Castro Model Ltd. — Investor Presentation 2021

Aug 16, 2021

CASTRO-HOODIES GROUP

Q2 2021

DISCLAIMER

This Presentation contains forward-looking statements, which are based on current expectations, projections and assumptions about future events and may differ materially from actual results. Statements contained in the Presentation, other than statements of historical fact, regarding future events or prospects, are forward-looking statements, including, without limitation, statements regarding the Company's future financial or business performance, the industry, plans, prospects, trends or strategies, objectives of management, competition and other financial and business matters. Statements that the Company makes in this Presentation that are not statements of historical fact also may be forward-looking statements. The forward-looking statements contained in this presentation are based on expectations and assumptions that the Company has made in light of its industry experience and perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances.

There may be events in the future that the Company is not accurately able to predict, or over which the Company has no control. The Company believes that these factors include, but are not limited to: changes in the overall economy; the duration and severity of the COVID-19 (Corona virus) pandemic and its impact on the Company and on the local and global economy and the Company's ability to manage and develop its business. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove to be incorrect, the Company's actual operating and financial performance may differ in material respects from the performance projected in these forward-looking statements.

Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance.

CASTRO-HOODIES GROUP

FINANCIAL RESULTS - LAST 12 MONTHS

	Q3 2020	Q4 2020	Q1 2021	Q2 2021	LTM 6/21
REVENUE	353,413	282,404	262,992	438,596	1,337,405
GROSS PROFIT	199,903	142,499	150,347	280,305	773,054
GROSS PROFIT MARGIN	56 6%	50 5%	57 2%	63 9%	57 8%
OPERATING PROFIT	67,730	25,047	25,852	82,653	201,282
OPERATING PROFIT MARGIN	19 2%	8 9%	9 8%	18 8%	15 1%
NET PROFIT	41,212	434	15,068	50,040	106,754
	Sep Lockdown	Oct-Nov Lockdown	Jan-Feb Lockdown	May – Operation Guardian of the Walls

Q2 FINANCIAL RESULTS

Sales

Net Profit (% Sales)

Gross Profit (% Sales)

0

FIRST HALF FINANCIAL RESULTS

62%

61%

OPERATING CASH FLOW

st Half

MONTHLY SALES (ILS) PER GROSS SQM (INC. PUBLIC AREAS)

APPAREL SEGMENT OPERATING PROFIT

Millions ILS (% Sales), inc. IFRS 16

53

18%

CASH OVERVIEW

	30.06.19	31.12.19	30.06.20	31.12.20	30.06.21
TOTAL CASH AND CASH EQUIVALENTS	252,766	241,703	285,536	393,019	436,836
FINANCIAL DEBT	312,285	283,600	271,867	319,387	297,045
NET CASH (DEBT)	(59,519)	(41,897)	13,669	73,626	139,791
EQUITY TO BALANCE SHEET RATIO (EXC. IFRS 16)	52%	54%	51%	52%	57%

RAPID GROWTH IN LOYALTY CLUB MEMBERSHIPS

Number of Members in CU Club

GROUP E-COM CHANNEL

GROUP E-COM CHANNEL

Source: SEMRUSH

Millions ILS

ADVANCED LOGISTIC CAPABILITIES

• In the last quarter the group has implemented a new highvelocity automatic sorting machine that can sort 30,000 items in one day – more than 10,000 orders
• Same day delivery in collaboration with
• Daily orders record at 19,458 orders – more than 5m ILS

SIGNIFICANT PRESENCE ON THE LEADING SOCIAL MEDIA PLATFORMS, COLLABORATING WITH THE LEADING INFLUENCERS IN ISRAEL

- Number of Followers -

	ילדים
327k	54k	15k	34k	85k	87k	97k	104k
614k	150k	44k	4.7M*	148k	138k	147k	199k

LIRON ROSEN 85.9K followers 11.9% engagement

YUVAL MIARA 25K followers 6.7% engagement

NASTYA LISANSKY 61K followers 1.2% engagement

MILAN HALPERN 10K followers 1.4% engagement

ADI CHOANIM 7K followers 3% engagement

ROSIE EZRA 11.6K followers 1.5% engagement

AGE DISTRIBUTION OF FOLLOWERS - CASTRO

Strength Among Generation Z and Millennials

COLLABORATIONS WITH THE LEADING GLOBAL BRANDS

RAPIDLY GROWING B2B BUSINESS

• The Group has signed a collaboration agreement with Adidas and BabyStar, which will join as partners to the Group's Love Gift Card
• The collaboration widens the Group's Gift Card offering to provide full coverage in Fashion, Lifestyle, Cosmetics, Home Design, Optics, Accessories, Sports, Toys and Babies
• The Group estimates the B2B Gift Card Market (Non-Food) at 0.5B ILS Annually

fore GIFTCARD
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LAUNCHING CASTRO HOME

LAUNCHING NATIONWIDE ON DAY 1 (AUGUST 22ND)

Cities where Castro Home will open stores this year:

• JERUSALEM
• RISHON LETSIYON
• ASHKELON
• ASHDOD
• KARMIEL
• ROSH HAAYIN
• NETIVOT
• PETAH TIKVA
• TEL AVIV
• HAIFA
• BE'ER SHEVA
• KIRYAT ATA
• SAKHNIN
• HADERA
• ROSH PINNA
• HOD HASHARON

Also available online at www.castro.com

LAUNCHING TWO SUB-BRANDS UNDER URBANICA

URBANICA'S EXPANSION

Expanding the brand's activity with two sub-brands:

• URBANICA STATION

Medium sized stores (~500sqm) focused mainly on Non-Fashion offering – competing with the small variety chains

• URBANICA LOFT

Large format stores (>2000SQM) focused on variety ("Stock") categories – competing with large variety ("Stock") chains

URBANICA'S EXPANSION

• Opening of two ~2,000 SQM stores in the Grand Mall in Petah Tikva and Melisron Mall in Rehovot
• Planning to open 3 more large format stores within 6 months
• Total area planned for the coming year: 36,570 gross SQM (inc. public areas)

URBANICA'S REVENUE PROGRESSION (2016=100%)

* 2020 was excluded due to prolonged Coronavirus lockdowns

HOODIES EXPANSION TO SPORTS-WEAR

HOODIES PRO REVENUES

CAROLINA LEMKE OPTICS CONTINUED EXPANSION

CAROLINA LEMKE OPTICS REVENUES

30% 25% 20% 40% 35% 45% H1 2016 H1 2017 H1 2018 H1 2019 H1 2021 44% 42% 41% 36% 31%

Carolina Lemke Optics Sales as % of Total Carolina Sales

Carolina Lemke Optics Revenue Progression (2016=100%)

Jan-Feb Lockdown and Operation Guardian of the Walls

* 2020 was excluded due to prolonged Coronavirus lockdowns

C A S T R O - H O O D I E S G R O U P Q2 2021

• Current Number of Optometrist Examination Rooms: 10
• EYEBOX Current Number of Locations: 10
• Planned New EYEBOX Locations in the Coming Year: 12

COMING SOON

THE ALL-NEW CASTRO TLV

THANK YOU!