Investor & Analyst Presentation - zooplus AG · Investor & Analyst Presentation 9M 2019 –November...
Transcript of Investor & Analyst Presentation - zooplus AG · Investor & Analyst Presentation 9M 2019 –November...
Investor & Analyst Presentation9M report, November 14th, 2019
Dr. Cornelius Patt, CEO
Investor & Analyst Presentation 9M 2019 – November 2019 | page 2
This document includes supplemental financial measures that are or may be non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation as alternatives to measures of zooplus’ financial condition, results of operations or cash flows as presented in accordance with IFRS in its Consolidated Financial Statements. Other companies that report or describe similarly titled financial measures may calculate them differently.
This document contains statements related to our future business and financial performance and future events or developments involving zooplus that may constitute forward-looking statements. We may also make forward-looking statements in other reports, in presentations, in material delivered to stockholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of zooplus’ management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond zooplus’ control, affect zooplus’ operations, performance, business strategy and results and could cause theactual results, performance or achievements of zooplus to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends. Further information about risks and uncertainties affecting zooplus is included throughout our most recent annual andinterim reports, which are available on the zooplus website, www.zooplus.de. Should one or more of these risks or uncertaintiesmaterialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of zooplus may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. zooplus neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
Safe Harbor Statement
Investor & Analyst Presentation 9M 2019 – November 2019 | page 3
zooplus continues on growth path in first nine months of FY 2019
» Sales continue to increase year-on-year, H2 2019 starts off with slight acceleration driven by a solid Q3 performance: +14% vs. PY, outperforming first two quarters 2019
» Gross margin with slight improvement driven by optimized assortment and increased average basket profitability while maintaining pricing flexibility
» Positive EBITDA of EUR 6.7m (9M 2018: EUR -0.5m) and Free Cash Flow of EUR 9.5m (9M 2018: EUR 14.3m)
» Further expansion of private label business for food & litter with positive margin contribution and strong performance of +29% sales increase vs. PY
» New customer acquisition with strong momentum: +25% registrations vs. PY, now 7.4m active customers in Europe
» Optimized direct marketing measures aiming at re-improving retention rates through reactivationwith first positive signs in short-term retention of targeted customers
» Moved closer to the consumer and kept competition at bay with further differentiation and brand building initiatives next to price leadership1 in category
» Ramped up logistics infrastructure with new fulfilment center in Italy, closing the loop on our pan-European network with complete southern coverage1) Management estimate
Investor & Analyst Presentation 9M 2019 – November 2019 | page 4
Sales increased by 14% in Q3, overall sales increase of 13% to EUR 1,104m in 9M 2019
974
1,104
9M 2018 9M 2019
+13%FX adjusted +13%
Sales (€ m)
» Sales driven by continued high customer loyalty and increased new customer business
» Absolute growth of EUR 130m vs. PY
» Revenue growth rate sequentially increased across first three quarters from 13% to 14% vs. PY
» Non-food still flat vs. PY
+13%
331 378
Q3 2018 Q3 2019
+13%FX adjusted +14%
+14%
Investor & Analyst Presentation 9M 2019 – November 2019 | page 5
HU
Source: zooplus sales, unaudited data, growth rates compared to 9M 2018; market shares based on Euromonitor market data and zooplus estimation
112m
Total market 2018 23bn
Sales zooplus in 2018
DK, SE, FI, NO
D,A,CHCZ, SK, HU, RO, SI, HR, BG, TR, GR, LV, LT, EE
ES, PT
NL, BE, LU
+9%
+5%
+10%
+7%
+11%
+25%
+14%
+15%
86m
149m
387m
