investor & analyst presentation · investor & analyst presentation h1 2019 –august 2019 |...

Investor & Analyst PresentationSemi-annual report, August 14th, 2019

Dr. Cornelius Patt, CEO

Investor & Analyst Presentation H1 2019 – August 2019 | page 2

This document includes supplemental financial measures that are or may be non-GAAP financial measures. These supplemental

financial measures should not be viewed in isolation as alternatives to measures of zooplus’ financial condition, results of

operations or cash flows as presented in accordance with IFRS in its Consolidated Financial Statements. Other companies that

report or describe similarly titled financial measures may calculate them differently.

This document contains statements related to our future business and financial performance and future events or developments

involving zooplus that may constitute forward-looking statements. We may also make forward-looking statements in other

reports, in presentations, in material delivered to stockholders and in press releases. In addition, our representatives may from

time to time make oral forward-looking statements. Such statements are based on the current expectations and certain

assumptions of zooplus’ management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of

which are beyond zooplus’ control, affect zooplus’ operations, performance, business strategy and results and could cause the

actual results, performance or achievements of zooplus to be materially different from any future results, performance or

achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical

trends. Further information about risks and uncertainties affecting zooplus is included throughout our most recent annual and

interim reports, which are available on the zooplus website, www.zooplus.de. Should one or more of these risks or uncertainties

materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of zooplus may vary

materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned,

believed, sought, estimated or projected. zooplus neither intends, nor assumes any obligation, to update or revise these forward-

looking statements in light of developments which differ from those anticipated.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and

percentages may not precisely reflect the absolute figures.

Safe Harbor Statement


zooplus continues on its growth path

» Sales increased by 13% to € 727 m in H1 2019

» Accelerated sales growth from 13% in Q1 2019 to 14% in Q2 2019

» Private label sales for food and cat litter growing faster in H1 2019 with 29% vs. PY

» Registered new customer intake with strong momentum in H1 2019 vs. PY (+23%)

» Gross margin comes in at 28.4% in H1 2019, improved vs. PY (+0.7pp)

» EBITDA positive at € 4.5 m (H1 2018: - € 5.0 m)

» Free cash flow positive at € 6.9 m

» Sales and profit guidance for full year 2019 confirmed:

− Sales growth of 14% to 18%

− EBITDA in the range of € 10 m to € 30 m


Sales continue to grow – high retention core of the growth path

1) in local currencies2013 2014 2015 2016

711

2019e2018

909

1,342

407

543

1,111

2017

+136

+168

+198

+202

+231

91%94%

92%

94%1

93%

93%1

22%28%31%33%28%Sales growth

vs. PY

Repeat

customer sales

New customer

sales (1st year)

21%

94%

95%1

14% –

18%

92%

92%1

1,532 –

1,582

+190-240

H1


Sales increased by 13% to € 727 m in H1 2019, slight acceleration in Q2 2019

643

727

H1 2018 H1 2019

+13%

FX adjusted +13%

Sales (€ m)

» Sales driven by high customer

loyalty and increased new

customer business

» Absolute growth of € 84 m

» Increase in growth rate from 13%

in Q1 2019 to 14% in Q2 2019

» Private label food and cat litter

sales grew 29% vs. PY, revenue

share expanded to 15% of total

sales

» Non-food flat vs. PY


HU

Source: zooplus sales, unaudited data, growth rates compared to H1 2018;

market shares based on Euromonitor 2016 market data and zooplus estimation

112m

Total market 2018

23bnSales zooplus in

2018

DK, SE,

FI, NO

D,A,CHCZ, SK, HU, RO,

SI, HR, BG, TR,

GR, LV, LT, EE

ES, PT

zooplus is online market leader in Europe by a distance

NL, BE, LU

+9%

+5%

+11%

+9%

+10%

+24%

+14%

+15%

86m

149m

387m

84m

224m

82m

108m

1,342m

zooplus market

share in 2018

7.0%

2.7%

6.0%

4.7%

4.4%

5.7%

8. 2%

5.4%

5.8%

UK, IE

IT

FR, MC

Sales growth in

H1 2019

110m16.0%

+25%

PL

» Sales growth H1 2019:

+ 13% (+13% fx-adjusted)


