2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20191
BACKTO BASICS2019 INSTITUTIONAL
INVESTOR & ANALYST
CONFERENCE
SAN PEDRO SULA, HONDURAS
NOVEMBER 19-21, 2019
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20192
Forward looking statementsCertain statements included in this presentation constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations, andare subject to important risks, uncertainties, and assumptions. This forward-looking information includes, amongst others, information with respect to our objectives and the strategies to achieve these objectives, as well asinformation with respect to our beliefs, plans, expectations, anticipations, estimates, and intentions. Forward-looking statements generally can be identified by the use of conditional or forward-looking terminology such as“may”, “will”, “expect”, “intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, or the negatives of these terms or variations of them or similar terminology. We refer you to theCompany’s filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, as well as the risks described under the “Financial risk management”, “Critical accounting estimates andjudgments”, and “Risks and uncertainties” sections of the Company’s MD&A for the three months ended September 29, 2019 and for the fiscal year ended December 30, 2018 for a discussion of the various factors that mayaffect the Company’s future results. Material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection are also set out throughout this document.
Forward-looking information is inherently uncertain and the results or events predicted in such forward-looking information may differ materially from actual results or events. Material factors, which could cause actual resultsor events to differ materially from a conclusion, forecast, or projection in such forward-looking information, include, but are not limited to: our ability to implement our growth strategies and plans; our ability to successfullyintegrate acquisitions and realize expected benefits and synergies; the intensity of competitive activity and our ability to compete effectively; changes in general economic and financial conditions globally or in one or more ofthe markets we serve; our reliance on a small number of significant customers; the fact that our customers do not commit to minimum quantity purchases; our ability to anticipate, identify, or react to changes in consumerpreferences and trends; our ability to manage production and inventory levels effectively in relation to changes in customer demand; fluctuations and volatility in the price of raw materials used to manufacture our products,such as cotton, polyester fibres, dyes and other chemicals; our reliance on key suppliers and our ability to maintain an uninterrupted supply of raw materials and finished goods; the impact of climate, political, social, andeconomic risks in the countries in which we operate or from which we source production; disruption to manufacturing and distribution activities due to such factors as operational issues, disruptions in transportation logisticfunctions, labour disruptions, political or social instability, bad weather, natural disasters, pandemics, and other unforeseen adverse events; compliance with applicable trade, competition, taxation, environmental, health andsafety, product liability, employment, patent and trademark, corporate and securities, licensing and permits, data privacy, bankruptcy, anti-corruption, and other laws and regulations in the jurisdictions in which we operate; theimposition of trade remedies, or changes to duties and tariffs, international trade legislation, bilateral and multilateral trade agreements and trade preference programs that the Company is currently relying on in conducting itsmanufacturing operations or the application of safeguards thereunder; factors or circumstances that could increase our effective income tax rate, including the outcome of any tax audits or changes to applicable tax laws ortreaties; changes to and failure to comply with consumer product safety laws and regulations; changes in our relationship with our employees or changes to domestic and foreign employment laws and regulations; negativepublicity as a result of actual, alleged, or perceived violations of labour and environmental laws or international labour standards, or unethical labour or other business practices by the Company or one of its third -partycontractors; changes in third -party licensing arrangements and licensed brands; our ability to protect our intellectual property rights; operational problems with our information systems as a result of system failures, viruses,security and cyber security breaches, disasters, and disruptions due to system upgrades or the integration of systems; an actual or perceived breach of data security; our reliance on key management and our ability to attractand/or retain key personnel; changes in accounting policies and estimates; and exposure to risks arising from financial instruments, including credit risk on trade accounts receivables and other financial instruments, liquidityrisk, foreign currency risk, and interest rate risk, as well as risks arising from commodity prices.
These factors may cause the Company’s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on the Company’sbusiness. For example, they do not include the effect of business dispositions, acquisitions, other business transactions, asset write-downs, asset impairment losses, or other charges announced or occurring after forward-looking statements are made. The financial impact of such transactions and non-recurring and other special items can be complex and necessarily depends on the facts particular to each of them.
