Adler Modemärkte AG - Adlermode Unternehmen · Adler Modemärkte AG Equity Story April 2017 ....
32
1 ADLER – Equity Story Adler Modemärkte AG Equity Story April 2017
Transcript of Adler Modemärkte AG - Adlermode Unternehmen · Adler Modemärkte AG Equity Story April 2017 ....
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1 ADLER ndash Equity Story
Adler Modemaumlrkte AG
Equity Story
April 2017
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2 ADLER ndash Equity Story
Investment Summary ADLER Modemaumlrkte is well positioned to face short-term challenges and lift mid- to long-term potentials
Assets Potential
Numerous internal and external growth opportunities
New client wins amp development of existing costumers
MampA
Online-shop expansion
Significant cost efficiency and profitability improvements
Optimisation of marketing spend
Introduction of new planning system
Restructuring of sales department
Growing target group 45+
Very loyal customer base (92 of sales
generated via customer card)
Customer knowledge comparable to online
retailers
Lean and integrated business model
Solid network of 180 stores at attractive
locations
Sound balance sheet to finance future growth
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3 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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Outstanding value-for-money perception
Fashion follower approach ndash conservative fashion grade management of market proven styles minimizing fashion risk
Excellently positioned in the attractive fast growing value fashion segment and above the vulnerable discount segment
Unique brand position Brand positioning of ADLER
Fashion degree low high
Up
per
Mid
dle
D
isco
un
t V
alu
e
Source Company information
Unique brand positioning due to strong target group focus 45+
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Own brands as strong USP Product offering for women
Forecast (2017)(1) 65 10 75 73 31 31 4
Style Modern classic Classic Modern classic Modern Modern Modern Modern classic
Target group characteristics
Well-groomed sporty elegant
Feminine Conservative
value-for-money
Big-sized easy-care fashion
Trend oriented spontaneous
Active sporty authentic casual
Stylish confident Charming
Well-groomed
Target group age
45+ 60+ 35+ 35+ 40+ 40+ 45+
Collections pa
6 6 10 10 6 6 8
Products per collection
265 90 65 35 25 22 30
Sizes 38-54 36-54 42-56 36-50 36-48 36-50 36-52
Price Range Medium to high Low to medium Medium Medium Medium Medium to high Medium to high
(1) Within Womenacutes division (based on gross revenues of own brands)
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Own brands as strong USP Product offering for men
Forecast (2017)(1) 63 4 15 98 52 3
Style Modern classic Classic Modern Modern classic Modern Modern
Target group characteristics
Well-groomed sporty elegant
Traditional practical value-for-
money
Trend oriented casual
Big-sized easy-care fashion
Active sporty authentic casual
Sophisticated ele-gant challenged
Target group age
45+ 55+ 35+ 40+ 40+ 35+
Collections pa
4 4 6 4 6 4
Products per collection
220 35 30 35 30 10
Sizes 48-58 48-58 46-58 60-70 46-58 48-58
Price Range Medium to high Low to medium Medium Medium to high Medium Medium to high
(1) Within Menacutes division (based on gross revenues of own brands)
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7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
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In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
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9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
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10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
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12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
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Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
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Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
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Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
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16 ADLER ndash Equity Story
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4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
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17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
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19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
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Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
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22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
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Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
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25 ADLER ndash Equity Story
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Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
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26 ADLER ndash Equity Story
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2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
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27 ADLER ndash Equity Story
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333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
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Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
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29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
