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Investor Summary

The Faction Collective SAQ3 2011


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Ex ecutive Summary- Global ski brand entering its 5 th season serving fast-growing and

differentiated Freestyle and Freeride markets filling a market need leftopen by mainstream major brands

- Consistently leading-edge skis, winning awards in multiple countries- Strong following and image serves as a platform for high-margin apparel

and accessories launched in 2011/122. Serious momentum in a growing market p8

- 114% CAGR of ski sales to 2.8K skis in 2011/12- Company on track to generate over 10M in revenue and 3M in profit- 160 Points-of-sale across 16 countries- Scalable business model due to distribution model and platform yielding 100%

CAGR gross profit vs. 25% CAGR Ope x- Inventory complete at end-August of which two-thirds are pre-sold (430

confirmed orders + 200k additional projected sales)- $7B total market growing despite recession of which Factions segment is

growing at 74%+- Market share shifting from snowboarding and traditional piste skis to freeskiing,

touring and telemark where Faction is strong- Industry changes in design, marketing, distribution and production enable

Faction to grow faster than major producers

1. Unique selling proposition with award-winning product p4

2

- Ex perienced co-founders with decades of retail,design, global growth & e xit experience from

- Specialist skills in each function retail, sales,marketing, finance

3. P roven, experienced team p 19


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- Comprehensive infrastructure in Europe + North America developed over five seasons

- Global distribution team and partners- Videos, TV shows, PR, Facebook and offer global marketing access- Interactive website and store provide fan interaction and revenues

5. Attractive investment p26

3

3. Global marketing & distribution p23

6. Appendix p32

- Two offerings> Inventory Finance> Eq uity raise

For more financial information or to furtherdiscuss investment opportunities, contact:[email protected] +44 7889 766 [email protected] +41 79 794 94 93


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The Proposition


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Our products inspire skiers and critics alike globally: The Agent awarded Palme DOr & Ski Remar quable by

Ski Magazine , France The Royale awarded Editors Choice by Backcountry

magazine 2010-11 The Royale 1 st pick, powder section in the Fantasy Draft

for Powder magazine.The best powder ski I rode all winter Tester quote .

The 3.zero awarded Editors Choice byBackcountry magazine 2011-12

Innovative, Award-Winning Product

5


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Full range of top quality wood-core skis in thehigh-growth freestyle & freeride segments

Progressive designs, inspiring graphics Pioneering mainstream applications of rocker

reverse-camber technology

Delivering passion throughinnovation and quality

6


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Brand as a Platform for High-Margin GrowthH elmets & P oles: Helmet sales e xceeded e xpectationfor 2011/12 with minimum pre-sell

Apparel: For 2012/13, Faction will e xpand intotechnical outerwear & broaden its lifestyle productsbased on Armada, which launched over 100products in two years:

- Increase from 0 to 15% of revenue over ne xt

three years with more e xpected in the longer term

- Technical outerwear offers anopportunity, bringing core design elements toski clothing

7

0% 20% 40% 60%

ACCESSORIES

APPAREL

EQUIPMENT

Average Margin


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Company Momentum


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Momentum

9

4

2

CH, Canada

Austria

5

5

Norway

PL

20

10

Japan

Bindings, poles

2003/4

12

7

France

Ski SKUs:

Countries:

Key new markets:

Other:

Ski Production

32

13

Spain, Korea

US subsidiary

ERP system

Sunglasses

43

16

ExplosiveUS, D E

Helmets

In-housedistribution

49

16

Italy, Finland,Benelu x

Apparel

expansion

05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/1304/05

Tonyproducesfirst samplesin France

Tony &Alex foundFaction SA

Royale rocker ski launched

Rocker onfour modelsAgent rocker touring ski

Rocker on 8modelsST P technology

Industry trends:

ArmadaLaunch

K2 Hellbentrocker skilaunched

K2 launchsidecountryrockeredtouring ski


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Serious momentum with accelerating growth

10*T he late production delivery ( 20 10/ 11), addressed in 11 / 12 through earlier manufacturing

