Slide 1: 2Q22/23 Results Presentation (corrected)
2Q22/23 2Q22/23 RESULTS PRESENTATION (corrected) GDAŃSK, OCTOBER 6, 2022 WWW.LPPSA.COM
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) was prepared by LPP SA (the “Company”) with a due care. Still, it may contain certain inconsistencies or omissions. The Presentation does not contain a complete or thorough financial analysis of the Company and does not present its standing or prospe
Slide 3: Key corporate events
2Q22/23 3 01 PREZENTACJA 2Q22/23 Key corporate events
Slide 4: Opening of another Reserved store in Tel Aviv
Opening of another Reserved store in Tel Aviv in July 2022. 2Q22/23 450 m2 large flagship in TLV shopping mall. 4 This is the fourth store of the brand in Israel, but the only store with women collection solely. 2Q22/23 PRESENTATION Total floorspace of stores in Israel Further Reserved development c
Slide 5: Continuation of dynamic Sinsay development
Continuation of dynamic Opening of 56 stores and 57,904 m2 2Q22/23 Sinsay development of Sinsay brand space in 2Q22/23 (63% of all open stores). 5 Some 40% of Sinsay's sales in 2Q22/23 were online. Children's collection had the largest share in online sales (some 40%). Some PLN 23m of Sinsay online
Slide 6: Strong back-to-school effect
Favorable sales dynamics both offline and online, in all markets, supported by two effects: return to school and change of wardrobe for the Autumn season. 2Q22/23 Diversification of clothing and 6 accessories collections for children and teenagers – visiting collections and everyday garments. Succes
Slide 7: Launch of operations of LPP Logistics
We create subsidiaries (logistics and IT) to: • shorten the chain of command, • increase responsibility for 2Q22/23 achieving corporate goals, • allocate capital in our Group more 7 effectively. • The key customer of LPP Logistics are companies from LPP Group. Actions streamlining the logistics • In
Slide 8: We continue our operations in Ukraine
OUR STORES AND E-STORES We continue our SUPPORTED BY REGULAR DELIVERIES. operations in Ukraine Growing risk of Russia's attack 01.22 on Ukraine 2Q22/23 8 96 stores Closing of all stores in Ukraine operating 02.22 on the day of the Russian attack on Ukraine 38 stores Successive re-opening close to th
Slide 9: Russia timeline: suspension and sale of business
01.22 Growing risk of Russia's attack on Ukraine 02.22 Russia's invasion on Ukraine Decision to suspend operations in Russia - closing all 03.22 stores in this country 2Q22/23 9 04.22 Decision to sell LPP's business in Russia Agreement for the sale of shares in the Russian 05.22 subsidiary Re Tradin
Slide 10: Significant losses on the sale of Russian subsidiary
Significant losses on the sale of Russian subsidiary SALE OF RUSSIAN SALE OF GOODS IN STORES STORES IN RUSSIA 2Q22/23 PLN 601m selling price to be PLN 296m discounted selling price obtained by the end of 2026 10 - PLN 913m value of shares in the PLN 1.1bn of receivables for goods Russian company on
Slide 11: Presence in countries
Presence in 38 countries 5 32 20 26 1 25 2Q22/23 984 16 107 96 11 No of 75 As at 31.07.2022 YoY 23 stores 44 17 47 118 LPP GROUP 1 756 - 265 17 46 41 6 Poland 984 + 58 ↑ Europe 618 + 145 ↑ Other regions 154 - 468 4 1 2 2 2Q22/23 PRESENTATION 1 Other regions consist of Ukraine, Belarus, Kazakhstan an
Slide 12: 2Q22/23 financial results
2Q22/23 12 02 2Q22/23 PRESENTATION 2Q22/23 financial results
Slide 13: Disposal of the Russian subsidiary has a sizeable impact on financial statements
Disposal of the Russian subsidiary has a sizeable impact on financial statements 2Q21/22 2Q21/22 2Q22/23 (before restatement, full consolidation (after restatement, Russian subsidiary (Russian subsidiary as discontinued of the Russian subsidiary) as discontinued operations) operations) 2Q22/23 State
Slide 14: Towards omnichannel
OFFLINE Towards omnichannel 1,756 -9.7% stores m2 2Q22/23 14 38 +30.3% 25 COUNTRIES LFLs countries ONLINE +23.0% GROUP REVENUES 32 +24.2% 2Q22/23 PRESENTATION countries revenues Data for 1H22/23 does not include Russia, YoY dynamics refer to data for 1H21/22 before restatement.
