analyst presentation –fy 2010 march1, 2011 · balanced product portfolio strong international...

COMPANY PRESENTATION │1

ANALYST PRESENTATION – FY 2010March 1, 2011


Disclaimer

This document contains forward-looking statements, which are based on the current estimates and assumptions by the management of TOM TAILOR Holding AG. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by TOM TAILOR Holding AG and its affiliated companies depend on a number of risks and uncertainties and may therefore differ materially from the forward-looking statements. Many of these factors are outside TOM TAILOR Holding AG’s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and others involved in the marketplace. TOM TAILOR Holding AG neither plans nor undertakes to update any forward-looking statements.


Differentiation criteria from competitors

HIGHLIGHTS FY 2010Dieter Holzer


TOM TAILOR highlights FY 2010

Sales development significantly up to € 348m (+16%)

Adjusted EBITDA up to € 40m (+6%)

Significant jump in adjusted net income up to € 12.4m versus € 0.6m

Controlled distribution area expanded by 71 retail stores and 333 shop-in-shops

Retail accounts for 31% (PY: 25%) of sales on the back of strong growth dynamics


TOM TAILOR delivered more than promised

Actual performance 2010

+ 15.8 %

+ 5.9 % growth

€ 25.4m

Guidance 2010

> 12 %

Moderate increase in absolute terms

€ 21 – 23m

TOM TAILOR on track for future profitable growth

€ 52.1m€ 52 – 57m

Sales

EBITDA

Capex

Net debt

ü

ü

ü

€ 12.4mSlightly positive in absolute terms Adjustednet income ü


TOM TAILOR

OPERATING HIGHLIGHTS FY 2010Dieter Holzer


87

158

2009 2010

Controlled distribution area expansion FY 2010

Retail Shop-in-shops

+71

Germany

19

International

52

New openings

Retail

+333

Germany

263

International

70New openings

Shop-in-shops

Number of retail stores Number of shop-in-shops

Total selling space 20.000 sqm 31.000 sqm 42.500 sqm 53.300 sqm

1.4411.108

2009 2010+55%

+25%


Joint venture Sportina

Joint venture Sportina as a model for accelerated international growth

n Take-over of 23 franchise stores in segment retail

n Objective: speed up retail expansion in Southeast Europe

(Slovenia, Croatia, Bosnia, Serbia, Bulgaria)

n Usage of local know-how of a reliable partner who is

successful in these markets for many years

n About 25 new stores until end of 2013

Accelerated growth in Southeast Europe: Joint venture Sportina


134

267

453

56

2007 2008 2009 2010

CAGR 2007-2010: 62%

21.816.6

8.85.1

2007 2008 2009 2010

¢ Internet relaunch in 2010

¢ Start of social marketing

activities to promote the brand

¢ Launch of the TOM TAILOR App –

casual fashion to go!

¢ E-commerce supports the TOM TAILOR

brand: 16.9m visitors in 2010

¢ E-commerce sales expected to represent

10% of overall sales in the medium term

¢ Further internationalization of e-

commerce

Systematic expansion of e-shop

Number of registered customers (in thousands)

Sales in €m Highlights

+73%

+31%

+88%

CAGR 2007-2010: 101%

+139%

+99%

+70%


Sourcing situation FY 2010

Situation TOM TAILOR response

Temporarily weak Euro

¢ Smart pricing across all collections by

keeping starting price points

¢ Bundling of production capacities

¢ Earlier commitment to secure raw

material availability

¢ Diversification of production schedule

Higher freight costs due to

longer lead times

Shortage of production capacity

and increased labour costs

Raw material price increases

Longterm and stable relationship with suppliers pays off


Diversified and balanced sourcing portfolio

TOM TAILOR sourcing 2011:

¢ Strengthen management capacities at the sourcing front in Asia

¢ Balanced split between sourcing countries

¢ Further concentration on core suppliers

Overall goal: Get the right product in the right quality and quantity at the right

time to the point of sale!

China

32%

India

20%

Europe

10%

Indonesia

13%

Bangladesh

18%

Others

7%

TOM TAILOR sourcing country split 2010

Based on FOB turnover



OUTLOOKDieter Holzer


Outlook 2011: Value creation continues

Net sales: > € 400m

EBITDA: € 48m - € 51 m



MANAGEMENT target 2014

Doubling of sales to approx. € 700m

Increase in EBITDA to approx. € 100m

How?

