Slide 1: 4Q23 results presentation
4Q23 results presentation A MODERN GROUP WITH TRADITIONS April 12, 2024
Slide 2: Disclaimer
Disclaimer This presentation (the "Presentation") was prepared by VRG S.A. (the "Company") with a due care. Still, it may contain certain inconsistencies or omissions. The Presentation does not contain a complete or thorough financial analysis of the Company and the Capital Group and does not presen
Slide 3: Introduction
VRG Ol Introduction
Slide 4: 4Q23/1Q24 – time of changes and verification
4Q23/1Q24 – time of changes and verification OCTOBER/NOVEMBER END OF NOVEMBER APRIL Implementation of the Change in the position Announcement of concepts from the June of President of the plans for 2024 2023 strategy Management Board, appointment of Mr. Mateusz Kolański 2023 2024 Verification of 6 m
Slide 5: Apparel segment below expectations, jewellery segment with positive dynamics
Apparel segment below expectations, jewellery segment with positive dynamics Jewellery segment Favourable sales dynamics of the jewellery segment in each REVENUE DYNAMICS of the last 12 months due to (PLN m) floorspace development and continuing demand for 15% 50% jewellery and watches. 40% 10% 17.3
Slide 6: Favourable on-line dynamics from October 2023
Favourable on-line dynamics from October Stores 2023 Positive sales dynamics in traditional stores from September 2023 except for REVENUE DYNAMICS January 2024. (PLN m) 20% 50% 15% 34.9% 40% Group 26.9% 20.6% 14.6% 24.0% 30% Sales results were 10% 18.2% influenced by strong 20% revenues in the jewel
Slide 7: Growing gross profit margin in majority of months
Growing gross profit margin in majority of months GROSS PROFIT ON SALES MARGIN IV.23 V.23 VI.23 VII.23 VIII.23 IX.23 X.23 XI.23 XII.23 I.24 II.24 III.24 Gross profit on sales 56.2% 56.5% 56.6% 53.7% 53.9% 54.8% 55.4% 53.4% 54.3% 5.,1% 54.0% 55.4% margin YoY -0.5 pp. -1.0 pp. +1.4 pp. +2.2 pp. +4.2 p
Slide 8: A slight increase in Group's floorspace
A slight increase in Group's floorspace GROUP FLOORSPACE CHANGE YOY GROUP FLOORSPACE CHANGE YOY (ths m2) (ths m2) +0,6 +0.9 10.5 -1,2 8.1 +0.2 -0.8 +0.2 +0.1 52.0 52.5 41.5 44.4 0.0 4Q22 VST BTM WLC DCG W.KRUK 4Q23 4Q22 Own stores Franchise stores 4Q23 • Group floorspace stood at 52.5 ths m2 at the
Slide 9: Performance by brands
VRG O 2. Performance by brands
Slide 10: Vistula: 4Q23 revenues lower YoY
Vistula: 4Q23 revenues lower YoY VISTULA BRAND REVENUES (PLN m) 80.5 11.2 71.6 65.8 67.0 10.4 63.0 6.0 16.0 9.8 51.8 14.6 47.6 14.2 13.3 44.0 12.7 7.0 6.9 10.6 11.4 10.1 9.0 7.4 53.2 46.6 43.4 46.7 34.7 39.1 25.2 31.7 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Own stores Franchise stores Internet • Rev
Slide 11: Vistula: 4Q23 executive summary
Vistula: 4Q23 executive summary VISTULA BRAND REVENUES VISTULA BRAND EFFICIENCY PLN m 65.8 63.0 4Q22 4Q23 YoY 9.8 13.3 12.7 -4% YoY Revenues (PLN/m2 per month) 1,213 1,133 -6.6% 10.6 Gross profit margin (%) 60.8% 56.2% -4.6pp. 43.4 39.1 Cost of stores 488 492 1.0% (PLN/m2 per month) 4Q22 4Q23 Store
Slide 12: Bytom: a slight revenue increase
