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

Transcription

1 Investor & Analyst Presentation September 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 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 the actual 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 and interim reports, which are available on the zooplus website, Should one or more of these risks or uncertainties materialize, 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 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 September 2018 page 2

3 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 September 2018 page 3

4 The online share is expected to continue to grow far beyond 2020 Current online share and long-term hypothesis ( bn) Total market (gross) > 30 Offline share 95-96% 92-90% 80-85% < 50% Online share 4-5% 8-10% 15-20% > 50% Online market opportunity > e Long-term 1 Long-term growth potential of online should leave enough growth for zooplus after zooplus estimation; assuming successful shift of pet food grocery segment to online Investor & Analyst Presentation September 2018 page 4

5 Loyal customers are the core base of zooplus growth path H1 sales retention rate at 94% Sales ( m) ,111 1,344 1,366 New customer sales (1 st year) % % % % % % 93% % 92% 94% % 93% 93% 1 22% H1: 94% 1 21% 23% Repeat customer sales Sales growth vs. PY e 1) in local currencies Investor & Analyst Presentation September 2018 page 5

6 zooplus reached 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) 1.0 (+65 EUR m) Strategic goals 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 September 2018 page 6

7 zooplus is 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 zooplus market share in 2017 Total market bn 1,111m 4.9% Sales growth in m 96m 3.9% ES, PT 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% +25% D,A,CH 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: zooplus sales, unaudited data, growth rates compared to 2016; market shares based on Euromonitor 2016 market data and zooplus estimation Investor & Analyst Presentation September 2018 page 7

8 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 % 2011 a 87 91% 79 99% 78 99% 77 99% % 62 90% 56 99% % % % a % 46 98% 45 99% 104% 101% % 47 <= % % 101% % 102% % Reading example: 2011 a = sales of 2011 s new customers in 2011 Ø 91% 1) 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 September 2018 page 8

9 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 September 2018 page 9

10 Customer lifetime value is strongly positive and justifies stronger investment focus 2017 a+5 projected a+10 projected 1, net sales per account in EUR (cum.) 1 1, Customer acquisition costs 2 97 CM cumulative 5 years plus acquisition year 164 CM cumulative 10 years plus acquisition year 1 Only accounts with repurchasing activity based on cohort specific retention rate (incl. fx-effects) 2 Traffic acquisition costs per new account with repurchasing activity 3 CM = contribution margin = net sales all variable costs (excl. acquisition costs) = 9.5% Investor & Analyst Presentation September 2018 page 10

11 Main drivers for total margin Customer discounts & incentives Sales prices Sales mix 1 Total margin Purchasing prices FX impact Supplier term sheets 1 Total margin = gross margin + other income: According to IFRS from beginning of 2018 on supplier marketing and service contribution which was until 2017 part of other income has to be booked directly into COGS and is from now on part of gross margin Investor & Analyst Presentation September 2018 page 11

12 Margin compression vs. prior year reduced in H Gross margin 1 in % of sales Total margin 2 in % of sales - 0.8%p - 1.1%p 28.5% 27.7% 29.3% 28.2% H H H H Sales CoGS + other supplier income 2 Gross margin + other income Investor & Analyst Presentation September 2018 page 12

13 Gross margin improvement realized in Q2 as indicated after Q1 figures Gross margin 1 in % of sales + 1.2%p» Ongoing competitive markets 27.1% 28.3%» Sales prices increased vs. Q1 2018» Margin impact from supplier price increases compensated by improved conditions and sales price increases» Gross margin improvement expected to be sustainable for coming quarters» Sales retention rate on continued high level of 94% Q Q Sales CoGS + other supplier income Investor & Analyst Presentation September 2018 page 13

14 Online private label business gains traction and should grow to 20% share of food by % 13% Share of total food 4% 5% Share of first order sales Growth index private label / food Further significant increase in private label share until 2020 Figures for 2016 and 2017 Investor & Analyst Presentation September 2018 page 14

15 zooplus investment 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 September 2018 page 15

16 Cost ratio in H impacted by stronger investment focus Total margin & Cost structure (in % of sales) 32.8% 31.6% 29.8% 29.2% 28.2% Total margin 1-1.2%p -1.8%p -0.6%p -1.0%p vs. prior quarter 31.1% 1.8% 29.8% 1.5% 27.8% 28.8% 1.4% 1.7% 29.6% 2.0% 21.2% 20.1% 19.4% 19.8% 20.2% 1.3% 1.1% 1.1% 1.0% 1.0% 2.9% 3.5% 2.7% 3.0% 3.2% 3.9% 3.5% 3.2% 3.2% 3.3% H 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 2 Logistics costs reclassified to depreciation and interests according to IAS 17 Investor & Analyst Presentation September 2018 page 16

17 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 September 2018 page 17

18 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 % % % - 5-2% % % % % Reduction of profit margins in 2017 resulting from deliberate decision of stronger investment focus to improve overall zooplus strategic position and long-term valuation. Investor & Analyst Presentation September 2018 page 18

19 zooplus earnings before tax (EBT) in H reflects investment focus operating cash flow positive EBITDA / EBT ( m) Cash flow ( m) H H H EBITDA In % of sales 1.4% -0.8% EBT In % of sales 1.0% -1.4% 3.1 % Cash flow from operating activities -4.3 Cash flow from investing activities % Free cash flow Investor & Analyst Presentation September 2018 page 19

20 zooplus pan-european logistics network will be further expanded in 2018» New FC in Boleslawice (PL) since 11/2017» Expansion of UK FC to triple size since 04/2018 due to successful development of operations in UK started in 2017 further improvement of delivery quality to UK market» Further fulfillment centers planned in 2018 for PL, IT and ES» All centers managed as one integrated pan-european network» All FCs operated by partners» SKU allocation, replenishment, order routing and packing algorithms intellectual property of zooplus 2018e / / e 2018e Fulfillment center (FC) Planned FC s for 2018 Investor & Analyst Presentation September 2018 page 20

21 Distribution to the customer with the leading local last mile providers» Last mile distribution with external partners (DSPs)» zooplus operates 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 zooplus owned 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 September 2018 page 21

22 zooplus logistics 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 September 2018 page 22

23 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 zooplus smartphone 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 September 2018 page 23

24 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 September 2018 page 24

25 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 September 2018 page 25

26 Strong internal IT development teams as driving force for future developments and differentiation Munich, DE Krakow, PL Madrid, ES Vienna, AT Bucarest, RO (External partner)» 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 Strong differentiating factor towards the competition 1 1 excluding amazon Investor & Analyst Presentation September 2018 page 26

27 Sales and EBT guidance for full year 2018 Sales ( m) EBT ( m) ,111 (+22%) 4.1 Guidance 2018e +21 to +23% 1,344 to 1, to vs to + 0.5% of net sales Profit guidance 2018 based on current FX levels. Investor & Analyst Presentation September 2018 page 27

28 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 September 2018 page 28

29 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 September 2018 page 29