FY 2019 Investor Presentation | February 2020 1 Our sustainable - - PowerPoint PPT Presentation

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FY 2019 Investor Presentation | February 2020 1 Our sustainable - - PowerPoint PPT Presentation

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FY 2019 Investor Presentation | February 2020 1 Our sustainable growth model 2 Key elements defining our model VALUE 1 Trusted and reliable partner with a clear value proposition 2 Leading positions in attractive channels and ADDING

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FY 2019 Investor Presentation | February 2020

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Our sustainable growth model

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Key elements defining

  • ur model

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Trusted and reliable partner with a clear value proposition Entrepreneurial segments powered by our centralised Group platform Leading positions in attractive channels and specialised markets Track record of strong and consistent profitable growth Focused on organic growth complemented with strategic M&A

VALUE

distribution

ADDING

partner

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Linking suppliers and customers that are difficult to connect Delivering FMCG to the right place, at the right time

Differentiated sourcing Fully bonded supply chain Highly efficient logistical platform Regulatory expertise Supply chain excellence

Value proposition

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Three business segments with diversified activities

Distribution of bonded liquors and health & beauty products to specialty retailers and
  • nline end-customers
TURNOVER 2019

€ 1,408.2 m 69%

  • f Group turnover
Specialty distribution of FMCG products to maritime and remote markets TURNOVER 2019

€ 497.8 m 24%

  • f Group turnover
Specialty retail at high traffic airports and remote locations TURNOVER 2019

€ 140.0 m 7%

  • f Group turnover

65% 35% 46% 42% 12% 69% 31%

  • f Segment turnover
  • f Segment turnover
  • f Segment turnover
  • f Segment turnover
Health & Beauty Liquors
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Serving four fragmented key markets worldwide

Retail B2B

Empowering wholesalers and retailers

Value for money retailers, secondary channels and e-commerce platforms, underserved and duty-free markets

Remote

Partner in remote distribution

Caterers at remote industrial sites, peacekeeping missions, government and defence operations

Maritime

Serving complex end-markets

Ship suppliers and cruise lines

Retail B2C

Experienced in specialty retail

End-customers in (travel) retail outlets and on e-commerce platforms

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All powered by a centralised backbone

IT Distribution Legal & Compliance HR Finance & Control Safety & Security

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Selected niches exposed to attractive long term trends E-commerce

Globalisation Digitisation Selected distribution Market disruption Increasing compliance standards

Value retail Travel

Channel trends Market trends Our markets & channels

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573 677 816 845 964 1,152 1,338 1,274 1,404 1,632 1,831 9 58 38 65 103 114 148 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 acquisitive
  • rganic

Resulting in organic turnover growth complemented with selective M&A

Topbrands FragranceNet.com Capi UCVF Alcodis Discontinuation of non-premium-brand perfumes (in million €) Dutch GAAP IFRS Lagaay Rdam / Weeze
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products geographies markets

Selective M&A to expand our role in the value chain

2012 2017 2018 2019

Middle East expansion

Personal care Pharma ceuticals

Value Retail B2B Travel retail B2C E- commerce B2C USA 2015 EU

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Disciplined execution of our M&A strategy

FragrancetNet.com Expanding our footprint to the US, our role in the value chain and further growth in Health & Beauty Lagaay Group Adding to our single source supply offering to maritime and remote

  • perations

Airport shops Weeze & Rotterdam Adding to our position in regional airport retail within the EU

2018 2019 2020 & beyond

▪ Further build our position

in the value chain

▪ Targeted companies that

match our business model and entrepreneurial culture

▪ With potential for further
  • rganic growth
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FY 2019 Results

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Performance highlights FY 2019

Growth in Health & Beauty category

▪ Identified business opportunities in B2B distribution to value retail and e-commerce ▪ Reorganisation and expansion robotised infrastructure and automated processes for organic growth & roll out B2C model to EU ▪ Steps taken in roll out B2B model to US ▪ Resulting in 28.2% growth (11.3%

  • rganic) in this category

Unfavourable developments Asian markets

▪ Trade war and Hong Kong protests had an effect on demand for luxury products in Asia in 2019 ▪ Effect of these market circumstances became evident for the Group from Q3 onwards ▪ Advancing beyond the level we anticipated in the latter part of Q4 ▪ Gross profit for the year in both our Liquor category in Asia and our fast-moving consumer goods activities in the B&S Segment were impacted

Strong cash flow

▪ As a result of focus on maintaining volumes in Asia and continuous focus on working capital

