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INVESTORINVESTORINVESTOR INVESTOR PRESENTATIONPRESENTATION

FOURTH QUART E RFOURTH QUART E RMa r c h 2 0 1 2Ma r c h 2 0 1 2

ForwardForward‐‐Looking StatementLooking Statement

Except for historical information provided herein, this presentation may containinformation and statements of a forward‐looking nature concerning the futureperformance of Dorel Industries Inc. These statements are based on suppositions andperformance of Dorel Industries Inc. These statements are based on suppositions anduncertainties as well as on management's best possible evaluation of future events. Thebusiness of the Company and these forward‐looking statements are subject to a numberof risks and uncertainties that could cause actual results to differ from expected results.Important factors which could cause such differences may include, without excludingImportant factors which could cause such differences may include, without excludingother considerations, increases in raw material costs, particularly for key input factorssuch as particle board and resins; increases in ocean freight container costs; thecontinued ability to develop product and support brand names; changes to theCompany’s effective income tax rate as a result of changes in the anticipated geographicCompany s effective income tax rate as a result of changes in the anticipated geographicmix of revenues; the impact of price pressures exerted by competitors, and settlementsfor product liability cases which exceed the Company’s insurance coverage limits. Adescription of the above mentioned items and certain additional risk factors arediscussed in the Company’s Annual MD&A and Annual Information Form, filed with thediscussed in the Company s Annual MD&A and Annual Information Form, filed with theCanadian securities regulatory authorities. The risk factors outlined in the previouslymentioned documents are specifically incorporated herein by reference. The Company’sbusiness, financial condition, or operating results could be materially adversely affectedif any of these risks and uncertainties were to materialize. Given these risks andif any of these risks and uncertainties were to materialize. Given these risks anduncertainties, investors should not place undue reliance on forward‐looking statementsas a prediction of actual results.Note: All figures are in US dollars. 2

At a GlanceAt a Glance

DIVISIONS PRODUCT RANGE OUR PREMIUM BRANDS

DOREL EUROPE Children’s car seatsDOREL EUROPEDOREL JUVENILE GROUP USADOREL DISTRIBUTION CANADAIGC DOREL PTY (AUSTRALIA)DOREL BRAZILDOREL CHILE

Children s car seatsStrollers High chairs Play yards Toddler bedsEarly learning/infanthealth/safety aidsS i / t ti ti it tDOREL CHILE

DOREL POLSKASwings/stationary activity centres

CYCLING SPORTS GROUP (CSG)PACIFIC CYCLE

Bicycles Performance apparelJogging strollers Swing setsPACIFIC CYCLE

APPAREL & FOOTWEAR GROUP(AFG)

Jogging strollers Swing sets Ride‐on toys

AMERIWOODCOSCO HOME & OFFICEDOREL ASIADOREL HOME PRODUCTS

Ready‐to‐assemble furnitureFolding chairs and tablesStep stools Step laddersFutons Bunk beds

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ALTRA FURNITURE Upholstered furniture

Fourth Quarters Ended December 30Fourth Quarters Ended December 30

Fourth Quarters Ended December 30

(in thousands of US$, other than EPS) 2011 2010T t l $ 561 608 $ 539 523Total revenue $ 561,608 $ 539,523Net income 27,362 25,947EPS (diluted) 0.85 0.79

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Juvenile AcquisitionJuvenile AcquisitionO N b 30 2011 h COn November 30, 2011 the Companysignificantly increased the presence of itsJuvenile segment in South America by acquiringJuvenile segment in South America by acquiringa 70% interest in Silfa Group, who own andoperate the popular Infanti brand in Chile,p p p f ,Bolivia, Peru and Argentina. The deal includes 52Baby Infanti retail stores, 40 in Chile, 12 in Peru.The transaction was accretive to Q4 2011earnings.

I J 2012 D l h d h f

New Dorel Technical Center for Child Safety

In January 2012, Dorel purchased the assets ofPoltrade, a Polish distributor and retailer. The2012 annual revenues are expected to be 7 5

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New Dorel Technical Center for Child Safety2012 annual revenues are expected to be 7.5million euros.

