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Investor & Analyst PresentationCapital Markets DayLondon, March 22nd, 2018
Dr. Cornelius Patt, CEOAndreas Grandinger, CFO
Investor & Analyst Presentation - Annual Report 2017 | page 2
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, www.zooplus.de. 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.
Safe Harbor Statement
Investor & Analyst Presentation - Annual Report 2017 | page 3
Your presenters today
Management owns around 5% of the shares of the company
Dr. Cornelius PattCEO, Founder
Andreas GrandingerCFO
» Previously with Roland Berger Strategy Consultants
» Previously with Parfümerie Douglas
» Corporate Management» Business Development &
System Development» IT» HR» Logistics and Supply Chain
Management
» Finance» Controlling» Legal» Internal Audit» Investor Relations» Sourcing
Investor & Analyst Presentation - Annual Report 2017 | page 4
Annual results 2017Capital Markets DayLondon, March 22nd, 2018
Dr. Cornelius Patt, CEOAndreas Grandinger, CFO
Investor & Analyst Presentation - Annual Report 2017 | page 5
zooplus’ profitable sales growth continued in 2017
» Sales increased by 22% to € 1,111m
− European market leader position in online retailing sustained
− Double-digit growth rates in all 30 European markets
» Customer loyalty with 93% sales retention
− High loyalty of existing customers as major sales driver
» Acceleration of registered new customer growth in H2 2017
− Registered new customer count increased by 26%, H2 by 36% with even better quality
» Positive result before tax (EBT) of € 4.1 m
− Stronger investment in 2017: competitive prices, marketing, logistics and personnel
» Operating cash flow of € 3.3 m
− Further improvement in working capital from 6.3% to 5.1% of sales
Investor & Analyst Presentation - Annual Report 2017 | page 6
zooplus continues to put sales growth and customer retention first
Sales 2011-2017 (€ m)
1) in local currencies2014
543
2013
407
2012
319
2011
245
+88+74
+136
2017
1,111
2016
909
2015
711
+198
+202
+168
79%85%
91%
94%93%1
92%94%1
28%31%33%28%30%38%Sales growth vs. PY
Repeat customer sales
New customer sales (1st year)
22%
93%93%1
Investor & Analyst Presentation - Annual Report 2017 | page 7
Sales of over € 1.1bn in 2017
909
1,111
2016 2017
24%
15%
Food Non-Food
+ 22%FX adjusted + 23%
Sales (€ m) Sales growth by category
Investor & Analyst Presentation - Annual Report 2017 | page 8
Sales development by quarter vs. prior year
Q1 2017 Q2 2017 Q3 2017 Q4 2017
24%22%
18%
25% 18% 23%
25%
25%
26%
20%24% 25%
Q1 2017 Q2 2017 Q3 2017 Q4 2017
Sales (€ m) Sales growth by category
11%8%
17%23%
Q1 2017 Q2 2017 Q3 2017 Q4 2017
Non-Food
Food
FX adjusted
Investor & Analyst Presentation - Annual Report 2017 | page 9
Retention of existing customer business continues on record high level
94% 94% 94% 93%
Q1 2017 Q2 2017 Q3 2017 Q4 2017
Sales retention rate (exchange rate adjusted)
» Sales retention rate on continuously high levels in all four quarters
» Lower sales growth rate in Q2 resulting from reduced newcustomer business sales, not from existing customer business
» Continued focus on strong loyalty of existing customers
Investor & Analyst Presentation - Annual Report 2017 | page 10
New customer intake in Q4 again higher than in previous quarters
23%
9%
34%38%
Q1 2017 Q2 2017 Q3 2017 Q4 2017
Registered new customer growth vs. PY
» Significantly improved new customer intake in Q3 and Q4
» More focused approach of new customer acquisition- Stronger focus on registering- Google bidding- Accessories
» Growth of new customer intake supported by higher marketing acquisition costs and competitive price positioning
» Improved new customer intake across all countries
Investor & Analyst Presentation - Annual Report 2017 | page 11
New customers acquired in H2 2017 show a goodquality
New customer retention (56 days)
» Customer retention 56 days after first purchase in H2 above H1 level
» New customers acquired in H2 have so far at least the same quality than prior new customers
28.7%29.2%
H1 2017 H2 2017New customer retention (56 days): Share of new customers who did a repurchase 56 days after their first purchase. New customer is accounted for the respective period of his first purchase. 56 days repurchase is a good predictor for repurchases after 182 days
Investor & Analyst Presentation - Annual Report 2017 | page 12
Sales 2017
HU
Source: zooplus sales, unaudited data, growth rates compared to 2016; market shares based on Euromonitor 2016 market data and zooplus estimation
96m
Total market 201723bnSales zooplus
in 2017
DK, SE, FI, NO
D,A,CHCZ, SK, HU, RO, SI, HR, BG, TR, GR, LV. LT, EE
ES, PT
zooplus is the online market leader in all geographies of Europe – with the widest possible base for further growth
NL, BE, LU
+27%
+27% (fx-adj.)
+25%
+21%
+22%
+37%
+18%
+22%
70m
124m
335m
62m
187m
66m
90m
1,111m
zooplus market share in 2017
6.2%
2.4%
5.1%
3.9%
3.7%
4.5%
7.0%
4.5%
4.9%
» Sales 2017: € 1,111m, sales growth rate +22%
» Double-digit sales growth rates in all countries
UK, IE
IT
FR, MC
Sales growth in 2017
80m12.2%
+41%
PL
Investor & Analyst Presentation - Annual Report 2017 | page 13
Customer loyalty – the winning factor of the business model – is at very high levels
Retention rates – Cohort analysis – Sales (€ m)
Reading example: 2011 a = sales of 2011’s new customers in 2011 1) in local currencies
90 86 85 86 89 91 9255 46 45 44 46 46 47
100 62 56 55 56 56 56125 87 79 78 77 77
135 105 95 91 88
174 145 127 119
202 167 144
253217
271
2011 2012 2013 2014 2015 2016 2017
100%
84% 98%
62% 90%
70%
<=2009
2010 a+1
2011 a
2012 a
Ø 79%
Ø 85%
Ø 91%
2013 a
2014 a
91%
2015 a
78%
99%99%
101%
83%
Ø 94%Ø 93%1)
90%
99%
102%104%
104%
245319
407
543
711
2016 a
94%
83%
88%
96%
99%
100%101%
102%
909
86%
86%
94%
97%
99%
100%101%
100%
2017 a
Ø 93%Ø 93%1)
Ø 92%Ø 94%1)
1,111
Investor & Analyst Presentation - Annual Report 2017 | page 14
Development of further business KPIs
Active customers (m)
2.5 2.7 3.34.0
4.85.8
2012 2013 2014 2015 2016 2017
Reg. new customers (m)
1.3 1.1 1.2 1.31.8
2.3
2012 2013 2014 2015 2016 2017
Orders (m)
6.3 7.710.0
12.716.3
20.3
2012 2013 2014 2015 2016 2017
Basket size (€)
2012 2013 2014 2015 2016 2017
128151 162 177 188 191
2012 2013 2014 2015 2016 2017
Sales per account (€)
79%85%
91% 93% 94% 93%
2012 2013 2014 2015 2016 2017
Sales retention
1 in local currencies
1 11
50 53 54 56 56 55
Investor & Analyst Presentation - Annual Report 2017 | page 15
2016 2017
Markets continue to be price competitive – zooplusprepared to defend it’s strategic position
2016 2017
» Continued focus on sustainable dog/cat food customers for higher lifetime value
» Ongoing price competition in the markets
» zooplus will defend it’s high customer retention
- 0.6%p
25.0% 24.4%
in % of sales
1 Share of food and cat litteron sales
+ 1.1%p
82.4% 83.5%
2016 2017
in % of sales
- 0.6%p
29.8% 29.2%
3 Gross margin + other income on sales2 Sales - CoGS
Total margin 3Gross margin 2Product mix 1
Investor & Analyst Presentation - Annual Report 2017 | page 16
