Pepco Group Bv · GPW:PCO
Pepco Group Bv — H1 FY25 Earnings Presentation
34 slides from Pepco Group Bv's earnings presentation, May 22, 2025
Slide 1: H1 FY25 Interim Results
H1 FY25 Interim Results 22 May 2025
Slide 2: Stephan Borchert, CEO
Stephan Borchert CEO H1 FY25 Interim Results 2
Slide 3: Highlights
Highlights • Pepco delivering on objectives - H1 EBITDA growth of +11% ahead of sales growth, with trading momentum continuing into Q3 • Action plan in place to improve Poundland performance. Board actively exploring Poundland separation options with exit expected by end of FY25 • Strong balance she
Slide 4: Clear strategic framework to deliver on growth ambitions
Clear strategic framework to deliver on growth ambitions Continue to grow our Refocus and Simplify and topline Win in digitise Pepco’s Upgrade our streamline the through Western customer core operating Group measured Europe proposition to platform portfolio expansion in drive LFL CEE • Focus on Pepc
Slide 5: 'New Pepco' is delivering on objectives set out at CMD
‘New Pepco’ is delivering on objectives set out at CMD H1 FY25 FY25 guidance Revenue growth 9% High single-digit growth Gross margin % 48% Flat y-o-y New Pepco* EBITDA growth (IFRS 16) 9% High single-digit growth EBIT growth (IFRS 16) 6% High single-digit growth 3.6% Positive LFL momentum +2.3% in H
Slide 6: Pepco Poland acceleration a key priority for Group
Pepco Poland acceleration a key priority for Group Poland LFL lagging other CEE markets CEE market maturity levels Poland LFL in FY25 • Getting Poland – our largest market - back on track is a key priority • Focus on store refits/relocations, where necessary, and (3.3%) (2.7%) operational excellence
Slide 7: Momentum for Pepco Western Europe
Momentum for Pepco Western Europe Iberia and Italy are focus markets Positive WE LFL in FY25 Initial FMCG conversions encouraging Spain 2 Store Converted 12.9% conversions stores sales to date growth y-o-y* Ital 200 8.0% erman 6 ree e 53 +45% Q1 FY25 Q2 FY25 Q3 FY25 to date ort gal 20 • 16 new store
Slide 8: Data & digital will be increasingly leveraged to drive LFL
Data & digital will be increasingly leveraged to drive LFL Build digital shop window and engagement to Digitally Digital customer influenced ✓ s pport ep o’s pri e-leading value proposition and engagement drive digitally influenced store sales (DISS) store sales Traffic to store LFL Grow customer li
Slide 9: Dealz: Solid progress continues in H1
Dealz: Solid progress continues in H1 • Dealz carving a strong reputation for international branded FMCG goods at the best prices in Poland • Solid H1 results: • Revenues up 14% y-o-y • Gross margin of 33.7%, up 150bps y-o-y • EBITDA (IFRS 16) up 25% • 13 new stores opened; with 344 at end of H1 • B
Slide 10: Poundland action plan in place to improve performance
Poundland action plan in place to improve performance Update: Poundland separation from Group • Poundland is well-positioned for recovery under revitalised leadership • Board continues to actively explore separation options for Poundland business with an exit • Business is currently working on an ac
Slide 11: Willem Eelman, CFO
Willem Eelman CFO H1 FY25 Interim Results 11
Slide 12: H1 FY25 financial highlights
