.8) –
Increase in trade payables, taxes and
social security 24.6 1.8 – –
Increase in accruals and deferred revenue 16.4 34.0 0.6 –
Increase in provisions 0 .9 0 .1 – –
Cash flows from operating activities (19. 1 ) 32.5 (23.0) –
Interest paid (0.8 ) (0.9 ) – –
Income tax received 0 .1 0.6 – –
Net cash (outflow)/inflow from operating
activities (19.8 ) 32.2 (23.0) –
Investing activities
Purchase of property, plant and
equipment 12 (7 . 1 ) (0. 7 ) – –
Expenditure on intangible assets 13 (6.6 ) (5.0 ) – –
Lease start up costs (0.3 ) – – –
Net cash outflow used in investing
activities (14. 0 ) (5. 7 ) – –
Financing activities
Repayment of lease liabilities 14 (4.8 ) (4. 1 ) – –
Proceeds from borrowings 18 – 19.9 – –
Repayment of borrowings 18 (10. 0 ) (10.0 ) – –
Share issuance costs (2. 7 ) – (2.7) –
Proceeds from IPO share issue 100. 0 – 100.0 –
Proceeds from exercise of share options 8 .1 0.6 8.1 –
Net cash inflow from financing activities 90.6 6.4 105.4 –
Net increase in cash 56.8 32.9 82.4 –
Cash at 1 January 5 0.4 17 .5 – –
Cash at 31 December 17 107 .2 50.4 82.4 –
170 MADE.COM Group Plc
Annual Report and Accounts 2021
Consolidated statement of cash flows
for the year ended 31 December 2021
1. General information
June 2021, the Company acquired Made.com Limited and its subsidiaries (the Made.com Limited Group).
Together they form the Made.com Group Plc group (the Group). A list of subsidiaries and their countries of
incorporation is presented in note 28.
Immediately following the reorganisation, the entire issued share capital of the Company was admitted on to the
premium listing segment of the Official List of the Financial Conduct Authority and to trading on the London
Stock Exchange’s Main Market for listed securities.
2. Principal accounting policies
Group Reorganisation
On 21 June 2021, the Company acquired the entire shareholding of Made.com Limited via a share-for-share
exchange. The insertion of the Company on top of the existing Made.com Limited Group does not constitute a
business combination under IFRS 3 Business Combinations. This transaction has been deemed to be a reverse
acquisition in line with guidance from the Interpretations Committee (IFRIC) and as such the consolidated
accounts for the Group are treated as a continuation of the consolidated accounts of the Made.com Limited
Group.
Under the principles of continuation accounting the consolidated financial statement of the newly formed Group
must reflect:
+ The assets and liabilities of the Made.com Limited Group at pre-combination carrying amounts;
+ The retained earnings and other equity balances of the Made.com Limited Group at pre-combination carrying
amounts;
+ The assets and liabilities of the Company at fair value;
+ The share capital of the Company;
+ The income statement for the current period including the results for the Made.com Limited Group up to 21
June 2021 plus the results for the newly formed Group from 21 June onwards
These consolidated financial statements of the Group are the first set of financial statements for the newly
formed Group. The prior period has been presented as a continuation of the former Made.com Limited Group on
a consistent basis as if the group reorganisation had taken place at the start of the earliest period presented,
being 1 January 2020. The prior period comparatives are those of the former Made.com Limited Group since no
substantive economic changes have occurred. The consolidated reserves of the Group have been adjusted in
the current period following the share-for-share exchange to reflect the share capital of the Company with the
difference giving rise to a merger reserve.
Basis of preparation
The financial statements of the Group and Company for the year ended 31 December 2021 have been prepared
in accordance with UK adopted International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
The consolidated financial statements have been prepared on a historical cost basis except for derivative
financial instruments which are held at fair value. The financial information is presented in Pounds Sterling (£) and
all values are rounded to the nearest million (£m), except when otherwise indicated. The principal accounting
policies adopted in the preparation of this financial information are set out below. These policies have been
consistently applied for all years presented.
The impact of climate change has been taken into consideration when preparing the consolidated financial
statements, taking in to account the relevant disclosures in the strategic report including those made in
accordance with the recommendations of the Taskforce on Climate-related Financial Disclosure. For the years
ended 31 December 2021 and 31 December 2020, climate change has not had a material impact on the financial
statements for the Group.
171 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021
2. Principal accounting policies (continued)
Basis of consolidation
The Group financial statements consolidate the results of Made.com Group Plc and its subsidiary undertakings
for the year ended 31 December 2021.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and can affect those returns through its power over the investee. Specifically, the Group controls an
investee if and only if the Group has:
+ Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee)
+ Exposure, or rights, to variable returns from its involvement with the investee, and
+ The ability to use its power over the investee to affect its returns
The financial statements of subsidiaries are prepared for the same reporting years using consistent accounting
policies. All intercompany transactions and balances, including unrealised profits arising from intra-group
transactions, have been eliminated on consolidation.
Going concern
The financial statements have been prepared on a going concern basis. The Group has reported a loss of £27.8m
(2020: loss of £8.0m) for the year ended 31 December 2021 and is in a net asset position of £85.1m as at 31
December 2021 (2020: net asset position £0.0m), with a net current asset position of £51.2m (2020: net
current liability position of £(16.6)m). The Group has a cash balance of £107.2m at 31 December 2021 following
the successful IPO primary issue which raised £100m and the repayment of the Group’s loan with Silicon Valley
Bank of £10.0m in July 2021.
Since early 2020, the Group has been exposed to extraordinary market conditions due to the COVID-19
pandemic. During this period, despite disruptions to its supply chain, the Group has delivered ongoing strong
gross sales growth, broadly aligned to levels delivered through previous years. Supply chain disruptions have
meant that the Group sold product on extended lead-times for much of 2020 and 2021. This impacted
customer conversion which in turn reduced gross sales growth. The supply chain disruptions also impacted
revenue recognition timing, resulting in a high level of deferred income at 31 December 2021.
The directors have reviewed the Group’s forecast and projections for the period to June 2023 (the ‘Forecast
Period’), including their assessment of trading and associated cash flow forecasts and forecast liquidity.
In considering the appropriateness of adopting the going concern basis in preparing the financial statements the
directors have assessed the potential cash generation of the Group and considered a range of downside
scenarios. The scenarios were informed by a comprehensive review of the macroeconomic environment,
including the impact of the current invasion of Ukraine, and the Group’s experience of trading through the
pandemic over the last 2 years. The assumptions to which the forecasts are most sensitive are the expected
growth in sales and the continued freight cost pressures.
The Group’s base case forecast assumes an increase in gross sales, an increase in stock purchases, and therefore
reduction in lead times as high levels of product is delivered to the Group’s warehouses; a stabilisation in elevated
international freight cost levels; and margin benefits from pricing increases. Alternative scenarios considered
include:
+ ·a severe-but-plausible downside scenario representing a 23% reduction in forecast gross sales on the base
case and a 3ppt downgrade of gross margin, with no offsetting mitigating cost reduction actions, at which
point the Group would still continue to maintain liquidity at June 2023; and
+ a reverse stress test scenario that models a gross sales decline of 50% year-on-year followed by 0% gross
sales growth in 2023, which models a level of revenue not experienced since 2019. Additionally, an immediate
decline of 5.7ppt in gross margin from the base case is assumed, without cost mitigation actions. This stress-
test is considered remote and mitigating actions including pricing adjustments and discounting; product mix
changes and re-sourcing; and overhead and capital expenditure cost control would be taken before reaching
this point.
172 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
2. Principal accounting policies (continued)
Following the various scenarios and stress tests performed the Group have demonstrated that it would continue
to have sufficient cash headroom and liquidity to continue trading throughout the period to June 2023.
Consequently, the directors have concluded it is appropriate to continue to adopt the going concern basis in
preparing the consolidated financial statements for the year ended 31 December 2021.
Summary of significant accounting policies
a) Revenue recognition
The Group derives revenue from contracts with customers relating to online sales of furnishings and homewares.
The primary performance obligation is the delivery of furniture and homewares products to the location specified
in the online sales contract. This is the point at which control is considered to have passed to the customer, and
revenue from both the sale of the goods and the associated delivery service is recognised.
Revenue is measured net of discount vouchers used and VAT. At the point revenue is recognised, a provision is
also made for any future returns that may occur under the rights of return in the original contract, which is up to
30 days from receipt of goods. The provision for returns is calculated based on estimated return rates and then
subsequently adjusted as returns are incurred. An associated right of return asset is recognised in inventory,
representing the value of the products that are expected to be returned from the customer.
The difference in the timing between the receipt of cash from customers and the satisfaction of the
performance obligation gives rise to a contract liability recognised as deferred revenue on the balance sheet.
Deferred revenue represents cash collected for goods, net of discount vouchers used and VAT, for which delivery
to the customer has not yet been made.
b) Foreign currencies
The Group’s historical financial information is presented in Pounds Sterling (£), which is also the parent
company’s functional currency. For each entity, the Group determines the functional currency and items
included in the financial statements of each entity are measured using that functional currency.
(i) Transactions and Balances
Transactions in foreign currencies are initially recorded by the Group’s entities at the respective functional
currency rates at the date the transaction first qualifies for recognition. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the
reporting period.
(ii) Group
For presenting consolidated financial information, the assets and liabilities of the Group’s foreign operations are
expressed in Pounds Sterling (£) using exchange rates prevailing at the end of the reporting period. Income and
expenses are translated at the average exchange rate for the period. Exchange differences arising are recognised
in other comprehensive income (OCI) and are transferred to the foreign currency translation reserve.
c) Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from, or payable
to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted at the reporting date. Current income tax relating to items recognised directly in equity
is recognised in equity and not in the income statement. Management periodically evaluates positions taken in
the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where applicable.