3.2% 3.2%2.7% 3.0%
19.4% 19.8%
1.4% 1.7%
2016 2017
28.8%
Cost leadership position in 2017 sustained but reflects stronger investment focus
Total margin1
1 Gross margin + other income on sales
» Stronger growth and investment focus reflected in cost ratio development
» Logistics costs impacted by increased share of faster interim purchases resulting in a lower value per parcel
» IT/Admin impacted by higher depreciation
IT/Admin/ (incl. depreciation & interest)
Advertising/Marketing
Logistics2 Personnel3
1.1% 1.0%
Payment
27.8%
29.2%29.8%
+ 1.0%p
Total margin & Cost structure (in % of sales)
2 € 2.4 m logistics costs of 2017 reclassifiedto depreciation according to IAS 17 (finance lease)
3 all in, including LTI & SOP
Investor & Analyst Presentation - Annual Report 2017 | page 17
1
Four main pillars of investment focus for speeding up growth and improve zooplus overall product quality
» Continued focus on price leading position» Defending high loyalty of existing customers» Lower basket size
» Increase in new customer acquisition costs» Stronger focus on registered repeat customers» Continuously high customer lifetime value
» More software developers – from 90 in Q4 2016 to 160 in Q4 2017» Fourth internal software development location in Vienna » Focus: mobile/app, new functions, service aspects, internal algorithms
» Faster delivery» Ramp-up costs new logistics centers» Additional earlier capacity expansion
Competitive pricing
Marketing costs
IT product development
Logistics
2
3
4
Investor & Analyst Presentation - Annual Report 2017 | page 18
5.0% 3.9% 3.5% 3.2% 3.2%
5.6%2.9% 3.5% 2.7% 3.0%
24.0%
21.2% 20.1%19.4%
19.8%
6.1%
1.8% 1.5%1.4% 1.7%
2011 2014 2015 2016 2017
28.8%
zooplus will continue it’s strong effort to further improve cost leadership position in the category
31.6% 29.8%32.8% Total margin1
…
40.9%
1.7%1.3% 1.1% 1.1%
42.4%
29.8%27.8%
31.1%
1 gross margin + other income on sales 3 all in, including LTI & SOP
1.0%
29.2%
IT/Admin/ (incl. depreciation & interest)
Advertising/Marketing
Logistics2 Personnel3Payment
Total margin & Cost structure (in % of sales)
2 € 2.4 m logistics costs of 2017 reclassified to depreciation according to IAS 17
-1.2%p -1.8%p -0.6%p vs. prior year
Investor & Analyst Presentation - Annual Report 2017 | page 19
zooplus earnings before tax (EBT) in 2017 reflects investment in marketing, IT and logistics infrastructure
19.7
8.8
2016 2017
17.9
4.1
2016 2017
- 10.9 -13.8
in % of sales 2.2 % 0.8 % in % of sales 2.0 % 0.4 %
EBITDA (€ m) EBT (€ m)
€ 2.4 m logistics costs of reclassified to depreciation according to IAS 17
Investor & Analyst Presentation - Annual Report 2017 | page 20
Strong profitability of repeat customers business invested to grow the business with long-term perspective
Repeat customer and new customer contribution (€ m)
253 28% - 5 - 2%656 72% 23 + 4%
New customers(sales in the year of acquisition)
Repeat customers(consecutive year’s sales)
2016
Sales % oftotal z+
EBT EBT-margin
Sales % oftotal z+
EBT EBT-margin
271 24% - 17 - 6%840 76% 21 + 3%2017
Reduction of profit margins in 2017 resulting from deliberate decision of stronger investment focus to improve overall zooplus strategic position and long-term valuation .
Investor & Analyst Presentation - Annual Report 2017 | page 21
UK market continued to negatively impact zooplusfrom a P&L perspective in 2017
» One of three biggest markets in Europe
» Highly competitive market in particular with amazon and ocado
» Around 10% of zooplus’ sales are generated in the UK
» Currently one of highest growth rates of major zooplus countries
» Local purchasing will be further strengthened
zooplus will continue to strongly develop it’s business in the UK
Overall negative impact on zooplus P&L in 2017 due to fx-changes: EUR 7.1 m
Focus on long-term development, taking into account short term market disruptions and profit impact
Investor & Analyst Presentation - Annual Report 2017 | page 22
Cash flow fromoperatingactivities
Cash flow frominvesting activities
Free cash flow
Operating cash flow continues to be positive in 2017 although sales growth of more than 200m EUR
1.3 % 1.1 %Cash flow from
operatingactivities
Cash flow frominvesting activities
Free cash flow
2016 2017
3.312.5
-7.4 -4.1
- 3.68.9
Operating and free cash flow (€ m)
Investor & Analyst Presentation - Annual Report 2017 | page 23
Working Capital has been further improved in 2017
Working capital in % sales
9.5%
8.1%
6.3%
5.1%
2014 2015 2016 2017
» Increase in inventory turnover
» More efficient replenishment process
» Improvement in payment days
» Total working capital savings from 2014 to 2017 of EUR 49m
Working Capital = inventory + prepayments + receivables - liabilitiesAverage of quarters Q1 – Q4
Investor & Analyst Presentation - Annual Report 2017 | page 24
zooplus shows a strong balance sheet at end of 2017
» Positive cash balance of 51 m EUR at 12/31/2017
» Equity ratio of 47%
» No financial debt
» Credit lines of EUR 50 m – until end 2020 without guarantees
Solid foundation for further growth
Investor & Analyst Presentation - Annual Report 2017 | page 25
2017 results
Q & A
Investor & Analyst Presentation - Annual Report 2017 | page 26
Strategy & OutlookCapital Markets DayLondon, March 22nd, 2018
Dr. Cornelius Patt, CEOAndreas Grandinger, CFO
Investor & Analyst Presentation - Annual Report 2017 | page 27
zooplus investment hypothesis
Strong historic development to No. 1 specialist online pet retailer and No. 2 in total market online and offline
High moat through loyal customer base, cost leadership position and dedicated logistics operations and IT infrastructure
Large, non-cyclical and growing market with ample room for further growth
Solid financial base with room for further scale and cash flow optimization
Fast growing business with recurring revenues model through kind of subscription
Founder driven business with long-term perspective and focus on shareholder value
1 4
2 5
3 6
Investor & Analyst Presentation - Annual Report 2017 | page 28
Main takeaways from todays presentation about zooplus’ strategic perspective
» Sales target of minimum € 2 billion in 2020 confirmed
» Working towards market leadership in the total market
» Sales growth stays top priority
» Investment mode in 2018 to further improve strategic position
» Sales growth as key driver for increasing future profitability
» Repeat customer EBT in 2020 of more than € 60m
» Laying the foundation for further growth after 2020
Lower profit level today makes zooplus more valuable in future
Investor & Analyst Presentation - Annual Report 2017 | page 29
zooplus is Europe’s leading online retailer for pet supplies
Sales (€ m) Key figures 2017
18 Years of online experience
8,000 SKUs
30 Active countries
5.8 m Active customers
1.4 bn Website impressions
60 m Unique visitors
20 m Orders
25 m Parcels shipped
11 European warehouses
500 Employees in 8 offices 2 28
178245
319407
543
711
909
1,111
2000 2005 2010 2011 2012 2013 2014 2015 2016 2017……
Average sales growth 2010-2017+ 30 % p.a.
