docTalent in creating and managing brands managing
download 
Report Transcription
Talent in creating and managing brands managing
Company of Desired Brands Talent in creating and managing brands 12/2/2009 Company of Desired Brands The objective of this presentation is to show 1. Why is a brand an important asset ? 2. Alpargatas’ talent in managing brands 3. Our commitment to sustainability 4. Why did we choose to be a branded Company ? 5. Why invest in Alpargatas ? Company of Desired Brands 1. Why is a brand an important asset ? Brands are important to ... • Project the company’s image • Strengthen its reputation • Win consumer loyalty • Reposition products and services • Increase negotiating power • Facilitate entry into new markets • Block new entrants ...and to leverage performance. Alpargatas’ sustainable performance (R$ million) Gross Sales CAGR 16% EBITDA CAGR 21% 1,963 526 1998 245 44 2008 1998 Net Income CAGR 22% 173 28 2008 1998 Market Capitalization CAGR 33% 1,821 109 2008 1998 12/01/09 Company of Desired Brands 2. Alpargatas’ talent in managing brands Our Vision To be a global company of desired brands in sporting goods, footwear and industrial textiles From commodity to global brand Havaianas: from commodity to global brand • The first three decades • Repositioning the brand • International expansion • Building a global brand • Havaianas today The first three decades : 1962 to 1992 Product • One model in five colors • No renewal for more than 30 years • Low price • Focus on low-income consumers • Commodity The first three decades : 1962 to 1992 Advertising: focused on functionality “Does not lose shape, does not smell, straps do not come off” The first three decades : 1962 to 1992 Point of Sale (POS) • Distribution in low price channels • Concentration in supermarkets • Rejected in sophisticated channels The first three decades : 1962 to 1992 From 1989 on the business model began to show signs of weakness Sales volume 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 (millions of pairs) Havaianas: from commodity to global brand • The first three decades • Repositioning the brand • International expansion • Building a global brand • Havaianas today Repositioning the brand: 1993 to 2001 Product • Continuous innovation • New collections to strengthen consumer’s emotional link with brand Change in focus Production oriented Consumer oriented No innovation New collections Repositioning the brand: 1993 to 2001 Advertising: energetic, fun and surprising The unlikely combination... Electronic media Print media • Valuing product through people who use it • Communicate brand launches and innovations • Humor • Value design and colors Repositioning the brand: 1993 to 2001 POS: valuing and segmentation • Essential for image • New fittings for each channel • Special displays Repositioning the brand: 1993 to 2001 Before After Rational purchase Emotional purchase Buy without trying Personal choice One pair is enough Collect models “We would lose them on the beach and they would be there when we came back” Desired product For D and E social classes Every one wears Commodity Desired brand Havaianas: from commodity to global brand • The first three decades • Repositioning the brand • International expansion • Building a global brand • Havaianas today International Expansion: 2002 to 2006 • Premium positioning: fashion accessory • Presence through distributors: • Lower investment • Greater number of countries • Distributor has knowledge of local market • Virtuous cicle of internationalization Success in Brazil International Success International Expansion : 2002 to 2006 Every one wears them... Luana Piovani Luiza Brunet Beyonce Jennifer Aniston David Beckham Carolina Dieckmann Fernando Scherer Giovanna Antonelli and Murilo Benício Angelina Jolie Cameron Diaz International Expansion : 2002 to 2006 ...even the most powerful man in the world. President of the USA Barack Obama Havaianas: from commodity to global brand • The first three decades • Repositioning the brand • International expansion • Building a global brand • Havaianas today Building a global brand: 2007... To build a global brand we focused on: Brand strength Distribution International markets Strategies Leverage our brand equity Ensure suitable distribution Accelerate international growth Initiatives • Brand extension • Concept store • Franchises • Own operations • Own operations in strategic markets: > Visibility > Profitability Building a global brand: 2007... Strategic markets • USA and Europe • Main global