flaconi - noah16 london
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Opportunity to become Europe’s Leading Platform for Beauty Products
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2-3Tempodrom, Berlin Old Billingsgate, London
NOV201722-23 JUN2017
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1
Executive Summary
SOURCE: Flaconi; Euromonitor; Datamonitor; Parfümerie Verband; web research
Market size>€30bn
2020e
Thereof online>25%2020e
Flaconi provides the unique opportunity to develop the ‘Zalando for Beauty Products’ in an >€30bn EU market
The premium beauty product market is protected by selective distribution with only 3 relevant pure players (incl. Flaconi)
The industry generates up to 15 repurchases per customer and year, >40% gross margin and <3% customer returns
Flaconi achieves best in class marketing (CPO below €3.8, conversion >6.5%) and operations(Ø 4.5% out-of-stock visits, 65 days stock)
2
Premium beauty product market in Europe is big, growing & starting to move online
>€25bn marketfor premium beauty products1 in Europe
Up to
15 repurchasesfor beauty products per yearin Germany
Average annual spend of
>€152 for fragrances (€106 facial care, €124 body care)in Germany
71% of women use Perfume & Eau de Toilette every day in Germany
Double digit online growthindicates an offline to online shift is happening
1 Premium market defined as all premium brands, i.e. from players like L’Oreal, Estée Lauder, Shiseido, LVMH, P&G, Coty, Chanel, Hugo Boss among others; no white label drug store products
SOURCE: Euromonitor; Datamonitor; Douglas annual report; Parfümerie Verband; web research; Flaconi analysis
3.7% p.a. growthof beauty market shows robust industry trend
3This copyrighted document is property of the Flaconi GmbH and is disclosed in confidence. 3
€25bn market for premium beauty products grows by 3.7%, online market increased by >49% annually
Note: Beauty market defined by mass & premium products across all product categories. Premium market defined as all premium brands, i.e. from players like L’Oreal, Estée Lauder, Shiseido, LVMH, P&G, Coty, Chanel among others
SOURCE: Euromonitor; Datamonitor; Douglas annual report; Parfümerie Verband; competitor interviews; competitive intelligence; web research; Flaconi analysis
106,766
78,441
25,14724,414
2013
23,201101,642
2014
82,352
2015
113,268
2016e
87,36784,822
25,901
+3.7%109,969
691 1,148
+49.1%
1,7222,290
Premium marketMass market
Online premium market
European (online) market for beauty productsin € mn
3.0%8.8%
Offline to online shift is currently happening in the premium beauty market
4
Company fact sheet
Flaconi is becoming the leading eCommercePlatform for Beauty Products in Europe
>€40mnRevenues
LTM H1 2016
CAGR >100%
Revenue H1 2016 LTM vs. LTM at closing
# 2 DE(after Douglas)
in 2017
Customers>850k
Brands>240
SKUs active>15k
§ Traction in the market – >€40mn revenues LTM H1 2016 & >100% CAGR
§ Wide reach – >850k unique customersand 1.4mn+ orders
§ Full assortment – >240 brands & >15k SKUs available in categories fragrances, skin care, make-up, hair & wellness products
§ Great customer experience – >65 net promoter score (Ø 32 for retail in 2015)
§ Operational excellence – 4.5% out-of-stock visits & <65 days inventory carry
§ Direct sourcing only – Flaconi sources all products directly from brands1 (no grey market products)
1 Including highly selectively distributed brands, e.g. Chanel, Estée Lauder, Shiseido, LVMH among others
SOURCE: Flaconi
5This copyrighted document is property of the Flaconi GmbH and is disclosed in confidence. 5
2009 2011 2010 2012
Flaconi is well positioned to become the ‘Zalando for Beauty Products’
SOURCE: Zalando annual reports; Statista; Flaconi analysis
Revenue development Zalando vs. Flaconi year 1 to 6 after launchindexed to 100% (year 3 after launch)
359
280
205
100
382
327
121100
274
638
Zalando (DACH only)Flaconi (DE only)
2011 2013 2012 2014 2013 2015 2014 2016e
ProSiebenSat.1 acquired Flaconi
2015
Zalando
Flaconi
Category expansionLaunch
Media for equity deal
Operational excellence
§ Skin & hair care§ Fragrances § 2012/13 § 2014/15
§ Shoes § Fashion & sports § 2010/11 § 2012/13
Flaconi #2 online retailer for premium beauty
products
6This copyrighted document is property of the Flaconi GmbH and is disclosed in confidence. 6
TV media support developed Flaconi’s brand awareness to ~50% within 3 years
0
10
20
30
40
50
30.0%
2HY13
29.7%
1HY16
48.1%
2HY15
+62.0%
44.0%
1HY15
39.4%
2HY14
34.9%
1HY14
Awareness grew from 30% in 2HY13 to 48% in 1HY16
1 Top of mind awareness in on-site survey using structured questionnaire
SOURCE: Flaconi; SevenOne Media brand awareness survey 2016 (persons between 18-59 years; n = 1,002)
Brand awareness1
(in %)
2014 2015 20162013
7This copyrighted document is property of the Flaconi GmbH and is disclosed in confidence. 7
Startup Professionalization Scaling
