Slide 1: 3Q23/24 Results Presentation
3Q23/24 RESULTS PRESENTATION GDAŃSK, 14 DECEMBER 2023 3Q23/24 PRESENTATION
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) was prepared by LPP SA (the “Company”) with 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 prospect
Slide 3: Key Corporate Events
01 KEY CORPORATE EVENTS 3Q23/24 PRESENTATION 3
Slide 4: Strong Black Week results
Strong Black Week results OFFLINE ONLINE +37% YoY sales growth +16% YoY YoY sales growth Stronger growth in offline 44% share of online sales compared to online in revenues 27% YoY GROWTH IN REVENUES, LOWER PROMOTIONS, HIGHER GROSS MARGIN ON SALES. Black Week comprises 5 days from 23 November to 27
Slide 5: Debut of Mohito app
Debut of Mohito app Launch of the app: BENEFITS OF OUR APPS early November ▪ building customer loyalty, Third LPP brand with the app ▪ reducing online marketing costs, following: ▪ Reserved (8.5 million ▪ access to full shopping history (online and offline), downloads), ▪ simple and quick returns (3
Slide 6: DC Romania – construction works completed
DC Romania – construction works completed CONSTRUCTION CONSTRUCTION TESTS/START-UP LAUNCH OF OPERATING LAUNCH COMPLETION ACTIVITY January November December January 2023 2023 2023 2024 Rental agreement for 10 years. The DC is expected to service Total floorspace The only foreign distribution centre T
Slide 7: As many as four Reserved stores in London
FLOORSPACE OF 8,934 M2 As many as four Reserved stores IN LONDON LONDON in London CH BRENT CROSS (NEW) opening date: 29 September 2023 floorspace: 2,103 m2 CH WESTFIELD opening date: 29 August 2023 floorspace: 1,983 m2 OXFORD STREET opening date: 6 September 2017 floorspace: 3,036 m2 OXFORD STREET (
Slide 8: Greece - a promising market
THESSALONIKI (NEW) opening date: 25 October 2023 floorspace: 1,120 m2 Greece - a promising LARISSA (NEW) market opening date: 17 November 2023 floorspace: 1,068 m2 IOANNINA (NEW) opening date: 29 September 2023 floorspace: 1,667 m2 Acceleration of expansion driven by high online sales and a very goo
Slide 9: More than 2,200 stores
24 More than 2,200 38 stores 30 31 4 28 1,082 17 142 139 9 91 23 No. of 60 As at 31.10.2023 YoY 26 74 179 stores 36 77 4 68 LPP GROUP 2,206 + 369 ↑ 19 3 Poland 1,082 + 101 ↑ Abroad 1,124 + 268 ↑ 4 1 2 2 2 online + offline online offline 3Q23/24 PRESENTATION 9
Slide 10: 3Q23/24 Financial Results
02 3Q23/24 FINANCIAL RESULTS 3Q23/24 PRESENTATION 10
Slide 11: Stronger growth in offline than online
Stronger growth in offline than online OFFLINE +12.0% +24.1% 39 +7.0% revenues m2 countries Group revenues -0.4% 27 LFLs countries ONLINE 34 -6.2% countries revenues Data for 9 months 2023/24. 3Q23/24 PRESENTATION 11
Slide 12: Double-digit growth in Sinsay brand
GROUP REVENUES Double-digit growth (PLN m) in Sinsay brand 3,399.3 4,340.6 4,366.8 1,032.4 4,185.0 3,639.4 4,575.4 1,078.9 4,350.5 1,026.7 3,134.0 3,034.2 1,224.6 1,146.7 938.3 837.6 1,161.8 988.1 ▪ Group revenues in 3Q23/24 decreased by 0.4% YoY, 3,096.3 3,253.6 2,985.5 3,418.5 3,254.5 2,673.2 due
Slide 13: Over a billion online sales in the quarter
ONLINE SALES Over a billion online (PLN m) sales in the quarter 1,161.8 1,224.6 1,032.4 1,146.7 1,078.9 1,026.7 988.1 938.3 837.6 ▪ Stable YoY online sales in 3Q23/24 consistent with market trends, despite reduced marketing expenses. Better sales dynamics compared to 1H23/24. 3Q21/22 4Q21/22 1Q22/23
Slide 14: YoY growth of Group's floorspace by ¼
SHARE OF FOREIGN SALES IN REVENUES YoY growth of Group’s floorspace by ¼ 5,000.0 4,000.0 51% 53% 53% 52% 57% 60% 58% 58% 58% 57% 52% 3,000.0 2,000.0 ▪ In 3Q23/24 sales on foreign markets were higher than 1,000.0 in Poland and accounted for 57.1% of Group’s revenues vs. 59.7% in 3Q22/23. 0.0 3Q21/22
Slide 15: Significant improvement in gross profit margin
