V.f. Corporation · NYSE:VFC
V.f — Merger or Acquisition (November 2020)
24 slides from V.f's merger presentation, Nov 9, 2020
Slide 1: ILA AS 202.10)
ILA AS 202.10)
Slide 2: Safe harbor statement
Safe harbor statement Certain statements included in this presentation are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several ris
Slide 3: Portfolio transformation continues
Portfolio transformation continues 2000 2004 2007 2009 2011 2016 2017 2018 2019 2020 Occupational Licensed Sports Work Group (LSG), incl. (in progress) Intimates business including the Vanity Fair brand Acquisitions Divestitures Spin-Off
Slide 4: Active portfolio management: top strategic priority
Active portfolio management: top strategic priority DRIVE AND ELEVATE DISTORT TO OPTIMIZE OUR DIRECT ASIA PORTFOLIO CHANNELS ACCELERATE CONSUMER-MINDED, RETAIL- CENTRIC, HYPER-DIGITAL BUSINESS MODEL TRANSFORMATION
Slide 5: Streetwear is an attractive portfolio adjacency
Streetwear is an attractive portfolio adjacency NEW BUSI NESS $500B Total MO DEL S PERF O RMANCE Addressable F O O T W EAR Market for VF ST REET W EAR ACTIVE & EXPERI ENCES ATHLEISURE W O RK I NSPI RED WORKWEAR HEALT H & W EL L NESS OUTDOOR & PACKS OUTERWEAR * Total Addressable Markets VF Core Addre
Slide 6: Streetwear is structurally attractive
Streetwear is structurally attractive Market Market Consumer Consumer Global Size Growth Trends Demographics Relevance ~$50 billion Double-digit Casualization, Young, Creative global opportunity CAGR community & diverse & self-expression social influence inclusive Sources: VF Analysis and Third-Part
Slide 7: The Supreme brand is a strong fit within VF given street-inspired aspects
The Supreme ® brand is a strong fit within VF given the street-inspired aspects of VF’s existing brands STREET INSPIRED CORE STREETWEAR Youth Culture Lifestyle SALES ~$1,900M ~$500M ~$300M ~$300M ~$3.0B >$500M GROWTH PROFILE +12% to +13% +8% to +10% Notes: Based upon management estimates; sales repr
Slide 8: VF brands and the Supreme brand have a long history of collaboration
VF brands and the Supreme ® brand have a long history of collaboration since 1996 since 2006 since 2007
Slide 9: The Supreme brand aligns well with VF's portfolio lenses
The Supreme ® brand aligns well with VF’s portfolio lenses Streetwear is an attractive opportunity space that intersects with VF’s other high growth segments Streetwear provides deeper access to attractive consumer segments globally Financial Strategic Supreme® is an authentic, cultural lifest
Slide 10: Compelling value creation opportunity
Compelling value creation opportunity Accelerates VF’s consumer- Benefits from VF’s strong regional minded, retail-centric, hyper-digital platforms; decades-long operating transformation through unique experience in international markets and agile business model Opportunity to access and lever
Slide 11: Business overview
business overview
Slide 12: Supreme brand overview
Supreme ® brand overview in April 1994, Supreme® opened its doors on Lafayette Street in downtown Manhattan and became the home of New York City skate culture. At its core was a group of neighborhood kids, New York skaters and local artists who became the store’s staff, crew and customers. while it
Slide 13: Strong brand ethos and values
Strong brand ethos and values uncompromising regular creative direction & disruption and skate focus brand reinvention disciplined use authentic of iconic assets celebration & consistency of youth culture
Slide 14: Supreme business profile
Supreme ® business profile >$500M revenue* Unique and agile business model; 100% DTC with strong full price sell through 12 retail stores across the US, EMEA and Japan; Digital >60% of total revenue* Global presence with large international growth opportunity Highly attractive gross and op
Slide 15: Supreme revenue allocation
Supreme revenue allocation ® channel region category DTC: All Other Stores International DTC: US Digital Apparel For FY ended 1/31/2020
Slide 16: Financial profile comparison
Financial profile comparison SALES GROWTH PROFILE* +7-8% +12-13% +8%-10% GROSS 55.5% >60% >60% MARGIN** OPERATING MARGIN** 12.8% >23% >20% *5 year CAGR target through fiscal 2024 **Gross Margin and Operating Margin for fiscal 2020 on an adjusted basis; refer to fiscal 2020 earnings release for detai
Slide 17: Growth opportunity
growth opportunity
Slide 18: Supreme revenue growth evolution
Supreme ® revenue growth evolution $1B opportunity over time 8-10% sustainable growth rate >$500M ~$200M
Slide 19: Transaction summary
transaction summary
Slide 20: Transaction summary
Transaction summary $2.1 billion enterprise value PURCHASE PRICE Additional earnout potential based on revenue growth and gross margin performance VA L U AT I O N M U LT I P L E Less than 15x EV/EBITDA Founder and senior leadership team will be retained MANAGEMENT RETENTION Subject to certain condit
Slide 21: FY'21 VF cash evolution
FY’21 VF cash evolution Net proceeds from Occupational Work divestiture incremental to liquidity estimates below >$0.7B ~($0.4B) ~($2.0B) $2.7B $0.5B >$1.5B Total Liquidity1 $4.9B > $3.0B* Expect net leverage below 3.0x by end of Net Leverage2 ~ 3.3x ~ 4.0x FY’22 *Includes anticipated revolver capac
Slide 22: FY'24 VF plan TSR
FY’24 VF plan TSR > +16% OPTIONALITY +14% to +16% +2% +2% +3% to +4% +7% to +8% REVENUE SHARE O R G A N I C T O TA L P/E T O TA L MARGIN DIVIDEND SHAREHOLDER M & A SHAREHOLDER GROWTH E X PA N S I O N REPURCHASE YIELD M U LT I P L E RETURN RETURN A D J U S T E D E P S G R O W T H : + 1 2 % TO + 1 4 %
Slide 23: Summary value drivers
Summary value drivers Streetwear is a Supreme® is an Supreme® aligns well The Supreme® brand large market with authentic, cultural with core pillars of VF’s elevates VF’s growth, attractive growth lifestyle brand with a strategy; digitally-led, profitability and cash characteristics and loyal consum
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