Douglas Ag · XETR:DOU
Douglas — Debt Investor Presentation (May 2023)
48 slides from Douglas's debt investor presentation, May 30, 2023
Slide 1: Q2 Operational & Financial Results
DÜSSELDORF, 30.05.2023 Q2 OPERATIONAL & FINANCIAL RESULTS Q2 | FY 2022/23
Slide 2: Today's Speakers
T O DAY ‘ S SPEAKERS SANDER VAN DER LAAN MARK LANGER CEO DOUGLAS GROUP CFO DOUGLAS GROUP 2
Slide 3: Agenda
AGENDA 01 Q2 OVERVIEW & HIGHLIGHTS 02 Q2 FINANCIALS 03 STRATEGY “LET IT BLOOM” 04 WRAP UP & Q&A 3
Slide 4: Q2 Overview & Highlights
01 Q2 OVERVIEW & HIGHLIGHTS SANDER VAN DER LAAN CEO DOUGLAS GROUP 4
Slide 5: Strong growth in Group net sales +19.3%
Strong growth in Group net sales +19.3% with double-digit sales growth in both store business with +24.5% lfl and E-Commerce with +12.1% lfl Group operating profits rose significantly Adjusted EBITDA: +32.9% to €126.9m Omnichannel business continues to thrive Overall growth driven by all categories
Slide 6: Significant Increase in Sales and Profitability
SIGNIFICANT INCREASE IN SALES AND PROFITABILITY STRONG NET SALES, ADJUSTED EBITDA & MARGIN NET SALES1 ADJ. EBITDA² in m€ 858 719 +19.3% 127 95 +32.9% + 19.9% lfl 13.3% 14.8% MARGINS Q2 2021/22 Q2 2022/23 Q2 2021/22 Q2 2022/23 › Sustained strong sales momentum as luxury and beauty continue to thrive
Slide 7: Business Highlights Q2 and Early 2023
BU SINESS H IGH L IGHT S Q2 AND EARL Y 2023 MILESTONES IN BOTH STATIONARY AND DIGITAL BUSINESS MAJOR STORE OPENINGS APP REMAINS STRONG First three DOUGLAS stores in DOUGLAS app recorded significant Slovenia opened in Ljubljana in early growth with uplift in orders (+26.5% 2023; several store opening
Slide 8: Category Trends
CAT EGO RY T RENDS SIGNIFICANT GROWTH ACROSS ALL CATEGORIES FRAGRANCE SKINCARE Largest category achieved Continued growth driven continued growth and is by THE ORDINARY (top overperforming online vs. 10 skincare brand in 10 other categories; biggest countries at DOUGLAS) & drivers include launches D
Slide 9: Q2 Financials
02 Q2 FINANCIALS MARK LANGER CFO DOUGLAS GROUP 9
Slide 10: DACHNL Q2 2022/23
DACH NL Q2 2022/ 23 STRONG DEVELOPMENT IN BOTH CHANNELS NET SALES ADJ. EBITDA1 Net sales increase driven by +32.3% in m€ in m€ (+34.5% lfl) growth in Store business 456 and +23.3% (+12.1% lfl) E-Com sales +27.8% 357 Net sales increase in Stores due to higher footfall though lower conversion rate and
Slide 11: France Q2 2022/23
F RANCE Q2 2022/ 23 ACCELERATED GROWTH IN E-COM NET SALES ADJ. EBITDA1 Net sales increase driven by +8.8% in m€ in m€ (+9.5% lfl) growth in Store business, 161 E-Com grew by +8.5% 148 +8.7% Higher footfall with lower conversion rate and larger basket sizes in Stores, more visits in E-Com but with lo
Slide 12: Southern Europe Q2 2022/23
SO U T H ERN EU RO PE Q2 2022/ 23 SUCCESSFUL TURNAROUND WITH SIGNIFICANT EBITDA CONTRIBUTION NET SALES1 ADJ. EBITDA2 Net sales1 increase driven by +1.5% in m€ in m€ (+19.5% lfl) growth in Stores despite 124 127 closures in Spain (−112 stores) and +2.4% +7.4% in E-Com business Net sales1 increase due
Slide 13: Central Eastern Europe Q2 2022/23
CENT RAL EAST ERN EU RO PE Q2 2022/ 23 HIGHEST SALES GROWTH AND ONGOING MARGIN UPLIFT NET SALES ADJ. EBITDA1 Net sales increase driven by +31.6% in m€ in m€ (+29.7% lfl) growth in Stores and 118 +21.3% in E-Com +29.4% 91 Net sales increase from significantly higher footfall in Stores with lower conv
Slide 14: Omnichannel Growth Fueled by Both Channels
