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NU SKIN ENTERPRISESINVESTOR DAY November 18, 2010
1
SUSTAINING LONG-TERM GROWTH
2
• President and Chief Executive
Officer since 2003
• Chairman of the World Federation
of Direct Selling Associations
(WFDSA) from 2005 to 2008
• General Counsel 1996-2003;
Executive Vice President 2000-
2003.
• 20 years with Nu Skin
• Chief Financial Officer since 2002
• Played a key role in opening the
majority of Nu Skin „s international
markets from 1993 through 2002
• Instrumental in driving Nu Skin‟s
transformation efforts
• 20 years with Nu Skin
• Chief Scientific Officer since 2006
• Former President and Chief
Scientific Officer of Pharmanex
• Received Ph.D. from the University
of London
• Has published numerous articles,
reviews, and books on
pharmaceutical research during
nearly 20 years in the health care
industry
• 13 years with Nu Skin
• President, Global Sales and
Operations
• Previously served as executive
vice president of distributor
success and president of Nu Skin,
Europe
• Received M.B.A. from University
of Minnesota
• Worked 6 years at Pillsbury in
marketing management
• 12 years with Nu Skin
NU SKIN’S MANAGEMENT TEAMTruman Hunt: President, Chief Executive Officer Ritch Wood: Chief Financial Officer
Joe Chang, Ph.D.: Chief Scientific Officer Dan Chard: President, Global Sales & Operations
4
Matt Dorny Scott Schwerdt Luke Yoo Melisa QuijanoAndrew Fan
General Counsel President Americas,
Europe and Pacific
President, North Asia
& South Korea
President,
Southeast Asia
President,
Greater China
13 yrs with Nu Skin 22 yrs with Nu Skin 13 yrs with Nu Skin 13 yrs with Nu Skin20 yrs with Nu Skin
NU SKIN’S MANAGEMENT TEAM
Our vision is to
become the world’s
leading direct
selling company…
…by generating
more income for
our distributors than
any other company.
5
66
7
2009 INVESTOR DAY
GUIDANCE
GUIDANCE
GROWTH RATEPROJECTED REVENUE
PROJECTED
GROWTH RATE
$1.37 - $1.40 B 5 - 6% $1.52 - $1.53 B ~15%
2010 ACCOUNTABILITY REPORT
Annual Revenue
$986
$1,138$1,181
$1,115$1,158
$1,248
$1,331
$1,530
$500
$700
$900
$1,100
$1,300
$1,500
2003 2004 2005 2006 2007 2008 2009 2010
8
2003 – 2010 REVENUE
projected
Millio
ns
US
D
2003 – 2010 REVENUE (EX-JAPAN)
$427
$559
$620$642
$715
$804
$869
$1,055
$0
$200
$400
$600
$800
$1,000
$1,200
2003 2004 2005 2006 2007 2008 2009 2010
Millio
ns
US
D
projected
9
2010 PROJECTED REGIONAL REVENUE
REGIONCONSTANT
CURRENCY GROWTH
REPORTED REVENUE
(USD)
North Asia +5.2% ~ $685
Greater China +23.6% ~ $265
Americas-2.8%
+3.9%*~ $255
S. Asia / Pacific +37.6% ~ $180
Europe +14.1% ~ $150
Overall +10.4% ~ $1.53 B
* United States, excluding $11 MM in sales from non-U.S. distributors purchased at global convention in 2009 10
2003 - 2010 LOCAL CURRENCY REVENUE TREND
JAPAN
REVENUE TREND IN JAPAN (YOY)
11
• Stabilizing revenue
and executive
growth trends
• World’s 2nd largest
direct selling
market
• Reinforced
management team
-5.3%
-12.3%
-5.6%
-3.5%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2007 2008 2009 2010
84%
9%
7%
U.S.
