Delta Galil Industries Ltd. · TASE:DELG

Delta Galil Industries — Q4 2016 Earnings Presentation

24 slides from Delta Galil Industries's earnings presentation, 2017

  1. Slide 1: Results Overview Q4 2016

    sae GALI i oe LTD. —- x , : Ss RESULTS OVERVIEW- «

  2. Slide 2: Results Overview Q4 2016 (Hebrew disclaimer)

    ‫האמור במצגת בכל הקשור לניתוח פעילותיה של החברה הינו תמצית בלבד‪ ,‬ועל מנת לקבל תמונה מלאה של פעילות החברה ושל הסיכונים‬ ‫עימם מתמודדת החברה‪ ,‬יש לעיין בדיווחיה השוטפים של החברה לרבות בדוח הרבעוני לתקופה שהסתיימה ביום ‪ 31‬בדצמבר ‪.2016‬‬ ‫בין היתר‪ ,‬העובדות והנתונים ששימשו בסיס למידע המפורט במצגת

  3. Slide 3: Record 4th Quarter and Year

    RECORD 4TH QUARTER AND YEAR ALL TIME HIGHEST SALES AND OPERATING PROFIT FOR Q4: $ 376M SALES, $ 32M OPERATING PROFIT ANNUAL ALL TIME HIGHEST SALES $ 1,179M ALL TIME HIGHEST OPERATING PROFIT $ 83.2M ALL TIME HIGHEST OPERATING CASH FLOW $ 76.6M RESULTS OVERVIEW Q4 2016 3

  4. Slide 4: 2016 Achievements: Financial Results Q4 2016

    2016 ACHIEVEMENTS FINANCIAL RESULTS Q4 2016 DELTA CONCLUDES THIS YEAR WITH PARTICULARLY STRONG QUARTER SALES UP EBIT UP 31% 36% 80%( INCLUDING ONE-TIME ITEMS) ORGANIC SALES GROWTH EBIT GROWTH EXCL. DELTA PREMIUM BRANDS 3% 32% RESULTS OVERVIEW Q4 2016 4

  5. Slide 5: 2016 Achievements: Financial Results 2016

    2016 ACHIEVEMENTS FINANCIAL RESULTS 2016 SALES UP EBIT UP 9% 10% 24%( INCLUDING ONE-TIME ITEMS) STRONG OPERATING CASH-FLOW EBIT GROWTH EXCL. DELTA PREMIUM BRANDS $76.6M 6% RESULTS OVERVIEW Q4 2016 5

  6. Slide 6: 2016 Initiatives: Operational

    2016 INITIATIVES OPERATIONAL INVESTED IN GROWING OUR PRODUCTION CAPACITY Opened a new VIETNAMESE MANUFACTURING FACILITY Opened a new DYE HOUSE IN EGYPT Commenced production in our new FACTORY IN EL-MENIA Substantially increased our SEAMLESS JV CAPACITY IN CHINA NEW ISRAEL HEADQUARTERS IN CAESAREA Co

  7. Slide 7: 2016/17 Initiatives: Delta Premium Brands

    2016/17 INITIATIVES DELTA PREMIUM BRANDS • IMPLEMENTED PHASE 1 OF THE CORPORATE RESTRUCTURING, reducing OH by $ 6M • STREAMLINE THE BUSINESS BY IMPLEMENTING COST SAVINGS AND EFFICIENCIES: • Consolidating distribution centers • Closing underperforming stores • Revamping sourcing matrix • Upgrading sy

  8. Slide 8: 2017 Initiatives: Delta Premium Brands

    2017 INITIATIVES DELTA PREMIUM BRANDS • IN PROCESS OF IMPLEMENTING PHASE 2 • 2017 WILL FOCUS ON STABILIZING & RESTRUCTURING THE BUSINESS, AND WILL ESTABLISH THE PLATFORM FOR FUTURE GROWTH: • Improving product for Spring 2018 • Launching new advertising campaign for 2018 RESULTS OVERVIEW Q4 2016 8

  9. Slide 9: 2016/17 Initiatives: E-Commerce Focus

    2016/17 INITIATIVES E-COMMERCE FOCUS ONGOING FOCUS ON OUR E-COMMERCE MARKET SHARE: • Implementing a new advanced digital platform for Delta Premium Brands (7 For All Mankind, Splendid & Ella Moss) • Increased sales to E-comm customers such as: Amazon, Zalando, Otto, ShopBob.com, Net-a-Porter, Bare N

  10. Slide 10: Q4 2016 Highlights

    Q4 2016 HIGHLIGHTS )$ MILLION( % change vs Q4 2016 Q4 2015 last year SALES UP 31% Sales 376.3 287.1 31% 31% ORGANIC SALES UP 3% Operating Profit % from sales 32.3 8.6% 17.9 6.2% 80% Operating Profit 32.3 23.7 36% OPERATING PROFIT UP 80% Excluding one-time items % from sales 8.6% 8.2% 80% EXCLUDING O

  11. Slide 11: 2016 Highlights

    2016 HIGHLIGHTS )$ MILLION( % change vs 2016 2015 last year 9% SALES UP 9% ORGANIC SALES DOWN 2% Sales Operating Profit 1,179.2 85.3 1,080.0 69.0 9% 24% % from sales 7.2% 6.4% Operating Profit OPERATING PROFIT UP 24% 83.2 75.5 10% Excluding one-time items % from sales 7.1% 7.0% EXCLUDING ONE-TIME IT

  12. Slide 12: Q4 Sales and EBIT by Segment

    Q4 SALES AND EBIT BY SEGMENT ($ THOUSANDS) SALES EBIT Q4 2016 Q4 2015 % change Q4 2016 Q4 2015 Delta USA 126,465 122,285 3% 10,153 6,762 % from segment sales 8.0% 5.5% Global Upper Market 69,385 74,577 (7%) 8,773 7,716 % from segment sales 12.6% 10.3% Schiesser 56,290 53,437 5% 7,932 3,991 % from se