fashion markets • High consumption potential Havaianas consumption in 2008 (pairs/000’s of inhabitants/year) 842 Brazil 17 8 8 6 2 Italy USA France Spain United Kingdom Building a global brand: 2007... Alpargatas USA • Start up: 2007 • Headquarters: New York • Sales outlets: ~3,000 • Distribution center : Columbus, Ohio Building a global brand: 2007... Alpargatas Europe • Start up: 2008 • Headquarters: Madrid • Sales outlets: ~3,700 • Distribution center: Taragona, Spain Building a global brand: 2007... Alpargatas USA and Alpargatas Europe accelerated growth Net Sales Gross Profit (R$ million) (R$ million) 191% 54.1 18.6 9M08 269% 21.8 5.9 9M09 9M08 9M09 Havaianas: from commodity to global brand • The first three decades • Repositioning the brand • International expansion • Building a global brand • Havaianas today Havaianas today Italy Global brand France USA Australia Argentina Spain Japan New Zealand Havaianas today 2.3 billion pairs sold 9 pairs produced per second ~ 80 countries in which the sandals are sold R$52,000 the highest price paid for a pair ~ 70 models launched in each new collection 8 out of 10 Brazilians consume one pair a year U$100 price of custom-made Havaianas in the USA Company of Desired Brands Our talent in brand management enabled us to reposition and make it a global brand... Company of Desired Brands ...we are ready to do the same with Building a Global Asset Topper: challenges in being global Positioning • Clear and different • Tangible and intangible attributes • Distribution channels • Opinion making consumers Brand unification • Brazil and Argentina Being a reference in sporting goods Positioning Features that make different from its competitors and relevant to its consumers Vigour and Irreverence Positioning Attributes, habits and attitudes Tangible • Multisport brand • Cost x benefit • Quality • Durability • Comfort • Innovation Intangible • Democratic brand • Vibrant • Emotive • Surprising • Creative • Sensual • Young • Emotional comfort Positioning • Legitimate discourse on how to approach life • Passionate Latin relationship with sports and life • The pleasure, the thrill and the emotion of being in the game “The heart rules” Unifying the brand Logo Brazil Argentina Brazil & Argentina Unifying the brand Communication Brazil Argentina Unifying the brand Topper stores São Paulo Buenos Aires Unifying the brand Sponsorship Brazil Argentina Unifying the brand Global Line products Be a reference in sporting goods Multisport brand Premium Value Life Style Basic Be a reference in sporting goods • Differentiation We turned the brand essence, “Coração Manda” (The heart rules), into an asset • Relevance We created an inspiring brand that has value and its own personality • Consistency We unified the visual and verbal communication • Ownership We created and integrated unique equities Opportunities for Topper Company of Desired Brands Our branding know-how enabled us to reposition ... ...and we are repeating this with ... ...this know-how enables us to manage our brands globally. Company of Desired Brands 3. Our commitment to sustainability Company of Desired Brands To be a sustainable company it is necessary to • Be economically viable • Be socially fair • Be ecologically correct Company of Desired Brands Economic Responsibility Alpargatas Today Consolidated R$ million • The biggest sandals, sporting goods and industrial textiles company in South America Gross Sales 1,698.3 • Products used by consumers in 80 countries Net Sales 1,438.7 • Own operations in Brazil, Argentina, United States, Spain, France, Italy and England 9M09 Gross Profit 593.9 Gross Margin 41.3% EBITDA 198.3 EBITDA Margin 13.8% Cash 253.2 • 16 plants • 15,600 employees, 4,600 of which in other countries 3Q09 Performance Alpargatas stands out in the footwear sector, with growing sales and profitability • Increase in sales volumes in domestic and international operations Growth in Consolidated Results x 2Q09 x 3Q08 Net Sales 16.4% 1.8% • Austere cost and spending management Footwear Sales Volume 44.5% 4.0% Gross Margin 7.7 p.p. 2.8 p.p. • Accelerating CCC (Cash Conversion Cycle) EBITDA Margin 10.4 p.p. 2.4 p.p. 54.8 9.2 • Reduced indebtedness Consol.. Balance Sheet Consol Net Income(R$ mm) Cash (R$ mm) 09/30/09 12/31/08 253.2 177.0 3Q09 Performance • Success of new Havaianas collection • Upturn in consumption boosted sporting goods sales • 158% increase in number of points of sales • Higher added value products in sales mix • Growth in sales volume of international operations