labelwriter business summary 12.17.07. quick facts labelwriter 400, 400 turbo, twin turbo and duo...
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LabelWriter BusinessSummary
12.17.07
Quick Facts
LabelWriter 400, 400 Turbo, Twin Turbo and DUO$/€ 99 - $/€ 199
» PC/Mac connected label printers and consumables.
» $99MM in 2007 net revenues, +14.6% vs. 2006. 57% Gross Margin.
» Application specific uses – addressing, filing, postage printing, visitor badges, and so on.
» Print on die cut paper labels except DUO model that combines die cut (top) with labelmaker D1 tapes (bottom).
Key Consumer Targets: SOHO and Administrative Assistants
3
I run a small business and am constantly looking for tools to help my business get ahead. I purchased the LabelWriter so we could work more efficiently and look more like the big guys. I had seen the product in an ad, then a friend told me about so I had to find out more. I researched the printer and the price online before my purchase. I use it mostly for addressing and shipping but also for postage. I use it everyday and would definitely recommend it.
I work in a large organization in an administrative support function. My main goal is making sure I am organized so that the people I support are organized. I’ve seen the LabelWriter in the catalogs and been interested but then my colleague told me about theirs and I just had to find out more. I checked it out online and asked my office supply sales rep before I ordered through the catalog. I use it all the time, mostly for filing and address labeling. It looks great and really makes me get things done so much faster. No more hassling with the sheet labels! I would definitely recommend this little printer.
SOHO
Admin
CHANNEL CONSUMER TARGETS
2007 Share Approximate Program Expense
IT Channel: Ingram Micro, Tech Data, CDW, PC Connection, Tiger, Amazon, etc...
SOHO, Admins 29% 3%
Office Superstores (Retail) SOHO 10% 23%
Commercial Catalogs Admins. SOHO 45% 23%
Direct via phone/web SOHO 10% 0%
CES: Best Buy, Fry’s, Micro Center
SOHO 2% 7%
All Other (Clubs, industrial) Various 3% 0%
Key Distribution Channels
Size of Market and DYMO Share
» In the specific Label Printer category, DYMO market share is estimated at 74%.
»Broadening the category to include sheet labels that print through standard printers reshuffles the deck as Avery and the other sheet labels together own 75% of the market.
▪ Importantly, the sheet label market is declining.
PC/Mac Label Printers (LabelWriter-like)2007 Revenue Estimates
Vendor North America EU LATAM APAC TotalDYMO $55,300,000 $39,200,000 $400,000 $4,100,000 $99,000,000Brother $12,000,000 $8,662,500 $400,000 $4,000,000 $25,062,500Seiko $7,000,000 $2,000,000 $400,000 $1,000,000 $10,400,000Total $74,300,000 $49,862,500 $1,200,000 $9,100,000 $134,462,500
2007 Market Share EstimatesVendor North America EU LATAM APAC TotalDYMO 74% 79% 33% 45% 74%Brother 16% 17% 33% 44% 19%Seiko 9% 4% 33% 11% 8%Total 100% 100% 100% 100% 100%
PC/Mac Label Printers WITH Avery Style Sheet Labels2007 Revenue Estimates
Vendor North America EU LATAM APAC TotalAvery and others $186,000,000 $138,740,000 $28,429,000 $48,776,000 $401,945,000DYMO $55,300,000 $39,200,000 $400,000 $4,100,000 $99,000,000Brother $12,000,000 $8,662,500 $400,000 $4,000,000 $25,062,500Seiko $7,000,000 $2,000,000 $400,000 $1,000,000 $10,400,000Total $260,300,000 $188,602,500 $29,629,000 $57,876,000 $536,407,500
2007 Market Share EstimatesVendor North America EU LATAM APAC TotalAvery and others 71% 74% 96% 84% 75%DYMO 21% 21% 1% 7% 18%Brother 5% 5% 1% 7% 5%Seiko 3% 1% 1% 2% 2%Total 100% 100% 100% 100% 100%
DYMO vs. BROTHER
»A “jewel” for your desk.
»Friendly, simple, approachable products.
»Best of class labeling software plus…
»….slick integration with popular software such as Word, Outlook, QuickBooks etc.
»Broad distribution.
»Lots of consumer marketing.
»A “machine” on your desk.
»Harder edge, not simple, not friendly.
»Adequate labeling software plus…
»….adequate integration with popular software such as Word, Outlook.
»Broad distribution.
»Heavy discounting since launch. Often 30%-50% less than DYMO.
