Prestige Consumer Healthcare Inc. · NYSE:PBH

Prestige Consumer Healthcare — Prestige Brands Holdings — Q4 FY2014 Earnings Presentation

34 slides from Prestige Consumer Healthcare's earnings presentation, May 15, 2014

  1. Slide 1: Review of Fourth Quarter & F'14 Results

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 Review of Fourth Quarter & F’14 Results Matt Mannelly, CEO & President Ron Lombardi, CFO May 15, 2014 Exhibit 99.2

  2. Slide 2: Safe Harbor Disclosure

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s growth strategies, competitive position,

  3. Slide 3: FY2014: Delivering Against the Drivers of Our Long-Term Value-Creation Strategy

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 3 FY2014: Delivering Against the Drivers of Our Stated Long-Term Value-Creation Strategy Core OTC Growth Exceeding Industry Average High Free Cash Flow Generation Proven and Repeatable M&A Strategy Adjusted E.P.S of $1.53(

  4. Slide 4: Agenda for Today's Discussion

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 4 Agenda for Today’s Discussion I. Perspective on the OTC Environment II. Brand Building In Action III. Performance Highlights and Financial Overview IV. Outlook and Road Ahead: FY2015

  5. Slide 5: I. Perspective on the OTC Environment

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 5 I. Perspective on the OTC Environment

  6. Slide 6: OTC Becoming Increasingly Attractive to Key Consumer Health Players

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 6 OTC Becoming Increasingly Attractive to Key Consumer Health Players… Global OTC / Consumer Health Industry

  7. Slide 7: Resulting in an Accelerated Pace of OTC M&A Activity

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 7 …Resulting in an Accelerated Pace of OTC M&A Activity…  Leading global franchise ($100MM+ brand scale)  Highly complementary to existing franchise  Unique JV structure in combination with Rx asset swap  Formation of

  8. Slide 8: Prestige Positioning Itself for Future Success

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 8 …With Prestige Positioning Itself for Future Success Dollar values in billions Source: Euromonitor (~$26BN North American OTC Retail Sales; 2013) Note: Adjusted for announced and pending M&A. $3.1 $2.7 $1.7 $1.6 $1.4 $1.

  9. Slide 9: Prestige Continues to be an Aggressive and Disciplined Acquirer

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 9 Prestige Continues to be an Aggressive and Disciplined Acquirer Key Brands # of Key Brands: 3 1 5 1 1 3 Source: Private Equity Large U.S. Pharma Large U.K. Pharma Private Private Private Equity Type of Transaction: Going

  10. Slide 10: Perspectives on the OTC Marketplace Going Forward

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 0 Perspectives on the OTC Marketplace Going Forward  OTC market continues to attract interest from pharma companies and large CPG companies alike  Appeal of OTC assets resides, among others, in predictable growth and h

  11. Slide 11: II. Brand Building In Action

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 1 II. Brand Building In Action

  12. Slide 12: FY2014: Continued Emphasis on Brand Building in a Transitional Year

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 2 FY2014: Continued Emphasis on Brand Building in a Transitional Year Brand Building Transitional Year Factors Retailer Dynamics 1 Competitive Product Returns 2 3 Cough/Cold Dynamics 3% 27% 32% 38% Retailer Dynamics Comp

  13. Slide 13: Marketing Initiatives Designed to Boost Consumption and Share Gains

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 3 Marketing Initiatives Designed to Boost Consumption and Share Gains Impactful TV Advertising Strong Digital Presence Eye Catching Display Units  Entering allergy season with a focus on Clear Eyes Complete  Steady tra

  14. Slide 14: Reinforced Position as #1 OTC in Redness Treatment

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 4 Reinforced Position as #1 OTC in Redness Treatment Market Position Consumption Growth Market Share Gains #1 ~40% Market Share 5.7% 4.0% Q4 FY2014 1.7% 0.7% Q4 FY2014 Source: IRI multi-outlet + convenience retail sales

  15. Slide 15: Innovation Drives Brand Growth in Motion Sickness

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 5 Innovation Drives Brand Growth in Motion Sickness Mass Trial Travel Section Drug Zero in on motion sickness sufferers who treat with the wrong product Secondary Placement Innovation Digital Hyper-Targeting Retail Execu

  16. Slide 16: Dramamine: Full Speed Ahead in a Challenging Year

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 6 Dramamine: Full Speed Ahead in a Challenging Year  Latest 52 weeks share gain of +1.5 points  3 Year Consumption CAGR of +8.3% Source: IRI multi-outlet retail dollar sales growth as of March 23, 2014. Note: Data refl

  17. Slide 17: Progress Toward Another $100MM Platform

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 7 Progress Toward Another $100MM Platform Net Revenue Growth +16% in Two Years Distribution / Consumption Promotions / Social Media  Goody’s Headache Relief Shot  BC Cherry new product  Goody’s Headache Relief Shot 50

  18. Slide 18: Australian Brand Focus: Fess Saline Sprays from Care Pharma

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 8 Australian Brand Focus: Fess® Saline Sprays from Care Pharma  leads the nasal saline spray category in Australia with a portfolio of nasal sprays and washes to relieve congestion and help clean and clear blocked noses

