ralph lauren pitch book

PRESENTATION TO RALPH LAUREN BOARD OF DIRECTORS

Discussion Materials | February 11th, 2016

King Capital

King Capital

King Capital Partners

Skylar Gibson• From: Los Angeles, California• Majors: Finance and

Entrepreneurship• Scholarship Advisory Committee

Anshul Gupta• From: New Delhi, India• Majors: Finance and

Accounting• Game Theory Researcher

2

Zachary LaPasso• From: St. Louis, Missouri• Majors: Finance and Accounting• Legal Research Intern

Austin Peters• From: Greenwood, Indiana• Majors: Finance and Chinese• Private Equity Analyst

Brandon Jonas• From: Fishers, Indiana• Majors: Finance and Accounting• IUDM Dancer

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Table of Contents

I. Executive Summary

4

II. Industry and Company Analysis

6

III. Strategic Recommendations

10

IV. Appendix

16

3King Capital

I. Executive Summary

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Executive Summary

Executive Summary

5

King Capital recommends that Ralph Lauren sells itself to VF Corp

Ralph Lauren’s integration with VF Corp results in a stronger manufacturing base

RALPH LAUREN OVERVIEW• The stock price has recently been

extremely volatile and dipped 32% in the past three months

• Mr. Ralph Lauren stepped down in September of 2015 and the company is currently restructuring to reduce operational expenses

• 52% of revenue is derived from retail and 48% from wholesale, which is increasing at a faster rate

CURRENT POSITIONING• Sold merchandise through 433

retail stores and 503 concession-based shop-within-shops

• Overseas sales currently amount to 33.1% of revenue

• Strong US dollar has had a significant negative impact on sales, but Ralph Lauren still holds a strong portfolio of global luxury lifestyle brands

STRATEGY ASSESSMENT• Ralph Lauren can capitalize on VF

Corp’s existing network of manufacturers to reduce operational expenses

• Investor unease likely caused volatility in stock valuation which will stabilize through acquisition by VF Corp

• A strategic sale maximizes current company position, secures long-term shareholder value, and decreases dependency on third-party suppliers

RECOMMENDATIONS• To maximize shareholder value, we

recommend that Ralph Lauren pursue a negotiated sale to VF Corp

• This approach will secure Ralph Lauren stakeholders’ value, stabilize the company, and provide more opportunities for growth through acquisition by a conglomerate with strong management and operational expertise

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II. Industry and Company Analysis

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Sector Analysis

Consumer Discretionary Sector Performance• Stabilization in the housing market and declining U.S. unemployment rate may lead to increased consumer

spending • E-commerce sales expected to grow at a CAGR rate of 14% in United States, 16.2% in Europe, and 159.4% in

Asia Pacific region by 2019 • Strengthening US dollar combined with real wage increases will support augmented consumer spending• Increased retail competition and the growing prevalence of counterfeit products will put pressure on margins

7

S&P 500 vs. Vanguard Consumer Discretionary ETF

Consumer Discretionary Sector EPS Growth

Lower commodity prices will put more money in consumers’ pockets and promote more discretionary spending

E-commerce industry is projected to grow at an average of 5.8% per year through 2024

Source: Bloomberg, Charles Schwab, MarketLine, Vanguard

2015 2016 Estimate0.00%2.00%4.00%6.00%8.00%

10.00%12.00%14.00%16.00%18.00%20.00%

Time Period

YOY

Grow

th

Key:Vanguard Consumer Discretionary ETFS&P 500

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($ in millions) LTM

Country RevenueEV/

EBITDA

USA 4,511.66 8.88x

USA 12,542.84 15.82x

USA 5,844.59 11.90x

USA 3,016.56 10.61x

USA 7,976.60 11.62x

USA 2,690.85 14.32x

UK 2,331.04 11.10x

USA 7,506.00 5.87x

Industry Analysis

Luxury Apparel Industry Performance

8

Consumer Retail M&A Diversified Luxury Retailers

Source: Harris Williams & Co, Deloitte

• The global luxury market, currently valued at $320 billion, is projected to expand to $374.85 billion by 2020

