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cover_final_EN_update2103.pdf 1 2017-03-21 4:20 PM Our Core Values We Act Like Entrepreneurs C M Y CM MY CY We Operate CMY Responsibly ® K We Believe in Our People FPO 1 Our company started with a fundamental mission to create value in everything we do We remain committed to driving continuous and sustainable growth by leveraging our vertical integration, operational scale, global reach, investments in technology and sound management of our shareholders’ capital to deliver superior value to all of our stakeholders. Our growing portfolio of brands provides the opportunity to deliver everyday family apparel to consumers globally, while never compromising on our belief that operating responsibly, taking care of our employees and integrating sustainable solutions into our business are key factors in our success and future growth. Making Apparel BetterTM Highlights Financial Operational Responsibility revenue units energy from produced renewable sources vs. 2010 levels record free capital reduction in cash flow expenditures greenhouse gas emissions intensity vs. 2010 levels returned to integrated water intensity shareholders acquisitions reduction *2015 calendar year Table of Contents 3 Message from the Chairman 13 Manufacturing – The Gildan Way 6 Message from the President and CEO 15 Growing Family of Brands 9 Financial Highlights 18 2016 Report to Shareholders 11 Conversation with our Leaders All amounts in this report are in $U.S. 3 Message from the Chairman To our shareholders, the acquisitions of Alstyle and Peds, followed by the American Apparel® On behalf of the Board, it is my brand in early 2017. These key initiatives pleasure to present our 2016 have reinforced the Company’s long Annual Report. This past year was term competitive position. At the same distinguished by significant changes time we have remained focused on in the world and challenging market key governance areas including the conditions, particularly in the retail launch of a new Code of Ethics and the sector. Against this backdrop, Gildan Company’s first Diversity and Inclusion continued to leverage its vertical Policy, both of which articulate the integration, expanded its operational Company’s commitment to creating base and remained steadfastly focused and fostering an ethical and inclusive on its long-term growth drivers. workplace. As a result, the Company delivered solid performance, executed on its Recognized leadership significant strategic objectives and For the fourth consecutive year, the returned capital to shareholders. Company was included in the Dow Jones Sustainability World Index (DJSI Making Apparel Better™ World Index), the benchmark for global Gildan was founded on a vision that leaders in economic, environmental owning its factories, investing in and social responsibility. We were the technology and pursuing continuous only North American company in the improvements was the best way to Textiles, Apparel and Luxury Goods operate and to make better apparel. industry group listed in the DJSI World Over time Gildan has stayed true Index once again. to those beliefs and the Company Gildan also received a Distintivo ESR “As one of the world’s largest manufac- 2016 award, presented by the Mexican Center for Philanthropy (Cemefi) turers of apparel and socks, with control and the Alliance for Corporate Social over almost the entire production process, Responsibility (Aliarse). This award is we understand firsthand that operating given to companies in Latin America that are considered leaders in their responsibly and integrating sustainable corporate social responsibility (CSR) solutions drives our financial success and efforts. enables our future growth.” Genuine shareholder engagement We understand that shareholders value is now one of the world’s leading communication and transparency. manufacturers of basic apparel and Once again demonstrating Gildan’s socks. leadership, we have put into place a Shareholder Engagement Policy During 2016, Gildan invested in its founded on the belief that constructive operations, brands and people with and meaningful dialogue between the completion of the ramp up of U.S.- members of the Board of Directors based yarn-spinning operations and and the Company’s shareholders 4 can provide valuable insights on • 19% reduction in waste sent to 2 strategy, corporate governance landfills and the Board’s oversight role, as well as a clearer understanding of While we can most certainly be proud the views or concerns of investors. of what has been accomplished to date we remain committed to pursuing Genuine ResponsibilityTM further reduction of our environmental As one of the world’s largest impacts. manufacturers of apparel and socks, Value creation inclusion in the with control over almost the entire Gildan launched a new mission Dow Jones Sustainability production process, we understand World Index firsthand that operating responsibly statement in 2016: and integrating sustainable solutions drives our financial success and enables Create Value In Everything We Do our future growth. It connects the Company’s founding In 2016, we