26.01.2012 Results Presentation
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results and strategy 1H 2012 Wide portfolio of business concepts Economy, shopping centres & cities Floorspace (average – sq m) . 358 Capex (PLN per sq m) . 1 025 Super-economy concept, hypermarkets & midsized towns Floorspace (average – sq m) . 135 Capex (PLN per sq m) . 785 Premium brand, shopping malls Floorspace (average – sq m) . 137 Capex (PLN per sq m) . 2 225 www.ng2.pl Results and strategy 1H 2012 2 Results and strategy of NG2 Management is fully satisfied with l-f-l sales, traffic, floorspace development and growth in revenue. However, due to the lower margin in H1 net profit is below expectations. Based on deep analysis and first openings the new long-term strateg y of rapid expansion in CEE countries was developed. In the years 2013–2015 NG2 will strengthen its position of the market leader in Poland. The same position is to be achieved in Czech Republic, Slovakia and Hungary. CCC stores will be also opened in Russia, Romania, Kazahstan, Ukraine and Baltic countries. www.ng2.pl Results and strategy 1H 2012 3 NG2 S.A. — stock listed since 2004 Analysts coverage Institution Analyst / Contact ING Securities Milena Olszewska [email protected] Deutsche Bank Securities Łukasz Wachełko [email protected] DM Banku Handlowego Piotr Zielonka [email protected] KBC Securities Kamil Szlaga [email protected] Unicredit CAIB Małgorzata Kloka [email protected] 70 Gabriela Borowska 60 000 Wood&Company [email protected] 55 000 PKO BP Włodzimierz Giller 60 [email protected] 50 000 Ipopema Securities Tomasz Duda [email protected] 45 000 50 Sylwia Jaśkiewicz (pkt.) IDM [email protected] 40 000 Marcin Stebakow WIG 40 Dom Maklerski Banku BPS 35 000 [email protected] Biuro Maklerskie BPH S.A. Tomasz Chwiałkowski 30 000 30 [email protected] Adam Kaptur 25 000 Millennium Dom Maklerski S.A. [email protected] 20 20 000 DM Amerbrokers S.A. Renata Miś | | [email protected] Raiff eisen Centrobank AG Jakub Krawczyk 3. January 2008 24. August 2012 [email protected] Stock info Share Price = 58,20 PLN Market Cap: Number of shares: Reuters: CCCC.WA (PLNm) 2,235 38.400.000 Bloomberg: CCC PW (EURm) 555,9 www.ng2.pl Free fl oat 39,3% www.ng2.pl Results and strategy 1H 2012 4 Consolidated Profi t 2004–2011 (PLN ‘000) Consolidated EBIT Consolidated EBITDA 17,5% 16,6% 15,5% 19,2% 14,58% 17,8% 16,8% 16,80% 12,6% 14,7% 11,6% 11,7% 10,7% 13,3% 13,7% 11,5% 29 684 54 869 62 044 63 246 131 916 108 159 129 119 159 052 32 068 58 774 67 449 72 379 144 942 126 505 151 285 183 294 2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010 2011 Consolidated net profi t 13,25% 13,28% 13,58% 11,46% 11,25% 8,75% 9,06% 7,46% 20743 43836 53222 47653 102463 83603 117856 122 776 2004 2005 2006 2007 2008 2009 2010 2011 www.ng2.pl Results and strategy 1H 2012 5 NG2 S.A. — leader of the footwear market in Poland Leader in the production of leather shoes in Poland Unique business model Growing number of outlets in Poland and abroad Huge potential Business based on of further growth economy and super- economy segment Very high profi tability Strong brand Largest retail chain in Poland www.ng2.pl Results and strategy 1H 2012 6 Footwear market in Poland millions of pairs 2,5% — Unsaturated market 2,3% 145 2,0% (4.1 pairs of shoes per year 2,0% 2,0% while the average fi gure for EU is 6.2) 2,0% 1,7% 1,9% — Lack of strong competitors 1,8% 139,7 1,5% — NG2 is the market leader in Poland 135 137 1,2% 134,3 — Market share of NG2 estimated at 16,5% (2011) 1,0% 131,8 129,5 0,5% 125 0,8% 127,3 125,8 123 0,0% 115 120,6 2011E 2012E 2013E 2008 2009E 2010E 2005 2006 2007 PLN billion 2,6% 2,5% 2,5% 2,3% 2,4% 2,3% 9,1 2,3% 2,3% 2,3% 2,3% 2,4% 8,9 8,7 2,2% 2,3% 8,5 2,1% 8,3 2,1% 8,2 8,0 2,0% 7,8 7,6 1,9% Footwear market volume YoY growth 2011E 2012E 2013E 2008 2009E 2010E 2005 2006 2007 www.ng2.pl Results and strategy 1H 2012 7 NG2 S.A. — growth & value delivered Total number of outlets: 