3i Capital Markets Seminar Action 19 March 2019 Agenda
1. Introduction Simon Borrows
2. Business performance 2018 Sander van der Laan
3. Strategy update Sander van der Laan
4. Financial performance 2018 Joost Sliepenbeek
5. Wrap up Simon Borrows
2 Action continues its growth trajectory under 3i ownership
• Acquired from founders in a primary buyout in Action sales (€m) 2011 for 8.3x EBITDA 4,216 • 3i’s carrying value increased to £2,540m at December 2018 (£2,312m, December 2017) 718 • Valued at 16.5x run-rate EBITDA multiple post 2011 2018 liquidity discount • 26.0x 3i gross money multiple at December Action – 3i carrying value (£m) (1) 2018, including realisations up to that date 3,364 834 • 3i gross realised money multiple of 6.4x from
£834m of distributions received since start of 2,540
investment 130 Investment cost Dec-18 • Action is an exceptional asset + distributions proceeds
Source: 3i Annual and Half-yearly reports. (1) Valuation of remaining investment included in the multiple. 3 3i led governance focused on sustainable growth
Milestones 2011-2016 New store growth (#)
• Transitioned from founders to professional 1,325 1,095 management 852 655 514 321 406 • Strengthened the team and upgraded systems and 269 processes 2011 2012 2013 2014 2015 2016 2017 2018
• Developed strategy for international store roll-out in Sales growth (€m) several European countries 4,216 3,418 2,675 1,995 Milestones 2017-2019 1,506 873 1,155 • Focusing on growth in existing markets 718 2011 2012 2013 2014 2015 2016 2017 2018 • Moderating new store growth to allow investment in commercial and supply chain capabilities DC construction (#) • Accelerating investment in pan European distribution, 7 end-to-end supply chain planning and other key 2 2020 2019 capabilities 2 3 2 2017-18 • Focused on building strong foundations for long-term 2011-2016 2017-2020 growth 4 Today’s presenters
Sander van der Laan Joost Sliepenbeek Chief Executive Officer Chief Financial Officer
• Joined in October 2015 • Joined in November 2018 • 28 years of Consumer & Retail experience • 18 years of Consumer & Retail experience • 31 years experience in finance, 19 years as CFO • Various positions at Ahold (1998 – 2015) – CFO Vion (2015 – 2018) – CEO Albert Heijn (2011 – 2015) – CFO Van Gansewinkel (2013 – 2015) – COO Ahold Europe – CFO C1000 (2009 – 2012) – General Manager Albert Heijn – CFO HEMA (2007 – 2009) – CEO Giant Food Stores (Ahold USA) – CFO Albert Heijn (1999 – 2003) – EVP Marketing & Merchandising Albert Heijn – Various positions at Ahold (1994 – 2007) – General Manager Gall & Gall
5 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 We have strengthened our EB, bringing in multi disciplinary experience
CEO Sander van der Laan Director CFO Technology & IT Joost Sliepenbeek Jens Burgers
Director Director Store Commercial Supply Chain Operations Director Joost Bous Bart Raeymaekers Hajir Hajji
Netherlands BeLux France Germany Austria Poland Tjeerd Judia Wouter de Steffen Wolfgang Slawomir Bartels Elkadi Backer Rosenbauer Tratter Nitek
6 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Executive Board members General Managers (countries) Agenda
1. Introduction Simon Borrows
2. Business performance 2018 Sander van der Laan
3. Strategy update Sander van der Laan
4. Financial performance 2018 Joost Sliepenbeek
5. Wrap Up Simon Borrows
7 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 2018 was another year of strong performance
€4,216 3.2% €450 230 70% Million Like-for- Million Stores Cash net sales Like sales Operating added conversion growth +23% EBITDA (Q4: 4.4%)
Significant investments in organisational capability and Supply Chain
8 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Our high growth track record continues
4,216 450 3,418 387 2,675 310 1,995 226 1,506 166 1,155 128
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
1,325 10 1,095 3 852 2 655 5 514 406 3 2 2 5 1
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
DCs opened before 2019 DCs to be opened over the next 12 months
9 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 DCs opened in 2019 Results of 2018 could have been even stronger
Supply Chain challenges
Investments in Specific category stock issues organisational + capability
External
10 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 In 2018 we added another 230 stores, continuing our strong geographic expansion
378 25 167 288 5
424
38
