[PPT] - 3Q19 3Q19 RE RESULT SULTS S PR PRESENTA ESENTATION TION PowerPoint Presentation

SLIDE 1

3Q19 3Q19 RE RESULT SULTS S PR PRESENTA ESENTATION TION

WARSAW 19TH NOVEMBER 2019

SLIDE 2

2

G L O B A L A S P I R A T I O N S

Disclaimer

This is presentat atio ion (th the “Presentation”) was pre repar ared by by LPP SA SA (the “Company”) with a due car

are. Still

ll, it it may con

ntain certain

in in inco consis istencie ies or

r omis

issio

ions. The Pre

resentat atio ion does not

t con
ntain a co

complete or

r thorou
ugh fin

inan ancia ial anal alysis is of

f th

the Com

mpan

any and does not present its stan anding or

r prospect

cts in in a co comprehensiv ive or

r in

in-depth man

anner. Therefor
re, an

anyon

ne who in

intends to to mak ake an an in inve vestment decis isio ion with respect ct to to the Com

mpany should

ld re rely ly on

n the info

formatio ion dis iscl closed in in the offic icia ial report rts of

f the Company,

publis ished in in acco cordan ance wit ith the laws applic icable to to the Company. This is Presentation was prepared fo for inform rmation purp rposes on

nly

an and doe

es not
t con

const stit itute an an offer

ffer to

to buy or

r to

to sell sell an any fi finan ancia ial instr struments. The Presentation may con

ntain

in 'for

rward

rd-lo look

king state

tements'. How

wever, such stat

atements cannot be be tre reate ted as as assurance ces or

r

proje ject ctio ions of

f any expected future result

lts of

f the Company. Any st

statements concerning expect ctations of

f fu

futu ture fin inancia ial results cannot

t be

be understo tood as as gu guarantees that at any such results will ll actu tuall ally be be achie ieve ved in in future. The expectat atio ions of

f the Man

anagement Boar ard are are based on

n their

ir current knowledge and depend on

n many fact

ctor

rs due to

to whic ich the actu tual al result lts achie ieved by by the Com

mpany

may ay diff iffer materia iall lly fro rom the results presented in in this is document. Many of

f those facto

tors ar are beyond the awar areness and contro rol of

f

th the Com Company or

r th

the Company’s ab abili lity to to for forese see th them. Neither th the Com

mpany, nor its dire

irector

rs, off

ffic icers, advis isors, nor re representativ ives of

f any such

ch persons ar are lia iable le on

n acco

count of

f any

re reason resulting fr from any use of

f this

is Presentation. Additio ionall ally, no no in info form rmatio ion contain ined in in th this is Presentation con

nstitu

itutes any re representatio ion or

r war

arra ranty of

f the Com
mpany, its off

ffic icers or

r dire

irecto tors, ad advis isors or

r representatives of
f any of
f th

the ab above persons. The Presentation an and the for

rward

rd-lo look

kin

ing stat atements speak ak only as as at at the date of

f th

this is Pre resenta tatio

ion. These may not
t be

be in indic icat ativ ive of

f

re results or

r developments in

in fu future periods. The Com

mpany does not undertak

ake any oblig igat atio ion to to revie iew, to to co confir irm or

r to

to release publicl icly an any revis isio ions to to any for

rwar

ard-lo look

kin

ing stat atements to to refl flect ct eve vents that at occur or

r cir

ircumstance ces th that aris ise aft fter th the dat ate of

f

th this Pre rese senta tatio ion. The Company publis ished the in inform rmation on

n the planned bon
nd is

issuan ance in in it its cu curr rrent report rt 16 16/2019 date ted 13 13.09 09.2019. In Infor

rmat

atio ion presented here rein in is is not dis iscl closed as as a part rt of

f mark

rket soundin ing in in the meaning of

f art

rt.11 11 of

f Regulatio

ion (E (EU) No No 596/2014 of

f the

Euro ropean an Par arlia iament and of

f th

the Cou

uncil of
f 16

16 April 2014 on

n mar

arket abuse (M (Mark rket Abuse Regu gula latio ion) and re repeal alin ing Dire irective ive 2003/6/EC of

f the Euro

ropean an Parl rlia iament and of

f the Council and Com
mmis

issio ion Dire irectiv ives 2003/124/EC, 2003/125/EC and 2004/72 72/EC. In In part rtic icular ar by by pre resenting this is in info form rmation neither the Com

mpany nor the Deal

aler aim at at gaugin ing the in interest of

f

pote

tentia

ial inve vestor

rs in

in a poss

ssib

ible le tra transactio ion an and th the con conditio itions re relatin lating to to it it.

SLIDE 3

3

G L O B A L A S P I R A T I O N S

1. 3Q19 financial results
2. Key corporate events
3. 2019 and 2020 outlook

SLIDE 4

4

G L O B A L A S P I R A T I O N S

On On-line and off-line growth continues

30 COUNTRIES +47% SALES 1,746 STORES +12.8% m2 24 COUNTRIES +5.7% LFL

OFF-LINE ON-LINE

+12.6%

GROUP REVENUES

39

COUNTRIES

SLIDE 5

5

G L O B A L N E A S P I R A C J E

5

LPP’s presence in 39 countries

n-line + off-line
n-line
ff-line

30.09.2019

No. of

stores YoY LPP GROUP 1,746 + 32 Reserved 453 + 2 Cropp 362 House 319

7

Mohito 290

1

Sinsay 302 + 46 Outlets 20

8

908 19 1 88 51 24 22 31 99 3 6 323 25 51 26 6 5 21

1 3 1 1 2

29

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6

G L O B A L A S P I R A T I O N S

74.8 146.4 130.9 178.5 150.5 252.2 192.2 258.1 226.6 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

LFL and e-commerce growth

LF

LFLs wer ere posi positive in in Augu gust and d Sep September 201

2019. Po

Positive LF LFLs Ls in in 3Q 3Q19 at Crop ropp, Ho House, Mohito and d Sin Sinsay.

In 3Q19 LF

LFLs Ls wer ere pos positive in in half of co countries pr present (the high ighest in in Uk Ukraine, Russia, Romania and the UK UK). .

Double-digit e-commerce gro

growth (+ (+51 51% % Yo YoY) Y) in in 3Q 3Q19 due due to de development of e-stores outside of Po Polan land, in internet marketing outlay lays and d ch changin ing cu customer habi bits in in Po Poland (stores pa partiall lly clo closed on Sun Sundays).

On

On-line sales amo mounted to 11 11.4% % of rev revenues from rom Po Polan land and 9.7% grou group rev revenues in in 3Q19. . In 3Q19 Po Polan land co constituted 55% % of e-commerce rev revenues.

LF LFL L DYN DYNAMICS (local cur currencies) ON ON-LI LINE SA SALE LES (PLN PLN m)

15.2% 12.9% 9.2% 14.6% 3.6% 2.3% 11.4% 1.3% 4.2% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 7

7

G L O B A L A S P I R A T I O N S

Growth in all brands

In

n 3Q19 Res Reserved, , Cr Cropp and nd Moh

hito ge

generated mo more revenues fr from abroad th than fro from Pola

land.
The

The fa 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 str streetwear brands lik like Cr Cropp and nd Ho House (co contin inuatio ion of

f YoY
Y co

collection im improvements ts, flo floorspace gro growth).

Res

Reserved revenues gre grew les less dyn ynamically th than flo floorspace – co coll llect ctions wer ere mo more fa favourably acc ccepted by y cu cust stomers abroad th than in Pol

land and

nd th there was fa faster mig migratio ion of

f sel

selected co collectio ions (e.g. kids kids) to to internet.

+ 12% YoY + 12% YoY +9% YoY + 3% YoY + 41% YoY + 51% YoY

tys. m2

3Q18 3Q19 YoY

LPP GROUP 1,035.4 1,168.0 12.8% Reserved 584.9 643.1 10.0% Cropp 126.4 142.1 12.4% House 112.4 123.1 9.6% Mohito 106.2 111.9 5.3% Sinsay 94.7 137.7 45.5% Outlets 10.8 10.1

6.3%

REV REVENUES BY BY BR BRANDS

(PLN LN m)

3Q 3Q19 FL FLOORSPACE

(by brands)

81 227 295 212 266 325 943 Other E-commerce Sinsay Mohito House Cropp Reserved

SLIDE 8

8

G L O B A L A S P I R A T I O N S

10 630 624 1,084 ME CIS Europe Poland

Foreign revenues exceed Polish ones

In

n 3Q19 for foreign revenues exc exceeded dom

mestic on
nes.
Eur

European revenues wer ere pos

sit

itively aff ffected by y flo floorspace dev evelopment, t, esp especially in n th the SEE region, and nd stro strong rec eceptio ion of

f th

the e co coll llectio ion by y clie clients ts fr from Wes estern Eur Europe. .

