Douglas Ag · XETR:DOU
Douglas — Investor Presentation (February 2022)
51 slides from Douglas's investor presentation, February 2022
Slide 1: Douglas
DOUGLAS February 2022
Slide 2: Douglas Investment Highlights
DOUGLAS INVESTMENT HIGHLIGHTS Europe’s leading and Douglas is Europe’s #1 A diversified leader in large, innovative online beauty premium beauty destination2 structurally growing and platform with ~€1.2bn sales1, resilient European beauty growing at c.30% CAGR for market the last 3 years Winning and
Slide 3: Douglas is the leading beauty platform in Europe's premium beauty market in 2019
DOUGLAS IS THE LEADING BEAUTY PLATFORM IN EUROPE'S PREMIUM BEAUTY MARKET IN 2019 Premium sales, 2019 (€m) We generate Ca. almost same premium sales as Douglas’ 2,550 core geo- the next 3 competitors in graphies2 Douglas’ #1 position3 total in core drives future geographies2 economies of scale, attra
Slide 4: Douglas: Synonym for Beauty Across Europe
DOUGLAS: SYNONYM FOR BEAUTY ACROSS EUROPE Customer The eminent perception of Douglas brand Douglas2 power drives traffic Unmatched brand awareness1 and customer acquisition at Truly a Synonym for beauty in all of its low cost markets unique brand… Highly trusted ... with leading Premium image awaren
Slide 5: Omnichannel champion with growing share of most valuable omnichannel customers
OMNICHANNEL CHAMPION WITH GROWING SHARE OF MOST VALUABLE OMNICHANNEL CUSTOMERS Share of customers shopping ~2x omnichannel (%) While the overall share of omnichannel customers is increasing, the > 2x > 2x percentage is almost twice as high among 29% the young key customer group 19% 17% 12% 359 148 1
Slide 6: European beauty is a large, structurally growing and resilient market
EUROPEAN BEAUTY IS A LARGE, STRUCTURALLY GROWING AND RESILIENT MARKET MARKET VOLUME1 (€BN) The European beauty market is worth €92bn, Online has been growing particularly fast and more than doubled in out of which Douglas’ key product categories market size within the premium segment between 2015 an
Slide 7: Unique market characteristics – need for a trusted premium curator
UNIQUE MARKET CHARACTERISTICS – NEED FOR A TRUSTED PREMIUM CURATOR IN A SHIELDED DISTRIBUTION SYSTEM Manufacturer Customer Hundreds of brands Millions of customers Trusted premium curator Selective distribution In order to ensure that their brand is presented in line with their premium positioning,
Slide 8: #FORWARDBEAUTY.DIGITALFIRST
#FORWARDBEAUTY.DIGITALFIRST STRATEGY EXECUTION UPDATE BEAUTY PLATFORM 1 Brand positioning E-COMMERCE ONLINE SHOP MARKETPLACE 8 3 ASSORTMENT 5 CURATION / CRM Choice & innovation Inspiration & personalisation 4 SUPPLY CHAIN 6 TECHNOLOGY Customer Operational excellence Data-driven culture Partner relat
Slide 9: We upgraded and rejuvenated the Douglas brand
WE UPGRADED AND REJUVENATED 1 THE DOUGLAS BRAND MORE MODERN AND NEW VISUAL NEW PREMIUM POSITIONING LANGUAGE LOGO 9 Brand Store Assortment Supply Chain CRM Technology
Slide 10: Our stores from point of sale to point of experience
OUR STORES FROM POINT OF 2 SALE TO POINT OF EXPERIENCE Flagship Luxury Prestige Premium AI-based ordering DOUGLAS Warehouse Network of 5 OWAC1 AI-based replenishment Major city, high Prime location Premium Mainstream DOUGLAS E-Com order Store traffic location, with luxury wealthy shopping E-Com orde
Slide 11: Assortment: clear differentiation with >160,000 beauty products
ASSORTMENT: CLEAR DIFFERENTIATION WITH 3 >160,000 (4) BEAUTY PRODUCTS BEAUTY HAIR DERMA BEAUTY ACCESORIES & JEWELLERY WITH MORE THAN 160,000 SKUS DOUGLAS HAS THREE TIMES AS MANY SKUS AS ITS CLOSEST COMPETITOR 1 101 marketplace partners as of 31 Dec 2020 in Germany, marketplaces in Austria and France
Slide 12: Strategic expansion into online pharmacy market
STRATEGIC EXPANSION INTO ONLINE PHARMACY MARKET NEXT LOGICAL STEP IN LINE WITH CUSTOMER TRENDS 3 Capitalizing on mega trends beauty and health in an aging European society › Convergence of beauty and health › Desire for a health-conscious lifestyle › Aging society stimulates growth in health market
Slide 13: High attractiveness and strategic fit of pharmacy market
HIGH ATTRACTIVENESS AND STRATEGIC FIT OF 3 PHARMACY MARKET Highly attractive Perfect strategic fit market potential1 to DOUGLAS ▪ Size 2021: €160bn pharmacy ▪ Customers: High addressable market in DOUGLAS core customer base via ~50m Beauty countries, of which ~€59bn in Card holders² results in high
Slide 14: Acquisition of Disapo Apotheke B.V.
