earnings release 1q16better shopping experience, due to excellence in inventory management,...
TRANSCRIPT
MAY 6, 2016
EARNINGS RELEASE1Q16
1.1Q16 and LTM Results
2. Commercial and Operational Highlights
3. Investments
AGENDA
2
+786k new clients in 1Q16 LTM
1. MAIN INDICATORS
3
Total GMV(R$)
2,461 MM-3.2%
Marketplace GMV (R$)
348 MM+327.0%
Marketplace (% Total GMV)
14.2%+10.9 p.p.
Total GMV (R$)
11,186 MM+14.8%
Marketplace GMV (R$)
1,127 MM+543.0%
Marketplace (% Total GMV)
10.1%+8.3 p.p.
1Q16
LTM
B2W Digital’s strong leadership position in Latin America.
Source: e-Bit (Market) and public fillings (#2 player).1 e-Bit estimate for market size in 1Q16.
1H12
+ 2.9 p.p.
19.9%
17.0%
#2 player
20.0%
24.0%
+ 6.3 p.p.
1Q1611Q15
24.0%
17.7%
+ 4.0 p.p.
1. MARKET SHARE
4
Better shopping experience, due to excellence in inventory management, increased assortment, and efficiency in delivery time.
Customer
Inventorymanagement
(Stock-out levelbelow10%)
Efficiency in delivery times(Productivity gains in DCs of 8%)
Assortment(+35% in 1Q16)
2. COMMERCIAL AND MARKETING
5
3Q152Q151Q15
261
158
82
4Q15
359
1Q16LTM
More than 3,500 sellers on the platform (+1,000 compared to the end of 2015).
Marketplace participation in total GMV reached 14.2% in 1Q16 (+10.9 p.p. vs. 1Q15).
B2W’s Marketplace grew 543% in the last 12 months, reaching more thanR$ 1.1 billion in GMV.
175
1,127
1Q15LTM
1Q16
348
Marketplace GMV(R$ MM)
10.1%
6.7%
3.2%
Marketplace GMV (R$ MM) Marketplace participation in Total GMV (%)
2. MARKETPLACE GMV GROWTH
6
9.6%
14.2%
+6.4x
One of the five largest e-commerce platform companies in the world.
The first Rakuten Group company in Latin America.
+ 1,300 new sellers to be integrated to our Marketplace
+ 1,250 new sellers to be integrated to our Marketplace
Sellers include: Sellers include:
New partnerships with two of the largest e-commerce platforms in Brazil: VTEX and Rakuten Brasil.
2. MARKETPLACE GMV GROWTH
7
Distribution Centers
Nationwide coverage with 145 hubs
25
2
1
1
2. LOGISTICS AND OPERATIONS
8
Number of Distribution Centers
1Q15 1Q16
9
11
Storage area (‘000 m2)
1Q15 1Q16
390
+500
Number of Hubs
1Q15 1Q16
94
145
+54%
+35%
+2 DCs
SHIPPING MENU
B2W DISTRIBUTION UNIT
Next Day
Fast
Standard
Click & Collect
Scheduled
Same Day
25 new clients, representing 1.6 milliondeliveries per year.
Of these new customers, 8 are among the Top 20 sellers on the Marketplace.
2
3
6
Increased by 8x in 1Q16 driven by expansion of coverage (+RJ, +BH) and the increased weight limit (up to 30kg).
Available for 100% of assortment and in all states,
increasing its share in deliveries from less than 1% in 1Q15
to 10% in 1Q16.
Available in 203 stores. Its utilization increased by 14xbetween 1Q15 and 1Q16.
B2W Distribution Unit participation in total deliveries
1Q15 1Q16
55%
74%
2. LOGISTICS AND OPERATIONS
9
+19 p.p.
1
2
3
4
5
6
B2W Digital’s leadership in migration from
e-commerce to m-commerce.
44.3%
32.0%
1Q15 1Q16
+ 12.3 p.p.
Mobile traffic
1Q16: B2W’s apps were downloaded 1.2 million times (3x 1Q15).
2. MOBILE AND TECHNOLOGY
10
Acquisition of BooLabs, artificial intelligence start-up.
With the acquisition, B2W intensifies its use of data science and gains important expertise to leverage its searchalgorithms and product recommendationsin terms of relevance and personalization.
BooLabs is specialized in emerging technologies, including machine learning, deep learning and natural language processing.
2. MOBILE AND TECHNOLOGY
11
2. DIGITAL SERVICES
B2W Services offers complete solutions in the technology and logistics verticals.
