Lpp S.a. · GPW:LPP
Lpp — 4Q 2022/23 Earnings Presentation
35 slides from Lpp's earnings presentation, Apr 27, 2023
Slide 1: 4Q22/23 Results Presentation
4Q22/23 4Q22/23 RESULTS PRESENTATION GDAŃSK, APRIL 27, 2023 WWW.LPP.COM
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) was prepared by LPP SA (the “Company”) with a due care. Still, it may contain certain inconsistencies or omissions. The Presentation does not contain a complete or thorough financial analysis of the Company and does not present its standing or prospe
Slide 3: Key corporate events
4Q22/23 3 01 4Q22/23 PRESENTATION Key corporate events
Slide 4: Sinsay brand with first stores in Italy
Sinsay brand with first stores in Italy Commerciale Valecenter Shopping Centre Marcon, near Venice, Italy Opening: December 2022 4Q22/23 MARCON Floorspace: 1,436 m2 4 Bicocca Village Shopping Centre Milan, Italy Opening: March 2023 Floorspace: 1,280 m2 Sinsay own stores and online stores of all 4Q22
Slide 5: Sinsay's debut in Greece
Sinsay’s debut in Greece Talos Plaza Shopping Centre Heraklion, Crete, Greece 4Q22/23 Opening: January 2023 5 Floorspace: 1,075 m2 HERAKLION Sinsay's own store and online store for all brands Strong Sinsay online sales 4Q22/23 PRESENTATION
Slide 6: Initiatives supporting online
Initiatives supporting online The largest shares in online sales of Usage of algorithms and artificial intelligence brands in 4Q22/23: 4Q22/23 DYNAMIC YIELD 6 34% 31% 29% a tool that provides online customers with a personalized experience through: MOHITO SINSAY RESERVED • recommending products they
Slide 7: Launch of a new Fulfillment Center in Jasionka near Rzeszów
Distribution of e-commerce shipments, both domestic and to foreign markets from January 2023. 4Q22/23 7 Warehouse with a total floorspace of 69 ths m2 and storage capacity of up to 7 million items of products, will provide service to 100,000 orders per day. The facility meets the BREEAM Launch of a
Slide 8: Positive reception of Mohito and Reserved collections
Positive reception of Mohito and Reserved collections Favourable sales of formal clothing, i.e. jackets, suits in subdued, practical colours, in both brands. 4Q22/23 8 Strong Mohito online sales, especially outerwear. High revenue dynamics in CEE and SEE region. Robust sales of men's Reserved 4Q22/2
Slide 9: Towards a circular economy
Towards a circular economy 4Q22/23 9 4Q22/23 PRESENTATION
Slide 10: Rebuilding Ukrainian revenues
Rebuilding Ukrainian revenues 125 operating 31% of 4Q22/23 sales are online; 4Q22/23 stores online stores work with 10 (159 stores before the war) limited deliveries. 4th PLN 20m country by revenue, financial and in-kind support 4Q22/23 PRESENTATION after Poland, Romania, provided so far for the Cze
Slide 11: Presence in countries
Presence in 39 countries 7 36 26 30 1 28 4Q22/23 1,018 17 123 125 11 No. of 85 As at 31.01.2023 YoY 23 stores 54 22 55 139 LPP GROUP 1,962 - 282 33 62 1 55 11 Poland 1,018 + 66 ↑ 1 Abroad 856 + 205 ↑ Discontinued 0 - 553 4 operations 1 2 2 4Q22/23 PRESENTATION 1 online + offline online offline
Slide 12: 4Q22/23 financial results
4Q22/23 12 02 4Q22/23 PRESENTATION 4Q22/23 financial results
Slide 13: Sale of Russian subsidiary changed financial statements
Sale of Russian subsidiary changed financial statements 1Q22/23 2Q22/23 3Q22/23 4Q22/23 4Q22/23 No influence of Russian No influence of Russian Russian company shown Statement business; impact of business; lower impact of 13 Russian company shown as discontinued operations; of comprehensive inventor
Slide 14: Towards omnichannel
OFFLINE Towards omnichannel 1,962 -11.4% stores m2 4Q22/23 14 +17.0% 27 39 LFLs countries countries ONLINE PLN 16bn 34 +19.3% 4Q22/23 PRESENTATION countries revenues +40.5% Group revenues Data from continued operations except for floorspace.