Significant improvement QUARTERLY GROUP GROSS PROFIT MARGIN in gross profit margin 58.3% 60.5% 55.8% 52.0% ▪ Gross profit margin in 3Q23/24 6.9 pp. higher YoY due to: ▪ significantly lower YoY costs of collection 51.0% 49.6% 49.6% 48.9% purchases, 47.9% ▪ more favourable YoY US$/PLN FX rate, ▪ lower
Slide 16: Decrease in SG&A costs/m2 by over ¼
COST OF OWN STORES/ M2 Decrease in SG&A (IAS17) costs/ m2 by over ¼ -12.9% YoY 193 196 176 166 179 173 171 171 167 59 66 60 62 62 56 52 55 57 66 65 51 58 55 57 55 53 53 ▪ A YoY decline in rental costs/m2 → resulting from a higher number of launched Sinsay brand stores 59 56 54 68 66 60 63 62 63 at l
Slide 17: PLN 800m EBIT in the quarter
PLN 800m EBIT in the quarter PLN m, IFRS16 3Q22/23 (before restatement) 3Q22/23 (after restatement) 3Q23/24 YoY ▪ Stable YoY Group revenue, both in offline and online sales. Revenues 4,366.8 4,366.8 4,350.5 -0.4% ▪ Higher YoY gross profit margin mainly due to: lower Gross profit margin on 51.2% 48.9
Slide 18: Over PLN 1bn net profit in 9 months
Over PLN 1bn net profit in 9 months PLN m, IFRS16 9M22/23 (before restatement) 9M22/23 (after restatement) 9M23/24 YoY Revenues 11,741.6 11,741.6 12,565.3 7.0% ▪ Single-digit sales growth YoY due to new traditional Gross profit margin on store openings. sales 51.4% 50.6% 51.1% 0.6pp. ▪ YoY growth in
Slide 19: Strong operating cash flows in the quarter
WORKING CAPITAL Strong operating cash (PLN m) flows in the quarter 3,479 3,187 ▪ Significant improvement in operating cash flows 4,344 4,059 due to growth in pre-tax profit and depreciation. 1,105 ▪ YoY stabilisation of working capital - reduction 805 in inventories and receivables. Normalisation in
Slide 20: Safe net debt level
NET DEBT Safe net debt level (PLN m, IFRS16) 7,000.0 2.5 2.1 6,000.0 1.9 1.8 2.0 5,000.0 1.4 1.5 ▪ At the end of 3Q23/24, net debt under IFRS16 1.2 1.3 1.2 1.5 4,000.0 1.1 amounted to PLN 4.2bn due to: 3,000.0 1.0 ▪ higher YoY use of long-term bank loans at a level 2,000.0 4,299 4,463 4,849 4,190 4,
Slide 21: 9M23/24 executive summary
9M23/24 executive summary 1 Single-digit revenue growth. Higher growth in offline compared to online. 2 Maintaining cost saving policy. 3 13% operating margin. 4 Over 3 billion of operating cash flows. 5 Safe debt level. 3Q23/24 PRESENTATION 21
Slide 22: 2023/24+ outlook
03 2023/24 + outlook 3Q23/24 PRESENTATION 22
Slide 23: Positive outlook for 4Q
Positive outlook for 4Q Christmas collections Online sales Double-digit purchased Maintaining YoY growth offline sales at a more cost discipline in mid-teens dynamics favourable US$/PLN FX rate Strong Black Friday. Target: increase in EBIT Positive reception of Christmas and improvement of profitabi
Slide 24: Christmas and Carnival collections
Christmas and Carnival collections HOME FOR CHRISTMAS COLLECTION LOVE CHRISTMAS PARTY & MORE HOME COLLECTION COLLECTION COLLECTION 3Q23/24 PRESENTATION 24
Slide 25: 2023/24 target: growth in profitability
2023/24 target: growth in profitability PLN 1.1bn CAPEX, Gross profit on sales including PLN 800m Growth in offline sales, margin 51-52%. for stores. stable online sales. PLN 0.5bn+ cost Working capital Group revenues reductions (performance normalisation: liabilities at PLN 17bn+. marketing, logist
Slide 26: Strengthening of Reserved brand
Strengthening of Reserved brand 2024/25+ Design office Purchasing office in Istanbul in Barcelona (launch in February 2024) Expanding purchasing capacity, Barcelona office as part identifying closer production sites of strengthening of Reserved brand - (accelerating time-to-market ratio), focus on f
Slide 27: Sinsay's dynamic development
Sinsay's dynamic development GROWTH SOURCES: OPENING OF NEW MAINTAINING ONLINE GROWTH STORES ATTRACTIVE PRICES ▪ high volumes ▪ 300 stores p.a. enabling favourable in the next 3 years, ▪ further development purchase prices, ▪ smaller towns (mainly of applications, ▪ cheaper purchasing retail parks),
