Douglas Ag · XETR:DOU
Douglas — Q4 FY2022/23 Earnings Presentation
55 slides from Douglas's earnings presentation, Dec 20, 2023
Slide 1: Q4 Operational & Financial Results FY 2022/23
DÜSSELDORF, 20.12.2023 Q4 OPERATIONAL & FINANCIAL RESULTS Q4 | FULL YEAR FY 2022/23
Slide 2: Today's Speakers
T O DAY ‘ S SPEAKERS SANDER VAN DER LAAN MARK LANGER CEO DOUGLAS GROUP CFO DOUGLAS GROUP 2
Slide 3: Agenda
AGENDA 01 BUSINESS HIGHLIGHTS 02 Q4 FINANCIALS 03 STRATEGY UPDATE 04 SPOTLIGHT: ESG STRATEGY 05 WRAP UP & Q&A 3
Slide 4: Record Year 2022/23 & Good Foundation
RECO RD Y EAR 2022/ 23 & GO O D F O U NDAT IO N DOUGLAS IS WELL POSITIONED TO MAINTAIN ITS GROWTH TRAJECTORY Record results Execution of Increased Improved with strong strategic initiatives profitability leverage ratio momentum well on track 4
Slide 5: Business Highlights
01 BUSINESS HIGHLIGHTS SANDER VAN DER LAAN CEO DOUGLAS GROUP 5
Slide 6: Launch of New Skincare Line DOUGLAS Naturals in September
LAUNCH OF NEW SKINCARE LINE DOUGLAS NATURALS IN SEPTEMBER Only with certified organic ingredients Very promising launch – almost 50% of the range with a bestseller performance in launch month Fully Ecocert® certified organic portfolio 6
Slide 7: Go-Live of New Partner Program Country: Spain
GO-LIVE OF NEW PARTNER PROGRAM COUNTRY: SPAIN Spain becomes the 7th partner program country Successful launch in July with ~11,000 SKUs 7
Slide 8: New Flagship Store in Milano
NEW FLAGSHIP STORE IN MILANO Luxury store opened in September 2023 on the popular shopping mile Via Torino, in the heart of the historic city center Seventh store in the Italian city ~400m² of sales area with wide range of beauty services on offer 8
Slide 9: Exclusive Launch of Florence by Mills Fragrance
EXCLUSIVE LAUNCH OF FLORENCE BY MILLS FRAGRANCE DOUGLAS continues to secure top-tier exclusive launches; florence by mills appealing to Gen Z Group wide exclusive launch both offline & online Event with Millie Bobby Brown in DOUGLAS store in Berlin with hundreds of fans from all of Europe 9
Slide 10: Q1 Marketing Campaign Feel Beautiful Feelings
Q1 MARKETING CAMPAIGN „FEEL BEAUTIFUL FEELINGS“ Brand roof campaign for Christmas, Beauty Friday and Singles’ Day 360° campaign across all channels 10
Slide 11: Record Performance & Omnichannel Success
RECO RD PERF O RM ANCE & O M NICHANNEL SUCCESS FULL YEAR 2022/23 DOUGLAS surpasses total Group adjusted sales (net) of 4 billion euros for the first time (€4.1bn) Adj. EBITDA went up 22.3% to €725.9m and free cash flow amounted to €480.6m, underlining improved profitability Q4 2022/23 Strong growth
Slide 12: Further Increase in Sales and Profitability
FURTHER INCREASE IN SALES AND PROFITABILITY STRONG ADJ. NET SALES, ADJUSTED EBITDA & MARGIN ADJ. NET SALES1 ADJ. EBITDA² in m€ 883 in m€ 810 +9.1% 137 109 +25.0% +9.4% lfl 13.5% 15.5% MARGINS Q4 2021/22 Q4 2022/23 Q4 2021/22 Q4 2022/23 › Ongoing strong sales momentum as customers continue to be attr
Slide 13: Q4 Financials
02 Q4 FINANCIALS MARK LANGER CFO DOUGLAS GROUP 13
Slide 14: DACHNL Q4 2022/23