Canada
Latin America
2010
AMERICASSALES
• Steady growth in challenging consumer environment
• 2009 spike reflects convention ageLOC launch
• Latin America holds potential for future growth
AMERICAS
2003 - 2010 USD REVENUE TREND
12
0
20000
40000
60000
80000
100000
120000
140000
0
2,000
4,000
6,000Executives
2003 - 2010 LOCAL CURRENCY REVENUE TREND
ACTIVE/EXECUTIVE DISTRIBUTOR GROWTH
• 6 consecutive years
of double-digit
revenue growth
• Growth despite
direct selling volatility
• Consistently
demonstrates
leadership in best
sales practices
SOUTH KOREA
13
GREATER CHINA
• Significant market
share in established
Chinese markets
Taiwan 6%
Hong Kong 25%
• High growth potential
in Mainland China
REVENUE TREND IN MAINLAND CHINA (YOY)
2003 - 2010 USD REVENUE TREND
-6.0%
5.7%
18.2%
11.2%
23.7%
17.9%
29.5%
-10.0%
0.0%
10.0%
20.0%
30.0%
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
14
• 50% growth in
2010
• Strong growth in
all markets
• Significant growth
in both nutrition
and skin care
SOUTH ASIA / PACIFIC
4
2003 - 2010 USD REVENUE TREND
16%
25%
32%
6%
12%
9% Singapore
Malaysia
Thailand
Philippines
Australia/New Zealand
Indonesia
2010
S. ASIA/ PACIFIC
SALES
15
• Fastest growing
region over the last
7 years
• 10% of global
revenue
• 5 of the top 10 direct
selling markets are
in Europe
EMEA
2003 - 2010 USD REVENUE TREND
32%
25%
27%
16%West Europe
East Europe
North Europe
Russia, IS, SA
2010
EMEASALES
16
2010 ACCOUNTABILITY REPORT
2009 INVESTOR
DAY GUIDANCE
GUIDANCE
GROWTH RATEPROJECTED MARGIN
PROJECTED
GROWTH RATE
12.0 - 12.5% +50 - 100 bps ~13.8 - 14.0% ~+280 bps
Operating Margin
17
11.9%*0.6% - 0.3%
1.8% 13.8 - 14.0%
0.0%
4.0%
8.0%
12.0%
16.0%
2009 GrossMargin
SellingExpense
G&A 2010
2010 OPERATING MARGIN FACTORS
* Excludes restructuring 18
2010 ACCOUNTABILITY REPORT
2009 INVESTOR
DAY GUIDANCE
GUIDANCE
GROWTH RATEPROJECTED EPS
PROJECTED
GROWTH RATE
$1.60 - 1.70 +13 - 17% $2.04 - 2.07 +46 - 48%
Earnings Per Share
19
2010
Annual Revenue $1.53 Billion$1.33 Billion
Executive Distributors ~ 35,000~32,900
EPS $2.04 - $2.07$1.51*
2010: A RECORD YEAR
2009 2010
Operating Margin 13.8 - 14.0%11.9%*
* Excludes restructuring 20
WHY WE SUCCEEDED IN 2010
• Product innovation: ageLOC
• Galvanic Spa
• Transformation skin care system
• Vitality – ageLOC inside
• Growth in Active and Executive
distributors
• Improvements in key markets
• China, South Asia/Pacific
• Improved efficiency
21
EVERY DAY AT NU SKIN:
300,000 people take
LifePak
100,000 malnourished children are
fed a nutritious meal
1 new distributor reaches the $1 million
earned milestone every 6 days
$1.8 million in distributor
commissions generated
2,200 people sign up as
distributors and customers
50,000 people use
ageLOC Transformation
22
2011 GUIDANCE
23
EPS
Operating Margin
Revenue $1.60 - $1.63 B
5 - 7% growth
14.0 - 14.5%
~ 50 bps improvement
$2.25 - $2.35
10 - 15% growth
$5 BILLIONREVENUE
24
At a time when increasing numbers
are desperately seeking income,
our strategy is to provide a
• Focused
• Easily duplicated
• Innovative and compelling
ANTI-AGING BUSINESS
OPPORTUNITY
25
GROWTH STRATEGY
26
A New Class of Anti-Aging Products
ageLOC PLATFORM
MARKET TRENDS
27
• Nearly 65 million people worldwide participate in direct
selling
• $114 billion in sales worldwide
• CAGR of more than 7% from 1998-2008
• 16 markets generate over $1 billion in sales
• 80% of sellers say direct selling meets or exceeds their
expectations
• 85% of sellers report a good, very good or excellent
experience with direct selling
• 74% of US adults have purchased products from a direct
seller
28
GLOBAL DIRECT SELLING TRENDS
Source: DSA and WFDSA
’08-’09 DIRECT SELLING MARKET TRENDS
29
TOP 5 GLOBAL DS
MARKETS
TOP 5 DS GROWTH
MARKETS (by dollars)
TOP 5 DS GROWTH
MARKETS (by % increase)