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FY 2019 – Highlights

Cash flow

▪ Net cash from operations of € 114.7 M (2018: € 3.5 M) ▪ Inventory in days: 80 (2018: 92) ▪ Debtors in days: 37 (2018: 43)

EBITDA

▪ EBITDA of € 114.6 M ▪ Pre IFRS 16 EBITDA came in at € 104.6 M (2018: € 109.0 M)

Overall turnover growth

▪ Overall: 13.3% to € 1,978.8 M ▪ Organic: 4.9%

M&A

▪ FragranceNet contributed to HTG segment (9 months) ▪ Lagaay contributed to B&S segment (5 months) ▪ Airport shops Rotterdam & Weeze contributed to Retail segment (7 months)

Business segment contribution

▪ All business segments contributed to turnover growth individually ▪ HTG +17.7% | B&S +11.7% | Retail +2.5%
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▪ Good performance in Health & Beauty

from value retail and e-commerce markets in EU and USA

▪ Performance in Liquor Asia affected by
  • ngoing margin pressure; partly offset by

performance of Liquor Europe that was in line with expectations

Business segment performance FY 2019

▪ Performance improvements after Q2 did

not advance due to developments in Asian markets; anticipated growth did not materialise

▪ Staff costs in this segment reflect the

anticipated further volume growth, resulting in material EBITDA decline

▪ Performance Airport Electronics as

expected

▪ Contribution of Rotterdam & Weeze

airport

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Key figures FY 2019

▪ Turnover grew 13.3% ▪ Gross profit grew 12.2%, margin slightly decreased to 13.7% ▪ Acquisitions contributed positively to gross profit margin, offset by developments in Asian markets ▪ Increase in personnel costs primarily related to the full year consolidation of FragranceNet.com and the increase in staff costs in the B&S Segment

€ million (unless stated otherwise) FY 2019 reported FY 2019 Pre IFRS 16 FY 2018 reported Δ (%) reported Profit or loss account Turnover 1,978.8 1,978.8 1,746.5 13.3% Gross profit (margin) 271.9 13.7% 271.9 242.3 13.9% 12.2% EBITDA (margin) 114.6 5.8% 104.6 109.0 6.2% 5.1% Depreciation & amortisation 26.6 16.9 10.7 148.6% Profit before tax 77.5 78.2 90.8 (14.7%) Net profit 60.3 60.8 71.4 (15.5%) EPS (in euro) 0.56 0.72 (22.2%)
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HTG Key figures – category breakdown

Liquors

€ million FY 2019 FY 2018 Change Turnover 497.3 483.5 2.9% Gross profit 30.1 6.1% 42.1 8.7%
  • 28.5%
EBITDA 12.6 24.7
  • 48.9%
EBITDA Margin 2.5% 5.1%
  • 2.6%

Health & Beauty

€ million FY 2019 FY 2018 Change Turnover 914.2 713.1 28.2% Gross profit 143.3 15.7% 104.7 14.7% 36.9% EBITDA 76.5 56.4 35.6% EBITDA Margin 8.4% 7.9% 0.5%

Liquors ▪ Impact of the USA – China trade war and turmoil in Hong Kong on

  • ur Liquor category became

evident in Q3 and amplified in Q4. ▪ Our Liquor category in Europe realised growth in line with expectations. Health & Beauty ▪ Increased focus and demand from the value retail in Europe and Health & Beauty markets in Europe, Asia and USA.

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B&S key figures – FY 2019

FY

€ million FY 2019 FY 2018 Change Turnover 497.8 445.6 11.7% Gross profit 60.5 12.2% 59.3 13.3% 1.9% EBITDA 19.3 21.4
  • 9.8%
EBITDA margin 3.9% 4.8%
  • 0.9%
EBITDA pre IFRS 16 13.9 21.4
  • 35.0%
EBITDA margin pre IFRS 16 2.8% 4.8%
  • 2.0%

▪ 11.7% turnover growth for FY 2019 ▪ Focus on serving volume contracts resulted turnover growth for the B&S Segment; ▪ Gross profit margin amounted to 12.1% (FY 2018: 13.3%) ▪ EBITDA margin decreased to 3.9%. Mainly as the result of declining gross margin and increased staff cost.