H1 FY25 financial highlights H1 FY25 financial highlights Revenue Revenue Revenue Revenue LFL € , m €2,171m €1 2m €9 5m (0.7%) +4.3% +9.3% +13.8% (6.5%) Gross Margin EBITDA IFRS 16 Gross Margin (%) Gross Margin(%) Gross Margin(%) €1, 5m € 60m +47.3% +33.7% +34.5% +43.3% (5.5%) +180bps +150bps (430bp
Slide 13: H1 FY25 Group revenue by segment
H1 FY25 Group revenue by segment LFL revenue growth in H1 FY25 H1 FY25 y-o-y revenue growth by segment H1 FY24 H1 FY25 Revenues (3.2%) +2.3% Pepco +9.3% €2,171m (4.6%) +2.9% Dealz +13.8% €1 2m Poundland (6.5%) €9 5m (0.7%) (7.3%) (2.5%) (0.7%) Pepco Group +4.3% € , m Note: LFL calculated at constant
Slide 14: Gross margin expansion in Pepco and Dealz
Gross margin expansion in Pepco and Dealz Revenue (EUR m) Underlying EBITDA (EUR m) Gross Margin 36 • Group gross margin up 21 20bps to 43.3% • Pepco and Dealz gross margin driven by normalisation of supply 47.3% chain following Red Sea 185 33.7% +180bps +150bps challenges in prior period 93 38.8% (
Slide 15: Gross margin improved by 140bps before Poundland impact
1 5 Gross margin improved by 140bps before Poundland impact Pepco & Dealz 44.5% 1.3% 43.3% 43.1% 1H FY24 Product Category Freight, Duty & Net FX GM% before Poundland 1H FY25 Margin Mix Other Markdown Poundland impact Note: H1 FY24 Gross margin of 43.1% includes Poundland. The 130bps Poundland impact
Slide 16: Segmental EBITDA: Strong Pepco offsetting significant decline in Poundland
Segmental EBITDA: Strong performance of Pepco offsetting significant decline in Poundland Revenue (EUR m) Underlying EBITDA (EUR m) Underlying EBITDA IFRS 16 (EUR m) 36 21 1,054 €440m €15m €487m +11.1% 93 +25.0% €87m (5.5%) (74.7)% 87 396 €396m €460m 285 87 €12m1,986 440 €22m H1 FY24 H1 FY25 H1 FY24
Slide 17: Operating costs driven by higher volumes, new stores and wage inflation
bb Operating costs driven by higher volumes, new stores and wage inflation Operating cost growth of 10% • Total store costs grew 11% driven by store labour costs and store openings +10.4% • Double-digit volume growth at Pepco resulted 984 in higher investment in store handling hours 891 • High wage
Slide 18: Tight control on SG&A, with investments in strategic initiatives
Tight control on SG&A, with investments in strategic initiatives Opco SG&A costs in line with prior year; Lower SG&A as % of sales through Central costs driven by strategic projects better cost control +6.8% 237 222 (10bps) 22 32 11 12 6.9% 6.8%* 56 50 6.9% 6.7% 10 5.3% 5.0% 133 133 6.7% 6.1% H1 FY2
Slide 19: Pre-IFRS 16 net debt and cash
Closing cash up €120m over last 12 months €620m Pre-IFRS 16 Gross Debt €650m Net Debt €429m €279m Leverage 1.0x 0.6x 19
Slide 20: Financing: Healthy balance sheet, with reduction in leverage
Financing: Healthy balance sheet, with reduction in leverage Facility Amount Drawn Coupon Expiry Net debt (pre-IFRS 16) Term Loan B €250m €250m 6m Euribor + 1.5% April 2026 RCF € 90m €0m 6m Euribor + 1.15% April 2027/8 €150m improvement Corporate Bond € 75m € 75m 7.25% June 2028 429 279 Public credi
Slide 21: Updated guidance for FY25
Updated guidance for FY25 All numbers on an underlying basis FY24 pro-forma FY25 Revenues €3,853m(2) High single-digit growth Gross margin % 47.5%(3) Flat y-o-y ‘New ep o’(1) EBITDA (IFRS 16) €767m(4) High single-digit growth EBIT (IFRS 16) €391m(5) High single-digit growth EBITDA (IFRS 16) €153m €0
Slide 22: Stephan Borchert, CEO
Stephan Borchert CEO H1 FY25 Interim Results 22
