Rugvista Group Ab · OMXSTO:RUG
Rugvista Group Ab — Investor Day (2023)
98 slides from Rugvista Group Ab's investor day presentation, 2023
Slide 1: Today's agenda
Today’s agenda Start time Topic Presenter 10:05 Investment case & Strategy intro Michael 10:30 Assortment & Sourcing Carin 10:55 Brand building strategy Ulrika 11:10 New e-commerce platform Peter 11:25 Break - 11:30 Financial targets Joakim 11:45 Sustainability strategy Patricia 12:00 Questions & An
Slide 2: Investment case & Strategy
2023 Capital Markets Day Investment case & Strategy RugVis ta G roup AB ( publ)
Slide 3: Michael Lindskog, CEO
CEO since Oct-2019 Selected previous experience: ▪ Zalando (2012-2016) ▪ MD & Co-founder MOVMT (Factory-2-Consumer platform) ▪ Head of Nordics ▪ McKinsey & Company (2007-2011) Education: ▪ MBA, Stockholm School of Economics ▪ Master of Science in Marketing, Western Kentucky University Michael Lindsk
Slide 4: Today's topics
Today’s topics The Basics Why invest?
Slide 5: Today's topics: The Basics
Today’s topics The Basics Why invest?
Slide 6: What we do
The basics What we do “We sell in-house designed rugs through our own web-shops.” 6
Slide 7: Key facts & History
The Basics Key facts & History Key facts Company history 2005 Founded as Carpetvista Headquarter in Malmö , Sweden 2008 ArtGlassVista launched (sold 2020) 2 warehouse locations in Malmö 2011 Rugvista brand launched to sell Design rugs Average monthly web-shop visits >2 million 2014 “DI Gasell” award
Slide 8: Purpose, vision and values
The Basics Purpose We help people to a home they love Business vision People vision Sustainability vision To be the center of gravity for the To attract, motivate, and retain To lead the rug industry towards a European rug industry extraordinary people socially and environmentally sustainable future
Slide 9: Today's topics: Why invest?
Today’s topics The Basics Why invest?
Slide 10: Why invest in Rugvista?
Why invest in Rugvista? Leading European digitally native Direct-2-Consumer rug expert 1 Large attractive market transitioning online 2 Ambition & positioned to own European online rug category Fragmented Large market Perfect online Optimized D2C Tailored operating competition & Customer centricity
Slide 11: Large market transitioning online
Attractive market & vertical 1 Large market transitioning online Huge vertical transitioning online… …online migration driven by mega trends & helped by Covid-19 European home furnishing 2019 market size1 European rug & carpet market1, SEK billion (online share & CAGR) CAGR: 11% Home furnishing 236
Slide 12: Covid-19 accelerated online migration
Attractive market & vertical Covid-19 accelerated online migration, 1 but vertical still trailing more mature categories Pre- Post- Covid Covid 0 20 40 60 80 100 Online penetration percent 12
Slide 13: >225 million digitally native Europeans by 2030
Attractive market & vertical >225 million digitally native Europeans expected 1 to live in their own homes by 2030 25+ year old Europeans from generation Millennials and later Million +77 (+51%) 227 +38 189 +39 150 2020 2025 2030 YEAR Source: European population statistics 13
Slide 14: Rugs perfect online product
Attractive market & vertical 1 Rugs “perfect” online product CONSUMER TOYS AND APPAREL ELECTRONICS GAMES BEAUTY RUGS RUGVISTA FACTS HIGH AOV ▪ SEK ~3,600 average order value ▪ Inventory not destroyed when on shelf LONG PRODUCT LIFE ▪ Multiple best-selling designs introduced CYCLES 5+ years ago LIMIT
Slide 15: Fragmented competitive landscape with no strong brands
Attractive market & vertical 1 Fragmented competitive landscape with no strong brands Fragmented competitive landscape No significant product brands within the rug category Traditional resellers: ▪ Small offline privately owned stores ▪ Focus on traditional rugs or local furniture stores offering li
Slide 16: Obsessed with delivering customer value
Positioned to ow n Europe Obsessed with delivering customer value 2 proven by our KPIs Outstanding NPS score compared to world-leading brands1 4.8 average score on TrustPilot based on ~90K reviews “Really happy with my rug which actually it is better than I expected and It has arrived before the sch
Slide 17: Optimized Direct-to-Consumer business model
Positioned to ow n Europe Optimized Direct-to-Consumer 2 business model provides distinct advantages ▪ In-house product ▪ In-house software ▪ Marketing communication development, design, and development and technology adapted to local preferences direct sourcing infrastructure ▪ In-house customer se
