Douglas Ag · XETR:DOU
Douglas — Debt Investor Presentation (May 2020)
39 slides from Douglas's debt investor presentation, May 27, 2020
Slide 1: Financial Results
Financial Results Düsseldorf, 27 May 2020
Slide 2: Notice to Recipients
NOTICE TO RECIPIENTS This presentation and any materials distributed in connection herewith (together, the “Presentation”) have been prepared by Douglas GmbH (the “Company”) solely for use at this presentation. By attending the meeting where this Presentation is made, or by reading the presentation
Slide 3: Today's Speakers
TODAY’S SPEAKERS Matthias Born Group CFO Vanessa Stützle Group CDO 3
Slide 4: Our Q2: Heavily Impacted by COVID-19
OUR Q2: HEAVILY IMPACTED BY COVID-19 LOCK-DOWN OF STORE BUSINESS › Excellent Q1 momentum continued into Jan & Feb ACROSS EUROPE FROM MARCH ONWARDS › Global COVID-19 pandemic with severe impact on non-food bricks and mortar retail › In accordance with national and regional regulation, store trading s
Slide 5: Net Sales: Strong Momentum in Jan + Feb, Severe COVID-19 Impact in March
NET SALES: STRONG MOMENTUM IN JAN + FEB… …WITH SEVERE COVID-19 IMPACT IN MARCH Q1 2019/20 JAN+FEB 2019/20 MAR 2019/20 H1 2019/20 (€bn) (€m) (€m) (€bn) 479 507 1.95 1.95 249 149 1.3 1.2 Jan+Feb Jan+Feb Mar 2018/19 Mar 2019/20 2018/19 2019/20 Q2 2019/20 (€m) 728 LfL 656 Q1 2018/19 Q1 2019/20 6M 2018/1
Slide 6: Adjusted EBITDA: Strong Momentum in Jan + Feb, Severe COVID-19 Impact in March
ADJUSTED EBITDA: STRONG MOMENTUM IN JAN + FEB… …WITH SEVERE COVID-19 IMPACT IN MARCH Q1 2019/20 JAN+FEB 2019/20 MAR 2019/20 H1 2019/20 (€m) (€m) (€m) (€m) 23 22 17 225 218 196 186 0 Jan+Feb Jan+Feb Mar 2018/19 Mar 2019/20 2018/19 2019/20 Q2 2019/20 (€m) 39 23 Q1 2018/19 Q1 2019/20 6M 2018/19 6M 2019
Slide 7: Countermeasures Taken Mid-March
COUNTERMEASURES TAKEN MID-MARCH BUSINESS CONTINUITY ENSURED INFLOWS Focused push of E-Commerce MAXIMIZED Implementation of Health & Safety measures LIQUIDITY SAFEGUARDED Agreements with suppliers Short-term labour programs OUTFLOWS Rent negotiations and use of legislation allowing MINIMIZED not to p
Slide 8: Our E-Commerce Success Story in Times of Crisis
OUR E-COMMERCE SUCCESS STORY IN TIMES OF CRISIS STRONG MOMENTUM CONTINUED AND ACCELERATED IN MARCH Q1 2019/20 JAN+FEB 2019/20 MAR 2019/20 H1 2019/20 (€m) (€m) (€m) (€m) 415 82 101 43 64 327 Jan+Feb Jan+Feb Mar 2018/19 Mar 2019/20 2018/19 2019/20 249 Q2 2019/20 202 (€m) 166 125 Q1 2018/19 Q1 2019/20
Slide 9: Decisive Action Taken to Boost E-Commerce
DECISIVE ACTION TAKEN TO BOOST E-COMMERCE BENEFITING FROM OUR STRONG OMNICHANNEL BUSINESS IMMEDIATE ACTION MID OF MARCH FIRST-TIME ONLINE CUSTOMERS ACQUIRED › Business continuity secured › Supply chain optimization (e.g. cross-border shipping, transfer of store inventory to online etc.) new omnichan
Slide 10: Catalyst for E-Commerce Acceleration
CATALYST FOR E-COMMERCE ACCELERATION FURTHER ACCELERATED E-COMMERCE GROWTH WITH NET SALES EXCEEDING €670M E-COMMERCE NET SALES (IN M€) 585 Q2 2019/20 vs. Q2 2018/19 423 CAGR 383 324 261 180 145 106 69 39 50 23 32 6 9 13 19 2 4 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 1
