CFA EQUITY RESEARCH CHALLENGE PDF Free Download

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

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

Summary

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 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Company Annual Reports Summary Business Industry Financials Valuation Risks 4

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 34.75 52w Low 13.49 Source: Bloomberg, Yahoo Fin Share Price Performance ( ) 40 35 30 25 20 15 10 5 0 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 29.2 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-14 33.9 Jan-15 Feb-15 Summary Business Industry Financials Valuation Risks 5

Business Description

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

Industry Overview & Competitive Positioning

Industry Overview & Competitive Positioning Global Macro Trends Luxury goods market forecasts Personal luxury goods market to become a trillion dollar industry by 2025 1,200 1,000 800 2.2x GDP $1trillion European online luxury sales to double between 2010 and 2016 600 400 200 40% 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% 2010 2016 4.0% 3.0% 2.2% 4.0% Do not sell online 40% 5% 2.0% 0% 1.0% 0.0% 2009 2012 Source: The Boston Consulting Group Source: The Boston Consulting Group Summary Business Industry Financials Valuation Risks 9

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 1.4 12% 1.2 1 0.8 0.6 0.4 0.2 0 94% Source: Opera Capital Partners 2013 Report Summary Business Industry Financials Valuation Risks 10

Financial Analysis

Sales Analysis Sales CAGR between 2009-2012: 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 214.3 291.2 375.9 Cost of goods sold (129.9) (183.0) (238.5) Gross Profit 84.4 108.2 137.4 Operating costs (65.7) (84.1) (105.3) EBITDA 18.8 24.1 32.1 Operating profit 15.0 16.4 18.9 Consolidated profit 9.1 10.0 10.2 Source: Company Annual Reports Revenue Breakdown by Geography (as a % of sales) 2,700 2,400 2,100 1,800 1,500 1,200 900 600 300-2010A 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

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% 2,800 60 25% 2,400 50 40 30 20 10 0 2009 2010 2011 2012 Mono-brand EBITDA Multi-brand EBITDA Mono-brand margin Multi-brand margin 20% 15% 10% 5% 0% 2,000 1,600 1,200 800 400 0 2010A 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

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 5.0 4.0 3.0 2.0 1.0 Adjusted Financial Debt Ratio 0.25x 0.20x 0.15x 0.10x 0.05x 0x 2010A 2011A 2012A Times interest earned Coverage ratio 0.0 0.00x 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

Valuation

Valuation DCF Three stage approach First stage: 2014-2017 Second stage: 2018-2022 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 33.9 12-month target price 35.3 Summary Business Industry Financials Valuation Risks 16

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

Key Factors Capex & Working Capital Capex WC 2014-2015: management guidance 2016-2022: same growth rate as 2011-2014 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) 400 300 200 100 0-100 -200-300 -400-500 2014E 2015E 2016E 2017E 2018E 2019E 202E 2021E 2022E Inventories Receivables Payables Other Source: Team Estimates Capex Forecast ( m) Current and Future Hubs 45 40 35 30 25 20 15 10 5 0 2013E 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

DCF Overview FCFF m 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E EBIT 19.1 29.1 53.9 86.8 108.7 154.0 204.9 261.6 328.7 Tax (7.7) (11.1) (19.1) (29.7) (36.7) (50.9) (67.0) (84.8) (105.9) = EBIT * (1 - t) 11.4 18.0 34.8 57.1 72.1 103.1 137.9 176.8 222.8 D&A 34.7 44.4 46.8 48.2 43.7 38.8 36.1 37.5 40.0 = EBIT * (1 - t) + D&A 46.1 62.3 81.6 105.3 115.8 141.8 174.1 214.3 262.7 +/- 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) 5.6 17.5 32.0 54.8 59.9 81.5 108.9 142.2 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 1.3 1.5 1.9 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

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 1.3 1.5 1.9 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, 2014 29.2 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

Risks

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 90 80 70 60 50 40 30 20 10 0 25.6 27.3 29.0 30.8 32.5 34.2 36.0 37.7 39.4 41.2 42.9 FX effects on Net Profit and Historical trend of FX rates ( m) 1.2 1 0.8 Financial Risks Not perfectly hedged from FX fluctuations FX rates significantly varied in the past years 0.6 1.0 0.0 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

