Slide 1: Q2 2020 Earnings
Q2 2020 Earnings JULY 27, 2020
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: the impact of
Slide 3: Safe Harbor continued
Safe Harbor continued •the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives; •
Slide 4: Supplemental Financial Data: Use of Non-GAAP Financial Measures
Supplemental Financial Data Use of Non-GAAP Financial Measures The financial tables accompanying this presentation include non-GAAP financial measures as defined under SEC rules, specifically Adjusted operating profit, Adjusted net earnings and Adjusted earnings per diluted share, which exclude, whe
Slide 5: Hasbro's Brand Blueprint
Hasbro’s Brand Blueprint BRANDS CONTENT
Slide 6: Creating the World's Best Play & Entertainment Experiences
Creating the World’s Best Play & Entertainment Experiences HASBRO’S BRAND FOCUSED ON FOUR STRONG FINANCIAL BLUEPRINT: ESSENTIAL AREAS IN POSITION A PROPRIETARY NEAR TERM ADVANTAGE Supply: Positioned to meet full-year Unique Strategy fueled by product demand Q2 2020 Revenues: $860.3M Unmatched Brand
Slide 7: Q2 2020 snapshot
REVENUE $860.3M Q2 OPERATING PROFIT $2.2M 2020 As Reported As Adjusted $46.6M NET (LOSS) EARNINGS As Reported $(33.9)M snapshot As Adjusted $2.7M EPS: NET (LOSS) EARNINGS As Reported $(0.25) per diluted share As Adjusted $0.02 *The As Adjusted figures are non-GAAP financial measures. per diluted sha
Slide 8: 2020 Announcements & Highlights
we “a _ k- ee LEGENDS 2020 ANNOUNCEMENTS & HIGHLIGHTS
Slide 9: COVID-19 Update: Supply Chain
COVID-19 UPDATE: Supply Chain Factories and warehouses are open and operating in nearly all markets Well positioned to meet full year product demand China • Third-party factories in China represent approximately 55% of the Company’s manufacturing production • Operating at normal capacity since the b
Slide 10: COVID-19 Update: Demand
COVID-19 UPDATE: Demand Children, families and fans connect through Hasbro toys, games and entertainment Second Quarter Consumer Entertainment Release Demand Up for Hasbro Brands, Leveraging Digital-First Schedule Shifting; High Viewer Led by Games Orientation Engagement • Global POS increased high-
Slide 11: COVID-19 Update: Liquidity
COVID-19 UPDATE: Liquidity Hasbro is operating from a solid financial position Hasbro is in a good financial position and ended the second quarter with $1.0 billion in cash • The Company's $1.5 billion revolving credit facility is also available • The Company remains well within its financial covena
Slide 12: COVID-19 Update: Community
COVID-19 UPDATE: Community Our global teams are focused on supporting our people, health and safety workplace protocols and supporting work-at-home arrangements Our focus on our purpose to make the world a better place for all children and all families has never been more important Hasbro has commit
Slide 13: Second Quarter & Six Months Net Revenue Performance
Second Quarter & Six Months Net Revenue Performance SECOND QUARTER NET REVENUES SIX MONTHS 2020 NET REVENUES $2,500 $2,414 $1,500 -19% -29% $1,216 $1,966 $2,000 $1,000 $860 $1,500 $ Millions, unaudited $1,000 $500 $500 $- $- 2019 2020 2019 2020 Pro Forma Pro Forma • Consumer demand remained strong i
Slide 14: Second Quarter & Six Months Brand Portfolio Performance
Second Quarter & Six Months Brand Portfolio Performance 2nd QUARTER 2020 Pro Forma • Strong consumer demand for Pro Forma Six Months Six Months % Hasbro brands and stories, but Q2 2020 Q2 2019 % CHANGE 2020 2019 CHANGE revenues impacted by temporary store closures, product shortages, lower retail FR
Slide 15: Second Quarter & Six Months Operating Profit (Loss)
Second Quarter & Six Months Operating Profit (Loss) SECOND QUARTER 2020 SIX MONTHS 2020 $150 $141 $350 $317 $101 $240 $100 $225 $198 $47 $ Millions, unaudited $50 $100 $(21) $2 $- $(25) 2019 2019 Adj* 2020 2020 Adj* 2019 2019 Adj* 2020 2020 Adj* Pro Forma Pro Forma Operating Profit Margin Q2 2020 Op