Sales (€ m)
Investor & Analyst Presentation - Annual Report 2017 | page 30
Overall around 90m EUR has been invested into zooplusfor a market capitalization of around 1,300m EUR
Capital injection from shareholders since inception of the company in 1999
Net sales in 2017 –cumulated > 4.7bn EUR since 1999
Market capitalization at mid March 2018
€ ~90m
€ 1,111m
€ ~1,300m
Investor & Analyst Presentation - Annual Report 2017 | page 31
Primary target of the company development
Secure future prospects of the company
Sales growth and absolute size of the company
Main tasks for zooplus
Main value driver
Target of zooplus
Reach strategic dominance in the European pet market
Maximize valuation of the company
Investor & Analyst Presentation - Annual Report 2017 | page 32
The core drivers of zooplus business development
» Online by a wide margin and the strongest player in the overall market online and offline
» Recurring revenue model built on consumption cycle and customer loyalty
» Scaling and specialization – built to purpose
» Superior product experience
» Critical size in all markets
Financials and metrics
Sales
Costs
Suppliers
Market leadership
Most efficient operator
» National champions/ Multinationals/Niche brands
Best partner for premium brands
Investor & Analyst Presentation - Annual Report 2017 | page 33
zooplus key priorities for 2018 and beyond
Sales growth1
Retention rate2
New customer intake3
Efficiency and scale focus4
Private label growth5
Market place for services6
Investor & Analyst Presentation - Annual Report 2017 | page 34
Key drivers for sales growth
Offering and availability of assortment
Delivery capacity and speed
Pricing towards customers
Digital experience
(mobile)
Customer retentionand
new customer acquisition
Market & Competition
Investor & Analyst Presentation - Annual Report 2017 | page 36
European pet supplies market is a very attractive market
Pet supplies market in Europe 2005-2020e (gross sales € bn)
» Ownership of pets is on the rise in Europe
» Humanization of pets drives spending
» Market is resilient through economic cycles
» Consumables recurring revenue – subscription like
» No technology and fashion obsolescence risk
» Low product return rates
20 20 21 22 23 23 2425 26 26
29
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 … 2020e
Source: Euromonitor 2016 and zooplus estimation
CAGR +3% p.a.
Investor & Analyst Presentation - Annual Report 2017 | page 37
The pet population continues to grow in Europe
No. of dogs and cats in Europe 2010-2016 (in mio.)
74 75 81 87
2010 2012 2014 2016
Source: Statista 2018
Dogs
85 9099 103
2010 2012 2014 2016
Cats
+ 2.7% p.a. + 3.3% p.a.
Investor & Analyst Presentation - Annual Report 2017 | page 38
Pet supplies is very attractive for online distribution from a consumer perspective, however only 8-10% online today
Pet supplies online market penetration Pet supplies – online attractiveness
Source: 2016 European market in € bn - Euromonitor and zooplus estimation
98-99%
26
2010 2017
21
24
8-10%
Consumable products
Repeat purchase pattern
Projectable consumption, low seasonality
Standardized products
Well-known brands
Attractive prices
Product information very important
Convenience aspect (heavy & bulky)
1
2
3
4
5
6
7
8
90-92%
1-2%
Offline share
Online share
zooplus assumes that in the long run more than 50% of the market goes online
Investor & Analyst Presentation - Annual Report 2017 | page 39
Online market penetration of pet supplies in Europe still leaves a lot of growth potential – the best still to come
Online penetration per category - Europe
» All categories still growing in online share
» No signs of saturation of online market in pet supplies
» Next step of online market penetration to 15-20% market share
» Online as leading distribution channel expected long-term
1-2%
8-10%
> 20%
> 25%
> 50%
Food
Pet supplies
Fashion
Electronics
Books
Source: 2016 Statista, zooplus estimation
Investor & Analyst Presentation - Annual Report 2017 | page 40
In a large and fragmented market zooplus dominates online – and is rapidly catching up with the offline leaders
Market share zooplus and competitors 2017
Source: Euromonitor; company information, zooplus estimation
2017: € 1.1 bn (+22%)
Total pet supplies market Europe (incl. VAT):
~ € 26 bn (~ € 23 bn net)
CAGR: 2011-17: +3%
Net sales 2017 : ~ € 1.7 bn (+ 6%)
Online: ~ € 0.06 bn(+ 20% vs. PY)
Net sales 2017:
Online: ~ € 0.05 bn
Net sales
Other onliners:
Fressnapf
Net sales
~ € 1.0 bn (+7%)
Pets at Home
2017: n/a
~ 50% market share zooplus online~ 5% market share online and offline
Investor & Analyst Presentation - Annual Report 2017 | page 41
zooplus reached No. 2 position in Europe in 2017 and is well on its way towards market leadership
Net sales and growth 2017 – European market (EUR bn)
Strategic goal
Close the gap towards the current number 1 in Europe
Working towards market leadership online and offline
Benefitting from all the advantages of size and market leadershipSource: Company data for 2017 figures; zooplus assumptions
n/a
1.0
1.1
1.7+ 6%
+22%
+7%
Online ~0.06
Online ~0.05
1
23 2)
1) Net sales estimated from gross sales 2) Includes services 3) amazon international growth rate
4 3) +22%
(+100 EUR m)
(+202 EUR m)
(+65 EUR m)
1)
Investor & Analyst Presentation - Annual Report 2017 | page 42
zooplus is the only real pan-European pet retailer in Europe
» Is more than 10 bigger than the No. 2 online specialist in Europe
» Is the only true pan-European pet retailer
» Is the only pet specialist with a pan-European logistics infrastructure
» Is the only retailer with a European-wide customer service (400 agents)
online
offline
local international
Investor & Analyst Presentation - Annual Report 2017 | page 43
However, competition continues to be strong but zooplus is prepared to defend its position
» Entering Spain and Italy with full pet supplies assortment in Q3 2017» Strong growth of pet category
A good market segment is also a populated segment (examples):
» Multi-channel approach» Start in French market in summer 2017, FR store closed in Q1 2018 again
» zooplus strategy pays off - more than double growth at zooplus» Store openings with higher margins do not compensate losses in online
» zooplus strategy pays off - more than double growth at zooplus
» Price reductions in stores to support growth» Acknowledging that customer proposition also encompasses attractive pricing
» Continued losses, closed Spanish shop in Q1 2018
Investor & Analyst Presentation - Annual Report 2017 | page 44
Category
Full local assortment
Additional pet content
Pricing
Logistics
Sales 2017
Start of category
Pet specialist
30 countries
Pet specific content
Competitive
Specialized logistics
€ 1,111 m
1999
Generalist
UK, DE, FR, IT, ES
None
Competitive
Non pet specific
Less than half of zooplus
2005
Private label 11% of salesNone
amazon is not new to the category but is and will stay the main competitor in the category
Supply chain > 99% Direct (control of supply chain)Direct + Marketplace
Investor & Analyst Presentation - Annual Report 2017 | page 45
Market and competition
Q & A
Differentiation towards the competition
Investor & Analyst Presentation - Annual Report 2017 | page 47
IT infrastructure & resources
Differentiation towards competition
Loyal customer baseEuropean online market leadership
Distribution channels Focus on mobile
Private label brands Pet related services
Most efficient operator
Pan-European logistics infrastructure
The following pillars determine zooplus’ differentiation towards the competition:
1
3
5
7
9
2
4
6
8
European online market leadership
Investor & Analyst Presentation - Annual Report 2017 | page 49
online market
position
zooplus is by far the European market leader in online pet supplies
zooplus sales 2017 (€ m) and market share of total market
growth rate
% of total net sales
62
66
70
80
90
96
124
187
335
Other EE
ES, PT
DK, SE, FI, NO
PL
IT
UK, IE
NL, BE, LU
FR
D, A, CH 30%
17%
11%
9%
8%
7%
6%
6%
6%
18%
22%
22%
27%
21%
41%
25%
27%
37%
6.2%
5.1%
7.0%
2.4%
3.7%
12.2%
4.5%
3.9%
4.5%
Source: market shares zooplus estimation, UK: fx-adjusted growth figures
absolute growth
50 m
33 m
22 m
21 m
15 m
23 m
14 m
14 m
17 m
1
1
1
2
1
1
1
1
1
Investor & Analyst Presentation - Annual Report 2017 | page 50
Sales 2017
HU
Source: zooplus sales, unaudited data, growth rates compared to 2016; market shares based on Euromonitor 2016 market data and zooplus estimation
96m
Total market 201723bnSales zooplus
in 2017
DK, SE, FI, NO
D,A,CHCZ, SK, HU, RO, SI, HR, BG, TR, GR, LV. LT, EE
ES, PT
zooplus is the online market leader in all geographies of Europe – with the widest possible base for further growth
NL, BE, LU
+27%
+27% (fx-adj.)
