Spectrum Brands Holdings, Inc. · NYSE:SPB

Spectrum Brands — CL King 12th Annual Best Ideas Conference 2014

61 slides from Spectrum Brands's conference presentation, Sep 9, 2014

1. Slide 1: CL King 12th Annual Best Ideas Conference

   Presentation to CL King 12th Annual Best Ideas Conference New York – September 9, 2014 Dave Prichard Vice President, Investor Relations

2. Slide 2: Forward-Looking Statements

   Forward-Looking Statements Certain matters discussed in this presentation, with the exception of historical matters, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding our

3. Slide 3: Reconciliation of Non-GAAP Financial Measurements

   Reconciliation of Non-GAAP Financial Measurements Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Excluding the impact of current exchange rate

4. Slide 4: Spectrum Brands Evolution

   Spectrum Brands Evolution Feb 2005 United May 2005 Industries Rayovac Changes Acquisition (United Pet Group Name to Dec 2012 Spectrum Brands Hardware & Home Aug 1999 and Home and Garden businesses) Improvement (HHI) Rayovac Sept 2003 Acquisition Reacquires Nov 2011 Majority of Latin America Remingto

5. Slide 5: Attractive Segment Profile and Diverse Portfolio of Unrivaled Brands

   Attractive Segment Profile and Diverse Portfolio of Unrivaled Brands Hardware & Global Batteries & Appliances Global Pet Supplies Home and Garden Home Improvement (1) FY13 Net Sales $2.20B; FY13 Net Sales $622M; FY13 Net Sales $391M; PF FY13 Net Sales $1.06B; Adj. EBITDA $304M Adj. EBITDA $120M Adj.

6. Slide 6: Spectrum Brands

   Spectrum Brands Providing Quality and Value to Retailers and Consumers Worldwide Diverse Portfolio Across Attractive Categories  FY13 net sales and adjusted EBITDA of $4,277 Home & Garden million(a) and $677 million(b), respectively Global Pet 9% Supplies 15%  Spectrum Brands Value Model drives su

7. Slide 7: Strong Financial Performance Despite a Challenged Consumer

   Strong Financial Performance Despite a Challenged Consumer  Quarter-over-quarter net sales and adjusted EBITDA Net Sales Performance growth with few exceptions since FY09 ($ in millions) $4,226 $4,277  Pet Supplies and Home and Garden led the adjusted EBITDA improvements for FY13 $3,006 $3,111 $3,

8. Slide 8: Record Performance – Q3 FY14 vs. Q3 FY13

   Record Performance – Q3 FY14 vs. Q3 FY13 Net Sales ($ in millions) Adjusted EBITDA $1,200 $1,129 $1,090 $250 $1,000 $202 $200 $189 $800 $150 $600 $495 $492 $400 $100 $307 $285 $67 $175 $157 $60 $59 $200 $152 $156 $53 $52 $50 $46 $31 $34 $0 Hardware & Home and Global Pet Global Total SPB $0 Home Gard

9. Slide 9: Spectrum Brands Vision

   Spectrum Brands Vision VISION Be the leader in retailer metrics with superior value consumer products for everyday use GOAL Create shareholder value through adjusted EBITDA and free cash flow growth and debt reduction 9

10. Slide 10: Spectrum Value Model: Same Performance, Less Price / Better Value

    Spectrum Value Model: “Same Performance, Less Price / Better Value” Market Positioning Value to Retailers Focus on #2 brands in markets Best retailer margin; with high barriers to entry category mgmt; merchandising Product Performance Point of Sale Focus Match or exceed Win at point-of-sale, competi

11. Slide 11: Leading Market Share and Competitive Brands

    Leading Market Share and Competitive Brands Category Select Key Brands Market Position #3 (North America) Consumer Batteries #2 (Europe) #1 (Latin America) Electric shaving and grooming #3 (North America, Australia, Europe) #1 (Australia) Electrical personal care products #2 (North America, Europe)

12. Slide 12: Diverse and Loyal Customer Base

    Diverse and Loyal Customer Base  Spectrum Brands’ largest customer in FY13 accounted for ~17% of sales, with the remainder of its top 10 customers accounting for ~18%  The Company maintains long-term relationships of more than 20 years with many key customers, including Walmart, Lowe’s and Boots 