SWOT: DYMO LabelWriter
7
Strengths
» Global Product line/Sub Brand
» End User Focused product/marketing
» Highly profitable consumables
» Good Innovation stream
» Software Capability
» Continuous large A&P Spend
» Product Design
» Volume leadership
» Install base as advocates
Opportunities
» Continue to build brand and category awareness
» Geographic expansion
» Leverage Sanford strength in the channel (e.g. exclusivity)
» Cross-promotions with other Sanford brands
» New vertical market solutions
» Innovation leadership
Weaknesses
» Unified DYMO brand Marketing communication
» Overall low awareness of category
» Lack of presence in Latin America & Asia(except Australia)
» B2B, direct marketing expertise
» Limited resources on product side
» CE&IT sales expertise in Sanford Sales Org
» Product development cycle
» Costs
Threats
» Price pressure from competitor attention and aggressiveness
» Convenience item
» Displacement by competition (Brother)
» Non Protected label supply
» Third party label suppliers
» Costs increases
» Further erosion of core applications (mail, envelopes, filing) due to digitization of information
SWOT: Brother
8
Strengths
» Huge company with labeling focus
» Global presence with a #1 or #2 share in most regions on core labeling products
» Well known brand
» Strong IT distribution relationships
» Proprietary business with IP coverage
» High profitability on consumables
» R&D resources enable frequent product updates, broad portfolio of products
» Deep promotional pockets
Opportunities
» Invest in building brand, consumer preference
» Gain market share in Europe, US vs. DYMO – exploiting DYMO A&P spend.
» Increasing cross promotions and other marketing/sales links with the Brother Printer Division.
» Development and launch of more end user driven solutions (applications, printers and tapes)
Weaknesses
» Product-driven marketing instead of consumer driven
» Product Design
» Price promotion “happy”
» Labeling in Multi Function business unit – no focus right now
» Commercial business relationships
» Volume movement at key channels
» Costs
» Low A&P investment
Threats
» Cost increase
» Promotional strategy eroding brand equity across other lines
» DYMO fully leveraging Sanford organization, relationships
» Emerging strength of, and consumer preference for, DYMO branded products.
» Further exclusivity programs by DYMO
Market Dynamics
Positive Developments:
» DYMO’s LabelWriter business has been growing 15% annually for several years, doubling from $50MM to $99MM in five years.
» In many measures, we’re still tapping into an under-penetrated market.
Concerns:
» In 2007, sales in all small business focused sales channels in the USA were flat to slightly down (IT, office superstore retail, CE.) Fortunately, sales through the commercial channel were up strongly. Key question is whether the weakness we see in small business channels in 2007 may deepen in 2008 and even spread to Europe.
» While we can still point to serving an under-penetrated market, due to lack of knowledge about the LabelWriter, the most popular LabelWriter application is addressing envelopes and we know that the use of first class mail volume is falling. We are diversifying the applications for LabelWriter with DYMO Stamps, DYMO File etc but key fact remains that addressing envelopes is on the decline.
» While we have been growing rapidly as we march from one new country to another in Europe, at some point we’re going to run into a stumbling block, whether economic, campaign success and so forth.
Product Portfolio - Printers
USA
» As the street prices for LabelWriter printers are the same in $s and Euros, EU consumers are really paying 40% more for their printers.
» EU average 8% program expense is lower than USA 15% average where big customers dominate.
» The standard costs for EU LabelWriter printers shown in EU chart looks way high, resulting in a 42% overall GM. The real GM is certainly higher. See next page for more accurate numbers as of 02.25.08
LabelWriter Pricing, Margins and Unit Share - USA
400 Turbo Twin Turbo DUO SE300*
Street Price $99.95 $129.95 $179.95 $199.95 $299.00Distributor Price (ASP) $80.00 $104.00 $144.00 $164.00 $225.00Margin between dist and street 20% 20% 20% 18% 25%Average Program Expense 15% 15% 15% 15% 2%Net Distributor Price $68.00 $88.40 $122.40 $139.40 $220.50Standard Cost $43.55 $44.73 $65.46 $77.71 $58.00Gross Profit $24.45 $43.67 $56.94 $61.69 $162.50 Totals
Gross Margin after program 36% 49% 47% 44% 74% 45%LE FY2007 unit sales 115,000 83,000 35,000 16,000 6,500 255,500Unit share 45% 32% 14% 6% 3%Annual net reveue $7,820,000 $7,337,200 $4,284,000 $2,230,400 $1,433,250 $23,104,850Gross Profit $s $2,811,750 $3,624,610 $1,992,900 $987,040 $1,056,250 $10,472,550
* SE model is for vertical markets only. Not a mainstream offering but highly profitable. Not sold outside USA
Europe
Key Notes
LabelWriter Pricing, Margins and Unit Share - Europe ($1.40 exchange)
400 Turbo Twin Turbo DUO
Street Price $138.60 $180.60 $250.60 $278.60Distributor Price (ASP) $103.95 $135.45 $187.95 $208.95Margin between dist and street 25% 25% 25% 20%Average Program Expense 8% 8% 8% 8%Net Distributor Price $95.63 $124.61 $172.91 $192.23Standard Cost $59.04 $59.04 $94.07 $108.26Gross Profit $36.59 $65.57 $78.84 $83.97 Totals
Gross Margin after program 38% 53% 46% 44% 42%Likely FY2007 unit sales 116,708 32,360 6,451 13,021 168,540Unit share 69% 19% 4% 8%Annual net reveue $11,161,253 $4,032,509 $1,115,468 $2,503,079 $18,812,309Gross Profit $s $4,270,813 $2,121,975 $508,623 $1,093,425 $7,994,835
Product Portfolio – Printers (with corrected Europe costs and margins on .02.25.08)
USA
» As the street prices for LabelWriter printers are the same in $s and Euros, EU consumers are really paying 40% more for their printers.
