Slide 1: 3Q24 results presentation
3Q24 results presentation A MODERN GROUP WITH TRADITIONS November 15, 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: New collections in off-line and on-line apparel stores
New collections in off-line and on-line apparel stores “Your Signature” collection by The new Deni Cler season began Vistula – modern, elegant formal with a show of the Autumn/Winter and semi-formal fashion, combining 2024/25 collection in September the highest quality with individual at the Polish
Slide 5: Development of W.KRUK's offer and business
Development of W.KRUK’s offer and business In 3Q24, W.KRUK welcomed new brands Another edition of the Night Flowers to its portfolio: IWC Schaffhausen – a collection – Citruses, Antrium and White Swiss brand known for its timeless design Elderberry introduced at the turn of and aviation-inspired col
Slide 6: Further optimisation of Group's floorspace
Further optimisation of Group's floorspace GROUP FLOORSPACE CHANGE YOY GROUP FLOORSPACE CHANGE YOY (ths m2) (ths m2) +1.5 8.4 -0.9 -1.2 7.3 -0.9 -1.1 -1.6 +0.0 52.6 50.5 44.1 43.2 -3.5 3Q23 VST BTM WLC DCG W.KRUK 3Q24 3Q23 Own stores Franchise stores 3Q24 • Group floorspace stood at 50.5 ths m2 at t
Slide 7: Positive result of on-line investments
Positive result of on-line investments Improved inventory Improved Improved management webpages applications Merging of on-line and off- Improving the appearance and Further improvement of line inventory under the “one functionality of apparel brand Customer Experience in sales basket” project has w
Slide 8: Favourable revenue dynamics in both segments in 3Q24
Favourable revenue dynamics in both segments in 3Q24 Jewellery segment Positive sales dynamics in the jewellery segment in each REVENUE DYNAMICS of the last 12 months, built (PLN m) on growth in the jewellery and supported by floorspace 25% 40% development. 20% 18.1% 13.7% 30% 13.2% 12.5% 12.5% 15%
Slide 9: Stronger on-line than off-line dynamics in 2024
Stronger on-line than off-line dynamics in Stores 2024 Positive sales dynamics in traditional stores in February, March, June, July REVENUE DYNAMICS and August 2024. (PLN m) 30% 50% 25% 40% Group 34.9% 20% 20.6% 48.3% 40.5% 41.7% More favorable dynamics 24.0% 19.3% 30% 15% 18.2% 14.6% on-line than o
Slide 10: 3 persons on the Management Board
3 persons on the Management Board Mateusz Kolański Michał Zimnicki Łukasz Bernacki President of the Executive Vice-President Executive Vice-President Management of the Management of the Management Board Board, CFO Board direct supervision over the direct supervision over the President of the Vistula
Slide 11: Performance by brands
Performance by brands
Slide 12: Vistula: strong YoY on-line revenue growth in 3Q24
Vistula: strong YoY on-line revenue growth in 3Q24 VISTULA BRAND REVENUES (PLN m) 71.6 65.8 67.0 63.0 63.7 10.4 6.0 9.8 51.8 7.7 50.7 14.6 47.6 14.2 13.3 46.9 12.7 7.0 11.2 6.9 10.6 8.7 10.1 10.2 9.0 8.1 7.0 46.6 43.4 46.7 44.8 34.7 39.1 33.8 31.7 29.7 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Ow
Slide 13: Vistula: 3Q24 executive summary
Vistula: 3Q24 executive summary VISTULA BRAND REVENUES VISTULA BRAND EFFICIENCY (PLN m) 51.8 50.7 3Q23 3Q24 YoY 7.0 8.7 -2.2% Revenues (PLN/m2 per month) 955 984 3.0% 10.1 YoY 8.1 Gross profit margin (%) 55.3% 56.6% 1.3pp. 34.7 33.8 Cost of stores 484 536 10.7% (PLN/m2 per month) 3Q23 3Q24 Store EBI
