Upload
katjacimermancic
View
215
Download
0
Embed Size (px)
Citation preview
8/20/2019 Načrt prestrukturiranja
1/57
Increase of efficiency and
profitability
5 Year Business Plan
Ljubljana, 4th January 2016
8/20/2019 Načrt prestrukturiranja
2/57
© ADMETAM
Agenda
Executive summary
Initial situation
Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation
8/20/2019 Načrt prestrukturiranja
3/57
© ADMETAM
Develop realistic growth strategy based upon new business model, technical competence centre Žir i
The ALPINA story: The time is NOW
Source: ADMETAM
FROM …. TO ….
• Production dominated business model,no marketing and sales support, retail outlets
• Market led product development & sales focus,brand management / marketing, retail business
• Overcapacity/ inefficiency/ inflexibility andunprofitable third party production
• Benchmarked OEU/ OEE/ appropriate capacities/outsourcing of peak requirements/ flexibility
• Lack of profitability/ own funding/ sustainability,corporate value?
• Competitive profitability / self sufficiency/ sustainabilityIncrease corporate value
• “We can do it all and better”, neglecting added valueof technical competence and bundling
• Applying core competences, outsourcing non-corebusiness, development of technical competence centre
• Organisation without leadership/ strategy/transparency/ performance management
• Strategic positioning and framework / group widetransparency/ key performance indicators and reward
8/20/2019 Načrt prestrukturiranja
4/57
© ADMETAM
Executive summary (1/2)
Market
• Markets for Sport and ALLDAY still with small growth partly developed by variety of product
• ALLDAY lost market share in Europe to be compensated by better product range/ internationalisation
• Need to complement product range in line with market requirements and own competence
Sport
• Sport market very competitive with big players across all relevant countries
• Stronger cross country presence, downhill and trekking need distribution/ marketing development
• Product range to be carefully streamlined, brand extension needed (complementary product)
ALLDAY
•Collection and brand development to be strengthened, consider design support
• Internationalisation together with local presence at fairs and competent management
• Price calculation to reflect product development and internationalisation•
Retail
Source: ADMETAM
• Main retail market former Yugoslavia still with high potential due to brand awareness
• Growing competitive pressure (Deichmann, CCC, Mass, Humanic) requires network development
• Appropriate retail network with clear KPIs and retail concept to be developed
8/20/2019 Načrt prestrukturiranja
5/57© ADMETAM
Executive summary (2/2)
Footprint/
Operations
Source: ADMETAM
Organisation
• Implement new organisation with 2nd tier management considering core competences/ centralisation
• Establish functioning management system and appropriate transparency and control, esp. subsidiaries
• Provide leadership, focus continuously on objectives and their measurement
Profit/ Loss
• Increase EBITDA to > 15% of sales by improving gross margin and reducing cost
• Implement entire improvement programme as quickly as possible
• Focus on top-line development, raising international potential supported by efficient marketing
Balance Sheet/
Cash Flow
• Ensure Group’s cash position by fast cost reduction/ sale of assets and bridge finance as required
• Equity ratio to be improved by net profit/ debt-equity swap considering debts of subsidiaries
• Establish full transparency group wide/ monthly consolidation/ integration of subsidiaries
• Implement new footprint to increase capacity utilisation and reduce cost significantly
• Eliminate duplication of office functions and warehouses across the region, centralise group functions
• Improve productivity on all lines and ensure equipment utilisation by appropriate maintenance
8/20/2019 Načrt prestrukturiranja
6/57© ADMETAM
Agenda
Executive summary
Initial situation
Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation
8/20/2019 Načrt prestrukturiranja
7/57© ADMETAM
ALPINA is facing two very critical issues to be resolved quickly
EXTERNAL ACTIONS REQUIRED
Over indebtedness /liquidity gap Operational inadequacy
Holistic
restructuring
ALPINA with liquidity gap of 3.8 Mil. Euro
in 2016 (bridge finance) Equity at 0.9 Mil Euro by 31.12.2015 Eliminate all risks contained in balance
sheet, restructure also intercompany
relations
Prepare for reorganisation/ social plans Debt/ equity swap inevitable to cover
corrective actions
Target equity ratio of about 20%, increaseby net profit in future years
ALPINA with massive over-capacity in
almost all areas Capacity utilisation < 50% in plants and
prototyping
No capex/ maintenance over years/risk of production stop
Too high cost of goods limit sales potential Operational restructuring must close
liquidity and profitability gap
Cost savings must enable futurefunding of business development
1
Bridge finance of 3.8 Mil. Euro in early 20162
3
Customers “advanced” payments to smoothtransition in 2016
4
Continue restrictive capex policy
Debt/ Equity swap : up to 4.5 Mil Euro
EBITDA € 2.6 Mil./ 2015 Act
Net loss € -1 Mil./ 2015 Actual
Time is of essence !!!
8/20/2019 Načrt prestrukturiranja
8/57© ADMETAM
0
50
100
150
200
250
300
350
400
450
500
20% 30% 40% 50% 60% 70% 80%
S a l e s p
e r h e a d
( t € )
Gross margin1) (%)
Comments
*Estimated 1) Gross margin calculation for ALPINA and peers includes material costs only
Source: Alpina Management, Annual reports 2013 & 2014; ADMETAM
Prada
Aigner
Ferragamo
BuffaloTOD’s
Geox
Deichman
Reno
ECCOBata
CCC Alpina
• Direct competitors likeDeichman, Geox or Renoachieve gross margins of
50%
• With gross margin of48% and 39 t€ sales perhead in 2014 Alpina is
not able to compete in
the chosen market• Top brands like Prada,Ferragamo and Aigner
show gross margins
around 70 % with high
share of own retail
Alpina Group KPIs significantly behind its competitors
Nike
Adidas
Under Armour
Rossignol*
8/20/2019 Načrt prestrukturiranja
9/57© ADMETAM
-1.0
-6.8
1.4
-2.9
1.6
-11.7
2.6
-0.9
5.4
-0.3
EBITDA (in Mil. €) Net profit (in Mil. €)
2012 2013 2014 2015F 2016 Plan
1.535 1.514 1.524 1.5531.278
2012 2013 2014 2015F 2016 Plan
10
32
7
41
-10
42
0.9
32
5
26
Equity (in Mil. €) Debt (in Mil. €)
2012 2013 2014 2015F 2016 Plan
1) New gross margin calculation includes cost of direct materials, direct and hired labour and subcontracting services 2) Before extraordinary/ restructuring effects, after normal inventory
write downs 3) Assumming D/E swap up the amount of € 4.5 Mio. Sources: Alpina Group financial data, ADMETAM
58.1 59.1 61.0
38%
61.6
39%
58.2
42%
Sales (in Mil. €) Gross margin (in %)
2012 2013 2014 2015F 2016 Plan
Sales/ Gross Margin1)%
Capital structure3)
EBITDA2) / Net Profit
Headcount
Financial analysis provides working agenda and priorities
8/20/2019 Načrt prestrukturiranja
10/57© ADMETAM
Most of the overdue payables are towards Chinese suppliers
In T EUR / % total Legend
% of total trade payables
Alpina d.o.o. payables
Alpina China payables
Source: Alpina financial data, ADMETAM
Trade payables overview1
1) Alpina d.o.o. data on 22 Dec 2015 and Alpina China data on 30 Nov 2015
646 380 489 429
3,2701,605
521 387
511
2,252
900 876545
3,781
Undue 0-30 days 31-60 days 61-90 days Over 90 days
In T EUR / % total
27%
• Total payables to suppliers amount to 8,355 T EUR• 45% of total payables is due over 90 days, thereof mostly to Chinese suppliers (3,270 T EUR)• From 2014, debt to Chinese suppliers increased by 800 T EUR on the account of exchange
differences only
• Procurement from local suppliers in China lacking any supervision from Central Purchasing in Žiri
Source: Alpina financial data, ADMETAM
Trade payables overview1
1) Alpina d.o.o. data on 22 Dec 2015 and Alpina China data on 30 Nov 2015; displayed age structure for China does not include arrangements for installment repayment.