+25%
+21%
+22%
+37%
+18%
+22%
70m
124m
335m
62m
187m
66m
90m
1,111m
zooplus market share in 2017
6.2%
2.4%
5.1%
3.9%
3.7%
4.5%
7.0%
4.5%
4.9%
» Sales 2017: € 1,111m, sales growth rate +22%
» Double-digit sales growth rates in all countries
UK, IE
IT
FR, MC
Sales growth in 2017
80m12.2%
+41%
PL
Investor & Analyst Presentation - Annual Report 2017 | page 51
zooplus offers by far the biggest selling space in Europe for pet suppliers
Advantages for brands to work with zooplus on a European level
zooplus can offer:
» Access to 30 country markets in Europe via one retailer
» Pet specific environment
» Strong sales growth perspective across Europe
» One European purchasing/category management organization
» Only very few delivery points (fulfillment centers)
» No European-wide distribution and on-field sales organization necessary
» Detailed customer data on customer behaviour
Investor & Analyst Presentation - Annual Report 2017 | page 52
zooplus is the No. 1 sourcing partner of branded pet food products in Europe
Multinationals + regionals
Multinational groups
Regional and local champions (selection)
Building partnerships for brand development and customer satisfaction
Improving terms & conditions
Loyal customer base
Investor & Analyst Presentation - Annual Report 2017 | page 54
Key drivers for the attractiveness of the zooplus business model from a shopper perspective
USP and differentiation towards competition
1Convenience
2Completeness
» Emotional band through pet focus and value adding free services
» All relevant brands/ products(8,000 SKUs)
» Dedicated specialistsapproach
3Performance
» Customer centricity
» Reach across Europe (30 countries - 25 local language)
» Reliable 1-2 days delivery1)
» European-wide customer service
4Content
» Detailed product descriptions & videos
» >1 million product ratings from shoppers (peer-to-peer)
» Other services (Vet search)
1) Workings days in core countries
» Weight and bulkiness
» 97% delivery to preferred address
Investor & Analyst Presentation - Annual Report 2017 | page 55
The zooplus customer
Key facts 2017
Around 6 Mio. active customers
70% women
Spent per year around 250 EUR
Average age: 40
Both rural and city
Average basket 55 EUR
Investor & Analyst Presentation - Annual Report 2017 | page 56
Loyal customers are the core base of zooplus growth path
Sales 2011-2017 (€ m)
1) in local currencies2014
543
2013
407
2012
319
2011
245
+88+74
+136
2017
1,111
2016
909
2015
711
+198
+202
+168
79%85%
91%
94%93%1
92%94%1
28%31%33%28%30%38%Sales growth vs. PY
Repeat customer sales
New customer sales (1st year)
22%
93%93%1
Investor & Analyst Presentation - Annual Report 2017 | page 57
Customer loyalty – the winning factor of the business model – is at very high levels
Retention rates – Cohort analysis – Sales (€ m)
Reading example: 2011 a = sales of 2011’s new customers in 2011 1) in local currencies
90 86 85 86 89 91 9255 46 45 44 46 46 47
100 62 56 55 56 56 56125 87 79 78 77 77
135 105 95 91 88
174 145 127 119
202 167 144
253217
271
2011 2012 2013 2014 2015 2016 2017
100%
84% 98%
62% 90%
70%
<=2009
2010 a+1
2011 a
2012 a
Ø 79%
Ø 85%
Ø 91%
2013 a
2014 a
91%
2015 a
78%
99%99%
101%
83%
Ø 94%Ø 93%1)
90%
99%
102%104%
104%
245319
407
543
711
2016 a
94%
83%
88%
96%
99%
100%101%
102%
909
86%
86%
94%
97%
99%
100%101%
100%
2017 a
Ø 93%Ø 93%1)
Ø 92%Ø 94%1)
1,111
Investor & Analyst Presentation - Annual Report 2017 | page 58
The strong zooplus loyalty model works in all countries
Sales retention Top 10 zooplus country shops 2017
Sales retention 2016 and 2017 in local currencies
95% 95% 94% 96% 92%103%
94% 90%96%
DE FR UK NL IT PL ES CZ CH
95%2016 95% 91% 92% 92% 105% 95% 91% 92%
Investor & Analyst Presentation - Annual Report 2017 | page 59
Account value and customer account retention increase with length of customer life
191
244270 285 291 290 295 312 331 345 360
a a+1 a+2 a+3 a+4 a+5 a+6 a+7 a+8 a+9 a+10
Projected sales per active account out of 2017 (in €)
Cumulated sales per account created over a+10 years: € 1,730
100%1) 79% 64% 57% 53% 50% 40%
Account survival rate2)
a: year of acquisition = 2017
1) customers with at least one consecutive purchase after first transaction2) Projected rate based on account retention rate of respective cohort3) Average projected share of remaining accounts based on account survival rate
Share of remaining accounts3)47% 45% 43% 42%
100%1) 79% 81% 89% 93% 94% 95% 95% 96% 96% 95%
191 192 173 163 154 144 142140 142 144 144 Sales per account created
Investor & Analyst Presentation - Annual Report 2017 | page 60
19
97
164
Customer lifetime value is strongly positive
Customer acquisitioncosts2
CM cumulative 5 yearsplus acquisition year
CM cumulative 10 yearsplus acquisition year
1 Only accounts with repurchasing activity based on cohort specific retention rate (incl. fx-effects)2 Traffic acquisition costs per new account with repurchasing activity3 CM = contribution margin = net sales – all variable costs (excl. acquisition costs) = 9.5%
2017a+5
projecteda+10
projected
1,017 1,7301912017 net sales per account in EUR (cum.)1
(2016) (206) (1,049) (1,812)
(100) (172)(15)(2016)
Investor & Analyst Presentation - Annual Report 2017 | page 61
Today’s sales growth and retention determine future net sales tremendously
“Locked-in sales” over next five years (€ m)
4,492
3,790
2,875
2,06091 %
93 %
94 %
93 %
543
711
909
1,111
2014
2015
2016
2017
Net salesof year
Retention rate (local currencies)
Locked-in sales for next 5 years from 2014 customer base and a retention rate of 91 %
Investor & Analyst Presentation - Annual Report 2017 | page 62
Strong profitability of repeat customers business invested to grow the business with long-term perspective
Repeat customer and new customer contribution (€ m)
253 28% - 5 - 2%656 72% 23 + 4%
New customers(sales in the year of acquisition)
Repeat customers(consecutive year’s sales)
2016
Sales % oftotal z+
EBT EBT-margin
Sales % oftotal z+
EBT EBT-margin
