Douglas Ag · XETR:DOU
Douglas — Debt Investor Presentation (May 2021)
34 slides from Douglas's debt investor presentation, May 12, 2021
Slide 1: Financial Results
Financial Results Düsseldorf, 12 May 2021
Slide 2: Notice to Recipients
NOTICE TO RECIPIENTS This presentation and any materials distributed in connection herewith (together, the “Presentation”) have been prepared by Douglas GmbH (the “Company”) solely for use at this presentation, to be provided to selected Parties (each a “Recipient”). This presentation is solely for
Slide 3: Today's Speakers
TODAY’S SPEAKERS Tina Müller Group CEO Matthias Born Group CFO 3
Slide 4: COVID-19-Dominated Second Quarter
COVID-19-DOMINATED SECOND QUARTER STORE NETWORK SEVERELY IMPACTED BY LOCKDOWNS › Q2 highly affected by hard and long-lasting lockdowns in almost all European countries › Up to 100% of stores closed in core countries Germany, The Netherlands, Poland and partly in France › Record growth in e-commerce
Slide 5: E-Commerce Growth Partially Mitigated COVID-19 Impact Across Regions
E-COMMERCE GROWTH PARTIALLY MITIGATED COVID-19 IMPACT ACROSS REGIONS GROUP GERMANY FRANCE (ONLINE) (m€) (m€) (m€) LfL Net Sales LfL LfL LfL 291 263 166 188 132 123 6 Q2 2019/20 Q2 2020/21 8 Q2 2019/20 Q2 2020/21 Q2 2019/20 Q2 2020/21 GROUP SOUTH-WESTERN EASTERN EUROPE (BRICK & MORTAR) EUROPE (m€) (m
Slide 6: Overview of Brick & Mortar Lockdowns in Core Countries in Q2
OVERVIEW OF BRICK & MORTAR LOCKDOWNS CORE COUNTRIES IN Q2 January February March MM- 01- 01- 01- 01- 02- 02- 02- 02- 03- 03- 03- 03- TYPE OF RESTRICTIONS IN DD 08 15 22 29 05 12 19 26 05 12 19 26 WEEKS MARKED FR In March ~50% of stores open with restrictions PL regional lockdowns in week of 19 March
Slide 7: Brick & Mortar Affected in All Regions
BRICK & MORTAR AFFECTED IN ALL REGIONS Q2 2020/21 GROUP GERMANY FRANCE (BRICK & MORTAR) (BRICK & MORTAR) (BRICK & MORTAR) (m€) (m€) (m€) Net Sales LfL LfL LfL 154 114 91 6 12 LfL 8 Q2 2019/20 Q2 2020/21 Q2 2019/20 Q2 2020/21 484 SOUTH-WESTERN EASTERN EUROPE EUROPE (B&M) (BRICK & MORTAR) (m€) (m€) 25
Slide 8: SOP Implementation Successfully Started and First Impact Realized
SOP IMPLEMENTATION SUCCESSFULLY STARTED AND FIRST IMPACT REALIZED STATUS 30.04.2021 Store closures / lease terminations (# of stores) FTE reductions1 Rent negotiations keep open stores In percent of total Contracts terminated Stores success- 19% 19% Stores closed 23% in closure stores fully negotiat
Slide 9: Record Growth Rates in E-Commerce in All Regions
RECORD GROWTH RATES IN E-COMMERCE IN ALL REGIONS GROUP GERMANY FRANCE (ONLINE) (ONLINE) (ONLINE) (m€) (m€) (m€) Net Sales 175 109 6 16 29 8 Q2 2019/20 Q2 2020/21 Q2 2019/20 Q2 2020/21 291 SOUTH-WESTERN EASTERN EUROPE EUROPE (ONLINE) (ONLINE) (m€) (m€) 166 62 30 25 11 Q2 2019/20 Q2 2020/21 Q2 2019/20
Slide 10: Douglas Expands Market Shares in E-Commerce
DOUGLAS EXPANDS MARKET SHARES IN E-COMMERCE › Douglas outperforms previous DOUGLAS SEGMENT SHARE ACROSS CORE COUNTRIES (E-COMMERCE) year’s segment shares across core countries in E-Commerce, +3.7%pts i.e. in Germany, France and Italy › E-Commerce: Key growth driver in all countries +6.3%pts +2.1%pts
Slide 11: Adjusted EBITDA
ADJUSTED EBITDA Q2 2020/21 Q2 2020/21 VS. PY › Strong effects of lockdown (m€) triggered a significant number of adjustments; e.g. idle rents and personnel costs › Continuous strict cost discipline and short-time work allowance 20 helped to partially mitigate the lockdown effects and the decline in
