V.F. Corporation · NYSE:VFC
V.F — Q4 FY2022 Earnings Presentation
43 slides from V.F's earnings presentation, May 19, 2022
Slide 1: Q4'FY22 Earnings
Q4’FY22 EARNINGS MAY 19, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks an
Slide 3: GAAP to Non-GAAP
GAAP to Non-GAAP All numbers and information presented are on a continuing operations basis, and thus exclude the Occupational Workwear business. Additionally, unless otherwise noted, all numbers are on an “adjusted” basis which excludes transaction and deal related activities associated primarily w
Slide 4: Steve Rendle
STEVE RENDLE CHAIRMAN, PRESIDENT & CEO
Slide 5: Q4'FY22 Earnings: Agenda
Q4’FY22 Earnings: Agenda Transformative year with significant milestones achieved despite headwinds Enterprise Portfolio Strategy Update – Steve Rendle (Chairman, President & CEO) The North Face® – Steve Murray (Global Brand President) Vans® – Kevin Bailey (Global Brand President) Financial
Slide 6: Broad-based growth highlights portfolio strength
Broad-based growth highlights portfolio strength Solid results delivered in a challenging and highly dynamic environment Revenue $11.8B, +27% C$, despite COVID headwinds and new challenges during Q4’FY22 + High single digit % organic revenue growth vs. FY’20 Broad-based growth with record sale
Slide 7: Enterprise strategy delivers returns
Enterprise strategy delivers returns Strong P&L execution, delivering against our Long Range Plan targets ADJUSTED GROSS MARGIN ADJUSTED OPERATING PROFIT/MARGIN ADJUSTED EPS* 13.1% $3.18 54.8% $1,549 +150bps >+500bps +143% 8.0% 53.3% $742 $1.31 FY’21 FY21 FY’22 FY22 FY’21 FY21 FY’22 FY22 FY’21 FY21
Slide 8: Leveraging our strategic platforms
Leveraging our strategic platforms Consumer data platform: Insight & analytics Consumer Digital Consumer Experience Data & Analytics Go To Market Q 4 F I S C A L 2 0 2 2 8
Slide 9: Leveraging our strategic platforms
Leveraging our strategic platforms International Platform: EMEA International Platform: APAC Marketplace partnerships and management Local for local approach Acceleration of digital ecosystem Talent investment in Shanghai brand hub Elevation of brand position Strengthening product creati
Slide 10: Strong family of brands
Strong family of brands ACTIVE OUTDOOR WORK 10
Slide 11: Steve Murray
STEVE MURRAY G L O B A L B R A N D P R E S I D E N T, THE NORTH FACE®
Slide 12: The North Face Growth FY'20 to FY'22
THE NORTH FACE GROWTH FY’20 TO FY’22 The North Face has grown annual revenues 21% over the past two years, to $3.26 Billion, with the mix strategically shifting in favor of both International Regions and Digital sales REGIONAL SHIFT CHANNEL SHIFT APAC APAC 10% 13% TNF TNF STORES STORES 28% 23% EMEA
Slide 13: Drivers of Success
DRIVERS OF SUCCESS ELEVATED PRODUCT FOCUS INTEGRATED MARKETPLACE ENHANCED CONSUMER STRATEGY ENGAGEMENT Successfully launched several Elevated storytelling, navigation and Fewer, but more impactful, anthemic proprietary, pinnacle performance, On customer experience in our DTC campaigns and acti
Slide 14: FY'23 Areas of Focus
FY’23 AREAS OF FOCUS Lead in Snow and Trail 365 Business Open Brand Aperture Maintain our Outdoor Apparel Capitalize on the fusion of Outdoor, Athletic Introduce new consumers to the brand leadership by re-launching the iconic and Athleisure trends, through versatile by making the Outdoors mor
Slide 15: Kevin Bailey
