Delta Galil Industries Ltd. · TASE:DELG

Delta Galil Industries — Q3 2016 Earnings Presentation

23 slides from Delta Galil Industries's earnings presentation, 2016

  1. Slide 1: Results Overview Q3 2016

    INDUSTRIES LTD RESULTS OVERVIEW Q3 2016

  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 ‪ 30‬בספטמבר ‪.2016‬‬ ‫בין היתר‪ ,‬העובדות והנתונים ששימשו בסיס למידע המפורט במצג

  3. Slide 3: Acquisition of Delta Premium Brands

    ACQUISITION OF DELTA PREMIUM BRANDS WE SIGNED THE ACQUISITION AGREEMENT ON JUNE 28 WE CLOSED THE ACQUISITION ON AUGUST 26 PHASE ONE OF THE RESTRUCTURING PLAN WAS CONCLUDED ON SEPTEMBER 6 RECRUITED A NEW GM TO THE DELTA PREMIUM BRANDS IN OCTOBER WE ARE INTEGRATING THE EUROPEAN ACTIVITY WE ARE EXPECTI

  4. Slide 4: Improvement and Efficiency Measures

    IMPROVEMENT AND EFFICIENCY MEASURES INITIATED MERGING THE HEADQUARTERS OF 7FAM AND SPLENDID IN SEPTEMBER 2016 ELIMINATED DUPLICATE FUNCTIONS IN FINANCE, RETAIL, MARKETING AND PRODUCTION UNITS IN SEPTEMBER 2016 COMBINED TWO SHOWROOMS IN LA IN NOVEMBER 2016 RELOCATE TWO SHOWROOMS IN NY TO DELTA USA OF

  5. Slide 5: Splendid active collection

    nN DELTA GALIL ES LTD Studio-ready performance. Street- ready style. Designed with the premium fabrics Splendid is known for, our new active collection is made to stay on the move. Luxury casual knits, breathable textures and laid-back layers provide ultimate comfort and style with an athletic twist

  6. Slide 6: Delta Premium Brands

    DELTA PREMIUM BRANDS INCREASE DELTA’S BRANDED PORTFOLIO FROM 53% 65% EXPAND DELTA’S DIVERSIFICATION GROWING OUR CURRENT PRODUCTS PORTFOLIO BY USING 7 FOR ALL MANKIND AND SPLENDID BRANDS ENTERING NEW CUSTOMERS AND STRENGTHENING OUR RELATIONS WITH EXISTING CUSTOMERS EXPANDING OUR GLOBAL REACH INCREASE

  7. Slide 7: Acquisition Effect on Q3 2016 Financial Results

    ACQUISITION EFFECT ON Q3 2016 FINANCIAL RESULTS DELTA PREMIUM BRANDS - A NEW BUSINESS SEGMENT CONSOLIDATING THE FINANCIAL RESULTS STARTING SEPTEMBER 2016 $28.9M CONTRIBUTION TO SALES IN Q3 2016 $2M CONTRIBUTION TO EBIT IN Q3 2016 RESULTS OVERVIEW Q3 2016 7

  8. Slide 8: Purchase Price Allocation Highlights

    PURCHASE PRICE ALLOCATION HIGHLIGHTS $M PROPERTY AND EQUIPMENT (mainly real estate in LA) 29.7 WORKING CAPITAL 65.8 TRADEMARKS 44.6 INTANGIBLE ASSETS 5.4 OTHER LIABILITIES, NET (16.2) BARGAIN PURCHASE (10.4) TOTAL ASSETS ACQUIRED 118.9 RESULTS OVERVIEW Q3 2016 8

  9. Slide 9: One-Time Items Q3 and YTD 2016

    ONE-TIME ITEMS Q3 AND YTD 2016 ($ MILLION( RESTRUCTURING COST………………………………………………….….(6.9) BARGAIN PURCHASE………………………………………………………...10.4 DEAL COST ASSOCIATED WITH THE ACQUISITION …………………...(1.5) TOTAL IMPACT ON EBIT 2.0 TAX IMPACT………………………………………………………………….…..2.6 TOTAL IMPACT ON NET PROFIT 4.6 RESULTS O

  10. Slide 10: Q3 2016 Highlights

    Q3 2016 HIGHLIGHTS ($ MILLION( % Q3 Q3 CHANGE VS LAST 2016 2015 YEAR Sales 296.6 284.6 4% 4% SALES UP 4% ORGANIC SALES DOWN 6% Operating Profit % from sales Operating Profit 24.6 8.3% 21.2 7.5% 16% 22.5 22.1 Excluding One-Time items 2% OPERATING PROFIT UP 16% % from sales 7.6% 7.7% EBITDA 28.7 27.1

  11. Slide 11: YTD 2016 Highlights

    ($ MILLION( YTD 2016 HIGHLIGHTS YTD YTD % CHANGE 2016 2015 VS LAST YEAR Sales 802.8 792.9 1% 53.0 51.0 1% Operating Profit SALES UP 1% 4% % from sales 6.6% 6.4% ORGANIC SALES DOWN 4% Operating Profit 50.9 51.9 Excluding One-Time items (2%) 6.3% 6.5% % from sales OPERATING PROFIT UP 4% EBITDA 67.8 65