Source: WFDSA 2008 and 2009 estimated retail sales
1. United States $28 Billion
2. Japan $23 Billion
3. China $11 Billion
4. Brazil $8 Billion
5. South Korea $8 Billion
1. China +$2.2 Billion
2. Korea +$845 Million
3. India +$480 Million
4. Mexico+$425 Million
5. Peru+$400 Million
1. India +63%
2. Norway +57%
3. Denmark+52%
4. Peru +44%
5. Switzerland+38%
Direct selling growth in emerging markets
is driven by an appetite for opportunity
DEVELOPED MARKETS EMERGING MARKETS
Direct selling growth in developed markets
is driven by economic turbulence
DIRECT SALES GROWTH DRIVERS
30
31
EXPANDING ANTI-AGING MARKET
Global anti-aging projected to hit $200 B in 2010 with
double digit growth rates continuing for the next decade
$79.2 B
39%
$81.4 B
41%
$39.4 B
20% Appearance
Wellness
Weight/Fitness
Source: BCC Research
32
$200,000
$220,000
$240,000
$260,000
$280,000
$300,000
$320,000
$340,000
$360,000
2004 2005 2006 2007 2008 2009
An
nu
al S
ale
s in
US
D M
illio
ns
BEAUTY – PERSONAL CARE SALES
Source: Euromonitor
33
10.0%
5.8%
11.1%11.4%
0%
2%
4%
6%
8%
10%
12%
Face Care Body Care Make Up Sun Protection
2006-2013 CAGR
ANTI-AGING SKIN CARE
61%22%
9%
8%
Percent of Anti-aging Market
Face Care Body Care
Make Up Sun Protection
Source: Euromonitor
ANTI-AGING NUTRITION
• Dietary supplements growing at a global rate of 7%
• Growth is projected at nearly 50% from 2009-2015
• By 2015 market should be nearly $20B
• Consumers embrace both inner and outer anti-aging treatments
• Consumers are trending towards self-care for health issues
34Source: BCC Research
6.7%
19.2%
-2.9%
7.3%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2009 2010
Nu Skin
Personal Care
Companies*
NU SKIN vs. PERSONAL CARE COMPANIESYTD Annual Revenue Growth
35*Colgate-Palmolive, Estee Lauder, L‟Oreal, Shiseido, Elizabeth Arden, and Alberto-Culver
6.7%
19.2%
0.3%
12.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2009 2010
Nu Skin
Public Direct
Sellers*
NU SKIN vs. PUBLIC DIRECT SELLERSYTD Annual Revenue Growth
* Avon, Natura, Oriflame, Herbalife, Tupperware, Usana, and Reliv 36
TRADITION OF INNOVATION
37
• 2005 American Business Award:
“Most Innovative Company”
• 2009 International Business
Award: “Most Innovative
Company in Asia”
• 2010 American Business Award:
“Most Innovative Company”
1999180° System
Original LifePak 1992
1986Nutriol Hair Care
Nu Skin Founded 1984“All of the good, none of the bad.”
TRADITION OF INNOVATION
38
2010ageLOC Vitality
2009ageLOC Transformation
2008Galvanic Spa Facial Gels with ageLOC
2006Galvanic Spa
2005LifePak Nano
TRADITION OF INNOVATION
2003BioPhotonic Scanner
39
CHANNEL INNOVATION
40
• Industry‟s most
generous payout plan
• Seamless
compensation plan
across all markets
• Strength in two distinct
brands
• Wealth Maximizer plan
VOLUME
•5% EEB•10% Exec. Bonus
•10% Gi Breakaways
DEPTH
•5% 6 levels
OR
NU SKIN INNOVATION CENTER
41
NU SKIN INNOVATION CENTER
42
ageLOC – JUST THE BEGINNING
3
1
2
4
5
6
9+
8
7
43
SUSTAINING LONG-TERM GROWTH
Continued success
through product
innovation
44
45
OUR COMPETITIVE ADVANTAGETarget the Sources of Aging
SIGNS & SYMPTOMS
After 20 years and
billions of dollars in
research…
human genome map
46
SEQUENCING THE HUMAN GENOME
47
ageLOC BREAKTHROUGH
• Old paradigm: Aging is
inevitable – there is
nothing you can do to
influence your inherited
genes
• New paradigm:
Expression of age-
related genes can be
influenced back to a
more youthful state
48
ageLOC AS A PRODUCT PLATFORM
Gene expression science (ageLOC)
provides an innovative anti-aging product
platform encompassing both personal
care and nutrition
AGING
Age-related
frailty, disability
and disease
Tissue damage
exceeds
tissue repair
Gene
expression
regulates the
aging process
Our exclusive access to information on the
ultimate sources of aging offers a whole new
way of looking at aging.
