Investor Presentation • Jun 22, 2017
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ePRICE SpA - June 2017 0 BERENBERG PAN-EUROPEAN DISCOVERY CONFERENCE 22 JUNE 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 June be forward-looking statements based on ePRICE S.p.A.'s current expectations and projections about future events, and in this respect June involve some risks and uncertainties.
Actual future results for any quarter or annual period June 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.
Pietro Scott Jovane CEO
Micaela Ferruta Head of IR and Strategic Planning
| Q1 2016 | Q2 2016 | Q3 2016 | Q3/Q4 2016 | Q4 2016 | Q1 2017 |
|---|---|---|---|---|---|
| Launch of Home Service |
Sale of Banzai Media |
New brand identity & TV campaign |
Sale of Saldiprivati |
New Strategic Guidelines 2017-2021 |
Change of Name & Ticker |
| • 35% population coverage at launch • +50% NPS(1) vs. prev. svcs |
• 45 €M EV • 17.5 €M capital gain • 3Y agreement w/ Mediaset to purchase TV ADV, 7 €M benefit |
• 10 €M ADV campaign in 3 years • 8M people reached on 35-54 y.o. target |
• 38 €M EV • 7.8 €M capital gain • 5Y agreement to manage fullfillment for SRP Italian activities. |
• • +4/6% M/S Online Tech market • +4/6% M/S Home Service market • 3X GMV by 21 • 4-6% Ebitda margin by 21 |
+46% Q4 16 Share Performance |
ePRICE SpA - June 2017 4 (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.
2
3
A UNIQUE VALUE PROPOSITION TAILORED TO THE ITALIAN MARKET, SUPPORTED BY A FLEXIBLE AND SCALABLE PLATFORM
SIGNIFICANT TRACK RECORD AND GMV/REVENUE GROWTH TO GENERATE VALUE THROUGH SCALE & RELEVANCE, IN ORDER TO
(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. GMV from services does not include B2B, ADV&Infocommerce.
133 Pick&Pay 285 Lockers 1 Fulfilment center
Q1 17 TTM Eu 262mn GMV(1) Eu 201mn Revenues
~1.6mn customers(2) ~500 installers (3) <1000 merchants
TTM Growth: +18% YoY GMV(1) +14% YoY Rev
(2) Customers who bought at least once on ePRICE or on the marketplace (3) ePRICE Home Service
REACH PROFITABILTY
"To serve the technological evolution of Italian households"
V-shaped growth in the Quarter: Strong positive growth in January and March offset – as expected – by February weak trends, the latter impacted by planned SAP adoption, limited promotions and to a lower extent by a slow retail market
Solid YoY Growth on Core MDA Segment (> 30% market share confirmed in Q1 in ePRICE's core category), and 3P Marketplace Boost.
Improved Gross margin vs Q1 16, thanks to marketplace contribution and improved relationship with brands (rebates/Infocommerce)
Reduced Net Loss vs Q1 16, thanks to first earn-out from last year's sale of Banzai Media to Mondadori
5 Eu 40.7mn Net Cash position, partially impacted by SAP and seasonality (inventory and payables)
Tech & Appliances Retail in Italy B2C Sales (market Eu BN)
| Traditional Tech&Appliances MKT Q1 17 |
Online Tech&Appliances MKT (2) Q1 17 |
Tech&Appliances ePRICE GMV Q1 17 |
|---|---|---|
| -3.0% | +9.0% | +13% |
2) LFL growth q1 17. Including restatement of offline players' Click&Collect sales (included from 2016), market up c. +12% YoY. Source: ePRICE re-elaborations on last available GFK data and internal estimates.
1) €3.5BN Market size for current Technology & Appliances perimeter. Smart Home market estimate (€0.5BN) not included. Source: ePRICE re-elaboration on Forrester Research, GFK, other public sources and internal estimates, 2016.
March: Strong recovery of ePRICE performance in March, resuming ordinary marketing/promotional activities (TV commercial back on air in Q2), including positive calendar effect.
