Douglas Ag · XETR:DOU
Douglas — Q3 FY2022/23 Earnings Presentation
49 slides from Douglas's earnings presentation, Aug 24, 2023
Slide 1: Q3 Operational & Financial Results FY 2022/23
Q3 DÜSSELDORF, 24.08.2023 OPERATIONAL & FINANCIAL RESULTS Q3 | FY 2022/23
Slide 2: Today's Speakers
T O DAY ‘ S SPEAKER S SANDER VAN DER LAAN MARK LANGER CEO DOUGLAS GROUP CFO DOUGLAS GROUP 2
Slide 3: Agenda
AG ENDA 01 STRATEGY UPDATE 02 Q3 OVERVIEW 03 Q3 FINANCIALS 04 WRAP UP & Q&A 3
Slide 4: Strategy Update
01 STRATEGY UPDATE SANDER VAN DER LAAN CEO DOUGLAS GROUP 4
Slide 5: Recap: Our Four Strategic Pillars
R ECAP: O U R F O U R ST R AT EG IC PIL L AR S BASED ON ONE STRONG FOUNDATION 1 Be the 2 Offer most 3 Deliver most 4 Build focused #1 BEAUTY relevant and customer friendly and efficient DESTINATION distinctive OMNICHANNEL OPERATING in all our RANGE OF experience MODEL markets BRANDS Foundation: Grow
Slide 6: Update on Our Key Initiatives
U PDAT E O N O U R KEY R ESU L T S INITIATIVES CURRENTLY BEING DEVELOPED Deliver most Be the #1 BEAUTY Offer most relevant Build focused customer friendly DESTINATION and distinctive and efficient OMNICHANNEL in all our markets RANGE OF BRANDS OPERATING MODEL experience Brand Communication Category
Slide 7: Implementation Well on Track
IM PL EM ENT AT ION WEL L O N T R ACK GROUNDBREAKING DECISIONS AND MILESTONES REACHED Deliver most Be the #1 BEAUTY Offer most relevant Build focused customer friendly DESTINATION and distinctive and efficient OMNICHANNEL in all our markets RANGE OF BRANDS OPERATING MODEL experience Multi-format 3x
Slide 8: Multi-format 3x
M U L T I-F O R M AT 3X DEVELOP A CONSISTENT AND EFFICIENT PORTFOLIO Focus on three formats: Premium store concept: core format, between 100 and 800m² in size, 90% of store network Luxury store concept: more luxury brands & services; between 100 and 800 m² in size Online shop: widest range of brands
Slide 9: First Douglas Store in Belgium
F IR ST DO U G L AS ST O R E IN BEL G IU M OPENING NEAR ANTWERP Rollout of omnichannel model to the Belgian market First store opening in the Wijnegem shopping center near Antwerp: 450m² premium store offering an extensive beauty assortment including classic, exclusive, premium and corporate brands
Slide 10: One Group Wide E-Com Platform
O NE G R O U P WIDE E -CO M PL AT F O R M ROLLOUT IN THE NEXT 3-4 YEARS Single E-Commerce platform across Europe Rollout in all countries over the next few years Aim is to achieve a greater range of functions, an increase in the quality level and cost efficiency by switching to a common platform Fir
Slide 11: Group Wide Supply Chain Function
G R O U P WIDE SU PPL Y CH AIN F U NCT IO N LEVERAGING SYNERGIES Group wide supply chain approach based on standardization, simplicity and scalability Leverage synergies in pan-European supply chain network through central warehouses (OWAC Concept = One Warehouse, All Channels) and Group wide supply
Slide 12: The People Behind Beauty
THE PEOPLE BEHIND BEAUTY NEW EMPLOYER BRANDING CAMPAIGN International campaign launched this summer as umbrella for other campaigns (e.g. “THE CODE BEHIND BEAUTY”) Showcases the employees and culture to give applicants an authentic impression of working at DOUGLAS Group Campaign for both stores and
Slide 13: Q3 Overview
02 Q3 OVERVIEW SANDER VAN DER LAAN CEO DOUGLAS GROUP 13
Slide 14: Continued growth in adj. Group net sales