Q&A

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

Appendix 1: Consolidated Income Statement Historical Data Consolidated Income Statement m 2010A 2011A 2012A Net sales 214.3 291.2 375.9 % growth 40.8% 35.9% 29.1% Cost of goods sold (129.9) (183.0) (238.5) Gross profit 84.4 108.2 137.4 Fulfillment costs (21.5) (29.6) (32.7) Sales and marketing costs (24.7) (31.5) (42.1) EBITDA pre-corporate costs 38.2 47.0 62.6 % 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 18.8 24.1 32.1 % 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 15.0 16.4 18.9 % growth 69.8% 9.4% 15.1% % revenues 7.0% 5.6% 5.0% Result of equity investments 0.0 0.0 (.37) Financial income 1.0 1.2 1.6 Financial expenses (1.1) (1.2) (3.5) Profit before tax 14.9 16.5 16.6 % 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 9.1 10.0 10.2 % growth 122.5% 9.7% 1.8% % revenues 4.3% 3.4% 2.7% of which: Attributable to owners of the Parent 9.1 10.0 10.2 EBITDA excluding incentive plan costs 22.5 28.2 36.7 % growth 35.1% 25.6% 29.9% % revenues 10.5% 9.7% 9.8% Basic earnings per share 0.18 0.19 0.18 Diluted earnings per share 0.17 0.18 0.17 Back

Appendix 2: Consolidated Balance Sheet Historical Data Consolidated Balance Sheet m 2010A 2011A 2012A Non-current assets Property, plant and equipment 8.4 19.3 29.0 Intangible assets with finite useful life 7.1 12.2 19.5 Equity interests in associates 0.0 0.0 0.1 Deferred tax assets 5.5 4.8 6.1 Other non-current financial assets 0.5 0.6 0.7 Total non-current assets 21.5 36.9 55.5 Current assets Inventories 76.3 101.9 138.2 Trade receivables 9.4 8.2 13.1 Other current assets 7.3 4.7 5.0 Cash and cash equivalents 24.2 22.7 35.8 Current financial assets 5.1 5.5 6.1 Total current assets 122.3 143.0 198.2 Total assets 143.8 179.9 253.6 Shareholders Equity Share capital 0.5 0.5 0.6 Reserves 64.4 68.3 77.3 Retained earnings/losses carried (5.4) 3.8 13.8 Consolidated profit for the year 9.1 10.0 10.2 Equity attributable to equity holders of the Parent 68.7 82.6 101.8 Equity attributable to Third Parties 0.0 0.0 0.0 Total consolidated equity 68.7 82.6 101.8 Non-current liabilities Medium-long term financial liabilities 0.8 11.5 15.1 Employee benefits 0.2 0.2 0.2 Provisions for risks and charges 0.1 0.0 0.0 Deferred tax liabilities 0.1 0.1 0.1 Total non-current liabilities 1.2 11.8 15.4 Current liabilities Bank loans and other current financial payables 5.6 2.5 12.0 Provisions for risks and charges 0.9 0.2 0.3 Trade payables 48.9 62.8 96.8 Tax liabilities 2.4 0.3 1.3 Other payables 16.0 19.7 26.1 Total current liabilities 73.8 85.5 136.4 Total consolidated equity and liabilities 143.8 179.9 253.6 Back

Appendix 3: Consolidated Income Statement Forecast Consolidated Income Statement m 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Net Sales 455.7 576.6 714.9 886.7 1100.2 1306.8 1552.7 1845.6 2194.5 2610.2 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 42.3 46.3 57.9 72.6 91.2 90.2 108.4 130.1 156.3 187.8 Rents (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) Gross profit 171.0 207.7 257.0 318.4 395.1 450.3 535.3 636.8 757.9 902.4 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 44.6 53.8 73.4 100.7 135. 152.5 192.7 241.1 299.1 368.6 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 21.4 19.1 29.1 53.9 86.8 108.8 154.0 204.9 261.6 328.7 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 18.4 16.1 26.1 51.1 84.1 106.2 151.5 202.5 259.3 326.6 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) 11.0 9.2 15.8 32.8 55.1 70.2 101.3 136.2 175.2 221.2 Net earnings margin 2.4% 1.6% 2.2% 3.7% 5.0% 5.4% 6.5% 7.4% 8.0% 8.5% Back

