SAF Consultants Analysis

CANADA GOOSE HOLDINGS INC.

Presented by:

Gestri Hali
Alice Song
Suki Chen
Sylvia Zhang
Nick MacPherson
 : Key Activities

Manufacturing premier quality winter outerwear

Business Model

Source: Canada Goose Canada

Business Model: Key Resources

1 Premium and long-lasting fabrics and finishing

2 Sustainable and ethical sourcing of raw materials (e.g. fur and down)

3 Multiple domestic and international and production facilities/subcontractors

4 Comprehensive traceability programs for fur

5 Financing resources

6 Selected suppliers
Business Model: Value Proposition

Proudly made in Uncompromised

Canada craftsmanship

Source: Canada Goose Canada

High quality, long lasting Experienced senior

products management

Source: Canada Goose Canada Source: Canada Goose Canada

 Business Model: Customer Segments
People working in the cold

Outdoor enthusiasts

Source: Canada Goose Canada

Business Model: Channels

Direct to Customer (DTC)

28.50%

71.50%
Wholesale
Business Model: Costs
1 High raw material cost

Suppliers who
Traceability
Premium fabrics adhere to strictest
program for fur
and finishing animal treatment
and supply chain
standards

2 Leases 3 Operational Costs

Exchange rates
Labour costs
Supply chain interruptions
Government regulations
Business Model: Revenue
DTC
28.50%

Wholesale
71.50%

25%

Gross 43%
Gross Profit
Profit 57%

75%
 Revenue by Segment
450

400
CAGR = 23%
350

300

Financial Analysis
250

200

150

100

50

0
FY2015 FY2016 FY2017
Wholesale DTC
 Revenue by Geography
Canada US Rest of World

450
400
350
300
250
200
150
100
50
0
FY2015 FY2016 FY2017

Canada Revenue United States Revenue Rest of World Revenue

180 140 140
160
120 120
140
120 100 100
100 80 80
80 60 60
60
40 40
40
20 20 20
0 0 0
FY2015 FY2016 FY2017 FY2015 FY2016 FY2017 FY2015 FY2016 FY2017
 Gross Profit Adjusted Net Income

FY2015 FY2016 FY2017 FY2015 FY2016 FY2017

Cash Flow 1 Strong Growth

2 Steady Growth

3 Consistent Profits

FY2015 FY2016 FY2017

Ratio Analysis

Ratio 2016 2017 Industry

Current Ratio 3.10 2.54x 1.60x High
Quick Ratio 0.47 0.29x 1.40x Inventory
An increase in
DTC can bring
Gross Profit Margins 50% 47% 24.50% Inventory
margins
produced
higher
Inventory Turnover 1.57x 2.10x based
Highon
projections
inventory +
ROA 8% 6% 6.60% increase in
Good
PPE
ROE 19% 15% 12.90% Retained
Earningsled
Expansion
Interest Coverage Ratio 5.12 4.07x 5.50x to higher
High earnings
interest paid
EBIT Margin 28% 19% 5.30% due to good
margins
 : Risks
1. Suppliers
Ability to fulfil orders
Limited number of suppliers
Quality control
Order by order basis transactions
Supplier relationship
Risks & Opportunities
2. Nature of product
Animal cruelty Public Image

Supplier reputation is crucial

Government Fines
Laws and regulation

Transparency is key Lawsuits

2. Nature of product (Continued)

Revenue by Quarter
300

250

200

150

100

50

0
Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

1. Seasonal Sales
2. Inventory in hand
3. Poor performance in one quarter could affect
overall yearly performance
4. Room for improvement
Risks & Opportunities: Key Opportunity
Expand Product Lines
Provide products that are
relevant to more
geographic regions
70%

1. Improve public image

2. Enhance value proposition

Source: Wikimedia Commons

Strong margins and

Interest Coverage: In-house
push towards DTC
4.07x manufacturing
sales
 Q2 2018 172
Q3 2018 266
Projections
Q4 2018 52 Revenue growth would be concentrated
Q1 2019 30 in Q1 and Q4, where current product
Q2 2019 173 lines are not as relevant to customers
Q3 2019 267 due to the reduced seasonality

