Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — FY2022 Earnings Presentation
39 slides from Prestige Consumer Healthcare's earnings presentation, May 6, 2022
Slide 1: Full-Year FY 22 Results & Business Attributes Review
M a y 6 th, 2 0 2 2 Full-Year FY 22 Results & Business Attributes Review
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding the Company’s expected financial performance, including revenues, diluted EPS, free cash flow, and organic r
Slide 3: Agenda for Today's Discussion
Agenda for Today’s Discussion I. FY 22 and Evolution Recap II. Investing for Growth III. Financial Strategy & Capital Allocation IV. The Road Ahead & FY 23 Outlook FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW 3
Slide 4: I. FY 22 and Evolution Recap
I. FY 22 and Evolution Recap FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW
Slide 5: Proven Strategy & Execution Delivered Record FY 22 Results
Proven Strategy & Execution Delivered Record FY 22 Results ◼ Strong sales growth in FY 22 up 15.2% vs. PY FY 22 Sales ◼ Continued strength in consumer behavior Drivers ◼ Recovery in most COVID-19 impacted categories ◼ Gross margin as expected in dynamic supply chain environment Superior Earnings ◼ S
Slide 6: Record FY 22 Enabled by Long-Term Evolution
Record FY 22 Enabled by Long-Term Evolution Portfolio Brand Capital Consistent Transformation Building Allocation Performance Continued portfolio evolution Brand-building strategy driving Repositioned long-term capital Successfully navigated dynamic reinforces long-term growth growth across categori
Slide 7: History of Superior Performance
History of Superior Performance Proven Ability to Execute Value Creation Strategy 1 Investing for Growth with Proven Brand-Building Playbook 2 Superior Business Attributes Enable Free Cash Flow 3 Scalable & Efficient Platform Supports Disciplined Capital Allocation +3.7% +3.2% +13.4% +7.8% 3-Yr CAGR
Slide 8: II. Investing for Growth
II. Investing for Growth FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW
Slide 9: Diversified Portfolio of Leading Consumer Healthcare Brands
Diversified Portfolio of Leading Consumer Healthcare Brands Total Sales by Category Diverse Portfolio of Market-Leading Brands Oral #1 Feminine Hygiene Care #1 Vaginal Anti-Fungal Cough / Cold 9% Women’s Health #1 Rehydration 10% #1 Motion Sickness 25% Skin #1 Allergy & Redness Relief Drop 11% Care
Slide 10: Brand-Building Focus Positions Us for Long-Term Growth
Brand-Building Focus Positions Us for Long-Term Growth 1 Understanding Consumer Insights and Opportunity 2 Flexible & Agile Brand Strategies in an Evolving Environment 3 E-Commerce Success through Investments 4 Proven New Product Development Resulting Long-Term Success Across Channels & Categories O
Slide 11: Consistent Growth Enabled by Understanding Consumer Needs
Consistent Growth Enabled by Understanding Consumer Needs Household Penetration(2) Product Extensions +1.6x Work Travel 8% 5% Vomiting Heat & & Diarrhea Outdoor Sports & FY19 FY22 Exercise ◼ Marketing and innovation driving awareness & consumption growth ◼ Addressing consumer needs with Nausea, Kids
Slide 12: Flexible Strategies Enabled by Nimble Marketing
Flexible Strategies Enabled by Nimble Marketing Active Wash Amber Nights An “Amazon’s Choice” Simply Sensitive ◼ Engaging customers through campaigns both in-store and online ◼ Effective campaigns: 3 ways to treat warts at home, Touch of Science ◼ Investment in current initiatives leading to strong
Slide 13: E-Commerce: Winning in Consumer Shift to Online
E-Commerce: Winning in Consumer Shift to Online E-Commerce as a % of Net Sales Numerous Drivers of Success +~3x Investment in ~13% Online User ~11% Experience ~5% Engaging Digital Campaigns FY 20 FY 21 FY 22 ◼ Well-positioned due to early investments in E- Commerce behind brand portfolio Omnichannel
Slide 14: Expanding Categories through New Product Development