11% 10%
7%
45%
8/20/2019 Načrt prestrukturiranja
11/57© ADMETAM
30%
25%
21%
11%
9%
3%
Trekking Trade goodsWoman low shoes Other fashionWoman high shoes Other sport
Broad with “islands”,no direct retail contact
45%
Profile of business units underlines complexity and needs
International
penetration
Product
basis
Delivery
cycle
Future investor’sconsiderations
32% 23%
Women, ex-Yugoslavia,
classic/ comfort
Ex Yugoslavia only,
Slovenia biggest market/ store nu.
Ski XC/ downhill, trekking, no
complementary product (packages)
All product available in Alpina, other
brands, bags, Men limited/ no children
Women/ casual + business, wide lasts,
shoes only, >80% carry over product
Sales 2014
Alpina d.o.o. only
Customer
portfolio
Salescontribution*
SPORT ALLDAY RETAIL
Europe unbalanced (>EE) , lost clients,
~20% of Germ. top retailers
Stores mainly attractive as locations,
not yet as “retail business”Individual/ less attractive collection, some
relation to retailIndividual brand and business
XC all relevant markets via dis-tributors,
DH/ Trekking “Balkan”Europe,/core Eastern E., Italy/ France?,
Russia now problematic
Season collections, some innovations,
re-order possible
2 collections p.a., older season
inventories, ongoing discount2 collections p.a., re-order possible
XC/ >20%, DH/ TR relevant market share
“Balkan” onlyRelevant in ex Yugoslavia only,
continuously shrinking / concept?
Market
shareNo relevant market share in Europe/
more relevant in ex Yug.
Big brands competing worldwide, lack of
Alpina marketing
Growing competition by footwear special./
clothing brands/ Verticals
Competitive
environmentGrowing competition by footwear
specialists / with complementary products
31%
18%
7%7%
6%
25%
Wenaas RossignolIntersport Sportmaster Backcountry Others
14%10%
9%
6%
5%
57%
K-Mail Order GMBH&COResam AGLLC TervolinaBruno Bader GMBHOverseas Power IndustriesOthers
Sources: Alpina, ADMETAM, * Sales 2014, XC = Cross country/ DH = downhill, TR = trekking
1
R t il i i ifi tl b l k t
8/20/2019 Načrt prestrukturiranja
12/57© ADMETAM
Slovenia Croatia BiH Serbia
Retail gross margins are significantly below market peers
Retail gross margins for ALPINA’s and purchased goods in Jan-Mar 14 and Jan-Mar ‘151)
1) Data for period Jan/Mar 2014 and 2015 2) Source: Individual reports
ALPINA DEICH-
MANN
48% 45%
CCC
54%
WORT-
MANN
45%
Benchmark Gross Margin % of sales (2013/14)2)
ARA
56%
33%35%
21% 22%
2014 2015
Alpina Trade goods
23%
28%
20%
27%
2014 2015
40%39%36% 36%
2014 2015
40%
32%36%
2014 2015
47%
Sources: Alpina data, Retail data Alpina, ADMETAM
Alpina includes
manufacturer + retail
margin
1
8/20/2019 Načrt prestrukturiranja
13/57© ADMETAM
Production is not allocated considering cost efficiency
Calculated salary costs
per working hour Production in pairs
by facility (2014)
Increase of hourly rates in Zhonghan due
to negative currency ratio EUR/RMB
Production facility reduction should consider a
disposal of capacities based on optimal utilisation
and lower labour cost
∑ 1,627,083
Facility
Finished
products
(in pairs)
in % of total
Ziri 495,330 30%
Bromy 344,256 21%
Fogs 317,470 20%
Siro 6,340 0%
Zhongshan 463,687 28%
Source: Alpina Management; ADMETAM;
∑ 1,767,740
Facility
Half finished
products (in pairs)in % of total
Ziri 295,450 17%
Bromy 334,683 19%
Fogs 323,217 18%
Siro 215,494 12%
Zhongshan 598,896 34%
7.70
2.78
2.73
2.45
1.89
0 2 4 6 8 10
Ziri
Bromy
Fogs
Siro
Zhongshan
1
US $ i t t t ll id d +25% € 05/14 11/15
8/20/2019 Načrt prestrukturiranja
14/57
© ADMETAM
US $ impact not at all considered: +25% vs. € 05/14 – 11/15
Source: ECB; ADMETAM
Cost advantage China is
eroded
1
C it tili ti i ll l t i i t d tl
8/20/2019 Načrt prestrukturiranja
15/57
© ADMETAM
Žiri Siro Bromy Fogs Zhongshan
Production facilities
Max. capacity
in 2014
Produced
capacities in
2014
Capacity
utilization
Dir. Inj1 line.
Cem.1 line
Cemented1 line
Cemented2 lines
Cemented2 lines
Cemented2 lines
429 326
235 143
54.8% 43.8%
111
6
5.7%
522
344
65.9%
749
317
42.4%
922
464
50.3%
in k pairs Downhill1 line
317
118
37.1%
• All Alpina Production Facilities are not running at high utilization
• Siro has been mainly used to produce HFG and uppers in 2014, only a minor quantity of Trekking shoes
Capacity utilisation in all plants inappropriate and costly
2 1 1 1-2 1 11Production shifts
1) Max. capacity calculation is based on currently available technology with 2 shifts, 8 hours working day and a 6 working days a week, with estimated 48 production weeks in a year
2) 11 hours shift with a 7 days working week
1)
Source: Alpina Management; ADMETAM
2)
1
C t l d ti f d Zh h t f k t
8/20/2019 Načrt prestrukturiranja
16/57
© ADMETAM
Current lead-time for goods ex Zhongshan out of market
Alpina d.o.o,
Žiri, Slovenia Alpina FOGS d.d.,
Sarajevo, BiH
Zhongshan Alpina Footwear Ltd,
Zhongshan, China
Source: ADMETAM; Interview Alpina
Transport in China 1 dayTerminal handling in China 3 days
Sea freight to Europe 28 days
Terminal handling in Europe 3 days
Transport to Ziri 2 days
Transport to Ziri 1-2 days
The future footprint will reduce the time to market by 5 weeks
Total lead time
37 days!
1
Dramatic decrease of investment in production equipment
8/20/2019 Načrt prestrukturiranja
17/57
© ADMETAM
FOGS BiH BROMYBiH
KitajskaCHN
Ziri SLO Siro Ro
2.55
2.17
0.86
0.75
Dramatic decrease of investment in production equipment
Sources: Alpina financial data, ADMETAM
0
1
1
2
2
3
3
Purchasing in Mil. EUR
Alpina had invested continuously and with increasing proportion in the production
equipment since 1960. Beginning of 2000 the investment activity has declined rapidly.
Tangible assets Book Value in Mil.EUR
No
data
Ageing infrastructure
1
Business strategies to be determined on target positioning
8/20/2019 Načrt prestrukturiranja
18/57
© ADMETAM
Clear and market oriented positioning essential to determine strategic directions
Price/value perceived
Manufactory/
Selected
(Niche)
Brand
business
(Image)
Industrial
supplier
(Cost leader)
Vertical
retailer
(Volume)
Success factors
Manufactory/
Handcraft (Nishe)
Brand business
(Image)
Industrial supplier (Cost leader)
Vertical vendor (Volume)
• Brand management/merchandising
• Focus style/ CI/ PR• CRM/ service• Internationalisation• Market segmentation• Flexibility/ quality• Product innovation
• Supply Chain Excellence• Market penetration
• Distribution/ own stores
• Retail competence
• Width of product range/collection cycle
• Marketing/ advertising
• Process excellence/process innovation
• Factory selection
• Logistics/infrastructure
• Cost management
• Sourcing
• Technical competence• Individuality/ productquality/ limited product
offer
• Regional awareness
• Flexibility in production
• Direct customer relation/service orientation
Potential direction
Brand
strength
Business strategies to be determined on target positioning
Cross C
Down H
own
sourced
Trekking
3rdparty
production?
