Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Investor Presentation (June 2019)
42 slides from Spectrum Brands's investor presentation, Jun 11, 2019
Slide 1: Montréal Investors
Montréal Investors June 11, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains, and certain oral and written statements made by our representatives from time to time may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements m
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. Management believes that organic net sales pr
Slide 4: Portfolio of Leading Brands
Portfolio of Leading Brands 4
Slide 5: Spectrum 20/20
Spectrum 20/20 Culture of Sustainable Cash Flow Accountability Focus Customer-Driven with Operational Outstanding Service Excellence Experienced Invest in the Leadership Team Business 5
Slide 6: The New Spectrum Brands FY 2018 Financials
The New Spectrum Brands Spectrum 20/20 FY 2018 Financials Net Sales* $3.8 billion Adjusted EBITDA** $581 million 6 * Pro forma FY 2018 as of September 30, 2018 – end of FY18 Q4. ** Total Company Adjusted EBITDA includes (6%) of corporate costs not allocated to the segments.
Slide 7: The New Spectrum Brands
The New Spectrum Brands Hardware & Home Improvement 36% of Net Sales* 44% of Adjusted EBITDA** Home & Personal Care 29% of Net Sales* 20% of Adjusted EBITDA** Pet Care 22% of Net Sales* 24% of Adjusted EBITDA** Home & Garden 13% of Net Sales* 18% of Adjusted EBITDA** 7 * Pro forma FY
Slide 8: Hardware & Home Improvement
Hardware & Home Improvement Hardware & Home Improvement 36% of Net Sales* Leading provider of residential locksets, builders’ 44% of Adjusted EBITDA** hardware, and plumbing and accessories Leading market positions: FY 2018 Financials ‐ #1 in U.S. residential and luxury locksets ‐ #1 in U.S. bui
Slide 9: Home & Personal Care
Home & Personal Care Home & Personal Care 29% of Net Sales * Value brands appeal to consumers 20% of Adjusted EBITDA** Leading market positions: ‐ #1 in U.S. grills, garment care FY 2018 Financials ‐ #1 in U.K. kitchen/home products ‐ #1 hair care brand in Europe Net Sales* $1.1 billion ‐ #2 in
Slide 10: Pet Care
Pet Care Pet Care 22% of Net Sales* Global market leader in aquatics category 24% of Adjusted EBITDA** Leading market positions: ‐ #1 in global rawhide chews FY 2018 Financials ‐ #1 in global aquatics ‐ #2 in global pet care supplies Net Sales* $820 million Broad and innovative product line le
Slide 11: Home & Garden
Home & Garden Home & Garden 13% of Net Sales* Leading market positions: 18% of Adjusted EBITDA** ‐ #1 in outdoor insect control ‐ #2 in outdoor controls (weed & grass control) FY 2018 Financials Strong new product pipeline Net Sales* $482 million and distribution gains Operational excellence A
Slide 12: Key Messages for 2019
Key Messages for 2019 1 Newly transformed Spectrum Brands has significant potential 2 We are strategically investing behind our 4 core business units 3 New Spectrum Brands is a compelling investment opportunity 12
Slide 13: Key Messages for 2019
Key Messages for 2019 1 Newly transformed Spectrum Brands has significant potential 2 We are strategically investing behind our 4 core business units 3 New Spectrum Brands is a compelling investment opportunity 13
Slide 14: Divestiture of Global Battery & Lighting and Global Auto Care
Divestiture of Global Battery & Lighting and Global Auto Care Simplified portfolio for greater focus FY 2018 FY 2018 Business Segment Brands Proceeds Multiple Revenue Adjusted EBITDA Global Battery & $2 billion $871 million $146 million 13.7x Lighting All cash 17% margin $1.25 billion $466 million $
Slide 15: Materially Improved Capital Structure
Materially Improved Capital Structure SECURED DEBT NET LEVERAGE ELIMINATED Secured TERMDebt Bank LOAN REDUCED CAPITAL LEASES STRENGTHENED NetBALANCE SHEET Leverage 5.2 $1,530 3.5 $303 9/30/18 9/30/19 EST. 9/30/18 3/31/19 15
Slide 16: Top Brands Driving Customer and Consumer Value
Top 15 Brands Driving Customer and Consumer Value Represents ~80% of FY18 pro forma revenues of $3.8 billion from continuing operations 16
Slide 17: Global Reach
Global Reach ($2,783 million *) ($212 million*) ($669 million*) ($126 million*) 17 * Pro forma FY 2018 as of September 30, 2018 – end of FY18 Q4. .
