Investor Presentation 30 May 2017 Investor Presentation 30 May 2017 - PowerPoint PPT Presentation

Investor Presentation 30 May 2017 Investor Presentation 30 May 2017

Disclaimer This presentation has been prepared and issued by Otto (GmbH & Co KG) and is intended for professional customers and institutional investors. The information in this presentation is based on data obtained from sources considered to be reliable. No representations or warranties, expressed or implied, are made by Otto (GmbH & Co KG) with regard to the accuracy or the completeness of the information contained in this presentation and any liability therefore (including in respect of direct, indirect or consequential damages) is expressly excluded. Further, the information given in this presentation contains predictions which are based on current assumptions and forecasts. Such predictions are subject to known as well as unknown risks, uncertainties and influences which may lead to a business development, final results and a financial situation which deviate from those given in the estimates. Otto (GmbH & Co KG) does not assume any obligation to update any forward-looking statements. This presentation is for information purposes only. It is not intended to be and should not be construed as an offer or solicitation to buy or sell any of the securities or issues mentioned in this presentation. 2 Investor Presentation 30 May 2017

Agenda 1 The Otto Group at a glance 2 Financial review 3 Strategy and outlook 4 Summary 3 Investor Presentation 30 May 2017

The Otto Group is one of the world’s largest online retailers  Founded as the mail- order company “Otto Versand “ in 1949, the Otto Group has been a family business since its foundation  Today, the Otto Group consists of 123 major companies operating in more than 30 countries in Europe, North and South America and Asia  The Otto Group is divided into three strategic segments: Multichannel Retail, Financial Services and Services  Currently, the Otto Group employs approximately 50,000 people  The Otto Group is one of the largest online retailers worldwide 4 Investor Presentation 30 May 2017

Otto Group: A success story for more than 65 years ~2000s to present 1980s and 1990s Transformation and innovation in the e-commerce age 1970s Internationalisation of the Otto 2010/2011 1950s and 1960s Group Development of the segments Internet sales exceeded catalogue sales for the first time Financial Services and Services 1974-1998 Foundation as a mail order business Expansion to France, UK, the Netherlands, 1969/74 2015 Japan, Spain, Austria, Italy, Hungary, 1949 Establishment of the Financial Services Dr. Michael Otto transfers majority stake to Switzerland, USA Werner Otto established the “Otto segment with the foundation of Hanseatic Michael Otto Foundation Versand ” mail -order business Bank and EOS Group 1987 2016 Otto is the world‘s largest mail order 1950 1972 Trend towards mobile commerce: Mobile business The first catalogue is published Development of the Services segment with exceeds desktop traffic for the first time the foundation of Hermes Versand Services 2017 Alexander Birken takes over as 5th CEO in the company’s history Werner Otto Günther Nawrath Dr. Michael Otto Hans-Otto Schrader Alexander Birken CEO (1949-1966) (1966-1981) (1981-2007) (2007-2016) (since 2017) 5 Investor Presentation 30 May 2017

Ownership position of the Otto family Otto family and Michael Otto Foundation (> 98%)  More than 98% of the shares in Otto (GmbH & Co KG) are owned by members of the Otto family and by the OTTO Aktiengesellschaft GSV Aktiengesellschaft für für Beteiligungen Beteiligungen Michael Otto Foundation  Dr. Michael Otto transferred his majority stake to the “Michael Otto Stiftung”, a non -profit foundation, in 2015. He continues to have influence through his position as the chairman of the Foundation Board  As a family-run business, the Otto Group follows a long- Otto (GmbH & Co KG) term oriented business strategy  The Otto family pursues a conservative dividend policy  Otto (GmbH & Co KG) serves both as holding company and as the operating entity for OTTO, the Otto Group’s company with the highest sales Multichannel Financial Services Retail Services 6 Investor Presentation 30 May 2017

