Footshop A.s. · PSECZ:FTSHP
Footshop A.s — Investor Presentation (September 2023)
47 slides from Footshop A.s's investor presentation, September 2023
Slide 1: Footshop Investor Presentation September 2023
FOOTSHOP4 PREMIUM – UNIQUE – LIMITED INVESTOR PRESENTATION September 2023
Slide 2: Disclaimer
DISCLAIMER THIS PRESENTATION (“PRESENTATION”) IS PREPARED BY FOOTSHOP A.S., WITH ITS REGISTERED OFFICE AT THÁMOVA 166/18, KARLÍN, 186 00 PRAGUE 8, ID. NO.: 14027348, REGISTERED IN THE COMMERCIAL REGISTER KEPT BY THE MUNICIPAL COURT IN PRAGUE UNDER FILE NO. B 26841 ( “COMPANY”). NEITHER THIS PRESENTA
Slide 3: Content
CONTENT 1. CEO INTRO (4) 2. FOOTSHOP GROUP INTRODUCTION (5) 3. MACROECONOMIC ENVIRONMENT (17) 4. OUR RESULTS (21) A. AGGREGATED FINANCIAL METRICS (22) B. BREAKDOWN BY SALES CHANNELS (28) C. KEY NON-FINANCIAL EVENTS (31) 5. FUTURE (38) 6. APPENDIX (41) 3
Slide 4: CEO Intro
CEO INTRO FROM THE BEGINNING OF THE YEAR, THE BIGGEST CHALLENGE WAS SUBSTITUTING THE LOST CONTRIBUTION FROM THE RELEASES PLATFORM. WITH ADIDAS DISCONTINUING THE COOPERATION WITH KANYE WEST AND OTHER BRANDS NOT HAVING SUCH HOT PRODUCTS IN OUR SEGMENT, WE LOST 20M CZK OF CONTRIBUTION MARGIN FROM THIS
Slide 5: Footshop Group Introduction
FOOTSHOP kGROUP INTRODUCTION 5
Slide 6: Footshop Group Overview
FOOTSHOP GROUP INTRODUCTION > FOOTSHOP GROUP OVERVIEW FOOTSHOP2 Leading online and B&M Czech based company Operating through Operating 4 flagship B&M retailer of streetwear headquartered in Prague 2 online stores stores in Prague, Bratislava, footwear, apparel and Footshop & Queens Bucharest and Bud
Slide 7: Brief History (2012-2018)
FOOTSHOP GROUP INTRODUCTION > BRIEF HISTORY FOOTSHOP2 2012 2014 2015 2016 2018 COMPANY 1st B&M STORE ADIDAS 2nd B&M STORE 3rd B&M STORE ESTABLISHMENT IN PRAGUE CONSORTIUM IN BRATISLAVA IN BUDAPEST • Peter Hajduček • Footshop opened its • Footshop became the • Footshop opened the • Footshop opened th
Slide 8: Brief History (2019-2023)
FOOTSHOP GROUP INTRODUCTION > BRIEF HISTORY FOOTSHOP2 2019 2020 2021 2022 2023 4th and 5th B&M NEW BRAND ACQUISITON OF COMPANY PRAGUE STOCK STORE OPENING IDENTITY QUEENS REORGANISATION EXCHANGE LISTING • Footshop opened • Footshop adopted • Footshop achieved • The market situation • Footshop conclud
Slide 9: Sales Channels
FOOTSHOP GROUP INTRODUCTION > SALES CHANNELS FOOTSHOP3 "MULTICHANNEL RETAILING ENABLES US TO ADAPT FLEXIBLY TO MARKET TRENDS AND BRINGS US CLOSER TO OUR CUSTOMERS. IT ALSO MAKES US MORE ATTRACTIVE IN THE EYES OF OUR SUPPLIERS." FOOTSHOP CORE FOOTSHOP RELEASES • Footshop focuses primarily on selling
