Investor Presentation • Aug 4, 2020
Investor Presentation
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AUGUST 2020
This presentation has been prepared by ePRICE S.p.A. (the "Company"). As used herein, "Presentation" means this document, any oral presentation, the question and answer session and any written or oral material discussed or distributed during the presentation. The Presentation comprises written material/slides which provide information on the Company and its subsidiaries. The information contained in this Presentation has not been verified, approved or endorsed by or independently verified by any independent third party. Save where otherwise indicated, the Company is the source of the content of this Presentation. Care has been taken to ensure that the facts stated in this Presentation are accurate and that the opinions expressed are fair and reasonable. However, no representation or warranty, express or implied, is made or given by or on behalf of the Company, or the management or employees of the Company, or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this document or any other material discussed at the Presentation. None of the Company nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith.
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This Presentation may contain projections and forward looking statements which are based on current expectations and projections about future events, based on numerous assumptions regarding the Company's and the Company's subsidiaries' present and future business strategies and the environment in which the Company will operate in the future. Any such forward-looking statements involve known and unknown risks, uncertainties and other factors which are in some cases beyond the Company's control and which may cause the Company and the Company's subsidiaries actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Further, any forward-looking statements will be based upon assumptions of future events which may not prove to be accurate. Any such forward-looking statements in this Presentation will speak only as at the date of this Presentation and no one undertakes any obligation to update or revise any such forward-looking statements, whether in the light of new information, future events or otherwise. Given the aforementioned risks, uncertainties and assumptions, you should not place undue reliance on these forward looking statements as a prediction of actual results or otherwise. The information and opinions contained in this Presentation are provided as at the date of this presentation and are subject to change without notice.
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By attending this Presentation you agree to be bound by the foregoing limitations and represent that you are a person who is permitted to receive information of the kind contained in this Presentation. Furthermore, by attending this Presentation you represent being aware of all requirements and limitations provided by applicable securities laws and regulations regarding the distribution and dissemination of information or investment recommendations and you undertake not to breach any of such provisions. None of the Company, or any of their respective affiliates, members, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith.
Chairman at Risanamento
Chairman at Italtel
Vice-President of Banca Cesare Ponti
Board Member and Chairman of the executive committee of Banca Carige
Managing Director and General Manager at Il Sole 24 Ore and RCS Editori
GAETANO GASPERINI General Manager
16 years as marketing manager, purchasing director and Board Member of Metro Group
Managing Director at Skitsch, an innovative multichannel design company, Strategic Director at Dedon, the first global brand in outdoor furniture
General Manager at Mercatone Uno
General Manager at Promemoria
