Groupon(US:GRPN)2020-12-08 02:56Summary of Groupon, Inc. (NASDAQ:GRPN) UBS Global TMT Conference Company Overview - Company: Groupon, Inc. (NASDAQ:GRPN) - Event: UBS Global TMT Conference - Date: December 7, 2020 - Participants: - Aaron Cooper - Interim CEO - Eric Sheridan - UBS Investment Bank Key Points and Arguments Business Context and COVID-19 Impact - Aaron Cooper began his role as Interim CEO at the end of March 2020, coinciding with the onset of COVID-19, which led to significant operational changes and cost control measures [5][4] - Groupon took swift actions to manage SG&A and streamline operations, resulting in a focus on cost reduction and operational efficiency [5][8] - The company reported strong sales in the Home and Auto business line during the pandemic, indicating resilience [7] Financial Performance and Cost Management - Groupon announced a plan to reduce costs by $225 million, which is on track [8][9] - The company expects to achieve EBITDA levels greater than 2019 as business recovers to 80% and 90% of pre-COVID levels [9][34] - The focus on a lower cost structure is intended to create operational leverage, allowing for growth without a proportional increase in expenses [34][36] Growth Strategy and Inventory Expansion - Groupon is prioritizing its growth strategy, particularly in local markets, and is reallocating resources to enhance its inventory [10][12] - The company is transitioning its Goods business to focus more on local offerings, which are seen as critical for future growth [12][13] - Groupon has successfully increased inventory by over 50%, with a significant portion coming from new Offers that do not have purchase restrictions [21][26] Customer and Merchant Engagement - The company is enhancing its customer value proposition by expanding inventory and reducing restrictions on purchases, which is expected to improve customer engagement [26][28] - New tools such as Campaign Builder and Groupon Connect have been launched to simplify the process for merchants, allowing them to manage their listings more effectively [27][28] - Sponsored listings have been introduced to provide merchants with more visibility and customer engagement opportunities [27][56] International Market Strategy - Groupon has exited markets where growth potential was limited, such as New Zealand and Japan, and is focusing on markets with the highest potential for growth [51][52] - The company aims to apply successful strategies from North America to international markets, leveraging its differentiated business model [52] Competitive Landscape - Groupon competes across various verticals, including Goods, Travel, and Local services, but differentiates itself through its unique inventory and low-risk model for merchants [54][56] - The company emphasizes its ability to drive incremental demand for merchants, which is a key competitive advantage [54] Capital Allocation and Future Outlook - Groupon's management is focused on executing its growth strategy, with a total addressable market of $1 trillion, indicating significant potential for future growth [58] - The company maintains a balanced capital allocation strategy, including investments in the business and potential M&A opportunities [58] Additional Important Insights - The pandemic has led to a shift in consumer behavior, with a focus on local experiences and services, which Groupon aims to capitalize on [44][46] - The company is optimistic about the recovery of its business and the potential for sustained customer growth in 2021 and beyond [46][48] This summary captures the essential points discussed during the conference, highlighting Groupon's strategic focus, financial performance, and market positioning amidst the challenges posed by COVID-19.