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Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
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31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
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32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
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2 ADLER ndash Equity Story
Investment Summary ADLER Modemaumlrkte is well positioned to face short-term challenges and lift mid- to long-term potentials
Assets Potential
Numerous internal and external growth opportunities
New client wins amp development of existing costumers
MampA
Online-shop expansion
Significant cost efficiency and profitability improvements
Optimisation of marketing spend
Introduction of new planning system
Restructuring of sales department
Growing target group 45+
Very loyal customer base (92 of sales
generated via customer card)
Customer knowledge comparable to online
retailers
Lean and integrated business model
Solid network of 180 stores at attractive
locations
Sound balance sheet to finance future growth
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3 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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4 ADLER ndash Equity Story
Outstanding value-for-money perception
Fashion follower approach ndash conservative fashion grade management of market proven styles minimizing fashion risk
Excellently positioned in the attractive fast growing value fashion segment and above the vulnerable discount segment
Unique brand position Brand positioning of ADLER
Fashion degree low high
Up
per
Mid
dle
D
isco
un
t V
alu
e
Source Company information
Unique brand positioning due to strong target group focus 45+
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5 ADLER ndash Equity Story
Own brands as strong USP Product offering for women
Forecast (2017)(1) 65 10 75 73 31 31 4
Style Modern classic Classic Modern classic Modern Modern Modern Modern classic
Target group characteristics
Well-groomed sporty elegant
Feminine Conservative
value-for-money
Big-sized easy-care fashion
Trend oriented spontaneous
Active sporty authentic casual
Stylish confident Charming
Well-groomed
Target group age
45+ 60+ 35+ 35+ 40+ 40+ 45+
Collections pa
6 6 10 10 6 6 8
Products per collection
265 90 65 35 25 22 30
Sizes 38-54 36-54 42-56 36-50 36-48 36-50 36-52
Price Range Medium to high Low to medium Medium Medium Medium Medium to high Medium to high
(1) Within Womenacutes division (based on gross revenues of own brands)
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6 ADLER ndash Equity Story
Own brands as strong USP Product offering for men
Forecast (2017)(1) 63 4 15 98 52 3
Style Modern classic Classic Modern Modern classic Modern Modern
Target group characteristics
Well-groomed sporty elegant
Traditional practical value-for-
money
Trend oriented casual
Big-sized easy-care fashion
Active sporty authentic casual
Sophisticated ele-gant challenged
Target group age
45+ 55+ 35+ 40+ 40+ 35+
Collections pa
4 4 6 4 6 4
Products per collection
220 35 30 35 30 10
Sizes 48-58 48-58 46-58 60-70 46-58 48-58
Price Range Medium to high Low to medium Medium Medium to high Medium Medium to high
(1) Within Menacutes division (based on gross revenues of own brands)
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7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
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777777
128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
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777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
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777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
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192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
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128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
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192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
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192192192
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16 ADLER ndash Equity Story
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4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
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128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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192192192
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18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
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192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
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128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
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192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
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22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
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777777
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192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
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234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
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25 ADLER ndash Equity Story
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Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
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26 ADLER ndash Equity Story
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2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
