nu skin investor day dec 2014 slide deck ppt pdf investor presentation

Safe Harbor Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of

1934, as amended that represent the company's current expectations and beliefs. All statements other than statements of historical fact are "forward-looking statements" for purposes

of federal and state securities laws and include, but are not limited to, statements of management's expectations regarding the company's performance, opportunities, risks, initiatives,

growth, strategies, product offerings, sales force, consumers and new product development; statements regarding shareholder value and projections regarding our 2015-2016

business cycle, future sales, expenses, earnings per share, sources and uses of cash, foreign currency fluctuations, inventory and other financial items; statements of management's

expectations and beliefs regarding China and other markets; statements of belief; and statements of assumptions underlying any of the foregoing. In some cases, you can identify

these statements by forward-looking words such as "believe," "expect," "project," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could," "may," "might," the

negative of these words and other similar words.

The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking

statements or views expressed herein. These risks and uncertainties include, but are not limited to, the following:

• risk that continuing media and regulatory scrutiny and investigations in China, and any actions taken by the company or by regulators, could cause unanticipated complications

or other difficulties, make it more difficult to forecast results for future periods, and could negatively impact the company's revenue, sales force and business in this market,

including the interruption of sales activities, loss of licenses, and the imposition of fines, and any other adverse actions or events;

• risks related to negative publicity regarding recent media allegations and subsequent regulatory investigations and fines;

• risk that direct selling regulations in China may be modified, interpreted or enforced in a manner that results in negative changes to the company's business model or the

imposition of a range of potential penalties;

• any failure of current or planned initiatives or products to generate interest among the company's sales force and customers and generate sponsoring and selling activities on a

sustained basis;

• risks related to accurately predicting, delivering or maintaining sufficient quantities of products to support the company's planned initiatives or launch strategies, and increased

risk of inventory write-offs if the company over-forecasts demand for a product, changes its planned initiatives or launch strategies, or does not achieve expected sales levels;

• risk of foreign currency fluctuations and the currency translation impact on the company's business associated with these fluctuations;

• unpredictable economic conditions and events globally;

• regulatory risks associated with the company's products, which could require the company to modify its claims or inhibit the company's ability to import or continue selling a

product in a market if it is determined to be a medical device or if it is unable to register the product in a timely manner under applicable regulatory requirements;

• adverse publicity related to the company's business, products, industry or any legal actions or complaints by the company's sales force or others;

• any prospective or retrospective increases in duties on the company's products imported into the company's markets outside of the United States and any adverse results of tax

audits or unfavorable changes to tax laws in the company's various markets; and

• continued competitive pressures in the company's markets.

The company's financial performance and the forward-looking statements contained herein are further qualified by a detailed discussion of associated risks set forth in the documents

filed by the company with the Securities and Exchange Commission. The forward-looking statements set forth the company's beliefs as of the date that such information was first

provided and the company assumes no duty to update the forward-looking statements contained herein to reflect any change except as required by law.

2

3

4

5

6

7

8

9

10

11

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

projected

Beat Guidance

Within Range

Missed Guidance

12

2 reasons for 2014

• China business disruption

• Regional TR90 launches

13

14

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

*projected

*

15

2014 2015 2016 2017 2018 2019 2020projected 16

2014 2015 2016 2017 2018 2019 2020projected 17

18

“ANTI-AGING PRODUCTS AND SERVICES: THE GLOBAL MARKET”, BCC RESEARCH, AUGUST 2013 19

“A GLOBAL PERSPECTIVE ON DIRECT SELLING, BEAUTY & PERSONAL CARE AND CONSUMER HEALTH,” EUROMONITOR INTERNATIONAL, MARCH 2014 20

“A GLOBAL PERSPECTIVE ON DIRECT SELLING, BEAUTY & PERSONAL CARE AND CONSUMER HEALTH,” EUROMONITOR INTERNATIONAL, MARCH 2014 21

22

SOURCE: WFDSA Global Direct Selling Statistics 23

Source: Direct Selling News 24

25

26

27

28

29

30

31

32

ING

RE

DIE

NT

LIB

RA

RY

PR

OD

UC

T F

OR

MU

LA

TIO

N

33

34

35

36

37

38

39

40

41

42

®

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

INTRODUCTION OF AGELOC IN EXISTING CATEGORIES

68

INTRODUCTION OF AGELOC INTO FIRST PHARMANEX PRODUCT

AND FURTHER DEVELOPMENT OF AGELOC GALVANIC IN

SKINCARE

69

EXPANSION INTO WEIGHT MANAGEMENT AND BODY SHAPING

CATEGORY—AGELOC TR90

70

71

72

73

74

75

76

77

78

79

80

81

82

83

87

88

89

90

Estimates based on company releases and statements in the media

91

Millio

ns U

SD

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

Millio

ns U

SD

5 Yr. CAGR = 14%

3 Yr. CAGR = 14%

107

Millio

ns U

SD

5 Yr. CAGR = 13%

3 Yr. CAGR = 13%

108

108

Millio

ns U

SD

5 Yr. CAGR = 15.0%

3 Yr. CAGR = 19.1%

109

109

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2009 2010 2011 2012 2013 2014