¢ Consequent rollout of the TOM TAILOR business model

¢ Further internationalization

¢ Ongoing retail expansion

¢ Potential line extensions

Realization of significant economies of scale


Licences

Long term growth potential based on three pillars

Growth potential

Sales channels Geographics Products

Retail

store

expansion

Controlled

WholesaleExisting markets

New markets

f.e. Poland,

Turkey

WOMEN

Casual and

Denim

Female

E-Commerce


TOM TAILOR at a glance

Balanced product portfolio Strong international presence Multi-channel distribution

WOMEN CASUALMEN CASUAL KIDS - MINIS - BABY Licenses/Accessories Denim FemaleDenim Male

Focus on core markets

MEN 38%

WOMEN

32%

KIDS &

MINIS 13%

Denim Male 9%Licenses

and other 1%

Total revenues € 347.7m (+ 15.8%)

Denim Female 7%

Casual

83%

Denim 16%

Germany

68%

International

32%

Stable sales split Germany/abroad

Wholesale/

69%Retail 31%

Figures for FY 2010 (compared to FY 2009)

Core markets

90%

Other markets

10%

Increasing share of Retail business

(+ 6% points)Increasing share of sales achieved

in core markets (+ 1% point)


TOM TAILOR

PRODUCT EXCELLENCEChristoph Rosa


Competitive advantages TOM TAILOR

¢ TOM TAILOR brand

¢ Strong brand awareness

¢ Clearly two brand with TOM TAILOR Casual and TOM TAILOR Denim

¢ Increasing penetration into women’s fashion market

¢ Business model

¢ Systematic and analytic design in combination with short lead-times

¢ Fast vertical, integrated system supplier with control over the entire value chain

¢ Focus on controlled distribution areas

¢ Growth potential

¢ Significant potential for future market share gains in existing markets

¢ Rollout of existing business model in new markets

¢ Economies of scale and cost dilution should lead to future profitable growth


Lifestyle matrix

Low High

JIL SANDER

TOM TAILOR USPs

Excl

usi

ve

segm

ent

Bri

dge

se

gmen

t

Med

ium

p

rice

se

gmen

t

Low

/ m

ediu

m

pri

ce

segm

ent

STRENESSE MAX MARA

ESCADAPRADA

BOGNER

HUGO BOSS

STRELLSON MARC O’POLO

TOMMY HILFIGER

STEFANEL

BONITA

GERRY WEBER

ESPRIT

BENETTON

MEXX

ZARA

MANGOSTREET ONE

CECIL

S. OLIVER

H&M

ORSAY

NEW YORKER

PIMKIE

BESTSELLER

GROUP

TAKKO

KIK

C&A

DIESEL

REPLAY

G-STAR

RALPH LAUREN

CLOSED

LERROS

TOM TAILOR:A premium lifestyle brand at affordable prices

¢ Strong market position in the

young lifestyle segment

¢ Primarily targeting the middle-

income consumer segment

with a highly attractive value-

for-money proposition

¢ Fashion Follower Concept

¢ “Act premium, sell volume”

¢ Strongly increasing consumer

acceptance and brand

recognition Fashion degree


Lean and vertical business model

Design

Technical preparation

Buying / purchasing

Product management

e.g. Women

Complete outsourcingof manufacturingand procurement

Centralisedwarehousing

systemPoints-of-sale

Product development Sourcing Logistics Distribution

Focus on core value added processes: product development and distribution

Track record for system expertise and meticulous supply chain management

Full information control across all

value chain processes

¢ Low fashion risk with 12 collections per year

¢ ~90% of purchasing in wholesale segment via pre-order system minimising stock risk

¢ Multi-channel distribution approach with focus on controlled distribution

¢ Outsourced to DHL with B2B portal ensuring 24/7 availability for business partners


Pro

du

ct c

ycle

–tim

e-to

-mar

ket

TOM TAILOR system leads to outperformance of the market

Co

llect

ion

dev

elo

pm

ent

¢Operational value chain allows for 12

collections per year for each product line

¢ Collection development jointly by designer and

market scout (4eye-principle)