Slide 14: Bytom: continued YoY revenue growth in 3Q24
Bytom: continued YoY revenue growth in 3Q24 BYTOM BRAND REVENUES (mln PLN) 50.1 51.6 52.8 54.2 46.7 6.9 7.2 11.4 1.8 38.9 13.3 1.4 41.9 7.2 1.8 1.8 33.9 1.1 34.6 7.3 6.0 1.0 6.8 1.2 8.0 1.0 0.7 42.9 45.5 37.7 36.9 38.4 31.7 33.6 26.1 25.8 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Own stores Franc
Slide 15: Bytom: 3Q24 executive summary
Bytom: 3Q24 executive summary BYTOM BRAND REVENUES BYTOM BRAND EFFICIENCY (PLN m) 38.9 41.9 3Q23 3Q24 YoY 7.3 6.0 Revenues (PLN/m2 per month) 938 1,082 15.4% 1.2 1.0 +7.5% YoY Gross profit margin (%) 58.7% 58.6% -0.1pp. 31.7 33.6 Cost of stores 519 588 13.4% (PLN/m2 per month) Store EBIT (PLN m) 1.3
Slide 16: Wólczanka: dynamic revenue growth in 3Q24
Wólczanka: dynamic revenue growth in 3Q24 WÓLCZANKA BRAND REVENUES (PLN m) 37.0 35.9 28.0 27.7 30.1 25.2 24.5 18.3 21.7 17.6 20.3 14.0 13.4 10.1 13.4 12.0 3.8 11.3 3.4 7.3 2.9 2.6 3.2 2.2 2.0 2.0 1.8 14.9 14.2 15.4 13.6 11.4 8.4 10.8 10.0 10.5 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Own stores
Slide 17: Wólczanka: 3Q24 executive summary
Wólczanka: 3Q24 executive summary WÓLCZANKA BRAND REVENUES WÓLCZANKA BRAND EFFICIENCY (PLN m) 24.5 3Q23 3Q24 YoY 20.3 Revenues (PLN/m2 per month) 1,548 2,380 53.7% +20.7% 12.0 7.3 YoY Gross profit margin (%) 59.4% 59.8% 0.5pp. 2.2 2.0 Cost of stores 871 1,229 41.1% 10.8 10.5 (PLN/m2 per month) Store
Slide 18: Deni Cler: YoY revenue falls in 3Q24
Deni Cler: YoY revenue falls in 3Q24 DENI CLER BRAND REVENUES (PLN m) 16.7 17.2 14.2 13.5 1.8 13.7 1.4 12.4 13.0 12.0 11.8 1.7 1.6 1.9 5.7 5.5 1.3 1.2 1.3 1.2 4.6 4.7 4.1 4.4 4.3 4.4 4.1 9.5 9.9 7.9 7.2 6.6 7.7 7.3 6.4 6.4 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Own stores Franchise stores + mu
Slide 19: Deni Cler: 3Q24 executive summary
Deni Cler: 3Q24 executive summary DENI CLER BRAND REVENUES DENI CLER BRAND EFFICIENCY (PLN m) 12.4 3Q23 3Q24 YoY 11.8 1.3 1.2 -4.8% Revenues (PLN/m2 per month) 1,407 1,303 -7.4% 4.4 YoY 4.1 Gross profit margin (%) 59.7% 60.8% +1.1pp. Cost of stores 6.6 6.4 631 642 1,8% (PLN/m2 per month) Store EBIT
Slide 20: W.KRUK: continued revenue growth in 3Q24
W.KRUK: continued revenue growth in 3Q24 W.KRUK RETAIL REVENUES (PLN m) 225.8 197.4 17.7 12.7 166.1 169.3 17.7 177.4 179.7 152.2 14.5 154.9 10.0 10.7 141.5 7.7 8.2 11.7 13.8 13.0 8.3 11.8 9.7 10.4 7.6 11.0 9.2 190.5 170.2 153.6 156.1 133.4 146.5 149.4 134.2 124.6 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2
Slide 21: W.KRUK: 3Q24 executive summary
W.KRUK: 3Q24 executive summary W.KRUK RETAIL REVENUES W.KRUK BRAND EFFICIENCY (PLN m) 179.7 169.3 3Q23 3Q24 YoY 10.7 8.2 13.0 11.7 Revenues (PLN/m2 per month) 4,451 4,259 -4.3% +6.2% YoY Gross profit margin (%) 52.8% 52.5% -0.3pp. 149.4 156.1 Cost of stores 1,113 1,191 7.0% (PLN/m2 per month) Store
Slide 22: Group results
VRG Group results
Slide 23: Growing group's revenues and revenues/m2
Growing group’s revenues and revenues/ m2 GROUP REVENUES (PLN m) 402.3 369.0 340.8 • Group revenues in 3Q24 amounted to PLN 311.5m (+4.8% YoY), due to 319.4 335.3 297.1 311.5 267.0 278.2 growth built by dynamics in both segments. 194.9 229.3 152.7 167.8 178.1 142.0 169.8 156.0 180.3 • In 3Q24, reven
