ECCO &

INTERNATIONALISERING

Michael Hauge Sørensen, Group COO, ECCO Sko A/S

Ambassadør-arrangement – Hindsgavl Slot, 30. maj 2013

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Cornerstones in going global

Production Retail Branding

First a quick look at

ECCO

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From humble beginnings...

• ECCO was founded in 1963 in Bredebro

• Karl Toosbuy and wife Birte produced ladies’

fashion shoes under the name “Venus”

• The comfortable footwear concept was

introduced in the late 1960ies

• The ECCO Group head office is still located in

Bredebro

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The world’s 2nd largest

producer of casual

footwear

The 4th largest golf

shoes brand

Top-5 producer of high

quality leather to luxury

brands

ECCO shoes are sold in

91 countries

...to a leading global footwear company

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ECCO BUSINESS BASICS 2012

• 19,500 employees of 50 nationalities

• 91 markets across 5 continents

• 20.2 million pairs of shoes sold worldwide in 2012

• Revenue at EUR 1,083 million (up 14% over 2011)

• Profit before tax at EUR 153 million (up 26% over 2011)

• Equity EUR 418 million – a solidity of 55.0%

5374 5041

6111

7089

8061

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9000

2008 2009 2010 2011 2012

746

460

631

904

1140

13,9%

9,1% 10,3% 12,7% 14,1%

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2008 2009 2010 2011 2012

Profit before tax (PBT) PBT%

Net Revenue

Profit before tax and profit margin

Million DKK

Million DKK

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VISION

to be the best

shoe company in the World

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How we make shoes

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Scandinavian

design

• It all begins at ECCO’s Design Centre

in Tønder

• The essence of ECCO’s Scandinavian

design philosophy is “form follows

function”

- simplicity, functionality, timeless elegance, appreciation of materials

and craftsmanship

• The designs are always checked for

lightness, softness, flexibility, comfort

and fit

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Product Development

• Bridges designers’ creativity

with Production

• Shoemakers and engineers

convert ideas into

prototypes

• Providing the tanneries and

shoe factories with detailed

instructions on how to

produce materials and

shoes

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Making leather

• Producing leather since 1986

• The ECCO Leather Group: The Netherlands,

Indonesia, Thailand and China

• Over 33% production is sold to non-ECCO

companies

• One of the five largest producers of quality

hides (wet blue) in the world

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• The ECCO factories - the key to the

company’s success

• Factories combine the best of two worlds:

Hand craft and automation where possible

• The world leader in direct injection

technology

• Four shoe factories: Thailand, Indonesia,

Slovakia and China

Shoe production

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Cornerstones in going global

Production Retail Branding

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Production history 1/2

1963 1st April – Opening of A/S

Bredebro Skofabrik

1965 105 shoe factories in

Denmark produce a total 9.1

million pairs of shoes

1974 Production of uppers in Brazil

1978 Uppers from India, Yugoslavia

and Thailand

1979 Finished shoes from Brazil

1984 New factory in Portugal

1988 Licensed production in the

former Czechoslovakia

1991 Start up of production in

Indonesia

1993 ECCO Thailand established

Highlights from 1963 to 2013

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Production history 2/2

1997 Extension of tannery in Indonesia

Uppers from Poland

1998 New factory in Slovakia

2000 ECCO opens a tannery in Thailand

2001 Acquisition of a large tannery in

Dongen, the Netherlands

2005 ECCO opens shoe factory in

Xiamen, China

2008 Opening of tannery in Xiamen,

China

2009 Closure of large scale production in

Portugal

2011 The factory in Thailand is flooded

2012 Reopening of large scale

production in Portugal

Highlights from 1963 to 2013

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Shoe production

Leather production

Portugal

Slovakia Holland

China (Xiamen)

Thailand

Indonesia

PRODUCTION FOOTPRINT 2013

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From cow to consumer

Cow hides Tannery Leather Stitching upper Injecting sole

Finishing Warehouse Shipping Distribution

Packing Transport Retail Consumer

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The global journey of a shoe

Design

Retail

Product development

Cows

Tanning

Uppers

Soles

Shipping Everyday challenges: • A-Z manufacturing vs. closeness to market

• Cost focus vs. customer responsiveness

• Carbon footprint

• Global mindset

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Cornerstones in going global

Production Retail Branding

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15,000+ places to meet the consumer

AMERICAS

ASIA / PACIFIC

EUROPE, MIDDLE EAST & AFRICA

87 861 147

Points of sale

ECCO Branded stores Other selling points

2011 2012 2011 2012

EMEA 803 861 >7,000 >7,000

EAP 113 147 >1,800 >2,000

EAM 86 87 >4,800 >5,000

Total 1,002 1,095 >13,600 > 14,000

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One Vision, One Brand, One Concept

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Shoes 91,6%

Accessories 3,1%

Leather 4,8%

Misc. 0,5%

A pure player…

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200.000

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1.200.000

1.000 EURO Historical development of revenue

42 years to reach a revenue of 4 billion DKK… … 7 years to double it!

ECCO doubled sales in 7 years

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1898

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ECCO employs almost 20,000 people worldwide...

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Top 10 markets Pursuing a healthy geographical diversification

USA

China

Russia

Germany

Sweden

Canada

Denmark

Netherlands

Norway

Hong Kong

2012

USA

Germany

UK

Sweden

Denmark

Netherlands

Russia

Norway

Canada

Finland

2002

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Where the shoes went Development in distribution of pairs sold

0%

10%

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100%

Others Denmark Other Scandinavia Other Western Europe (incl KRM) Eastern Europe Americas Asia

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Cornerstones in going global

Production Retail Branding

Developing the

ECCO Brand

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A broad product portfolio