Acco Brands Corporation · NYSE:ACCO
Acco Brands — Q2 2023 Earnings Presentation
23 slides from Acco Brands's earnings presentation, Aug 9, 2023
Slide 1: ACCO Brands 2Q Earnings Conference Call
ACCO Brands | 2Q Earnings Conference Call | August 9, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained herein, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, strategies, business operations and similar matters, results of operations, liquidity and financial condition, a
Slide 3: Reg. G – Non-GAAP Financial Measures
Reg. G – Non-GAAP Financial Measures We explain below how we calculate each of our non-GAAP financial measures. This is followed by a reconciliation of our current period and historical non-GAAP financial measures to the most directly comparable GAAP financial measures. We use our non-GAAP financial
Slide 4: 2Q 2023 Key Messages
2Q Tet2023 Key Messages • Delivered net sales in line with expectations; comparable sales down 5% • Better than expected adjusted EPS due to gross margins expanding 450 basis points • Adjusted operating income of $66 million grew 14% year over year • North America sales declined due to difficult com
Slide 5: Executing on 2023 Key Priorities
Executing on 2023 Key Priorities Restoring Profitably Manage SG&A Invest In Gross Manage Spend and Growth Margin Revenue Inventory • Cumulative Impact of • Complementary • Support Long-Term • Prudent Management Price Increases Assortments Innovation of Headcount • Productivity Savings • Targeting Va
Slide 6: Awards and New Product Development
Awards and New Product Development Kensington H3000 Professional Bluetooth® Headset Kensington Pro Fit ® Ergo Trackball Leitz® Kensington QuiteTypeTM Pro Silent Wireless Ergonomic Solutions Legend of Zelda Mechanical Keyboard ACCO Brands has received prestigious design and quality awards for new pro
Slide 7: 2Q 2023 Results Summary
2Q 2023 Results Summary Comparison Versus Prior Year SALES •Volume impacted by global macroeconomic weakness and lower global IT spending versus the prior year •North America sales decline due to difficult comparisons, weaker macroeconomic environment and a more normalized supply chain in 2023 down
Slide 8: 2Q 2023 Segment Financial Metrics
2Q 2023 Segment Financial Metrics Y/Y $ in millions 2Q23 2Q22 Change ACCO Brands North America Sales $292.6 $306.6 (4.6%) Comparable Sales $294.2 $306.6 (4.1%) Adjusted Operating Income $60.7 $57.2 6.1% Adjusted Operating Margin 20.7% 18.7% 200 bps ACCO Brands EMEA Sales $125.7 $137.9 (8.8%) Compara
Slide 9: 2Q 2023 Segment Results Summary
2Q 2023 Segment Results Summary Comparison Versus Prior Year North EMEA International America • Lower sales due to difficult comparisons, weaker • Challenging macroeconomic macroeconomic environment environment led to soft and a more normalized supply consumer and business chain in 2023 • Volume dec
Slide 10: 2Q 2023 Margin Reconciliation
2Q 2023 Margin Reconciliation Change vs. Items of Significant 2Q Prior Year Impact on Adjusted Bps 2023 Adjusted (non-GAAP) Results Gross Profit $164.2M $14.2M Pricing/Product Cost 330 Mix/FX 90 Gross Margin 33.3% +450 Bps Cost Savings 60 Volume (30) SG&A $98.0M ($6.1M) Cost Savings (70) Sales Delev
Slide 11: Adjusted Free Cash Flow
Adjusted Free Cash Flow Change $ in millions* 1Q 2023 2Q 2023 1H 2023 1H 2022 vs 2022 Net cash provided by operations (23) (16) (39) (98) 59 Additions to PP&E (2) (4) (6) (7) 1 Add back contingent consideration -- -- -- 9 (9) payment in operating activities Adjusted free cash flow (25) (20) (45) (96
Slide 12: Capital Structure
Capital Structure ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 164 SOFR + CSA3 + 225 bps, 37.5 bps unused 7.31% USD Term Loan A 82 SOFR + CSA3 + 225 bps 7.41% EUR Term Loan A 224 EURIBOR + 225 bps 5.85% AUD Term Loan A 33 Australian BBSR + 225 bps 6.6
Slide 13: 3Q 2023 Outlook
3Q 2023 Outlook Guidance 3Q 2023 Reported Net Sales Growth 0% to (3%) Reported Net Sales* $470 to $485 FX Impact on Sales* Approximately 4% Comparable Net Sales Growth (4%) to (7%) Adjusted Reported EPS $0.21 to $0.24 FX Impact on Adjusted EPS* $0.02 Comparable EPS $0.19 to $0.22 *Translation impact
Slide 14: Updated Full Year 2023 Outlook
Updated Full Year 2023 Outlook Guidance FY2023 Reported Net Sales Growth (1.0%) to (3.0%) Reported Net Sales* $1.890 to $1.930 billion FX Impact on Sales* Approximately 1.5% Comparable Net Sales Growth (2.5%) to (4.5%) Adjusted EPS Reported $1.08 to $1.12 FX Impact on Adjusted EPS* $0.06 Comparable
Slide 15: 2023 Adjusted EPS Outlook Summary
2023 Adjusted EPS Outlook Summary Improved operational performance and FX, offset by increases in interest costs and tax expense Prior 2023 Adjusted EPS Outlook $1.08 to $1.12 Operational Improvement $0.03 FX* $0.03 Interest Expense ($0.04) Taxes ($0.02) New 2023 Adjusted EPS Outlook $1.08 to $1.12
Slide 16: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy Shareholder Capital Allocation Debt Reduction Returns Disciplined capital allocation 2Q 2023 consolidated leverage $14M in dividends paid year-to- strategy ratio 4.3x date Adjusted Free Cash Flow 2023 end of year leverage ratio improved to ($45M) versus targe
Slide 17: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Our non-GAAP financial measures include the following: Comparable Sales: Represents net sales excluding the impact of material acquisitions, if any, with current-period foreign operation sales translated at prior-year currency rates. We believe comparable sales are
Slide 18: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) dn millions, except per share data) The following tables set forth a reconciliation of certain Consolidated Statements of Income information reported in accordance with
Slide 19: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) Cn millions, except per share data) The following tables set forth a reconciliation of certain Consolidated Statements of Income information reported in accordance with
Slide 20: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of Net Income to Adjusted EBITDA (Unaudited) (in millions) ‘The following table sets forth a reconciliation of net income reported in accordance with GAAP to Adjusted EBITDA. Three months ended Six months ended Sune 30, Ju
Slide 21: Reg G Reconciliations
Reg G Reconciliations Notes to Reconciliations of GAAP to Adjusted Non-GAAP Information and Net Income to Adjusted EBITDA (Unaudited) The adjustments to income tax expense include the effects of other adjustments and discrete tax items. Represents the write off of assets related to a capital project
Slide 22: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries ‘Supplemental Business Segment Information and Reconciliation (Unaudited) (Qn millions) so2s 2022 Change Rane sae Reported Ate! Spee Repered Aiiwed Open ‘Aled Aut Eve Sm ay Ea Gpenie Tee Spe Open eporee ee” —agutet home’ “Easy eprta “Bro
Slide 23: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Net Sales Change Analysis (Unaudited) % Change - Net Sales $ Change - Net Sales (in millions) GAAP Non-GAAP GAAP Non-GAAP ‘Comparable Comparable Net Sales Currency Net Sales Net Sales Currency Net Sales ‘Comparable Change Tr