Delta Galil Industries Ltd. · TASE:DELG
Delta Galil Industries — Q4 2022 Earnings Presentation
28 slides from Delta Galil Industries's earnings presentation, February 2023
Slide 1: Welcome to Q4-2022 Results
WELCOME TO Q4-2022 RESULTS February 2023
Slide 2: Q4 2022 Results Overview (Hebrew disclaimer)
DELTA | Q4 2022 RESULTS OVERVIEW האמור במצגת בכל הקשור לניתוח פעילותה של החברה הינו תמצית בלבד .המצגת עשויה לכלול מידע המוצג באופן שונה מהאופן שבו הוצג בדיווחי החברה לציבור עד כה ,כך שבמצגת עשויים להיכלל נתונים המוצגים באופן ו/או אפיון ו/או בעריכה ו/או בפילוח שונים מאלה שהוצגו בדוחו
Slide 3: Strong 2022 results with all-time record sales, EBIT and EBITDA
Strong 2022 results with DELTA | Q4 2022 RESULTS OVERVIEW all-time record sales, EBIT and EBITDA SALES* EBIT** EBITDA*** $2,031.5M * $190.2M $224.2M +4%, +7% C$ +1% +1% GROSS MARGIN EBIT MARGIN** NET PROFIT MARGIN** 38.6% 9.4% 5.9% (120) BPS (20) BPS (50) BPS Rounded numbers *Exceeded guidance; C$-
Slide 4: FY-2022 Highlights
FY-2022 Highlights DELTA | Q4 2022 RESULTS OVERVIEW Strong Results in a Challenging Global Environment * • Record sales and EBIT of $2,032M and $190M, respectively ** • Sales & EBITDA exceeded high-end of guidance • Sales increased in all segments and geographies on a constant currency basis • Priva
Slide 5: 2022 Actual vs. Guidance
2022 Actual vs. Guidance DELTA | Q4 2022 RESULTS OVERVIEW • Sales & EBITDA exceeded higher-end of guidance • EBIT, Net income & EPS within range $ in millions 2022 VS. GUIDANCE GUIDANCE 2021 ACTUAL 2022 ACTUAL 2021 LOW END HIGH END Sales* 1,951.0 2,031.5 4.1% 2,023 2,030 2,031.5 EBIT** 188.1 190.2 1
Slide 6: Q4-2022 Results
Q4-2022 Results DELTA | Q4 2022 RESULTS OVERVIEW Remarkable Profitability in a Challenging Environment SALES EBIT** EBITDA*** $544.4M $56.9M $65.6M (6%), (2%) C$* (12%) (13%) GROSS MARGIN EBIT MARGIN** NET PROFIT MARGIN** 39.7% 10.5% 6.9% (40) BPS (70) BPS (100) BPS Rounded numbers *On a constant cu
Slide 7: Q4-2022 Highlights
Q4-2022 Highlights DELTA | Q4 2022 RESULTS OVERVIEW • Sales decreased by 6% (-2% on a constant currency basis) vs. record Q4-2021 • Strong EBIT margin of 10.5% despite highly challenging environment • Private Label at all-time record EBIT and EBIT margin of 12.6% • Continued strong growth of Skims a
Slide 8: Quarterly Trend Analysis
Quarterly Trend Analysis DELTA | Q4 2022 RESULTS OVERVIEW • Q4-2021 all-time record in sales and profitability with favorable macroeconomic environment • Q4-2022 Sales down 6% (-2% on a constant currency basis) • GM slightly down to 39.7% mainly due to higher promotions and negative FX impact • EBIT
Slide 9: Slightly lower gross margin with initial positive impact of lower freight cost
Slightly lower gross margin with initial positive DELTA | Q4 2022 RESULTS OVERVIEW impact of lower freight cost Q4-2021 Gross margin 40.1% Var Favorable customer & product mix Lower freight cost Higher discounts & promotions Ex-rate impact Lower utilization of owned factories Q4-2022 Gross margin 39
Slide 10: 2023 Gross Margin Expansion Opportunity
2023 Gross Margin Expansion Opportunity DELTA | Q4 2022 RESULTS OVERVIEW Gross margin • Lower FOB costs expansion • Lower logistic costs opportunity • Favorable customer mix • From H2 increased profitability of own factories 10
Slide 11: Q4-2022 Financial Highlights vs. Q4-2021
Q4-2022 Financial Highlights vs. Q4-2021 DELTA | Q4 2022 RESULTS OVERVIEW Total Sales Gross Profit EBIT (BOT) Q4-2021 Q4-2022 Q4-2021 Q4-2022 Q4-2021 Q4-2022 $578.0M $544.4M $231.9M $216.3M $64.7M $56.9M Own Websites* Gross Margin EBIT Margin (BOT) Vs. Q4-2021 (6%) Q4-2021 Q4-2022 Q4-2021 Q4-2022 Vs
Slide 12: Q4-2022 Update by Segment
DELTA | Q4 2022 RESULTS OVERVIEW Q4-2022 UPDATE BY SEGMENT 12
Slide 13: Private Label
Private Label DELTA | Q4 2022 RESULTS OVERVIEW We are the partner of choice to iconic and digitally native global brands and retailers At all-time record EBIT ($ / %) ($M) Q4-2022 Q4-2021 Var vs. Q4-2021 SALES 199.6 203.4 (2%) EBIT 25.2 19.0 33% EBIT% 12.6% 9.3% 3.3% Q4-2022 vs Q4-2021 Sales decreas
Slide 14: Private Label
Private Label DELTA | Q4 2022 RESULTS OVERVIEW Rich pipeline of new and exciting customers
Slide 15: Private Label
