Investor Presentation • Nov 14, 2017
Investor Presentation
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ePRICE SpA - November 2017 0 EUROPEAN MIDCAP CONFERENCE - MADRID 14 NOVEMBER 2017
This presentation has been prepared by ePRICE S.p.A. for information purposes only and for use in presentations of the Group's results and strategies.
For further details on the ePRICE Group, reference should be made to publicly available information.
Statements contained in this presentation, particularly regarding any possible or assumed future performance of the Group, are or October be forward-looking statements based on ePRICE S.p.A.'s current expectations and projections about future events, and in this respect October involve some risks and uncertainties.
Actual future results for any quarter or annual period October therefore differ materially from those expressed in or implied by these statements due to a number of different factors, many of which are beyond the ability of ePRICE S.p.A. to control or estimate precisely, including, but not limited to, the Group's ability to manage the effects of the uncertain current local and global economic conditions on our business and to predict future economic conditions, the Group's ability to achieve and manage growth, the degree to which ePRICE S.p.A. enters into, maintains and develops commercial and partnership agreements, the Group's ability to successfully identify, develop and retain key employees, manage and maintain key customer relationships and maintain key supply sources, unfavourable development affecting consumer spending, the rate of growth of the Internet and online commerce, Italian advertising market, competition, fluctuations in exchange rates, any failure of information technology, inventory and other asset risk, credit risk on our accounts, regulatory developments and changes in tax laws.
ePRICE S.p.A. does not undertake any obligation to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.
Any reference to past performance of the ePRICE Group shall not be taken as an indication of future performance.
This document does not constitute an offer or invitation to purchase or subscribe to any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
By attending the presentation you agree to be bound by the foregoing terms.
| Q1 2016 | Q2 2016 | Q3 2016 | Q3/Q4 2016 | Q4 2016 | Q1 2017 |
|---|---|---|---|---|---|
| Launch of Home Service • 35% population coverage at launch • +50% NPS(1) vs. |
Sale of Banzai Media • 45 €M EV • 17.5 €M capital gain • 3Y agreement |
New brand identity & TV campaign • 10 €M ADV campaign in 3 years • 8M people |
Sale of Saldiprivati • 38 €M EV • 7.8 €M capital gain • 5Y agreement |
New Strategic Guidelines 2017-2021 • +4/6% M/S Online Tech market • +4/6% M/S |
Change of Name & Ticker |
| prev. svcs | w/ Mediaset to purchase TV ADV, 7 €M benefit |
reached on 35-54 y.o. target |
to manage fullfillment for SRP Italian activities. |
Home Service market • 3X GMV by 21 • 4-6% Ebitda margin by 21 |
ePRICE SpA - November 2017 3 (1) Net Promoter Score is a management tool that can be used to gauge the loyalty of a firm's customer relationships. It can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent.
9M 17 TTM REVENUES Eu 204mn
~1.6mn customers (2) ~500 technicians(3) >1,400 merchants
9M 17 TTM GMV (1) Eu 270mn
134 Pick&Pay 290 Lockers 1 brand new fulfilment center
A UNIQUE VALUE PROPOSITION TAILORED TO THE ITALIAN MARKET, SUPPORTED BY A FLEXIBLE AND SCALABLE PLATFORM
2
SIGNIFICANT TRACK RECORD AND GMV/REVENUE GROWTH TO GENERATE VALUE THROUGH SCALE & RELEVANCE, IN ORDER TO REACH PROFITABILITY
"To serve the technological evolution of Italian households"
Tech & Appliances Retail in Italy B2C Sales (market Eu BN)
offline online
| Traditional Tech&Appliances H1 17 |
Online (2) Tech&Appliances H1 17 |
Tech&Appliances ePRICE GMV H1 17 |
|||
|---|---|---|---|---|---|
| -1.5% | c.+8.5% | +12.5% |
SALES & SERVICE STRATEGY Unique positioning and higher GM
Online Market Leader High Ticket Premium Services Best Price Pioneers in innovative delivery& last mile services Breadth and Depth of Catalogue Broad Network of Delivery Points (Pick&Pay)
MARKETPLACE STRATEGY
Accelerating marketplace growth to improve profitability
Number 1 Italian 3P Marketplace Lower average ticket Mostly price driven Breadth and Depth of Catalogue thanks to 3P merchants Extended >400 delivery points network Broadest available range of payments method New automated fulfilment center
Overperformed market slowdown: 9M 17 online Tech&Appliances market growth +8.5% YoY ( c. -15 pct.pt. vs 9M 16 growth) and vs. +16- 18% estimate at beginning of 2017(1) .
