Modivo Sa · GPW:MDV
Modivo Sa — CCC — Q1 2018 Earnings Presentation
49 slides from Modivo Sa's earnings presentation, 2018
Slide 1: Results presentation 2018 Q1
Re s ul t s pr e s en t a t ion 2018 Q1
Slide 2: Legal disclaimer
02 L E G A L DI S C L A IME R R e s u l t s p r e s e n t a t i o n 2 0 18 Q 1 This presentation (Presentation) has been prepared by CCC S.A. based in Polkowice („CCC”). The presentation is for information only and its purpose is to present selected data on CCC Capital Group (CCC Group). This presen
Slide 3: Agenda
03 AG E NDA R e s u l t s p r e s e n t a t i o n 2 0 18 Q 1 • Key developments • Financial results • IFRS 16 • Outlook • Q&A
Slide 4: Key developments
KEY DE V E L OP ME N T S
Slide 5: Q1 results shaping events
05 Q1 R E S ULT S H A P IN G E V E N T S INTRODUCTION PROCESS UNFAVORABLE OF IFRS 16 OPTIMIZATION WEATHER CONDITIONS NEW FINANCIAL REPORTING SCHEME EXCEPTIONALLY SHARP WINTER IN INTRODUCED - SIGNIFICANT CHANGES FIRST EFFECTS OF COST THE REGION LASTING UNTIL THE END TO ASSETS AND PROFIT AND LOSS OPTI
Slide 6: CCC Group in Q1
06 C C C G R OUP IN Q1 2 018 Key developments +52% SALES ONLINE OPERATIONS ALREADY IN 20 COUNTRIES 17 12 934 COUNTRIES „OFF-LINE” COUNTRIES „ON-LINE” STORES –4% DECREASE OF GROUP’S SALES –20% LFL IN OFFLINE STORES +7% YOY
Slide 7: CCC Group already in 20 countries
07 C C C G R OUP A L R E A DY IN 2 0 C OUN T R IE S Key developments Sweden Estonia 1 Latvia 7 Russia 22 Lithuania 4 Poland 450 Germany 78 Czech Rep. 87 Ukraine 6 Slovakia 51 Own stores Austria 46 Franchise stores Moldova 1 Hungary 73 eobuwie (e-commerce) Slovenia 13 Romania 55 Croatia 24 STORE COUN
Slide 8: Dynamic floorspace growth
08 DY N A MIC F L O OR S PAC E G R OW T H Key developments FLOORSPACE GROWTH YEAR TO DATE FLOORSPACE GROWTH YEAR TO DATE BY SEGMENT [k sqm] [k sqm] +19 552 536 –3 PL 8,5 abroad abroad Other 54,5% 54,3% 3,5 countries Other countries [k sqm]: +16 k sqm CCC Russia: +2,7 CCC Romania: +0,8 +3,0% Q1 2018
Slide 9: Like for like sales
09 L IK E F OR L IK E S A L E S Key developments LFL WEATHER IMPACT ON Q1 SALES BY REGION sales temperature* 11,4% [M PLN] [°C] 7,5% 150 6 3,8% 2,7% 1,6% – 1 + -1,3% 100 -2,1% -4 -5,1% -9 50 -14 -17,9% -20,6% -20,1% 0 -19 -22,6% CCC Poland CCC CE CCC WE CCC GROUP 01-10.I. 11-20.I. 21-31.I. 01-10.II.
Slide 10: Sales structure
10 S A L E S S T R UC T UR E Key developments CCC GROUP’S REVENUES QUARTERLY SALES [M PLN] [M PLN] e-commerce share 15% —> 24% 720 1 361 58 694 1 126 1 126 987 860 720 694 665 -54 -14 5 -12 -9 Q1 2017 Poland CEE WE Other Wholesale+ e-commerce Q1 2018 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q
Slide 11: Quarterly sales dynamics
11 Key developments QUA R T E R LY S A L E S DY N A MIC S OFFLINE CHANNEL ONLINE CHANNEL [M PLN] [M PLN] revenue decrease of 14% revenue increase of 52% 1 400 250 1 200 1 162 199 200 1 021 977 169 1 000 841 149 146 795 150 800 609 111 592 105 600 525 100 72 65 400 50 200 0 0 Q2 2016 Q3 2016 Q4 2016
Slide 12: Financial results
F IN A NCI A L R E S ULT S FOR COMPARABILITY REASONS, EVERYWHERE WHERE IT ISN’T INDICATED OTHERWISE, THE FINANCIALS ARE PRESENTED WITHOUT CHANGES RESULTING FROM INTRODUCTION OF IFRS17.
