q1 report march 31, 2017
TRANSCRIPT
Q1 Report March 31, 2017
Investors presentation
May 25, 2017
Confidentiality
This presentation has been prepared by Marcolin S.p.A. and its affiliates. Theinformation contained herein is confidential and has been prepared solely for the needsof the adressee and is not to be relied upon by any other person or entity. Hence, ifyou wish to disclose copies of this report to any other person or entity, you mustinform them that they may not use these reports for any purpose without Marcolinwritten consent.No representation, warranty or undertaking, express or implied, is made as to, and noreliance shoud be placed on, the fairness, accuracy, completeness or correctness of theinformation or the opinions contained herein.
2
Agenda
3
Appendix
Key consolidated financials: Q1 2017
* EBITDA is affected by few extraordinary items. For this reason it has been adjusted to restate the one-off effectsas represented in “Consolidated Adjusted EBITDA” on Appendix section.
Sales
EBITDA
Net Debt
4
Key consolidated financials
124.8
12.4%On Net sales
122.3
15.5 15.812.6%
Reported Adjusted
On Net sales
Proforma
267 2455.3x 4.9x
Q1 2017 Q1 2016
+ 2.0% PY
Consolidated Net sales increased +2.0% vs. PY; mainly driven by TF (+3%), SK (+23%) and EZ (+29%).Good performance of new brands Omega and Moncler.
Q1 17 EBITDA Reported is € 15.5m, + 8.7% vs. PY.Q1 17 Adjusted EBITDA* is € 15.8m or 12.6%(€15.2m or 12.4% PY).
NFP proforma Q1 17 is € 245.1m considering LVMH capital increase rescheduled on Q2 17. The ratio NFP proforma to Adj LTM EBITDA is 4.9x
YTD Q1 2017 ConsolidatedSales
124.8million EUR
2017 YTD Q1
+2.0% vs PY
Global salesBy market destination
5
Americas
Europe Asia
RoW
51.8Mill. EUR
47.6Mill. EUR
9.3Mill. EUR
16.1Mill. EUR
41.5%
38.1%7.5%
12.9%
+11.6%
-3.0%
-18.5%
+8.7%
PY like-for-like perimeter
Consolidated Profit & Loss
66
Key financials: Q1 2017
(EURm) Reported %NS Reported %NS Var %
Net sales 124.8 100.0% 122.3 100.0% 2.0%
Gross Margin 74.1 59.4% 72.7 59.5% 1.9%
EBITDA 15.5 12.4% 14.3 11.7% 8.7%
EBIT 11.0 8.8% 10.9 9.0% 0.6%
EBITDA ADJUSTED 15.8 12.6% 15.2 12.4% 4.1%
Q1 17 Q1 16
• Net Sales: the increase compared to PY is 2.0% (+€2.5m); flat at constant FX.
• GM: solid performance of GM thanks to price and cost control despite market pressure.
• EBITDA Reported: the increase compared to PY is mainly due to lower one-off items and theimprovement of operating leverage (which improved the EBITDA Adjusted).
TWC
77
91 73 88
129127 122
(116) (129) (113)
103 71 97
Mar-17 Dec-16 Mar-16
Receivables Inventories Payables
As % of Net Sales 23% 16% 22%
Key financials: Q1 2017
• TWC: increase vs Dec 16 is a timing effect due to business seasonality which will beabsorbed during the year.
• Trade Receivables: the increase vs Dec 16 is mainly related to seasonality effect; theincrease vs Mar 16 is due to higher Q1 net sales. DSO index continues to improvecompared to previous periods (5 days vs Dec. 16).
• Trade Payables: the decrease vs Dec 16 is primarily attributable to licensors payments.
• Inventory is slightly increasing based on expected higher turnover.