Consolidating GMV Market Share in MDA: >30% of online market. +165% YoY # Deliveries "Home Service" based on MDAs.
Relevant market share growth makes ePRICE key player on online TV sales, with double digit growth, outperforming negative reference market
Initial positive indications from new approach (accelerating shift to marketplace of Mass Market Products (IT, Mobile, SDA etc))
(1) Gross Merchandise Volume: includes revenues from products, shipping and 3P marketplace sales, net of returns and VAT included. Revenue from services includes transports, warranties, B2B and other revenues. 3P Marketplace and Warranties Sales Boost: Marketplace GMV up 54% YoY in 9M 17; warranties up +41% YoY.
Tech & Appliances Retail in Italy B2C Sales (market Eu BN)
| Traditional Tech&Appliances 9M17 |
Online (2) Tech&Appliances 9M17 |
Tech&Appliances ePRICE GMV 9M 17 |
||||
|---|---|---|---|---|---|---|
| -1.6% | 8.5% | +9.3% |
In 9M16 offline market was up 2.3 % YoY
ePRICE Internal estimates and re-elaboration, based on GFK data
Accelerating marketplace growth to improve profitability
| Number 1 Italian 3P Marketplace |
|
|---|---|
| Lower average ticket |
|
| Mostly price driven |
|
| Breadth and Depth of Catalogue thanks to 3P |
|
| merchants | |
| Extended >400 delivery points network |
|
| Broadest available range of payments method |
|
| New automated fulfilment center |
|
Block 2
Promotions: increased weight of freeshipping campaigns affected Q2
(1) Gross Merchandise Volume includes revenues from products, shipping and 3P marketplace sales, net of returns and VAT included. Revenue from services includes deliveries, warranties, B2B, ADV&Infocommerce and other revenues. GMV from services does not include B2B, ADV&Infocommerce.
(2) Services&other have been restated and now include warranties.
ePRICE SpA - November 2017 17
More than 1k products at Eu 0.99 across 18 days of November thru to Black Friday From Black Friday to Cyber Monday hundreds of highly discounted products
Reach: up to 96.3%, +31% vs TV only GRPS: up to 1,650, + 168% vs TV only
ADV focused on selling in stock MDAs&TV, aggressive pricing and «xmas gifts» of value-added services provided by ePRICE in local areas
ePRICE SpA - November 2017 19
(1) WEEE: Waste Electrical & Electronic Equipment Directive (2012/19/EU). (2) Based on about 2.218 feedbacks
IMPRESSIVE 3P MARKETPLACE PATTERN GROWTH IN 9M 17
| Profit & Loss w/o VC | 9M 2017 | 9M 2016 | 9M YOY |
|---|---|---|---|
| GMV | 178.3 | 163.2 | 9.3% |
| Total Revenues | 133.2 | 127.2 | 4.7% |
| Cost of Revenues | -113.6 | -107.7 | 5.5% |
| Gross Profit | 19.6 | 19.5 | 0.4% |
| Gross Margin % | 14.7% | 15.3% | |
| Sales & Marketing | -8.7 | -7.1 | 22.8% |
| Fullfilment | -13.5 | -12.3 | 9.7% |
| IT | -1.4 | -1.0 | 37.1% |
| G&A | -6.0 | -6.0 | 0.1% |
| EBITDA ADJUSTED | -10.0 | -6.9 | 45.0% |
| Ebitda Adjusted % | -7.5% | -5.4% | |
| Non recurring costs | -1.0 | -0.7 | 58.0% |
| EBITDA | -11.1 | -7.6 | 46.1% |
| Ebitda % | -8.3% | -6.0% | |
| EBIT | -16.2 | -10.5 | 54.2% |
| Ebit % | -12.1% | -8.2% | |
| - | |||
| EBT from continuing operations | -16.5 | -11.0 | 50.5% |
| Ebt % | -12.4% | -8.6% | |
| EBT from discontinued activies | 0.7 | 13.9 | |
| Net result | -15.8 -11.9% |
3.0 2.3% |
GM down by 60 bps vs. 9M 16 mainly due H1 competitive pressure and promotions, partially compensated by the positive contribution of marketplace and infocommerce. GM slightly improved in Q3 17, net of one off infocommerce contract registered in Q3 16.
