Douglas Ag · XETR:DOU
Douglas — Investor Presentation (January 2022)
43 slides from Douglas's investor presentation, January 2022
Slide 1: Douglas Investor Presentation January 2022
LOUGLAS January 2022
Slide 2: Douglas Investment Highlights
DOUGLAS INVESTMENT HIGHLIGHTS Europe’s leading and Douglas is Europe’s #1 A diversified leader in large, innovative online beauty premium beauty destination2 structurally growing and platform with ~€1.2bn sales1, resilient European beauty growing at c.30% CAGR for market the last 3 years Winning and
Slide 3: Douglas is the leading beauty platform in Europe's premium beauty market
DOUGLAS IS THE LEADING BEAUTY PLATFORM IN EUROPE'S PREMIUM BEAUTY MARKET IN 2019 Premium sales, 2019 (€m) We generate Ca. almost same premium sales as Douglas’ 2,550 core geo- the next 3 competitors in graphies2 Douglas’ #1 position3 total in core drives future geographies2 economies of scale, attra
Slide 4: Douglas: synonym for beauty across Europe
DOUGLAS: SYNONYM FOR BEAUTY ACROSS EUROPE Customer The eminent perception of Douglas brand Douglas2 power drives traffic Unmatched brand awareness1 and customer acquisition at Truly a Synonym for beauty in all of its low cost markets unique brand… Highly trusted ... with leading Premium image awaren
Slide 5: Omnichannel champion with growing share of most valuable omnichannel customers
OMNICHANNEL CHAMPION WITH GROWING SHARE OF MOST VALUABLE OMNICHANNEL CUSTOMERS Share of customers shopping ~2x omnichannel (%) While the overall share of omnichannel customers is increasing, the > 2x > 2x percentage is almost twice as high among 29% the young key customer group 19% 17% 12% 359 148 1
Slide 6: European beauty is a large, structurally growing and resilient market
EUROPEAN BEAUTY IS A LARGE, STRUCTURALLY GROWING AND RESILIENT MARKET MARKET VOLUME1 (€BN) The European beauty market is worth €92bn, Online has been growing particularly fast and more than doubled in out of which Douglas’ key product categories market size within the premium segment between 2015 an
Slide 7: Unique market characteristics – need for a trusted premium curator
UNIQUE MARKET CHARACTERISTICS – NEED FOR A TRUSTED PREMIUM CURATOR IN A SHIELDED DISTRIBUTION SYSTEM Manufacturer Customer Hundreds of brands Millions of customers Trusted premium curator Selective distribution In order to ensure that their brand is presented in line with their premium positioning,
Slide 8: #FORWARDBEAUTY.DIGITALFIRST strategy execution update
#FORWARDBEAUTY.DIGITALFIRST STRATEGY EXECUTION UPDATE BEAUTY PLATFORM 1 Brand positioning E-COMMERCE ONLINE SHOP MARKETPLACE 8 3 ASSORTMENT 5 CURATION / CRM Choice & innovation Inspiration & personalisation 4 SUPPLY CHAIN 6 TECHNOLOGY Customer Operational excellence Data-driven culture Partner relat
Slide 9: We upgraded and rejuvenated the Douglas brand
WE UPGRADED AND REJUVENATED 1 THE DOUGLAS BRAND MORE MODERN AND NEW VISUAL NEW PREMIUM POSITIONING LANGUAGE LOGO 9 Brand Store Assortment Supply Chain CRM Technology
Slide 10: Our stores from point of sale to point of experience
OUR STORES FROM POINT OF 2 SALE TO POINT OF EXPERIENCE Flagship Luxury Prestige Premium AI-based ordering DOUGLAS Warehouse Network of 5 OWAC1 AI-based replenishment Major city, high Prime location Premium Mainstream DOUGLAS E-Com order Store traffic location, with luxury wealthy shopping E-Com orde
Slide 11: Assortment: clear differentiation with >160,000 beauty products