Slide 16: U.S. & Canada Segment Net Revenues & Operating Profit (Q2)
U.S. & Canada Segment Net Revenues & Operating Profit SECOND QUARTER -30% Pro Forma -77% 2019 $600 2020 $511 $150 $500 -9% $107 $ Millions, unaudited $400 $360 $100 $300 $200 $50 $24 $100 $- $- NET REVENUES OPERATING PROFIT • Revenue declines except Hasbro Gaming due to COVID-19 related store closur
Slide 17: U.S. & Canada Segment Net Revenues & Operating Profit (Six Months)
U.S. & Canada Segment Net Revenues & Operating Profit SIX MONTHS -9% Pro Forma $150 -20% 2019 $1,000 $868 $120 2020 $788 $96 $750 $100 -9% $ Millions, unaudited $500 $50 $250 $- $- NET REVENUES OPERATING PROFIT • Revenue declines due to COVID-19 temporary store closures, product shortages and retail
Slide 18: International Segment Net Revenues & Operating Profit (Loss) (Q2)
International Segment Net Revenues & Operating Profit (Loss) SECOND QUARTER -34% Pro Forma $400 $377 2019 2020 $ Millions, unaudited $300 $250 -9% >-100% >12% $200 $100 $15 $(25) $- $- NET REVENUES OPERATING PROFIT (LOSS) • Revenue declines in all regions (Latin America most meaningful) due to COVID
Slide 19: International Segment Net Revenues & Operating Loss (Six Months)
International Segment Net Revenues & Operating Loss SIX MONTHS -24% Pro Forma 2019 $750 $660 2020 $ Millions, unaudited $500 -9% $500 >-100% $- $250 $(16) $(52) $- $- NET REVENUES OPERATING LOSS • Revenue declines in all regions (Latin America most meaningful) due to COVID-19 temporary store closure
Slide 20: International Segment Net Revenues
International Segment Net Revenues Six Months Q2 2020 2020 Six Months AS Q2 2020 AS 2020 REPORTED ABSENT FX REPORTED ABSENT FX EUROPE -22% -20% -10% -8% LATIN AMERICA -64% -57% -57% -50% ASIA PACIFIC -31% -28% -25% -23% TOTAL -34% -31% -24% -21% INTERNATIONAL Foreign Exchange had a negative $12M imp
Slide 21: Entertainment, Licensing & Digital Segment (Q2)
Entertainment, Licensing & Digital Segment Net Revenues & Operating Profit SECOND QUARTER Pro Forma -7% 2019 >100% 2020 $150 $50 -9% $ Millions, unaudited $97 $90 $28 $75 $25 $8 $- $- NET REVENUES OPERATING PROFIT • EL&D revenues declined due to lower revenues from consumer products as well as lower
Slide 22: Entertainment, Licensing & Digital Segment (Six Months)
Entertainment, Licensing & Digital Segment Net Revenues & Operating Profit SIX MONTHS As Adjusted Pro Forma As +42% 2019 -8% Reported -13% $54 2020 $200 $189 $50 $174 -9% 2020 $38 Adj. $ Millions, unaudited $150 $33 $100 $25 $50 $- $- NET REVENUES OPERATING PROFIT • EL&D revenues declined due to low
Slide 23: eOne Segment Net Revenues & Operating Profit (Loss) (Q2)
eOne Segment Net Revenues & Operating Profit (Loss) SECOND QUARTER Pro Forma 2019 As -30% Adjusted 2019 Adj. $600 +28% 2020 $500 $50 2020 Adj. $400 $17 $ Millions, unaudited $13 $300 $231 $(28) $(6) $200 $161 $- $100 $- NET REVENUES $(50) OPERATING PROFIT (LOSS) • Revenues declined due in TV & Film
Slide 24: eOne Segment Net Revenues & Operating Profit (Loss) (Six Months)
eOne Segment Net Revenues & Operating Profit (Loss) SIX MONTHS -28% Pro Forma 2019 $697 As Adjusted 2019 Adj. $600 $503 -44% 2020 $500 $200 $153 2020 Adj. $400 $ Millions, unaudited $150 $300 $86 $100 $76 $200 $100 $50 $(39) $- $- NET REVENUES $(50) OPERATING PROFIT (LOSS) • Revenues declined due to
Slide 25: Second Quarter & Six Months Net Earnings (Loss)
Second Quarter & Six Months Net Earnings (Loss) $100 SECOND QUARTER SIX MONTHS $275 $75 $180 $0.54 $175 $50 PER DILUTED $0.25 $1.31 SHARE $0.02 PER PER $ Millions, unaudited PER DILUTED DILUTED SHARE DILUTED $80 SHARE $75 SHARE $0.59 PER $(43) $34 $(34) $3 $(104) DILUTED SHARE $- LOSS OF LOSS OF $0.