Slide 18: Clear strategy to drive future profitable growth
Clear strategy & priorities 3 Clear strategy to drive future profitable growth Showcase own Win the key Capture selected Be world-class assortment European markets add-on opportunities ✓ Lead with our in-house ✓ Tailor and localize End-2- ✓ Develop commercial and ✓ Optimize and scale designed collec
Slide 19: Profitable growth combined with strong cash generation
Strong financial position & performance 4 Profitable growth combined with strong cash generation 5-yr Net Revenue CAGR of 16% 5-yr EBIT CAGR of 37% Strong financial position EBIT-margin (%) Net cash (SEK million) +37% 190 705 20 200 +16% 128 639 150 542 104 110 112 116 15 100 407 75 353 10 50 218 47
Slide 20: Leading European digitally native Direct-2-Consumer rug expert
Summary Leading European digitally native Direct-2-Consumer rug expert 1 Large attractive market transitioning online 2 Ambition & positioned to own European online rug category 3 Clear strategy to drive future profitable growth 4 Strong financial position and track record of profitable growth 20
Slide 21: Rugvista Group address
Ringugnsgatan 11, SE-216 16 Limhamn, Sweden www.rugvistagroup.com
Slide 22: Introduction to the world of rugs
2023 Capital Markets Day Introduction to the world of rugs RugVis ta G roup AB ( publ)
Slide 23: Carin Terins, CDPO
CDPO since Jan-2018 Selected previous experience: ▪ Flash (2003-2017) Design- and Purchasing Director ▪ Flash (1998-2003) Design Manager and Buyer ▪ Tenson Designer Education: ▪ University of Borås, Product Development, Design ▪ IHM Business School, Digital Marketing Carin Terins 23
Slide 24: Today's topics
Today’s topics Assortment overview Sourcing and production strategy Own designs and collection strategy Category extensions
Slide 25: Rugvista's rug assortment
Assortment overview Introduction to the world of rugs Rugvista’s rug assortment Design rugs Traditional rugs Machine made Hand made Key characteristics Key characteristics Key characteristics ▪ Mass produced quantities ▪ Smaller mass produced ▪ Each item one-of-a-kind ▪ Fast automated production qua
Slide 26: Deep sourcing expertise and cooperations with leading producers
Sourcing Deep sourcing expertise and cooperations with leading producers KEY SUCCESS FACTORS Hand-knotted ▪ Longstanding relationships with suppliers traditional rugs Being able to select ▪ Economies of scale right quality ▪ Continuous external auditing of all suppliers rugs at the right price Hand
Slide 27: Sourcing of unique traditional rugs
Sourcing Sourcing of unique traditional rugs About 22 000 unique rugs in stock Iran, Afghanistan, Turkey, Morocco, India 27
Slide 28: Selection of categories of unique rugs
Sourcing Selection of categories of unique rugs 28
Slide 29: Cherry picking unique carpets
Sourcing "Cherry picking" unique carpets 29
Slide 30: Production unit for handloom weaving
Sourcing Production unit for handloom weaving Opening of yarn Spinning Handloom weaving Making yarn coils Coil and shuttle Ready for washing 30
Slide 31: Production unit of handloom finishing
Sourcing Production unit of handloom finishing Carpet washing Sun drying Binding edges Knotting of fringes Correcting Shaping Shaving Finishing 31
Slide 32: Machinemade production
Sourcing Machinemade production The yarns way into the machine Powerloom machine Readymade weave Repairing Yarn bobbins Overlocking edges Finishing and packing 32
Slide 33: Design- and product development
Design Design- and product development TREND- AND COLOR ANALYSIS • Fairs and Trend seminars inspiration • Create moodboards • Social Media - what is going on • RV Design competition • Co-operation with designers IN-HOUSE DATA EXPERTISE • Provides insights on customer preferences and trends LISTEN TO
Slide 34: Design strategy
Design Design strategy • In-house designs and exclusivity on designs from suppliers and co-labs, a key factor for the future • Building an interesting assortment and collections by producing own designs or exclusive design rugs in the right quality and price, will enable best-in class value for mone
Slide 35: Collections
Design and collections Collections TIMELESS SCANDINAVIAN • A name for a theme, style or other inspiration from which a set of designs have been developed and put together Benefits • Better structure for building our assortment and NEUTRAL COLORS AND more inspiring and user friendly to our SHAPES. SI
