Acco Brands Corporation · NYSE:ACCO
Acco Brands — Q3 2024 Earnings Presentation
23 slides from Acco Brands's earnings presentation, Nov 1, 2024
Slide 1: ACCO Brands 3Q Earnings Conference Call
ACCO Brands | 3Q Earnings Conference Call | November 1, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained herein, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, strategies, business operations and similar matters, results of operations, liquidity and financial condition, a
Slide 3: Reg. G – Non-GAAP Financial Measures
Reg. G – Non-GAAP Financial Measures An explanation of how we calculate each of our Non-GAAP financial measures and a reconciliation of our current period and historical non-GAAP financial measures to the most directly comparable GAAP financial measures can be found at the end of this presentation.
Slide 4: ACCO Brands (NYSE: ACCO) Snapshot
ACCO Brands (NYSE: ACCO) Snapshot DIVERSIFIED GLOBAL LEADING CONSUMER PRODUCTS COMPANY Collection of Iconic Brands 2023 Key Statistics Free Cash Flow and Capital Allocation • Consistent generator of Free Cash Flow $1.8B 11.2% • Consolidated leverage ratio of 3.5x at end of 3Q 2024 Adj. Operating Net
Slide 5: 3Q 2024 Highlights
3Q 2024 Highlights • Sales and adjusted EPS in line with outlook, rate of sales decline improved compared to first half of the year • Lower sales in Latin America due to timing of back-to-school shipments and macroeconomic factors • Replenishment for Back-to-school in North America was soft • Noteta
Slide 6: Multi-Year Cost Reduction Program
Multi-Year Cost Reduction Program Program Targeting At Least $60M in Cost Savings • Realized $15M year-to-date in cost savings; on track to deliver more than $20M in cost savings for FY24 • Program incorporates initiatives to simplify and delayer the Company’s operating structure and reduce costs o
Slide 7: Financial Results for 3Q 2024
Financial Results for 3Q 2024 Three Months Nine Months 3Q 2024 Commentary $ in millions Q3 2024 Q3 2023 % Chg Q3 2024 Q3 2023 % Chg Net Sales $420.9 $448.0 (6.0%) $1,218.1 $1,344.2 (9.4%) • Comparable sales down 5%, excluding impact of foreign exchange Gross Profit $136.9 $144.8 (5.5%) $399.9 $428.3
Slide 8: 3Q Segment Financial Metrics
3Q Segment Financial Metrics Segment Commentary 3Q 2024 3Q 2023 Y/Y Change $ in millions • Rate of sales decline improved in both segments versus first ACCO Brands Americas half of the year • Technology accessories category grew in both segments Sales $259.1 $284.4 (8.9%) • Computer accessories impr
Slide 9: 3Q 2024 Margin Reconciliation
3Q 2024 Margin Reconciliation Change vs. Items of 3Q 2024 Bps Prior Year Significant Impact Gross Profit $136.9M ($7.9M) Pricing/Product Cost (40) Cost Savings 110 Gross Margin 32.5% +20 Bps Volume (20) FX/Other (30) SG&A $92.2M ($6.6M) Cost Savings (80) Sales Deleverage 110 SG&A Margin 21.9% (20 bp
Slide 10: Free Cash Flow
Free Cash Flow 1Q 2Q 3Q YTD YTD Change Free Cash Flow Commentary $ in millions* 2024 2024 2024 2024 2023 vs 2023 Net cash provided by operations 28 (26) 93 96 71 25 • Consistent generator of free cash flow Additions to PP&E (2) (3) (4) (9) (10) 1 • Seasonally weighted toward second half of the year
Slide 11: Capital Structure
Capital Structure ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 22 SOFR + CSA3 + 200 bps, 35 bps unused 6.72% USD Term Loan A 73 SOFR + CSA3 + 200 bps 6.94% EUR Term Loan A 206 EURIBOR + 200 bps 5.35% AUD Term Loan A 31 Australian BBSR + 200 bps 6.48%
Slide 12: Full Year 2024 Outlook
Full Year 2024 Outlook Guidance FY2024 Reported Net Sales Growth (9.0%) to (8.0%) Reported Net Sales* $1.670 to $1.690 billion FX Impact on Sales* Approximately 0.0% Comparable Sales Growth (9.0%) to (8.0%) Adjusted EPS $1.04 to $1.09 Free Cash Flow Approximately $130 million Adjusted Tax Rate Appro
Slide 13: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy Capital Allocation Debt Reduction Shareholder Returns More balanced capital allocation approach Declared $0.075 per share quarterly Net debt down $83M year-over-year as balance sheet improves dividend on October 25th $22M in dividends paid year-to-date Free c
Slide 14: Appendix
Appendix 1
Slide 15: Who is ACCO Brands?
Who is ACCO Brands? • Diversified Global Consumer Products Company • Iconic Leading Brands Generate Significant Annual Sales • Strong Customer Partnerships with Largest Retailers • Product And Geographically Diverse • Consistent Free Cash Flow Generator • 6% Annualized Dividend Yield* • Focused on D
Slide 16: Iconic Collection of Brands Drive Market Leading Positions
Iconic Collection of Brands Drive Market Leading Positions 12 BRANDS ACCOUNT FOR $1.3 BILLION IN ANNUAL SALES AMERICAS INTERNATIONAL #1 #1 #1 #1 #1 #1 #1 #1 PowerA Third Five Star Back- Tilibra Student Barrilito Back- Leitz Leitz and Rapid Leitz Organization Spirax Student Party Controllers to-Schoo
Slide 17: Diversified Product Categories
Diversified Product Categories PRODUCT PRODUCT % OF KEY BRANDS GROUP CATEGORIES 2023 SALES Tech Gaming and 17% Accessories Computer Accessories Learning & Note-taking, Boards, Art Products and Writing 30% Creative Stapling, Laminating, Tools, Business Shredding, Filing and Organization, 53% Essentia
Slide 18: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Our non-GAAP financial measures include the following: Comparable Sales: Represents net sales excluding the impact of material acquisitions, if any, with current-period foreign operation sales translated at prior-year currency rates. We believe comparable sales are
Slide 19: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) The following tables set forth a reconciliation of certain Consolidated Statements of Income (Loss) information reported in accordan
Slide 20: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) The following tables set forth a reconciliation of certain Consolidated Statements of Income (Loss) information reported in accordan
Slide 21: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Reconciliation of Net (Loss) Income to Adjusted EBITDA (Unaudited) (In millions) ‘The following table sets forth a reconciliation of net loss reported in accordance with GAAP to Adjusted EBITDA. ‘Three months ended Nine months ended Sept
Slide 22: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries ‘Supplemental Business Segment Information and Reconciliation (Unaudited) (In millions) 2023, Changes Tijd Reported Adjusted Operating: Adjusted Adjusted ‘Operating ‘Operating Income Operating Operating Adjusted R loss) NetSalesNetSales“
Slide 23: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries ‘Supplemental Net Sales Change Analysis (Unaudited) Ye Change - Net Sales ‘S Change - Net Sales (in millions) ‘GAAP ‘Non-GAAP ‘GAAP ‘Non-GAAP ‘Comparable Sales Currency kvmpe Sales| Net Sales Change| ‘Change (A) [Net Sales Change| Transl