• Demand for luxury leather goods continues to grow, especially men’s• Global online sales of luxury goods reached $25 billion in 2015, up 134% from 2005• US P/E deal multiples are considerably above 15-year average • US companies have increasing cash reserves, positioning them to make acquisitions• Strategic buyers have been pursuing an aggressive acquisition strategy Luxury

goods market is anticipated to grow at 3.4% CAGR through 2020

4 Q1 11 Q1 2

2 Q1 23 Q1 2

4 Q1 21 Q1 3

2 Q1 33 Q1 3

4 Q1 31 Q1 4

2 Q1 43 Q1 4

4 Q1 4

4763 66

98

127

7757

77

4366

35 39

67

18

1420

23

16

13

14

25

34

22

18 14

5

Strategic Buyer PEG Acquirer

Time Frame

Num

ber o

f Tra

nsac

tions

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• Founded in 1967 by Mr. Ralph Lauren, the company is a global leader in the design, marketing, and distribution of premium lifestyle products, including apparel, accessories, home furnishings, and other licensed product categories

• 67% of revenue is derived from the Americas, 21% of revenue is derived from Europe, and 12% from Asia

• Major brands: Polo Ralph Lauren, Club Monaco, and Chaps

• Since 11/11/15 Ralph Lauren stock price has dropped 32%

• Ralph Lauren stepped down in September and the company is restructuring to decrease operational expenses

Strategic Focus

Ralph Lauren Strategic Focus

9

Business Description Revenue Segmentation

Financial Statistics Stock Performance

Ralph Lauren aims to extend international presence in Asia and Europe

Ralph Lauren reacquired the Chaps label from PVH/ Warnaco

Wholesale46%

Retail52%

Licensing2%

Source: Company Reports

• Market Capitalization: $7.57 billion• TTM Revenue: $7.42 billion• TTM EBITDA: $1.17 billion

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III. Strategic Recommendations

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Strategic Recommendation

Strategic Recommendation: Acquisition of Ralph Lauren

11

Strategic Sale Rationale Sources & Uses

Pro Forma Capitalization Table

• A strategic sale will position Ralph Lauren for significant and stable growth

• Lessens reliance on third-party suppliers and vendors

• Focuses on core business growth, not on acquiring and integrating a company in which Ralph Lauren has no competitive advantage

• Allows geographic expansion, specifically into Asia, through capitalizing on preexisting relationships

VF Corp acquired Timberland, their last acquisition, for $1.97 billion on June 13, 2011

Global reorganizing plan will reduce Ralph Lauren’s operating expenses by $100 million

Source: Bloomberg, Company Reports

Transaction Structure ($ in millions) Projected Offer Price $127.85x RL Shares Outstanding $86.70 = Projected Offer Value $11,084.16 Less Cash used $500.00Residual $10,584.16/ Acquirer Stock Price $56.60 = Shares Issued in Transaction $187.00 % Cash 4.51% VF Corp shares per RL share 2.16Number of VF Corp shares per RL share $122.08Cash per RL share $5.77Value Per RL share $127.85

2016E 2017E 2018E 2019E

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Net Income$2,021.

00$2,329.

12$2,597.

13$3,391.

35 Fully Diluted Shares 599.70 599.70 599.70 599.70Pro Forma EPS 3.37 3.88 4.33 5.66Standalone EPS 3.46 3.90 4.20 4.98 Accretive $ -0.09 -0.02 0.13 0.68Accretive % -2.60% -0.42% 3.11% 13.56%NI Cushion Over BE ($53.96) ($9.71) $78.39 $404.84

Recommended Buyer - VF Corp• VF Corp’s growth strategy “17x17” aims to

achieve $17 billion in revenue by 2017, requiring a sizeable acquisition

• Capitalizing on VF Corp’s internet marketing expertise, Ralph Lauren will improve their internet branding

