Slide 1: 1Q24 results presentation
1Q24 results presentation A MODERN GROUP WITH TRADITIONS May 21, 2024
Slide 2: Disclaimer
Disclaimer This presentation (the "Presentation") was prepared by VRG S.A. (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 the Capital Group and does not presen
Slide 3: Introduction
VRG Ol Introduction
Slide 4: New collections and stores in the first months of 2024
New collections and stores in the first months of 2024 Introduction of new collections Opening of third W.KRUK in apparel brands - a larger location in Hungary. One store share of more responsible under preparation collections New collections in the W.KRUK brand (jewellery, watches) 4
Slide 5: Actions directly with the customers
Actions directly with the customers Promotion of the Bytom brand The Deni Cler Academy as part of an additional Bytom consists of thematic meetings x Mercedes initiative, co- organized for the brand's organized with Sobiesław clients, building an engaged Zasada Automotive. community. Pilot event "Pe
Slide 6: April 2024 with slight YoY revenue fall
April 2024 with slight YoY revenue fall Jewellery segment Favourable sales dynamics of the jewellery segment in each REVENUE DYNAMICS of the last 12 months due to (PLN m) the development of the network and continuing demand for jewellery and 30% 40% watches. 18.1% 30% 20% 18.1% 12.4% 15.8% 13.7% 13.
Slide 7: April 2024 stronger on-line than off-line
April 2024 stronger on-line than off-line Stores Positive sales dynamics in traditional stores from September 2023, except for REVENUE DYNAMICS January and April 2024. (PLN m) 20% 50% 15% 34.9% 40% Group 26.9% 20.6% 14.6% 24.0% 30% Off-line sales are still 10% 18.2% significantly higher than on- 20%
Slide 8: Growing gross profit margin in majority of months
Growing gross profit margin in majority of months GROSS PROFIT ON SALES MARGIN V.23 VI.23 VII.23 VIII.23 IX.23 X.23 XI.23 XII.23 I.24 II.24 III.24 IV.24 Gross profit on sales 56.5% 56.6% 53.7% 53.9% 54.8% 55.4% 53.4% 54.3% 52.1% 54.0% 55.4% 56.8% margin YoY -1.0 pp. +1.4 pp. +2.2 pp. +4.2 pp. +0.1 p
Slide 9: A slight increase in Group's floorspace
A slight increase in Group's floorspace GROUP FLOORSPACE CHANGE YOY GROUP FLOORSPACE CHANGE YOY (ths m2) (ths m2) +2.3 +0.9 9.7 -1.8 7.9 +0.1 -0.8 +0.3 0.0 52.0 52.4 42.2 44.5 -0.4 1Q23 VST BTM WLC DCG W.KRUK 1Q24 1Q23 Own stores Franchise stores 1Q24 • Group floorspace stood at 52.4 ths m2 at the e
Slide 10: Performance by brands
VRG [ 1 O 2. Performance by brands
Slide 11: Vistula: slight YoY revenue fall in 1Q24
Vistula: slight YoY revenue fall in 1Q24 VISTULA BRAND REVENUES (PLN m) 80.5 11.2 71.6 65.8 67.0 10.4 63.0 6.0 16.0 9.8 51.8 14.6 47.6 14.2 13.3 46.9 44.0 12.7 7.0 6.9 10.6 10.2 11.4 10.1 9.0 7.0 7.4 53.2 46.6 43.4 46.7 34.7 39.1 25.2 31.7 29.7 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Own stores
Slide 12: Vistula: 1Q24 executive summary
Vistula: 1Q24 executive summary VISTULA BRAND REVENUES VISTULA BRAND EFFICIENCY PLN m 47.6 46.9 1Q23 1Q24 YoY 6.9 -1.6% 10.2 Revenues (PLN/m2 per month) 895 871 -2.7% 9.0 YoY 7.0 Gross profit margin (%) 51.3% 55.1% 3.8pp. 31.7 29.7 Cost of stores 481 512 6.3% (PLN/m2 per month) 1Q23 1Q24 Store EBIT
