Investor Day 2010 Presentation Final Print (2)

  • Published on
    22-May-2015

  • View
    1.097

  • Download
    3

Embed Size (px)

DESCRIPTION

Nu Skin 2.0 - ageLOC Technology

Transcript

  • 1. NU SKIN ENTERPRISESINVESTOR DAY November 18, 2010 1

2. SUSTAINING LONG-TERM GROWTH2 3. NU SKINS MANAGEMENT TEAMTruman Hunt:President, Chief Executive OfficerRitch Wood: Chief Financial Officer President and Chief Executive Chief Financial Officer since 2002Officer since 2003 Played a key role in opening the Chairman of the World Federationmajority of Nu Skin s internationalof Direct Selling Associationsmarkets from 1993 through 2002(WFDSA) from 2005 to 2008 Instrumental in driving Nu Skins General Counsel 1996-2003;transformation effortsExecutive Vice President 2000- 20 years with Nu Skin2003. 20 years with Nu SkinJoe Chang, Ph.D.: Chief Scientific OfficerDan Chard:President, Global Sales & Operations Chief Scientific Officer since 2006 President, Global Sales and Former President and ChiefOperationsScientific Officer of Pharmanex Previously served as executive Received Ph.D. from the Universityvice president of distributorof London success and president of Nu Skin,Europe Has published numerous articles,reviews, and books on Received M.B.A. from Universitypharmaceutical research duringof Minnesotanearly 20 years in the health care Worked 6 years at Pillsbury inindustrymarketing management 13 years with Nu Skin 12 years with Nu Skin 4. NU SKINS MANAGEMENT TEAMMatt DornyScott Schwerdt Luke YooAndrew Fan Melisa QuijanoGeneral Counsel President Americas, President, North AsiaPresident,President,Europe and Pacific & South KoreaGreater ChinaSoutheast Asia13 yrs with Nu Skin 22 yrs with Nu Skin13 yrs with Nu Skin20 yrs with Nu Skin 13 yrs with Nu Skin4 5. Our vision is tobecome the worlds leading direct selling company by generatingmore income forour distributors thanany other company.5 6. 6 7. 2010 ACCOUNTABILITY REPORTAnnual Revenue2009 INVESTOR DAY GUIDANCE PROJECTEDPROJECTED REVENUEGUIDANCEGROWTH RATE GROWTH RATE$1.37 - $1.40 B 5 - 6%$1.52 - $1.53 B ~15%7 8. 2003 2010 REVENUE $1,500 $1,530 $1,300 $1,331 $1,248Millions USD$1,181$1,158 $1,100$1,138 $1,115$986$900$700$5002003 2004 2005 2006 2007 2008 2009 2010 projected 8 9. 2003 2010 REVENUE (EX-JAPAN) $1,200 $1,000 $1,055$869Millions USD$800 $804$715$600 $642$620 $559$400$427$200$02003 2004 2005 2006 2007 2008 2009 2010 projected 9 10. 2010 PROJECTED REGIONAL REVENUECONSTANTREPORTED REVENUE REGION CURRENCY GROWTH (USD) North Asia+5.2% ~ $685Greater China +23.6% ~ $265 -2.8%Americas ~ $255 +3.9%* S. Asia / Pacific+37.6% ~ $180Europe+14.1% ~ $150 Overall+10.4% ~ $1.53 B* United States, excluding $11 MM in sales from non -U.S. distributors purchased at global convention in 2009 10 11. JAPAN2003 - 2010 LOCAL CURRENCY REVENUE TREND Stabilizing revenueand executivegrowth trends REVENUE TREND IN JAPAN (YOY) Worlds 2nd largest 0.0%direct selling-2.0%market-4.0%-3.5%-6.0% -5.3%-5.6%-8.0% Reinforced-10.0%management team -12.0%-14.0% -12.3%20072008 2009 201011 12. AMERICAS 2003 - 2010 USD REVENUE TREND Steady growth inchallengingconsumerenvironment 7% 9% 2009 spike reflectsU.S.convention ageLOC 2010launchAMERICAS Canada SALES Latin America holdsLatin Americapotential for future 84%growth 12 13. SOUTH KOREA 2003 - 2010 LOCAL CURRENCY REVENUE TREND 6 consecutive yearsof double-digitrevenue growthACTIVE/EXECUTIVE DISTRIBUTOR GROWTH Growth despitedirect selling6,000 140000 Executivesvolatility1200004,000 10000080000 Consistently600002,000demonstrates4000020000leadership in best 00sales practices 13 14. GREATER CHINA2003 - 2010 USD REVENUE TREND Significant marketshare in establishedChinese marketsREVENUE TREND IN MAINLAND CHINA (YOY) Taiwan 