Helen Of Troy Limited · NASDAQ:HELE
Helen Of Troy — Investor Presentation (October 2022)
52 slides from Helen Of Troy's investor presentation, October 2022
Slide 1: Investor Presentation October 2022
Invest in Leadership Brands Optimize Double Capital Down on Deployment International Maximize Selective Investor Presentation Operating Efficiency & Strategic M&A October 2022 Accelerate Consumer Shared Service Centric Excellence Unify, Include & Elevate the Best People
Slide 2: Forward Looking Statements and Reconciliation of Non-GAAP Financial Measures
Forward Looking Statements and Reconciliation of Non-GAAP Financial Measures Forward Looking Statements: estimates, expectations regarding recent acquisitions (including Curlsmith and Osprey) and any future acquisitions or divestitures, Certain written and oral statements made by the Company and sub
Slide 3: Evolution of Transformation Strategy
Evolution of Transformation Strategy Phase I: FY15-FY19 Phase II: FY20-FY24 Invest in Leadership Brands Optimize Double Capital Down on Deployment International Maximize Selective Operating & Strategic Efficiency M&A Accelerate Consumer Shared Service Centric Excellence Unify, Include & Elevate the
Slide 4: Strong Portfolio of Leadership Brands
Strong Portfolio of Leadership Brands Leadership Brand Progression ˜19% ˜56% ˜81% ˜44% Leadership Leadership Brands Brands Beginning of FY22 Phase I Phase II Transformation Transformation FY2014 Leadership Brand Net Sales Growth CAGR Differentiated Market Leader 13.3%* 11.1% Higher Margin Growth Adj
Slide 5: Value Creation Flywheel
Value Creation Flywheel Accretive and Low Risk Capital Deployment Leadership Brand Innovation and Investment Low Capex Organic Revenue Growth Working Capital Improvement Margin Expansion Debt and Tax Efficiency High Quality Global Shared Services 5
Slide 6: Highly Experienced Global Leadership Team
Highly Experienced Global Leadership Team Julien Mininberg Chief Executive Officer Noel Geoffroy Matt Osberg Chief Operating Officer Chief Financial Officer Larry Witt Tessa Judge President of Home & Outdoor Chief Legal Officer 2. Conservative RonaldAnderskow Approach to Jack Jancin President of Glo
Slide 7: New Appointments Further Strengthen the Helen of Troy Board of Directors
New Appointments Further Strengthen the Helen of Troy Board of Directors Julien R. Mininberg Timothy F. Meeker Krista L. Berry Vincent D. Carson Chief Executive Officer Chairman Director Director Thurman K. Case Tabata L. Gomez Elena B. Otero Beryl B. Raff Darren G. Woody Director Director Director
Slide 8: Generated Excellent Results in Phase I and Continued Growth in Phase II
Generated Excellent Results in Phase I and Continued Growth in Phase II Revenue ($ in Millions) Adjusted Operating Income ($ in Millions) $2,223 $355 $334 $2,099 $269 $1,707 $239 $224 $1,564 $210 $1,479 $183 $188 $194 $1,383 $1,398 $1,308 $1,335 Adjusted 3.6% 1.0% 5.8% 5.8% 9.2% 14.0% 14.1% 14.0% 15
Slide 9: Strong Growth Through FY22 vs FY20
Strong Growth Through FY22 vs FY20* Fiscal Year Ending February 28, 2022 Core business net sales revenue % Change FY22/FY20 % Change FY22/FY20 Online channel net 30.4% sales revenue Health & 13.4% Wellness** Leadership Brand net 33.1% sales revenue 35.1% Home & Core business net 35.5% Outdoor** sale
Slide 10: Digital Investments Have Fueled Exponential Online Sales Mix Growth
Digital Investments Have Fueled Exponential Online Sales Mix Growth Compared to the Beginning of the Transformation Online Channel Net Sales as a % of Total Company Net Sales 30% 25% 26% 24% 24% +32% 20% Vs FY20 -1.3%* 22% Vs FY21 -0.3% 19% Vs First 15% Half FY22 16% 10% 12% 9% 9% 5% 6% 0% FY14 FY15
