Deckers Outdoor Corporation · NYSE:DECK
Deckers Outdoor — Investor Presentation (November 2010)
62 slides from Deckers Outdoor's investor presentation, November 2010
Slide 1: Investor Presentation November 2010
Investor Presentation November 2010
Slide 2: Slide 2
Slide 3: Safe Harbor
Safe Harbor We make forward-looking statements in this presentation which represent our expectations or beliefs about future events and financial performance. Forward-looking statements are identifiable by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may” and other sim
Slide 4: Key Investment Highlights
Key Investment Highlights Operate 5 non-competing lifestyle brands – UGG® Australia / Teva® / Simple® Shoes / TSUBO® Ahnu® Meaningful domestic growth opportunities Significant untapped international potential ~ 30% of total sales by 2012 Solid earnings, cash flow and strong balance sheet S
Slide 5: Brand Development Platform
Brand Development Platform “Beyond Great Products to Build Great Brands.” LTM Net Sales @ Brand 9/30/10 86% Accessible luxury comfort 11% Outdoor performance Style & comfort , Outdoor lifestyle & 3% Sustainability with style
Slide 6: 2010 Corporate Strategy
2010 Corporate Strategy Continue to drive UGG Australia growth - transcend great products to grow a great brand Accelerate international growth Grow retail business Continue to develop infrastructure to support growth Cultivate developing brands Explore cash usage - internal investment a
Slide 7: UGG Brand: The Premier Brand in Luxury and Comfort
UGG Brand: The Premier Brand in Luxury and Comfort
Slide 8: UGG Brand Performance – Explosive Growth
UGG Brand Performance – Explosive Growth - Twelve consecutive years of double-digit growth - Guidance: Grow ~ 15% in 2010 Goal $900 $712 $582 $348 $212 $172 $116 $24 $37 2002 2003 2004 2005 2006 2007 2008 2009 2012 Note: Net sales in millions.
Slide 9: UGG Brand Profile
UGG Brand Profile Lifestyle brand based on accessible comfort and affordable luxury – “Once you discover comfort you don’t go back to discomfort.” Multiple collections of boots and casual footwear for women, men, and children Year round consumer demand for product line Strong retail relation
Slide 10: UGG Brand Profile
UGG Brand Profile UGG Is an integral part of a cultural shift of the casual stylish movement - Consumers are dressing more casually in all parts of their life, including the workplace - Demand for casual and yet stylish clothing continues to increase - UGG has become a “go to brand” for comfort and
Slide 11: The UGG Brand Today
The UGG Brand Today 23% 30% 18-34 yr olds 47% Lieberman Trial and Potential Study, US females 13-54, January 2010.
Slide 12: The UGG Brand Today
The UGG Brand Today Recent extensive market research in the US indicates we have an expanding, diverse and loyal customer base. – Teens are only 20-25% of our business today. – Teen potential: 40% of female teens respond they will definitely or probably buy UGG in next 12 months. – Prospect potent
Slide 13: The UGG Brand Today: High Loyalty
The UGG Brand Today: High Loyalty UGG loyalty is more than 2 times the industry average. Specifically, 63% of UGG buyers (past 12 months) “used UGG most often” vs. an average rating among footwear brands tested of 31%.
Slide 14: UGG… A shoe brand people love?
UGG… A shoe brand people love? Or a love brand that makes shoes?
Slide 15: UGG Brand Growth Strategy
UGG Brand Growth Strategy “Transcend Great Products to Grow a Great Brand” Diversify product line on a foundation of multiple categories to keep the brand fresh & appeal to a broader audience Increase retail penetration selectively at premium doors and Company-owned retail stores Expand intern
Slide 16: UGG Brand Growth Strategy: Diversify Product Line
UGG Brand Growth Strategy Diversify Product Line • Expand cold weather collection • Grow men’s & kids’ businesses • Continue to expand Spring business • Further develop apparel & accessories collections
Slide 17: UGG Brand Growth Strategy: Increased Marketing Spend
UGG Brand Growth Strategy Increased Marketing Spend UGG is investing in an additional 1.5% of sales in strategic marketing initiatives Aggressive Men’s Marketing Program Prospect Outreach and Conversion Programs Social Media Strategy and Management Retail Marketing Initiatives
Slide 18: The UGG Man
THE UGG MAN UGG MEN ARE CONFIDENT, STYLISH, WORLDLY, ACCOMPLISHED, CURRENT, MASCULINE, SENSITIVE, INTELLIGENT, STRONG...RESPECTFUL AND RESPECTED.
