Central Garden & Pet Company · NASDAQ:CENT
Central Garden & Pet — Jefferies Pet Industry Summit 2019
15 slides from Central Garden & Pet's conference presentation, Mar 20, 2019
Slide 1: Central Garden & Pet
CENTRAL GARDEN & PET MARCH 20, 2019
Slide 2: Safe Harbor
SAFE HARBOR "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this presentation which are not historical facts, including expectations for improved efficiency and profitability and FY19 guidance are forward-looking statements that are sub
Slide 3: Central Garden & Pet Company Overview
CENTRAL GARDEN & PET (NASDAQ: CENT AND CENTA) • Leading manufacturer and supplier of branded and private label lawn & garden and pet products • Founded in 1980 as a distribution company. Approximately 21% of revenues today from distribution • 10% - 15% of revenue from private label products • In fis
Slide 4: History of Growth
HISTORY OF GROWTH ’13: John Ranelli named President and CEO ‘14: Rejected unsolicited proposal from ‘16: George Roeth named ’04: Surpassed $1.5B in Net Sales Harbinger Group President and CEO ’13 -’15: Focused on “righting the ship” ‘17: Surpassed $2.0B in Net Sales Milestones ‘80: Founded ’07 -’11:
Slide 5: Proven M&A Capability
PROVEN M&A CAPABILITY …Central Possesses Acquisition Momentum with Several Recent Deals… 2014 – 2018 Deals by Segment & Market Size • Central is a preferred acquirer • Track record of successful M&A - over 50 acquisitions in Live Fish & the last 25 years Small Animals Company Overview • Provides a n
Slide 6: The Pet Segment Is Fragmented with Attractive Growth Rates
THE PET SEGMENT IS FRAGMENTED WITH ATTRACTIVE GROWTH RATES The Pet Industry Central’s Pet Business • Central participates in $27B of a $58B industry • Net sales of $1.3B in 2018 • Fragmented customer base • Consumer and professional businesses • Less than 20% sales through major pet specialty retail
Slide 7: Pet Industry Sales by Channel
PET INDUSTRY SALES BY CHANNEL Pet Products Wholesale Club 8.8% Pet Independent Pet Specialty 9.8% Chains 21.4% Internet* 12.5% Mass Grocery 20.8% 14.5% *Internet includes online sales by omnichannel players Source: Packaged Facts – U.S. Market Outlook 2018-2019
Slide 8: Central's Broad Product Portfolio Is Unique
CENTRAL’S BROAD PRODUCT PORTFOLIO IS UNIQUE Commentary Company Garden Products Pet Products • Participant in a Animal Health – Food, Treats & Animal Health Bird & Small Fertilizers Grass Seed Aquatics & Professional Dog & Cat Dog & Cat Wild Bird Live Plants Consumer number of categories Controls Sup
Slide 9: Our Markets
OUR MARKETS* Market Opportunity $6B Dog & Cat Supplies $5B Company Overview Garden Live Pet $4B Plants Both Dog & Cat Treats & = Size of circle is Central’s 2018 sales Chews Source: Internal estimates – U.S. wholesale markets Natural $3B (Dog & Cat) Nutrition Fertilizer *Excludes third-party distrib
Slide 10: Metrics Accelerating Over the Last Three Years
METRICS ACCELERATING OVER THE LAST THREE YEARS Operating Margin Net Sales (in billions) 10% $2.5 $2.2 9% $2.1 8% 7.6% 7.6% $2.0 $1.8 7.1% $1.7 $1.7 7% $1.6 $1.7 6% 5.5% $1.5 Performance Track Record 5% 4.4% $1.0 4% 3.5% 3% 2.4% $0.5 2% 1% $- 0% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY12 FY13 FY14 FY15
Slide 11: Strong Cash Flow
STRONG CASH FLOW Cash Provided by Operations EBITDA* (in millions) (in millions) $160 $151 $250 $140 $126 $225 $215 $120 $114 $114 $199 $200 $100 $89 $87 $175 $169 $80 $150 $132 $51 $60 $125 $114 Performance Track Record $105 $104 $40 $100 $92 $20 $75 $50 $- $25 -$20 $- -$40 $(28) FY11 FY12 FY13 FY1
Slide 12: Historic Total Company Organic Growth
HISTORIC TOTAL COMPANY ORGANIC GROWTH 10.0% 8.0% 7.6% 7.0% 6.1% Performance Track Record 6.0% 5.0% 4.0% 3.6% * 2.6% 2.8% * 1.7% 2.0% 1.1% 0.0% -0.1% -2.0% -1.7% -4.0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 YOY Quarterly Growth Rate 4-Qtr Rolling Avg Growth Rate *Adjusted for 53rd week
Slide 13: Historic Pet Organic Growth
HISTORIC PET ORGANIC GROWTH 7.0% 6.6% 6.3% 6.1% 6.0% 5.0% 4.8% * Performance Track Record 4.3% 4.0% 3.4% * 3.0% 2.6% 2.0% 1.7% 1.3% 1.1% 1.0% 0.0% -1.0% -0.6% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 YOY Quarterly Growth Rate 4-Qtr Rolling Avg Growth Rate *Excludes 53rd week in Q4 2017 3
Slide 14: Central Garden & Pet Strategy
CENTRAL GARDEN & PET STRATEGY Accelerate the portfolio • Manage businesses differentially based on clearly articulated strategies. growth momentum • Build out our portfolio in attractive broadly defined Pet & Garden markets. • Ensure sufficient demand creation investment to drive organic growth & bu
Slide 15: Develop More Differentiated and Defensible New Products
DEVELOP MORE DIFFERENTIATED AND DEFENSIBLE NEW PRODUCTS • New brand for the Pet Specialty Channel and Independent Pet Retailers Keep the Core Healthy • Collection of single & limited ingredients • Minimally processed treats & chews Four Paws Wee Wee • Stain & Odor and pads • Wee-Wee Professional Str
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