q1 results 2014

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RESULTS OVERVIEW Q1 2014

RESULTS OVERVIEW | Q1 2014

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האמור במצגת זו כולל גם מידע צופה פני עתיד, כהגדרתו בחוק ניירות ערך, של תחזיות, מטרות, הערכות, אומדנים ומידע אחר המתייחסים לאירועים ו/או לעניינים עתידיים, שהתממשותם אינה ודאית ואינה בשליטת החברה. מידע צופה פני עתיד והנתונים העיקריים ששימשו והוא מבוסס רק על הערכה סובייקטיבית של החברה. העובדות אינו מהווה עובדה מוכחת בסיס למידע זה הנם עובדות ונתונים בנוגע למצב הנוכחי של החברה ושל עסקיה ועובדות ונתונים מאקרו כלכליים, והכול כפי שהם ידועים לחברה במועד הכנת מצגת זו. לפיכך, קוראי מצגת זו מוזהרים, כי התוצאות וההישגים בפועל של החברה

בעתיד עלולים להיות שונים באופן מהותי מאלה שהוצגו במידע הצופה פני עתיד המוצג במצגת זו.החברה, בעלי מניותיה, נושאי המשרה בה ומי מטעמם אינם ולא יהיו אחראים לשלמות או דיוק המידע הכלול במצגת זו, לרבות מידע צופה פני עתיד, ולא יהיו אחראים לשלמות ודיוק הערכות ותחזיות המופיעות במצגת זו והם לא נושאים ולא

יישאו באחריות או חבות לנזקים או הפסדים העלולים להיגרם כתוצאה מהשימוש או מההסתמכות על מידע זה.

בהעדר אינדיקציה אחרת, הנתונים הכספיים הנכללים במצגת זו מתייחסים לרבעון ראשון לשנת 2014.


3

5%

18

28%

21%

30%

Sales UP 5% to $238.1M

18 Consecutive Qtrs. of Organic Sales Growth

Operating Income Increased 28% to $14.8M comp. to $11.6M

EBITDA UP 21% to $19.0M

Diluted EPS went UP by 30%

Q1 RECORD SALES, NET PROFIT & EPS

Q1 2014 Q1 2013 % Change vs LY

Sales 238.1 227.3 5%

Operating Profit % from Sales

14.86.2%

11.65.1%

28%

EBITDA% from sales

19.08.0%

15.86.9%

21%

Net income attributed to company's shareholders

8.73.7%

6.62.9%

32%

Diluted EPS ($ per share) 0.34 0.26 30%

Operating Cash flow (6.6) (13.3)

Operating Cash flow - Last 4 Quarters ($ Millions)

52.9 40.2 31%

($ Million)


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STRONG BALANCE SHEET

$329M

17.8%

52.5%

$53M

Increase in Equity to $328.6M

Net Debt/CAP Ratio down to 17.8% from 24.9%

Equity from total balance sheet ratio

Cash on hand

March 312014

%from total

March 312013

%from total

Cash and cash equivalents 51.2 8% 41.2 7%

Restricted cash 1.6 0% 2.1 0%

Trade receivables 107.4 17% 110.3 19%

Inventories 178.9 29% 154.4 27%

Assets held for sale 1.0 0% 6.4 1%

Others 18.8 3% 20.5 4%

Total current assets 358.9 57% 334.9 59%

Fixed assets,net of accumulated depreciation 94.8 15% 93.9 16%

Intangible assets, net of accumulated depreciation and other long term assets

172.5 28% 140.5 25%

Total Assets 626.2 100% 569.3 100%

Short-term bank loans 2.2 0% 56.4 10%

Current maturities of Debentures 18.1 3% 16.0 3%

Trade payables and others 121.4 19% 112.5 20%

Total current liabilities 141.7 23% 184.9 32%

Debentures 128.8 21% 81.5 14%

Others non-current liabilities 27.1 4% 20.3 4%

Total long term liabilities 155.9 25% 101.8 18%

Equity 328.6 52% 282.6 50%

Total Liabilities and equity 626.2 100% 569.3 100%

($ Million)


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IMPROVED FINANCIAL INDICATORS

31.03.2014 31.03.2013

Current ratio 2.55 1.81

Quick ratio 1.27 0.98

Days of Sales Outstanding 41 44

Days Payable Outstanding 33 32

Inventory Days 97 85

Operating cash flow - Q1 ($ million) (6.6) (13.3)

