Increase of efficiency and

profitability

5 Year Business Plan
Ljubljana, 4th January 2016

Agenda

Executive summary
Initial situation

Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation

© ADMETAM

The ALPINA story: The time is NOW
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 and
unprofitable third party production

Benchmarked OEU/ OEE/ appropriate capacities/
outsourcing of peak requirements/ flexibility

“We can do it all and better”, neglecting added value
of technical competence and bundling

Applying core competences, outsourcing non-core
business, development of technical competence centre

Organisation without leadership/ strategy/
transparency/ performance management

Strategic positioning and framework / group wide
transparency/ key performance indicators and reward

Lack of profitability/ own funding/ sustainability,
corporate value?

Competitive profitability / self sufficiency/ sustainability
Increase corporate value

Develop realistic growth strategy based upon new business model, technical competence centre Žiri
Source: ADMETAM
© ADMETAM

2

Executive summary (1/2)
• Markets for Sport and ALLDAY still with small growth partly developed by variety of product
Market

• 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 market very competitive with big players across all relevant countries

Sport

• Stronger cross country presence, downhill and trekking need distribution/ marketing development
• Product range to be carefully streamlined, brand extension needed (complementary product)
•Collection and brand development to be strengthened, consider design support

ALLDAY

• Internationalisation together with local presence at fairs and competent management
• Price calculation to reflect product development and internationalisation

• Main retail market former Yugoslavia still with high potential due to brand awareness

Retail

• Growing competitive pressure (Deichmann, CCC, Mass, Humanic) requires network development
• Appropriate retail network with clear KPIs and retail concept to be developed

Source: ADMETAM
© ADMETAM

3

Executive summary (2/2)
• Implement new footprint to increase capacity utilisation and reduce cost significantly
Footprint/
Operations

• 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
• Implement new organisation with 2nd tier management considering core competences/ centralisation

Organisation

• Establish functioning management system and appropriate transparency and control, esp. subsidiaries
• Provide leadership, focus continuously on objectives and their measurement
• Increase EBITDA to > 15% of sales by improving gross margin and reducing cost

Profit/ Loss

• Implement entire improvement programme as quickly as possible
• Focus on top-line development, raising international potential supported by efficient marketing

• Ensure Group’s cash position by fast cost reduction/ sale of assets and bridge finance as required
Balance Sheet/
Cash Flow

• 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

Source: ADMETAM
© ADMETAM

4

Agenda

Executive summary
Initial situation

Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation

© ADMETAM

ALPINA is facing two very critical issues to be resolved quickly

EBITDA € 2.6 Mil./ 2015 Act

Over indebtedness /liquidity gap






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%, increase
by net profit in future years

Operational inadequacy



Holistic
restructuring




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 future
funding of business development

Net loss € -1 Mil./ 2015 Actual
EXTERNAL ACTIONS REQUIRED

1

Debt/ Equity swap : up to 4.5 Mil Euro

2

Bridge finance of 3.8 Mil. Euro in early 2016

3

Continue restrictive capex policy

4

Customers “advanced” payments to smooth
transition in 2016
Time is of essence !!!

© ADMETAM

6

Alpina Group KPIs significantly behind its competitors
500

Nike

450

Comments

400
Ferragamo

Sales per head (t €)

350

Prada
Under Armour

300

Adidas

Buffalo

250

Aigner

TOD’s
Geox

200

Deichman
Rossignol*

150

Reno
100
Bata
50
0
20%

Alpina

30%

40%

• Direct competitors like
Deichman, Geox or Reno
achieve gross margins of
50%
• With gross margin of
48% and 39 t€ sales per
head 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

ECCO

CCC
50%

60%

70%

80%

Gross margin1) (%)
*Estimated
1) Gross margin calculation for ALPINA and peers includes material costs only
Source: Alpina Management, Annual reports 2013 & 2014; ADMETAM
© ADMETAM

7

Financial analysis provides working agenda and priorities
Sales/ Gross Margin1)%
58.1 59.1 61.0

61.6

EBITDA2)/ Net Profit

58.2

1.4 1.6 2.6
42%
38%39%

Sales (in Mil. €)
2012

2013

Gross margin (in %)
2014

2015F

32
10

7

41 42

32 26

-1.0
-6.8

-11.7
Net profit (in Mil. €)

EBITDA (in Mil. €)
2012

2013

-0.9 -0.3

-2.9

2014

2015F

2016 Plan

1.535

1.514

1.524

1.553

2012

2013

2014

2015F

1.278

0.9 5

-10
Equity (in Mil. €)

2012

2016 Plan

5.4

2013

Debt (in Mil. €)
2014

2015F

Capital structure3)

2016 Plan

2016 Plan

Headcount

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
© ADMETAM

8

Most of the overdue payables are towards Chinese suppliers
Trade payables overview1
Legend

In T EUR / % total

% of total trade payables
Alpina d.o.o. payables
Alpina China payables

3,781
511

27%

45%

2,252
11%

1,605




10%
7%

900

876

646

521
380

387
489

Undue

0-30 days

31-60 days

3,270

545
429
61-90 days

Over 90 days

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

1) Alpina d.o.o. data on 22 Dec 2015 and Alpina China data on 30 Nov 2015;
2015 displayed age structure for China does not include arrangements for installment repayment.
Source: Alpina financial data, ADMETAM
© ADMETAM

9

Profile of business units underlines complexity and needs
SPORT

ALLDAY

RETAIL
3%

14%
25%
Sales 2014
Alpina d.o.o. only

31%

6%
5%

18%

7%

K-Mail Order GMBH&CO
Resam AG
LLC Tervolina
Bruno Bader GMBH
Overseas Power Industries
Others

7%
Wenaas
Intersport
Backcountry
Sales
contribution*
International
penetration
Market
share
Competitive
environment
Customer
portfolio
Product
basis
Delivery
cycle
Future investor’s
considerations

Rossignol
Sportmaster
Others

9%
30%

11%

9%

57%

6%

10%

21%
25%

Trekking
Woman low shoes
Woman high shoes

Trade goods
Other fashion
Other sport

45%

32%

23%

XC all relevant markets via dis-tributors,
DH/ Trekking “Balkan”

Europe,/core Eastern E., Italy/ France?,
Russia now problematic

Ex Yugoslavia only,
Slovenia biggest market/ store nu.

