The Body Shop International

Historical

Assumptions 1999 2000

Turnover growth (%) 0.09

Cogs/Sales 0.42 0.40
Ordinary op exp/sales 0.50 0.50
Exceptional op exp/sales 0.03 0.00
Restructuring costs (millions of GBP) 16.6 2.7
Interest rate
Tax rate/profit before tax 2.35 0.36
Dividends (millions GBP) 10.90 10.90
Accounts receivable/sales 0.09 0.09
Inventories/sales 0.13 0.14
Other current assets/sales 0.04 0.05
Net fixed assets (millions GBP) 87.8 104.7
Other assets (millions GBP) 0 6
Accounts payable/sales 0.04 0.06
Taxes payable/sales 0.04 0.04
Accruals/sales 0.04 0.05
Other current liabilities/sales 0.07 0.04
Long-term liabilities 28 36.7
Deferred taxes/sales 0.01 0.00
Starting Equity 114.3

Gross profit/sales 0.58 0.60

Operating profit (EBIT)/sales 0.57 0.51
Operating profit (EBIT) growth (%) -0.02
Profit before tax (EBT)/sales 0.01 0.09
Profit before tax (EBT) growth (%) 7.47
Net profit/sales 0.06
Net profit growth (%) -5.00

Receivable days (collection) 32

Inventory days 116
Acc. payable days 47

Historical and Proforma Financial Statements

 Fiscal Year Ended Feb
(millions of GB

Income Statement 1999 2000

Turnover 303.7 330.1

Cost of sales 127.7 130.9
Gross profit 176.0 199.2

Operating Expenses:
Ordinary 151.4 166.2
Exceptional 4.5 0.0
Restructuring costs 16.6 2.7
Net interest expense (income) 0.1 1.5
Profit before tax 3.4 28.8
Tax expense 8 10.4
Profit (loss)after tax -4.6 18.4

Ordinary dividends 10.9 10.9

Profit (loss) retained -15.5 7.5

Fiscal Year Ended Fe

(millions of GB

Balance Sheet 1999 2000

Assets
Cash 34 19.2
Accounts receivable 27.8 30.3
Inventories 38.6 44.7
Other current assets 12.5 15.6
Net fixed assets 87.8 104.7
Other assets 0 6
Total assets 200.7 220.5

Liabilities and equity

Accounts payable 13 20.5
Taxes payable 11.3 11.7
Accruals 10.8 15.6
Overdrafts (debt) 0 0.3
Other current liabilities 21.6 13.3
Long-term liabilities 28 36.7
Other liabilities 1.7 1
Shareholders' equity 114.3 121.4
Total liabilities and equity 200.7 220.5

Trial assets
Trial liabilities + equity
Plug: Debt (Excess Cash)

(1) Exceptional costs in 2001 included redundancy costs ($4.6million), costs of supply chain development
assets and goodwill ($4.2million). The exceptional costs of $4.5 million in 1999 were associated with closi
review of the remaining shops in the US.
(2) Restructuring costs in 2001 and 2000 relate to the sale of manufacturing plants in Littlehampton, Engla
Restructuring cost in 1999 arose from the realignment of the management structure of the business in the
(3) Other assets in 2001 and 2000 represented receivables related to the sale of the company's Littleham
(4) Other liabilities included mostly deferred taxes.
orical Projected

2001 2002e 2003e 2004e

0.13 0.13 0.13 0.13

0.40 0.38 0.38 0.38
0.52 0.50 0.50 0.50
0.06 0.00 0.00 0.00
1.0 0.00 0.00 0.00
0.06 0.06 0.06
0.27 0.30 0.30 0.30
10.90 10.90 10.90 10.90
0.08 0.11 0.11 0.11
0.14 0.16 0.16 0.16
0.05 0.05 0.05 0.05
110.6 110.60 110.60 110.60
6.7 0.00 0.00 0.00
0.03 0.16 0.16 0.16
0.02 0.02 0.02 0.02
0.03 0.04 0.04 0.04
0.05 0.06 0.06 0.06
61.2 0.00 0.00 0.00
0.00 0.00 0.00 0.00
121.4 121.60 147.03 178.54

0.60 0.62 0.62 0.62

0.56 0.50 0.50 0.50
0.23 0.02 0.13 0.13
0.03 0.12 0.13 0.13
-0.56 3.05 0.17 0.16
0.02 0.09 0.09 0.09
-0.49 2.91 0.17 0.16

30 33 36 31
118 135 136 120
38 89 136 120
Fiscal Year Ended February 28
(millions of GBP)

2001 2002e 2003e 2004e

374.1 422.7 477.7 539.8

149.0 160.6 181.5 205.1
225.1 262.1 296.2 334.7

195.7 211.4 238.8 269.9

11.2 0.0 0.0 0.0
1.0 0.0 0.0 0.0
4.4 (1.2) (3.3) (5.8)
12.8 51.9 60.6 70.6
3.5 15.6 18.2 21.2
9.3 36.3 42.4 49.4

10.9 10.90 10.90 10.90

-1.6 25.4 31.5 38.5

Fiscal Year Ended February 28

(millions of GBP)

2001 2002e 2003e 2004e

13.7 19.5 54.3 96.5

30.3 46.5 46.5 46.5
51.3 67.6 67.6 67.6
17.5 21.1 21.1 21.1
110.6 110.6 110.6 110.6
6.7 0.0 0.0 0.0
230.1 265.4 300.2 342.4

10.7 67.6 67.6 67.6

7.1 8.5 8.5 8.5
11.5 16.9 16.9 16.9
0.7 0.0 0.0 0.0
 16.9 25.4 28.7 32.4
61.2 0.0 0.0 0.0
0.4 0.0 0.0 0.0
121.6 147.0 178.5 217.0
230.1 265.4 300.2 342.4

245.9 245.9 245.9

265.4 300.2 342.4
(19.5) (54.3) (96.5)

n), costs of supply chain development ($2.4 million) and impairment of fixed
on in 1999 were associated with closing unprofitable shops and an impairment

acturing plants in Littlehampton, England, and to associated reorganization costs.

ement structure of the business in the US and the UK.
o the sale of the company's Littlehampton manufacuring plant.
 Sensitivity Analysis

COGS/sales Debt Ex. Cash

0.00 19.52
0.35
0.38
0.40
0.42
0.44
0.45
0.48

COGS/sales Sales @ GBP 500 million in 2002

0.00 23.07
0.35 0.00 34.03
0.38 0.00 23.07
0.40 0.00 15.76
0.42 0.00 8.45
0.44 0.00 1.15
0.45 2.51 0.00
0.48 13.47 0.00

Inventory/Sales Debt Ex. Cash Avg. days

0.0 19.5
0.10 106
0.16 135
0.18 145
0.22 164

Accounts receivable/sales
Debt Ex. Cash Avg. days
0.0 19.5
0.07 26
0.11 33
0.15 40
0.20 50

Fixed Assets Debt Ex. Cash

0.00 19.52
 110.6
210.6

Operating expenses/sales
Debt Ex. Cash
0.00 19.52
0.50
0.52
0.55
0.58
0.60

Acc. payable/sales Debt Ex. Cash

0.0 19.5
0.16
0.12
0.10
0.05
0.03

Dividends
Debt Ex. Cash
0.0 19.5
10.9
21.8