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Investor & Analyst PresentationSemi-Annual Report 2017
Dr. Cornelius Patt, CEO
August 22th, 2017
Investor & Analyst Presentation H1 201708 | 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 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 anduncertainties affecting zooplus is included throughout our most recent annual and interim reports, which are available on the zooplus website, www.zooplus.de. 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. zooplusneither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments whichdiffer 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
Investor & Analyst Presentation H1 201708 | page 3
zooplus’ profitable sales growth continued in H1 2017
» Sales increased by 21% to € 517 m
− European market leader position in online retailing sustained
− Double-digit growth rates in all 30 European markets
» Further improvement of cost structure
− Ramp up costs for logistics and investments in more IT development capacity impact cost structure
» Positive result before tax (EBT) of € 5.1 m
− On same level as in prior year, still unfavorable GBP/EUR development
» Positive free cash flow of € 7.4 m
− Growth financed from operating cash flow
» Sales and EBT guidance for 2017 confirmed
− Sales of more than € 1,125 m expected
− Earnings before tax (EBT) between € 17 m and € 22 m
Investor & Analyst Presentation H1 201708 | page 4
zooplus continues to put sales growth and customer retention first
Sales 2011-2017e (€ m)
1) in local currencies2014
543
2013
407
2012
319
2011
245
+88
+74
+136
2017e
>1,125
2016
909
2015
711
+198
+216
+168
79%85%
91%
94%93%1
92%94%1
28%31%33%28%30%38%Sales growth vs. PY
Repeat customer sales
New customer sales (1st year)
24%
H1:94%1
Investor & Analyst Presentation H1 201708 | page 5
Sales of more than € 500 m in H1 2017
428
517
H1 2016 H1 2017
23%
9%
Food Non-Food
+ 21%
exchange rate adjusted + 22%
Sales (€ m) Sales growth by category (H1 2017)
Investor & Analyst Presentation H1 201708 | page 6
Sales growth in Q2 2017 has been lower than in Q1 2017
221
260
Q2 2016 Q2 2017
+ 18%
exchange rate adjusted + 19%
Sales (€ m)
» Sales retention rate of existing customer business on record levels of 94%
» More selective within new customer business
� Focus on registered new accounts
� Google bidding on high retention customers
� More restrained customer discounts
» 2017 with five working days less in Q2 than in Q1
Investor & Analyst Presentation H1 201708 | page 7
H1 2016 H1 2017
Markets continue to be price competitive – zooplus well prepared to defend it’s strategic position
H1 2016 H1 2017
» Continued focus on sustainable dog/cat food customers for higher life-time-value
» Ongoing price competition in the markets
» zooplus will defend it’s high customer retention
- 0.4 %p
24.9 % 24.5 %
in % of sales
1 Share of food and cat litteron sales
+ 1.7 %p
82.0 % 83.7 %
H1 2016 H1 2017
in % of sales
- 0.3 %p
29.6 % 29.3 %
3 Gross margin + other income on sales2 Sales - CoGS
Total margin 3Gross margin 2Product mix 1
Investor & Analyst Presentation H1 201708 | page 8
3.2% 3.4%
