Slide 1: ICR XChange – January 13, 2014
ICR XCHANGE – JANUARY 13, 2014
Slide 2: Safe Harbor Statement
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 described in such forward-look
Slide 3: Compelling Investment Opportunity
1. GLOBAL GROWTH COMPANY 2. DIVERSIFIED BUSINESS MODEL 3. OPPORTUNITIES FOR LEVERAGE COMPELLING INVESTMENT OPPORTUNITY
Slide 4: Fossil Group
FOSSIL GROUP >« THE SEAORE PORTFOLIO FOSSIL
Slide 5: [LOGO]
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Slide 6: [LOGO]
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Slide 7: Brand portfolio
& MICHAEL KORS MARC BY MARC JACOBS BURBERRY EMPORIOS#ARMANI DIESEL @zopiac 4 SWISS MADE 1862 DKNY LAGERFELD i) MiCRELE AIX whe adidas a. FOSSIL
Slide 8: Strategic Growth Drivers
STRATEGIC GROWTH DRIVERS LARGE GROWING CATEGORY COMPETITIVE ADVANTAGES RISE OF LIFESTYLE BRANDS
Slide 9: Global Watch Industry Growth
GLOBAL WATCH INDUSTRY GROWTH Watch market continues to outpace GDP growth Fossil Group consolidated growth 2008-2013: 15.7% CAGR Source: Euromonitor International 2013 (watch market values reflect year-over-year exchange rates and current prices) Global watch market represented at retail in billions
Slide 10: Competitive Advantages
COMPETITIVE ADVANTAGES MANUFACTURING AND SOURCING DESIGN AND CREATIVITY GLOBAL SUPPORT STRUCTURE GLOBAL MANAGEMENT GLOBAL DISTRIBUTION
Slide 11: Rise of Lifestyle Brands
RISE OF LIFESTYLE BRANDS Global Watch Market Share Gainers & Losers (Share Gain/Loss 2008 - 2012 for watches < $1,000) Source: Euromonitor International 2013 Traditional Watch Companies +1.5% +3.0% +2.0% 0 +0.5% -1.0% +1.0% -0.5% -1.5% +2.5% +3.5%
Slide 12: 1. Global Growth Company
1. GLOBAL GROWTH COMPANY COMPELLING INVESTMENT OPPORTUNITY
Slide 13: Fossil Group Sales Growth
FOSSIL GROUP SALES GROWTH * Trailing Twelve Months ended Q3 2013. Dollars in billions.
Slide 14: 2. Diversified Business Model
1. GLOBAL GROWTH COMPANY COMPELLING INVESTMENT OPPORTUNITY
Slide 15: Compelling Investment Opportunity
COMPELLING INVESTMENT OPPORTUNITY
Slide 16: Diversified Business Model
BRANDS PRICE POINTS CATEGORIES REGIONS DIVERSIFIED BUSINESS MODEL
Slide 17: Opportunities: America Distribution
OPPORTUNITIES RETAIL PRODUCTIVITY OUTLET EXPANSION SHOP IN SHOPS BRAND LEVERAGE AMERICA DISTRIBUTION 273 RETAIL STORES DEPARTMENT STORES SPECIALTY CHAINS INDEPENDENT RETAILERS LICENSED BOUTIQUES ECOMMERCE * Trailing Twelve Months ended Q3 2013. MAJOR MARKETS UNITED STATES CANADA MEXICO SALES: $1.7B*
Slide 18: Opportunities: Europe Distribution
OPPORTUNITIES RETAIL PRODUCTIVITY NEWER MARKETS BRAND LEVERAGE OUTLET EXPANSION EUROPE DISTRIBUTION 167 RETAIL STORES INDEPENDENT WATCH DEALERS DEPARTMENT STORES SHOP IN SHOPS CONCESSIONS ECOMMERCE * Trailing Twelve Months ended Q3 2013. MAJOR MARKETS GERMANY UK FRANCE DISTRIBUTOR MARKETS SALES: $1.
Slide 19: Opportunities: Asia Distribution
OPPORTUNITIES CHINA DISTRIBUTION BRAND LEVERAGE SWISS ASIA DISTRIBUTION 103 RETAIL STORES CONCESSIONS SPECIALTY RETAILERS DEPARTMENT STORES BOUTIQUES * Trailing Twelve Months ended Q3 2013. MAJOR MARKETS JAPAN SOUTH KOREA AUSTRALIA CHINA SALES: $0.5B*
Slide 20: Market Share Opportunity
MARKET SHARE OPPORTUNITY Source: Euromonitor International 2013 2013 Market Size & Growth for Watches < $1,000 Forecasted 2013 – 2018 CAGR Market Share
Slide 21: Compelling Investment Opportunity
1. GLOBAL GROWTH COMPANY 2. DIVERSIFIED BUSINESS MODEL COMPELLING INVESTMENT OPPORTUNITY
Slide 22: 3. Opportunities for Leverage
COMPELLING INVESTMENT OPPORTUNITY
Slide 23: Margin Expansion Opportunities
MARGIN EXPANSION OPPORTUNITIES INTERNATIONAL GROWTH OUTLETS TECHNOLOGY PROCESS EFFICIENCY SUPPORT STRUCTURE OPTIMIZATION * Trailing Twelve Months ended Q3 2013. Dollars in millions. 2013 * 2008 Net Sales 3,145 $ 1,583 $ Gross Profit 1,792 851 Gross Margin 57.0% 53.8% Expenses 1,245 645 Expense Rate
Slide 24: Financial Leverage: Share Repurchase
FINANCIAL LEVERAGE SHARE REPURCHASE $454M – NINE MONTHS ENDED Q3 2013 17% FEWER SHARES OVER LAST 3 YEARS OPERATING CASH FLOW * Trailing Twelve Months ended Q3 2013. Dollars in millions.
Slide 25: Compelling Investment Opportunity
1. GLOBAL GROWTH COMPANY 2. DIVERSIFIED BUSINESS MODEL 3. OPPORTUNITIES FOR LEVERAGE COMPELLING INVESTMENT OPPORTUNITY
Slide 26: Thanks for Stopping By!
THANKS FOR STOPPING BY! FOSSIL