Slide 23: 'New Pepco' medium-term ambition from FY26
‘New Pepco’ medium-term ambition from FY26 Revenue growth of at least 7% CAGR; EBITDA growth of at least 9% CAGR Gross margin of c. 48% Around 250 net new stores p.a. Greater than €200m free cash flow; Capex of €160m to €180m p.a. Leverage no higher than 1.5x (pre IFRS 16) (1) New Pepco equals Pepco
Slide 24: Summary
Summary • Pepco and Dealz delivering on objectives • Board actively exploring Poundland separation options - exit expected by end of FY25 • Strong balance sheet with €150m y-o-y improvement in H1 net debt • Focus on shareholder returns with €200m share buyback capability during FY25 – FY27 Executing
Slide 25: Q&A
Q&A 25
Slide 26: Appendix
Appendix 26
Slide 27: Profit and loss summary
Profit and loss summary Change % (constant Change % (actual H1 FY25 H1 FY24 currency) currency) EUR m • First half P&L heavily Revenue 3,338 3,200 +2.9% +4.3% impacted by performance in Like-for like revenue (%) (0.7%) (2.5%) n/a n/a Poundland Gross profit 1,445 1,378 3.5% 4.9% • Group gross profit
Slide 28: Cash Flow Summary
Cash Flow Summary EUR m H1 FY25 H1 FY24 Change % • Operating ash flow of €5 m Underlying EBITDA pre-IFRS 16 235 278 (15.5%) de reased b €12 m ear-on- Working capital - IFRS16 (141) (56) 151.8% year, impacted by lower EBITDA Working capital – pre-IFRS 16 movements 3 (3) (200.0%) coupled with a deteri
Slide 29: Balance Sheet Summary
Balance Sheet Summary 31 Mar 2025 31 Mar 2024 Change • Healthy balance sheet, with a EUR m reduction in leverage year on Assets year, and a strong financial Property, plant and equipment 634 783 (19.0%) covenant position Right of Use Asset 1,163 1,244 (6.5%) Goodwill and other intangible assets 36 8
Slide 30: H1 FY25 capex spend of €53m driven by new stores and refits
3 0 H1 FY25 capex spend of €53m driven by new stores and refits Core infrastructure investment in IT and supply chain 30% 146 gross new stores opened in H1 FY25 ( 101 net openings) Maintenance capex – largely 54% store upkeep 4% 12% Store refits New store Store refits Maintenance IT & other 30
Slide 31: Store coverage map
Store coverage map TOTAL PEPCO POUNDLAND DEALZ 3,887 818 344 5,049 Poland Bulgaria Latvia Pepco 1367 Pepco 171 Pepco 63 Dealz 344 Slovakia Germany Stores Pepco 154 Pepco 63 United Kingdom Poundland 741 Serbia Slovenia Pepco 159 Pepco 40 Romania Pepco 481 Croatia Estonia Stores Pepco 131 Pepco 38 Cze
Slide 32: Focus on Pepco
Focus on Pepco Revenue & LFL Store Numbers LFL Growth % + 9.3% + 6.1% 2.3% (3.2%) 2,171 3,665 3,887 1,986 H1 FY24 H1 FY25 H1 FY24 H1 FY25 EBITDA (IFRS 16) Gross Profit EBITDA % Sales Gross Margin % + 11.1% + 13.6% 20.3% 47.3% 19.9% 45.5% 396 440 904 1,027 H1 FY24 H1 FY25 H1 FY24 H1 FY25 32
Slide 33: Focus on Poundland
Focus on Poundland Revenue & LFL Store Numbers LFL Growth % (6.5%) (5.3%) (0.7%) (7.3%) 864 1,054 985 818 H1 FY24 H1 FY25 H1 FY24 H1 FY25 EBITDA (IFRS 16) Gross Profit EBITDA % Sales Gross Margin % (74.7%) (16.9%) 8.3% 38.8% 34.5% 2.2% 87 409 340 22 H1 FY24 H1 FY25 H1 FY24 H1 FY25 33
Slide 34: Focus on Dealz
Focus on Dealz Revenue & LFL Store Numbers LFL Growth % + 13.8% + 8.9% 2.9% (4.6%) 182 344 160 316 H1 FY24 H1 FY25 H1 FY24 H1 FY25 EBITDA (IFRS 16) Gross Profit EBITDA % Sales Gross Margin % + 25.0% + 19.6% 33.7% 8.1% 32.2% 7.4% 12 15 51 61 H1 FY24 H1 FY25 H1 FY24 H1 FY25 34