CFA EQUITY RESEARCH CHALLENGE 2014

Transcription

1 Milan February 2014 CFA EQUITY RESEARCH CHALLENGE 2014 A tailor-made investment Marta Giampietro Federico Braga Matteo Cataldi Davide Di Bucchianico Giovanni Galvani

2 Agenda Introduction and investment summary Online luxury market and industry Financial analysis Valuation: DCF Valuation: multiples Investment risks

3 Summary

4 Business Description Italian largest Internet retailing partner of fashion and design companies Over 1,000,000 active customers Sales in over 100 countries Best performing stock in Italian Stock Exchange in 2013 Yoox s History & Recent Development Top performing stock in the FTSE MIB Launch of JV with HK landing Launch of automation at Bologna center China landing Listing on the Milan Stock Exchange Launch of iphone app Japan landing Launch of mono-brand business Launch of Launch of US landing Source: Company Annual Reports Summary Business Industry Financials Valuation Risks 4

5 Investment Summary Our Recommendation Key Performance Drivers TARGET PRICE Expanding online retail market BUY 33.9 UPSIDE SCENARIO 36.6 Booming retail industry Strong cash generation expected Unparalleled IT and logistic capabilities Market Data Market Capitalization 1.7bn Shares Outstanding 57.9m Free Float 59.2% Average Daily Volume 521,255 52w High w Low Source: Bloomberg, Yahoo Fin Share Price Performance ( ) Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan Feb-14 Mar-14 Apr-14 Source: Company Annual Reports, Team Estimates +16.1% May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec Jan-15 Feb-15 Summary Business Industry Financials Valuation Risks 5

6 Business Description

7 Business Overview The Businesses: Mono-brand & Multi-brand Multi Discounted off-season apparel, accessories and shoes In-season high fashion with dedicated ministores Entirely dedicated to high end women s shoes Key Performance Drivers High synergies between the mono and multi-brand Heavily automated distribution center Wide-spectrum customer targeting Brand lovers Fashion savvy Bargain hunters Superior logistic capabilities: 7 logistic centers 4 trans-shipment hubs in key locations Mono Design and management of proprietary online stores of over 40 design & luxury brands and more Summary Business Industry Financials Valuation Risks 7

8 Industry Overview & Competitive Positioning

9 Industry Overview & Competitive Positioning Global Macro Trends Luxury goods market forecasts Personal luxury goods market to become a trillion dollar industry by ,200 1, x GDP $1trillion European online luxury sales to double between 2010 and % of the luxury firms do not sell their products online 0 Source: Altagamma, Bain & Co. Online sales as a % of tot. sales (geographic breakdown) Online Luxury Sales doubled but still 25% 5.0% 20% 15% 10% 11% % 3.0% 2.2% 4.0% Do not sell online 40% 5% 2.0% 0% 1.0% 0.0% Source: The Boston Consulting Group Source: The Boston Consulting Group Summary Business Industry Financials Valuation Risks 9

10 Industry Overview & Competitive Positioning Mobile Boom in purchases made through mobile devices Large groups Luxury conglomerates outsourcing logistics, storage and online services Y-o-y% growth of mobile audience in EU 5 (2012) 1.6 Mobile purchases % % Source: Opera Capital Partners 2013 Report Summary Business Industry Financials Valuation Risks 10

11 Financial Analysis

12 Sales Analysis Sales CAGR between : 35% 455.6m net revenues in 2013, up 21% from 2012 Mono-brand revenues: 28% of total sales in 2013, 48% in 2022 Different accounting methodology: Mono-brand Multi-brand Joint Venture Net Sales ( m) Key Financials m 2010A 2011A 2012A Net Sales Cost of goods sold (129.9) (183.0) (238.5) Gross Profit Operating costs (65.7) (84.1) (105.3) EBITDA Operating profit Consolidated profit Source: Company Annual Reports Revenue Breakdown by Geography (as a % of sales) 2,700 2,400 2,100 1,800 1,500 1, A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Mono-brand sales Multi-brand sales Source: Company Annual Reports, Team Estimates Source: Company Annual Reports Summary Business Industry Financials Valuation Risks 12