(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, ADV&Infocommerce and other revenues. GMV from services does not include B2B, ADV&Infocommerce.
| Profit & Loss w/o VC | Q1 2017 | Q1 2016 | Q1 YOY |
|---|---|---|---|
| ACT | ACT | ||
| GMV | 60.5 | 53.1 | 13.8% |
| Total Revenues | 45.8 | 42.2 | 8.4% |
| Cost of Revenues | -38.6 | -35.8 | 7.7% |
| Gross Profit | 7.2 | 6.4 | 12.4% |
| Gross Margin % | 15.7% | 15.2% | |
| Sales & Marketing | -2.6 | -2.0 | 33.6% |
| Fullfilment | -4.8 | -4.2 | 15.4% |
| IT | -0.2 | -0.3 | -20.7% |
| G&A | -1.9 | -2.1 | -5.6% |
| EBITDA ADJUSTED | -2.4 | -2.1 | 15.8% |
| Ebitda Adjusted % | -5.3% | -5.0% | |
| Non recurring costs | -0.4 | -0.1 | 250.9% |
| EBITDA | -2.8 | -2.2 | 28.1% |
| Ebitda % | -6.2% | -5.2% | |
| EBIT | -4.3 | -3.0 | 41.4% |
| Ebit % - |
-9.4% | -7.2% | |
| EBT from continuing operations | -4.5 | -3.1 | 43.0% |
| Ebt % | -9.8% | -7.4% | |
| EBT from discontinued activies | 0.7 | -1.1 | |
| Net result | -3.8 | -4.2 | -10.8% |
| -8.3% | -10.0% |
| Cash flow | Q1 2017 ACT |
Q1 2016 ACT |
Var % |
|---|---|---|---|
| Net result | -4.5 | -3.1 | 45% |
| D&A | 1.5 | 0.8 | 88% |
| Other non cash items | 0.4 | 0.2 | 100% |
| Change in WC | -8.9 | -1.8 | 394% |
| Cash flow from operations | -11.5 | -3.9 | n.m. |
| Cash Flow from operations from discontinued activities | 0.0 | 0.7 | n.m. |
| Net capex | -3.5 | -1.5 | n.m. |
| Acquisition | -0.3 | -0.1 | n.m. |
| Cash flow from investing activities | -3.8 | -1.6 | n.m. |
| Cash flow from investing from discontinued activities | 0.0 | -1.8 | n.m. |
| Change in net equity | 0.1 | 0.0 | n.m. |
| Treasury stock | -0.2 | 0.0 | n.m. |
| Change in financial credit (credit card) | 0.9 | 0.0 | n.m. |
| Change in bank debt | 4.2 | -0.6 | n.m. |
| Cash flow from financing activities | 5.0 | -0.6 | n.m. |
| Cash Flow | -10.3 | -7.2 | 43% |
| Cash position at the beginning of quarter | 54.7 | 33.5 | |
| Cash position at the end of quarter | 44.4 | 26.3 |
| Balance Sheet | 31/12/16 | 31/03/17 | PROFORMA 31/03/16 |
|---|---|---|---|
| Property, plant and equipment | 3.0 | 3.8 | |
| Goodwill | 14.3 | 14.3 | |
| Intangible assets | 12.6 | 13.8 | |
| Financial assets | 4.0 | 4.1 | |
| TOTAL ASSETS | 33.9 | 36.0 | 29.2 |
| NWC | (4.4) | 5.0 | (1.7) |
| Deferred tax assets | 9.7 | 9.7 | 9.9 |
| Provisions | (2.1) | (2.0) | (2.0) |
| Other non current debts | (0.4) | (0.4) | 0.0 |
| Net Invested Capital | 36.7 | 48.3 | 35.4 |
| Net Equity | 92.9 | 89.0 | N/A |
| Net Financial Position | (56.2) | (40.7) | N/A |
| Total Sources | 36.7 | 48.3 | 35.4 |
Negative WC trends due to:
Will go back to normalised level
Acquisition of 43% in Termostore.it Goal: addressing heating&cooling products and service market with a
60 sellers with at least one order at P&P
ePRICE SpA - June 2017 17
Confirmed stronger GMV(1) growth than reference market
Continue to enrich last mile services, with increasing coverage and further innovation expected in 2017
Resuming brand equity building through Q2 & Q3 (TV on Air from June 7th)
Expecting to gain traction from Q2 17, after June's negative calendar effect, due to long Easter holidays
2017 Guidance disclosed in March 17 reaffirmed
ePRICE SpA - June 2017 20 (1) GMV (Gross Merchandise Volume): it includes revenue from products, deliveries and revenue from 3P marketplace, net of returns and VAT included. It does not include B2B, infocommerce.
