Allegro.eu S.a. · GPW:ALE
Allegro.eu — Q3 2021 Earnings Presentation
29 slides from Allegro.eu's earnings presentation, Nov 9, 2021
Slide 1: Allegro.eu Q3 2021 Results presentation
| 1 Allegro.eu Q3 2021 Results presentation 9 November 2021
Slide 2: Disclaimer
| 2 Disclaimer This presentation (“Presentation”) has been prepared by Allegro.eu, a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 1, rue Hildegard von Bingen, L – 1282 Luxembourg, Grand D
Slide 3: Agenda
| 3 1 2 Highlights Financial results Agenda 3 4 Summary Q&A
Slide 4: Allegro GMV growth accelerates to 19.9% in Q3 with full year expectations unchanged
| 4 1 Allegro GMV growth accelerates to 19.9% in Q3 with full year expectations unchanged Growth driven by solid progress on business inputs with Allegro Pay and delivery projects reaching important milestones: GMV growing to PLN 9,897m, +19.9% YoY for Q3 and to PLN 29,933m, +23.4% YoY for 9M 2021
Slide 5: Q3 2021 key results
| 5 1 Q3 2021 key results GMV Active Buyers GMV per Active Buyer1 Take Rate2 PLN 9,897m Q3’21 13.3m Q3’21 PLN 3,067 Q3’21 10.29% Q3’21 +19.9% YoY +5.6% YoY +24.5% YoY +0.90pp YoY PLN 29,933m 9M’21 10.40% 9M’21 +23.4% YoY +1.20pp YoY Revenue Adjusted EBITDA Adjusted EBITDA / GMV Cash Conversion3 marg
Slide 6: Key business developments for Q3 2021
| 6 1 Key business developments for Q3 2021 Adjacent International Consumer B2B expansion International verticals Smart! Advertising FinTech Delivery sellers Retail inbound Benefit from experience Basics underlying market growth “Accelerate the flywheel” “Incubate and maximise future levers” While c
Slide 7: Retail Basics: consumer-centric approach to selection, price, and convenience
| 7 1 Retail Basics: consumer-centric approach to providing the best selection, price, and convenience Further selection growth Price leadership Improving convenience • Crossed the >250m offers milestone • Continuously improving coverage of price • New, faster and highly automated • In Q3 we added D
Slide 8: Improvement in next day delivery; One Fulfillment pilot and One Box APM launch
| 8 1 Improvement in next day delivery; started commercial pilot of One Fulfillment and launched APM network One Box, complemented by same day courier acquisition Improving delivery speed Fulfillment Last Mile +8pp % of parcels delivered next day Q3 Q3 2020 2021 • Significant improvement of next day
Slide 9: Further improving Smart! for customers and substantially growing the user base
| 9 1 Further improving Smart! for customers and substantially growing the user base Growing the user base Improving Smart! for customers • Continuation of Smart! For Start campaign supporting substantial • Single PLN 40 MOV2 across all delivery methods driving growth in Smart! user base and driving
Slide 10: Allegro Pay: raising 2021 loans issued guidance
| 10 1 Allegro Pay: raising 2021 loans issued guidance with acceleration driven by full customer eligibility • Allegro Pay now open to all customers wishing to apply for up to PLN 4,200 purchasing limit • Leveraging PSD21 access to widen Loans issued >1,500 credit checking capabilities to include ne
Slide 11: Agreement with AION to take instalment loans off-balance sheet
| 11 1 Agreement with AION to take instalment loans off-balance sheet allowing for Allegro Pay growth acceleration and improved returns on investment Key terms Key benefits • Receivables Purchase Agreement signed between Allegro • Dedicated external funding for continued fast loan Pay and Aion Bank
Slide 12: Strategic rationale for the acquisition of Mall Group
| 12 1 Strategic rationale for the acquisition of Mall Group announced on 4 November Nearly doubles Allegro’s TAM in highly attractive countries PLN 1,139bn Combined retail TAM Scattered competitive landscape provides opportunity to #1-2 Combined positions create best-in-class consumer proposition i
Slide 13: Mall Group transaction highlights
| 13 1 Mall Group transaction highlights Transaction Allegro to acquire 100% of Mall Group a.s. (“Mall Group”) and WE|DO CZ s.r.o. (“WE|DO”) from selling shareholders PPF, EC summary Investments and Rockaway Capital1 Acquisition Comprises the e-commerce and logistics businesses and brands of Mal
Slide 14: Allegro's mid term ambitions to transform and grow Mall Group (2022-2025)
| 14 1 Allegro’s mid term ambitions to transform and grow Mall Group (2022-2025) (2022-2025) Marketplace 3P GMV share rising from 10% in Sep-21 to at least 2/3rd of GMV transformation GMV Mid-term growth at ~30% CAGR, accelerated by the deployment of Allegro’s marketplace across Mall Group’s markets
Slide 15: Continued ESG effort reflected in MSCI ESG rating upgrade to A
