investor & analyst presentation - zooplus ag · investor & analyst presentation 9m 2019...

Investor & Analyst Presentation9M report, November 14th, 2019

Dr. Cornelius Patt, CEO

Investor & Analyst Presentation 9M 2019 – November 2019 | page 2

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 theactual 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 andinterim reports, which are available on the zooplus website, www.zooplus.de. Should one or more of these risks or uncertaintiesmaterialize, 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 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.

Safe Harbor Statement


zooplus continues on growth path in first nine months of FY 2019

» Sales continue to increase year-on-year, H2 2019 starts off with slight acceleration driven by a solid Q3 performance: +14% vs. PY, outperforming first two quarters 2019

» Gross margin with slight improvement driven by optimized assortment and increased average basket profitability while maintaining pricing flexibility

» Positive EBITDA of EUR 6.7m (9M 2018: EUR -0.5m) and Free Cash Flow of EUR 9.5m (9M 2018: EUR 14.3m)

» Further expansion of private label business for food & litter with positive margin contribution and strong performance of +29% sales increase vs. PY

» New customer acquisition with strong momentum: +25% registrations vs. PY, now 7.4m active customers in Europe

» Optimized direct marketing measures aiming at re-improving retention rates through reactivationwith first positive signs in short-term retention of targeted customers

» Moved closer to the consumer and kept competition at bay with further differentiation and brand building initiatives next to price leadership1 in category

» Ramped up logistics infrastructure with new fulfilment center in Italy, closing the loop on our pan-European network with complete southern coverage1) Management estimate


Sales increased by 14% in Q3, overall sales increase of 13% to EUR 1,104m in 9M 2019

974

1,104

9M 2018 9M 2019

+13%FX adjusted +13%

Sales (€ m)

» Sales driven by continued high customer loyalty and increased new customer business

» Absolute growth of EUR 130m vs. PY

» Revenue growth rate sequentially increased across first three quarters from 13% to 14% vs. PY

» Non-food still flat vs. PY

+13%

331 378

Q3 2018 Q3 2019

+13%FX adjusted +14%

+14%


HU

Source: zooplus sales, unaudited data, growth rates compared to 9M 2018; market shares based on Euromonitor market data and zooplus estimation

112m

Total market 2018 23bn

Sales zooplus in 2018

DK, SE, FI, NO

D,A,CHCZ, SK, HU, RO, SI, HR, BG, TR, GR, LV, LT, EE

ES, PT

NL, BE, LU

+9%

+5%

+10%

+7%

+11%

+25%

+14%

+15%

86m

149m

387m

84m

224m

82m

108m

1,342m

zooplus market share in 2018

7.0%

2.7%

6.0%

4.7%

4.4%

5.7%

8. 2%

5.4%

5.8%

UK, IE

IT

FR, MC

Sales growth in 9M 2019

110m

16.0%

+25%

PL

» Sales growth 9M 2019:

+ 13% (+13% fx-adjusted)

zooplus is online market leader in Europe by a distance

Market size by country/ region


Strong acquisition momentum in new registered customers in 9M 2019

1,748

2,221

9M 2018 9M 2019

Registered new customers (in k)

» Significant growth in new customer acquisition underlines huge potential in the category and leading market position of zooplus

» New customer acquisition mainly based on Google marketing, driven by higher spend and Google optimization

» Additional marketing activities targeted at higher brand awareness need longer time horizon

+25%


Engaging with consumers through targeted offline and online marketing activities on top of Google

zooplus & Burger King®team up for DogPPER snack

campaign

Shoppable posts on Instagram dedicated to

private label

Expanding addressable audience

Targeting brand awareness

Pushing private label brands

High branded content generation with >70k picture

uploads by pet owners


Sales retention as major business driver on continuously high level

95% 91%

9M 2018 9M 2019

Sales retention rate1

1 Sales retention (net, non-BMF)

» Subscription-like business model with recurring repurchase activity

» Retention rate impacted by lowerearly-stage retention rate due to GDPR effects

» Major focus on early-stage repeat purchase activity with better direct marketing and continued improvement of customer proposition

» Measures implemented showing first positive signs in short-term retention of targeted customers

-4%p


Sales retention rate remains on high levels above 90%

Further enhancing customer experience

✓ Improving mobile experience | App first

✓ Personalizing site experience

✓ Optimizing assortment

✓ Improving last-mile delivery

Tackling GDPR-related effects

✓ Incentivizing e-mail opt-ins

✓ Optimized direct mailings

✓ Customer loyalty programs in place

✓ Retargeting


Gross margin improved versus prior year in 9M 2019

(in % of sales)

1 Sales – CoGS

Gross margin1

» Less customer and transactional discounts

» Reduction of non-profitable orders

» Introduction of multiple parcel chargefor high-volume baskets

» Favorable sourcing conditions

» Further expanded private label share

28.0%28.5%

9M 2018 9M 2019

+0.5%p


Private label business growing above average

Private Label

» Private label (exclusive to zooplus) gaining traction: growth index private label / food 1.7

