Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Q1 FY2013 Earnings Presentation
25 slides from Prestige Consumer Healthcare's earnings presentation, Aug 7, 2012
Slide 1: Review of First Quarter F'13 Results
1 August 7, 2012 Review of First Quarter F’13 Results Matthew M. Mannelly, CEO Ronald M. Lombardi, CFO Exhibit 99.2
Slide 2: Safe Harbor Disclosure
2 This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s growth strategies, investments in advertising and promotion, market position, product introductions and innovations, an
Slide 3: Agenda
3 FY’12 Q4: A Stellar Quarter Q1 FY2013: Performance Highlights Q1 FY2013: Financial Overview Prestige’s Strategy: Delivering Results; Poised for Success 1 2 3 Agenda 4 Delivering Against a Proven Value Creation Strategy
Slide 4: Tested Shareholder Value Creation Framework
4 OTC M&A Focus Strong FCF Resulting in Debt Reduction Drive Core OTC Growth A&P Driven Growth for Core OTC Brands Investment in Multi-Year New Product Development Pipeline Select investment in Other Brands High Conversion of EBITDA to Free Cash Flow Free Cash Flow Used for Rapid Debt Pay
Slide 5: Q1 FY2013: Delivering Against Stated Strategy
5 Core OTC organic net revenue growth of 3.7%(1) Core OTC consumption growth of 6.9% in L-12 weeks compared to category of (1.4%)(2) Core OTC A&P of 16.0% of net revenue(1) Cash flow from operations excluding TSA impact of $28.5 million On track with ~$110 million target for full year Le
Slide 6: Q1 FY2013: Financial Profile Tracking to Transformed Prestige
6 Q1 FY2013: Financial Profile Tracking to Transformed Prestige Q4 F’12 Presentation OTC as % of Revenue ~85% ~86% Gross Margin ~57% ~57% A&P Spending ~15% ~14% EBITDA Margin ~34% ~35% Free Cash Flow ~$110 MM Annual On-Track Note: (1) The table includes both GAAP and non-GAAP information including a
Slide 7: Q1 FY2013: Performance Highlights
7 Delivering Against a Proven Value Creation Strategy Q1 FY2013: Performance Highlights Q1 FY2013: Financial Overview Prestige’s Strategy: Delivering Results; Poised for Success 1 2 3 Agenda 4
Slide 8: Q1 FY2013 Performance Highlights
8 Strong financial performance for the quarter − Record Q1 consolidated adjusted net revenue of $147.4 million, up 54.7% − Financial profile, including GSK, in line with expectations; Gross margin expansion of ~500bps − Adjusted EPS(1) of $0.35, up 52.2% versus prior year corresponding quarter − A
Slide 9: Eight Straight Quarters of Organic Core OTC Growth
9 Applicable quarter Prior year comparable quarter Dollar values in millions Note: Excludes acquired GSK brands (1) Q4 FY’12 and Q1 FY’13 prior year comparable quarter includes Blacksmith Brands and Dramamine Net Revenue YOY % Growth Eight Straight Quarters of Organic Core OTC Growth Excluding Acqui
Slide 10: Eight Straight Quarters of Category Outperformance and Market Share Gains
10 Eight Straight Quarters of Category Outperformance and Market Share Gains… Category Source: Latest 12-week IRI FDMx retail dollar sales growth for relevant quarter Note: Data reflects retail dollar sales percentage growth versus prior period (1) Dramamine added beginning in Q3 ‘11 (2) Acquired GS
Slide 11: Driven by Increased & More Effective A&P
11 Note: Excludes acquired GSK brands (1) Adjusted in FY’11 to reflect normalized level of A&P spending for PediaCare, which was acquired on 11/1/10 …Driven by Increased & More Effective A&P Core OTC Total Company (1) A&P Spending (% of Revenue) Current TV Campaigns
Slide 12: Increased Support for GSK Core Brands
12 In Q1, significantly increased advertising for the BC/Goody’s rivalry campaign featuring Richard Petty and Trace Atkins The campaign highlights BC / Goody’s unique delivery system and Whether a consumer is loyal to BC or to Goody’s, both offer fast pain relief Increased Support for GSK Core
Slide 13: GSK TSA Transition Completed on Schedule