XC/ >20%, DH/ TR relevant market share
“Balkan” only

No relevant market share in Europe/
more relevant in ex Yug.

Relevant in ex Yugoslavia only,
continuously shrinking / concept?

Big brands competing worldwide, lack of
Alpina marketing

Growing competition by footwear
specialists / with complementary products

Growing competition by footwear special./
clothing brands/ Verticals

Broad with “islands”,
no direct retail contact

Europe unbalanced (>EE) , lost clients,
~20% of Germ. top retailers

Women, ex-Yugoslavia,
classic/ comfort

Ski XC/ downhill, trekking, no
complementary product (packages)

Women/ casual + business, wide lasts,
shoes only, >80% carry over product

All product available in Alpina, other
brands, bags, Men limited/ no children

Season collections, some innovations,
re-order possible

2 collections p.a., re-order possible

Individual brand and business

Individual/ less attractive collection, some
relation to retail

2 collections p.a., older season
inventories, ongoing discount
Stores mainly attractive as locations,
not yet as “retail business”

Sources: Alpina, ADMETAM, * Sales 2014, XC = Cross country/ DH = downhill, TR = trekking
© ADMETAM

10

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)

Slovenia

Croatia

BiH

Serbia
47%

Alpina

Trade goods

40%

33%

39%

36%

35%

40%
36%

28% 27%
21%

2014

22%

2015

36%
32%

23%
20%

2014

2014

2015

48%

45%

54%

ALPINA

DEICHMANN

CCC

2015

45%

2014

2015

56%

Alpina includes
manufacturer + retail
margin

WORTMANN

ARA

Benchmark Gross Margin % of sales (2013/14)2)
1) Data for period Jan/Mar 2014 and 2015 2) Source: Individual reports
Sources: Alpina data, Retail data Alpina, ADMETAM
© ADMETAM

11

Production is not allocated considering cost efficiency
Calculated salary costs
per working hour

Production in pairs
by facility (2014)
Facility

Zhongshan

1.89

Siro

Ziri
Bromy
Fogs
Siro
Zhongshan

2.45

Fogs

2.73

Finished
products
(in pairs)

in % of total
495,330
344,256
317,470
6,340
463,687

30%
21%
20%
0%
28%

∑ 1,627,083

Bromy

2.78

Ziri

7.70
0

2

4

6

8

Increase of hourly rates in Zhonghan due
to negative currency ratio EUR/RMB

10

Half finished
Facility
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%
∑ 1,767,740
Production facility reduction should consider a
disposal of capacities based on optimal utilisation
and lower labour cost

Source: Alpina Management; ADMETAM;
© ADMETAM

12

US $ impact not at all considered: +25% vs. € 05/14 – 11/15

Cost advantage China is
eroded

Source: ECB; ADMETAM
© ADMETAM

13

Capacity utilisation in all plants inappropriate and costly
Production facilities

Žiri

Bromy

Fogs

Zhongshan

Cemented
1 line

Cemented
2 lines

Cemented
2 lines

Cemented
2 lines

in k pairs

Dir. Inj
1 line.

Max. capacity1)
in 2014

429

326

317

111

522

749

922

Produced
capacities in
2014

235

143

118

6

344

317

464

Production shifts

2

1

1

1

1-2

1

1

Capacity
utilization

54.8%

43.8%

37.1%

5.7%

65.9%

42.4%

50.3%


Cem. Downhill
1 line
1 line

Siro

2)

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

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
Source: Alpina Management; ADMETAM
© ADMETAM

14

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

Transport to Ziri 1-2 days
Transport in China
1 day
Terminal handling in China
3 days
Sea freight to Europe
28 days
Terminal handling in Europe 3 days
Transport to Ziri
2 days

Total lead time
37 days!

The future footprint will reduce the time to market by 5 weeks

Source: ADMETAM; Interview Alpina
© ADMETAM

15

Dramatic decrease of investment in production equipment
Purchasing in Mil. EUR

Tangible assets Book Value in Mil.EUR

3

3

Ageing infrastructure
2
2.55

2

2.17

1

0.86

1

0.75

No
data

0
FOGS BiH BROMY
BiH

Kitajska
CHN

Ziri SLO

Siro Ro

Alpina had invested continuously and with increasing proportion in the production
equipment since 1960. Beginning of 2000 the investment activity has declined rapidly.
Sources: Alpina financial data, ADMETAM
© ADMETAM

16

Business strategies to be determined on target positioning
Success factors

Potential direction


Price/
value perceived
Manufactory/
Selected
(Niche)

Brand
business
(Image)



Cross C

Brand
strength

Down H
Trekking

Industrial
supplier
(Cost leader)
sourced

Iris

3rdparty
production?

own

Vertical
retailer
(Volume)

Manufactory/
Handcraft (Nishe)
Technical competence

Individuality/ product
quality/ limited product

offer


Regional awareness

Flexibility in production

Direct customer relation/

service orientation
ALPINA?

• Process excellence/
process innovation
• Factory selection
• Logistics/
infrastructure
• Cost management
• Sourcing
Industrial supplier
(Cost leader)

Brand business
(Image)
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
Vertical vendor
(Volume)

Clear and market oriented positioning essential to determine strategic directions
Source: ADMETAM
© ADMETAM

17

Transparency and control over subsidiaries is required
ALPINA Alpina
Group
Žiri
P&L and
BS

SA/A

M

Sales
Volume

M

D

Production
volume
Controlling
report

AProd

M

Alpina Alpina
Bromy
BH

M

M

Alpina
FOGS

Alpina
CRO

Alpina
SRB

Alpina
CH

Alpina
SIRO

Alpina
Sport
Corp.