There can be no assurance that the expectations represented by our forward-looking statements will prove to be correct. The purpose of the forward-looking statements is to provide the reader with a description ofmanagement’s expectations regarding the Company’s future financial performance and may not be appropriate for other purposes. Furthermore, unless otherwise stated, the forward-looking statements contained in thispresentation are made as of the date of this presentation, and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, futureevents, or otherwise unless required by applicable legislation or regulation. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20193
GLENN J. CHAMANDYPRESIDENT AND CHIEF EXECUTIVE OFFICER
STRATEGIC BUSINESS OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20194
LEVERAGING OUR CUSTOMERS’ DISTRIBUTION CAPABILITIES
BACKTO BASICS
LEVERAGING OUR CORE COMPETENCIES Low-cost, large-scale vertically integrated manufacturer
STRATEGIC BUSINESS OVERVIEW
SIMPLIFYING PRODUCT PORTFOLIO
DRIVING MANUFACTURING COST ADVANTAGE AND SCALE
DRIVES GROWTH AND IMPROVED GROSS MARGIN, SG&A AND RONA
5 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
2.82.9
20182017 2019E
0.3
1.1
1999 2009
POSITIONED FOR NEXT PHASE OF GROWTH
STRATEGIC BUSINESS OVERVIEW
HISTORICAL NET SALES1
Organic growth in imprintablesshare in the U.S.
Development of Central American manufacturing hub
High organic growth Acquisitions bolster capabilities
Acquired brands, products anddistribution assets to build a platform for future growth,
which added complexity
Back-to-Basics
Launched Back to Basics with consolidation of business units and
initiatives to reduce complexity and leverage our scale, enabling
the next phase of growth
Developing next major manufacturing hub in Bangladesh
LSD
dec
line
Net sales in US $b
1.1
2.2
20132009
2.2
2.8
2013 2017
Accelerated penetration intoInternational markets
Leveraged capabilities to expand into retail innerwear, initially via
M&A
Established initial Bangladesh production
Expansion into new areas
1 On a calendar year basis
6 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
BACK-TO-BASICS PRODUCT PORTFOLIO SIMPLIFICATION
STRATEGIC BUSINESS OVERVIEW
SKU COUNT BY REGION
• Rationalizing redundant ship-to-the-piece SKUs
– Expected completion of phase-out by Q1 2020
• Continuing to grow in underpenetrated categories
• Improve mix and profitability by growing International SKU offering
Simplifying product portfolio and rationalizing less productive SKUs, while introducing new products in underpenetrated North American and International growth areas
U.S. INTERNATIONAL
1610
2
U.S. Europe Asia
Long-term increase / decreaseSKU figures in ‘000’s
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20197
Textile manufacturing hubs
Countries in which Gildan has a presence
Yarn spinning facilities
STRATEGIC BUSINESS OVERVIEW
GLOBAL VERTICALLY INTEGRATED LOW-COST MANUFACTURING SUPPORTED BY TWO HUBS IN CENTRAL AMERICA AND BANGLADESH
HIGHLIGHTS
1 Newest, state-of-the-art North American yarn spinning asset base
Large-scale integrated operations in textile, sewing and hosiery
Strategically located and duty favorable
~$1.9b capital invested in yarn, textile, hosiery and sewing facilities
~53k employees worldwide
Expanding large-scale, low-cost Bangladesh hub
2
3
4
5
GLOBAL PRESENCE
Gildan products
sold in 60+
countries
6
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20198
STRATEGIC BUSINESS OVERVIEW
DRIVING OUR MANUFACTURING HUBS TO GENERATE INCREMENTAL CAPACITY AND SUPPORT GROWTH
CENTRAL AMERICA / CARIBBEAN BASIN
BANGLADESH
