Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Q4 FY2015 Earnings Presentation
32 slides from Prestige Consumer Healthcare's earnings presentation, May 14, 2015
Slide 1: Review of Fourth Quarter and Full Year FY 15 Results
Review of Fourth Quarter and Full Year FY 15 Results May 14, 2015 Exhibit 99.2
Slide 2: Safe Harbor Disclosure
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 2 This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s product expansion and development plans, investments in brand buildin
Slide 3: Agenda for Today's Discussion
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 3 Agenda for Today’s Discussion I. Fourth Quarter FY 15 Performance Highlights II. FY 15 Year in Review III. Financial Overview IV. FY 16 Outlook and the Road Ahead
Slide 4: Fourth Quarter FY 15 Performance Highlights
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 4
Slide 5: Fourth Quarter FY 15 Performance Highlights
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 5 Fourth Quarter FY 15 Performance Highlights Q4 consolidated Revenue of $190.0 million, up 32.9% versus PY Q4 – Organic growth of +2.4%(1) on a constant currency basis, and +1.1% on a reported basis versus PY Q4 Core OTC consumption growth of +7
Slide 6: FY 15 Year in Review
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 6
Slide 7: FY 15: Successful Execution Against Drivers of Long-Term Shareholder Value Creation
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 7 FY 15: Successful Execution Against Drivers of Long-Term Shareholder Value Creation Strong organic growth in Core OTC and international Portfolio strategy achieving desired results Margin expansion and efficiency gains allow for re-investment
Slide 8: Accelerated Core OTC Growth Trends
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 8 5.2% 3.9% (3.5%) 3.5% 7.7% 4.8% (6.9%) 0.4% FY 12 FY 13 FY 14 FY 15 Accelerated Core OTC Growth Trends 5.2% 7.1% (1.8%) 4.1% 8.7% 8.3% (4.9%) 0.9% O rg a n ic Sa les G ro w th C o n s u m p ti o n G ro w th (0.8%) (1.1%) 10.7% 5.8% (2.5%) (4.9%) 4.
Slide 9: FY 15 Core OTC Growth Broad Based Led by Largest Brands
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 9 FY 15 Core OTC Growth Broad Based Led by Largest Brands % of Core OTC Portfolio with Consumption Growth in FY 15 84% 6.0% 13.3% 15.6% 16.2% Q1 Q2 Q3 Q4 Growth of Largest Brands Accelerating 1.6% 2.5% 5.1% 4.6% Q1 Q2 Q3 Q4 Y/Y Retail Sales % Growth
Slide 10: Portfolio Strategy Achieving Desired Results
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 10 Core OTC International Other OTC Household Contribution to Portfolio: # of Brands: Investment: Targeted Mix Over Time(4)(5): FY 15 % Organic Growth: (Constant Currency)(1) Invest for Growth Manage for Cash Flow Generation ~25% of Total Brands ~75%
Slide 11: Margin Expansion and Efficiency Gains Drives Increased A&P Investment
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 11 10.3% 8.6% 7.3% 7.9% 8.0% FY 11 FY 12 FY 13 FY 14 FY 15 52.4% 51.6% 56.3% 56.3% 57.2% FY 11 FY 12 FY 13 FY 14 FY 15 Adjusted Gross Margin(2) Margin Expansion and Efficiency Gains Drives Increased A&P Investment Adjusted G&A % Net Sales(2) $39.3 $5
Slide 12: Increasing Our A&P Spend and Expanding Our Marketing Toolkit
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 12 Increasing Our A&P Spend and Expanding Our Marketing Toolkit In Store Merchandising and Sports Marketing Broad Media Support 3 New and Innovative Products
Slide 13: Little Remedies Differentiation Positions it well for Long-Term Success
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 13 Little Remedies Differentiation Positions it well for Long-Term Success 3 New Products Driving Growth Digital Execution Connecting with Moms Consumption +3.7% in L-26 Weeks; +8.5% in L-12 Weeks Source: IRI multi-outlet + C-Store, L-26 and L-12 per
Slide 14: FY 15 Learnings Are Positioning A $100MM Brand for Growth
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 14 FY 15 Learnings Are Positioning A $100MM Brand for Growth New Marketing Campaign Developing HCP Relationship Letting consumers know that yeast infections are “No Big Deal” because there’s Monistat “Prescription strength cure without the prescripti
Slide 15: Strong and Consistent Cash Flow Leads to Rapid Delevering and Increased M&A Capacity
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 15 Strong and Consistent Cash Flow Leads to Rapid Delevering and Increased M&A Capacity FY 15 FY 16E FY 17E ~$1.5 BN +$2.0 BN ~$0.5 BN Leverage Ratio(3) Illustrative Financing Capacity(6) ~5.6x ~5.2x ~4.4x ~4.0x Q2 FY 15 FY 15 FY 16E FY 17E Reduced
Slide 16: Proven and Repeatable M&A Strategy in Favorable Environment
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 16 Proven and Repeatable M&A Strategy in Favorable Environment Six Acquisitions Completed in Past Five Years for TEV of ~$2BN 5 TEV Acquired by Year ~$190 ~$76 ~$660 ~$50 ~$800 FY 11 FY 12 FY 13 FY 14 FY 15 North American Brands Dollar values in mill
