Pets at Home : Annual Report 2021, JUN 2021

We're better with pets

Pets at Home Group Plc

Annual Report and Accounts 2021

Our vision is to become the best pet care business in the world.

We provide customers with everything they need to be the best pet owner they can be.

Find out more:

To download our Annual Report, our full social value report or to learn more about Pets at Home, please visit our investor website. https://investors.petsathome.com

Contents

Overview

Financial Statements

The year in review	2
At a glance	4
Investment case	6
Chairman's statement	8
COVID-19 response	10

Strategy

Chief Executive's statement	12
Market overview	18
Strategy	28

Performance

Key performance indicators	34
Business model	36
Stakeholder engagement	38
Chief Financial Officer's review	40
Operating review	46
Risk management	54
Risks and uncertainties	56
Social Value	64

Governance Report

Governance Report	90
Board of Directors	100
Directors' Report	102
Statement of Directors' Responsibilities	109
Audit and Risk Committee Report	110
Nomination and Corporate
Governance Committee Report	115
ESG Committee Report	117
Directors' Remuneration Report	119

Independent Auditor's report	140
Consolidated income statement	146
Consolidated statement of
comprehensive income	146
Consolidated balance sheet	147
Consolidated statement of changes
in equity as at 25 March 2021	148
Consolidated statement of changes
in equity as at 26 March 2020	148
Consolidated statement of cashflows	149
Company balance sheet	150
Company statement of changes
in equity as at 25 March 2021	151
Company statement of changes
in equity as at 26 March 2020	151
Company income statement	151
Company statement of cashflows	152
Notes (forming part of the
financial statements)	153
Glossary - Alternative
Performance Measures	210
Advisors and contacts	214

With 30 years of caring for pets and the people who love them, we know our purpose - we're better with pets.

Our goal is to make pet care convenient, affordable and rewarding for customers - allowing them to spend more time with their beloved pets.

report Strategic

report Governance

statements Financial

Annual Report and Accounts 2021

Pets at Home Group Plc

1

Financial and operational highlights

The year in review

Operational highlights

Our performance in the year reflects the success of our pet care strategy during a period of unprecedented change. The pet care market remained in structural growth, underpinned by a rise in pet ownership, as well as the ongoing trends of premiumisation and humanisation, and we continued to take share across all channels of our pet care ecosystem.

Link to strategy:

Bring the pet experience to life

Use data and VIP to better serve customers 50% of sales from pet services

Set our people free to serve

Our strategy, page 28

Developing our pet care centres Our next generation store format has now been rolled out across

23 locations, featuring more space allocated to services and an enhanced customer experience, and two new smaller format stores have been successfully launched this year within Greater London.

Progressing our data agenda Our 45-strongdata and analytics team is now fully recruited, and we have successfully completed the insourcing of all our data operations onto a cloud-basedplatform. This is enabling us to more accurately understand customer preferences and drive highly targeted communications; our first VIP reward mailer based on insights from internally held data achieved our highest level of redemptions to date.

Enhancing our omnichannel proposition

We have seen strong growth in our Retail business, particularly within omnichannel, which now represents 15.8% of Retail revenues. A nationwide rollout of a 1-hour Click & Collect service in the year offers customers an even more convenient way to shop with us.

Driving maturity in our

First Opinion practices

Like-for-like1 customer sales generated by all First Opinion vet practices grew 9.5%, supported by strong growth in new client registrations. Our acquisition of The Vet Connection

in the year broadens our digital capabilities in providing trusted advice and pet care solutions.

Financial highlights

Strong performance in a challenging year

Revenue (£m)

2021 £1,142.8

2020	£1,058.8
2019	£961.0

Underlying PBT1 (£m)

2021	£87.5
2020	£93.5

Underlying free cashflow1 (£m)

2021 £67.4

2020	£89.6
2019	£63.6

£1,142.8m +7.9%

£87.5m (6.4)%

£67.4m (24.8)%

2

Pets at Home Group Plc

Annual Report and Accounts 2021

61%

Increase in Puppy & Kitten club members

Growing our customer base Our VIP loyalty club now has 6.2m active members, having grown 9% in the year. This has been in part driven by the continued success of our Puppy and Kitten clubs, which help introduce customers to all parts of our pet care ecosystem and foster long-termcustomer relationships.

report Strategic

report Governance

£90m

Annual customer revenue from subscriptions

Expanding our subscriptions platforms

We now have over 1 million customers signed up to one of our subscription plans, offering customers a convenient way to shop with us, and increasing the quality and visibility of our sales profile.

statements Financial

1 Alternative Performance Measures (APMs) are defined and reconciled to IFRS information, where possible, on page 210. Customer sales include gross customer sales made by Joint Venture vet practices, and therefore differs to the fee income recognised within Vet Group revenue.

Our Better World Pledge

Our social value strategy continues to guide everything that we do

£6.0m	Over £6.0 million raised
to support pet charities

84%	84% colleague
engagement

9.1%	9.1% reduction in CO2e
emissions vs. FY20

Annual Report and Accounts 2021

Pets at Home Group Plc

3