DACH NL Q4 2022/ 23 STRONG ADJ. NET SALES DEVELOPMENT IN BOTH CHANNELS ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +8.5% (+7.0% lfl) growth in Store 410 business and +10.5% E-Com sales 376 +9.2% Adj. net sales increase in Stores due to significantly higher footfall thou
Slide 15: France Q4 2022/23
F RANCE Q4 2022/ 23 ADJ. NET SALES GROWTH TRANSLATED INTO ADJ. EBITDA GROWTH ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +5.8% (+6.1% lfl) growth in Store 161 152 +5.7% business, E-Com grew by +5.4% Higher footfall and larger basket sizes in Stores, more visits in E-Com
Slide 16: Southern Europe Q4 2022/23
SO U T H ERN EU RO PE Q4 2022/ 23 ONGOING ADJ. NET SALES GROWTH BUT HIGHER PERSONNEL COSTS ADJ. NET SALES1 ADJ. EBITDA2 Adj. net sales1 increase driven by in m€ in m€ +8.0% (+7.2% lfl) growth in Stores 130 124 +5.2% and -13.2% in E-Com business Adj. net sales1 sales increase in Stores due to signifi
Slide 17: Central Eastern Europe Q4 2022/23
CENT RAL EAST ERN EU RO PE Q4 2022/ 23 HIGH ADJ. NET SALES GROWTH AND ONGOING MARGIN UPLIFT ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +19.9% (+16.5% lfl) growth in Stores 127 and +15.5% in E-Com +18.8% 107 Adj. net sales increase from significantly higher footfall in
Slide 18: Parfumdreams / Niche Beauty Q4 2022/23
PARF U M DREAM S / NICH E BEAU T Y Q4 2022/ 23 HIGHEST ADJ. NET SALES GROWTH FOR THE ONLINE BEAUTY BUSINESSES ADJ. NET SALES ADJ. EBITDA1 Increased net sales driven by in m€ in m€ amended premium program and 40 adjusted pricing strategy +36.9% Adj. net sales increase from slightly 29 more visits and
Slide 19: Omnichannel Growth Fueled by Both Channels
OMNICHANNEL GROWTH FUELED BY BOTH CHANNELS Q4 2022/23 GROUP1 STORES1 E-COM in m€ in m€ in m€ Significantly increased E-Com continues to grow for footfall and number of the 5th consecutive quarter 883 customers 810 +9.1% Slightly higher basket sizes Increased basket sizes Higher net sales per item St
Slide 20: P&L – KPIs Significantly Improved
P&L – KPIS SIGNIF ICANT LY IM PRO VED Q4 2022/23 in m€ Q4 2021/22 Q4 2022/23 ∆% Net sales 812.2 883.1 8.7% adj. Net sales 1 809.7 883.0 9.1% Gross profit margin improved as Cost of raw materials, consumables and -447.1 -476.9 -6.7% net sales grew faster than COGS supplies and merchandise due to thor
Slide 21: DIO Stable; Focus on Store Capex
DIO ST ABL E; F O CU S O N ST O RE CAPEX AS OF 30 SEPTEMBER 2023 in m€ AVERAGE NET WORKING CAPITAL CAPEX 212 172 +23.0% 47 41 +15.5% 4.7% 5.2% NWC as % of NES1 30.09.2022 30.09.2023 Q4 2021/22 Q4 2022/23 Higher inventory for the provisioning for the peak season in Capex focus in Q4 on Stores Q1 and
Slide 22: Free Cash Flow Improved
F REE CASH F L O W IM PRO VED 12M YTD 2022/23 in m€ 726 -110 -88 523 -33 28 -43 481 481 0 Adj EBITDA CAPEX 1 Working Capital ² TAX Others ³ Adj FCF EBITDA Free Cash Flow M&A FCF POST M&A Adjustments (pre M&A) (Cash effect) 4 12M 2021/22 593 -86 54 -52 -55 454 -63 391 -24 367 1 Excl. M&A-related inve
Slide 23: Significant Reduction in Leverage Ratio
SIGNIF ICANT REDU CT IO N IN L EVERAGE RAT IO AS OF 30 SEPTEMBER 2023; INCLUDING IFRS 16 EFFECTS AVAILABLE LIQUIDITY in m€ +4.8% 424 404 €8.5m used or 161 reserved for 159 rental (RCF) (RCF) guarantees (PY: €10.9m) TOTAL NET LEVERAGE1 ADJUSTED EBITDA2 in m€ 5.8 4.7 245 262 (cash) (cash) Sep 22 Sep 2
