Helen Of Troy Limited · NASDAQ:HELE
Helen Of Troy — Investor Day (October 2023)
135 slides from Helen Of Troy's investor day presentation, Oct 17, 2023
Slide 1: Investor Day | October 17, 2023
Investor Day | October 17, 2023 Proprietary and Confidential Proprietary and Confidential
Slide 2: Forward-Looking Statements and Reconciliation of Non-GAAP Financial Measures
Forward-Looking Statements and Reconciliation of Non-GAAP Financial Measures Forward-Looking Statements: Certain written and oral statements made by the Company and subsidiaries of the Company may constitute “forward-looking statements” as developments regarding privacy and data security that could
Slide 3: Noel Geoffroy, Chief Operating Officer and Incoming CEO
Noel Geoffroy Chief Operating Officer Incoming CEO: Effective March 1, 2024 Proprietaryand Proprietary andConfidential Confidential
Slide 4: Agenda
Agenda: 1. Opening Remarks: Julien Mininberg, CEO 2. Elevate for Growth Strategy: Noel Geoffroy, COO & Incoming CEO o Ronald Anderskow President, NA RMO o Larry Witt President, Home & Outdoor o Jay Caron Chief of Global Operations 3. Elevate for Growth Financial Review: Brian Grass, CFO 4. Innovatio
Slide 5: Julien Mininberg, Chief Executive Officer
Julien Mininberg Chief Executive Officer Proprietary and Confidential
Slide 6: Helen of Troy has Evolved into a $2+ Billion Consumer Products Company
Helen of Troy has Evolved into a $2+ Billion Consumer Products Company Helen of Troy Revenue Evolution ti o n ma Legacy ~$2.0B+ or Diversification s f n Transformation I Tra n $1.5B+ tio Transformation II ca Revenue $1.0B+ r s ifi Div e t y O n ly $500M+ L e g ac y/Beau $100M+ 1968 1975 1980 1985 19
Slide 7: Helen of Troy's Transformation Has Been Guided by Key Strategic Choices
Helen of Troy’s Transformation Has Been Guided by Key Strategic Choices Transformation Phase I (FY15-19) Transformation Phase II (FY20-24) Invest in Leadership Brands Optimize Double Capital Down on Deployment International Maximize Selective Operating & Strategic Efficiency M&A Accelerate Consumer
Slide 8: Our Journey to Centralize and Simplify Our Operating Company
Our Journey to Centralize and Simplify Our Operating Company Fully End-to-End, with Empowered, Autonomous Units Shared Services but Leveraged Description • Business Units (BU) operate with • BU’s collaborate with shared full autonomy service experts: varying levels of adoption z Greater Autonomy Gre
Slide 9: We Have Built a Strong Family of Leadership Brands
We Have Built a Strong Family of Leadership Brands Differentiated Market Leader Higher Margin Growth Adjacencies Asset Efficient 9 Proprietary and Confidential
Slide 10: We Are Driven by Our Value Creation Flywheel
We Are Driven by Our Value Creation Flywheel Accretive and Low Risk Leadership Brand Capital Deployment Innovation and Investment wered by Low Capex Po Organic Revenue Growth Ex ce le Working Capital p ti o p Margin Expansion Improvement n al P e o Debt and High Quality Global Tax Efficiency Shared
Slide 11: Strong & Timeless Values Serve as the Foundation of Our Culture
Strong & Timeless Values Serve as the Foundation of Our Culture Company Values * Source: Public Fundamental Data provided by Morningstar, Inc. 11
Slide 12: We Have Transformed Into an Industry-Leading Employer of Choice
We Have Transformed Into an Industry-Leading Employer of Choice Helen of Troy GLASSDOOR Overall Ratings Score Helen of Troy 4.1 – 4.5 Stars Recommend to Friend 77-93% Glass Door Average Star rating 3.7 Stars Recommend to Friend 68% December December December December December Dec
Slide 13: The Company Allocated Nearly $3 Billion of Capital Over the Past 10 Years
The Company Allocated Nearly $3 Billion of Capital Over the Past 10 Years Transformation Era Capital Allocation Reported + committed* CAPEX Acquisition & strategic investments** Open market share repurchases $1.63 Billion $1.25 Billion $321.7 $78.7 2020 2020 2021 2022 $448.0 Amended $885.6 100-Year
Slide 14: We Generated Excellent Results in Phase I and Started Off Strong in Phase II
We Generated Excellent Results in Phase I and Started Off Strong in Phase II Revenue ($ in Millions) Adjusted Operating Income ($ in Millions) $2,223 $355 $334 $2,099 $269 $1,707 $239 $224 $1,564 $210 $1,479 $183 $188 $194 $1,383 $1,398 $1,308 $1,335 Adjusted 3.6% 1.0% 5.8% 5.8% 9.2% 14.0% 14.1% 14.