  12. Slide 12: Q3 Sales and EBIT by Segment

    Q3 SALES AND EBIT BY SEGMENT ($ THOUSANDS) SALES EBIT Q3 2016 Q3 2015 %CHANGE Q3 2016 Q3 2015 Delta USA 8,692 8,787 %from segment sales 112,800 133,457 (15%) 7.7% 6.6% Global Upper Market 7,050 8,164 %from segment sales 69,829 75,952 (8%) 10.0% 10.8% Schiesser 5,320 5,496 %from segment sales 52,148

  13. Slide 13: YTD Sales and EBIT by Segment

    YTD SALES AND EBIT BY SEGMENT ($ THOUSANDS) SALES EBIT YTD 2016 YTD 2015 %CHANGE YTD 2016 YTD 2015 Delta USA 20,615 23,201 %from segment sales 335,004 368,728 (9%) 6.1% 6.3% Global Upper Market 22,326 18,122 %from segment sales 208,694 213,425 (2%) 10.7% 8.5% Schiesser 5,663 9,889 %from segment sale

  14. Slide 14: Sales Analysis by Geographic Area

    SALES ANALYSIS BY GEOGRAPHIC AREA ($ MILLION( Q3 YTD %OF %OF % %OF %OF % 2016 2015 2016 2015 SALES SALES CHANGE SALES SALES CHANGE U.S.A 158.1 53% 172.4 61% (8%) 433.3 54% 469.7 59% (8%) Europe 47.8 16% 40.2 14% 19% 126.4 16% 115.2 14% 10% (excluding Germany) Germany 44.2 15% 39.7 14% 11% 116.1 14%

  15. Slide 15: Segmental Results on a Quarterly Basis

    SEGMENTAL RESULTS ON A QUARTERLY BASIS EXCLUDING ONE TIME ITEMS ($ THOUSANDS( 2015 2016 TRAILING TWELVE Q3 Q4 Q1 Q2 Q3 MONTHS EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES Delta USA 8,787 133,457 6,762 122,285 6,871 112,758 5,052 109,447 8,692 112,800 27,377 457,290 %from sales 6

  16. Slide 16: Capital Expenditures

    CAPITAL EXPENDITURES INVESTING IN OUR FUTURE GROWTH ($ MILLION( 32.1 28.6 CAPEX MANUFACTURING (MAINLY VIETNAM FACTORY) 16.7 SCHIESSER* 3.7 ISRAELI MARKET 3.0 OFFICES AND SHOWROOMS 5.7 OTHERS 3.0 TOTAL 32.1 YTD 2015 YTD 2016 *EXCLUDING MANUFACTURING RESULTS OVERVIEW Q3 2016 16

  17. Slide 17: Vietnamese Factory Launch

    VIETNAMESE FACTORY LAUNCH RESULTS OVERVIEW Q3 2016 17

  18. Slide 18: Balance Sheet

    BALANCE SHEET STRONG BALANCE SHEET POST ACQUISITION ($ MILLION( % % $50M SEP . 30 SEP . 30 FROM FROM CASH ON HAND 2016 2015 TOTAL TOTAL Cash and cash equivalents 49.6 5% 128.5 16% Other current assets 438.4 49% 353.2 46% $382M EQUITY Total current assets Non current assets 488.0 411.8 54% 46% 481.7

  19. Slide 19: Financial Indicators

    FINANCIAL INDICATORS 30.09.2016 30.09.2015 Current ratio* 1.86 2.74 Quick ratio* 0.84 1.58 Days of Sales Outstanding** 38 39 Days Payable Outstanding** 44 37 Inventory Days** 111 91 Operating cash flow – Q3 ($ million( 12.6 5.9 Operating cash flow – YTD ($ million) 15.5 10.2 Operating cash flow - La

  20. Slide 20: 2016 Updated Guidance

    2016 UPDATED GUIDANCE EXCLUDING ONE TIME ITEMS ($ MILLION EXCEPT PER SHARE DATA( % INCREASE 2016 2015 2016 GUIDANCE ACTUAL GUIDANCE COMPARED TO 2015 ACTUAL Sales 1,080 1,165-1,175 8%-9% EBIT 75.5 78-82 3%-8% EBITDA 95.3 99-103 3%-8% Net Income 48.5 49.5-52 2%-7% Diluted EPS )$( 1.88 1.93-2.02 2%-7%

  21. Slide 21: Summary

    SUMMARY SUCCESSFULLY COMPLETED ACQUISITION IMPLEMENTED PHASE ONE OF THE RESTRUCTURING SALES GROWTH IN EUROPE AND ISRAEL, PARTIALLY OFFSET BY WEAKNESS IN THE U.S. MARKET STRONG CASH-FLOW - $ 76M DURING LAST 12 MONTHS LAUNCHING OUR NEW VIETNAMESE SEAMLESS AND CUT & SEW FACTORY $3.5M DIVIDEND FOR Q3 AN

  22. Slide 22: Future Growth

    FUTURE GROWTH WE ARE WORKING ON OUR BUSINESS PLAN TO MAXIMIZE THE BENEFITS OF THE NEW ACQUISITION WE EXPECT OUR VIETNAMESE FACTORY WILL CONTRIBUTE TO OUR GROWTH IN 2017 & 2018 THE COMPANY IS FOCUSED ON GROWING ITS E-COMMERCE SALES WE CONTINUE WITH OUR INVESTMENTS TO ATTAIN DOUBLE DIGIT EBIT GROWTH I

  23. Slide 23: Thank You

    THANK YOU 23

Delta Galil Industries — Q3 2016 Earnings Presentation on 6ix