Sales gr

growth in CI CIS co countries in 3Q19 (Ru Russia, Uk Ukraine) and nd ne new ma market t impact ct (Ka Kazakhstan). Gr Growth in ME E in 3Q19 due ue to to dev evelopment t in n Isra srael.

Among co

countries, th the hi highest t no nominal YoY

Y revenue gr

growth was rec ecorded in n Ru Russia and nd Pola

land.

REV REVENUES BY BY REG REGIONS

(PLN LN m) m)

3Q 3Q19 FL FLOORSPACE

(by reg egions)

ths m2 3Q18 3Q19 YoY

LPP GROUP 1,035.4 1,168.0 12.8% Poland 507.2 529.7 4.4% Europe 261.8 337.8 29.0% CIS 259.0 292.1 12.8% ME 7.3 8.4 15.1%

+ 4% YoY + 26% YoY + 27% YoY + 19% YoY

SLIDE 9

9

G L O B A L A S P I R A T I O N S

21.8% 15.9% 16.0% 20.2% 12.8% 10.4% 15.7% 8.0% 14.9% 0% 5% 10% 15% 20% 25% 500 1,000 1,500 2,000 2,500 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Retail sales (brands) E-commerce Other (incl. outlets) Revenue growth

Double-digit group revenue growth

Gr

Group revenues gre grew 14 14.9% % YoY

Y in

n 3Q19 due ue to to hi higher flo floorspace, str strong e-commerce dyn ynamics and pos

sit

itiv ive LFL LFLs.

Gr

Growth in n YoY

Y sa

sales/ m2 m2 in 3Q19 due ue to to e-commerce dev evelopment.

t. Lo

Lower YoY

Y ret

etail sa sales/ m2 m2 due ue to to op

pening of
f

increasingly la large stor stores.

The

The hi highest t dou

uble-dig

igit t ret etail sa sales/ m2 m2 gro growths were rec ecorded in n 3Q19 in Ukra Ukraine, Ru Russia and th the e UK UK.

GROUP REV REVENUES

(PLN LN m) m)

REV REVENUES/ / M2

PLN (monthly) 3Q18 3Q19 YoY

LPP GROUP retail 618 604

2.3%

Poland 634 593

6.5%

Europe 588 551

6.3%

CIS 617 686 11.2% LPP GROUP 663 685 3.4%

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10

G L O B A L A S P I R A T I O N S

3.6 3.6 3.4 3.6 3.7 3.8 3.8 3.8 3.9 3.9 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

Seasonally lower gross profit margin

Lo

Lower YoY

Y gro

gross ma margin in n 3Q19 due ue to to th the ne new inventory ma management pol

lic

icy – fa faster and nd str stronger sell sell-off of

f

Sprin ing/Summer 201 2019 co coll llectio ion in n Jul uly, ne new co coll llect ction in stor stores sin since Aug ugust t 201 2019.

Go

Good rec eceptio ion of

f Aut

utumn/Winter 201 2019 co coll llectio ions in n ma majority of

f brands.
Aut

utumn/ Win inter 201 2019 co coll llectio ion was purc urchased at t hi higher YoY

Y PLN

LN/US$. Ne New prod

ducts

ts in n of

ffering, RFiD

RFiD introductio ion at t Res Reserved brand ad ch changes in sou sourcing provided a cu cush shion for for th the ma margin.

QU QUARTE TERLY Y GROSS PR PROFIT IT MAR ARGIN IN AV AVERAGE QU QUARTERLY PLN PLN/US$

HIG IGHER YOY FX FOR AW 2019 2019 PU PURCHASES

49.0% 58.0% 45.1% 59.7% 51.0% 59.9% 43.4% 59.3% 49.6% 40% 45% 50% 55% 60% 65%

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 11

11

G L O B A L N E A S P I R A C J E

US$ impact on gross profit margin

Some 90% of goods is sourced from Asia with US$ being the settlement currency.

Ordering of goods with labels on them Goods become inventory Payment for goods

T- 6 months T T + 4 months

Open currency position Hedging of 70% of open position/ payments i.e. amounts on US$ invoices Continuous delivery of goods lowers the risk of purchasing the whole collection on currency peaks and bottoms.

Budgeted currency exchange (FX) FX at the time of purchase FX at the time of payment

I II III XII V VI VII VIII IX X XI

SLIDE 12

12

G L O B A L A S P I R A T I O N S

Operating costs under control

Lo

Lower YoY

Y rental co

costs sts  hi higher average stor store spac space low lowers average rent/ t/ m2 m2, sel selectiv ive loc location ch choices.

YoY
Y fa

fall in n HR HR co costs sts  low lower res esponsibilitie ies of

f sa

sales per ersonnel, RF RFiD iD int ntroduct ction at t Res Reserved, ou

uts

tsourcing of

f part

t of

f

HR HR fun functio

ions. As

s a res esult, t, gr growth in n ot

ther co

cost sts of

f stor

stores.

Sta

table YoY

Y SG&A/ m2

m2  hi higher co cost sts of

f HQ

HQs due ue to to e-commerce dev evelopment t and nd resultant t hi higher log logistics co costs sts, but ut sta stabilisatio ion of

f SG&A co

cost sts per er m2 m2 due ue to to flo floorspace gro growth.

CO COSTS OF OF OW OWN STO STORES/ M2 2 (IA IAS17) SG SG&A COS COSTS/ / M2 (IA IAS17)

2% YoY

0% YoY

280 300 279 297 295 292 277 283 294

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 100 94 90 96 93 93 90 88 90 61 61 60 58 57 55 53 54 52 53 61 62 58 57 59 58 60 61 214 216 212 212 207 207 201 203 203

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Rental costs HR costs Other costs

SLIDE 13

13

G L O B A L A S P I R A T I O N S

3Q19 EBIT growth

PLN m 3Q18 IAS17 3Q19 IFRS16 YoY 3Q19 IAS17 Revenues 2,043.9 2,348.2 14.9% 2,348.2 Gross profit it margi gin 51.0 51.0% 49.6 49.6%

1.5p

5pp. 49.6% SG&A cos

sts

898.8 1,004.0 11.7% 997.4 Operating profit 129.2 140.5 8.7% 147.1 EBIT IT margi gin 6.3% 6.0%

0.3p

3pp. 6.3% Financial costs net

19.2
97.1
47.6

Net profit 91.6 19.6

78.6%

65.0 EBITDA 217.4 396.0 82.1% 250.4

Ret

Return to to dou

uble-dig

igit gro group revenue gr growth:

n
n-li

line sale les dev evelo lopm pment,

floorspace incr

ncrease,

pos
sitive LFLs.
Lo

Lower YoY gr gross profit margin due e to to new ew inventory ma management pol

lic

icy – fa faster and nd str stronger sell sell-off of

f

Sprin ing/Summer 201 2019 co coll llectio ion in n Jul uly.

SG&

G&A co cost sts gro growth belo elow sa sales dyn ynamics due ue to to pos

sit

itiv ive ef effect ct of

f op
peratin

ing le

leverage. Lim

Limited co comparability YoY

Y due

ue to to th the applicatio ion of

f IFRS

FRS16.

Le

Less ss fa favourable YoY net et fin financial act activ ivity due to to: FX FX los losses on

n balance sh

sheet ite tems, IFRS FRS16 application (additio ion FX FX los losses and nd interest). ).

As

As a res esult, t, low lower ne net income.

SLIDE 14

14

G L O B A L A S P I R A T I O N S

Double-digit EBIT growth in 9M19

PLN m 9M18 IAS17 9M19 IFRS16 YoY 9M19 IAS17 Revenues 5,674.0 6,390.0 12.6% 6,390.0 Gross profit it margi gin 52.5% 51.2%

1.4pp.

51.2% SG&A cos

sts

2,610.9 2,826.6 8.3% 2,809.4 Operating profit 323.2 392.8 21.5% 410.1 EBIT IT margi gin 5.7% 6.1% 0.4pp. 6.4% Financial costs

20.1
124.5
51.9

Net profit 192.9 110.5

42.7%

183.2 EBITDA 581.5 1,123.0 93.1% 700.5

Double-dig

igit gro group revenue gro growth:

pos
sitive LFLs and

nd floo

orspace incr

ncrea ease,

n
n-li

line sale les dev evelo lopm pment.

Lo

Lower gro gross ma margin: go good acc cceptance of

f Sprin

ing/ Summer co collections, but ut hi higher YoY

Y sell

sell-offs (new inventory ma management pol

lic

icy), , ne negativ ive weather impact ct in n May and nd im impact t of

f US$

US$.

