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2009
Investor Presentation April 2010 FORWARDLOOKING STATEMENTS Except for historical information provided herein, this presentation may contain information and statements of a forward‐looking nature concerning the future performance of Dorel Industries Inc. These statements are based on suppositions and uncertainties as well as on management'ss best possible evaluation of future events. management events The business of the Company and these forward‐looking statements are subject to a number of risks and uncertainties that could cause actual results to differ from expected results. Important factors which could cause such differences may include, without excluding other considerations, increases in raw material costs, particularly for key input factors such as particle board and resins; increases in ocean freight container costs; failure of new products to meet demand expectations; changes to the Company’s effective income tax rate as a result of changes in the anticipated geographic mix of revenues; the impact of price pressures exerted by competitors, and settlements for product liability cases which exceed the Company’s insurance coverage limits. A description of the above mentioned items and certain additional risk factors are discussed in the Company’s Annual MD&A and Annual Information Form, Form filed with the securities regulatory authorities. authorities The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference. The Company’s business, financial condition, or operating results could be materially adversely affected if any of these risks and uncertainties were to materialize. Given these risks and uncertainties, investors should not place undue reliance on forward‐ looking statements as a prediction of actual results. Note: All figures are in US dollars. 2 AT A GLANCE 3 DIVISIONS PRODUCT RANGE DOREL EUROPE DOREL JUVENILE GROUP USA DOREL DISTRIBUTION CANADA IGC DOREL PTY (AUSTRALIA) DOREL BRAZIL Children’s car seats Strollers High chairs Playpens Toddler beds Early learning/infant health/safety aids Cribs, dressers CYCLING SPORTS GROUP (CSG) PACIFIC CYCLE APPAREL & FOOTWEAR GROUP (AFG) Bicycles Fitness apparel Jogging strollers Swing sets Ride‐on toys Others recreational products AMERIWOOD COSCO HOME & OFFICE DOREL ASIA DOREL ASIA DOREL HOME PRODUCTS ALTRA FURNITURE Ready‐to‐assemble furniture Metal folding furniture Step stools Ladders Futons Bunk beds Upholstery OUR PREMIUM BRANDS RECENT ACQUISITIONS 4 2003 Ampa France (Dorel France) 2004 Pacific Cycle 2007 IGC Australia (55% interest) 2008 Cannondale/SUGOI 2008 PTI Sports 2009 2009 Baby Art (Hoppop Brand) Baby Art (Hoppop 2009 Dorel Brazil (70% interest) 2009 IronHorse Bicycles Bicycles 2009 Gemini Bicycles 2009 2009 Hot Wheels Circle Bikes Hot Wheels, Circle Bikes REVENUE BY SEGMENT 2009 22% JUVENILE 46% 32% RECREATIONAL/LEISURE / HOME FURNISHINGS 5 GEOGRAPHIC DISTRIBUTION OF SALES (BY CUSTOMER) 2009 2% US 29% 6% 63% CANADA EUROPE OTHER 6 MANAGING THE ECONOMIC DOWNTURN 2009 Highly proactive in product development Invested in 5 acquisitions Opening to mid‐price point products maintained strong point‐of‐sale levels Exciting new product introductions Exciting new product introductions 7 JUVENILE SEGMENT Years Ended December 30 2009 Revenues Gross Profit Earnings from operations* *Includes out of period F/X (losses)/gains Excluding F/X effect 8 2008 $ 995,014 $ 1,073,722 274,497 309,680 92,534 126,837 $ (12.6) 105,134 $ 8.9 117,937 A WORLD LEADER IN JUVENILE World’s largest Juvenile Products Company in our categories. Consistent growth: Consistent growth: 5% average annual growth 6% earnings from operations CAGR 6% earnings from operations CAGR Intense product development = pipeline of new products 9 A WORLD LEADER IN JUVENILE DOREL NORTH AMERICA in the Market Booster Car Seats Convertible Car Seats Infant Car Seats Strollers Walkers High Chairs NO 1 DOREL DOREL Graco DOREL DOREL Graco NO 2 Graco Evenflo fl Evenflo fl Graco Evenflo fl DOREL NO 3 Evenflo Graco Dorel McLaren/Kolkraft Fisher Price Fisher Price Playards Travel Systems Bassinets Swings Bath Tubs Bath Accessories NO 1 Graco Graco Graco Fisher Price Fisher Price Munchkins NO 2 DOREL DOREL Kolkraft Graco DOREL Sassy NO Evenflo Evenflo Delta Kids II RC2 Kids II Bedrails Feeding Booster Seat Potties Bouncers Diaper Pails Gates Summer DOREL DOREL Kids II Playtex Evenflo RC2 Fisher Price Fisher Price Fisher Price Baby Trend RC2 DOREL Summer RC2 Summer DOREL Northstates Homesafety Travel Safety Infant Health Monitors Feeding Infant