ACQUISITION OF DISAPO APOTHEKE B.V. 3 UNIQUE OPPORTUNITY TO ENTER ONLINE PHARMACY BUSINESS ▪ Integration of Disapo into DOUGLAS Partner Program ▪ Start with dermacosmetics and OTC products in Germany in April 2022 ▪ Extension into Rx with introduction of ▪ Located in The Netherlands next e-prescript
Slide 15: Powerful extension of Douglas' core
POWERFUL EXTENSION OF DOUGLAS’ CORE 3 Building the leading European beauty & health platform while adding step by step health competence to the DOUGLAS brand 15 Brand Store Assortment Supply Chain CRM Technology
Slide 16: Our integrated physical and digital supply chain
OUR INTEGRATED PHYSICAL 4 AND DIGITAL SUPPLY CHAIN PHYSICAL SUPPLY CHAIN › New go-to-market supply chain strategy: One Warehouse, All Channels (OWAC) OWAC sites › 5 OWAC sites to be built to enable E-Com growth and marketplace partner fulfilment by Douglas with up to 150k SKUs per site in total, rep
Slide 17: Douglas DataHub is the key enabler for the holistic machine learning data strategy
DOUGLAS DATAHUB IS THE KEY ENABLER FOR THE 5 HOLISTIC MACHINE LEARNING DATA STRATEGY OFFLINE DATA RETAIL MEDIA DATA CRM DATA MARKETPLACE DATA DOUGLAS WEBSITE DATA PERFORMANCE MARKETING DATA ANALYTICS DATA BI-DIRECTIONAL DATA EXCHANGE UNIDIRECTIONAL DATA EXCHANGE DOUGLAS APP DATA 17 Brand Store Assor
Slide 18: CRM: 1:1 curated customer communication in all channels
CRM: 1:1 CURATED CUSTOMER COMMUNICATION 5 IN ALL CHANNELS › Personal beauty tips › Personalised start page › Personalised offers › Customer master data › Individualised product news › Beauty points, coupons & › Inspirational content › Personal salutation › Targeted product rewards › Push notificatio
Slide 19: Curation/CRM: Douglas Live
CURATION/CRM: DOUGLAS L I V E 5 IMPRESSIVE STARTING POINT FOR SOCIAL COMMERCE L I V E Live Shows in 8 Viewers inc. Customers aged Average conversion countries: DE, replays with 60% 16-30 vs. 26% for rate (Conversion AT, CH, NL, IT, of app share all E-Commerce rate E-Com ES, PL & FR shoppers Germany:
Slide 20: Successful Partner Program in 5 countries
SUCCESSFUL PARTNER PROGRAM IN 5 COUNTRIES 5 NETHERLANDS LIVE SINCE OCT 2021 NUMBER OF PARTNER NUMBER OF PARTNERS PROGRAM SKUS (ALL COUNTRIES) (ALL COUNTRIES)* 274 234 101 101 Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 Partner Program live Partner Program upcoming FY 21/22 Q3 *Incl. Small brands via
Slide 21: Digital infrastructure in place
DIGITAL INFRASTRUCTURE IN PLACE 5 Omni- Channel BW Business Commerce Customer Intelligence Cloud Data Cloud store FICO Accounting Covid resulted in Online acceleration – Douglas’ established technological infrastructure copes with changing buyer behaviour ERP LES Marketing Cloud 21 Brand Store Assor
Slide 22: Launch of Store Optimization Program
LAUNCH OF STORE OPTIMIZATION PROGRAM IN LINE WITH #FORWARDBEAUTY.DIGITALFIRST Sustainable shift from offline to online High number of stores Change of customer behavior in post-Covid within same catchment new normal with reduced store traffic areas drive potential to capture offline revenue Re-balan