SG&

G&A co cost sts gro growth belo elow sa sales dyn ynamics due ue to to pos

sit

itiv ive ef effect ct of

f op
peratin

ing le

leverage. Lim

Limited co comparability YoY

Y due

ue to to application of

f IFR

FRS16.

Double-dig

igit t EB EBIT gr growth.

Less

Less fa favourable YoY

Y ne

net t fin financial act ctiv ivity due ue to to dep eprecia iation of

f PLN

LN to to eu euro and nd IFR FRS16 applicatio ion.

SLIDE 15

15

G L O B A L A S P I R A T I O N S 1,609 2,023 129 155 1,810 2,179 3Q18 3Q18 3Q19 3Q19 Inventory Trade receivables Trade liabilities

1,639 1,475 1,403 1,512 1,609 1,590 1,370 1,985 2,023 1,761 1,489 1,419 1,480 1,573 1,474 1,277 1,766 1,748

400 800 1,200 1,600 400 800 1,200 1,600 2,000 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Inventory (PLN m) Inventory/ m2 (PLN)

Trade liabilities finance inventory

26

26% % YoY

Y gr

growth in inventory and nd 11% % YoY

Y pick-up in

n inventory/ m2 m2 due ue to to acc cceleration of

f Aut

utumn/Winter 201 2019 in- tak takes by y on

ne mo

month and nd preparatio ion for for dyn ynamic op

penings of
f Sin

insay stor stores (higher inventory/ m2 m2 in n th the brand). ).

We

e are in li line wi with ou

ur lon

long-term targ target t of

f ma

matc tching li liabilitie ies to to invento tory le level.

Sup

upplier fin financing programme ut util ilizatio ion at t PLN LN 1, 1,346m m at t th the en end of

f 3Q19.
As

s a res esult, t, we e red educed ou

ur cas

cash cycl cycle to to -2 days in 3Q19 (negativ ive va values) co compared to to 0 days in 3Q18.

INVE INVENTORY WOR ORKING CA CAPI PITAL

(P (PLN m) m)

PLN 201m
PLN 156m

SLIDE 16

16

G L O B A L A S P I R A T I O N S

11

316
221
364
525
753
594
626
596
1.0
0.5

0.0 0.5

1000
700
400
100

200 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Net debt (PLN m) Net debt/ EBITDA (x)

Net cash on the balance sheet

At

t th the en end of

f 3Q19, we

e ha had PLN LN 596 596m m of

f ne

net cas

cash. In

n addit itio ion, we e had had PLN LN 81 81.2m m wor

rth of
f mo

money ma market t fun

funds. Our

targ target t is s to to ke keep ne net t cas cash in n th the ne next xt qua uarters for for fut future investments.

3Q19 cap

capex reached PLN LN 237 237m, up up 13 13% % YoY

Y due

ue to to up upgrades of

f ex

exis istin ing stor stores and nd op

pening of
f ne

new on

nes (es

especially abroad) ) as s wel ell as s ou

utl

tlays for for HQ HQs and off

ffices exp

expansion and IT.

YoY
Y fa

fall in n lon long-term deb ebt t due ue to to rep epayments ts of

f investment lo

loans (on sch schedule).

NET ET DEB DEBT AN AND NET ET DEB DEBT/ EBIT EBITDA

(PLN LN m, m, wit ithout t IFR FRS16)

CAP CAPEX (PLN PLN m)

3Q18: PLN 210m

0.5x

0.0x

0.4x
0.3x
0.4x
0.5x
0.7x
0.5x
0.5x

3Q19: PLN 237m

101.1 98.7 133.1 80.4 124.0 151.7 160.0 143.1 178.1 19.2 21.0 15.5 57.2 85.9 150.2 32.0 70.8 58.7 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Stores Other

SLIDE 17

17

G L O B A L A S P I R A T I O N S

9M19 executive summary

Foreign revenues exceed domestic ones.

1

Control of costs of stores.

3

Financial safety – net cash (IAS17).

5

Double-digit on-line sales growth.

2

Trade liabilities equalled with inventory.

4

SLIDE 18

18

G L O B A L A S P I R A T I O N S

1. 3Q19 financial results
2. Key corporate events
3. 2019 and 2020 outlook

SLIDE 19

19

G L O B A L A S P I R A T I O N S

Key corporate events

September 2019 E-COMMERCE DEVELOPMENT Uk Ukrainian e-commerce – 13 13th

th ow

wn on
n-line stor

store. Lau Launch of

f pan Eur

European e-store. October 2019 E-COMMERCE WAREHOUSE (FC) IN ROMANIA Lau Launch of

f e-commerce

warehouse (FC) in n Ro Romania, ne near Bu Bucharest, t, sup supporting e-commerce op

peratio

ions in SEE EE region.

22, 22,000 m2

October 2019 CIAO KENDALL Inte ternatio ional ca campaign with ith to top mo model Ke Kendall Jen enner. Int nternet t ca campaign co coupled with ith TV TV ca campaign (in in Pol

land).

). October 2019 ENTRY TO FINLAND Opening of

f stor

stores of

f all

ll brands in He

Helsinki. Fin

Finland is s th the e 25 25th

th ma

market t

f

f off ff-line sa sales.

6,5 6,520 m2

SLIDE 20

20

G L O B A L A S P I R A T I O N S

Finland – LPP’s 25th

th off-line market

In October we launched stores of 5 our brands in Helsinki. Stores are located in Mall of Tripla, the most modern and the largest shopping mall in Helsinki. Stores of LPP’s brands with a total floorspace

f 6,520 m2.

Finland is LPP’s 25th off-line market.

5 1 19

Number of f sto tores Cou

untries in 3Q

3Q19 Cou

untries in 4Q

4Q19 xx xx

SLIDE 21

21

G L O B A L A S P I R A T I O N S

Pan European e-store

stability (no intermediaries, continuation

f contact)

control over inventory and pricing policy direct access to retail customers Goals behind the launch of pan European e-store:

n-line sales growth,
learning the tastes of Western European

customers,

identification of potential new markets for

traditional stores. Another step towards realisation of our goal

f 20% of e-sales in

revenues in 2021/22. 3 largest markets (by revenues): Italy, Austria, France. Development through own e-stores gives us:

SLIDE 22

22

G L O B A L A S P I R A T I O N S

E-commerce FC in Romania

Why FC near Bucharest: possibility to send goods quickly and cost effectively to e-commerce customers within the SEE region fast growth and sizeable potential of the SEE region

At the beginning of October, 2019, we launched a Fulfillment Center with 22 ths m2 in Romania, near Bucharest. The warehouse services

n-line orders of five LPP’s

brands: Reserved, Cropp, House, Mohito and Sinsay.

SLIDE 23

23

G L O B A L A S P I R A T I O N S

More efficient logistics at LPP

SLIDE 24

24

G L O B A L A S P I R A T I O N S

Reserved campaign with top influencer

International campaign promoting Reserved brand.

#CiaoKendall

Kendall Jenner

On-line campaign, visual merchandising and return to TV advertising. A record number of views of the campaign (c. 20 million).

SLIDE 25

25

G L O B A L A S P I R A T I O N S

Sustainable development strategy 2020-2025

// //4 st strategic pill pillars

ECO AWARE – PRODUCT AND PRODUCTION CHEMICAL SAFETY IN PRODUCTION PACKAGING AWARE – PLASTIC UNDER CONTROL SUSTAINABLE DEVELOPMENT IN HQs AND SALES NETWORK

50% of Reserved garments in Eco Aware collection. CO2 reduction by 15%.

// // 20 2025

Full compliance with ZDHC standards (Zero Discharge of Hazardous Chemicals). 100% of plastic in packaging suitable for re-use, recyclable

r biodegradable.

100% of stores covered by Eco Aware STORES programme.

Continuation of production audits, social and employee-oriented actions.

SLIDE 26

26

G L O B A L A S P I R A T I O N S

1. 3Q19 financial results
2. Key corporate events
3. 2019 and 2020 outlook

SLIDE 27

27

G L O B A L A S P I R A T I O N S

Further acceleration in 2019

Floorspace (ths m2) XII.2018 XII.2019 target YoY I.2020 target BY BRANDS Res eserved 616. 616.7 672. 672.1 9% 9% 663. 663.3 Cropp 134. 134.0 151. 151.2 13% 13% 148. 148.8 Hou

use

116 116.2 129 129.9 12% 12% 127 127.0 Mo Mohi hito 109. 109.4 114. 114.0 4% 4% 112. 112.1 Sinsay 103. 103.0 175. 175.5 70% 70% 174. 174.8 Out Outle lets 12. 12.0 9. 9.0

25

25% 6. 6.8 BY REGIONS Po Pola land 529. 529.5 545. 545.6 3% 3% 531. 531.6 Eur Europe 279. 279.4 373. 373.2 34% 34% 368. 368.4 CIS 275. 275.4 324. 324.4 18% 18% 324. 324.4 ME ME 7. 7.1 8. 8.4 19% 19% 8. 8.4 TOTAL 1,091.3 1,251.6 15% 1,232.8

Acc

cceleration of

f flo

floorspace gro growth in n 201 2019 to to 15% YoY.

