Investor & Analyst Presentation April Dr. Cornelius Patt, CEO Andreas Grandinger, CFO

Transcription

1 Investor & Analyst Presentation April 2018 Dr. Cornelius Patt, CEO Andreas Grandinger, CFO

2 Safe Harbor Statement 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 zooplusthat 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 the actual results, performance or achievements of zooplusto 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 zooplusis included throughout our most recent annual and interim reports, which are available on the zoopluswebsite, Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of zooplusmay 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 forwardlooking 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. Investor & Analyst Presentation April 2018 page 2

3 zooplus investment hypothesis Strong historic development to No. 1 specialist online pet retailer and No. 2 in total market online and offline 1 4 High moat through loyal customer base, cost leadership position and dedicated logistics operations and IT infrastructure Large, non-cyclical and growing market with ample room for further growth 2 5 Solid financial base with room for further scale and cash flow optimization Fast growing business with recurring revenues model through kind of subscription 3 6 Founder driven business with long-term perspective and focus on shareholder value Investor & Analyst Presentation April 2018 page 3

4 zooplusis Europe s leading online retailer for pet supplies Sales ( ( m) m) Key figures 2017 Average sales growth % p.a. 1, Years of online experience 8,000 SKUs Active countries 5.8 m Active customers 1.4 bn Website impressions m Unique visitors m Orders 25 m Parcels shipped 11 European warehouses Employees in 8 offices Investor & Analyst Presentation April 2018 page 4

5 European pet supplies market is a very attractive market Pet supplies market in Europe e (gross sales bn) CAGR +3% p.a » Ownership of pets is on the rise in Europe» Humanization of pets drives spending» Market is resilient through economic cycles» Consumables recurring revenue subscription like» No technology and fashion obsolescence risk» Low product return rates e Source: Euromonitor 2016 and zooplus estimation Investor & Analyst Presentation April 2018 page 5

6 The online share is expected to continue to grow significantly category attractive for online sales Current online share and long-term hypothesis ( bn) Total market (gross) > 30» Consumable products» Repeat purchase pattern» Projectable consumption, low seasonality Offline share Online share 90-92% 80-85% 8-10% 15-20% e < 50% > 50% Long-term Online market opportunity > 15» Standardized products» Well-known brands» Attractive prices» Product information very important» Convenience aspect (heavy & bulky) Long-term growth potential of online should leave tremendous room for growth Investor & Analyst Presentation April 2018 page 6

7 The core drivers of zooplus business development Market leadership» Online by a wide margin and the strongest player in the overall market online and offline» Recurring revenue model built on consumption cycle and customer loyalty Best partner for premium brands» National champions/ Multinationals/Niche brands Sales Suppliers Costs Most efficient operator» Scaling and specialization built to purpose» Superior product experience» Critical size in all markets Financials and metrics Investor & Analyst Presentation April 2018 page 7

8 zoopluscontinues to put sales growth and customer retention first Sales ( m) ,111 New customer sales (1 st year) % % % % % % % 94% 93% % 92% 94% 1 28% 93% 93% 1 22% Repeat customer sales Sales growth vs. PY ) in local currencies Investor & Analyst Presentation April 2018 page 8

9 In a large and fragmented market zooplusdominates online and is rapidly catching up with the offline leaders Market share zooplus and competitors 2017 Fressnapf Net sales 2017 : ~ 1.7 bn (+ 6%) Online: ~ 0.06 bn (+ 20% vs. PY) Total pet supplies market Europe (incl. VAT): Pets at Home Net sales 2017: ~ 1.0 bn (+7%) Online: ~ 0.05 bn Other onliners: ~ 26 bn (~ 23 bnnet) CAGR: : +3% Net sales 2017: 1.1 bn(+22%) ~ 50% market share zooplus online ~ 5% market share online and offline Net sales 2017: n/a Source: Euromonitor; company information, zooplus estimation Investor & Analyst Presentation April 2018 page 9

