Otto Group company presentation 2015

Otto Group company presentation (Date of June 2015)

Welcome to the Otto Group


Agenda

2

1 Otto Group – international, multifaceted, innovative

2 Vision and mission

3 Business segments overview

4 Sustainability at the Otto Group

5 Otto Group as employer

6 E-commerce strategy of the Otto Group

Otto Group company presentation (Date of June 2015)3

1. Otto Group – international, multifaceted, innovative


ManagementThe Executive Board of the Otto Group

Hans-Otto Schrader, Chairman of the Executive Board and Chief Executive Officer Otto Group (CEO)

Dr. Rainer Hillebrand, Vice Chairman of the Executive Board, Member of the Executive Board, Corporate Strategy, E-Commerce, Business Intelligence Otto Group

Alexander Birken, Member of the Executive Board, Multichannel Distance Selling Otto Group, Spokesman OTTO

Dr. Winfried Zimmermann, Member of the Executive Board, Projects, Controlling, Transformation & IT Otto Group

Neela Montgomery, Member of the Executive Board, Multichannel Retail Otto Group

HanjoSchneider, Member of the Executive Board, Services Otto Group

Petra Scharner-Wolff, Member of the Executive Board, Finance Otto Group, Chief Financial Officer (CFO)


International success

The Otto Group is a worldwide-operating retail and services group with 123 companies of primary significance in more than 20 countries.


Business segments of the Otto Group

Multichannel Retail ServicesFinancial

Services

with catalogue business, e-commerce and over-the-counter retail.

providing retail-related financial services across the value-added chain.

covering the entire portfolio of retail services across the value-added chain.


History – development into a global Group

7

Foundation and development stages

From a small mail-order shoe retailerto a company employing 1,000 people.

International expansion

By taking a share in 3 SuissesInternational, France, the development into an international group of companies starts.

Becoming a major player

1970: the Otto Versand breaks the billion barrier for the first time.

New head

Dr. Michael Otto takes over as Chairman of the Executive Board from 1981 to 2007. In 1986 environmental protection codified as corporate objective.

Globalisation and diversification

In the mid-90‘s, the Otto Group starts to push e-commerce as a pioneer in the business. The companycontinues to expand in Europe and Asia.

1949-1960 1960-1970 1970-1980 1990-20001980-1990


History – the new millennium

8

Logistics provider

Hermes merges all logistics services under the „Hermes Logistik Gruppe“ umbrella brand, thus becoming the strongest competitor to the German postal service.

Prof. Dr. h.c. Werner Otto dies

On 21 December 2011, company founderWerner Otto dies at the age of 102.

Change in the management

After 26 years on Executive Board, Dr. Michael Otto moves to Supervisory Board. Hans-Otto Schrader becomes the new chairman of the Executive Board.

2003 2007 20142011

Open Commerce„Collins“ presents the firstopen commerceapproach on theGerman e-commercemarket.

Next generation

Benjamin Otto takes on an active role for the Otto Group as Managing Partner.

2015


2013/14

Consolidated revenue in euros

12,1 bn12,1 bn

12,0 bn12,0 bn

2014/15

9

Global revenue trend


Revenue in the three segments in 2014/15

Revenue in million euros

9,917

644

1,495

Multichannel Retail Financial Services Services


Convincing development abroad

11

Germany

Europe (excl. GER, F, Ru)

North and South America

Asia and other regions

7,139

1,838

1,366

185

France 1,116

Russia 413

Revenue in million euros (FY 2014/15)


Otto Group employeesEmployees worldwide (full-time positions)

54,03754,037

2014/15


2. Vision and mission


Responsibility out of tradition

• Dr. Michael Otto, chairman of the Supervisory Board of the Otto Group, has accepted responsibility and shown great commitment for decades, thus establishing a company tradition.

• “Profitability and sustainability go hand in hand, economic freedom and responsibility for people and the planet are two sides of the same coin.”


The Otto Group vision

• The Otto Group vision: The Otto Group is a globally active corporate group of retailers and retail-related service providers with successful business concepts that acts responsibly for people and nature.

• Hans-Otto Schrader, CEO Otto Group, shows in his daily work, that responsibility is more than a phrase for the Otto Group.


Mission – the power of responsibility

The mission is the corporate strategic cornerstone, reflecting what the Otto Group stands for. It provides a common framework for action, calling on each employee to get involved in the fields of sustainability, profitability, innovation and diversity.


Mission – the four values of the Otto Group

ProfitabilityWe are responsible for the profitability of the Otto Group. Because it is the basis of everything we do.

InnovationWe are responsible for driving the development of the group forward for the long term – with an emphasis on high-powered innovation.

