Umbro plc

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Umbro plc

• 2007 Interim Results

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Highlights

• Challenging environment for licensed business
• Continued strong International development
• France / China investments
• USA
• Increasing brand exposure
• Premiership
• Tournaments
• 2008 brand campaign
• Improving operational efficiencies
• Range
• Retail
• Sourcing
• Strengthening management team
• Appointment of new CFO Gary Brown

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Financials

• Paul Masters
• Director Group Finance and IR

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Headline financials
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Branded growth continues

• Licensed World Cup effect v 2006, England sales
  weighted to H2 when compared with 2005
• Branded May start to Sports Direct agreement
  shifts growth to H2

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World Cup comparatives diluting Western European
regions but strong growth in other territories

• UK World Cup effect, core Branded TWE 13 ahead
  of 2006
• Strong growth in Eastern Europe (30) but Western
  Europe below 2006
• Continued growth in China(21.5), USA (155) and
  Latin America (15)

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Gross margin percentage in line with expectations
given the product mix
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Profit and loss account (pre-exceptional)
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Balance sheet reflects non tournament working
capital cycle and H2 inventory build
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Cash flow reflects recent investment activity
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Outlook Strategy Update

• Steve MakinCEO

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England replica sell-through has been below
expectations

• Critical summer period has not seen the increases
  expected
• 35 sell through currently versus expected 65
• Significant overhang of stock at retail at the
  end of 2007
• Number of factors have combined to drive
  performance
• Retail conditions
• 2006 saturation
• Qualification risk
• Order book and contractual agreements in place
  for H2 2007
• Likely impact on 2008 away jersey volumes even in
  the event of qualification
• 20 reduction in licensed apparel sales versus
  original expectations
• Management remain focussed on developing the
  licensed business

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Financial summary

• Comparatives with 2006 distorted due to
  tournament
• Positive momentum on branded business
• International markets
• Branded products
• Investments in licensees
• Increased second half weighting
• Order book and contractual agreements
• Challenging environment for licensed business
  likely to impact 2008 earnings

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The Umbro Brand
Mission

• Inspire Excite the World of Football

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Group objectives

• To be at least the No.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 to represented by international
markets
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Group Strategy
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Leverage Authenticity Growing global exposure
in primary competitions
BirminghamCity
Blackburn Rovers
West Ham
Everton
Sunderland
Wigan Athletic
Cagliari
AC Siena
Figueirense
Lyon
Rangers
Besiktas
SlaviaPrague
CSKAMoscow
Opportunity
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Leverage Authenticity Umbro World Tournaments
11 a side
USA
Spain
Sweden
Denmark
Eire
England
Norway
Canada
5 a side
England
China
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Group Strategy
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Product Opportunities to improve global
consistency

• Take-up of central ranges by licensees has been
  poor
• Inconsistent in the face of competition

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Product Focussed concepts

• Teamwear
• Iconic teams
• Amateur leagues
• SX
• Pinnacle range
• Ultimate performance
• Diamond Pro
• Performance
• Lifestyle opportunity
• Football culture
• Lifestyle
• Performance inspired
• Existing distribution

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Product Inspire and excite the world of
football
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Product - Quality and value achieving
recognition
Sunday Mail Umbro Xai 3, best buy.
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Enhance Image - 2008 Brand Campaign

• New media focus
• 18 24 yr old target audience
• Direct result of brand architecture / research
  project
• Give football back to the fans
• Comprehensive suite of tools
• Re-launch of Umbro.com
• All things football

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Enhance image Retail experience

• 1820 SIS/SAS globally, an increase of 360 since
  December 2006
• Retail development markets 2yr plan
• China 564
• Korea 72
• Poland 26
• Spain 18
• Italy 17
• Russia 15
• Brazil 15

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Opportunities exist to improve sales densities

• New retail furniture
• Improved quality of merchandising
• Investment in EPOS (China)

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Umbro at retail in the UK

• Umbro Football Areas
• Sports Direct - 110 stores completed, 180 by year
  end
• JJB Format being finalised, target of 50 by
  year end
• Next
• First sports brand to feature in Next Directory
• Sole sports brand in Xmas supplement
• Apparel sell through ahead of expectations
• Retail roll out has commenced

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Group Strategy
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The football market is highly concentrated, Umbro
will focus on 7 Priority Markets
SUBSIDIARIES UK USA JOINT VENTURES China France LI
CENSEES Russia Italy Brazil

• Providing central support for
• Strategic direction
• Product design and development
• Marketing support

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Maximise Global Reach - Direct investment in
Priority Markets

• China equity stake increased from 25 to 40
• 49 Equity investment in France
• We will pursue further licensee investments where
  growth opportunities exist

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Priority Markets - USA

• Market
• 500m soccer market, expected cagr to 2010 of
  2.6
• 6 of the US population participate in the sport
• Umbro TWE - full year 2006 7.5m, H1 2007 growth
  of 155
• Strategy
• Establish Umbro as an authentic soccer brand
  through specialist distribution
• Enter new distribution with branded products
• Progress to date
• Dicks - all store (314) sell through ahead of
  expectations. 15 store growth p.a. expansion
  plan
• Soccer Speciality 300 accounts, target of 370
  by year end. Opportunity to increase like for
  like sales through Teamwear and merchandising
• New distribution trials with performance
  inspired branded products Kohls, Bealls and
  Urban Outfitters

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Sell through at Dicks is ahead of expectations
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Priority Markets - France

• Market
• 225m football market, expected cagr to 2010 of
  6.3
• 14 of the population participate in the sport
• Umbro TWE - full year 2006 70m (70 lifestyle)
• Our licensee partner
• Noël Soccer SAS, (Vitre nr Rennes)
• 14 yrs association with Umbro
• Sports footwear background
• Strategy
• Branded footwear
• Increase performance product participation -
  Teamwear
• Develop Key/National account business
• Progress
• OL resigned through to 2013
• Back to growth with Decathlon

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Global sourcing - Umbro Asia Sourcing

• Established January 2007, now fully operational
• Initial volumes ahead of expectations
• Focus on Priority Markets and central product
  ranges
• Potential expansion into Footwear
• New CSR structure

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Summary - strategic progress

• Continued strong international development
• Increasing brand exposure
• Improving operational efficiencies

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Conclusions

• Organic strategy in place and making progress
• Challenging England replica business growth
  strategy unchanged
• Opportunity to build on core competencies
• Development
• Sourcing
• Selling
• Pursue acquisition opportunities for
  complementary brands/businesses
• Strengthening management team
• Appointment of CFO Gary Brown
• Confident about medium term growth prospects

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Appendix
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Group Objectives To be at least the No3
football brand in every market in which we
operate
Priority Markets
All Markets
3rd or better in 22 out of 54 markets
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Group Objectives To grow the branded business
by at least 10 p.a.
Excludes tournament related promotions
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Group Objectives 80 of Group TWE represented
by international markets
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64
66
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Enhance Image Own retail continues to grow
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The global football market is highly concentrated

• 80 of the global market is driven through 10
  markets
• Umbro operate in all of these

Increasing Market Attractiveness