Helen Of Troy Limited · NASDAQ:HELE
Helen Of Troy — Investor Presentation (August 2023)
59 slides from Helen Of Troy's investor presentation, August 2023
Slide 1: Investor Presentation August 2023
Invest in Leadership Brands Optimize Double Capital Down on Deployment International Maximize Selective Investor Presentation Operating Efficiency & Strategic M&A August 2023 Accelerate Consumer Shared Service Centric Excellence Unify, Include & Elevate the Best People
Slide 2: Forward-Looking Statements and Reconciliation of Non-GAAP Financial Measures
Forward-Looking Statements and Reconciliation of Non-GAAP Financial Measures Forward-Looking Statements: developments regarding privacy and data security that could result in changes to its business practices, penalties, increased cost Certain written and oral statements made by the Company and subs
Slide 3: Evolution of Transformation Strategy
Evolution of Transformation Strategy Phase I: FY15-FY19 Phase II: FY20-FY24 Invest in Leadership Brands Optimize Double Capital Down on Deployment International Maximize Selective Operating & Strategic Efficiency M&A Accelerate Consumer Shared Service Centric Excellence Unify, Include & Elevate the
Slide 4: Strong Portfolio of Leadership Brands
Strong Portfolio of Leadership Brands Leadership Brand Progression ˜15% ˜56% ˜85% ˜44% Leadership Leadership Brands Brands Beginning of FY23 Phase I Phase II Transformation Transformation FY2014 Leadership Brand Net Sales Growth CAGR Differentiated Market Leader 11.1% 9.0%* Higher Margin Growth Adja
Slide 5: Value Creation Flywheel
Value Creation Flywheel Accretive and Low Risk Capital Deployment Leadership Brand Innovation and Investment Low Capex Organic Revenue Growth Working Capital Improvement Margin Expansion Debt and Tax Efficiency High Quality Global Shared Services 5
Slide 6: Highly Experienced Global Leadership Team
Highly Experienced Global Leadership Team Julien Mininberg Chief Executive Officer Noel Geoffroy Brian Grass Chief Operating Officer Interim Chief Financial Officer Larry Witt President of Home & Outdoor Tessa Judge Chief Legal Officer 2. Conservative RonaldAnderskow President of North America RMO A
Slide 7: Generated Excellent Results in Phase I and Continued Growth in Phase II
Generated Excellent Results in Phase I and Continued Growth in Phase II Revenue ($ in Millions) Adjusted Operating Income ($ in Millions) $2,223 $355 $334 $2,099 $2,073 $301 $269 $1,707 $239 $224 $1,564 $210 $1,479 $183 $188 $194 $1,383 $1,398 $1,308 $1,335 Adjusted YOY Growth 1.5% 2.1% 3.6% 1.0% 5.
Slide 8: Digital Investments Have Fueled Exponential Online Sales Mix Growth
Digital Investments Have Fueled Exponential Online Sales Mix Growth Compared to the Beginning of the Transformation Online Channel Net Sales as a % of Total Company Net Sales 30% 25% 26% 24% 24% 20% +32% 23% Vs FY20 -1.3% Vs FY21 -8.9%* 19% Vs FY22 15% 16% 10% 12% 9% 9% 5% 6% 0% FY14 FY15 FY16 FY17
Slide 9: Helen of Troy has Evolved into a $2+ Billion Consumer Products Company
Helen of Troy has Evolved into a $2+ Billion Consumer Products Company Legacy ~$2.0B+ Diversification Transformation I $1.5B+ Transformation II Revenue $1.0B+ $500M+ $100M+ 1968 1975 1980 1985 1990 1995 2000 2005 2010 2015 2019 2023 2022 Fiscal Year 9 * Source: Public Fundamental Data provided by Mo
Slide 10: Proven Ability to Deploy Capital and Invest in Attractive Assets
Proven Ability to Deploy Capital and Invest in Attractive Assets Legacy Diversification Transformation 1968 – 2003 2004 – 2013 2014 – to present ~$500 million ~$1.1 Billion ~$2.07 Billion • Strategic licensing partnerships • Low/no organic growth • Invested in organic growth & strategic acquisition
Slide 11: Our Brands Hold Leadership Positions Across Multiple Categories
Our Brands Hold Leadership Positions Across Multiple Categories 1 1 1 1 Rank Rank Country Country Category Segment Rank Rank Country CountryCategory Segment Rank Rank Country Category Country Segment Rank Rank Country CountryCategory Segment Branded Noninvasive & 1 Canister Food Storage Branded Ther
