QVC Group, Inc. · NASDAQ:QVCG
QVC — Qurate Retail — Q2 2020 Earnings Presentation
16 slides from QVC's earnings presentation, Aug 10, 2020
Slide 1: Q2 2020 Earnings Presentation
Curated Experiences. Infinite Possibilities.® Q2 2020 Earnings Presentation
Slide 2: Safe Harbor and Non-GAAP Measures
Safe Harbor and Non-GAAP Measures This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including This presentation includes non-GAAP financial measures including adjusted statements about business strategies, our re
Slide 3: Capital Allocation Update
Capital Allocation Update QURATE RETAIL GROUP 3
Slide 4: Capital Allocation Update
Capital Allocation Update Qurate Retail, Inc.’s Board of Directors approved a planned return of capital to shareholders, consisting of: 1) Special dividend of $1.50 per QRTEA/QRTEB share • Expected to be payable on September 14th to stockholders of record as of August 31st • Approximately $633 milli
Slide 5: Illustrative Term Sheet for Preferred Shares
Illustrative Term Sheet for Preferred Shares Issuer: Qurate Retail, Inc. (the “Issuer”) Securities: Fixed Rate Cumulative Redeemable Preferred Shares (the “Preferred Stock”) Maturity: “Long” 10-year (Q1 2031) 5 years after the original issue date, at Liquidation Preference plus half the Distribution
Slide 6: Rationale
Rationale Qurate Retail continues to generate substantial free cash flow, boosted by COVID-related surge in business activity and one-time cash distribution from pending green energy sale. Our management and board of directors explored alternative shareholder return approaches and believe the approv
Slide 7: Second Quarter Results
Second Quarter Results QURATE RETAIL GROUP 7
Slide 8: Revenue & Adjusted OIBDA
Revenue & Adjusted OIBDA Business Segment Contribution Q2 2020 3% 8% 8% 12% 21% 21% Revenue Adjusted OIBDA $3.4B $0.6B +10% +10% Cornerstone 68% 59% Zulily QVC International QxH $2.2B eCommerce Revenue Note: Percentages exclude intersegment eliminations and unallocated corporate costs. QURATE RETAIL
Slide 9: Revenue & Adjusted OIBDA: Year-on-Year Quarterly Comparative
Revenue & Adjusted OIBDA Year-on-Year Quarterly Comparative REVENUE 2019 2020 Q1 Q2 Q3 Q4 FY 2019 Q1 Q2 QxH -4% -1% -4% -3% -3% -4% 7% QVC International -5% -2% 2% 1% -1% -1% 11% QVC International (Constant Currency) 1% 1% 3% 1% 1% 0% 12% Zulily -5% -13% -17% -18% -14% -20% 16% Cornerstone -10% -11%
Slide 10: QxH Category Performance
QxH Category Performance Prior Year Comparative CATEGORY 2019 2020 Q1 Q2 Q3 Q4 FY 2019 Q1 Q2 Home Apparel Beauty Accessories Electronics Flat Jewelry Notable Brands TM TM SOLUTIONS for life’s best moments BY QURATE RETAIL, INC. 10
Slide 11: QxH Category Mix Shift to Home and Electronics
QxH Category Mix Shift to Home and Electronics Category % of Revenue 2% 2% 5% 4% 13% 12% 16% 17% 15% 19% 11% 9% 40% 35% Q2-19 Q2-20 Home Electronics Apparel Beauty Accessories Jewelry Other QURATE RETAIL, INC. 11
Slide 12: QxH Customer Profile
QxH Customer Profile Trailing Twelve Months Ended June 2020 Existing 49% Existing 85% Reactivated 7% Reactivated 22% New 8% Percentage of Percentage of All Customers Shipped Sales New 29% Existing Customers Annual Purchases: 27 Items purchased $1.4K Spend New: Never purchased previously Reactivated:
Slide 13: QxH Customer Growth
QxH Customer Growth Number of Customers 11,058 +4% 2,448 + 3% 5,633 3,173 +12% +14% +29% 688 +74% 870 5,437 (1%) + 4% 4,075 Q2-20 LTM June '20 Existing New Reactivated New: Never purchased previously Reactivated: Purchased in past, but not in last 12 months Existing: Made a purchase in two consecuti
Slide 14: QxH Adjusted OIBDA Margin
QxH Adjusted OIBDA Margin Basis Point Change Year Over Year Adjusted OIBDA Explanation Q2-19 Margin 21.1% (-) Category Mix, Early Q2 Pricing Actions/S&H Product Margin1 Cost of Goods Sold (25) (+) Returns, Mid Q2 Promotional Reset (-) COVID Premium Pay, Pack Factor, Freight Rate Increases, Drop Ship
Slide 15: Qurate Retail, Inc. Free Cash Flow
Qurate Retail, Inc. Free Cash Flow US$ Millions Six Months Ended June 2019 June 2020 Net Cash Provided by Operating Activities 593 1,198 Less: Capital Expenditures (167) (108) Less: Expenditures for Television Distribution Rights (124) (10) Less: Investments in and Loans to Cost and Equity Investees
Slide 16: Qurate Retail, Inc.
qu rate RETAIL, INC. Qvc | QB | zulily | wxuaro DESIGNS | FRONTGATE | Garnet Hill | grandinroad, | Ryllace