Moleskine S.p.A. STAR Conference 2014, London 1
Disclaimer This presentation and the information, statements and opinions contained herein have been prepared by Moleskine S.p.A. ( Moleskine or the Company ) for information purposes only and for use in presentations of the results and strategies of the Company and its subsidiaries (the Group ). This presentation may contain forward-looking statements, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of the Group. There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. Moleskine undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this presentation are provided as at the date hereof and are subject to change without notice. Moreover, reference to past performance of the Company or the Group shall not be taken as an indication of future performance. This presentation contains certain non-ifrs alternative financial indicators which the Company s management uses as supplemental indicators to monitor the economic, financial and operating performance of the Group. An explanation of such alternative financial indicators is contained in the presentation. Such indicators are not recognized as measures of financial performance or liquidity under IFRS, do not have any standardized meanings prescribed by IFRS and therefore may not be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Therefore, investors should not place undue reliance on such data and information. In addition, this presentation includes certain Adjusted financial and operating indicators and other measures, which have been adjusted to reflect extraordinary events, non-recurring transactions and activities which are not directly related to the Group s ordinary business. Such Adjusted information has been included to allow a better comparison of financial information across the periods; however, it should be noted that such information are not recognized as measures of financial performance or liquidity under IFRS and/or do not constitute an indication of the historical performance of the Company or the Group. Therefore, investors should not place undue reliance on such data and information. This presentation does not constitute an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments or to effect any transaction. Any further information on the Group is available on the website http://corporate.moleskine.com 2
Key Investment Highlights Unique brand asset, providing significant leverage Broad consumer appeal A global business managed through a scalable and flexible business model Multichannel distribution platform Solid long term vision grounded in consumer insights Clear and executable short and mid-term growth plans Strong financial performance 3
A brand built on intangible values A brand Unique brand asset, providing significant leverage solidly grounded on intangible values driving distinctiveness, competitive advantage and commercial leverage authentically devoted to envisioning, designing and commercializing platforms to support the expression of contemporary talent that will be the cultural heritage of tomorrow Moleskine brand core values Culture Imagination Memory Travel Personal identity Moleskine is a cultural icon, a brand that tells a story. A Moleskine object connects the owner to a heritage in art, literature, cultural and geographical exploration. Moleskine collections are open platforms for creativity, trusty companions for meaningful existential experiences. Moleskine is a brand connected to the collection of memories, the organization of time and priorities in our working life and in leisure time. Celebrating contemporary nomadism, Moleskine offers a collection of tools to accompany everyday and extraordinary journeys. A Moleskine object becomes an integral part of one s personality. Symbolic and practical design elements are combined, releasing energy and emotions collected over time. 4
Unique brand asset, providing significant leverage continuously expanding its product offering coherently with core values PAPER WRITING, TRAVELLING AND READING ( WTR ) DIGITAL (*) NOTEBOOKS NOTEBOOKS WRITING COLLECTION APPS DIARIES AND PLANNERS HOME OFFICE, ARTS & GIFTING TRAVELLING COLLECTION BOOK53 PHOTOBOOKS LIMITED EDITIONS READING COLLECTION EVERNOTE SMART NOTEBOOKS (*) 93% OF 2013 REVENUES MORE THAN 600 SKUS IN 2013 7% OF 2013 REVENUES 150 TOTAL SKUS IN 2013 MORE THAN 300,000 EVERNOTE SMART NOTEBOOKS SOLD SINCE LAUNCH As an inclusive brand, Moleskine operates a demand creation model which is in line with brand platforms that can support multiple business categories (*) Digital revenues booked as paper revenues This long-term perspective has given the brand the authenticity to credibly claim and command a premium across a wider offering 5
Unique brand asset, providing significant leverage Started from key consumers actions: taking memories, sketching, planning time Classic Black and Red extended in 2012 to a full colour palette to meet an extended target and further expanded in 2014 Volant Collection & Cahier collection Planners 6