ALPINA?
Iris
Source: ADMETAM
1
Transparency and control over subsidiaries is required
http://www.fashionstores24.de/wp-content/uploads/2013/08/tamaris-logo.jpghttp://www.fashionstores24.de/wp-content/uploads/2013/08/tamaris-logo.jpg
8/20/2019 Načrt prestrukturiranja
19/57
© ADMETAM
Transparency and control over subsidiaries is required
ALPINA
Group
Alpina
ŽiriA-
Prod
Alpina
Bromy
Alpina
BH
Alpina
FOGS
Alpina
CRO
Alpina
SRB
Alpina
CH
Alpina
SIRO
Alpina
Sport
Corp.
Alpina
UA
P&L and
BS SA/A M M M M M M M M M M M
Sales
VolumeM D D D D M M M M
Production
volumeM M M M M
Controlling
reportQ
Budget/
Forecast A A A A A A A A
• Management is focused on volume of production and sales which is followed on daily basis. However, there are limited orno KPIs to set up standards neither in production nor in sales (e.g. “In store” performance indicators or OEE productionefficiency, etc)
• Controlling function is established for retail subsidiaries and Alpina d.o.o. but no formal controlling activities are beingperformed over the production sites
• Statutory auditors are chosen by the local management therefore Alpina should increase control over this process
• Management prepares top-down budget for Alpina d.o.o. while other entities have simplified budgeting procedure withoutreal importance
Sources: Alpina Finance, ADMETAM
1
Agenda
8/20/2019 Načrt prestrukturiranja
20/57
© ADMETAM
Agenda
Executive summary
Initial situation
Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation
Strategic restructuring/ re-alignment based on holistic approach
8/20/2019 Načrt prestrukturiranja
21/57
© ADMETAM
HR organisation
development/mbo
infra-
structure
resources,systems …
finance/
controlling
profit/ cash flow/financing
processes plant network
markets/
customerstechnology/
applications
• Design of blueprint: started• Comprehensive restructuring
plan: ready
Source: ADMETAM
• Create sustainable vision• Define credible roadmap• Exit compulsory settlement
• Prepare for future investor(s)
Aim Years of crisis and losses
-
vision
objectives
values
roles/responsibility/
leadership
business model/ value chain
strategy/
positioningcompetition
New ALPINA with sustainable
financials & business model
• Assure liquidity for supply & investment• Secure customer & supplier base• Create new business & future sales• Align core competences
Strategy
• Consolidate/ close plants• Reduce functional costs• Improve purchasing• Increase overall productivity• Optimise core processes
Operations
• Implement new organisation• Upgrade managerial skills• Improve measurement/ reporting• Enforce stronger leadership
Management
• Corporate presentation finalised• Brand positioning active• Sales recovery activities: started• Internationalisation started
• Plant configuration: finalised• Cost & productivity initiatives:started
• Group wide reorganisationrunning
• New Management Board:CEO & CFO
• New communicationstructure established
• New calculation modelrunning
Strategic restructuring/ re alignment based on holistic approach
2
Ensure strategic fit positioning & product/ market development
8/20/2019 Načrt prestrukturiranja
22/57
© ADMETAM
Sport/ Wellness
Casual/ City
Day/ Business
Evening
LowMedium
High
Couture/ Events
Function
Price
Style
DiscountMass
Masstige
Customer/ Markets Brand/ Products Distribution Strategic framework
• Future positioning
clarified?• Appropriate competenceset?
• Business modeladequate?
• Objectives clear?
• Understanding of market
potential requirements?• Clear priorities regardinggrowth potential?
• Competitive position?• How is marketdevelopment supported?
• Categories reflect
positioning?• Contribution marginsecured?
• Order process own retail?• Product marketingadequate?
• Revenues growth as pre-
requisite for sustainabledevelopment
• Customers segmentation
• Understand expectationsand provide appropriatecompetence set for target
groups
• Prioritise marketdevelopment and invest
• Define market potential and
requirements• Set clear priorities regardinggrowth potential
• Define brand and productportfolio
• Support development
• Provide appropriate distri-
bution structure/ coverage• Clarify and develop role ofown retail
• Develop key clients/ keyaccounting
• Provide sales standards
• Provide strategic framework
for realignment• Make vision and objectivesmeasurable
• Key strategic projects• Develop 5 year plan andtranslate into action/ budget
S t r a t e g i c i m p o r t a n c e Own
retail (allformats)
Own
retail(store)
Multi-
brand
Fran-
chising
Sales potentialH
L
H
L
A L P I N A s t r a t e g i c f r a m e
Vision
Strategic objectives
Strategies
Key strategic projects
5-year plan (assumptions)
2015 - 2020
Budgets/ Forecasts
Annual activity plan
Brand
Product
Price
Customer
segmentation
Functional
requirements
g p g p p
Source: ADMETAM
2
Key drivers of ALPINA strategic development already defined
8/20/2019 Načrt prestrukturiranja
23/57
© ADMETAM
Functional Design
Product
Customers
Distribution
Marketing
Operations
Ensure “modernity and function” by on-going design collaborations
Shoes and bags as platform, extend to new categories if appropriate
Customer centric organisation and business development
Internationalise via new doors and co-operations, new technology
Integrated multi-channel brand marketing, specific product marketing
European footprint/ technical knowledge, integrated/ efficient processes
Key drivers of strategic development
y g p y
2
New organisation market-/result driven - establish profit centres
8/20/2019 Načrt prestrukturiranja
24/57
© ADMETAM
Full responsibility for
• Product development
• Turnover/ sales
• Gross profit/ margin• Cost of company/
division
Full responsibility for
• Product quality
• On-time-delivery• Product cost etc.)
• Overhead cost
Sales
channels
Profit
centres
Costcentres
Customers/ Consumers
Product Development
Sport
Operations
Marketing
Products Services
Demand/ feedback
Corporate services (Finance, Controlling, HR etc.)
Profit centre
Sport
Distributors Own shops Outlets
Profit centre
ALLDAY
E-commerce
Profit centre
Retail
Role model for market orientation
Product Development
ALLDAY
Retailers A
RetailersSport
New organisation market /result driven establish profit centres
Sources: ADMETAM
2
Organisational structure to reflect ALPINA core processes
8/20/2019 Načrt prestrukturiranja
25/57
© ADMETAM
Product
DevelopmentStyle
Material
Research
Pattern
Maker
Prototyping/
Sa.Collection
Supply Chain/
Operations Industrialisation PurchasingProduction
Management
Quality
Management Logistics
SupportProcesses
Product
Development
Process Owne
Retail
Sales ChannelRetail Strategy/
PlanningBuying
Merchan-
disingOperation
Store
Controlling
Sport/ ALLDAY
Sales ChannelsSales strategy/
Planning
Network
Development
Customer
Service
Order
Processing
Sales
Controlling
(Licence
Management)
Licence
Planning
Concept
Development
Licence
Agreement
Licence
Management
Licence
Controlling
PR/ Brand
ManagementBrand
Management Advertising Promotion Fairs
Public
Relations
g p
Higher effectiveness through clear responsibility and process ownership
Source: ADMETAM
Retail
Director
Technical
Director
CEO
Technical
Director
Commercial
Director
CFO
Commercial
Director
2
New organisation with 2nd-tier management as discussed
8/20/2019 Načrt prestrukturiranja
26/57
© ADMETAM
B. Vtič Vraničar
CEO
Management Board
HR/
Legal
Accounting/
Tax/ Consolid.
