Slide 1: Q2 2023 Earnings
Q2 2023 Earnings August 3, 2023
Slide 2: Use of Non-GAAP Financial Measures
USE OF NON-GAAP FINANCIAL MEASURES Supplemental Financial Data The financial tables accompanying this presentation include non-GAAP financial measures as defined under SEC rules, specifically Adjusted operating profit, Adjusted net earnings and Adjusted net earnings per diluted share, which exclude,
Slide 3: Safe Harbor
Safe Harbor Certain statements in this presentation contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: our business
Slide 4: Sale of eOne Film/TV
Sale of eOne Film/TV Deal Commentary Definitive agreement to sell eOne Film and TV to Lionsgate for approximately $500M • $375M cash and the assumption of production financing loans Purchase includes: ‣ Team of talented employees ‣ 6,500 asset content library ‣ Active productions for non- Hasbro own
Slide 5: Second Quarter Highlights
Second Quarter Highlights Second quarter revenue, operating profit, inventory reduction REPORTED ADJUSTED and cost savings initiatives at or ahead of plan $1.2B $1.2B Announced sale of eOne film and TV business to Lionsgate; expect Net Revenue -10% -10% to close transaction by year-end 2023 Compelli
Slide 6: Hasbro's Transformation
Hasbro’s Transformation Execute Blueprint 2.0 Operate with Excellence Strengthen Balance Sheet Enhance Hasbro’s Gaming Focus on bottom line leadership, both tabletop and digital performance by prioritizing Invest to drive profitable growth fewer, bigger brands Double-down on fewer, Deliver Operation
Slide 7: Operational Excellence Program
Operational Excellence Program Planned Annualized Run Rate Savings vs Cost to Achieve Forecasted 2025 Savings Breakdown $300 40% 38% Annualized SD&A Cost of Sales $250 Run Rate $145 Cost to Achieve $150 $50 $40 $15 2022A 2023F 2024F 2025F 12% 10% 2022A 2023F 2024F Royalty Product Expenses Developmen
Slide 8: Second Quarter 2023 Building Momentum
Second Quarter 2023 Building Momentum 8
Slide 9: Hasbro Inc. Second Quarter 2023 Performance
Hasbro Inc. Second Quarter 2023 Performance Wizards of Q2 2023 Reported Results Consumer Corporate the Coast & Entertainment Hasbro ($ millions, except earnings per share) Products & Other Digital Gaming Revenue $376 $655 $179 N/A $1,210 % vs PY -11% -11% -3% N/A -10% Operating Profit (Loss) $142 $1
Slide 10: Second Quarter 2023 Performance - As Adjusted
Hasbro Inc. Second Quarter 2023 Performance-As Adjusted Wizards of Q2 2023 Adjusted Results Consumer Corporate the Coast & Entertainment Hasbro ($ millions, except earnings per share) Products & Other Digital Gaming Revenue $376 $655 $179 N/A $1,210 % vs PY -11% -11% -3% N/A -10% Operating Profit (L
Slide 11: Hasbro Inc. Six Months 2023 Performance
Hasbro Inc. Six Months 2023 Performance Wizards of YTD 2023 Reported Results Consumer Corporate the Coast & Entertainment Hasbro ($ millions, except earnings per share) Products & Other Digital Gaming Revenue $671 $1,176 $365 N/A $2,211 % vs PY -2% -16% -12% N/A -12% Operating Profit (Loss) $219 ($3
Slide 12: Six Months 2023 Performance - As Adjusted
Hasbro Inc. Six Months 2023 Performance-As Adjusted Wizards of YTD 2023 Adjusted Results Consumer Corporate the Coast & Entertainment Hasbro ($ millions, except earnings per share) Products & Other Digital Gaming Revenue $671 $1,176 $365 N/A $2,211 % vs PY -2% -16% -12% N/A -12% Operating Profit (Lo
Slide 13: Brand Portfolio Performance
