Investor Presentation | HY 2019 - B&S Group
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Investor Presentation | HY 2019
1
A unique value adding proposition
Differentiated
Long term relation- Broad and relevant
sourcing
ships with A-brand Supply chain
excellence
assortment of FMCG
suppliers
Linking suppliers
Delivering to the right place,
and customers that are difficult to
at the right time
connect
Fully bonded
Regulatory
supply chain
expertise
Providing customers Serving complex niche
tailored solutions markets worldwide
Highly efficient
logistical
platform
2
Serving a diversified customer base worldwide
Empowering wholesalers and retailers (B2B) Serving complex end-markets in maritime
Partner in remote distribution Experienced in retail (B2C)
3
Entrepreneurial segments supported by centralised backbone
Legal &
IT Distribution HR Finance & Control
Compliance
Distribution of bonded liquors and Specialty distribution of FMCG Specialty retail at high traffic
health & beauty products to products to maritime and remote airports and remote locations
specialty retailers and online end- markets
customers
67% 25% 8%
of 2018 Group turnover of 2018 Group turnover
of 2018 Group turnover
4
Key elements defining
our model
1Trusted and reliable partner with a clear
value proposition
2Leading positions in attractive channels and
VALUE
specialised markets
3Entrepreneurial segments powered by our ADDING
4
centralised Group platform
Track record of strong and consistent
distribution
profitable growth
5Focused on organic growth complemented
with strategic M&A
partner
5
Solid sales channels that are exposed to attractive long term trends
Business segments B&S Group markets/ channels Attractive long term trends
Turnover per segment 2018 Contribution to B&S Group turnover 2018
Market Channel
40.7%
Outsourcing
27.2% Value retail
€ 1,197 M
Fragmentation and
complexity
6.7%
Globalisation E-commerce
7.3%
A-brands and
10.3% luxury
€ 446 M
Travel
Compliance
€ 137 M 7.8%
Column1
6
A defensive profile towards macro economic developments
Robust and global Bonded supplier Diversified supplier
product categories status and customer basis
with mainly A- limiting the impact with limited
branded products that of geopolitical dependency on a
outperform in developments single market
economic hardship
7
Striving for continuous
economies of scale
Investments in logistics
and IT solutions on
Group level
Combining segmental
purchasing and sourcing
activities
Utilising our global
footprint to leverage
price position
8Firmly focused on continuous organic turnover growth
complemented with selective M&A
Discontinuation of FragranceNet.com
non-premium-brand
perfumes
Alcodis
114
Topbrands
103
65
(in million €) Capi
Acquisitive
UCVF 38
Organic
58
9 1,633
1,338 1,393
1,275
1,152
964
816 845
695
573
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Dutch GAAP IFRS
9Resulting in a strong track record of profitable growth
Discontinuation of non-
premium-brand
perfumes 1,747
Turnover EBITDA
CAGR ’09 - ’18 1,495 CAGR ’09 - ’18 109
106
1,339
13.2% p.a. 1,338 17.3% p.a.
89
1,152 Pressure on 84
China luxury
gifting
1,002
903 65
825 59
52
677 47
573
38
26
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Dutch GAAP IFRS
Dutch GAAP IFRS
10Well positioned to capture growth opportunities
Synergy
effects
Acquisitive
growth Boosting organic
Organic growth of acquired
company
growth
• Business model fit
Expansion by increasing presence in • Integration focused Value chain expansion
our current markets on organic growth
Sourcing synergies
Tapping into new products and
markets Strategy
Disciplined on price Combined market
knowledge
Cross-selling of products to existing Initially structured as
partnership or JV
customers Centralised backbone
Rapid back office and – plug & play
sourcing integration
Utilising the growth of existing
customers by matching
their increased demand for our
products
11HY 2019 Highlights
12HY 2019 – Financial Highlights
Overall turnover growth ▪ 17.1% to € 898.3 M (15.1% at constant currency)
▪ Growth of 7.4% (5.4% at constant currency)
Organic turnover growth
▪ Of this growth, 0.9% stems from FragranceNet.com
Business segment
▪ HTG +28.5% | B&S +0.5% | Retail +1.6%
contribution
▪ EBITDA amounted to € 52.9 M
EBITDA ▪ pre IFRS 16 EBITDA came in at € 48.1 M
▪ Solvency close to 34%
Financial position ▪ Net debt / EBITDA at 2.9
13Key developments HY 2019
Investments on Group level Performance on Segment level
▪ Expansion of robotised warehouse in
▪ Growth driven by Health & Beauty value retail and e-commerce markets
HTG segment and combined with
FNET technology to further boost ▪ Strengthened international positions, intensified relationships in value
Health & Beauty category retail and increased focus on the online platform business
▪ Synergies from combined sourcing in Health & Beauty category
▪ Logistics operations in B&S Segment
on track
▪ Maritime market circumstances remain unfavourable