Slide 13: Bytom: slight YoY growth in 1Q24 revenues
Bytom: slight YoY growth in 1Q24 revenues BYTOM BRAND REVENUES (PLN m) 57.4 50.1 51.6 52.8 6.5 2.7 46.7 6.9 7.2 11.4 1.8 38.9 13.3 31.2 1.8 1.8 33.9 1.1 34.6 6.0 6.8 1.2 8.0 7.9 1.0 0.7 1.2 48.3 42.9 38.4 37.7 36.9 31.7 22.1 26.1 25.8 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Own stores Franchise
Slide 14: Bytom: 1Q24 executive summary
Bytom: 1Q24 executive summary BYTOM BRAND REVENUES BYTOM BRAND EFFICIENCY PLN m 33.9 34.6 1Q23 1Q24 YoY 6.8 8.0 Revenues (PLN/m2 per month) 797 856 7.3% 1.0 1.9% YoY 0.7 Gross profit margin (%) 54.1% 54.9% 0.8pp. 26.1 25.8 Cost of stores 507 555 9.6% (PLN/m2 per month) Store EBIT (PLN m) -3.2 -3.4 N
Slide 15: Wólczanka: double-digit revenue growth in 1Q24
Wólczanka: double-digit revenue growth in 1Q24 WÓLCZANKA BRAND REVENUES (PLN m) 35.0 37.0 35.9 28.0 27.7 24.0 25.2 16.7 18.3 21.7 20.3 17.6 13.4 10.1 14.1 13.4 4.4 3.8 11.3 3.4 7.3 2.9 3.2 2.2 2.0 1.8 2.2 14.9 15.4 13.9 11.4 14.2 10.8 7.7 8.4 10.0 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Own sto
Slide 16: Wólczanka: 1Q24 executive summary
Wólczanka: 1Q24 executive summary WÓLCZANKA BRAND REVENUES WÓLCZANKA BRAND EFFICIENCY PLN m 25.2 1Q23 1Q24 YoY 21.7 Revenues (PLN/m2 per month) 1,572 1,761 12.0% +16.2% 13.4 11.3 YoY Gross profit margin (%) 54.4% 56.5% 2.1pp. 1.8 2.0 Cost of stores 873 983 12.6% 8.4 10.0 (PLN/m2 per month) Store EBI
Slide 17: Deni Cler: slight YoY revenue falls in 1Q24
Deni Cler: slight YoY revenue falls in 1Q24 DENI CLER BRAND REVENUES (PLN m) 16.7 17.2 14.2 13.5 1.8 13.7 1.4 13.0 12.0 12.4 11.0 1.7 1.4 5.7 1.6 5.5 1.9 1.2 1.3 1.1 4.6 4.5 4.7 4.1 4.4 4.4 3.7 9.5 9.9 7.1 7.9 7.2 6.6 7.7 6.2 6.4 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Own stores Franchise stor
Slide 18: Deni Cler: 1Q24 executive summary
Deni Cler: 1Q24 executive summary DENI CLER BRAND REVENUES DENI CLER BRAND EFFICIENCY PLN m 14.2 1Q23 1Q24 YoY 13.7 1.7 1.9 -3.4% Revenues (PLN/m2 per month) 1,613 1,553 -3.7% 4.6 YoY 4.1 Gross profit margin (%) 61.0% 60.9% -0.1pp. Cost of stores 7.9 7.7 632 650 2.8% (PLN/m2 per month) Store EBIT (P
Slide 19: W.KRUK: continued revenue growth in 1Q24
W.KRUK: continued revenue growth in 1Q24 W.KRUK RETAIL REVENUES (PLN m) 225.8 197.4 17.7 169.3 17.7 12.7 166.1 148.9 152.2 14.5 154.9 141.5 7.7 8.2 11.7 127.8 9.1 8.3 11.8 9.7 10.0 10.4 7.6 11.0 9.3 9.2 8.0 190.5 170.2 133.4 146.5 149.4 134.2 129.8 124.6 110.4 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23
Slide 20: W.KRUK: 1Q24 executive summary
W.KRUK: 1Q24 executive summary W.KRUK RETAIL REVENUES W.KRUK BRAND EFFICIENCY PLN m 154.9 141.5 1Q23 1Q24 YoY 9.7 7.6 11.0 Revenues (PLN/m2 per month) 3,757 3,924 4.4% 9.2 +9.5% YoY Gross profit margin (%) 52.1% 52.5% 0.4pp. 124.6 134.2 Cost of stores 1,027 1,130 10.0% (PLN/m2 per month) Store EBIT
Slide 21: Group results
VRG O Group results
Slide 22: Growing group's revenues and revenues/m2
Growing group’s revenues and revenues/ m2 GROUP REVENUES (PLN m) 341.8 402.3 369.0 • Group revenues in 1Q24 amounted to PLN 278.2m (+4.2% YoY), due to 319.4 335.3 297.1 278.2 267.0 favourable trends in the jewellery segment. 243.8 149.6 194.9 229.3 152.7 167.8 142.0 169.8 156.0 • In 1Q24, revenues o