Bytom: a slight revenue increase BYTOM BRAND REVENUES (PLN m) 57.4 50.1 51.6 52.8 6.5 2.7 46.7 6.9 7.2 11.4 1.8 38.9 13.3 31.2 1.8 1.8 33.9 1.1 6.0 6.8 1.2 7.9 1.0 1.2 48.3 42.9 38.4 37.7 36.9 31.7 22.1 26.1 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Own stores Franchise stores Internet • Revenues in 4
Slide 13: Bytom: 4Q23 executive summary
Bytom: 4Q23 executive summary BYTOM BRAND REVENUES BYTOM BRAND EFFICIENCY PLN m 50.1 52.8 4Q22 4Q23 YoY 11.4 13.3 Revenues (PLN/m2 per month) 1,161 1,288 10.9% 1.8 5% YoY 1.1 Gross profit margin (%) 59.4% 56.1% -3.3pp. 36.9 38.4 Cost of stores 497 542 9.0% (PLN/m2 per month) Store EBIT (PLN m) 8.3 7
Slide 14: Wólczanka: higher YoY revenues in 4Q23
Wólczanka: higher YoY revenues in 4Q23 WÓLCZANKA BRAND REVENUES (PLN m) 37.0 35.9 35.0 28.0 27.7 24.0 21.7 16.7 18.3 17.6 20.3 13.4 10.1 14.1 4.4 3.8 11.3 3.4 7.3 2.9 3.2 2.2 2.2 2.0 13.9 14.9 14.2 15.4 11.4 8.4 10.8 7.7 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Own stores Franchise stores Internet •
Slide 15: Wólczanka: 4Q23 executive summary
Wólczanka: 4Q23 executive summary WÓLCZANKA BRAND REVENUES WÓLCZANKA BRAND EFFICIENCY PLN m 37.0 35.9 4Q22 4Q23 YoY -3% YoY Revenues (PLN/m2 per month) 2,736 2,581 -5.7% 18.3 17.6 Gross profit margin (%) 56.1% 59.9% 3.8pp. 3.8 2.9 Cost of stores 953 971 1.9% 14.9 15.4 (PLN/m2 per month) Store EBIT (
Slide 16: Deni Cler: growth on-line and off-line
Deni Cler: growth on-line and off-line DENI CLER BRAND REVENUES (PLN m) 16.7 17.2 13.0 14.2 13.5 1.8 1.4 11.0 12.0 12.4 1.7 1.6 1.4 5.7 5.5 1.2 1.3 1.1 4.6 4.5 4.7 4.4 4.4 3.7 9.5 9.9 7.1 6.4 7.9 7.2 6.6 6.2 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Own stores Franchise stores + multibrands Internet •
Slide 17: Deni Cler: 4Q23 executive summary
Deni Cler: 4Q23 executive summary DENI CLER BRAND REVENUES DENI CLER BRAND EFFICIENCY PLN m 17.2 16.7 4Q22 4Q23 YoY 1.4 1.8 3% YoY Revenues (PLN/m2 per month) 1,983 2,012 1.4% 5.7 5.5 Gross profit margin (%) 66.3% 65.1% -1.2pp. Cost of stores 9.5 9.9 662 702 6.1% (PLN/m2 per month) Store EBIT (PLN m
Slide 18: W.KRUK: continued strong revenue growth
W.KRUK: continued strong revenue growth W.KRUK RETAIL REVENUES (PLN m) 225.8 197.4 17.7 169.3 17.7 12.7 166.1 148.9 152.2 14.5 141.5 7.7 8.2 11.7 127.8 9.1 8.3 11.8 10.0 10.4 7.6 9.3 9.2 8.0 190.5 170.2 133.4 146.5 149.4 129.8 124.6 110.4 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Own stores Franchise
Slide 19: W.KRUK: 4Q23 executive summary
W.KRUK: 4Q23 executive summary W.KRUK RETAIL REVENUES W.KRUK BRAND EFFICIENCY PLN m 225.8 197.4 4Q22 4Q23 YoY 17.7 12.7 17.7 Revenues (PLN/m2 per month) 5,438 5,819 7.0% 14.5 +14% YoY Gross profit margin (%) 52.9% 52.4% -0.5pp. 190.5 170.2 Cost of stores 1,412 1,428 1.1% (PLN/m2 per month) Store EBI
Slide 20: First W.KRUK stores in Hungary
First W.KRUK stores in Hungary 4Q23 174 m2 on-line opening total floorspace launch 20
Slide 21: Group results
VRG O Group results
Slide 22: Growing group's revenues due to jewellery segment