Slide 13: Gross profit on sales margin dynamics
13 G R O S S P R OF I T ON S A L E S M A R G IN DY N A MIC S Financial results QUARTERLY GROSS PROFIT ON SALES MARGIN GROSS PROFIT ON SALES MARGIN [%] [%] Q1 2017 VS Q1 2018 55% 51,2% 50,3% 48,7% 54,0% 47,8% 53,8% 52,2% 52,1% offline 50% 51,1% 51,0% 48,7% CCC Group 39,5% 47,8% 37,4% 45% 40% e-commer
Slide 14: SG&A costs analysis (without IFRS 16)
14 S G & A C O S T S A N A LYS I S (w i t hou t IF R S 16) Financial results SG&A COSTS BY QUARTER SG&A COSTS BY SALES CHANNEL [M PLN] [M PLN] + 89% YOY e-commerce SG&A 512 43 64 51 28 27 40 41 19 18 443 441 411 24 396 38 29 366 22 156 + 15% YOY SG&A offline 340 114 318 22 109 107 36 20 100 87 81 61
Slide 15: SG&A costs per sqm (without IFRS 16)
15 S G & A C O S T S P E R S Q M (w i t hou t IF R S 16) Financial results SG&A/SQM STORE COSTS/SQM [PLN/month] [PLN/month] ANALYSIS e-commerce: +12 PLN SG&A/sqm 44 33 17 16 23 21 30 31 –2% YOY store costs/sqm 350 320 306 320 308 28 277 23 284 17 293 33 16 18 17 106 25 80 80 82 221 73 205 210 216 21
Slide 16: CCC Group's results (without IFRS 16)
16 C C C G r o u p’s r e s u l t s (w i t hou t IF R S 16) Financial results M PLN Q1 2017 Q1 2018 YOY Sales 720,4 694,1 –3,7% We expect significant postponement Gross profit on sales 350,7 332,0 –5,3% of positive effects of spring collection sales to Q2. Gross margin 48,7% 47,8% –0,9 p.p. SG&A cost
Slide 17: Inventory
17 IN V E N T ORY Financial results INVENTORY [M PLN] 1 717 1 509 244 1 418 1 360 202 1 285 164 132 142 1020 785 982 89 96 720 842 763 598 732 66 385 583 469 688 545 587 508 496 491 307 341 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Stores Distribution Center eobuwie Inventory i
Slide 18: Inventory structure as of 31.03.2018
18 IN V E N T ORY S T R UC T UR E - A S OF 31. 0 3 . 2 018 . Financial results INVENTORY BY SEASON (QUANTITY) – STORES AND DISTRIBUTION CENTER 50,0% 40% 30% 20% 10% 0% Spring Summer Autumn Winter All year Vast majority of inventory ready for Spring-Summer season. Autumn-Winter collection sold out as
Slide 19: Debt under control (without IFRS 16)
19 DE B T UNDE R C ON T R OL (w i t hou t IF R S 16) Financial results NET DEBT NET DEBT / EBITDA [M PLN] 2000 2,3 2,0 1139 941 988 905 1000 674 833 652 406 0 -1000 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q1 2018 Cash Longterm debt Shortterm debt Net debt Net debt to
Slide 20: Cash flows (without IFRS 16)
20 C a s h f lo w s (w i t hou t IF R S 16) Financial results WORKING CAPITAL CASH FLOWS [M PLN] [M PLN] 328 493 264 -120 -139 44 -12 -65 -1 285 -322 -1 717 -357 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Inventory Receivables Payables Operations CF Investment CF Financial CF CF structure standard for the firs
Slide 21: IFRS 16
IF R S 16
Slide 22: IFRS 16 implementation in CCC Group
22 IF R S 16 IMP L E ME N TAT ION IN C C C G R OUP I F R S 16 CCC Group decided to introduce the IFRS Leasing from 01.01.2018. A simplified retrospective approach was applied. Consequences of applying of simplified approach: • Retrospective calculation of financials effecting in restatement of retai
Slide 23: Schedule and process
23 S C HE DUL E A ND P R OC E S S I F R S 16 Contract Department CCC Project team Expansion Department Excel files: 372 STORE DATA AND CONTRACTS IFRS16 DATA Contracts: 1 171 MANAGEMENT SYSTEM CONVERSION SYSTEM IFRS 16 Financial report Pages reviewed: 59 721 15 months 2 months Q1 2018 INTERNAL AUDITO
Slide 24: IFRS 16: changes in consolidated financial report
