Prestige Consumer Healthcare Inc. · NYSE:PBH

Prestige Consumer Healthcare — Prestige Brands Holdings — Investor Presentation (December 2014)

36 slides from Prestige Consumer Healthcare's investor presentation, Dec 12, 2014

  1. Slide 1: Investor Presentation December 2014

    Investor Presentation December 2014

  2. Slide 2: Safe Harbor Disclosure

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 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, investments in brand building,

  3. Slide 3: •

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 3

  4. Slide 4: Key Drivers of Long-Term Shareholder Value

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 4 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  Portfol

  5. Slide 5: Strategy Has Delivered Consistently Strong Financial Performance

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 5 $88 $135 $204 $300 FY'10A FY'12A FY'14A FY'15PF $293 $441 $602 $800 FY'10A FY'12A FY'14A FY'15PF Net Sales Strategy Has Delivered Consistently Strong Financial Performance 5 $0.67 $0.99 $1.53 $1.90 to $2.00 FY'10A FY'12A FY'14A FY'1

  6. Slide 6: Develop a Portfolio of Leading Brands

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 6 Develop a Portfolio of Leading Brands 6 1

  7. Slide 7: Recognizable Brands with Leading Market Positions

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 7 Recognizable Brands with Leading Market Positions 7 #1 and #2 Market Position Brands 1 Source: Based on IRI multi-outlet retail sales

  8. Slide 8: Demonstrated Ability to Build Brands

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 8 Demonstrated Ability to Build Brands 8 Product Innovation A&P Investment Consumption Change 10.9% 6.0% 13.3% 5.4% 2.0% 0.7% 3 Yr* 52 Weeks** 12 Weeks** Source: IRI multi-outlet retail dollar sales growth for relevant period. * Repre

  9. Slide 9: Demonstrated Ability to Build Brands

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 9 Demonstrated Ability to Build Brands 9 Product Innovation A&P Investment Consumption Change 21.7% 10.5% 12.5% 14.8% 8.3% 10.8% 3 Yr* 52 Weeks** 12 Weeks** Source: IRI multi-outlet retail dollar sales growth for relevant period. * Re

  10. Slide 10: Demonstrated Ability to Build Brands

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 0 Demonstrated Ability to Build Brands 10 Consumption Change Product Innovation A&P Investment Multi-year agreement with Dale Earnhardt, Jr. for the NASCAR XFINITY Series 7.5% 1.2% 2.4% 0.9% 0.7% 1.3% 3 Yr* 52 Weeks** 12 Weeks** Sou

  11. Slide 11: Momentum in Consumption Has Resulted in Share Gains

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 1 Momentum in Consumption Has Resulted in Share Gains 11 Core OTC Consumption Growth Core OTC Market Share Consumption Growth Over Time, Accelerating Again Brand Building Leading to Share Gains Excluding PediaCare 8.7% 8.3% (4.9%) (

  12. Slide 12: Recent Trends and Underlying Growth

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 2 5.2% 3.9% (3.5%) (2.4%) 0.0% FY'12 FY'13 FY'14 Q1 Q2 Recent Trends and Underlying Growth 12 * Total Core OTC Brands excluding PediaCare(20) 5.2% 7.1% (1.8%) 0.8% 3.9%  Returning Products  Reduced Cough & Cold Incident Levels  R

  13. Slide 13: International Markets Gaining Importance

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 3 10% 90% International Markets Gaining Importance 13 2014 2011  Distributor model  Predominantly established markets  Local operations in Australia and New Zealand  Beachhead for attractive region  Attractive growth profile In

  14. Slide 14: Disciplined Portfolio Management Strategy

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 4 Disciplined Portfolio Management Strategy 14 Core OTC International Other OTC Household Contribution to Portfolio: # of Brands: 16 4 50 3 Investment: High High Maintain Maintain Targeted Mix Over Time(1)(21): Invest for Growth Man

  15. Slide 15: Capitalize on Efficient and Effective Operating Model

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 5 15 Capitalize on Efficient and Effective Operating Model 2

  16. Slide 16: Margin Expansion and Efficiency Gains Allows for Increased A&P Investment

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 6 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(7)

  17. Slide 17: Prestige Operating Model

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 7 Prestige Operating Model 17 Best-in-Class Outsourced Partners Advertising Logistics Distribution Manufacturing Brand Management Marketing Customer Service IT Finance Product Quality Product Development Sales  Focus on Brand Build

