A WINNING TEAM JUNE 30, 2020 - PUBLISHED ON MAGNA.ISA.GOV.IL: AUGUST 18, 2020
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A WINNING TEAM
JUNE 30, 2020
PUBLISHED ON MAGNA.ISA.GOV.IL: AUGUST 18, 2020
Legal Disclaimer & Note on Forward-Looking Information
This presentation does not constitute and should not be construed as an offer of securities by Electra Consumer Products (1970) LTD ("the Company") to the public. This presentation is
intended solely to present basic marketing information on behalf of the Company.
The information contained in this presentation, including any other information that shall be conveyed during the presentation of this presentation (“the Information”) does not constitute a
basis for investment decisions, does not constitute a recommendation or opinion from an investment or tax advisor, and should not be viewed as a substitute for the sound judgment of a
potential investor. The Information contained in the presentation is only a summary and may be deemed to be presented differently from the way it was presented in the Company’s reports,
although it can be calculated from the data included in the said reports. This presentation and the information contained therein are not intended to replace the need to review the reports
published by the Company. Investing in securities in general, and in the Company’s securities in particular, always carries risk. Keep in mind that past performance is no guarantee of future
results. Acquisition of the Company’s securities necessitates an in-depth examination of the Information published in the Company’s reports, in addition to an analysis of the legal, accounting,
economic, and tax aspect. The presentation may include additional data that was not presented in the reports published by the Company and/or Information that is presented differently from
the manner in which it was presented in the reports published by the Company.
This presentation has been provided solely for the sake of brevity and convenience, and is not intended as a substitute for the need to review the reports published by the Company. In order
to obtain complete, comprehensive information on the Company’s status and business and financial results, and to obtain a full picture of the Company’s operations and the risks the Company
is facing, the Company’s published periodic reports and other documentation must be scrutinized.
The Company’s estimates regarding the growth of sales in Europe (slide 12), the increase of online sales (slide 15), the expected capital gain before tax from the Golan Telecom transaction
(slide 16), and the formation of a financial asset following the completion of the Golan Telecom transaction (slide 20) constitute forward-looking information as defined in the Securities Law,
5728-1968, which relies, inter alia, on the subjective assessments and plans of the Company, its current activities, its current financial results, including the Company’s sales and revenues,
and on the analysis of general information that was available to it at the time of writing this presentation, including publications, studies, and surveys, and no commitment is given as to the
correctness or completeness of the information contained therein, and its correctness has not been independently verified by the Company. Forward-looking information is inherently subject
to risks and uncertainties, and actual results may differ substantially from those currently anticipated. The realization of the forward-looking information may be affected by the risk factors
associated with the Company’s operations (as detailed in the Company’s 2019 annual report), as well as by developments in the economic environment in which the Company operates, and
by external factors, such as regulations, that may affect its operations. It is hereby emphasized and clarified that the actual future results and achievements of the Company may be materially
different from those presented as forward-looking information in this presentation.
To avoid any doubt, it is hereby clarified that the Company does not undertake to update and/or alter the Information contained in this presentation in order to reflect events and/or
circumstances that occur after the presentation was prepared.
2|
A WINNING ECOSYSTEM
Israel’s largest consumer goods company focusing on electrical appliances
Sales of NIS 911 Million Sales of NIS 247 Million Sales of NIS 1.3 billion
Winning in Israel: Winning in Electrical Appliances: Winning in Retail Activities:
Production, import & distribution: Portfolio of super-brands 58 sales points
40% market share Winning Online:
Israel’s biggest online electrical stores
Winning with the House Brand:
Winning Internationally: Israel’s leading brand for electrical
Production for 5 leading companies appliances
in Europe
PRODUCTION & IMPORT LOGISTICS & SERVICE RETAIL
*2019 DATA
3|
One of Israel's
SUPER BRANDS
Cooking and baking products, air conditioning,
refrigeration products, electronics
*At consumer prices with VAT
4|
2019
Revenue: EBITDA: Net Profit:
2.75
Billion NIS
283 185
Million NIS
Million NIS
Segment Profit Segment Profit Segment Profit
Consumer Electronics Retail Cellular Communication
36
Million NIS
47
Million NIS
223
Million NIS
Net Financial Assets*
103
Million NIS
*Financial debt excluding liabilities in respect of leases and liabilities related to Cellcom
5|
4 KEYS TO VICTORY
LEVERAGING
GROWTH ENGINES
1| INFRASTRUCTURE &
CAPABILITIES
2| IN ISRAEL & EUROPE
DEVELOPING & BENEFITING FROM
3| IMPLEMENTING
INNOVATION
4| ELCO GROUP
