2014 ANNUAL RESULTS 1 Draft Charles Vögele Group 2015 Charles Vögele Group 2015
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 PROGRESS IN A CHALLENGING MARKET ENVIRONMENT Successful start to spring season, Negative market growth in autumn Clothing market performed well in first half of 2014 Unusually warm autumn hampered 4th quarter sales Goal of breaking even at EBIT level achieved Only just failed to stop decline in like-for-like sales Consolidated loss reduced again Operational focus on turnaround measures Sharpening the collection focus Planning and implementation of store format strategy Improving merchandise management/availability Charles Vögele Group 2015 Charles Vögele Group 2015 2
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 CHARLES VÖGELE WELL ON TRACK Overview development EBITDA/EBIT 2010 - 2014 150 100 50 EBITDA 2014 2011 2012 2013 2010 0 EBIT 2010 2011 2012 2013 2014 Completion -50 management team Development Country portfolio Focus on turnaround turnaround streamlined measures: -100 concept Store format strategy Range:Structure Range focus Focus on collection defined Merchandise -150 merchandise management management Store format strategy: Focus on cash Start rollout Turnaround confirmed: management Charles Vögele Group 2015 Review country 3rd consecutive half-year and costs portfolio Positive EBIT with pos. EBITDA 3
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 KEY FIGURES 2014 Breakeven operating result , Consolidated loss reduced again Gross saes reduced by -4.5% (CHF - 51 million) to CHF 1’076 million, or -1.1% after adjusting for currency and floorspace (like- for-like) Better quality sales: gross profit margin above previous year at 67% (PY: 65.8%) Operating expenses reduced by CHF 30 million to CHF 563 million Positive EBITDA of CHF 41 million (PY: CHF 30* million) Breakeven EBIT of CHF 2 million (PY: CHF -20* million) Consolidated loss reduced again to CHF -11 million (PY: CHF -30* million) Charles Vögele Group 2015 * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 4
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 KEY FIGURES 2014 Turnaround in gross profit and EBITDA confirmed (CHF m) Streamlining the portfolio Stable floorspace productivity L-f-l reduction in sales in 2nd half-year Rise in profit margin Cost trend has further reduced break-even point Fourth consecutive half-year with positive Charles Vögele Group 2015 EBITDA 5
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 KEY PILLARS OF TURNAROUND CONCEPT MANAGEMENT AND IMPROVING GET CLOSER ORGANIZATION PERFORMANCE TO THE MARKET Group Management Sales quality Range: complete Styles defined Availability of goods Management structure Sales floors: Development Streamlining country/store and organization of store format strategy portfolio stabilized Market: Focus on core More focused marketing Focus on daily business Swiss market activities and core projects Cost effiency Charles Vögele Group 2015 6
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 INCOME STATEMENT 2014 2013* r r in % (CHF million) Gross sales 1'076 1'127 (51) (5%) Net sales 901 947 (46) (5%) Gross profit 604 623 (19) (3%) as % of net sales 67.0% 65.8% Total operating expenses (563) (593) +30 +5% as % of net sales 62.5% 62.6% EBITDA 41 5 +11 as % of net sales 4.6% 3.2% EBIT 2 (15) +22 as % of net sales 0.2% -2.1% Net profit/(loss) (11) (30) +19 Charles Vögele Group 2015 * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 7
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 CONSOLIDATED GROSS SALES (in CHF million) Like-for-like sales decline in 2nd half-year Decline on l-f-l basis: -1.1% Currency 1st HY 2nd HY effect Net closures on l-f-l on l-f-l 11 basis: basis: -28 -3.4% +1.1% 6 -18 1'127 1'116 1'116 1'088 1'088 CHF -40 million / -3.5% 1'076 1'076 Charles Vögele Group 2015 2013 2013 ca 2014 8
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 NEGATIVE MARKET GROWTH FROM OCTOBER Textil-Revue 21. 11. 2014 N-TV, 31. 10. 2014 Charles Vögele Group 2015 Tagesschau.de Textil-Revue 17. 10. 2014 Source: press 9
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 GROSS PROFIT Sales quality improved Gross profit down by CHF -19 million to CHF 604 million (PY: CHF 623 million) Fall in volume, currency influence: CHF -30 million Positive margin effect: CHF 11 million Influencing factors: Streamlining of floorspace (Ø -4%) Further reduction in discounted sales rate Decline in sales in 2nd half-year Positive currency effect Charles Vögele Group 2015 10
