Industria De Diseno Textil, S.a. · BME:ITX

Industria De Diseno Textil — Inditex — 9M 2019 Earnings Presentation

58 slides from Industria De Diseno Textil's earnings presentation, Dec 11, 2019

1. Slide 1: Interim Nine Months 2019

   Interim Nine Months 2019 11 December 2019 Interim Nine Months 2019 1

2. 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

3. Slide 3: Overview

   Overview Interim Nine Months 2019 3

4. Slide 4: Unique business model: Global fully integrated Store & Online

   Unique business model: Global fully integrated Store & Online Interim Nine Months 2019 4

5. Slide 5: Interim nine months 2019: continue developing our LT strategy

   Interim nine months 2019: continue developing our LT strategy  Unique customer experience  Increasingly differentiated model  Very strong execution in 9M19  Lighter inventory and strong cash conversion  Global growth opportunities Interim Nine Months 2019 5

6. Slide 6: Interim nine months 2019: continue developing our LT strategy

   Interim nine months 2019: continue developing our LT strategy  Satisfactory sales growth +7.5%  Strong margins  Net Income +12%  Good evolution of working capital fundamentals  Accelerating free cash flow generation Interim Nine Months 2019 6

7. Slide 7: Zara: Dubai Flagship

   Zara: Dubai Flagship Jewel City, Singapore Dubai Mall Interim Nine Months 2019 7

8. Slide 8: Zara: Dubai Flagship

   Zara: Dubai Flagship Jewel City, Singapore Dubai Mall Interim Nine Months 2019 8

9. Slide 9: Zara: Barcelona flagship

   Zara: Barcelona flagship Paseo de Gracia Interim Nine Months 2019 9

10. Slide 10: Zara: Barcelona flagship

    Zara: Barcelona flagship Paseo de Gracia Interim Nine Months 2019 10

11. Slide 11: Seamless Store & Online integration

    Seamless Store & Online integration Paseo de Gracia, Barcelona Interim Nine Months 2019 11

12. Slide 12: Zara Emotions by Jo Loves

    Zara Emotions by Jo Loves Interim Nine Months 2019 12

13. Slide 13: Zara Home: Christmas at Home editorial

    Zara Home: Christmas at Home editorial Interim Nine Months 2019 13

14. Slide 14: Bershka: Billie Eilish editorial

    Bershka: Billie Eilish editorial Interim Nine Months 2019 14

15. Slide 15: Massimo Dutti: New image

    Massimo Dutti: New image Mall of the Emirates, Dubai Interim Nine Months 2019 15

16. Slide 16: Massimo Dutti: Personalisation service

    Massimo Dutti: Personalisation service Mall of the Emirates, Dubai Interim Nine Months 2019 16

17. Slide 17: Pull&Bear: Going Places collection

    Pull&Bear: Going Places collection Interim Nine Months 2019 17

18. Slide 18: Stradivarius: Iceland editorial

    Stradivarius: Iceland editorial Veldstraat, Ghent Interim Nine Months 2019 18

19. Slide 19: Oysho: Launch in Singapore. Mallorca flagship

    Oysho: Launch in Singapore. Mallorca flagship Interim Nine Months 2019 19

20. Slide 20: Uterqüe: London

    Uterqüe: London Interim Nine Months 2019 20

21. Slide 21: Financial Summary

    Financial Summary Interim Nine Months 2019 21

22. Slide 22: IFRS 16

    IFRS 16  Starting FY19  Changes in presentation no impact on cashflow or business  IFRS 16 will result in an estimated increase of around 2.5% in FY19 net income vs former IAS 17, in line with 9M19. Interim Nine Months 2019 22

23. Slide 23: Very strong performance in interim nine months 2019

    Very strong performance in interim nine months 2019 € million 9M19 9M18 19/18 Net sales 19,820 18,437 7.5% Gross profit 11,538 10,695 8% PBT 3,473 3,113 12% Net income 2,720 2,438 12%  Impact of Leases under IFRS16 rules in 9M19 PBT +€83m and Net Income +€63m Interim Nine Months 2019 23

24. Slide 24: Satisfactory sales growth

    Satisfactory sales growth € million 9M19 9M18 19/18 Net sales 19,820 18,437 7.5%  Satisfactory execution of fully integrated Store & Online model  Trading has remained strong over the period  Sales in local currencies +7% Interim Nine Months 2019 24

25. Slide 25: Disciplined execution shown in Gross margin

    Disciplined execution shown in Gross margin 9M19 9M18 19/18 Gross margin 58.2% 58.0% +21 bps  Strong execution  Gross profit growth of +8% to €11.5 bn  Sustained commercial policies Interim Nine Months 2019 25

26. Slide 26: Strong operating efficiency

    Strong operating efficiency € million 9M19 9M18 19/18 Op. expenses 5,811 6,740 -14%  Efficiencies result in tight management of operating expenses  Operating expenses growth without the impact of Leases under IFRS16 rules in 9M19 would have been +6.7% Interim Nine Months 2019 26

27. Slide 27: Financial results

    Financial results € million 9M19 9M18 19/18 Financial results (111) 12 --  Impact of Leases under IFRS16 rules in 9M19 on Financial results -€109m Interim Nine Months 2019 27

