Slide 1: Results Presentation 2018 Q2
R E S ULT S P R E S E N TAT ION 2018 Q 2
Slide 2: Disclaimer
02 DI S CL A IME R R E S U LT S P R E S E N T A T I O N 2 0 18 Q 2 This presentation (Presentation) has been prepared by CCC S.A. based in Polkowice („CCC”). The presentation is for information only and its purpose is to present selected data on CCC Capital Group (CCC Group). This presentation shoul
Slide 3: Agenda
03 AG E NDA R E S U LT S P R E S E N T A T I O N 2 0 18 Q 2 • Key developments • Financial results • Investments • Summary • Q&A
Slide 4: Key Developments
KEY DE V E L OP ME N T S
Slide 5: Key Developments Q2
05 K E Y DE V E L OP ME N T S Q 2 2 018 NEW M&A STORE WORKING FLAGSHIP COSTS CAPITAL REDUCTION OPTIMIZATION • New 2500 sqm flagship • Acquisition of second biggest • Lower rent and labour • Stepping up improvement store opened in Warsaw. player on Swiss market. costs in stores. of trade payable turn
Slide 6: CCC Group in Q2
06 C C C GR OUP IN Q 2 2 018 KEY DEVELOPMENTS 660 ONLINE k sqm 56% REVENUE GROWTH floorspace +35% yoy +48 k sqm organic growth YTD 18% GROUP’S REVENUE GROWTH -1% LFL IN OFFLINE STORES gross margin in offline business up by 2,2% SALES 14 COUNTRIES ONLINE store costs per sqm lower by 6% ALREADY IN 22
Slide 7: CCC Group already in 22 countries
07 C C C GR OUP A L R E A DY IN 2 2 C OUN T R IE S KEY DEVELOPMENTS STORE COUNT Q2 2017 Q2 2018 YOY Sweden Estonia 2 Russia 24 Own, of which: 819 1 143 324 – Voegele — 208 208 Latvia 7 – EOBUWIE — 2 2 Lithuania 4 Franchise 70 21 -49 Total [count] 889 1 164 275 Poland 462 FLOORSPACE Q2 2017 Q2 2018 Y
Slide 8: Dynamic floorspace growth
08 DY N A MIC F L OOR S PACE GR OW T H KEY DEVELOPMENTS FLOORSPACE GROWTH YEAR TO DATE FLOORSPACE GROWTH YEAR TO DATE BY SEGMENT [k sqm] [k sqm] +87 660 +48 KVAG WE 84 95% YTD 536 -4 -7 13,2% abroad PL 26 11% YTD abroad 45,9% 54,5% +124 k sqm +23% YTD Others 9 Of which: 16% YTD +4 k sqm expansion +8
Slide 9: Like for like sales
09 L IK E F OR L IK E S A L E S KEY DEVELOPMENTS LFL BY REGION WEEKLY SALES BREAKDOWN IN POLAND Q2 14,8% 13,7% Sunday -11,3 pp 12,1% 10,1% Saturday 7,6% +2,9 pp 6,1% 4,6% Friday +1,4 pp 3,0% 0,5% Thursday +0,1 pp -1,2% -1,4% Wednesday +1,5 pp Tuesday +3,1 pp Monday +2,3 pp -12,9% CCC Poland CCC CE C
Slide 10: Continuing rise of e-commerce sales share
10 C ON T INUING R I S E OF E - C OMME R CE S A L E S S H A R E KEY DEVELOPMENTS QUARTERLY SALES CCC GROUP SALES [M PLN] [M PLN] e-commerce share 13% —> 17% Q2 2017 1 126 1 361 Poland 50 1 332 1 126 1 126 CEE 65 987 WE 12 720 694 665 Others 11 Wholesale+ -15 Production e-commerce 83 Q3 2016 Q4 2016
Slide 11: Second best quarterly sales in history
11 KEY DEVELOPMENTS S E C OND BE S T QUA R T E R LY S A L E S IN HI S T ORY OFFLINE CHANNEL ONLINE CHANNEL [M PLN] [M PLN] sales growth of 13% sales growth of 56% 250 232 1 400 199 1 200 1 162 200 1 100 1 021 169 1 000 977 149 146 841 150 800 105 111 592 609 600 525 100 73 400 50 200 0 0 Q3 2016 Q4
Slide 12: Continuation of successful expansion of eobuwie
