ZOOPLUS AG FY 2019 RESULTS · 3/25/2020 · 1) Total net market = online + offline market, based on Euromonitor International 2020 and management estimates; 2) change vs . prior

INVESTOR & ANALYST PRESENTATION

ZOOPLUS AG

FY 2019 RESULTS

25 March 2020 – Munich – Dr. Cornelius Patt, CEO, Andreas Maueröder, CFO

SAFE HARBOR STATEMENT

2FY 2019 Results Presentation

This document includes supplemental financial measures that are or may be non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation as alternatives to measures of zooplus’ financial condition, results of operations or cash flows as presented in accordance with IFRS in its Consolidated Financial Statements. Other companies that report or describe similarly titled financial measures may calculate them differently.

This document contains statements related to our future business and financial performance and future events or developments involving zooplus that may constitute forward-looking statements. We may also make forward-looking statements in other reports, in presentations, in material delivered to stockholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of zooplus’ management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond zooplus’ control, affect zooplus’ operations, performance, business strategy and results and could cause the actual results, performance or achievements of zooplus to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends. Further information about risks and uncertainties affecting zooplus is included throughout our most recent annual and interim reports, which are available on the zooplus website, investors.zooplus.com. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of zooplus may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. zooplus neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

3

UPDATE ON COVID-19

ZOOPLUS CONTINUES TO OPERATE – SAFE AND SUCCESSFUL

STABILITY OF OUR BUSINESS – SECURING OUR LOYAL CUSTOMER BASE

AVAILABILITY OF PRODUCTS AND SERVICES

ZOOPLUS OPERATES A HIGHLY RESILIENT BUSINESS MODEL, WITH SOLID CRISIS MANAGEMENT IN PLACE

AND EXCELLENT POSITIONING IN EUROPEAN MARKET TO VENTURE THROUGH CURRENT ENVIRONMENT

SAFETY FIRST

4

UPDATE ON COVID-19

ZOOPLUS CONTINUES TO OPERATE SAFE AND SUCCESSFUL

Employee safety✓ Home-office mandatory, tech equipment in place✓ Confirmed and suspected cases handled by strict

HR-protocol

Fulfillment staff safety✓ additional safety and sanitary measures in our 11

FCs operated by our partners

Partner safety ✓ Reducing communication to telephone / video

conference

Customer safety✓ Product can be safely ordered directly to doorstep ✓ Customer communication on parcel delivery time;

no need to leave the house✓ COVID-19 FAQ on all our shop sites

Pet safety✓ Supporting the welfare by providing essential pet

products

SAFETY FIRST

5

UPDATE ON COVID-19

ZOOPLUS CONTINUES TO OPERATE - SAFE AND SUCCESSFUL

Management & staff✓ Daily sync of board members ✓ Communications & updates to staff by CEO✓ Crisis management team in place

Business model✓ Excellently positioned to manage distribution

across 30 European countries✓ No offline retail dependency and staff exposure to

customer contact✓ Loyal customer base – priority access to capacity

Infrastructure✓ Top-notch IT infrastructure for remote / home

office for all team✓ Cloud services in place for shop infrastructure

managed remotely

Operations✓ Running FC network at full capacity✓ Replenishment / Supply-chain management with

high-adaptability and quick responsiveness to crisis due to strong tech approach

✓ All FCs currently up and running, last-mile providers delivering parcels

Financial stability✓ Regular liquidity stress testing✓ Revolving credit facilities of EUR 50 m in place ✓ Monitoring currency expenses and currency

hedging in place✓ Clear priorities for cash and cost alignment✓ Ad spend on hold

STABILITY OF OUR BUSINESS – SECURING OUR LOYAL CUSTOMER BASE

6

UPDATE ON COVID-19

ZOOPLUS CONTINUES TO OPERATE - SAFE AND SUCCESSFUL

Product availability✓ Ensuring replenishment meets current product

demand✓ Reducing capacity around non-essential SKUs to

secure pallet space✓ Focus on stock availability has always been part of

our DNA to ensure positive customer experience✓ Alternative products for high-demand product

ranges in place ✓ Limiting bulk-purchasing to the necessary to ensure

equal availability for all in times of high demand

Service availability✓ All shop sites up and running✓ Customer service continues to be available and

enhanced social media customer communication

Management team in direct contact to key partners✓ Continued dialogue with our supplier and

logistics partners to ensure supply and delivery chain is not disrupted

✓ Working together on ensuring product and service availability for our consumers