Slide 12: Adjusted EBITDA Development by Segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT Q2 2020/21 › EBITDA figures stated pre IFRS16 ADJUSTED EBITDA 1 › Negative impact partially mitigated by E- GROUP GERMANY2 FRANCE Com contribution, countermeasures and strict cost discipline (m€) (m€) (m€) › Germany: Most severely impacted by 3 14 lockdowns; Gr
Slide 13: Long-Term E-Commerce Growth
LONG-TERM E-COMMERCE GROWTH E-COM SALES DOUBLING IN THE LAST TWO YEARS OVER €1.1BN E-COMMERCE GROWTH FURTHER ACCELERATES, WITH NET SALES OVER €1.1BN E-COMMERCE NET SALES (IN M€) 822 LTM Mar 2020/21 vs. LTM Mar 2019/20 585 423 383 CAGR 324 261 180 145 106 50 69 23 32 39 2 4 6 9 13 19 00/01 01/02 02/0
Slide 14: E-Commerce: Strong Development of KPIs
E-COMMERCE: STRONG DEVELOPMENT OF KPIS NO.1 EUROPEAN BEAUTY E-COMMERCE PLAYER ONLINE NET SALES ONLINE REVENUE SHARE GROUP Q2 2020/21 +75.5% CONVERSION RATE AVERAGE BASKET (INCL. VAT)* 0.3%pts +3.0% GERMANY Q2 2020/21 MOBILE REVENUE SHARE APP REVENUE SHARE +4.1%pts +5.3%pts 14 *Source: WebTrekk, not
Slide 15: Vaccination Is Key to Economic Recovery
VACCINATION IS KEY TO ECONOMIC RECOVERY Quota of population with at least one dose of Covid-19 vaccine (9 May 21) 52.1 45.6 32.1 26.0 26.0 28.4 27.8 26.9 22.9 Germany France Netherlands Spain Italy Poland UK USA China Quota of population vaccinated per week (week ending 9 May 21) 5.7 4.7 5.7 5.2 4.7
Slide 16: Summary
SUMMARY The second most affected quarter by the COVID-19 pandemic Record growth in e-commerce partially mitigated Douglas’ sales decrease in brick-and-mortar caused by lockdowns Adjusted EBITDA decline partially compensated by countermeasures and strict cost discipline Store optimization program ful
Slide 17: Closer Look: 6M 2020/21 Financials
Closer Look: 6M 2020/21 Financials 7 DOUGLAS
Slide 18: 6M 2020/21 Financials: COVID-19 Impacted
6M 2020/21 FINANCIALS: COVID-19 IMPACTED FIXED COSTS AND CHANNEL SHIFT WEIGH ON EBITDA A D J U S T E D 1,5/ R E P O R T E D 5 NET SALES LFL GROWTH EBITDA (bn€) (m€) 1.95 Total LfL Growth: 225 1.72 170 206 209 190 Store LfL Growth: Online LfL Growth: (17) 6M 2019/20 6M 2020/21 6M 2019/20 6M 2020/21 6
Slide 19: Net Sales Development by Segment
NET SALES DEVELOPMENT BY SEGMENT 6M 2020/21 › Net Sales impacted by COVID-19 NET SALES 1 lockdowns GROUP GERMANY FRANCE › Germany and SWE most severely impacted, Germany due to lockdowns (bn€) (m€) (m€) and SWE due to significant restrictions LfL LfL › Record quarterly growth in online sales LfL 744
Slide 20: Adjusted EBITDA Development by Segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT 6M 2020/21 › EBITDA figures stated pre IFRS16 ADJUSTED EBITDA 1 › Negative impact partially mitigated by E- GROUP3 G E R M A N Y 2,3 FRANCE Com contribution, countermeasures and strict cost discipline (m€) (m€) (m€) › Germany: Driven by decrease in store 80 70
Slide 21: Gross Profit Decline Partially Mitigated
GROSS PROFIT DECLINE PARTIALLY MITIGATED Driven by costs for SOP; 6M 2020/21 cost savings (e.g. short- term labour and Decrease in FCF due to (m€) discretionary spend) lower Rep. EBITDA, offsetting increased partially mitigated by Lower gross profit due to COVID- variable e-com costs, lower Capex an
Slide 22: Free Cash Flow Impacted by Required Capex and Cash Effect of Adjustments
FREE CASH FLOW IMPACTED BY REQUIRED CAPEX AND CASH EFFECT OF ADJUSTMENTS ADJUSTED FCF DEVELOPMENT (m€) 180 154 FREE CASH FLOW BRIDGE 6M 2020/21 98 (m€) 6M 2018/19 6M 2019/20 6M 2020/21 (49) (95) 91 (19) (13) 180 170 (88) 0 (3) (3) Adj. EBITDA CAPEX1 Working Taxes Others2 Adj. Free EBITDA SOP Free Ca
Slide 23: Sufficient Liquidity Headroom
SUFFICIENT LIQUIDITY HEADROOM ONGOING COST AND CASH DISCIPLINE CASH BALANCE (m€) › Successful refinancing secured sufficient headroom › Ongoing cost and cash discipline, e.g. PRO FORMA POST › Savings in personnel expenses (incl. government subsidies) and REFINANCING* 309 shift of social securities p
