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Notice
These materials include forward-looking statements. These statements are based on the current expectations of Garmin Ltd. and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements include, without limitation, statements containing words such as "proposed" and “intends” or “intended” and "expects" or "expected". By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. These factors include those discussed or identified in the filings by Garmin Ltd. with the U.S. Securities and Exchange Commission in its Annual Report on Form 10-K. Garmin Ltd. does not undertake any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Garmin Overview Global Supplier of Navigation, Communication and Information Products A History of Successful Growth
Profitable every year since the Company’s inception in 1989 World-wide presence and distribution Vertical integration mitigates risk Strategic emphasis on market segmentation Global leader in each market we serve World-wide employment of nearly 8,000 associates
Four Business Segments – All with Growth Opportunities
Auto/Mobile – PND, OEM and wireless solutions Aviation - Integrated Flight Decks, panel mount and portable avionics Outdoor/Fitness - handheld and wearable products Marine - sonar, radar, weather, 3-D marine cartography, networking
2007 Revenue of at Least $2.90 Billion — up 63% 2007 Earnings per Share of at Least $3.40 — up 45%
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History of Consistent Growth ($ in Millions) $3,000 Revenue
$2,500
Net Income $2,000 $1,500 $1,000
6% 3 R: G CA E NU E V RE 2% 3 R: G CA E OM C IN T NE
$500 $0 '00
'01
'02
'03
'04
'05
'06
'07 est.
Profitable every year since the Company first began selling product in 1991. 3
Unit Growth 6,783
7,000
Units (in thousands)
6,000
5,500
5,000 4,000 3,027 3,000 2,066 2,000 1,226
1,319
2000
2001
2,306
1,557
1,000 0
(Units in Thousands) 4
2002
2003
2004
2005
2006
2007 Q3 YTD
Human Resources 7,901
8,000
Garmin North America
Taiwan
Garmin Europe
7,000 6,000 5,000 4,286
4,000 3,034
3,000
2,484 2,020
2,000 1,000 8
45
278 119 334
'89
'90
'91
446
614
908 1,042 759 851
1,297 1,329
1,575
0
(# of Associates) 5
'92
'93
'94
'95
'96
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
'07 YTD
Associate Retention & Compensation Company wide, Garmin retains ~95% of its
workforce annually Attract and retain talent through competitive
compensation that is equitable externally and internally Reward performance through salary, bonuses,
employee stock purchase program, stock appreciation rights, retirement plans and pension, and academic assistance and professional development (# of Associates) 6
Markets We Serve
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Automotive / Mobile
Marine
Outdoor / Fitness
Aviation
• • • • • •
• • •
• • •
PND’s Mobile on and off board applications OEM aftermarket and factory Handhelds and chartplotters Radar, sounders, autopilots, networks OEM aftermarket and factory
Personal GPS and fitness Communication devices Wireless tracking
General aviation GPS products Communication, radar and autopilots Revolutionary glass cockpits
Market Diversification Aviation
Marine
Product Depth
Auto / Mobile
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Market Breadth
Outdoor/Fitness
Vertical Integration
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Garmin’s strategy • In-house design and manufacturing, distribution, marketing, sales, customer support • Control the entire process • Create jobs • Utilize inventory as a business tool
Results • High levels of innovation, flexibility, and responsiveness • Manage risk • Reduce cost • Higher growth and stability
Industry Growth Drivers GPS is a premier growth industry
Increased Utility
Improved Accuracy
Miniaturization
Mapping Information
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Internet
Growth
Real-Time Weather and Traffic Data
Technology Convergence
Mobile Computing
Wireless Connectivity
Innovations and Patents
Garmin is expected to invest $155 million in
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2007 into research and development Garmin has more than 1,275 engineers worldwide 324 U.S. and 24 Foreign Patents Issued 188 U.S. and 20 Foreign Pending Applications Constituent of the Ocean Tomo 300 Patent Index based on the value of Garmin’s patent portfolio
Global Presence Salem, OR • Aviation R&D • Aviation Mfg. • 185 employees
Newport, OR • Marine R&D • 25 employees
