Slide 1: 1Q21/22 Results Presentation
1Q21/22 1Q21/22 RESULTS PRESENTATION GDAŃSK, JUNE 24, 2021 GLOBAL ASPIRATIONS
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) was prepared by LPP SA (the “Company”) with a 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 prospe
Slide 3: 1Q21/22 financial results
1Q21/22 3 01 GLOBAL ASPIRATIONS 1Q21/22 financial results
Slide 4: Impact of pandemics on 1Q20/21 and 1Q21/22
Impact of pandemics on 1Q20/21 and 1Q21/22 2020 2021 Growing uncertainty about epidemiological situation in Europe, delays Shopping malls open all month in the 1Q21/22 February in supplies from China, revenue dynamics country, longer YoY restrictions in countries slowing down. where LPP has traditio
Slide 5: Longer YoY restrictions in 1Q21/22
Longer YoY restrictions in 1Q21/22 1Q21/22 5 GLOBAL ASPIRATIONS
Slide 6: Towards omnichannel
Towards omnichannel OFFLINE ONLINE 1Q21/22 1,917 30 stores countries 6 +21.6% +157.3% m2 revenues +74.5% LFLs 25 38 +99.4% countries GROUP COUNTRIES REVENUES GLOBAL ASPIRATIONS
Slide 7: LPP's presence in countries
LPP’s presence in 38 countries 5 32 20 422 22 10 1 1Q21/22 881 As at No. of Open as at YoY 19 30.04.2021 stores 30.04.2021 119 86 7 60 15 LPP GROUP 1,917 +186 48% 32 30 82 10 Poland 881 + 29 12% 6 31 26 Europe 462 +49 66% CIS 566 +108 89% ME 8 +0 100% 3 1 1 2 1 GLOBAL ASPIRATIONS online + offline on
Slide 8: LFLs affected by lockdowns
LFLs affected by lockdowns LFL DYNAMICS 1Q21/22 LFL COMPARISON (local currencies) (local currencies) 74.5% 74.5% 1Q21/22 19.7% 8.5% 0.9% 5.9% 0.7% 8 -8.3% -36.5% -49.6% -41.8% -57.3% LFLs vs 1Q20/21 LFLs vs 1Q19/20 LFLs open stores vs 1Q19/20 2Q19/20 3Q19/20 4Q19/20 1Q20/21 2Q20/21 3Q20/21 4Q20/21 1
Slide 9: Triple-digit e-commerce growths
Triple-digit e-commerce growths ONLINE SALES ONLINE BY REGIONS (PLN m) (PLN m) PLN 988.3m 988.3 140.4 778.1 1Q21/22 621.2 PLN 384.0m 443.3 445.9 41.8 +157.3% 9 390.7 384.0 276.3 137.6 239.5 404.6 174.2 204.6 1Q20/21 1Q21/22 1Q19/20 2Q19/20 3Q19/20 4Q19/20 1Q20/21 2Q20/21 3Q20/21 4Q20/21 1Q21/22 (3M)
Slide 10: Foreign revenues exceed Polish ones
Foreign revenues exceed Polish ones REVENUES BY REGIONS IN 1Q21/22 1Q21/22 FLOORSPACE (PLN m) (by regions) ths m2 1Q20/21 1Q21/22 YoY Poland 910 +70% YoY LPP GROUP 1.242.7 1.511.7 21.6% 1Q21/22 Poland 521.7 584.4 12.0% CIS 739 +153% YoY 10 CIS 336.8 476.5 41.5% Europe 695 +100% YoY Europe 375.9 442.
Slide 11: Doubling of Group revenues
Doubling of Group revenues GROUP REVENUES OMNICHANNEL REVENUES (PLN m) 2 724.2 PLN m 1Q20/21 1Q21/22 YoY 2 445.7 2 344.8 2 332.0 2 350.3 390.7 2 129.3 LPP GROUP 1,178.6 2,350.3 99.4% 2 094.4 1 820.7 276.3 239.5 445.9 Reserved 554.2 956.4 72.6% 621.2 988.3 1Q21/22 174.2 778.1 1 178.6 Cropp 134.5 251.