Consolidated Cash Flow Statement (Net Debt)
8
Key financials: Q1 2017
Consolidated Proforma Cash Flow (Net Debt)
9
Key financials: Q1 2017
Bridge between actual NFP Q1 2017 and NFP Proforma Q1 2017 based on assumption of roadshow presentation
245.1
NFP PROFORMA Q1 2017
Million EUR
LTM ADJ EBITDA Q1 2017
50.4Million EUR
RATIO NFP TO LTM ADJ EBITDA
4.9x …as per roadshow presentation
1010
Signature of Joint Venture agreement with Rivoli Group, one of the largest luxury retailers in the Middle East Area
1
Early Renewal of Diesel License Agreement….better economic condition and no renewal fees
2
JV-LVMH…complete antitrust and other regulatory approval processes
1
Looking at strengthening presence in Mexico and Japan area…JVs2
Next steps…
Market and Marcolin key trends
Updates
Agenda
11
Appendix
Key consolidated financials: Q1 2017
Consolidated Profit & Loss
1212
Appendix
(EURm) Reported %NS Reported %NS
Net sales 124.8 100.0% 122.3 100.0%
Cost of sales (50.7) -40.6% (49.6) -40.5%
Gross Margin 74.1 59.4% 72.7 59.5%
Selling and marketing costs (51.4) -41.2% (51.3) -41.9%
General and administrative expenses (7.3) -5.8% (7.4) -6.1%
Other operating income and expenses 0.1 0.1% 0.2 0.2%
EBITDA 15.5 12.4% 14.3 11.7%
Amortization-Depreciation (4.5) -3.6% (3.3) -2.7%
Operating Profit 11.0 8.8% 10.9 9.0%
Net finance costs (18.7) -14.9% (7.1) -5.8%
Profit before taxes (7.6) -6.1% 3.8 3.1%
Income tax expense 1.0 0.8% (0.7) -0.5%
Net Result (6.7) -5.3% 3.2 2.6%
EBITDA ADJUSTED 15.8 12.6% 15.2 12.4%
Q1 2017 Q1 2016
Consolidated Balance Sheet
1313
Appendix
Balance Sheet (EURm) Mar-17 Dec-16 Change
Trade receivables 90.6 72.6 17.9
Inventory 128.5 126.9 1.6
Trade Payables (116.3) (128.5) 12.2
TRADE WORKING CAPITAL 102.7 71.0 31.7
Other assets 13.3 13.1 0.2
Other liabilities (41.3) (36.0) (5.3)
NET WORKING CAPITAL 74.8 48.1 26.6
Other non current assets 40.3 36.4 3.9
Equity investments 1.0 0.9 0.1
Property, plant and equipment 25.8 25.5 0.3
Intangible assets 48.5 49.8 (1.3)
Goodwill 289.5 290.9 (1.4)
FIXED ASSETS 405.2 403.6 1.6
Funds (8.1) (7.8) (0.3)
NET INVESTED CAPITAL 471.8 443.9 28.0
Current financial liabilities 57.8 51.7 6.1
Non current financial liabilities 250.3 199.9 50.4
FINANCIAL POSITION 308.0 251.6 56.5
Current financial assets (38.0) (42.9) 4.9
Non current financial assets (3.1) (3.8) 0.7
NET FINANCIAL POSITION 267.0 204.8 62.1
EQUITY 204.9 239.0 (34.1)
COVERAGE OF NIC 471.8 443.9 28.0
Consolidated Adjusted Ebitda
14
Appendix
in € Mln, except percentages Q1 2017 Q1 2016
EBITDA pre-adjustment 15.5 14.3
Costs of discontinued operations 0.0 0.0
Pro-Forma EBITDA 15.5 14.3
Senior management changes 0.3 0.9
Total adjustments 0.3 0.9
EBITDA ADJUSTED 15.8 15.2
Net Sales 124.8 122.3
% on Net Sales 12.6% 12.4%
in € Mln, except percentages LTM 2017 LTM 2016
EBITDA pre-adjustment 47.7 45.0
Costs of discontinued operations 0.7 0.7
Pro-Forma EBITDA 48.3 45.6
Senior management changes 1.9 1.5
Cost related to VIVA Integration 0.0 3.1
Other 0.1 0.0
Total adjustments 2.0 4.6
EBITDA ADJUSTED 50.4 50.2
Net Sales 444.4 442.3
% on Net Sales 11.3% 11.3%
Net Financial Position
15
1
2
Appendix
(EURm) Mar-17 Dec-16
Current financial liabilities 57.8 51.7
