Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Raymond James client presentation, February 2015
37 slides from Prestige Consumer Healthcare's conference presentation, Feb 26, 2015
Slide 1: Presentation to Clients of Raymond James February 2015
Presentation to Clients of Raymond James February 2015 Exhibit 99.1
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 product introductions, geographic expansion, investments in brand building, debt reduction, integration of the Insight
Slide 3: Key Drivers of Long-Term Shareholder Value
3 Key Drivers of Long-Term Shareholder Value Develop a Portfolio of Leading Brands Capitalize on Efficient and Effective Operating Model Deliver Robust and Consistent Free Cash Flow Execute Proven and Repeatable M&A Strategy Portfolio of recognizable brands in attractive consumer health industry
Slide 4: Develop a Portfolio of Leading Brands
4 Develop a Portfolio of Leading Brands 1
Slide 5: A Diversified Portfolio of Well-Known Brands
5 A Diversified Portfolio of Well-Known Brands A Diversified Portfolio Of Well-Known Brands 5 1
Slide 6: Portfolio Strategy Achieving Desired Results
6 Core OTC International Other OTC Household Contribution to Portfolio: # of Brands: Investment: Targeted Mix Over Time(2)(3): Q3 FY 15 % Organic Growth: (Constant Currency Basis)(1) Invest for Growth Manage for Cash Flow Generation 11% 11% ~25% of Total Brands ~75% of Total Brands 63% 15% Portfolio
Slide 7: Demonstrated Ability to Build Brands
7 Demonstrated Ability to Build Brands Product Innovation A&P Investment Consumption Change 10.9% 9.3% 15.7% 5.4% 1.4% 4.9% 3 Yr* 52 Weeks** 12 Weeks** Source: IRI multi-outlet retail dollar sales growth for relevant period. * Represents change over 3 most recently reported Fiscal Years ** Represent
Slide 8: Demonstrated Ability to Build Brands
8 Demonstrated Ability to Build Brands Product Innovation A&P Investment Consumption Change 21.7% 9.9% 7.1% 14.8% 7.8% 4.8% 3 Yr* 52 Weeks** 12 Weeks** Source: IRI multi-outlet retail dollar sales growth for relevant period. * Represents change over 3 most recently reported Fiscal Years ** Represent
Slide 9: The Consumer Journey: Initiatives to Restore Leadership
9 The Consumer Journey 6 Initiatives to Restore Leadership Historical Consumer Trends Doctor visit essential at time of first infection Treatment options: Rx (generic) or OTC (Monistat or private label) 70% of patients use what doctor recommends Elimination of HCP Marketing Rx has outpaced M
Slide 10: Demonstrated Ability to Build Brands
10 Demonstrated Ability to Build Brands Consumption Change Product Innovation A&P Investment Multi-year agreement with Dale Earnhardt, Jr. for the NASCAR XFINITY Series 7.5% 2.6% 5.1% 0.9% 1.5% 4.4% 3 Yr* 52 Weeks** 12 Weeks** Source: IRI multi-outlet retail dollar sales growth for relevant period.
