Delta Galil Industries Ltd. · TASE:DELG

Delta Galil Industries — Q4 2019 Earnings Presentation

27 slides from Delta Galil Industries's earnings presentation, 2020

  1. Slide 1: Results Overview Q4 2019

    RESULTS OVERVIEW Q4 2019 F e b r u a r y 2 0 1 9

  2. Slide 2: Disclaimer (Hebrew)

    ‫האמור במצגת בכל הקשור לניתוח פעילותיה של החברה הינו תמצית בלבד‪ ,‬ועל מנת לקבל תמונה מלאה של פעילות החברה ושל הסיכונים עימם מתמודדת החברה‪ ,‬יש לעיין‬ ‫בדיווחיה השוטפים של החברה לרבות בדוח הרבעוני לתקופה שהסתיימה ביום ‪ 31‬דצמבר ‪.2019‬‬ ‫בין היתר‪ ,‬העובדות והנתונים ששימשו בסיס למידע המפורט במצגת

  3. Slide 3: Q4 2019 Highlights

     SALES INCREASED BY 11% TO A RECORD LEVEL OF $505M, ORGANIC GROWTH -2% *  EBIT INCREASED BY 22% TO $51M, REPORTED UP 36% *  NET INCOME INCREASED 28% TO $35M, REPORTED UP 44% **  OPERATING CASH FLOW AT A RECORD LEVEL OF $97M, UP $40M Q4 2019  NET DEBT/EBITDA REDUCED TO 2.5 FROM 3.2 IN Q3 Highlig

  4. Slide 4: Q4 2019 Highlights: DGUSA

    DGUSA  Q4 Sales down 7%, EBIT down 16%  FY EBIT down $10M, negatively impacted by:  Lower margins due to price pressure Q4 2019  One time product return and continued weakness in Avia active wear business Highlights  Executing the strategic & operational plan presented in Q3  Exited $60M of ba

  5. Slide 5: Q4 2019 Highlights: Delta Premium Brands

    DELTA PREMIUM BRANDS  Sales down 3%, EBIT up 5%  Finalized transition of Finance from LA to NJ offices  Finalized transition of Splendid headquarter from LA to NY offices Q4 2019  FY EBIT down $11.5M, negatively impacted by:  Increased expenses of Splendid move to NY Highlights  Increased expe

  6. Slide 6: Q4 2019 Highlights: Upper Market, Europe, Israel

    GLOBAL UPPER MARKET  Positive momentum continues with EBIT doubling YoY  Bogart sales of $58M  Strong growth in our Socks and Seamless categories Q4 2019  Vietnam factory profitable in 4th quarter and into 2020 DELTA EUROPEAN BRANDS Highlights   Sales growth of 2% in original currency, EBIT up

  7. Slide 7: Q4 & 2019 Financial Highlights

    Q4.2019 Full Year 2019 % change vs % change vs $M $M last year last year Q4 & 2019 504.8 11% 1,690.2 13% TOTAL SALES New Record level OPERATING PROFIT New Record level (Excluding one-time items) 51.2 22% 106.0 8% Financial NET INCOME (Excluding one-time items) OPERATING CASH FLOW * Quarter Record le

  8. Slide 8: IFRS16 Impact

    IFRS16 IMPACT WE APPLIED IFRS16 STARTING Q1/2019 Segmental impact ($ million) Q4.2019 YTD 2019 OPERATING PROFIT Q4 2019 2019 EXCLUDING EXCLUDING DELTA USA 0.2 0.8 REPORTED VAR REPORTED VAR IFRS16 IFRS16 GLOBAL UPPER MARKET 0.4 1.1 OPERATING PROFIT 49.9 52.2 2.3 95.6 103.7 8.1 DELTA EUROPEAN BRANDS 0

  9. Slide 9: Q4 2019 Results

    Q4 2019 ($ million) Results SALES Q4 2019 504.8 Q4 2018 454.3 % change vs last year 11% Sales OPERATING PROFIT 52.2 38.4 36% +11% Sales in original currency +11% Sales excluding Bogart -2% % from sales OPERATING PROFIT 10.3% 8.4% Sales organic growth in original currency -2% 51.2 42.1 22% Excluding

  10. Slide 10: YTD 2019 Results

    YTD 2019 ($ million) Results SALES 2019 1,690.2 2018 1,498.4 % change vs last year 13% Sales OPERATING PROFIT 103.7 80.7 29% +13% Sales in original currency +14% Sales excluding Bogart & Eminence H1 +2% % from sales OPERATING PROFIT 6.1% 106.0 5.4% 98.0 8% Sales organic growth in original currency +

  11. Slide 11: Q4 Sales and EBIT by Segment

    Q4 Sales and EBIT by Segment ($ thousands) SALES % change in EBIT original Q4 2019 Q4 2018 % change currency Q4 2019 Q4 2018 DELTA USA 128,630 139,019 (7%) (7%) 10,614 12,600 % from sales 8.3% 9.1% GLOBAL UPPER MARKET 140,836 85,909 64% 64% 11,153 5,595 % from sales 7.9% 6.5% DELTA EUROPEAN BRANDS 8

  12. Slide 12: YTD Sales and EBIT by Segment

    YTD Sales and EBIT by Segment ($ thousands) SALES % change in EBIT original 2019 2018 % change currency 2019 2018 DELTA USA 461,608 469,321 (2%) (2%) 23,166 32,988 % from sales 5.0% 7.0% GLOBAL UPPER MARKET 460,682 308,365 49% 49% 40,333 21,023 % from sales 8.8% 6.8% DELTA EUROPEAN BRANDS 308,526 27