Appendix 4: Consolidated Balance Sheet Forecast Consolidated Balance Sheet m 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Receivables 16.2 20.5 25.5 31.6 39.2 36.3 43.1 51.3 61.0 72.5 Inventories 180.5 226.8 284.6 357.3 448.4 538.6 647.0 777.1 933.4 1121.2 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 6.2 7.8 9.7 12.0 14.9 13.8 16.4 19.5 23.2 27.6 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 66.4 82.3 105.5 135.1 172.8 197.1 241.2 294.8 359.9 439.1 y-o-y% 24.0% 28.2% 28.0% 27.9% 14.1% 22.4% 22.2% 22.1% 22.0% Intangible assets 59.9 55.4 47.2 38.7 30.5 18.5 12.8 11.1 9.8 7.8 Tangible assets 34.6 36.8 34.1 30.5 26.0 31.0 35.7 40.3 44.3 47.7 Financial investments 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 Fixed assets 95.2 93.0 82.1 69.9 57.3 50.3 49.3 52.2 54.8 56.3 Net Invested Capital 167.1 180.8 193.1 210.5 235.6 252.8 296.0 352.4 420.2 500.8 Net Financial Position 15.5 20.1 2.3 (13.2) (43.2) (96.2) (154.3) (234.2) (341.4) (482.1) Back

Appendix 5: Ratio Analysis Data Duration ratios 2010A 2011A 2012A Days receivable 16 10 13 Days payable 128 128 145 Days inventory 281 278 303 Cash cycle 169 161 171 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 -0.16-0.08-0.06 Coverage ratio 4.51 3.00 2.41 Times interest earned 54.8x 50.8x 34.1x Back

Appendix 6: Sales Growth Rate Estimates 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Population (bn) 7.2 7.2 7.3 7.4 7.5 7.6 7.6 7.7 7.8 7.9 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) 2.5 2.7 3.0 3.3 3.6 3.9 4.3 4.7 5.2 5.7 E-commerce buyers (bn) 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.6 1.7 1.9 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 221 237 254 273 293 303 314 325 337 348 1st 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

Appendix 7: Capex Forecast Intangible assets 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Beginning net intangible assets 19.5 25.1 24.5 20.2 15.5 11.2 3.1 1.2 3.3 5.9 Amortization rate 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% 32.7% Capex 17.8 20.0 23.9 24.7 25.4 18.3 20.8 23.4 26.1 29.0 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 35 31 27 23 19 15 12 8 4 Net intangible assets at the end of the year 60 55 47 39 31 19 13 11 10 8 Fixed assets 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Beginning net fixed assets 29.0 34.6 36.8 34.1 30.5 26.0 31.0 35.7 40.3 44.3 Depreciation rate 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% Capex 12.7 12.5 9.6 9.9 10.2 18.3 17.0 15.6 14.1 12.4 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 34.6 36.8 34.1 30.5 26.0 31.0 35.7 40.3 44.3 47.7 Back

Appendix 8: Optimal Capital Structure 2,600 12.0% DEBT/TOTAL VALUE WACC Ev ( m) 2,400 11.0% 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 1,600 10.0% 9.0% 8.0% 6% 7.85% 2,320 7% 7.94% 2,268 1,400 7.0% 8% 7.94% 2,269 9% 7.94% 2,269 1,200 6.0% 10% 8.01% 2,232 1,000 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 5.0% Enterprise Value ( m) WACC Back

Appendix 9: Monte Carlo Simulation Variable Distribution Mean Standard deviation g TV Normal 0.025 0.1% Growth in internet penetration Normal 0.084 1.0% Percentage of e-commerce buyers Normal 0.333 1.0% Annual growth of AOV Normal 0.073 1.0% Results Mean 34.03 Standard deviation 2.28 Min 27.28 Max 42.60 Back

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 5 4 3 2 1 0 Bargaining power of suppliers Bargaining power of clients/customers Competitive rivalry within the industry Back