Alpina
UA

M

M

M

M

M

M

M

D

D

M

M

M

M

M

M

A

A

D

M

M

A

A

M

Q

Budget/
Forecast

A

A

A

A

• Management is focused on volume of production and sales which is followed on daily basis. However, there are limited or
no KPIs to set up standards neither in production nor in sales (e.g. “In store” performance indicators or OEE production
efficiency, etc)
• Controlling function is established for retail subsidiaries and Alpina d.o.o. but no formal controlling activities are being
performed 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 without
real importance
Sources: Alpina Finance, ADMETAM
© ADMETAM

18

Agenda

Executive summary
Initial situation

Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation

© ADMETAM

Strategic restructuring/ re-alignment based on holistic approach
Years of crisis and losses

Aim



Create sustainable vision
Define credible roadmap
Exit compulsory settlement
Prepare for future investor(s)

vision
objectives
values

Strategy



• Design of blueprint: started
• Comprehensive restructuring
plan: ready

strategy/
positioning
markets/ competitiontechnology/
customers
applications

Assure liquidity for supply & investment
Secure customer & supplier base
Create new business & future sales
Align core competences

• Corporate presentation finalised
• Brand positioning active
• Sales recovery activities: started
• Internationalisation started

Operations




business model/ value chain

Consolidate/ close plants
Reduce functional costs
Improve purchasing
Increase overall productivity
Optimise core processes

processes

plant network

Management



Implement new organisation
Upgrade managerial skills
Improve measurement/ reporting
Enforce stronger leadership

HR

infrastructure

development/
mbo

resources,
systems …

• Plant configuration: finalised
• Cost & productivity initiatives:
started
• Group wide reorganisation
running

• New Management Board:
CEO & CFO
finance/
organisation
• New communication
controlling
structure established
roles/
responsibility/ profit/ cash flow/ • New calculation model
financing
running
leadership

New ALPINA with sustainable
financials & business model
Source: ADMETAM
© ADMETAM

20

Ensure strategic fit positioning & product/ market development
Customer/ Markets

Brand/ Products

Customer
segmentation

Evening

Price
Day/ Business

Style

• Future
Customers
positioning
segmentation
• clarified?
Understand expectations
• Appropriate
and providecompetence
appropriate
set?
competence set for target
• Business
groups model
• adequate?
Prioritise market
• Objectives
development
clear?
and invest 

L

Price
High Masstige
Medium Mass
Low Discount

Own
retail (all
formats)

Multibrand
L

Own
retail
(store)

Strategic objectives

ALPINA strategic frame

Product

Couture/ Events

H

Strategic importance

Function

Sport/ Wellness

Strategic framework
Vision

Brand

Casual/ City

Distribution

Franchising

Sales potential

Key strategic projects
5-year plan (assumptions)
2015 - 2020

H

Functional
requirements

••Define
Understanding
market potential
of market
and
requirements
potential requirements?
••Set
Clear
clear
priorities
priorities
regarding
regarding
growth
growth potential
potential?
••Define
Competitive
brand position?
and product
•portfolio
How is market
• Support
development
development
supported?

Strategies

Budgets/ Forecasts

Annual activity plan

••Categories
Provide appropriate
reflect distripositioning?
bution structure/ coverage
••Contribution
Clarify and develop
margin role of
secured?
own retail
••Order
Develop
process
key clients/
own retail?
key
• Product
accounting
marketing
•adequate?
Provide sales standards

• Provide
Revenues
strategic
growthframework
as prerequisite
for
realignment
for sustainable
• Make
development
vision and objectives
measurable
• Key strategic projects
• Develop 5 year plan and
translate into action/ budget

Source: ADMETAM
© ADMETAM

21

Key drivers of ALPINA strategic development already defined
Key drivers of strategic development

© ADMETAM

Functional Design

Ensure “modernity and function” by on-going design collaborations

Product

Shoes and bags as platform, extend to new categories if appropriate

Customers

Customer centric organisation and business development

Distribution

Internationalise via new doors and co-operations, new technology

Marketing

Integrated multi-channel brand marketing, specific product marketing

Operations

European footprint/ technical knowledge, integrated/ efficient processes

22

New organisation market-/result driven - establish profit centres
Role model for market orientation

Customers/ Consumers
Retailers
Sport

Sales
channels

Profit
centres

Distributors

Retailers A

Profit centre
Sport

Own shops

Outlets

E-commerce

Profit centre
Retail

Profit centre
ALLDAY

Demand/ feedback

Products

Product Development
Sport

Cost
centres

Full responsibility for
• Product development
• Turnover/ sales
• Gross profit/ margin
• Cost of company/
division

Services

Product Development
ALLDAY
Operations

Marketing

Full responsibility for
• Product quality
• On-time-delivery
• Product cost etc.)
• Overhead cost

Corporate services (Finance, Controlling, HR etc.)

Sources: ADMETAM
© ADMETAM

23

Organisational structure to reflect ALPINA core processes
Process Owner
Technical
Prototyping/
Director
Sa.Collection

Product
Development

Style

Material
Research

Product
Development

Pattern
Maker

Supply Chain/
Operations

Industrialisation

Purchasing

Production
Management

Quality
Management

Logistics

Technical
Director

Network
Development

Customer
Service

Order
Processing

Sales
Controlling

Commercial
Director

Retail Strategy/
Planning

Buying

Merchandising

Operation

Store
Controlling

Retail
Director

PR/ Brand
Management

Brand
Management

Advertising

Promotion

Fairs

Public
Relations

CEO

(Licence
Management)

Licence
Planning

Concept
Development

Licence
Agreement

Licence
Management

Licence
Controlling

Commercial
Director

Sport/ ALLDAY Sales strategy/
Sales Channels
Planning

Retail
Sales Channel

Support
Processes

CFO

Higher effectiveness through clear responsibility and process ownership
Source: ADMETAM
© ADMETAM

24

New organisation with 2nd-tier management as discussed
Management Board
Quality

Supply Chain/
Operations
TBD

B. Vtič Vraničar

Iztok Malačič

CEO

CFO

Commercial
TBD

Product
development

Sport

ALLDAY

Retail

Corporate
Services

Mitja Bežan

Iztok Malačič

Operations/
CRM/ Stores

Marketing/
Communic./PR

Subsidiaries
Iztok Malačič

Strategy/
Controlling

USA

Sourcing

Product
development

Product
development

Buying

Accounting/
Tax/ Consolid.

