Hamilton Beach Brands Holding Company · NYSE:HBB
Hamilton Beach Brands — Three Part Advisors 2019 Midwest IDEAS Investor Conference
29 slides from Hamilton Beach Brands's conference presentation, Aug 28, 2019
Slide 1: Hamilton Beach Brands Holding Company
HAMILTON BEACH BRANDS HOLDING COMPANY Midwest IDEAS Investor Conference, August 28, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and the Q and A to follow may include forward-looking statements subject to important risks and uncertainties. Refer to Hamilton Beach Brands Holding Company’s reports filed on Forms 10-Q and 10-K for information on factors that could cause actual results to d
Slide 3: HBBHC Revenue 2018 - $743M
HBBHC REVENUE 2018 - $743M KC $634M 15% HBB Revenue Revenue $114M by Segment KC Revenue HBBHC: Operating Profit: $32M Net Income: $22M HBB 85% Revenue of $743.2 million is net of $4.1 million of eliminations (intercompany sales) 2
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Proven Business Model Drives Results Commitment to Building Long-Term Shareholder Value Experienced Team Focused on Our Customers and Consumers Iconic Brands Serving Consumer and Commercial Markets Globally Comprehensive Product Offering - Value to Luxury Broad Custom
Slide 5: Global Footprint
GLOBAL FOOTPRINT Strategically Located to Serve Customers Markham, Ontario Corporate HQ Operations Canada HQ - Sales Picton, Regional HQ Sales and Ontario Marketing 3rd Party Manufacturers Minneapolis, Distribution Minnesota Center Sales Office Richmond, Virginia Seattle, Corporate Headquarters Geel
Slide 6: Comprehensive Offering
COMPREHENSIVE OFFERING Brands, Price Points, 50+ Categories Luxury PRICE POINT COVERAGE Value Coffee Fondue Set #1 $ rank #50+ $ rank CATEGORY COVERAGE 5
Slide 7: Hamilton Beach Is the #1 Brand
HAMILTON BEACH IS THE #1 BRAND ® Hamilton Beach Drives Retailers’ Traffic In Stores and Online % Unit Share – U.S. Small Kitchen Electrics 12.3 8.5 5.6 4.9 4.7 4.4 4.4 4.3 3.5 Hamilton Black + Decker Oster Mr.Coffee Instant Pot Crock Pot Keurig Cuisinart Kitchen Aid Beach Source: NPD POS database, 1
Slide 8: HBB Brands Are Top 3 in 28 Categories
HBB BRANDS ARE TOP 3 IN 28 CATEGORIES Green – Top 3 Share Category • Air Fryers • Espresso Maker • Other Waffle Iron/Sandwich • Blending (Traditional) • Food Processor Maker • Blending (Single Serve) • Food Chopper • Pizza Ovens • Other Blending & Processing • Food Steamer • Popcorn Makers • Breadma
Slide 9: "Good Thinking" Process
“GOOD THINKING” PROCESS Encourage and Cultivate Inspired Thinking in All Areas of Business Consumer Innovation Focus Excellent Work Quality Environment Good Thinking Testing Work Smart Testing Testing Trusted Best-in-Class Globally Logistics 8 11
Slide 10: Focus on Innovation
FOCUS ON INNOVATION “Good Thinking” Process Drives New Product Development New Product Platform Introductions 90 87 70 67 58 59 58 53 51 49 50 37 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 HBB generated approximately 30% of its revenue in the last 3 years from products that are less
Slide 11: FlexBrew
“Good Thinking” – Coffee Makers FLEXBREW ® ULTIMATE FLEXIBILITY IN BREWING 2 WAYS OF BREWING SINGLE CUP OR FULL POT BREW GROUNDS OR SINGLE SERVE PACKS 10
Slide 12: Alexa-Enabled Smart Coffee Maker
ALEXA-ENABLED SMART COFFEE MAKER VOICE-ENABLED CONTROLS WORKS WITH ALEXA “Alexa, Brew My Coffee” “Alexa, Is My Coffee Ready?” “Alexa, When Was My Coffee Brewed?” FULLY FEATURED FRONT-FILL COFFEE MAKER 11
Slide 13: Personal Quiet Blender
