Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Raymond James 41st Annual Institutional Investors Conference (March 2020)
28 slides from Spectrum Brands's conference presentation, Mar 2, 2020
Slide 1: Raymond James 41st Annual Institutional Investors Conference
Raymond James 41st Annual Institutional Investors Conference David Maura, Chairman and Chief Executive Officer Jeremy Smeltser, Chief Financial Officer March 2, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain matters discussed in this presentation, with the exception of historical matters, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding our
Slide 3: Reconciliation of Non-GAAP Financial Measurements
Reconciliation of Non-GAAP Financial Measurements Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Within this presentation, including the table
Slide 4: David Maura, Chairman and Chief Executive Officer
David Maura Chairman and Chief Executive Officer
Slide 5: The New Spectrum Brands 2019 Financials
The New Spectrum Brands 2019 Financials(1) Net Sales $3.8 billion Adjusted EBITDA(2) $567 million Hardware & Home Improvement Global Pet Care 36% of Net Sales 23% of Net Sales 45% of Adjusted EBITDA(2) 25% of Adjusted EBITDA(2) Home & Personal Care Home & Garden 28% of Net Sales 13% of Net Sales 15%
Slide 6: Who We Are
Who We Are DIVERSE BUSINESS UNITS GEOGRAPHIC CONCENTRATION PRODUCT CONCENTRATION* Top 15 Brands = 80% of FY19 Revenue Hardware & Home Improvement 36% of Net Sales 45% of Adjusted EBITDA* Home & Personal Care 28% of Net Sales 15% of Adjusted EBITDA* aa Global Pet Care 23% of Net Sales 25% of Adjusted
Slide 7: Spectrum 20/20
Spectrum 20/20 Culture of Sustainable Cash Flow Accountability Focus Customer-Driven with Operational Outstanding Service Excellence Experienced Invest in the Future Leadership Team of Our Businesses 7
Slide 8: 2019 Progress: Leverage Reduced, Targets Attained and Value Delivered
2019 Progress: Leverage Reduced, Targets Attained and Value Delivered RETURNING CASH NET LEVERAGE $567M TO SHAREHOLDERS (USD Millions) 5.2 Adjusted E B I T D A $85.5 $94.2 near midpoint of Guidance 3.1 +1.4% $228 $269 Organic FY 2018 9/30/18 FY 2019 9/30/19 Sales Growth FY 2018 Repurchase FY 2019 Di
Slide 9: 2020 Targets
2020 Targets $570M RETURNING CASH NET LEVERAGE TO SHAREHOLDERS - 5.2 $590M • Executed $125M ASR in Q1 2020 Adjusted 3.5-4X 3.1 E B I T D A • $81M of open market repurchases in Q1 2020 $240M • ~$544M remaining - authorization $260M • Available Option: ~$270M* of Energizer FY 2018 FY 2019 FY 2020 Adju
Slide 10: Business Initiatives
Business Initiatives Global Productivity Improvement Plan (GPIP) Establish new operating model to drive efficiency & effectiveness Enhance business tools to facilitate top-line growth Expect to generate at least $100 million of run-rate savings within 15 to 18 months to reinvest in growth-focu
Slide 11: Our Commitment to Environmental, Social and Governance (ESG)
Our Commitment to Environmental, Social and Governance (ESG) OUR 2019 RESULTS OUR 2022 GOALS ENERGY WATER ENERGY WATER 8% 11% 3% 3% Reduction of our carbon To improve our water Per revenue energy Decrease per USD revenue footprint year over year on efficiency by, on a per reduction(1) in water withd
Slide 12: Jeremy Smeltser, Chief Financial Officer
Jeremy Smeltser Chief Financial Officer
Slide 13: Hardware & Home Improvement
Hardware & Home Improvement Hardware & Home Improvement 36% of Net Sales(1) Leading provider of residential security, builders’ hardware, and plumbing fixtures 45% of Adjusted EBITDA(1) (2) Leading market positions: ‐ #1 in U.S. residential and luxury security 2019 Financials ‐ #1 in U.S. builde
Slide 14: Home & Personal Care
