Terminal X Online Ltd.

Prospectus • Jul 12, 2021

טרמינל איקס אונליין בע״מ

)"החברה"(

12 ביולי, 2021

לכבוד	לכבוד
רות ערך רשות ניי	ביב בע"מ רך בתל א לניירות ע הבורסה
www.isa.gov.il	www.tase.co.il

הנדון: מצגת למשקיעים לצורך בחינת אפשרות להנפקה ראשונה לציבור של החברה

בהמשך לאמור בדיווח המיידי של פוקס-ויזל בע"מ )"פוקס"(, אשר מחזיקה כ59.71%- מהון המניות וזכויות ההצבעה בחברה, מיום 20 באפריל 2021 )מס' אסמכתא: 2021-01-066564(, אשר לפיו החברה החלה לבחון ולקדם ביצועה של הנפקה של מניותיה בבורסה לניירות ערך בתל-אביב בע"מ, לרבות את אפשרות שיווק ההנפקה והשקעה בחברה על ידי משקיעים זרים, ובהמשך למצגת אשר פרסמה פוקס בהקשר זה ביום 7 ביוני 2021 )מס' אסמכתא: 2021-01-096867( ולמצגת אשר פרסמה פוקס ביום 30 ביוני 2021 )מס' אסמכתא: 2021-01-109644(, מצורפת מצגת 1 )הערוכה בשפה האנגלית( אשר בכוונתה של החברה להציג למשקיעים מסווגים ולמשקיעים זרים מחוץ לישראל.

יובהר, כי למועד פרסום דיווח מיידי זה מבנה ההנפקה, עיתויה, היקפה ותנאיה )אם וככל שתבוצע( טרם נקבעו באופן סופי. אין כל ודאות כי דירקטוריון החברה יחליט לבצע את ההנפקה. ביצוע ההנפקה, אם וככל שיוחלט להוציאה לפועל, כפוף לקבלת ההיתרים והאישורים הנדרשים על פי דין והסכם, לרבות קבלת היתר רשות ניירות ערך, אישור הבורסה ואישור דירקטוריון החברה.

אין באמור בדיווח זה, כמו גם במצגת המצורפת לו, משום הצעה לציבור או הזמנה לרכישת ניירות ערך של החברה או של פוקס. הצעה כאמור, אם וככל שתהא, תעשה אך ורק על בסיס תשקיף שתפרסם החברה )ככל שתפרסם( בכפוף לקבלת ההיתרים והאישורים הנדרשים על פי דין.

This announcement and the information contained herein or in the attached presentation are not for distribution in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the "United States"). This document does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities of Terminal X Online Ltd. have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities in the United States or to make a public offering of securities in the United States. Any securities sold in the United States will be sold only to persons reasonably believed to be qualified institutional buyers (as defined in Rule 144A under the Securities Act) in reliance on Rule 144A under the Securities Act.

בכבוד רב,

טרמינל איקס אונליין בע"מ

¹ משקיעים המנויים על התוספת הראשונה לחוק ניירות ערך, התשכ"ח,1968- למעט משקיע מסוג "לקוח כשיר" המנוי בסעיף 12 בתוספת האמורה.

Confidential

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THE TERMINAL X TEAM IS READY FOR TAKE-OFF

Harel Wiesel Shareholder & Chairman

• CEO of Fox Group since 1995 and controlling shareholder of Terminal X since inception
• 30 years of retail experience across verticals
• Experienced entrepreneur with a proven track record in local and international markets

Nir Horvitz Co-Founder & CEO

• Co-founder and CEO of Terminal X since inception
• 18 years of fashion and technology experience and entrepreneurship track record
• Previously held the role of Founder and CEO of Yanga (Israeli fashion brand)
• Holds a BA in Computer Science from the Technion and EMBA from Kellogg-Recanati

