Slide 1: 4Q21 Results Presentation
4Q21 RESULTS PRESENTATION APRIL 11, 2022
Slide 2: Disclaimer
DISCLAIMER This presentation (the "Presentation") was prepared by VRG S.A. (the knowledge and depend on many factors due to which the actual results "Company") with a due care. Still, it may contain certain inconsistencies or achieved by the Company may differ materially from the results presented o
Slide 3: Introduction
VISTULA BYTOM WOL(ZANKA DENICLER = WKRUK 01 INTRODUCTION
Slide 4: 2021 – A Two-Speed Year
2021 – A TWO-SPEED YEAR 1H21 2H21 Influenced by pandemics, Demand recovery despite pandemics, with lock-downs in January no restrictions on traditional stores and from 20 March to 4 May On-line development Off-line development 4 | 4Q21 Presentation
Slide 5: Further Network Optimisation
FURTHER NETWORK OPTIMISATION NUMBER OF STORES EOP 4Q21 YoY 145 -4 114 - 3 106 0 YoY 52.3 - 1% r/r towns ths m2 116 - 13 29 -3 150 -4 YoY 18.2% -6.1 pp. YoY franchise stores internet share 146 +3 550 - 20 5 | 4Q21 Presentation
Slide 6: 2 Business Pillars
2 BUSINESS PILLARS APPAREL SEGMENT successful introduction of new collections and new products development of the casual offer new concepts of stores JEWELLERY SEGMENT strong off-line sales favourable trends in sales of watches gold and silver jewellery in demand 6 | 4Q21 Presentation
Slide 7: Very Good Results in 4Q21 and 2021
VERY GOOD RESULTS IN 4Q21 AND 2021 4Q21 IFRS16 2021 IFRS16 REVENUES EBIT REVENUES EBIT PLN 348.8m PLN 53.6m PLN 1,069.9m PLN 97.5m 50.3% YoY 4Q20: PLN (2.9)m 25.3% YoY 2020: PLN (11.9)m GROSS PROFIT MARGIN NET PROFIT (LOSS) GROSS PROFIT MARGIN NET PROFIT (LOSS) 55.1% PLN 39.8m 53.1% PLN 66.3m 3.8 pp
Slide 8: 2021 Targets Achieved
2021 TARGETS ACHIEVED REVENUES YoY increase in revenues, both off-line and on-line. +25.3% E-commerce share at c. 20%. 18.2% EFFICIENCY Sizeably improved YoY financial Net profit close to Gross profit margin YoY increase 53.1% + 4.2pp. results. 2019 levels Maintaining cost efficiency. Maintenance of
Slide 9: Strengthening the Management and Supervisory Boards
STRENGTHENING THE MANAGEMENT AND SUPERVISORY BOARDS Janusz Płocica Marta Fryzowska Michał Zimnicki Vice President Vice President CEO of the Management Board of the Management Board, CFO VRG S.A. MANAGEMENT BOARD Mr Jan Pilch, currently delegated to the CEO position, will return to the Supervisory Bo
Slide 10: Performance by Brands
02 PERFORMANCE BY BRANDS
Slide 11: Vistula Executive Summary
VISTULA EXECUTIVE SUMMARY VISTULA BYTOM = WOL(ZANKA DENICLER = WKRUK
Slide 12: Vistula: Doubling of Traditional Store Sales
VISTULA: DOUBLING OF TRADITIONAL STORE SALES Vistula brand network 4Q20 4Q21 YoY Vistula brand floorspace fell 1% YoY at the end of 4Q21, while the number of stores of the brand fell by 4 net YoY. Number of stores 149 145 -4 Both franchise floorspace and number of stores declined YoY at the incl
Slide 13: Vistula: Increasing Share of Formal
VISTULA: INCREASING SHARE OF FORMAL Vistula brand revenue split Significant YoY increase in formal in 4Q21 along with higher demand for formal clothing due to the return of ceremonies, e.g. 17% 7% 8% 7% 5% New Year's Eve. In 4Q20 stores were closed in November and at the 12% end of the year, causi
Slide 14: Bytom Executive Summary
SZTUKA KRAWIECTWA OD 1945 EXECUTIVE SUMMARY VISTULA BYTOM WOL(ZANKA DENICLER = WKRUK
Slide 15: Bytom: Growth in Off-line Revenues
