Christoph De Jaeger - C&A

1. Supply Chain Finance
At C&A
2 4 T H O F J A N U A R Y 2 0 1 9
C H R I S T O P H D E J A E G E R

2. 1
Supply Chain Finance at C&A
1. C&A : Company Background
2. Finance and Supply Chain Finance
3. C&A’s Supply Chain
4. Achievements
5. Challenges in the Retail Industry
6. Future

3. 2
Visitors/day in
Europe
3,500,000 globally
stores in Europe
And 1,900 worldwide
(Brazil, China,
Mexico)
year history as a
pioneer in the
fashion industry
employees in Europe
51,000 worldwide
user of organic
cotton in terms
of volume
to launch a GOLD
level Certified TM
Cradle-to-Cradle
garment
countries online
>2,000,000 >1,500
178 >31,000 #1
in the world
1st 20
1. C&A : Company Background

4. 3
Our mission
C&A for everyone
We believe that there is beauty in
every age, shape and size.
We commit to making every woman
look and feel good every day.
Our purpose is to bring out the best in our customers.
1. C&A : Company Background

5. 4
Shop footprint
C&A Europe
Austria
110 stores
Czech Republic
42 stores
Croatia
20 stores
Poland
60 stores
Portugal
33 stores
Romania
38 stores
Serbia
15 stores
Slovakia
16 stores
Slovenia
15 stores
Belgium &
Luxembourg
135 stores
France
165 stores
Germany
460 stores
Hungary
34 stores
Italy
16 stores
Netherlands
122 stores
Spain
87 stores
Switzerland
94 stores
Status Q1 2018
1. C&A : Company Background

6. 5
Fashion with a positive impact
Our sustainability strategy
1. C&A : Company Background

7. 6
Supply Chain Finance at C&A
1. C&A : Company Background
2. Finance and Supply Chain Finance
3. C&A’s Supply Chain
4. Achievements
5. Challenges in the Retail Industry
6. Future

8. 7
2. Finance and Supply Chain Finance
Role of Finance in the Company
The European Finance Department (EFD) envisions to be a trusted business partner and advisor to the
organization providing transparency; visibility; and insights on business performance in order to support
the organization in better decision making in order to achieve its goals.
Overall Mission Statement for the Finance function
Be a trusted, unbiased partner to the business by providing:
Thought Leadership;
Tangible Ideas;
Fact-Based insights;
Simple and cost-effective processes;
With integrity and focused on driving shareholder value.

9. 8
2. Finance and Supply Chain Finance
European Finance Organisation - 2013

10. 9
2. Finance and Supply Chain Finance
European Finance Organisation - Current

11. 1 0
How does Supply Chain Finance support the overall Finance mission Statement ?
Our main goal is to provide business and decision support for the full End-to-End Supply Chain, including
Sourcing, Logistics, Quality,….
The main performance indicator we look at is the improvement of Cost of Goods Sold - often referred to
CCP (Charged Cost Price) within C&A - and its evolution (past and future).
Therefore we broke down CCP in all its aggregating components to analyze the impact of each component
itself. (fabric, logistical expenses, handling costs in the distribution centers, foreign exchange rates, labour,
…)
Simplification, standardization and Business KPI tracking we link to supporting financial analysis.
We provide factual analytics and reporting (ensuring one version of the truth).
2. Finance and Supply Chain Finance
Supply Chain Finance - Mission Statement

12. 1 1
2. Finance and Supply Chain Finance
Supply Chain Finance Triangle
• Product Cost (CCP)
• Logistical Cost
• Supplier’s Cost
• Warehouse Cost
• ….
i.e. Working Capital
• Inventories
• Payment Terms
• …
In our analytics, we take into consideration all elements of the Supply Chain Finance Triangle.
Service
CostCash
• Lead times
• Sustainability
• Quality
• On-Time-Delivery

13. 1 2
Supply Chain Finance at C&A
1. C&A : Company Background
2. Finance and Supply Chain Finance
3. C&A’s Supply Chain
4. Achievements
5. Challenges in the Retail Industry
6. Future

14. 1 3
3. C&A’s Supply Chain
HQ Europe Overseas
HUBs
Asian
Suppliers
European
Stores
Harbour in
Europe
DC Europe
DC
Country
European
Suppliers

15. 1 4
Brussels
Dusseldorf
Istanbul
Karachi
Bangalore
Dhaka
Shanghai
Jakarta
GSM location
Hub
Reporting office
3 Hubs
1. Shanghai
2. Dhaka
3. Bangalore
Phnom Penh
HongKong
headquarters
SPM location
Yangon
3. C&A’s Supply Chain
Presence in Key Production Areas

