Delta Galil Industries Ltd. · TASE:DELG

Delta Galil Industries — Q4 2017 Earnings Presentation

26 slides from Delta Galil Industries's earnings presentation, February 2018

  1. Slide 1: Results Overview Q4 2017

    RESULTS OVERVIEW Q4 2017 February 2018

  2. Slide 2: 2017 Record Year

    ‫‪R E S U L T S‬‬ ‫‪O V E R V I E W‬‬ ‫‪Q 4‬‬ ‫‪2 0 1 7‬‬ ‫‪2017 RECORD YEAR‬‬ ‫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 ‪

  3. Slide 3: 2017 Record Year

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 2017 RECORD YEAR RECORD ACHIEVED IN 2017:  SALES INCREASED BY 16% TO $1.37B *  NET INCOME INCREASED BY 7% TO $51M  EPS* INCREASED BY 7% TO $1.98  EBITDA INCREASED BY 8% TO $116M 3 * EXCLUDING ONE TIME ITEMS

  4. Slide 4: 2017 Other Highlights

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 2017 OTHER HIGHLIGHTS  OPERATING CASH FLOW $75M  CASH ON HAND $139M  NET FINANCIAL DEBT TO EBITDA 1.1 DOWN FROM 2.0 POST ACQUISITION  DIVIDENDS DECLARED $14M 4

  5. Slide 5: 2017 Highlights

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 2017 HIGHLIGHTS  CONTINUOUS IMPROVEMENT IN GLOBAL UPPER MARKET  Transitioned our Israeli Seamless operation to Asia  Sales increase of 4.5%  EBIT increase of 7.6% excluding Vietnam impact  EBIT decrease of 3.9%  MARGIN IMPROVEMENTS FOR DGUSA  GM up 11

  6. Slide 6: DGPB Highlights

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 DGPB HIGHLIGHTS  DELTA PREMIUM BRANDS  Q4 EBIT $ 3.3M, YTD EBIT $ 13.5M  2 DCs consolidated into 1 in December 2017  7 FOR ALL MANKIND  Strong Same store sales after a few years of negative same store  Transition of the European activity completed in S

  7. Slide 7: DGPB Acquisition Recap

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 7 DGPB ACQUISITION RECAP  PAID $ 119M  BUILDING SALE $ 28M  WORKING CAPITAL $ 66M  CORPORATE OVERHEAD REDUCED SINCE ACQUISITION FROM 600 PEOPLE TO 316  COMPLETION OF CLOSING 13 LOSING STORES IN 2017 PLANNING ADDITIONAL 10 STORE CLOSURES IN 2018.  2017

  8. Slide 8: Driving Growth Year over Year: Sales 2009-2017

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 $1,368 DRIVING CAGR 11% GROWTH $1,080 $1,179 YEAR OVER $975 $1,032 YEAR $818 SALES 2009-2017 ($M) $679 $620 $573 2009 2010 2011 2012 2013 2014 2015 2016 2017 8

  9. Slide 9: Driving Growth Year over Year: EBIT 2009-2017

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 DRIVING CAGR 23% 87.4 GROWTH 74.4 75.5 83.2 YEAR OVER 67.9 YEAR EBIT 2009-2017 ($M) 50.7 Excluding one-time items 39.7 33.2 16.2 2009 2010 2011 2012 2013 2014 2015 2016 2017 9

  10. Slide 10: 2017 Initiatives: E-Commerce Focus

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 10 2017 INITIATIVES E-COMMERCE FOCUS ONGOING FOCUS ON OUR E-COMMERCE GROWTH  Implementing a new advanced digital platform for Delta Premium Brands (7 For All Mankind & Splendid)  Significant increase in sales to E-comm pure players  Doubling sales on our

  11. Slide 11: Q4 2017 Results

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 Q4 2017 Q3 2017 RESULTS ($ million) % change vs Q4 2017 Q4 2016 last year -1% Sales 371.6 376.3 (1%) Sales Operating Profit 32.5 32.3 1% Sales in original currency down 4% % from sales 8.7% 8.6% EBITDA 40.0 39.2 2% +1% % from sales 10.8% 10.4% Operating Prof

  12. Slide 12: 2017 Results

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 2017 ($ million) % change vs RESULTS 2017 2016 last year Sales 1,368.1 1,179.2 16% +16% Operating Profit % from sales 84.6 6.2% 85.3 7.2% (1%) Sales Operating Profit Sales excl. DGPB up 2% 87.4 83.2 5% Excluding one-time items % from sales 6.4% 7.1% EBITDA 1

  13. Slide 13: Q4 Sales and EBIT by Segment

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 Q4 SALES AND EBIT BY SEGMENT ($ thousands) SALES % change in EBIT Q4 2017 Q4 2016 % change original currency Q4 2017 Q4 2016 Delta USA 117,174 126,465 (7%) (7%) 10,016 10,153 % from segment sales 8.5% 8.0% Global Upper Market 68,975 69,385 (1%) (1%) 5,465 8,