• VF Corp offers needed product diversification through its extensive footwear and accessories manufacturing

• The seamless implementation of lean manufacturing processes directly reduces COGS, while significantly decreasing overall working capital and inventory

• Manufacturing facilities located in the US, Mexico, and the Middle East are in close geographic proximity to Ralph Lauren’s suppliers, thus reducing manufacturing expenses

• VF Corp is seeking to expand into a higher luxury bracket, making Ralph Lauren a prized acquisition

• The selling of Ralph Lauren is the appropriate action because it secures long-term shareholder value and improves the business practices of Ralph Lauren

Football Field Analysis 12

Strategic Recommendation: Football Field Analysis

9.6x – 12.1x TTM EBITDA14.5x – 17x P/E

10.0x-13.0x TTM EBITDA10% WACC

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11.0x-14.0x TTM EBITDA

$6,000.00

$7,000.00

$8,000.00

$9,000.00

$10,000.00

$11,000.00

$12,000.00

$13,000.00

$14,000.00

$15,000.00

$16,000.00

$17,000.00

$18,000.00

Discounted Cash Flow Analysis

Comparable Companies Analysis

Precedent Transaction Analysis

Strategic Alternatives

Strategic Alternatives: Acquisition by LVMH

13

Business Description Revenue Segmentation

Strategic Rationale Stock Performance

• LVMH Moët Hennessy Louis Vuitton is one of the world’s leading luxury goods conglomerates

• LVMH is involved in the manufacturing and sales of wines, spirits, cosmetics, jewelry, fashion, and leather products

• Worldwide, the company operates through a network of 3,708 stores

• In the apparel industry, LVMH includes brands such as Louis Vuitton, Fendi, Marc Jacobs, Givenchy, Loro Piana, and more

• LVMH recently acquired Hermes, a French manufacturer of luxury goods, for $5.2 billion

LVMH recently acquired Bulgari SpA in 2011 for about $5.2 billion, doubling the size of their jewelry unit

• LVMH has a large presence in European and Asian markets, providing an excellent opportunity for Ralph Lauren to increase its international sales, as 67% of Ralph Lauren sales comes from the Americas

• Conglomerates provide diversified business operations, which prevents significant reliance on a single supplier

• LVMH owns and operates much of their own manufacturing, drastically reducing overhead costs and providing control of the manufacturing process

• LVMH is highly focused in the luxury apparel industry and has valuable expertise in this specific market

• The conglomerate’s substantial debt could lessen the probability of an acquisition because they would not want to increase their leverage

Source: Bloomberg, MarketLine, Wall Street Journal

Fashion and Leather Goods

35%

Selective Retailing

31%

Wines and Spirits

13%

Perfumes and

Cosmet-ics

11%

Watches and Jewelry

9%

Other activities and holding companies

1%

LVMH has significant cash reserves, currently holding around $4 billion

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Strategic Alternatives: Potential Financial Sponsors

14

• Bain Capital Private Equity pioneered the value added investment approach. They partner with management teams to provide strategic resources that build and grow great companies

• Bain Capital is one of the leading investors in the Consumer, Retail and Dining sectors with a global platform allowing them to identify industry best-practices and help companies compete on a global scale

• TPG Capital is one of the largest private equity investment firms globally, focused on leveraged buyout, growth capital, and leveraged recapitalization investments in distressed companies and turnaround situations

• TPG has an extensive global network and long-standing, on-the-ground presence in critical markets. TPG has built a strong international presence with 18 offices worldwide

• They were one of the first U.S.-based private investment firms to establish significant operations in Asia and Europe, in 1994 and 1995 respectively

• The Carlyle Group is a global alternative asset manager with more than $203 billion in assets under management

• Operating in 40 offices in North America, South America, Europe, the Middle East, North Africa, Sub-Saharan Africa, Japan, Asia, and Australia

• Through an array of products and geographic specific-funds, Carlyle works to meet the dynamic needs of the world’s most sophisticated investors