Slide 23: Growing gross profit on sales
Growing gross profit on sales GROSS PROFIT ON SALES (PLN m) 193.2 201.3 218.7 188.7 • Group gross profit on sales amounted to PLN 149.4m in 1Q24, +8.8% 165.5 161.0 137.3 120.6 149.4 YoY. 123.2 78.7 100.8 88.2 79.5 89.5 In 1Q24 gross profit on sales in apparel segment reached PLN 67.3m, 73.8 82.1 6
Slide 24: From loss to slight profit under IAS17
From loss to slight profit under IAS17 MONTHLY OPERATING COSTS PER M2 (PLN, IAS17) 1,041 1,095 877 950 943 • Group operating costs/m2 (IAS17) reached in 1Q24 PLN 943/m2 per 880 880 920 329 774 310 259 242 month, up 7.1% YoY. 225 225 237 251 203 • Costs of stores at PLN 701/m2 (+9.0% YoY), while HQs
Slide 25: Operating and net profit lower YoY
Operating and net profit lower YoY PLN m, IFRS16 1Q23 1Q24 YoY NET PROFIT (LOSS) BY SEGMENTS Revenues 267,0 278.2 4.2% (PLN m, IFRS16) Gross profit on sales 137.3 149.4 8.8% Gross profit on sales margin 51.4% 53.7% 2.3pp. 70.0 60.0 47.3 47.7 49.9 SG&A costs 132.7 145.5 9.6% 50.0 39.3 EBIT 4.7 2.7 -4
Slide 26: Growing inventory
Growing inventory CHANGE IN INVENTORIES (PLN m) 590.7 553.3 55.3 • Group inventory grew 6.4% YoY. Inventories/ m2 at the end of 1Q24 at PLN 11,276, +5.4% YoY. 19.9 336.4 391.7 • Apparel segment inventories decreased by 9.1% YoY, while inventories/m2 amounted PLN 5,107, down 8.2% YoY, at the end of 1
Slide 27: Seasonal growth in net debt
Seasonal growth in net debt NET DEBT/(NET CASH) VS NET DEBT/EBITDA (PLN m, IAS17 plus reverse factoring) 60.0 0.4 2.0 50.0 0.3 50.8 1.5 40.0 0.2 0.1 1.0 • Group’s net debt under IAS17 at PLN 50.8m at the end of 1Q24, doubling 39.0 -0.3 0.0 30.0 20.0 25.2 25.4 -0.3 0.5 YoY. Financee leases under IFRS
Slide 28: 2024+ outlook
VRG 2024+ outlook
Slide 29: Actions of apparel brands in 2Q24
Actions of apparel brands in 2Q24 Formal Potential for sales of formal clothing between April and August - brands with a wide range of suits, jackets and shirts. Smart Casual Growing casual offer in all the Group's apparel brands - taking advantage of consumer trends. Omnichannel Further improvement
Slide 30: Actions conducted in the apparel segment
Actions conducted in the apparel segment Changes in product strategy Changes in marketing In progress strategy Replacement of large-format Actions towards Work on store Work on store Wólczanka stores store network profitability profitability with shirt boutiques (3Q24) Noticeable effects of changing
Slide 31: New concept for the franchisees
New concept for the franchisees Offer for current and new franchisees of VRG brands • a new multibrand concept for franchisees • consisting of three brands: Vistula, Bytom, Start of the pilot project Wólczanka • tailored to smaller towns that do not have their own stores or monobrand franchise 3Q24
Slide 32: Actions in the jewellery segment in 2024
Actions in the jewellery segment in 2024 Use of sales peaks: Mother's Further development of the Day (2Q24), wedding premium segment, both in collections (2-3Q24) and jewellery and watches. Christmas (4Q24). Further development of Increasing sales on the floorspace and revenues on Hungarian market.