Carriers 1 DOREL Fisher Price DOREL DOREL Playtex Evenflo NO 2 Kidco Munchkin RC2 Summer Evenflo Infantino NO 3 Private Label DOREL Summer Fisher Price Avent Baby Bjorn 3 NO 1 NO 2 NO 3 NO Company estimates 10 INNOVATION – NORTH AMERICA Air Protect™ ‐ developed by DJG and Kettering University Revolutionary Revolutionary, ground‐breaking safety ground breaking safety feature designed to protect children in side impact collisions Initial exclusive BRU launch in July Initial exclusive BRU launch in July enhanced DJG results Additional retailers commencing January 2010 January 2010 Air ProtectTM platform evolving with new models to be introduced 11 A WORLD LEADER IN JUVENILE Dorel Europe A major player – close to US$450 million in sales close to US$450 million in sales A major player Strong brands Majority of sales to Juvenile product chains, boutiques, of sales to Juvenile product chains boutiques Majority independents Building mass merchant relationships General softness; no loss of market share Strong new product introductions Introducing products in lower to mid‐price point categories 12 A WORLD LEADER IN JUVENILE DOREL EUROPE in the Market France Spain Italy S ll Strollers NO 1 DOREL PLAY/JANE CHICCO DOREL DOREL CHICCO DOREL HAUCK GRACO NO 2 CHICCO DOREL PEG PERICLES CHICCO DOREL BUGABOO HARTAN M&P CHICCO CAM BUGABOO BEBECAR BUGABOO MUTSY DOREL PLAY/JANE CHICCO DOREL DOREL DOREL DOREL RÖMER DOREL TEAM‐TEX DOREL CAM RÖMER CHICCO RÖMER RÖMER DOREL BRITAX 3 RÖMER CHICCO INGLESINA CYBEX BEBECAR RECARO TEAM‐TEX RECARO GRACO Furniture NO 1 CHICCO JANE CHICCO CHICCO CHICCO CHICCO CHICCO HAUCK M&P NO 2 DOREL CHICCO PERICLES BREVI DOREL STOKKE TOPMARK GRACO CHICCO CHICCO CHICCO AVENT CHICO AVENT AVENT NUK AVENT AVENT CHICCO AVENT BIBI CHICCO AVENT JACKEL NO 3 MACLAREN Carseats NO 1 NO 2 NO NO 1 AVENT Small Nursery NO 2 TIGEX/NUK Product Belgium Portugal Switzerland Netherlands Germany TEUTONIA MOTHERCARE Company estimates 13 UK INNOVATION – EUROPE Quinny Senzz – designed by Dorel Europe Lightweight Lightweight, compact, easy to compact easy to maneuver Features a one‐hand, flat one‐piece , p fold. Like a full‐feature stroller Naturally shaped seat reclines for th hild’ the child’s seating comfort ti f t 14 INNOVATION – EUROPE Maxi‐Cosi FamilyFix Revolutionary in car seat safety & convenience i Uses IsoFix attachment for p y top‐rate safety Only one base required for two consecutive age car seats seats (up to 3.5 years old) (up to 3 5 years old) Light/sound confirmation of correct installation 15 RECREATIONAL/LEISURE SEGMENT Years Ended December 30 2009 Revenues Gross Profit Earnings from operations 16 2008 $ 681,366 $ 656,613 153,739 150,804 39,837 41,874 RECREATIONAL/LEISURE Three distinct operating divisions Cycling Sports Group (CSG) Cycling Sports Group (CSG) IBD Division Premium Brands Premium Brands Growing European distribution Focusing on breakthrough technology Focusing on breakthrough technology Build Dorel’s bike business to # 1 position 17 RECREATIONAL/LEISURE Pacific Cycle Mass merchants/sporting goods chains Mass merchants/sporting goods chains Bicycle parts/accessories (PTI) Provides one‐stop stop shop for buyers shop for buyers Provides one Non‐bike platform of products 18 RECREATIONAL/LEISURE Apparel Footwear Group (AFG) Growing performance apparel division incorporates SUGOI, performance apparel division incorporates SUGOI Growing Cannondale, GT, Schwinn, IronHorse and Mongoose lines New 70,000 sq. ft. Vancouver facility New high speed equipment New apparel industry veteran as President Focus – custom apparel Objective – triple business in 5 years 19 RECREATIONAL/LEISURE Worldwide Centers of Excellence Strategy g / Evolve as global innovation leader in R/L markets 5 Centers of Excellence around the world Expansion of Bethel, CT into world‐class Innovation Center for all R/L brands for all R/L brands Bedford, PA to test and assemble g Manufacturingg of frames at new Taichung, Taiwan Center of Excellence 20 RECREATIONAL/LEISURE 2009 Acquisitions Assets of Iron Horse Bicycles Assets of Iron Horse Bicycles Best known for downhill/extreme trail bikes Adds highly recognized brand to R/L portfolio Adds highly recognized brand to R/L portfolio Targeting Sporting Goods channel Assets of Australia’ss Gemini Bicycles Gemini Bicycles Assets of Australia New division: Cycling Sports Group, Australia Assets of Hot Wheels and Circle Bikes Assets of Hot Wheels and Circle Bikes New division: Cycling Sports Group, UK 21 RECREATIONAL/LEISURE A renewed commitment to the Schwinn brand Schwinn is the bicycle most