84m
224m
82m
108m
1,342m
zooplus market share in 2018
7.0%
2.7%
6.0%
4.7%
4.4%
5.7%
8. 2%
5.4%
5.8%
UK, IE
IT
FR, MC
Sales growth in 9M 2019
110m
16.0%
+25%
PL
» Sales growth 9M 2019:
+ 13% (+13% fx-adjusted)
zooplus is online market leader in Europe by a distance
Market size by country/ region
Investor & Analyst Presentation 9M 2019 – November 2019 | page 6
Strong acquisition momentum in new registered customers in 9M 2019
1,748
2,221
9M 2018 9M 2019
Registered new customers (in k)
» Significant growth in new customer acquisition underlines huge potential in the category and leading market position of zooplus
» New customer acquisition mainly based on Google marketing, driven by higher spend and Google optimization
» Additional marketing activities targeted at higher brand awareness need longer time horizon
+25%
Investor & Analyst Presentation 9M 2019 – November 2019 | page 7
Engaging with consumers through targeted offline and online marketing activities on top of Google
zooplus & Burger King®team up for DogPPER snack
campaign
Shoppable posts on Instagram dedicated to
private label
Expanding addressable audience
Targeting brand awareness
Pushing private label brands
High branded content generation with >70k picture
uploads by pet owners
Investor & Analyst Presentation 9M 2019 – November 2019 | page 8
Sales retention as major business driver on continuously high level
95% 91%
9M 2018 9M 2019
Sales retention rate1
1 Sales retention (net, non-BMF)
» Subscription-like business model with recurring repurchase activity
» Retention rate impacted by lowerearly-stage retention rate due to GDPR effects
» Major focus on early-stage repeat purchase activity with better direct marketing and continued improvement of customer proposition
» Measures implemented showing first positive signs in short-term retention of targeted customers
-4%p
Investor & Analyst Presentation 9M 2019 – November 2019 | page 9
Sales retention rate remains on high levels above 90%
Further enhancing customer experience
✓ Improving mobile experience | App first
✓ Personalizing site experience
✓ Optimizing assortment
✓ Improving last-mile delivery
Tackling GDPR-related effects
✓ Incentivizing e-mail opt-ins
✓ Optimized direct mailings
✓ Customer loyalty programs in place
✓ Retargeting
Investor & Analyst Presentation 9M 2019 – November 2019 | page 10
Gross margin improved versus prior year in 9M 2019
(in % of sales)
1 Sales – CoGS
Gross margin1
» Less customer and transactional discounts
» Reduction of non-profitable orders
» Introduction of multiple parcel chargefor high-volume baskets
» Favorable sourcing conditions
» Further expanded private label share
28.0%28.5%
9M 2018 9M 2019
+0.5%p
Investor & Analyst Presentation 9M 2019 – November 2019 | page 11
Private label business growing above average
Private Label
» Private label (exclusive to zooplus) gaining traction: growth index private label / food 1.7
» High-margin business in the mid-to premium segment contributing to gross margin increase
» Launched first private label veterinary nutrition brand in 2019
» Continued strong focus on private label expansion
+29%
(food and litter sales)
GroupSales
GroupSales
13.9% 15.5%
9M 2018 9M 2019
148
114
Private label share on total food and litter sales
Investor & Analyst Presentation 9M 2019 – November 2019 | page 12
CONCEPT FOR LIFE: Unique and scientific nutritional concept focusing on pet’s life cycle and lifestyle
» Expanded CONCEPT FOR LIFE private label brand with new product line
» CONCEPT FOR LIFE- VETERINARY DIET line is carefully formulated and can be used as part of a pet’s therapeutic diet as recommended by a veterinary doctor
» Addressing premium pet food customers
» High-margin profile of product line adding to incremental value of private label line brand portfolio
L A U N C H E D I N 2 0 1 9
Investor & Analyst Presentation 9M 2019 – November 2019 | page 13
3.3% 3.5%2.5% 2.3%
19.8% 18.3%
2.0% 3.3%
Cost savings in logistics and IT/admin have been reinvested in additional marketing spend
Total margin1
1.1% 1.1% 1.0%
28.7% 28.5%
1 Gross margin + other income on sales 3 All in, including LTI & SOP
