Professional Documents
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2
MORE ACTIVE PORTFOLIO MANAGEMENT
RESHAPE THE
PORTFOLIO
2016 2017
Q2 Q3 Q1 Q2 Q3 Q4
DISTORT TRANSFORM
COMPLETED SALE OF ASIA
CONTEMPORARY
MODEL
BRANDS
COMPLETED SALE OF
LICENSING BUSINESS
ACQUISITION OF
Choices
WILLIAMSON-DICKIE
ELEVATE
ONGOING…
DTC
4
ESTIMATED GLOBAL WORKWEAR MARKET
LARGE
GROWING FOOTWEAR $30B
TOTAL
APPAREL
$6B $24B
UNDER-PENETRATED
5
WORKWEAR MARKET IS HIGHLY FRAGMENTED
6
VF PORTFOLIO MANAGEMENT CRITERIA
STRATEGIC FINANCIAL
Access to attractive Accretive growth and
consumer segments, margin profile
category adjacencies
Strong free cash flow
Capability additions yield
and enhancements TSR
> 15% return on capital
Synergies with existing over time
VF portfolio
TSR accretive
$1 billion brand potential
7 VALUE CREATION
WILLIAMSON-DICKIE IS A STRONG PORTFOLIO FIT
PORTFOLIO LENSES
CRITERIA ASSESSMENT
Attractive Consumer
Segment ✓ Large growing market, VF
becomes a global leader
STRATEGIC
✓
Strong B2B/B2C presence,
Assets and Capabilities scalable digital platform, large
international opportunity
STRATEGIC FINANCIAL
$1 Billion Potential ✓ Expected to exceed $1B of
revenue by 2021
Doubles VF’s workwear
Synergies with VF ✓ business; adds scale, provides
access to new growth pools
✓
Attractive growth, Accelerates revenue, EPS, and
FINANCIAL
FCF growth; provides
margins and FCF immediate accretion
VALUE
CREATION 15%+ ROIC ✓ Attractive return on capital
profile; highly capital efficient
8
TRANSACTION SUMMARY
PURCHASE PRICE ~$820 million
ESTIMATED CLOSING Q4 2017 subject to government approval and other customary conditions
FINANCING Cash
<1x LTM Revenue
TRANSACTION MULTIPLES
11x LTM Adjusted EBITDA
~$200M 2017 Revenue
ACCRETION1
~$0.02 2017 EPS
Minimal impact to leverage metrics & liquidity
CREDIT METRICS 2.3X 2017 Debt/EBITDA
Capacity for additional acquisitions
9
(1) Excluding transaction and other deal-related expenses
WILLIAMSON-DICKIE OVERVIEW
(1) Includes retail revenue of licensed brand merchandise; (2) Includes owned and non-owned stores
10
WILLIAMSON-DICKIE REVENUE BREAKDOWN
Dickies is an iconic, global brand with significant International & DTC presence
Note: Revenue breakdown based on 2016 results
11
STRATEGIC RATIONALE
VF International, DTC and Tax platforms positioned to unlock value and accelerate
growth
12
POWERFUL PORTFOLIO OF COMPLEMENTARY
ASSETS AND CAPABILITIES
13
PROVIDES ACCESS TO NEW, LARGER GROWTH
POOLS
CURRENT FORWARD VF W-D
MARKET TREND OUTLOOK OFFERING OFFERING
+
Services
Size of Market (# of employees)
Healthcare
Manufacturing
Construction
Transportation
Mining
-
14
ATTRACTIVE REVENUE GROWTH OPPORTUNITY
>$1B
Acquisition plan includes 4%
revenue CAGR through 2021
Significant contribution from
International, DTC, and new
initiatives (e.g. lifestyle)
North America core growth
assumption provides room for
additional synergy
45%
40%
Williamson-Dickie profitability well below VF 35%
Workwear 30%
15%
Acquisition plan includes 14% operating
10%
margin target by 2021; leaves room for
5%
additional value creation
0%
VF WD VF WD VF WD
Workwear Workwear Workwear
16
2021 OPERATING MARGIN ASSUMPTION
PROVIDES ADDITIONAL VALUE CREATION
OPPORTUNITY
25%
20%
2021 operating margin target remains below
% Operating Margin
VF Workwear and industry peers 15%
0%
Heritage
Group
Workwear
17
ACCELERATES VF 2021 REVENUE GROWTH
PROFILE
>$15B
Opportunity to add more than $1 billion of
>$14B
revenue by 2021
VF 2021 revenue now expected to exceed $15
billion
2016 – 2021 revenue now expected to increase
at a 5% to 7% CAGR 2021 2021
Organic Revised
Note: 2021 references in this presentation are based on the company’s new fiscal year end
18
ACCELERATES VF’S 2021 EARNINGS GROWTH
PLAN
>$5.00
Opportunity to drive more than $5.00 of
earnings power by 2021
Immediately accretive to 2017 EPS and free
cash flow excluding transaction and other deal- $2.96
related expenses
2017 2021
Revised Outlook Revised Outlook
Note: 2021 references in this presentation are based on the company’s new fiscal year end
19
2017 FINANCIAL IMPLICATIONS
PREVIOUS CURRENT
OUTLOOK OUTLOOK
20
(1) Excluding transaction and other deal-related expenses
2021 PLAN TSR UPDATE +14% to +16%
+1%
+3%
+3%
+3%
+4% to +6%
1 2 3 4
Mid-Single-Digit Operating Unlock Value Strong FCF Yield
Revenue Growth Margin from VF Tax and Return on
Improvement Platform Capital