Slide 1: Groupon 3rd Quarter Earnings
Groupon 3rd Quarter Earnings November 9th, 2023
Slide 2: Agenda
Agenda Dušan Šenkypl Interim CEO ● CEO Commentary ● Financial Overview Jiří Ponrt CFO ● Guidance ● Q&A Rana Kashyap SVP, Corp Dev & IR 2 2
Slide 3: Forward-looking statements and other information
Forward-looking statements and other information The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
Slide 4: CEO Commentary
CEO Commentary GROUPON
Slide 5: Third Quarter Key Takeaways
Third Quarter Key Takeaways 3Q23 Financial Metrics 3Q23 Financial Snapshot • Global Billings -3% vs last year Billings (YoY % Change) Revenue (YoY % Change) ○ Local Billings +2% ○ North America Local Billings +5% • Revenues -12% vs last year ○ 333 bps improvement in the rate of decline vs 2Q23 • 2nd
Slide 6: Update on Transformation Plan
Update on Transformation Plan Create an Efficient Cost Structure • Annualized SG&A reduced from $477M in 3Q22 to $320M Strengthening our in 3Q23 ($150M+ annualized savings) Financial Position • Announced $80M fully-backstopped equity rights offering Improve Financial Flexibility • Announced $19M in n
Slide 7: Readiness for 4th Quarter Holiday Season
Readiness for 4th Quarter Holiday Season ● Bringing right inventory > re-activating merchants which were part of past success ● Errors and bug handling > fixing reliability issues on legacy platforms ● Checkout process improvements > feature parity (payment methods) for all countries, smoothening fra
Slide 8: New Consumer Web and App
New Consumer Web and App Goal: Redesign and reengineer the whole consumer experience (web + app) Feature Highlights: ● Redesigned Home, Browse, Deal, Checkout, Cart, and more ● Responsive (no more separate web and touch experience) ● Modern technology and faster response times Resources: Major effor
Slide 9: Gifting
Gifting Goal: Design and build a brand new gifting proposition (web + app) to drive engagement and sales Feature Highlights: ● Gift Page ● Gift Filters on Browse Page ● Gift Voucher ● Groupon Bucks Card ● Gift Refunds Release: ● v1.0 = Q4 Holiday Season ● v2.0 = post new consumer front-end 9
Slide 10: Revenue management
Revenue management • Continued shift in spend from promotions to lower-funnel performance marketing • Reducing promotion spend at a faster rate than Gross Billings • Successful ramp up in performance marketing spend versus second quarter ○ Constraints in our ability to increase marketing spend furth
Slide 11: Supply transformation
Supply transformation ● Continued increase in productivity of our salesforce ● Multiple projects underway to help improve efficiency of sales ● New customer success organization expected to drive more business from existing merchant partners ● Started ramping up new sales hires ● Testing alternative
Slide 12: Financial Overview
Financial Overview GROUPON
Slide 13: 3Q23 Summary Financial Results
3Q23 Summary Financial Results Gross Billings ($M) Revenue ($M) Marketing ($M) Revenue as % of Gross Billings Gross Profit as % of Revenue Marketing as % of Gross Profit Contribution Profit ($M) Adjusted EBITDA1 ($M) Free Cash Flow1 ($M) Contribution Profit as % of Revenue 13 1) Adjusted EBITDA (AEBITDA
Slide 14: 3Q23 Key Operating Metrics
3Q23 Key Operating Metrics Active Customers1 (Million) Local Gross Billings ($M) North America International North America International Goods Gross Billings ($M) Travel Gross Billings ($M) 14 1) Reflects the total number of unique user accounts that have made a purchase during the TTM either through
Slide 15: Creating an Efficient Cost Structure
Creating an Efficient Cost Structure Significant opportunity to reduce spend across the Organization New Mindset Of Frugality SG&A ($M) -33% Increasing Efficiency Through year- over- Automation Of Business Processes ye ar Director-Level Headcount Reductions, Reducing Redundant Spend Decreasing Softwar
Slide 16: 3Q 2023 Adjusted EBITDA to FCF Reconciliation
3Q 2023 Adjusted EBITDA(1) to FCF(1) Reconciliation $ million 3Q23A 2Q23A 1Q23A YTD Adjusted EBITDA1 18.2 15.2 -4.9 28.5 1 (-) Capex -4.1 -2.3 -9.5 -15.9 (-) Interest & Taxes -4.4 -2.1 -4.1 -10.5 (-) Restructuring -1.3 -3.7 -5.9 -11.0 (+/-) Change in Net Working Capital -26.4 -51.7 -61.5 -139.6 1 Fr
Slide 17: Financing Strategy Update
Financing Strategy Update Groupon is in process of executing a financing strategy that is intended to significantly improve the Company’s liquidity position Financing Strategy Fully Backstopped Rights Offering Monetization of Certain Non-Core Assets ● $80M Fully Backstopped Rights Offering $19M Announ
Slide 18: Guidance
Guidance 4Q23 Guidance As of Preliminary 2024 November 9th, 2023 Low-end High-end Outlook Revenue $127.5M $137.5M -5% to 0% (-14% year-over-year) (-7% year-over-year) year-over-year Adjusted EBITDA* $18M $25M $80M to 100M Free Cash Flow* Positive Positive Positive for full year (negative 1Q24) * We
Slide 19: GROUPON
GROUPON
Slide 20: Appendix
Appendix
Slide 21: Non-GAAP Reconciliations: Adjusted EBITDA
Non-GAAP Reconciliations* Adjusted EBITDA - Quarterly (in thousands) *See Q3 2023 earnings press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 21
Slide 22: Non-GAAP Reconciliations: Free Cash Flow
Non-GAAP Reconciliations* Free Cash Flow (in thousands) *See Q3 2023 earnings press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 22
Slide 23: Supplemental Information
Supplemental Information 23