1.1%IT/Admin2
Advertising/Marketing
Logistics2
Personnel3
Payment
Total margin & cost structure (in % of sales)
2 Logistics costs of 0.8%p and Admin costs of 0.2%p in 9M 2019 reclassified to depreciation and interests according to new IFRS 16
1.0%
28.6%
1.9%
29.1%
» Cost leadership position maintained
» Operational improvement and increased value per parcel driving logistics costs down by 0.8%p (excluding IFRS 16)
» Efficiency gains in cost structure reallocated to marketing spend for further growth
» On-top marketing spend in Q2/Q3 2019 for zooplus 20-year campaign
EBITDA0.0% 0.6%
9M 2018 9M 2019
Investor & Analyst Presentation 9M 2019 – November 2019 | page 14
» Now 12 fulfillment centers across Europe
» Current capacity runs well into 2021
» All FCs operated by logistics specialist partners; almost no capex requirement for zooplus
» SKU allocation, replenishment, order routing and packing algorithms intellectual property of zooplus
» Continued focus on last-mile optimization by internal improvements and together with local last mile providers
Ramped up logistics capacity and completed southern European coverage
2013
2015
Fulfillment center (FC)
2009
2016
2017/18
2000/2011
2017
2018
2019
2018
Opened new ItalianFC in Q2 2019
Investor & Analyst Presentation 9M 2019 – November 2019 | page 15
Positive EBITDA and Free cash flow in 9M 2019
-0.5
6.7
-0.0 %
0.6 %
EBITDA (EUR m)
9M 2018 9M 2019
(in % of sales)
-7.6 -13.9
EBITDA 2019 based on full IFRS 16 application; IFRS 16 impact to EBITDA € 11.2 m, of which € 8.8 m logistics (0.8%p) and € 2.4 m admin costs (0.2%p) go into depreciation
EBT
+7.2m
Cash flow fromoperatingactivities
Cash flow frominvestingactivities
Free cash flow2.5 %
12.9
-3.4
3.1 %
9.5
Free Cash Flow impact in 9M 2019 due to IFRS 16: EUR +10.3m
Cash Flow
Investor & Analyst Presentation 9M 2019 – November 2019 | page 16
Q & A
Investor & Analyst Presentation 9M 2019 – November 2019 | page 17
Key financials 9M 2019
1 impairment expenses of financial assets reclassified to payment2 own work capitalized reclassified to personnelDue to the application of IFRS 16 in 9M 2019, additional € 8.8 m logistics and € 2.4 m G&A costs are reclassified to depreciation
P&L 9M 2019 9M 2018 Δ abs Δ %p
in € m
Sales 1104.3 973.8
abs. 130.5
Δ in % 13.4%
Other income 6.5 6.1 0.5 0.0%p
0.6% 0.6%
COGS -789.4 -701.0 -88.4 0.5%p
-71.5% -72.0%
Logistics -201.8 -193.1 -8.7 1.6%p
-18.3% -19.8%
Payment1 -12.1 -10.4 -1.7 0.0%p
-1.1% -1.1%
Customer acquisition -36.9 -19.3 -17.7 -1.4%p
-3.3% -2.0%
Personnel2 -38.7 -32.4 -6.2 -0.2%p
-3.5% -3.3%
G&A -25.2 -24.1 -1.0 0.2%p
-2.3% -2.5%
EBITDA 6.7 -0.5 7.2 0.7%p
0.6% 0.0%I&DA -20.6 -7.1 -13.5 -1.1%p
-1.9% -0.7%
EBT -13.9 -7.6 -6.3 -0.5%p
-1.3% -0.8%EPS in EUR (basic) -1.49 -0.79
Balance Sheet
Total Assets 357.6 281.0 76.6
Equity (Ratio in %) 101.8 107.0 -5.2
28.5% 38.1%
Cash Flow
Free Cash Flow 9.5 14.3 -4.7
Investor & Analyst Presentation 9M 2019 – November 2019 | page 18
Profit & Loss 9M 2019
abs % abs %
Sales 1104.3 100.0% 973.8 100.0%
Other income 6.5 0.6% 6.1 0.6%
Cost of materia ls -789.4 -71.5% -701.0 -72.0%
Personnel costs -38.7 -3.5% -32.4 -3.3%
Other expenses -276.0 -25.0% -247.0 -25.4%
thereof logistics / fulfillment -201.8 -18.3% -193.1 -19.8%
thereof marketing -36.9 -3.3% -19.3 -2.0%
thereof payment -12.1 -1.1% -10.4 -1.1%
thereof other costs -25.2 -2.3% -24.1 -2.5%
Earnings before depreciation,
interest and taxes (EBITDA) 6.7 0.6% -0.5 0.0%
Depreciation -19.5 -1.8% -6.6 -0.7%
Financia l income 0.0 0.0% 0.0 0.0%
Financia l expenses -1.1 -0.1% -0.5 0.0%
Earnings before taxes (EBT) -13.9 -1.3% -7.6 -0.8%
Taxes on income 3.3 0.3% 1.9 0.2%
Consolidated net result -10.6 -1.0% -5.7 -0.6%
Differences from currency
trans lation 0.0 0.0% -1.0 -0.1%
Hedge reserve -0.1 0.0% 0.7 0.1%
Items that may be relclassified
subsequently to profit or loss -0.1 0.0% -0.3 0.0%
Comprehensive income -10.7 -1.0% -6.0 -0.6%
Earnings per share in €
bas ic -1.49 - -0.79 -
di luted -1.49 - -0.79 -
in € m9M 2019 9M 2018
Investor & Analyst Presentation 9M 2019 – November 2019 | page 19
Balance Sheet as of September 30th, 2019
Assets
in € mSept. 30th.