28. Slide 28: Flexible business model

    Flexible business model € million 9M19 19/18 Inventory 3,434 (5%) Receivables 843 1% Payables (7,517) 6% Operating working capital (3,240) 22% Net Cash & Equivalents 7,734 17%  Lower inventory on sales and increased cash generation due to strong operating performance, Store & Online integration and

29. Slide 29: +17% Dividend increase

    +17% Dividend increase 100 Total 88 Total 80 75 22 21 60 Bonus 40 Ordinary 66 54 € cents 20 0 2017 2018  € 44 cents was paid on 2 May and another € 44 cents on 4 November 2019 Interim Nine Months 2019 29

30. Slide 30: Concepts

    Concepts Interim Nine Months 2019 30

31. Slide 31: Store & Online sales by concept

    Store & Online sales by concept Sales Pull&Bear Massimo Dutti Bershka Zara Stradivarius & Oysho Zara Home Uterqüe Interim Nine Months 2019 31

32. Slide 32: Performance per concept

    Performance per concept Uterqüe Stradivarius Massimo Group average Oysho Pull&Bear Bershka Dutti Interim Nine Months 2019 32

33. Slide 33: Performance per concept

    Performance per concept  Continued growth for the concepts  Strong performance at Stradivarius and Uterqüe  Optimisation activity in Pull&Bear and Oysho Interim Nine Months 2019 33

34. Slide 34: Global fully integrated

    Global fully integrated Interim Nine Months 2019 34

35. Slide 35: Seamless Store & Online integration

    Seamless Store & Online integration Stratford, Click & Collect, Zara Corso London Vittorio Emanuele Milano Interim Nine Months 2019 35

36. Slide 36: 2020: Fully integrated Store & Online

    2020: Fully integrated Store & Online Interim Nine Months 2019 36

37. Slide 37: 2020: Full RFID rollout and inventory integration

    2020: Full RFID rollout and inventory integration Interim Nine Months 2019 37

38. Slide 38: Online launch in South Africa, Colombia, Philippines, Ukraine

    Online launch in South Africa, Colombia, Philippines, Ukraine East Nanjing Road Interim Nine Months 2019 38

39. Slide 39: Zara Home launched on Zara UK webpage

    Zara Home launched on Zara UK webpage Interim Nine Months 2019 39

40. Slide 40: Outlook

    Outlook Interim Nine Months 2019 40

41. Slide 41: Outlook: Continue developing our LT strategy

    Outlook: Continue developing our LT strategy  Strong differentiation of stores  All stores fully digital and sustainable by 2020  Global online  Further coordination of commercial offer  Fully integrated Store & Online 2020 Interim Nine Months 2019 41

42. Slide 42: All concepts to offer online sales globally by 2020

    All concepts to offer online sales globally by 2020  All key markets same day/next day Interim Nine Months 2019 42

43. Slide 43: Store & Online: A/W Campaign editorial

    Store & Online: A/W Campaign editorial East Nanjing Road Interim Nine Months 2019 43

44. Slide 44: Store & Online: Good Evening collection

    Store & Online: Good Evening collection Interim Nine Months 2019 44

45. Slide 45: Store & Online: A Vision of Autumn

    Store & Online: A Vision of Autumn Interim Nine Months 2019 45

46. Slide 46: Store & Online: Secret Love campaign

    Store & Online: Secret Love campaign East Nanjing Road Interim Nine Months 2019 46

47. Slide 47: Store & Online: Kids campaign

    Store & Online: Kids campaign East Nanjing Road Interim Nine Months 2019 47

48. Slide 48: Store & Online: Join Life collection

    Store & Online: Join Life collection East Nanjing Road Interim Nine Months 2019 48

49. Slide 49: FY2019 Outlook

    FY2019 Outlook  Strong organic growth  Increased differentiation of the model  Ordinary capital expenditure c. €1.4 billion  Strong free cash flow generation  LFL sales expected to increase 4-6% Interim Nine Months 2019 49

50. Slide 50: Zara

    Zara San Ignacio, Pamplona Gran Roma Mall, Rome Interim Nine Months 2019 50

51. Slide 51: Zara

    Zara Hudson Yards, New York Lagoh, Seville Veldstraat, Ghent Interim Nine Months 2019 51

52. Slide 52: Zara

    Zara Rijeka, Croatia Interim Nine Months 2019 52

53. Slide 53: Zara

    Zara Grand One Gateway, Mall, NanjingShanghai Interim Nine Months 2019 53

54. Slide 54: Zara

    Zara One Mall, Nanjing Yongin, South Korea Interim Nine Months 2019 54

55. Slide 55: Zara

    Zara Preciados, Madrid Rue Jean de Riouffe, Cannes Veldstraat, Ghent Interim Nine Months 2019 55

56. Slide 56: Zara

    Zara Preciados, Madrid Interim Nine Months 2019 56

57. Slide 57: FY2019 Results

    FY2019 Results  Results for FY2019 to be released on 18 March 2020 Interim Nine Months 2019 57

58. Slide 58: Interim Nine Months

    Interim Nine Months 2019 11 December 2019 Interim Nine Months 2019 58

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