INVES INVE T S OR OR PRES PRE ENT ENT TION First Quarter 2010

Transcription

1 INVESTOR PRESENTATION First Quarter 2010

2 Forward Looking Statements Except for historical information provided herein, this presentation may contain information and statements of a forward looking nature concerning the future performance of Dorel Industries Inc. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. The business of the Company and these forward looking statements are subject to a number of risks and uncertainties that could cause actual results to differ from expected results. Important factors which could cause such differences may include, without excluding other considerations, increases in raw material costs, particularly for key input factors such as particle board and resins; increases in ocean freight container costs; failure of new products to meet demand expectations; changes to the Company s effective income tax rate as a result of changes in the anticipated geographic mix of revenues; the impact of price pressures exerted by competitors, and settlements for product liability cases which exceed the Company s insurance coverage limits. A description of the above mentioned items and certain additional risk factors are discussed in the Company s Annual MD&A and Annual Information o Form, filed with the Canadian ad a securities es regulatory authorities. t The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference. The Company s business, financial condition, or operating results could be materially adversely affected if any of these risks and uncertainties were to materialize. Given these risks and uncertainties, investors should not place undue reliance on forward looking statements as a prediction of actual results. 2 Note: All figures are in US dollars.

3 At a Glance DIVISIONS PRODUCT RANGE OUR PREMIUM BRANDS DOREL EUROPE DOREL JUVENILE GROUP USA DOREL DISTRIBUTION CANADA IGC DOREL PTY (AUSTRALIA) DOREL BRAZIL CYCLING SPORTS GROUP (CSG) PACIFIC CYCLE APPAREL &FOOTWEAR GROUP (AFG) Children s car seats Strollers High chairs Play yards Toddler beds Early learning/infant health/safety aids Swings/stationary activity centres Bicycles Performance apparel Jogging strollers Swing sets Ride on toys Other recreational products AMERIWOOD COSCO HOME & OFFICE DOREL ASIA DOREL HOME PRODUCTS ALTRA FURNITURE Ready to assemble furniture Folding chairs and tables Stepstools Ladders Futons Bunk beds Upholstered furniture 3 3

4 Recent Acquisitions 2003 Ampa France (Dorel France) 2004 Pacific Cycle 2007 IGC Australia (55% interest) 2008 Cannondale/SUGOI 2008 PTI Sports 2009 Baby Art (Hoppop Brand) 2009 Dorel Brazil (70% interest) 2009 IronHorse Bicycles 2009 Gemini Bicycles 2009 Hot Wheels, Circle Bikes 4

5 Revenue by Segment % 32% 46% 21% 30% 49% JUVENILE RECREATIONAL/LEISURE HOME FURNISHINGS 5

6 Geographic Distribution of Sales (by customer) % 2% 27% 29% 63% 6% 6% 63% US CANADA EUROPE OTHER 6

7 Juvenile Segment Years Ended December Revenues $ 995,014 $ 1,073,722 Gross Profit 274, ,680 Earnings from operations* 92, ,837 *Includes out of period F/X (losses)/gains$ (12.6) $ 8.9 Excluding F/X effect 105, ,937 7

8 A World Leader In Juvenile World s largest Juvenile Products Company in our categories. Consistent growth: 5% average annual growth 6% earnings from operations CAGR Intense product development = pipeline of new products 8

9 A World Leader in Juvenile DOREL NORTH AMERICA in the Market Booster Car Seats Convertible Car Seats Infant Car Seats Strollers Walkers High Chairs N O 1 DOREL DOREL Graco DOREL DOREL Graco N O 2 Graco Evenflo Evenflo Graco Evenflo DOREL N O 3 Evenflo Graco Dorel McLaren/Kolkraft Fisher Price Fisher Price Playards Travel Systems Bassinets Swings Bath Tubs Bath Accessories N O 1 Graco Graco Graco Fisher Price Fisher Price Munchkins N O 2 DOREL DOREL Kolkraft Graco DOREL Sassy N O 3 Evenflo Evenflo Delta Kids II RC2 Kids II Bedrails Feeding Booster Seat Potties Bouncers Diaper Pails Gates N O 1 Summer DOREL DOREL Kids II Playtex Evenflo N O 2 RC2 Fisher Price Fisher Price Fisher Price Baby Trend RC2 N O 3 DOREL Summer RC2 Summer DOREL Northstates Homesafety Travel Safety Infant Health Monitors Feeding Infant Carriers N O 1 DOREL Fisher Price DOREL DOREL Playtex Evenflo N O 2 Kidco Munchkin RC2 Summer Evenflo Infantino N O 3 PrivateLabel DOREL Summer Fisher Price Avent Baby Bjorn Company estimates 9