Home & Personal Care Home & Personal Care 28% of Net Sales(1) A global provider of Home and Personal Care appliances 15% of Adjusted EBITDA(1) (2) Leading market positions: ‐ #1 brand in indoor grills worldwide 2019 Financials ‐ #1 brand in toaster ovens, garment care in US ‐ #1 brand in kitchen
Slide 15: Global Pet Care
Global Pet Care Global Pet Care 23% of Net Sales(1) Global Market Leader ‐ #1 in Aquatics 25% of Adjusted EBITDA(1) (2) ‐ #1 in Dog Chews ‐ #1 in Pet Grooming ‐ #1 in Pet Stain & Odor 2019 Financials Large Portfolio of Recognized Brands Net Sales(1) $870 million Diverse & Growing Categories
Slide 16: Home & Garden
Home & Garden Home & Garden 13% of Net Sales(1) Leading provider of consumer pest control solutions in the US 19% of Adjusted EBITDA(1) (2) Leading market positions: ‐ #1 in Outdoor Insect control 2019 Financials ‐ #1 in Mosquito Area Repellents ‐ #1 in Bed Bug control Net Sales(1) $508 million
Slide 17: Investment in Strategic Capabilities Across the Operating Model
Investment in Strategic Capabilities Across the Operating Model to Improve our Competitive Advantage Capability Development Areas Comm Ops GBS Procurement Pursue top-line growth • Deliver decision-making • Deploy advanced sourcing through: support through global tools and tailored category standardi
Slide 18: Comm Ops to Lead the Way To Enable our Businesses and Top-line Growth
Comm Ops to Lead the Way To Enable our Businesses and Top-line Growth Foster more consistent capabilities by developing HHI shared competencies to be leveraged across all business units HPC Develop new capabilities to enhance our speed, agility, and accuracy GPC Invest in key areas to H&G compete ef
Slide 19: Pillars will Work Together to Make a Significant Impact
4 Pillars will Work Together to Make a Significant Impact Across All Businesses 1 2 Data experts who proactively A top-notch internal UNDERSTAND report forward looking agency that enhances ENGAGE indicators and macro consumer journeys strategic insights to to improve digital shape critical engagemen
Slide 20: Launching Mid-March
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Slide 22: David Maura, Chairman and Chief Executive Officer
David Maura Chairman and Chief Executive Officer
Slide 23: Capital Strategy
Capital Strategy LEVERAGE TARGET of 3.5x-4x net debt to EBITDA We intend to allocate capital internally to our highest return 1. ORGANIC GROWTH opportunities: R&D, Innovation, New products and advertising/marketing. Drive vitality and profitable organic growth. We intend to aggressively repurchase o
Slide 24: Key Investment Considerations
Key Investment Considerations LONG-TERM SUSTAINABLE Strong Balance Sheet with Shareholder Friendly Ample Liquidity Capital Allocation GROWTH 2020 Targets • +LSD Net Sales Growth Strong Cash Flow Increased Innovation and • $570M-$590M Adj. EBITDA Generation and Valuable Marketing Investments Growth N
Slide 25: Appendix
Appendix
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted EBITDA Margin
SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Twelve Month Period Ended Sept. 30, 2019 (in millions, except %) HHI HPC GPC H&G Corporate Consolidated Net income (loss) from continuing operations $ 214.6 $ (127.8) $ 63.4 $ 8
Slide 27: Reconciliation of Forecasted Net Income to Adjusted EBITDA
SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF FORECASTED NET INCOME TO ADJUSTED EBITDA (Unaudited) (in millions) F2020 Net income $ 53 - 93 Income tax expense 13 - 23 Interest expense 140 - 150 Depreciation and amortization 145 - 150 EBITDA 366 - 401 Share and incentive based compensation 55 - 60
Slide 28: Spectrum Brands
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