Douglas Ag · XETR:DOU
Douglas — Q2 FY2023/24 Earnings Presentation
46 slides from Douglas's earnings presentation, May 29, 2024
Slide 1: Operational & Financial Results Q2 & H1 FY 2023/24
OPERATIONAL & FINANCIAL RESULTS Q2 & H1 | FY 2023/24 Düsseldorf, 29 May 2024
Slide 2: Today's Speakers
TODAY‘S SPEAKERS SANDER VAN DER LAAN MARK LANGER CEO DOUGLAS GROUP CFO DOUGLAS GROUP 2
Slide 3: Agenda
AGENDA 01 BUSINESS HIGHLIGHTS 5 02 Q2 FINANCIALS 11 03 STRATEGY UPDATE 23 04 WRAP UP & Q&A 29 3
Slide 4: Q2 Successes
Q2 SUCCESSES STRONG SALES IMPROVED ACCELERATED DEVELOPMENT PROFITABILITY DELEVERAGING Store sales (net): Adjusted EBITDA: Successful refinancing +11.9% +16.2% to €145.9m following our IPO: E-Com sales (net): Adj. EBITDA margin: leverage ratio +10.7% +0.6ppt to 15.2% now at 2.7x 4
Slide 5: Business Highlights
BUSINESS HIGHLIGHTS
Slide 6: A Listed Company
The DOUGLAS AG is now A LISTED COMPANY in Frankfurt since 21 March 6
Slide 7: Paving the Way for Future Growth
PAVING THE WAY FOR FUTURE GROWTH Comprehensive refinancing and reduction of net debt by around 1.3 billion euros following IPO Leverage ratio down to 2.7x (31 March 2024) − Full redemption of financial indebtedness with, among others, proceeds from the IPO, a capital injection and available liquidit
Slide 8: Beauty Card, Categories and Retail Media Performance
Success Story Beauty Card: +10% SALES (NET) VS. PY, +11% MEMBERS VS. PY All Categories up year-on-year: FRAGRANCES & HAIRCARE GROWING ABOVE AVERAGE Retail Media performs well: +27% SALES (NET) VS. PY despite challenging ad market 8
Slide 9: New EVP Assortment & Purchasing
NEW EVP ASSORTMENT & PURCHASING Stefanie von Albert joined the DOUGLAS Group on 1 April, 2024 − More than 20 years of experience in the beauty industry, majority of which at L‘Oréal France − Most recent position as General Manager E-Commerce, previous positions include General Manager Europe for Kie
Slide 10: Further Increase in Sales and Profitability
FURTHER INCREASE IN SALES AND PROFITABILITY Strong net sales, faster growth in adjusted EBITDA & margin NET SALES ADJUSTED EBITDA1 in m€ 958 in m€ 860 +11.5% 146 126 +16.2% +10.7% lfl 14.6% 15.2% MARGINS Q2 2022/23 Q2 2023/24 Q2 2022/23 Q2 2023/24 − Ongoing strong sales momentum as customers continu
Slide 11: Q2 Financials
Q2 FINANCIALS
Slide 12: DACHNL Q2 2023/24
DACHNL Q2 2023/24 Strong net sales development in both channels NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +12.7% (+12.5% lfl) growth in in m€ in m€ Store business and +18.1% E- 459 Com sales +14.9% 400 − Net sales increase in Stores due to significantly higher footfall as well as hig
Slide 13: France Q2 2023/24
FRANCE Q2 2023/24 Solid net sales growth with improved EBITDA margin NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +5.0% (+4.3% lfl) growth in Store in m€ in m€ business, E-Com grew by +3.3% 168 161 +4.6% − Higher footfall although lower conversion rate, slightly larger basket sizes with
Slide 14: Southern Europe Q2 2023/24
SOUTHERN EUROPE Q2 2023/24 Ongoing net sales growth in stores translated into higher adj. EBITDA NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +8.7% (+9.4% lfl) growth in in m€ in m€ Stores, E-Com business 142 134 +5.9% decreased by -8.1% − Net sales increase in Stores due to significant