2.9% 3.1%
19.7% 19.4%
1.6% 1.4%
H1 2016 H1 2017
28.3%
Cost leadership position in H1 2017 sustained
Total margin1
1.7%
1 Gross margin + other income on sales
» Ramp-up and start-up costs for new fulfillment centers in Antwerp and Birmingham
» Investment into more internal IT development resources
IT/Admin/ (incl. depreciation & interest)
Advertising/Marketing
Logistics2 Personnel
1.0% 1.0%
Payment
28.4%
29.3%29.6%
- 0.1 %p
Total margin & Cost structure (in % of sales)(in % of sales)(in % of sales)(in % of sales)
2 € 1.0 m logistics costs of H1 2017 reclassifiedto depreciation according to IAS 17 (finance lease)
Investor & Analyst Presentation H1 201708 | page 9
3.2% 3.2%
3.0% 3.1%
19.7% 19.3%
1.5% 1.4%
Q2 2016 Q2 2017
28.0%
Additional efficiency gains and scaling effects lead to a further reduction of the cost ratio in Q2 2017
Total margin1
1.7%
1 Gross margin + other income on sales
IT/Admin/ (incl. depreciation & interest)
Advertising/Marketing
Logistics2 Personnel
1.0% 1.0%
Payment
28.4%
28.7%29.4%
- 0.4 %p
Total margin & Cost structure (in % of sales)(in % of sales)(in % of sales)(in % of sales)
2 € 0.5 m logistics costs of Q2 2017 reclassifiedto depreciation according to IAS 17 (finance lease)
Investor & Analyst Presentation H1 201708 | page 10
5.0% 3.9% 3.5% 3.2% 3.4%
5.6%2.9% 3.5% 2.7% 3.1%
24.0%
21.2% 20.1%19.4%
1.0%
6.1%
1.8%1.5%
1.4%
19.4%
2011 2014 2015 2016 H1 2017
28.3%
zooplus will continue it’s strong effort to further improve cost leadership position in the category
31.6% 29.8%32.8%Total margin1
…
40.9%
1.7%
1.3% 1.1% 1.1%
42.4%
29.8%27.8%
31.1%
1 gross margin + other income on sales
1.4%
29.3%
IT/Admin/ (incl. depreciation & interest)
Advertising/Marketing
Logistics2 PersonnelPayment
Total margin & Cost structure (in % of sales)(in % of sales)(in % of sales)(in % of sales)
2 € 1.0 m logistics costs of H1 2017 reclassified to depreciation according to IAS 17
Investor & Analyst Presentation H1 201708 | page 11
zooplus earnings before tax (EBT) on same level as previous year
5.7
7.3
H1 2016 H1 2017
5.1 5.1
H1 2016 H1 2017
+ 1.6 + 0.0
in % of sales 1.3 % 1.4 % in % of sales 1.2 % 1.0 %
EBITDA (€ m) EBT (€ m)
€ 1.0 m logistics costs of H1 2017 reclassified to depreciation according to IAS 17
Investor & Analyst Presentation H1 201708 | page 12
Cash flow fromoperatingactivities
Cash flow frominvestingactivities
Free cash flow
Free cash flow continues to be positive in H1 2017
1.3 % 1.1 %
Cash flow fromoperatingactivities
Cash flow frominvestingactivities
Free cash flow
H1 2016 H1 2017
10.8
10.6
- 3.3
7.4- 1.9
8.7
Free cash flow (€ m)
Investor & Analyst Presentation H1 201708 | page 13
Markets continue to be highly competitive – zooplus with clear online market leadership position
Market share zooplus and competitors 2016
Source: Euromonitor; company information, zooplus estimation
CAGR: 2011-16: + 30%2016: € 0.9 bn
Total pet supplies market Europe (incl. VAT):
~ € 26 bn (~ € 22 bn net)
CAGR: 2011-16: 2-3%
Net sales 2016 :
~ € 1.6 bn (+8%)
Online: ~ € 0.05 bn(+ 22% vs. PY)
Net sales 2016:
Online: ~ € 0.03 bn
Net sales
Other onliners:
Fressnapf
Net sales
~ € 1.0 bn (+9%)
