Aeffe S.p.a. · MIL:AEF
Aeffe — Investor Presentation (March 2008)
52 slides from Aeffe's investor presentation, Mar 6, 2008
Slide 1: Aeffe Company Profile
ee cee ue euenert iteeaiauicniaet geaegataaas ee cee ue ceueeert ee ge cecueeeeeer | Sr cc lc PoUDberncemcnenonabbeneceeenennnnat feddeddeqaauaateestaase teats
Slide 2: Our History
Our History 1980 1983 1985 1994 1997 Alliance with Franco Opening of the first Alberta Licensing agreement with Licensing agreement with Aeffe S.p.A. is founded Moschino begins Ferretti boutique in Milan Jean Paul Gaultier Narciso Rodriguez 1999 2001 2002 2004 2005 Acquisition of majority Acquisitio
Slide 3: Unique Portfolio of International Luxury Brands
Unique Portfolio of International Luxury Brands Owned Licensed Strong brand personality Offering a broad range of products Philosophy Jean Paul Alberta Ferretti Gaultier2 di Alberta Ferretti Gaultier Product mix addressing most of high-end customers needs Strong international presence with further e
Slide 4: Complete and Complementary Brand Portfolio
Complete and Complementary Brand Portfolio Broad portfolio of 7 complementary brands High All positioned in the high-end of the market Medium Each with a unique appeal Image From the feminine elegance of Alberta Ferretti to the provocative collections of Jean Paul Gaultier Low Competing, both in ima
Slide 5: Alberta Ferretti – The Brand Value
Alberta Ferretti – The Brand Value Global brand, launched in 1981 Second largest brand with c.22% of total 2007 Group net sales Prêt-à-porter Beachwear Prêt-à-porter Loungewear Core value: contemporary feminine Runway elegance and glamour Since 1984, “Philosophy di Alberta Ferretti” brand Footwear B
Slide 6: Alberta Ferretti – The Products
Alberta Ferretti – The Products Broad range of products under the Alberta Ferretti brand 94% of sales still in the prêt-à-porter segment Rapidly expanding in footwear and leather goods (6% of sales in 2007) Underwear Prêt-à-porter Beachwear Platform for brand extension now in place Kids wear Accesso
Slide 7: Alberta Ferretti – Performance
Alberta Ferretti – Performance The Performance Strong topline growth momentum: (€m) +19.4% 63.0 +14.3% +14.3% 2006 vs. 2005 21.5% 52.8 46.2 19.8% +19.4% 2007 vs. 2006 19.1% Future brand extension will further fuel growth 2005A 2006A 2007A and profitability Net Sales % on total sales 7
Slide 8: Alberta Ferretti – Future Strategy
Alberta Ferretti – Future Strategy Development of existing collections both internally and through new partnerships aimed at brand extension: Women’s wear • • Alberta Ferretti and Philosophy shoes, bags and leather goods Lingerie • • Alberta Ferretti and Philosophy lingerie and beachwear Beachwear •
Slide 9: Moschino – The Brand Value
Moschino – The Brand Value Brand known for challenging fashion stereotypes Group’s largest brand with c.47% of Group 2007 total net sales Runway Core values: playful glamour Strong couture technique and culture Distinctive features of brand image: strong use of social themes. Accessories 9
Slide 10: Moschino – The Products
Moschino – The Products Complete range of products under the Moschino brand Eyewear 76% of Moschino sales still in women’s prêt-à- porter Footwear 13% of Moschino sales in footwear and leather Women’s Prêt-à-porter Men’s Prêt-à-porter goods Fragrances 11% of Moschino sales derive from royalties Watc
Slide 11: Moschino – Performance