BYTOM: GROWTH IN OFF-LINE REVENUES Bytom brand network Number of Bytom stores decreased by 3 net YoY, while the number 4Q20 4Q21 YoY of franchise stores increased by 3 net YoY. Number of stores 117 114 -3 Floorspace decreased by 3% YoY. Sizeable changes in floorspace incl. franchise 9 12 +3 also
Slide 16: Bytom: High, Positive Store EBIT
BYTOM: HIGH, POSITIVE STORE EBIT Bytom brand revenue split Growing share of formal sales due to the pre-Christmas and New 12% 10% Year's Eve periods. In 4Q20 stores lockdown in November and at the end of the year. As a result, a slight decrease in the share of 60% 59% casual and accessories in sal
Slide 17: Wólczanka Executive Summary
WOLCZANKA EXECUTIVE SUMMARY WOLCZANKA DENICLER = WKRUK BYTOM < > - >
Slide 18: Wólczanka: An On-line Brand
WÓLCZANKA: AN ON-LINE BRAND Wólczanka brand network 4Q20 4Q21 YoY Wólczanka network decreased by 13 stores net YoY. Mostly own stores were closed – number of franchise stores dropped by 5 net Number of stores 129 116 -13 YoY. incl. franchise 53 48 -5 Brand’s floorspace fell 6% YoY, while franchi
Slide 19: A Growing Share of New Assortment
A GROWING SHARE OF NEW ASSORTMENT Wólczanka brand revenue split Increase in sales of knitted fabrics due to broadened range of polo shirts, t-shirts and sweaters. A higher share of the remaining 7% 9% 13% assortment due to a wider range of trousers (for men and women) 9% 10% 14% 60% 59% and introd
Slide 20: Deni Cler Executive Summary
DENI CLER MILANO EXECUTIVE SUMMARY VISTULA BYTOM = WOL(ZANKA DENICLER = WKRUK
Slide 21: Deni Cler: Dynamic Revenue Growth
DENI CLER: DYNAMIC REVENUE GROWTH Deni Cler brand network 29 monobrand stores (both own and franchise) in top shopping malls in Poland. 4Q20 4Q21 YoY Development of shop-in-shop concept. Deni Cler collections Number of stores 32 29 -3 available at selected partners running multiband stores in 21
Slide 22: Deni Cler: Doubling of Store EBIT
DENI CLER: DOUBLING OF STORE EBIT Deni Cler brand revenue split Emphasis on capsule collections. Development of accessories, which have a significant share in collection (handbags, shoes). 0% 24% 22% 20% Classic clothing is still the biggest element of the collection. Fall in 3% 5% 42% casual cl
Slide 23: W.KRUK Executive Summary
WKRUK 1 8 4 0 EXECUTIVE SUMMARY VISTULA BYTOM = WOL(ZANKA DENICLER = WKRUK
Slide 24: W.KRUK: Record High Brand Revenues
W.KRUK: RECORD HIGH BRAND REVENUES W.KRUK brand network 4Q20 4Q21 YoY Continuation of W.KRUK brand development. Growth in net number of stores by 3 YoY and 3% YoY increase in brand’s Number of stores 143 146 +3 floorspace. incl. franchise 18 23 +5 The brand already had 23 franchise stores at the
Slide 25: W.KRUK: Growing Share of Watches
W.KRUK: GROWING SHARE OF WATCHES W.KRUK brand revenue split Growing share of watches in relation to jewellery. Advantageous 37% 35% 34% 41% influence of exclusivity on the sale of luxury Rolex and Patek Philippe watches, but also a rebound in jewellery sales. In the jewellery section, there was
Slide 26: Group Results
VISTULA BYTOM WOL(ZANKA DENICLER = W.KRUK 03 GROUP RESULTS
Slide 27: Stable Group Floorspace
STABLE GROUP FLOORSPACE Group floorspace change YoY (ths m2) 53.0 52.3 Group floorspace reached 52.3 ths m2 at the end of 4Q21, down 0.4 1.4% YoY. 11.0 11.4 1.1 The apparel segment floorspace fell 1.1 ths m2, down 2.6% YoY, due to closing down of unprofitable stores. 42.0 -1% YoY 40.9 The jewe