| 15 1 Continued ESG effort reflected in MSCI ESG rating upgrade to A, up from BB Selected Q3 achievements • MSCI ESG Ratings upgraded Allegro.eu to A from BB • Publication of the Allegro.eu’s Annual ESG Report, in accordance with international reporting standards1: https://raportesg.allegro.pl/en/
Slide 16: Average annual spend per buyer up 24.5% YoY; Active Buyers returned to growth
| 16 2 Average annual spend per buyer up 24.5% YoY and crossed PLN 3,000, while Active Buyers returned to growth in Q3, up 5.6% YoY and 0.8% QoQ Active Buyers (period end)1 LTM GMV / Active Buyer (period end)1 m PLN 5.6% 24.5% 3.3% 2.0% -0.5% 0.8% 3.1% 3.3% 13.2 13.2 13.3 6.7% 3,067 12.6 13.0 9.6% 2
Slide 17: GMV growth accelerated to 19.9% YoY in Q3 with 2-year CAGR at 34%
| 17 2 GMV growth accelerated to 19.9% YoY in Q3 with 2-year CAGR at 34% GMV1 PLN bn 48.7% 57.5% 46.1% 10.6% 19.9% • LTM GMV up by 30.9% YoY, reaching PLN 40.8bn • YoY growth driven by retail basics and increasing 10.9 Smart! GMV share reflected in buyer engagement 10.4 9.6 9.9 • eBilet continued re
Slide 18: Revenue grows strongly ahead of GMV growth in Q3
| 18 2 Revenue grows strongly ahead of GMV growth in Q3, up by 32.9% YoY Revenue Quarterly revenue structure PLN m PLN m 39.0% 49.7% 61.2% 61.1% 28.4% 32.9% 3,752.2 1,299.0 1,308.1 0.5% 1,210.2 0.4% 0.4% 1,233.9 0.8% 9.1% 4.9% 8.7% 3.1% 2.9% 4.1% 8.9% 2,698.8 8.4% 928.7 0.6% 8.4% 4.0% 32.9% 1,233.9
Slide 19: Marketplace and advertising drive Q3 revenue growth
| 19 2 Marketplace and advertising drive Q3 revenue growth Revenue Bridge Take Rate1 PLN m % 31.0% 39.7% -5.2% 91.8% 75.8% 32.9% • Take rate up by 0.9pp YoY and down by 0.17pp QoQ, in line with expectations 1,233.9 • Usual seasonal drop expected for Q4 31.1 32.6 4.4 238.9 -1.9 928.7 10.43 10.46 10.2
Slide 20: Moderate increase in cost of sales as % of revenue
| 20 2 Moderate increase in cost of sales as % of revenue, driven by rising number of Smart! subscribers Cost of sales as % revenue 32% 31% 30% • Net costs of delivery up by 60% YoY due to rising 29% 27% 8% 6% number of Smart! users, higher transactions per user, 5% 5% 4% with YoY share of courier d
Slide 21: 1.6pp YoY increase in SG&A costs as % of revenue
| 21 2 1.6pp YoY increase in SG&A costs as % of revenue to support innovation roadmap SG&A as % revenue1 31% 29% • SG&A costs net of adjustments increased by 40% YoY 28% 4% 27% 3% 27% 1% in Q3 driven by rising marketing and staff costs 1% 3% 3% 4% 1% 2% 2% 0.3% 2% • Marketing costs growth driven lar
Slide 22: Adjusted EBITDA at PLN 472m in Q3 2021, up 15.5% YoY
| 22 2 Adjusted EBITDA at PLN 472m in Q3 2021, up by 15.5% YoY with Adjusted EBITDA to GMV margins up 0.22pp for 9M YoY at 5.24% 26.7% 38.8% 50.6% 23.8% 15.5% 28.8% 1,567.2 Adjusted EBITDA1 1,216.5 PLN m 533.5 535.6 559.9 408.5 471.7 Q3 Q4 Q1 Q2 Q3 9M 9M 2020 2020 2021 2021 2021 2020 2021 % Margin 4
Slide 23: EBITDA adjustments during Q3 2021
| 23 2 EBITDA adjustments during Q3 2021 Reconciliation of Adjusted EBITDA [PLN m] YTD Q3 2021 YTD Q3 2020 Change % Q3 2021 Q3 2020 Change % 1 In 2021 includes mainly expenses in respect of Adjusted EBITDA 1,567.2 1,216.5 28.8% 471.7 408.5 15.5% international expansion Monitoring costs - 2.8 (100.0%
Slide 24: 120% YoY capex acceleration in Q3, reflecting investments in Allegro One Lockers
| 24 2 120% YoY capex acceleration in Q3, reflecting investments in Allegro One Lockers Capital expenditures1 • Other capex growth driven by Allegro’s by type 54.8% flagship projects in Delivery Experience: PLN m One Fulfillment and One Box APMs3 by 256.7 Allegro – aimed at faster deliveries and inc
Slide 25: Further organic deleveraging to 1.8x
| 25 2 Further organic deleveraging to 1.8x [PLN m] Sep-20 Proforma1 Jun-21 Sep-21 • Lower leverage triggered 50 bps drop in interest rate from August Adjusted EBITDA LTM 1,600.8 2,037.6 2,100.7 • External financing from Aion bank Borrowings at amortised cost 5,437.4 5,445.8 5,344.0 expected to rele
Slide 26: On track to meet expectations for 2021
| 26 2 On track to meet expectations for 2021 with focus on GMV growth through leading on value proposition for consumers and merchants 2020 FY 2021 FY 2021 Actual Last update Update Comments GMV 54% High teens-Low 20s% Unchanged • Q4 growth headwind from lock-downs in 2020 YoY growth YoY growth Rev
Slide 27: Summary
| 27 3 Summary Q3 GMV growth accelerated to 20% YoY as anticipated Crossing PLN 3,000 average annual spend per buyer with Active Buyers returning to QoQ growth Allegro Pay roll-out scaling strongly and external financing arranged Speeding up delivery times with Last Mile projects passing key milesto
Slide 28: Questions & Answers
| 28 4 Questions & Answers
Slide 29: Thank you
| 29 Thank you