Slide 1: 3Q22/23 Results Presentation
3Q22/23 3Q22/23 RESULTS PRESENTATION GDAŃSK, DECEMBER 15, 2022 WWW.LPP.COM
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) was prepared by LPP SA (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 does not present its standing or prospe
Slide 3: Key corporate events
3Q22/23 3 01 3Q22/23 PRESENTATION Key corporate events
Slide 4: Opening of Sinsay design centre in Barcelona
Opening in October 2022. The office Purpose of the design centre: currently employs 10 people. • recognition of customer tastes on the Mediterranean markets, 3Q22/23 • support for our product department in Gdańsk in designing women's 4 online collections, First collections for • acquiring key talent
Slide 5: Blanca Miró X Reserved
Blanca Miró X Reserved 3Q22/23 5 Cooperation with a global influencer Reserved capsule collection Vintage style, high quality designed in cooperation with Blanca Miró - a Spanish fashion The collection available online influencer, recognizable on Outerwear, suits, knitwear and in flagships in Poland
Slide 6: Broadening of Reserved brand assortment
Broadening of Reserved anchor brand assortment Available from Our goal is to repeat the Spring/Summer 2023, success of Sinsay’s 3Q22/23 solely online Homewear collection 6 Decorations Textiles pottery, candles, sheets, curtains, pillows accessories for children Cooperation with local 3Q22/23 PRESENT
Slide 7: Easier access to clients: development of mobile apps
Easier access to clients Development of mobile aps 3Q22/23 7 More returning 3.3m 4.9/5 45% customers to our downloads user rating share of e-stores online in PL revenues 3Q22/23 PRESENTATION Low cost 2.5m 4.9/5 40% of reaching downloads user rating share of customers online in PL revenues
Slide 8: Serbia – a new online market
Serbia – a new online market 5th online Balkan market in our brand portfolio 3Q22/23 (opened in November 2022) 8 All our brands are available online Almost PLN 2m in sales PREZENTACJA 3Q22/23 in first month of operations Online presence in Balkan countries New online market - Serbia
Slide 9: Presence in countries
Presence in 38 countries 5 34 22 27 1 27 3Q22/23 981 17 115 122 9 No. of 77 As at 31.10.2022 YoY 23 stores 47 20 53 129 LPP GROUP 1 837 - 288 23 51 46 7 Poland 981 + 53 ↑ Abroad 856 + 157 ↑ Discontinued 0 - 498 4 operations 1 2 2 3Q22/23 PRESENTATION 1 online + offline online offline
Slide 10: 3Q22/23 financial results
3Q22/23 10 02 3Q22/23 PRESENTATION 3Q22/23 financial results
Slide 11: Sale of Russian subsidiary changed financial statements
Sale of Russian subsidiary changed financial statements 1Q22/23 2Q22/23 3Q22/23 4Q22/23 3Q22/23 No influence of Russian No influence of Russian Russian company shown Statement business; impact of business; smaller impact of 11 Russian company shown as discontinued operations; of comprehensive invent
Slide 12: Towards omnichannel
OFFLINE Towards omnichannel 1,837 -11.4% stores m2 3Q22/23 12 38 +19.8% 25 COUNTRIES LFLs countries ONLINE +47.9% GROUP REVENUES 32 +28.8% 3Q22/23 PRESENTATION countries revenues Data from continued operations except for floorspace.
Slide 13: High double-digit Group revenue growth
High double-digit Group revenue growth GROUP REVENUES OMNICHANNEL REVENUES (PLN m, data from 1Q21/22 for continued operations) (PLN m, continued operations) 4,340.6 4,366.8 PLN 3Q21/22 3Q22/23 YoY 3,399.3 1,224.6 1,032.4 LPP GROUP 3,134.0 4,366.8 39.3% 2,990.2 3,134.0 3,034.2 Reserved 1,249.3 1,435.