Americans learned to ride on is the bicycle most Americans learned to ride on Multi‐million dollar national marketing, dealer activation and support program Objective: re‐energize America’s most iconic bicycle brand Full‐page magazine ads, national cable TV and social media Dealer promotions, co‐op advertising, special events D l i d ii i l Updated logo renews nostalgic feeling Theme: Theme: Bicycle bell rings in Schwinn Bicycle bell rings in Schwinn ‐‐ Br Br’ring ring‐ding: ding: “Let’s Let s Go Go For A Ride!” 22 HOME FURNISHINGS SEGMENT Years Ended December 30 2009 Revenues 23 2008 $ 463,734 $ 451,545 Gross Profit 77,308 50,915 Earnings from operations 36,696 7,964 GROWING HOME FURNISHINGS – MUCH IMPROVED Ameriwood – solidly profitable Increased RTA capacity Significant improvement at Cosco Home & Office (metal folding furniture, step stools) Focus Focus on reasonably priced furniture on reasonably priced furniture sold at mass merchants 24 PROVEN CORPORATE STRATEGY Recession resistant products Right products right price points, right time points right time Right products, right price North American consumers are shopping more at mass merchants Ensuring market flexibility in Europe, building relationships with mass merchants Investing heavily in product innovation Known brands Generate strong cash flow 25 SUSTAINABILITY PHILOSOPHY Active in sustainability on several fronts throughout all three segments By nature of large volume of units sold, Dorel’s eco‐conscious programs make an important contribution by reducing their environmental impact environmental impact Despite goal of keeping prices to consumers low, Dorel intends to remain proactive in its sustainability initiatives Strict policy in place to ensure sustainable business practices of suppliers 26 SUSTAINABILITY INITIATIVES DHP: DHP: the first company supplying the mass market retail the first company supplying the mass market retail segment with a futon made from 100% FSC certified wood Altra Furniture: uses Bamboo in some furniture; S Smart Program ‐ tP 100% 100% non‐virgin wood i i d Ameriwood: 1 All 1. All saw dust, scrap, wood chips are recycled and returned to saw dust scrap wood chips are recycled and returned to suppliers’ manufacturing processes 2. Over 500 tons of scrap metal is recycled annually LEED Gold Certified distribution facility reduces carbon foot‐print with two coast distribution system y st Nature Next Collection features products made p Safety 1 from eco‐conscious materials Warehouses are equipped with light sensors to eliminate entire areas being lit needlessly entire areas being lit needlessly 27 FULL YEAR – 2009 (in millions of US$ other than EPS) (in millions of US$, other Revenue 2008 $ 2,140.1 $ 2,181.9 Pre‐tax income 128.3 132.0 Net income* 107.2 112.9 EPS (diluted) 3.21 *Includes out of period F/X (losses)/gains Excluding F/X effect 28 2009 3.38 $ (12.6) $ 8.9 105,134 117,937 Q4 –– 2009 Q4 3 months (in millions of US$, other than EPS) Revenue Net income EPS (diluted) 2009 2008 $ 545,303 $ , $ 479,880 $ , 24,211 19,167 0.57 (2) 0.73 (1) 1) Out of period F/X gain $0.02/diluted share 2) Out of period Out of period F/X F/X loss loss $0.15 / $0 15 / diluted share 29 NEW LONGTERM FINANCING • US$50 million Series “A” Senior Guaranteed Notes 4.24% interest Principal repayment due April 2015 • US$150 million Series “B” Senior Guaranteed Notes 5.14% interest Principal repayments commence April 2013, due April 2020 30 OUTLOOK Established opportunities in Juvenile and Recreational/Leisure Foresee organic growth through new international markets, new products Continued innovative juvenile product introductions introductions through 2010 Increased IBD bike sales due to exciting new models Growth at Apparel Footwear Group Build on successes achieved in Home Furnishings No significant improvement expected in world economy but Dorel’s products will protect Company to certain extent 31 WHY INVEST IN DOREL? A consistent record of successful A consistent record of successful acquisitions A focus on Juvenile and Bikes where Dorel is a key player A strong performance in Home Furnishings A portfolio of known, premium brands Product development capabilities that drive growth A A strategy of the right products f h i h d and varied d i d price i points i Dedicated quality control/customer service by solid Asian presence Established customer relationships Strong cash flow Payment P t of a quarterly f t l dividend di id d 32 QUESTION & & A ANSWER PERIOD 33 Notes: 34 Notes: 35 Notes: 36
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