4. Moleskine Lorenzo Viglione FINAL

THE MOLESKINE JOURNEY

Past, Present, Future

Lorenzo Viglione – CEO of Moleskine

Investor day – 13 December 2017

MOLESKINE AT A GLANCE

Small company with a global reach

Multiple levers for continued value creation

Branded business with a unique cultural positioning

A strong track record of profitable growth set to

continue

• Inspired excellence and innovation to drive both paper and non-paper based products growth

• Consolidation of multichannel distribution platform, in particular Retail, to increase sales productivity

• Cultivating the local customerexperience throughstrengthened regionalpresence

• 14% top line CAGR over the last 3 years set to continue driven by all channels and geographies

• EBITDA margin expected to be maintained at minimum 25%

• Financials comparing favorably to luxury brands

• Domestic market and Europe accounting respectively for 11% and 47% of revenues

• Presence in 115+ countries with a balanced mix of developed and growth markets served through a multichannel distribution platform

• Focus on large cities consistently with main features of target customers (i.e. creative professionals living in urban areas)

• A global brand synonymous with the lifestyle-of-the-creative-class

• A lifestyle brand, not a notebook maker, recognized by a loyal customer base as well as the marketing and design communities

• The moleskine notebook, a legendary object, connecting users to a set of unique values (culture, travel,..)

| 2Investor day – 13 December 2017

BRAND: NOT A NOTEBOOK...

IDENTITY

FUNCTION

STATUS

INDIVIDUAL

EXPRESSION

Publishers

Stationery

Lifestyle

Luxury


...BUT AN IDENTITY MARKER...

"The IPhone and Moleskine are to the

knowledge worker of today what the spear and

shield were to the Spartan hoplite."

– Financial Times (12/2016)

"The IPhone and Moleskine are to the

knowledge worker of today what the spear and

shield were to the Spartan hoplite."

– Financial Times (12/2016)

- The New Yorker (05/2017)


...WITH LEGITIMACY TO EXTEND

41%

61%

63%

80%

100%

Top 5 Potential streams

for brand extensionInterbrand study 2017

(Paper=100%)

Creativity

Travel

Culture

Design

Experiences

Source> Customer Survey 2017

EXPERIENCES

Cafès

Hotels

Lounges

...

TOOLS

Writing / sketching

Travelware

Mobility services

...

Inspiring

Journeys

CONTENT

Consulting

Design

Media

Publishing

Academies

...


Vision

Mission

A global multi-category, multi channel brand, contributing to the

development and sharing of human knowledge and culture

Moleskine develops, markets and sells products and services that

provide open platforms to create, communicate and share

Moleskine is dedicated to support its users in expanding

knowledge, creativity and individual expression



Brand value

Distribution

Brand awareness

Portfolio

PILLARS OF MOLESKINE DEVELOPMENT

BUILDING THE BUSINESS THROUGH A SELF-REINFORCING LOOP

AwarenessProduct

portfolio

Distribution


The Moleskine Journey



BUILDING THE BUSINESS THROUGH A SELF-REINFORCING LOOP: PRIORITY

TO DISTRIBUTION

AwarenessProduct

portfolio

Distribution


1995-2010: PRIORITY TO COVERING THE TERRITORY THROUGH

WHOLESALE DISTRIBUTION ….

~20K

1995 2005

0

2010

~12K

Countries

Europe

Americas

APAC

100% 67% 57%

Sales

1 65 90

- 28% 35%

- 5% 8%

Doors

evolution


… AS A WAY TO BUILD AWARENESS AND GROW SALES

CAGR

07-10

Sales growth

11% 27% 14%

15%

USA Japan

UK

53%

7%13%

6%

17%

Italy

67%

14%

42%

Germany

44%

11% 46%

Moleskine Brand Awareness evolution in key markets(% on survey respondents)

2010

2007

23%





BUILDING ON THE SAME SELF-REINFORCING LOOP, BUT WITH DIFFERENT

EMPHASIS

AwarenessProduct

portfolio

Distribution


2011-2016: GRADUALLY SHIFTING TO MULTI-CHANNEL / FOCUS ON DOORS

PRODUCTIVITY ….

2016

~29K

2010

~20K

2005

~12K

Increasing number of wholesale doors(doors)

Upgrading quality of footprint

Building a retail network(# directly operated stores)

78

00

20102005 2016

Developing eCommerce(# countries)

37

10

201620102005

246

30

2016201020052016

8.3

2010

8.8

2005

2.0

Display (k) Atelier


… AND EXPANDING PRODUCT PORTFOLIO ….

60

Travel

2006 2011 2016

M+ (Digital)

W+R

Paper

571

657

Product mix evolution(SKU’s per category)

20

Travel

67

20162006

M+ (Digital)

Paper

2011

W+R

145

Sales mix evolution(M€ per category exc. royalties)


Sales

CAGR

10-16

18% 99% 16%

15

53

4442

67

27

69646262

78

27

51

6871

81

Italy JapanUK

N/A

GermanyChina

N/A

USA

19% 12%

2017

2014

2010

14%

Moleskine Brand Awareness evolution in key markets(% on survey respondents)

18%

… TO CONTINUE TO GROW AWARENESS AND BUSINESS





A global multi-category, multi channel brand,

contributing to the development and sharing of

human knowledge and culture

FULFILLING THE VISION...


