Download pdf - Investor Day 2010 Presentation Final Print (2)

NU SKIN ENTERPRISESINVESTOR DAY November 18, 2010

1

SUSTAINING LONG-TERM GROWTH

2

• President and Chief Executive

Officer since 2003

• Chairman of the World Federation

of Direct Selling Associations

(WFDSA) from 2005 to 2008

• General Counsel 1996-2003;

Executive Vice President 2000-

2003.

• 20 years with Nu Skin

• Chief Financial Officer since 2002

• Played a key role in opening the

majority of Nu Skin „s international

markets from 1993 through 2002

• Instrumental in driving Nu Skin‟s

transformation efforts


• Chief Scientific Officer since 2006

• Former President and Chief

Scientific Officer of Pharmanex

• Received Ph.D. from the University

of London

• Has published numerous articles,

reviews, and books on

pharmaceutical research during

nearly 20 years in the health care

industry


• President, Global Sales and

Operations

• Previously served as executive

vice president of distributor

success and president of Nu Skin,

Europe

• Received M.B.A. from University

of Minnesota

• Worked 6 years at Pillsbury in

marketing management


NU SKIN’S MANAGEMENT TEAMTruman Hunt: President, Chief Executive Officer Ritch Wood: Chief Financial Officer

Joe Chang, Ph.D.: Chief Scientific Officer Dan Chard: President, Global Sales & Operations

4

Matt Dorny Scott Schwerdt Luke Yoo Melisa QuijanoAndrew Fan

General Counsel President Americas,

Europe and Pacific

President, North Asia

& South Korea

President,

Southeast Asia

President,

Greater China

13 yrs with Nu Skin 22 yrs with Nu Skin 13 yrs with Nu Skin 13 yrs with Nu Skin20 yrs with Nu Skin

NU SKIN’S MANAGEMENT TEAM

Our vision is to

become the world’s

leading direct

selling company…

…by generating

more income for

our distributors than

any other company.

5

66

7

2009 INVESTOR DAY

GUIDANCE

GUIDANCE

GROWTH RATEPROJECTED REVENUE

PROJECTED

GROWTH RATE

$1.37 - $1.40 B 5 - 6% $1.52 - $1.53 B ~15%

2010 ACCOUNTABILITY REPORT

Annual Revenue

$986

$1,138$1,181

$1,115$1,158

$1,248

$1,331

$1,530

$500

$700

$900

$1,100

$1,300

$1,500

2003 2004 2005 2006 2007 2008 2009 2010

8

2003 – 2010 REVENUE

projected

Millio

ns

US

D

2003 – 2010 REVENUE (EX-JAPAN)

$427

$559

$620$642

$715

$804

$869

$1,055

$0

$200

$400

$600

$800

$1,000

$1,200

2003 2004 2005 2006 2007 2008 2009 2010

Millio

ns

US

D

projected

9

2010 PROJECTED REGIONAL REVENUE

REGIONCONSTANT

CURRENCY GROWTH

REPORTED REVENUE

(USD)

North Asia +5.2% ~ $685

Greater China +23.6% ~ $265

Americas-2.8%

+3.9%*~ $255

S. Asia / Pacific +37.6% ~ $180

Europe +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

2003 - 2010 LOCAL CURRENCY REVENUE TREND

JAPAN

REVENUE TREND IN JAPAN (YOY)

11

• Stabilizing revenue

and executive

growth trends

• World’s 2nd largest

direct selling

market

• Reinforced

management team

-5.3%

-12.3%

-5.6%

-3.5%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2007 2008 2009 2010

84%

9%

7%

U.S.

