Edgewell Personal Care Company · NYSE:EPC
Edgewell Personal Care — Merger or Acquisition (May 2019)
31 slides from Edgewell Personal Care's merger presentation, May 2019
Slide 1: Creating a Next Generation Consumer Products Platform
+ CREATING A NEXT GENERATION CONSUMER PRODUCTS PLATFORM 1
Slide 2: Forward-looking statements
This presentation and some of our comments contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking stat
Slide 3: Today's Participants
Today’s Participants Rod R. Little Dan Sullivan Andy Katz-Mayfield Jeff Raider President and CEO Chief Financial Officer Harry’s Co-Founder Harry’s Co-Founder and and Co-CEO / Co-CEO / Co-President U.S. Co-President U.S. 3
Slide 4: Edgewell and Harry's are combining to create a next generation CPG platform
Edgewell and Harry’s are combining to create a next generation CPG platform + “Best-in- Modern Exceptional Global class” R&D approach Omni-channel Access to products and scale and to enable to brand capabilities top talent technology infrastructure innovation building High growth CPG company driven
Slide 5: Transaction summary
Transaction summary ■ Transaction valued at $1.37 billion on a cash-free, debt-free basis VALUATION – ~$325 million in Harry’s CY’19E net sales, growing at 30% annual growth since 2016 ■ Cash and stock consideration mix with Harry’s shareholders receiving CONSIDERATION $1.085 billion in cash and app
Slide 6: Creating a Next Generation Consumer Products Platform
CREATING A NEXT GENERATION CONSUMER PRODUCTS PLATFORM
Slide 7: Legacy CPG is facing number of challenges
Legacy CPG is facing TitleaText number of challenges BRANDS NOT RESONATING UNABLE TO CONNECT THROUGH RESULTING IN SLOW GROWTH WITH MODERN CONSUMERS DIRECT SALES CHANNELS Legacy brands built for a E-Commerce Penetration CY ’18-’20E CAGR different generation % of Retail Sales Confusion at the shelf 10
Slide 8: Consumers are demanding a differentiated approach
Consumers are demanding a differentiated approach EXCEPTIONAL PRODUCTS BRANDS THAT CONNECT OMNI-CHANNEL MODEL CONSTANTLY INNOVATING TO RELATABLE BRANDS THAT AVAILABLE HOW AND WHERE MEET CONSUMER NEEDS SHARE CONSUMER BELIEFS CONSUMERS WANT 8
Slide 9: Edgewell and Harry's bring together the capabilities to better meet consumer needs
Edgewell and Harry’s bring together the capabilities to better meet consumer needs WORLD-CLASS PRODUCT MODERN BRAND BUILDING TECHNOLOGY AND PRODUCT DESIGN GLOBAL SCALE AND STRONG DTC CAPABILITIES AND INFRASTRUCTURE TECHNOLOGY COMPANY COST DISCIPLINE AND CASH FLOW PERFORMANCE MARKETING TO DRIVE INVES
Slide 10: Exceptional commercial leadership team
Exceptional commercial leadership team Rod R. Little President and CEO NEW EXECUTIVE LEADERSHIP WITH REFRESHED PERSPECTIVES POISED TO DRIVE GROWTH ACROSS THE ORGANIZATION Colin Hutchison Dan Sullivan Strong public company and entrepreneurial experience COO, Head of Int’l Forward-thinking culture and
Slide 11: Our combined growth and margin profile will be industry leading
Our combined growth and margin profile will be industry leading REVENUE GROWTH PROFILE GROSS MARGIN PROFILE “Mid- Single “ High 40s” Digits” 44% 2.5% (1) CPG Average (2) (1) CPG Average (2) (1) Reflects fiscal year-end estimates. (2) Average based on S&P 500 Consumer Staples index, excluding Food &
Slide 12: Harry's Overview
HARRY’S OVERVIEW
Slide 13: Harry's is one of the most successful challenger brands ever built
Harry’s is one of the most successful challenger brands ever built PHENOMENAL TAKING SUCCESSFUL BRAND LAUNCHED GROWTH SIGNIFICANT SHARE EXTENSIONS 2013 ~$325mm 30%+ #1 SKUs CY’2019E Revenue Retail category share(1) Across new category launches 2019 2018 2018 2016 2015 2017 1 million DTC U.K. DTC lau
Slide 14: Driven by a relentless focus on what the consumer wants
Driven by a relentless focus on what the consumer wants and an imagination to deliver beyond BUILD PRODUCTS AND DRIVING DEEP RELATIONSHIPS GET TO KNOW CUSTOMERS BRANDS THAT RESONATE AND STRONG ADVOCACY Brands that are relatable Connect directly with customers Percent highly likely to and everyday as
Slide 15: Strong DTC platform enables Harry's to better connect with consumers
Strong DTC platform enables Harry’s to better connect with consumers & transition the brand across channels BUILD RELATIONSHIPS THROUGH DTC ENABLES DISRUPTIVE PRESENCE AT RETAIL Broad reach Deep relationships Leverage customer insights from DTC ~4M cumulative DTC customers acquired 2M+ Direct CX con
Slide 16: Harry's playbook has been proven across new markets and categories
Harry’s playbook has been proven across new markets and categories U.K. BODY & BAR WOMEN’S Indexed Post-Launch Cumulative Customers Acquired(1) U.K. U.S. Months Since Launch #1 body wash SKU at Target; Strong omni-channel start; >400k customers acquired; 500k+ customers in 6 months; Achieved >10% sh
