Unifi, Inc. New · NYSE:UFI
Unifi, Inc. New — Unifi — Investor Day (November 2018)
112 slides from Unifi, Inc. New's investor day presentation, Nov 15, 2018
Slide 1: Investor Day 2018
Exhibit 99.2 INVESTOR DAY 2018 NOVEMBER 15, 2018Exhibit 99.2 INVESTOR DAY 2018 NOVEMBER 15, 2018
Slide 2: Welcome, Agenda
WELCOME, AGENDA 1 A.J. Eaker | VP Finance 2WELCOME, AGENDA 1 A.J. Eaker | VP Finance 2
Slide 3: Agenda
AGENDA 8:30 am FINANCIAL WELCOME, SAFE INNOVATION 6 1 11 OVERVIEW HARBOR, AGENDA COMPANY CLOSING MARKETING 2 12 7 OVERVIEW REMARKS STRATEGY, 10:15 am Q&A 8 3 13 KEY THEMES BREAK 10:30 am 12:00 pm GLOBAL 14 4 9 GLOBAL SUPPLY CLOSE BRAND SALES CHAIN SOLUTIONS SUSTAINABLE 10 CASE STUDY: ASIA 5 ® POWER
Slide 4: Cautionary Statement on Forward-Looking Statements
Cautionary Statement on Forward-Looking Statements Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the financial condition and results of operations of Unifi that are based on management's beliefs, assumptions and expectations
Slide 5: Today's Presenters
TODAY’S PRESENTERS Kevin Hall | Chairman and CEO Jeff Ackerman | EVP & CFO Jay Hertwig | GVP of Brand Sales Meredith Boyd | VP of Brand Sales Helen Sahi | VP of Sustainability Richard Gerstein | EVP of PVA Tom Caudle | President and COO Sohan Mangaldas | VP of Supply Chain Hongjun Ning | VP Unifi As
Slide 6: Company Overview
COMPANY OVERVIEW 2 Jeff Ackerman | EVP & CFO 6COMPANY OVERVIEW 2 Jeff Ackerman | EVP & CFO 6
Slide 7: Key Takeaways Today
KEY TAKEAWAYS TODAY Sustainability is a megatrend and path to greater profitability and customer satisfaction. 1 We are building relationships with leading companies who win through sustainability and innovation. 2 We are driving innovation and commercialization of premium value added products that
Slide 8: Overview
OVERVIEW Global 2,900 Greensboro, NC Company Employees Headquarters ® REPREVE Bottle Processing Yadkinville facility Suzhou, China Center 1971 1999 2010 2017 1998 2009 2016 Founded by Alfenas, Brazil Ciudad Arce, 10 billionth plastic bottle G. Allen Mebane El Salvador 8OVERVIEW Global 2,900 Greensbo
Slide 9: Overview of Sales and End Markets
OVERVIEW OF SALES AND END MARKETS 100% AUTOMOTIVE POLYMERS BRAZIL FURNISHING NYLON FIBER INDUSTRIAL ASIA HOSIERY 50% POLYESTER FIBER NORTH & CENTRAL APPAREL AMERICA 0% SALES BY SALES BY SALES BY END MARKET PRODUCT TYPE REGION 9 Source: Unifi FY 2018 Form 10-K and Unifi Internal EstimatesOVERVIEW OF
Slide 10: Apparel Value Chain
APPAREL VALUE CHAIN Consumer Mills Brands Retailers Feedback & Insights Recycled Materials Virgin Materials 10APPAREL VALUE CHAIN Consumer Mills Brands Retailers Feedback & Insights Recycled Materials Virgin Materials 10
Slide 11: Unifi Brand Architecture
UNIFI BRAND ARCHITECTURE PREMIUM VALUE-ADDED (PVA) ® REPREVE PROFIBER™ UNIFIBER™ The world’s #1 trusted brand of High-quality virgin fiber that is enhanced High-quality virgin fiber for cost- recycled performance fibers with performance benefits conscious designers and buyers 11UNIFI BRAND ARCHITECT
Slide 12: REPREVE is a high-quality performance fiber made from recycled materials
® REPREVE is a high-quality, performance fiber made from recycled materials. It’s an essential ingredient that makes products more earth-friendly. Many of the most recognizable, global brands use REPREVE. 12® REPREVE is a high-quality, performance fiber made from recycled materials. It’s an essentia
Slide 13: REPREVE Process
