Investor & Analyst Presentation 9M Report Dr. Cornelius Patt, CEO November 15 th, 2017

Transcription

1 Investor & Analyst Presentation 9M Report 2017 Dr. Cornelius Patt, CEO November 15 th, 2017

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 totime 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 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. Investor & Analyst Presentation 9M page 2

3 zooplus profitable sales growth continued in 9M 2017» Sales increased by 21% to 795 m European market leader position in online retailing sustained Double-digit growth rates in all 30 European markets» Investment in acceleration of sales growth Registered new customer count increased by 22%» Positive result before tax (EBT) of 4.2 m Competitive market as well as increased marketing expenses and investments in logistic infrastructure» Operating cash flow of 1.5 m Improved working capital ratios» Sales and EBT guidance for 2017 confirmed Sales of around 1,125 m expected Earnings before tax (EBT) of a single digit million amount Investor & Analyst Presentation 9M page 3

4 Pet supplies is and continues to be a very attractive market Pet supplies online market penetration Total market (gross) bn Offline share Online share % % 1-2% 7-8% » Total market constantly growing 2-3% p.a.» Humanization trend for pets» Repeat purchase type consumption pattern» Pet supplies well suited for online shopping (heavy, bulky)» Convenience aspect» Attractive prices vs. offline» Very low return rates Further significant increase of online share expected over next years Investor & Analyst Presentation 9M page 4

5 zooplus is by far the market leading online specialist for pet supplies Market leader in specialist online pet supplies in all markets with market share around 50% In 2017 already No. 2 in the total market online and offline Only true pan-european specialist retailer Active customer base of around 6 m customers Very high loyalty rates 94% sales retention rate Cost leadership position in the category Dedicated pan-european logistics infrastructure Category specific dedicated IT infrastructure Investor & Analyst Presentation 9M page 5

6 zooplus is well on its ways towards market leadership Net sales and growth 2016 (EUR bn) Online ~ % 1.6 Strategic goal 2 1) +9% Online ~ Close the gap towards the current number 1 in Europe 3 +28% 0.9 Working towards market leadership online and offline Benefitting from all the advantages of size and market leadership Source: Company data for 2016 figures; zooplus assumptions 1) Includes services Investor & Analyst Presentation 9M page 6

7 Retention and strong sales growth as primary zooplus business focus Retention Sales growth Margin & cost structure Profitability Strong sales growth means:» Keep the competition including amazon at a distance» Faster reach of dominant market position» Better purchasing terms in all areas (COGS & other services)» Broader share of private label products» More efficiency gains» More scale in overhead Investor & Analyst Presentation 9M page 7

8 zooplus continues to put sales growth and customer retention first Sales e ( m) +216 ~1, New customer sales (1 st year) % % % % % % % 94% 93% % 92% 94% 1 28% 9M: 94% 1 24% Repeat customer sales Sales growth vs. PY e 1) in local currencies Investor & Analyst Presentation 9M page 8

9 Customer lifetime value is strongly positive Customer lifetime value per account Ø net sales per account in EUR (cum.) 1, Customer acquisition costs CM cumulative 3 years plus acquisition year CM cumulative 6 years plus acquisition year CAC = Traffic acquisition costs New accounts with repurchasing activity CM = netsales-all variable costs(excl. trafficacquisitoncosts) = 9.9% Revenue recognition based on avg. retention rate of 94% (w/o fx-effects) Basis: 12 monthrolling(09/ /2017) Investor & Analyst Presentation 9M page 9

10 Strong 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 % 8 + 3% % % % - 4-3% % - 5-2% 2020e >1,550 78% > % > % tbd tbd Investor & Analyst Presentation 9M page 10

11 Sales of almost 800 m in 9M 2017 Sales ( m) Sales growth by category (9M 2017) + 21% % 12% 9M M 2017 exchange rate adjusted + 22% Food Non-Food Investor & Analyst Presentation 9M page 11

12 Sales development by quarter vs. prior year Sales ( m) Sales growth by category 26% 20% 24% Food 24% 18% 22% Q Q Q % 25% 18% 23% Non- Food 11% 8% Q Q Q Exchange rate adjusted Q Q Q Investor & Analyst Presentation 9M page 12

13 Retention of existing customer business continues on record high level Sales retention rate (exchange rate adjusted) 94% 94% 94%» Sales retention rate on continuously high levels in all three quarters» Lower sales growth rate in Q2 resulting from reduced new customer business sales, not from existing customer business Q Q Q3 2017» Continued focus on strong loyalty of existing customers Investor & Analyst Presentation 9M page 13

14 New customer intake in Q3 significantly higher than in previous quarters Registered new customers growth vs. PY» Significantly improved new customer intake in Q3 23% 9% 34%» More focused approach of new customer acquisition» Growth of new customer intake supported by higher marketing acquisition costs and competitive price positioning Q Q Q3 2017» Improved new customer intake across all countries Investor & Analyst Presentation 9M page 14

