Acco Brands Corporation · NYSE:ACCO
Acco Brands — Q2 2024 Earnings Presentation
24 slides from Acco Brands's earnings presentation, Aug 2, 2024
Slide 1: ACCO Brands 2Q Earnings Conference Call
ACCO Brands | 2Q Earnings Conference Call | August 2, 2024
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: ACCO Brands (NYSE: ACCO) Snapshot
ACCO Brands (NYSE: ACCO) Snapshot Diversified Global Leading Consumer Products Company Collection of Iconic Brands 2023 Key Statistics Free Cash Flow and Capital Allocation • Consistent generator of Free Cash Flow $1.8B 11.2% Net Sales Adj. Operating • Consolidated leverage ratio of 3.7x at end of M
Slide 5: 2Q 2024 Highlights
2Q Tet 2024 Highlights • Reported and comparable net sales down due to weaker business and consumer spending largely related to office product and gaming accessories categories • Exit of lower margin business, primarily related to back-to-school, accounted for approximately 4% of consolidated net sa
Slide 6: Multi-Year Cost Reduction Program
Multi-Year Tet Cost Reduction Program Program Targeting At Least $60M in Cost Savings • Realized $10M year-to-date in cost savings; on track to deliver more than $20M in cost savings for FY24 • Program incorporates initiatives to simplify and delayer the Company’s operating structure and reduce cost
Slide 7: Financial Results for 2Q 2024
Financial Tet Results for 2Q 2024 Three Months Six Months 2Q 2024 Commentary $ in millions Q2 2024 Q2 2023 % Chg Q2 2024 Q2 2023 % Chg • Net sales challenged by lower demand, largely Net Sales $438.3 $493.6 (11.2%) $797.2 $896.2 (11.0%) related to the office product and gaming accessories categories
Slide 8: 2Q Segment Financial Metrics
2Q Segment Financial Metrics Y/Y Segment Commentary $ in millions 2Q 2024 2Q 2023 Change ACCO Brands Americas • Globally, rate of sales decline across many categories are improving, but at a lesser rate than expected Sales $292.3 $336.4 (13.1%) *Comparable Sales $293.8 $336.4 (12.7%) • Exit of lower
Slide 9: 2Q 2024 Margin Reconciliation
2Q 2024 Margin Reconciliation 2Q Change vs. Items of Bps 2024 Prior Year Significant Impact Gross Profit $152.6M ($11.6M) Pricing/Product Cost 30 Cost Savings 90 Gross Margin 34.8% +150 Bps Volume (20) FX/Other 50 SG&A $88.0M ($10.0M) Cost Savings (70) Sales Deleverage 210 SG&A Margin 20.1% (20 bps)
Slide 10: Free Cash Flow
Free Cash Flow 1Q 2Q 1H 1H Change Free Cash Flow Commentary $ in millions* 2024 2024 2024 2023 vs 2023 Net cash provided by operations 28 (26) 3 (39) 42 • Consistent generator of free cash flow Additions to PP&E (2) (3) (5) (6) 1 *Free cash flow 26 (29) (2) (45) 43 • Seasonally weighted toward secon
Slide 11: Capital Structure
Capital Structure ($ in millions) Facility Balance1 Interest Rate Methodology Rate $600M multicurrency revolver 90 SOFR + CSA3 + 175 bps, 30 bps unused 7.10% USD Term Loan A 75 SOFR + CSA3 + 175 bps 7.19% EUR Term Loan A 202 EURIBOR + 175 bps 5.47% AUD Term Loan A 30 Australian BBSR + 175 bps 6.20%
Slide 12: Full Year 2024 Outlook
Full Year 2024 Outlook Guidance FY2024 Reported Net Sales Growth (9.0%) to (8.0%) Reported Net Sales* $1.670 to $1.690 billion FX Impact on Sales* Approximately 0.0% Comparable Sales Growth (9.0%) to (8.0%) Adjusted EPS $1.04 to $1.09 Free Cash Flow Approximately $130 million Adjusted Tax Rate Appro
Slide 13: 3Q 2024 Outlook
3Q 2024 Outlook Guidance 3Q 2024 Reported Net Sales Growth (7.0%) to (5.0%) Reported Net Sales* $415 to $425 million FX Impact on Sales* Approximately 0.0% Comparable Sales Growth (7.0%) to (5.0%) Adjusted EPS $0.21 to $0.24 *Translation impact based on spot rates as of 06/30/2024 Notes: Comparable
Slide 14: Executing On Capital Allocation Strategy
Executing On Capital Allocation Strategy Shareholder Capital Allocation Debt Reduction Returns More balanced capital Gross debt down $100M year- Declared $0.075 per share allocation approach as balance over-year quarterly dividend on July 26th sheet improves Free cash outflow of $2M 2Q 2024 consolid
Slide 15: Appendix
15 Appendix 1
Slide 16: Who is ACCO Brands?
Who is ACCO Brands? • Diversified Global Consumer Products Company • Iconic Leading Brands Generate Significant Annual Sales • Strong Customer Partnerships with Largest Retailers • Category And Geographically Diverse • Consistent Free Cash Flow Generator • 6% Annualized Dividend Yield* • Focused on
Slide 17: Iconic Collection of Brands Drive Market Leading Positions
Iconic Collection of Brands Drive Market Leading Positions 12 BRANDS ACCOUNT FOR $1.3 BILLION IN ANNUAL SALES AMERICAS INTERNATIONAL #1 #1 #1 #1 #1 #1 #1 #1 PowerA Third Five Star Back- Tilibra Student Barrilito Back- Leitz Leitz and Rapid Leitz Organization Spirax Student Party Controllers to-Schoo
Slide 18: Diversified Product Categories
Diversified Product Categories 18 PRODUCT GROUP PRODUCT CATEGORIES 2023 % OF SALES KEY BRANDS Tech Video Gaming and Accessories Computer Accessories 17% Learning & Note-taking, Boards, Art Products and Writing 30% Creative Stapling, Laminating, Business Tools, Shredding, Filing Essentials and Organi
Slide 19: 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 20: 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 (Loss) Income information reported in accordan
Slide 21: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries jation of GAAP to Adjusted Non-GAAP Information (Unaudited) (In millions, except per share data) Reconcil The following tables set forth a reconciliation of certain Conso! GAAP Information for the six months ended June 30, 2024 and 2023.
Slide 22: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries ition of Net (Loss) Income to Adjusted EBITDA (Unaudited) (In millions) Recon The following table sets forth a reconciliation of net loss reported in accordance with GAAP to Adjusted EBITDA. Three months ended Six months ended Sune 30, J
Slide 23: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Business Segment Information and Reconciliation (Unaudited) illions) 2024 2023, ‘Changes “Adjusted Reported Adjusted Operating Reported Adjusted Adjusted Adjusted Operating, Operating Income Operating Operating ‘Operating Op
Slide 24: Reg G Reconciliations
Reg G Reconciliations ACCO Brands Corporation and Subsidiaries Supplemental Net Sales Change Analysis (Unaudited) ‘GAAP [Net Sales Change! [Comparable Sales| Q1 2024: ACCO Brands Americas (14.3)% 1.0% (15.3% $(32.8) $24 $(35.2) $194.8 ACCO Brands International (6.3)% (0.4)% (5.99% (10.9) (0.7) (10.2