Slide 23: Optimized store portfolio will increase EBITDA
OPTIMIZED STORE PORTFOLIO WILL INCREASE EBITDA STORE PORTFOLIO OPTIMIZATION ILLUSTRATIVE Current Store Revenue Revenue P&L After Store Portfolio Transfer Transfer Closures Closure of stores with negative or low profitability Online Channel Offline Channel Net Revenue transfer to nearby EBITDA effect
Slide 24: Store Optimization Program and #ForwardOrganization completion by end of FY21/22
STORE OPTIMIZATION PROGRAM AND #FORWARDORGANIZATION COMPLETION BY END OF FY21/22 EBITDA potential One-offs cash Main lever Comments (€m) (€m) Optimisation of store portfolio based on analysis of catchment areas Selection of future store network based on performance, Store portfolio €43m Net cash eff
Slide 25: SOP implementation overview
SOP IMPLEMENTATION OVERVIEW FULLY ON TRACK, 85% OF SAVINGS ACHIEVED STATUS 31.12.2021 STORE CLOSURES / LEASE FTE REDUCTIONS RENT NEGOTIATIONS KEEP TERMINATIONS (CURRENT EST.) OPEN STORES1 (# OF STORES) Contracts terminated Store 55% re-negotiation 48% Stores closed 81% in closure stores completed (#
Slide 26: Summary
SUMMARY Transformation to an integrated, digital beauty platform reflects the changes in consumer behavior Store closures are a consequence of the digital transformation Remaining stores become part of the integrated, digital beauty platform Positive effects on EBITDA enable us to further pursue our
Slide 27: Closer Look: Q1 2021/22 Financials
CLOSER LOOK O4 2020/21 FINANCIALS
Slide 28: Net sales development by segment
NET SALES DEVELOPMENT BY SEGMENT GROUP Q1 2021/22 Total, in m€ DACHNL FRANCE 573 615 +7.3% GROUP +11.7% lfl 287 325 +13.2% 1,307 1,173 +11.4% +14.7% lfl Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 +16.8% lfl SOUTHERN EUROPE CENTRAL EASTERN EUROPE 193 208 +7.7% 159 120 +32.6% +24.7% lfl +36.4% lfl Q1
Slide 29: Net sales development Q1 2021/22
NET SALES DEVELOPMENT Q1 2021/22 NET SALES LFL +10.9% VS. PRE-COVID-19-LEVEL In m€ GROUP TOTAL GROUP E-COMMERCE GROUP BRICK & MORTAR 1,307 1,173 +11.4% +16.8% lfl 866 739 +17.3% 433 437 +27.8% lfl +1.0% Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 › Strong performance despite Co
Slide 30: Net sales development by segment: E-Commerce
NET SALES DEVELOPMENT BY SEGMENT E-COMMERCE Q1 2021/22 E-Commerce, in m€ DACHNL FRANCE 285 293 +2.9% GROUP 88 76 433 437 -13.6% +1.0% Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 SOUTHERN EUROPE CENTRAL EASTERN EUROPE 31 32 +2.7% 36 29 +24.1% Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1
Slide 31: E-Com and Brick & Mortar complement each other
E-COM AND BRICK & MORTAR COMPLEMENT EACH OTHER E-COMMERCE SALES SHARE >30% IMPRESSIVE LONG-TERM E-COM GROWTH SALES SHARE E-COM AND BRICK & MORTAR NET SALES (In m€) 1,199 1,293 1,173 1,307 817 Dec 2021 LTM vs. Dec 2020 63.1% 66.5% CAGR LTM B&M 80.7% 585 423 383 324 261 180 36.9% 145 33.5% 106 69 E-Co
Slide 32: E-Commerce: strong development of KPIs
