SIGNA Sports United Reports Q3 FY22 Results
In Q3 FY22, SIGNA Sports United (SSU) reported a 29% year-over-year (YoY) increase in net revenue, reaching €324 million. This growth was bolstered by the acquisitions of WiggleCRC and Tennis Express, which contributed to a 42% growth in active customers to 7 million. However, the company faced challenges with a net loss of €52 million and declining gross margins due to inflationary pressures. The adjusted EBITDA was (€13 million). SSU secured a €150 million financing commitment to fund future growth and anticipates double-digit organic growth returning once supply constraints ease.
- 29% YoY increase in net revenue to €324 million.
- 42% growth in active customers to 7 million.
- Secured €150 million financing commitment for growth.
- Net loss of €52 million in Q3 FY22.
- Gross margin decreased by 524bps YoY to 35.5%.
- Adjusted EBITDA down to (€13 million).
Q3 FY22 net revenue of
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
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 +
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 |
|
|
|
|
|
|
|||
| Gross Profit |
|
|
|
|
|
|
|||
| % Margin |
|
|
(524)bps |
|
|
(304)bps | |||
| Adj. EBITDA |
|
( |
NM |
|
( |
NM |
|||
| % Margin |
|
( |
NM |
|
( |
NM |
|||
| Net Income |
( |
( |
NM |
( |
( |
NM |
|||
| Operating Performance | |||||||||
| LTM Active Customers | 5.0 |
7.0 |
|
5.0 |
7.0 |
|
|||
| Total Visits | 72.5 |
84.0 |
|
198.9 |
247.5 |
|
|||
2.0 |
2.6 |
|
4.9 |
7.2 |
|
||||
| Net AOV |
|
|
( |
|
|
( |
Note: Financials inclusive of Tennis Express from
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 theUS 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 to36.2% 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 million 1 -
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
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
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 |
( |
( |
( |
( |
||
| Income Tax Benefit | 3.0 |
(6.6) |
4.6 |
(14.6) |
||
| Earnings before tax (EBT) |
( |
( |
( |
( |
||
| 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 |
|
( |
|
( |
||
Liquidity
As disclosed on
In addition, on
The Company is confident the
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 AOV: Total online revenue (excluding sales partners) divided by net orders (post cancellations and full returns).
About
Further information: www.signa-sportsunited.com.
Unaudited interim condensed consolidated statements of operations
|
||||
| Q3 | Q3 | YoY | ||
| FY21 | FY22 | Growth | ||
| Net Revenue |
|
|
|
|
| Own Work Capitalized | 0.6 |
1.6 |
NM |
|
| Other Operating Income | 0.7 |
1.9 |
NM |
|
| Cost of Materials | (148.6) |
(209.1) |
|
|
| Personnel Expense | (25.7) |
(40.6) |
|
|
| Other Operating Expenses | (64.4) |
(91.3) |
|
|
| EBITDA Adjustments | (10.9) |
(20.4) |
|
|
| Depreciation & Amortization | (7.6) |
(16.6) |
NM |
|
| Operating Loss |
( |
( |
NM |
|
| Share of results of associates | (0.3) |
(0.3) |
( |
|
| Finance income | 0.1 |
3.6 |
NM |
|
| Finance costs | (4.8) |
(12.3) |
NM |
|
| Pre-Tax Income |
( |
( |
NM |
|
| Income Taxes | (3.0) |
6.6 |
NM |
|
| Net Income |
( |
( |
NM |
|
Unaudited interim condensed consolidated statements of financial position
|
|||
| Q4 | Q3 | ||
| FY21 | FY22 | ||
| Non-current assets | |||
| Intangible assets |
|
|
|
| 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 |
|
|
|
| Owners net investment | 373.4 |
928.8 |
|
| Equity attributable to non-controlling interests | – |
– |
|
| Total equity |
|
|
|
| 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 |
|
|
|
| Total equity and liabilities |
|
|
|
Unaudited interim condensed consolidated statements of cash flows
|
||
| 9M YTD | 9M YTD | |
| FY21 | FY22 | |
| NET CASH FLOW FROM OPERATING ACTIVITIES | ||
| Earnings before taxes |
( |
( |
| 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 |
( |
( |
| 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 |
( |
( |
| 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 |
( |
|
| Effect of exchange rate changes on cash and cash equivalents | – |
0.3 |
| Net increase (decrease) in cash and cash equivalents |
( |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220816005296/en/
SSU Press Contact
j.powell@signa-sportsunited.com
+49 1523 464 9843
SSU Investors Contact
a.levy@signa-sportsunited.com
+49 174 730 4938
Source:
FAQ
What were SSU's Q3 FY22 net revenue figures?
How many active customers did SSU have in Q3 FY22?
What was the net loss for SSU in Q3 FY22?
What is the adjusted EBITDA for SSU in Q3 FY22?
What financing commitment did SSU secure recently?
