Lojas Renner S.A. · BMFBOVESPA:LREN3
Lojas Renner — Investor Presentation (December 2020)
48 slides from Lojas Renner's investor presentation, December 2020
Slide 1: Institutional Presentation December 2020
INSTITUTIONAL PRESENTATION DECEMBER 2020 B3: LREN3; USOTC:LRENY December 2020 Lojas Renner S.A.
Slide 2: Company Overview
R$ 10.3 BILLION +600 THOUSAND OF TOTAL GROSS REVENUE IN 2020 CUSTOMERS VISIT OUR STORES DAILY 606 STORES 33.8 MM 385 RENNER / 8 ASHUA PRIVATE LABEL CARDS 113 CAMICADO / 100 YOUCOM OVERVIEW COMPANY 4 DISTRIBUTION CENTERS 20 (SC & RJ FULLY AUTOMATED) PROPRIETARY BRANDS 24.8 THOUSAND +800 MM EMPLOYEES
Slide 3: Company Overview: Competitive Advantages
COMPETITIVE ADVANTAGES CONSISTENT POSITIONING CLEAR VALUE PROPOSITION, WITH FOCUS ON WOMEN OVERVIEW COMPANY LIFESTYLES YOU HAVE YOUR STYLE, RENNER HAS THEM ALL ENCHANTMENT TO SURPASS CUSTOMERS EXPECTATIONS SALES CHANNELS INTEGRATION OMNI EXPERIENCE TO DELIGHT OUR CUSTOMERS 3 December 2020 Lojas Renn
Slide 4: Company Overview: Corporate Culture
ENGAGEMENT ENGAGED PEOPLE OVERVIEW CORPORATE CULTURE COMPANY ENCHANTMENT DELIGHTED CUSTOMERS RESULTS OBSTINACY GENERATING EXCEPTIONAL RESULTS 4 December 2020 Lojas Renner S.A.
Slide 5: Agenda
• OUR BUSINESSES • APPAREL RETAIL • STRATEGIC PRIORITIES • VALUE CREATION • FACT SHEET December 2020 Lojas Renner S.A.
Slide 6: Our Businesses
OUR BUSINESSES December 2020 Lojas Renner S.A.
Slide 7: Our Businesses
OUR BUSINESSES 7 December 2020 Lojas Renner S.A.
Slide 8: Our Businesses: Renner
• LISTED SINCE 1967 • LARGEST FASHION RETAILER IN OUR BUSINESSES BRAZIL • TARGET CUSTOMERS: 18 TO 39 AGE GROUP, IN THE A-, B AND C+ SOCIAL CLASSES • 385 STORES • E-COMMERCE • 90% OF CONTRIBUTION ON CONSOLIDATED NET REVENUES IN 2020 8 December 2020 Lojas Renner S.A.
Slide 9: Our Businesses: Camicado
• ACQUIRED IN 2011 OUR BUSINESSES • LEADER IN HOME AND DECOR • TARGET CUSTOMERS: 18 TO 39 AGE GROUP, IN THE A-, B AND C+ SOCIAL CLASSES • 113 STORES • E-COMMERCE + MARKETPLACE • 7% OF CONTRIBUTION ON CONSOLIDATED NET REVENUES IN 2020 9 December 2020 Lojas Renner S.A.
Slide 10: Our Businesses: Youcom
• LAUNCHED IN 2013 • SPECIALIZED IN YOUNG LIFESTYLE OUR BUSINESSES • TARGET CUSTOMERS: 18 TO 35 AGE GROUP, IN THE A-, B AND C+ SOCIAL CLASSES • 100 STORES • E-COMMERCE • 3% OF CONTRIBUTION ON CONSOLIDATED NET REVENUES IN 2020 10 December 2020 Lojas Renner S.A.
Slide 11: Our Businesses: Ashua
• LAUNCHED IN 2016 • CURVE & PLUS SIZE FORMAT OUR BUSINESSES • TARGET CUSTOMERS: 25 TO 45 AGE GROUP, IN THE A-, B AND C+ SOCIAL CLASSES • SIZES: FROM 46 TO 54 • 8 PILOT STORES • E-COMMERCE • CONSOLIDATED ON RENNER’S INCOME STATEMENT 11 December 2020 Lojas Renner S.A.
