Masco Corporation · NYSE:MAS
Masco — Q4 2024 Earnings Presentation
30 slides from Masco's earnings presentation, Feb 11, 2025
Slide 1: Fourth Quarter and Full Year 2024 Earnings Presentation
Fourth Quarter and Full Year 2024 Earnings Presentation February 11, 2025
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 1 Summary of Results Keith Allman 2 Financial / Operations Review Rick Westenberg 3 Q&A Keith Allman Rick Westenberg 3
Slide 4: Summary of Results
1 Summary of Results Keith Allman 4
Slide 5: 2024 Key Operational Accomplishments
2024 Key Operational Accomplishments Clarifi™ Shower Filter Clarifi™ Tankless Reverse AXOR ShowerSelect AXOR Citterio C Osmosis System 2024 Behr PRO Sales > $900 million 5 FreshWater® IQ Sauna360 Integration Behr PRO
Slide 6: Q4 2024 Review
Q4 2024 Review Top line decreased 3%, but increased 1% excluding impacts of our divestiture and currency Continued to drive cost savings and efficiencies across operations Improved adjusted operating profit by $19 million or 7% Expanded margins in both segments resulting in overall adjusted operatin
Slide 7: Full Year 2024 Review
Full Year 2024 Review Top line decreased 2% with lower volume/mix, partially offset by pricing actions Grew adjusted gross margin 110 bps to 36.3% Expanded adjusted operating profit margin 70 bps to 17.5% Drove adjusted EPS growth of 6% to $4.10 per share Delivered return on invested capital of ~44%
Slide 8: Financial Targets
Financial Targets Full Year 2025 Adjusted EPS • In the range of $4.20 - $4.45 per share Adjusted Operating Profit Margin Targets Segment FY 2025 FY 2026 Plumbing Products ~19-19.5% ~20% Decorative Architectural Products ~19-19.5% ~19-20% Masco ~18% ~18.5% 8
Slide 9: Financial / Operations Review
2 Financial / Operations Review Rick Westenberg 9
Slide 10: Masco Corporation Quarter Highlights
Masco Corporation Fourth Full Quarter Highlights ($ in Millions) Quarter Year 2024 2024 • Total company sales decreased 3%, or Revenue $1,828 $7,828 increased 1% excluding the impacts of Y-O-Y Change (3)% (2)% divestiture and currency • In local currency, North American sales Operating Profit* $291
Slide 11: Plumbing Products Segment
Plumbing Products Segment Fourth Full Quarter Highlights ($ in Millions) Quarter Year 2024 2024 • Total segment sales decreased 1% Revenue $1,189 $4,853 • Currency had a minimal impact Y-O-Y Change (1)% —% • In local currency, North American sales decreased 2% Operating Profit* $200 $920 Y-O-Y Chang
Slide 12: Decorative Architectural Products Segment
Decorative Architectural Products Segment Fourth Full Quarter Highlights ($ in Millions) Quarter Year 2024 2024 • Total segment sales decreased 6% primarily due to our divestiture Revenue $639 $2,975 Y-O-Y Change (6)% (5)% • Paint & other coating products sales increased mid single digits aided by t
Slide 13: Strong Balance Sheet
Strong Balance Sheet Masco Corporation Balance Sheet Metrics as of 12/31/2024 Cash and cash investments $634M Revolver availability $1,000M Total liquidity $1,634M Gross debt to EBITDA1 1.9x Working capital as a % of sales1 15.1% Free cash flow conversion rate1 96% 1. See Appendix for reconciliation
Slide 14: Full Year 2025 Outlook
Full Year 2025 Outlook 2025 Forecasted Adjusted EPS $4.20 - $4.45 Assumptions: • 2025 guidance includes the impact of the recently enacted China tariffs, net of mitigation actions, but not does not include potential future tariffs • Global repair and remodel market: flat to down low single digits ◦
Slide 15: Q&A
3 Q&A Keith Allman Rick Westenberg 15
Slide 16: Appendix
as O Cc o or or << MASCO
Slide 17: 2025 Assumptions
2025 Assumptions Item Assumption Tax rate 24.5% General corporate expense ~$100m Interest and other expense ~$105m Capital expenditures ~$175m (includes maintenance capex of ~$75m) Depreciation and amortization1 ~$150m Unfavorable foreign currency translation impact ~$70m to sales2 Share repurchase
Slide 18: Capital Allocation Strategy