10 zooplusreached No. 2 position in Europe in 2017 and is well on its way towards market leadership Net sales and growth 2017 European market (EUR bn) 1 1) + 6% Online ~ (+100 EUR m) 2 3 2) +22% +7% Online ~ (+202 EUR m) (+65 EUR m) Strategic goal Close the gap towards the current number 1 in Europe 4 3) +22% n/a Working towards market leadership in the total market (online and offline) Benefitting from all the advantages of size and market leadership Source: Company data for 2017 figures; zooplus assumptions 1) Net sales estimated from gross sales 2) Includes services 3) amazon international growth rate Investor & Analyst Presentation April 2018 page 10

11 zooplusis the only real pan-european pet retailer in Europe online offline» Is more than 10 bigger than the No. 2 online specialist in Europe» Is the only true pan- European pet retailer» Is the only pet specialist with a pan-european logistics infrastructure» Is the only retailer with a European-wide customer service (400 agents) local international Investor & Analyst Presentation April 2018 page 11

12 zooplusis the online market leader in all geographies of Europe with the widest possible base for further growth Sales 2017» Sales 2017: 1,111m, sales growth rate +22%» Double-digit sales growth rates in all countries Sales zooplus in 2017 zooplusmarket share in 2017 Total market bn 1,111m 4.9% Sales growth in m 3.9% ES, PT 96m 2.4% UK, IE +27% 187m 5.1% +27% (fx-adj.) 124m 7.0% NL, BE, LU FR, MC +22% +22% 70m 4.5% 335m 6.2% DK, SE, FI, NO 90m 3.7% D,A,CH +25% IT 80m 12.2% +18% +21% PL +41% 62m 4.5% HU +37% CZ, SK, HU, RO, SI, HR, BG, TR, GR, LV. LT, EE Source: zooplussales, unaudited data, growth rates compared to 2016; market shares based on Euromonitor 2016 market data and zooplus estimation Investor & Analyst Presentation April 2018 page 12

13 Customer loyalty the winning factor of the business model is at very high levels Retention rates Cohort analysis Sales ( m) Ø 85% % % a Ø 79% % 88% % a % % 95 96% 91 97% a % 87 91% 79 99% 78 99% 77 99% % 62 90% 56 99% % % % % 46 98% 45 99% 104% 101% % 47 94% 100% 101% 104% 102% % a 2010 a+1 <=2009 Ø 91% Reading example: 2011 a = sales of 2011 s new customers in ) in local currencies Ø 94% Ø 93% 1) a Ø 92% Ø 94% 1) a 253 Ø 93% Ø 93% 1) 86% 1, a Investor & Analyst Presentation April 2018 page 13

14 Account value and customer account retention increase with length of customer life Projected sales per active account out of 2017 (in ) Cumulated sales per account created over a+10 years: 1,730 a a+1 a+2 a+3 a+4 a+5 a+6 a+7 a+8 a+9 a+10 a: year of acquisition = % 1) 79% 81% 89% 93% 94% 95% 95% 96% 96% 95% 100% 1) 79% 64% 57% 53% 50% 47% 45% 43% 42% 40% ) customers with at least one consecutive purchase after first transaction 2) Projected rate based on account retention rate of respective cohort 3) Average projected share of remaining accounts based on account survival rate Account survival rate 2) Share of remaining accounts 3) Sales per account created Investor & Analyst Presentation April 2018 page 14

15 Customer lifetime value is strongly positive 2017 a+5 projected a+10 projected 2017 netsalesper account in EUR (cum.) ,017 1,730 (2016) (206) (1,049) (1,812) (2016) 19 (15) Customer acquisition costs 2 (100) (172) CM cumulative5 years plus acquisition year CM cumulative 10 years plus acquisition year 1 Onlyaccountswithrepurchasingactivitybasedon cohortspecificretentionrate (incl. fx-effects) 2 Traffic acquisitioncostsper newaccountwithrepurchasingactivity 3 CM = contribution margin = net sales all variable costs (excl. acquisitioncosts) = 9.5% Investor & Analyst Presentation April 2018 page 15