30.7
2014 2016e
11.4
20122011 2017e
9.42.5
2015
0.4
2013
Launch
Flaconi is growing strongly since 2011 & now scaling due to professionalization after P7S1 acquisition
SOURCE: Flaconi 7
in € mn
CAGR 14-16e:>100%
8This copyrighted document is property of the Flaconi GmbH and is disclosed in confidence. 8
Basket size of returning customers (2HY14-2015)in € per order
Returning customers buy Ø 3.4 times and their basket size is >20% bigger than AOV
1 Extrapolated to full 12 month cohort 2 Expanding selection in hair care, skin care & make-up 3 Average order value (excl. taxes) 2015
SOURCE: Flaconi; order baskets and frequency of with at least 2 orders customers between 2HY14-2015
AOV3
€1.43
+14%
2HY15
61.20
1HY15
52.26
2HY14
53.56
2HY15
3.401
1HY15
3.13
2HY14
3.07
+11%
Orders by returning customers (2HY14-2015)in # order of customers (cohort view)
Acquisition by ProSiebenSat.1
Selection expansion2
9
Low competition in Germany as well as Europe due to selective distribution system
Low competition§ Selective distribution
system limits threat of new entrants (‘Amazon protection’)
§ 3 domestic competitors: Douglas, parfumdreams and iParfumerie
§ 2 pure play EU competitors:feelunique, lookfantastic
Limited digital capabilities§ Scattered local retailers lack
skills to digitalize their business
§ Focus on rather ‘bringing store online’ than digital pure play
§ Main competitor Douglas focuses on brick & mortar stores
Note: Online revenue only for Douglas
SOURCE: Flaconi
Offline
Low budget brands
Online
Premium brands
Competition in domestic market
10
Flaconi has opportunities to enter additional EU markets organically & inorganically
Complexity to enter
Easy
Difficult
Organic
M&A priorities
Low High
Market attractiveness
Beauty & care market 2015, in EUR bn.
Online growth beauty & care, YoY 2015, in %
§ Competitive intensity/rivalry
§ Product use differentiation
§ Geographical access (distance)
§ Market size (beauty & care) – total§ Online penetration (beauty & care)§ Market growth rate – online§ Price positioning§ Economic stability
Poland+8.33.5
Austria+9.41.5
Switzerland+9.41.4
Netherlands+9.7 3.1
Italy+9.7
8.9
UK+6.2
15.5
France+4.1
12.6
Nordics+9.3 5.8
Spain &Portugal
+1.4 8.2
Organic growth focus§ Media alliance partners
contacted for potential M4E deals
M&A focus, potential targets§ Nordics§ UK§ Further potential targets to be
screened
SOURCE: Flaconi; Euromonitor; web research
Selected Completed NOAH Transactions
Focus on Leading European Internet companies
Covering over 400 companies across 25 online verticals, a broad range of over 500 investors as well as 100+ online-focused corporates
Deep understanding of industry dynamics
Ability to add value beyond banking advice
Facilitates overall process and minimizes management distraction
NOAH Advisors is globally well connected and has direct access to virtually all key players in the industry
Knowledge of and strong relationships with potential buyers’ key decision makers
Proactively finds and unlocks attractive investment opportunities for leading investors
Annual NOAH Conference in its 8th year
Over 40 years of combined relevant M&A experience
Routine execution of M&A and financing transactions with sizes of several billion euros
24 successfully completed NOAH Advisors transactions underline successful transfer of M&A competencies to the Internet sector
Entrepreneurial mind-set, focused on growing the business and establishing a reputation for excellence
Ability to deliver top results in short time frames
Highly success-based compensation structures align interests of clients and NOAH Advisors, and demonstrate conviction to deliver top results
Creative deal solutions
September 2015
December 2014
September 2014
October 2014
May 2014
Sale of a 70% stake in
to
Exclusive Financial Advisor to Drushim and its Shareholders
Sale of 100% of
for $800m to
Exclusive Financial Advisor to Fotolia and the Selling Shareholders
Sale of 100% of
for €80m to
Exclusive Financial Advisor to Trovit and its Shareholders
Sale of controlling stake in
to
Exclusive Financial Advisor to Facile.it and its Shareholders
sold 100% of
for $228m to a joint venture between
Exclusive Financial Advisor to Yad2 and its Shareholders
Unique Industry Know-How
Unmatched Network and Relationships
Strong Investment Banking Competence
Full Commitment - We Are Entrepreneurs!
EUROPE’S LEADING INTERNET CORPORATE FINANCE BOUTIQUE
September 2016October 2016
May 2016
Investment in
by
Financial Advisor to Oakley Capital
Exclusive Financial Advisor to 10Bis and its Shareholders
®
Marco RodzynekManaging Director & Founder
Jan BrandesManaging Director
Justus LumpeManaging Director
The NOAH Advisors Core Banking Team
Nikhil ParmarDirector
10Bis Drushim
Acquisition of a Majority Stake in
by
from
at a valuation of €300m
Investment in
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by
84% Ownership