STEFANO CRESPI Chief Financial Officer
Great expertise in restructuring and turnaround cycles
CFO at Zucchi from 2008 to 2018, General Manager from 2016 to 2018
Finance and Administration Director and Chairman and CEO during the composition with creditors period and receivership at Investimenti e Sviluppo S.p.A. from 2005 to 2008
ePrice Group Overview
Strategic Guidelines of the Industrial Plan
Closing remarks
| Issuer | ePRICE S.p.A. |
|---|---|
| Offering type | Capital increase with pre-emptive subscription rights to ordinary shareholders |
| Offering size | Eu 19,998,712.93 |
| Offer price | 0.07 per share (30.43% discount to TERP) Eu |
| Option ratio | No. 211 new ordinary shares for every No. 30 ordinary shares |
| No. of new issued shares |
Up to 285,695,899 |
| No. of existing shares | 41,314,850 |
| No. of shares post capital increase | Up to 327,010,749 |
| Timing | Subscription period and pre-emptive rights: 3 August - 9 September /2020 Rights trading period: 3 August - 3 September /2020 |
| Subscription and Underwriting commitments |
Commitments to exercise subscription rights from certain shareholders (among which Paolo Ainio and VIS Value 4,211,9421 Partecipazioni S.r.l.) for a total amount of Eu Underwriting commitments from certain shareholders (among which Paolo Ainio and VIS Value Partecipazioni S.r.l.) to subscribe shares remaining unsubscribed after the auction of unexercised rights up to Eu 10,788,058 |
| Use of proceeds | Supporting the Industrial Plan funding needs and strengthening of the Company's financial structure |
ePRICE Rights Issue
Strategic Guidelines of the Industrial Plan
Closing remarks
A pure leading e-Commerce player focused on the Italian market, with a strong and well recognized brand and an integrated offer of additional premium value added services…
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1 Account, 4 Countries
Consumer Need Market Economics Go to Market Products A wide and extensive offer divided into two main categories…
Best-in-class proprietary platform ("Home Service") allowing a constant and direct interaction among customer, installer and ePRICE
marketplace relevance in Italy and abroad
A unique online offer to cover customer needs…
…powered by a complete e-Commerce platform
Value proposition of innovative solutions International Marketplace Network (IMN)1
Internationally connected platform to enable online merchants to cross border trade cost-effectively and with minimum effort
Tech&Appliances Total and Online Market 2018A - 2019E in Italy Italian Online Tech & Appliances market (Eu mn)(1) – Core=MDAs
Covid-19 impact on e-commerce may represent a structural change in customer behaviour
Lockdown impact on e-commerce:
3x new online consumers in Italy1 ePRICE's monthly number of visits (k visits)
(1)Gross Merchandise Volume includes revenues from the sale of products, deliveries and the volumes generated
by the 3PMarketplace, net of returns and VAT included. It does not include Infocommerce and B2B;
(2)Restated to reflect IFRS 15 first time adoption effects;
(3)Installo included in the consolidation perimeter;
Source: Company's Annual and interim Financial Reports (Consolidated data)
3 FY19 Revenues and GMV down due to…
2019 GM% in line with 2018 thanks to:
4
Positive effect of the efficiency actions implemented in 2018…
G&A & IT costs decrease due to HR (headcount optimization), corporate cost reduction and service contracts re-negotiation
Sales and marketing costs reduction mainly thanks to the reduction of Online Paid ADV weight and SEO improvement partially balancing paid traffic reduction
3.6% drop in logistics costs excluding the consolidation of Installo effect despite the increase in core revenues