2

2 new markets in 201 2019 9 (wit ith own sto stores): Bo Bosnia and and He Herzegovina (1H19) and nd Fin Finland (4Q 4Q19). ).

As

s a res esult, t, at t th the en end of

f 201

2019 Res Reserved brand stor stores were pres esent in n 25 25 co countr tries.

201

2019 targ targets:

floorspace stabili

lization n in n Po Pola land,

acc

cceleration of

f growth in

n Eur Europe (emphasis on

n Sou
uth

Ea Easte tern Eur Europe),

con
nti

tinu nuation of

f floorspace dev

evelo lopment t in n the he CIS IS reg egion,

new

new store in n the he Midd Middle Ea East t (Israel) l).

Pla

lanned 201 2019/20 (13 13 mo months) cap capex at t c.

c. PLN

LN 92 920m. Pla lanned stor store cap capex at t c.

c. PLN

LN 73 730m 0m, HQ HQs ou

utlays at

t PLN LN c.

c. 110

110m, log logistic ics ou

utl

tlays at t c.

c. PLN

LN 30 30m and IT T at t c.

c. PLN

LN 50 50m.

SLIDE 28

28

G L O B A L A S P I R A T I O N S

ON ON-LINE SALES (PLN LN m)

64.8

2014

79.3

2015

173.1

2016

360.8

2017

712.0

2018

1,000+

2019/20 TARGET 2021/22 TARGET

20%

Dynamic on-line sales growth

ver PLN 1 bn

e-commerce revenues

2 0 1 9 / 2 0 T A R G E T

SLIDE 29

29

G L O B A L A S P I R A T I O N S

A shift in fiscal year

4th quarter of the 2019/20 financial year will be the only 4-month-long quarter. It will last from beginning of October 2019 until the end

f January 2020.

Preliminary estimates of 4Q19/20 will be presented on 3rd February 2020 (Monday) after the market close. A meeting will take place in the first week of February. Preliminary data for the first 12 months of 2019 including data for a standard 4Q19 (3-month- long) will be presented on 7th January 2020.

Financial report for the 13-month long year will be published in April 2020.

SLIDE 30

30

G L O B A L A S P I R A T I O N S

Targets for 2019/20

Con

Continuation of

f do

double-digit re reven venue gro growth du due to to floorspace de devel velopment, , pos

sitive LF

LFLs Ls an and d e-com commerce. .

Group’s gro

gross prof rofit mar argin sho hould ld be be be betw tween 52-53 53% (lowered by by 1p 1pp du due to to faster Sin Sinsay de devel velopment).

Cos

Cost con control. .

Net

t cas cash to to con continue (IA IAS17). T A R G E T S ( 1 3 m o n t h s ) O P P O R T U N I T I E S R I S K S

LPP’s stores in new

cou countries.

Con

Continuation

f
f e-com

commerce gro growths.

RFI

RFID im imple lementation at at Res Reserved bra brand.

Unf

nfav avourab able le FX FX tren trends

n
n US$

S$, , EU EUR and nd RU RUB in in re relati ation to to PLN PLN.

Mor
re severe ba

ban n on

n

trad trade on

n Sun

Sundays (12 12%

f
f Pol

Polish re reven venues).

SLIDE 31

31

G L O B A L A S P I R A T I O N S

Continuation of growths in 2020/21

Floorspace (ths m2) I.2020 target I.2021 target YoY BY BRANDS Res eserved 663. 663.3 685. 685.6 3% 3% Cropp 148. 148.8 170. 170.9 15% 15% Hou

use

127. 127.0 153. 153.9 21% 21% Mo Mohi hito 112. 112.1 115. 115.3 3% 3% Sinsay 174. 174.8 301. 301.2 72% 72% Out Outle letys 6. 6.8 5. 5.6

18

18% BY REGIONS Pola Poland 531 531.6 552 552.8 4% 4% Eur Europe 368. 368.4 450. 450.3 22% 22% CIS 324. 324.4 420. 420.9 30% 30% ME ME 8. 8.4 8. 8.4 0% 0% TOTAL 1,232.8 1,432.4 16%

Co

Contin inuation of

f dyn

ynamic c flo floorspace gro growths in 202 2020/21 – 16% 16% YoY

Y.
En

Entry wit ith own sto stores on 1 1 new ma market – Northern Macedonia (2H20).

At

t th the en end of

f 202

2020/21 Res Reserved tr traditio ional stor stores sho should be e pres esent in 26 26 co countries.

202

2020/21 targ targets ts:

emphasis on
n dev

evelo lopm pment of

f smalle

ller brands: : Sinsay, , Hou

use and

nd Cropp pp,

sele

lecti tive floorspa pace growth h in n Po Pola land,

con
nti

tinu nuation of

f growths in

n Eur Europe (em emph phasis on

n SEE

EE), ),

acc

cceler eration of

f floo
orspace dev

evelo lopmen ent in n CIS. .

Pla

lanned 20 2020 20/2 /21 (12 mo months) cap capex at at c. PLN LN 1, 1,120m 0m, , up up c.

c. 22%

22% YoY

Y.

. Pla lanned stor store cap capex at t c.

c. PLN

LN 76 760m 0m, HQ HQs ou

utl

tlays at at PLN LN c.

c. 110

110m, log logistics cs

u
utl

tlays at t c.

c. PLN

LN 20 200m and IT T at at c. . PLN LN 50 50m.

SLIDE 32

32

G L O B A L A S P I R A T I O N S

Fast Sinsay development

Strong reception of the brand by customers.

Possibility to grow in Poland (smaller cities) and abroad. Broadened offering suited for larger stores.

SLIDE 33

33

G L O B A L A S P I R A T I O N S

RFiD key to effective selling

RFID IMPLEMENTATION AT RESERVED IN 2019. IN 2020 AT CROPP, HOUSE AND MOHITO. At least half of the costs of clips should be covered by HR reductions. higher revenues/ m2 4% lower HR/m2 at Reserved Total costs of RFID clips in 2020 at c. PLN 60m. Total costs of RFID clips in 2019 at c. PLN 30m. DELIVERIES FROM STORES TO CUSTOMERS FROM 2020.

SLIDE 34

34

G L O B A L A S P I R A T I O N S

Automation of Brześć Kujawski centre

Initial version 100,000 m2 120,000 m2 PLN 400 m PLN 860 m

The most modern automation solutions. Higher efficiency, allowing to deal with fast growth

f Reserved and Sinsay.

Lower variable logistics costs after installation.

Current version

Higher cost of construction due to pick-up in HR and building materials costs.

SLIDE 35

35

G L O B A L A S P I R A T I O N S

Investments in LPP’s future

PLN m 2020/21 2021/22 2022/23 2020/21-2022/23

Stores 760 600 500 1,860 Stores in Poland and abroad 760 600 500 1,860 Offices 110 70 180 New office Gdańsk Łąkowa - Building 2 40 40 New office Gdańsk Łąkowa - Building 3 70 70 140 Logistics 200 500 160 860 New DC Brześć Kujawski 200 500 160 860 IT & others 50 50 50 150 TOTAL 1,120 1,220 710 3,050

SLIDE 36

36

G L O B A L A S P I R A T I O N S

Diversified financing sources

PLN m Own sources Bank loans Bonds 2020/21-2022/23 Stores

1,860 1,860 Stores in Poland and abroad 1,860 1,860 Offices 54 126 180 New office Gdańsk Łąkowa - Building 2 12 28 40 New office Gdańsk Łąkowa - Building 3 42 98 140 Logistics 560 300 860 New DC Brześć Kujawski 560 300 860 IT & others 150 150 TOTAL 2,064 686 300 3,050

SLIDE 37

37

G L O B A L A S P I R A T I O N S

Distribution centre financing

PLN m 2020/21 2021/22 2022/23 2020/21-2022/23 New distribution centre – Brześć Kujawski Building

200 120 320 Machinery & automation 380 160 540 TOTAL 200 500 160 860

PLN m Bank loans Bonds 2020/21-2022/23 New distribution centre – Brześć Kujawski Building

240 80 320 Machinery & automation 320 220 540 TOTAL 560 300 860

Bank loan for the building granted. Bank loan for machinery backed by Atradius (the Export Credit Agency of the Netherlands).

SLIDE 38

38

G L O B A L A S P I R A T I O N S

Corporate bonds – key details

* Qualified investors in the meaning of art. 2 letter e) of the Regulation (EU) 2017/1129 of the European Parliament and of the

Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.