10 Innovation North America Air Protect t - developed d by DJG and Kettering University Revolutionary, ground breaking safety feature designed to protect children in side impact collisions Air Protect TM platform evolving with new models to be introduced at lower price points European version introduced Maxi Cosi Rodi 10

11 A World Leader In Juvenile Dorel Europe A major player close to US$450 million in sales Strong brands Traditionally sales to Juvenile product chains, boutiques, independents Building mass merchant relationships General softness; no loss of market share Strong new product introductions Introducing products in lower to mid-price point categories, eg. Safety 1 st mid-price 11

12 A World Leader In Juvenile DOREL EUROPE in the Market France Spain Italy Belgium Portugal Switzerland Netherlands Germany UK Strollers N O 1 DOREL PLAY/JANE CHICCO DOREL DOREL CHICCO DOREL HAUCK GRACO N O 2 CHICCO DOREL PEG PERICLES CHICCO DOREL BUGABOO HARTAN M&P N O 3 MACLAREN CHICCO CAM BUGABOO BEBECAR BUGABOO MUTSY TEUTONIA MOTHERCARE Carseats N O 1 DOREL PLAY/JANE CHICCO DOREL DOREL DOREL DOREL RÖMER DOREL N O 2 TEAM TEX DOREL CAM RÖMER CHICCO RÖMER RÖMER DOREL BRITAX N O 3 RÖMER CHICCO INGLESINA CYBEX BEBECAR RECARO TEAM TEX RECARO GRACO Furniture N O 1 CHICCO JANE CHICCO CHICCO CHICCO CHICCO CHICCO HAUCK M&P N O 2 DOREL CHICCO PERICLES BREVI DOREL STOKKE TOPMARK GRACO CHICCO Small Nursery Product N O 1 AVENT CHICCO CHICCO AVENT CHICO AVENT AVENT NUK AVENT N O 2 TIGEX/NUK AVENT CHICCO AVENT BIBI CHICCO AVENT JACKEL Company estimates 12

13 Innovation Europe Quinny Senzz designed by Dorel Europe Lightweight Lightweight, compact compact, easy to maneuver Features a one hand,, flat one piece p fold. Like a full feature stroller Naturally shaped seat reclines for th child s the hild seating ti comfort f t 13

14 Innovation Europe Maxi-Cosi FamilyFix Revolutionary in car seat safety & convenience Uses IsoFix attachment for top rate safety Only one base required for two consecutive age car seats (up to years old) Light/sound confirmation of correct installation 14

15 Recreational/Leisure Segment Years Ended December Revenues $ 681,366 $ 656,613 Gross Profit 153, ,804 Earnings from operations 39,837 41,874 15

16 Recreational/Leisure Three distinct operating divisions Cycling Sports Group (CSG) IBD Division Premium Brands Growing dealer network Growing European distribution Focusing on breakthrough technology Build Dorel s bike business to # 1 position 16

17 Recreational/Leisure Pacific Cycle Mass merchants/sporting goods chains Bicycle parts/accessories (PTI) Provides one stop shop for buyers Strong first quarter at mass merchants 17

18 Recreational/Leisure Apparel Footwear Group (AFG) Growing performance apparel divisionincorporatesincorporates SUGOI, Cannondale, GT, Schwinn, IronHorse and Mongoose lines New 70,000 sq. ft. Vancouver facility New high speed equipment Focus custom apparel Objective triple business in 5 years 18