expanding to art, business and gifting Unique brand asset, providing significant leverage Home Office Arts Limited Editions 7
Strong brand asset, providing significant leverage extending to the wider needs of our urban, nomadic target Bags Travel Accessories Digital Device Accessories 8
Broad consumer appeal Moleskine Target: a global niche The community of the contemporary nomads and knowledge professionals which is global, crosscultural, well-defined, seamlessly bridging analog/digital, relatively price inelastic, brand loyal In advanced industrial societies the Moleskine public corresponds to around 20% of the total population. BROADER SOCIO DEMOGRAPHIC TARGET Sources: The creative class by Richard Florida, Moleskine internal data 9
A global business managed through a scalable and flexible business model Efficient and effective global reach AMERICAS EMEA APAC 35% 53% 12% % of Group Sales Brand Equity OUTSOURCED Marketing Product development Sourcing & production control ( Operations ) Manufacturing OUTSOURCED Strategic distribution management Indirect distribution, sales & logistic Direct distribution Information technology Source: company data, management elaboration 10
Multichannel distribution platform Multichannel distribution strategy enables reach to a wide customer base 2012-13 Revenues ( m) WHOLESALE B2B RETAIL ECOMMERCE 61,0 +4% 63,5 +21% +340% +12% 12,7 15,4 1,0 4,4 3,3 3,7 2012 2013 2012 2013 2012 2013 2012 2013 Continued optimization of distribution footprint leading to dedicated platforms by country An efficient and effective mixed distribution model 31 DOS worldwide 15 in EMEA 3 in Americas 13 in APAC Growing presence in the digital space to boost ecommerce traffic Source: company data 11
Business Brand lifecycle From a cult item to a global icon A cult item A Cultural icon A Global icon Source: management elaboration 1996-2006 Rebirth of the legendary notebook, development of the strong link with design, culture, art and travel Wholesale as the only channel Development of spontaneous online communities of fans Life Cycle 2006-2011 2011 2016 Strong network expansion in Wholesale channel, beyond traditional bookstore channel B2B activities launch E-commerce start-up and development Retail format start-up in China Organizational structure to support the growth Continue network expansion in Wholesale & key account penetration Retail network development across all store formats E-commerce roll-out and Analog-to- Digital-to-Analog initiatives Expansion into new product categories 12
Solid long term vision grounded in consumer insights Positive underlying macro trends Growing customer base underpinned by positive secular trends (1) Premiumization: increasing weight of brands in key product categories (2) Unbranded Branded Watches Leather goods Eyewear Jewelry Stationary market enduring technology (3) Seamless analog / digital interaction driving customer value proposition (2) PAPER BASED STATIONERY MARKET ( B @ RETAIL VALUE) (1) Moleskine elaboration based on Ales data (Market research, 2012) and Euromonitor sociodemographic data (2) Management elaboration (3) Euromonitor, 13
Effective growth strategy Increase brand offering Increase brand accessibility Increase brand awareness 14
Strong financial performance Longstanding superior top line growth in multiple geographies and channels Net Sales 1 40,7 53,3 CAGR 21% 66,7 78,0 87,0 2009 2010 2011 2012 2013 Revenues by geography Revenues by channel APAC 12% ecomm. 4% Retail 5% EMEA 53% B2B 18% Source: company data 1 Net Sales are adjusted figures Americas 35% B2C 73% 15
Strong financial performance set to continue to evolve in line with track record Moleskine Net Sales 14-16 [M ] CAGR +16% FY13 78 87 99-101 115-120 135-140 12 13 14 15 16 13-16 Net Sales by Channel [M ] 13-16 Net Sales by Region [M ] 13-16 Net Sales by Product [M ] 87,0 5% 4% 18% 135-140 19% 5% 18% 87,0 12% 35% 135-140 16% 35% 87,0 7% 135-140 14% 73% 59% Retail ecomm B2B Wholesale 53% 49% APAC Americas EMEA 93% 86% WTR Paper Source: Company data 13 16 13 16 13 16 16
Strong financial performance and associated with strong profitability and cash flow conversion EBITDA evolution 13-16 [M ] CAGR: +10% 33,6 32,1 33-34 37-38 42-44 -1,5 13A Listed company running costs (*) 13 Restated % 38,6% 36,9% 33,5% 32,0% 32,0% (*) Listed company running costs include all recurring costs related to the status of public company NFP Evolution 14B 15F 16F Source: company data 1 Net Sales, EBITDA and Net Income are adjusted figures 12 13 14 15 16 17
Key Investment Highlights Unique brand asset, providing significant leverage Broad consumer appeal A global business managed through a scalable and flexible business model Multichannel distribution platform Solid long term vision grounded in consumer insights Clear and executable short and mid-term growth plans Strong financial performance 18
Appendix
Group Structure MOLESKINE S.p.A Moleskine America 100% Moleskine France 100% Moleskine Germany 100% Moleskine +20 Asia 100% Moleskine UK 100% Moleskine Shanghai 100% Moleskine Singapore 100% 20