4Q18 4Q18 FINANCIA FINANCIAL L RE RESULT SULTS S PR PRESENTA ESENTATION TION WARSAW 11 th April 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 the Company, published in of 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‐looking 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. 4Q18 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
Growth on-line and off-line 1,765 + 7.2 % STORES LFL + 14.5 % 23 GROUP REVENUES COUNTRIES +97% + 9.1 % E-COMMERCE m2 G L O B A L A S P I R A T I O N S 4
1,765 stores in 23 countries No. of 31.12.2018 YoY 33 @ stores 336@ 19 @ LPP GROUP 1,765 + 22 23 @ 8 Reserved 464 - 4 1 @ 959 @ 19 @ Cropp 373 - 8 82 @ 93 56@ 6 House 332 - 1 25 @ Mohito 296 + 2 41@ 1 24 14 Sinsay 272 + 39 18 Outlets 28 - 6 xx xx Numbe ber of of stores @ Int nter ernet stores 2 1 1 2 1 G L O B A L A S P I R A T I O N S 5
Further LFL and e-commerce growth LF LFL L DYN DYNAMICS ON-LI ON LINE SA SALE LES (local cur currencies) (PLN PLN m) 252.2 +72% YoY 15.2% 14.6% +101% 12.9% YoY +144% 146.4 9.2% YoY +28% 4.6% YoY 6.2% 5.1% +104% 73.0 3.6% 2.3% YoY 30.0 23.4 11.5 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 LFL FLs s were re positi ositive in Octob ctober an and Nov ovember r 2018. . Reser served, Cro Cropp, Hou ouse se an and Si Sinsa say sho showed posi ositiv ive LFL FLs in 4Q18. • In 4Q18 LFL FLs were re posit ositive ive in most ost cou countrie ries (th the high ghest in Lith thuania ia, Rom oman ania ia, Russia ssia an and Ukra raine), desp spit ite th the high gh base ase. • High gh dou ouble le-dig igit it e-com commerc rce gr grow owth th due to to deve velop lopment of of e-sto stores ou outsid tside of of Pola oland, mar arketin ing ou outlay tlays an and ch chan angin ing g • custo cu stomer hab abits in Pola oland (store (stores par artia tially lly close closed on on Sun Sundays). On-li On line sale sales am amou ounte ted to to 12.3% of of re reve venues fro from Pola oland an and 10.6% gr grou oup re reve venues in 4Q18. • 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 4Q 4Q18 FL FLOORSPACE (PLN LN m) (by brands) Reserved + 6% YoY 1,012 ths m2 4Q17 4Q18 YoY + 4% YoY Cropp 334 LPP GROUP 1,000.6 1 091.3 9.1% + 11% YoY Reserved 562.3 616.7 9.7% House 290 Cropp 127.2 134.0 5.3% -8% YoY Mohito 214 House 110.6 116.2 5.1% + 28% YoY Sinsay 236 Mohito 103.8 109.4 5.4% E-commerce 252 + 72% YoY Sinsay 84.6 103.0 21.8% Outlets 12.1 12.0 -0.8% Other 36 In n 4Q 4Q18 Res Reserved and nd Cr Cropp ge generated mo more revenues fr from abroad th than fr from Pol oland. • The fa The 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 in n co coll llectio ion improvements). ). Res Reserved maintained hi high revenue dyn ynamics th thanks to to ne new co coll llectio ions th that t wer ere acc ccepted by y cu customers as s wel ell as s • consistent flo co floorspace dev evelopment t (entry to to Kaz Kazakhstan). G L O B A L A S P I R A T I O N S 7
Floorspace growth in all regions REV REVENUES BY BY REG REGIONS 4Q 4Q18 FL FLOORSPACE (PLN LN m) m) (by reg egions) ths m2 4Q17 4Q18 YoY Poland 1,271 + 5% YoY LPP GROUP 1,000.6 1 091.3 9.1% Europe + 20% YoY 616 Poland 514.0 529.5 3.0% Europe 232.8 279.4 20.0% CIS 481 + 15% YoY CIS 247.3 275.4 11.4% ME 5 - 21% YoY ME 6.6 7.1 7.2% Re Revenue gr growth th in Pol oland res esults fro from flo floorspace op opti timizatio ion and nd th the im impact t of of th the e partia ial ban n on on Sun unday tr tradin ing. . • Dynamic revenue gro growth in n Eur Europe in n 4Q 4Q18 due ue to to str strong gro growth in n th the CE CEE and nd SEE EE regions. Hi High sa sales dyn ynamics cs in all ll CI CIS co countries in 4Q 4Q18. Sta tart t of of sa sales in n Kaz Kazakhstan. • Fal Fall in n ME in 4Q 4Q18 – sa sales to to Isra srael prio ior to to stor store op opening to took pla lace in n 3Q 3Q18. • Among co countries, th the hi highest t no nominal YoY oY revenue gr growth was rec ecorded in n Pola oland, Ru Russia and Hu Hungary. • G L O B A L A S P I R A T I O N S 8
Revenues continue to grow GROUP REV REVENUES REVENUES/ REV / M2 (PLN LN m) m) 2,500 25% 17.7% 16.0% 13.5% 21.8% 15.9% 16.0% 20.2% 12.8% 10.4% PLN (monthly) 4Q17 4Q18 YoY 2,000 20% LPP GROUP retail 731 676 -7.6% 1,500 15% Poland 789 735 -6.8% 1,000 10% Europe 732 652 -11.0% 500 5% CIS 613 583 -4.9% 0 0% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 LPP GROUP 741 751 1.3% Retail sales (brands) E-commerce Other (incl. outlets) Revenue growth Gr Group revenues gre grew 10.4 10.4% YoY oY in n 4Q 4Q18 due ue to to hi higher flo floorspace, pos osit itiv ive LFL LFLs and nd hi high e-commerce dyn ynamics. • Hi Higher YoY sa sales/ m2 m2 in n 4Q 4Q18, due ue to to gro growth in n e-commerce. Lo Lower YoY oY ret etail sa sales/ m2 m2 due ue to to op opening of of • increasingly la large stor stores. . The The hi highest t dou ouble-dig igit t ret etail sa sales/ m2 m2 gro growths were rec ecorded in n 4Q 4Q18 in Li Lith thuania, Lat Latvia, Ro Romania, Serbia ia. • G L O B A L A S P I R A T I O N S 9
Gross profit margin expansion QUARTE QU TERLY Y GROSS PR PROFIT IT MAR ARGIN IN AVERAGE QUARTERLY US$/PLN FX LEV EVELS IMP MPORTANT T FOR 4.1 4.1 SETT ETTIN ING SS19 9 PR PRIC ICES 59.7% 59.9% 58.0% 56.9% 3.8 3.8 3.8 50.8% 3.7 3.6 51.0% 3.6 3.6 49.0% 45.6% 45.1% 3.4 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 YoY oY gr gross ma margin inc ncrease in 4Q 4Q18 as s a res esult of of: : goo good acc cceptance of of th the e Aut utumn/Winter co collectio ion by y cu cust stomers • (in includin ing Res Reserved and Ho House). The he gro gross ma margin was als lso fa favourably influenced by y th the inventory ma management t pol olic icy, incl cludin ing th the sy syst stem all llocating • goods ind go ndividually on on a per er stor store basis is. In n 4Q 4Q18 th the va value of of inventory writ write-offs amounted to to on only PLN LN 3m 3m, i.e. it t was irrelevant t to to th the e gro gross ma margin lev level. • G L O B A L A S P I R A T I O N S 10
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