12 C ON T INUAT ION OF S UC CE S S F UL E X PA N S ION OF E OBU W IE KEY DEVELOPMENTS Sweden EOBUWIE REVENUES Lithuania [M PLN] 250 Poland 5,9% Germany Ukraine 200 +56% Czech Rep. Slovakia 46,9% 150 France Hungary Switzerland Romania 49,8% 100 Bulgaria Italy 50 47,2% 50,2% Spain Greece 0 2Q 2017 2Q
Slide 13: Financial Results
For comparability reasons, everywhere where it isn’t indicated otherwise, the financials are presented without changes resulting from introduction of IFRS 16. F IN A NCI A L R E S ULT S
Slide 14: Substantial growth of EBITDA
14 S UB S TA N T I A L GR OW T H OF E BI T DA ( M P L N ) F I N A N C I A L R E S U LT S WITHOUT IFRS 16 IFRS 16 M PLN Q2 2017 Q2 2018 YOY IFRS 16 Q2 2018 • Growth of gross profit EFFECT faster than growth of sales: +1,6pp consolidated gross Sales 1 125,8 1 332,3 18,3% 1 332,3 profit on sales margin
Slide 15: Operating results by segments
15 OP E R AT ING R E S ULT S BY S E GME N T S F I N A N C I A L R E S U LT S SALES SEGMENT’S RESULT * Segment (M PLN) Q2 2017 Q2 2018 YOY Q2 2017 Q2 2018 YOY Poland 580 630 9% 127 145 14% CEE 224 290 29% 42 46 10% WE 110 122 11% -17 -27 N/A Others 18 29 61% 2 4 100% Retail 932 1 071 15% 154 168 9% E
Slide 16: Significant growth of gross margin
16 S IGNIF ICA N T GR OW T H OF GR O S S M A R G IN F I N A N C I A L R E S U LT S QUARTERLY GROSS MARGIN GROSS MARGIN [%] [%] Q2 2017 vs Q2 2018 55,8% 60% 53,6% 53,8% offline 52,2% 55% CCC Group 53,8% 53,8% 50% 52,2% 52,1% 51,1% 51,0% 48,7% 44,0% 47,8% 43,2% 45% online 40% 35% Q3 2016 Q4 2016 Q1 20
Slide 17: SG&A costs analysis
17 S G & A C O S T S A N A LYS I S (w i t hou t IF R S 16) F I N A N C I A L R E S U LT S QUARTERLY SG&A COSTS SG&A COSTS BY SALES CHANNEL [M PLN] [M PLN] + 80% Yoy 550 512 64 51 72 44 27 40 43 443 41 441 411 24 38 172 + 22% Yoy * 366 22 156 22 114 107 109 Costs of KVAG + Shoe Express 87 24 M PLN 47
Slide 18: SG&A costs analysis
18 S G & A C O S T S A N A LYS I S F I N A N C I A L R E S U LT S CHANGE COMPONENTS [M PLN] MARKETING: • new product categories • n ew customer groups yoy growth first effects • d evelopment of < 5% of business +83k sqm retail e-marketing optimisation floorspace +56% online M&A 19 5 sales growth 33
Slide 19: Decrease of store costs per square meter
19 DE CR E A S E OF S T OR E C O S T S P E R S QUA R E ME T E R (w i t hou t IF R S 16) F I N A N C I A L R E S U LT S SG&A / sqm STORE COSTS / sqm [PLN per month] * [PLN per month] ANALYSIS * e-commerce: +14 PLN 21 30 31 44 33 44 – 6% YOY 350 320 328 306 28 284 17 293 26 16 17 25 82 106 80 104 210
Slide 20: First visible effects of cost cutting programme
20 F IR S T V I S IBL E E F F E C T S OF C O S T CU T T ING P R OGR A MME F I N A N C I A L R E S U LT S -15% -2% • 15% labor costs reduction despite high personnel • Rent cost reduction by 2% in short period of time. WORKFORCE costs inflation in the region. RENT • Increased effects expected long te
Slide 21: Inventory – structural and assortment changes
21 IN V E N T ORY – S T RUC T UR A L A ND A S S OR T ME N T CH A NGE S F I N A N C I A L R E S U LT S INVENTORY [M PLN] 113 89 96 142 132 202 164 244 274 -1% +7% 688 643 496 587 491 545 341 508 732 720 763 785 815 583 598 385 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Central wa
