Acco Brands Corporation · NYSE:ACCO
Acco Brands — Q3 2023 Earnings Presentation
20 slides from Acco Brands's earnings presentation, Nov 3, 2023
Slide 1: ACCO Brands 3Q Earnings Conference Call
ACCO Brands | 3Q Earnings Conference Call | November 3, 2023
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: 3Q 2023 Key Messages
3Q Tet2023 Key Messages • Comparable sales down due to weaker global demand, lower global sales of technology accessories and stabilizing return to office trends • Adjusted EPS at high end of guidance range due to gross margin expansion by 400 basis points and tight SG&A cost management • Adjusted o
Slide 5: Executing on 2023 Key Priorities
Executing on 2023 Key Priorities Restoring Profitably Manage SG&A Invest In Gross Manage Spend and Growth Margin Revenue Inventory • Cumulative Impact of • Complementary • Support Long-Term • Prudent Management Price Increases Assortments Innovation of Headcount • Productivity Savings • Targeting Va
Slide 6: 3Q 2023 Results Summary
3Q 2023 Results Summary Comparison Versus Prior Year SALES •Volume impacted by global macroeconomic weakness, contributing to lower global IT spending versus the prior year, and stabilizing return-to- office trends down 8% to $448.0M; •North America sales decline due to tight inventory control by re
Slide 7: 3Q 2023 Segment Financial Metrics
3Q 2023 Segment Financial Metrics Y/Y $ in millions 3Q23 3Q22 Change ACCO Brands North America Sales $218.9 $257.2 (14.9%) Comparable Sales $219.6 $257.2 (14.6%) Adjusted Operating Income $25.5 $25.8 (1.2%) Adjusted Operating Margin 11.6% 10.0% 160 bps ACCO Brands EMEA Sales $126.6 $130.3 (2.8%) Com
Slide 8: 3Q 2023 Segment Results Summary
3Q 2023 Segment Results Summary Comparison Versus Prior Year North EMEA International America • Lower sales due to a weaker demand environment and tight • Net sales increased modestly, inventory management by • Technology accessories decline stronger year-to-date growth retailers reflecting industry
Slide 9: 3Q 2023 Margin Reconciliation
3Q 2023 Margin Reconciliation Change vs. Items of Significant 3Q Prior Year Impact on Adjusted Bps 2023 Adjusted (non-GAAP) Results Gross Profit $144.8M $7.4M Pricing/Product Cost 360 Cost Savings 90 Gross Margin 32.3% +400 Bps Volume (50) FX/Other (20) SG&A $98.8M ($4.2M) Cost Savings (70) Sales De
Slide 10: Adjusted Free Cash Flow
Adjusted Free Cash Flow 2023 2022 Change $ in millions* 1Q23 2Q23 3Q23 YTD YTD vs 2022 Net cash provided by operations (23) (16) 110 71 (10) 81 Additions to PP&E (2) (4) (4) (10) (12) 2 Add back contingent consideration -- -- -- 9 (9) payment in operating activities Proceeds from disposition of asse
Slide 11: Capital Structure
Capital Structure ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 68 SOFR + CSA3 + 225 bps, 37.5 bps unused 7.28% USD Term Loan A 80 SOFR + CSA3 + 225 bps 7.66% EUR Term Loan A 213 EURIBOR + 225 bps 6.22% AUD Term Loan A 31 Australian BBSR + 225 bps 6.44
Slide 12: Updated Full Year 2023 Outlook
Updated Full Year 2023 Outlook Guidance FY2023 Reported Net Sales Growth (6.0%) to (7.0%) Reported Net Sales* $1.810 to $1.830 billion FX Impact on Sales* Approximately 0% Comparable Sales Growth (6.0%) to (7.0%) Adjusted EPS Reported $1.03 to $1.07 FX Impact on Adjusted EPS* $0.03 Comparable EPS $1
Slide 13: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy Shareholder Capital Allocation Debt Reduction Returns Disciplined capital allocation Announced $0.075 per share 3Q 2023 consolidated leverage strategy with a long-term more quarterly dividend on ratio 3.8x balanced view October 27th Adjusted Free Cash Flow 20
Slide 14: 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 15: 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 16: 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 sct forth a reconciliation of certain Consolidated Statements of Income (Loss) information reported in accorda
Slide 17: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsi Reconciliation of (In millions) ‘The following table sets forth a reconciliation of net income (loss) reported in accordance with GAAP to Adjusted EBITDA. jaries Income (Loss) to Adjusted EBITDA (Unaudited) % Change Or Net income (loss) NM NM S
Slide 18: Reg G Reconciliations
Reg G Reconciliations Notes to Reconciliations of GAAP to Adjusted Non-GAAP Information and Net Income (Loss) to Adjusted EBITDA (Unaudited) ‘A. The income tax impact of the non-GAAP adjustments and other discrete tax items. B. Represents the write off of assets related to a capital project. CC. Rep
Slide 19: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Business Segment Information and Reconciliation (Unaudited) (in millions) 2023 2022 Changes Tajasted Tajosted Keported ‘Advusted Operating Reported Adjusted Operating Adjusted Adjusted Operating Operating Income Operating Op
Slide 20: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Net Sales Change Analysis (Unaudited) % Change - Net Sales ‘S$ Change - Net Sales (in millions) GAAP Non-GAAP GAAP Non-GAAP ‘Comparable ‘Comparable Currency Net Sales Net Sales ‘Currency Net Sales ‘Comparable Change ‘Transla