Investor Presentation • Apr 4, 2017
Investor Presentation
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INTERMONTE ROADSHOW, NEW YORK, 4 APRIL 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 may be forward-looking statements based on ePRICE S.p.A.'s current expectations and projections about future events, and in this respect may involve some risks and uncertainties.
Actual future results for any quarter or annual period may 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
2
3
LOCAL E-COMMERCE CHAMPION FOCUSED ON CAPTURING A HIGH-POTENTIAL, FAST-GROWING MARKET
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 REACH PROFITABILTY
(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.
ePRICE SpA - March 2017 4 (2) Customers who bought at least once on ePRICE or on the marketplace. (3) Home Service
+23% YoY GMV(1) +18% YoY Rev
133 Pick&Pay 309 Lockers 1Fulfilment center
FY 16 Eu 254mn GMV(1) Eu 178mn Revenues
~1.6mn customers(2) ~500 installers (3) ~900 merchants
| Q1 2016 Launch of Home Service |
Q2 2016 Sale of Banzai Media |
Q3 2016 New brand identity & TV campaign |
Q3/Q4 2016 Sale of Saldiprivati |
Q4 2016 New Strategic Guidelines 2017-2021 |
Q1 2017 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 - March 2017 5 (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.
OUR NEW, SERVICE-DRIVEN MISSION
"To serve the technological evolution of Italian households"
1
From Banzai to ePRICE: sale of Vertical Content division for Eu 45 mn (EV) and Saldiprivati for Eu 38 mn (EV). ePRICE expected to close 2016 with a profit, including capital gain from disposals.
ePRICE 2021 Strategic Guidelines presented, calling for: 3x GMV, 4-6% EBITDA margin by end of plan and cash positive from 2019 driven by: 1) focus on MDA and service driven categories; 2) 3P marketplace growth and 3) focus on services and innovation.
FY 16 results: GMV (1) up 23% YoY in 2016 (21% in Q4 16), driven by 18% YoY revenue growth and +123% of Marketplace GMV. +150bps improvement in Gross Margin. Eu 10 mn net profit and Eu 56 mn net cash, thanks to disposals completed in 2016.
ePRICE SpA - March 2017 7 (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.
| • Economic stagnation drives online growth opportunity |
|
|---|---|
| • 7M of new buyers are coming: marketing & fulfilment investment is still a |
|
| STRATEGIC TAKEAWAYS | critical factor |
| • Brick & mortar weakened by extended slow sales. Hence Consolidation / |
|
| M&A |
Tech & Appliances Retail in Italy B2C Sales (market Eu BN)
| Traditional Tech&Appliances 2016 |
Online (2) Tech&Appliances 2016 |
Tech&Appliances ePRICE GMV 2016 |
|---|---|---|
| +1.0% | c.+20% | +24% |
(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.
(2) LFL growth 2016 vs 2015. Including restatement of offline players' Click&Collect sales (included from 2016), market up c. +24% YoY. Source: ePRICE re-elaborations on GFK and internal estimates.
Market Shares in Online Tech & Appliance Retail in Italy (% Total B2C Sales, 2016 estimate)
ePRICE SpA - March 2017 12
2021 TARGETS
Stores distribution (red dots opened after IPO)
CURRENT AND 2021 TARGETS
• Saturation drives distribution efficiency
vs. courier
ePRICE SpA - March 2017 13 (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.
satisfaction
ePRICE SpA - March 2017 17
ePRICE SpA - March 2017 18 (1) based on nature of services (delivery, warranties, custom fit, maintenance & repair, B2B2C)
STRATEGIC GUIDELINE
TARGET 2021 METRICS
| FY 15 | FY 16 | TARGET VS. 16 | 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 - March 2017 21 (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 - March 2017 24
In 2016 ePRICE posted c. +23% YoY GMV growth and +18% YOY for revenues, ahead of 2016 guidance (updated in November).
ePRICE SpA - March 2017 25 (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.
Positive effect of Infocommerce revenues, up over 50% YoY, as our size increases and to a lower extent thanks to special initiatives.
(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.
(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.
(2) Services&other have been restated and now include warranties.
3P marketplace, net of returns and VAT included
Improvement in consumer perception post campaign (1)
| "QUALITY OF HOME SERVICE" |
+14 P.P. |
|---|---|
| "BETTER THAN OTHER | +12 |
| RETAILERS" | P.P. |
| "WIDE RANGE OF | +10 |
| PRODUCTS" | P.P. |
ePRICE SpA - March 2017 29 (1) Source: Mindshare Survey Commissioned by ePRICE, 2017 (2) Average number of orders growth since kick-off of ADV Campaign vs. average annual number of orders
ePRICE SpA-- March 2017 30 (1) WEEE: Waste Electrical & Electronic Equipment Directive (2012/19/EU).
