Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Q4 FY2019 Earnings Presentation
30 slides from Prestige Consumer Healthcare's earnings presentation, May 9, 2019
Slide 1: Review of Fourth Quarter and FY 2019 Results
Exhibit 99.2 ne Prestige Consumer HEALTHCARE Review of Fourth Quarter and FY 2019 Results May 9t, 2019 ; <= ster MONISTAT
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 revenues, organic growth, adjusted EPS, and adjusted free cash flow; the ma
Slide 3: Agenda for Today's Discussion
——————Seeeeee eee en Agenda for Today's Discussion |. Performance Highlights Il. FY 19 Strategic Review lll. Financial Overview IV. FY 20 Outlook and the Road Ahead Fourth Quarter FY 19 Results MeMtinoaee
Slide 4: I. Performance Highlights
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Slide 5: Fourth Quarter Performance Highlights
94 FY 19 Performance Highlights Revenue of $241.0 million, up 3.2% us PY on an organic basis Consumption growth of 2.0%) led by strong e-commerce and international growth 4%, up 220 bps us PY Adjusted EPS of $0.72"), up 16.1% versus PY Total debt paydown of $45 million in the quarter mer THOARE A Fo
Slide 6: FY Performance Highlights
◼ Revenue of $975.8 million, up 0.1%(1) versus FY 18 on an organic basis – Solid consumption growth of 1.9%(2) outpaced both category and private label growth – Lower than average incidence rates across cough/cold and lice categories – Strong growth in international segment ◼ Adjusted Gross Margin o
Slide 7: II. FY19 Strategic Review
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Slide 8: FY19 strategic priorities and accomplishments
◼ Brand building continued to drive consumption growth Invest for and share gains ✓ Growth ◼ Successful new product launches across the portfolio ◼ Strong & consistent adjusted free cash flow of $202 Cash million(3) ✓ Generation ◼ Enabled capital allocation opportunities ◼ Reduced debt by $200 milli
Slide 9: Total Sales by Category
Total Sales* by Category #1 Brands Represent Two-Thirds of Total Sales* Dermatologicals 10% Women’s Eye & Health Ear Care 27% 12% Oral 11% Care 17% 11% GI Cough / 12% Cold Analgesics * FY’19 Revenues, Excludes Divested Household Cleaning Segment Note: Excludes other OTC (less than 1%).
Slide 10: Brand extension and innovation approaches
Extend Brand Through Better Consumer Experience or Claims Innovate Through Technology Expand Brand in New Monthly Professional Professional Cough Nausea Shampoo Channels or Categories Cycle Alternative Alternative Suppressant
Slide 11: Innovation reduces barriers to entry and adds new users
Innovation reduces barriers to entry and adds new users ~$60M Retail Sales(2) New Category New Formulation More Impactful New Form Revitalized Claims Packaging
Slide 12: Consumption growth vs. the category
Consumption Growth* vs. the Category Household Penetration* +930bps +1.1% 5.8% 4.7% +700bps ◼ Shift traditional TV media to digital Jan-18 Mar-19 ◼ Promote multiple usage occasions ◼ Opportunity for increased household through targeted messaging penetration ◼ Consumer purchases driven by flavor ◼ La
Slide 13: Top PBH Brands Rank and U.S. Market Share
Top PBH Brands Rank U.S. Market Share* FY19 vs Category Summer’s Eve #1 55% History of Winning Monistat #1 60% Continued in FY19 BC/Goody’s #1 100%/5%*** Clear Eyes #1 25% DenTek #2 25% Dramamine #1 50% ~2.5x Average Share vs. Largest Competitor Luden’s #3 5% Fleet #1 50% Compound W #1 45% Chlorasep
Slide 14: III. Financial Overview
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Slide 15: Q4 and FY financial performance overview
◼ Solid overall financial performance in Q4 and FY 19 − Q4 Revenue of $241.0 million, an organic increase of 3.2%(1) vs prior year − Q4 Adjusted EBITDA of $83.7 million(3) − Q4 Adjusted EPS of $0.72(3), up 16.1% vs prior year, and FY 19 Adjusted EPS of $2.78(3), up 7.8% vs prior year Q4 FY 19 Q4 FY
Slide 16: Q4 and FY income statement summary