Calgary, Alberta • Fitness / Wireless Technology • 65 employees UK Headquarters • Sales and Support for Europe, Africa and Middle East • 225 employees
Tempe, AZ • Software R&D • 15 employees
Munich, Germany • Distribution • 65 employees
Shijr, Jhongli & LinKou Taiwan • Consumer Mfg. • R&D • Sales, Distribution, and Support for the Pacific Rim • 5,225 employees
Paris, France • Distribution • 60 employees
Olathe, KS (Headquarters) • Primary R&D Center • Aviation Mfg. and Certification • Sales, Distribution, and Support for the Americas • 1,980 employees
7,900 total employees
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Chicago, IL Retail Store • 30 employees
Minneapolis, MN • Fitness, Wireless R&D • 25 employees GARMIN Products Sold
Taiwan Manufacturing SHIJR
Facilities
Shijr – 260,000 square feet Jhongli - 250,000 square feet LinKou - 580,000 square feet
Capacity
Expanded to 37 SMT lines Annual capacity of 25M units LCM clean room Module assembly Optical enhancement
5,225 Employees
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JHONGLI
QA Production Product development Regional cartography Regional languages
LINKOU
North American Operations
Approximately 750,000 square feet of space supporting:
• • • • • • •
Administration Primary R&D center Aviation manufacturing Marketing America’s customer support America’s product repair Warehouse
ISO 9001:2000 certified OLATHE
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European Operations
Approximately 155,000 square feet of office and warehouse space
Multi-lingual staff to support EMEA market
Dedicated EU product support
Corporate communications • Concept, design and production inhouse
Garmin owns distributors in Germany and France • Plans to acquire current distributors in Italy, Spain, and Denmark
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ISO 9001:2000 certified
SOUTHAMPTON
Organic Growth, Acquisition Growth Organic Growth
New European Headquarters Southampton, UK (Jan. 2007) Workforce grew from 84 in Jan. 2006 to 222 in Sept. 2007 Facilities grew from 33,600 sq. ft. to 155,000 sq. ft.
Acquisition Growth UPS Aviation Technologies Salem, Oregon (acquired in July 2003)
Expanding from 150 associates to 250 by December 2010 Facilities growing by 66,000 square feet by Q2 2008 16
Chicago Retail Showcase
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Located on the “Magnificent Mile” at the corner of Erie and Michigan Avenue in Chicago
Three-story, 15,000 square feet showcase for products and technologies
World’s first and only retail outlet dedicated to GPS navigation
Enhance brand awareness and support existing retail partners
High tech, high touch consumer experience in one of the highest foot-traffic retail locations in North America
Aviation Segment Leader in the General Aviation Market Leading Provider of OEM, Retrofit, and Portable Aviation Equipment to the General Aviation Market
Over 90,000 430/530 units in service Over 4,000 G1000 glass cockpits in service Over 700 general aviation distributors worldwide Strong market share: • Retrofit: >80% • OEM: >60% • Portable: >95%
Partner with Industry-leading Aircraft Manufacturers: Bell Helicopter, Cessna, Cirrus, Columbia, Diamond, Embraer, Eurocopter, Hawker Beechcraft, Honda, Kodiak, Mooney, Piper, Socata 18
Cessna Mustang
Embraer Phenom 100
Marine Segment Leading Manufacturer of Marine Electronics
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Broad Range of Products – GPS chartplotters, sonar, radar, real-time weather, autopilot, networking capabilities, multi-function displays – including new touch screen display with intuitive interface
Revolutionary Bluechart g2 “Vision” Cartography – True 3D mapping views, detailed satellite imagery
Strong market share in marine electronics market of > 30%
Outdoor/Fitness Segment Leading Manufacturer of Outdoor and Fitness Products
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Broad Range of Products – basic to advanced navigation features, highsensitivity GPS/WAAS, family radio service (FRS), dog tracking Fitness applications including cadence, heart rate, foot pods, training software and fitness community Strong market presence in major retailers and specialty retailers catering to skilled enthusiasts - Best Buy, Circuit City, WalMart, Target, REI, Cabela’s, Dick’s, Bass Pro Shops
Automotive Global Leader in Portable Navigation Market
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Full Range of Product Offerings – basic to advanced navigation features Mobile on and off board applications Industry-leading features: Bluetooth hands free