Fourth QuarterFourth QuarterJuvenile HighlightsJuvenile Highlights

• Revenue: increased 1.4% to $239.5 M

• Operating profit: $10.4 M vs $14.9 M

• Improved sales as retail environment began to p gstabilize

• European sales down approximately 5% in local p pp ycurrency; sales in southern Europe challenging

• Overall organic revenue decline of approximately


2%

• Dorel Chile contributed one month of earnings

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New Dorel Technical Center for Child Safetyand was accretive to earnings

Juvenile SegmentJuvenile Segment


(in thousands of US$) 2011 2010Total revenue $ 239,532 $ 236,204Gross profit 63,673 63,202Operating profit 10,390 14,926

New Dorel Technical Center for Child Safety7


A World Leader in JuvenileA World Leader in JuvenileInnovation in North AmericaInnovation in North America

New TechnologiesNew Technologies• Air Protect® ‐ side impact technology

• FlexTech™ Energy Management System –• FlexTech Energy Management System –internal truss design which absorbs and mitigates crash forcesg

• Exclusive agreement to research impact absorbing materials similar to those used for


grace car cockpit crash protection

• Tiny Fit™ System – removable insert providing

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New Dorel Technical Center for Child Safetybetter fit for smaller babies

A World Leader in JuvenileA World Leader in JuvenileLatest Development in Car Seat Safety

™

New Dorel Technical Center for Child SafetyMaxi‐Cosi Pria 70 Air

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New Dorel Technical Center for Child SafetyMaxi‐Cosi Pria 70 Air

A World Leader in JuvenileA World Leader in JuvenileDorel Europe• A major player – over $450 million in sales j p yannually

• Strong brands

• Traditionally sales made to Juvenile product chains, boutiques, independents

• Building mass merchant relationships; products successfully introduced in mid‐price point

f t


categories, eg. Safety 1st

• Maintaining market share in difficult economic i t

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New Dorel Technical Center for Child Safetyenvironment

Innovation Innovation ‐‐ EuropeEurope

MOODD ‐ The ultra modern testroller that automatically unfolds

EASY CLIP – The ultimate no‐leak bottle that closes in just

li !one clip!

• Opal the first car seat that can


• Opal ‐ the first car seat that can be either rear or front facing, yet does not require a change

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New Dorel Technical Center for Child Safetyyet does not require a change in belt routing

Fourth QuarterFourth Quarter//Recreational/Leisure HighlightsRecreational/Leisure Highlights

• Revenue: ‐1 7% to $202 4 M• Revenue: ‐1.7% to $202.4 M

• Operating profit: +9.1% to $11.6 M

• Some orders shifted from Q4 to Q3 2011• Some orders shifted from Q4 to Q3, 2011

• Cannondale SuperSix Evo Ultimate awarded top score in review by German trade magazine of bestscore in review by German trade magazine of best road bikes in the world over the past ten years

• The apparel division continues to make neededThe apparel division continues to make needed changes to reverse losses

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Recreational/Leisure SegmentRecreational/Leisure Segment



1313

Strategic and Comprehensive PortfolioStrategic and Comprehensive Portfolio

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Three distinct operating divisions

Cycling Sports Group (CSG)Cycling Sports Group (CSG)

• IBD Division

• Premi m Brands• Premium Brands

• Growing dealer network

CSG l i idl id• CSG sales growing rapidly outsideNorth America

• Focusing on breakthrough technology• Focusing on breakthrough technology

• Building Dorel’s bike business to # 1 position

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Recreational/Leisure SegmentRecreational/Leisure SegmentPacific Cycle

• Mass merchants/sporting goods chains/ p g g

• Bicycle parts/accessories

• Full service provider bikes parts and• Full service provider – bikes, parts and accessories, branded apparel

S l fl t• Sales flat year‐over‐year

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Apparel Footwear Group (AFG)

P f l di i i i t• Performance apparel division incorporates SUGOI, Cannondale, GT, Schwinn, IronHorseand Mongoose linesand Mongoose lines

• New management team in place

• Initiatives in place to return

to profitability

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Fourth QuarterFourth QuarterHome Furnishings HighlightsHome Furnishings Highlights

• Revenue: up 22.8% to $119.7 MRevenue: up 22.8% to $119.7 M

• Operating profit: up 52.5% to $8.5 M

• Improved US retail furniture marketImproved US retail furniture market

• Higher sales of imported furniture and strong dot com salesdot com sales

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Home Furnishings SegmentHome Furnishings SegmentFourth Quarters Ended December 30


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OutlookOutlook

• While working to resolve issues in the Juvenile segment we will also continue to focus on the long term bywe will also continue to focus on the long term by broadening our market through acquisitions and growing our internet business.