Alon Lurie Chief Revenue Officer & Deputy CEO

• Previously spent 7 years at Tenengroup (Israeli ecommerce platform) where he held various managerial positions including CMO
• Spent 10 years as a IAF F-16 fighter pilot
• Holds a BSc in Mathematics and Computer Science from Ben Gurion University and an MBA from Tel Aviv University

Yohanan Nahon Chief Financial Officer

• 25+ years experience in senior finance and accounting roles
• Previously VP Finance at Electra Consumer Products (Israeli electrical appliances provider) and senior auditor at Ernst & Young

Avi Alkabetz Chief Technology Officer

• 15+ years experience in ecommerce working with US online retailers such as Macy's and Williams Sonoma
• Track record of entrepreneurship (e.g. OpenLegacy)

Tomer Spanier Chief Operating Officer

DanaPollackOlsher VP Marketing

Presenting today

MichaelCohen VP Product

Liat Alter VP Merchandising

Shahar Revivo VP Customer Experience

Dana Eany Fashion Director

STRATEGIC INVESTMENT BY GLOBAL E-COMMERCE LEADER

Anders Holch Povlsen

We are very impressed by Terminal X. The company features remarkable capabilities with high sales growth together with a strong increase in business performance, which motivated me to make this partnership. I strongly believe in the company, its capabilities and its growth potential.

Source: Company filings, company websites, press releases, news reports Note:

-

Select ownership stakes

1 Ownership stake of the Holch Povlsen family 4 Deal completion is subject to a successful IPO

2 28.9% ownership via the Holch Povlsen family investment holding, Heartland A/S 5 Post=money valuation. Based on total shares outstanding immediately following the completion of the IPO ( on a dilution 3 Ownership via Bestseller stake assumption taking into account certain RSU that the company intends to issue to office holders)

WE DISRUPTED THE FASHION MARKET: THE "WOW" FACTOR

Broad yet curated offering

WOW! FACTOR THE

Superior localised e-commerce and digital experience

Ultra-fast

delivery¹

4

⁴ Source: Company information Note:

TERMINAL X AT A GLANCE

Source: Company information, Similar Web, Factset as of 27-May-21

Note: The financial information for the years 2018, 2019 and 2020 and Q1 2021 is unaudited, and is based on estimates only. Actual 2018, 2019, 2020 and Q1 2021 financial information may vary from the information provided in the presentation

1 Based on traffic for Israeli fashion e-commerce websites (source Similar Web)

2 Exceptional sales growth vs. selected European online fashion and beauty peers (Zalando, THG, Asos, Boohoo, Boozt, Next and About You), growing at 27.9% on average from 2018A to 2020A 3 EBITDA = Operating profit + D&A; includes the impact of IFRS 16 for the years of 2019, 2020 and Q1 2021

KEY INVESTMENT HIGHLIGHTS

Source: Company information Note:

OUTSTANDING TRACK RECORD OF GROWTH AND CONSISTENTLY RISING PROFITABILITY ¹

Sales (million NIS) EBITDA margin¹

, % of sales

Source: Company information

Note: The financial information is shown on a post-IFRS 16 basis

1 EBITDA = Operating profit + D&A; includes the impact of IFRS 16 for the years of 2019, 2020 and Q1 2021

HUGE OPPORTUNITY FOR FURTHER PENETRATION IN FRAGMENTED MARKETS

Online penetration of total apparel & footwear sales (%), as of FY20A

Market retail sales share of top 3 fashion e-commerce players by country (%), as of FY20A

Note: Other than Greece (entry targeted in the medium-term), the company does not have a specific timeline or business plan for expansion into other geographies

TERMINAL X ATTRACTS ~3X MORE TRAFFIC THAN ITS CLOSEST DOMESTIC COMPETITOR1

Israeli fashion e-commerce websites, million of unique visitors per month

Source: Similar Web

Note: Similar Web only tracks website visitors and therefore misses a meaningful portion of online visitors who visit stores via applications (where applicable)

