q2 results overview 2014

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RESULTS OVERVIEW Q2 2014DELTA REACHED $1 BILLION SALES

IN THE YEAR ENDING JUNE 30TH

RESULTS OVERVIEW | Q2 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 עובדה מוכחת אינו מהווה 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 שני לשנת 2014.


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6%

11%

9%

9%

Sales UP 6% to $249.2M

19th Consecutive Quarters of Organic Sales Growth

Operating Income Increased 11% to $15.5M comp. to $14.0M

EBITDA UP 9% to $19.9M

Diluted EPS went UP by 9%

Q2 RECORD SALES, NET PROFIT & EPS

Q2 2014 Q2 2013 % Change vs LY

Sales 249.2 234.4 6%

Operating Profit % from Sales

15.5 6.2%

14.06.0% 11%

EBITDA% from sales

19.98.0%

18.37.8%

9%

Net income attributed to company's shareholders

9.73.9%

8.83.8%

11%

Diluted EPS ($ per share) 0.38 0.35 9%

Operating Cash flow 10.2 18.0

Operating Cash flow - Last 4 Quarters ($ Millions)

45.1 42.2

($ Million)


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6%

19%

14%

20%

Sales UP 6% to $487.2M

Operating Income Increased 19% to $30.4M comp. to $25.5M

EBITDA UP 14% to $38.9M

Diluted EPS went UP by 20%

H1 RECORD SALES, NET PROFIT & EPS

YTD 2014 YTD 2013 % Change vs LY

Sales 487.2 461.6 6%

Operating Profit % from Sales

30.46.2%

25.55.5% 19%

EBITDA% from sales

38.98.0%

34.07.4% 14%

Net income attributed to company's shareholders

18.53.8%

15.43.0% 20%

Diluted EPS ($ per share) 0.73 0.61 20%

Operating Cash flow 3.6 4.7

Operating Cash flow - Last 4 Quarters ($ Millions)

45.1 42.2

($ Million)


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STRONG BALANCE SHEET

$336M

15.3%

46.5%

$117M

Increase in Equity to $336.3M

Net Debt/CAP Ratio down to 15.3% from 23.0%

Equity from total balance sheet ratio

Cash on hand

June 302014

%from total

June 302013

%from total

Cash and cash equivalents 116.8 16% 34.8 6%

Restricted cash 0.5 0% 1.8 0%

Trade receivables 121.7 17% 117.4 20%

Inventories 188.8 26% 159.9 28%

Assets held for sale 1.0 0% 1.0 0%

Others 19.0 3% 26.4 5%

Total current assets 447.8 62% 341.3 59%

Fixed assets,net of accumulated depreciation 100.0 14% 95.5 17%

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

175.8 24% 141.5 24%

Total Assets 723.6 100% 578.3 100%

Short-term bank loans 6.6 1% 39.2 7%

Current maturities of Debentures 18.7 3% 16.5 3%

Trade payables and others 142.9 20% 130.4 22%

Total current liabilities 168.2 24% 186.1 32%

Debentures 191.9 26% 81.9 14%

Others non-current liabilities 27.2 4% 19.5 4%

Total long term liabilities 219.1 30% 101.4 18%

Equity 336.3 46% 290.8 50%

Total Liabilities and equity 723.6 100% 578.3 100%

($ Million)


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IMPROVED FINANCIAL INDICATORS

30.06.2014 30.06.2013

Current ratio 2.66 1.83

Quick ratio 1.54 0.98

Days of Sales Outstanding 44 45

Days Payable Outstanding 43 40

Inventory Days 99 87

Operating cash flow - Q2 ($ million) 10.2 18.0

Operating cash flow - H1 ($ million) 3.6 4.7

Operating cash flow - Last 4 Quarters ($ million) 45.1 42.2

EBITDA - Q2 ($ million) 19.9 18.3

EBITDA - H1 ($ million) 38.9 34.0

EBITDA - Last 4 Quarters ($ million) 91.0 77.9

Net financial debt ($ million) 82.4 99.1

Net financial debt to EBITDA ratio (based on Last 4 Quarters) 0.9 1.3

Equity / Equity & Liabilities 46.5% 50.3%

Equity ($ million) 336.3 290.8

Net Debt / CAP 15.3% 23.0%

($ Million)


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RESULTS ON A QUARTERLY BASIS

Excluding one time items

2013 2014 Last 4 Quarters

Q1 Q2 Q3 Q4 Q1 Q2

Net Sales 227,255 234,368 257,199 255,897 238,074 249,152 1,000,322

EBIT before one time items 11,567 13,979 21,286 21,090 14,838 15,538 72,752

% 5.1% 6.0% 8.3% 8.2% 6.2% 6.2% 7.3%

EBITDA 15,759 18,288 25,235 26,889 19,026 19,863 91,013

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

Net Income excluding one time items 6,656 8,833 14,248 14,517 9,330 9,772 47,867

Permanent Cash Flow 10,411 11,196 21,334 20,552 12,117 13,294 67,297

Changes in Working Capital (23,684) 6,806 (1,959) 1,584 (18,731) (3,075) (22,181)

Operating Cash Flow (13,273) 18,002 19,375 22,136 (6,614) 10,219 45,116

($ Million)

WE REACHED $1 BILLION SALES IN THE YEAR ENDING JUNE 30TH


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SALES ANALYSIS BY GEOGRAPHIC AREA

Q2 YTD

2014 % of sales 2013 % of

sales%

change 2014 % of sales 2013 % of

sales%

change

North America 141.1 57% 137.8 59% 2% 265.9 55% 265.6 58% -

Europe (excluding Germany)

