Wd-40 Company · NASDAQ:WDFC
Wd-40 — Q2 FY2022 Earnings Presentation
30 slides from Wd-40's earnings presentation, Apr 7, 2022
Slide 1: Q2 FY22 Earnings Results
Q2 FY22 EARNINGS RESULTS April 7, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal entities. WD-40 Company markets maintenance products (“MP”) under the WD-40®, 3-IN-ONE® and GT85® brand names. Currently included
Slide 3: Leadership Change
WD-40 COMPANY LEADERSHIP CH ae
Slide 4: Planned Leadership Transition
PLANNED LEADERSHIP TRANSITION • Last month, we began the execution of a planned leadership transition • Garry Ridge has announced his retirement from the role of CEO effective 8/31/22 • Steve Brass was named as Garry’s successor and has been appointed to serve on the Board of Directors Garry Ridge •
Slide 5: Strategic Initiatives
WD-40 COMPANY STRATERIP INTIATIVES
Slide 6: Strategic Initiatives
Strategic Initiatives Desired Outcome(1) 1. Build a Business for the Future Build an enduring business that we will be proud to pass onto the next generation. By Fully integrate ESG using our purpose and values as a decision-making filter, we will make infinite-minded factors into our business decis
Slide 7: 2022 Employee Engagement Survey Results
2022 Employee Engagement Survey Results Question Result Average of all questions 93.5 I love to tell people that I work for WD-40 Company. 98.3 I understand how my job contributes to achieving WD-40 Company’s goals. 98.1 I feel my opinions and values are a good fit with the WD-40 Company culture. 97
Slide 8: Revenue Growth Aspirations
Revenue Growth Aspirations FY 2011 FY 2021 2025 Growth Aspirations Reported Revenue Reported Revenue Anticipated Revenue Target $336M $488M $650M – $700M(1) $259M $371M ~$525M $77M $51M $66M ~$125M ~$50M Revenue Generated by WD-40 Multi-Use Product Revenue Generated by WD-40 Specialist(2) Revenue Ge
Slide 9: Growth Ambition by Segment
Growth Ambition by Segment Americas EMEA Asia-Pacific Total Company 44% of global 43% of global 13% of global sales* sales* sales* Targeting a compound annual Targeting a Targeting a Targeting a growth in the compound annual compound annual compound annual mid-to-high growth rate of growth rate of g
Slide 10: Q2 FY22 Results
WD-40 COMPANY Q2FY22RESULTS =
Slide 11: Q2 FY22 Results
Q2 FY22 Results ($ in millions; except EPS, gross profit and % change) Q2 FY22 Q2 FY21 % Change Net Sales $130.0 $111.9 16% Gross Profit (%) 50.4% 55.4% -500 bps Operating Income $24.7 $20.7 20% Net Income $19.5 $17.2 13% EPS (Diluted) $1.41 $1.24 14% • Overall, changes in foreign currency exchange
Slide 12: Americas Segment
Americas Segment Americas – Q2 FY22 vs. Q2 FY21 $54.5 • Total reported segment sales ▲18% • Segment made up 42% of global sales $46.2 • Maintenance product sales ▲ 22% • WD-40 Specialist sales ▲ 88% • HCCP sales ▼ 16% • Maintenance Product (MP) sales: • U.S. MP sales ▲ 26% • Latin America MP sales ▲
Slide 13: EMEA Segment
EMEA Segment EMEA – Q2 FY22 vs. Q2 FY21 • Total reported segment sales ▲ 9% • Segment made up 42% of global sales $54.1 • Maintenance product sales ▲ 9% $49.8 • WD-40 Specialist sales ▲ 15% • HCCP sales ▼ 5% • In constant currency (GBP) sales ▲ 10% • EMEA direct market sales ▲ 6% • 65% of segment sa
Slide 14: Asia-Pacific Segment
Asia-Pacific Segment Asia-Pacific – Q2 FY22 vs. Q2 FY21 • Total reported Asia-Pacific sales ▲ 34% • Segment made up 16% of global sales $21.4 • Maintenance product sales ▲ 42% • WD-40 Specialist sales ▲ 26% $15.9 • HCCP sales ▼ 10% • Australia sales ▼ 5% • In functional currency (AUD) sales flat • C
Slide 15: Must-Win Battles
MUST-WIN BATTLES
Slide 16: Our Must-Win Battles
