Industria De Diseno Textil, S.a. · BME:ITX
Industria De Diseno Textil — Inditex — Q1 2020 Earnings Presentation
37 slides from Industria De Diseno Textil's earnings presentation, Jun 10, 2020
Slide 1: Interim Three Months 2020 & Strategy Update
Interim Three Months 2020 & Strategy update 10 June 2020 Interim Three Months 2020 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 1Q2020
Overview 1Q2020 Interim Three Months 2020 3
Slide 4: Covid-19 pandemic
Covid-19 pandemic We express our solidarity with the people affected Our number one priority is the health and safety of local communities, customers and employees We want to express enormous gratitude to our dedicated teams who have been an inspiration during this period Interim Three Months
Slide 5: Overview 1Q2020
Overview 1Q2020 Remain fully confident in our business model Collections for Spring/Summer 2020 very well received by customers Covid-19 has had a material impact on operations 965 stores in 27 markets remained open at the end of 1Q2020 Online business has grown very strongly in all market
Slide 6: 1Q2020: Stores with sales
1Q2020: Stores with sales Interim Three Months 2020 6
Slide 7: Online sales +50% in 1Q2020
Online sales +50% in 1Q2020 Very strong progression of online sales globally Strong advantage of single inventory position Online sales +95% in April Interim Three Months 2020 7
Slide 8: FY2020 to date
FY2020 to date Progressive recovery in all markets as stores reopen Store & Online sales in local currencies decreased 51% in May as stores start to reopen but still with restrictions. Store & Online sales in local currency from 2 June to 8 June decreased 34%. In the markets that were fully op
Slide 9: Financial Summary
Financial Summary Interim Three Months 2020 9
Slide 10: Interim Three Months 2020
Interim Three Months 2020 € million 1Q20 1Q19 Material impact of Covid-19 pandemic in 1Q2020 operations Net sales 3,303 5,927 Very active management of supply chain Gross profit 1,930 3,524 Strong adjustment to operating expenses PBT* (539) 952 Completion of store optimisation includes Net i
Slide 11: Sales
Sales € million 1Q20 1Q19 Sales performance marked by timing of temporary store closures Net sales 3,303 5,927 Online sales growth of +50% in 1Q2020. April online sales +95% 2Q2020 sales trends improve as stores reopened but some restrictions still remain Interim Three Months 2020 11
Slide 12: Gross margin
Gross margin € million 1Q20 1Q19 Flexibility of supply chain key to gross margin performance Gross margin 58.4% 59.5% Closing inventory down 10% Spring/Summer inventory provision Interim Three Months 2020 12
Slide 13: Operating efficiencies
Operating efficiencies € million 1Q20 1Q19 20/19 Implementation of initiatives to adjust operating expenses in 1Q2020 Op. expenses 1,448 1,842 (21%) All main components of operating expenses have shown a good performance Interim Three Months 2020 13
Slide 14: Depreciation
Depreciation € million 1Q20 1Q19 20/19 Depreciation & Amortisation includes completion of space optimisation Depreciation (992) (696) 43% 2020-2021 Interim Three Months 2020 14
Slide 15: Financial results
Financial results € million 1Q20 1Q19 20/19 Interest on lease liability amounted to €33m Financial results (35) (36) (5%) Interim Three Months 2020 15
Slide 16: Flexibility of business model key to performance
Flexibility of business model key to performance € million 1Q20 1Q19 20/19 Flexibility of supply chain Inventory 2,629 2,923 (10%) High quality inventory at 1Q2020 end Receivables 644 846 (24%) Strong financial condition Payables (3,877) (6,306) (39%) Op. working capital (604) (2,536) -- Net C
Slide 17: Outlook & Strategy Update
Outlook & Strategy Update Interim Three Months 2020 17
Slide 18: Strategic initiatives
Strategic initiatives Global fully integrated Store & Online 2012 2019 2020-2022 Store optimisation plan Global Online Strong growth opportunity *Larger more prominent stores €3.9 bn 14% of sales *Enlargements/Absorptions *All key global flagships/New Images Global online Zara online globally Global
Slide 19: Strategy update: Inditex 2022
Strategy update: Inditex 2022 Further strengthen our competitive advantage: Integrated Store&Online reinforce one another Stronger customer experience: Improved management of stores, inventory, supply chain, sales conversion Strong growth of online sales and reinforcement of digital capabiliti
