COMPANY PRESENTATION

Transcription

1 Title Subtitle Date COMPANY PRESENTATION Danske Bank Markets Copenhagen Winter Seminar 2015

2 THE GROUP IN SHORT IC GROUP A Danish listed apparel and fashion company operating and developing brands in the Premium segment CORE BUSINESS IC Group currently operates a core business consisting of three Premium brands: Peak Performance, Tiger of Sweden and By Malene Birger STRATEGIC TARGETS Sustainable revenue growth through further expansion in the Nordic core markets as well as international focus markets Leverage on revenue growth to continuously improve EBIT margin In the long-term perspective value creation may be achieved through acquisitions and/or divestments BUSINESS MODEL IC Group operates brands based on a shared platform from which brands can grow and develop The platform includes shared infrastructure and cost-effective support functions as well as a defined framework for best practice sharing and operational excellence 2

3 CORPORATE STRATEGY PORTFOLIO STRATEGY Focus on Premium apparel brands - i.e., brands that meet the distinct criteria in terms of origin, size, geographic focus, growth and earnings potential Value creation in the medium-term perspective will be achieved through continued development and investments in existing brands In the long-term perspective value creation may be achieved through acquisitions and/or divestments BUSINESS MODEL PILLARS Respect of individual brand DNAs, entrusting brand organizations with ownership of customerfaced value chain elements (design, marketing, distribution) Shared operational platform to secure lean supply chain operations and synergies through shared centralized support functions Know-how and best practice sharing in key areas of the value chain (i.e., product development process, working with suppliers, go-to-market strategies, working capital management, etc.) OPERATIONAL PLATFORM Shared infrastructure to maximise synergies (Sourcing, CR, Logistics, IT) Centralised, cost-effective support functions (Finance, HR, Legal & Real estate, Strategy & Business development) 3

4 CORPORATE BUSINESS MODEL CONSUMERS ADDED VALUE THROUGH... BRAND- SPECIFIC FUNCTIONS DESIGN Knowledge and best practice sharing across brands on a day-today basis and on larger cross-brand projects CENTRALIZED GROUP FUNCTIONS SOURCING, CR, LOGISTICS, IT FINANCE, HR, LEGAL & REAL ESTATE, STRATEGY & BUSINESS DEVELOPMENT Shared infrastructure to drive synergies from economies of scale and to utilize know-how Cost-effective and centralised support functions 4

5 5 GROUP ORGANIZATION

6 CORPORATE RESPONSIBILITY WE SUPPORT THE 10 PRINCIPLES OF THE UN GLOBAL COMPACT Based on internationally adopted declarations and conventions on: human rights, labour rights (People), environmental protection (Planet) and anti-corruption (Profit) INTEGRATED THROUGHOUT THE ORGANIZATION Responsibility for issues and targets are assigned to the relevant internal functions for them to take action PEOPLE PLANET PROFIT 6

7 BUSINESS SEGMENTS Core business Non-Core Sustainable revenue and earnings growth - continuously improve EBIT margin Divestment and clarify ownership when the timing is right 7

8 PEAK PERFORMANCE THE BRAND Founded in Strongly rooted in alpine skiing, the brand develops highquality products combining fashion and functionality STRATEGIC FOCUS AREAS Short term Revitalization of the brand through product improvements Improve distribution and market positioning (more Premium distribution) Longer term Growth and improved earnings through increased market penetration in the Nordic Region and in Central Europe (Alp Region) REVENUE BY GEOGRAPHY Nordic region 63% Rest of Europe 33% Rest of world 4% SELLING POINTS Wholesale customers 1,918 Franchise stores 45 Retail stores (own-and-operated) 32 Concessions 0 FINANCIALS 2014/ /14 Revenue DKK 953m DKK 929m EBIT DKK 107m DKK 72m EBIT margin 11.2% 7.8% 8

9 TIGER OF SWEDEN THE BRAND Founded in 1903 on a strong tailoring tradition. A distinct alternative to established tailoring brands characterized by a different cut STRATEGIC FOCUS AREAS Growth and improved earnings through further expansion in European focus markets (Germany, UK, France) as well as Nordic core markets Fuel current growth momentum in Germany (4 th largest market) through retail expansion in selected key cities REVENUE BY GEOGRAPHY Nordic region 82% Rest of Europe 14% Rest of world 4% SELLING POINTS Wholesale customers (including 3rd party e-com.) 1,126 Franchise stores 13 Retail stores (own-and-operated) 19 Concessions 11 FINANCIALS 2014/ /14 Revenue DKK 943m DKK 883m EBIT DKK 112m DKK 93m EBIT margin 11.9% 10.5% 9