Our Must-Win Battles Must-Win Battle Must-Win Battle #1 #2 Geographic Premiumization Expansion Must-Win Battle Must-Win Battle #3 #4 Drive WD-40 Digital Specialist Growth Commerce
Slide 17: Must-Win Battle #1 - Geographic Expansion
Must-Win Battle #1 - Geographic Expansion We estimate the potential global market opportunity for WD-40 Multi-Use Product to be ~$1.0B (1) $100 China Americas Indonesia EMEA India Asia-Pacific Saudi Germany Arabia Opportunity (in millions) Mexico South Korea Egypt Thailand Brazil Turkey Nigeria Ital
Slide 18: Must-Win Battle #2 - Premiumization
Must-Win Battle #2 - Premiumization • At the end of FY21, sales of premiumized products represented 49% WD-40 Multi-Use Product global sales • Our objective is to grow Smart Straw penetration to >60% of WD-40 Multi-Use Product global sales Next Generation EZ-Reach® Classic Can Smart Straw® Smart Str
Slide 19: Must-Win Battle #3 – WD-40 Specialist
Must-Win Battle #3 – WD-40 Specialist Our new WD-40 Specialist packaging creates a stronger brand presence for both WD-40 Multi-Use Product and WD-40 Specialist, aligning them as the blue and yellow brand with the little red top 19 19
Slide 20: Must-Win Battle #4 – Digital Commerce
Must-Win Battle #4 – Digital Commerce Our global digital ambition is to engage with end-users at scale, becoming the global leader in our category on the digital platforms they use, making it easy to access, learn about, and purchase our brands online. Creating positive lasting memories….ONLINE 20
Slide 21: 55/30/25 Business Model
55/30/25 BUSINESS MODEL
Slide 22: Q2 FY22 Gross Margin
Q2 FY22 Gross Margin Gross margin decreased by 500 basis points Gross Margin vs. Prior Year primarily due to the following unfavorable Q2 FY21 Q2 FY22 impacts: 55.4% 50.4% Change vs. Prior Gross Margin Drivers Year (basis points) Quarterly Gross Margin Trend Changes in specialty chemical costs and a
Slide 23: Cost of Doing Business
Cost of Doing Business • Q2 FY22 cost of doing business was 30%, down from 36% compared to Q2 FY21 • Cost of doing business comes from three primary areas: • People costs, including earned incentive accruals • Marketing, advertising and promotion • Freight costs to get products to customers • Invest
Slide 24: 55/30/25 Results
55/30/25 Results Target Q2 FY22 Q2 FY21 Q2 FY20 55/30/25 Business Model Actuals Actuals Actuals Gross Margin 55% 50% 55% 54% Cost of Doing Business 30% 30% 36% 34% EBITDA 25% 21% 20% 20% * See appendix for descriptions and reconciliations of these non-GAAP measures. Note: Percentages may not aggrega
Slide 25: Guidance
GUIDANCE
Slide 26: Fiscal Year 2022 Guidance
Fiscal Year 2022 Guidance Sales Growth Between 7% and 12% Net Sales Between $522 and $547 million Gross Margin Between 50% and 51% A&P Investment Between 5% and 6% of net sales Provision for Income Tax Between 20% and 21% Net Income Between $70.7 and $72.5 million Diluted EPS Between $5.14 and $5.27
Slide 27: Appendix
APPENDIX
Slide 28: Foreign Currency Translation Impact or “Constant Currency”
Foreign Currency Translation Impact or “Constant Currency” ($ in millions; except EPS, gross profit and % change) Financial Results As reported Q2 FY22 Q2 FY21 % Change Net Sales $130.0 $111.9 16% Gross Profit (%) 50.4% 55.4% -500 bps Operating Income $24.7 $20.7 20% Net Income $19.5 $17.2 13% EPS (
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) This presentation contains certain non-GAAP (accounting principles generally accepted in the United States of America) measures, that our management believes provide our stockholders with additional insights into WD-40 Company’s results of operations and how it runs its b
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