nu skin enterprisesdeannguyen.typepad.com/files/investor-presentation-q3-2011.pdf · body treatment...
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NU SKIN ENTERPRISES December 2011
1
Q3 2011 HIGHLIGHTS
2
GLOBAL REVENUE (in millions)
$383.6
$428.4
$300
$325
$350
$375
$400
$425
$450
Q3 2010 Q3 2011
US Dollar Growth = 12%
• Local currency growth = 4% • FX benefit = 8%
EARNINGS PER SHARE
$0.55
$0.72
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
Q3 2010 Q3 2011
OPERATING MARGIN
13.8%
15.7%
10%
11%
12%
13%
14%
15%
16%
17%
Q3 2010 Q3 2011
Q3 2011 HIGHLIGHTS
3
Operating Income +27%
COMPANY STRENGTHS
Strong Product Portfolio
Sales Force Expansion
Emerging Market Opportunity
1
2
3
Profitability Improvements 4
4
Strong Cash Position 5
COMPANY STRENGTHS
Strong Product Portfolio 1
5
Q3 2011 REVENUE BY PRODUCT BRAND
6
55% 45%
PERSONAL CARE NUTRITION
7
PRODUCT PHILOSOPHY
• Premium quality products
• Committed to science
• Innovation is critical
• Focus on products that address sources of aging
• Proprietary collaborations
restage 2012-18
restore Alpha 2013-15 Longevity
remodel Gamma 2013-15 Weight Management
reverse Delta 2015-17 Tissue Repair
Kappa regenerate 2015-17 Personalization
recharge/ renew R2/Body Galvanic 2012-13 Cell Renewal/
Body Treatment
Galvanic Spa 2007
Transformation 2009
recharge Vitality 2010-11
Skin Treatment
Daily Skin Care
Cellular Energy
renew
rejuvenate
ageLOC: LONG-TERM GROWTH POTENTIAL
Applying ageLOC science to existing products
$250 M
$175 M
$100 M
$100 M
8
• Minimizes the appearance of cellulite for a slimmer looking body
• Provides the body with a smooth, contoured appearance
• Improves appearance of skin firmness
• Energizes and purifies skin
• Moisturizes the skin
9
BODY GALVANIC SPA
ageLOC R2
NIGHT Purifies and restores cells while you sleep. Wake up feeling refreshed and renewed. DAY Kick-starts cells for maximum energy production leaving you recharged and ready for the day.
10
GLOBAL PRODUCT LAUNCH SCHEDULE
11
Q1 Q2 Q3 Q4 Q1 Q2
Japan
Korea
Greater China
Americas
South Asia/Pacific
EMEA
Pre-Launch LTO Launch
Pacific launch only
Pacific launch only
2012 2013
Mainland launch only
COMPANY STRENGTHS
Strong Product Portfolio
Sales Force Expansion
1
2
12
RECRUITING RETENTION RATE OF PRODUCTIVITY
ACCELERATED REVENUE GROWTH
ACTIVE DISTRIBUTORS
RATE OF PRODUCTIVITY
REVENUE GROWTH MODEL
13
20,000
25,000
30,000
35,000
40,000
45,000
Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11
14
• Good indicator of “health” of business
• 5% Active growth in 2010
• 9% Executive growth in 2010
660,000
690,000
720,000
750,000
780,000
810,000
840,000
870,000
Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11
SALES FORCE EXPANSION AC
TIVE EXECU
TIVE
15
GLOBAL BUSINESS PROFILE Sales in Thousands USD
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
25,000
27,000
29,000
31,000
33,000
35,000
37,000
39,000
41,000
Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11
Executives
Sales
Exec
utiv
e Di
strib
utor
s
18%
2003
56%
2011
Recurring revenue as a percent of sales SUBSCRIPTION PROGRAM
16
COMPANY STRENGTHS
Strong Product Portfolio
Sales Force Expansion
Emerging Market Opportunity
1
2
3
17
18%
22%
27%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2009 2010 2011Projected
18
AS A PERCENT OF REVENUE GROWTH IN EMERGING MARKETS
• Mainland China
• Southeast Asia
• Eastern Europe
• Central & South America
• World’s fastest growing direct selling region
• Project revenue growth of 12-15% in 2012
Revenue Trend in Mainland China (YOY)
2003 - 2011 USD REVENUE TREND
11.2%
23.7% 17.9%
29.5% 36.5%
46.8%
76.6% 69.3%
0%
20%
40%
60%
80%
Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
GREATER CHINA
19
• Key drivers include weight management and ageLOC
• 32.8% CAGR since 2008
• R2 - Q3 2012
• Project revenue growth of 10-15% in 2012
4
2003 - 2011 USD REVENUE TREND
17%
28%
28%
6%
12%
9% Singapore
Malaysia
Thailand
Philippines
Australia/New Zealand
Indonesia
2011 SALES
SOUTH ASIA / PACIFIC
20
COMPANY STRENGTHS
Strong Product Portfolio
Sales Force Expansion
Emerging Market Opportunity
1
2
3
Profitability Improvements 4
21
7.8%
10.1%
11.9%
14.1%
15.2 – 15.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
2007* 2008 2009* 2010 2011**
*Excludes restructuring and impairment of assets and other.
Projected
** Excludes impact of Japan customs case.
2007 – 2011 OPERATING MARGIN
22
$0.75
$1.02
$1.51
$2.11
$2.62 – $2.66
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2007* 2008 2009* 2010 2011**
2007 – 2011 EARNINGS PER SHARE
*Excludes restructuring and impairment of assets and other. ** Excludes impact of Japan customs case. 23
Projected
+1.4%
-0.4%
+6.7% ~15.3%
7.8%
0.0%
4.0%
8.0%
12.0%
16.0%
FY 2007 Gross Margin* Selling Expense G&A FY 2011*Projected
* Excludes impact of Japan customs case.
2007 – 2011 OPERATING MARGIN FACTORS
24
COMPANY STRENGTHS
Strong Product Portfolio
Sales Force Expansion
Emerging Market Opportunity
1
2
3
Profitability Improvements 4
25
Strong Cash Position 5
$49
$103
$134
$188
$220
$-
$50
$100
$150
$200
$250
2007 2008 2009 2010 2011Projected
Mill
ions
USD
2007 – 2011 CASH FROM OPERATIONS
26
$50
$100
$150
$200
$250
Cash Debt
UTILIZE CASH FLOW TO CREATE SHAREHOLDER VALUE: STRONG BALANCE SHEET (in millions USD)
27
$0.20
$0.24
$0.28
$0.32
$0.36
$0.40 $0.42
$0.44 $0.46
$0.50
$0.59
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INCREASING DIVIDEND HISTORY
28
Repurchased $53 MM (1.6 MM shares) at a weighted average price of $34.13
Outstanding shares repurchased per year ~2%
Average share purchase price $19.62
Average shares purchased per year 2.3 MM
~$46 MM Average purchase amount per year
29
2004 - 2010
2011 (Q1-Q3)
STOCK REPURCHASE ACTIVITY
COMPANY STRENGTHS
Strong Product Portfolio
Sales Force Expansion
Emerging Market Opportunity
1
2
3
Profitability Improvements 4
30
Strong Cash Position 5