• We expect South America to become an important contributor to earnings with the establishment of Dorel Chile and improvements in Brazil. The cost environment isChile and improvements in Brazil. The cost environment is still a concern and the prices of resin and freight are being closely monitored. We therefore remain cautious about 20122012.

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OutlookOutlook

• We are confident that our strong bicycle business is sustainable and that the segment will continue to deliversustainable and that the segment will continue to deliver growth. We will continue to invest in R&D and will promote our brands through new innovative marketing h h h ldthroughout the world.

• In Home Furnishings, we are cautiously optimistic even though the year ended on a strong note and 2012 hasthough the year ended on a strong note and 2012 has started well.

• We generated strong cash flow in 2011, providing the f d k h h ll h l lfunds to make the investments that will help Dorel grow in the years ahead.

• Our long term vision will help us in 2012 and we

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Our long term vision will help us in 2012 and we anticipate improved earnings from our operations.

APPENDIXAPPENDIX

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Growth Through AcquisitionsGrowth Through Acquisitions

• 1988 Cosco Inc (DJG)

• 1990 Charleswood Corporation

• 1994 Maxi‐Miliaan B.V. (Maxi Cosi)

• 1998 Ameriwood Industries

• 2000 Safety 1st Inc.

• 2001 Quint B.V. (Quinny)

• 2003 Ampa France (Dorel Europe)

• 2004 Pacific Cycle

• 2007 IGC Australia (55% interest)

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Growth Through AcquisitionsGrowth Through Acquisitions

• 2008 Cannondale/SUGOI

• 2008 PTI Sports

• 2009 Baby Art

• 2009 Dorel Brazil (70% interest)

• 2009 Iron Horse Bicycles

• 2009 Gemini Bicycles (Australia)

• 2009 Hot Wheels, Circle Bikes (UK)( )

• 2011 Silfa Group (Chile, Peru, Bolivia, Argentina; 70% interest)

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• 2012 Poltrade (Poland)

Total Revenue by SegmentTotal Revenue by Segment

2011 2010

42%22%

45%22%

36% 33%

JUVENILE RECREATIONAL/LEISURE HOME FURNISHINGS

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Geographical Distribution of Total RevenueGeographical Distribution of Total Revenue(by customer)(by customer)(by customer)(by customer)

2011 2010

7% 7%

61%6%

26%7%

61%6%

26%7%

US CANADA EUROPE OTHER

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SustainabilitySustainability PhilosophyPhilosophy

• Active in sustainability on several fronts throughout all three segmentsthroughout all three segments

• By nature of large volume of units sold, Dorel’s eco conscious programs make an importanteco‐conscious programs make an important contribution by reducing their environmental impactp

• Despite goal of keeping prices to consumers low, Dorel intends to remain proactive in itslow, Dorel intends to remain proactive in its sustainability initiatives

• Strict policy in place to ensure sustainable

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Strict policy in place to ensure sustainable business practices of suppliers

SustainabilitySustainability InitiativesInitiatives• DHP: the first company supplying the mass market retail

segment with a futon made from 100% FSC certified wood

• Altra Furniture: uses Bamboo in some furniture;Smart Program ‐ 100% non‐virgin wood

• Ameriwood:• Ameriwood:

1. All saw dust, scrap, wood chips are recycled and returned to suppliers’ manufacturing processes

2. Over 500 tons of scrap metal is recycled annually

• LEED Gold Certified distribution facility reduces carbon foot‐print with two coast distribution systemprint with two coast distribution system

• Safety 1st Nature Next Collection features products made from eco‐conscious materials

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• Warehouses are equipped with light sensors to eliminate entire areas being lit needlessly

WhyWhy InvestInvest in in DorelDorel??

• A record of successful acquisitions

• A focus on Juvenile and Bikes where Dorel is a key• A focus on Juvenile and Bikes where Dorel is a keyplayer

• A portfolio of known, premium brandsA portfolio of known, premium brands

• Product development capabilities that drive growth

• Dedicated quality control/customer service by solidq y / yAsian presence

• Established customer relationships

• A Quarterly dividend

• Strong generator of cash flow to support

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acquisitions

dor ir q4'11 eng vf web · jogging strollers swing sets ... • cannondale supersixevoultimate...

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