• Expertise and deep industry knowledge - Invest in sectors they know, and value depth over breadth

• Blackstone strives to create value by investing in great businesses where their capital, strategic insight, global relationships and operational support can drive transformation and realize the company’s potential

• The resulting improvements in growth and global competitiveness benefit not only investors, but also workers, communities and all stakeholders

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Strategic Alternatives: Acquisition of Fossil Group

15

Business Description Revenue by Region

Strategic Rationale Stock Performance

• Fossil Group is a marketer, distributor, and global designer that specializes in luxury accessories

• Fossil offers men’s and women’s fashion watches, jewelry, handbags, and other leather goods

• Globally, the company has more than 400 retail locations, 4,000 wholesale locations, and 13,000 employees

• The company has wholesale relationships with department stores such as Dillard’s, Saks Fifth Avenue, and Nordstrom

• Fossil has licensing agreements with companies such as Armani Exchange, Michael Kors, Burberry, and Marc Jacobs

• Recently acquired wearable maker Misfit for 260 million

Fossil’s wholesale business accounts for more than 80% of their sales

Source: Company Reports, Thomson Reuters, Wall Street Journal

In 2014, Fossil posted revenues of $3.5 billion

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• The valuation of a Fossil acquisition is calculated to be approximately $3.1 billion

• Fossil’s accessory products would implement Ralph Lauren’s growth strategy

• Fossil’s recent acquisition of Misfit would allow Ralph Lauren to reach a new customer base and a market that is projected to grow at a high rate

• Fossil’s existing Asian revenue would increase Ralph Lauren’s by around 50%

• Fossil’s strong brand image would complement Ralph Lauren’s already strong customer base

34.60%

26.50%

12.60%North America

Europe

Asia Pacific

IV. Appendix

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Appendix 17

Appendix: Comparable Companies Analysis

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Tier 1

Name Ticker Stock Price 52 Week High % of 52 week

high Enterprise

Value EV/EBITDA

TTM EV/EBIT

TTM EV/Sales

TTM Total Debt/

Equity Market Cap P/E

TTM Price/

Book Value Michael Kors KORS $37.79 $73.47 51.44% $6,582.18 8.88 9.85 1.46 0.00 $6,999.44 8.92 3.87Hanesbrands HBI $30.05 $34.80 86.35% $14,269.00 11.90 13.33 2.00 143.05 $11,774.24 14.08 7.19Carter's CRI $95.23 $109.53 86.94% $5,248.07 10.61 14.00 1.74 74.49 $4,951.05 19.78 5.50PVH PVH $69.45 $120.67 57.55% $8,688.46 11.62 12.49 1.62 81.26 $5,691.16 10.35 1.27G-III Apparel GIII $45.78 $73.93 61.92% $2,202.23 11.10 12.47 0.94 0.00 $2,084.69 16.64 2.41 Ralph Lauren RL $85.15 $141.08 60.36% $6,837.17 5.87 7.92 0.92 13.67 $7,185.90 12.65 1.88

Mean 67.43% $7,304.52 10.00 11.68 1.45 52.08 $6,447.74 13.74 3.69 Median 61.14% $6,709.68 10.86 12.48 1.54 44.08 $6,345.30 13.37 3.14 High $95.23 $141.08 86.94% $14,269.00 11.90 14.00 2.00 143.05 $11,774.24 19.78 7.19 Low $30.05 $34.80 51.44% $2,202.23 5.87 7.92 0.92 0.00 $2,084.69 8.92 1.27

Tier 2

Name Ticker Stock Price 52 Week High % of 52 week

high Enterprise

Value EV/EBITDA

TTM EV/EBIT

TTM EV/Sales

TTM Total Debt/

Equity Market Cap P/E

TTM Price/

Book Value Kate Spade KATE $17.00 $35.75 47.55% $2,352.76 35.25 63.31 1.94 205.77 $2,170.81 18.46 12.56Gildan GIL $25.12 $35.15 71.47% $6,540.08 14.32 18.00 2.43 7.76 $6,125.17 15.03 2.88Perry Ellis PERY $17.71 $28.19 62.82% $374.29 12.27 18.07 0.41 56.99 $278.46 N/A 0.86Vince VNCE $4.88 $25.30 19.29% $254.58 12.48 13.41 0.81 122.27 $179.48 11.89 2.36VF Corp VFC $58.75 $77.83 75.49% $27,189.09 15.82 17.67 2.17 25.74 $25,045.66 18.84 4.73

