Ellos Holding AB · OMXSTO:ELLOS
Ellos Holding AB — Debt Investor Presentation (November 2023)
35 slides from Ellos Holding AB's debt investor presentation, Nov 9, 2023
Slide 1: Roadshow Presentation November 2023
Roadshow Presentation November 2023
Slide 2: Disclaimer
Disclaimer Acceptance of limitations: The information in this presentation (the "Material") is furnished by Ellos Group AB (publ) (corporate identity number 559175-1325) (the "Company") solely for information purposes to investors in respect of the bonds dated 25 July 2019 (the "Bonds"). The intende
Slide 3: Today’s presenters
Today’s presenters Hans Ohlsson Johan Stigson Chief Executive Officer Chief Financial Officer 3
Slide 4: Agenda
Agenda 1 Ellos Group recap and Q3 highlights 2 Strategy overview and financial deep-dive 3 Appendix
Slide 5: Ellos Group recap | The leading Nordic e-commerce group
Ellos Group recap | The leading Nordic e-commerce group The go-to player for the “The midlife Woman”1 Revenue split1 Geographical presence Home 59% Segment 37% 3% Fashion Complementary f External 36% Internal Type brands 64% brands 3.5bn 1.8bn 51% 252m 3.1m Net Gross Gross Adj. Active sales (SEK) pr
Slide 6: History recap | Joining forces anew with Nordic Capital
History recap | Joining forces anew with Nordic Capital Selected milestones (2013-2023) Delivering on Nordic Capital becomes the strategy in place majority owner of Ellos due and improving to FNG insolvency. profitability Launch of Jotex in Launch of Jotex in the Netherlands and Divestment of Stayha
Slide 7: Q3 Highlights | Profitability focus continues to pay off
Q3 Highlights | Profitability focus continues to pay off Strong profitability improvement ▪ We are delivering strong results, driven primarily by a stronger gross margin, lower marketing costs and lower operating costs. The gross margin increased 2.1 percentage points to 52.1 per cent, representing
Slide 8: Q3 | Net sales, gross margin, and Adj. EBITA development
Q3 | Net sales, gross margin, and Adj. EBITA development Net sales (SEKm) and Gross margin (%) (36)m / +2.1pp Comments ▪ Net sales during Q3 decreased by 4.2% YoY 1,059 1,042 driven by a negative market sentiment and 993 dampened consumer purchasing power as well 830 853 847 863 858 861 825 763 778
Slide 9: Q3 | Net debt and inventory development
Q3 | Net debt and inventory development Net debt (SEKm)1 Comments 26m / (0.9)x ▪ The strong financial performance in Q3 Net debt Net debt / LTM Pre IFRS EBITDA contributed to a decrease in leverage of 0.9x YoY. Hence, the leverage has decreased by 4.4x from the end of Q1 2023 11.5x 13.1x 11.2x ▪ Giv
Slide 10: Agenda
Agenda 1 Ellos Group recap and Q3 highlights 2 Strategy overview and financial deep-dive A Strategy overview B Ellos Group financial development C Core brands financial development D Cost actions and profitability overview 3 Appendix
Slide 11: Strategic initiatives | Pivoting towards a verticalized and personalised player
Strategic initiatives | Pivoting towards a verticalized and personalised player targeting a clear customer group 2019 | Leading generic Nordic E-Commerce Platform 2023 | Verticalized platform for Nordic Women 30-60+ Scalable e-Commerce Platform Woman 30-60+ in the Nordics Market & Wallet-Share In Co
Slide 12: Profitable Growth Strategy | Leveraging unique assets
Profitable Growth Strategy | Leveraging unique assets with focus on Core Customer Group and her potential wallet CORE & SCALABLE GROWTH CORE VERTICALS & ADJACENCIES ASSETS DIMENSIONS CATEGORIES Integrated Customer Payment acquisition Solution Penetration/ Across all sites Verticalized Underwear / Fa
Slide 13: Strategic initiatives | Selected initiatives pursued since 2022
Strategic initiatives | Selected initiatives pursued since 2022 1 ▪ Scale on Core Customer Segment, Women 30-60 years – and her total potential wallet Focus on the core customer segment ✓ ▪ ▪ We know Her / the Market Segment; >5 million records on file / curation & personalisation Divestment of Stay
Slide 14: Strategic initiatives | In-house developed digital payment solutions
Strategic initiatives | In-house developed digital payment solutions Current Elpy markets Buy-now-pay-later (“BNPL”) portfolio… Strategic initiatives Establishment as a brand and business area in the Group Manager appointed / part of Executive Committee Consolidation Consolidation of all payment sol
Slide 15: Agenda
Agenda 1 Ellos Group recap and Q3 highlights 2 Strategy overview and financial deep-dive A Strategy overview B Ellos Group financial development C Core brands financial development D Cost actions and profitability overview 3 Appendix
Slide 16: Underlying profitability and stability in the core business
Underlying profitability and stability in the core business | The merchandise margin showcase pricing power Development of merchandise sales (SEKm) and merchandise margin (%) Comments Merchandise sales Merch margin, % ▪ The main revenue driver for Ellos Group is the merchandise sales through its own
Slide 17: Development in select variables (1/3)
Development in select variables (1/3) | Cost control and efficiency in combination with market normalisation is paying off Development of marketing cost (SEKm) and marketing cost of sales (%) Comments Marketing costs spiked during Covid ▪ As part of the strategy that has been implemented Marketing c