AVAILABILITY OF PRODUCTS AND SERVICES

FY 2019 RESULTS

PRESENTATIONFY 2019 Investor & Analyst Call

SALES INCREASE BY 14% IN 2019

FY 2019 SALES GROWTH RATE WITHIN GUIDANCE RANGE

8

SALES (in € m)

o Sales driven by customer loyalty, own

brands and customer acquisition

o Solid year-on-year development

across all quarters in FY 2019:

o Q1 ´19 vs. Q1 ´18 +41m (+13%)

o Q2 ´19 vs. Q2 ´18 +43m (+14%)

o Q3 ´19 vs. Q3 ´18 +47m (+14%)

o Q4 ´19 vs. Q4 ´18 +52m (+14%)

FX-adjusted +14%

+14%

FX-adjusted +14%

+14%

368

419

Q4 2019Q4 2018

1.342

1.524

2018 2019FY 2019 Results Presentation

+ 182m + 52m

ZOOPLUS IS ONLINE MARKET LEADER IN EUROPE BY A

DISTANCE AND GRABBING SHARE FROM OFFLINE

9

ZOOPLUS SALES BY REGION (in € m)

444

248

171

137

119

116

105

94

90

DACH

NORDICS

IT

FR

CEE

BENELUX

PL

UK , IE

ES,PT

TOTAL MARKET SHARE1

+15%

+6%

+15%

+10%

+11%

+7%

+9%

+25%

+25%

6%

8%

9%

5%

3%

4%

6%

14%2

5%2

1) Total net market = online + offline market, based on Euromonitor International 2020 and management estimates; 2) change vs . prior disclosure due to updated market data reflecting an overall larger total market in Poland and CEE; zooplus continues to outperform total market growth in respective markets.

Pet supplies market1

EUR 25.3 bn

FY 2019 Results Presentation

other than PL

GROSS MARGIN STABILIZATION CONTINUED IN FY 2019

10

GROSS MARGIN1

29.0%28.7%

20192018

+0.3%p

(in % of sales)


positive

Own Brands Portfolio:Increased sales share andmargin improvements

Margin stabilization across all other food segments

Lower sales shareof accessories / non-food

1) Gross margin = sales – cost of goods (as a % of sales)

neutral

adverse

OVERPERFORMING OWN BRANDS PORTFOLIO

GROWING TO SUBSTANTIAL SIZE

11

PRIVATE LABEL SALES FOOD & LITTER (in € m)

o High-margin business in the mid to

premium segment contributing to

gross margin increase

o Launch of first private label

veterinary nutrition brand in 2019

o Growth index own brands / food

1.8 (2019)


65

88

120

162

210

20182015 2016 2017 2019

+34% CAGR

SALES RETENTION SLIGHTLY REDUCED

RETURN TO PREVIOUS HIGHS IS POSSIBLE

12

SALES RETENTION RATE1

95%

2018 2019

91%

-4%p

Transient

effects

o Trademark 94% Revenue

Retention took a temporary hit in 2019

o Issues:

o Temporary unavailability of offerings relevant

to customers (food / accessories)

o Relative loss of reach of Direct Marketing

o Loyalty tools drive future revenue retention

o Outlook: Revenue Retention is stabilising (Q3)

and recovering (Q4), trend continues

FY 2019 Results Presentation1) Sales retention (net, non-BMF)

ACQUISITION MOMENTUM IN 2019 CAME AT

SUBSTANTIALLY INCREASED COST

13

REGISTERED NEW CUSTOMERS (in k)

+22%(Registered new customers)

3,053

2018 2019

2,506

o New customer acquisition confirms

offline to online migration trend

o Per channel / activity:

o Google: cost per click increase

o Alternative channels: performance issues, KPIs below target

o 20-years campaign designed as brand building exercise

o Outlook: decreasing overall spend,

increase in CpNC efficiency


12

17

20192018

+44%

(Advertising & Traffic acquisition cost)1

1) Based on all registered new customers acquired in respective year

LOYALTY DRIVEN REPEAT CUSTOMER BUSINESS

WITH STRONG CONTRIBUTION MARGIN

14

REPEAT CUSTOMER BUSINESS

NEW CUSTOMER BUSINESS

1,047

Contribution Margin 2Net Sales

112149

1,217

Net Sales Contribution Margin 2

295

3

1.1%

Net Sales Contribution Margin 2

307

-14

-4.6%

Margin improvement reflects:

o Yield management / reduction in number of loss-making orders

o Efficiency gains in logistics andadditional income from shipping fees

o Increased share of own brands

o Higher CpNC and lower in-year spend of new customers

o Reduced share of accessories

2019

4.9%

2019

2019 201920182018

xx% Contribution Margin 2 = (Sales – CoGs– variable logistics cost– CAC ), as a % of sales