Deferred tax
Deferred tax is provided using the liability method on all temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements with the following exceptions:
+ Where the temporary differences arise from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss;
+ In respect of taxable temporary differences associated with investments in subsidiaries when the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
173 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
2. Principal accounting policies (continued)
Deferred tax assets are recognised only to the extent that the directors consider it is probable that there will be
taxable profits against which the deductible temporary differences, and the carry forward of unused tax credits
or unused tax losses can be utilised.
Deferred tax assets and liabilities are measured on an undiscounted basis at tax rates that are expected to apply
in the period when the related asset is realised or liability is settled, based on tax rates enacted or substantively
enacted by the reporting date.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset, only if a legally enforceable right exists to set off deferred tax assets
against tax liabilities, the deferred taxes relate to the same taxation authority and that authority permits the
Group to make a single net payment.
Deferred tax is charged or credited to OCI if it relates to items that are charged or credited to OCI. Similarly,
deferred tax is charged or credited directly to equity if it relates to items that are credited or charged directly to
equity.
d) Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment
losses, if any. All repair and maintenance costs are recognised in profit or loss as incurred.
Depreciation is charged to write off the cost of assets, over their estimated useful lives, using the straight-line
method. Residual values and useful lives are reviewed at each period end, with the effect of any changes in
estimate accounted for on a prospective basis.
The following useful lives are used in the calculation of depreciation:
Fixtures & fittings – 3 years or the life of the lease (if less than 3 years)
Computer equipment – 3 years
Office equipment – 3 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined
as the difference between the disposal proceeds and the carrying amount of the asset and is recognised in the
income statement.
Assets in the course of construction are held at cost less recognised impairment loss. Depreciation is not
provided on these assets.
e) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Intangible assets are amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method for
an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Amortisation
of intangible assets is recognised in Administrative expenses in the income statement.
174 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
2. Principal accounting policies (continued)
Research and development costs
Research costs are expensed as incurred. Development expenditure on an individual project is recognised as an
intangible asset when the Group can demonstrate the technical feasibility of completing the intangible asset so
that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the
asset will generate future economic benefits, the availability of resources to complete the asset and the ability
to reliably measure the expenditure during development.
Subsequent measurement of intangible assets
Intangible assets with a finite life are amortised on a straight-line basis over their estimated useful lives as follows:
Domain name – 10 years
Website development costs – 3 years
Trade marks and IP – 3 years
f) Impairment of non-current financial assets
At each reporting date, the Group assesses the carrying amounts of its non-financial assets (including property,
plant and equipment, intangible assets and right-of-use assets) to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated to determine the extent of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
A CGU is defined by the smallest identifiable group of assets that generates cash inflows that are largely
independent of cash inflows from other assets or groups of assets.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. Impairment
losses are immediately recognised in the income statement.
g) Inventories
Inventories are valued at the lower of cost and net realisable value.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion
and costs necessary to make the sale. Where necessary, provision is made to reduce the carrying value to no less
than net realisable value, having regard to the nature and condition of the inventory.
h) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation considering the risks and uncertainties surrounding the obligation.
The timing of cash outflows are by their nature uncertain and are therefore best estimates. Provisions are
discounted if the time value of money is material to the provisions recognised.
Notes to the financial statements
for the year ended 31 December 2021 continued
175 MADE.COM Group Plc
Annual Report and Accounts 2021
2. Principal accounting policies (continued)
i) Adjusted EBITDA
EBITDA is defined as profit or loss before tax, interest, depreciation and amortisation. The Group defines
adjusted EBITDA as EBITDA adjusted to include the unwinding of the discount on lease liabilities and
depreciation of right-of-use assets to reflect the fact that lease related costs are key underlying business
operating expenses; exclude the impact of any share-based payment expenses to reflect the fact that this item
is not directly correlated to underlying business performance; and exclude the impact of any items deemed to
be exceptional in nature.
Adjusted EBITDA is a non-GAAP measure. It is used by the Directors and senior management to evaluate the
Group’s operating performance, generate future operating plans and make strategic decisions regarding the
allocation of capital. The exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating
performance comparisons on period-to-period bases. Accordingly, adjusted EBITDA is presented in the annual
report to provide additional information to understand and evaluate the Group’s operating performance.
Exceptional items
Exceptional items are defined as transactions that, in the opinion of the Directors, should be disclosed and
adjusted from EBITDA in order to provide a consistent and comparable view of the underlying business. This will
include those items that are one-off and material in nature and which have been incurred outside of the normal
business operations, including but not limited to restructuring and business transformation programmes and
fund-raising activities.
j) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Trade and other receivables
Trade and other receivables are classified as financial assets measured at amortised cost under IFRS 9 Financial
Instruments and recognised when it is probable that a future economic benefit will flow to the Group. Trade and
other receivables are carried at original invoice amount (deemed as the fair value by management) less any
provisions for impairment. Provisions for expected credit losses are made using the simplified approach in line
with IFRS 9. Provisions are recognised based on lifetime expected credit losses at each reporting date, with
reference to factors including previous historical credit loss experience and as well as forward looking factors
specific to the debtors and general economic conditions.
Trade and other payables and interest-bearing loans
Trade and other payables and interest-bearing loans are classified as ‘loans and payables’ under IFRS 9 Financial
Instruments and are recognised initially at fair value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method.
Cash
Cash in the statement of financial position comprises cash at banks and on hand.
Warrant instruments
Warrant instruments granted over shares as part of financing arrangements are classified as equity instruments
where the terms are on a fixed-for-fixed basis where a derivative that will be settled by the issuer exchanging a
fixed amount of cash or another financial asset for a fixed number of its own equity instruments. These
instruments are recognised at fair value on the date of issue and are not subsequently remeasured. The initial
carrying value of the associated interest-bearing loan is adjusted for the fair value of the warrant instruments
issued.
Financial assets and liabilities at fair value through profit or loss
These categories include derivative financial instruments entered into by the Group that are not designated as
hedging instruments in hedge relationships. Refer to note (q) for further details.
Notes to the financial statements
for the year ended 31 December 2021 continued
176 MADE.COM Group Plc
Annual Report and Accounts 2021
2. Principal accounting policies (continued)
k) Derecognition of financial instruments
A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires.
A financial asset is derecognised when the rights to receive cash flows from the asset have expired.
l) Fair value measurement
The fair values of financial instruments measured at amortised cost and derivative instruments recognised at fair
value are disclosed in Note 18.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
+ In the principal market for the asset or liability, or
+ In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
+ Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
+ Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable
+ Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
m) Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The
Group applies a single recognition and measurement approach for all leases except for short-term leases or
leases of low-value assets (less than £0.1m). The Group recognises lease liabilities representing the future value
of contractual lease payments and right-of-use assets representing the right to use the underlying assets.
(i) Right-of-use assets
The Group recognises a right-of-use asset at the commencement date of the lease, which is defined as the date
that the underlying asset is available for use.
A right-of-use asset is measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of the associated lease liability. The cost of a right-of-use asset includes the
value of the lease liability initially recognised; any lease payments made on or before the commencement date;
any initial direct costs incurred; less any lease incentives received. Right-of-use assets are depreciated on a
straight-line basis over the lease term. The right-of use asset is also subject to impairment. Refer to accounting
policy 2(f).
Notes to the financial statements
for the year ended 31 December 2021 continued
177 MADE.COM Group Plc
Annual Report and Accounts 2021
2. Principal accounting policies (continued)
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises a lease liability measured at the present value of
contractual payments to be made over the lease term. The lease payments include fixed payments less any lease
incentives receivable and variable lease payments that depend on an index or a rate. Variable lease payments that
do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the discount is unwound over the life of the lease, recognised as interest expense in the
income statement. As lease payments are made, the lease liability is reduced. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease
payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the underlying asset.
(iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to any of its short-term leases for property (i.e.,
those leases that have a lease term of 12 months or less from the commencement date). It also applies the lease
of low-value assets recognition exemption to leases of office equipment that are considered to be low value.
Lease payments on short-term leases and leases of low value assets are recognised as an expense on a straight-
line basis over the lease term.
n) Government grants
Government grants are recognised when there is a reasonable assurance that the grant will be received and all
attached conditions will be complied with. When the grant relates to an expense item, it is recognised as a
deduction to the amount reported through that expense line.
o) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current
classification. An asset is current when itis:
+ Expected to be realised or intended to be sold or consumed in the normal operating cycle
+ Held primarily for the purpose of trading
+ Expected to be realised within twelve months after the reporting period, or
+ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
A liability is current when:
+ It is expected to be settled in the normal operating cycle
+ It is held primarily for the purpose of trading
+ It is due to be settled within twelve months after the reporting period, or
+ There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities unless they are expected to
be realised within 12 months.
Notes to the financial statements
for the year ended 31 December 2021 continued
178 MADE.COM Group Plc
Annual Report and Accounts 2021
2. Principal accounting policies (continued)
p) Share based payments
Employees (including Directors) of the Group receive remuneration in the form of share-based payments
whereby employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using
an appropriate valuation model, such as the Black-Scholes or Monte-Carlo simulation models.
That cost is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense
recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Group’s best estimate of the number of equity instruments that
will ultimately vest. The income statement expense or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits
expense.
No expense is recognised for awards that do not ultimately vest, unless an element of the award contains
market-based performance conditions. The element of any award linked to a market-based performance
condition is assigned a fair value at the grant date which is fixed and treated as vesting irrespective of whether or
not the underlying performance condition is satisfied, provided that all other performance and/or service
conditions are satisfied.
q) Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency
risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets
when the fair value is positive and as financial liabilities when the fair value is negative.