B&H BROMY

Prod. Planning

Sales Mgmt./
Cust. Service

Area Managers

Visual/
E-Commerce

Finance/
Risk M.

B&H, FOGS

Production
SI/ B&H

Product
marketing

Product
Marketing

Regional
Mngmt.SI/B&H

IT

Logistics

Alpina USA
Sport

Customer
Service

Stores

HR/
Legal

Regional
Mngmt.CR/ SRB

Stores
Source: ADMETAM
© ADMETAM

25

Agenda

Executive summary
Initial situation

Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation

© ADMETAM

Approach: re-alignment of Alpina Group mainly in two phases
Q IV
Efficiency programme 2015
1

Product portfolio/
collection development

2

Market orient. pricing/
margin improvement

3

Sales/ wholesale/
marketing/ services

4 Retail improvement

By 2017

2016

Phase II: “Value Creation”

Phase I: “Sustainability”
Overlapping
phases
Targets/ results:

Targets/ results:

Restructure retail network

Sport development (package)

Sell outdated stocks

Offer „total look” in fashion segment

Quick wins in productions

Strong position of brand

Restructure production network to
capacity requirement (make or buy)
Stable capital structure

5

Supply chain/ footprint/
productivity/ logistics

Top line growth/ customer base

6

Sourcing/ organisation/
ITT1)

Market penetration

7

Strategy/ structure/
reorganisation

Reduce overhead cost/ generate
cash

Minimum 15% EBITDA

Increasing corporate value
8

Overhead cost

9

Working capital
reduction

Improve gross margins

Enterprise value
through growth of sales/ margin
Restructure operation holistically

Strengthen existing business
1) ITT = Invitation To Tender
Sources: Alpina Management; ADMETAM
© ADMETAM

27

Comprehensive improvement program in implementation
Module

Measures

EBITDA effect
FYE
T EUR

Achieved
in


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

140+250

2017

Increase manufacturer margin in calculation process (especially ALLDAY) due
to better collection etc. by 2-3%, starting with AW 16 collection

500

2017

3 Sales/ wholesale/
marketing/ services


New clients/ distributors expected in Japan, China/ SEA
Build up clients in USA and hand over to new sales person in Alpina USA

200

2017

4 Retail improvement


Improve store portfolio by closure of unprofitable units
Improved sell through increased traffic and conversion rate, improvement of opento-buy process, implementation of merchandising concept; start with SS16

6651)+200

2017


Closing down/ optimizing own existing production network
Decrease logistics costs through invitation to tender for local logistics in Žiri
and other locations

2,200+250

2017


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

645+270

2017

Decrease general overhead headcount considering future needs of group as
well as core competences

1,000

2017

Reduction of overheads through detailed plan as presented with all measures Total
quantified

300

2017

Old stock of about 400,000 pair of shoes quantified, cooperation with MF
Fashion and other wholesalers in progress
New footprint will shorten cycle time for Sports and reduce inventory

200+40 2)

2016/17

1 Product portfolio/
collection development
2

Market orient. pricing/
margin improvement

5 Supply chain/ footprint/
productivity/ logistics
6

Sourcing/ organisation/
ITT

7

Strategy/ structure/
reorganisation

8

Overhead costs

9

Working capital
reduction2)

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
Sources: Alpina Management and Finance; ADMETAM
© ADMETAM

6,620
28

ALPINA to increase sales and marketing – re-focus internationally
SPORT
1.
2.

Ensure current growth in existing network,
focus on all product segments (esp. trekking)
Develop market oriented sales organisation
rather than product focus only

Target 2020:
Top distributors in all
relevant markets
Segmentation of
key customers
(accounts)
and general customer
base

3. Start development of new distributors in key
markets in 2016
4. Expand to underdeveloped markets

© ADMETAM

ALLDAY
A.
B.

Focus on European development incl. ex-clients
and new, build directly operating organisation
Develop American market via local Area Manager
using existing US subsidiary

Target 2020:
Minimum 125 doors
wholesale

Share outside Europe
>20%
Own stores in some
locations to support
wholesale

C. Develop Asian market by sales agents and
relationships to relevant organisations
D. Middle East with special product (i.e. sandals)

29

ALPINA product development/ sales and marketing more focused
ALLDAY AW16 Collection Plan by product groups

Marketing Calendar




More focused and more merchandised
collection
Taking into consideration ALPINA Retail needs
Growth with Beyond Core category for brand
awareness and gaining new customers
Increase in average production order through
a smaller collection
Styles reduced by > 20%

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

send PR results Alpina racing team to
customers
send PR material and images to
customers

PR/EVENTS

MATERIAL/CONCEPTS

24.-27.1. ISPO, Munich, collection
16/17

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 ACTIVITIES

prepare new banners trekking 16 for
web site
news and results alpina racing team

SOCIAL MEDIA

news and results alpina racing team

ADVERTISING
February 2016

Source: Alpina ALLDAY department and ADMETAM
© ADMETAM

30

Brand stretch − ALPINA Sports and ALLDAY to be intensified
Brand stretch – ALPINA Sports

Brand stretch – ALPINA ALLDAY

?

Eyewear

Sunglasses

?

?

