RENEWING MATAS ONE YEAR DOWN THE ROAD

Transcription

1 COPENHAGEN WINTER SEMINAR 4 DECEMBER 2018 RENEWING MATAS ONE YEAR DOWN THE ROAD GREGERS WEDELL-WEDELLSBORG, CEO MATAS A/S

2 Summer 2017: Revenue development fell short of growth ambitions in the 2020 strategy 2020/21 Revenue ambition (DKK bn) Causes of Shortfall General drop in retail footfall Migration to online shopping Price competition Intensified competition, particularly in Mass beauty 2015/ / / /21 Insufficient investment Store network, store concept and online There is a need for renewing and changing Matas in order to deliver growth and ensure profitability Copenhagen Winter Seminar - 4 December

3 November 2017: Strategy update initiated How can Matas emerge stronger and more valuable to investors, consumers, partners and society? Copenhagen Winter Seminar - 4 December

4 November 2017: Measures to enhance performance CLOSURE OF STYLEBOX HQ SAVINGS 4 STORE CLOSURES COMPETITIVE STRENGTH LOWER PRICES ON MASS BEAUTY EBITDA effect of DKK 30 to 40 m in 2018/19, most of which will be reinvested in growth initiatives STRENGTHENED E-COMMERCE Copenhagen Winter Seminar - 4 December

5 The strategic starting point: We turned to our customers for answers Customer research In-depth interviews with Customers Suppliers & Employees Influencers & Industry experts Extensive shopper study (more than 200 customers) Club Matas member analyses Transaction and basket analyses International best practice cases Synthesis of existing customer studies (more than 20 studies) Copenhagen Winter Seminar - 4 December

6 Our reality: In the coming years, we expect four shifts to impact Matas SHIFT IMPACT 1 Consumer Rising expectations and altered shopping behaviour 2 Health & Beauty New ways of playing in the core categories and brands 3 Channel Continued migration to online shopping 4 Tech Continued tech advancements will change how retailers operate Combined, we call these shifts The Retail Shake-up Copenhagen Winter Seminar - 4 December

7 Strategic flexibility: We have explored a number of scenarios HIGHER FOOTFALL Retail Space Race Retail Utopia MORE COMPETITION NOW LESS COMPETITION Retail Apocalypse Survival of the Fittest LOWER FOOTFALL Copenhagen Winter Seminar - 4 December

8 ONLINE GROWTH SCENARIOS Channel shift scenarios ALLOCATION OF CAPEX AND OPEX NOW FUTURE Copenhagen Winter Seminar - 4 December

9 Our 2023 strategy: Renewing Matas STRATEGIC TRACKS STRATEGIC AMBITIONS TOWARDS 2022/23 1 Live our purpose: Beauty & Wellbeing for life Lift customer engagement Grow revenue Win online Reignite store growth Change how we work Open new growth paths Secure earnings Copenhagen Winter Seminar - 4 December

10 1 Live our purpose: Beauty and wellbeing for life Copenhagen Winter Seminar - 4 December

11 1 Live our purpose: Beauty and wellbeing for life BEAUTY & WELLBEING FOR LIFE CONSUMER CAMPAIGN SKØNNERE SAMMEN (BEAUTIFUL TOGETHER) LAUNCH OF PURPOSE TOWARDS THE BEAUTY INDUSTRY, E.G. PARTNERS AND INFLUENCERS Copenhagen Winter Seminar - 4 December

12 2 Visible results of Matas 4D and our strengthened E-commerce efforts Digital Channels Matas 4D => 55% Digital Customer Digital Communication Experience In-store Digital Staff ONLINE GROWTH IN H1 2018/19 Copenhagen Winter Seminar - 4 December

13 2 Acquisition of Firtal Group ApS Copenhagen Winter Seminar - 4 December

14 2 Matas x Firtal: Joining forces around a shared vision Accelerate growth Beauty and wellbeing expertise Access to suppliers and brands Marketing and distribution To build a network of digital niche brands that make healthy living easier Digital niche building knowhow Culture of innovation, execution speed and digital talent Low cost operating model Harvest synergies Copenhagen Winter Seminar - 4 December