0

5000

10000

15 000

20000

25000

30000

35 000

40000

20 11 / 12 20 12/ 13 20 13 / 14 20 14 / 15 20 15 / 16

Adults Kids Samples

0

200

400

600

800

1000

1200

14 00

16 00

18 00

2000

200 7/0 8 200 8/0 9 200 9 / 10 20 10/ 11

Ski volumes to date Projected ski volumes

11/12 based oninitial orders, prodeal execution in10/11 & market

feedback

Followingyear

samples

Major demandfrom stores forkids skis low

cost, highimpact producerengaged

Strong, steady growth due to:- new markets + new, attractive

SKUs- deeper orders in existing stores- new sales lead in the USA- Old-fashioned hard work &

client service

34,444+69%

20,372+92%

11,739+92%

6,104+125%

2,714+50%

Explosive growth from:Re-orders

New ski models

Kids skis with

guaranteed demand

from retailers

New points of sale in

existing territories

New territories

Larger orders per POSTimely delivery of

stock and samples

Direct sales via prodeals, web store and

Facebook site


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P.O.S. growth

11

Our POS growth reflects strong product and customer service& serves as a barrier to entry to new brands

Points Of SaleF or 2011/12 F action opened dozens of new accounts, primarily in North America, F rance and Germany

PO S growth Faction has driven point of

sale growth across 16countries and is in the processof both e xtending reach anddepth of SKUs in each store

2010/11 POS CAGR

France 43 1 21%

Scandinavia 29 21%

Switzerland 14 5 2%Australia/Asia 25 193 %NorthAmerica 29 39 %

Other 20 17 0%

Total 16 0 64 %

0

20

40

60

80

100

120

14 0

16 0

18 0

200 8 /0 9 200 9/ 10 20 10/ 11 20 11 / 12

France

Scandinavia

Switzerland

Australia / Asia

North America

Other

16 0

122

82

36


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The Market

1 2


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Total addressable market is over $7 billion USD

1 3

$2 .0 B

$0.9 B

$3.6 B

$0 .8 B

Skis

Snowboards

Equipment Accessories

Apparel & Apparel Accessories

Source: Snowsport Industry Association reports, Amer and Jarden annual reports

$7.3 B

An established, inspired hardware brand offers brand e xtension opportunitiesinto higher-margin products, e.g., Salomon, Ripcurl Faction helmets andglasses are in 2011/12

Snowboarding built to nearly one third of snowsport hardgoods market, but isceding market share to freeskiing

Ski revenues have grown for the past two yearsdespite global recession issues

Accessories offer 50%+ margins and affiliation to e quipment builds trust


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Growing Market Segments

1 4

F action segment growing fastest

Europe makes up 65 % of the global ski market, but industry figures are not readily available until annual reports from majors are released;Europe s weather will dampen overall growth but the underlying trends are consistent

In a fast-growing marketNorth American 20 10/ 11 revenueswere up 1 2% for skis, equipment &apparel despite recession to $3.3B

While snowfall plays an important rolein each year s sales * the baseline alsoreflects equipment evolution

Alpine skiing is stealing market share

from snowboarding

20 10/ 11 record year in North America with

$3.3B in snowsports sales with Alpine takingmarket share from snowboarding

Reverse camber a segment pioneered by Faction - up 134 %

Reverse camber 1 0% of sales

Randonne (touring) up 9 0%

Women s skis growing at 26%

Helmets up 1 2%-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

200 8/0 9 200 9/ 10 20 10/ 11

North American Snowsport Industry

$2.7B$2.8B

$3.3B

+4%

+18 %

T he market is growing Factions segment even faster

74%Fat skis

1 34%ReverseCamber

90 %Touring


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Europe makes up 65 % of the global ski market, but industry figures are not readily available until annualreports from majors are released; Europe s weather will dampen overall growth