24 IF R S 16 IMP L E ME N TAT ION IN C C C G R OUP I F R S 16 IFRS 16: Changes in consolidated financial report AMOUNTS IN CONSOLIDATED FINANCIAL ALL THE LEASING CONTRACTS STATEMENT AS OF 31.03.2018 EFFECT Right to use the assets 2 403,7 M PLN + (Assets) Leasing debt 2 418,9 M PLN + (Liabilities) Re
Slide 25: IFRS 16 impact on profit and loss
25 IF R S 16 IMPAC T ON C ON S OL IDAT E D F IN A NC I A L R E S ULT S – P R OF I T A ND L O S S I F R S 16 AS OF 31.03.2018, AS OF 31.03.2018 [M PLN] WITHOUT IFRS 16 IFRS 16 EFFECT AS PUBLISHED Gross profit on sales 332,0 — 332,0 Store costs 293,6 6,5 300,1 Depreciation 25,9 111,0 136,9 Rent costs
Slide 26: IFRS 16 impact on assets and liabilities
26 IF R S 16 IMPAC T ON C ON S OL IDAT E D F IN A NC I A L R E S ULT S – A S S E T S A ND L I A BIL I T IE S I F R S 16 AS OF 31.03.2018, AS OF 31.03.2018 [M PLN] WITHOUT IFRS 16 IFRS 16 EFFECT AS PUBLISHED Total assets 3 319,3 2 403,7 5 723,0 Fixed assets 1 198,6 2 403,7 3 602,3 Right to use the as
Slide 27: IFRS 16 impact on cash flows
27 IF R S 16 IMPAC T ON C ON S OL IDAT E D F IN A NC I A L R E S ULT S – CA S H F L OW S I F R S 16 AS OF 31.03.2018, AS OF 31.03.2018 [M PLN] WITHOUT IFRS 16 IFRS 16 EFFECT AS PUBLISHED Operational cash flows (356,7) 113,4 (243,3) Investment cash flows (64,6) 0,0 (64,6) Financial cash flows 44,1 (1
Slide 28: Outlook
OU T L OOK
Slide 29: Outlook
29 OU T L O OK LAUNCH OF NEW CONSOLIDATION AND NEW TARGET POSITIVE MARKETS DEVELOPMENT OF GROUP BEGINNING SALES NETWORK OF Q2 ALL NEW MARKETING VERY GOOD START NEW TARGETS BOTH ACQUISITIONS OF AGENCY CAMPAIGN TARGETTING OF SPRING COLLECTION OFFLINE AND ONLINE AND FRANCHISE STORES YOUNG CUSTOMERS SAL
Slide 30: Outlook
30 OU T L O OK LAUNCH OF NEW MARKETS CONSOLIDATION AND NEW TARGET POSITIVE DEVELOPMENT OF GROUP BEGINNING SALES NETWORK OF Q2 NEW TARGETS BOTH ALL NEW MARKETING VERY GOOD START ACQUISITIONS OF AGENCY OFFLINE AND ONLINE CAMPAIGN TARGETTING OF SPRING COLLECTION AND FRANCHISE STORES YOUNG CUSTOMERS SAL
Slide 31: New offline markets beginning in 2019
31 NE W OF F L INE M A R K E T S BE G INNIN G IN 2 019 Outlook Kazakhstan Georgia Signing of a letter of intent for the Peeraj Group to open CCC stores in Kazakhstan and Georgia. Upcoming markets: Georgia Kazakhstan Kuwait • Franchise contract with Apparel: 6 Bahrain Bahrain Middle East countries: S
Slide 32: New markets online
32 Outlook NE W M A R K E T S ONL INE • Launch of sales in Italy (March) France • Launch of sales in Spain (April) • Planned launch of sales in France in 2018 Italy Spain
Slide 33: Outlook
33 OU T L O OK CONSOLIDATION AND LAUNCH OF NEW DEVELOPMENT OF NEW TARGET POSITIVE MARKETS SALES NETWORK GROUP BEGINNING OF Q2 ACQUISITIONS OF AGENCY ALL NEW MARKETING VERY GOOD START NEW TARGETS BOTH AND FRANCHISE STORES CAMPAIGN TARGETTING OF SPRING COLLECTION OFFLINE AND ONLINE YOUNG CUSTOMERS SAL
Slide 34: Consolidation of sales network
34 C ON S OL IDAT ION OF S A L E S NE T W OR K Outlook 38M Acquisition of Adler’s population agency stores in Poland (450 stores) • deal value: 68,5M PLN • profit before tax in 2017: 18,5M PLN • 41 stores located in south-eastern Poland (37 existing, 4 under construction) • cash to be used by Adler
Slide 35: Outlook
35 OU T L O OK NEW TARGET LAUNCH OF NEW CONSOLIDATION AND GROUP POSITIVE MARKETS DEVELOPMENT OF BEGINNING SALES NETWORK OF Q2 ALL NEW MARKETING VERY GOOD START NEW TARGETS BOTH ACQUISITIONS OF AGENCY CAMPAIGN TARGETTING OF SPRING COLLECTION OFFLINE AND ONLINE AND FRANCHISE STORES YOUNG CUSTOMERS SAL
Slide 36: Youngsters – new customer group