19 Recreational/Leisure Worldwide Centers of Excellence Strategy Evolve as global innovation leader in R/L markets 5 Centers of Excellence around the world New talent recruited, structure simplified around brands to be more consumer driven 19

20 Recreational/Leisure 2009 Acquisitions Assets of Iron Horse Bicycles Best known for downhill/extreme trail bikes Adds highly recognized brandto R/L portfolio Targeting Sporting Goods channel Assets of Australia s s Gemini Bicycles New division: Cycling Sports Group, Australia Assets of Hot Wheels and Circle Bikes New division: Cycling Sports Group, UK 20

21 Recreational/Leisure A renewed commitment to the Schwinn brand Schwinn is the bicycle most Americans learned to ride on Multi million dollar national marketing, dealer activation and support program Objective: re energize America s most iconic bicycle brand Full page magazine ads, national cable TV and social media Dealer promotions, co op advertising, special events Updated logo renews nostalgic feeling Theme: Bicycle bell rings in Schwinn Br ring ding: Let s Go For A Ride! 21

22 Home Furnishings Segment Years Ended December Revenues $ 463,734 $ 451,545 Gross Profit 77,308 50,915 Earnings from operations 36,696 7,964 22

23 Growing Home Furnishings Much Improved Ameriwood solidly profitable Increased RTA capacity Significant ifi improvement at Cosco Home & Office (metal folding furniture, step stools) Focus on reasonably priced furniture sold at mass merchants 23

24 Proven Corporate Strategy Recession resistant products Right products, right price points, right time North American consumers are shopping more at mass merchants Ensuring market flexibility in Europe, building relationships with mass merchants Investing heavily in product innovation Known brands Generate strong cash flow 24

25 Sustainability Philosophy Active in sustainability on several fronts throughout all three segments By nature of large volume of units sold, Dorel s eco conscious programs make an important contribution by reducing their environmental impact Despite goal of keeping prices to consumers low, Dorel intends to remain proactive in its sustainability initiatives Strict policy in place to ensure sustainable business practices of suppliers 25

26 Sustainability Initiatives DHP: the first company supplying the mass market retail segment with a futon made from 100% FSC certified wood Altra Furniture: uses Bamboo in some furniture; Smart Program 100% non virgin wood Ameriwood: 1. All saw dust, scrap, wood chips are recycled and returned to suppliers manufacturing processes 2. Over 500 tons of scrap metal is recycled annually LEED Gold Certified distribution facility reduces carbon foot print with two coast distribution system Safety 1 st Nature Next Collection features products made from eco conscious materials Warehouses are equipped with light sensors to eliminate entire areas being lit needlessly 26

27 Full Year 2009 (in millions of US$, other than EPS) Revenue $ 2,140.1 $ 2,181.9 Pre-tax income Net income EPS (diluted) 3.21 (1) 3.38 (2) (1) Includes after-tax out of period F/X loss of $0.30 / diluted shares (2) Includes after-tax tax out of period F/X gain of $0.22 / diluted shares 27

28 First Quarter months (in millions of US$, other than EPS) Revenue $ 596,313 $ 525,230 Net income 37,367 28,029 EPS (diluted)

29 New Long Term Financing US$50 million Series A Senior Guaranteed Notes 4.24% interest Principal repayment due April 2015 US$150 million Series B Senior Guaranteed Notes 5.14% interest Principal repayments commence April 2013, due April

30 Outlook 2010 Established opportunities in Juvenile and Recreational/Leisure Consumer confidence returning Foresee organic growth through new international markets, new products Continued innovative juvenile product introductions through 2010 Increased IBD bike sales due to exciting new models Build on successes achieved in Home Furnishings Margins could be affected by rising commodity/freight costs Excellent momentum places Dorel in advantageous position 30

31 Why Invest in Dorel? A consistent record of successful acquisitions A focus on Juvenile and Bikes where Dorel is a key player A strong performance in Home Furnishings A portfolio of known, premium brands Product development capabilities that drive growth A strategy of the right products and varied price points Dedicatedquality control/customer service by solid Asian presence Established customer relationships Strong cash flow Payment of a quarterly dividend 31

32 Question & Answer Period QUESTION & ANSWER PERIOD

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