FINANCIAL STATEMENT 2016
AGENDA Who are we? Development in Q4 2016 Measures to increase growth and profitability Why invest in Lauritz.com?
HISTORY TRADITION AND TECHNOLOGY Lauritz Christensen Auktioner was established in 1885. Bengt Sundström bought the company in 1998 and on 9 December 1999 launched www.lauritz.com as a bold pioneer within the world of online auctions.
MISSION QUALITY AUCTIONS ONLINE Lauritz.com offers all the best attributes from traditional auctions of art, design, antiques and home luxury - online.
CONCEPT CREATE A NEW MARKET Lauritz.com combines the best elements from the traditional auction world (expertise, physical viewing, credibility) with modern technology (accessibility, transparency, global market).
VISION AUCTIONS TO THE PEOPLE Lauritz.com s aspiration is to democratize the international auction business by making auctions accessible for everyone.
1. Lauritz.com picks up item at seller or seller hands in item to the local auction house. 2. Item valued, photographed and described by a specialist. 3. Item is put on 7 days online auction, bids come from visitors from 200 countries. 4. Buyer wins the auction and pays for the lot online. 5. Item is sent to the buyer or picked up by the buyer. Seller is paid up to 35 days after auction has ended
PIONEER IN THE AUCTION INDUSTRY Paradigm shift Strong online auction platform Sourcing by local, physical auction houses Focus on the growing middle-market segment
REVENUE MODEL The revenues from auction consists of commission and fees from both buyers and sellers If Lauritz.com owns the auction house the total revenue for Lauritz.com is approx. 30% of auction turnover If Lauritz.com has a partner agreement, the revenue from auctions is approx. 10% of auction turnover Lauritz.com receives approx. 1.4% in marketing contribution of the auction turnover from each auction house to be spent on regional and global marketing
AUCTION TURNOVER DEVELOPMENT
AGENDA Who are we? Development in Q4 2016 Measures to increase growth and profitability Why invest in Lauritz.com?
KEY FINANCIAL HIGHLIGHTS IN Q4 Auction Turnover amounted to DKK 363.4m (312) Auction Turnover Margin amounted to 7.6 (7.3) percent Revenue amounted to DKK 73.1m (70.7) EBITDA amounted to DKK 27.6m (22.7) Profit amounted to DKK 9.2m (2.8) One partnership agreement was signed
KEY FINANCIAL HIGHLIGHTS 2016 Auction Turnover amounted to DKK 1,073.4m (1,084.0) Auction Turnover Margin amounted to 4.3 (3.9) percent Revenue amounted to DKK 219.4m (225.2) Revenue related to auction commissions and fees DKK 2.2m higher compared to 2015 DKK 8m lower one-off fees from sales of partnership agreements compared to 2015.
INCREASE IN REVENUES FROM CORE BUSINESS Lauritz.com s now 27 auction houses are owned by Lauritz.com or by a local Partner on a franchise like basis. Sometimes Lauritz.com sells an own house on a partnership agreement for a one-off fee When looking isolated at the core business, revenue related to auction commissions and fees showed a positive increase in 2016 and was DKK 2.2m higher compared to 2015.
GROWTH IN EBITDA EBITDA amounted to DKK 46.3m (41.8) Best EBITDA result ever in the history of Lauritz.com 10% growth in EBITDA in line with guidance from 19.01.2017 Unfortunately lower than previously expected min. 20% Lower than expected commission levels in the fourth quarter. Profit amounted to DKK 10.8m (-8.5) Mainly due to unrealized gain on currency exchange rate in 2016 compared to unrealized loss in 2015
EBITDA DEVELOPMENT OVER QUARTERS (e.g fine art influence)
AUCTION TURNOVER AND MARGIN DEVELOPMENT
EBITDA DEVELOPMENT (2013 acquisition QXL, 2014 bond issued and acquisition of Stockholms Auktionsverk)
KEY OPERATIONAL HIGHLIGHTS IN 2016 Integration of AB Stockholms Auktionsverk progresses well Record year for operations Karlstad Hammarö Auktionsverk (acquired in June) Shows positive development Signed 3 partnering agreements for new auction houses Plan to establish a second Lauritz.com auction house in Copenhagen
AGENDA Who are we? Development in Q4 2016 Measures to increase growth and profitability Why invest in Lauritz.com?