… BY SYNERGIZING BETWEEN PAPER AND NON-PAPER FOR CONTINUED

GROWTH OF AWARENESS / ENGAGEMENT AND BUSINESS

Revenues Awareness

Paper

Travel /

Bags

Moleskine+

/ Digital

Cafè

Writing

Tools

• Moderate impact, limited

• Higher impact through additional

distribution, some earned media

• Major impact through additional

distribution, significant earned media

• High impact through traffic, deep

brand experience, good earned media

• Moderate impact, limited

€€€€

€€€

€€

€€

€


Product portfolio - Develop paper and non-paper categories

BUILDING ON ALREADY EXISTING INITIATIVES

• Reinforce capabilities and penetrate

specialized channel

• Expand mainly through franchising

(travel) and selective JVs (urban)

• Development of new products and

services with partners

Paper

Bags & SLG

Moleskine

Cafè

Digital

• Evaluate potential tactical partnership to

enlarge product range

Writing

Tools

83%

7%

3%3%

MSK Cafè

2016 Medium

term

Accessories & others

Writing Tools

Bags & SLG

Digital

100%

Paper


• Increase limited editions and premium

products

Distribution - Increase proximity to target customers

BUILDING ON ALREADY EXISTING INITIATIVES

• Direct model in key markets

• Trade marketing and space management

• Moderate doors increase

• Improve Retail performances

• Retail 2.0

• Network development

• Boost traffic

• Increase conversion

• Develop omnichannel

• Large deals development

Wholesale

Retail

eCommerce

B2B

57%

22%

15%

6%

Wholesale

Medium

term

2016

100%

Ecommerce

Retail

B2B


SIX KEY AREAS OF INVESTMENT TO REACH GROWTH AMBITION

Increase market proximity by further

decentralizing towards geographies

• Local empowerment with HQ

coordination/target setting

Reinforce / add critical skills

• Strategic marketing

• Non-paper products

• Digital and CRM

• Retail excellence

• Strengthen organization to support growth (+25% FTE in 2017)

• Investment in human capital by fostering creativity and internal

culture

Develop CRM and reporting systems

to support channel integration

Increase digital marketing, events

and BTL for continued growth of

brand and product awareness

Grow existing channels and open new ones

• 60%/40% split between existing and new

Proximity

Competencies

People

Communication

Systems

Channels


Financials and Guidance


HISTORICAL FINANCIALS

29,1 33,5 33,6 33,7 42,3EBITDA adj. (M€) 22,7

27,6 30,4 22,0 25,3 34,8EBIT (M€) 20,7

21,3 27,1 18,5 24,1 34,6PBT (M€) 18,6

41,9

34,0

32,9

- 19% 20% 29% 25%-Operating ROCEafter tax*

17%

NOTE: EBITDA Adj. = EBITDA excluding non recurring transactions and special items identified by management to normalize group performance over the reporting periods;*Figurative tax of 30%; Capital Employed = Tangibles + Intangibles - GW + NWC;


COMMENTS

Development of DOS network

Direct Distribution in Wholesale

Non-paper products

� 2013-2014: strengthening the

distribution platform to increase

customer proximity (i.e. direct

distribution in US and Germany)

and start of Retail network

expansion

� 2015: benefits of increased

customer proximity and positive

exchange rate impact (USD)

� 2016: Positive results from

strengthened distribution model

partially offset by weaker than

expected Retail performance and

higher proportion of sales from

lower margin categories (i.e. SWS)

0

10

20

30

40

50

60

70

50

0

100

150

2015

128.1

28.8%

145.6

2016

%

34.2%

98.7

33.0%

20142013

87.0

38.6%

2012

78.0

M€

42.9%

2011

67.3

43.2%

2010

53.4

42.5%

EBITDA% (adjusted)

Net Sales

CONTINUED STRONG CASH GENERATION DESPITE EVOLVING BUSINESS MODEL

40

50

60

70

80

9045

20

35

5

-5

10

30

0

15

40

25

20162015

5.1

9.7

84.2%

M€

2014

%

64.1%25.3

6.9

21.5

2013

75.1%33.7

2.9

-3.1

5.5

72.8%

30.8

5.6

5.9

35.3

33.6

42.341.9

Capex

FCF (pre-tax)

Change in working capital


∑=EBITDA Adjusted

NOTE: EBITDA Adj. = EBITDA excluding non recurring transactions and special items identified by management to normalize group performance over the reporting periods;

2017 : A TRANSITION YEAR

• Fit-for-growth initiatives and organizational developments driven by new

shareholders’ long term strategic vision

• Integration-driven one-off costs (e.g. strategic planning, delisting, merger,

HR policies, CSR,…)

• Challenging retail environment and change in leadership team in the US

• Retail results below expectations with mixed performances by

geographies to be addressed in 2018 by delivering operational excellence

High single digit expected top line growth with EBIT margin below historical

performance mainly reflecting:


FINANCIAL AMBITION

Clear roadmap for achieving low double digit sales growth

Resumed Adjusted EBITDA margin trajectory of 25% underpinned

by strengthened organization and strategic initiatives

Strong cash flow generation with sustained cash

conversion to fund growth and financial deleverage

Target ROCE of 14%*

*by 2022; EBIT before tax/CE, where CE is equal to EV at acquisition, i.e. 506M€;


FORWARD LOOKING STATEMENTS

| 29

This document contains forward-looking information that involves risks and uncertainties, including statements

about D'Ieteren’s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking

statements include known and unknown risks and are subject to significant business, economic and competitive

uncertainties and contingencies, many of which are beyond the control of D'Ieteren. Should one or more of these

risks, uncertainties or contingencies materialise, or should any underlying assumptions prove incorrect, actual

results could vary materially from those anticipated, expected, estimated or projected. As a result, D'Ieteren does

not assume any responsibility for the accuracy of these forward-looking statements.

Investor day – 13 December 2017

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4. Moleskine Lorenzo Viglione FINAL