Slide 11: Positive Development of All E-Commerce KPIs
POSITIVE DEVELOPMENT OF ALL E-COMMERCE KPIS ONLINE NET SALES ONLINE REVENUE SHARE GROUP 6M2019/20 +27.2% CONVERSION RATE AVERAGE BASKET (INCL. VAT) +0.1%pts +3.9% GERMANY 6M2019/20 MOBILE REVENUE SHARE APP REVENUE SHARE +2.0%pts +3.0%pts 11
Slide 12: Lock-down Boosting Our Platform Business
LOCK-DOWN BOOSTING OUR PLATFORM BUSINESS › Marketplace supports E-Commerce growth with quadrupled sales in Q2, esp. in March ACCELERATED PLATFORM ORDER VALUE SHARE IN ALL SALES GROWTH BASKETS INCLUDING › Strong cross-selling through mixed baskets PARTNER PRODUCTS › Partner program growing >50% per m
Slide 13: Assortment as Growth and Margin Driver
ASSORTMENT AS GROWTH AND MARGIN DRIVER FOCUS ON NEWNESS AND EXCLUSIVITY › Stable owned and exclusive brands OWNED & EXCLUSIVE BRANDS OWNED & EXCLUSIVE BRANDS NET SALES SHARE OF TOTAL SALES* contribution despite shift to (m€) E-Commerce is a huge success 343 343 › Roll-out of #INNERBEAUTY and Dr. Sus
Slide 14: Closer Look: 2019/20 Financials
Closer Look: 02 2019/20 Financials 14 DOUGLAS
Slide 15: Q2 FY2019/20 Financials at a Glance
Q2 FY2019/20 FINANCIALS AT A GLANCE SECOND QUARTER IMPACTED BY COVID-19 NET SALES LFL-GROWTH A D J U S T E D 1/ R E P O R T E D E B I T D A (m€) (m€) Total LfL Growth: 39 728 656 31 23 Store LfL Growth: Q2 2018/19 Q2 2019/20 (1) Q2 2018/19 Q2 2019/20 Online LfL Growth: Q2 2018/19 Q2 2019/20 Margins
Slide 16: COVID-19 with Impact Across Regions in Q2
COVID-19 WITH IMPACT ACROSS REGIONS IN Q2 E-COMMERCE STRENGTH WITH COMPENSATING POSITIVE EFFECT GROUP GERMANY FRANCE (ONLINE) (m€) (m€) (m€) LfL Net Sales LfL LfL LfL 167 272 263 155 125 132 s Q2 2018/19 Q2 2019/20 Q2 2018/19 Q2 2019/20 Q2 2018/19 Q2 2019/20 GROUP SOUTH-WESTERN EASTERN EUROPE (STORE
Slide 17: Segmental Adjusted EBITDA Development
SEGMENTAL ADJUSTED EBITDA DEVELOPMENT Q2 FY2019/20 › All EBITDA figures stated pre IFRS161 ADJUSTED EBITDA 2 › Negative impact on Sales amplified by GROUP GERMANY3 FRANCE non-variable cost items › Countermeasures and tight cost (m€) (m€) (m€) discipline with mitigating effect › Germany: Includes non
Slide 18: EBITDA: Loss in Gross Profit Partially Mitigated by Countermeasures
EBITDA: LOSS IN GROSS PROFIT PARTIALLY MITIGATED BY COUNTERMEASURES Lower indirect and discretionary spend as Lower gross profit due to EBITDA MAR 2019/20 VS. PY store closures, partly Waived and well as lower marketing income (m€) compensated by higher reduced rent E-Commerce gross profit payments
Slide 19: €100M Sales Decline Reduced to Only €9M Cash Impact
€100M SALES DECLINE SUCCESSFULLY REDUCED TO ONLY €9M CASH IMPACT THROUGH COUNTERMEASURES MARCH 2020 COUNTERMEASURES • Short-term labour (m€) • Waived/reduced rent payments • Lower indirect + discretionary spend • Lower marketing income Reduced and deferred ~50% gross ~€15m of COVID- payments incl. t
Slide 20: Q2 Free Cash Flow Development