1 ~3x greater traffic calculated using average of Terminal X vs. the Israeli online competitors shown in the above chart over the Jan-20 to Mar-21 period; excludes international e-commerce competitors active in Israel

A MARKET LEADING POSITION AMONG GLOBAL COMPETITORS

Israeli online traffic share (% share¹ ), Jan-May 21A

Source:	Deloitte, Company information, Similar Web, Terminal X survey Q1 2021 (ABV), ecommerceDB.com (Next year of inception in Israel)			10
Note:	Similar Web only tracks website visitors and therefore misses a meaningful portion of online visitors who visit stores via applications
1	% share of Israeli total online traffic for fashion e-commerce platforms, YTD FY21A	3	Average order value

2 Year of inception refers to Israeli domains only for the brands shown

TERMINAL X LEVERAGES ITS LEADING BRAND EQUITY IN ISRAEL TO GROW A HIGHLY LOYAL CUSTOMER BASE

Net Promoter Score¹

2

Returning customers (yearly)²

10% 20% 30% 40% 50% 60% 70%

Source: askattest.com (NPS), Company information Note:

1 NPS – Net Promoter Score, NPS = % promoters - % detractors, NPS score is between (100) to 100

2 Proportion of customers buying more than once through Terminal X within the past twelve months

Broad yet curated offering

A

WOW! FACTOR THE

Superior localised e-commerce and digital experience

Ultra-fast

B

delivery¹

C

Source: Company information Note:

3a OVER 160 CAREFULLY SELECTED AND HIGHLY RELEVANT BRANDS

3a EXCLUSIVE¹ BRANDS AND COLLECTIONS COUPLED WITH ATTRACTIVE OWN BRANDS

Leading brands

Attractive own brand

Local collaborations with influencers

NOA KIREL x TERMINAL X Israeli singer of the year

KIM OR x TERMINAL X Leading influencer in Israel

1 Refers to brands or collections for which Terminal X is the sole online distributor in Israel

3b ULTRA-FAST DELIVERY AND RETURN¹

– Same day/next working day returns and exchange using doorto-door delivery service

– Supported by a fully robotic warehousing system

• ✓ Significant advantage in collection, speed and scalability ~12k daily order capacity
• ✓ Creates high barriers to entry

– Effective tracking and monitoring of orders

¹⁵ Source: Company information, annual reports (Shein, Asos, Next) Note:

1 Same or next working day delivery anywhere in Israel; orders placed on a non-working day are processed on the next working day except for limited remote locations

3c TRULY LOCALISED APPROACH DRIVING GREAT CUSTOMER EXPERIENCE

Localised shopper experience driven by technology and data Local presence with people on the ground

• Global R&D capabilities, with agile development teams in Israel and Romania

• Advanced UI/UX design capabilities to deliver a simple, fast and innovative interface

• Substantial array of data assets leveraged to fully personalise the offering and experience

We have consistently grown our conversion rate, frequency of visits, and average spend per purchase

DECISIVELY DIGITAL EXPERIENCE LEVERAGING SOCIAL MEDIA AND INFLUENCERS

Up to 70 collaborations across the platform each month

DIFFERENTIATED VALUE PROPOSITION IN ISRAEL COMPARED TO GLOBAL COMPETITORS

offering1 Curated	160+	c.850	c.1,000	Mono-brand
Target customers	All ages	Millennials	Babies & Kids	Teens
Same / next working day delivery and returns	✓			
Warehouse in Israel	✓			
HQ in Israel and focus on local customer service	✓			

3

NO MULTI-BRAND PLATFORM CURRENTLY OFFERS SAME DAY DELIVERY, VERY FEW OFFER NEXT DAY

[•]-[•] working days delivery

LOCALISED LOGISTICS EXPERTISE CREATING STRONG COMPETITIVE MOAT

EFFECTIVE OPERATIONAL FORMULA SUPPORTS PROFITABLE BUSINESS MODEL

Unique combination of start-up DNA and Fox relationship enabling quick and efficient operations

