Spin Master Corp · TSX:TOY
Spin Master — Shareholder Meeting (May 2016)
24 slides from Spin Master's shareholder meeting presentation, May 12, 2016
Slide 1: 2015 Annual General Meeting
2015 Annual General Meeting May 12, 2016
Slide 2: Disclaimer: Forward-Looking Information
DISCLAIMER FORWARD-LOOKING INFORMATION Certain statements, other than statements of historical fact, contained in this presentation constitute "forward-looking information" within the meaning of certain securities laws, including the Securities Act(Ontario), and are based on expectations, estimates
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Leading global children’s entertainment company with significant scale and reach Diversified portfolio of innovative toys, games, products, brands and entertainment properties Global R&D network, with leading capabilities in advanced technologies and robotics A proven and growi
Slide 4: Leading Children's Entertainment Company
LEADING CHILDREN’S ENTERTAINMENT COMPANY • Founded in 1994 2015 Gross Product Sales by Business Segment • Spin Master creates, designs, manufactures and markets a diversified portfolio of innovative products, brands and entertainment properties • Recognized as market leader in innovation Pre-School
Slide 5: Significant Scale and Global Reach
SIGNIFICANT SCALE AND GLOBAL REACH Spin Master’s global scale is a valuable asset throughout the entire development cycle 5
Slide 6: Gross Product Sales Growth
GROSS PRODUCT SALES GROWTH(1) (US$ millions) CAGRs 10-Yr 2-Yr Total Gross Product Sales 13% 31% All Other Products Bakugan and Zoobles $919 $829 $755 $577 $488 $481 (3) (2) Startup Growth Building the Base Bakugan Growth Refocusing Diversified Growth Proven long-term track record and strong base for
Slide 7: Platform Positioned for Growth
PLATFORM POSITIONED FOR GROWTH Strategic Initiatives to Position Gross Product Sales (US$ millions) Spin Master for Growth • Founders refined roles and hired a Global President • Reduced headcount by 35% • Formed Global Business Units (GBUs) to focus resources • Refocused European operations for pro
Slide 8: Diversified Portfolio of Innovative Brands and Products
DIVERSIFIED PORTFOLIO OF INNOVATIVE BRANDS AND PRODUCTS Business Segment Gross Product Sales # of Product Lines (US$ millions) All Other Products Bakugan / Zoobles Processes 2010 2015 • 36 month forward looking 2010 $144 (16%) revenue pipeline process Remote Control and Interactive Characters 1 4 20
Slide 9: Positioned for Significant Diversified Growth
POSITIONED FOR SIGNIFICANT DIVERSIFIED GROWTH Strategies for sustainable growth 9
Slide 10: Innovate Across the Portfolio, Expanding Current Business Segments
INNOVATE ACROSS THE PORTFOLIO, EXPANDING CURRENT BUSINESS SEGMENTS Innovation Licensing Advanced Technology Entertainment Remote Control and Opportunities for development Interactive Characters Boys Action Opportunities for and High-Tech development Construction Activities, Games & Puzzles and Fun F
Slide 11: Global R&D Network with Capabilities Driving Innovation
GLOBAL R&D NETWORK WITH CAPABILITIES DRIVING INNOVATION • Global R&D operations and network of 3rd party collaborators – Strategically located internal R&D centres – Collaborative model that leverages external inventors and designers • History of introducing technology to revolutionize traditional t
Slide 12: Innovation
INNOVATION Remote Control and Interactive Characters Boys Action and High-Tech Construction Activities, Games & Puzzles and Fun Furniture Pre-School and Girls Continued innovation across portfolio leading to sustainable and predictable growth 12
Slide 13: Licensing
LICENSING Remote Control and Interactive Characters Boys Action and High-Tech Construction Activities, Games & Puzzles and Fun Furniture Pre-School and Girls Strong licenses for 2016 support growth 13
Slide 14: Advanced Technology
ADVANCED TECHNOLOGY Continued Focus on Cutting Edge Advanced Technology 14
Slide 15: Develop Evergreen Global Entertainment Properties
DEVELOP EVERGREEN GLOBAL ENTERTAINMENT PROPERTIES LIBRARY Strategies • Leverage current Season 2 properties 2015 2015 Season 3 Season 1(1) • 1-2 new properties per 2016 year 2016 Season 4 (1) Fall Launch 2017 • Re-launch 2017 Bakugan • Continue to leverage broadcast relationships Nickelodeon Nickelo
Slide 16: Global Toys and Games Market US$89.6B
GLOBAL TOYS AND GAMES MARKET Global Traditional Toys Global Traditional Toys and Games Market Sales(1) and Games Sales by Region(1) Key Regions(1) (US$ billions) (% of 2015(3) Global Toy Sales) (2013 to 2015(3) CAGR %) Middle East and Africa 15% Latin America 12% [CATEGORY Asia Pacific NAME], [VALUE
Slide 17: Increase Sales in Developed and Emerging International Markets
INCREASE SALES IN DEVELOPED AND EMERGING INTERNATIONAL MARKETS International Growth Strategies 2015 International Sales • Selectively add sales and marketing personnel in current international sales and marketing offices Global Toy Industry(1) • Open new company-owned sales and marketing offices in
Slide 18: Leverage Global Platform Through Strategic Acquisitions
LEVERAGE GLOBAL PLATFORM THROUGH STRATEGIC ACQUISTIONS Acquisition Criteria Proven Track Record • Intellectual properties / brands • Opportunity to innovate • Leverage global infrastructure • New categories (Select Assets) • International markets • Ability to grow and expand margins Well positioned
Slide 19: Recent Acquisitions
RECENT ACQUISITIONS With the acquisition of With a rich legacy in the Italian Cardinal we now have the games category, Editrice Giochi number two market share provides us with a library of position in the US games established board games and market with significant growth greater access to the highl
Slide 20: Strong Financial Position
STRONG FINANCIAL POSITION (US$ millions) December fiscal year end December 31, 2015 December 31, 2014 Short-term Debt $3.4 $0.0 Long-term Debt $46.9 $0.8 Preferred Shares $0.0 $257.8 Total Shareholders’ Equity $156.3 ($66.2) Cash $45.7 $101.3 Net Debt $4.6 $157.3 Financial flexibility to exploit gro
Slide 21: 2015 Financial Highlights
2015 FINANCIAL HIGHLIGHTS Gross Product Sales (1) Gross Profit (US$ millions) (US$ millions) YoY Growth n/a 20.0% 40.7% 21.0% YoY Growth n/a 27.3% 46.3% 28.1% Adjusted EBITDA (1) Adjusted Net Income (1) (US$ millions) (US$ millions) YoY Growth n/a n/a 110.4% 43.6% YoY Growth n/a n/a 190.8% 48.7% (1)
Slide 22: Strong Free Cash Flow
STRONG FREE CASH FLOW (US$ millions) For the years ended December 31, 2015 2014 Cash Flow from Operating Activities Before Working $105.7 $89.8 Capital Less: Cash Flow from Investing Activities ($93.6) ($26.2) Plus: Cash Used for Brand and Business Acquisitions $55.1 $1.3 Free Cash Flow $67.2(1) $64
Slide 23: 2016 Q1 Financial Highlights
2016 Q1 FINANCIAL HIGHLIGHTS Gross Product Sales (1) Gross Profit (US$ millions) (US$ millions) $85 $174 $57 $117 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Adjusted EBITDA (1) Free Cash Flow(1) (US$ millions) (US$ millions) $24 $16 $10 Q1 2015 Q1 2016 -$8 Q1 2015 Q1 2016 (1) Non-IFRS financial measures. Non-I
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