Slide 1: Second Quarter 2024 Earnings Presentation
Second Quarter 2024 Earnings Presentation July 25, 2024
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: Q2 2024 Review
Q2 2024 Review Top line decreased 2% with lower volumes and mix partially offset by our Sauna360 acquisition in Q3 2023 Grew adjusted gross margin 140 bps to 37.6% Achieved adjusted operating profit margin of 19.1% Delivered adjusted EPS growth of 1% to $1.20 per share Repurchased 2 million shares f
Slide 6: Financial / Operations Review
2 Financial / Operations Review Rick Westenberg
Slide 7: Masco Corporation Second Quarter Highlights
Masco Corporation Second Quarter Highlights ($ in Millions) Quarter 2024 • Total company sales decreased 2%, or 1% excluding the impact of currency Revenue $2,091 Y-O-Y Change (2)% • Acquisitions increased sales by 1% • In local currency, North American sales decreased Operating Profit* $399 1%, or
Slide 8: Plumbing Products Segment
Plumbing Products Segment Quarter Highlights Second ($ in Millions) Quarter 2024 • Total segment sales increased 2%, or 3% excluding the impact of currency Revenue $1,253 • Acquisitions increased sales by 2% Y-O-Y Change 2% • In local currency, North American sales increased Operating Profit* $249 5
Slide 9: Decorative Architectural Products Segment
Decorative Architectural Products Segment Quarter Highlights Second ($ in Millions) Quarter 2024 • Total segment sales decreased 7% Revenue $838 • Revenue of paints and other coating products Y-O-Y Change (7)% decreased high single digits • PRO paint sales increased mid single digits Operating Profi
Slide 10: Strong Balance Sheet
Strong Balance Sheet Masco Corporation Balance Sheet Metrics as of 6/30/2024 Cash and cash investments $398M Revolver availability $1,000M Total liquidity $1,398M Gross debt to EBITDA1 2.0x Working capital as a % of sales1 18.4% 1. See Appendix for reconciliation. 10
Slide 11: Full Year 2024 Outlook
Full Year 2024 Outlook 2024 Forecasted Adjusted EPS $4.05 - $4.20, narrowed from previous guide of $4.00 - $4.25 11
Slide 12: Q&A
3 Q&A Keith Allman Rick Westenberg 12
Slide 13: Appendix
ra O Cc © oF oY L MASCO
Slide 14: 2024 Assumptions
2024 Assumptions Item Assumption Tax rate 24.5% General corporate expense ~$95m Interest and other expense ~$110m Capital expenditures (includes maintenance capex of ~$75m) ~$200m Depreciation and amortization1 ~$160m Unfavorable foreign currency translation impact ~$35m to sales2 Share repurchase o
Slide 15: Capital Allocation Strategy
Capital Allocation Strategy Balanced Approach to Continue to Drive Shareholder Value 1 Reinvest in the Business • • Capex: 2-2.5% of sales Working capital: ~16.5% of sales 2 Maintain investment grade credit rating • Target gross debt to EBITDA below 2.5x 3 Maintain relevant dividend • • Current annu
Slide 16: Long-Term Outlook
Low ticket, repair and remodel products provide LONG-TERM OUTLOOK growth and stability through an economic cycle Average annual sales growth • Organic: ~3-5% • Acquisition: ~1-3% Operating profit margin Market-leading brands, • Expand margins through cost productivity history of innovation, and volu
Slide 17: 2023 Segment Mix
2023 Segment Mix* Total Geographic Business Segment 2023 Revenue R&R% vs. NC NA% v. Int’l Revenue Split Plumbing Products $4.8B 82% 67% Decorative Architectural $3.1B 97% 100% Products Total Company $8.0B 88% 80% NA = % of sales within R&R = % of sales to repair North America and remodel channels NC
Slide 18: 2023 Channel Mix
2023 Channel Mix* 2023 Channel Mix as a Percentage of Sales Plumbing Decorative Architectural Total Channel Products Products Masco Retail 19% 86% 46% Wholesale/trade/dealer 53% 10% 35% E-commerce 17% 4% 12% Specialty Dealer/Other 11% 0% 7% *Based on Company estimates 18
Slide 19: Profit Reconciliations – Second Quarter
Profit Reconciliations – Second Quarter ($ in Millions) Q2 2024 Q2 2023 Net sales $ 2,091 $ 2,127 Gross profit, as reported $ 785 $ 769 Rationalization charges 1 1 Gross profit, as adjusted $ 786 $ 770 Gross margin, as reported 37.5 % 36.2 % Gross margin, as adjusted 37.6 % 36.2 % Selling, general a
Slide 20: EPS Reconciliation – Second Quarter
EPS Reconciliation – Second Quarter ($ in Millions, Except per Common Share Data) Q2 2024 Q2 2023 Income before income taxes, as reported $ 366 $ 374 Rationalization charges 2 1 Income before income taxes, as adjusted $ 368 $ 375 Tax at 24.5% rate (90) (92) Less: Net income attributable to noncontro
Slide 21: EPS Outlook Reconciliation
EPS Outlook Reconciliation 2024 Low End High End Net income per common share $ 4.03 $ 4.18 Rationalization charges 0.02 0.02 Net income per common share, as adjusted $ 4.05 $ 4.20 Amounts may not add due to rounding. 21
Slide 22: Gross Debt to EBITDA Reconciliation
Gross Debt to EBITDA Reconciliation June 30, 2024 Debt $ 2,948 TTM June 30, 2024 Operating profit, as reported $ 1,345 Rationalization charges 21 Impairment charge for other intangible assets 15 Insurance settlement (1) (40) Operating profit, as adjusted $ 1,341 Depreciation and amortization 154 EBI
Slide 23: Working Capital as a % of Sales
Working Capital as a % of Sales As Reported (in Millions) June 30, 2024 Receivables $ 1,314 Inventories 1,057 Less: Accounts payable (924) Working Capital $ 1,447 Net sales (last 12 months) $ 7,878 Working capital as a % of sales 18.4 % Amounts may not add due to rounding. 23