Slide 24: Strategy Update
03 STRATEGY UPDATE SANDER VAN DER LAAN CEO DOUGLAS GROUP 24
Slide 25: Implementation Well on Track
IM PL EM ENT AT ION WEL L O N T RACK SEVERAL LANDMARK DECISIONS AND MILESTONES REACHED 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 ✅ ✅ ✅ Q1 Market
Slide 26: Spotlight: Store Network Expansion
S P OTLI GHT: ST O RE NETWORK EXPANSIO N RAMPING UP THE PACE DOUGLAS accelerated the development of its store network in the fiscal year 2022/23: 39 new stores opened 26 of all new stores opened in CEE 76 stores refurbished Entered two new countries with successful store openings: Belgium and Sloven
Slide 27: Spotlight: E-Com Business Boost
S P OTLI GHT: E-CO M BUSINESS BO O ST ONLINE CHANNEL DRIVES GROWTH E-Com as a continuous growth driver, key milestones: Successful DOUGLAS App in Q4: App sales share at 37.2% (+5ppt), active customers up 21% Finalized full internationalization of parfumdreams‘ „Premium“ customer loyalty program & co
Slide 28: Spotlight: ESG Strategy
04 SPOTLIGHT: ESG STRATEGY SANDER VAN DER LAAN CEO DOUGLAS GROUP 28
Slide 29: ESG ambition: leading beauty retailer in sustainability
ESG stands for Environment, Social and Governance. It sets the foundation for DOUGLAS’ attitude, policy, and activities. As Europe’s number one omnichannel destination for premium beauty, DOUGLAS has defined a clear ambition: We want to be a leading beauty retailer in sustainability. 29
Slide 30: UN Global Compact
U N GL O BAL CO M PACT SUSTAINABLE DEVELOPMENT GOALS (SDG) DOUGLAS has signed the UN Global Compact, a non-binding United Nations pact to get businesses and firms worldwide to adopt sustainable and socially responsible policies. The UN Global Compact aims to accelerate and scale the global collectiv
Slide 31: Our ESG Strategy
O U R ESG ST RAT EGY BASED ON THREE FOCUS AREAS WITH CLEAR AMBITIONS AS EUROPE’S PREMIUM BEAUTY DESTINATION #1, DOUGLAS HAS THE AMBITION TO BE A LEADING BEAUTY RETAILER IN SUSTAINABILITY PEOPLE PLANET PRODUCTS Set culture of belonging and promote Aim for -50% CO2 by 2025 (scope 1&2 vs. Improve the s
Slide 32: Wrap Up & Q&A
05 WRAP UP & Q&A SANDER VAN DER LAAN CEO DOUGLAS GROUP MARK LANGER CFO DOUGLAS GROUP 32
Slide 33: Summary
SU M M ARY DOUGLAS achieved record results surpassing €4bn in total Group sales (net) for the first time (€4.1bn) in FY 2022/23, with an increase of 12.1% vs. prior year DOUGLAS is profitable: Adj. EBITDA up 22.3% to €725.9m and positive net income of €16.7m for the first time since the financial ye
Slide 34: Thank You
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Slide 35: Appendix
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Slide 36: Adjustments to EBITDA
ADJU ST M ENT S T O EBIT DA Q4 2022/23 & 12M 2022/23 Q4 2021/22 Q4 2022/23 Q4 2021/22 YTD Q4 2022/23 YTD in m€ Reported EBITDA 107.4 137.0 530.0 683.0 FY: Mainly for OWAC Consulting fees1 10.0 1.1 29.4 12.6 FY: Mainly for Restructuring costs2 -3.1 0.9 32.8 4.0 staff-related PPA -0.1 -1.8 -0.4 -2.2 r
Slide 37: Selected Segmental KPIs Q4 2022/23