For the purposes of hedge accounting, hedges are classified as:
+ Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an
unrecognised firm commitment;
+ Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a
particular risk associated with an unrecognised asset or liability or a highly probable forecast transaction or the
foreign currency risk in an unrecognised firm commitment; or
+ Hedges of a net investment in a foreign operation
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except
for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss
when the hedge item affects profit or loss.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to
which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the
hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction,
the nature of the risk being hedged and how the Group will assess the effectiveness of the hedging instrument’s
fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the
hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash
flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout
the financial reporting periods for which they were designated.
Hedge accounting is applied to hedges that meet this strict criteria. Currently the Group only has hedges that
meet the classification of cash flow hedges (refer to (r) Cash flow hedges for further details).
Notes to the financial statements
for the year ended 31 December 2021 continued
179 MADE.COM Group Plc
Annual Report and Accounts 2021
2. Principal accounting policies (continued)
r) Cash flow hedges
The Group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast
transactions and firm commitments. The effective portion of the gain or loss on the foreign currency contract is
recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the
income statement.
Amounts recognised in OCI are accounted for in line with the underlying hedged transaction. Realised gains
or losses on cash flow hedges linked to purchases of stock items are initially reclassed to inventory and then
recognised in the profit or loss at the point that the inventory is sold. Realised gains or losses on cash flow hedges
linked to sales in foreign currency are reclassed to the income statement when the revenue is recognised.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of
the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss previously recognised in OCI remains separately in equity until
the forecast transaction occurs or the foreign currency firm commitment is met.
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, management is required to make judgements, estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both current and future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of the assets and
liabilities within the next financial period, are described below. The Group based its assumptions and estimates
on parameters available when these financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances arising
beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
Revenue recognition
Revenue on the sale of products to customers is recognised at the point of delivery to the customer. An
element of estimation is applied at the point of dispatch from the warehouse based on average delivery days to
calculate the value of dispatched but undelivered revenue at the reporting date which is then recognised in
deferred revenue. A 1 day change in the average delivery days assumption for 2-man carriers would have a net
impact of £0.3m on the reported loss before tax for the year ended 31 December 2021.
Refund provision
Provisions for sales returns are estimated based on historical returns and are recorded in order to allocate them
to the same period in which the original revenue is recorded. These provisions are reviewed regularly and updated
to reflect management’s latest best estimates. Actual returns could vary from these estimates. An increase/
(decrease) of +1% in the estimated future returns rate applied to revenue dispatched in December 2021 would
result in a £0.5m increase/£0.5m decrease in the value of the returns provision calculated at 31 December 2021.
Refer to note 21 for further details of the sales returns provision.
Share option valuation
Both the One-off IPO Award and the PSP Award granted in 2021 included market performance conditions, which
required the use of a Monte-Carlo valuation model. Assumptions and estimates have been used to determine
the value of certain inputs into the Monte-Carlo model that would normally be determined with reference to
active market data, including share price volatility which has been estimated with reference to comparable
companies. Refer to note 24 for further details of inputs into the share option valuation for share options
granted in the year.
Notes to the financial statements
for the year ended 31 December 2021 continued
180 MADE.COM Group Plc
Annual Report and Accounts 2021
3. Critical accounting judgements and key sources of estimation uncertainty (continued)
Deferred tax asset
Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related
benefit through future taxable profits is probable. The assessment of the carrying value of the deferred tax asset
is based on management’s best estimate of the timing and amount of future taxable profits. Refer to note 11 for
further details of unused tax losses and deferred tax assets.
Capitalisation of shipping costs in inventory
The total cost of an item of inventory includes costs incurred in bringing the products to the point of sale.
Such on-costs, including freight and duties, are unable to be allocated to the value of inventory at an individual
unit (SKU) level. The value of shipping costs capitalised against inventory on hand and then subsequently
recognised in the income statement is calculated based on an estimation of the timing of the flow through of
inventory from intake to dispatch. Refer to note 15 for further details on Inventory.
Key judgements
In the process of applying the Group’s accounting policies, management has made the following judgements
which have had the most significant effect on the amounts recognised in the financial statements:
Capitalisation criteria for intangible assets
The Group capitalises costs relating to ongoing website and technology development and improvement projects
that underpin the business operations. Management applies judgements as to the nature of the future
economic benefits of the projects when assessing whether the costs incurred meet the criteria for
capitalisation. Further details can be found in note 13.
Determination of lease term of contracts with renewal and termination options
When the Group is a lessee, judgement is applied in determining the lease term where extension or termination
options exist. Management considers factors including, but not limited to, the period included in the initial
investment case; any costs associated with termination or extension options; and any other facts that may
create an economic incentive for either the Group or the landlord to exercise an option. During the year ended
31 December 2021 there were no extensions or terminations of existing leases. Further details can be found in
note 14.
Discount for lack of marketability
Certain participants in the PSP grant are subject to a hold order which restricts the ability to sell vested shares
within a 2 year period of vesting. Management has applied judgement when concluding that this restriction has
an impact on the future marketability of these shares. As a result of this conclusion, a discount to the IFRS 2 fair
value has been applied to options granted subject to this hold order. Refer to note 24 for further information on
the fair value calculations.
Share issuance costs
As part of the IPO, the Group issued new share capital. In line with the requirements of IAS 32 certain costs that
have been deemed to be directly related to the issuance of new share capital have been recognised in equity.
In order to determine the value to recognise in equity certain costs have been allocated using a systematic
estimation method with reference to the proportion of new share capital issued and total share capital.
Share issuance costs are presented within the Statement of Changes in Equity. The costs not deemed to be
directly related to issuing of share capital have been recognised in the income statement and are presented as
exceptional for the purposes of calculating Adjusted EBIDTA. Further details can be found in note 23.
Group reorganisation – carrying value of investment in parent company
On 21 June 2021, the Company acquired Made.com Limited. Since the acquisition was obtained via a share-for-
share exchange, the cost of the investment was not immediately apparent. Management has applied judgment
when determining that the cost of the investment is deemed to be equal to the value of the net assets of
Made.com Limited at the date of acquisition. This judgment is based on management’s assessment that in
substance the 3 criteria of IAS 27.13 have been met. Further details surrounding the Group reorganisation can be
found in note 2.
181 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
4. New standards, interpretations and amendments
There have been no new standards, amendments or interpretations issued and made effective for the financial
period commencing 1 January 2021 that have had a material impact on the financial statements of the Group.
As at 31 December 2021, there are no new and revised standards, amendments and interpretations have been
issued but not yet made effective that would be considered relevant or would have a material impact on the
Group’s results.
5. Segmental analysis
The Group’s operating segments are reported based on the financial information provided to the Board of
Directors. The Board is identified as the Chief Operating Decision Maker for the business and are responsible
for making strategic decisions. For strategic management decision making and reporting purposes, the Group is
organised into business units based on location of customers. The Group is considered to have two reportable
segments: UK operations and Continental Europe operations.
Revenues for both segments are generated from the online sale of furniture and homewares products.
Each market is served by separate websites, and there are no inter-segment transactions. The Group
operates a direct-to-consumer model and as such there is no reliance on a single customer or group of
major customers.
The Board assesses segment performance based on a regional measure of adjusted EBITDA (before the
allocation of central costs), which excludes the impact of exceptional costs and share based payment but
includes an allocation of lease related expenses (depreciation and interest). Total assets and liabilities, as well as
other specific disclosures in relation to segment assets and liabilities, are not disclosed as this information is not
provided by segment to the Chief Operating Decision Maker on a regular basis.
The total of non-current assets other than financial instruments and deferred tax assets located in the UK is
£36.3m (2020: £17.9m). The remaining £4.2m of non-current assets are located in other countries (2020:
£6.6m), with £2.6m located in Germany (2020: £3.7m).
182 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
5. Segmental analysis (continued)
UK Continental Europe Total
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
Revenue from customers in UK 192.3 128.0 – – 192.3 128.0
Revenue from customers in Europe – – 179.1 118.5 179.1 118.5
Total segment revenue 192.3 128.0 179.1 118.5 371.4 246.5
Other revenue
1
0.5 0.8
Total Revenue
371.9 247.3
Regional adjusted EBITDA
2
14.3 16.7 2.1 1.0 16.4 17.7
Central administration costs (30.7) (22.8)
Segment loss Adjusted EBITDA (14.3) (5.1)
Share based payment related costs (3.5) (0.6)
Depreciation of property plant and
equipment (2.4) (2.4)
Amortisation of intangible assets (4.8) (4.0)
Interest expense (1.1) (0.9)
Exceptional Items (5.3) (1.6)
Loss before tax (31.4) (14.6)
1 During the year ended 31 December 2021 the Group recognised £0.5m of other revenue relating to amounts receivable under the Research
and Development Expenditure Credit (RDEC) scheme (2020: £0.8m).
2 Included within regional adjusted EBIDTA is £3.0 (2020: £2.5m) of lease depreciation allocated to UK operations and £1.3 (2020: £1.4m) of
lease depreciation allocated to Continental Europe operations, as well as £0.4m (2020: £0.3m) of lease interest expense allocated to UK
operations and £0.1 (2020: £0.2m) of lease interest expense allocated to Continental Europe operations.
6. Operating loss
Operating loss includes the following items, classified within distribution and administrative expenses:
Notes
2021
£m
2020
£m
Depreciation of property, plant and equipment 12 2.4 2.4
Amortisation of intangible assets 13 4.8 4.0
Depreciation of right of use assets
1
14 4.3 3.9
Minimum lease payments recognised as an operating lease expense – 0.1
Net foreign exchange loss 2.0 0.5
1 £1.8mofdepreciationofrightofuseassetsonwarehouseleasesinclassifiedwithindistributionexpenses(2020:£1.3m).Theremaining
£2.5mofdepreciationofrightofuseassetsisclassifiedwithinadministrativeexpenses(2020:£2.6m).