Slide 10: B&M Stores
FOOTSHOP GROUP INTRODUCTION > B&M STORES FOOTSHOP4 PRAGUcE BUCHARbEST BUDAPESTi BRATISLAVAd
Slide 11: adidas Yeezy
FOOTSHOP GROUP INTRODUCTION > ADIDAS YEEZY FOOTSHOP2 "ADIDAS YEEZY CREATED A POWERFUL FUSION OF BRAND WITH ARTIST AND PLAYED A SIGNIFICANT ROLE IN FOOTSHOP'S JOURNEY." 2013 2015 2016 2019 2021 THE THE "YEEZY NEW DEAL BASED YEEZY DAY THE "FOAM DEAL BOOST 750" ON YEEZY SALES RUNNER" INCREASE • Kanye W
Slide 12: Termination of the Yeezy Partnership
FOOTSHOP GROUP INTRODUCTION > ADIDAS YEEZY FOOTSHOP2 "TERMINATION OF THE PARTNERSHIP HAS FORCED US TO SEEK NEW WAYS TO GROW OUR CORE BUSINESS. WE BELIEVE THAT THE EFFECT IS ONLY TEMPORARY ." Jun-Sep 2022 October 2022 2023 PRESENT TIME Why mention it? "A FAKE YEEZY" PARTNERSHIP THE AFTERMATH SELLING
Slide 13: Markets
FOOTSHOP GROUP INTRODUCTION > MARKETS FOOTSHOP1 "FOOTSHOP OPERATES AS A TRULY EUROPEAN COMPANY, WITH THE MAJORITY OF ITS REVENUE GENERATED IN CENTRAL EUROPE." GEOGRAPHIC POSITION IN CEE REGION Other • In several markets, including 2% the Czech Republic, Footshop Northern Europe 1% is the #1 player i
Slide 14: Market Segmentation and Brands' Results
FOOTSHOP GROUP INTRODUCTION > MARKET SEGMENTATION AND BRANDS' RESULTS FOOTSHOP3 "IN THE DYNAMIC SNEAKER INDUSTRY, FOOTSHOP'S AGILE APPROACH TO TRACKING MARKET TRENDS AND NAVIGATING SNEAKER TIERS POSITIONS IT AS AN ADAPTIVE PLAYER, READY TO EMBRACE THE RAPID GROWTH OF SMALLER BRANDS." MARKET SEGMENTA
Slide 15: Brand Portfolio
FOOTSHOP GROUP INTRODUCTION > BRAND PORTFOLIO FOOTSHOP5 "AT FOOTSHOP, FOOTWEAR ACCOUNTS FOR MAJORITY OF THE PORTFOLIO, WHEREAS AT QUEENS, THE PORTFOLIO IS MORE DIVERSIFIED BETWEEN FOOTWEAR AND CLOTHING. FOOTSHOP HAS A STRATEGIC POSITION QUEENS DOMINATES IN THE CEE REGION IN THE CZECH REPUBLIC AND SL
Slide 16: Customers
FOOTSHOP GROUP INTRODUCTION > CUSTOMERS FOOTSHOP2 "THE TOTAL CUSTOMER BASE IS GROWING, WITH AN INCREASING SHARE OF LOYAL CUSTOMERS." Development of Footshop Core customer base (thousands) FOOTSHOP CORE CUSTOMER BASE New Regular Loyal % of Loyal • 604k unique online customers purchased in Footshop in
Slide 17: Macroeconomic Environment
MACROECONOMIC ENVjIRONMENT 17
Slide 18: E-commerce Market
MACROECONOMIC ENVIRONMENT > E-COMMERCE MARKET FOOTSHOP3 "DESPITE DECREASING DEVELOPMENT OF THE CZECH E-COMMERCE, OUR CORE BUSINESS DELIVERED DOUBLE-DIGIT GROWTH, WHICH IS IN LINE WITH PROJECTIONS OF THE EUROPEAN FASHION E-COMMERCE MARKET." EUROPEAN ONLINE MARKET IS EXPECTED TO GROW E-COMMERCE IN THE