Net sales (€m) # of stores NL sales (%)
607 4,216 245 1,325 ~95% ~33%
2010 2018 # of stores (31-12-2018) 11 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 This brings our total number of stores to 1,325 in 7 countries
Brignoles 900m2 - opened wk 36 with €219k sales1
Marseille (Cabriès) 1,200m2 - opened wk 4 (2019) with €254k sales1
(1) First full week of sales 12 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 DC expansion – accelerated from 2 DCs in 2016 to 7 DCs currently with 3 more to open before the end of 2020
DCs opened in or before 2018 Zwaagdijk, NL Peine, DE (2019) DCs open in 2019 DCs to open in 2020 Osła, PL (2019)
Echt, NL
Bratislava, SK (2020)
Verrières, FR (2020)
Biblis, DE Moissy, FR Belleville, FR (2019) Labastide, FR
13 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Agenda
1. Introduction Simon Borrows
2. Business performance 2018 Sander van der Laan
3. Strategy update Sander van der Laan
4. Financial performance 2018 Joost Sliepenbeek
5. Wrap Up Simon Borrows
14 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Customer behaviour is rapidly changing
Digitalisation of Rapidly growing interest in society and influence sustainability of social media
Polarisation in retail markets, Continued growth of growth of premium and e-commerce, especially value discount multi-channel retailing
Change in shopping and Development of consumption driven by new retail models new technology
We need to stay consistent, open and agile to remain up-to-date and competitive
15 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Our strategy
Strengthen our unique (International) geographic 1 2 customer value proposition expansion
A cost-effective, simple, scalable and responsible business model 3 that delivers our strategy
4 Organisation, people and culture
16 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Unique business model providing sustainable competitive advantage
One brand & Price Surprise one format
Scalable Customers business People model
17 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 18/03/2019 One concept across all countries
1 1 1 brand store format store operating model
• Stores between 700 to 1,100 sqm • More than 90% of product range is the same across all stores, all countries • 2/3 of product range is changing, 150-200 new articles/ week • Wide lanes, low shelves and pleasant store lighting lead to an enjoyable shopping experience
18 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 18/03/2019 We continuously improve the customer experience
• Refreshed Action logo • Brighter and lighter store environment: → New floor tiles → More daylight → No ceiling → More colourful → New signing • Energy friendly LED lighting, reducing electricity consumption by 40%
• Applied in new stores and stores that are due for regular refurbishment
• Results: → Positive customer feedback → Increased sales → Neutral in CAPEX
19 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 14 categories with continuously changing products
Garden/ Outdoor Toys Clothing Household Laundry & • Overall 3.2 % LFL in 2018. Goods Cleaning Healthy LFL growth in all markets Personal • Our operating model allows us to Decoration Care switch to new categories • Within categories, products change continuously over the year 14 categories • Within categories, focus on: → Price → Surprise (newness) Multimedia Linen → Quality
Food & Pets Drinks DIY Sports Stationery & Hobby
20 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Strong performers in 2018
We manage our categories in a dynamic manner
Strong performers 2018 Require attention
Sports Successful introduction of new Decoration Strong on awareness and surprise, category with strong sales however more focus on performance. Additional opportunity rationalisation of product range and in vitamins introduction of new private labels
Clothing Significantly reduced fashion. Strong Food & Drinks Some price pressure for A-brands, performance despite space focus on volume items, instore reduction, additional potential in presentation and more country basics, body- and legwear specific product range
Toys Benefited from warm summer, potential destination store. Opportunities in diversification of product range and A-brands
21 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Unbeatable prices offered to our customers