183 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
7. Adjusted EBITDA
The following table sets out the reconciliation of Adjusted EBITDA to operating loss:
Group
2021
£m
Group
2020
£m
Loss before tax (31.4) (14.6)
Depreciation of property, plant and equipment 2.4 2.4
Amortisation of intangible assets 4.8 4.0
Depreciation of right of use assets 4.3 3.9
Finance costs 1.6 1.4
EBITDA (18.3) (2.9)
Adjustments for:
Depreciation of right of use assets (4.3) (3.9)
Interest expense on lease liabilities (0.5) (0.5)
Share based payment related costs 3.5 0.6
Exceptional items
Fundraising 5.3 0.5
Restructuring – 0.9
Supply chain transformation – 0.2
Adjusted EBITDA loss (14.3) (5.1)
Exceptional items
In the year ended 31 December 2021 costs of £5.3m relating to the IPO transaction have been incurred, including
professional fees and one-off bonuses.
In the year ended 31 December 2020 £0.2m of additional costs related to the 2019 supply chain transformation
activities have been recognised; £0.5m of costs have been incurred relating to fundraising activities; and £0.9m
of costs have been incurred relating to restructuring activities.
8. Finance costs
2021
£m
2020
£m
Finance costs:
Bank interest on interest-bearing loans and borrowings (1.1) (0.9)
Interest expense on lease liabilities (0.5) (0.5)
Total finance costs (1.6) (1.4)
184 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
9. Employee benefits expense
Total employee related costs incurred during the year include the cost of Directors. Further details regarding
Directors’ remuneration are disclosed in the Directors Remuneration Report on pages 114-147 and form part of
these financial statements. Key management remuneration is disclosed in note 27.
2021
£m
2020
£m
Wages and salaries 23.3 20.8
Social security costs 2.8 2.6
Pension contributions
0.7 0.5
Share based payment related costs 3.5 0.6
Total employee benefits expense
30.3 24.5
Included with wages and salaries in the year ended 31 December 2020 is an amount of £0.4m relating to
government grants received through Covid-19 specific local government assistance schemes including the
Coronavirus Job Retention Scheme in the UK. There are no unfulfilled conditions or contingencies attached to
these grants. No government grants were received in the year ended 31 December 2021.
Average monthly number of employees during the year was as follows:
2021 2020
Administration 290 262
Marketing and products 323 306
Technical 60 61
673 629
10. Auditors’ remuneration
The Group paid the following amounts to its auditor in respect of the audit of the financial statements and for
other services provided to the Group:
2021
£m
2020
£m
For the statutory audit of parent company 0.4 0.2
For the statutory audit of consolidated financial statements 0.0 –
Total audit services 0.4 0.2
Audit related assurance services – half year review
0.1 –
Total assurance services
0.5 0.2
Services relating to the reporting accountant
0.9 –
Services relating to financial due diligence
– 0.2
Total non-audit related services 0.9 0.2
1.4 0.4
185 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
11. Income taxes
(a) Income tax recognised in the income statement:
2021
£m
2020
£m
Current income tax:
Foreign tax paid 0.2 0.1
Total current tax 0.2 0.1
Deferred tax:
Relating to:
Origination and reversal of temporary differences – (6.1)
Effect of changes in the tax rate (3.8) (0.6)
Total deferred tax (3.8) (6.7)
Total income tax credit reported in the income statement (3.6) (6.6)
2021
£m
2020
£m
Deferred tax expense/(credit) 1.2 (0.4)
Total income tax charged/(credited) to other comprehensive income 1.2 (0.4)
Following the Chancellor’s budget announcement on 3 March 2021, the UK headline corporation tax rate is
expected to increase on 1 April 2023 from 19% to 25%. Finance Bill 2021 was substantively enacted on
24 May 2021 and received Royal Assent on 10 June 2021. Consequently, deferred tax balances as at
31 December 2021 have been measured at 25%.
(b) Reconciliation of total tax expense
A reconciliation between tax expense and the accounting profit using the UK’s domestic tax rate has been
presented for the year ended 31 December 2021 as follows:
2021
£m
2020
£m
Loss before tax (31.4) (14.6)
Loss before tax multiplied by the standard rate of corporation tax in the UK of 19%
(2020: 19%) (6.0) (2.8)
Permanent differences
0.2 0.2
Non-deductible expenses 1.0 –
Share options exercised (7.2) (0.1)
Foreign tax credit 0.2 0.1
R&D tax credit 0.1 0.1
Deferred tax not recognised 11.9 –
Recognition of deferred tax on tax losses previously unrecognised – (3.1)
Tax rate changes (3.8) (1.0)
Total tax credit reported in the consolidated income statement (3.6) (6.6)
(c) Reconciliation of deferred tax assets
2021
£m
2020
£m
As at 1 January (12.2) (5.1)
Deferred tax credited to the income statement
(3.8) (6.7)
Deferred tax charged/(credited) to other comprehensive income 1.2 (0.4)
As at 31 December (14.8) (12.2)
186 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
11. Income taxes (continued)
The deferred tax (asset)/liability balance relates to the following:
2021
£m
2020
£m
Capital allowances 1.1 0.8
Derivative instruments
(0.1) (1.0)
Unused tax losses (15.8) (12.0)
(14.8) (12.2)
Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related
benefit through future taxable profits is estimated to be probable. The Group has recognised a deferred tax
asset of £14.8m at 31 December 2021 (2020: £12.2m) relating to unused tax losses, supported by the latest
board approved 5 year plan that forecasts future taxable profits against which the deferred tax asset will be
utilised over the next 3 years. The Group has elected not to recognise any deferred tax assets relating to
employee share options. At 31 December 2021, the Group has £60.0m of unrecognized taxable losses (2020:
£nil). The value of the deductible temporary difference on vested but unexercised options at 31 December 2021
is £13.6m (2020: £20.5m).
12. Property, plant and equipment
Group
Assets under
construction
£m
Fixtures &
Fittings
£m
Computer
equipment
£m
Office
equipment
£m
Total
£m
Cost:
At 1 January 2020 – 7.7 1.6 0.5 9.8
Additions – 0.5 0.2 – 0.7
At 31 December 2020 – 8.2 1.8 0.5 10.5
Additions 2.4 4.1 0.6 0.0 7.1
Disposals – (0.6) – – (0.6)
At 31 December 2021 2.4 11.7 2.4 0.5 17.0
Depreciation:
At 1 January 2020 – 3.4 1.0 0.3 4.7
Charge for the year – 2.0 0.3 0.1 2.4
At 31 December 2020 – 5.4 1.3 0.4 7.1
Charge for the year – 1.9 0.4 0.1 2.4
Disposals – (0.6) – – (0.6)
At 31 December 2021 – 6.7 1.7 0.5 8.9
Net book value:
At 31 December 2021 2.4 5.0 0.7 0.0 8.1
At 31 December 2020 – 2.8 0.5 0.1 3.4
Assets under construction of £2.4m (2020: £nil) were recognised in the year ended 31 December 2021 relating
to warehouse expansion and showroom improvements.
187 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
13. Intangible assets
Group
Domain name
£m
Website
development
costs
£m
Trademarks and
IP assets
£m
Total
£m
Cost:
At 1 January 2020 0.1 16.9 0.4 17.4
Additions
– 4.9 0.1 5.0
At 31 December 2020 0.1 21.8 0.5 22.4
Additions – 6.5 0.1 6.6
At 31 December 2021 0.1 28.3 0.6 29.0
Amortisation:
At 1 January 2020 0.1 9.3 0.1 9.5
Charge for the year – 3.9 0.1 4.0
At 31 December 2020 0.1 13.2 0.2 13.5
Charge for the year – 4.7 0.1 4.8
At 31 December 2021 0.1 17.9 0.3 18.3
Net Book Value:
At 31 December 2021 – 10.4 0.3 10.7
At 31 December 2010 – 8.6 0.3 8.9
On 17 January 2020 the Group entered into an agreement with Silicon Valley Bank for a revolving credit facility of
£10m. The terms of this agreement include a pledge on the Group’s IP and Trademark assets (note 18).
14. Leases
The Group has entered into a number of lease contracts, as a lessee for properties including offices, showrooms
and warehouses. These lease contracts generally have terms between 3 to 11 years. Lease contracts with terms
of less than 12 months are classified as short term. The value of short term leases recognised as an expense in
the income statement in the year ended 31 December 2021 was £nil (2020: £0.1m).