49
50
IDENTIFYage-related genes
RESETage-related genes
Proprietary technology
identifies multiple age-
related genes in different
tissues
Proprietary ingredient
blends to reset genes
to youthful activity
THE ageLOC APPROACH
51
IDENTIFYage-related genes
RESETage-related genes
THE ageLOC APPROACH
• More than 26 years of personal
care and nutritional R&D
• Broad-spectrum product
expertise
• Powerful R&D engine: over 75
scientists, 3 research centers,
and key academic collaborations
52
• Patented gene expression
profiling process to identify
aging genes
• More than 30 years of genetic
research expertise
• 300+ published peer-reviewed
papers on aging that support
ageLOC science
EXCLUSIVE SCIENTIFIC PARTNERSHIP
53
AGING SCIENCE EXPERTISE
• Co-Founder, LifeGenTechnologies
• Professor of Geriatrics & Gerontology, University of Wisconsin
Department of Medicine
• Author and co-author of more than 170 scientif ic publications
• Harmon Research Award, American Aging Association and the
Glenn Award, GSA
• Featured on 60 Minutes and CNN
• Co-Founder, LifeGenTechnologies
• Professor, Departments of Genetics & Medical genetics, University
of Wisconsin
• Published in several prestigious scientif ic journals such as Science
• Shorb Lecturer Award and the Burroughs Wellcome Young
Investigator Award
Richard Weindruch, Ph.D. Tomas A. Prolla, Ph.D.
54
SCIENTIFIC ADVISORS
• Kern and Marnie Wildenthal
President's Research Council
• Professor in Medical Science,
UT Southwestern Medical
Center
• Professor, Developmental
Biology, Stanford University
Medical Center Department of
Developmental Biology
• Professor, Molecular
Pharmacology, University of
Southern California School of
Pharmacy
M. Kuro-o, M.D., Ph.D. Stuart Kim, Ph.D. Lester Packer, Ph.D.
FIRST INNING: ageLOC GALVANIC
SPA & GELS
55
• 2006-07 began growth
acceleration
• 2008 improved gels with ageLOC
ingredients
• 2010 new body design and
electronics
Delivers 5x more active ingredients
to the skin
SECOND INNING: ageLOC
TRANSFORMATION SYSTEM
56
• Q4 2009 introduction
• 2010 global roll-out
• Complete anti-aging skin
care system
56
THIRD INNING: ageLOC INSIDE – VITALITY
• 2010 launch in U.S., Europe, and Japan
• Expands ageLOC platform to include
internal sources of aging
• Energy loss is one of the first perceived
signs of aging:
• Positioned as a LifePak companion
THREE DIMENSIONS OF VITALITY
PHYSICAL VIGOR
MENTAL ACUITY
SEXUAL HEALTH
57
58
THIRD INNING: ageLOC INSIDE – VITALITY
BRAIN (Vitality)
HEART (Vitality)
MUSCLE (Vitality)
40
50
60
70
80
90
100
110
120
1 2 3 4 5 6 7 8 9 10 11 12
Co
gn
itiv
e F
un
cti
on
Sc
ore
Vitality
Placebo
Week
59
PILOT CLINICAL STUDY OF VITALITY
* P-Value < 0.005 (Vitality vs. Placebo)
+20%
EFFECT OF VITALITY ON MUSCLE
GLYCOGEN STORAGE
60
Mu
sc
le g
lyc
og
en
Exercise
w/ VitalityDormant Exercise
2.2
2.0
1.8
1.6
1.4
1.2
1.0
+24%
61
PATENTED ALGORITHM TO ASSESS
GENE EXPRESSION
Low
Expression
High
Expression
Gene Expression Scale
Gene expression profile
YOUNG OLD
Proprietary
Genetic databank
YOUNG GENE
EXPRESSION
OLD GENE