16 Markets continue to be price competitive zooplus prepared to defend its strategic position Product mix 1 Gross margin 2 Total margin 3 in % of sales in % of sales + 1.1%p 82.4% 83.5% -0.6%p -0.6%p 29.8% 29.2%» Continued focus on sustainable dog/cat food customers for higher lifetime value 25.0% 24.4%» Ongoing price competition in the markets» zoopluswill defend its high customer retention Share of food and cat litter on sales 2 Sales -CoGS 3 Gross margin + other income on sales Investor & Analyst Presentation April 2018 page 16

17 Product categories have different impact on gross margin development Target Continued strong sales growth in all categories Gross margin drivers Food» Core assortment/ main driver for retention» Focus: competitive pricing Non-Food» Supplementary assortment» Focus: gross margin improvement Private label» Differentiating assortment» Focus: mid-term gross margin driver Share on zooplus sales % 17% 13% of food and cat litter Investor & Analyst Presentation April 2018 page 17

18 Online private label business gets build up over time by converting the existing customer base to own label brands 13% Share of total food 5% Share of first order sales 1.5 Growth index private label / food Further significant increase in private label share until 2020 Investor & Analyst Presentation April 2018 page 18

19 zoopluswill continue its strong effort to further improve cost leadership position in the category Total margin & Cost structure (in % of sales) 40.9% 42.4% 6.1% 32.8% Total margin % 29.8% 29.2% -1.2%p -1.8%p -0.6%p vs. prior year 24.0% 31.1% 1.8% 29.8% 1.5% 21.2% 20.1% 27.8% 28.8% 1.4% 1.7% 19.4% 19.8% 1.7% 5.6% 1.3% 1.1% 1.1% 1.0% 2.9% 3.5% 2.7% 3.0% 5.0% 3.9% 3.5% 3.2% 3.2% Advertising/ Marketing Logistics 2 Payment IT/Admin/ (incl. depreciation Personnel 3 & interest) 1 gross margin + other income on sales 3 all in, including LTI & SOP m logistics costs of 2017 reclassified to depreciation according to IAS 17 Investor & Analyst Presentation April 2018 page 19

20 zooplusinvestment mode will continue in 2018 and further improve zooplus market position Competitive pricing Marketing costs IT product development Logistics Private label» Defending high loyalty of existing customers» Acquisition of new customers» New customer acquisition for high customer lifetime value» Increased investment into mobile» Improved product and user experience» Improved internal processes and efficiencies» Close white spots in the distribution network» Increase capacity and speed up delivery to customers» Expansion of private label share» Development of new brands Improved strategic position and driver for further growth Investor & Analyst Presentation April 2018 page 20

21 Comparison of cost structure significant advantage for zooplus Cost ratio - selected competitors 40% 43% 41% 48% 43% 29% Cost advantage for zooplus of more than 10%-points Source: annual reports 2016 Fressnapf 2015: all costs except for costs of goods sold, including depreciation and interest Investor & Analyst Presentation April 2018 page 21

22 zooplusearnings before tax (EBT) in 2017 reflects investment in marketing, IT and logistics infrastructure EBITDA ( m) EBT ( m) Operating CF ( m) in % of sales 2.2 % 0.8 % in % of sales 2.0 % 0.4 % m logistics costs of reclassified to depreciation according to IAS 17 Investor & Analyst Presentation April 2018 page 22

23 Profitability of repeat customers business invested to grow the business with long-term perspective Repeat customer and new customer contribution ( m) Repeat customers (consecutive year s sales) New customers (sales in the year of acquisition) Sales % of total z+ EBT EBTmargin EBTmargin Sales % of total z+ EBT % % % -5-2% % % % -17-6% Reduction of profit margins in 2017 resulting from deliberate decision of stronger investment focus to improve overall zooplusstrategic position and long-term valuation. Investor & Analyst Presentation April 2018 page 23

24 zooplusis the only specialist player in the category with a pan-european logistics network» New FC Birmingham (UK) since 03/2017, new FC in Mühldorf (DE) since 09/2017» New FC in Boleslawice (PL) from 11/2017 on; additional capacity in Wroclaw (PL) since 10/2017» All centers managed as one integrated pan-european network» All FCs operated by partners; no capex for zooplus» SKU allocation, replenishment, order routing and packing algorithms intellectual property of zooplus / Fulfillment center (FC) 2013 Investor & Analyst Presentation April 2018 page 24

