Nu Skin Enterprises, Inc.

During today's presentation, comments will be made that include forward-looking statements. These statements involve risks and uncertainties, and actual results may differ materially from those discussed or anticipated. For a complete discussion of these risks, please refer to the earnings release that we issued yesterday or to our Form 10-K that we filed with the SEC this morning. Also during today's presentation, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements. We believe these non-GAAP financial numbers assist in comparing period-to-period results. Please refer to our investor relations page at ir.newskin.com for any required reconciliation of non-GAAP numbers.

Hello, everybody. I'm Ruth Todd, Senior Vice President of Global Public Affairs, and on behalf of our entire team, we welcome you to New Skin Investor Day 2021. Thank you so much for joining us. Thank you for joining us virtually today. Like many companies around the world, we began 2020 with great optimism and a plan to return our business to growth by the second half of the year. But humans are resilient. And if history teaches us anything, it's that together, people find a way forward. Even in the wake of tragedy around us and losing some of our own new skin family, our management team has been inspired by stories all around the world of courage, kindness, and resilience among people. And we've been equally moved by the humanity of our own global employees and sales leaders who have rallied together to take care of others all while keeping our businesses Growing and thriving. It's been remarkable. I think I speak for our entire management team when I say we are in awe at the goodness of our global team. Indeed, they embody Nu Skin's mission to be a force for good, and we thank them. Now, on to the business of today. Our leadership is going to share with you our vision for the coming year and beyond. We will outline the strategies that will help us achieve this vision, such as expanding our growth strategy of products, I'm sure you've seen our announcement. Rich will begin the process of transitioning the CEO position to our president, Ryan Napierski, later this year. Thank you so much for joining us. We are confident because he has been so well prepared as a key successor for this role. He has more than 25 years with the company, during which time he has earned the trust of our sales leaders and has acquired an in-depth understanding of their needs. He has held leadership positions while living abroad in Europe and Asia for more than a decade, which gave him deep insight into our global business. He's been mentored by other great leaders and has worked side-by-side with Rich, executing our growth strategy over the past several years. And on top of all of that, Ryan has great vision, leadership, and integrity, and he is ready to lead Nu Skin into its next chapter. Ryan will then go into some more detail on the strategies we're putting in place to accomplish goals for growth, particularly in the areas of innovative products, global programs, and digital platforms. He will also introduce you to some experts we have in some of those areas. And then Mark Lawrence, our Chief Financial Officer, will walk you through details of our Q4 and 2020 performance and share our modeling and guidance going forward. After that, we'll take a short break and finish up the day with some Q&A. So with all of that, let's welcome Rich Wood.

