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8/14/2019 DECK Deckers Outdoors Jan 2010 Presentation
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Investor Presentation
12thAnnual ICR XChange
January 2010
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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 similar expressions.
In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances are forward-looking statements. Forward-
looking statements are subject to known and unknown risks
and uncertainties, including those described in the Companys
filings with the Securities and Exchange Commission. In
addition, actual results could differ materially from those
suggested by the forward-looking statements, and therefore
you should not place undue reliance on the forward-looking
statements.
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Key Investment Highlights
Operate 5 non-competing lifestyle brands
UGGAustralia / Teva / Simple Shoes / TSUBO
Ahnu
Meaningful domestic growth opportunities
Significant untapped international potential ~ 30% oftotal sales by 2012
Solid earnings, cash flow and strong balance sheet Seasoned management team with strong track record
of success
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Brand
LTM NetSales @9/30/09
87% Accessible luxury comfort
10% Outdoor performance
2% Sustainability with style
1% Style & comfort , Outdoor lifestyle
Brand Development Platform
Grow lifestyle brands into global market leaders.
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2010 Corporate Strategy
Continue to drive UGG Australia growth - transcend
great products to grow a great brandAccelerate international growth
Grow retail business
Continue to develop infrastructure to support growth
Cultivate incubator brands
Explore cash usage - internal investment and/orpotential acquisitions
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UGG Brand: The Premier Brand in Luxury andComfort
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UGG Brand Profile
Lifestyle brand based on accessible comfort andaffordable luxury
Once you discover comfort you dont go back todiscomfort.
Multiple collections of boots and casual footwear for
women, men, and children
Year round consumer demand for product line
Strong retail relationships with key department stores,
specialty stores, and independents
Controlled premium distribution
Accelerating international and retail expansion
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UGG Brand Performance Explosive Growth
- Eleven consecutive years of double-digit growth
Note: Net sales in millions.
Goal
$24 $37
$116$172
$212
$348
$900
2002 2003 2004 2005 2006 2007 2008 2012
$582
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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 international presence Increase emphasis on marketing
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Tier 1(Innovators)20% of UGG
members
Tier 2(Influencers)39% of UGG
members
Tier 3(Experimenters)
30% of UGGmembers
Tier 4(Followers)11% of UGG
members
Extremely
innovative/
Earlyadopters
Notinnovative/
Late
adopters
UGG Brand Growth Strategy
High Potential Brand
Quantitative JWT online survey of email database members, 11/09.
UGG Australia Adoption Profile
UGG Brand profiles as an emerging brand with high growth potential
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HowlikelyareyoutorecommendUGGAustraliaproductstosomeoneyouknow?
Answersonascalefrom010
Net Promoter Score*
All-StarsUSAA 82%
Harley-Davidson 81%Costco 79%
UGG 75%Amazon 73%
Chick-Fil-A 72%Ebay 71%
Vanguard 70%SAS 66%
Apple 66%Intuit 58%Cisco 57%
Federal Express 56%Southwest Airl ines 51%American Express 50%
UGG Brand Growth Strategy
High Potential Brand
* Net Promoter is a customer loyalty metric developed by Fred Reichheld, Bain & Company, and Satmetrix.
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UGG Brand Growth Strategy
High Potential Brand
39% of members;typically enter via
Classic Boot
48% of members;2nd and 3rd items
Slippers, Knits/Fashion Boots
13% of members;Fashion Boots, Accessories
Quantitative JWT online survey of UGGAustralia.com email database members, 11/09.
Key takeaways:
UGG adoption profi le is very balanced, with innovators continuing to play a key role
Net Promoter Score indicates high loyalty and brand potential
New categories are succeeding at keeping the brand fresh and increasing share of closet
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UGG Brand Growth Strategy
Diversify Product Line
Expand cold weather collection
Grow mens & kids businesses
Continue to expand Spring business
Further develop apparel & accessories collections
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UGG Brand Growth Strategy
Diversify Product Line
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UGG Brand Growth Strategy
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 100 total domestic shop-in-shops for 2010 vs. 70 in 2009 and
130 total internationally vs. 80 in 2009
Selectively open new premium doors
Harrods in London Aiden in New York
Increase Retail Penetration Wholesale
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Increase Retail Penetration Company owned stores
Currently operate worldwide10 full price stores and 8 outlets allprofitable with accretive margins, fast paybacks and strong sales persquare foot
Premium locations in major metropolitan cities around the world
Plan to open approximately 10 stores per year as appropriate locationsemerge
Manchester Bicester Tokyo
UGG Brand Growth Strategy
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UGG Brand Growth Strategy
Expand International Presence
Establish subsidiaries in key developed markets
Establish/maintain third party distributor relationships inless developed markets
Continue to develop subsidiary infrastructure platforms inEurope and Asia
Expand Company owned retail stores
International sales goal ~ 30% of total sales in 2012
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UGG Brand % of International Sales by Country
Global sales would increase 50% if international penetration, in existing markets(excluding China and Russia) , would equal ~ 1/2 of US per capita penetration.
