Acco Brands Corporation · NYSE:ACCO
Acco Brands — Q3 2022 Earnings Presentation
19 slides from Acco Brands's earnings presentation, Nov 8, 2022
Slide 1: ACCO Brands 3Q Earnings Conference Call
ACCO Brands 3Q Earnings Conference Call November 8, 2022 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained herein, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, strategies, business operations and similar matters, results of operations, liquidity and financial condition, a
Slide 3: Reg. G – Non-GAAP Financial Measures
Reg. G – Non-GAAP Financial Measures We explain below how we calculate each of our non-GAAP financial measures and a reconciliation of our current period and historical non-GAAP financial measures to the most directly comparable GAAP financial measures follows. We use our non-GAAP financial measures
Slide 4: 3Q 2022 Key Messages
3Q 2022 Key Messages • Fundamentals remain intact and we have the right business model and strategy • Generated adjusted free cash flow of $84 million in the third quarter • Achieved solid North America back-to-school sell through; Five Star outperformed the market • Cautious retailer inventory repl
Slide 5: 3Q 2022 Results Summary
3Q 2022 Results Summary Comparisons Versus Prior Year • 6% impact from FX headwind of $30M • Solid North America back-to-school sell-out • Inventory destocking by retailers in North America Sales down 8% to $486M • EMEA price increases offset by volume declines Comparable sales down 2% to $516M • St
Slide 6: 2022 Segment Financial Metrics
2022 Segment Financial Metrics Y/Y $ in millions 3Q22 3Q21 Change ACCO Brands North America Sales $257.2 $287.5 (10.5%) Comparable Sales $258.5 $287.5 (10.0%) Adjusted Operating Income $25.8 $41.6 (38.0%) Adjusted Operating Margin 10.0% 14.5% (450 bps) ACCO Brands EMEA Sales $130.3 $161.1 (19.1%) Co
Slide 7: 3Q 2022 Segment Results Summary
3Q 2022 Segment Results Summary Comparisons Versus Prior Year North America • Sales challenged due to more cautious stance by retailers on inventory replenishment • Gaming accessories sales declined due to semiconductor shortages and normalization of market demand • Lower operating income and adjust
Slide 8: 3Q 2022 Margin Reconciliation
3Q 2022 Margin Reconciliation 3Q 2022 Change vs. Items of Significant Impact Adjusted Prior Year Bps on Adjusted Results (non-GAAP) Adjusted Gross Profit $137.4M ($20.4M) Pricing/Product Cost (140) Volume (80) Gross Margin 28.3% (170) bps Cost Savings 60 Other (30) FX 20 SG&A $94.6M ($6.2M) Sales an
Slide 9: 2022 Cash Flow
2022 Cash Flow 2021 Change vs $ in millions* 1Q22 2Q22 3Q22 2022 YTD YTD 2021 Adjusted EBITDA 39 71 53 163 197 (34) Interest (15) (4) (17) (36) (34) (2) Taxes (8) (11) (7) (26) (21) (5) Other (7) (2) (4) (13) (27) 15 Capital expenditures (3) (4) (5) (12) (14) 2 Working capital (114) (38) 64 (88) (71
Slide 10: Capital Structure
Capital Structure ❑ Capital structure as of September 30, 2022 ❑ No maturities until 2026 ❑ Interest is split 53/47 fixed and variable with weighted average rate of 4.14% ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 174 LIBOR + 200 bps, 35.0 bps unuse
Slide 11: Full Year 2022 Outlook
Full Year 2022 Outlook Guidance FY2022 Comparable Net Sales Growth 0.0% to 2.0% FX Impact on Sales (4.5%) Reported Net Sales Growth (4.5%) to (2.5%) Reported Net Sales* $1.940 to $1.980 billion Comparable Adj. EPS $1.10 to $1.15 FX Impact on Adj. EPS* ($0.05) Adjusted EPS $1.05 to $1.10 Adjusted Fre
Slide 12: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy • Disciplined capital allocation strategy Capital • Generated $84M in adjusted free cash flow in third quarter Allocation • Announced $0.075 per share quarterly dividend on November 7 • 3Q 2022 consolidated leverage ratio 3.9x Debt • Expect a 3.8x-3.9x consol
Slide 13: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Our non-GAAP financial measures include the following: Comparable Sales: Represents net sales excluding the impact of material acquisitions with current-period foreign operation sales translated at prior-year currency rates. We believe comparable sales are useful to
Slide 14: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) The following tables set forth a reconciliation of certain Consolidated Statements of Operations information reported in accordance
Slide 15: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) ‘The following tables set forth a reconciliation of certain Consolidated Statements of Operations information reported in accordance
Slide 16: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of Net (Loss) Income to Adjusted EBITDA (Unaudited) (In millions) The following table sets forth a reconciliation of net (loss) income reported in accordance with GAAP to Adjusted EBITDA. Three Months Ended —_____September
Slide 17: Reg G Reconciliations
Reg G Reconciliations Notes to Reconciliations of GAAP to Adjusted Non-GAAP Information and Net (Loss) Income to Adjusted EBITDA (Unaudited) Represents an impact to operating expense related to our Russia business. Represents the change in fair value of the contingent consideration for the PowerA ac
Slide 18: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Business Segment Information and Reconciliation (Unaudited) (In millions) 2022 2021 c “Adjusted “Adjusted Reported Adjusted Operating Reported Adjusted Operating Adjusted Adjusted Operating Operating Income Operating Operati
Slide 19: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Net Sales Change Analysis (Unaudited) % Change - Net Sales 'S Change - Net Sales (in millions) GAAP Non-GAAP GAAP Non-GAAP Comparable ‘Comparable Net Sales Currency Net Sales Net Sales Currency Net Sales ‘Comparable Change T