Slide 12: High and growing gross profit margin
High and growing gross profit margin QUARTERLY GROUP GROSS PROFIT MARGIN PLN/US$ COVID-19 58.8% 56.6% 55.5% 54.9% 4.0 4.0 1Q21/22 51.9% 3.9 53.4% 3.9 3.8 12 47.6% 3.8 3.8 3.8 49.3% 48.2% 3.7 1Q19/20 2Q19/20 3Q19/20 4Q19/20 1Q20/21 2Q20/21 3Q20/21 4Q20/21 1Q21/22 1Q19/20 2Q19/20 3Q19/20 4Q19/20 1Q20/
Slide 13: Growth in costs below revenue dynamics
Growth in costs below revenue dynamics COSTS OF OWN STORES/ M2 SG&A/ M2 (IAS17) (IFRS16) -5% YoY 23% YoY 201 204 201 195 148 160 59 59 61 56 150 144 141 1Q21/22 44 51 55 48 49 47 53 51 53 13 38 38 286 289 297 285 40 37 36 257 262 275 245 223 89 90 89 86 60 69 72 57 58 1Q19/20 2Q19/20 3Q19/20 4Q19/20
Slide 14: Sizeable YoY earnings improvement
Sizeable YoY earnings improvement PLN m. IFRS16 1Q20/21 1Q21/22 YoY • Sales doubled YoY despite longer YoY restrictions in relation to Revenues 1,178.6 2,350.3 99.4% traditional stores. Dynamic online sales development. 1Q21/22 Gross profit margin on sales 48.2% 55.5% 7.4 pp. • Significant YoY incre
Slide 15: Trade liabilities finance inventory
Trade liabilities finance inventory INVENTORY WORKING CAPITAL (PLN m) -PLN 873m 2,500 1,743 1,490 2,000 -PLN 174m 1,570 1,572 1,614 1,455 1,400 2,000 1,266 1,600 204 1,223 156 1,500 2,239 1,200 1Q21/22 2,074 1,992 1,642 1,921 1,643 3,112 1,000 800 1,959 1,857 15 1,518 1,992 2,166 2,239 500 400 0 0 1
Slide 16: Net cash of the balance sheet (IAS17)
Net cash of the balance sheet (IAS17) NET DEBT/ (NET CASH) CAPEX (PLN m, IAS17) (PLN m) 1Q21/22: 1Q20/21: PLN 252 m 1Q19/20: PLN 192 m PLN 233 m 53.3 -272.1 -280.5 66.7 33.3 94.7 70.0 1Q21/22 -277.3 46.1 33.8 80.7 16 69.8 238.9 199.7 195.6 181.5 -561.0 167.5 145.6 145.4 -542.3 -666.3 106.7 91.8 -736
Slide 17: Executive summary 1Q21/22
Executive summary 1Q21/22 1 Growing offline sales despite the pandemic. 1Q21/22 2 Triple-digit online sales growth. 17 3 Operating margin improvement. 4 Trade liabilities exceed inventory. 5 Net cash (IAS17). GLOBAL ASPIRATIONS
Slide 18: Key corporate events
1Q21/22 18 02 GLOBAL ASPIRATIONS Key corporate events
Slide 19: Key corporate events
Key corporate events 1Q21/22 19 04.21 05.21 05.21 06.21 WE CONNECT GENERATIONS PARTNERSHIP WITH TANGIBLE SUCCESS RESERVED APP CANOPY OF PACKAGING Cooperation on collections with Launch of Reserved brand generation Z. Continuation of activities STANDARISATION application. More apps in the field of en
Slide 20: Cooperation with Gen Z
RE.DESIGN - THE FIRST Reserved invited twelve creative representatives RESERVED COLLECTION of generation Z to create the collection. They took CREATED IN an active part in every stage of creating the collection COOPERATION WITH and finally became its ambassadors. GENERATION Z IN POLAND RE.DESIGN enc
Slide 21: Consistent efforts towards sustainable development
Consistent efforts towards sustainable development joining ZDHC (Zero Discharge of Hazardous Chemicals) 2020 and joining the Polish Plastics Pact new CSR strategy For People For Our Planet 2019 joining the New Plastics Economy Global Commitment 1Q21/22 21 second ACCORD agreement 2018 start
Slide 22: We act to protect the forests
We act to protect the forests LPP, as the first Polish company, started cooperation with Canopy - an organization whose goal is to develop business 1Q21/22 practices among entrepreneurs for the sustainable use of forest resources in the world by implementing changes 22 in the area of purchased paper
Slide 23: Towards circular economy: carton standardization
CARTON STANDARDIZATION - BENEFITS: • more effective use of collective packaging in which As part of the Control Tower the ordered goods are sent to LPP’s distribution project - a platform that improves supply chain center, management. LPP implements • recovery of collective cartons reaching LPP cart
Slide 24: Reserved sales app
Reserved sales app Silent go of Reserved sales 1Q21/22 application at the beginning of June 2021. 24 Polish version. More languages will be added in the coming months. Applications of other brands are under GLOBAL ASPIRATIONS preparation.
