Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Merger or Acquisition (October 2012)
25 slides from Spectrum Brands's merger presentation, Oct 9, 2012
Slide 1: Acquisition of HHI
Acquisition of October 9, 2012
Slide 2: Forward-Looking Statements
Forward - Looking Statements 2 Certain matters discussed in this presentation and other oral and written statements by representatives of the Company regarding the HHI acquisition and matters such as expected sales, adjusted EBITDA, other measures of financial performance, and the financial impact o
Slide 3: Non-GAAP Measurements
Non - GAAP Measurements 3 Non - GAAP Measurements Management believes that certain non - GAAP financial measures may be useful in certain instances to provide additional meaningful comparison s between current results for the Company, current results for HHI, and current results on a pro - forma bas
Slide 4: Speakers
Speakers 4 ▪ Spectrum Brands ▪ David Lumley – Chief Executive Officer ▪ Hardware & Home Improvement Group ▪ Greg Gluchowski – President
Slide 5: Transaction Overview
Transaction Overview David Lumley DRAFT
Slide 6: Transaction Overview
6 Transaction Overview ' Spectrum Brands, Inc. to acquire Hardware & Home Improvement Group ("HHI") of Stanley Black & Decker for $ 1.4 billion in cash / HHI is leading maker of residential locksets, residential builders’ hardware, and faucets – Transaction also includes assets from Tong Lung, leadi
Slide 7: Transaction rationale and benefits
7 7 x Adds leading maker of residential locksets, residential builders ’ hardware and faucets with #1 positions in key North American markets and portfolio of renowned brands x Increases Spectrum Brands’ top - line growth and margins and is expected to be significantly and immediately accretive to E
Slide 8: Spectrum Brands Overview
Spectrum Brands Overview David Lumley
Slide 9: Spectrum's Diverse, Unrivalled Brand Portfolio
Spectrum’s Diverse, Unrivalled Brand Portfolio 9 Global Batteries Personal Care Small Appliances Global Batteries & Appliances LTM 7/1/12 Net Sales $2.26B; Adjusted EBITDA $ 306M (a)(b) Global Pet Supplies LTM 7/1/12 Net Sales $603M; Adjusted EBITDA $ 105M (a)(b) Home & Garden LTM 7/1/12 Net Sales $
Slide 10: Providing Quality & Value to Retailers and Consumers Worldwide
10 10 Global Batteries & Appliances 61% Global Pet Supplies 21% Home & Garden 18% Global Batteries & Appliances 70% Global Pet Supplies 18% Home & Garden 12% Providing Quality & Value to Retailers and Consumers Worldwide ▪ Net sales and adjusted EBITDA of $3.25 billion and $473 million for LTM 7/1/1
Slide 11: Strong FCF and commitment to reduce debt
Spectrum’s strong FCF and commitment to reduce debt have provided enhanced shareholder value ▪ Track record of using strong free cash flow generation to reduce debt ▪ Proven Integrator: management team successfully integrated Russell Hobbs, exceeding synergy goals as well as more recent add - ons Fu
Slide 12: HHI Business Review
HHI Business Review Greg Gluchowski
Slide 13: HHI Group Overview
13 13 Revenue by Segment (6/30/12 LTM) Revenue by Geography (6/30/12 LTM) HHI Group Overview Est. 1946 Est. 1904 Est. 1946 Est. 1843 Est. 1901 Est. 1947 Est. 1910 Est. 1910 Est. 1946 Est. 1904 Est. 1946 Est. 1843 Est. 1901 Est. 1947 Est. 1910 Est. 1946 Est. 1904 Est. 1946 Est. 1843 Est. 1901 Est. 19
Slide 14: Leading Market Positions
14 14 42% Other 55% 1% 2% 48% Other 52% 39% 1% 6% Other 54% 55 % Other 45% Leading Market Positions HHI Market Shares • Largest tubular lock manufacturer globally • #1 U.S. lockset • #1 Canadian lockset • #1 U.S. luxury hardware • #1 U.S. residential builders’ hardware • #4 U.S. faucets • Large scal
Slide 15: Strong Distribution & Channel Penetration
15 15 Strong Distribution & Channel Penetration Channels To Market Type Of Construction Home Centers Builders, Distributors, Showrooms Residential New Home Construction Repair & Remodel DIY Co - Op & 2 - Step • Large install base • Strong builder relations • Strong big box Retail Presence • Increase
Slide 16: HHI's Growth Opportunities
16 16 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Housing Starts (thousands) Average Historical Starts = 1,480 2010A 2011A 2012E 2013E NAHB Proj
Slide 17: The Combined Company
17 17 The Combined Company David Lumley +
Slide 18: Powerful Roster of Renowned Consumer Brands
Powerful Roster of Renowned Consumer Brands Category Select Key Brands Market Position Consumer batteries #3 (North America / fast growing) #2 (Europe) #1 (Latin America) Electric shaving and grooming #2 (North America, UK, Australia) #2 / #3 (Continental Europe) Electrical personal care products #1
Slide 19: Transaction Significantly Increases Scale and Cash Flow
19 19 $3.2 $4.2 Standalone Combined $473 $661 Standalone Combined Transaction Significantly Increases Scale and Cash Flow… 19 Financial Scale – LTM 7/1/12 +30% Revenue ($mm) Adjusted EBITDA ($mm) (a)(b) +40% (a) See table on slide 25 for reconciliation of non - GAAP metrics. Includes results of Tong
Slide 20: Product Breadth and Product Diversification
20 20 …Product Breadth and Product Diversification… 20 Product Diversification Geographic Balance LTM 7/1/12 $3.2B Combined LTM 7/1/12 $4.2B Pre Post Pre Post Batteries & Appliances 70% Pet Supplies 18% Home & Garden 12% Batteries & Appliances 53% Home & Garden 9% Pet Supplies 14% HHI - Faucets 5% H
Slide 21: Improves Channel Mix and Provides Deeper Penetration in Key Accounts
…Improves Channel Mix and Provides Deeper Penetration in Key Accounts… 21 Spectrum 2011 HHI Revenue Breakdown Others: 54% HC #1: 25% HC #2: 21% 2011 SPB Revenue Breakdown Others: 58% #1 Customer: 24% Top 2 - 10 : 18% (including HCs) 2011 Combined Revenue Breakdown #1 Customer: ~19% HC #1: ~8% HC #2:
Slide 22: Enhances Margins with Robust FCF Profile
…And Enhances Margins with Robust FCF Profile 22 7/1/12 LTM Adjusted EBITDA margins 7/1/12 LTM Adjusted EBITDA – Capital Expenditures (b) (a) Includes results of Tong Lung Metal Industry Co. Ltd. for the 12 - months ended 12/31/2011 and excludes synergies. See table on slide 25 for reconciliation of
Slide 23: Transaction rationale and benefits
23 23 x Adds leading maker of residential locksets, residential builders ’ hardware and faucets with #1 positions in key North American markets and portfolio of renowned brands x Increases Spectrum Brands’ top - line growth and margins and is expected to be significantly and immediately accretive to
Slide 24: Appendix
9% Spectrum BRANDS Appendix
Slide 25: Table A: Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
TABLE A: Recon EBITDA jation of GAAP Net Income (Loss) to Adjusted om nn oN opi [ORT] RS] a soe | re | oe | Sere am ||P ER | seses| | ete | [emcee ee as i al fe fs | [PS ca a } 2 3 s : ii ee) E EA 3 Boe ot {8 | a ie foams we ms 5] +o +e a
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