Douglas Ag · XETR:DOU
Douglas — Debt Investor Presentation (January 2021)
49 slides from Douglas's debt investor presentation, Jan 28, 2021
Slide 1: Financial Results
Financial Results Düsseldorf, 28 January 2021
Slide 2: Notice to Recipients
NOTICE TO RECIPIENTS This presentation and any materials distributed in connection herewith (together, the “Presentation”) have been prepared by Douglas GmbH (the “Company”) solely for use at this presentation. By attending the meeting where this Presentation is made, or by reading the presentation
Slide 3: Today's Speakers
TODAY’S SPEAKERS Tina Müller Group CEO Matthias Born Michael Keppel Group CFO Group CRO 3
Slide 4: Douglas Successfully Navigates Through the Crisis
DOUGLAS SUCCESSFULLY NAVIGATES THROUGH THE CRISIS RECORD GROWTH IN E-COMMERCE SALES › Record growth in E-Commerce keeps total sales almost stable › Q4 performance after reopening of stores broadly flat on prior year despite Covid-19 impact › Douglas continued to gain market share throughout the cris
Slide 5: Swift Actions Taken to Preserve the Strength of the Business
SWIFT ACTIONS HAVE BEEN TAKEN TO PRESERVE THE STRENGTH OF THE BUSINESS Business continuity ensured Liquidity safeguarded ✓ Implementation of Health & Safety measures ✓ Tight cost and cash management and reporting E-Commerce capabilities significantly expanded, Rent negotiations and use of specific p
Slide 6: Over 40% E-Commerce Growth
OVER 40% E-COMMERCE GROWTH MITIGATED COVID-19 IMPACT ACROSS REGIONS GROUP GERMANY FRANCE (ONLINE) (m€) (m€) (m€) LfL Net Sales LfL LfL LfL 822 1,289 1,270 767 688 584 s 6 FY 2018/19 FY 2019/20 8 FY 2018/19 FY 2019/20 FY 2018/19 FY 2019/20 GROUP SOUTH-WESTERN EASTERN EUROPE (STORES) EUROPE (m€) (m€)
Slide 7: Adjusted EBITDA Development by Segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT FY 2019/20 › EBITDA figures stated pre IFRS16 ADJUSTED EBITDA 1 › €221m decrease in FY Net Sales translated GROUP GERMANY2 FRANCE into a decrease of only €59m Adjusted EBITDA thanks to effective countermeasures (m€) (m€) (m€) › Substantial loss of contribution
Slide 8: Long-Term E-Commerce Growth
LONG-TERM E-COMMERCE GROWTH E-COM SALES DOUBLED IN THE LAST TWO YEARS E-COMMERCE GROWTH FURTHER ACCELERATES, WITH NET SALES REACHING € 1BN E-COMMERCE NET SALES (IN M€) 822 LTM Dec 19/20 vs. 585 LTM Dec 18/19 423 383 CAGR 324 261 180 145 106 69 39 50 13 19 23 32 2 4 6 9 00/01 01/02 02/03 03/04 04/05
Slide 9: E-Commerce: Strong Development of KPIs
E-COMMERCE: STRONG DEVELOPMENT OF KPIS NO.1 EUROPEAN BEAUTY E-COMMERCE PLAYER ONLINE NET SALES O N L I N E R E V E N U E S H A R E (1) +40.6% GROUP ACTIVE CUSTOMERS FY19/20AC TOTAL VISITS +39.0% +41.0% CONVERSION RATE AVERAGE BASKET (INCL. VAT) (0.2)%pts +3.9% G E R M A N Y (2) FY19/20AC MOBILE REVE