Set out below are the carrying amounts of the right-of-use assets relating to these lease contracts that have
been recognised in the financial statements for the years ended 31 December 2021 and 31 December 2020,
including the movements during the year:
Group
Warehouses
£m
Offices
£m
Showrooms
£m
Total
£m
At 1 January 2020 5.3 3.5 6.2 15.0
Additions 0.2 0.6 – 0.8
Depreciation expense
(1.3) (1.1) (1.5) (3.9)
Foreign exchange – 0.1 0.3 0.4
At 1 January 2021 4.2 3.1 5.0 12.3
Additions
13.4 0.8 – 14.2
Depreciation expense (1.8) (1.2) (1.3) (4.3)
Foreign exchange – – (0.4) (0.4)
Remeasurement – – (0.1) (0.1)
At 31 December 2021 15.8 2.7 3.2 21.7
188 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
14. Leases (continued)
Set out below are the carrying amounts of the lease liabilities relating to these lease contracts that have been
recognised in the financial statements for the years ended 31 December 2021 and 31 December 2020, including
the movements during the year:
Group
Warehouses
£m
Offices
£m
Showrooms
£m
Total
£m
At 1 January 2020 5.7 4.2 6.9 16.8
Additions 0.1 0.6 – 0.7
Lease payment
(1.1) (1.2) (1.8) (4.1)
Interest expense 0.1 0.1 0.3 0.5
Foreign exchange – 0.1 0.2 0.3
At 1 January 2021
4.8 3.8 5.6 14.2
Additions 13.2 0.7 – 13.9
Lease payment (1.8) (1.6) (1.7) (5.1)
Interest expense 0.3 0.1 0.1 0.5
Foreign exchange (0.1) (0.3) (0.4)
Remeasurement 0.3 – – 0.3
At 31 December 2021 16.8 2.9 3.7 23.4
At 31 December 2021
Current 1.1 1.4 1.2 3.7
Non-Current 15.7 1.5 2.5 19.7
Total 16.8 2.9 3.7 23.4
At 31 December 2020
Current 1.8 1.1 1.6 4.5
Non-Current 3.0 2.7 4.0 9.7
Total 4.8 3.8 5.6 14.2
In the year ended 31 December lease additions of £13.4m were recognised in relation to warehousing expansion
in the UK, and £0.8m relating to studio space within the UK. The total amount paid for leases (including short
term leases and lease start-up costs) in the year ended 31 December 2021 was £5.1m (2020: £4.2m). Several of
the leases in the Group’s portfolio include extension or termination options. Management applies judgement
in assessing the likelihood of exercising any such options on a lease-by-lease basis. At 31 December 2021 the
undiscounted potential future payments relating to periods beyond any break options that have been assumed
is £12.6m (2020: £12.8m). Remeasurements applied in the year ended 31 December 2021 relate to rent
concessions granted by landlords as a result of the Covid-19 pandemic, and have been accounted for in
accordance with the Covid-19 related practical expedient amendment to IFRS 16. The maturity profile of lease
liabilities are disclosed within note 26.
15. Inventories
Group
2021
£m
2020
£m
Finished goods 63.0 21.5
63.0 21.5
The cost of inventories recognised as an expense are £193.9 (2020: £111.7m). There has been no material stock
write offs in the period (2020: £nil). Included within the inventory balance reported at 31 December 2021 is a
‘right to return’ asset of £1.2m (2020: £0.7m) associated with the provision for future returns recognised within
deferred revenue (note 21).
On 17th January 2020, the Group entered into an agreement with Silicon Valley Bank for a revolving credit facility
of £10m. The terms of this agreement include a pledge on the Group’s inventory on hand (note 18).
189 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
16. Trade and other receivables
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Trade receivables 0.1 0.2 – –
Other receivables
11.8 10.6 – –
Amounts owed by subsidiary undertakings
– – 19.7 –
Prepayments and accrued income 4.1 1.7 0.8 –
Tax debtor 0.5 0.7 – –
16.5 13.2 20.5 –
Included within Other Receivables is £11.3m of amounts due from payment providers which are expected to
be settled within 5 working days (2020: £6.2m). Trade and other receivables are non-interest bearing and are
generally on terms of 7 to 30 days. As at 31 December 2021, £nil of trade receivables were impaired and fully
provided for (2020: £nil).
Amounts owed by subsidiary undertakings relate to amounts loaned by Made.com Group plc to its subsidiary
undertaking, Made.com Design Limited and are non-interest bearing. Amounts owed by subsidiary undertakings
are receivable on demand
Trade receivables are denominated in the following currencies:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Pound Sterling 0.0 0.1 – –
Euros 0.1 0.1 – –
0.1 0.2 – –
The aging analysis of trade receivables is as follows:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Neither past due nor impaired 0.1 – – –
Past due but not impaired:
0 – 30 days – 0.1 – –
30 – 60 days – – – –
Greater than 60 days – 0.1 – –
0.1 0.2 – –
The Group continually assesses the recoverability of trade receivables and the level of provisioning required.
190 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
17. Cash
For the purposes of the statement of cash flows, cash includes cash on hand and in banks. Cash at banks earns
interest at floating rates based on daily deposit rates. Cash at the end of the financial year as shown in the
statement of cash flows is equal to the related items in the statement of financial position as follows:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Cash at banks and on hand 107.2 50.4 82.4 –
Cash is denominated in the following currencies:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
GBP 104.9 37.3 82.4 –
EUR
2.1 10.3 – –
Other foreign currencies 0.2 2.8 – –
Total 107.2 50.4 82.4 –
18. Financial assets and financial liabilities
Group and Company
Interest-bearing loans and borrowings
Revolving credit facility
On 17th January 2020, the Group entered into an agreement with Silicon Valley Bank for a revolving credit
facility of £10m. The Group drew down £10m against this facility on the 13 March 2020. This was fully repaid on
14 May 2020 and replaced with a term loan.
The terms of the facility include a fixed and floating charge over the Group’s assets, including available inventory
(refer note 15) and IP and Trademark assets (refer note 13). Interest on any drawn amounts was charged at the
higher of 5.25% or LIBOR + 4.50%. Any undrawn amounts attract a fee of 1% p.a.
The facility was undrawn at 31 December 2021 (2020: undrawn) and the Group was in compliance with the
financial and other covenants within this facility throughout the financial year, including minimum liquidity
requirements.
The facility was available until the 17 January 2022 and was not renewed.
Term loan
On 14 May 2020, the Group entered into a loan agreement with Silicon Valley Bank for a term loan of £10m.
The term loan had a floating rate of interest of 9.75% and was secured by a fixed and floating charge over
the Group’s assets, including available inventory (refer note 15) and IP and Trademark assets (refer note 13).
This security interest in the Group’s assets was enforceable upon a default event, including a failure to repay or
failure to comply with the agreed covenants. In addition, the Group issued warrant instruments over 43,500
ordinary shares in the ultimate parent to the lenders. The warrants were issued with an exercise price of £0.001
per share and are valid for 10 years from grant date. The fair value of the warrant instruments is £0.2m, which has
been recognised in equity and offset against the initial proceeds of the loan. Refer to note 23 for further details
relating to warrants. The loan was held at amortised cost.
On 5 July 2021 the loan was repaid in full. The Group was in compliance with the financial and other covenants
within this facility throughout the term of the loan, including minimum liquidity requirements and revenue growth
targets.
Foreign exchange contracts
The group uses forward foreign exchange contracts to manage its transaction exposures incurred on purchases
of inventory in USD and revenues earned in EUR. The foreign exchange contracts are designated as cash flow
hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions,
generally from one to twelve months.
191 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
18. Financial assets and financial liabilities (continued)
The Group enters into derivative financial instruments with various counterparties, principally financial institutions
with investment grade credit ratings. Foreign exchange contracts are valued using valuation techniques, which
employs the use of market observable inputs. The most frequently applied valuation techniques include forward
pricing and swap models, using present value calculations. The models incorporate various inputs including the
credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective
currencies, currency basis spreads between the respective currencies and forward rate curves of the underlying
commodity. All derivative contracts are fully cash collateralised, thereby eliminating both counterparty and the
Group’s own non-performance risk. As at 31 December 2021, the marked-to-market value of derivative liability
position is net of a credit valuation adjustment attributable to derivative counterparty default risk. Derivative
contracts are categorised as level 2 within the fair value hierarchy.
Hedge ineffectiveness can arise from differences in the timing of the cash flows of the hedged items and the
hedging instruments; the counterparties’ credit risk differently impacting the fair value movements of the
hedging instruments and hedged items; and changes to the forecasted amount of cash flows of hedged items
and hedging instruments.
During the year ended 31 December 2021, the Group recognised realised losses on cashflow hedges of £6.2m in
Cost of Sales (2020: realised losses of £0.9m) and recognised realised gains of £2.9m in revenue (2020: £1.5m).
At 31 December 2021 net gains on cashflow hedges of £2.2m have been recognised in the cashflow hedge
reserve (2020: net losses £4.8m). At 31 December 2021 realised gains on cashflow hedges of £0.3m have been
recognised in inventory (2020: £1.1m losses). The fair value of the underlying hedged items is equal to the fair
value of the cash flow hedges at 31 December 2021 and 31 December 2020. There has been no hedge
ineffectiveness during the period (2020: none).
The net fair value of forward foreign exchange contracts recognised in the statement of financial position was a
current liability of £1.7m (2020: current liability of £4.8m). Cashflows relating to these contracts will occur during
the year ended 31 December 2022., and gains or losses will be recognised in the same period. The table below
illustrates the maturity profile of the notional value of the outstanding foreign exchange contracts, which are to
be settled gross:
Maturity
Less than
1 month
1 to 3
months
3 to 6
months
6 to 9
months
9 to 12
months Total
As at 31 December 2021
USD:GBP foreign exchange contracts
(hedging highly probable forecast purchases)
Notional Amount (£m) – cash inflows 14.5 29.6 41.3 21.9 – 107.3
Average forward rate (GBP:USD) 1.38 1.37 1.36 1.37 – 1.37
EUR:GBP foreign exchange contracts
(hedging highly probable forecast sales)
Notional Amount (£m) – cash outflows (7.3) (11.1) (18.7) (11.5) (7.6) (56.2)
Average forward rate (GBP:EUR) 1.16 1.17 1.17 1.17 1.17 1.17
As at 31 December 2020
USD:GBP foreign exchange contracts
(hedging highly probable forecast purchases)
Notional Amount (£m) – cash inflows 11.9 19.6 27.3 25.9 23.2 107.9
Average forward rate (GBP:USD) 1.30 1.30 1.30 1.29 1.29 1.30
EUR:GBP foreign exchange contracts
(hedging highly probable forecast sales)
Notional Amount (£m) – cash outflows (7.0) (6.1) (10.8) (16.6) (16.4) (56.9)
Average forward rate (GBP:EUR) 1.13 1.11 1.11 1.08 1.08 1.10
The table below reports the notional amount of the foreign currency cash flow hedges as well as the impact of
the hedging instruments on the Group’s financial position:
192 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
18. Financial assets and financial liabilities (continued)
2021 2020
Notional
amount
£m
Carrying
amount
£m
Notional
amount
£m
Carrying
amount
£m
Derivative Assets
USD:GBP foreign exchange contracts
80.0 1.4 – –
EUR:GBP foreign exchange contracts 23.2 0.5 42.9 1.2
Total 1.9 1.2
Derivative liabilities
USD:GBP foreign exchange contracts (27.3) (0.1) (107.9) (5.7)
EUR:GBP foreign exchange contracts (33.0) (0.1) (14.0) (0.3)
Total (0.2) (6.0)
19. Trade and other payables
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Current
Trade payables 38.4 17.5 0.3 –
Taxation and social security 14.5 10.7 – –
Accruals 24.7 11.4 0.3 –
77.6 39.6 0.6 –
Amounts included within taxation and social security represent current VAT amounts payable.
