shoe company presentation

7/30/2019 Shoe Company Presentation

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De-Lite Shoe Company

Our mission and values are to helppeople throughout the world realize thefull potential of their body and sole.

Our vision is to put a pair of De-Liteson every foot worldwide!

-Groove is in the Heartand on your feet

Joe Smith, Co-Founder and CEO


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A Rich Tradition Of:

Rewarding Share Holders Handsomely.

(Returned $378 Millionsto shareholders in dividends and stockrepurchases in years 11-20.)

Selling Footwear Customers Demand and Like.(Sold 10.3 Millions ofS/Q 7 shoes worldwide in year 20.).

Management:

CEO: Joe

Smit

CFO: Joe Doe

COO: M.

Ditt


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New Management Goals: Year 11

Grow earnings per share at least 10% annually.

Maintain a return on equity investment (ROE) of15% ormore annually.

Maintain a B+ or higher credit rating.

Achieve stock price gains averaging about 10% annually.

Achieve an image rating of70or higher.


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How did we do?Grew earnings per share at least 10% annually.

Maintained a return on equity investment (ROE) of15% ormore annually.

-10

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20

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EPS (17.7% Annual Growth)

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10%

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ROE (Average 19%; 3.86% Annual Growth)


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How did we do?

Maintained a B+ or higher credit rating.

Achieved stock price gains averaging more than 10% annually.

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100

150

10 11 12 13 14 15 16 17 18 19 20

Adjusted Credit Rating (AverageA-)

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Stock Price (23% Growth; Average $126.45)


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How did we do?Achieved an image rating of70 or higher.

60

70

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10 11 12 13 14 15 16 17 18 19 20

Image (Average 79.8)

EPS 30%

ROE 20%

Credit Rating 15%

Stock Price 20%

Image Rating 15%

Why were these Goals Important?

Scoring Criteria:


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De-Lite Shoe Company: The Best of Best!


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Our JourneyStart: Year 10 Year 10 revenues of$238 million, net profit of$25 million

(equal to $2.50 per share), an ROE of~17%, a solid B+credit rating, and market capitalization of$300 Million

End: Year 10 Year 20 revenues of$539 million, net profit of$97 million

(equal to $12.78 per share), an ROE of~22%, a solidA+credit rating, and market capitalization of$1.8 Billion

In 10 Years:


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How Did We Do Compared to Our Esteemed Competitors

-$100

$0

$100

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Net Sales Cost of PairSold

WarehouseExpenses

MarketingExpenses

AdminExpenses

OperatingProfit

InterestExpenses

IncomeTaxes

Net Profit TotalDividends

$$s

Millions

Break up of Shoe IndustrySales, Profits, Expenses and Dividends

A B C D F


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COGS Warehouse Marketing Admin Gross Profit Income Tax Net Profit TotalDividend

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ercentages%

Shoe Industry Cash Allocation (Year 19)

A B C D F


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0.00%

10.00%

20.00%

30.00%

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60.00%

70.00%

COGS Warehouse Marketing Admin Gross Profit Income Tax Net Profit Total Dividend

Percentages%

Shoe Industry Cash Allocation (Year 20)

A B C D F


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Strategies We UsedBroad Differentiation.

Branded Footwear Emphasis.

Focused on all Geographic Regions.

Zero Focus on Private-Label Footwear (Sweet Poison).

Same Strategy worldwide.

Optimum Marketing.

Clever Use Retailer Support and Celebrity Endorsements.

d


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Strategies We UsedEconomies of Scale.

Production in Low Cost Countries.

Worker Incentives and High Productivity.

Demand matching Incremental Capacity Growth.

Captured Wholesale first; Internet later.

Optimal Warehouse Operations


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Porters 5 Forces

New Entrants Weak Not allowed ingame mode

Substitutes Weak, We all could use a

pair of shoes Customers Strong, Brand Loyalty

Suppliers Weak, not a component of

the game mode Rivals Strong, rivals would imitate

strategies to gain market share


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Driving Forces

Exchange Rate Fluctuation

Stock Market Fluctuation

Trade barriers


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Celebrity Endorsements

Signup as Many Celebrities as We can


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Strategic Group Map

Year 12 Year 19


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Plant Operations

Built new plant in LA region in year 11

Sold NA plant in Year 12

Added Capacity every year (9,100 M)


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Plant Operations

Plant Upgrades


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Plant Operations

Employee Wages


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Plant Operations

Six Sigma and Best Practices Training

St t E ti


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Strategy Execution:

St t E ti


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Strategy Execution:

Strateg E ecution


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Strategy Execution:

Strategy Execution:


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Strategy Execution:Price changes in response to changing market conditions.

Internet slowly becoming more important.

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Internet vs Wholesale

Internet Wholesale

Our Profits Make up In a Nut Shell


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Our Profits Make-up In a Nut-Shell

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$$sMillion

s

Revenues & Net Profit Vs Number of Shoes

Net Sales Net Profit No of Shoes (00)

Th S


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The Secret

In Dollars


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In Dollars

I D ll P Sh


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In Dollars: Per Shoe



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Total Dividend Net Profit Income Taxes Interest Expenses

Admin Expenses Marketing Expenses Warehouse Expenses Cost of Pair Sold

Our Strength Marketing in all Regions


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Helped us to mitigate foreign currency exchange rate variance.

In Earlier years EA was important. Later years LA region.

NA becoming increasingly important.

Our Strength Marketing in all Regions

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Millions

Net Earnings (EBIT) By Region

LA-Total AP-Total EA-Total NA -Total

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Percentages%

Regional Profits by Percentages

LA-Total AP-Total EA-Total NA -Total

Our Strength Free Cash Flows


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Our Strength Free Cash Flows

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$$sMillions

Free Cash Flow

$27,750

U t ll bl F t F i E h R t


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Year 20 Earnings reduced by $47 Millions.

Uncontrollable Factor: Foreign Exchange Rates

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Foreign Exchange Impact

Overall Adjustment Total

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$$sinMillions

Foreign Exchange Rate Impact by Region

LA AP EA Year

What Won Our Customers Hearts


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What Won Our Customers HeartsPrice

Number of models/styles

Styling/quality (S/Q) rating

Advertising

Size of retailer network

Celebrity endorsements

Delivery time

Retailer supportMail-in rebates

Shipping charges (Internet sales only)

D Lit Sh C Hi h t A l d


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De-Lite Shoe Company: Highest Accolade

Bright Future Ahead


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Bright Future Ahead

Keys to Our Success


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Keys to Our SuccessWe Understood company operations.

We Learned well how to run the game.

We Developed a specific strategy & stuck with it.

We Analyzed competitors and industry trends.

We Maintained balance between demand and supply.

We were assertive & proactive.

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