OMNICHANNEL GROWTH FUELED BY BOTH CHANNELS Q2 2022/23 GROUP1 STORES1 E-COM in m€ in m€ in m€ Strongly increased footfall Higher number of visitors 858 (+~40%) and number of with stable conversion rate +19.3% customers 719 Increased basket sizes Stable to growing basket sizes Strong development of +1
Slide 15: P&L – KPIs Significantly Improved
P&L – KPIS SIGNIF ICANT LY IM PRO VED Q2 2022/23 in m€ Q2 2021/22 Q2 2022/23 ∆% Net sales 719.3 859.7 19.5% adj. Net sales 1 719.3 858.5 19.3% Cost of raw materials, -402.4 -469.1 -16.6% consumables and supplies and merchandise Gross profit 317.0 390.7 23.3% Significantly improved personnel Gross pr
Slide 16: DIO Improved; Omnichannel Investments
DIO IM PRO VED ; O M NICH ANNEL INVEST M ENT S AS OF 31 MARCH 2023 in m€ NET WORKING CAPITAL CAPEX 257 217 +18.6% 21 19 -7.8% 6.3% 6.5% NWC as % of NES 1 31.03.22 31.03.23 Q2 2021/22 Q2 2022/23 Higher inventory to counter supply chain issues, but Capex nearly equally split between Stores and E-Com u
Slide 17: Free Cash Flow Improved
F REE CASH F L O W IM PRO VED H1 2022/23 in m€ 435 -50 -124 266 -17 22 -28 238 Adj EBITDA CAPEX 1 Working Capital ² TAX Others ³ Adj FCF EBITDA Adjustments Free Cash Flow (Cash effect) 4 H1 2021/22 353 -36 -31 -24 11 273 -48 225 1 Excl. M&A-related investments (Cash Capex) 3 Change in Other Assets,
Slide 18: Significant Reduction in Leverage Ratio
SIGNIF ICANT REDU CT IO N IN L EVERAGE RAT IO AS OF 31 MARCH 2023; INCLUDING IFRS 16 EFFECTS CASH BALANCE in m€ 452 -11.7% 399 160 €9.0m used or reserved for (RCF) rental 161 guarantees (RCF) (PY: €10.3m) TOTAL NET LEVERAGE1 ADJUSTED EBITDA (LTM)2 in m€ 6.0 685 4.9 292 539 238 (cash) (cash) Mar 22 M
Slide 19: Let It Bloom DOUGLAS 2026
03 LET IT BLOOM DOUGLAS 2026 SANDER VAN DER LAAN CEO DOUGLAS GROUP 19
Slide 20: Strategic Framework
STRATEGIC FRAMEWORK BRAND CUSTOMER RANGE OF BRANDS BRICKS CLICKS OMNICHANNEL OPERATING MODEL SUPPLY CHAIN TECHNOLOGY & DATA ORGANIZATION, PEOPLE & CULTURE 20
Slide 21: Our Four Strategic Pillars
O U R F O U R ST RAT EGIC PIL L ARS BASED ON ONE STRONG FOUNDATION Be the Offer most Deliver most Build focused #1 BEAUTY relevant and customer friendly and efficient DESTINATION distinctive OMNICHANNEL OPERATING in all our RANGE OF experience MODEL markets BRANDS Grow our CULTURE and VALUES, lived
Slide 22: Strategic Pillar #1
ST RAT EGIC PIL L AR #1 o Strengthen brand communication: Update brand positioning, Be the #1 BEAUTY DESTINATION improve execution excellence, increase spending in all our markets o Social media: Develop a plan with & for the countries, install social listening tool & increase engagement and sales s
Slide 23: Strategic Pillar #2
ST RAT EGIC PIL L AR #2 o Choice of brands, be first: Build a strong supplier partnership, Offer most relevant and distinctive optimize trade terms RANGE OF BRANDS o From perfumery to beauty store: Develop a clear assortment strategy & guideline to strengthen core categories, including Building on i
Slide 24: Strategic Pillar #3
ST RAT EGIC PIL L AR #3 o Omnichannel services: Create omnichannel mindset, define all Deliver most customer friendly necessary touchpoints along the customer journey on & offline OMNICHANNEL experience o CRM 2.0: Develop holistic CRM strategy, improve customer activity and interaction through perso
Slide 25: Strategic Pillar #4
ST RAT EGIC PIL L AR #4 Omnichannel: Define target processes & systems for stores & omnichannel Build focused and efficient o and define clear KPIs and financial targets per process & format OPERATING MODEL o Supply chain: Develop European network of omnichannel warehouses, design To further increas
