digby report to shareholders
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Digby report to shareholdersTRANSCRIPT
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Digby’s Report to Shareholders
Industry #C59908
Presented by Eric Willinsky, Francis Naccarati, Maite Schloesser, Clare Singley, Stephanie Radziminski, Mark Rapposelli
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Promise to our Shareholders
Steady 10% annual increase in stock prices over 5 years
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Industry Stock Market Summary
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Previous & Future Company Drivers
1. Cost Structure and Stability
2. Market Share Dominance
3. Dividend Payout
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Previous Cost Structure Strategy● Higher prices for quality products
○ Aligns customer-targeted pricing with higher R&D budget
● Early investment in TQM
○ Lowered Variable costs by 12.9% avg
○ Lowered Administrative costs by 60%
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TQM Results
Digby's TQM Results
2019 2020 2021 2021 Industry Avg.
Material Cost Reduction 11.80% 11.80% 11.80% 8.85%
Labor Cost Reduction 14% 14% 14% 4.67%
Administrative Cost Reduction 60% 60% 60% 44%
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Previous Cost Structure Strategy● Higher prices for quality products
○ Aligns customer-targeted pricing with higher R&D budget
● Early investment in TQM
○ Lowered Variable costs by 12.9% avg
○ Lowered Administrative costs by 60%
● Emphasis on Capacity
○ Takes advantage of competitors’ unmet demand and eliminate second shift variable costs
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Average Plant Utilization
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Continuing Cost Structure Stability• Due to prior success in cost management, important
profitability & efficiency ratios are growing but at a sustainable pace as compared to competitors
o Growth Rates (YoY): ROE = 10.5% CM = 1.25% Profit Margin = 7.1%
• Lower ROE compared to competitor can be attributed to lower profit margins. Innovative methodology for improvement of profit margins includes:
o Automation Investment (lower variable costs outweigh initial cap. ex)
o Inventory Management (targeted inventory levels to prevent excess inventory costs)
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ROE & Profit Margins for Industry
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Market Share Dominance
● Focus on high market share to offset fixed costs
● Differentiate semi-homogenous product lines in a competitive market through early promotional marketing and bolstering R&D to mitigate competitors power
● Digby’s Accessibility rate of 100% and Awareness rate of 83% ultimately resulted in Market Dominance
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Average Product Awareness
Average Product Awareness (2019-2021)
2019 2020 2021
Andrews 41.60% 51.30% 51%
Baldwin 92.30% 94.70% 96%
Chester 54.70% 54% 55%
Digby 81% 81.80% 82.60%
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Market Share Moving Forward• Lower ROE also attributed to lower sales than competitor
• Opportunity to gain additional awareness and increase competitive advantage by increasing the promotional budget & reducing sales budget
• Continued adherence on R&D and increased focus on catering product lines to consumer demands mitigate customer powero Product Ageo Product Priceo Product Reliability
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Dividend Payout
● Only company paying dividends at .5%
● Potential to offer increased dividends in the future to match sub-sector average at 2%
*cited from dividend.com
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Why Should You Invest?● Digby’s cost structure stability, market dominance, and
dividend payouts has contributed to its positive profitability
● Historically, Digby has outperformed its competitors and holds the highest stock price coupled with the strongest EPS showcasing our current strength
● With a changing environment, Digby has prepared a strategy moving forward that includes provisioning infrastructure, revising inventory management protocols, and strategically increasing dividend payouts
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Appendix
● Dupont Model● SWOT Analysis● Porter’s Model
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DuPont Model
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DuPont Model
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SWOT Analysis
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Porter’s Model