REPREVE PROCESS RECYCLED RECYCLED REPREVE REPREVE BOTTLES FLAKE CHIP RECYCLED FIBER Post-consumer Bottles are washed Bottle flake is melted Chip is melted and bottles are recycled and chopped into flake and formed into chip made into yarn 13REPREVE PROCESS RECYCLED RECYCLED REPREVE REPREVE BOTTLES F
Slide 14: PVA Drives Growth
PVA DRIVES GROWTH PVA SALES TREND DISTRIBUTION OF PVA SALES (FY18) FY14 FY15 FY16 FY17 FY18 ® ® PVA Non-PVA REPREVE Fiber REPREVE Chip TM PROFIBER 14 Source: Unifi FY 2018 Form 10-K and Unifi Internal EstimatesPVA DRIVES GROWTH PVA SALES TREND DISTRIBUTION OF PVA SALES (FY18) FY14 FY15 FY16 FY17 FY1
Slide 15: Global Fibers Opportunity Overview
GLOBAL FIBERS OPPORTUNITY OVERVIEW Recycled Share of Global Polyester Textile Fibers Consumption 11% 12% 12% 13% 13% 14% 16% 17% 18% 19% 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e Virgin Recycled Recycled polyester yarn has significant growth potential (with <20% of current total polyester
Slide 16: "What If?" Video
“WHAT IF?” VIDEO 16“WHAT IF?” VIDEO 16
Slide 17: Strategy, Key Themes
STRATEGY, KEY THEMES 3 Kevin Hall | Chairman and CEO 17STRATEGY, KEY THEMES 3 Kevin Hall | Chairman and CEO 17
Slide 18: Vision and Mission
vision Make everyday life better by transforming the world’s products through sustainable innovation. mission To be the world’s most sought-after performance and sustainability textile partner. 18vision Make everyday life better by transforming the world’s products through sustainable innovation. mi
Slide 19: Strategic Growth Plan
STRATEGIC GROWTH PLAN PARTNER with brands, retailers and mills who win in their markets through sustainable innovation DELIVER INNOVATE Sales Growth with game-changing, Margin Expansion consumer-noticeable, sustainable technologies Free Cash Flow Shareholder Value BUILD a trusted global supply chain
Slide 20: Why Sustainability?
WHY SUSTAINABILITY? “Today, more than 90 percent of CEOs state that sustainability is important to their company’s success.” Source: https://ssir.org/articles/entry/the_next_phase_of_business_sustainability 20WHY SUSTAINABILITY? “Today, more than 90 percent of CEOs state that sustainability is impor
Slide 21: Importance of Sustainable Solutions
IMPORTANCE OF SUSTAINABLE SOLUTIONS BOOMERS GEN X MILLENNIALS GEN Z 31% loyal to 31% have 47% socially and 55% understand boycotted non- producing sustainable environmentally sustainable sustainable products is most conscious criteria important companies businesses DEMANDS EXPECTS WANTS NICE TO HAVE
Slide 22: Sustainability and Leading Brands
SUSTAINABILITY AND LEADING BRANDS “Commitments for 2030 include… “…we’re creating the future “reduce global environmental “…we’re committed to using designing all IKEA products with new we want to see through footprint by 50% by 2030” resources responsibly and circular principles, with the goal to o
Slide 23: Target Audience
TARGET AUDIENCE SUSTAINABILITY INNOVATION 23TARGET AUDIENCE SUSTAINABILITY INNOVATION 23
Slide 24: Leading Global Recycled Brand
LEADING GLOBAL RECYCLED BRAND 10 BILLION IN 2017 20 BILLION BY 2020 30 BILLION BY 2022 24LEADING GLOBAL RECYCLED BRAND 10 BILLION IN 2017 20 BILLION BY 2020 30 BILLION BY 2022 24
Slide 25: REPREVE + Innovation
REPREVE + INNOVATION Performance Comfort Touch / Feel Fashion Protection 25REPREVE + INNOVATION Performance Comfort Touch / Feel Fashion Protection 25
Slide 26: Sustainability and Innovation Drive Growth
SUSTAINABILITY AND INNOVATION DRIVE GROWTH VALUE CREATION 26 GROSS MARGINSSUSTAINABILITY AND INNOVATION DRIVE GROWTH VALUE CREATION 26 GROSS MARGINS
Slide 27: Building Our Supply Chain
