Foschini Group Limited · JSE:TFG
Foschini — The Foschini Group — Merger or Acquisition (January 2015)
21 slides from Foschini's merger presentation, Jan 15, 2015
Slide 1: Phase Eight Acquisition presentation
Phase Eight Acquisition presentation 15 January 2015
Slide 2: Table of contents
Table of contents • Executive summary • Introduction ‒ TFG’s strategy: International growth ‒ Why Phase Eight? • Overview of Phase Eight ‒ Company overview ‒ Core brand values ‒ Brand positioning ‒ Overview of UK operations ‒ Footprint ‒ International POS evolution ‒ Multi-channel presence ‒ Summary
Slide 3: Executive summary
Executive summary » Introduction » Overview of Phase Eight » Transaction 3
Slide 4: Executive summary
Executive summary Acquisition of a majority stake in Phase Eight 1 Phase Eight opportunity • TFG has acquired c.85% of UK-based international women’s clothing and accessories chain, Phase Eight, from the current owners, with management owning the remaining c.15% 2 Strategic rationale • Good track re
Slide 5: Introduction
Executive summary » Introduction » Overview of Phase Eight » Transaction 5
Slide 6: TFG's strategy: International growth
Introduction TFG’s strategy: International growth TFG TFG Africa footprint Phase Eight headquarters Phase Eight jurisdictions TFG (Current) – Sept 2014 LTM TFG (after Phase Eight acquisition) No. of outlets TFG (incl. concessions) Total Phase 134 134 Eight outlets Revenue contribution 438 5% 20% 46%
Slide 7: Why Phase Eight?
Introduction Why Phase Eight? Impressive track record and consistently profitable TFG Requirement Phase Eight 1 • Sales have grown at 18.9% CAGR and EBITDA by 27.5% CAGR since FY09 Strong and • This growth reflects the rigour with which the business is continually sustained managed, and the extent t
Slide 8: Why Phase Eight? Sustainable growth opportunities
Introduction Why Phase Eight? Sustainable growth opportunities TFG Requirement Phase Eight 5 • Robust and scalable business model • Proven organic growth strategy driven by existing management team Provide good growth • Opportunity to utilise Phase Eight infrastructure to grow certain TFG opportunit
Slide 9: Why Phase Eight? Sustainable growth opportunities (continued)
Introduction Why Phase Eight? Sustainable growth opportunities (continued) TFG Requirement Phase Eight • Management constantly tests and evaluates new products and initiatives 9 • The simplicity that characterises the business model then allows for a Dynamic product quick response to the results of
Slide 10: Overview of Phase Eight
Executive summary » Introduction » Overview of Phase Eight » Transaction 10
Slide 11: Company overview
Overview of Phase Eight Company overview Business description • Phase Eight operates as a retailer of clothing, footwear, and accessories for women • The company markets and sells products through retail outlets in the United Kingdom and internationally as well as online • Phase Eight was founded in
Slide 12: Core brand values
Overview of Phase Eight Core brand values 1 Customer 2 Product 3 Experience Phase Eight’s customer base: Key selling points: What Phase Eight customers look for: • 35 – 55 year old woman • Feminine and colourful • Enticed by prospect of visit • Stylish and contemporary • High quality fabric • She fi
Slide 13: Brand positioning
Overview of Phase Eight Brand positioning Relative UK market position Source: Discussions with Phase Eight management The Phase Eight brand serves a large, underserved and affluent customer base which is fashion aware not led 13
Slide 14: Own stores (UK)
Overview of Phase Eight Own stores (UK) Highly profitable and well diversified outlet estate Sales by channel – Jan 2014 UK & Ireland stores 34% UK & Ireland concessions Scotland International (stores & concessions) 9 e-commerce • Currently 107 stores • Affluent market towns historically Northern fo
Slide 15: Concessions (UK)
Overview of Phase Eight Concessions (UK) Partner of choice for leading department stores Sales by channel – Jan 2014 UK & Ireland stores UK & Ireland concessions Scotland International (stores & concessions) 40% 24 e-commerce • Concessions now an important part of the operating model • Currently 203
Slide 16: Footprint
Overview of Phase Eight Footprint International multi-channel retailer spanning 18 countries Norway 1 0 Sweden UK & Ireland 1 6 107 203 Germany Netherlands 2 31 0 5 Switzerland Belgium 10 24 Kuwait 0 2 0 7 Bahrain 0 1 Mexico Qatar 0 1 Saudi 0 4 Arabia U.A.E. Hong Kong 0 6 0 8 1 0 Malaysia Singapore
Slide 17: International POS evolution
International POS evolution International POS evolution Key concession partners 375 76 Stores Concessions 129 299 15 64 10 114 11 54 7 FY12A FY13A FY14A FY15B FY20E Further GER BHR HKG penetration of CH KWT NDS existing Retail presence geographies as limited to the UK QAT AUS well as the and Ireland
Slide 18: Multi-channel presence
Multi-channel presence Physical iPads Website stores Seamless customer experience through high growth online channels and established physical estate Rapid online growth ‘Collect from store’ and in store iPads drive incremental sales and deliver enhanced customer service Online reach extende
Slide 19: Summary financial overview
Summary financial overview Net sales evolution (ZAR million) 3 000 CAGR: 2 573 2 500 18.9% 2 231 1 975 2 000 1 701 1 500 1 335 1 083 1 000 500 -- FY09 FY10 FY11 FY12 FY13 FY14 EBITDA evolution (ZAR million) 500 CAGR: 436 27.5% 384 400 348 329 300 219 200 129 100 -- FY09 FY10 FY11 FY12 FY13 FY14 19 N
Slide 20: Transaction
ase Eight » Transaction
Slide 21: Transaction: Summary of high-level terms
Transaction Summary of high-level terms • TFG has acquired c.85% of UK-based international women’s Ownership clothing and accessories chain, Phase Eight, from the current owners, with management owning the remaining c.15% Enterprise value • 100% Phase Eight: GBP238m (ZAR4,353m) TFG purchase price •
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