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

Industria De Diseno Textil — Inditex — H1 2019 Earnings Presentation

44 slides from Industria De Diseno Textil's earnings presentation, Sep 11, 2019

1. Slide 1: Interim Half Year 2019

   Interim Half Year 2019 11 September 2019 Interim Half Year 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 Half Year 2019 3

4. Slide 4: Interim Half Year 2019: Continue developing our LT strategy

   Interim Half Year 2019: Continue developing our LT strategy Interim Half Year 2019 4

5. Slide 5: Unique business model: Global fully integrated Store & Online

   Unique business model: Global fully integrated Store & Online Interim Half Year 2019 5

6. Slide 6: Interim Half Year 2019: Strong operating performance

   Interim Half Year 2019: Strong operating performance  Strong execution of the business model  LFL +5%. Positive LFL’s in all geographic areas and concepts, in both stores and online  Ongoing fully integrated online rollout  Net income growth +10%  Healthy working capital evolution and strong ca

7. Slide 7: Global fully integrated Store & Online sales platform

   Global fully integrated Store & Online sales platform Store & Online sales 1H2019 Americas Europe ex-Spain 44% Europe Asia & RoW 24% Spain ex-Spain Spain 16% Asia & Americas 16% RoW Total 100% Interim Half Year 2019 7

8. Slide 8: Financial Summary

   Financial Summary Interim Half Year 2019 8

9. Slide 9: IFRS 16

   IFRS 16  Starting FY19  Changes in presentation no impact on cashflow or business  IFRS 16 will result in an estimated increase of 2-4% in FY19 net income vs former IAS 17 Interim Half Year 2019 9

10. Slide 10: Interim half year 2019

    Interim half year 2019 € million 1H19 1H18 19/18 Net sales 12,820 12,025 7% Gross profit 7,284 6,817 7% PBT 1,987 1,823 9% Net income 1,549 1,409 10%  Impact of Leases under IFRS16 rules in 1H19 PBT +€61m and Net Income +€46m Interim Half Year 2019 10

11. Slide 11: Satisfactory sales growth

    Satisfactory sales growth € million 1H19 1H18 19/18 Net sales 12,820 12,025 7%  LFL +5%  Positive LFL’s in all geographic areas and concepts, in both stores and online Interim Half Year 2019 11

12. Slide 12: Disciplined execution shown in gross margin

    Disciplined execution shown in gross margin 1H19 1H18 19/18 Gross margin 56.8% 56.7% +12 bps  Good execution of the model  Gross profit growth of +7% to €7.3 bn  Sustained commercial policies Interim Half Year 2019 12

13. Slide 13: Tight control of operating expenses

    Tight control of operating expenses € million 1H19 1H18 19/18 Op. expenses 3,823 4,459 (14%)  Operating expense growth without the impact of Leases under IFRS16 rules in 1H19 would have been +6% Interim Half Year 2019 13

14. Slide 14: Financial results

    Financial results € million 1H19 1H18 19/18 Financial results (77) 21 --  Impact of Leases under IFRS16 rules in 1H19 on Financial results -€75m Interim Half Year 2019 14

15. Slide 15: Flexible business model

    Flexible business model € million 1H19 19/18 Inventory 2,664 (5%) Receivables 841 (3%) Payables (6,632) 4% Operating working capital (3,127) 15% Net Cash & Equivalents 6,730 13% Interim Half Year 2019 15

16. Slide 16: +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 € 44 cents is due on 4 November 2019 Interim Half Year 2019 16

17. Slide 17: Concepts

    Concepts Interim Half Year 2019 17

18. Slide 18: Store & Online sales by concept

    Store & Online sales by concept Sales Pull&Bear Massimo Dutti Bershka Stradivarius Zara & Oysho Zara Home Uterque Interim Half Year 2019 18