Slide 15: High double-digit Group revenue growth
High double-digit Group revenue growth GROUP REVENUES OMNICHANNEL REVENUES (PLN m, data from 1Q21/22 for continued operations) (PLN m, continued operations) 4,340.6 4,366.8 4Q21/22 4Q22/23 YoY 4,185.0 3,399.3 1,224.6 1,032.4 LPP GROUP 3,399.3 4,185.0 23.1% 2,990.2 3,134.0 3,034.2 1,146.7 Reserved 1,
Slide 16: Over PLN 1bn e-commerce revenues
Over PLN 1bn e-commerce revenues ONLINE SALES ONLINE BY REGIONS (PLN m, data from 1Q21/22 for continued operations) (PLN m, 4Q21/22 continued operations) PLN 1,161.8m PLN 1,146.7m 1,224.6 1,161.8 1,146.7 -1.3% 1,032.4 988.1 933.7 4Q22/23 837.6 709.3 630.4 778.1 748.2 16 452.6 516.2 4Q21/22 4Q22/23 4
Slide 17: Foreign revenues exceed domestic ones
Foreign revenues exceed domestic ones SHARE OF FOREIGN SALES IN REVENUES 4Q22/23 FLOORSPACE (data from 1Q21/22 from continued operations) (by regions, 4Q21/22 before restatement) 5 000.0 Poland Abroad 57% 60% 58% 4 500.0 4 000.0 53% ths m2 4Q21/22 4Q22/23 YoY 51% 3 500.0 50% 52% 3 000.0 56% 4Q22/23
Slide 18: Further inventory reduction
Further inventory reduction QUARTERLY GROUP GROSS PROFIT MARGIN INVENTORY AND INVENTORY/ M2 (data from 1Q21/22 from continued operations) (data from 1Q21/22 from continued operations) 3,500 60.5% 5,000 3,067 3,000 2,057 2,529 4,000 2,259 2,500 2,016 4Q22/23 54.0% 58.3% 1,702 2,000 53.4% 3,000 54.6%
Slide 19: Stable costs despite inflation
Stable costs despite inflation COSTS OF OWN STORES / M2 SG&A COSTS / M2 (IAS17, data from 1Q21/22 for continued operations) (IFRS16, data from 1Q21/22 for continued operations) +2.0% +2.0% YoY YoY 57% 450 42% 49% 48% 41% 47% 400 196 50% 193 179 40% 350 174 171 176 166 39% 39% 145 40% 300 144 59 66 4
Slide 20: Quarterly EBIT improvement
Quarterly EBIT improvement • Double-digit sales growth YoY due to new store openings and high 4Q21/22 PLN m, IFRS16 4Q22/23 YoY comparable sales (LFL). (after restatement) • Gross profit margin decrease YoY due to: high base, higher share of Revenues 3,399.3 4,185.0 23.1% the Sinsay brand diluting t
Slide 21: Over PLN 1bn profit from continuing operations
Over PLN 1bn profit from continuing operations • High double-digit YoY sales growth thanks to the opening of new stores, high comparable sales (LFL) and sales in the online channel. 2021/22 PLN m, IFRS16 2022/23 YoY (after restatement) • Decrease in gross profit margin YoY due to: higher YoY promoti
Slide 22: Short-term changes in working capital
Short-term changes in working capital WORKING CAPITAL CASH CONVERSION CYCLE (PLN m, 4Q21/22 without restatement) (days) 325 315 318 350 271 260 242 235 217 228 214 250 171 229 182 175 161 149 150 167 147 4Q22/23 7 9 6 6 6 7 16 25 22 5,068 3,353 50 22 3,864 3,164 -50 8 -22 -81 -80 -62 -80 -83 -51 -15
Slide 23: Safe net indebtedness level
Safe net indebtedness level NET DEBT CAPEX (PLN m, IFRS16, from 1Q22/23 lack of Russian subsidiary) (PLN m, data from 1Q21/22 for continued operations) 4Q22/23: 7 000.0 2.4 4Q20/21: 4Q21/22: 2.5 PLN 317m 6 000.0 2.1 PLN 292m PLN 258m 1.9 1.9 5 000.0 1.8 2.0 53.2 88.4 164.8 134.2 1.4 74.3 4Q22/23 4 0
Slide 24: 2022/23 targets summary
2022/23 targets summary TARGETS ACHIEVEMENTS 4Q22/23 +40% YoY revenue growth from PLN 16bn continuing operations 24 1,962 stores and 1,673 ths m2 1,960 stores floorspace PLN 4.5bn PLN 4.4bn online sales, +19% YoY 8-9% EBIT 9.2% EBIT margin, PLN 1.5bn EBIT margin 4Q22/23 PRESENTATION PLN 1.1bn PLN 1.