E-COMMERCE: STRONG DEVELOPMENT OF KPI’S STRONG IMPACT BY PRIOR YEAR’S LOCKDOWNS IN DE, FR, PL, NL GROUP Q1 2021/22 (VS. PY) +1.0% +0.2%pts +1.0% E-Com net sales Average basket (incl. VAT) Conversion rate +4.1%pts +3.6%pts E-Com sales share Mobile sales share App sales share** New customers in E-Com*
Slide 33: Net sales development by segment: Brick & Mortar
NET SALES DEVELOPMENT BY SEGMENT BRICK & MORTAR Q1 2021/22 Brick & Mortar, in m€ DACHNL FRANCE 322 288 +11.8% 245 199 +22.7% GROUP +21.7% lfl 866 +29.1% lfl 739 +17.3% Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 SOUTHERN EUROPE CENTRAL EASTERN EUROPE +27.8% lfl 161 175 +8.7% 124 90 +38.1% +30.4% lfl
Slide 34: Adjusted EBITDA development Q1 2021/22
ADJUSTED EBITDA DEVELOPMENT Q1 2021/22 In m€ GROUP TOTAL Strict cost discipline in personnel and operating expenses drives higher adjusted EBITDA with sustained margin despite 191 highly competitive environment in E-Commerce 171 191,1 Store Optimization Program: fully on track and delivering 171,1 l
Slide 35: Adjusted EBITDA development by segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT Q1 2021/22 Adjusted EBITDA1, in m€ DACHNL FRANCE 92 87 GROUP -5.0% 57 67 +18.1% 16.1% 14.2% 191 19.8% 20.6% 171 +11.6% Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 14.6% 14.6% SOUTHERN EUROPE CENTRAL EASTERN EUROPE 28 38 Adjusted 19 +47.4% 27 +42.3% EBITDA Margi
Slide 36: P&L overview
P&L OVERVIEW Q1 2021/22 Reported EBITDA: In m€ Q1 2020/21 Q1 2021/22 ∆ Increased significantly over prior year due to higher Net sales 1,172.9 1,306.9 11.4% net sales, sustained gross profit margin and general Gross profit 513.0 560.4 9.2% cost discipline Gross profit margin 43.7% 42.9% -0.9% Adjust
Slide 37: Net working capital and CAPEX
NET WORKING CAPITAL AND CAPEX ONGOING IMPROVEMENTS AND INVESTMENT DISCIPLINE In m€ NET WORKING CAPITAL CAPEX 188 15 10 -32.6% -59.7% 76 31.12.2020 31.12.2021 Q1 2020/2021 Q1 2021/2022 › Strong limit control and use of RELEX in DE, AT & CH, in IT & › Cautious spending policy against the background of
Slide 38: Free cash flow
FREE CASH FLOW IMPACTED BY EBITDA AND WORKING CAPITAL In m€ ADJUSTED FCF DEVELOPMENT FREE CASH FLOW BRIDGE Q1 2021/22 310 273 297 Q1 2019/20 Q1 2020/21 Q1 2021/22 113 29 36 297 1 296 0 296 191 14 1 2 3 Adj EBITDA CAPEX Working TAX Others Adj. Free EBITDA Free Cash M&A Free Cash 4 Capital Cash Flow A
Slide 39: Liquidity headroom and leverage
LIQUIDITY HEADROOM AND LEVERAGE ONGOING COST AND CASH DISCIPLINE CASH BALANCE TOTAL NET LEVERAGE Improved liquidity In m€ Seasonal peak at the end of important Christmas quarter with high cash inflows 8.4x 8.0x Ongoing cost and cash 5.6x 5.5x discipline 623 Low cash capex in Q1 +36% Shifted payments
Slide 40: Summary Q1
SUMMARY Q1 Like-for-like sales significantly above pre-Covid-19 level E-com maintains high level while Brick & Mortar recovers Double-digit growth of adjusted EBITDA Robust liquidity situation DOUGLAS strategy #FORWARDBEAUTY.DigitalFirst is in full execution Execution of Store Optimization Program w
Slide 41: Appendix