BUILDING OUR SUPPLY CHAIN SPEED TO MARKET • GLOBAL AVAILABILITY • CONSISTENT SUPPLY AND QUALITY • AGILE DELIVERY 27BUILDING OUR SUPPLY CHAIN SPEED TO MARKET • GLOBAL AVAILABILITY • CONSISTENT SUPPLY AND QUALITY • AGILE DELIVERY 27
Slide 28: Polyester and Nylon Textiles Consumption Is Global
POLYESTER AND NYLON TEXTILES CONSUMPTION IS GLOBAL CY 17 EU CY 17 CY 17 N. America China CY 17 Southeast Asia Turkey/MEA CY 17 CY 17 CY 17 India Latin America Measured in thousand metric tons 28 Source: Wood MackenziePOLYESTER AND NYLON TEXTILES CONSUMPTION IS GLOBAL CY 17 EU CY 17 CY 17 N. America
Slide 29: Deliver Growth
DELIVER GROWTH GROW DELIVER REVENUE Sales Growth Margin Expansion PVA Free Cash Flow Shareholder Value GROSS MARGIN ADJUSTED EBITDA INNOVATE 29DELIVER GROWTH GROW DELIVER REVENUE Sales Growth Margin Expansion PVA Free Cash Flow Shareholder Value GROSS MARGIN ADJUSTED EBITDA INNOVATE 29
Slide 30: Global Brand Sales
GLOBAL BRAND SALES Jay Hertwig | Group Vice President of Brand Sales 4 Meredith Boyd | Vice President of Brand Sales 30GLOBAL BRAND SALES Jay Hertwig | Group Vice President of Brand Sales 4 Meredith Boyd | Vice President of Brand Sales 30
Slide 31: Strategic Growth Plan
STRATEGIC GROWTH PLAN PARTNER with brands, retailers and mills who win in their markets through sustainable innovation INNOVATE 31STRATEGIC GROWTH PLAN PARTNER with brands, retailers and mills who win in their markets through sustainable innovation INNOVATE 31
Slide 32: REPREVE Brand Growth
REPREVE BRAND GROWTH 32REPREVE BRAND GROWTH 32
Slide 33: Transparent. Traceable. Certified.
TRANSPARENT. TRACEABLE. CERTIFIED. U Trust Verification™ FiberPrint™ Technology Recycled Content ® The U Trust™ verification program is a FiberPrint™ technology helps customers Products made with REPREVE recycled comprehensive certification program designed avoid false environmental claims. This mat
Slide 34: Unifi Differentiation
UNIFI DIFFERENTIATION Unifi creates a push-pull scenario with its indirect and direct customer relationships, meeting consumer demands and customer needs throughout the supply chain, while driving sustainability and innovation throughout the product pipeline. >>> PUSH >>> engagement innovation custo
Slide 35: Engagement Excellence
ENGAGEMENT EXCELLENCE CHIEF SUSTAINABILITY MARKETING DESIGN AND MATERIALS SOURCING OFFICER DEPARTMENT DEVELOPMENT Mills Champions of Sustainability Co-marketing Innovation sessions Geographies Circular Economy Stories Samples Take Back Programs 35ENGAGEMENT EXCELLENCE CHIEF SUSTAINABILITY MARKETING
Slide 36: Customer Journey
CUSTOMER JOURNEY COLLABORATE LISTEN SOLVE SOURCE CO-MARKET LAUNCH Innovation Innovation Innovation Messaging Scale Consumer solution sessions production needs Claims Sampling Global Hangtags Source Sustainability Supply Chain goals Circular Development Sustainability Improve Economy Storytelling 36C
Slide 37: The North Face Bottle Source Collection
THE NORTH FACE BOTTLE SOURCE COLLECTION 37THE NORTH FACE BOTTLE SOURCE COLLECTION 37
Slide 38: PVA Innovation in Denim at Retail
PVA INNOVATION IN DENIM AT RETAIL 38PVA INNOVATION IN DENIM AT RETAIL 38
Slide 39: Global PVA Sales Performance
GLOBAL PVA SALES PERFORMANCE Goal: 10% average growth per year FY14 FY15 FY16 FY17 FY18 FY19 E FY20 E FY21 E2 FY22 E 39 Source: Unifi Internal EstimatesGLOBAL PVA SALES PERFORMANCE Goal: 10% average growth per year FY14 FY15 FY16 FY17 FY18 FY19 E FY20 E FY21 E2 FY22 E 39 Source: Unifi Internal Estim
Slide 40: Sustainable Power of REPREVE
SUSTAINABLE POWER ® OF REPREVE 5 Helen Sahi | Vice President Global Sustainability 40SUSTAINABLE POWER ® OF REPREVE 5 Helen Sahi | Vice President Global Sustainability 40