271 24% - 17 - 6%840 76% 21 + 3%2017
2020e > 450 22% tbd tbd> 1,550 78% > 60 + 4%
… …
Distribution channels
Investor & Analyst Presentation - Annual Report 2017 | page 64
Differentiated shop portfolio with further room for specialization
Discount oriented pet retailer
with focused product portfolio for price sensitive
customers
Pet specialist with broad profile
of covered product segments & brands
Vet diets & antiparasitics
Specialistpet food & accessories
Pet food all channelbrands
Additional specialized concept under development- Specialization- Service and advice for specific brands- More possibilities for targeted marketing
Pet specialist zooplus brand is and will stay no. 1 priority of the company
Closing relevant segments of the market for the competition
Investor & Analyst Presentation - Annual Report 2017 | page 65
Around 90% of total sales come from the zooplusbrand shops
396 515
663
829
1,001
2013 2014 2015 2016 2017
Development of net sales zooplus shops 2013-17 (€ m)
» Pet specialist concept with a pet DNA
» Around 8,000 SKUs» 30 local language webshops» Low threshold for free
delivery» Bonus points» Savings plan» Pet related additional
content» Extensive social media
content
Investor & Analyst Presentation - Annual Report 2017 | page 66
Around 10% of total sales come from the bitibabrand shops
11
28
48
79
110
2013 2014 2015 2016 2017
Development of net sales bitiba shops 2013-17 (€ m)
» Focused concept for price sensitive customers
» Reduced number of SKUs» 14 local language webshops» Higher threshold for free delivery» No bonus points and savings plan» Uses same infrastructure as
zooplus» Slightly lower levels of customer
and sales retention» Contribution on similar level as
for zooplus customers
Investor & Analyst Presentation - Annual Report 2017 | page 67
zooplus focuses on easy-to-use product presentation in the shop
Example zooplus vs. amazon
Clear product shelf / no market place, almost 100% control of supply chain
Speedy and reliable delivery without Prime / practically no shipping fee
Investor & Analyst Presentation - Annual Report 2017 | page 6868
Pet profile
New features will be continuously added for more personalization and differentiation
» Updated in summer 2017» More than 200,000 pet profiles
from registered customers within 6 months
» Additional customer insights for personalization and marketing initiatives (birthday mail, etc.)
» Differentiation towards competition
» Retention driver
Investor & Analyst Presentation - Annual Report 2017 | page 69
Subscription will offer additional convenience for regulars
Subscription
» Live in Germany since end Q3 2017» Flexible options for delivery
frequency» Large range of brands available for
subscription» One additional option for zooplus
customers to facilitate purchasing» Too early to communicate specific
KPIs» Further roll-out planned
Focus on mobile
Investor & Analyst Presentation - Annual Report 2017 | page 71
zooplus is a digital multi-channel retailer
» Mobile share of orders around 30% and growing
» Mobile will be the dominant channel in future
» Full responsive frontend for all devices
» Own zooplus smartphone Apps (iOS and Android)
» Significant investment in mobile channel
» More technical features and optimized UX to come in future
» Online activities adapted to mobile usage
Investor & Analyst Presentation - Annual Report 2017 | page 72
Mobile channel has considerably increased its share and is continuing to grow
Visits64 m+49%
Sales share
6% App
Orders4.4 m+67%
Note: TY 2017 figures, growth: 2017 vs. 2016Mobile: traffic by mobile phones (incl. app).
Mobile business zooplus 2017
Clear focus on mobile in all activities
Investor & Analyst Presentation - Annual Report 2017 | page 73
2015 2016 2017
2015 2016 2017
2015 2016 2017
2015 2016 2017
Development of channels across main markets- Mobile share in % of orders
Germany UK
Fast growing share of mobile driven sales across all key markets
France Netherlands
23%29%
22%28%
21%29%
17%23%
Mobile: traffic by mobile phones (incl. app).
15% 16%
10% 14%
Investor & Analyst Presentation - Annual Report 2017 | page 74
Mobile Desktop
KPIs – Mobile vs. desktop
Major KPIs (2017)
Mobile Desktop
47%53%
Mobile Desktop
26%
74%
17%
7%
Conversion rateVisits Orders
Mobile: traffic by mobile phones (incl. app).
Investor & Analyst Presentation - Annual Report 2017 | page 75
Mobile - App - Competition overview
Distribution of apps in the pet category
zooplus
Fressnapf
zooroyal
Pets at Home
Tiendanimal
Arcaplanet
medicanimal
amazon
Benchmark for zooplus app is outside the category
» App version available for all zooplus shops
» Clear and intuitive design
» Responsive design
» Future focus on stronger personalization
Private label
Investor & Analyst Presentation - Annual Report 2017 | page 77
Privatelabel
zooplus offers all the relevant categories that customers expect from a pet specialist
Grocerybrands Accessories Anti-
parasitics
Specialtrends/
grain free
Specialtybrands/Super
Premiumbrands
Vet/Dietary
Investor & Analyst Presentation - Annual Report 2017 | page 78
13%Share of
total food
1.5Growth index
private label / food
5%Share of
first order sales
Online private label business gets build up over time byconverting the existing customer base to own label brands
Further significant increase in private label share until 2020
Investor & Analyst Presentation - Annual Report 2017 | page 79
The private label portfolio of zooplus has a clearfocus on valuable premium brands
Dog
» Various brands with different positioning within the different categories» Focus on dog and cat brands
VET
GRO
CERY
SPEC
IALT
Y
Cat Dog & Cat Other
Investor & Analyst Presentation - Annual Report 2017 | page 80
The single private label brands are designed for dedicatedtarget groups and reflect latest nutritional trends
Segment description:Dry food, wet food and snacks
Positioning: Wild and Free! Wolf of Wilderness has beenformulated to mimic the wild wolf´s diet.