Slide 36: Sub-brands
Sourcing and Design Sub-brands • Essentials (good) • Core (better) • Premium (best) Benefits • Our collections will contain a mix of the sub-brands • Helps us to structure our assortment in regard to quality, pricing and purchasing Essentials offers a unique range of affordable rugs for the trendy h
Slide 37: Rugvista Essentials an affordable story
Sub-brand Rugvista Essentials an affordable story Essentials • Successfully launched 2022 • First home • Limited budget • Early adpoters of trends • Digital natives • No car (home delivery important) • A growing target group • Updated assortment for A/W 2023 37
Slide 38: Base Moodboard 2023-24
Design and Collections Base Moodboard 2023-24 • Nature is the source for inspiration • Focus on the warm shades from Brown to Beige and Ivory • The nature inspires to tactile surfaces in both textiles, ceramics and furnitures • Rattan, wood, jute, leather and wool are materials that brings nature in
Slide 39: Natural Structure Collection
Design and Collections Natural Structure Collection • Structures is the trend • Different surfaces meets in the same rug • Natural color shades • Timeless look • Mix with wooden details and ceramics • All sub-categories included 39
Slide 40: Bold and Brave Collection
Design and Collections Bold and Brave Collection • Eye catching is the trend • Bold, brave and colorful • Blue, Green, Orange and Pink • Round and uneven shapes • Paint the walls and the ceiling in the same brave color • Go outside the box, express yourself! 40
Slide 41: Kids Collection
Design and Collections Kids Collection • Co-ordinated warm and dusty colors • Playful and interactive designs • Uneven shapes • Mix 2-3 designs together • Focus on lower priced sub-categories 41
Slide 42: Bathroom rugs
New Product Category Bathroom rugs • New product category • Successfully launched in March this year • Two major looks; Colorful and Classics • Tufted cotton rugs with or without latex anti-slip • Washable • OekoTex certified 42
Slide 43: Rugvista Group address
Ringugnsgatan 11, SE-216 16 Limhamn, Sweden www.rugvistagroup.com
Slide 44: Branding
2023 Capital Markets Day Branding RugVis ta G roup AB ( publ)
Slide 45: Ulrika Klinkert, CMO
CMO since Nov-2017 Selected previous experience: ▪ Betsson (2014-2017), Head of Markets ▪ Kjell & Company, (2010-2013), CMO ▪ Cloetta, (2001-2010), Marketing Manager, Brand Manager, KAM Education: ▪ M.Sc.Eng. LTH and KIT (Karlsruhe Institute of Technology) ▪ Thesis, ANU (Australian National Universi
Slide 46: Today's topics
Today’s topics Why branding Rugvista Brand Position Next steps
Slide 47: Today's topics
Today’s topics Why branding Rugvista Brand Position Next steps
Slide 48: Why branding?
Fuel for grow th Why branding? Reach = awareness = consideration list Brand awareness = trust = more efficient marketing mix Strong brand = less price sensitive = higher margin 48
Slide 49: Today's topics
Today’s topics Why branding Rugvista Brand Position Next steps
Slide 50: Rugvista's customer target groups
RusV: ite Gp Rugvistas Kundmalgrupper Inom segmenten Privaipersoner |82C) och Féretagskunder(B2B) arbetar vi utifrin identiierade kundmdi- [grupper. Fer 828 br folus primar! pl ve kundgrupper:Inredningearkitakter, hotelkedjor tamt boutique hotell. Fr B2C gjorde vi under 2022 en ny kundsegmenteringss
Slide 51: Rugvista brand strategy
Rugvista brand strategy Who are we? Customer benefits What do we want people to think about us … at point of contact Brand Brand • Rugvista.com / pop up store • Convenient - practical & save time experience • Experts - inspired, get support position • Media & communication • Trustworthy - confident
Slide 52: Branding in all touch points – distinctive & unique
Branding in all touch points – distinctive & unique 52
Slide 53: Branding in all touch points – relevant & likable
Branding in all touch points – relevant & likable 53
Slide 54: Branding in all touch points – first steps Q1&Q2
Branding in all touch points – first steps Q1&Q2 54
Slide 55: Today's topics
Today’s topics Why branding Rugvista Brand Position Next steps
Slide 56: Next steps - to be a liked and well-known brand
Fuel for grow th Next steps - to be a liked and well-known brand Reach new target groups via new channels -> New opportunities for growth Build broad brand awareness in key markets -> Increased direct and organic traffic -> More cost efficient media mix -> Trigger both new and current customers Focu
Slide 57: Rugvista Group address