SEL ECT ED SEGM ENT AL KPIS Q4 2022/23 in m€ REPORTED EBITDA CAPEX Q4 2021/22 Q4 2022/23 Q4 2021/22 Q4 2022/23 DACHNL 60.0 84.5 DACHNL 11.6 8.0 France 30.6 36.4 France 7.7 10.5 Southern Europe 27.2 23.5 Southern Europe 6.2 8.8 Central Eastern Europe 22.1 34.5 Central Eastern Europe 8.8 9.6 NB/PD 5.7
Slide 38: Deep Dive into LFL Net Sales Development
DEEP DIVE INT O L F L NET SAL ES DEVEL O PM ENT QUARTERLY OVERVIEW Q4 2021/22 Q1 2022/23 Q2 2022/23 Q3 2022/23 Q4 2022/23 DACHNL 14.8% 15.8% 25.1% 10.2% 8.3% France 3.9% 3.6% 9.6% 4.6% 5.9% Southern Europe 12.7% 16.4% 18.9% 13.4% 4.2% Central Eastern Europe 17.6% 24.1% 30.2% 14.2% 16.1% NB/PD 2.6% 1
Slide 39: Selected Segmental KPIs 12M 2022/23
SEL ECT ED SEGM ENT AL KPIS 12M 2022/23 in m€ REPORTED EBITDA CAPEX Q4 2021/22 YTD Q4 2022/23 YTD Q4 2021/22 YTD Q4 2022/23 YTD DACHNL 311.3 384.9 DACHNL 20.9 24.1 France 183.5 182.2 France 15.6 19.0 Southern Europe 75.5 123.9 Southern Europe 11.5 15.8 Central Eastern Europe 109.9 152.2 Central East
Slide 40: Net Working Capital
NET WO RKING CAPIT AL AS OF 30 SEPTEMBER 2023 257 251 in m€ 205 115 68 NWC as % of 3.1% 1.8% 6.5% 6.2% 5.0% LTM net sales Q4 2021/22 Q1 2022/23 Q2 2022/23 Q3 2022/23 Q4 2022/23 Q4 2021/22 Q1 2022/23 Q2 2022/23 Q3 2022/23 Q4 2022/23 ~6% more inventory due to the upcoming peak Inventory 719.4 737.8 77
Slide 41: DACHNL 12M 2022/23
DACH NL 12M 2022/ 23 ONGOING STRONG STORE TRAFFIC DRIVES ADJ. NET SALES GROWTH ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +18.2% (+18.9% lfl) growth in Store 1,872 business and +8.5% E-Com sales 1,639 +14.2% Adj. net sales increase in Stores due to significantly higher
Slide 42: France 12M 2022/23
F RANCE 12M 2022/ 23 BETTER ADJ. NET SALES DEVELOPMENT AND SUSTAINED HIGH MARGIN ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +4.5% (+6.2% lfl) growth in Store 781 814 business, E-Com grew by 2.6% +4.1% Adj. net sales increase at higher footfall and larger baskets in Sto
Slide 43: Southern Europe 12M 2022/23
SO U T H ERN EU RO PE 12M 2022/ 23 ADJ. NET SALES INCREASE DESPITE STORE CLOSURES, MARGIN IMPROVED AGAIN ADJ. NET SALES1 ADJ. EBITDA2 Adj. net sales1 increase driven by in m€ in m€ +6.5% (15.8% lfl) growth in Stores 623 588 +5.8% despite closures in Spain and +1.8% in E-Com business Adj. net sales1
Slide 44: Central Eastern Europe 12M 2022/23
CENT RAL EAST ERN EU RO PE 12M 2022/ 23 AGAIN, HIGHEST ADJ. NET SALES AND MARGIN GROWTH ADJ. NET SALES ADJ. EBITDA1 Adj. net sales increase driven by in m€ in m€ +26.8% (21.5% lfl) growth in Stores 556 and +22.3% in E-Com 442 +25.9% Adj. net sales increase from significantly higher footfall in Store
Slide 45: Parfumdreams / Niche Beauty 12M 2022/23
PARF U M DREAM S / NICH E BEAU T Y 12M 2022/ 23 SIGNIFICANT ADJ. NET SALES INCREASE AND STRICT COST DISCIPLINE ADJ. NET SALES ADJ. EBITDA1 Higher net sales mainly driven by in m€ in m€ Parfumdreams , especially due to 172 success of premium program and +16.9% 147 adjusted pricing strategy Adj. net s
Slide 46: Omnichannel Growth Fueled by Both Channels 12M
OMNICHANNEL GROWTH FUELED BY BOTH CHANNELS 12M 2022/23 GROUP1 STORES1 E-COM in m€ in m€ in m€ Strongly increased footfall and Slightly lower number of visitors number of customers with stable conversion rate 4,091 Lower basket sizes Increased basket sizes 3,650 +12.1% Higher net sales per item Posit
