Nike Presentation - Group 11
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Transcript of Nike Presentation - Group 11
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NIKE INC.INVESTOR MEETING
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OURBUSINESS
FY11
FINANCIALREVIEWRISKFACTOR
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OUR BUSINESS
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Business Model
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Business Model
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Strengths
Strong Brand Equity Top25leadingbrands Brandvalue$14,5B(2011) Increaseinmarketshare Leadingplayerinfootwear
&apparels
Products Innovation
Emphasisondesigninnovaon SignificantinvestmentinR&D
Broad Distribution
Network 18salesoffices, 363execuveretailoutlets 20,000retailsaccounts 16distribuoncenters
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Opportunities
Association with NFL
On-fieldlicensedpartnerfortheUSNFL
EPSexpectedtoincrease3%in2012
Opportunity in India
RemovalofrestriconsonFDIinretailsector
Indianfootwearmarketforecastedtoincreaseby56.7%in2014
Brand Reorganization
Reorganizedbrandinto6geographicmarket
segmentswithfewer
managementlayers
Reducedcompanysworkforceby4%
Growth in Global
Footwear Market Forecastedtogrowby17.6%in2014
55.1%ofNikesrevenuesfromfootwearsegment
Expansion into
Emerging Markets Well-posionedinemergingmarkets
WorldCup2014andOlympics2016inBrazil
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Sustainable Strategies
GeographicExpansion
ExtendNikeBrandin6geographicalregions
Targetaddionalrevenueof$3.0to3.5B
by2015
Expandintodevelopingandemergingmarkets
Direct toConsumer
Planstoopen300Nikestoresaroundtheworld
Addionalreturnof$2.2to2.6Bby2015
Workingcloselywithretailpartners
Long-term FinancialObjectives
Highaverageannualrevenuegrowthrate
StrongEPSgrowth ReturnonInvested
Capitalof25%
Increasingdividendswithpayoutrangeof
25-35%ofEPS
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RISKFACTORS
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ReputationalOperationalFinancial
Foreign CurrencyFluctuations
Global EconomicSituation
NaturalDisasters
Celebrity
Endorsements
Focus onInnovation
EnvironmentalConcerns
Macroeconomic
Factors
Diverse
Stakeholders inGSC
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Monitoringofriskwithtechniques(value-at-risk,sensivityanalysis)
Financialinstrumentstohedgerisk LongtermdebtoffixedinterestrateJPandUS$
Global EconomicSituation
Focusongrowingbrandindevelopingcountries Streamlineoperaonsindevelopedcountries&
leverageonexisngconsumerbase
Manageinventoryriskbymonitoringsellthrough&maintainingappropriatesupply-demandbalance
ForeignCurrency
Fluctuations
Financial Managing the Risk
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MacroeconomicFactors
Diversifyinglocaonsofmanufacturingfacilies Adjusngpricesonselecteditems Flexibleinventory&supplychainmodeltorespondto
costpressuresandnewopportunies
Operational Managing the Risk
Natural Disaster Diversifiedoperaonsandconnualexpansionintonew
marketse.g.Brazil
Focus onInnovation
Closeengagementofathletesensuressensivitytoconsumerneeds
Managementofinventorylevelstosupportquickreaconstochangesinmarkettrends
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Reputational
CelebrityEndorsements
EnvironmentalConcerns
DiverseStakeholders in
GSC
Managing the Risk
StrongPRstrategyinhandlingreputaonalriskbacksNikesinvestmentdecision&protectscelebrity-brand-
generatedrevenue
Constantinnovaonandstrategicpartnershipstowardsimprovingsustainability
Building&upgradingfaciliestoleveragenewtechnologies
Strictcodeofethics&measurestomonitorNikefactories
Profileoffactories,workersandfactorymonitoringresultsavailableonline
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FY11
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WERE AGROWTHCOMPANY
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$7.6B+13%
$3.8B+4%
North AmericaWestern Europe $1.0B
+7%
Central &Eastern Europe
$766M21%
Japan
$2.1B+16%
China
$2.7B+24%
Emerging Markets
$20.9B+10%
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53.86
109.24
2006 2012FY01 FY10 FY11
QUALITY GROWTHRevenue 8% 10%
EPS 14% 14%
CAPITAL EFFICIENCY ROIC 14% 21% 22%
Share price
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WEREAPROFITABLECOMPANY
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10.22%
7.42%
4.73%
10.03%
7.47%
1.16%
6.48%
14.50%
8.84%
5.82%
11.79%9.42%
1.19%
5.94%
21.77%
14.89%
13.52%
17.68%16.05%
3.14%
10.21%
NIKE VF ADIDAS RALPH
LAUREN
PUMA PVH CINTAS
NET PROFIT
MARGIN
RETURN ON
ASSET
RETURN ON
EQUITY
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WERE FOCUSED ON RETURNS
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$100
DOW JONES US FOOTWEAR INDEX S&P 500S&P 500 APPAREL, ACCESSORIES & LUXURY GOODS INDEXNIKE
2006 2011
$150
$200
$250
5 - Y E A R C U M U L A T I V E T O TA L R E T U R N
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$0.24 $0.24 $0.28
$0.40$0.50
$0.62
$0.74
$0.92$1.00
$1.08
$1.24
EPSShare repurchases
2001 2011
$ million 01 02 03 04 05 06 07 08 09 10 11
SHAREREPURCHASE
157 237 191 414 556 781 975 1,248 639 754 1,872
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OUR FUTURE
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GROWTH DIMENSION FY1015 GOAL FY11
GEOGRAPHYDeveloped markets mid single digit 7%
Developing markets Low double digit 15%
2015$27B 2015$28B - $30B
PRODUCTFootwear High single digit 11%
Apparel Low double digit 9%
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Q&ANIKE INC.INVESTOR MEETING