Thank you, Ruth, and thanks to each of you for joining us today. We're grateful to you and are excited to share our vision of the future with you. I'd like to start off by echoing Ruth's sentiments on our heroic efforts and resiliency we have seen this past year in our community. It has been especially gratifying to me to see the strength of our global Nu Skin family as we have rallied together to face this challenge. Together, we have cared for the most vulnerable among us. and have taken steps to safeguard the health and lives of our employees and sales leaders. Through it all, we've also found a way to continue providing products that combine the best of science and nature and technology in new innovative ways to consumers everywhere. As you saw in our releases yesterday alongside our financial results, we also announced a management transition where Ryan Napierski will assume the roles of President and CEO on September 1st. Congratulations, Ryan, on this well-deserved appointment. We have worked together for 25 years and very closely in senior leadership roles for the past 15. But much more than that, he's always been and will always be a close friend of mine. I truly feel like we have the right leadership and strategy in place to move the business into the future. With a strong foundation in place, and as I recently celebrated my 30th year with Nu Skin, It is a perfect time for me to retire and pass the mantle of leadership as I remain closely involved with the company through early 2022 to aid in a smooth transition. Ryan is the right person to take this company to the next level. He knows our business better than anyone, and he understands how to grow it, and more importantly, how to improve lives all over the world as we have been doing for nearly four decades. As Ryan and I have worked together in our current roles for the past four years, we've developed a vision and growth strategy together, and it is centered on attracting and retaining customers, really focusing on being a customer-obsessed organization and providing opportunity for all. We've made significant changes around our sales incentive structure, pricing, technology, product pipeline, and leveraging social commerce. I am pleased with the progress we've made over the last several years. For example, our focus on customer growth has empowered our affiliates to attract many more customers to our products and our business. To accomplish this, we first and foremost have continued Nu Skin's history of developing effective and innovative products that help people look and feel their best. Then, we've placed A great emphasis on delivering products through digitally-enabled social commerce platforms. This has led to growth in our active customer base from 980,000 in Q1 of 2017 to 1,560,000 in Q4 of 2020. That's growth of nearly 60% over this four-year period. We've also focused on making adjustments in our business to appeal to a wider customer base and specifically attracting a younger demographic of customers and brand affiliates. We identified the gig economy and this younger demographic as key to our ability to accelerate growth into the future. We've been successful in engaging with younger customers as we've reduced the average age of our customer by five years, which has also attracted a younger sales leader to the business. This younger demographic and a relentless customer focus will be the key to powering the company's future growth. In addition, we've made a concerted strategic effort to achieve greater balance in our geographic profile of our business. We believe this positions us to drive more consistent and sustained revenue growth in the future. I would like to recognize our management teams and sales leaders in the West who have provided visionary leadership in these key regions to shift the balance of our geographic profile over the past four years. Note that our mainland China business now accounts for 23% of our revenue, compared to 28% four years ago. And with our west region, together with our manufacturing segment, now accounting for 38% today, compared to 21% four years ago. We've added manufacturing revenue and strategic investments intended to secure our supply chain. We've experienced significant benefits from these manufacturing assets and talents as the agility and flexibility of our supply chain have been particularly valuable with the disruptions caused by COVID. Mark will talk a little more to our continued investments in this segment, which currently account for 6% of our revenue, And we believe they will be a key enabler to our future growth. Execution of our strategic vision generated great results and momentum for our business in 2020. For the fourth quarter, strong customer and sales leader growth drove our largest quarterly revenue in seven years and helped us achieve $1.40 in earnings per share. That's 94% growth. We are benefiting from growth and profit in the U.S., which has lowered our overall tax rate. I'm particularly pleased with the sequential improvement in sales leaders, which will support continued growth as we move forward. Our strong fourth quarter results benefited from successful, limited product introductions of both the new Boost device and Nutri-Essential. These products are launching in the first half of 2021, and we anticipate they will continue to help us grow. The West continued to power our growth, But I'm particularly pleased that we were able to report growth in each reporting segment in the fourth quarter, including mainland China, as we had projected. We benefited from a weaker U.S. dollar in the fourth quarter and anticipate this will continue to provide some benefit in 2021. For the year, our strategic focus and continued investment in technology enabled us to grow ahead of plan. As we reported revenue growth of 7% during 2020, and EPS growth of 17%. This performance was all the more impressive considering the uncertainty of the global pandemic. We were able to introduce our latest product innovations as scheduled and for the most part keep our products in stock throughout the year thanks to the strength and adaptability of our global supply chain and investments in manufacturing. More importantly, we have leaned into key areas of our strategy which we believe will accelerate our growth in the future. With our planned improvements in operating margin and strong revenue growth expectations, we believe we can produce double-digit EPS growth going forward. Our confidence in the business is focused on three key points that you will hear throughout our presentation today. Our strategy is focused on growing customers through our three pillars of products, programs, and platforms. A balanced geographic profile will generate more sustainable growth going forward. And third, our ongoing efforts to lead out in sustainability and CSR initiatives. For all these reasons, we are extremely optimistic to deliver a very successful 2021. Our guidance indicates that we anticipate strong growth in both revenue, which we forecast growth between 5% and 9%, more approximately $200 million, and earnings per share growth of 5% to 13%. We have the right strategy, we have the right team, and the global trends are moving in our favor. Before Ryan joins us to lay out our growth strategy, I've asked Ruth to come back up and review our progress and goals related to sustainability, ESG, and our Global Force for Good efforts.