GMV1 up 20-25%, Revenues up 15-18%, with an accelerated growth in the second half of the year, after a weak February, adversely affected by the planned transition of the ERP system to SAP
Improvement in Gross margin and considerable increase in EBITDA compared to 2016
Capex to Euro 11 million, including one-off investments for the new fulfilment center
ePRICE SpA - June 2017 21 (1) GMV (Gross Merchandise Volume): it includes revenue from products, deliveries and revenue from 3P marketplace, net of returns and VAT included. It does not include B2B, infocommerce.
ePRICE SpA - June 2017 23 (1) based on nature of services (delivery, warranties, custom fit, maintenance & repair, B2B2C)
2021 TARGETS
Stores distribution (red dots opened after IPO)
Free VIP Programs launch in 2017 Test "Next Gen" Pick&Pay format in 2017 2X Order frequency vs. courier NPS > 80 Higher customer satisfaction (1)
CURRENT AND 2021 TARGETS
ePRICE SpA - June 2017 25 (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.
STRATEGIC GUIDELINE
TARGET 2021 METRICS
| FY 15 | FY 16 | TARGET 2021 | DRIVERS | |
|---|---|---|---|---|
| MARKET GROWTH | 20% | 20% (4) | 15-16% >2X |
Secular shift from offline, mobile, innovation |
| (1) GMV |
€207M | €254M | 3X ~ |
Market Growth, MDA, 3P Marketplace |
| REVENUES | €168M | €198M | 2.5X ~ |
Market Growth, B2B, ADV, Infocommerce |
| (2) GROSS MARGIN |
13.8% | 15.3% | 20%-22% | Mix&sourcing, Rebates, 3P Marketplace, Infocommerce |
| (2) MARKETING |
5.3% | 5.6% | 4.5%-5.0% | Brand Awareness, Returning Customers |
| FULFILMENT (2) TRANSPORT |
3.5% | 4.4% | 5.0%-5.5% | Now including Transport&Installation service |
| FULFILMENT (2) INTERNAL |
5.0% | 5.2% | 3.8%-4.3% | New fulfilment center, scale & efficiency program |
| (3) IT + G&A |
4.6% | 4.9% | 1.8%-2.5% | Efficiencies and scalability |
| (2) EBITDA adj. |
-4.7% | -4.8% | 4%-6% | #1 specialty player, enhanced by services |
| (2) CAPEX |
4.5% | 3.8% | 1.5%-2.0% | 2017 new fulfilment, Eu 5mn |
ePRICE SpA - June 2017 31 (1) GMV (Gross Merchandise Volume): it includes revenue from products, deliveries and revenue from 3P marketplace, net of returns and VAT included. Infocommerce and Advertising and B2B revenues not included., representing c. 6% of revenues in 9M16; (2) % of revenues incl non recurring; (3) % of revenues: of which 35% corporate&finance costs due to being listed; (4) LFL growth 2016 vs 2015. Including restatement of offline players' Click&Collect sales (included from 2016), market up c. +24% YoY.
ePRICE SpA - June 2017 33
| Peer Group - Absolute Performances | Multiple Entities Report (Local Currency) as of 06/19/17 | |||||||
|---|---|---|---|---|---|---|---|---|
| Stock | Price | Mkt cap | Ccy | 1M | 3M | 6M | 1Y | |
| ePRICE (BANZAI) | 3.8 | 155 | EU | -4.9% | -3.0% | 7.1% | 7.0% | |
| AO World Plc | 1.3 | 580 | GBP | -15.5% | -14.5% | -31.3% | -19.1% | |
| Verkkokauppa.com Oy | 8.2 | 367 | EU | 1.2% | 9.7% | 12.4% | 20.2% | |
| ASOS plc | 61.8 | 5,153 | GBP | 0.4% | 4.3% | 26.8% | 78.5% | |
| Zalando SE | 44.7 | 11,065 | EU | 11.4% | 19.5% | 24.6% | 73.2% | |