Slide 19: FX Rate Effect
MACROECONOMIC ENVIRONMENT > FX RATE EFFECT FOOTSHOP1 "PAST EUR/CZK FX RATE TRENDS NEGATIVELY IMPACTED FOOTSHOP'S PROFITABILITY, BUT WE ANTICIPATE A FAVORABLE SHIFT THAT WILL BENEFIT OUR FINANCIAL OUTLOOK." • Footshop is obligated to purchase goods in CZK from certain Model Example - products sold to
Slide 20: Inflation and Interest Rate Effects
MACROECONOMIC ENVIRONMENT > INFLATION AND INTEREST RATE EFFECTS FOOTSHOP3 "FOOTSHOP SUSTAINS BUSINESS RESILIENCE DESPITE INFLATION AND REALIZES GAINS FROM THE CURRENCY CHANGE IN ITS LOANS." INFLATION HAS LIMITED IMPACT ON OUR BUSINESS FOOTSHOP IS PROFITING FROM TRANSITIONING • Despite the challenges
Slide 21: Our Results
OUR RESoULTS 21
Slide 22: Aggregated Financial Metrics
OUR RESoULTS AGGREGATED FINANCIAL METRICS 22
Slide 23: Results for 8 Months of Year 2023
OUR RESULTS > AGGREGATED FINANCIAL METRICS FOOTSHOP1 RESULTS FOR 8 MONTHS OF YEAR 2023 650M CZK 12.4M CZK Net Revenue Adj. EBITDA FY22: 641M CZK FY22: -1.4M CZK Δ y/y: +1.4% Δ y/y: +13.7M CZK 37.2% 1.9% Gross Margin Adj. EBITDA margin FY22: 37.3% FY22: -0.2% Δ y/y: -0,0pp Δ y/y: +2.1pp 23
Slide 24: Net Revenue & Gross Margin
OUR RESULTS > AGGREGATED FINANCIAL METRICS > NET REVENUE & GROSS MARGIN FOOTSHOP1 "DESPITE THE DECLINE IN THE CZECH E-COMMERCE MARKET AND A DECREASE IN REVENUE FROM THE FOOTSHOP RELEASES PLATFORM, WE RECORDED A Y/Y INCREASE IN REVENUE THANKS TO THE DOUBLE-DIGIT GROWTH OF FOOTSHOP CORE." M CZK 8M FY2
Slide 25: EBITDA
OUR RESULTS > AGGREGATED FINANCIAL METRICS > EBITDA FOOTSHOP1 "WELL-TIMED AND CORRECTLY EXECUTED COMPANY REORGANIZATION IN FY22 RESULTED IN A SIGNIFICANT REDUCTION IN PERSONNEL COSTS AND CONTRIBUTED TO ADJ. EBITDA* GROWTH OF 13.7M CZK." M CZK 8M FY22 8M FY23 % change ADJ. EBITDA GREW SIGNIFICANTLY N
Slide 26: Return Rate, Logistics and Marketing Costs
OUR RESULTS > AGGREGATED FINANCIAL METRICS FOOTSHOP1 "THE RETURN RATE REMAINS AT RELATIVELY LOW LEVELS COMPARED TO THE AVERAGE RETURN RATE IN THE FASHION INDUSTRY. IN EVERY AREA OF THE COMPANY, WE CONTINUOUSLY SEEK OPPORTUNITIES FOR SAVINGS AND OPTIMIZATION." Return rate (8M of respective year) RETU
Slide 27: Stock Value and Product Offer
OUR RESULTS > AGGREGATED FINANCIAL METRICS FOOTSHOP3 "WE MAINTAIN OUR FOCUS ON PREMIUM PRODUCTS WHILE INCREASING THE SHARE OF FOOTWEAR IN OUR PRODUCT PORTFOLIO, RESULTING IN GROWING AOV." STOCK VALUE # products of Footshop Core on offer in K CZK • Stock value increased y/y from 251M CZK to 268M CZK.