Slide 12: Track Record of Prudent Debt Usage and Paydown to Finance Capital Allocation
Track Record of Prudent Debt Usage and Paydown to Finance Capital Allocation Project Pegasus expected to further reduce inventory and improve cash flow to allow further debt paydown Helen of Troy Leverage Ratio* 3 Personal 2.5 Care License Divestiture New 2 Distribution Center Opened April Divestitu
Slide 13: Capital Allocation
Capital Allocation Deployment Priorities $1,569.6 $1,253.2 $321.7 1. Invest in core $78.7 business 2. Pay down debt amended and extended fully $448.0 paid up 100-year license $885.6 millions 3. Accretive acquisitions 4. Return of Capital to Shareholders $726.5 $362.3 Phase I Phase II to date FY15- F
Slide 14: Increasing Efficiency Through New World-Class Distribution Center
Increasing Efficiency Through New World-Class Distribution Center 2 Million Square Foot Facility, Systems and Automation Automation and robotics are faster and more efficient at processing large order volumes Best in class systems and automation Cloud-based Artificial intelligence that learns and ad
Slide 15: Q1 Fiscal 2024 Results
Key First Quarter Takeaways Q1 Fiscal 2024 Results* Consolidated net sales decline of 6.6% year over year, reflecting: • lower sales in seasonal fan, hair appliance, air filtration, humidification, insulated beverage, and houseware categories. The decreases were primarily driven by SKU rationalizati
Slide 16: Fiscal 2024 Annual Outlook
Fiscal 2024 Annual Outlook Our consolidated net sales and EPS outlooks reflect the following assumptions: Expected Consolidated Consolidated • the severity of the cough/cold/flu season will be in line with pre-COVID historical averages; Growth/(Decline) • June 2023 foreign currency exchange rates wi
Slide 17: Gross Margin Expected to Expand 460 Bps in Fiscal 2024
Gross Margin Expected to Expand 460 Bps in Fiscal 2024* ~920 bps of Gross Margin Expansion Expected During FY15-24 Transformation Gross Margin as a % of Total Company Net Sales 50% Key Drivers of FY24 Gross Margin Expansion 1. Growth in high margin business and declines in low margin business 2. Low
Slide 18: FY24 a Transition Year as Macro Headwinds Impact Phase II CAGRs
FY24 a Transition Year as Macro Headwinds Impact Phase II CAGRs Core Net Sales ($ in millions) *^ Core Adjusted Diluted EPS *^ FY24 Outlook: Decline of 5.2% to 2.8% FY24 vs. FY23 Outlook: $2,189 Decline of $1,965 $2,073 10.1% to 4.8% $2,020 $12.18 vs. FY23 $1,965 $11.03 to $8.75 $2,015 $9.45 $8.72 $
Slide 19: HELE Offers Compelling Valuation vs. Peer Set
HELE Offers Compelling Valuation vs. Peer Set Enterprise Value to Forward EBITDA Multiple Forward Free Cash Flow Yield 20 30.0% 25.0% 15 20.0% 12.3x average $2,025 10 To 15.0% $2,050 $9.20 To 10.0% 8.1% average $9.40 5 5.0% 0 0.0% 19 Source: Peer Company Filings, FactSet Estimates using Adjusted EBI
Slide 20: Launched Project Pegasus to Expand Operating Margins and Create Efficiency
Launched Project Pegasus to Expand Operating Margins and Create Efficiency • Objective: • Project Pegasus Initiatives o Provide new efficiencies to amplify and accelerate growth o Invest more in growing market share on our Leadership Brands 1 Further optimize our brand portfolio o Expand our operati
Slide 21: Project Pegasus: Comprehensive Global Restructuring Plan
Project Pegasus: Comprehensive Global Restructuring Plan Further optimize our • Review our businesses to ensure they are the right fit for our long-term portfolio, profitability, and growth targets brand portfolio • Deploy capital on acquisitions that add fast-growing brands in on-trend categories •
Slide 22: Project Pegasus: Comprehensive Restructuring Project Update