Incremental capacity to support over $1b in incremental sales with margin expansion opportunity
• Large-scale open-end and ring-spun products suited for North American markets
• Consolidating production into the most attractive regions
• Furthering Gildan’s low-cost competitive advantage
• Opportunity to support further growth in North American Fashion Basics
• Unlocking International and Private Brand growth opportunities
• Provides opportunity to broaden our product portfolio
• Leveraging sourced fabrics creates incremental growth opportunities
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 20199
SIMPLIFYING OUR IMPRINTABLE AND RETAIL U.S. DISTRIBUTION INFRASTRUCTURE
Go-forward distribution centers
STRATEGIC BUSINESS OVERVIEW
• Expected completion of pick-to-the-piece distribution footprint consolidation by Q1 2020
• Leveraging distributor networks for imprintablesbusiness
• Retail Brick and Mortar and e-commerce partners for retail business
• Opportunities to further enhance overall distribution strategy
STRATEGYOPTIMIZED U.S. DISTRIBUTION FOOTPRINT
Exited distribution centers
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201910
STRATEGIC BUSINESS OVERVIEW
LEVERAGING OUR GLOBAL IMPRINTABLES DISTRIBUTOR NETWORK
Distributors’ distribution points
1 ~30 distribution points located in China
+60 distribution
points in the
Americas
+50distribution
points in Europe,
Middle East and Africa
+40distribution
points in Asia1
Over 150 distribution points worldwide
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201911
UTILIZING OUR RETAIL BRICK AND MORTAR AND E-COMMERCE PARTNERS TO DRIVE OUR RETAIL BUSINESS
SELECT U.S. BRICK AND MORTAR AND E-COMMERCE PARTNERS
RANGE OF INTERNATIONAL E-COMMERCE OPPORTUNITIES
STRATEGIC BUSINESS OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201912
PRIVATE BRANDS
MAJOR CUSTOMERS
GILDAN’S GROWTH DRIVERS
STRATEGIC BUSINESSOVERVIEW
STRATEGIC BUSINESS OVERVIEW
RETAIL BRANDS
BRAND PORTFOLIO
IMPRINTABLE BRANDS
Drive leadership in growing Fashion Basics product segment, reinforce core
brands’ value proposition and grow internationally by replicating North
American success
BRAND PORTFOLIO
Grow the Gildan family of brands with key retailers and e-
commerce partners
Partner with selected retailers and brands to supply large scale Basic
apparel programs
Investing in capacity to support growth
$500m in Central America $500m in Bangladesh
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201913 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
MIKE HOFFMANPRESIDENT, SALES, MARKETING AND DISTRIBUTION
SALES AND MARKETING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201914
Global imprintables
North American retail
1 Source: Management estimates for the imprintable market, and NPD Retailers Tracking service, POS and Consumer data as well as management estimates for the retail market2 Activewear includes t-shirts, fleece and polos, underwear includes men’s underwear bottoms and ladies panties, hosiery includes men’s, women’s and children’s socks and sheer; Other includes imprintable outerwear, workwear and accessories
GILDAN’S GLOBAL ADDRESSABLE MARKET
BY PRODUCT CATEGORY1,2 BY SALES CHANNEL1
~$20b global addressable
market
~$20b global addressable
market
Other
SALES AND MARKETING OVERVIEW
Gildan’s share represents 15% of its addressable market
Hosiery
Underwear
Activewear
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201915
~$11B GLOBAL IMPRINTABLES MARKET SIZE BY PRODUCT CATEGORY
1 Management estimates, go-forward constant economy growth rates, in wholesale dollars 2 Represents ~$6.7b at the Distributor level3 Includes T-shirts, long-sleeves, fleece and other basic products
