Crocs, Inc. · NASDAQ:CROX
Crocs — 31st Annual ROTH Conference (March 2019)
24 slides from Crocs's conference presentation, Mar 19, 2019
Slide 1: Investor Presentation March 2019
INVESTOR PRESENTATION MARCH 2019
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT Some information provided in this document will be forward-looking, and accordingly, is subject to the Safe Harbor provisions of the federal securities law. These statements include, but are not limited to, statements regarding future revenues, gross margin, selling, genera
Slide 3: Agenda
AGENDA • Positioned for Growth………………………………………………………………4 • Financial Information………………………………………………………………15 • Key Investment Considerations…………………………………………....…….19 • Appendix……………………………………………………………………………21 3
Slide 4: Positioned for Growth
POSITIONED FOR GROWTH crocs
Slide 5: A Powerful Brand Positioned for Global Growth
A POWERFUL BRAND POSITIONED FOR GLOBAL GROWTH Scale Brand: Iconic Product: Democratic Brand: Top 10 For men, non-athletic The Classic Clog women, global footwear brand and kids Globally Recognized: Global Reach: World Class Talent: ~65% Global Aided Brand Awareness Distributed in Driving product and
Slide 6: Repositioned for Long-Term Success
REPOSITIONED FOR LONG-TERM SUCCESS 1 2 3 Simplify the Business to Improve the Quality of Generate Sustainable, Reduce Costs Revenues Profitable Revenue Growth Heavy Lifting Substantially Revenue Base Substantially Confident in Pathway to Complete More Profitable Growth Confident in Pathway to Growth
Slide 7: Sustainable and Profitable Growth Plan
SUSTAINABLE AND PROFITABLE GROWTH PLAN Product Channel Region 1 2 3 • Clogs: Innovate & grow • E-commerce: double digit • Asia: largest long-term clog relevance growth continues growth potential • Sandals: Significant long • Wholesale: greatest • Americas: strong growth term growth potential growth
Slide 8: Grow Clog Relevance
GROW CLOG RELEVANCE • Market leader in $4B* growing global category • Grew clog revenues by 13% in 2018 to ~55% of footwear sales • Strategic goal: drive Clog Relevance by ‒ Impactful collaborations ‒ Trend right colors and graphics ‒ Relevant licenses ‒ Personalization with expanded Jibbitz charms
Slide 9: Sandals: Significant Long-Term Growth Opportunity
SANDALS: SIGNIFICANT LONG-TERM GROWTH OPPORTUNITY Essential, e.g. CrocBand Flip: • $23B* fragmented global casual sandal** market with no clear market leader • Grew sandal revenues by 19% in 2018 to ~23% of footwear sales Active, e.g. Swiftwater: ‒ On top of 26.4% growth in 2017 • A significant long
Slide 10: Our Growth Will Be Ignited by Powerful Global Social & Digital Marketing
OUR GROWTH WILL BE IGNITED BY POWERFUL GLOBAL SOCIAL & DIGITAL MARKETING BRAND AMBASSADORS • Evolving Come As You Are campaign to incorporate impactful local brand ambassadors and influencer activations • Focusing on driving clog relevance and sandal awareness • Expanding digital reach and engagemen
Slide 11: Double Digit E-commerce Growth Continues
DOUBLE DIGIT E-COMMERCE GROWTH CONTINUES Primary focus on company owned e-commerce and controlling E-COMMERCE REVENUE brand presence on key marketplaces • E-commerce: Crocs operated e-commerce sites ‒ Fast growing distribution channel driven by global consumer adoption and more effective digital mar
Slide 12: E-tail and Distributors Drive Wholesale
E-TAIL AND DISTRIBUTORS DRIVE WHOLESALE • E-tailers and distributors represent approximately 2018 DISTRIBUTOR FOOTPRINT half of the global wholesale business • Multibrand e-tailers are gaining share globally ‒ Crocs: achieving consistent double-digit e-tail growth ‒ Elevating the brand representatio
Slide 13: Prioritize Outlet Growth Within Retail
PRIORITIZE OUTLET GROWTH WITHIN RETAIL • Retail fleet has been rightsized and majority is STORE COUNT now focused on outlet stores 585 559 558 • Outlet merchandising strategy has been repositioned to majority “Built for Outlet” 447 assortments 383 • In Americas, outlet fleet is well positioned and f
Slide 14: Asia Is Largest Growth Opportunity
ASIA IS LARGEST GROWTH OPPORTUNITY Asia – Most opportunity for growth • Increase brand recognition GLOBAL CLOG & SANDAL FOCUS • Optimize China opportunity • Strong e-commerce growth and rapid marketplace expansion • Multichannel growth in direct markets: China, India, Japan and South Korea • Strong
Slide 15: Financial Information
FINANCIAL INFORMATION crocs
Slide 16: 2018 - A Very Successful Year
2018 - A VERY SUCCESSFUL YEAR • Robust revenue growth ‒ Growth of 6.3% despite store closures and business model changes reducing revenues by ~$60M • Improved the quality of revenues ‒ Fewer and narrower promotions and less liquidation • Simplified the business to reduce costs ‒ Right sized our bric
Slide 17: Full Year 2019 Guidance (as of 2/28/19)
FULL YEAR 2019 GUIDANCE (AS OF 2/28/19) • Revenues: Increase 5-7% over $1,088.2M in 2018 ‒ Expecting store closures to reduce revenues by ~$20M and a negative currency impact of ~$20M ‒ Growth estimated at 7%-9% absent impact of store closures • Gross margin ~49.5% vs. 51.5% in 2018; projected decli
Slide 18: 1Q 2019 Financial Guidance (as of 2/28/19)
1Q 2019 FINANCIAL GUIDANCE (AS OF 2/28/19) • Revenues: $280 - $290M vs. $283.1M in 1Q18 ‒ Expecting store closures to reduce revenues by ~$6M and a negative currency impact of ~$10M ‒ Reflects the Easter shift, which results in DTC sales associated with the holiday shifting into Q2, and the impact o
Slide 19: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS 19
Slide 20: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS Successful business transformation will An unmistakable icon recognized A powerful global brand with a drive further increases in shareholder around the world large, democratic consumer base value • Growing revenues and gross margin while reducing SG&A; a sustainable, p
Slide 21: Appendix
APPENDIX crocs
Slide 22: Highlights of Blackstone Deal
HIGHLIGHTS OF BLACKSTONE DEAL • Background: In 2014, Blackstone invested $200M in Crocs Preferred Shares ‒ Earned 6%/$12M dividend annually and a net income allocation in any quarter with positive earnings ‒ Convertible at $14.50/sh into ~13.8M shares of Common Stock. Crocs could only force conversi
Slide 23: Framework for a Double Digit EBIT Margin
FRAMEWORK FOR A DOUBLE DIGIT EBIT MARGIN Drive Double Digit E-commerce and Modest 1 Wholesale Revenue Growth Sustainable Gross Margin in the 2 Low 50% Range Core Molded Product generates high quality revenue SG&A in the Low 40% Range 3 Leverage SG&A over growing revenue base 23
Slide 24: Slide 24