Project Pegasus: Comprehensive Restructuring Project Update FY23 FY23 FY24 October 2022 January 2023 July 2023 Announcement Implementation Execution Objective: Project Pegasus designed to embrace $75-$85 million cost savings initiative remains o Improve efficiency by streamlining and today’s global
Slide 23: Key Initiatives in Place to Reduce Inventory, Increase Inventory Turns, and Improve Cash Flow
Key Initiatives in Place to Reduce Inventory, Increase Inventory Turns, and Improve Cash Flow & Working Capital* Inventory at Fiscal Year End Free Cash Flow (Non-GAAP) 600.0 3.5300.0 $250 3.3x 3.2x to $558.0 250.0 $270 2.9x 3.0 500.0 3.0x 3.0x $481.6 2.3x 200.0 2.8x $455.5 2.5 400.0 150.0 $130.1 Exp
Slide 24: We Made Three Major Changes to The Organizational Structure
We Made Three Major Changes to The Organizational Structure 1 2 3 Business Segments North America RMO Further Centralize Operations and Finance Home & Outdoor Beauty US/Canada US/Canada US/Canada Beauty Health Home Sales & & Wellness Outdoor Health & Wellness Sales Sales Beauty Home More Centralizat
Slide 25: Driving Long-Term Growth & Value Creation
Driving Long-Term Growth & Value Creation Near term: 12-18 Topline Topline Longer term: Beginning months • Strong consumer-centric product innovation pipeline • Strong Consumer-Centric product innovation FY25 • Strong commercial plans pipeline • Drybar, Curlsmith, Osprey acquisition momentum • Stron
Slide 26: Building Blocks for Growth
Building Blocks for Growth Manual Coffee Grinder Hot Clean Grill Brush Fridge Organization Suite Compact Can Opener Prep & Carry System Over-the-Sink Dish Rack Chopper Launch 26
Slide 27: Building Blocks for Growth
Building Blocks for Growth New Fall Colors Goji, Indigo New Spring Colors Bark Mug Chug Cap Configs Carry Out Coolers Holiday Teaser SM Flex Straw and Config Wide Mouth Straw Accessory DTC Exclusive Speckled Boot My Hydro Engraving Global Ombre Wine Gift Set Sling Back Bottle Pack Tumbler Refresh Co
Slide 28: Expanded Customization & Personalization
Expanded Customization & Personalization 28
Slide 29: New Hydro Flask: ALL AROUND TRAVEL TUMBLER
New Hydro Flask: ALL AROUND™TRAVEL TUMBLER 29
Slide 30: Building Blocks for Growth
Building Blocks for Growth Technical Packs Everyday Travel Branded 30
Slide 31: Building Blocks for Growth
Building Blocks for Growth Beauty Appliances (ULTA , Amazon, Professional) (ULTA, Other) (ULTA ,Target ,Professional) Dual Plate Flat Iron One-Step Blowout Smoothstay Infra-Boost Wave Double Straight Curls Dryer & Styler Coconut Collection Dryer Master Straightener Quiet Air Dryer 24K One-Step Steam
Slide 32: Building Blocks for Growth
Building Blocks for Growth Agua Fresca Hydrating Collection (Shampoo, Crown Tonic Pre- Detox Gentle Dry Conditioner, Leave-in Conditioning Milk) Shampoo Scalp Shampoo for Drybar Balancing Cleanser Sensitive Scalps Reserve Dual The Half Shot The Straight Shot Plate Small Round Blow-Drying Flat Iron S
Slide 33: Building Blocks for Growth
Building Blocks for Growth Full Body Effortless Limited Edition (charity Miracle Shield Shine Oil Waves Essential Moisture Thickening Lotion partnership) Hydrating Shampoo & Conditioner Mask Liquids Defrizzion™ Dryer & XXL Diffuser Satin Pillow Case Microfiber towel Appliances Accessories 33
Slide 34: Building Blocks for Growth
Building Blocks for Growth Wellness Leadership Brand Reflection Cool Mist Ultra Comfort Mini Mist Dual Comfort Sleek Thermawave TurboForce Insight HEPA Insight HEPA Allergen Plus Humidifier Humidifier Humidifier Humidifier 6 Heater Power+ Fan Colors Air Purification Air Purification Air Purification
Slide 35: Integrating ESG Into Our Businesses: Completed Stage 1 During FY23
Integrating ESG Into Our Businesses: Completed Stage 1 During FY23 Climate change • Aligned climate-change targets with the Science Based Targets (“SBT”) initiative • Formalized our commitment to work with other companies towards a zero-carbon economy; targeting absolute scope 1, 2 and 3 emissions r