IT
CorporateServices
Iztok Malačič
Strategy/
Controlling
Subsidiaries
Iztok Malačič
USA
Finance/
Risk M.
g g
B&H BROMY
Source: ADMETAM
Quality
Sourcing
Prod. Planning
Logistics
Product
development
Sport
Sales Mgmt./
Cust. Service
Product
marketing
Alpina USA
Sport
Product
development
ALLDAY
Area Managers
Product
Marketing
Customer
Service
Retail
Mitja Bežan
Buying
Visual/
E-Commerce
Operations/
CRM/ Stores
Regional
Mngmt.SI/B&H
Stores
B&H, FOGS
Regional
Mngmt.CR/ SRB
Stores
Commercial
TBD
Iztok Malačič
CFO
Product
development
Production
SI/ B&H
Marketing/
Communic./PR
Supply Chain/Operations
TBD
2
Agenda
8/20/2019 Načrt prestrukturiranja
27/57
© ADMETAM
Executive summary
Initial situation
Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation
Approach: re-alignment of Alpina Group mainly in two phases
8/20/2019 Načrt prestrukturiranja
28/57
© ADMETAM
Retail improvement
Product portfolio/
collection development
Market orient. pricing/margin improvement
Sales/ wholesale/
marketing/ services
Strategy/ structure/
reorganisation
Overhead cost
Supply chain/ footprint/
productivity/ logistics
1
2
3
4
5
8
Efficiency programme
Q IV
20152016
By 201
Phase I: “Sustainability” Phase II: “Value Creation”
Targets/ results:
Restructure retail network
Sell outdated stocks
Quick wins in productions
Top line growth/ customer base
Market penetration
Reduce overhead cost/ generatecash
Improve gross margins
Targets/ results:
Sport development (package)
Offer „total look” in fashion segment
Strong position of brand
Restructure production network to
capacity requirement (make or buy)Stable capital structure
Minimum 15% EBITDA
Increasing corporate value
Overlapping
phases
7
Sourcing/ organisation/
ITT1)6
Strengthen existing business
Restructure operation holistically
Enterprise value
through growth of sales/ margin
1) ITT = Invitation To Tender
Sources: Alpina Management; ADMETAM
Working capital
reduction9
2
Comprehensive improvement program in implementation
8/20/2019 Načrt prestrukturiranja
29/57
© ADMETAM
Achieved
in
FYE
T EUR
1) Incl. effects from closures in 2015 (+40) and remaining closures in 2016 (+525), closure of Serbia (+100) in 2017
2) Working capital doesn’t have influence on EBITDA and is not included in the total EBITDA effect 6,620
Total
Sources: Alpina Management and Finance; ADMETAM
Product portfolio/
collection development1
Market orient. pricing/
margin improvement2
Sales/ wholesale/
marketing/ services3
Retail improvement4
Supply chain/ footprint/
productivity/ logistics5
Overhead costs8
Strategy/ structure/
reorganisation7
Sourcing/ organisation/
ITT6
Working capital
reduction2)9
Module Measures EBITDA effect
• Reduction of ALLDAY collection develop. costs due to more focused collection• Increased revenues based on extension of the existing product portfolio (i.e.
bags, scarves, small leather goods etc.), esp. in own Retail
• Increase manufacturer margin in calculation process (especially ALLDAY) dueto better collection etc. by 2-3%, starting with AW 16 collection
• New clients/ distributors expected in Japan, China/ SEA• Build up clients in USA and hand over to new sales person in Alpina USA
• Improve store portfolio by closure of unprofitable units• Improved sell through increased traffic and conversion rate, improvement of open-
to-buy process, implementation of merchandising concept; start with SS16
• Closing down/ optimizing own existing production network• Decrease logistics costs through invitation to tender for local logistics in Žiri
and other locations
• Measures by ITT of raw material (especially leather) across the Group• Savings on tooling by 160 TEuro through process improvement, additional
individual measures for optimising other material costs and services
• Decrease general overhead headcount considering future needs of group aswell as core competences
• Reduction of overheads through detailed plan as presented with all measuresquantified
• Old stock of about 400,000 pair of shoes quantified, cooperation with MFFashion and other wholesalers in progress
• New footprint will shorten cycle time for Sports and reduce inventory
140+250 2017
500 2017
200 2017
6651)+200 2017
2,200+250 2017
645+270 2017
1,000 2017
300 2017
200+40 2) 2016/17
2
ALPINA to increase sales and marketing – re-focus internationally
8/20/2019 Načrt prestrukturiranja
30/57
© ADMETAM
ALLDAYSPORT
A. Focus on European development incl. ex-clientsand new, build directly operating organisation
B. Develop American market via local Area Managerusing existing US subsidiary
C. Develop Asian market by sales agents andrelationships to relevant organisations
D. Middle East with special product (i.e. sandals)
Target 2020:Minimum 125 doors
wholesale
Share outside Europe>20%
Own stores in somelocations to supportwholesale
1. Ensure current growth in existing network,focus on all product segments (esp. trekking)
2. Develop market oriented sales organisationrather than product focus only
3. Start development of new distributors in keymarkets in 2016
4. Expand to underdeveloped markets
Target 2020:
Top distributors in allrelevant markets
Segmentation ofkey customers(accounts)and general customerbase
2
ALPINA product development/ sales and marketing more focused
8/20/2019 Načrt prestrukturiranja
31/57
© ADMETAM
ALLDAY AW16 Collection Plan by product groups
• More focused and more merchandisedcollection
• Taking into consideration ALPINA Retail needs
• Growth with Beyond Core category for brandawareness and gaining new customers
• Increase in average production order througha smaller collection
• Styles reduced by > 20%
Source: Alpina ALLDAY department and ADMETAM
3
Marketing Calendar
Area Marketing ALPINA d.o.o. ALLDAY ALPINA d.o.o. SPORT
January 2016
TRADE FAIRS 16. - 19.1. Riva del Garda, Italy,
Collection AW 16/17
24.-27.1. ISPO, Munich, collection
16/17
PR/EVENTSsend PR results Alpina racing team to
customers
send PR material and images to
customers
MATERIAL/CONCEPTS
Define flagship products and
concept for photo shooting,
campaign AW 16/17, export and
retail
prepare lookbook AW 16/17,
deadline end of Jan16
INTERNET ACTIVITIESprepare new banners trekking 16 for
web site
news and results alpina racing team
SOCIAL MEDIA news and results alpina racing team
ADVERTISING
February 2016
Brand stretch − ALPINA Sports and ALLDAY to be intensified
8/20/2019 Načrt prestrukturiranja
32/57
© ADMETAM
?
Already part of ALPINA portfolio
Realisation not certain (trademark issues)
1) Incl. caps, bands, hats and facemasks 2) Both thermal and non-thermal clothing
Cross
Country
Watches
Trekking
Shoes
Hiking
Shoes Snow
boarding- Hunting
- Military
- Work &
safety
Thermal clothing:
- Underwear
- Socks
- Caps- Gloves
Sunglasses
Overboots
Downhill
Socks
Headwear 1)
Body
care
products
HelmetsGoggles
Shoe
care
Grips
Tops
and
bottoms2)
Poles
?
?
Sport
Shoes &
Boots
Skis
Backpacks
Bindings
Ski cases
Boot
bags
Gloves
?