6% 29.5%30.0% 23.7% Hong Kong 25%20.0% 18.2% 17.9% 11.2%10.0%5.7% High growth potential 0.0%in Mainland China-10.0% -6.0% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 14 15. SOUTH ASIA / PACIFIC2003 - 2010 USD REVENUE TREND 50% growth in2010 Strong growth in9% 16% Singaporeall markets 12%Malaysia2010 Thailand Significant growth 6% S. ASIA/PACIFIC 4 25% Philippines SALESin both nutritionAustralia/New Zealandand skin care 32%Indonesia 15 16. EMEA 2003 - 2010 USD REVENUE TREND Fastest growingregion over the last7 years 16% 10% of global32% West Europerevenue 2010 East Europe EMEANorth Europe 5 of the top 10 direct 27% SALES Russia, IS, SAselling markets arein Europe25%16 17. 2010 ACCOUNTABILITY REPORTOperating Margin2009 INVESTOR GUIDANCEPROJECTEDPROJECTED MARGINDAY GUIDANCEGROWTH RATEGROWTH RATE12.0 - 12.5% +50 - 100 bps~13.8 - 14.0%~+280 bps 17 18. 2010 OPERATING MARGIN FACTORS 16.0% 1.8% 13.8 - 14.0%0.6%- 0.3% 12.0%11.9%* 8.0% 4.0% 0.0% 2009Gross Selling G&A 2010 Margin Expense* Excludes restructuring 18 19. 2010 ACCOUNTABILITY REPORTEarnings Per Share2009 INVESTOR GUIDANCE PROJECTEDPROJECTED EPSDAY GUIDANCEGROWTH RATE GROWTH RATE$1.60 - 1.70+13 - 17% $2.04 - 2.07+46 - 48% 19 20. 2010: A RECORD YEAR 20092010 2010ExecutiveDistributors ~32,900 ~ 35,000 AnnualRevenue $1.33 Billion $1.53 BillionOperatingMargin11.9%* 13.8 - 14.0%EPS $1.51* $2.04 - $2.07* Excludes restructuring 20 21. WHY WE SUCCEEDED IN 2010 Product innovation: ageLOC Galvanic Spa Transformation skin care system Vitality ageLOC inside Growth in Active and Executivedistributors Improvements in key markets China, South Asia/Pacific Improved efficiency 21 22. EVERY DAY AT NU SKIN: 300,000 people take 2,200 people sign up as LifePak distributors and customers $1.8 million in distributor commissions generated100,000 malnourished children arefed a nutritious meal 50,000 people use 1 new distributor reaches the $1 million ageLOC Transformation earned milestone every 6 days22 23. 2011 GUIDANCERevenue $1.60 - $1.63 B5 - 7% growthOperatingMargin14.0 - 14.5%~ 50 bps improvement EPS$2.25 - $2.3510 - 15% growth 23 24. $5 BILLION REVENUE 24 25. GROWTH STRATEGYAt a time when increasing numbersare desperately seeking income,our strategy is to provide a Focused Easily duplicated Innovative and compellingANTI-AGING BUSINESS OPPORTUNITY25 26. ageLOC PLATFORMA New Class of Anti-Aging Products 26 27. MARKET TRENDS27 28. GLOBAL DIRECT SELLING TRENDS Nearly 65 million people worldwide participate in directselling $114 billion in sales worldwide CAGR of more than 7% from 1998-2008 16 markets generate over $1 billion in sales 80% of sellers say direct selling meets or exceeds theirexpectations 85% of sellers report a good, very good or excellentexperience with direct selling 74% of US adults have purchased products from a directsellerSource: DSA and WFDSA28 29. 08-09 DIRECT SELLING MARKET TRENDS TOP 5 GLOBAL DSTOP 5 DS GROWTH TOP 5 DS GROWTHMARKETSMARKETS (by dollars) MARKETS (by % increase)1. United States1. China1. India $28 Billion+$2.2 Billion+63%2. Japan2. Korea2. Norway $23 Billion+$845 Million+57%3. China3. India3. Denmark $11 Billion+$480 Million+52%4. Brazil 4. Mexico 4. Peru $8 Billion +$425 Million+44%5. South Korea5. Peru 5. Switzerland $8 Billion +$400 Million+38%Source: WFDSA 2008 and 2009 estimated retail sales29 30. DIRECT SALES GROWTH DRIVERSDEVELOPED MARKETSEMERGING MARKETSDirect selling growth in developed markets Direct selling growth in emerging marketsis driven by economic turbulence is driven by an appetite for opportunity 30 31. EXPANDING ANTI-AGING MARKETGlobal anti-aging projected to hit $200 B in 2010 withdouble digit growth rates continuing for the next decade $39.4 B20% Appearance$79.2 B 