Slide 26: Family Brands: Strong Demand for Content Remains
Q2 2020 Performance Family Brands: Strong Demand for Content Remains; Revenues impacted by COVID-19 Shutdowns • Q2 2020 Revenue: $29M versus $41M in Q2 2019 • Strong demand for animated content across all platforms • Renewals of Peppa Pig series on Chinese SVOD platforms • Production continues on an
Slide 27: Television, Film & Music: Strong Demand for Content
Q2 2020 Performance Television, Film & Music – Strong Demand for Content and Active Development Pipeline • Negative impact to revenues due to ongoing production lockdowns, theatrical closures and no live events • Approximately 100 active development projects in television and over 60 projects in the
Slide 28: Key Cash Flow & Balance Sheet Data
Key Cash Flow & Balance Sheet Data YEAR TO DATE ENDED $ Millions, unaudited JUNE 28, 2020 JUNE 30, 2019 NOTES Substantial cash on hand and access to cash through Cash $1,038 $1,151 $1.5B revolving credit facility Long-term Debt $4,803 $1,696 Reflects eOne acquisition financing completed in 2019 Depr
Slide 29: Returning Cash to Shareholders: Committed to Paying a Dividend
Returning Cash to Shareholders: Committed to Paying a Dividend DIVIDEND GROWTH - 10% $3.00 8% 11% $2.50 12% 11% 10-YEAR $2.00 7% CAGR 8% 11% $1.50 20% 20% 25% $1.00 $0.50 $- 2010 2011 2012* 2013* 2014 2015 2016 2017 2018 2019 2020 $93.1M Long-Term Board Authorized Paid in $0.68 Dividend Commitment t
Slide 30: Our commitment to CSR
Our commitment to CSR reflects our desire to help build a safer, more sustainable and inclusive company and world for all. Product Safety Environmental Human Rights & Diversity & Sustainability Ethical Sourcing Inclusion 100 Most Sustainable Companies 30
Slide 31: Innovation
INNOVATION products built on proprietary consumer insights first-to-market innovation in play patterns across the portfolio of Hasbro owned & partner brands 31
Slide 32: Best Play & Entertainment Experiences: Mission and Values
Our Mission Our Values Create the World’s Community Best Play & Engaging, Purposeful and Giving Creativity Entertainment Curious, Playful and Inventive Experiences Inclusion Diverse, Empowered and United Integrity Responsible, Ethical and Trustworthy Passion Driven, Focused and Courageous 32
Slide 33: Supplemental Financial Information
Supplemental Financial Information 33
Slide 34: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets June 28, 2020 June 30, 2019 ASSETS Cash and Cash Equivalents $ 1,038,016 $ 1,151,042 Accounts Receivable, Net 911,320 805,288 Inventories 564,168 564,769 Prepaid Expenses and Other Current Assets 672,163 308,996 Total Current Assets 3,185,667 2,830,095 Property,
Slide 35: Consolidated Statements of Operations
Consolidated Statements of Operations Quarter Ended Six Months Ended % Net % Net % Net % Net June 28, 2020 Revenues June 30, 2019 Revenues June 28, 2020 Revenues June 30, 2019 Revenues Net Revenues $ 860,279 100.0% $ 984,537 100.0% $ 1,965,849 100.0% $ 1,717,047 100.0% Costs and Expenses: Cost of Sa
Slide 36: Condensed Consolidated Cash Flows
Condensed Consolidated Cash Flows Six Months Ended June 28, 2020 June 30, 2019 Cash Flows from Operating Activities: Net (Loss) Earnings $ (100,708) $ 40,160 Non-Cash Pension Charge — 110,777 Other Non-Cash Adjustments 366,850 108,533 Changes in Operating Assets and Liabilities (7,803) 76,806 Net Ca
Slide 37: Supplemental Financial Data: Pro Forma Segment Results
SUPPLEMENTAL FINANCIAL DATA PRO FORMA SEGMENT RESULTS (Unaudited) (Thousands of Dollars) For comparability, the quarter and six months ended June 30, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma adjustments.