Ringugnsgatan 11, SE-216 16 Limhamn, Sweden www.rugvistagroup.com
Slide 58: New Rugvista e-com platform
2023 Capital Markets Day New Rugvista e-com platform RugVis ta G roup AB ( publ)
Slide 59: Peter Rosenfors, CTO
CTO at Rugvista since Dec-2021 Selected previous experience: ▪ CDON (2020-2021) ▪ Axis Communications (2019-2020) ▪ Rillion (2017-2019) Education: ▪ M.Sc. Civ. Eng., Luleå Technical University Peter Rosenfors 59
Slide 60: Today's topics
Today’s topics History of previous tech solution Overview of new e-com platform Next steps
Slide 61: Strategic priorities to drive growth
Background Strategic priorities to drive growth 61
Slide 62: Current status
Current status Finalizing remaining core features while releasing in additional domains Existing version of the new New Checkout experience 0.8 platform New My Pages experience Number of markets live on Croatia, Austria, Switzerland, 5 the new platform today the UK, and Sweden Total number of market
Slide 63: New platform is a complete technology transition
History New platform is a complete technology transition Previous platform New platform UI UI Business Data Logic access layer ▪ Hard to maintain ▪ Better maintainability ▪ Difficult to add feature ▪ Better scalability ▪ Single point of failure ▪ Independent deployment 63
Slide 64: New e-commerce platform system components
The new platform New e-commerce platform comprised of 3 major system components Backend solution Content management 64
Slide 65: The backend solution is the data foundation
The new platform The backend solution is the data foundation Inhouse solution • Flexible and tailor made • Use our knowledge Platform foundation • Enhanced product model • Serves onsite experience Localization enabler • Product content • Price, discount, campaigns, more 65
Slide 66: Content Management
The new platform Content Management System and solution Make-a-difference Tech foundation Localization enabler functionality ▪ Headless 3rd party solution ▪ Different online ▪ Build an enrich the e-com merchandising between shop (layout, text/image/video ▪ Separated from frontend countries content)
Slide 67: Frontend – Online Shop
The new platform Frontend – Online Shop ▪ Built our frontend ▪ Responsive design for all ▪ Search engine optimized ourselves devices site structure ▪ Own our User ▪ Mobile first approach ▪ Machine- and human Experience content value available ▪ Site speed important ▪ Ability to present our ▪ Support
Slide 68: The new platform
The new platform Fdeugsby Shepe Size and Thickness Color Room Style Type Shape Rectangular rugs Runner rugs Round rugs Square rugs (Odd shape rugs Kea - Yellow / Orange 200 x 300 cm 234€ Geometric rugs 209 ee Ary atcotor x Filter lear Sorby > See > Shape > Thickness > ce > Discount > Color > She > a
Slide 69: New platform basis for enhanced shopping experience
Next steps New platform basis for enhanced shopping experience New checkout New my pages Enhanced onsite algorithms experience experience (personalization) Create content! 69
Slide 70: Rugvista Group address
Ringugnsgatan 11, SE-216 16 Limhamn, Sweden www.rugvistagroup.com
Slide 71: Financial targets
2023 Capital Markets Day Financial targets RugVis ta G roup AB ( publ)
Slide 72: Joakim Tuvner, CFO
CFO since Jan-2023 Selected previous experience: ▪ VP Finance Oatly EMEA ▪ CFO Bona ▪ CFO KLS ▪ CFO & dep CEO Pågen ▪ Head of Finance Oriflame, Latin America & Asia Education: ▪ BSc. In Business administration, Lund University Joakim Tuvner 72
Slide 73: Topics covered today
Topics covered today Our financial targets Our financial development
Slide 74: Our financial targets
Our financial targets Medium- to long-term targets Organic net revenue EBIT-margin of Dividend as % of net growth of approx. at least profits, up to 20% 15% 50% 74
Slide 75: 20% Net revenue growth
1 20% Net revenue growth @IPO 3 Year CAGR 20% 1) After two more years 5 Year CAGR 16% 1) SEK million SEK million ✓ Pandemic short-term boost of interior design and home improvement ✓ Pandemic long-term boost of migration from off- to online strengthened our growth case ✓ Current setting in the marke
Slide 76: Foundation for growth
1 Foundation for growth Organic net revenue growth of approx. 20% 76
Slide 77: EBIT-margin of at least 15%
2 EBIT-margin of at least 15% @IPO EBIT-margin 2021 delivered, 2022 macro-economic slowdown 2022 share of net revenue Variable costs 70.1%: ▪ Goods for resale ▪ Marketing Fixed costs 18.1%: ▪ Other external expenses (excl marketing) ▪ Personnel expenses ▪ Amortization and depreciation ▪ Other operat