Mean 59.04% $4,904.65 12.99 17.93 1.34 64.57 $2,858.15 16.74 5.43 Median 61.53% $4,446.42 11.50 12.94 1.20 48.08 $4,147.99 13.74 2.64 High $95.23 $141.08 86.94% $14,269.00 35.25 63.31 2.43 205.77 $11,774.24 19.78 12.56 Low $4.88 $25.30 19.29% $254.58 5.87 7.92 0.41 0.00 $179.48 8.92 0.86

Implied Valuation

EV/EBITDA TTM

Implied Enterprise

Value Valuation Metric TTM EBITDA Low High Low High

$1,165.00 5.87 11.90 $6,838.55 $13,863.50

Appendix 18

Appendix: Precedent Transactions Analysis

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Date Target Acquirer Transaction Value EBITDA Mulitple

June 26, 2015 Tommy Hilfiger Corp PVH Corp $ 3,144.56 15.61x

June 26, 2015 New Look Retail Group Brait SE $ 1,782.80 8.57x

June 19, 2014 Jos A Bank Clothiers Inc. Men's Wearhouse Inc. $ 1,486.07 11.16x

April 9, 2014 Jones Group Inc. Sycamore Partners LLC $ 2,199.05 11.06x

February 14, 2013 Warnaco Group Inc. PVH Corp $ 3,022.00 11.28x

June 13, 2011 Timberland Co. VF Corp $ 1,971.75 12.30x

March 7, 2011 Bulgari SpA LVMH SA $ 5,184.23 28.2x

Mean $ 2,267.71 11.7x

Median $ 2,085.40 11.2x

High $ 3,144.56 15.6x

Low $ 1,486.07 8.57x

Appendix 19

Appendix: Ralph Lauren Discounted Cash Flow Analysis

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Actual FYE March

31st Projected FYE

March 31st

2013A 2014A 2015A LTM 2016E 2017E 2018E 2019E 2020E . 0.5 1.5 2.5 3.5 4.5

Total Revenues $ 6,944.80

$ 7,450.00

$ 7,620.00

$ 7,419.00

$ 7,392.70

$ 7,229.00

$ 7,543.25

$ 7,929.46

$ 8,335.45

% Growth 7.27% 2.28% -2.64% -0.35% -2.21% 4.35% 5.12% 5.12%

Cost of Sales $ 2,789.00

$ 3,140.00

$ 3,242.00

$ 3,199.00

$ 3,208.43

$ 3,132.59

$ 3,272.26

$ 3,367.56

$ 3,540.07

% Sales 40.16% 37.44% 41.21% 43.70% 43.40% 43.33% 43.38% 42.47% 42.47%

Net operating revenues $ 4,155.80

$ 4,310.00

$ 4,378.00

$ 4,220.00

$ 4,184.27

$ 4,096.41

$ 4,270.99

$ 4,561.90

$ 4,795.39

% Margin 59.84% 57.85% 57.45% 56.88% 56.60% 56.67% 56.62% 57.53% 57.53%

Selling, General, & Administrative $ 2,971.60

$ 3,142.00

$ 3,301.00

$ 3,338.00

$ 3,478.00

$ 3,289.20

$ 3,386.92

$ 3,481.03

$ 3,517.56

42.79% 42.17% 43.32% 44.99% 47.05% 45.50% 44.90% 43.90% 42.20%

Adjusted EBITDA $ 1,391.00

$ 1,391.00

$ 1,346.00

$ 1,165.00

$ 1,079.53

$ 1,106.87

$ 1,169.33

$ 1,237.00

$ 1,283.00

% Margin 20.03% 18.67% 17.66% 15.70% 14.60% 15.31% 15.50% 15.60% 15.39%

Less: Depreciation & Amortization $ 232.30

$ 258.00

$ 294.00

$ 302.00

$ 284.13

$ 300.43

$ 308.10

$ 336.00

$ 336.75

% Sales 3.34% 3.46% 3.86% 4.07% 3.84% 4.16% 4.08% 4.24% 4.04%

