Global Fashion Group S.a. · XETR:GFG
Global Fashion — Q2 2023 Earnings Presentation
30 slides from Global Fashion's earnings presentation, Aug 10, 2023
Slide 1: Fashion & Lifestyle Destination in LATAM, SEA & ANZ
#1 FASHION & LIFESTYLE DESTINATION IN LATAM, SEA & ANZ Q2 2023 RESULTS PRESENTATION 10 August 2023
Slide 2: Weak demand impacted volumes and profitability in Q2
WEAK DEMAND IMPACTED VOLUMES AND PROFITABILITY IN Q2 €346.5m 42.0% (7.2)% NMV GROSS PROFIT MARGIN ADJ. EBITDA MARGIN (14.7)% yoy1 (1.4)ppt yoy (5.7)ppt yoy 10.1m 5.4m 2.4 ACTIVE CUSTOMERS ORDERS ORDER FREQUENCY (19.0)% yoy (28.1)% yoy (1.2)% yoy Note: KPI definitions are included in the Appendix. (1
Slide 3: Segment Results & Business Updates
SEGMENT RESULTS & BUSINESS UPDATES 3 Q2 2023 RESULTS PRESENTATION
Slide 4: Delivering against our key priorities
DELIVERING AGAINST OUR KEY PRIORITIES BEST-IN-CLASS PARTNER OF CHOICE FOR BRANDS PEOPLE & PLANET POSITIVE CUSTOMER EXPERIENCE • Broad and relevant assortment • Unlocking complex markets • Climate action • Inspiring and seamless digital experience • Offering flexible business models • Circularity and
Slide 5: Implementing cost actions across our markets
IMPLEMENTING COST ACTIONS ACROSS OUR MARKETS CAREFUL CUSTOMER RESTRICT OVERHEAD MANAGEMENT OF ACQUISITION & CAPITAL INVENTORY LEVELS DISCIPLINE INVESTMENTS 5 Q2 2023 RESULTS PRESENTATION
Slide 6: LATAM: Executing our strategy in a challenging macro environment
LATAM SEA ANZ LATAM: EXECUTING OUR STRATEGY IN A CHALLENGING MACRO ENVIRONMENT H1/23 GROWTH & PROFITABILITY Q2/23 KEY METRICS NMV (€M) (16.8)%1 273.0 Q2/22 Q2/23 22-23 217.3 NMV (€M) 163.6 123.0 (19.0)%1 ADJ. EBITDA MARGIN Revenue (€M) 99.4 71.8 (22.5)%1 (7.3)ppt Gross Margin (%) 46.0 46.2 0.2ppt (
Slide 7: LATAM: New app and improved assortment productivity
LATAM SEA ANZ LATAM: NEW APP AND IMPROVED ASSORTMENT PRODUCTIVITY ELEVATING CUSTOMER EXPERIENCE WITH THE NEW APP CURATING OUR ASSORTMENT BRAZIL, CHANGE ON H1/21-23 LATEST ANDROID APP July version PLATFORM RATIONALISATION >55% fewer >40% fewer 100% rollout Retail & Marketplace brands total SKUs onlin
Slide 8: SEA: Focusing on cost discipline to offset fixed cost deleverage
LATAM SEA ANZ SEA: FOCUSING ON COST DISCIPLINE TO OFFSET FIXED COST DELEVERAGE H1/23 GROWTH & PROFITABILITY Q2/23 KEY METRICS NMV (€M) (12.2)%1 Q2/22 Q2/23 22-23 200.9 172.6 NMV (€M) 106.7 84.8 (16.9)%1 ADJ. EBITDA MARGIN Revenue (€M) 73.7 54.5 (23.0)%1 +0.9ppt Gross Margin (%) 37.4 42.0 4.6ppt (1.