Slide 10: E-Com Share of Sales Doubled Over Past 2 Years
E-COM SHARE OF SALES DOUBLED OVER PAST 2 YEARS › Continuing strong growth rates in E-COMMERCE SHARE OF SALES (GROUP) recent quarters › Strongest share of sales during 1st Lockdown lockdown in spring › Lasting high share of sales after 40% reopening of stores in Q4 › Persistent change in consumer beh
Slide 11: Douglas Keeps on Expanding Its Market Share
DOUGLAS KEEPS ON EXPANDING ITS MARKET SHARE › Douglas outperforms previous DOUGLAS MARKET SHARE ACROSS CORE COUNTRIES (STORES + ONLINE) year’s market shares across core countries in both +1.6%pts channels, i.e. in stores and online › E-Commerce: Key growth +1.6%pts driver during COVID-19 +0.4%pts ›
Slide 12: E-Commerce Highlights of FY 2019/20
E-COMMERCE HIGHLIGHTS OF FY 2019/20 MARKETPLACE AS GROWTH DRIVER CRM PROGRAM Personalised communication based on >62k SKUs 90 partners customer profile: › 44m cardholders by end of FY2019/20 Marketplace already online in › 4bn personalised communications in ✓ Germany ✓ Austria ✓ France FY2019/20 › +
Slide 13: Summary
SUMMARY Record growth in E-Commerce keeps total sales almost stable E-Commerce sales reached 1bn sales LTM Dec20 Early and strategic focus on E-Commerce helped Douglas to safely navigate through the Covid-19-impacted fiscal year 2019/20 Due to Douglas’ high brand awareness, the strong E-com business
Slide 14: Closer Look: 2019/20 Financials
Closer Look: 04 2019/20 Financials DOUGLAS
Slide 15: Q4 2019/20 Financials: Covid-19 Impacted
Q4 2019/20 FINANCIALS: COVID-19 IMPACTED STILL, LIKE-FOR-LIKE NET SALES VIRTUALLY ON PRIOR-YEAR LEVEL NET SALES LFL GROWTH A D J U S T E D 1/ R E P O R T E D E B I T D A (m€) (m€) Total LfL Growth: 56 36 744 727 47 27 29 Store LfL Growth: Q4 2018/19 Q4 2019/20 Online LfL Growth: Q4 2018/19 Q4 2019/2
Slide 16: FY 2019/20 Key Financials at a Glance
FY 2019/20 KEY FINANCIALS AT A GLANCE FIXED COSTS AND CHANNEL SHIFT WEIGH ON EBITDA NET SALES LFL-GROWTH A D J U S T E D 1/ R E P O R T E D E B I T D A (m€) (m€) 3.453 3.233 Total LfL Growth: 351 292 283 Store LfL Growth: 179 FY 2018/19 FY 2019/20 Online LfL Growth: FY 2018/19 FY 2019/20 FY 2018/19
Slide 17: Net Sales Development by Segment
NET SALES DEVELOPMENT BY SEGMENT Q4 2019/20 › COVID-19 impact on store business NET SALES 1 nearly fully compensated by strong E- GROUP GERMANY FRANCE Commerce business › Significantly lower footfall due to (m€) (m€) (m€) COVID-19 nearly compensated by LfL LfL higher basket and conversion rates LfL
Slide 18: Adjusted EBITDA Development by Segment
ADJUSTED EBITDA DEVELOPMENT BY SEGMENT Q4 2019/20 › EBITDA figures stated pre IFRS16 ADJUSTED EBITDA 1 › Loss of contribution in stores was GROUP GERMANY2 FRANCE partially mitigated by E-Com topline contribution, countermeasures and (m€) (m€) (m€) tight cost discipline › Germany: decrease driven by