» EU average 8% program expense is lower than USA 15% average where big customers dominate.
LabelWriter Pricing, Margins and Unit Share - USA
400 Turbo Twin Turbo DUO SE300*
Street Price $99.95 $129.95 $179.95 $199.95 $299.00Distributor Price (ASP) $80.00 $104.00 $144.00 $164.00 $225.00Margin between dist and street 20% 20% 20% 18% 25%Average Program Expense 15% 15% 15% 15% 2%Net Distributor Price $68.00 $88.40 $122.40 $139.40 $220.50Standard Cost $43.55 $44.73 $65.46 $77.71 $58.00Gross Profit $24.45 $43.67 $56.94 $61.69 $162.50 Totals
Gross Margin after program 36% 49% 47% 44% 74% 45%LE FY2007 unit sales 115,000 83,000 35,000 16,000 6,500 255,500Unit share 45% 32% 14% 6% 3%Annual net reveue $7,820,000 $7,337,200 $4,284,000 $2,230,400 $1,433,250 $23,104,850Gross Profit $s $2,811,750 $3,624,610 $1,992,900 $987,040 $1,056,250 $10,472,550
* SE model is for vertical markets only. Not a mainstream offering but highly profitable. Not sold outside USA
Europe
Key Notes
LabelWriter Pricing, Margins and Unit Share - Europe ($1.40 exchange)400 Turbo Twin Turbo DUO
Street Price $138.60 $180.60 $250.60 $278.60Distributor Price (ASP) $103.95 $135.45 $187.95 $208.95Margin between dist and street 25% 25% 25% 20%Average Program Expense 8% 8% 8% 8%Net Distributor Price $95.63 $124.61 $172.91 $192.23Standard Cost $44.59 $47.15 $67.23 $79.51Gross Profit $51.04 $77.46 $105.69 $112.73 Totals
Gross Margin after program 53% 62% 61% 59% 56%Likely FY2007 unit sales 116,708 32,360 6,451 13,021 168,540Unit share 69% 19% 4% 8%Annual net reveue $11,161,253 $4,032,509 $1,115,468 $2,503,079 $18,812,309Gross Profit $s $5,957,243 $2,506,670 $681,780 $1,467,831 $10,613,525
Product Portfolio - Consumables
Labels Key NotesLabelWriter Labels - USA
ASP$* $18.75ASP$ $13.14Margin between dist and street 30%Average Program Expense 15%Net Distributor Price $11.17Standard Cost $3.08Gross Profit $8.09 Totals
Gross Margin after program 72% 72%LE FY2007 unit sales 2,463,075 2,463,075Annual net reveue $27,510,088 $27,510,088Gross Profit $s $19,923,816 $19,923,816
* There is a wide variance on the consumer price from our customers.
» No data for Europe available at time this report was issued but the gross margin is in the same low 70% range.