Moschino – Performance The Performance 2007 vs 2006 increase is 9.0% (€m) +9.0% Strong growth momentum in core segments +7.0% 136.9 125.6 Prêt-à-porter: +9% 2007 vs. 2006 117.3 48.5% Footwear and leather goods: +32% 2007 vs. 47.2% 46.7% 2006 Royalties: +15% 2007 vs. 2006 2005A 2006A 2007A Net Sales
Slide 12: Moschino – Future Strategy
Moschino – Future Strategy Strong development of the shoes and bags collections with the brands Moschino, Moschino Cheap and Chic and Moschino Jeans Women’s wear • • • Increase and strengthening of Moschino license Men’s wear • • agreements, specifically eyewear, watches and fragrances Kids’ wear •
Slide 13: Pollini – The Brand Value
Pollini – The Brand Value Founded in 1953, Pollini is internationally acknowledged to represent the best tradition of Italian footwear and leather goods craftsmanship Represents c.18% of total 2007 Group net sales Footwear Bags Leather goods Core values: superior quality and design Accessories (“Mad
Slide 14: Pollini – The Products
Pollini – The Products The company’s core business since 1953 is the production of: Footwear Leather goods, specifically handbags Footwear “Studio Pollini” brand is the youth-oriented brand of the maison In 2003, introduction of prêt-à-porter product line, directed by Rifat Ozbek to improve Prêt-à-p
Slide 15: Pollini – Performance
Pollini – Performance The Performance Significant growth in revenues: (€m) +9.2% +12.8% 2006 vs. 2005 +12.8% 52.3 47.9 42.5 + 9.2% 2007 vs. 2006 18.0% 17.8% 17.6% Fastest growing areas were: Europe and Russia 2005A 2006A 2007A Net Sales % on total sales 15
Slide 16: Pollini – Future Strategy
Pollini – Future Strategy Develop existing collections, with strong focus on: Further develop shoes and bags under Pollini brand Shoes • • Platform for brand extension now in place: Leather goods • • Eyewear Scarves Women’s wear • Umbrellas Eyewear • • In process: Scarves • Fragrances • New stores o
Slide 17: Jean Paul Gaultier – The Brand Value
Jean Paul Gaultier – The Brand Value Jean Paul Gaultier is widely recognized as the “enfant prodige” of international couture, constantly reinventing the rules of fashion Since 1994, Aeffe produces and distributes the designer’s ready-to-wear collections Contributes c.8% to Group 2007 total net sale
Slide 18: Jean Paul Gaultier – The Products
Jean Paul Gaultier – The Products Group license covers exclusively worldwide production and distribution of ready-to-wear apparel for Jean Paul Gaultier and Gaultier2 brands New future projects include production of footwear Today, Jean Paul Gaultier brand is still focused on the Prêt-à-porter lines
Slide 19: Jean Paul Gaultier – Performance
Jean Paul Gaultier – Performance The Performance High growth in revenues: + 25%, 2006 vs. 2005 +10.3% +24.9% 23.7 +10.3% 2007 vs. 2006 21.5 17.2 Growth supported by significant growth across nearly 8.1% 8.1% all geographies 7.1% Far East: +72.4% FY 07 vs. FY 06 2005A 2006A 2007A Japan: + 61.2% FY 07
Slide 20: Jean Paul Gaultier – Future Strategy
Jean Paul Gaultier – Future Strategy Brand extension into footwear Women’s wear • • Rapid expansion of franchised stores over the next few years with 15-20 store openings, mainly in Europe and the Middle East Men’s underwear • New partnership agreements with importers (Middle East) Increased penetra
Slide 21: Tactic Brands
Tactic Brands Sport chic Innovative and print Fresh and feminine Key Characteristics intensive Ski and après-ski apparel Prêt-à-porter Beachwear Products Lingerie Fitness Luxury active wear Young couture High-end active wear Positioning % of 2007 Group’s 0.5% 0.6% 2.3% Revenues 21
Slide 22: License Expiry and Renewals