16. 1 5
In 2010, supply pressures on raw material prices and capacities highlighted C&A’s low ability of
adequately controlling its cost of goods.
A Diagnostic analysis showed that Sourcing at C&A had not developed for 20 years and was
clearly lagging competitor best practices:
• Volume by supplier was fragmented with few suppliers shared across teams.
• Geographic footprint fluctuated dramatically by year.
• Buying teams competed on price and capacity from suppliers.
Economies of scale, leverage in negotiation, and other strategic size advantages were not exploited.
It took 2 years to translate the diagnostic analysis into a multi-year plan which could bridge C&A’s
Supply Chain to market standard and even above.
In the course of 2013, the Supply Chain Finance department was founded and actively involved in the
transformation.
3. C&A’s Supply Chain
Transformation started in 2013

17. 1 6
Focus Areas ?
• Suppliers :
* Supplier performance scorecards were created based on relevant KPI’s (On-time-delivery,
Quality, profit contribution, …). Supplier would get a rating based on their performance.
* Based on supplier performance, suppliers were mapped into a direction (grow, maintain ,
reduce , …-).
* Open Costing Sheets, allowing for transparent cost price negotiation.
* Yearly supplier conference sharing the supply chain strategy and direction.
• Cross-functional and E2E view on processes / issues :
* Bring Logistics/Buying/Sourcing/Finance department at the same table
* Big changes to processes in Supply Chain validated and supported by all departments.
* Common KPI’s defined and targets put in place for all departments.
* Translate commercial collections into relevant product categories which are supplier
relevant
3. C&A’s Supply Chain
Transformation

18. 1 7
Role of Finance
1. Transparant Costing drives better decision making
* Provide a transparent comparison of Cost of Goods sold per piece, bridging from LY to
Actual to Plan and break it down in main components (CCP waterfall).
* Allow for cost comparison between suppliers in different markets, i.e. German
supplier vs Turkish supplier vs Interco supplier
* Show impact of product mix on overall cost of goods sold.
* Introduce a fixed EUR/USD rate for cost of goods sold which is the same in actual
figures and plan figures, aligned with the company’s hedging strategy.
3. C&A’s Supply Chain
Transformation

19. 1 8
Role of Finance
2. Simplification and Standardization
* Introduction Product Lifecycle Management for a more efficient flow of the Design
to Sample process, supported with business case
3. C&A’s Supply Chain
Transformation

20. 1 9
Role of Finance
3. Target Setting + Tracking : What doesn’t get targeted/tracked will not be delivered.
* Pre-season CCP waterfall reflecting macro-economic expectations and saving
initiatives.
* It allows us to have an early view whether cost prices develop in the right direction
and whether overall financial company’s targets are in danger.
3. C&A’s Supply Chain
Transformation

21. 2 0
Role of Finance
3. Target Setting + Tracking : What doesn’t get targeted/tracked will not be delivered.
* Old way of looking at information :
3. C&A’s Supply Chain
Transformation

22. 2 1
Role of Finance
3. Target Setting + Tracking : What doesn’t get targeted/tracked will not be delivered.
* We created a dashboard of relevant Supply Chain KPI’s :
3. C&A’s Supply Chain
Transformation

23. 2 2
Role of Finance
4. Finance at the Strategy table : idea generator, sparring partner and ensuring delivery
3. C&A’s Supply Chain
Transformation

24. 2 3
Delivery
Quality
Product Execution
Sustainability
Profit Contribution
Overall Performance
2013C&A launchedthe SupplierScorecard
3. C&A’s Supply Chain
Example Supplier Performance Scorecard

25. 2 4
Percentagesbasedon units
48%
11%
4% 2% 3%
13%
11%
15%
11% 5%
15%
30%
8%
11%
8%
15%
39%
63%
62%
71%
9% 9% 10% 14% 13%
100%
2012 2013 2014 2015 2016
Unacceptable
Need improvement
Gold
Silver
Bronze
3. C&A’s Supply Chain
Example Supplier Performance Rating

26. 2 5
Benefits of the Supplier Matrix
Supplier Matrix
▪ Rewarding strong performing suppliers
with increased capacity commitments
▪ Reducing commitments on struggling or
non-performing suppliers
▪ Driving improvements in the supplier
base
▪ Systematically evaluating and
managing risks
Provide seasonal supplier-specific directional placements for
Merchandising (grow, maintain, reduce, add, exit)
SupplierReportingand Matrixwill drive directionsettingper supplier(grow, maintain,reduce,exit)
3. C&A’s Supply Chain
Example Supplier Direction