Continued growth in adj. Group net sales: +9.7% Double-digit sales growth in store business (+10.7% lfl), E-Commerce growing from high level (+8.5% lfl) Group operating profit developed well Adjusted EBITDA: +11.9% to €154.3m Positive development of net result 9M YTD net profit of €44.9m; Q3 net los
Slide 15: Further Increase in Sales and Profitability
FURTHER INCREASE IN SALES AND PROFITABILITY STRONG NET SALES, ADJUSTED EBITDA & MARGIN ADJ. NET SALES1 ADJ. EBITDA² in m€ in m€ 910 830 +9.7% 154 138 +11.9% +10.0% lfl 16.6% 16.9% MARGINS Q3 2021/22 Q3 2022/23 Q3 2021/22 Q3 2022/23 › Ongoing strong sales momentum as customers are attracted by › Gros
Slide 16: Category Trends
CAT EG O R Y T R ENDS CONTINUOUS GROWTH RATES ACROSS ALL CATEGORIES FRAGRANCE SKINCARE Drivers among female THE ORDINARY continued fragrances include Prada, to grow on very high level DIOR, YSL and Ariana (+87%); DOUGLAS brands Grande; male fragrances one.two.free! and Dr. fueled by Gisada, Gaultier
Slide 17: Q3 Financials
03 Q3 FINANCIALS MARK LANGER CFO DOUGLAS GROUP 17
Slide 18: DACHNL Q3 2022/23
DACH NL Q 3 2022/ 23 STRONG SALES DEVELOPMENT IN BOTH CHANNELS ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +13.0% (+11.9% lfl) growth in Store 423 business and +7.1% E-Com sales 382 +10.7% Adj. net sales increase in Stores due to higher footfall though slightly smaller
Slide 19: France Q3 2022/23
F R ANCE Q 3 2022/ 23 SALES GROWTH TRANSLATED INTO ADJ. EBITDA GROWTH ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +4.5% (+5.0% lfl) growth in Store 160 166 business, E-Com grew by +1.1% +3.8% Higher footfall and larger basket sizes in Stores, more visits in E-Com and sl
Slide 20: Southern Europe Q3 2022/23
SO U T H ER N EU R O PE Q 3 2022/ 23 SUCCESSFUL TURNAROUND WITH STRONG ACCELERATION IN NET SALES ADJ. NET SALES1 ADJ. EBITDA2 Adj. net sales1 increase driven by in m€ in m€ +15.5% (+14.1% lfl) growth in Stores 133 and +4.0% in E-Com business 117 +13.7% Adj. net sales1 increase despite lower footfall
Slide 21: Central Eastern Europe Q3 2022/23
CENT R AL EAST ER N EU R O PE Q 3 2022/ 23 HIGHEST SALES GROWTH AND ONGOING MARGIN UPLIFT ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +17.5% (+12.3% lfl) growth in Stores 131 and +14.3% in E-Com +16.9% 112 Adj. net sales increase from significantly higher footfall in hi
Slide 22: Online Pure Players Q3 2022/23
O NL INE PU R E PL AY ER S Q 3 2022/ 23 STRONG PROGRESS FOR THE ONLINE BEAUTY BUSINESSES ADJ. NET SALES ADJ. EBITDA1 Newly established segment following in m€ in m€ the internal management structure, 58 58 -0.7% businesses formerly included in DACHNL, now defined as an independent segment comprising
Slide 23: Omnichannel Growth Fueled by Both Channels
OMNICHANNEL GROWTH FUELED BY BOTH CHANNELS Q3 2022/23 GROUP1 STORES1 E-COM in m€ in m€ in m€ Significantly increased E-Com continues to grow for footfall (+~15%) and number the 4th consecutive quarter 910 of customers while increasing profitability 830 +9.7% Higher basket sizes Increased basket size
Slide 24: P&L – KPIs Significantly Improved
P&L – KPIS SIG NIF ICANT LY IM PR O V ED Q3 2022/23 in m€ Q3 2021/22 Q3 2022/23 ∆% Net sales 850.1 910.5 7.1% adj. Net sales 1 829.7 910.4 9.7% Cost of raw materials, consumables and -473.5 -486.2 -2.7% Gross profit margin improved as supplies and merchandise net sales grew faster than COGS Gross pr
Slide 25: DIO Improved; Omnichannel Investments
DIO IM PR O V ED; O M NICH ANNEL INV EST M ENT S AS OF 30 JUNE 2023 in m€ NET WORKING CAPITAL CAPEX 251 183 +36.8% 26 21 +23.7% 5.1% 6.2% NWC as % of NES1 30.06.22 30.06.23 Q3 2021/22 Q3 2022/23 Higher inventory from improving supply chain situation and Capex focus in Q3 on Stores higher receivables