Slide 19: Gross Profit Decline Partially Mitigated
GROSS PROFIT DECLINE PARTIALLY MITIGATED Q4 2019/20 (m€) Less deferred payments, Lower margin due to channel shift offset by improvement in Impacted by working capital effects, partially offset by the time- consulting and Mainly adjusted for consulting accrual accounting effect restructuring costs a
Slide 20: Free Cash Flow Impacted by Required Capex and Cash Effect of Adjustments
FREE CASH FLOW IMPACTED BY REQUIRED CAPEX AND CASH EFFECT OF ADJUSTMENTS ADJUSTED FCF DEVELOPMENT (m€) 21 4 FREE CASH FLOW BRIDGE Q4 2019/20 (m€) -20 Q4 2017/18 Q4 2018/19 Q4 2019/20 (7) 29 (33) 50 (34) 4 0 (29) (26) (26) Adj. EBITDA CAPEX1 Working Taxes Others2 Adj. Free EBITDA Free Cash M&A Free C
Slide 21: Liquidity Maximized Through Countermeasures
LIQUIDITY MAXIMIZED THROUGH COUNTERMEASURES CASH BALANCE (m€) › Effect from lower gross profit, overcompensated by › Savings in personnel expenses (incl. government subsidies) and shift of social securities payments/taxes 256 › Waived/reduced/shifted rent payments › Capex reduction 165 (RCF) › Longe
Slide 22: Evolution of Capital Structure and Key Leverage Metrics
EVOLUTION OF CAPITAL STRUCTURE AND KEY LEVERAGE METRICS CAPITAL STRUCTURE TOTAL NET LEVERAGE 30 September 2020 7.6x m€ x Adj. EBITDA Maturity Pricing 6.3x 5.9x 5.2x Cash and Equivalents 256 E+3.75% RCF (€200m Volume)4 165 Feb 22 (0% floor) Sep 2017 Sep 2018 Sep 2019 Sep 2020 E+3.50% Term Loan B (B2/
Slide 23: Summary Q4 19/20
SUMMARY Q4 19/20 Sustainable strong E-Commerce growth post lockdown, nearly fully compensated declining store sales Liquidity and business continuity secured Cost-optimization program continued 23
Slide 24: #ForwardBeauty.DigitalFirst
#ForwardBeauty.DigitalFirst 24
Slide 25: #ForwardBeauty.DigitalFirst Enables a Holistic Customer Journey
#FORWARDBEAUTY.DIGITALFIRST ENABLES A HOLISTIC CUSTOMER JOURNEY › Invest into the holistic digital customer journey › Focus on E-Commerce and marketplace „Digital first“ means to … › Capitalize on datahub to personalize customer journey and monetize supplier/partner relationship › Integrate store bu
Slide 26: #ForwardBeauty.DigitalFirst: Douglas Beauty Platform
#FORWARDBEAUTY.DIGITALFIRST DOUGLAS BEAUTY PLATFORM 26
Slide 27: #ForwardBeauty.DigitalFirst Beauty Platform
#FORWARDBEAUTY.DIGITALFIRST BEAUTY PLATFORM Brand Positioning E-COMMERCE ONLINE SHOP MARKET PLACE 27 1 ASSORTMENT 4 CURATION / CRM Choice & Innovation Inspiration & Personalization 2 SUPPLY CHAIN 3 TECHNOLOGY Customer Operational Excellence Data-driven Culture Partner Relationships Relationships STO
Slide 28: Assortment: Clear Differentiation from Competition with Over 100,000 Beauty Products
