Acco Brands Corporation · NYSE:ACCO
Acco Brands — Q3 2020 Earnings Presentation
18 slides from Acco Brands's earnings presentation, Oct 28, 2020
Slide 1: ACCO Brands 3Q 2020 Earnings Conference Call
ACCO Brands 3Q 2020 Earnings Conference Call October 28, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, including without limitation, statements concerning the
Slide 3: Reg. G – Non-GAAP Financial Measures
Reg. G – Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. We explain how we calculate and use each of these non-GAAP measures and provide a reconciliation of our current period and historical non-GAAP financial measures to the most directly comparable GAAP financia
Slide 4: 3Q 2020 Earnings Summary
3Q 2020 Earnings Summary • Strong performance in EMEA • North America weak back-to-school sell-out; commercial sales Sales/comparable sales down 12% to $444M remain soft • International, especially Latin America, down significantly • Strong growth in Kensington®, TruSens®, Derwent® products offset b
Slide 5: 3Q 2020 Segment Earnings Summary
3Q 2020 Segment Earnings Summary • Sales down from weak back-to-school sell-out due to mostly remote learning; commercial office products sales down North America sales down 12% significantly from COVID-19 impacts • Operating income/adjusted operating income down from lower Operating income down 32%
Slide 6: Segment Results
Segment Results Y/Y Segment Financial Metrics 3Q20 3Q19 $ in millions Change ACCO Brands North America Sales $238.5 $272.4 (12.4)% Comparable Sales (12.2)% 3.5% Adjusted Operating Income $23.2 $35.6 (34.8)% Adjusted Operating Margin 9.7% 13.1% (340) bps ACCO Brands EMEA Sales $136.4 $133.1 2.5% Comp
Slide 7: 3Q 2020 Margin Reconciliation
3Q 2020 Margin Reconciliation 3Q 2020 Change vs. Items of Significant Impact Adjusted Prior Year Bps on Adjusted Results (non-GAAP) Adjusted Gross Profit $127.1 $(28.9) Adverse mix (net of price/cost) (230) Acquisition (10) Gross Margin 28.6% (220) bps Other (10) Net cost reductions 20 FX 10 SG&A $8
Slide 8: 2020 Cash Flow
2020 Cash Flow 2020 2019 Change $ in millions* 3Q20 2Q20 1Q20 YTD YTD vs 2019 Adjusted EBITDA 56 47 37 140 199 (59) Interest (4) (14) (3) (21) (28) 7 Taxes (6) (4) (10) (20) (39) 19 Capital expenditures (3) (2) (7) (12) (22) 10 Working capital and other 52 (65) (41) (54) (32) (22) Pension (4) (3) (6
Slide 9: Capital Structure
Capital Structure Capital structure as of September 30, 2020 No maturities until 2024 ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 124 LIBOR + 200 bps, 37.5 bps unused 2.98% USD Term Loan A 94 U.S. LIBOR3 + 200 bps 3.00% EUR Term Loan A 278 Euro L
Slide 10: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy Priorities • Disciplined capital allocation strategy • Expect to generate more than $100M in FCF in 2020 (at least $120M cash from operations minus less than $20M capex) Capital • Do not intend to repurchase shares for remainder of 2020 Allocation • Long-term
Slide 11: 4Q 2020 Outlook
4Q 2020 Outlook Due to the uncertainty associated with the global economic disruption from the COVID-19 pandemic and related government and business measures, the company withdrew its annual guidance on April 13, 2020. The following outlook is for 4Q. 4Q 2020 Outlook Net Sales1 (15)% to (20)% Adj.
Slide 12: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Our non-GAAP financial measures include the following: Comparable Net Sales: Represents net sales excluding the impact of acquisitions with current-period foreign operation sales translated at prior-year currency rates. We believe comparable net sales are useful to
Slide 13: ACCO Brands Corporation and Subsidiaries
ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) ‘The following tables set forth a of certain C of in with GAAP to Non-GAAP. for the three months ended ‘September 30, 2020 and 2019. “Three Months Ended 3
Slide 14: ACCO Brands Corporation and Subsidiaries
ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) The tables set forth of certain Ce oF Income ‘September 30, 2020 and 2019. reported in accordance with GAAP to adjusted Non-GAAP Information for the nine
Slide 15: Notes to Reconciliation of GAAP to Adjusted Non GAAP Information
co BP Notes to Reconciliation of GAAP to Adjusted Non GAAP Information (Unaudited) Represents the amortization of step-up in the value of y with the C asset in 2019, Represents transaction and integration with the of Indistria Grafica Foroni Lida. ("Foroni") in 2020, and associated with the ‘Cumberl
Slide 16: Reconciliation of Net Income to Adjusted EBITDA
ACCO Brands Corporation and Subsidiaries Reconciliation of Net Income to Adjusted EBITDA (Unaudited) (in millions) able sets forth a oF net income reported in with GAAP to EBITDA, Net income Invemory step-up amortization Transaction and integration expenses ‘Restracturing charges Depreciation Stock-
Slide 17: Supplemental Business Segment Information and Reconciliation
ACCO Brands Corporation and Subsidiaries ‘Supplemental Business Segment Information and Reconciliation (Unaudited) (in millions) 2020 2019 Changes “Raheaat apes Repucted Adjused Operating Reported Adjstes— Opeating Adjuned — Adgett Operating Opening eome Operating Opecanag — Income Opening, Operanng
Slide 18: Supplemental Net Sales Change Analysis
ACCO Brands Corporation and Subsidiaries ‘Supplemental Net Sales Change Analysis (Unaudited) % Change - Net Sales 'S Change - Net Sales (in millions) GAAP ‘New GAAP GAAP ‘Noa-GAAP_ comparable Net Sales | Currency Net Sales |] NetSales | Currency Change | Transtati inition | Change (A) || Change z si