709 (30.06.2012) Domestic suppliers Foreign suppliers Owned (596) + Agency (28) 312 28 Exclusivity for Effective logistics 35 190 56 3 NG2 23 5 1 1 1 54 Own production Orders based Flexibility of supplies on www Tax benefi ts Franchise (85) www.ng2.pl Results and strategy 1H 2012 8 Floorspace and number of stores 118 049 118 104 620 100 929 96 122 94 268 91 91 247 90 738 82 515 28 355 28 637 29 444 27 447 25 216 29 091 72 388 26 875 25737 59 59 407 16 092 16 46 723 7 330 7 132 179 228 254 273 274 282 283 293 301 340 66 142 213 213 220 216 220 216 198 190 EoY EoY EoY EoY EoY 1Q 2Q 3Q 4Q 1Q 1H EoY EoY EoY EoY 1Q 2Q 3Q 4Q 1Q 2006 2007 2008 2009 2010 2011 2011 2011 2011 2012 2012 1H 2007 2008 2009 2010 2011 2011 2011 2011 2012 2012 18 091 18 17 391 17 16 470 16 15 287 15 14 782 14 14 282 14 14 282 14 7 8637 6 8546 12 46612 6 743 6 435 5 267 5 031 4 938 5 5435 8 358 8 4 786 4 4964 5 415 2 4842 4 156 14 25 33 51 49 48 46 39 37 36 35 11 15 25 38 45 45 47 49 52 54 56 EoY EoY EoY EoY EoY 1Q 2Q 3Q 4Q 1Q 1H EoY EoY EoY EoY EoY 1Q 2Q 3Q 4Q 1Q 1H 2006 2007 2008 2009 2010 2011 2011 2011 2011 2012 2012 2006 2007 2008 2009 2010 2011 2011 2011 2011 2012 2012 www.ng2.pl Results and strategy 1H 2012 9 Revenue split by volume and sales channels (%) 1H 2011 53,87% 1H 2012 60,10% 17,97% 1,20% 15,30% 1,85% 8,27% 18,04% 9,31% 12,97% 1,12% CCC CCC Agency BOTI QUAZI NG2 to CCC Boty Franchise www.ng2.pl Results and strategy 1H 2012 10 Purchases split by sources of supplies ( PLN ‘000) 163 379 134 819 90 563 81 732 39 032 34 824 1 652 6 483 1H 2011 1H 2011 1H 2012 1H 2012 1H 2011 1H 2012 1H 2011 1H 2012 China Poland India other countries www.ng2.pl Results and strategy 1H 2012 11 Purchases split by currency I–VI 2011/2012 (PLN ‘000) 163 640 137 062 1H 2011 1H 2012 91 632 81 732 42 203 36 215 EUR PLN USD www.ng2.pl Results and strategy 1H 2012 12 Financial results — 1H 2012 1H 2011 1H 2012 Change % `000 PLN `000 PLN 2012/2011 Revenue 484 257 583 016 20,39% Gross Profit on Sale 269 898 296 447 9,84% Gross Profit on Sale Margin 55,73% 50,85% -8,76% Selling Costs -203 355 -237 030 16,56% General & Administrative Costs -8 611 2 408 -127,96% EBIT 55 561 58 953 6,11% EBIT Margin 11,47% 10,11% -11,86% Financial Costs -3 942 -7 476 89,65% Gross Profit 51 826 51 773 -0,10% Net Profit 41 683 45 453 9,04% Net Profit Margin 8,61% 7,80% -9,41% www.ng2.pl Results and strategy 1H 2012 13 GK NG2 — unleveraged retailer (as of 30th of June) Financial Indebtedness / Equity(%) Net debt /EBITDA Gross Profi t Interest Cover 1,3 18,6 62,3% 50,3% 0,9 8,6 1H 2011 1H 2012 1H 2011 1H 2012 1H 2011 1H 2012 1H2011 1H2012 Financial Indebtedness (%) 50,3% 62,3% Net debt / EBITDA 0,9 1,3 Gross Profi t Interest Cover 18,6 8,6 www.ng2.pl Results and strategy 1H 2012 14 L-f-l sales I — 21.VIII.2012 58,5% 71,5% 45,8% 54,5% 48,8% 39,4% 23,6% 39,6% 32,7% 29,4% 28,6% 19,0% 18,6% 17,9% 25,2% 23,5% I I-II I-III I-IV I-V I-VI I-VII I-21.VIII I I-II I-III I-IV I-V I-VI I-VII I-21.VIII 5,8% 42,8% 0,7% 36,0% -0,6% -1,8% 25,3% -4,7% -6,1% -6,9% 9,2% 8,2% 7,8% 13,0% -8,6% 7,0% I I-II I-III I-IV I-V I-VI I-VII I-21.VIII I I-II I-III I-IV I-V I-VI I-VII I-21.VIII www.ng2.pl Results and strategy 1H 2012 15 Selling costs in company — owned stores selling rental selling rental selling rental costs costs costs costs costs costs (PLN / m2) (PLN / m2) (PLN / m2) (PLN / m2) (PLN / m2) (PLN / m2) 1H 2012 198,2 96,6 188,4 76,6 309,4 176,2 1H 2011 186,6 92,1 182,0 75,4 301,3 161,2 % 2012/2011 6,2% 4,9% 3,5% 1,6% 2,7% 9,3% 2Q 2012 200,6 97,9 189,2 76,7 308,9 180,0 2Q 2011 192,5 94,4 187,9 78,3 310,8 168,1 % 2012/2011 4,2% 3,7% 0,7% -2,0% -0,6% 7,1% 1Q 2012 195,7 95,4 187,5 76,5 309,9 172,4 1Q 2011 180,7 89,8 176,2 72,4 291,9 154,2 % 2012/2011 8,3% 6,2% 6,4% 5,7% 6,2% 11,8% www.ng2.pl Results and strategy 1H 2012 16 Strategy of NG2 Group The strategic goal for the years 2013–2015 is to become the market leader in each of the CEE countries: Poland, Czech Republic, Slovakia and Hungary.