Growing group’s revenues due to jewellery segment GROUP REVENUES (PLN m) 402.3 369.0 • Group revenues in 4Q23 amounted to PLN 402.3m (+9.0% YoY), due to 341.8 319.4 335.3 297.1 267.0 favourable trends in the jewellery segment. 243.8 149.6 194.9 229.3 152.7 167.8 142.0 169.8 • In 4Q23, revenues of th
Slide 23: Growing gross profit on sales
Growing gross profit on sales GROSS PROFIT ON SALES (PLN m) 193.2 201.3 218.7 188.7 165.5 161.0 • Group gross profit on sales amounted to PLN 218.7m in 4Q23, +8.7% 137.3 120.6 123.2 78.7 100.8 88.2 YoY. 79.5 89.5 65.0 73.8 In 4Q23 gross profit on sales in apparel segment reached PLN 98.0m, 114.4 1
Slide 24: Structure of Group operating profit
Structure of Group operating profit MONTHLY OPERATING COSTS PER M2 (PLN, IAS17) 1,041 1,095 877 950 • Group operating costs/m2 (IAS17) reached in 4Q23 PLN 1,095/m2 per 880 880 920 329 774 310 259 month, up 5.2% YoY. 225 225 237 251 203 • Costs of stores at PLN 766/m2 (+4.8% YoY), while HQs costs/m2
Slide 25: 4Q23 results affected by write-offs
4Q23 results affected by write-offs PLN m, IFRS16 4Q22 4Q23 YoY NET PROFIT (LOSS) BY SEGMENTS Revenues 369.0 402.3 9.0% (PLN m, IFRS16) Gross profit on sales 201.3 218.7 8.7% Gross profit on sales margin 54.5% 54.4% -0.2pp. 70.0 60.0 47.3 47.7 49.9 SG&A costs 157.1 169.5 7.9% 50.0 39.3 EBIT 42.1 44.
Slide 26: Weakening YoY operating profit in 2023
Weakening YoY operating profit in 2023 PLN m, IFRS16 2022 2023 YoY Revenues 1,274.0 1,301.7 2.2% Gross profit on sales 683.1 705.8 3.3% Gross profit on sales margin 53.6% 54.2% 0.6pp. SG&A costs 539.9 586.0 8.5% EBIT 140.6 112.1 -20.3% EBIT margin 11.0% 8.6% -2.4pp. Net financial activity -23.0 17.3
Slide 27: Stable inventory
Stable inventory CHANGE IN INVENTORIES (PLN m) 563.0 553.3 45.8 • Stable YoY group inventory at the level of PLN 563.0m. Inventories/m2 at the -36.0 end of 4Q23 at PLN 10,726, +0.8% YoY. 324.9 370.6 • Apparel segment inventories decreased by 15.8%YoY, while inventories/m2 amounted PLN 4,873, down 15
Slide 28: Net debt on the balance sheet despite dividend payment
Net debt on the balance sheet despite dividend payment NET DEBT/(NET CASH) VS NET DEBT/EBITDA (PLN m, IAS17 plus reverse factoring) 40.0 0.2 2.0 30.0 39.0 • Group’s net cash under IAS17 at PLN 38.5m at the end of 4Q23, 25.2 25.4 0.1 1.0 relatively stable YoY. Finance leases under IFRS16 at PLN 281.3
Slide 29: 2024+ outlook
VRG 2024+ outlook
Slide 30: Actions of apparel brands in 1H24
Actions of apparel brands in 1H24 Sales Customer Inventory peak experience management Taking advantage of the Further improvement of Implementation of potential of the formal customer experience in processes aimed at clothing sales peak on-line sales via improving on-line between April and August ap
Slide 31: Actions in the apparel segment in 2024
Actions in the apparel segment in 2024 VISTULA WÓLCZANKA BYTOM Revision of the product and Focus on small stores, returning to Continuation of direction, further marketing strategy for the brand. the brand's roots. quality improvements. Concentration on revenue improvement. I HALF OF THE YEAR II HAL
Slide 32: Actions in the jewellery segment in 2024