Artificial intelligence
Trackingsoftware
(TMS)
MktplaceWhatsAppInstagram
Marketplaceintegration
Onlinesecurity
PricingIntelligence
(online/offline)
Marketingcampaigns
MagentoTechnology
Delivery(Small
packages)
Delivery(Large
packages)
SEO,Algorithms
Back-officeSystems
Front-officeSystems
B - Logistics
A+B - B2W Services
Scalable ITPlatform
CustomerExperience
Intelligence/ Analytics
MarketplaceIntegration
[BFF] Management Systems
Last Mile Solution/ Delivery
[B] Seller
[BFF] B2W Fulfillment
IT/Online Solutions
2013 2014 2015 2016
A - Technology
12
B2W continues to be recognized as best-in-class for its
customer service.
B2W’s core brands have received, since 2014, the RA 1000 seal, the maximum grade given by the Reclame Aqui website
In 1Q16 Americanas.com was named the most popular online store in Brazil, with more than 60% of Internet users buying onthe website1.
Competitors
#3#2
RA 1000 Seal20 of 1brand
0 of 3brands
4 of 4 brands
Average grade2 5.84.27.2
Solution index2 84%71%92%
Would buy again2 60%44%78%
2. CUSTOMER SERVICE
131According to a March 2016 poll by Conecta-í/IBOPE; 2 According to Reclame Aqui.
Launch of the part-time internship program atthe Boston (USA) office.
Expansion of the International Summer Internship, in Rio de Janeiro, doubling the sizeof the incoming class of interns.
Expanded efforts for talent recruitment in the fields of data science and analytics.
2. DIGITAL TALENTS
14
A B2W Digital is the first and only e-commerce company to be part ofBM&FBovespa’s Corporate Sustainability Index portfolio.
Commitment to sustainable development.
Launch of theTecEscola1 program to train 150 teachers in 50 schools and benefit 15,000 students.
Strategic partnership with MIT Sloan in the Company’ssustainability management.
2. CORPORATE SUSTAINABILITY
151 With the support of the Secretary of Education of the State of Rio de Janeiro (Seeduc).
B2W will continue investing in the digital platform it has built, monetizing
all areas of the business.
201520142013
Continuous reduction ofCAPEX as a % of total GMV...
201520142013
Increase of
EBITDA/CAPEX
coverage
…and increase of coverage ofCAPEX by EBITDA.
Note: Total Capex of R$ 714MM, R$ 812MM, R$ 808MM and R$ 129MM in 2013, 2014, 2015 and 1Q16, respectively.
12%
9%
7%60%
68%
76%
1T16
5%
1T16
98%
Reduction of CAPEX
as % of total GMV
3. INVESTMENTS
16
ANNEX
17
R$ MM 1Q16 1Q15 Variation 1Q16 1Q15 Variation
Gros s Merc handis e Volume (GMV) 2,461.3 2,541.8 -3.2% 2,461.3 2,501.7 -1.6%
Gros s S ales and S ervic es Revenue 2,152.9 2,469.9 -12.8% 2,152.9 2,429.8 -11.4%
Gro s s R evenue / Net R evenue 124.3% 115.5% +8.8 p.p. 124.3% 115.4% +8.9 p.p.
Net S ales and S ervic es Revenue 1,732.6 2,137.8 -19.0% 1,732.6 2,104.9 -17.7%
Gros s Profit1 403.3 501.3 -19.5% 403.3 468.0 -13.8%
Gros s Marg in (% NR)1 23.3% 23.5% -0.2 p.p. 23.3% 22.2% +1.1 p.p.
Gro s s Margin (% GR )1 18.7% 20.3% -1.6 p.p. 18.7% 19.3% -0.6 p.p.
Adjus ted E BITDA 127.2 130.0 -2.2% 127.2 123.2 +3.3%
Adjus ted E BITDA Marg in (% NR) 7.3% 6.1% +1.2 p.p. 7.3% 5.9% +1.4 p.p.
A djus ted E BITDA Margin (% GR ) 5.9% 5.3% +0.6 p.p. 5.9% 5.1% +0.8 p.p.
1 Excluding the elimination effects in the consolidation of B2W Digital's transportation subsidiaries.
2 Excluding the effects of B2W Viagens (divested in August 2015) and Ingresso.com (divested in November 2015) in order to maintain comparability between periods.
Not E xc luding Viag ens & Ing res s o.c om E xc luding Viag ens & Ing res s o.c om2
The Digital Platform that connects People, Businesses, Products andServices.
1Q16 Earnings Call and Webcast
Investor Relationswww.b2wdigital.com
[email protected]: +55 (21) 3722-3618