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27 ADLER ndash Equity Story
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333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
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28 ADLER ndash Equity Story
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192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
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29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
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192192192
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30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
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192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
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32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
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192192192
234234234
3 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
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777777
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192192192
234234234
4 ADLER ndash Equity Story
Outstanding value-for-money perception
Fashion follower approach ndash conservative fashion grade management of market proven styles minimizing fashion risk
Excellently positioned in the attractive fast growing value fashion segment and above the vulnerable discount segment
Unique brand position Brand positioning of ADLER
Fashion degree low high
Up
per
Mid
dle
D
isco
un
t V
alu
e
Source Company information
Unique brand positioning due to strong target group focus 45+
2260122
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192192192
234234234
5 ADLER ndash Equity Story
Own brands as strong USP Product offering for women
Forecast (2017)(1) 65 10 75 73 31 31 4
Style Modern classic Classic Modern classic Modern Modern Modern Modern classic
Target group characteristics
Well-groomed sporty elegant
Feminine Conservative
value-for-money
Big-sized easy-care fashion
Trend oriented spontaneous
Active sporty authentic casual
Stylish confident Charming
Well-groomed
Target group age
45+ 60+ 35+ 35+ 40+ 40+ 45+
Collections pa
6 6 10 10 6 6 8
Products per collection
265 90 65 35 25 22 30
Sizes 38-54 36-54 42-56 36-50 36-48 36-50 36-52
Price Range Medium to high Low to medium Medium Medium Medium Medium to high Medium to high
(1) Within Womenacutes division (based on gross revenues of own brands)
2260122
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192192192
234234234
6 ADLER ndash Equity Story
Own brands as strong USP Product offering for men
Forecast (2017)(1) 63 4 15 98 52 3
Style Modern classic Classic Modern Modern classic Modern Modern
Target group characteristics
Well-groomed sporty elegant
Traditional practical value-for-
money
Trend oriented casual
Big-sized easy-care fashion
Active sporty authentic casual
Sophisticated ele-gant challenged
Target group age
45+ 55+ 35+ 40+ 40+ 35+
Collections pa
4 4 6 4 6 4
Products per collection
220 35 30 35 30 10
Sizes 48-58 48-58 46-58 60-70 46-58 48-58
Price Range Medium to high Low to medium Medium Medium to high Medium Medium to high
(1) Within Menacutes division (based on gross revenues of own brands)
2260122
19226133
14711108
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777777
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192192192
234234234
7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
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777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
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777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
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777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
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777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
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192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
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128128128
192192192
234234234
4 ADLER ndash Equity Story
Outstanding value-for-money perception
Fashion follower approach ndash conservative fashion grade management of market proven styles minimizing fashion risk
Excellently positioned in the attractive fast growing value fashion segment and above the vulnerable discount segment
Unique brand position Brand positioning of ADLER
Fashion degree low high
Up
per
Mid
dle
D
isco
un
t V
alu
e
Source Company information
Unique brand positioning due to strong target group focus 45+
2260122
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128128128
192192192
234234234
5 ADLER ndash Equity Story
Own brands as strong USP Product offering for women
Forecast (2017)(1) 65 10 75 73 31 31 4
Style Modern classic Classic Modern classic Modern Modern Modern Modern classic
Target group characteristics
Well-groomed sporty elegant
Feminine Conservative
value-for-money
Big-sized easy-care fashion
Trend oriented spontaneous
Active sporty authentic casual
Stylish confident Charming
Well-groomed
Target group age
45+ 60+ 35+ 35+ 40+ 40+ 45+
Collections pa
6 6 10 10 6 6 8
Products per collection
265 90 65 35 25 22 30
Sizes 38-54 36-54 42-56 36-50 36-48 36-50 36-52
Price Range Medium to high Low to medium Medium Medium Medium Medium to high Medium to high
(1) Within Womenacutes division (based on gross revenues of own brands)
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192192192
234234234
6 ADLER ndash Equity Story
Own brands as strong USP Product offering for men
Forecast (2017)(1) 63 4 15 98 52 3
Style Modern classic Classic Modern Modern classic Modern Modern
Target group characteristics
Well-groomed sporty elegant
