Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Barclays Global Consumer Staples Conference 2015
32 slides from Spectrum Brands's conference presentation, Sep 9, 2015
Slide 1: Presentation to Barclays Global Consumer Staples Conference
Presentation to Hardware &Home Improvement Global Batteries & Appliances Pet, Home& Garden GlobalAuto Care Barclays Global Consumer Staples ConferenceBoston – September 9, 2015 Dave Prichard Vice President, Investor Relations Doug Martin EVP & Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements * Certain matters discussed in this presentation, with the exception of historical matters, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding ou
Slide 3: Reconciliation of Non-GAAP Financial Measurements
Reconciliation of Non-GAAP Financial Measurements * Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Excluding the impact of current exchange ra
Slide 4: Spectrum Brands Overview
Spectrum Brands Overview A global consumer products company offering an expanding portfolio of leading brands providing superior value to consumers and customers every day Includes ~$33m of net sales and ~$12m of EBITDA of IDQ Acquisition Corporation (“IDQ”) from 1/1/2014 to 3/16/2014, which are not
Slide 5: Spectrum Brands Highlights
Spectrum Brands Highlights * The Spectrum Value Model drivesadjusted EBITDA growth. FY14 net sales of $4,429 million and adjusted EBITDA of $724 millionTop 3 global market positions in most product categoriesGlobal footprint with presence on 6 continents and products sold in approximately 160 countr
Slide 6: Strong Financial Performance Despite a Challenged Consumer
Strong Financial Performance Despite a Challenged Consumer * Spectrum Brands has generated robust sales and adjusted EBITDA growthboth organically and through acquisitions. Reflects pro forma as if Russell Hobbs merger completed at beginning of respective period.Reflects pro forma as if HHI acquired
Slide 7: Solid Cash Flow Generation
Solid Cash Flow Generation * FY15 adjusted free cash flow is expected to be up to $440 million, or nearly $8 per shareFY14 free cash flow was $359 million, or $6.75 per shareFY13 adjusted free cash flow was $254 million, or approximately $5 per share Reflects pro forma as if Russell Hobbs merger com
Slide 8: Strong Cash Flow and Value Creation Flexibility
Strong Cash Flow and Value Creation Flexibility * 2015-2018 Operating Cash Flow = ~$2.0 Billion(a) ($ in billions) Pay down debtAcquisitionsShare repurchasesFurther increase dividends Uncommitted Cash Optionality Excludes Armored AutoGroup acquisition.
Slide 9: FY14 Net Sales by Geographic Region
FY14 Net Sales by Geographic Region *
Slide 10: Leading Market Share and Strong, Attractive Brands
Category Estimated Market Position Selected Key Brands Leading Market Share and Strong, Attractive Brands #1 (North America Appearance)#1 (North America Refrigerants)#2 (North America Fuel & Oil Additives) Auto Care Products #3 (North America)#2 (Europe)#1 (Latin America)#2 (North America, Europe, L
Slide 11: Spectrum Value Model
Spectrum Value ModelPlatform For Lasting Customer Relations * VISION …superior value consumer products for everyday use Be the leader in retailer metrics with… Superior Value INNOVATIONfromGlobal Operations SALES GROWTHwithRegional Sales EFFICIENCYfromShared Services
Slide 12: Spectrum First 3x3 Growth Accelerators
Spectrum First 3x3 Growth AcceleratorsEvolution of Value Model to Advance to the Top Tier * Alignment & creativity Retention & collaboration Trust, competence & speed Above market sales growth Lower expense ratio Margin enhancement Total cost reduction Bring consumer to store Convert interest to sal
Slide 13: Supporting Long-term Growth Through Synergistic Bolt-on Acquisitions
Supporting Long-term Growth ThroughSynergistic Bolt-on Acquisitions Spectrum Brands continually evaluates synergistic, bolt-on acquisitions to expandits product lines, extend market penetration and grow its geographic footprint. * KEY ACQUISITION PRIORITIES Global Pet Supplies Home & Garden Hardware
Slide 14: Successful Track Record of Acquisition Integration/Delevering
Successful Track Record of Acquisition Integration/Delevering * Strong free cash flow used to manage capital structure and drive valueProven integrator – Russell Hobbs, HHI, FURminator, Black Flag/TAT, Tong Lung, Liquid Fence, Tell, Salix, IAMS/Eukanuba Reflects pro forma as if Russell Hobbs merger
Slide 15: Global Auto Care
* Pro Forma Adjusted EBITDA Performance ($ in millions) Global Auto Care Market-leading auto care brands, including Armor All, STP and A/C PROArmor All and STP enjoy 32% and 19% unaided brand awareness while A/C PRO holds 73% market share in the North America DIY refrigerant categoryHistory of innov
Slide 16: Transaction Rationale