Slide 42: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA Consulting fees: EBITDA ADJUSTMENTS In Q1 2021/22 primarily for infrastructure optimisation; prior-year especially refinancing (m€) Q1 2020/21 Q1 2021/22 FY 2019/20 FY 2020/21 PPA: Former acquisitions Reported EBITDA 148.4 190.1 176.1 19.3 COVID-19: Consulting fees 5.3 3.7 19.5
Slide 43: Deep dive into LFL net sales development
DEEP DIVE INTO LFL NET SALES DEVELOPMENT QUARTERLY OVERVIEW LIKE FOR LIKE NET SALES DEVELOPMENT Q1 2020/21 Q2 2020/21 Q3 2020/21 Q4 2020/21 Q1 2021/22 DACHNL -3.3% -22.1% -3.5% 2.6% 11.7% France -6.5% -7.6% 28.7% 10.6% 14.7% Southern Europe -12.1% -4.8% 35.4% 8.1% 24.7% Central Eastern Europe -8.8%
Slide 44: Overview segmental structure
OVERVIEW SEGMENTAL STRUCTURE BRICK & MORTAR, NEW STRUCTURE SINCE Q1 2021/22 DACHNL FRANCE Austria France Germany Monaco Switzerland The Netherlands CENTRAL EASTERN EUROPE Bulgaria SOUTHERN EUROPE Croatia Andorra Czech Republic Italy Estonia Portugal Hungary Spain Latvia Lithuania Poland Romania Slov
Slide 45: Selected segmental KPIs
SELECTED SEGMENTAL KPIS REPORTED EBITDA CAPEX Q1 2020/21 Q1 2021/22 Q1 2020/21 Q1 2021/22 DACHNL 79.6 80.9 DACHNL 2.5 2.5 France 56.4 70.6 France 1.6 1.5 Southern Europe 16.7 33.2 Southern Europe 1.4 1.4 Central Eastern Europe 23.8 37.7 Central Eastern Europe 3.0 0.3 Consolidation 0.0 0.0 Consolidat
Slide 46: Cash flow statement
CASH FLOW STATEMENT Cash flow from CASH FLOW STATEMENT operating activities Increased due to EBITDA increase and higher sales especially in brick & mortar (m€) Q1 2020/21 Q1 2021/22 Cash flow from Net cash flow from operating activities 277.7 307.9 investing activities Reduced due to responsible spe
Slide 47: Net working capital
NET WORKING CAPITAL NET WORKING CAPITAL Net Working Capital Continues to be a key focus; 286 252 efficient management supported by AI-based 188 184 software RELEX NWC as % of LTM net sales 76 Inventory Lower inventory partially due to delayed deliveries by suppliers, Dec 20 Mar 21 Jun 21 Sep 21 Dec
Slide 48: Evolution of capital structure
EVOLUTION OF CAPITAL STRUCTURE CASH AND DEBT STRUCTURE AS OF 31 DECEMBER 2021 Senior PIK Notes: m€ x Adj. x Mgmt. Adj. Maturity Pricing EBITDA1 EBITDA² › Type of interest payments is generally at Cash and Equivalents 465 Douglas’ discretion › Douglas intends to RCF (€170m Volume) 0 Jan 26 E+4.75% ge
Slide 49: Premium store network footprint across Europe
PREMIUM STORE NETWORK FOOTPRINT ACROSS EUROPE NUMBER OF STORES Limited store openings* 2,371 Decrease in number of stores driven by SOP 141 Portfolio realignment across Europe will 1,983 -11% result in further reduction in number of stores 133 31 Dec 2020 (m€) – 2,230 31 Dec 2021 1,850 Store opening
Slide 50: Notice to recipients
NOTICE TO RECIPIENTS This presentation and any materials distributed in connection herewith (together, The information in this Presentation does not constitute investment, legal, expressly disclaims any such obligation, to update, revise or amend any forward- the “Presentation”) have been prepared b
Slide 51: Contact
Contact: Douglas Investor Relations Tel.: +49 211 16847 8594 E-Mail: ir@douglas.de