Capital Allocation Strategy Balanced Approach to Continue to Drive Shareholder Value • Capex: 2-2.5% of sales 1 Reinvest in the Business • Working capital: ~16% of sales 2 Maintain investment grade credit rating • Target gross debt to EBITDA below 2.5x • Board declared a quarterly dividend of $0.31,
Slide 19: Long-Term Outlook
Low ticket, repair and remodel products provide LONG-TERM OUTLOOK growth and stability through Average annual sales growth an economic cycle • Organic: ~3-5% • Acquisition: ~1-3% Operating profit margin Market-leading brands, • Expand margins through cost productivity history of innovation, and volu
Slide 20: 2024 Segment Mix
2024 Segment Mix* Total Geographic Business Segment 2024 Revenue R&R% vs. NC NA% v. Int’l Revenue Split Plumbing Products $4.9B 83% 68% Decorative Architectural $3.0B 97% 100% Products Total Company $7.8B 88% 80% R&R = % of sales to repair NA = % of sales within and remodel channels North America NC
Slide 21: 2024 Channel Mix
2024 Channel Mix* 2024 Channel Mix as a Percentage of Sales Plumbing Decorative Architectural Total Channel Products Products Masco Retail 19% 88% 46% Wholesale/trade/dealer 52% 8% 35% E-commerce 18% 4% 12% Specialty Dealer/Other 11% 0% 7% *Based on Company estimates 21
Slide 22: Profit Reconciliations – Fourth Quarter
Profit Reconciliations – Fourth Quarter ($ in Millions) Q4 2024 Q4 2023 Net sales $ 1,828 $ 1,882 Gross profit, as reported $ 635 $ 653 Rationalization charges 1 7 Gross profit, as adjusted $ 636 $ 660 Gross margin, as reported 34.7 % 34.7 % Gross margin, as adjusted 34.8 % 35.1 % Selling, general a
Slide 23: Profit Reconciliations – Full Year
Profit Reconciliations – Full Year ($ in Millions) 2024 2023 Net sales $ 7,828 $ 7,967 Gross profit, as reported $ 2,831 $ 2,836 Rationalization charges 7 9 Insurance settlement (1) — (40) Gross profit, as adjusted $ 2,838 $ 2,805 Gross margin, as reported 36.2 % 35.6 % Gross margin, as adjusted 36.
Slide 24: EPS Reconciliation – Fourth Quarter
EPS Reconciliation – Fourth Quarter ($ in Millions, Except per Common Share Data) Q4 2024 Q4 2023 Income before income taxes, as reported $ 258 $ 233 Rationalization charges 1 10 Impairment charge for other intangible assets — 15 Loss on sale of business (1) 8 — Income before income taxes, as adjust
Slide 25: EPS Reconciliation – Full Year
EPS Reconciliation – Full Year ($ in Millions, Except per Common Share Data) 2024 2023 2019 Income from continuing operations before income taxes, as reported $ 1,161 $ 1,238 $ 914 Rationalization charges 9 13 13 Impairment charge for other intangible assets — 15 9 Loss on sale of business (1) 88 —
Slide 26: Return on Invested Capital Reconciliation
Return on Invested Capital Reconciliation Return on Invested Capital Reconciliation ($ in Millions) December 31, 2024 Operating profit, as adjusted $ 1,372 Tax at 24.5% rate (336) Operating profit after income taxes, as adjusted $ 1,036 Average invested capital Average shareholders' equity 23 Averag
Slide 27: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Free Cash Flow Reconciliation ($ in Millions) Year Ended December 31, 2024 Net cash from operating activities $ 1,075 Less: Capital expenditures (168) Free cash flow 907 Income before income taxes, as adjusted $ 1,257 Tax at 24.5% rate (308) Net income, as adjusted (inc
Slide 28: EPS Outlook Reconciliation
EPS Outlook Reconciliation 2025 Low End High End Net income per common share $ 4.20 $ 4.45 Rationalization charges — — Net income per common share, as adjusted $ 4.20 $ 4.45 Amounts may not add due to rounding. 28
Slide 29: Gross Debt to EBITDA Reconciliation
Gross Debt to EBITDA Reconciliation December 31, 2024 Debt $ 2,948 TTM December 31, 2024 Operating profit, as reported $ 1,363 Rationalization charges 9 Operating profit, as adjusted $ 1,372 Depreciation and amortization 150 EBITDA, as adjusted $ 1,522 Debt to EBITDA 1.9 x Amounts may not add due to
Slide 30: Working Capital as a % of Sales
Working Capital as a % of Sales As Reported (in Millions) December 31, 2024 Receivables $ 1,035 Inventories 938 Less: Accounts payable (789) Working Capital $ 1,184 Net sales $ 7,828 Working capital as a % of sales 15.1 % Amounts may not add due to rounding. 30