INSTITUTIONAL PRESENTATION - JUNE 2021 - Mziq
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INSTITUTIONAL
PRESENTATION
JUNE 2021
1
DISCLAIMER
The statements contained in this document regarding outlooks for the
business, forecasts of operations, financial results, and growth outlooks
for Petz are mere projections. They are solely based on the expectations
of management regarding the future of the business. These expectations
substantially depend on market conditions, performance of Brazilian
economy, the industry. and international markets. Therefore expectations
are subject to change without prior notice. All changes presented herein
are calculated based on figures in thousands of reais, as well as rounded
numbers.
This performance report includes accounting and non-accounting data,
such as operational, pro-forma financial data, and forecasts based on
management’s expectations. Non-accounting data was not reviewed by
the company’s independent
auditors.
2
1
MARKET
OUTLOOK
3
Sizeable and High Growth Market
The Brazilian pet market is one of the largest in the world, with secular trends driving strong growth
Pet Products Market and Annual Spend per Pet¹
(R$ bn, R$ per pet, 2020)
Trends
1,124.4 554.4 153.5
per pet per pet per pet Humanization: pet as a family member
Access to information
301.7
Couples having children later and reduction in the
number of children per family
32.1 27.8
Aging of Baby Boomers population, which are now
United States UK Brazil more likely to have pets
Verticalization of urban centers
Pet Products Market Evolution in Brazil¹
(R$ bn) CAGR21E-25E: 16.0%
Number of Dogs and Cats vs Children under 14²
CAGR21E-25E: 4.3% (Brazil, in millions)
CAGR16-21E: 13.3% 66.6
57.8 116
CAGR16-21E: 6.4%
50.0 97
43.2 80
37.2
31.7
27.8
20.9 23.0
17.0 18.6 Cresc. de 45 44 44
~4x 2016 2021E 2026E
16-26E
2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E
¹ Source: Euromonitor International Limited, Pet Care 2022, formal sales to the end consumer including taxes, local currency, in current terms; and Euromonitor International Limited, Population 2020, in number of inhabitants. ² Source: IBGE on 4
April 6, 2021.
Highly Fragmented Market
Market consolidation at an early stage in Brazil, as mom-and-pop players still have a significant share
Pet Products Sales by Channel¹ Value Proposition
(% Pet Market)
Mom-and-
Food
Online Pop
2019 11% 55% 20% 3% 12% Retailers
Pet Shops
2020 11% 50% 21% 7% 11%
Assortment ✔ ✔ O X
Vet ✔ X O X
2019 15% 25% 43% 11% 7% Grooming ✔ X ✔ X
✔ ✔
Online
2020 17% 22% 40% 14% 6% Plataform X O
Omnichannel ✔ X X O
Expertise/
✔
2019 22% 8% 31% 19% 20%
Content O O X
Curation
✔ ✔ ✔
2020 19% 7% 29% 26% 19% Location
Convenience X
Pet Superstores Hyper, Supermarkets and Markets Others
Pet Shops and Vet Clinics E-Commerce Price = = = =
¹ Source: Euromonitor International Limited, Pet Care Survey 2022, retail sales including tax, in local currency, in current terms. 5
Further Growth Potential from Online
E-commerce penetration is still low when compared to other countries and segments
Pet E-commerce Penetration by Country¹
(E-commerce sales divided by total sales, 2020)
Retailing E-commerce
Pet E-commerce Brazil is one of the few countries where the
25.8%
penetration of e-commerce in the pet market
20.3%
is lower than the share of
13.9%
e-commerce in retail in general.
6.8%
USA Brazil
Pet E-commerce Market Size and Penetration in Brazil¹
(R$ bn, % of total pet market)
8.3%
Pet E-commerce Market Size
6.8%
Penetration of E-commerce in the Pet Market
2.6
2.9% 1.9
1.6% 1.8% 1.9%
0.3 0.3 0.4 0.7
2016 2017 2018 2019 2020 2021E
¹ Source: Euromonitor International Limited, Pet Care Survey 2022 and Retailing 2021, retail sales including tax, in local currency, in current terms. 6
Highly Resilient Market
Pet market is resilient and has posted consistent growth throughout economic cycles
Brazil GDP1, Retail2 and Pet Sector Real Growth2,3
(% yoy)
17.8%
8.1%
6.1% 6.2%
4.2%
1.9% 1.2% 1.3% 1.8% 1.8% 1.4% 1.2%
0.5% 0.3% 0.0%
-3.5% -3.3%
-4.1% -3.9%
-7.2% -7.3%
2014 2015 2016 2017 2018 2019 2020
GDP Growth Retail Growth Pet Sector Growth
¹ IBGE data on April 6, 2021. Data by IBGE and Euromonitor contains different deflation methodologies ² Retail growth data (real) refer to Euromonitor International, Retail Survey 2021, sales excluding tax, in real terms. ³ Pet retail growth data 7
(real) refer to Euromonitor International, Pet Care Survey 2021, sales including taxes, in real terms.