Operating cash flow - Last 4 Quarters ($ million) 52.9 40.2

EBITDA - Q1 ($ million) 19.0 15.8

EBITDA - Last 4 Quarters ($ million) 89.4 *71.4

Net financial debt ($ million) 83.2 109.1

Financial debt to EBITDA ratio (based on Last 4 Quarters) 0.9 1.6

Equity / Equity & Liabilities 52.5% 49.6%

Equity ($ million) 328.6 282.6

Net Debt / CAP 17.8% 24.9%

($ Million)

* On a Pro-forma basis, EBITDA on Trailing Twelve Month ending March 31, 2013, including Schiesser, Amounted to $69.8M


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RESULTS ON A QUARTERLY BASIS

Excluding one time items

2013 2014 Last 4 Quarters

Q1 Q2 Q3 Q4 Q1

Net Sales 227,255 234,368 257,199 255,897 238,074 985,538

EBIT before one time items 11,567 13,979 21,286 21,090 14,838 71,193

% 5.1% 6.0% 8.3% 8.2% 6.2% 7.2%

EBITDA 15,759 18,288 25,235 26,889 19,026 89,438

% 6.9% 7.8% 9.8% 10.5% 8.0% 9.1%

Net Income excluding one time items 6,656 8,833 14,248 14,517 9,330 46,928

Operating Cash Flow (13,273) 18,002 19,375 22,136 (6,614) 52,899

Permanent Cash Flow 10,411 11,196 21,334 20,552 12,117 65,199

($ Million)


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SALES ANALYSIS BY GEOGRAPHIC AREA

Q1

2014 % of sales 2013 % of

sales%

change

North America 124.9 52% 127.7 56% (2%)

Europe (excluding Germany)

42.9 18% 36.6 16% 17%

Germany 41.9 18% 38.9 18% 8%

Israel 26.2 11% 23.3 10% 12%

Others 2.2 1% 0.8

Total 238.1 100% 227.3 100% 5%

($ Million)


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IMPROVED GROSS MARGIN% From Sales

Q12013

YEAR2012

YEAR2013

Q12014

28.4%

30.4%

25.7%

30.2%

Growing our branded business


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Q1 SALES AND EBIT BY SEGMENT

Sales EBIT

Q1 2014 Q1 2013 % Chg. Q1 2014 Q1 2013

Delta USA% from segment sales

91,915 91,692 3,9064.3%

4,3074.7%

Global Upper Market% from segment sales

70,258 66,427 6% 5,7388.2%

3,9175.9%

Schiesser % from segment sales

52,793 48,035 10% 4,8519.2%

3,4567.2%

Delta Israel% from segment sales

26,150 23,242 12% (410)(1.6%)

8523.7%

Intersegment sales% from segment sales (3,042) (2,141)

Others *753 (965)

Total Sales and EBIT 238,074 227,255 5% 14,8386.2%

11,5675.1%

($ Million)

* Includes capital gain of $1.0 million from the sale of real estate.


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SEGMENTAL RESULTS ON A QUARTERLY BASIS

Excluding one time items

2013 2014Last 4 Quarters

Q1 Q2 Q3 Q4 Q1

EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES EBIT SALES

Delta USA 4,307 91,692 8,087 104,004 6,960 103,493 4,629 103,395 3,906 91,915 23,582 402,807

% from sales 4.7% 7.8% 6.7% 4.5% 4.3% 5.9%

Global Upper Market 3,917 66,427 7,502 72,625 7,769 73,027 5,516 62,496 5,738 70,258 26,525 278,406

% from sales 5.9% 10.3% 10.6% 8.8% 8.2% 9.5%

Schiesser 3,456 48,035 (1,464) 35,221 7,127 55,497 5,540 55,221 4,851 52,793 16,054 198,732

% from sales 7.2% (4.2%) 12.8% 10.0% 9.2% 8.1%

Delta Israel 852 23,242 1,086 23,888 557 26,835 5,951 37,252 (410) 26,150 7,184 114,125

% from sales 3.7% 4.5% 2.1% 16.0% (1.6%) 6.3%

Adjustments (965) (2,141) (1,232) (1,370) (1,127) (1,653) (546) (2,467) 753 (3,042) (2,152) (8,532)

