1 Q 1 7 F I N A N C I A L R E S U L T S P R E S E N T A T I O N WARSAW, 17 TH MAY 2017
Disclaimer This is presentatio ion (t (the “Presentation”) was was prepared by by LPP SA SA (t (the “Company”) wit ith a due care. Stil ill, it it may contain in certain inconsis istencie ies or or omis issions. The Presentation does not contain in a complete or or thorough financial analysis is of of the Company and does not not present it its standing or or prospect cts in in a comprehensive or or in in-depth manner. Therefore, anyone who in intends to to make an an investment decis ision wit ith respect ct to to the Company should rely on on the information dis isclosed in in the offic icial reports of the Company, published in of in accordance wit ith the laws applic icable to to the Company. This is Presentatio ion was prepared for informatio ion purp urposes on only and nd doe oes not not co constit itute an an off offer to to buy uy or or to to sel sell any fin financial instruments ts. The Presentatio ion may contain in 'forward‐looking statements'. However, such statements cannot be be treated as as assurances or or projections of of any exp xpected future result lts of of the Company. Any statements concernin ing expectations of of future financial results cannot be be understood as as guarantees that any such results wil ill actually be be achieved in in future. The expectatio ions of of the Management Board are based on on their ir current knowledge and depend on on many factors due to to whic ich the actual results achieved by by the Company may dif iffer materially from the results presented in in this is document. Many of of those factors are bey eyond th the aw awareness an and co contr trol of of th the Co Company or or th the Company’s ab abil ility to to fo foresee th them. Neit ither the Company, nor it its dir irectors, offic icers, advis isors, nor representativ ives of of any such persons are lia iable on on account of of any reason resulting from any use of of this is Presentatio ion. Addit itionally, no no information contained in in this is Presentation constit itutes any representation or or warranty of of the Company, it its offic icers or or dir irectors, advis isors or or representatives of of any of of the above persons. The Presentatio ion and the forward‐looking statements speak only as as at at the date of of this is Presentation. These may not not be be indic icativ ive of of results or or developments in in future periods. The Company does not undertake any obligatio ion to revie to iew, to to confir irm or or to to release public icly any revis isions to to any forward‐looking st statements to to reflect events that occur occur or or circumstances th ci that aris ise after th the date te of of th this is Presentation. G L O B A L A S P I R A T I O N S 2
1Q17 financial results 1 Key corporate events 2 3 2017 outlook G L O B A L A S P I R A T I O N S 3
Almost PLN 1.4bn revenues in 1Q17 1,671 +4 . 6% STORES LFLs +16% 18 REVENUES COUNTRIES +100% +6 . 9% E-COMMERCE m2 G L O B A L A S P I R A T I O N S 4
Sales network optimisation 26 298 31.03.2017 No. stores YoY 19 LPP GROUP 1,671 +30 28 Reserved 455 +7 Cropp 376 +1 987 @ House 321 -1 18 @ 72 Mohito 285 +4 80 @ Sinsay 198 +26 58 @ Tallinder 0 -6 16 @ 34 @ Outlety 36 -1 17 12 1 xx xx Numbe ber of of traditi tional l stores 1 2 1 @ Int nternet t store 1 G L O B A L A S P I R A T I O N S 5
LFL and e-commerce growth LFL LF L DYN DYNAMICS ON ON-LI LINE SA SALE LES (lo local cu currencies) (PLN LN m) m) +100% 9.2% 54.9 YoY +53% 6.6% YoY 5.1% 4.2% 4.6% 2.8% +45% 27.4 1.5% YoY +636% 18.0 12.4 YoY -0.8% -1.5% 1.7 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 1Q13 1Q14 1Q15 1Q16 1Q17 LF LFLs Ls wer ere posit itive in ea each mo month in 1Q 1Q17. All ll brands sho showed posit itive LF LFLs Ls in 1Q 1Q17. • 1Q 1Q17 LFL LFLs wer ere in n th the e bla lack in n all ll co countries (th the hi highest gr growth rates were rec ecorded in Bu Bulgaria, Hu Hungary, , Uk Ukraine and nd • Cz Czech Rep Republic). On On-line sa sales amounted to to c. c.6% revenues in n Pol oland and 4% 4% of of group revenues in n 1Q 1Q17. • Pick-up in e-commerce dyn ynamics due ue to to investments in n int nternet t and nd mo mobile sto stores of of all ll brands and nd dev evelopment t of of • stor stores ou outs tside Pol oland. . G L O B A L A S P I R A T I O N S 6
