Signa Sports United N.v. · OTC:SSUNF
Signa Sports United — H1 FY23 Earnings Presentation
33 slides from Signa Sports United's earnings presentation, Jun 28, 2023
Slide 1: H1 FY23 Earnings Presentation, June 28, 2023
JUNE 28,2023 =<" =? PRESENTATION
Slide 2: Disclaimer
SIGNA SPORTS UNITED 2 This presentation (“Presentation”) is provided by SIGNA Sports United N.V. (the “Company”, and together with its consolidated subsidiaries, the “Group”) for informational purposes only. The information contained herein does not purport to be all-inclusive and neither the Compan
Slide 3: Disclaimer (continued)
SIGNA SPORTS UNITED 3 o political changes; o changes in laws and regulations; o our expectations relating to dividend payments and forecasts of our ability to make such payments. Forward-looking statements speak only as of the date they are made, and the Group assumes no duty to and does not underta
Slide 4: SIGNA SPORTS UNITED 4
SIGNA SPORTS UNITED 4
Slide 5: Key messages: strategic realignment and return to profitability
SIGNA SPORTS UNITED 5 – Strategic realignment and onboarding of highly experienced leadership in Bike and Tennis – Business focus on returning to profitability – Benefits of strategic realignment to drive ~100M EUR of run-rate savings, including o Focus on core markets o Adaptation of commercial and
Slide 6: 01. Strategic Realignment
O1. STRATEGIC REALIGNMENT 02. H1FY23 FINANCIAL UPDATE 03. OUTLOOK
Slide 7: Input costs and inflation normalizing
SIGNA SPORTS UNITED 7 (2.0%) – 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 CY 23 CY 24 Source: Inflation forecasts via Factset, The Economist, Freightos Global Container Freight Index. Note: Commodity Price: Average price performance
Slide 8: Bike market overstock and stock levels
(27.0)% (17.0)% (18.0)% Bio-Bike PAC Total U.K. Bike Market 8SIGNA SPORTS UNITED Source: Company information, U.K. Bicycle Association, Wall Street research. (1): Stock levels refers to the total inventory positions of 3 publicly traded bike OEMs. €1.6 €2.1 2021A 2022A Raw Goods Finished Goods (B) 4
Slide 9: Focused plan to navigate challenging market conditions
SIGNA SPORTS UNITED 9 Deliver transaction synergies Adapt commercial and operating models Focus on core markets Focused plan to navigate challenging market conditions with clear course towards profitable growth
Slide 10: Focus on core markets
SIGNA SPORTS UNITED 10 − Deliberate reorientation to prioritize core markets − Commercial proposition in non-core markets optimized for contribution (pricing, delivery fees, returns, marketing) − International partnerships scaled back or not renewed − Localization strategy paused − Consolidation of
Slide 11: Targeted measures to trim stock position
SIGNA SPORTS UNITED 11 Q3 FY22 vs. H1 FY23 Achievements Actions to Come − Targeted cancellation of inbound orders − Elevated promotional activity to right-size inventory position and clear overstocked inventory − Extraordinary write-off of ~20M EUR of inventory to be sold through alternative channel
Slide 12: Rightsizing of cost structure
H1 FY22 H1 FY23 Operational Non-Operational SIGNA SPORTS UNITED 12 H1 FY22 vs. H1 FY23 Achievements Actions to Come − Right-sizing of operational employee base through churn and logistics consolidation − Reduction in force across the non-operational employee base − Creation of a central non- COGS pr
Slide 13: Expanded scale to enable margin expansion
SIGNA SPORTS UNITED 13 H1 FY22 vs. H1 FY23 Achievements Actions to Come − Cross-sell of Own Brand portfolio across European / U.K. banners − Prioritization of range management to spotlight Owned Brand portfolio − Localized Own Brand Bike team and shops in core U.S. growth market − Realize procuremen
Slide 14: Run-rate Adj. EBITDA impact of realignment
Focus on Core Markets Adapt Commercial / Operating Model Transaction Synergies Run-Rate Adj. EBITDA Impact % of Run-Rate Impact Achieved SIGNA SPORTS UNITED 14 1 2 3 − Manage non-core markets for contribution − Reduce marketing in low- ROAS markets − Reduce inventory pre-order − Reduce personnel foo
Slide 15: 02. H1 FY23 Financial Update
Slide 16: Key operating metrics: visits, orders, AOV
SIGNA SPORTS UNITED 16 Source: Company information. Note: Pro forma metrics include the impact of Midwest Sports, WiggleCRC and Tennis Express acquisitions, assuming ownership for the entire period. For historical comparison of PF metrics, please see Appendix. Metrics are presented for continuing op
Slide 17: Revenue performance by category
SIGNA SPORTS UNITED 17 • Disruptions across Bike category driving the large majority of financial performance in H1 FY23 as elevated promotional activity required to clear aged stock • Contraction in demand particularly acute in non-core markets • Resilience in Tennis operating performance partially