Thermal clothing:
Helmets
- Underwear
1)
- Socks
Headwear
- Caps
Cross
- Gloves
Gloves
Trekking
Country
Shoes
Socks

Goggles

Snow
boards

Drink
belts

Sport
Shoes &
Boots

Hiking
Shoes

Shoe
care

-

Ski cases

Downhill

Skis

Snow
boarding

Bindings

Hunting
Military
Work &
safety

Tops
and
bottoms2)

Backpacks

Hats

Hosiery

Bags

Men’s

Shoes &
Boots

Body
care
products

Women’s

Belts

Scarfs

Poles

Overboots

Watches

Small leather goods

Socks

Grips
Boot
bags

Clothing

Inlay
soles
Travel
luggage

Children’s
Foulards

Shoe care

Body
care
products

Watches
Watches

Building complementary product groups will enable sales channels and market penetration/ competitive strength


?
1)

Already part of ALPINA portfolio
Realisation not certain (trademark issues)

Incl. caps, bands, hats and facemasks

© ADMETAM

2) Both thermal and non-thermal clothing

31

Consistent price calculation considering retail price positioning
Different manufacture
mark-ups with target
manufacture mark-up
of >30%1)

x 2.5-2.84)

10%3)
Manufacture
margin

COGS

Landed
costs2)

EXW
price

Wholesaler/
Distributor
Margin
(if existing)

Current manufacture margin Alpina Žiri
18%

20%
15%

9%

10%

12% 13% 12% 12%
8%

Retail
price

• Expected retail marks can vary from 2.5 to 2.8 times
local wholesale price4)
• Normal wholesale price determination process:
backwards based on achievable retail price in a
specific country

5%

5%

Retail
margin

Remarks

18%

14%

Local
wholesale
price

69382

69312

69311

67521

67491

62981

62311

6901Z

69A02

69A01

0%

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
© ADMETAM

32

Re-organization of ALPINA retail business with clear focus

Targets/ Results

Internal support
network

• Review/ optimise portfolio/ eliminate
loss making units
Customer
service

Visual
management

• Clear goals to be shared, set of KPI’s
continuously measured and monitored

Re-organization
Program
Development
of personnel

• Motivated staff

Management
tools (KPI’s)
Clear buying
process

• Retail Headquarter more focused on
the business side, store support

• Strengthened portfolio
• Higher Sales and lower buying

• Improvement of sell thru
• Improved margins/ profitability
• Sustainability/ ability to invest

© ADMETAM

33

Retail network to be optimised from 104 to 76 stores
1

2

Existing retail network and organisation consisting of four markets and four retail directors
Retail directors

SLO

CRO

BIH1)

SRB2)

Stores

44

32

14

9

Outlet

3

1

1

0

E-shop

Yes

Yes

Planned

/

Future retail network and organisation includes merger of SLO and BIH, CRO and SRB

Retail directors

SLO

BIH

CRO

SRB3)

Stores

35

12

26

(1)

Outlet

1

0

1

1

E-shop

Yes

Planned

Yes

/

Appoint key store managers to raise performance levels & KPI’s retail

1) Position of BIH Retail director to be merged with the position of SLO Retail director
3) Retail Serbia envisaged to be sold
Source: Alpina; ADMETAM
© ADMETAM

2) Position of SRB Retail director to be merged with the position of CRO Retail director

34

Retail processes with a clear systematic approach
Retail main process flow
Strategy/
Planning

New Store
Projects

Visual
Merchandising

Buying

Operations

Selling

Marketing

Controlling

Detail of each process

© ADMETAM

Retail
Strategy

Location
Analysis

Store
Concept

Sales
Data
Analysis

Staff
Assessme
nt

Sales
Develop.

Marketing
Plan

Budgeting

Network
Development

Strategic
Fit

Merchand.
Concept

Collection
Review

CRM
(Input)

Staff
Training

Promotion
/ Events

New
Projects

Store/ Pdt.
Portfolio

Business
Plan

Concept
Displays

Open to
Buy

Store Staff
Planning

Customer
s
Tracking

CRM

Store
Evaluation

5 Year
Plan

Negotiatio
n

Windows
Displays

Delivery
Plan

Store
Adm. /
Mainten.

Reporting
Sales
Data

Local PR/
Advertisin
g

Reporting

Retail
Standards

Design
Concept

Fair Preparation

Assortment Plan

Re-order/
Replenish.

Target
Control

Worldwide
Steering

KPIs
Mngt.

Business
Plan

Project
Mngt.

Feedback
to Design

35

Alpina’s future production footprint consolidates into Sport & ALLDAY
Alpina d.o.o,
Žiri, Slovenia
Sport: assembly,
Prototyping: Sport
& ALLDAY

Alpina FOGS d.d.,
Sarajevo, BiH
Sport: Preparation,
assembly

New potential production footprint
Technical
competence
centre Žiri

Alpina Bromy d.o.o,
Tesanj, BiH

Production facilities for Sports
(Fogs) and ALLDAY (Bromy) with
high efficiency

Maintain final assembly of Sports in
Žiri and ensure retention of
technological knowledge and
expertise in that product group

Shift ALLDAY production to Bromy
in order to clearly separate divisions

ALLDAY: preparation,
assembly
1)
Sports: assembly
+
dir. injection
1) Assembling of dir. Injected Trekking shoes in Bromy until complete split of Alpina to Sport & Fashion divisions in the M&A process
Source: ADMETAM; Interview Alpina
© ADMETAM

36

Comparison production capacities & sales plan, still “enough room”
Future Footprint Sport (3 Y Plan)

Žiri

Future Footprint Fashion (3 Y Plan)
Fogs

Bromy

800.000

800.000

800.000

600.000

600.000

600.000

400.000

400.000

400.000

200.000

200.000

200.000

0

0

0

Direct injection

Cemented
DH

Cemented

Max. capacity fut. Footprint cemented

Cemented

Max. capacity fut. Footprint DH

Max. capacity fut. Footprint cemented

Max. capacity fut. Footprint
cemented
Max. capacity fut. Footprint dir.
Injected

• 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?)

