Global Fashion Group S.A. · XETR:GFG
Global Fashion — Investor Day (September 2014)
22 slides from Global Fashion's investor day presentation, Sep 18, 2014
Slide 1: Kinnevik Capital Markets Day
Kinnevik Capital Markets Day Global Fashion Group | 18 September 2014
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is public information only, but it does not necessarily represent all information related to the issues discussed or presented herein, or all views of the company. The information has been researched by the company with due care but no repres
Slide 3: Global Fashion Group ("GFG") at a glance
GLOBAL FASHION GROUP (“GFG”) AT A GLANCE Latin America Russia & CIS Asia Pacific India Middle East 5 3 8 1 6 420m+ 285m+ 570m+ 1,240m+ 50m+ 353M 4.6M1 8.4M +165% +149%2 +61pp2 Active Unique Total GMV Revenue EBIT Margin Customers Visitors Orders Growth Growth in Improvement (as of (H1 2014) (H1 2014
Slide 4: Combination of brands under GFG marks 3rd phase of development
COMBINATION OF 5 BRANDS UNDER GFG MARKS 3RD PHASE OF DEVELOPMENT 2015/2016 Global Integration 2013/2014 2011/2012 Scale & Stabilization Sourcing and private label integration Foundation Geographic expansion into Leverage global scale adjacent markets Best practice sharing 5distinct busines
Slide 5: Benefits of combining companies under GFG
BENEFITS OF COMBINING 5 COMPANIES UNDER GFG Global development of exclusive Economies of scale in sourcing Global best practice sharing private label brands Global agreements for marketing Shared technology platform Improved ability to attract and and logistics infrastructure and development retain
Slide 6: GFG's markets offer tremendous opportunity
GFG’S MARKETS OFFER TREMENDOUS OPPORTUNITY Population (m) Fashion Market (€bn) Russia Online Fashion Ukraine (% Penetration) Kazakhstan 285m €75bn 4.2% Indonesia Vietnam Philippines Brazil UAE Singapore Mexico Oman Bahrain Malaysia Colombia Thailand Qatar Chile Kuwait Australia Argentina Saudi Arabi
Slide 7: Lack of retail infrastructure in GFG's markets
LACK OF RETAIL INFRASTRUCTURE IN GFG’S MARKETS 1,150 11,801 18,496 28,272 90,537 100,012 US Middle East Latin America Russia & CIS Asia Pacific1 Africa Consumers in GFG Markets are Leapfrogging Brick and Mortar Retail People per Retail Outlet in 2013 Source: Planet Retail, IMF 1 Excludes China, Japa
Slide 8: Strong internet and smartphone penetration growth in GFG's markets
STRONG INTERNET AND SMARTPHONE PENETRATION GROWTH IN GFG’S MARKETS GFG China US 2009 2014 2018 2009 2014 2018 2009 2014 2018 14% 29% 36% 27% 47% 56% 66% 80% 85% Internet 957 Users 731 777 (m) 638 337 364 279 203 255 3% 24% 54% 3% 38% 50% 18% 63% 77% Smartphone 1,426 Connections (m) 695 621 513 204 2
Slide 9: Scale of the GFG opportunity
SCALE OF THE GFG OPPORTUNITY Europe: Zalando Emerging Markets2: Lamoda, Dafiti, Jabong, Namshi, Zalora Emerging Markets (excl. China)2: Total Fashion Market ~€635bn in 2016E Europe1: 14-16 CAGR: 8.4% Total Fashion Market ~€348bn in 2016E 14-16 CAGR: 2.1% Europe1: Online Fashion EM (excl. China)2: ~€
Slide 10: Aspirational and differentiated assortment of GFG
ASPIRATIONAL AND DIFFERENTIATED ASSORTMENT OF GFG GLOBAL BRANDS FAST FASHION LOCAL BRANDS PRIVATE LABELS Relevant & Freshness & risk management Localization differentiation Attractive margins inspirational content 9
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Slide 12: We are present in the three biggest CIS markets
WE ARE PRESENT IN THE THREE BIGGEST CIS MARKETS Russia Active GDP p. capita (000 EUR) Plan 12.16 15.02 10.43 44% > 285m people 4.7 times of area of EU 2011 2013 2016 Population density per km2 Kazakhstan GDP p. capita (000 EUR) Russia 8.3 12.70 8.29 9.69 EU 117 53% USA 32 2011 2013 2016 Aver
Slide 13: Our customers are very demanding!
