Slide 1: Q1 2020 Earnings
Q1 2020 Earnings APRIL 29, 2020
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: the impact of
Slide 3: Safe Harbor continued
Safe Harbor continued •the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives; •
Slide 4: Supplemental Financial Data: Use of Non-GAAP Financial Measures
Supplemental Financial Data Use of Non-GAAP Financial Measures The financial tables accompanying this presentation include non-GAAP financial measures as defined under SEC rules, specifically Adjusted operating profit, Adjusted net earnings and Adjusted earnings per diluted share, which exclude, whe
Slide 5: Hasbro's Brand Blueprint
Hasbro’s Brand Blueprint BRANDS CONTENT
Slide 6: Creating the World's Best Play & Entertainment Experiences
Creating the World’s Best Play & Entertainment Experiences HASBRO’S BRAND FOCUSED ON FOUR STRONG FINANCIAL BLUEPRINT: ESSENTIAL AREAS IN POSITION A PROPRIETARY NEAR TERM ADVANTAGE Unique Strategy fueled by Supply: Positioned to meet full- Q1 2020 Revenues: $1.1B Unmatched Brand Portfolio and year pr
Slide 7: Q1 2020 snapshot
REVENUE $1.11B Q1 OPERATING (LOSS) PROFIT $(23.3)M 2020 As Reported As Adjusted $151.5M NET (LOSS) EARNINGS As Reported $(69.6)M snapshot As Adjusted $77.7M EPS: NET (LOSS) EARNINGS As Reported $(0.51) per diluted share As Adjusted $0.57 *A reconciliation of Non-GAAP financial measures can be found
Slide 8: COVID-19 Update: Supply Chain
COVID-19 UPDATE: Supply Chain Supply chain positioned to meet full-year product demand requirements leveraging growing retailer channels, including ecomm and omni-channel China • Third-party factories in China represent approximately 55% of the Company’s manufacturing production • Currently operatin
Slide 9: COVID-19 Update: Demand
COVID-19 UPDATE: Demand Hasbro brands are resonating as people spend more time at home First Quarter Consumer Leveraging Digital-First Entertainment Release Demand Up for Hasbro Brands, Orientation Across Diverse Schedule Shifting Led by Games Retail Network • Global POS increased mid-single • Findi
Slide 10: COVID-19 Update: Liquidity
COVID-19 UPDATE: Liquidity Hasbro is operating from a solid financial position Hasbro is in a good financial position and ended the first quarter with $1.2 billion in cash • The Company's $1.5 billion revolving credit facility is also available • The Company remains well within its financial covenan
Slide 11: COVID-19 Update: Community
COVID-19 UPDATE: Community Health and safety of Hasbro employees, stakeholders and communities are the top priority Hasbro global offices, outside of China, were closed on March 16 and remain closed today • The timing of re-opening offices will be informed by local governmental, health and safety gu
Slide 12: First Quarter Net Revenue Performance
First Quarter Net Revenue Performance Q1 2020 FIRST QUARTER NET REVENUES Revenues -7% Absent FX $1,500 -8% • Consumer demand strong in the first quarter 2020 $1,199 $1,106 $ Millions, unaudited • Growth in Gaming including MAGIC: THE $1,000 GATHERING, MONOPOLY and DUNGEONS AND DRAGONS and Partner Br
Slide 13: First Quarter Brand Portfolio Performance
First Quarter Brand Portfolio Performance FIRST QUARTER 2020 • Growth in MAGIC: THE GATHERING Pro Forma and MONOPOLY; partially offset by Q1 2020 Q1 2019 % CHANGE declines in other FRANCHISE BRANDS. FRANCHISE BRANDS $397 $394 +1% • PARTNER BRANDS growth in Disney Frozen 2, Star Wars and Universal’s
Slide 14: First Quarter Operating Profit (Loss)
First Quarter Operating Profit (Loss) Operating Profit Margin Q1 2020 Adj: 13.7% OP Favorable FIRST QUARTER • Cost of Sales $176 • Lower Expenses • Royalties $152 • Content Amortization $150 $139 Unfavorable • Lower Revenues • Advertising $ Millions, unaudited • Stock Compensation $50 • Shipping & W
Slide 15: U.S. & Canada Segment Net Revenues and Operating Profit