Slide 19: Reason to Believe
REASON TO BELIEVE FIGHTER PILOTS SURFERS FATHERS ATHLETES AND...WOMEN.
Slide 20: The Opportunity
THE OPPORTUNITY TODAY, MEN SPEND MORE MONEY ON THEMSELVES THAN EVER BEFORE IN HISTORY
Slide 21: Our Strategy
OUR STRATEGY TO PORTRAY THE STYLISH CONFIDENT LIFESTYLE OF THE UGG MAN TO GIVE HIM PERMISSION TO EMBRACE THE THINGS IN LIFE THAT HE LOVES OUR PLAN AGGRESSIVE MULTI-MEDIA CAMPAIGN SPECIAL PRODUCT COLLABORATION PILOT PROGRAM IN THE US FOR 2011 LAUNCHING IN Q4 GLOBAL PROGRAM IN 2012
Slide 22: Our Key Player – Tom Brady
OUR KEY PLAYER TOM BRADY –ICON OF STYLISH CONFIDENCE –PERFECT FACE FOR THE UGG BRAND –MULTI-YEAR ENDORSEMENT DEAL
Slide 23: UGG Brand Growth Strategy: Diversify Product Line
UGG Brand Growth Strategy Diversify Product Line
Slide 24: UGG Brand Growth Strategy: Increase Retail Penetration – Wholesale
UGG Brand Growth Strategy Increase Retail Penetration – Wholesale Harrods in London Aiden in New York •Expand shop-in-shops to showcase product range •Showcase ~ 100 styles vs. ~ 40 styles at typical account • Drives 35% to 50% increase in sales • Plan to have approximately 260 total shop-in-shops w
Slide 25: UGG Brand Growth Strategy: Increase Retail Penetration – Company owned stores
UGG Brand Growth Strategy Increase Retail Penetration – Company owned stores Currently operate worldwide18 full price stores and 9 outlets– all profitable with accretive margins, fast paybacks and strong sales per square foot Premium locations in major metropolitan cities around the world Plan
Slide 26: UGG Brand Growth Strategy: Expand International Presence
UGG Brand Growth Strategy Expand International Presence Establish subsidiaries in key developed markets Establish/maintain third party distributor relationships in less developed markets Continue to develop subsidiary infrastructure platforms in Europe and Asia Expand Company owned retail st
Slide 27: UGG Brand Summary
UGG Brand Summary $900 Million in sales by 2012 Domestic sales growth driven by: Evolving our product line Increasing productivity at existing wholesale accounts Selectively adding new wholesale distribution and growing company owned retail Increasing emphasis on marketing Internationa
Slide 28: Teva Brand Growth Strategy
Teva Brand Growth Strategy Re-positioned as an iconic adventure water brand for those who seek performance, camaraderie and adventure – Younger, more active consumer – Year-round product line with superior wet weather technology – Diversified distribution strategy – More targeted, non-traditional
Slide 29: Teva Brand Truths
Teva Brand Truths Walk on, Inspire around or in Water Community Through Adventure PERFORMANCE CAMARADERIE WATER vTeVva
Slide 30: Slide 30
Slide 31: (= fo}
(= fo}
Slide 32: Slide 32
Slide 33: Slide 33
Slide 34: Slide 34
Slide 35: Teva
vTeVva
Slide 36: Simple Brand Growth Strategy: Less is More
Simple Brand Growth Strategy Less is More Consumers no longer have to choose style over sustainability Target consumer is youthful and looking for ways to live a simpler and more genuine life Branding will be more human, playful, optimistic and engaging Environmental benefits remain as part
Slide 37: Slide 37
Slide 38: Slide 38
Slide 39: Slide 39
Slide 40: Less is More.