“Good Thinking” – Personal Blending PERSONAL QUIET BLENDER FULL SIZE CAPABILITIES FOR PERSONAL SIZE BLENDING BLADES CRUSH ICE, FROZEN FRUITS, NUTS, GRAINS AND SEEDS QUICKLY UNIQUE QUIET SHIELD GREAT FOR EARLY MORNING BLENDING CLASSIC CUP DESIGN DOUBLES AS A DRINKING VESSEL 12
Slide 14: Growth Objective
GROWTH OBJECTIVE Long-Term Growth Goal (excludes KC): $750 M - $1 B in Revenue and 9% - 10% Operating Profit 13
Slide 15: Only-the-Best
ONLY-THE-BEST Increasing Share in High–End Market with Premium Brands 1/3 Approximately 1/3 of U.S. Small Kitchen Appliance Industry Dollars is in Only-the-Best segment 2014 2015 2016 2017 2019 HBB Only-The-Best Revenue +40% in 2018 14
Slide 16: New in 2018
NEW IN 2018 Deluxe Automatic Multi-Function Cooker Drip Coffee Maker Countertop Oven Precision Griddle Upgraded 15
Slide 17: New in 2019
NEW IN 2019 Wolf Gourmet Stand Mixer 16
Slide 18: 5 and 7 Speed Hand Mixers
5 AND 7 SPEED HAND MIXERS POWERFUL DC MOTOR MIXES WITH EASE SLOW STARTING SPEED REDUCES SPLATTER INCLUDES SNAP-ON STORAGE CASE WITH BEATERS, DOUGH HOOKS & WISK LOCKABLE SWIVEL CORD FOR RIGHT – OR LEFT – HAND USE 17
Slide 19: Touchscreen Iron
TOUCHSCREEN IRON TOUCHSCREEN TEMPERATURE CONTROLS TITANIUM INFUSED CERAMIC SOLEPLATE OVER 400 STEAM HOLES FOR SUPERIOR PERFORMANCE 18
Slide 20: Strategic Partnership
STRATEGIC PARTNERSHIP BARTESIAN | PREMIUM COCKTAILS ON DEMAND™
Slide 21: Global E-Commerce
GLOBAL E-COMMERCE HBB Products Earn Strong Online Ratings and Reviews Hamilton Beach® was the #1 selling Brand Rating Average Star brand in the U.S. e-commerce Wolf Gourmet 4.4 channel in 2018 based on units CHI 4.3 Hamilton Beach Professional 4.1 HBB provides support for Hamilton Beach 4.1 promotio
Slide 22: Global Commercial
GLOBAL COMMERCIAL Leading Position in the Global Commercial Market Opportunity to accelerate growth in the $18B global commercial market (1) Company’s commercial brand reputation for performance, reliability and differentiated products is driving growth Increasing penetration of products at re
Slide 23: New Commercial Offerings
NEW COMMERCIAL OFFERINGS Otto ™ PrimaVac ™ Quantum ™ Juice Extractor Vacuum Packaging High Performance Blender 22
Slide 24: International Markets
INTERNATIONAL MARKETS Significant Opportunity for Emerging Markets Growth Latin America China India Removable High Performance Juicer Mixer Reservoir Iron Blender Grinder 23
Slide 25: New Categories
NEW CATEGORIES SONIC RECHARGEABLE TOOTHBRUSH 24
Slide 26: Strategic Acquisitions
STRATEGIC ACQUISITIONS Accretive – Right Fit at the Right Price TARGET PROFILE VALUE CREATION Opportunity in consumer or Accelerate growth and margins commercial Highly accretive when layered into Competitive market position current business model Potential to enter new product Meet or e
Slide 27: Kitchen Collection
KITCHEN COLLECTION Positioning to Deliver Acceptable Financial Return Optimize store portfolio by focusing on strong outlet malls and exiting stores that do not generate acceptable returns Average lease duration expected to be approximately one year for 85% of stores by the end of 2019. KC expec
Slide 28: Strong Cash Flow $86M
STRONG CASH FLOW Provides Financial Flexibility $86M PRIORITY USES OF CASH Reinvest in Core Growth Support Strategic Initiatives HBBHC CASH FLOW Pay Down Debt BEFORE FINANCING Return Capital to Shareholders GENERATED OVER Dividends PAST 3 YEARS Share Repurchases Accretive Acquisitions
Slide 29: SS ee,
SS ee, Hamiulton Beach BRANDS