Retro LED light Dreft detergent Kettlebell 6kg Werckmann claw hammer At (discount) sports shops: Product with € 14.992 comparable specs €9 - 15 at supermarkets: for products with comparable specs at >€ 2.00 Carex 5L winter Dutch DIY stores screenwash
Skyler dog Panasonic AA food Batteries
Premium 62% cheaper brand: compared to competing product € 1.00 Volume: ca. 1m Volume: ca. 7m at discount furniture shop1 cans/ year batteries / year
(1) Compared to closest comparable product: 400 lumen vs. 320 lumen (2) Private label 6kg ketllebells 22 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Unbeatable prices offered to our customers
% of products in different price ranges Unbeatable prices for competition
~30% ~30% ~30% 100 155
100 166
100 167
100 ~7% 181 ~3% 100 155
€0-1 €1-2 €2-5 €5-10 >€10 Action Competitor cheapest basket Primary offering
23 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Strong brand with a very strong conversion towards buying at Action
Awareness 96% 80% 60% 71% 47%
Conversion from awareness to consideration 75% 61% 71% 55% 64%
Consideration 73% 48% 42% 39% 30%
Conversion from 97% 94% 71% 95% 72% consideration to purchase
Buying behaviour(2) 71% 46% 30% 37% 21%
National Within catchment area
National: 14% 27% 9%
(1) GfK Image and Awareness Study December 2018 / Source: Company information 24 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 (2) % clients that purchased one or more products at Action in the previous six months Significant investment in private labels with a focus on an integrated approach
New labels Focus on integrated approach
Personal Personal Personal Garden & Care Care Care outdoor
Decoration Decoration Pets Linen
DIY Sports Food Food
• Investing significantly in our private label portfolio; added 12 private labels in 2018 → Strong LFL and margin performance → Improves customer perception
• Improve brand perception through quality packaging J u l B a r b a H a t i ia ra ce (artwork, material, functionality)
25 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 New integrated marketing approach
• Integration between offline and online to optimise brand proposition
• Increase consistency in communication
• Marketing LFL driver: increase frequency and ticket amount
• One new ‘European’ bi-weekly flyer, distributed in our entire market area as of week 12-2019
• Roll-out of same look-and-feel with digital touchpoints in 2019
26 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Our digital strategy is focused on improving the digital customer interface and strengthening ROPO1
+28.2% Store +30.9% Offline Customer +15.5% 2.3 media Service 1.2 1.4 0.7 0.6 0.8
NL site NL mail NL mails sent (m) Email/CRM (enriched) Website sessions (m) subscriptions (m) customer profile Digital visibility and interaction drives
Digital App more customers to our stores marketing (new) +51.9% +73.3% • Established cross functional digital unit to lead our digital 1.8 transition (more than 30 roles) 1.2 0.8 • New marketing director and digital director have started 0.4 Followers Followers (m) (m)
2017 2019 CAGR% (1) ROPO: Research Online, Purchase Offline 27 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Proposition travels across borders, allowing fast roll-out in several countries simultaneously
1,325
2012 2014 2016 2018 1,095 2013 2015 2017
852
341 367 424 378 655 324 354 303 335 288 514 262 153 220 406 135 216 172 321 117 136 120 93 76 51 68 52 45 38 25 7 22 1 13 1 7 18 6
# of stores across countries Total # of stores
28 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 We continue to see potential for significant expansion in current and new markets in the next 5 years
Existing markets Potential new countries
In 2020 we will enter country # 8 and We aim to double our store network we will continue to enter new countries afterwards
29 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Still ample potential in existing and new countries
Population in millions 17 12 67 9 83 38 282
Remaining potential
Stores open % potential store of % end ’18
NL BE LU FR AT DE PL Other EU
30 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 France: We have opened our 424th store in France in 2018, 6 years after entry
DC 424 335 DC • Population 67.0m 17.1m 220 DC 120 • Action stores 424 378 DC 52 • Population per store 158k 45k 1 13 2012 2013 2014 2015 2016 2017 2018 DC • 89 new stores in 2018 • New country office in Paris
DC • 3 distribution centres operational in France in 2019, 2 others supply to France • Significantly strengthened management