Licenses Renewals Negotiations in Advanced Stages Expiry 2008 2009 2011 2013 2015 In final stage of After 2009, the negotiation process agreement will be for renewal of automatically licensing renewed every season 22
Slide 23: Superior Design Capabilities
Superior Design Capabilities Top in-house designers with strong commercial focus Alberta Ferretti, Rossella Jardini, Rifat Ozbek Longstanding cooperation with leading international designers Alberta Ferretti Rossella Jardini Rifat Ozbek Jean Paul Gaultier Team: 10 people Team: 30 people Team: 12 peo
Slide 24: Flexible and Efficient Business Model
Flexible and Efficient Business Model Design R&D Complete outsourcing of production, translating into lower fixed costs Long term relationship with more than 500 selected third-party manufacturers(1) Distribution Purchasing At least 20 manufacturers available for each phase Ensures no bottlenecks in
Slide 25: Distinctive and Effective Communication Strategy
Distinctive and Effective Communication Strategy As % of 8.3% 8.2% 8.1% 3 pillars of communication strategy: Net Sales: 23.8 Dedicated public relations activities (€m) 21.8 20.1 Dedicated advertising campaigns Fashion shows and events Consolidated relationships with leading publications ensures opti
Slide 26: Future Strategy
Future Strategy 1 Enhance Distribution Boost Profitability Growth in Footwear 2 & Cash Generation and Leather Goods Improve 4 Brand Extension 3 Operating Efficiency 26
Slide 27: Untapped Growth Opportunities
Untapped Growth Opportunities (€m) Superior top-line growth across all business units expected to be driven by: Total: + 10.1%(1) p.a. Distribution: new DOS, more franchising and 293.2 more wholesale 266.1 241.9 Expanding presence in high growth potential markets: China, Far East, Middle East, Russi
Slide 28: Capturing Benefits of Operating Leverage Effect
Capturing Benefits of Operating Leverage Effect Rationalisation of supply chain in COGS footwear & leather goods + € 17.8 m Increase retail presence (€m) Product mix improvement 42.3 24.5 14.4% 10.1% Strict control of overheads 2005A 2007A 2009E SG&A (1) Fully exploit economies of scale EBITDA EBITD
Slide 29: Financial Overview
Financial Overview
Slide 30: FY 2007 Key Facts
FY 2007 Key Facts Consolidated Revenues +10.2% at € 293.2 m (+12.2% at constant exchange rates; +13.4% excluding also the effect of the termination of the Narciso Rodriguez licence) Consolidated EBITDA +19.8% at € 44.5 m (margin of 15.2%) (+21.7% at constant exchange rates), +28.5% at € 42.3 m net o
Slide 31: Net Sales Breakdown by Division
Net Sales Breakdown by Division FY 2007 Current Currencies FY 2006 Current Currencies (€m) 235.2 (€m) 214.3 214.3 46.3 200 200 41.5 150 73.8 150 68.5 100 74.5 100 45.1 40.8 65.5 15.8 16.3 50 23.3 50 70.0 21.0 14.6 63.5 10.8 20.8 17.4 0 0 Prêt à porter(1) Footwear & Leather Goods(1) Prêt à porter (1)
Slide 32: Net Sales Breakdown by Brand
Net Sales Breakdown by Brand FY 2007 Current Currencies FY 2006 Current Currencies (€m) (€m) 136.9 125.5 120 31.3 120 28.9 100 100 38.2 80 80 63.0 37.6 52.3 60 52.8 11.9 60 47.9 30.0 11.7 9.6 26.2 40 21.5 11.0 23.7 40 16.8 17.7 21.5 17.3 16.5 18.4 10.5 20 37.4 8.9 2.5 9.1 1.9 20 2.5 2.9 10.0 32.8 7.
Slide 33: Net Sales Breakdown by Region
Net Sales Breakdown by Region FY 2007 Current Currencies FY 2006 Current Currencies (€m) (€m) 113.0 104.1 100 22.6 100 22.1 80 80 69.7 35.3 60.1 32.8 60 17.7 60 16.5 20.8 36.8 34.0 21.7 32.3 33.0 40 40 20.2 22.1 5.7 18.5 21.8 3.0 19.3 6.9 8.1 11.9 12.7 13.1 13.8 20 2.5 8.6 20 8.9 3.9 9.5 34.3 8.2 3.