Slide 9: SEA: Targeting our most valuable, core fashion customers
LATAM SEA ANZ SEA: TARGETING OUR MOST VALUABLE, CORE FASHION CUSTOMERS FASHION FOCUSED LOYALTY PROGRAMME REBRAND IN H1… …INCREASING CUSTOMER LOYALTY AND ENGAGEMENT AS OF H1/23 +70% ZVIP customer acquisition since rebrand Personalised app journey +5ppts Free (& faster) delivery +5ppts ~3x 13% yoy hig
Slide 10: ANZ: Operating in a very discount led market
LATAM SEA ANZ ANZ: OPERATING IN A VERY DISCOUNT LED MARKET H1/23 GROWTH & PROFITABILITY Q2/23 KEY METRICS NMV (€M) (5.2)%1 Q2/22 Q2/23 22-23 289.5 260.0 NMV (€M) 166.3 138.7 (9.0)%1 ADJ. EBITDA MARGIN Revenue (€M) 122.9 98.2 (12.8)%1 (7.3)ppt Gross Margin (%) 45.0 39.4 (5.6)ppt 2.6% (4.7)% Active C
Slide 11: ANZ: Focusing on margin recovery with retail discipline and platform acceleration
LATAM SEA ANZ ANZ: FOCUSING ON MARGIN RECOVERY WITH RETAIL DISCIPLINE AND PLATFORM ACCELERATION TARGETED INITIATIVES TO ADDRESS RETAIL PRESSURE FULFILLED BY GFG ENABLING MARKETPLACE GROWTH LAUNCHED IN H1/23 8 BRANDS LIVE More flexible PULL NEW SEASON STOCK FORWARD Implementing business models to R
Slide 12: Our progress as a platform business
OUR PROGRESS AS A PLATFORM BUSINESS MARKETPLACE FULFILLED BY GFG & CROSS-DOCKING PLATFORM SERVICES SHARE OF NMV SHARE OF MARKETPLACE SHIPPED ITEMS SHARE OF REVENUE +4ppts +4ppts +1.4ppts 39% 35% 38% 4% 34% 2% H1/22 H1/23 H1/22 H1/23 H1/22 H1/23 Note: KPI definitions are included in the Appendix. 12
Slide 13: Ensuring our future is People & Planet Positive
ENSURING OUR FUTURE IS PEOPLE & PLANET POSITIVE PEOPLE & PLANET POSITIVE REPORT PUBLISHED APRIL 2023 2022 PROGRESS ON OUR 2030 GOALS 82% of directly purchased and own brand packaging is made from recycled or compostable materials 91% of waste is diverted from landfill 29% • Sustainability website an
Slide 14: Group Results & Guidance
GROUP RESULTS & GUIDANCE 14 Q2 2023 RESULTS PRESENTATION
Slide 15: Maintaining order frequency as active customers reflect weaker demand
MAINTAINING ORDER FREQUENCY AS ACTIVE CUSTOMERS REFLECT WEAKER DEMAND ACTIVE CUSTOMERS ORDER FREQUENCY (M) (X) (19.0)% (1.2)% 2.5 12.5 2.4 10.1 H1/22 H1/23 H1/22 H1/23 Note: KPI definitions are included in the Appendix. 15 Q2 2023 RESULTS PRESENTATION
Slide 16: Lower volumes partially offset by order value impacted by inflation
LOWER VOLUMES PARTIALLY OFFSET BY ORDER VALUE IMPACTED BY INFLATION NMV Retail Marketplace ORDERS AVERAGE ORDER VALUE (€M) (M) (€) (14.7)%1 (28.1)% +18.7%1 7.6 63.8 436.6 57.8 346.5 5.4 35% 39% Q2/22 Q2/23 Q2/22 Q2/23 Q2/22 Q2/23 (11.2)%1 (24.0)% +16.9%1 763.4 13.9 649.9 61.6 35% 10.5 55.0 39% H1/22
Slide 17: Margin benefits from platform transition offset by higher discounts and fixed cost deleverage
MARGIN BENEFITS FROM PLATFORM TRANSITION OFFSET BY HIGHER DISCOUNTS AND FIXED COST DELEVERAGE REVENUE GROSS PROFIT / MARGIN ADJUSTED EBITDA / MARGIN (€M) (€M) (€M) (18.6)%1 (1.4)ppt (5.7)ppt 295.6 (1.5)% 223.8 128.2 (4.5) (7.2)% 94.0 43.4% 42.0% (16.1) Q2/22 Q2/23 Q2/22 Q2/23 Q2/22 Q2/23 (14.9)%1 (1
Slide 18: Careful management of inventory with H1 impacted by lower demand
CAREFUL MANAGEMENT OF INVENTORY WITH H1 IMPACTED BY LOWER DEMAND INVENTORY, TOTAL NET OF PROVISIONS (€M) (33)% yoy1 €212m €187m €171m €135m Dec-21 Jun-22 Dec-22 Jun-23 Aged Inventory (>180 days) as a % of Gross Inventory 17% 22% 23% 26% (1) Constant currency growth rate. 18 Q2 2023 RESULTS PRESENTAT
Slide 19: Applying efficiency measures to address current cost deleverage