Issuer LPP SA Type of instrument

Senior bearer bonds

Issue amount up to PLN 300,000,000 Tenor of the bonds 5 years Offering

proposal to acquire bonds addressed solely to qualified investors *
no obligation to publish issue prospectus or information memorandum subject to KNF approval

Purpose of issuance General corporate purposes Security Bonds will be unsecured Issue rating Bonds will not be rated Interest rate

floating (WIBOR 6M plus margin set in the book-building process),
6-month coupon payments

Nominal value of one bond PLN 1,000 Settlement, deposit KDPW S.A. Listing GPW Alternative Trading System or Bondspot ASO (Catalyst) at the issue date Dealers Bank Pekao S.A., BNP Paribas Bank Polska SA, PKO Bank Polski SA, Santander Bank Polska SA

THE ISSUER PUBLISHED THE INFORMATION ON THE PLANNED BOND ISSUANCE IN ITS CURRENT REPORT 16/2019 DATED 13.09.2019. INFORMATION PRESENTED HEREIN IS NOT DISCLOSED AS A PART OF MARKET SOUNDING IN THE MEANING OF ART.11 OF REGULATION (EU) NO 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 16 APRIL 2014 ON MARKET ABUSE (MARKET ABUSE REGULATION) AND REPEALING DIRECTIVE 2003/6/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AND COMMISSION DIRECTIVES 2003/124/EC, 2003/125/EC AND 2004/72/EC. IN PARTICULAR BY PRESENTING THIS INFORMATION NEITHER THE ISSUER NOR THE DEALER AIM AT GAUGING THE INTEREST OF POTENTIAL INVESTORS IN A POSSIBLE TRANSACTION AND THE CONDITIONS RELATING TO IT.

SLIDE 39

39

G L O B A L A S P I R A T I O N S

Corporate bond issuance timeline

roadshow distribution of invitations of declarations to acquire bonds start of book-building close of book-building Issuer’s decision on bond issuance and its final parameters (amount, margin) distribution of Proposals to Acquire Bonds to investors deadline for submission of Acceptance of the Proposal to Acquire Bonds issuance date, settlement (DvP) via KDPW introduction to trading on ASO Catalyst 6.XI.2019 12.XI.2019 19.XI.2019 20.XI.2019 21.XI.2019 22.XI.2019 26.XI.2019 12.XII.2019

SLIDE 40

40

G L O B A L A S P I R A T I O N S

Opportunities and risks for 2020/21

strong collections of all

brands (positive LFL in each brand),

further e-commerce

development on new markets,

adjustment of prices

to FX volatility,

RFID fully implemented

in Reserved, working in Cropp, House and Mohito

volatility and level
f US$, RUB, UAH

and EUR,

growing HR costs,
further restrictions on

Sunday trade ban in Poland

Chances Risks Targets

Double-digit revenue growth. EBIT improvement.

SLIDE 41

41

G L O B A L A S P I R A T I O N S

Q&A

SLIDE 42

42

G L O B A L A S P I R A T I O N S

Back-up

SLIDE 43

43

G L O B A L A S P I R A T I O N S

Network development

Floorspace (ths m2) 30.09.2017 31.12.2017 31.03.2018 30.06.2018 30.09.2018 31.12.2018 31.03.2019 30.06.2019 30.09.2019 Reserved 526.8 562.3 561.0 582.2 584.9 616.7 609.7 631.6 643.1 Pol

land

247.9 266.8 264.9 264.7 259.3 273.3 263.3 266.2 270.4 Europe 157.6 160.8 162.2 178.1 182.3 191.7 192.9 215.1 215.3 CIS 114.7 128.1 127.3 132.8 136.0 144.6 146.4 143.2 149.0 ME ME 6.6 6.6 6.6 6.6 7.3 7.1 7.1 7.1 8.4 Cropp 121.4 127.2 127.7 130.1 126.4 134.0 134.3 141.4 142.1 Pol

land

64.9 65.7 65.7 67.9 64.2 66.5 64.2 65.0 64.1 Europe 21.2 22.3 22.1 22.6 22.8 24.9 27.0 30.3 31.6 CIS 35.3 39.3 39.8 39.6 39.3 42.6 43.1 46.1 46.4 House 105.6 110.6 110.9 113.0 112.4 116.2 115.0 122.2 123.1 Pol

land

64.0 65.0 64.9 66.8 65.9 67.3 64.5 66.7 66.6 Europe 16.2 17.1 17.2 17.0 17.0 18.9 21.0 24.9 26.5 CIS 25.4 28.6 28.7 29.2 29.4 30.1 29.5 30.6 30.0 Mohito 98.5 103.8 103.4 105.5 106.2 109.4 108.1 108.8 111.9 Pol

land

52.1 53.0 52.3 53.7 52.9 54.1 52.3 52.3 53.3 Europe 18.1 19.7 20.1 21.2 22.2 23.5 24.7 26.4 28.0 CIS 28.4 31.1 31.0 30.6 31.1 31.8 31.0 30.1 30.6 Sinsay 76.0 84.6 85.8 92.8 94.7 103.0 107.3 120.0 137.7 Pol

land

50.9 53.2 53.3 56.0 56.4 60.1 61.3 63.6 69.0 Europe 10.9 12.8 13.1 15.9 17.3 20.2 21.7 30.4 36.4 CIS 14.2 18.7 19.4 21.0 21.0 22.7 24.3 26.1 32.3 Tallinder (Poland only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Outlets 11.6 12.1 12.1 10.6 10.8 12.0 11.0 10.2 10.1 Total by regions Pol

land

490.5 514.0 511.5 518.0 507.2 529.5 513.9 521.2 529.7 Europe 224.1 232.8 235.0 254.9 261.8 279.4 287.4 327.1 337.8 CIS 218.7 247.3 247.8 254.7 259.0 275.4 277.1 278.9 292.1 ME ME 6.6 6.6 6.6 6.6 7.3 7.1 7.1 7.1 8.4 TOTAL 939.9 1,000.6 1,000.9 1,034.2 1,035.4 1,091.3 1,085.4 1,134.3 1,168.0

SLIDE 44

44

G L O B A L A S P I R A T I O N S

End-2019 network development details

Floorspace (ths m2) 31.12.2018 31.12.2019

Nom. growth.

YoY growth Reserved 616.7 672.1 55.4 9% Poland 273.3 274.7 1.4 1% Europe 191.7 226.7 34.9 18% CIS 144.6 162.3 17.7 12% ME 7.1 8.4 1.4 19% Cropp 134.0 151.2 17.2 13% Poland 66.5 64.8

1.7
3%

Europe 24.9 35.4 10.6 43% CIS 42.6 50.9 8.3 20% House 116.2 129.9 13.6 12% Poland 67.3 67.8 0.6 1% Europe 18.9 30.3 11.4 60% CIS 30.1 31.7 1.6 5% Mohito 109.4 114.0 4.6 4% Poland 54.1 53.0

1.1
2%

Europe 23.5 30.1 6.5 28% CIS 31.8 30.9

0.8
3%

Sinsay 103.0 175.5 72.5 70% Poland 60.1 80.9 20.8 35% Europe 20.2 50.7 30.5 151% CIS 22.7 43.9 21.2 93% Outlets 12.0 9.0

2.9
25%

Poland 8.3 4.4

3.9
47%

Europe 0.2 0.0

0.2
100%

CIS 3.5 4.6 1.1 30% TOTAL 1,091.3 1,251.6 160.3 15%

No. of STORES

31.12.2018 31.12.2019

Nom. growth

YoY growth Reserved 464 462

2

0% Poland 216 205

11
5%

Europe 127 135 8 6% CIS 114 114 0% ME 7 8 1 14% Cropp 373 370

3
1%

Poland 200 183

17
9%

Europe 69 79 10 14% CIS 104 108 4 4% House 332 326

6
2%

Poland 200 188

12
6%

Europe 54 64 10 19% CIS 78 74

4
5%

Mohito 296 291

5
2%

Poland 156 148

8
5%

Europe 60 67 7 12% CIS 80 76

4
5%

Sinsay 272 330 58 21% Poland 165 178 13 8% Europe 51 79 28 55% CIS 56 73 17 30% Outlets 28 16

12
43%

Poland 22 11

11
50%

Europe 1

1
100%

CIS 5 5 0% TOTAL 1,765 1,795 30 2%

SLIDE 45

45

G L O B A L A S P I R A T I O N S

End I.2020 network development details

Floorspace (ths m2) 31.12.2018 31.01.2020

Nom. growth.