Slide 15: Further double-digit revenue growth
Further double-digit revenue growth GROUP REVENUES OMNICHANNEL REVENUES (PLN m, data until the end of 2021/22 before restatement) PLN m 2Q21/22 2Q22/23 YoY 4,340.6 before restatement 4,123.2 3,914.0 3,643.7 1,224.6 LPP GROUP 3,643.1 4,340.6 19.1% 906.8 1,272.8 3,034.5 793.2 Reserved 1,439.6 1,582.3
Slide 16: Over PLN 1bn e-commerce revenues
Over PLN 1bn e-commerce revenues ONLINE SALES ONLINE BY REGIONS (PLN m, data until the end of 2021/22 before restatement) (PLN m, 2Q21/22 before restatement) PLN 1,224.6m 1,272.8 1,224.6 45.2 PLN 793.2m 54.4% 988.3 988.1 906.8 103.2 671.9 2Q22/23 793.2 778.1 621.2 16 355.7 445.9 507.5 334.2 2Q21/22
Slide 17: Foreign revenues higher than domestic ones
Foreign revenues higher than domestic ones REVENUES BY REGIONS IN 2Q22/23 2Q22/23 FLOORSPACE (PLN m, 2Q21/22 before restatement) (by regions, 2Q21/22 before restatement) ths m2 2Q21/22 2Q22/23 YoY Poland 1,866 +25% YoY LPP GROUP 1,616,5 1,459.3 -9.7% 2Q22/23 Poland 619.6 699.8 12.9% 17 Europe 1,878
Slide 18: Inventory secured for Autumn/Winter 2022/23
Inventory secured for Autumn/Winter 2022/23 QUARTERLY GROUP GROSS PROFIT MARGIN INVENTORY AND INVENTORY/ M2 (data until the end of 2021/22 before restatement) (data until the end of 2021/22 before restatement) 3,500 5,000 3,067 60.6% 3,000 2,057 2,529 56.6% 4,000 2,500 55.4% 1,702 2Q22/23 58.3% 3,00
Slide 19: Inflationary cost growth
Inflationary cost growth COSTS OF OWN STORES/ M2 SG&A COSTS/ M2 (IAS17, data until the end of 2021/22 before restatement) (IFRS16, data until the end of 2021/22 before restatement) +15.8% YoY 51% 450 49% 47% 47% 42% 45% 400 50% 42% 38% 37% 193 350 160 167 166 166 40% 150 156 300 144 141 59 2Q22/23 2
Slide 20: Increase in profit from continued operations
Increase in profit from 2Q21/22 2Q21/22 continued operations PLN m, IFRS16 (before (after 2Q22/23 YoY restatement) restatement) Revenues 3,643.1 2,990.2 4,340.6 45.2% Gross profit margin on 55.4% 54.0% 52.0% -2.1pp. sales • Double-digit YoY increases in revenues due to higher LFLs in traditional sto
Slide 21: Over PLN 0.5bn net profit in the first half of the year
Over PLN 0.5bn net profit in the first half of the year 1H21/22 1H21/22 • Double-digit YoY revenue growth due to strong sales in the online PLN m, IFRS16 (before (after 1H22/23 YoY restatement) restatement channel and high like-for-like revenues (LFLs). Revenues 5,993.5 4,805.5 7,374.8 53.5% • YoY f
Slide 22: Safe indebtedness level
Safe indebtedness level NET DEBT CAPEX (PLN m, IFRS16, lack of impact of Russian subsidiary from 1Q22/23) (PLN m, lack of impact of Russian subsidiary from 1Q22/23) 2Q21/22: 7,000.0 2Q22/23: 2.4 PLN 285m 2.5 2Q20/21: PLN 229m 6,000.0 1.9 PLN 162m 134.2 5,000.0 1.8 2.0 114.5 1.6 1.4 53.2 2Q22/23 4,00
Slide 23: Executive summary 1H22/23