Total EBIT/Sales 11,567 227,255 13,979 234,368 21,286 257,199 21,090 255,897 14,838 238,074 71,193 985,538

% from sales 5.1% 6.0% 8.3% 8.2% 7.2%

($ Million)


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CAPITAL EXPENDITURES

Investing in our future growth ($ Million)

Q12013

Q12014

4.6

10.1

2012 2013

21.622.5

5.1

2.2

2.8FIX – Acquisition of the Brand FIX

Joint Ventures - investment of $2.8M in 2 new socks factories

Manufacturing 2.0

1.4

1.0

0.7

5.1

Capex

Others

Total

Israeli Market (Mainly in Retail Stores)

Schiesser (Mainly in Stores and Excluding manufacturing)


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NET PROFIT & DILUTED EPS ATTRIBUTED TO THE COMPANY SHAREHOLDERS

Q1

2014 2013 % Chg.

Reported Diluted EPS ($)* 0.34 0.26 30%

Q12013

Q12014

6.6

8.732%

*Attributed to the company shareholders

($ Million)


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LEADER IN PRODUCT INNOVATION

DIVERSIFIED BUSINESS MODEL

LESS CYCLICAL - LESS FASHION RISK

GLOBAL OPERATIONS AND CUSTOMER BASE

RELATIONSHIP WITH ACTIVEWEAR AND LEADING

PERFORMANCE BRANDS

OPERATIONAL LEVERAGE - POTENTIAL

GROWTH IN EBIT MARGIN

MULTIPLE PATH WAYS TO GROW

STRONG MANAGEMENT TEAM

SHAREHOLDER VALUATION MATRIX


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DIVERSIFIED PORTFOLIO

% FROM SALES (For Q1 2014)

Continue to Growth Organicallyand through Acquisitions

Continue to grow our Brandedand Retail Businesses

Continue to grow Globally

Invest in Innovation

Growth in Activewear, Socksand Seamless

Business Segments

Product Categories

Geographic Area

Branded / Private Label

Production

Market Segment

DELTA USA

LADIES

NORTH AMERICA

PRIVATE LABEL

OUTSOURCING

UPPER MARKET MID TIER MASS MARKET

BRANDED

IN HOUSE

EUROPE ISRAEL

MENS SOCKS KIDS

39%

44%

52%

50%

76%

40% 30% 30%

50%

24%

36% 12%

24% 18% 14%

28% 22% 11%

GLOBAL UPPER MARKET

SCHIESSER DELTAISRAEL


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2013

SALES GROWTH ON A QUARTERLY BASIS

18 consecutive Qtrs. of sales ORGANIC GROWTH compared to prior years

2009 2010 2011 2012 2014

Q3 Q4Q2Q1

123

136

163

151 153

176

247256

170

185

234

257

157160

169

141

157

168

238

227

234

($ Million)


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2014 IMPROVED GUIDANCE

2011Actual

2012Actual

2013Actual

2014PreviousGuidance

2014UpdatedGuidance

% Increase 2014 Guidance

compared to 2013 Actual

Sales 678.8 817.8 974.7 1,035-1,065 1,045-1,075 7%-10%

EBIT 39.7 50.7 67.9 75-81 77-83 13%-22%

EBITDA 51.5 64.8 86.2 93-99 95-101 10%-17%

Net Profit 27.6 33.8 44.3 49-54 50-55 13%-24%

Diluted EPS ($) 1.15 1.37 1.75 1.93-2.11 1.95-2.14 11%-22%

($ Million)Excluding one time items


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2009 2010 2011 2012 2013 2014

573620

679

818

975

1,045-1,075CAGR

13.1%

SALES

2009 2010 2011 2012 2013 2014Updated Guidance

Updated Guidance

16

33

40

51

68

77-83CAGR

38.0%

EBIT*

*Excluding one time items

CONSISTENT GROWTH($ Million)Growth engines:

Brands Activwear Retail


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SUMMARYPOSITIVE TREND CONTINUES IN SALES & PROFITABILITY

STRONG FINANCIAL MATRIX

INCREASE DIVIDEND TO $3.5M FOR Q1 2014

STRONG ORGANIC GROWTH ENGINES

INCREASE 2014 GUIDANCE

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THANK YOU