  13. Slide 13: 2016 Sales and EBIT by Segment

    2016 SALES AND EBIT BY SEGMENT ($ THOUSANDS) SALES EBIT 2016 2015 % change 2016 2015 Delta USA 461,470 491,013 (6%) 30,764 29,961 % from segment sales 6.7% 6.1% Global Upper Market 278,079 288,002 (3%) 31,100 25,838 % from segment sales 11.2% 9.0% Schiesser 195,864 185,458 6% 13,595 13,880 % from se

  14. Slide 14: Sales Analysis by Geographic Area

    SALES ANALYSIS BY GEOGRAPHIC AREA )$ THOUSANDS( Q4 YTD 2016 % of sales 2015 % of sales % change 2016 % of sales 2015 % of sales % change U.S.A 208,272 55% 151,620 53% 37% 641,582 55% 621,363 57% 3% Europe 54,914 15% 39,179 14% 40% 181,342 15% 154,349 14% 17% (excluding Germany) Germany 52,278 14% 45

  15. Slide 15: Segmental Results on a Quarterly Basis

    SEGMENTAL RESULTS ON A QUARTERLY BASIS EXCLUDING ONE TIME ITEMS )$ THOUSANDS( 2015 2016 TRAILING TWELVE MONTHS Q4 Q1 Q2 Q3 Q4 EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES Delta USA 6,762 122,285 6,871 112,758 5,052 109,447 8,692 112,800 10,153 126,465 30,764 461,470 % from sales

  16. Slide 16: Capital Expenditures

    CAPITAL EXPENDITURES INVESTING IN OUR FUTURE GROWTH )$ MILLION( 45.9 40.4 CAPEX MANUFACTURING (MAINLY VIETNAM FACTORY) 26.1 SCHIESSER* 4.5 ISRAELI MARKET 3.8 OFFICES AND SHOWROOMS 6.9 OTHERS 4.6 TOTAL 45.9 2015 2016 *EXCLUDING MANUFACTURING RESULTS OVERVIEW Q4 2016 16

  17. Slide 17: Balance Sheet

    BALANCE SHEET STRONG BALANCE SHEET POST ACQUISITION )$ MILLION( % FROM % FROM DEC. 31 2016 DEC. 31 2015 TOTAL TOTAL Cash and cash equivalents 83.7 9% 168.1 21% $84M CASH ON HAND Other current assets Total current assets 406.7 490.4 45% 54% 327.9 495.9 41% 62% Non current assets 423.1 46% 302.3 38% $

  18. Slide 18: Financial Indicators

    FINANCIAL INDICATORS 31.12.2016 31.12.2015 Current ratio* 1.85 2.53 Quick ratio* 0.97 1.53 Days of Sales Outstanding 37 33 Days Payable Outstanding 39 46 Inventory Days** 88 89 Operating cash flow - Q4 ($ million) 61.1 60.3 Operating cash flow - YTD ($ million) 76.6 70.5 EBITDA - Q4 ($ million) 39.2

  19. Slide 19: Net Debt / EBITDA

    NET DEBT / EBITDA MAINTAINING ADEQUATE LEVERAGE 2.0 1.8 1.6 1.4 0.8 0.7 0.7 0.7 Jun. 2012 Jul. 2012 Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Sep. 2016 Dec. 2016 after after DGPB Schiesser acquisition acquisition * Proforma EBITDA was calculated based on Last Trailing 12 Months RESULTS OVERVIEW Q4 201

  20. Slide 20: Diversified Portfolio

    DIVERSIFIED PORTFOLIO % FROM SALES (FOR Q4 2016 vs Q4 2015) Q4 2016 Q4 2015 BUSINESS SEGMENTS DELTA USA Delta Premium Brands GLOBAL UPPER MARKET SCHIESSER Delta Israel 34% 21% 18% 15% 12% INCREASE OUR DIVERSIFICATION DELTA USA GLOBAL UPPER MARKET SCHIESSER Delta Israel 42% 26% 19% 13% BRAND / PRIVAT

  21. Slide 21: 2017 Guidance

    2017 GUIDANCE EXCLUDING ONE TIME ITEMS BASED ON EX-RATES: EURO/USD 1.06; USD/NIS 3.75 )$ MILLION EXCEPT PER SHARE DATA( % INCREASE 2017 GUIDANCE 2016 ACTUAL 2017 GUIDANCE COMPARED TO 2016 ACTUAL Sales 1,179 1,330 - 1,370 13% - 16% Organic Sales 1,070 1,070 - 1,100 0% - 3% EBIT 83.2 86 - 91 3% - 9% E

  22. Slide 22: 2017 Guidance Assumptions

    2017 GUIDANCE ASSUMPTIONS DGPB Projected Sales $ 270M; EBIT $5-8M Projecting Weaker Q1 Sales and EBIT due to seasonality of DGPB and due to timing of orders in other business segments Second half of 2017 expected to be stronger than last year 2017 CAPEX forecast of $ 30M RESULTS OVERVIEW Q4 2016 22

  23. Slide 23: Future Growth

    FUTURE GROWTH OUR VIETNAMESE FACTORY will reach full capacity in H2 2018 OUR BRANDED BUSINESS will expand into new geographical area with a focus on Asia UPGRADING & EXPANDING OUR MANAGERIAL TALENT POOL is a main focus – the addition of Gil Shimon being the most recent example INITIATIVES IMPLEMENTE

  24. Slide 24: Thank You

    THANK YOU

Delta Galil Industries — Q4 2016 Earnings Presentation on 6ix