  19. Slide 19: Leading Category Position Supported by Innovation and Increased Brand Investment

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 1 9 Leading Category Position Supported by Innovation and Increased Brand Investment Note: Data reflects retail MAT dollar sales as of March. Source: IMS Australian Proprietary Index Data MAT MAR 2014. 9% 2% 6% 13% 3-Yr CA

  20. Slide 20: Transitional Factors That Impacted 2H Performance Expected to Moderate

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 0 Transitional Factors That Impacted 2H Performance Expected to Moderate Over Medium/Long-Term 2012-2013 Season 2013-2014 Season YTD Cough/Cold Season: (15%) Competitive Product Returns 2  Impact of recalled pediatric p

  21. Slide 21: III. Performance Highlights and Financial Overview

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 1 III. Performance Highlights and Financial Overview

  22. Slide 22: Summary Q4 Financial Performance

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 2 $154.5 $53.5 $35.4 $144.3 $48.7 $34.5 Net Revenue Adjusted EBITDA Adjusted EPS Summary Q4 Financial Performance Dollar values in millions, except per share data Notes: (1) These non-GAAP financial measures are reconcil

  23. Slide 23: Q4 FY'14 Financial Results

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 3 Q4 FY'14 Q4 FY'13 % Chg Net Revenue 144.3$ 154.5$ (6.6%) Adj. Gross Margin(1) 80.0 88.1 (9.1%) % Margin 55.5% 57.0% A&P 18.7 23.3 (19.5%) % Net Revenue 13.0% 15.1% Adj. G&A(1) 12.6 11.4 11.4% % Net Revenue 8.8% 7.3% Ad

  24. Slide 24: FY'14 Consolidated Financial Summary

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 4  Adjusted Net Revenue declined 3.5% over the prior year largely due to the impact of retailer inventory adjustments, competitive product returns and lower cough/cold season dynamics  Adjusted Gross Margin was consist

  25. Slide 25: Net Income and E.P.S. Reconciliation

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 5 3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended Q4 FY'14 Q4 FY'13 Q4 FY'14 Q4 FY'13 Net Income EPS Net Income EPS Net Income EPS Net Income EPS As Reported 16.0$ 0.30$ 19.3$ 0.37$ 72.6$ 1.39$ 65.5$ 1.27$

  26. Slide 26: Strong Free Cash Flow

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 6 Q4 FY'14 Q4 FY'13 FY'14 FY'13 Net Income - As Reported 16.0$ 19.3$ 72.6$ 65.5$ Depreciation & Amortization 3.3 3.3 13.5 13.2 Other Non-Cash Operating Items 12.0 14.2 37.4 46.3 Working Capital (0.6) (0.1) (11.9) 12.6 Pr

  27. Slide 27: Leading Free Cash Flow Conversion With Attractive Yields

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 7 Prestige Continues to Have Leading Free Cash Flow Conversion With Attractive Yields 161% 157% 144% 133% 132% 120% 115% 110% 100% 98% 89% 88% 81% Median: 115% Source: Company filings and Capital IQ Notes: For the latest

  28. Slide 28: Prestige's Proven Track Record of Growth

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 8 $0.67 $0.99 $1.53 FY10A FY12A FY14A Prestige’s Proven Track Record of Growth $88 $135 $204 $293 $441 $602 Dollar values in millions (1) Adjusted EBITDA may be found in our earnings releases for each respective year end

  29. Slide 29: IV. Outlook and Road Ahead: FY2015

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 2 9 IV. Outlook and Road Ahead: FY2015

  30. Slide 30: Update on Recently Announced Acquisitions

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 3 0 Update on Recently Announced Acquisitions  HydralyteTM acquisition closed April 30, 2014  Adds growing, market leading brand in Australia — #1 position in growing oral rehydration category — Strong strategic fit; dou

  31. Slide 31: FY2015 Outlook: Continued Brand Building and M&A Integration

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 3 1 FY2015 Outlook: Continued Brand Building and M&A Integration Key to Strong Financial Growth  Consumer sentiment: continued caution — Improving macro trends (unemployment and healthcare) — Brand loyalty remains importa

  32. Slide 32: Prestige: Investment Highlights

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 3 2 Prestige: Investment Highlights  Diversified consumer healthcare company in attractive OTC market  Portfolio of trusted brands with durable consumer franchises across multiple strategic platforms – Strong positions i

  33. Slide 33: Drivers of Our Long-Term Value-Creation Strategy

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 3 3 Drivers of Our Long-Term Value-Creation Strategy Expect FY2015 Adjusted E.P.S(1) of $1.75 – $1.85(2,3) Expect Pro Forma FY2015 Adjusted E.P.S(1) of $1.90 – $2.00(3) FY14 PF FY15 Free Cash Flow +40% $129 ~$175 Dollar va

  34. Slide 34: s

    P R E S T I G E B R A N D S F o u r t h Q u a r t e r & F ’ 1 4 R e s u l t s 3 4

Prestige Brands Holdings — Q4 FY2014 Earnings Presentation on 6ix