▪ Acquisition Lagaay Medical Group in ▪ Opportunities identified in remote markets
B&S Segment enhances single source ▪ Performance in B&S Segment as expected given market conditions and
supply concept additional costs in logistics (as communicated) with clear performance
improvement in B&S Segment trend noticeable in H2
▪ Acquisition Rotterdam & Weeze
Airport in Retail Segment strengthens ▪ Lagaay integration into the B&S Segment in preparation
regional store portfolio
▪ Retail segment performed as expected
14Key figures HY 2019
€ million (unless otherwise HY 2019 HY 2019 HY 2018 Δ (%)
Commentary
indicated) reported pre IFRS 16 reported reported
Profit or loss account
▪ Turnover grew 17.1%, gross
Turnover 898.3 898.3 766.9 17.1% profit grew 19.9%, margin was
Gross profit 126.3 126.3 108.5 19.9% 14.1%
EBITDA 52.9 48.1 45.9 15.2%
Depreciation & Amortisation 12.1 7.6 4.4 ▪ EBITDA grew 15.2%
Profit before tax 35.1 35.5 38.4 (8.6%) ▪ IFRS 16 positively impacted
EBITDA by € 4.8 M, logistical
costs B&S Segment negatively
impacted EBITDA
▪ FragranceNet.com straight-line
amortisation of intangible fixed
assets has a material impact
on contribution to results in H1
from Fnet
15HY 2019 – Segmental breakdown
Commentary
€ million HY 2019 HY 2018 Change
▪ HTG overall growth mainly
Turnover 643.5 500.8 28.5% attributable to Health & Beauty
HTG
Gross profit 82.9 58.7 41.1% category: value retail, e-
EBITDA 40.4 30.8 31.4%
commerce platforms and online
EBITDA margin 6.3% 6.1% 0.2%
B2C
▪ Organic growth of HTG was
Turnover 221.3 220.3 0.5%
13.6% (12.1% on a constant
Gross profit 27.2 31.3 -13.0%
B&S EBITDA 9.5 11.5 -17.1%
currency basis): strengthened
EBITDA margin 4.3% 5.2% -0.9% international positions, intensified
relationships in value retail and
increased focus on online
Turnover 64.7 63.7 1.6% platform business
Gross profit 16.5 15.8 4.3%
Retail EBITDA 4.2 4.1 0.6% ▪ B&S EBITDA impacted by
EBITDA margin 6.4% 6.5% -0.1% additional € 4 M logistics costs
(as communicated in CMD)
▪ Retail performed as expected
16Overall turnover growth analysis
Commentary
▪ The HTG segment is the main
contributor to Group organic
growth in H1 2019
▪ The inclusion of the acquisition
of FragranceNet.com
contributed € 81.8 M of which
€ 6.9 M was organic growth
stemming largely from
combined sourcing advantages
▪ The development of the
EUR/USD exchange rate had a
positive effect of € 15.3 M on
turnover growth
17Financial Position
18HY 2019 - Financial position
€ million (unless stated otherwise) HY 2019 HY 2018 Commentary
Financial position ▪ Financial position within pre-
determined objectives
Solvency ratio 33.7% 37.3%
▪ Balance sheet and as such
Net debt 329.8 277.0
solvency impacted by € 87 M
Net debt / EBITDA 2.9* 2.7 intangibles following Fnet
Inventory in days 98 103
acquisition
Working capital in days 100 107 ▪ Net debt increase mainly
resulting from Fnet acquisition
and associated consolidation,
and the investment in working
capital
▪ Increase in working capital:
mainly related to inventory
supporting our growth
expectations; working capital in
days improved
*Taking into account the LTM EBITDA of FragranceNet.com
19Net debt development HY 2019
Commentary
▪ HY 18 negative cash flow from
operating activities: € 48.2 M
▪ HY 19 only € 0.4 M. Investment
in inventory in 2019 set-of by
cash inflow from late Q4 2018
sales as indicated at FY18
▪ Dividend represents payment to
minority shareholders
FragranceNet.com
▪ Investing activities mainly
investment in software € 3.0 M
and logistical infrastructure €
7.1M
▪ Net debt excluding IFRS 16
20Working capital development
(€ x 1,000) HY 2019 HY 2018 Commentary
Inventory ▪ Inventory development (+14%) in line with business
431.9 379.0
(days)
(98) (103)
development (+17.1%)
Trade receivables
▪ Trade receivables in line with business development
(days) 193.4 160.5
(38) (37)
▪ Increase in trade payables is fully in line with the increase in
turnover and inventory
Trade payables 112.6 79.2
550.0 2,100.0
500.0 1,900.0
Working capital 450.0
512.7 460.3 1,700.0
(days) 400.0
(100) (107)
350.0 1,500.0
300.0 1,300.0
2016 HY 2016 FY 2017 HY 2017 FY 2018 HY 2018 FY 2019 HY
WC Turnover
21Outlook
22Outlook
Expectations H2 and beyond
▪ Strong H2 in Health & Beauty with new business opportunities in B2B
Management focus
distribution to value retailers and e-commerce platforms
▪ Expanding e-commerce ▪ Demand in online B2C business of FragranceNet.com continues to grow
platform business
▪ Seasonality further amplified and continued trend in sales shifting to late Q4
▪ Integration of Lagaay into B&S
Segment
▪ Turnover growth and - over time - profitability at stable margins in B&S
Segment by serving volume contracts in a cost-efficient way
▪ Capturing further opportunities
for organic growth
▪ Lagaay expected to contribute to maritime and remote business in B&S
segment
▪ New shop openings to contribute to turnover and profitability in Retail
23Appendices