Slide 28: Algorithms as a support in maintaining low cost level
Algorithms as a support in maintaining low cost level Reserved, Cropp, Sinsay House, Mohito New Allocation Application (ongoing project) - streamlining of packaging and shipping of goods to stores: (1) reduced manual intervention, RFID - (2) optimised goods packaging, (1) faster inventory turnover,
Slide 29: Medium-term double-digit floorspace growth
Medium-term double- digit floorspace growth FLOORSPACE GROWTH Floorspace I.2024 I.2025 2 I.2023. YoY YoY (ths m ) target target At the end of 2023/24 2 million m2 floorspace Poland 753 845 12% 913 8% Abroad 921 1,155 25% 1,487 29% Growth target for the next two years (2025/26-2026/27): TOTAL 1,673 2
Slide 30: 2024/25 target: growth in revenues
2024/25 target: growth in revenues Offline revenues - growth due to higher floorspace PLN 1.3bn CAPEX, Gross profit margin and positive LFLs. including PLN 1.2bn on sales 52-53%. for stores. Online revenues - stable Maintaining cost YoY growth. Safe debt level effectiveness (SG&A/ (no corporate bond
Slide 31: 2023/24+ opportunities and risks
2023/24+ opportunities and risks OPPORTUNITIES RISKS ▪ Social schemes in Poland, ▪ Lack of recovery in economy 800+, increase in minimum and in consumption. wage. ▪ Persistent inflationary ▪ Development on new markets pressure. (South Eastern-Europe, ▪ Increase in minimum wage Western Europe). in Po
Slide 32: Changes in the governing bodies of the company
Changes in the governing bodies of the company MANAGEMENT BOARD 5-Person Management Board – appointment of Mikołaj Wezdecki, responsible for IT/ e-commerce. SUPERVISORY BOARD Increasing gender diversity - 2 women (Jagoda Piechocka and Alicja Milinska) in the 5-member Supervisory Board. SHAREHOLDERS
Slide 33: Q&A
04 Q&A 3Q23/24 PRESENTATION 33
Slide 34: Back-up
05 Back-up 3Q23/24 PRESENTATION 34
Slide 35: Restatement of 4Q21/22 financial statement
Restatement of 4Q21/22 financial statement 4Q21/22 Data 4Q21/22 2021/22 PLN m, IFRS16 1Q21/22 2Q21/22 3Q21/22 (before (after (after restatement restatement) restatement) restatement) Revenues 1,815.3 2,990.2 3,134.0 3,399.3 3,399.3 11,338.8 COGS 824.4 1,374.4 1,306.1 1,343.0 1,343.0 4,847.9 Other op
Slide 36: Restatement of 2Q22/23 financial statement
Restatement of 2Q22/23 financial statement 2Q22/23 2Q22/23 1H22/23 Data PLN m, IFRS16 1Q22/23 (before (after (after restatement restatement) restatement) restatement) Revenues 3,034.2 4,340.6 4,340.6 7,374.8 COGS 1,486.3 2,084.7 2,084.7 3,571.1 Gross profit on sales 1,547.9 2,255.8 2,255.8 3,803.7 O
Slide 37: Restatement of 3Q22/23 financial statement
Restatement of 3Q22/23 financial statement 3Q22/23 3Q22/23 9M22/23 9M22/23 Data PLN m, IFRS16 (before (after Data (after restatement restatement) restatement) restatement restatement) Revenues 4,366.8 4,366.8 11,741.5 Other operating costs COGS 2,131.5 100.7 2,232.2 100.7 5,803.3 Reversal of a PLN 2
Slide 38: Restatement of 4Q22/23 financial statement
Restatement of 4Q22/23 financial statement 4Q22/23 4Q22/23 2022/23 2022/23 Data PLN m, IFRS16 (before (after Data (after restatement restatement) restatement) restatement restatement) Revenues 4,185.0 4,185.0 15,926.5 COGS 2,093.0 17.1 2,110.2 117.9 7,913.4 Other operating income Gross profit on sal
Slide 39: Glossary
Glossary Poland Retail sales in Poland and other sales of LPP SA. Region including: CEE (Czech Republic, Slovakia, Hungary), Baltic (Lithuania, Latvia, Estonia), SEE (Bulgaria, Romania, Croatia, Serbia, Slovenia, Bosnia and Herzegovina, and from 2021/22 Northern Other countries Macedonia), WE (Germa
Slide 40: Contact
Contact LPP SA HQ Łąkowa 39/44 St., CONTACT FOR INVESTORS Email: LPP.investor.relations@lpp.com CONTACT FOR MEDIA Email: media@lpp.com 80-769 Gdańsk, Poland Tel. +48 58 76 96 900 Email: lpp@lpp.com 3Q23/24 PRESENTATION discoverlpp company/lpp-sa discoverlpp discoverlpp