Slide 18: Key Messages for 2019
Key Messages for 2019 1 Newly transformed Spectrum Brands has significant potential 2 We are strategically investing behind our 4 core business units 3 New Spectrum Brands is a compelling investment opportunity 18
Slide 19: Significant FY 2019 Innovation
Significant FY 2019 Innovation Hardware & Home Improvement Home & Personal Care Pet Care Home & Garden 19
Slide 20: HHI Innovation “Coming Soon” Hero Products
HHI Innovation “Coming Soon” Hero Products • Apple Home Kit Compatible with • Commercial Graded for High Traffic Areas Blue Tooth Low Energy (BLE) • Clean robust metallic design for durability • Sleek new contemporary look • Industry Standard Fire Rating (UL) • On trend Matte Black finish • Featurin
Slide 21: Toaster Oven
INTRODUCING TOASTER OVEN Anniversary 2018 BLACK+DECKER Air Fry Toaster Oven Success #5 Toaster Oven SKU in total market 2018 NEW Air Fry Toaster Oven SKUs launching in 2019 Fall 2019 on-shelf for Holiday *#1 Brand in Toaster Ovens in the USA– Source: NPD POS, data as of Nov. 2018.
Slide 22: Nature’s Miracle Advanced Platinum Disinfectant Line
Nature’s Miracle Advanced Platinum Disinfectant Line Disinfectant formulas that specifically target pet viruses June 2019 on-shelf Estimated $3M Annual POS Search, social and influencer campaigns, and in-store displays & videos to support
Slide 23: Team to Confirm Walmart Statement
TEAM TO CONFIRM WALMART STATEMENT 23
Slide 24: Patented, innovative design in pet treats
Patented, innovative design in pet treats Entire line listed at U.S. mass channel and others April 2019 on-shelf Estimated $3M Annual POS Social, digital & influencer media to support the launch
Slide 25: Hot Shot Ant, Roach & Spider Killer
Hot Shot Ant, Roach & Spider Killer • Our strongest formula ever! • Providing customers and consumers with exactly what they need • April 2019 on-shelf • TV, digital, search and social campaigns, online content and videos, along with in-store displays & support
Slide 26: Spectracide Weed Stop For Lawns
Spectracide Weed Stop For Lawns • Our fastest-working lawn weed killer ever! • Broad national distribution and additional in- store displays & support • March 2019 on-shelf • TV, digital, search and social campaigns, online content and videos
Slide 27: Home & Garden Marketing Initiatives
Home & Garden Marketing Initiatives - Targeted campaign to reach the right consumers at the right time with the right message - Focus on best-in-class content TV Online Shopping Print In-Store Video Social Media Digital Out of Home Search Engine Optimization 27
Slide 28: Major FY 2019 Distribution Wins
Major FY 2019 Distribution Wins • Category: Outdoor controls • Channels: Big box, mass and food Home & Garden • Region: U.S. • Category: Dog chews/treats • Channel: Mass • Region: U.S. Global Pet Pet CareCare • Category: Aquatics • Channels: Mass, pet specialty, online • Region: U.S. Hardware • Cate
Slide 29: Major FY 2019 Distribution Wins
Major FY 2019 Distribution Wins • Category: Appliances • Channel: Mass • Region: U.S. Home Appliances • Category: Appliances • Channel: Mass • Region: Europe Home Appliances • Category: Hair care & grooming • Channel: Food • Region: Europe Personal Personal Care Care • Category: Women’s hair care •
Slide 30: Accelerating E-Commerce Sales by Enhancing Internal Capabilities
Accelerating E-Commerce Sales by Enhancing Internal Capabilities - Increasing dedicated staff and expanding toolsets and cross-divisional cooperation ‐ Amazon a top 5 customer in FY 2018 ‐ Attractive margin structure ‐ Greater price-value transparency, ratings and reviews E-Commerce Share of FY 2018