Slide 41: Sustainability: The Case
SUSTAINABILITY: THE CASE 41SUSTAINABILITY: THE CASE 41
Slide 42: U.S. has the lowest bottle collection rate
iS ~~ ° REPQ@EVE = THE U.S. HAS THE LOWEST BOTTLE COLLECTION RATE OF OLLECTION ae THESE DEVELOPED COUNTRIES. a @ wo FoR THE GOOD OF TOMORROW, Wehavrele-dob 9 wine 30%
Slide 43: Significant Recycling Goals
SIGNIFICANT RECYCLING GOALS 30 BILLION BY 2022 43SIGNIFICANT RECYCLING GOALS 30 BILLION BY 2022 43
Slide 44: The Impact of 400,000 Shirts
THE IMPACT OF 400,000 SHIRTS …generates …provides 600 … improves air enough energy to people their typical quality by avoiding power 50 homes daily drinking 130K kgs of CO 2 for 1 year water for 1 year emissions 44 Source: Unifi Internal EstimatesTHE IMPACT OF 400,000 SHIRTS …generates …provides 600
Slide 45: Circular Economy
CIRCULAR ECONOMY Brand Textile Bottles Product Yarn Chip 45CIRCULAR ECONOMY Brand Textile Bottles Product Yarn Chip 45
Slide 46: Meeting the Brands' Needs
MEETING THE BRANDS’ NEEDS 1. Sustainability and performance 2. Availability across different yarn forms 3. Looking for circular economy solutions 4. Global consistency and availability 5. Affordability 6. Transparency 46MEETING THE BRANDS’ NEEDS 1. Sustainability and performance 2. Availability acro
Slide 47: 4747
4747
Slide 48: Innovation
INNOVATION Richard Gerstein | EVP Branded PVA Business 6 and Global Chief Marketing and Innovation Officer 48INNOVATION Richard Gerstein | EVP Branded PVA Business 6 and Global Chief Marketing and Innovation Officer 48
Slide 49: Strategic Growth Plan
STRATEGIC GROWTH PLAN INNOVATE with game-changing, consumer-noticeable, sustainable technologies INNOVATE 49STRATEGIC GROWTH PLAN INNOVATE with game-changing, consumer-noticeable, sustainable technologies INNOVATE 49
Slide 50: Unifi Innovation Capabilities
UNIFI INNOVATION CAPABILITIES Polymer Mechanical Additives Finish Chemical Extrusion Finish 50UNIFI INNOVATION CAPABILITIES Polymer Mechanical Additives Finish Chemical Extrusion Finish 50
Slide 51: Focus on Innovation Fundamentals
FOCUS ON INNOVATION FUNDAMENTALS Identify and focus on Align resources Optimize innovation with and capabilities commercialization largest market potential 51FOCUS ON INNOVATION FUNDAMENTALS Identify and focus on Align resources Optimize innovation with and capabilities commercialization largest mar
Slide 52: Aligning Innovation with Customer & Consumer Needs
ALIGNING INNOVATION WITH CUSTOMER & CONSUMER NEEDS CUSTOMER & CONSUMER NEEDS KEY MARKET DIFFERENTIATED SEGMENTS TECHNOLOGY 52ALIGNING INNOVATION WITH CUSTOMER & CONSUMER NEEDS CUSTOMER & CONSUMER NEEDS KEY MARKET DIFFERENTIATED SEGMENTS TECHNOLOGY 52
Slide 53: Consumer Needs
CONSUMER NEEDS ACTIVE PERFORMANCE DESIGN & FIT PREVENTIVE PERFORMANCE Thermal Regulation • Odor Heathers • Fit • Color • Effects Durability • Flame Retardant • UV • Adaptive • Wicking • Cushioning 53CONSUMER NEEDS ACTIVE PERFORMANCE DESIGN & FIT PREVENTIVE PERFORMANCE Thermal Regulation • Odor Heath
Slide 54: Consumer Desires
CONSUMER DESIRES WEARABLE TECHNOLOGY WELLNESS SUSTAINABILITY 54CONSUMER DESIRES WEARABLE TECHNOLOGY WELLNESS SUSTAINABILITY 54
Slide 55: Accelerating Innovation Development
ACCELERATING INNOVATION DEVELOPMENT Starting Points Levels of of Innovation Innovation Internal Development Acquisition Licensing Joint Venture 55ACCELERATING INNOVATION DEVELOPMENT Starting Points Levels of of Innovation Innovation Internal Development Acquisition Licensing Joint Venture 55