Slide 28: Favourable Trends in Revenues/m2
FAVOURABLE TRENDS IN REVENUES/M2 Group revenues (PLN m) Group revenues reached PLN 348.8m in 4Q21 (up 50.3% YoY), due 332.5 348.8 to rebound in traditional stores of both segments. 305.0 125.6 197.5 249.4 232.0 244.0 174.2 Apparel segment revenues grew 48.3% YoY, reaching PLN 174.6m, 174.9 172.1
Slide 29: Rebound in Apparel Segment Margin
REBOUND IN APPAREL SEGMENT MARGIN Gross profit on sales (PLN m) Group gross profit on sales amounted to PLN 192.0m in 4Q21 (up 61.5% YoY). 192.0 178.5 163.3 In 4Q21 gross profit on sales of the apparel segment reached 67.6 122.4 118.9 131.1 91.8 94.0 82.1 81.7 71.0 PLN 100.2m, up 72.5% YoY. 52.9
Slide 30: High Operating Profit Growth
HIGH OPERATING PROFIT GROWTH Monthly operating costs per m2 (PLN, IAS17) Group operating costs/ m2 (IAS17) reached PLN 918/ m2 monthly and up 35.0% YoY in 4Q21. Growth in costs/m2 was lower than 811 918 revenues/m2 resulted from cost discipline. 654 712 726 672 680 276 230 520 587 203 169 188 199
Slide 31: 4Q21 Results Sizeably Better YoY
4Q21 RESULTS SIZEABLY BETTER YOY PLN m, IFRS16 4Q20 4Q21 YoY Revenues 232.0 348.8 50.3% Gross profit on sales 118.9 192.0 61.5% Gross profit on sales margin 51.2% 55.1% 3.8pp. Higher YoY revenues due to favorable sales trends in both segments. Gross margin increase YoY due to very good SG&A costs
Slide 32: 2021 Results Sizeably Better YoY
2021 RESULTS SIZEABLY BETTER YOY PLN m, IFRS16 2020 2021 YoY Higher YoY revenues: sales growth in the jewellery segment higher Revenues 853.7 1,069.9 25.3% than in the apparel segment. Gross margin increase YoY due to Gross profit on sales 417.3 568.2 36.1% lower YoY promotions in all brands. Gros
Slide 33: Inventory Release
INVENTORY RELEASE Change in inventories (PLN m) Inventory down 1.3% YoY to PLN 499.2m in 4Q21 due to lower 499.2 inventory in the apparel segment and relatively stable inventory in 505.6 3.0 the jewellery segment. 9.4 Apparel segment inventory fell 3.7% YoY, due to strong sales in 250.6 253.7 4Q
Slide 34: Net Cash on the Balance Sheet
NET CASH ON THE BALANCE SHEET Net debt (PLN m, IAS17 plus reverse factoring) Long-term and short-term indebtedness shown together with 142.5 reverse factoring and financial leases, yet excluding leases from 91.3 79.3 87.9 106.5 53.7 IFRS16. Financial leases under IFRS16 at PLN 332.9m in 4Q21. 74.2
Slide 35: High and Growing Operating Cash Flows
HIGH AND GROWING OPERATING CASH FLOWS Net working capital (PLN m) PLN 318.9m YoY drop in inventories due to strong sales in 4Q21 13.3 PLN 319.7m 12.8 Stable YoY receivables due to comparable prepayments for goods purchased on Asian markets (use of reverse factoring). 505.6 499.2 199.2 193.2 Sl
Slide 36: 2022+ Outlook
04 2022+ OUTLOOK
Slide 37: Consumer Impacted by External Factors
CONSUMER IMPACTED BY EXTERNAL FACTORS 1Q21 1Q22 Shopping malls open all month. Shopping malls closed all month. JANUARY Fifth wave of pandemics. Shopping malls open all month. Russian invasion of Ukraine on Shopping malls open all month. FEBRUARY 24th February. Noticeable influence of conflict on cu
Slide 38: Sales Increases in Every Month of 1Q22
SALES INCREASES IN EVERY MONTH OF 1Q22 SALES E-COMMERCE GROSS MARGIN JANUARY 2022 +145.6% 22.2% -44.5pp ↓ 51.2% +8.1pp ↑ FEBRUARY 2022 +4.5% 16.3% -3.8pp ↓ 50.8% +2.4pp ↑ MARCH 2022 +31.3% 15.2% -11.6pp ↓ 51.1% +2.5pp ↑ 38 | 4Q21 Presentation