39%Wellness$81.4 B Weight/Fitness 41%Source: BCC Research 31 32. BEAUTY PERSONAL CARE SALES $360,000 $340,000 $320,000Annual Sales in USD Millions $300,000 $280,000 $260,000 $240,000 $220,000 $200,0002004 2005 2006 2007 2008 2009Source: Euromonitor 32 33. ANTI-AGING SKIN CARE12% Percent of11.4% 11.1%Anti-aging Market10% 10.0%8%8%9%6%5.8% 22%4%61%2%0%Face CareBody Care Face CareBody Care Make Up Sun ProtectionMake UpSun Protection2006-2013 CAGRSource: Euromonitor 33 34. ANTI-AGING NUTRITION Dietary supplements growing at a global rate of 7% Growth is projected at nearly 50% from 2009-2015 By 2015 market should be nearly $20B Consumers embrace both inner and outer anti-aging treatments Consumers are trending towards self-care for health issuesSource: BCC Research 34 35. NU SKIN vs. PERSONAL CARE COMPANIESYTD Annual Revenue Growth25.0% Nu Skin20.0% 19.2% Personal Care Companies*15.0%10.0%7.3%6.7% 5.0% 0.0%-2.9% -5.0% 20092010*Colgate-Palmolive, Estee Lauder, LOreal, Shiseido, Elizabeth Arden, and Alberto-Culver 35 36. NU SKIN vs. PUBLIC DIRECT SELLERSYTD Annual Revenue Growth25.0% Nu Skin20.0% 19.2% Public Direct Sellers*15.0% 12.0%10.0%6.7% 5.0%0.3% 0.0% 2009 2010* Avon, Natura, Oriflame, Herbalife, Tupperware, Usana, and Reliv36 37. TRADITION OF INNOVATION 2005 American Business Award: Most Innovative Company 2009 International Business Award: Most Innovative Company in Asia 2010 American Business Award: Most Innovative Company 37 38. TRADITION OF INNOVATION 180 System 1999Original LifePak 1992Nutriol Hair Care1986 Nu Skin Founded 1984 All of the good, none of the bad.38 39. TRADITION OF INNOVATIONageLOC Vitality 2010ageLOC Transformation 2009Galvanic Spa Facial Gelswith ageLOC 2008Galvanic Spa2006LifePak Nano2005BioPhotonic Scanner 2003 39 40. CHANNEL INNOVATION Industrys mostgenerous payout plan Seamlesscompensation planacross all markets Strength in two distinctbrands Wealth Maximizer planORVOLUMEDEPTH 5% EEB 5% 6 levels 10% Exec. Bonus 10% Gi Breakaways40 41. NU SKIN INNOVATION CENTER41 42. NU SKIN INNOVATION CENTER42 43. ageLOC JUST THE BEGINNING123456789+43 44. SUSTAINING LONG-TERM GROWTHContinued successthrough productinnovation44 45. OUR COMPETITIVE ADVANTAGETarget the Sources of Aging SIGNS & SYMPTOMS45 46. SEQUENCING THE HUMAN GENOMEAfter 20 years andbillions of dollars inresearchhuman genome map46 47. ageLOC BREAKTHROUGH Old paradigm: Aging isinevitable there isnothing you can do toinfluence your inheritedgenes New paradigm:Expression of age-related genes can beinfluenced back to amore youthful state 47 48. ageLOC AS A PRODUCT PLATFORM Gene expression science (ageLOC) provides an innovative anti-aging productplatform encompassing both personalcare and nutrition 48 49. AGINGGene Tissue damageAge-related expression exceedsfrailty, disabilityregulates thetissue repair and diseaseaging process Our exclusive access to information on theultimate sources of aging offers a whole newway of looking at aging.49 50. THE ageLOC APPROACHIDENTIFY RESET age-related genesage-related genesProprietary technology Proprietary ingredientidentifies multiple age- blends to reset genesrelated genes in different to youthful activitytissues50 51. THE ageLOC APPROACHIDENTIFY RESET age-related genesage-related genes51 52. EXCLUSIVE SCIENTIFIC PARTNERSHIP Patented gene expression More than 26 years of personalprofiling process to identify care and nutritional R&Daging genes Broad-spectrum product More than 30 years of genetic expertiseresearch expertise Powerful R&D engine: over 75 300+ published peer-reviewedscientists, 3 research centers,papers on aging that supportand key academic collaborationsageLOC science 52 53. AGING SCIENCE EXPERTISERichard Weindruch, Ph.D.Tomas A. Prolla, Ph.D. Co-Founder, Lif