Douglas Ag · XETR:DOU
Douglas — Debt Investor Presentation (December 2021)
45 slides from Douglas's debt investor presentation, Dec 21, 2021
Slide 1: Operational & Financial Results
OPERATIONAL & FINANCIAL RESULTS Düsseldorf, 21 December 2021
Slide 2: 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 3: Today's Speakers
TODAY’S SPEAKERS Group CFO Group CEO 3
Slide 4: Continuous growth in e-com while brick & mortar recovered
CONTINUOUS GROWTH IN E-COM WHILE BRICK & MORTAR RECOVERED TOTAL LFL SALES SIGNIFICANTLY ABOVE PRE-COVID-19 LEVEL Net sales growth of Again, double-digit Further growth Adjusted EBITDA Execution of 7.3% lfl vs. PY; growth in E-Com (+3.7% lfl vs. PY) in increased by 25% Store Optimisation Net sales gr
Slide 5: Net Sales Development Q4 2020/21
NET SALES DEVELOPMENT Q4 2020/21 STRONG GROWTH IN E-COM CONTINUES In m€ GROUP TOTAL GROUP E-COMMERCE GROUP BRICK & MORTAR 727 752 +3.5% lfl 542 537 lfl 211 181 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Positive sales development due to ongoing strong E-Commerce: Brick & Morta
Slide 6: Adjusted EBITDA Development Q4 2020/21
ADJUSTED EBITDA DEVELOPMENT Q4 2020/21 In m€ GROUP TOTAL Strict cost discipline in personnel and operating expenses resulted in higher adjusted EBITDA and higher margin 29 23 The Store Optimisation Programme is bearing fruits, leading to lower rental and personnel expenses while 28,9 improving margi
Slide 7: Long-Term E-Commerce Growth
LONG-TERM E-COMMERCE GROWTH SALES DOUBLED OVER THE PAST TWO YEARS TO ~€1.2BN NET SALES (In m€) Growth continues to accelerate with net sales of ~€1.2bn 817 FY 2020/21 CAGR vs. 2019/20 585 423 383 324 261 180 145 106 50 69 19 23 32 39 2 4 6 9 13 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 0
Slide 8: Douglas expands strong market position in e-com across core countries
DOUGLAS EXPANDS STRONG MARKET POSITION IN E-COM ACROSS CORE COUNTRIES (FY 2020/2021) Thanks to the marketplace DOUGLAS continues to win market share in Germany on a very high level DOUGLAS France expanded 2020 2021 E-Commerce market leadership E-Commerce remains key growth driver Germany France Ital
Slide 9: E-Commerce: Strong Development of KPIs
E-COMMERCE: STRONG DEVELOPMENT OF KPIS EUROPE’S NO.1 BEAUTY PLATFORM Q4 2020/21 GROUP GERMANY +16.7% 0.6%pts +4.3% E-Com net sales Conversion rate Average basket (incl. VAT)* +4.6%pts +6.0%pts E-Com sales share Mobile sales share App sales share New customers in E-Com E-Com sales share Number of vis
Slide 10: Stable Full Year Performance Despite Lockdowns
STABLE FULL YEAR PERFORMANCE DESPITE LOCKDOWNS GROUP LFL SALES AT PRIOR YEAR'S LEVEL In m€ GROUP NET SALES -3.5% Other 3,233 3,120 lfl 31 ▪ Most of the financial year 2020/2021 was affected 22 817 by significant hard lockdowns E-Commerce 1,199 +47% ▪ In 70% of all weeks, only less than 70% of the st
Slide 11: #FORWARDBEAUTY.DIGITALFIRST Strategy Execution Update
#FORWARDBEAUTY.DIGITALFIRST STRATEGY EXECUTION UPDATE BEAUTY PLATFORM Brand positioning E-COMMERCE ONLINE SHOP MARKETPLACE 11 1 ASSORTMENT 4 CURATION / CRM Choice & innovation Inspiration & personalisation 2 SUPPLY CHAIN 3 TECHNOLOGY Customer Operational excellence Data-driven culture Partner relati
Slide 12: Connecting E-Commerce and Stores
CONNECTING E-COMMERCE AND STORES CREATING AN INTEGRATED EXPERIENCE OF E -COMMERCE & STORES New offerings for an enhanced digital experience in the stores: ▪ Customer-focused order & delivery options like Ship from Store, Click & Collect and Reserve & Collect ▪ Beauty Mirrors with Augmented Reality ▪
