Oil-dri Corporation Of America · NYSE:ODC
Oil-dri Corporation Of America — Q1 2024 Earnings Presentation
73 slides from Oil-dri Corporation Of America's earnings presentation, Dec 13, 2023
Slide 1: Oil-Dri Annual Meeting of Stockholders Fiscal Year 2023
Oil-Dri Corporation of America Please Press Play Upon Logging In Annual Meeting of Stockholders Fiscal Year 2023 1 1
Slide 2: Introduction
Introduction Leslie Garber Director of Investor Relations 2 2
Slide 3: Agenda
Agenda • Election of Directors & Other Proposals • Business Presentations & Financial Review • Questions & Answers 3 3
Slide 4: Election of Directors & Other Proposals
Election of Directors & Other Proposals Laura Scheland Chief Legal Officer and VP & GM of Consumer Products Division 4 4
Slide 5: Proposals
Proposals Proposal No. 1: Election of Directors Proposal No. 2: Ratification of Appointment of Independent Auditor Proposal No. 3: Advisory Vote on Executive Compensation Proposal No. 4: Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation Proposal No. 5: Approval of the Ame
Slide 6: Cautionary Statements Regarding Forward-Looking Information
Cautionary Statements Regarding Forward-Looking Information Except for the historical information contained herein, certain of the matters discussed in this communication constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
Slide 7: Fiscal Year 2023
Fiscal Year 2023 Daniel S. Jaffee President & Chief Executive Officer 7 7
Slide 8: New Vice Presidents & Senior Promotions
New Vice Presidents & Senior Promotions 8 8
Slide 9: Laura Scheland
Laura Scheland Chief Legal Officer, VP & GM of Consumer Products Division Currently at Oil-Dri: • Oversight of all Legal Affairs of the Company • Business Management of the Consumer Products Division Education: • J.D. from Saint Louis University • B.S. in Accounting & Computer Applications from the
Slide 10: Tony Parker
Tony Parker VP of Legal Currently at Oil-Dri: • Management of the Legal Department including Advising on Corporate Matters, Intellectual Property, Litigation, and Employment Issues Education: • J.D. from Northern Illinois University • B.A. Political Science & History from the University of Wisconsin
Slide 11: Jacob Smith
Jacob Smith VP Finance and Treasury Currently at Oil-Dri: • Oversight of Treasury, Corporate and Divisional Finance, and Accounts Receivable Education: • MBA from Indiana University Bloomington • B.S. in Finance and Accounting from Indiana University Bloomington Experience: • 5 Years with Oil-Dri -
Slide 12: Financial Results
Financial Results Fiscal 2023 & First Quarter Fiscal 2024 Susan Kreh Chief Financial Officer & Chief Information Officer 12 12
Slide 13: Business & Financial Highlights
Business & Financial Highlights • Increased pricing to offset inflationary cost pressures and pursue historical margin levels • Continued investment in growth opportunities • Launched Cat’s Pride Antibacterial Clumping Litter • Grew animal health sales year-over-year by 17% • Secured new renewable
Slide 14: Retail & Wholesale Net Sales by Principal Product
Retail & Wholesale Net Sales by Principal Product (millions) $250 CAGR: 13.3% $226 $200 $196 $176 $150 $100 CAGR: 17.3% $50 $39 $44 $32 $0 Cat Litter Industrial & Sports FY21 FY22 FY23 14 14 14
Slide 15: Business to Business Net Sales by Principal Product
Business to Business Net Sales by Principal Product (millions) $90 CAGR: 21.3% $80 $78 $70 $62 $60 $53 CAGR: 24.0% $50 $40 $40 $30 CAGR: 15.5% $30 $26 $24 $21 $20 $18 $10 $0 Agricultural & Horticultural Bleaching Clay & Fluids Purification Animal Health & Nutrition FY21 FY22 FY23 15 15 15
Slide 16: Net Sales (millions)
Net Sales (millions) CAGR 10.5% (FY 19 - FY 23) $450 $413 $400 $349 $350 $305 $300 $283 $277 $250 $200 FY 19 FY 20 FY 21 FY 22 FY 23 16 16 16
Slide 17: Net Sales (millions)