drop in sales and marketing costs (-6.9% y-o-y) mainly due to the decrease in spending for customer acquisition and internal structure reorganization lower sales in MDAs led to 10.4% decrease in logistics costs stable G&A costs excluding Eu 2.2mn negative effect of the lower subsidy for development activities (≈-Eu 942k vs FY18) and the impact of Installo's consolidation (~Eu 1.276k of higher costs)
3 Improvement of adjusted EBITDA in 2018 of Eu 3.7 mn mainly attributable to the efficiency initiatives conducted during the year 2018 restated EBITDA reflects the impact of IFRS 16 on leases and rents
In 1Q20 the actions to reduce operating costs were limited by Covid-19, resulting in a further decline of EBITDA and EBIT. In fact, while both revenues and GM decreased, operating expenses were in line with 1Q19
17
(1) Restated to reflect IFRS 15 first time adoption effects; (2) Installo included in the consolidation perimeter; (3) Restated to reflect IFRS 16 effects Source: Company's Annual Financial Reports (Consolidated data)
Change in working capital in FY18 mainly attributable to the reduction in trade payables for Eu 15.5mn (influenced also by the calendar dates that led in 2017 to settling some payables at the beginning of 2018), partially offset by a decrease in inventories (for Eu 4.5mn) and to a lesser extent of trade receivables (for Eu 2.4mn)
2 FY19 working capital decrease (-Eu 7.1mn vs FY18) is mainly due to reduction in:
tax assets (-Eu 4.962k)
6
1
inventory (-Eu 3.103k), as a result of the company strategy to support liquidity leveraging on working capital
Negative change in net financial debt/(cash) for Eu 14.6mn (excluding Eu 14.9mn resulting from IFRS 16 adoption, most of which related to Truccazzano's lease) mainly attributable to cash absorption from operations (for Eu 15.9mn), partially offset by Eu 1.4mn net cash generated by investment activities (benefitting from the sale of Sitonline assets for ~Eu 1.8mn, the earn-out for the sale of Banzai Media for Eu 0.8mn and the sale of the equity investment in Interactive Thinking Srl for ~Eu 2.5mn) 3
4 FY19 net financial debt/(cash) decreased by Eu 1.3mn compared to FY18 Cash absorption from operations also reduced in FY19 to Eu 8.2mn (Eu 15.9mn in FY18) leading to Eu 1.5mn of cash and equivalents from Eu 8.9mn in FY2018
Eu 3.5mn investment activities offset by Eu 3.8mn earn-out for the sale of Banzai Media
5 1Q20 net financial debt/(cash) decreased by Eu 1.3mn due to cash absorption from operations (Eu 1.237k) and net investment activities (Eu 464k)
1Q20 change in working capital (-Eu 2.661k) is driven by a reduction in inventory (-Eu 2.784k)
18
(1) Restated to reflect IFRS 15 first time adoption effects; (2)Installo included in the consolidation perimeter; (3) FY18 Net debt restated to reflect IFRS 16 effects Source: Company's Annual Financial Reports (Consolidated data)
ePRICE Rights Issue
ePrice Group Overview
Closing remarks
Main drivers
ePRICE Rights Issue
ePrice Group Overview
Strategic Guidelines of the Industrial Plan
Annex
• A unique online offer focused on MDAs powered by a complete e-Commerce platform
• Market with a significant growth potential, especially after Covid-19 spread out
• Public company's shareholder base
• Turnaround process implemented by a new experienced management team
• Strategic focus shifted from size to core business and financial sustainability
ePRICE Rights Issue
ePrice Group Overview
Strategic Guidelines of the Industrial Plan
Closing remarks
Annex
| PRODUCT | SALES | FULLFILMENT | CUSTOMER RELATION |
|---|---|---|---|
| Traffic acquisition & Design (Customer Journey) |
Purchases and Sales | Warehouse, Transport and Last Mile services |
Contact Center & Customer Satisfaction |
| Catalog management Web pages layout and contents design |
Drafting of commercial agreements with suppliers, producers and distributors Control of stock procurement Products pricing Analysis of sales trends Marketing campaigns (including co-marketing) |
