Slide 1: 4Q23 Results Presentation
4Q23 RESULTS PRESENTATION WARSAW, 27 MARCH 2024 4Q23 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 4Q23 PRESENTATION 3
Slide 4: Mohito's debut in Italy
Mohito’s debut in Italy Shopping centre: Mohito is the third brand Valecenter Marcon, near Venice, present on Italian market Italy after Sinsay (debut in December 2022) Opening: March 2024 and Reserved (debut Floorspace: 446 m2 in September 2023). April 2024: second Mohito store to be opened in the
Slide 5: Bosnia and Herzegovina – new online market
Bosnia and Herzegovina – new online market Romania: Croatia: 7th market in Southern Europe with online presence (launch in December 2023). All our brands are now available online. Bulgaria: Revenues for the first full month came in at PLN 1.3m. Currently, online accounts for more than 10% of sales.
Slide 6: LPP Logistics' Distribution Centre in Romania
LPP Logistics’ Distribution Centre in Romania Foreign Distribution Centre located in Bolintin-Deal (near Bucharest). GOAL ▪ servicing stores in Southern Europe (more than 500 stores in the region at the end of 2023, further ambitious development planned), ▪ supplying Fulfillment Center (Romania) whi
Slide 7: More than 2,200 stores
More than 2,200 24 stores 31 35 30 4 28 1,094 17 7 146 144 No. of 94 As at 31.01.2024 YoY 23 stores 76 27 73 187 39 81 LPP GROUP 2,275 + 313 ↑ 7 75 23 Poland 1,094 + 76 ↑ 4 Abroad 1,181 + 237 ↑ 4 2 2 2 1 2 online + offline online offline 4Q23 PRESENTATION 7
Slide 8: 4Q23 Financial Results
02 4Q23 FINANCIAL RESULTS 4Q23 PRESENTATION 8
Slide 9: Stronger growth in offline than online
Stronger growth in offline than online OFFLINE +15.9% +19.1% 39 +9.3% revenues m2 countries Group revenues 1.1% 28 LFLs countries ONLINE -2.4% 34 revenues countries FY2023 data. 4Q23 PRESENTATION 9
Slide 10: PLN 2bn of Sinsay sales in the quarter
GROUP REVENUES PLN 2bn of Sinsay (PLN m) sales in the quarter 4,340.6 391.3 4,366.8 4,185.0 3,639.4 4,575.4 445.1 4,350.5 207.9 4,840.9 250.9 3,399.3 532.2 272.7 1,241.6 3,034.2 283.9 1,078.9 1,026.7 1,224.6 1,032.4 1,146.7 1,161.8 938.3 988.1 ▪ Group revenues in 4Q23 increased by 15.7% YoY both 3,3
Slide 11: Return to online sales growth
ONLINE SALES Return to online sales (PLN m) growth 1,161.8 988.1 1,224.6 1,032.4 1,146.7 1,078.9 1,026.7 1,241.6 938.3 ▪ High single-digit online sales growth in 4Q23, in line with market trends. ▪ Poland delivered higher growth than foreign markets. Online sales grew by 14.4% due to brands’ recogni
Slide 12: Nearly 2 million m2 of floorspace
SHARE OF FOREIGN SALES IN REVENUES Nearly 2 million m2 (excl. trade agents) of floorspace 5 000.0 4 000.0 53% 53% 52% 52% 53% 54% 55% 55% 53% 55% 55% 3 000.0 2 000.0 ▪ Foreign omnichannel revenues outpaced the Polish 1 000.0 ones in 4Q23 and accounted for 54.9% of Group’s total omnichannel revenues
Slide 13: Gross profit margin improvement
QUARTERLY GROUP GROSS PROFIT MARGIN Gross profit margin improvement 60.5% 55.8% 52.0% 52.5% ▪ Gross profit margin in 4Q23 improved YoY by 2.9 pp. 49.6% 49.6% due to: 51.0% 48.9% 47.9% ▪ sizeably lower collections purchase costs, ▪ more favorable USD/PLN exchange rate, ▪ lower freight costs, 4Q21 1Q2
Slide 14: SG&A costs under control
COST OF OWN STORES/ M2 SG&A costs under (IAS17) control -12,9% r/r -5.2% YoY 193 196 176 166 179 173 171 167 170 59 66 62 57 62 56 52 55 53 ▪ Stable YoY rental costs/ m2 → growing share of Sinsay 66 65 stores with lower rental costs vs. other brands. 58 55 57 55 53 53 56 68 66 ▪ Stable YoY personnel
Slide 15: PLN 1bn EBITDA in the quarter
PLN 1bn EBITDA in the quarter PLN m, IFRS16 4Q22 (before restatement) 4Q22 (after restatement) 4Q23 YoY Revenues 4,185.0 4,185.0 4,840.9 15.7% ▪ Double-digit YoY revenues growth due to new Gross profit margin on 50.0% 49.6% 52.5% 2.9pp. sales openings, positive LFL in stores and higher sales online.
