Zabka Group · GPW:ZAB
Zabka — Q3 2024 Earnings Presentation
26 slides from Zabka's earnings presentation, Nov 5, 2024
Slide 1: Q3 2024 Results Presentation
Q3 2024 Results Presentation 5 November 2024
Slide 2: Today's presenters
Today’s presenters Tomasz Blicharski Marta Wrochna- Tomasz Suchański Group Chief Strategy Łastowska Group CEO & Development Group CFO Officer 2
Slide 3: Strategic Highlights
Strategic Highlights
Slide 4: Q3 2024 performance: continued growth on the back of strong trading
Q3 2024 performance: continued growth on the back of strong trading, in line with our expectations and the guidance Q3 Adjusted EBITDA Q3 Net Profit Q3 Sales to End Customers PLN 1.1bn PLN 319m PLN 7.5bn +18% YoY +42% YoY +17% YoY Q3 Like for Like Store network1 as at 30 Sep-24 Q3 Net debt / Adjuste
Slide 5: Strong strategy execution amid macro-driven consumer tailwinds
Strong strategy execution amid macro-driven consumer tailwinds Market tailwinds 9M 24 +892 net stores LfL Grow th Q3 24 +266 net stores ini On track to deliver ca. 1,100 new store openings FY24 guidance tia Consumer environment tiv remains supportive n 9M 24 LfL +8.6% k expansio es Q3 24 LfL +6
Slide 6: Market environment and strategy execution
Market environment and strategy execution
Slide 7: Perceived financial situation of Polish households has steadily improved
The perceived financial situation of Polish households has steadily improved, driven by substantial real wage growth Financial situation of Polish consumers Gross wage Nominal gross wages have been ahead of growth Inflation inflation in LTM, resulting in a significant real wage growth over the perio
Slide 8: Physical grocery market continues balanced growth, with Żabka outperforming
Physical Grocery Market continues balanced growth, with Żabka outperforming in price and volume terms, while accelerating share growth Nielsen data demonstrates Polish physical grocery’s …with Żabka outperforming other formats in continued healthy growth… both price and volume Volume Price In Q3 24
Slide 9: Żabka's real LfL has consistently outperformed the market
Żabka’s real LfL has consistently outperformed the market throughout the inflationary period Comparison of Żabka’s Quarterly Year-over- Żabka has been gaining market share Year Real Growth vs. Market Żabka’s market share indexed at Dec-20 LTM =100 Consistent High inflation Acceleration as inflation
Slide 10: New store openings - on track to open ca. 1,100 stores in FY24
New store openings - on track to open ca. 1,100 stores in LfL Growth ini t iti ati n rk expansio ves Ne two FY24, in line with guidance es gin n hE New Growt Progress in Poland Progress in Romania +6 886 892 10,906 stores1 Total 26 operating stores, 25 in Bucharest and 1 in Pitesti +25 – mostly i
Slide 11: LfL growth initiatives resulting in a balanced mix of volume and price
LfL growth initiatives resulting in a balanced mix of LfL Growth ini t iti ati n rk expansio ves Ne two volume and price es gin n hE New Growt Street Food offer rollout Continued product innovation Products 65% of Żabka stores with MerryChef at the end of the quarter 382 new products added in Q3 +1
Slide 12: Digital Customer Offering driving sales growth and new initiatives
Digital Customer Offering driving sales growth and LfL Growth ini t iti ati n rk expansio ves Ne two implementing new initiatives es gin n hE New Growt Digital sales up by 31% in Q3 24 YoY on the back of initiatives: E-Grocery assortment expansion - assortment range reaching up to 3.7k SKU in Żabka
Slide 13: Financials
Financials
Slide 14: Key financial highlights: results in line with expectations
Key financial highlights: results in line with our expectations, on track to deliver our full year guidance Q3 24 EBITDA and Net Profit Q3 24 Trading Q3 24 FCF & Leverage Adjusted EBITDA at PLN 1,119m (+18% YoY), Sales to End Customers at PLN 7.5bn (+17% Free cash flow (FCF) at PLN 647m, with +10bps
Slide 15: Strong Top-Line and Margin progression in Q3 2024
Strong Top-Line and Margin progression in Q3 2024 Key financial metrics Robust Sales to End Customers growth Q3 YTD ▪ Healthy mix of organic growth (fuelled by i.e. Żabka Cafe 2.0, Selected KPIs Q3 24 Q3 23 Δ YoY 9M 24 9M 23 Δ YoY unique and differentiated product offering) and expansion Number of S
Slide 16: Robust growth in Adj. EBITDA driven by Sales growth and Margin expansion
Robust growth in Adj. EBITDA driven by Sales growth and Margin expansion Adjusted EBITDA (PLNm, 9M 2024) x % of Sales to End Customers ▪Strong Adj. EBITDA growth of +26% YoY ▪ Continued momentum in sales growth 11.8% +0.1pp +0.6pp (0.1pp) +0.1pp (0.1pp) 0.0pp 12.3% ▪ Improvement in costs of sales, d
Slide 17: Strong cash generation…
Strong cash generation… Q3 2024 9M 2024 (PLNm) (PLNm) ▪Robust cash flow conversion, driven by: Adjusted EBITDA 1,119 Adjusted EBITDA 2,518 ▪ significant Adj. EBITDA growth ▪ controlled discretionary Capex spend Rent (247) Rent (720) – YoY growth driven by network development, the new app development
Slide 18: … supporting continued deleveraging
… supporting continued deleveraging Net leverage: Net financial debt1 / adjusted EBITDA post-rent2 2.5x 2.3x 2.1x 2.1x 1.4x ▪ Reduction in leverage profile from robust cash generation and Adj. EBITDA growth ▪ Leverage at Q3 of 1.4x excl. leases and 2.4x including capitalized leases FY 21 FY 22 FY 23
Slide 19: Concluding remarks
Concluding remarks Consistently In line with our expectations, in Q3 24 Żabka continued strong financial and operating performance Strong Results delivering robust LfL growth of 6.0% (8.6% 9M 24) in a seasonally important quarter of the year We improved profitability measures including Adj. EBITDA m
Slide 20: We remain on track to grow our store footprint, drive LfL and deliver on DCO
We remain on track to grow our store footprint, drive LfL from traffic and ticket size and deliver on the DCO opportunity Target to more than double Sales to End Customers in the next 5 years 1,000+ p.a.1 new Mid-to-high single digit ~5x increase in store openings annualized LfL growth Sales to End
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Slide 22: Thank you
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Slide 23: Appendix
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Slide 24: Strong Q3 & 9M 2024 Performance Across All Key Metrics (1/2)
Strong Q3 & 9M 2024 Performance Across All Key Metrics (1/2) Source: Company Information 1 Represents Żabka Sales to End Customers and sales of Maczfit, Dietly, Drim Daniel, Froo and Q-Comm and does not represent company reported revenue. 2 LfL defined as comparison of daily receipt sales figures in
Slide 25: Strong Q3 & 9M 2024 Performance Across All Key Metrics (2/2)
Strong Q3 & 9M 2024 Performance Across All Key Metrics (2/2) Source: Company Information 1 Adjusted EBITDA margins calculated based on Sales to End Customers. 2 Defined as Adjusted EBITDA (Post-rent) minus Capex plus Changes in working capital and provisions. 3 Leverage calculated as Net debt (exclu
Slide 26: Żabka Group disclaimer
Żabka Group disclaimer This presentation (“Presentation”) has been prepared by Zabka Group, a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 2, rue Jean Monnet L-2180 Luxembourg, Grand Duch