13. Slide 13: Growth Strategies

    Growth Strategies Pursue Select Bolt-On Acquisitions to Further Enhance Scale Key acquisition priorities  Large and rich list of targets identified for bolt-on acquisitions  Primary focus in companion animals (e.g., FURminator® in Q1FY12) Global  Potential acquisition categories include dog and c

14. Slide 14: Successful Track Record of Acquisition Integration/Delevering

    Successful Track Record of Acquisition Integration/Delevering  Track record of using strong free cash flow generation to reduce debt  Proven integrator – successfully integrated Russell Hobbs, exceeding synergy goals, as well as more recent add-ons FURminator, Black Flag/TAT, HHI and Tong Lung  S

15. Slide 15: Robust Business with Solid Cash Flow Generation

    Robust Business with Solid Cash Flow Generation  FY13 free cash flow was a record $254 million, or about $5 per share  FY14 free cash flow expected to be at least $350 million, or nearly $7 per share  Cash taxes of $75-85 million (primarily driven by timing of payments and income tax audits from

16. Slide 16: Global Batteries & Appliances (GBA) Segment

    Global Batteries & Appliances (GBA) Segment 16

17. Slide 17: Global Batteries & Appliances Segment

    Global Batteries & Appliances Segment  Operating results driven by Spectrum Value Model Adjusted EBITDA Performance - GBA $307 $308 $304 – Same quality/performance at a lower price ($ in millions) $297 $275 – Global battery business is increasing its retailer presence/launching new products – Batte

18. Slide 18: Global Appliances Industry with a Large Footprint

    Global Appliances Industry with a Large Footprint  Stable, recession-resistant  Replacement nature/everyday use products  Strong portfolio of flagship brands  Remington, Black & Decker, George Foreman, Russell Hobbs, Farberware  Leading market positions in served categories globally  Global Ap

19. Slide 19: Hardware & Home Improvement Segment (HHI)

    Hardware & Home Improvement Segment (HHI) 19

20. Slide 20: HHI Segment Overview

    HHI Segment Overview Business Description Revenue by Segment (FY 2013)  Five consecutive quarters of YOY net sales and adjusted EBITDA Faucets increases since December 17, 2012 acquisition 19%  Integration progressed smoothly and is now complete  Additional synergy savings identified in next few

21. Slide 21: HHI Global Growth Opportunities and Expansion

    HHI Has Global Growth Opportunities and Expansion in the Residential/Light Commercial Businesses and Home Automation/Security  HHI has a diversified existing product portfolio that is complemented by outstanding new product innovation and execution  Focusing on a number of growth areas, including

22. Slide 22: HHI Game-Changing Technology

    HHI Game-Changing Technology THE KEY EVOLVED. Touch to What Makes SmartKey Open Better? Your Smartphone • Drill Resistance is Now Your Key • ANSI Grading • BumpGuard • Mobile App Convenience • Superior Pick-Resistance • Share eKeys via Smartphone Re-Key as Easy as 1-2-3 • No Smartphone? No Problem.

23. Slide 23: Global Pet Supplies Segment

    Global Pet Supplies Segment 23

24. Slide 24: Attractive Global Pet Industry

    Attractive Global Pet Industry  Global pet food/supplies industry estimated at $75 billion in 2012  Consistent annual growth of 3-5%  United Pet Group (UPG) addresses a $21 billion market segment with attractive growth characteristics, high fragmentation and low seasonality Industry Growth Market

25. Slide 25: Global Pet Supplies Segment

    Global Pet Supplies Segment Sole Player with Global Platform and Presence  Another record year in FY13 Adjusted EBITDA Performance  Attractive industry trends (e.g., increasing pet ownership/ ($ in millions) spending per pet, low seasonality) $120 $113  Global market leader in aquatics category w

26. Slide 26: Home and Garden Segment (United Industries)

    Home and Garden Segment (United Industries) Industry-Leading Value Brands 26

27. Slide 27: Strong #2 Share in the Industry

    Strong #2 Share in the Industry U.S. Retail Home and Garden Pest Control Market $3 Billion Retail Category (2013 Estimate) Vendor Market Share Estimate United Industries Share Controls 19% $1,489M UI Share All Other United 23% Industries 23% Household 32% $757M UI Share Bayer 5% Repellents 28% Centr

28. Slide 28: Home and Garden Segment

    Home and Garden Segment Delivering Robust Growth Adjusted EBITDA Performance(a)  Another record year in FY13 ($ in millions)  Completed accretive Liquid Fence bolt-on $90 $87 acquisition in Q1FY14  Strong financial results $78  Highest margin Spectrum Brands division $68  Low CapEx requirements