Sales retention as major business driver on continuously high level

94% 92%

H1 2018 H1 2019

Sales retention rate1

1 Sales retention (net, non-BMF)

» GDPR impact on customer activation

of early stage cohort, measures started

to improve activation

» Subscription-like business model due

to high customer loyalty with recurring

repurchase activity

» Continous strong focus on retention

rate


Strong acquisition momentum in new registered customers in H1 2019

1,190

1,460

H1 2018 H1 2019

Registered new customers (in k)

» Registered new customer growth

based mainly on traditional Google

marketing

» Higher marketing spend and

optimization of Google bidding

» New additional marketing initiatives

targeting brand awareness across

online- and offline-shoppers kicked-

off end of May 2019

+ 23%


Gross margin stabilization continues in H1 2019

in % of sales

1 Sales – CoGS

Gross margin1

» Less customer and transactional

discounts

» Reduction of non-profitable orders

» Introduction of dynamic shipping fee

for high-volume baskets

» Favorable sourcing conditions

» Further growth in high-margin

private label business

27.7%28.4%

H1 2018 H1 2019

+ 0.7 %p


3.3% 3.5%

2.5% 2.2%

20.2% 18.4%

2.0%3.3%

Significant cost savings in logistics and IT/admin have been invested in additional marketing spend

Total margin1

1.0% 1.1% 1.0%

29.0% 28.5%

1 Gross margin + other income on sales 3 All in, including LTI & SOP

1.1%IT/Admin2

Advertising/

Marketing

Logistics2

Personnel3

Payment

Total margin & cost structure (in % of sales)

2 Logistics costs of 0.8%p and Admin costs of 0.2%p in H1 2019 reclassified to

depreciation and interests according to new IFRS 16

1.0%

28.2%

1.9%

29.1%

» Continued strong cost efficiency and

optimization within cost structure

» Operational improvement and

increased value per parcel driving

logistics costs down by 1.0 %p

(excluding IFRS 16)

» Reallocation of resources into

marketing spend for further growth

» On-top marketing spend in Q2 2019

for 20-year campaign

EBITDA-0.8% 0.6%

H1 2018 H1 2019


Expanding addressable audience through additional marketing initiatives

» Google continues to be most relevant

acquisition channel

» Enhanced marketing strategy to

increase brand awareness of zooplus

with online and offline shoppers

» Additional marketing activities started

only end May 2019

» Too early to comprehensively

evaluate success of individual

activities due to repurchase pattern

+Offline & online

marketing activities

Investor & Analyst Presentation - Annual Report 2018 | page 12

» Now 12 fulfillment centers across Europe

» Italy with new medium sized FC close to Milano (8,000 sqm)

» Streamlined operations by integrating two small FCs in France and Poland into existing structures

» All FCs operated by logistics specialist partners; almost no capex requirement for zooplus

» SKU allocation, replenishment,

order routing and packing algorithms intellectual property of zooplus

With the opening of the Italian FC in Q2 2019 the last white spot in the logistics network has been closed

2013

2015

Fulfillment center (FC)

2009

2016

2017/18

2000/2011

2017

2018

2019

2018

Southern coveragecompleted withnew Italian FC


Earnings improved vs. H1 2018, EBITDA positive with € 4.5 m

-5.0

4.5

-9.2 -9.1

+ 9.5 + 0.1

in % of sales -0.8 %

0.6 %

-1.4 % -1.3 %

EBITDA (€ m) EBT (€ m)

EBITDA 2019 based on full IFRS 16 application; delta EBITDA vs. PY + € 2.0 m

without IFRS 16 impact

H1 2018 H1 2019 H1 2018 H1 2019


Earnings improved vs. H1 2018, EBITDA positive with € 4.5 m

IFRS 16 impact on H1 2019 vs. H1 2018:

Logistics costs: € 5.9 m (0.8%p) into depreciation

Admin costs: € 1.6 m (0.2%p) into depreciation

EBITDA H1 2018: € -5.0 m

EBITDA H1 2019: € 4.5 m

Improvement EBITDA: € 9.5 m thereof € 7.5 m due to IFRS 16


Positive Free cash flow through further improvements in working capital

Cash flow (€ m)

Cash flow from

operating

activities

Cash flow from

investing

activities

Free cash flow2.5 %

H1 2019

9.2

-2.4

3.1 %

6.9

Major focus on working capital and

operating cash flow improvements

with main drivers:

» Inventory turn

» Payment days

Free cash flow impact in H1 2019 due to IFRS 16: € +7.8 m


Strategic remarks in view of the Chewy IPO

1. There is room next to amazon

2. zooplus is a recurring revenue / subscription type business model

3. Valuation comparison zooplus and Chewy


Pet specialist

There is a good way of living next to amazon as a differentiated category specialist

zooplus clearly differentiates already today from amazon and will do even

more in future (emotionalization, pet services, branding etc.)