Q4 FY 19 Q4 FY 18 % Chg FY19 FY18 % Chg ◼ Organic Revenue growth of 0.1%(1) vs prior year Total Revenue $ 241.0 $ 256.0 (5.8%) $ 975.8 $ 1,041.2 (6.3%) (3) – Impacted by elevated levels of retailer Adjusted Gross Margin 138.2 141.3 (2.1%) 555.7 580.2 (4.2%) inventory reductions % Margin 57.4% 55.2%
Slide 17: Free cash flow and leverage
◼ FY19 Free Cash Flow impacted by sale of $208 Household, up organically vs prior year $197 $202 $200+ – Free Cash Flow conversion of 139% for FY 19* ◼ Net Debt at March 31 of $1.8 billion; leverage ratio of 5.0x(4) at end of FY 19 – Expect to reach approximately ~4.5x by year ~5.7x end FY 20 if all
Slide 18: Annual incremental free cash flow
Annual incremental FCF $600+ $200+ $400+ $200+ $200+ $400 $200 FY 20E FY 21E FY 22E
Slide 19: IV. FY20 Outlook and the Road Ahead
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Slide 20: FY20 outlook
◼ Continue to gain market share with consumers and grow categories with retailers ◼ Prestige’s portfolio of need-based brands continues to be well positioned for future long-term growth, despite macro headwinds at retail ◼ Reported Revenue of $951 to $961 million, Organic Revenue expected to be appr
Slide 21: Continuing Our Long-Term Value Creation Strategy
Continuing Our Long-Term Value Creation Strategy Upside Long-Term E.P.S. Growth Potential LL Shareholder Value Enhancement Fourth Quarter FY 19 Results
Slide 22: Se sine Ceuroy
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Slide 23: Non-GAAP footnotes
(1) Organic Revenue is a Non-GAAP financial measure and is reconciled to the most closely related GAAP financial measure in the attached Reconciliation Schedules and / or our earnings release in the “About Non-GAAP Financial Measures” section. (2) Total company consumption is based on domestic IRI m
Slide 24: Organic revenue reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2019 2018 2019 2018 (In Thousands) GAAP Total Revenues $ 241,026 $ 255,965 $ 975,777 $ 1,041,179 Revenue Growth (5.8%) (6.3%) Adjustments: Revenue associated with divestiture - (19,817) - (60,787) Allocated costs that remain after divestiture - (578) -
Slide 25: Adjusted gross margin and A&P reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2019 2018 2019 2018 Three Months Ended Mar. 31, Year Ended Mar. 31, (In Thousands) 2019 2018 2019 2018 GAAP Total Revenues $ 241,026 $ 255,965 $ 975,777 $ 1,041,179 (In Thousands) GAAP Advertising and Promotion Expense $ 34,433 $ 35,319 $ 143,090 $ 147
Slide 26: Adjusted G&A reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2019 2018 2019 2018 (In Thousands) GAAP General and Administrative Expense $ 21,299 $ 22,164 $ 89,759 $ 85,393 GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue 8.8% 8.7% 9.2% 8.2% Adjustments: Integration, transition and ot
Slide 27: EBITDA reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2019 2018 2019 2018 (In Thousands) GAAP Net Income (Loss) $ (139,274) $ (39,687) $ (35,800) $ 339,570 Interest expense, net 25,745 26,838 105,082 105,879 Provision (benefit) for income taxes (39,756) (12,875) (2,255) (232,484) Depreciation and amortiza
Slide 28: Adjusted net income and EPS reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2019 2018 2019 2018 Net Net Net Income EPS Income EPS Net Income EPS Income EPS (In Thousands, except per share data) GAAP Net Income (Loss) $ (139,274) $ (2.67) $ (39,687) $ (0.74) $ (35,800) $ (0.68) $ 339,570 $ 6.34 Adjustments: Integration, transit
Slide 29: Free cash flow reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2019 2018 2019 2018 (In Thousands) GAAP Net Income (Loss) $ (139,274) $ (39,687) $ (35,800) $ 339,570 Adjustments: Adjustments to reconcile net income (loss) to net cash provided by operating activities as shown in the Statement of Cash Flows 195,975 1
Slide 30: 2020 Projected Free Cash Flow
2020 Projected Free Cash Flow (In millions) Projected FY'20 GAAP Net cash provided by operating activities $ 215 Additions to property and equipment for cash (15) Projected Non-GAAP Free Cash Flow $ 200
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