Actions in the jewellery segment in 2024 Use of sales peaks: Valentine's Day and Women's Day (1Q24), Further development of the Mother's Day (2Q24), wedding premium segment, both in collections (2-3Q24) and jewelry and watches. Christmas (4Q24). Further development of Increasing sales on the floorsp
Slide 33: Group's floorspace in 2024
Apparel segment Group’s floorspace in • ca. 35% of planned annual capex 2024 • the need to renovate 2023 2024 target YoY stores after years of suspended by the stores 350 345 - 5 Apparel pandemic capex segment m2 39,470 38,648 -2% stores 163 175 + 12 Jewellery segment m2 13,020 14,398 +11% stores 51
Slide 34: 2024 results to be impacted by changes
2024 results to be impacted by changes Targets for 2024 Growing gross Revenue growth profit on sales Operating costs in both segments. margin in both control. Opportunities: Risks: segments. good reception of new a longer period needed for collections of the Group's customers to get used to brands,
Slide 35: A good start of the year
A good start of the year Sales growth in 1Q24 due to favourable dynamics in the jewellery segment and a return to growth in the apparel segment in March. End of 1Q24 floorspace came in at 52.5 ths m2, growing by 1.1% YoY, due to continued growth in the jewellry segment. Growth PLN m 1Q23 1Q24 YoY in
Slide 36: Q&SA
Q&SA
Slide 37: Back-up
VRG Back-up
Slide 38: Vistula: executive summary
Vistula: executive summary Fashion for men and women Spring/Summer 2024 collection Traditional tailoring and global trends – modern, original and individual style • Vistula brand collections focus on formal fashion. The main products in the men's and women's collection are suits, jackets Men's colle
Slide 39: Vistula: 2023 executive summary
Vistula: 2023 executive summary VISTULA BRAND REVENUES PLN m 261.8 229.4 42.9 • Revenues in 2023 decreased by 12.4% YoY, while own stores 33.3 50.7 -12% YoY sales decreased by 9.5% YoY. Sales from franchise stores 43.9 decreased by 13.5% YoY. 168.3 152.3 • Internet sales decreased 22.4% YoY, account
Slide 40: Bytom: executive summary
Bytom: executive summary Fashion for men Spring/Summer 2024 collection A Polish brand with a tradition of tailoring craftsmanship dating • The latest collection is a story about friendship and passion. It is back to 1945. shown by three friends who share a hobby, and each meeting is Tailor-made serv
Slide 41: Bytom: 2023 executive summary
Bytom: 2023 executive summary BYTOM BRAND REVENUES (PLN m) 185.4 177.3 33.0 33.0 • Revenues in 2023 decreased by 4.4% YoY, while revenues in 7.5 -4% YoY 5.2 own stores decreased by 4.0% YoY. Franchise sales decreased by 144.9 31.1% YoY. 139.1 • Internet sales were stable (+0.2 pp.) YoY, accounting f
Slide 42: Wólczanka: executive summary
Wólczanka: executive summary Fashion for women and men Spring/Summer 2024 collection Polish network of boutiques and • The motto of the new collection is: Direction: comfort and classic. own and franchise stores with Formal shirts are the brand's communication priority, but it also women's and men's
Slide 43: Wólczanka: 2023 executive summary
