présentation powerpoint - dorel industries

I N V E S T O R P R E S E N T A T I O NS E C O N D Q U A R T E R

E n d e d J u n e 3 0 , 2 0 1 3

Forward-Looking Statement

Except for historical information provided herein, this presentation may contain information andstatements of a forward-looking nature concerning the future performance of Dorel IndustriesInc. These statements are based on suppositions and uncertainties as well as on management'sbest possible evaluation of future events. The business of the Company and these forward-looking statements are subject to a number of risks and uncertainties that could cause actualresults to differ from expected results. Important factors which could cause such differences mayinclude, without excluding other considerations, increases in raw material costs, particularly forkey input factors such as particle board and resins; increases in ocean freight container costs; thecontinued ability to develop product and support brand names; changes to the Company’seffective income tax rate as a result of changes in the anticipated geographic mix of revenues; theimpact of price pressures exerted by competitors, and settlements for product liability caseswhich exceed the Company’s insurance coverage limits. A description of the above mentioneditems and certain additional risk factors are discussed in the Company’s Annual MD&A andAnnual Information Form, filed with the Canadian securities regulatory authorities. The riskfactors outlined in the previously mentioned documents are specifically incorporated herein byreference. The Company’s business, financial condition, or operating results could be materiallyadversely affected if any of these risks and uncertainties were to materialize. Given these risksand uncertainties, investors should not place undue reliance on forward-looking statements as aprediction of actual results.

Note: All figures are in US dollars.

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Dorel Overview

• 3 major segments

• Juvenile products (2012 revenue - $1.041 billion)

• Bicycles/recreational products (2012 revenue - $928 million)

• Home furnishings (2012 revenue - $522 million)

• $2.5 billion in sales annually

• 5400 employees

• Sales to 100+ countries

• Operations in 24 countries

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Dorel’s Key Brands

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Second Quarters Ended June 30Consolidated

(in thousands, other than EPS) 2013 2012

Total revenue $ 600,449 $ 633,711

Net income $ 13,224 $ 30,345

EPS (diluted) $ 0.41 $ 0.95

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Zone texte

TitleJuvenile Segment

Second Quarters Ended June 30

(in thousands) 2013 2012

Total revenue $ 243,412 $ 254,781

Gross profit $ 68,761 $ 69,391

Operating profit $ 15,811 $ 17,118

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Zone texte

TitleSecond QuarterJuvenile Highlights

• Quarter affected by reduced profitability in Europe due to challenging economy

• Operating profit decreased 7.6% year-over-year

• Latin American revenue growth fueled by new store openings. Dorel now operates 76 stores in Peru and Chile

• New products being launched at juvenile show in Cologne, Germany in September 2013

• Dorel Juvenile Group (DJG) USA exited some low-margin SKUs

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TitleA World Leader in JuvenileInnovation in North America

• Incorporates new G-cell HX Superior Side Impact technology developed at Dorel Technical Center with specialists in race car cockpit crash protection with Air Protect® - side impact technology

• 3 in 1 car seat for 3 modes of use – infant, convertible and booster

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Newest car seat platform – Elite 80 Air +

Zone texte

TitleA World Leader in Juvenile

Elite 80 Air +

Latest Development in Car Seat Safety

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TitleA World Leader in Juvenile

Dorel Europe

• Leading juvenile products

• Maxi-Cosi/ Bébé Confort/Quinny car seats and strollers remain the leading European signature brands to premium price point market

• Extensive local product development

• Safety 1st , addressing mid-price point channel, has grown steadily in brand recognition and sales

• E-tailing market expansion

• Strong and impressive new product introductions set for September Cologne, Germany juvenile show

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Zone texte

TitleInnovation - Europe

• Maxi-Cosi to release new “2 way Family Concept” child car seat in September. The first-ever seat of its kind, providing state-of-the-art i-size rear-facing safety for children from birth to about 4 years

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Zone texte

TitleRecreational/Leisure Segment



Total revenue $ 238,174 $ 251,911

Gross profit $ 54,550 $ 63,183


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Zone texte

TitleSecond QuarterRecreational/Leisure Highlights

• Total revenue decreased 5.5%, operating profit down 83%

•Due to continued poor weather and industry discounting

•Unfavourable FX rates also depressed gross profit

•One-time charge of approximately $2 million recorded for severance as a result of restructuring

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TitleStrategic and Comprehensive Portfolio

