Industria De Diseno Textil, S.a. · BME:ITX
Industria De Diseno Textil — FY2018 Earnings Presentation
52 slides from Industria De Diseno Textil's earnings presentation, Mar 13, 2019
Slide 1: 2018 Results
2018 Results 13 March 2019 Full Year 2018 1
Slide 2: Disclaimer
Disclaimer This document and the information herein does not constitute an offer to sell, to buy or to exchange, nor an invitation to make an offer to buy, to sell or to exchange, nor a recommendation or advice, regarding any security issued by the Inditex Group. This document contains forward-looki
Slide 3: Overview
Overview Full Year 2018 3
Slide 4: 2018: Continue developing our long term strategic initiatives
2018: Continue developing our long term strategic initiatives Highly differentiated model at the forefront of fashion and sustainability Global fully integrated Store & Online Unique customer experience Strong cash generation and lower capital intensity Global growth opportunities Full Yea
Slide 5: 2018: Strong operating performance
2018: Strong operating performance Satisfactory sales growth +7% in local currencies LFL sales +4% Online sales +27% to €3.2 billion (12% of sales / 14% in markets with online) EBITDA €5.5 bn, +11% in local currencies Accelerating free cash flow New dividend policy. Proposed dividend inc
Slide 6: Unique business model: Global fully integrated Store & Online
Unique business model: Global fully integrated Store & Online Full Year 2018 6
Slide 7: Unique business model: Global fully integrated Store & Online
Unique business model: Global fully integrated Store & Online Unique customer experience Central inventory Distribution to all stores worldwide twice a week Highly differentiated stores: 90% of store portfolio optimised 2012-2018 Global online same day/next day Full Year 2018 7
Slide 8: Strength of business model reflected in LFL consistency
Strength of business model reflected in LFL consistency +4% LFL on a demanding comparable Positive LFL in both stores and online Positive LFL across all geographical areas and concepts Full Year 2018 8
Slide 9: New space in prime locations globally grew 8% (4.7% Net)
New space in prime locations globally grew 8% (4.7% Net) Full Year 2018 9
Slide 10: Store optimisation a key competitive advantage
Store optimisation a key competitive advantage Store optimisation 2012-2018 Gross openings 3,364 Refurbishments 2,374 Enlargements 1,019 Absorptions (1,401) Full Year 2018 10
Slide 11: Highly prominent and differentiated stores 2018
Highly prominent and differentiated stores 2018 Corso Vittorio Emanuele, Milano Full Year 2018 11
Slide 12: Highly prominent and differentiated stores 2018
Highly prominent and differentiated stores 2018 Boulevard Haussmann, Paris Full Year 2018 12
Slide 13: Highly prominent and differentiated stores 2018
Highly prominent and differentiated stores 2018 Karl Johans Gate, Oslo Vittorio Emanuele, Milan Full Year 2018 13
Slide 14: Highly prominent and differentiated stores 2018
Highly prominent and differentiated stores 2018 Gran Vía, Bilbao Full Year 2018 14
Slide 15: Highly prominent and differentiated stores 2019
Highly prominent and differentiated stores 2019 Hudson Yards, New York Vittorio Emanuele, Milan Full Year 2018 15
Slide 16: Seamless Store & Online integration
Seamless Store & Online integration Stratford, Click & Collect, Zara Corso London Vittorio Emanuele Milano Full Year 2018 16
Slide 17: Sector leading online sales
Sector leading online sales Global online €3.2 billion in sales in 2018, +27% 12% of sales / 14% in markets with online sales Important launches in 2019 Full Year 2018 17
Slide 18: 2020 Global online
2020 Global online Full global integration Central inventory + Online stockrooms + Store network Same day delivery metropolitan areas / Next day global standard Full Year 2018 18
Slide 19: Financial Summary
Financial Summary Full Year 2018 19
Slide 20: Full Year 2018
Full Year 2018 € million FY18 FY17 18/17 LC Net sales 26,145 25,336 3% 7% Gross profit 14,816 14,260 4% 8% EBITDA 5,457 5,277 3% 11% EBIT 4,357 4,314 1% 9% Net income 3,444 3,368 2% 12% Good operating performance Full Year 2018 20
Slide 21: Satisfactory sales growth
Satisfactory sales growth € million FY18 FY17 18/17 Net sales 26,145 25,336 3% +7% sales growth in local currencies Strong LFL performance Euro strength vs. all key currencies Full Year 2018 21
Slide 22: Currency impact on sales
Currency impact on sales -3.5% currency on sales in FY2018 At current exchange rates, currency expected to be slightly positive in FY2019 1% -1% -3% -5% 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019E 2Q2019 Full Year 2018 22
Slide 23: Global Store & Online sales in 2018
Global Store & Online sales in 2018 45% Europe ex-Spain 16% Spain 23% 16% Asia & Americas RoW Full Year 2018 23
Slide 24: Disciplined execution shown in gross margin
Disciplined execution shown in gross margin FY18 FY17 18/17 Gross margin 56.7% 56.3% +39 bps Strong execution of the model Gross profit growth of +4% to €14.8 bn Sustained commercial policies Full Year 2018 24
Slide 25: Tight control of operating expenses
Tight control of operating expenses € million FY18 18/17 Operating expenses 9,329 4% Full Year 2018 25
