INVESTOR PRESENTATION. IC Companys: Our Ambition

Transcription

1 INVESTOR PRESENTATION IC Companys: Our Ambition FEBRUARY 2011

2 Contents Introduction Our ambition So far so good 2 2

3 One of the Top 5 Largest Fashion Companies in the North brands brands 11 Scandinavian fashion Sourcing Sourcing offices in China, Hong Kong, Bangladesh, Vietnam, India, and Romania Distribution through own retail, outlets, e-commerce, franchise and wholesale Revenue of of DKK 3.7b and 2,440 employees 498 stores and more than 10,000 wholesale selling points around the world 3 3

4 Our 11 Brands Is Mainly in the Mid-price Segment High mid-price / trend Female International high-end Revenue DKK 74m 09/10 High mid-price / trend Female International high-end Revenue DKK 196m 09/10 High mid-price / classic Male / female Sport and casual Revenue DKK 915m 09/10 Mid-price / modern Female Raw and feminine Revenue DKK 254m 09/10 Mid-price / modern Male City smart/city casual Revenue DKK 260m 09/10 Mid-price / modern Female Urban and feminine Revenue DKK 359m 09/10 High mid-price - trend Male/female Modern Scandinavian fit Revenue DKK 476m 09/10 High Low-price / modern Female Fast to market Revenue DKK 244m 09/10 High Low-price / modern Female Glamorous and luxurious Revenue DKK 87m 09/10 Mid-price / classic Male 30+ Contemporary and casual Revenue DKK 197m 09/10 Mid-price / classic Female Casual and strong colours Revenue DKK 398m 09/10 4 4

5 The World has Changed and So Has IC Companys 210 Jul-08 Aug-08 New management Sep-08 Financial Crisis Sep-09 Building growth foundation 241,5 Feb-15 Nov-10 New structure 40 Dec-08 Feb-09 Crisis management 5 5

6 Contents Introduction Our ambition So far so good 6 6

7 Structural Changes to Initiate New Profitable Growth Unlocking Potential from Brands Not Contributing to Group EBIT Value Structural changes Operational changes ICC 2.0 Organisation structure New business models ICC 1.2 Building the foundation ICC 1.1 Cost rationalisations Fixing the essentials ICC 1.0 New management Balanced matrix Aug-08 Feb-09 Sep-09 Nov-10 Time 7 7

8 Problem: We Had Four Different Business Models Leading to High Complexity, Disproportionated Administration and Costs Platform brands 0-10% independence Few choices of sales set-up and sourcing ST 90% independence Only knowledge sharing ToS/PP 50% Independence Own sales set-up BMB/DR 70% independence Own sales set-up Own invoicing 8 8

9 New Organisational Structure Makes it Possible to Explore Unrealised Potential in Our Brands New organisational structure (line set-up) One generic brand organisation Brands become fully responsible for their own value chain, profit and loss Wholesale, retail, e-commerce, marketing, product management, design and sourcing All brands follow the same company principles, guidelines and best-practises Management and business development ensure knowledge accumulation and diffusion Unrealised potential of brands not contributing to Group EBIT 9 9

10 We Want to Be Among the Best Developer of Sports and Fashion Brands BUSINESS MODELS BACKEND PLATFORM PEOPLE AND CULTURE PORTFOLIO STRATEGY 10 10

11 We Want to Create Big Growth in the Future By Focussing on 5 Strategic Goals Build strong fashion brands brands Have a focused market approach approach Increase control of distribution distribution Optimise our processes and value chain chain Practise world class leadership leadership 11 11

12 Contents Introduction Our ambition So far so good 12 12

13 Strong Revenue Performance while One-offs from Canada Duty Case and Structural Changes Impede Profitability Ttm revenue, DKKm and gross margin, % 3,738 3,621 3,630 3,435 3,435 3,423 3,495 3,900-4,000 Ttm EBIT, DKKm and EBIT margin, % % 60.3% 60.9% 60.5% 60.8% 59.9% 59.8% % 5.9% 8.1% 8.0% 7.6% 8.6% 4.5% 4.4% Q4 08/09 Q2 09/10 Q4 09/10 Q2 10/11 Q4 09/10 Q4 08/09 Q2 09/10 Q4 09/10 Q2 10/11 Q4 09/10 Expected revenue growth of 12-14% in 2010/11 Gross margin under pressure from Canada Duty Case and price pressure Positive EBIT in spite of crisis Expected EBIT margin of % in 2010/11 Ttm one-offs Q2 of DKK 36m 13 13

14 Resumed Dividend Policy and the Acquisition of By Malene Birger Temporarily Increase Net Interest Bearing Debt Ttm free cash flow, DKKm End of quarter NIBD, DKKm and NIBD/EBITDA ,8 2,2 1,7 2, , , , , ,9 Q2 08/09 Q4 08/09 Q2 09/10 Q4 09/10 Q2 10/11 Q2 08/09 Q4 08/09 Q2 09/10 Q4 09/10 Q2 10/11 Working capital freed up in 2009/10 du to improved operational efficiency Continuing high level of free cash flows in spite of growth NIBD increase due to resumed dividend policy and BMB acquisition Massive debt reduction last three years net debt close to DKK 0 in 2010/

15 Since July 2008 We Have Achieved Many Operational Changes Best practice across brands Order suggestions and new collection structure Average order intake last three collections of 13% Optimised value chain and improved cost efficiency Expansion of retail distribution Average growth last five quarters of 11% New successful franchise concept Average growth last five quarters of 26% Optimised wholesale base Average growth last three quarters of 17% 15 15

16 We Have a Number of Powerful Initiatives to Counter the Current Sourcing Pressure Situation Fierce competition for capacity ICC initiatives Long-term relationships with suppliers Simplifying our ways of working Reducing the number of suppliers Increasing raw material prices Only a fraction of the production value Bigger issues for lower margin producers Increasing labor costs Develop brand specific geographic sourcing strategies Right match between price/quality Dynamic prices 16 16

17 Using Our Competitive Advantages to Gain Market Share Competitive advantages New collections structure improve sale out of shops Order suggestions and controlled space improve control over merchandise flow Optimised buying systems reduce surplus stock Enhanced open-to to-buy buy orders can be placed when production capacity is ample Joint volume for 11 brands 17 17

18 Our Main Markets Have All Been Affected by the Crisis We Expect to Grow 12-14% in Total 2010/11 Scandinavia makes up 55% of Group revenue: Denmark, Sweden and Norway 35% 25% 15% 5% -5% -15% 35% 25% 15% 5% -5% -15% Jul-07 Dec-07 Jul-08 Dec-08 Jul-09 Dec-09 Jul-10 Dec-10 Jul-07 Dec-07 Jul-08 Dec-08 Jul-09 Dec-09 Jul-10 Dec-10 Ttm growth, DK Clothing sales ICC Revenue Ttm growth, S Clothing sales ICC Revenue 35% 25% 15% 5% -5% -15% Jul-07 Dec-07 Jul-08 Dec-08 Jul-09 Dec-09 Jul-10 Dec-10 Ttm growth, N Clothing sales ICC Revenue 18 18

19 Guidance FY 2010/11 Challenging business environment FY 2010/11 Gross margin under pressure Shift in external factors has been substantial Supplier capacity, transportation costs and raw material prices More fierce competition in the wholesale market Revenue in the range of DKK 3,900 4,000m Retained EBIT in the range of DKK m Retained Investments in the range of DKK m Retained 19 19

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