Productivity Initiatives
2007 Productivity Projects 2006 Cost 2007 CostUnit Cost
Saving 2007 units 2007 Savings Probability2007 Productivity Confirmed
Change Power Adapter from 65w to 42w $6.00 $5.00 $1.00 417540 $417,540.00 90% $375,786.00Change to NXP Arm 7 Micro $3.10 $2.40 $0.70 347068 $242,947.60 90% $218,652.84Change to Arm 7 PCBA $21.57 $19.85 $1.72 347068 $596,956.96 90% $537,261.26Change to Freescale A Version Micro $3.26 $2.28 $0.98 70472 $69,062.56 30% $20,718.77Change Glaze on 300 dpi Thermal Print Head $5.95 $5.68 $0.27 458991 $123,927.57 100% $123,927.572007 Total $1,450,434.69 1,276,346$
Product 2007 Units Adapter Arm 7 Micro Arm 7 PCBA A Verson MCU 300dpi Glaze Product Total
LabelWriter 400 231,708 $208,537.20 $145,976.04 $358,683.98 n/a $62,561.16 775,758$
LabelWriter 400 Turbo 115,360 $103,824.00 $72,676.80 $178,577.28 n/a $31,147.20 386,225$
LabelWriter Twin Turbo 41,451 $37,305.90 n/a n/a $12,186.59 $22,383.54 71,876$ LabelWriter Duo 29,021 $26,118.90 n/a n/a $8,532.17 $7,835.67 42,487$
Project Total $375,786.00 $218,652.84 $537,261.26 $20,718.77 $123,927.57 1,276,346$
Total Spend 2007 2007 Savings % Savings Total Spend 2007 2007 Savings % Savings
LabelWriter 400 $10,090,883.40 $775,758.38 7.69% $8,787,572.24 $775,758.38 8.83%LabelWriter 400 Turbo $5,160,052.80 $386,225.28 7.48% $4,511,175.87 $386,225.28 8.56%LabelWriter Twin Turbo $2,713,382.46 $71,876.03 2.65% $2,419,341.50 $71,876.03 2.97%LabelWriter Duo $2,255,221.91 $42,486.74 1.88% $2,036,693.78 $42,486.74 2.09%Total $20,219,540.57 $1,276,346.44 6.31% $17,754,783.39 $1,276,346.44 7.19%
400 Turbo Twin Turbo DUO Sub-Total
Total Standard Cost $43.55 $44.73 $65.46 $77.71Likely FY2007 unit sales U.S. 115,000 83,000 35,000 16,000 249,000Likely FY2007 unit sales Europe 116,708 32,360 6,451 13,021 168,540Likely FY2007 unit sales global 231,708 115,360 41,451 29,021 417,5402007 LW Material Spend $10,090,883.40 $5,160,052.80 $2,713,382.46 $2,255,221.91 $20,219,540.57
400 Turbo Twin Turbo DUO Sub-Total
Total Standard Cost (less Freight, OH, Scrap, Labor $37.93 $39.11 $58.37 $70.18Likely FY2007 unit sales U.S. 115,000 83,000 35,000 16,000 249,000Likely FY2007 unit sales Europe 116,708 32,360 6,451 13,021 168,540Likely FY2007 unit sales global 231,708 115,360 41,451 29,021 417,5402007 LW Material Spend $8,787,572.24 $4,511,175.87 $2,419,341.50 $2,036,693.78 $17,754,783.39
2007 Global LabelWriter Productivity Per Printer Model
2007 Global Productivity vs. Annual Spend
2007 Productivity Project Overview
2007 LabelWriter Material Spend
standard cost = material cog + freight, OH, labor, scrap standard cost = material cog only
2007 Productivity vs. Spend 2007 Productivity vs. Spend
2008 Global Projections
LABELWRITER
ACTUAL Oct 15th CURRENT BUDGET PROPOSED ACTUAL Oct 15th CURRENT BUDGET Curr PROP.2006 Est '07 Est '07 2008 2008 2006 Est '07 Est '07 2008 Est '07 2008
NET SALES
NA 56.8 57.9 55.3 62.8 59.8 (2.6)% 8.1%EU 27.7 39.2 39.2 51.8 47.1 41.4% 20.3%LA 0.3 0.4 0.4 0.5 0.5 48.7% 20.2%AP 1.6 4.1 4.1 4.9 4.9 154.0% 19.0%Total GBU 86.4 101.6 99.0 120.0 112.3 14.6% 13.4%
STND MARGIN
NA 32.9 34.2 32.7 37.1 35.3 58.0% 59.1% 59.1% 59.0% (0.7)% 7.8%EU 14.6 22.3 22.3 31.1 28.3 52.8% 56.8% 56.8% 60.0% 52.3% 27.0%LA 0.1 0.2 0.2 0.3 0.3 48.6% 50.0% 50.0% 52.5% 52.9% 26.3%AP 0.6 1.5 1.5 2.2 2.2 36.9% 37.5% 37.5% 44.6% 158.0% 41.5%Total GBU 48.3 58.3 56.7 70.6 66.0 55.9% 57.3% 57.3% 58.8% 17.5% 16.3%
A&P
NA 5.3 6.5 6.2 6.0 5.7 9.4% 11.2% 11.2% 9.6% 16.8% (7.7)%EU 6.3 5.7 5.7 9.1 8.0 22.8% 14.4% 14.4% 17.5% (10.6)% 41.3%LA 0.0 - - 0.1 0.1 0.5% 0.0% 0.0% 10.6% (100.0)%AP 1.1 0.4 0.4 0.5 0.5 69.7% 9.7% 9.7% 9.8% (64.7)% 20.4%Total GBU 12.8 12.5 12.3 15.6 14.3 14.8% 12.3% 12.4% 13.0% (4.0)% 16.2%
CONT INCOME
NA 25.6 25.9 24.6 26.5 25.0 45.0% 44.7% 44.4% 42.2% (3.9)% 1.6%EU 6.4 15.0 15.0 19.3 17.6 23.1% 38.4% 38.4% 37.4% 135.1% 17.2%LA 0.1 0.2 0.2 0.2 0.2 48.0% 50.0% 50.0% 42.0% 54.8% 0.9%AP (0.5) 1.1 1.1 1.7 1.7 -32.7% 27.8% 27.8% 34.8% 48.9%Total GBU 31.6 42.3 41.0 47.8 44.5 36.5% 41.6% 41.4% 39.8% 29.8% 8.6%
% of Net Sales % Growth
Become the business consumer’s preferred choice in label printing from a computer
Global Business Strategy & Actions
15
Strategy
Drive sales through targeted awareness building activities
Develop products with market leading specifications, industrial design and usability.