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Retail key figures – FY 2019

FY

€ million FY 2019 FY 2018 Change Turnover 140.0 136.6 2.5% Gross profit 35.9 25.6% 34.7 25.4% 3.7% EBITDA 9.5 10.6
  • 10.1%
EBITDA margin 6.8% 7.8%
  • 1.0%

▪ Turnover increase of 2.5% to € 140 M with an increased gross profit to € 35.9 M following acquired Airport shops and new shop openings ▪ EBITDA and EBITDA margin were impacted by staff costs and operating expenses related to the new shop

  • penings.
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Overall turnover growth analysis FY 2019

▪ The HTG and B&S segment are the main contributor to

  • rganic turnover growth;

▪ The inclusion of the acquisitions of FragranceNet.com, Lagaay Medical Group and airport retail Rotterdam and Weeze contributed € 148.4 M ▪ The development of the EUR/USD exchange rate had an effect of € 27.1 M on turnover

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Financial position

€ million (unless stated otherwise) FY 2019 FY 2018 Financial position Solvency ratio* 34.6% 34.3% Net debt * 296.0 312.7 Net debt / EBITDA * 2.8 2.9 Inventory in days 80 92 Working capital in days 95 113

▪ Net debt stood at € 296.0 M (FY 2018: € 312.7). Net debt post IFRS 16 stood at € 367.4 M. ▪ Net debt / EBITDA stood at 2.8 (FY 2018: 2.9). Post IFRS 16, net debt / EBITDA stood at 3.2

Notes * Excluding IFRS 16 lease liability.
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Net debt development FY 2019

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Working capital development

▪ Working capital reduction program initiated in the second part of 2019 resulted in decline of working capital and improvements of working capital in days to 95 from 113 ▪ Net cash from operations increased from € 3.5 M in 2018 to € 114.7 M in 2019

Trade payables Working capital (days) Inventory (days) Trade receivables (days) 104.6 90.8 472.2 (95) 492.8 (113) 375.6 (80) 377.9 (92) 201.3 (37) 205.7 (43) 2019 2018

€ million (unless stated otherwise)
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Outlook

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Outlook for 2020

Growth in Health & Beauty

▪ Positive on overall growth

  • pportunities specifically in EU and

USA

▪ Performance levels in this category

expected to increase

▪ Growth foreseen from geographical

expansion in B2B and B2C

Developments in Asian markets

▪ Optimistic that the circumstances in

Asian markets will not last throughout 2020

▪ Corona virus will have impact on

demand for luxury brands in Asia in H1 2020; impact on our performance to be determined

Focus for coming quarters

▪ Invest in key growth markets that

benefit from digitisation, retail re- design and supply chain simplification

▪ Solidify financial position by

  • perational effectiveness and cost

reductions through our investments in digitisation and automation

▪ Growing our business profitably by

executing our 2020-2022 strategic initiatives

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Strategic focus 2020 – 2022

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We see ample opportunities and challenges in our markets Geopolitical tension and turmoil Trade war & recession threat Digital disruption Retail value chain redesign

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We have a defensive profile towards macro economic developments

Robust and global product categories with mainly A- branded products that

  • utperform in

economic hardship Bonded supplier status limiting the impact

  • f geopolitical

developments Diversified supplier and customer basis with limited dependency on a single market

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Differentiated sourcing Fully bonded supply chain Highly efficient logistical platform Regulatory expertise Supply chain excellence Disinterme- diation Digital disruption Price transparancy Rise of value channels Consumer shift to

  • nline channel

Our value proposistion is adaptive to market trends and developments

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Key focus areas that support our 2020 – 2022 growth strategy

Digital Transformation Focus on growth markets Organic expansion Centralisation

  • f operations
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Centralisation of

  • perations

▪ With close commercial involvement further centralise IT and Logistics towards creating a more lean and focused organisation ▪ Cluster overlapping segmental business activities to simplify the supply chain and

  • ptimise inventory management

▪ Intensify segmental collaboration by optimising internal processes

Digital tranformation

▪ Use data driven insights to optimise internal processes and identify commercial

  • pportunities

▪ Digitise the supply chain with commercial tools that support centralised operations ▪ Continued innovation by embedding digital capabilities in our organisation

Focus on growth markets

▪ Focus on niche markets driven by mega trends (digitisation, globalisation, market disruption) ▪ Invest in unique positions with compelling advantage ▪ Complemented by selective M&A to strenghten niche positions

Organic expansion

▪ Capture opportunities for geographical expansion in all business segments ▪ Explore new PMCs in adjacent channels or product / category per segment ▪ Drive organic growth through data driven customer services

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Long term value creation – strategic initiatives 2020 - 2022

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