ECCO & INTERNATIONALISERING
Michael Hauge Sørensen, Group COO, ECCO Sko A/S Ambassadør-arrangement – Hindsgavl Slot, 30. maj 2013
Cornerstones in going global
Production Retail Branding
2 First a quick look at ECCO From humble beginnings...
• ECCO was founded in 1963 in Bredebro • Karl Toosbuy and wife Birte produced ladies’ fashion shoes under the name “Venus” • The comfortable footwear concept was introduced in the late 1960ies • The ECCO Group head office is still located in Bredebro
4 ...to a leading global footwear company
The world’s 2nd largest producer of casual footwear
The 4th largest golf shoes brand
Top-5 producer of high quality leather to luxury brands
ECCO shoes are sold in 91 countries
5 ECCO BUSINESS BASICS 2012
Million DKK Net Revenue 9000 8061 8000 7089 7000 6111 • 19,500 employees of 50 nationalities 6000 5374 5041 5000 • 91 markets across 5 continents 4000 3000 2000 • 20.2 million pairs of shoes sold worldwide in 2012 1000 0 2008 2009 2010 2011 2012 • Revenue at EUR 1,083 million (up 14% Profit before tax and profit margin over 2011) Million DKK 1140 1200 1000 904 Profit before tax at EUR 153 million (up 746 • 800 631 26% over 2011) 600 460 400 13,9% 12,7% 14,1% 9,1% 10,3% Equity EUR 418 million – a solidity of 200 • 0 55.0% 2008 2009 2010 2011 2012
Profit before tax (PBT) PBT%
6 VISION to be the best shoe company in the World
7
How we make shoes
9 Scandinavian design
• It all begins at ECCO’s Design Centre in Tønder
• The essence of ECCO’s Scandinavian design philosophy is “form follows function” - simplicity, functionality, timeless elegance, appreciation of materials and craftsmanship
• The designs are always checked for lightness, softness, flexibility, comfort and fit
10 Product Development
• Bridges designers’ creativity with Production
• Shoemakers and engineers convert ideas into prototypes
• Providing the tanneries and shoe factories with detailed instructions on how to produce materials and shoes
11 Making leather
• Producing leather since 1986 • The ECCO Leather Group: The Netherlands, Indonesia, Thailand and China • Over 33% production is sold to non-ECCO companies • One of the five largest producers of quality hides (wet blue) in the world
12 Shoe production
• The ECCO factories - the key to the company’s success
• Factories combine the best of two worlds: Hand craft and automation where possible
• The world leader in direct injection technology
• Four shoe factories: Thailand, Indonesia, Slovakia and China
13 Cornerstones in going global
Production Retail Branding
14 Production history 1/2 Highlights from 1963 to 2013
1963 1st April – Opening of A/S Bredebro Skofabrik 1965 105 shoe factories in Denmark produce a total 9.1 million pairs of shoes 1974 Production of uppers in Brazil 1978 Uppers from India, Yugoslavia and Thailand 1979 Finished shoes from Brazil 1984 New factory in Portugal 1988 Licensed production in the former Czechoslovakia 1991 Start up of production in Indonesia 1993 ECCO Thailand established
15 Production history 2/2 Highlights from 1963 to 2013
1997 Extension of tannery in Indonesia Uppers from Poland 1998 New factory in Slovakia 2000 ECCO opens a tannery in Thailand 2001 Acquisition of a large tannery in Dongen, the Netherlands 2005 ECCO opens shoe factory in Xiamen, China 2008 Opening of tannery in Xiamen, China 2009 Closure of large scale production in Portugal 2011 The factory in Thailand is flooded 2012 Reopening of large scale production in Portugal
16
PRODUCTION FOOTPRINT 2013
Holland Slovakia
Portugal
China (Xiamen)
Thailand
Shoe production Indonesia Leather production
17 From cow to consumer
Cow hides Tannery Leather Stitching upper Injecting sole
Finishing Warehouse Shipping Distribution
Packing Transport Retail Consumer
18 The global journey of a shoe
Design
Retail Product development
Uppers Tanning
Soles
Shipping Everyday challenges: Cows • A-Z manufacturing vs. closeness to market • Cost focus vs. customer responsiveness • Carbon footprint • Global mindset
19 Cornerstones in going global
Production Retail Branding
20 15,000+ places to meet the consumer
AMERICAS EUROPE, MIDDLE EAST & AFRICA
87 861 ASIA / PACIFIC 147
Points of sale ECCO Branded stores Other selling points 2011 2012 2011 2012 EMEA 803 861 >7,000 >7,000 EAP 113 147 >1,800 >2,000 EAM 86 87 >4,800 >5,000 Total 1,002 1,095 >13,600 > 14,000
21 One Vision, One Brand, One Concept
22 A pure player…
Shoes 91,6%
Accessories 3,1% Leather 4,8% Misc. 0,5%
23 ECCO doubled sales in 7 years
1.000 EURO Historical development of revenue
1.200.000
1.000.000
800.000
600.000
400.000
200.000
-
42 years to reach a revenue of 4 billion DKK… … 7 years to double it!
24 ECCO employs almost 20,000 people worldwide...
20000 19.426
15000
10000
5000
1898
0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
25 Top 10 markets Pursuing a healthy geographical diversification
2002 2012 USA USA Germany China UK Russia Sweden Germany Denmark Sweden Netherlands Canada Russia Denmark Norway Netherlands Canada Norway Finland Hong Kong
26 Where the shoes went Development in distribution of pairs sold
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Others Denmark Other Scandinavia Other Western Europe (incl KRM) Eastern Europe Americas Asia
27 Cornerstones in going global
Production Retail Branding
28 Developing the ECCO Brand 30 31
33 34
A broad product portfolio
36