» High-margin business in the mid-to premium segment contributing to gross margin increase

» Launched first private label veterinary nutrition brand in 2019

» Continued strong focus on private label expansion

+29%

(food and litter sales)

GroupSales

GroupSales

13.9% 15.5%

9M 2018 9M 2019

148

114

Private label share on total food and litter sales


CONCEPT FOR LIFE: Unique and scientific nutritional concept focusing on pet’s life cycle and lifestyle

» Expanded CONCEPT FOR LIFE private label brand with new product line

» CONCEPT FOR LIFE- VETERINARY DIET line is carefully formulated and can be used as part of a pet’s therapeutic diet as recommended by a veterinary doctor

» Addressing premium pet food customers

» High-margin profile of product line adding to incremental value of private label line brand portfolio

L A U N C H E D I N 2 0 1 9


3.3% 3.5%2.5% 2.3%

19.8% 18.3%

2.0% 3.3%

Cost savings in logistics and IT/admin have been reinvested in additional marketing spend

Total margin1

1.1% 1.1% 1.0%

28.7% 28.5%

1 Gross margin + other income on sales 3 All in, including LTI & SOP

1.1%IT/Admin2

Advertising/Marketing

Logistics2

Personnel3

Payment

Total margin & cost structure (in % of sales)

2 Logistics costs of 0.8%p and Admin costs of 0.2%p in 9M 2019 reclassified to depreciation and interests according to new IFRS 16

1.0%

28.6%

1.9%

29.1%

» Cost leadership position maintained

» Operational improvement and increased value per parcel driving logistics costs down by 0.8%p (excluding IFRS 16)

» Efficiency gains in cost structure reallocated to marketing spend for further growth

» On-top marketing spend in Q2/Q3 2019 for zooplus 20-year campaign

EBITDA0.0% 0.6%

9M 2018 9M 2019


» Now 12 fulfillment centers across Europe

» Current capacity runs well into 2021

» All FCs operated by logistics specialist partners; almost no capex requirement for zooplus

» SKU allocation, replenishment, order routing and packing algorithms intellectual property of zooplus

» Continued focus on last-mile optimization by internal improvements and together with local last mile providers

Ramped up logistics capacity and completed southern European coverage

2013

2015

Fulfillment center (FC)

2009

2016

2017/18

2000/2011

2017

2018

2019

2018

Opened new ItalianFC in Q2 2019


Positive EBITDA and Free cash flow in 9M 2019

-0.5

6.7

-0.0 %

0.6 %

EBITDA (EUR m)

9M 2018 9M 2019

(in % of sales)

-7.6 -13.9

EBITDA 2019 based on full IFRS 16 application; IFRS 16 impact to EBITDA € 11.2 m, of which € 8.8 m logistics (0.8%p) and € 2.4 m admin costs (0.2%p) go into depreciation

EBT

+7.2m

Cash flow fromoperatingactivities

Cash flow frominvestingactivities

Free cash flow2.5 %

12.9

-3.4

3.1 %

9.5

Free Cash Flow impact in 9M 2019 due to IFRS 16: EUR +10.3m

Cash Flow


Q & A


Key financials 9M 2019

1 impairment expenses of financial assets reclassified to payment2 own work capitalized reclassified to personnelDue to the application of IFRS 16 in 9M 2019, additional € 8.8 m logistics and € 2.4 m G&A costs are reclassified to depreciation