Slide 36: Significant Improvement in External ESG Ratings
Significant Improvement in External ESG Ratings June 2021 June 2022 June 2023 Environmental 7 3 3 Social 3 1 1 Governance 1 1 1 Source: ISS Corporate Solutions. Scale is 10 to 1, with 1 being the highest rating 36
Slide 37: Helen of Troy vs. Peer Set
Helen of Troy vs. Peer Set* Glassdoor Ratings (Current and Former Full-time, Part-time, Contract, Freelance and Intern Associates) Positive Current Career Compensation & Senior Worklife Diversity & Recommend to Current Former Number of Overall Rating Culture & Values CEO Approval Business Employee O
Slide 38: Helen of Troy vs. Selected Group
Helen of Troy vs. Selected Group Glassdoor Ratings (Current and Former Full-time, Part-time, Contract, Freelance and Intern Associates) Positive Current Career Compensation & Senior Worklife Diversity & Recommend to Current Former Employee Number of Overall Rating Culture & Values CEO Approval Busin
Slide 39: Helen of Troy Named In Top 50 of 2022's Healthiest Workplaces In America
Helen of Troy Named In Top 50 of 2022’s Healthiest Workplaces In America Six assessment categories • Culture and Leadership Commitment • Foundational Components • Strategic Planning • Communications and Marketing • Programming and Interventions • Reporting and Analytics Healthiest Employers® is a tr
Slide 40: Appendix
Helen of Troy Appendix
Slide 41: Glossary of Terms
Glossary of Terms Acquisition-related Expenses – Expenses associated with the definitive agreement to Bed, Bath, & Beyond bankruptcy – Represents a charge for uncollectible receivables due acquire Drybar Products LLC, Osprey and Curlsmith to the bankruptcy of Bed, Bath & Beyond Adjusted Diluted Earn
Slide 42: Glossary of Terms
Glossary of Terms Free Cash Flow (FCF) – Net cash provided by operating activities less capital and intangible Organic Business – Net sales revenue associated with product lines or brands after the first asset expenditures twelve months from the date the product line or brand was acquired, excluding
Slide 43: Reconciliation of Non-GAAP Financial Measures - GAAP Operating Income and Operating Margin to Adjusted
Reconciliation of Non-GAAP Financial Measures - GAAP Operating Income and Operating Margin to Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP) (Unaudited) (in thousands) Fiscal Years Ended Last Day of February, 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Operating income, as
Slide 44: Reconciliation - GAAP Diluted EPS to Adjusted Diluted EPS
Reconciliation of Non-GAAP Financial Measures - GAAP Diluted Earnings Per Share (“EPS”) to Adjusted Diluted EPS (Non-GAAP) (Unaudited) Fiscal Years Ended Last Day of February, 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Diluted EPS, as reported (GAAP) $ 5.95 $ 9.17 $ 10.08 $ 6.02 $ 6.62 $ 4.73
Slide 45: Reconciliation - Net Cash from Operating Activities to Free Cash Flow, Fiscal 2023
Reconciliation of Non-GAAP Financial Measures - GAAP Net Cash (Used) Provided by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) for Fiscal Year 2023 Quarterly Period Ended May August November February Fiscal Year 2023 Net cash (used) provided by operating activities (GA
Slide 46: Reconciliation - Net Cash from Operating Activities to Free Cash Flow
Reconciliation of Non-GAAP Financial Measures - GAAP Net Cash Provided by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) Fiscal Years Ended Last Day of February, 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Net cash provided by operating activities (GAAP) $ 208,242
Slide 47: Consolidated Core and Non-Core Net Sales and Adjusted Diluted EPS
Consolidated Core and Non-Core Net Sales and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Years Ended Last Day of February, $ Change % Change 2023 2022 2021 2020 2019 2018 23/22 22/21 21/20 20/19 19/18 23/22 22/21 21/20 20/19 19/18 Sales revenue, net Core
Slide 48: Net Sales Revenue, Operating Income, Adjusted EBITDA, EPS Period Over Period Growth