Source: Alpina Management; ADMETAM
© ADMETAM

37

Timeline-footprint reorganisation – to be started immediately
2016
Q1.

Q2.

2017

Q3.

Q4..

Q1.

Q2.

Q3.

2018
Q4.

Q1.

Q2.

Q3.

Footprint reorganisation
Action steps:

Žiri

Sport
China

2

1 Shift high end TR to Žiri
and move HFG to Fogs
Closing of Siro
2 Shift TR+XC S to Fogs

X
4

Fogs

2

X

3 Shift TR (dir. Inj.) to
Bromy
4 Shift XC S to Fogs
ALLDAY

1st
Bromy

Siro

31st

April 2016

Dec 2016
1 3
100% Fashion Direct Injection

1

X

1 Shift ALLDAY (dir. Inj.)
to Bromy
2 Shift ALLDAY to Bromy

Phase 1
Phase 2

Phase 3
Phase 4

Source: Alpina Management; ADMETAM
© ADMETAM

38

Key procurement levers at ALPINA to be prioritised and implemented

Operational procurement optimisation

Further conceptual developments
Implementation of supplier pool/
integrated supplier management

Consolidation of raw materials/ tools
Invitation to tender/ negotiations of bundled
material groups
Annual

Reorganisation of procurement (Groupwide co-ordination, processes, …)

purchases1):

• Leather2) (€ 4.5 Mio)
• Soles (€ 3.1 Mio)

Procurement systems (Material groups-/
supplier/ risk-control)

• Synthetic material (€ 1.9 Mio)
• Accessories (€ 1.7 Mio)
• Packaging (€ 0.7 Mio)

Improvement of procurement methods/
tools (Invitation to tender/ synchronisation/…)

Possible cost reductions exceedeing € 0.5 Mio

Supplier
selection

Material group
strategy

Supplierstrategy

Supplierevaluation

HauptLieferanten

SegmentLieferanten

AbbauLieferanten

AufbauLieferant
en

TestLieferanten

1) Based on centralised purchases in Žiri in 2014 2) Including base leathers for both ALLDAY and Sport
© ADMETAM

39

Turnaround dependent on implementation of target-organisation
Develop blue print organisation

Corebusiness
Division
Function

...
...

Non corebusiness
Division
Function

Division 1

Elimination

n

...

• Assess necessity of corporate
functions

1

III

IV

2

...
n

...

2015

2016

2017

• What processes/ interfaces are to be
restructured

• Capacity of fully operating unit
(quantitative/ qualitative)

• Depth and width of organisation to be
defined

• Benchmark individual processes

• Clarify requirement for
outsourcing/ relocation

• Which prerequisites need to be
considered – cost structure/ location/
social plan

• Determine level of integration/
define synergies

• Establish group-wide responsibilities
and communication

© ADMETAM

II

n

n

• Define processes/ divisions
which are core business/
competences

I

n

...

...
...

FTE

Division 2

n

Optimisation

Determine capacities and
timeframe

Refine organisational structure

• Which tasks will be eliminated by
when
• Which milestones/ deadlines are to
be considered
• Manage communication

40

Re-alignment fundamental for securing profit & value creation

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
© ADMETAM

41

Agenda

Executive summary
Initial situation

Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation

© ADMETAM

Achieve profitability and re-alignment to build sustainable future
Start-up

Expansion Maturity Saturation

Degene- ………Turnaround/
Expansion
ration

Restructuring
necessary

Profit
Growth

… or …

Key questions:
• How to financially support restructuring?
• When is right time to sell (2nd half 2016)?

Insolvency

Reduce cost structure –
release capital
2016

Build organisational strength
and sustainability
2016 - 2017

Stabilising existing client network and
turnover
Monitor cash flow/ reduce
capital in stock/ assets
Immediate actions/ quick wins
(capex stop, termination of contracts,
stop marketing)

Extend implementation restructuring
programme, streamline supply chain/ raise
purchasing potential, release capital (stock)
Provide final strategic direction/ agree
business strategy/ 5 y plan/ ensure p.b.t.
Develop new business structure/ organisation, market orientation/ business model

Agree and implement restructuring
programme

Establish core competences and market
oriented product development

Re-organisation and comprehensive
cost reduction

Improve existing distribution prepare new;
improve retail action and transparency,
start sales/ marketing initiatives

Results

Stop loss and
cash burn

Operationally
achieved

Overlapping

Implement strategy −
create value
2017 +

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/ improvement
equity ratio, transparency & control

Results

Results

Effective structure
Positive EBT

Growth
ROCE

Source: ADMETAM
© ADMETAM

43

Plan assumptions include current situation/realistic growth scenario
Plan assumptions
Sales



Product/
Channel mix

Gross Margin

Cost/

Infrastructure

Capex/ Funding
















© ADMETAM

SPORT: Closer cooperation with existing and/or new distributors to regain lost market shares in the
markets 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.); close
loss making Serbian subsidiary in 2016 and outlet in CRO in 2018, open an outlet near Belgrade in 2017
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
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 in
Slovenia through better pricing and portfolio extension
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

From 2017 onwards € 1 Mio. capex p.a. into development DH/XC/TR, € 2 Mio. capex for equipment groupwide 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
44

Realistic sales increase to achieve sustainable profitability
Development by divisions
Key Measures
30

21

23

18
10

ALLDAY

Sport
2015

In Mil. €

2015

ALLDAY

10

18

Sport

28

30

Retail

21

23

TOTAL1)

59

71

Key Measures

In Mil. €

2015

• Concentrate on existing
geographic areas with Sport
• Improve current client basis
both in Sport and ALLDAY
• Development of US and
China/ Asia using
partnerships (ALLDAY)
• Grow in own retail using
existing, optimised structure