Slide 78: Dividend of up to 50% of net profit
3 Dividend of up to 50% of net profit 2018-2022 Inventory & cash conversion Dividend track record as a listed company For 2021 profits: ▪ SEK 2.50 per share ▪ 52.0 SEK million ▪ 52.0% of Net profit for 2021 For 2022 profits the Board has proposed: ▪ SEK 1.50 per share ▪ 31.2 SEK million ▪ 53.0% of N
Slide 79: Our financial targets
Our financial targets Medium- to long term targets Organic net revenue EBIT-margin of Dividend as % of net growth of approx. at least profits, up to 20% 15% 50% 79
Slide 80: Sustainability in focus
2023 Capital Markets Day Sustainability in focus RugVis ta G roup AB ( publ)
Slide 81: Patricia Rajkovic Widgren, Chief Organization & Sustainability Officer
Chief Organization & Sustainability Officer since Jan-2020 Selected previous experience: ▪ Hangzhou Century Co., Ltd. (2011-2015), CEO Century Europe ▪ Bergendahls (2008-2011), Retail Director Bergendahl Home Deco ▪ Biltema Sweden (2005-2008) CEO & Country Manager Education: ▪ Marketing economist DI
Slide 82: Sustainability topics covered today
Sustainability topics covered today Vision and strategy Long-term goals and achievements Going forward
Slide 83: The vision
The vision To lead the rug industry towards a socially and environmentally sustainable future
Slide 84: LEAD.CHANGE – our 2030 sustainability strategy
The strategy LEAD.CHANGE – our 2030 sustainability strategy CHANGE LEAVERS CHANGE LEVERS FOCUS AREAS FOCUS AREAS PLANET LEAD.CHANGE Develop Develop a circular a circular business model business model & reduce & our environmental impact Reduce our environmental impact • is divided into three focus ar
Slide 85: Our 2030 goals are crucial catalysts
The long-term goals Our 2030 goals are crucial catalysts in achieving the sustainability vision Selected achievements Long-term goals Rugvista's climate goals are approved by SBTi: • We aim to reduce GHG emissions by 46% in scope 1 and 2 by 2030 (base year: 2019). • Committed to measuring and reduci
Slide 86: A sustainable value chain creates stakeholder value
The strategy A sustainable value chain creates stakeholder value 86
Slide 87: PLANET
PLANET
Slide 88: GHG emissions break down
PLANET GHG emissions break down % OF CO2e EMISSIONS PER CATEGORY, SCOPE 3 (2022) -69% Inbound transports and outbound deliveries -18% compared to 2021 Supplier’s emissions including material Reduced direct emissions (Scope 1) and emissions from energy purchases (Scope 2) by 69% in 3 years Indirect e
Slide 89: Developing a circular business model
PLANET Developing a circular business model while inspiring customers to make sustainable choices 1 2 3 RUGVISTA RE.USE Restored old rugs Recycled materials a circular marketplace • Antique and semi-antique wool • Hand-woven PET yarn rugs • Helps customers to extend the rugs (20 to >100 years old) f
Slide 90: PEOPLE
PEOPLE
Slide 91: The people in our value chain are the core of everything we do
PEOPLE The people in our value chain are the core of everything we do Our supply chain • Social responsibility is vital, addressing complex issues and ensuring sustainable development across our value chain • Long-term supplier relationships enable us to drive improvements through collaboration, edu
Slide 92: Our people: employee net promoter score
PEOPLE The people in our value chain are the core of everything we do Our people EMPLOYEE NET PROMOTOR SCORE 80 70 60 +3 50 40 30 20 10 0 2021 2022 92
Slide 93: BUSINESS
The vision BUSINESS 9
Slide 94: Good corporate governance and responsible business practices
BUSINESS Good corporate governance and responsible business practices maintained in 2022 100% of our rug suppliers have signed our Code of Conduct We have mapped 67% of our tier 2 suppliers (as % of purchase value) Zero corruption incidents reported 94
Slide 95: Going forward
Going forward PLANET PEOPLE BUSINESS • Ensure implementation of amfori BEPI • Continuously educate and • Strengthen our brand positioning by and emission reduction plans with key support suppliers to adhere to building content that empowers our suppliers by 2024 best practices for social and custome
Slide 96: Rugvista Group address
Ringugnsgatan 11, SE-216 16 Limhamn, Sweden www.rugvistagroup.com
Slide 97: Closing remarks
Closing remarks Foundation for sustainably continuing profitable growth journey 97
Slide 98: Questions & Answers
Questions & Answers