20. Provisions
Group
£m
At 1 January 2021 1.3
Addition during the year 0.9
Utilised/released during the year –
At 31 December 2021 2.2
Dilapidations provision
At 31 December 2021 the Group recognised provisions of £2.2m (2020: £1.3m) relating to contractual
restoration obligations arising on lease contracts, known as Dilapidation Provisions. Additional dilapidation
provisions have been taken up in the current year to recognise future obligations under the lease contracts for
the Group’s office, warehouse and showroom premises in the UK and Europe. The provisions are expected to be
utilised within 2 to 11 years (2020: 2 to 8 years).
21. Deferred revenue
The Group begins to actively market and sell its products to customers when they are in the manufacturing
and shipping phase. This can typically be up to 12 weeks prior to delivery to the customer, although recent
short-term supply chain pressures have meant that this can be up to 18 weeks. Customers are entitled to
cancel orders free of charge prior to delivery and can return them up to 30 days after delivery. Revenue is
recognised at the point that the products are delivered to the customer. The lead time between the customer
placing the sale order and the delivery of the order creates a deferred revenue contractual liability. Revenues
of £48.5m (net of cancellations) were recognised in the year ended 31 December 2021 that were reported as
deferred revenue at the beginning of the year (2020: £19.6m). The carrying balance of customer orders not yet
fulfilled at 31 December 2021 is £55.9m (2020: £52.8m) which is expected to be recognised net of cancellations
within 1 to 6 months of the year end (2020: 1 to 6 months), in line with prevailing lead times. Included within this
balance is an amount of £2.6m relating to a provision for future returns (2020: £1.4m).
193 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
22. Earnings per share
Basic earnings per share is calculated by dividing the net loss for the period attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares in issue during the period. As the
financial statements have been presented as a continuation of the existing group, the number of shares taken
as being in issue for both the current and preceding periods are deemed to be the number of ordinary shares
issued by Made.com Group Plc to acquire Made.com Limited in the share for share exchange (see note 23).
The weighted average number of shares is then adjusted to reflect changes in the number of ordinary shares
issued in Made.com Limited that occurred during the previous period.
Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable to ordinary equity
holders of the parent by the weighted average number of shares outstanding during the period plus the weighted
average number of shares that would be issued on conversion of any dilutive potential ordinary shares into
ordinary shares. The outstanding share options are anti-dilutive for the periods presented.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
2021 2020
Loss attributable to ordinary equity holders of the Company (£m) (27.8) (8.0)
Weighted average number of shares 350,673,282 305,622,888
Basic and diluted loss per share (pence per share) (7.9)p (2.6)p
There have been no other transactions involving actual ordinary shares or potential ordinary shares between the
reporting date and the date of authorisation of this financial information.
23. Issued share capital and reserves
Share Capital
Authorised, called up and fully paid share capital
31 December 2021
Nominal value £0.0001
31 December 2020
1
Nominal value £0.001
No. of shares £m No. £m
Ordinary shares 390,139,698 – 7,257,838 –
Series A preference shares – – 3,683,855 –
Series B-1 preference shares – – 4,211,329 –
Series B-2 preference shares – – 1,299,720 –
Series C-1 preferences shares – – 3,865,979 –
Series C-2 preference shares – – 6,060,606 –
Series C-3 preference shares – – 673,651 –
Series C-4 preference shares – – 3,653,955 –
Growth shares – – 1,184,675 –
390,139,698 – 31,891,608 –
1 The share capital presented at 31 December 2021 is Made.com Limited.
194 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
23. Issued share capital and reserves (continued)
The movements in the share capital for the year ended 31 December 2021 were:
No. of shares £m
As at 1 January 2021 31,891,608 –
Warrant options exercised 43,500 –
Conversion of growth shares (221,734) –
Made.com Limited (31,713,374) –
Made.com Group Plc 31,712,373 –
Issued on incorporation of Made.com Group plc 1,001 –
Capital reorganisation (1:10 split of ordinary shares) 285,420,357 –
Shares issued upon IPO 50,000,000 –
Share options exercised 23,005,968 –
Preference share redeemed (1) –
As at 31 December 2021 390,139,698 –
On 20 April 2021, Made.com Group Plc was incorporated with an issued share capital of 1,000 ordinary shares
with a nominal value of £0.001 and one redeemable preference share with a nominal value of £49,999.
On 10 June 2021, Made.com Limited issued 43,500 ordinary shares following the exercise of the warrant options
by the option holders, with an exercise price of £0.001 per share.
On 21 June 2021, the Company issued 31,712,373 ordinary shares to the shareholders of Made.com Limited as
consideration for the Company’s acquisition of the entire shareholding of Made.com Limited via a share-for-
share exchange. Under the terms of the exchange all ordinary shares, preference shares and growth shares in
Made.com Limited were exchanged for ordinary shares in Made.com Group Plc. Under the terms of the
reorganisation agreement governing the share-for-share exchange, 1,184,675 growth shares were acquired by the
Company in exchange for the issue of 962,941 ordinary shares to the growth shareholders. The difference of
221,734 between the number of shares acquired and the number of shares issued reflects the application of the
hurdle price for the deemed conversion of the growth shares, in accordance with the reorganisation agreement
and the articles of association of Made.com Limited.
Additionally on 21 June 2021, once the share-for-share exchange was completed, the Company carried out a
reorganisation of its share capital. Under the capital reorganisation each ordinary share with a nominal value of
£0.001 was split into 10 ordinary shares with a nominal value of £0.0001 (a 1:10 split). This was done to facilitate
the listing on the Premium Segment of the Official List of the Financial Conduct Authority and to trade on the
London Stock Exchange Main Market for listed securities.
Upon listing, the Company raised £100m by issuing 50,000,000 new ordinary shares with a nominal value of
£0.0001 and a share price of £2.00 as part of the initial public offering, with £5,000 being recognised in share
capital and the remainder in share premium. Costs of £3.1m deemed to be directly attributable to the issuance
of this share capital, including underwriting and professional fees, were also recognised in Share Premium in the
year ended 31 December 2021.
In addition, 23,005,968 new shares have been issued relating to the exercise of employee share options and the
redemption of the redeemable preference share during the year.
On 30 November 2021 Made.com Group Plc obtain high court approval to enact a capital reduction by cancelling
the amount held in the Share Premium account to establish distributable reserves. As a result £105.0m was
transferred out from Share Premium in to Retained Earnings on 15 December 2021.
Nature and purpose of reserves
Foreign currency translation reserve
Exchange differences relating to the translation from the functional currencies of the Group’s foreign subsidiaries
into Pounds Sterling are accounted for by entries made directly to the foreign currency translation reserve. Note
that is reserve arises in the consolidated Group only, not in the Company.
195 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
23. Issued share capital and reserves (continued)
Hedging reserve
The hedging reserve is used to recognise the unrealised gains and losses on cash flow hedges held by the Group
that qualify for hedge accounting.
Merger reserve
Included within the Merger Reserve is an amount of £62.2m arising on the share-for-share acquisition of
Made.com Limited by Made.com Group plc in June 2021, offset by an existing Merger Reserve of £(20.2)m held
in Made.com Limited.
Reallocation of reserves
In the year ended 31 December 2020, an amount of £0.9m of costs previously recognised through the P&L has
been reallocated from retained earnings to the Share Premium account to better reflect the nature of these
costs.
Dividends
No dividends have been paid or proposed during the year ended 31 December 2021 (2020: nil)
24. Share-based payments
Under the General Employee Share-option Plan (GESP), the Group, at its discretion, may grant share options over
ordinary shares of the ultimate parent to employees and directors. The options are granted as equity-settled.
The fair value of share options granted is estimated at the date of grant using an appropriate valuation model.
The expense associated with issuing these options is pushed down from the ultimate parent company to the
entity in which the employees are employed. The expense is recognised in profit or loss in the company with a
corresponding increase in capital contribution received from the parent.
The key inputs used to determine the fair value include the share price at the date of grant, which is calculated
with reference to the share price at the date of grant; any exercise price attached to the option; the vesting
period of the award; an appropriate risk free rate; the impact of any dividend rights attached to the grant; and an
expected share price volatility, estimated with reference to published volatility rates of publicly listed
comparable companies.