Generalist

» zooplus has expanded the business with amazon in the market since more than 10 years

» Very high retention rates and record new customer intake

» Preferred partner for premium supplier base with the widest reach in Europe

» US peer Chewy proves again that there is room next to amazon in the category


zooplus is a recurring revenue / subscription type business model like Chewy

92%

61%

75%80%

87%90% 92%

Wayfair Asos Zalando NetflixBohoo

Even without formal companywide subscription models, zooplus customers

behave like autoshipment

Source: Liberum – Consumer Discretionary Report 15 May 2019; Sales retention in local currencies.

Chewy Q1 2019 presentation webcast

sales retention rates of different business models

» At Chewy 2/3 of business comes

from autoshipment and the rest

„behaves like autoship…“

» At zooplus all repeat customers

behave like autoship

» Formal autoshipment (subscription)

in place in Germany, to be rolled out

in other markets


Significant valuation gap between zooplus and US peer Chewy

» Online market leader by far ahead of

amazon

» Sales growth guidance 2019: 14-18%

» Marketing spend: ~ 3% of sales

» Retention rate 92%

» European-wide fully integrated

logistics network managed by zooplus

» EBITDA-margin 2018: 0.6% of sales

» Long-term EBITDA margin: 5-7%

Market

valuation: 0.5 x sales 2019Market

valuation: 2.7 x sales 2019

» Online market leader slightly ahead of

amazon

» Sales growth guidance 2019: 36-38%

» Marketing spend: ~ 10% of sales

» Retention rate > 100%

» US-wide logistics network owned by

Chewy

» Adj. EBITDA-margin 2018: - 7% of sales

» Long-term adj. EBITDA margin: 5-10%,

thereof 5-8%p from gross margin

Source: Chewy S-1 filings and Q1 2019 trading statement, market valuation as of August 11th


H1 2019

Q & A


Key financials H1 2019

1 impairment expenses of financial assets reclassified to payment

2 own work capitalized reclassified to personel

Due to the application of IFRS 16 in H1 2019, additional € 6.3 m logistics and € 1.5 m G&A costs are reclassified to depreciation

