Newell Brands Inc. · NASDAQ:NWL
Newell Brands — Q3 2016 Earnings Presentation
32 slides from Newell Brands's earnings presentation, Oct 28, 2016
Slide 1: Q3 2016 Earnings Presentation
Q3 2016 Earnings Presentation October 28, 2016 live. learn. work. play. 1
Slide 2: Forward-looking Statements
Forward-looking Statements Statements in this presentation that are not historical in nature constitute forward-looking statements. These forward-looking statements relate to information or assumptions about the effects of sales, income, earnings per share, operating income, operating margin or gros
Slide 3: Q3 2016 Summary
Q3 2016 Summary Net sales of $3.95 billion grew 158.5 percent primarily due to the inclusion of net sales from the acquired Jarden business Core sales grew 3.0%, driven by strong results on our Writing, Baby, Food, and Appliance businesses partially offset by declines in Commercial Products and Outd
Slide 4: Q3 2016 Summary (cont'd)
Q3 2016 Summary (cont’d) Reported diluted earnings per share of $0.38, compared with $0.50 in the prior year. The operating income contribution from the acquired Jarden business and strong operating income growth on both legacy businesses were more than offset by expenses related to the Jarden trans
Slide 5: Core Sales Growth by Segment – Q3 2016
Core Sales Growth by Segment – Q3 2016 Net Acquisitions Net Q3 2016 Sales % Currency % of Divestitures % Core Sales %* Writing 14.5% (0.4)% 7.2% 7.7% Home Solutions (19.1) (0.3) (18.3) (0.5) Tools (5.7) 1.0 (11.3) 4.6 Commercial Products (3.7) (0.1) (1.8) (1.8) Baby & Parenting 11.3 2.0 (1.3) 10.6 B
Slide 6: Core Sales Growth by Segment – Q3 YTD 2016
Core Sales Growth by Segment – Q3 YTD 2016 Net Acquisitions Net Q3 YTD 2016 Sales % Currency % of Divestitures % Core Sales %* Writing 14.1% (2.0)% 6.7% 9.4% Home Solutions (6.7) (0.5) (7.7) 1.5 Tools (3.4) (1.5) (2.6) 0.7 Commercial Products (5.8) (0.6) (4.4) (0.8) Baby & Parenting 11.0 1.1 (0.5) 1
Slide 7: Raising 2016 Guidance to Top Half of Range
Raising 2016 Guidance to Top Half of Range Core Sales Growth 3.5% to 4.0% 3.0% to 4.0% Normalized EPS $2.85 to $2.90 $2.75 to $2.90 Weighted Average Diluted Shares ~425 million ~430 million Effective Tax Rate ~27.5% 29% to 30% 7
Slide 8: Introducing 2017 Full Year Guidance
Introducing 2017 Full Year Guidance Core Sales Growth 3% to 4% Normalized EPS $2.85 to $3.05 Weighted Average Diluted Shares ~488 million Effective Tax Rate 26% to 27% * The company has presented forward-looking statements regarding normalized earnings per share and core sales growth for 2017, each
Slide 9: Guidance Assumptions
Guidance Assumptions • As of April 15, 2016, core sales include pro forma core sales associated with the Jarden transaction as if the combination occurred April 15, 2015 • Core sales exclude the impact of foreign currency, acquisitions until their first anniversary and planned and completed divestit
Slide 10: One Company with One Corporate Strategy
One Company with One Corporate Strategy 10
Slide 11: Two Operating Models
Two Operating Models 1 Development & Delivery Model 2 Entrepreneurial Model • Investment in Insights, Ideation and • General manager led business model, Innovation, Brand Communications, empowered choices within budget framework International expansion • Selectively leverage corporate capabilities •
Slide 12: 16 Global Divisions
16 Global Divisions Development & Delivery Entrepreneurial Operating Model Operating Model Appliances & Writing Jostens Home & Family Cookware Consumer & Home Fragrance Process Solutions Safety & Security Commercial Solutions Food Baby Waddington Fine Writing Outdoor & Fishing Team Sports Recreation
Slide 13: 3 Category Portfolio Roles: Win Bigger
3 Category Portfolio Roles Win Bigger • First priority for growth and brand investment internationally • Core anchor businesses of NWL Brands and leading growth contributors • Above average growth rates, actionable growth and innovation platforms • Major commercialization focus (reach, activation, a
Slide 14: 3 Category Portfolio Roles: Develop for Growth
3 Category Portfolio Roles Develop for Growth • Potential to become Win Bigger and core anchor categories • Establish paths to attractive growth and scalable strong business models • Invest in insights, ideation, design, and brand development to plot future growth funnel • Invest selectively in prov