5 Yr. CAGR = 61%

3 Yr. CAGR = 67%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2009 2010 2011 2012 2013 2014

5 Yr. CAGR = 36%

3 Yr. CAGR = 41%

Th

ou

sa

nd

s U

SD

Th

ou

sa

nd

s U

SD

110

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

2009 2010 2011 2012 2013 2014T

ho

usan

ds Y

en

5 Yr. CAGR = -5%

3 Yr. CAGR = -3%

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

2009 2010 2011 2012 2013 2014

Th

ou

sa

nd

s W

on

5 Yr. CAGR = 22%

3 Yr. CAGR = 17%

111

$0

$50

$100

$150

$200

$250

$300

$350

$400

2009 2010 2011 2012 2013 2014

5 Yr. CAGR = 22%

3 Yr. CAGR = 10% 16%

27%

21%

8%

19%

9%

Singapore MalaysiaThailand Australia/New ZealandIndonesia Philippines & Other

Millio

ns U

SD

112

$0

$50

$100

$150

$200

$250

$300

$350

2009 2010 2011 2012 2013 2014$0

$10

$20

$30

$40

$50

$60

$70

2009 2010 2011 2012 2013 2014

5 Yr. CAGR = 3%

3 Yr. CAGR = 6%

5 Yr. CAGR = 24%

3 Yr. CAGR = 43%

Millio

ns U

SD

Millio

ns U

SD

113

40%

30%

18%

12%

West Europe North Europe

East Europe Russia/Other$0

$50

$100

$150

$200

$250

2009 2010 2011 2012 2013 2014

5 Yr. CAGR = 6%

3 Yr. CAGR = 4%

projected

Millio

ns U

SD

114

AMERICAS

+7 - 10%

EMEA

(3 – 5)%

GREATER

CHINA

+2 - 5%

NORTH

ASIA

+5 - 8%

SOUTH ASIA /

PACIFIC

+8 - 10%

Global Local-Currency Growth Expected Currency Impact

4 - 6% -6% 115

₩

116

117

118 *Excludes certain items- see GAAP reconciliation table.

119 *Excludes certain items- see GAAP reconciliation table.

120

121

122

EARNINGS PER SHARE

123 *Excludes certain items- see GAAP reconciliation table.

124

125

126

127

128

129

$0.20 $0.24

$0.28 $0.32

$0.36 $0.40 $0.42 $0.44 $0.46

$0.50

$0.59

$0.80

$1.20

$1.38

130

131

132

133

For simplicity, graphs and growth calculations related to 2014 reflect the mid-point 2014 projections that

we provided in our last earnings call.

For years 2009 and later, revenue and selling expense have been adjusted to reflect the correct

classification of certain selling rebates. Revenue and selling expense for years prior to 2009 have not

been similarly adjusted, as we do not believe the adjustments are material.

This presentation contains non-GAAP financial information. Management believes these non-GAAP

financial measures assist management and investors in evaluating, and comparing from period to period,

results from ongoing operations in a more meaningful and consistent manner while also highlighting more

meaningful trends in the results of operations. A reconciliation of non-GAAP measures presented in this

presentation is provided on the GAAP reconciliation slide that follows.

134

Financial Information in this Presentation

Projected

2007 2009 2011 2014

Gross Margin 81.9% 81.5% 81.2% 81.4%

Percentage impact of Japan customs ruling 0.0% 0.0% 1.9% 0.0%

Percentage impact of inventory reserve 0.0% 0.0% 0.0% 2.0%

Gross Margin excluding Japan customs ruling and inventory

reserve 81.9% 81.5% 83.1% 83.4%

Operating Margin 6.1% 11.2% 13.6% 13.4%

Percentage impact of restructuring 1.7% 0.8% 0.0% 0.0%

Percentage impact of Japan customs ruling 0.0% 0.0% 1.9% 0.0%

Percentage impact of inventory reserve 2.0%

Operating Margin excluding restructuring, Japan customs ruling and

inventory reserve 7.8% 12.0% 15.5% 15.4%

Earnings per share $ 0.67 $ 1.40 $ 2.38 $ 3.06 - 3.11

Impact of restructuring 0.17 0.11 - -

Impact of Japan customs ruling - - 0.31 -

Impact of inventory reserve - - - 0.52

Impact of Venezuela Highly Inflationary accounting - - - 0.48

Earnings per share excluding restructuring, Japan customs ruling,

inventory reserve and Venezuela highly inflationary accounting. $ 0.84 $ 1.51 $ 2.69 $ 4.06 - 4.11

Projected

2009 2010 2011 2012 2013 2014

Revenue - Less LTO 1,297 1,463 1,610 1,832 2,627 2,350

LTO Revenue 17 55 110 300 550 210

Revenue 1,314 1,518 1,720 2,132 3,177 2,560

FX Impact - (69) (155) (154) (127) 81

Local-Currency

Revenue using 2009

FX Rates

1,314 1,449 1,565 1,978 3,050 2,641

Projected 2015 Range

Revenue

Growth -2.0% to 0.0%

FX Impact -6.0%

Local-Currency

Revenue

Growth

4.0% to 6.0%

GAAP Reconciliation