Sustainability is part of the Otto Group’s core values Sustainability is a matter of conviction to our family owners • Sustainability has been a guiding principle for the Otto Group since the 1980s • Our family owners are also committed to sustainability with activities outside the Otto Group, e.g. via the Michael Otto Foundation for Environmental Protection Corporate Responsibility is a top-management task • Reconciling economic goals with social and ecological sustainability is a central part of the shareholders’ mandate to the Executive Board • All members of the Executive Board are incentivised to reach the Group’s Corporate Responsibility targets 7 Investor Presentation 30 May 2017

Besides Germany, the Otto Group is present in more than 30 countries International market presence Revenue by region 2016/17 The Group includes 123 Russia major companies and is Largest online shop for fashion 2.1% present in over 30 countries and lifestyle in Germany (otto.de) North Asia and other America regions 14.6% 1.9% Europe (excl. Germany / Russia) Germany 19.8% 61.5% More than 100 venture capital investments The international setup provides important diversification benefits 8 Investor Presentation 30 May 2017

A diversified business: The Otto Group is a globally active group of retailers and retail-related service providers Multichannel Retail Financial Services Services (Logistics, procurement and other (Receivables management, (E-Commerce, catalogue sales and retail stores) retail-related services) innovative financial services) 9 Investor Presentation 30 May 2017

Multichannel Retail  Domestic and foreign retailers with three Financial figures for the segment distribution channels: e-commerce, catalogue and over-the-counter retail stores In mEUR 2016/17 2015/16  Product range includes fashion, shoes and lifestyle articles, furniture and home Revenue 9,819 9,588 accessories, toys as well as electronics, sports and leisure goods EBITDA 403 433  Broad brand portfolio with diversification across countries, customer groups and price EBITDA margin 4.1% 4.5% ranges  E-Commerce is the main growth driver 10 Investor Presentation 30 May 2017

E-Commerce is the main growth driver  In FY 2016/17, the Group significantly increased online revenues by 10% on a like-for-like basis. E-commerce revenues now stand at 7 billion EUR  E-Commerce is by far the most important distribution channel of the Otto Group, representing 71% of the Group‘s retail revenues in FY 2016/17. The operating entity OTTO (otto.de) generates over 90% of its overall revenues online  Strong trend towards mobile commerce: Mobile already accounts for more than 50% of traffic at the Otto Group’s online shops Revenue by distribution channel in the Multichannel Retail segment E-Commerce 71% 68% 65% 61% 57% 53% 48% 44% 38% 35% 43% 31% 28% 24% 20% 16% Catalogue 15% 12% 13% 12% OTC retail 11% 11% 12% 13% 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 11 Investor Presentation 30 May 2017

Financial Services  Comprises retail-related financial services with a Financial figures for the segment focus on debt collection and receivables management In mEUR 2016/17 2015/16  Segment mainly characterised by the EOS Group  In addition, minority shareholdings in Hanseatic External revenue 732 678 Bank and Cofidis Group, which specialise in EBITDA 320 233 consumer credit  The Financial Services segment is largely EBITDA margin 43.7% 34.4% independent of the Multichannel Retail segment. More than 95% of revenues are generated with customers outside the Otto Group 12 Investor Presentation 30 May 2017

The Financial Services segment is dominated by the EOS Group, an international leader in receivables management. EOS Group: International presence in more than 25 countries  Established by the Otto Group in 1974 as Deutscher Inkasso- Dienst (DID)  The company operates under the EOS brand since 2000  Presence in more than 25 countries via 60 operating companies  More than 20,000 B2B customers worldwide trust in the EOS Group  EOS’ core business is receivables management. Its services include the purchase of non-performing receivables, fiduciary debt collection and business process outsourcing  Target industries are the banking sector, utilities and the telecommunications market, as well as the public sector, real estate, mail order and e-commerce  For many years the EOS Group has continuously maintained an “A” rating from rating agency Euler Hermes 13 Investor Presentation 30 May 2017