Investors presentation Q1 Report March 31, 2015 May 29, 2015 - - PowerPoint PPT Presentation

Q1 Report March 31, 2015

Investors presentation

May 29, 2015

Confidentiality

This presentation has been prepared by Marcolin S.p.A. and its affiliates. The information contained herein is confidential and has been prepared solely for the needs of the adressee and is not to be relied upon by any other person or entity. Hence, if you wish to disclose copies of this report to any other person or entity, you must inform they that they may not use these reports for any purpose without Marcolin written consent. No representation, warranty or undertaking, express or implied, is made as to, and no reliance shoud be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein.

2

3

At a glance Key consolidated financials: LTM Viva Integration Project

Agenda

Appendix Key consolidated financials: Q1 2015

At a glance

Key facts 2015

> Project Fortogna > Portfolio licences

4

> Joint ventures

5

At a glance Key consolidated financials: LTM Viva Integration Project

Agenda

Appendix Key consolidated financials: Q1 2015

Key consolidated financials

* EBITDA is affected by a number of extraordinary items. For this reason it has been adjusted to restate the one-off effects deriving from the re-organization as represented in “Consolidated Adjusted EBITDA” page.

Sales

Consolidated Net sales increased +16,4% vs. PY; +5,5% at constant FX. Mainly driven by TF (+€ 6.4m), GU (+€3,0m), TB (+€ 1.5m) and the EZ contribution for €4,0m.

114.9

Million EUR

EBITDA

2015 Q1 EBITDA Reported is € 9,0m (€ 9.8m previous year). 2015 Q1 Adjusted EBITDA* (excluding one-offs) is € 15,2m or 13.2% (€ 11.4m PY). LTM Adjusted Run-Rate EBITDA for 2015 is € 51.6m or 13.6% on Net sales.

FY 15,2 13.2%

On Net sales

Net Debt

104.1

2015 Constant FX

6 Consolidated Net Debt as of March 2015 is € 220.2m (€ 196,1m end of December 2014), growing €24,1m vs. PY mostly due to Trade Working Capital increase (Inventory and Trade Receivables). The ratio Net financial position to LTM Adjusted Run-rate EBITDA is 4.14.

Million EUR in 2014

98.7

4.14

NFP / Adj LTM RR Ebitda

FY 51,6 13.6%

On Net sales

220.2

Million EUR

YTD Q1 Consolidated Sales

114.9

million EUR

2015 YTD Q1

@ const FOREX

+16.4% vs PY Global sales

By market destination

104.1 mill EUR +5.5% vs PY

7

North America Europe

Asia

RoW

52.2

• Mill. EUR

32.7

• Mill. EUR

10.0

• Mill. EUR

20.0

• Mill. EUR

45.4% 28.4% 8.7% 17.4%

+2.0% +31.7% +7.2% +13.1%

• Net Sales performance was positive: +€16.2m (+16.4%) above last year, driven by full recovery of Italy (+9,6%)

and growth of Far East and Key Accounts channel. In terms of brands the performance was driven by TF (+22%), TB (+64%), MB (+30%), BA (+1.0m), GU (+12,%) and EZ launched in the first quarter 2015 (+4m).

• Net Sales @ constant FX +€5.4m or +5.5% vs. PY.
• GM% in 2015 was 40bps below PY, mainly due to a price/volume effect. The selectively reduce prices for certain

product lines was however more than balanced by a corresponding increase in the volumes, especially in Domestic and Key Accounts Channels, which also triggered a positive variance in the brand mix.

• EBITDA Reported in 2014 is €9,0m vs. €9.8m last year (respectively 7,9% vs. 9.9% of Net sales).
• EBITDA Adjusted, excluding one-off items, would be 13.2% (or €15.2m) vs. 11,6% last year (or € 11.4m).
• Net Financial Costs of €1.4m include €4,2m for Bond interests accruals. Financials also include positive unrealized

exchange differences on the loan from Marcolin S.p.A. to Marcolin USA Corp.