DiversityWe are responsible for providing our customers and the market with outstanding products and independent concepts.

SustainabilityWe are responsible for encountering customers, employees, partners, society and nature with great respect.


3. Business segments overview


Business segment Multichannel Retail

Successful across all channels

Catalogue business, e-commerce and over-the-counter retail constitute the three pillars of the Otto Group Multichannel Retail segment.

The growth engine e-commerce is the strongest sales channel.


Otto GroupOnline revenues

worldwide

Otto GroupOnline revenues

Germany

6.5 bn Euros

+ 300 millioneuros

+ 200millioneuros

4.2 bn Euros

+5.1% +5.1 %

Business segment Multichannel RetailGrowth engine e-commerce


North America

South America AsiaEurope

Russia

Germany

Majority Shareholdings

of Otto Group

Minority shareholdings

of Otto Group

Business segment Multichannel RetailOtto Group globally successful in e-commerce


The Otto Group …

• Is the world‘s second-largest online retailer (B2C).

• Is Europe‘s biggest online retailer for fashion and lifestyle (B2C).

• Realises with its more than 100 online platforms 65 per cent of all earnings in the Multichannel Retail segment.

Business segment Multichannel RetailTremendous success in e-commerce


Financial Services segment

The Financial Services segment comprises the Group-wide offer of international financial services provided by Otto Group companies. Retail-related products and services including consumer credit, liquidity management and payment are the core focus areas.


Financial Services segmentRevenue in the Financial Services segment in million euros

683683644644

2013/14 2014/15


Services segment

Services around the globe:

• Through its companies in the Services segment, the Otto Group positions itself as the global enabler for the entire commercial services portfolio, including purchasing, quality assurance and delivery.

• This segment is mainly subsumed under the umbrella brand of Hermes.


Services – the umbrella brand Hermes

• Developing, procuring and delivering custom-made products, entire collections and own brands.

• Quality assurance

Sourcing & Product

Hermes-OTTO International,Hermes Hansecontrol

• Developing, procuring and delivering custom-made products, entire collections and own brands.

• Quality assurance

Sourcing & Product

Hermes-OTTO International,Hermes Hansecontrol

• Transports• Costums clearance

Transport logistics

Hermes Transport Logistik

• Transports• Costums clearance

Transport logistics

Hermes Transport Logistik

• Services along the entire flow of goods

Fulfilment

Hermes Fulfilment,Hermes NexTec

• Services along the entire flow of goods

Fulfilment

Hermes Fulfilment,Hermes NexTec

• Parcel service, cross-border transport in Europe.

• Delivery and assembly of furniture and large appliances.

Distribution

Hermes Logistik, Hermes EinrichtungsService• Parcel service, cross-border

transport in Europe. • Delivery and assembly of

furniture and large appliances.

Distribution

Hermes Logistik, Hermes EinrichtungsService


Services segmentRevenue in services segment in million euros

1,3011,3011,4951,495

2013/14 2014/15


4. Sustainability at the Otto Group


Sustainability as guiding principle of corporate culture

29

• Corporate responsibility is an integral part of the Otto Group Vision.

• Responsibility for sustainability has been elevated to chief executive level.

• The CR Board provides a common reference for the strategic alignment of corporate responsibility within the Otto Group.


Otto Group – sustainability is firmly anchored

30

Systematic CR managementestablished

Binding Code of Conduct

Otto Group publishesfirst sustainability report in the trading segment

Ambitious climate strategy –Reduction of CO2 emissions

Environmental protection declared as a corporate target

Introduction of CO2 controlling at Hermes

OTTO is the first retail company worldwide with an environmental management system in accordance with ISO 14001

BSCI (business-driven initiative for social standards) established on the initiative of the Otto Group

Introduction of theCR Strategy 2020 with five major sub-strategies

1986 1990 1994 1996 1997 2000 2004 2007 2012 2014

Award winning„impACT“ processmakes sustainabilitymanagement morefact-based

Performance-based Management Board remuneration is linked to achievement of CR goals


CR Strategy 2020

CR-Strategy 2020 of the Otto GroupSustainable development of the business model

• 100% sustai-nable cotton

• 100% FSC®-cert. furniture

• 50% FSC®-certified paper

CR incentives: Since 2014/15 the degree of achievement of CR targets is linked to the compensation of the Group’s Executive Board

Textile Strategy

Furniture Strategy

Paper Strategy

• 100% integration of suppliers in the SocialProgramme

Final production

Raw materials& processing

• -50% CO2

Climate Strategy

Trade

• Decentralisedactivities of Otto group companies

Customer

• Foundations

• Social commitment of Otto Group companies

Society

• Further education

• Compatibility of family and work

• Health management

Employees

Social Programme


„impACT“ – Sustainability Management ProcessAssessing environmental and social impacts. Acting sustainably.