Slide 25: 2021/22+ outlook
1Q21/22 25 03 GLOBAL ASPIRATIONS 2021/22+ outlook
Slide 26: Dynamic online growth continues
ONLINE SALES (PLN M) 2,800+ 2,229.3 1,080.8 712.1 360.8 1Q21/22 173.1 64.8 79.3 26 2014 2015 2016 2017 2018 2019/20 2020/21 2021/22 Dynamic online CEL TARGET growth continues 2021/22 target: Double-digit growth of e-commerce revenues.
Slide 27: Acceleration of growth in 2021/22
Acceleration of growth in 2021/22 BY REGIONS Floorspace I.2022 I.2022 2 I.2021 YoY (ths m ) former target target Poland 566.9 618.0 637.4 12% Continuation of floorspace growths in 2021/22: +25% YoY. End-2021/22 Reserved traditional stores should be in 26 countries CIS 426.1 569.1 600.1 41% 1Q21/
Slide 28: Development in retail parks
1Q21/22 ON-LINE 28 OFF-LINE Fast online expansion boosted Fast offline growth: by omnichannel, retail parks and selective offline smaller towns, online Development in retail development, expansion boosted shopping malls, big by omnichannel cities parks
Slide 29: 2021/22 targets
A new model of customer behavior after COVID-19. Another wave of infections in 2H21. Strong US$ and EUR exchange rates, weak RUB. Rising transport costs and delivery difficulties (limited supply of ships). 1Q21/22 Challenges 29 Continuation of double-digit floorspace growth. Dynamic onli
Slide 30: A dividend company
A dividend company Return to dividend payments after one year since payment suspension: 1Q21/22 covering net loss from profits in upcoming years 30 payment of a dividend in the amount of PLN 450 per share by transferring funds from retained earnings. The Management Board recommended setting the
Slide 31: Q&A
GLOBAL ASPIRATIONS 31 1Q21/22 Q&A 04
Slide 32: Back-up
1Q21/22 32 05 GLOBAL ASPIRATIONS Back-up
Slide 33: Network development
Network development Floorspace (ths m2) 31.01.2019 30.04.2019 31.07.2019 31.10.2019 31.01.2020 30.04.2020 31.07.2020 31.10.2020 31.01.2021 30.04.2021 Reserved 605.0 616.6 634.3 655.0 664.8 657.1 669.7 667.8 674.7 683.1 Poland 268.7 263.5 267.6 272.0 270.3 262.9 262.5 264.8 267.7 266.1 Europe 188.0 2
Slide 34: Network development details at the end of I.2022
Network development details at the end of I.2022 Floorspace (tys m2) 31.01.2021 31.01.2022 Nom. growth Growth YoY Number of stores 31.01.2021 31.01.2022 Nom. growth Growth YoY Reserved 674.7 714.6 40.0 6% Reserved 440 450 10 2% Poland 267.7 272.8 5.2 2% Poland 189 189 0 0% Europe 233.2 243.4 10.2 4%
Slide 35: Changes in group 1Q21/22 floorspace
Changes in group 1Q21/22 floorspace CHANGE IN FLOORSPACE BY BRANDS CHANGE IN FLOORSPACE BY REGIONS (ths. m2) (ths. m2) 1,511.7 1,511.7 +50.4 +56.9 1,435.4 +17.5 +9.4 1,435.4 +8.4 +4.8 +5.1 +1.2 0.0 -1.0 1Q21/22 1 511.7 35 +76.3 ths m2 +76.3 ths m2 4Q20/21 Reserved Cropp House Mohito Sinsay Outlets 1
Slide 36: Geographical revenue split in 1Q21/22
TOP 5 COUNTRIES BY REVENUES IN 1Q21/22 PLN m 1Q20/21 1Q21/22 YoY (PLN m) LPP GROUP 1,178.6 2,350.3 99.4% Poland 910 Reserved PL 232.2 361.7 55.8% Russia 535 Reserved EX 322.0 594.7 84.7% Ukraine 176 Cropp PL 52.5 86.4 64.4% 1Q21/22 Cropp EX 82.0 165.3 101.6% Romania 164 House PL 64.4 97.5 51.5% 36 S
Slide 37: Revenue and COGS split