Brand Portfolio Performance Q2 2023 Brand Category Highlights Net Revenue by Brand Portfolio Q2 2023 Q2 2022 % Change YTD 2023 YTD 2022 % Change Franchise Performance Second quarter growth in TRANSFORMERS Franchise Brands1 $788 $826 -5% $1,402 $1,476 -5% (+83%), DUNGEONS & DRAGONS (+74%), and PEPPA
Slide 14: Q2 2023 Operating Margin Performance
Q2 2023 Operating Margin Performance As Reported Operating Profit Margin Drivers Adjusted Operating Profit Margin Drivers {$ millions) {$ millions) @2 2022 Op Profit Margin 16.4% $219 eae a Bbote Margi 18.0% $241 Volume & Mix* -4.9 pts ($79) Volume & Mix* -4.7 pts ($79) Royalties -1.7 pts ($21) Roya
Slide 15: Owned Inventory Reduction
Owned Inventory Reduction Inventory Summary Total Hasbro Consumer Products Q1 Q2 Q1 Q2 900 900 -16% +11% 800 800 700 700 -24% $677 FY 2022 +1% 600 600 $529 500 FY 2022 500 400 400 300 300 200 200 100 100 0 0 ‘22Q1 2023‘23 ‘22Q2 2023‘23 ‘22 ‘22 Q1 ‘23 ‘23 ‘22Q2 2023‘23 1
Slide 16: Wizards of the Coast & Digital Gaming Segment
Wizards of the Coast & Digital Gaming Segment 16
Slide 17: Wizards of the Coast and Digital Gaming Performance
Wizards of the Coast and Digital Gaming Performance Q2 Margin Commentary Total Operating Margin of 37.9% vs. 53.7% LY 2022 Q2 Magic Releases 2023 Q2 Magic Releases (-) Higher royalty expense (-) Product Mix and fixed cost absorption 4 3 (-) Investment in talent & infrastructure Major Sets Major Sets
Slide 18: Consumer Products Segment
Consumer Products Segment 18
Slide 19: Hasbro Q2 Share in Focus Categories
Hasbro Q2 Share in Focus Categories Focus Categories – Q2 2023 Category Hasbro Hasbro Hasbro Action Figures & Accessories Focus Category Growth Share Change Share Position TRANSFORMERS revenue and POS growth Action Figures & -17.0% +3.2 pts 25.2% 1 Arts & Crafts Accessories PLAY-DOH growth in POS Ar
Slide 20: Consumer Products Performance
Consumer Products Performance Q2 2023 Revenue Bridge YTD 2023 Revenue Bridge Business Toy & Game Toy & Game 1% FX Business Toy & Game Toy & Game 1% FX Exits Volume Rate/Mix Total Exits Volume Rate/Mix Total Licensed 0% Licensed CP CP -1% -3% -4% -4% -5% -5% -7% -11% -16% Key Business Drivers Q2 Marg
Slide 21: Entertainment Segment
t Entertainmen Segment @ ‘S Nes we al a cs # “Oo ul Oo 21
Slide 22: Entertainment Segment Performance
Entertainment Segment Performance Q2 2023 Revenue Bridge YTD 2023 Revenue Bridge 4% Business Business Exits FX Total Exits Volume FX Total Volume -1% -1% -3% -6% -5% -5% -12% Key Business Drivers Q2 Margin Commentary Revenue decline primarily due to exited businesses Total Adjusted Operating Margin
Slide 23: Entertainment Segment Financials and Deal Perimeter
Entertainment Segment Financials and Deal Perimeter Other Comments 2022 Entertainment Revenue & Adjusted Operating Profit $1,000 • eOne deal perimeter • Approximately 85% of $800 2022 Entertainment Segment Revenue $600 • Approximately 60% of 2022 Entertainment $400 Segment Adjusted Operating Profit
Slide 24: Total Hasbro Inc. Cash Flow and Metrics
Total Hasbro Inc. Cash Flow and Metrics Other Highlights • Repaid $91M of long-term debt Operating Cash Flow YTD 2023 • Adjusted Underlying Tax Rate in Q2 of 26.3% vs. 21.6% prior year; YTD 27.7% vs. 22.0% prior year $373 • Additional Interest Expense of $5M in Q2 and $10M YTD • Returned $97M cash t
Slide 25: Updated Guidance for 2023
