Hamilton Beach Brands Holding Company · NYSE:HBB
Hamilton Beach Brands — Three Part Advisors Midwest IDEAS Investor Conference 2024
28 slides from Hamilton Beach Brands's conference presentation, Aug 28, 2024
Slide 1: Investor Presentation
Investor Presentation Three Part Advisors Midwest IDEAS Investor Conference AUGUST 28, 2024
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements The statements contained in this presentation that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These forward-looking statements are made subject to certain
Slide 3: Company Overview
3 Company Overview Who We Are Markets Served • Hamilton Beach Brands Holding Company • Core Consumer market is North • A leading designer, marketer and distributor of a wide range of America (U.S., Canada, Mexico, branded small electric household and specialty Latin America) housewares appliances, a
Slide 4: Investment Highlights
4 Investment Highlights 01 02 03 Leader in large and growing Proven innovator with 110+ Strong relationships consumer housewares market, years of industry leading R&D with key customers across all with a powerful portfolio of markets and channels, with a iconic brands leading ecommerce presence 04 0
Slide 5: Powerful Brand Portfolio
5 Luxury Powerful Brand Portfolio Flagship brands Hamilton Beach and Proctor Silex are well known and trusted names that have served consumers for 110+ years • Core business provides strong foundation to support newer growth initiatives Premium, Commercial, • Exclusive multiyear trademark licensing
Slide 6: Broad Product Assortment
6 Broad Product Assortment Hamilton Beach participates Hamilton Beach® brand small Participates in high demand in 50+ product categories appliances rank in the Top 3 categories like single-serve often offering multiple brands positions for national brands in coffee, blenders, toaster per category 26
Slide 7: Consistent Product Innovation
7 Consistent Product Innovation Hamilton Beach’s Good Thinking® approach to consumer-driven innovation Goal is to • Gather data/feedback from 25,000+ maximize consumer touchpoints annually innovations with unique • 200+ new product platforms consumer benefits launched over last 5 years • Pipeline of
Slide 8: 2024 New Products
8 2024 New Products Proprietary & Confidential
Slide 9: Best-in-Class Customer Relationships
9 Best-in-Class Customer Relationships Products distributed through all key channels North American Consumer Global Commercial Global Health Largest customers for flagship brands
Slide 10: Strategic Growth Initiatives
10 Strategic Growth Initiatives 01. Drive Core Growth 02. Gain Share in the Premium Market Core Premium Leverage Partnerships and 03. Lead in Global Commercial Market Acquisitions Customer Accelerate Digital Focused 04. Accelerate Growth of Hamilton Beach Health Transformation Health Commercial 05.
Slide 11: Drive Core Growth
11 01 Strategic initiative Hamilton Beach is the #1 small kitchen Drive Core appliance brand in the U.S. by units sold¹ • Proctor Silex brand is “Simply Better”, products feature sleek, Growth practical designs at accessible price points • Growth plans to increase revenue and market share focus on i
Slide 12: Gain Share in Premium Market
12 02 Strategic initiative Gain Share • Some premium brands are owned while others are in Premium used under exclusive multiyear trademark licensing and other agreements Leveraging • HBB share of U.S. $3.6 billion market is ~3%, Market brands into new premium providing significant room for growth¹ l
Slide 13: Premium New Products
13 Premium New Products
Slide 14: Lead in Global Commercial Market
14 03 Strategic initiative Lead in Global • Increasing participation in multi-billion-dollar global market with significant upside • Investing in higher margin products Commercial for commercial food service/beverages and hotel amenities Market • Accounted for 8% of HBB 2023 revenue • Growth plans i
Slide 15: Commercial Growth Plans
15 Commercial Growth Plans Further regional and global chain penetration • Blending and mixing • Back-of-house food prep Drive growth in EMEAI region Coffee Numilk commercial machine shops are a prime target
Slide 16: Accelerate Growth of Hamilton Beach Health
16 04 Strategic initiative 2021 2024 Accelerate Created Hamilton Beach Health brand Acquired HealthBeacon PLC, a medical technology firm Growth of • Opportunity driven by demographics, increased chronic medical conditions, need for at-home treatments, technology Hamilton Beach • Developing healthcar
Slide 17: Accelerate Digital Transformation
17 05 • Best-in-class retailer support driving Strategic initiative prominent brand placement on leading sites • HBB’s strong product reviews and Accelerate ratings online build brand equity Digital • Growth plans include online content investments to drive awareness/sell- HBB has capitalized on con
Slide 18: Leverage Partnerships & Acquisitions
18 06 Identify businesses that fit strategically within the Hamilton Beach portfolio and Strategic initiative leverage Company’s many strengths Leverage Partnerships Partnerships & Acquisitions Acquisitions • Pursue additional trademark licensing agreements • Forge strategic alliances
Slide 19: Financial Summary
19 Twelve Months Ending Financial Income Statement Data Revenue 6/30/24 $644,781 12/31/23 $625,625 12/31/22 $640,949 Summary Gross Profit % of Revenue Operating Profit $165,900 25.7% $48,427 $143,676 23.0% $35,081 $129,114 20.1% $38,794 (In thousands) % of Revenue 7.5% 5.6% 6.1% • Strong recovery fr
Slide 20: Revenue Growth Roadmap
20 Revenue Growth Roadmap Fastest growing areas of HBB's Growth driven by business expected to be: 6 key strategic • Premium initiatives • Commercial • Health Small kitchen appliance market in 2024 projected to be modestly below 2023 HBB 2024 total revenue expected to increase modestly, outpacing ma
Slide 21: Key Margin Drivers
21 Key Margin Drivers 01 Gross profit margin expansion from mix shift to premium and commercial products 02 SG&A leverage as the business scales 03 2024 operating profit expected to increase significantly due to gross profit margin expansion
Slide 22: Strategic Global Footprint and Asset-Light Business Model
22 Key: Strategic Global Footprint and Corporate HQ Regional HQ Operations Sales Asset-Light Business Model Dublin, Ireland 3rd Party Manufacturers Health Minneapolis, Markham, Ontario Minnesota Canada HQ – Sales HealthBeacon HQ Sales Office and Marketing Belleville, Ontario Distribution Center Geel
Slide 23: Strong Balance Sheet and Liquidity
23 Strong Balance Sheet and Liquidity Goal is to maintain a Ample liquidity conservative leverage $75M net debt to support growth profile not greater than reduction in 2023 investments 2.5x-3x
Slide 24: Disciplined Capital Allocation Priorities
24 Disciplined Capital Allocation Priorities Reinvest in Return value to shareholders the business • Maintain competitive dividends • Support organic growth • Share repurchases Opportunistically buy back stock • Disciplined M&A strategy o Repurchased 414,011 shares (TTM 6/30/2024) Paid $6.2M focused
Slide 25: Why Invest in HBB?
25 Why Invest in HBB? 01 02 03 Leader in large and growing Proven innovator with 110+ Strong relationships consumer housewares market, years of industry leading R&D with key customers across all with a powerful portfolio of markets and channels, with a iconic brands growing ecommerce presence 04 05
Slide 26: Thank You
Thank You
Slide 27: Appendix
—_— = Hamilton Beach BRANDS
Slide 28: Non-GAAP Disclosure
28 As of Non-GAAP Net Working Capital Trade receivables, net 6/30/24 $85,038 12/31/23 $135,434 12/31/22 $115,135 Disclosure Inventory Less: Accounts Payable $130,197 $96,452 $126,554 $99,704 $156,038 $61,759 • Net working capital, net debt and Net Working Capital $118,783 $162,284 $209,414 free cash