| YOOX Net APorter S.p.A. | 23.3 | 2,122 | Eu | -8.7% | 5.0% | -13.0% | 6.0% | |
| boohoo.com Plc | 2.5 | 2,919 | GBP | 35.6% | 62.2% | 92.2% | 358.1% | |
| SRP Groupe SA | 24.8 | 849 | EU | -4.5% | 8.5% | 24.7% | ||
| MySale Group plc | 1.1 | 176 | GBP | 6.0% | 8.3% | 14.6% | 67.0% | |
| FTSE Italy | 133.1 | 305,060 | -2.5% | 4.9% | 10.0% | 22.0% | ||
| FTSE Italia Star | 35,039.7 | 18,872 | 0.7% | 10.2% | 32.6% | 47.9% |
Source: Factset
| Peer Group - Multiple Comparison | Multiple Entities Report (Local Currency) as of 06/19/17 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Stock | Price | Mkt cap | Ccy | EV/Sales 2016 |
EV/Sales 2017 |
EV/Sales 2018 |
EV/Ebitda 2016 |
EV/Ebitda 2017 |
EV/Ebitda 2018 |
| ePRICE (BANZAI) | 3.8 | 155 | EU | 0.5 | 0.5 | 0.4 | 49.9 | ||
| AO World Plc | 1.3 | 580 | GBP | 0.8 | 0.7 | 0.6 | 263.4 | 42.0 | |
| Verkkokauppa.com Oy | 8.2 | 367 | EU | 0.9 | 0.8 | 0.7 | 24.1 | 18.8 | 15.3 |
| ASOS plc | 61.8 | 5,153 | GBP | 3.5 | 2.6 | 2.1 | 53.3 | 40.6 | 30.1 |
| Zalando SE | 44.7 | 11,065 | EU | 2.8 | 2.3 | 1.8 | 38.6 | 31.3 | 23.2 |
| YOOX Net APorter S.p.A. | 23.3 | 2,122 | Eu | 1.6 | 1.4 | 1.2 | 21.1 | 17.4 | 12.6 |
| boohoo.com Plc | 2.5 | 2,919 | GBP | 9.7 | 5.6 | 4.3 | 80.0 | 55.1 | 42.3 |
| SRP Groupe SA | 24.8 | 849 | EU | 1.4 | 1.0 | 0.8 | 25.9 | 17.9 | 12.5 |
| MySale Group plc | 1.1 | 176 | GBP | 1.1 | 1.0 | 0.8 | 49.9 | 30.7 | 23.0 |
| E-Commerce Average | 3.1 | 2.2 | 1.8 | 36.8 | 48.7 | 32.0 | |||
| E-Commerce Median | 1.6 | 1.4 | 1.1 | 32.0 | 26.2 | 21.6 | |||
| E-Commerce Median ex Amazon, eBay, Rocket, Naspers | 1.6 | 1.4 | 1.1 | 32.0 | 26.2 | 21.6 |
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 |
Market Shares in Online Tech & Appliance Retail in Italy (% Total B2C Sales, 2016 estimate)
• Multi-specialist Approach
Conceptual chart representing a selected number of relevant players
Source: Company Information.
The share capital of ePRICE S.p.A. is equal to Euro 825,047 composed by n. 41,252,350 ordinary shares without par-value.
| RELEVANT SHAREHOLDERS | NUMBER OF SHARES | % SHARE CAPITAL |
|---|---|---|
| Paolo Ainio1 | 9,447,615 | 22.90% |
| Arepo BZ S.a.r.l. |
8,613,850 | 20.88% |
| Pietro Boroli | 2,138,997 | 5.19% |
| Treasury Shares |
903,512 | 2.19% |
(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.
| April | June | Jul | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| M | T | W | T | F | M | T | W | T | F | M | T | W T |
F | ||||
| 3 | 4 | 5 | 6 | 7 | 1 | 2 | 3 | 4 | 5 | 3 | 4 | 5 | 6 | 7 | |||
| 10 | 11 | 12 | 13 | 14 | 8 | 9 | 10 | 11 | 12 | 10 | 11 | 12 | 13 | 14 | |||
| 17 | 18 | 19 | 20 | 21 | 15 | 16 | 17 | 18 | 19 | 17 | 18 | 19 | 20 | 21 | |||
| 24 | 25 | 26 | 27 | 28 | 22 | 23 | 24 | 25 | 26 | 24 | 25 | 26 | 27 | 28 | |||
| 29 | 30 | 31 | 31 | ||||||||||||||
June 10 Q1 17 Full Results
Jul 25 Preliminary H1 17 sales
Sep 13 H1 17 Full Results
Via San Marco 29
20121 Milan, Italy
corporate.eprice.it
IR
Head of Investor Relations and Strategic Planning – ePRICE S.p.A.
+39 0230315400
Investors.eprice.it
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