Wd-40 Company · NASDAQ:WDFC
Wd-40 — Q2 FY2023 Earnings Presentation
30 slides from Wd-40's earnings presentation, Apr 6, 2023
Slide 1: Q2 FY23 Earnings Results
Q2 FY23 Earnings Results April 6, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company and its subsidiaries (collectively, the “Company”). The Company markets maintenance products (“MP”) under the WD-40®, 3-IN-ONE® and GT85® brand names. The WD-40 b
Slide 3: Q2 FY23 Results
=| Sa. Q2 FY23 Results
Slide 4: Q2 FY23 Results
Q2 FY23 Results ($ in millions; except EPS, gross profit and % change) Q2 FY23 Q2 FY22 % Change Net Sales $130.2 $130.0 0% Gross Profit (%) 50.8% 50.4% 40 bps Operating Income $22.2 $24.7 -10% Net Income $16.5 $19.5 -15% EPS (Diluted) $1.21 $1.41 -14% • Changes in foreign currency exchange rates had
Slide 5: Foreign Currency Impact
Foreign Currency Impact Transaction Translation Impact Impact Transaction currency Functional currency Currency in which sales, Main currency in which Reporting currency costs, expenses are subsidiaries conduct As a U.S. based company transacted; typically the business; typically the same the report
Slide 6: Additional Foreign Currency Exchange Impact
Additional Foreign Currency Exchange Impact Q2 FY23 Net Sales (In millions) $1.9 -$5.5 In total changes in FX rates decreased net sales by ~$3.6M $133.8 $130.2 in Q2 FY23 Q2 FY23 Net Sales at Transaction Translation Q2 FY23 Net Sales Q2 FY22 FX Rates Impact Impact As Reported 6
Slide 7: Price-Volume Impact – Consolidated Net Sales Changes
Price-Volume Impact – Consolidated Net Sales Changes Changes from Prior Year Fiscal Period ($ in millions) Q1 FY23 Q2 FY23 Year to Date Increase in average selling price(1) $ 26.2 $ 24.0 $ 50.2 Decrease in sales volume(1) – Russian markets $ (5.0) $ (3.3) $ (8.3) Decrease in sales volume(1) – All ot
Slide 8: Americas Segment
Americas Segment Americas Net Sales Americas – Q2 FY23 vs. Q2 FY22 (in millions) $62.9 • Total reported segment sales ▲ 15% $3.8 $54.5 • Segment made up 48% of global sales $4.1 • Maintenance product sales ▲ 17% • WD-40 Specialist sales ▲ 10% • HCCP sales ▼ 8% $59.1 $50.4 • Maintenance Product (MP)
Slide 9: EMEA Segment
EMEA Segment EMEA – Q2 FY23 vs. Q2 FY22 • Total reported segment sales ▼ 13% • Segment made up 36% of global sales $54.1 • Maintenance product sales ▼ 15% $46.8 • WD-40 Specialist sales ▲ 4% • HCCP sales ▲ 25% • In constant currency (GBP) sales ▼ 4% • EMEA direct market sales ▼ 2% • 74% of segment s
Slide 10: Asia-Pacific Segment
Asia-Pacific Segment Asia-Pacific – Q2 FY23 vs. Q2 FY22 • Total reported Asia-Pacific sales ▼ 4% $21.4 • Segment made up 16% of global sales $20.5 • Maintenance product sales ▼ 4% • WD-40 Specialist sales ▼ 6% • HCCP sales ▼ 8% • Australia sales ▲ 6% • In functional currency (AUD) sales ▲ 10% • Chin
Slide 11: Growth Aspirations
Growth Aspirations 1 1
Slide 12: 2025 Growth Aspirations
2025 Growth Aspirations FY 2012 FY 2022 2025 Growth Aspirations Reported Revenue Reported Revenue Anticipated Revenue Target $343M $519M $650M – $700M(1) $262M $399M ~$525M $5M $76M $60M $60M ~$125M ~$50M Revenue Generated by WD-40® Multi-Use Product Revenue Generated by WD-40 Specialist® (2) Revenu
Slide 13: Long-Term Growth Ambition by Segment
Long-Term Growth Ambition by Segment Americas EMEA Asia-Pacific Total Company 47% of global 39% of global 14% of global sales* sales* sales* Targeting a compound annual Targeting a Targeting a Targeting a growth in the compound annual compound annual compound annual mid-to-high growth rate of growth
Slide 14: Must-Win Battles
Must-Win Battles 1 4
Slide 15: Must-Win Battle #1 - Geographic Expansion
Must-Win Battle #1 - Geographic Expansion We estimate the potential global market opportunity for WD-40 Multi-Use Product to be ~$1B (1) $100 China Americas Indonesia EMEA India Asia-Pacific Saudi Japan Germany Arabia Opportunity (in millions) Turkey South United Korea States Egypt Thailand Brazil N
