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

Industria De Diseno Textil — Inditex — FY2017 Earnings Presentation

51 slides from Industria De Diseno Textil's earnings presentation, Mar 14, 2018

1. Slide 1: Full Year 2017

   Full Year 2017 14 March 2018 Full Year 2017 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 Full Year 2017 3 INDITEX

4. Slide 4: 2017: A year of strong execution globally

   2017: A year of strong execution globally East Nanjing Road Full Year 2017 4

5. Slide 5: 2017: Overview

   2017: Overview  Differentiated business model  Global fully integrated Store & Online  Strong organic growth  Global growth opportunities Full Year 2017 5

6. Slide 6: 2017: Overview

   2017: Overview  Sales €25.3 bn. +10% in local currencies  LFL sales +5% on +10%. Positive LFL across all regions and concepts  Online sales grew +41% to 10% of Group sales (12% of net sales in markets with online sales)  EBIT €4.3 bn. +12% in local currencies  Proposed dividend increase +10.3%

7. Slide 7: Global fully integrated Store & Online

   Global fully integrated Store & Online Full Year 2017 7

8. Slide 8: Differentiated business model

   Differentiated business model  Central inventory position  Distribution to all stores worldwide twice a week  Global online same day/next day Full Year 2017 8

9. Slide 9: Highly prominent and differentiated stores 2017

   Highly prominent and differentiated stores 2017 Paseo de la Castellana, Madrid Full Year 2017 9

10. Slide 10: Highly prominent and differentiated stores 2017

    Highly prominent and differentiated stores 2017 Fondamenta Oresolo, Venice Full Year 2017 10

11. Slide 11: Highly prominent and differentiated stores 2017

    Highly prominent and differentiated stores 2017 Vittorio Emanuele, Milan Full Year 2017 11

12. Slide 12: Pop-up store in Stratford 2017

    Pop-up store in Stratford 2017 Stratford, London Full Year 2017 12

13. Slide 13: Highly prominent and differentiated stores 2018

    Highly prominent and differentiated stores 2018 Stratford, London Full Year 2017 13

14. Slide 14: Global online

    Global online  Central inventory + Online stockrooms + Global store platform  Same day delivery metropolitan areas/Next day global standard Poland UK 2014 & 2016 Russian Fed Toronto 2012 2017 2013 Seoul France 2014 Tokyo Madrid 2015 2011 Los Angeles Philadelphia 2010 Turkey Shanghai 2014 2015 2016

15. Slide 15: Global online +41% to 10% of Group sales in 2017

    Global online +41% to 10% of Group sales in 2017  12% of sales in markets which have online sales  Strong growth potential Full Year 2017 15

16. Slide 16: Financial Summary

    Financial Summary Full Year 2017 16

17. Slide 17: Full Year 2017

    Full Year 2017 € million FY17 FY16 17/16 LC Net sales 25,336 23,311 9% 10% Gross profit 14,260 13,279 7% 10% EBIT 4,314 4,021 7% 12% Net income 3,368 3,157 7% --  Strong operating performance Full Year 2017 17

18. Slide 18: Strong sales growth

    Strong sales growth € million FY17 FY16 17/16 Net sales 25,336 23,311 9%  +10% sales growth in local currencies  Euro strength vs. all key currencies Full Year 2017 18

19. Slide 19: Global Store & Online

    Global Store & Online Store & Online sales FY2017 Europe ex-Spain 44.9% Asia & RoW 23.2% Spain 16.3% Americas 15.6% Total 100% Full Year 2017 19

20. Slide 20: Strong LFL sales performance

    Strong LFL sales performance  5% LFL on a very demanding comparable of 10%  Positive LFL across all geographical areas and concepts Full Year 2017 20

21. Slide 21: New space in prime locations globally grew +7.4%

    New space in prime locations globally grew +7.4% Full Year 2017 21

22. Slide 22: Gross profit

    Gross profit FY17 FY16 17/16 % Gross profit 14,260 13,279 7% 56.3%  Gross profit growth of +7% to €14.3 bn  Gross margin in local currencies 56.8%  Sustained commercial policies Full Year 2017 22

23. Slide 23: Tight control of operating expenses

    Tight control of operating expenses € million FY17 17/16 Operating expenses 8,944 9%  Strong growth in LFL sales and new space in prime locations Full Year 2017 23

24. Slide 24: Depreciation & Amortisation

    Depreciation & Amortisation € million FY17 17/16 Depreciation (1,108) Impairment (Net)* (114) Divestment of tangible assets** 257 Other 2 Depreciation & Amortisation (963) (9%) *2018 store absorption costs fully provisioned in 2017 impairment **Includes sale of 15 premises Full Year 2017 24