Updated Guidance for 2023 Previous Updated Other Key Assumptions Total Revenue Down LSD Down 3-6% • Cost savings on track for $150M in-year; no change to Consumer Products Down MSD Down MSD long-range targets Wizards of the Coast Up MSD Up HSD Entertainment Up LSD Down 25-30% • Underlying adjusted t
Slide 26: Supplemental Financial Information
Supplemental Financial Information
Slide 27: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets 27
Slide 28: Condensed Statements of Operations
Condensed Statements of Operations 28
Slide 29: Condensed Consolidated Cash Flows
(MILLIONS OF DOLLARS) (UNAUDITED) Condensed Consolidated Cash Flows 29
Slide 30: YTD 2023 Operating Margin Performance
YTD 2023 Operating Margin Performance As Reported Operating Profit Margin Drivers Adjusted Operating Profit Margin Drivers ($ millions) ($ millions) YTD 2022 Op Profit Margin YTD 2022 Op Profit Margin 13.6% $339 15.3% $383 (Adjusted) Volume & Mix -4.4 pts ($134) Volume & Mix -4.3 pts ($134) Royaltie
Slide 31: Second Quarter 2023 Major Expense Items
$ MILLIONS, UNAUDITED Second Quarter 2023 Major Expense Items Q2 2023 % CHANGE Adjusted* NOTES Q2 2023 Q2 2022 Adjusted* % OF Below exclude non-GAAP Q2 2023 Adjusted* Q2 2022 Adjusted* YOY REVENUE adjustments Lower revenues; mix shift; Cost of Sales $352 $352 $412 $412 -14% 29.1% Reduced costs parti
Slide 32: Six Months 2023 Major Expense Items
$ MILLIONS, UNAUDITED Six Months 2023 Major Expense Items Six Mo. 2023 Six Months Six Months % CHANGE Adjusted* NOTES Six Months 2023 Six Months 2022 Adjusted* % OF Below exclude non-GAAP 2023 Adjusted* 2022 Adjusted* YOY REVENUE adjustments Incremental expense for Cost of Sales $638 $638 $745 $745
Slide 33: Key Cash Flow and Balance Sheet Data
Key Cash Flow and Balance Sheet Data $ Millions, unaudited YTD 2023 YTD 2022 NOTES Cash $217 $628 Expect cash position to improve as the year progresses given the phasing of revenue Long-term Debt $3,669 $3,739 Paid down $91M in long-term Debt YTD 2023 Depreciation $55 $62 FY 2023 depreciation targe
Slide 34: Segment Results - As Reported and As Adjusted - Q2 2023
(UNAUDITED) (MILLIONS OF DOLLARS) Segment Results - As Reported and As Adjusted-Q2 2023 34
Slide 35: Segment Results - As Reported and As Adjusted - Q2 2023 Continued
(UNAUDITED) (MILLIONS OF DOLLARS) Segment Results - As Reported and As Adjusted-Q2 2023 Continued 35
Slide 36: Segment Results - As Reported and As Adjusted - Q2 2023 Continued
(UNAUDITED) (MILLIONS OF DOLLARS) Segment Results - As Reported and As Adjusted-Q2 2023 Continued 36
Slide 37: Segment Results - As Reported and As Adjusted - Six Months 2023
(UNAUDITED) (MILLIONS OF DOLLARS) Segment Results - As Reported and As Adjusted-Six Months 2023 37
Slide 38: Segment Results - As Reported and As Adjusted - Six Months 2023 Continued
(UNAUDITED) (MILLIONS OF DOLLARS) Segment Results - As Reported and As Adjusted-Six Months 2023 Continued 38
Slide 39: Segment Results - As Reported and As Adjusted - Six Months 2023 Continued
(UNAUDITED) (MILLIONS OF DOLLARS) Segment Results - As Reported and As Adjusted-Six Months 2023 Continued 39
Slide 40: Reconciliation of Non-GAAP Financial Measures
(UNAUDITED) (MILLIONS OF DOLLARS) Reconciliation of Non-GAAP Financial Measures 40
Slide 41: Reconciliation of Non-GAAP Financial Measures
(UNAUDITED) (MILLIONS OF DOLLARS) EBITDA Reconciliation of Non-GAAP Financial Measures 41
Slide 42: Reconciliation of Non-GAAP Financial Measures
(UNAUDITED) (MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA) Reconciliation of Non-GAAP Financial Measures 42