15 3 Reignite store growth by developing a new concept NEW ASSORTMENT STORE NETWORK CONCEPT DEVELOPMENT Copenhagen Winter Seminar - 4 December

16 4 Open new growth paths step one: The green market THE GREEN WAVE A GROWING DKK 1.6 BN UNCONSOLIDATED MARKET INTRODUCING MATAS NATUR TO BE THE NATURAL CHOICE FOR CUSTOMERS SEEKING A GREENER AND HEALTHIER LIFE THE FIRTAL ACQUISITION PURCHASE OF HELSEBIXEN.DK AND JALA-HELSEKOST.DK, TWO ONLINE PURE PLAYERS IN THE GREEN MARKET Copenhagen Winter Seminar - 4 December

17 4 Strengthening Matas position in the green market Green shop-in-shop in Matas Firtal Group ApS Two Matas Natur Concept Stores Partnerships Matas.dk/natur Partnerships Copenhagen Winter Seminar - 4 December

18 5 Change how we work step one is the new management team CEO Gregers Wedell-Wedellsborg CFO Anders Skole-Sørensen IR & Corp. Affairs Elisabeth Klintholm COMMERCIAL DEVELOPMENT ECOM SALES HR IT & Organisation CCO Development Director Ecommerce Director COO HR Director IT Director Lise Ryevad Katrine Benthien Brian Andersen Søren Thomsen Henrik Dybdahl Thomas Grane Copenhagen Winter Seminar - 4 December

19 H1 2018/19 in numbers: Stable revenue and earnings Revenue EBITDA before special items DKK 1,621.0million H1 2017/18: DKK 1,620.7 m DKK 246.9million H1 2017/18: DKK m Underlying (like-for-like) growth of -0.3% H1 2017/18: -1.1% EBITDA margin before special items 15.2% H1 2017/18: 15.1% Copenhagen Winter Seminar - 4 December

20 Where we are going: Renewing Matas Our current solid foundation Top 3 in E-commerce Aspiration in five years Undisputed online market leader National network with 279 stores Upgraded store network with newer, fewer and larger stores 1.55 mio. active Club Matas members Second-to-none membership engagement Long-term supplier partnerships and strong house brands (PL & exclusive brands) Faster rotation of range and wider brand ownership Strong own-print media portfolio Unrivalled SoMe reach & relevance One business model More revenue streams Copenhagen Winter Seminar - 4 December

21 Matas 2023 Strategy: Renewing Matas Matas will emerge stronger and more valuable to investors, consumers, partners and society Copenhagen Winter Seminar - 4 December

22 Q&A Copenhagen Winter Seminar - 4 December

23 Performance: Ambitions towards 2022/ /20 to 2022/ /23 CUSTOMER ENGAGEMENT 1 Continuous improvement Index 110 REVENUE 2 Positive LFL from 2020/21 Around DKK 4 bn EBITDA MARGIN 3 Harvest scale benefits online Change how we work Above 14% 1. Measured by Matas Net Promotor Score (M-NPS). 2. Total revenue from existing business, Matas Natur and Firtal Group Based on existing IFRS rules (IFRS16 not included). Copenhagen Winter Seminar - 4 December

24 Resources: Capital allocation towards 2022/ /20 to 2022/ /23 GEARING 1 Not materially exceeding 3 Between 2.5 and 3 CAPEX DKK m average frontloaded Below DKK 90 m DISTRIBUTION POLICY Distribute excess capital Distribute excess capital 1. Net interest bearing debt to EBITDA before special items. Based on existing IFRS rules (IFRS 16 not included). Copenhagen Winter Seminar - 4 December

25 Q2 2018/19 in numbers Revenue EBITDA before special items DKK 777.2million Q2 2017/18: DKK m DKK 108.6million Q2 2017/18: DKK m Underlying (like-for-like) growth of -1.9% Guidance: Unchanged (-1 to +1%) EBITDA margin before special items 14.0% Guidance: Increased to more than 15% Copenhagen Winter Seminar - 4 December

