Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — ICR Conference 2019
31 slides from Prestige Consumer Healthcare's conference presentation, Jan 14, 2019
Slide 1: ICR Conference January 14th, 2019
ICR Conference January 14 th , 2019
Slide 2: Safe Harbor Disclosure
ICR Conference, January 2019 2 Safe Harbor Disclosure This presentation contains certain “forward - looking” statements within the meaning of the Private Securities Litigation Reform A ct of 1995, such as statements regarding the Company’s expected financial performance, including revenue growth, ad
Slide 3: Contents
ICR Conference, January 2019 3 Contents I. Introduction to Prestige Consumer Healthcare II. Value Creation Model III. Financial Review and Outlook Ron Lombardi Chairman & Chief Executive Officer Christine Sacco Chief Financial Officer Phil Terpolilli Director, Investor Relations Attendees
Slide 4: I. Introduction to Prestige Consumer Healthcare
I. Introduction to Prestige Consumer Healthcare
Slide 5: Evolution to a Focused Consumer Healthcare Portfolio
ICR Conference, January 2019 5 Evolution to a Focused Consumer Healthcare Portfolio FY 2011 ~$1 Billion Focused Consumer Healthcare Company* FY 2015 FY 2019 PF – 100% OTC* 30% 70% 13% 87% OTC Household 27% 16% 12% 12% 12% 11% 10% Women’s Health GI Analgesics Cough / Cold Oral Care Eye & Ear Care Der
Slide 6: ICR Conference, January 2019 6
ICR Conference, January 2019 6
Slide 7: Helping Consumers Care for Themselves
ICR Conference, January 2019 7 Source: Company records Helping Consumers Care for Themselves infections treated annually doses of pain relief per week throat drops for every cold season eye drops per year
Slide 8: Diversified Portfolio of Leading, Trusted Consumer Healthcare Brands
ICR Conference, January 2019 8 Diversified Portfolio of Leading, Trusted Consumer Healthcare Brands * FY’18 Revenues, Excludes Divested Household Cleaning Segment Note: E xcludes other OTC (less than 1%). Total Sales* by Category 27% 16% 12% 12% 12% 11% 10% Women’s Health GI Analgesics Cough / Cold
Slide 9: Business Positioned for Long-Term Success
ICR Conference, January 2019 9 $ Business Positioned for Long - Term Success History of Market Share Gains & Growth 78% (1) Solid Financial Profile Generates Durable Cash Flows OTC Attributes Structural Tailwind to Portfolio Leading Brands Across Niche Categories
Slide 10: II. Value Creation Model
ll. Value Creation Model Summers Eve Dramamine Od - Cear ED eyes, MONISTAT Gaviscor,,
Slide 11: Proven, Consistent & Repeatable Strategy
ICR Conference, January 2019 11 Industry - leading financial profile Consistent and strong FCF generation Enables capital allocation opportunities Disciplined capital allocation priorities 8+ strategic M&A transactions since CY 20 1 3 Completed $50 million stock buyback in FY19 Proven, C
Slide 12: Resilient Position in an Evolving Retail Environment
ICR Conference, January 2019 12 Resilient Position in an Evolving Retail Environment Category Leading, Trusted Brands On Trend & Innovative Retail Traffic Driver E - Commerce Brand of Choice #1 brands represent large majority of sales Leading positions enable focus on long - term category growth
Slide 13: Investment Across Key Brands Drives Organic Growth
ICR Conference, January 2019 13 Investment Across Key Brands Drives Organic Growth Long - Term 2% to 3% Sales Growth Target Long - Term Organic Growth Target (approximate): # of Brands Sales Contribution to Portfolio (Approximate %) Invest for Growth Manage for Cash Power Core Core International Oth
Slide 14: BC & Goody's: Continuing Our Long-Term Brand Building Playbook
ICR Conference, January 2019 14 BC & Goody’s: Continuing Our Long - Term Brand Building Playbook Only p owdered analgesic brands Expanded distribution Brand extensions into cough/cold with BC Sinus Launch Significant support at retail by leveraging strategic partnerships Brand Success Under
Slide 15: Brand-Building Drives Category Growth and Share Gains
ICR Conference, January 2019 15 Brand - Building Drives Category Growth and Share Gains Long - Term Brand - Building Toolkit Source: IRI MULO Data + C - Store retail dollar sales for 52 weeks ended 12/30/18 ; Categories include those pertaining to PBH’s domestic power core and core brands * Prestige
Slide 16: Proven, Consistent & Repeatable Strategy: Cash Generation
ICR Conference, January 2019 16 Near - term Considerations Long - Term Positioning T arget leverage ratio of between 3.5x to less than 5.0x High Free Cash Flow Generation o Portfolio characteristics drives high EBITDA margins o Strong FCF conversion (minimal capital outlays, low cash tax rate vi