Slide 12: Our Businesses: Realize CFI
• FINANCIAL INSTITUTION ESTABLISHED IN 2017 • FEATURES AND SERVICES TO LEVERAGE CONSUMER EXPERIENCE OUR BUSINESSES • USED AS A LOYALTY TOOL TO BOOST RETAIL SALES • SEGREGATED DIGITAL PLATFORM WITH FLEXIBLE TECH INFRASTRUCTURE • +12 MILLION CUSTOMERS THAT ARE ABLE TO BUY AND RECOGNIZED BRAND • PRIVAT
Slide 13: Apparel Retail
APPAREL RETAIL December 2020 Lojas Renner S.A.
Slide 14: Plenty of Room to Grow
WE STILL HAVE PLENTY OF ROOM TO GROW APPAREL MARKET BY COUNTRY & MARKET SHARE OF MAIN PLAYERS Gross Revenues in U$ billion 10.0% APPAREL RETAIL 4.7% 18.0% 12.2% Source: Statista and players’ website 14 December 2020 Lojas Renner S.A.
Slide 15: Fragmented Apparel Market with Consolidation Opportunities
Source: Jornal DCI, IBOPE, Euromonitor, IBGE, Bank of America Merril Lynch and Lojas Renner estimates. IN A FRAGMENTED APPAREL MARKET WITH OPPORTUNITIES FOR CONSOLIDATION APPAREL MARKET MARKET CONCENTRATION OF CONCENTRATION OTHER SECTORS IN BRAZIL 1º RENNER 20% OF EXISTING DRUGSTORES APPAREL RETAIL
Slide 16: Apparel Online Penetration and Prospects
APPAREL RETAIL December 2020 Lojas Renner S.A. SALES IN 2018 AND GREAT APPAREL ONLINE OVER TOTAL RETAIL PENETRATION SALES ONLINE SEGMENT PROSPECTS IN THE 5 YEARS 2X OVER THE NEXT Source: JPM – Brazil Apparel – Diving into online channel 06.14.2018 UBS – Brazil eCommerce – UBS Evidence Lab Inside: Li
Slide 17: Strategic Priorities
STRATEGIC PRIORITIES December 2020 Lojas Renner S.A.
Slide 18: E-commerce Penetration in Brazil Is Low but Growing
ALTHOUGH E-COMMERCE PENETRATION IN BRAZIL IS STILL LOW, IT IS GROWING CONSISTANTLY E-COMMERCE TOTAL PENETRATION APPAREL PARTICIPATION IN E-COMMERCE SALES STRATEGIC PRIORITIES 34% 27% 26% OTHERS 15% 16% AUTO 2% 5% SPORTS GOODS 4% BEAUTY 5% APPAREL 6% Fonte: UBS Research FURNITURES 8% ELETROELECTRONIC
Slide 19: Benchmarks Suggest Balance Between Online and Offline
AND BENCHMARKS SUGGEST A BALANCE BETWEEN ONLINE / OFFLINE CHANNELS OPINIONS ON PICK UPS AND RETURNS IN STORES STRATEGIC PRIORITIES 45% 52% 50% 60% 33% 46% 30% 30% 35% 43% 25% 36% STORE RETURNS STORE PICK UP Source: UBS Evidence Lab. / Identifying Mispricings from 18% eCommerce Disruption 06.20.2018
Slide 20: Purchase Journey by Age
WITH NO MEANING DIFFERENCES BY AGE GROUPS PURCHASE JOURNEY BY AGE SURVEY WITH 39,554 PARTICIPANTS (USA) Source: Merrill Lynch – Gen Z is changing the landscape again 04.16.2018 STRATEGIC PRIORITIES 24% 26% 27% 23% 23% 13% 13% 12% 14% 15% 19% 17% 22% 22% 22% 41% 38% 37% 44% 48% 18-21 22-30 31-38 39-5
Slide 21: Customers Value Interaction with Apparel Before Purchase
BECAUSE THEY VALUE THE INTERACTION WITH APPAREL PRODUCTS BEFORE PURCHASING IT PET SUPPLIES OFFICE SUPPLIES BOOKS AUTO PARTS STRATEGIC PRIORITIES HOUSEHOLD PRODUCTS ELETRONICS POWER TOOLS USA PERSONAL CARE PRODUCTS Q: WHAT ARE THE MAIN eCommerce Disruption 20.06.2018 - 2.500 respondents. Fonte: UBS E
Slide 22: Digital Cycle: Structural Projects Under Development