S&M up 23% in 9M (including TV in H1), but down 6.4% YoY in Q3, benefitting also from lower costs of one off infocommerce contract and TV campaign (started September 2016). ADV+FS+GM at 7.1% of revenues in 9M 17 vs. 6.7% in 9M 16
IT costs increased due to SAP&IT platforms set up & maintenance costs G&A flat in 9M and down by 8.2% in Q3 17 vs Q3 16
Non recurring items includes one off costs Eu 0.7 mn related to SAP and logistics for the new Fulfilment Center, the remaining related to SOP
Please note that 2016 was positively impacted from the Eu 13.9 mn capital gain of Saldiprivati and Banzai Media disposal
| Cash flow | 9M 2017 | 9M 2016 | Var % |
|---|---|---|---|
| Net result | -16.5 | -11.0 | 51% |
| D&A | 4.7 | 2.9 | 64% |
| Other non cash items | 1.1 | 1.3 | -12% |
| Change in WC | -13.7 | -8.2 | 67% |
| Cash flow from operations | -24.3 | -15.0 | 62% |
| Cash flow operting from discontinued activities | 0.0 | -4.8 | |
| Net capex | -10.5 | -5.9 | 77% |
| Acquisition | -2.3 | -0.9 | 152% |
| Cash flow from investing activities | -12.7 | -6.8 | 87% |
| Cash flow investing from discontinued activities | 1.2 | 30.4 | |
| Change in net equity | 1.0 | 0.0 | |
| Dividend paid | -5.2 | ||
| Treasury stock | -0.4 | -1.1 | |
| Change in financial credit (credit card) | 0.3 | -0.2 | |
| Change in bank debt | 3.5 | -8.5 | -59% |
| Cash flow from financing activities | -0.7 | -9.8 | -93% |
| CASH FLOW | -36.5 | -6.0 | |
| Cash position at the beginning of semester | 54.7 | 33.5 | |
| Cash position at the end of semester | 18.2 | 27.6 |
Eu mn
| Balance Sheet | FY 2016 | H1 2017 | 9M 2017 |
|---|---|---|---|
| Property, plant and equipment | 3.0 | 6.7 | 8.1 |
| Goodwill | 14.3 | 14.3 | 14.3 |
| Intangible assets | 12.6 | 14.0 | 14.0 |
| Financial assets | 4.0 | 5.0 | 5.7 |
| TOTAL ASSETS | 33.9 | 40.0 | 42.1 |
| NWC | (4.4) | 2.3 | 7.5 |
| Deferred tax assets | 9.7 | 9.7 | 9.7 |
| Provisions | (2.1) | (2.1) | (2.0) |
| Other non current debts | (0.4) | (0.4) | (0.4) |
| Net Invested Capital | 36.7 | 49.5 | 56.9 |
| Net Equity | 92.9 | 78.4 | 72.7 |
| Net Financial Position | (56.2) | (28.9) | (15.7) |
| Total Sources | 36.7 | 49.5 | 56.9 |
Slower than expected 9M also due to market performance, but solid growth on Core Categories Revenues and 1P sales related to "Family Capex" (MDA, A/C, TV)
Accelerating shift to Marketplace on other categories to effectively cover demand for lower ticket categories and long tail products (>15% of GMV q3 and YoY)
Consolidated leading position of TV category
Last mile Services & Warranties growing with increasing attach rate
New fulfilment center in Truccazzano now serves 1P and 3P sales, including Showroomprive
Marketing push focused on Q4 campaign to address Black Friday and Christmas opportunity
Focus of first party offer on «core» categories, and accelerated marketplace shift on mass market products
ePRICE highlights that, also due to the negative trend registered by the reference market, the first nine months of 2017 results showed a slowdown in growth trends with respect to initial expectations. Historically, the last quarter of the year impacts significantly the results of the full year, and as a reference, in 2016 the last quarter represented around 36% of the overall GMV and revenues of the year.