15 zooplus is the online market leader in all geographies of Europe with the widest possible base for further growth Sales 2017» Sales 9M 2017: 795 m, sales growth rate +21%» Double-digit sales growth rates in all countries Sales zooplus in 2016 zooplus market share in 2016 Total market bn 909 m 4.1% Sales growth in 9M m 3.1% ES, PT 84 m 2.1% UK, IE 153 m +26% 4.3% +24% (fx-adj.) 102 m 5.9% NL, BE, LU FR, MC +21% +20% 56 m 3.7% 285 m 5.4% DK, SE, FI, NO 75 m +24% D,A,CH 3.2% IT 57 m 9,4% +17% +19% PL HU +39% 45 m 3.5% +35% CZ, SK, HU, RO, SI, HR, BG, TR, GR, LV. LT, EE Source: zooplussales, unaudited data, growth rates compared to 9M 2016; market shares based on Euromonitor 2016 market data and zooplus estimation Investor & Analyst Presentation 9M page 15

16 Markets continue to be highly competitive zooplus with clear online market leadership position Market share zooplus and competitors 2016 Fressnapf Net sales 2016 : ~ 1.6 bn (+8%) Online: ~ 0.05 bn (+ 22% vs. PY) Total pet supplies market Europe (incl. VAT): Pets at Home Net sales 2016: ~ 1.0 bn (+9%) Online: ~ 0.03 bn Other onliners: ~ 26 bn (~ 22 bn net) CAGR: : 2-3% 2016: 0.9 bn Net sales CAGR: : + 30% ~ 50% market share zooplus online ~ 4% market share online and offline Net sales 2016: n/a Source: Euromonitor; company information, zooplus estimation Investor & Analyst Presentation 9M page 16

17 However, competition continues to be strong but zooplus is prepared to defend its position There is no single incident in competition landscape that made zooplus focus even more on growth and reduce the profit outlook for 2017 but different developments in different concepts and markets (examples):» Entering recently Spain and Italy with full pet supplies assortment» Strong growth of pet category» Stronger multi-channel approach» Start in French market» zooplus strategy pays off - more than double growth at zooplus» Store openings with higher margins do not compensate losses in online» zooplus strategy pays off - more than double growth at zooplus» Price reductions in stores to support growth» Acknowledging that customer proposition also contains price Investor & Analyst Presentation 9M page 17

18 Four main pillars of investment focus for speeding up growth and improve zooplus overall product quality Competitive pricing» Continued focus on price leading position» Defending high loyalty of existing customers Marketing costs IT product development Logistics» Increase in new customer acquisition costs» Stronger focus on registered repeat customers» Continuously high customer lifetime value» More software developers from 90 in Q to 150 in Q3 2017» Fourth internal software development location in Vienna» Focus: mobile/app, new functions, service aspects, internal algorithms» Lower basket size» Ramp-up costs new logistics centers» Additional earlier capacity expansion Investor & Analyst Presentation 9M page 18

19 Strong internal IT development teams as driving force for future developments and differentiation Munich, DE Madrid, ES Vienna, AT Krakow, PL Bucarest, RO (External partner)» Four internal IT-Hubs plus one external hub» 150 IT developers further built-up planned» Additionally external experts as freelancers» Organized by different Product Development Centers (PDCs)» Focus on internal systems, processes & algorithms and product features Strong differentiating factor towards the competition (ex. amazon) Investor & Analyst Presentation 9M page 19

20 Examples for new functions and features to improve overall zooplus offer Subscription Vet search» Live in Germany since end Q3 2017» Further roll-out planned» Live in Germany since end Q2 2017» Further roll-out planned Investor & Analyst Presentation 9M page 20

21 zooplus logistics infrastructure has been further improved and comprises now ten fulfillment centers» 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» Order routing and packing algorithms intellectual property of zooplus» Ramp-up costs impacting Q3 Q1/2017 Boleslawice Q4/ / Mühldorf Fulfillment center (FC) Investor & Analyst Presentation 9M page 21

22 UK market continues to negatively impact zooplus from a P&L perspective» One of three biggest markets in Europe» Highly competitive market in particular with amazon and ocado» Currently highest growth rates of major zooplus countries» Around 10% of zooplus sales are generated in the UK» Average 9M 2017 GBP rate to EUR has dropped by 6.0% compared to 9M 2016 which effected the GBP Sales by EUR 4.2m» Sourcing advantages from GBP devaluation are limited» Favorable GBP hedge in amount of EUR 1.7m for 9M 2016» Overall negative impact on zooplus P&L in 9M 2017 in amount of around EUR 4.5 m zooplus will continue to strongly develop it s business in the UK Investor & Analyst Presentation 9M page 22