Slide 31: Key Messages for 2019
Key Messages for 2019 1 Newly transformed Spectrum Brands has significant potential 2 We are strategically investing behind our 4 core business units 3 New Spectrum Brands is a compelling investment opportunity 31
Slide 32: Compelling Investment Opportunity
Compelling Investment Opportunity Leading Brands with Barriers to Strong Balance Sheet with Shareholder Friendly Entry and Long-Standing Retailer Ample Liquidity Capital Allocation Relationships Strong Cash Flow Generation and 5.3 Million Share Valuable NOLs (~$1.3 Billion) Ownership in Energizer 32
Slide 33: Capital Allocation Priorities
Capital Allocation Priorities Strong cash flow generation and improved balance sheet resulting in capital allocation optionality Opportunistic Share Reinvest Profitably Maintain Strong Uses of Cash Debt Paydown Disciplined M&A Repurchases in the Business Dividend Improved balance Repurchased $250
Slide 34: FY 2019 Outlook
FY 2019 Outlook Year of stabilization and focus following transformational and transitional FY 2018 Adjusted EBITDA from continuing operations expected to be between $560–$580 million Significant increase in advertising, marketing, selling, R&D and innovation spending Reported net sales grow
Slide 35: Appendix
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Slide 36: Reconciliations
Reconciliations Spectrum Brands Holdings, Inc. Reconciliation of Pre-Tax Income From Continuing Operations to Adjusted EBITDA For the Fiscal Year Ended September 30, 2018 (in millions, unaudited) HHI HPC PET H&G CORP TOTAL Pre-tax income from continuing operations $ 156 $ 94 $ 35 $ 88 $ (407) $ (34)
Slide 37: Q2 2019 Overview
Q2 2019 Overview Q2 2019 Financials Net Sales $906.7 million 2.7% increase Adjusted EBITDA $115.6 million 0.3% decrease • Q2 results were in line with our expectations ‐ All four business units delivered organic growth • Adjusted EBITDA was flat with last year, and right on our first half plan • We
Slide 38: Hardware & Home Improvement Q2 2019 Overview
Hardware & Home Improvement Q2 2019 Overview HHI Q2 Financials Net Sales $331.1 million 4.0% increase Adjusted EBITDA $52.7 million 15.8% increase • 4% reported net sales growth was broad-based across residential security, plumbing and builders’ hardware • Adjusted EBITDA grew 16% from higher volume
Slide 39: HPC Q2 2019 Overview
HPC Q2 2019 Overview HPC Q2 Financials Net Sales $221.7 million 4.1% decrease Adjusted EBITDA $4.5 million 77.6% decrease • Net sales fell 4%, while organic sales grew 1% • Decreases in adjusted EBITDA and margin were mainly attributable to lower gross margin from reduced personal care volumes, unfa
Slide 40: Pet Care Q2 2019 Overview
Pet Care Q2 2019 Overview Pet Care Q2 Financials Net Sales $214.9 million 1.8% increase Adjusted EBITDA $32.8 million 8.1% decrease • Building on solid Q1 top-line growth, Q2 reported net sales increased 2% • Double-digit improvement in U.S. companion animal revenues, primarily dog chews and treats
Slide 41: Home & Garden Q2 2019 Overview
Home & Garden Q2 2019 Overview H&G Q2 2019 Financials Net Sales $139.0 million 14.1% increase Adjusted EBITDA $29.6 million 17.0% increase • 14% net sales increase was attributable to double-digit growth in outdoor control category • Distribution wins, strong early season home center orders, and gen
Slide 42: Spectrum Brands
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