Therefore, the likelihood of ePRICE reaching its target of profitability improvement, as set out in the guidance disclosed last September, is strictly linked to the trend in the reference market and to the results that will be achieved in this last quarter of the year; as already stated, a marketing push through a TV and radio campaign has been also planned for the last quarter of the year.
ePRICE further highlights that the Net Financial Position historically improves in the last quarter of the year, thanks to business seasonality. We therefore expect the Net Financial Position at the end of the year to improve with respect to 9M17.
STRATEGIC GUIDELINE
TARGET 2021 METRICS
| Stock | Mkt cap | 3M | 6M | 1Y |
|---|---|---|---|---|
| ePRICE (BANZAI) | 114 | -23.9% | -33.3% | -14.2% |
| AO World Plc | 479 | -11.4% | -29.6% | -37.1% |
| Verkkokauppa.com Oy | 361 | -8.8% | -3.0% | 17.6% |
| ASOS plc | 4,794 | -3.8% | -5.6% | 20.4% |
| Zalando SE | 9,915 | 0.9% | 0.7% | 14.9% |
| YOOX Net APorter S.p.A. | 2,648 | 4.7% | 13.0% | 14.9% |
| boohoo.com Plc | 2,241 | -18.6% | 6.3% | 68.7% |
| SRP Groupe SA | 356 | -40.8% | -58.3% | -38.8% |
| MySale Group plc | 180 | 15.7% | 11.3% | 28.8% |
| FTSE Italy | 334,526 | 3.0% | 3.9% | 31.7% |
| FTSE Italia Star | 20,380 | 3.9% | 4.2% | 45.2% |
| Bechtle AG | 2,985 | 21.5% | 28.8% | 54.3% |
| Groupe LDLC SA | 126 | -23.3% | -24.7% | -39.5% |
| zooplus AG | 1,029 | -9.4% | -18.9% | 12.4% |
| Shop Apotheke Europe NV | 467 | 31.2% | 44.7% | |
| Groupe LDLC SA | 126 | -23.3% | -24.7% | -39.5% |
| Solutions 30 SE | 662 | 6.4% | 33.9% | 114.0% |
| HomeServe plc | 2,724 | 14.6% | 19.2% | 36.1% |
Source: Factset
| Stock | Mkt cap | EV/Sales 2016 |
EV/Sales 2017 |
EV/Sales 2018 |
EV/Ebitda 2016 |
EV/Ebitda 2017 |
EV/Ebitda 2018 |
|---|---|---|---|---|---|---|---|
| ePRICE (BANZAI) | 114 | 0.3 | 0.5 | 0.5 | n.m. | n.m. | n.m. |
| AO World Plc | 479 | 0.7 | 0.5 | 0.5 | n.m. | 209.9 | 38.1 |
| Verkkokauppa.com Oy | 361 | 0.9 | 0.8 | 0.7 | 23.6 | 26.3 | 19.4 |
| ASOS plc | 4,794 | 3.2 | 2.4 | 1.9 | 48.8 | 38.0 | 27.8 |
| Zalando SE | 9,915 | 2.4 | 2.0 | 1.6 | 33.2 | 32.8 | 25.4 |
| YOOX Net APorter S.p.A. | 2,648 | 2.0 | 1.8 | 1.5 | 26.1 | 23.0 | 16.7 |
| boohoo.com Plc | 2,241 | 7.4 | 3.9 | 2.9 | 61.6 | 41.9 | 29.8 |
| SRP Groupe SA | 356 | 0.5 | 0.4 | 0.3 | 9.3 | 13.1 | 8.3 |
| MySale Group plc | 180 | 1.1 | 1.1 | 0.9 | 51.3 | 34.4 | 24.7 |
