Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Raymond James Institutional Investors Conference 2019
31 slides from Prestige Consumer Healthcare's conference presentation, Mar 4, 2019
Slide 1: Raymond James Institutional Investors Conference
Raymond James Institutional Investors Conference March 4, 2019
Slide 2: Forward-looking statements
This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding the Company’s expected financial performance, including revenue growth, organic growth, adjusted EPS, and adjusted free cash flow;
Slide 3: Contents and Attendees
Contents Attendees Ron Lombardi |. Introduction to Prestige Consumer Healthcare a icrccecutive officer Il. Value Creation Model Christine Sacco . . . Chief Financial Officer Ill. Financial Review and Outlook Phil Terpolilti Director, Investor Relations ees Raymond James Inuestors Conference 2019 3
Slide 4: I. Introduction to Prestige Consumer Healthcare
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Slide 5: ~$1 Billion Focused Consumer Healthcare Company
FY 2011 FY 2015 FY 2019 PF – 100% OTC* OTC Household Dermatologicals Women’s 10% Health Eye & Ear Care 27% 11% Oral 12% Care 16% 12% GI Cough / 12% Cold Analgesics ~$1 Billion Focused Consumer Healthcare Company* *Based on FY18 reported revenue figures excluding the Household Cleaning Segment
Slide 6: Prestige Consumer Healthcare
aa Prestige Consumer HEALTHCARE
Slide 7: Helping Consumers Care for Themselves
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Slide 8: Total Sales by Category; #1 Brands Represent Two-Thirds of Total Sales
Total Sales* by Category #1 Brands Represent Two-Thirds of Total Sales* Dermatologicals 10% Women’s Eye & Health Ear Care 27% 11% Oral 12% Care 16% 12% GI Cough / 12% Cold Analgesics * FY’18 Revenues, Excludes Divested Household Cleaning Segment Note: Excludes other OTC (less than 1%).
Slide 9: Business Positioned for Long-Term Success
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Slide 10: II. Value Creation Model
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Slide 11: Value Creation Model: Cash Generation and Capital Allocation
Positioned for long-term 2% to 3% Organic growth Brand building to drive long-term success Industry-leading financial profile Cash Generation Consistent and strong FCF generation Enables capital allocation opportunities Disciplined capital allocation priorities Capital Allocation Options
Slide 12: Category Leading, Trusted Brands
Category Leading, Trusted Brands Retail Traffic Driver #1 brands represent large Need-based products sought by majority of sales consumers Leading positions enable Retail channel agnostic focus on long-term Category growth focus helps buyers category growth On Trend & Innovative E-Commerce
Slide 13: Power Core, Core, International and Other OTC Brands
Power Core Core International Other OTC 10% 50% 10% Sales Contribution to Portfolio (Approximate %) 30% # of Brands Representative Brands Long-Term Organic Growth Target (approximate):
Slide 14: BC and Goody's brand growth
Purchased two iconic brands Continued Innovation to Grow the Brand and the Category in 2012 100+ year heritage in Southeast Expanded brand building investments Only powdered analgesic brands Expanded distribution Brand extensions into cough/cold with BC Sinus Launch, BC/Goody’s flavored
Slide 15: Wart Removers: Innovation and Long-Term Growth
Innovative and Superior Product Exceptional Long-Term Growth Innovation and incremental 3-Yr Consumption CAGR SKUs have driven superior +500 performance 4.2% bps – New Nitrofreeze product is one of the most effective OTC products on the market (0.8%) – Launched Kids SKU in March 2018 Have expand
Slide 16: Long-Term Brand-Building Toolkit
Long-Term Brand-Building Toolkit Growing the Category and Outpacing Private Label 2018 Performance Consumption Growth Leverage portfolio’s long-standing brand heritage with focused digital and content marketing 1.8% Develop consumer insights to refine brand-building efforts 1.1% Focus new prod
Slide 17: Cash Generation and Leverage
Industry-leading financial profile Cash Generation Consistent and strong FCF generation Enables capital allocation opportunities Near-term Considerations Long-Term Positioning Net Debt(2) at December 31 of ~$1.8 billion; leverage ratio Target leverage ratio of between 3.5x to less than 5.0
Slide 18: Free Cash Flow and Leverage History
$197 $208 $200+ $165 $185 $127 $131 $67 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 E ~5.0x ~5.2x ~5.0x ~5.7x ~5.2x ~4.3x ~4.3x ~5.0x FY 12 FY 13 FY 14 FY 15* FY 16 FY 17 FY 18 FY19 E Dollar values in millions. * Peak leverage of 5.75x at close of the Insight Acquisition in September 2014
Slide 19: Capital Deployment
Capital Deployment Acquisition of DenTek brand for $220 million CY 16 Divestiture of 7 non-core brands for $110 million gross proceeds CY 17 Acquisition of C.B. Fleet portfolio for $825 million Opportunistic $50 million share repurchase CY 18 Divestiture of Household segment enabled $50 mi
Slide 20: III. Financial Review and FY Outlook
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Slide 21: Revenue, EBITDA, Free Cash Flow and Adjusted EPS CAGR
15.5% CAGR 17.6% CAGR $1,041 $355 $806 $289 $597 $204 $438 $134 FY 12 FY 14 FY 16 FY 18 FY 12 FY 14 FY 16 FY 18 20.8% CAGR 17.3% CAGR $2.58 $185 $208 $2.17 $131 $1.53 $67 $0.99 FY 12 FY 14 FY 16 FY 18 FY 12 FY 14 FY 16 FY 18 Dollar values in millions, except Adjusted EPS.