Canada

Latin America

2010

AMERICASSALES

• Steady growth in challenging consumer environment

• 2009 spike reflects convention ageLOC launch

• Latin America holds potential for future growth

AMERICAS

2003 - 2010 USD REVENUE TREND

12

0

20000

40000

60000

80000

100000

120000

140000

0

2,000

4,000

6,000Executives

2003 - 2010 LOCAL CURRENCY REVENUE TREND

ACTIVE/EXECUTIVE DISTRIBUTOR GROWTH

• 6 consecutive years

of double-digit

revenue growth

• Growth despite

direct selling volatility

• Consistently

demonstrates

leadership in best

sales practices

SOUTH KOREA

13

GREATER CHINA

• Significant market

share in established

Chinese markets

Taiwan 6%

Hong Kong 25%

• High growth potential

in Mainland China

REVENUE TREND IN MAINLAND CHINA (YOY)


-6.0%

5.7%

18.2%

11.2%

23.7%

17.9%

29.5%

-10.0%

0.0%

10.0%

20.0%

30.0%

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

14

• 50% growth in

2010

• Strong growth in

all markets

• Significant growth

in both nutrition

and skin care

SOUTH ASIA / PACIFIC

4


16%

25%

32%

6%

12%

9% Singapore

Malaysia

Thailand

Philippines

Australia/New Zealand

Indonesia

2010

S. ASIA/ PACIFIC

SALES

15

• Fastest growing

region over the last

7 years

• 10% of global

revenue

• 5 of the top 10 direct

selling markets are

in Europe

EMEA


32%

25%

27%

16%West Europe

East Europe

North Europe

Russia, IS, SA

2010

EMEASALES

16


2009 INVESTOR

DAY GUIDANCE

GUIDANCE

GROWTH RATEPROJECTED MARGIN

PROJECTED

GROWTH RATE

12.0 - 12.5% +50 - 100 bps ~13.8 - 14.0% ~+280 bps

Operating Margin

17

11.9%*0.6% - 0.3%

1.8% 13.8 - 14.0%

0.0%

4.0%

8.0%

12.0%

16.0%

2009 GrossMargin

SellingExpense

G&A 2010

2010 OPERATING MARGIN FACTORS

* Excludes restructuring 18


2009 INVESTOR

DAY GUIDANCE

GUIDANCE

GROWTH RATEPROJECTED EPS

PROJECTED

GROWTH RATE

$1.60 - 1.70 +13 - 17% $2.04 - 2.07 +46 - 48%

Earnings Per Share

19

2010

Annual Revenue $1.53 Billion$1.33 Billion

Executive Distributors ~ 35,000~32,900

EPS $2.04 - $2.07$1.51*

2010: A RECORD YEAR

2009 2010

Operating Margin 13.8 - 14.0%11.9%*

* Excludes restructuring 20

WHY WE SUCCEEDED IN 2010

• Product innovation: ageLOC

• Galvanic Spa

• Transformation skin care system

• Vitality – ageLOC inside

• Growth in Active and Executive

distributors

• Improvements in key markets

• China, South Asia/Pacific

• Improved efficiency

21

EVERY DAY AT NU SKIN:

300,000 people take

LifePak

100,000 malnourished children are

fed a nutritious meal

1 new distributor reaches the $1 million

earned milestone every 6 days

$1.8 million in distributor

commissions generated

2,200 people sign up as

distributors and customers

50,000 people use

ageLOC Transformation

22

2011 GUIDANCE

23

EPS

Operating Margin

Revenue $1.60 - $1.63 B

5 - 7% growth

14.0 - 14.5%

~ 50 bps improvement

$2.25 - $2.35

10 - 15% growth

$5 BILLIONREVENUE

24

At a time when increasing numbers

are desperately seeking income,

our strategy is to provide a

• Focused

• Easily duplicated

• Innovative and compelling

ANTI-AGING BUSINESS

OPPORTUNITY

25

GROWTH STRATEGY

26

A New Class of Anti-Aging Products

ageLOC PLATFORM

MARKET TRENDS

27

• Nearly 65 million people worldwide participate in direct

selling

• $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 their

expectations

• 85% of sellers report a good, very good or excellent

experience with direct selling

• 74% of US adults have purchased products from a direct

seller

28

GLOBAL DIRECT SELLING TRENDS

Source: DSA and WFDSA

’08-’09 DIRECT SELLING MARKET TRENDS

29

TOP 5 GLOBAL DS

MARKETS

TOP 5 DS GROWTH

MARKETS (by dollars)

TOP 5 DS GROWTH

MARKETS (by % increase)