Slide 16: Over PLN 2bn of EBIT generated in 2023
Over PLN 2bn of EBIT generated in 2023 PLN m, IFRS16 2022 (before restatement) 2022 (after restatement) 2023 YoY Revenues 15,926.5 15,926.5 17,406.2 9.3% ▪ Single-digit sales growth YoY due to new store openings. Gross profit margin on 51.1% 50.3% 51.5% 1.2pp. sales ▪ Higher YoY gross margin on sale
Slide 17: Strong operating cash flow in the quarter
WORKING CAPITAL Strong operating cash (PLN m) flow in the quarter 3,353 3,040 3,988 3,164 ▪ Significant improvement in operating cash flow among others due to growth in pre-tax profit and depreciation. 944 810 ▪ YoY improvement of working capital – reduction 4Q22 4Q22 4Q23 4Q23 in inventories and re
Slide 18: Safe net debt level
NET DEBT Safe net debt level (PLN m, IFRS16) 7 000.0 2.1 1.9 6 000.0 1.8 2.0 1.4 1.5 1.2 5 000.0 1.3 ▪ At the end of 4Q23 net debt under IFRS16 amounted 1.2 1.5 4 000.0 1.0 to PLN 3.7bn due to: 3 000.0 1.0 ▪ lower YoY use of long-term bank loans at a level 2 000.0 4,299 4,463 4,849 4,190 4,005 4,204
Slide 19: Achievement of 2023 targets
Achievement of 2023 targets Single-digit revenues growth. Higher offline, PLN 17.4bn stable online sales. Gross margin Gross margin improved to 51.5% (+1.2pp. YoY). on sales 51-52% Operating Operating profitability at 13.1%. margin 12%+ PLN 1.1bn capex, of which PLN 1.1bn capex PLN 0.9bn for store d
Slide 20: 2024+ Outlook
03 2024 + outlook 4Q23 PRESENTATION 20
Slide 21: Spring/Summer 2024 collection very well received
Spring/ Summer 2024 collection very well received Reserved, Cropp, House, Sinsay Mohito +26% YoY increase +5% YoY increase in comparable stores (LFL) in comparable stores (LFL) +54% YoY growth +4% YoY growth in online sales in online sales Goal: double-digit revenue growth Preliminary figures for th
Slide 22: 2024 target: growth in revenues
2024 target: growth in revenues Offline sales - growth due to higher Floorspace PLN 1.5bn capex, +25% YoY and positive Gross profit margin including PLN 1.2bn LFLs. on sales 52-53%. for stores. Online sales – Maintaining cost Safe debt level double-digit YoY growth. effectiveness (SG&A/ (no corporat
Slide 23: 2024+ opportunities and risks
2024+ opportunities and risks OPPORTUNITIES RISKS ▪ Social schemes in Poland, 800+, increase in minimum ▪ Increased competition wage. in the value-for-money ▪ Development on new markets segment. (Southern Europe). ▪ Geopolitical instability. ▪ Mobile apps development ▪ Increase in minimum wage. in a
Slide 24: Dividend payout on record level
Dividend payout on record level ▪ LPP’s Management Board will propose during Annual General Meeting a dividend of PLN 610 per share. ▪ As per LPP’s Management Board decision, interim dividend of PLN 285 per share will be distributed. ▪ Date of record for interim dividend is 23 April 2024 while propo
Slide 25: Store chain development plan
Store chain development plan 4Q23 PRESENTATION
Slide 26: Sinsay driving revenue growth
OMNICHANNEL SALES Sinsay driving revenue (PLN m) growth 1,250 16,026 5,713 9,063 ▪ 2019: rollout of new Sinsay concept (larger stores, offer supplemented by collections for kids and men and home accessories). 2019 Sinsay Reserved Cropp House Mohito 2023 ▪ Enhanced growth opportunity as Sinsay offer
Slide 27: Sinsay development is accelerating
STORE COUNT GROWTH Sinsay development 2023 2024 2025 2026 2026 target is accelerating Sinsay 978 +620 +850 +800 3,248 ▪ Sinsay expansion driven by openings in smaller Reserved, Cropp, 1,297 +80 +80 +50 1,507 cities, mainly in retail parks. House, Mohito ▪ Southern and Central-Eastern European market
Slide 28: Geographical breakdown of 2024 development plan
Geographical breakdown of 2024 development plan Poland +135 CEE + 120 Baltics + 40 SEE + 200 WE + 40 Eastern Europe and ME + 165 4Q23 PRESENTATION 28
Slide 29: Store openings going according to plan in 2024
Store openings going according to plan in 2024 1Q23 2Q23 3Q23 4Q23 241 Sinsay 49 54 67 71 stores 1Q23 2Q23 3Q23 4Q23 620 Sinsay 2024 70 130 200 220 stores +80 STORES of RESERVED, CROPP, HOUSE, MOHITO Openings to itensify in the second half of the year. Majority of end 2024 floorspace already secured