Continue broadening the base of applications through partnerships and internal development (internet postage, digital filing, shipping, visitor management...)
Regional/Geographic expansion/growth.
Key Actions
16
North America Outlook 2008
»Increase ad campaign effectiveness.
»Continued focus on commercial channel support.
»Strengthen postage message at Office Superstores by adding Twin Turbo.
»Promote the ability to print labels and postage more aggressively.
Keys to Success2008 Revenue Walk
»Small business slowdown worsens.
»Corporate sector sales slow.
»Weak retail store execution isn’t reversed.
Risks
2008 USA Walk2007 net sales $50.83% core business growth $1.5Label price increase $1.2Non recurring returns $1.5Total USA 2008 $55.0
2008 CANADA Walk2007 net sales $4.72008 forecast $4.8
2007 vs 2008 NA TOTAL2007 net sales $55.32008 net sales $59.8% Change 8.1%
2008 USA MarCom View
» Goal:▪ Drive awareness through full year of activities on TV, online and
in store mediums
▪ Focus on Small Office (<5) sector to support in store and IT/CE business
▪ Halo effect to administrative assistant market
17
18
EUROPE Outlook 2008
Keys to Success
» Q1 campaign success in Spain, Benelux, Italy and Germany.
2008 Revenue Walk
Risks
» Campaigns under perform.
» Brother’s steep discounts gain traction.
» Economic slowdown crimps spending.
NWL Achieved +40% in 20072006 net sales $27.72007 net sales $39.2$ Growth $11.5% Growth 42%
+20% Goal for 20082007 net sales $39.22008 proposed sales $47.1$ Growth $7.9% Growth 20%
2008 ($m @1,34)
Region Net Sales2008 Campaign
SpendingWestern Europe $11.6 $0.813Central Europe $10.5 $2.033Southern Europe $13.0 $2.338UK and Ireland $8.1 $2.033Nordic $2.5 $0.203Eastern Europe $0.9 $0.051Emerging Markets $0.5 $0.051Total $47.1 $7.522
2008 EU Media Activity
TV
TVTV
TV
TV
TV
TV
TV
$ '000s at 1,34 rate JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC $ SpendTotal $ spend
TECHNOLOGY $12,969Label writer
Germany $2,033
UK $2,000
Benelux $813
Spain $813
Italy $1,525
Prof. LabellingGermany $2,033
France $305
Benelux $305
UK $400
LetratagSpain $712
France $712
IndustrialUK $95
Germany $102$0Discpainter
Benelux $413
CardscanGermany $407
UK $300
3 Year Product Road Map
Hardware:
Q2: LabelWriter 4XL
• Handles 4” wide labels.
• Shipping applications and vertical markets.
Q2: Print Server
• Enables sharing of printer among several users.
Q3: LabelWriter 450 Series
» Improved print speed and resolution.
Software:
» DYMO Stamps update for rate change.
» DLS update for MS Office.
» DLS update for LW450
» DLS v8 – a major rewrite/upgrade
20
2008 2009
1H: DLS8 Localizations• EU first since, then Japan.
2H: LabelWriter 500• All new cartridge based
product line.
• Next step in ease of use.
2010
Color Label Printer
• R&D not currently funded.
New Software Applications:• DYMO Visitor
• DYMO Shipping
(B)Project Everest: LW4XL Overview
What?DYMO LabelWriter 4” printer
Why?Opportunity exists to introduce stand-alone label printer as well as an integrated shipping solution for small business
Features / Performance Specs: 4” print capacity USB Windows and Mac Compatible 15 4” Shipping Labels/minute*
Application / Benefits: Perfect for use in the shipping area Perfect for use in security, inventory and othervertical markets No ink or toner needed Process shipments quickly and efficiently
Competition:BrotherZebra/EltronLaser/inkjet printers
Source of Supply:Honor Tone
IP Status:In process
*Final spec. to be completed.