Slide 17: Edgewell is a compelling partner for Harry's
Edgewell is a compelling partner for Harry’s Attractive opportunity for Andy Katz-Mayfield and Jeff Raider to take on a broader role within a significantly larger CPG company Unique consumer platform to launch new brands and products across personal care Further delight customers with upgraded produ
Slide 18: The New Company
THE NEW COMPANY
Slide 19: Our leadership positions allow us to reshape and grow in attractive core categories
Our leadership positions allow us to reshape and grow in attractive core categories SHAVE SKIN SUN ■ Highly-attractive margin structure ■ High average spend across ■ Increasing focus on wellness and ■ Recurring spend driven by high category making sun care part of daily Category degree of customer l
Slide 20: Strong global infrastructure and valuable IP
Strong global infrastructure and valuable IP Leading Edge Innovations Global Reach Advanced Technology – 2,900+ granted global patents – Global research and technology centers – Vertically integrated R&B operations – 450+ pending patent applications – Over 5,000 dedicated colleagues – Advanced manuf
Slide 21: Opportunity to accelerate international expansion through Edgewell's global reach
Opportunity to accelerate international expansion through Edgewell’s global reach 21
Slide 22: Proven ability to grow U.S. Wet Shave
Proven ability to grow U.S. Wet Shave OUTPERFORMING THE CATEGORY MEANINGFUL SHARE GROWTH $ Volume 2016-2018 CAGR % Share 2016-2018 U.S. Men’s Wet Shave U.S. Men’s Wet Shave Larger combined portfolio positioned to further disrupt a structurally attractive market Source: Nielsen xAOC. 22
Slide 23: Leveraging a proven playbook that is better together
Leveraging a proven playbook that is better together BUILD A BRAND THAT CONNECTS WITH CONSUMERS DEEPEN AND BROADEN RELATIONSHIPS WITH CONSUMERS THROUGH DTC EXPAND INTO RETAIL LEVERAGING SUCCESS IN DTC REPLICATE SUCCESS INTERNATIONALLY TAKE BRAND EQUITY INTO NEW PRODUCT ADJACENCIES Global, omni-chann
Slide 24: Well positioned to win in core categories and launch new products in adjacencies
Well positioned to win in core categories and launch new products or brands in adjacencies 2018 US Category Sales (in $B) +$75 $100 $25 Current Categories Adjacent Total Addressable Personal Care Categories Men’s & Women’s Shave Broader Men’s & Women’s Sun Care Personal Care Body Wash / Soap Facial
Slide 25: Significant long-term growth opportunities enabled by our combined capabilities
Significant long-term growth opportunities enabled by our combined set of capabilities + 1 Apply modern branding and design capabilities across the portfolio 2 Improve Harry’s and Flamingo products with Edgewell’s technology 3 Build engaging DTC experiences for Edgewell brands on Harry’s platform 4
Slide 26: Compelling Value Proposition for Shareholders
COMPELLING VALUE PROPOSITION FOR SHAREHOLDERS
Slide 27: Transaction details
Transaction details ■ $1.37 billion purchase price, comprised of: PURCHASE PRICE ■ $1.085 billion in cash ■ 6.9 million shares or $285 million (based on 5-day VWAP prior to signing) ■ Cash portion funded with approximately $160 million cash-on-hand and fully committed debt financing ■ Financing comm
Slide 28: Compelling combined company financial profile
Compelling combined company financial profile PROFILE DRIVERS ■ Accelerated growth outperforms CPG in TOP-LINE ■ Mid-single digit growth algorithm both core business and synergy capture ■ Leveraging Edgewell scale and focus on ■ High 40s gross margin model productivity and efficiency (with synergies
Slide 29: Meaningful growth and synergy opportunity
Meaningful growth and synergy opportunity ESTABLISH THE FOUNDATION EXECUTE ON ADDITIONAL OPPORTUNITIES ■ Bring together key functions and teams ■ Leverage Edgewell’s footprint ■ Understand best practices across both ■ Accelerate Harry’s international expansion companies ■ Increase Edgewell’s value p
Slide 30: Compelling growth outlook – first full year post-close
Compelling growth outlook – first full year post-close FY2021E NET SALES ~$2.7 billion FY2021E EBITDA ~$475 million RUN-RATE SYNERGIES ~$40 million run-rate EBITDA in FY2023 – Achieved over time with limited impact in year 1 30
Slide 31: Edgewell and Harry's are combining to create a next generation CPG platform
Edgewell and Harry’s are combining to create a next generation CPG platform + “Best-in- Modern Exceptional Global class” R&D approach Omni-channel Access to products and scale and to enable to brand capabilities top talent technology infrastructure innovation building High growth CPG company driven
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