SYNERGIES
6|
1 | Leveraging infrastructure & capabilities
Strong infrastructure throughout the value Proven management and marketing
chain: from plant to consumer capabilities
Proven Industrial Infrastructure: Goal-Oriented Management:
+
Local Israeli production production of HR, finance, purchasing, trade, technology, and
advanced climate control systems advanced information systems
Effective Logistical Infrastructure: Excellent Marketing Capabilities:
Import, inventory management, distribution, Super-brand portfolio, reputation, in-depth
delivery, and service consumer knowledge, significant presence in
almost every Israeli home
Nationwide Retail Infrastructure:
Sales floor, e-commerce
7|
The Result:
Tremendous Commercial Power
Significant Competitive Advantage
8|
2 | Establishing growth engines in Israel
Leading to growth in all areas of activity
• Expanding activities in the ultra- • Bringing in new brands • 5 branches in Arab communities
Orthodox and Arab sectors • New product categories • VAT-free stores in Eilat
• Establishing an advanced new • Establishing a dedicated logistics
production plant center for the ECOM arm
• Providing services to the
institutional market
• Opening a dedicated logistics
center in Norther Israel
• Launching advanced climate
control systems
9|2 | Establishing growth engines in Israel
Realizing opportunities in the income-producing real estate field:
Mixed-use project in Rishon LeZion
155,000 sqm for work and mixed use
25,000 sqm commercial area
55 dunam (5.5 hectare) area owned by Electra CP
The new Arrangements Law is likely to yield rights for residences
| 10 10 |2 | Establishing growth engines in Israel
Electra is already keeping Europe warm:
Execution of additional long-term
An innovative production plant at agreements with strategic customers
the forefront of technology with a
unique ability develop Establishment of joint development
INVERTER heating systems
centers with strategic customers
11 |SALES GROWTH IN EUROPE
150M€
15€M
Within 7 Years
Today
12 |3 | Developing & implementing innovation
PAY
Branch digitization, with the Integration of payment apps in Innovative plant in Ashkelon Development of green, energy-
help of tablets and self-service branches and online stores that will meet the highest efficient climate control
kiosks standards systems
Expansion to digital Marketing automation 360° customer profile
service channels
13 |4 | Benefiting from Elco Group synergies
Real estate developer Launch of an e-commerce Infrastructure
and contractor site for all Elco Group company that works
responsible for building employees with contractors and
thousands of apartments More than 12,000 developers
and real estate projects employees
every year
14 |Impact of COVID-19:
The coronavirus era is a power multiplier
for Electra’s home-focused strategy
The increased time consumers spend at home and their lifestyle changes
are a massive business opportunity for the company
Increased Sales of Increased Use of Air Increased Reliance on E-Commerce
Electrical products Conditioning 312% increase in online sales in Q2/20
Same-store sales growth in H1/20 Sales growth in H1/20 relative to Q2/19
+5% relative to H1/19 +5% relative to H1/19
Expected sales of NIS 150-200 million in
2020 – 3 times the previous year
15 |Golan Telecom Sale:
Over Half a Billion NIS Profit Within 3 Years
Total Expected Consideration Electra CP’s Share in Golan’s Expected Capital Gain
for Electra CP Profits from the Date of Purchase Before Tax
NIS 570-600 Million Approx. NIS 275 Million NIS 230-260 Million
Transaction Complete
MoU Signed Approval from Recommendation Approval from
Competition from Ministry of Ministry of
Authority Finance Communications
16 |Electra enjoys financial strength
that supports growth engines
17 |Improvements in Every Parameter
Across H1 & Q2
H1/19 VS. H1/20 Q2/19 VS. Q2/20
H1/2020 H1/2019 Q2/2020 Q2/2019
+4.3% +4.2%
1,387 745
1,330 714
+33% +23% +48% +41% +31% +35%
137 169 72 94
80 106 62 43 61 35
42 26
Revenue Operating EBITDA Net Profit Revenue Operating EBITDA Net Profit
Profit Profit
18 |Improvement Resulting from Growth in Core Areas
H1/19 VS. H1/20 Q2/19 VS. Q2/20
H1/2020 H1/2019 Q2/2020 Q2/2019
+5.2% +3.9%
624 331
Segment +5.2% 594 +3.1%
Revenue 486 +2.1% 260 268
319 +2.5%
462 131 135
261 267
Consumer Electricity Cellular Consumer Electricity Cellular
ELectronics* Retail Communication ELectronics* Retail Communication
+146% -1.6% +192% -8.9%
51 51 26 29
26
46
+34% +66%
27 17
Segment 19 20 10
Profit
9
Consumer Electricity Cellular Consumer Electricity Cellular
ELectronics* Retail Communication ELectronics* Retail Communication
*Not including sales of major and small appliances under the Electra brand, which moved to the retail sector in H2/19, and not including air conditioner sales activities from the European subsidiary
19 |Electra Displays Financial Strength
All data correct as of June 30, 2020
Consolidated Excluding Golan
Net Debt to EBITDA 2.05 0.96
Debt to Assets Ratio 22% 7%
Equity to Assets Ratio 25% 34%
AFTER COMPLETING THE
In NIS Millions GOLAN SALE, THE COMPANY
IS EXPECTED TO HAVE A
Short-Term Credit from Banks 67 67 FINANCIAL ASSET OF
Long-Term Loans 30 30 APPROX.
Real Estate Loans 71 71
HALF BILLION
Cash )208( )145(
Tradable Securities )28( - BILLION NIS*
Bank Debt (Asset) )68( 23
Liability Under IFRS 16 139 124
Liabilities Regarding Cellcom 572 -
Total Financial Debt 643 147
*Before dividend distribution and tax on the transaction
20 |KEEPS ON WINNING
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