USP: High fresh meat content, grain-free, species
Target customer: Premium focused dog owners who look fornatural products with holistic concepts (grainless, berries etc.) and strong emotional messages
Price Positioning: Premium
Number of SKUs: 65
Investor & Analyst Presentation - Annual Report 2017 | page 81
Development of brand & product concept
• General Positioning• Brand name• Selection of supplier
Product developmenttogether with supplier
• Declaration & Ingredients
• Acceptance Tests• Sizes & calculation
Development of design & packaging
• Logo & Packaging• Complete product range• Texts & translations
Production of packaging & product
• Packaging• Product
Launch in zooplus shops
• New shop articles• Launch campaign
CRM• Trial offers
Feb 2014
March 2015
Brand positioning, product development and successful visuals determine the own label development process
Investor & Analyst Presentation - Annual Report 2017 | page 82
Marketing initiatives
Focus brand Wolf of Wilderness – comprehensive marketing initiatives ongoing to achieve sales growth
New Sub-Ranges
Printed advertising:
Pet fair: Samplings:
as present for new customers
„The Taste of“:
„Soft & Strong“:
Investor & Analyst Presentation - Annual Report 2017 | page 83
Wolf of wilderness shop
WoW webshop
» Separate webshop
» Multi-language shop
» Additional support for brand building
Investor & Analyst Presentation - Annual Report 2017 | page 84
Private label brand: Purizon
Segment description: Dry food
Positioning: High Premium nutrition made taking inspiration from the natural, carnivorous diet
USP: 70% meat content, high protein content, grain-free
Target customer: Health experts who buy brands with special nutritional concepts (grain-free, high share of meat, single protein, fresh meat)
Price Positioning: Super Premium
Number of SKUs: 47
Investor & Analyst Presentation - Annual Report 2017 | page 85
Private label brand: Concept for Life
Segment description: Dry and wet food for cats and dogs
Positioning:A unique and scientific-based nutritional concept, which focuses on your pet´s individual well-being and dietary requirements at different life stages.
USP:Tailored nutrition for your pet
Target customer: Brand believers who normally feed standard life stage brands
Price Positioning: Super Premium
Number of SKUs: 85
Investor & Analyst Presentation - Annual Report 2017 | page 86
Private label brand: Wild Freedom
Segment description: Dry and wet food for cats
Positioning: Wild and Free! Wild Freedom has been formulated to mimic the wild cat´s diet.
USP: High content of fresh meat, grain-free, low carb
Target customer: Premium focused cat owners who look for natural products with species-appropriate concepts (grain-free, protein-rich etc.) and strong emotional messages
Price Positioning: Super Premium
Number of SKUs: 21
Pet related services
Investor & Analyst Presentation - Annual Report 2017 | page 88
Stronger focus on additional services for more differentiation
Building additional services around a zooplus market place for people with pets – No.1 pet world in Europe
Veterinarians Other pet relatedservices/shops
Grooming services Insurances
» Differentiation as pet specialist» Potential future additional contribution margin
zooplus owns by far the biggest dedicated pet owner customer base in Europe with already today around 6 Mio. active accounts
Investor & Analyst Presentation - Annual Report 2017 | page 89
Vet search as a first step to integrate additional services on the zooplus platform
Vet search
» Live in Germany since end Q2 2017» More than 13,000 vets integrated» Search for vets with opening hours
and driving directions» Rating of vets by registered zooplus
customers» Access for vets to update their data» Further roll-out planned
Pan-European logistics infrastructure
Investor & Analyst Presentation - Annual Report 2017 | page 91
» New FC Birmingham (UK) since 03/2017, new FC in Mühldorf (DE) since 09/2017
» New FC in Boleslawice (PL) from 11/2017 on; additional capacity in Wroclaw (PL) since 10/2017
» All centers managed as one integrated pan-European network
» All FCs operated by partners; no capex for zooplus
» SKU allocation, replenishment, order routing and packing algorithms intellectual property of zooplus
2013
2015
Fulfillment center (FC)
2009
2015
2016
2017
2000/2011
zooplus is the only specialist player in the category with a pan-European logistics network
2017
2017
Investor & Analyst Presentation - Annual Report 2017 | page 92
zooplus fulfillment centers
Capex per center: € 20 – 35 m1) provided by partners
Tilburg (NL) Hörselgau (DE) Wroclaw (PL) Chalon (FR) Antwerp (BE)
34,000 sqm7-8,000 SKUs
Rhenus
30,000 sqm7-8,000 SKUs
Rhenus
29,000 sqm5-7,000 SKUs
Dirks
21,000 sqm5-6,000 SKUs
Rhenus
16,000 sqm5-6,000 SKUs
Katoen Natie
Additional medium FCs: Strasbourg (FR), Birmingham (UK), Mühldorf (DE), Boleslawice (PL)
1) Including facility / building for big zooplus fulfillment center
Additional small FCs: Jirikov (CZ), Istanbul (TR)
Investor & Analyst Presentation - Annual Report 2017 | page 93
zooplus logistics structure is tailor-made for heavy and bulky products in inbound and outbound logistics
zoopluslogistics
Antwerp, Belgium Antwerp, Belgium
Tilburg, Netherlands Tilburg, Netherlands
Antwerp: 16,000 sqm
Logistics partner: Katoen Natie
Source: zooplus
Investor & Analyst Presentation - Annual Report 2017 | page 94
Outbound preparation & loadingPicking & packing
zooplus fulfillment process
Inbound logistics Warehousing
Investor & Analyst Presentation - Annual Report 2017 | page 95
Distribution to the customer with the leading local last mile providers
» Last mile distribution with external partners (DSPs)
» zooplus operates approx. 60 relations of line hauls (trunk) and direct DSP connections
» At least two DSPs for every country offered for better customer service
» Management of parcel allocation to FCs and DSPs by zooplus owned algorithms
» Focus on delivery speed and efficiency
2013
2015
Fulfillment center (FC)
2009
2015
2016
2017
Hubs (DSP) - shown are selected relations from FC to Hub of DSPs
2000/2011
2017
2017
Investor & Analyst Presentation - Annual Report 2017 | page 96
Example Cat‘s Best (cat litter): article flow between fulfillment centers and country of destination for a period of three months
zooplus logistics system is an intelligent network solution between fulfillment centers and destination countries
Country ofdestination
Criteria for choice of logistics center1:
» No. of products in parcel
» Top seller/long-tail
WRO
HOE
TIL
CHA
PL
DE
IT
FR
NL
ES
ANR
BHX
SXBGB
Fulfillment center
» DSP chosen
» Available stock
1 selective
Investor & Analyst Presentation - Annual Report 2017 | page 97
Logistics cost differ by countries – overall unit economics will further improve in logistics
Logistics costs1) 2017
1) Inbound & outbound logistics, line haul, distribution, packaging as a percentage of sales
20.2%18.4%
12.2% 13.4%15.5%
23.2%20.7%