NEW PRODUCT WITH CONSUMABLES:
2008 2009 2010 2011
Target Unit Cost 80.00$ 80.00$ 80.00$ 80.00$
Avg Net Sale Price 187.00$ 187.00$ 187.00$ 187.00$
GM 57% 57% 57% 57%
Capital 225,000$
Dev. Time (mo) 19
Project Close (G6) May-08
Sales Start May-08
Units 4,000 8,000 12,000 12,000
NA Sales 4,000 8,000 12,000 12,000
Europe Sales
Asia Pacific Sales
Latin America Sales
Total Global Sales 748,000$ 1,496,000$ 2,244,000$ 2,244,000$
GM 428,000$ 856,000$ 1,284,000$ 1,284,000$
Inc. Units 4,000 8,000 12,000 12,000
Inc. Sales 748,000$ 1,496,000$ 2,244,000$ 2,244,000$
Inc. GM 428,000$ 856,000$ 1,284,000$ 1,284,000$
Consumables Sales 50,000$ 102,852$ 209,251$ 418,503$
Consumables GM $ 34,026$ 68,052$ 138,451$ 276,903$
Total Inc GM 462,026$ 924,052$ 1,422,451$ 1,560,903$
3 year total Inc GM 3,907,406 Inc Sales 6,714,606
(AF)LW500 - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line
Why?To continue to innovative the LabelWriter product line, adding increased value and end user benefit
Features / Performance Specs: Drop and Load Cassette System New Industrial Design Entry level labeling (40lpm) Manual Cutter SystemApplication / Benefits: General office labeling Auto loading makes exponential difference on interaction with consumables replacement Faster. Easier makes printing labels a simpler chore, eliminating the hassles of labeling.
Competition:Brother QL series
Source of Supply:TBD
IP Status:GNI-XX-XX-XX; Patent No. XXXXXXXX
500 2009 2010 2011 2012
Target Unit Cost $ 53.74 $ 51.05 $ 48.50 $ 46.80
Avg Net Sale Price $ 80.00 $ 80.00 $ 80.00 $ 80.00
GM 33% 36% 39% 41%
Capital $ 60,000
Dev. Time (mo) 16
Project Close (G6) May '09
Sales Start June '09
Units (K) 195 281 312 345
NA Sales 106 152 168 184
Europe Sales 80 115 127 139
Asia Pacific Sales 7 11 14 17
Latin America Sales 2 3 4 5
Total Global Sales $ 15,600 $ 22,515 $ 24,935 $ 27,640
GM $ 5,121 $ 8,147 $ 9,818 $ 11,470
Inc. Units (K) 0 0 0 0
Inc. Sales $ - $ - $ - $ -
Inc. GM $ - $ - $ - $ -
Consumables/Aftermarket Sales Revenue
Consumables Sales $ 9,750 $ 14,072 $ 15,585 $ 17,275
Consumables GM $ $ 6,435 $ 9,287 $ 10,286 $ 11,401
Total Inc GM $ 6,435 $ 9,287 $ 10,286 $ 11,401
3 year total Inc GM 30,975 Inc Sales 46,931
(AF)LW500 Turbo - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line
Why?To continue to innovative the LabelWriter product line, adding increased value and end user benefit
Features / Performance Specs: Drop and Load Cassette System New Industrial Design Faster and Quieter (60lpm) Auto Cutter on high end models
Application / Benefits: General office labeling Auto loading makes exponential difference on interaction with consumables replacement Faster. Easier makes printing labels a simpler chore, eliminating the hassles of labeling.
Competition:Brother QL series
Source of Supply:TBD
IP Status:GNI-XX-XX-XX; Patent No. XXXXXXXX
500 Turbo 2009 2010 2011 2012
Target Unit Cost $ 55.94 $ 53.14 $ 50.49 $ 48.72
Avg Net Sale Price $ 104.00 $ 104.00 $ 104.00 $ 104.00
GM 46% 49% 51% 53%
Capital $ 60,000
Dev. Time (mo) 16
Project Close (G6) May '09
Sales Start June '09
Units (K) 150 215 236 260
NA Sales 80 115 127 139
Europe Sales 55 79 87 96
Asia Pacific Sales 10 14 15 17
Latin America Sales 5 7 8 8
Total Global Sales $ 15,600 $ 22,328 $ 24,560 $ 27,016
GM $ 7,209 $ 10,918 $ 12,638 $ 14,360
Inc. Units (K) 0 0 0 0
Inc. Sales $ - $ - $ - $ -
Inc. GM $ - $ - $ - $ -
Consumables/Aftermarket Sales Revenue
Consumables Sales $ 7,500 $ 10,734 $ 11,808 $ 12,989
Consumables GM $ $ 4,950 $ 7,085 $ 7,793 $ 8,572
Total Inc GM $ 4,950 $ 7,085 $ 7,793 $ 8,572
3 year total Inc GM 23,450 Inc Sales 35,531
(AF)LW 500 Twin - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line
Why?To continue to innovative the LabelWriter product line, adding increased value and end user benefit
Features / Performance Specs: Drop and Load Cassette System Twin System Offers double the productivity New Industrial Design Faster and Quieter (60lpm) Auto Cutter on high end models
Application / Benefits: General office labeling Auto loading makes exponential difference on interaction with consumables replacement Faster. Easier makes printing labels a simpler chore, eliminating the hassles of labeling.