Slide 28: Breakdown by Sales Channel
OUR RESoULTS BREAKDOWN BY SALES CHANNEL 28
Slide 29: Net Revenue by Sales Channel
OUR RESULTS > BREAKDOWN BY SALES CHANNELS FOOTSHOP1 "WE WERE ABLE TO OFFSET THE DECLINE IN REVENUE FROM RELEASES WITH DOUBLE-DIGIT GROWTH IN REVENUE FROM FOOTSHOP CORE." Net Revenue from Goods* for 8M of respective year in M CZK CORE BUSINESS REVENUE INCREASED 16% Y/Y • The Footshop Core Net Revenue
Slide 30: Contribution Margin by Channel
OUR RESULTS > BREAKDOWN BY SALES CHANNELS FOOTSHOP1 "THE FOOTSHOP CORE'S CONTRIBUTION TO PROFITABILITY HAS GROWN SIGNIFICANTLY, AND WITHOUT THE FOOTSHOP RELEASES DISRUPTION, OVERALL PROFITABILITY WOULD HAVE INCREASED EVEN MORE." Contribution Margin* in M CZK for 8M of respective year RELEASES' NEGAT
Slide 31: Key Non-Financial Events
OUR RESoULTS KEY NON-FINANCIAL EVENTS 31
Slide 32: Key Non-Financial Events
OUR RESULTS > KEY NON-FINANCIAL EVENTS FOOTSHOP4 1 CLOSING THE TRANSACTION In June FY23, we successfully concluded the transaction with WOOD&Company, and by August 2023, Footshop achieved a significant milestone by securing a listing on the STANDARD 2 EXPANSION OF THE B&M NETWORK In August FY23, we
Slide 33: Closing the Transaction
OUR RESULTS > KEY NON-FINANCIAL EVENTS > CLOSING THE TRANSACTION FOOTSHOP5 "IN AUGUST 2023, FOOTSHOP ACHIEVED ANOTHER SIGNIFICANT MILESTONE IN ITS HISTORY BY LISTING ON THE PRAGUE STOCK EXCHANGE." CLOSING THE TRANSACTION • In June 2023, we successfully concluded the transaction with WOOD SPAC One. •
Slide 34: Expansion of the B&M Network
OUR RESULTS > KEY NON-FINANCIAL EVENTS > EXPANSION OF THE B&M NETWORK FOOTSHOP6 "AFTER A CHALLENGING YEAR 2022 AND THE CLOSURE OF 2 OF FOOTSHOP B&M STORES, WE WERE THRILLED TO EXPERIENCE THE JOY OF REOPENING A NEW BOUTIQUE AGAIN. OUR RETURN TO BRATISLAVA WAS A MEMORABLE EVENT." FOCUS ON CONTINUOUS S
Slide 35: Mobile App
OUR RESULTS > KEY NON-FINANCIAL EVENTS > MOBILE APP FOOTSHOP5 "WE WANTED TO MAKE THE SHOPPING EXPERIENCE EVEN MORE ENJOYABLE FOR OUR CUSTOMERS, AND SINCE 80% OF OUR SESSIONS COMES FROM MOBILE DEVICES, WE DECIDED TO LAUNCH OUR OWN MOBILE APP." Substantial adidas contribution • We developed the app wi
Slide 36: Private Label
OUR RESULTS > KEY NON-FINANCIAL EVENTS > PRIVATE LABEL FOOTSHOP3 "WE LAUNCHED THE FOOTSHOP LABEL WITH ALREADY STRONG DROPS, BUILDING LABEL'S PORTFOLIO THROUGH CAREFULLY CURATED ANNUAL PLAN AND BUILDING p BRAND AWARENESS HAND IN HAND WITH GAINING HIGHER MARGINS ON PRODUCTS." PROUD DROP - FOLLOWING FO
Slide 37: Private Label