Measuring and evaluating the environmental and social impacts along the entire value chain

to control and influence adverse effects and risks.

Every two years the materiality analysis will be carried out to verify the measures

in terms of their contribution to reducing the environmental and social impacts and to

develop new measures.

Review

Every two years the materiality analysis will be carried out to verify the measures

in terms of their contribution to reducing the environmental and social impacts and to

develop new measures.

ReviewMateriality Analysis

Quantitative and qualitative assessment of the environmental and social impacts of the Otto Group

business operations to identify key topics.

Step 1

Materiality Analysis

Quantitative and qualitative assessment of the environmental and social impacts of the Otto Group

business operations to identify key topics.

Step 1

Developing Measures

Developing measures for key topics and evaluating these according to their

potential to reduce negative impacts, the benefits for the Otto

Group and the efforts required for implementation.

Step 2

Developing Measures

Developing measures for key topics and evaluating these according to their

potential to reduce negative impacts, the benefits for the Otto

Group and the efforts required for implementation.

Step 2

Implementing Measures

Implementing the most effective and efficient measures under the umbrella of the CR strategy 2020, such

as the climate strategy with a reduction target of 50% CO2 until 2020.

Step 3

Implementing Measures

Implementing the most effective and efficient measures under the umbrella of the CR strategy 2020, such

as the climate strategy with a reduction target of 50% CO2 until 2020.

Step 3

Target


5. The Otto Group as employer


E-recruiting – looking for talentwww.ottogroup.com/careers

• Breaking new ground in the “war for talent”.

• Recruiting excellently trained junior staff through social networks.

• Video -supported applicant interviews via Skype.


• School leavers are offered a wide range of commercial, technical and business vocational-training courses.

• Besides direct entry for graduates, the Otto Group also offers trainee programmes for university graduates.

• The Otto Group offers its employees continuing professional development courses – with a focus on expanding professional skills and their own personality.

Education and training at a high level


Otto Group university cooperations

• The Otto Group supports young people already during the job orientation stage, cooperating with colleges and universities.

• The cooperations offer students an opportunity to link theoretical and practical work while still at university.

• The Otto Group offers future executives in-service training through a cooperation with the Leuphana University in Lüneburg.


Success through passion

• The Otto Group creates a job environment promoting innovative ideas, diversity and equal opportunities while providing ample room for development and dialogue.

• To ensure that employees can realise their full potential, the Otto group provides both educational training and systematic health management.

• Flexible working hour models help to establish a reasonable work-life balance.


6. E-commerce strategy of the Otto Group


6. E-commerce strategy of the Otto GroupThe four pillars of the strategy

Multichannel-Retail

Transform

Financial Services & Services

Internet Pure Player

Venture Capital

Participate Create Venture


E-commerce strategy of the Otto GroupTransform: Consistent further development to e-driven Companies

• Companies such as OTTO , SportScheck , Baurand Bonprix , which have their origin in the distance or stationary trade are evolving into e-driven companies.

• Expansion of mobile activities , the fields ConnectedRetail, Business Intelligence and custom softwaredevelopment are important tools in thetransformation.


E-commerce strategy of the Otto Group Participate: Via our financial services and services we benefit from the global e-commerce boom

• The Otto Group covers the entire value chain of trade.

• That puts us in a unique position to benefit from the e-commerce boom with our service offerings in areas such as logistics, financial services and payment, Big Data and Web -Enabling.


E-Commerce-Strategie der Otto GroupCreate: Ausbau der Internet Pure Player

• Die Otto Group betreibt weltweit über 100 Online-Shops und erreicht darüber verschiedene Zielgruppen. Dazu gehören unter anderem: mytoys.de (Familie & Kind), swimwear365.co.uk (Bademoden) und aboutyou.de (junge Mode).

• Über unsere Internet Pure Player gewinnen wir zusätzliche Erkenntnisse, die wir in die Weiterentwicklung unserer Multichannel-Aktivitäten einfließen lassen.


E-commerce strategy of the Otto Group Venture: Building promising business models

• The Otto Group is investing in promising start- ups via the subsidiaries e.ventures and Project A since 2008.

• For the participation in new business concepts , the Otto Group has put aside a three-digit million euro amount.


Contact

Otto (GmbH & Co KG) Thomas VoigtCorporate CommunicationsWerner-Otto-Str. 1-7 22179 HamburgGermany

Phone: +49 40 - 6461 - 4010Fax: +49 40 - 6461 - 4490

www.ottogroup.com


Thank you for your attention!

Otto Group company presentation 2015

Business

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finance otto group

otto group hansotto

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spokesman otto

otto versand

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