  14. Slide 14: 2017 Sales and EBIT by Segment

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 2017 SALES AND EBIT BY SEGMENT ($ thousands) SALES % change in EBIT 2017 2016 % change original currency 2017 2016 Delta USA 445,321 461,470 (3%) (3%) 30,300 30,764 % from segment sales 6.8% 6.7% Global Upper Market 290,556 278,079 4% 4% 29,881 31,100 % from

  15. Slide 15: Sales Analysis by Geographic Area

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 SALES ANALYSIS BY GEOGRAPHIC AREA ($ thousands) Q4 YTD % of % of % % of % of % 2017 2016 2017 2016 sales sales change sales sales change U.S.A 197,245 53% 208,272 55% -5% 760,480 56% 641,582 54% 19% Europe 51,142 14% 54,915 15% -7% 203,750 15% 181,342 15% 12

  16. Slide 16: Segmental Results on a Quarterly Basis

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 SEGMENTAL RESULTS ON A QUARTERLY BASIS Excluding one time items ($ thousands) 2016 2017 TRAILING TWELVE Q4 Q1 Q2 Q3 Q4 MONTHS EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES Delta USA 10,153 126,465 6,081 109,201 8,286 118,787 5,917 100,160

  17. Slide 17: Capital Expenditures

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 CAPITAL EXPENDITURES 46 ($ million) 34 Manufacturing .…….…………………. 12.2 Schiesser* ……….………………….. 4.7 Israeli market ………………………... 3.6 DGPB …………………………….…… 9.0 Others ….……………………………... 4.5 Total ……...………………………..….. 34 2016 2017 *excluding manufacturing 17

  18. Slide 18: Strong Balance Sheet

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 STRONG ($ million) BALANCE Dec 31 2017 % FROM TOTAL Dec. 31 2016 % FROM TOTAL SHEET Cash and cash equivalents Other current assets 138.9 443.4 14% 43% 83.7 406.7 9% 45% $139M cash on hand Total current assets Non current assets 582.3 438.2 57% 43% 490.4 423.

  19. Slide 19: Financial Indicators

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 FINANCIAL INDICATORS 31.12.2017 31.12.2016 Current ratio 2.25 1.85 Quick ratio 1.21 0.97 Days of Sales Outstanding 36 37 Days Payable Outstanding 45 39 Inventory Days 107 88 Operating cash flow - Q4 ($ million) 55.0 61.1 Operating cash flow - YTD ($ million)

  20. Slide 20: Net Financial Debt to EBITDA

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 NET FINANCIAL DEBT TO EBITDA 2.0 1.8 1.6 1.4 1.1 0.7 0.8 0.7 0.7 Jun. 2012 Jul. 2012 Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Sep. 2016 Dec. 2016 Dec. 2017 After Schiesser After DGPB acquisition acquisition * EBITDA calculated based on Last 4 Quarters 20

  21. Slide 21: Diversified Portfolio

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 DIVERSIFIED Enables Delta to mitigate the market changes % from sales (for 2017) PORTFOLIO 21 The numbers are rounded

  22. Slide 22: 2018 Guidance

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 2018 GUIDANCE Excluding one time items Based on current market conditions Ex-rates used: Euro/USD 1.20; USD/NIS 3.50 ($ million except per share data) % INCREASE 2018 GUIDANCE 2017 ACTUAL 2018 GUIDANCE COMPARED TO 2017 ACTUAL Sales 1,368 1,400 - 1,440 2% - 5

  23. Slide 23: Future Growth: DGPB

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 FUTURE GROWTH: DGPB  CONTINUE IMPROVING OUR FINANCIAL RESULTS OF DGPB  LAUNCHING MARKETING CAMPAIGNS FOR 7 FOR ALL MANKIND AND SPLENDID IN 2018  DGPB LAUNCHES FOR 2018:  Splendid Yoga  Splendid Sleepwear  Seven For All Mankind men’s underwear  BEGINNI

  24. Slide 24: Future Growth: DGPB 2020 Goal

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 FUTURE GROWTH: DGPB 2020 GOAL  ACHIEVING SALES INCREASE MID SINGLE DIGITS AND EBIT TARGET OF 10% (15% FOR 7FAM)  INCREASING GLOBAL FOOTPRINT  DEVELOPING RTW PRODUCTS  INCREASING ECOMMERCE SALES 24

  25. Slide 25: Future Growth

    R E S U L T S O V E R V I E W Q 4 2 0 1 7 FUTURE GROWTH  LAST TWO YEARS INVESTMENTS FOR ADDITIONAL MANUFACTURING CAPACITY AND STARTUPS WILL BEAR FRUIT IN 2018 AND BEYOND  LAUNCHING OF CK BRAND KIDS UNDERWEAR IN 2018  LAUNCHING ACTIVE WEAR ECOMMERCE SITE IN ASIA IN Q3  FOCUSING ON PRODUCING PRIVA

  26. Slide 26: Thank You

    THANK YOU

Delta Galil Industries — Q4 2017 Earnings Presentation on 6ix