Slide 26: Free Cash Flow Improved
F R EE CASH F L O W IM PR O V ED 9M YTD 2022/23 in m€ 589 -73 -121 402 -25 32 -43 359 359 0 Adj EBITDA CAPEX 1 Working Capital ² TAX Others ³ Adj FCF EBITDA Free Cash Flow M&A FCF POST M&A Adjustments (pre M&A) (Cash effect) 4 9M 2021/22 491 -57 10 -38 -4 402 -68 334 -24 310 1 Excl. M&A-related inve
Slide 27: Significant Reduction in Leverage Ratio
SIG NIF ICANT R EDU CT IO N IN L EV ER AG E R AT IO AS OF 30 JUNE 2023; INCLUDING IFRS 16 EFFECTS CASH BALANCE in m€ 430 -6.8% 401 €8.5m used or 159 reserved for (RCF) 161 rental guarantees (RCF) (PY: €10.7m) TOTAL NET LEVERAGE1 ADJUSTED EBITDA (LTM)2 in m€ 5,5 4,8 701 586 271 239 (cash) (cash) June
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
S U M M AR Y DOUGLAS continued its fiscal year growth with all segments, channels and categories contributing to overall adj. net sales growth of 9.7% to €910.4m Omnichannel model demonstrated again its natural fit for DOUGLAS with positive development of both adj. store sales (+12.1%) and E-Commerc
Slide 30: Appendix
¥ » i — DOUGLAS
Slide 31: Adjustments to EBITDA
ADJU ST M ENT S T O EBIT DA Q3 2022/23 & 9M 2022/23 Q3 2021/22 Q3 2022/23 Q3 2021/22 YTD Q3 2022/23 YTD in m€ Reported EBITDA 117.3 139.3 422.7 546.0 Q3: Mainly for OWAC Consulting fees1 8.9 3.2 19.3 11.5 Q3: Mainly for Restructuring costs2 14.7 0.3 35.9 3.1 staff-related PPA -0.1 -0.1 -0.3 -0.3 res
Slide 32: Selected Segmental KPIs Q3 2022/23
SEL ECT ED SEG M ENT AL KPIS Q3 2022/23 in m€ REPORTED EBITDA CAPEX Q3 2021/22 Q3 2022/23 Q3 2021/22 Q3 2022/23 DACHNL 95.5 84.6 DACHNL 2.9 8.3 France 37.2 32.4 France 3.2 4.1 Southern Europe 10.3 22.9 Southern Europe 2.2 2.3 Central Eastern Europe 27.0 35.7 Central Eastern Europe 3.4 5.1 OPP -13.0
Slide 33: Deep Dive into LFL Net Sales Development
DEEP DIV E INT O L F L NET SAL ES DEV EL O PM ENT QUARTERLY OVERVIEW Q3 2021/22 Q4 2021/22 Q1 2022/23 Q2 2022/23 Q3 2022/23 DACHNL 42.8% 13.8% 15.8% 25.2% 10.0% France 27.7% 3.3% 3.3% 9.2% 4.3% Southern Europe 24.9% 12.0% 15.1% 17.2% 12.5% Central Eastern Europe 42.6% 13.2% 23.9% 27.6% 12.7% Online
Slide 34: Selected Segmental KPIs 9M 2022/23
SEL ECT ED SEG M ENT AL KPIS 9M 2022/23 in m€ REPORTED EBITDA CAPEX Q3 2021/22 YTD Q3 2022/23 YTD Q3 2021/22 YTD Q3 2022/23 YTD DACHNL 251.4 300.4 DACHNL 7.3 15.5 France 152.9 145.8 France 7.9 8.5 Southern Europe 45.0 96.5 Southern Europe 5.2 5.7 Central Eastern Europe 91.0 121.6 Central Eastern Eur
Slide 35: Net Working Capital
NET WO R KING CAPIT AL AS OF 30 JUNE 2023 257 251 in m€ 183 115 68 NWC as % of 5.1% 3.1% 1.8% 6.5% 6.2% X% LTM net sales 30.06.2022 30.09.2022 31.12.2022 31.03.2023 30.06.2023 30.06.2022 30.09.2022 31.12.2022 31.03.2023 30.06.2023 ~13% more inventory from improving supply chain Inventory 652.0 719.4
Slide 36: DACHNL 9M 2022/23
DACH NL 9M 2022/ 23 ONGOING STRONG STORE TRAFFIC DRIVES NET SALES GROWTH ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +21.1% (+22.8% lfl) growth in Store 1.459 business and +8.1% E-Com sales 1.263 +15.6% Adj. net sales increase in Stores due to significantly higher footf
Slide 37: France 9M 2022/23
F R ANCE 9M 2022/ 23 BETTER SALES DEVELOPMENT AND SUSTAINED HIGH MARGIN ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +4.2% (+5.8% lfl) growth in Store 629 652 business, E-Com grew by 2.1% +3.8% Adj. net sales increase at higher footfall and larger baskets in Stores and m