SALES AND MARKETING OVERVIEW
U.S. MARKET INTERNATIONAL MARKET
~$5.5b U.S. market1,2
~$5.7b International
market1
Uniforms, workwear, outerwear andaccessories
Performance(synthetic)
Uniforms, workwear, outerwear and accessoriesBasics
(open-end)3
Basics(open-end)3
Fashion Basics(ring-spun)
Fashion Basics(ring-spun)
16 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
Event merchandising, tourism and all others | ~30%
OVERVIEW OF IMPRINTABLE PRODUCT END-USERS
SALES AND MARKETING OVERVIEW
Corporate | ~35%
Uniforms | 10%
Education | 10%
Consumer | 15%
Range of imprintable
end-user applications
Source: Management estimates
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201917
MARKET DYNAMICS INCREASING ACCESSIBILITY AND OPPORTUNITY
↑ Ideal for short runs with multiple colors
↑ Rapid speed to market
GROWING UNIVERSE OF ONLINE PLATFORMS SELLING DIRECTLY TO CONSUMERS AND SMALL BUSINESSES
DIGITAL PRINTING IS DRIVING THE GROWTH OF ON-DEMAND RETAIL READY PRODUCTS
Developing new products optimized for digital printing
Opportunity for Gildan
Advantages
Gildan’s products are compatible with digital printing
SALES AND MARKETING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201918
IMPRINTABLES CORE BRAND POSITIONING
Natural worn and comfortable look with a rich color
pallet
Globally iconic fashion brand with
a premium Fashion offering
Premium polo shirts for the new
business preuxfessional
Imprintablesindustry leader
with value Fashionoffering
SALES AND MARKETING OVERVIEW
GILDAN AMERICAN APPAREL COMFORT COLORS PRIM + PREUX
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201919
DRIVING SHARE IN U.S. FASHION BASICS
SALES AND MARKETING OVERVIEW
AMERICAN APPAREL COMFORT COLORS
Gildan is well positioned with a ~20-25% share in ring-spun Fashion Basics in the U.S. and expects continued growth at above market rates, supported by vertically integrated, low-cost manufacturing
PORTFOLIO OF U.S. FASHION BASIC BRANDS
GILDAN
4.5oz. 6.0oz. Tri-blend Side-seamed Garment dyed5.5oz.
Gildan 5000 Ring-Spun
Launching in 2020
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201920
Gildan 64000 becoming 2nd largest imprintable style
INDUSTRY LEADING RING-SPUN FASHION BASICS PORTFOLIO
Price: ~$2.00 Price: ~$2.25
Price: ~$3.00 Price: ~$3.00
2001 COMPETITOR A COMPETITOR B
Price: ~$3.00
GILDAN 64000 CONTINUING RAPID GROWTH TRAJECTORY
FULL RANGE OF RING-SPUN FASHION BASICS ADDRESSING ALL PRICE POINTS
201720152014 2016 2018
Gildan 64000 volume growth +20% CAGR
64000 980
Source: Pricing at leading distributor
5000R/S
C1717
Price: ~$4.00
SALES AND MARKETING OVERVIEW
H000
Price: ~$2.25 Price: ~$2.50
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201921
NORTH AMERICAN RETAIL REPRESENTS A ~$9B ADDRESSABLE MARKET
SALES AND MARKETING OVERVIEW
BY CHANNEL BY PRODUCT
~$9b U.S. market
~$9b U.S. market
Source: NPD Consumer Data and management estimates, in wholesale dollars 1 Includes men’s, women’s and children’s socks and sheer
Activewear
Underwear
Hosiery1
MassDepartment stores /
national chains
Off-price
Other brick-and-mortar retail
Online
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201922
ADDRESSABLE RETAIL MARKET BY PRODUCT CATEGORY
SALES AND MARKETING OVERVIEW
ACTIVEWEAR UNDERWEAR HOSIERY1
Retail Brands
Private Brands Private Brands
Retail Brands
Private Brands
Retail Brands
~$3b market size
~$3b market size
~$3b market size
Source: NPD Consumer Data and management estimates, in wholesale dollars 1 Includes men’s, women’s and children’s socks and sheer
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201923
