dorel ir march q409 (2) march_q409.pdf · recent acquisitions 2003 ampafrance (dorel france) 2004...
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Investor PresentationInvestor PresentationApril 2010
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FFORWARDORWARDLLOOKINGOOKING SSTATEMENTSTATEMENTS
Except for historical information provided herein, this presentation may contain informationand statements of a forward‐looking nature concerning the future performance of DorelIndustries Inc. These statements are based on suppositions and uncertainties as well as onmanagement's best possible evaluation of future events The business of the Company andmanagement s best possible evaluation of future events. The business of the Company andthese forward‐looking statements are subject to a number of risks and uncertainties thatcould cause actual results to differ from expected results. Important factors which could causesuch differences may include, without excluding other considerations, increases in rawmaterial costs, particularly for key input factors such as particle board and resins; increases inocean freight container costs; failure of new products to meet demand expectations; changesocean freight container costs; failure of new products to meet demand expectations; changesto the Company’s effective income tax rate as a result of changes in the anticipated geographicmix of revenues; the impact of price pressures exerted by competitors, and settlements forproduct liability cases which exceed the Company’s insurance coverage limits. A description ofthe above mentioned items and certain additional risk factors are discussed in the Company’sAnnual MD&A and Annual Information Form filed with the securities regulatory authoritiesAnnual MD&A and Annual Information Form, filed with the securities regulatory authorities.The risk factors outlined in the previously mentioned documents are specifically incorporatedherein by reference. The Company’s business, financial condition, or operating results couldbe 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.looking statements as a prediction of actual results.
Note: All figures are in US dollars.
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AATT AA GGLANCELANCE
DIVISIONS PRODUCT RANGE OUR PREMIUM BRANDS
DOREL EUROPEDOREL JUVENILE GROUP USA
Children’s car seatsStrollers High chairs
DOREL DISTRIBUTION CANADAIGC DOREL PTY (AUSTRALIA)DOREL BRAZIL
Playpens Toddler bedsEarly learning/infanthealth/safety aidsCribs, dressers
CYCLING SPORTS GROUP (CSG)PACIFIC CYCLEAPPAREL & FOOTWEAR GROUP(AFG)
Bicycles Fitness apparelJogging strollersSwing sets Ride‐on toysOthers recreationalproductsproducts
AMERIWOODCOSCO HOME & OFFICEDOREL ASIA
Ready‐to‐assemblefurnitureMetal folding furnitureDOREL ASIA
DOREL HOME PRODUCTSALTRA FURNITURE
Metal folding furnitureStep stools LaddersFutons Bunk bedsUpholstery
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RRECENTECENT AACQUISITIONSCQUISITIONS
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 Baby Art (Hoppop Brand)
2009 Dorel Brazil (70% interest)
2009 IronHorse Bicycles2009 IronHorse Bicycles
2009 Gemini Bicycles
2009 Hot Wheels Circle Bikes
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2009 Hot Wheels, Circle Bikes
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RREVENUEEVENUE BYBY SSEGMENTEGMENT
20092009
JUVENILE
RECREATIONAL/LEISURE46%
32%
22%
/
HOME FURNISHINGS
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GGEOGRAPHICEOGRAPHIC DDISTRIBUTIONISTRIBUTION OFOF SSALESALES
((BYBY CUSTOMERCUSTOMER))((BYBY CUSTOMERCUSTOMER))
20092009
2%
US
CANADA
EUROPE
29%
63%6% EUROPE
OTHER
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MMANAGINGANAGING THETHE EECONOMICCONOMIC DDOWNTURNOWNTURN
2009
Highly proactive in product development
Invested in 5 acquisitions
Opening to mid‐price point products maintained strong point‐of‐sale levels
Exciting new product introductionsExciting new product introductions
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JJUVENILEUVENILE SSEGMENTEGMENT
Years Ended December 30
2009 2008
Revenues $ 995,014 $ 1,073,722
Gross Profit 274,497 309,680
Earnings from operations* 92,534 126,837
*Includes out of period F/X (losses)/gains $ (12.6) $ 8.9
Excluding F/X effect 105,134 117,937
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A WA WORLDORLD LLEADEREADER IINN JJUVENILEUVENILE
World’s largest Juvenile Products Company in our categories.