10.7% 12.3%


(in € m)

Net Sales2018

Contribution Margin 22018

CUSTOMER ACQUISITION COST OFFSET BY INCREMENTAL

CUSTOMER VALUE INCREASE WITH LIFETIME

15

1. Only accounts with repurchasing activity2. Acquisition cost per new account with repurchase activity, reduced by contribution margin of one time- purchasers in respective year3. CM = contribution margin = net sales – all variable cost (excl. acquisition cost) = 10.7%

2019-36 €

160 €

customer acquisition cost

CM cumulative 10 years plus

acquisition year

Net Sales / Account Net Sales / Account (Cumulated)

1,497 €182 €

a + 10 (proj.)


1

2

3

CONSUMERS ARE SHIFTING TO MOBILE DEVICES

MOBILE USAGE FURTHER GAINING TRACTION IN 2019

16

THIS IS A SUBHEADLINEVISITS ORDERS

BASKET VALUECONVERSION RATE

58%

11%

22%

10%

51%

9%

26%

14%

Desktop Tablet Mobile - Web

Mobile - App

21%

15%

7%

16%

21%

14%

6%

16%

Mobile - Web

Desktop Tablet Mobile - App

57€ 57€51€ 54€57€ 58€

51€ 55€

TabletDesktop Mobile - App

Mobile - Web


38%

10%

43%

8%

30%

9%

51%

10%

Desktop Tablet Mobile-Web

Mobile-App

2018

2019

2018

2019

2018

2019

2018

2019

o Mobile / Tablet / App

accounting for around 70%

of traffic

o Desktop traffic is highly

transactional

o App shows the strongest

growth rate

o Tablet leading in basket

value

17

WE ARE THE ONLY CATEGORY SPECIALIST WITH A

PAN-EUROPEAN LOGISTIC NETWORK

Fulfillment center (FC)

Hubs (DSP) - shown are selected relations from FC to Hub of DSPs

11 fulfillment centers across Europe

» all managed as one integrated pan-European network

» Flexibility and capacity for future growth

All FCs operated by partners

» Experts in their field, exclusive for zooplus in pet category

» No capex for zooplus

» Quick access to new technology

Intelligent network solution by zooplus-owned algorithms

» SKU allocation, replenishment, order routing and packing

» Optimization of transport distances

» Management of parcel allocation to FCs and DSPs

Optimized last mile distribution with external partners (DSPs)

» At least two DSPs for every country

» Focus on delivery speed and efficiency

» Customer communication for high transparency


LOGISTICS AS KEY SOURCE FOR EFFICIENCY

GAINS

18

COST STRUCTURE (IN % OF SALES)

1) Figures for 2018 showing like-for-like IFRS 16 impact comparison 2) Impairment expenses on financial assets reclassified to payment3) Including LTI & SOP; own work capitalized reclassified to personnel

o Overall efficiency superior to online

and offline competitors

o Operational improvement and

network synergies drive logistics costs

down by 0.7%p

o Size and scaling effects allow for

continuous investments in IT and team

o One-off marketing spend in Q2/Q3

2019 for zooplus 20-year campaign


3.3%2.2%Advertising / Marketing

18.3%19.0%

1.1% 1.1%

Logistics

Payment

IT/Admin2.5%3.3%

2018 2019

2.6%3.5%Personnel

1

2

3

EBITDA WITHIN GUIDANCE RANGE FOR FY 2019

FREE CASH FLOW REFLECTING WORKING CAPITAL OPTIMIZATION

19

EBITDA (in € m)

+ 3.2

(in € m) 11.8

2018

8.6

2019

EBITDA 2019 based on full IFRS 16 application; IFRS 16 impact to EBITDA € 13.9 m, of which € 10.9 m logistics (0.7%p) and € 3.0 m admin costs (0.2%p) go into depreciation;Free Cashflow based on full IFRS 16 application; Free Cash Flow impact in 2019 due to IFRS 16: EUR +14.3m

CASH FLOW 2019 (in € m)

€28m

€25m

Cash flow from operating activities

- €3m

Cash flow from investing

activities

Free cash flow


20

NET WORKING CAPITAL IS ON THE WAY TO ZERO

RELATIVE TO SALES

NET WORKING CAPITAL (absolute in € m)1

27

3128

28

108

118

-97

2018

-125

2019

63

52

Trade payables

Inventories

Trade receivables

Supplier receivables

WORKING CAPITAL2 (relative to sales)