Slide 11: Helen of Troy has Evolved into a $2+ Billion Consumer Products Company
Helen of Troy has Evolved into a $2+ Billion Consumer Products Company Legacy ~$2.2B Diversification Transformation I $1.5B+ Transformation II Revenue $1.0B+ $500M+ $100M+ 1968 1975 1980 1985 1990 1995 2000 2005 2010 2015 2019 2022 2022 Fiscal Year 11 * Source: Public Fundamental Data provided by Mo
Slide 12: Proven Ability to Deploy Capital and Invest in Attractive Assets
Proven Ability to Deploy Capital and Invest in Attractive Assets Legacy Diversification Transformation 1968 – 2003 2004 – 2013 2014 – to present ~$500 million ~$1.1 Billion ~$2+ Billion • Strategic licensing partnerships • Low/no organic growth • Invested in organic growth & strategic acquisition •
Slide 13: Capital Allocation Priorities Deployment
Capital Allocation Priorities Deployment $1,547.2 $1,253.2 $297.5 1. Invest in core $78.7 business 2. Pay down debt amended and extended fully $448.0 paid up 100-year license $887.4 millions 3. Accretive acquisitions 4. Return of Capital to Shareholders $726.5 $362.3 Phase I Phase II to date FY15- F
Slide 14: Increasing Efficiency Through New World-Class Distribution Center
Increasing Efficiency Through New World-Class Distribution Center 2 Million Square Foot Facility, Systems and Automation Automation and robotics are faster and more efficient at processing large order volumes Best in class systems and automation Cloud-based Artificial intelligence that learns and ad
Slide 15: Second Quarter Fiscal 2023 Results
Second Quarter Fiscal 2023 Results* Key Second Quarter Takeaways Core Sales in Millions Core Adjusted Diluted EPS Core sales growth of 11.1% year over year, reflecting: • growth from the acquisitions of Osprey and Curlsmith 11.1% vs. Q2 FY22 -14.3% vs. Q2 FY22 • increase in sales in the Health & Wel
Slide 16: Second Quarter Fiscal 2023 Shows Growth vs. Pre-COVID-19 Second Quarter Fiscal 2020
Second Quarter Fiscal 2023 Shows Growth vs. Pre-COVID-19 Second Quarter Fiscal 2020 Second Quarter Fiscal 2023 Core business net sales revenue % Change Q2 FY23/FY20 % Change Q2 FY23/FY20 Online channel net 17.1% sales revenue Health & 13.7% Wellness @ Leadership Brand net 36.5% sales revenue* ^ 43.3
Slide 17: YTD Fiscal 2023 Shows Growth vs. Pre-COVID-19 YTD Fiscal 2020
YTD Fiscal 2023 Shows Growth vs. Pre-COVID-19 YTD Fiscal 2020 YTD Fiscal 2023 Core business net sales revenue % Change Q2 YTD FY23/FY20 % Change Q2 YTD FY23/FY20 Online channel net 22.3% sales revenue Health & 11.4% Wellness @ Leadership Brand net 40.2% sales revenue* ^ 51.8% Home & Core business ne
Slide 18: Updated Fiscal 2023 Annual Outlook
Updated Fiscal 2023 Annual Outlook Expected Expected Core Our consolidated net sales and EPS outlooks reflect the following Consolidated Consolidated Growth/(Decline) assumptions: Growth/(Decline) • the severity of the cough/cold/flu season will be in line with pre- COVID historical averages; • Sept
Slide 19: Macro Headwinds Impacting FY23 and Slowing Phase II CAGRs
Macro Headwinds Impacting FY23 and Slowing Phase II CAGRs Core Net Sales ($ in millions) * Core Adjusted Diluted EPS * FY23 Outlook: FY23 Decline of 8.6% Outlook: to 6.4% vs. FY22 Decline of 26.1% to 22.8% vs. FY22 $2,189 $2,000 $12.18 $2,020 to $11.03 $2,050 $9.00 $8.72 $1,615 to $7.27 $9.40 $1,461
Slide 20: FY23 Launches Provide Building Blocks for Growth
FY23 Launches Provide Building Blocks for Growth Beauty Appliances (ULTA , Amazon, Professional) (ULTA, Other) (ULTA ,Target ,Professional) Dual Plate Flat Iron One-Step Blowout Smoothstay Coconut Collection Infra-Boost Curls Dryer & Styler Dryer Quiet Air Dryer 24K One-Step SteamStyler Pro Signatur
