DOUGLAS Group plans Initial Public Offering (IPO) on Frankfurt Stock Exchange

Intention to Float (ITF)

DOUGLAS Group plans Initial Public Offering (IPO) on Frankfurt Stock Exchange

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• DOUGLAS Group, Europe’s number one omnichannel premium beauty destination, plans a public listing on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange
• IPO would accelerate the debt reduction and decrease the interest expenses of the company, thus enlarging the financial flexibility of the DOUGLAS Group and its further value creation
• Sander van der Laan, CEO DOUGLAS Group: “The DOUGLAS Group is ideally positioned to further capitalize on the large and resilient European premium beauty market. Our IPO is the logical next step for us to further deploy our ´Let it Bloom – DOUGLAS 2026´ strategy and leverage our full potential.”
• Dr Henning Kreke, Chairman of the Supervisory Board of DOUGLAS Group: “We are very proud of the development of the DOUGLAS Group offering strong potential for the founding family to remain a committed investor.”
• Dr Daniel Pindur, Managing Partner at CVC Capital Partners: “The DOUGLAS Group has embarked on a successful growth path and is now ready to take the next step as a publicly listed company.”
• DOUGLAS Group is well positioned in the structurally growing and resilient European premium beauty market that is expected to grow by ca. 5.4% (CAGR) to 24.2 billion euro by 2028
• With its full year 2022/23 and Q1 2023/24 results, DOUGLAS Group demonstrated that it is on track to achieve its mid-term target to grow group sales (net) at a CAGR of around 7% and achieve an adjusted EBITDA Margin of around 18.5%[1]
• Proceeds from the newly issued shares as well as an equity injection from the existing shareholders CVC Capital Partners and Kreke family will be used to significantly deleverage the Group’s balance sheet; offering could be completed in the first quarter of 2024, subject to capital market conditions

Düsseldorf, 4 March 2024 – The DOUGLAS Group, Europe’s number one omnichannel premium beauty destination[2], plans a stock market listing. Together with its shareholder Kirk Beauty International S.A., a holding company majority-owned by funds advised by global private equity firm CVC Capital Partners as well as the Kreke family, DOUGLAS is preparing for an initial public offering (IPO) on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange. The IPO and listing of DOUGLAS AG could be completed in the first quarter of 2024, subject to capital market conditions. The offering would comprise a public offering to individual and institutional investors in Germany as well as international private placements.

The company targets an equity contribution of around 1.1 billion euro, consisting of the targeted IPO primary proceeds and an additional equity injection of around 300 million euro from the current shareholders. The proceeds are expected to be used to continue deleveraging the DOUGLAS Group’s balance sheet. The remaining debt position is expected to be refinanced at better terms in connection with the IPO. The IPO would accelerate the debt reduction and decrease the interest expenses of the company, thus enlarging the financial flexibility of the DOUGLAS Group and its further value creation.

Following the completion of the IPO, CVC Capital Partners will continue to hold an indirect majority interest in DOUGLAS Group. The Kreke family will also remain an indirect shareholder of DOUGLAS Group. These two existing indirect shareholders will not sell any shares at the IPO. The final offer structure and terms of the IPO will be determined prior to the publication of the offering prospectus and the start of bookbuilding.

Sander van der Laan, CEO DOUGLAS Group, said: “With our strong performing omnichannel business model we cater to customers in our stores and E-Com business and have successfully set the course for long-term future growth with our strategy ‘Let it Bloom – DOUGLAS 2026’. Our IPO is the logical next step for us to leverage our full potential in the future as a publicly listed company. Driven by our highly motivated team, DOUGLAS Group is ideally positioned to further capitalize on the large, resilient and growing European premium beauty market, where our customers are attracted by our comprehensive beauty offering and value our broad and distinctive range of brands.”

Dr Henning Kreke, Chairman of the Supervisory Board of DOUGLAS Group, said: “We are very proud of the development of DOUGLAS Group in recent years – the group has successfully transformed into the number one omnichannel premium beauty destination in Europe. Our family sees itself as a passionate and committed shareholder and looks forward to continuing to accompany the DOUGLAS Group on its journey in the future.”

Dr Daniel Pindur, Managing Partner at CVC Capital Partners, said: “DOUGLAS Group has embarked on a successful growth path and is now ready to take the next step as a publicly listed company. We are very proud to have partnered with the Kreke family and to have backed the company over the recent years. We will remain a major shareholder as we see further growth potential for the DOUGLAS Group in the European premium beauty market.”

Number one omnichannel premium beauty destination in Europe

Headquartered in Düsseldorf, Germany, the DOUGLAS Group today is focused on the European market with omnichannel operations in 22 countries and around 18,000 employees. The DOUGLAS Group is the number one omnichannel premium beauty destination in Europe, with the number 1 leadership position in both stores and E-Com business.