2015 201920182016 2017

7.1%

10.4%

8.7%

4.7%

3.6%

FY 2019 Results Presentation1) Based on year-end figures (31.12)2) WC = Inventory + prepayments + receivables (trade receivables + supplier receivables) - payables

o Increase in inventory turnover

o More efficient replenishment process

o Improvement in payment days

21

2019: A CHALLENGING YEAR WITH SIGNIFICANT

LEARNINGS AND IMPROVEMENTS


Revenues € 1,524m (+ € 182m)

EBITDA € 12m ( + € 3m)

Positive Free Cash Flow(+ € 25m)

Own brand portfoliogrowing at 29%

Overall Margin improved to 29.6%

Transient issuesdenting revenue

retention

Best in class logisticswith further efficiency

gains

Marketing push led into

inefficient territory

Net Working Capital further reduced

KEY PRIORITIES &

GUIDANCE 2020FY 2019 Investor & Analyst Call

GROWTH WILL BE RETENTION DRIVEN, FOR 2020

AND BEYOND

232020 figure projections based on management estimate at time of FY 2019 publication and are not part of the full year 2020 guidance


274

2018 Total 2019 Repeat 2019 New 2019 Total

1,2171,387

E 2020 Repeat

E 2020 New E 2020 Total

1,342

1,5241,432

>1,706

307

91%

91%

94%

3.05m€ 100 p.a.

2.6m€ 105 p.a.

SALES RETENTION RATE AS A MAJOR REVENUE PERFORMANCE DRIVER (PLANNING SCENARIO)

SALES (in € m)

24

STRATEGIC GROWTH DRIVERS


Brand Portfolio

> 200 Pet food & accessories brands

zooplus & bitibapan-European retail brands

Own brands portfolio

Customer Experience

Digital experience

(Dig. Multichannel)

Delivery experience

Care experience

(Customer Care and Pet Care)

Loyalty Drivers

Product promotion & campaigns

Bonus Points

(auto enrol loyaltyprogram)

Savings Plan

(upfront payment, regular savings)

EARNINGS AND EFFICIENCY DRIVERS

25

FOUR KEY LEVERS WE ARE FOCUSING ON IN 2020

Portfolio Strategy&

Own Brands

Marketing

Efficiency

Scaling

Effects

21

3 4


Upselling&

Basket Size

26

PORTFOLIO COVERAGE OF PET FOOD CATEGORY


European Pet Food Market

super premium 60%premium

aspiring specialty trade

quality grocery

grocery

discount / white label

25%

55%

super premium

premium

aspiring specialty trade

specialty tradespecialty trade

quality grocery

20%

30%

10%

KEY PRIORITIES & STRATEGY UPDATE 2020

PUSH OWN BRANDS

27

VALUE CREATING PORTFOLIO OF OWN BRAND PRODUCTS RETAILED EXCLUSIVELY ON ZOOPLUS SHOPS

=

+

WE KNOW OUR CUSTOMERS

WE KNOW THE CATEGORY / TRENDS

WE ARE BEST POSITIONED TO OPERATE

A OWN BRAND PORTFOLIO

• Believe in brands

• Look for natural products and concepts

• Open for strong emotional messages

• Species-appropriate concepts

• Holistic concepts

• Special nutritional concepts

Own Brands sales shareof total food & cat litter

16%14%

Share of first order

sales

7%6%

Growth index own brands / food

1.81.6

FY 2019 Results PresentationFigures for FY 2019 and FY 2018

GUIDANCE 2020FY 2019 Investor & Analyst Call

FY 2020 GUIDANCE

ZOOPLUS IS WELL POSITIONED TO CONTINUE ON GROWTH PATH

29

FINANCIAL YEAR 2020 OUTLOOK

SALES

EBITDA

Taking into account effects related to COVID-19 known at the current stage, we expect:• Sales growth volume in the same range to prior year, corresponding a year-on-year

increase in sales of at least EUR 180 m

Due to efficiency losses in the total cost ratio, particularly in logistics, in connection to effectsrelated to COVID-19:• We expect EBITDA to come in below the prior year‘s level – but in the positive to neutral

range


Q&AFY 2019 Investor & Analyst Call

MAJOR KPI’S PER QUARTER

31

Major KPIs Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019Sales (in € m) 363 364 378 419 1524Δ vs. PY 12.6% 13.5% 14.1% 14.0% 14.0%

Private label growth vs. PY 29% 29% 29% 29% 29%

New customer count (in k) 825 794 825 865 3.309t/o registered new customers (in k) 746 723 761 823 3.053t/o unregistered new customers (in k) 79 71 64 42 256

Sales retention (net, Non-BMF) 93% 92% 91% 91% 91%

Total Margin 28.8% 29.4% 29.2% 30.9% 29.6%Cost ratio 28.2% 28.8% 28.6% 29.7% 28.8%