| Bechtle AG | 2,985 | 0.9 | 0.8 | 0.7 | 16.5 | 14.3 | 12.5 |
| Groupe LDLC SA | 126 | 0.3 | 0.4 | 0.3 | 8.9 | 10.7 | 8.5 |
| zooplus AG | 1,029 | 1.1 | 0.9 | 0.7 | 50.5 | 84.7 | 46.6 |
| Shop Apotheke Europe NV | 467 | 2.5 | 1.6 | 0.9 | n.m. | n.m. | 608.0 |
| Solutions 30 SE | 662 | 3.6 | 2.5 | 1.8 | 39.4 | 27.4 | 19.5 |
| HomeServe plc | 2,724 | 3.8 | 3.2 | 2.9 | 19.4 | 15.7 | 14.1 |
Source: Factset
2011-2016 (2011=100)
| 2016 Italian retail Market value | Eu bn |
|---|---|
| Italian Retail Market value |
240 |
| Italian Online Total Retail Market value | 10 |
| ePRICE Addressable Retail Market value |
14.5 |
| Online Tech&Appliances Market Retail |
1.7 |
| Pure online Players Tech&Appliances Market |
c. 1.0 |
• Multi-specialist Approach
Conceptual chart representing a selected number of relevant players
Paolo Ainio Founder & Executive Chairman
Pietro Scott Jovane CEO
The share capital of ePRICE S.p.A. is equal to Euro 826,297 composed by n. 41,314,850 ordinary shares without par-value.
| RELEVANT SHAREHOLDERS | NUMBER OF SHARES | % SHARE CAPITAL |
|---|---|---|
| Paolo Ainio1 | 9,447,615 | 22.87% |
| Arepo BZ S.a.r.l. |
8,613,850 | 20.85% |
| Pietro Boroli | 2,138,997 | 5.18% |
| Treasury Shares |
1,023,202 | 2.48% |
(1) of which 221.750 (0,54%) held trough PUPS S.r.l., 80% controlled by Paolo Ainio
There are no other shareholders, outside of those listed above, with a shareholding of more than 5% that have notified Consob and ePRICE S.p.A. according to art. 117 of Consob Regulation no. 11971/99 on notification requirements of major holdings.
| Nov 17 | Feb 18 |
Mar 18 | |||||||||||||||
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| M | T | W | T | F | M | T | W | T | F | M | T | W | T | F | |||
| 1 | 2 | 3 | 1 | 2 | 1 | 2 | |||||||||||
| 6 | 7 | 8 | 9 | 10 | 5 | 6 | 7 | 8 | 9 | 5 | 6 | 7 | 8 | 9 | |||
| 13 | 14 | 15 | 16 | 17 | 12 | 13 | 14 | 15 | 16 | 12 | 13 | 14 | 15 | 16 | |||
| 20 | 21 | 22 | 23 | 24 | 19 | 20 | 21 | 22 | 23 | 19 | 20 | 21 | 22 | 23 | |||
| 27 | 28 | 29 | 30 | 26 | 27 | 28 | 26 | 27 | 28 | 29 | 30 |
Feb 8, 2018 Preliminary FY 17 Sales
Mar 8, 2018 Full FY 17 results
Via San Marco 29
20121 Milan, Italy
corporate.eprice.it
Micaela Ferruta
Head of Investor Relations and Strategic Planning
+39 0230315400
Investors.eprice.it
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