YoY growth Reserved 616.7 663.3 46.6 8% Poland 273.3 269.7

3.6
1%

Europe 191.7 222.9 31.1 16% CIS 144.6 162.3 17.7 12% ME 7.1 8.4 1.4 19% Cropp 134.0 148.8 14.8 11% Poland 66.5 62.9

3.6
5%

Europe 24.9 34.9 10.1 40% CIS 42.6 50.9 8.3 20% House 116.2 127.0 10.7 9% Poland 67.3 65.2

2.1
3%

Europe 18.9 30.1 11.2 59% CIS 30.1 31.7 1.6 5% Mohito 109.4 112.1 2.7 2% Poland 54.1 51.4

2.6
5%

Europe 23.5 29.7 6.2 26% CIS 31.8 30.9

0.8
3%

Sinsay 103.0 174.8 71.8 70% Poland 60.1

80.1

20.0 33% Europe 20.2

50.8

30.6 152% CIS 22.7

43.9

21.2 93% Outlets 12.0 6.8

5.1
43%

Poland 8.3 2.2

6.0
73%

Europe 0.2 0.0

0.2
100%

CIS 3.5 4.6 1.1 30% TOTAL 1,091.3 1,232.8 141.5 13%

No. of STORES

31.12.2018 31.01.2020

Nom. growth

YoY growth Reserved 464 451

13
3%

Poland 216 199

17
8%

Europe 127 133 6 5% CIS 114 111

3
3%

ME 7 8 1 14% Cropp 373 361

12
3%

Poland 200 176

24
12%

Europe 69 77 8 12% CIS 104 108 4 4% House 332 316

16
5%

Poland 200 179

21
11%

Europe 54 63 9 17% CIS 78 74

4
5%

Mohito 296 284

12
4%

Poland 156 142

14
9%

Europe 60 66 6 10% CIS 80 76

4
5%

Sinsay 272 326 54 20% Poland 165 174 9 5% Europe 51 79 28 55% CIS 56 73 17 30% Outlets 28 9

19
68%

Poland 22 4

18
82%

Europe 1

1
100%

CIS 5 5 0% TOTAL 1,765 1,747

18
1%

SLIDE 46

46

G L O B A L A S P I R A T I O N S

Changes in group 3Q19 floorspace

Dynamic 3Q

3Q19 flo floorspace dev evelopment, t, esp especia ially abroad. . Dev evelopment in n Eur Europe res esulted ma mainly fro from op

penings in

n SEE EE eg

eg. Slo

lovenia, Cr Croatia ia, Bul

Bulgaria. Stab

table YoY

Y flo

loorspace in Wes estern Eur Europe.

CI

CIS dev evelopment t ma mainly via via op

penings in Ru

Russ ssia and nd Uk

Ukraine. Gr

Growth in th the e ME E due ue to to a ne new fr franchise stor store in Isra srael.

In

n 3Q19 Sin insay added th the mo most flo floorspace among brands. Res Reserved ranked sec second, in n no nominal ter terms. .

CHA CHANGE IN IN FL FLOORSPACE BY BY BR BRANDS (th ths m2) 2) CHA CHANGE IN IN FL FLOORSPACE BY BY REG REGIONS (th ths m2) 2)

1,134.3 +0.7 +11.6 +17.7 +3.0 +0.9 1,168.0

0.1

1,168.0 1,134.3 +8.5 +10.7 +13.2 +1.4 +33.8 ths m2 +33.8 ths m2

2Q19 Poland Europe CIS ME 3Q19 2Q19 Reserved Cropp House Mohito Sinsay Outlets 3Q19

SLIDE 47

47

G L O B A L A S P I R A T I O N S

3Q19 revenue growth contributors

PLN m 3Q18 3Q19 YoY LPP GROUP 2,043.9 2,348.2 14.9% Reserved PL 427.6 390.5

8.7%

Reserved EX 490.2 552.9 12.8% Cropp PL 135.5 132.9

1.9%

Cropp EX 153.5 192.3 25.2% House PL 146.1 148.0 1.2% House EX 91.2 117.8 29.2% Mohito PL 96.8 99.5 2.8% Mohito EX 96.5 112.0 16.1% Sinsay PL 127.6 153.1 20.0% Sinsay EX 81.2 141.8 74.7% E-commerce 150.5 226.6 50.6% Other 47.2 80.7 71.1%

2 348 2 044 +26 +36 +28 +18

2,348 2,044

+40 +130 +132 +2 +76 +34 +86

REV REVENUE GROWTH BY BY BR BRANDS REV REVENUE GROWTH BY BY REG REGIONS

PLN m PLN m 3Q18 Poland Europe CIS ME 3Q19

SLIDE 48

48

G L O B A L A S P I R A T I O N S

9M 9M19 19 revenue growth contributors

PLN m 9M18 9M19 YoY LPP GROUP 5,674.0 6,390.0 12.6% Reserved PL 1,242.7 1,174.4

5.5%

Reserved EX 1,324.1 1,500.9 13.4% Cropp PL 373.8 366.0

2.1%

Cropp EX 411.9 485.6 17.9% House PL 392.9 421.5 7.3% House EX 237.0 304.2 28.3% Mohito PL 293.7 289.9

1.3%

Mohito EX 274.3 308.2 12.4% Sinsay PL 352.2 412.0 17.0% Sinsay EX 201.1 326.6 62.4% E-commerce 459.8 676.9 47.2% Other 110.6 123.8 12.1%

6,390 5,674 +108 +66 +96 +30

6,390 5,674

+86 +346 +278 +7 +217 +13 +185

REV REVENUE GROWTH BY BY BR BRANDS

PLN m PLN m

REV REVENUE GROWTH BY BY REG REGIONS

9M18 Poland Europe CIS ME 9M19

SLIDE 49

49

G L O B A L A S P I R A T I O N S

3Q19 revenue and COGS split

3Q19 REV REVENUES BY BY REG REGIONS (PLN LN m) m) 3Q19 PUR URCHASES BY BY REG REGION (PLN LN m) m) TO TOP5 REV REVENUES BY BY CO COUNTRIES IN N 3Q 3Q19 (PLN LN m) m)

Pol Poland rem remains our

ur most

important mar arket in 3Q 3Q19.

China 43% Far East 44% Turkey 8% Poland 3% Other 2% Poland 46% Europe 27% CIS 27% ME 0% 89 110 128 492 1,084 Romania Czech Rep. Ukraine Russia Poland

SLIDE 50

50

G L O B A L A S P I R A T I O N S

9M19 revenue and COGS split

9M 9M19 REV REVENUES BY BY RE REGIONS (PLN LN m) m) 9M 9M19 19 PUR URCHASES BY BY REG REGION (PLN LN m) m) TO TOP5 REV REVENUES BY BY CO COUNTRIES IN N 9M 9M19 19 (PLN LN m)

Pol Poland rem remains our

ur most

important mar arket in 9M 9M19.

China 38% Far East 50% Turkey 8% Poland 3% Other 2% Poland 48% Europe 27% CIS 25% ME 0% 252 312 322 1,213 3,090 Romania Czech Rep. Ukraine Russia Poland

SLIDE 51

51

G L O B A L A S P I R A T I O N S

Until the end of 2018 we showed selling costs and general & administrative expenses. Since 2019, instead

f selling costs, we

have decided to show costs of stores, e-commerce and logistics which are the most important SG&A costs. Overheads consists now of marketing costs, back-office, selling and product divisions. The sum of SG&A costs has not changed.

A new breakdown of SG&A costs

Reasons for change: consistency of cost items in financial statements with those in management reports, superior reflection of the business model, an easier way to show the impact of IFRS16.

SLIDE 52

52

G L O B A L A S P I R A T I O N S 1,895 2,002 715 824 9M18 IAS17 9M19 IFRS16 Costs of stores HQ & e-commerce 596 628 620 639 636 660 641 669 693 179 234 200 252 263 262 233 280 311 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Costs of stores HQ & e-commerce

Costs of stores and HQs

Co

Costs of

f sto

stores en encompass co cost sts of

f ow
wn sto

stores (rentals, per ersonnel and nd ot

ther) as

s wel ell as s co cost sts of

f fra

franchise stor stores in n Pol

land. Sto

tores in th the e Middle Ea East and Be Belarus do

no

not t ha have any ma material ef effect on

n SG&

G&A co costs sts.

Co

Costs of

f sto

stores  low lower gro growth in 3Q19 - hi higher flo floorspace, but ut co cost t co contr trol.

HQ

HQ co costs sts  YoY

Y gr

growth in 3Q19 due ue to to e-commerce for foreign exp expansion, hi higher co cost sts of

f fo

foreign log logistics and gr growing ma marketin ing co costs ts.