Slide 15: Phase II Revenue CAGR Exceeds Phase I, but Adj EPS CAGR Slowed
Phase II Revenue CAGR Exceeds Phase I Including FY23 & FY24 Post-Covid Years, but Adj EPS CAGR Slowed Considerably Revenue in millions *^ Non-GAAP Adjusted Diluted EPS *^ FY24 Outlook: Decline of FY24 5.2% to 2.8% Outlook: $2,223 vs. FY23 $2,000 $11.65 $12.36 Decline of 10.1% to 4.8% $2,099 $2,073 v
Slide 16: We Have Worked to Overcome Major External and Internal Challenges
We Have Worked to Overcome Major Both External and Internal Challenges Over the Past Two Years Supply Cost Weakening Consumer Chain Disruptions Inflation Demand Action Action Action • Secured supply despite shortages • Project Pegasus Restructuring Plan • Project Pegasus Restructuring Plan • Built i
Slide 17: Strong Reasons to Believe the Best is Yet to Come for Helen of Troy
Strong Reasons to Believe the Best is Yet to Come for Helen of Troy Proven track Ambitious targets Strategic plan Senior Team is Proven culture record of success we believe will has the right highly engaged in drives our create significant balance of plan design and highly talented value newness and
Slide 18: Noel Geoffroy, Chief Operating Officer
Noel Geoffroy Chief Operating Officer Proprietary and Confidential
Slide 19: Why I Am Excited About the Future of Helen of Troy
Why I Am Excited About the Future of Helen of Troy 4 3 2 Our talented and passionate 1 New operational people and culture & organizational New fuel from scale and assets Project Pegasus Fullythat leverage we can to invest New Fuel from our leverage operational in growth Project Pegasus and Diversifi
Slide 20: We Re-affirmed Our Purpose, Vision, and Values
We Re-affirmed Our Purpose, Vision, and Values Elevating Lives, Soaring Together PURPOSE VISION VA L U E S Why we exist and how Who we want to be and What we believe at our we improve the world where we want to go core and how we operate Elevating lives To curate and build I In Touch in moments a di
Slide 21: ESG is Integrated into Our Businesses
ESG is Integrated into Our Businesses Proprietary and Confidential
Slide 22: Our Commitment to the Environment and Society Continues in this Next Phase
Our Commitment to the Environment and Society Continues in this Next Phase 1 2 EMBED ENGAGE Embedding ESG Engaging our people and into our business our communities • Published annual ESG • Strengthen our diversity, Report equity, inclusion and • Integrated ESG into belonging with a holistic business
Slide 23: Engage: Each Associate Receives Two Paid Charitable Leave Days Annually
Engage: Each Associate Receives Two Paid Charitable Leave Days Annually Days of Service – Select Charities Chosen by Our Associates Proprietary and Confidential
Slide 24: Our Commitment to the Environment and Society Continues in this Next Phase
Our Commitment to the Environment and Society Continues in this Next Phase 1 2 3 EMBED ENGAGE ENHANCE Embedding ESG Engaging our people and Enhancing our products into our business our communities and brands • Published annual ESG • Strengthen our diversity, • Develop, source, and sell Report equity
Slide 25: Proprietary and Confidential
10/17/2023 Proprietary and Confidential 25
Slide 26: Our Elevate for Growth Leadership Team is a Balance of Experience and Fresh Perspective
Our Elevate for Growth Leadership Team is a Balance of Helen of Troy Tessa Judge Noel Geoffroy Brian Grass Experience and Chief Executive Officer Chief Financial Officer Chief Legal Officer Fresh Perspective = new = continuity Larry Witt Mauricio Troncoso Nicolas Lanus Ronald Anderskow Jay Caron Pre
Slide 27: We Believe We Can Achieve Success Across Several Key Metrics
We Believe We Can Achieve Success Across Several Key Metrics Average Annual Targets Net Sales Adjusted Adjusted Growth(1) EBITDA Margin EPS Expansion Growth(2) 3.0% -z 4.0% 30 - 40 bps ≥10% (1) Excludes acquisitions, divestitures and material currency fluctuations (2) Excludes acquisitions, divestit
Slide 28: Delivering on Our Ambition Offers Strong Value for Each of Our Stakeholders
Delivering on Our Ambition Offers Strong Value for Each of Our Stakeholders Consumers Earn consumers’ votes Shareholders Deliver exceptional Associates Be an employer shareholder of choice returns Communities Customers Be a respected Be a partner of choice supporter and member of our communities Pro
Slide 29: We Have a Set of Clear and Compelling Strategic Choices
We Have a Set of Clear and Compelling Strategic Choices How to Win ► Foster a winning culture Where to Play ► Strengthen end-to-end M&A capabilities Shape and Invest in a Growth Portfolio ► Embrace next-level data and analytics Win with Winning Customers ► Fully leverage operational scale & assets ►