25 zooplus fulfillment centers Tilburg (NL) Hörselgau(DE) Wroclaw (PL) Chalon (FR) Antwerp (BE) 34,000 sqm 7-8,000 SKUs 30,000 sqm 7-8,000 SKUs 29,000 sqm 5-7,000 SKUs 21,000 sqm 5-6,000 SKUs 16,000 sqm 5-6,000 SKUs Rhenus Rhenus Dirks Rhenus Katoen Natie Additional medium FCs: Strasbourg (FR), Birmingham (UK), Mühldorf (DE), Boleslawice (PL) Additional small FCs: Jirikov(CZ), Istanbul (TR) Capex per center: m 1) provided by partners 1) Including facility / building for big zooplus fulfillment center Investor & Analyst Presentation April 2018 page 25

26 zoopluslogistics structure is tailor-made for heavy and bulky products in inbound and outbound logistics zooplus logistics Tilburg, Netherlands Tilburg, Netherlands Antwerp: 16,000 sqm Logistics partner: Katoen Natie Antwerp, Belgium Antwerp, Belgium Source: zooplus Investor & Analyst Presentation April 2018 page 26

27 Distribution to the customer with the leading local last mile providers» Last mile distribution with external partners (DSPs)» zooplusoperates approx. 60 relations of line hauls (trunk) and direct DSP connections» At least two DSPs for every country offered for better customer service» Management of parcel allocation to FCs and DSPs by zooplusowned algorithms» Focus on delivery speed and efficiency / Fulfillment center (FC) Hubs (DSP) -shown are selected relations from FC to Hub of DSPs Investor & Analyst Presentation April 2018 page 27

28 zoopluslogistics system is an intelligent network solution between fulfillment centers and destination countries Example Cat s Best (cat litter): article flow between fulfillment centers and country of destination for a period of three months Fulfillment center PL WRO HOE TIL SXB ANR CHA BHX DE IT NL GB FR ES Country of destination Criteria for choice of logistics center 1 :» No. of products in parcel» Top seller/long-tail» DSP chosen» Available stock 1 selective Investor & Analyst Presentation April 2018 page 28

29 Logistics cost differ by countries overall unit economics will further improve in logistics Logistics costs 1) % 18.4% best-in-class 23.2% 20.7% 12.2% 13.4% 15.5% (19.4%) (17.6%) (12.6%) (13.3%) (14.9%) (21.5%) zooplus logistics all-in zooplus logistics only variable (19.5%) PL CZ DE ES IT 2016 in % of sales Higher logistics cost ratios due to lower basket unit costs further improved 1) Inbound & outbound logistics, line haul, distribution, packaging as a percentage of sales Investor & Analyst Presentation April 2018 page 29

30 zooplus is a digital multi-channel retailer» Mobile share of orders around 30% and growing» Mobile will be the dominant channel in future» Full responsive frontend for all devices» Own zooplussmartphone Apps (ios and Android)» Significant investment in mobile channel» More technical features and optimized UX to come in future» Online activities adapted to mobile usage Investor & Analyst Presentation April 2018 page 30

31 Subscription will offer additional convenience for regulars Subscription» Live in Germany since end Q3 2017» Flexible options for delivery frequency» Large range of brands available for subscription» One additional option for zooplus customers to facilitate purchasing» Too early to communicate specific KPIs» Further roll-out planned Investor & Analyst Presentation April 2018 page 31

32 Vet search as a first step to integrate additional services on the zooplus platform Vet search» Live in Germany since end Q2 2017» More than 13,000 vets integrated» Search for vets with opening hours and driving directions» Rating of vets by registered zooplus customers» Access for vets to update their data» Further roll-out planned Investor & Analyst Presentation April 2018 page 32