Source: WFDSA 2008 and 2009 estimated retail sales

1. United States $28 Billion

2. Japan $23 Billion

3. China $11 Billion

4. Brazil $8 Billion

5. South Korea $8 Billion

1. China +$2.2 Billion

2. Korea +$845 Million

3. India +$480 Million

4. Mexico+$425 Million

5. Peru+$400 Million

1. India +63%

2. Norway +57%

3. Denmark+52%

4. Peru +44%

5. Switzerland+38%

Direct selling growth in emerging markets

is driven by an appetite for opportunity

DEVELOPED MARKETS EMERGING MARKETS

Direct selling growth in developed markets

is driven by economic turbulence

DIRECT SALES GROWTH DRIVERS

30

31

EXPANDING ANTI-AGING MARKET

Global anti-aging projected to hit $200 B in 2010 with

double digit growth rates continuing for the next decade

$79.2 B

39%

$81.4 B

41%

$39.4 B

20% Appearance

Wellness

Weight/Fitness

Source: BCC Research

32

$200,000

$220,000

$240,000

$260,000

$280,000

$300,000

$320,000

$340,000

$360,000

2004 2005 2006 2007 2008 2009

An

nu

al S

ale

s in

US

D M

illio

ns

BEAUTY – PERSONAL CARE SALES

Source: Euromonitor

33

10.0%

5.8%

11.1%11.4%

0%

2%

4%

6%

8%

10%

12%

Face Care Body Care Make Up Sun Protection

2006-2013 CAGR

ANTI-AGING SKIN CARE

61%22%

9%

8%

Percent of Anti-aging Market

Face Care Body Care

Make Up Sun Protection

Source: Euromonitor

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 issues

34Source: BCC Research

6.7%

19.2%

-2.9%

7.3%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2009 2010

Nu Skin

Personal Care

Companies*

NU SKIN vs. PERSONAL CARE COMPANIESYTD Annual Revenue Growth

35*Colgate-Palmolive, Estee Lauder, L‟Oreal, Shiseido, Elizabeth Arden, and Alberto-Culver

6.7%

19.2%

0.3%

12.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2009 2010

Nu Skin

Public Direct

Sellers*

NU SKIN vs. PUBLIC DIRECT SELLERSYTD Annual Revenue Growth

* Avon, Natura, Oriflame, Herbalife, Tupperware, Usana, and Reliv 36

TRADITION OF INNOVATION

37

• 2005 American Business Award:

“Most Innovative Company”

• 2009 International Business

Award: “Most Innovative

Company in Asia”

• 2010 American Business Award:

“Most Innovative Company”

1999180° System

Original LifePak 1992

1986Nutriol Hair Care

Nu Skin Founded 1984“All of the good, none of the bad.”


38

2010ageLOC Vitality

2009ageLOC Transformation

2008Galvanic Spa Facial Gels with ageLOC

2006Galvanic Spa

2005LifePak Nano


2003BioPhotonic Scanner

39

CHANNEL INNOVATION

40

• Industry‟s most

generous payout plan

• Seamless

compensation plan

across all markets

• Strength in two distinct

brands

• Wealth Maximizer plan

VOLUME

•5% EEB•10% Exec. Bonus

•10% Gi Breakaways

DEPTH

•5% 6 levels

OR

NU SKIN INNOVATION CENTER

41

NU SKIN INNOVATION CENTER

42

ageLOC – JUST THE BEGINNING

3

1

2

4

5

6

9+

8

7

43


Continued success

through product

innovation

44

45

OUR COMPETITIVE ADVANTAGETarget the Sources of Aging

SIGNS & SYMPTOMS

After 20 years and

billions of dollars in

research…

human genome map

46

SEQUENCING THE HUMAN GENOME

47

ageLOC BREAKTHROUGH

• Old paradigm: Aging is

inevitable – there is

nothing you can do to

influence your inherited

genes

• New paradigm:

Expression of age-

related genes can be

influenced back to a

more youthful state

48

ageLOC AS A PRODUCT PLATFORM

Gene expression science (ageLOC)

provides an innovative anti-aging product

platform encompassing both personal

care and nutrition

AGING

Age-related

frailty, disability

and disease

Tissue damage

exceeds

tissue repair

Gene

expression

regulates the

aging process

Our exclusive access to information on the

ultimate sources of aging offers a whole new

way of looking at aging.