Slide 30: Where to Play
Where to Play Shape and Invest in a Growth Portfolio Win with Winning Customers Strategically Grow International Continue Better Together M&A Proprietary and Confidential
Slide 31: Shape and Invest in a Growth Portfolio
Shape and Invest in a Growth Portfolio Proprietary and Confidential 31
Slide 32: Our Brands Hold Leadership Positions Across Multiple Categories
Our Brands Hold Leadership Positions Across Multiple Categories 1 1 1 1 Rank Rank Country Country Segment Segment Rank Rank Country Country Segment Segment Rank Rank Country Segment Country Segment Rank Rank Country Country Segment Segment Branded Noninvasive & 1 Canister Food Storage Branded Thermo
Slide 33: Shape and Invest in a Growth Portfolio
Shape and Invest in a Growth Portfolio Differentiated Growth Higher Margin Asset Efficient Market Leaders Potential z New Brand Portfolio Classifications Invest to Grow Stronghold Optimize Proprietary and Confidential
Slide 34: Investing Back in Our Brands
Investing Back in Our Brands Proprietary and Confidential
Slide 35: Win with Winning Customers
Win with Winning Customers Proprietaryand Proprietary andConfidential Confidential
Slide 36: Win with Winning Customers
Win with Winning Customers North America Sales Helen of Troy North America RMO US/Canada Beauty Sales US/Canada Home & Outdoor z Sales US/Canada Health & Wellness Sales RMO: Regional Market Organization Proprietary and Confidential
Slide 37: Ron Anderskow, President, North America RMO
Ron Anderskow President, North America RMO Proprietary and Confidential 37
Slide 38: Align Our Strategies and Customer Strategies to Deliver Superior Business Results
Align Our Strategies and Customer Strategies to Deliver Superior Business Results Consumer Research Review Business Results Insights Customer Joint Joint Vision & Goals Implementation Business Planning Shared Key Shared Performance Strategy Indicators Shared Plans 38
Slide 39: Working Together to Deliver the Right Value to the Shopper
Working Together to Deliver the Right Value to the Shopper Proprietary and Confidential 39
Slide 40: Bringing Our Winning Brands to Winning Customers
Bringing Our Winning Brands to Winning Customers Proprietary and Confidential 40
Slide 41: Customer-Specific Innovation With Winning Customers
Customer-Specific Innovation With Winning Customers Proprietary and Confidential 41
Slide 42: Optimizing Inventory During Seasonal Spikes
Optimizing Inventory During Seasonal Spikes Proprietary and Confidential 42
Slide 43: Strategically Grow International
Strategically Grow International Proprietaryand Proprietary andConfidential Confidential
Slide 44: Strategically Grow International
Strategically Grow International How we assessed brand-market combinations Next big opportunities to pursue High Market 1 Attractiveness • Disproportionately resource highest 1 Market Attractiveness potential and most financially ▪ Current Market Size Must Win attractive brand + market ▪ Expected Gr
Slide 45: Continue Better Together M&A
Continue Better Together M&A Proprietary and Confidential 45
Slide 46: Continue Better Together M&A
Continue Better Together M&A 2015 2016 2017 2020 2020 2021 2021 2022 Divest Divest Healthy Amended 100 Personal Directions Year License Care We expect to continue our String of Pearls strategy, looking for brands that complement our portfolio Better Together • Better for Helen of Troy: accretive to
Slide 47: We Have a Set of Clear and Compelling Strategic Choices
We Have a Set of Clear and Compelling Strategic Choices How to Win ► Foster a winning culture Where to Play ► Strengthen end-to-end M&A capabilities Shape and Invest in a Growth Portfolio ► Embrace next-level data and analytics Win with Winning Customers ► Fully leverage operational scale & assets ►
Slide 48: How to Win
How to Win Be consumer obsessed Strategically extend our brands Be and win where the shopper shops Fully leverage our scale and assets Embrace next-level data and analytics Strengthen end-to-end M&A capabilities Champion a winning culture Proprietary and Confidential
Slide 49: Be Consumer Obsessed
Be Consumer Obsessed 49
Slide 50: Consolidated from Three Business Segments to Two
Consolidated from Three Business Segments to Two Business Segments Business Segments Beauty Health & Wellness Home & Outdoor Home & Outdoor Health & Wellness Beauty Beauty Home & Wellness & Outdoor Home Beauty & &Wellness Outdoor Proprietary and Confidential
Slide 51: Consumer Obsession Leading to New Capabilities to Drive Outcomes