8

YTD Q1 P&L Executive Summary

Consolidated Profit & Loss

9

9

Key financials: YTD Q1

YTD March

(EURm) Actual 15 Reported Actual 15 Reported %NS Actual 14 Reported Actual 14 Reported %NS Net sales 114,9 100,0% 98,7 100,0% Cost of sales (46,6)

• 40,6%

(39,7)

• 40,2%
• - Gross Margin

68,3 59,4% 59,0 59,8% Selling and marketing costs (53,4)

• 46,4%

(44,6)

• 45,2%

General and administrative expenses (9,9)

• 8,6%

(7,8)

• 7,9%

Other operating income and expenses 0,9 0,8% 0,8 0,8% Effects of accounting for associates 0,0 0,0% 0,2 0,2%

• - OPERATING PROFIT (EBIT)

6,0 5,2% 7,5 7,6% Net finance costs 1,4 1,2% (5,1)

• 5,2%
• - Profit before taxes

7,4 6,4% 2,3 2,4% Income tax expense (3,2)

• 2,8%

(2,1)

• 2,1%
• - Net Result

4,2 3,7% 0,3 0,3%

• - EBITDA

9,0 7,9% 9,8 9,9%

• - EBITDA ADJUSTED

15,2 13,2% 11,4 11,6%

• Net Trade Receivables: compared to Dec 14, the increase of €20.6m is explained by the higher sales and

particularly by the acceleration of the business at the end of the first quarter of 2015, due to a concentration of

• deliveries. In the period total consolidated DSO index is under control and increased by 5 days.
• Inventory: compared to Dec 14 has risen by €9,3m, mostly due to improve customer service aimed at reducing

delivery time, and to investing in supplies of continuing products (to be “never out of stock”). It has been also impacted by the discontinuity represented new brands, particularly Zegna and Pucci, which have been recently launched.

• Payables: strongly influenced by seasonality the concentration of payments of supply in the first quarter of the

year, Trade Payables are substantially stable at the end of March, despite the turnover increase.

• Net Financial Position: March 2015 increased from €196.1m (Dec 14) to €220.2m, with a change of €24.1m mostly

due to TWC, as detailed in the consolidated cash flow statement.

10

B/S Executive Summary

Consolidated Balance Sheet

11

Key financials: Q1

2015 and 2014 are Reported

Balance Sheet (EURm) Mar-15 Dec-14 Change vs Dec Net trade receivables 87,5 66,9 20,6 Inventory 109,4 100,1 9,3 Payables to suppliers (102,4) (102,3) (0,1) TRADE WORKING CAPITAL 94,5 64,6 29,9 Other receivables 15,6 14,1 1,5 Other payables (37,9) (31,0) (7,0) NET WORKING CAPITAL 72,2 47,8 24,4 Other receivables - medium/long term 39,1 39,4 (0,3) Equity investments 2,1 1,9 0,2 Net tangible assets 26,3 24,7 1,6 Net intangible assets 38,1 37,2 0,8 Goodwill 289,2 278,0 11,2 FIXED ASSETS 394,7 381,1 13,6 Funds and reserves (10,4) (10,0) (0,4) NET INVESTED CAPITAL 456,4 418,9 37,6 Financial debts - short term 53,1 41,4 11,7 Financial debts - medium/long term 201,1 199,2 1,9 FINANCIAL POSITION 254,1 240,5 13,6 Other current financial (28,4) (39,0) 10,6 Other non current financial (5,5) (5,5) (0,0) NET FINANCIAL POSITION 220,2 196,1 24,2 NET EQUITY 236,2 222,8 13,4 COVERAGE OF NIC 456,4 418,9 37,6

