Nu Skin Enterprises, Inc. · NYSE:NUS
Nu Skin Enterprises — Avondale Direct Selling Investor Day 2005
24 slides from Nu Skin Enterprises's conference presentation, May 24, 2005
Slide 1: Avondale Direct Selling Investor Day
Avondale Direct Selling Investor Day BOSTON - MAY 24, 2005 f Nu Skin EnTerprises™ Live Better, Longer
Slide 2: Direct Selling Industry Overview
Direct Selling Industry Overview * $93 billion industry globally* Global Direct Selling * Over 170 U.S. companies * 5 Main areas (Home, Personal Care, #100 _ Services, Wellness, Leisure) $80 —~ -« * Healthy margins, strong cash flow, low *° | B | capital requirements $40 | $20 _f_5 _s 8 L * Companie
Slide 3: Nu Skin Enterprises Overview
Nu Skin Enterprises Overview Background ¢ Established in 1984 (IPO 1996) ¢ Operations in 40 markets ¢ Premium-quality products ¢ Leadership-directed comp plan ¢ Tradition of innovation in personal care and nutrition
Slide 4: Financial Overview: 2001-2004 Revenue
Financial Overview Nu Skin Enterprises 2001 - 2004 Revenue $1,200 5 $1,100 + a eelo ope $1,000 + S $900 + $800 4 2001 2002 2003 2004 * Amts in millions
Slide 5: Financial Overview: 2001-2004 EPS
Financial Overview Nu Skin Enterprises 2001 - 2004 EPS $1.10 5 $0.90 - $0.70 + 2001 2002 2003 2004
Slide 6: Corporate Overview: Distributor Statistics
Corporate Overview Nu Skin Enterprises 2002 - 2005 Distributor Statistics Active Distributors Executive Distributors 900,000 5 35,000 5 ‘ 797,000 32,433 732,000 29,539 30,000 + 597,000 600,000 | 550,000 26,078 26,176 25,000 + 300,000 : 20,000 1 1 03/02 03/03 03/04 03/05 03/02 03/03 03/04 03/05 * Exe
Slide 7: Corporate Overview: Q1 2005 Results
Corporate Overview Q1 2005 Results Revenue Earnings Per Share 00 (In Millions) $0.30 $0.25 $250 a $200 $0.15 $0.10 $150 $0.05 102 Q1 03 Q1 04 Q105 Q102 Q103 Q104 Q1 05 Q1 Growth Drivers « Japan local currency revenue (Up 1%) ¢ Solid results in Greater China (24% Increase) ¢ 32,433 Executive Distribu
Slide 8: Corporate Overview: Product Divisions
Corporate Overview Product Divisions Nu Skin Pharmanex Big Planet Personal Care Nutrition Home & Business The Beauty of Innovation The Measurable Difference — Technology for Everyone 54) —<s photomexdy s mr 60 ae 41% of Q1 05 revenue ° 57% of Q1 05 revenue ° 2% of Q1 05 revenue * Skin Care = 67% - S
Slide 9: Corporate Overview: Revenue by Geography
Slide 10: Nu Skin Enterprises' Key Growth Initiatives
Nu Skin Enterprises’ Key Growth Initiatives Emerging growth opportunities Innovative new products Unique productivity tools
Slide 11: Mainland China Overview
Mainland China Overview Established - Q1 2003 $106 million - 2004 revenue Operations in 39 cities & 20 provinces 120 store locations Local manufacturing New direct selling regulations expected soon
Slide 12: Mainland China Overview: Growth Opportunities
Mainland China Overview Growth Opportunities ¢ Profitable revenue base ¢ Launched nutrition January 2005 * Assisted in crafting direct selling regulations ¢ Further expansion in 2005 ¢ Potentially a $300 - $500 million market (5 Years)
Slide 13: New Direct Selling Regulations - Impact on Operations
Mainland China Overview New Direct Selling Regulations - Impact on Operations ¢ No longer hire entry-level distributors ¢ Reduction in unemployment costs * Continue to employ top sales leaders ¢ Build out stores in key cities & provinces * Sales away from fixed retail locations
Slide 14: Emerging Growth Opportunities
Emerging Growth Opportunities Latin America redevelopment 151% Q1:05 revenue growth 106% Q1:05 increase in active distributors Indonesia Market to open H2:05 $500 million market* 75% industry growth since 2000* Russia ) Open Russia - H1:06 = $900 million market* ; a 400% industry growth since 2000*
Slide 15: Innovative Products
Innovative Products #® NU SKIN’ GD PHARMANEX” Tru Face™ Essence ($30M-annually) g3™— Nutrition drink Tri-Phasic White System ReishiMax GLp® ($36M—annually) Galvanic Spa™ System II Overdrive - Stamina boost
Slide 16: Unique Distributor Tools
Unique Distributor Tools Pharmanex BioPhotonic Scanner * The Measurable Difference - scientifically proven ¢ Device driving revenue growth Q1:05 Pharmanex revenue (Up 31%) 41% of Q1 orders came from monthly subscriptions * Upcoming Scanner launches: 1000 Scanners in Japan by June 2005 China - Q1:05
Slide 17: Customer Retention
460,000 - 400,000 + 340,000 + 280,000 + 220,000 + 160,000 + Customer Retention Growth in Global Subscription Orders Introduced Scanner Modified Distributor Incentives 100,000
Slide 18: Recurring Revenue
Recurring Revenue Subscription Revenue as a Percent of Total Revenue 100 5 > = & 80 + 60 4 40 20 4 2000 2001 2002 2003 2004 Q1 05
Slide 19: Active Distributor Retention Rates
Active Distributor Retention Rates Q1 2005 - 6 Month Retention 2004 2005 Singapore 43% 56% Taiwan 30% 67% Hong Kong 49% 65% United States 30% 32% Japan 48% 49%
Slide 20: Improving Profitability
Improving Profitability Projected Margins Current Future Gross Margin 83% 83% Commissions 43% 42% G&A 29% 26% Op. Income 11% 15%
Slide 21: Strong Cash Flow
Strong Cash Flow Uses of Cash $350,000 - $300,000 7 O Stock Repurchases Bf Dividends $250,000 7 O Cash Retained $200,000 5 $150,000 | * 84% of excess cash $100,000 4 returned to shareholders $50,000 | Py i i | 26% Dividends $0 | | | - | 58% Stock Repurchases 2001 2002 2003 2004 Total -$50,000 ~ * Ex
Slide 22: First Quarter Overview
First Quarter Overview Top performing personal care stock during the last 1, 3 and 5 year periods Better stock price performance than Avon, Gillette, P&G and Estee Lauder
Slide 23: Investment Highlights
Nu Skin Enterprises Investment Highlights ¢ Driving revenue through growth initiatives ¢ Increasing visibility with recurring revenue ¢ Improving profitability with margin expansion ¢ Returning excess cash to shareholders
Slide 24: Forward Looking Statement
Forward Looking Statement Please note: This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent our current expectations and beliefs, including, among other things, financial projections, strategic objectives and in
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