Eastern Europe
Northern Europe
Western Europe
Southern Europe
America
China
Asia
Other

3
8
11
25
10
0
0
2

5
10
12
25
12
2
1
4

TOTAL1)

59

71

• Consolidation of existing retail
network
• Opening of outlet in SRB in
2017, 1 store in 2018 and 1 in
2019 and 1 in 2020
• Focus on existing Sport
customer base
• Growth with XC and DH
(external
customers) and TR (own
retail)
• One quarter of ALLDAY
growth through new
customers and new markets

28

Retail
2020

2020

Development by regions
25 25

8

12
10 11

12
10

3 5
0,1

2015
1) Without revenues for services
© ADMETAM

2

0,3 1

2

4

2020

2020

Sources: ALPINA ALLDAY, Sport and Retail Sales, Controlling; ADMETAM

45

Measurable results of the operational restructuring programme
Key Assumptions – cost initiatives
Initiative
Product portfolio/
collection development

COGS

Main levers


Market oriented pricing

COGS

Sales/ wholesale/
marketing/ services

COGS

Retail structure/
improvement

OPEX;
COGS


Supply Chain/
footprint/ productivity/
logistics

COGS

Sourcing/
organisation/ ITT

COGS

Strategy/ structure/
organisation

OPEX

Overhead cost/
controlling/ cash

OPEX

Working capital

1)

Total EBITDA effect
1)

P&L category



Cost of reorganisation:
Total: € 6.3 Mil
Cash relevant: € 3.5 Mil. 3)

2016
T€

2017
T€

2018
T€

2019
T€

2020
T€

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

New calculation system starting with AW16, resulting with
increased margin of wholesale prices, esp. with ALLDAY

250

500

500

500

500

New clients in US and Asia starting with AW16, resulting in
additional sales and margin impact

100

200

200

200

200

85
100
100
100
100
Improve store portfolio through closure of unprofitable stores
2) (640) 2) (640) 2) (640) 2) (640) 2)
(625)
Improve sell through by increased traffic and conversion rate,
improve open-to-buy process, set up a merchandising concept
100
200
200
200
200

Closure of plants in China and Romania to consolidate and
reduce unused capacities and related costs
New logistics centre in BIH

550

2,200 2,200 2,200 2,200

100

250

250

250

250

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

Reorganisation of indirect functions, focus on Žiri (prototyping,
logistics)

500

Based on detailed overheads reduction programme by cost
type; strongly related to reorganisation

150

300

300

300

300

Sale of old stock; reduction of cycle time with new footprint

100

240

240

240

240

1,000 1,000 1,000 1,000

2,190 6,055 6,155 6,345 6,625

No effect on EBITDA 2) Total annual EBITDA effect (665 T €) incl. effect from closures in 2015 (40 T €), closures in 2016 included in original budget (525 T €) and closure of
Serbia (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

© ADMETAM

46

Turnaround – programme focuses especially on cost reduction
Alpina group P&L (in Mil. €)

Total operating income
Net sales
COGS
Gross margin
GM%
OPEX
Operating EBITDA
Extraordinary/ Restructuring items
EBITDA
EBITDA margin
Depreciation
EBIT
Net financial result
Other result
EBT
Tax
Net profit 1)
Impact of improvements 2)

1) Incl. minority interest for the period 2017-2020
Source: Alpina; ADMETAM
© ADMETAM

2015
Forecast
62.1
61.6
-38.3
23.8
39%
-21.3
2.6
-0.1
2.5
4%
-1.7
0.8
-1.6
0.0
-0.8
0.0
-0.8
-0.1

101%
100%
-62%
39%
-35%
4%
0%
4%
-3%
1%
-3%
0%
-1%
0%
-1%

2016
Plan
58.2
100%
58.2
100%
-33.8
-58%
24.4
42%
42%
-19.0
-33%
5.4
9%
-1.8
-3%
3.6
6%
6%
-1.7
-3%
1.9
3%
-1.8
-3%
0.0
0%
0.1
0%
-0.1
0%
-0.3
-1%
-1.8

2017
Plan
60.2
60.2
-32.3
27.9
46%
-17.8
10.1
-2.1
8.0
13%
-1.7
6.3
-1.3
0.0
5.0
-0.9
4.2
3.9

100%
100%
-54%
46%
-30%
17%
-3%
13%
-3%
10%
-2%
0%
8%
-1%
7%

2018
Plan
64.3
64.3
-34.6
29.7
46%
-18.7
11.0
0.0
11.0
17%
-1.8
9.2
-1.0
0.0
8.1
-1.4
6.7
6.1

100%
100%
-54%
46%
-29%
17%
0%
17%
-3%
14%
-2%
0%
13%
-2%
10%

2019
2020
Plan
Plan
67.7 100%
72.3 100%
67.7 100%
72.3 100%
-36.4 -54%
-38.9 -54%
31.3
46%
33.5
46%
46%
46%
-19.7 -29%
-20.8 -29%
11.6
17%
12.7
18%
0.0
0%
0.0
0%
11.6
17%
12.7
18%
17%
18%
-1.9
-3%
-2.0
-3%
9.7
14%
10.7
15%
-0.9
-1%
-0.8
-1%
0.0
0%
0.0
0%
8.8
13%
9.9
14%
-1.5
-2%
-1.7
-2%
7.3
11%
8.2
11%
6.2
6.5

2) Shown as net effect including improvements and restructuring costs

47

Development of Capital structure – debt level can be reduced

Capital structure Alpina group (in Mil. €)
Equity

Debt
31

41

23

42

32

16

26
21

9

7

5

19
16

0.9

13

-10
2013
ACT

2014
2015
2016
ACT Forecast Plan

2017
Plan

2018
Plan

2019
Plan

2020
Plan

2013
ACT

2014
2015
2016
ACT Forecast Plan

2017
Plan

2018
Plan

2019
Plan

2020
Plan

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
Source: Alpina; ADMETAM
© ADMETAM

