Q3 FY22 net revenue of €324 million, YoY
growth of +29% Adapting to the challenging environment to
deliver long-term profitable growth
- Q3 FY22 includes full contribution of recently acquired
businesses WiggleCRC and Tennis Express
- Active customers of 7.0 million, representing an increase of
+42% YoY
- Net revenue up +29% YoY to €324 million in Q3 FY22 and +29%
YoY to €806 million for 9M FY22
- Gross profit increased +13% YoY to €115 million in Q3 FY22
and +19% YoY to €292 million for 9M FY22
- Adj. EBITDA down to (€13) million in Q3 FY22 and (€42)
million for 9M FY22
- Net loss at (€52) million in Q3 FY22 and (€254) million for
9M FY22, with 9M FY22 being mostly impacted by one-off accounting
charges related to the public listing
- Company secures €150 million financing commitment to fund
organic growth with €200 million upsize option for potential
M&A
SIGNA Sports United N.V. (“SSU” or the “Company”), a NYSE listed
specialist online sports retail company with businesses and brands
in bike, tennis, outdoor and team sports, today reported financial
results for the third quarter of fiscal year 2022. Q3 FY22 includes
full contribution of recently acquired businesses WiggleCRC and
Tennis Express (acquisitions closed on December 14 and December 31,
2021, respectively).
In Q3 FY22, despite having improved from early FY22 lows, supply
chain constraints remained, especially in full bikes and e-bikes.
Additionally, the industry was hit by an unexpected deterioration
in consumer sentiment, as inflationary pressures and geopolitical
events weighed on demand in core markets. Nevertheless, SSU
achieved net revenue and gross profit growth on a reported basis by
+29% and +13% YoY respectively, and expanded its customer base by
42% YoY to 7.0M active customers in Q3 FY22, as the Company’s scale
increased. The Company is accelerating various initiatives to drive
efficiencies and synergies across the group and position itself to
deliver its long-term profitable growth targets.
Stephan Zoll, CEO of SSU, said, “Q3 FY22, our second quarter as
a consolidated company, confirmed how our scale enabled market
share growth in the competitive landscape. While the Company
demonstrated its ability to enhance and prioritize initiatives in
the evolving macroeconomic and operational environment, we are
confident that SSU’s strategic projects will accelerate our
strengths, to be best positioned for long-term profitable growth
when coming out of the current challenges.”
Q3 FY22 Consolidated Financial Summary and Key Operating
Metrics
Q3 Q3 YoY 9M YTD 9M YTD
YoY EUR in millions
FY21 FY22 Growth
FY21 FY22 Growth Key Financials Net Revenue
€251
€324
29.2%
€625
€806
28.8%
Gross Profit
€102
€115
12.6%
€245
€292
18.9%
% Margin
40.8%
35.5%
(524)bps
39.3%
36.2%
(304)bps
Adj. EBITDA
€13
(€13)
NM
€27
(€42)
NM
% Margin
5.3%
(4.1%)
NM
4.3%
(5.2%)
NM
Net Income
(€13)
(€52)
NM
(€25)
(€254)
NM
Operating Performance
LTM Active Customers
5.0
7.0
41.7%
5.0
7.0
41.7%
Total Visits
72.5
84.0
15.8%
198.9
247.5
24.5%
Net Orders
2.0
2.6
29.1%
4.9
7.2
45.6%
Net AOV
€105
€101
(3.6%)
€103
€101
(2.5%)
Note: Financials inclusive of Tennis Express from Jan 1, 2022
and inclusive of WiggleWCRC from Dec 15, 2021. FY22 KPIs PF for
recently closed acquisitions. Please refer to Non-IFRS Financial
Measures section for further detail regarding disclosed metrics.
“NM” defined as not meaningful.
Alex Johnstone, the Company’s CFO, said, “Whilst the challenging
operating environment has weighed on our organic performance, we
are focused on efficiency and leveraging our scale to position SSU
for profitable long-term growth. The Company is well capitalized to
make targeted investments in our logistics and technology platform,
to deliver synergy and return to run-rate adjusted EBITDA
profitability from the second half of our fiscal year 2023.”