DC Existing DC, delivering to country • We are now a nation-wide retailer
DC DC to be opened 2020
31 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Germany: We have opened another 72 stores and are the fastest growing retailer in the country
288 216 DC • Population 82.8m 17.1m DC 136 DC • Action stores 288 378 76 45 22 • Population per store 288k 45k DC 7 2012 2013 2014 2015 2016 2017 2018
• Country entered in 2009
DC • 72 new stores in 2018 • 2 distribution centres operational in Germany: Biblis and Peine (opened in 2019) • 2 DCs in other countries deliver to Germany as well
DC Existing DC, delivering to country
DC DC to be opened in 2019
32 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Poland: First 25 stores opened and we are ramping up for further roll-out
• Population 38m 17.1m
• Action stores 25 378 DC • Population per store 1.5m 45k 6 25 DC 2017 2018 2019 2020 2021 2022 2023 • Successful pilot in 2017, roll-out started in defined geography • Established strong Polish team to facilitate further expansion DC • Opened country office in Katowice
Population of ca. 17m in • Positive results: average number of customers per store in 2018 attractive market surrounding higher than in Austria and Germany for LFL stores DC Osla • Opening of DC Osla in Q3 - significant reduction of transportation costs (Biblis ca. 650 km, Peine ca. 400 km) and lead times DC Existing DC, delivering to country
DC DC to be opened in 2019
33 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Develop Multi-layer DC network with hubs and XCCs
Current network with one direct stream to DCs Future network with hubs and XCCs for and stock kept downstream differentiated streams and stocks kept upstream
Large volume supply Suppliers More frequent and smaller volume supply
Later stage: Asia Consolidation Center
Hub XCC
DC Layer
Store network
Legend: Hub XCC DC Store Large Inventory Small Inventory
34 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Continued growth of our Direct Sourcing volumes from the Far East, enabled by outsourced hubs in network
Sourcing models (illustrative)
Wholesalers
A-brands / local sourcing
Far East sourcing Outsourced hub Marseille will serve Labastide and Belleville Traders • A hub receives large inbound volumes for multiple DCs • Central inventory keeping: decreases inventory in chain 15% • Deconsolidation of inbound containers & palletising 10% • Enables late allocation of inventory to DCs through central 5% stock holding, also stabilising the SC 0% 1 2013 2014 2015 1 2016 2017 2018 • Facilitates higher service levels to stores and enables % direct sourcing (as % COGS) direct sourcing growth (1) Estimate 35 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 We continue to make significant investments in IT to be future proof
• Today we have a strong technology foundation ready for growth for transactional based processes: (Digital) End-to-End → Point of Sale, distribution centres, ERP, reporting, etc. customer interface planning Agile & scalable • But fairly limited capabilities in automation and commercial digitalisation of key commercial and E2E supply chain Supply Chain processes execution planning processes
Insights & Efficient • We are investing in our IT foundation and are building: Analytics in-store operation → End-to-End planning systems → SC support systems (e.g. EDI) Engaged & Scalable & reliable connected workforce technology foundation → Digital Customer Interface → In-store systems (piloting: self check-out, guided store ordering)
36 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 For Store Operations we have started several initiatives to improve our processes and efficiency
Efficient store On-shelf availability Engaged people Commercial stores processes
• Top 500 availability • Improved presentation • Satisfaction 2.0 • Labour challenges guidelines • Rollout new workforce • Strengthen supply management system: • Hourly rate under chain • Format 2.0 Kronos pressure • Cross functional E2E • Continued focus on • Preparing for HR • HR tools SuccessFactors program running to customer friendliness • Recruitment website improve availability • Piloting self check- outs & tools
37 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Continued focus on Action Social Responsibility
Product Environment Our products are safe and We minimise our environmental impact responsibly sourced across the supply chain