ASSORTMENT: CLEAR DIFFERENTIATION WITH 3 >160,000 (4) BEAUTY PRODUCTS BEAUTY HAIR DERMA BEAUTY ACCESORIES & JEWELLERY WITH MORE THAN 160,000 SKUS DOUGLAS HAS THREE TIMES AS MANY SKUS AS ITS CLOSEST COMPETITOR 1 101 marketplace partners as of 31 Dec 2020 in Germany, marketplaces in Austria and France
Slide 12: Assortment progress
ASSORTMENT 3 PROGRESS CHARLOTTE HUDA BEAUTY TILBURY Available since March Available online since June, starting Sep./ Oct. One of the fastest growing also in stores cosmetic brands worldwide Blockbuster brand with cult status KYLIE COSMETICS KEYS SOULCARE Available online since July Available since
Slide 13: Our integrated physical and digital supply chain
OUR INTEGRATED PHYSICAL 4 AND DIGITAL SUPPLY CHAIN PHYSICAL SUPPLY CHAIN › New go-to-market supply chain strategy: One Warehouse, All Channels (OWAC) OWAC sites › 5 OWAC sites to be built to enable E-Com growth and marketplace partner fulfilment by Douglas with up to 150k SKUs per site in total, rep
Slide 14: Douglas Datahub is the key enabler for the holistic machine learning data strategy
DOUGLAS DATAHUB IS THE KEY ENABLER FOR THE 5 HOLISTIC MACHINE LEARNING DATA STRATEGY OFFLINE DATA RETAIL MEDIA DATA CRM DATA MARKETPLACE DATA DOUGLAS WEBSITE DATA PERFORMANCE MARKETING DATA ANALYTICS DATA BI-DIRECTIONAL DATA EXCHANGE UNIDIRECTIONAL DATA EXCHANGE DOUGLAS APP DATA 14 Brand Store Assor
Slide 15: Douglas Datahub progress
DOUGLAS DATAHUB 5 PROGRESS DATA INTEGRATION Full integration of data from: Sales, E-Commerce, app, core marketing, CRM and retail media DATA GOVERNANCE › Main KPI definition done › Core market KPI definition rollout DATA MODELLING › Ecommerce including Marketplace data modelled › Key retail media an
Slide 16: CRM: 1:1 curated customer communication in all channels
CRM: 1:1 CURATED CUSTOMER COMMUNICATION 5 IN ALL CHANNELS › Personal beauty tips › Personalised start page › Personalised offers › Customer master data › Individualised product news › Beauty points, coupons & › Inspirational content › Personal salutation › Targeted product rewards › Push notificatio
Slide 17: Curation/CRM: Douglas LIVE
CURATION/CRM: DOUGLAS L I V E 5 IMPRESSIVE STARTING POINT FOR SOCIAL COMMERCE L I V E Live Shows in 8 Viewers inc. Customers aged Average conversion countries: DE, replays with 60% 16-30 vs. 26% for rate (Conversion AT, CH, NL, IT, of app share all E-Commerce rate E-Com ES, PL & FR shoppers Germany:
Slide 18: Marketplace: important element of our strategy
MARKETPLACE: IMPORTANT ELEMENT OF OUR STRATEGY 5 GROWING NUMBERS OF PARTNERS & SKUS NUMBER OF MARKETPLACE NUMBER OF MARKETPLACE PARTNERS IN GERMANY SKUS IN GERMANY 167 120k 68k 50 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Marketplace live 18
Slide 19: Digital infrastructure in place
DIGITAL INFRASTRUCTURE IN PLACE 5 Omni- Channel BW Business Commerce Customer Intelligence Cloud Data Cloud store FICO Accounting Covid resulted in Online acceleration – Douglas’ established technological infrastructure copes with changing buyer behaviour ERP LES Marketing Cloud 19 Brand Store Assor
Slide 20: Launch of Store Optimization Program
LAUNCH OF STORE OPTIMIZATION PROGRAM IN LINE WITH #FORWARDBEAUTY.DIGITALFIRST Sustainable shift from offline to online High number of stores Change of customer behavior in post-Covid within same catchment new normal with reduced store traffic areas drive potential to capture offline revenue Re-balan
Slide 21: Optimized store portfolio will increase EBITDA