Q3 FY22 Business Highlights / Commentary
- Business Update
- SSU’s reach meaningfully increased thanks to WiggleCRC and
Tennis Express acquisitions, leading to reported double-digit
revenue growth
- Stronger effect of demand headwinds and lingering supply
constraints on bike business vs. tennis business
- Heightened promotional activity to drive categories and manage
temporary overstock resulting from softening consumer
sentiment
- Adapting to inflationary pressures with a sharp focus on
customer unit economics and increased emphasis on margin-accretive
initiatives
- Numerous Q3 FY22 wins including launch of integrated Hockenheim
logistics facility serving our customers at lower cost strategic
partnerships with the ITA (Intercollegiate Tennis Association) and
the PTR (Professional Tennis Registry) and on-site presence at the
US Open at US tennis business level, successful retail media sales
MVP on online bike shops and several awards to our latest owned
brand Nukeproof and Vitus bikes
- Key Performance Indicators
- +42% YoY growth to 7.0 million active customers, led by recent
acquisitions and targeted marketing spend to drive conversion.
Legacy SSU +5% active customer growth despite consumer sentiment
headwinds
- Meaningful increase in scale with +16% YoY traffic growth on a
reported basis, thanks to recently closed acquisitions, despite
decline in pro forma organic traffic due to weakening consumer
sentiment, supply constraints and lapping Covid-19 driven
spikes
- Strong +29% reported YoY increase to 2.6 million net orders due
to recent acquisitions. Decline in net orders on a pro forma basis
YoY driven by the traffic decrease in the current challenging
environment
- Net AOV declined by -4% on a reported basis to €100.8, as
higher-priced item availability was still limited due to lingering
supply chain constraints
- Pro forma growth vs. pre-Covid (Q3 FY19) of conversion (+99
bps), net orders (+11%) and active customers (+27%), despite lower
traffic due to Brexit impact on WCRC (-25%) and stable net AOV
- Financial Update
- +29% net revenue growth to €324 million in Q3 FY22 and +29% to
€806 million in 9M FY22 on a reported basis. The challenging
macroeconomic environment combined with prolonged supply chain
constraints weighed on the pro forma performance, with net revenue
at -14% YoY in Q3 FY22 and -12% YoY in 9M FY22. The positive impact
of multiple long-term megatrends supported net revenue pro forma
growth vs. pre-Covid, at +16% vs. Q3 FY19 and +27% vs. 9M FY19
- Gross margin was down -524bps YoY to 35.5% in Q3 FY22 and down
-304bps to 36.2% in 9M FY22, as heightened promotional activity was
required to drive consumer demand and manage inventory
overstock
- Adj. EBITDA reached (€13) million with Adj. EBITDA margin at
(4.1%) in Q3 FY22, due to lower gross profit and inflationary
pressures across cost lines in the current environment
- Net loss at (€52) million in Q3 FY22 and (€254) million in 9M
FY22, 9M FY22 largely due to one-off accounting charges related to
the public listing
Outlook & Guidance
In light of the sudden deterioration of consumer demand over Q3
FY22 and lingering supply chain constraints during that quarter,
the Company updates its guidance for FY22 and now anticipates:
- Net revenue at €1,150 million to €1,200 million1
- Adjusted EBITDA margin at (4.0%) to (5.5%) 1
1 Current scope (scope without any incremental material
acquisitions).
The revision is primarily driven by the unexpected drop in
consumer sentiment as evidenced by the EU Consumer Confidence
index, as discretionary spending decreased abruptly along with
rising inflation and geopolitical tensions in core markets. Coupled
with lingering supply chain constraints in full bikes and
especially e-bikes, this results in heightened promotional activity
to drive categories and manage inventory overstock, impacting gross
margin. Additionally, inflationary pressures impact all cost lines,
as profitability is now anticipated to be in a negative range in
fiscal year 2022.
The Company expects the current challenges to fade as wage
growth overtakes inflation in the medium-term, absent any exogenous
events (e.g. further lockdowns or escalation of geopolitical
situation). SSU will take a focused approach to customer unit
economics and prioritize margin-accretive initiatives, the benefits
of which are expected to start accruing over 2023.
The Company is confident that its focused approach to unit
economics, targeted investments and disciplined strategy execution
will enable it to emerge stronger from the current market
environment and be well-positioned to take advantage of market
share opportunities. SSU expects double-digit organic top line
growth to return as soon as current supply and demand constraints
normalize and is poised to drive significant value on its long-term
profitable growth trajectory, supported by the strong global
megatrends of health and fitness, e-mobility and e-commerce.
Conference Call Information
SSU’s management will host a conference call today at 8:30 a.m.
Eastern Time to discuss the results. Interested parties will be
able to access the conference call by dialing 1-855-9796-654 (in
the United States) or +1-646-664-1960 (outside of the United
States), along with access code 837143. The conference call will be
simulcast and archived on SSU’s website at
https://investor.signa-sportsunited.com/.