Slide 18: Development in select variables (2/3)
Development in select variables (2/3) | Distribution costs normalising and efficiency in other operating selling expenses Development of distribution cost (SEKm) and net distribution cost of sales (%)1 Comments ▪ Distribution costs mainly relate to outbound Distribution cost Net distribution CoS (%)
Slide 19: Development in select variables (3/3)
Development in select variables (3/3) | Admin expenses under control and an overall strong EBITA result over the last quarters Development of admin expenses (SEKm) and admin cost of sales (%) Comments ▪ Admin expenses includes, among others, product, Admin expenses Admin CoS, % finance, HR, IT, GM&A
Slide 20: Agenda
Agenda 1 Ellos Group recap and Q3 highlights 2 Strategy overview and financial deep-dive A Strategy overview B Ellos Group financial development C Core brands financial development D Cost actions and profitability overview 3 Appendix
Slide 21: Core brand deep-dive (1/2)
Core brand deep-dive (1/2) | has consequently delivered stable operational performance, as shown in the financial figures Development of merchandise sales (SEKm) and merchandise margin (%) (11)m / +0.2pp Comments ▪ ellos has maintained a stable merchandise margin Merchandise sales Merchandise margin
Slide 22: Core brand deep-dive (2/2)
Core brand deep-dive (2/2) | Nordic’s deliver consistent operational performance Development of merchandise sales (SEKm) and merchandise margin (%) Comments ▪ The merchandise margin within Jotex’s operations has Merchandise sales Merchandise margin (%) through a historical perspective remained somew
Slide 23: Agenda
Agenda 1 Ellos Group recap and Q3 highlights 2 Strategy overview and financial deep-dive A Strategy overview B Ellos Group financial development C Core brands financial development D Cost actions and profitability overview 3 Appendix
Slide 24: Cost initiatives | Permanent cost actions already showing impact
Cost initiatives | Permanent cost actions already showing impact – with the full effect yet to be seen Cost initiatives description Cost actions – financial impact (SEKm) Initiatives already showing: ▪ Operational efficiency is important and key to both increase and defend the margin. As a result of
Slide 25: Financial development | Actions starting to be reflected in the figures
Financial development | Actions taken starting to being reflected in the financial figures, with additional upside to be realised Net sales (SEKm) Adj. EBITA (SEKm) Adj. EBITDA (SEKm) Pre IFRS EBITDA (SEKm)1 Net debt (SEKm)2 290 11.5x 13.1x 11.2x 7.2x 1,504 1,502 1,505 1,432 3,624 3,578 38 (159 ) (1
Slide 26: Closing remarks | Transitioning to a verticalized e-commerce specialist
Closing remarks | Transitioning to a verticalized e-commerce specialist with an adjusted cost base to support profitability KPIs in 20191 in Q3 2023 Δ since bond issue Ellos Group ’2.0’ Company “The leading Nordic “Exceptional shopping value n.a. n.a. positioning E-Commerce Platform” for Nordic Wome
Slide 27: Q&A Thank you!
Q&A - Thank you!
Slide 28: Agenda
Agenda 1 Ellos Group recap and Q3 highlights 2 Strategy overview and financial deep-dive 3 Appendix
Slide 29: Profitability summary
Profitability summary | Strong margin development on the back of cost actions and profitability optimisations Bridge – 2022 EBITA to Q3 LTM pre IFRS EBITDA (SEKm) Despite inflationary pressure, negative currency effects and negative sales growth, Ellos has been able to minimise the gross Margin 1 pr
Slide 30: Reported financial statements | Income Statement
Reported financial statements | Income Statement 3 MONTHS 3 MONTHS 9 MONTHS 9 MONTHS Amount in SEKm JUL - SEP 2023 JUL - SEP 2022 JAN - SEP 2023 JAN - SEP 2022 Net sales 824.5 860.8 2,443.0 2,581.8 Cost of goods sold -394.8 -430.6 -1,167.5 -1,264.6 Gross profit 429.7 430.2 1,275.5 1,317.2 Selling ex
Slide 31: Reported financial statements | Balance Sheet (1/2)
Reported financial statements | Balance Sheet (1/2) Amounts in SEKm 2023-09-30 2022-09-30 2022-12-31 Assets Non-current assets Goodwill 677.0 677.0 677.0 Trademarks 445.3 445.3 445.3 Customer relationships 299.5 394.1 370.4 Development expenditure 87.5 95.5 94.5 Right-of-use assets 462.0 512.4 495.8
Slide 32: Reported financial statements | Balance Sheet (2/2)
Reported financial statements | Balance Sheet (2/2) Amounts in SEKm 2023-09-30 2022-09-30 2022-12-31 Equity and Liabilities Equity attributable to parent company's shareholders Share capital 0.5 0.5 0.5 Additional paid-in capital 683.2 679.9 683.2 Reserves -21.0 36.9 -41.4 Retained earnings includin
Slide 33: Reported financial statements | Cash Flow Statement
Reported financial statements | Cash Flow Statement 3 MONTHS 3 MONTHS 9 MONTHS 9 MONTHS Amounts in SEKm JUL - SEP 2023 JUL - SEP 2022 JAN - SEP 2023 JAN - SEP 2022 Cash flow from operating activities Cash-flow from operations before changes in working capital 36.3 5.3 31.0 -31.6 Cash-flow from chang
Slide 34: Management Accounts | Ellos Group High Level P&L
Management Accounts | Ellos Group High Level P&L Management accounts, SEKm 2020 2021 2022 2023 LTM YTD 2022 YTD 2023 Total sales 3,197.1 3,631.9 3,581.6 3,417.2 2,555.9 2,391.5 COGS -1,539.1 -1,783.7 -1,801.2 -1,688.6 -1,273.0 -1,160.4 Gross Profit 1,658.0 1,848.3 1,780.4 1,728.6 1,282.9 1,231.2 Sel
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