Net Financial Position

12

Key financials: Q1

1 2

(EURm) March 2015 December 2014 Short Term borrowings 53,1 41,4 Medium Long Term borrowings 208,8 207,2 Gross borrowings 261,9 248,6 Cash and cash equivalents 27,4 36,9 Financial receivables current 1,0 2,0 Financial receivables non current 5,5 5,5 Reported Net indebtedness befor Amortized Fees 228,0 204,1 Bond amortized fees (7,7) (8,1) Reported Net indebtedness after Amortized Fees 220,2 196,1 Revolving Credit Facility 20,0 20,0 Short term borrowings from Banks 19,4 15,0 M/L Term Loan - Current 2,2 1,3 Vendor Loan (HVHC) - Short Term 1,9 1,7 Bond accrued interests 6,5 2,3 Financial leasing VIVA 1,1 0,9 Other 1,9 0,2 Short Term gross borrowing 53,1 41,4 Senior Secured bonds 200,0 200,0 M/L Term Loan - Non Current 5,1 3,8 Vendor Loan (HVHC) - Long Term 2,4 2,1 Financial leasing VIVA 1,2 1,3 Other 0,1 0,1 Medium Long Term gross borrowing 208,8 207,2

2015 and 2014 are Reported

Consolidated Cash Flow Statement

13

Key financials: Q1

(EURm) March 2015 December 2014 Operating activities Profit before income tax expense 7,4 7,1 Depreciation, amortization and impairments 2,8 8,6 Accruals to provisions/ other non cash items 0,5 (5,0) CF from operating activities before changes in WC, tax and int. 10,7 10,7 Movements in working capital (27,7) (3,8) Income taxes paid (0,1) (3,5) Interest paid (0,4) (17,9) Net cash flows provided by operating activities (17,4) (14,4) Investing activities (Purchase) of property, plant and equipment (2,4) (6,2) Proceeds from the sale of property, plant and equipment 0,0 1,1 (Purchase) of intangible assets (0,6) (7,4) (Acquisition) of investment - Marcolin e Viva 0,0 0,0 Net cash (used in) investing activities (3,0) (12,5) Adjustments to other non-cash items 0,5 (4,6) Financing activities Net proceeds from/(repayments of) borrowings 8,9 26,1 Other cash flows from financing activities 0,0 0,0 Net cash from/(used in) financing activities 8,9 26,1 Net increase/(decrease) in cash and cash equivalents (11,1) (5,3) Effect of foreign exchange rate changes 1,5 3,7 Cash and cash equivalents at beginning of period 36,9 38,5 Cash and cash equivalents at end of period 27,4 36,9 2015 and 2014 are Reported

14

At a glance Key consolidated financials: LTM Viva Integration Project

Agenda

Appendix Key consolidated financials: Q1 2015

Revenues Analisys by market destination

Europe

million eur

Row ASIA North america

million eur million eur million eur

15

1,3696 1,1261

Ex rate EUR/USD

+2.0% +0.5% +8.9% +7.2% +2.2% +3.8%

Key financials: LTM

+31.7% +13.1%

As of March, 31st Full Year 2015 Q1 % 2014 Q1 % 2015 LTM % 2014 % Europe 32,7 28,4% 32,0 32,5% 131,1 34,6% 130,4 36,0% North America 52,2 45,4% 39,6 40,2% 152,7 40,4% 140,2 38,7% Asia 10,0 8,7% 9,4 9,5% 31,4 8,3% 30,7 8,5% Rest of World 20,0 17,4% 17,7 17,9% 63,2 16,7% 60,8 16,8% Total 114,9 100,0% 98,7 100,0% 378,3 100,0% 362,1 100,0%

Total @ constant FX (€ Mln)

104,1

change vs. PY

5,5% in € Mln, except percentages in € Mln, except percentages

16

EBITDA REPORTED EBITDA ADJUSTED *

7,6%

ADJ RUN-RATE EBITDA **

% 2015 LTM on net sales

12.6%

% 2015 LTM on net sales 8,1% in 2014

13.6%

% 2015 LTM on net sales 12,1% in 2014 13,9% in 2014

* excluding one-offs * including synergies

Ebitda performance – run rate ebitda post synergies (million eur)