OVERVIEW OF GILDAN’S RETAIL BRAND PORTFOLIO
Globally iconic premium fashion brand Leading global lifestyle sock brand
Leading basics brand spanning multiple product categories
Premium heritage hosiery brand Leader in Canadian sheer
Iconic ladies hosiery brand
SALES AND MARKETING OVERVIEW
GILDAN’S RETAIL BRAND PORTFOLIO IS WELL ESTABLISHED IN BRICK-AND-MORTAR
Largest brand by revenue
LEVERAGING ONLINE MARKETPLACES
Continuing to grow retail brands via a marketplace centric e-commerce strategy
ACTIVEWEAR UNDERWEAR HOSIERY
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201924
RETAILER SELECT PRIVATE BRANDS
GROWING RELEVANCE OF PRIVATE BRANDS
SALES AND MARKETING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201925
RETAILERS COMMITTED TO DRIVE PRIVATE BRANDS
SALES AND MARKETING OVERVIEW
ELEVATING CUSTOMER PERCEPTIONS WITH HIGHER QUALITY PRODUCTS AND PREMIUM FEATURES
RECONFIGURING FLOOR SPACE TO EMPHASIZE PRIVATE BRAND OFFERINGS
Ring-spun
Four-way stretch
Moisture wicking
Anti-microbial
Tag-free comfort
Shifting floor plans to emphasize Private Brands
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201926
UNIQUELY POSITIONED TO CAPITALIZE ON SHIFT TO PRIVATE BRANDS
SALES AND MARKETING OVERVIEW
• Low-cost and large-scale manufacturing capacity
• Long-standing relationships with key retailers and brands
• Distribution infrastructure
• Systems and organizational capabilities to execute on large programs
• Financial capacity to support large-scale programs
• Long-term opportunities with low risk of attrition
• Minimal SG&A spend required
KEY SUCCESS FACTORS
Underwear
Hosiery
Activewear
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201927
BACKTO BASICS
SALES AND MARKETING OVERVIEW
POSITIONED TO SUCCEED
LEADING PRODUCT VALUE
PROPOSITION
LONG-TERM RELATIONSHIPS
SCALE OF OUR ORGANIZATIONAL CAPABILITIES
LOW-COST MANUFACTURING
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201928 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
BENITO MASIPRESIDENT, MANUFACTURING
MANUFACTURING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201929
MORE THAN TWO DECADES OF DEVELOPINGLARGE SCALE MANUFACTURING BASE AND SPECIALIZED SKILL SET
HONDURASMANUFACTURING
DISTRIBUTION CENTRE
HONDURAS
SCREEN-PRINTING(NEW BUFFALO ACQUISITION)
HONDURASRIO NANCE 6
TEXTILESDEVELOPMENT
OF BANGLADESH HUB
DOMINICAN REPUBLIC
TEXTILES
NICARAGUA1ST SEWING FACILITY
HONDURASRIO NANCE I
TEXTILES
HONDURAS1ST OFF-SHORE
PLANT SEWING
HONDURASRIO NANCE 4
HOSIERY
HONDURASRIO NANCE 5
TEXTILES
201620152010 2012 2013 20192018201720141997 2002 2005 2006 2007
HONDURASRIO NANCE 3
HOSIERY
HONDURASRIO NANCE 2
TEXTILES
BANGLADESH ACQUISITION
HONDURASGARMENT DYEING
ACQUIRED 4 PLANTS
BUILT 3 PLANTS
U.S. YARN SPINNING INVESTMENTS
29 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
MANUFACTURING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201930
GILDAN’S COMPETITIVE ADVANTAGE
OVERVIEW OF GILDAN’S MANUFACTURING COMPETITIVE ADVANTAGES
Yarn spinningcapability
Large scale in knittextiles, hosiery and
sewing
Scale of organizational
capabilities
Our people
Gildan’s competitive advantage stems from a ~$1.9b investment in large-scale, low-cost, vertically integrated, environmentally responsible manufacturing facilities
• State-of-the-art North American yarn spinning asset base provides cost advantage and consistent, high-quality supply of open-end, MVS and ring-spun yarns
• Strategically located in low-cost and duty favorable geographies
• Fixed cost leverage from cost reduction initiatives and investments in industry leading technologies