24Our balance as at December 31, 2018
Net debt to be seen 76% of assets = WC
Non-current assets;
157.3
in combination
Equity; 273.1 Other
with/as part of WC 24%
AR
27%
Invent
Inventory; 377.9 ory
49%
Net Debt; 312.7
High turnaround IFRS 16 and
inventory and AR = Options
Accounts receivable; Trade payables;
90.8
high turn-around following Fnet
205.7
Net debt acq ≠ Net Debt
Other current
liabilities; 93.7
Other current assets; 29.4
Assets Equity and Liabilities
25Effects of prepayment to suppliers
PRODUCTS INCREASED ACCOUNTS PAYABLE
AVAILABLE INVENTORY REPLACED BY BANK
AT BEST PRICES POSITION DEBT
Competitive Inventory already AP days low compared to
advantage recognised at balance ‘classic’ distributor model
in the market during transit
26Our balance as at December 31, 2018
Net debt/EBITDA 2.9 | Days WC 103 Net debt/EBITDA 1.4 | Days WC 70
Non-current assets; Non-current assets; 157.3
157.3
Equity; 273.1 Equity; 273.1
Inventory; 377.9 Inventory; 377.9
OR Net Debt; 156.8
Net Debt; 312.7
Trade payables; 246.7
Accounts receivable; Trade payables;
90.8 Accounts receivable; 205.7
205.7
Other current Other current liabilities; 93.7
Other current liabilities; 93.7
Other current assets; 29.4
assets; 29.4
Assets Equity and Liabilities Assets Equity and Liabilities
Accounts payable as is Accounts payable at 60 days
27Working capital development
WC Turnover
€ mln € mln
560 2,000
510
1,800
460
410 1,600
360 Start of
inventory 1,400
310 build-up
1,200
260
Peak
following
210 seasonal 1,000
sales
160
800
110
60 600
1612 1703 1706 1709 1712 1803 1806 1809 1812 1903
Accounts receivable Inventory Accounts payable Working capital
Turnover LTM Linear (Working capital) Linear (Turnover LTM)
28Managing
our portfolio
1Extensive KYC procedures
2Allguaranteed
debtors insured or payment
by other means
3IT controls on credit limits
4Dashboards to follow our
portfolio real time
Controls proven to be effective
Provision for doubtful debt (as %
of turnover)
2016: 0.12%
2017: 0.08%
2018: 0.06%
29Managing
our inventory
1Sourcing worldwide and building
up inventory for seasonal sales
2Dedicated departments with
category management
3Mainly A-brands with limited
exposure to economic hardship
4Weekly KPI reporting for tracking
developments
Controls proven to be effective
Write down (as % of turnover)
2016: 0.32%
2017: 0.29%
2018: 0.19%
30Our balance as at December 31, 2018
Balance sheet WC forms main part
Non-current assets;
157.3 remained solid post of asset side
Equity; 273.1
FragranceNet balance sheet
acquisition
Inventory; 377.9
Healthy
positions with Net Debt; 312.7 Inventories and As result of M&A price
high
turnaround
receivables partly discipline, goodwill on
and cash financed by debt balance sheet limited
generation
(€ 59.9 M)
Accounts receivable;
205.7 Other current
liabilities; 184.5
Other current assets;
29.4
ASSETS EQUITY AND LIABILITIES
31Net debt development 2018
Increase of 16.3%
Turnover +16.8%
Increase of 12.1%
Turnover +12.5%
Acq.
Topbrands 30.4
174.1
*After dividend distribution
32Tax position explained
Januari 1,
2018 January 1, 2018
Transfer pricing agreement for all 100% group companies worldwide
2018
Expected tax charge: 19%
Actual tax charge: 21%
Result of:
▪ Increased contribution of Topbrands and JTG to result however taxed
at 25%
December ▪ FragranceNet taxed at 28%
31, 2018
Expectations 2019
Delay of tax decrease in Netherlands to 2020 (22.55%)
No significant change in composition of result expected
33Forward-looking information / disclaimer
This presentation includes forward-looking statements. Other than reported financial results and historical information, all
statements included in this presentation, including, without limitation, those regarding our financial position, business strategy and
management plans and objectives for future operations, are, or may be deemed to be, forward-looking statements. These forward-
looking statements may be identified by the use of forward-looking terminology, including the terms ''believes'', ''estimates'',
''plans'', ''projects'', ''anticipates'', ''expects'', ''intends'', ''may'', ''will'' or ''should'' or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions.
These forward-looking statements are based on our current expectations and projections about future events and are subject to
risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.
Many of these risks and uncertainties relate to factors that are beyond B&S Group’s ability to control or estimate precisely, such as
future market conditions, the behaviour of other market participants and the actions of governmental regulators. Readers are
cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation
and are subject to change without notice. Other than as required by applicable law or the applicable rules of any exchange on
which our securities may be traded, we have no intention or obligation to update forward-looking statements.
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