Shareholders Mtg[1]. 2008 - Movado Group, Inc.
Transcript of Shareholders Mtg[1]. 2008 - Movado Group, Inc.
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ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 2008
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SAFE HARBOR STATEMENTThis press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as “expects,” “anticipates,” “believes,”“targets,” “goals,” “projects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “should” and similar expressions. Similarly, statements in this press release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements and levels of future dividends to differ materially from those expressed in, or implied by, these statements. These risks and uncertainties may include, but are not limited to: the Company’s ability to successfully introduce and sell new products, the Company's ability to successfully integrate the operations of newly acquired and/or licensed brands without disruption to its other business activities, changes in consumer demand for the Company’s products, risks relating to the retail industry, import restrictions, competition, seasonality and the other factors discussed in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.
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KEY INVESTMENT HIGHLIGHTS
Powerful portfolio of brands and businessesConsistent track record of profitable growthStrong balance sheetStrong cash flow generator
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VIDEO
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CORE COMPETENCIES
Strong Culture of SuccessExceptional Brand BuildersLeader in Product Design & InnovationMarketing/Advertising ExpertiseDeep Market Knowledge & Strong Customer RelationshipsFlexible Global Supply Chain Infrastructure
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Luxury Brands15%
Accessible Luxury Brands40%
Retail18%
Licensed Brands25%
DIVERSE PORTFOLIO BRANDS & BUSINESSES
* Remaining 3% comprised of shipping and service
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United States60.5%
International39.4%
GLOBAL BUSINESS
* 48% of wholesale watch business generated from international markets
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$10,000+Exclusive
$1,500-$10,000Luxury
$500-$1500Premium Branded
$100-$499Moderate Branded
Less than $100Fashion Market
Competitive Landscape
Audemars Piguet, Chopard,Patek Philippe, Vacheron ConstantinBaume & Mercier, Breitling,Cartier, Omega, Rolex, TAG Heuer
Gucci, Raymond Weil, Rado,TAG Heuer
Bulova, Citizen, Seiko, Tissot, Swiss Army, Wittnauer
Anne Klein, Casio, Citizen, Fossil, Guess, Pulsar, Seiko, Swatch,Timex
MGI Brands
Ebel
Movado
ESQ, Coach, Hugo Boss, Juicy Couture,
LacosteTommyHilfiger
Concord
LEADING BRANDS IN A $15 BILLION MARKET
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MOVADO GROUP STRATEGIESBRAND BUILDING
Consistently maintain brand health and relevance through:
New Product IntroductionsStrong Retailer RelationshipsImage Building Advertising and Associations
Realize potential of younger businesses:Juicy Couture LacosteChina
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Concord Ebel
luxurybrands15%
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BRAND POSITIONING
Driven by an uncompromising quest for technical perfection, the new Concord will be defined by its bold philosophy, daring product, and exclusive pricing.
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advertisingcampaign
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C1 TourbillonGravity
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BRAND VISION
Continue to develop Ebel into a premier global luxury status brand, building the image, creating perceived value, exclusivity and desirability, while building a sustainable and profitable business.
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luxurybrands40%
accessible
MovadoESQ
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BRAND POSITIONING
For those who recognize superior design and quality, ESQ is the Swiss watch brand that provides exceptional value.
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MOVADO BRANDAN ICON OF MODERNISM
Founded in Switzerland in 1881, a legacy of design innovationInfluenced by the functional purity and simplicity of the Bauhaus movementIdentified with modernism and associated with the cultural artsGlobally-recognized, luxury brand name with clearly-defined and consistent brand imaging
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MOVADO BRANDA UNIFIED STRATEGY
Leverage the strength of the Movado brand across all distribution channelsFurther build on the power of Movado with a selective distribution and a focused retail presence:
Streamline wholesale distribution by 35% to 2,600 doors, increase productivity in remaining locationsBuild boutiques into a true and engaging expression of the brand and a core pillar of overall strategy
Centralize product development, merchandising and marketing
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Extends Movado into the sport watch categoryExpands Movado’s market share and further solidifies ownership of the $500 to $1,500 watch category Increases consumer base
SERIES 800 SPORTS CATEGORY
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RETAIL SEGMENT
Comprises approximately 18% of revenueProfitable U.S. based business2 components:
Movado Boutiques (30)Investment stage
Movado Company Stores (31)Established profit contributor
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BOUTIQUES
OBJECTIVE
A vital vehicle toward reinforcing the luxury image of the Movado brand, Movado Boutiques give consumers the opportunity to fully experience the brand’s modern design philosophy.