The DOUGLAS Group offers a unique assortment of the most relevant and distinctive range of selective, exclusive, and corporate brands as well as a differentiating Partner Program and beauty services. As the European market leader, DOUGLAS Group is the partner of choice for premium beauty brands, with more than 250 exclusive brands[3].

With the DOUGLAS Beauty Card program, the company operates the largest loyalty program among selected beauty specialist peers, with around 57 million members as of December 31, 2023. The program generates unique data insights, drives growth, and enables efficient customer activation.

Strong position in growing and resilient European market

The DOUGLAS Group is well positioned in the structurally growing and resilient European premium beauty market that is expected to grow by ca. 5.4% compound annual growth rate (CAGR) to 24.2 billion euro by 2028[4].

The overall market and the premium segment offer attractive margin economics for retailers, both offline and online.

Omnichannel strategy ‘Let it Bloom – DOUGLAS 2026’ as basis for growth

With ‘Let it Bloom – DOUGLAS 2026’, the DOUGLAS Group has a clear omnichannel strategy in place to grow by putting customers at the center of all activities. As omnichannel customers spend over two times more than customers who only shop online or in-store[5], this is the core of the DOUGLAS Group’s winning and profitable business model.

‘Let it Bloom – DOUGLAS 2026’ lays the foundation for the DOUGLAS Group to grow sales (net), profits, and cash flow generation. The strategy rests on four pillars: The DOUGLAS Group aims at being the number one leading premium beauty destination in all its markets, wants to offer the most relevant and distinctive range of brands, wants to offer the most customer-friendly omnichannel ecosystem, and is building a focused and efficient operating model.

The omnichannel strategy includes both refurbishing of stores and expanding of the store network as well as further advancing, extending, and accelerating the E-Com activities in order to tap the vast potential of the market. ESG plays a key role in the future of the DOUGLAS Group: The company has the ambition to be a leading premium beauty retailer in sustainability and has recently presented an updated sustainability strategy, for example by committing to 80% of its corporate brands to be vegan and 100% of their packaging to be recyclable, recycled, or reusable by 2030.

Highly attractive financial profile with strong, profitable growth and robust cash generation

The DOUGLAS Group continued its profitable growth trajectory in the first quarter of its financial year 2023/24. Group sales (net) increased by 8.0% to 1.56 billion euro in the important period from October to December 2023 (Q1 2022/23: 1.44 billion euro). Growth was driven by strong results of both channels: Store sales (net) increased by 6.7% (like-for-like, “lfl”: +6.0%) while E-Com sales (net) grew 10.7% year-on-year (lfl: +10.7%), both thus continuing the positive trend from previous quarters. All segments contributed positively to overall growth for sales (net) and earnings. DOUGLAS Group completed its financial year 2022/23 with record results: with sales (net) of 4.1 billion euro between 1 October 2022 and 30 September 2023, DOUGLAS Group surpassed the threshold of 4 billion euro in sales (net) for the first time and grew by 11.3% compared to the previous financial year.

The DOUGLAS Group also further increased its profitability and generated an adj. EBITDA of 348.3 million euro in the first quarter 2023/24 (Q1 2022/23: 309.4 million euro), an improvement of 12.6%. The corresponding adj. EBITDA margin was 22.4%, another step up compared to the 21.5% of the previous year’s first quarter. Net income in the first quarter 2023/24 improved by 10.6% to 125.2 million euro (Q1 2022/23: 113.2 million euro). Free cash flow increased to 459.4 million euro.

In the mid-term, the DOUGLAS Group has the ambition to grow group sales (net) at a CAGR of around 7%. The DOUGLAS Group also aims to achieve an adj. EBITDA margin of around 18.5%, with typical fluctuations year-over-year.

Strong deleveraging and full refinancing

Following completion of the IPO, the DOUGLAS Group targets a net leverage[6] ratio of approximately 2.7x[7], and intends to fully refinance its remaining financial liabilities under its existing financing agreements with an early redemption of its Senior Secured Notes and its Senior PIK Notes. In the mid-term, the DOUGLAS Group targets a net leverage ratio of around 2.0x. The DOUGLAS Group intends to pay dividends of up to 40% once the net leverage ratio is significantly reduced close to the targeted mid-term net leverage ratio.

Citigroup and Goldman Sachs are acting as Joint Process Banks in connection with the planned transaction. Deutsche Bank, UBS, and UniCredit, together with the Joint Process Banks, are acting as Joint Global Coordinators and Joint Bookrunners. BNP Paribas, CVC Capital Markets and Jefferies have also been appointed as Joint Bookrunners. Intesa, LBBW and RBI will act as additional Co-Managers.

Further information will be available in the IR section of the DOUGLAS Group website.