Impact of the Group reorganisation on employee share options
On 21 June 2021, Made.com Group Plc acquired Made.com Limited via a share-for-share exchange. As part of
this exchange, all existing unvested and unexercised options were also transferred to Made.com Group Plc on a
one-for-one basis. It was assessed that the fair value of the unvested schemes on 21 June 2021 immediately
prior to and immediately after the transfer remained unchanged. Following the transfer, Made.com Group Plc
undertook a reorganisation of their share capital to divide each 1 ordinary share of £0.001 into 10 ordinary shares
of £0.0001. Any unvested and unexercised options were similarly divided, such that each 1 option outstanding
was divided into 10 options and any exercise price associated was divided by a factor of 10.
Current year grants
2021 All Employee Grant
On 1 January 2021, the Group granted 349,200 options over shares in Made.com Limited to employees under
a one-off company-wide grant (the ‘‘All Employee Grant’’). Under the terms of the grant, all employees were
granted 600 options each with an exercise price of £10.56. A small number of these options (36,000) were
granted as phantom options and will be accounted for as cash-settled. The remaining options (313,200)
are accounted for as equity settled. The options will vest in 3 equal tranches over a 3 year vesting period.
No performance conditions other than continued service are attached to the options. On 21 June 2021,
following the Group’s successful IPO, an accelerated vesting profile was triggered in line with the terms of the
grant. 50% of the options vested on 21 June 2021; of the remaining 50%, one-third will vest at the second
anniversary of the grant date and the remainder will vest at the third anniversary of the grant date. On group
reorganisation the options were transferred to the new parent company, Made.com Group plc.
196 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
24. Share-based payments (continued)
The fair values calculated for the options and the relevant inputs into the Black-Scholes models were:
Exercise price
£10.56
Fair value (£) £6.31
Share price at grant date (£) £14.32
Expected volatility (%) 50%
Risk-free interest rate (%) 0.14%
Expected life of share options (periods) 3
Dividend yield (%) N/A
2021 Management Grant
In addition to the All Employee Grant, on 1 January 2021, the Group granted 70,000 options over shares in
Made.com Limited to senior management. 46,667 options were granted with an exercise price of £10.16.
23,333 options were granted with an exercise price of £14.51. The options will vest in 12 equal tranches over a
3 year vesting period. No performance conditions other than continued service are attached to the options. On
group reorganisation the options were transferred to the new parent company, Made.com Group plc.
The fair values calculated for the options and the relevant inputs into the Black-Scholes models were:
Exercise price
£10.16
Exercise price
£14.51
Fair value (£) £6.50 £4.76
Share price at grant date (£) £14.32 £14.32
Expected volatility (%) 50% 50%
Risk-free interest rate (%) 0.14% 0.14%
Expected life of share options (periods) 3 3
Dividend yield (%) N/A N/A
IPO Awards
On 21 June 2021, the Group granted 3,001,000 options over shares in Made.com Group plc to the Executive
Leadership Team with an Award Price of £nil. Subject to the specific performance conditions, 50% of the
awards will vest on the second anniversary of the grant date and the remaining 50% of the awards will vest on
the third anniversary of the grant date. Under the plan rules, continued employment over the vesting period
is a requirement. In addition, one third of the award will vest (in line with the vesting schedule) subject to the
achievement of at least 20% Total Shareholder Return (TSR) growth (calculated on a compound annual growth
(“CAGR”) basis), measured at both vesting dates (the TSR Performance Condition); and one third of the award
will vest (in line with the vesting schedule) subject to the achievement of at least 25% Sales growth (calculated
on a CAGR basis), measured at both vesting dates (the Sales Growth Performance Target).
The fair value calculated for the elements of the award subject to TSR Performance Condition is £0.87 for the
first tranche and £0.76 for the second tranche. These valuations have been determined using the Monte Carlo
valuation method. The fair value calculated for the remaining elements of the award is £2.00 and has been
determined using the Black-Scholes model. The inputs into the Black-Scholes and Monte Carlo models were:
Monte Carlo
– TSR Tranche 1
Monte Carlo
– TSR Tranche 2 Black Scholes
Fair value (£) £0.87 £0.76 £2.00
Share price at grant date (£) £2.00 £2.00 £2.00
Expected volatility (%) 50% 45% 45% - 50%
Risk-free interest rate (%) 0.13% 0.22% 0.13%
- 0.22%
Expected life of share options (periods) 2 3 2 - 3
Dividend yield (%) 0.0% 0.0% 0.0%
197 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
24. Share-based payments (continued)
2021 PSP Grant
On 12 July 2021, the Group granted 3,142,915 options over shares in Made.com Group plc to select members of
senior management with an exercise price of £nil. Subject to the specific performance conditions, the options
will vest on the third anniversary of the grant date. Of the total options granted, 2,000,000 are subject to a
2-year post-vesting hold period. The grant is subject to performance conditions. Under the plan rules, continued
employment over the vesting period is a requirement. In addition, the following performance conditions apply:
Performance condition % of grant applied to Target
Relative TSR – FTSE 250 12.5% Awards will vest on a straight line basis from 25% to 100%
if relative TSR growth is between 50% to 75%
Relative TSR – Comparator group
(E-commerce & Retail)
12.5% Awards will vest on a straight line basis from 25% to 100%
if relative TSR growth is between 50% to 75%
Sales Growth 25% Awards will vest on a straight line basis from 25% to 100%
if CAGR sales growth is between 25% to 32%
EPS 25% Awards will vest on a straight line basis from 25% to 100%
if EPS growth is between 3.5p to 5p
ESG: Sustainable timber sourcing 8.33% Awards will vest on a straight line basis from 25% to 100%
if sustainable timber sourcing is between 70% to 80%
ESG: Sustainable textile sourcing 8.33% Awards will vest on a straight line basis from 25% to 100%
if sustainable textile sourcing is between 70% to 80%
ESG: Product packaging 8.33% Awards will vest on a straight line basis from 25% to 100%
if between 90% to 100% of product packaging is recycled
or recyclable
The fair value calculated for the elements of the award subject to TSR Performance Condition is £1.31 for the
FTSE 250 group and £1.42 for the E-commerce & Retail comparator group. These valuations have been
determined using the Monte Carlo valuation method. The fair value calculated for the remaining elements of the
award is £2.00 and has been determined using the Black-Scholes model. The inputs into the Black-Scholes and
Monte Carlo models were:
Monte Carlo
– TSR (FTSE
250)
Monte Carlo
–TS R
(Ecommerce &
Retail group) Black Scholes
Fair value (£) £1.31 £1.42 £2.00
Share price at grant date (£) £2.00 £2.00 £2.00
Expected volatility (%) 45% 45% 45%
Risk-free interest rate (%) 0.15% 0.15% 0.15%
Expected life of share options (periods) 3 3 3
Dividend yield (%) 0.0% 0.0% 0.0%
A discount for lack of marketability of 14.8% has been calculated using the Ghaidarov model to reflect the
impact on the fair value of the 2-year post-vesting hold period. This discount has been applied to the fair value of
those options subject to this restriction.
198 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
24. Share-based payments (continued)
Movements during the year
The following table shows the movement in the number of equity-settled share options outstanding and the
weighted average exercise prices during the year:
Group and Company 2021 2020
Weighted
Average exercise
price
£
Number of
options
Weighted
Average exercise
price
£
Number of
options
Outstanding at 1 January 4.65 4,243,116 3.99 4,362,464
Granted 10.70 383,200 11.61 300,000
Exercised during the period – – 1.66 (346,014)
Lapsed and forfeited during the year 10.56 (33,600) 5.75 (46,667)
Outstanding at 21 June 2021 (pre-reorg) 5.11 4,592,716 4.71 4,269,783
Capital reorganisation – 41,334,444 – –
Outstanding at 21 June 2021 (post-reorg) 0.51 45,927,160 – –
Granted post-reorg – 6,143,915 – –
Exercised post-reorg 0.31 (23,005,968) – –
Lapsed and forfeited post reorg 0.35 (841,161)
Outstanding at 31 December 0.51 28,223,946 4.71 4,269,783
Exercisable at 31 December 0.57 19,983,192 3.83 3,631,449
The number of options outstanding at the end of 31 December 2021 have the following terms and weighted
average exercise prices:
Term of the option
Weighted
Average exercise
price 2021
Weighted
Average exercise
price 2020
8 May 2013 – 8 May 2023 – – £1.63 191,507
13 May 2014 – 13 May 2024 – – £2.00 201,274
18 September 2014 – 18 September 2024 £0.20 2,027,714 £1.99 1,050,336
7 November 2014 – 7 November 2024 – – £2.00 92,500
2 December 2014 – 2 December 2024 – – £3.25 28,500
19 September 2016 – 19 September 2026 £0.50 7,463,668 £4.88 1,260,666
1 August 2017 – 1 August 2027 £0.44 5,555,000 £5.30 690,000
4 September 2017 – 4 September 2027 £0.72 115,359 £5.75 100,000
26 February 2018 – 26 February 2028 £0.58 1,281,670 £5.75 165,000
4 July 2019 – 4 July 2029 £1.22 93,331 £11.61 190,000
10 June 2020 – 10 June 2030 £1.16 3,000,000 £11.61 300,000
1 January 2021 – 1 January 2031 £1.08 3,108,450 – –
22 June 2021 – 20 June 2031 £0 2,764,478 – –
12 July 2021 – 12 July 2031 £0 2,814,276 – –
Total 28,223,946 4,269,783
Notes to the financial statements
for the year ended 31 December 2021 continued
199 MADE.COM Group Plc
Annual Report and Accounts 2021
25. Capital management
For the purpose of the Group’s capital management, capital includes issued capital, share premium and all other
equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital
management is to maximise the shareholder value and to ensure that it has the capital required to operate and
grow the business at a reasonable cost of capital without incurring undue financial risks.
The Group manages its capital structure and makes adjustments in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may seek to raise funds by issuing new shares to reduce
debt. The management of debt is considered to be an important element in controlling the capital structure.
