Wolverine World Wide, Inc. · NYSE:WWW
Wolverine World Wide — Investor Presentation (March 2019)
20 slides from Wolverine World Wide's investor presentation, Mar 14, 2019
Slide 1: Investor Presentation | March 2019
Investor Presentation| March 2019
Slide 2: Contacts
CONTACTSCONTACTS Mike Stornant Chief Financial Officer Mike Harris Vice President- Corporate Finance Paul Feyen Vice President- FP&A and Treasury Kirk Kauffman Senior Business Analyst Kirk.Kauffman@wwwinc.com (616) 866- 5534 Investor.Relations@wwwinc.com INVESTORRELATIONS| 2
Slide 3: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, including statements regarding: the Company’s ability to invest in growth, successfully execute key strategic initiatives, elevate brands with consumers, and deliver product innovation, organic and global growth and op
Slide 4: Who We Are
WHOWHO WEWE ARE ARE 2018 Revenue: OUR VISION $2.24 billion Strong balance sheet To build a family of the most admired performance and lifestyle brands on Boston Earth Heritage 40.0% Group Group Strong operational 14.3% platform Business model that mitigates risk through geographic diversification, m
Slide 5: Our Brands
OUR BRANDS Outdoor & Lifestyle Group Boston Group Heritage Group Industry-leading portfolio of performance and lifestyle brands INVESTORRELATIONS| 5
Slide 6: Global Growth Agenda
GLOBAL GROWTH AGENDA Powerful Product Digital-Direct International Creation Engine 45% Offense 35% Expansion 20% – Relentless and frequent – Constant flow of compelling new – Making products/brands more introduction of craveable media content relevant in key global markets product – Improved social
Slide 7: Outdoor & Lifestyle Group
OUTDOOR & LIFESTYLE GROUP Revenue by brand Gridway Ontario Choprock Engage Stormer Intruder 30% Cyra Catelyn Expert Chaste Ballet 2018 eCommerce UL Revenue Growth (1) 8% 2018 International UL Revenue Growth (1) Playa Pro Web Odyssey Cloud ZX/2 2018 Underlying Revenue Growth of 5.2%(1); forecasting M
Slide 8: Boston Group
BOSTON GROUP Revenue by brand Gold Cup Crest Vibe Handcrafted in A/O BIONIC Maine 2-Eye Prep Shadow 6000 Kinvara 10 Ride ISO 2 Avocado Toast Keds x 24% (1) Champion Rifle Paper Rise Velvet 2018 eCommerce UL Revenue Growth 2% 2018 International UL Revenue Growth (1) Keds Sperry Merrell Hydro Kickstar
Slide 9: Heritage Group
HERITAGE GROUP Revenue by brand 1000 Mile I90 EPX Ramparts Sneaker Maneuver Raide Raide Ops 10 Sport Trail Holtman Markston Carlotta 52% 2018 eCommerce UL Revenue Growth (1) FOOTRESTS FOOTRESTS Alastor Trainer 6”Hiker Athletic 2018 Underlying Revenue Growth of 6.1% (1); forecasting MSD growth for 20
Slide 10: Wolverine World Wide Global Footprint
WOLVERINE “WORLD WIDE” GLOBAL FOOTPRINT London Global Headquarters Rockford, MI Mississauga, Ontario Waltham, MA Map Key: Corporate Campus Distribution Center Hong Kong Joint Venture Zhuhai Sales Office/Showroom Sourcing Office Territories covered by top 10 international Units by Region distributors
Slide 11: How We Go To Market
HOW WE GO TO MARKET U.S. WHOLESALE DIRECT-TO-CONSUMER REVENUE BY REGION/CHANNEL 2018 Region Summary 80 42 USA 68% Owned Stores Owned eCom sites International 32% Accounted for 13% Canada 5% of revenue for 2018 EMEA 14% Latin America 5% Asia Pacific 8% REST OF WORLD DISTRIBUTION Owned distribution Ov