10 BY MALENE BIRGER THE BRAND Founded in 2003 based on a design-driven passion to be a female fashion brand with an international appeal STRATEGIC FOCUS AREAS Growth and improved earnings through increased market penetration in the Nordic Region as well as international fashion metropoles (i.e., Paris, Tokyo, London) Improve profitability through increasing economies of scale REVENUE BY GEOGRAPHY Nordic region 59% Rest of Europe 26% Rest of world 15% SELLING POINTS Wholesale customers (including 3rd party e-com.) 953 Franchise stores 16 Retail stores (own-and-operated) 9 Concessions 8 FINANCIALS 2014/ /14 Revenue DKK 342m DKK 326m EBIT DKK 29m DKK 28m EBIT margin 8.5% 8.6% 10

11 NON-CORE OPERATIONS SAINT TROPEZ Female fast-fashion brand founded in 1986, focusing on young, independent femininity Not integrated into IC Group s operational platform DESIGNERS REMIX Female Premium brand founded in 2002 on minimalistic elegance 51% ownership Not integrated into IC Group s operational platform STRATEGIC FOCUS Saint Tropez: Divest when timing is optimal Designers Remix: Clarify future ownership FINANCIALS 2014/ /14 Revenue DKK 400m DKK 425m EBIT DKK 22m DKK 34m EBIT margin 7.1% 8.0% 11

12 LATEST FULL-YEAR RESULTS 2014/ /14 Revenue DKK 2,638m DKK 2,563m Gross margin 54.8% 57.3% OPEX DKK 1,239m DKK 1,249m EBIT DKK 207m DKK 221m EBIT margin 7.8% 8.6% Adjusted EBIT margin* 9.3 % 8.6% Free cash flow DKK 241m DKK 173m ROIC 31.4% 31.2% * Adjusted for one-offs and idle capacity costs remaining after divestment of Mid Market division 12

13 GROUP FINANCIALS IN SHORT CASH GENERATION Strong operating cash flow averaging DKK 232m over the last five years Investments expected at around 3-4% of annual revenue WORKING CAPITAL MANAGEMENT Strict credit control to ensure sound customer base High inventory turnover to reduce tied-up capital Working capital expected in the range of 10-12% of annual revenue CAPITAL STRUCTURE Financial gearing of 9% as at 30 June 2015 Current net debt target of zero Maximum NIBD limit of 3 x EBITDA (if needed) DIVIDEND POLICY Minimum 30% of net profit to be distributed as ordinary dividend Surplus cash to be distributed as extraordinary pay-out 13

14 GUIDANCE FOR FULL YEAR 2015/16 Premium brands expected to drive positive revenue and earnings growth Group revenue growth expected in the region of 4% EBIT margin for continuing operations expected in the region of 10% Investments expected at 3-4% of annual revenue Extraordinary dividend at a level of DKK 75m expected during 2015/16 14

15 THE IC GROUP SHARE Listed on Nasdaq Copenhagen ISIN Code: DK Tickers: Bloomberg IC:DC, Reuters IC.CO Included in Nasdaq Copenhagen Mid Cap index Market data as at 1 December 2015 Share price: DKK 209 Market cap: DKK 3.6bn Current analyst coverage: Danske Bank Kristian Tornøe Johansen Nordea Markets Patrik Setterberg Carnegie Lars Topholm (initiating coverage in late 2015) SEB Equities Kristian Godiksen (initiating coverage in 2016) Investor relations contact: Jens Bak-Holder jeba@icgroup.net Mobile: Web: icgroup.net Ownership structure (free float 38%): 7% 20% 5% 3% 2% 10% Friheden Invest Hanssen Holding A/S ATP Other Danish institutional Danish private investors Indexed 12 months performance 150 IC Group A/S 140 OMX C20 CAP % 42% Foreigh investors Treasury shares Non-grouped

16 16 16