Consumer Obsession Leading to New Capabilities to Drive Outcomes PEOPLE NEW TOOLS DESIRED OUTCOMES • Deeply consumer connected, in • Sharp, distinctive and • Stronger Brand Advocacy every corner of the Company INSPIRING brand equities • Market Share Gains • Shared passion and dedication • End-to-end
Slide 52: Strategically Extend Our Brands
Strategically Extend Our Brands 52
Slide 53: Proprietary and Confidential
Proprietary and Confidential 53
Slide 54: Proprietary and Confidential
Proprietary and Confidential 54
Slide 55: Proprietary and Confidential
Proprietary and Confidential 55
Slide 56: Larry Witt, President, Home & Outdoor
Larry Witt President, Home & Outdoor Proprietary and Confidential
Slide 57: Proprietary and Confidential
10/17/2023 Proprietary and Confidential 57
Slide 58: Better visual
Better visual 10/17/2023 Proprietary and Confidential 58
Slide 59: Proprietary and Confidential
10/17/2023 Proprietary and Confidential 59
Slide 60: Proprietary and Confidential
10/17/2023 Proprietary and Confidential 60
Slide 61: Be and Win Where the Shopper Shops
Be and Win Where the Shopper Shops
Slide 62: Leverage NA RMO to Strategically Expand Distribution
Leverage NA RMO to Strategically Expand Distribution How we assessed North America white space opportunities What we plan to do next Category Drug Food Club Dept Store Home Mass Speciality Value Wellness • Leverage our NA RMO to Thermometry Rx Humidification Humidification 1 1 1 1 1 1 1 1 1 1 1 1 1
Slide 63: Upping Our Game in How We Execute In-Store and Online
Upping Our Game in How We Execute In-Store and Online Proprietary and Confidential
Slide 64: Fully Leverage Operational Scale and Assets
Fully Leverage Operational Scale and Assets Proprietary and Confidential
Slide 65: Embrace and Leverage Our New Operating Model
Embrace and Leverage Our New Operating Model Fully End-to-End, with Empowered, Autonomous Units Shared Services but Leveraged Description • Business Units (BU) operate with • BU’s collaborate with shared • BU’s laser focused on brands, full autonomy service experts: varying levels of consumers and i
Slide 66: Jay Caron, Chief of Global Operations
Jay Caron Chief of Global Operations Proprietary and Confidential
Slide 67: Opened Our World Class Facility with Advanced Systems and Automation
Opened Our World Class Facility with Advanced Systems and Automation Built for Built for LEED Operational Growth Agility Compliant Completed construction Automation and robotics March 2023; Operational Enables consolidation are faster and more Leadership in Energy Q1 FY24 across distribution efficie
Slide 68: Embrace Next-Level Data and Analytics
Embrace Next-Level Data and Analytics Proprietary and Confidential 68
Slide 69: Turning Data and Insights into Intelligence
Turning Data and Insights into Intelligence Business Intelligence Dashboards will Marketing Mix enable faster Modeling will fuel decision-making real-time portfolio across optimization functions decisions. Next-level Data and First party data will drive Analytics more effective audience targeting at
Slide 70: Data Driven Activation Drives Results
Data Driven Activation Drives Results
Slide 71: Strengthen End-to-End M&A Capabilities
Strengthen End-to-End M&A Capabilities Proprietary and Confidential
Slide 72: Strengthen End-to-End M&A Capabilities
Strengthen End-to-End M&A Capabilities STRATEGY DEAL-MAKING INTEGRATION Sourcing / Planning/ Roll-Out / Diligence Transaction Assessment Negotiation Optimization Proprietary and Confidential
Slide 73: Foster a Winning Culture
Foster a Winning Culture Proprietary and Confidential
Slide 74: Foster a Winning Culture that Develops and Coaches an Agile, Accountable, and Unified Team
Foster a Winning Culture that Develops and Coaches an Agile, Accountable, and Unified Team I R I S E In Touch Mutual Ingenuity Shared Exceptional Respect Success People Proprietary and Confidential
Slide 75: We Have a Set of Clear and Compelling Strategic Choices
We Have a Set of Clear and Compelling Strategic Choices How to Win ► Foster a winning culture Where to Play ► Strengthen end-to-end M&A capabilities Shape and Invest in a Growth Portfolio ► Embrace next-level data and analytics Win with Winning Customers ► Fully leverage operational scale & assets ►
Slide 76: Next-Level Flywheel Creates the Next Virtuous Cycle
Next-Level Flywheel Creates the Next Virtuous Cycle Accretive Capital Next-Level Growth Strategy Deployment and Investment Balance Sheet Improved Go-To-Market Productivity Structure Structural Financial Best in Class Advantages Gross Margin State-Of-The-Art Further Operating Distribution Network Co
Slide 77: Brian Grass, Chief Financial Officer