U.S. & Canada Segment Net Revenues and Operating Profit FIRST QUARTER 2019 +20% >100% 2020 $500 $100 $429 $400 $358 -9% $72 $ Millions, unaudited $300 $50 $200 $100 $14 $- $- NET REVENUES OPERATING PROFIT • Higher revenues and profits from strong growth in Gaming; Partner Brands revenues increased •
Slide 16: International Segment Net Revenues & Operating Loss
International Segment Net Revenues & Operating Loss FIRST QUARTER -11% 2019 $300 $283 $250 2020 $ Millions, unaudited $200 -9% +12% $100 $(30) $(27) $- NET REVENUES OPERATING LOSS • Strong start to the quarter in Europe, impacted by COVID-19 related store closures late in the quarter; Latin America
Slide 17: International Segment Net Revenues
International Segment Net Revenues Q1 2020 Q1 2020 AS REPORTED ABSENT FX EUROPE +6% +8% LATIN AMERICA -46% -40% ASIA PACIFIC -18% -16% TOTAL INTERNATIONAL -11% -8% Foreign Exchange had a negative $9.3M impact on International segment revenues in the first quarter 2020 17
Slide 18: Entertainment, Licensing & Digital Segment Net Revenues & Operating Profit
Entertainment, Licensing & Digital Segment Net Revenues & Operating Profit FIRST QUARTER 2019 -9% 2020 $100 $150 -13% As 2020 Adj. -9% -83% Adjusted $ Millions, unaudited As $100 $92 Reported $84 $50 $30 $50 $26 $5 $- $- NET REVENUES OPERATING PROFIT • EL&D revenues declined due to lower digital gam
Slide 19: eOne Segment Net Revenues & Operating Profit (Loss)
eOne Segment Net Revenues & Operating Profit (Loss) FIRST QUARTER 2019 -27% 2019 Adj. $600 $466 2020 $500 150 $140 2020 Adj. $400 $342 $103 $ Millions, unaudited 100 $300 $70 $200 50 $100 $(33) $- 0 Pro Forma Pro Forma Pro Forma NET REVENUES -50 OPERATING PROFIT (LOSS) • Revenues declined due to str
Slide 20: First Quarter Net Earnings (Loss)
First Quarter Net Earnings (Loss) $125 $105 • Total Non-Operating Expense: $49M $76 $78 • Q1 2020 Underlying Tax Rate: 20.6% $75 versus 18.5% in Q1 2019 $ Millions, unaudited $0.76 PER $0.57 $0.56 PER PER DILUTED SHARE DILUTED • Share Count: 137.1M $25 DILUTED SHARE SHARE $(70) Pro Forma LOSS OF $(2
Slide 21: Family Brands: Resilience in Animated Content Offsets Lower Consumer Demand
Q1 2020 Performance Family Brands: Resilience in Animated Content Offsets Lower Consumer Demand • Strong demand for animated content across all platforms offset lower licensee shipments to consumer product retailers • PEPPA PIG is now the most viewed preschool show in the world on the YouTube platfo
Slide 22: Television, Film & Music – Strong Demand for Content and Active Development Pipeline
Q1 2020 Performance Television, Film & Music – Strong Demand for Content and Active Development Pipeline • Television and film development and writing teams remain very active and not materially impacted by COVID-19 issues during the quarter • Short-term negative impact to revenues due to ongoing pr
Slide 23: 2020/2021 Entertainment Releases
2020/2021 ENTERTAINMENT RELEASES UNIVERSAL PARAMOUNT MARVEL STUDIOS TROLLS WORLD DISNEY MULAN PICTURES BLACK WIDOW TOUR SNAKE EYES OLD: APRIL 17 OLD: MAR 27 OCT 23 OLD: MAY 1 NEW: APRIL 10 (PVOD) NEW: JULY 24 NEW: NOV 6 MARVEL STUDIOS SONY PICTURES DISNEY MARVEL STUDIOS SHANG-CHI GHOSTBUSTERS RAYA T
Slide 24: Key Cash Flow & Balance Sheet Data
Key Cash Flow & Balance Sheet Data QUARTER ENDED $ Millions, unaudited MAR 29, 2020 MAR 31, 2019 NOTES Substantial cash on hand and access to cash through Cash $1,238 $1,197 $1.5B revolving credit facility Long-term Debt $5,156 $1,695 Reflects eOne acquisition financing completed in 2019 Depreciatio
Slide 25: Returning Cash to Shareholders: Committed to Paying a Dividend
Returning Cash to Shareholders: Committed to Paying a Dividend DIVIDEND GROWTH - 10% $3.00 8% 11% $2.50 12% 11% 10-YEAR $2.00 7% CAGR 8% 11% $1.50 20% 20% 25% $1.00 $0.50 $- 2010 2011 2012* 2013* 2014 2015 2016 2017 2018 2019 2020 $93.2M Long-Term Board Authorized Paid in $0.68 Dividend Commitment t