KEVIN BAILEY GLOBAL BRAND P R E S I D E N T, VANS®
Slide 16: FY'22 Learnings
FY’22 LEARNINGS CORE CLASSICS BRAND HEAT CHINA • Opportunity for Vans Classic • Vans top tier distribution • Region must remain agile to Icon management to be better needs a more focused adapt to the changing optimized with consumer strategic approach dynamics of Covid trends • Collaborations have b
Slide 17: Actions Underway
ACTIONS UNDERWAY 1 CLASSICS SINCE 2 BRAND HEAT 3 DIGITAL 4 DISTRIBUTION 5 6 CHINA DATA-DRIVEN FOREVER EXPERIENCE DECISIONS CAMPAIGN • Expanded reach • Pinnacle product • New eCommerce • Traffic Activations • AI Dashboards • Expanded Digital strategy team established platform launch for owned-DTC dep
Slide 18: FY'23 Strategic Priorities
FY’23 STRATEGIC PRIORITIES BRAND HEAT PRODUCT & MARKETING DTC-LED DIGITAL CAPABILITIES RELEVANCE WIN WITH EXISTING AND ATTRACT IMPROVE AGILITY AND REGIONAL ENHANCE OUR DIRECT BE A DIGITAL LEADER FOR OUR NEW CONSUMERS RELEVANCE CONSUMER CONNECTIONS CONSUMERS & IN OUR Activating updated Brand Clas
Slide 19: Matt Puckett
os MATT PUCKETT EVP, CFO G
Slide 20: FY'22 Financial Overview
FY’22 Financial Overview Strength of diversified business model Revenue +27% C$ to $11.8 billion, above initial guidance AD J E P S AB O V E O R I G I N AL G U I D AN C E + High single digit % organic growth vs. FY20 $3.18 $3.05 Adjusted Gross Margin +150 bps to 54.8% Exceeds pre-pandemic le
Slide 21: Supply Chain
Supply Chain Leveraging scale and diversification to overcome headwinds ENVIRONM ENT ACTIONS Sourcing Sourcing – Regional sourcing hubs supporting production – Labor, raw material inflation adjacent to consumption – Global costing hub supporting pricing actions Distribution Distribution – In
Slide 22: FY'22 Big Four Brand Revenue
FY’22 Big Four Brand Revenue +20% +33% +20% +19% +19% C$ +32% C$ +20% C$ +19% C$ Growth vs. FY’21 Q 4 F I S C A L 2 0 2 2 22
Slide 23: Gross Margin Bridge
Gross Margin Bridge FY’22 vs. FY’21 +190 bps +0 bps +20 bps 54.8% 53.3% -60 bps Note: Gross Margin on an adjusted basis *Numbers on an adjusted organic basis ** Reflects the impact of FX translation only Q 4 F I S C A L 2 0 2 2 23
Slide 24: Gross Margin Bridge
Gross Margin Bridge Q4’22 vs. Q4’21 52.7% +60 bps +0 bps 52.2% -110 bps Expedited Freight -170bps impact Note: Gross Margin on an adjusted basis * Reflects the impact of FX translation only Q 4 F I S C A L 2 0 2 2 24
Slide 25: Operating Margin Bridge
Operating Margin Bridge FY’22 vs. FY’21 +350 bps +10 bps +30 bps 13.1% +120 bps 8.0% Strategic Investments +22% Note: Operating Margin on an adjusted basis *Numbers on an adjusted organic basis ** Reflects the impact of FX translation only Q 4 F I S C A L 2 0 2 2 25
Slide 26: FY'22 Cash Evolution
FY’22 Cash Evolution $1.45B $1.28B FY’22 Beginning FY’22 Net Change in LT Dividend Share Occupational Work All Other FY’22 Ending Cash and Free Cash Flow and ST Debt Payments Repurchase and Other Cash and Investments Divestiture Investments Proceeds* Total Liquidity1 $3.6B** $3.2B** Net Leverage2 ~
Slide 27: FY'23 Outlook
FY’23 OUTLOOK
Slide 28: FY'23 Outlook
FY’23 Outlook Continuing to invest for growth, expect building momentum in FY’23 FY’23 OUTLOOK* Revenue (C$) + at least 7% The North Face® revenue + low double digit % Vans® revenue + mid single digit % Gross margin ~ + 50 basis points Operating margin ~ 13.6% Tax rate ~ 16% Diluted EPS $3.30 to $3.
Slide 29: Appendix
>. \ APPENDIX | o>-~~
Slide 30: ESG – Sustainability, Social/Awards
ESG – Sustainability, Social/Awards Engagement, Recognition and Progress Toward Goals Q 4 F I S C A L 2 0 2 2 30
Slide 31: COVID-19 Operational Update as of 5/17/2022
COVID-19 Operational Update as of 5/17/2022 All offices open North America No stores were closed during the fourth quarter; all stores are currently open All offices open EMEA 6% of stores were closed at the beginning of the fourth quarter, and at the end of the fourth quarter and currently
Slide 32: Q4'22: Revenue Breakdown
Q4'22: Revenue Breakdown BIG 4 BRANDS +9% (+11% C$): • Vans® flat (+2% C$) TOTAL • • The North Face® +24% (+26% C$ ) Timberland ® +9% (+12% C$) $2,825 M REVENUE • Dickies® +7% (+8% C$) INTERNATIONAL +7% (+11% C$) +9% Reported +12% • APAC -11% (-10% C$), including Greater China -13% (-14% C$) and Mai
Slide 33: FY'22: Revenue Breakdown
FY'22: Revenue Breakdown BIG 4 BRANDS +24% (+23% C$): • Vans® +20% (+19% C$) TOTAL • • The North Face® +33% (+32% C$) Timberland ® +20% • Dickies® +19% $11,842 M REVENUE INTERNATIONAL +23% (+22% C$); excl. acquisitions +19%* (+18% C$*) +28% Reported +27% • APAC +7% (+4% C$); excl. acquisitions flat*
Slide 34: Vans Global Performance
Q4’22 Vans ® Global Performance REVENUE OF $991.2 MILLION, +2% C$ VS PRIOR YEAR (FLAT R$); EXCLUDING CHINA +6% Wholesale: double digit growth in the US and EMEA from strength in key accounts in both regions and in Digital Titans in EMEA; APAC down, impacted by supply chain delays, COVID-related im
Slide 35: The North Face Global Performance
Q4’22 The North Face ® Global Performance REVENUE OF $769.5 MILLION, +26% C$ VS PRIOR YEAR (+24% R$), WELL ABOVE PRE-PANDEMIC LEVELS Broad-based growth with strong double digit % increases across all channels and regions with improved quality of sales Wholesale: Strong growth in the Americas acr
Slide 36: Timberland Global Performance
Q4’22 Timberland ® Global Performance REVENUE OF $434.9 MILLION, +12 C% (+9% R$) VS PRIOR YEAR WITH SIGNIFICANT INCREASE IN PROFITABILITY DTC B&M up double digits (EMEA up strongly as customers returned to stores, APAC down primarily due to COVID-related store closures in China); DTC Digital sales
Slide 37: Dickies Global Performance
Q4’22 Dickies ® Global Performance REVENUE OF $197.0 MILLION, +8% C$ (+7% R$) WITH STRONG PROFIT GROWTH AND MARGIN EXPANSION Continued expansion in profitability as strategic business model improvements gained traction in all regions Growing demand for both Workwear and Work-Inspired Lifestyle p
Slide 38: Operating Margin Bridge
Operating Margin Bridge Q4’22 vs. Q4’21 +190 bps 7.9% 6.7% -20 bps -50 bps Strategic Investments +8% Note: Operating Margin on an adjusted basis * Reflects the impact of FX translation only Q 4 F I S C A L 2 0 2 2 38
Slide 39: Appendix: GAAP to Non-GAAP
Appendix: GAAP to Non-GAAP VF CORPORATION Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Twelve Months Ended March 2022 (Unaudited) (In thousands, except per share amounts) Transaction and Contribution As Reported Deal Related Specified Str
Slide 40: Appendix: GAAP to Non-GAAP
Appendix: GAAP to Non-GAAP VF CORPORATION Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Twelve Months Ended March 2021 (Unaudited) (In thousands, except per share amounts) As Reported Transaction and Deal Specified Strategic Three Months E
Slide 41: Appendix: Top Brand Revenue
Appendix: Top 4 Brand Revenue VF CORPORATION Supplemental Financial Information Top 4 Brand Revenue Information (Unaudited) Three Months Ended March 2022 Twelve Months Ended March 2022 Top 4 Brand Revenue Growth Americas EMEA APAC Global Americas EMEA APAC Global ® Vans % cha nge 1% 14 % (24)% 0% 24
Slide 42: Appendix: Segment, Geographic & Channel Revenue – Q4'22
Appendix: Segment, Geographic & Channel Revenue – Q4'22 VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth - Three Months Ended March 2022 (Unaudited) Three Months Ended March 2022 % Change % Change Constant Currency* Segment Revenue Growth Ou
Slide 43: Appendix: Segment, Geographic & Channel Revenue – FY'22
Appendix: Segment, Geographic & Channel Revenue – FY'22 VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth - Twelve Months Ended March 2022 (Unaudited) Twelve Months Ended March 2022 % Change Constant % Change Constant (a) (a) % Change Currenc