People Good citizenship We are a responsible employer We contribute to society and serve local communities
38 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 We source our products responsibly and minimise our impact on the environment
• Responsible sourcing with Action’s Ethical Sourcing Policy • Sustainable policies: timber, cotton and Products chemicals • Sustainable quality labels: FSC, UTZ, Öko-tex, PEFC, Fair Trade, FS, EKO, EU Organic
• Energy-saving lights in store reduce energy consumption by 40% Environ- • Double decker trucks carry 60% more freight than ment ordinary trucks • DCs equipped with solar panels1 • Recycling cardboard and plastic from stores
(1) Implemented in DC Echt and DC Belleville 39 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 We pride ourselves on being a responsible employer and contribute to society
• 46,000 employees • 129 nationalities in stores, distribution centres and offices • 24,500 participants in training courses People • Internal promotions: • 695 store employees assistant store manager • 249 assistant store managers store manager • Action scholarship fund
• In 2017 partnership signed with SOS Children’s Villages Citizenship • For every store we sponsor 1 SOS child/ village • Several international and national local initiatives sponsored
40 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Agenda
1. Introduction Simon Borrows
2. Business performance 2018 Sander van der Laan
3. Strategy update Sander van der Laan
4. Financial performance 2018 Joost Sliepenbeek
5. Wrap Up Simon Borrows
41 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Action’s repeatable economic model
1 2 • Consistent gross margin • Like-for-Like sales growth across categories Clear value Superior store • # new stores • All Like-for-Like stores drivers economics profitable • EBITDA margin • Fast pay back
3 4 • Proven Strong Excellent cash • Low capital intensity • Consistent economic generation • Negative working capital model • Predictable • Robust
Tight centralised financial governance and control
42 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Continued strong net sales and EBITDA growth
Net sales (€m) Operating EBITDA (€m)
4,216
450 3,418 387 2,675 310 (1) 1,995 (1) 226 1,506 166 1,155 873 128 718 86 99 515 607 71 426 39 49
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
EBITDA margin
Source: company information 43 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 (1) Excluding impact of 53rd week Results of 2018 could have been even stronger
• End-to-end supply chain planning Supply chain challenges • Operational challenges in 2 French DCs and delay of 2 DCs 4,216 • Productivity of stores impacted 3,418 Specific category issues • Stock clearance in Decoration and Garden & Outdoor
• Challenging year for European retail industry External • Exceptional weather affecting footfall 2017 2018 • The “Gilets Jaunes” protests and railway strikes + 450 • Start-up costs of new DCs 387 • Significant step-up in IT Investments in • Incremental investments to strengthen capabilities in organisational capability commercial, planning and supply chain • Establishing a Digital Unit • Creation of Polish team 2017 2018 ACTION | 3I CAPITAL MARKETS SEMINAR 2019
44 1 LFL performance 2014 – 2018
7.6% 7.2% 6.9%
5.3% 4.4%
3.2%
2014 2015 2016 2017 2018 2018Q4
Source: company information 45 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 1 New store openings 2013 - 2018
(1) 244 (2) 6 11 19 197 20 6
115 141 89 1 100 108 68 85 39 Poland 12 80 Austria 15 72 23 31 60 France 17 Germany 25 24 41 18 18 19 BELUX 21 17 13 14 13 Netherlands 2013 2014 2015 2016 2017 2018
Source: company information (1) Net new store openings was 243 as a result of one store closing in the Netherlands 46 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 (2) Net new stores openings was 230 as a result of two stores closing in the Netherlands, 20 stores delayed to 2019 1 Further diversification of net sales: France has become larger than the Netherlands
Sales share by country by share Sales Poland Austria France Germany BELUX Netherlands 2013 2014 2015 2016 2017 2018
Source: Company information 47 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 1 Change in underlying country EBITDA margin
+ ~30 bps + ~0 bps + ~170bps + ~50 bps
-/- ~90bps
Action Group EBITDA 2016 2017 2018
Source: company information 48 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 2 Consistent margins across all categories
