Wd-40 Company · NASDAQ:WDFC
Wd-40 — Q4 2022 Earnings Presentation
37 slides from Wd-40's earnings presentation, Oct 19, 2022
Slide 1: Q4 FY22 Earnings Results
Q4 FY22 EARNINGS RESULTS October 19, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal entities. WD-40 Company markets maintenance products (“MP”) under the WD-40®, 3-IN-ONE® and GT85® brand names. Currently included
Slide 3: Strategic Initiatives
WD-40 COMPANY STRATERIP INTIATIVES
Slide 4: Strategic Initiatives
Strategic Initiatives Desired Outcome(1) 1. Build a Business for the Future Build an enduring business that we will be proud to pass onto the next generation. By Fully integrate ESG using our purpose and values as a decision-making filter, we will make infinite-minded factors into our business decis
Slide 5: 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 ~$50M Revenue Generated by WD-40® Multi-Use Product Revenue Generated by WD-40 Specialist® (2) Revenu
Slide 6: Long-Term Growth Ambition by Segment
Long-Term Growth Ambition by Segment Americas EMEA Asia-Pacific Total Company 47% of global 39% of global 14% of global sales* sales* sales* Targeting a compound annual Targeting a Targeting a Targeting a growth in the compound annual compound annual compound annual mid-to-high growth rate of growth
Slide 7: Q4 FY22 Results
WD-40 COMPANY Q4FY22 RESULTS =
Slide 8: Q4 FY22 Results
Q4 FY22 Results ($ in millions; except EPS, gross profit and % change) Q4 FY22 Q4 FY21 % Change Net Sales $130.4 $115.2 13% Gross Profit (%) 47.4% 51.2% -380 bp Operating Income $19.5 $12.5 57% Net Income $14.8 $8.4 76% EPS (Diluted) $1.08 $0.61 77% • Overall, changes in foreign currency exchange ra
Slide 9: 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 10: Q4 FY22 Foreign Currency Exchange Impact
Q4 FY22 Foreign Currency Exchange Impact Q4 FY22 Net Sales (In millions) $0.5 $6.7 In total changes in FX rates decreased net sales by ~$6.2M in Q4 FY22 $136.6 $130.4 Q4 FY22 Net Sales at Transaction Translation Q4 FY22 Net Sales Q4 FY21 FX Rates Impact Impact As Reported 10
Slide 11: Americas Segment
Americas Segment Americas – Q4 FY22 vs. Q4 FY21 $68.0 • Total reported segment sales ▲ 25% • Segment made up 52% of global sales $54.2 • Maintenance product sales ▲ 30% • WD-40 Specialist sales ▲ 74% • HCCP sales ▼ 17% • Maintenance Product (MP) sales: • U.S. MP sales ▲ 21% • Latin America MP sales
Slide 12: EMEA Segment
EMEA Segment EMEA – Q4 FY22 vs. Q4 FY21 • Total reported segment sales ▼ 3% • Segment made up 34% of global sales $45.1 • Maintenance product sales ▼ 1% $43.6 • WD-40 Specialist sales ▲ 9% • HCCP sales ▼ 36% • In constant currency (GBP) sales ▲ 10% • EMEA direct market sales ▼ 7% • 71% of segment sa
Slide 13: Asia-Pacific Segment
Asia-Pacific Segment Asia-Pacific – Q4 FY22 vs. Q4 FY21 $18.8 • Total reported Asia-Pacific sales ▲ 18% • Segment made up 14% of global sales $15.9 • Maintenance product sales ▲ 24% • WD-40 Specialist sales ▼ 1% • HCCP sales ▼ 15% • Asia distributor market sales ▲ 64% • Australia sales ▲ 3% • In fun
Slide 14: FY22 Results
FY22 RESULTS
Slide 15: FY22 Results
FY22 Results ($ in millions; except EPS, gross profit and % change) FY22 FY21 % Change Net Sales $518.8 $488.1 6% Gross Profit (%) 49.1% 54.0% -490 bp Operating Income $87.3 $88.8 -2% Net Income $67.3 $70.2 -4% EPS (Diluted) $4.90 $5.09 -4% • Overall, changes in foreign currency exchange rates had a
Slide 16: FY22 Foreign Currency Exchange Impact
FY22 Foreign Currency Exchange Impact FY22 Net Sales (In millions) $3.3 $8.3 In total changes in FX rates decreased net sales by ~$11.6M in $530.4 $518.8 FY22 FY22 Net Sales at Transaction Translation FY22 Net Sales FY21 FX Rates Impact Impact As Reported 16
Slide 17: Americas Segment
Americas Segment Americas – FY22 vs. FY21 • Total reported segment sales ▲ 12% $240.2 • Segment made up 47% of global sales $214.6 • Maintenance product sales ▲ 15% • WD-40 Specialist sales ▲ 45% • HCCP sales ▼ 17% • Maintenance Product (MP) sales: • U.S. MP sales ▲ 10% • Latin America MP sales ▲ 35
Slide 18: EMEA Segment