26 Guidance: Financial targets for 2018/19 REVENUE Unchanged level for underlying revenue (LFL between -1 and 1%) EBITDA MARGIN BEFORE SPECIAL ITEMS 1 Above 15% CAPEX TOTAL INVESTMENTS DKK m DKK m DIVIDENDS Despite the acquisition, Matas A/S still expects to be able to pay a dividend for the financial year 2018/19 1. Based on existing IFRS rules (IFRS16 not included). Copenhagen Winter Seminar - 4 December

27 Overview: Q2 2018/19 vs. Q2 2017/18 Revenue (DKK m) -1.6% LFL -1.9% Gross margin (%) Cost (DKK) Special items Other external costs Staff costs +1.6% EBITDA BEFORE SPECIAL ITEMS (DKK m) EBITDA Special items Q2 17/18 Q2 18/19 Q2 17/18 Q2 18/ Q1 18/ Q2 17/ Q2 17/ Q2 18/19 Adj. net profit (DKK m) Free cash flow (DKK m) Transactions (# m) Basket size (DKK) -2.3% +2.8% Q2 17/18 Q2 18/19 Q2 17/18 Q2 18/19 Q2 17/18 Q2 18/19 Q2 17/18 Q2 18/19 Copenhagen Winter Seminar - 4 December

28 Quarterly developments from Q1 2015/16 to Q2 2018/19 REVENUE GROWTH Like-for-like growth 12m trailing LFL growth GROSS MARGIN Gross margin LTM gross margin 1.2% 0.2% 0.5% 0.8% 0.4% -1.0% 46.3% 45.8% 46.4% 45.0% 44.9% -1.5% -1.9% 43.6% Q1 15/16 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 16/17 17/18 Q2 Q3 Q4 Q1 Q2 18/19 Q1 15/16 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 16/17 17/18 Q3 Q4 Q1 18/19 Q2 EBITDA MARGIN BEFORE SPECIAL ITEMS EBITDA margin before special items LTM EBITDA margin before special items INVENTORIES 2016/ / / % 17.5% 18.0% 14.5% 17.1% 13.6% 16.1% 14.0% Q1 15/16 Q2 Q3 Q4 Q1 16/17 Q2 Q3 Q4 Q1 17/18 Q2 Q3 Q4 Q1 18/19 Q2 Q1 Q2 Q3 Q4 Copenhagen Winter Seminar - 4 December

29 The Matas share LISTED ON NASDAQ OMX 28 JUNE m SHARES IN ONE SHARE CLASS 100% FREE FLOAT 10.4% OWNED BY KIRKBI INVEST A/S DKK 2.6 BN MARKET CAP ~56% DOMESTIC SHAREHOLDERS Copenhagen Winter Seminar - 4 December

30 Trading days 2016/17 to 2019/20 Q1 Q2 Q3 Q / / / /20 Copenhagen Winter Seminar - 4 December

31 Team Gregers Wedell-Wedellsborg CEO Anders Skole-Sørensen CFO Elisabeth Toftmann Klintholm Head of IR & Corporate Affairs Copenhagen Winter Seminar - 4 December

32 Forward Looking Statements This presentation contains statements relating to the future, including statements regarding Matas A/S future operating results, financial position, cash flows, business strategy and plans for the future. The statements can be identified by the use of words such as believes, expects, estimates, projects, plans, anticipates, continues and intends or any variations of such words or other words with similar meaning. The statements are based on management s reasonable expectations and forecasts at the time of the disclosure of the interim report. Any such statements are subject to risks and uncertainties and a number of different factors, of which many are beyond Matas A/S control, can mean that the actual development and the actual result will differ significantly from the expectations contained in the interim report. Without being exhaustive, such factors include general economics and commercial factors, including market and competitive matters, supplier issues and financial issues. Copenhagen Winter Seminar - 4 December