23 Markets continue to be price competitive zooplus well prepared to defend it s strategic position Product mix 1 Gross margin 2 Total margin 3 in % of sales in % of sales %p 82.2 % 83.5 % %p %p 29.8 % 29.4 %» Continued focus on sustainable dog/cat food customers for higher lifetime-value 25.2 % 24.4 %» Ongoing price competition in the markets» zooplus will defend it s high customer retention 9M M M M M M Share of food and cat litter on sales 2 Sales - CoGS 3 Gross margin + other income on sales Investor & Analyst Presentation 9M page 23

24 Cost leadership position in 9M 2017 sustained Total margin & Cost structure (in % of sales) Total margin % %p 29.4% 28.2% 28.9% 1.5% 1.7% 19.5% 19.7%» Stronger growth and investment focus reflected in cost ratio development Advertising/ Marketing 1.0% 1.0% 2.9% 3.2% 3.2% 3.3% 9M M 2017 Logistics 2 Payment IT/Admin/ (incl. depreciation & interest) Personnel 1 Gross margin + other income on sales m logistics costs of 9M 2017 reclassified to depreciation according to IAS 17 (finance lease) Investor & Analyst Presentation 9M page 24

25 Higher costs in Q due to more marketing spend and higher logistics costs Total margin & Cost structure (in % of sales) Total margin % 29.5% %p 27.7% 1.3% 29.9% 2.2% 19.3% 20.3%» Stronger growth and investment focus reflected in cost ratio development 1.7% Advertising/ Marketing 1.1% 1.0% 2.9% 3.2% 3.2% 3.1% Q Q Logistics 2 Payment IT/Admin/ (incl. depreciation & interest) Personnel 1 Gross margin + other income on sales m logistics costs of 9M 2017 reclassified to depreciation according to IAS 17 (finance lease) Investor & Analyst Presentation 9M page 25

26 zooplus will continue it s strong effort to further improve cost leadership position in the category Total margin & Cost structure (in % of sales) 40.9% 42.4% 32.8% 31.6% 29.8% 29.4% Total margin 1 6.1% 24.0% 1.8% 1.5% 21.2% 20.1% 1.4% 1.7% 19.4% 28.9% 19.7% 1.7% 5.6% 1.3% 1.1% 1.1% 1.0% 2.9% 3.5% 2.7% 3.2% 5.0% 3.9% 3.5% 3.2% 3.3% M 2017 Advertising/ Marketing 1 gross margin + other income on sales 31.1% Logistics 2 Payment 29.8% m logistics costs of 9M 2017 reclassified to depreciation according to IAS % IT/Admin/ (incl. depreciation & interest) Personnel Investor & Analyst Presentation 9M page 26

27 Unit logistics costs continue to decrease Example: logistics costs improvments Average logistics costs (overall) per parcel Country Ø FY 2015 Ø 9M 2017 FR % GB % PL % ES % Δ Increase in logistics cost in percent of sales due to lower value per parcel in 9M 2017 Investor & Analyst Presentation 9M page 27

28 zooplus earnings before tax (EBT) reflects investment in new customers, IT and logistics infrastructure 9M EBITDA ( m) EBT ( m) in % of sales 1.8 % 1.0 % in % of sales 1.7 % 0.5 % 4.2 9M M M M m logistics costs of 9M 2017 reclassified to depreciation according to IAS 17 Investor & Analyst Presentation 9M page 28

29 zooplus earnings before tax (EBT) reflects investment in new customers, IT and logistics infrastructure Q3 EBITDA ( m) EBT ( m) in % of sales 2.7 % % Q Q m logistics costs of 9M 2017 reclassified to depreciation according to IAS 17 in % of sales 2.6 % -0.3 % -0.9 Q Q Investor & Analyst Presentation 9M page 29

30 Operating cash flow continues to be positive in 9M Free cash flow ( m) 9M M Capitalisation of tangible and intangible assets Cash flow from operating activities 1.3 % 1.1 % Cash flow from investing activities Free cash flow Cash flow from operating activities Cash flow from investing activities Free cash flow Investor & Analyst Presentation 9M page 30

31 Sales and EBT guidance for full year 2017 Sales ( m) EBT ( m) Guidance 2017e 1,125 (+24%) Single digit million Investor & Analyst Presentation 9M page 31