zoopluslogistics
all-in
zoopluslogistics
only variable
PL CZ DE ES IT
best-in-class
(19.4%) (17.6%) (12.6%) (13.3%) (14.9%) (21.5%)2016 in % of sales(19.5%)
Higher logistics cost ratios due to lower basket – unit costs further improved
Investor & Analyst Presentation - Annual Report 2017 | page 98
2013
2015
2009
2000/2011
2015
2016
2017
Further logistics expansion and key priorities
Three major focus points:» Set up sufficient capacity for
expected growth in next years» Improve customer experience
in terms of delivery speed» Increase efficiency
Structural points:» Continue collaboration with
external partners» Potentially integrate part of
external assets for new fulfillment centers over next five years
» Keep focus on asset light approach
Fulfillment center (FC) Potential FC under investigation
2017
2017
IT infrastructure and resources
Investor & Analyst Presentation - Annual Report 2017 | page 100
Technology environment specifically designed for zooplus business model
» One central platform
» Inhouse developed systems and standard systems
» SAP Finance for Accounting since 01/2017
» Central data warehouse on SAP Hana
» Inhouse developed algorithms for:• Google bidding
• Replenishment
• Pricing
• Order routing
• Parcel building
• Other
zooplus specific/scalable - differentiation factor
OperationsSales Channel Sales OrderProcessing
Business Analytics
Customer Relationship Management
Catalog ManagementSupplier and Article
Management
Finance
Investor & Analyst Presentation - Annual Report 2017 | page 101
IT: ramp up and productivity of additional software development capacities
» Significant IT development capacity built-up since 2017 will continue during 2018
» Additional fourth internal IT hub in Vienna established beginning 2018
» IT development organized into four separate product development centers (PDCs)
IT product development
(software development, DevOps)
IT infrastructure incl. workplace
Data & analytics incl. business intelligence
Production systems and database operating
Investor & Analyst Presentation - Annual Report 2017 | page 102
Strong internal IT development teams as driving force for future developments and differentiation
Strong differentiating factor towards the competition1
Munich, DE Krakow, PL
Bucarest, RO(External partner)Madrid, ES
» Four internal IT hubs plus one external hub
» More than 150 IT developers – further built-up planned
» Additionally external experts as freelancers
» Focus on internal systems, processes & algorithms and product features
Vienna, AT
1 excluding amazon
Most efficient operator
Investor & Analyst Presentation - Annual Report 2017 | page 104
zooplus supply chain
» More than 200 suppliers
» 8,000 SKUs» 5 logistic
partners» 9 major
sourcing countries
Website Fulfillment Delivery Customer serviceInbound
» One platform» 30 countries
and 25 languages
» zooplus, bitiba
» 12 currencies
» 11 fulfillment centers
» > 80,000 parcels per day
» 2,500 logistics people
» Line hauls» Leading local
postal service providers
» Low returns (< 2% of sales)
» Around 400 customer agents
» All relevant languages
» 7 days a week
Investor & Analyst Presentation - Annual Report 2017 | page 105
Continued focus on retention and strong sales growth as main drivers for future profitability
Retention
Sales growth
Margin & cost structure
Profitability
Strong sales growth means
» Keep the competition including amazon at a distance
» Faster reach of dominant market position
» Better purchasing terms in all areas (COGS & other services)
» More efficiency gains
» More scale in overhead
Investor & Analyst Presentation - Annual Report 2017 | page 106
Markets continue to be price competitive – zoopluswell prepared to defend its strategic position
Gross margin & Total margin1) (% of sales)
» Continued focus on sustainable dog/cat food customers for higher lifetime value
» Margin reduction impacted by higher food share and exchange rate effects
» Ongoing price competition in the markets
» zooplus will defend its high customer retention
1) gross margin + other income on sales
35.9%
27.6% 27.2% 25.0% 24.4%
5.0%
5.2% 4.4%4.8% 4.8%
2011 2014 2015 2016 2017
40.9%
32.8% 31.6%29.8% 29.2%
Gross margin
Other income
…
Investor & Analyst Presentation - Annual Report 2017 | page 107
Food
» Core assortment/ main driver for retention
» Focus: competitive pricing
Non-Food
» Supplementary assortment
» Focus: gross margin improvement
Private label
» Differentiating assortment
» Focus: mid-term gross margin driver
Product categories have different impact on gross margin development
Share on zooplussales 2017
83%
TargetContinued strong sales growth inall categories Gross margin drivers
17% 13%of food and cat litter
Investor & Analyst Presentation - Annual Report 2017 | page 108
Long-term margin uplift drivers will prevail
Retention
» Price transparency
» Strong competition
» Fights for market share
» Channel shift to online
» Commoditized products
Limiting factors Driving factors
» Purchasing power
» Private label share
» Product differentiation
» Market consolidation
Investor & Analyst Presentation - Annual Report 2017 | page 109
5.0% 3.9% 3.5% 3.2% 3.2%
5.6%2.9% 3.5% 2.7% 3.0%
24.0%
21.2% 20.1%19.4%
19.8%
6.1%
1.8% 1.5%1.4% 1.7%
2011 2014 2015 2016 2017
28.8%
zooplus will continue its strong effort to further improve cost leadership position in the category
31.6% 29.8%32.8% Total margin1
…
40.9%
1.7%1.3% 1.1% 1.1%
42.4%
29.8%27.8%
31.1%
1 gross margin + other income on sales 3 all in, including LTI & SOP
1.0%
29.2%
IT/Admin/ (incl. depreciation & interest)
Advertising/Marketing
Logistics2 Personnel3Payment
Total margin & Cost structure (in % of sales)
2 € 2.4 m logistics costs of 2017 reclassified to depreciation according to IAS 17
Investor & Analyst Presentation - Annual Report 2017 | page 110
29%
40%43% 41%
48%43%
Comparison of cost structure – significant advantage for zooplus
Cost ratio - selected competitors
Source: annual reports 2016 – Fressnapf 2015: all costs except for costs of goods sold, including depreciation and interest
Cost advantage for zooplus of more 10%-points
Investor & Analyst Presentation - Annual Report 2017 | page 111
Over the next years zooplus will continue to drive down costs
» Slightly higher spending in 2018» Continued focus on high efficiency
» Further cost efficiency and scale in FC costs and last mile» Value per parcel important cost driver» 2018 integration of additional FCs
» Further scale expected
» Further scale expected» 2018 continued ramp-up of IT development resources and some
other major functions
Marketing
Logistics
IT / Admin
Personnel
1
2
3
4
Investor & Analyst Presentation - Annual Report 2017 | page 112
Most efficient operator
Q & A
The way forward / outlook
Investor & Analyst Presentation - Annual Report 2017 | page 114
Sales and EBT guidance for full year 2018
zooplus well positioned to continue the strong sales growth pathin 2018
Guidance
Profit guidance 2018 based on current FX levels.