1 2 3 4 1 ASSORTMENT: CLEAR DIFFERENTIATION FROM COMPETITION WITH OVER 100,000 BEAUTY PRODUCTS FAST GROWING TREND EXCLUSIVE DOUGLAS MARKETPLACE(1) BRANDS BRANDS COLLECTION BEAUTY HAIR NEWLY CREATED (2) (2) OWN BRANDS DERMA BEAUTY ACCESORIES & JEWELLERY ~2.6x number of SKUs compared to 2.6 x closest
Slide 29: Supply Chain Transformation & Digitization
1 2 3 4 2 SUPPLY CHAIN TRANSFORMATION & DIGITIZATION Future Supply Chain Set up Digital Supply Chain > One Warehouse, All Channels (OWAC) > Artificial Intelligence based software with Machine Learning > 5 OWAC sites to enable E-Com growth and Algorithms from RELEX Solutions, replacing legacy Supply
Slide 30: Douglas Data Hub Is the Core Element of Our Data Strategy
1 2 3 4 3 DOUGLAS DATA HUB IS THE CORE ELEMENT OF OUR DATA STRATEGY AND COLLECTS ALL KEY DATA SOURCES OFFLINE DATA RETAIL MEDIA DATA CRM DATA MARKETPLACE DATA DOUGLAS WEBSITE DATA PERFORMANCE MARKETING DATA ANALYTICS DATA BI-DIRECTIONAL DATA EXCHANGE UNIDIRECTIONAL DOUGLAS APP DATA DATA EXCHANGE
Slide 31: Douglas Curation Capability as a Competitive Advantage
1 2 3 4 4 DOUGLAS CURATION CAPABILITY AS A COMPETITIVE ADVANTAGE WITH PERSONALIZATION AS KEY ELEMENT Douglas is the trusted No. 1 Beauty platform with curated assortment of the best products and brands RETAIL MARKETPLACE TOTAL SKUs = >c.100% 90,000 107,000 >67,000 30,000 36,000 2017 (1) 2018 (1) 201
Slide 32: #ForwardBeauty.DigitalFirst Beauty Platform
#FORWARDBEAUTY.DIGITALFIRST BEAUTY PLATFORM Brand Positioning E-COMMERCE ONLINE SHOP MARKET PLACE 32 1 ASSORTMENT 4 CURATION / CRM Choice & Innovation Inspiration & Personalization 2 SUPPLY CHAIN 3 TECHNOLOGY Customer Operational Excellence Data-driven Culture Partner Relationships Relationships STO
Slide 33: Launch of Store Optimization Program
LAUNCH OF STORE OPTIMIZATION PROGRAM IN LINE WITH #FORWARDBEAUTY.DIGITALFIRST WHY WE ADAPT THE STORE NETWORK STORE NETWORK ANALYSIS • 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
Slide 34: Optimized Store Portfolio Will Increase EBITDA
OPTIMIZED STORE PORTFOLIO WILL INCREASE EBITDA ILLUSTRATIVE Store Portfolio Optimization P&L After Current Revenue Revenue Store Store Transfer Transfer Closures › Closure of stores with Portfolio -Online -Offline negative or low EBITDA effect Channel- Channel- profitability Net sales › Revenue tran
Slide 35: Store Optimization Program and #ForwardOrganization Completion by End of FY21/22
STORE OPTIMIZATION PROGRAM AND #FORWARDORGANIZATION COMPLETION BY END OF FY21/22 EBITDA One-offs Main lever potential (€m) cash (€m) Comments › Optimisation of store portfolio based on analysis of catchment areas › Selection of future store network based on performance, competitive Store portfolio s
Slide 36: 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 37: Thank you.