Slide 22: Strong Financial Performance in YTD FY
Strong Financial Performance in YTD 93 FY 19 Revenue of $734.8 million, (0.8%) us prior year on an organic basis Solid consumption growth of 1.8%!) outpaced both category and private label growth Adjusted Gross Margin of 56.8%"), up 90 bps us YTD 93 FY 18; freight and warehouse expenses have returne
Slide 23: Fiscal 2019 Outlook
Solid consumption performance across our portfolio; continue to win share versus categories and private label Continue to gain market share with consumers and grow categories with retailers Prestige’s portfolio of leading brands well positioned for long-term growth despite macro headwinds at c
Slide 24: Continuing Our Long-Term Value Creation Strategy
Continuing Our Long-Term Value Creation Strategy Upside Potential SS Shareholder Value Enhancement Raymond James Inuestors Conference 2019 ae Long-Term E.P.S. Growth
Slide 25: Non-GAAP footnotes
(1) Organic Revenue is a Non-GAAP financial measures and is reconciled to the most closely related GAAP financial measure in the attached Reconciliation Schedules and / or our February 7, 2019 earnings release in the “About Non- GAAP Financial Measures” section. (2) Adjusted EBITDA, Adjusted EPS, Ad
Slide 26: Projected FY'19 GAAP EPS and Free Cash Flow Reconciliation
2019 Projected Free Cash Flow 2019 Projected EPS Low High (In millions) Projected FY'19 GAAP EPS $ 2.66 $ 2.69 Projected FY'19 GAAP Net Cash provided by operating activities $ 189 Adjustments: Additions to property and equipment for cash (13) Sale of Household Cleaning Business 0.07 0.07 Projected N
Slide 27: GAAP Total Revenues to Organic Revenues
Three Months Ended Dec. 31, Nine Months Ended Dec. 31, 2018 2017 2018 2017 (In Thousands) GAAP Total Revenues $ 241,414 $ 270,615 $ 734,751 $ 785,214 Revenue Growth (10.8%) (6.4%) Adjustments: Revenue associated with divestiture - (19,203) (19,811) (60,830) Allocated costs that remain after divestit
Slide 28: GAAP Net Income to Adjusted EPS
Three Months Ended Dec. 31, Nine Months Ended Dec. 31, 2018 2017 2018 2017 Net Net Net Income EPS Income EPS Net Income EPS Income EPS (In Thousands, except per share data) GAAP Net Income $ 38,167 $ 0.73 $ 314,793 $ 5.88 $ 103,474 $ 1.97 $ 379,257 $ 7.08 Adjustments: Integration, transition and oth
Slide 29: GAAP Net Income to Free Cash Flow
2012 2013 2014 2015 2016 2017 2018 GAAP Net Income $ 37,212 $ 65,505 $ 72,615 $ 78,260 $ 99,907 $ 69,395 $ 339,570 Adjustments Adjustments to reconcile net income to net cash provided by operating activities as shown in the statement of cash flows 35,674 59,497 52,562 65,998 98,181 92,613 (113,698)
Slide 30: Net Income and EPS Reconciliation
2012 2013 2014 2015 2016 2017 2018 Net Net Net Net Net Net Net Income EPS Income EPS Income EPS Income EPS Income EPS Income EPS Income EPS GAAP Net Income $ 37,212 $0.73 $ 65,505 $ 1.27 $ 72,615 $ 1.39 $ 78,260 $ 1.49 $ 99,907 $ 1.88 $ 69,395 $ 1.30 $ 339,570 $ 6.34 Adjustments Additional expense a
Slide 31: GAAP Net Income to Non-GAAP EBITDA
2012 2013 2014 2015 2016 2017 2018 GAAP Net Income (Loss) $ 37,212 $ 65,505 $ 72,615 $ 78,260 $ 99,907 $ 69,395 $ 339,570 Interest Expense, net 41,320 84,407 68,582 81,234 85,160 93,343 105,879 Provision (benefit) for income taxes 23,945 40,529 29,133 49,198 57,278 41,455 (232,484) Depreciation and
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