13 Costs & Profitability Analysis Variable cost structure Operating leverage 2.2x in 2012 COGS and fulfillment costs 80% of variable costs Mono-brand more profitable than multi-brand EBITDA margin affected by rents and stock option costs EBITDA margin ca. 12% in 2018 Profitability As a % of Sales 2010A 2011A 2012A EBITDA Margin 8.8% 8.3% 8.5% Mono-brand EBITDA Margin 17.9% 18.9% 19.9% Multi-brand EBITDA Margin 17.8% 15.1% 15.2% EBITDA Margin Ex. Incentive Plan Costs 10.5% 9.7% 9.8% EBITDAR Margin 10.9% 9.9% 9.8% Source: Company Annual Reports Mono vs. Multi-brand: EBITDA, EBITDA Margin ( m) Net Sales vs. Operating Costs 70 30% 2, % 2, Mono-brand EBITDA Multi-brand EBITDA Mono-brand margin Multi-brand margin 20% 15% 10% 5% 0% 2,000 1,600 1, A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Operating costs Net sales Source: Company Annual Reports Source: Company Annual Reports, Team Estimates Summary Business Industry Financials Valuation Risks 13

14 Capital Structure 98% financed by equity 96% financed by equity including operating leasing Operating Leasing Estimation Rent per SQM 8 Osservatorio del Mercato Immobiliare Italiano Total SQM 44,000 Company Annual Report Premium 10% Team Estimate High solvency ratios Yearly Rent 4.6m (Rent per SQM x Total SQM X 12) x (1 + Premium) Positive NFP in 2012: 14.8m PV of Debt 38.6m 10 Year Annuity Source: Company Annual Reports, Team Estimates, OMI Time Interest Earned vs. Coverage Ratio 60x 50x 40x 30x 20x 10x Adjusted Financial Debt Ratio 0.25x 0.20x 0.15x 0.10x 0.05x 0x 2010A 2011A 2012A Times interest earned Coverage ratio x 2010A 2011A 2012A 2013Q3 Financial debt ratio Financial debt ratio including leasing Source: Company Annual Reports Source: Company Annual Reports, Team Estimates Summary Business Industry Financials Valuation Risks 14

15 Valuation

16 Valuation DCF Three stage approach First stage: Second stage: Terminal value Free Cash Flow to Firm (FCFF) Standalone EV + 49% EV Joint Venture (JV) Total EV: 2.26bn EV / Sales Multiple Analysis Next 12-month multiple Comparable company: Asos Standalone EV + 49% EV Joint Venture (JV) Total EV: 2.33bn 12-month target price month target price 35.3 Summary Business Industry Financials Valuation Risks 16

17 Key Factors Sales & Costs Net Sales AOV x # of Orders x (1 RR) Number of Orders Growth Rate Estimation 50% 40% 30% AOV First stage: historical growth rate Second stage: world inflation estimates 20% 10% # of Orders Base rate: growth rate of e- commerce buyers Different spreads for mono and multi-brand 0% 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E e-commerce buyers multi-brand sales mono-brand sales Source: U.N., CISCO, Team Estimates CAGR Estimates 1 Stage 2 Stage Return Rate Constant and equal to historical average CAGR AOV 7.3% 3.5% Spread Multi-brand Orders 2.8% 0.4% Spread Mono-brand Orders 13.1% 12.3% CAGR Multi-brand Orders 12.4% 10.0% Costs Variable costs: same growth rate as sales CAGR Multi-brand Orders 22.7% 21.9% Return Rate 26.4% 26.4% CAGR Net Sales 24.6% 18.9% Source: Team Estimates Summary Business Industry Financials Valuation Risks 17