Slide 24: Evolution of Capital Structure and Key Leverage Metrics
EVOLUTION OF CAPITAL STRUCTURE AND KEY LEVERAGE METRICS PRO-FORMA CASH AND DEBT STRUCTURE TOTAL NET LEVERAGE 8 April 2021 x Adj. x Mgt. Adj. m€ Maturity Pricing 9.6x EBITDA EBITDA 6.2x 6.3x 5.4x Cash and Equivalents1 251 New RCF (€170m 0 Jan 26 E+4.75% Volume) Mar 2019 Mar 2020 8 Apr 20213 8 Apr 202
Slide 25: Summary 6M 2020/21
SUMMARY 6M 2020/21 COVID-19 lockdowns and ongoing restrictions with negative impact on H1 Accelerated strong E-Commerce growth, partially compensated declining store sales Store optimization program fully on track Business continuity secured Liquidity buffer increased thanks to successful refinancin
Slide 26: Appendix
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Slide 27: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA › Consulting fees: Mainly refinancing EBITDA ADJUSTMENTS related adviser expenses › PPA: Former acquisitions (m€) Q2 2019/20 Q2 2020/21 6M 2019/20 6M 2020/21 › COVID-19: In particular, staff- and rent- related idle costs in connection with Reported EBITDA1 (9) (165) 206 (17) cl
Slide 28: Reported EBITDA
REPORTED EBITDA REPORTED EBITDA 1 (m€) Q2 Q2 6M 6M 2019/20 2020/21 2019/20 2020/21 Germany1,2 (14) (105) 53 (67) France 13 (9) 78 47 South-Western Europe (10) (52) 46 (20) Eastern Europe 2 1 29 24 Group (9) (165) 206 (17) 28 1 Retrospective restatement of competitive information for the prior-year p
Slide 29: Deep Dive into LfL Net Sales Growth
DEEP DIVE INTO LFL NET SALES GROWTH QUARTERLY DEVELOPMENT LFL NET SALES GROWTH DEVELOPMENT Q2 Q3 Q4 Q1 Q2 LTM March 2019/20 2019/20 2019/20 2020/21 2020/21 2021 Germany (3.7)% (19.0)% 2.3% (3.3)% (22.1)% (9.0)% France (15.8)% (34.9)% (6.7)% (6.5)% (7.6)% (12.7)% South-Western Europe (15.8)% (34.9)%
Slide 30: Free Cash Flow Impacted by Required Capex and Cash Effect of Adjustments
FREE CASH FLOW IMPACTED BY REQUIRED CAPEX AND CASH EFFECT OF ADJUSTMENTS ADJUSTED FCF DEVELOPMENT (m€) FREE CASH FLOW BRIDGE Q2 2020/21 (179) (175) (m€) (253) Q2 2018/19 Q2 2019/20 Q2 2020/21 (1) (21) (93) (7) 33 (90) (80) (84) 0 (253 (253) Adj. Capex Working Taxes Others Adj. Free EBITDA SOP Free C
Slide 31: Cash Flow Statement
CASH FLOW STATEMENT › Cash Flow from Operating CASH FLOW STATEMENT activities impacted by (m€) Q2 Q2 6M 6M COVID-19 induced store 2019/20 2020/21 2019/20 2020/21 closures Net Cash Flow from Operating activities (151) (232) 192 45 › Cash flow from Investing activities reduced due to Net Cash Flow fro
Slide 32: Net Working Capital
NET WORKING CAPITAL › Net Working Capital continues to NET WORKING CAPITAL be a key focus (m€) › Inventory lower compared to Q2 2019/20 despite challenges due 300 313 248 286 to COVID-19, in line with seasonal 188 patterns › Payables: Lower due to lower NWC as % of LTM Net Sales Q2 2019/20 Q3 2019/2
Slide 33: Evolution of Capital Structure and Key Leverage Metrics
EVOLUTION OF CAPITAL STRUCTURE AND KEY LEVERAGE METRICS CASH AND DEBT STRUCTURE AS OF 31 MARCH 2021 TOTAL NET LEVERAGE Before refinancing 9.7x m€ x Adj. EBITDA Maturity Pricing 6.2x 6.3x 5.5x Cash and Equivalents 152 E+3.75% RCF (€200m Volume)4 127 Feb 22 (0% floor) Mar 2018 Mar 2019 Mar 2020 Mar 20
Slide 34: Premium Store Network Footprint Across Europe
PREMIUM STORE NETWORK FOOTPRINT ACROSS EUROPE › Store openings, in France 2.406 2.322 and Eastern Europe 138 140 › Nearly all 50 closures are 2.268 2.182 part of SOP, another 30 stores were closed in the course of SOP in April 31 Mar 2020 31 Mar 2021 Own stores Franchise stores Q2 2019/20 Q2 2020/21