Slide 25: 2023/24 + outlook
4Q22/23 25 03 4Q22/23 PRESENTATION 2023/24 + outlook
Slide 26: Positive outlook for the first quarter
Positive outlook for the first quarter 2Q22/23 C. 20% YoY Work on reducing 26 floorspace inventory by growth in retail Offline sales: Online sales: improving space (+90 net +25% YoY stable YoY rotation and stores in the splitting quarter) deliveries Customers accept price increases Target: increase
Slide 27: Strong 2023/24 SEE development
Strong 2023/24 SEE development C. 150 new stores (over 100 of Sinsay brand) in the SEE region: Romania (+50), Croatia (+20), 4Q22/23 Bulgaria (+20), Serbia (+20), other countries (+40) 27 Expansion of traditional stores of Sinsay and Reserved brands in Italy (+20) and Sinsay in Greece (+8) 4Q22/23 P
Slide 28: Million m2 of floorspace in 2023/24
2 million m2 of floorspace in 2023/24 TARGET FLOORSPACE GROWTH +10%-15% FOR UPCOMING YEARS YoY pa. 2 Floorspace (ths m ) I.2023 I.2024 target YoY (ths m2) 1,888.1 2,000 4Q22/23 1,673.4 Poland 753 845 12% 1,435.4 28 1,230.9 Abroad 921 1 155 25% TOTAL 1,673 2,000 20% I.2020 I.2021 I.2022 I.2023 I.2024
Slide 29: Cost savings in logistics
Cost savings in logistics Resignation from the outsourced FC in Stryków, transfer of operations to Jasionka FC (owned) and Pruszcz Gdański FC (rented). Operations run by LPP Logistics. 4Q22/23 Economies of scale in foreign logistics – 29 another Distribution Centre in Romania will allow for efficien
Slide 30: 2023/24 target: growth in profitability
2023/24 target: growth in profitability 4Q22/23 30 Offline revenues – PLN 1.1bn capex, 25% YoY growth due Gross profit margin including PLN 800m to higher floorspace between 51-53% for stores (2,340 stores) and positive LFLs PLN 0.5bn cost Working capital reductions normalization Online revenues - (
Slide 31: 2023/24 opportunities and risks
Opportunities Risks 4Q22/23 ▪ Development on new markets ▪ Impact of the economic 31 (South Eastern-Europe, slowdown on the purchasing Western Europe). behavior of clients. ▪ Collections tailored to the ▪ Persistent inflationary pressure. tastes and needs of clients. ▪ Geopolitical situation in East
Slide 32: Dividend payment continued
Dividend payment continued LPP’s Management Board proposed a dividend payment 4Q22/23 for the financial year 2022/23 in the amount of PLN 430 per share. 32 Proposed dividend day (i.e. the date on which the list of shareholders entitled to dividend is established) at July 10, 2023. Proposed dividend
Slide 33: Q&A
4Q22/23 PRESENTATION 33 4Q22/23 Q&A 04
Slide 34: Glossary
Poland Retail sales in Poland and other sales of LPP SA. Region including: CEE (Czech Republic, Slovakia, Hungary), Baltic (Lithuania, Latvia, Estonia), SEE (Bulgaria, Romania, Croatia, Serbia, Slovenia, Bosnia and Herzegovina, and from 2021/22 Abroad Northern Macedonia), WE (Germany, UK, Finland),
Slide 35: Contact
discoverlpp company/lpp-sa discoverlpp discoverlpp Kontakt GDAŃSK HQs CONTACT FOR INVESTORS CONTACT FOR MEDIA WWW.LPP.COM Łąkowa 39/44, 80-769 Gdańsk Email: [email protected] Email: [email protected] Tel. +48 58 76 96 900 Email: [email protected]