Pets at Home
2016: n/a
~ 50% market share zooplus online
~ 4% market share online and offline
Investor & Analyst Presentation H1 201708 | page 14
Sales 2017
HU
Source: zooplus sales, unaudited data, growth rates compared to H1 2016; market shares based on Euromonitor 2016 market data and zooplus estimation
84 m
Total market 201622 bn
Sales zooplusin 2016
DK, SE, FI, NO
D,A,CHCZ, SK, HU, RO, SI, HR, BG, TR, GR, LV. LT, EE
ES, PT
zooplus is the online market leader in all geographies of Europe – with the widest possible base for further growth
NL, BE, LU
+25%
+10%
+24%
+21%
+18%
+34%
+18%
+21%
56 m
102 m
285 m
45 m
153 m
52 m
75 m
909 m
zooplusmarket sharein 2016
5.4%
2.1%
4.3%
3.1%
3.2%
3.5%
5.9%
3.7%
4.1%
» Sales H1 2017: € 517 m, sales growth rate +21%
» Double-digit sales growth rates in all countries
UK, IE
IT
FR, MC
Sales growth in H1 2017
57 m
9,4%
+39%
PL
Investor & Analyst Presentation H1 201708 | page 15
» New fulfillment center (FC) in Antwerp started end Q4 2016 still in ramp up phase
» Local FC in Birmingham started end of Q1 2017
» All centers managed as one integrated pan-European network
» All FCs operated by partners; no capex for zooplus
» Order routing and packing algorithms intellectual property of zooplus
2013
2015
Fulfillment center (FC)
2009
2015
Q4/2016
Q1/2017
Hubs (DSP)*
*Shown are selected relations from FC to Hub – in total zooplus has approx. 60 relations (40 linehauls + 20 direct DSP connections)
2000/2011
zooplus logistics infrastructure has been further improved
Strong internal IT development teams as driving force for future developments and differentiation
Investor & Analyst Presentation CMD 2017 | page 16
Strong differentiating factor towards the competition (ex. amazon)
Munich, DE Krakow, PL
Bucarest, RO(External partner)Madrid, ES
» Three internal IT-Hubs plus one external hub
» More than 120 IT developers – further built-up planned
» Additionally external experts as freelancers
» Organized by different Product Development Centers (PDCs)
» Focus on internal systems, processes &algorithms and product features
Investor & Analyst Presentation H1 201708 | page 17
Retention and strong sales growth as primary zooplus’ business focus
Retention
Sales growth
Margin & cost structure
Profitability
Strong sales growth means:
» Keep the competition including amazon at a distance
» Faster reach of dominant market position
» Better purchasing terms in all areas (COGS & other services)
» Broader share of private label products
» More efficiency gains
» More scale in overhead
Investor & Analyst Presentation H1 201708 | page 18
Sales and EBT guidance for full year 2017
Guidance
Profit guidance 2017 based on FX levels January 2017.
909 (+28%) 17.9
EBT (€ m)Sales (€ m)
2017e
2016
>1,125 (>+24%) 17 - 22
Investor & Analyst Presentation H1 201708 | page 19
H1 2017 results
Q & A
Investor & Analyst Presentation H1 201708 | page 20
Back-up: Key Financials
Investor & Analyst Presentation H1 201708 | page 21
Key Financials Q2 2017
P&Lin € m
Q2 2017 Q2 2016 ∆∆∆∆ abs ∆∆∆∆%p
Sales 259.8 220.6
abs. 39.2 52.3
∆ in % 17.8% 31.1%
Other income13.2
5.1%11.3
5.1%+1.9
0.0%p