Slide 47: P&L – KPIs Further Improved
P&L – KPIS F U RT H ER IM PRO VED 12M 2022/23 in m€ Q4 2021/22 YTD Q4 2022/23 YTD ∆% Net sales 3,677.5 4,093.9 11.3% adj. Net sales 1 3,649.9 4,091.0 12.1% Cost of raw materials, -2,058.4 -2,237.2 -8.7% consumables and supplies and merchandise Gross profit 1,619.1 1,856.8 14.7% Gross profit margin 4
Slide 48: Cash Flow Statement
CASH F L O W ST AT EM ENT 12M 2022/23 In m€ Q4 2021/22 YTD Q4 2022/23 YTD Net cash flow from operating activities 468.1 584.7 Higher capex Net cash flow from investing activities -101.5 -104.1 while acquisition activities in prior year Free cash flow 366.6 480.6 Net cash flow from financing activiti
Slide 49: Cash and Financial Debt Structure
CASH AND F INANCIAL DEBT ST RU CT U RE AS OF 30 SEPTEMBER 2023 in m€ m€ x Adj. EBITDA2 Maturity Pricing Cash and cash equivalents 262 €8.5m used or reserved for RCF (€170m Volume) 0 Jan 26 E+4.50% rental guarantees (PY: E+5.25% Term Loan B (B3/B-/B) 684 Apr 26 €10.9m) (99% OID) Senior Secured Notes
Slide 50: Store Network Across Europe
ST O RE NET WO RK ACRO SS EUROPE AS OF 30 SEPTEMBER 2023 NUMBER OF STORES DEVELOPMENT 1,841 1,850 Franchise 133 132 30 September 2022 (m€) – 30 September 2023 Store openings 39 own 1,708 1,718 Store closures -30 Total 9 September 22 September 23 Store openings: 5 stores in DACHNL (DE, NL, BE), 1 in
Slide 51: Key Achievements to Date
KEY ACH IEVEM ENT S T O DAT E DOUGLAS ON A STRONG GROWTH TRAJECTORY: C.€1bn sales (net) growth delivered in the last 3 financial years fueled by a significant recovery of the store business and sustained growth of the E-Com business post-COVID STRONG BUSINESS MOMENTUM: Performing stronger than ever
Slide 52: Outlook
OUTL OOK FY 2023/24 MID-TERM TARGETS Store Net Openings More than 200 stores (next 3 years) Network Refurbishment / Relocation More than 400 stores (next 3 years) Group Around 7% growth CAGR Mid-single digit growth CAGR Sales (net) Stores (thereof around 50 % from store expansion and around 50% from
Slide 53: IFRS 16 Effects on P&L – Q4 2022/23
IF RS 16 EF F ECT S O N P&L – Q4 2022/ 23 in m€ pre IFRS 16 post IFRS 16 Delta - pro forma - Net sales 883.0 883.0 0.0 Gross profit 406.2 406.2 0.0 Other expenses decreased by €71.2m as lease expenses Other income 48.2 47.4 -0.8 (mainly for stores, warehouses Personnel expenses -161.9 -161.9 0.0 and
Slide 54: IFRS 16 Effects on P&L – 12M 2022/23
IF RS 16 EF F ECT S O N P&L – 12M 2022/ 23 in m€ pre IFRS 16 post IFRS 16 Delta - pro forma - Net sales 4,091.0 4,091.0 0.0 Gross profit 1,856.8 1,856.8 0.0 Other income 275.9 280.4 4.4 Personnel expenses -644.7 -644.7 0.0 Other expenses -1,093.8 -809.5 284.3 EBITDA 394.3 683.0 288.7 Adj. to EBITDA
Slide 55: Notice to Recipients
NO T ICE T O RECIPIENT S This presentation and any materials distributed in connection herewith (together, the taxation or other advice, and the Presentation does not take into account your objectives or legal, forward-looking statement whether as a result of new information, future events or otherw