OPTIMIZED STORE PORTFOLIO WILL INCREASE EBITDA STORE PORTFOLIO OPTIMIZATION ILLUSTRATIVE Current Store Revenue Revenue P&L After Store Portfolio Transfer Transfer Closures Closure of stores with negative or low profitability Online Channel Offline Channel Net Revenue transfer to nearby EBITDA effect
Slide 22: Store Optimization Program and #ForwardOrganization completion by end of FY21/22
STORE OPTIMIZATION PROGRAM AND #FORWARDORGANIZATION COMPLETION BY END OF FY21/22 EBITDA potential One-offs cash Main lever Comments (€m) (€m) Optimisation of store portfolio based on analysis of catchment areas Selection of future store network based on performance, Store portfolio €43m Net cash eff
Slide 23: SOP implementation ongoing
SOP IMPLEMENTATION ONGOING WITH MEASURABLE AND SUSTAINABLE IMPACT STATUS 30.09.2021 STORE CLOSURES / LEASE FTE REDUCTIONS RENT NEGOTIATIONS KEEP TERMINATIONS (CURRENT EST.) OPEN STORES (# OF STORES) Contracts terminated Store in stores to be closed 48% re-negotiation Stores closed 73% 47% completed
Slide 24: Summary
SUMMARY Transformation to an integrated, digital beauty platform reflects the changes in consumer behavior Store closures are a consequence of the digital transformation Remaining stores become part of the integrated, digital beauty platform Positive effects on EBITDA enable us to further pursue our
Slide 25: Closer look: Q4 2020/21 financials
CLOSER LOOK O4 2020/21 FINANCIALS
Slide 26: Net sales development by segment
NET SALES DEVELOPMENT BY SEGMENT GROUP Q4 2020/21 Total, in m€ GERMANY FRANCE 290 287 -1.0% GROUP 142 158 +10.7% 727 752 +3.5% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 210 210 +0.2% 85 98 +14.7% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21
Slide 27: Net sales development by segment: E-Commerce
NET SALES DEVELOPMENT BY SEGMENT E-COMMERCE Q4 2020/21 E-Commerce, in m€ GERMANY FRANCE 115 122 +5.6% GROUP 27 211 17 +54.7% 181 +16.7% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 44 35 +24.5% 19 13 +43.7% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4
Slide 28: Long-term E-Commerce growth
LONG-TERM E-COMMERCE GROWTH SALES DOUBLED OVER THE PAST TWO YEARS TO ~€1.2BN NET SALES (In m€) Growth continues to accelerate with net sales of ~€1.2bn 817 FY 2020/21 CAGR vs. 2019/20 585 423 383 324 261 180 145 106 50 69 19 23 32 39 2 4 6 9 13 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 0
Slide 29: E-Commerce: strong development of KPIs
E-COMMERCE: STRONG DEVELOPMENT OF KPIS EUROPE’S NO.1 BEAUTY PLATFORM Q4 2020/21 GROUP GERMANY +16.7% 0.6%pts +4.3% E-Com net sales Conversion rate Average basket (incl. VAT)* +4.6%pts +6.0%pts E-Com sales share Mobile sales share App sales share New customers in E-Com E-Com sales share Number of vis
Slide 30: Net sales development by segment: Brick & Mortar
NET SALES DEVELOPMENT BY SEGMENT BRICK & MORTAR Q4 2020/21 Brick & Mortar, in m€ GERMANY FRANCE 173 163 -5.3% 124 129 +3.9% GROUP 542 537 -1.0% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 172 164 -5.1% 73 81 +10.9% Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 Q4 20
Slide 31: Adjusted EBITDA development Q4 2020/21
ADJUSTED EBITDA DEVELOPMENT Q4 2020/21 In m€ GROUP TOTAL Strict cost discipline in personnel and operating expenses resulted in higher adjusted EBITDA and higher margin 29 23 The Store Optimisation Programme is bearing fruits, leading to lower rental and personnel expenses while 28,9 improving margi