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BOUTIQUES
STRATEGY
Transition from investment to profit contributorEnhance in-store experience
Visual merchandisingFocused product offering
Revitalization of Movado-designed jewelryIntroduction of boutique-exclusive watches
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BOUTIQUES
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BOUTIQUES
COMPANY STORES
Very effective vehicle to sell discontinued product in a profitable and efficient manner31 locations nationwideMajor outlet centersMulti-branded product assortment
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BOUTIQUES
COMPANY STORES
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licensedbrands25%
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LICENSING PHILOSOPHYBUILDING PARTNERSHIPS
Very selective approachPowerful brands with significant staying powerLong-term visionComplementary from a strategic, operational and geographic perspective
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LICENSING STRATEGYBUILDING PARTNERSHIPS
Extend brand into watch category – new products aligned with brand philosophiesFocus on markets where parent brand is already strongGenerate sales in excess of $20M – ideally $30M to $50MSignificant profit contributors over the long term
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RICK COTÉEXECUTIVE VICE PRESIDENT &
CHIEF OPERATING OFFICER
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MOVADO GROUP STRATEGIESFOCUS ON KEY FINANCIAL METRICS
Drive profitable sales growth
Objective of expanding operating margin to mid-teens level
Expand gross marginLeverage infrastructure
Accelerate bottom-line growthContinued strong cash flow generation
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$299.7 $300.1$330.2
$419.0
$470.9$516.3
$543.3
PROJECTED$555 - $565
$200
$250
$300
$350
$400
$450
$500
$550
$600
2002 2003 2004 2005 2006 2007 2008 2009
Adjusted figures
NET SALES$ in MILLIONS
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$0
$110
$220
$330
$440
$550
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Recession
HISTORICAL NET SALES$ in MILLIONS
Adjusted figures
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GROSS PROFIT %
61.4% 61.4%60.7%
59.7%60.8%
62.5%64.0%
50%
55%
60%
65%
2002 2003 2004 2005 2006 2007 2008
Adjusted figures
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$26.3$31.8
$34.8$37.1
$47.5
$56.1$61.8
$20
$35
$50
$65
2002 2003 2004 2005 2006 2007 2008
OPERATING PROFIT$ in MILLIONS
Adjusted figures
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OPERATING PROFIT %
8.8%
10.6% 10.5%
8.9%
10.1%
10.9%11.4%
6%
8%
10%
12%
2002 2003 2004 2005 2006 2007 2008
Adjusted figures
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$0.71$0.82
$0.92$1.00
$1.25
$1.54
$1.71PROJECTED$1.65 - $1.72
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
2002 2003 2004 2005 2006 2007 2008 2009
DILUTED EARNINGS PER SHARE PERFORMANCE
Adjusted figures
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$172.5
$236.2$274.7
$316.6 $321.7
$378.4
$463.2
$100
$200
$300
$400
$500
2002 2003 2004 2005 2006 2007 2008
FINANCIAL STRENGTHSHAREHOLDERS EQUITY
$ in MILLIONS
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$16.5
$33.3
$51.6
$30.2 $29.7
$67.8
$83.6
$10
$20
$30
$40
$50
$60
$70
$80
$90
2002 2003 2004 2005 2006 2007 2008
CASH FLOW FROM OPERATIONS$ in MILLIONS $150+ MILLION
Generated Over Past2 Years
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SHARE REPURCHASEPROGRAM
One million share repurchase authorization in placeCompleted previous one million share repurchase program in April 2008Combined repurchases total 1.5 million shares at a cost of $29.7 million as of May 27, 2008
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$0.06 $0.07$0.10
$0.16
$0.20
$0.24
$0.32 $0.32
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
2002 2003 2004 2005 2006 2007 2008 2009
DIVIDEND GROWTH PER SHARE
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KEY INVESTMENT HIGHLIGHTS
Powerful portfolio of brands and businessesConsistent track record of profitable growthStrong balance sheetStrong cash flow generator
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ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 2008