Modivo Sa · GPW:MDV
Modivo Sa — CCC Group — Investor Day (January 2020)
50 slides from Modivo Sa's investor day presentation, January 2020
Slide 1: Moving Towards Omnichannel: CCC Group 2020-2022 Strategy
GO.22 MOVING TOWARDS OMNICHANNEL CCC Group 2020-2022 Strategy photo: Gino Rossi Gino Rossi, SS'20 collection January 2020
Slide 2: Disclaimer
CCC GROUP 2020–2022 STRATEGY DISCLAIMER GO.22 This presentation (“Presentation”) has been prepared by CCC S.A. of Polkowice (“CCC”) to provide a general overview of the CCC Group (“CCC Group”) through a set of selected highlights. It is purely informational and does not purport to be a complete anal
Slide 3: Presentation Team
CCC GROUP 2020–2022 STRATEGY PRESENTATION TEAM GO.22 DARIUSZ MARCIN MARCIN KAROL MIŁEK CZYCZERSKI GRZYMKOWSKI PÓŁTORAK Chairman President of the President of the Vice President of the of the Supervisory Board Management Board Management Board, Management Board, (since 2019), Founder CCC S.A. Founder
Slide 4: Agenda
CCC GROUP 2020–2022 STRATEGY AGENDA GO.22 INTRODUCTION 2020 DIAGNOSIS GROUP STRATEGY 2022 Q&A Sprandi, SS'20 collection 3
Slide 5: I Introduction
GO.22 Gino Rossi, SS'20 collection SEKCJA I INTRODUCTION
Slide 6: CCC Store Entrance
GO.22 CCC STORE ENTRANCE CCC store 5
Slide 7: eobuwie.pl store
ee ee . 2 _ r ize r ~ aL RS a — = —=—= eobuwie.pl store
Slide 8: eobuwie.pl & MODIVO mobile applications
GO.22 eobuwie.pl & MODIVO mobile applications 7
Slide 9: Where we are: what we have achieved in numbers
INTRODUCTION WHERE WE ARE GO.22 WHAT WE HAVE ACHIEVED – IN NUMBERS 1,242 stores 30+ 760 thsd m2 online sales platforms offline presence online presence in 23 countries in 15 countries PLN 5.8bn in sales PLN 1.5bn in 22% 2016-2019 online sales CAGR 70% 2016-2019 CAGR 8
Slide 10: Following rapid growth, we have developed a strategy for the coming years
INTRODUCTION WHERE WE ARE GO.22 FOLLOWING A PERIOD OF RAPID GROWTH AND CHANGE, WE HAVE DEVELOPED A STRATEGY FOR THE COMING YEARS We have grown We are CEE’s leader, but our Therefore, we have carried 1 at an above-average pace 2 ambition is to achieve more and 3 out a strategic review keep good pace
Slide 11: Overview of the last three years
INTRODUCTION OVERIVIEW OF THE LAST THREE YEARS GO.22 WE ARE UPDATING OUR BUSINESS MODEL, BUT THE PACE OF CHANGE, WEATHER AND INVENTORY CUTBACKS HAVE AFFECTED OUR MARGINS Esize.me, hybrid stores, OPERATIONAL DEVELOPMENTS app Start of product change Record Q4: 800 PLN 760 Start of re-digitisation ERP,
Slide 12: II Diagnosis
GO.22 Jenny Fairy, SS’20 collection SEKCJA II DIAGNOSIS
Slide 13: Footwear market in Europe steadily growing in value
DIAGNOSIS FOOTWEAR MARKET IN EUROPE GO.22 STEADILY GROWING MARKET VALUE – CENTRAL EUROPE AS THE FASTEST GROWTH REGION Central and Eastern Europe Market value CEE6 market worth EUR 4.5-5.0bn (EURbn) Market value – 2017-2022 CAGR +19% 1,3 Significantly lower per capita spending Online 0,5 Total ma
Slide 14: Eight key trends in the footwear market
DIAGNOSIS EIGHT KEY TRENDS IN THE FOOTWEAR MARKET GO.22 RAPID MULTI-DIMENSIONAL CHANGE 1 MULTIPLE CHANNELS TO REACH 2 EVOLVING STORE FUNCTIONS 3 DIRECT 4 GROWING COMPETITION CUSTOMERS AND CUSTOMER CUSTOMER RELATIONSHIP TOUCHPOINT DIGITISATION Customer mobility, ‘always-on’ Personalised message
Slide 15: CCC Group's key competitive advantages and challenges
DIAGNOSIS CCC GROUP’S KEY COMPETITIVE ADVANTAGES AND CHALLENGES GO.22 COMPETITIVE ADVANTAGES KEY CHALLENGES • Footwear industry expert. Market leader, with • Align the product mix with actual demand presence across many segments. Strong recognition. and reduce dependence on weather Scale • Achieve b