2019
Dec. 31st.
2018Δ abs
A. Non-current assets
I. PP&E 5.7 55.9 -50.1
II. Right-of-use assets 76.5 0.0 76.5
III. Intangible assets 13.3 14.2 -0.9
IV. Deferred tax assets 2.6 0.0 2.6
Total non-current assets 98.1 70.0 28.1
B. Current assets
I. Inventories 117.1 107.6 9.5
II. Advance payments 0.1 0.4 -0.3
III. Accounts receivable 35.5 28.1 7.3
IV. Other current assets 25.7 16.1 9.6
V. Contract assets 25.2 19.0 6.2
VI. Tax receivables 1.0 0.9 0.1
VII.Derivative financial
instruments0.1 0.0 0.1
VIII. Cash and cash equivalents 54.9 59.5 -4.6
Total current assets 259.5 231.7 27.8
357.6 301.8 55.9
Equity and Liabilities
in € mSept. 30th.
2019
Dec. 31st.
2018Δ abs
A. Equity
I. Capital subscribed 7.1 7.1 0.0
II. Capital reserves 102.2 100.8 1.5
III. Other reserves -1.8 -1.8 -0.1
IV. Profit and Loss carried forward -5.7 4.9 -10.6
Total equity 101.8 111.1 -9.2
B. Non-current liabilities 58.2 41.4 16.8
C. Current liabilities
I. Accounts payable 134.8 99.7 35.1
II Derivative financial instruments 0.2 0.1 0.2
III. Other current liabilities 21.6 19.9 1.7
IV. Contract liabilities 19.1 17.1 2.0
V. Tax liabilites 0.1 0.1 -0.1
VI. Finance lease 19.2 9.8 9.5
VII. Provisions 2.5 2.6 -0.1
VIII. Deferred income 0.0 0.0 0.0
Total current liabilities 197.6 149.3 48.3
357.6 301.8 55.9
Investor & Analyst Presentation 9M 2019 – November 2019 | page 20
Cash flow 9M 2019
in € m 9M 2019 9M 2018
EBT -13.9 -7.6
Cash flow from operating activities 12.9 20.4
Cash flow from investing activities -3.4 -6.1
Free cash flow 9.5 14.3
Cash flow from financing activities -14.2 -3.8
Currency effects on cash and cash equivalents 0.1 -0.4
Net change of cash and cash equivalents -4.6 10.0
Cash on hand, bank deposits 54.9 61.2
Investor & Analyst Presentation 9M 2019 – November 2019 | page 21
Major KPIs per quarter
Major KPIs Q1 2019 Q2 2019 Q3 2019 Q4 2019
Sales (in € m) 363.2 363.5 377.7
Δ vs. PY 12.6% 13.5% 14.1%
Private label growth vs. PY 29% 29% 29%
New customer count (in k) 818 792 825
t/o registered new customers (in k) 739 721 761
t/o unregistered new customers (in k) 79 71 64
Sales retention (net, Non-BMF) 93% 92% 91%
Total Margin 28.8% 29.4% 29.2%
Cost ratio 28.2% 28.8% 28.6%
EBITDA (in € m) 2.2 2.3 2.2
EBITDA 0.6% 0.6% 0.6%