  18. Slide 18: Key Benefits of Our Operating Model

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 8 Key Benefits of Our Operating Model 18  Ensures Organizational Focus on Brand Building  Provides Access to Additional Technical Resources for New Product Development  Broad Base of Manufacturer’s Industry Knowledge  Efficient,

  19. Slide 19: Efficient Organizational Structure Supports Next Phase of Growth

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 1 9 Efficient Organizational Structure Supports Next Phase of Growth 19 Employees  Efficiencies allow organization to build new competencies  Increased investment focused on sales, marketing, and new product development Revenue Adju

  20. Slide 20: Deliver Robust and Consistent Free Cash Flow

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 0 20 Deliver Robust and Consistent Free Cash Flow 3

  21. Slide 21: Drivers of Free Cash Flow

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 1 Drivers of Free Cash Flow 21  Superior EBITDA margin profile  Outsourced manufacturing with minimal capital outlays  Disciplined acquisition strategy with proven integration synergies and structured in a highly tax- efficient m

  22. Slide 22: Industry Leading EBITDA Margins

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 2 Industry Leading EBITDA Margins 22 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% (11) Adjusted EBITDA Margins Median: 22.0% 3 Source: Company filings and Capital IQ

  23. Slide 23: Superior Free Cash Flow Conversion

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 3 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(12) and FCF Conversion(9) Median: 5% ~175% (13) 3 9% 8% 5% 6% 4% 5% 6% 5% 5% 6% 7% 5

  24. Slide 24: Rapid De-Leveraging Builds Acquisition Capacity

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 4 Rapid De-Leveraging Builds Acquisition Capacity 24 Leverage Ratio(14) FY'15E FY'16E FY'17E ~$1.3 BN ~$2.1 BN ~$0.4 BN Illustrative Financing Capacity(15) ~5.6x ~5.3x ~4.5x <4.0x Q2 FY'15 FY'15E FY'16E FY'17E 3  High free cash flo

  25. Slide 25: Execute Proven and Repeatable M&A Strategy

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 5 25 Execute Proven and Repeatable M&A Strategy 4

  26. Slide 26: Recurring Flow of Quality Opportunities in OTC Over Time

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 6 Recurring Flow of Quality Opportunities in OTC Over Time 26 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) (OT

  27. Slide 27: M&A Strategy has Delivered Shareholder Value

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 7 M&A Strategy has Delivered Shareholder Value 27 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

  28. Slide 28: Proven Ability to Source from Varied Sellers

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 8 Proven Ability to Source from Varied Sellers 4 28

  29. Slide 29: Recent Acquisitions Have Transformed Our Business

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 2 9 Recent Acquisitions Have Transformed Our Business 29 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 20

  30. Slide 30: Strengthening Brand Scale in OTC

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 0 Strengthening Brand Scale in OTC 30 FY2010(16) FY2015(17) +3.0x Average: $38MM* Average: $113MM* * Retail Sales Brand Scale in Top 4 OTC Brands 4

  31. Slide 31: •

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 1 31

  32. Slide 32: Q2 Performance Highlights

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 2 Q2 Performance Highlights  Q2 consolidated Total Revenue of $181.3 million, up 8.6% versus the prior year corresponding quarter  Adjusted E.P.S. of $0.50(18), up 6.4% versus the prior year corresponding quarter  Strong Adjusted

  33. Slide 33: Key Drivers of Long-Term Shareholder Value

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 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  Portf

  34. Slide 34: Q&A

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 4 34 Q&A

  35. Slide 35: Appendix

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 5 Appendix 35 (1) Pro forma Net Sales is projected for FY15 as if Insight and Hydralyte were acquired on April 1, 2014. (2) Adjusted EBITDA is a Non-GAAP financial measure and may be found in our earnings releases for each respectiv

  36. Slide 36: Appendix Notes

    I N V E S T O R P R E S E N T A T I O N D E C E M B E R • 2 0 1 4 3 6 (11) Pro Forma Adjusted EBITDA margin is a Non-GAAP financial measure and is arrived at by taking Pro Forma Adjusted EBITDA of $300 million divided by Pro Forma Net Sales of $800 million. Pro Forma Adjusted EBITDA is a projected N

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