Slide 16: III Group Strategy
GO.22 SEKCJA III GROUP STRATEGY DeeZee, SS’20 collection
Slide 17: Strategy pillars
CCC GROUP STRATEGY GO.22 STRATEGY PILLARS GO.22 Our ambitions (2022): Our objective is to drive the Group's value growth Group's value by satisfying the needs of existing and future customers 1 OMNICHANNEL To skilfully combine distribution channels to be able to Share of online/offline provide our c
Slide 18: Pillar 1: Omnichannel footwear retailing ecosystem
CCC GROUP STRATEGY PILLAR 1: OMNICHANNEL FOOTWEAR RETAILING ECOSYSTEM AT THE CCC GROUP GO.22 Perfect fit and E-com sites Traditional Mobile apps stores recommendations eobuwie.pl, CCC.eu deezee.pl, Gino-Rossi.com • Evolving store function • CCC, MODIVO, eobuwie.pl mobile apps • Size recommendation (
Slide 19: Geographical coverage of CCC Group sales channels
CCC GROUP STRATEGY GEOGRAPHICAL COVERAGE OF CCC GROUP SALES CHANNELS GO.22 PL CZ SK RO HU BG CRO AUT CH UA RU GR IT Other B&M Other e-com B&M WEB 2020 2020 2020 2020 APP 2020 2020 2020 2020 2020 WEB 2020 APP 2020 B&M 2020 WEB 2020 WEB 2020 2020 2020 APP WEB APP 2020 18
Slide 20: Monetisation of the CCC Group's customer base
CCC GROUP STRATEGY MONETISATION OF THE CCC GROUP’S CUSTOMER BASE GO.22 USING CUSTOMER DATA TO MAXIMISE MARGINS CRM 2019 Strategy outlook 2020–2022 Countries Age Customer identification and acquisition ▪ Propagate CRM and advanced analytics across all geographies and companies 10m ▪ 60%+ transactions
Slide 21: Selective geographical expansion
CCC GROUP STRATEGY SELECTIVE GEOGRAPHICAL EXPANSION GO.22 FOCUS ON STRENGTHENING THE GROUP’S POSITION IN CEE ~PLN 4.7bn ~80% Region Comment Markets Retail network Number of sales growth direction channels Poland ▼▲ 9 • Saturation with CCC stores close to full capacity Czech Republic ▼▲ 5 Key/ CCC co
Slide 22: Development of brick-and-mortar presence
CCC GROUP STRATEGY DEVELOPMENT OF BRICK-AND-MORTAR PRESENCE (QUALITY AND NUMBER) GO.22 EXISTING AND NEW STORES WILL BE ADAPTED TO OPERATE IN OMNICHANNEL RETAIL ENVIRONMENT Existing stores | Active management + roll-out of omnichannel experience New stores| Much more selective approach 1. Reducing th
Slide 23: Developing complementary online channels
CCC GROUP STRATEGY WE WILL CONTINUE TO ACTIVELY DEVELOP COMPLEMENTARY ONLINE CHANNELS AT THE CCC GROUP GO.22 Different store-front websites seen by customers, but a single Through e-commerce channels, we can be present in various backend customer segments Price Premium Higher 33 platforms across 15
Slide 24: eobuwie.pl – footwear online leader on CEE markets
CCC GROUP STRATEGY EOBUWIE.PL – FOOTWEAR ONLINE LEADER ON CEE MARKETS GO.22 Track record of successful business scale-up Growing share of markets outside Poland Revenue* Sales structure [PLNm] 1 434 2016–2019 CAGR: +68% ca. 85% of total 982 revenue from CEE 612 303 Poland already down to only a thir
Slide 25: New logistics centre
CCC GROUP STRATEGY NEW LOGISTICS CENTRE GO.22 POTENTIAL UNLOCKED THROUGH INCREASED LOGISTICS CAPACITY New logistics centre Robotised warehousing system Robot order picking Over 40 thsd m2 State-of-the-art packing machines Sorter with throughput of 5.5m product items in stock 10 thsd items/hour 24
Slide 26: MODIVO – new platform at the Group
CCC GROUP STRATEGY MODIVO – NEW PLATFORM AT THE GROUP GO.22 SUCCESSFUL ENTRY INTO THE CLOTHING SECTOR Premium fashion online store Wide product range 450 brands / 80 thsd SKUs 150 brands / 55 thsd SKUs Revenue1 +62% 19 Selected brands (PLNm) +41% 11 +66% 8 +54% 5 3 sie.19 wrz.19 paź.19 lis.19 gru.19