Net Sales (millions) CAGR 10.5% (FY 19 - FY 23) $450 $413 $400 $349 $350 $305 $300 $277 $283 $250 $200 $150 $111 $99 $100 $50 $0 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 17 17 17
Slide 18: Tons Sold (thousands)
Tons Sold (thousands) CAGR 1.7% (FY 19 - FY 23) 900 828 811 800 783 758 755 700 600 500 400 300 200 100 0 FY 19 FY 20 FY 21 FY 22 FY 23 18 18 18
Slide 19: Tons Sold (thousands)
Tons Sold (thousands) CAGR 1.7% (FY 19 - FY 23) 900 828 811 800 783 758 755 700 600 500 400 300 208 198 200 100 0 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 19 19 19
Slide 20: Net Sales Per Ton
Net Sales Per Ton CAGR 8.7% (FY 19 - FY 23) $600 $550 $509 $500 $450 $421 $400 $389 $375 $365 $350 $300 FY 19 FY 20 FY 21 FY 22 FY 23 20 20 20
Slide 21: Net Sales Per Ton
Net Sales Per Ton CAGR 8.7% (FY 19 - FY 23) $600 $563 $550 $509 $500 $473 $450 $421 $400 $389 $375 $365 $350 $300 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 21 21 21
Slide 22: Gross Profit Per Ton
Gross Profit Per Ton CAGR 12.2% (FY 19 - FY 23) $160 $140 $127 $120 $100 $91 $83 $80 $80 $75 $60 $40 FY 19 FY 20 FY 21 FY 22 FY 23 22 Data for FY19 – FY20 has been adjusted for a reclassification of costs between selling, general and administrative expenses and cost of sales. 22 22
Slide 23: Gross Profit Per Ton
Gross Profit Per Ton CAGR 12.2% (FY 19 - FY 23) $160 $156 $140 $127 $120 $107 $100 $91 $83 $80 $80 $75 $60 $40 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 23 Data for FY19 – FY20 has been adjusted for a reclassification of costs between selling, general and administrative expenses and cost o
Slide 24: Gross Margin %
Gross Margin % 30.0% 26.8% 25.0% 25.0% 24.3% 21.4% 20.0% 17.9% 15.0% 10.0% 5.0% 0.0% FY19 FY20 FY21 FY22 FY23 24 Data for FY19 – FY20 has been adjusted for a reclassification of costs between selling, general and administrative expenses and cost of sales. 24 24
Slide 25: Gross Margin %
Gross Margin % 30.0% 27.8% 26.8% 25.0% 25.0% 24.3% 22.6% 21.4% 20.0% 17.9% 15.0% 10.0% 5.0% 0.0% FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 25 Data for FY19 – FY20 has been adjusted for a reclassification of costs between selling, general and administrative expenses and cost of sales. 25 25
Slide 26: Net Income Per Ton
Net Income Per Ton CAGR 21.5% (FY 19 - FY 23) $60 $50 $40 $37 $30 $25 $20 $17 $14 $10 $7 $0 FY 19 FY 20 FY 21 FY 22 FY 23 26 26 26 FY22 data includes a non-recurring charge related to Goodwill Impairment of $4.4M, net of tax. FY23 data includes non-recurring charges related to Landfill Modification
Slide 27: Net Income Per Ton
Net Income Per Ton CAGR 21.5% (FY 19 - FY 23) $60 $54 $50 $40 $37 $30 $25 $25 $20 $17 $14 $10 $7 $0 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 27 FY22 data includes a non-recurring charge for Goodwill Impairment of $4.4M, net of tax. FY23 data includes the non-recurring charges related to L
Slide 28: Earnings Per Basic Common Share
Earnings Per Basic Common Share CAGR 25.0% (FY 19 - FY 23) $5.00 $4.45 $4.00 $3.00 $2.70 $2.00 $1.82 $1.61 $1.00 $0.83 $0.00 FY 19 FY 20 FY 21 FY 22 FY 23 28 28 28
Slide 29: Earnings Per Basic Common Share
Earnings Per Basic Common Share CAGR 25.0% (FY 19 - FY 23) $5.00 $4.45 $4.00 $3.00 $2.70 $2.00 $1.82 $1.61 $1.61 $1.00 $0.83 $0.80 $0.00 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 29 29 29
Slide 30: Paid Dividends Per Share
Paid Dividends Per Share CAGR 3.9% (FY 19 - FY 23) $1.15 $1.12 $1.10 $1.08 $1.05 $1.04 $1.00 $1.00 $0.96 $0.95 $0.90 $0.85 $0.80 FY 19 FY 20 FY 21 FY 22 FY 23 30 30 30
Slide 31: Paid Dividends Per Share
Paid Dividends Per Share CAGR 3.9% (FY 19 - FY 23) $1.20 $1.12 $1.08 $1.04 $1.00 $1.00 $0.96 $0.80 $0.60 $0.40 $0.28 $0.29 $0.20 $0.00 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 31 31 31
Slide 32: Significant Cash Outlays