18 Key Factors Capex & Working Capital Capex WC : management guidance : same growth rate as In 2015 ca. 30% of Capex related to tangibles In 2018 ca. 50% of Capex related to tangibles Change in WC driven by change in inventories Inventories computed on multi-brand sales (non-consignment portion only) Working Capital Forecast ( m) E 2015E 2016E 2017E 2018E 2019E 202E 2021E 2022E Inventories Receivables Payables Other Source: Team Estimates Capex Forecast ( m) Current and Future Hubs E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Capex (Intangibles) Capex (Tangibles) Source: Team Estimates Source: Company Annual Reports, Team Estimates Summary Business Industry Financials Valuation Risks 18

19 DCF Overview FCFF m 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E EBIT Tax (7.7) (11.1) (19.1) (29.7) (36.7) (50.9) (67.0) (84.8) (105.9) = EBIT * (1 - t) D&A = EBIT * (1 - t) + D&A /- Δ Working Capital (16.0) (23.2) (29.6) (37.7) (24.3) (44.1) (53.6) (65.1) (79.1) Capex (Intangibles & Tangibles) (32.5) (33.5) (34.5) (35.6) (36.7) (37.8) (39.0) (40.2) (41.4) = Free Cash Flow to Firm (2.4) Source: Team Estimates WACC Risk-free Rate 3.76% DCF Results Growth Rate TV 2.50% JV Value Estimation m, % 2012A 2013E 2014E Beta 0.84 Discounted TV 1.96m Net Sales ERP 5% Total EV 2.26m Mono-brand Growth Rate 11.8% 28.9% Kd 3.50% Net Debt 15.5m Asos EV / Sales NTM 5.04x Marginal Tax Rate 31.4% Equity Value 2.25m Value of JV 9.4 E / (E + D) 100% WACC 7.96% Source: Bloomberg, Damodaran, Team Estimates # of Shares & Stock Options 66.1m TP Fully Diluted 33.9 Potential Upside +16.1% Source: Team Estimates Ownership % 49% EV Added to Yoox Value 4.6 Source: Team Estimates Summary Business Industry Financials Valuation Risks 19

20 Valuation DCF Three stage approach First stage: Second stage: Terminal value Free Cash Flow to Firm (FCFF) Standalone EV + 49% EV Joint Venture (JV) Total EV: 2.26bn EV / Sales Multiple Analysis Next 12-month multiple Comparable company: Asos Standalone EV + 49% EV Joint Venture (JV) Total EV: 2.33bn 12-month target price month target price 35.3 Summary Business Industry Financials Valuation Risks 20

21 Multiple Analysis Sales are the most reliable figure for retailers Yoox s sales adjusted for comparison Only Asos can be safely compared to Yoox Same international profile and technologically advanced facilities Exposure to the same growth and risk factors Similar growth-path and volumes JV Value Estimation m, % 2012A 2013E 2014E Net Sales Mono-brand Growth Rate 11.8% 28.9% Asos EV / Sales NTM 5.04x Value of JV 9.4 Share owned 49% EV Added to Yoox Value 4.6 Source: Team Estimates Multiple Valuation Asos EV / Sales NTM 5.04x Adjusted Yoox 2014 Net Sales EV Yoox EV Joint Venture (49%) Total EV Net Debt Equity Value 465.3m 2,345m 4.6m 2,349.7m 15.5m 2,334.2m Number of Shares & Stock Options 66.1m TP Fully Diluted 35.3 Price as of February 5th, Potential upside (downside) +20.6% Source: Team Estimates, S&P CapIQ Sales Adjustment Net Sales Adjustment 576.6m ( 111.3m) Total Net Sales before adjustment Adjusted Sales 465.3m Yoox s Sales Source: Team Estimates Mono-brand Net Sales Pertaining to Partner Company Summary Business Industry Financials Valuation Risks 21

22 Risks

23 Key investment risks Two Categories of Risks Monte Carlo Simulation Strategic / Operational Risks Non-renewal of mono-brand contracts by major fashion houses Unsuccessful roll-out of growth strategy Price pressure from new entrants Strategic component of FX risk Monte Carlo was run to factor in changes in: Long term growth Growth rate of the AOV Growth rate of Internet penetration Proportion of e-buyers FX effects on Net Profit and Historical trend of FX rates ( m) Financial Risks Not perfectly hedged from FX fluctuations FX rates significantly varied in the past years EUR/USD EUR/JPY EUR/GBP EUR/CNY EUR/CAD -1.0 FX effect Hedging effect Net Effect Source: Company Financial Reports, Bloomberg, Oanda Summary Business Industry Financials Valuation Risks 23