19. Slide 19: Sales by Concept

    Sales by Concept € million 1H19 1H18 Zara & Zara Home 8,895 8,292 Pull&Bear 873 851 Massimo Dutti 844 811 Bershka 1,080 1,045 Stradivarius 776 690 Oysho 301 290 Uterqüe 52 46 Total 12,820 12,025 Interim Half Year 2019 19

20. Slide 20: Performance per concept

    Performance per concept  Strong performance at Stradivarius  Optimisation activity in Bershka and Pull&Bear Interim Half Year 2019 20

21. Slide 21: Global fully integrated

    Global fully integrated Interim Half Year 2019 21

22. Slide 22: Seamless Store & Online integration

    Seamless Store & Online integration Stratford, Click & Collect, Zara Corso London Vittorio Emanuele Milano Interim Half Year 2019 22

23. Slide 23: 2020: Full RFID rollout and inventory integration

    2020: Full RFID rollout and inventory integration Interim Half Year 2019 23

24. Slide 24: March: Online launch of Zara in Brazil

    March: Online launch of Zara in Brazil Interim Half Year 2019 24

25. Slide 25: May: Online launches of Zara in Saudi Arabia, UAE, Lebanon…

    May: Online launches of Zara in Saudi Arabia, UAE, Lebanon… East Nanjing Road Interim Half Year 2019 25

26. Slide 26: …Egypt, Morocco, Indonesia, Serbia and Israel

    …Egypt, Morocco, Indonesia, Serbia and Israel East Nanjing Road Interim Half Year 2019 26

27. Slide 27: August: Bahrain, Oman, Kuwait, Qatar and Jordan

    August: Bahrain, Oman, Kuwait, Qatar and Jordan East Nanjing Road Interim Half Year 2019 27

28. Slide 28: Sept/Oct: South Africa, Colombia, Philippines and Ukraine

    Sept/Oct: South Africa, Colombia, Philippines and Ukraine East Nanjing Road Interim Half Year 2019 28

29. Slide 29: Zara Home on Zara UK webpage 17 September

    Zara Home on Zara UK webpage 17 September Interim Half Year 2019 29

30. Slide 30: Outlook

    Outlook Interim Half Year 2019 30

31. Slide 31: 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 Interim Half Year 2019 31

32. Slide 32: Zara Man new store image

    Zara Man new store image Veldstraat, Ghent Interim Half Year 2019 32

33. Slide 33: Zara Kids new store image

    Zara Kids new store image Veldstraat, Ghent Interim Half Year 2019 33

34. Slide 34: Zara Istanbul

    Zara Istanbul Cevahir Mall Cevahir Mall Interim Half Year 2019 34

35. Slide 35: Zara Dubai

    Zara Dubai Dubai Mall Interim Half Year 2019 35

36. Slide 36: Zara Barcelona

    Zara Barcelona Paseo de Gracia Interim Half Year 2019 36

37. Slide 37: New Online studios for Zara

    New Online studios for Zara Veldstraat, Ghent Interim Half Year 2019 37

38. Slide 38: 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 Half Year 2019 38

39. Slide 39: Store & Online: A/W Campaign Editorial

    Store & Online: A/W Campaign Editorial East Nanjing Road Interim Half Year 2019 39

40. Slide 40: Store & Online: A Vision of Autumn

    Store & Online: A Vision of Autumn Interim Half Year 2019 40

41. Slide 41: Store & Online: Notes of Color

    Store & Online: Notes of Color Photography Gregory Harris. Featuring Tim Schuhmacher Interim Half Year 2019 41

42. Slide 42: Store & Online: Join Life collection - Denim from Denim

    Store & Online: Join Life collection - Denim from Denim East Nanjing Road Interim Half Year 2019 42

43. Slide 43: FY2019 Outlook

    FY2019 Outlook  Strong organic growth. Increased differentiation of the model  Ordinary capital expenditure c. €1.4 billion  Strong free cash flow generation  Autumn/Winter initial collections have been well received. Store & online sales in local currencies between 1 August and 8 September grew

44. Slide 44: Interim Half Year

    Interim Half Year 2019 11 September 2019 Interim Half Year 2019 44

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