T he market is growing - Factions segment is growing even faster

F rom snowboards to innovative skis

200 8/0 9 200 9/ 10 20 10/ 11Skis 443, 071 45 2,787 5 26,553

Snowboard 431,743 414,699 399,9 26

-

100 ,000

200 ,000

300 ,000

400 ,000

500 ,000

600 ,000

50 .6% 52 .2%

56.8 %

and from mainstream skis to innovative

niches

Parabolic/ Carvers

Freestyle

Freeride / BigMountain

Touring / Randone

Telemark

Diversification of markets

Faction is close to the market, always a stepahead of the incumbents

Slopestyle becomes an Olympic event

Shorter runs of new models like Zara infashion which produces in low-cost Spain

Shifting Market

1 5


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4. DISTRIBUTIONEVOLVING

Online retailers now the largestPOS s, changing floorspace

dynamics

3. MANUFACTURINGSHIF TS

Vertically-integrated EU giantsstruggling

China quality issues and turn-around not fast enough

Z ara for Snowsports

1. INNOVATiON

OVERRUNNINGMAINSTREAM

Camber & shape evolutionMulti-niche:Freeride, freestyle, telemark, touring

2. MARKETINGBARRIERSCRASHING

Social media , onlineaccess , videos and peer-to-peercommunication and influence

FACTION OPPORTUNITY

Why the Market Opportunity Ex ists

1 6

M ajor manufacturers have not kept pace with the segment needsand factors of production and distribution opened


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The Team &Operations

1 7


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Highly e xperienced co-founders

1 8C ommitted, ambitious co-founders with deep, complimentary skills

Tony McWilliam (L) CEO & Founder B randing: 10 years corporate identity and brand management for clients including Ford, The Fosters Group, Coke, etc.

Designer: Industrial design degree, graphic designer, product e xpert

Entrepreneur: Co-founder Verbier Life and Planet SubZero

Skier: Former big mountain competition skier and judge

Alex H oye (R) Chairman & Founder Entrepreneur: Co-founded internet-based auction company andsubse quently led it to 18-country, publicly listed firm worth $100M; Angelinvestor in seven successful early-stage businesses based in bothEurope and North America

B usiness Experience: Brand building and M&A e xperience at Disney;supply chain and international market entry at McKinsey; Currently C EOof a leading European digital marketing firm LatitudeEducation: Harvard MBA, Stanford BA


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Proven management team

T ruly global sales & distribution by experienced industry veterans

Re x WehrmanN orth American Sales

Ex Head team manager, product development advisor

and sales representativeFormer Freeride World Tour champion

Breckenridge, Colorado

Jesse CohenO perations Director

15 years in retail in North America & Europe;

Launched Verbier franchise & managed team for SurefootFormer guide for backcountry and heli toursMechanical Engineer

4th Faction year

Josh CohenDirect Sales Manager

3rd Faction year 13 years in retail

Oregon & Switzerland

Ross JanzenN .A. Marketing

5th Faction year Powder Magazine Captain Powder

Talent scout and product advisor 10-year ski technician

Jacobina Milne HomeMarketing & Social Media

5th Faction year Ex -Pro Skier

Magazine writer; Apparel brand marketer

Andrew CampbellFinance

9 years PWC12 years Patagonia

2 years Pure Fishing /Jarden (K2 parent)

Chambery, Switzerland

19


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Global Marketing & DistributionAd proof for double page spread - O ctober 2 011 issue of P owder Magazine, USA

20


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Distribution in 16 countries, e xceeding 20 in 2013

Direct allows strong controlover brand and higher marginsbut longer cashflow cycle

GM (%) 48% 16 %

CF Days 15 0 10

I ncreased Gross M argin by moving towards Direct model.I mproved cashflow by moving towards Distributor model.

21


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Centralised, cost-effective international marketing via:

Regular press releases used by international snowsport media as wellas mainstream lifestyle magazines and broadsheets

Advertising in key media to secure inclusion in annual Buyers Guides

Dedicated test fleets for ski magazines in Europe and North America Partnership with film company Voleurz with 10 stop film premiere-tour;

poster signing sessions with athletes and product giveaways

Involvement in International Freeski Film Festival annually inMontreal, CAN and FRA

Short viral ads released quarterlyTeam riders placed into Norwegian television adventure series

http: // www.factionskis.com / en / blog /? p=234 2

Global marketing

H igh visibility through content generation & frequent dialogue.Exposure in film, TV , viral media and competitions taking off 22


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Community management

Social Media

Strong emphasis on digital media and viral marketing build brand awareness more planned for 2011/12

Community Manager collects, focuses and mediates allonline brand touchpoints factionskis.comblog, Facebook, YouTube, forums

Content supplied by athletes and photographers outputthrough www.factionskis.com

Interactive community section of website will belaunched using Facebook Connect, with forum, rider

and visitor profiles, etc. 8,000 person core market database growing weekly -regular newsletter communication and strongclickthroughs to our website

Ex tensive use of snowsport specific forums worldwide

Online competitions to generate user content andpromote online sales

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Additional leverage

Co-founder Ale x Hoye has years of e xperience on theleading edge of digital marketing