Transaction Rationale Key Brands and Products Substantially increases Spectrum Brands’ scale and product diversification with new category of DIY auto care Adds a portfolio of market-leading brands to Spectrum Brands’ existing, attractive lineupImproves customer mix with unmatched shelf space in com
Slide 17: Substantially Increases Margin and Product Diversification
Substantially Increases Spectrum Brands’ Margin and Product Diversification * ($ in millions) LTM Q2 2015 Net Sales LTM Q2 2015 Adj. EBITDA +9.5% +18.7% Financial Scale – LTM Q2 2015(a)(b) Product Diversification by Net Sales Pre-transaction Post-transaction Standalone SPB performance pro forma for
Slide 18: Global Shared Services, ERP and Centers of Excellence
Global Shared Services, ERP and Centers of Excellence * Cost &Efficiency Commercial /CustomerFocus
Slide 19: Fiscal 2015 Outlook
Fiscal 2015 Outlook * Planning for 6th consecutive year of record performance Reported sales growth in the mid-single digit rangeContinued cost improvement disciplineFX headwindsAdjusted free cash flow is projected to be up to $440 million
Slide 20: Hardware &Home Improvement Global Batteries & Appliances Pet, Home& Garden GlobalAuto Care www.spectrumbrands.cominve…
Hardware &Home Improvement Global Batteries & Appliances Pet, Home& Garden GlobalAuto Care NYSE: SPB www.spectrumbrands.cominvestorrelations@spectrumbrands.comdavid.prichard@spectrumbrands.com
Slide 21: Appendix
Hardware &Home Improvement Global Batteries & Appliances Pet, Home& Garden GlobalAuto Care Appendix
Slide 22: Long and Successful History of Acquisitions
* Long and Successful History of Acquisitions 1999 2002 2003 2004 2010 2011 2012 2015 2014 Initial Public OfferingNOV 1997 Rayovac Reacquires Majority of Latin America Brand (ROV Limited)AUG 1999 AcquisitionJAN 2015 European PetFood AcquisitionDEC 2014 AcquisitionOCT 2014 AcquisitionMAY 2015 2013
Slide 23: Hardware & Home Improvement Overview
Hardware & Home Improvement Overview * Ten consecutive quarters of YOY net sales and adjusted EBITDA increases since December 17, 2012 acquisitionLeading provider of residential locksets, builders hardware and plumbing and accessories Diversified product portfolio with well-recognized brands charact
Slide 24: Global Batteries & Appliances Overview
Adjusted EBITDA Performance ($ in millions) Reflects pro forma as if Russell Hobbs merger completed at beginning of respective period. (a) (a) Global Batteries & Appliances Overview * Value brands appeal to consumersCapitalizing on platform with innovation and a stream of new product launchesStrong
Slide 25: Global Pet Supplies Overview
Global Pet Supplies Overview * FY14 Net Sales $600M; Adj. EBITDA $113M Adjusted EBITDA Performance ($ in millions) Global Net Sales by Geography (FY14) Net Sales by Segment (FY14)
Slide 26: IAMS/Eukanuba and Salix Acquisitions
IAMS/Eukanuba and Salix Acquisitions IAMS/Eukanuba European premium pet food brands for dogs and cats acquired on December 31, 2014IAMS: premium brand with broad consumer appeal and leadership share of the premium dry dog food market in the U.K.Eukanuba: premium brand in the pet specialty channel Cr
Slide 27: Home & Garden Overview
Home & Garden Overview Another record year in FY14High barriers to entryStrong new product pipeline * FY14 Net Sales $432M; Adj. EBITDA $102M Adjusted EBITDA Performance ($ in millions) Net Sales by Segment (FY14) Drivers of Success
Slide 28: Strong #2 Share in U.S. Retail Home & Garden Pest Control Market
Strong #2 Share in the IndustryU.S. Retail Home & Garden Pest Control Market * Source: Home & Garden Management Estimates H&G Change = +2 pts from 2013 to 2014 $3 Billion Retail Category (2014 Estimate) Source: Home & Garden Management Estimates Home & Garden Share Vendor Market Share Estimate
Slide 29: Financial Snapshot
Financial Snapshot * Reflects pro forma as if Russell Hobbs merger completed at beginning of respective period.Reflects pro forma as if HHI acquired at beginning of respective period. The pre-acquisition earnings and capital expenditures of HHI do not include the TLM Taiwan business as stand alone f
Slide 30: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA *
Slide 31: Reconciliation of Adjusted EBITDA by Segment
Reconciliation of Adjusted EBITDA by Segment * (1) It is the Company’s policy to record income tax expense and interest expense on a consolidated basis. Accordingly, such amounts are not reflected in the operating results of the operating segments.(2) Included within depreciation and amortization is
Slide 32: Spectrum Brands brand logos
Spectrum Brands Global Batteries Pet, Home Hardware Global & Appliances & Home Improvement Auto Care MAVARTA (Russell Hobbs REMINGTON] @\N60e @yilz? GEORGE FOREMAN [/7TERMAID PROSENSE. GE) FORTIS JAF O° sectracine e “PROT REPEL Tei GD Kwiksee GF WEISER. ZLIGHT MARINELAND. em STANLEY ema MRE. BALDWIN
Spectrum Brands Holdings — Barclays Global Consumer Staples Conference 2015 on 6ix