Slide 33: Group's floorspace in 2024
Group’s floorspace in Apparel segment 2024 • ca. 35% of planned annual capex • the need to renovate 2023 2024 target YoY stores after years of stores 350 345 - 5 suspended by the Apparel pandemic capex segment m2 39,470 38,648 -2% stores 163 175 + 12 Jewellery segment m2 13,020 14,398 +11% stores 51
Slide 34: 2024 results to be impacted by changes
2024 results to be impacted by changes Targets for 2024 Opportunities: good reception of new collections of the Group's brands, especially Growing gross apparel ones Revenue growth profit on sales Operating costs improved consumer sentiment in both segments. margin in both control. (higher real wage
Slide 35: Management's dividend recommendation
Management’s dividend recommendation Dividend policy The payout proposal is in the lower range of the dividend policy • The Management Board intends to annually due to: recommend to the General Meeting payment of The Management Board proposes • ongoing changes in the apparel between 20% and 70% of t
Slide 36: Q&A
VRG Q&A
Slide 37: Back-up
VRG Back-up
Slide 38: Vistula: executive summary
Vistula: executive summary Spring/Summer 2024 collection • The Vistula Celebrations collection includes designs for her and for him, intended for celebrating occasions. The collection is divided into two parts- Spring and Summer. The Spring collection focused on the celebration season - classic, tim
Slide 39: Bytom: executive summary
Bytom: executive summary Spring/Summer 2024 collection • The brand's Spring collection campaign is an invitation to celebrate friendship and self-fulfillment through passions. The collection was composed in a smart casual style. Its elements were designed to combine timeless elegance with authentic
Slide 40: Wólczanka: executive summary
Wólczanka: executive summary Spring/Summer 2024 collection • New campaign of the Wólczanka brand for SS24: THE PERFECT SHIRT for special occasions. • Wólczanka shirts are the perfect choice for special occasions. This is the quintessence of classic and elegance. They are made of the highest quality
Slide 41: Deni Cler: executive summary
Deni Cler: executive summary Spring/Summer 2024 collection • The latest Deni Cler collection for the Spring/Summer 2024 season "Giardino dell'Eden" is an optimistic story about the Garden of Eden, i.e. about fashion inspired by the colours and forms of nature. Classic tailoring, both worldwide and a
Slide 42: W.KRUK: executive summary
W.KRUK: executive summary Novelties in collections • In 1Q24, W.KRUK introduced numerous new products in line with the seasonal calendar, including carnival proposals at the beginning of the year and a Valentine's Day collection called Caring in the following month. Women's Day and the Spring premie
Slide 43: Changes in group structure
Changes in group structure VRG Companies included in the consolidated statements for 1Q24 Jewellery segment Apparel segment Other activity W.KRUK S.A. VRG S.A. VG Property sp. z o.o. parent company Real estate Jewellery, watches, accessories Vistula, Wólczanka, Bytom WK 1840 HU Kft. DCG S.A. Jewelle
Slide 44: Continued optimisation of number of stores
Continued optimisation of number of stores Number of stores 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 total 398 391 383 382 368 359 358 350 346 Apparel segment franchise 126 123 119 116 104 92 84 78 75 total 145 144 142 142 137 136 135 132 126 Vistula franchise 62 62 61 61 55 51 47 45 43 total 11
Slide 45: Floorspace YoY
Floorspace YoY M2 floorspace 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 total 40,891 40,385 39,778 39,833 39,333 39,007 39,818 39,470 38,951 Apparel segment franchise 9,425 9,236 9,019 8,798 7,962 7,175 6,582 6,216 6,023 total 18,509 18,404 18,118 18,139 17,733 17,815 18,337 18,386 17,792 Vistula
Slide 46: Own e-stores of five brands
Own e-stores of five brands ON-LINE SALES BY SEGMENTS (PLN m) 17.7 • We have own e-stores for all five retail brands. Our aim is to develop 12.7 9.3 9.1 on-line stores of own brands (monoshops). 8.3 9.7 7.6 7.7 8.2 46.1 • Revenues and costs of on-line stores are allocated directly to the brands. 34.