Slide 24: Growing gross profit on sales
Growing gross profit on sales GROSS PROFIT ON SALES (PLN m) 201.3 218.7 188.7 191.7 165.5 161.0 167.0 • Group gross profit on sales amounted to PLN 167.0m in 3Q24, +3.7% 137.3 149.4 100.8 88.2 120.6 93.2 YoY. 79.5 89.5 94.1 73.8 82.1 ▪ In 3Q24 gross profit on sales in apparel segment reached PLN 72.
Slide 25: EBIT in jewellery but loss in apparel segment
EBIT in jewellery but loss in apparel segment MONTHLY OPERATING COSTS PER M2 (PLN, IAS17) 1,041 1,095 1,020 1,029 950 943 • Group operating costs/m2 (IAS17) reached in 3Q24 PLN 1,029/m2 per 880 880 920 329 310 242 279 273 month, up 11.9% YoY. 225 237 259 251 • Costs of stores at PLN 756/m2 (+13.1% Y
Slide 26: Lower YoY EBIT but higher YoY net income
Lower YoY EBIT but higher YoY net income PLN m, IFRS16 3Q23 3Q24 YoY NET PROFIT (LOSS) BY SEGMENTS Revenues 297.1 311.5 4.8% (PLN m, IFRS16) Gross profit on sales 161.0 167.0 3.7% 70.0 60.0 Gross profit on sales margin 54.2% 53.6% -0.6pp. 47.3 47.7 49.9 SG&A costs 140.1 153.8 9.8% 50.0 EBIT 19.7 12.
Slide 27: YoY weakening of operating profit in 9M24
YoY weakening of operating profit in 9M24 PLN m, IFRS16 9M23 9M24 YoY Revenues 899.4 930.5 3.5% Gross profit on sales 487.1 508.1 4.3% Gross profit on sales margin 54.2% 54.6% 0.4pp. SG&A costs 416.4 454.3 9.1% EBIT 67.7 56.3 -16.9% EBIT margin 7.5% 6.0% -1.5pp. Net financial activity -4.7 -4.9 N/M
Slide 28: Growing inventory for key 4Q24
Growing inventory for key 4Q24 CHANGE IN INVENTORIES (PLN m) 716.6 570.1 +100.8 • Group inventory grew 25.7% YoY. Inventories/ m2 at the end of 3Q24 at +45.8 PLN 14,188, +30.8% YoY. • Apparel segment inventories increased by 23.6% YoY, while inventories/m2 476.5 amounted PLN 6,615, up 35.5% YoY, at
Slide 29: Growth in net debt
Growth in net debt NET DEBT/(NET CASH) VS NET DEBT/EBITDA (PLN m, IAS17 plus reverse factoring) 1.1 2.0 0.3 120.0 0.5 126.2 1.5 • Group’s net debt under IAS17 at PLN 126.2m at the end of 3Q24 vs 0.2 100.0 0.1 0.4 PLN 9.0m net cash in 3Q23. Finance leases under IFRS16 at PLN 288.4m 1.0 -0.3 0.0 80.0
Slide 30: 2024+ outlook
VRG [ O 2024+ outlook
Slide 31: Changes in apparel segment bring benefits
Changes in apparel segment bring benefits AW2023 AW2024 AW2023 AW2024 AW2023 AW2024 Searching for High-quality men's Traditional cut, high A wide range of "total Product opportunities to reach younger customers, and women's collection, clothing Traditional cut, high and growing quality, look" items,
Slide 32: Sources of growth in the jewellery segment
Sources of growth in the jewellery segment Domestic Presence in E-store Offer floorspace Hungary development development Continuation of 8 stores with an area On-line store using a Continuation development of of 0.7 ths m2 at the new engine, new of ambassador floorspace in Poland end of 3Q24. mobil
Slide 33: Group prepared for the key 4Q
Group prepared for the key 4Q November: Black Friday and December: Evening and New Cyber Monday – preparation Year's Eve offer, mainly of attractive promotions while apparel brands, high-quality taking care of the Capital products. Group's gross margin. December: Dedicated Christmas offer – both in
Slide 34: Group's floorspace in 2024