Slide 27: esize.me – further platform scale-up
CCC GROUP STRATEGY ESIZE.ME – FURTHER PLATFORM SCALE-UP GO.22 ▪ 99% of scanned footwear models ▪ More than 200 esize.me scanners across Poland ▪ Orders worth ca. PLN 72m placed by esize.me users in 2019 1 The only retailer in Europe manufacturing custom-fit shoe insoles 1 – Before returns 26
Slide 28: eobuwie.pl – Outlook
CCC GROUP STRATEGY EOBUWIE.PL – OUTLOOK GO.22 Our targets? Why are we poised for success? 1. Strengthening our eobuwie.pl as the leading platform We skilfully combine online with Ambitions 2022 leading position in offline footwear online sales on CEE market Revenue of the eobuwie Group ~PLN 3bn ~17%
Slide 29: Pillar 2: Attractive product aligned with demand
CCC GROUP STRATEGY PILLAR 2: ATTRACTIVE PRODUCT ALIGNED WITH DEMAND GO.22 PRODUCT DEVELOPMENT TO MATCH CUSTOMER NEEDS 1. Strengthening key brands + new marketing strategy Lasocki – average annual sales of 20m+ pairs (women’s, men’s, kids) 2. Enhancing product quality 3. Sneakerisation Sprandi, forei
Slide 30: Revision of marketing strategy
CCC GROUP STRATEGY REVISION OF MARKETING STRATEGY GO.22 Marketing until 2019 Direction of changes 2020+ Deezee: one of the strongest fashion brands on Work is under way on a new marketing strategy ▪ Extensive portfolio, including several strong FB/IG, but CCC has some catching up to do for the CCC G
Slide 31: Pillar 3: Agility and efficiency
CCC GROUP STRATEGY PILLAR 3: AGILITY AND EFFICIENCY GO.22 PROCESS OPTIMISATION TO SUPPORT DELIVERY OF STRATEGIC OBJECTIVES Area Selected processes and tools (being implemented and improved) Outcomes • Optimised alignment of products • Continuous customer feedback (NPS) and services with customer Cus
Slide 32: CCC values underpin delivery of our strategy
CCC GROUP STRATEGY CCC VALUES UNDERPIN DELIVERY OF OUR STRATEGY GO.22 We work with passion, energy and enthusiasm to attain ambitious goals and realise the vision of a shared success! Each of us can make a real contribution to growth, collaboration and commitment. Together we build an organisational
Slide 33: Pillar 4: Financial stability
CCC GROUP STRATEGY PILLAR 4: FINANCIAL STABILITY GO.22 IMPLEMENTATION OF GROWTH PROJECTS AND RESPONSE TO CHANGING MARKET ENVIRONMENT REDUCING DEBT INVENTORY TURNOVER THROUGH – long-term objective: liabilities > inventories • Operating margin growth (EBIT% in 2022: ~8.5–9.5%) • Improvement in CCC’s i
Slide 34: Pillar 5: Sustainable development
CCC GROUP STRATEGY PILLAR 5: SUSTAINABLE DEVELOPMENT GO.22 AS THE ORGANISATION’S RESPONSE TO SHIFTING CUSTOMER EXPECTATIONS PRODUCT ENVIRONMENTAL PROTECTION Today By 2022 Today By 2022 • Product safety • Eco-friendly product lines • Cutting waste generation, CO2 emission (certification, accredited •
Slide 35: Corporate developments
CCC GROUP STRATEGY CORPORATE DEVELOPMENTS GO.22 eobuwie.pl – ownership aspects Western Europe/DACH CCC and eobuwie.pl are continuing effective cooperation and achieving increased synergies DACH: market with ~100m affluent customers, but it much more difficult than CEE. Each of Switzerland, Germany,
Slide 36: Key strategic areas
CCC GROUP STRATEGY KEY STRATEGIC AREAS GO.22 Our objectives and ambitions (2022): Our objective is to drive the Group's value growth Multiply by satisfying the needs of existing and future customers the Group's value 1 CUSTOMER-FOCUSED OMNICHANNEL MODEL To skilfully combine distribution channels to
Slide 37: Restoring margins to previous levels within a new scalable model