10% 20% 30% 40% 50% 60% 70%

Q4 2019 70 76 82 89 95 101 108
Q1 2020 57 62 68 73 78 83 89
Q2 2020 256 280 303 326 349 373 396
Q3 2020 374 408 442 476 510 544 578

Increased market share Increased DTC sales

Increased margins Increased ROE

Thank you for your time

Questions?
Appendix 1 (Investment Risks Continued)

• Dependence on Brand Image

• Dependence on Retail Partners
• Dependence on the Continued Service of Senior Management
• Changing Customer Preferences
• Rapid Industry Changes
• Expansion in New Product Categories
• Highly Concentrated in One Single Category
• Downturn in the Economy
• Highly Competitive Market
• Challenging Operation Management during Rapid Growth
• Unexpectable Challenges within Expansion of DTC channel
• Significant Indebtedness
• Difficulty in Forecasting Demands for Our Products
• Protection of Trademarks and Other Intellectual Property Rights
• Imitations of Competitors
• Labour-related Matters
• Reliance on Information Technology Systems
• Warranty Problems
 Appendix 2 (Management and Governance)
JOHN BLACK LEE TURLINGTON RICK WOOD PENNY BROOK
Chief Financial Officer Chief Product Officer Chief Commercial Officer Chief Marketing Officer
5 years at Canada Goose 2 years at Canada Goose Started in November 2017 5 years at Canada Goose
Results-focused with strong Globally recognized for Expert brand builder with 20+ Global marketing expert
negotiation skills and a track 25+years of leadership years in global consumer with20 years’
record of improving roles at companies apparel and retail industry, experience across
performance at leading including Nike, serving in leadership roles at luxury, fashion and
Canadian companies Patagonia, The North companies including VF consumer goods
including Photoenergy, OLG Face and Fila Corporation and The North industries at companies
and Trimark Sportswear Face including Mulberry,
SCOTT CAMERON PAT SHERLOCK ANA MIHALJEVIC JACOB PAT KARA MACKILLOP
Group Clarks and Philips
EVP, e-Commerce, SVP, Global Wholesale SVP, Planning and Sales SVP, Information SVP, Human Resources
Stores and Strategy 5 years at Canada Goose Operations Technology 3 years at Canada Goose
2 years at Canada Goose Two decades of sales 3 years at Canada Goose 5 years at Canada Goose 15+ years of
8+ years at McKinsey management Sales and planning 15+ years experience with high
& Co. focused on experience in sporting expert with 10+ years transforming IT growth companies and
luxury and apparel goods and packaged in the apparel industry operations at top consumer brands
retail brands and goods industries in working with iconic companies including including Indigo Books
worked with Canada Canada, including brands including OnX, Momentum & Music and Red Bull
Goose for 2+ years New Balance and Ralph Lauren, Marc Advanced Solutions
CARRIE BAKER InBev JOHN MORAN Jacobs and Jones
SPENCER ORRand Trimble DAVID FORREST
SVP, Chief of Staff Apparel
SVP, Manufacturing and Group Navigation
SVP, Merchandising and Product SVP, General Counsel
6 years at Canada Goose Supply Chain Strategy 4 years at Canada Goose
15+ years of experience 3 years at Canada Goose 9 years at Canada Goose 11+ years of experience
leading communications 25+ years of experience in Recognized expert in product working as General
strategy and public affairs manufacturing, operations design and merchandising Counsel and Corporate
for top consumer brands and sales, holding senior strategy with 12+ years of Secretary of Thomas
and Fortune 500 companies, leadership roles including experience. Launched award- Cook North America and
including 12 years at a North Chief Operating Officer at winning HyBridge Lite Jacket practicing law at Osler,
American communications North American apparel Hoskin & Harcourt LLP
agency companies
 Appendix 3 (Flagship Store Locations)