Apparel segment Jewellery segment Group’s floorspace in • c. 30% of planned annual • new stores, expansion of 2024 capex the network of traditional • the need to renovate stores, 2023 2024 target YoY stores after years of • stores offering luxury suspended by the brands Stores 350 318 -32 pandemic c
Slide 35: Targets for 2024
Targets for 2024 Opportunities: good reception of new collections of the Group's brands, improved consumer sentiment Growing gross profit on Revenue growth in both sales margin in apparel segments. segment and stable in jewellery segment. Risks: Achieving better YoY operating and net results in both
Slide 36: Dividend payments continue
Dividend payments continue Dividend policy • The Management Board intends to annually recommend to the General Meeting payment of The General Meeting approved between 20% and 70% of the consolidated net dividend payment from 2023 profit resulting from the audited consolidated earnings financial stat
Slide 37: Targets for 2025
Targets for 2025 Revenue Growing gross Operating cost growth in both profit margin. control. segments. 2024 target 2025 target YoY Stores 318 305 -13 Apparel segment m2 36,088 35,243 -2% Improved profitability in the apparel segment and operating profit increase in the jewellery Stores 177 190 +13 J
Slide 38: Q&A
VRG QGA
Slide 39: Back-up
VRG Back-up
Slide 40: Vistula: executive summary
Vistula: executive summary Autumn/Winter 2024 collection • The Autumn collection by Vistula, under the slogan "Your Signature", is a combination of modern elegance with classic style - from perfectly tailored cashmere coats, through the highest quality wool suits, to elegant tuxedo dresses and leath
Slide 41: Vistula: 9M24 executive summary
Vistula: 9M24 executive summary VISTULA BRAND REVENUES VISTULA BRAND EFFICIENCY (PLN m) 166.4 161.2 9M23 9M24 YoY 20.0 26.6 33.3 -3.1% Revenues (PLN/m2 per month) 1,031 1,024 -0.7% 26.3 YoY Gross profit margin (%) 56.6% 58.1% 1.4pp. 113.2 108.2 Cost of stores 494 532 7.7% (PLN/m2 per month) 9M23 9M2
Slide 42: Bytom: executive summary
Bytom: executive summary Autumn/Winter 2024 collection • Continuation of the current direction, in which the key values are friendship, brotherhood, passion and relationships. The collection for the upcoming season draws inspiration from the English style - elegant, subdued, but at the same time fu
Slide 43: Bytom: 9M24 executive summary
Bytom: 9M24 executive summary BYTOM BRAND REVENUES BYTOM BRAND EFFICIENCY (PLN m) 130.6 9M23 9M24 YoY 124.5 19.8 22.5 4.0 3.1 Revenues (PLN/m2 per month) 990 1,101 11.2% +4.9% YoY Gross profit margin (%) 58.9% 58.6% -0.4pp. 100.7 104.9 Cost of stores 520 572 9.9% (PLN/m2 per month) Store EBIT (PLN m
Slide 44: Wólczanka: executive summary
Wólczanka: executive summary Autumn/Winter 2024 collection • The “Perfect Office Shirt” campaign is a comprehensive offer for the upcoming season/ Wólczanka offers shirts that combine elegance with modern technologies, such as Traveler (does not require ironing), Easy Care (easy to care for) or Wrin
Slide 45: Wólczanka: 9M24 executive summary
Wólczanka: 9M24 executive summary WÓLCZANKA BRAND REVENUES WÓLCZANKA BRAND EFFICIENCY (PLN m) 79.8 9M23 9M24 YoY 69.7 Revenues (PLN/m2 per month) 1,730 2,177 25.8% 28.7 +14.6% 39.4 YoY Gross profit margin (%) 58.8% 59.5% 0.7pp. 7.5 6.3 Cost of stores 890 1,100 23.6% 33.5 34.1 (PLN/m2 per month) Stor