29. Slide 29: Spectrum Brands

    Spectrum Brands REMINGTON J & Russell Hobbs Qos oonne united Fore S nent MVARTA PUG INDUSTRIES spectracide "PFO REPEL Kwikset ay60e Tnstant (Ocean Ea GREE PROSENSE MM? BALDWIN GES) WET2.... PfisteR EZSET LirreRMAD Je 8) JF PROUNE Breadman Sy Soom FORTIS @ Toastmaster FARBERWARE §=[ZUUN9 Juiceman (Ge

30. Slide 30: Fiscal 2014 Outlook

    Fiscal 2014 Outlook  Spectrum Brands expects to post a 5th consecutive year of record performance, with solid momentum from a record nine months  Net sales, as reported, expected to increase at approximately the rate of U.S. GDP growth compared to FY13 net sales, including HHI last year on a pro f

31. Slide 31: Quarterly Dividend Started in 2013, Increased 20% in 2014

    Quarterly Dividend Started in 2013, Increased 20% in 2014  Four quarterly common stock dividends of $0.25 per share paid in March, June, September and December of 2013  Dividend increased by 20% to $0.30 per share from $0.25, effective with quarterly payment in March 2014  Higher rate reaffirms t

32. Slide 32: NYSE: SPB

    NYSE: SPB www.spectrumbrands.com investorrelations@spectrumbrands.com david.prichard@spectrumbrands.com

33. Slide 33: Appendix

    Spectrum Brands wited HVARTA utes Appendix QRer per mornne Hardware & Home Improvement EEE LP ARES SY Bias IEDR io 1 ili MEAUVLIOF _

34. Slide 34: Experienced and Proven Management Team

    Experienced and Proven Management Team Name / Position Years with Company Background  Elected Chief Executive Officer in April 2010 David R. Lumley  Served as Co-COO and President, Global Batteries, Personal Care and Home and Garden segments since 8 January 2007 Chief Executive Officer & President

35. Slide 35: HHI Group Formation

    HHI Group Formation Tong Lung 2005 Stanley National Hardware group 2000 formed under Stanley’s Mechanical HHI Group is formed Access Solutions under SBD’s Stanley 2010 2012 Division Security Solutions Division and adds Stanley National Hardware to its Portfolio 1989 2003 Hardware & Home Improvement

36. Slide 36: HHI Group Overview

    HHI Group Overview Est. 1910 Est. Est.1946 1946 Est. Est.1904 1904 Est. Est.1946 1946 Est. Est.1843 1843 Est. 1901 Est. 1901 Est. 1947 Est. 1947 Est. Est.1910 1910 Est. 194 Revenue by Segment (LTM 6/30) Financial Highlights (LTM 6/30) Revenue by Geography (LTM 6/30) Tong Lung RoW 5% 7% Residential L

37. Slide 37: Recognized and Established Brands

    Recognized and Established Brands Residential Locksets Builders’ Hardware Plumbing Brand Established 1946 1904 1946 1843 / 1901 1947 1910 #1 in U.S. #4 U.S. in Faucets #1 in U.S. #1 in Canada #1 in U.S. Luxury #2 in Mexico Market Position Builders’ (#3 in U.S. Retail Locksets Locksets Locksets Hardw

38. Slide 38: Leading Market Position

    Leading Market Position HHI Market Shares  Largest tubular lock manufacturer globally U.S. Residential Lockset Market Canada Residential Lockset Market  #1 U.S. lockset  #1 Canadian lockset HHI HHI Other Other 45% 46% 54% 55%  #1 U.S. luxury hardware  #1 U.S. builders’ hardware U.S. Builders Ha

39. Slide 39: Strong Distribution and Channel Penetration

    Strong Distribution and Channel Penetration Brands  Large installed base Est. 1910 Est. 1946 Est. 1904 Est. 1946 Est. 1843 Est. 1901 Est. 1947 Est. 1910 Est. 1946 Est. 1904 Est. 1946  Strong builder relations Home Centers Builders, Co-Op and 2-Step Distributors, Showrooms  Strong big box retail p

40. Slide 40: HHI Enjoys Strong Customer Relationships

    HHI Enjoys Strong Customer Relationships Dedicated national sales force with robust customer relationships across all distribution channels Customer Description of Relationship Value Proposition  Won Home Depot Vendor of the Year in 2011  Install base  Supply chain and fill rate management  Bran