EBIT $ 1,158.70

$ 1,133.00

$ 1,052.00

$ 863.00

$ 795.40

$ 806.44

$ 861.23

$ 901.00

$ 946.25

% Margin 16.68% 15.21% 13.81% 11.63% 10.76% 11.16% 11.42% 11.36% 11.35%

Taxes $ 360.36

$ 330.84

$ 303.82

$ 242.50

$ 223.51

$ 226.61

$ 242.01

$ 253.18

$ 265.90

Tax Rate 31.10% 29.20% 28.88% 28.10% 28.10% 28.10% 28.10% 28.10% 28.10%

EBIAT $ 798.34

$ 802.16

$ 748.18

$ 620.50

$ 571.89

$ 579.83

$ 619.22

$ 647.82

$ 680.35

Plus: Depreciation & Amortization $ 232.30

$ 258.00

$ 294.00

$ 302.00

$ 284.13

$ 300.43

$ 308.10

$ 336.00

$ 336.75

Less: (Inc.)/Dec. In Net Working Capital $ 85.60

$ 153.00

$ 282.00

$ 88.00

$ 87.69

$ 85.75

$ 89.47

$ 94.05

$ 98.87

Less: Capital Expenditures $ 276.50

$ 390.00

$ 391.00

$ 416.00

$ 430.00

$ 432.75

$ 383.67

$ 340.00

$ 322.00

Unlevered Free Cash Flow $ 668.54

$ 517.16

$ 369.18

$ 418.50

$ 338.33

$ 361.76

$ 454.18

$ 549.76

$ 596.23

Present Value $ 322.58

$ 313.55

$ 357.85

$ 393.77

$ 388.22

Sum PV FCF $ 1,775.98

Appendix 20

Appendix: Ralph Lauren Discounted WACC Calculation

WACC Calculation

Debt

Total Debt 8.60%

Debt Adjustment Factor 1.29

Average Weighted Cost 1.90%

Tax Rate 27.75%

Tax Effected Cost of Debt 0.15%

Equity

Risk Free Rate 1.75%

Levered Beta 1.08

Expected Market Return 10.11%

Mkt Risk Premium 8.36%

CAPM 10.78%

Total Equity 91.40%

Weighted Cost of Equity 9.85%

WACC 10.00%

Source: Bloomberg

WACC Graph

Capital Structure

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91.40%

0.30% 8.30%

Equity

STD

LTD

Appendix

Appendix: Ralph Lauren DCFs Terminal Value and Equity Value

21Source: Company Reports

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Terminal Value

Exit Multiple Method

Terminal Year EBITDA $1,283.00

Exit Multiple 11.0 x

Terminal Value $14,113.00

Discount Rate 10.00%

Present Value $8,761.42

Enterprise Value $10,537.41

Perpetuity Growth Method

Final Year FCF $596.23

Growth Rate 3.00%

Discount Rate 10.00%

Terminal Value $13,792.43

Present Value $8,562.41

Implied Equity Value


Less: Debt $1,021.00

Less: Minority Interest $0.00

Less: Preferred Equity $0.00

Plus: Cash $1,126.00

Implied Equity Value $10,642.41

Implied EV/EBITDA Multiple


2015A EBITDA $1,346.00

Implied EBITDA Multiple 11.0 x

Appendix 22

Appendix: Ralph Lauren Exit Multiple Sensitivity Analysis

Exit MultipleEnterprise

Value 9 10 11 12 13

8.00% $ 9,828.13 $ 10,701.32 $ 11,574.51 $ 12,447.69 $ 13,320.88

9.00% $ 9,429.27 $ 10,263.13 $ 11,096.99 $ 11,930.85 $ 12,764.72