Strong growth in net sales 16.4 % vs. 2Q09 1.8 % vs. 3Q08 Net Sales (R$ million) International operations already account for 24% of Alpargatas’ sales Sales by Operation 8% 10% 24% Domestic 76% International Sales by Business 31% Sandals 51% Sport. goods Textiles Retail Alpargatas Argentina (AR$ million) Net Sales Gross Profit 15.6 % 24.5 % EBITDA 32.8 % 25.9 59.4 197.2 170.5 3Q08 47.4 3Q09 3Q08 19.5 3Q09 3Q08 3Q09 Cost of Goods Sold (09/30/09) R$ 845 million Raw materials 19% 57% 24% General manufacturing expenses Labor Gross Margin (% of net sales) Increase in sales volume, higher added value mix and productivity increased gross margin by 7.7 percentage points 5.0 p.p. 2.7 p.p. 45.7% 38.0% Gross margin 2Q09 Volume / mix Restructuring/ Productivity Gross margin 3Q09 EBITDA (R$ million and margin %) EBITDA increased 153% with gains in volume/ price and emphasis on productivity 69.1 14.0 ( 13.3 ) ( 7.2 ) . 102.8 ( 1.1 ) . 101.7 40.2 8.9% EBITDA 2Q09 19.4% Volume Price Productivity of SG&A Non-recurring taxes Others Operating EBITDA 3Q09 19.2% Exchange variation EBITDA 3Q09 Net Income (R$ million) Higher profitability increased net income by R$ 54.8 million 61.5 3.6 6.0 3.4 (19.7 ) 53.5 (1.3) Net income 2Q09 EBITDA Financial result Investment in Tavex Corp. Income tax Others operational Net result 3Q09 Cash Flow (R$ million) CCC acceleration generated R$ 76.2 million in cash in 2009 198.3 1.1 10.5 ( 39.6 ) ( 11.2 ) ( 7.5 ) ( 55.1 ) 336.8 ( 20.3 ) 273.5 253.2 177.0 Cash balance 12/31/08 EBITDA Invest. working capital CAPEX Operating cash I Exchange variation Financial result Payment of taxes Amort. debt (net of loans) Operating cash II Shareholders Cash balance remuneration 09/30/09 Indebtedness (R$ million) Low net indebtedness: 0.1 x 2008 EBITDA • Financial debt on 09/30/09: R$ 296.8 million • 62% Brazil • 38% Argentina and overseas subsidiaries • 55% short term, with 48% in foreign currency • 45% long term, with 33% in foreign currency • Net debt on 09/30/09: R$ 43.7 million Investments R$ 40 million up to September 2009 Internationalization 6% 16% 31% Plant modernization IT 18% Maintenance 29% New stores Capital Market In 2009, Alpargatas preferred shares appreciated 111% Index 100 = 12/31/2008 211 ALPA4 182 IBOVESPA 100 jan 12/31/08 R$ 47.00 feb mar apr may jun jul aug sep oct nov 12/01/09 R$ 99.00 Share Structure Common Shares 9,076,204 Total Capital 17,676,794 shares Camargo Corrêa S/A Treasury Free floating Preferred Shares 8,596,590 Shareholders’ Remuneration R$ 29.4 million in 2009 53.1 48.1 47.5 52.8 29.4 2005 2006 2007 2008 2009 Financial Guidelines for 2010 • Focus on productivity • Accelerate CCC • Leverage ROCE • Management model incorporating sustainability as competitive differential Company of Desired Brands Socio-Environmental Responsibility Instituto Alpargatas Mission To improve the quality of child and youth education through sports in the communities in which Alpargatas operates • • • • 70,569 students benefited 127 educational projects 19 thousand hours of training 107 participating schools Focus on Sustainability Reduction in water and energy consumption and waste generation Water Energy Waste (m³/000 units) (kWh/000 units) (kg/000 units) - 2.0% - 12,1% - 2.3% 2.1 434.5 431.0 56.0 55.9 1.9 2008 Oct/09 2008 Oct/09 2008 Oct/09 Company of Desired Brands 4. Why did we choose to be a branded company? Why did we choose to be a branded company? • Brands have been part of our DNA for a 100 years • We know how to build, reposition and drive the value of brands • We are the only Brazilian company to create a global consumer brand • Brands are the core of our Mission and our Vision Brands remain. Celebrities and personalities go! Company of Desired Brands 5. Why invest in Alpargatas? Why invest in Alpargatas? • Resilience of business model Operating efficiency, free cash flow, revenues in multiple currencies and human capital management • Brand awareness We have market leading brands in Brazil and abroad that leverage our results and drive the company’s values • Regional leader in sandals and sporting goods Havaianas is market leader in Brazil and Topper is leader in Argentina • Flexible sourcing We have the advantage of being able to manufacture in Brazil or abroad • Retail presence We work directly in the retail trade (own stores and franchises), the only way to display the entire product line and protect our brands at the same time • Cash generation Business model with vocation for cash generation • Solid balance sheet High financial leverage capacity