Q2 FREE CASH FLOW DEVELOPMENT NEGATIVE IN LINE WITH SEASONAL PATTERNS BUT ABOVE PREVIOUS YEAR ADJUSTED FCF DEVELOPMENT (m€) FREE CASH FLOW BRIDGE Q2 2019/20 (179) (152) (m€) (229) Q2 2017/18 Q2 2018/19 Q2 2019/20 0 23 (24) (75) (4) (152) (175) (175) (72) (23) Adj. EBITDA CAPEX1 Working Taxes Others2
Slide 21: Liquidity Maximized Through Countermeasures
LIQUIDITY MAXIMIZED THROUGH COUNTERMEASURES CASH BALANCE (m€) › Effect from lower gross profit, compensated by › Capex reduction › Savings in personnel expenses (incl. government 309 support) and shift of social securities/taxes 164 (RCF) › Waived/reduced rent payments 130 › Longer payables terms ne
Slide 22: Evolution of Capital Structure and Key Leverage Metrics
EVOLUTION OF CAPITAL STRUCTURE AND KEY LEVERAGE METRICS CAPITAL STRUCTURE TOTAL NET LEVERAGE 31 March 2020 6.0x 6.3x m€ x Adj. EBITDA Maturity Pricing 5.5x Cash and Equivalents 309 E+3.75% RCF (€200m Volume) 164 Feb 22 (0% floor) Mar 2018 Mar 2019 Mar 2020 E+3.50% Term Loan B (B2/CCC+) 1,370 Aug 22
Slide 23: Outlook Beyond Q2 2019/20
OUTLOOK BEYOND Q2 2019/20 KEY DEVELOPMENTS POST 31 MAR TIMING OF STORE RE-OPENING › Lockdown continued into April and May, hence also impacting Q3 performance › Countermeasures in full execution mode › E-Commerce accelerating further Week of Week of 27 April › Re-opening of stores in core countries
Slide 24: Pole-Positioned for Re-opening with Dedicated Campaign
POLE-POSITIONED FOR RE-OPENING WITH DEDICATED CAMPAIGN FOR STAYING HOME. FOR YOUR LOYALTY. GOOD TO HAVE YOU BACK! DEAR DOUGLAS TEAM FOR YOUR SOLIDARITY #STRONGERTOGETHER 24
Slide 25: Our First Half 2019/20 in Summary
OUR FIRST HALF 2019/20 IN SUMMARY Head-start into the fiscal year with excellent Q1 Strong momentum continued in January and February COVID-19 lockdown in March with negative impact on Q2 and H1 Liquidity and business continuity secured Focused execution of countermeasures Catalyst for E-Commerce wi
Slide 26: Upcoming IR Event
Upcoming IR Event 13 August 2020: 9M Results FY2019/20 26
Slide 27: Appendix
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Slide 28: Deep Dive P&L, Cash Flow and Balance Sheet Effects
DEEP DIVE P&L, CASH FLOW AND BALANCE SHEET EFFECTS IMPACT ON FINANCIAL STATEMENTS, PARTLY WITH TIMING EFFECT ITEM P&L CASH FLOW BALANCE SHEET Lower store sales • Lower gross profit • Lower cash balance VOLUME (partly compensated by higher e- • Lower marketing income • Lower operating cash flow • Low
Slide 29: Key 6M FY2019/20 Financials at a Glance
KEY 6M FY2019/20 FINANCIALS AT A GLANCE NET SALES LFL-GROWTH A D J U S T E D 1/ R E P O R T E D E B I T D A (bn€) (m€) 1.95 1.95 Total LfL Growth: 225 218 206 190 Store LfL Growth: 6M 6M 6M 6M 6M 2018/19 6M 2019/20 Online LfL Growth: 2018/19 2019/20 2018/19 2019/20 Margins Adjusted EBITDA Reported E
Slide 30: H1: Q1 Momentum Reduced by COVID-19 in Q2
H1: Q1 MOMENTUM REDUCED BY COVID-19 IN Q2 E-COMMERCE STRENGTH WITH COMPENSATING POSITIVE EFFECT GROUP GERMANY FRANCE (E-COMMERCE) (m€) (m€) (m€) LfL Net Sales LfL LfL LfL 415 717 744 456 441 327 s 6M 2018/19 6M 2019/20 6M 2018/19 6M 2019/20 6M 2018/19 6M 2019/20 GROUP SOUTH-WESTERN EASTERN EUROPE (S