Slide 34: Net Sales Breakdown by Channel
Net Sales Breakdown by Channel FY 2007 Current Currencies FY 2006 Current Currencies (€m) 206.9 (€m) 200 200 187.1 37.1 34.2 150 150 70.0 64.8 100 100 71.3 34.3 66.3 29.4 19.8 19.2 50 50 17.8 16.5 65.5 15.0 12.7 1.4 2.3 58.7 16.6 4.6 15.5 4.3 4.4 4.1 17.1 15.1 2.9 0 3.7 0 Wholesale Retail Royalties
Slide 35: Mono-brand Stores Network
Mono-brand Stores Network DOS FY07 FY06 Europe 36 36 USA 1 1 Asia 38 38 Total 75 75 Franchising FY 07 FY06 Europe 41 33 USA 6 4 Asia 52 37 Total 99 74 35
Slide 36: Profitability Analysis
Profitability Analysis EBITDA(1): + 28.5% (€m) 36.9 42.3 28.8 Prêt-à-porter(1) EBITDA 15.7% 13.4% (€m) FY 06 FY 07 14.4% 32.9 12.4% (€m) 5.4 4.1 Footwear & Leather Goods(1) EBITDA 6.3% 7.2% FY 06 FY 07 FY 06 FY 07 (1) EBITDA EBITDA Margin (1) Net of non recurring items 36
Slide 37: Group Net Income and Income Taxes
Group Net Income and Income Taxes +62.2% FY Ending December 31, (€m) 2007A 2006A PBT 25.6 19.3 (€m) 12.94 Current Taxes (11.1) (7.4) 7.98 Deferred Taxes 0.6 (3.3) 4.4% Total Taxes (10.5) (10.7) 3.0% Effective Tax Rate 40.9% 55.6% FY 06 FY 07 Net Income Net income Margin 37
Slide 38: Summary Balance Sheet
Summary Balance Sheet IAS-IFRS FY2007 FY2006 Net Working Capital 51.5 44.0 Net Tangible Assets 71.2 69.9 Net Intangible Assets 171.8 175.1 Net Financial Assets 3.1 3.0 Severance Staff, Provisions & Others (63.4) (74.2) Net Capital Employed 234.2 217.8 Group Shareholders' Equity 166.6 76.0 Minorities
Slide 39: Summary Cash Flow
Summary Cash Flow IAS-IFRS FY2007 FY2006 PBT 25.6 19.3 Operating Cash Flow 23.1 33.0 Capital Expenditure (9.5) (3.9) Free Cash Flow 13.6 29.1 Cash Flows from Financing Activities (15.6) (20.8) Cash and cash equivalents at the beginning of the year 15.3 7.0 Cash Flow of the Period (2.0) 8.3 Cash and
Slide 40: Appendices
Appendices 40
Slide 41: Company Profile
Company Profile Organisational Structure Ownership Structure (1) Aeffe Fashion Group Chairman: Massimo Ferretti CEO: Simone Badioli Julius Baer Mediobanca General Manager 3.3% 2.1% Marcello Tassinari JP Morgan Henderson CFO COO Marcello Tassinari Roberto Gigli 4.9% Global Investor Investor Relation
Slide 42: Group Structure
Group Structure Minority interests owned by: - Moschino S.p.A.: 30% by SINV S.p.A. - Moschino Far East: 49,9% by Bluebell Ltd. - Ozbek Ltd: 8% by Rifat Ozbek - Divè: 25% by Angela Filippini - AV Suisse: 30% by Gustavo Sangiorgi -Pollini S.p.A.: 28% by Four Pollini S.r.l. - Clan Cafè: 37.1% by Clan C
Slide 43: Aeffe History
Aeffe History Licensing agreement Partnership agreement with Elite Group for In 1984, the designer with Jean Paul Gaultier Aeffe acquires a Licensing agreement the production and creates the new for the production and Opening of “Philosophy majority stake in Aeffe begins a for the production and dis
Slide 44: Moschino History