Slide 39: 1Q22 Preliminary Revenue and Margin Results
Prośba o inna 1Q22 PRELIMINARY REVENUE aranżację AND MARGIN RESULTS KEY TRENDS IN 1Q22: PLN m 1Q21 1Q22 YoY High Group sales dynamics – jewellery segment Revenues 172.1 243.5 +41.5% growth outpaced apparel segment. Apparel segment 86.1 115.2 +33.8% Stable Group floorspace at 52.5 ths m2. Share of on
Slide 40: Group Well Prepared for SS2022 Season
GROUP WELL PREPARED FOR SS2022 SEASON Continuation of the wide range of Vistula WOMAN and Wólczanka collections Continuation of one of the most popular designer collections 2021 Preludium - in the new reveal of Preludium Butterfly 40 | 4Q21 Presentation
Slide 41: New Concept of Vistula Store
NEW CONCEPT OF VISTULA STORE 300 m2 store in Silesia shopping mall in Katowice Eco-friendly solutions: The entire range of the ceramic tiles with brand’s assortment ECOLABEL and LEED displayed on one level: certificates and high women's and men's luminous efficiency collections lamps 41 | 4Q21 Prese
Slide 42: Further Omnichannel Development in 2022
FURTHER OMNICHANNEL DEVELOPMENT IN 2022 TRADITIONAL STORES OWN E-STORES New formats of Vistula stores (from Greater variety of pickup options December 2021) and Wólczanka (from (Click & Collect, InPost). May 2021) - larger and greener, allowing the display of the entire extended offer. All VRG brand
Slide 43: Floorspace Optimisation in 2022
FLOORSPACE OPTIMISATION IN 2022 2021 2022 target YoY In 2022, floorspace of traditional APPAREL stores 404 401 -3 stores should increase by 3% YoY. SEGMENT m2 40,930 41,299 + 1% stores 145 147 +2 VISTULA m2 18,531 18,619 0% stores 114 113 -1 Floorspace of franchise stores BYTOM at the end of 2022 sh
Slide 44: 2022 Targets
2022 TARGETS RISKS 1 Continuation of the double-digit sales growth of the Group. Off-line and on-line increases. impact of war in Ukraine Further improvement of the gross margin - 2 more effective discount policy. high inflation Increase in operating margin due to the 3 positive effect of operating
Slide 45: We Help Ukraine
WE HELP UKRAINE employees from financial support from Ukraine receive VRG and W.KRUK for in-kind support by financial support and the Polish clothing donation psychological Humanitarian Action assistance 45 | 4Q21 Presentation
Slide 46: Q&A
05 Q&A
Slide 47: Back-up
WISTULA M WOLCZANKA DE WKRUK BACK-UP VRG
Slide 48: Summary of Brands' 4Q21 Results
SUMMARY OF BRANDS’ 4Q21 RESULTS SIGNIFICANT IMPROVEMENT IN HIGH, POSITIVE THE HIGHEST SHARE GROSS MARGIN. STORE EBIT. OF INTERNET. RECORD HIGH THE HIGHEST GROSS REVENUES IN THE MARGIN. QUARTER. 48 | 4Q21 Presentation
Slide 49: Vistula: Executive Summary
VISTULA: EXECUTIVE SUMMARY VISTULA (MEN AND WOMEN FASHION) - VISTULA is a brand that combines traditional tailoring and global trends, inspiring customers looking for a modern, original and individual style. - Within the VISTULA brand, we distinguish VISTULA, VISTULA RED, and LANTIER collections as
Slide 50: Vistula: Triple-Digit Increase in Store EBIT
VISTULA: TRIPPLE-DIGIT INCREASE IN STORE EBIT Vistula brand revenues (PLN m) Revenues of Vistula brand amounted to PLN 221.8m in 2021, up 221.8 12.9% YoY. The brand's stores generated PLN 132.6m, + 24.0% YoY, 196.4 despite shopping centers being closed for over 2 months due to +13% 45.3 COVID-19.