¢ Systematic research of market intelligence and

identification of successful fashion trends

¢ Fast incorporation of market-proven fashion

styles

¢ “Bestseller-management”

Standard

process

Lead time

Spot style

Lead time ~23-26 weeks; up to 65% of collection

Lead time ~11 weeks; ~20-25% of collection

Lead time ~5 weeks; ~10-15% of collection

Fast

track

Retail like-for-like development

Textile market growth

(Source: Textilwirtschaft)

Retail LFL sales incl. e-commerce

-4.0%

0.0%3.0%

16.8%16.5%14.0%

20082009 2010



FINANCIAL HIGHLIGHTS FY 2010Dr. Axel Rebien


Profit & loss Q4 2010 TOM TAILOR Group:Accelerated growth momentum in Q4

+ 26.2%

+ 19.0%

-24.5%

- 23.4%

Key Figures Q4 2010

Sale

sG

ross

pro

fit

Rec

urr

ing

EB

ITD

AR

ecu

rrin

g

net

inco

me

(€m)

(€m)

(€m)

(€m)

Comments

¢Sales growth in both segments: Wholesale up 17.7% to € 61.4m, Retail up 43.1% to € 37.5m

¢First consolidation of Sportina stores has an impact of € 3.1m sales in segment Retail

¢Gross profit margin decreases from 48.4% to 45.6% mainly due to higher freight cost

¢Recurring EBITDA Wholesale hit by lower gross margin

¢Recurring EBITDA Retail up by 77.4% to € 8.0m

¢Decrease of recurring net income due to a lower operational result partly compensated by a better interest result of € 2.4m

78.4

Q4 2009 Q4 2010

98.9

37.9

Q4 2009 Q4 2010

45.1

14.3

Q4 2009 Q4 2010

10.8

7.7

Q4 2009 Q4 2010

5.9


Profit & loss FY 2010 TOM TAILOR Group:Significant growth in all lines

+ 15.8%

+ 16.1%

+ 6.1%

+ 1966.7%

Key Figures FY 2010

Sale

sG

ross

pro

fit

Rec

urr

ing

EB

ITD

AR

ecu

rrin

g

net

Inco

me

(€m)

(€m)

(€m)

(€m)

Comments

¢Sales growth clearly ahead of guidance

¢Growth driven by both Retail and Wholesale

¢TOM TAILOR growth strategy pays off

¢Gross profit margin at 46% on last year’s level

¢Cost of materials negatively influenced by higher transport cost, cotton prices and increasing wages

¢Reduction of margin in Wholesale segment offset by growth in the higher-margin Retail segment

¢Recurring EBITDA margin reaches 11,5% (2009: 12.6%)

¢Profitability effected by higher cost of materials as well as upfront costs for new stores

¢ Increase of operational result and significant reduction of interest expenses (impact +€ 9.7m) lead to jump of recurring net income up to €12.4m

300.2

2009 2010

347.7

137.7

2009 2010

159.8

37.8

2009 2010

40.1

0.6

2009 2010

12.4


Profit & loss Segment Wholesale:Gaining market share

+ 7.7%

- 9.0%

Key Figures Wholesale FY 2010

Sale

sR

ecu

rrin

g EB

ITD

A

(€m)

(€m)

Comments

¢Pleasant growth of 7.7%; Wholesale represents 69% of Group sales

¢Core markets are up 11.6% mainly driven by Germany, Austria and Switzerland. Although, all core markets increased compared to prior year

¢Within non core markets sales shift from Wholesale to Retail out of taking over Sportinastores in South East Europe and taking over former franchise stores in Hungary

¢Stabilization of Greater Russian markets in second half of FY 2010 due to a recovery of the economy and taking over of the distribution rights

¢Recurring EBITDA margin decreases from 12.8% to 10.8% due to sourcing impacts (lower gross margin)

¢Gross margin declined from 40.1% to 38.9% primarily due to higher freight costs in Q4

+ 4.6%

Gro

ss p

rofi

t

(€m)

223.7

2009 2010

241.0

89.7

2009 2010

93.8

28.6

2009 2010

26.0


Profit & loss Segment Retail:Segment reveals its potential

+ 37.5%

Gro

ss p

rofi

t

(€m)