Slide 32: Adjusted EBITDA development by segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT Q4 2020/21 Adjusted EBITDA1, in m€ GROUP GERMANY2 FRANCE 22 1 14 +63.6% 29 N/M 23 +25.0% -16 Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 SOUTH-WESTERN EUROPE EASTERN EUROPE 11 10 11 Adjusted +6.0% EBITDA Margin N/M Q4 2019/20 Q4 2020/21 Q4 2019/20 Q4 2020/21 -2
Slide 33: Key financials at a glance
KEY FINANCIALS AT A GLANCE Q4 2020/21 In m€ A D J U S T E D 1/ R E P O R T E D E B I T D A NET INCOME Reported EBITDA: 59 sustained gross profit margin and reduction in personnel and other operating expenses (esp. rents) +25.0% -58.1% 29 offset higher distribution costs in E- 23 Com, reversal of adj
Slide 34: Deviation analysis Q4 2020/21
DEVIATION ANALYSIS Q4 2020/21 In m€ Higher net sales Lower operating and Mainly adjusted Previous year negatively higher E-Com share, sell- personnel expenses for release of provisions affected by catch-up down of inventory in SOP due to reduction in rents for restructuring costs investments in E-Co
Slide 35: Free cash flow
FREE CASH FLOW IMPACTED BY REQUIRED CAPEX AND CASH EFFECT OF ADJUSTMENTS In m€ FREE CASH FLOW BRIDGE Q4 2020/21 ADJUSTED FCF DEVELOPMENT 21 11 4 49 -5 Q4 2018/19 Q4 2019/20 Q4 2020/21 -38 30 41 0 41 29 -24 11 1 2 Adj. EBITDA Capex Working Capital Taxes Other Adj. Free EBITDA Free Cash Flow M&A Free
Slide 36: Sufficient liquidity headroom
SUFFICIENT LIQUIDITY HEADROOM ONGOING COST AND CASH DISCIPLINE In m€ CASH BALANCE NET WORKING CAPITAL 398 0 (RCF) 256 165 (RCF) -25% +164% 240 244 91 184 30 Sep 20 30 Sep 21 30 Sep 20 30 Sep 21 › Improved liquidity headroom thanks to successful › Strong limit control and introduction of RELEX refina
Slide 37: Evolution of capital structure and key leverage metrics
EVOLUTION OF CAPITAL STRUCTURE AND KEY LEVERAGE METRICS CASH AND DEBT STRUCTURE AS OF 30 SEPTEMBER 2021 TOTAL NET LEVERAGE m€ x Adj. x Mgt. Adj. Maturity Pricing EBITDA EBITDA³ 8.9x 7.6x 6.3x 5.9x Cash and Equivalents 240 RCF (€170m Volume) 0 Jan 26 E+4.75% E+5.5% Mgmt. adj. Term Loan B (B3/B-/B) 60
Slide 38: Summary Q4
SUMMARY Q4 Like-for-like sales significantly above pre-Covid-19 level Double-digit growth in E-Commerce while Brick & Mortar recovered Douglas strategy #FORWARDBEAUTY.DigitalFirst is in full execution: › New offerings for an enhanced digital experience in the stores › Expansion of assortment with ma
Slide 39: Appendix
Slide 40: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA Consulting fees: EBITDA ADJUSTMENTS Mainly related to refinancing PPA: Former acquisitions (m€) Q4 2019/20 Q4 2020/21 FY 2019/20 FY 2020/21 COVID-19: Reported EBITDA1 -6.6 58.6 176.1 19.3 In particular, staff- and rent- Consulting fees 7.4 -14.1 19.5 12.9 related idle costs in
Slide 41: Net working capital
NET WORKING CAPITAL NET WORKING CAPITAL Net Working Capital continues to be a key focus; efficient 286 management supported by AI- 244 252 based software RELEX 188 184 NWC as % of Despite challenges due to LTM Net Sales COVID-19 and seasonal build- up of inventory in preparation for important Christ
Slide 42: Notice to recipients
NOTICE TO RECIPIENTS This presentation and any materials distributed in connection herewith (together, The information in this Presentation does not constitute investment, legal, expressly disclaims any such obligation, to update, revise or amend any forward- the “Presentation”) have been prepared b
Slide 43: Contact
Contact: Douglas Investor Relations Tel.: +49 211 16847 8594 E-Mail: ir@douglas.de