Global Growth Opportunities
Disclaimer This document is of a purely informative nature and does not constitute an offer to sell, exchange or buy, or the solicitation of an offer to buy, securities issued by any of the companies mentioned herein. This document contains forward-looking statements. All statements other than statements of historical fact included herein, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations are forward-looking statements. Any such forward-looking statements are subject to risk and uncertainty and thus could differ materially from actual results. Some of these risks include, amongst others, ongoing competitive pressure in the sector, consumer tastes and spending trends, economic, political, regulatory and trade conditions in the markets where the Inditex Group is present or in the countries where the Group s products are manufactured or distributed. The risks and uncertainties that could affect the forward-looking statements are difficult to predict. The company assumes no obligation to publicly revise or update its forward-looking statements in the case of unexpected changes, events or circumstances that could affect them. Given the uncertainties of forward-looking statements, we caution readers not to place undue reliance on these statements. For a discussion of these and other factors that may affect forward looking statements and the Inditex Group s business, financial conditions and results of operations, see the documents and information communicated by the company to the Comisión Nacional del Mercado de Valores (the Spanish Securities Commission). The contents of this disclaimer should be taken into account by all persons or entities. 2
Highlights Global fashion retailer 8 independent concepts 6,300 stores / Online / Mobile Sales 15.9 bn (FY12) Cash flow 3.3 bn (FY12) Market cap. 72bn Unique business model 3
Global fashion retailer 5 continents 86 markets Northern and southern hemisphere 4
Business Model
Flexible, integrated business model Design Store Manufacturing & Sourcing Distribution & Logistics 6
Customer driven Compelling mix of latest fashions and quality at affordable prices Unique product strategy 36,000 new designs per year delivery to stores 2-6 times per week Customer interaction daily in-store feedback allows constant modification of collections Attractive stores in prime locations 7
Distribution and logistics Central distribution Shipment to all stores worldwide twice a week Orders to stores in 24-48 hours 8
Retail experience Latest fashion trends Prime locations Fresh items twice a week Direct communication No traditional advertising 9
Strong growth Net Sales ( billion) 15.9 13.8 12.5 10.4 11.1 9.4 8.2 2006 2007 2008 2009 2010 2011 2012 10
Global opportunity Business model avoids the main fixed costs associated with international expansion Central inventory position No local distribution centers per market No advertisement when entering a new market Lean head office per market servicing all formats Online sales 11
Global sales platform Store sales (%) 1H13 1H12 Americas Europe ex-spain 45% 44% Spain Europe ex-spain Asia & RoW Spain 22% 19% 20% 22% Asia & RoW Americas 14% 14% Store sales: Includes sales in OMS and franchises 12
Multi-concept strategy Market segmentation through distinctive concepts Independent management teams All share same business model A global presence Zara 1975 Pull&Bear Massimo Dutti 1991 Bershka 1998 Stradivarius 1999 Oysho 2001 Zara Home 2003 Uterqüe 2008 13
Global online sales From 29 Oct 2007 Zara Home Europe: Austria, Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Spain, Sweden, UK, Switzerland, Norway, Finland, Poland 2 Sept 2010 Zara Spain, Portugal, France, Germany, Italy, UK 4 Nov 2010 Zara Netherlands, Belgium, Luxembourg, Austria, Ireland 3 March 2011 Zara Switzerland, Monaco, Sweden, Denmark, Norway From 6 Sept 2011 Massimo Dutti, Bershka, Pull&Bear, Stradivarius, Oysho, Uterqüe Europe 7 Sept 2011 Zara United States 20 Oct 2011 Zara Japan 7 March 2012 Zara Poland 5 Sep 2012 Zara China Oct. 2012 Massimo Dutti, Zara Home United States 6 March 2013 Zara Canada 28 Aug 2013 Zara Russian Federation 1 October 2013 Massimo Dutti, Bershka, Stradivarius, Oysho Progressive roll-out All Concepts Globally Russian Federation
Inditex Concepts
Multi-concept approach 16
Operating autonomy, central support Arteixo (La Coruña) Inditex Zara Zara Home Narón (La Coruña) Pull&Bear Tordera (Barcelona) Massimo Dutti Bershka Oysho Uterqüe Sallent (Barcelona) Stradivarius 17
Multi-concept strategy Age Target Sales Breakdown Zara Massimo Dutti Pull&Bear Bershka Stradivarius Oysho Zara Home Uterqüe Non- Zara Zara 0 10 20 30 40+ 18