Slide 20: Strategy update: Inditex 2022
Strategy update: Inditex 2022 Stores are critical to the implementation of the following three key strategic areas: digitalisation, integration between stores and online, and sustainability Stores will also play a stronger role in the development of online sales due to their digitalisation and c
Slide 21: Strategy update: Inditex 2022
Strategy update: Inditex 2022 Increased differentiation of fully integrated business model Unique Store&Online platform to provide the strongest customer experience Online sales above 25% of total by end of 2022 Underlying LFL of 4-6% annually Gross space growth c2.5% annually Capital ex
Slide 22: Global online developments
Global online developments 2007 2010 2011-2014 2019 2020 2022e Zara Home Zara launch Zara launch in USA, Global presence New online Online >25% launch all over all over China, Japan, Russian F. Studios for of group sales Europe Europe 14% of group Zara All concepts in Europe sales 64,000 m2 All key
Slide 23: Online launch in Peru, Uruguay, Paraguay and Argentina
Online launch in Peru, Uruguay, Paraguay and Argentina East Nanjing Road Interim Three Months 2020 23
Slide 24: Global online to reach above 25% of total sales by 2022
Global online to reach above 25% of total sales by 2022 Online sales as a % of total is expected to continue rising over the long-term Digital capex €1 billion for 2020-2022 Leverages on fully integrated and digital store network Inditex Open Platform Online sales to reach above 25% of tot
Slide 25: High quality stores: Key to competitive differentiation
High quality stores: Key to competitive differentiation Interim Three Months 2020 25
Slide 26: High quality stores: Key to competitive differentiation
High quality stores: Key to competitive differentiation Store optimisation 2012-19 Stores in best locations worldwide Gross openings 3,671 Fully-integrated, digital, eco-efficient Refurbishments 2,556 Unparalleled customer experience Enlargements 1,106 New stores 3.5 years average age Absorp
Slide 27: High quality stores: Key to competitive differentiation
High quality stores: Key to competitive differentiation Absorptions Stores at the end of their life cycle Stores 1,000-1,200 Small units, mainly in younger concepts, geographically diversified 2020/2021 500-600 annually Stores with low net book value Net book value* €308 m Potential to recov
Slide 28: Space growth in prime locations 2020-2022
Space growth in prime locations 2020-2022 Larger, more prominent and in best locations worldwide Store openings c150/year Digital, integrated, eco-efficient stores Enlargement of high quality stores Higher competitive differentiation Gross Space c2.5%/year Increased profitability, lower capi
Slide 29: Highly prominent and differentiated stores
Highly prominent and differentiated stores Barcelona Paseo de Gracia Interim Three Months 2020 29
Slide 30: Highly prominent and differentiated stores
Highly prominent and differentiated stores Edinburgh St James Interim Three Months 2020 30
Slide 31: Highly prominent and differentiated stores
Highly prominent and differentiated stores Riyad Vittorio Emanuele, Milan Interim Three Months 2020 31
Slide 32: Highly prominent and differentiated stores
Highly prominent and differentiated stores Bogotá Calle 82 Vittorio Emanuele, Milan Interim Three Months 2020 32
Slide 33: Highly prominent and differentiated stores
Highly prominent and differentiated stores Beijing Wangfujing Vittorio Emanuele, Milan Interim Three Months 2020 33
Slide 34: Sustainability & Circular economy a key part of the strategy
Sustainability & Circular economy a key part of the strategy Sustainability in supply chain Renewable energy Sustainable fabrics Eco-efficient stores Zero-waste / recycling Interim Three Months 2020 34
Slide 35: Unique business model: Global fully integrated Store & Online
Unique business model: Global fully integrated Store & Online Interim Three Months 2020 35
Slide 36: Dividend
Dividend Inditex’s Board of Directors will propose to the Annual General Meeting an ordinary dividend for FY2019 of 35 cents per share to be paid on 2 November 2020 Inditex’s Dividend Policy of 60% ordinary payout and bonus dividends remains in place The remainder of the bonus dividend for cal
Slide 37: Interim Three Months
Interim Three Months 2020 10 June 2020 Interim Three Months 2020 37