COGS198.4
76.4%167.1
75.7%+31.3
+0.7%p
Logistics50.0
19.3%43.5
19.7%+6.5
-0.4%p
Payment2.6
1.0%2.2
1.0%+0.4
0.0%p
Customer acquisition3.8
1.4%3.4
1.5%+0.4
-0.1%p
Personnel8.3
3.2%7.1
3.2%+1.2
0.0%p
G&A7.0
2.7%6.2
2.8%+0.8
-0.1%p
EBITDA2.8
1.1%2.5
1.1%+0.3
0.0%p
I&DA1.1
0.4%0.3
0.1%+0.8
+0.3%p
EBT1.7
0.7%2.2
1.0%-0.5
-0.3%p
EPS in EUR (basic) 0.11 0.19
Balance Sheet
Total Assets 209.9 207.6
Equity (Ratio in %)111.1
53.0%107.9
52.0%
Investor & Analyst Presentation H1 201708 | page 22
Profit & Loss H1 2017
in € mH1 2017 H1 2016
abs % abs %
Sales 516.7 100.0% 428.4 100.0%
Other income 24.9 4.8% 20.2 4.7%
Cost of materials -390.2 -75.5% -321.7 -75.1%
Personnel costs -17.3 -3.4% -13.8 -3.2%
Depreciation -2.0 -0.4% -0.5 -0.1%
Other expenses -126.7 -24.5% -107.4 -25.1%
thereof logistics / fulfillment (-100.2) -19.4% (-84.3) -19.7%
thereof marketing (-7.3) -1.4% (-6.7) -1.6%
thereof payment (-5.2) -1.0% (-4.4) -1.0%
thereof other costs (-14.1) -2.7% (-12.0) -2.8%
Earnings before interest and taxes (EBIT) 5.3 1.0% 5.2 1.2%
Financial income 0.0 0.0% 0.0 0.0%
Financial expenses -0.2 0.0% -0.1 0.0%
Earnings before taxes (EBT) 5.1 1.0% 5.1 1.2%
Taxes on income -2.4 -0.5% -2.1 -0.5%
Consolidated net result 2.8 0.5% 3.1 0.7%
Differences from currency translation -0.2 -0.0% -0.1 -0.0%
Hedge reserve -1.8 -0.4% 1.3 0.3%
Items that may be reclassified subsequently to profit or loss -2.1 -0.4% 1.1 0.3%
Comprehensive income 0.7 0.1% 4.2 1.0%
Earnings per share in €
basic 0.39 - 0.44 -
diluted 0.39 - 0.43 -
Investor & Analyst Presentation H1 201708 | page 23
Balance Sheet as of June 30st, 2017
Assets Equity and Liabilities
in € m June 30st, 2017 Dec. 31st, 2016 ∆∆∆∆ abs
A. Non-current assets
I. PP&E 15.1 15.9 -0.8
II. Intangible assets 11.2 9.0 2.2
III. Other financial assets 0.1 0.0 0.0
IV. Deferred tax assets 0.0 0.0 0.0
Total non-current assets 26.4 25.0 1.4
B. Current assets
I. Inventories 78.5 78.8 -0.3
II. Advance payments 5.0 1.6 3.4
III. Accounts receivable 21.2 19.2 2.0
IV. Other current assets 16.0 25.6 -9.7
V.Derivative financial instruments
0.0 2.5 -2.5
VI. Cash and cash equivalents 62.8 54.9 7.9
Total current assets 183.5 182.6 0.9
209.9 207.6 2.3
in € m June 30st, 2017 Dec. 31st, 2016 ∆∆∆∆ abs
A. Equity
I. Capital subscribed 7.1 7.1 0.1
II. Capital reserves 97.3 94.8 2.5
III. Other reserves -0.9 1.1 -2.1
IV. Profit carried forward 7.6 4.9 2.8
Total equity 111.1 107.9 3.3
B. Non-current liabilities 11.5 13.1 -1.7
C. Current liabilities
I. Accounts payable 46.2 48.5 -2.3
IIDerivative financialinstruments
0.3 0.0 0.3
III. Other current liabilities 22.9 21.4 1.5
IV. Tax liabilites 2.8 4.1 -1.3
V. Finance lease liabilities 2.1 2.2 0.0
VI. Provisions 10.3 8.1 2.3
VII. Deferred income 2.6 2.4 0.2
Total current liabilities 87.3 86.6 0.7
209.9 207.6 2.3
Investor & Analyst Presentation H1 201708 | page 24
Cash flow H1 2017
in € m H1 2017 H1 2016
EBT 5.1 5.1
Cash flow from operating activities 10.8 10.6
Cash flow from investing activities -3.3 -1.9
Free cash flow 7.4 8.7
Cash flow from financing activities 0.5 0.1
Net change of cash and cash equivalents 7.9 8.7
Cash on hand, bank deposits 62.8 54.2