Slide 31: Segmental Adjusted EBITDA Development
SEGMENTAL ADJUSTED EBITDA DEVELOPMENT 6M FY2019/20 › All EBITDA figures stated pre IFRS161 ADJUSTED EBITDA 2 › Negative impact on Sales amplified by GROUP GERMANY3 FRANCE non-variable cost items › Strong Q1 tailwind, countermeasures, (m€) (m€) (m€) pricing excellence and tight cost discipline with m
Slide 32: LTM Key Financials
LTM KEY FINANCIALS MARCH 2019/20 KEY FINANCIALS (m€) LTM LTM Delta Mar 2019 Mar 2020 Net Sales 3,366 3.454 2.6% LfL Growth 1.5% Adjusted EBITDA 365 344 (5.6)% Margin (%) 10.8% 10.0% (0.9)%pts CAPEX1 143 103 (27.9)% Adj. EBITDA - CAPEX 222 242 8.7% Cash Conversion (%) 60.9% 70.2% 9.2%pts 1 Accounting
Slide 33: Adjustments to EBITDA
ADJUSTMENTS TO EBITDA Q2 & 6M FY2019/20 & LTM MARCH 2020 › Consulting fees: Internal strategic EBITDA ADJUSTMENTS projects (e.g. costs to be expected as part of cost-savings program going (m€) LTM LTM Q2 Q2 6M 6M forward) 2018/19 2019/20 2018/19 2019/20 Mar Mar 2019 2020 › Restructuring costs: Insig
Slide 34: Reported EBITDA
REPORTED EBITDA Q2 & 6M FY2019/20 REPORTED EBITDA (m€) Q2 Q2 6M 6M 2018/19 2019/20 2018/19 2019/20 Germany1 7 (6) 39 37 France 14 13 79 78 South-Western Europe 5 (10) 58 46 Eastern Europe 5 2 30 29 Group 31 (1) 206 190 34 1 Incl. consolidation effects
Slide 35: Deep Dive LfL Net Sales Growth
DEEP DIVE LFL NET SALES GROWTH QUARTERLY DEVELOPMENT LFL NET SALES GROWTH DEVELOPMENT Q2 Q3 Q4 Q1 Q2 LTM Q2 2018/19 2018/19 2018/19 2019/20 2019/20 2019/20 Germany (0.9)% 5.5% 0.6% 6.6% (3.7)% 5.5% France (1.8)% (1.7)% 4.1% 2.8% (15.8)% (1.7)% South-Western Europe (1.3)% 0.0% (0.2)% 4.7% (15.8)% (2.
Slide 36: Strong Free Cash Flow Generation Driven by Special Effects
STRONG FREE CASH FLOW GENERATION DRIVEN BY SPECIAL EFFECTS RELATING TO COUNTERMEASURES ADJUSTED FCF DEVELOPMENT (m€) 165 FREE CASH FLOW BRIDGE 6M FY2019/20 113 98 (m€) 6M 2017/18 6M 2018/19 6M 2019/20 (56) (11) 22 (8) (29) 218 165 136 136 0 Adj. EBITDA CAPEX1 Working Taxes Others2 Adj. Free EBITDA F
Slide 37: Cash Flow Statement
CASH FLOW STATEMENT Q2 & 6M FY2018/19 › Strong development of CASH FLOW STATEMENT Cash Flow from Operating (m€) Q2 Q2 6M 6M activities 2018/19 2019/20 2018/19 2019/20 › Cash flow from Investing Net Cash Flow from Operating activities (155) (151) 150 192 activities at a lower level, as large scale ac
Slide 38: Net Working Capital
NET WORKING CAPITAL Q2 2019/20 › Lower trade account receivables NET WORKING CAPITAL in connection with timing effects (m€) › Inventories slightly higher due to closure of majority of stores 293 289 287 284 204 but benefiting from countermeasures with suppliers Payables: Lower due to longer NWC as %
Slide 39: Premium Store Network Footprint Across Europe
PREMIUM STORE NETWORK FOOTPRINT ACROSS EUROPE 2,438 2,406 › Decrease in # of stores 139 138 driven by portfolio realignment in particular in 2,299 2,268 SWE › Size of footprint will be monitored on an ongoing Q2 Q2 basis subject to level of 2018/19 2019/20 performance following re- Own stores Franch