home24 presentation Building the online destination for home & living November 2018

Transcription

1 home24 presentation Building the online destination for home & living November

2 Our mission: to be the online destination for home & living 1

3 Thinking of customers in home & living offline retail today does this look familiar to you? 32

4 We offer the best value and an inspiring home & living experience to mass market consumers Superior assortment Great value for money Fast & convenient delivery Amazing experience Private label 50/ carriers managed via home24 platform #1 Home & living destination 4 3rd party Broad and relevant selection Superior price / value for money, with 100% free delivery and returns 2 Fast and reliable delivery, into your home with flexible slot scheduling 3 Unique home & living tailored shopping experience online and in showrooms 1. Approximation of 2017 revenue split. 2. On all items in Europe. 3. In Europe for 2 man handling. 4. Best ios shopping app in Apple app store for Germany (2015). 3

5 Founder-led management team Marc Appelhoff Founder Fashion For Home Management Board Marketing, Sales, Finance Christoph Cordes Founder Fashion For Home Management Board Operations, Assortment Philipp Kreibohm Founder home24 Management Board Business development, HR, Legal Johannes Schaback Founder Visual Meta Management Board Technology, Data 4

6 We are the #1 pure-play home & living e-commerce platform in continental Europe and Brazil #1 In Brazil #1 In continental Europe 117b+ TAM 1 across 8 markets > 300m Revenue run rate based on H % CAGR revenue First order c % <10% profitability High Gross margin Return rates AOV 2 FY2017 FY2017 FY Based on Euromonitor data for home24 markets which includes Germany, France, Italy, the Netherlands, Austria, Belgium, Switzerland and Brazil. 2. Including VAT, for Europe only, as of FY

7 1 Huge and uniquely attractive home & living market opportunity with high barriers to entry 6

8 We target a huge addressable market Global home & living market 1 > 550bn Europe and Brazil home & living market > 200bn home24 footprint 2 home & living market > 117bn Source: Euromonitor International. 1. Home & living market defined as Euromonitor Passport: Home and Garden categories homewares and home furnishings (EUR using 2017 fixed exchange rates) 2. home24 markets consisting of Germany, France, Italy, the Netherlands, Belgium, Austria, Switzerland and Brazil. 7

9 Home & living is on the verge of online acceleration with potential already proven in the US and UK Online penetration by industry in home24 markets 1 Home & living online penetration by geography 25% 25% 20% 15% 5x Penetration Upside Consumer electronics: 23.7% Traditional toys and games: 20.0% Consumer appliance: 13.9% 20% 15% 3x Penetration Upside UK: 14.2% 10% Fashion: 12.0% 10% US: 12.2% 4.8% Home & living 4.8% Home & living 0% Early days Acceleration Growth 0% Early days Acceleration Growth Source: Euromonitor International, 2017A (except for Traditional Toys and Games, which is 2017E). 1. Consists of home24 s target markets Germany, France, Italy, the Netherlands, Austria, Belgium, Switzerland and Brazil. 8

10 Online home & living growth expected to accelerate, supported by millennials becoming nest builders Home and living online sales volume in home24 markets 1 Home & living spending per age group Online growth to accelerate as digitally savvy millennials enter home shopping age 11% CAGR <25 years years >65 years Sources: Euromonitor International, Management estimates. 1. Consists of Germany, France, Italy, the Netherlands, Belgium, Austria, Switzerland and Brazil. 2. Management estimates increasing CAGR for the period

11 There are no strong consumer brands in home & living?sofa 10

12 Market ripe for disruption due to highly fragmented supplier landscape and retail landscape Fragmented supplier landscape 1 Fragmented retail landscape 2 c. 97% of all suppliers have limited market power with no strong brands 3% c.1% 28% 72% of the market highly fragmented Companies with revenue < 10m Companies with revenue of 10m 100m Companies with revenue > 100m Top 5 Rest of the market Huge private label opportunity International market leader IKEA only has 16% share 3 Negotiation power lies with the strongest retail platform Market beyond top 5 is extremely fragmented with mostly local / regional players Opportunity to build a leading platform brand No strong online presence even by offline market leaders Source: PwC PwC Marktstudie Möbelbranche 2017 ; Euromonitor International. 1. Germany only revenues in home24 markets converted to EUR using 2016 exchange rates; refers to Euromonitor homewares and home furnishings stores segment by brand shares. 3. Blended share across home24 markets. 11

13 2 Leading pure-play online platform in continental Europe and Brazil 12

14 Home & living challenge I: Products with high basket size / AOV and without established consumer brands in mass market Low value High brand trust High value low brand trust 13

15 We have built the leading pure-play online home & living brand in Germany Brand awareness 1 67% 67% #1 brand in Germany 36% 36% 33% 33% 26% 26% 26% 26% 23% 23% 15% 15% 14% 13% 13% 12% 12% 2 Sources: EY Report ( Einrichtung Online was will der Kunde, was kann der Handel? ). 1. Proportion of interviewed people (by EY) aware of those brands. Excl. price comparison website Moebel.de, which had a brand awareness of 68%, but does not sell any home & living products itself. 2. Shopping club. 14

16 3 Unique home24 business model driving superior economics and customer proposition 15

17 Home & living challenges II and III: Identify and source relevant assortment in a market with no brands and abundant product variety Inventory management: make bulky and high value items available at short delivery times and still remain working capital neutral 16

