Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Non-Deal Roadshow (March 2015)
46 slides from Spectrum Brands's roadshow presentation, Mar 18, 2015
Slide 1: Presentation to New York Investors
Hardware & Global Batteries Pet, Home Home Improvement & Appliances & Garden Presentation to New York Investors March 18-19, 2015 Doug Martin EVP and Chief Financial Officer Dave Prichard Vice President, Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain matters discussed in this presentation, with the exception of historical matters, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding our
Slide 3: Reconciliation of Non-GAAP Financial Measurements
Reconciliation of Non-GAAP Financial Measurements Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Excluding the impact of current exchange rate
Slide 4: Diverse Portfolio of Leading Brands
Diverse Portfolio of Leading Brands Portfolio includes widely used, non-discretionary, replacement consumer brands. 4
Slide 5: Superior Value to Retailers and Consumers Worldwide
Superior Value to Retailers and Consumers Worldwide FY14 net sales of $4,429 million and adjusted FY14 Net Sales - $4,429 million EBITDA of $724 million H&G 10% Spectrum Value Model drive success of strong, well-recognized and extendable brand names Global Pet Supplies 14% Top 3 global market
Slide 6: Strong Financial Performance Despite a Challenged Consumer
Strong Financial Performance Despite a Challenged Consumer Annual net sales and adjusted EBITDA growth Net Sales Performance Adjusted EBITDA improvement in FY14 led by ($ in millions) $4,226 $4,277 $4,429 HHI, H&G and GBA $3,111 $3,187 $3,006 Solid financial performance driven by: $2,333 $2,42
Slide 7: FY14 Net Sales by Geographic Region
FY14 Net Sales by Geographic Region 7
Slide 8: Vision & Goal
Vision & Goal VISION Be the leader in retailer metrics with superior value consumer products for everyday use GOAL Create shareholder value through adjusted EBITDA and free cash flow growth 8
Slide 9: Spectrum Value Model
Spectrum Value Model Market Positioning Value to Retailers Focus on #2 brands in markets Best retailer margin; with high barriers to entry category mgmt; merchandising Product Performance Point of Sale Focus Match or exceed competitor Win at point-of-sale, not product performance Spectrum through br
Slide 10: Leading Market Share and Competitive Brands
Leading Market Share and Competitive Brands Category Market Position Select Key Brands #3 (North America) Consumer batteries #2 (Europe) #1 (Latin America) #2 (North America, Europe, Portable lighting Latin America) Electric shaving and grooming #3 (North America, Europe) #3 (North America) Electric
Slide 11: Diverse and Loyal Customer Base
Diverse and Loyal Customer Base Largest customer in FY14 accounted for Customer Breakdown by Revenue in FY14 ~16% of sales, with the remainder of top 10 #1 Customer ~16% customers accounting for ~27% Robust/established long-term relationships of more than 20 years with many key customers Major H
Slide 12: Supporting Long-term Growth Through Synergistic Bolt-on Acquisitions
Supporting Long-term Growth Through Synergistic Bolt-on Acquisitions KEY ACQUISITION PRIORITIES Fragmented industry is ripe for consolidation Global Large and rich list of targets identified for bolt-on acquisitions Pet Primary focus in companion animals (FURminator® in FY12, IAMS/Eukanuba and
Slide 13: Successful Track Record of Acquisition Integration/Delevering
Successful Track Record of Acquisition Integration/Delevering Track record of using strong free cash flow generation to manage capital structure and drive value Proven integrator – Russell Hobbs, HHI, FURminator, Black Flag/TAT, Tong Lung and Liquid Fence Significant NOLs and limited CapEx req
Slide 14: Robust Business with Solid Cash Flow Generation
Robust Business with Solid Cash Flow Generation FY15 free cash flow is expected to be approximately $400 million, or nearly $8 per share FY14 free cash flow was a record $359 million, or nearly $7 per share FY13 free cash flow was $254 million, or approximately $5 per share Adjusted EBITDA les
Slide 15: Strong Cash Flow and Value Creation Flexibility
Strong Cash Flow and Value Creation Flexibility 2015-2018 Operating Cash Flow = ~$2.0 Billion Uncommitted Cash Optionality ($ in billions) CapEx Pay down debt $0.3 Acquisitions Further increase Dividends $0.3 dividends Uncommitted Free Cash Flow $1.1 Share repurchases Share Repurchases $0.3
Slide 16: Hardware & Home Improvement
Hardware & Global Batteries Pet, Home Home Improvement & Appliances & Garden
Slide 17: Hardware & Home Improvement Overview
Hardware & Home Improvement Overview Eight consecutive quarters of YOY net sales and adjusted EBITDA Adjusted EBITDA Performance increases since December 17, 2012 acquisition ($ in millions) $210 Leading provider of residential locksets, builders hardware and plumbing and accessories Diversifi
Slide 18: Global Growth Opportunities
Global Growth Opportunities Diversified existing product portfolio characterized by outstanding new product innovation and execution complemented by October 1, 2014 acquisition of Tell Manufacturing Continued focus on a number of growth areas including SmartKey, home automation and security, non
Slide 19: HHI Game-Changing Technology
HHI Game-Changing Technology THE KEY EVOLVED. What Makes SmartKey Touch to Better? Open • Drill Resistance Your Smartphone • ANSI Grading is Now Your Key • BumpGuard • Superior Pick‐Resistance • Mobile App Convenience • Share eKeys via Smartphone Re‐Key as Easy as 1‐2‐3 • No Smartphone? No Problem.