EXPRESSION
RESET GENE
EXPRESSION
WITH VITALITY
Influencing genes
related to vitality
62
RESETTING GENES WITH VITALITY
Low
Expression
High
Expression
Gene Expression Scale
LIVER (Detoxification)
LUNGS (Detoxification)
63
BRAIN (Vitality)
HEART (Vitality)
MUSCLE (Vitality)
FOURTH INNING: 2011 GLOBAL
CONVENTION
64
ALPHA VITALITY
FOURTH INNING: 2011 GLOBAL
CONVENTION
BENEFITS OF ageLOC ALPHA
65
• Complements benefits of
Vitality
• Resets genes that control
detoxification
• Restores and purifies the
body
restage 2012-18Restaging strategically important Nu Skin and Pharmanex products
renew Galvanic Spa 2007
rejuvenate Transformation 2009
recharge Vitality 2010-11
restore Alpha 2011-12
regenerate Beta 2012-13
remodel Gamma 2013-14
Kappareverse 2014-15
3
1
2
4
5
6
9+
8
7
ageLOC: LONG-TERM GROWTH POTENTIAL
CO
MP
LE
TE
FU
TU
RE
66
SUSTAINING LONG-TERM GROWTH
67
Continued success
through effective
channel management
2010 SALES INITIATIVES
68
The Wealth Maximizer – Compensating leaders for
growth
Leadership Development – Improving the success of
our leaders
Economic Engine – Focusing on core business drivers
The Innovation Launch Strategy – Accelerating
revenue growth by leveraging innovation
ECONOMIC ENGINE STRATEGY
Focus all sales programs
and market activities on
core business drivers
69
Success Metrics (3 R‟s): • Recruiting
• Retention
• Rate of consumption/
retailing
RECRUITING RETENTIONRATE OF
CONSUMPTION
ACCELERATED REVENUE GROWTH
Active DistributorsRate of
Consumption
HOW WE MEASURE SUCCESS – 3 R’S
70
Distributor
Productivity
Duplication
RECRUITING
RETENTION
RATE OF
CONSUMPTION
Total Execs
HOW THE 3 R’S DRIVE SALES GROWTH
71
ACCELERATED REVENUE GROWTH
New ExecsActive
Distributors
GLOBAL BUSINESS PROFILE
72
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
YOY % Change in:
ConsumptionActivesSales
THE WEALTH MAXIMIZER STRATEGYCompensating Leaders For Growth
Manage compensation plan
to maximize the productivity
of our distributor force
Success Metrics:
• Percent of Executives at retention
level income
• Percent of Executives at 3,000
group sales
73
38.0%
47.0%
0%
10%
20%
30%
40%
50%
Before Wealth Maximizer
After Wealth Maximizer
WEALTH MAXIMIZER RESULTSPERCENT OF EXECUTIVES EARNING $450+
74
Chart showing
retention and different
income levels
Avg. new executive (6 Mo.) income and retention
Avg. new executive income – first 6 months
36.0%
45.0%
0%
10%
20%
30%
40%
50%
Before Wealth Maximizer
After Wealth Maximizer
WEALTH MAXIMIZER RESULTSIMPACT OF INCREASING GROUP
VOLUME QUALIFICATION TO 3,000
75
0%
2%
4%
6%
8%
10%
12%
14%
0% 10% 20% 30% 40% 50%
Pe
rce
nt i
ncre
ase
in re
ve
nu
e
Additional percent of
Executives at 3000 points
INNOVATION LAUNCH STRATEGYAccelerating Sales By Leveraging Innovation
76
Generate a high level of distributor
recruiting and customer acquisition
by consistently renewing our
business opportunity cycles
20000
30000
40000
50000
60000
70000
80000
90000
Jan-0
4
Mar-
04
May-0
4
Jul-04
Sep
-04
No
v-0
4
Jan-0
5
Mar-
05
May-0
5
Jul-05
Sep
-05
No
v-0
5
Jan-0
6
Mar-
06
May-0