Growths in all brands REVENUES BY REV BY BR BRANDS 1Q17 FL 1Q FLOORSPACE (PLN LN m) (by brands) Reserved 614 ths m2 1Q16 1Q17 YoY + 14% YoY LPP GR GROUP 855.0 913.9 6.9% Cropp 189 + 13%YoY Res Reserved 467.1 510.7 9.3% Mohito 184 + 23% YoY Cropp 115.4 120.1 4.1% House + 10% YoY 159 House 100.5 102.9 2.4% Mohito 94.9 97.8 3.1% + 27% YoY Sinsay 112 Sinsay 60.5 69.8 15.4% E-commerce + 100% YoY 55 Tallinder 2.9 0.0 -100.0% Ou Outlets 13.8 12.6 -8.6% Other 50 Dynamic Res Reserved 1Q 1Q17 revenue gr growth res esulted fr from: flo floorspace dev evelopment (Germany and and Ru Russ ssia) as as well as as mo more • fa favourable rec eceptio ion of of LP LPP brand s’ co coll llectio ions by y cu cust stomers. Double-dig igit t LFL LFLs in n Moh ohito in 1Q1 1Q17 – th the e brand’s rev evenues were sim similar to to th thos ose of of Cr Cropp brand. . • Sinsay’s floorspace and revenues grew at a higher pace than those of other LPP’s brands, due to development in Poland • and nd abroad. G L O B A L A S P I R A T I O N S 7
Growths in key regions REV REVENUES BY BY REG REGIONS 1Q 1Q17 FL FLOORSPACE (PLN LN m) m) (by reg egions) Poland 749 ths m2 1Q16 1Q17 YoY LPP GROUP 855.0 913.9 6.9% + 6% YoY CIS 324 + 39% YoY Po Pola land 468.3 485.3 3.6% Eur Europe 184.4 212.8 15.4% Europe 282 + 24% YoY CIS 194.7 208.2 6.9% ME ME 7.6 7.6 0.0% ME 8 - 19% YoY Dynamic flo floorspace gr growth in Eu Europe in 1Q 1Q17 due to to dev evelopment in Ger Germany. • CI CIS flo floorspace acc cceleration co contin inued, ye yet t th there were no no ne new op openings in th the ME E in 1Q 1Q17. • The hi The highest t rev evenue gro growth rates among reg egions wer ere rec ecorded by y th the e CI CIS co countries, due ue to to rub ubble appreciatio ion • against t PLN LN. Among co countries, th the hi highest t no nominal revenue gro growth was rec ecorded in n Ru Russia and Pola oland. • G L O B A L A S P I R A T I O N S 8
Acceleration of sales/ m2 growth GROUP REV REVENUES REVENUES/ REV / M2 (PLN LN m) m) 6.1% 9.0% 2.2% 12.1% 17.2% 16.4% 18.0% 17.8% 16.0% PLN (monthly) 1Q16 1Q17 YoY 2,000 20% LPP GROUP (ret etail) 449 449 492 492 9. 9.5% 1,500 15% Po Pola land 491 491 500 500 2. 2.0% 1,000 10% Eur Europe 418 418 451 451 8.0% 8. 500 5% 0 0% CIS 390 390 514 514 31. 31.8% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 LPP GROUP 468 468 499 499 6.7% 6. 7% Retail sales (brands) E-commerce Other (incl. outlets) Revenue growth Gr Group revenues gr grew 16% 16% YoY in 1Q 1Q17 due e to to hig igher flo floorspace, , posit itive LF LFLs Ls an and hig igh e-commerce gr growth. • In n 1Q 1Q17 bot oth gr group revenues/ m2 m2 and nd ret etail sa sales/ m2 m2 were hi higher YoY oY. • Double-dig igit t ret etail sa sales/ m2 m2 wer ere rec ecorded in n 1Q 1Q17 in n Cz Czech Rep Republic, Hu Hungary, Ro Romania and Ru Russia. • G L O B A L A S P I R A T I O N S 9
Gross profit margin stabilisation QUARTE QU TERLY Y GROSS PR PROFIT IT MAR ARGIN IN MON ONTHLY Y GROSS PRO PROFIT IT ON ON SA SALE LES (PLN LN m) m) NEW 60% + 28% INVENTORY + 30% YoY MANAGEMENT MA 54.8% 54.2% YoY 55% POLIC POL ICY 52.6% + 5% + 2% 49.9% YoY 309 50.8% 52.1% YoY 50% 280 46.1% 47.1% 45% 178 168 45.6% 40% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Jan-17 Feb-17 Mar-17 Apr-17 1Q 1Q17 YoY gr gross profit t ma margin stab stabil ilisation, due to to intr troductio ion of f new ew inventory ma management polic icy an and improved • coll co llectio ions. The aim The im of of th the e cu current inventory management t pol olic icy is s to to sel sell goo goods to to a ma maximum exte extent t in n stor stores to to avoid th the e co cost sts of of • th their ret eturn and tr transport to to post ost-season warehouse. The ne The new pol olic icy res esults in n si sizeable gro gross profit ma margin difference betw etween mo months: 37% 37% (-7 p.p.) ) in January 201 2017, 44% 44% • (-3 p.p. YoY) in Fe February, but t 60% 60% (+8 +8 p.p. YoY) in Marc arch an and 59% 59% (+8 +8 p.p. YoY) in April il 201 2017. G L O B A L A S P I R A T I O N S 10
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