Slide 15: Central Eastern Europe Q2 2023/24
CENTRAL EASTERN EUROPE Q2 2023/24 Very strong net sales growth with margin impacted by increased logistic costs NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +20.4% (+17.5% lfl) growth in in m€ in m€ Stores and +19.7% in E-Com 136 +20.2% − Net sales increase from 113 significantly higher
Slide 16: Parfumdreams/Niche Beauty Q2 2023/24
PARFUMDREAMS/NICHE BEAUTY Q2 2023/24 Strong net sales growth for the pure online beauty businesses NET SALES ADJUSTED EBITDA1 − Net sales increase driven by the E-Com business mainly from the in m€ in m€ DACH market in both companies 44 +19.8% − Significantly more orders and 36 higher basket sizes d
Slide 17: Net Sales Growth Fueled by Omnichannel Business
NET SALES GROWTH FUELED BY OMNICHANNEL BUSINESS Net sales Q2 2023/24 GROUP STORES E-COM in m€ in m€ in m€ − Significantly increased footfall and number of − E-Com continues to grow for the 7th consecutive 958 customers quarter 860 +11.5% − Higher basket sizes in most segments − More visits, stable c
Slide 18: P&L – KPIs Significantly Improved
P&L – KPIS SIGNIFICANTLY IMPROVED Q2 2023/24 in m€ Q2 2022/23 Q2 2023/24 ∆% Net sales 859.7 958.4 11.5% Cost of raw materials, consumables and -466.9 -513.9 -10.1% supplies and merchandise Gross profit 392.9 444.6 13.2% Main reasons: less other operating Gross profit margin 45.7% 46.4% 0.7%p income,
Slide 19: DIO Stable; Focus on Store Capex
DIO STABLE; FOCUS ON STORE CAPEX As of 31 March 2024 AVERAGE NET WORKING CAPITAL CAPEX in m€ 239 in m€ 173 +38.0% 26 +34.1% 19 Average NWC as % of net sales1 4.4% 5.5% 31.03.2023 31.03.2024 Q2 2022/23 Q2 2023/24 − Average inventory higher to support strong business − Majority of capital expenditure
Slide 20: Free Cash Flow Improved
FREE CASH FLOW IMPROVED H1 2023/24 in m€ 494 -54 -25 418 -32 35 -54 363 Adj EBITDA CAPEX 1 Working Capital ² TAX Others ³ Adj FCF 5 EBITDA Adjustments FCF POST M&A 5 (Cash effect) 4 H1 2022/23 435 -50 -124 -17 22 266 -28 238 1 Excl. M&A-related investments (Cash Capex); 2 For details on Working Capi
Slide 21: Significant Reduction in Leverage Ratio
SIGNIFICANT REDUCTION IN LEVERAGE RATIO As of 31 March 2024 AVAILABLE LIQUIDITY in m€ 980 161 (RCF) €9.0m used or reserved for rental guarantees (PY: ADJUSTED EBITDA LTM €9.0m) TOTAL NET LEVERAGE1 in m€ 5,0 399 785 819 678 161 (RCF) 2,7 (cash) 238 (cash) Mar-23 Mar-24 Mar-23 Mar-24 Mar-23 Mar-24 Not
Slide 22: New Financing Structure
NEW FINANCING STRUCTURE In place since 15 April 2024 in m€ Volume in m€ Maturity Pricing1 RCF 350 Mar 29 E+2.25% Term Loan 800 Mar 29 E+2.75% Mar 25 Bridge facility 450 (can be extended twice by E+2.25 six months) 1 Margin grid agreed with potential for lower margin if leverage decreases further 22
Slide 23: Strategy Update
STRATEGY UPDATE
Slide 24: Strategy Execution Continues as Planned
STRATEGY EXECUTION CONTINUES AS PLANNED Spotlight on major milestones in operations & infrastructure 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 B
Slide 25: Store Network Development Update