P&L

in € m

Sales 726.6 642.8

abs. 83.9

Δ in % 13.0%

4.7 3.2

0.6% 0.5%

-520.0 -464.7

-71.6% -72.3%

-133.7 -129.8

-18.4% -20.2%

-7.9 -6.6

-1.1% -1.0%

-23.7 -12.7

-3.3% -2.0%

-25.6 -21.0

-3.5% -3.3%

-16.0 -16.1

-2.2% -2.5%

4.5 -5.0

0.6% -0.8%

-13.6 -4.2

-1.9% -0.7%

-9.1 -9.2

-1.3% -1.4%

EPS in EUR (basic) -0.99 -0.92

Balance Sheet

Total Assets 353.9 275.2 78.7

105.0 106.4

29.7% 38.7%

Cash Flow

Free Cash Flow 6.9 3.7 3.2

Other income 1.5 0.2%p

COGS -55.3 0.7%p

Logistics -3.8 1.8%p

Payment1 -1.3 -0.1%p

EBITDA 9.5 1.4%p

Customer acquisition -11.0 -1.3%p

Personnel2 -4.6 -0.3%p

H1 2019 H1 2018 ∆ abs ∆ %p

Equity (Ratio in %) -1.4

I&DA -9.4 -1.2%p

EBT 0.1 0.2%p

G&A 0.1 0.3%p


Profit & Loss H1 2019

abs % abs %

Sales 726.6 100.0% 642.8 100.0%

Other income 4.7 0.6% 3.2 0.5%

Cost of ma teria ls -520.0 -71.6% -464.7 -72.3%

Personnel costs -25.6 -3.5% -21.0 -3.3%

Other expenses -181.3 -25.0% -165.3 -25.7%

thereof logistics / fulfillment -133.7 -18.4% -129.8 -20.2%

thereof marketing -23.7 -3.3% -12.7 -2.0%

thereof payment -7.9 -1.1% -6.6 -1.0%

thereof other costs -16.0 -2.2% -16.1 -2.5%

Earnings before depreciation,

interest and taxes (EBITDA) 4.5 0.6% -5.0 -0.8%

Depreciation -12.9 -1.8% -3.9 -0.6%

Fina ncia l income 0.0 0.0% 0.0 0.0%

Fina ncia l expenses -0.8 -0.1% -0.3 0.0%

Earnings before taxes (EBT) -9.1 -1.3% -9.2 -1.4%

Taxes on income 2.1 0.3% 2.6 0.4%

Consolidated net result -7.1 -1.0% -6.6 -1.0%

Differences from currency

trans la tion -0.1 0.0% -0.4 -0.1%

Hedge reserve 0.1 0.0% 0.9 0.1%

Items that may be relclassified

subsequently to profit or loss 0.0 0.0% 0.5 0.1%

Comprehensive income -7.0 -1.0% -6.0 -0.9%

Earnings per share in €

bas ic -0.99 - -0.92 -

di luted -0.99 - -0.92 -

in € mH1 2019 H1 2018


Balance Sheet as of June 30th, 2019

As s ets

in € mJune 30th.

2019

Dec. 31st.

2018∆ abs

A. Non-current assets

I. PP&E 5.7 55.9 -50.2

II. Right-o f-use assets 80.4 0.0 80.4

III. Intangible assets 13.8 14.2 -0.4

IV. Deferred tax assets 1.3 0.0 1.3

Total non-current assets 101.2 70.0 31.2

B. Current assets

I. Inventories 115.1 107.6 7.5

II. Advance payments 0.0 0.4 -0.4

III. Accounts receivable 34.3 28.1 6.2

IV. Other current assets 24.6 16.1 8.5

V. Contract assets 21.0 19.0 2.0

VI. Tax receivables 0.9 0.9 0.0

VII.Derivative financial

instruments0.3 0.0 0.3

VIII. Cash and cash equivalents 56.5 59.5 -3.0

Total current assets 252.7 231.7 21.0

353.9 301.8 52.2

E quity and L iabilities

in € mJune 30th.

2019

Dec. 31st.

2018∆ abs

A. Equity

I. Capital subscribed 7.1 7.1 0.0

II. Capital reserves 101.7 100.8 1.0

III. Other reserves -1.8 -1.8 0.0

IV. Profit and Loss carried forward -2.1 4.9 -7.1

Total equity 105.0 111.1 -6.1

B. Non-current liabilities 62.4 41.4 21.0

C. Current liabilities

I. Accounts payable 125.3 99.7 25.5

II Derivative financial instruments 0.2 0.1 0.1

III. Other current liabilities 21.5 19.9 1.6

IV. Contract liabilities 17.9 17.1 0.8

V. Tax liabilites 0.1 0.1 -0.1

VI. Finance lease 19.1 9.8 9.3

VII. Provisions 2.6 2.6 0.0

VIII. Deferred income 0.0 0.0 0.0

Total current liabilities 186.5 149.3 37.2

353.9 301.8 52.2


Cash flow H1 2019

in € m H1 2019 H1 2018

EBT -9.1 -9.2

Cash flow from operating activities 9.2 8.0

Cash flow from investing activities -2.4 -4.3

Free cash flow 6.9 3.7

Cash flow from financing activities -9.9 -2.3

Currency effects on cash and cash equivalents 0.1 -0.2

Net change of cash and cash equivalents -3.0 1.2

Cash on hand, bank deposits 56.5 52.4


Major KPIs per quarter

Major KPIs Q1 2019 Q2 2019 Q3 2019 Q4 2019

Sales (in € m) 363.2 363.5

Δ vs. PY 12.6% 13.5%

Private label growth vs. PY 29% 29%

New customer count (in k) 818 792

t/o registered new customers (in k) 739 721

t/o unregistered new customers (in k) 79 71

Sales retention (net, Non-BMF) 93% 92%

Total Margin 28.8% 29.4%

Cost ratio 28.2% 28.7%

EBITDA (in € m) 2.2 2.3

EBITDA 0.6% 0.6%

investor & analyst presentation · investor & analyst presentation h1 2019 –august 2019 |...

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