Slide 22: Improvement of liquidity
22 IMP R OV E ME N T OF L IQUIDI T Y F I N A N C I A L R E S U LT S NET DEBT NET DEBT / EBITDA * [M PLN] 2,8 2000 2,3 2,1 1139 2,0 941 988 1,8 1000 833 905 1,5 406 652 547 1,1 0,8 0 -1000 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
Slide 23: Significant improvement of cash flows
23 S IGNIF ICA N T IMP R OV E ME N T OF CA S H F L OW S F I N A N C I A L R E S U LT S WORKING CAPITAL CASH FLOWS [M PLN] [M PLN] 484 Operations CF 139 119 175 122 987 -357 1389 Investment CF 1068 1717 1732 1360 -80 -65 -172 745 292 328 Financial CF 251 44 Q2 2017 Q1 2018 Q2 2018* -68 Payables Recei
Slide 24: Investments
IN V E S T ME N T S
Slide 25: Estimated investments in 2018
25 E S T IM AT E D IN V E S T ME N T S IN 2 018 INVESTMENTS Structural expansion (M&A) ~270 M 170*) M Organic expansion (stores) ~150 M completed 85 M Logistics ~100 M 55% of investments 25 M of ~550 M PLN IT ~30 M 20 M Expenses paid as of 30.06.2018 *) Romania, KVAG
Slide 26: Voegele – selected synergies
26 VOE GE L E – S E L E C T E D SY NE R G IE S INVESTMENTS Karl Voegele AG – family business with almost PRODUCT CUSTOMER 100 years of tradition • Reduction of Voegele private label • Application of WE customer knowledge sourcing costs – 60% of procurement to be done by CCC since 2019 Voegele in 201
Slide 27: Summary
S UMM A RY
Slide 28: Summary
28 S UMM A RY • Improvement of gross profit on sales margin 1 Profitability • Reduction of store costs and big optimisation of workforce 2 M&A • Romania, Adler, Voegele, DeeZee • New assortment – including hats, scarves, suitcases; Fashion corner (DeeZee) 3 New products • New sports brands (Reebok,
Slide 29: CCC Group Investor Days
29 C C C GR OUP IN V E S T OR DAYS 2 018 SUMMARY LADIES AND GENTLEMEN, On behalf of the CCC Group Management Board, we’d like to invite you to Investor Days in CCC HQ in Polkowice on days: 18.09.2018 – Institutional Investors 19.09.2018 – Individual Investors AGENDA: • Meeting with CCC and eobuwie M
Slide 30: Q&A
Q&A
Slide 31: Contact
31 C ON TAC T BARTŁOMIEJ PIEKARSKI IR Manager T: +48 76 84 58 686 M: +48 667 872 742 E: bartlomiej.piekarski@ccc.eu TOMASZ POKORA IR Analyst T: +48 76 84 58 747 E: tomasz.pokora@ccc.eu
Slide 32: Investor Relations Calendar
32 IN V E S T OR R E L AT ION S CA L E NDA R 03.09.2018 Sales data for August 2018 – after close of trading 10.09.2018 Pekao SA Emerging Europe Investment Conference – Warsaw 11–12.09.2018 NDR Tallin-Stockholm 18.09.2018 CCC Investor Day – Institutional Investors – Polkowice/Zielona Góra 19.09.2018
Slide 33: Thank you
T H A NK YOU
Slide 34: Back up
BACK UP
Slide 35: Coherent floorspace growth
35 C OHE R E N T F L OOR S PACE GR OW T H BACKUP 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 30.06.2018 TYPE COUNTRY sqm count sqm count sqm count sqm count sqm count sqm count sqm count sqm count Poland 201 644 424 212 242 436 214 696 433 220 795 439 228 154 441 243
Slide 36: Stable sales structure