1. DIGITAL CYCLE RENNER STRUCTURAL PROJECTS UNDER DEVELOPMENT STRATEGIC PRIORITIES CUSTOMER DATA DRIVEN OMNI SINGLE-VIEW DECISION ON TRANSFORMATION PRODUCT LIFECYCLE • TRANSFORMING • APPLY TECHNOLOGY IN • CREATE A SINGLE DATA IN ACTIONS COLLECTIONS SHOPPING EXPERIENCE • CUSTOMER • PRODUCT • CHANNELS
Slide 23: Digital Cycle: Customer Single-View
1. DIGITAL CYCLE CUSTOMER SINGLE-VIEW IDENTIFYING UNKNOWN CUSTOMERS STRATEGIC PRIORITIES • BIG DATA • IDENTIFICATION OF CREATING A UNKNOWN THROUGH PERSONALIZED CUSTOMERS MAXIMAZING COMMUNICATION AND CONSISTENT WITH IDENTIFIED BASE OF • PERSONALIZED CUSTOMERS CUSTOMER COMMUNICATION RELATIONSHIP • PER
Slide 24: Digital Cycle: Data Driven Decision on Product Lifecycle
1. DIGITAL CYCLE DATA DRIVEN DECISION ON PRODUCT LIFECYCLE APPLYING MORE INTELLIGENCE ON THE ASSORTMENT & DISTRIBUTION PROCESS WITH HIGH ASSERTIVENESS BY SKU PER STORE • ARTIFICIAL INTELLIGENCE STRATEGIC PRIORITIES • ALGORITHMS DOMINATING THE THROUGH IMPROVING THE SUPPLY CHAIN TO • PREDICTION PROCES
Slide 25: Digital Cycle: Omni Transformation
1. DIGITAL CYCLE OMNI TRANSFORMATION ADEQUATING THE SALES CHANNELS EQUALIZING THE (PHYSICAL COMMERCIAL POLICIES INFRASTRUCTURE FOR THE DIFFERENT • USE OF STORES’ INVENTORY STRATEGIC PRIORITIES SYSTEMS & CHANNELS (PRICING & PROCESSES) PAYMENT CONDITIONS) • FASTER DELIVERIES • LOWER DELIVERY COST THRO
Slide 26: Digital Cycle: Renner Structural Projects
1. DIGITAL CYCLE RENNER STRUCTURAL PROJECTS BETTER STRATEGIC PRIORITIES SHOPPING = EXPERIENCE + + GENERATING CUSTOMER SINGLE VIEW DATA DRIVEN DECISION TO THE OMNI TRANSFORMATION MORE WHOLE PRODUCT RESULTS LIFECYCLE • MARKET SHARE • SPEED TO MARKET • OPERATIONAL EFFICIENCY 26 December 2020 Lojas Renn
Slide 27: Structural Projects: Current Status
1. DIGITAL CYCLE RENNER STRUCTURAL PROJECTS – CURRENT STATUS + + STRATEGIC PRIORITIES CUSTOMER DATA DRIVEN OMNI SINGLE VIEW DECISION TO THE TRANSFORMATION WHOLE PRODUCT LIFECYCLE •Analysis and transformation of •Allocation of 17% of the items data guided • Mobile checkout represents 20% of sales int
Slide 28: Market Consolidation
2. MARKET CONSOLIDATION EXISTING STORES NEW STORES SMALL STORES STORE TARGETS STRATEGIC PRIORITIES • Increase sales density • Existing Shopping Malls • Smaller Cities • Store park maturation • New Shopping Malls • Micro regions Aprox. 520 stores (2025) • Consolidation of the • Stand-alone Stores • S
Slide 29: Promoting the Enchantment on the Digital Cycle
3. PROMOTING THE ENCHANTMENT ON THE DIGITAL CYCLE ABSORB TECHNOLOGY TO DELIVER AND REINFORCE OUR VALUE PROPOSITION e= n STRATEGIC PRIORITIES PEOPLE + PRODUCTS & SERVICES + TECHNOLOGY Delivering the best fashion and lifestyle experience for the mid/upper segment, Enchanting our customers with quality
Slide 30: Value Creation
VALUE CREATION December 2020 Lojas Renner S.A.
Slide 31: Consistent Market Share Gains
THROUGH CONSISTENT MARKET SHARE GAINS LOJAS RENNER VS APPAREL & FOOTWEAR MARKET ACCUMULATED GROWTH (BRAZIL) 250 +128.0% 200 VALUE CREATION 150 +11.3% 100 50 0 2012 2013 2014 2015 2016 2017 2018 2019 Lojas Renner PMC Vestuário e Calçados 31 December 2020 Lojas Renner S.A.
