Slide 1: First Quarter 2024 Earnings Presentation
First Quarter 2024 Earnings Presentation April 24, 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “outlook,” “believe,”
Slide 3: Agenda
Agenda 1 Summary of Results Keith Allman 2 Financial / Operations Review Rick Westenberg 3 Q&A Keith Allman Rick Westenberg 3
Slide 4: Summary of Results
1 Summary of Results Keith Allman 4
Slide 5: Q1 2024 Review
Q1 2024 Review Top line decreased 3% with lower volumes partially offset by our Sauna360 acquisition in Q3 2023 and pricing actions Grew adjusted gross margin 210 bps to 35.7% Expanded adjusted operating profit margin 90 bps to 16.7% Achieved adjusted EPS growth of 8% to $0.93 per share Repurchased
Slide 6: Financial / Operations Review
2 Financial / Operations Review Rick Westenberg 6
Slide 7: Masco Corporation First Quarter Highlights
Masco Corporation First Quarter Highlights ($ in Millions) Quarter 2024 • Total company sales decreased 3% Revenue $1,926 • Acquisitions increased sales by 1% Y-O-Y Change (3%) • In local currency, North American sales decreased 2%, or 3% excluding acquisitions Operating Profit* $322 Y-O-Y Change $1
Slide 8: Plumbing Products Segment
Plumbing Products Segment First Quarter Highlights ($ in Millions) Quarter 2024 • Total segment sales decreased 2% Revenue $1,192 • Acquisitions increased sales by 2% Y-O-Y Change (2%) • In local currency, North American sales decreased 1%, or 4% excluding acquisitions Operating Profit* $228 Y-O-Y C
Slide 9: Decorative Architectural Products Segment
Decorative Architectural Products Segment First Quarter Highlights ($ in Millions) Quarter 2024 • Total segment sales decreased 3% Revenue $734 • Revenue of paints and other coating products Y-O-Y Change (3%) was relatively flat • Both DIY and PRO paint sales were in line with Operating Profit* $125
Slide 10: Strong Balance Sheet
Strong Balance Sheet Masco Corporation Balance Sheet Metrics as of 3/31/2024 Cash and cash investments $368M Revolver availability $951M Total liquidity $1,319M Gross debt to EBITDA1 2.0x Working capital as a % of sales1 18.6% 1. See Appendix for reconciliation. 10
Slide 11: Full Year 2024 Outlook
Full Year 2024 Outlook 2024 Forecasted Adjusted EPS $4.00 – $4.25 2024 Forecasted 2024 Forecasted Adjusted Business Segment Sales Change Operating Profit Margin Plumbing Products +/- Low Single Digits ~18.5% Decorative Architectural Products +/- Low Single Digits ~18% Total Masco +/- Low Single Digi
Slide 12: Q&A
3 Q&A Keith Allman Rick Westenberg 12
Slide 13: Appendix
Appendix 13
Slide 14: 2024 Estimates
2024 Estimates Item Assumption Tax rate 24.5% General corporate expense ~$95m Interest and other expense ~$105m Capital expenditures ~$200m (includes maintenance capex of ~$75m) Depreciation and amortization1 ~$160m Unfavorable foreign currency translation ~$30m impact to sales2 Share repurchase or
Slide 15: Capital Allocation Strategy
Capital Allocation Strategy Balanced Approach to Continue to Drive Shareholder Value • 1 Capex: 2-2.5% of sales Reinvest in the Business • Working capital: ~16.5% of sales 2 Maintain investment grade credit rating • Target gross debt to EBITDA below 2.5x 3 Maintain relevant dividend • • Current annu
Slide 16: Long-Term Outlook
Low ticket, repair and remodel products provide growth and stability through LONG-TERM OUTLOOK an economic cycle Average annual sales growth • Organic: ~3-5% • Acquisition: ~1-3% Market-leading brands, Operating profit margin history of innovation, • Expand margins through cost productivity customer
Slide 17: 2023 Segment Mix
2023 Segment Mix* Business Total Geographic 2023 Revenue R&R% vs. NC NA% v. Int’l Segment Revenue Split Plumbing Products $4.8B 82% 67% 12% Decorative 80% Architectural $3.1B 97% 100% 2% Products 3% 3% Total Company $8.0B 88% 80% North America Europe NA = % of sales within R&R = % of sales to repair
Slide 18: 2023 Channel Mix
2023 Channel Mix* 2023 Channel Mix as a Percentage of Sales Plumbing Decorative Architectural Total Channel Products Products Masco Retail 19% 86% 46% Wholesale/trade/dealer 53% 10% 35% E-commerce 17% 4% 12% Specialty Dealer/Other 11% 0% 7% *Based on Company estimates 18
Slide 19: Profit Reconciliations – First Quarter
Profit Reconciliations – First Quarter ($ in Millions) Q1 2024 Q1 2023 Net sales $ 1,926 $ 1,979 Gross profit, as reported $ 685 $ 669 Rationalization charges (income) (1) 3 (4) Gross profit, as adjusted $ 688 $ 665 Gross margin, as reported 35.6% 33.8% Gross margin, as adjusted 35.7% 33.6% Selling,
Slide 20: EPS Reconciliation – First Quarter
EPS Reconciliation – First Quarter (in Millions, Except per Common Share Data) Q1 2024 Q1 2023 Income before income taxes, as reported $ 289 $ 285 Rationalization charges (income) (1) 3 (3) Realized (gains) from private equity funds - (1) Income before income taxes, as adjusted $ 292 $ 281 Tax at 24
Slide 21: EPS Outlook Reconciliation
EPS Outlook Reconciliation 2024 Low End High End Net income per common share $ 4.00 $ 4.25 Rationalization charges - - Net income per common share, as adjusted $ 4.00 $ 4.25 Amounts may not add due to rounding. 21
Slide 22: Gross Debt to EBITDA Reconciliation
Gross Debt to EBITDA Reconciliation ($ in Millions) March 31, 2024 Debt $ 2,997 ($ in Millions) TTM March 31, 2024 Operating profit, as reported $ 1,351 Rationalization charges 19 Impairment charges for other intangible assets 15 Insurance settlement (1) (40) Operating profit, as adjusted $ 1,345 De
Slide 23: Working Capital as a % of Sales
Working Capital as a % of Sales As Reported (in Millions) March 31, 2024 Receivables $ 1,310 Inventories 1,059 Less: Accounts payable (899) Working Capital $ 1,470 Working capital as a % of sales (last 12 months) 18.6% Amounts may not add due to rounding. 23