25. Slide 25: Flexible business model

    Flexible business model € million FY17 Inventory 2,685 Receivables 778 Payables (5,057) Operating working capital (1,594) Net Cash & Equivalents 6,387 Full Year 2017 25

26. Slide 26: Cash flow

    Cash flow € million FY17 FY16 17/16 Funds from operations 5,440 5,204 5% (before corporate income tax) Corporate income tax (1,029) (798) Funds from operations 4,411 4,406 CAPEX - Ordinary 1,545 1,432 8% Dividends 2,127 1,871 14% Net Cash & Equivalents 6,387 6,090 5%  Strong store optimisation in 2

27. Slide 27: Concepts

    Concepts TH ae LI Full Year 2017 27 INDITEX

28. Slide 28: Store & Online sales by concept

    Store & Online sales by concept % Store & Online Sales Full Year 2017 28

29. Slide 29: EBIT by concept

    EBIT by concept € million FY17 EBIT EBIT/ sales ROCE Zara 3,024 18% 30% Massimo Dutti 260 15% 37% Bershka 353 16% 57% Stradivarius 225 15% 45% Pull&Bear 264 15% 43% Zara Home 97 12% 24% Oysho 87 15% 44% Uterqüe 5 5% 11% Total EBIT 4,314 17% 33% Full Year 2017 29

30. Slide 30: Concepts

    Concepts  Continued growth for the concepts  Strong performance of Pull&Bear, Bershka and Oysho Full Year 2017 30

31. Slide 31: Outlook

    Outlook Full Year 2017 31 INDITEX

32. Slide 32: Strategic initiatives

    Strategic initiatives Global fully integrated Store & Online 2012 2017 2018e Store optimisation plan Global Online +41% Strong growth 10% of revenues (12% opportunity *Larger more prominent stores of net sales in markets *Enlargements/Absorptions with online sales) Australia, New Zealand *All key gl

33. Slide 33: Global growth opportunities

    Global growth opportunities  Differentiated business model  Global fully integrated Store & Online  Strong growth opportunities Full Year 2017 33

34. Slide 34: Growth in Europe

    Growth in Europe  Important growth opportunities across the whole of Europe  All concepts Store & Online Full Year 2017 34

35. Slide 35: Growth in Asia

    Growth in Asia  Strong growth opportunity. Store & Online in all key markets  2017: Online in India, Singapore, Malaysia, Thailand and Vietnam Full Year 2017 35

36. Slide 36: Growth in the Americas

    Growth in the Americas  Attractive growth markets. Strong expansion opportunities  Fully integrated Store & Online Full Year 2017 36

37. Slide 37: Global growth opportunities

    Global growth opportunities  Australia, New Zealand and South Africa  Ongoing expansion Full Year 2017 37

38. Slide 38: Global online

    Global online  All key markets same day/next day Full Year 2017 38

39. Slide 39: Online launch of Zara in Australia and New Zealand

    Online launch of Zara in Australia and New Zealand East Nanjing Road Full Year 2017 39

40. Slide 40: Store & Online: Vast Land collection

    Store & Online: Vast Land collection East Nanjing Road Full Year 2017 40

41. Slide 41: Store & Online: Let the Good Times Roll collection

    Store & Online: Let the Good Times Roll collection East Nanjing Road Full Year 2017 41

42. Slide 42: Store & Online: Spring Games collection

    Store & Online: Spring Games collection East Nanjing Road Full Year 2017 42

43. Slide 43: Store & Online: Join Life collection

    Store & Online: Join Life collection East Nanjing Road Full Year 2017 43

44. Slide 44: 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 2017 44

45. Slide 45: Self check-out

    Self check-out Sánchez Bregua Full Year 2017 45

46. Slide 46: Global Click & Collect

    Global Click & Collect Full Year 2017 46

47. Slide 47: Store optimisation

    Store optimisation Full Year 2017 47

48. Slide 48: Strong growth opportunities

    Strong growth opportunities  Global fully integrated Store & Online  Strong organic growth. Increased differentiation of retail base  Lower capital expenditure required. Ordinary Capex c.€1.5 bn  New space in prime locations c.6% net of absorptions in 2018. 350-400 gross openings / selective abs

49. Slide 49: FY17 Dividend increase +10.3%

    FY17 Dividend increase +10.3%  €2.3 billion to be distributed in 2018 € DPS Full Year 2017 49

50. Slide 50: 2018 Outlook

    2018 Outlook  Store & Online sales in local currencies have increased +9% from 1 February to 11 March 2018  The Spring/Summer season is influenced by the performance over the Easter period due to its significant sales volumes Full Year 2017 50

51. Slide 51: Full Year 2017

    Full Year 2017 14 March 2018 Full Year 2017 51

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