Competition:Brother QL series
Source of Supply:TBD
IP Status:GNI-XX-XX-XX; Patent No. XXXXXXXX
Twin 2009 2010 2011 2012
Target Unit Cost $ 83.38 $ 79.21 $ 75.25 $ 72.62
Avg Net Sale Price $ 144.00 $ 144.00 $ 144.00 $ 144.00
GM 42% 45% 48% 50%
Capital $ 80,000
Dev. Time (mo) 16
Project Close (G6) May '09
Sales Start June '09
Units (K) 61 87 96 106
NA Sales 35 50 55 61
Europe Sales 20 29 32 35
Asia Pacific Sales 5 7 8 8
Latin America Sales 1 1 2 2
Total Global Sales $ 8,784 $ 12,573 $ 13,830 $ 15,213
GM $ 3,698 $ 5,657 $ 6,603 $ 7,542
Inc. Units (K) 0 0 0 0
Inc. Sales $ - $ - $ - $ -
Inc. GM $ - $ - $ - $ -
Consumables/Aftermarket Sales Revenue
Consumables Sales $ 3,050 $ 4,366 $ 4,802 $ 5,282
Consumables GM $ $ 2,013 $ 2,881 $ 3,169 $ 3,486
Total Inc GM $ 2,013 $ 2,881 $ 3,169 $ 3,486
3 year total Inc GM 9,537 Inc Sales 14,450
(AF)LW 500 Duo - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line
Why?To continue to innovative the LabelWriter product line, adding increased value and end user benefit
Features / Performance Specs: Drop and Load Cassette System New Industrial Design Faster and Quieter (60lpm) Auto Cutter on high end models
Application / Benefits: General office labeling Auto loading makes exponential difference on interaction with consumables replacement Faster. Easier makes printing labels a simpler chore, eliminating the hassles of labeling.
Competition:Brother QL series
Source of Supply:TBD
IP Status:GNI-XX-XX-XX; Patent No. XXXXXXXX
Duo 2009 2010 2011 2012
Target Unit Cost $ 91.50 $ 86.93 $ 82.58 $ 78.45
Avg Net Sale Price $ 164.00 $ 164.00 $ 164.00 $ 164.00
GM 44% 47% 50% 52%
Capital $ 150,000
Dev. Time (mo) 20
Project Close (G6) Oct. '09
Sales Start Nov. '09
Units (K) 32 45 49 54
NA Sales 15 22 24 26
Europe Sales 15 22 24 26
Asia Pacific Sales 1 1 1 1
Latin America Sales 1 1 1 1
Total Global Sales $ 5,248 $ 7,401 $ 8,108 $ 8,886
GM $ 2,320 $ 3,478 $ 4,025 $ 4,635
Inc. Units (K) 0 0 0 0
Inc. Sales $ - $ - $ - $ -
Inc. GM $ - $ - $ - $ -
Consumables/Aftermarket Sales Revenue
Consumables Sales $ 1,600 $ 2,256 $ 2,472 $ 2,709
Consumables GM $ $ 1,056 $ 1,489 $ 1,631 $ 1,788
Total Inc GM $ 1,056 $ 1,489 $ 1,631 $ 1,788
3 year total Inc GM 4,909 Inc Sales 7,437
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Broadening the Application Base for LabelWriter
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• With core applications such as addressing and filing on the decline, we have sought new office applications for LabelWriter that could be branded DYMO.
• We have targeted four specific apps:• Printing postage (launched)• Digital filing (launched)• Temporary visitor badges• Printing shipping labels
DYMO Stamps (launched April 2006)
» Exciting new application for LabelWriter as everybody needs stamps.
» First internet postage system where users don’t pay a monthly fee.
» NWL makes its profit from sale of label printer and sales of postage labels.
» 20 months after launch, 16,000 users print a total of approx 1 million stamps monthly. That means about 10% of Stamps compatible printers are actually printing postage.
» Postage label sales in 2007 have brought the Tech GBU $1.3 million in revenue at 90% margin.
» You can print postage from a standard LabelWriter Turbo. Even better is a Twin Turbo that holds address labels and stamps at the same time. 50% of users have selected the Twin Turbo.
» DYMO Mailing Solution Kit includes 5 pound USB scale. Currently selling at Sam’s Club at 80 units/monthly. Plan to broaden distribution in 2008.
DYMO Stamps Next Steps
4” Wide Printer for Shipping Labels
»On its own, will be used in vertical markets where people need wider labels.
»Combined with a multi-carrier shipping service, could be sold through SOHO distribution channels.
DYMO Stamps Sheet Labels
»Print postage stamps on any laser or inkjet printer.
»Could be sold in the Avery label aisle in office superstores.
»Consumer research taking place now.
DYMO Stamps Printer
»Mini stamp printer.
»Unlike LabelWriter, this printer would only print stamps, not stamps plus standard labels.
»Priced in the $59-$69 range.
»Consumer research taking place now.
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For paperwork that needs to be filed digitally….
new DYMO File Softwaremakes it easy to...