The Group has arranged debt facilities to allow for fluctuations in working capital requirements. There have been
no changes to the capital management policy in the period.
26. Risk management
The Group is exposed to market risk, credit risk, foreign exchange risk and liquidity risk. The Group’s principal
financial instruments are Trade and other receivables, Trade and other payables, Cash, Derivatives, loans and
borrowings and current financial asset/liability.
This note provides further detail on financial risk management and includes quantitative information on the
specific risks the Group is exposed to.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprise three types of risk: interest rate risk, currency risk and other
prices risk, such as equity price risk.
The Group’s exposure is primarily to the financial risks of changes in foreign currency exchange rates and interest
rate risk.
Sensitivity analysis
The Company recognises that movements in certain risk variables (such as interest rates or foreign exchange
rates) might affect the value of its other receivables. Therefore the Company has assessed:
a) What would be reasonably possible changes in the risk variables at the end of the reporting period and
b) The effects on profit or loss and equity if such changes in the risk variables were to occur.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Group has low exposure to interest rate risk as, except for the interest-
bearing loan, all trade and other receivables and payables are non-interest bearing. The interest charged on the
interest-bearing loan is fixed and therefore not subjected to future fluctuations.
The Group cash balances are held in current bank accounts and earn immaterial levels of interest. Management
has concluded that any changes in the LIBOR rates will have an immaterial impact on interest income earned on
the Group cash balances. No interest rate sensitivity has been included in relation to the Group’s cash balances.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Group’s exposure to foreign exchange risk primarily arises
when revenue and expenses are denominated in a different currency from the Group’s presentational currency.
Foreign exchange risk also arises when the individual entities enter into transactions that are not denominated in
their functional currency.
Foreign currency sensitivity
The Group operates internationally and is therefore exposed to a foreign currency transaction risk, primarily on
purchases and sales denominated in US dollars and Euros. The Group’s presentational currency is Sterling, and
therefore the Group is exposed to foreign currency translation risks due to movements in foreign exchange rates
on the translation of non-sterling assets and liabilities.
200 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
26. Risk management (continued)
The Group’s policy is to match foreign currency transaction exposures where possible. Where appropriate, the
Group uses financial instruments in the form of forward exchange contracts to hedge future foreign currency
cash flows.
At 31 December 2021 and 31 December 2020 the Group has performed a sensitivity analysis to determine
theimpact of a +/- 3% movement in both GBP:USD and GBP:EUR cross rates on the carrying value of balance
sheet items including cash, other receivables, trade creditors and the outstanding cashflow hedges. A 3%
increase/decrease in GBP:USD would have resulted in a £0.5m increase/£0.6m decrease in the income
statement (2020: £0.3m/£0.3m) and an additional deferred loss of £2.7m/deferred gain of £2.9m recognised in
Other Comprehensive Income (2020: £2.6m/£2.8m). A 3% increase/decrease in GBP:EUR would have resulted
in a £0.1m decrease/£0.2m increase in the income statement (2020: £0.2m/£0.3m) and an additional deferred
gain of £1.6m/deferred loss of £1.7m recognised in Other Comprehensive Income (2020: £1.6m/£1.7m).
Liquidity risk
Liquidity risk for the Group arises from the management of working capital commitments and meeting its
financial obligations as they fall due. The Group’s policy is to review cash flow forecasts / projections regularly as
well as information regarding cash balances to ensure that it has significant cash to allow it to meet its liabilities
when they become due. The Group reviews its long-term funding requirements in parallel with its long-term
strategy, with an objective of aligning both in a timely manner.
The contractual undiscounted cash flows for current Trade and Other Payables and Deferred Revenue is equal to
their carrying value and are due within 1 year. The undiscounted contractual cash flows for current lease liabilities,
due within 1 year, is £5.0m (2020: £5.0m).
The maturity profile of the contractual undiscounted cash flows for the Group’s non-current financial liabilities is
as follows:
Maturity
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
More than
5 years Total
As at 31 December 2021
Lease Liabilities 5.4 2.9 2.2 2.0 8.9 21.4
Interest bearing loans and borrowings – – – – – –
Total 5.4 2.9 2.2 2.0 8.9 21.4
As at 31 December 2020
Lease Liabilities 4.6 3.2 1.2 0.7 0.5 10.2
Interest bearing loans and borrowings 1.0 10.4 – – – 11.4
Total 5.6 13.6 1.2 0.7 0.5 21.6
Credit risk
Credit risk is the risk of financial loss to the group if a customer or counterparty fails to meet its contractual
obligations under a financial instrument or customer contract, leading to a financial loss. The Group is mainly
exposed to credit risk from its operating activities (primarily for trade receivables – credit sales).
Trade receivables
The Group has a low retail credit risk due to transactions being principally of a short maturity. The risk of default
is considered to be low, and write-offs due to bad debts are extremely low.
Cash deposits
Credit risk from balances with banks and financial institutions is managed in accordance with the Group’s policy.
The Group deposits cash with reputable financial institutions, from which management believes the possibilities
of loss to be remote. Counterparties’ positions are monitored on a regular basis to ensure that they are within
the approved limits and there are no significant concentrations of credit risk. Of the total cash balance, the
largest amount with a single institution is £67.2m (2020: £50.4m). The Group’s maximum exposure to credit risk
for the components of the statement of financial position at 31 December 2021 and 2020 is the carrying amount.
201 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
27. Related party transactions
Note 28 provides the information about the Group’s structure including the details of the subsidiaries and the
holding company.
Total compensation in respect of key management personnel is considered to be a related party transaction.
Key management personnel comprise of directors and heads of the executive and finance departments.
The amounts disclosed in the table below are amounts recognised as an expense during the reporting period
related to key management personnel. There were no other material related party transactions in the year.
2021
£m
2020
£m
Salaries, fees and other short-term employee benefits 1.2 1.0
Pension contributions 0.0 0.0
Share based payment related costs 0.9 0.1
Total costs of key management personnel 2.1 1.1
During the prior year, payments were made to B Hoberman, S Given and N Li, in their capacity as directors of the
then ultimate parent company, Made.com Limited, for directors’ services totalling £0.2m.
Transactions entered in to by the Company with subsidiaries, and between subsidiaries, as well as the resultant
balances of receivables and payables are eliminated on consolidation and not required to be disclosed.
28. Group structure
As at 31 December 2021 and 2020, Made.com Group Plc held directly or indirectly* 100% voting shares of the
following subsidiaries, which are consolidated into these financial statements:
Subsidiaries
Country of
Incorporation Address Nature of business
Made.com Design Limited England and
Wales
5-7 Singer St, EC2A 4BQ Online retail of furnishings and
homeware
Made.com Trading Limited* Hong Kong Rooms 1312-13, 16-20. 13/F,
Hollywood Plaza, 610 Nathan
Road, Hong Kong
Holding company
Made.com Company Limited* China Suite 706-707, No. 699 Zhaohua
Road, Shanghai, China
Sourcing agent, and quality
assurance
Made.com Netherlands B.V.* Netherlands Raadhuisstraat 31 H, 1016DC
Amsterdam
Dormant
Made.com Limited Gibraltar 28 Irish Town, Gibraltar, GX11 1AA Holding company (in liquidation)
*subsidiaries indirectly held through Made.com Design Limited
Made.com Netherlands B.V. is a wholly owned subsidiary that was incorporated on 23 December 2019. It is
currently dormant.
On 21 June 2021, Made.com Group Plc acquired the entire shareholding of Made.com Limited via a share for
share exchange. Following this, a decision was taken to liquidate Made.com Limited. On 3 December 2021 the
investment held by Made.com Limited in Made.com Design Limited was transferred in full to Made.com Group
plc as part of the liquidation process. The liquidation is expected to be completed by end of March 2022.
Further details of the Group reorganisation can be found in note 2.
202 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
29. Capital commitments
As at 31 December 2021, the Group has capital commitments for expenditure on property, plant and equipment
contracted, but not provided for, of £1.2m (2020: £nil).
30. Post balance sheet events
On 21 February 2022 we announced that Philippe Chainieux would step down from his role as CEO of the Group
and its Board for family reasons. As a result, we welcomed our COO, Nicola Thompson, to the Board and she
assumed the position of Interim CEO initially and subsequently was appointed to the CEO role on a permanent
basis with full effect from 7 March 2022.
Full details of Philippe’s termination arrangements may be found in the section 430(2B) statement on the
Company’s website, and will also be fully disclosed in next year’s Remuneration Report. Details of the
remuneration arrangements for Nicola may also be found in an announcement on the Company’s website and
will also be fully disclosed in next year’s Remuneration Report.
203 MADE.COM Group Plc
Annual Report and Accounts 2021
Notes to the financial statements
for the year ended 31 December 2021 continued
204 MADE.COM Group Plc
Annual Report and Accounts 2021
Made.com Group Plc is a public company limited by
shares and registered in England and Wales, registered
number 13346124.
Our registered and head office is situated at:
5 Singer Street
London
United Kingdom
EC2A 4BQ
Corporate website: https://corporate.made.com/
Consumer website: https://www.made.com/
Email: investor.relations@made.com
Advisers
Corporate communications
Brunswick
Joint corporate brokers
J.P. Morgan Cazenove
Liberum Capital Limited
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Tel: 0371 384 2030 (from the UK)
Tel: +44 121 4157047 (from overseas)
Auditor
Ernst & Young LLP
1 More London Place
London
SE1 2AF
Our ordinary shares are listed on the London Stock
Exchange (premium listing)
Legal Entity Identifier (LEI):
213800HTMSVK071K6071
International Securities Identification Number (ISIN):
GB00BNXM7M46
Ticker Symbol: MADE
General information