Slide 56: Differentiated Portfolio
DIFFERENTIATED PORTFOLIO SPECIALTY AND INDUSTRIAL PREMIUM VALUE ADDED UNIFIBER Value / Compliant Performance Sustainable + 56DIFFERENTIATED PORTFOLIO SPECIALTY AND INDUSTRIAL PREMIUM VALUE ADDED UNIFIBER Value / Compliant Performance Sustainable + 56
Slide 57: Case Study: Sustainable Performance Technology in Socks
CASE STUDY SUSTAINABLE PERFORMANCE TECHNOLOGY IN SOCKS Stretch Wicking Engineered Reinforced Y Heel Targeted Compression performance for Wicking different applications Cushioning o Running o Hiking Antimicrobial o Work Cushioning o Sports Blister Protection Reinforced Seamless Toe 57CASE STUDY SUSTA
Slide 58: Consumers Want Comfort in All Applications
CONSUMERS WANT COMFORT IN ALL APPLICATIONS MOISTURE WICKING and CUSHIONING are top benefits 58CONSUMERS WANT COMFORT IN ALL APPLICATIONS MOISTURE WICKING and CUSHIONING are top benefits 58
Slide 59: Superior Performance
SUPERIOR PERFORMANCE FORCE REQUIRED FOR 25% VERTICAL WICKING* COMPRESSION** TIME REQUIRED PSI TO COMPRESS SOCK 30 5 5 25 4 4 20 3 15 3 2 10 2 1 5 1 0 0 Ours Competitor A Competitor B Competitor C Competitor D Unifi U Onif urs i Competitor A Competitor B Competitor C Competitor D Retails $14 Retails
Slide 60: Under Armour Charged Cushion Sock
UNDER ARMOUR CHARGED CUSHION SOCK BENEFITS: Sustainable Moisture Wicking Cushioning 60UNDER ARMOUR CHARGED CUSHION SOCK BENEFITS: Sustainable Moisture Wicking Cushioning 60
Slide 61: Customer Innovation Center
CUSTOMER INNOVATION CENTER 61CUSTOMER INNOVATION CENTER 61
Slide 62: Marketing
MARKETING Richard Gerstein | EVP Branded PVA Business 7 and Global Chief Marketing and Innovation Officer 62MARKETING Richard Gerstein | EVP Branded PVA Business 7 and Global Chief Marketing and Innovation Officer 62
Slide 63: Building Our Brands B2B2c
BUILDING OUR BRANDS B2B2c 63BUILDING OUR BRANDS B2B2c 63
Slide 64: Building Marketing Capabilities
BUILDING MARKETING CAPABILITIES DIGITAL MARKETING AND INNOVATION CUSTOMER CONTENT CREATION COMMERCIALIZATION CO-MARKETING 64BUILDING MARKETING CAPABILITIES DIGITAL MARKETING AND INNOVATION CUSTOMER CONTENT CREATION COMMERCIALIZATION CO-MARKETING 64
Slide 65: Target Audience
TARGET AUDIENCE Leading Brands & Retailers Textile Mill Partners Consumers o Chief Sustainability Officers Employees o Chief Marketing Officers o Design and Innovation Teams o Supply Chain 65TARGET AUDIENCE Leading Brands & Retailers Textile Mill Partners Consumers o Chief Sustainability Officers Em
Slide 66: Unifi Brand Essence
UNIFI BRAND ESSENCE True Innovation Starts in the Fiber 66UNIFI BRAND ESSENCE True Innovation Starts in the Fiber 66
Slide 67: "Positioning" Video
“POSITIONING” VIDEO 67“POSITIONING” VIDEO 67
Slide 68: Organize for a Digital World
ORGANIZE FOR A DIGITAL WORLD Paid/ Sales Earned Materials Media CRM Trade Email Customer Shows Marketing Database ® REPREVE Conferences Mobile Tour 68ORGANIZE FOR A DIGITAL WORLD Paid/ Sales Earned Materials Media CRM Trade Email Customer Shows Marketing Database ® REPREVE Conferences Mobile Tour 68
Slide 69: Digital Engagement
DIGITAL ENGAGEMENT o 23% increase in monthly page views o 105% increase in time on site o 19% increase in organic search referral o Over 1,000 contact forms submitted o Over 380 product collateral downloads o Over 6,000 videos viewed Source: Google Analytics and Unifi Tracking. July – Sept 2018 vs A
Slide 70: Innovation Commercialization