Slide 16: Must-Win Battle #2 - Premiumization
Must-Win Battle #2 - Premiumization • At the end of FY22, sales of premiumized products totaled $188M representing 47% of WD-40® Multi-Use Product global sales • Our objective is to grow premiumized products to >60% of WD-40® Multi- Use Product global sales Next Generation EZ-Reach® Classic Can Smar
Slide 17: Must-Win Battle #3 – WD-40 Specialist
Must-Win Battle #3 – WD-40 Specialist Our new WD-40 Specialist® packaging creates a stronger brand presence for both WD-40® Multi-Use Product and WD-40 Specialist®, aligning them as the blue and yellow brand with the little red top 17
Slide 18: WD-40 Specialist Degreaser and Cleaner EZ-Pods
WD-40 Specialist® Degreaser and Cleaner EZ- Pods • Tailored product for degreasing on-the- go • Concentrated, industrial-strength formula • Designed with sustainability in mind • Improves transportation and storage efficiency and costs • When used as intended, reduces plastic use • Recyclable packag
Slide 19: Must-Win Battle #4 – Digital Commerce
Must-Win Battle #4 – Digital Commerce Our global digital ambition is to engage with end-users at scale, becoming the global leader in our category on the digital platforms they use, making it easy to access, learn about, and purchase our brands online. Creating positive lasting memories….ONLINE 19
Slide 20: 55/30/25 Business Model
55/30/25 Business Model 2 0
Slide 21: Gross Margin
Gross Margin Gross Margin vs. Prior Year Q2 FY23 Q2 FY22 Gross margin improved by 40 basis points Y-O-Y 50.8% 50.4% primarily due to the following favorable impacts: Change vs. Prior Gross Margin Trend Gross Margin Drivers Year (basis points) Price Increases +910 bps 50.8% 50.4% 51.4% 50.8% Changes
Slide 22: What Makes Up the Cost of a Can?
What Makes Up the Cost of a Can? Approximate Cost Breakdown of a Typical Can of WD-40 MUP Manufactured in the United States FY22 Corrugate Plastic Specialty Chemicals Manufacturing Fees Tin-Plate Can Data as of August 2022. Represents average input costs over 6-month period of a typical 12 ounce can
Slide 23: Cost of Doing Business
Cost of Doing Business • Q2 FY23 cost of doing business was 33%, up from 30% compared to Q2 FY22 • Cost of doing business comes from three primary areas: • People costs, including earned incentive accruals • Marketing, advertising and promotion • Freight costs to get products to customers • Investme
Slide 24: 55/30/25 Results
55/30/25 Results Target Q2 FY23 Q2 FY22 Q2 FY21 55/30/25 Business Model Actuals Actuals Actuals Gross Margin 55% 51% 50% 55% Cost of Doing Business (1) 30% 33% 30% 36% (1) EBITDA 25% 19% 21% 20% 1) See appendix for descriptions and reconciliations of these non-GAAP measures. Note: Percentages may no
Slide 25: Guidance
Guidance 2 5
Slide 26: Updated Fiscal Year 2023 Guidance
Updated Fiscal Year 2023 Guidance Sales Growth Between 3.5% and 7.5% Net Sales Between $535 and $560 million Gross Margin Between 51% and 52% A&P Investment Between 5.0% and 5.5% of net sales Provision for Income Tax Around 21% Net Income Between $64.5 and $68.5 million Diluted EPS Between $4.80 and
Slide 27: Appendix
= Sa Appendix
Slide 28: Foreign Currency Translation Impact or “Constant Currency”
Foreign Currency Translation Impact or “Constant Currency” ($ in millions; except EPS, gross profit and % change) Financial Results As reported Q2 FY23 Q2 FY22 % Change Net Sales $130.2 $130.0 0% Gross Profit (%) 50.8% 50.4% 40 bps Operating Income $22.2 $24.7 -10% Net Income $16.5 $19.5 -15% EPS (D
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation This presentation contains certain non-GAAP (generally accepted accounting principles in the United States of America) measures, that our management believes provide our stockholders with additional insights into WD-40 Company’s results of operations and how it runs its busin
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