STORE NETWORK DEVELOPMENT UPDATE 24 openings in first six months of financial year − Store Network Development continues as planned − DOUGLAS Group well on track to open more than 200 new stores (net) across Europe and upgrade more than 400 stores by the end of the financial year 2025/26 − 24 store
Slide 26: Milestones in Supply Chain Operations
MILESTONES IN SUPPLY CHAIN OPERATIONS Ongoing rollout of OWAC model across Europe − New OWAC logistics center in Toledo, Spain, started operations in early 2024; more than 11,400m² of space, room for up to 60,000 SKUs including scale-up-option − Four OWACs currently in operations: Hamm (DACH), Toled
Slide 27: One Warehouse, All Channels - The Business Case for OWAC
ONE WAREHOUSE, ALL CHANNELS - THE BUSINESS CASE FOR OWAC Benefits for DOUGLAS Group, suppliers and customers 1. Improve Product Availability due to single shared warehouse stock for both channels (Stores & E-Com) and higher capacities 2. Reduce Inventories in Stores 3. Shorten Delivery Time to Store
Slide 28: Unification of IT Tech Stack
UNIFICATION OF IT TECH STACK Group-wide rollout of SAP SuccessFactors − Strategic decision made to unify Group-wide IT landscape and system architecture in a multi-phase project − Objective: increase efficiency, consistency, speed and data compatibility across all countries and entities − Close alig
Slide 29: Wrap-up + Q&A
WRAP-UP + Q&A
Slide 30: Summary
SUMMARY − DOUGLAS Group continues successful momentum and accelerates growth in a strong second quarter: Group sales (net) increased by 11.5% to around €958m, driven by both stores (+11.9%) and E-Com (+10.7%) − Further improved profitability in Q2: Adj. EBITDA up 16.2% to €145.9m, adj. EBITDA margin
Slide 31: DOUGLAS Group
LOUGLAS GROUP
Slide 32: Appendix
APPENDIX
Slide 33: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA Q2 2023/24 in m€ Q2 2022/23 Q2 2023/24 Q2 2022/23 YTD Q2 2023/24 YTD Reported EBITDA 110.4 106.6 406.7 425.0 Strategic projects Consulting fees1 3.2 2.1 4.4 6.5 Restructuring costs2 5.4 1.5 7.5 0.9 PPA -0.1 -0.1 -0.2 -0.2 Release of unused provisions SOP 3 1.1 0.0 2.2 -2.7 Main
Slide 34: Selected Segmental KPIs Q2 2023/24
SELECTED SEGMENTAL KPIS Q2 2023/24 REPORTED EBITDA CAPEX In m€ Q2 2022/23 Q2 2023/24 In m€ Q2 2022/23 Q2 2023/24 1 DACHNL 70.8 83.2 DACHNL 4.8 3.6 France 30.7 31.0 France 2.1 6.1 Southern Europe 19.9 24.7 Southern Europe 2.9 4.5 Central Eastern Europe 25.5 28.5 Central Eastern Europe 2.4 5.0 PD/NB -
Slide 35: Deep Dive into LFL Net Sales Development
DEEP DIVE INTO LFL NET SALES DEVELOPMENT Quarterly overview Q2 2022/23 Q3 2022/23 Q4 2022/23 Q1 2023/24 Q2 2023/24 DACHNL 24.7% 10.8% 9.3% 7.3% 14.9% France 9.8% 4.7% 6.4% 2.8% 4.1% Southern Europe 19.8% 14.1% 4.6% 4.9% 6.1% Central Eastern Europe 31.5% 15.0% 16.7% 15.5% 17.8% PD/NB 4.5% 23.0% 37.6%
Slide 36: Selected Segmental KPIs H1 2023/24
SELECTED SEGMENTAL KPIS H1 2023/24 REPORTED EBITDA CAPEX In m€ Q2 2022/23 YTD Q2 2023/24 YTD In m€ Q2 2022/23 YTD Q2 2023/24 YTD DACHNL 215.8 236.9 DACHNL 7.9 10.4 France 113.5 114.4 France 4.4 8.9 Southern Europe 76.2 92.5 Southern Europe 4.0 6.4 Central Eastern Europe 83.3 98.2 Central Eastern Eur
Slide 37: Development of Net Working Capital