1Q21/22 REVENUES BY REGIONS (PLN m) ME 0% CIS 1Q21/22 31% Poland 39% 37 Europe 30% PURCHASES BY REGIONS IN 1Q21/22 (PLN m) Neighbouring countries China 12% 25% Revenue and Far East 63% COGS split
Slide 38: Costs of stores and HQs & e-commerce
Costs of stores and HQs & e-commerce SG&A COSTS SG&A COSTS (PLN m, IFRS16) (PLN m, IFRS16) 1,201 816 1,201 913 1,020 1,040 1,036 1,029 964 967 816 583 +109% YoY 324 322 396 583 271 279 423 1Q21/22 394 279 279 38 642 685 695 717 640 +15 YoY 537 573 606 618 537 618 1Q19/20 2Q19/20 3Q19/20 4Q19/20 1Q20
Slide 39: IFRS16 impact summary
IFRS16 impact summary 1Q20/21 1Q21/22 PLN m YoY IAS17 IAS17 EBITDA PLN 139.7m additional amortisation Revenues 1,178.6 2,350.3 99.4% of right of use asset. 1Q21/22 Gross profit on sales 48.2% 55.5% 7.4pp. 1Q21/22 39 SG&A costs 813.9 1,191.6 46.4% EBIT -259.9 94.2 N/M 45% rentals under IFRS16 EBIT (P
Slide 40: FX differences details
FX differences details 1Q20/21 1Q21/22 1Q21/22 40 PLN 120.3m losses PLN 10.4m losses on FX differences, on FX differences, including including PLN 18.6m losses on rubble and hryvna, PLN 5.9m gains on rubble and hryvna, PLN 11.8m losses on US$, PLN 9.8m losses on US$, PLN 5.3m gains on other currenci
Slide 41: Historical quarterly results
Historical quarterly results 4Q19/20 2019/20 4Q20/21 2020/21 3Q19/20 3Q20/21 1Q21/22 1Q19/20 2Q19/20 IFRS16 IFRS16 1Q20/21 2Q20/21 IFRS16 IFRS16 IFRS16 IFRS16 IFRS16 IFRS16 IFRS16 (November (February IFRS16 IFRS16 (November (February PLN m (August- (August- (February (February- (May–July 2019- 2019
Slide 42: Cash flows
Cash flows CASH GENERATION IN 1Q21/22 1Q21/22 CASH FLOWS (PLN m) (PLN m, IFRS16) +257 +68 623 +49 404 -53 236 -252 -50 -54 1Q21/22 -26 -104 1,278 1,243 -206 -224 42 -283 1Q20/21 1Q21/22 Operating CF Investing CF Financing CF Total CF Operating cash flow significant YoY increase due to higher lev
Slide 43: Strong balance sheet despite pandemics
Strong balance sheet despite pandemics PLN m 1Q20/21 4Q20/21 1Q21/22 Non-current assets 5,961.1 5,620.6 5,783.1 • IFRS16: right-of-use asset and lease finance liability. fixed assets 2,379.7 2,439.8 2,573.4 • YoY increase in fixed assets due to network development and intangibles (incl. goodwill) 41
Slide 44: Brands' summary
Brands’ summary WE FOCUS ON MAINSTREAM PRICES A brand that combines 1Q21/22 An anchor brand with A streetwear brand Clothes for everyday comfort and elegance for BRAND DESCRIPTION a broad customer base inspired by hip-hop and Optimistic fashion brand inspirations and original business and informal o
Slide 45: Glossary
Poland Retail sales in Poland and other sales of LPP SA. CEE Region including: Czech Republic, Slovakia, Hungary. Baltic Region including: Lithuania, Latvia, Estonia. CIS Region including: Russia, Ukraine, Belarus and from 2018 also Kazakhstan. SEE Region including: Bulgaria, Romania, Croatia, Serbi
Slide 46: Contact
discoverlpp company/lpp-sa discoverlpp discoverlpp Contact GDAŃSK HQs CONTACT FOR INVESTORS CONTACT FOR MEDIA WWW.LPPSA.COM Łąkowa 39/44, 80-769 Gdańsk Email: LPP.investor.relations@lppsa.com Email: media@lppsa.com Tel. +48 58 76 96 900 Email: lpp@lppsa.com