REEBOK INTERNATIONAL LIMITED

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REEBOK INTERNATIONAL LIMITED
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Presented By Eduardo Garza Lily Hsu Resa
Lawrence Travis Klecker
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Mission Statement

• Our purpose is to ignite a passion for winning,
  to do the extraordinary, and to capture the
  customers heart and mind.
• We make a difference
• To our Customers
• To our employees
• To our shareholders
• To our athletes
• And to the world in which we live

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REEBOK HISTORY

• 1890s
• Reebok is started by Joseph William Foster in
  England. The original mission of the company was
  to enhance performance in long-distance track
  events by improving equipment.
• 1958
• Two of the founders grandsons started a
  companion company that came to be known as
  Reebok, named for an African gazelle.
• 1979
• Reebok USA., Ltd was formed by Paul Fireman. The
  original marketing strategy was aimed at prestige
  and at high prices.

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REEBOK HISTORY Cont.

• 2002
• The newest line, RBK, was introduced this year
  which consisted of a collection of
  street-inspired footwear and apparel hook-ups
  designed for the young man and woman who demand
  and expect the style of their gear to reflect the
  attitude of their lives - cool and edgy,
  authentic and inspirational.
• 2005
• Reebok Brand introduced its comprehensive new
  advertising campaign, I Am What I Am. This
  campaign, which celebrates authenticity and
  individuality in sports and life, has been the
  cornerstone of Reeboks positioning and will flow
  through the marketing of each segment.

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BOARD OF DIRECTORS

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• Geoffrey Nunes
• Retired Senior Vice President and General
  CounselMillipore Corporation
• Dorothy Puhy
• Executive Vice President Chief Financial
  OfficerDana-Farber Cancer Institute
• Thomas M. Ryan
• Chairman of the Board, President, and Chief
  Executive OfficerCVS Corporation
• Barry Tatelman
• Chief Executive OfficerJordan's Furniture

• Paul B. Fireman
• Chairman of the Board and Chief Executive
  Officer
• Norman Axelrod
• Chairman of the Board andChief Executive
  OfficerLinens 'N Things, Inc.
• Paul R. Duncan
• Retired Executive Vice PresidentReebok
  International Ltd.
• Richard G. Lesser
• Senior Corporate Advisor and DirectorTJX
  Companies, Inc.
• 
  

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HOW THE BOARD CAN BE IMPROVED

• According to Reebok Board Governance, the current
  standing committees of the Board are Audit, Boar
  Affairs, Management Development and Compensation,
  and Executive.
• The Board presently has 8 members, which pursuant
  to the current by-laws may be expanded to 12
  members. After examining Reebok 8 members we came
  to the conclusion that there is not evidence that
  some of its members are related.
• We also found that this board is widely divers in
  terms of there professional experience. Even
  though most of them have strong managerial
  experience in the apparel sector some of them
  come from other type of industries like for
  example Mr. Fireman who before joining Reebok
  directed a manufacturer of medical devices

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OWNERSHIP INFORMATION
Reeboks 5/Insider Ownership is 11.51. It is
slightly higher then a desirable ratio. If an
inside owner were to suffer from death,
bankruptcy, or unfavorable circumstances this
could adversely affect the company.
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UMBRELLA OF PRODUCTS

• The Hockey Company
• The Hockey Company, which Reebok acquired in
  June 2004, is the worlds largest designer,
  manufacturer and marketer of hockey equipment and
  related apparel. The Hockey Companys CCM, JOFA
  and KOHO brands are among the most widely
  recognized brands in hockey.
• The Rockport Company
• Rockport designs, develops, produces, markets
  and distributes worldwide specially engineered
  comfort footwear under the Rockport brand for men
  and women. Rockports net sales increased to
  377.6 million in 2004 from approximately 372.0
  million in 2003.
• Greg Norman Collection
• Originally a golf apparel line, the Greg Norman
  Collection has grown its line of sportswear to
  include products such as woven, Play Dry
  outerwear and sweaters.
• RBK
• Reeboks Rbk product collection features
  footwear, apparel and accessories designed to
  appeal to young, fashion-oriented consumers.

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UMBRELLA OF PRODUCTS

• Reebok Performance
• Performance line includes products designed for
  basketball, running, fitness, football, baseball,
  soccer, tennis and other sports.
• Reebok Classic
• Classic products feature retro styling that
  reflects distinctive design elements from past
  Reebok products. During 2004 we continued to
  focus on print advertising for our Classic
  products
• Reebok Kids
• Reebok Kids footwear business is important to
  establishing a relationship between our Brand and
  young consumers who we can cultivate as Reebok
  customers as they grow into adulthood.

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MARKET COMPETITORS
NIKE

• PUMA

• TIMBERLAND

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SEGMENT REVENUE
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INDUSTRY RATIOS
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TTM Sales
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Financial Ratios
GOOD
POOR
ABOVE AVERAGE
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POOR
FAIR
POOR
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FAIR
POOR
FAIR
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ABOVE AVERAGE
FAIR
FAIR
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FAIR
AVERAGE
FAIR
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POOR
ABOVE AVERAGE
VERY GOOD
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Summary of Financial Ratios

• Growth Rates UNSATISFACTORY
• Price Ratios UNSATISFACTORY
• Profit Margins UNSATISFACTORY
• Financial Condition SATISFACTORY
• Investment Returns SATISFACTORY
• Management Efficiency SATISFACTORY
• Earnings Growth Rates UNSATISFACTORY

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Company Share Information
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Background Analysis
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Earnings Growth Rates
REEBOKS FORECAST
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FCFE
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Discounted Cash Flows
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Risk Analysis
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CAPM Model
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WACC
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Capital Structure
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Three years is a small time period to be able to
determine what model Reebok follows. Companies
are usually evaluated over a longer period time
like ten years.
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Market Efficiency
Good News- Company
NO FORM
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Market Efficiency
Good News- Industry
NO FORM
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Market Efficiency
Bad News- Company
NO FORM
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Strengths

• Earnings Growth Rates
• FCFE
• WACC
• Debt/Equity Ratio
• Financial Condition

• Investment Returns
• Management Efficiency
• History
• TTM Sales
• Beta ß-1.5513 for 2005

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Weaknesses

• Ownership
• Growth Rates
• Price Ratios
• Profit Margin
• HPR
• Ke (cost of equity)

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Analyst Opinion
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Conclusion

• Underpriced
• set it and forget it- Buy and hold

Reebok 5 year stock price forecast