In less than 3 years, Terminal X has achieved profitability while creating high barriers to entry

4a BRAND PORTFOLIO AND PARTNERSHIPS KNOW-HOW SERVING PROFITABILITY

Gross margin¹(%)

Curated brand selection and exclusive partnerships driving strong and constantly improving commercial terms

Growing share of private label offering with inherently highly gross margin

✓

✓

Deep capabilities in assortment and merchandising coupled with data driven inventory management

Source: Company information, annual reports (Asos and Next)

Note: The financial information for the years 2018, 2019 and 2020 and Q1 2021 is unaudited, and is based on estimates only. Actual 2018, 2019, 2020 and Q1 2021 financial information may vary from the information provided in the presentation

4b HIGHLY EFFICIENT DATA-DRIVEN MARKETING STRATEGY

Source: Company information

Note: The financial information for the years 2018, 2019 and 2020 and Q1 2021 is unaudited, and is based on estimates only. Actual 2018, 2019, 2020 and Q1 2021 financial information may vary from the information provided in the presentation

FY18E FY19E FY20E Q1-21E

STRONG BRAND EQUITY DRIVING CUSTOMER RETENTION RATES

Customer cohorts by first year of purchase

Higher sales retention rates than peers

Sales retention rate benchmarking at IPO¹(%)

FY cohort (& prior)

Source: Company information, Company filings Note:

ATTRACTIVE CUSTOMER ECONOMICS

Rapid and significant improvement in LTV / CAC¹ ratio over time across all cohorts

Source: Company information

Note: 1 Life Time Value is the average contribution (revenue net of COGS and logistics costs) that a customer will generate throughout their lifespan; Customer Acquisition Cost is the cost related to acquiring a new customer 2 Refers to first purchase by new active customer

FULLY AUTOMATED AND EFFICIENT WAREHOUSING LEADS TO DECREASING LOGISTICS COSTS

Fully-automated warehousing

Source: Company information

Note: The financial information for the years 2018, 2019 and 2020 and Q1 2021 is unaudited, and is based on estimates only. Actual 2018, 2019, 2020 and Q1 2021 financial information may vary from the information provided in the presentation

Variable costs (including IFRS-16 impact) as % of sales

START-UP DNA COMBINED WITH FOX RELATIONSHIP ENABLING EFFICIENT OPERATIONS

Profitable and scalable model, creating high barriers to entry

• Source: Company information, Fox Group disclosures, Factset as of 27-May-21, Statista (Israeli household penetration)
• Note: The financial information for the years 2018 and 2020 are unaudited, and are based on estimates only. Actual 2018 and 2020 financial information may vary from the information provided in the presentation 1 As of 31-Dec-20

Note:

MULTIPLE VALUE LEVERS FOR FUTURE GROWTH AND PROFITABILITY

CONTINUED ACCELERATION IN ISRAELI MARKET

Israeli apparel and footwear TAM¹ (NIS billion) Terminal X fashion e-commerce market share over time²

• Source: Company information, Deloitte (market sizes and penetration data), OFX (average NIS:USD of 0.291118 during FY20A used for illustrative purposes only)
• Note: The financial information for the years 2018, 2019 and 2020 is unaudited, and is based on estimates only. Actual 2018, 2019 and 2020 financial information may vary from the information provided in the presentation 1 Total addressable market
  • 2 Calculated as Terminal X revenue divided by the Israeli online apparel and footwear TAM

SYNERGISTIC EXPANSION INTO NEW PRODUCT CATEGORIES

Indicative Israeli homewares and home furnishings TAM1,2

30 Online penetration beauty and personal care (%), as of FY20A Online penetration homewares and home furnishings (%), as of FY20A

home brands (Q1, Q2 2021) 3 :