SG SG&A COS COSTS (PLN PLN m, IFR IFRS16 16 sin ince 1Q 1Q19)

+6% YoY +15% YoY 2,611 2,827

SG SG&A COS COSTS

(PLN LN m) m)

SLIDE 53

53

G L O B A L A S P I R A T I O N S

3Q19 other operating and net financial lines

OTH OTHER OPE OPERATING ACT ACTIVITY NET ET FINA FINANCIAL L ACT ACTIVIT ITY

PLN m 3Q18 3Q19

OTHER OPERATING REVENUES 3.1 9.6 Inventory excess 0.4 3.8 Gain on sale of assets, write-ups 0.8 1.9 OTHER OPERATING COSTS 18.5 29.4 Write-offs 2.5 9.1 Inventory losses 11.8 16.1 Donations and liquidation 4.8 2.5

OTHER OPERATING ACTIVITY

15.4
19.8

PLN m 3Q18 3Q19

FINANCIAL REVENUES

1.5
29.4

FX gains

4.5
30.9

Interest 2.9 1.6 FINANCIAL COSTS 17.7 67.7 FX losses 12.8 33.0 Interest 4.0 31.0 Fees and charges 1.0 1.0

NET FINANCIAL ACTIVITY

19.2
97.1

Hi Higher le level of

f ot
ther op
peratin

ing revenues due ue to to co compensatio ions fo for stol stolen go goods and nd ot

ther revenues

rel elated to to RFI RFID (L (LPP sel sells clip clips to to tec technology provider, fr from whom th the e clip clips are purc urchased by y fa factories).

PL PLN 64. 64.0m of

f FX los
sses (3Q

3Q18 18: : PL PLN 17. 17.2m los

sses),

, out

ut of
f whi

hich PL PLN 10. 10.0m gains on

n rubb

ubble le and nd hr hryv yvna (3Q1 3Q18: : PL PLN 10. 10.5m los

sses),

, PL PLN 42. 42.7m of

f los
sses on
n US

US$ (3Q 3Q18 18: : PL PLN 4. 4.0m 0m los

sses),

, PL PLN 7. 7.1m 1m los

sses on
n ot
ther currencies (EUR,

, RON, , HUF, , CZK ZK) and nd PL PLN 24. 24.1m los

sses on
n FX from iFRS16.

6. Addi dditional l IFRS16 6 int nterest amounte ted to

PL

PLN 25. 25.3m m in n 3Q19. 3Q19.

SLIDE 54

54

G L O B A L A S P I R A T I O N S

9M 9M19 19 other operating and net financial lines

OTH OTHER OPE OPERATING ACT ACTIVITY NET ET FINA FINANCIAL L ACT ACTIVIT ITY

PLN m 9M18 9M19

OTHER OPERATING REVENUES 8.6 27.5 Inventory excess 2.7 6.1 Gain on sale of assets, write-ups 0.8 9.4 OTHER OPERATING COSTS 55.2 78.2 Write-offs 10.6 9.1 Inventory losses 29.0 45.7 Donations and liquidation 11.2 11.2

OTHER OPERATING ACTIVITY

46.6
50.7

PLN m 9M18 9M19

FINANCIAL REVENUES 5.3 7.1 FX gains 0.0 0.0 Interest 5.2 7.1 FINANCIAL COSTS 25.4 131.6 FX losses 12.8 33.0 Interest 10.0 94.0 Fees and charges 2.7 1.9

NET FINANCIAL ACTIVITY

20.1
124.5

Hig Higher le level of

f ot
ther op
peratin

ing inc ncome due ue to to reversal

f
f rec

eceivables writ ite-offs in n 2Q 2Q19, insurance in 3Q 3Q19 and nd

t
ther revenues rel

elated to to RF RFID (PLN 13.3 13.3m in 9M 9M19 19).

PL PLN 33. 33.0m on

n FX los
sses (3Q

3Q18: 8: PL PLN 12. 12.8m los

sses),

, incl ncluding PL PLN 12. 12.7m gains on

n ruble

uble and nd hr hryv yvnia (3Q 3Q18 18: : PL PLN 24. 24.5m los

sses),

PL PLN 40. 40.0 0 los

sses on
n US$ (3Q1

3Q18: : PL PLN 15. 15.3m gains), , PL PLN 8. 8.8m 8m los

sses
n
n ot
ther

er currencies (EUR, , RON, , HUF, , CZK) and nd PL PLN 3. 3.1m 1m FX gains from IFRS16. Addi dditional l IFRS16 6 int nterest amounte ted to

PL

PLN 75 75.7m in n 9M 9M19 19.

SLIDE 55

55

G L O B A L A S P I R A T I O N S

IFRS16 impact summary

EBITDA EBIT NET INCOME Taking out 35% of rentals (PLN 145.6m) while replacing these with amortisation of right of use asset. Taking out 40% of rentals (PLN 422.5m) while replacing these with amortisation of right of use asset. Financial costs related to the asset (-PLN 25.3m) and FX losses (-PLN 24.1m). Financial costs related to the asset (-PLN 75.7m) and FX gains (+PLN 3.1m). PLN 152.2m of additional amortisation

f right of use asset.

3Q19 PLN 439.7m of additional amortisation

f right of use asset.

9M19 3Q19 9M19 3Q19 9M19

SLIDE 56

56

G L O B A L A S P I R A T I O N S

IFRS16 impact in 3Q19 Q19

3Q19 IFRS16 IFRS16 adjustments 3Q19 IAS17 rentals D&A interest FX differences tax Revenues 2,348.2 2,348.2 Gross profit 1,164.3 1,164.3 % gross profit margin 49.6% 49.6% SG&A costs 1,004.0 145.6

152.2

997.4 Other operating line

19.8
19.8

EBIT 140.5

145.6

152.2 0.0 0.0 0.0 147.1 Net financial activity

97.1

25.3 24.1

47.6

Pre-tax profit/ loss 43.4

145.6

152.2 25.3 24.1 0.0 99.5 Tax 23.8 10.7 34.5 Net income/ loss 19.6

145.6

152.2 25.3 24.1

10.7

65.0 D&A 255.5

152.2

103.3 EBITDA 396.0

145.6

0.0 0.0 0.0 0.0 250.4

SLIDE 57

57

G L O B A L A S P I R A T I O N S

IFRS16 impact in 9M 9M19 19

9M19 IFRS16 IFRS16 adjustments 9M19 IAS17 rentals D&A interest FX differences tax Revenues 6,390.0 6.390.0 Gross profit 3,270.1 3,270.1 % gross profit margin 51.2% 51.2% SG&A costs 2,826.6 422,5

439.7

2,809.4 Other operating line

50.7
50.7

EBIT 392.8

422.5

439.7 0.0 0.0 0.0 410.1 Net financial activity

124.5

75.7

3.1
51.9

Pre-tax profit/ loss 268.4

422.5

439.7 75.7

3.1

0.0 358.2 Tax 157.8 17.1 175.0 Net income/ loss 110.5

422.5

439.7 75.7

3.1
17.1

183.2 D&A 730.2

439.7

290.4 EBITDA 1,123.0

422.5

0.0 0.0 0.0 0.0 700.5

SLIDE 58

58

G L O B A L A S P I R A T I O N S

Historical quarterly results

PLN m

1Q18 IAS17 1Q19 IFRS16 YoY 1Q19 IAS17 2Q18 IAS17 2Q19 IFRS16 YoY 2Q19 IAS17 3Q18 IAS17 3Q19 IFRS16 YoY 3Q19 IAS17

Revenues

1,580.4 1.827.7 15.7% 1,827.7 2,049.7 2,214.1 8.0% 2,214.1 2,043.9 2,348.2 14.9% 2,348.2

Gross profit on sales

712.8 793.0 11.2% 793.0 1,224.5 1,312.8 7.2% 1,312.8 1,043.4 1,164.3 11.6% 1,164.3

Gross profit margin

45.1% 43.4%

1.7pp.

43.4% 59.7% 59.3%

0.4pp.

59.3% 51.0% 49.6%

1.5pp.

49.6%

SG&A costs

820.5 874.0 6.5% 882.7 891.6 948.6 6.4% 929.2 898.8 1,004.0 11.7% 997.4

Other operating line

10.1
19.1
19.1
21.1
11.7
11.7
15.4
19.8
19.8

EBIT

117.7
100.2
14.9%
108.9

311.8 352.5 13.1% 371.8 129.2 140.5 8.7% 147.1

EBIT margin

7.4%
5.5%

2.0pp.

6.0%

15.2% 15.9% 0.7pp. 16.8% 6.3% 6.0%

0.3pp.

6.3%

Net financial activity

14.5

16.6
5.0
15.5
10.8

0.8

19.2
97.1
47.6

Pre-tax profit

103.2
116.9

13.2%

113.9

296.3 341.8 15.4% 372.6 110.0 43.4

60.5%

99.5

Tax

1.6

2.3

17.5 90.2 136.3 123.0 18.4 23.8 34.5

Net income

104.8
114.6

9.4%

131.4

206.1 205.5

0.3%

249.6 91.6 19.6

78.6%

65.0

Net income margin

6.6%
6.3%

0.4pp.