24 Q&A

25 Appendix Income Statement (Historical Data) Sales Growth Rate Estimates Balance Sheet (Historical Data) Capex Forecast Income Statement (Forecast) Optimal Capital Structure Balance Sheet (Forecast) Montecarlo Simulation Ratio Analysis Data SWOT Analysis and Porter s 5 Forces

26 Appendix 1: Consolidated Income Statement Historical Data Consolidated Income Statement m 2010A 2011A 2012A Net sales % growth 40.8% 35.9% 29.1% Cost of goods sold (129.9) (183.0) (238.5) Gross profit Fulfillment costs (21.5) (29.6) (32.7) Sales and marketing costs (24.7) (31.5) (42.1) EBITDA pre-corporate costs % growth 36.1% 23.2% 33.1% % revenues 17.8% 16.2% 16.7% General expenses (18.9) (22.6) (29.1) Other income and expenses (0.5) (0.4) (1.4) EBITDA % growth 25.0% 28.4% 33.2% % revenues 8.8% 8.3% 8.5% Depreciation and amortization (3.7) (7.7) (13.2) Operating Profit % growth 69.8% 9.4% 15.1% % revenues 7.0% 5.6% 5.0% Result of equity investments (.37) Financial income Financial expenses (1.1) (1.2) (3.5) Profit before tax % growth 102.6% 10.1% 0.7% % revenues 7.0% 5.6% 4.4% Taxes (5.8) (6.5) (6.4) Taxes % 39.0% 39.2% 38.5% Consolidated profit for the period % growth 122.5% 9.7% 1.8% % revenues 4.3% 3.4% 2.7% of which: Attributable to owners of the Parent EBITDA excluding incentive plan costs % growth 35.1% 25.6% 29.9% % revenues 10.5% 9.7% 9.8% Basic earnings per share Diluted earnings per share Back

27 Appendix 2: Consolidated Balance Sheet Historical Data Consolidated Balance Sheet m 2010A 2011A 2012A Non-current assets Property, plant and equipment Intangible assets with finite useful life Equity interests in associates Deferred tax assets Other non-current financial assets Total non-current assets Current assets Inventories Trade receivables Other current assets Cash and cash equivalents Current financial assets Total current assets Total assets Shareholders Equity Share capital Reserves Retained earnings/losses carried (5.4) Consolidated profit for the year Equity attributable to equity holders of the Parent Equity attributable to Third Parties Total consolidated equity Non-current liabilities Medium-long term financial liabilities Employee benefits Provisions for risks and charges Deferred tax liabilities Total non-current liabilities Current liabilities Bank loans and other current financial payables Provisions for risks and charges Trade payables Tax liabilities Other payables Total current liabilities Total consolidated equity and liabilities Back