Slide 12: Q4 & Full-Year 2018 Financial Overview
Q4 & FULL-YEAR 2018 FINANCIAL OVERVIEW (In millions) Q4 Full-Year % B/(W) vs % B/(W) vs 2018 UL 2017(1) 2018 UL 2017(1) Outdoor & Lifestyle Group $ 245.1 8.4% $ 951.9 5.2% Boston Group 230.8 2.4% 895.5 0.2% Heritage Group 89.4 7.8% 320.3 6.1% Other 14.3 -39.9% 71.5 -15.0% Total Revenue $ 579.6 3.8%
Slide 13: 2019 Outlook
2019 OUTLOOK (As reported on February 20, 2019) FY Estimate Mid-point of the revenue guidance represents growth of 3% vs 2018 Low High Roughly flat revenue in Q1 expected to give Revenue (in billions) $2.28 $2.33 way to MSD growth in Q2 through Q4 Gross Margin 41.3% 41.8% 2019 gross margin expected
Slide 14: Significant Deleverage in Recent Years
SIGNIFICANT DELEVERAGE IN RECENT YEARS Gross Debt Cash Net Debt 4.0x 1.3x ($M) $1,215 $1,132 $615M $1,043 reduction $918 $888 $810 $821 $783 $616 $664 $571 $481 $428 $451 $370 $302 $224 $171 $214 $194 $143 2012 2013 2014 2015 2016 2017 2018 Note: leverage ratio is defined per the Company’s credit ag
Slide 15: Priorities for $1.5B of Dry Powder & Strong Cashflow
PRIORITIES FOR $1.5B OF “DRY POWDER” & STRONG CASHFLOW • $50 million of investment in 2018, including $9 million of growth CAPEX Organic Growth • Expect nearly $70 million in 2019 including $40 million behind the GLOBAL GROWTH AGENDA and $30 million of capital investment to accelerate growth in glob
Slide 16: Relative Performance Compared to Footwear Industry Peers
Relative Performance Compared to footwear industry peers TSR Focus Operating Margin - LTM 20.0% • Targeting “top-quartile” valuation 16.8% 15.0% 13.6% multiple with continued organic 12.0% 11.7% 11.5% 9.1% 8.9% growth 10.0% 5.8% 5.2% 5.0% 3.3% • Priority uses of capital to supplement TSR 0.0% TPR DE
Slide 17: GAAP to Non-GAAP Adjustments: Underlying Revenue
GAAP to Non-GAAP Adjustments (Unaudited) Reconciliation of Reported Revenue to Underlying Revenue* (In Millions) Q4 2018 2018 Full-Year Underlying Underlying GAAP Basis Adjustments(1) Revenue GAAP Basis Adjustments(1) Revenue Fiscal 2018 $ 579.6 $ 579.6 $ 2,239.2 $ 2,239.2 Growth 0.2% 3.8% (4.7%) 2.
Slide 18: GAAP to Non-GAAP Adjustments: Margins and EPS
GAAP to Non-GAAP Adjustments (Unaudited) Reconciliation of Reported Gross Margin to Adjusted Gross Margin* (In Millions) Q4 2018 2018 Full-Year GAAP Basis Adjustments(2) As Adjusted GAAP Basis Adjustments(2) As Adjusted Fiscal 2018 $ 227.1 $ 227.1 $ 921.3 $ 921.3 Gross Margin 39.2% 39.2% 41.1% 41.1%
Slide 19: GAAP to Non-GAAP Adjustments: Free Cash Flow Yield and Guidance
GAAP to Non-GAAP Adjustments (Unaudited) Reconciliation of Free Cash Flow Yield Based on Reported versus Adjusted Cash From Operations* Fiscal 2018 GAAP Basis - Free Cash Flow Yield 2.8% Adjustments(5) 4.0% Adjusted Basis - Free Cash Flow Yield 6.8% Reconciliation of Fiscal 2019 Full-Year Reported O
Slide 20: Footnotes
Footnotes Q2 2018 & RESULTS *To supplement the consolidated financial statements presented in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company describes what certain financial measures would have been if restructuring and other related costs, incremental inventory mark-
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