7.2%

10.1% 9.3%

0.8pp.

11.3% 4.5% 0.8%

3.6pp.

2.8%

SLIDE 59

59

G L O B A L A S P I R A T I O N S

Cash flows

Operatin

ing cas cash flo flow  hi higher pos

sit

itiv ive lev level, yet yet low lower YoY

Y due

ue to to inventory pick-up up.

Investin

ing cas cash flo flow  hig igher YoY cap capex, but t low lower net et sa sale of f mo money ma market t fu funds.

Fin

Financing cas cash flo flows  deb ebt t rep epayment and nd fin financial lea lease payments ts (IFRS16).

PLN

LN 1. 1.4bn in n op

pen cr

cred edit t lin lines use used fo for lett letters of

f cr

credits ts, gu guarantees and nd ov

verdrafts

ts.

3Q1 Q19 CA CASH GEN ENERATION

(PLN LN m) m)

3Q1 Q19 CA CASH FL FLOW OWS

(PLN LN m) m) 863 +43 921 +255

63

+106

237

+86

132

430 383

192
247
28
86

209 50 3Q18 IAS17 3Q19 IFRS16 Operating CF Investing CF Financing CF Total CF

SLIDE 60

60

G L O B A L A S P I R A T I O N S

Balance sheet increasingly strong

IFR

FRS16 im impact: : ch change fr from op

peratin

ing lea leases to to fin financial on

nes – cr

creatio ion of

f rig

ight t of

f use

use ass ssets and fin finance le lease lia liabilitie ies.

YoY
Y gr

growth in fi fixed ass ssets due ue to to ne network dev evelopment t and nd investments in log logistic ics and nd HQ HQs.

YoY
Y gr

growth in in int ntangibles due ue to to investments in IT. T.

Hi

Higher YoY invento tory due ue to to fa faster rec eceipt t of

f

Aut utumn/Winter co collectio ion and nd Sin insay dev evelopment.

YoY
Y gr

growth in rec eceivables res esults fro from dow

wnpayments

ts for for distr tribution cen centre.

Hig

igher cas cash due to to str strong cas cash ge generatio ion.

YoY
Y gr

growth in tr trade payables due ue to to sup supplier fin financing programme.

YoY
Y fa

fall in n lon long-term deb ebt t due ue to to rep epayments ts of

f

investment t loa loans (on sch schedule). ).

PLN m

3Q18 4Q18 3Q19

Non-current assets

2,238.1 2,417.8 5,636.4

fixed assets

1,648.3 1,818.3 2,139.6

intangibles (incl. goodwill)

368.1 376.7 402.2

right of use assets (IFRS16) 0.0

0.0 2,955.7

Current assets

2,951.5 2,963.1 3,357.9

inventory

1,608.8 1,590.4 2,023.0

trade receivables

129.0 121.7 154.5

cash and equivalents

851.2 1,045.0 920.8

Total assets

5,189.6 5,380.8 8,994.3

Equity

2,555.3 2,860.5 2,939.1

Long-term liabilities

315.3 346.1 2,708.3

interest bearing debt

101.9 88.6 47.6

financial leases (IFRS16)

0.0 0.0 2,544.0

Short-term liabilities

2,319.0 2,174.1 3,346.9

trade liabilities

1,810.2 1,557.4 2,178.8

interest bearing debt

224.1 203.2 277.3

financial leases (IFRS16)

0.0 0.0 631.9

Total liabilities and equity

5,189.6 5,380.8 8,994.3

SLIDE 61

61

G L O B A L A S P I R A T I O N S

AN ANCHOR BRAND WITH A BROAD CUSTOMER BASE OFFERING THE LATEST TRENDS.

WOMEN, MEN AND CHILDREN 1998 YEAR OF LAUNCH

3Q18 3Q19 YoY Number of stores 451 453 + 2 Floorspace (ths m2) 584.9 643.1 10% Average store space (m2) 1,297 1,420 9%

REV REVENUES (PLN PLN m)

825 957 728 921 918 1,012 813 918 943 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 62

62

G L O B A L A S P I R A T I O N S

A STREETWEAR BRAND INSPIRED BY HIP-HOP AND POP-CULTURE.

TEENAGERS – BOYS AND GIRLS 2004 YEAR OF LAUNCH

3Q18 3Q19 YoY Number of stores 362 362 Floorspace (ths m2) 126.4 142.1 12% Average store space (m2) 349 392 12%

REV REVENUES (PLN PLN m)

302 320 210 287 289 334 233 293 325 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 63

63

G L O B A L A S P I R A T I O N S

OPTIMISTIC FASHION BRAND.

TEENAGERS (BOYS AND GIRLS) WHO LIKE BRAVE FASHION CHOICES. 2001 YEAR OF LAUNCH

3Q18 3Q19 YoY Number of stores 326 319

7

Floorspace (ths m2) 112.4 123.1 10% Average store space (m2) 345 386 12%

REV REVENUES (PLN PLN m)

205 261 170 223 237 290 204 256 266 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 64

64

G L O B A L A S P I R A T I O N S

A BRAND THAT COMBINES COMFORT AND ELEGANCE FOR BUSINESS AND INFORMAL MEETINGS.

YOUNG WOMEN 2008 YEAR OF LAUNCH

3Q18 3Q19 YoY Number of stores 291 290

1

Floorspace (ths m2) 106.2 111.9 5% Average store space (m2) 365 386 6%

REV REVENUES (PLN PLN m)

200 233 162 212 193 214 179 207 212

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 65

65

G L O B A L A S P I R A T I O N S

TEENAGERS – GIRLS ONLY 2013 YEAR OF LAUNCH

3Q18 3Q19 YoY Number of stores 256 302 + 46 Floorspace (ths m2) 94.7 137.7 45% Average store space (m2) 370 456 23%

REV REVENUES (PLN PLN m)

CLOTHES FOR EVERY DAY INSPIRATIONS AND ORIGINAL PARTY OUTFITS.

165 184 142 202 209 236 186 258 295

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

SLIDE 66

66

G L O B A L A S P I R A T I O N S

Glossary

Poland Ret Retail sales in Poland and other sales s of LPP PP SA. CE CEE Reg Region including: : Czech Rep Republic, , Slovakia, , Hungary. Baltic Reg Region including: : Lithuania, , Latvi via, , Estonia. CIS IS Reg Region including: : Ru Russi ssia, , Uk Ukraine, Bel elarus and from 2018 also so Kazakhstan. SEE Reg Region including: : Bulgaria, , Rom Romania, , Croatia, , Serbia, , from 2018 also so Slovenia and from 2019 B&H. WE WE Reg Region including Ger ermany and the e UK UK, , while from 2019 also so Fi Finland. ME ME Reg Region including: : Egyp ypt, , Qa Qatar, , Kuwait, , UAE UAE, , while from 2018 also so Israel. . Un Until mi mid-2017 the e regi egion also so en encompass ssed Saudi Arabia. Europe Reg Region including: CEE, , Baltic, , SEE and WE. EBIT BITDA EBIT BIT + depr epreciation from cash sh flow statement. Ave verage mo monthly reve evenues/m2 /m2 Re Reve venues of seg egment or brand / average working total floorsp space / 3. Ave verage mo monthly cost sts of own stores/m2 /m2 Qu Quarterly cost sts s of own stores / ave verage working floorsp space of own stores s (ie ie. . excluding all franchise stores which repr epresent c. . 4.2% % of the e working floorsp space) / 3. Ave verage mo monthly SG&A PLN/m /m2 Qu Quarterly SG SG&A cost sts/ / ave verage working total floorsp space excluding stores located in ME and Belarus / 3. Inve ventory/ / m2 m2 End of per period gr group inve ventory/ / total floorspace without franchise se stores in ME and Bel elarus. Cash sh turnover cyc ycle Rec Receivables (i (in days ys) plu plus s inve ventories (i (in days ys) mi minus s liabilities (i (in days ys). Calculations on average amo mounts s of rec eceivables, , inve ventories and liabilities.

SLIDE 67

DISTRIBUTION CENTRE LPP SA Tczewska 2 83-000 Pruszcz Gdański, Poland CONTACT FOR INVESTORS Email: LPP.investor.relations@lppsa.com CONTACT FOR MEDIA Email: media@lppsa.com CRACOW BRANCH LPP SA Bagrowa 7 30-733 Cracow, Poland

Tel. +48 12 39 25 000

GDAŃSK HQs LPP SA Łąkowa 39/44 80-769 Gdańsk, Poland

Tel. +48 58 76 96 900

Fax.+48 58 76 96 909 Email: lpp@lppsa.com