published our 12th Corporate principles with our current position as Citizenship update, which highlighted a diversified manufacturing company our results across several key metrics. with a growing portfolio of brands that 1 delivers value to all of our stakeholders. recycling or This recent update highlights the repurposing of following results: total waste1 We strive to create value for customers • 34% reduction in greenhouse gas through our products; for communities emissions intensity2 by acting responsibly; for shareholders • 51% of the Company’s 2015 by driving sustainable and profitable total energy needs met through growth; for employees by empowering renewable sources them to achieve success and for the • 14% reduction of energy consumption per kg of environment by endlessly pursuing production2 continuous improvements to reduce • 17% decrease in water our impact on future generations. It’s consumption per kg of production, our belief that if we stay true to our 1 a savings of approximately 3.85M The 2016 Genuine Responsibility report mission each and every day, we can featured data pertaining to the 2015 m3 of water2 calendar year. continue to achieve remarkable results. • 89% recycling or repurposing of 2 from 2010 levels. total waste 5 The year ahead at our next Annual Shareholders As we look forward, we expect Meeting. Patrik Frisk and Shirley the world will continue to undergo Cunningham’s biographies are significant change, and that successful included in the Information Circular companies will need to be nimble, for this meeting and we are very adaptable and well-positioned to much looking forward to their succeed. The entrepreneurial spirit contributions based on their past that lies at the core of Gildan’s DNA, business experience. and is fostered under Glenn’s strong leadership, remains a critical factor On behalf of the Board, I would like in the success of the Company and to thank Glenn, the members of the fuels the confidence the Board has in Gildan management team and the Gildan’s strong prospects for success. more than 48,000 Gildan employees worldwide for their dedication to We are confident that the Company’s serving the needs of our customers, unrelenting drive towards operational for operating responsibly and for their excellence and commitment to commitment to delivering sustainable operating responsibly will continue to value to all our stakeholders. deliver outstanding value to all of our stakeholders. Most importantly, we I would also like to thank you, our have confidence that the employees shareholders, for your continued of Gildan, who are the heart and soul support and the confidence you of the Company, are working together place in us. We are proud to work for with a shared belief in our mission. you and look forward to a promising future. We are pleased to introduce two new strong candidates who have accepted Sincerely, to be nominated to the Board of Directors, and will be submitted to the Company’s shareholders for election William D. Anderson 6 Message from the President and CEO To our shareholders, the channels of distribution for the Peds® and MediPeds® brands and by extending these brands into Gildan’s other I am very proud of what we have achieved in 2016. product categories. Despite fairly challenging market conditions and the anticipated headwinds that we had projected, we stayed In a transaction that closed in early February 2017, we focused on our growth drivers and executed against acquired the American Apparel® brand, a leading premium our key priorities. We generated consolidated sales of brand in the fashion basics category in the printwear approximately $2.6 billion and delivered earnings of $1.47 channel. This iconic brand rounds out our Printwear per share and adjusted earnings of $1.51 per share. offering extremely well, positioned alongside Gildan® and Alstyle® in basic and performance apparel, Comfort We made significant progress this year on all of our Colors® in vintage fashion and anvil® in affordable fashion strategic initiatives, positioning us very well to continue basics. to deliver profitable and responsible growth and value to our shareholders. The Company generated record free In our Printwear business, we continued to expand our cash flow of $398 million for the full year and executed penetration into key markets, driven by strong growth in on all of its capital allocation priorities while returning the fashion basics and performance product categories approximately $470 million to shareholders through the and double-digit volume growth in international markets. payment of dividends and share repurchases. We now offer a broader variety of printwear apparel to our customers—with leading brands in the basics, premium Growing portfolio of brands fashion, performance wear and affordable fashion basics During the course of the year, we successfully completed categories. Through these timely and targeted actions, two strategic acquisitions, leveraging our cash I believe we have successfully positioned ourselves to generating ability and strong balance sheet. Alstyle was deliver long-term growth and value for our shareholders.