Slide 13: Q4 Assortment: Make Up
Q4 ASSORTMENT 1 MAKE UP • Kylie Jenner’s make-up brand Kylie • Nailcare, especially professional Cosmetics launched exclusively in all nail care systems for at-home DOUGLAS markets and in 700 stores usage are booming • Following successful online pre-launch in • Top selling brands in November July 2
Slide 14: Q4 Assortment: Skincare + Haircare
Q4 ASSORTMENT 1 SKINCARE + HAIRCARE Paula’s Choice – Beauty begins with truth Launched in Germany and Switzerland online + 10 stores, rollout in 150 stores in Jan 2022 • Launch of dermacosmetics brands in online marketplace: Aesop – Skin, Hair, Body & Home − La Roche Posay Germany online launch; int
Slide 15: Beauty Card
BEAUTY CARD 4 EUROPE’S LARGEST LOYALTY PROGRAMME WITH GROWING CUSTOMER BASE UNMATCHABLE COMPETITIVE ADVANTAGE +8.6% Growth of card holders across Europe: 47.8 ▪ 8.6% in the past 12 months across all channels 44.0 ▪ Every 3rd household in core European countries owns a Beauty Card ▪ Every E-Com custo
Slide 16: Marketplace: Important Element of Our Strategy
MARKETPLACE: IMPORTANT ELEMENT OF OUR STRATEGY 4 GROWING NUMBERS OF PARTNERS & SKUS NUMBER OF MARKETPLACE NUMBER OF MARKETPLACE PARTNERS IN GERMANY SKUS IN GERMANY 167 120k 68k 50 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Marketplace live 16
Slide 17: Curation/CRM: Douglas Live
CURATION/CRM: DOUGLAS L I V E 4 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 18: New Online Shops: Belgium and Slovenia
NEW ONLINE SHOPS: BELGIUM AND SLOVENIA 4 Dedicated Belgian shop is online (www.douglas.be) In 2022, French language will be added 18
Slide 19: Year End Highlights
YEAR END HIGHLIGHTS 360º campaign with new “Get Similar toolbox to last year 360º campaign with the Beauty delivered” campaign. with new beauty visual. addition of a dedicated digital campaign based on “Let’s do beautiful”. 19
Slide 20: Closer Look Q4 2020/21 Financials
CLOSER LOOK O4 2020/21 FINANCIALS
Slide 21: Net Sales Development by Segment
NET SALES DEVELOPMENT BY SEGMENT GROUP Q4 2020/21 Total, in m€ GERMANY FRANCE 290 287 -1.0% GROUP 142 158 +10.7% 727 752 +3.5% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 210 210 +0.2% 85 98 +14.7% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21
Slide 22: Net Sales Development by Segment: E-Commerce
NET SALES DEVELOPMENT BY SEGMENT E-COMMERCE Q4 2020/21 E-Commerce, in m€ GERMANY FRANCE 115 122 +5.6% GROUP 27 211 17 +54.7% 181 +16.7% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 44 35 +24.5% 19 13 +43.7% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4
Slide 23: Net Sales Development by Segment: Brick & Mortar
NET SALES DEVELOPMENT BY SEGMENT BRICK & MORTAR Q4 2020/21 Brick & Mortar, in m€ GERMANY FRANCE 173 163 -5.3% 124 129 +3.9% GROUP 542 537 -1.0% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 172 164 -5.1% 73 81 +10.9% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 20
Slide 24: Adjusted EBITDA Development by Segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT Q4 2020/21 Adjusted EBITDA1, in m€ GROUP GERMANY2 FRANCE 22 1 14 +63.6% 29 N/M 23 +25.0% -16 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 11 10 11 Adjusted +6.0% EBITDA Margin N/M Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 -2
Slide 25: Key Financials at a Glance