2
PETZ
OVERVIEW
8
The Largest and Most Comprehensive Ecosystem for Pet Lovers
Brazil’s Largest Pet Omnichannel Ratio LEADING
Retailer
138 stores in 16 States
100%
Integrated
Platform
29%
Digital
Sales
85%
Omnichannel
Ratio
COMPANY OF
THE PET SECTOR
Seres Veterinary Centers
IN BRAZIL
Standard Stores
Full Assortment of Products Largest Veterinary
Grooming and Vet Services Network in Brazil 10 Hospitals
(~1000 sqm with 8-12k SKUs) with 116 units
Express Stores Services & Adote Petz
Assortment of Main Products
Largest adoption
(Focused on Dogs and Cats) at Grooming
program in Brazi
Convenient Locations Centers
+50 mil adoptions
(~500 sqm with 6-8k SKUs)
Focused on pet care, well-being and health
As of March 31, 2021 (1Q21). 9
Petz in Numbers
1Q21 Highlights LTM
Total Gross Revenues (TGR): R$1.9 BN Largest network with 138 stores
(31 openings LTM)
(+50,3% yoy or +R$633MM)
116 Seres Veterinary Centers, of which
Digital Gross Revenue: R$504.8 MM 10 are hospitals
(+314.9% yoy; 26.7% TGR)
Presence in 16 States
Omnichannel Ratio: 81.4%
Gross Profit: R$769.5 MM
(+48.7% yoy; 40.7% TGR)
Adjusted EBITDA: R$171.4 MM
(+32.9% yoy; 9.1% TGR)
10Successful Growth Story
Continued expansion with a customer-centric focus and innovative approach
New
Vision
133 until 2025
105
80
63
46
34
27 27
13 18
1 1 1 6
2002 2003 2004 2008 ... 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E
• Repositioning in
IPO
First store open Start of the veterinary
24/7 investments in segment
• 1st store outside SP omnichannel • Creation of Adote
entering the Midwest platform Petz • Leading company in the Pet
Creation of region sector in Brazil
1st store Customer Service • Opening of DC • Store opening Record
Pet Center • Creation of UniPetz
Marginal SP • 1st store in the
Creation of the new South region
brand aiming at
• Launch of E-commerce • 1st store in the Northeast
nationwide expansion
• Launch of the loyalty • R$ 1 bn in revenue
• program “Vale a Pena ser • Full Roll-out of Omni
• Fiel”, cash-backmodel • Golden Lion in Cannes - Petcommerce
11NEW PETZ VISION
“To be recognized worldwide Expansion of Digital
as the best ecosystem in the store portfolio
and “Seres”
Platform
Pet sector by 2025 ”
Exclusive
products & Petz Customer
“Petz” brand Experience
Solution
People and
Culture ESG
12
12
12Petz Solution
Building the best and most comprehensive ecosystem of solutions for pets and tutors in Brazil
Stores & Full Pick-up Omnichannel
Hospitals Assortment Store Ship from
Store
App
Digital
Healthcare 24h
Exclusive products
Grooming
Content/
Curation
Social
Adoption Petz Play Hotel Events Projects
13Expansion of Petz Plataform
Consistent returns across Brazil and leverage for Omnichannel
138 Stores as
Mini-DCs
1 1 1
2 1
Better Faster
1 Lower freight
customer shipping
2 3 costs
3 1 experience time
3 1
1 10 2 1
Stores 3 Digital sales increase multiple times when a new physical store
84 is opened in a new region
Hospitals
6 1 7
4
8 1 Petz Target Market =
Available
Income
X Level of affection
for pets
Data as of March 31, 2021 (1Q21). 14Complete Offering Drives Customer Engagement
Cross-sell opportunities from wide product assortment and services offering
Products (95% of gross revenue) Services (5% of gross revenue)
(93% of gross revenue in 2019) (7% of gross revenue in 2019)
Mix Services Healthcare: Seres
(% of gross revenue) Food Non-Food
Grooming
46% 48%
54% 52%
2019 2020
Preventive Medicine
Long Tail on Digital: ~15 thousand
SKUs available at the website, leader Vaccines Castration
at the pet segment Adoption
Checkup
Exclusive products under the brand Microchip Laboratory
“Petz”: ~300 SKUs in ~25 categories, Hospitalization
in which we are leader or vice-leader
in most of them
Low Complexity High Complexity
Data as of December 31, 2020. 15Successful and Highly-Scalable Digital Platform
Better customer experience and cost optimization
100% of stores with Fully Integrated
+60% of digital sales Pick-up at
pick-up & Inventory/Endless
are made on the App store in 1 hour
ship from store aisle
Economy delivery Express Delivery Super Express Zero-contact pick-up
within one within 2 hours in Delivery within during the COVID-19