Slide 38: Supplemental Financial Data: Pro Forma Segment Results by Region and Category
SUPPLEMENTAL FINANCIAL DATA PRO FORMA SEGMENT RESULTS (Unaudited) (Thousands of Dollars) For comparability, the quarter and six months ended June 30, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma adjustments.
Slide 39: Reconciliation of As Reported to Pro Forma Adjusted Operating Results
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS (Unaudited) (Thousands of Dollars) For comparability, the quarter and six months ended June 30, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Fo
Slide 40: Reconciliation of Operating Profit (Loss) Results, Quarter
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS (Unaudited) (Thousands of Dollars) For comparability, the quarter and six months ended June 30, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Fo
Slide 41: Reconciliation of Operating Results, Six Months
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS (Unaudited) (Thousands of Dollars) For comparability, the quarter and six months ended June 30, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Fo
Slide 42: Reconciliation of 2019 As Reported to Pro Forma Results (Quarter)
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF 2019 AS REPORTED TO PRO FORMA RESULTS (Unaudited) (Thousands of Dollars) Pro forma results were prepared by combining the results of Hasbro and eOne for the quarter ended June 30, 2019, after giving effect to the eOne Acquisition as if it had been consum
Slide 43: Reconciliation of 2019 As Reported to Pro Forma Results (Six Months)
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF 2019 AS REPORTED TO PRO FORMA RESULTS (Unaudited) (Thousands of Dollars) Pro forma results were prepared by combining the results of Hasbro and eOne for the six months ended June 30, 2019, after giving effect to the eOne Acquisition as if it had been con
Slide 44: Reconciliation of Net Earnings and Earnings per Share
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) Thousands of Dollars & Shares, Except Per Share Data For comparability, the first quarter of 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" f
Slide 45: Reconciliation of EBITDA
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) Thousands of Dollars & Shares, Except Per Share Data For comparability, the first quarter of 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" f
Slide 46: eOne FY2019 Results of Operations
SUPPLEMENTAL FINANCIAL DATA eOne - FY2019 RESULTS OF OPERATIONS (AS REPORTED UNDER US GAAP) (Unaudited) (Thousands of Dollars) Quarter Ended Year Ended September March 2019 June 2019 2019 December 2019 December 2019 Net Revenues (1) $ 466,212 $ 231,091 $ 283,310 $ 235,160 $ 1,215,773 Costs and Expen
Slide 47: eOne FY2019 Non-GAAP Adjustments
SUPPLEMENTAL FINANCIAL DATA eOne - FY2019 RESULTS OF OPERATIONS (AS REPORTED UNDER US GAAP) (Unaudited) (Thousands of Dollars) Non-GAAP Adjustments Quarter Ended Year Ended September December December March 2019 June 2019 2019 2019 2019 Restructuring and Related Charges $ 11,275 $ 7,373 $ 3,234 $ 11
Slide 48: FY2019 Pro Forma and As Reported Net Revenues by Brand Portfolio
SUPPLEMENTAL FINANCIAL DATA FY2019 PRO FORMA AND AS REPORTED NET REVENUES BY BRAND PORTFOLIO (Unaudited) (Thousands of Dollars) The following unaudited quarterly pro forma brand portfolio net revenue information presents the combination of the historical quarterly brand portfolio revenue of Hasbro a