Brian Grass Chief Financial Officer Proprietaryand Proprietary andConfidential Confidential
Slide 78: Agenda
Agenda • Fiscal Year 24 Performance Perspective • Transformation Phase II Highlights and Takeaways • Elevate for Growth Illustrations and Long-Term Targets • Next-Level Value Creation o Next-Level Strategy Meets Next-Level Flywheel o Why Invest in Helen of Troy Proprietary and Confidential
Slide 79: FY24 Q2 Net Sales – Solid Growth on a Two-Year Stack
FY24 Q2 Net Sales – Solid Growth on a Two-Year Stack 535 $521.4 515 $491.6 495 $469.5 475 Q2 Net Sales $M 455 435 415 395 375 FY22 (Core) FY23 FY24 Proprietary and Confidential
Slide 80: Free Cash Flow Progression – Back on Track
Free Cash Flow Progression – Back on Track Quarterly Cash Flow* Full-Year Cash Flow Progression ($M) Progression ($M) $250 to $270 by Fiscal 180 Year 160 150 $130 140 $109 120 100 $91 100 80 60 50 $28 $33 40 20 0 0 -50 ($73) -100 ($115) -150 Q1 Q2 Q3 Q4 Q1 Q2 FY23 FY24 FY23 FY24E * Includes expected
Slide 81: Consistency of Performance with Margin Expansion and Cash Flow Growth
Consistency of Performance with Margin Expansion and Cash Flow Growth Consistency of Performance vs. Outlook Midpoint Year-Over-Year Improvement Net Sales ($M) Gross Margin Rate 46.7% 46.1% $492 45.4% $485 $485 $475 $467 42.5% 42.0% 41.6% $449 Q4 FY23 Q1 FY24 Q2 FY24 Q1 Q2 Q2 YTD Outlook Actual FY23
Slide 82: TTM Trends and FY24 Outlook Signal an Inflection Point
Trailing 12 Month (TTM) Trends and FY24 Outlook Signal an Inflection Point FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q4E TTM TTM TTM TTM 46.9% • Gross margin improvement from margin mix, lower freight and commodity 45.4% costs, SKU rationalization, and EPA compliance costs in FY23 Gross Margin 44.3% 43.4% • Expe
Slide 83: Pegasus Restructuring and Asset Optimization Progress
Pegasus Restructuring and Asset Optimization Progress Restructuring Plan Asset Optimization • We continue to make significant progress with Project Pegasus • Our asset optimization initiative is a multi-pronged effort to improve the overall productivity of our balance sheet • Reduction in estimated
Slide 84: Expected Decrease in Restructuring Charges and Gain on Sale Narrow Delta Between GAAP and Non-GAAP EPS
Expected Decrease in Restructuring Charges and Gain on Sale of Facility Narrow Delta Between GAAP and Non-GAAP EPS Original Outlook Updated Outlook* $9.00 $9.00 $7.03 $4.67 GAAP Non-GAAP GAAP Non-GAAP *Reflects high end of the Company’s FY24 outlook range provided on October 4, 2023 Proprietary and
Slide 85: Honing of Outlook for the Second Half of FY24
Honing of Outlook for the Second Half of FY24 Revenue and Earnings Shift from Q3E to Q4E • Reflects greater visibility on the puts and takes that are under our control o Distribution gains secured in H1 are more fully weighted in Q4 o Isolated supply pinch due to demand exceeding original forecast o
Slide 86: FY24 Expected Net Sales and Adjusted EPS Growth Trajectory
FY24 Expected Net Sales and Adjusted EPS Growth Trajectory FY24 Net Sales Growth by Quarter 0.06 3.5% 0.04 0.02 0 (2.0%) -0.02 -0.04 (6.6%) (5.7%) -0.06 -0.08 Q1 Q2 Q3E* Q4E* FY23 Net Sales Growth (6.1%) 9.7% (10.6%) (16.7%) FY24 Adjusted EPS Growth by Quarter 0.4 27.9% 0.3 0.2 0.1 0.0% 0 -0.1 (19.5
Slide 87: Transformation Phase II Highlights & Takeaways
Transformation Invest in Phase II Leadership Brands Optimize Double Highlights & Capital Deployment Down on International Takeaways Maximize Selective Operating & Strategic Efficiency M&A Accelerate Consumer Shared Service Centric Excellence Unify, Include & Elevate the Best People 10/17/2023 Propri
Slide 88: Strong Phase II Performance Despite Significant Macro Disruption
Strong Phase II Performance Despite Significant Macro Disruption Provides Healthy Base as We Enter Elevate for Growth Net Sales ($M) Gross Profit ($M) $927 $953 $899 $946 $2,099 $2,223 $2,073 $2,015 $734 $641 $1,564 $1,707 Gross Profit Margin 41.0% 43.0% 44.2% 42.9% 43.4% 46.9% FY19 FY20 FY21 FY22 F
Slide 89: Adjusted Income and Adjusted EBITDA Cash Conversion Back on Track
Adjusted Income and Adjusted EBITDA Cash Conversion Back on Track Adjusted Income Conversion to Free Cash Flow 1.3x 1.1x 0.9x 0.8x 0.2x 0.1x FY19 FY20 FY21 FY22 FY23 FY24E Adjusted EBITDA Conversion to Cash Flow from Operations 0.9x 0.9x 0.9x 0.8x 0.6x 0.4x FY19 FY20 FY21 FY22 FY23 FY24E Notes: 1) F
Slide 90: Key Metrics Indicate HELE is Undervalued Compared to Peers
Key Metrics Indicate HELE is Undervalued Compared to Peers EV/Forward Adjusted EBITDA Free Cash Flow Yield 15.7x 16.2x 15.3x 10% 12.8x 11.1x 10.0x Current Peer Current Peer 6% 6% Median 6.9% Median 10.3x 4% 1% 1% FY19 FY20 FY21 FY22 FY23 FY24E FY19 FY20 FY21 FY22 FY23 FY24E Adjusted EBITDA Conversio