INNOVATION COMMERCIALIZATION MARKET FIRST SHIP / MARKETING INTELLIGENCE LAUNCH PLANS • Custom Data • Marketing Campaign • Customer Value • Market Data Begins Proposition • Customer Input • Sales Training • Lead Brand Partners (Presentations) • Messaging 70INNOVATION COMMERCIALIZATION MARKET FIRST SH
Slide 71: REPREVE Drives Brand Attributes
REPREVE DRIVES BRAND ATTRIBUTES Leading Performance Aspirational Apparel Brand * Innovative Base Brand * ® Plus REPREVE Unique * * Base Brand Plus Sustainable Is a brand that aligns with my personal values * Base Brand Makes me think differently * about the brand * N=150, Ages 16 – 22 SOURCE: UNIFI
Slide 72: Customer Co-Marketing
CUSTOMER CO-MARKETING Build REPREVE as the gold standard in sustainable textile solutions Build preferred relationships with key stakeholders in brands and textile mills 100 175 18 MILLION REPREVE hang Customers Customer tours and tags distributed co-marketing innovation sessions in FY 2018 with Uni
Slide 73: 2017 Champions of Sustainability
2017 CHAMPIONS OF SUSTAINABILITY 732017 CHAMPIONS OF SUSTAINABILITY 73
Slide 74: "Champions of Sustainability" Video
“CHAMPIONS OF SUSTAINABILITY” VIDEO 74“CHAMPIONS OF SUSTAINABILITY” VIDEO 74
Slide 75: What If?
WHAT IF? 75WHAT IF? 75
Slide 76: Building a Partnership with Pac12
BUILDING A PARTNERSHIP WITH PAC12 Founding Sponsor of Create Circular Economy Leverage Television and Leverage Presence at Pac12 Team Green Stories on Campus with Digital Assets to tell Championship Events with Brand Partners Circular Economy Stories Customers 76BUILDING A PARTNERSHIP WITH PAC12 Fou
Slide 77: "League 91" Video
“LEAGUE 91” VIDEO 77“LEAGUE 91” VIDEO 77
Slide 78: Break
BREAK 8 15 Minutes 78BREAK 8 15 Minutes 78
Slide 79: Global Supply Chain Solutions
GLOBAL SUPPLY CHAIN SOLUTIONS Tom Caudle | President and Chief Operating Officer 9 Sohan Mangaldas | Vice President of Supply Chain 79GLOBAL SUPPLY CHAIN SOLUTIONS Tom Caudle | President and Chief Operating Officer 9 Sohan Mangaldas | Vice President of Supply Chain 79
Slide 80: Strategic Growth Plan
STRATEGIC GROWTH PLAN BUILD a trusted global supply chain focused on delivering solutions INNOVATE where our customers need us 80STRATEGIC GROWTH PLAN BUILD a trusted global supply chain focused on delivering solutions INNOVATE where our customers need us 80
Slide 81: Building Our Supply Chain
BUILDING OUR SUPPLY CHAIN GLOBAL AVAILABILITY OF RECYCLED BRAND SPEED TO MARKET AND INNOVATIONS LOCAL FOR LOCAL ABILITY TO EASILY MOVE ACROSS REGIONS CONSISTENT SUPPLY QUALITY 81BUILDING OUR SUPPLY CHAIN GLOBAL AVAILABILITY OF RECYCLED BRAND SPEED TO MARKET AND INNOVATIONS LOCAL FOR LOCAL ABILITY TO
Slide 82: Balancing the Hemispheres for Speed to Market
BALANCING THE HEMISPHERES FOR SPEED TO MARKET 82BALANCING THE HEMISPHERES FOR SPEED TO MARKET 82
Slide 83: Delivering Demands
DELIVERING DEMANDS Product development Service and distribution and innovation for three continents Agility Large local customer base Low cost production Trade compliant Quick replenishment Ability to move Large-scale complexity and service global brands management for local and export markets Super
Slide 84: Leading Position in the Americas
LEADING POSITION IN THE AMERICAS North & Central South American American Markets Market # 1 # 1 Overall Apparel/Hosiery # 1 # 1 # 1 # 1 Furnishings # 1 # 1 Auto & Industrial Source: Volume rankings based on Unifi Internal Estimates, Fiber Economics Bureau, Wood Mackenzie, and International Trade Com
Slide 85: Expanded Market Presence
EXPANDED MARKET PRESENCE China EU Taiwan Sri Lanka Vietnam Turkey Pakistan 85EXPANDED MARKET PRESENCE China EU Taiwan Sri Lanka Vietnam Turkey Pakistan 85