WACC 10.00% $ 9,051.14 $ 9,847.78 $ 10,644.42 $ 11,441.06 $ 12,237.70

11.00% $ 8,692.47 $ 9,453.87 $ 10,215.27 $ 10,976.66 $ 11,738.06

12.00% $ 8,352.10 $ 9,080.10 $ 9,808.11 $ 10,536.12 $ 11,264.13

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Appendix 23

Appendix: VF Corp - Ralph Lauren Acquisition Consequences Analysis

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Accretion/Dilution 2016E 2017E 2018E 2019ERevenues $ 20,780.98 $ 21,642.17 $ 23,352.23 $ 25,452.46 % Growth 4.14% 7.90% 8.99%

Cost of Goods Sold $ 10,035.67 $ 10,405.52 $ 11,545.72 $ 12,041.19 Manufacturing Synergies $ 166.26 $ 221.68 $ 277.10 $ 332.52

Operational Synergies $ -

$ 180.13 $ 60.42 $ 110.84 Less: Post Synergy Cost of Goods Sold $ 9,869.41 $ 10,003.71 $ 11,208.20 $ 11,597.83 % Sales 47.49% 46.22% 48.00% 45.57%

Gross Profit $ 10,911.57 $ 11,638.46 $ 12,144.03 $ 13,854.63 % Margin 52.51% 53.78% 52.00% 54.43%

Selling, General, & Administrative $ 3,478.00 $ 3,289.20 $ 3,386.92 $ 3,481.03 % Sales 16.74% 15.20% 14.50% 13.68%

Adjusted EBITDA $ 3,571.09 $ 4,015.53 $ 4,413.18 $ 5,159.21 % Margin 17.18% 18.55% 18.90% 20.27%

Less: Depreciation & Amortization $ 583.93 $ 593.14 $ 563.43 $ 468.50 % Sales 2.81% 2.74% 2.41% 1.84%

EBIT $ 2,803.46 $ 3,233.75 $ 3,412.89 $ 4,690.71 % Margin 13.49% 14.94% 14.61% 18.43%

Taxable Income $ 2,862.04 $ 3,299.24 $ 3,621.00 $ 4,798.56 Effective Tax Rate 30.00% 30.00% 30.00% 30.00%

Taxes $ 841.04 $ 970.13 $ 1,023.87 $ 1,407.21 Net Income $ 2,021.00 $ 2,329.12 $ 2,597.13 $ 3,391.35 Fully Diluted Shares 599.70 599.70 599.70 599.70Pro Forma EPS 3.37 3.88 4.33 5.66Standalone EPS 3.46 3.90 4.20 4.98 Accretive $ -0.09 -0.02 0.13 0.68Accretive % -2.60% -0.42% 3.11% 13.56%

NI Cushion Over BE $ (53.96) $ (9.71) $ 78.39 $ 404.84

Appendix 24

Appendix: VF Corp – Ralph Lauren Acquisition Consequences Analysis

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Transaction Structure (in millions except per share amounts) Projected Offer Price $127.85x RL Shares Outstanding $86.70 = Projected Offer Value $11,084.16 Less Cash used $500.00Residual $10,584.16/ Acquirer Stock Price $56.60 = Shares Issued in Transaction 187.00 % Cash 4.51% VF Corp. shares per Ralph Lauren share 2.16Value of VF Corp. shares per Ralph Lauren share $122.08Cash per Ralph Lauren $5.77Value Per Ralph Lauren share $127.85

Pre-tax Synergies to BreakdownEPS Accretion/Dilution ($0.09)Pro Forma Shares 599.7After-tax synergies/Losses to Breakeven ($53.96)Pre-tax Synergies/Losses to Breakeven ($83.01)

Enterprise Value $ 12,105.16