49

50

IDENTIFYage-related genes

RESETage-related genes

Proprietary technology

identifies multiple age-

related genes in different

tissues

Proprietary ingredient

blends to reset genes

to youthful activity

THE ageLOC APPROACH

51

IDENTIFYage-related genes

RESETage-related genes

THE ageLOC APPROACH

• More than 26 years of personal

care and nutritional R&D

• Broad-spectrum product

expertise

• Powerful R&D engine: over 75

scientists, 3 research centers,

and key academic collaborations

52

• Patented gene expression

profiling process to identify

aging genes

• More than 30 years of genetic

research expertise

• 300+ published peer-reviewed

papers on aging that support

ageLOC science

EXCLUSIVE SCIENTIFIC PARTNERSHIP

53

AGING SCIENCE EXPERTISE

• Co-Founder, LifeGenTechnologies

• Professor of Geriatrics & Gerontology, University of Wisconsin

Department of Medicine

• Author and co-author of more than 170 scientif ic publications

• Harmon Research Award, American Aging Association and the

Glenn Award, GSA

• Featured on 60 Minutes and CNN

• Co-Founder, LifeGenTechnologies

• Professor, Departments of Genetics & Medical genetics, University

of Wisconsin

• Published in several prestigious scientif ic journals such as Science

• Shorb Lecturer Award and the Burroughs Wellcome Young

Investigator Award

Richard Weindruch, Ph.D. Tomas A. Prolla, Ph.D.

54

SCIENTIFIC ADVISORS

• Kern and Marnie Wildenthal

President's Research Council

• Professor in Medical Science,

UT Southwestern Medical

Center

• Professor, Developmental

Biology, Stanford University

Medical Center Department of

Developmental Biology

• Professor, Molecular

Pharmacology, University of

Southern California School of

Pharmacy

M. Kuro-o, M.D., Ph.D. Stuart Kim, Ph.D. Lester Packer, Ph.D.

FIRST INNING: ageLOC GALVANIC

SPA & GELS

55

• 2006-07 began growth

acceleration

• 2008 improved gels with ageLOC

ingredients

• 2010 new body design and

electronics

Delivers 5x more active ingredients

to the skin

SECOND INNING: ageLOC

TRANSFORMATION SYSTEM

56

• Q4 2009 introduction

• 2010 global roll-out

• Complete anti-aging skin

care system

56

THIRD INNING: ageLOC INSIDE – VITALITY

• 2010 launch in U.S., Europe, and Japan

• Expands ageLOC platform to include

internal sources of aging

• Energy loss is one of the first perceived

signs of aging:

• Positioned as a LifePak companion

THREE DIMENSIONS OF VITALITY

PHYSICAL VIGOR

MENTAL ACUITY

SEXUAL HEALTH

57

58

THIRD INNING: ageLOC INSIDE – VITALITY

BRAIN (Vitality)

HEART (Vitality)

MUSCLE (Vitality)

40

50

60

70

80

90

100

110

120

1 2 3 4 5 6 7 8 9 10 11 12

Co

gn

itiv

e F

un

cti

on

Sc

ore

Vitality

Placebo

Week

59

PILOT CLINICAL STUDY OF VITALITY

* P-Value < 0.005 (Vitality vs. Placebo)

+20%

EFFECT OF VITALITY ON MUSCLE

GLYCOGEN STORAGE

60

Mu

sc

le g

lyc

og

en

Exercise

w/ VitalityDormant Exercise

2.2

2.0

1.8

1.6

1.4

1.2

1.0

+24%

61

PATENTED ALGORITHM TO ASSESS

GENE EXPRESSION

Low

Expression

High

Expression

Gene Expression Scale

Gene expression profile

YOUNG OLD

Proprietary

Genetic databank

YOUNG GENE

EXPRESSION

OLD GENE

EXPRESSION

RESET GENE

EXPRESSION

WITH VITALITY

Influencing genes

related to vitality

62

RESETTING GENES WITH VITALITY

Low

Expression

High

Expression

Gene Expression Scale

LIVER (Detoxification)

LUNGS (Detoxification)

63

BRAIN (Vitality)

HEART (Vitality)

MUSCLE (Vitality)