TORONTO NEW YORK CHICAGO

3401 Dufferin Street, Unit 101 Wooster Street 800 North Michigan Avenue
#501 New York, NY 10012 Chicago, IL 60611
Toronto, ON M6A 2T9 845-709-8342 312-767-0544
416-789-5002 soho@canadagoose.com Nmichiganave@canadagoos
yorkdale@canadagoose.c e.com
om
LONDON BOSTON CALGARY
244 Regent Street 800 Boylston St 6455 Macleod Trail SW
London, UK W1B 3BR Boston, MA 02199 Calgary, AB T2H 0K8
44 02077349398 617-982-0320 587-355-8058
regentstreet@canada prudential@canadagoose. chinook@canadagoose.com
goose.com com

TOKYO
2-22-16, Jingumae
Shibuya-Ku, Tokyo 150-
0001
 Appendix 4 (E-commerce-led DTC Rollout)

E-COMMERCE RETAIL
Broadest assortment of our product offering Gathering place for fans around the world
Available anytime Personalized and immersive experiences

Canada United States France United Kingdom Toronto, Yorkdale New York City, SoHo
Aug. 2014 Sep. 2015 Sep. 2016 Sep. 2016 Oct. 2016 Nov. 2016

LAUNCHED IN FY2018 OPENED IN FY2018

Ireland Belgium Netherland Chicago, Magnificent Mile London, Regent Street
Jun. 2017 Jun. 2017 Jun. 2017 Oct. 2017 Nov. 2017

Luxemburg Sweden Germany Boston, Prudential Center Calgary, Chinook Certre

Jul. 2017 Aug. 2017 Sep. 2017 Nov. 2017 Nov. 2017

Austria Tokyo, Sendagaya

Sep. 2017 Nov. 2017

$0 to $197MM in less than four years (38.0% of LTM 12/31/2017 sales)

 Appendix 5 (International Peers)