Slide 46: Deni Cler: executive summary
Deni Cler: executive summary Autumn/Winter 2024 collection • The new Deni Cler collection for the Autumn/Winter 2024 season is an opportunity to delve deeper into the process of creating the collection, which can be seen incorporated into the collection capsules. • INSPIRATION - the idea of the col
Slide 47: Deni Cler: 9M24 executive summary
Deni Cler: 9M24 executive summary DENI CLER BRAND REVENUES DENI CLER BRAND EFFICIENCY (PLN m) 40.0 9M23 9M24 YoY 38.4 4.6 4.5 -3.9% Revenues (PLN/m2 per month) 1,517 1,430 -5.8% 13.7 YoY 12.5 Gross profit margin (%) 62.1% 62.5% 0.4pp. Cost of stores 21.8 21.4 635 649 2.2% (PLN/m2 per month) Store EB
Slide 48: W.KRUK: executive summary
W.KRUK: executive summary Novelties in collections • Follow is Natalia Szroeder's signature collection for W.KRUK, presented in September 2024. A dynamic combination of modernity and romantic vintage, a variety of styles, elements, stones. Modern shapes, retro pearls, magical lapis lazuli, romantic
Slide 49: W.KRUK: 9M24 executive summary
W.KRUK: 9M24 executive summary W.KRUK RETAIL REVENUES W.KRUK BRAND EFFICIENCY (PLN m) 512.1 476.9 9M23 9M24 YoY 30.4 23.5 32.8 37.8 Revenues (PLN/m2 per month) 4,198 4,167 -0.7% +7.4% YoY Gross profit margin (%) 52.5% 52.5% 0.0pp. 420.6 443.9 Cost of stores 1,081 1,163 7.6% (PLN/m2 per month) Store
Slide 50: Capital group's structure
Capital group’s structure VRG Companies included in the consolidated statements for 3Q24 Jewellery segment Apparel segment Other activity W.KRUK S.A. VRG S.A. VG Property sp. z o.o. parent company in liquidation Jewellery, watches, accessories Real estate Vistula, Wólczanka, Bytom WK 1840 HU Kft. DC
Slide 51: Continued optimisation of number of stores
Continued optimisation of number of stores Number of stores 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 total 391 383 382 368 359 358 350 346 331 322 Apparel segment franchise 123 119 116 104 92 84 78 75 67 66 total 144 142 142 137 136 135 132 126 119 119 Vistula franchise 62 61 61 55 51 47 45
Slide 52: Floorspace YoY
Floorspace YoY M2 floorspace 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 total 40,385 39,778 39,833 39,333 39,007 39,818 39,470 38,951 37,140 36,301 Apparel segment franchise 9,236 9,019 8,798 7,962 7,175 6,582 6,216 6,023 5,415 5,494 total 18,404 18,118 18,139 17,733 17,815 18,337 18,386 17,7
Slide 53: Own e-stores of five brands
Own e-stores of five brands ON-LINE SALES BY SEGMENTS (PLN m) 17.7 • We have own e-stores for all five retail brands. Our aim is to develop 12.7 9.7 on-line stores of own brands (monoshops). 8.3 10.0 10.7 7.6 7.7 8.2 46.1 • Revenues and costs of on-line stores are allocated directly to the brands. 4
Slide 54: Higher costs/m2
Higher costs/m2 OPERATING COSTS MONTHLY/M2 (PLN, excl. IFRS16) • Differences in SG&A costs/ m2 between segments result from different 1,970 2,021 business models. 1,512 1,510 1,479 1,584 1,593 1,395 1,367 • Jewellery segment is characterised by higher revenues and costs/m2 than these of the apparel
Slide 55: Reduction in off-line marketing expenses
Reduction 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.