Slide 32: Gross Margin Improvements
WITH GROSS MARGIN IMPROVEMENTS 63.2% 60.5% 59.8% 59.5% 59.2% 59.8% 59.3% 57.8% VALUE CREATION 59.2% 59.3% Lojas Renner 58.3% 57.0% 56.7% 57.4% 56.3% 56.3% 55.7% 55.0% 56.5% 55.7% 55.7% 55.9% Global 53.8% 54.8% 54.4% Benchmark 1 53.1% 53.4% 53.0% 52.9% 52.6% 54.9% 52.3% 52.5% 53.3% 51.1% 53.3% 52.9%
Slide 33: An Austere Operation
AND AN AUSTERE OPERATION OPERATING EXPENSES OVER NET REVENUES 52.1% Domestic VALUE CREATION 49.1% 48.7% Player 1 48.2% Domestic 45.3% Player 2 For comparison purposes, expenses exclude IFRS 16. 46.6% 43.3% 43.5% Player 42.8% Nacional 3 42.1% 41.0% 41.3% Global 40.6% Benchmark 2 40.5% 41.6% 39.9% 39.
Slide 34: Fact Sheet
FACT SHEET December 2020 Lojas Renner S.A.
Slide 35: Company Background
COMPANY BACKGROUND DEBUT IN THE NORTHEAST EXPANSION FINANCIAL INTO THE PRODUCTS REALIZE CFI STATES OF CONSTITUTION A.J. RENNER PRESENT IN SANTA BEGINS CO-BRANDED ALL BRAZILIAN DEBUT IN CATARINA OPERATIONS CREDIT CARD STATES AND URUGUAY AND PARANÁ FIRST FD HEAVY PHASE OUT OF STORES IN E-COMMERCE FULL
Slide 36: Geographical Footprint
GEOGRAPHICAL FOOTPRINT 21 2 6 North 2 1 RR AP 55 3 Northeast 23 6 2 9 2 6 2 3 2 10 2 1 AM PA PI RN MA CE 2 4 2 PB 3 9 4 1 PE 22 RO FACT SHEET 1 1 AL 4 AC 1 1 TO 2 13 13 5 SE 3 1 77 2 2 BA EXPANSION OF SELLING AREA DF 1 2 10 4 CAGR (2016 – 2020) = 7.2% MT 6 10 2 GO 3 28 7 32 11 MG 10 10 3 186 53 184
Slide 37: Corporate Governance
CORPORATE GOVERNANCE SHAREHOLDER’S FISCAL COUNCIL MEETING • 100% FREE FLOAT AND LISTED ON B3 NOVO MERCADO • 100% COMMON SHARES AND TAG ALONG Board of Directors • MAJORITY OF INDEPENDENT MEMBERS VICE . MEMBER MEMBER MEMBER MEMBER MEMBER MEMBER ON THE BOARD OF DIRECTORS (88%), WITH DIFFERENT CHAIRMAN
Slide 38: Sustainability
SUSTAINABILITY 1 RESPONSIBLE 4 SUSTAINABLE SUPPLIERS PRODUCTS AND SERVICES Goal 1 Goal 5 Create value by respecting the Deliver sustainable, quality environment, human product and service lines, and labor rights and communicate customer FACT SHEET value RESPONSIBLE 2 ECO-EFFICIENT FASHION 3 ENGAGE:
Slide 39: Sustainability: 2021 Goals and Commitments
SUSTAINABILITY 2021 GOALS AND COMMITMENTS FACT SHEET • 80% LESS IMPACTING PRODUCTS, 100% CERTIFIED COTTON • 100% OF THE NATIONAL AND INTERNATIONAL RESALE CHAIN WITH SOCIAL AND ENVIRONMENTAL CERTIFICATION • 75% OF CORPORATE ENERGY CONSUMPTION WILL BE FROM RENEWABLE ENERGY SOURCES (RENEWABLE ENERGY SO
Slide 40: Market Positioning: Social Classes
MARKET POSITIONING AVERAGE MONTHLY HOUSEHOLD INCOME + 3% OF HOUSEHOLDS A R$ 20,273.00 24% OF TOTAL WAGE BILL - 16% OF CONSUMPTION SOCIAL CLASSES RENNER FACT SHEET + 24% OF HOUSEHOLDS B R$ 5,351.00 47% OF TOTAL WAGE BILL 38% OF CONSUMPTION - + 52% OF HOUSEHOLDS C R$ 1,910.00 27% OF TOTAL WAGE BILL -
Slide 41: Lifestyle Strategy
LIFESTYLE STRATEGY LIFESTYLE: YOU HAVE YOUR STYLE, RENNER HAS ALL OF THEM. EACH BRAND REPRESENTS THE LIFESTYLE OF A CUSTOMER GROUP BASED ON THEIR ATTITUDES, INTERESTS, VALUES AND PERSONALITIES. FACT SHEET 41 December 2020 Lojas Renner S.A.