FOURTH INNING: 2011 GLOBAL

CONVENTION

64

ALPHA VITALITY

FOURTH INNING: 2011 GLOBAL

CONVENTION

BENEFITS OF ageLOC ALPHA

65

• Complements benefits of

Vitality

• Resets genes that control

detoxification

• Restores and purifies the

body

restage 2012-18Restaging strategically important Nu Skin and Pharmanex products

renew Galvanic Spa 2007

rejuvenate Transformation 2009

recharge Vitality 2010-11

restore Alpha 2011-12

regenerate Beta 2012-13

remodel Gamma 2013-14

Kappareverse 2014-15

3

1

2

4

5

6

9+

8

7

ageLOC: LONG-TERM GROWTH POTENTIAL

CO

MP

LE

TE

FU

TU

RE

66


67

Continued success

through effective

channel management

2010 SALES INITIATIVES

68

The Wealth Maximizer – Compensating leaders for

growth

Leadership Development – Improving the success of

our leaders

Economic Engine – Focusing on core business drivers

The Innovation Launch Strategy – Accelerating

revenue growth by leveraging innovation

ECONOMIC ENGINE STRATEGY

Focus all sales programs

and market activities on

core business drivers

69

Success Metrics (3 R‟s): • Recruiting

• Retention

• Rate of consumption/

retailing

RECRUITING RETENTIONRATE OF

CONSUMPTION

ACCELERATED REVENUE GROWTH

Active DistributorsRate of

Consumption

HOW WE MEASURE SUCCESS – 3 R’S

70

Distributor

Productivity

Duplication

RECRUITING

RETENTION

RATE OF

CONSUMPTION

Total Execs

HOW THE 3 R’S DRIVE SALES GROWTH

71

ACCELERATED REVENUE GROWTH

New ExecsActive

Distributors

GLOBAL BUSINESS PROFILE

72

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

YOY % Change in:

ConsumptionActivesSales

THE WEALTH MAXIMIZER STRATEGYCompensating Leaders For Growth

Manage compensation plan

to maximize the productivity

of our distributor force

Success Metrics:

• Percent of Executives at retention

level income

• Percent of Executives at 3,000

group sales

73

38.0%

47.0%

0%

10%

20%

30%

40%

50%

Before Wealth Maximizer

After Wealth Maximizer

WEALTH MAXIMIZER RESULTSPERCENT OF EXECUTIVES EARNING $450+

74

Chart showing

retention and different

income levels

Avg. new executive (6 Mo.) income and retention

Avg. new executive income – first 6 months

36.0%

45.0%

0%

10%

20%

30%

40%

50%

Before Wealth Maximizer

After Wealth Maximizer

WEALTH MAXIMIZER RESULTSIMPACT OF INCREASING GROUP

VOLUME QUALIFICATION TO 3,000

75

0%

2%

4%

6%

8%

10%

12%

14%

0% 10% 20% 30% 40% 50%

Pe

rce

nt i

ncre

ase

in re

ve

nu

e

Additional percent of

Executives at 3000 points

INNOVATION LAUNCH STRATEGYAccelerating Sales By Leveraging Innovation

76

Generate a high level of distributor

recruiting and customer acquisition

by consistently renewing our

business opportunity cycles

20000

30000

40000

50000

60000

70000

80000

90000

Jan-0

4

Mar-

04

May-0

4

Jul-04

Sep

-04

No

v-0

4

Jan-0

5

Mar-

05

May-0

5

Jul-05

Sep

-05

No

v-0

5

Jan-0

6

Mar-

06

May-0

6

Jul-06

Sep

-06

No

v-0

6

Jan-0

7

Mar-

07

May-0

7

Jul-07

Sep

-07

No

v-0

7

Jan-0

8

Mar-

08

May-0

8

Jul-08

Sep

-08

No

v-0

8

Jan-0

9

Mar-

09

May-0

9

Jul-09

Sep

-09

No

v-0

9

Jan-1

0

Mar-

10

May-1

0

Jul-10

KR TOV (divided by 200) KR PV Actives

SUSTAINING GROWTH - KOREA

77

Sales Actives

Pe

rce

nta

ge

gro

wth

g3

Estera

TRA

ageLOC

Transformation

78

ageLOC TRANSFORMATION TRIAL

0%

10%

20%

30%

40%

50%

60%

70%

80%

Q4 2009 Q1 2010 Q2 2010 Q3 2010

Percent of active distributors who

have tried ageLOC Transformation

79

ageLOC TRANSFORMATION REPEAT

PURCHASERS

0%

10%

20%

30%

40%

50%

60%

Q1 2010 Q2 2010 Q3 2010

Percent of distributors who have purchased

ageLOC Transformation more than once

Improve leadership growth

fundamentals by focusing on critical

activities, benchmarks and rewards

80

LEADERSHIP DEVELOPMENT STRATEGYImproving the Success of Our Leaders

81

Executive

Ruby

Blue Diamond

Team Elite

Executive

Ruby

Blue Diamond

Team Elite

ROADMAP TO SUCCESS

82

LEADERSHIP PIPELINE

• Positive improvements in: Leadership progression

$28 million revenue impact

Signups

Purchase

Sponsor

Qualifier

Executive

15%

improvement

13%

improvement

EXECUTIVE PERFORMANCE

83

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

12.00%

2001 2003 2005 2007 2009

Ruby and above total execs (Excluding Mainland China)

• Executives surpassed 35,000 in Q3 2010 (+13% YOY)

1. Programs are in place to drive sustainable

growth

2. We anticipate the Alpha introduction will result

in the biggest convention and product launch

in the company‟s history

3. Growing leadership base will drive successful

achievement of long-term revenue goals

CONCLUSION

84

RAYNE HO, ANGELA LIEU

• Team Elite qualified for

10 years

• Main focus is China,

South Asia

• 10 Million Dollar Circle

Members


Creating shareholder

value through continued

focus on driving

efficiency

86

GROWTH

Operating Margin 14.0 - 14.5% ~50 bps

Annual Revenue $1.60 - $1.63 B 5 - 7%

EPS $2.25 - $2.35 10 - 15%

2011 GUIDANCE SUMMARY

GUIDANCE

87

2011: REGIONAL CONSTANT CURRENCY

REVENUE GROWTH

Global Constant Currency Growth Expected Currency Benefit

4 - 6% ~1%

AMERICAS

+5 – 8%

EMEA

+12 – 15%GREATER

CHINA+ 2 – 5%

NORTH

ASIA+2 – 5%

SOUTH ASIA /

PACIFIC+7 – 10%

88

2011 PROJECTED CONSTANT CURRENCY

GROWTH & CURRENCY EFFECT

5-7%

3-5%4-6%

9-10%

0%

2%

4%

6%

8%

10%

12%

Q1 Q2 Q3 Q4

2011 Currency Assumptions

$1 USD ¥85.00 JPY

$1 USD ₩1,150 KRW

$1 USD €0.75 EUR

89

90

SUBSCRIPTION PROGRAM

54%

10%

20%

30%

40%

50%

60%

2003 2004 2005 2006 2007 2008 2009 2010

Auto-orders as a percent of revenue

2003 2010

REGION 2003 2010

Japan 57% 30%

Korea 6% 14%

Greater China 14% 18%

South Asia / Pacific 7% 12%

Americas 13% 17%

Europe 3% 10%

Japan

Korea

Greater China

South Asia / Pacific

Americas

Europe

REVENUE ALLOCATION

91

FOREIGN CURRENCY IMPACT

USD

RMB

HKD

25%

OTHERS

TWD

EUR

KRW

44%

JPY

31%

92

2007 – 2012 OPERATING MARGIN

7.8%

10.1%

11.9%

13.8 – 14.0%14.0 – 14.5%

14.5 – 15.0%

0.0%

4.0%

8.0%

12.0%

16.0%

2007* 2008* 2009* 2010 2011 2012

*Excludes restructuring and impairment of assets and other.