Slide 26: Strategic Pillars & Key Results Input
ST RAT EGIC PIL L ARS & KEY RESU L T S INPU T F OR GROWTH PL AN PER SEGMENT, PD & NB STRATEGIC PILLARS OMNICHANNEL Growth Plans 2023-2026 Key result DACH FR NL SE CEE PD/NB #1 BEAUTY 1 DESTINATION Key result Key result Key result Key result RANGE OF 2 BRANDS Key result Key result OMNICHANNEL Key res
Slide 27: Expected Outcome
E X P E CTED OUTCOME by 2026 Financials Increased Group net sales: 5 billion euros until 2026 Corresponding increase of EBITDA Brand & Operations Modernized & expanded store network Enhanced & extended E-Commerce offering Optimized omnichannel & brand positioning Improved supply chain & technologica
Slide 28: Wrap Up & Q&A
04 WRAP UP & Q&A SANDER VAN DER LAAN CEO DOUGLAS GROUP MARK LANGER CFO DOUGLAS GROUP 28
Slide 29: Summary
SU M M ARY DOUGLAS continued to grow strongly and expanded its business for the 8th consecutive quarter, with overall growth driven by all channels, segments and categories Store sales continued to grow (+24.5% lfl) as customers look for expert advice and personal shopping E-Commerce growth accelera
Slide 30: Notice to Recipients
NO T ICE T O RECIPIENT S This presentation and any materials distributed in connection herewith (together, the taxation or other advice, and the Presentation does not take into account your objectives or legal, forward-looking statement whether as a result of new information, future events or otherw
Slide 31: Thank You
v oD _ DOUGLAS 1 ™
Slide 32: Appendix
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Slide 33: Adjustments to EBITDA
ADJU ST M ENT S T O EBIT DA Q2 2022/23 in m€ Q2 2021/22 Q2 2022/23 Q2 2021/22 YTD Q2 2022/23 YTD Reported EBITDA 48.8 111.7 305.3 406.7 Q2: Mainly for Consulting fees1 6.7 4.0 10.4 8.1 OWAC Q2: Mainly for Restructuring costs2 21.2 4.9 21.2 7.0 staff-related PPA -0.1 -0.1 -0.2 -0.2 restructuring cost
Slide 34: Selected Segmental KPIs
SEL ECT ED SEGM ENT AL KPIS Q2 2022/23 in m€ REPORTED EBITDA CAPEX Q2 2021/22 Q2 2022/23 Q2 2021/22 Q2 2022/23 DACHNL 48.9 68.8 DACHNL 2.7 4.8 France 32.8 31.7 France 3.1 2.1 Southern Europe -15.2 19.1 Southern Europe 1.5 2.4 Central Eastern Europe 18.9 26.0 Central Eastern Europe 2.0 2.9 Corporate
Slide 35: Deep Dive into LFL Net Sales Development
DEEP DIVE INT O L F L NET SAL ES DEVEL O PM ENT QUARTERLY OVERVIEW Q2 2021/22 Q3 2021/22 Q4 2021/22 Q1 2022/23 Q2 2022/23 DACHNL 43.9% 39.5% 11.6% 15.4% 23.1% France 29.4% 27.7% 3.3% 3.3% 9.2% Southern Europe 32.3% 24.9% 12.0% 15.1% 17.2% Central Eastern Europe 45.7% 42.6% 13.2% 23.9% 27.6% Group 39
Slide 36: Selected Segmental KPIs H1 2022/23
SEL ECT ED SEGM ENT AL KPIS H1 2022/23 in m€ REPORTED EBITDA CAPEX H1 2021/22 H1 2022/23 H1 2021/22 H1 2022/23 DACHNL 160.5 216.9 DACHNL 5.2 8.1 France 115.8 113.5 France 4.7 4.4 Southern Europe 34.8 73.7 Southern Europe 2.9 3.5 Central Eastern Europe 64.0 85.8 Central Eastern Europe 2.4 4.3 Corpora
Slide 37: Net Working Capital
NET WO RKING CAPIT AL AS OF 31 MARCH 2023 257 in m€ 217 183 115 68 NWC as % of 6.3% 5.1% 3.1% 1.8% 6.5% LTM net sales 31.03.2022 30.06.2022 30.09.2022 31.12.2022 31.03.2023 31.03.2022 30.06.2022 30.09.2022 31.12.2022 31.03.2023 ~13% more inventory to counter supply chain Inventory 684.8 652.0 719.4
Slide 38: DACHNL H1 2022/23
DACH NL H 1 2022/ 23 ONGOING STRONG STORE TRAFFIC NET SALES ADJ. EBITDA1 Net sales increase driven by +25.0 in m€ in m€ (+27.8% lfl) growth in Store business 1,157 and +15.2% (+8.2% lfl) E-Com sales 961 +20.3% Net sales increase in Stores due to higher footfall, more items per basket compensated sma
