Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Raymond James Institutional Investor Conference 2018
36 slides from Prestige Consumer Healthcare's conference presentation, Mar 5, 2018
Slide 1: Raymond James Institutional Investor Conference
Raymond James Institutional Investor Conference March 5-6, 2018
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, adjusted EPS, and adjusted free cash flow; the Company’s ab
Slide 3: Contents and Attendees
Contents Attendees Ron Lombardi |. Who is Prestige Brands? . . . ; Chairman & Chief Executive Officer Il. Value Creation Model & Near-Term Outlook — Christine Sacco III. Financial Review and Outlook Chief Financial Officer Phil Terpolilli Director, Investor Relations NN Ba Raymond James Conference,
Slide 4: I. Who is Prestige Brands?
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Slide 5: Helping Consumers Care for Themselves
Helping Consumers Care for Themselves OY eye drops per year Clear eyes. woen® throat drops for every cold season doses of pain relief per week Ba Raymond James Conference, March 2018 PrestigeBrands s
Slide 6: Revenue mix by brand
12% 11% 11% 14% 10% 24% 9% 8% Source: LTM Revenues Note: Pro forma for Fleet acquisition; excludes other OTC (1%)
Slide 7: Market share positions (IRI)
Source: IRI MULO+C-Store period ending December 31, 2017; Retail Dollar Sales
Slide 8: Leading brands well-positioned in evolving environment
Leading brands well- positioned in evolving environment Execute brand-building playbook Continue to grow our categories and market share Source: IRI MULO+C-Store (Retail Dollar Sales).
Slide 9: Platform Positioned for Long-Term Success
Platform Positioned for Long-Term Success — . : NS eas Raymond James Conference, March 2018 PrestigeBrands >»
Slide 10: II. Value Creation Model & Near-term Outlook
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Slide 11: Value creation model overview
Portfolio positioned for 2% to 3% Organic growth Brand building to drive long-term success Industry-leading financial profile Cash Generation Best-in-class ongoing FCF generation Enables capital allocation opportunities Completed 5 acquisitions since CY 2013 Capital Deployment Continue
Slide 12: Organic growth and brand building
Portfolio positioned for 2% to 3% Organic growth Brand building to drive long-term success Near-term Considerations Long-term Positioning Category leading, trusted brands Taking share vs. category and private label Continued portfolio growth via brand-building toolkit Unique proposition
Slide 13: Invest for Growth, Manage for Cash
• • • • • • Invest for Growth Manage for Cash
Slide 14: Category Leading, Trusted Brands
Category Leading, Trusted Brands Retail Traffic Driver #1 share brands Need-based represent ~60% of sales products sought by consumers Brands drive long-term category growth Retail channel agnostic On Trend & Innovative E-Commerce Brand of Choice Consumer driven Channel remains an innova
Slide 15: Long-Term Brand-Building Toolkit
Long-Term Brand-Building Toolkit Growing the Category and Outpacing Private Label 2017 Performance Consumption Growth* Leverage portfolio’s long-standing brand heritage with focused digital and content marketing 2.9% Develop consumer insights to refine brand-building efforts 2.0% Focus new pro
Slide 16: Brand-building playbook
Iconic Advertising Extend Usage Occasions New Product Differentiation Channel Development Extend Brand Drive Category Growth, Not Share
Slide 17: Brand-building levers
New Product Development Shopper and Marketing Education Deepen Household Penetration Professional Interactions A&P Investments Highlight Proposition vs. Rx
Slide 18: Cash Generation
Industry-leading financial profile Cash Generation Best-in-class ongoing FCF generation Enables capital allocation opportunities Near-term Considerations Long-Term Positioning Goal is to maintain customer service levels critical to High Free Cash Flow Generation sustained long-term top-lin
Slide 19: FCF conversion and yield vs. peers
151% 129% 128% 107% 11% 98% 93% 93% 90% 89% 9% 86% FCF Yield: 7% 6% 6% 5% 5% 4% 4% 5% EPC CHD ENR BGS PG CL CLX JNJ HELE Source: Capital IQ Market LTM data as of February 22, 2018; comparable set includes selected HPC companies Note: Free Cash Flow Conversion defined as Non-GAAP Operating Cash Flow
Slide 20: Debt reduction and leverage
FY 18E FY 17 Total debt reduction of $145 million in YTD Q3 FY 18 Net Debt(3) at December 31 of $2,032 million comprised of: 4.6% – Cash on hand of $45 million $205.0 + $196.0 – $1,322 million of term loan and revolver – $750 million of bonds Leverage ratio(4) of 5.4x at end of Q3 – Annual fre
Slide 21: Free cash flow and leverage history
$183 $196 $205+ $164 $127 $130 $86 $67 $59 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 E ~5.0x ~5.2x ~5.0x ~5.7x ~5.0x ~4.3x ~4.3x ~3.2x ~3.5x FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 * FY 16 FY 17 FY 18 E Dollar values in millions. * Peak leverage of 5.75x at close of the Insight Acquisition i
Slide 22: Capital Deployment
Completed 5 acquisitions since CY 2013 Capital Deployment Continue to seek strategic M&A Continued evaluation of capital deployment Near-Term Considerations Long-Term Positioning M&A hurdle rates higher at current stock valuations 1. Paydown debt to enable capital allocations options Tar
Slide 23: Gastrointestinal, Feminine and Infant Care
Gastrointestinal Care Mid-single-digits+ CAGR Feminine Care Infant Care 2013A 2014A 2015A 2016A 2017E Over 140 year heritage Lynchburg, VA Summer’s Eve, Fleet Hold #1 Market Shares Widely Distributed in Key North American Retail Channels Responsive to A&P Spend
Slide 24: III. Financial Review and FY Outlook
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Slide 25: Revenue, EBITDA, FCF and EPS growth
17.6% CAGR 20.2% CAGR $882 $715 $305 $620 $218 $252 $334 $101 FY 11 FY 13 FY 15 FY 17 FY 11 FY 13 FY 15 FY 17 14.7% CAGR 20.1% CAGR $2.37 $164 $196 $1.86 $127 $1.50 $86 $0.79 FY 11 FY 13 FY 15 FY 17 FY 11 FY 13 FY 15 FY 17 Dollar values in millions, except Adjusted EPS.