Significant Cash Outlays FY 22 FY 23 $2.8MM Operating Working Capital $14.1MM Operating Working… $24.4MM CapEx $11.8MM Share Repurchases $22MM CapEx $1.1MM Share Repurchases $7.4MM $7.4MM Dividends Dividends Total: $44MM Total: $47MM 32 32 32
Slide 33: Net Debt (millions)
Net Debt (millions) $25 $16.5 $15 $5 $0.1 ($5) ($15) ($15.7) ($15.7) ($25) ($31.0) ($35) FY 19 FY 20 FY 21 FY 22 FY 23 33 Net Debt defined as Notes Payable minus Cash and Cash Equivalents 33 33
Slide 34: Net Debt (millions)
Net Debt (millions) $25 $22.3 $16.5 $15 $5 $2.3 $0.1 ($5) ($15) ($15.7) ($15.7) ($25) ($31.0) ($35) FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 34 Net Debt defined as Notes Payable minus Cash and Cash Equivalents 34 34
Slide 35: Share Price
Share Price (As of July 31) $65.00 $62.77 $60.00 $55.00 $50.00 $45.00 $40.00 $35.43 $34.77 $35.57 $35.00 $30.14 $30.00 $25.00 $20.00 FY 19 FY 20 FY 21 FY 22 FY 23 35 35 35
Slide 36: Share Price
Share Price (As of Year-End or Quarter-End) $65.00 $62.77 $60.00 $57.28 $55.00 $50.00 $45.00 $40.00 $35.43 $34.77 $35.57 $35.00 $30.14 $29.53 $30.00 $25.00 $20.00 FY 19 FY 20 FY 21 FY 22 FY 23 FY 23 Q1 vs. FY 24 Q1 36 36 36
Slide 37: FY24 Highlights & Outlook
FY24 Highlights & Outlook • Realize benefits from recently completed alternative energy investments • Increase growth of our innovative products • Pursue potential acquisitions that align with our growth strategies • Continue significant investment in infrastructure and growth opportunities 37 37
Slide 38: Manufacturing Operations: Continuing to Invest
Manufacturing Operations Continuing to Invest Aaron Christiansen Vice President of Operations 38 38
Slide 39: Capital Investment Philosophy
Capital Investment Philosophy • Intelligent and Intentional allocation of capital between growth, savings, and business continuity investments • Continually seeking and prioritizing opportunities that deliver on all three areas • Demonstrate a continued commitment to our facilities, mineral reserves
Slide 40: Capital Expenditure History
Capital Expenditure History $30 In Millions • FY23 marked the highest level of $25 $22 $24 reinvestment in $20 ODC’s history $19 $15 $15 $14 • Capital expenditures in $10 FY24 and beyond $5 will be even greater $0 FY 19 FY 20 FY 21 FY 22 FY 23 40 40
Slide 41: Alternative Energy Investments
Alternative Energy Investments • Over 3 years to execute the projects in full • Series of investments – including LED lighting and power monitoring primarily built around a combination of photovoltaic solar and natural gas-powered turbine generators • Power plant investments support ~60% of peak ins
Slide 42: Capacity Expansion - Agricultural Applications
Capacity Expansion - Agricultural Applications • Purpose: To add volume and flexibility for traditional angular Agsorb products to support crop protection products • Project: Debottleneck material sizing for premium fine granule agricultural products • Timing: Late FY24 or early FY25 42 42
Slide 43: Capacity Expansion - Fluids Purification
Capacity Expansion - Fluids Purification • Purpose: To support the rapidly growing renewable diesel market • Project: • Modernization of the fluids purification milling operation • Improved outbound rail transit capability • Address rate constrained processes to add capacity and prepare for growth •
Slide 44: Consumer Products: Driving Lightweight Litter Segment Growth
Consumer Products Driving Lightweight Litter Segment Growth Chris Lamson Group Vice President, Retail & Wholesale 44 44
Slide 45: Total Domestic Cat Litter Annual Net Sales
Total Domestic Cat Litter Fiscal Years 2019-2022 have been corrected to only reflect net sales of domestic cat litter, as they had previously included net sales of domestic & international cat litter. Annual Net Sales (millions) CAGR 10.6% (FY19 – FY23) $210 $196.4 $190 $169.3 $170 $154.2 $150 $142.
