Fossil Group, Inc. · NASDAQ:FOSL
Fossil — Investor Presentation (June 2022)
25 slides from Fossil's investor presentation, June 2022
Slide 1: Investor Presentation | June 2022
Investor Presentation | June 2022 1
Slide 2: Financial Disclosure Advisory
FINANCIAL DISCLOSURE ADVISORY Certain statements contained herein that are not historical facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The actual results of the future events
Slide 3: Fossil Group: At a Glance
FOSSIL GROUP: AT A GLANCE MULTI-CATEGORY MULTI-BRAND DIGITALLY-LED Watches | Leather | Jewelry 6% $1.9B 11% 24% 43% 81% 2021 Revenue 3
Slide 4: Market Opportunity
MARKET OPPORTUNITY Addressable Category Size Addressable category size, historical and projected (US$B) ‘19-’20 CAGR ‘20-’23 CAGR Total Market 214.3 -16.8% +9.7% 195.0 197.3 177.5 Addressable 162.2 101.8 -18.5% +9.1% Leather 96.3 94.2 84.9 78.4 Addressable 45.2 48.7 -21.8% +9.0% Jewelry 48.1 41.3 Ad
Slide 5: From 2019-2021, We Adapted Our Business Model
FROM 2019-2021, WE ADAPTED OUR BUSINESS MODEL +$250M 6.6% FY21 Adj. Operating Income Margin Returned to Exceeded $250M cost savings top-line growth target under NWF 2.0 program Improved Profitability Multi-year investment; Strengthened Reset Connected pivoted to a digital-first Traditional Watch Watch
Slide 6: Current Market Dynamics
CURRENT MARKET DYNAMICS • Traditional Watch category is healthy and growing • Ongoing strength in Jewelry • Macro headwinds and FX impacting top line growth in 2022 ○ China’s Covid restrictions, inflation and geopolitical turmoil • Healthy U.S. consumer demand signals in Q1 2022 • Return to brick-and
Slide 7: Growth Agenda
GROWTH AGENDA 1 Drive brand heat through exceptional storytelling and innovation 2 Accelerate our digital capabilities 3 Leverage our opportunity in China and India 4 Streamline our operations 7
Slide 8: 1. Storytelling and Innovation
1. Storytelling and Innovation 8
Slide 9: Storytelling and Innovation
1 STORYTELLING AND INNOVATION • Bring great brands, stories, and style to the marketplace • Build on current iconic design trends with limited editions and collaborations • Create exceptional content at scale • Lead with Digital First approach • Maximize key events & holidays 9
Slide 10: Traditional Watches
TRADITIONAL WATCHES • Design-led culture • Leading fashion watch brands: Fossil, Michael Kors, Armani, Diesel • Affordable luxury, fashion and innovation driving category excitement • Strong unit-level economics in all channels, including digital 10
Slide 11: Connected Watches
CONNECTED WATCHES • Refined brand & distribution strategies • In-house software and engineering expertise • Robust innovation roadmap • Gen 6 relaunch with Wear OS 3.0 Holiday 2022 • Fossil Smart Watch App coming 2H 2022 11
Slide 12: 2. Digital Acceleration
2. Digital Acceleration 12
Slide 13: Digital Growth Pillars
2 DIGITAL GROWTH PILLARS • Leverage and extend our DTC foundation Scale our owned e-commerce platforms globally - Fossil.com, WSI.com, Skagen.com, Michele.com, Zodiac.com • Broaden our third party e-commerce relationships Expand our third party e-commerce and wholesale.com partnerships and add new p
Slide 14: Well-Positioned Across Digital Channels
WELL-POSITIONED ACROSS DIGITAL CHANNELS OWNED THIRD-PARTY WHOLESALE.COM E-COMMERCE E-COMMERCE INFRASTRUCTURE IN PLACE TO DRIVE SCALE + FAVORABLE ECONOMICS 14
Slide 15: 3. Leverage our Opportunity in China and India
3. Leverage our Opportunity in China and India 15
Slide 16: China and India Important Growth Markets
3 CHINA AND INDIA IMPORTANT GROWTH MARKETS • Emerging middle class is driving category growth • Proven strategy focused on localized marketing and segmented assortments • Robust long-term opportunity in Mainland China; rolling lockdowns temporarily impacting the consumer • India has returned to grow
Slide 17: 4. Streamline Operations
4. Streamline Operations 17
Slide 18: Streamline Our Operations
4 STREAMLINE OUR OPERATIONS • Driving expense leverage • Optimizing the store portfolio through natural lease expirations Reduced the portfolio by 14% in 2021 Significant percentage of leases coming due 2022-2024 creates flexibility • Re-engineering the supply chain and key processes, including invent
Slide 19: More About Us…
More About Us… 19
Slide 20: Fossil Leadership
FOSSIL LEADERSHIP Kosta Kartsotis Chairman and CEO Jeff Boyer EVP, Chief Operating Officer Greg McKelvey EVP, Chief Commercial Officer Holly Breidis EVP, Chief Digital Officer Sunil Doshi Chief Financial Officer & Treasurer Melissa Lowenkron Darren Hart EVP, Human Resources 20
Slide 21: Financial Snapshot
FINANCIAL SNAPSHOT $ milions Net Sales Gross Margin Adjusted Operating Margin 20% 7.6% 6.0% 39% 43% 80% 61% 57% 7% 9% 8% 6% 21
Slide 22: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS 4/2/22 $261M of liquidity $163M of cash and cash equivalents(1) $193M total debt (1) See our Quarterly Report on Form 10-Q for the quarterly period ended April 2, 2022 filled with the SEC on May 12, 2022. Debt is shown gross of unamortized debt issuance costs of $12.4M. Revo
Slide 23: Key Considerations
KEY CONSIDERATIONS • Large and growing categories • Successful transition to digitally-led organization • Right-sized cost structure • Culture and track record of innovation • Positioned to deliver revenue and profit growth in 2022 and beyond 23
Slide 24: Appendix
Appendix 24
Slide 25: Operating Income Reconciliation
Operating Income Reconciliation 20% 7.6% 6.0% 39% 43% 80% 61% 57% 7% 9% 8% 6% 25