41. Slide 41: Evolution of Global Batteries

    Evolution of Global Batteries French Battery Company Formed in Rayovac Madison WI Acquires Later Renamed VARTA Rayovac 1906 1999 2002 2004 Rayovac Rayovac Reacquires Reacquires Brand in Brazil Majority of Brand in Latin America 41

42. Slide 42: Batteries is an Attractive Segment for SPB

    Batteries is an Attractive Segment for SPB Given Market Share Gains & Estimated Organic Growth (Alkaline at 3.5% per Year) Global Battery Market: Revenue by Battery Type (World), 2010-2016 10000 9000 8000 Revenues ($ Million) 7000 6000 Primary Lithium 5000 Alkaline 4000 Carbon Zinc 3000 2000 1000 0

43. Slide 43: Evolution of Global Appliances

    Evolution of Global Appliances Russell Hobbs merges with Spectrum Harbinger Applica acquires Brands completes Applica/Salton Black & Decker acquisition of renamed Russell Household Applica Hobbs Products Group 1998 2003 2006 2007 2009 2010 2011 Spectrum Brands Acquires acquires Farberware Remington

44. Slide 44: Global Appliances – Diversified Product Line-up

    Global Appliances – Diversified Product Line-up Kitchen Products Home Products Personal Care Representative Brands  Kettles  Deep fryers  Hand-held irons  Straighteners, stylers, curling irons  Storage and  Food choppers  Vacuum cleaners organization  Men’s and women’s  Food  Air purifiers

45. Slide 45: UPG Historical Review: Acquisitions and Integration

    UPG Historical Review: Acquisitions and Integration  United Pet Group (UPG) was formed in 1998 by TA Associates and between 1999-2006 successfully executed an acquisition/integration strategy within the U.S. pet supplies industry  Acquired by Spectrum in 2005 with subsequent acquisitions of Tetra

46. Slide 46: UPG: An Impressive Portfolio of Leading Brands

    UPG: An Impressive Portfolio of Leading Brands Companion Aquatics Animal Product Product Brand Categories Brand Categories 7 2 5 7 3 3 2 4 2 1 3 3 46

47. Slide 47: Acquisition: UPG is the Only Global Platform in the Industry

    Acquisition: UPG is the Only Global Platform in the Industry  Dedicated sales, marketing and operations teams in 3 primary geographies: North America, Europe, Pacific Rim • Represents 90% of the total pet supply market  Competitors lack similar infrastructure  Ideal to execute a global roll-up st

48. Slide 48: Long-Standing Global Customer Relationships

    Long-Standing Global Customer Relationships Length of Category Manager/ Retailer Relationship Advisor Roles Aquatics 20 Years Small Animal / Domestic Bird Dog Containment Aquatics > 15 Years Dog & Cat Health and Beauty Aids Rawhide Stain & Odor Control Products Aquatics > 15 Years Dog & Cat Health a

49. Slide 49: Highly Recognized and Respected Value Brands

    Highly Recognized and Respected Value Brands  Weed & Grass Killers Controls  Outdoor Insect Control  Ant, Roach and Wasp Killers Household  Indoor Insect Control  Personal and Area Mosquito Repellents Repellents  Yard Treatment Products Rodenticide  Mouse / Rat Baits and Traps & Other  Plant

50. Slide 50: Highlights of Pet and Home and Garden Acquisitions in Late 2011

    Highlights of Pet and Home and Garden Acquisitions in Late 2011 Black Flag/TAT Brands Acquisition – November 2011 FURminator Acquisition – December 2011  Black Flag/TAT produces and distributes a line of insecticide  FURminator is a leading global provider of branded, products, including liquids,

51. Slide 51: Liquid Fence Accretive, Tuck-in Acquisition

    Liquid Fence Accretive, Tuck-in Acquisition  Liquid Fence is the U.S. leader in the fast-growing consumer animal repellents market  Broad and expanding product line, proprietary formulations and solid retailer relationships  Flagship product, Liquid Fence Deer & Rabbit Repellent, is the number-on