Logistics platform management through direct personnel and external suppliers Definition and control of the flow of incoming and outgoing goods to end customers Scheduling of deliveries to the Pick&Pay network Transport of goods to the peripheral warehouses, planning |
Interaction with the end customer through telephone, e-mail and social channels Identification and solving of problems experienced by the end customer in the purchase process Continuous monitoring of customer satisfaction |
Function
Main activities
and organisation of the interventions/services and management reverse logistics
(Installo)
| Consolidated Income Statement - Eu mn |
FY17 restated(1) |
FY18(2) | y-o-y growth |
FY18 Restated(3) |
FY19 | y-o-y growth |
1Q19 | 1Q20 | y-o-y growth |
|
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 187,3 | 164,4 | -12,2% | 164,4 | 130,6 | -20,6% | 35,5 | 24,8 | -30,0% | |
| Cost of sales | (159,6) | (137,0) | -14,1% | (137,0) | (109,0) | -20,4% | (29,6) | (21,0) | -28,9% | |
| Gross Margin Gross Margin % |
27,7 14,8% |
27,4 16,7% |
-1,2% | 27,4 16,7% |
21,6 16,5% |
-21,3% | 5,9 16,7% |
3,8 15,5% |
-35,4% | |
| Sales & Marketing costs Logistics costs IT costs G&A expenses |
(13,8) (19,7) (1,6) (6,6) |
(10,6) (19,3) (2,6) (5,1) |
-22,9% -2,0% 61,3% -22,1% |
(10,6) (17,4) (2,6) (4,4) |
(9,9) (15,6) (2,9) (6,4) |
-6,9% -10,4% 9,4% 47,0% |
(2,0) (3,9) (0,8) (1,0) |
(2,2) (3,4) (0,7) (1,3) |
11,3% -12,5% -3,8% 32,3% |
Includes positive contribution of Eu 2.0mn related to the |
| Adjusted EBITDA Adjusted EBITDA Margin % |
(14,0) -7,4% |
(10,3) -6,2% |
n.m. | (7,6) -4,6% |
(13,2) -10,1% |
n.m. | (1,6) -4,6% |
(3,8) -15,1% |
n.m. | termination of the logistics services contract with Showroomprivè |
| Non recurring revenues/(costs) and Stock Option Plan | (1,3) | 1,4 | n.m. | 1,4 | (0,8) | n.m. | (0,1) | 0,0 | n.m. | |
| EBITDA EBITDA Margin % |
(15,3) -8,2% |
(8,8) -5,4% |
n.m. | (6,1) -3,7% |
(14,0) -10,7% |
n.m. | (1,8) -4,9% |
(3,8) -15,1% |
n.m. | Includes Eu 0.24mn costs related to stock option and stock grant |
| D&A | (7,5) | (8,7) | 15,3% | (11,2) | (24,2) | 115,8% | (2,5) | (2,4) | -4,9% | and Eu 0.57mn restructuring |
| EBIT EBIT Margin % |
(22,8) -12,2% |
(17,5) -10,7% |
n.m. | (17,4) -10,6% |
(38,2) -29,2% |
n.m. | (4,3) -12,1% |
(6,2) -24,8% |
n.m. | costs |
| Net financial income/(charges) Net profit/(loss) from associates Write-down of financial assets |
0,1 (1,7) 0,0 |
1,7 (1,8) (0,3) |
1,6 (1,8) (0,3) |
(0,3) (0,6) (0,2) |
(0,1) (0,1) 0,0 |
0,0 0,0 0,0 |
Including Eu 3.9mn non-recurring fixed asset impairment, Eu 7.6mn impairment loss on goodwill and Eu 2.6mn depreciation related to |
|||
| EBT from continuing operations | (24,4) | (17,9) | n.m. | (17,8) | (39,3) | n.m. | (4,5) | (6,1) | n.m. | IFRS16 first adoption |
| Taxes Net profit/(loss) from discontinuing operations |
(1,0) 0,7 |
0,0 3,3 |
0,0 3,3 |
(7,0) 3,8 |
0,0 1,6 |
0,0 0,0 |
Eu 3.8mn including earn-out from Banzai Media disposal |
|||
| Net profit/(loss) Net Profit Margin % Net result pertaining to third parties Net result pertaining to the Group |
(24,7) -13,2% - - |
(14,6) -8,9% (0,2) (14,4) |
n.m. | (14,6) -8,9% (0,1) (14,4) |
(42,5) -32,5% (0,6) (41,9) |
n.m. | (2,9) -8,3% (0,1) (2,8) |
(6,1) -24,7% (0,1) (6,0) |
n.m. |
(1)Restated to reflect IFRS 15 first time adoption effects; (2)Installo included in the consolidation perimeter; (3) Restated to reflect IFRS 16 effects Source: Company's Annual and interim Financial Reports
| Consolidated Balance Sheet - Eu mn |
FY17 restated(1) |
FY18(2) | FY19 | 1Q20 | ||
|---|---|---|---|---|---|---|
| Inventory | 20,6 | 16,1 | 13,0 | 10,2 | ||
| Trade and other receivables | 9,3 | 6,8 | 5,6 | 3,2 | ||
| Trade and other payables | (38,1) | (22,5) | (20,7) | (18,3) | ||
| Other current receivables/(payables), net | 2,7 | 0,7 | (3,8) | (3,6) | ||
| Net Working Capital | (5,5) | 1,2 | (5,9) | (8,6) | Impact of Eu | 3.8mn write down of Truccazzano |