Slide 91: Recent Strategic Investments Provide Strong Platform for the Elevate for Growth Era
Despite Challenges and Macro Disruption of the Past Two Years, Recent Strategic Investments Provide Strong Platform for the Elevate for Growth Era Acquisition of "insurgent" brands at attractive multiples elevates our growth profile and sweetens our mix • Drybar - High growth prestige beauty brand w
Slide 92: Elevate for Growth Illustrations and Long-Term Targets
Elevate for Growth Illustrations and Long-Term Targets 10/17/2023 Proprietary and Confidential
Slide 93: Introduction to Elevate for Growth
Introduction to Elevate for Growth Executive Summary Average Annual Organic Target Highlights • We estimate strong financial outcomes over the course of the plan, built by bottom-up organic revenue growth assumptions, acquisition and Net Sales Growth (1) 3.0 - 4.0% divestiture inputs, and required i
Slide 94: Refocusing Investment Spend on Invest to Grow Brands
Refocusing Investment Spend on Invest to Grow Brands while Maintaining Sufficient Investment to Hold Market Position on Stronghold Brands Net Sales Growth by Invest to Grow/Stronghold Brands ~6% $1,800 CAGR $1,600 Avg GP% ~58% $1,400 $1,200 ~3% CAGR $1,000 $800 Avg GP% $600 ~50% $400 $200 $0 FY24E F
Slide 95: Recent Acquisitions Have Enhanced the Invest to Grow Portfolio
Recent Acquisitions of High Growth Assets at Attractive Multiples Have Enhanced the Invest to Grow Portfolio and Created Significant Value Purchase Price $210M $255M $414M $150M HELE EBITDA Trading Multiple 12.0x 16.4x 17.5x 15.0x Acquisition EBITDA Multiple 11.6x 13.0x 13.5x 10.0x Discount $7M $67
Slide 96: Improve the Core and Add More
Improve the Core and Add More Net Sales $ FY24E FY25E * FY26E FY27E FY28E FY29E FY30E Base Recent Acquisitions Elevate for Growth Acquisition Illustration Base: All other brands except "Recent Acquisitions“ Recent acquisitions: Hydro Flask, Drybar, Osprey and Curlsmith * An Illustrative divestiture
Slide 97: We Expect Composition of Growth Drivers to Evolve
We Expect Composition of Growth Drivers to Evolve – Incremental Investments in Product Development and Brand Building Drive L-T Growth Composition of Expected Revenue Growth by Driver FY30 FY25 Brand ~45% New Product Brand ~35% ~55% New Product Building ~30% Introductions Building Introductions ~25%
Slide 98: Launched Pegasus to Expand Margins, Create Efficiency and Fuel Growth
Launched Pegasus to Expand Margins, Create Efficiency and Fuel Growth • Objective: Project Pegasus Initiatives o Provide new efficiencies to amplify and accelerate growth o Invest more in growing market share and developing new products 1 Further optimize our brand portfolio o Expand our operating m
Slide 99: Impact of Iron Giant and U.S. Distribution Network Consolidation
Impact of Iron Giant and U.S. Distribution Network Consolidation FY23 Network FY26/FY27 Network FY26E Network Cost Mississippi #1 Texas Tennessee Annual Cost per Net Operating Cost $ Revenue Mississippi #2 Mississippi #4 FY23 ~$82 million ~5.2% FY26 ~$71 million Est. ~4.1% Est. Mississippi #3 Missis
Slide 100: Consistent and Balanced Capital Deployment Strategy
Consistent and Balanced Capital Deployment Strategy Focuses on Creating Value through Strategic Choices $1.63 Billion $1.40 Billion (Est.) CapEx $1.25 Billion CapEx CapEx Acquisitions & Acquisitions & Acquisitions & Strategic Investments Strategic Investments Strategic Investments Return of Capital
Slide 101: Capital Deployment Illustration - Significant Earnings Accretion
Capital Deployment Illustration - Significant Earnings Accretion with Remaining Dry Powder to Further Deploy Adjusted EPS Accretion from Capital Deployment Acquisitions Share Repurchase $0.55 $1.09 Interest Expense $0.32 $0.55 $0.33 $0.32 $0.34 $0.51 $0.43 $0.32 $0.32 $0.37 $0.18 $0.18 FY24E FY25E F
Slide 102: Earnings Growth Drivers Fuel Significant Reinvestment and EPS Accretion
Earnings Growth Drivers Fuel Significant Reinvestment and EPS Accretion 29% 30% 29% 28% 26% 26% Annual Adjusted EPS Growth Annual Growth Investment Operating Leverage Capital Deployment/Tax Iron Giant/DC Consolidation Portfolio/SKU Optimization 10% 10% 10% 10% 10% 10% (16%) (19%) (16%) (19%) (20%) I
Slide 103: Pegasus Fuels Step-Level Increase in Growth Investment
Pegasus Fuels Step-Level Increase in Growth Investment ≥ 9% of Net Sales ~6% of Net Sales Reinvestment / Earnings Growth Ratio 50% / 50% 67% / 33% FY24E Elevate for Growth Target Note: Growth investment as presented does not include trade advertising, promotions and other programs that are recorded