Traditional practical value-for-
money
Trend oriented casual
Big-sized easy-care fashion
Active sporty authentic casual
Sophisticated ele-gant challenged
Target group age
45+ 55+ 35+ 40+ 40+ 35+
Collections pa
4 4 6 4 6 4
Products per collection
220 35 30 35 30 10
Sizes 48-58 48-58 46-58 60-70 46-58 48-58
Price Range Medium to high Low to medium Medium Medium to high Medium Medium to high
(1) Within Menacutes division (based on gross revenues of own brands)
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777777
128128128
192192192
234234234
7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
2260122
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777777
128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
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777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
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777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
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777777
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192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
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777777
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192192192
234234234
13 ADLER ndash Equity Story
2260122
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14711108
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777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
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000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
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14711108
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777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
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777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
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777777
128128128
192192192
234234234
5 ADLER ndash Equity Story
Own brands as strong USP Product offering for women
Forecast (2017)(1) 65 10 75 73 31 31 4
Style Modern classic Classic Modern classic Modern Modern Modern Modern classic
Target group characteristics
Well-groomed sporty elegant
Feminine Conservative
value-for-money
Big-sized easy-care fashion
Trend oriented spontaneous
Active sporty authentic casual
Stylish confident Charming
Well-groomed
Target group age
45+ 60+ 35+ 35+ 40+ 40+ 45+
Collections pa
6 6 10 10 6 6 8
Products per collection
265 90 65 35 25 22 30
Sizes 38-54 36-54 42-56 36-50 36-48 36-50 36-52
Price Range Medium to high Low to medium Medium Medium Medium Medium to high Medium to high
(1) Within Womenacutes division (based on gross revenues of own brands)
2260122
19226133
14711108
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128128128
192192192
234234234
6 ADLER ndash Equity Story
Own brands as strong USP Product offering for men
Forecast (2017)(1) 63 4 15 98 52 3
Style Modern classic Classic Modern Modern classic Modern Modern
Target group characteristics
Well-groomed sporty elegant
Traditional practical value-for-
money
Trend oriented casual
Big-sized easy-care fashion
Active sporty authentic casual
Sophisticated ele-gant challenged
Target group age
45+ 55+ 35+ 40+ 40+ 35+
Collections pa
4 4 6 4 6 4
Products per collection
220 35 30 35 30 10
Sizes 48-58 48-58 46-58 60-70 46-58 48-58
Price Range Medium to high Low to medium Medium Medium to high Medium Medium to high
(1) Within Menacutes division (based on gross revenues of own brands)
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128128128
192192192
234234234
7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
2260122
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128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
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128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
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192192192
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9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
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192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
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777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
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14711108
245207238
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777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
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128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
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128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
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128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
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14711108
245207238
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128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
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128128128
192192192
234234234
16 ADLER ndash Equity Story
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4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
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128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
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14711108
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777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
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14711108
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777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
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777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