Non-IFRS Financial Measures
The press release includes certain non-IFRS financial measures
(including on a forward-looking basis). These non-IFRS measures are
an addition, and not a substitute for or superior to, measures of
financial performance prepared in accordance with IFRS and should
not be considered as an alternative to net income, operating income
or any other performance measures derived in accordance with IFRS.
SSU believes that these non-IFRS measures of financial results
(including on a forward-looking basis) provide useful supplemental
information to investors about SSU. SSU’s management uses
forward-looking non-IFRS measures to evaluate SSU’s projected
financials and operating performance. However, there are a number
of limitations related to the use of these non-IFRS measures and
their nearest IFRS equivalents, including that they exclude
significant expenses that are required by IFRS to be recorded in
SSU’s financial measures. In addition, other companies may
calculate non-IFRS measures differently, or may use other measures
to calculate their financial performance, and therefore, SSU’s
non-IFRS measures may not be directly comparable to similarly
titled measures of other companies. Additionally, to the extent
that forward looking non-IFRS financial measures are provided, they
are presented on a non-IFRS basis without reconciliations of such
forward-looking non-IFRS measures due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations.
Forward-Looking Statements
These forward-looking statements include, but are not limited
to, statements regarding the Company’s intent, belief or current
expectations; future events; the estimated or anticipated future
results and revenues of the Company; future opportunities for the
Company; future planned products and services; business strategy
and plans; objectives of management for future operations of the
Company; market size and growth opportunities; competitive
position, technological and market trends; and other statements
that are not historical facts. Forward-looking statements generally
are accompanied by words such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,”
“could,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook,” “suggests,” “targets,” “projects,” “forecast”
and similar expressions that predict or indicate future events or
trends or that are not statements of historical matters.
These forward-looking statements are based on the current
expectations, beliefs and assumptions of the Company’s management
and on information currently available to management and are not
predictions of actual performance or further results.
Forward-looking statements are subject to risks and uncertainties,
and actual results may differ materially from those expressed or
implied in the forward-looking statements due to various factors,
including, but not limited to, the following, as well as the risk
factors identified in the Company’s Securities and Exchange
Commission filings: our future operating or financial results; our
expectations relating to dividend payments and forecasts of our
ability to make such payments; our future acquisitions, business
strategy and expected capital spending; our assumptions regarding
interest rates and inflation; business disruptions arising from the
coronavirus outbreak; our financial condition and liquidity,
including our ability to obtain additional financing in the future
to fund capital expenditures, acquisitions and other general
corporate activities; estimated future capital expenditures needed
to preserve our capital base; our ability to effect future
acquisitions and to meet target returns; changes in general
economic conditions in the Federal Republic of Germany, including
changes in the unemployment rate, the level of consumer prices,
wage levels, etc.; the further development of online sports
markets, in particular the levels of acceptance of internet
retailing; our behavior on mobile devices and our ability to
attract mobile internet traffic and convert such traffic into
purchases of our goods; our ability to offer our customers an
inspirational and attractive online purchasing experience;
demographic changes, in particular with respect to the Federal
Republic of Germany; changes affecting interest rate levels;
changes in our competitive environment and in our competition
level; changes affecting currency exchange rates; the occurrence of
accidents, terrorist attacks, natural disasters, fire,
environmental damage, or systemic delivery failures; our inability
to attract and retain qualified personnel; political changes; and
changes in laws and regulations.
Forward-looking statements speak only as of the date they are
made, and the Company assumes no duty to and does not undertake to
update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and
future results could differ materially from historical
performance.
Reconciliations (in EUR millions)
Q3 Q3 9M 9M FY21
FY22 FY21 FY22 Net Loss
(€12.9)
(€52.5)
(€24.9)
(€254.1)
Income Tax Benefit
3.0
(6.6)
4.6
(14.6)
Earnings before tax (EBT)
(€10.0)
(€59.0)
(€20.3)
(€268.7)
Share of results of associates
0.3
0.3
0.9
0.9
Finance income
(0.1)
(3.6)
(0.1)
(19.5)
Finance costs
4.8
12.3
8.6
16.0
Depreciation and amortization
7.6
16.6
22.4
38.9
Total EBITDA Adjustments
10.9
20.4
15.3
190.6
Transaction related charges
0.4
0.8
0.4
1.5
Reorganization and restructuring costs
0.6
4.7
1.7
131.7
Consulting fees
10.0
8.1
13.2
39.5
Share-based compensation
–
6.6
–
15.9
Other material one-time items
(0.1)
0.1
(0.0)
2.0
Adj. EBITDA
€13.4
(€13.1)
€26.8
(€41.8)
Liquidity
SIGNA Sports United N.V. (the “Company”) and SIGNA Holding GmbH
(“SIGNA Holding”), an affiliate of the Company’s largest
shareholder SIGNA International Sports Holding GmbH (“SISH”) have
entered into commitments to provide the Company €150 million of
capital in accordance with the requirements under the amendment to
the revolving credit facility agreement (the “RCF”) between the
Company’s subsidiary SIGNA Sports United GmbH (“SSU GmbH”) and its
lenders.