Tony working with a team to develop games to e xpandreach and impact


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Attractive investment

24


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Two processes- Near-term Inventory Finance- Eq uity raise

SkisOrdered

SkisProduced

SkisShipped

DistributorsPay

DealersPay

Mar-May

Dec-Feb

Jun-Sept

Sept-N ov

Seasonal

Cycle

Seasonal cycle and investment raise

25

W e are here -inventory completeby end August


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LogicP recedence: E ight brands generating over 65% of total sales were ac quired in the past two decades*

Scarce Asset: Innovation, design, and loyal fans arehard to manufacture

Synergy: Scale can generate e xtensive cost(production) and revenue (distribution) synergiesovernight

Logic

Amer bought Atomic ( 93), Salomon ( 95), & Volant ( 03);Rossignol bought Dynastar; K 2 bought Vlkl ( 04), & Line( 06, Jarden bought K 2 ( 07), a major share of Rossignol ( 08)

Sell in 4 years

8x 1 0x 14x

Major Brand /

Conglomerate

P recedence: Action sport brands are able to become$B plays, like $400M revenue Ripcurl, $500M revenueBurton

Timing: Vertiginous growth of adventure sports andgrowth in markets means a range of areas with limitedincumbent advantage

Experience: The team has e xperience acrosscountries and including M&A

Faction offers a natural barbell strategy with strong returns

Volcom just soldat 14x in May 11

Nixon sold for 21xincluding earnoutin year 8

Attractive e xit prospects

26

Example EBITDA multiples


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K 2 A cquired 07

CHF 1.2 B

Dynastar Volkl

Acquired 04

RossignolRev: CHF450M

JardenNYSE

Rev: $4.7B

Amer Sports CorpFinnish Stock Ex

Rev: 1.7B

Marker bindings

TyroliaBindings

Scott

Atomic Acquired 93

Head NVViena Stock Ex

Rev: 330M

E lanFischer

Lookbindings

A cquired 93

Langeboots A cquired 89

Tecnica-group

Nordica

Salomon Acquired 05

Volant Acquired 03

L ine A cquired 06

TecnicaBoots

Head

Run as brand management companies in themodel of P&G. 100% ac quired brands

E lanSlovenia

Fischer SportsViena Stock Ex

Rev: 132M

Narrower base of mainstream ski brands to date, but some haveac quired accessory companies

Stoeckli

Brands which have strong global distribution but are focused onmainstream and may be interested in a core brand e xtension

Europe-based U S-based

BLAXSnowboards A cquired 99

Blizzard A cquired 10/06

[minority stake in firmsbelow ac quired 08]

M arket is extremely acquisitive and only K2 has a brand comparable to Faction (Line)

Very Large Sports Conglomerates Ski-driven Public Entities

Mid-sized Mainstream Independent Brands

Shareholder value/e xit options

27


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CloseRecap of key immediate operational and financial points

Pre-sold 66% of skis , 65% of helmets and 69% of poles before manufacturing each a 50 -100% sales increase from Prior Year

All skis, poles , helmets and bindings completeby end August and partially pre-paid

Company achieving margin improvement dueto wholesale distribution in four key markets USA, F rance , Canada , Germany and the UK and so can achieve breakeven in one moreseason


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Appendi x

29


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Snowsport participation is growing and diversifying

Faction is strong in double-digit growth segments & largest segment alpine hyper-growth niches

2008 / 09 2009 / 10 2010 / 11 3 -Year

Alpine / Downhill 1 0 ,346 1 0 ,919 11,5 04 5.4 %

Freestyle 2 ,711 2 ,95 0 3,647 16. 0%

Snowboarding 7,159 7,4 21 8,196 7. 0%

Telemarking 1,435 1,48 2 1,8 21 1 2 .6 %

Cross Country 3,848 4,157 4,53 0 8.5 %

Total 21,651 22 ,77 2 25,168 7.8 %

000 s of snowsport participants (North America)

Growing participation

30


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The model lineup has 12 of multiple lengths, each specifically designed for a particular segment of the market

R ange covers high-volume park and high-margin big mountain skis

Product positioning

31


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For more financial information or to further discussinvestment opportunities, contact:[email protected] +44 7889 766 [email protected] +41 79 794 94 93

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