Slide 1: 4Q21/22 Results Presentation
4Q21/22 4Q21/22 RESULTS PRESENTATION GDAŃSK, APRIL 21, 2022
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
3 01 4Q21/22 PRESENTATION Key corporate events
Slide 4: We support Ukraine
We support Ukraine LPP HELPS UKRAINE SINCE THE FIRST DAYS OF WAR LPP, together with LPP Foundation, allocated PLN 20m to financial and material assistance to people affected by the armed conflict in Ukraine. LPP first provided assistance to the company's employees in Ukraine and their relatives: 4 •
Slide 5: Closed stores in Russia
Closed stores in Russia 5 • our stores and e-stores do not operate in Russia, • we do not ship goods to Russia, • goods that were to be shipped to Russia will be sold in other markets or transferred to subsequent seasons on other markets, • as at January 31, 2022, after conducted write-offs, fixed a
Slide 6: So far result of closing down of stores on Eastern markets
So far result of closing down of stores on Eastern markets closing down of 6 553 stores PLN 335m in Russia write-offs in 4Q21/22 (writing down fixed assets related to 251 stores) closing down of 159 stores in Ukraine PLN 273m (PLN 156m write offs for stores, write-offs in 4Q21/22 4Q21/22 PRESENTATIO
Slide 7: Presence in countries
Presence in 39 countries 5 31 553 20 22 1 21 952 Open as at 18 As at 31.01.2022 No of stores 19.04.2022 102 159 7 65 20 LPP GROUP 2,244 71% 35 12 40 101 Poland 952 100% 10 33 29 6 Europe 530 100% CIS 753 13% ME 9 100% 3 1 2 2 4Q21/22 PRESENTATION 1 online + offline online offline
Slide 8: 4Q21/22 financial results
8 02 4Q21/22 PRESENTATION 4Q21/22 financial results
Slide 9: Different YoY impact of pandemics and war
Different YoY impact of pandemics and war Rebound in sales before Shopping centers open Another pandemic wave. Lockdown in Poland for Lockdown in Poland Shopping centers the holiday season. in Poland. Faster rebound From March 20, stores most of November. throughout January. Sell- in Poland closed a
Slide 10: Different YoY restrictions in 2021/22
Different YoY restrictions in 2021/22 10 4Q21/22 PRESENTATION
Slide 11: Towards omnichannel
Towards omnichannel OFFLINE ONLINE 2,244 33 stores countries 11 +31.5% +77.7% m2 sales +55.8% LFLs 26 39 +78.8% countries GROUP COUNTRIES REVENUES 4Q21/22 PRESENTATION
Slide 12: Doubling of Group revenues
Doubling of Group revenues GROUP REVENUES OMNICHANNEL REVENUES (PLN m) 4,122.8 PLN m 4Q20/21 4Q21/22 YoY 3,643.1 3,913.4 LPP GROUP 2,094.4 4,122.8 96.8% 2,724.2 906.8 1,272.8 793.2 Reserved 904.6 1,508.1 66.7% 2,445.7 2,350.3 2,129.3 2,094.4 390.7 Cropp 259.8 411.2 58.3% 445.9 621.2 778.1 988.3 Hous
Slide 13: Over PLN 1bn e-commerce revenues in quarter
Over PLN 1bn e-commerce revenues in quarter ONLINE SALES ONLINE BY REGIONS (PLN m) (PLN m) PLN 1,272,8m 1,272.8 211.1 988.3 PLN 778.1m 906.8 +63.6% 778.1 793.2 88.0 609.1 621.2 313.3 13 445.9 390.7 384.0 376.8 452.6 4Q20/21 4Q21/22 4Q19/20 1Q20/21 2Q20/21 3Q20/21 4Q20/21 1Q21/22 2Q21/22 3Q21/22 4Q21
Slide 14: Foreign revenues higher than domestic ones
Foreign revenues higher than domestic ones REVENUES BY REGIONS IN 4Q21/22 4Q21/22 FLOORSPACE (PLN m) (by regions) ths m2 4Q20/21 4Q21/22 YoY Poland 1,591 +92% YoY LPP GROUP 1,435,4 1,888.1 31.5% Poland 566.9 677.2 19.5% Europe 1,258 +84% YoY 14 Europe 432.6 522.8 20.9% Eastern +86% YoY 1,071 Eastern
Slide 15: High gross profit margin and inventory
High gross profit margin and inventory QUARTERLY GROUP GROSS PROFIT MARGIN INVENTORY AND INVENTORY/M2 4,000 2,057 2,400 60.6% 3,500 1,702 58.3% 1,572 2,000 3,000 1,614 1,490 1,455 1,439 55.5% 1,266 1,223 3,864 1,600 2,500 51.9% 2,000 1,200 56.6% 2,962 55.4% 1,500 2,311 800 15 48.2% 53.4% 2,239 1,000
Slide 16: Costs/m2 growth below sales/m2 growth
Costs/ m2 growth below sales/m2 growth COSTS OF OWN STORES/ M2 SG&A COSTS/ M2 (IAS17) (IFRS16) +15% YoY 44% YoY 195 160 167 166 148 150 144 156 56 141 51 55 49 60 48 44 53 49 47 353 38 38 47 49 285 293 292 16 40 37 36 53 257 262 275 223 245 86 69 72 60 57 58 65 58 53 4Q19/20 1Q20/21 2Q20/21 3Q20/21
Slide 17: Quarter impacted by write-offs
Quarter impacted by write-offs PLN m, IFRS16 4Q20/21 4Q21/22 YoY Revenues 2,094.4 4,122.8 96.8% • High double-digit sales increases YoY due to good online and Gross profit margin on sales 53.4% 60.6% 7.2pp. offline sales results. YoY increase in gross margin due to higher in prices. Operating expens
Slide 18: EBIT more favourable under IFRS16 than IAS17
EBIT more favourable under IFRS16 than IAS17 PLN m, IAS17 4Q20/21 4Q21/22 YoY EBITDA PLN 156.6m of additional depreciation Revenues 2,094.4 4,122.8 96.8% of the right-of-use asset. Gross profit margin on sales 53.4% 60.6% 7.2pp. 4Q21/22 18 SG&A costs 995.9 1,963.9 97.2% EBIT 67.0 -57.5 N/M 59% of re