Slide 42: Lifestyle Strategy
LIFESTYLE STRATEGY LIFESTYLE: YOU HAVE YOUR STYLE, RENNER HAS THEM ALL. • BEST USE OF SHOPPING TIME • REDUCES NEED FOR MARKDOWNS • INCREASES OPPORTUNITIES FOR CROSS-SELLING • ONE-STOP-SHOP FOR THE WHOLE FAMILY FACT SHEET 42 December 2020 Lojas Renner S.A.
Slide 43: Macroeconomic Influences
MACROECONOMIC INFLUENCES UNEMPLOYMENT RATE 14.1 CONSUMER CONFIDENCE LEVEL AND RETAILING BUSINESS 93 82 mai/18 nov/18 mai/19 mai/20 nov/17 fev/18 fev/19 nov/19 fev/20 ago/18 ago/19 ago/20 Jun-20 Mar-18 Jun-18 Mar-19 Jun-19 Mar-20 Dec-19 Dec-17 Dec-18 Sep-18 Sep-19 Sep-20 FACT SHEET Unemployment Rate
Slide 44: Main Figures – Consolidated
MAIN FIGURES – CONSOLIDATED (R$ MM) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4Q16 4Q17 4Q18 4Q19 4Q20 Net Revenue from Merchandise Sales 2,896.6 3,462.0 3,913.8 4,642.6 5,450.9 5,721.8 6,600.1 7,485.4 8,474.7 6,660.6 1,920.5 2,222.4 2,595.1 2,873.1 2,919.6 Same Store Sales 7.2% 8.8% 5.8% 11
Slide 45: Main Figures Consolidated
MAIN FIGURES CONSOLIDATED NET REVENUE GROSS PROFIT FROM RETAILING CAGR (2016 – 2020) = 3.9% CAGR (2016 – 2020) = 2.1% 4,767.4 8,474.7 4,228.0 7,485.4 6,660.6 3,677.2 6,600.1 3,459.3 5,721.8 3,185.1 55.7% 55.7% 56.5% 56.3% 51.9% 9.2% 7.4% 8.7% -0.2% -23.9% FACT SHEET 2016 2017 2018 2019 2020 2016 201
Slide 46: Main Figures – Financial Products
MAIN FIGURES – FINANCIAL PRODUCTS (R$ MM) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4Q16 4Q17 4Q18 4Q19 4Q20 Result from Financial Products 125.1 148.9 173.9 217.6 208.4 251.3 331.6 349.4 391.4 81.9 62.9 75.7 78.7 99.4 59.6 % Over Total Adjusted EBITDA 21.0% 21.0% 20.8% 20.7% 16.7% 18.8% 22.
Slide 47: Main Figures – Financial Products
MAIN FIGURES – FINANCIAL PRODUCTS FINANCIAL PRODUCTS RESULTS DELINQUENCY RATES – TOTAL PORTFOLIO CAGR (2016 – 2020) = -24.4% 3,443.8 3,517.3 391.4 349.4 2,785.7 331.6 2,316.5 251.3 1,930.9 16.8% 16.5% 15.9% 15.3% 13.8% 15.7% 13.6% 11.0% 11.1% 12.1% 10.1% 22.5% 19.7% 20.0% 81.9 11.7% 18.8% FACT SHEET
Slide 48: Investor Relations Contacts
Alvaro Azevedo – CFO Paula Picinini – Investor Relations and International Expansion Officer paula.picinini@lojasrenner.com.br Carla Sffair – Investor Relations carla.sffair@lojasrenner.com.br Mauricio Toller – Investor Relations mauricio.toller@lojasrenner.com.br Luciana Moura – Investor Relations