32 9M 2017 results Q & A Investor & Analyst Presentation 9M page 32

33 Back-up: Key Financials Investor & Analyst Presentation 9M page 33

34 Key Financials Q P&L Q Q abs %p in m Sales 277,8 226,9 abs. 50,9 48,9 in % 22,4% 27,5% Other income COGS Logistics Payment Customer acquisition Personnel G&A EBITDA I&DA EBT 15,1 10,4 +4,6 5,4% 4,6% 0,8%p -210,8-168,6-42,1-75,9% -74,3% -1,6%p 56,5 43,7 +12,7 20,3% 19,3% 1,1%p 2,9 2,5 +0,4 1,0% 1,1% -0,1%p 6,0 2,9 +3,2 2,2% 1,3% 0,9%p 8,7 7,2 +1,5 3,1% 3,2% 0,0%p 7,7 6,2 +1,6 2,8% 2,7% 0,1%p 0,3 6,2-6,0 0,1% 2,7% -2,6%p 1,2 0,3 +0,9 0,4% 0,1% 0,3%p -0,9 5,9-6,8 EPS in EUR (basic) -0,11 0,54-0,3% 2,6% -2,9%p Balance Sheet in m abs %p Total Assets 213,7 207,6 6,1 Equity (Ratio in %) 110,9 107,9 3,0 51,9% 52,0% -0,1% Cash Flow 9M M 2016 abs %p Free Cash Flow -3,8 6,8-10,7 Investor & Analyst Presentation 9M page 34

35 Profit & Loss 9M 2017 in m 9M M 2016 abs % abs % Sales 794,5 100,0% 655,3 100,0% Other income 39,9 5,0% 30,7 4,7% Cost of materials -601,0-75,6% -490,4-74,8% Personnel costs -26,0-3,3% -21,0-3,2% Depreciation -3,1-0,4% -0,8-0,1% Other expenses -199,8-25,1% -162,6-24,8% thereof logistics / fulfillment (-156,7) -19,7% (-128,0) -19,5% thereof marketing (-13,3) -1,7% (-9,6) -1,5% thereof payment (-8,0) -1,0% (-6,9) -1,0% thereof other costs (-21,8) -2,7% (-18,2) -2,8% Earnings before interest and taxes (EBIT) 4,5 0,6% 11,2 1,7% Financial income 0,0 0,0% 0,0 0,0% Financial expenses -0,3 0,0% -0,1 0,0% Earnings before taxes (EBT) 4,2 0,5% 11,1 1,7% Taxes on income -2,2-0,3% -4,2-0,6% Consolidated net result 2,0 0,2% 6,8 1,0% Differences from currency translation -0,3 0,0% -0,2 0,0% Hedge reserve -2,1-0,3% 0,4 0,1% Items that may be reclassified subsequently to profit or loss -2,4-0,3% 0,2 0,0% Comprehensive income -0,4-0,1% 7,1 1,1% Earnings per share in basic 0,28-0,98 - diluted 0,28-0,96 - Investor & Analyst Presentation 9M page 35

36 Balance Sheet as of September 30 st, 2017 Assets Equity and Liabilities in m Sept. 30th Dec. 31st D abs in m Sept. 30th Dec. 31st D abs A. Non-current assets A. Equity I. PP&E 15,2 15,9-0,7 II. Intangible assets 11,9 9,0 2,9 III. Other financial assets 0,1 0,0 0,0 IV. Deferred tax assets 0,0 0,0 0,0 Total non-current assets 27,2 25,0 2,2 B. Current assets I. Inventories 84,3 78,8 5,5 II. Advance payments 3,8 1,6 2,2 III. Accounts receivable 25,1 19,2 5,9 IV. Other current assets 21,6 25,6-4,1 V. Derivative financial instruments 0,0 2,5-2,5 VI. Cash and cash equivalents 51,7 54,9-3,3 Total current assets 186,5 182,6 3,9 213,7 207,6 6,1 I. Capital subscribed 7,1 7,1 0,1 II. Capital reserves 98,2 94,8 3,3 III. Other reserves -1,2 1,1-2,4 IV. Profit carried forward 6,8 4,9 2,0 Total equity 110,9 107,9 3,0 B. Non-current liabilities 11,2 13,1-2,0 C. Current liabilities I. Accounts payable 51,4 48,5 2,9 II Derivative financial instruments 0,6 0,0 0,6 III. Other current liabilities 24,9 21,4 3,6 IV. Tax liabilites 1,5 4,1-2,6 V. Finance lease liabilities 2,1 2,2 0,0 VI. Provisions 8,4 8,1 0,3 VII. Deferred income 2,7 2,4 0,3 Total current liabilities 91,6 86,6 5,1 213,7 207,6 6,1 Investor & Analyst Presentation 9M page 36

37 Cash flow 9M 2017 in m 9M M 2016 EBT 4,2 11,1 Cash flow from operating activities 1,5 9,6 Cash flow from investing activities -5,3-2,7 Free cash flow -3,8 6,8 Cash flow from financing activities 0,6 1,1 Net change of cash and cash equivalents -3,3 8,2 Cash on hand, bank deposits 51,7 53,7 Investor & Analyst Presentation 9M page 37