Slide 17: M&A Has Established A Portfolio of Strong Brands
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 17 M&A Has Established A Portfolio of Strong Brands Creating Attractive Category Platforms Sleep Aids Oral Care Skin Care Analgesics GI Women’s Health Cough & Cold Eye & Ear Care 5 International Sales <$50MM
Slide 18: M&A Has Established A Portfolio of Strong Brands
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 18 M&A Has Established A Portfolio of Strong Brands Creating Attractive Category Platforms Sleep Aids Oral Care Skin Care Analgesics GI Women’s Health Cough & Cold Eye & Ear Care 5 International Sales >$100MM
Slide 19: Strategy Has Delivered Consistently Strong Financial Performance
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 19 $88 $134 $204 $252 FY 10 FY 12 FY 14 FY 15 $290 $438 $597 $715 FY 10 FY 12 FY 14 FY 15 Net Sales Strategy Has Delivered Consistently Strong Financial Performance $0.67 $0.99 $1.53 $1.86 FY 10 FY 12 FY 14 FY 15 $59 $67 $130 $164 FY 10 FY 12 FY 14 F
Slide 20: Financial Overview
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 20
Slide 21: Key Financial Results for Fourth Quarter Performance
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 21 Key Financial Results for Fourth Quarter Performance Excellent overall financial performance in the quarter exceeded expectations − Achieved organic growth of 2.4%(1) excluding the impact of foreign currency − Revenue of $190.0 million, an incre
Slide 22: FY 15 Fourth Quarter and Fiscal Year Consolidated Financial Summary
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 22 Mar '15 Mar '14 % Chg Mar '15 Mar '14 % Chg Total Revenue 190.0$ 143.1$ 32.9% 714.6$ 597.4$ 19.6% Adj. Gross Margin 110.1 78.8 39.6% 408.4 336.5 21.4% % Margin 57.9% 55.1% 57.2% 56.3% A&P 25.4 17.5 44.9% 99.7 85.0 17.3% % Total Revenue 13.3% 12.2%
Slide 23: Exceptional Free Cash Flow Trends
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 23 Q4 FY 15 Q4 FY 14 FY 15 FY 14 Net Income - As Reported 23.8$ 16.0$ 78.3$ 72.6$ Depreciation & Amortization 5.8 3.3 17.7 13.5 Other Non-Cash Operating Items 16.3 12.0 46.9 37.4 Working Capital 6.3 (0.6) 13.3 (11.9) Operating Cash Flow 52.1$ 30.7$ 1
Slide 24: FY 16 Outlook and the Road Ahead
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 24
Slide 25: Staying the Strategic Course to Continue Shareholder Value Creation
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 25 Staying the Strategic Course to continue Shareholder Value Creation Continue category platform expansion/development Capitalize on brand opportunities across channels of distribution Prioritize new product development and innovation Little
Slide 26: Key Drivers of Long-Term Shareholder Value
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 26 Key Drivers of Long-Term Shareholder Value Develop a Portfolio of Leading Brands Capitalize on Efficient and Effective Operating Model Deliver Robust and Consistent Free Cash Flow Execute Proven and Repeatable M&A Strategy Portfolio of recogniza
Slide 27: Q&A
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 27 Q&A
Slide 28: Appendix
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 28 Appendix (1) Revenue Growth on a constant currency basis is a Non-GAAP financial measure and is reconciled to its most closely related GAAP financial measure in our earnings release in the “About Non-GAAP Financial Measures” section. (2) Adjusted
Slide 29: Non-GAAP Adjusted G&A and Gross Margin Reconciliation
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 29 2010 2011 2012 2013 2014 2015 GAAP General and Administrative expenses 34,195$ 41,960$ 56,700$ 51,467$ 48,481$ 81,273$ Adjustments Legal and other professional fees associated with acquisitions - 7,729 13,807 98 1,111 10,974 Transition and other a
Slide 30: Non-GAAP Net Income and EPS Reconciliation
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 30 2010 2011 2012 2013 2014 2015 Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS GAAP Net Income 32,115$ 0.64$ 29,220$ 0.58$ 37,212$ 0.73$ 65,505$ 1.27$ 72,615$ 1.39$ 78,260$ 1.49$ Adjustments Income from dis
Slide 31: Non-GAAP EBITDA Reconciliation
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 31 2010 2011 2012 2013 2014 2015 GAAP Net Income 32,115$ 29,220$ 37,212$ 65,505$ 72,615$ 78,260$ Income from Disc Ops 112 (591) - - - - Loss on sale of disc ops (157) 550 - - - - Interest Expense, net 22,935 27,317 41,320 84,407 68,582 81,234 Provisi
Slide 32: Non-GAAP Free Cash Flow Reconciliation
F o u r t h Q u a r t e r & F Y 1 5 R e s u l t s 32 2010 2011 2012 2013 2014 2015 GAAP Net Income 32,115$ 29,220$ 37,212$ 65,505$ 72,615$ 78,260$ Adjustments Adjustments to reconcile net income to net cash provided by operating activities as shown in the statement of cash flows 31,137 26,095 35,674
Prestige Brands Holdings — Q4 FY2015 Earnings Presentation on 6ix