Slide 18: Financial results Q2 and H1 FY23
Q2 FY20 Q2 FY21 Q2 FY22 Q2 FY23 H1 FY20 H1 FY21 H1 FY22 H1 FY23 H1 FY22 H1 FY23 YoY PF YoY SIGNA SPORTS UNITED 18 Note: Pro forma metrics include the impact of Midwest Sports, WiggleCRC and Tennis Express acquisitions, assuming ownership for the entire period. Metrics are presented for continuing op
Slide 19: Margin and cost drivers
SIGNA SPORTS UNITED 19 Note: Metrics are presented for continuing operations only, as a result of the discontinued operations related to Athleisure. Refer to Note 11- Discontinued Operations of the Company’s 20-F. Metrics are presented on a Non-GAAP basis. (1) For more information on the definitions
Slide 20: Cash flow summary
SIGNA SPORTS UNITED 20 Note: Metrics are presented for continuing operations only, as a result of the discontinued operations related to Athleisure. Refer to Note 11- Discontinued Operations of the Company’s 20-F. Metrics are presented on a Non-GAAP basis. Cash flow from Continuing Operating Activit
Slide 21: Inventory development
• Inventory levels impacted by the conflict in Ukraine, which strongly affected consumer confidence at the start of peak season in March FY22 • Significant delays of inbound orders (several months) due to supply chain challenges reversed quicker than expected at YE FY22 • Meaningful progress made in
Slide 22: Liquidity and debt summary
Cash on Balance Sheet (Q2 FY23) €35 Debt Summary Bank Revolving Credit Facility(1) €100 Bank Loans 8 SIGNA Holding Credit Facility(2) 100 SIGNA Holding Senior Convertible Notes(3) 142 Total SSU Debt €350 SSU Net Debt €314 PF Q2 FY23 Liquidity Summary SIGNA Holding Convertible Commitment 1(4) €88 SIG
Slide 23: Appendix
ss O1. STRATEGIC REALIGNMENT Ss 02. H1FY23 FINANCIAL UPDATE SS. . “= = APPENDIX 2 we f } 7 OUTLOOK
Slide 24: Outlook
SIGNA SPORTS UNITED 24 – Emphasis on driving sales in core markets due to favorable unit economics – Margin improvement anticipated in H2, as industry overstock improves – Cost savings associated with strategic realignment measures to begin to be realized in H2 FY23, full impact to be felt from FY24
Slide 25: Megatrends driving sustained participation
SIGNA SPORTS UNITED 25 Source: UK Bicycle Association. (1): UK Market, average daily bike participation compared to March 2020 baseline. (2): UK Market e-bike sales value. (3): UK Market increase in bike market average sales price. (4): UK market increase in e-bike share of total bicycle sales (32%
Slide 26: FY23 guidance: overstock to weigh on profitability
SIGNA SPORTS UNITED 26 Overstock to weigh on profitability into H2 FY23 (2)% (22)% €(153)M (9)% - (11)% (16)% - (18)% €(100) - €(120)M €(250) - €(270)M Note: Adj. EBITDA, unlevered free cash flow and free cash flow are presented on a Non GAAP basis. For more information on the definitions, please se
Slide 27: Fully funded with clear pathway to profitability
SIGNA SPORTS UNITED 27 Business fully funded to navigate near-term disruption, clear pathway to profitability 7% - 10% 10% - 15% 0% - 5% 12% - 15%15% (16)% 5% (6)% − Structural megatrends to resume 10%+ annual growth in online sports retail − Owned Brand portfolio, geographic expansion, expansion of
Slide 28: Key takeaways
SIGNA SPORTS UNITED 28 ✓ Intact structural megatrends behind online specialist sports retail ✓ Market dislocation is accelerating industry consolidation ✓ Strategic realignment to increase SSU’s competitiveness for sustainable and profitable growth; most severe impact of market dislocations already
Slide 29: Appendix
Slide 30: Historical quarterly KPIs and pro forma metrics
SIGNA SPORTS UNITED 30 Source: Company information. Note: SSU (Reported View) excludes the impact of WiggleCRC, Tennis Express acquisitions until Q2 FY22. Midwest Sports included from 09-May-2021. Pro forma metrics include the impact of Midwest Sports, WiggleCRC and Tennis Express acquisitions, assu
Slide 31: Net loss to Adj. EBITDA reconciliation
H1 H1 FY22 FY23 Net Loss (€196.4) (€180.5) Income tax expense / benefit €8.0 €3.0 Earnings before tax (EBT) (€204.4) (€183.5) Interest €2.6 (€13.1) Depreciation and amortization (€21.5) (€27.6) EBITDA (€185.4) (€142.8) Impairment loss – €0.2 Other net finance (income) / costs (€10.8) €0.3 Result fro
Slide 32: Defined terms and KPI definitions
KPI Definition Active Customers Customers with one or more purchases within the last 12 months, irrespective of cancellations or returns Total Visits Number of visits including mobile and website. Cut-off at 30 minutes of inactivity and at date change. Not cut off at channel change during session Ne
Slide 33: SSU Investor Relations
SIGNA SPORTS UNITED 33 SSU Investor Relations https://investor.signa-sportsunited.com SSU Investors Contact Alima Levy a.levy@signa-sportsunited.com +49 174 7304938