About the DOUGLAS Group

The DOUGLAS Group, with its commercial brands DOUGLAS, NOCIBÉ, Parfumdreams and Niche Beauty, is the number one omnichannel premium beauty destination in Europe. The DOUGLAS Group is inspiring customers to live their own kind of beauty by offering a unique assortment online and in around 1,850 stores. With unparalleled size and access to customers, the DOUGLAS Group is the partner of choice for brands and offers a premium range of selective and exclusive brands as well as own corporate brands. The assortment includes fragrances, color cosmetics, skin care, hair care, accessories as well as beauty services. Strengthening its successful omnichannel positioning while consistently developing superior customer experience is at the heart of the DOUGLAS Group strategy “Let it Bloom – DOUGLAS 2026”. The winning business model is underpinned by the Group’s omnichannel proposition, leading brands, and data capabilities. In the financial year 2022/23, the DOUGLAS Group generated sales (net) of 4.1 billion euros and employed around 18,000 people across Europe.

For more information visit the DOUGLAS Group website.

About CVC

CVC is a leading private equity and investment advisory firm with a network of 29 offices throughout EMEA, the Americas and Asia, with approximately €188 billion of assets under management. CVC has seven complementary strategies across private equity, secondaries and credit, for which we have secured commitments in excess of €230 billion from some of the world's leading institutional investors across its private equity, credit and secondaries strategies. Funds managed or advised by CVC are invested in over 125 companies worldwide, which have combined annual sales of approximately €166 billion and employ more than 590,000 people.

Investor Relations Contact DOUGLAS Group

Stefanie Steiner
Director Investor Relations and M&A
Phone: +49 211 16847 8594
E-Mail: ir@douglas.de

Press Contact DOUGLAS Group

Peter Wübben
SVP Group Communications & Sustainability
Phone: +49 211 16847 664
E-Mail: pr@douglas.de

Press Contact CVC

Janna Creuzberg
Phone: +49 69 921 874 632
E-Mail: cvcgermany@fgsglobal.com

Important Notice

This announcement is an advertisement for the purposes of the prospectus regulation EU 2017/1129, as amended (“Prospectus Regulation”). It does not constitute an offer to purchase any shares in DOUGLAS AG and does not replace the securities prospectus which will be available free of charge, together with the relevant translation(s) of the summary, in the IR section of the DOUGLAS Group website. The approval of the securities prospectus by the German Federal Financial Supervisory Authority (“BaFin”) should not be understood as an endorsement of the investment in any shares in DOUGLAS AG. Investors should purchase shares solely on the basis of the prospectus (including any supplements thereto, if any) relating to the shares and should read the prospectus which is yet to be published (including any supplements thereto, if any) before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the shares. Investment in shares entails numerous risks, including a total loss of the initial investment.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in the United States, Australia, Canada, South Africa, Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

Neither this announcement nor the publication in which it is contained is for publication or distribution, directly or indirectly, in whole or in part, in or into the United States of America, including its territories and possessions, any state of the United States and the District of Columbia (the “United States”). The information in this announcement does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares in DOUGLAS AG in any jurisdiction. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction of the United States, and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or otherwise transferred, directly or indirectly, in or into the United States absent such registration, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act, in each case in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the securities in the United States.

Subject to certain exceptions under applicable law, the securities referred to herein may not be offered or sold in Australia, Canada, South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa or Japan. There will be no public offer of the securities in Australia, Canada, South Africa or Japan.

In member states of the European Economic Area (other than Germany), this announcement is only addressed to and directed at persons who are “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation.

In the United Kingdom, this announcement is only addressed to and directed at persons who are “qualified investors” within the meaning of Article 2 of the Prospectus Regulation (Regulation (EU) 2017/1129 and amendments thereto) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 and who (i) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) are high net worth entities falling within article 49(2)(a) to (d) of the Order (all such persons being referred to as “relevant persons”). In the United Kingdom, this announcement is directed only at relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons and it should not be relied on by anyone other than a relevant person.

This announcement does not purport to contain all information required to evaluate the Company and/or its financial position and, in particular, is subject to amendment, revision, verification, correction, completion and updating in its entirety. None of (i) DOUGLAS AG, Kirk Beauty International S.A. (the “Selling Shareholder”), Citigroup Global Markets Europe AG, Goldman Sachs Bank Europe SE, Deutsche Bank Aktiengesellschaft, UBS AG London Branch, UniCredit Bank GmbH, BNP PARIBAS, Jefferies GmbH, CVC Capital Markets S.à r.l., Intesa Sanpaolo S.p.A., Landesbank Baden-Württemberg, and Raiffeisen Bank International AG (together the “Banks”,) and together with DOUGLAS AG and the Selling Shareholder, the “Persons”), or any of the respective directors, officers, personally liable partners, employees, agents, affiliates, shareholders or advisers of such Persons may notify you of changes nor is under an obligation to update or keep current the announcement or to provide the recipient thereof with access to any additional information that may arise in connection with it, save for the making of such disclosures as are required by mandatory provisions of law. This announcement does not constitute investment, legal, accounting, regulatory, taxation or other advice.

