Slide 1: Investor Presentation
INVESTOR PRESENTATION April 2020
Slide 2: Forward-Looking Statement
Some information provided in this document will be forward-looking, and accordingly, is FORWARD-LOOKING subject to the Safe Harbor provisions of the federal securities law. These statements include, but are not limited to, potential impacts to our business related to the COVID-19 pandemic, STATEMENT
Slide 3: Content
• COVID-19 Update CONTENT • Positioned for Global Growth • Financial Results • Appendix 3
Slide 4: CEO quote on COVID-19 and liquidity
“ Despite recent softness in our business due to the COVID-19 pandemic, Crocs remains a strong, vibrant brand that is very well positioned. In the near-term, we have no liquidity concerns and have taken quick action to ensure we will be strongly cash flow positive for the remainder of the year. Over
Slide 5: Our COVID-19 Playbook
OUR COVID-19 PLAYBOOK DEFENSE OFFENSE Lower expenses Four key product pillars Reduce working capital Powerful social & digital marketing Defer capital expenditures Digital-led route to market Maximize liquidity Largest growth opportunity in Asia 5
Slide 6: Defensive Actions
Defensive Actions Lower expenses Reduced salaries and wages, lowered marketing investment, and fewer discretionary expenses Reduce working capital Tightly managing inventories and working with customers and vendors to manage receivables and payables Defer capital expenditures Deferred or cancelled c
Slide 7: Being There for Healthcare
BEING THERE FOR HEALTHCARE 450K+ pairs donated globally to date $11M non-recurring expense in 2020 7
Slide 8: Customer Feedback
10s © Following crocs © To Our Friends in Healthcare, ‘more so in these dificult times. compassion and sels care fr the pepe around you ie more ‘appreciated than you may know or feel ‘ways inspiring his patients and us ith his amazing energy and posit © ge22 07g hae tari cof thote an love them Thal
Slide 9: Customer Feedback
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Slide 10: Long-Term Growth Drivers
LONG-TERM GROWTH DRIVERS Four Key Powerful Social & Digital-Led Largest Growth Product Pillars Digital Marketing Route to Market Opportunity in Asia Clogs: Innovate & grow clog Digital and social focus globally E-commerce: Double-digit growth Asia: Largest long-term growth relevance continues potent
Slide 11: Grow Clog Relevance
PRODUCT & MARKETING Grow Clog Relevance • Market leader in growing $5B* global category • Crocs clog revenues +11% in Q1 2020 to ~66% of footwear sales • Key drivers of clog growth and relevance are: ‒ Impactful collaborations across the globe ‒ Personalization with expanded Jibbitz charms • Stronge
Slide 12: Significant Long-Term Growth Potential in Sandals
PRODUCT & MARKETING Significant Long-Term Growth Potential in Sandals • Growing $30B* global casual sandal market - Fragmented market with no clear leader • Consistent track record of growth ‒ Sandal revenue +10% in 2019 ‒ ~19% of footwear sales ‒ Pre-COVID, three consecutive years of double-digit g
Slide 13: Invest in Visible Comfort Technology
PRODUCT & MARKETING Invest in Visible Comfort Technology • LiteRide™ comfort franchise features foam footbeds • Top 5 franchise for Crocs • Leveraged in other collections, e.g., Brooklyn sandals and Crocs at Work™ 13
Slide 14: Personalization with Jibbitz Charms
PRODUCT & MARKETING Personalization with JibbitzTM Charms • Personalization is a global megatrend • Optimistic story-telling and personalization will be even more critical post COVID-19 • Drives relevance for the Crocs brand • Offers newness and inspiration at a compelling price point • Effect we se
Slide 15: A Marketing Strategy to Drive Brand Heat
PRODUCT & MARKETING A Marketing Strategy to Drive Brand Heat CELEBRITIES Drive mass reach Highest rank ever for Crocs brand In Piper Sandler’s Spring “Taking Stock with Teens” survey MASS INFLUENCERS Drive mass engagement Double-digit growth INTEREST-BASED INFLUENCERS in brand metrics Drive brand re
Slide 16: Powerful Social & Digital Marketing
PRODUCT & MARKETING Powerful Social & Digital Marketing • Evolve “Come As You Are” • Heighten clog relevance and sandal awareness • Expand digital reach and engagement in top 5 markets* • Drive further brand heat and relevance with collaborations • Improve social engagement through locally relevant
Slide 17: Digital-Led Route to Market
CHANNEL Digital-Led Route to Market Digital 30.1% Non-digital 69.9% Digital E-commerce Wholesale Retail Third-party e-tailers Distributors, multi- Company-operated full-price Crocs.com marketplaces (e.g., Amazon, Ilzzo, brand, and brick-and- retail and outlet stores, (e.g., eBay) Zalando) mortar ret
Slide 18: Largest Growth Opportunity in Asia
REGION Largest Growth Opportunity in Asia Asia: greatest long-term growth opportunity • Increase brand recognition and drive clog relevance in China with Tier 1 celebrity, Yang Mi • Multichannel growth in Japan and South Korea • Strong E-commerce growth supported by participation on key marketplaces
Slide 19: Q1 Highlights
Q1 HIGHLIGHTS FINANCIAL RESULTS • Record Americas revenue +14% • Strong e-commerce revenue +16% • Improved adjusted gross margin +110bps to 48.0%* • Strengthened CrocsTM brand with $5M marketing investment • Highest rank ever for CrocsTM in Piper Sandler Spring “Taking Stock with Teens” * See reconc
Slide 20: Q1 Financial Results
Q1 Financial Results 1Q20 vs. LY Revenue $281.1 (3.3%)* Adj. Gross Margin 48.0% +110 bp Gross Margin 47.7% +120 bp Adj. SG&A as % of Revenue 38.7% (340 bp) Adj. Operating Margin 9.4% (230 bp) Adj. EPS $0.22 ($0.14) * Revenue growth on a constant currency basis and excluding impact of store closures.
Slide 21: FY2020 Color
FY2020 Color • Sharpest decline expected in Q2, as retail is materially closed for most of the quarter • E-commerce will continue to outperform in all regions • SG&A of $440-$460M • ~$30-$50M lower than 2019 • $100M lower than 2020 plan • Capital expenditures of ~$30M • Lower than pre-COVID guidance
Slide 22: Appendix
APPENDIX 22
Slide 23: Collaborations
COLLABORATIONS With innovative and collaborative partnerships across the street fashion, high fashion, music and lifestyle categories, each of our collaborations is inherently unique and distinctive in design. • Alife • Peeps • Balenciaga • Pleasures • Barneys • Pizzaslime • Beams • Post Malone
Slide 24: Select Images
SELECT IMAGES Justin Bieber Ariana Grande Miley Cyrus Pharrell Williams Whoopie Goldberg Brooke Shields Source: Google images. 24 Note: None of the above images were sponsored by Crocs.
Slide 25: Select Images
SELECT IMAGES Kim Kardashian Nicole Byers Yetur Gross-Matos Adam Sandler Jared Leto Source: Google images. 25 Note: None of the above images were sponsored by Crocs.
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three Months Ended March 31, _ 2020 2019 (in thousands) GAAPrevenues 281,160 $295,989 GAAPcostofsiles 46998 $158,334 New distribution centers (927) (1,165) Total adjustments (927), (1,275) 135,089 $ (° Represents non-recurring expenses related to our distribution centers in D
Slide 27: Non-GAAP Reconciliation (cont'd)
NON-GAAP RECONCILIATION (cont’d) 27
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