| Plant and equipment | 7,8 | 6,4 | 1,3 | 1,3 | warehouse | |
| Intangible assets | 28,6 | 27,7 | 16,0 | 15,0 | Of which goodwill Eu | 5.2mn and platform |
| Investments in associates | 2,3 | 1,1 | 0,6 | 0,4 | development Eu | 8.3mn. Impact of Eu 7.0mn |
| Non-current financial assets | 2,4 | 0,2 | 0,0 | 0,0 | impairment loss following impairment testing | |
| Rights of use on third-party assets | - | - | 2,8 | 1,8 | IFRS 16 impact | |
| Fixed Assets | 41,0 | 35,3 | 20,8 | 18,5 | ||
| Deferred tax assets and other non current assets | 9,0 | 8,8 | 1,7 | 1,8 | ||
| Severance Indemnity Fund | (2,0) | (2,2) | (2,4) | (2,4) | ||
| Provisions for risks and charges and other non current liabilities | (0,4) | (0,4) | (0,4) | (0,4) | ||
| Net Invested Capital | 42,0 | 42,7 | 13,9 | 9,1 | ||
| Net financial debt/(cash) | (21,3) | (6,7) | 6,9 | 8,2 | Eu 8.2mn IFRS16 | |
| -o/w IFRS 16 debt | - | - | 3,0 | 2,0 | restated | |
| Total Shareholders' Equity | 63,4 | 49,4 | 7,0 | 0,9 | ||
| - o/w attributable to minority shareholders |
0,0 | 0,2 | (0,4) | (0,5) |
(1)Restated to reflect IFRS 15 first time adoption effects; (2) Installo included in the consolidation perimeter Source: Company's Annual and interim Financial Reports
| Consolidated Cash Flow Statement - Eu mn |
FY17(1) | FY18(2) | FY19 | 1Q19 | 1Q20 |
|---|---|---|---|---|---|
| Net cash flow before changes in working capital | (14,9) | (8,6) | (14,0) | (2,0) | (4,2) |
| Changes in working capital | (0,2) | (7,3) | 5,8 | 0,8 | 3,0 |
| Change in inventories | 1,7 | 4,2 | 3,0 | 0,8 | 3,1 |
| Change in trade receivables | 0,3 | 2,0 | (0,2) | 1,2 | 2,4 |
| Change in other current assets | (1,8) | 3,4 | 3,8 | 0,1 | (0,7) |
| Change in trade payables | 0,9 | (16,2) | (1,8) | (1,1) | (2,4) |
| Change in other payables | (1,3) | (0,8) | 1,0 | (0,2) | 0,6 |
| NET CASH FLOW FROM OPERATIONS | (15,1) | (15,9) | (8,2) | (1,2) | (1,2) |
| (Acquisition)/disposal of tangible assets | (6,1) | (0,1) | (0,3) | (0,0) | (0,2) |
| (Acquisition)/disposal of intangible assets | (7,3) | (1,9) | (2,9) | (0,8) | (0,6) |
| Cash flow from discontinued operations | 1,2 | 0,8 | 3,8 | 0,0 | 0,4 |
| Change in other non-current assets | (0,0) | 0,3 | 0,0 | 0,0 | (0,1) |
| Change in financial instruments | - | 3,0 | - | 0,0 | 0,0 |
| Other (ie. purchase/disposal of associates, provision of financing) | (2,6) | (0,6) | (0,2) | - | - |
| NET CASH FLOW GENERATED/(ABSORBED) BY INVESTMENT ACTIVITIES | (14,8) | 1,4 | 0,4 | (0,8) | (0,5) |
| Financial payables | 2,4 | 1,5 | (0,7) | (1,1) | 1,2 |
| Current financial receivables | (1,2) | 0,8 | 1,2 | 0,6 | 0,3 |
| Share capital increase | 1,0 | - | - | - | - |
| Treasury shares | (0,7) | - | - | - | - |
| Dividends | (5,3) | - | - | - | - |
| NET CASH FLOW GENERATED/(ABSORBED) BY FINANCING ACTIVITIES | (3,7) | 2,4 | 0,5 | (0,5) | 1,5 |
| (Decrease)/Increase in cash and cash equivalents | (33,6) | (12,2) | (7,4) | (2,5) | (0,2) |
| CASH AND CASH EQUIVALENTS AT THE START OF THE PERIOD | 54,7 | 21,1 | 8,9 | 21,1 | 8,9 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 21,1 | 8,9 | 1,5 | 18,6 | 8,7 |
| Shareholder | Commitments to exercise subscription rights (Eu mn) |
Underwriting commitments to subscribe shares remaining unsubscribed after the auction of unexercised rights (Eu mn) |
Total commitment (Eu mn) |
|---|---|---|---|
| Paolo Ainio | 1.00 | 2.11 | 3.11 |
| Vis Value Partecipazioni S.r.l. (Pietro Boroli) | 1.06 | 3.18 | 4.24 |
| Micheli Associati S.r.l. |
0.86 | 3.25 | 4.11 |
| Ugo Colombo | 0.61 | 0.90 | 1.51 |
| Blu Acquario Prima S.p.A. |
0.33 | 0.00 | 0.33 |
| Erredi Invest S.p.A. |
0.07 | 0.00 | 0.07 |
| Boroli Giovanni |
0.05 | 0.25 | 0.30 |
| Benedettina S.p.A. |
0.24 | 0.10 | 0.34 |
| Andrea Di Camillo | 0.00 | 1.00 | 1.00 |
| Total | 4.21 | 10.79 | 15.00 |
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