18 home24 solves these challenges by combining non-inventory 3rd party model with vertically integrated private label model Model 3rd party products Private label Assortment focus Broad assortment (high conversion, mostly long tail) Attractive bestsellers (high margin) Sourcing & fulfilment Benefits Mostly non-inventory and drop-shipped Broad but curated assortment No inventory risk Negative working capital Rich data on customer preferences Big data to identify bestsellers Vertically integrated, mostly held on stock Superior gross margin & pricing Minimal inventory risk Direct sourcing focus Very short delivery times Economics 1 c.50% of sales c.75% of SKUs c.50% of sales c.25% of SKUs 1. Based on FY2017 financials. 17

19 4 Scalable end-to-end automated and vertically integrated value chain 18

20 Home & living challenge IV: Extremely complex logistics and delivery for multi-component and heavy/bulky products 19

21 We invest heavily to create an end-to-end process optimized and automated fulfilment platform Integrated end-to-end automated platform Automated Sourcing Warehousing Delivery 500+ supplier network 1 Seamless ERP integration to drive transparency and speed On the ground quality control 3 centralised scalable warehouses c.137,000 sqm capacity 2 with expansion headroom Automated data driven reordering Self-managed inbound / mid-mile logistics Network of 3 rd party last mile providers managed by home24 Own last mile delivery in Brazil End-to-end Scalable 1. As of December 31 st, Expected capacity by end of

22 5 Scalable first order profitable customer acquisition 21

23 Home & living challenge V: scalable online demand largely in short tail generic search without brands \ Strong brands multiple specific search terms No brands few generic search terms 22

24 First order profitability driven by unique home24 model Large relevant assortment Short delivery times Attractive consumer prices c.50% private label share High AOV Low returns Automated proprietary marketing engine More impressions & higher conversion + Superior contribution margin + Ability to scale top line at stable CAC 1 = First order profitability 2 1. Customer acquisition costs (CAC) defined as marketing costs (performance marketing + ATL marketing) divided by new customer share (based on net sales order view, defined as GOV after estimated returns, cancellations, rebates and VAT and prior to IFRS realization profile) times total orders for the respective quarter. 2. FY

25 6 Best-in-class technology platform empowering data-driven decision making and automation 24

26 We collect vast volumes of data on a daily basis to drive superior decisions across the value chain Input Customer data Assortment data Fulfilment data 3 rd party data Order history Demographics Decision time lag Browsing Session data Reviews Supplier Pricing Availability Product features Stock levels Item location Available carriers Delivery mode Crawling of competitor price & delivery times Google 360 Marketing analytics costs Industry fairs/events Design trends! X-Device session Risk scoring Identify & fill white spaces Predict & stock bestsellers Optimise availability Develop superior private label Sorting Search Curation Personalisation Accurate marketing contribution Personalised suggestions/ offers Audience optimised acquisition Optimise marketing channel on daily basis Automated re-stocking Live delivery information Optimise warehouse utilization Minimise delivery time Output Assortment Webshop Marketing & CRM Fulfilment 25

27 7 Multiple drivers for sustainable longterm growth with significant margin upside 26

28 home24 has multi-dimensional drivers for sustainable long-term growth Structural growth Market Platform + penetration + development + Market expansion Benefit from increasing online penetration Accelerate through further roll-out of go-to-market approach Enhance product offering in existing categories Introduce new categories e.g. to drive purchase frequency Enhance shopping journey to increase brand loyalty Adopt new technologies to foster competitive advantage Expand into new geographies and capitalize on high market fragmentation 27

29 We are in a unique position to be the online destination for home & living Market Online penetration on tipping point of acceleration to follow UK and US Offering We have cracked the code: right balance of private label and 3 rd party products to offer the most relevant choice at superior gross margins Growth Established marketing machine with first order profitable customer acquisition 1 at scale Value chain Our platform is ready: scalable end-to-end automated value chain 1. FY

30 Disclaimer This presentation has been prepared by home24 SE (the Company ). All material contained in this document and the information presented is for information purposes only and does not purport to be a full or complete description of the Company and its affiliated entities. This presentation must not be relied on for any purpose. This presentation contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management of the Company. Forward-looking statements should not be construed as a promise of future results and developments and involve known and unknown risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements, and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. The Company does not assume any obligations to update any forward-looking statements. This presentation contains certain financial measures that are not calculated in accordance with IFRS and are therefore considered non-ifrs financial measures. The management of the Company believes that these non-ifrs financial measures used by the Company, when considered in conjunction with, but not in lieu of, other measures that are computed in accordance with IFRS, enhance an understanding of the Company s results of operations, financial position and cash flows. A number of these non-ifrs financial measures are also commonly used by securities analysts, credit rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which the Company competes. These non-ifrs financial measures should not be considered in isolation as a measure of the Company s profitability or liquidity, and should be considered in addition to, rather than as a substitute for, income data or cash flow data prepared in accordance with IFRS. In particular, there are material limitations associated with the use of non-ifrs financial measures, including the limitations inherent in determination of each of the relevant adjustments. The non-ifrs financial measures used by the Company may differ from, and not be comparable to, similarly-titled measures used by other companies. Certain numerical data, financial information and market data, including percentages, in this presentation have been rounded according to established commercial standards. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts. 29

31 Investor Contact Philipp Steinhäuser VP Finance & Investor Relations home24 SE Greifswalder Str. 212/ Berlin Phone: Media Contact Viktoria Solms Head of Communications home24 SE Greifswalder Str. 212/ Berlin Phone: