Initiation of Project STAR July 28, 2016

Transcription

1 Initiation of Project STAR July 28, 2016

2 Disclaimer This document has been issued by windeln.de AG (the Company ) and does not constitute or form part of and should not be construed as any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company or any present or future member of the group. All information contained herein has been carefully prepared. However, no reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability whatsoever is accepted by the Company or any of its directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. The information contained in this presentation is subject to amendment, revision and updating. Certain statements, beliefs and opinions in this document are forwardlooking, which reflect the Company s or, as appropriate, senior management s current expectations and projections about future events. By their nature, forwardlooking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Neither this document nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions or distributed, directly or indirectly, in the United States of America, its territories or possessions or to any US person. By attending, reviewing or consulting the presentation to which this document relates or by accepting this document you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this notice. Nothing in this document constitutes tax advice. Persons should seek tax advice from their own consultants or advisors when making investment decisions. 2

3 windeln.de has experienced significant growth over the last years Revenues, m 179 CAGR : ~136% CAGR calculated based on full-year 2011 revenues as per HGB and full-year 2015 revenues as per IFRS reporting. 3

4 and we are focused on profitability improvement TODAY GOAL Leading online retailer for baby and toddler products in Europe Footprint in 10 European countries Cross-boarder customers in China Excellent brand portfolio Solid funding and liquidity Operational excellence Best Customer experience Profitability improvement 4

5 1. Project STAR Overview

6 Project STAR provides transparency tracking profitability improvements Already communicated measures NEW New measures = Project STAR 6

7 Project STAR provides path to profitability 1 Focus of business model Stop flashsale of nakiki NEW 6 Enhance management team 2 Focus of products New COO New head windeln.de DE New head windeln.de CN NEW NEW Complexity reduction in SKUs NEW Accelerate private label products Project STAR 5 Improve China business Tmall shop Regional warehouse NEW 3 Leverage European footprint Central purchasing Relocate central warehouse Integrate feedo & bebitus 4 Create operational excellence Automation Cautious hiring policy 7

8 1 Focus of business model - Stop flashsale of nakiki Stopping of flashsale business results in less complexity and reduces negative EBIT contribution Focused business model Concentration and further expansion of proven online shop business model USP: Broad range of immediately available products, short delivery times at attractive prices Basis: Online shops windeln.de, pannolini.it, windeln.ch, bebitus.com and feedo.cz Focus on best customer experience Stop flashsale of nakiki Reduce complexity Esp. supplier and product management, IT and logistics Eliminate negative EBIT contribution: EBIT 2015: -6m EUR EBIT H1 2016: -3m EUR 1 Reduce headcount by 100 employees Total cash saved: 10+ m EUR 1 Based on preliminary numbers for H1. 8

9 1 Focus of business model - Stop flashsale of nakiki We keep nakiki brand as regular sales platform for clothes, toys and outlet Emotionally charged brand name Stands for inspiration, high quality and lovingly chosen products Product focus is fashion, accessories and toys as well as outlet and sale Target group: 0 to 8 years, no explicit focus on babys and toddlers Part of German Shop business unit 9

10 2 Focus of products: Complexity reduction in #SKUs and private label products Competent full-range provider of products complemented by high-quality private label products rule: Supplier-revenue analysis Accelerate private label brands [Aggregated revenues] 100% 80% 60% 40% 20% 0% [suppliers ranked by revenue] Top 20 Top 290 Last 500 ~6k SKUs ~55k SKUs ~15k SKUs Top 20 suppliers with 80% of revenue Top 290 suppliers with 98% of revenue Focus on top 290 suppliers with full range product offerings of 60k SKUs Four private label brands within the group since 2015 Most recently, own full infant formula product range added to assortment Gross Margins range between 40% and 60% Significant growth expected until

11 3 Leverage European Footprint: Central Purchasing Set-up of central purchasing department: Negotiation power and higher margins Food Group Supplier Group turnover (incl. Distributors) Q DE /CN CH IT Feedo Bebitus Supplier x x x x x Supplier x x x x x Supplier x x x x x 31 group suppliers combine more than 80% of group s purchasing volume Diapers / Care Supplier x x x x x Supplier x x x x Supplier x x x x x Mobility Furniture Toys Fashion Feeding Drugstore Supplier x x x x x Supplier x x x x x Supplier x x (x) x x Supplier x Supplier x x x x x Supplier x x x (x) Supplier x x x x x Supplier x x x x x Supplier x x x Supplier x x x x Supplier x x x (x) Supplier x x x x x Supplier x x x x Supplier x x x x x Supplier x x x x x Supplier x x x x (x) CENTRAL PURCHASING o o o o o International purchasing organization Alignment of supplier relationship management Joint negotiations Best sourcing: Exploration of supply market opportunities Supplier development 11

12 3 Leverage European Footprint: Relocation of warehouse, Integration topics Synergies, efficiency increase and cost optimization by leveraging windeln s European footprint Relocate central warehouse Integrate bebitus & feedo Warehouse move from Germany to Eastern Europe by end of 2017 Centralization of logistics for windeln.de, windeln.ch, feedo as well as longtail for all other shops One shared technological platform for the whole group for all order, sales, and product-related processes Synergies in IT, product creation, purchasing and operations expected Significant cost savings expected Full integration of bebitus by Q2 2017, feedo by Q

13 4 Create operational excellence: Automatization Higher level of automatization to reduce manual tasks and increase group-wide efficiency Goal: Higher level of automatization high Several automation projects initiated Inhouse scanning of incoming invoices Returns portal invoice Automated return booking KPI-based action triggers E-Invoicing Purchase low Automatic refunds for cancellations 13

14 4 Create operational excellence: Customer Experience Clear objective to improve performance in operations and IT Goal # of orders by repeat customers p.a Share of next day delivery 1 45 % 46 % 51 % 47 % Cost per order Shipping cost # of technical platforms Only German business 14

15 5 Improve China business New customer group in China: Windeln.de Tmall Global Shop successfully launched 1,000 orders on day 1 ü First sale from windeln.de Tmall shop: Sat., ü Number of SKUs for launch: 85 ü Top sellers products: Aptamil, Hipp, BEBA, Salus, Britax, etc. 15

16 6 Enhance management team Changes in senior management and board to strengthen, re-focus and professionalize business Head of Business Unit German Shop (windeln.de) New COO Konstantin Urban Founder and Co-CEO of windeln.de Jürgen Vedie Former COO of Zooplus Responsibilities: Operations, Purchasing, Logistics New head of windeln.de Germany NEW New head of windeln.de China NEW Laura Schulte Former head of nakiki Strong background in customer experience with Burda Julia-Caroline Schmidt Previously worked for Storck in China and Hongkong where she managed several product launches 16

17 The combined STAR measures will support the company s path to profitability EBIT impact in meur (already communicated and new measures) Feedo & bebitus integrated Cumulative impact of approx. 65m EUR Closure of flashsale business: reduction of approx. 100 employees Meaningful impact central purchasing Central warehouse ongoing Higher impact in later years Full-run rate approx. EUR 20m positive EBIT impact p.a. 17

18 We will track and report progress of project STAR consistently Degrees of implementation (DI) DI 1 Defining the gap DI 2 Estimating the action s impact DI 3 Elaborating the action plan DI 4 Implementing the measure DI 5 Impact of the measure DI Ramp-Up over time Tracking sheets per measure 3% 7% 10% 20% 10% 10% 30% 20% 15% 30% 25% 100% 20% 30% 20% 50% 15% 40% 15% 20% 10% T1 T2 T3 T4 T5 D1 D2 D3 D4 D5 18

19 2. STAR Financial Implications

20 Preliminary H1 financials in line with expectations;; positive impact from discontinuation T COME H Preliminary Q Preliminary m Total Discontinued (Shopping Clubs) Continuing (ex Shopping Clubs) Total Discontinued (Shopping Clubs) Continuing (ex Shopping Clubs) Revenues yoy growth in % 35% 33% 35% 25% 22% 26% Gross profit Gross profit margin in % 29% 33% 29% 30% 33% 29% Adj. EBIT Adj. EBIT margin in % -15% -29% -14% -15% -36% -13% Shopping Club segment shown as discontinued operation (IFRS 5) when closure occurs (H2 2016) Discontinuation with little impact on revenues growth and gross profit margin due to small relative size Substantial reduction of negative EBIT (even before efficiency gain on corporate level) As communicated in May, negative impact in Q2 from regulatory change in China and ERP introduction Overall, in line with guidance provided earlier for 2016 Communication of detailed half year/second quarter results on August 24 20

21 Positive contribution of project STAR starting in H2 of 2016 Measures Focus of business model H Stop flashsale NEW Focus of products Leverage European Footprint Create operational excellence Reduction in SKUs NEW Accelerate private label Central purchasing Relocate warehouse Integrate feedo & bebitus Automation Cautious hiring policy () () () û () () () Total accumulated positive EBIT of approx. EUR 65m (sum ) Includes already communicated and new measures Improve China business Enhance Management team Tmall Shop New COO New head windeln.de DE New head windeln.de CN NEW NEW Approx. EUR 20m p.a. positive EBIT impact with full phase-in by

22 Restructuring costs for closure of flashsale business of approx. EUR 2m significantly less negative EBIT contribution Restructuring costs of approx. EUR 2m Rental contract nakiki warehouse Abensberg Depreciation tangible assets in warehouse Severance payments employees Depreciation of software Negative EBIT 2015: EUR -6m Negative EBIT H EUR -3m Significant additional cash need until breakeven Less resource requirements in shared services functions (e.g. IT/product management, Human Resources) Other (e.g. contracts / leasing) 22

23 Update of guidance to reflect discontinued flashsale business 2016 Pro-Forma Guidance +30% yoy ~235m ~ 35m Discontinued operations Revenues 178m ~ 18m ~ 161m +25% yoy ~ 200m Pro forma continued operations Sufficient funding until breakeven Gross Profit Margin G 26% 28+% Confirmed for continued operatios Long-term profitability target: >5% EBIT margin Adj. EBIT Margin -8.5% -10% to -12% Confirmed for continued operations 23

24 STAR leads our path to profitability 1 Focus of business model 6 Enhance management team 2 Focus of products 5 Improve China business Project STAR 3 Leverage European footprint 4 Create operational excellence Approx. EUR 65m EBIT cumulated impact Approx. EUR 20m full run rate positive EBIT impact 24

25 Thank you!

26 Backup: Pro-forma H financials H Q m Total Discontinued (Shopping Clubs) Continuing (ex Shopping Clubs) Total Discontinued (Shopping Clubs) Continuing (ex Shopping Clubs) Revenues 75,0 7,2 67,8 39,4 3,7 35,7 yoy growth in % 84,6% 113,0% 82,0% 82,7% 111,4% 80,2% Gross profit 19,6 1,9 17,7 10,5 0,9 9,6 Gross profit margin in % 26,2% 26,3% 26,1% 26,6% 24,4% 26,9% Adj. EBIT -4,0-2,4-1,6-2,7-1,6-1,1 Adj. EBIT margin in % -5,3% -32,9% -2,3% -6,8% -43,6% -3,0% 26