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UGG Brand Growth Strategy
Increase awareness of the breadth of our product line to keepthe adoption curve dynamic
Expand our brand equity by communicating our authenticheritage and superior product quality
Tap into the phenomenal love for this brand via social media
UGG Brand is in the top 1% of fan pages with 289,000fans on Facebook (despite limited investment to date)
Increase Emphasis on Marketing
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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 andgrowing company owned retail
Increasing emphasis on marketing
International growth driven by:
Increasing penetration/direct distribution in key markets Opening new markets
Growing Company owned retail
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Teva Brand Outdoor Performance
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Re-positioned Teva as an iconic adventure water brand forthose who seek performance, camaraderie and freedom
Younger, more active consumer
Year-round product line with superior wet weather technology
Diversified distribution strategy
Improved retail presence and online
More targeted, non-traditional marketing
Teva Brand Growth Strategy
Sales goal - $120 million in 2012
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GROWTHBEST CUSTOMERS
Teva Brand Consumer Profiles
LOYALIST FLIP FLOPFANATIC
GEARJUNKIE
FORMERLYOUTDOORS
CASUALBUYER
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Simple Shoes Sustainability with Style
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Simple Brand Growth Strategy
Introducing a new line of thinking: Consumers no longer have tochoose style over sustainability
Increase awareness and distribution behind brand strategy
Target is youthful, concerned about the environment, andlooking for practical ways to make a positive difference
Branding is more human, playful, optimistic and engaging
Environmental benefits are aspirational but also practical
Product that melds style, comfort and sustainability
Focus on sneakers
Premium distribution strategy and superior service
Sales goal - $35 million by 2012
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29
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TSUBO Brand Style Meets Comfort
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TSUBO Brand Style Meets Comfort
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TSUBO Brand Style Meets Comfort
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TSUBO Brand Style Meets Comfort
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TSUBO Brand Growth Strategy
Reinforce heritage as innovators - the first to create the confluence offashion and athletic shoes providing the comfort of a sneaker +
cutting edge style
Target consumer is the creative class influencer Men and women, live in metropolitan areas, enjoy the
discovery of finding and adopting new fashion brands
Selective distribution in urban boutiques and high enddepartment stores.
2010 is the bridge year back to the original TSUBO heritage anddistinctive voice
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Ahnu Brand Performance Meets Lifestyle
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Ahnu Brand Growth Strategy
Ahnu is a fresh and modern interpretation of the hikingshoe
Lightweight and versatile enough to transition fromtrail to pavement
Infusion of fashion and color Neutral Positioning System (NPS) keeps foot
centered without the heaviness of a traditionalhiking boot
Target consumer is the Outdoor Enthusiast who seeksbalance lifestyle between work and play
Blurring the Lines between Performance andLifestyle
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Ahnu - Performance Meets Lifestyle
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Ahnu - Performance Meets Lifestyle
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FINANCIAL PERFORMANCE
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M i P f
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Margin Performance
1) Operating income results are pro forma, adjusted to exclude litigation expenses (income) of ($0.5)M in 2003 andimpairm ent losses of $15.3 million in 2006 and $35.8 million in 2008.
2) As o ri ginal ly f il ed before r es tatem en t.
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Peer Group Performance Margins
Note: Based on TTM as of most recent reported quarter. Deckers operating margin excludes impairment charges.
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EPS Performance
1) Results are pro form a, adjusted to exclude lit igation expense/(incom e) of ($0.03) in 2003.
2) Results are before restatement.
3) Results are before impairment and restatement.
4) Results are before impairment
Balance Sheet & Cash Flow Highlights: Twelve Months
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Balance Sheet & Cash Flow Highlights: Twelve MonthsEnding
Notes: Amounts in millions
12/31/2006 12/31/2007 12/31/2008 9/30/2009
Cash and short-term investments $99 $168 $195 $126
Total debt $ - $ - $ - $ -
Total equity $210 $299 $385 $421
Total capitalization $210 $299 $385 $421
Cash flow from operations $49 $61 $53 $100
Capital expenditures $6 $6 $22 $16
Depreciation, amortization &accretion $3 $4 $6 $9
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2012 Sales Goal Growth Targets
$1.1 bil lion
UGG Australia: $900 Million
Teva: $120 Million
Simple: $35 Million
TSUBO and Ahnu: $45 million
Key Investment Highlights
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Key Investment Highlights
Operate 5 non-competing lifestyle brands
Meaningful domestic growth opportunities
Significant untapped international potential ~ 30% oftotal sales by 2012
Solid earnings, cash flow and strong balance sheet
Seasoned management team with strong track record
of success