Slide 39: France H1 2022/23
F RANCE H 1 2022/ 23 SLIGHTLY BETTER SALES DEVELOPMENT AT SUSTAINED HIGH MARGIN NET SALES ADJ. EBITDA1 Net sales increase driven by +4.1% in m€ in m€ (+6.1% lfl) growth in Store business, 469 486 E-Com growing by 2.4% +3.7% Net sales increase at higher footfall and larger baskets in Stores and more
Slide 40: Southern Europe H1 2022/23
SO U T H ERN EU RO PE H 1 2022/ 23 SALES INCREASE DESPITE STORE CLOSURES, MARGIN STRONGLY IMPROVED NET SALES1 ADJ. EBITDA2 Net sales1 increase driven by +2.1% in m€ in m€ (18.4% lfl) growth in Stores despite 332 340 closures in Spain and +4.4% in E- +2.4% Com business Net sales1 increase due to high
Slide 41: Central Eastern Europe H1 2022/23
CENT RAL EAST ERN EU RO PE H 1 2022/ 23 AGAIN, HIGHEST SALES AND MARGIN GROWTH NET SALES ADJ. EBITDA1 Net sales increase driven by +27.9% in m€ in m€ (26.7% lfl) growth in Stores and 318 +23.6% in E-Com +27.0% 250 Net sales increase from significantly higher footfall in Stores with lower conversion
Slide 42: Omnichannel Growth Fueled by Both Channels H1
OMNICHANNEL GROWTH FUELED BY BOTH CHANNELS H1 2022/23 GROUP1 STORES1 E-COM in m€ in m€ in m€ Strongly increased footfall (+~30%) Higher number of visitors with 2,298 and number of customers stable conversion rate 2,011 +14.3% Stable to growing basket sizes Increased basket sizes Higher net sales per
Slide 43: P&L – KPIs Significantly Improved H1 2022/23
P&L – KPIS SIGNIF ICANT LY IM PRO VED H1 2022/23 in m€ H1 2021/22 H1 2022/23 ∆% Net sales 2,015.2 2,300.3 14.1% adj. Net sales 1 2,010.5 2,297.5 14.3% Cost of raw materials, -1,137.8 -1,274.0 -12.0% consumables and supplies and merchandise Gross profit 877.4 1,026.3 17.0% Gross profit margin 43.5% 4
Slide 44: Cash Flow Statement
CASH F L O W ST AT EM ENT H1 2022/23 In m€ H1 2021/22 H1 2022/23 Mainly timing Net cash flow from operating activities 255.9 285.8 differences regarding the Net cash flow from investing activities -30.8 -47.9 investments made and increased Free cash flow 225.1 237.8 investment volume Net cash flow f
Slide 45: Cash and Financial Debt Structure
CASH AND F INANCIAL DEBT ST RU CT U RE AS OF 31 MARCH 2023 in m€ m€ x Adj. EBITDA2 Maturity Pricing Cash and cash equivalents 238 €9.0m used or reserved for RCF (€170m Volume) 0 Jan 26 E+4.75% rental guarantees (PY: E+5.5% Term Loan B (B3/B-/B) 675 Apr 26 €10.3m) (99% OID) Senior Secured Notes (B3/B
Slide 46: Store Network Across Europe
ST O RE NET WO RK ACRO SS EUROPE AS OF 31 MARCH 2023 NUMBER OF STORES DEVELOPMENT 1,953 1,843 31 Mar 2022 (m€) – 31 Mar 2023 133 134 Store openings 28 1,820 Store closures -138 1,709 Total -110 Mar 22 Mar 23 Store openings: 4 stores in DACHNL (DE, NL), 1 in France, 2 in South Europe (IT) and Own sto
Slide 47: IFRS 16 Effects on P&L – Q2 2022/23
IF RS 16 EF F ECT S O N P&L – Q2 2022/ 23 in m€ pre IFRS 16 post IFRS 16 Delta - pro forma - Net sales 859.7 859.7 0.0 Gross profit 390.7 390.7 0.0 Other expenses decreased by €73.0m as lease expenses Other income 70.9 73.5 2.6 (mainly for stores, warehouses Personnel expenses -158.0 -158.0 0.0 and
Slide 48: IFRS 16 Effects on P&L – H1 2022/23
IF RS 16 EF F ECT S O N P&L – H 1 2022/ 23 in m€ pre IFRS 16 post IFRS 16 Delta - pro forma - Net sales 2,300.3 2,300.3 0.0 Gross profit 1,026.3 1,026.3 0.0 Other income 166.1 168.8 2.7 Personnel expenses -322.4 -322.4 0.0 Other expenses -607.1 -466.1 141.0 EBITDA 263.0 406.7 143.7 Adj. to EBITDA 28