Slide 104: Summary of Elevate for Growth Model
Phase I Phase II Elevate for Growth Organic Elevate for Growth Inorganic Summary of Elevate for Growth Model Net Sales Revenue ($M) and YOY Growth Adjusted EBITDA and Margin Reflects Q1 Reflects Q1 divestiture divestiture $2,223 $2,099 $2,073 $2,015 Organic CAGR $378 Organic $1,707 $355 $348 $1,564
Slide 105: Elevate for Growth Targets
Elevate for Growth Targets Average Annual Organic Targets Phase I Phase II Elevate for Growth Net Sales Growth (1) 2.0% - 3.0% 2.5% - 3.5% 3.0% - 4.0% Operating Margin Expansion 30 - 40 bps 20 - 30 bps -- Adjusted EBITDA Margin Expansion -- -- 30 - 40 bps Adjusted EPS Growth (2) 7% ≥8% ≥10% Growth I
Slide 106: Next-Level Value Creation
Next-Level Value Creation Proprietary and Confidential 106
Slide 107: Next-Level Strategy Meets Next-Level Flywheel
Next-Level Strategy Meets Next-Level Flywheel Proprietary and Confidential
Slide 108: Next-Level Flywheel Creates the Next Virtuous Cycle
Next-Level Flywheel Creates the Next Virtuous Cycle Accretive Capital Deployment Next-Level Growth Strategy and Investment • Even more Better Together M&A • Greater focus on higher growth and higher margin brands • Amplify the Invest to Grow portfolio • Significantly more brand and product investmen
Slide 109: Why Invest in Helen of Troy
Why Invest in Helen of Troy Why Always Why Now • Diversified portfolio of leading brands • Business fundamental inflection point; poised for growth • Asset and employee light model • Growth strategy fueled by Pegasus is a game changer • Strong cash flow • Diversified team – balance of continuity and
Slide 110: Operating Profit Growth, Tax Efficiency, Working Capital Improvement and Debt Reduction Drive ROIC
Operating Profit Growth, Tax Efficiency, Working Capital Improvement and Debt Reduction Combine to Drive Return on Invested Capital 2.8x 2.0x-1.85x 172 18%+ ROIC ~80 FY23 WACC 8.5% Cash Conversion Cycle 7.9% Debt/EDITDA FY23 FY24E FY25E FY26E FY27E FY28E FY29E FY30E ROIC Cash Conversion Cycle Debt/E
Slide 111: Illustrative Share Price Impact with Improved Multiple and EPS Growth
Illustrative Share Price Impact with Improved Multiple and EPS Growth FY21-22 $398 21.5x $296 Improved 16.0x Current $228 12.3x $111 FY24E FY25E FY26E FY27E FY28E FY29E FY30E Proprietary and Confidential
Slide 112: Key Investment Highlights
Key Investment Highlights • Trailing 12-month trends and FY24 outlook signal an inflection point in fundamentals and operating results • Pegasus provides next-level reinvestment fuel, operating efficiency and organizational capability • Key metrics and related cash conversion ratios indicate that He
Slide 113: Elevate for Growth
=~ / Elevate m==_/ for Growth
Slide 114: Innovation Showcase
Innovation Showcase Proprietary and Confidential 114
Slide 115: Q&A with Global Leadership Team
Q&A with Global Leadership Julien Mininberg Chief Executive Officer Noel Geoffroy Chief Operating Officer Brian Grass Chief Financial Officer Tessa Judge Chief Legal Officer Team Larry Witt Mauricio Troncoso Nicolas Lanus Ronald Anderskow Jay Caron President of Home & Outdoor President of Beauty & W
Slide 116: Key Takeaways
K E Y TA K E AWAY S Elevate for Growth Also brings new Even more Next-level builds and improves choices that will consumer brand building upon proven themes help us elevate obsessed More investment dollars and sharper Expanded availability, be Next-level centralization of Stepping up investment choi
Slide 117: Elevating Lives, Soaring Together
Elevating Lives, Soaring Together
Slide 118: Appendix
Appendix Proprietary and Confidential 118
Slide 119: Reconciliation: Operating Cash Flow to Free Cash Flow
Reconciliation of Non-GAAP Financial Measures - GAAP Net Cash Provided by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) Fiscal Years Ended Last Day of February, Outlook Fiscal 2024 2023 2022 2021 2020 2019 Net cash provided by operating activities (GAAP) $ 300,000 — $
Slide 120: Reconciliation: Operating Cash Flow to Free Cash Flow, Six Months
Reconciliation of Non-GAAP Financial Measures - GAAP Net Cash Provided (Used) by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) Six Months Ended August 31, 2023 2022 Net cash provided (used) by operating activities (GAAP) $ 157,732 $ (75,452) Less: Capital and intangibl
Slide 121: Reconciliation: Operating Cash Flow to Free Cash Flow, Quarterly
Reconciliation of Non-GAAP Financial Measures - GAAP Net Cash (Used) Provided by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) Quarterly Period Ended Twelve Months Ended May August November February February 28, 2023 Net cash (used) provided by operating activities (GA