Source: Deloitte (market sizes and penetration data), Company information (new brands), OFX (average NIS:USD of 0.291118 during FY20A used for illustrative purposes only)

Note:

1 Total addressable market

2 Israeli total homewares and home furnishings market size not available, hence the penetration used to calculate the total market size is the global average i.e. c.12.6% as of FY20 3 Logos shown are illustrative examples of potential new brands only

STRONG UPTAKE IN COSMETICS

BUSINESS MODEL IS SCALABLE TO OTHER ATTRACTIVE GEOGRAPHIES AT LOW COSTS—GREECE CASE STUDY

New geography selection criteria

• Expected to grow rapidly
• No local leaders fragmented, few multi brand players
• Underserved markets
• Local customization is needed (Language, unique culture, geographic distribution)

Targeting entry in the medium-term to a c.US\$3.7 billion market1

Example geography—Greece

Note:

Source: Deloitte (online penetration apparel & footwear, Greece delivery times), SimilarWeb (Leading e-commerce players in Greece, 2021)

WINNING APPROACH TO EXPANDING INTO NEW TERRITORIES

Strategic framework to retain the strong value proposition

CLEAR ROADMAP TO REPLICATE ISRAELI SUCCESS IN GREECE AT LOW COSTS

6 months for phase 1+2 milestones

	Exploration Phase 1 Phase 2		Delivery across Athens in hours1
Human Capital		Hire country manager and leadership team	Develop localized team and customer service
Technology	Adjustments needed (UX/UI, local payment)	Create tailored technology solution infrastructure	Set and connect (site, data, global-local)
Logistics	Market standards and customer expectations	Plan logistics framework (supply chain, local WH, last mile, connectivity)	Build the warehouse and set delivery agreements	New territories expansion
Marketing	Digital marketing landscape Top influencers in the market	Partner with the right influencers to deliver our marketing strategy	Build awareness campaigns delivering the TX USP in the market – campaigns, influencers, data	2022 - 1 2023 - 1
Assortment	Best mix between global and local brands for the local taste	Collaborate and partner with local brands	Structure tailored brand assortment on site	Acceleration 2024
	Total investment is less than 30M NIS Break even point in EBITDA – 18-24 months

SELECT CITIES WITH ATTRACTIVE MARKET DYNAMICS

\$ millions

Fashion e-commerce market ¹

Significant TAM opportunity of ~US\$9bn billion

No online-fashion player offers same working day delivery

Few brick and mortar players offer same working day delivery, with market leaders mostly offering 2 working day delivery

TERMINAL X GROWING SIGNIFICANTLY FASTER THAN GLOBAL COMPETITORS WITH REMARKABLE MARGIN PROFILE

[•] Global competitor peer set average (%)

Notes: Showing most recent financial year for competitors

1 Terminal X EBITDA margin is for the period Q1 LTM 2021. EBITDA = Operating profit + D&A; includes the impact of IFRS 16

NEAR AND MEDIUM TERM OUTLOOK

1 EBITDA = Operating profit + D&A; post-IFRS 16;Does not include stock based payments

KEY INVESTMENT HIGHLIGHTS

Source: Company information Note:

Exceptional sales growth vs. selected European online fashion and beauty peers (Zalando, THG, Asos, Boohoo, Boozt, Next and About You), growing at 27.9% on average from 2018A to 2020A (Factset)

Q&A

Appendix

SUMMARY OF HISTORICAL FINANCIALS

		Fiscal years			Quarterly
NIS million	FY18A	FY19A	FY20A	Q1 20A	Q1 21A
Sales	31	80	226	26	93
% growth		158%	182%		265%
Cost of sales	(18)	(44)	(124)	(15)	(50)
Gross profit	13	36	102	11	43
% margin	43%	45%	45%	43%	47%
SG&A expenses	(33)	(62)	(95)	(15)	(34)
Operating profit	(19)	(26)	6	(4)	10
% margin	(62%)	(32%)	3%	(14%)	10%
EBITDA1	(18)	(24)	14	(3)	15
% margin	(59%)	(29%)	6%	(12%)	16%
Capex	(3)	(5)	(6)	(1)	(2)
% of sales	9%	6%	3%	6%	2%

Note: The financial information is shown on a post-IFRS 16 basis

1 EBITDA = Operating profit + D&A; includes the impact of IFRS 16 for the years 2019, 2020 and Q1 2021

2 OpFCF = EBITDA – Capex

BALANCE SHEET

NIS million	31-Dec-2019	31-Dec-2020	31-Mar-2021
Cash and cash equivalents	3.5	44.6	41.9
Pledged deposit	-	4.5	-
Trade receivables	17.7	51.6	43.8
Other accounts receivable	7.9	19.3	18.8
Inventory	23.1	44.5	43.6
Total current assets	52.2	164.5	148.0
Other long-term receivables	35.8	26.0	25.6
Fixed assets	1.4	2.0	2.1
Right-of-use assets	1.5	46.5	58.8
Intangible assets	6.5	9.3	10.2
Deferred taxes	12.4	11.5	9.6
Total non-current assets	57.6	95.2	106.3
Total Assets	109.8	259.8	254.3
Current maturities of loans from banking corporations and other credit providers	5.2	21.0	12.6
Trade payables	29.3	91.0	75.7
Current maturities and credit balance	0.5	12.3	16.4
Accounts payable and credit balances	7.1	24.5	24.8
Shareholder Loan	12.2	22.2	22.2
Total current liabilities	54.2	171.0	151.6
Loans from banking corporations	42.8	35.4	32.4
Liability for lease	1.1	38.1	47.5
Liabilities for termination of employer-employee relationship	0.2	0.4	0.5
Total non-current liabilities	44.1	73.9	80.4
Total liabilities	98.4	244.9	232.0
Total stockholders equity	11.4	14.9	22.2
Total liabilities and equity	109.8	259.8	254.3

Source: Company information Note: The financial information is shown on a post-IFRS 16 basis

CASH FLOWS

	For the year ended Dec-31
ILS million	2018A	2019A	2020A
Cash flows from current activities
Net profit (loss)	(15.1)	(20.6)	3.0
Adjustments required to present cash flows from current activities	(3.7)	(3.6)	40.7
Cash, net, deriving from (used in) current activities	(18.8)	(24.2)	43.6
Cash flows from investment activities
Purchase of fixed assets	(0.7)	(0.5)	(0.9)
Purchase of intangible assets	(1.9)	(4.1)	(5.1)
Withdrawal from (deposit to) deposit	(2.2)	2.2	(4.5)
Cash, net, used for investment activities	(4.9)	(2.4)	(10.5)
Cash flows from financing activities
Receipt of shareholder loans	5.5	-	10.0
Receipt of long-term loans from banking corporations	20.0	30.0	4.0
Repayment of long-term loans from banking corporations	-	(1.7)	(5.2)
Repayment of a liability for lease	-	(0.5)	(0.9)
Cash, net, deriving from financing activities	25.5	27.8	7.9
Increase in cash and cash equivalents	1.8	1.2	41.1
Cash and cash equivalents balance at end of year	2.3	3.5	44.6

STRONG BRAND EQUITY DRIVING CUSTOMER RETENTION RATES

Customer cohorts by first interim period of purchase

	Returning:	H1 2018	H2 2018	H1 2019	H2 2019	H1 2020	H2 2020	' ''
	First order:	H1 2018	H2 2018	H1 2019	H2 2019	H1 2020	H2 2020
									665
									198
							359		97
					279		120		113
					87		49		86
	121		146 49		43 46		62		51
47 30	56 30		21 44		60 43		40 51		72 48
17 H1 2018	35 H2 2018		32 H1 2019		H2 2019		37 H1 2020		H2 2020