(2) Based on about 2.218 feedbacks
Boost Factor 2017
-P&P usage: Since December, items ordered in 3P marketplace can be delivered also through Pick&Pay Network -Payments: ePRICE is the first marketplace in Europe where goods sold by 3P merchants can be paid on delivery by POS and soon by cash at P&P stores
Eu mn
| Profit & Loss | Q4 15 PF | Q4 16 | Q4 YOY | FY 15 PF |
FY 16 |
FY 16 YOY |
|---|---|---|---|---|---|---|
| GMV | 75.6 | 91.3 | 20.7% | 207.3 | 254.4 | 22.7% |
| Total Revenues | 61.0 | 70.7 | 15.9% | 167.7 | 197.9 | 18.0% |
| Cost of Revenues | (52.9) | (60.0) | 13.3% | (145) | (167,7) | 16.0% |
| Gross Profit | 8.1 | 10.7 | 32.8% | 23.1 | 30.2 | 30.5% |
| Gross Margin % | 13.2% | 15.1% | 13.8% | 15.3% | ||
| Sales & Marketing | (4.0) | (3.9) | -2.4% | (8.9) | (11.0) | 23.5% |
| Fullfilment | (5.2) | (6.6) | 28.6% | (14.3) | (19.0) | 32.3% |
| IT | (0.3) | (0.4) | 33.2% | (1.1) | (1.4) | 34.6% |
| G&A & Holding | (2.1) | (2.3) | 11.0% | (6.7) | (8.3) | 23.2% |
| ADJUSTED EBITDA | (3.5) | (2.6) | -26.5% | (7.9) | (9.5) | 20.2% |
| Adjusted EBITDA% | -5.8% | -3.7% | -4.7% | -4.8% | ||
| Non recurring costs | (0.1) | 0.5 | -709.3% | (0.9) | (0.2) | |
| EBITDA | (3.6) | (2.1) | -40.7% | (8.8) | (9.7) | |
| Ebitda % | -5.9% | -3.0% | -5.3% | -4.9% | ||
| EBIT | (4.7) | (3.5) | (11.9) | (14.0) | ||
| Ebit % | -7.8% | -5.0% | -7.1% | -7.1% | ||
| - | ||||||
| EBT from continuing operations | (4.9) | (3.7) | (12.2) | (14.7) | ||
| Taxes | 2.6 | 2.6 | ||||
| EBT from discontinued activities | 0.4 | 10.9 | (1.2) | 24.8 | ||
| Net Result | (1.8) | 7.1 | n.m. | (10.8) | 10.1 | n.m. |
FY 16 Revenues up +18% YoY (and +22.7% growth in GMV) , with Q4 recovering Q3 slowdown (+8% YoY)
FY 16 Gross margin improving by 150 bps vs. FY 15 and +190 bps in 4Q16, thanks to better mix, marketplace contribution and infocommerce
4Q16 S&M costs down 2.4% YoY, thanks to lower ADV TV cost vs. Q4 15, thanks to Mondadori agreement
Reduced Q4 Ebitda Loss by c. Eu 1mn (200 bps), thanks to lower S&M costs.
One offs: Stock options and restructuring charges partially offset by positive impact of Eu 1mn tax credit on 2016 R&D
Eu 10mn Net Profit in FY 16, thanks to Eu 24.8 mn Capital gain on Banzai Media and Saldiprivati
ePRICE SpA - March 2017 32 (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. (2) Pro-forma: adjusted for the sale of Banzai Media and Saldiprivati
| Balance Sheet | 31/12/15 | 31/12/15 ProForma |
31/12/16 |
|---|---|---|---|
| TOTAL ASSETS | 55.9 | 28.8 | 33.9 |
| NWC | 0.8 | (3.5) | (4.4) |
| Deferred tax assets | 11.9 | 9.7 | 9.7 |
| Provisions | (3.7) | (2.0) | (2.1) |
| Other non current debts | (4.0) | 0.0 | (0.4) |
| Net Invested Capital | 60.9 | 33.0 | 36.7 |
| Net Equity | 84.1 | n.a. | 92.9 |
| Net Financial Position | (23.2) | n.a | (56.2) |
| Total Sources | 60.9 | 33.0 | 36.7 |
| Improved working capital, thanks to |
||||
|---|---|---|---|---|
| supplier payments optimization |
||||
| Eu 56 mn Net cash position as of |
||||
| December,31 2016, following cash in |
||||
| from disposals, and including | ||||
| Eu 1.8mn to buy c. 1.3% treasury |
||||
shares, as well as c. Eu 2.1mn advance payment on the TV adv contract.