Slide 46: Domestic Lightweight Cat Litter Annual Net Sales
Domestic Lightweight Cat Litter Annual Net Sales (millions) Lightweight 17.0% CAGR vs. CAGR 17.0% (FY19 – FY23) 10.6% Total Domestic Litter Business $120 $99.9 $100 $80 $77.0 $66.2 $60 $55.8 $53.2 $40 $20 $0 FY 19 FY 20 FY 21 FY 22 FY 23 46 46
Slide 47: Gaining Share in Lightweight with Opportunity to Drive Segment Growth
Gaining Share in Lightweight with Opportunity to Drive Segment Growth $ Share FY 2021-2023 80 70 60 50 40 30 20 10 0 ODC Branded & PL LW ODC PL LW (Share of PL LW) Total LW Segment (Share of LW) FY 21 FY 22 FY23 Private Label Lightweight (“PL LW”) Source: Nielsen Scantrack Data Market: xAOC+Pet Supe
Slide 48: From Strategy to Action: Driving Lightweight Litter Segment Growth
From Strategy to Action Driving Lightweight Litter Segment Growth Launched the first & Innovate around the unique only Antibacterial properties of our lightweight clay 1 lightweight litter New integrated Lightweight at the center of marketing focused on consumer message 2 lightweight Distribution ga
Slide 49: Introducing New Cat's Pride Antibacterial Clumping Litter
49 Innovate: Introducing New Cat’s Pride Antibacterial Clumping Litter The First & Only Antibacterial Cat Litter with EPA Registration Top Scoring Concept with Consumers Heightened Sensitivity to Bacteria and Litter Box Odor Post-pandemic Kills 99.9% of Odor-Causing Bacteria Helps Keep Litter Box an
Slide 50: Unveiling Antibacterial Cat Litter With Strong Retail Acceptance
Innovate: Unveiling Antibacterial Cat Litter With Strong Retail Acceptance 50 50
Slide 51: New Integrated Marketing Focused on Lightweight and Performance
Consumer Message: New Integrated Marketing Focused on Lightweight and Performance 360° marketing drives awareness, consideration, trial, repeat and loyalty Linear TV OTT / OLV Streaming Audio Digital Social Paid Search Sampling Loyalty / CRM eComm Ads Display 51 51
Slide 52: New Integrated Marketing Focused on Lightweight and Performance
Consumer Message: New Integrated Marketing Focused on Lightweight and Performance 52 52
Slide 53: Lightweight Growth through Branded and Private Label Distribution Gains
Partner: Lightweight Growth through Branded and Private Label Distribution Gains Private Label Ecommerce Explosive New Channels of Lightweight Leadership Growth Distribution Over 50% of stores with cat Oil-Dri’s branded dollar In FY23, Oil-Dri gained new litter carry ODC’s PL LW share in FY23 more t
Slide 54: From Strategy to Action: Driving Lightweight Litter Segment Growth
From Strategy to Action Driving Lightweight Litter Segment Growth Innovate Consumer Message Partner 54 54
Slide 55: New Market Opportunity
New Market Opportunity Bruce Patsey Vice President, Fluids Purification 55 55
Slide 56: Business Focus
Business Focus Vegetable Oil Jet Fuel Biofuels 56 56
Slide 57: Fluids Purification Annual Net Sales
Fluids Purification Annual Net Sales (millions) CAGR 9.4% (FY19 – FY23) $100.0 $80.0 $77.6 $62.1 $60.0 $54.2 $52.5 $53.3 $40.0 $20.0 $0.0 FY 19 FY 20 FY 21 FY 22 FY 23 57 57
Slide 58: Renewable Diesel
Renewable Diesel What Is It? • Advanced biofuel derived from vegetable oils, natural fats and greases • ‘Cleaner’ burning fuel that emits less carbon dioxide than petroleum diesel How Is It Different From Biodiesel? • Renewable diesel is chemically the same as petroleum diesel and is fully compatibl
Slide 59: Our Unique Mineral Solutions
Our Unique Mineral Solutions: • Adsorb contaminants and protect downstream equipment and catalysts o Removal of trace metals and elements, including a full spectrum of organic and inorganic phosphorus • Optimize production efficiency, including superior filterability characteristics o Each product i
