football market includes apparel designed for use on the pitch
TRANSCRIPT
WELCOME TO WEMBLEYWELCOME TO WEMBLEYUmbro plc, Analyst Presentation19th June 2007 Umbro plc, Analyst Presentation19th June 2007
Objectives
Strategy update
Focus on Enhancing Image and Global Reach
Showcase Wembley and Umbro’s association
Agenda
Strategy update Steve Makin Leverage Authenticity Martin ProtheroEnhance Image Colin Henry / Phil
FelloneMaximise Global Reach Steve Makin
Stadium Tour
Strategy Update
Steve MakinCEO
Mission
Inspire & Excite the World of Football
Brand Positioning
The AuthenticFootball Brand
Group Objectives
• To be at least the number 3 football brand in every market in which we operate
• To grow the branded business by at least 10% p.a.
• 80% of Group TWE represented by international markets
Group Strategy:
LEVERAGE AUTHENTICITY
ENHANCEIMAGE
MAXIMISEGLOBAL REACH
• International Icons
• Performance innovation
• Priority markets
• English Premier League Focus
• Connecting with consumers
• Global sourcing
• No 1 in Grass Roots
• Retail experience
Summary: well positioned for future growth…
• Strong sponsorship platform for increased global exposure
• Enhancing image through product development, consumer communication and retail experience
• Targeted International growth strategy
• Aligning the business behind the growth opportunities
Leverage Authenticity
Martin ProtheroSVP Football
Context: Authenticity
• Global brand exposure– English Premier League– teams / clubs– iconic players
• Performance credentials
• Participation at all levels gives credibility
• Contract longevity
2007/08 Barclays Premiership
The FA UMBRO FIVES‘The FA Cup of small sided football’…
• ‘Best in Class competition
• Largest in the UK
• 5,500 teams, 40,000 players
• Men / Women, open age
• Local / regional events
• Final at Wembley
• Headlined by John Terry
• International reach for 2008
Summary: Authenticity
• Best ever English Premier League sponsorship programme– important for global exposure
• Grass roots focus– 11-a-side– small sided football
• Longevity of contracts provides strong sponsorship platform for global exposure
• Umbro DNA
Enhance Image
Colin HenrySVP Global Product and Marketing
Context: Enhance Image…
• Brands need to be innovative and technology lead to cut through and stand out from the ‘generalists’
• 80% of sportswear purchased is not worn for the sport for which it was designed
• It will be product inspired by football and performance that takes Umbro to the ‘lifestyle’ consumer
• Communication with our target consumer must move away from traditional media
77% recognition
59% Authentic Football
72% identified UMBRO as a British brand
Central Product Line
Global consumer trends
• Broadband penetration is on the increase
• 33% of UK adults indicated that they watched less television since they started using the internet
• 77% of UK 18–24s and 87% of China 18–24s download music videos from the internet
• 43% of UK 18–24s and 83% of China 18-24s use file sharing communities online
Retail experience: International
Region Dec ’05 Dec ’06 May ’07
Europe 214 258 304
North America 7 9 9
Latin America 87 83 89
Greater China 592 769 1051
Asia - other 372 341 340
Total 1,272 1,460 1,793The above totals include concept stores / standalone stores (SAS) / shop in shops (SIS)
Retail experience - International
• Internationally Umbro continues to make good progress in expanding its shop-in-shop and stand-alone store presence
Region Flagship SAS SIS Total
Europe 4 28 272 304
North America 0 0 9 9
Latin America 0 7 82 89
Greater China 1 251 799 1,051
Asia – other 2 13 325 340
Total 7 299 1,487 1,793
Fixture and format quality continue to improve…Fixture and format quality continue to improve…
Summary: Enhance Image
• Targeted product ranges– performance, innovation, quality– lifestyle thru performance
• Communication through non-traditional media
• Increased focus on quality of merchandising– good progress in expanding retail presence
internationally
• Improved brand positioning
Phil Fellone
UK Managing Director
Enhancing Umbro’s Image in the UK
• Product
• Distribution Channels
• Retail Experience
Product
• Broader collection of branded ranges available
• Opportunity to segment across customers/retail channels
A/W 2007 Key Performance Packages
Performance Product Matrix
SX ULTRA IS POSITIONED TO PROVIDE ASPIRATIONAL PERFORMANCE FOOTBALL PRODUCT
ULTRA
A/W 2007
PERFORMANCE
PERFORMANCE WITH CASUAL EDGE
BRANDED CASUALS
A/W 2007
Diamond Pro
Sala 5
37o
Women’s
Beach
Speciali
Essentials
• Umbro to feature in AW Directory and 80 retail stores
• Xmas Directory with Evo X – all genders
• Spring 2008 – sports category
Umbro News
Retail Experience
JJB Wigan Store
England Sales + 10% v Last Year
NEXT
Summary
• 2 key performance packages – SX & Diamond Pro
• A broader collection of branded ranges
• Segmenting the ranges across key retailers and distribution channels
• Continue focus on technical/performance credentials supported by soccer specialty stores
• Enhanced retail experience – 400 ‘Football by Umbro’ areas across Sportsworld, JJB & strategic
stores
• Raising Umbro’s price positioning
Maximise Global Reach
Steve MakinCEO
Context: Maximise global reach…
• The global football market is estimated at $5bn within a $100bn global sporting goods market
• Growth of around 5% p.a.