  13. Slide 13: Sales Analysis by Geographic Area

    Sales Analysis by Geographic Area ($ thousands) Q4 YTD % change % change % of % of % in original % of % of % in original 2019 2018 2019 2018 sales sales change currency sales sales change currency U.S.A 251,032 50% 237,407 52% 6% 6% 846,061 50% 794,316 53% 7% 7% EUROPE (excluding Germany) 84,685 17%

  14. Slide 14: Q4 Sales & EBIT % from total year

    Q4 Sales & EBIT % from total year Without IFRS16 effect 50% 43% 39% 37% 31% 32% 30% 30% 27% 27% Q4.2015 Q4.2016 Q4.2017 Q4.2018 Q4.2019 Sales EBIT The numbers are rounded R E S U L T S O V E R V I E W Q 4 2 0 1 9 14

  15. Slide 15: Segmental Results on a Quarterly Basis

    Segmental Results on a Quarterly Basis Excluding one time items ($ thousands) 2018 2019 TRAILING TWELVE Q4 Q1 Q2 Q3 Q4 MONTHS EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES DELTA USA 12,600 139,019 4,815 111,775 1,115 107,332 6,623 113,871 10,614 128,630 23,166 461,608 % from sale

  16. Slide 16: Capital Expenditures

    45.5 ($ million) Global upper market .…..…....…..….. 9.4 33.6 Delta European brands ….….…..…… 5.2 Capital DGPB ...……………………….…......... 9.8 Delta Israel ...………………….…….... 2.8 Expenditures Others .….………………….…..…....... 6.4 Total .........……….….………....….… 33.6 YTD YTD 2018 2019 R E S U L T S O V E R V

  17. Slide 17: Balance Sheet

    Balance Sheet Dec. 31 2019 % FROM TOTAL Dec. 31 2018 ($ million) % FROM TOTAL Increased following Bogart acquisition CASH AND CASH EQUIVALENTS 109.2 7% 74.0 6% and IFRS16 implementation OTHER CURRENT ASSETS 579.5 36% 561.2 47% TOTAL CURRENT ASSETS 688.7 43% 635.2 53% $109M Cash on hand NON CURRENT A

  18. Slide 18: Financial Indicators

    Financial Indicators 31.12.2019 31.12.2018 Current ratio 1.71 1.70 Quick ratio 0.90 0.87 Days of Sales Outstanding 38 44 Days Payable Outstanding 40 45 Inventory Days 93 99 Operating cash flow - Q4 ($ million) 112.3 56.5 Operating cash flow - YTD ($ million) 155.0 22.4 EBITDA - Q4 ($ million) 76.1 5

  19. Slide 19: Diversified Portfolio

    7% 36% 13% 10% OTHER PRIVATE SOCKS KIDS 13% LABEL ISRAEL GEOGRAPHIC 50% BRANDED/ 26% PRODUCT USA CAREGORIES AREA PRIVATE LABEL MENS Diversified 51% LADIES 30% EUROPE 64% BRANDED Portfolio 13% DELTA 27% Enables Delta to effectively mitigate market risks 26% ISRAEL 27% MASS DUSA IN HOUSE % from sales

  20. Slide 20: Actual Vs. 2019 Guidance

    ($ million) % INCREASE 2019 GUIDANCE 2019 ACTUAL 2019 GUIDANCE COMPARED TO 2019 ACTUAL Actual Sales EBIT 1,690 98 1,650 - 1,690 98 - 102 10% - 13% 0% - 4% Vs. 2019 EBITDA 138 132 - 136 2% - 5% Guidance Net Income 60 60 - 62 0% - 3% Diluted EPS ($) 2.36 2.37 - 2.44 0% - 3% Excluding one time items IN

  21. Slide 21: Corona Impact

     Shipments delay effect: sales loss of approximately $15M in Q1. $12M shifted to Q2. EBIT loss of $1M Corona  Factory operational disruption: $3.5M loss in Q1 Impact  Air freight and additional misc. costs: $1-2M in Q1  Total: $5-$7M R E S U L T S O V E R V I E W Q 4 2 0 1 9 21

  22. Slide 22: Actual Vs. 2020 Guidance

    ($ million) % INCREASE 2020 GUIDANCE 2019 ACTUAL 2020 GUIDANCE Actual COMPARED TO 2019 ACTUAL SALES 1,690 1,740 - 1,770 3% - 5% Vs. 2020 EBIT EXCLUDING CORONA IMPACT 106 113 - 119 7% - 12% Guidance CORONA IMPACT 6 EBIT * 106 107 - 113 1% - 7% Excluding one time items EBITDA* 196 197 - 203 1% - 4% NE

  23. Slide 23: Future Growth

    Leveraging Bogart relationships to sell Delta products to major new customers and vice versa Growing with Kim Kardashian intimate brand SKIMS Leveraging BRAYOLA to continue our strong growth in E-com channel Future Continuous growth in GUM in Seamless and Socks Growth Expanding Eminence Ladies & kid

  24. Slide 24: Celebrating Years

    EMBER YOUR a CELEBRATING 20 YEARS

  25. Slide 25: Celebrating Years

    CELEBRATING 20 YEARS 25

  26. Slide 26: Slide 26

  27. Slide 27: Thank You

    THANK YOU

Delta Galil Industries — Q4 2019 Earnings Presentation on 6ix