ADLER Modemärkte Equity Story

Transcription

1 ADLER Modemärkte Equity Story November

2 Investment Summary: ADLER Modemärkte is well positioned to face short-term challenges and lift mid- to long-term potentials Growing target group Assets Very loyal customer base (90% of sales generated via customer card) Customer knowledge comparable to online retailers Own brands as strong USP, accounting for Lean and integrated business model Solid network of 180+ stores at attractive locations Sound balance sheet to finance future growth Numerous internal and external growth opportunities New client wins & development of existing costumers Online-shop expansion Significant cost efficiency and profitability improvements Potential Optimisation of marketing spend Introduction of new planning system Restructuring of sales department 2

3 Lean and vertical integrated business model optimisation of value added supply chain continues Full information control along the entire value chain Product development Sourcing Logistics Distribution In-house design team Focus on own brands Fashion follower of market proven styles, minimising fashion risk Up to 10 collections per year Completely outsourced production Diversified supplier base Sourcing partnership with Metro Group Buying (MGB) NTS Direct Centralised logistics operations with efficient push-and-pull warehousing system Organised by BLG (to be replaced by Meyer&Meyer from 2019 onwards), MGB and NTS Focused CRM and marketing Omni-channel distribution 4 retail formats (retail park, shopping center, stand alone, city center) Highly flexible modular store system E-business Efficient supply chain management full information control over the entire value chain and high process standardisation Focus on core value added processes product development and distribution 3

4 Discount Value Middle Upper Unique brand positioning with strong target group focus 45+ Brand positioning of ADLER Unique brand position Outstanding value-for-money perception Fashion follower approach conservative fashion grade management of market proven styles minimizing fashion risk Excellently positioned in the attractive fast growing value fashion segment and above the vulnerable discount segment low Fashion degree high Source: Company information 4

5 Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight Which customer cards of textile retailers do you use on a regular basis? 7% 7% ADLER Esprit 3.8 million active ADLER Customer Card members -> wide customer database 4% 4% 3% 2% 2% 2% 1% 1% 1% 7% Peek&Cloppenburg s.oliver Takko Ernsting`s Family Charles Vögele Wöhrl Tom Tailor Orsay Ulla Popken Bonita ~ 40,000 new Customer Cards every month 90% of revenues generated via Customer Card Best in class: ADLER Customer Card classified best out of 24 loyalty card schemes* Focused and efficient marketing opportunities: loyalty card scheme allows exact market segmentation and a targeted marketing approach High profitability of ADLER card customers: high acceptance of ADLER customer card enables steering of customer frequency and cash flows Source: Statista / nhi2; 1,005 participants; 2013 Source: *Finanztest (2010) 5

6 Potential for internal growth through expansion of ADLER online-shop Revenue: CAGR of 28.3% in the last three years (2016: 8.9 million) Revenue 9M-2017: 9.3 million (+23% vs 9M-2016) Average size of shopping cart increases constantly (2017: > +5% vs 2016) 9 direct ecommerce employees > 60 employees work indirectly for service providers for ADLER ecommerce Constantly 5,500 items online 49% of customers reached via mobile devices Continued dynamic growth for 2017 expected 6

7 Phase of consolidation continues in 2017 further medium- to long term potential Number of ADLER stores per country Regional presence and potential for expansion Market entry Number of stores Germany Austria Luxembourg Switzerland Total Organic openings Acquisitions Closings / sales Net difference Targets Short-term focus on investment discipline: only 1 organic store opening in 2017 after 7 stores in 2016 (6 stores net) Focus on large formats such as retail centers and stand-alone markets with a retail space of > 1,400 m² Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network) 7

8 9M 2017 results Substantial improvements in earnings and free cashflow 8

9 New top management first analysis and perspectives Analysis of status quo started immediately, from September 11 Intensive management discussions during numerous shop visits (target >50 until year-end 2017) First impressions and perspectives Unique market position and substantial upside based on established ADLER customer card and new client potential Optimisation potential for collection management, store format, omni-channel approach, CRM, digitalisation, leadership and operative excellence Next steps: Thomas Freude, CEO We want to bring ADLER back onto a sustainable growth track Definition and communication of new strategic set-up until year-end result presentation mid March