27. 2 6
Nich
e
Trans-
actional
Core
Strategic
Offer valueadd in unique and
differentiated products
“Classic” supplier relationship while
providing flexible capacity in the
medium-term
Collaborative long-termbusiness
relationship where partners are
committed to a high level of
performance and shared benefits in
economies of scale
Long-termstrategicpartnership built
on trust and proven performance
where partners share the benefits of
increased efficiencies and
economies of scale
Shared values and common business objectives
Target distribution
% qty
5
25
30
40
NICHE&
TRANSACTIONAL
SUPPLIERS: Will
continue to receive
seasonal capacity
assignments
CORE SUPPLIERS:
Will receive an annual
one year capacity and
business plan
STRATEGIC
SUPPLIERS:
Will receive and provide
input into a three year
business plan
Supplier engagement level definitions
3. C&A’s Supply Chain
Example Supplier Mapping

28. 2 7
Supply Chain Finance at C&A
1. C&A : Company Background
2. Finance and Supply Chain Finance
3. C&A’s Supply Chain
4. Achievements
5. Challenges in the Retail Industry
6. Future

29. 2 8
4. Achievements
300Mio EUR Savings in 2013 - 2016
In 4 years time more than 300 Mio EUR savings achieved
This enabled C&A to offset for the adverse impact of EUR/USD and cost inflation.

30. 2 9
4. Achievements
350Mio EUR improvement in Working Capital through extension of Payment Terms with
Suppliers
In 2013 almost immediate payment of suppliers in all markets gradually moved to 75 days for all suppliers
in 2018.
Key enabler to convince suppliers is a successful Supplier Financing Program with Deutsche Bank (60%
of our suppliers participate), allowing suppliers to receive immediate payment at favorable discount rate.

31. 3 0
540
424 401
348 314 273
210 198
409
302
268
231
190
146
135 132
0
100
200
300
400
500
600
700
800
900
1,000
2010 2011 2012 2013 2014 2015 2016 2017
INDIRECT
DIRECT
Total
727 Total
670
Total
505 Total
420
Supplier base was reduced by 64% from 2010 – 2017
Total
950
Total
580
4. Achievements
Number of C&A Europe Suppliers
Total
346
80% of direct business for 60 % of suppliers
20% of indirect business for 40% of suppliers
Total
331

32. 3 1
4. Achievements
The sourcing footprint shows an increasing share of countries with GSP status (duty free)
36.0%
31.7%
27.8%
25.5%
4.2%
3.8%
3.8%
3.4%
11.8%
13.2%
10.5%
10.4%
2.6%
2.3%
1.2%
0.6%
19.1%
20.6%
24.3%
26.7%
7.7%
8.0%
6.5%
7.1%
7.2%
7.2%
9.5%
8.3%
2.1%
2.9%
2.7%
3.3%
3.6%
2.5%
5.1%
5.2%
5.7%
7.9%
8.6%
9.5%
0% 20% 40% 60% 80% 100%
2017
2016
2015
2014
Bangladesh
Pakistan
Cambodia
Other GSP
P.R. China
India
Turkey
Indonesia
Eastern EU
Others
43.4%
51.0%
GSP
Figures in % based on CCP in Euro
GSP

33. 3 2
Supply Chain Finance at C&A
1. C&A : Company Background
2. Finance and Supply Chain Finance
3. C&A’s Supply Chain
4. Achievements
5. Challenges in the Retail Industry
6. Future

34. 3 3
3.5
4.0
4.5
5.0
5.5
6.0
(%ofTotalExpenditure)
Household Expenditure on Clothing &
Footwear
(as % of Total Expenditure)
2008 2009 2010 2011 2012 2013 2014 2015
Source: Eurostat
Pureplay online
Multinational value
retailers
Supermarkets &
Discounters
EU3 retail market value
(EUR billion)
EU3 countries are Germany,Netherlands, Belgium
Source: Consumer Insights & Analytics (CIA) – GfK Consumer Panels | May 2018
C&A market
share
Update with Plan
presentation + add
one slide on online
5. Challenges in the Retail Industry

35. 3 4
Do you have this in my size?
No sorry, out of stock.
When will it be available again?
Maybe next week?
Is it in a store nearby?
Could be but not sure...
5. Challenges in the Retail Industry

36. Thank You!