DEVELOPMENT OF NET WORKING CAPITAL As of 31 March 2024 257 251 241 205 in m€ 149 NWC as % of X% 6.5% LTM net sales 6.2% 5.0% 3.5% 5.6% Q2 2022/23 Q3 2022/23 Q4 2022/23 Q1 2023/24 Q2 2023/24 Inventory 774.4 737.9 762.6 794.7 776.6 Trade accounts receivable 68.6 71.3 61.0 116.6 87.8 Trade accounts pay
Slide 38: DACHNL H1 2023/24
DACHNL H1 2023/24 Strong net sales development in both channels NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +8.0% (+7.4% lfl) growth in Store in m€ in m€ business and +14.2% E-Com 1.147 +10.5% sales 1.038 − Net sales increase in Stores due to significantly higher footfall as well as sl
Slide 39: France H1 2023/24
FRANCE H1 2023/24 Solid net sales growth with improved EBITDA margin NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +3.5% (+3.0% lfl) growth in Store in m€ in m€ business, E-Com grew by +3.9% 504 486 +3.6% − Higher footfall although lower conversion rate, higher basket sizes with higher n
Slide 40: Southern Europe H1 2023/24
SOUTHERN EUROPE H1 2023/24 Ongoing net sales growth in stores translated into higher adj. EBITDA NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +8.1% (+8.2% lfl) growth in in m€ in m€ Stores, E-Com business 376 356 +5.6% decreased by -7.7% − Net sales increase in Stores due to significant
Slide 41: Central Eastern Europe H1 2023/24
CENTRAL EASTERN EUROPE H1 2023/24 Very strong net sales growth with margin impacted by increased logistic costs NET SALES ADJUSTED EBITDA1 − Net sales increase driven by +18.7% (+15.3% lfl) growth in in m€ in m€ Stores and +20.0% in E-Com 362 +19.0% − Net sales increase from 304 significantly higher
Slide 42: Parfumdreams/Niche Beauty H1 2023/24
PARFUMDREAMS/NICHE BEAUTY H1 2023/24 Strong net sales growth for the online beauty businesses NET SALES ADJUSTED EBITDA1 − Net sales increase driven by the E-Com business mainly from the in m€ in m€ DACH market and strong growth 107 in active customers +23.4% 87 − Significantly more orders and highe
Slide 43: Net Sales Growth Fueled by Omnichannel Business H1
NET SALES GROWTH FUELED BY OMNICHANNEL BUSINESS Net sales H1 2023/24 GROUP STORES E-COM in m€ in m€ in m€ − Significantly increased footfall and number of − E-Com continues its growth trajectory 2.514 customers 2.300 +9.3% − More visits, stable conversion rate and − Higher basket sizes in most segme
Slide 44: P&L – KPIs Significantly Improved H1 2023/24
P&L – KPIS SIGNIFICANTLY IMPROVED H1 2023/24 in m€ Q2 2022/23 YTD Q2 2023/24 YTD ∆ % YTD Net sales 2,300.3 2,514.0 9.3% Cost of raw materials, consumables and -1,274.0 -1,375.8 -8.0% supplies and merchandise Gross profit 1,026.3 1,138.1 10.9% Main reasons: less other operating Gross profit margin 44
Slide 45: Cash Flow Statement
CASH FLOW STATEMENT H1 2023/24 In m€ Q2 2022/23 YTD Q2 2023/24 YTD Net cash flow from operating activities 285.8 415.9 Net cash flow from investing activities -47.9 -52.5 Free cash flow 237.8 363.4 Net cash flow from financing activities -246.3 190.6 Net change in cash and cash equivalents -8.5 554.
Slide 46: Store Network Across Europe
STORE NETWORK ACROSS EUROPE As of 31 March 2024 NUMBER OF STORES DEVELOPMENT 1,850 1,860 30 September 2023 – 31 March 2024 Store openings 24 Store closures -14 1.732 Total 10 1.718 Store openings: 4 stores in DACHNL (AT, CH), 2 in Franchise France, 4 in South Europe (IT, SI) and 132 128 13 CEE (PL,