Slide 20: Hardware & Home Improvement – New Products
Hardware & Home Improvement – New Products Convenient touch-free response activated technology Smartstop - automatically shuts off the faucet after 2 minutes of inactivity Pfister® React Temp adjust - select your ideal temperature for sensor mode Pforever Seal - advanced ceramic disc valve t
Slide 21: Hardware & Home Improvement – New Products
Hardware & Home Improvement – New Products Touch screen electronic deadbolt with HomeConnect™ technology Secured keyless entry convenience, one- Kwikset® touch locking SmartCode Full 128-bit encryption security and patented side locking bar technology offers improved security by protecting aga
Slide 22: Global Batteries & Appliances
Hardware & Global Batteries Pet, Home Home Improvement & Appliances & Garden
Slide 23: Global Batteries & Appliances Overview
Global Batteries & Appliances Overview Value brands appeal to consumers Adjusted EBITDA Performance Large/growing customers represent significant share of ($ in millions) $327 $307 $308 $304 total market, helping to propel share gains $275 $297 Global market leader in hearing aid batteries $18
Slide 24: Global Batteries and Appliances – New Products
Global Batteries and Appliances – New Products Lasts 35% longer than Energizer® Max® Rayovac® Energy dense formula provides MORE POWER (vs. standard Rayovac alkaline) FUSION Mercury-free formula Lithium Ion rechargeable mobile device charger Rayovac® Dual USB ports to charge two devices si
Slide 25: Global Batteries and Appliances – New Products
Global Batteries and Appliances – New Products ActiveHybrid™ technology Remington® LiftLogic™, a hair lifting multi-directional SmartEdge™ Foil foil pattern Shaver WetTech™ allows dry/wet shave with a shaving gel or foam Remington® Intense Pulsed Light (IPL) technology i-LIGHT® Pro Intense
Slide 26: Global Batteries and Appliances – New Products
Global Batteries and Appliances – New Products Black+Decker® Dual heating elements 5-Minute Pizza Oven & Ceramic coated tray, dishwasher safe Snack Maker Fits up to a 12” family sized pizza BPA-free plastic, lightweight and durable Black+Decker® One-piece design: FusionBlade™ technology Fu
Slide 27: Global Batteries and Appliances – New Products
Global Batteries and Appliances – New Products Premium ceramic, non-stick coating George Foreman® Exclusive fat draining design removes up to 42% of fat The Evolve Grill 500° searing burst System Dishwasher safe removable plates Connect to smart phone or tablet via Wi-Fi multi-functional a
Slide 28: Global Batteries and Appliances – New Products
Global Batteries and Appliances – New Products Russell Hobbs introduces the Legacy Russell Hobbs® Collection with matching kettle, toaster and coffee maker to celebrate 60 years Legacy Collection of innovation and style. Black+Decker®/ Russell Hobbs® Oil-free health fryer Purifry 28
Slide 29: Pet, Home & Garden
Hardware & Global Batteries Pet, Home Home Improvement & Appliances & Garden
Slide 30: Global Pet Supplies Overview
Global Pet Supplies Overview Attractive industry trends Adjusted EBITDA Performance Global market leader in aquatics category with a broad and ($ in millions) $113 $120 $113 innovative product line led by the Tetra brand $98 $104 $99 $93 $92 2014 EBITDA decline driven by Russia import restrict
Slide 31: Global Pet Supplies Comparative Global Infrastructure
Global Pet Supplies Comparative Global Infrastructure North America Europe Latin America Japan 31
Slide 32: IAMS/Eukanuba European Pet Food Business
IAMS/Eukanuba European Pet Food Business IAMS and Eukanuba European premium pet food brands for dogs and cats acquired on December 31, 2014 • IAMS: premium brand with broad consumer appeal and leadership share of the premium dry dog food market in the U.K. • Eukanuba: premium brand in the pet spec