13 GSK TSA Transition Completed on Schedule = Completed During Q4 FY’12 Brand Building Logistics / Supply Chain HR Develop FY’13 brand strategies, sales quotas and fiscal plan Conduct joint business planning with retail customers for GSK products Select Canadian distributor Finalize contract
Slide 14: Q1 FY2013: Financial Overview
14 Delivering Against Proven Value Creation Strategy Q1 FY2013: Performance Highlights Financial Overview Prestige’s Strategy: Delivering Results; Poised for Success 1 2 3 Agenda 4 Q1 FY2013: Financial Overview
Slide 15: Summary Financial Performance
15 Summary Financial Performance Dollar values in millions, except per share data Notes: (1) Reported net revenue for Q1 FY’13 was $147.0 million. Adjusted net revenue for Q1 FY’13 was $147.4 million and excludes trans ition related slotting costs of ~$400k (2) These non-GAAP financial measures are
Slide 16: Q1 Consolidated Financial Summary
16 Adjusted Net Revenue grew by $52.1 million, or 54.7%, over year ago, driven by core OTC growth and acquisition of GSK brands – 3.7% growth in core OTC, excluding core GSK brands – GSK brands acquisition added $52.0 million Household revenue declined by 13.6% as a result of changes in the timi
Slide 17: Net Income and EPS Reconciliation
17 Net Income and EPS Reconciliation Dollar values in millions, except per share data Note: These Non-GAAP financial measures are being reconciled to their reported GAAP amounts. For Further information about Non-GAAP financial measures, refer to our Earnings Release in the “About Non-GAAP Financial
Slide 18: Debt Profile & Financial Compliance
18 Debt Profile & Financial Compliance: Total Net Debt at 6/30/12 of $1,103 million comprised of: – Cash on hand of $4.4 million – $590 million of term loan – $500 million of bonds – $17 million of revolver Leverage ratio(1) of ~4.75x down, from ~5.25x immediately following GSK acquisition Con
Slide 19: Significant Acquisition Capacity in Place While We Continue to Rapidly Delever
19 Significant Acquisition Capacity in Place While We Continue to Rapidly Delever Leverage Ratio(1) Illustrative Financial Capacity ~$1.0 BN ~$1.7BN = Guidance at time of GSK acquisition = Reported Note: (1) Leverage ratio reflects net debt / covenant defined EBITDA Prestige’s high cash flow conve
Slide 20: Prestige's Strategy: Delivering Results; Poised for Success
20 Delivering Against Proven Value Creation Strategy Q1 FY2013: Performance Highlights Q1 FY2013: Financial Overview Prestige’s Strategy: Delivering Results; Poised for Success 1 2 3 Agenda 4 ’ ;
Slide 21: What Sets Prestige Apart: Delivering Value Now and Into the Future
21 What Sets Prestige Apart: Delivering Value Now and Into the Future #1 and #2 brands deliver nearly two-thirds of OTC revenue Core OTC brands generating superior growth and market share gains Scale platforms in highly relevant OTC categories Leading margins and strong cash flow generation
Slide 22: Now the Largest Independent U.S. OTC Platform
22 In Less Than Three Years, Prestige is Now the Largest Independent U.S. OTC Platform 22 #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11 #12 #13 #14 #15 #16 #17 #18 #19 #20 #21 2011 Rank: + 2.5x in Less Than Three Years + 5 Spots Independent OTC Companies Legacy Dollar values in billions Source: Euromonitor Not
Slide 23: Clear Goals for FY'13
23 Clear goals for FY’13 to build on success and momentum − Successfully integrate and transition the acquired brands • Supply and demand • Integration continues beyond end of TSA − Continue to invest in and drive core OTC brands − Develop long-term potential of acquired GSK brands through brand i
Slide 24: Tested Shareholder Value Creation Framework
24 A&P Driven Growth for Core OTC Brands Investment in Multi-Year New Product Development Pipeline Select investment in Other Brands High Conversion of EBITDA to Free Cash Flow Free Cash Flow Used for Rapid Debt Paydown Significant Tax Shield Incremental to Free Cash Flow Generation Pr
Slide 25: ee Bs,
ee Bs, PrestigeBrands
Prestige Brands Holdings — Q1 FY2013 Earnings Presentation on 6ix