60%
50%
(1) 40%
30%
% margin Gross % 20%
10%
0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Category
Source: company information 49 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 (1) (Net sales - Cost of goods sold) / Net sales
2 All LFL stores are profitable
Store contribution (% of net sales)net of (% contribution Store Store contribution 2018 (€ x 1.000)x (€ 2018 contribution Store
Store Contribution Store Contribution % Linear (Store Contribution % ) Stores opened before 1 January 2018 (1,095 stores)
50 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 3 Attractive pay-back periods for new stores
Attractive new store dynamics Historical average payback of stores (illustrative)
• Rapid sales ramp-up post-opening ~ 3.0 • Real estate discipline driving low rental costs: → No high street locations → At market or lower than market rent → Low maintenance capex ~1 year • CAPEX maintained at 2016 levels, in spite of ~ 0.5 payback format improvements, through better period procurement • Individual store payback varies depending on ~ -0.5 size of store and geography Upfront (1) Revenue (2) Store (1) capex per store EBITDA
Source: Company information 51 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 (1) Including opening costs for new stores (2) Based on total sales/total number of stores 3 Action enjoys negative total working capital
€0 • Total net working capital in Action is negative throughout the calendar year
• Creditors are fully financing
company inventories Net working Net capital in €m
• The faster Action grows, the stronger the cash flow performance
P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12
2017 2018
Source: company information 52 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 3 CAPEX development
11%
• Total CAPEX increased by 11% this year • We will continue to invest in DCs, stores and IT • CAPEX (€) will increase over the next years: → We continue to build capability and capacity for future growth
Other DC maintenance Store maintenance / RERs IT New DC (incl. IT) Store expansion 2017 2018
Source: company information 53 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 3 Strong cash flow: 2018 conversion of 70%
99% 100% • Low capital intensity, negative working capital 92% 86% and fast payback for new stores lead to strong cashflow 73% 70% • 2018 cash conversion 314 58% increased versus 2017, 268 notwithstanding 225 223 significant investment
153
98 94
2012 2013 2014 2015 2016 2017 2018
Source: company information 54 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 (1) Cash conversion = Operational cashflow (excl. capex for new DCs) / EBITDA Overview of high-level financials
2018 2017 Change
Net sales (€m) 4,216 3,418 + 23.3%
Like-for-Like sales growth 3.2% 5.3%
Operating EBITDA (€m) 450 387 + 16.3%
EBITDA margin 10.7% 11.3%
Number of stores 1,325 1,095 + 21.0%
55 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 Agenda
1. Introduction Simon Borrows
2. Business performance 2018 Sander van der Laan
3. Strategy update Sander van der Laan
4. Financial performance 2018 Joost Sliepenbeek
5. Wrap Up Simon Borrows
56 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 3i committed to Action’s ambition to become a €10 billion sales company
3i commitment Action revenue in €m €10b • Long-term investor with patient capital • Active private governance remains optimal for execution of Action’s strategy • Compounding Action’s growth remains attractive to 3i 4,216 3,418
2,675 Eurofund V process 1,995 1,506 1,155 • Fund end date in November 2019 718 873 515 607 requiring LP liquidity event 426 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20xx
57 Action is just at the beginning of its journey Sales development of selected peers after reaching $1bn in sales
34 Walmart H&M 32 Inditex Family dollar 30 Dollar Tree TJX 28 Dollar General Action (2013-2018) 26 24 22
) 20 bn 18 16
14 Sales (USD Sales(USD 12 10 8 6 4 2 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Source: Capital IQ. Years after reaching $1bn in sales Total sales in USD based to FX rate in year $1bn in sales reached. Dollar Tree acquired Family Dollar in July 2015. Walmart data as of 1980. TJX figures from 1988 post sale of Zayre to Ames (sales start at $1.9bn). 58 What do we expect from Reckitt Benckiser
Thank you for your attention!
59 ACTION | 3I CAPITAL MARKETS SEMINAR 2019 18/03/2019