CCC GROUP STRATEGY RESTORING MARGINS TO PREVIOUS LEVELS… BUT THIS TIME WITHIN A NEW SCALABLE MODEL GO.22 14,00 GO.22 strategy period PLN 8.5-9.0bn REVENUE 12,00 10% 8.5-9.5% EBIT 10,00 MARGIN 8% 8,00 5.8 4.7 6,00 4.2 4,00 2% SHARE 2,00 35-40% OF E- COMMERCE 21% 24% 14% 0,00 2017 2018 2019* 2020 2021
Slide 38: Thanks to improved KPIs
CCC GROUP STRATEGY … THANKS TO IMPROVED KPIs GO.22 2019 2020 2021 2022 Average traffic per m2 33.9 32.9 31.9 30.9 (number of persons/m2 per month) y/y change -3% -3% -3% Omnichannel CCC * Average in-store conversion rate 14.6% 15.5% 16.0% 16.4% Average number of items per receipt 1.59 1.62 1.66 1.70
Slide 39: Conclusions
GO.22 Handbag, eobuwie.pl EUR 85 SEKCJA Spring jacket, MODIVO EUR 119 CONCLUSIONS photo: MODIVO / eobuwie.pl
Slide 40: Conclusions
CONCLUSIONS CONCLUSIONS GO.22 1. CCC developed a business model based on a strong brick-and-mortar presence, successfully scaled up across CEE; however, after 2016-2017 that model proved too slow to respond to changing market trends (emergence of e-com/omnichannel) 2. This is why the CCC Group is un
Slide 41: Q&A
GO.22 SEKCJA Q&A DeeZee, SS’20 collection
Slide 42: Contact persons and upcoming events
Q&A CONTACT PERSONS AND UPCOMING EVENTS GO.22 IR CALENDAR CONTACT PERSONS JANUARY Jan 30 2020 Erste Bank’s ‘Austria & CEE Investor Conference 2020’ WOJCIECH LATOCHA IR Manager FEBRUARY +48 887 448 312 wojciech.latocha@ccc.eu Release of the Group’s annual report and consolidated Mar 6 2020 financ
Slide 43: Thank you
GO.22 SEKCJA THANK YOU Gino Rossi, SS’20 collection
Slide 44: GO.22 strategy through key numbers – summary
ADDITIONAL SLIDES G0.22 STRATEGY THROUGH KEY NUMBERS – SUMMARY GO.22 2019* 2022 Revenue PLNbn 5.8 8.5–9.0 Share of online sales % 24 35–40 Gross margin % 50 ≥50 P&L Costs (CCC’s own stores) CCC Group Retail lease costs PLN/m2 - ~70 Retail staff costs PLN/m2 - ~72 EBIT margin % 2 8.5–9.5 Net margin %
Slide 45: The CCC Group is present in 29 countries
4 ADDITIONAL SLIDES THE CCC GROUP IS PRESENT IN 29 COUNTRIES 7 41 GO.22 4 473 LEGEND 19 X / X brick-and-mortar stores 96 17 53 50 eobuwie.pl online 1 80 store 179 18 71 29 14 2 17 1 4 1 1 1 RETAIL AREA Dec 31 2019 Y/Y (‘000 m²) Y/Y (%) NUMBER OF STORES Dec 31 2019 Y/Y Own, including: 725.7 +83.2 13%
Slide 46: Online penetration rate in fashion and m-commerce trends
ADDITIONAL SLIDES ONLINE PENETRATION RATE IN THE FASHION INDUSTRY AND M-COMMERCE TRENDS GO.22 MOBILE IS BECOMING THE DOMINANT E-COMMERCE CHANNEL Share of online sales by product category (2017) Share of m-commerce in online sales worldwide (source: CCC in-house study based on McKinsey’s report1) (so
Slide 47: Average footwear prices in Poland and CEE are low relative to Europe
ADDITIONAL SLIDES AVERAGE FOOTWEAR PRICES IN POLAND AND OTHER CEE COUNTRIES ARE LOW RELATIVE TO ENTIRE GO.22 EUROPE Average VAT-inclusive footwear price per pair in Europe, by country (PLN, 2017)1 212 – Countries where CCC owns stores 194 194 – CEE countries 189 182 177 173 171 161 160 160 159 159 1
Slide 48: Global sales of the footwear industry
ADDITIONAL SLIDES GLOBAL SALES OF THE FOOTWEAR INDUSTRY GO.22 [USDbn] 600 2018–2023 CAGR 513 493 4% 474 500 454 435 Total 416 246 400 2% Leather 193 footwear 300 89 8% Sports 61 200 footwear 178 100 Textile and 162 other 5% footwear 0 2018 2019 2020 2021 2022 2023 (source: Statista) 47
Slide 49: CCC's LFL sales vs market
ADDITIONAL SLIDES CCC’S LFL SALES VS MARKET GO.22 CCC’s estimated LFL sales in Poland vs market (net, pp.)1 2017 2018 2019 35 11 11 12 10 8 5 1 -7 -6 -12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 – CCC’s offline sales in Poland only; CCC’s LFL net sales as the difference between CCC’s LFL sales in the peri
Slide 50: DeeZee
DeeZee