business day major cities minutes pandemic
Digital of Ship from
29% Penetration over
Total Gross
Revenue
85% Omnichannel
Ratio 96% Store orders
delivered within 1
business day
82% Deliveries
in 1 business day
Data as of March 31, 2021 (1Q21). 16Innovative and Recognized Digital Platform
Innovative Online Experience
Leader of apps of the pet
#1 sector on Google Play and
Apple Store¹
Pets choose what they
Integrated Experience
Artificial Intelligence Interaction with both Pets
and Tutors
want to buy Face and Sound Recognition
+790 mil Monthly Active Users²
Fully Tested Cannes Gold Lion Award
for All Dog Breeds 2019
#1 Leader in website
access³
7.3
6.9
6.3 6.4 6.4
5.6
COMPANY A
5.5 5.6 5.4 5.4
5.1 4.8
3.7 COMPANY B
3.0 3.3 3.2 3.1
Launch of the digital 2.8
platform of
Adote Petz
Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21
¹ Source: Google Play and Apple Store on May 7, 2021. ² Data from March 31, 2021. ³ Source: Similar Web 17
on May 7, 2021.Great Customer Experience
Strong feedback from customers that compares favorably with retail benchmarks
Subscription program
5x Champion in RA 1000,
the main seal of quality ~5x
more subscriber yoy
Triple crown in 2020
19%
• Best pet e-commerce of total gross revenue coming
from subscribers
• Best pet physical store
• CEO RA 1000
Majority of sales
to subscribers are unscheduled
purchases
Data as of March 31, 2021 (1Q21). 18Adote Petz: Largest Pet Adoption Program in Brazil
Adote Petz A Culture of Donation
90 NGOs & raised in financial resources and
+50.000
dogs and cats certified protection +R$6 MM products since the beginning of
the project
adopted associations
until 1Q21 across Brazil
NGOs Support
Largest Seller
Use of our digital platform to of Editora MOL
provide more information and in the country
technical knowledge to NGOs
through professional training
program
Customized management tools 5 0 0 0 0
Customers can round
for each of the NGOs up their purchases to
nearest
Launch of “Adote Petz” digital value and donate the
platform, with the main goal of change
facilitating the connection
between potential adopters and
our partner NGOs
193
FINANCIAL
HIGHLIGHTS
20Store Portfolio
Store opening record in 1Q21 with 31 units in the last 12 months
Number of Stores Distribution by Age Store Mix in São Paulo & Other States
Existing Stores, Openings % of total stores % of total stores
133 138
5
28 21% 25% 20% 22% 22% 26%
27% 27%
105 107 35% 36%
39% 39%
2
25 21% 16% 20% 17% 17%
80 19%
63 17 13% 18% 13%
133 11% 15% 17%
17 105 105 73% 74%
80 65% 61% 64% 61%
63 43% 43% 47% 43% 48%
42%
46
2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21 2018 2018 2019 2020 1Q20 1Q21
Existing Stores New Stores >3 years Year 3 Year 2 Year 1 São Paulo Other States
21Sales Performance
Digital sales boosting Total Gross Revenues
Total Gross Revenue Total Gross Revenue Growth Same-Store-Sales Growth
R$ million % Change, yoy % Change, yoy
1,706.7 52.8% 33.9%
45.1% 46.6%
1,164.2 36.9% 26.5%
913.4
27.6% 27.5% 16.6%
716.0
537.5 12.7%
351.8 7.7%
6.1%
2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21
22Digital Platform
Digital sales represented 23.2% in 2020, reaching a new record of 28.9% in 1Q21
Digital Gross Revenue and Penetration Omnichannel Ratio and E-commerce Share
R$ million; % Total Gross Revenue % Digital Gross Revenue
+341.8%
395.6
+235.5%
20.2% 21.1% 15.3%
28.9% 28.9%
23.2%
71.1%
98.8%
155.5 84.7%
79.8% 78.9%
71.1%
89.5 46.4
13.2%
23.2 36.9 28.9%
7.7%
3.2% 4.0% 1.2%
2017 2018 2019 2020 1Q20 1Q21 1Q20 1Q21
2017 2018 2019 2020
Digital Gross Revenues Digital Penetration Omnichannel E-commerce
23Accelerated Growth with Strong Profitability
Gross Margin in 2020 flat yoy, excluding tax credits, even with substantial increase in Digital Penetration
Gross Profit Adjusted EBITDA
R$ million, % Total Gross Revenue R$ million, % Total Gross Revenue
+45.6%
693.5
40.9% +39.7%
40.6% 40.0%
39.5%
38.5% 160.7
37.0%
476.3
115.1
351.9
+54.6% 9.4% +36.3%
264.8 76.3
215.2 8.4% 9.9% 40.2
47.7 29.5
139.1
6.7% 7.5%
8.4%
2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21