33 Strong internal IT development teams as driving force for future developments and differentiation Munich, DE Krakow, PL» Four internal IT hubs plus one external hub» More than 150 IT developers further built-up planned» Additionally external experts as freelancers» Focus on internal systems, processes &algorithms and product features Madrid, ES Vienna, AT Bucarest, RO (External partner) Strong differentiating factor towards the competition 1 1 excluding amazon Investor & Analyst Presentation April 2018 page 33

34 Sales and EBT guidance for full year 2018 zoopluswell positioned to continue the strong sales growth path in 2018 Sales ( m) EBT ( m) ,111 (+22%) 4.1 Guidance 2018e +21 to +23% -0.5 to + 0.5% of net sales Profit guidance 2018 based on current FX levels. Investor & Analyst Presentation April 2018 page 34

35 Outlook until 2020 from today s perspective -Sales Primary target continues to be:» Sales growth» Customer retention» Increasing market share Sales of more than 2.0 bn in 2020 up from 1,111 m in 2017» Sales as driver for further profitability» Laying the foundation for continued growth after 2020 Investor & Analyst Presentation April 2018 page 35

36 The planned growth until 2020 should go with a positive operating cash flow Working capital development in % net sales 9.5% 8.1% 6.3% 5.1%» Increase in inventory turnover» More efficient replenishment process» Improvement in payment days Constant working capital in 2018 implies a further reduction to around 4.2% of sales, for 2019 to around 3.4% of sales Investor & Analyst Presentation April 2018 page 36

37 Back-up: Financials 2017 Investor & Analyst Presentation April 2018 page 37

38 Key Financials 2017 P&L abs %p in m Sales abs in % 22.2% Other income %p 4.8% 4.8% COGS %p -75.6% -75.0% Logistics %p -19.8% -19.4% Payment %p -1.0% -1.1% Customer acquisition %p -1.7% -1.4% Personnel %p -3.2% -3.2% G&A %p -2.6% -2.5% EBITDA %p 0.8% 2.2% I&DA %p -0.4% -0.2% EBT %p 0.4% 2.0% EPS in EUR (basic) Balance Sheet Total Assets Equity (Ratio in %) % 52.0% Cash Flow Free Cash Flow Investor & Analyst Presentation April 2018 page 38

39 Profit & Loss 2017 in m abs % abs % Sales % % Other income % % Cost of materials % % Personnel costs % % Depreciation % % Other expenses % % thereof logistics / fulfillment (-219.9) 19.8% (-176.0) 19.4% thereof marketing (-19.3) 1.7% (-12.8) 1.4% thereof payment (-11.3) 1.0% (-9.6) 1.1% thereof other costs (-28.8) 2.6% (-23.1) 2.5% Earnings before interest and taxes (EBIT) % % Financial income % % Financial expenses % % Earnings before taxes (EBT) % % Taxes on income % % Consolidated net result % % Differences from currency translation % % Hedge reserve % % Items that may be relclassified subsequently to profit or loss % % Comprehensive income % % Earnings per share in basic diluted Investor & Analyst Presentation April 2018 page 39

40 Balance Sheet as of December 31 st, 2017 Assets Equity and Liabilities in m Dec. 31st Dec. 31st abs in m Dec. 31st Dec. 31st abs A. Non-current assets A. Equity I. PP&E II. Intangible assets III. Other financial assets IV. Deferred tax assets Total non-current assets B. Current assets I. Inventories II. Advance payments III. Accounts receivable IV. Other current assets V. Tax receivable VI. VII. Derivative financial instruments Cash and cash equivalents Total current assets I. Capital subscribed II. Capital reserves III. Other reserves IV. Profit and Loss carried forward Total equity B. Non-current liabilities C. Current liabilities I. Accounts payable II Derivative financial instruments III. Other current liabilities IV. Tax liabilites V. Finance lease VI. Provisions VII. Deferred income Total current liabilities Investor & Analyst Presentation April 2018 page 40

41 Cash flow 2017 in m EBT Cash flow from operating activities Cash flow from investing activities Free cash flow Cash flow from financing activities Net change of cash and cash equivalents Cash on hand, bank deposits Investor & Analyst Presentation April 2018 page 41