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 OPERATING COSTS (in CHF million) CHF 25 million saving after currency influences Currency effect -5 Personnel -2 -9 Premises -9 593 Other 588 operating Advertising -4 costs -1 Administrative expenses 563 Charles Vögele Group 2015 2013* 2013 ca* 2014 * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 11
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 REGIONAL PERFORMANCES Three out of four regions with positive EBITDA Region Switzerland Region Germany Region Benelux (CHF million) 2014 2013* 2014 2013* 2014 2013* Gross sales 344 355 356 363 139 148 Net sales 309 321 290 296 112 120 EBITDA 47 49 20 20 (6) (5) EBIT 30 33 9 0 (8) (6) 168 170 281 291 141 148 Store portfolio at 1 January (1) (2) 1 (10) (2) (7) Net change 167 168 282 281 139 141 Store portfolio at 31 Dec Group’s headquarter Region CEE Group and consolidation (CHF million) * * * 2014 2013 2014 2013 2014 2013 Gross sales 237 261 0 0 1076 1127 Nettoumsatz 190 210 0 0 901 947 Charles Vögele Group 2015 EBITDA 5 0 (25) (34) 41 30 EBIT 0 (5) (29) (42) 2 (20) 191 203 781 812 Store portfolio at 1 January (16) (12) (18) (31) Net change 175 191 763 781 Store portfolio at 31 Dec * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 12
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 OVERVIEW OF EBIT TO NET PROFIT Improved net result 2014 2013* r (CHF million) EBIT 2 (20) +22 as % of net sales 0.2% -2.1% Financial expenses (10) (11) +1 Exchange losses (1) 4 (5) Tax expenses (2) (3) +1 Net profit/(loss) (11) (30) +19 as % of net sales -1.2% -3.1% Lower interest expense and optimized cash management Realized currency losses Tax adjustment in previous year Charles Vögele Group 2015 * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 13
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 INVESTMENTS Increased investment in store portfolio 2014 2013 r (CHF million) Store openings 3.3 1.4 +1.9 Refurbishments/renovations 10.7 4.9 +5.8 Other 2.6 1.4 +1.2 Total regions 16.6 7.7 +8.9 Group infrastructure 3.6 3.5 +0.1 Divestment (4.7) (0.5) (4.2) Total Group, net 15.5 10.7 +4.8 Charles Vögele Group 2015 14
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 FREE CASH FLOW 2014 2013* r (CHF million) 41 30 +11 EBITDA Change in net working capital 2 17 (15) Net financial & tax expenses (14) (9) (5) Cash flow from operating activities 29 38 (9) Cash flow from investing activities (16) (11) (5) Free Cash Flow 13 27 (14) Cash flow from financing activities 14 (44) +58 Net change in cash & cash equivalents 27 (17) +44 Charles Vögele Group 2015 * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 15
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 INVENTORIES Improved inventory structure Inventory (million items) 20.6 (CHF 149 million) 18.9 (CHF 140 million) 4.6 4.1 Upcoming spring/summer collection Actual autumn/winter collection 7.4 Old spring/summer collections 8.3 Old autumn/winter collections 6.1 Charles Vögele Group 2015 4.8 2.5 1.7 31.12.2013 31.12.2014 16
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 KEY BALANCE SHEET FIGURES Net debt reduced 30.12.2014 31.12.2013* r (CHF million) Cash and cash equivalents 97 70 +27 Inventories 140 149 (9) Tangible assets 215 235 (20) Net debt 77 89 (12) Total assets 473 483 (10) Shareholders' equity 155 166 (11) Equity ratio 33% 34% (1%) Charles Vögele Group 2015 * Prior year figures adjusted to Swiss GAAP FER for purposes of comparison 17
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 OUTLOOK FOR 2015 We are the leading Swiss fashion retailer, offering highest quality in the mid-price sector. We are known for Charles Vögele Group 2015 our up-to-date, reliable range and friendly service. 18
REVIEW OF 2014 ANNUAL RESULTS 2014 OUTLOOK FOR 2015 CORE THEMES 2015 Communications/marketing Channels/core messages CRM Collection/procurement Resource management: Sales Suppliers Customers Signature and style Organizational development Format strategy Pricing Permanent management Sales training/PEP E-shop Sourcing/fast-track IT Roadmap Merchandise management/logistics Floorspace/module planning Charles Vögele Group 2015 Planning system/process 72h re-assort 19
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