Renewing Matas Annual Report 2019/20, corona impact & strategy update C P H R o a d s h o w 2 8 M a y 2 0 2 0
Sales dropped post lockdown but recovered in spite of ~35 store closures COVID-19 effects: Overall sales Index: Weekly sales compared to same period last year 1 Q4 2019/20 Q1 2020/21: 1 April – 17 May Index: ~99 Index: ~107 1 Jan – 10 Mar 11 Mar 11 – 31 March 17 May Index 2: ~105 Index: ~75 ~5 stores closed Remaining stores ~20 stores reopened reopened ~30 stores Lock closes down 105 Index 100 11 12 13 14 15 16 17 18 19 Week ~DKK +30 m ~DKK -50 m ~DKK +30 m Results and strategy update FY 2019/20 | 2 1. Measured as 7 day moving average, total sales including Firtal. 2. Corrected for leap day.
COVID-19 accelerated the channel shift, but stores are regaining share COVID-19 effects: Channel shift per week & pick-up in store Channel shift: Online vs. offline share of sales and share of online orders delivered to physical stores Q4 2019/20 Q1 2020/21: 1 April – 17 May 11 Mar 17% 22% 43% 57% 83% 78% Online Matas’ stores Store pickup 1-10 11 12 13 14 15 16 17 18 19 20 Week Lockdown Results and strategy update FY 2019/20 | 3
matas.dk sales reached unseen index levels following the lock down COVID-19 effects: matas.dk sales and Net Promotor Score development Q4 2019/20 Q1 2020/21: 1 April – 17 May 67.5 70.4 Included 4 days with Index: ~149 Index: ~302 index +500 and 1 matas.dk matas.dk super day with index NPS NPS +1,000 (Net Promotor Score) (Net Promotor Score) 11 Mar Lockdown Index 100 1-10 11 12 13 14 15 16 17 18 19 20 Week Results and strategy update FY 2019/20 | 4
Immediate in-store revenue loss is moderated – and offset by online gain COVID-19 effects: Store sales March 2019/20 April 2020/21 Index by store-type Index by store-type (compared to same period 2018/19) (compared to same period 2019/20) 100 100 Mall Mall Rest Total Online 1 Total Mall Mall Rest Total Online Total open Closed Physical open Closed Physical Stores Stores 45 26 196 268 268 40 31 196 263 263 Number of stores Results and strategy update FY 2019/20 | 5 Note: Index numbers include revenue from already closed stores; Store numbers only include fully-owned stores. 1) Including matas.dk and Firtal
Health & Wellbeing is outperforming under COVID-19 COVID-19 effects: Category mix March April Index by category Index by category Mass Beauty Mass Beauty High-End Beauty High-End Beauty Health & Wellbeing Health & Wellbeing Total Total 50 100 50 100 Results and strategy update FY 2019/20 | 6
Renewing Matas Phase 1: 2017/18 to 2019/20 Clear strategic progress and results Phase 2: 2020/21 to 2022/23 Accelerating the transformation
Renewing Matas: clear strategic progress and results of phase 1 Phase 1: 2017/18 to 2019/20 Improved brand ranking, incl. young shoppers ✓ Live our purpose 1 Higher satisfaction score for Club Matas members ✓ Beauty & Wellbeing for Life 19% increase in matas.dk satisfaction in Q4 2019/20 ✓ Online share of revenue 19.3% in Q4 2019/20 ✓ Win online 2 Reached #1 online in beauty & wellbeing ✓ From top 3 to undisputed market leader Reached #5 position vs all webshops in DK ✓ Store footprint down to 268 – all profitable ✓ Reignite store growth 3 66 store upgrades since 2016/17 ✓ Renew & consolidate store footprint 33% of turnover from upgrades stores ✓ 34% growth in green segment (vital) since 2017/18 ✓ Open new growth paths 4 Added digital verticals ✓ New revenue streams Added #1 Danish make-up to own brand portfolio ✓ DKK 60 m cost savings reinvested in growth ✓ Change how we work 5 New and dedicated ecommerce logistics facility ✓ Cost savings & efficiency gains Culture, leadership and organisation ✓ Results and strategy update FY 2019/20 | 8
Outlook: Tangible risks but also new opportunities COVID-19 effects: Risks and opportunities Risks Opportunities Shopping locally – staying at home Recession Online competition Digital growth Second wave pandemic Health & Personal Care Results and strategy update FY 2019/20 | 9
Renewing Matas phase 2: Accelerating the transformation Phase 2: 2020/21 to 2022/23 Live our purpose Live our purpose 1 1 Beauty & Wellbeing for Life Beauty & Wellbeing for Life Win online Win online 2 2 From top 3 to undisputed market leader Increase the lead and extend the reach Reignite store growth Consolidate & refresh stores 3 3 Renew & consolidate store footprint Adapt the network & shopping experience New growth Open new growth paths 4 4 New revenue streams Build the next destination categories Change how we work Change how we work 5 5 Cost savings & efficiency gains Enabling and funding the transformation Results and strategy update FY 2019/20 | 10