Net Sales Revenue, Operating Income, Adjusted EBITDA (Non-GAAP), Net Cash Provided by Operating Activities, Diluted EPS, Adjusted Diluted EPS (Non- GAAP), and Core Adjusted Diluted EPS (Non-GAAP) Period Over Period Growth (Decline) (Unaudited) (in thousands, except per share data) Year Ended Last Da
Slide 49: Reconciliation - Core and Non-Core Diluted EPS to Adjusted Diluted EPS
Reconciliation of Non-GAAP Financial Measures - GAAP Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (Unaudited) Fiscal Years Ended Last Day of February, Core Business: 2023 2022 2021 2020 2019 2018 2017 Diluted EPS, as reported $ 5.95 $ 9.00 $ 9.76 $ 7.16 $ 5.89 $
Slide 50: Reconciliation - Operating Income to EBITDA and Adjusted EBITDA, FY2023
Reconciliation of Non-GAAP Financial Measures - GAAP Operating Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA and Adjusted EBITDA Margin (Non-GAAP) (Unaudited) (in thousands) Fiscal Year Ended February 28, 2023 Home & Outdoor Beauty & Wellness Tota
Slide 51: Reconciliation - Operating Income to EBITDA and Adjusted EBITDA, FY2021
Reconciliation of Non-GAAP Financial Measures - GAAP Operating Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA and Adjusted EBITDA Margin (Non-GAAP) (Unaudited) (in thousands) Fiscal Year Ended February 28, 2021 Home & Outdoor Beauty & Wellness Tota
Slide 52: Reconciliation - GAAP Income and Diluted EPS to Adjusted, Q1
Reconciliation of Non-GAAP Financial Measures - GAAP Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Three Months Ended May 31, 2023 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAA
Slide 53: Reconciliation - GAAP Income and Diluted EPS to Adjusted, FY2023
Reconciliation of Non-GAAP Financial Measures - GAAP Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Year Ended February 28, 2023 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported
Slide 54: Reconciliation - GAAP Income and Diluted EPS to Adjusted, FY2021
Reconciliation of Non-GAAP Financial Measures - GAAP Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (Unaudited) (in thousands, except per share data) Fiscal Year Ended February 28, 2021 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported
Slide 55: Fiscal 2024 Outlook for Net Sales Revenue
Fiscal 2024 Outlook for Net Sales Revenue (Unaudited) (in thousands) Fiscal 2023 Outlook Fiscal 2024 Net sales revenue $ 2,072,667 $ 1,965,000 — $ 2,015,000 Net sales revenue decline (5.2)% — (2.8)% 55
Slide 56: Fiscal 2024 Outlook for Operating Income to EBITDA and Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures - Fiscal 2024 Outlook for GAAP Operating Income to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted EBITDA (Non-GAAP) (Unaudited) (in thousands) Outlook for the Balance of the Three Months Ended Fiscal Year May 31, 202
Slide 57: Fiscal 2024 Outlook for GAAP Diluted EPS to Adjusted Diluted EPS
Reconciliation of Non-GAAP Financial Measures - Fiscal 2024 Outlook for GAAP Diluted EPS to Adjusted Diluted EPS (Non-GAAP) (Unaudited) Outlook for the Balance of the Three Months Ended Fiscal Year May 31, 2023 (Nine Months) Outlook Fiscal 2024 Diluted EPS, as reported (GAAP) $ 0.94 $ 2.87 — $ 3.73
Slide 58: Fiscal 2024 Outlook for GAAP Effective Tax Rate to Adjusted
Reconciliation of Non-GAAP Financial Measures - Fiscal 2024 Outlook for GAAP Effective Tax Rate to Adjusted Effective Tax Rate (Non-GAAP) (Unaudited) Outlook for the Balance of the Three Months Ended Fiscal Year May 31, 2023 (Nine Months) Outlook Fiscal 2024 Effective tax rate, as reported (GAAP) 15
Slide 59: Fiscal 2024 Outlook for Net Cash from Operations to Free Cash Flow
Reconciliation of Non-GAAP Financial Measures - Fiscal 2024 Outlook for GAAP Net Cash Provided by Operating Activities to Free Cash Flow (Non-GAAP) (Unaudited) (in thousands) Outlook for the Balance of the Three Months Ended Fiscal Year May 31, 2023 (Nine Months) Outlook Fiscal 2024 Net cash provide