¢ Stable growth margin development

+ 39.4%

+ 52.2%

Key Figures Retail FY 2010

Sale

sR

ecu

rrin

gEB

ITD

A

Comments

(€m)

(€m) ¢Expansion in the retail segment leads to impressive growth figure of almost 40%

¢ Lfl growth reaches 16.8% and clearly outperformes the German textile market (3%)

¢Segment Retail represents 31% of Group sales

¢E-commerce lfl-growth by 41.4% and represents 20% of Retail sales

¢Strong increase in recurring EBITDA despite higher pre-opening costs due to various store openings

¢Recurring EBITDA margin increases from 12.0% to 13.1%

¢Earnings expected to accelerate in this segment in the coming years

76.5

2009 2010

106.7

48.0

2009 2010

66.0

9.2

2009 2010

14.0


Capex FY 2010: Used for expansion in controlled distribution areas

Capex FY 2010

TOM

TA

ILO

R

Gro

up

Wh

ole

sale

Ret

ail

(€m)

(€m)

(€m)

Comments

¢Strong expansion of controlled distribution areas leads to Capex of € 25.4m

¢ Increase in Capex due to the new opening of 47 additional retail-stores

¢ Increase in Capex due to 333 additional shop-in-shops

11.5

2009 2010

25.4

9.5

2009 2010

12.5

2.0

2009 2010

12.9

¢Repair & Maintenance Capex €2.4m

¢ Investments and store equipment amount to €11.7m

¢Taking over of 23 former Sportina franchise stores included in total investments of €27.5m


Net income and EPS FY 2010:Convincing increase

Recurring net income Recurring EPS

(€m) (€)

Reported net income Reported EPS

(€m) (€)

0.6

2009 2010

12.4

0,12

2009 2010

0,87

-5.6

2009 2010

2.4

-1.13

2009 2010

0.15

> 20 x

> 7 x- + - +


Net debt FY 2010:Conservative financing post IPO

(€m)

143

20 13

Usage of IPO proceeds

(€m)

Net debt

110

14.3

13

Net debt/recurring EBITDA 4.9 1.3

IPO proceeds Reduction of

debt

Growth

Capex

Cost of IPO*

183.9

52.1

*Cash outs

- 131.8


Transparent and detailed profit view FY 2010

30.1

8.0

2.0

14.9

8.0

4.8

12.4

40.1

25.2

17.2

Reported

EBITDA

IPO

Cost in P&L

Other one-

off cost

Recurring

EBITDA

Depreciation Recurring

EBIT

Interest Recurring

EBTTaxes Recurring

net income


Outlook 2011: Growth & Profitability

Net sales: > € 400m

EBITDA: € 48m - € 51 m

Sales split: Wholesale ∼60% Retail ∼40%

Amortisation: PPA impact € 5.3m (€ 8.1m)

Interest expenses: decrease due to lower debt level



TOM TAILOR

QUESTIONS? – ANSWERS!


TOM TAILOR

APPENDIX


+ 333

Shop-in-shops

versus

Dec. 31, 2009

Retail Franchise Multi-labelE-commerce

158 in Europe 175 in Europe 1.441 in Europe ~6.000 worldwide

www.tom-tailor.de

www.tom-tailor.at

www.tom-tailor.nl

POS

(as of

Dec. 31, 2010)

Controlled

Distribution

+ 71 stores

versus Dec.

31, 2009

Increasing number

and proportion of

stores with revenue

share-concept

Lfl-growth

41.4% to

prior yearHighlights

Retail / B2C Wholesale / B2B

Shop-in-shops

Number of POS

remains stable

Focus on controlled distribution areas

http://www.tom-tailor.de

http://www.tom-tailor.at

http://www.tom-tailor.nl


Contact details Investor Relations

Please do get in touch with us:

TOM TAILOR HOLDING AG

Garstedter Weg 14

22453 Hamburg

Dr. Andrea RolveringHead of Investor Relations & Corporate Communications

Tel: +49 (0) 40 589 56 429Fax: +49 (0) 40 589 56 498Mobile: +49 (0) 172 399 59 13Email: [email protected]

analyst presentation –fy 2010 march1, 2011 · balanced product portfolio strong international...

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