2Q19 2Q19 FINANCIAL FINANCIAL RE RESULT SULTS S PR PRESENTA ESENTATION TION WARSAW 12 TH SEPTEMBER 2019
Disclaimer This is presentatio ion (t (the “Presentation”) was prepared by by LPP SA SA (t (the “Company”) wit ith a due care. Stil ill, it it may contain in certain inconsis istencie ies or or omis issions. The Presentation does not contain in a complete or or thorough financial analysis is of of the Company and does not not present it its standing or or prospect cts in in a comprehensive or or in in-depth manner. Therefore, anyone who in intends to to make an an investment decis ision wit ith respect ct to to the Company should rely on on the information dis isclosed in in the offic icial reports of of the Company, published in in accordance wit ith the laws applic icable to to the Company. This is Presentatio ion was prepared for informatio ion purp urposes on only and nd doe oes not not co constit itute an an off offer to to buy uy or or to to sel sell any fin financial instruments ts. The Presentatio ion may contain in 'forward-lookin ing statements'. However, such statements cannot be be treated as as assurances or or projections of of any exp xpected future result lts of of the Company. Any statements concernin ing expectations of of future financial results cannot be be understood as as guarantees that any such results wil ill actually be be achieved in in future. The expectatio ions of of the Management Board are based on on their ir current knowledge and depend on on many factors due to to whic ich the actual results achieved by by the Company may dif iffer materially from the results presented in in this is document. Many of of those factors are bey eyond th the awareness and co contr trol of of th the Co Company or or th the Company’s abil ility to to for foresee th them. Neit ither the Company, nor it its dir irectors, offic icers, advis isors, nor representativ ives of of any such persons are lia iable on on account of of any reason resulting from any use of of this is Presentatio ion. Addit itionally, no no information contained in in this is Presentation constit itutes any representation or or warranty of of the Company, it its offic icers or or dir irectors, advis isors or or representatives of of any of of the above persons. The Presentatio ion and the forward-looking statements speak only as as at at the date of of this is Presentation. These may not not be be indic icativ ive of of results or or developments in in future periods. The Company does not undertake any obligatio ion to to revie iew, to to confir irm or or to to release public icly any revis isions to to any forward-looking st statements to to reflect events that occur occur or or circumstances th ci that aris ise after th the date te of of th this is Presentation. G L O B A L A S P I R A T I O N S 2
1. 2Q19 financial results 2. Key corporate events 3. 2019 outlook G L O B A L A S P I R A T I O N S 3
On On-line and off-line growth continues 1,752 + 5.7 % STORES LFL + 11.3 % 24 GROUP REVENUES COUNTRIES +46% + 9.7 % E-COMMERCE m2 G L O B A L A S P I R A T I O N S 4
1,752 52 stores in 24 countries No. of 30.06.2019 YoY 33 @ stores 321 @ 21 @ LPP GROUP 1,752 - 4 24 @ 7 Reserved 453 - 10 1 @ 923 @ 19 @ Cropp 374 - 8 88 @ 96 53@ 6 House 326 - 9 26 @ Mohito 289 - 5 51 @ 2 24 @ 21 Sinsay 288 + 35 5 24 Outlets 22 - 7 xx xx Numbe ber of of stores @ Ow Own int nter ernet t stores 2 1 1 2 1 G L O B A L A S P I R A T I O N S 5
High e-commerce growths LFL LF L DYN DYNAMICS ON-LI ON LINE SA SALE LES (local cur currencies) (PLN PLN m) 15.2% 14.6% 258.1 252.2 12.9% 11.4% 192.2 9.2% 178.5 150.5 146.4 130.9 6.2% 84.8 3.6% 74.8 2.3% 1.3% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 LFLs were pos LFLs osit itiv ive in n Ap April il an and Ju June 2019. Cro ropp, Ho House an and Sins nsay rec recorded pos osit itiv ive LFLs LFLs in n 2Q19. • In n 2Q19 LFLs LFLs were pos osit itiv ive in n ha half of of co countrie ies present (the hi highest in n Li Lith thuania ia, th the UK UK, , Ge Germany an and Uk Ukrain ine). • Dou ouble-dig igit it e-commerce gr growth (+45% % YoY YoY) du due to to de development of of e-stores out outsid ide of of Po Pola land, int nternet marketin ing ou outlays • an and ch changin ing cu customer ha habit its in n Po Pola land (stores par artia ially cl closed on on Sun undays). On On-lin ine sa sale les am amounted to to 13.0 .0% of of re revenues fro rom Po Pola land an and 11.7% % gr group re revenues in n 2Q19. In n 2Q19 Po Pola land co constit ituted • 54% of of e-commerce re revenues. G L O B A L A S P I R A T I O N S 6