KEY FINANCIALS AT A GLANCE Q4 2020/21 In m€ A D J U S T E D 1/ R E P O R T E D E B I T D A NET INCOME Reported EBITDA: 59 sustained gross profit margin and reduction in personnel and other operating expenses (esp. rents) +25.0% -58.1% 29 offset higher distribution costs in E- 23 Com, reversal of adj
Slide 26: Deviation Analysis Q4 2020/21
DEVIATION ANALYSIS Q4 2020/21 In m€ Higher net sales Lower operating and Mainly adjusted Previous year negatively higher E-Com share, sell- personnel expenses for release of provisions affected by catch-up down of inventory in SOP due to reduction in rents for restructuring costs investments in E-Co
Slide 27: Free Cash Flow
FREE CASH FLOW IMPACTED BY REQUIRED CAPEX AND CASH EFFECT OF ADJUSTMENTS In m€ FREE CASH FLOW BRIDGE Q4 2020/21 ADJUSTED FCF DEVELOPMENT 21 11 4 49 -5 Q4 2018/19 Q4 2019/20 Q4 2020/21 -38 30 41 0 41 29 -24 11 1 2 Adj. EBITDA Capex Working Capital Taxes Other Adj. Free EBITDA Free Cash Flow M&A Free
Slide 28: Sufficient Liquidity Headroom
SUFFICIENT LIQUIDITY HEADROOM ONGOING COST AND CASH DISCIPLINE In m€ CASH BALANCE NET WORKING CAPITAL 398 0 (RCF) 256 165 (RCF) -25% +164% 240 244 91 184 30 Sep 20 30 Sep 21 30 Sep 20 30 Sep 21 › Improved liquidity headroom thanks to successful › Strong limit control and introduction of RELEX refina
Slide 29: Evolution of Capital Structure and Key Leverage Metrics
EVOLUTION OF CAPITAL STRUCTURE AND KEY LEVERAGE METRICS CASH AND DEBT STRUCTURE AS OF 30 SEPTEMBER 2021 TOTAL NET LEVERAGE m€ x Adj. x Mgt. Adj. Maturity Pricing EBITDA EBITDA³ 8.9x 7.6x 6.3x 5.9x Cash and Equivalents 240 RCF (€170m Volume) 0 Jan 26 E+4.75% E+5.5% Mgmt. adj. Term Loan B (B3/B-/B) 60
Slide 30: SOP Implementation Ongoing
SOP IMPLEMENTATION ONGOING WITH MEASURABLE AND SUSTAINABLE IMPACT STATUS 30.09.2021 STORE CLOSURES / LEASE FTE REDUCTIONS RENT NEGOTIATIONS KEEP TERMINATIONS (CURRENT EST.) OPEN STORES (# OF STORES) Contracts terminated Store in stores to be closed 48% re-negotiation Stores closed 73% 47% completed
Slide 31: Summary Q4
SUMMARY Q4 Like-for-like sales significantly above pre-Covid-19 level Double-digit growth in E-Commerce while Brick & Mortar recovered Douglas strategy #FORWARDBEAUTY.DigitalFirst is in full execution: › New offerings for an enhanced digital experience in the stores › Expansion of assortment with ma
Slide 32: Appendix
Slide 33: Net Sales Development by Segment FY 2020/21
NET SALES DEVELOPMENT BY SEGMENT GROUP FY 2020/21 GERMANY FRANCE Total, in m€ 1,270 1,149 -9.5% GROUP 688 699 +1.6% 3,233 3,120 -3.5% FY 2019/20 FY 2020/21 FY 2019/20 FY 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 930 911 -2.1% 345 361 +4.6% FY 2019/20 FY 2020/21 FY 2019/20 FY 2020/21 FY 2019/20 FY
Slide 34: Net Sales Development by Segment: E-Commerce FY 2020/21
NET SALES DEVELOPMENT BY SEGMENT E-COMMERCE FY 2020/21 GERMANY FRANCE Total E-Com, in m€ 672 504 +33.5% GROUP 1,199 182 97 +88.1% +46.8% 817 FY 2019/20 FY2020/21 FY 2019/20 FY 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 250 159 +57.0% +65.8% 94 57 FY 2019/20 FY 2020/21 FY 2019/20 FY 2020/21 FY 2019/
Slide 35: Net Sales Development by Segment: Brick & Mortar FY 2020/21
NET SALES DEVELOPMENT BY SEGMENT BRICK & MORTAR FY 2020/21 Total Brick & Mortar, in m€ GERMANY FRANCE 758 GROUP -38.2% 581 509 469 -12.5% 2,385 1,899 -20.4% FY 2019/20 FY 2020/21 FY 2019/20 FY 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 764 655 -14.2% 282 267 -5.1% FY 2019/20 FY 2020/21 FY 2019/20 F