To organize his paperwork, we give him two choices.
DYMO File (launching Q4 2007)
DYMO Visitor (future)
» DYMO LabelWriter is a popular choice to print visitor badges in the lobbies of many office buildings.
» Over the years, DYMO has partnered with several small software companies that specialize in visitor management software. Companies such as STOPware (a Brady company), Infrasafe and others resell our LabelWriter printers with their software.
» DYMO even developed its own visitor management software called GuestGuard that was quietly launched in Belgium in 2005 and has a couple dozen customers.
» There may be an opportunity for DYMO to offer a packaged bundle (label printer, software, service) that makes it easy for small businesses to replace the front desk logbook. We would need to be very careful to not enter the visitor management market as that requires a single minded focus with a long sale cycle. Our solution would be a simple, log book replacement.
» Key decision is whether we would develop and maintain the software/service ourselves or partner with STOPware, Infrasafe or another specialist as we did with Endicia to launch DYMO Stamps. And whether our distribution channels would embrace the product.
DYMO Shipping Solution (future - speculative)
» Concept is to offer small business a printer, software, internet service based system for managing their Package Shipping.
» Can’t be USPS only as Pitney Bowes has tried that and failed.
» Needs to be multi-carrier.
» Endicia is looking into the opportunities here.
» Endicia would be product management arm, while DYMO would bring the solution to market.
» Key challenge is that small businesses already have many options for shipping – unsure yet whether we can bring added value.
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Internal Challenges
Japan Update
» Japan is a large labeling market, with 3 strong competitors - King Jim (dominating the office market), Brother (office/home) and Casio (home focus). Due to the strong IP position held by competitors in Japan, and the fact that Esselte never had a presence in Japan, the only business DYMO has in Japan is a tiny embossing business.
» Newell Japan has expressed an interest in selling LabelWriter printers in Japan because they will not run afoul of competitor’s IP and because Brother is already selling their QL series in the market. Importantly, the GBU has received no market data on Japan
» Selling LabelWriter in Japan requires a Japanese version of the DYMO Label Software, which is tied to a major rewrite called DLS v8. DLS 8 is being written in Unicode to facilitate translations beyond Latin languages.
▪ As recently as September, DYMO indicated to Ian Coleman that DLS8 in Japanese would be available in Q4 2008. This was a mistake as DLS8 development has not yet begun and we currently expect just the English version to be complete by year end 2008.
▪ In November, DYMO informed APAC that a Japanese version of DLS will be ready in the second half of 2009, and will follow DLS 8’s release in North America and Europe where we have a big business to protect.
» Just as important is that NWL APAC performs a careful market analysis to see whether there is a market need for the LabelWriter in the local market in its current form, or a modified form, along with a marketing/sales plan detailing exactly how the product would be positioned, distributed and marketed. Without that, it is impossible to judge the ROI of such a development project.
Business Reporting (Global)
» Sales reporting is incomplete.
» We have lost visibility into customer POS in USA.
» No resource to turn to in the USA for ad-hoc sales/market analysis.
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Channel Management (USA):
» While the NWL office sales organization is terrific in office and mass channels, due to the specialization of the channel, and its importance to the Tech GBU, we believe the Tech GBU should manage the IT and CE sales channels directly.
▪ There is precedence for this as this is the way DYMO managed its business under Esselte.
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Innovation/Product Management
» The LabelWriter business should have dedicated resources in the following functional areas – Channel Support, Business Development, Marcom, and Innovation/Product Management.
» The one glaring hole in the organization is innovation/product management.
▪ Over the next several years, the new printers, updates to core software and the pursuit of new applications all require the focus of an Innovation and Product Management team.
▪ The cartridge based LabelWriter 500 is a complete change to all parts of the product – printers, software and consumables.
▪ Development of a color printer would also be a major project.
» A second area of concern is in Europe where Tom DeFruytier handles the whole business by himself. He doesn’t have time to support the country clusters with anything beyond the normal business, meaning no time to pursue vertical markets and other special opportunities.
» A third area of concern is business development as we will need to add to the team in order to develop and launch new applications such as DYMO Visitor. Please see the next slide for a detail of the current business org chart with yellow highlighting our needs.
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LabelWriter Business Organization
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Andrew NewmarkSVP – PC Products,
Business Development
Tom DeFruytierMarketing Mgr EU/
APAC
Bob Anders(Advertising Consultant)
Tim RobbMarketing Mgr NA
Sue BawolLabel Product Mgr
Melisha CurryCustom Label
Manager
Dena StahlheberAssociate
Marketing Manager
Erik HedlingChannel Advocate
Miguel OrtizMarketing Manager –
Business Development
Regine CrossmanAssociate Brand
Manager – Mailing/Shipping and BD
Important NeedProduct Innovation
Team
Future HireBusiness Dev Manager - EU
Future HireAssociate Brand
Mgr – Visitor Management