eGenTechnologies Co-Founder, Lif eGenTechnologies Prof essor of Geriatrics & Gerontology, University of Wisconsin Prof essor, Departments of Genetics & Medical genetics, UniversityDepartment of Medicineof Wisconsin Author and co-author of more than 170 scientif ic publications Published in several prestigious scientif ic journals such as Science Harmon Research Award, American Aging Association and the Shorb Lecturer Award and the Burroughs Wellcome YoungGlenn Award, GSAInvestigator Award Featured on 60 Minutes and CNN53 54. SCIENTIFIC ADVISORSM. Kuro-o, M.D., Ph.D.Stuart Kim, Ph.D.Lester Packer, Ph.D. Professor, Developmental Professor, Molecular Kern and Marnie WildenthalBiology, Stanford University Pharmacology, University ofPresidents Research CouncilMedical Center Department of Southern California School of Professor in Medical Science,Developmental BiologyPharmacyUT Southwestern MedicalCenter 54 55. FIRST INNING: ageLOC GALVANICSPA & GELS 2006-07 began growth acceleration 2008 improved gels with ageLOC ingredients 2010 new body design and electronics Delivers 5x more active ingredientsto the skin55 56. SECOND INNING: ageLOCTRANSFORMATION SYSTEM Q4 2009 introduction 2010 global roll-out Complete anti-aging skin care system56 56 57. THIRD INNING: ageLOC INSIDE VITALITY 2010 launch in U.S., Europe, and Japan Expands ageLOC platform to includeinternal sources of aging Energy loss is one of the first perceivedsigns of aging: THREE DIMENSIONS OF VITALITY PHYSICAL VIGOR MENTAL ACUITY SEXUAL HEALTH Positioned as a LifePak companion57 58. THIRD INNING: ageLOC INSIDE VITALITYBRAIN (Vitality)HEART (Vitality)MUSCLE (Vitality)58 59. PILOT CLINICAL STUDY OF VITALITY 120 110+20% 100Cognitive Function Score 90 80 70 60Vitality 50Placebo 40 1 2 3 45 6 789 10 1112 Week * P-Value < 0.005 (Vitality vs. Placebo)59 60. EFFECT OF VITALITY ON MUSCLEGLYCOGEN STORAGE2.22.01.8Muscle glycogen+24%1.61.41.21.0Dormant Exercise Exercise w/ Vitality 60 61. PATENTED ALGORITHM TO ASSESSGENE EXPRESSIONYOUNGOLD Proprietary Genetic databankGene expression profileGene Expression Scale LowHighExpressionExpression 61 62. RESETTING GENES WITH VITALITY RESET GENE YOUNG GENEOLD GENEEXPRESSION EXPRESSION EXPRESSION WITH VITALITY Influencing genes related to vitality Gene Expression Scale LowHighExpressionExpression 62 63. FOURTH INNING: 2011 GLOBALCONVENTIONBRAIN (Vitality) LUNGS (Detoxification) HEART (Vitality) LIVER (Detoxification)MUSCLE (Vitality)63 64. FOURTH INNING: 2011 GLOBALCONVENTIONALPHA VITALITY 64 65. BENEFITS OF ageLOC ALPHA Complements benefits ofVitality Resets genes that controldetoxification Restores and purifies thebody65 66. ageLOC: LONG-TERM GROWTH POTENTIAL1 renewGalvanic Spa COMPLETE 20072 rejuvenate Transformation 20093 rechargeVitality2010-114 restore Alpha 2011-125regenerate Beta2012-13 FUTURE6remodelGamma 2013-147reverseKappa 2014-158 restage Restaging strategically 2012-18important Nu Skin and9+Pharmanex products66 67. SUSTAINING LONG-TERM GROWTHContinued successthrough effectivechannel management67 68. 2010 SALES INITIATIVESEconomic Engine Focusing on core business driversThe Wealth Maximizer Compensating leaders forgrowthThe Innovation Launch Strategy Acceleratingrevenue growth by leveraging innovationLeadership Development Improving the success ofour leaders68 69. ECONOMIC ENGINE STRATEGY Focus all sales programs and market activities on core business drivers Success Metrics (3 Rs): Recruiting Retention Rate of consumption/ retailing69 70. HOW WE MEASURE SUCCESS 3 RS ACCELERATED REVENUE GROWTH Rate of Active Distributors ConsumptionRATE OFRECRUITING RETENTIONCONSUMPTION70 71. HOW THE 3 RS DRIVE SALES GROWTH ACCELERATED REVENUE GROWTH RECRUITINGDistributor ActiveProductivi...