Slide 17: Strong and Consistent Cash Flow Leads to Rapid De-Levering
ICR Conference, January 2019 17 ~5.0x ~4.3x ~4.3x ~5.2x ~5.0x ~5.7x ~5.2x ~ 4.9x FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 E Leverage Ratio (3) $67 $127 $131 $165 $185 $197 $208 $200+ FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 E Strong and Consistent Cash Flow Leads to Rapid De - Levering D
Slide 18: Disciplined Capital Allocation Enhances Shareholder Value
ICR Conference, January 2019 18 Disciplined Capital Allocation Enhances Shareholder Value Capital Deployment Share Repurchases 3 Pursue M&A that is Accretive to Shareholders 4 Continued Strategy of De - Leveraging 2 Invest in Current Brands to Drive Organic Growth 1 CY 16 CY 17 CY 18 Timeline of Rec
Slide 19: III. Financial Review and FY Outlook
III. Financial Review and FY 19 Outlook
Slide 20: Strategy Has Delivered Consistently Strong Financial Performance
ICR Conference, January 2019 20 $67 $131 $185 $208 FY 12 FY 14 FY 16 FY 18 $134 $204 $289 $355 FY 12 FY 14 FY 16 FY 18 $438 $597 $806 $1,041 FY 12 FY 14 FY 16 FY 18 Strategy Has Delivered Consistently Strong Financial Performance 15.5% CAGR 17.6% CAGR 20.8% CAGR Adjusted EBITDA (2) Net Sales $0.99 $
Slide 21: Strong Financial Performance in First Half FY
ICR Conference, January 2019 21 Strong Financial Performance in First Half FY 19 Revenue of $493.3 million , up 0.4 % (1) organically versus 1H FY 18; in - line with expectations Adjusted EPS of $1.33 (2) , up 4.7% versus 1H FY 18 Freight and warehouse costs continue to improve and have largely retu
Slide 22: 3Q Performance Affected by Inventory Reductions and Incidence Levels
ICR Conference, January 2019 22 3Q Performance Affected by Inventory Reductions and Incidence Levels Inventory Reductions and Category Growth Challenged 3Q * Includes IRI MULO Data as of trailing 12 weeks ended 12/30/18 and IRI MULO Data for 5 years ended 2018 1.7% 0.5% 3.4% 4.5% - 1.8% - 12.3% - 3.
Slide 23: Current FY Full Year Outlook
ICR Conference, January 2019 23 Current FY 19 Full Year Outlook Continue to win share versus categories and private label, grow categories with retailers PBH’s portfolio of leading brands remains positioned for long - term growth despite macro headwinds at retail Top Line Trends Adjusted Free Ca
Slide 24: Continuing Our Long-Term Value Creation Strategy
ICR Conference, January 2019 24 Continuing Our Long - Term Value Creation Strategy Strong and Consistent Free Cash Flow Generation Long - Term Topline Organic Growth of 2 .0% to 3.0% Efficient and Value - Maximizing Capital Allocation Shareholder Value Enhancement Long - Term E.P.S. Growth Upside Po
Slide 25: Appendix
ICR Conference, January 2019 25 Appendix (1) Organic Revenue Growth 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 November 1, 2018 earnings release in the “About Non - GAAP Financial Measu
Slide 26: Reconciliation Schedules (Continued)
ICR Conference, January 2019 26 Reconciliation Schedules (Continued) Projected EPS Projected Free Cash Flow 2019 Projected EPS Low High Projected FY'19 GAAP EPS $ 2.66 $ 2.69 Adjustments: Sale of Household Cleaning business (1) 0.07 0.07 Tax adjustment 0.02 0.02 Total Adjustments 0.09 0.09 Projected
Slide 27: Reconciliation Schedules
ICR Conference, January 2019 27 Reconciliation Schedules Organic Revenue Growth Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2018 2017 2018 2017 (In Thousands) GAAP Total Revenues 239,357$ 258,026$ 493,337$ 514,599$ Revenue Growth (7.2%) (4.1%) Adjustments: Revenue associated with divesti
Slide 28: Adjusted Net Income and Adjusted EPS Reconciliation Schedules (Continued)
ICR Conference, January 2019 28 Adjusted Net Income and Adjusted EPS Reconciliation Schedules (Continued) Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2018 2017 2018 2017 Net Income EPS Net Income EPS Net Income EPS Net Income EPS (In Thousands, except per share data) GAAP Net Income 30,8
Slide 29: Reconciliation Schedules (Continued)
ICR Conference, January 2019 29 Reconciliation Schedules (Continued) Dollar values in thousands. Adjusted 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
Slide 30: Reconciliation Schedules (Continued)
ICR Conference, January 2019 30 Reconciliation Schedules (Continued) Adjusted Net Income and Adjusted EPS 2012 2013 2014 2015 2016 2017 2018 Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS GAAP Net Income 37,212$ 0.73$ 65,505$ 1.27$ 72,615$ 1.
Slide 31: Reconciliation Schedules (Continued)
ICR Conference, January 2019 31 Reconciliation Schedules (Continued) Dollar values in thousands. Adjusted 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