Breadon William Hollis Diana James Mark Johnston Charles Executive Summary About Leading designer developer and marketer of innovative technologybased educational products and related content ID: 329598
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Slide1
Leapfrog Enterprises
Breadon, WilliamHollis, DianaJames, MarkJohnston, CharlesSlide2
Executive Summary
About Leading designer, developer and marketer of innovative, technology-based educational products and related content. LeapFrog is 100% focused on developing products that will provide the most engaging, effective learning experience - for all ages, in school or home, around the world. Founded in 1995 by Michael Wood and Robert Lally. Employs over 550 full and part-time employees.Slide3
Mission
“Helping kids to learn how to read.”Slide4
Products
LeapPad Ultra (4-9 yrs.)LeapPad2 Power (3-9 yrs.)LeapPad2 (3-9 yrs.)LeapsterGS (4-9 yrs.)Leapster
Explorer (4-9 yrs.)
LeapReader
(4-8 yrs.)
Tag (4-8 yrs.)
App Toys (3-6 yrs.)
Learning Toys (0-4 yrs.)
iPhone®/iPad® Apps (2-5 yrs.)Slide5
SWOT AnalysisSlide6
Marketing Impact
LeapPad is following the basic marketing plan as the Apple IPad. They intend on developing a pad that is aimed at children ages 4 to12.Strategy: Sell the cheapest tablet on market, for $100.
Focus on children ages
4
to 7.
Develop and sell accessories for the
LeapPad
unit.Sell hundreds of apps for units.Slide7
Marketing Impact
Third-party apps allowed in 2011. Available apps doubled on their store.LeapFrog’s marketing focuses on the concept of “connecting with more carefully selected customers.” Slide8
Marketing Impact
Stiff competition, specially from Mattel Power Touch Pad.Closed environment, very proprietary.More diversification to hinder competition.Slide9
Marketing Impact
In June 29, 2011, LeapFrog introduced the LeapPad Explorer, a personalized learning tablet for children aged 4 to 9. The LeapPad Explorer pre-sale units sold out in the first two weeks. LeapPad hit shelves on August 15, 2011
2013
LeapFrog
app to be available for the
IPad
and IPhone. Slide10
Stakeholders
15% of shares held by all insider and 5% owners75 % of shares held by institutional & mutual fund owners89 % of float held by institutional & mutual fund owners Slide11
ShareholdersSlide12
Current Marketing Strategy
Global initiative ‘We Give Books’Facebook campaign "Read 20 Minutes A Day" Expand the impact from 150k to 2MSlide13
Financial Reports
LeapFrog (5 year) revenue model:Slide14
Financial Reports
LeapFrog (10 Year) Stock price:Slide15
Financial Performance
$ in
millions (except per share data
)
2009
2010
2011
2012
2009-2012
Net Sales
$380
$433
$455
$581
15% CAGR
U.S. Segment Net Sales
$307
$344
$342
$425
11% CAGR
International Net Sales
$73
$88
$113
$156
29% CAGR
Operating Income (Loss)
($8)
$8
$24
$64
$
72
Operating Margin
(2%)
2%
5%
11%
13 Points
Net Income (Loss) ($3)$5 $20 $86 $89EPS (Loss) ($0.04)$0.08 $0.03 $1.24 $1.28 Normalized EPS (Loss)*($0.10)$0.06 $0.18 $0.56 $0.66 Adjusted EBITDA* $23 $34 $49 $93 60% CAGRCash & Equivalents $62 $19 $72 $120 25% CAGRDebt $0 $0 $0 $0 N/A
*Normalized EPS (Loss) and Adjusted EBITDA are non‐GAAP financial measures. Please see the following pages
for a discussion of these measures and their reconciliation to the most appropriate GAAP measure
.
**CAGR - Compound Annual Growth RateSlide16
Strategic Recommendation
Today’s SituationSlow market growth.Increased apps and accessories for LeapPad.Reaching out to children 4- 7 years oldCompetition with other tablet and smartphones.Launching app for iPad and iPhone in 2013.Slide17
Strategic Recommendation
How we got hereLosses from 2005 to 2011.Competition with Mattel.Introduction of LeapPad Explorer in 2011.Development of 3rd party apps in 2011.Expanded content and games in 2012.Agreements with children educational content companies including Sesame Workshop. Slide18
Strategy Recommendation
Addition of card readers and WIFI.Cloud storage for LeapPad products.More parental controlsCompatibility with multiple platforms.Continue development of technology to keep up.Slide19
Strategy Recommendation
Establish more brand recognition.Engage costumers directly.Addition of other language and cultures for international market.Build relationships with teachers, families and caregivers.Slide20
Questions?
Thank you!