Slide 26: Our commitment to CSR
Our commitment to CSR reflects our desire to help build a safer, more sustainable and inclusive company and world for all. Product Safety Environmental Human Rights & Diversity & Sustainability Ethical Sourcing Inclusion 100 Most Sustainable Companies 26
Slide 27: Innovation
INNOVATION products built on proprietary consumer insights first-to-market innovation in play patterns across the portfolio of Hasbro owned & partner brands
Slide 28: Passion, Creativity, Integrity, Community, Inclusion
PASSION ¢ CREATIVITY » INTEGRITY » COMMUNITY “ INCLUSION
Slide 29: Supplemental Financial Information
Supplemental Financial Information 29
Slide 30: Consolidated Statements of Operations
Consolidated QUARTER ENDED % NET % NET Statements of MAR 29, 2020 REVENUES MAR 31, 2019 REVENUES NET REVENUES $1,106 100.0% $733 100.0% Operations Cost of Sales 263 23.8% 260 35.5% Program Production Cost Amortization 132 12.0% 7 0.9% Royalties 113 10.2% 60 8.2% Product Development 54 4.9% 56 7.7% A
Slide 31: Condensed Consolidated Balance Sheets
Condensed MARCH 29, 2020 MARCH 31, 2019 Consolidated Cash & Cash Equivalents $1,238 $1,197 Balance Sheets Accounts Receivable, Net 964 638 Inventories 444 492 Prepaid Expenses and Other Current Assets 672 305 TOTAL CURRENT ASSETS 3,319 2,632 Property, Plant & Equipment, Net 456 396 Goodwill 3,573 48
Slide 32: Condensed Consolidated Cash Flows
Condensed QUARTER ENDED MARCH 29, 2020 MARCH 31, 2019 Consolidated CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $292 $264 Cash Flows CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Property, Plant and Equipment (31) (25) (4,404) Investments and Acquisitions, Net of Cash Acquired -- Other 4 (2) NET
Slide 33: Supplemental Financial Data: Pro Forma Segment Results
SUPPLEMENTAL FINANCIAL DATA SUPPLEMENTAL FINANCIAL DATA: PRO FORMA SEGMENT RESULTS (Unaudited) (Thousands of Dollars) For comparability, the first quarter of 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma adju
Slide 34: Supplemental Financial Data: Reconciliation to Pro Forma Adjusted Operating Results
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS (Unaudited) (Thousands of Dollars) For comparability, the first quarter of 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the
Slide 35: Supplemental Financial Data: Reconciliation of Operating Results
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS (Unaudited) (Thousands of Dollars) For comparability, the first quarter of 2019 includes the pro forma results for the eOne Segment. Reconciliation of Operating (Loss) Profit Results Pro Forma Quarter E
Slide 36: Supplemental Financial Data: Reconciliation of 2019 As Reported to Pro Forma
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF 2019 AS REPORTED TO PRO FORMA RESULTS (Unaudited) (Thousands of Dollars) Pro forma results were prepared by combining the results of Hasbro and eOne for the quarter ended March 31, 2019, after giving effect to the eOne Acquisition as if it had been consu
Slide 37: Supplemental Financial Data: Reconciliation of Non-GAAP Financial Measures
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) Thousands of Dollars & Shares, Except Per Share Data Reconciliation of Net Earnings and Earnings per Share Quarter Ended Pro Forma Diluted Diluted Per Share Pro Forma Per Share Amount (1) (all adjustments reported
Slide 38: Supplemental Financial Data: eOne FY2019 Results of Operations
SUPPLEMENTAL FINANCIAL DATA eOne - FY2019 RESULTS OF OPERATIONS (AS REPORTED UNDER US GAAP) (Unaudited) (Thousands of Dollars) Quarter Ended Year Ended March 2019 June 2019 September 2019 December 2019 December 2019 Net Revenues $ 466,212 $ 231,091 $ 283,310 $ 235,160 $ 1,215,773 Costs and Expenses: