Ovs — Interim / Quarterly Report 2016

Jun 14, 2016

1Q16 FINANCIAL RESULTS

June, 2016

Disclaimer

This presentation is being furnished to you solely for your information and may not be reproduced or redistributed to any other person.

This presentation might contain certain forward-looking statements that reflect the Company's management's current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on OVS S.p.A.'s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of OVS S.p.A. to control or estimate. You are cautioned not to place undue reliance on the forwardlooking statements contained herein, which are made only as of the date of this presentation.

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OVS S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.

Any reference to past performance or trends or activities of the OVS S.p.A. shall not be taken as a representation or indication that such performance, trends or activities will continue in the future.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy OVS's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto, or constitute a recommendation regarding the securities of OVS. OVS's securities referred to in this document have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The manager in charge of preparing corporate accounting documents, Nicola Perin, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the accounting figures, books and records.

This investor presentation contains measures that were not prepared in accordance with IAS/IFRS.

1Q16 Highlights

Strong sales growth 5,4% driven by network expansion

Network expanded by 56 stores, of which 9 Full Format DOS

Further market share increase to 7.1% (+10bps vs. Jan 2015 and +60 bps vs. Apr 2015)

+5.4%

Increase in Net Sales

+9

Full format DOS

+47 other stores mainly Kids in franchising

€26.3m EBITDA, €2.8m higher than 1Q15 (+11.9%), with EBITDA margin increasing to 8.8% of sales (+50 bps) driven by higher GM%, operating leverage, and cost control

€10.7m EBT, €6m higher than 1Q15, benefitting also from the improved capital structure

+11.9%EBITDA Growth

Key Income Statement ItemsPositive performance confirmed in 1Q16

	1 Q 1 6		1 Q 1 5
K M i * t e y e r c s	€ l m n	f S % N l t o e a e s	€ l m n	f S % N l t o e a e s	G h t r o w
N S l t e a e s	2 9 9 9		2 8 4 6		5. 4 %
E B I T D A	2 6 3	8. 8 %	2 3 5	8. 3 %	1 1. 9 %
E B I T	1 4 4	4. 8 %	1 2 3	4. 3 %	1 7. 7 %
P B T	1 0 7	3. 6 %	4 7	1. 7 %	1 2 8. 2 %

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• • 1Q16 Net Sales increased by 5.4% mainly driven by expanded selling area. The period was characterized by (i) adverse weather conditions, and (ii) an unfavorable Easter timing, occurring early in the year; (iii) on the other hand, sales benefitted from one more day in the month of February.
• • EBITDA increased by 11.9% vs. 1Q15 and EBITDA margin grew by approx. 50bps to 8.8%, driven by (i) increased GM, (ii) improved operating leverage and (iii) cost control
• • PBT increased by €6.0m thanks to the positive operating results and lower financial expenses (-€3.7m), mainly as a result of the debt refinancing in March 2015

Sales and EBITDA Performance in 1Q16

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Consolidated Net Working Capital

€ l m n	3 0 A i l '1 6 p r	3 0 A i l '1 5 p r	C h a n g e
A R i b l t c c o n s e c e a e u v	9 2 3	9 8 5	( ) 3 6
I t n v e n o r y	2 9 0 3	2 9 1 1	( ) 0 8
A P b l t c c o u n s a y a e	( ) 3 2 9 5	( ) 3 4 4 6	1 8 7
N W k i C i l t t e o r n g a p a	5 6 7	4 2 4	1 4 3

• • The working capital structure remained substantially stable vs. April last year:
• – Slightly lower account receivables (-€3.6m vs ³⁰th April 2015), notwithstanding the growth experienced by the franchise network due to a continuous focus on credit management
• – Inventory substantially flat in value in spite of the store expansion thanks to improved planning/purchasing and in-season inventory management resulting also in a better ageing profile
• – Accounts payables decrease mainly due to certain capex related non-recurring payables included in 1Q15 figures (LED and logistics projects)

Capex

Net Debt and Leverage

€ l m n	3 0 A i l '1 6 p r	3 0 A i l '1 5 p r
N D b t t e e	3 1 9 3	3 4 9 0
E B I T D A L T M	1 8 2 4	1 6 1 2
L E B I T D A e v e r a g e o n	1 8 x	2 2 x

