Slide 1: Interim Report Q2 2024
Interim Report Q2 2024 August 23rd 2024
Slide 2: Today's Presenters
Today's Presenters Göran Dahlin CEO Fredrik Ideström CFO
Slide 3: This is Pierce
THIS IS PIERCE Online leader in a fragmented market Pan-European company Motorcycle specialist Net revenue split, Q2 2024 LTM Net revenue split, Q2 2024 LTM • Pierce is a leading e-tailer in the European market for Gear, Parts and Accessories for motorcycle riding Other 5% • The total European marke
Slide 4: Agenda
Agenda 1. Q2 Summary 2. Financial update 3. Looking forward 4. Q&A
Slide 5: Q2 Summary
Q2 SUMMARY Continued improvement, net revenue +3% • Q2 normally the seasonally strongest quarter during the year • Growth continued in the quarter supported by improving consumer Variance sentiment, especially in the beginning of the quarter • Looking ahead, we see the global geopolitical situation
Slide 6: KPI Highlights LTM
KPI HIGHLIGHTS LTM Resilient private brand revenue Stable Trustpilot score, 4.3/5.0 Net revenues, Private brand LTM (SEKm) Aggregated Trustpilot scores Net Revenue, Private brand (% of net revenue) 637 646 650 641 640 638 635 4,3 4,3 4,3 4,3 4,3 4,3 4,3 4,3 4,3 4,3 622 623 631 39% 41% 42% 41% 41% 39
Slide 7: KPI Highlights LTM (continued)
KPI HIGHLIGHTS LTM (CONTINUED) Customer base continued to decline But is offset by an increasing AOV Active customers LTM (000), end of period Average order value (SEK) Number of orders (000) +18% 1,165 1,167 1,163 1,165 1,070 1,090 1,106 1,055 1,083 1,070 999 1,021 1,021 1,016 1,004 955 972 930 927
Slide 8: Agenda
Agenda 1. Q2 Summary 2. Financial update 3. Looking forward 4. Q&A
Slide 9: Group Financials
GROUP FINANCIALS Revenue growth resumed Net revenue (SEKm) Net revenue (SEKm) • Net revenue growth during Q2 by segment: Profit after variable costs (SEKm) Profit after variable costs (SEKm) ̵ Offroad 6% and 4% in local currencies Profit after variable costs (%) Profit after variable costs (%) ̵ Onr
Slide 10: Group Financials
GROUP FINANCIALS Continuous adjusted EBIT improvement Adjusted EBIT (SEKm) Adjusted EBIT (SEKm) • Adjusted EBIT Adjusted EBIT margin (%) Adjusted EBIT margin (%) ̵ Adjusted EBIT in Q2 2024 improved from 6 SEKm last year to 17 SEKm ̵ Reversal of obsolescence related provisions has had a positive impa
Slide 11: Gross Margin
GROSS MARGIN Trend shift in gross margin since Q2 2023 Shipping costs in relation to revenues same as in Q1 2024 Gross margin (%), reported In-freight (SEKm) Cost in relation to Net revenue (%) +2ppt 30 12 30 27 44.7% 10 24 -1.0 ppt 25 39.5% 39.7% 42.1% 21 21 39.1% 45.6% 20 19 6.6% 19 37.8% 44.1% 8
Slide 12: Overhead Costs Development
OVERHEAD COSTS DEVELOPMENT Overhead costs Overhead costs % of net revenue ▪ Overhead costs impacted negatively vs previous year mainly by underlying inflationary pressure, FX and execution of our strategy to 25 80 modernize the tech stack 71 72 67 69 ▪ The outcome of the restructuring program is 66
Slide 13: Net Working Capital Development
NET WORKING CAPITAL DEVELOPMENT NWC decreased in Q2 2024 despite low season Net working capital, NWC (SEKm) ▪ Net working capital (NWC) decreased Q2 Net working capital, % of Net Revenue, LTM (%) 2024 vs. Q2 2023 with SEKm 189: – Total inventory decreased with SEKm 152 ▪ Due to seasonality, the NWC
Slide 14: Financial Position
FINANCIAL POSITION Debt-free, net cash positive and a solid equity position 31 Dec 30 Jun SEKm (unless stated otherwise) 2023 2024 Interest-bearing liabilities¹ - - ▪ Cash positive since new share issue in 2022. Cash and cash equivalents 222 350 Net debt excl. IFRS 16 -222 -350 ▪ Solid equity positi
Slide 15: Agenda
Agenda 1. Q2 Summary 2. Financial update 3. Looking forward 4. Q&A
Slide 16: Pierce 2.0
PIERCE 2.0 Our vision is to become the unquestionable leading e-tailer of the European market of gear, accessories, and parts for motorcycle riding. SUPPORTED BY 7 STRATEGIC PILLARS • To achieve absolute leadership in the Offroad segment and profitable growth in the Onroad segment • To have the high
Slide 17: Agenda