Real-time traffic
Speaks street names
Gas prices
High sensitivity GPS
Movie listings
MP3 player
Weather
Audio books
Safety cameras
Garmin Lock
Discount finder
50% Market share in North America, 20% Market share in Europe Highest volume market segment Variety of price points – sub $199 and up
PND Product Portfolio Strategy StreetPilot 7200 / 7500
nüvi 200W / 250W
nüvi 200 / 250 / 260 / 270
nüvi 300 / 310 / 350 / 360
StreetPilot c330 / c340
zūmo 450 / 550
nüvi 750 / 760 / 770
nüvi 600 / 610 / 610 / 650 / 660 / 670 / 680
StreetPilot c530 / c550 / c580
Quest / Quest II
More product offerings than any other auto nav manufacturer in the market today… a business model that WORKS. 22
Wireless Solutions On Board – Garmin Mobile 10, 20, XP (“Thick Client”)
Intuitive, industry-leading user interface, ready to navigate out of the box 3D maps and advanced features such as saved routes and tracks Rich, full-featured navigation application with PND-like user experience
Off Board – Garmin Mobile (“Thin Client”)
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Robust Java application with moving map and fluid, text-to-speech voice guidance Rich, real-time content - traffic, fuel prices Sprint “Vision” program available on 34 Java handsets to date via monthly subscription Digital Cyclone division expands LBS applications
Legacy of Innovation
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1989 – Company founded by Dr. Min Kao and Gary Burrell
1991 – First product, GPS 100, introduced
1998 – First GPS mapping-enabled mobile phone introduced
1998 – StreetPilot, first portable mapping GPS for automobiles
1999 – eTrex handheld outdoor navigation device introduced
2001 – StreetPilot III, first portable PND with turn-by-turn spoken directions
2002 – First GPS-enabled PDA introduced (iQue)
2002 – First GPS-enabled two-way radios introduced (Rino)
2003 – Groundbreaking G1000 integrated cockpit for general aviation introduced
2003 – First self-contained GPS fitness device introduced (Forerunner)
2004 – Garmin Marine Network integrated system for boats introduced
2005 – Industry-leading “Where To/View Map” simplified user interface introduced
2005 – nüvi, first pocket-sized Personal Travel Assistant
Critical Acclaim
Our Company
“What Garmin has done is nothing short of invent a new consumer electronics segment.” (US News & World Report, 01.22.07)
Dr. Min Kao built Garmin “…into an industry leader by focusing on technology innovation and customer needs.” (Investor’s Business Daily, 10.04.07)
Named a Forbes “Global High Performer,” which are “fast-growing, adroit and well-managed companies that help set the benchmarks for their respective industries.” (Forbes, 03.29.07) Listed as one of “America’s 400 Best Big Companies” and “Best of the Best” in Technology Hardware & Equipment (Forbes, 01.08.07)
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Garmin ranked 22nd “Most wired company in the World” one of the “masters of innovation and technology.” (Wired Magazine, 03.07) Dr. Kao ranked #23 of “50 People Who Matter Now” – the most influential people in technology business today (Business 2.0, 07.07)
Critical Acclaim
Our Products nüvi 660 and nüvi 350 top-rated PNDs (Leading consumer
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magazine, 10.07) nüvi 680 rated “Editor’s Choice” (GPS Magazine.com, 02.07.07) “Quite simply, it is really hard to go wrong with the nüvi 760.” (GPS Review.net, 10.21.07) “The nüvi is a strong performer in an increasingly competitive field.” (BusinessWeek, 01.30.06) “The StreetPilot [c580] will please both Luddites and tech geeks.” (Business 2.0, 07.07) Astro GPS Dog Tracking System named “Best of the Best” hunting gear (Field & Stream, 09.07) “…I have never seen an airplane or new avionics system cause as much excitement as Garmin’s new G1000 glass cockpit system has.” (Flying, 01.04)
Philanthropy
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Garmin Electrical and Computer Engineering (ECE) Educational Initiative Endowed with $10 million from the Kao Family Foundation Offers 100 college scholarships worth $5,000 per year per student for those studying electrical and computer engineering. Paid internships, housing, and health insurance included Total package is estimated at $20,000 per year to each recipient. Donated GPS units and money to relief effort during Hurricane Katrina and Asian Tsunami United Way employee pledge drive with matching donations from Garmin Garmin promotes a culture of giving in communities where the company does business