1,111 (+22%) 4.1
EBT (€ m)Sales (€ m)
2018e
2017
+21 to +23% - 0.5 to + 0.5%of net sales
Investor & Analyst Presentation - Annual Report 2017 | page 115
zooplus investment mode will continue in 2018 and further improve zooplus’ market position
» Defending high loyalty of existing customers» Acquisition of new customers
» New customer acquisition for high customer lifetime value» Increased investment into mobile
» Improved product and user experience» Improved internal processes and efficiencies
» Close white spots in the distribution network» Increase capacity and speed up delivery to customers
Competitive pricing
Marketing costs
IT product development
Private label
Improved strategic position and driver for further growth
1
2
4
5
Logistics
3
» Expansion of private label share» Development of new brands
Investor & Analyst Presentation - Annual Report 2017 | page 116
Outlook until 2020 – from today’s perspective- Sales
» Sales as driver for further profitability
» Laying the foundation for continued growth after 2020
Sales of more than € 2.0 bn in 2020
» Sales growth
» Customer retention
» Increasing market share
Primary target continues to be:
up from € 1,111 m in 2017
Investor & Analyst Presentation - Annual Report 2017 | page 117
The online share is expected to continue to grow beyond 2020
Current online share and long-term hypothesis (€ bn)
90-92%
29
2017 2020e
26
24
15-20%
80-85%
8-10%
Offline share
Online share
Total market (gross)
< 50%
Long-term
> 50%
> 30
Online market opportunity
> 15
Long-term growth potential of online should leave enough growth for zooplus after 2020
Investor & Analyst Presentation - Annual Report 2017 | page 118
Outlook until 2020 – from today’s perspective- Profit before tax (EBT)
» Sales growth priority over short term profit maximization
» Taking strategic opportunities and mid term valuation instead of short term profit improvement
» Focus on absolute profit generation
» Repeat Customer EBT > € 60 m in 2020 on
repeat customer sales of >1,550
» Profit development is no linear function
» Long term target around 5% EBT on salesonce the growth opportunities are exhausted
Investor & Analyst Presentation - Annual Report 2017 | page 119
Strong profitability of repeat customers business invested to grow the business with long-term perspective
Repeat customer and new customer contribution (€ m)
253 28% - 5 - 2%656 72% 23 + 4%
New customers(sales in the year of acquisition)
Repeat customers(consecutive year’s sales)
2016
Sales % oftotal z+
EBT EBT-margin
Sales % oftotal z+
EBT EBT-margin
271 24% - 17 - 6%840 76% 21 + 3%2017
2020e > 450 22% tbd tbd> 1,550 78% > 60 + 4%
… …
Investor & Analyst Presentation - Annual Report 2017 | page 120
The planned growth until 2020 should go with a positive operating cash flow
Working capital development in % net sales
9.5%
8.1%
6.3%5.1%
2014 2015 2016 2017
» Increase in inventory turnover
» More efficient replenishment process
» Improvement in payment days
Constant working capital in 2018 implies a further reduction to around 4.2% of sales, for 2019 to around 3.4% of sales
Investor & Analyst Presentation - Annual Report 2017 | page 121
Main takeaways from todays presentation about zooplus strategic perspective
» Sales target of minimum € 2 billion in 2020 confirmed
» Working towards market leadership in the total market
» Sales growth stays top priority
» Investment mode in 2018 to further improve strategic position
» Sales growth as key driver for increasing future profitability
» Repeat customer EBT in 2020 of more than € 60m
» Laying the foundation for further growth after 2020
Lower profit level today makes zooplus more valuable in future
Investor & Analyst Presentation - Annual Report 2017 | page 122
Financials and outlook
Q & A
Investor & Analyst Presentation - Annual Report 2017 | page 123
Key Financials 2017
P&L 2017 2016 Δ abs Δ %pin € mSales 1110.6 908.6 abs. 202.0Δ in % 22.2%
52.8 43.44.8% 4.8%
-839.6 -681.6-75.6% -75.0%-219.9 -176.0
-19.8% -19.4%-11.3 -9.6
-1.0% -1.1%-19.3 -12.8
-1.7% -1.4%-35.7 -29.1
-3.2% -3.2%-28.8 -23.1
-2.6% -2.5%8.8 19.7
0.8% 2.2%-4.7 -1.8
-0.4% -0.2%4.1 17.9
0.4% 2.0%EPS in EUR (basic) 0.27 1.63Balance SheetTotal Assets 239.5 207.6 31.9
111.4 107.946.5% 52.0%
Cash FlowFree Cash Flow -4.1 8.9 -13.1
Equity (Ratio in %) 3.5
I&DA -2.9 -0.2%p
EBT -13.8 -1.6%p
G&A -5.6 0.0%p
EBITDA -10.9 -1.4%p
Customer acquisition -6.4 -0.3%p
Personnel -6.6 0.0%p
Logistics -44.0 -0.4%p
Payment -1.8 0.0%p
Other income 9.4 0.0%p
COGS -158.0 -0.6%p
Investor & Analyst Presentation - Annual Report 2017 | page 124
Profit & Loss 2017
abs % abs %
Sales 1110.6 100.0% 908.6 100.0%
Other income 52.8 4.8% 43.4 4.8%
Cost of materials -839.6 -75.6% -681.6 -75.0%
Personnel costs -35.7 -3.2% -29.1 -3.2%
Depreciation -4.3 -0.4% -1.6 -0.2%
Other expenses -279.3 -25.1% -221.5 -24.4%
thereof logistics / fulfillment (-219.9) 19.8% (-176.0) 19.4%
thereof marketing (-19.3) 1.7% (-12.8) 1.4%
thereof payment (-11.3) 1.0% (-9.6) 1.1%
thereof other costs (-28.8) 2.6% (-23.1) 2.5%
Earnings before interest and taxes (EBIT) 4.4 0.4% 18.1 2.0%
Financial income 0.0 0.0% 0.0 0.0%
Financial expenses -0.4 0.0% -0.2 0.0%
Earnings before taxes (EBT) 4.1 0.4% 17.9 2.0%
Taxes on income -2.1 -0.2% -6.5 -0.7%
Consolidated net result 1.9 0.2% 11.4 1.3%
Differences from currency translation -0.5 0.0% -0.4 0.0%
Hedge reserve -2.0 -0.2% 1.6 0.2%
Items that may be relclassified subsequently to profit or loss -2.5 -0.2% 1.1 0.1%
Comprehensive income -0.6 -0.1% 12.5 1.4%
Earnings per share in €
basic 0.27 - 1.63 -
diluted 0.27 - 1.60 -
in € m2017 2016
Investor & Analyst Presentation - Annual Report 2017 | page 125
Balance Sheet as of December 31st, 2017
Assets Equity and Liabilities
in € mDec. 31st.
2017Dec. 31st.
2016Δ abs
A. Non-current assets
I. PP&E 15.0 15.9 -1.0
II. Intangible assets 13.1 9.0 4.0
III. Other financial assets 0.0 0.0 0.0
IV. Deferred tax assets 0.0 0.0 0.0
Total non-current assets 28.1 25.0 3.1
B. Current assets
I. Inventories 104.5 78.8 25.8
II. Advance payments 0.6 1.6 -1.0
III. Accounts receivable 26.4 19.2 7.2
IV. Other current assets 27.5 25.6 1.8
V. Tax receivable 1.2 0.0 1.2
VI.Derivative financial instruments
0.0 2.5 -2.5
VII.Cash and cash equivalents
51.2 54.9 -3.7
Total current assets 211.4 182.6 28.8
239.5 207.6 31.9
in € mDec. 31st.
2017Dec. 31st.
2016Δ abs
A. Equity
I. Capital subscribed 7.1 7.1 0.1
II. Capital reserves 98.8 94.8 4.0
III. Other reserves -1.4 1.1 -2.5
IV.Profit and Loss carried forward
6.8 4.9 1.9
Total equity 111.4 107.9 3.5
B. Non-current liabilities 11.1 13.1 -2.1
C. Current liabilities
I. Accounts payable 78.1 48.5 29.6
IIDerivative financial instruments
0.5 0.0 0.5
III. Other current liabilities 24.6 21.4 3.2
IV. Tax liabilites 1.3 4.1 -2.7
V. Finance lease 2.1 2.2 -0.1
VI. Provisions 7.4 8.1 -0.6
VII. Deferred income 2.9 2.4 0.5
Total current liabilities 117.0 86.6 30.4
239.5 207.6 31.9
Investor & Analyst Presentation - Annual Report 2017 | page 126
Cash flow 2017
in € m 2017 2016
EBT 4.1 17.9
Cash flow from operating activi ties 3.3 12.5
Cash flow from investing activi ties -7.4 -3.6
Free cash flow -4.1 8.9
Cash flow from financing activi ties 0.3 0.7
Net change of cash and cash equiva lents -3.7 9.4
Cash on hand, bank depos i ts 51.2 54.9