Projected ProjectedProjected

93

0.3%

0.8%

5.0%13.8 - 14.0%

7.8%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

FY 2007 Gross Margin Selling Expense G&A FY 2010

2007 – 2010 OPERATING MARGIN FACTORS

Projected

94

LEVERAGING REVENUE GROWTH

$1,157

$364$400

$1,530

$0

$400

$800

$1,200

$1,600

2007 Revenue 2007 G&A 2010 G&A 2010 Revenue

Millio

ns

US

D

ProjectedProjected

95

EFFECTIVE RESTRUCTURING PROCESS

$32

$17

$0

$12

$0 $0 $1

$38

$71

$127

$0

$20

$40

$60

$80

$100

$120

$140

2006 2007 2008 2009 2010

Millio

ns

US

D

Restructuring Charges

Operating Income Improvement over 2006 (ex-restructuring)

$237 million operating income

96

$61 million restructuring

2007 – 2011 GROSS MARGIN

81.9%81.7% 81.7%

82.2%82.0 – 82.3%

78.0%

79.0%

80.0%

81.0%

82.0%

83.0%

84.0%

85.0%

2007 2008 2009 2010 2011

ProjectedProjected

97

Duty rates4

Freight efficiencies – approximately 25% of COGS3

New product launches2

1 Exchange rates – foreign currency impact

GROSS MARGIN DETAIL

98

SUPPLY CHAIN INITIATIVES

Inventory flexibility4

Consumer price-point efficiency3

Gross margin improvement2

1 Supply chain security

5 Tax strategy

2007 – 2011 SELLING EXPENSES

42.9%

42.4%

41.7%

42.1%42.0 – 42.5%

36.0%

38.0%

40.0%

42.0%

44.0%

46.0%

2007 2008 2009 2010 2011

ProjectedProjected

100

2007 – 2011 G&A EXPENSE

31.4%

29.2%

28.0%

26.1%25.2 – 25.7%

15.0%

20.0%

25.0%

30.0%

2007 2008 2009 2010 2011

ProjectedProjected

101

Conventions4

Research and development3

2 Invest in high growth opportunities

• China, Eastern Europe, Southeast Asia

1 Leverage fixed costs

G&A EXPENSE DETAIL

2010 2011

Q2$3.0 m

G.C. / Korea

$1.0 m

Korea

Q4$5.0 m

USA / Japan

$7.0 mGlobal Convention

102

BUILDING ACQUISITION

2011 Impact:

• $33-35 million cash outlay

(anticipate borrowing to

cover cost)

• $4 million reduction in G&A

lease payment

• $2 million increase in

depreciation

• $600,000 in interest

expense

103

3 Customs audit – partial resolution by midyear

• Building acquisition adds $0.6 million

1Interest expense on debt

• Expected to be about $4.8 million

OTHER INCOME EXPENSE

104

Impact of foreign currency on debt

2• Assumes minimal impact due to forecasted yen at 85/dollar

• Assumes no impact in modeling of foreign currency fx on debt

INCOME TAX RATE

105

1Expected tax rate of 36.0 – 37.0% through 2011

• Potential completion of IRS audit with anticipated benefit of $2-7

million

2007 – 2011 EPS

$0.75

$1.02

$1.51

$2.04 – $2.07

$2.25 – $2.35

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2007* 2008 2009* 2010 2011

ProjectedProjected

*Excludes restructuring and impairment of assets and other. 106

2007 – 2010 CASH FLOW FROM

OPERATIONS

$49 m

$103 m

$134 m

$190 m

$-

$50

$100

$150

$200

2007 2008 2009 2010

Projected

107

2011 CASH FLOW MODELING

D&A $30 MM $35-40 MM

Stock Option Expense $10 MM $12-15 MM

Capital Expense $30-35 MM $45-50 MM

Debt Payments (Apr/Oct) $33 MM $22-32 MM

Dividend Payments $32 MM $35 MM

20112010

108

2004 – 2010 STOCK REPURCHASE

ACTIVITY

109

Outstanding shares repurchased per year~2%

Average share purchase price$19.62

Average shares purchased per year2.3 m

$46 m Average purchase amount per year

INCREASING DIVIDEND HISTORY

$0.20

$0.24

$0.28

$0.32

$0.36

$0.40

$0.42

$0.44

$0.46

$0.50

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

2001 2000 2003 2004 2005 2006 2007 2008 2009 2010

110

FINANCIAL SUMMARY

2011 will be another record year

10 – 15% EPS growth

Strong cash generation

Continued margin expansion

111

SUSTAINING GROWTH

• Favorable market trends

• Strong product innovation pipeline

• Proven ability to convert innovation to revenue

• Demonstrated commitment to operational efficiency

• Upside in emerging markets

112

$0.00

$0.50

$1.00

$1.50

$2.00

Q1

06

Q2

06

Q3

06

Q4

06

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

$0.00

$0.50

$1.00

$1.50

$2.00

Q1

06

Q2

06

Q3

06

Q4

06

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

MANAGEMENT INCENTIVE PLAN

Nu Skin EPS (ttm)