No person is authorized to give any information or to make any representation not contained in and not consistent with the announcement and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of DOUGLAS AG or any Person.

Certain market positioning data about DOUGLAS AG included in this announcement is sourced from or based on third-party sources. Third-party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the fairness, quality, accuracy, relevance, completeness or sufficiency of such data. Such research, estimates and forecasts, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, DOUGLAS AG expressly disclaims any responsibility for, or liability in respect of, such information and undue reliance should not be placed on such data. 

This announcement may contain forward-looking statements which reflect DOUGLAS AG’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or developments and the actual outcome could differ materially from the forward-looking statements. Each of the Banks and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

The financial information for the three-month period ended December 31, 2023 contained in this announcement is, as of the date of publication, preliminary in nature. Accordingly, such information presented herein is subject to change.

The information contained in this announcement does not purport to be comprehensive and has not been subject to any independent audit or review. This announcement contains certain supplemental or alternative measures of operating and financial performance that are not calculated in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS”) or the German Commercial Code (Handelsgesetzbuch) and German generally accepted accounting principles, and which would be considered non-IFRS/non-GAAP financial measures. These non-IFRS/non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies nor should they be construed as an alternative to other financial measures that are computed in accordance with IFRS or other generally accepted accounting principles. There are material limitations associated with the use of such measures. You are cautioned not to place undue reliance on any non-IFRS/non-GAAP financial measures and ratios included herein.

Certain figures, including financial and market data, contained in this announcement have been rounded and the relevant sums may not add up to 100% due to rounding.

The Banks are acting exclusively for DOUGLAS AG and the Selling Shareholder and no-one else in connection with the planned offering of shares of DOUGLAS AG (the “Offering”). They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than DOUGLAS AG and the Selling Shareholder for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offering, the Banks and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase securities of DOUGLAS AG and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities and other securities of DOUGLAS AG or related investments in connection with the Offering or otherwise. Accordingly, references in the prospectus, once published, to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by the Banks and any of their affiliates acting as investors for their own accounts.

In addition, certain of the Banks or their respective affiliates may enter into financing arrangements and swaps with investors in connection with which such Banks (or their affiliates) may from time to time acquire, hold or dispose of DOUGLAS AG’s shares. The Banks do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Banks or any of their respective affiliates, directors, officers, personally liable partners, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to DOUGLAS AG, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offering, Goldman Sachs Bank Europe SE, as stabilization manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot shares in DOUGLAS AG or effect other transactions with a view to supporting the market price of DOUGLAS AG’s shares at a higher level than that which might otherwise prevail in the open market. The stabilization manager is not required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of DOUGLAS AG’s shares on the Frankfurt Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the stabilization manager or any of its agents to effect stabilizing transactions and there is no assurance that stabilizing transactions will be undertaken. Such stabilizing measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilize the market price of DOUGLAS AG’s shares above the offer price. Save as required by law or regulation, neither the stabilization manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilization transactions conducted in relation to the Offering.

The information contained in this release is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this release or its accuracy, fairness or completeness.

The date of the admission to trading of shares of DOUGLAS AG on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) (together, the “Admission”) may be influenced by things such as market conditions. There is no guarantee that Admission will occur and no financial decision should be based on the intentions of DOUGLAS AG in relation to Admission at this stage. Acquiring investments to which this release relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorized person specializing in advising on such investments. This release does not constitute a recommendation concerning the Offering. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Offering for the person concerned.

^[1] With typical fluctuations year-over-year

^[2] Based on the DOUGLAS Group’s position across its five largest countries Germany, France, Italy, The Netherlands, and Poland taken together. Source: OC&C analysis (2024)

^[3] Brands exclusive in at least one geographic market as of FY22/23A

^[4] Comprising the premium segment (i.e., luxury/niche and prestige) of the European beauty market in Germany, France, Italy, Poland, The Netherlands, Spain, Romania, the Czech Republic, Hungary, Lithuania, Bulgaria, and Latvia. Source: OC&C analysis (2024)

^[5] Based on average sales (net) and annual frequency per Beauty Card Member in Germany, Spain, France, Italy, The Netherlands, and Poland in FY 2022/23

^[6] Net financial debt / LTM adjusted EBITDA

^[7] Based on DOUGLAS Group’s financial position as of 31 December 2023, assuming the IPO and refinancing of any financial indebtedness under its existing financing agreements had been completed as of that date