EMEA Segment EMEA – FY22 vs. FY21 • Total reported segment sales ▼ 2% • Segment made up 39% of global sales $204.7 $208.3 • Maintenance product sales ▼ 1% • WD-40 Specialist sales ▲ 2% • HCCP sales ▼ 18% • In constant currency (GBP) sales ▲ 2% • EMEA direct market sales ▼ 3% • 67% of segment sales c
Slide 19: Asia-Pacific Segment
Asia-Pacific Segment Asia-Pacific – FY22 vs. FY21 $73.9 • Total reported Asia-Pacific sales ▲ 13% $65.3 • Segment made up 14% of global sales • Maintenance product sales ▲ 16% • WD-40 Specialist sales ▲ 9% • HCCP sales ▼ 5% • Australia sales ▲ 2% • In functional currency (AUD) sales ▲ 7% • China sal
Slide 20: Must-Win Battles
MUST-WIN BATTLES
Slide 21: Our Global Must-Win Battles
Our Global Must-Win Battles Geographic Expansion Premiumization Drive WD-40 Specialist® Growth Digital Commerce
Slide 22: 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 ~$1.0B (1) $100 China Americas Indonesia EMEA India Asia-Pacific Saudi Japan Germany Arabia Opportunity (in millions) Turkey South United Korea States Egypt Thailand Brazil
Slide 23: Must-Win Battle #2 - Premiumization
Must-Win Battle #2 - Premiumization • At the end of FY22, sales of premiumized products increased 4% year over year • Our objective is to grow premiumized products to >60% of WD-40 Multi-Use Product global sales Next Generation EZ-Reach® Classic Can Smart Straw® Smart Straw® Flexible Straw Premiumiz
Slide 24: 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 24 24
Slide 25: 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 25
Slide 26: 55/30/25 Business Model
55/30/25 BUSINESS MODEL
Slide 27: Q4 Gross Margin
Q4 Gross Margin Quarter on Quarter Impact of Tactical Price Increases Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 +10 bps +10 bps +120 bps +200 bps +490 bps +810 bps Gross margin decreased by 380 basis points Gross Margin vs. Prior Year primarily due to the following unfavorable Q4 FY22 Q4 FY21
Slide 28: Q4 Cost of Doing Business
Q4 Cost of Doing Business • Q4 FY22 cost of doing business was 31%, down from 39% compared to Q4 FY21 • 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 • Inv
Slide 29: 55/30/25 Results
55/30/25 Results Target Q4 FY22 Q4 FY21 Q4 FY20 55/30/25 Business Model Actuals Actuals Actuals Gross Margin 55% 47% 51% 56% Cost of Doing Business 30% 31% 39% 33% EBITDA 25% 16% 12% 23% Target FY22 FY21 FY20 55/30/25 Business Model Actuals Actuals Actuals Gross Margin 55% 49% 54% 55% Cost of Doing
Slide 30: Guidance
GUIDANCE
Slide 31: Fiscal Year 2023 Guidance
Fiscal Year 2023 Guidance Sales Growth Between 5% and 10% Net Sales Between $545 and $570 million Gross Margin Between 51% and 53% A&P Investment Between 5.0% and 6.0% of net sales Provision for Income Tax Around 22% Net Income Between $69.0 and $71.0 million Diluted EPS Between $5.09 and $5.24 base
Slide 32: Appendix
APPENDIX
Slide 33: Foreign Currency Translation Impact or “Constant Currency”
Foreign Currency Translation Impact or “Constant Currency” ($ in millions; except EPS, gross profit and % change) Financial Results As reported Q4 FY22 Q4 FY21 % Change Net Sales $130.4 $115.2 13% Gross Profit (%) 47.4% 51.2% -380 bp Operating Income $19.5 $12.5 57% Net Income $14.8 $8.4 76% EPS (Di
Slide 34: Foreign Currency Translation Impact or “Constant Currency”
Foreign Currency Translation Impact or “Constant Currency” ($ in millions; except EPS, gross profit and % change) Financial Results FY22 FY21 % Change As reported Net Sales $518.8 $488.1 6% Gross Profit (%) 49.1% 54.0% -490 bp Operating Income $87.3 $88.8 -2% Net Income $67.3 $70.2 -4% EPS (Diluted)
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) This presentation contains certain non-GAAP (accounting principles generally accepted 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 b
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) This presentation contains certain non-GAAP (accounting principles generally accepted 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 b
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