Private Label DELTA | Q4 2022 RESULTS OVERVIEW Fully vertical from innovative design to distribution for leading brands & retailers • Opportunity to grow with current customers including SKIMS, Lululemon, Aerie, Adore Me, Fabletics and Savage X Fenty in existing and new categories • Continue to stra
Slide 16: Brands
Brands DELTA | Q4 2022 RESULTS OVERVIEW Our Brands segment includes a comprehensive portfolio of top intimate apparel and activewear brands ($M) Q4-2022 Q4-2021 Var Var C$ SALES 195.6 199.5 (2%) 3% EBIT 16.0 24.4 (35%) EBIT% 8.2% 12.2% (4.1%) Q4-2022 vs Q4-2021 Sales increased +3% on a constant curr
Slide 17: 7 For All Mankind
7 For All Mankind DELTA | Q4 2022 RESULTS OVERVIEW 7 For All Mankind is the originator of American premium denim, born in LA in 2000 Managed as global organization with global collection since Q2-2021 ($M) Q4-2022 Q4-2021 Var Var C$ SALES 63.2 62.2 2% 6% EBIT 5.3 7.5 (29%) EBIT% 8.4% 12.1% (3.7%) Q4
Slide 18: Delta Israel
Delta Israel DELTA | Q4 2022 RESULTS OVERVIEW Delta, our legacy brand, is the leading intimate apparel brand in Israel with a unique proposition of selling to the entire family ($M) Q4-2022 Q4-2021 Var Var C$ SALES 83.3 95.7 (13%) (4%) EBIT 14.6 21.3 (31%) EBIT% 17.5% 22.2% (4.7%) Q4-2022 vs Q4-2021
Slide 19: Delta Israel Growth Initiatives
Delta Israel Growth Initiatives DELTA | Q4 2022 RESULTS OVERVIEW Launching 2 new stores Increase brand awareness during H2-2023, Launching of 7 new stores targeting 13 total stores in 2023 Potential collaboration with / acquisition of international and local brands Exclusive intimates distributor in
Slide 20: Other (Bare Necessities & Organic Basics)
Other (Bare Necessities & Organic Basics) DELTA | Q4 2022 RESULTS OVERVIEW Bare Necessities is a leading online multi-brand intimate apparel and swimwear retailer Organic Basics is a sustainable digital apparel brand which we acquired in Q3-2022 ($M) Q4-2022 Q4-2021 Var vs. Q4-2021 * SALES 20.2 22.1
Slide 21: Organic Basics
Organic Basics DELTA | Q4 2022 RESULTS OVERVIEW Organic Basics is a sustainable digital-first apparel brand selling women’s and men’s underwear, activewear and base layers Business Update • Launching new Gen-Z focused brand identity mid year with exciting product collections • Planning a celebrity i
Slide 22: Strong Balance Sheet
Strong Balance Sheet DELTA | Q4 2022 RESULTS OVERVIEW $ in millions December 31 December 31 $194.9M 2021 % OF TOTAL 2022 % OF TOTAL Cash & short term deposits CASH PORTFOLIO 236.0 13% 194.9 11% $217.4M Net Debt INVENTORY 395.2 22% 487.3 26% Net Debt / EBITDA* ratio of 1.0 OTHER CURRENT ASSETS 258.5
Slide 23: Inventory Days Analysis
Inventory Days Analysis DELTA | Q4 2022 RESULTS OVERVIEW Significant inventory reduction of $51M vs. Q3-2022 1 8 0 Inventory days 1 155 0 .6 We expect a significant reduction in inventory during 2023 153 142 1 6 0 134 0 .5 1 4 0 0 .4 103 1 2 0 1 0 8 0 0 .3 The reduction vs. September 30, 2022 was dr
Slide 24: 2023 Guidance
2023 Guidance* DELTA | Q4 2022 RESULTS OVERVIEW Return to more profitable and consistent growth in H2-2023 H1 with sales and profitability decrease*** H2 with sales and profitability growth $ in millions 2022 ACTUAL 2023 GUIDANCE Sales 2,031.5 2,000.0 - 2,080.0 EBIT** 190.2 192.0 - 203.8 EBITDA** 28
Slide 25: Our Core Assets and Major Growth Engines
Our Core Assets and DELTA | Q4 2022 RESULTS OVERVIEW Major Growth Engines Strong and leading Licenses with mega Strong and comprehensive owned brands global brands customer base Unique partner of choice Consistent seeding of Advanced e-comm capabilities including new customers platform global flexib
Slide 26: Broad and Comprehensive Market Presence
Broad and Comprehensive Market Presence DELTA | Q4 2022 RESULTS OVERVIEW Partner of choice for a broad range of brands across the Premium, Mid and Mass Market Tiers Product Category Distribution Channel Intimates Active Pure Players Mass Market Dept Stores Off Price
Slide 27: Thank You
THANK YOU DELTA GALI INDUSTRIES LTD
Slide 28: Q4-2022 IFRS 16 impact
Q4-2022 IFRS 16 impact DELTA | Q4 2022 RESULTS OVERVIEW $ in millions Q4-2022 EBIT 2.2 EBITDA 16.0 Finance expenses 1.5 Net income 0.5 28
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