Slide 19: Almost PLN 1bn net income in 2021/22
Almost PLN 1bn net income in 2021/22 mln PLN, MSSF16 2020/21 2021/22 YoY Revenues 7,848.1 14,029.7 78.8% • High double-digit sales growth YoY due to the development of omnichannel. Significant increase in gross margin YoY: lower YoY Gross profit margin on sales 52.0% 57.8% 5.7pp. sell-offs, more fav
Slide 20: Executive summary
Executive summary 2021/22 1 High offline revenue dynamics despite pandemics. 20 2 Double-digit online sales growth. 3 Gross profit and operating margin improvement. 4 Trade liabilities exceed inventory. 5 Net cash (IAS17). 4Q21/22 PRESENTATION
Slide 21: Sustainability Report for 2021/22
LPP & LPPS [> r SUSTAINABILITY ™ f> <..’ /REBORT | 7™. FOR 2021/22 } . “ WITH ESG BROU A ! Lio RESERVED CROPP (}NOowse HIHIT0 sinsay
Slide 22: 2022/23 + outlook
22 03 4Q21/22 PRESENTATION 2022/23 + outlook
Slide 23: Strategic shift: from East to West
Along with Russia's invasion on Ukraine and closing down of two key Eastern markets, LPP sees its opportunity for 23 development in the West. We are prepared for development in the West: • we have been developing e-commerce for several years, due to which we know the trends in individual countries o
Slide 24: Sources of LPP's growth in upcoming years
3 sources Reserved online Sinsay’s network of traditional stores Sinsay online LPP’s advantage lies of LPP’s growth brand development on European markets (smaller cities, retail parks, value for money in a proven online sales model in the value for concept) money segment 24 in upcoming years: 4Q21/2
Slide 25: CEE – our key region
CEE – our key region 25 1. The CEE region will remain the largest 2. Sinsay should be the key growth driver (smaller towns, retail parks) online + offline online offline 3. Dynamic online development (mainly Reserved and Sinsay) 4Q21/22 PRESENTATION End of 2022/23: • 1,123 ths m2 of floorspace • 1,4
Slide 26: Baltic countries – a stable business
Baltic countries – a stable business 26 1. Dynamic Sinsay offline development 2. Online development, especially Sinsay online + offline online offline 3. Stable traditional network 4Q21/22 PRESENTATION of other brands End of 2022/23: • 89.4 ths m2 of floorspace • 102 stores
Slide 27: SEE – a growth region
SEE – a growth region 27 1. Sizeable development potential of the traditional network, especially in Romania, Bulgaria and Serbia 2. Continuation of dynamic online online + offline online offline 2022 development (benefiting from 4Q21/22 PRESENTATION the logistics potential) End of 2022/23: 3. New o
Slide 28: WE countries – growing presence
WE countries – growing presence 1. Using the potential of a pan- 28 European e-store (adding Sinsay, only Reserved so far) 2. Further online development in Germany and the UK 3. Three new offline markets online + offline online offline 2023/24 in 2023/24: Italy and Greece 4Q21/22 PRESENTATION (Sinsa
Slide 29: Eastern Europe – two largest markets closed
Eastern Europe – two largest markets closed 29 1. Closed stores in Russia and 65% of traditional stores in Ukraine 2. E-stores’ operations suspended 3. There are no development plans online + offline online offline in the region due to political situation 4Q21/22 PRESENTATION End of 2022/23: • 49.1
Slide 30: ME – stability
ME – stability 30 1. Stabilization in number of countries 2. Development of e-commerce through franchise partners online + offline online offline 3. Potential for growth in number of stores in the medium-term 4Q21/22 PRESENTATION End of 2022/23: • 10.6 ths m2 of floorspace • 11 stores
Slide 31: 2022/23 targets
2022/23 targets Over PLN 16bn of revenues, +13% YoY. Fall in floorspace to 1,778 ths m2 (assuming no Russia and Ukraine). Emphasis on Sinsay, over 400 new stores Targets this year. PLN 5bn online sales. 31 Lower gross profit and operating margin. Maintenance of net cash. PLN 1 bn capex (
Slide 32: A dividend paying company
A dividend paying company The Management Board of LPP proposed that the separate net profit for the financial year 2021/22 in the amount of PLN 1,431.5m should be distributed as follows: 32 • PLN 648.3m to be distributed to shareholders as a dividend of PLN 350 per share; • PLN 410.0m to cover the l
Slide 33: Q&A
4Q21/22 PRESENTATION 33 Q&A 04
Slide 34: Contact
discoverlpp company/lpp-sa discoverlpp discoverlpp Contact GDAŃSK HQs CONTACT FOR INVESTORS CONTACT FOR MEDIA WWW.LPPSA.COM Łąkowa 39/44, 80-769 Gdańsk Email: LPP.investor.relations@lppsa.com Email: media@lppsa.com Tel. +48 58 76 96 900 Email: lpp@lppsa.com