I N V E S T O R P R E S E N T A T I O N T H I R D Q U A R T E R
Forward-Looking Statement
Dorel Overview
• 3 major segments
• Juvenile products
(2013 revenue - $993 million)• Bicycles/recreational products
(2013 revenue - $919 million)• Home furnishings
(2013 revenue - $524 million)• $2.4 billion in sales annually
Third Quarters Ended September 30
Consolidated
(in thousands, other than EPS) 2014 2013
Total revenue $ 673,020 $ 607,298
Net income $ 19,480 $ 11,105
Juvenile Segment
Third Quarters Ended September 30
(in thousands) 2014 2013
Third Quarter Juvenile Highlights
• Year-over-year revenue increased 9.1%, operating profit grew 220.5%. Q3 2013 operating profit included a pre-tax charge of $8M related to a US car seat product liability case
• With the exception of Dorel Juvenile USA, operating profits in all juvenile divisions were impacted negatively by strength of USD
• Dorel Juvenile Europe was the most significant contributor to Q3 operating profit
• Intensive activity underway to integrate Lerado operations in Asia
Lerado Acquisition:
• On November 3, 2014 Dorel acquired juvenile business of HK-based Lerado Group for $120 million
• Provides Dorel with first company-owned factories in Asia, including 2.5 million sq. ft. of modern production, R&D and testing resources, three facilities in China, one in Taiwan
• Transition team in place. Senior industry veteran hired by Dorel to manage operations. Existing Lerado management expected to remain
• Acquisition expected to accelerate Dorel’s plans to grow in the Asian domestic market, opportunity thus far under
exploited
• Dorel issued extendible convertible unsecured subordinated debentures of $120 million to fund the purchase
A World Leader in Juvenile
• Global Brand presence with global, regional and local brands around the world
• Leading brands in multiple categories • Global leadership in Car Safety
• Extensive product development and local adaptation to fit consumers needs
Innovation - Dorel Juvenile USA
• Cosco heritage brand relaunches icon product and further extends car seat range
Cosco - Scenera NEXT
• Convertible Car Seat, Side Impact Protection • Able to fit 3 children in the back seat,
Innovation – Dorel Juvenile Europe
• Consolidate Dorel Juvenile Car seat
leadership in Europe thanks to new car seat regulation R129 (I-size ) enforcement
- I-Size: Enhanced Safety - Rearward facing until 15 months and lateral impact protection
- Maxi-Cosi leads the market and is the 1st brand to launch an i-size solution from new born to toddler
Dorel Juvenile : Accelerating Quinny’s Global
Brand Presence
• Quinny further builds global consumer brand presence
– Global Website launches – Social networks
• Core product line revamping
– Zapp , Buzz and Mood relaunch with global roll out in 2014
Tiny Love : Expanding Global Brand Footprint
• Leveraging Dorel Juvenile global distribution channels
• Tiny Love contributes to building profitable business opportunities in new developmental play category
• Launching further innovation in core categories • Tiny Love wins innovation award crib mobile at
Recreational/Leisure Segment
Third Quarters Ended September 30
(in thousands) 2014 2013
Total revenue $ 266,503 $ 231,591
Gross profit $ 62,052 $ 54,185
Third Quarter
Recreational/Leisure Highlights
Year-over-year revenue up 15.1%, operating profit increased 4.7%
Overseas markets in IBD channel, particularly Europe and Japan, as well as sales to the North American mass merchant distribution channels contributed to quarter and year-to-date organic growth
Despite overall weak economy in Brazil, Caloi contributed to operating profits after two consecutive quarters of losses
Bicycle sales in Brazil are starting to benefit from the successful introduction of Cannondale, GT and Schwinn which has led to gains in domestic market share. Caloi is poised for strong Q4
Recreational/Leisure Segment
Three distinct operating divisions
1) Cycling Sports Group (CSG)
• IBD Division
• Premium Brands
• Growing dealer network
• CSG sales growing rapidly outside
North America
• Innovation – continuing focus
Recreational/Leisure Segment
2) Pacific Cycle
• Mass merchants/sporting goods chains
• Bicycle parts/accessories
• Full service provider – bikes, parts and accessories,
branded apparel
Recreational/Leisure Segment
3) Apparel Footwear Group (AFG)
• Performance apparel division
incorporates strong SUGOI brand
• New branding opportunities include
Home Furnishings Segment
Third Quarters Ended September 30
(in thousands) 2014 2013
Third Quarter
Home Furnishings Highlights
• The majority of the segment’s divisions posted improved Q3 operating results, offset somewhat by lower results at
Ameriwood due principally to higher particle board prices. Operating expenses for the segment remained well-contained • Year-over-year revenue up 6.6%, operating profit decreased
6.3%
• Sales to drop ship vendor and on-line customers again
increased in the quarter and represent a growing percentage of overall revenue, partly offset by declines in sales to brick-and-mortar stores
Outlook
• We remain on-track for a much improved year. Thanks to improved earnings at all three of our major divisions, CSG, Pacific Cycle and Caloi, we fully expect to deliver much better
results for the fourth quarter versus last year. Both CSG and Pacific Cycle will build on 2014’s solid year-to-date gains while Caloi will benefit from the addition of the Cannondale, GT and Schwinn brands in the Brazil market
Recreational/Leisure
Juvenile
• The strength of US dollar against operating currencies in all other geographies had a material impact on Q3 and based on current levels, will impact Q4. Despite this and though Q4
results will be below last year’s, full year earnings are expected to exceed prior year in line with outlook issued at the end of Q2
• Excluded from this outlook is the impact of the costs associated with integrating the Lerado operations and transitioning supply to Dorel’s newly owned Asian-based facilities
Home Furnishings
Why Invest in Dorel
• A record of successfully integrated acquisitions
• A focus on Juvenile and bicycles where Dorel is a key player
• Strategically growing Juvenile and Recreational/Leisure in Latin America
• A portfolio of known, premium brands
• Product development capabilities that drive growth • Established customer relationships
• Strong annual dividend of $1.20 per share
• Consistent generator of cash flow to support acquisitions
Financial Performance – 5 Years
Growth Through Acquisitions
• 2003 Ampa France (Dorel Europe) • 2004 Pacific Cycle
• 2007 IGC Australia
• 2008 Cannondale/SUGOI • 2008 PTI Sports
Growth Through Acquisitions
• 2009 Dorel Brazil - 70% interest • 2009 Iron Horse Bicycles
• 2009 Gemini Bicycles (Australia) • 2009 Hot Wheels, Circle Bikes (UK)
Growth Through Acquisitions
• 2012 Best Brands Group SA (Panama) and Baby Universe SAS (Colombia) – 70% interest
• 2013 Caloi (Brazil) – 70% interest • 2014 Tiny Love Ltd.
• 2014 Right to sell Infanti brand in Brazilian market
Geographical Distribution of Total
Revenue
(by customer)2013 2012
56%
6% 24%
6% 8%
US Canada Europe Other Latin America
58% 6%
25%