Hasbro, Inc. · NASDAQ:HAS
Hasbro — Q3 2020 Earnings Presentation
40 slides from Hasbro's earnings presentation, Oct 26, 2020
Slide 1: Q3 2020 Earnings
Q3 2020 Earnings OCTOBER 26, 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: Partner factories and Unique Strategy fueled by warehouses are currently open and Q3 2020 Revenues: $1.78B Unmat
Slide 7: Q3 snapshot
REVENUE $1.78B Q3 OPERATING PROFIT $336.6M 2020 As Reported As Adjusted $367.2M NET EARNINGS As Reported $220.9M snapshot As Adjusted $258.9M EPS: NET EARNINGS As Reported $1.61 per diluted share As Adjusted $1.88 per diluted share *The As Adjusted figures are non-GAAP financial measures. A reconcil
Slide 8: 2020 Announcements & Highlights
PARTNER BRAND PARTNER BRAND PARTNER BRAND 2020 ANNOUNCEMENTS & HIGHLIGHTS 8
Slide 9: Third Quarter & Nine Months Net Revenues Performance
Third Quarter & Nine Months Net Revenues Performance THIRD QUARTER NET REVENUES NINE MONTHS NET REVENUES -4% $5,000 -12% $2,000 $1,858 $1,777 $4,273 $4,000 $3,742 $1,500 $3,000 $ Millions, unaudited $1,000 $2,000 $500 $1,000 $- $- 2019 2020 2019 2020 Pro Forma Pro Forma • Growth in toys, games and d
Slide 10: Third Quarter & Nine Months Brand Portfolio Performance
Third Quarter & Nine Months Brand Portfolio Performance 3rd QUARTER 2020 Nine Pro Forma • Consumer demand for Pro Forma Months Nine Months % Hasbro brands and stories (millions of dollars) Q3 2020 Q3 2019 % CHANGE 2020 2019 CHANGE remained strong through the third quarter 2020. • Q3 2020 growth in F
Slide 11: Third Quarter & Nine Months Operating Profit
Third Quarter & Nine Months Operating Profit THIRD QUARTER NINE MONTHS $750 $659 $400 $367 $342 $337 $600 $553 $565 $313 $300 $450 $315 $200 $300 $ Millions, unaudited $100 $150 $- $- 2019 2019 Adj* 2020 2020 Adj* 2019 2019 Adj* 2020 2020 Adj* Pro Forma Pro Forma Operating Profit Margin Q3 2020 Oper
Slide 12: U.S. & Canada Segment Net Revenues & Operating Profit (Q3)
U.S. & Canada Segment Net Revenues & Operating Profit THIRD QUARTER +9% Pro Forma +36% 2019 $977 $1,000 $898 2020 $300 $263 -9% $750 $ Millions, unaudited $194 $200 $500 $100 $250 $- $- NET REVENUES OPERATING PROFIT • Revenue growth in Franchise Brands, led by MAGIC: THE GATHERING, Emerging Brands a
Slide 13: U.S. & Canada Segment Net Revenues & Operating Profit (Nine Months)
U.S. & Canada Segment Net Revenues & Operating Profit NINE MONTHS +14% -- Pro Forma $400 $359 2019 $2,000 $1,767 $1,765 $350 $314 2020 $300 $1,500 $250 -9% $ Millions, unaudited $200 $1,000 $150 $100 $500 $50 $- $- NET REVENUES OPERATING PROFIT • Revenue growth in Hasbro Gaming, other categories dow
Slide 14: International Segment Net Revenues & Operating Profit (Q3)
International Segment Net Revenues & Operating Profit THIRD QUARTER -8% Pro Forma $100 $600 $561 -5% 2019 $517 $67 2020 $500 $75 $64 $ Millions, unaudited $400 -9% $50 $300 $200 $25 $100 $- $- NET REVENUES OPERATING PROFIT • Revenue declines primarily driven by Latin America; Revenue growth in Europ
Slide 15: International Segment Net Revenues & Operating Profit (Nine Months)
International Segment Net Revenues & Operating Profit NINE MONTHS -17% Pro Forma $75 -76% 2019 $1,500 2020 $1,221 $51 $ Millions, unaudited $1,017 -9% $50 $1,000 $- $500 $25 $12 $- $- NET REVENUES OPERATING PROFIT • Revenue declines most meaningful in Latin America; Q3 2020 improvement in European r
Slide 16: International Segment Net Revenues
International Segment Net Revenues Nine Months Nine Q3 2020 2020 Months AS Q3 2020 AS 2020 REPORTED ABSENT FX REPORTED ABSENT FX EUROPE +7% +4% -2% -2% LATIN AMERICA -40% -30% -48% -40% ASIA PACIFIC -9% -10% -19% -18% TOTAL -8% -7% -17% -15% INTERNATIONAL Foreign Exchange had a negative $1M impact o
Slide 17: Entertainment, Licensing & Digital Segment (Q3)
Entertainment, Licensing & Digital Segment Net Revenues & Operating Profit THIRD QUARTER Pro Forma -23% 2019 +33% 2020 $150 $50 $116 -9% $ Millions, unaudited $33 $89 $25 $75 $25 $- $- NET REVENUES OPERATING PROFIT • EL&D revenues declined due to lower film revenue compared to 2019, which included T
Slide 18: Entertainment, Licensing & Digital Segment (Nine Months)
Entertainment, Licensing & Digital Segment Net Revenues & Operating Profit NINE MONTHS As Adjusted Pro Forma As +38% 2019 -14% Reported +5% 2020 $400 $100 $87 -9% 2020 $304 Adj. $ Millions, unaudited $300 $263 $75 $66 $63 $200 $50 $100 $25 $- $- NET REVENUES OPERATING PROFIT • EL&D revenues declined
Slide 19: eOne Segment Net Revenues & Operating Profit (Loss) (Q3)
eOne Segment Net Revenues & Operating Profit (Loss) THIRD QUARTER Pro Forma As Reported 2019 -32% & As As $283 Adjusted Adjusted 2019 Adj. $300 ->100% +x% $45 2020 $50 $193 2020 Adj. $200 $ Millions, unaudited $16 $100 $- $(1) $- $(26) NET REVENUES $(50) OPERATING PROFIT (LOSS) • Revenues declined d
Slide 20: eOne Segment Net Revenues & Operating Profit (Loss) (Nine Months)