Initiated

Performance-based

Incentive Plan:

113

$0.00

$1.00

$2.00

$3.00

$4.00

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

13

Q1

14

Q2

14

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15

$0.00

$1.00

$2.00

$3.00

$4.00

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

13

Q1

14

Q2

14

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15

Initiated NEW

Performance-based

Incentive Plan

Expansion to

broader group of

managers

$4.00 EPS

by Q4 2015

MANAGEMENT INCENTIVE PLAN

Nu Skin EPS (ttm)

114

SUSTAINING GROWTH

• Favorable market trends

• Strong product innovation pipeline

• Proven ability to convert innovation to revenue

• Demonstrated commitment to operational efficiency

• Upside in emerging markets

• Aligned and incented management team

115

SUPPORT MATERIALS

DISTRIBUTOR COMPENSATION SUMMARY

117

2006 2007 2008 2009

Operating Margin 4.90% 6.10% 10.10% 11.1%

Percentage impact of restructuring 1.00% 1.70% 0% 0.8%

Operating Margin excluding restructuring charges 7.80% 7.60% 10.10% 11.9%

Earnings per share $0.47 $0.67 $1.02 $1.40

Impact of restructuring $0.28 $0.17 $0 $0.11

Earnings per share excluding restructuring charges $0.75 $0.84 $1.02 $1.51

This presentation contains non−GAAP financial measures, which management believe are useful to management and investors in evaluating, and comparing from period to period, results from ongoing operations in a more meaningful and consistent manner while also highlighting more meaningful trends in the results of operations. For purposes of Regulation G, a non−GAAP financi al measure is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most direc tlycomparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement ofcash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAPrefers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the following information provides a reconciliation of the non−GAAP financial measures to the most directly comparable GAAP financial measures.

Please note: This press release contains forward-looking statements within the meaning of Section 21E of the

Securities Exchange Act of 1934 that represent the company’s current expectations and beliefs. The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed herein. These risks and

uncertainties include, but are not limited to: (a) challenging economic conditions globally; (b) the risks of foreign currency fluctuations and the currency translation impact on our business associated with these

fluctuations; (c) uncertainty regarding the impact on our business of increased regulatory scrutiny of the direct selling industry in Japan and our efforts to increase distributor compliance efforts in this market;(d) an increase in complaints and general inquiries to consumer protection agencies in Japan regarding the activities of some

distributors and the associated risks to the company’s business if such increase results in further regulatory scrutiny; (e) regulatory risks associated with the company’s tools and products, which could inhibit the

company’s ability to market a tool or product in a market if it is determined to be a medical device in any market, if distributors make unauthorized claims that would cause such products to be classified as drugs, or if the company is unable to obtain necessary product registrations in a timely manner; (f) continued regulatory

scrutiny and investigations in Mainland China, which have from time to time in the past, and could in the future, negatively impact the company’s business, including the interruption of sales activities in stores, loss of

licenses, and the imposition of fines; (g) any failure of current or planned initiatives or products to generate interest among distributors and customers and generate sponsoring and selling activities on a sustained basis; (h) any failure of the implementation of business transformation initiatives to reduce overhead and drive

growth, and any negative impact of such initiatives on the company’s ability to effectively manage its operations; (i) adverse publicity related to the company’s business, products, industry or any legal actions or

complaints by distributors or others; (j) any prospective or retrospective increases in duties on our products imported into our markets outside of the United States and any adverse results of tax audits or unfavorable changes to tax laws in our various markets; and (k) continued competitive pressures in the company’s

markets. The company’s financial performance and the forward-looking statements contained herein are further qualified by a detailed discussion of associated risks set forth in the documents filed by the company

with the Securities and Exchange Commission. The forward-looking statements set forth the company’s beliefs as of the date of this release, and the company assumes no duty to update the forward-looking statements contained in this release to reflect any change except as required by law.