Drink
belts
Snow
boards
Brand stretch – ALPINA Sports
Watches
Eyewear
Bodycare
products
WatchesClothing
Travel
luggage
Shoes &
Boots
Shoe care
FoulardsInlay
soles
Socks Scarfs
BeltsHosiery
Hats Bags
Small leather goods
Men’s
Children’s
Women’s
3
Brand stretch – ALPINA ALLDAY
Building complementary product groups will enable sales channels and market penetration/ competitive strength
Consistent price calculation considering retail price positioning
8/20/2019 Načrt prestrukturiranja
33/57
© ADMETAM
• Expected retail marks can vary from 2.5 to 2.8 timeslocal wholesale price4)
• Normal wholesale price determination process:
backwards based on achievable retail price in aspecific country
RemarksCurrent manufacture margin Alpina Žiri
Source: Alpina; ADMETAM 1) manufacture margin planned min. 30%, currently signif. below 2) different cost items by country e.g. landed costs, duties, customs costs etc.
3) average depends on country 4) Alpina - Europe 2.5 – 2.8
14%18%
9% 8%
18%
5%
12% 13% 12% 12%
0%
5%
10%
15%
20%
6 9 A 0 1
6 9 A 0 2
6 9 0 1 Z
6 2 3 1 1
6 2 9 8 1
6 7 4 9 1
6 7 5 2 1
6 9 3 1 1
6 9 3 1 2
6 9 3 8 2
Different manufacture
mark-ups with target
manufacture mark-up
of >30%1)
COGS Manufacture
marginEXW
price
Landed
costs2)Wholesaler/
Distributor
Margin
(if existing)
Local
wholesale
price
Retail
margin
Retail
price
10%3)x 2.5-2.84)
3
Re-organization of ALPINA retail business with clear focus
8/20/2019 Načrt prestrukturiranja
34/57
© ADMETAM
Visual
management
Internal supportnetwork
Clear buying
process
Management
tools (KPI’s)
Customer
service
Development
of personnel
Re-organization
Program
Targets/ Results
• Review/ optimise portfolio/ eliminateloss making units
• Retail Headquarter more focused onthe business side, store support
• Clear goals to be shared, set of KPI’scontinuously measured and monitored
• Motivated staff
• Strengthened portfolio
• Higher Sales and lower buying
• Improvement of sell thru
• Improved margins/ profitability
• Sustainability/ ability to invest
3
Retail network to be optimised from 104 to 76 stores
8/20/2019 Načrt prestrukturiranja
35/57
© ADMETAM
1
2
1) Position of BIH Retail director to be merged with the position of SLO Retail director 2) Position of SRB Retail director to be merged with the position of CRO Retail director
3) Retail Serbia envisaged to be sold
Source: Alpina; ADMETAM
Outlet
E-shop
SLO
3
Yes
CRO
1
Yes
BIH1)
1
Planned
SRB2)
0
/
Existing retail network and organisation consisting of four markets and four retail directors
Future retail network and organisation includes merger of SLO and BIH, CRO and SRB
Retail directors
SLO BIHRetail directors
Stores
Outlet
E-shop
35
1
Yes
Appoint key store managers to raise performance levels & KPI’s retail
12
0
Planned
CRO SRB3)
26
1
Yes
(1)
1
/
Stores 44 32 14 9
3
8/20/2019 Načrt prestrukturiranja
36/57
Alpina’s future production footprint consolidates into Sport & ALLDAY
8/20/2019 Načrt prestrukturiranja
37/57
© ADMETAM
Alpina d.o.o,
Žiri, Slovenia
Alpina Bromy d.o.o,
Tesanj, BiH
Alpina FOGS d.d.,
Sarajevo, BiH
Source: ADMETAM; Interview Alpina
Sport: assembly,
Prototyping: Sport& ALLDAY
Sport: Preparation,
assembly
ALLDAY: preparation,
assemblySports: assembly +
dir. injection
New potential production footprint
• Production facilities for Sports(Fogs) and ALLDAY (Bromy) with
high efficiency
• Maintain final assembly of Sports inŽiri and ensure retention oftechnological knowledge and
expertise in that product group
• Shift ALLDAY production to Bromyin order to clearly separate divisions
1)
1) Assembling of dir. Injected Trekking shoes in Bromy until complete split of Alpina to Sport & Fashion divisions in the M&A process
Technical
competence
centre Žiri
3
Comparison production capacities & sales plan, still “enough room”
8/20/2019 Načrt prestrukturiranja
38/57
© ADMETAM
0
200.000
400.000
600.000
800.000
Cemented
DH
Max. capacity fut. Footprint cemented
Max. capacity fut. Footprint DH
0
200.000
400.000
600.000
800.000
Direct injection
Cemented
Max. capacity fut. FootprintcementedMax. capacity fut. Footprint dir.In ected
0
200.000
400.000
600.000
800.000
Cemented
Max. capacity fut. Footprint cemented
Future Footprint Sport (3 Y Plan)
Žiri Fogs Bromy
• Production capacity is sufficient to cover the planed quantities
• Capacity utilisation in Fogs and Bromy are expected to reach an acceptable level
• In Žiri significant overcapacity visible according to the future footprint (reaction investor?)
Future Footprint Fashion (3 Y Plan)
Source: Alpina Management; ADMETAM
3
Timeline-footprint reorganisation – to be started immediately
8/20/2019 Načrt prestrukturiranja
39/57
© ADMETAM
China
2016
Q2.
2017
Q3. Q4.. Q1. Q2. Q3. Q4. Q1. Q2. Q3.Q1.
Fogs
Žiri
Bromy
1Siro
2
Shift high end TR to Žiriand move HFG to Fogs
Closing of Siro
Footprint reorganisation
Action steps:
1
2
3
4
Shift TR+XC S to Fogs
Shift TR (dir. Inj.) toBromy
Shift XC S to Fogs
1Shift ALLDAY (dir. Inj.)
to Bromy
Phase 1
Phase 2
Phase 3
Phase 4
Source: Alpina Management; ADMETAM
2018
2 Shift ALLDAY to Bromy
2
1 3
1st April 2016
100% Fashion
X
X
X
4
Sport
ALLDAY
3
31st Dec 2016
Direct Injection
Key procurement levers at ALPINA to be prioritised and implemented
8/20/2019 Načrt prestrukturiranja
40/57
© ADMETAM
Consolidation of raw materials/ tools
Invitation to tender/ negotiations of bundled
material groups
Annual purchases1):
• Leather 2) ( € 4.5 Mio)
• Soles ( € 3.1 Mio)
• Synthetic material ( € 1.9 Mio)
• Accessories ( € 1.7 Mio)
Possible cost reductions exceedeing € 0.5 Mio
1) Based on centralised purchases in Žiri in 2014 2) Including base leathers for both ALLDAY and Sport
Implementation of supplier pool/
integrated supplier management
Reorganisation of procurement (Group-
wide co-ordination, processes, …)
Procurement systems (Material groups-/supplier/ risk-control)
Improvement of procurement methods/
tools (Invitation to tender/ synchronisation/…)
Further conceptual developmentsOperational procurement optimisation
Supplier
selection
Material group
strategy
Supplier-
strategy
Supplier-
evaluation Segment-Lieferanten
Haupt-
Lieferanten
Aufbau-
Lieferanten
Test-Lieferanten
Abbau-Lieferanten
3
• Packaging ( € 0.7 Mio)
Turnaround dependent on implementation of target-organisation
8/20/2019 Načrt prestrukturiranja
41/57
© ADMETAM
Develop blue print organisation Refine organisational structureDetermine capacities and
timeframe
Core-business
Non core-business
Division
Function
...
...
Division
Function
EliminationOptimisation
Division 1
...
...
...
Division 2
...
...
...