28 Appendix 3: Consolidated Income Statement Forecast Consolidated Income Statement m 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Net Sales COGS (284.7) (368.8) (457.9) (568.3) (705.2) (856.5) (1017.4) (1208.8) (1436.6) (1707.8) Purchase of goods (290.7) (367.9) (456.1) (565.7) (701.9) (833.7) (990.6) (1177.5) (1400.1) (1665.3) Service expenses and other costs (41.0) (51.9) (64.3) (79.8) (99.0) (117.6) (139.8) (166.1) (197.5) (234.9) Change in inventories Rents (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) Gross profit Gross profit margin 37.5% 36.0% 35.9% 35.9% 35.9% 34.5% 34.5% 34.5% 34.5% 34.6% Other income and expenses (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) Fulfillment costs (30.9) (36.9) (43.3) (50.7) (59.5) (70.7) (84.0) (99.8) (118.7) (141.1) Sales and marketing costs (35.9) (45.4) (56.3) (69.8) (86.6) (102.8) (122.2) (145.2) (172.7) (205.4) General expenses (20.3) (25.7) (31.8) (39.5) (49.0) (58.2) (69.2) (82.2) (97.8) (116.3) Wages and salaries (37.8) (44.5) (50.7) (56.3) (63.5) (64.7) (65.8) (67.0) (68.2) (69.5) EBITDA EBITDA margin 9.8% 9.3% 10.3% 11.4% 12.3% 11.7% 12.4% 13.1% 13.6% 14.1% Amortization (intangible assets) (16.1) (24.5) (32.1) (33.2) (33.6) (30.3) (26.5) (25.1) (27.4) (31.) Depreciation (fixed assets) (7.2) (10.2) (12.3) (13.5) (14.6) (13.4) (12.3) (11.) (10.1) (9.) EBIT EBIT margin 4.7% 3.3% 4.1% 6.1% 7.9% 8.3% 9.9% 11.1% 11.9% 12.6% Net financial income/(charges) (3.0) (3.0) (2.9) (2.8) (2.7) (2.6) (2.5) (2.4) (2.2) (2.1) Short term net financial Income/(charges) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) Rent interest expenses (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) (1.4) Long term net financial Income/(charges) (1.5) (1.5) (1.4) (1.3) (1.2) (1.1) (1.0) (0.9) (0.7) (0.6) Result of equity investments Earnings before taxes EBT margin 4.0% 2.8% 3.7% 5.8% 7.6% 8.1% 9.8% 11.0% 11.8% 12.5% Income taxes (7.4) (6.9) (10.3) (18.4) (29.) (36.) (50.2) (66.3) (84.2) (105.3) Net Earnings (Loss) Net earnings margin 2.4% 1.6% 2.2% 3.7% 5.0% 5.4% 6.5% 7.4% 8.0% 8.5% Back

29 Appendix 4: Consolidated Balance Sheet Forecast Consolidated Balance Sheet m 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Receivables Inventories Payables (106.5) (134.7) (167.1) (207.2) (257.1) (305.4) (362.8) (431.3) (512.8) (609.9) Accrued income and deferred payments Accrued liabilities and deferred income (30.1) (38.1) (47.2) (58.5) (72.6) (86.3) (102.5) (121.8) (144.9) (172.3) Working Capital y-o-y% 24.0% 28.2% 28.0% 27.9% 14.1% 22.4% 22.2% 22.1% 22.0% Intangible assets Tangible assets Financial investments Fixed assets Net Invested Capital Net Financial Position (13.2) (43.2) (96.2) (154.3) (234.2) (341.4) (482.1) Back

30 Appendix 5: Ratio Analysis Data Duration ratios 2010A 2011A 2012A Days receivable Days payable Days inventory Cash cycle Liquidity ratios 2010A 2011A 2012A Current ratio 1.7x 1.7x 1.5x Quick ratio 0.6x 0.5x 0.4x Solvency 2010A 2011A 2012A Debt ratio 0.5x 0.5x 0.6x Financial debt ratio 0.1x 0.2x 0.3x Debt-to-equity 1.1x 1.2x 1.5x Financial debt to equity ra 0.0x 0.1x 0.1x Net debt ratio Coverage ratio Times interest earned 54.8x 50.8x 34.1x Back

31 Appendix 6: Sales Growth Rate Estimates 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Population (bn) Internet penetration 34.7% 37.6% 40.8% 44.3% 48.0% 52.1% 56.5% 61.2% 66.4% 72.0% Internet users (bn) E-commerce buyers (bn) E-commerce buyers growth 9.7% 9.7% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.4% 9.6% AOV st Stage 2nd Stage CAGR AOV 7.3% 3.5% Spread Multi-brand Orders 2.8% 0.4% Spread Mono-brand Orders 13.1% 12.3% CAGR Multi-brand Orders 12.4% 10.0% CAGR Mono-brand Orders 22.7% 21.9% Return Rate 26.4% 26.4% CAGR Net Sales 24.6% 18.9% Back