Slide 60: Annual U.S. Renewable Diesel Nameplate Production Capacity
Figure 1. Annual U.S. Renewable Diesel Nameplate Production Capacity, Actual for 2010 - 2022 and Projected for 2023 - 2025 and Later = Later m= 2025 = 2024 ™ 2023 = 2010-2022 ra s > i rT) Q a 1 2 s oO < 2 a 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Later Sources
Slide 61: Benefits of Renewable Fuels
Benefits of Renewable Fuels • Government Incentives Example: Clean Fuel Production Credit o Starting Jan. 1, 2025, approximately $1.00 tax credit per gallon for non-aviation fuel • Reduction in CO₂ Gas Up to 80% in reduced greenhouse gas emissions when used as a drop-in fuel • Repurposing of Existin
Slide 62: Looking Forward
Looking Forward • New renewable diesel plants opening globally, 2024 to 2030 • Continued growth in the vegetable oil market • Increased growth in our core market • Experienced sales team to support the industry • Improvement of manufacturing infrastructure to meet demand 62 62
Slide 63: Pathway To Success
Pathway To Success W. Wade Robey Vice President of Agriculture, Oil-Dri Corporation of America & President, Amlan International 63 63
Slide 64: Global Product Portfolio
Global Product Portfolio NORTH AMERICA INTERNATIONAL DISEASE FEED BIOTOXIN FEED ADDITIVES PREVENTION EFFICIENCY CONTROL 64 64
Slide 65: Amlan Annual Net Sales
Amlan Annual Net Sales (millions) CAGR 11.3% (FY19 – FY23) $26.0 + 17% $24.5 $24.0 $22.0 + 18% $20.9 $20.0 + 12% + 0% $18.0 $17.7 $17.8 $15.9 $16.0 $14.0 $12.0 $10.0 FY 19 FY 20 FY 21 FY 22 FY 23 Launch Jan. 2022 65 65
Slide 66: Amlan Net Sales Change By Region
Amlan Net Sales Change By Region (FY 2023 vs FY 2022) 100% 78.7% 80% 60% 40% 23.8% 20.5% 20% 2.0% 0% -20% -18.9% -40% North America Latin America Mexico China Asia 66 66
Slide 67: Increasing Consumer Demand for Clean Food
Increasing Consumer Demand for Clean Food Right Product Right Place Right Time Amlan Feed Additives Offer a Natural and Effective Solution to Help Producers Raise Healthy Animals Without Pharmaceuticals 67 67
Slide 68: Our Opportunity
Our Opportunity Global Feed Production per Species, 2022 Volume x 2017-2022 CAGR 400 BROILER • Total global feed production 350 grew 3.4% annually, dominated 300 SWINE by poultry and swine. 2022 Volume, M MT 250 • Projected to register a CAGR 200 of 2.9% between 2023-2030. 150 LAYER Highest CAGR wil
Slide 69: Toxin Control Per Species
Toxin Control Per Species Global Biotoxin Control Market per Species, Est. $1 billion in 2022, the global toxin 2022 Est. Volume, M USD control market is growing at a 5.0% CAGR 500 450 Additive use in animal feed varies among species 2022 Est. Market, M USD 400 based on specific health needs: LAYER
Slide 70: How Does it Work?
How Does it Work? We Sell Sorption Science for Animal Intestinal Health Bound Bacterial Toxin Sheet-Like Layer of Amlan’s Mineral Fungal Toxins Bound to Interlayers of Clay Mineral 70 70
Slide 71: Product Spotlight
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Slide 72: Why We Will Win
Why We Will Win 80? MINERAL SCIENCE s 2024 EXPERTISE Forbes Il AMERICA’S MOST ‘SMALL COMPANIES SELECTIVELY VERTICAL DIVERSE SOURCED RAW INTEGRATION BUSINESS MATERIAL QUALITY PORTFOLIO thee, TRACEABILITY vy y SUSTAINABILITY ¢ QMS¥@ Y Quarry, N24 Syren —S
Slide 73: Q&A
Q&A Please submit questions in the “Ask a Question” field of the webcast Stockholder questions or remarks must be relevant to the meeting and pertinent to the matters properly brought before the meeting. Please see Rules of Conduct for more information. 73 73
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