• Scale provides ability to streamline manufacturing facilities to optimize capacity and costs
• Flexible and resilient network of sewing facilities in Central America and Bangladesh
• Infrastructure and full spectrum of capabilities to support large-scale programs
• Strong balance sheet to support manufacturing capacity and working capital investments to secure large programs
• Ability to invest to drive innovation
• Strong localized management infrastructure with depth of talent
• Skilled workforce with >50K employees in Central America / Caribbean Basin and Bangladesh
Leading CSR • Vertically-integrated owned and operated facilities provide control and oversight
MANUFACTURING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201931
STATE-OF-THE-ART NORTH AMERICAN YARN SPINNING ASSET BASE
~$500m capital investment
Acquired new open-end facility (Eden) in 2019
OVERVIEW OF YARN OPERATIONS
7 yarn spinning facilities in close proximity to cotton
sources
Optimized transportation loop from raw materials to
finished goods
State-of-the-art spinning asset base
Newly acquired Eden facility
Yarn plants
Distribution centers (East Coast)
MANUFACTURING OVERVIEW
32 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
BIOMASS
RN3RN1
GILCHEM
RN5RN4
RN6
BIO-TOP
RN2
HDC
SUBSTATION
GLOBAL MANUFACTURING OFFICES
Scale and expertisedrives competitive
advantage
New open width capacity
New Ctex Lab and color lab capabilities
$1.3BILLION
INVESTED IN CENTRAL AMERICA AND
CARIBBEAN BASIN
2001-201932
RIO NANCE TEXTILE AND HOSIERY COMPLEX
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
MANUFACTURING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201933
REINFORCING OUR CENTRAL AMERICA COMPETITIVE ADVANTAGE
• Ramp-up of the state-of-the-art Rio Nance 6 facility
• Expanding capacity in existing Rio Nance 1, 2 and 5 facilities
• Consolidating and relocating higher cost Mexican and AKH production into existing Central American and Caribbean Basin facilities
• Consolidation of sock manufacturing capacity
• Divesting higher cost sewing plants
1
3
4
5
MANUFACTURING AND SUPPLY CHAIN INITIATIVES
~$1.3b investedin Central
America and Caribbean Basin
~ 45k
employees
MANUFACTURING OVERVIEW
2
Reducing costs while supporting $500m of incremental revenue
34 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
• Skilled workforce at competitive labour rates
• Water and energy availability at low-cost
• Duty-free access to targeted International markets
• Leveraging existing management team and close to 10 years of operating experience in Bangladesh
Supports $500m of
incremental revenue
ESTABLISHING A LARGE-SCALE, MULTI-PLANT MANUFACTURING COMPLEX IN BANGLADESH
BANGLADESH CAPACITY EXPANSION SUPPORTS FASHION BASICS, PRIVATE BRANDS AND INTERNATIONAL GROWTH
Shahriyar facility acquisition
Phase 1 supports 2022 sales
Land acquisition & site development
Infrastructure and building
investment
Manufacturing equipment investment
2010 2019 2020 2021 2022
Timeline
MANUFACTURING OVERVIEW
Phase 1 investment of ~$200m
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201935
ESTABLISHING A LARGE-SCALE, MULTI-PLANT MANUFACTURING COMPLEX IN BANGLADESH
InfrastructurePhase I
footprint
Optionality to construct a
second phase
SCALE AND FLEXIBILITY OF SITE PROVIDES OPTIONALITY
Illustrative site layout
Fully integrated textile production including knitting,
dyeing, finishing and cutting
Multi-story sewing facility on-site
INCREMENTAL SEWING CAPACITY
Expanding sewing capacity in Bangladesh by leveraging
sourced fabrics
Ensures sewing capacity in place
to support quicker ramp-up
of new Bangladesh
facility
Enables merchandising of