Slide 51: Bytom: Executive Summary
BYTOM: EXECUTIVE SUMMARY BYTOM (MODA MĘSKA) - Bytom – a Polish brand with origin dating back to 1945. - The brand offers men’s formalwear and smart casual and casual assortment. - ”Made to Measure” – personalised men’s tailoring offered in selected stores. SPRING/SUMMER 2022 COLLECTION - The campaig
Slide 52: Bytom: Improvement in Gross Profit Margin
BYTOM: IMPROVEMENT IN GROSS PROFIT MARGIN Bytom brand retail revenues (PLN m) Revenues of the Bytom brand amounted to PLN 160.6m in 2021, up by 9.2% YoY. The brand's stores generated PLN 117.2m, 160.6 +22.6% YoY, despite shopping centers being closed for more than 147.1 2 months due to the COVID-1
Slide 53: Wólczanka: Executive Summary
WÓLCZANKA: EXECUTIVE SUMMARY WÓLCZANKA (FASHION FOR MEN AND WOMEN) - Wólczanka runs a chain of its own and franchise boutiques with women's and men's clothing in Poland. The offer includes, among others, shirts, sweaters, pants, dresses, t- shirts, jackets and accessories. Wólczanka also owns the La
Slide 54: The Highest Share of On-line in Sales
THE HIGHEST SHARE OF ON-LINE IN SALES Wólczanka brand revenues (PLN m) Revenues of the Wólczanka brand amounted to PLN 115.7m in 2021, +16.6% YoY. The brand's stores generated PLN 40.7m, 99.2 115.7 +26.1% YoY, despite shopping centers being closed for more than 2 months due to COVID-19. +17% 61.4
Slide 55: Deni Cler: Executive Summary
DENI CLER: EXECUTIVE SUMMARY DENI CLER (WOMEN’S FASHION) - Women’s fashion brand with Italian origin, established in Italy in 1971. - A network of stores for women over 35 years of age who value high quality and elegance. - Collections created from highest quality fabrics with superior accessories a
Slide 56: Deni Cler: Doubling of Store EBIT
DENI CLER: DOUBLING OF STORE EBIT Deni Cler brand revenues (PLN m) Revenues of the Deni Cler brand amounted to PLN 45.3m in 2021, 45.3 growing by 20.7% YoY. The brand's stores generated PLN 24.0m, 37.5 +22.3% YoY, despite shopping centers were closed for more than 2 months due to the COVID-19 pand
Slide 57: W.KRUK: Executive Summary
W.KRUK: EXECUTIVE SUMMARY THE OLDEST JEWELLEY BRAND IN POLAND - The jewellery offer includes gold and silver jewellery, diamonds, precious stones and original collections. - W.KRUK's offer also includes global watches brands, such as Rolex and Patek Philippe (sole distributor in Poland), Cartier, Ja
Slide 58: W.KRUK: A Pandemic Resistant Brand
W.KRUK: A PANDEMIC RESISTANT BRAND W.KRUK brand retail revenues W.KRUK brand's retail revenues amounted to PLN 497.7m in 2021, (PLN m) growing by 42.7% YoY. The brand's stores generated PLN 422.7m, 497.7 +50.1% YoY, despite shopping centers being closed for more than 348.7 2 months due to COVID-19
Slide 59: Group Structure
GROUP STRUCTURE VRG CO M PA N I E S I N C LU D E D I N T H E CO N S O L I DAT E D S TAT E M E N T S F O R 4 Q 2 1 JEWELLERY SEGMENT APPAREL SEGMENT OTHER ACTIVITY VRG S.A. W.KRUK S.A. WSM Factory sp. z o.o. (formerly WSM parent company Sp. z o.o.), VG Property sp. z o.o. Jewellery, watches, accessor
Slide 60: Optimisation of Number of Stores Continues
OPTIMISATION OF NUMBER OF STORES CONTINUES NUMBER OF STORES 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 total 451 440 427 426 427 421 415 409 404 APPAREL SEGMENT franchise 132 126 126 129 136 135 135 131 127 total 154 148 145 147 149 148 148 146 145 VISTULA franchise 62 59 60 62 65 64 64 63 61 tota