Thank you. DOUGLAS
Slide 38: Appendix
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Slide 39: Net Sales Development by Segments
NET SALES DEVELOPMENT BY SEGMENTS FY 2019/20 › Net Sales impacted by COVID-19 NET SALES 1 lockdown in all regions GROUP GERMANY FRANCE › Impact partially compensated by strong E-Commerce business (m€) (m€) (m€) › France and SWE most severely LfL LfL impacted due to lockdowns, starting LfL 1,289 1,27
Slide 40: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA Q4 & FY 2019/20 › Consulting fees: Internal strategic EBITDA ADJUSTMENTS projects (e.g. costs to be expected as part of cost-savings and store (m€) Q4 2018/19 Q4 2019/20 FY 2018/19 FY 2019/20 restructuring program going forward) › PPA: Acquisitions in Germany and SWE Reported E
Slide 41: Reported EBITDA
REPORTED EBITDA Q4 & FY 2019/20 REPORTED EBITDA (m€) Q4 Q4 FY FY 2018/19 2019/20 2018/19 2019/20 Germany1 18 (11) 58 21 France 12 11 109 96 South-Western Europe 0 (16) 71 18 Eastern Europe 6 11 45 43 Group2 36 (4) 283 179 41 1 Incl. consolidation effects
Slide 42: Deep Dive into LFL Net Sales Growth
DEEP DIVE INTO LFL NET SALES GROWTH QUARTERLY DEVELOPMENT LFL NET SALES GROWTH DEVELOPMENT Q4 Q1 Q2 Q3 Q4 FY 2018/19 2019/20 2019/20 2019/20 2019/20 2019/20 Germany 0.6% 6.6% (3.7)% (19.0)% 2.3% (2.1)% France 4.1% 2.8% (15.8)% (34.9)% (6.7)% (10.7)% South-Western Europe (0.2)% 4.7% (15.8)% (34.9)% (
Slide 43: Bridge from Reported EBITDA to Net Loss
BRIDGE FROM REPORTED EBITDA TO NET LOSS DRIVEN BY IMPAIRMENT AND WRITE-DOWN › All EBITDA figures stated pre IFRS16 179 › Reported EBITDA: COVID-19 related decrease of net sales while fixed costs could only be partially reduced 434 › Amortisation/depreciation: increase mainly due to goodwill impairme
Slide 44: Free Cash Flow Development Positive and Above Previous Year
FREE CASH FLOW DEVELOPMENT POSITIVE AND ABOVE PREVIOUS YEAR DESPITE COVID-19 IMPACT ADJUSTED FCF DEVELOPMENT (m€) 247 FREE CASH FLOW BRIDGE FY2019/20 200 160 (m€) FY2017/18 FY2018/19 FY2019/20 (108) 42 42 (21) (108) 292 247 140 140 0 Adj. EBITDA CAPEX1 Working Taxes Others2 Adj. Free EBITDA Free Cas
Slide 45: Cash Flow Statement
CASH FLOW STATEMENT Q4 & FY 2019/20 › Strong development of CASH FLOW STATEMENT Cash Flow from Operating (m€) Q4 Q4 FY FY activities due to good 2018/19 2019/20 2018/19 2019/20 working capital Net Cash Flow from Operating activities 13 6 198 245 management including inventory and shifts related Net
Slide 46: Net Working Capital
NET WORKING CAPITAL Q4 2019/20 › Net Working Capital continues to NET WORKING CAPITAL be a key focus (m€) › Inventories slightly lower compared to PY despite 287 284 313 248 204 challenges due to COVID-19, in line with seasonal patterns › Payables: Higher due longer NWC as % of LTM Net Sales Q4 2018
Slide 47: IFRS 16 Effects on P&L
IFRS 16 EFFECTS ON P&L 01.10.2019 - 30.09.2020 Excl. IFRS16 Incl. IFRS16 Delta Explanation Sales 3,233 3,233 Cost of raw materials, consumables and supplies and merchandise (1,795) (1,795 Gross Profit 1,437 1,437 Other operating income 251 241 (10) Personnel expenses (581) (581) Other operating expe
Slide 48: Technical Accounting Impact "Timing Accrual"
TECHNICAL ACCOUNTING IMPACT “TIMING ACCRUAL” SEGMENT GERMANY ONLY › Germany historically showed ACCRUAL – P&L EFFECT ON GROSS PROFIT conservative Q1 results by building up an accrual within COGS in Q1 (m€) Q1 Q2 Q3 Q4 FY and gradually reversing it in Q2-Q4 › No effect on full financial year FY2019/2
Slide 49: Premium Store Network Footprint Across Europe
PREMIUM STORE NETWORK FOOTPRINT ACROSS EUROPE › Limited store openings, 2.431 2.372 mainly in EE 139 140 › Portfolio realignment 2.292 2.232 across Europe will result in further reduction in # of stores 30 Sep 19 30 Sep 20 Own stores Franchise stores YTD DEVELOPMENT FY 2018/19 FY 2019/20 Store openi