Sustainable CA Heritage Materials Classic Sneaker Enough DNA Said… Less Refreshingly is More. Sense of Humor Different Youthful Laid Back
Slide 41: Simple: shoes for a happy planet
Simple} shoes for « happy planet™
Slide 42: TSUBO Brand Growth Strategy: Art + Craft
TSUBO Brand Growth Strategy Art + Craft Tsubo will reinforce it’s heritage as innovators Pioneering styling and construction inspired from the world of fashion, architecture, furniture and automobiles Pioneering marketing that shares the joy of creation and the pride of craftsmanship Selectiv
Slide 43: aa sit iE ATI,
aa sit iE ATI,
Slide 44: MINI Ay,
MINI Ay, RN pt . Looe PAIR AIAN
Slide 45: Slide 45
Slide 46: D4 seeeeeeeer ee es GZ
D4 seeeeeeeer ee es GZ eee . x oe . eee eee Bes ' SFiS : P eee — *eeee0e0e02066868686 86 eeeeeeeeees e@eeee2e000 008 FS ; *eeeeeeoeee oe a Ki eeeeeee 6 6 hy’ Sal seeeeeeee’ ~~ e*seee
Slide 47: Slide 47
Slide 48: Ahnu Brand Growth Strategy
Ahnu Brand Growth Strategy Blurring the Lines between Performance and Lifestyle Ahnu is a fresh and modern interpretation of the hiking shoe Lightweight and versatile enough to transition from trail to pavement Infusion of fashion and color Neutral Positioning System keeps foot centered with
Slide 49: Slide 49
Slide 50: Slide 50
Slide 51: Ahnu
Ahnu g
Slide 52: Slide 52
Slide 53: Ahnu
Ahnu g
Slide 54: Slide 54
Slide 55: Financial Performance
FINANCIAL PERFORMANCE
Slide 56: Deckers Sales Performance
Deckers Sales Performance Goal to grow ~16% in 2010 $1,200 $1,100 $1,100 Simple/TSUBO/Ahnu $1,000 Teva $900 $813 UGG $800 $690 $700 $600 $500 $449 $400 $304 $300 $265 $215 $200 $121 $99 $100 $- 2002 2003 2004 2005 2006 2007 2008 2009 2012 Note: Net sales in millions. Note: Updated annually – 2012 la
Slide 57: Margin Performance
Margin Performance 50% 46.4% 46.2% 45.6% 44.3% 45% 42.4% 42.1% 42.1% 40% 35% 30% 23.5% 22.4% 25% 22.1% 22.2% 19.8% 19.7% 20% 15.6% 15% Gross Margin 10% Op Margin 5% 0% 2003 (1) 2004 (1) 2005 (1) 2006 (1) 2007 2008 (1) 2009 (1) 1) Operating income results are pro forma, adjusted to exclude litigation
Slide 58: Peer Group Performance – Margins
Peer Group Performance – Margins 60% Gross Margin Oper Margin 50% 40% 30% 20% 10% 0% -10% -20% -30% Note: Based on TTM as of most recent reported quarter. Deckers operating margin excludes impairment charges.
Slide 59: EPS Performance
EPS Performance Guidance: Grow ~ 22% for 2010 $2.96 $2.42 $1.69 $1.10 $0.83 $0.70 $0.25 2003 (1) 2004 (1) 2005 (1) 2006 (1) 2007 2008 (1) 2009 (1) 1) Operating income results are pro forma, adjusted to exclude litigation expenses, impairment losses and before restatements. 2) Note for all years ment
Slide 60: Balance Sheet & Cash Flow Highlights
Balance Sheet & Cash Flow Highlights: Twelve Months Ending 12/31/2007 12/31/2008 12/31/2009 9/30/2010 Cash and short-term investments $168 $195 $342 $251 Total debt $- $- $ - $- Total equity $299 $385 $492 $562 Total capitalization $299 $385 $492 $562 Cash flow from operations $61 $53 $185 $158 Capi
Slide 61: 2012 Sales Goal Growth Targets
2012 Sales Goal Growth Targets $1.1 billion UGG Australia: $900 Million Teva: $120 Million Simple, TSUBO and Ahnu: $80 million
Slide 62: Key Investment Highlights
Key Investment Highlights Operate 5 non-competing lifestyle brands Meaningful domestic growth opportunities Significant untapped international potential ~ 30% of total sales by 2012 Solid earnings, cash flow and strong balance sheet Seasoned management team with strong track record of succ
Deckers Outdoor — Investor Presentation (November 2010) on 6ix