Wólczanka: 2023 executive summary WÓLCZANKA BRAND REVENUES PLN m 124.0 105.5 • Revenues in 2023 decreased by 14.9% YoY, while sales from 62.6 -15% YoY own stores increased by 2.1% YoY. Sales from franchise stores 46.3 13.5 10.4 decreased by 23.2% YoY. 47.9 48.9 • Internet sales decreased 26.1% YoY,
Slide 44: Deni Cler: executive summary
Deni Cler: executive summary Women’s fashion Women’s fashion brand established in Italy in 1971 Spring/Summer 2024 collection Addressed to women over 35 who value high quality and elegance Superior quality fabrics with • The latest Deni Cler collection for the Spring/Summer 2024 season superior acce
Slide 45: Deni Cler: 2023 executive summary
Deni Cler: 2023 executive summary DENI CLER BRAND REVENUES PLN m 57.2 52.7 +9% r/r • Revenues in 2023 increased by 8.6% YoY, at a similar pace as 6.4 5.0 the increase in sales in own stores (+8.1% YoY). Sales from 18.4 19.1 franchise and multibrand stores increased by 4.0% YoY. 29.3 31.6 • Internet
Slide 46: W.KRUK: executive summary
The oldest jewellery brand in W.KRUK: executive summary Poland The jewellery offer includes gold and silver jewellery, diamonds, Novelties in collections gemstones and original collections. W.KRUK's offer also includes • In 1Q24, W.KRUK ran a campaign for the Spring/Summer Preludium global watch bra
Slide 47: W.KRUK: 2023 executive summary
W.KRUK: 2023 executive summary W.KRUK BRAND REVENUES PLN m 702.6 • Revenues in 2023 increased by 12.2% YoY, while sales from own 626.2 41.2 50.4 stores increased by 12.3% YoY. Sales from franchise stores by 39.4 42.9 +11% 17.6% YoY. YoY 543.9 611.1 • Internet sales increased by 4.4% YoY, accounting
Slide 48: Changes in group structure
Changes in group structure VRG Companies included in the consolidated statements for 4Q23 Jewellery segment Apparel segment Other activity W.KRUK S.A. VRG S.A. VG Property sp. z o.o. parent company Real estate Jewellery, watches, accessories Vistula, Wólczanka, Bytom WK 1840 HU Kft. DCG S.A. Jewelle
Slide 49: Continued optimisation of number of stores
Continued optimisation of number of stores Number of stores 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 total 398 391 383 382 368 359 358 350 Apparel segment franchise 126 123 119 116 104 92 84 78 total 145 144 142 142 137 136 135 132 Vistula franchise 62 62 61 61 55 51 47 45 total 112 109 106 107 104 1
Slide 50: Floorspace YoY
Floorspace YoY M2 floorspace 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 total 40,891 40,385 39,778 39,833 39,333 39,007 39,818 39,470 Apparel segment franchise 9,425 9,236 9,019 8,798 7,962 7,175 6,582 6,216 total 18,509 18,404 18,118 18,139 17,733 17,815 18,337 18,386 Vistula franchise 6,374 6,341 6,2
Slide 51: Own e-stores of five brands
Own e-stores of five brands ON-LINE SALES BY SEGMENTS (mln PLN) 17.7 • We have own e-stores for all five retail brands. Our aim is to develop 12.7 9.3 9.1 on-line stores of own brands (monoshops). 8.3 7.6 7.7 8.2 46.1 • Revenues and costs of on-line stores are allocated directly to the brands. 34.5
Slide 52: Higher costs/m2, but lower store costs/m2