Consistent growth:Consistent growth:
5% average annual growth
6% earnings from operations CAGR6% earnings from operations CAGR
Intense product development = pipeline of new products
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A WA WORLDORLD LLEADEREADER ININ JJUVENILEUVENILEDOREL NORTH AMERICA in the MarketDOREL NORTH AMERICA in the Market
Booster Car Seats Convertible Car Seats Infant Car Seats Strollers Walkers High Chairs
NO 1 DOREL DOREL Graco DOREL DOREL Graco
O fl fl flNO 2 Graco Evenflo Evenflo Graco Evenflo DOREL
NO 3 Evenflo Graco Dorel McLaren/Kolkraft Fisher Price Fisher Price
Playards Travel Systems Bassinets Swings Bath Tubs Bath Accessories
NO 1 Graco Graco Graco Fisher Price Fisher Price Munchkins
NO 2 DOREL DOREL Kolkraft Graco DOREL SassyN 2 DOREL DOREL Kolkraft Graco DOREL Sassy
NO 3 Evenflo Evenflo Delta Kids II RC2 Kids II
Bedrails Feeding Booster Seat Potties Bouncers Diaper Pails Gates
NO 1 Summer DOREL DOREL Kids II Playtex Evenflo
NO 2 RC2 Fisher Price Fisher Price Fisher Price Baby Trend RC2
NO 3 DOREL Summer RC2 Summer DOREL Northstates
Homesafety Travel Safety Infant Health Monitors Feeding Infant Carriers
NO 1 DOREL Fisher Price DOREL DOREL Playtex Evenflo
NO 2 Kidco Munchkin RC2 Summer Evenflo Infantino
NO 3 Private Label DOREL Summer Fisher Price Avent Baby Bjorn
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Company estimates
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IINNOVATIONNNOVATION –– NNORTHORTH AAMERICAMERICA
Revolutionary ground breaking safety
Air Protect™ ‐ developed by DJG and Kettering University
Revolutionary, ground‐breaking safety feature designed to protect children in side impact collisionsInitial exclusive BRU launch in JulyInitial exclusive BRU launch in July enhanced DJG resultsAdditional retailers commencingJanuary 2010January 2010Air ProtectTM platform evolving withnew models to be introduced
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A WA WORLDORLD LLEADEREADER IINN JJUVENILEUVENILE
Dorel Europe
A major player – close to US$450 million in salesA major player close to US$450 million in sales
Strong brands
Majority of sales to Juvenile product chains boutiquesMajority of 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
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A WA WORLDORLD LLEADEREADER ININ JJUVENILEUVENILE
France Spain Italy Belgium Portugal Switzerland Netherlands Germany UK
S ll
DOREL EUROPE in the MarketDOREL EUROPE in the Market
NO 1 DOREL PLAY/JANE CHICCO DOREL DOREL CHICCO DOREL HAUCK GRACO
NO 2 CHICCO DOREL PEG PERICLES CHICCO DOREL BUGABOO HARTAN M&P
NO 3 MACLAREN CHICCO CAM BUGABOO BEBECAR BUGABOO MUTSY TEUTONIA MOTHERCARE
Strollers
NO 1 DOREL PLAY/JANE CHICCO DOREL DOREL DOREL DOREL RÖMER DOREL
NO 2 TEAM‐TEX DOREL CAM RÖMER CHICCO RÖMER RÖMER DOREL BRITAX
NO 3 RÖMER CHICCO INGLESINA CYBEX BEBECAR RECARO TEAM‐TEX RECARO GRACO
Carseats
NO 1 CHICCO JANE CHICCO CHICCO CHICCO CHICCO CHICCO HAUCK M&P
NO 2 DOREL CHICCO PERICLES BREVI DOREL STOKKE TOPMARK GRACO CHICCO
Furniture
NO 1 AVENT CHICCO CHICCO AVENT CHICO AVENT AVENT NUK AVENT
NO 2 TIGEX/NUK AVENT CHICCO AVENT BIBI CHICCO AVENT JACKELSmallNurseryProduct
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Company estimates
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IINNOVATIONNNOVATION –– EEUROPEUROPE
Lightweight compact easy to
Quinny Senzz – designed by Dorel Europe