OUR CUSTOMERS ARE VERY DEMANDING! Confirmation of order by phone Cash payment on delivery Try-on and partial rejection on Fast courier delivery delivery 12
Slide 14: Confirmation calls help to break the psychological barrier between customer and e-commerce
CONFIRMATION CALLS HELP TO BREAK THE PSYCHOLOGICAL BARRIER BETWEEN THE CUSTOMER AND E-COMMERCE Consumer Specific Market Specific Call-center agent hourly gross salary USD, Average 33% of consumers have at least once refused to make a purchase online because they needed to consult with store personne
Slide 15: Payment on delivery overcomes lack of development in online payment
PAYMENT ON DELIVERY OVERCOMES LACK OF DEVELOPMENT IN ONLINE PAYMENT AND DISTRUST IN INTERNET SHOPS Consumer Specific Market Specific Payment method for online shopping Percent Cash on Delivery 51% 102% was penetration of active bank cards in 2013 2, still… 94% 17% Card on Delivery 4% Card Prepayment
Slide 16: Try-on and partial delivery overcome distrust in goods' quality
TRY-ON AND PARTIAL DELIVERY OVERCOME DISTRUST IN GOODS’ QUALITY AND RELIEVE CONSUMERS FROM PAINFUL RETURN PROCESS Consumer Specific Market Specific Reasons for offline purchase instead of online1 Time the goods take to travel back from customer to a warehouse in Central Russia2 Percent Days Wanted t
Slide 17: Courier delivery is inevitable in a market where postal services are not developed
COURIER DELIVERY IS INEVITABLE IN A MARKET WHERE POSTAL SERVICES ARE NOT DEVELOPED AND CONSUMERS APPRECIATE SPEED Consumer Specific Market Specific Fast Delivery for me is..1 Same Day 25 20% of parcels are delivered with violation of promised terms2 9 Next Day 19 44 22% of Post clients are not satis
Slide 18: Illustration – Russian Post Office
ILLUSTRATION – RUSSIAN POST OFFICE 17
Slide 19: Lamoda Express (LME) is a professional sales force
LAMODA EXPRESS (LME) IS A PROFESSIONAL SALES FORCE Lamoda approach to delivery with strong focus on sales force development Successful Sales Start with Professional Attitude Better Connection Positive and helpful attitude with the Client Trained and incentivized on customer service Neat and profe
Slide 20: Mastering the logistic challenge
MASTERING THE LOGISTIC CHALLENGE Russia & CIS Case Study 50x 2x ~90 >70% DE CN Cities Purchasing Power 770 Salesmen 22 # Orders per Route Split of Orders Shipped1 Ext. Pickup 4% Ext. Courier 16% 450 Post Own Cars 10min >40% 18% Client Population LM Express Interaction 62% 1 As of Sep-2014. 19
Slide 21: Full control of goods in transit enables faster cycle time
FULL CONTROL OF GOODS IN TRANSIT ENABLES FASTER CYCLE TIME Full Delivery and Return Cycle, Lead Times in Days Order online + Delivery + Return + On stock = Total Moscow 1 2 2 5 Ø Regions 2 4 2 7 Ø External Providers 6 9 2 17 20
Slide 22: Key themes going forward
KEY THEMES GOING FORWARD 1 Progress Global Integration 2 Strengthen Private Label Initiative 3 Develop Third Party Services 4 Increase Market Place Contribution 5 Execute Path To Profitability 21