Slide 21: FY23 Launches Provide Building Blocks for Growth
FY23 Launches Provide Building Blocks for Growth Drybar August 2022: Agua Fresca Hydrating Collection January 2023: Crown Tonic Pre- January 2023: Detox Gentle Dry August 2022: The Half Shot September 2022: The Straight (Shampoo, Conditioner, Leave-in Conditioning Milk) Shampoo Scalp Balancing Clean
Slide 22: FY23 Launches Provide Building Blocks for Growth
22 FY23 Launches Provide Building Blocks for Growth OXO Manual Coffee Grinder Hot Clean Grill Brush Fridge Organization Suite Compact Can Opener Prep & Carry System Over-the-Sink Dish Rack Chopper Launch 22
Slide 23: FY23 Launches Provide Building Blocks for Growth
FY23 Launches Provide Building Blocks for Growth Hydro Flask Jan ‘22 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan ‘23 Feb New Fall Colors Goji, Indigo New Spring Colors Bottle “Trade In” (Jan Launch) Bark Mug Chug Cap Configs Carry Out Coolers Holiday Teaser SM Flex Straw and Config WM Straw Acce
Slide 24: FY23 Launches Provide Building Blocks for Growth
FY23 Launches Provide Building Blocks for Growth Health & Wellness Leadership Brand Reflection Cool Mist Ultra Comfort Mini Mist Dual Comfort Sleek Thermawave 6 TurboForce Insight HEPA Insight HEPA Allergen Plus Humidifier Humidifier Humidifier Humidifier Heater Power+ Fan Colors Air Purification Ai
Slide 25: Launched Project Pegasus to Expand Operating Margins and Create Efficiency
Launched Project Pegasus to Expand Operating Margins and Create Efficiency Further optimize • Review our businesses to ensure they are right for our long-term portfolio, profitability, and growth targets. our brand portfolio • Deploy capital on acquisitions that add fast-growing brands in on-trend c
Slide 26: Pegasus Targets Pre-Tax Operating Profit Improvements of $75M-$85M
Pegasus Targets Pre-Tax Operating Profit Improvements of $75M-$85M 1 2 3 4 5 Total one-time Impacts all pre-tax operating Targeted annualized pre- Estimated cadence of Total profit Total one-time pre- Impacts segments all operating and restructuring tax operating profit the recognition of the improv
Slide 27: Integrating ESG into our Businesses
Integrating ESG into our Businesses Supplier Engagement Became members of the Carbon Disclosure Project Supply Chain Program and BSCI, organizations that strengthen support to Supplier our suppliers on Engagement ESG issues Responsible Packaging Signatory to the New Plastics Economy, an initiative t
Slide 28: Significant Improvement in External ESG Ratings
Significant Improvement in External ESG Ratings September 2020 September 2021 September 2022 Environmental 8 3 3 Social 4 1 1 Governance 1 1 1 Source: ISS Corporate Solutions. Scale is 10 to 1, with 1 being the highest rating 28
Slide 29: Helen of Troy vs. Proxy Peer Group
Helen of Troy vs. Proxy Peer Group Glassdoor Ratings (Current & Former Associates) Positive Recommend CEO Culture & Diversity & Work/Life Senior Comp. & Number of Overall Business Career Opps. to a Friend Approval Values Inclusion Balance Management Benefits Reviews Outlook Helen of Troy 4.5 94% 88%
Slide 30: Appendix
Helen of Troy Appendix
Slide 31: Glossary of Terms
Glossary of Terms Acquisition-related Expenses – Expenses associated with the definitive agreement to Core and Non-Core Business – Core business is defined as strategic business that the acquire Drybar Products LLC, Osprey and Curlsmith Company expects to be an ongoing part of its operations, and No
Slide 32: Glossary of Terms