10 Key facts substantial improvements in earnings and cashflow Q3 revenues up 2% / like-for-like revenue virtually in line with industry level after nine months Substantial EBITDA growth by 14.3 million to 6.6 million due to improved profitability and nonrecurring effects operating result reaches 0.4 million (up 8.1 million) Free cash flow improved by more than 26 million to 6.4 million, thanks to stringent cash flow management Outlook for FY 2017 confirmed 10

11 Sales increased in Q Nine months development as expected Revenue in m -0.2% +1.9% Like-for-like 9M: -1.9%; Like-for-like Q3: +0.3% Online revenues 9M: 7.5 million (+25%) On track to achieve FY target > 10 million M M-2017 Q Q

12 Gross profit margin increased to >50% in Q3 in m 9M M % Gross Profit Cost of Goods Sold % Gross margin Q3-2017: 50.3% (Q3 2016: 47.7%) 9M-2017: 52.1% unchanged Reduction of cost of materials due to adjustments in purchasing volumes Margin 52.1% 51.1% 12

13 EBITDA significantly increased due to operating improvements and one-off effects EBITDA in m 9M M-2017 Q Q Increase in EBITDA due to operating improvements and non-recurring effect resulting from the sale of two buildings in Austria in the first quarter of 2017 Operating EBITDA reached +0.4 million in 9M-2017, up 8.1 million Personnel costs down 6% as indicated FY savings of 6 million confirmed All efficiency measures in line with schedule 13

14 Decline of cash substantially less pronounced than in previous years in m Cash and cash equivalents at 36.6 million as of 30/09/ /09/2016: 14.0 million 30/12/2016: 42.8 million 14.0 Free cash flow: +6.4 million in 9M-2017 (9M- 2016: million) Cash 30/9/2016 Cash 1/1/2017 Operating CF CF from Investing CF from Financing Cash 30/9/2017 in m Net debt* -36 % /09/ /09/2017 Net debt impacted by: Increase in cash and cash equivalents by 22.6 million to 36.6 million (9M-2016: 14.0 million) Unchanged assets held for sale ( 0.3 million) Increase in finance lease obligations from 52.2 million to 54.9 million Financial debt of 17.5 million (9M: 13.5 million) Reduction of pension provisions by 0.4 million to 5.4 million Leverage declines from 1.98 to 1.80 (yoy) * Including liabilities from customer card, pension provisions, finance lease liabilities ex assets held for sale, cash, other financial liabilities 14

15 Balance sheet quality further improved yoy in m 30 Sept Sept Dec Total assets Inventories Trade receivables Cash position Equity Equity ratio 33.5% 35.7% 43.1% Trade payables

16 Update on real estate transactions Real estate portfolio under lease (exp. 30 April 2017) bought out at purchase price of 1.3 million Klagenfurt* Salzburg Vösendorf Ansfelden Klagenfurt St. Pölten (formerly owned) *not used as ADLER store GBS Sold to retailer with effect from 1 April 2017 Vösendorf Salzburg Ansfelden Liquidity generated enabled ADLER to acquire GBS Grundstücksverwaltungsgesellschaft m.b.h. with effect from 3 May 2017; purchase price: 6.7 million ( million liabilities) Sales revenue: 10 million, 7.5 million recognized as non-recurring effect in Q2 News on resale to strategic investor to be expected shortly 16

17 New ADLER Brand Campaign 2017 started in September 2017 Target Increase of footfall and revenue through Activation of existing clients New client wins Add emotions to the brand by linking it with appealing content ( Great appreciation of and compliments for our clients ) Boost brand awareness Implementation Focus on ADLER`s core brand value Mode ist für Menschen da ( Fashion is for people ) Deployment of authentic, charismatic self-confident people (instead of models) 360-degree-implemenation across all channels (TV, Mailings, Digital, PoS) Adressing of clients and employees at the same time 17

18 Forecast FY 2017 confirmed: substantially higher profitability despite continued market weakness Revenue Revenue slightly below prior-year level Revenue generated online Significant increase Gross profit margin Slight increase Personnel expenses Slight decrease Transport and logistics costs Slight increase EBITDA million Free Cash Flow At least level with 2016 Expansion 1 store opening in

19 Financial calendar & contact details Adler Modemärkte AG Industriestraße Ost Haibach/Germany Phone: Fax: InvestorRelations@adler.de FINANCIAL CALENDAR 2018 Annual Report March 2018 Report on the first quarter of 8 May 2018 Annual General Meeting 9 May 2018 Report on the first half year 2 August 2018 Report on the first nine months 8 November 2018 German Equity Forum, Frankfurt November