Key financials: LTM

2015 MARCH LTM FY 2014 2014 MARCH LTM NET SALES

378,3 362,1 346,3

% vs. PY 4,5% 0,0

EBITDA

28,6 29,4 28,1

Adjustment 19,0 14,4 9,1

47,6 43,8 37,2

Management Fees 0,0 0,0 1,3 Germany J/V 0,0 0,0 0,4 EBITDA ADJUSTED

47,6 43,8 38,9

Synergies 3,9 6,4 8,5 ADJ RUN-RATE EBITDA

51,6 50,3 47,4

EBITDA ADJ % on Net sales

12,59% 12,10% 11,22%

EBITDA ADJ RR % on Net sales

13,63% 13,88% 13,68%

in € Mln, except percentages

CONSOLIDATED

17

At a glance Key consolidated financials: LTM Viva Integration Project

Agenda

Appendix Key consolidated financials: Q1 2015

Integration Plan

18

18

Viva Integration

TOTAL

(*)

18 months 6 months 3 m 3 m

2014 2015

3 m 6 months 3 m

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

US UK France Hong Kong Brazil Canada Germany

Integration Updates

19

19

Viva Integration

TOTAL

(*) 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

US UK France Hong Kong Brazil Canada Germany

15 months 6 months 4 months 3 m 3 m 3 m Distr. 15 months

Synergies & OTC

20

Synergies 2014 & 2015 One Time Costs 2014 & 2015

Viva Integration

in € Mln Original Budget Realized FY 2014 Estimation FY 2015 Realized Q1 2015 To Go

US

6,1 3,0 6,6 2,1 1,5

UK

1,0 0,5 2,0 0,4 1,1

France

0,8

• 0,9

0,9

Brazil

0,4

• 0,4

0,4

Hong Kong

0,2 0,1 0,2 0,1

• Total Sinergies

8,5 3,6 10,0 2,5 3,9 in € Mln Original Budget Spent FY 2014 New Estimation Q1 2015 To Go

US

6,4 6,3 9,4 2,7 0,4

UK

0,9 1,4 1,4

• France

1,0 0,9 2,3 1,3 0,2

Brazil

0,4 0,5 0,5

• Hong Kong

0,3 0,3 0,3

• Total OTC

9,0 9,4 14,0 4,0 0,6

21

At a glance Key consolidated financials: LTM Viva Integration Project

Agenda

Appendix Key consolidated financials: Q1 2015

Consolidated Adjusted Ebitda

22

Appendix

in € Mln, except percentages YTD Q1 2015 YTD Q1 2014 EBITDA pre-adjustment 9,0 9,8 Ordinary costs of discontinued Arizona operations 2,1

• Pro-Forma EBITDA

11,1 9,8 Senior management changes

• 0,6

Cost related to VIVA Integration 4,0 1,1 Other 0,1

• Total adlustments

4,1 1,6 EBITDA ADJUSTED 15,2 11,4 Net Sales 114,9 98,7 %

• n Net Sales

13,25% 11,55% in € Mln, except percentages LTM 2015 FY 2014 EBITDA pre-adjustment 28,6 29,4 Ordinary costs of discontinued Arizona operations 2,1

• Pro-Forma EBITDA

30,7 29,4 Senior management changes 1,5 2,0 Cost related to VIVA Integration 12,3 9,4 Other 3,1 3,0 Total adlustments 16,9 14,4 EBITDA ADJUSTED 47,6 43,8 Net Sales 378,3 362,1 %

• n Net Sales

12,59% 12,10%

Investor relation

Marcolin Contacts:

Massimo Stefanello CFO and COO +39 0437 777111 mstefanello@marcolin.com Alessandra Sartor +39 0437 777204 asartor@marcolin.com

23