Fossil Group, Inc. · NASDAQ:FOSL
Fossil — Investor Presentation (November 2005)
18 slides from Fossil's investor presentation, Nov 1, 2005
Slide 1: Fossil
vee # Fossit ©
Slide 2: Safe Harbor Statement
7 In 6¢ Ce Coe G Safe Harbor Statement © e This presentation contains forward-looking information. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause act
Slide 3: Watch Industry Overview
Ds Watch Industry Overview aN Coe e - Global watch industry estimated at $20 to $30 billion —U.S. watch market estimated at one-third of the world — International watch market estimated at two-thirds * Major European markets include UK, Germany, France and Italy * Major Asian markets include Japan,
Slide 4: Investment Highlights
Investment Highlights - Global leader in retail watch market - Portfolio of global brands that maximizes growth potential - Proven track record for attracting and expanding brands E)zoniac - Vast infrastructure that provides for future growth in watches and related categories - Strong cash flow
Slide 5: Company Overview
Company Overview «7 v 2 ¢ Global leader in fashion watch category DKNY 3 — $960 million in 2004 revenue e Competitive advantages DIESEL — Design — Sourcing — Distribution MICHAEL MICHAEL KORS ¢ Portfolio approach maximizes growth potential Columbia EMPOROWARMAN' = BURBERRY =MARC JACOBS
Slide 6: Revenue Breakdown
Revenue Breakdown © AS 2004 Total Revenue by Geography US Wholesale 419% Retail 14% 13% 2004 Total Revenue by Product Category Watches 69% Other 4% Jewelry 5% Accessories 22% aa
Slide 7: Sales Channels
% Sales Channels C\lp ¢ Department stores and specialty retail stores in over 90 countries worldwide e Network of approximately 52 independent distributors - potential acquisition targets ¢ Company-owned and independently-owned FOSSIL retail stores and shop-in-shops in certain international markets
Slide 8: Jewelry
6 Jewelry t\Glp New business initiative with solid growth prospects Advantages - Strong margins - Similar distribution to watches - Global expansion - Leverage strength of Fossil in Germany by expanding into additional markets - Expand infrastructure to support additional brand opportunities
Slide 9: Accessories
Accessories AG s Creating scale through product extension Advantages - A top performer in department and mid-tier stores - Superior design Key initiatives - Leverage design capabilities by introducing additional brands and categories - Longer term, develop category outside the U.S.
Slide 10: Retail Stores
Retail Stores (total of 146 at the end Q2 2005) 64 57 12
Slide 11: Retail
Retail Powerful Retail Platform - Domestic 121 and 25 international - Opportunity to utilize cash flow to grow retail platform, generating strong ROI Advantages - Test and react - Marketing - Outlets - profitable way to close out styles Key initiatives - Test Modern Watch Company format - Drive prof
Slide 12: Key Sales Growth Initiatives
> truly spre eLoiyane JIS Ce Key Sales Growth Initiatives A Fashion watches worldwide Jewelry Swiss watches Accessories Retail stores pied. é
Slide 13: Net Sales and Operating Income Growth
Net Sales and Operating Income Growth Net Sales (in millions)
Slide 14: 2004 Financial Accomplishments
2004 Financial Accomplishments: A Ge o\le Sales growth of 23% to $960 million ~~. Ms Gross margin improved 190 basis points to 53.1% Operating margin up 60 basis points to 14.7% Return on equity of 19% Cash on hand of over $2.50 per share
Slide 15: Margin Expansion Strategy
Margin Expansion Strategy: « Leverage infrastructure investments — Dallas distribution —Consolidation of European distribution — SAP implementations — New initiative costs (jewelry & Swiss watches) ¢ Increasing international and retail store sales ¢ Increase new initiative sales —Jewelry — Swiss wat
Slide 16: Long-Term Drivers of Earnings
Long-Term Drivers of Earnings. 2 Growth we e * Organic 10% to 13% + New business 5% to 7% + Exceeds revenue growth due to gross margin improvement * Operating leverage on SG&A structure zat ised
Slide 17: Investment Highlights
Investment Highlights Global leader in $20 to $30 billion retail watch t market Portfolio of global brands that maximizes growth Proven track record for attracting and expanding brands Vast infrastructure that provides for future growth in watches and related categories Strong cash flow
Slide 18: Searchable text section of graphics
Searchable text section of graphics shown above [G RAPHIC] FOSSIL [LOGO] Sa fe Harbor Statement [GRAPHIC] This presentation contains forward-looking information. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such for