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192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
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192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
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192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
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777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
6 ADLER ndash Equity Story
Own brands as strong USP Product offering for men
Forecast (2017)(1) 63 4 15 98 52 3
Style Modern classic Classic Modern Modern classic Modern Modern
Target group characteristics
Well-groomed sporty elegant
Traditional practical value-for-
money
Trend oriented casual
Big-sized easy-care fashion
Active sporty authentic casual
Sophisticated ele-gant challenged
Target group age
45+ 55+ 35+ 40+ 40+ 35+
Collections pa
4 4 6 4 6 4
Products per collection
220 35 30 35 30 10
Sizes 48-58 48-58 46-58 60-70 46-58 48-58
Price Range Medium to high Low to medium Medium Medium to high Medium Medium to high
(1) Within Menacutes division (based on gross revenues of own brands)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
7 ADLER ndash Equity Story
Very high brand recognition in relation to existing store network offers strong future sales potential
989
986
76
68
901
57
48
53
18
967
482
449
284
409
706
~ 200
65
156
1684
181
Number of Stores2) Brand Awareness in Germany1)
Sources 1) TextilWirtschaft (Top Shops 2013 ) Spiegel-Verlag 2015 (Outfit 90) 2) Own research
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
8 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
In depth experience with growing target group
ADLER is the only fashion retailer dedicated to target customers aged 45+ average age of 60 years
Dominant share in consumption spending
Target group allows ADLER to be a late fashion follower -gt low fashion risk low cost pressure due to longer lead time
The demographic shift significantly increases the best ager target group in the future
2016 2050
Aged under 45 393 (48) 331 (44)
Aged over 45 423 (52) 430 (56)
Median age 458 years 500 years
Population projection for Germany in million and as percentage of population
Source Source German Federal Statistical Office 2016 (assumption net migration (from 2021) +200000)
19
51 56
81
49 44
Source Company information Axel Springer AG OCampC-Analysis
lt 50 years
50+ years
Overall population
ADLER Peer group
ADLER has older customers than competitors
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
9 ADLER ndash Equity Story
Great popularity of ADLER Customer Card reflects high loyalty and supplies ADLER with detailed customer insight
Source Statista nhi2 1005 participants 2013
Which customer cards of textile retailers do you use on a regular basis
1
1
1
2
2
2
3
4
4
7
7
7
Bonita
Ulla Popken
Orsay
Tom Tailor
Woumlhrl
Charles Voumlgele
Ernsting`s Family
Takko
sOliver
PeekampCloppenburg
Esprit
ADLER
Source Finanztest (2010)
36 million active ADLER Customer Card members -gt wide customer database
92 of revenues generated via Customer Card
Best in class ADLER Customer Card classified best out of 24 loyalty card schemes
Focused and efficient marketing opportunities loyalty card scheme allows exact market segmentation and a targeted marketing approach
High profitability of ADLER card customers high acceptance of ADLER customer card enables steering of customer frequency and cash flows
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
10 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
11 ADLER ndash Equity Story
Drive multi-
channel
Marketing campaign adjusted based on detailed customer insight within the organisation
Internal growth potential from existing and new customer groups - focus on efficient image transfer in all strategic action areas
Gain new customers
Develop existing
customers
Image
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
12 ADLER ndash Equity Story
Drive multi-channel
E-mail marketing
Linking the channels
Mobile application
Teleshopping
Strategic area Action fields
Consumer heartbeat survey on decision to buy and attractiveness of PoS
Consumer heartbeat survey on frequency and reasons to buy Customer knowledge
in the organization
ADLER identified four strategic areas representing a long-term sales potential of a medium double-digit million figure
Gain new customers
Strengthen brand image
Duplicate top clients
Strengthen profile
In the context of stores
Develop existing customers
Segmentation of clients
Inactive customers Strengthen
loyalty programme
Price sensibility Optimize reach
action chain Modernity
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
13 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Ongoing cost-benefit analysis as the foundation of a more effective marketing mix at lower costs
ADLER reallocates marketing spendings to a more effective mix
mailings perform best in generating additional revenue
radio achieves an increase in frequency of up to 4
TV accounts for a particularly high share of new customers
Total marketing spend approximately down gt10 in 2016 (2015 euro 538 million)
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
14 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Key initiatives to make marketing spend more effective ndash focus on frequency and sales development
Ongoing marketing activities are essential due to peripheral locations of markets
Customer segmentation increases efficiency of marketing spend and supports new client wins
bdquoConsumer Heartbeatldquo (survey started 2016) links CRM to survey data to learn more about
decisions to buy and attractiveness of point of sale
Further enhancement of the customer card loyalty programme