Floorspace growth in all brands REV REVENUES BY BY BR BRANDS 2Q1 Q19 FL FLOORSPACE (PLN LN m) (by brands) Reserved 918 0% YoY ths m2 2Q18 2Q19 YoY + 2% YoY Cropp 293 LPP GROUP 1,034.2 1,134.3 9.7% + 15% YoY Reserved 582.2 631.6 8.5% House 256 Cropp 130.1 141.4 8.7% -2% YoY Mohito 207 House 113.0 122.2 8.2% + 27% YoY Sinsay 258 Mohito 105.5 108.8 3.1% + 45% YoY E-commerce 258 Sinsay 92.8 120.0 29.3% Outlets 10.6 10.2 -3.8% Other 23 In n 2Q19 Res Reserved, , Cr Cropp and nd Moh ohito ge generated mo more revenues fr from abroad th than fro from Pola oland. • The The fa fastest t sa sales gro growth was rec ecorded by y Sin insay (su successful co collections and dyn ynamic c ne network dev evelopment) and Ho House • brand (co contin inuation of of YoY oY co coll llect ction improvements ts). Res Reserved revenues were sta stable YoY oY. Des espit ite un unfavourable weather in n May, revenues wer ere pos osit itiv ively affected by • consistent flo co floorspace dev evelopment t (new ma markets ts: Kaz Kazakhstan, Slo lovenia, B& B&H and nd Isra srael). G L O B A L A S P I R A T I O N S 7
Foreign revenues exceed Polish ones REV REVENUES BY BY REG REGIONS 2Q 2Q19 FL FLOORSPACE (PLN LN m) m) (by reg egions) Poland - 1% YoY 1,083 ths m2 2Q18 2Q19 YoY LPP GROUP 1,034.2 1,134.3 9.7% Europe 607 + 21% YoY Poland 518.0 521.2 0.6% CIS 517 + 15% YoY Europe 254.9 327.1 28.3% CIS 254.7 278.9 9.5% + 59% YoY ME 7 ME 6.6 7.1 7.2% In 2Q19, first time in LPP’s history, foreign revenues exceeded domestic ones . • European revenues wer Eur ere pos osit itively aff ffected by y flo floorspace dev evelopment, t, esp especially in n th the SEE region, and nd stro strong • rec eceptio ion of of th the e co coll llectio ion by y clie clients ts fr from Wes estern Eur Europe. . High sa Hi sales dyn ynamics cs in all ll CI CIS co countries in 2Q19 and nd ne new ma market t impact (Kazakhstan). ). Gro Growth in ME E in 2Q19 due ue to to • dev evelopment t in n Isra srael. Among co countries, th the hi highest t no nominal YoY oY revenue gr growth was rec ecorded in n Ru Russia and nd Ro Romania. • G L O B A L A S P I R A T I O N S 8
Group revenues continue to grow GROUP REV REVENUES REVENUES/ REV / M2 (PLN LN m) m) 2,500 25% 13.5% 21.8% 15.9% 16.0% 20.2% 12.8% 10.4% 15.7% 8.0% PLN (monthly) 2Q18 2Q19 YoY 2,000 20% LPP GROUP retail 631 591 -6,3% 1,500 15% Poland 656 608 -7,3% 1,000 10% Europe 612 553 -9,6% 500 5% CIS 599 603 0,6% 0 0% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 LPP GROUP 674 667 -1,0% Retail sales (brands) E-commerce Other (incl. outlets) Revenue growth Gr Group revenues gre grew 8.0% % YoY oY in 2Q19 due ue to to hi higher flo floorspace, stro strong e-commerce dyn ynamics and nd pos osit itiv ive LFL LFLs. • Sta tabil ilisatio ion in YoY oY sa sales/ m2 m2 in n 2Q19 due ue to to e-commerce dev evelopment. t. Lo Lower YoY oY ret etail sa sales/ m2 m2 due ue to to op opening of of • increasingly la large stor stores. The hi The highest t dou ouble-dig igit t ret etail sa sales/ m2 m2 gro growths were rec ecorded in n 2Q19 in th the e UK UK and Ger Germany. • G L O B A L A S P I R A T I O N S 9
Gross profit margin stabilisation QU QUARTE TERLY Y GROSS PR PROFIT IT MAR ARGIN IN AV AVERAGE QU QUARTERLY US$ S$/P /PLN STA TABLE E YOY FX FOR 4.1 AW 2019 2019 PU PURCHASES 65% 59.9% 59.7% 59.3% 60% 58.0% 56.9% 3.8 3.8 3.8 3.8 3.8 55% 3.7 3.6 3.6 50% 51.0% 3.6 49.0% 45% 43.4% 45.1% 3.4 40% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Sta table YoY oY gro gross ma margin in 2Q19 due ue to to inventory management t pol olic icy – ma maximisation of of gro gross profit ma margin within th the • regular se season, but ut stro stronger off off-season sel sell-offs. . Go Good rec eceptio ion of of Spring/ Summer 201 2019 co collectio ions in majority of of brands. As s a res esult, low lower YoY oY inventory writ ite-offs. • The The Aut utumn part t of of Aut utumn/ Winter 201 2019 co coll llect ction was purc urchased at t a sta stable YoY oY US US$/PLN. • G L O B A L A S P I R A T I O N S 10
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