Slide 47: Higher costs/m2, but lower store costs/m2
Higher costs/m2, but lower store costs/m2 OPERATING COSTS MONTHLY/M2 (PLN, excl. IFRS16) • Differences in SG&A costs/ m2 between segments result from different 1,970 2,021 business models. 1,411 1,395 1,367 1,512 1,510 1,479 1,266 • Jewellery segment is characterised by higher revenues and costs/m2
Slide 48: Reduction in off-line marketing expenses
Reduction in off-line marketing expenses GROUP OFF-LINE MARKETING COSTS BY SEGMENTS (PLN m) • Off-line marketing costs are part of group selling costs. 9.5 10.2 • These encompass recurring advertising spending (catalogues, photoshoots) and nationwide marketing campaigns in editorial, internet 3.4 3.
Slide 49: Historical quarterly results, IFRS16
Historical quarterly results, IFRS16 PLN m 2Q22 2Q23 YoY 3Q22 3Q23 YoY 4Q22 4Q23 YoY 1Q23 1Q24 YoY Revenues 341.8 335,3 -1.9% 319.4 297.1 -7.0% 369.0 402.3 9.0% 267.0 278.2 4.2% Gross profit on sales 193.2 188,7 -2.3% 165.5 161.0 -2.7% 201.3 218.7 8.7% 137.3 149.4 8.8% Gross profit on sales margin 5
Slide 50: Results under IAS17
Results under IAS17 PLN m, IAS17 1Q23 1Q24 YoY Revenues 267.0 278.2 4.2% Gross profit on sales 137.3 149.4 8.8% Gross profit on sales margin 51.4% 53.7% 2.3pp. SG&A costs 137.3 147.9 7.7% EBIT -0.5 0.2 N/M EBIT margin -0.2% 0.1% 0.3pp. Net financial line -0.0 -0.3 N/M Net income -0.7 -0.4 N/M Net ma
Slide 51: Capex supports growth
Capex supports growth CAPEX VS. NET DEBT/EBITDA 15 5 13 -0.3 -0.3 0.3 0.4 4 11 0.0 0.2 -0.1 0.2 11.6 3 0.1 • Capital expenditure in 1Q24 amounted to PLN 11.9m, an 9 10.9 14.4 11.9 increase of 48.2% YoY. 7 2 7.0 8.0 6.1 6.7 5 1 3 5.2 • Capex focused on new stores and modernizations, both in the 0 app
Slide 52: FX risk exposure
FX risk exposure PURCHASES BY CURRENCIES (PLN m) CHF, 25% CHF, 22% USD, 24% USD, 24% • FX risk is sizeable for the capital group, thus it is being hedged since 2Q16. Hedging only relates to the apparel segment. 1Q23 1Q24 • The group is a beneficiary of strengthening of zloty versus foreign currencie
Slide 53: Consistent debt reduction
Consistent debt reduction PLN m 1Q23 4Q23 1Q24 Long-term debt 18.3 2.4 2.3 • Interest bearing indebtedness includes: bank loans, finance leases and reverse factoring (taken over with Bytom S.A. merger). Bank loans 16.6 0.0 0.0 • Bank loans include: overdrafts and investment bank loans. Bank loan col
Slide 54: Shareholder structure
Shareholder structure Other free-float Shareholders' SHAREHOLDER STRUCTURE AS AT 20.05.2024 (SHARE IN EQUITY AND VOTES) 21.84% agreement 31.04% Number of % share shares/votes 1. Shareholders' agreement 72,766,027 31.04% 2. PZU OFE and DFE 45,589,125 19.44% Jerzy Mazgaj 13.71% 3. NN OFE 35,750,000 13
Slide 55: Glossary
Glossary Idea Definition Apparel segment Revenues from brands: Vistula, Wólczanka, Bytom, Deni Cler and wholesale segment, B2B and processing (until VI.2023). Jewellery segment Retail revenues of W.KRUK brand and other revenues (including B2B). Casual Revenues including the following assortment: jac
Slide 56: Thank you
Thank you VRG S.A. Pilotów 10 St., 31-462 Cracow Investor Relations e-mail: relacjeinwestorskie@vrg.pl tel. +48 12 656 18 32 faks + 48 12 656 50 98 Press office VRG S.A. e-mail: sekretariat@vrg.pl e-mail: biuroprasowe@vrg.pl