Expanding Categories through New Product Development Successful History of Innovation Robust Pipeline Ongoing Innovation through Technology & FY 23 Pipeline Expands Brand Offerings Across Superior Consumer Experience Prestige’s Portfolio FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW 14
Slide 15: Result: Diverse Portfolio with Category Defining Shares
Result: Diverse Portfolio with Category Defining Shares Category Defining Share(2)* Top PBH Brands Share Rank(2) Category Defining #1 Brands That Redefine Categories with #1 Meaningful Share #1 #1 #1 10 of 13 #3 Brands are #1 in Market Share(2), Many by a Wide Margin #1 #1 #3 #1 Trusted Brands Consu
Slide 16: III. Financial Strategy & Capital Allocation
III. Financial Strategy & Capital Allocation FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW
Slide 17: Key Financial Results for Fourth Quarter and FY 22 Performance
Key Financial Results for Fourth Quarter and FY 22 Performance FY 22 FY 21 12.3% Revenue of $266.9 million, up 5.9% vs. PY Q4 on an organic basis(1) $266.9 7.8% $237.8 Q4 15.2% $85.4 $79.2 $0.91 $0.79 (3) (3) Revenue Adjusted EBITDA Adjusted EPS EBITDA(3) of $85.4 million up 7.8% vs. Adjusted(3) PY
Slide 18: Financial Results for FY 22
Financial Results for FY 22 3 Months Ended 12 Months Ended FY 22 Comments ◼ Revenue up 10.1% vs. PY organically(1) – Broad & diverse portfolio helped to achieve record year in sales – Double-digit eCommerce consumption growth as consumers shopped online ◼ Adjusted Gross Margin(3) of 57.3% consistent
Slide 19: Consistent, Strong Free Cash Flow Continued in FY 22
Consistent, Strong Free Cash Flow Continued in FY 22 Adj. Free Cash Flow & Leverage Capital Allocation Highlights 7.8% CAGR $254 Significant debt reduction to 3.8x Leverage(4) Adj. FCF(3) $207 $213 $202 FY 19 FY 20 FY 21 FY 22 65% of debt outstanding at fixed rate -1.2x Leverage(4) 5.0x 4.7x 4.2x No
Slide 20: Robust Free Cash Flow Profile Enabled by Strategy
Robust Free Cash Flow Profile Enabled by Strategy Key Attributes Free Cash Flow Metrics Asset Light Model with Low Capital Expenditures $254 Million FY 22 Adjusted Free Cash Flow(3) Leading Margin Profile Long-Term Cash Tax Savings Tranches ~120% ~9% Ongoing Focus on Profitability Free Cash Flow Fre
Slide 21: Capital Allocation Priorities Remain Unchanged
Capital Allocation Priorities Remain Unchanged 1 2 Invest in Current Brands Continue Strategy of to Drive Organic Growth Deleveraging 3 4 Pursue M&A That is Strategic Share Accretive to Shareholders Repurchases FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW 21
Slide 22: Long-Term History of Superior Financial Performance
Long-Term History of Superior Financial Performance 2012 2022 CAGR Highlights Established, Diversified Portfolio Revenue $441 $1,087 +9.4% of Category-Defining Brands Transformed Portfolio Through Disciplined M&A & Divestitures Adjusted $0.99 $4.06 +15.2% EPS(3) Delivered Long-Term Shareholder Value
Slide 23: IV. The Road Ahead & FY 23 Outlook
IV. The Road Ahead & FY 23 Outlook FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW
Slide 24: Increasing Focus on ESG
Increasing Focus on ESG Social Benefits Supplier Engagement Philanthropy Environmental Supplier Code of Conduct Community Initiatives Emissions Serving communities & consumers is Aligning partners with our social & Day of Giving and other local office Focused on assessing emissions in the core of ou
Slide 25: Well-Positioned in Dynamic Macro Environment
Well-Positioned in Dynamic Macro Environment Macro Trends Normalizing Consumer Behavior Diversified Portfolio Is An Advantage Consumers Value Our Trusted Brands Across Environments Strained Supply Chain Leading Shares Enable Pricing Ability at Retail Inflationary Environment 80%+ North American Sour
Slide 26: FY 23 Outlook
FY 23 Outlook ◼ Strategy delivering with growing and well-positioned business ◼ Agile brand-building enables portfolio for further market share gains Top Line Trends ◼ Revenue of $1,120 Million to $1,130 Million (~3% to 4% growth) — Organic growth of 2% to 3% ◼ EBITDA dollars expecting to grow with