Higher costs/m2, but lower store costs/m2 OPERATING COSTS MONTHLY/M2 (PLN, excl. IFRS16) • Differences in SG&A costs/ m2 between segments result from different 2,021 business models. 1,970 1,411 1,395 1,367 1,512 1,510 1,266 • Jewellery segment is characterised by higher revenues and costs/m2 than t
Slide 53: Increase in off-line marketing expenses
Increase in off-line marketing expenses GROUP OFF-LINE MARKETING COSTS BY SEGMENTS (PLN m) • Off-line marketing costs are part of group selling costs. 9.5 10.2 • These encompass recurring advertising spending (catalogues, photoshoots) and nationwide marketing campaigns in editorial, internet 3.4 3.1
Slide 54: Historical quarterly results, IFRS16
Historical quarterly results, IFRS16 PLN m 1Q22 1Q23 YoY 2Q22 2Q23 YoY 3Q22 3Q23 YoY 4Q22 4Q23 YoY Revenues 243.8 267.0 9.5% 341.8 335.3 -1.9% 319.4 297.1 -7.0% 369.0 402.3 9.0% Gross profit on sales 123.2 137.3 11.4% 193.2 188.7 -2.3% 165.5 161.0 -2.7% 201.3 218.7 8.7% Gross profit on sales margin
Slide 55: Results under IAS17
Results under IAS17 PLN m, IAS17 4Q22 4Q23 YoY 2022 2023 YoY Revenues 369.0 402.3 9.0% 1,274.0 1,301.7 2.2% Gross profit on sales 201.3 218.7 8.7% 683.1 705.8 3.3% Gross profit on sales margin 54.5% 54.4% -0.2pp. 53.6% 54.2% 0.6pp. SG&A costs 161.9 172.8 6.7% 558.8 601.1 7.6% EBIT 37.0 41.2 11.5% 12
Slide 56: Capex supports growth
Capex supports growth CAPEX VS. NET DEBT/EBITDA 5 -0.3 14 0.2 0.0 4 0.3 -0.3 0.1 12 0.2 10 -0.1 3 • Capital expenditure in 4Q23 amounted to PLN 14.4m, an 14.4 8 increase of 24.2% YoY. 2 6 7.0 11.6 6.7 1 4 6.1 8.0 10.9 • Capex focused on new stores and modernizations, both in the 5.2 0 apparel and je
Slide 57: FX risk exposure
FX risk exposure PURCHASES BY CURRENCIES (PLN m) CHF, 19% CHF, 22% USD, 26% USD, 28% • FX risk is sizeable for the capital group, thus it is being hedged since 2Q16. Hedging only relates to the apparel segment. 2022 2023 • The group is a beneficiary of strengthening of zloty versus foreign EUR, 19%
Slide 58: Consistent debt reduction
Consistent debt reduction PLN m 4Q22 2Q23 4Q23 Long-term debt 20.7 15.2 2.4 • Interest bearing indebtedness includes: bank loans, finance leases and reverse factoring (taken over with Bytom S.A. merger). Bank loans 19.5 13.8 0.0 • Bank loans include: overdrafts and investment bank loans. Bank loan c
Slide 59: Shareholder structure
Shareholder structure SHAREHOLDER STRUCTURE AS AT 11.04.2024 (SHARE IN EQUITY AND VOTES) Other free-float Shareholders' 21.84% agreement Number of 31.04% % share shares/votes 1. Shareholders' agreement 72,766,027 31.04% 2. PZU OFE and DFE 45,589,125 19.44% Jerzy Mazgaj 3. NN OFE 35,750,000 13.97% 13
Slide 60: Glossary
Glossary Idea Definition Apparel segment Revenues from brands: Vistula, Wólczanka, Bytom, Deni Cler and wholesale segment, B2B and processing (until VI.2023). Jewellery segment Retail revenues of W.KRUK brand and other revenues (including B2B). Casual Revenues including the following assortment: jac
Slide 61: Thank you
Thank you VRG S.A. Pilotów 10 St., 31-462 Cracow Investor relations e-mail: relacjeinwestorskie@vrg.pl tel. +48 12 656 18 32 faks + 48 12 656 50 98 Press office VRG S.A. e-mail: sekretariat@vrg.pl e-mail: biuroprasowe@vrg.pl