As disclosed on May 31, 2022, the Company anticipates the €100
million equity contribution to be funded pursuant to the RCF at the
latest by the end of its fiscal year 2022 via a capital increase or
other form of capital raising. On August 15, 2022 the Company has
signed a binding term sheet with SIGNA Holding pursuant to which
the Company will issue to SIGNA Holding GmbH, on or around
September 27, 2022, E+4.00% senior convertible unsecured notes in
an aggregate principal amount of €100 million due in 2028 with a
conversion price of $10 per share, thereby satisfying the
requirements under the RCF. The convertible notes will in addition
carry a payment in kind coupon of 7.00% to be accrued annually. The
conversion price represents a conversion premium of 65.6% over the
Company’s stock sale price of $6.04 per share on the New York Stock
Exchange NYSE as of August 12, 2022 market close. The Company will
also grant an upsize option in an amount of up to €200 million to
SIGNA Holding GmbH under the convertible notes.
In addition, on July 25, 2022, the Company entered into a second
€50 million revolving credit facility agreement with SIGNA Holding.
This facility is intended to meet SIGNA Holding’s obligation to
provide SSU GmbH with an additional amount of up to €50 million at
the latest during the Company’s fiscal year 2023 in accordance with
the terms of the revolving credit facility amendment, as disclosed
on May 31, 2022. The revolving credit facility will be utilized to
fund working capital needs, capital expenditures and general
corporate purposes.
The Company is confident the €150 million of liquidity
commitments will be sufficient to fund its current organic growth
plans through to the end of fiscal year 2023, with the additional
€200 million supporting its inorganic growth plans in the
medium-term, should the option be exercised.
Definitions
Net Online Revenue: Online revenue (excluding sales partners)
equal to net orders (post cancellations and full returns)
multiplied by Net AOV.
Platform Revenue: Revenue derived from non-1P E-commerce
business models (i.e., retail media sales, marketplace).
Gross Profit: Net revenues less cost of materials adjusted for
extraordinary write-offs.
Adjusted EBITDA: Calculated as consolidated net income (loss)
before interest, taxes, depreciation and amortization adjusted for
certain items which SSU’s management believes do not reflect the
core operating performance of the operating segments of SSU.
Adjustments include material one-time items, share based
compensation, consulting fees, restructuring costs, transaction
related charges and other expenses.
Active Customers: Customers with one or more purchases within
the last 12 months, irrespective of cancellations or returns.
Total Visits: Number of visits including mobile and website.
Cut-off at 30 minutes of inactivity and at date change. Not cut off
at channel change during session.
Net Orders: Orders post cancellations and full returns.
Net AOV: Total online revenue (excluding sales partners) divided
by net orders (post cancellations and full returns).
About SIGNA Sports United:
SIGNA Sports United is a NYSE listed specialist online sports
retail company based in Berlin. We own companies and brands in
various sports including bike, tennis, outdoor and team sports. We
sell equipment and apparel via our 100 own online stores,
collaborate with 500+ independent brick and mortar shops, and
partner with over 1000 sports brands. Together we serve 7+ million
customers around the world.
SIGNA Sports United companies and brands include Wiggle, Chain
Reaction Cycles, Fahrrad.de, Bikester, Probikeshop, CAMPZ,
Addnature, Tennis-Point, TennisPro, and OUTFITTER.
Further information: www.signa-sportsunited.com.