Non current financial liabilities 256.4 205.0
Financial Liabilities 314.2 256.7
Cash and cash equivalents 37.3 42.2
Current, Non Current financial assets and Amortized Fees 9.9 9.7
Financial Assets 47.2 51.9
Net Financial Position 267.0 204.8
Revolving Credit Facility 30.0 25.0
Short term borrowings from Banks 8.8 8.3
Current Financial Loan 17.0 15.5
Bond accrued interests 1.6 2.5
Current Financial lease 0.4 0.4
Current financial liabilities 57.8 51.7
Senior Secured bonds 250.0 200.0
Non Current Financial Loan 5.7 4.2
Non Current Financial lease 0.7 0.8
Non Current financial liabilities 256.4 205.0
Refinancing Transaction Overview – RoadshowPresentation
16
Sources €m Uses €m
New Senior Secured FRNs 250.0 Refinance existing SSNs 200.0
Capital Increase (LVMH) 21.9 Call premium 8.5
New ssRCF 10.0 Existing bond accrued interest 4.3
Cash on B / S 13.7 Repay existing ssRCF 25.0
Fees and expenses 6.5
Dividend related to Vendor Loan Repayment 30.0
Partial repayment of Bilateral Facilities 21.4
Total Sources 295.6 Total Uses 295.6
Adj.
PF Sep-16 Amount (€m) xRef. EBITDA Δ Amount (€m) xRef. EBITDA`
Reference Adjusted EBITDA 50.3 – 50.3
Cash and cash equivalents (43.3) (0.9x) 13.7 (29.6) (0.6x)
Revolving credit facility (€30m) 25.0 0.5x (25.0) – –
New revolving credit facility (€40m) – – 10.0 10.0 0.2x
Other secured debt 0.9 0.0x – 0.9 0.0x
New Senior Secured FRNs – – 250.0 250.0 5.0x
Senior Secured Notes 200.0 4.0x (200.0) – –
Net Secured debt 182.6 3.6x 48.7 231.3 4.6x
Other unsecured debt 36.4 0.7x (21.4) 15.0 0.3x
Total Net debt 219.0 4.4x 27.4 246.3 4.9x
Current Capitalisation PF Capitalisation
Sources and uses
Pro forma capitalisation
(1) The formation of the JV with LVMH, and, therefore, the capital increase from LVMH, are subject to certain conditions, including regulatory approval and other standard closing conditions, which may not occur. The proceeds from the capital increase will not be received on the issue date, if at all, but are expected to be received in the second quarter of 2017.
(2) Redemption of existing SSNs at a premium of 104.25%.(3) Accrued and unpaid interest as of, but excluding, February 14, 2017, the assumed date of redemption of the Existing 2019
Notes. (4) Dividend to shareholder to repay Vendor Loan and related costs, taxes and fees.
(5) The partial repayment of these Bilateral Facilities will not occur on the Issue Date. We expect to make the partial repayment shortly following the completion of the Capital Increase, which may not occur, but which we expect to occur in the second quarter of 2017.
(6) Figure represents the aggregate principal amount of the Notes and does not reflect €5.6m of unamortized transaction costs or €6.7m of accrued interest, each as of September 30, 2016.
(7) These adjustments do not include €2.7 million paid by us on December 5, 2016 in respect of the final deferred payment for the Viva Acquisition or €1.3 million to be paid by Marcolin USA to settle a tax claim with the Viva sellers, which will be paid on or about the Issue date, and in no event later than February 15, 2017.
Appendix
Investor relation
17
Marcolin Contacts:
Sergio BorgheresiCFO
Rami SaidehCAO
+39 0437 [email protected]