1 Live our Brand picture purpose Results and strategy update FY 2019/20 | 11
Beauty & Wellbeing for Life Phase 1: our focus Results and strategy update FY 2019/20 | 12
Beauty & Wellbeing for Life Phase 1: what we have achieved # 2 4,4 99 67.5 strongest brand Trustpilot Brand strength matas.dk NPS in Denmark Score (Brand Asset Valuator) (Net Promotor Score) (YouGov BrandIndex) (out of 5) # 5 14% 2nd 63.1 Most heard increase in highest increase in M-NPS popularity score as most about brand brand vitality talked about brand (Matas Net Promotor Score) (YouGov Buzz ages 18-34) (Brand Asset Valuator) (YouGov WoM ages 18-34) Results and strategy update FY 2019/20 | 13
Grafik Dorte 2 mandag Win online Results and strategy update FY 2019/20 | 14
Win online: From top 3 player in a fragmented market to leader in 2 years Phase 1: Our focus & results Our focus Our results Online advisors, live shopping & skintest ✓ Subscription services ✓ Improving the online shopping experience Lift in usability ✓ Mobile optimisation ✓ Omnichannel experience ✓ New webshop logistics facility in Humlebæk ✓ Increased share of orders handled in one day ✓ Faster delivery and increased capacity Black Friday peak handled in 3 days ✓ Webshop peaks not affecting store logistics ✓ SoMe driving inspiration and engagement ✓ Data driven digital marketing across channels ✓ More personalised digital marketing & media Club Matas app with personalised digital offerings ✓ 1:1 video advisors ✓ Firtal: Market leader in the green segment ✓ DFS: New beauty channels and professional hair care ✓ New low cost price-led channels Niche: Mens care ✓ Strong price position ✓ Results and strategy update FY 2019/20 | 15
Strong online growth continued in 2019/20 Deep dive online growth: What we have achieved in phase 1 Quarterly online share of turnover (%) Growth on matas.dk Online revenue of total Q4 19/20 19.3 8.1 11.2 Q4 2019/20: 85% (YoY) Q4 2019/20: 19.3% Q3 19/20 16.2 4.8 11.4 2019/20: 76% (YoY) 2019/20: 14.7% Q2 19/20 5.5 6.6 12.0 2018/19: 54% (YoY) 2018/19: 7.1% Q1 19/20 10.9 5.0 5.9 Q4 18/19 11.2 5.3 6.0 Q3 18/19 1.9 6.7 8.5 Q2 18/19 4.6 Annual online share of turnover (%) 14.7 Q1 18/19 3.7 matas.dk Q4 17/18 4.1 Firtal Q3 17/18 4.5 Q2 17/18 2.8 9.0 Q1 17/18 2.5 Q4 16/17 3.3 7.1 Q3 16/17 3.2 Q2 16/17 2.1 Q1 16/17 2.4 5.3 Q4 15/16 2.5 5.7 Q3 15/16 2.6 3.5 2.8 2.2 1.8 Firtal Q2 15/16 1.7 matas.dk Q1 15/16 1.7 2015/16 2016/17 2017/18 2018/19 2019/20 Results and strategy update FY 2019/20 | 16 * Includes revenue from Firtal for the period 13 November 2018 to 31 December 2019, including revenue from Din Frisør Shop from XX October 2019, and revenue from Kosmolet A/S from 11 June to 31 December 2019.
Firtal delivers +50% growth YoY in the 5th quarter after acquisition Deep dive: Firtal performance and strategic rationale Figure: Sales per quarter (DKK m) Performance exceeds management case +52% 66 56 Synergies in line with expectations 45 43 44 Firtal Group adds digital verticals incl. DFS to Matas Group Q4 2018/19 Q1 2019/20 Q2 2019/20 Q3 2019/20 Q4 2019/20 Results and strategy update FY 2019/20 | 17
Matas aims to be channel agnostic at the end of the strategy period Deep dive profitability: Scalability on matas.dk Ambition 2019/20 Actual and expected development 2022/23 Increasing due to channel shift and market Revenue DKK 330 m Higher share gains Improving as larger share of online is normal Gross margin Higher sales (full price) Positive scale effects on all major cost ratios: Costs Lower wages, marketing and logistics EBITDA margin ~10%* Positive development ~14%** Before special items Results and strategy update FY 2019/20 | 18 * Profitability up from 2018/19. ** Before effect of IFRS 16.
Club Matas is vital for the online growth journey Deep dive customer excellence: Club Matas to accelerate and support growth across Matas’ channels 1.65 m members ✓ +1.4 m active members ✓ Club Matas in numbers Around 70% of the female ✓ >780,000 population between 18-65 years End 2019/20 NPS increased 8% ✓ active 380,000 omnichannel customers ✓ app users +100,000 new online customers ✓ Omnichannel in numbers 19% of the female population ✓ between 18-65 years shopped End 2019/20 at a Matas store and at matas.dk in 2019/20 Results and strategy update FY 2019/20 | 19
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