Slide 38: Southern Europe 9M 2022/23
SO U T H ER N EU R O PE 9M 2022/ 23 SALES INCREASE DESPITE STORE CLOSURES, MARGIN IMPROVED AGAIN ADJ. NET SALES1 ADJ. EBITDA2 Adj. net sales1 increase driven by in m€ in m€ +5.6% (18.0% lfl) growth in Stores 473 449 +5.4% despite closures in Spain and +4.3% in E-Com business Adj. net sales1 increase
Slide 39: Central Eastern Europe 9M 2022/23
CENT R AL EAST ER N EU R O PE 9M 2022/ 23 AGAIN, HIGHEST SALES AND MARGIN GROWTH ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +24.6% (22.9% lfl) growth in Stores 449 and +20.9% in E-Com 362 +23.9% Adj. net sales increase from significantly higher footfall in Stores with
Slide 40: Online Pure Players 9M 2022/23
O NL INE PU R E PL AY ER S 9M 2022/ 23 SIGNIFICANT SALES INCREASE AND STRICT COST DISCIPLINE ADJ. NET SALES ADJ. EBITDA1 Newly established segment following in m€ in m€ the internal management structure, 176 businesses formerly included in DACHNL, since Q3 2022/23 defined +26.7% 139 as an independen
Slide 41: Omnichannel Growth Fueled by Both Channels 9M
OMNICHANNEL GROWTH FUELED BY BOTH CHANNELS 9M 2022/23 GROUP1 STORES1 E-COM in m€ in m€ in m€ Strongly increased footfall (+~26%) Stable number of visitors with and number of customers stable conversion rate 3.208 Larger basket sizes Increased basket sizes 2.840 +12.9% Higher net sales per item Stron
Slide 42: P&L – KPIs Further Improved 9M 2022/23
P&L – KPIS F U R T H ER IM PR O V ED 9M 2022/23 in m€ Q3 2021/22 YTD Q3 2022/23 YTD ∆% Net sales 2,865.2 3,210.8 12.1% adj. Net sales 1 2,840.2 3,207.9 12.9% Cost of raw materials, -1,611.3 -1,760.2 -9.2% consumables and supplies and merchandise Gross profit 1,254.0 1,450.6 15.7% Gross profit margin
Slide 43: Cash Flow Statement 9M 2022/23
CASH F L O W ST AT EM ENT 9M 2022/23 In m€ Q3 2021/22 YTD Q3 2022/23 YTD Net cash flow from operating activities 386.6 430.2 Decreased mainly Net cash flow from investing activities -76.5 -71.3 due to acquisition activities in prior year Free cash flow 310.2 358.9 Net cash flow from financing activi
Slide 44: Cash and Financial Debt Structure
CASH AND F INANCIAL DEBT ST R U CT U R E AS OF 30 JUNE 2023 in m€ m€ x Adj. EBITDA2 Maturity Pricing Cash and cash equivalents 239 €8.5m 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 €10.7m) (99% OID) Senior Secured Notes (B3/
Slide 45: Store Network Across Europe
ST O R E NET WO R K ACR O SS EU R O PE AS OF 30 JUNE 2023 NUMBER OF STORES DEVELOPMENT 1.907 1.845 30 June 2022 (m€) – 30 June 2023 133 132 Store openings 33 1.774 1.713 Store closures -95 Total -62 June 22 June 23 Store openings: 5 stores in DACHNL (DE, NL), 1 in France, 3 in South Europe (IT) and
Slide 46: IFRS 16 Effects on P&L – Q3 2022/23
IF R S 16 EF F ECT S O N P&L – Q 3 2022/ 23 in m€ pre IFRS 16 post IFRS 16 Delta - pro forma - Net sales 910.5 910.5 0.0 Gross profit 424.2 424.2 0.0 Other expenses decreased by €72.1m as lease expenses Other income 61.7 64.2 2.5 (mainly for stores, warehouses Personnel expenses -160.3 -160.3 0.0 an
Slide 47: IFRS 16 Effects on P&L – 9M 2022/23
IF R S 16 EF F ECT S O N P&L – 9M 2022/ 23 in m€ pre IFRS 16 post IFRS 16 Delta - pro forma - Net sales 3,210.8 3,210.8 0.0 Gross profit 1,450.6 1,450.6 0.0 Other income 227.8 233.0 5.2 Personnel expenses -482.7 -482.7 0.0 Other expenses -867.9 -654.8 213.1 EBITDA 327.7 546.0 218.3 Adj. to EBITDA 43
Slide 48: Notice to Recipients
NO T I CE T O R ECIPIENT 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 othe
Slide 49: Thank You
oD LOUGLAS Ir