Slide 27: Portfolio & Strategy Well-Positioned for Continued Value Creation
Portfolio & Strategy Well-Positioned for Continued Value Creation 1 Diversified Portfolio of Leading, Trusted Brands 2 Established Organic Growth Playbook 3 Superior Financial Profile Generating Consistent Cash Flow 4 Scalable & Efficient Platform 5 Organic Growth Engine Reinforced by M&A Prestige’s
Slide 28: ...And Consistently Deliver Strong Financial Performance
...And Consistently Deliver Strong Financial Performance Organic Long-Term Algorithm High Proven & Organic Growth(1) Free Cash Flow(3) Repeatable of 2.0% to 3.0% Generation M&A Strategy Upside 6.0% to 8.0% EPS Growth Potential Proven Value Creation Strategy FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBU
Slide 29: Q&A
Q&A FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW
Slide 30: Appendix
Appendix (1) Organic Revenue is a Non-GAAP financial measure and is reconciled to the most closely related GAAP financial measure in the attached Reconciliation Schedules and / or our earnings release dated May 5, 2022 in the “About Non-GAAP Financial Measures” section. (2) Company consumption and m
Slide 31: Reconciliation Schedules
Reconciliation Schedules Organic Revenue Change a) Revenues of our Akorn acquisition are excluded for purposes of calculating Non-GAAP organic revenues. Adjusted Gross Margin a) Inventory step-up charges relate to our North American OTC Healthcare segment. FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUT
Slide 32: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted G&A a) Costs related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW 32
Slide 33: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted EBITDA Margin a) Inventory step-up charges relate to our North American OTC Healthcare segment b) Costs related to the consummation of the acquisitions process such as insurance costs, legal and other acquisition related professional fees FULL-YEAR FY 22
Slide 34: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted Net Income & Adjusted EPS a) Inventory step-up charges relate to our North American OTC Healthcare segment b) Costs related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees c) T
Slide 35: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted Free Cash Flow a) Payments related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees Projected Free Cash Flow FULL-YEAR FY 22 RESULTS & BUSINESS ATTRIBUTES REVIEW 35
Slide 36: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Organic Revenue Change Year Ended March 31, 2020 2019 (In Thousands) GAAP Total Revenues $ 963,010 $ 975,777 Revenue Growth (1.3%) Adjustments: Revenue associated with divestiture - (19,811) Allocated costs that remain after divestiture - (659) Impact of foreign
Slide 37: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted EBITDA Margin Year Ended March 31, 2020 2019 (In Thousands) GAAP Net Income (Loss) $ 142,281 $ (35,800) Interest expense, net 96,224 105,082 Provision (benefit) for income taxes 48,870 (2,255) Depreciation and amortization 28,995 31,779 Non-GAAP EBITDA 3
Slide 38: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted Net Income & Adjusted EPS 2012 2019 2020 Net Adj. Adj. Adj. Income EPS Net Income EPS Net Income EPS GAAP Net Income $ 37,212 $ 0.73 $ (35,800) $ (0.68) $ 142,281 $ 2.78 Adjustments Inventory step up 1,795 0.04 - - - - Integration, Transition, and other
Slide 39: Reconciliation Schedules (Continued)
Reconciliation Schedules (Continued) Adjusted Free Cash Flow 2012 2019 2020 GAAP Net Income $ 37,212 $ (35,800) $ 142,281 Adjustments Adjustments to reconcile net income to net cash provided by operating activities as shown in the statement of cash flows 35,674 233,400 66,041 Changes in operating as
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