Slide 61: Stable YoY Floorspace
STABLE YOY FLOORSPACE M2 OF FLOORSPACE 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 total 43,731 42,962 41,953 41,891 42,021 41,564 41,337 40,864 40,930 APPAREL SEGMENT franchise 9,590 9,123 9,195 9,368 9,882 9,789 9,794 9,577 31,468 total 19,320 18,650 18,291 18,508 18,695 18,586 18,593 18,390 18,5
Slide 62: Own E-stores of Five Brands
OWN E-STORES OF FIVE BRANDS On-line sales by segments (PLN m) We have own e-stores for all five retail brands. Our aim is to develop on-line stores of own brands (monoshops). 16.8 13.4 12.2 14.2 Revenues and costs of on-line stores are allocated directly to the 9.4 7.9 10.6 9.1 8.3 brands. 48.9
Slide 63: Costs/m2 Under Control
COSTS/ M2 UNDER CONTROL Operating costs per month/m2 (PLN, excl. IFRS16) Differences in SG&A costs/ m2 between segments result from different business models. The jewellery segment is characterised by higher revenues and 1,766 costs/m2 than these of the apparel segment. 1,510 1,142 1,113 1,248 1
Slide 64: Seasonal Increase in Marketing Expenses
SEASONAL INCREASE IN MARKETING EXPENSES Off-line marketing costs by segments (PLN m) Off-line marketing costs are part of group selling costs. These encompass recurring advertising spending (catalogues, photoshoots) and nationwide marketing campaigns in editorial, 5.7 6.8 internet and TV with ce
Slide 65: Historical Quarterly Results, IFRS16
HISTORICAL QUARTERLY RESULTS, IFRS16 PLN m 1Q20 1Q21 YoY 2Q20 2Q21 YoY 3Q20 3Q21 YoY 4Q20 4Q21 YoY Revenues 197.5 172.1 -12.8% 174.9 244.0 39.5% 249.4 305.0 22.3% 232.0 348.8 50.3% Gross profit on sales 94.0 81.7 -13.1% 82.1 131.1 59.8% 122.4 163.3 33.4% 118.9 192.0 61.5% Gross profit on sales margi
Slide 66: Results under IAS17
RESULTS UNDER IAS17 PLN m, IAS17 4Q20 4Q21 YoY PLN m, IAS17 2020 2021 YoY Revenues 232.0 348.8 50.3% Revenues 853.7 1 069.9 25.3% Gross profit on sales 118.9 192.0 61.5% Gross profit on sales 417.3 568.2 36.1% Gross profit on sales margin 51.2% 55.1% 3.8pp. Gross profit on sales margin 48.9% 53.1% 4
Slide 67: FX Risk Exposure
FX RISK EXPOSURE Purchases by currencies (PLN m) FX risk is sizeable for the capital group, thus it is being hedged CHF, 13% CHF, 16% since 2Q16. Hedging only relates to the apparel segment. USD, 33% USD, 30% The group is a beneficiary of strengthening of zloty versus foreign currencies. 2020 EU
Slide 68: Net Cash on Balance Sheet
NET CASH ON BALANCE SHEET PLN m 4Q20 2Q21 4Q21 Long-term debt 48.6 42.6 34.6 Interest bearing indebtedness includes: bank loans, finance leases and reverse factoring (taken over with Bytom S.A. merger). Bank loans 47.2 41.1 33.7 Bank loans include: overdrafts and investment bank loans. Bank Fina
Slide 69: Shareholder Structure
SHAREHOLDER STRUCTURE Shareholder structure as at 08.04.2022 (share in equity and votes) Other free- Number of IPOPEMA TFI % share float shares/votes 22.99% 29.46% 1. IPOPEMA TFI 53,922,030 22.99% 2. PZU OFE and DFE 39,870,193 17.01% 3. NN OFE 32,750,487 13.97% PZU OFE and 4. Jerzy Mazgaj 21,900,000
Slide 70: Glossary
GLOSSARY APPAREL SEGMENT REVENUES (PLN/M2 PER MONTH) STORE EBIT (PLN M) FORMAL Revenues from brands: Vistula, Wólczanka, Quarterly revenues of segment or brand Store operating profit calculated as gross Revenues from sale of formalwear, including Bytom (from XII 2018), Deni Cler and (stores and inte
Slide 71: Thank You
THANK YOU VRG S.A. Pilotów 10 St. 31-462 Cracow