Slide 86: U Trust, FiberPrint, Operational Excellence
® U Trust ® FiberPrint ® U Trust Compliance Transparency Vendor certifications Global technical support Operational excellence Global quality control standards Global information systems/technology infrastructure and platform 86® U Trust ® FiberPrint ® U Trust Compliance Transparency Vendor certific
Slide 87: Case Study: Asia
CASE STUDY: ASIA 10 Hongjun Ning | Vice President Asia, Europe, Africa 87CASE STUDY: ASIA 10 Hongjun Ning | Vice President Asia, Europe, Africa 87
Slide 88: Growth in Asia and Europe
GROWTH IN ASIA AND EUROPE Revenue Million $ FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 Budget 88GROWTH IN ASIA AND EUROPE Revenue Million $ FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 Budget 88
Slide 89: Unifi Differentiation
UNIFI DIFFERENTIATION Unifi creates a push-pull scenario with its indirect and direct customer relationships, meeting consumer demands and customer needs throughout the supply chain, while driving sustainability and innovation throughout the product pipeline. >>> PUSH >>> engagement innovation custo
Slide 90: Excellent Growth
EXCELLENT GROWTH Brand Relationships Mill Relationships FY18 86 987 FY16 50 523 90EXCELLENT GROWTH Brand Relationships Mill Relationships FY18 86 987 FY16 50 523 90
Slide 91: Organic Growth Matrix
ORGANIC GROWTH MATRIX Horizontal Growth in Textile Regions RO RO RO UTSC UTCL UTV UTT Pakistan EU Taiwan China Sri Lanka Vietnam Turkey REP Poly Sport PROFIBER Outdoor 365 TruTemp Casual TruBounce Fashion TruTouch Hosiery TruColor Home Textile REP Nylon Auto TruClean Retail TruDry Contract Portfolio
Slide 92: Revenue by PVA Category (Asia)
REVENUE BY PVA CATEGORY (ASIA) 15% FY18 85% ® TM REPREVE PROFIBER 92REVENUE BY PVA CATEGORY (ASIA) 15% FY18 85% ® TM REPREVE PROFIBER 92
Slide 93: Intertextile Show - Shanghai
INTERTEXTILE SHOW 18 - SHANGHAI 93INTERTEXTILE SHOW 18 - SHANGHAI 93
Slide 94: Financial Overview
FINANCIAL OVERVIEW Jeff Ackerman | Executive Vice President 11 and Chief Financial Officer 94FINANCIAL OVERVIEW Jeff Ackerman | Executive Vice President 11 and Chief Financial Officer 94
Slide 95: Strategic Growth Plan
STRATEGIC GROWTH PLAN PARTNER with brands, retailers and mills who win in their markets through sustainable innovation DELIVER INNOVATE Sales Growth with game-changing, Margin Expansion consumer-noticeable, sustainable technologies Free Cash Flow Shareholder Value BUILD a trusted global supply chain
Slide 96: Deliver Shareholder Returns
DELIVER SHAREHOLDER RETURNS Sales Growth Profit Growth Free Cash Flow 96DELIVER SHAREHOLDER RETURNS Sales Growth Profit Growth Free Cash Flow 96
Slide 97: Sales Growth Drivers
SALES GROWTH DRIVERS PVA Global Growth Goal: +10%/yr Sales Growth o International Goal Low / Mid o Brand Adoption Single Digit o Innovation 97SALES GROWTH DRIVERS PVA Global Growth Goal: +10%/yr Sales Growth o International Goal Low / Mid o Brand Adoption Single Digit o Innovation 97
Slide 98: Profit Growth Drivers
PROFIT GROWTH DRIVERS Margin Improvement Profit Growth o Mix Enrichment Operating Income Adjusted EBITDA o Expense Leverage 98PROFIT GROWTH DRIVERS Margin Improvement Profit Growth o Mix Enrichment Operating Income Adjusted EBITDA o Expense Leverage 98
Slide 99: Mix Enrichment
MIX ENRICHMENT Gross Margin PVA Mix Improvement o Drive greater mix of PVA Sales o Increase Account penetration o Layer technology / Innovation on ® REPREVE platform FY16 FY17 FY18 PVA Gross Margin Non-PVA Gross Margin 99 Source: Unifi Internal EstimatesMIX ENRICHMENT Gross Margin PVA Mix Improvemen