full range,including
ancillary product for retailers
MANUFACTURING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201936
BACKTO BASICS
WIDENING THE COMPETITIVE ADVANTAGE GAP WITH OUR COMPETITORS
LEADING CORPORATE
SOCIAL RESPONSIBILITY
LEVERAGING OUR PEOPLE AND
GLOBAL ORGANIZATION
VERTICAL INTEGRATION
INCREASING CAPACITY IN
CENTRAL AMERICA
EXPANDING BANGLADESH HUB
TO SUPPORT GROWTH
MANUFACTURING OVERVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201937 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
RHODRI J. HARRIESEXECUTIVE VICE-PRESIDENT, CHIEF FINANCIAL AND ADMINISTRATIVE OFFICE
FINANCIAL REVIEW
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201938
388504 524
586 596
201820152014 2016 2017 2019E
SOLID FINANCIAL PERFORMANCE
1.1
2
1.4
2
1.4
7
1.6
1
1.6
6
1.1
4
1.4
6
1.5
1
1.7
2
1.8
6
20162014 2015 2017 2018
1.4
3-1
.48
1.6
5-1
.70
2019E
2,2992,569 2,585 2,751 2,909
2014 20162015 2017 2018 2019E
-82
159
398
519429
201820172014 2015 2016 2019E
SALES1 ADJUSTED EBITDA1,2,4
EARNINGS PER SHARE1,2
In m $US6%
CAGR(2014-18)
13%3
CAGR(2014-18)
11%CAGR(2014-18)
Approx. $1.4b(2014-18)
FREE CASH FLOW1,2,4
In $US
In m $US
In m $US
545-555
200-250
LSD decline
FINANCIAL REVIEW
Diluted EPS Diluted adjusted EPS2
1 On a calendar year basis 2 See definition and reconciliation of non-GAAP financial measures in Gildan’s 2018 Report to Shareholders 3 Based on diluted adjusted EPS4 Adjusted EBITDA and Free Cash Flow for 2019 are expected to be positively impacted by ~$16m and ~$13m respectively, due to the initial adoption of the new lease accounting standard (IFRS 16)
3%CAGR
(2015-19E)
2%CAGR
(2015-19E)
3%3
CAGR(2015-19E)
Approx. $1.7b
(2015-19E)
39 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
REVENUE OVERVIEW
FINANCIAL REVIEW
REVENUE BY PRODUCT
15%
2017
87%
13%
85%
2018
85%
15%
20193
2,7512,909
US Rest of world1
REVENUE BY GEOGRAPHY
26%
74%
2017
80%
20%
2018
82%
18%
20193
2,7512,909
Hosiery and underwearActivewear
LSD decline2 LSD decline2
1 Includes Canada and International2 Represents full year guidance3 Percentages are based on 2019 YTD revenue breakdown by product and geography
In $m In $m
40 2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
CONTINUING TO ENHANCE PROFITABILITY TO DRIVE RETURNS
GROSS MARGIN
FINANCIAL REVIEW
SG&A AS A % OF SALES
RONA1
27.8% 29.1% 27.7%30.0%
2019E20172016 2018 Target
13.0% 13.6% 12.5% 12.0%
2016 2017 2018 2019E Target
<12.5%
14.0% 14.9% 15.6%
20.0%
2016 2019E20182017 Target
• Improving product mix
• Reducing complexity
• Expanding and optimizing low-cost manufacturingadvantage
• Optimizing distribution by leveraging distributors, retailers and e-commerce partners
KEY DRIVERS
<27.7%
In % In %
In %
<15.6%
1 See definition and reconciliation of non-GAAP financial measures in Gildan’s 2018 Report to Shareholders
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201941
CAPITAL INVESTMENTS TO EXPAND LOW-COST MANUFACTURING ADVANTAGE
FINANCIAL REVIEW
CAPITAL EXPENDITURES 1
In $m and %
14095
125
175
5%4% 4%
6%
-20
-15
-10
-5
0
5
10
0
50
100
150
200
250
2019E20172016 2018 Go-forward
Capex as a % of sales Capex
Depreciationof PPE2
$119 $137 $131 $133
1 Capex includes both purchases of property, plant and equipment and intangible assets 2 Depreciation of property, plant and equipment included in net earnings
4-5%
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201942
STRONG FREE CASH FLOW GENERATION
FINANCIAL REVIEW
FREE CASH FLOW1
In $m
398
519
429
2019E20172016 2018 Go-forward
AdjustedEBITDA1
$524 $586 $596 $545-$555
1 See definition and reconciliation of non-GAAP financial measures in Gildan’s 2018 Report to Shareholders