Slide 33: Salix Animal Health
Salix Animal Health Salix Animal Health, the world’s leading and largest vertically integrated producer and distributor of premium, natural rawhide dog chews, treats and snacks acquired on January 16, 2015 Strengthens, diversifies and expands our Pet segment’s market position in rawhide dog trea
Slide 34: Global Pet Supplies – New Products
Global Pet Supplies – New Products Dingo® Premium rawhide Twist Stick Real chicken High in protein, low in fat Dingo® Made in the USA with USA-sourced raw Market Cuts materials, no artificial flavors, colors or chicken by-products Preferred 2 to 1 versus standard rawhide Better Belly® Di
Slide 35: Global Pet Supplies – New Products
Global Pet Supplies – New Products Stainless steel deShedding edge FURminator® Used and recommended by veterinarians and professional groomers deShedding Edge FURejector® button to clean and remove loose hair from the tool Non-invasive solution deactivates the characteristics of a molecule t
Slide 36: Home & Garden Overview
Home & Garden Overview Another record year in FY14 Adjusted EBITDA Performance ($ in millions) Completed accretive Liquid Fence bolt-on $87 $90 $102 acquisition in FY14 $68 $78 Attractive industry trends $41 $53 $56 Unique competitive environment Solid retail relationships FY '07 FY '08 FY
Slide 37: Home & Garden Overview Products
Home & Garden Overview Products 37
Slide 38: Strong #2 Share in the Industry
Strong #2 Share in the Industry U.S. Retail Home & Garden Pest Control Market Vendor Market Share Estimate Home & Garden Share Controls 22% All Other 21% Home & Garden $1,452M H&G Share 25% Household 32% Bayer 5% $754M H&G Share Central Garden 4% Repellents 30% $545M H&G Share Scotts Miracle Gro SC
Slide 39: Home & Garden – New Products
Home & Garden– New Products Spectracide® AccuShot™ Sprayer for continuous Weed & Grass Killer, power spray with extendable wand and Bug Stop Early warning of bed bug infestations, Hot Shot® dual detection zones Contains no killing agents Bed Bug Interceptor Non-Skid design Contains Nylar (
Slide 40: Fiscal 2015 Outlook
Fiscal 2015 Outlook Planning for 6th consecutive year of record performance Sales growth in the mid to low-single digit range Continued cost improvement discipline FX headwinds worsening Free cash flow is projected to be approximately $400 million Focus remains on growing adjusted EBITDA
Slide 41: NYSE: SPB
Hardware & Global Batteries Pet, Home Home Improvement & Appliances & Garden NYSE: SPB www.spectrumbrands.com investorrelations@spectrumbrands.com david.prichard@spectrumbrands.com
Slide 42: Appendix
Hardware & Global Batteries Pet, Home Home Improvement & Appliances & Garden Appendix
Slide 43: Spectrum Brands Evolution
Spectrum Brands Evolution 43
Slide 44: Financial Snapshot
Financial Snapshot Pro forma net sales Adjusted EBITDA ($ in millions) ($ in millions) $724 $4,277 $4,429 $4,226 $668 $677 $3,111 $3,187 $3,006 $457 $432 $2,333 $2,427 $391 $272 $297 16.4% 15.8% 15.8% 13.9% 14.3% 13.0% 11.7% 12.2% (a) (a) (b) (b) FY '07 FY '08 FY '09 (a) FY '10 (a) FY '11 FY '12(b)
Slide 45: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA 9/30 FY2009 9/30 FY2010 9/30 FY2011 9/30 FY2012 PF9/30 FY2012 PF9/30 FY2013 9/30 FY2014 Net income (loss) $943 ($190) ($75) $49 $49 ($55) $215 Income tax expense 74 63 92 60 60 27 59 Interest expense 190 277 208 192 192 376 202 Depreciation and amortization 67 118 1
Slide 46: Reconciliation of Adjusted EBITDA by Segment
Reconciliation of Adjusted EBITDA by Segment FY 2014 Global Batteries & Global Pet Home & Garden Hardware & Home Corporate / Consolidated (1) Appliances Supplies Business Improvement Unallocated Items Spectrum ($ in millions) Net Income (Loss), as adjusted $235 $79 $88 $157 ($344) $215 Interest expe
Spectrum Brands Holdings — Non-Deal Roadshow (March 2015) on 6ix