Gross Profit % Total Gross Revenues Adjusted EBITDA % Total Gross Revenues
24Investments and Indebtedness
Accelerating investments with comfortable leverage
Investments Net Debt (Cash) & Leverage
R$ million R$ million, x
14% 10%
173.7 2.0x
163.8
19.2 243.2
27.7
30.6 229.2 1.9x
16.1
8% 9% 1.3x
1.1x
120.1 123.9 96.5
46.2
26.9 5.0 53.3
10.2 37.5
3.8 6.3 31.0 8.8 0.2x
16.9 0.1x
2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21
New Stores and Hospitals Investments as % of Gross Revenues Net Debt/Adjusted EBITDA LTM Net Debt
Technology and Digital
Renovation, Maintenance and Others
254
2020-2025
STRATEGIC
OVERVIEW
26PETZ STRATEGIC PILLARS
1. Expansion of Store Portfolio and “Seres” Brand
2. Digital Platform
3. Customer Experience and Petz Solution
4. Exclusive Products & “Petz” Brand
5. People, Culture and ESG
271. Expansion of Store
Portfolio and “ Seres ” Brand
Entry in new markets and regions across Brazil and leverage
to Omnichannel strategy
2020 ACHIEVEMENTS
• Annual record for store openings (28 units), with 4Q20
• reaching a new quarterly record (13 units)
• Entry into 3 new states
• 133 stores in 16 States
• 3 new Seres Hospitals
• 114 Veterinary Centers Seres / 10 Hospitals in 8 UFs
2021 AGENDA
• Acceleration of the pace of store openings
PETZ STORES
• Expansion to new states and regions
HOSPITALS
• Expansion of Seres hospital network in the capitals and cities
NEW STATES 2020
• across the country
282. Digital Platform
The platform that gained the highest market share in Brazil’s
Pet sector in 2020
2020 ACHIEVEMENTS
• ~R$400mm revenues (+342% yoy or +R$300 mm)
• 27% Market share, more than 2x vs. 2019
• 23% share of Total Revenues, with new record of 26% in 4Q20
• Omnichannel Ratio of 80% in 2020, with new record of 84% in
• 4Q20
• Petz App: +50% from digital sales
• Subscriber base 5x larger yoy, representing 15% of total
revenues in Dec/20 (vs. ~10% in 3T20)
2021 AGENDA
• Investments in UX and data analytics
• Digitalization not only in products, but also in services
• Initiatives for efficiency gains and service level improvement
• in logistics
293. Customer Experience and
Petz Solution
Increase in product and services offering through
Omnichannel platform
2020 ACHIEVEMENTS
• Triple Crown - Reclame Aqui Award 2020
• New building of “Alô Petz”
• Detailed tracking of startups
• Weekly forums with top management about Petz Solution
2021 AGENDA
• Integration of new solutions into the ecosystem
• Greater integration across segments and channels
• Implementation of new tools to ensure better service agility
and efficiency
304. Exclusive Products &
“Petz ” Brand
Important profitability and customer loyalty leverage
2020 ACHIEVEMENTS
• Sucessfull launches in 2020: treats, bentonite cat litter and
activated carbon pad
• Around 300 SKUs in ~25 categories, in which we are leader
or vice-leader in most of them
• “Petz” Brand penetration in products sales 2x higher yoy in
4Q20
• Digital Long Tail: ~15k SKUs available on our website,
leadership in the Pet sector
2021 AGENDA
• Robust pipeline of launches under “Petz” brand
• Monthly addition of hundreds of SKUs in the Digital Platform
315. People, Culture and ESG
Petz DNA
2020 ACHIEVEMENTS
• Commitment not to lay off due to the pandemic scenario
• Creation of 1.3k new jobs, representing a headcount increase
of 35% yoy
• +40% of leadership positions occupied by women
• +45k cats and dogs adopted
• +R$2mm donation in cash and product to NGOs in
partnership with Editora Mol and Arredondar Institute
• R$1mm donation to COVID-19
Dados de 1 de março, 2021
• Launch of “Adote Petz” digital platform
2021 AGENDA
• Culture of excellence through employee training, development
and career path
• Expansion of renewable energy sources in our stores
325
APPENDIX
33Ownership Structure
Sergio Zimerman TRUXT Investimentos Others
(33.5%) (6.1%) (60.4%)
Based on the information available on our Reference Form as of May 31, 2021. 34THANK YOU!
https://ri.petz.com.br
ri@petz.com.br
Diogo Bassi
CFO & IRO
Matheus Nascimento
Senior IR & New Business Manager
Mirele Aragão
IR Specialist
Natália Esteves
IR Analyst
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