2015 2017
I II III
1
FTE
• Define processes/ divisionswhich are core business/
competences
• Assess necessity of corporatefunctions
• Clarify requirement foroutsourcing/ relocation
• Determine level of integration/define synergies
• What processes/ interfaces are to berestructured
• Depth and width of organisation to bedefined
• Which prerequisites need to beconsidered – cost structure/ location/social plan
• Establish group-wide responsibilitiesand communication
• Capacity of fully operating unit(quantitative/ qualitative)
• Benchmark individual processes
• Which tasks will be eliminated bywhen
• Which milestones/ deadlines are tobe considered
• Manage communication
n
n
n n
n
n
2016
IV
4
2
Re-alignment fundamental for securing profit & value creation
8/20/2019 Načrt prestrukturiranja
42/57
© ADMETAM
Evaluate “make or buy” production/ logistics considering future strategy and risk profile
Reduce organisational complexity/ improve efficiency
Develop strategic framework Alpina incl. product/ market expansion
Build an effective (accountabilities) and efficient Group organisation
Focus on core competences and implement future concept
Realise cost saving/ profit improvement potential
Source: ADMETAM
4
Agenda
8/20/2019 Načrt prestrukturiranja
43/57
© ADMETAM
Executive summary
Initial situation
Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation
Achieve profitability and re-alignment to build sustainable future
8/20/2019 Načrt prestrukturiranja
44/57
© ADMETAM
Extend implementation restructuringprogramme, streamline supply chain/ raisepurchasing potential, release capital (stock)
Provide final strategic direction/ agreebusiness strategy/ 5 y plan/ ensure p.b.t.
Develop new business structure/ organi-sation, market orientation/ business model
Establish core competences and marketoriented product development
Improve existing distribution prepare new;
improve retail action and transparency,start sales/ marketing initiatives
Stabilising existing client network andturnover
Monitor cash flow/ reducecapital in stock/ assets
Immediate actions/ quick wins(capex stop, termination of contracts,stop marketing)
Agree and implement restructuringprogramme
Re-organisation and comprehensive
cost reduction
Quality organisation and management
Strategic extension of product range,
complement brand/ product portfolio
Market expansion (also own stores);push raising quality of distribution,penetrate key regions
Product/ service innovations, E-comm.,investment in brand/ PR
Co-operation/ strategic alliances
Financial stabilisation/ improvementequity ratio, transparency & control
Stop loss and
cash burn
Effective structure
Positive EBT
Growth
ROCE
Results Results Results
Reduce cost structure –release capital
Build organisational strength
and sustainability
Implement strategy −create value2016 2016 - 2017 2017 +
Over-
lapping
Operationally
achieved
Key questions:
• How to financially support restructuring?• When is right time to sell (2nd half 2016)?
Expansion MaturityStart-upDegene-
rationSaturation ………
… or …
Turnaround/
Expansion
Insol-
vency
Restructuring
necessary
Profit
Growth
Source: ADMETAM
4
Plan assumptions
Plan assumptions include current situation/realistic growth scenario
8/20/2019 Načrt prestrukturiranja
45/57
© ADMETAM
p
Sales SPORT: Closer cooperation with existing and/or new distributors to regain lost market shares in themarkets with higher potential from AW17 onwards
ALLDAY: opening new markets through own company (US) and in cooperation with distributors (China, Asia); increase number of doors by 50% until 2020
Retail: increase sales per sqm by 45%, € 1.3 Mio additional revenues by 2020 through new store
openings; additional € 2.0 Mio through portfolio extension (bags, small leather goods, foulards etc.); closeloss making Serbian subsidiary in 2016 and outlet in CRO in 2018, open an outlet near Belgrade in 2017
Product/
Channel mix
Sport: build up trekking segment in own retail; develop new markets with specialised hunting/ army boots ALLDAY/ Retail: increase Price/Quality mix, more focused collection from AW16 onwards, grow with
Beyond Core (new customers)
Retail: Implement a complete merchandising concept/ optimize retail network/ close stores Retail: integrate purchased non-Alpina products into Alpina product portfolio
Gross Margin Margin positively affected by footprint optimisation, new calculation system and new markets (US, Asia) Margin for new products in line with the future positioning
Increase of gross margin in own retail by 9 percentage points in Croatia and 3 percentage points inSlovenia through better pricing and portfolio extension
Cost/
Infrastructure
Cost reduction according to improvement programme and timeframe considered Re-organisation in line with strategic and financial requirements to result in lower overheads Optimization of production facilities (2x Bosnia, Slovenia, China, Romania) to increase efficiency and
utilization; new footprint to be implemented by beginning of 2017
Marketing expenses to grow over time in line with sales 2% inflation rate considered, 3% of salaries increase, all other costs grow at inflation level
Capex/ Funding From 2017 onwards € 1 Mio. capex p.a. into development DH/XC/TR, € 2 Mio. capex for equipment group -wide p.a. Principal repayment included as per Financial Restructuring Plan; additional repayments to DUTB in 2017
(€ 2.5 Mio + € 0.6 Mio), repayment of loans to daughter companies in the amount of € 3.2 Mio Working capital funded by positive cash flow, sale of old stock and closed operations/stores Sale of old stock planned at € 2 Mio in 2016 (net effect € –1.25 Mio.); additional decrease of inventory in
the amount of € 1 Mio in 2017
4
Realistic sales increase to achieve sustainable profitability
Development by divisions
8/20/2019 Načrt prestrukturiranja
46/57
© ADMETAM 4
Development by divisions
Development by regions
1) Without revenues for services Sources: ALPINA ALLDAY, Sport and Retail Sales, Controlling; ADMETAM
2015 2020
2015 2020
In Mil. €
In Mil. €
ALLDAY
Sport
Retail
TOTAL1)
10
28
21
59
18
30
23
71
3
8
11
25
100
0
2
59
5
10
12
25
122
1
4
71
Eastern Europe
Northern Europe
Western Europe
Southern Europe
America
China
Asia
Other
TOTAL1)
Key Measures
• Concentrate on existinggeographic areas with Sport
• Improve current client basisboth in Sport and ALLDAY
• Development of US andChina/ Asia using
partnerships (ALLDAY)• Grow in own retail using
existing, optimised structure
• Consolidation of existing retailnetwork
• Opening of outlet in SRB in2017, 1 store in 2018 and 1 in
2019 and 1 in 2020
• Focus on existing Sportcustomer base
• Growth with XC and DH(external
customers) and TR (own
retail)
• One quarter of ALLDAYgrowth through new
customers and new markets
Key Measures
10
28
2118
30
23
ALLDAY Sport Retail
2015 2020
3
811
25
10
0,1 0,32
5
1012
25
12
2 14
2015 2020
Measurable results of the operational restructuring programme