STRENGHEN FOUNDATION FOR GROWTH Measures to strengthen the foundation to leverage on our strong market position Looking into all business areas to increase revenue growth and profitability as well as to prepare ourselves for accelerated expansion Prioritizing core business within used quality items on online auction. Less focus on secondary areas as the peer-to-peer market and less valuable items Revision of action plan for 2017 Focus primarily on how to secure long term growth in auction turnover But also on how to further develop processes to optimize customer satisfaction, efficiency and increase earnings Go through some new initiatives here
CUTTING COSTS ON SHORT TERM Cost cutting plan initiated in Q1 Adapt organisation to current revenue level Develop processes and new structure Achievements so far Reduction of 15 % of headquarter staff and spending Impact on profitability during 2017
ESTABLISHMENT OF NEW HOUSES Biggest challenge in the auction business is to attract more sellers/items Capability to establish new auction houses to attract local sellers in more locations is key to success Strong pipeline of potential new auction houses in 2017 Negotiations with several potential acquisitions and partners to start up in current and new geographical markets We expect to open more auction houses in 2017
ORGANISATION DEVELOPMENT Upgrade of commercial management resources, all about in-flow of items On HQ level, country managers will be appointed and responsible for securing a local sales focus to acquire items Change of the cast of the branch manager to secure focus on in-flow of items and a lean processing of items through the houses Recruitement initiated of several new high level branch managers with a more commercial Sales director profile Leadership programme initiated to further align and develop management capabilities between our existing branch managers
TO ATTRACT MORE ITEMS IN EXISTING HOUSES The action plan 2017 presents a long list of initiatives Towards existing and potential selling customers Among others an improved pick-up service at seller s home Elaboration of CRM program to inspire buyers to also sell Optimised flow for our online evaluations New incentive package for sellers to consign
IMPROVING BUYERS CUSTOMER EXPERIENCE Introduction of new features to further improve the customer experience for bidding and buying customers online Among others launch of a new design of Lauritz.com s very popular app New credit card payment system for buyers More intelligent search engine Adding additional flexibility to our shipping services Implementation of NPS system to measure customer satisfaction
GUIDANCE FOR 2017 In 2017 the Group expects an increased net revenue and an EBITDA margin between 20-25 percent
AGENDA Who are we? Development in Q4 2016 Measures to increase growth and profitability Why invest in Lauritz.com?
GREAT PLATFORM TO BUILD ON Biggest auction group in the Nordics 27 auction houses in 5 countries 6.2 million monthly visits 2 million unique visitors per month 3 million customer registrations World wide reach, from 200 countries
BIG FUTURE POTENTIAL Trend with online trading Over 90% internet users in Lauritz.com s core markets First-mover advantage Auction market not yet transformed Fragmented physical auction market leaves room for consolidation Explore new auction categories, new customers
SCALABLE MODEL FOR ESTABLISHING NEW HOUSES Lauritz.com s auction houses can be established in 3 ways Own auction house Partnership Associate Lauritz.com currently operates 27 auction houses in total of which 17 are partner houses.
CLEAR MIDDLE MARKET POSITION Specialist expertise Price/estimate We will continue to explore and build the large middle-market segment which positions Lauritz.com between peer-to-peer platforms (without expertise) with high volume at low prices and the fine art market with low volume and high prices. This is where we continue to see the highest potential.
STRONG OPERATION Advanced trading platform Strong central organization Large number of valuation experts Manuals defining auction procedures Quality control and monitoring system Lauritz.com University A convenient customer journey; Online evaluation, pick of item at seller, accessible bidding online, efficient payment service for buyers and a well-developed third party shipping for buyers High customer satisfaction
LONG-TERM FOCUS More auction houses More customers More lots at auction In more countries To be accessible for our local sellers and global buyers
STRONG OWNERS Founder Bengt Sundstrøm Bure Equity AB Swedbank Robur Fonder Catella Fondförvaltning AB Rite Internet Ventures Holdings CEO Mette Rode Sundstrøm
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