52. Slide 52: Financial Snapshot

    Financial Snapshot Pro forma net sales Adjusted EBITDA ($ in millions) ($ in millions) $668 $677 $4,226 $4,277 $432 $457 15.8% 15.8% $3,111 $3,187 $3,006 $391 $297 14.3% $2,427 $272 13.9% $2,333 13.0% 11.7% 12.2% (a) (a) (b) (b) (a) (a) (b) (b) FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'07 FY'08 F

53. Slide 53: Reconciliation of Adjusted EBITDA

    Reconciliation of Adjusted EBITDA 9/30 FY2008 9/30 FY2009 9/30 FY2010 9/30 FY2011 9/30 FY2012 PF9/30 FY2012 PF9/30 FY2013 Net income ($932) $943 ($190) ($75) $49 $49 ($55) Income tax expense (10) 74 63 92 60 60 27 Interest expense 229 190 277 208 192 192 376 Depreciation and amortization 85 67 118 1

54. Slide 54: Reconciliation of Adjusted EBITDA by Segment

    Reconciliation of Adjusted EBITDA by Segment FY 2013 Global Home & Hardware & Corporate / Batteries & Global Pet Garden Home Unallocated Consolidated ($ in millions) Appliances Supplies Business Improvement Items¹ Spectrum Net (Loss) Income, as adjusted $ 214 $ 77 $ 78 $ 75 $ (499) $ (55) Interest e

55. Slide 55: Condensed Consolidated Statements of Operations

    Table 1 SPECTRUM BRANDS HOLDINGS, INC. Condensed Consolidated Statements of Operations For the three and twelve months ended September 30, 2013 and September 30, 2012 (Unaudited) ($ in millions, except per share amounts) THREE MONTHS TWELVE MONTHS F2013 F2012 % INC F2013 F2012 % INC Net sales $ 1,13

56. Slide 56: Supplemental Financial Data

    Table 2 SPECTRUM BRANDS HOLDINGS, INC. Supplemental Financial Data As of and for the three and twelve months ended September 30, 2013 and September 30, 2012 (Unaudited) ($ in millions) Supplemental Financial Data F2013 F2012 Cash and cash equivalents $ 207.3 $ 158.0 Trade receivables, net $ 481.3 $

57. Slide 57: Reconciliation of GAAP Diluted EPS to Adjusted Diluted EPS

    Tabl e 3 S PECTRUM BRANDS HO LDINGS , INC. Re conci l i ati on of GAAP Di l ute d Income (Loss) Pe r S hare to Adjuste d Di l ute d Income Pe r S hare For the thre e and twe l ve months e nde d S e pte mbe r 30, 2013 and S e pte mbe r 30, 2012 (Unaudit ed) T HREE M ONT HS T WELVE M ONT HS F2013 F201

58. Slide 58: Reconciliation of GAAP Net Income to Adjusted EBITDA (Q4 2013)

    Table 4 SPECTRUM BRANDS HOLDINGS, INC. Reconciliation of GAAP Net Income (Los s ) to Adjus ted EBITDA For the three months ended September 30, 2013 (Unaudited) ($ in millions ) Cons olidated Global Batteries & Global Pet Home & Garden Hardware & Home Corporate / Spectrum Brands Appliances Supplies B

59. Slide 59: Reconciliation of GAAP Net Income to Adjusted EBITDA (Q4 2012)

    Table 4 SPECTRUM BRANDS HOLDINGS, INC. Reconciliation of GAAP Net Income (Los s ) to Adjus ted EBITDA For the three months ended September 30, 2012 (Unaudited) ($ in millions ) Cons olidated Global Batteries & Home & Garden Hardware & Home Corporate / Spectrum Brands Appliances Global Pet Supplies B

60. Slide 60: Pro Forma Net Sales Comparison

    Table 5 SPECTRUM BRANDS HOLDINGS, INC. Pro Forma Net Sales Comparison For the three and twelve months ended September 30, 2013 and September 30, 2012 (Unaudited) (In millions) THREE MONTHS TWELVE MONTHS F2013 F2012 F2013 F2012 % INC % INC Spectrum Brands Holdings, Inc. Net sales - as reported $ 1,13

61. Slide 61: Reconciliation of Forecasted Cash Flow to Free Cash Flow

    Table 7 SPECTRUM BRANDS HOLDINGS, INC. Reconciliation of Forecasted Cash Flow from Operating Activities to Forecasted Free Cash Flow For the year ended September 30, 2014 (Unaudited) ($ in millions) Forecasted range: Net Cash provided from Operating Activities $ 420 - 425 Purchases of property, plan

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