• •In the last 12 months, EBITDA leverage declined by 0.4x vs. 30 April 2015 mainly due to the strong operating cash generation
• •The interest rate of the period was 3.00% + Euribor 3m, now declined to 2.50% + Euribor 3m (since May 2016)

Consolidated Cash Flow Statement

• Seasonality must be taken into account when considering quarterly cash generation: the business is usually cash absorbing in 1Q, slightly cash generative in 2Q and then progressively more cash generative in 3Q and 4Q. This trend is mainly driven by theseasonality of sales and payments to suppliers.
• Given this seasonal pattern, the quarterly cash absorption and the change in working capital are in line with management expectations.

€ l m n	1 Q 1 6	1 Q 1 5
E B I T D A	2 6. 3	2 3. 5
C C h i N W k i i l t t a n g e n e o r n g a p a	( ) 6 4. 8	( ) 5 6. 2
C ( ) h i h l i b i l i i t t t a n g e n o e r a s s e s a e s	( ) 9. 8	( ) 1. 6
C a p e x	( ) 1 1. 1	( ) 1 0. 6
C O i h F l t p e r a n g a s o w	( ) 5 9. 4	( ) 4 4. 8
F i i l E n a n c a x p e n s e s	( ) 3. 9	( ) 6 7.
T F R ( E l ' l i i d i ) t m p o y e e s e a v n g n e m n y	( ) 0. 3	( ) 1. 3
T a x e s	0. 0	0. 0
O I P ( l. b k i i ) t c o s s e x c a n c o m m s s o n s	0. 0	( ) 3. 2
O ( ) I P d f b k f t p r o c e e s n e o a n e e s	0. 0	3 4 9. 1
O h t e r	0. 9	0. 0
N C h F l ( b f M M d i i t t t e a s o w e o r e e r v a v e s d i d ) t t a n a m o r z e c o s s	( ) 6 2. 8	2 9 2. 2

Outlook

• •Despite the unfavourable weather in May, management confirms its targets for the fiscal year 2016.
• • The network expansion plan continued during the second quarter with an additional 14 new store openings, 3 of which directly operated.
• • In May, OVS launched "Arts of Italy", a limited-edition capsule collection to promote Italian artworks, endorsed by well known brand ambassadors and an excellent media coverage.

Appendix

Consolidated Balance Sheet Statement

€ l m n	3 0 A i l '1 6 p r	3 0 A i l '1 5 p r	C h a n g e
R i b l e c e a e s v	9 2 3	9 8 5	( ) 3 6
I t n e n o r v y	2 9 0 3	2 9 1 1	( ) 0 8
P b l a y a e s	( ) 3 2 5 9	( ) 3 4 4 6	1 8 7
i i C i N O W k l t t t e p e r a n g o r n g a p a	5 6 7	4 2 4	1 4 3
O S ( ) h h N f i i l R i b l P b l t t- t e r o r e r m o n n a n c a e c e a e s a a e s v y -	( ) 8 7 5	( ) 1 6 7	( ) 6 9
N W k i C i l t t e o r n g a p a	( ) 2 1 7	( ) 2 9 2	5 7
N A t t e s s e s	1 3 5 4 2 ,	1 3 4 1 2 ,	1 3 0
f N D d T t e e e r r e a x e s	( ) 1 4 2 4	( ) 1 6 0 8	1 8 4
O S ( ) h h N f i i l R i b l P b l t t- t e r o r e r m o n n a n c a e c e a e s a a e s v y -	( ) 6 5	( ) 4 5	( ) 1 9
S O I d i P i i d h P i i t t e e r a n c e n e m n r o s o n a n e r r o s o n s v y v v	( ) 4 8 3	( ) 3 0 5	4 7
N I d C i l t t t e n e s e a p a v	1 1 3 5 2 ,	1 0 9 3 6 ,	4 1 6
E i t q u y	8 1 5 9	7 4 4 6	7 1 3
N D b t t e e	3 1 9 3	3 4 9 0	( ) 2 9 7
S T l f F d i t o a o u r c e o u n n g	1 1 3 5 2 ,	1 0 9 3 6 ,	4 1 6

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