Acco Brands Corporation · NYSE:ACCO
Acco Brands — FY2021 Earnings Presentation
31 slides from Acco Brands's earnings presentation, Feb 16, 2022
Slide 1: ACCO Brands 4Q/FY Earnings Conference Call
ACCO Brands 4Q/FY Earnings Conference Call February 16, 2022
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, results of operations, liquidity and financial condition
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: 2021 Results Summary
2021 Results Summary • PowerA sales were $257M; FX added $38M • Strong comparable growth last three quarters after a difficult 1Q due to pre-COVID-19 comparison Sales $2.03B, up 22% from $1.66B • North America posted higher comparable sales due to price Comparable sales up 5% to $1.74M increases and
Slide 5: 2021 Segment Results Summary
2021 Segment Results Summary • PowerA added $200M; FX added $7M to sales North America sales $1.04B, up 27% • Comparable sales increased due to price increases Comparable sales $835M, up 2% • Volume trends improved after 1Q decline related to COVID-19 • School and office volume up, offset by large K
Slide 6: 2021 Segment Results
2021 Segment Results Y/Y Segment Financial Metrics FY21 FY20 $ in millions Change ACCO Brands North America Sales $1,042.4 $822.1 26.8% Comparable Sales $835.2 $822.1 1.6% Adjusted Operating Income $154.6 $103.3 49.7% Adjusted Operating Margin 14.8% 12.6% 220 bps ACCO Brands EMEA Sales $662.9 $523.9
Slide 7: 2021 Margin Reconciliation
2021 Margin Reconciliation FY 2021 Change vs. Items of Significant Impact Adjusted Prior Year Bps on Adjusted Results (non-GAAP) Adjusted Gross Profit $617.9M $125.5M Cost Savings 120 Mix, net 70 Gross Margin 30.5% 80 bps Inventory Reserves/Other 40 FX 10 Pricing/Product Cost (150) Acquisition (10)
Slide 8: 4Q 2021 Results Summary
4Q 2021 Results Summary • All segments posted sales increases, led by North America with Sales $570M, up 24% from $460M 47% growth, including comparable growth of 13% Comparable sales up 8% to $499M • PowerA added $79M; adverse FX was $8M • Improving consumer demand as more offices and schools reope
Slide 9: 4Q 2021 Segment Results Summary
4Q 2021 Segment Results Summary • PowerA added $63M to sales North America sales $271M, up 47% • Comparable sales up from price increases and improved volume Comparable sales $208M, up 13% in most product lines Operating income $34M, up 127% • Operating income up, $13M from PowerA, long-term cost Ad
Slide 10: 4Q 2021 Segment Results
4Q 2021 Segment Results Y/Y Segment Financial Metrics 4Q21 4Q20 $ in millions Change ACCO Brands North America Sales $271.0 $184.1 47.2% Comparable Sales $207.8 $184.1 12.8% Adjusted Operating Income $42.0 $21.1 98.6% Adjusted Operating Margin 15.5% 11.5% 400 bps ACCO Brands EMEA Sales $187.9 $171.7
Slide 11: 4Q 2021 Margin Reconciliation
4Q 2021 Margin Reconciliation 4Q 2021 Change vs. Items of Significant Impact Adjusted Prior Year Bps on Adjusted Results (non-GAAP) Adjusted Gross Profit $178.1M $35.0M Cost Savings 70 Inventory Reserves/Other 20 Gross Margin 31.2% 10 bps Acquisition 10 Pricing/Product Cost (70) Mix, net (20) SG&A $
Slide 12: 2021 Cash Flow
2021 Cash Flow $ in millions - Numbers may not foot Change due to rounding 4Q21 3Q21 2Q21 1Q21 FY2021 FY2020 vs 2020 Adjusted EBITDA 95 72 84 41 292 211 81 Interest (10) (17) (4) (7) (38) (36) (2) Accelerated Pmt. Bond Interest -- -- -- (6) (6) -- (6) Taxes (7) (6) (7) (8) (28) (32) 4 Capital expend
Slide 13: Capital Structure
Capital Structure Capital structure as of December 31, 2021 No maturities until 2026 ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 39 LIBOR + 200 bps, 35.0 bps unused 2.08% USD Term Loan A 89 U.S. LIBOR + 200 bps 2.22% EUR Term Loan A 255 Euro LIBO
Slide 14: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy • Disciplined capital allocation strategy • In 2021 used FCF to reduce debt Capital • In 2022 expect to return to normal strategy to use FCF to fund Allocation dividend, reduce debt, repurchase shares, and make acquisitions • Reduced debt $131M in 2021 Debt •
Slide 15: Outlook
Outlook 1Q 2022 Outlook1 Net Sales Approximately +2.5% Adjusted EPS $0.06 to $0.10 FY 2022 Outlook2 Net Sales +1% to +6% Adjusted EPS $1.48 to $1.58 FCF at least $165M (at least Cash Flow $190M cash from operations minus $25M capex) Adjusted Tax Rate Approximately 29% 1 Assumes 2.5% adverse impact o
Slide 16: Historical Financial Performance
Historical Financial Performance Revenue Comparable Sales ($B) % Change 5.00 1.95 1.94 1.96 2.03 0.80 1.66 -3.80 -3.10 2017 2018 2019 2020 2021 -15.90 2017 2018 2019 2020 2021 ($M) Adjusted Operating Adjusted EPS Income 1.46 1.41 1.41 1.39 258 240 247 0.95 228 161 2017 2018 2019 2020 2021 2017 2018
Slide 17: Historical Cash Flow/2022 Outlook
Historical Cash Flow/2022 Outlook ($M) Operating Cash Flow Free Cash Flow 172 204 161 ≤ 165 195 ≤ 190 138 160 104 119 2018 2019 2020 2021 2022 Outlook 2018 2019 2020 2021 2022 Outlook 2021 cash conversion rate Free cash flow yield of of 117%1 17.7%2 1OCF $159.6M / Adj. Net Income $136.8M 2 Represent
Slide 18: PowerA Pro Forma Sales
PowerA Pro Forma Sales PowerA continues its strong growth, benefitting from the console launch cycle, increases in number of gamers and hours played, expanding its product range, and gaining share ($M) 258 210 168 2019 2020 2021 18
Slide 19: Growing Dividend
Growing Dividend We have steadily raised our divided as part of our capital allocation strategy $0.27** $0.26 $0.245 $0.24* 2018 2019 2020 2021 *Initiated dividend at $0.06 per share, per quarter **Board approved dividend increase to $0.075 per share, per quarter in 4Q 2021 19
Slide 20: 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 material acquisitions with current-period foreign operation sales translated at prior-year currency rates. We believe comparable net sales are u
Slide 21: Reg. G – Non-GAAP Financial Measures
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Slide 22: Reg. G – Non-GAAP Financial Measures
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Slide 23: Reg. G – Non-GAAP Financial Measures
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Slide 24: Reg. G – Non-GAAP Financial Measures
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Slide 25: Reg. G – Non-GAAP Financial Measures
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Slide 26: Reg. G – Non-GAAP Financial Measures
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Slide 27: Reg. G – Non-GAAP Financial Measures
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Slide 28: Reg. G – Non-GAAP Financial Measures
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Slide 29: Reg. G – Non-GAAP Financial Measures
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Slide 30: Reg. G – Non-GAAP Financial Measures
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Slide 31: Reg. G – Non-GAAP Financial Measures
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