200-250
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201943
MAINTAINING 20% DIVIDEND GROWTH
FINANCIAL REVIEW
DIVIDEND PER SHARE1
In $ per common share
0.160.19
0.230.26
0.31
0.37
0.45
0.54
201820142012 20152013 2019E2016 2017
~20%
Div. yield %2 1.0% 0.8%
1 Based on a calendar year basis2 Based on quarterly average share price on a fiscal year basis 3 Based on share price as of November 12th, 2019
0.8% 0.9% 1.1% 1.2% 1.5% 2.0%3
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201944
CONTINUING TO RETURN CAPITAL TO SHAREHOLDERS VIA SHARE REPURCHASES
FINANCIAL REVIEW
SHARE REPURCHASES
In $m
395
329
368
2016 2017 2018 2019E
5.0% 6.1%
5.0% NCIB program in
place
% of shares repurchased
5.7%
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201945
MAINTAINING 1X-2X LEVERAGE
FINANCIAL REVIEW
NET DEBT / ADJUSTED EBITDA1
1.0x
1.3x1.2x
1.0x
1.3x
1.1x 1.1x1.0x
1.3x
1.5x1.4x
1.0x
1.6x
1.8x1.7x
Q4 Q1Q1 Q2Q3Q1Q2 Q3 Q4 Q2Q3Q2 Q1 Q4 Q3 Target
Net debt / Adjusted EBITDA framework
2016 2017 2018 20192
1 See definition and reconciliation of non-GAAP financial measures in Gildan’s 2018 Report to Shareholders 2 Average impact of implementation of IFRS 16 on the 2019 net debt / adjusted EBITDA ratio is +0.1x
2.0x
1.0x
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201946
Dividend yieldOrganic growth Share repurchasesOperating margin expansion
Expected total shareholder return
~10%
ACHIEVING TSR OF ~10% VIA OPERATIONAL ENHANCEMENTS AND CAPITAL RETURN
FINANCIAL REVIEW
TOTAL SHAREHOLDER RETURN OBJECTIVE (%)
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201947
2019 RECAP AND 2020 GROWTH DRIVERS
FINANCIAL REVIEW
*Includes trade account receivables charge for Heritage bankruptcy1Includes expected restructuring and acquisition-related charges of ~$45m and does not include additional potential GAAP charges of $35-$45m2 As at September 29, 2019 - 1.7x
Sales LSD decrease Fashion Basics, International and Private Brands
Gross Margin <27.7%Margin expansion from manufacturing initiatives,
easing of raw material headwinds
SG&A <12.5% Continued SG&A cost containment
Diluted EPS1 $1.43-$1.48*
Adjusted EPS $1.65-$1.70* Attractive EPS growth
Capex $175m ~4 -5% of sales
Free Cash Flow $200-$250m Strong cash flow generation
Net debt / EBITDA2 1x-2x Strong balance sheet
FY2019 guidance FY2020 drivers
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201948
GLENN J. CHAMANDYPRESIDENT AND CHIEF EXECUTIVE OFFICER
CONCLUSION
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201949
Leading brands, products and customer relationships
Mid-single digit revenue growth30% gross margin, 12% SG&A
Dividend growth, acquisitions and return of capital via share repurchases
LEVERAGING OUR CORE COMPETENCIES
Imprintable Brands
Drive leadership in growing Fashion
Basics product segment, reinforce core
brands’ value proposition and grow
internationally by replicating North
American success
Grow the Gildan family of brands with
key retailers and e-commerce
partners
Partner with selected retailers and
brands to supply large scale Basic
apparel programs
Retail Brands Private Brands
CONCLUSION
Driving manufacturing cost advantage and scale with$1b of incremental low-cost capacity in
Central America and Bangladesh
Simplifying product portfolio
Leveraging our customers’ distribution capabilities
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 201950
SAN PEDRO SULA, HONDURAS
NOVEMBER 19-21, 2019
QUESTIONPERIOD
2019 Gildan Institutional Investor and Analyst Conference – San Pedro Sula, Honduras - November 19-21, 2019
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