Lightweight, compact, easy to maneuver
Features a one‐hand, flat one‐piece , pfold. Like a full‐feature stroller
Naturally shaped seat reclines for th hild’ ti f tthe child’s seating comfort
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IINNOVATIONNNOVATION –– EEUROPEUROPE
Maxi‐Cosi FamilyFixRevolutionary in car seat safety &
iUses IsoFix attachment for top‐rate safety
convenience
p y
Only one base required for two consecutive age car seats (up to 3 5 years old)seats (up to 3.5 years old)
Light/sound confirmation of correct installation
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RRECREATIONALECREATIONAL//LLEISUREEISURE SSEGMENTEGMENT
Years Ended December 30
2009 2008
Revenues $ 681,366 $ 656,613
Gross Profit 153,739 150,804
Earnings from operations 39,837 41,874
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RRECREATIONALECREATIONAL//LLEISUREEISURE
Three distinct operating divisions
Cycling Sports Group (CSG)Cycling Sports Group (CSG)
IBD Division
Premium BrandsPremium Brands
Growing European distribution
Focusing on breakthrough technologyFocusing on breakthrough technology
Build Dorel’s bike business to # 1 position
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RRECREATIONALECREATIONAL//LLEISUREEISURE
Pacific Cycle
Mass merchants/sporting goods chainsMass merchants/sporting goods chains
Bicycle parts/accessories (PTI)
Provides one‐stop shop for buyersProvides one stop shop for buyers
Non‐bike platform of products
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RRECREATIONALECREATIONAL//LLEISUREEISURE
Apparel Footwear Group (AFG)
Growing performance apparel division incorporates SUGOIGrowing performance apparel division incorporates SUGOI, Cannondale, GT, Schwinn, IronHorse and Mongoose lines
New 70,000 sq. ft. Vancouver facility
New high speed equipment
New apparel industry veteran as President
Focus – custom apparel
Objective – triple business in 5 years
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RRECREATIONALECREATIONAL//LLEISUREEISURE
Worldwide Centers of Excellence Strategy
Evolve as global innovation leader in R/L marketsg /
5 Centers of Excellence around the world
Expansion of Bethel, CT into world‐class Innovation Center for all R/L brandsfor all R/L brands
Bedford, PA to test and assemble
Manufacturing of frames at new Taichung, Taiwan Centerg gof Excellence
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RRECREATIONALECREATIONAL//LLEISUREEISURE
2009 Acquisitions
Assets of Iron Horse BicyclesAssets of Iron Horse Bicycles
Best known for downhill/extreme trail bikes
Adds highly recognized brand to R/L portfolioAdds highly recognized brand to R/L portfolio
Targeting Sporting Goods channel
Assets of Australia’s Gemini BicyclesAssets of Australia s Gemini Bicycles
New division: Cycling Sports Group, Australia
Assets of Hot Wheels and Circle BikesAssets of Hot Wheels and Circle Bikes
New division: Cycling Sports Group, UK
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RRECREATIONALECREATIONAL//LLEISUREEISURE
A renewed commitment to the Schwinn brand
Schwinn is the bicycle most Americans learned to ride onSchwinn 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
D l i d i i i lDealer promotions, co‐op advertising, special events
Updated logo renews nostalgic feeling
Theme: Bicycle bell rings in Schwinn Br’ring ding: “Let’s GoTheme: Bicycle bell rings in Schwinn ‐‐ Br ring‐ding: Let s Go For A Ride!”