Executive summary 1H22/23 2Q22/23 1 High sales dynamics despite the situation after the start of war in Ukraine. 23 2 Strong revenues in traditional stores. 3 Over PLN 2bn e-commerce revenues. 4 Liabilities exceeding inventory. 5 Disposal of the Russian business. 2Q22/23 PRESENTATION
Slide 24: 2022/23 + outlook
2Q22/23 24 03 2Q22/23 PRESENTATION 2022/23 + outlook
Slide 25: 2022/23 targets
2022/23 targets ▪ Over PLN 16bn of revenues, +13% YoY. ▪ Fall in floorspace to 1,695 ths m2 and Targets 1,984 stores. Priority set on Sinsay brand. 2Q22/23 ▪ PLN 5bn online sales. 25 ▪ Lower gross profit and operating margin. ▪ PLN 1 bn capex (out of which PLN 600m for stores, PLN 300m on logistics
Slide 26: Key LPP's competitive advantages
Key LPP’s competitive advantages Group prepared for a A unique and diversified business model combining: possible slowdown ▪ Reserved, House, Cropp, Mohito - higher average prices, stores in the best shopping malls A COST CAUTIOUS COMPANY WITH A ▪ Sinsay – lower prices, stores in smaller and 2Q22/23
Slide 27: Renewable energy reduces our energy costs
Renewable energy reduces our energy costs Cost of electricity used Electricity costs for in own stores reached offices and warehouses PLN 12.0/m2 in in 1H22/23 amounted RISKS FOR LPP: 1H22/23, +89.2% YoY. to PLN 12.5m, +81.9% YoY. ▪ increase in electricity costs which are part of the operating costs
Slide 28: Further floorspace growth 2022/23+
Further floorspace growth 2022/23+ GROWTH TARGET FOR THE FOLLOWING YEARS (ths m2) +10%-15% +20% YoY p.a. 2019/20 -21/22 CAGR 2 1,888.1 Floorspace (ths m ) I.2022 I.2023 target YoY 1,695.4 2Q22/23 1,435.4 BY REGIONS 1,230.9 28 Poland 677.2 766.3 13% 1,075.6 Europe 522.8 781.2 49% Other regions 688.1
Slide 29: Western Europe as a source of growth
Western Europe as a source of growth Debut of the Reserved brand in Italy in Milan - 1Q23/24. 2Q22/23 29 Further Reserved stores in the UK in London – in 3 shopping malls, in 2023/24. 2Q22/23 PRESENTATION Own Sinsay traditional stores in Italy and in Greece (1Q23/24). online + offline online 2023/24
Slide 30: Growth financing secured
Growth financing secured The Extraordinary General Shareholders’ Meeting on September 23, 2022 agreed on the issuance of corporate bonds up to the amount of PLN 500m and Eurobonds up to EUR 500m. 2Q22/23 Aims of the issuance: 30 1. Financing the development of stores and working capital. 2. Lengthen
Slide 31: Q&A
2Q22/23 PRESENTATION 31 2Q22/23 Q&A 04
Slide 32: Glossary
Poland Retail sales in Poland and other sales of LPP SA. Region including: CEE (Czech Republic, Slovakia, Hungary), Baltic (Lithuania, Latvia, Estonia), Europe SEE (Bulgaria, Romania, Croatia, Serbia, Slovenia, Bosnia and Herzegovina, and from 2021/22 Northern Macedonia), WE (Germany, UK, Finland).
Slide 33: Contact
discoverlpp company/lpp-sa discoverlpp discoverlpp Contact GDAŃSK HQs CONTACT FOR INVESTORS CONTACT FOR MEDIA WWW.LPPSA.COM Łąkowa 39/44, 80-769 Gdańsk Email: Email: media@lppsa.com Tel. +48 58 76 96 900 LPP.investor.relations@lppsa.com Email: lpp@lppsa.com