Slide 122: Reconciliation: Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures – GAAP Net Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA and Adjusted EBITDA Margin (Non-GAAP) (Unaudited) (in thousands) Fiscal Years Ended Last Day of February 2023 2022 2021 2020 2019 Net Income, as
Slide 123: Reconciliation: Net Income to EBITDA, Quarterly TTM
Reconciliation of Non-GAAP Financial Measures – GAAP Net Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA and Adjusted EBITDA Margin (Non-GAAP) (Unaudited) (in thousands) Quarterly Period Ended Twelve Months Ended November February May August August
Slide 124: Reconciliation: Net Income to EBITDA, Quarterly TTM
Reconciliation of Non-GAAP Financial Measures – GAAP Net Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA and Adjusted EBITDA Margin (Non-GAAP) (Unaudited) (in thousands) Quarterly Period Ended Twelve Months Ended August November February May May 31,
Slide 125: Reconciliation: Diluted EPS to Adjusted Diluted EPS, Quarterly
Reconciliation of Non-GAAP Financial Measures - GAAP Diluted Earnings Per Share (“EPS”) to Adjusted Diluted EPS (Non-GAAP) (Unaudited) Quarterly Period Q2 FY24 Q1 FY24 Q4 FY23 Diluted EPS, as reported (GAAP) $ 1.14 $ 0.94 $ 1.50 Bed, Bath & Beyond bankruptcy, net of tax — 0.17 — EPA compliance costs
Slide 126: Reconciliation: Diluted EPS to Adjusted Diluted EPS, Fiscal Years
Reconciliation of Non-GAAP Financial Measures - GAAP Diluted EPS to Adjusted Diluted EPS (Non-GAAP) (Unaudited) Fiscal Years Ended Last Day of February, 2023 2022 2021 2020 2019 Diluted EPS as reported (GAAP) $ 5.95 $ 9.17 $ 10.08 $ 6.02 $ 6.62 EPA compliance costs, net of tax 0.96 1.31 — — — Gain f
Slide 127: Reconciliation: Income and Diluted EPS, Fiscal 2023
Reconciliation of Non-GAAP Financial Measures - GAAP Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Year Ended February 28, 2023 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported
Slide 128: Reconciliation: Income and Diluted EPS, Fiscal 2021
Reconciliation of Non-GAAP Financial Measures - GAAP Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Year Ended February 28, 2021 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported
Slide 129: Reconciliation: Income and Diluted EPS, Fiscal 2019
Reconciliation of Non-GAAP Financial Measures - GAAP Income and Diluted EPS from Continuing Operations to Adjusted Income and Adjusted Diluted EPS from Continuing Operations (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Year Ended February 28, 2019 Income From Continuing Operat
Slide 130: Fiscal 2024 Outlook for Net Sales Revenue
Fiscal 2024 Outlook for Net Sales Revenue (Unaudited) (in thousands) Fiscal 2023 Outlook for Fiscal 2024 Net sales revenue $ 2,072,667 $ 1,965,000 — $ 2,015,000 Net sales revenue decline (5.2)% — (2.8)% 130
Slide 131: Fiscal 2024 Outlook: Operating Income to EBITDA and Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures - Fiscal 2024 Outlook for GAAP Operating Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA and Adjusted EBITDA Margin (Non-GAAP) (Unaudited) (in thousands) Six Months Ended Outlook for the Balance of the A
Slide 132: Fiscal 2024 Outlook: GAAP Diluted EPS to Adjusted Diluted EPS
Reconciliation of Non-GAAP Financial Measures - Fiscal 2024 Outlook for GAAP Diluted EPS to Adjusted Diluted EPS (Non-GAAP) and GAAP Effective Tax Rate to Adjusted Effective Tax Rate (Non-GAAP) (Unaudited) Outlook for the Balance of the Six Months Ended Fiscal Year August 31, 2023 (Six Months) Outlo
Slide 133: Reconciliation: Net Leverage Ratio
Reconciliation of Non-GAAP Financial Measures – Net Leverage Ratio (Non-GAAP) (Unaudited) (in thousands) Fiscal Year Ended February 28, 2023 Adjusted EBITDA (non-GAAP) $ 327,519 Plus: Pro forma effect of acquisitions 1,985 Adjusted EBITDA per the credit agreement $ 329,504 Total borrowings under the
Slide 134: Glossary of Terms
Glossary of Terms H1 – First half of the applicable fiscal year Bed, Bath, & Beyond bankruptcy – Represents a charge for uncollectible receivables due to the bankruptcy of Bed, Bath & Beyond H2 – Second half of the applicable fiscal year Capital Deployment – Combination of capital used to repurchase
Slide 135: Glossary of Terms
Glossary of Terms Free Cash Flow (FCF) – Net cash provided by operating activities less capital and intangible asset Organic Revenue - Net sales revenue associated with product lines or brands after the first twelve expenditures months from the date the product line or brand was acquired, excluding