Slide 26: Strong Financial Performance in YTD FY18
Strong Financial Performance in YTD 93 FY 18 Revenue .2 million, up 22.4% versus YTD 93 FY 17 Solid consumption growth of 2.9%!) outpaced revenue growth of 1.5%! pr for the acquisition of Fleet Adjusted EPS of $1.97"), up 7.7% versus YTD 93 FY 17 Adjusted Free Cash Flow of $156.2 million), up 4.1% v
Slide 27: YTD results and FY18 outlook
Revenue of $785.2M, up 22.4% vs. PY Revenue growth of 18% ($1,040M) — Revenue growth of 1.5%(1) pro forma for the Fleet acquisition; ~3%(2) consumption — Impacted by retailer destocking effects growth Adjusted EPS of $1.97(3), up 7.7% versus prior Adjusted EPS +9% ($2.58)(5) year Adjusted
Slide 28: Long-Term Value Creation Strategy
Long-Term Value Creation Strategy Expectation for Future Strong and Long Term Consistent Free rere Tie Organic Growth of Cash Flow Repeatable M@A 2.0% to 3.0% : Strategy Generation Upside Long-Term E.P.S. Growth oe Potential Long-Term Value Creation Strategy Raymond James Conference, March 2018 Pres
Slide 29: Non-GAAP footnotes
(1) Organic Revenue Growth and Proforma Revenue Growth are Non-GAAP financial measures and are reconciled to the most closely related GAAP financial measure in the attached Reconciliation Schedules and / or our February 1, 2018 earnings release in the “About Non-GAAP Financial Measures” section. (2)
Slide 30: Organic and pro forma revenue reconciliation
Three Months Ended Dec. 31, Nine Months Ended Dec. 31, 2017 2016 2017 2016 (In Thousands) GAAP Total Revenues $ 270,615 $ 216,763 $ 785,214 $ 641,390 Revenue Growth 24.8% 22.4% Adjustments: Revenue associated with acquisitions (54,143) - (160,692) - Revenues associated with divested brands - (5,921)
Slide 31: Adjusted net income and EPS reconciliation
Three Months Ended Dec. 31, Nine Months Ended Dec. 31, 2017 2016 2017 2016 Net Net Net Net Income EPS Income EPS Income EPS Income EPS (In Thousands, except per share data) GAAP Net Income $ 314,793 $ 5.88 $ 31,641 $ 0.59 $ 379,257 $ 7.08 $ 58,305 $ 1.09 Adjustments: Integration, transition and othe
Slide 32: Free cash flow reconciliation
Three Months Ended Dec. 31, Nine Months Ended Dec. 31, 2017 2016 2017 2016 (In Thousands) GAAP Net Income $ 314,793 $ 31,641 $ 379,257 $ 58,305 Adjustments: Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows (260,426) 3,978 (216,9
Slide 33: Projected FY18 EPS and free cash flow reconciliation
2018 Projected Free Cash Flow 2018 Projected EPS Low High (In millions) Projected FY'18 GAAP EPS $ 7.69 $ 7.79 Projected FY'18 GAAP Net Cash provided by operating activities $ 212 Adjustments: Additions to property and equipment for cash (12) Costs associated with Fleet integration 0.12 0.12 Project
Slide 34: EBITDA reconciliation
2011 2012 2013 2014 2015 2016 2017 GAAP Net Income $ 29,220 $ 37,212 $ 65,505 $ 72,615 $ 78,260 $ 99,907 $ 69,395 Income from Disc Ops (591) - - - - - - Loss on sale of disc ops 550 - - - - - - Interest Expense, net 27,317 41,320 84,407 68,582 81,234 85,160 93,343 Provision for income taxes 19,349 2
Slide 35: Adjusted EPS reconciliation by year
2011 2012 2013 2014 2015 2016 2017 Net Net Net Net Net Net Net Income EPS Income EPS Income EPS Income EPS Income EPS Income EPS Income EPS GAAP Net Income $ 29,220 $ 0.58 $ 37,212 $ 0.73 $ 65,505 $ 1.27 $ 72,615 $ 1.39 $ 78,260 $ 1.49 $ 99,907 $ 1.88 $ 69,395 $ 1.30 Adjustments Income from disconti
Slide 36: Free cash flow reconciliation by year
2010 2011 2012 2013 2014 2015 2016 2017 GAAP Net Income $ 32,115 $ 29,220 $ 37,212 $ 65,505 $ 72,615 $ 78,260 $ 99,907 $ 69,395 Adjustments Adjustments to reconcile net income to net cash provided by operating activities as shown in the statement of cash flows 31,137 26,095 35,674 59,497 50,912 64,6
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