• Highly concentrated – 80% driven by 10 markets
• Umbro operates in >100 markets through a network of 45 licensees
• Historically, little differentiation in service given to licensees
• Product emphasis – ‘Performance first’
Market share of Football 2006% of sales
Market share of Sportswear 2006% of sales
Sportswear Market Overview, 2006
£2.4 - 2.5bn
£45 - 50bn
Umbro8%
Puma5%
Other20%
Nike32%
Adidas - Reebok
35%
Nike18%
Adidas - Reebok
14%Other63%
Puma4%
Umbro1%
Forecast sportswear growth of 3% to 2010
8
Global football share…
Football market includes apparel designed for use on the pitch, football boots and football equipment.
Forecast football growth of 6% to 2010
Sportswear Football
Our stated objective is to be at least the #3 football brand in every market in which we operate…
• We have a significant growth opportunity in markets where we are ranked 4th or below
57
8
20
7
1st 2nd 3rd 4th -6th 6th+
Management will focus on 7 Priority Markets…
SUBSIDIARIES
UK
USA
JOINT VENTURES
China
France
LICENSEES
Russia
Italy
Brazil
Providing central support for:
• Strategic direction
• Product design and development
• Marketing support
Developing retail and building out product range are core themes to be addressed…
Build presence in organised
retail
Build out product range
Nurture independent
retail
Develop own-network
retail
Greater sponsorship
activity
France
Italy
Russia
China
USA
Greater China
• 4th largest football market in the world. Likely to be the largest by 2010
• Predominantly lifestyle market today, opportunity for performance participation
• Local product development to meet specific market needs
• Retail rollout is the key to success via the following channels• current network of 110 distributors• owned and operated stores (primarily flagship stores)
• Retail store count projected to increase from 1,050 today to 3,000 by end of 2011
Russia
• 9th largest football market with expected growth of 15% p.a
• Capturing share in Moscow is critical to any brands success
• Umbro has a significant number of sports marketing assets
• A key route to market is own retail presence, which is also an important channel for both awareness and distribution coverage
• Plan to expand the number of stand alone retail stores from 11 today to 50 by end of 2011
• Sport multiples are increasing their share, Umbro currently under-represented
France
• 7th largest football market in the world with mid single digit growth
• Relatively consolidated market
• Under represented in performance product
• Branded Footwear opportunity
• Need to increase participation in grass roots football to strengthen brand authenticity
• Well represented in the majority of national retail accounts
Outside of Priority Markets…
• Selecting the right licensees
• Developing a winning formula– Sponsorship– Performance product– National Accounts
• Providing central product range and marketing tools
Investing in Licensees…
• The main rationale should be to enable stronger sustainable growth in markets
• We have made good progress– China 40%– France 49%– Discussions ongoing with other licensees
Summary: An important transition for Umbro…
ToFrom
Equal focus on all countries Focus on Priority Markets
Entrepreneurial trading of brand in market
Investing to build brand position in market
Inconsistent brand position and range in markets
Consistent representation of brand and product
Devolved licence model Partner with Priority Markets – keeping local know how in place
Summary: well positioned for future growth…
• Strong sponsorship platform for increased global exposure
• Enhancing image thru product development, consumer communication and retail experience
• Targeted International growth strategy
• Aligning the business behind the growth opportunities
2007: Key dates…
TRADING UPDATE
4th July
INTERIM RESULTS
6th September