Masco Corporation · NYSE:MAS
Masco — J.P. Morgan 14th Annual Homebuilding and Building Products Conference 2021
18 slides from Masco's conference presentation, May 20, 2021
Slide 1: J.P. Morgan 2021 Homebuilding Products Conference
J.P. Morgan 2021 Homebuilding Products Conference John Sznewajs, Chief Financial Officer May 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “outlook,” “believe,”
Slide 3: Repair and Remodel Focused Portfolio
Repair and Remodel Focused Portfolio Low ticket and less cyclical, leading brands and innovation, leveraging customer and channel relationships Plumbing Products Decorative Architectural Products • Broad product range with design and innovation leadership • Comprehensive product and service offering
Slide 4: Financial Performance
Financial Performance Delivering consistent top line, income, and EPS growth Revenue ($B) Operating Profit1 ($B) EPS1 ($) $7.2 $1.3 $3.12 $5.8 $1.0 $1.30 2016 2020 2016 2020 2016 2020 1. Reflects operating profit and EPS, as adjusted. Amounts exclude discontinued operations for all periods presented
Slide 5: Market Leading Brands
Market Leading Brands High share position in many categories ® 5
Slide 6: Innovation Leadership
Innovation Leadership Delta® Delta® Hansgrohe® Glass Rinser VoiceIQ™ Technology Rainfinity™ Technology ~30% of revenues from products introduced in last 3 years1 Liberty Adjusta-Pull™ Behr Marquee® Behr® Spray Paint Cabinet Hardware Coating with Simple Pour Lid Fuels future growth and customer advoc
Slide 7: Broad Distribution
Broad Distribution Diversified geographies, products, channels Good Better Best Repair & Specialty dealers/ remodel North America 89% 81% Other New 5% Retail END construction 50% GEOGRAPHIES1 International CHANNELS1 MARKETS1 11% 19% E-commerce 9% Wholesale/trade 36% 1. Segmentation figures based on
Slide 8: Fundamentals of Repair and Remodel Market
Fundamentals of Repair and Remodel Market Market growth approximately 1-2% above GDP on average HOME PRICE AGE OF U.S. HOUSEHOLD HOUSING CONSUMER APPRECIATION HOUSING STOCK FORMATION TURNOVER CONFIDENCE 8
Slide 9: Full Year 2021 Outlook
Full Year 2021 Outlook 2021 Adjusted EPS $3.50 – $3.70 2021 Forecasted 2021 Forecasted Adjusted Business Segment Sales Growth Operating Profit Margin Organic: ~10-13% Acquisition1: ~3% Plumbing Products ~18.0% FX: ~2% TOTAL: ~15-18% Organic: ~3-7% Decorative Acquisition: ~1.5% ~19.0% Architectural P
Slide 10: Capital Allocation Strategy
Capital Allocation Strategy Balanced Approach to Continue to Drive Shareholder Value Reinvest in the • Capex: 2-2.25% of sales 1 Business • Working capital: ~16.0% of sales Maintain 2 investment grade credit rating • Gross debt to EBITDA below 2.5x Maintain relevant • Board intends to increase annua
Slide 11: Long-Term Outlook
Low ticket, repair and remodel products provide growth and stability LONG-TERM OUTLOOK through an economic cycle Average annual sales growth • Organic: ~3-5% • Acquisition: ~1-3% Market leading brands, Operating margin history of innovation, customer focus • Expand margins through cost productivity
Slide 12: Q&A
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Slide 13: Appendix
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Slide 14: 2020 Segment Mix
2020 Segment Mix* Business 2020 Revenue R&R% vs. NC NA% v. Int’l Total Geographic Revenue Split Segment Plumbing $4.1B 83% 67% Products Decorative Europe Architectural $3.1B 96% 100% North 12% Products America 81% Other 2% Total Company $7.2B 89% 81% China United 3% Kingdom R&R = % of sales to repai
Slide 15: 2020 Channel Mix
2020 Channel Mix* 2020 Channel Mix as a Percentage of Sales Decorative Architectural Total Channel Plumbing Products Products Masco Retail 24% 85% 50% Wholesale/trade 56% 11% 36% E-commerce 12% 4% 9% Specialty dealers/other 8% 0% 5% *Based on Company estimates 15
Slide 16: Profit Reconciliation – Full Year
Profit Reconciliation – Full Year ($ in Millions) 2020 2016 Net sales $ 7,188 $ 5,754 Operating profit, as reported $ 1,295 $ 986 Rationalization charges 11 14 Operating profit, as adjusted $ 1,306 $ 1,000 Operating margin, as reported 18.0% 17.1% 16
Slide 17: EPS Reconciliation – Full Year
EPS Reconciliation – Full Year (in Millions, Except per Common Share Data) 2020 2016 Income from continuing operations before income taxes, as reported $ 1,131 $ 729 Rationalization charges 11 14 Loss from other investments - 3 Pension costs associated with expected terminated plans 23 - Income rela
Slide 18: EPS Outlook Reconciliation
EPS Outlook Reconciliation 2021 Low End High End Income from continuing operations per common share $ 1.52 $ 1.72 Rationalization charges 0.01 0.01 Pension costs associated with expected terminated plans (1) 1.42 1.42 Loss on extinguishment of debt 0.52 0.52 Allocation to participating securities pe
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