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Three distinct operating divisions

1) Cycling Sports Group (CSG)

• IBD Division

• Premium Brands

• Growing dealer network

• CSG sales growing rapidly outsideNorth America

• Innovation – continuing focus

• Building Dorel’s bike business to # 1 position

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Zone texte


2) Pacific Cycle

• Mass merchants/sporting goods chains

• Bicycle parts/accessories

• Full service provider – bikes, parts and accessories,branded apparel

• Brand building has enhanced Schwinn’sawareness

• 2013 marketing to target Schwinn and Mongoose

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Zone texte


3) Apparel Footwear Group (AFG)

• Performance apparel division incorporates strong SUGOI brand

• New branding opportunities include Technical Sponsor for Cannondale Pro Cycling Team and partnership with Ironman triathlons

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TitleHome Furnishings Segment



Total revenue $ 118,863 $ 127,019

Gross profit $ 17,145 $ 16,574


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Outlook

• As we had announced on June 13, 2013 the Recreational / Leisure segment results were still beingseverely impacted by the weather and this was being compounded by competitor discounting inan attempt to reduce industry-wide inventory backlogs. While discounting is continuing, Dorel’ssituation will improve as the year progresses. With our strong product portfolio and superiorbrands, along with the restructuring actions that we have taken, we expect to recover accordingly.Some of this recovery will be in the third quarter and our earnings for the period are expected tobe close to prior year levels. As we head into the fall, we are confident that in the fourth quarter,we will return to improved profitability versus the prior year and for the second half we expectRecreational / Leisure earnings will increase over last year.

• In Juvenile we expect improvement in the fourth quarter. We have several significant new productintroductions scheduled and we will be unveiling several of these at the upcoming Juvenile showin September in Cologne, Germany. Others are also due in North America near the end of theyear. In Latin America, growth in earnings will be weighted to the fourth quarter with a strongChristmas retail season anticipated with our expanding number of retail locations in Chile andPeru. For the year we now expect Juvenile earnings to be flat with 2012. In Home Furnishings, weexpect that segment’s solid performance to continue and its operating profit for 2013 isanticipated to exceed last year’s results.

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Why Invest in Dorel

• A record of successfully integrated acquisitions

• A focus on Juvenile and bicycles where Dorel is a key player

• Strategically growing Juvenile in Latin America

• A portfolio of known, premium brands

• Product development capabilities that drive growth

• Established customer relationships

• Strong annual dividend of $1.20 per share

• Consistent generator of cash flow to support acquisitions

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APPENDIX

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Financial Performance – 5 Years (In thousands, except per share amounts)

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Growth Through Acquisitions

• 1988 Cosco Inc (DJG)

• 1990 Charleswood Corporation

• 1994 Maxi-Miliaan B.V. (Maxi Cosi)

• 1998 Ameriwood Industries

• 2000 Safety 1st Inc.

• 2001 Quint B.V. (Quinny)

• 2003 Ampa France (Dorel Europe)

• 2004 Pacific Cycle

• 2007 IGC Australia

• 2008 Cannondale/SUGOI23

Growth Through Acquisitions

• 2008 PTI Sports

• 2009 Baby Art

• 2009 Dorel Brazil - 70% interest

• 2009 Iron Horse Bicycles

• 2009 Gemini Bicycles (Australia)

• 2009 Hot Wheels, Circle Bikes (UK)

• 2011 Silfa Group (Chile, Peru, Bolivia, Argentina) - 70% interest

• 2012 Poltrade (Poland)

• 2012 Best Brands Group SA (Panama) and Baby Universe SAS (Colombia) – 70% interest

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Total Revenue by Segment

42%

37%

21%

JUVENILE RECREATIONAL/LEISURE HOME FURNISHINGS

42%

36%

22%

2012 2011

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Geographical Distribution of Total Revenue (by customer)

58%

6%

25%

11%

US CANADA EUROPE OTHER

61%6%

26%

7%

2012 2011

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Sustainability Philosophy

• Active in sustainability on several fronts throughout all three segments

• Dorel Home Products facility is FSC certified

• Cornwall RTA plant recycling for 10 years

• 98% of materials are recycled or sold

• DJG’s sustainability initiatives include zero landfill, water usage reduced by 98%; high-efficiency lighting systems

• Strict policy in place to ensure sustainable business practices of suppliers

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présentation powerpoint - dorel industries

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