Slide 11: Core OTC Consumption Growth Has Accelerated
11 Core OTC Consumption Growth Has Accelerated, Contributing to Sustained Sales Momentum Consumption Growth Organic Sales Growth (1.8%) 1.0% 1.6% 0.8% 3.9% 5.5% Q1 Q2 Q3 (5.0%) (4.2%) 2.8% (2.4%) 0.0% 8.3% Q1 Q2 Q3 FY 15 Core OTC, excludes Insight Pharmaceuticals. Source: IRI multi-outlet retail dol
Slide 12: International Markets Gaining Importance
12 10% 90% International Markets Gaining Importance 2014 2011 Distributor model Predominantly established markets Local operations in Australia and New Zealand Beachhead for attractive region Attractive growth profile International Business Has Grown from ~$35MM to ~$110MM(2) in Last Three
Slide 13: Capitalize on Efficient and Effective Operating Model
13 Capitalize on Efficient and Effective Operating Model 2
Slide 14: Prestige Operating Model
14 Prestige Operating Model Best-in-Class Outsourced Partners Advertising Logistics Distribution Manufacturing Brand Management Marketing Customer Service IT Finance Product Quality Product Development Sales Focus on Brand Building Specialized Skills and Knowledge Economies of Scale 2 Leverage
Slide 15: Key Benefits of Our Operating Model
15 Key Benefits of Our Operating Model Ensures Organizational Focus on Brand Building Provides Access to Additional Technical Resources for New Product Development Broad Base of Manufacturer’s Industry Knowledge Efficient, Scalable and Flexible Model State-of-the-Art Manufacturing with Min
Slide 16: Margin Expansion and Efficiency Gains Allow Increased A&P Investment
16 30.0% 30.5% 34.9% 33.9% FY'11A FY'12A FY'13A FY'14A 12.7% 13.0% 14.5% 14.9% FY'11A FY'12A FY'13A FY'14A 10.2% 8.5% 7.2% 7.9% FY'11A FY'12A FY'13A FY'14A 52.9% 52.0% 56.6% 56.7% FY'11A FY'12A FY'13A FY'14A Adjusted Gross Margin(4) Margin Expansion and Efficiency Gains Allows for Increased A&P Inve
Slide 17: Deliver Robust and Consistent Free Cash Flow
17 Deliver Robust and Consistent Free Cash Flow 3
Slide 18: Drivers of Free Cash Flow
18 Drivers of Free Cash Flow Superior EBITDA margin profile Outsourced manufacturing with minimal capital outlays Disciplined acquisition strategy with proven integration synergies and structured in a highly tax- efficient manner Low cash tax rate from significant long-term tax attributes $5
Slide 19: Industry Leading EBITDA Margins
19 Industry Leading EBITDA Margins 11.5% 13.7% 15.6% 16.8% 19.9% 20.2% 22.0% 22.8% 23.1% 27.4% 27.6% 33.8% ~37%(9) Adjusted EBITDA Margins Median: 22.0% 3 Source: Company filings and Capital IQ
Slide 20: Superior Free Cash Flow Conversion
20 Superior Free Cash Flow Conversion 84.3% 93.6% 96.0% 107.9% 109.5% 111.5% 112.5% 114.8% 117.5% 125.9% 135.2% 152.4% Median: 112.5% Adjusted Yield(10) and FCF Conversion(11) Median: 5% ~175%(11) 3 9% 8% 5% 6% 4% 5% 6% 5% 5% 6% 7% 5% 5% Source: Company filings and Capital IQ
Slide 21: Rapid De-levering & Building M&A Capacity
21 Strong & Consistent Cash Flow Leads to Rapid De-levering & Building M&A Capacity Leverage Ratio(12) FY 15E FY 16E FY 17E ~$1.6 BN +$2.0 BN ~$0.6 BN Illustrative Financing Capacity(13) ~5.6x ~5.4x ~5.1x ~4.4x ≥4.0x Q2 FY 15 Q3 FY 15 FY 15E FY 16E FY 17E Reduced Net Debt by ~$55 million in Q3 F
Slide 22: Execute Proven and Repeatable M&A Strategy
22 Execute Proven and Repeatable M&A Strategy 4
Slide 23: Recurring Flow of Quality Opportunities in OTC Over Time
23 Recurring Flow of Quality Opportunities in OTC Over Time 4 2008 2007 2009 2010 2011 2013 (Minors) ® 2012 (Non Core OTC) (LatAm Brands) (5 Brands) (7 OTC Brands) (European & ROW Brands) (17 OTC Brands) 2014 (Consumer Brands) (OTC JV) (Consumer)
Slide 24: M&A Strategy has Delivered Shareholder Value
24 M&A Strategy has Delivered Shareholder Value M&A as a Value Creator Disciplined and Aggressive M&A Strategy 4 Attractive Pricing Dynamics Number and Scale of Opportunities Pure Play OTC Platform Position of Strength