6
Jul-06
Sep
-06
No
v-0
6
Jan-0
7
Mar-
07
May-0
7
Jul-07
Sep
-07
No
v-0
7
Jan-0
8
Mar-
08
May-0
8
Jul-08
Sep
-08
No
v-0
8
Jan-0
9
Mar-
09
May-0
9
Jul-09
Sep
-09
No
v-0
9
Jan-1
0
Mar-
10
May-1
0
Jul-10
KR TOV (divided by 200) KR PV Actives
SUSTAINING GROWTH - KOREA
77
Sales Actives
Pe
rce
nta
ge
gro
wth
g3
Estera
TRA
ageLOC
Transformation
78
ageLOC TRANSFORMATION TRIAL
0%
10%
20%
30%
40%
50%
60%
70%
80%
Q4 2009 Q1 2010 Q2 2010 Q3 2010
Percent of active distributors who
have tried ageLOC Transformation
79
ageLOC TRANSFORMATION REPEAT
PURCHASERS
0%
10%
20%
30%
40%
50%
60%
Q1 2010 Q2 2010 Q3 2010
Percent of distributors who have purchased
ageLOC Transformation more than once
Improve leadership growth
fundamentals by focusing on critical
activities, benchmarks and rewards
80
LEADERSHIP DEVELOPMENT STRATEGYImproving the Success of Our Leaders
81
Executive
Ruby
Blue Diamond
Team Elite
Executive
Ruby
Blue Diamond
Team Elite
ROADMAP TO SUCCESS
82
LEADERSHIP PIPELINE
• Positive improvements in: Leadership progression
$28 million revenue impact
Signups
Purchase
Sponsor
Qualifier
Executive
15%
improvement
13%
improvement
EXECUTIVE PERFORMANCE
83
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
12.00%
2001 2003 2005 2007 2009
Ruby and above total execs (Excluding Mainland China)
• Executives surpassed 35,000 in Q3 2010 (+13% YOY)
1. Programs are in place to drive sustainable
growth
2. We anticipate the Alpha introduction will result
in the biggest convention and product launch
in the company‟s history
3. Growing leadership base will drive successful
achievement of long-term revenue goals
CONCLUSION
84
RAYNE HO, ANGELA LIEU
• Team Elite qualified for
10 years
• Main focus is China,
South Asia
• 10 Million Dollar Circle
Members
SUSTAINING LONG-TERM GROWTH
Creating shareholder
value through continued
focus on driving
efficiency
86
GROWTH
Operating Margin 14.0 - 14.5% ~50 bps
Annual Revenue $1.60 - $1.63 B 5 - 7%
EPS $2.25 - $2.35 10 - 15%
2011 GUIDANCE SUMMARY
GUIDANCE
87
2011: REGIONAL CONSTANT CURRENCY
REVENUE GROWTH
Global Constant Currency Growth Expected Currency Benefit
4 - 6% ~1%
AMERICAS
+5 – 8%
EMEA
+12 – 15%GREATER
CHINA+ 2 – 5%
NORTH
ASIA+2 – 5%
SOUTH ASIA /
PACIFIC+7 – 10%
88
2011 PROJECTED CONSTANT CURRENCY
GROWTH & CURRENCY EFFECT
5-7%
3-5%4-6%
9-10%
0%
2%
4%
6%
8%
10%
12%
Q1 Q2 Q3 Q4
2011 Currency Assumptions
$1 USD ¥85.00 JPY
$1 USD ₩1,150 KRW
$1 USD €0.75 EUR
89
90
SUBSCRIPTION PROGRAM
54%
10%
20%
30%
40%
50%
60%
2003 2004 2005 2006 2007 2008 2009 2010
Auto-orders as a percent of revenue
2003 2010
REGION 2003 2010
Japan 57% 30%
Korea 6% 14%
Greater China 14% 18%
South Asia / Pacific 7% 12%
Americas 13% 17%
Europe 3% 10%
Japan
Korea
Greater China
South Asia / Pacific
Americas
Europe
REVENUE ALLOCATION
91
FOREIGN CURRENCY IMPACT
USD
RMB
HKD
25%
OTHERS
TWD
EUR
KRW
44%
JPY
31%
92
2007 – 2012 OPERATING MARGIN
7.8%
10.1%
11.9%
13.8 – 14.0%14.0 – 14.5%
14.5 – 15.0%
0.0%
4.0%
8.0%
12.0%
16.0%
2007* 2008* 2009* 2010 2011 2012
*Excludes restructuring and impairment of assets and other.