Company Name Ctry Market Cap. BETA Year-to-Date

(mUSD) 1-Year Price Change
Canada Goose Holding Inc. CAN 1471 1.95 +25.9%

International Peers Median 0.60 +10.4%

Hermes International SCA FRA 74227 0.65 +36.2%

Mavi Giyim Sanayi ve Ticaret TUR 479 N/A -20.7%

A.S.
Sou Yu Te Group Co., Ltd CHN 2011 0.69 -25.1%

JNBY Design LTD CYM 1333 0.56 +115.8%

V.F. Corp. ISR 32235 0.16 +10.4%

 Appendix 6: Horizontal & Vertical Analysis
Income Statement
Horizontal Analysis Vertical Analysis
FY2015 FY2016 FY2017 FY2015 FY2016 FY2017
Revenue 100% 133% 185% Revenue 100% 100% 100%
Cost Of Goods Sold 100% 114% 151% Cost Of Goods Sold 58% 50% 47%
Gross Profit 100% 159% 232% Gross Profit 42% 50% 53%
Selling General & Admin Exp. 100% 157% 224% Selling General & Admin Exp. 27% 32% 33%
Depreciation & Amort. 100% 174% 252% Depreciation & Amort. 1% 2% 2%
Other Operating Exp., Total 100% 158% 225% Other Operating Exp., Total 28% 34% 35%
Operating Income 100% 162% 246% Operating Income 14% 16% 18%
Interest Expense 100% 111% 165% Interest Expense -3% -3% -3%
Net Interest Exp. 100% 111% 165% Net Interest Exp. -3% -3% -3%
EBT Excl. Unusual Items 100% 181% 276% EBT Excl. Unusual Items 10% 14% 15%
EBT Incl. Unusual Items 100% 172% 160% EBT Incl. Unusual Items 9% 11% 8%
Income Tax Expense 100% 138% 189% Income Tax Expense 2% 2% 2%
Earnings from Cont. Ops. 100% 184% 150% Earnings from Cont. Ops. 7% 9% 5%
Net Income to Company 100% 184% 150% Net Income to Company 7% 9% 5%
Net Income 100% 184% 150% Net Income 7% 9% 5%
 Appendix 7: Horizontal & Vertical Analysis
Balance Sheet
Horizontal Analysis Verrtical
Cash And Equivalents 100% 122% 164% Cash And Equivalents 2% 2% 3%
Total Cash & ST Investments 100% 122% 164% Total Cash & ST Investments 2% 2% 3%
Accounts Receivable 100% 116% 62% Accounts Receivable 5% 5% 2%
Total Receivables 100% 116% 92% Total Receivables 5% 5% 3%
Inventory 100% 171% 180% Inventory 25% 34% 33%
Other Current Assets 100% 284% 371% Other Current Assets 1% 3% 4%
Total Current Assets 100% 165% 174% Total Current Assets 34% 44% 43%
Gross Property, Plant & Equipment 100% 201% 316% Gross Property, Plant & Equipment 5% 8% 12%
Accumulated Depreciation 100% 250% 525% Accumulated Depreciation -1% -1% -2%
Net Property, Plant & Equipment 100% 194% 290% Net Property, Plant & Equipment 5% 7% 10%
Goodwill 100% 100% 102% Goodwill 16% 13% 12%
Other Intangibles 100% 103% 108% Other Intangibles 44% 36% 35%
Deferred Tax Assets, LT 100% 204% 224% Deferred Tax Assets, LT 1% 1% 1%
Total Assets 100% 128% 139% Total Assets 100% 100% 100%
LIABILITIES LIABILITIES 0% 0% 0%
Accounts Payable 100% 186% 200% Accounts Payable 5% 7% 7%
Accrued Exp. 100% 136% 286% Accrued Exp. 4% 4% 7%
Curr. Port. of LT Debt 100% 100% 0% Other Current Liabilities 2% 1% 3%
Curr. Income Taxes Payable 100% 1798% 0% Total Current Liabilities 11% 14% 17%
Other Current Liabilities 100% 96% 219% Long-Term Debt 40% 39% 38%
Total Current Liabilities 100% 172% 221% Def. Tax Liability, Non-Curr. 5% 4% 3%
Long-Term Debt 100% 126% 133% Other Non-Current Liabilities 2% 3% 4%
Def. Tax Liability, Non-Curr. 100% 85% 73% Total Liabilities 58% 60% 62%
Other Non-Current Liabilities 100% 150% 217% Pref. Stock, Convertible 20% 16% 0%
Total Liabilities 100% 131% 146% Total Pref. Equity 20% 16% 0%
Pref. Stock, Convertible 100% 104% 0% Common Stock 1% 1% 27%
Total Pref. Equity 100% 104% 0% Additional Paid In Capital 21% 16% 1%
Common Stock 100% 100% 3083% Retained Earnings 0% 7% 11%
Additional Paid In Capital 100% 101% 7% Total Common Equity 22% 24% 38%
Retained Earnings 100% -2465% -3887% Total Equity 42% 40% 38%
Comprehensive Inc. and OtherN/A 100% 200% Total Liabilities And Equity 100% 100% 100%
Total Common Equity 100% 144% 246%
Total Equity 100% 125% 128%
Total Liabilities And Equity 100% 128% 139%
 APPENDIX 8 :PROJECTIONS
Revenue by quarter
• We expect an initial increase in expenses and cash outflows:
Q4 2016 42 • Design
Q1 2017 16 • Advertising
Q2 2017 128 • Setting up manufacturing facilities
Q3 2017 209
• Expansion of revenues and cash flows will lessen the restrictive
Q4 2017 51
effects of debt covenants
Q1 2018 28
Q2 2018 172
Q3 2018 266
Q4 2018 52 Q4 growth 21%
Q1 2019 30 Q1 growth 75%
Q2 2019 173 Q2 growth 34%
Q3 2019 267 Q3 growth 27%

10% 20% 30% 40% 50% 60% 70%

Q4 2019 70 76 82 89 95 101 108
Q1 2020 57 62 68 73 78 83 89
Q2 2020 256 280 303 326 349 373 396
Q3 2020 374 408 442 476 510 544 578
 Bibliography:

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CA.

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