41.4 17% 42.4 18% (2%) 84.2 17% 77.9 17% 8%

Germany 33.6 13% 28.5 12% 14% 75.6 16% 68.3 15% 11%

Israel 31.0 12% 23.8 10% 30% 57.1 12% 47.1 10% 21%

Others 2.1 1% 1.9 1% 4.4 1% 2.7

Total 249.2 100% 234.4 100% 6% 487.2 100% 461.6 100% 6%

($ Million)


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IMPROVED GROSS MARGIN% From SalesGrowing our branded business

H12013

YEAR2012

YEAR2011

YEAR2013

H12014

29.0%

30.8%

25.7%

23.7%

30.2%


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Q2 SALES AND EBIT BY SEGMENT

Sales EBIT

Q2 2014 Q2 2013 % Chg. Q2 2014 Q2 2013

Delta USA% from segment sales

117,339 104,004 13% 7,9456.8%

8,0877.8%

Global Upper Market% from segment sales

63,609 72,625 (12%) 5,6438.9%

*7,502*10.3%

Schiesser % from segment sales

41,500 35,221 18% (149)(0.0%)

(1,464)(4.2%)

Delta Israel% from segment sales

30,873 23,888 29% 2,2677.3%

1,0864.5%

Intersegment sales (4,169) (1,370)

Others (168) (1,232)

Total Sales and EBIT 249,152 234,368 6% 15,5386.2%

13,9796.0%

($ Million)

* Includes capital gain of $1.1 million from the sale of real estate. Q2 2013 EBIT excluding the capital gain was $6.4 million or 8.7% from sales.


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YTD SALES AND EBIT BY SEGMENT($ Million)

Sales EBIT

YTD 2014 YTD 2013 % Chg. YTD 2014 YTD 2013

Delta USA% from segment sales 209,254 195,696 7% 11,851

5.7%12,3956.3%

Global Upper Market% from segment sales 133,867 139,053 (4%) 11,381

8.5%*11,419

8.2%

Schiesser % from segment sales 94,293 83,256 13% 4,702

5.0%1,9922.4%

Delta Israel% from segment sales 57,023 47,130 21% 1,857

3.3%1,9384.1%

Intersegment sales (7,211) (3,512)

Others **585 (2,198)

Total Sales and EBIT 487,226 461,623 6% 30,3766.2%

25,5465.5%

* Includes capital gain of $1.1 million from the sale of real estate. H1 2013 EBIT excluding the capital gain was $10.3 million or 7.4% from sales.** 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

Q2 Q3 Q4 Q1 Q2

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

Delta USA 8,087 104,004 6,960 103,493 4,629 103,395 3,906 91,915 7,945 117,339 23,440 416,142

% from sales 7.8% 6.7% 4.5% 4.3% 6.8% 5.6%

Global Upper Market 7,502 72,625 7,769 73,027 5,516 62,496 5,738 70,258 5,643 63,609 24,666 269,390

% from sales 10.3% 10.6% 8.8% 8.2% 8.9% 9.2%

Schiesser (1,464) 35,221 7,127 55,497 5,540 55,221 4,851 52,793 (149) 41,500 17,369 205,011

% from sales (4.2%) 12.8% 10.0% 9.2% (0.0%) 8.5%

Delta Israel 1,086 23,888 557 26,835 5,951 37,252 (410) 26,150 2,267 30,873 8,365 121,110

% from sales 4.5% 2.1% 16.0% (1.6%) 7.3% 6.9%

Adjustments (1,232) (1,370) (1,127) (1,653) (546) (2,467) 753 (3,042) (168) (4,169) (1,088) (11,331)

Total EBIT/Sales 13,979 234,368 21,286 257,199 21,090 255,897 14,838 238,074 15,538 249,152 72,752 1,000,322

% from sales 6.0% 8.3% 8.2% 6.2% 6.2% 7.3%

($ Million)


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CAPITAL EXPENDITURES

Investing in our future growth ($ Million)

H12013

H120142012 2013

18.0

22.5

12.111.0

FIX – Acquisition of the Brand FIX

Joint Ventures - investment of $5.0M in 3 new factories

Manufacturing 4.1

5.0

2.1

3.5

1.7

2.8

12.1

Capex

Others

Total

Israeli Market (Mainly in Retail Stores)

Schiesser (Mainly in Stores and Excluding manufacturing)

Other investments


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NET PROFIT & DILUTED EPS ATTRIBUTED TO THE COMPANY SHAREHOLDERS

Q2 H1

2014 2013 % Chg. 2014 2013 % Chg.

Reported Diluted EPS ($)* 0.38 0.35 9% 0.73 0.61 20%Q2

2013H1

2013Q2

2014H1

2014

8.89.7

15.4

18.5

11%

20%

*Attributed to the company shareholders

($ Million)


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DIVERSIFIED PORTFOLIO

% FROM SALES (first half of 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

43%

45%

55%

51%

74%

39% 30% 31%

49%

26%

33% 12%

23% 18% 14%

26% 19% 12%

GLOBAL UPPER MARKET

SCHIESSER DELTAISRAEL

*Based on internal estimation


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2013

SALES GROWTH ON A QUARTERLY BASIS

19 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

227234

249

($ Million)


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REITERATING 2014 GUIDANCE

2011Actual

2012Actual

2013Actual

2014Guidance

% Increase 2014 Guidance

compared to 2013 Actual

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

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

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

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

Diluted EPS ($) 1.15 1.37 1.75 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 2014ReiteratedGuidance

ReiteratedGuidance

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

Q2 DIVIDEND OF $3.5M AND YTD DIVIDEND OF $7.0M

STRONG ORGANIC GROWTH ENGINES

REITERATING OUR 2014 GUIDANCE

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THANK YOU