eOne Segment Net Revenues & Operating Profit (Loss) NINE MONTHS -29% Pro Forma 2019 $981 As Adjusted 2019 Adj. $1,000 -57% 2020 $800 $697 $250 $198 2020 Adj. $200 $ Millions, unaudited $600 $150 $91 $85 $400 $100 $200 $50 $(65) $- $- $(50) NET REVENUES $(100) OPERATING PROFIT (LOSS) • Revenues decli
Slide 21: Third Quarter & Nine Months Net Earnings
Third Quarter & Nine Months Net Earnings Diluted Shares: $300 THIRD QUARTER $500 NINE MONTHS Q3 2020 137.5M vs. Q3 2019 $259 $419 127.2M $239 $400 $217 $221 $3.04 PER $339 $200 DILUTED $300 SHARE $1.88 $250 $2.47 PER $ Millions, unaudited PER $1.74 DILUTED DILUTED PER SHARE $1.61 PER SHARE $1.57 PER
Slide 22: Key Cash Flow & Balance Sheet Data
Key Cash Flow & Balance Sheet Data YEAR TO DATE ENDED $ Millions, unaudited SEPT 27, 2020 SEPT 29, 2019 NOTES Substantial cash on hand and access to cash through $1.5B Cash $1,132 $1,060 revolving credit facility Long-term Debt $4,778 $1,696 Reflects eOne acquisition financing completed in 2019 Depr
Slide 23: 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 2020 23
Slide 24: 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 24
Slide 25: Supplemental Financial Information
Supplemental Financial Information 25
Slide 26: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Thousands of Dollars) September 27, September 29, 2020 2019 ASSETS Cash and Cash Equivalents $ 1,132,405 $ 1,060,432 Accounts Receivable, Net 1,438,360 1,416,879 Inventories 540,039 589,132 Prepaid Expenses and Other Current Assets 648,158 346,687 Total Current
Slide 27: Consolidated Statements of Operations
Consolidated Statements of Operations ((Thousands of Dollars and Shares, Except Per Share Data) ) Quarter Ended Nine Months Ended September 27, % Net September 29, % Net September 27, % Net September 29, % Net 2020 Revenues 2019 Revenues 2020 Revenues 2019 Revenues Net Revenues $ 1,776,623 100.0% $
Slide 28: Condensed Consolidated Cash Flows
Condensed Consolidated Cash Flows (Thousands of Dollars) Nine Months Ended September 27, September 29, 2020 2019 Cash Flows from Operating Activities: Net Earnings $ 119,275 $ 253,109 Non-Cash Pension Charge - 110,777 Other Non-Cash Adjustments 561,826 204,726 Changes in Operating Assets and Liabili
Slide 29: Supplemental Financial Data: Pro Forma Segment Results
SUPPLEMENTAL FINANCIAL DATA PRO FORMA SEGMENT RESULTS (Unaudited) (Thousands of Dollars) Quarter Ended Nine Months Ended Pro Forma Pro Forma September 27, September 29, % September 27, September 29, % 2020 2019 Change 2020 2019 Change Segment Results U.S. and Canada Segment: External Net Revenues $
Slide 30: Supplemental Financial Data: Net Revenues by Brand Portfolio
SUPPLEMENTAL FINANCIAL DATA PRO FORMA SEGMENT RESULTS (Unaudited) (Thousands of Dollars) For comparability, the quarter and nine months ended September 29, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to Pro Forma Results" for the pro forma adjustm
Slide 31: 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 nine months ended September 29, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Reported to
Slide 32: Reconciliation of Adjusted Operating Results Q3 2020
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS Q3 2020 (Thousands of Dollars) (Unaudited) For comparability, the quarter and nine months ended September 29, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Repo
Slide 33: Reconciliation of Adjusted Operating Results YTD 2020
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF AS REPORTED TO PRO FORMA ADJUSTED OPERATING RESULTS YTD 2020 (Unaudited) (Thousands of Dollars) For comparability, the quarter and nine months ended September 29, 2019 include the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Rep
Slide 34: 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 September 29, 2019, after giving effect to the eOne Acquisition as if it had been c
Slide 35: Reconciliation of 2019 As Reported to Pro Forma Results (Nine 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 nine months ended September 29, 2019, after giving effect to the eOne Acquisition as if it had be
Slide 36: 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 quarter and nine months ended September 29, 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Repor
Slide 37: Reconciliation of EBITDA
SUPPLEMENTAL FINANCIAL DATA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) Thousands of Dollars & Shares, Except Per Share Data For comparability, the quarter and nine months ended September 29, 2019 includes the pro forma results for the eOne Segment. See "Reconciliation of 2019 As Repor
Slide 38: 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 March 2019 June 2019 September 2019 December 2019 December 2019 (1) Net Revenues $ 466,212 $ 231,091 $ 283,310 $ 235,160 $ 1,215,773 Costs and Expen
Slide 39: eOne FY2019 Results of Operations
SUPPLEMENTAL FINANCIAL DATA eOne - FY2019 RESULTS OF OPERATIONS (AS REPORTED UNDER US GAAP) (Unaudited) (Thousands of Dollars) 39 39
Slide 40: 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