36 S TA BL E S A L E S S T RUC T UR E BACKUP SALES STRUCTURE FOOTWEAR SALES STRUCTURE COSMETICS & FOOTWEAR BAGS ACCESSORIES KIDS MEN LADIES 89% 6% 5% 14% 24% 62% [Q2 2017 – 89%] [Q2 2017 – 6%] [Q2 2017 – 5%] [Q2 2017 – 13%] [Q2 2017 – 24%] [Q2 2017 – 63%] Q2 2018 Q2 2018
Slide 37: Historical profit and loss statement
37 HI S T OR ICA L P R OF I T A ND L O S S S TAT E ME N T BACKUP WITH IFRS16 M PLN 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 2Q18 Sales 664,6 1 126,1 720,4 1 125,8 987,3 1 360,5 694,1 1 332,3 1 332,3 Gross profit on sales 339,3 607,0 350,7 587,7 503,1 708,4 332,0 716,5 716,5 Gross profit on sales marg
Slide 38: Historical balance sheet – assets
38 HI S T OR ICA L BA L A NCE S HE E T – A S S E T S BACKUP WITH IFRS16 M PLN 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 30.06.2018 2Q18 Intangibles 7,8 181,2 181,2 189,2 193,0 197,5 200,5 213,7 213,7 Goodwill 210,5 106,2 106,2 106,2 106,2 106,2 106,2 149,9 149,9 Ta
Slide 39: Historical balance sheet – liabilities
39 HI S T OR ICA L BA L A NCE S HE E T – L I A BIL I T IE S BACKUP WITH IFRS16 M PLN 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 30.06.2018 2Q18 Debt 366,0 366,0 436,0 436,0 436,0 436,0 436 210,0 210,0 Deferred tax debt 1,2 34,1 34,6 33,4 32,3 33,2 34,7 40,7 40,7 Pro
Slide 40: IFRS
I F R S 16
Slide 41: IFRS 16 impact on consolidated profit and loss
41 IF R S 16 IMPAC T ON C ON S OL IDAT E D P R OF I T A ND L O S S BACKUP Q2 2018 Q2 2018 IFRS 16 AS PUBLISHED M PLN WITHOUT IFRS 16 EFFECT CLARIFICATION CLARIFICATION Gross profit on sales 716,5 — 716,5 SG&A costs, of which: -549,8 4,7 -545,1 Depreciation -30,4 -113,4 -143,8 Costs of lease payments
Slide 42: IFRS 16 impact on consolidated balance sheet
42 IF R S 16 IMPAC T ON C ON S OL IDAT E D BA L A NCE S HE E T BACKUP AS OF 30.06.2018 AS OF 30.06.2018 IFRS 16 AS PUBLISHED M PLN WITHOUT IFRS 16 EFFECT CLARIFICATION CLARIFICATION Total assets 4 487,4 2 461,2 6 948,7 Fixed assets 1 460,6 2 461,2 3 921,8 Assets in respect of the right of use Right
Slide 43: IFRS 16 impact on consolidated cash flows
43 IF R S 16 IMPAC T ON C ON S OL IDAT E D CA S H F L OW S BACKUP AS OF 30.06.2018 AS OF 30.06.2018 IFRS 16 AS PUBLISHED M PLN WITHOUT IFRS 16 EFFECT CLARIFICATION CLARIFICATION Operational cash flows 484,3 102,7 587,0 Depreciation of an asset due to a right of use. Investment cash flows -171,7 — -1
Slide 44: Glossary
44 G L O S S A RY BACKUP TERM MEANING CEE Czech Republic, Slovakia, Hungary, Croatia, Bulgaria, Slovenia, Romania (Shoe Express) WE Germany, Austria and Switzerland (KVAG) Others Latvia, Lithuania, Estonia, Ukraine, Russia, Serbia Retail Own store chain Wholesale Franchise store chain and sales to o
Slide 45: Shareholder structure – company controlled by the founder
45 S H A R E HOL DE R S T RUC T UR E – C OMPA N Y C ON T R OL L E D BY T HE F OUNDE R BACKUP SHAREHOLDER STRUCTURE AS OF 30.06.2018 ULTRO Sp. z o.o. ULTRO Sp. z o.o. Other affiliate of Dariusz Miłek Other affiliate of Dariusz Miłek Shareholders [2] and Dariusz Miłek Shareholders [2] and Dariusz Miłe