Masco Corporation · NYSE:MAS
Masco — Raymond James 42nd Annual Institutional Investors Conference (March 2021)
19 slides from Masco's conference presentation, Mar 2, 2021
Slide 1: Raymond James 42nd Annual Institutional Investor Conference
Raymond James 42nd Annual Institutional Investor Conference Masco Corporation JOHN SZNEWAJS, CHIEF FINANCIAL OFFICER March 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that reflect our views about our future performance and constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “outlook,” “believe,”
Slide 3: Masco's Transformation
Masco’s Transformation Significant actions taken in the past six years 2014 2020 Segments 5 2 Repair & Remodel1 71% 89% Adjusted Operating Margin2 10.0% 18.2% Share Count 352 million 264 million Gross Debt/EBITDA2 3.4x 1.9x 3 1Based on Company estimates. 2See Appendix for GAAP reconciliations.
Slide 4: Masco Today
Masco Today Resilient portfolio with lower ticket repair and remodel focused products D E C O R AT I V E PLUMBING PRODUC TS1 ARCHITECTURAL PRODUCTS1 2020 Sales: $4.1B 2020 Sales: $3.1B 2020 OP Margin: 19.7%2 2020 OP Margin 19.2%2 New Home New Home 4% Construction 17% Construction Repair and 96% Repa
Slide 5: Financial Performance
Financial Performance Delivering strong EPS growth over past four years REVENUE OPERATING PROFIT1 EPS1 ($B) ($B) ($) $7.2 $1.3 $3.12 $5.8 $1.0 $1.30 2016 2020 2016 2020 2016 2020 Consistent top line, income, and EPS growth 5 1. Reflects operating profit and EPS, as adjusted. Amounts exclude disconti
Slide 6: Market Leading Brands
Market Leading Brands High share position in many categories ® 6
Slide 7: Innovation Leadership
Innovation Leadership Fuels future growth and customer advocacy Delta® Delta® Hansgrohe® Hansgrohe® Glass Rinser VoiceIQ™ Technology Rainfinity™ Technology Aquno™ Select Faucets Liberty Adjusta-Pull™ Behr Marquee® Behr® Spray Paint Behr® Water Based Cabinet Hardware Coating with Simple Pour Lid Inte
Slide 8: Broad Distribution
Broad Distribution Diversified geographies, products, channels P R I C E P O I N TS CHANNELS1 GOOD BETTER BEST Repair & remodel 89% New construction 11% North America 81% International 19% Retail 50% Wholesale/trade 36% E-commerce 9% Specialty dealers/ 5% other 1. Segmentation figures based on compa
Slide 9: Fundamentals of Repair and Remodel Market
Fundamentals of Repair and Remodel Market Market growth approximately 1-2% above GDP on average HOME PRICE AGE OF U.S. HOUSEHOLD HOUSING CONSUMER APPRECIATION HOUSING STOCK FORMATION TURNOVER CONFIDENCE 9
Slide 10: Full Year 2021 Outlook
Full Year 2021 Outlook 2021 Forecasted 2021 Forecasted Business Segment Sales Adjusted Growth Operating Profit Margin Organic: ~4-7% Acquisition: ~4% Plumbing Products ~18.0% FX: ~3% TOTAL: ~11-14% Organic: ~0-5% Decorative Acquisition: ~1.5% ~19.0% Architectural Products TOTAL: ~2-7% Organic: ~2-6%
Slide 11: Capital Allocation Strategy
Capital Allocation Strategy Balanced Approach to Continue to Drive Shareholder Value 1 Reinvest in the business • Capex: 2-2.25% of sales • Working capital: ~16.0% of sales 2 Maintain investment grade credit rating • Gross debt to EBITDA below 2.5x 3 Maintain relevant dividend • Dividend payout rati
Slide 12: Long-term Outlook
Long-term Outlook Growth Above Market LONG-TERM OUTLOOK: Low ticket, repair and remodel Average Organic: ~3-5% products provide growth and annual sales growth: Acquisition: ~1-3% stability through an economic cycle Operating Expand margins through cost margin: productivity and volume leverage Market
Slide 13: Q&A
Q&A MASCO
Slide 14: Appendix
Appendix MASCO
Slide 15: 2020 Segment Mix
2020 Segment Mix* Total Geographic Business 2020 Revenue Split Segment Revenue R&R% vs. NC NA% vs. Int’l Plumbing Products $4.1B 83% 67% North America 81% Decorative $3.1B 100% 96% Architectural Products Europe 12% Total Company $7.2B 89% 81% United Kingdom Other 2% China 2% 3% R&R = % of sales to r
Slide 16: Profit Reconciliation – Full Year
Profit Reconciliation – Full Year ($ in Millions) 2020 2016 2014 * Net sales $ 7,188 $ 5,754 $ 8,521 Operating profit, as reported $ 1,295 $ 986 $ 788 Rationalization charges 11 14 66 (Income) charge for litigation settlements - - (9) Costs related to spin-off of Services Business - - 6 Operating pr
Slide 17: EPS Reconciliation – Full Year
EPS Reconciliation – Full Year (in Millions, Except per Common Share Data) 2020 2016 Income from continuing operations before income taxes, as reported $ 1,131 $ 729 Rationalization charges 11 14 Loss from other investments - 3 Pension costs associated with expected terminated plans 23 - Income rela
Slide 18: Gross Debt to EBITDA Reconciliation
Gross Debt to EBITDA Reconciliation ($ in Millions) December 31, 2020 Debt $ 2,795 Year End ($ in Millions) December 31, 2020 Operating profit, as reported $ 1,295 Rationalization charges 11 Operating profit, as adjusted $ 1,306 Depreciation and amortization 132 EBITDA, as adjusted $ 1,438 Gross Deb
Slide 19: EPS Outlook Reconciliation
EPS Outlook Reconciliation 2021 Low End High End Income from continuing operations per common share $ 1.80 $ 2.00 Rationalization charges 0.01 0.01 Pension costs associated with expected terminated plans (1) 1.42 1.42 Allocation to participating securities per share (2) 0.02 0.02 Income from continu
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