Slide 14: Over PLN 1bn e-commerce revenues
Over PLN 1bn e-commerce revenues ONLINE SALES ONLINE BY REGIONS (PLN m, data from 1Q21/22 for continued operations) (PLN m, 3Q21/22 continued operations) PLN 1,032.4m 1,224.6 PLN 837.6m 1,161.8 1,032.4 933.7 988.1 +23.3% YoY 3Q22/23 837.6 616.0 778.1 748.2 497.8 14 445.9 339.8 416.4 3Q21/22 3Q22/23
Slide 15: Growing share of foreign revenues
Growing share of foreign revenues SHARE OF FOREIGN SALES IN REVENUES 3Q22/23 FLOORSPACE (data from 1Q21/22 from continued operations) (by regions, 3Q21/22 before restatement) Poland Abroad 57% 60% 53% ths m2 3Q21/22 3Q22/23 YoY 51% 52% 50% 56% LPP GROUP 1,750.4 1,550.1 -11.4% 3Q22/23 55% 60% 50% 15
Slide 16: Sizeably lower inventory QoQ
Sizeably lower inventory QoQ QUARTERLY GROUP GROSS PROFIT MARGIN INVENTORY AND INVENTORY/ M2 (data from 1Q21/22 from continued operations) (data from 1Q21/22 from continued operations) 3,500 5,000 3,067 3,000 60.5% 2,057 2,529 4,000 2,259 2,500 1,702 2,000 3Q22/23 54.0% 58.3% 3,000 56.6% 53.4% 1,455
Slide 17: Inflationary cost growth
Inflationary cost growth COSTS OF OWN STORES / M2 SG&A COSTS / M2 (IAS17, data from 1Q21/22 for continued operations) (IFRS16, data from 1Q21/22 for continued operations) +15.1% YoY 57% 450 48% 42% 49% 41% 47% 400 50% 42% 350 193 196 39% 39% 174 171 176 166 40% 160 300 144 145 59 66 3Q22/23 56 62 25
Slide 18: PLN 0.5bn EBIT in the quarter
PLN 0.5bn EBIT in the quarter 3Q21/22 PLN m, IFRS16 3Q22/23 YoY • Double-digit YoY sales growth thanks to growing LFLs in traditional (after restatement) stores and online growth. Revenues 3,134.0 4,366.8 39.3% • Gross margin on sales decreased YoY due to high base, higher share 3Q22/23 Gross profit
Slide 19: Almost PLN 1bn profit from continued operations
Almost PLN 1bn profit from continued operations 9M21/22 • Double-digit sales growth YoY thanks to new store openings, high PLN m, IFRS16 (after 9M22/23 YoY restatement) LFL sales and very good sales in the online channel. Revenues 7,939.5 11,741.5 47.9% • Gross margin decrease YoY due to: higher sha
Slide 20: Short-term changes in working capital
Short-term changes in working capital WORKING CAPITAL CASH CONVERSION CYCLE (PLN m, 3Q21/22 without restatment) (days) 325 315 318 260 271 214 217 242 214 235 229 228 171 182 175 139 149 167 3Q22/23 3,479 7 9 6 6 7 16 25 4,342 4,344 6 6 20 2,962 -22 -51 -68 -81 -80 -62 -83 -80 -83 1,105 224 3Q20/21
Slide 21: Safe indebtedness level
Safe indebtedness level NET DEBT CAPEX (PLN m, IFRS16, from 1Q22/23 lack of Russian subsidiary) (PLN m, data from 1Q21/22 for continued operations) 3Q22/23: 7 000.0 3Q21/22: PLN 347m 2.4 2.5 3Q20/21: PLN 316m 6 000.0 2.1 PLN 179m 1.9 5 000.0 1.8 2.0 53.2 164.8 1.4 134.2 3Q22/23 4 000.0 1.3 1.1 1.5 7
Slide 22: 9M22/23 executive summary
9M22/23 executive summary 3Q22/23 1 High sales dynamics from continued operations. 22 2 Strong sales in offline channel. 3 Over PLN 3bn e-commerce revenues. 4 Trade liabilities exceeded inventory. 5 Safe indebtedness ratio. 3Q22/23 PRESENTATION
Slide 23: 2022/23 + outlook
3Q22/23 23 03 3Q22/23 PRESENTATION 2022/23 + outlook
Slide 24: Positive outlook for the fourth quarter
Positive outlook for the fourth quarter Christmas and New Year's Successful Black Week Strong November results Eve collections in every brand 3Q22/23 24 Black Friday YoY revenue growth: A wide range of Christmas offline 13% Positive LFLs in every collections, successful online 31% brand sales betwee
Slide 25: 2022/23 targets
2022/23 targets ▪ Revenues over PLN 16 billion, +40% YoY from continued operations. ▪ Decrease in area to 1,671 ths m2 and 1,960 stores. Priority in development given to Sinsay brand. Targets ▪ PLN 4.5bn in online revenues (stronger control of e-marketing spending). 3Q22/23 ▪ Lower gross profit marg
Slide 26: We aim to grow profitably in Western Europe
We aim to grow profitably in Western Europe Debut of the Reserved brand London - 3 new contracts for Reserved: in Italy in Milan: 3Q23/24. The second flagship on Oxford Street - 1,812 m2 Westfield Stratford - 1,983 m2 Brent Cross - 2,103 m2 3Q22/23 More Reserved stores in the Düsseldorf – a new Rese
Slide 27: Further 2022/23+ floorspace development
Further 2022/23+ floorspace development TARGET FLOORSPACE GROWTH +10%-15% FOR UPCOMING YEARS YoY p. a. 2 Floorspace (ths m ) I.2023 target I.2024 target YoY (ths m2) 1,888 1,973 3Q22/23 1,671 Poland 753 845 12% 1,435 27 1,231 Abroad 918 1 128 23% TOTAL 1,671 1,973 18% I.2020 I.2021 I.2022 I.2023 I.2
Slide 28: Further m-commerce development in 1H23/24
Further m-commerce development in 1H23/24 3Q22/23 28 3Q22/23 PRESENTATION Presence in 1H23/24 Presence at the end of 3Q22/23
Slide 29: Working capital efficiency improvement
Working capital efficiency improvement 4Q22/23 1H23/24 4Q23/24 3Q22/23 29 Normalisation of inventory levels Inventory Normalization of the level of receivables, repayment of a significant part of receivables Receivables from the sale of the Russian company Normalization of the level Liabilities of l
Slide 30: 2023/24 targets
▪ Double-digit YoY revenue growth. ▪ 18% YoY floorspace growth. Priority given to Sinsay brand. ▪ Double-digit online revenue growth. Targets ▪ Gross profit on sales and EBIT margin growth. ▪ Capex at PLN 1,05bn (out of which PLN 800m for 3Q22/23 2023/24 targets stores, PLN 170m for infrastructure,
Slide 31: A flexible business model prepared for challenges
The latest IT, e-commerce and m-commerce A flexible business model solutions combined with effective and prepared for challenges scalable logistics 3Q22/23 31 A diversified business model combining the mainstream market with value-for-money Safe liquidity situation, unused credit lines PREZENTACJA 3
Slide 32: Q&A
3Q22/23 PRESENTATION 32 3Q22/23 Q&A 04
Slide 33: Glossary
Poland Retail sales in Poland and other sales of LPP SA. Region including: CEE (Czech Republic, Slovakia, Hungary), Baltic (Lithuania, Latvia, Estonia), SEE (Bulgaria, Romania, Croatia, Serbia, Slovenia, Bosnia and Herzegovina, and from 2021/22 Abroad Northern Macedonia), WE (Germany, UK, Finland),
Slide 34: Contact
discoverlpp company/lpp-sa discoverlpp discoverlpp Contact GDAŃSK HQs CONTACT FOR INVESTORS CONTACT FOR MEDIA WWW.LPP.COM Łąkowa 39/44, 80-769 Gdańsk Email: Email: media@lpp.com Tel. +48 58 76 96 900 LPP.investor.relations@lpp.com Email: lpp@lpp.com