48

Solid capital structure and internal cash flow as key points
Inventory

Working capital
NWC as % of sales

Inventory as
% of sales
36%

26%

27%

23%

2015 F

2020 Plan

2015 F

2020 Plan

Alpina
Group

Debt/EBITDA
ratio

T EUR

9,929

12.6x

-423
1.0x

2015 F
2015 F

2020 Plan

2020 Plan

Debt/EBITDA ratio

Cash flow from operations

Source: Alpina; ADMETAM
© ADMETAM

49

Development of cash flow 2016–20 proves strengthening of FCF
Alpina group cashflow (in Mil. €)
2015
Forecast

2016
Plan

2017
Plan

2018
Plan

2019
Plan

2020
Plan

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

9.9

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

Operating Activities

Investment/financing

Source: Alpina; ADMETAM
© ADMETAM

50

Early 2016 financial requirements to be covered by bridge finance
1st half 2016

end of 2016

1.1
Mil. €

3.8
mil. €

3.8
Mil. €

3.8
Mil. €

Financial
needs

Bridge
finance

Re-payment
through
Stock sales1)/
savings

2.7
Mil. €

Working
capital
Alpina
d.o.o

Restructuring
requirements

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
1) Cash in in the amount of € 2 Mio on the account of sales of old stock planned for 2016
Sources: Alpina Finance, ADMETAM
© ADMETAM

51

Agenda

Executive summary
Initial situation

Future strategy and structure
Improvement programme
Plan 2016-2020
Implementation

© ADMETAM

Project organisation with clear and measurable targets
ALPINA Group

• Gross Margin1) 2014: 37.9%
• Gross Margin1) 2015: 38.7%

5 Mil EBITDA =
25 Mil
enterprise
value

ALPINA Group Target

22.4

• Gross Margin %: 46% by
12

Alpina EBITDA
2014

through product
market offensive

M1: Product portfolio/
collection development
• ALPINA
• ADMETAM

• ALPINA
• ADMETAM

M5: Supply Chain/
footprint/ working cap.
• ALPINA
• ADMETAM

M2: Market oriented
pricing/ margin improv.

• ALPINA
• ADMETAM

Alpina EBITDA
after impr.

EBITDA (mEUR)

M3: Sales/ wholesale/
marketing/ services
• ALPINA
• ADMETAM

M6: Sourcing/
organisation/ ITT

7.6

2.6

internal measures and

EV (mEUR)

M4: : Retail structure/
improvement
• ALPINA
• ADMETAM

M7: Strategy/ structure/
reorganisation
• ALPINA
• ADMETAM

65.4

M8: Overhead cost/
controlling/ cash
• ALPINA
• ADMETAM

“Ingredients”
Clear Targets

Detailed programme

Project Organisation

Responsibilities

Control

1) New gross margin calculation includes cost of direct materials, direct and hired labour and subcontracting services
Source: ADMETAM
© ADMETAM

53

Business development ALPINA with clear timeline
Adjust “indirect”
production
considering central
planning
requirements

Shift ALLDAY from FOGS to BROMY
Production

Shift ALLDAY from Žiri to BROMY
Close factory Romania/ insource volume
Review/ Close factory China/ insource volume

HQ

Implement all operational improvements in line with potential and return
Reorganisation/ consider the removal HQ from Žiri to Ljubljana/ merge with retail function
Ensure transparency across the business units and integration/ control of subsidiaries

Sport

DEC ‘15

JAN ‘16

FEB ‘16

2013 ‘16
MAR

APR ‘16

MAY ‘16

JUN ‘16

JUL ‘16

Clean up all inventories and sell
surplus stock to generate cash1)
Close non profitable stores and sell properties as soon as possible
Define distribution strategy and
roll out plan
Clean up all inventories and sell
surplus stock to generate cash1)
Define collection and price structure/ source product accordingly
Review entire distribution structure
and improve market penetration
Define appropriate marketing support
considering return on marketing
Define collection and price structure/ source product accordingly

Source: ADMETAM
© ADMETAM

NOV ‘15

Implement retail operational discipline/ ensure adequate
store management/ buying and stock policy

ALLDAY

Retail

OCT ‘15

start dates, footprint timeline page 38

1) Cash in from sales of old stock expected in the second half of 2016

54

Restructuring and re-alignment of ALPINA Group - summary

external

Operational and financial restructuring

Improvement
programme 2016
(EBITDA)

Cash requirement
(temporarily 2016)

Debt/equity swap
2016

Product and market
development 2020
(EBITDA)

> 6 Mil. Euro

3.8 Mil. Euro

up to 4.5 Mil. Euro

> 5 Mil. Euro

Approach new
Attend
international
MICAM/ Milan
customers
(ALLDAY)
(ALLDAY)
Attend
ISPO
(SPORT)
Jan

Feb

Mar

(Evtl. attend
FFANY
New York
(ALLDAY))

Approach new
international
customers
(ALLDAY)

Attend
MICAM/ Milan
(ALLDAY)

Attend
FFANY
New York
(ALLDAY)

Attend
ISPO
(SPORT)
Apr

May

Jun

Jul

Sep

Dec

2017

internal

2016
Approval
Business plan
Approval
Reorganisation plan

1) Detailed footprint timeline to be found on page 38
© ADMETAM

Move
Reorganisation
ALLDAY
indirect headcount
production
Žiri to Bromy 1)

Shift Sport
prod. to
FOGS
Close
plant
Romania

Move dir. Close
injection plant
to Bromy China

55

Disclaimer
ADMETAM BUSINESS CONSULTANTS GmbH developed the presentation based on the data provided by ALPINA Group and its outside experts.
Thus ADMETAM BUSINESS CONSULTANTS GmbH relies on the accuracy and completeness of this information 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
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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
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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 to
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the source.
Source: ADMETAM
© ADMETAM

56