)METAM Increase of efficiency and profitability > 5 Year Business Plan Ljubljana, 4th January 2016ecutive summary (1/2) Ea be . + Markets for Sport and ALLDAY sttill with small growth partly developed by variety of product + 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 rag * 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 + Growing competitive pressure (Deichmann, CCC, Mass, Humanic) requires network development + Appropriate retail network with clear KPIs and retail concept to be developed Source: ADMETAM © AbweTAM sBy Executive summary (2/2) Ea + Implement new footprint to increase capacity utilisation and reduce cost significantly io + Eliminate duplication of office functions and warehouses across the region, centralise group functions eee ary + Improve productivity on all lines and ensure equipment utilisation by appropriate maintenance + Implement new organisation with 2 tier management considering core competences/ centralisation Eee Cu) + 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 ae ea + 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 rE U TR peal pai + 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 (© AOMETAM, 4Bh avin Group KPIs significantly behind its competitors 500 450 400 350 o S S Sales per head (t €) wo 8 & See a 8 3 S 50 20% 30% @ Nike Ferragamo = @ Prada Under Armour Aigner ° * Adidas * Buffalo ¢@TOD's Geox o @ Deichman Rossignol* ie Reno Bata . ECCO ence % Wane Acar 40% 50% 60% 70% 80% Gross margin’) (%) “Estimated _1) Gross margin calculation for ALPINA and peers includes material costs only ‘Source: Alpina Management, Annual reports 2013 & 2014; ADMETAM irect 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Bst:ateaic restructuring/ re-alignment based on holistic approactakumial Aim See ay Create sustainable vision Define credible roadmap Exit compulsory settlement Prepare for future investor(s) Strategy Assure liquidity for supply & investment Secure customer & supplier base Create new business & future sales Align core competences Operations Management / Consolidate/ close plants Reduce functional costs Improve purchasing Increase overall productivity Optimise core processes / Implement new organisation Upgrade managerial skills Improve measurement reporting Enforce stronger leadership / / ‘Source: ADMETAM, (© AOMETAM, development’ mbo A + Design of blueprint: started vA vidbn \\ + Comprehensive restructuring / objectives BEnSteady, / values E nN / strategy! \ + Corporate presentation finalised / positioning \. + Brand positioning active /markets/ COMPEtitiON. chology customers, applications \ business modell value chain processes HR infra- organisation structure: roles/ resources, systems... leadership plant network — \\ + Sales recovery activities; started + Internationalisation started \ \\ + Plant configuration: finalised * Cost & productivity initiatives: started \\ + Group wide reorganisation \ running + New Management Board: CEO & CFO + New communication structure established finance! controlling responsibility’ profil/ cash flow/ * New calculation model financing running New ALPINA with sustainable EE Oe een 20are drivers of ALPINA strategic development already defined Key drivers of strategic development 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 (to) UL Pe Seis: ences (© AONE 22FBR spproacn: re-alignment of Alpina Group mainly in two phases Ea By 2017 - av 2016 Efficiency programme 2015 Peet nate sisal Cee aT Menge ola Vv Vv v @ Picduct portfotior Casa collection development fee eo Market orient. pricing/ Targets/ results: Targets/ results: margin improvement Sales/ wholesale/ Restructure retail network Sport development (package) marketing/ services a Sell outdated stocks Offer ,,total look” in fashion segment © Retail improvement us Quick wins in productions Strong position of brand eo Supply chain/ footprint/ productivity/ logistics Top line growth/ customer base Restructure production network to c aa capacity requirement (make or buy) oe ae organisation/ Market penetration Stable capital structure eo Strategy/ structure/ Reduce overhead cost/ generate Minimum 15% EBITDA reorganisation cash Increasing corporate value oe Overhead cost Improve gross margins oO Working capital reduction 7 Enterprise value through growth of sales/ margin Restructure operation holistically 5 Strengthen existing business n) 41) ITT = Invitation To Tender Sources: Alpina Management; ADMETAM (© AOMETAM, 27“" profitability and re-alignment to build sustainable future eee tie a ee release capital 2016 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) Agree and implement restructuring programme Re-organisation and comprehensive cost reduction Results Build organisational strength and sustainability 2016 - 2017, 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/ organi- sation, market orientation/ business model Establish core competences and market oriented product development Improve existing distribution prepare new; improve retail action and transparency, start sales/ marketing initiatives Results ney eee rma ‘Source: ADMETAM Ponce) Effective structure aso oleae Key questions: + How to financially support restructuring? + When is right time to sell (2™4 half 2016)? or Ea) eeucue cae Cee Pras 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 belt ROCE