Slide 100: Expense Leverage
EXPENSE LEVERAGE Asset Leverage SG&A Leverage FY17 FY18 Production Production (mm lbs) (mm lbs) Bottle 36.8 70.8 Processing Recycling Center (Chip 60.7 69.4 Production) FY16 FY17 FY18 SG&A as a % Sales 100 Source: Unifi Internal EstimatesEXPENSE LEVERAGE Asset Leverage SG&A Leverage FY17 FY18 Produc
Slide 101: Free Cash Flow Drivers
FREE CASH FLOW DRIVERS Working Capital Free Cash Flow Capital Expenditures 101FREE CASH FLOW DRIVERS Working Capital Free Cash Flow Capital Expenditures 101
Slide 102: Free Cash Flow, Liquidity and Net Debt
FREE CASH FLOW ($ millions) ($ millions) Strong Liquidity Improving Free Cash Flow CAPEX Capital Leases Free Cash Flow 100 98 5 86 85 37 4 77 10 52 33 26 25 19 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY14 FY15 FY16 FY17 FY18 $75MM of debt with LIBOR Lock to May ‘22 ($ millions) Improving Net Debt Le
Slide 103: Capital Allocation
CAPITAL ALLOCATION CAPITAL INVESTMENTS DEBT REDUCTION SHARE REPURCHASES New machinery or capacity expansion Ensure liquidity for opportunistic Return earnings to shareholders investments and repurchases New technology or capabilities Maintain appropriate leverage Partnerships and joint ventures Redu
Slide 104: Future Financial Goals
FUTURE FINANCIAL GOALS Goal Revenue Growth LSD - MSD PVA Sales Growth 10% (1) Adjusted EBITDA Growth Exceed Sales Growth Capital Expenditures Current Trends (1) Adjusted EBITDA is a non-GAAP financial measure further detailed on slide 4. 104FUTURE FINANCIAL GOALS Goal Revenue Growth LSD - MSD PVA Sa
Slide 105: Oil and PET Usually Move in Sync
OIL AND PET USUALLY MOVE IN SYNC o Over time, PET costs track generally with Crude Oil o PET costs can be impacted by supply and demand dynamics specific to feedstocks (PX, MEG, PTA) o PET costs can also be impacted by substitutes (i.e. cotton) 105 Source: Wood MackenzieOIL AND PET USUALLY MOVE IN S
Slide 106: PET Costs Impact Gross Margin
PET COSTS IMPACT GROSS MARGIN o 80% of UFI sales are PET-based o Pricing lags raw material cost changes by 1-2 quarters o Over time, we expect raw material cost is neutral to gross margin o Revenues will rise more quickly in a rising cost environment, and may trend downward in a declining cost envir
Slide 107: Investment Thesis
INVESTMENT THESIS Favorable industry dynamics o Global consumer preferences toward synthetic products with innovative attributes 1 o Strong interest in sustainable solutions, with customers maintaining brand integrity Defensible scale and foundation ® o Leading branded recycled fiber, REPREVE o Glob
Slide 108: Closing Summary
CLOSING SUMMARY 12 Kevin Hall | Chairman and CEO 108CLOSING SUMMARY 12 Kevin Hall | Chairman and CEO 108
Slide 109: Strategic Growth Plan
STRATEGIC GROWTH PLAN PARTNER with brands, retailers and mills who win in their markets through sustainable innovation DELIVER INNOVATE Sales Growth with game-changing, Margin Expansion consumer-noticeable, sustainable technologies Free Cash Flow Shareholder Value BUILD a trusted global supply chain
Slide 110: Question & Answer Session
QUESTION & 13 ANSWER SESSION 110QUESTION & 13 ANSWER SESSION 110
Slide 111: Thank You
THANK YOU 14 111THANK YOU 14 111
Slide 112: Appendix: Sources
APPENDIX Sources for slide 21 1. Report shows a third of consumers prefer sustainable brands. (2017, May 01). https://www.unilever.com/news/press- releases/2017/report-shows-a-third-of-consumers-prefer-sustainable-brands.html 2. Generation Z wants more action for a sustainable future, reveals global