P&L 9M 2019 9M 2018 Δ abs Δ %p

in € m

Sales 1104.3 973.8

abs. 130.5

Δ in % 13.4%

Other income 6.5 6.1 0.5 0.0%p

0.6% 0.6%

COGS -789.4 -701.0 -88.4 0.5%p

-71.5% -72.0%

Logistics -201.8 -193.1 -8.7 1.6%p

-18.3% -19.8%

Payment1 -12.1 -10.4 -1.7 0.0%p

-1.1% -1.1%

Customer acquisition -36.9 -19.3 -17.7 -1.4%p

-3.3% -2.0%

Personnel2 -38.7 -32.4 -6.2 -0.2%p

-3.5% -3.3%

G&A -25.2 -24.1 -1.0 0.2%p

-2.3% -2.5%

EBITDA 6.7 -0.5 7.2 0.7%p

0.6% 0.0%I&DA -20.6 -7.1 -13.5 -1.1%p

-1.9% -0.7%

EBT -13.9 -7.6 -6.3 -0.5%p

-1.3% -0.8%EPS in EUR (basic) -1.49 -0.79

Balance Sheet

Total Assets 357.6 281.0 76.6

Equity (Ratio in %) 101.8 107.0 -5.2

28.5% 38.1%

Cash Flow

Free Cash Flow 9.5 14.3 -4.7


Profit & Loss 9M 2019

abs % abs %

Sales 1104.3 100.0% 973.8 100.0%

Other income 6.5 0.6% 6.1 0.6%

Cost of materia ls -789.4 -71.5% -701.0 -72.0%

Personnel costs -38.7 -3.5% -32.4 -3.3%

Other expenses -276.0 -25.0% -247.0 -25.4%

thereof logistics / fulfillment -201.8 -18.3% -193.1 -19.8%

thereof marketing -36.9 -3.3% -19.3 -2.0%

thereof payment -12.1 -1.1% -10.4 -1.1%

thereof other costs -25.2 -2.3% -24.1 -2.5%

Earnings before depreciation,

interest and taxes (EBITDA) 6.7 0.6% -0.5 0.0%

Depreciation -19.5 -1.8% -6.6 -0.7%

Financia l income 0.0 0.0% 0.0 0.0%

Financia l expenses -1.1 -0.1% -0.5 0.0%

Earnings before taxes (EBT) -13.9 -1.3% -7.6 -0.8%

Taxes on income 3.3 0.3% 1.9 0.2%

Consolidated net result -10.6 -1.0% -5.7 -0.6%

Differences from currency

trans lation 0.0 0.0% -1.0 -0.1%

Hedge reserve -0.1 0.0% 0.7 0.1%

Items that may be relclassified

subsequently to profit or loss -0.1 0.0% -0.3 0.0%

Comprehensive income -10.7 -1.0% -6.0 -0.6%

Earnings per share in €

bas ic -1.49 - -0.79 -

di luted -1.49 - -0.79 -

in € m9M 2019 9M 2018


Balance Sheet as of September 30th, 2019

Assets

in € mSept. 30th.

2019

Dec. 31st.

2018Δ abs

A. Non-current assets

I. PP&E 5.7 55.9 -50.1

II. Right-of-use assets 76.5 0.0 76.5

III. Intangible assets 13.3 14.2 -0.9

IV. Deferred tax assets 2.6 0.0 2.6

Total non-current assets 98.1 70.0 28.1

B. Current assets

I. Inventories 117.1 107.6 9.5

II. Advance payments 0.1 0.4 -0.3

III. Accounts receivable 35.5 28.1 7.3

IV. Other current assets 25.7 16.1 9.6

V. Contract assets 25.2 19.0 6.2

VI. Tax receivables 1.0 0.9 0.1

VII.Derivative financial

instruments0.1 0.0 0.1

VIII. Cash and cash equivalents 54.9 59.5 -4.6

Total current assets 259.5 231.7 27.8

357.6 301.8 55.9

Equity and Liabilities

in € mSept. 30th.

2019

Dec. 31st.

2018Δ abs

A. Equity

I. Capital subscribed 7.1 7.1 0.0

II. Capital reserves 102.2 100.8 1.5

III. Other reserves -1.8 -1.8 -0.1

IV. Profit and Loss carried forward -5.7 4.9 -10.6

Total equity 101.8 111.1 -9.2

B. Non-current liabilities 58.2 41.4 16.8

C. Current liabilities

I. Accounts payable 134.8 99.7 35.1

II Derivative financial instruments 0.2 0.1 0.2

III. Other current liabilities 21.6 19.9 1.7

IV. Contract liabilities 19.1 17.1 2.0

V. Tax liabilites 0.1 0.1 -0.1

VI. Finance lease 19.2 9.8 9.5

VII. Provisions 2.5 2.6 -0.1

VIII. Deferred income 0.0 0.0 0.0

Total current liabilities 197.6 149.3 48.3

357.6 301.8 55.9


Cash flow 9M 2019

in € m 9M 2019 9M 2018

EBT -13.9 -7.6

Cash flow from operating activities 12.9 20.4

Cash flow from investing activities -3.4 -6.1

Free cash flow 9.5 14.3

Cash flow from financing activities -14.2 -3.8

Currency effects on cash and cash equivalents 0.1 -0.4

Net change of cash and cash equivalents -4.6 10.0

Cash on hand, bank deposits 54.9 61.2


Major KPIs per quarter

Major KPIs Q1 2019 Q2 2019 Q3 2019 Q4 2019

Sales (in € m) 363.2 363.5 377.7

Δ vs. PY 12.6% 13.5% 14.1%

Private label growth vs. PY 29% 29% 29%

New customer count (in k) 818 792 825

t/o registered new customers (in k) 739 721 761

t/o unregistered new customers (in k) 79 71 64

Sales retention (net, Non-BMF) 93% 92% 91%

Total Margin 28.8% 29.4% 29.2%

Cost ratio 28.2% 28.8% 28.6%

EBITDA (in € m) 2.2 2.3 2.2

EBITDA 0.6% 0.6% 0.6%

investor & analyst presentation - zooplus ag · investor & analyst presentation 9m 2019...

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