Agenda 1. Q2 Summary 2. Financial update 3. Looking forward 4. Q&A
Slide 18: Appendix
> Appprec any wer
Slide 19: Q2 Summary – Profit and Loss
Q2 SUMMARY – PROFIT AND LOSS Q2 2023 Q2 2024 SEKm (unless stated otherwise) Offroad Onroad Other Intra-group Total Offroad Onroad Other Intra-group Total costs¹ costs¹ Net Revenue 248 183 10 - 441 264 186 6 - 456 Growth (y/y) (%) 2% -7% -4% -% -2% 6% 2% -40% -% 3% Gross Profit 111 71 4 0 186 124 76
Slide 20: Consolidated Financial Information
CONSOLIDATED FINANCIAL INFORMATION SEKm (unless stated otherwise) 2022 2023 Q2 2024 LTM Net Revenue 1,670 1,537 1,563 Growth (y/y) (%) 5% -8% -1% Growth in local currencies (y/y) (%) 1% -13% -5% Growth in private brand sales (y/y) (%) 7% -1% 1% Gross Profit 657 607 648 Gross margin (%) 39.3% 39.5% 4
Slide 21: Segment Financial Information
SEGMENT FINANCIAL INFORMATION SEKm (unless stated otherwise) 2022 2023 Q2 2024 LTM Offroad Net Revenue 999 952 977 Growth (y/y) (%) 3% -5% 1% Gross Profit 412 393 424 Gross margin (%) 41.2% 41.3% 43.4% Variable sales- and distribution costs -235 -205 -209 Variable sales- and distribution costs (%) -
Slide 22: Quarterly Consolidated Financial Information
QUARTERLY CONSOLIDATED FINANCIAL INFORMATION 2022 2023 2024 SEKm (unless stated otherwise) Q1 Q2 Q3 Q4 FY22 Q1 Q2 Q3 Q4 FY23 Q1 Q2 Q2 LTM Net Revenue 420 450 373 427 1,670 345 441 369 382 1,537 356 456 1,563 Growth (y/y) (%) 14% 0% 3% 3% 5% -18% -2% -1% -10% -8% -22% 3% -1% Growth in local currencie
Slide 23: Quarterly Segment Financial Information
QUARTERLY SEGMENT FINANCIAL INFORMATION 2022 2023 2024 SEKm (unless stated otherwise) Q1 Q2 Q3 Q4 FY22 Q1 Q2 Q3 Q4 FY23 Q1 Q2 Q2 LTM Offroad Net Revenue 241 243 233 282 999 207 248 238 258 952 217 264 977 Growth (y/y) (%) 9% -9% 3% 8% 3% -14% 2% 3% -9% -5% 5% 6% 1% Gross Profit 103 103 95 110 412 86
Slide 24: Quarterly Consolidated Net Working Capital
QUARTERLY CONSOLIDATED NET WORKING CAPITAL 2022 2023 2024 SEKm (unless stated otherwise) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Physical stock 414 420 401 317 283 274 233 Goods in transit 74 44 58 60 61 58 74 Inventory 488 464 459 377 344 332 307 Working capital assets 20 30 28 20 14 25 27 Working capital liabilities
Slide 25: Condensed Consolidated Statement of Profit/Loss
CONDENSED CONSOLIDATED STATEMENT OF PROFIT/LOSS Apr-Jun Jan-Jun Jul 2023- Jan-Dec SEKm 2024 2023 2024 2023 Jun 2024 2023 Net revenue 456 441 812 786 1,563 1,537 Cost of goods sold -255 -255 -448 -463 -915 -930 Gross profit 201 186 364 323 648 607 Sales and distribution costs -137 -136 -253 -254 -505
Slide 26: Condensed Consolidated Statement of Financial Position
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION SEKm 30 Jun 2024 30 Jun 2023 31 Dec 2023 Intangible assets 295 341 310 Property, plant and equipment 14 15 15 Right-of-use assets 47 67 53 Financial assets 5 4 3 Deferred tax assets 7 5 8 Total non-current assets 367 431 389 Inventory 307 459 34
Slide 27: Condensed Consolidated Statement of Cash Flow
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW Apr-Jun Jan-Jun Jul 2023- Jan-Dec SEKm NOTE 2024 2023 2024 2023 Jun 2024 2023 Operating profit A 17 2 24 -19 -68 -111 Adjustments for non-cash items B 19 15 40 34 129 122 Paid interest -1 -1 -2 -3 -4 -5 Received interest 2 0 4 0 6 3 Realised currency der
Slide 28: Reconciliation of Adjusted Financials
RECONCILIATION OF ADJUSTED FINANCIALS Apr-Jun Jan-Jun Jul 2023- Jan-Dec SEKm 2024 2023 2024 2023 Jun 2024 2023 Net revenue 456 441 812 786 1,563 1,537 Cost of goods sold -255 -255 -448 -463 -915 -930 Variable sales- and distribution costs -98 -98 -178 -181 -348 -351 Other costs¹ -87 -86 -162 -161 -3
Slide 29: Mid to Long Term Financial Targets
Pierce Group's mid to long term financial targets Financial targets • Net revenue growth: In the medium to long term (3-5 years), organically outgrow the European online market for motorcycle gear, accessories and parts. • Adjusted operating margin (EBIT): In the medium to long term (3-5 years), ach
Slide 30: Riders in Q W E-commerce
RIDERS IN QW E-COMMERCE PIERCE