| Cash Flow Highlights | FY 15 | FY 16 |
|---|---|---|
| Cash flow from Operations | -13.0 | -8.2 |
| CF from Op. from discontinued activities | 0.4 | |
| Net Capex tangible & intangibles | -7.6 | -7.6 |
| Change in other non current assets | -0.7 | -2.5 |
| Acquisitions | -0.3 | -1.5 |
| CF from Investment from discontinued activities | -6.4 | 52.2 |
| Cash flow from Investing Activities | -15.0 | 40.6 |
FY 16 Capex at Eu 7.6 mn, some Eu 2.5mn related to non recurring investments (IT Transformation Project)
includes Eu 2.1mn advance payment on TV 17-18 campaign
incremental stake) + Termostore (23%).
Refocus on ePRICE completed, with change of name effective during Q1 17
Confirmed stronger GMV(1) growth than reference market
Completed network of 133 Pick&Pay and 309 lockers, offering an excellent territorial coverage.
Continue to enrich last mile services, with increasing coverage and further innovation expected in 2017
Continue to build Brand equity
ePRICE SpA - March 2017 34 (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 - March 2017 35 (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 - March 2017 36
| Peer Group - Absolute Performances | Multiple Entities Report (Local Currency) as of 03/30/17 | ||||||
|---|---|---|---|---|---|---|---|
| Stock | Price | Mkt cap | Ccy | 3M | 6M | 1Y | |
| ePRICE (BANZAI) | 4.2 | 170 | EU | 2.6% | 54.5% | 6.5% | |
| AO World Plc | 1.4 | 594 | GBP | -22.3% | -16.6% | -18.4% | |
| Cnova NV | 5.3 | 2,388 | USD | -3.3% | -1.3% | 77.9% | |
| Verkkokauppa.com Oy | 7.4 | 331 | EU | -0.4% | 18.5% | -5.2% | |
| ASOS plc | 61.2 | 5,102 | GBP | 23.2% | 26.1% | 89.9% | |
| Zalando SE | 37.4 | 9,253 | EU | 3.1% | 0.7% | 29.7% | |
| YOOX Net APorter S.p.A. | 22.1 | 2,006 | Eu | -18.1% | -19.9% | -18.6% | |
| boohoo.com Plc | 1.7 | 1,882 | GBP | 24.3% | 64.2% | 278.5% | |
| SRP Groupe SA | 23.0 | 787 | EU | 7.9% | 19.7% | ||
| MySale Group plc | 1.0 | 149 | GBP | -12.4% | 4.0% | 127.0% |
Source: Factset
Source: Factset
• Multi-specialist Approach
Conceptual chart representing a selected number of relevant players
Source: Company Information.
The share capital of Banzai S.p.A. is equal to Euro 820.797 composed by n. 41.039.850 ordinary shares without par-value.
| RELEVANT SHAREHOLDERS | NUMBER OF SHARES | % SHARE CAPITAL |
|---|---|---|
| Paolo Ainio1 | 9,427,615 | 23.02% |
| Arepo BZ S.a.r.l. |
8,613,850 | 20.99% |
| Pietro Boroli | 2,138,997 | 5.21% |
| Treasury Shares |
835,425 | 2.03% |
(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 Banzai S.p.A. according to art. 117 of Consob Regulation no. 11971/99 on notification requirements of major holdings.
| April | May | July | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 23 | 24 | 25 | 24 | 25 | 26 | 27 | 28 |
| 29 | 30 | 31 | 31 |
| April 27 | Ordinary Shareholders Meeting |
|---|---|
| April 27 | Q1 17 Preliminary Sales |
| April 28 | Conference Call on Q1 17 Preliminary Sales |
| May 10 |
Q1 17 Full Results |
| July 25 |
Q2 17 Preliminary Sales and Conference Call |
Via San Marco 29
20121 Milan, Italy
corporate.eprice.it
Head of Investor Relations and Strategic Planning – ePRICE S.p.A.
+39 0230315400
Investors.eprice.it
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