Slide 56: Historical quarterly results, IFRS16
Historical quarterly results, IFRS16 PLN m 4Q22 4Q23 YoY 1Q23 1Q24 YoY 2Q23 2Q24 YoY 3Q23 3Q24 YoY Revenues 369.0 402.3 9.0% 267.0 278.2 4.2% 335.3 340.8 1.6% 297.1 311.5 4.8% Gross profit on sales 201.3 218.7 8.7% 137.3 149.4 8.8% 188.7 191.7 1.6% 161.0 167.0 3.7% Gross profit on sales margin 54.5%
Slide 57: Results under IAS17
Results under IAS17 PLN m, IAS17 3Q23 3Q24 YoY 9M23 9M24 YoY Revenues 297.1 311.5 4.8% 899.4 930.5 3.5% Gross profit on sales 161.0 167.0 3.7% 487.1 508.1 4.3% Gross profit on sales margin 54.2% 53.6% -0.6pp. 54.2% 54.6% 0.4pp. SG&A costs 143.2 156.1 9.1% 428.3 461.2 7.7% Net other operating line -1
Slide 58: Capex supports development
Capex supports development CAPEX VS. NET DEBT/EBITDA 5 -0.3 0.4 14 0.0 0.5 4 0.3 -0.3 0.1 12 10 0.2 1.1 3 12.4 • Capital expenditure in 3Q24 amounted to PLN 8.9m, an increase 14.4 8.9 8 11.9 of 33.8% YoY. 2 6 7.0 11.6 6.7 1 4 8.0 10.9 • Capex focused on new stores and modernizations, both in the 0 a
Slide 59: FX risk exposure
FX risk exposure PURCHASES BY CURRENCIES (PLN m) CHF, 17% CHF, 23% USD, 26% USD, 31% • FX risk is sizeable for the capital group, thus it is being hedged since 2Q16. Hedging only relates to the apparel segment. 9M23 9M24 • The group is a beneficiary of strengthening of zloty versus foreign EUR, 19%
Slide 60: Growing net debt
Growing net debt PLN m 3Q23 4Q23 3Q24 Long-term debt 15.3 2.4 2.0 • Interest bearing indebtedness includes: bank loans, finance leases and reverse factoring (taken over with Bytom S.A. merger). Bank loans 13.8 0.0 0.0 • Bank loans include: overdrafts and investment bank loans. Bank loan collateral c
Slide 61: Shareholder structure
Shareholder structure Other free-float 20% SHAREHOLDER STRUCTURE AS AT 15.11.2024 (SHARE IN EQUITY AND VOTES) Shareholders' agreement Number of 41% % share shares/votes Santander TFI 5% 1. Shareholders' agreement 96,772,005 41.28% 2. PZU OFE and DFE 45,589,125 19.44% NN OFE 3. NN OFE 32,750,000 13.9
Slide 62: 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 63: 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