Projected ProjectedProjected
93
0.3%
0.8%
5.0%13.8 - 14.0%
7.8%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
FY 2007 Gross Margin Selling Expense G&A FY 2010
2007 – 2010 OPERATING MARGIN FACTORS
Projected
94
LEVERAGING REVENUE GROWTH
$1,157
$364$400
$1,530
$0
$400
$800
$1,200
$1,600
2007 Revenue 2007 G&A 2010 G&A 2010 Revenue
Millio
ns
US
D
ProjectedProjected
95
EFFECTIVE RESTRUCTURING PROCESS
$32
$17
$0
$12
$0 $0 $1
$38
$71
$127
$0
$20
$40
$60
$80
$100
$120
$140
2006 2007 2008 2009 2010
Millio
ns
US
D
Restructuring Charges
Operating Income Improvement over 2006 (ex-restructuring)
$237 million operating income
96
$61 million restructuring
2007 – 2011 GROSS MARGIN
81.9%81.7% 81.7%
82.2%82.0 – 82.3%
78.0%
79.0%
80.0%
81.0%
82.0%
83.0%
84.0%
85.0%
2007 2008 2009 2010 2011
ProjectedProjected
97
Duty rates4
Freight efficiencies – approximately 25% of COGS3
New product launches2
1 Exchange rates – foreign currency impact
GROSS MARGIN DETAIL
98
SUPPLY CHAIN INITIATIVES
Inventory flexibility4
Consumer price-point efficiency3
Gross margin improvement2
1 Supply chain security
5 Tax strategy
2007 – 2011 SELLING EXPENSES
42.9%
42.4%
41.7%
42.1%42.0 – 42.5%
36.0%
38.0%
40.0%
42.0%
44.0%
46.0%
2007 2008 2009 2010 2011
ProjectedProjected
100
2007 – 2011 G&A EXPENSE
31.4%
29.2%
28.0%
26.1%25.2 – 25.7%
15.0%
20.0%
25.0%
30.0%
2007 2008 2009 2010 2011
ProjectedProjected
101
Conventions4
Research and development3
2 Invest in high growth opportunities
• China, Eastern Europe, Southeast Asia
1 Leverage fixed costs
G&A EXPENSE DETAIL
2010 2011
Q2$3.0 m
G.C. / Korea
$1.0 m
Korea
Q4$5.0 m
USA / Japan
$7.0 mGlobal Convention
102
BUILDING ACQUISITION
2011 Impact:
• $33-35 million cash outlay
(anticipate borrowing to
cover cost)
• $4 million reduction in G&A
lease payment
• $2 million increase in
depreciation
• $600,000 in interest
expense
103
3 Customs audit – partial resolution by midyear
• Building acquisition adds $0.6 million
1Interest expense on debt
• Expected to be about $4.8 million
OTHER INCOME EXPENSE
104
Impact of foreign currency on debt
2• Assumes minimal impact due to forecasted yen at 85/dollar
• Assumes no impact in modeling of foreign currency fx on debt
INCOME TAX RATE
105
1Expected tax rate of 36.0 – 37.0% through 2011
• Potential completion of IRS audit with anticipated benefit of $2-7
million
2007 – 2011 EPS
$0.75
$1.02
$1.51
$2.04 – $2.07
$2.25 – $2.35
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
2007* 2008 2009* 2010 2011
ProjectedProjected
*Excludes restructuring and impairment of assets and other. 106
2007 – 2010 CASH FLOW FROM
OPERATIONS
$49 m
$103 m
$134 m
$190 m
$-
$50
$100
$150
$200
2007 2008 2009 2010
Projected
107
2011 CASH FLOW MODELING
D&A $30 MM $35-40 MM
Stock Option Expense $10 MM $12-15 MM
Capital Expense $30-35 MM $45-50 MM
Debt Payments (Apr/Oct) $33 MM $22-32 MM
Dividend Payments $32 MM $35 MM
20112010
108
2004 – 2010 STOCK REPURCHASE
ACTIVITY
109
Outstanding shares repurchased per year~2%
Average share purchase price$19.62
Average shares purchased per year2.3 m
$46 m Average purchase amount per year
INCREASING DIVIDEND HISTORY
$0.20
$0.24
$0.28
$0.32
$0.36
$0.40
$0.42
$0.44
$0.46
$0.50
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
2001 2000 2003 2004 2005 2006 2007 2008 2009 2010
110
FINANCIAL SUMMARY
2011 will be another record year
10 – 15% EPS growth
Strong cash generation
Continued margin expansion
111
SUSTAINING GROWTH
• Favorable market trends
• Strong product innovation pipeline
• Proven ability to convert innovation to revenue
• Demonstrated commitment to operational efficiency
• Upside in emerging markets
112
$0.00
$0.50
$1.00
$1.50
$2.00
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
$0.00
$0.50
$1.00
$1.50
$2.00
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
MANAGEMENT INCENTIVE PLAN
Nu Skin EPS (ttm)
Initiated
Performance-based
Incentive Plan:
113
$0.00
$1.00
$2.00
$3.00
$4.00
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
$0.00
$1.00
$2.00
$3.00
$4.00
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Initiated NEW
Performance-based
Incentive Plan
Expansion to
broader group of
managers
$4.00 EPS
by Q4 2015
MANAGEMENT INCENTIVE PLAN
Nu Skin EPS (ttm)
114
SUSTAINING GROWTH
• Favorable market trends
• Strong product innovation pipeline
• Proven ability to convert innovation to revenue