Zara Latest fashions for women, men and children Headquarters in Arteixo (A Coruña) FY12 Sales: 10.5 bn FY12 EBIT: 2.2 bn 1H13 Stores: 1,936 19
Massimo Dutti Elegant design with excellent quality for men, women and children Headquarters and distribution centre in Tordera (Barcelona) FY12 Sales: 1.1 bn FY12 EBIT: 197 m 1H13 Stores: 634 20
Pull&Bear Casual fashion and sport styles for young men and women (14 to 28) Headquarters and distribution centre in Narón (A Coruña) FY12 Sales: 1.1 bn FY12 EBIT: 182 m 1H13 Stores: 825 21
Bershka Latest fashions for young women and men (13 to 23) Headquarters and distribution centre in Tordera (Barcelona) FY12 Sales: 1.5 bn FY12 EBIT: 240 m 1H13 Stores: 910 22
Stradivarius Urban fashion at attractive prices for young women (18 to 35) Headquarters and distribution centre in Sallent (Barcelona) FY12 Sales: 961 m FY12 EBIT: 208 m 1H13 Stores: 816 23
Oysho Latest trends in women s loungewear, lingerie and undergarments Headquarters and distribution centre in Tordera (Barcelona) FY12 Sales: 314 m FY12 EBIT: 26 m 1H13 Stores: 533 24
Zara Home Textiles for bed, bath and table complemented by decorative items Headquarters in Arteixo (A Coruña) FY12 Sales: 350 m FY12 EBIT: 41 m 1H13 Stores: 363 25
Uterqüe Premium accessories (bags, shoes, costume jewellery) Headquarters and distribution centre in Tordera (Barcelona) FY12 Sales: 74 m 1H13 Stores: 87 26
Financial Summary
Highlights Billion FY2012 % 12/11 Net sales 15.9 16% Gross profit 9.5 16% EBITDA 3.9 20% Net income 2.4 22% 28
Outlook
Outlook Global growth opportunities Continued optimisation of retail base Global online sales Outlook FY2013 30
Global growth opportunities Global presence Flexible business model Latest fashions at the right time at affordable prices Multi-concept / Multi-channel Profitable expansion of the business remains a key priority 31
Global growth opportunities Growth in Europe Significant growth opportunities in Western and Eastern Europe All concepts Online sales in 20 markets. 32
Global growth opportunities Growth in Asia: Leverage strategic presence Strong growth opportunities Presence in all key markets Multi-concept & online sales expansion. Zara online in China and Japan. 33
Global growth opportunities Growth in the Americas Attractive growth markets Multi-concept expansion: Massimo Dutti in US and Canada, Stradivarius in Mexico, Zara Home in Brazil Online sales: US and Canada for Zara, Massimo Dutti and Zara Home 34
Global growth opportunities Australia and South Africa Ongoing expansion 35
Continued optimisation of retail base Enlargement of flagships Rollout of new store image Larger new stores 36
Enlargement of flagships 2012-2014 New York Fifth Avenue Beijing The Place London Brompton Road Moscow Europeinski Paris Opera Milan Via Torino Madrid Serrano Amsterdam Kalverstraat Barcelona Paseo de Gracia Paris Champs Elysees 37
Rollout of new store image 2012-2014 London Parkhouse Shanghai W. Nanjing Road Paris Faubourg St. Honoré Tokyo Ginza Zurich Bahnhofstrasse Hong Kong Queen s Road Munich Neuhauser Strasse Taipei Q Square Vienna Haas Haus London Regent Street 38
Larger new stores Continued optimisation of retail base Increased product visibility Stronger visual merchandising Enhanced in-store experience Larger new stores 39
FY2013: Outlook Space growth in line with LT targets Capital Expenditure c. 1.25 billion Store opening programme Range Zara 110 115 Pull & Bear 40 45 Massimo Dutti 45 50 Bershka 75 80 Stradivarius 95 100 Oysho 35 40 Zara Home 35 40 Uterqüe 5 10 Total openings 440 480 40
Global online sales expansion Zara: Europe, Asia, Americas Concepts: Europe, US Progressive rollout in all markets 41
Zara: Russian Federation online sales 28th August 2013 42
Dividend increase 22% FY2012 dividend proposal 2.20 per share payable: 2 May: 1.10 ordinary 4 November: 0.80 ordinary + 0.30 bonus 1.4 billion to be distributed to shareholders 43
Global Growth Opportunities
Corporate social responsibility Ranked among the top in the most significant global sustainablity indices DJ Sustainability Index, FTSE4Good, Newsweek Green Rankings Supply Chain Code of Conduct for External Manufacturers and Suppliers Internal & External audit teams Product Health & Safety Clear to Wear Safe to Wear Environmental Strategic Plan 2011-2015 Energy & Water Management Chemical & Toxin Control Natural Resources & Biodiversity Waste management Community Investment Programmes Community Development Emergencies Universities Network For&From Sponsorship & Patronage Cluster Model 45