APPLYING EFFICIENCY MEASURES TO ADDRESS CURRENT COST DELEVERAGE COSTS % OF NMV1 H1/19 H1/20 H1/21 H1/22 H1/23 19-23 FULFILMENT 17.0% 15.6% 15.6% 16.0% 16.1% (0.9)ppt MARKETING 8.0% 6.8% 8.0% 6.9% 6.5% (1.5)ppt TECH & ADMIN 13.5% 12.9% 10.7% 12.2% 14.7% 1.2ppt NMV GROWTH YOY2 23.8% 11.0% 36.9% 2.2%
Slide 20: Weaker Adj. EBITDA compensated by working capital improvements and capex discipline
WEAKER ADJ. EBITDA COMPENSATED BY WORKING CAPITAL IMPROVEMENTS AND CAPEX DISCIPLINE (€M) Q2/22 Q2/23 PRO-FORMA CASH BALANCE Adj. EBITDA (4.5) (16.1) (€M) FUNDING Cash Lease Costs (5.2) (5.0) OPERATIONS Working Capital 15.9 22.9 489 467 TOTAL 6.2 1.8 (8) (14) Tech Capex (8.2) (5.9) CAPEX PP&E Capex (
Slide 21: FY2023 Guidance
FY2023 GUIDANCE NMV REVENUE ADJ. EBITDA CAPEX (15)-(10)% c.€0.9bn (8)-(6)% c.€30m c.€1.3-1.4bn LONGER TERM ADJ. EBITDA BREAKEVEN 2024 AMBITIONS: NORMALISED FREE CASH FLOW POSITIVE AT NMV OF €2.2 to 2.5bn Note: At 30 June 2023 closing exchange rates. 21 Q2 2023 RESULTS PRESENTATION
Slide 22: Q&A
Q&A 22 Q2 2023 RESULTS PRESENTATION
Slide 23: Appendix
APPENDIX 23 Q2 2023 RESULTS PRESENTATION
Slide 24: FX Sensitivity
FX SENSITIVITY €M IMPACT ON: CURRENCY CHANGE NMV REVENUE ADJ. EBITDA Q2/23 vs. Q2/22 ARGENTINA (ARS) (57.6)% (18.7) (3.0) (1.4) AUSTRALIA (AUD) (8.3)% (12.8) (4.6) 0.2 BRAZIL (BRL) (2.8)% (2.2) (2.4) 0.2 OTHER (1.3)% (4.9) (2.7) 0.3 IMPACT ON Q2/23 AT Q2/22 FX RATES (7.5)% (38.5) (12.7) (0.7) H1/23
Slide 25: Issued Share Capital
ISSUED SHARE CAPITAL SHARE INFORMATION EMPLOYEE SHARE OPTION PROGRAMME WEIGHTED AVERAGE EXERCISE PRICE OUTSTANDING CALL OPTIONS2 Common shares in dematerialised Type of Share form with a nominal value of €0.01 €0.01 170,901 €5.99 2,602,376 Stock Exchange Frankfurt Stock Exchange €10.27 3,236,776 €30
Slide 26: Convertible Bond 2021
CONVERTIBLE BOND 2021 PRICING TERMS Outstanding Issue Size in the Public Market €279.9 million CONVERTIBLE BOND REPURCHASE 2022 Status Senior Unsecured Maturity 7 Years • On 27 April 2022, the Group repurchased Bondholder Put 15 March 2026 outstanding Convertible Bonds due 2028 via a modified Dutch
Slide 27: Group Tax Loss Carry Forwards as at FY2022
GROUP TAX LOSS CARRY FORWARDS AS AT FY2022 • Can be carried forward and offset against €M DEC-22 TIME LIMIT TO CARRY FORWARD future taxable income subject to local tax rules and limitations LATAM 241 Predominantly Brazil (indefinitely) • Brazil is the only country with a specific restriction – broug
Slide 28: KPI Definitions
KPI DEFINITIONS Active Customers is defined as the number of customers who have purchased at least one item after ACTIVE CUSTOMERS cancellations, rejections and returns in the last twelve months Adjusted EBITDA is EBITDA adjusted for share-based payment (income) / expenses, Group recharges, IAS 29 H
Slide 29: Financial Calendar – Upcoming Events
FINANCIAL CALENDAR – UPCOMING EVENTS DATE EVENT LOCATION 19 September 2023 Berenberg & Goldman Sachs 12th German Corporate Conference Munich 20 September 2023 Baader Investment Conference Munich 9 November 2023 Q3 2023 Results Virtual 15-17 November 2023 Morgan Stanley European Technology, Media & T
Slide 30: Disclaimer
DISCLAIMER Certain statements included in this document are forward-looking statements. Forward-looking statements can typically be identified by the use of words such as “expects”, “may”, “will”, “could”, “should”, “intends”, “plans”, “predicts”, “envisages” or “anticipates” or other words of simil