Opportunity to benefit from the wide reach of important selling plattforms such as Amazon
Best practice models for 2017 to be refined and continued
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
15 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Multi-channel offers high potential for ADLER to win new clients
Source GfK
In 2015 almost every second buyer of clothes purchased online as well as in brick-and-mortar stores the percentage of multi-channels-clients is stagnating
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
16 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
4200 4850
6600
8870
2013 2014 2015 2016e
Development of KPI ADLER eCommerce
Increasing growth dynamics in sales
Stable development of gross profit on a high level (gross profit margin 55)
Stable improvement of conversion and shopping cart since two years
Growing share of online in ADLERacutes overall sales to 16 in 2016
Mid-term goal share of total
revenue gt 10
Net Sales
in million euro
Site Visits in million
5000 6300 8000 9400
Mobile Share in
145 222 333 423
Shopping Cart in euro
750 749 792 807
Clients in `000
930 1089 1416 1657
CAGR 283
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
17 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
18 ADLER ndash Equity Story
Further organic growth mid- to long term potential through new store openings
Number of ADLER stores per country
Number of stores
Markt
entry 2009 2010 2011 2012 2013 2014 2015 2016
Germany 1948 104 107 132 139 143 145 154 156
Austria 1987 17 26 28 27 25 22 21 22
Luxembourg 1981 2 2 2 2 2 2 2 3
Switzerland 2012 1 1 1 1 2
Total 123 135 162 169 171 170 177 183
Organic openings 3 8 13 11 5 4 3 7
Acquisitions 7 18 5 1 0 10 0
Closings sales 1 3 3 9 4 5 6 1
Net difference 2 12 28 7 2 -1 7 6
Regional presence and potential for expansion
Short-term focus on investment discipline only 1 organic store opening planned for 2017 after 7 stores in 2016 (6 stores net)
Focus on large formats such as retail centers and stand-alone markets with a retail space of gt 1400 msup2
Focus on DACH region and Luxembourg (optimisation and consolidation of existing store network)
Targets
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
19 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
20 ADLER ndash Equity Story
Lean and vertical integrated business model ndash optimisation of value added supply chain continues
In-house design team
Focus on own brands
Fashion follower of market proven styles minimising fashion risk
Up to 10 collections per year
Completely outsourced production
Diversified supplier base
Sourcing partnership with
Metro Group Buying (MGB)
NTS Direct
Centralised logistics operations with efficient push-and-pull warehousing system
Organised by BLG MGB and NTS
Focused CRM and marketing
Omni-channel distribution
4 retail formats (retail park shopping center stand alone city center)
Highly flexible modular store system
E-business
Product development Sourcing Logistics Distribution
1 2 3 4
Full information control along the entire value chain
Efficient supply chain management ndash full information control over the entire value chain and high process standardisation
Focus on core value added processes ndash product development and distribution
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
21 ADLER ndash Equity Story
Cost- and efficiency improvement through technical pioneering (RFID robotic)
RFID-project already delivers on promises but there is still potential for additional optimisation of RFID-processes
Process optimisation
bull Effects on process optimisation fully in line with expectations
bull Inventory of all planning groups every six weeks
bull Time savings of 10 at cash register
Sales improvement
bull Increase in sales with NOS-merchandise due to reduction of out-of-stock situations
bull Increase in sales with seasonal items by processing replenishment suggestions
Higher quality of inventories
bull Reduction of inventory differences by 30
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
22 ADLER ndash Equity Story
Cost savings of appr euro10 million already realised in 2016 full impact expected in 2017ff of approx euro10 million
Cost of goods sold
Reduction of purchase volumina flexibility via higher bdquoOpen to Buyldquo
Improvement of gross profit margin of up to 2-points
Personnel expenses
Process improvements in the markets incl staff reduction
Termination of collective bargaining agreement
Cost savings of at least euro 60 million
Marketing expenses
Optimisation of action chain with clear focus on increased customer frequency
Marketing budget for 2017 on same level as 2016 (euro450 million additional savings possible
Other operating expenses
Fewer modernisation measures
Only one store opening in 2017
additional cost saving potential of at least euro20million
Full impact of efficiency programme in 2017ff ndash further potential from additional measures
Rig
oro
us
scre
en
ing
of
all o
per
atin
g ac
tivi
ties
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
23 ADLER ndash Equity Story
Adler Modemaumlrkte AG ndash drivers for future growth
Unique positioning in the lower mid-price value segment -gt in depth experience with attractive (high purchasing power) and growing target group (menwomen 45+)
Potential for internal growth through new customer gains and expansion of ADLER online-shop
Mid- and longterm potential for external growth through new shop openings and acquisitions (market consolidation MomampPop shops)
Room for further cost- and efficiency improvements through optimisation of the value added supply chain and cost saving measures
Solid balance sheet and cash flow generation
1
2
3
4
5