Key Assumptions cost initiatives
C t f i ti
8/20/2019 Načrt prestrukturiranja
47/57
© ADMETAM 4
Key Assumptions – cost initiatives
Initiative P&L category Main levers 2016
T €2017
T €2018
T €2019
T €2020
T €
Product portfolio/
collection development
COGS Reduction of collection development costs for AW16 and SS17 Stronger sales with portfolio extension (bags, small leather
goods), esp. in own retail
120 140 160 180 200
20 250 330 500 760
Market oriented pricing COGS New calculation system starting with AW16, resulting withincreased margin of wholesale prices, esp. with ALLDAY
250 500 500 500 500
Sales/ wholesale/
marketing/ services
COGS New clients in US and Asia starting with AW16, resulting inadditional sales and margin impact
100 200 200 200 200
Retail structure/
improvement
OPEX;
COGS
Improve store portfolio through closure of unprofitable stores Improve sell through by increased traffic and conversion rate,
improve open-to-buy process, set up a merchandising concept
85
(625)2)100
(640) 2)100
(640) 2)100
(640) 2)100
(640) 2)
100 200 200 200 200
Supply Chain/
footprint/ productivity/
logistics
COGS Closure of plants in China and Romania to consolidate andreduce unused capacities and related costs
New logistics centre in BIH
550 2,200 2,200 2,200 2,200
100 250 250 250 250
Sourcing/
organisation/ ITT
COGS ITT for raw materials across the Group (esp. leather) Insourcing of tooling and other individual measures for
reducing purchase costs of other materials
75 645 645 645 645
140 270 270 270 270
Strategy/ structure/
organisation
OPEX Reorganisation of indirect functions, focus on Žiri (prototyping,logistics)
500 1,000 1,000 1,000 1,000
Overhead cost/controlling/ cash
OPEX Based on detailed overheads reduction programme by costtype; strongly related to reorganisation
150 300 300 300 300
Working capital 1) Sale of old stock; reduction of cycle time with new footprint 100 240 240 240 240
Total EBITDA effect 2,190 6,055 6,155 6,345 6,625
1) No effect on EBITDA 2) Total annual EBITDA effect (665T €) incl. effect from closures in 2015 (40 T €), closures in 2016 included in original budget (525 T €) and closure ofSerbia (85 T € in 2016, FYE 100 T €) 3) € 2.4 Mil in 2016 and additional € 1.1 Mil in 2017 (without severance payments in China) Source: Alpina; ADMETAM
Cost of reorganisation:
Total: € 6.3 MilCash relevant: € 3.5 Mil. 3)
Turnaround – programme focuses especially on cost reduction
8/20/2019 Načrt prestrukturiranja
48/57
© ADMETAM
2015 2016 2017 2018 2019 2020
Forecast Plan Plan Plan Plan Plan
Total operating income 62.1 101% 58.2 100% 60.2 100% 64.3 100% 67.7 100% 72.3 100%
Net sales 61.6 100% 58.2 100% 60.2 100% 64.3 100% 67.7 100% 72.3 100%
COGS -38.3 -62% -33.8 -58% -32.3 -54% -34.6 -54% -36.4 -54% -38.9 -54%
Gross margin 23.8 39% 24.4 42% 27.9 46% 29.7 46% 31.3 46% 33.5 46%
GM% 39% 42% 46% 46% 46% 46%
OPEX -21.3 -35% -19.0 -33% -17.8 -30% -18.7 -29% -19.7 -29% -20.8 -29%
Operating EBITDA 2.6 4% 5.4 9% 10.1 17% 11.0 17% 11.6 17% 12.7 18%
Extraordinary/ Restructuring items -0.1 0% -1.8 -3% -2.1 -3% 0.0 0% 0.0 0% 0.0 0%
EBITDA 2.5 4% 3.6 6% 8.0 13% 11.0 17% 11.6 17% 12.7 18%
EBITDA margin 4% 6% 13% 17% 17% 18%
Depreciation -1.7 -3% -1.7 -3% -1.7 -3% -1.8 -3% -1.9 -3% -2.0 -3%
EBIT 0.8 1% 1.9 3% 6.3 10% 9.2 14% 9.7 14% 10.7 15%
Net financial result -1.6 -3% -1.8 -3% -1.3 -2% -1.0 -2% -0.9 -1% -0.8 -1%
Other result 0.0 0% 0.0 0% 0.0 0% 0.0 0% 0.0 0% 0.0 0%
EBT -0.8 -1% 0.1 0% 5.0 8% 8.1 13% 8.8 13% 9.9 14%
Tax 0.0 0% -0.1 0% -0.9 -1% -1.4 -2% -1.5 -2% -1.7 -2%
Net profit -0.8 -1% -0.3 -1% 4.2 7% 6.7 10% 7.3 11% 8.2 11%
Impact of improvements -0.1 -1.8 3.9 6.1 6.2 6.5
4
Alpina group P&L (in Mil. €)
1) Incl. minority interest for the period 2017-2020 2) Shown as net effect including improvements and restructuring costs
Source: Alpina; ADMETAM
1)
2)
Development of Capital structure – debt level can be reduced
8/20/2019 Načrt prestrukturiranja
49/57
© ADMETAM 4
Capital structure Alpina group (in Mil. €)
Debt
Equity position strengthens after the deterioration in 2014 and 2015
on the account of strong operational performance
Debt can be reduced to more moderate levels
Equity
Source: Alpina; ADMETAM
7
-10
0.9
5
9
16
23
31
2013 ACT
2014 ACT
2015Forecast
2016Plan
2017Plan
2018Plan
2019Plan
2020Plan
41 42
32
26
2119
1613
2013 ACT
2014 ACT
2015Forecast
2016Plan
2017Plan
2018Plan
2019Plan
2020Plan
Solid capital structure and internal cash flow as key points
8/20/2019 Načrt prestrukturiranja
50/57
© ADMETAM 4
Inventory
Debt/EBITDA ratio
Working capital
Cash flow from operations
Alpina
Group
Inventory as
% of sales
NWC as % of sales
Debt/EBITDAratio
T EUR
36%
27%
2015 F 2020 Plan
26%
23%
2015 F 2020 Plan
12.6x
1.0x
2015 F 2020 Plan
-423
9,929
2015 F 2020 Plan
Source: Alpina; ADMETAM
Development of cash flow 2016 – 20 proves strengthening of FCF
8/20/2019 Načrt prestrukturiranja
51/57
© ADMETAM 5
Alpina group cashflow (in Mil. €)
Source: Alpina; ADMETAM
2015 2016 2017 2018 2019 2020
Forecast Plan Plan Plan Plan Plan
Operating Activities
Profit for the period -0.8 -0.30 4.2 6.7 7.3 8.2
Add Back Non-Cash Items 1.2 1.9 2.9 2.0 2.1 2.2
Add Back Interest Costs 1.6 1.9 1.3 1.0 0.9 0.8
Working Capital Effects -2.2 0.6 0.2 -0.5 -1.0 -1.3
Change in other assets 0.0 0.0 0.9 0.4 0.0 0.0
Change in other liabilities -0.2 0.0 0.0 0.0 0.0 0.0
Operating cash flow -0.4 4.2 9.3 9.7 9.3 9.9Investment/financing
Capex -0.4 -1.6 -3.0 -3.0 -3.0 -3.0
Financial (incl. Interests) 0.9 -3.1 -6.0 -3.1 -4.0 -4.3
Divestment & restructuring 0.0 0.4 0.0 0.0 0.0 0.0
Investment/financing cash flow 0.5 -4.3 -9.0 -6.1 -7.0 -7.3
Opening Cash 0.8 0.9 0.7 1.1 4.7 7.0
Net Cash flow 0.1 -0.2 0.4 3.6 2.4 2.6
Closing Cash 0.9 0.7 1.1 4.7 7.0 9.7
Early 2016 financial requirements to be covered by bridge finance
1st half 2016 end of 2016
8/20/2019 Načrt prestrukturiranja
52/57
© ADMETAM
Financial
needs
3.8
mil. €
Funding requirements early 2016 as investment in working capital and restructuring programme.
Immediate re-payment through reduction of cost structure, margin improvement and sales of old stock.
Immediate start of restructuring fundamental to meet timelines: finance and savings
Restructuring
requirements
2.7
Mil. €
Working
capital
Alpina
d.o.o
3.8
Mil. €
Bridge
finance
1) Cash in in the amount of € 2 Mio on the account of sales of old stock planned for 2016Sources: Alpina Finance, ADMETAM
5
1.1
Mil. €
3.8
Mil. €
Re-payment
through
Stock sales1)/
savings
Agenda
8/20/2019 Načrt prestrukturiranja
53/57
© ADMETAM
Executive summary
Initial situation
Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation
ALPINA Group
Project organisation with clear and measurable targets
65 45 Mil EBITDA =
8/20/2019 Načrt prestrukturiranja
54/57
© ADMETAM
• Gross Margin1) 2014: 37.9%• Gross Margin1) 2015: 38.7%
• ALPINA• ADMETAM
M1: Product portfolio/
collection development
M2: Market oriented
pricing/ margin improv.