Glossary of Terms Leadership Brand Net Sales (LB) – Consists of revenue from the OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar brands Leverage Ratio – Total current and long-term debt plus outstanding letters of credit, divided by EBITDA plus non-cash charges and certa
Slide 33: Reconciliation of Non-GAAP Financial Measures - GAAP Operating Income to Adjusted Operating Income
Reconciliation of Non-GAAP Financial Measures - GAAP Operating Income to Adjusted Operating Income (Non-GAAP) (Unaudited) (in thousands) Fiscal Years Ended Last Day of February, 2022 2021 2020 2019 2018 2017 2016 2015 2014 Operating income as reported (GAAP) $ 272,550 12.3 % $ 281,488 13.4 % $ 178,2
Slide 34: Reconciliation of Non-GAAP Financial Measures - GAAP Diluted Earnings Per Share
Reconciliation of Non-GAAP Financial Measures - GAAP Diluted Earnings Per Share (“EPS”) to Adjusted Diluted EPS (Non-GAAP) (Unaudited) Fiscal Years Ended Last Day of February, 2022 2021 2020 2019 2018 2017 2016 2015 2014 Diluted EPS as reported (GAAP) $ 9.17 $ 10.08 $ 6.02 $ 6.62 $ 4.73 $ 5.17 $ 3.2
Slide 35: Reconciliation of Non-GAAP Financial Measures - Free Cash Flow
Reconciliation of Non-GAAP Financial Measures - GAAP Net Cash Provided by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) Fiscal Years Ended Last Day of February, 2022 2021 2020 2019 2018 2017 2016 2015 2014 Net cash provided by operating activities (GAAP) $ 140,823 $ 31
Slide 36: Consolidated Core and Non-Core Net Sales and Adjusted Diluted EPS (Non-GAAP)
Consolidated Core and Non-Core Net Sales and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Years Ended Last Day of February, $ Change % Change 2022 2021 2020 2019 2018 2017 22/21 21/20 20/19 19/18 18/17 22/21 21/20 20/19 19/18 18/17 Sales revenue, net Core
Slide 37: Net Sales Revenue, Diluted EPS and Adjusted Diluted EPS Period Over Period Growth
Net Sales Revenue, Diluted EPS and Adjusted Diluted EPS (Non-GAAP) Period Over Period Growth (Decline) (Unaudited) (in thousands, except per share data) Three Months Ended August 31, % Change 2022 2021 2020 2019 FY23/FY22 FY23/FY21 FY23/FY20 Consolidated net sales revenue $ 521,400 $ 475,228 $ 530,8
Slide 38: Net Sales Revenue, Diluted EPS and Adjusted Diluted EPS Period Over Period Growth
Net Sales Revenue, Diluted EPS and Adjusted Diluted EPS (Non-GAAP) Period Over Period Growth (Decline) (Unaudited) (in thousands, except per share data) Year Ended Last Day of February, % Change 2022 2021 2020 FY22/FY21 FY22/FY20 Consolidated net sales revenue $ 2,223,355 $ 2,098,799 $ 1,707,432 5.9
Slide 39: Reconciliation of Non-GAAP Financial Measures - GAAP Core and Non-Core Diluted EPS
Reconciliation of Non-GAAP Financial Measures - GAAP Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (Unaudited) Fiscal Years Ended Last Day of February, Core Business: 2022 2021 2020 2019 2018 2017 Diluted EPS, as reported $ 9.00 $ 9.76 $ 7.16 $ 5.89 $ 4.72 $ 4.88
Slide 40: Consolidated Core and Non-Core Net Sales
Consolidated Core and Non-Core Net Sales (Unaudited) (in thousands) Quarterly Period Ended Fiscal Year 2022: May August November February Fiscal Year Total Sales revenue, net Core $ 521,104 $ 469,485 $ 620,509 $ 578,141 $ 2,189,239 Non-Core 20,119 5,743 4,375 3,879 34,116 Total $ 541,223 $ 475,228 $
Slide 41: Core and Non-Core Adjusted Diluted EPS (Non-GAAP)
Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (Unaudited) Quarterly Period Ended Fiscal Year 2022: May August November February Fiscal Year Total Adjusted Diluted EPS (non-GAAP) Core $ 3.31 $ 2.65 $ 3.72 $ 2.51 $ 12.18 Non-Core 0.17 — — — 0.18 Total $ 3.48 $ 2.65 $ 3.72 $ 2.51 $ 12.36 Quarterly
Slide 42: Reconciliation of Non-GAAP Financial Measures - Core and Non-Core Diluted EPS FY2022