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
24 ADLER ndash Equity Story
Main Facts 2016
Revenue decline of 38 to euro 5446 million in difficult market environment
but solid Q4-2016 (+13)
Cost cutting- and efficiency programme bear fruits
ndash Cost savings of appr euro10 million realised in 2016 Full
ndash EBITDA in Q4 at euro310 million FY EBITDA at euro233 million
ndash Free cash flow substantially improved from euro29 million in 2015 to euro114 million
in 2016
Substantial earnings improvement expected in 2017 despite demanding market
environment ndash ongoing focus on liquidity and cash flow
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
25 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Solid Q4 revenues ndash FY results affected by weak development of textile industry
1151 1533 1302
1674
5661
1053 1518
1179 1696
5446
Q1 Q2 Q3 Q4 12M
2015 2016
-10 -94
-38
-85 +13
Revenue in meuro
Q4 with solid development due to
more favorable weather conditions
Newly opened stores (euro 66 million)
almost offset decline in revenue
attributable to the closure of stores
(euro 84 million)
Product range optimisation at ADLER
Orange stores and associated clearance
sales led to a euro 19 million decline in
revenue
On a like-for-like basis revenue for the
2016 financial year declined by 46
Online revenues up 344 as against
2015 to euro89 million
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
26 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
2612 2565
3049 2881
Gross profit
Cost of goods sold
-18
-55
Decline in ADLER Grouprsquos cost of materials less pronounced than the decrease in revenue
Gross margin at 570 in Q4 (Q4-2015 566 ) due to growing impact of cost efficiency measures
Company will work to further optimise its inventory management system and continuously increase share of that is directly sourced
2015 2016
Gross profit margin declines
Margin 529 539
in meuro
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
27 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
333
68
168
233
EBITDA2015
Lower gross profitfrom sales
Marketing andother opex
EBITDA 2016
EBITDA of euro233 million significantly above the range of euro 14 to 17 million targeted in October 2016
in meuro
Efficiency and cost-saving measures increasingly bear fruit cost savings of euroxx million realised in 2016
Personnel expenses on prior-year level in spite wage and salary increases primarily due to staff reduction
Other operating expenses decreased by 38 to euro1712 million (2015 euro1780 million)
Marketing outlays decreased by euro84 million year on year
Expenditures for maintenance and modernisation measures as well as administrative expenses each declined by euro06 million
Positive net result of euro04 million for FY2016 following a negative result of euro-183 million after 9M-2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
28 ADLER ndash Equity Story
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
Strong cash flow from operating activities and higher free cash flow
Cash flows from operating activities improved from euro195 million in 2015 by 138 to euro222 million
Free cash flow increased from euro 29 million in 2015 to euro 114 million in 2016 due to cost-cutting programme reduction of modernisation measures and lack of company acquisitions
Cautious investment policy investments declined from euro216 million to euro133 million
521
222 -108
-207
428
Cash01012016
Operating CF CF fromInvesting
CF fromFinancing
Cash31122016
in meuro
Including liabilities from customer card pension provisions finance lease liabilities ex assets held for sale cash other financial liabilities
Net debt
Decrease in cash and cash equivalents to euro428 million (2015 euro521 million)
Decrease in finance lease obligations from euro563 million to euro522 million
Decrease of liabilities from customer card by euro08 million
Net debt decreased substantially in the fourth quarter 2016 (9M-2016 euro615 million)
Cash flows
244 284
31122015 31122016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
29 ADLER ndash Equity Story
Solid balance sheet quality
in meuro 31 Dec 2016 31 Dec 2015
Total assets 2226 2434
Inventories 754 813
Trade receivables 06 19
Cash position 428 521
Equity 953 1049
Equity ratio 428 431
Trade payables 253 320
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
30 ADLER ndash Equity Story
Forecast FY 2017 EBITDA improvement to euro27-30 million
Revenue revenue slightly below prior-year level
EBITDA euro27-30 million
Expansion 1 store opening in 2017
Gross profit margin
Personnel expenses Slight decrease
Slight increase
Transport and logistics costs Slight increase
Revenue generated online Significant increase
Free Cash Flow At least level with 2016
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
31 ADLER ndash Equity Story
The ADLER Value Added
With its strong brand market
position and growth opportunities
ADLER simultaneously offers value
and growth potential and is
therefore unique within the fashion
and textile industry
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
2260122
19226133
14711108
245207238
000
777777
128128128
192192192
234234234
32 ADLER ndash Equity Story
Financial calender amp contact details
Adler Modemaumlrkte AG Industriestraszlige Ost 1 ndash 7 63808 HaibachGermany Phone +49 6021 633-1828 Fax +49 6021 633-1417 eMail InvestorRelationsadlerde
German Corporate Conference Frankfurt 16-18 January 2017
Annual Report 2016 16 March 2017
Annual General Meeting Aschaffenburg 24 May 2017
Report on the first half 2017 3 August 2017
Report on the first nine months 2017 9 November 2017
Report on the first quarter 2017
11 May 2017
20eacuteme Oddo Forum Lyon 5-6 January 2017
German Equity Forum Frankfurt 27-29 November 2017