32 Appendix 7: Capex Forecast Intangible assets 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Beginning net intangible assets Amortization rate 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% Capex Amortization on beginning intangibles (6.4) (8.2) (8.0) (6.6) (5.1) (3.7) (1.0) (0.4) (1.1) (1.9) Amortization 2013 Capex (5.8) (5.8) (5.8) (0.3) Amortization 2014 Capex (6.5) (6.5) (6.5) (0.4) Amortization 2015 Capex (7.8) (7.8) (7.8) (0.4) Amortization 2016 Capex (8.1) (8.1) (8.1) (0.5) Amortization 2017 Capex (8.3) (8.3) (8.3) (0.4) Amortization 2018 Capex (6.0) (6.0) (6.0) (0.3) Amortization 2019 Capex (6.8) (6.8) (6.8) (0.4) Amortization 2020 Capex (7.7) (7.7) (7.7) Amortization 2021 Capex (7.7) (8.6) Amortization 2022 Capex (8.6) Total Amortization before leasing (12.2) (20.6) (28.2) (29.4) (29.7) (26.5) (22.6) (21.3) (23.5) (27.1) Amortization on operating leasing (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) Total Amortization (16.1) (24.5) (32.1) (33.2) (33.6) (30.3) (26.5) (25.1) (27.4) (31.0) Operating leasing Net intangible assets at the end of the year Fixed assets 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Beginning net fixed assets Depreciation rate 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% Capex Actual depreciation (5.0) (5.9) (6.3) (5.8) (5.2) (4.5) (5.3) (6.1) (6.9) (7.6) Depreciation 2013 (2.2) (2.2) (2.2) (2.2) (2.2) (1.8) Depreciation 2014 (2.1) (2.1) (2.1) (2.1) (2.1) (1.9) Depreciation 2015 (1.6) (1.6) (1.6) (1.6) (1.6) (1.5) Depreciation 2016 (1.7) (1.7) (1.7) (1.7) (1.7) (1.5) Depreciation 2017 (1.7) (1.7) (1.7) (1.7) (1.7) (1.4) Depreciation 2018 (3.1) (3.1) (3.1) (3.1) (3.1) Depreciation 2019 (2.9) (2.9) (2.9) (2.9) Depreciation 2020 (2.7) (2.7) (2.7) Depreciation 2021 (2.4) (2.4) Depreciation 2022 (2.1) Total Depreciation (7.2) (10.2) (12.3) (13.5) (14.6) (13.4) (12.3) (11.0) (10.1) (9.0) Net fixed assets at the end of the year Back

33 Appendix 8: Optimal Capital Structure 2, % DEBT/TOTAL VALUE WACC Ev ( m) 2, % 0% 7.96% 2,262 1% 7.89% 2,298 2% 7.83% 2,335 3% 7.77% 2,369 4% 7.71% 2,404 5% 7.67% 2,432 2,200 2,000 1,800 1, % 9.0% 8.0% 6% 7.85% 2,320 7% 7.94% 2,268 1, % 8% 7.94% 2,269 9% 7.94% 2,269 1, % 10% 8.01% 2,232 1,000 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 5.0% Enterprise Value ( m) WACC Back

34 Appendix 9: Monte Carlo Simulation Variable Distribution Mean Standard deviation g TV Normal % Growth in internet penetration Normal % Percentage of e-commerce buyers Normal % Annual growth of AOV Normal % Results Mean Standard deviation 2.28 Min Max Back

35 Appendix 10: SWOT Analysis and Porter s Five Forces STRENGHTS Leader in the online luxury retail market Synergies across mono and multi-brand Highly automated and technologic hubs Unique expertise Strong partnerships in place OPPORTUNITIES Entry into LatAm and Middle East markets Potential upside from exploiting data-mining activity Possibility to exploit leverage Development of proprietary label WEAKNESSES No use of financial leverage Low margins No effective hedge for exchange rates No fiscal optimization THREATS Physical stores regaining popularity Government regulation Key brands may not renew their partnerships with Yoox Current growth rates unsustainable in LT Threat of substitute products Threat of new entrants Bargaining power of suppliers Bargaining power of clients/customers Competitive rivalry within the industry Back