EBITDA (in € m) 2.2 2.3 2.2 5.1 11.8EBITDA 0.6% 0.6% 0.6% 1.2% 0.8%


PROFIT & LOSS

FY 2019

32

in € m2019 2018

abs % abs %

Sales 1523.7 100.0% 1341.7 100.0%Other income 9.5 0.6% 8.6 0.6%Cost of materials -1082.1 -71.0% -956.8 -71.3%Personnel costs -53.2 -3.5% -44.3 -3.3%Other expenses -386.1 -25.3% -340.6 -25.4%

thereof logistics / fulfillment -278.6 -18.3% -263.8 -19.7%thereof marketing -50.9 -3.3% -29.1 -2.2%thereof payment -16.7 -1.1% -14.2 -1.1%thereof other costs -39.9 -2.6% -33.6 -2.5%

Earnings before depreciation, interest and taxes (EBITDA) 11.8 0.8% 8.6 0.6%Depreciation -26.3 -1.7% -10.1 -0.8%Financial income 0.0 0.0% 0.0 0.0%Financial expenses -1.4 -0.1% -0.8 -0.1%

Earnings before taxes (EBT) -15.9 -1.0% -2.3 -0.2%Taxes on income 3.8 0.3% 0.2 0.0%

Consolidated net result -12.1 -0.8% -2.1 -0.2%Differences from currency translation -0.1 0.0% -0.7 -0.1%Hedge reserve -0.2 0.0% 0.3 0.0%

Items that may be relclassified subsequently to profit or loss -0.3 0.0% -0.4 0.0%Comprehensive income -12.3 -0.8% -2.5 -0.2%

Earnings per share in €basic -1.69 - -0.29 -diluted -1.69 - -0.29 -


BALANCE SHEET

FY 2019

33

Equity and Liabilities

in € mDec. 31st.

2019Dec. 31st.

2018*Δ abs

A. Equity

I. Capital subscribed 7.1 7.1 0.0

II. Capital reserves 102.8 100.8 2.0

III. Other reserves -2.0 -1.8 -0.3

IV.Profit and Loss carried forward

-7.2 4.9 -12.1

Total equity 100.8 111.1 -10.3

B. Non-current liabilities 61.8 41.4 20.4

C. Current liabilities

I. Accounts payable 125.1 99.7 25.3

IIDerivative financial instruments

0.4 0.1 0.3

III. Other current liabilities 31.8 25.1 6.7

IV. Contract liabilities 14.0 12.0 2.0

V. Tax liabilites 0.2 0.1 0.1

VI. Finance lease 20.4 9.8 10.7

VII. Provisions 6.5 2.6 4.0

Total current liabilities 198.4 149.3 49.1

361.0 301.8 59.2

Assets

in € mDec. 31st.

2019Dec. 31st.

2018*Δ abs

A. Non-current assets

I. PP&E 5.5 55.9 -50.4

II. Right-of-use assets 81.0 0.0 81.0

III. Intangible assets 12.8 14.2 -1.4

IV. Deferred tax assets 3.6 0.0 3.6

Total non-current assets 102.9 70.0 32.8

B. Current assets

I. Inventories 117.7 107.6 10.1

II. Advance payments 0.0 0.4 -0.4

III. Accounts receivable 27.7 28.1 -0.4

IV. Other current assets 47.7 35.2 12.6

VI. Tax receivables 0.6 0.9 -0.2

VIII.Cash and cash equivalents

64.3 59.5 4.8

Total current assets 258.1 231.7 26.4

361.0 301.8 59.2

* The previous year's figures have been adjusted. Please refer to section 2.1.1 of the notes to the consolidated financial statements.


CASH FLOW STATEMENT

FY 2019

34

Cash Flow 2019

in € m 2019 2018*

EBT -15.9 -2.3

Cash flow from operating activities 28.1 21.7

Cash flow from investing activities -3.2 -7.3

Free cash flow 24.9 14.3

Cash flow from financing activities -20.1 -6.1

Currency effects on cash and cash equivalents 0.0 0.0

Net change of cash and cash equivalents 4.8 8.3

Cash on hand, bank deposits 64.3 59.5

* The previous year's figures have been adjusted. Please refer to section 2.1.1 of the notes to the consolidated financial statements.


Q&AFY 2019 Investor & Analyst Call

Documents

ZOOPLUS AG FY 2019 RESULTS · 3/25/2020 · 1) Total net market = online + offline market, based on Euromonitor International 2020 and management estimates; 2) change vs . prior