Moschino History Moschino designs the clothes of women bearing countries’ Opening of Moschino Licence placards during 2006 Winter fashion house. On 7th Launch of the agreement with Olympics Opening October, the first prêt-à- The first Opening of the first man and Launching of Max Safety Ceremony. Mo
Slide 45: Pollini History
Pollini History Pollini signs a Pollini signs a license agreements license agreement with Drops Srl for It starts producing shoes Pollini starts distributing its with Elite Group the manufacturing of under the brand Pollini, own products through S.r.l. for the umbrellas and Pollini begins its activi
Slide 46: Key Managers’ Curricula Vitae
Key Managers’ Curricula Vitae Name Description Age 38, Simone is CEO of Aeffe Group. He was born in Rimini in 1969. He earned a degree in Economics from the University of Bologna and is an entrepreneur in the field of fashion and real estate. In 1997 he was appointed Co-Chief Executive Officer of Ae
Slide 47: Board of Directors’ Curricula Vitae
Board of Directors’ Curricula Vitae Name Description Age 51, Massimo is Chairman of the Board of Directors of Aeffe Group. He was born in Cattolica (RN) in 1956. In 1980, Massimo and his sister Alberta Massimo Ferretti founded Aeffe. Currently he is Chairman of Aeffe, devoting himself to developing
Slide 48: Income Statement Full Year 2005-2007
Income Statement Full Year 2005-2007 IAS-IFRS (€m) FY Ending December 31, 2005A 2006A 2007A Net Sales 241.9 266.1 293.2 Includes currency gains, sale of raw materials and % growth 2.9% 10.0% 10.2% rents received Other Revenues 2.6 4.7 3.5 Non-Recurring Revenues 5.4 4.2 2.2 In 2007 sale of Narciso Ro
Slide 49: Revenues Breakdown
Revenues Breakdown (€m) FY Ending December 31, Growth 2005A 2006A 2007A CAGR 2005/07A 2006/07A By Region Italy 90.4 104.1 113.0 11.8% 8.6% Europe (excluding Italy) 51.8 60.1 69.7 16% 15.9% USA 33.8 33.0 32.3 (2.2%) (2.2%) Russia n.a. 13.1 22.1 n.a. 68.8% (1) RoW 66.0 55.8 56.1 (7.8%) 0.6% Total 241.
Slide 50: Balance Sheet Full Year 2005-2007
Balance Sheet Full Year 2005-2007 IAS-IFRS (€m) FY Ending December 31, 2005A 2006A 2007A Net Working Capital 46.8 44.0 51.5 Net Tangible Assets 68.0 69.9 71.2 Net Intangible Assets 178.8 175.1 171.8 Net Financial Assets 4.6 3.0 3.1 Severance Staff, Provisions & Others (69.0) (74.2) (63.4) Net Capita
Slide 51: Cash Flow Statement Full Year 2005/2007
Cash Flow Statement Full Year 2005/2007 IAS-IFRS FY Ending December 31, 2005A 2006A 2007A PBT 13.6 19.3 25.6 Depreciation & Amortisation 10.7 10.2 10.7 Provisions & Impairments (4.0) 0.7 (2.4) Taxes (5.1) (4.9) (9.4) Net Interest 4.6 7.0 8.1 Change in other liabilities / (assets) (3.4) 0.6 (9.5) Ope
Slide 52: Important Information
Important Information The information provided in this presentation is being furnished to you solely for your information on a confidential basis. Neither this document nor any copy thereof may be reproduced, redistributed or passed on, in whole or in part, to any other person. Neither this presenta