Slide 30: Logistics network floorspace to grow almost 50% in 2024-25
Logistics network floorspace to grow almost 50% in 2024-25 LOGISTICS NETWORK FLOORSPACE ths. m2 31.01.2024 New m2 31.01.2026 Growth % ▪ Expansion works commenced in Brześć Kujawski to increase DC capacity by further 85 ths m2. LPP GROUP 478.0 225.0 703.0 47% Distribution Center 270.0 85.0 355.0 31%
Slide 31: LPP's global store count to double over next 3 years
LPP’s global store count to double over next 3 years. Opportunity to double sales vs. 2023. 4Q23 PRESENTATION 31
Slide 32: Sinsay's evolution
Sinsay’s evolution 4Q23 PRESENTATION 32
Slide 33: Sinsay 2013-2019
Sinsay 2013-2019 „I’m good but I’m not an angel” Two teenage friends ca 250 m2 4Q23 PRESENTATION 33
Slide 34: Sinsay 2019+
Sinsay 2019+ New departments: KIDS, MEN, HOME 4Q23 PRESENTATION 34
Slide 35: Sinsay 2019+
Sinsay 2019+ „Great fashion, great prices” for everyone Store size range: 550 m2 –1,200 m2. 4Q23 PRESENTATION 35
Slide 36: Sinsay e-commerce
SINSAY – ONLINE SALES (PLN m) Sinsay e-commerce 2 500 +38% stable YoY YoY 2 000 +141% YoY 1 500 +402% 1 000 YoY ▪ Stable YoY sales in 2023. At the same 500 +115% +70% time, double-digit profitability increase in YoY YoY - e-commerce. 2017 2018 2019 2020 2021 2022 2023 ▪ Beginning of 2024 brought bac
Slide 37: Sinsay mobile app's share in online sales
Sinsay mobile app’s share in online sales March 2024 100% 90% Poland 77% 80% Romania 76% 70% 60% Hungary 69% 50% Croatia 67% 40% Slovakia 62% 30% 20% Bulgaria 61% 10% Czech Republic 55% 0% 03.2022 09.2022 03.2023 09.2023 02.2024 App sales Web sales App sales Web sales Sinsay app users shop twice as
Slide 38: Sinsay mobile app
Sinsay mobile app 4Q23 PRESENTATION 38
Slide 39: Q&A
04 Q&A 4Q23 PRESENTATION 39
Slide 40: Back-up
05 Back-up 4Q23 PRESENTATION 40
Slide 41: Repayment of receivables for divested Russian business
Repayment of receivables for divested Russian business 1. Sale of stores– transaction price US$ 135.5m Repayment schedule PLN m US$ m % 30.12.2023 61.0 13.0 10% paid in Dec.2023 30.12.2024 120.0 27.1 20% Outstanding 30.12.2025 210.0 47.3 35% amount: 30.12.2026 210.0 47.3 35% PLN 540m TOTAL 601.0 135
Slide 42: Divested Russian business receivables on balance sheet
Divested Russian business receivables on balance sheet Statement of financial position 31.01.2023 31.01.2024 in PLN m PLN 319m receivables from sale of stores. Transaction price set at PLN 601m Non-current assets 7,351.8 7,973.4 (US$ 135.5m), half of which was written-down in 2022. Balance sheet val
Slide 43: Economics of activities with trade agents
Economics of activities with trade agents PLN m 1Q22 2Q22 3Q22 4Q22 2022 1Q23 2Q23 3Q23 4Q23 2023 Revenues 391.3 532.2 272.7 1,196.2 283.9 445.1 207.9 250.9 1,187.8 Gross profit on sales 196.1 30.9 46.6 273.5 62.5 98.6 45.7 42.2 248.9 Gross profit margin on sales 50.1% 5.8% 17.1% 22.9% 22.0% 22.1% 2
Slide 44: Restatement of 4Q21 financial statement
Restatement of 4Q21 financial statement 4Q21 Data 2021 4Q21 (after PLN m, IFRS16 1Q21 2Q21 3Q21 (before (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 operating costs Gross p
Slide 45: Restatement of 2Q22 financial statement
Restatement of 2Q22 financial statement 1H22 2Q22 (before Data 2Q22 (after PLN m, IFRS16 1Q22 (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 Other operating
Slide 46: Restatement of 3Q22 financial statement
Restatement of 3Q22 financial statement 9M22 9M22 3Q22 (before Data 3Q22 (after PLN m, IFRS16 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 202.3m write-off
Slide 47: Restatement of 4Q22 financial statement
Restatement of 4Q22 financial statement 2022 4Q22 (before Data 4Q22 (after 2022 Data PLN m, IFRS16 (after restatement) restatement restatement) restatement restatement) Revenues 4,185.0 4,185.0 15,926.5 COGS 2,093.0 17.1 2,110.1 117.9 7,913.4 Other operating income Gross profit on sales 2,091.9 -17.
Slide 48: 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, Northern Macedonia, Greece), WE (Germany, United Kingdom, Other
Slide 49: 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 4Q23 PRESENTATION discoverlpp company/lpp-sa discoverlpp discoverlpp