36 YOUN G S T E R S – NE W C U S T OME R G R OUP Outlook • Broadening of the customer base by younger generation. • Bigger collection of branded shoes valued by young Customers. • Completely new communications for young Customers (18-24 years old) • Social Media • CCC Youngsters campaign lasting 1,5
Slide 37: Outlook
37 OU T L O OK POSITIVE LAUNCH OF NEW CONSOLIDATION AND NEW TARGET BEGINNING MARKETS DEVELOPMENT OF GROUP OF Q2 SALES NETWORK ALL NEW MARKETING VERY GOOD START NEW TARGETS BOTH ACQUISITIONS OF AGENCY OF SPRING COLLECTION CAMPAIGN TARGETTING OFFLINE AND ONLINE AND FRANCHISE STORES SALES IN APRIL YOUN
Slide 38: April 2018 – a good start to Q2
38 A P R IL 2 018 – A G OOD S TA R T T O Q 2 Outlook WEEKLY SALES IN APRIL USD/PLN RATE IN Q1 YOY [M PLN] 160 4,5 2018 4,2 140 2017 3,9 120 2017 3,6 2018 100 3,3 80 3,0 1-10.IV 11-20.IV 21-30.IV 2.I. 15.I. 1.II. 15.II. 1.III. 15.III. 30.III. Very good weather in April. Favorable situation on forex m
Slide 39: Q&A
Q&A
Slide 40: Contact
40 C ON TAC T BARTŁOMIEJ PIEKARSKI IR Manager T: +48 76 84 58 686 M: +48 667 872 742 E: [email protected]
Slide 41: Thank you
CCC Thank you
Slide 42: Backup
SI LF ceahiee, $y Sh atted 5)
Slide 43: Coherent floorspace growth
43 C OHE R E N T F L OOR S PAC E G R OW T H Backup 30.06.2016 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 TYPE COUNTRY sqm count sqm count sqm count sqm count sqm count sqm count sqm count sqm count Poland 197 682 422 201 644 424 212 242 436 214 696 433 220 795 439 2
Slide 44: Stable sales structure
44 S TA BL E S A L E S S T R UC T UR E Backup SALES STRUCTURE FOOTWEAR SALES STRUCTURE footwear bags cosmetics & accessories kids men ladies 87% 7% 6% 12% 25% 63% [Q1 2017 – 89%] [Q1 2017 – 6%] [Q1 2017 – 5%] [Q1 2017 – 13%] [Q1 2017 – 25%] [Q1 2017 – 62%] Q1 2018 Q1 2018
Slide 45: Historical profit and loss statement
45 HI S T OR ICA L P R OF I T A ND L O S S S TAT E ME N T Backup WITH IFRS16 M PLN 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q18 Sales 860,0 664,6 1 126,1 720,4 1 125,8 987,3 1 360,5 694,1 694,1 Gross profit on sales 464,4 339,3 607,0 350,7 587,7 503,1 708,5 332,0 332,0 Gross profit on sales margin 5
Slide 46: Historical balance sheet – assets
46 HI S T OR ICA L BA L A N C E S HE E T – A S S E T S Backup WITH IFRS16 M PLN 30.06.2016 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 31.03.2018 Intangibles 7,5 7,8 181,2 181,2 189,2 193,0 197,5 200,5 200,5 Goodwill 210,5 210,5 106,2 106,2 106,2 106,2 106,2 106,2 10
Slide 47: Historical balance sheet – liabilities
47 HI S T OR ICA L BA L A N C E S HE E T – L I A BIL I T IE S Backup WITH IFRS16 M PLN 30.06.2016 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 31.03.2018 Debt 366 366,0 366,0 436,0 436,0 436,0 436,0 436,0 436,0 Deferred tax debt 1,5 1,2 34,1 34,6 33,4 32,3 33,2 34,7 3
Slide 48: Glossary of terms used
48 S Ł OW NIK U Ż Y T YC H P O JĘ Ć Backup TERM MEANING CEE Czech Republic, Slovakia, Hungary, Croatia, Bulgaria, Slovenia WE Germany and Austria Others Latvia, Lithuania, Estonia, Ukraine, Russia, Serbia, Romania Detal Own store chain Hurt Franchise store chain and sales to other external companies
Slide 49: Shareholder structure – company controlled by the founder
49 S H A R E H OL DE R S T R UC T UR E – C OMPA N Y C ON T R OL L E D BY T HE F OUNDE R Backup SHAREHOLDER STRUCTURE AS OF 31.03.2018 ULTRO Sp. z o.o. ULTRO Sp. z o.o. Other affiliate of Mr Dariusz Miłek Other affiliate of Mr Dariusz Miłek Shareholders [2] and Mr Dariusz Miłek Shareholders [2] and M