OUR RESULTS > KEY NON-FINANCIAL EVENTS > PRIVATE LABEL FOOTSHOP3 "WE LAUNCHED THE FOOTSHOP LABEL WITH ALREADY STRONG DROPS, BUILDING LABEL'S PORTFOLIO THROUGH CAREFULLY CURATED ANNUAL PLAN AND BUILDING p BRAND AWARENESS HAND IN HAND WITH GAINING HIGHER MARGINS ON PRODUCTS." BRATISLAVA OPENING DROP -
Slide 38: Future
FUTUREf 38
Slide 39: Future Targets
FUTURE FOOTSHOP2 "WE KEEP OURSELVES BUSY WITH BUILDING THE FUNDAMENTS FOR LONG-TERM GROWTH. THIS IS THE LIST OF TARGETS FOR THE UPCOMING PERIOD." Sales Channels Inventory Queens • 100K downloads of our Mobile App with a score of • Private Label to generate 15M+ CZK Revenue in • Queens Rebranding wit
Slide 40: Thank You
THANK YOUp FEEL FREE TO CONTACT US: investor.relations@footshop.cz 40
Slide 41: Appendix
APPENDIXp 41
Slide 42: Key Terminology (1/2)
FOOTSHOP2 KEY TERMINOLOGY (1/2) Term Explanation Adj. EBITDA EBITDA not including Profit/Loss from Financial Operations Adidas Consortium a special division or program within the Adidas brand that focuses on collaborations with external partners, including fashion designers, sneaker boutiques, artis
Slide 43: Key Terminology (2/2)
FOOTSHOP2 KEY TERMINOLOGY (2/2) Term Explanation Net Revenue Total Revenue after substracting returns, allowances and discounts, including Revenue from Shipping Raffle A way of randomly allocating limited sneakers to customers. Releases Platform same as Footshop Releases SKU Stock Keeping Unit the C
Slide 44: Sources (1/2)
FOOTSHOP2 SOURCES (1/2) 1. “Fashion - Europe | Statista Market Forecast.” Statista, www.statista.com/outlook/dmo/ecommerce/fashion/europe?currency=EUR. 2. “ECommerce - Europe | Statista Market Forecast.” Statista, www.statista.com/outlook/dmo/ecommerce/europe?currency=EUR. 3. “E-Commerce Skončila 12
Slide 45: Sources (2/2)
FOOTSHOP2 SOURCES (2/2) 9. “HICP - Monthly Data (Annual Rate of Change).” Europa.eu, 2023, ec.europa.eu/eurostat/databrowser/view/PRC_HICP_MANR__custom_7529777/default/table?lang=en. Accessed 25 Sept. 2023. 10. Refinitiv, Erste Group. “Eurozone Economy.” www.erstegroup.com, www.erstegroup.com/en/res
Slide 46: Methodology (1/2)
FOOTSHOP2 METHODOLOGY (1/2) Slide no. / Chart (Table) Title Explanation 9 / % Share of Sales Channels for 8M % Share on NOT consolidated Net Revenue (intercompany transactions are NOT eliminated). FY22 vs. 8M FY23 13 / 8M FY23 Net Revenue per Region % Share on NOT consolidated Net Revenue (intercomp
Slide 47: Methodology (2/2)
FOOTSHOP2 METHODOLOGY (2/2) Slide no. / Chart (Table) Title Explanation 27 / % price categories share of Price Categories are defined based on selling price in CZK as follows: Footshop Core Footwear: 0-1499: budget price; 1500-3499: mid price; 3500+: premium price Apparel: 0-1099: budget price; 1100
Footshop a.s. — Investor Presentation (September 2023) on 6ix