Unaudited interim condensed
consolidated statements of operations (in EUR millions)
Q3 Q3 YoY FY21 FY22
Growth Net Revenue
€250.9
€324.2
29.2%
Own Work Capitalized
0.6
1.6
NM
Other Operating Income
0.7
1.9
NM
Cost of Materials
(148.6)
(209.1)
40.7%
Personnel Expense
(25.7)
(40.6)
57.8%
Other Operating Expenses
(64.4)
(91.3)
41.8%
EBITDA Adjustments
(10.9)
(20.4)
87.7%
Depreciation & Amortization
(7.6)
(16.6)
NM
Operating Loss
(€5.0)
(€50.1)
NM
Share of results of associates
(0.3)
(0.3)
(16.0%)
Finance income
0.1
3.6
NM
Finance costs
(4.8)
(12.3)
NM
Pre-Tax Income
(€10.0)
(€59.0)
NM
Income Taxes
(3.0)
6.6
NM
Net Income
(€12.9)
(€52.5)
NM
Unaudited interim condensed
consolidated statements of financial position (in EUR
millions)
Q4 Q3 FY21 FY22
Non-current assets Intangible assets
€326.8
€929.0
Property, plant and equipment
98.4
133.1
Equity accounted investees
0.0
0.0
Other non-current financial assets
1.4
5.2
Deferred taxes
(0.0)
–
Current assets Inventories
181.9
336.5
Trade receivables
26.3
23.3
Income tax receivables
2.0
0.3
Other current financial assets
24.0
18.9
Other current assets
31.4
38.5
Cash and cash equivalents
50.7
55.2
Total assets
€742.9
€1,540.1
Owners net investment
373.4
928.8
Equity attributable to non-controlling interests
–
–
Total equity
€373.4
€928.8
Non-current provisions
0.1
4.6
Non-current financial liabilities
140.4
242.3
Non-current trade payables
–
–
Other non-current liabilities
1.0
6.5
Deferred taxes
40.2
51.2
Current liabilities Current income tax liabilities
1.7
1.1
Current provisions
4.9
2.8
Trade payables
102.7
178.4
Other current financial liabilities
27.7
41.2
Other current liabilities
46.2
75.6
Contract liabilities
4.7
7.6
Total liabilities
€369.5
€611.2
Total equity and liabilities
€742.9
€1,540.1
Unaudited interim condensed
consolidated statements of cash flows (in EUR millions)
9M YTD 9M YTD FY21 FY22
NET CASH FLOW FROM OPERATING ACTIVITIES Earnings before
taxes
(€20.3)
(€268.7)
Adjustments to reconcile earnings before taxes to net cash from
operating activities: Depreciation and amortization
22.4
38.9
(Income) loss from investments accouted for using the equity method
0.9
0.9
Net finance costs (income)
8.5
(3.5)
Other non-cash income and expenses
0.1
12.2
Listing expenses (IFRS 2 service charge)
–
121.9
Change in other non-current assets
(0.2)
1.2
Change in other non-current liabilities
0.6
8.2
Change in: Inventories
(30.3)
(67.6)
Trade receivables
(5.3)
5.3
Other current financial assets
(7.2)
2.5
Other current assets
(9.0)
3.9
Current provisions
(1.4)
(2.1)
Trade payables
19.8
13.3
Other current financial liabilities
6.2
1.2
Other current liabilities
3.2
(43.7)
Contract liabilities
(0.1)
1.2
Income tax payment
(0.2)
–
Net cash flow from operating activities
(€12.4)
(€174.9)
NET CASH FLOW FROM INVESTING ACTIVITIES Purchase of
intangible assets and property, plant and equipment
(14.3)
(26.7)
Acquisition of subsidiaries, net of cash acquired
(7.5)
(185.5)
Net cash flow from investing activities
(€21.8)
(€212.2)
NET CASH FLOW FROM FINANCING ACTIVITIES Proceeds from
capital contributions
–
402.7
Repayments of financial liabilities to related parties
(1.3)
–
Proceeds from financial liabilities to related parties
55.0
40.0
Proceeds from financial liabilities to financial institutions
–
26.9
Repayment of financial liabilities to financial institutions
(38.0)
(77.9)
Transaction costs related to the listing
–
(10.3)
Proceeds from the recapitalization
–
23.6
Acquisition of NCI
(4.7)
–
Repayment of other loans
–
(0.7)
Payments for lease liabilities
(7.6)
(10.3)
Interest paid
(4.2)
(2.8)
Net cash flow from financing activities
(€0.9)
€391.3
Effect of exchange rate changes on cash and cash equivalents
–
0.3
Net increase (decrease) in cash and cash equivalents
(€35.2)
€4.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220816005296/en/
SSU Press Contact Justine Powell
j.powell@signa-sportsunited.com +49 1523 464 9843 SSU Investors
Contact Alima Levy a.levy@signa-sportsunited.com +49 174 730
4938
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