• ALPINA• ADMETAM
ALPINA Group
ALPINA Group Target
• Gross Margin %: 46% by
internal measures and
through product
market offensive
• ALPINA• ADMETAM
M5: Supply Chain/
footprint/ working cap.
M3: Sales/ wholesale/
marketing/ services
• ALPINA• ADMETAM
M4: : Retail structure/
improvement
• ALPINA• ADMETAM
1) New gross margin calculation includes cost of direct materials, direct and hired labour and subcontracting services
Source: ADMETAM
M8: Overhead cost/
controlling/ cash
• ALPINA• ADMETAM
• ALPINA• ADMETAM
M6: Sourcing/
organisation/ ITT
• ALPINA• ADMETAM
M7: Strategy/ structure/
reorganisation
Clear Targets Detailed programme Project Organisation Responsibilities Control
“Ingredients”
2.67.6
22.4
65.4
Alpina EBITDA2014
Alpina EBITDAafter impr.
EBITDA (mEUR) EV (mEUR)
5 Mil EBITDA
25 Mil
enterprise
value
5
12
Business development ALPINA with clear timeline
Shift ALLDAY from FOGS to BROMY Adjust “indirect”production
8/20/2019 Načrt prestrukturiranja
55/57
© ADMETAM
Source: ADMETAM
5
P r o d u c t i o n
H Q
R e t a i l
A L L D A Y
S p o r t
Implement all operational improvements in line with potential and return
Reorganisation/ consider the removal HQ from Žiri to Ljubljana/ merge with retail function
Close non profitable stores and sell properties as soon as possible
Implement retail operational discipline/ ensure adequate
store management/ buying and stock policy
Clean up all inventories and sell
surplus stock to generate cash1)
Define collection and price structure/ source product accordingly
Define collection and price structure/ source product accordingly
Define distribution strategy and
roll out plan
Clean up all inventories and sell
surplus stock to generate cash1)
Review entire distribution structure
and improve market penetration
Define appropriate marketing support
considering return on marketing
Ensure transparency across the business units and integration/ control of subsidiaries
2013OCT ‘15 NOV ‘15 DEC ‘15 JAN ‘16 FEB ‘16 MAR ‘16 APR ‘16 MAY ‘16 JUN ‘16 JUL ‘16
Shift ALLDAY from Žiri to BROMY
Close factory Romania/ insource volume
Review/ Close factory China/ insource volume
production
considering central
planning
requirements
start dates, footprint timeline page 38 1) Cash in from sales of old stock expected in the second half of 2016
Restructuring and re-alignment of ALPINA Group - summary
Operational and financial restructuring
8/20/2019 Načrt prestrukturiranja
56/57
© ADMETAM
Improvement
programme 2016
(EBITDA)
Cash requirement(temporarily 2016)
Debt/equity swap2016
Product and market
development 2020
(EBITDA)
Jan Feb Mar Apr May Jun Jul Sep Dec 2017
> 6 Mil. Euro 3.8 Mil. Euro up to 4.5 Mil. Euro
Attend
MICAM/ Milan(ALLDAY)
Approval
Business plan
> 5 Mil. Euro
Operational and financial restructuring
e x t e r n a l
i n t e r n a l
Shift Sport
prod. to
FOGS
Close
plant
Romania
2016
5
Approval
Reorganisation plan
Attend
ISPO
(SPORT)
Attend
ISPO
(SPORT)
(Evtl. attend
FFANY
New York(ALLDAY))
Attend
FFANY
New York(ALLDAY)
Approach new
international
customers(ALLDAY)
Close
plant
China
Move ALLDAY
production
Žiri to Bromy 1)
Move dir.
injection
to Bromy
Approach new
international
customers(ALLDAY)
Attend
MICAM/ Milan
(ALLDAY)
Reorganisationindirect headcount
1) Detailed footprint timeline to be found on page 38
Disclaimer
ADMETAM BUSINESS CONSULTANTS GmbH developed the presentation based on the data provided by ALPINA Group and its outside experts .
8/20/2019 Načrt prestrukturiranja
57/57
© ADMETAM
Thus ADMETAM BUSINESS CONSULTANTS GmbH relies on the accuracy and completeness of this informat ion and these documents. ADMETAM BUSINESS CONSULTANTS GmbH
also assumes that this data is up-to-date and not misleading and that it was appropriately supplemented, including verbally, so that no document or information was withheld from
ADMETAM BUSINESS CONSULTANTS GmbH in this regard. In particular, ADMETAM BUSINESS CONSULTANTS GmbH has not separately verified the accuracy and completeness of
the data provided to it.
The documents contained in the report and all information in this regard are confidential. The presentation, including all the documents associated with it, was prepared by ADMETAM
BUSINESS CONSULTANTS GmbH in connection with your current or contemplated retention of our services or other authorization and may not be used for purposes other than those
expressly agreed upon by ADMETAM BUSINESS CONSULTANTS GmbH and the actual or potential client, nor can third parties rely in any other way on the statements contained in this
presentation or the documents associated with it. Moreover, this presentation may not be made available to third parties in excerpt or in summarized or otherwise referenced form, unless
ADMETAM BUSINESS CONSULTANTS GmbH gives its prior, written consent. All materials were prepared specifically for use by persons who are particularly familiar with the business
and other affairs of the Company, and ADMETAM BUSINESS CONSULTANTS GmbH undertakes no obligation to update or otherwise adapt the materials and information in the future.
ADMETAM BUSINESS CONSULTANTS GmbH has reviewed the relevant documents, in its view, with respect to their business ramificat ions. However, ADMETAM BUSINESS
CONSULTANTS GmbH’s guarantee excludes all legal and tax matters. No statement contained in the presentation may be understood to constitute tax or legal advice.
ADMETAM BUSINESS CONSULTANTS GmbH has not evaluated any of the legal aspects of this presentation or any quest ions, recommendations or other areas of activity not intended for
ALPINA Group.
All persons who receive this report – even in excerpt – or discuss it do so with the agreement that the information contained in it shall not be used for other than its intended purpose.
This presentation contains certain forward-looking statements, which are based on the current assumptions and forecasts of the management of ALPINA Group with respect to the
Company’s results. Various known and unknown risks, uncertainties, and other factors can cause the actual results, financial situation, and development or performance of the Company todiffer from the estimates made here. These factors include, among others: (1) business declines in the industry in which the Company performs its business activities, (2) increases in the
costs of raw materials, particularly when such costs cannot be passed on to the customer, (3) liability, particularly in connection with environmental laws and product liability claims, and (4)
changes in the general economic situation. ADMETAM BUSINESS CONSULTANTS GmbH assumes no obligation to update such forward-looking statements and adjust them to reflect
future events or developments. Further, all forward-looking statements, especially the foregoing, are made under the (usual, non-exhaustive) reservations.
The parties acknowledge that intellectual and substantive property rights in the formulations and documents being provided belong to the particular ADMETAM BUSINESS CONSULTANTSGmbH partner who provides the documents. Making confidential information available should not be interpreted as expressly or implicitly granting or approving license rights or the like,
including those with respect to any inventions, discoveries, or improvements with respect to the joint project that are made, conceived, or achieved before or after the start of the
collaboration. In particular, the confidential information that has been exchanged does not establish any right of use for the recipient within the meaning of the copyright law.
© Copyright 2015. ADMETAM BUSINESS CONSULTANTS GmbH, Taunusstraße 5, D - 65183 Wiesbaden. All rights reserved. When making citations, please indicate that “ADMETAM” isthe source.
Source: ADMETAM
5