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HHOMEOME FFURNISHINGSURNISHINGS SSEGMENTEGMENT
Years Ended December 30
2009 2008
Revenues $ 463,734 $ 451,545
Gross Profit 77,308 50,915
Earnings from operations 36,696 7,964
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GGROWINGROWING HHOMEOME FFURNISHINGSURNISHINGS –– MMUCHUCH IIMPROVEDMPROVED
Ameriwood – solidly profitable
Increased RTA capacity
Significant improvement at Cosco Home & Office (metal folding furniture, step stools)
Focus on reasonably priced furnitureFocus on reasonably priced furniture sold at mass merchants
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PPROVENROVEN CCORPORATEORPORATE SSTRATEGYTRATEGY
Recession resistant products
Right products right price points right timeRight 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
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SSUSTAINABILITYUSTAINABILITY PPHILOSOPHYHILOSOPHY
Active in sustainability on several fronts throughout allthree segments
By nature of large volume of units sold, Dorel’s eco‐conscious programs make an important contribution by reducing their environmental impactenvironmental 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
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SSUSTAINABILITYUSTAINABILITY IINITIATIVESNITIATIVESDHP: the first company supplying the mass market retailDHP: 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;S t P 100% i i dSmart Program ‐ 100% non‐virgin wood
Ameriwood:
1 All saw dust scrap wood chips are recycled and returned to1. 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 1st Nature Next Collection features products made y pfrom eco‐conscious materials
Warehouses are equipped with light sensors to eliminate entire areas being lit needlessly
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entire areas being lit needlessly
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FFULLULL YYEAREAR –– 2009 2009
(in millions of US$ other than EPS) 2009 2008(in millions of US$, other than EPS) 2009 2008
Revenue $ 2,140.1 $ 2,181.9
Pre‐tax income 128.3 132.0
Net income* 107.2 112.9
EPS (diluted) 3.21 3.38
*Includes out of period F/X (losses)/gains $ (12.6) $ 8.9
Excluding F/X effect 105,134 117,937
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Q4 Q4 –– 2009 2009
(in millions of US$, other than EPS) 2009 2008Revenue $ 545,303 $ 479,880
3 months
$ , $ ,Net income 24,211 19,167 EPS (diluted) 0.73 (1) 0.57 (2)
1) Out of period F/X gain $0.02/diluted share2) Out of period F/X loss $0 15 / diluted share2) Out of period F/X loss $0.15 / diluted share
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NNEWEW LLONGONGTTERMERM FFINANCINGINANCING
• 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 2020
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OOUTLOOKUTLOOK
Established opportunities in Juvenile and Recreational/Leisure
Foresee organic growth through new international markets, new products
Continued innovative juvenile product introductionsContinued innovative juvenile product introductions through 2010
Increased IBD bike sales due to exciting new models
Growth at Apparel Footwear Group
Build on successes achieved in Home Furnishings
No significant improvement expected in world economybut Dorel’s products will protect Company to certain extent
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WWHYHY IINVESTNVEST ININ DDORELOREL??A consistent record of successful acquisitionsA 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 f h i h d d i d i iA strategy of the right products and varied price points
Dedicated quality control/customer service by solidAsian presence
Established customer relationships
Strong cash flow
P t f t l di id dPayment of a quarterly dividend
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QQUESTIONUESTION & & AANSWERNSWER PPERIODERIOD
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Notes:
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![Page 35: Dorel IR March Q409 (2) March_Q409.pdf · RECENT ACQUISITIONS 2003 AmpaFrance (Dorel France) 2004 Pacific Cycle 2007 IGC Australia (55% interest) 2008 Cannondale/SUGOI 2008 PTI Sports](https://reader034.vdocuments.mx/reader034/viewer/2022050611/5fb227b25651123187146eb6/html5/thumbnails/35.jpg)
Notes:
35
![Page 36: Dorel IR March Q409 (2) March_Q409.pdf · RECENT ACQUISITIONS 2003 AmpaFrance (Dorel France) 2004 Pacific Cycle 2007 IGC Australia (55% interest) 2008 Cannondale/SUGOI 2008 PTI Sports](https://reader034.vdocuments.mx/reader034/viewer/2022050611/5fb227b25651123187146eb6/html5/thumbnails/36.jpg)
Notes:
36