Masco Corporation · NYSE:MAS
Masco — Raymond James 39th Annual Institutional Investors Conference (March 2018)
21 slides from Masco's conference presentation, Mar 5, 2018
Slide 1: Raymond James 39th Annual Institutional Investor Conference
Raymond James 39th Annual Institutional Investor Conference John Sznewajs, Chief Financial Officer March 2018
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 The Business Today Strategy for Profitable Growth Future Outlook 3
Slide 4: 2017 Segment Mix
2017 Segment Mix* R&R = % of sales to repair and remodel channels NC = % of sales to new construction channels NA = % of sales within North America Int’l = % of sales outside North America * Based on Company estimates 4
Slide 5: Market Leading Brands
Market Leading Brands MASCO HotSpring’ Every day made better® see what Delta can do- KraftMaid Cabinetry
Slide 6: Innovation Leadership Sustains Growth
Innovation Leadership Sustains Growth Examples of New Products / Technologies – 2014-2017 Delta® Temp2O® Delta Zura® 2017 Showerhead Pendant Shower Revenues Hansgrohe Behr Marquee® Brizo® Behr Granite SelectTM LitzeTM GripTM Coating 75% Collection Coating Collection Existing 25%* Products Behr Kraft
Slide 7: Diversified Business Mix Results in More Stable Revenues
Diversified Business Mix Results in More Stable Revenues Segments* Price Points Channels New Low ticket value ~$20 Big box retail construction 16% Repair / Wholesale / trade remodel 84% Direct-to-builder International High ticket luxury ~$20K 21% E-commerce N. America 79% Specialty dealers * Based o
Slide 8: Fundamentals Support Continued Steady Growth
Fundamentals Support Continued Steady Growth 5 4 International Growth 3 Household Formation 2 Housing Turnover 1 Home Price Appreciation Age of U.S. Housing Stock 8
Slide 9: Agenda
Agenda The Business Today Strategy for Profitable Growth Future Outlook 9
Slide 10: Clear Strategic Focus
Clear Strategic Focus 1 Drive full potential of our businesses 2 Leverage opportunities across our portfolio 3 Actively manage portfolio 10
Slide 11: Kichler Acquisition Expected to Close First Quarter
Kichler Acquisition Expected to Close First Quarter • Large $6 billion, fragmented industry Market • Complementary products to existing portfolio • Sold through similar channels • Strong, well-established brand Company • Focus on design, innovation and customer service • Similar distribution and cus
Slide 12: Agenda
Agenda The Business Today Strategy for Profitable Growth Future Outlook 12
Slide 13: Leverage Revenue Growth with Cost Improvements and Capital Allocation to Drive 23% EPS CAGR
FUTURE OUTLOOK Leverage Revenue Growth with Cost Improvements and Capital Allocation to Drive 23% EPS CAGR Revenue Operating Profit* EPS* ($B) ($B) ($) 5% 9% 23% CAGR CAGR CAGR $1.40 $8.5 $2.83 $7.4 $1.08 $1.51 2016 2019 2016 2019 2016 2019 Note: Future performance reflects company estimates and exc
Slide 14: Strategy Generates Substantial Cash Flow
FUTURE OUTLOOK Strategy Generates Substantial Cash Flow Dividends2 ~$550M Acquisitions & Cash share repurchase Flow of ~$1,700M ~$2.9B Investing in 2017-20191 the business3 ~$650M 1. Expected cash from operations from 2017-2019; reflects the impact of US tax reform which is generally effective in 20
Slide 15: Positioned to Outperform
Positioned to Outperform Growing industry with great macro fundamentals + 2019 CAGR Strong foundation to sustain and improve Targets performance ~5% Revenue + ~9% Operating Profit ~23% EPS Credible, proven plan for profitable growth + Strong cash flow generation and capital management driving value
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: 2018 Guidance Estimates
2018 Guidance Estimates ($ in Millions) 2018 Estimate Rationalization Charges ~ $5 Tax Rate1 ~ 26% General Corporate Expense ~ $85 Interest Expense ~ $157 Increased ‘Other expense’ Due to Change in Pension ~ $17 Expense Accounting Capital Expenditures2 ~ $220 Depreciation & Amortization2 ~ $135 Favo
Slide 19: 2017 Geographic Revenue Split
2017 Geographic Revenue Split* International Sales Accounted for ~21% of Total 2017 Masco Sales *Based on Company estimates 19
Slide 20: Appendix – Operating Profit Reconciliation
Appendix – Operating Profit Reconciliation Year Ended December 31, ($ in Millions) 2016 Operating Profit, as reported $ 1,053 Rationalization charges 22 Operating Profit, as adjusted $ 1,075 20
Slide 21: Appendix – EPS Reconciliation
Appendix – EPS Reconciliation Year Ended December 31, (in millions, except per common share data) 2016 Income before income taxes, as reported $ 830 Rationalization charges 22 (Gain) from private equity funds, net (5) (Earnings) from equity investments, net (2) (Gain) from auction rate securities (3
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