Slide 26: Depreciation & Amortisation
Depreciation & Amortisation € million FY18 FY17 18/17 Depreciation & Amortisation (1,100) (963) 14% FY17 includes sale of 15 premises FY18 store absorption costs provisioned in 2017 impairment Full Year 2018 26
Slide 27: Flexible business model
Flexible business model € million FY18 18/17 Inventory 2,716 1% Receivables 820 5% Payables (5,251) 4% Operating working capital (1,715) 8% Net Cash & Equivalents 6,705 5% Full Year 2018 27
Slide 28: Cash flow
Cash flow € million FY18 FY17 18/17 Cash from operations 4,029 3,961 2% CAPEX - Ordinary 1,512 1,545 (2%) Dividends 2,335 2,127 10% Net Cash & Equivalents 6,705 6,387 5% Full Year 2018 28
Slide 29: IFRS 16
IFRS 16 Starting FY19 Changes in presentation, no impact on cashflow or business IFRS 16 will result in: An estimated increase of 2-4% in FY19 net income vs former IAS 17 Lease liabilities of €6.5bn-€6.9bn We will provide further details prior to the publication of 1Q19 results Full Year
Slide 30: Concepts
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Slide 31: Zara & Zara Home
Zara & Zara Home Inditex has decided to integrate the reporting of Zara Home operations into Zara due to the increasing synergies The goal is to leverage operational and brand management of the store and online platform in a combined manner We plan to progressively incorporate Zara Home produc
Slide 32: Store & Online sales by concept
Store & Online sales by concept Sales Pull&Bear Massimo Dutti Bershka Stradivarius Oysho Zara Uterque Full Year 2018 32
Slide 33: EBIT by concept
EBIT by concept € million EBIT EBIT/ sales ROCE Zara + Zara Home 3,122 17% 28% Pull&Bear 300 16% 48% Massimo Dutti 258 14% 36% Bershka 327 15% 50% Stradivarius 259 17% 50% Oysho 86 15% 40% Uterqüe 5 5% 11% Total EBIT 4,357 17% 31% Full Year 2018 33
Slide 34: Concepts
Concepts Continued growth for the concepts Strong performance of Pull&Bear and Stradivarius Full Year 2018 34
Slide 35: Outlook
Outlook Full Year 2018 35
Slide 36: Strategic initiatives
Strategic initiatives Global fully integrated Store & Online 2012 2018 2020e Store optimisation plan Global Online +27% Strong growth opportunity *Larger more prominent stores €3.2 bn 12% of sales *Enlargements/Absorptions *All key global flagships/New Images Global online Zara online globally Globa
Slide 37: Global growth opportunities
Global growth opportunities Highly differentiated business model Global fully integrated Store & Online Unique customer experience Strong cash flow generation and lower capital intensity Strong growth opportunities Full Year 2018 37
Slide 38: Global online
Global online All key markets same day/next day Full Year 2018 38
Slide 39: Online launch of Zara in Brazil on 20 March
Online launch of Zara in Brazil on 20 March Full Year 2018 39
Slide 40: Online launches of Zara in Middle East in May
Online launches of Zara in Middle East in May East Nanjing Road Full Year 2018 40
Slide 41: Store & Online: Campaign 19
Store & Online: Campaign 19 Photography Steven Meisel, Art Direction Fabien Baron / Karl Templer Full Year 2018 41
Slide 42: Store & Online: Collection 01
Store & Online: Collection 01 East Nanjing Road Featuring Giorgia Tordini Full Year 2018 42
Slide 43: Store & Online: Shades of Beige
Store & Online: Shades of Beige Photography Gregory Harris. Featuring Tim Schuhmacher Full Year 2018 43
Slide 44: Store & Online: Kids Campaign
Store & Online: Kids Campaign East Nanjing Road Photography Mario Sorrenti Full Year 2018 44
Slide 45: Store & Online: Join Life collection
Store & Online: Join Life collection East Nanjing Road Full Year 2018 45
Slide 46: Strong differentiation of stores
Strong differentiation of stores Global fully integrated Store & Online Highly differentiated stores: Larger and more prominent RFID Click & Collect Full Year 2018 46
Slide 47: Sustainability & Circular Economy
Sustainability & Circular Economy Full Year 2018 47
Slide 48: New Dividend Policy
New Dividend Policy Predictable attractive shareholder remuneration Increase of ordinary payout to 60% from 50% A total bonus dividend of €1 per share to be paid in relation to FY2018, FY2019 and FY2020 Full Year 2018 48
Slide 49: +17% Dividend increase for FY18
+17% Dividend increase for FY18 100 Total 88 Total 80 75 22 21 60 Bonus 40 Ordinary 66 54 € cents 20 0 2017 2018 € 44 cents to be paid on 2 May and on 4 November 2019 Full Year 2018 49
Slide 50: +17% Dividend increase for FY18
+17% Dividend increase for FY18 2001-2018: 24% CAGR Accumulated dividends of ~€20bn paid out 88 75 68 60 52 € € cents 48 DPS 44 36 32 21 21 24 16.8 13.4 7 9.6 2.2 2.8 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Full Year 2018 50
Slide 51: FY2019 Outlook
FY2019 Outlook Global fully integrated Store & Online Strong organic growth. Increased differentiation of the model LFL sales are expected to increase 4%-6% Lower capital intensity required. Ordinary Capex c.€1.4 bn 5%-6% gross new space in prime locations. c.300 gross openings / selective
Slide 52: 2018 Results
2018 Results 13 March 2019 Full Year 2018 52
Industria de Diseño Textil, S.A. (Inditex) — FY2018 Earnings Presentation on 6ix