Reconciliation of Non-GAAP Financial Measures - GAAP Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (Unaudited) for Fiscal Year 2022 Quarterly Period Ended Core Business: May August November February Fiscal Year 2022 Diluted EPS, as reported $ 2.15 $ 2.11 $ 3.10 $
Slide 43: Reconciliation of Non-GAAP Financial Measures - Core and Non-Core Diluted EPS FY2021
Reconciliation of Non-GAAP Financial Measures - GAAP Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (Unaudited) for Fiscal Year 2021 Quarterly Period Ended Core Business: May August November February Fiscal Year 2021 Diluted EPS, as reported $ 2.27 $ 3.22 $ 3.19 $
Slide 44: Reconciliation of Non-GAAP Financial Measures - Core and Non-Core Diluted EPS FY2020
Reconciliation of Non-GAAP Financial Measures - GAAP Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (Unaudited) for Fiscal Year 2020 Quarterly Period Ended Core Business: May August November February Fiscal Year 2020 Diluted EPS, as reported $ 1.52 $ 1.71 $ 2.62 $
Slide 45: Reconciliation of Non-GAAP Financial Measures - Net Income and Diluted EPS to Adjusted
Reconciliation of Non-GAAP Financial Measures - GAAP Net Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Three Months Ended August 31, 2022 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As report
Slide 46: Reconciliation of Non-GAAP Financial Measures - Net Income and Diluted EPS to Adjusted
Reconciliation of Non-GAAP Financial Measures - GAAP Net Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Three Months Ended August 31, 2020 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As report
Slide 47: Reconciliation of Non-GAAP Financial Measures - Net Income and Diluted EPS to Adjusted
Reconciliation of Non-GAAP Financial Measures - GAAP Net Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Six Months Ended August 31, 2022 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported
Slide 48: Reconciliation of Non-GAAP Financial Measures - Net Income and Diluted EPS to Adjusted
Reconciliation of Non-GAAP Financial Measures - GAAP Net Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Six Months Ended August 31, 2020 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported
Slide 49: Reconciliation of Non-GAAP Financial Measures - Net Income and Diluted EPS to Adjusted
Reconciliation of Non-GAAP Financial Measures - GAAP Net Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Year Ended February 28, 2022 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As repor
Slide 50: Updated Fiscal 2023 Outlook for Net Sales Revenue
Updated Fiscal 2023 Outlook for Net Sales Revenue (Unaudited) (in thousands) Consolidated: Fiscal 2022 Updated Outlook for Fiscal 2023 Net sales revenue $ 2,223,355 $ 2,000,000 — $ 2,050,000 Net sales revenue decline (10.0)% — (7.8)% Core Business: Net sales revenue $ 2,189,239 $ 2,000,000 — $ 2,050
Slide 51: Reconciliation of Non-GAAP Financial Measures - Updated Fiscal 2023 Outlook for GAAP Diluted EPS
Reconciliation of Non-GAAP Financial Measures - Updated Fiscal 2023 Outlook for GAAP Diluted EPS to Adjusted Diluted EPS (Non-GAAP) (Unaudited) Outlook for the Balance of the Six Months Ended Fiscal Year Consolidated & Core Business August 31, 2022 (Six Months) Updated Outlook Fiscal 2023 Diluted EP
Slide 52: Reconciliation of Non-GAAP Financial Measures - Updated Fiscal 2023 Outlook for Effective Tax Rate
Reconciliation of Non-GAAP Financial Measures - Updated Fiscal 2023 Outlook for Effective Tax Rate (GAAP) to Adjusted Effective Tax Rate (Non-GAAP) (Unaudited) Outlook for the Balance of the Six Months Ended Fiscal Year Consolidated & Core Business August 31, 2022 (Six Months) Updated Outlook Fiscal