Slide 36: Adjusted EBITDA Development by Segment FY 2020/21
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT FY 2020/21 Adjusted EBITDA1, in m€ GERMANY2 FRANCE 107 109 GROUP +2.0% 275 64 20 -69.6% -19.1% 222 2019/20 2020/21 2019/20 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 58 45 53 Adjusted 41 -29.4% +16.1% EBITDA Margin 2019/20 2020/21 2019/20 2020/21 2019/20 2020/
Slide 37: Key Financials at a Glance FY 2020/21
KEY FINANCIALS AT A GLANCE FY 2020/21 In m€ A D J U S T E D 1/ R E P O R T E D E B I T D A NET INCOME 275 FY 2019/20 FY 2020/21 Reported EBITDA: 222 -19.1% lower gross profit due to higher E- 176 COM share, clearance sales in closure stores and higher distribution costs Margins 19 Net income: -342 -
Slide 38: Deviation Analysis FY 2020/21
DEVIATION ANALYSIS FY 2020/21 In m€ Lower overall margin Driven by sales and gross Mainly adjusted Decrease in FCF due to market margin decline, idle costs for COVID-19, SOP due to reduced competition as well as during lockdowns, higher effects, consulting and reported EBITDA and channel shift and l
Slide 39: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA Consulting fees: EBITDA ADJUSTMENTS Mainly related to refinancing; reclassification of financing costs to the financial result (m€) Q4 2019/20 Q4 2020/21 FY 2019/20 FY 2020/21 PPA: Former acquisitions Reported EBITDA -6.6 58.6 176.1 19.3 COVID-19: Consulting fees 7.4 -14.1 19.5
Slide 40: Reported EBITDA
REPORTED EBITDA REPORTED EBITDA (m€) Q4 2019/20 Q4 2020/21 FY 2019/20 FY 2020/21 Germany1 -12.2 20.1 19.9 -95.1 France 11.4 15.9 96.4 77.1 South-Western Europe -17.2 13.3 16.5 -5.8 Eastern Europe 10.4 10.6 42.3 44.4 Group -6.6 58.6 176.1 19.3 40 1 Incl. consolidation effects
Slide 41: Deep Dive into LFL Net Sales Growth
DEEP DIVE INTO LFL NET SALES GROWTH QUARTERLY DEVELOPMENT LFL NET SALES GROWTH DEVELOPMENT (m€) Q 3 2019/20 Q4 2019/20 Q1 2020/21 Q2 2020/21 Q3 2020/21 Q4 2020/21 FY 2021 Germany -19.0% 2.3% -3.3% -22.1% -3.5% 2.6% -5.1% France -34.9% -6.7% -6.5% -7.6% 28.7% 10.6% 2.6% South-Western Europe -34.9% -6
Slide 42: Free Cash Flow
FREE CASH FLOW IMPACTED BY REQUIRED CAPEX AND CASH EFFECT OF ADJUSTMENTS In m€ ADJUSTED FCF DEVELOPMENT 238 197 FREE CASH FLOW BRIDGE FY 2020/21 160 222.4 FY 2018/19 FY 2019/20 FY 2020/21 64.7 40.0 197.1 -37.7 -92.3 0.0 -203.1 -6.0 -6.0 2 Adj. EBITDA1 Capex Working Taxes Others Adj. Free EBITDA Free
Slide 43: Cash Flow Statement
CASH FLOW STATEMENT Cash flow from CASH FLOW STATEMENT operating activities impacted by COVID-19 induced store closures (m€) Q4 2019/20 Q4 2020/21 FY 2019/20 FY 2020/21 Cash flow from Net Cash Flow from Operating activities 5.6 58.9 245.0 75.7 investing activities reduced due to liquidity saving Net
Slide 44: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL Net Working Capital continues to be a key focus; efficient 286 management supported by AI- 244 252 based software RELEX 188 184 NWC as % of Despite challenges due to LTM Net Sales COVID-19 and seasonal build- up of inventory in preparation for important Christ
Slide 45: Premium Store Network Footprint
PREMIUM STORE NETWORK FOOTPRINT ACROSS EUROPE NUMBER OF STORES Limited store openings 2,372 Decrease in number of stores driven by SOP 140 2,078 -7% Portfolio realignment across Europe will 136 result in further reduction in number of stores (m€) FY 2020/21 2,232 1,942 Store openings 19 Store closur