• Demonstrated commitment to operational efficiency
• Upside in emerging markets
• Aligned and incented management team
115
SUPPORT MATERIALS
DISTRIBUTOR COMPENSATION SUMMARY
117
2006 2007 2008 2009
Operating Margin 4.90% 6.10% 10.10% 11.1%
Percentage impact of restructuring 1.00% 1.70% 0% 0.8%
Operating Margin excluding restructuring charges 7.80% 7.60% 10.10% 11.9%
Earnings per share $0.47 $0.67 $1.02 $1.40
Impact of restructuring $0.28 $0.17 $0 $0.11
Earnings per share excluding restructuring charges $0.75 $0.84 $1.02 $1.51
This presentation contains non−GAAP financial measures, which management believe are useful to management and investors in evaluating, and comparing from period to period, results from ongoing operations in a more meaningful and consistent manner while also highlighting more meaningful trends in the results of operations. For purposes of Regulation G, a non−GAAP financi al measure is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most direc tlycomparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement ofcash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAPrefers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the following information provides a reconciliation of the non−GAAP financial measures to the most directly comparable GAAP financial measures.
Please note: This press release contains forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 that represent the company’s current expectations and beliefs. The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed herein. These risks and
uncertainties include, but are not limited to: (a) challenging economic conditions globally; (b) the risks of foreign currency fluctuations and the currency translation impact on our business associated with these
fluctuations; (c) uncertainty regarding the impact on our business of increased regulatory scrutiny of the direct selling industry in Japan and our efforts to increase distributor compliance efforts in this market;(d) an increase in complaints and general inquiries to consumer protection agencies in Japan regarding the activities of some
distributors and the associated risks to the company’s business if such increase results in further regulatory scrutiny; (e) regulatory risks associated with the company’s tools and products, which could inhibit the
company’s ability to market a tool or product in a market if it is determined to be a medical device in any market, if distributors make unauthorized claims that would cause such products to be classified as drugs, or if the company is unable to obtain necessary product registrations in a timely manner; (f) continued regulatory
scrutiny and investigations in Mainland China, which have from time to time in the past, and could in the future, negatively impact the company’s business, including the interruption of sales activities in stores, loss of
licenses, and the imposition of fines; (g) any failure of current or planned initiatives or products to generate interest among distributors and customers and generate sponsoring and selling activities on a sustained basis; (h) any failure of the implementation of business transformation initiatives to reduce overhead and drive
growth, and any negative impact of such initiatives on the company’s ability to effectively manage its operations; (i) adverse publicity related to the company’s business, products, industry or any legal actions or
complaints by distributors or others; (j) any prospective or retrospective increases in duties on our products imported into our markets outside of the United States and any adverse results of tax audits or unfavorable changes to tax laws in our various markets; and (k) continued competitive pressures in the company’s
markets. The company’s financial performance and the forward-looking statements contained herein are further qualified by a detailed discussion of associated risks set forth in the documents filed by the company
with the Securities and Exchange Commission. The forward-looking statements set forth the company’s beliefs as of the date of this release, and the company assumes no duty to update the forward-looking statements contained in this release to reflect any change except as required by law.
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