Slide 25: Proven Ability to Source from Varied Sellers
25 Proven Ability to Source from Varied Sellers 4
Slide 26: Recent Acquisitions Have Transformed Our Business
26 Recent Acquisitions Have Transformed Our Business Platform Expansion Geographic Expansion Six Acquisitions Completed in Past Five Years Have More Than Tripled Prestige’s OTC Business North American Brands 2010 2012 2013 2014 2011 April 2014 July 2013 April 2014 December 2011 December 2010 Septemb
Slide 27: Strengthening Brand Scale in OTC
27 Strengthening Brand Scale in OTC FY2010(14) FY2015(15) +3.0x Average: $38MM* Average: $113MM* * Retail Sales Brand Scale in Top 4 OTC Brands 4
Slide 28: Successful Integration of Insight Pharmaceuticals
28 Successful Integration of Insight Pharmaceuticals Regulatory / Quality Assurance Systems / Back-Office Supply Chain Sales & Distribution IT systems and processes transferred Personnel and offices transitioned Brand Building Expect to Complete by End of Q3 On-Going 12-24 Months Regulatory an
Slide 29: Key Drivers of Long-Term Shareholder Value
29 Key Drivers of Long-Term Shareholder Value Develop a Portfolio of Leading Brands Capitalize on Efficient and Effective Operating Model Deliver Robust and Consistent Free Cash Flow Execute Proven and Repeatable M&A Strategy Portfolio of recognizable brands in attractive consumer health industry
Slide 30: Third Quarter FY15 Performance Highlights
===" Third Quarter FY 15 = Performance Highlights PrestigeBrands
Slide 31: Q3 Performance Highlights and Outlook
31 Q3 Performance Highlights and Outlook Q3 consolidated Revenue of $197.6 million, up 36.4% versus PY Q3 – Organic growth of +2.9%(1) on a constant currency basis, and +2.1% on a dollar basis versus PY Q3 Core OTC consumption growth of +5.5% (ex. PediaCare), and +1.6% (total Core OTC) Adjuste
Slide 32: Selected Observations on Third Quarter Performance
32 Selected Observations on Third Quarter Performance Excellent overall financial performance in the quarter exceeded expectations − Achieved organic growth of 2.9%(1) excluding the impact of foreign currency − Revenue of $197.6 million, an increase of 36.4% − Adjusted EPS of $0.48(16), up 60.0% −
Slide 33: FY Outlook and the Road Ahead
. FY 15 Outlook . ‘and the Road Ahead PrestigeBrands
Slide 34: Stay the Strategic Course to Continue to Create Shareholder Value
34 Stay the Strategic Course to Continue to Create Shareholder Value Insight Integration FY 15 Full Year Outlook M&A Strategy Brand Building Continue investment and focus on Core OTC and International to drive consumption growth Deliver new product innovations on a consistent basis (five planned
Slide 35: MONISTAT: Bitte.
g MONISTAT: Bitte. seein, Opt - ‘AT: (dit T emcees, ERE py mr = rox TE Cae Gy =m ga Nix 2 ca ee PE Dramamme “wins iinieeyes i , Comet viteejes Gaviscon. Debrox (ESI Sy 0) aE NX Ew ¢ Gaviscon, Debrox (SEN GD {voce odys MONISTAT Bitters, CRE Oomanme tl ete, (Cpt Dramarne =i” oeyes C STAT Aeon Ni scon.
Slide 36: Appendix
36 Appendix (1) Organic Revenue Growth on a constant currency basis is a Non-GAAP financial measure and is reconciled to GAAP Total Revenues in our Q3FY15 earnings release in the “About Non-GAAP Financial Measures” section in Exhibit 99.1 to our Form 8- K filed with the SEC on February 5, 2015. (2)
Slide 37: Appendix
37 Appendix (10) Adjusted Free Cash Flow Yield is calculated as Non-GAAP Pro forma Adjusted Free Cash Flow over the Company’s market capitalization as of November 14, 2014. Source: Company filings and Capital IQ. Notes: For the latest twelve month period as of November 14, 2014. (11) Adjusted Free C
Prestige Brands Holdings — Raymond James client presentation, February 2015 on 6ix