Slide 15: 3 Category Portfolio Roles: Deliver Entrepreneurially
3 Category Portfolio Roles Deliver Entrepreneurially • Freedom within a defined strategic and budget framework • Above average EBITDA growth, focused on simple, low risk plans on major value levers • Wide variety of businesses, not seeking commonalities, not held for sale • Potential to move in to h
Slide 16: Our Repeatable Model
Our Repeatable Model ~~ ~ ~ . ~~ Whowe are n~ Ambition nN a~ ~ a~ n~ Touching hundreds of millions | Growth is the engine that Build meaningful relative Leading brands in large and everyday where they live, powers us .... Put the market share advantage and fragmented markets, learn, work and play wi
Slide 17: Our Call to Action
Our Call to Action Grow. Transform. Lead. Win. Newell Brands touches millions of consumers everyday where they live, learn, work and play. We believe growth and scale benefits drive value creation and we achieve our potential by putting the consumer first in all that we do. Our portfolio is a powerf
Slide 18: New Growth Game Plan
New Growth Game Plan Growth Game Plan Our Purpose Newell Brands touches hundreds of millions of people everyday where they Live, Learn, Work and Play. Growth is the engine that powers us and we believe in putting the consumer at the heart of all that we do. Our brands and team are purpose driven to
Slide 19: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations 19
Slide 20: Q3 2016 GAAP & Non-GAAP Certain Line Items
Q3 2016 GAAP & Non-GAAP Certain Line Items NEWELL BRANDS INC. RECONCILIATION OF GAAP AND NON-GAAP INFORM ATION CERTAIN LINE ITEM S (in millions, except per share data) Three months ended September 30, 2016 GA A P Measure Project Renewal Costs (1) A cquisition Jarden Jarden transaction Décor Non-GA A
Slide 21: Q3 2015 GAAP & Non-GAAP Certain Line Items
Q3 2015 GAAP & Non-GAAP Certain Line Items NEWELL BRANDS INC. RECONCILIATION OF GAAP AND NON-GAAP INFORMATION CERTAIN LINE ITEMS (in millions, except per share data) Three months ended September 30, 2015 GA A P Measure Project Renewal Costs (1) A cquisition Inventory charge from Charge resulting fro
Slide 22: Q3 YTD 2016 GAAP & Non-GAAP Certain Line Items
Q3 YTD 2016 GAAP & Non-GAAP Certain Line Items NEWELL BRANDS INC. RECONCILIATION OF GAAP AND NON-GAAP INFORM ATION CERTAIN LINE ITEM S (in millions, except per share data) Nine months ended September 30, 2016 GA A P Measure Project Renewal Costs (1) A cquisition Jarden Jarden transaction Décor Loss
Slide 23: Q3 YTD 2015 GAAP & Non-GAAP Certain Line Items
Q3 YTD 2015 GAAP & Non-GAAP Certain Line Items NEWELL BRANDS INC. RECONCILIATION OF GAAP AND NON-GAAP INFORMATION CERTAIN LINE ITEMS (in millions, except per share data) Nine months ended September 30, 2015 GA A P Measure Project Renewal Costs (1) A cquisition Inventory charge from Charge resulting
Slide 24: Segment Normalized Operating Income/Margin
Segment Normalized Operating Income/Margin NEWELL BRANDS INC. FINANCIAL WORKSHEET - SEGMENT REPORTING (Unaudited) In m illions Three months ended March 31, 2016 Three months ended March 31, 2015 Reconciliation (1,2,3) Reconciliation (1,2,4,5) Year over year change Reported Excluded Normalized Normal
Slide 25: Segment Normalized Operating Income/Margin (cont'd)
Segment Normalized Operating Income/Margin (cont’d) NEWELL BRANDS INC. FINANCIAL WORKSHEET - SEGMENT REPORTING (Unaudited) In millions Three months ended September 30, 2016 Three months ended September 30, 2015 Reconciliation (1,2,3,4,5,6) Reconciliation (1,2,4,5) Year over year change Reported Excl
Slide 26: Q3 2016 Core Sales by Segment
Q3 2016 Core Sales by Segment NEWELL BRANDS INC. CURRENCY ANALYSIS BY SEGMENT ACTUAL AND ADJUSTED PRO FORMA BASIS (UNAUDITED) For the periods ended September 30, 2016 and 2015 $ in Millions Three months ended September 30, 2016 and 2015 Increase/(Decrease) 2016 2015 Net Sales Acquisitions/ Net Sales
Slide 27: Q3 YTD 2016 Core Sales by Segment
Q3 YTD 2016 Core Sales by Segment NEWELL BRANDS INC. CURRENCY ANALYSIS BY SEGMENT ACTUAL AND ADJUSTED PRO FORMA BASIS (UNAUDITED) For the periods ended September 30, 2016 and 2015 $ in Millions Nine months ended September 30, 2016 and 2015 Increase/(Decrease) 2016 2015 Net Sales Acquisitions/ Net Sa
Slide 28: Q3 2016 Core Sales By Geography
Q3 2016 Core Sales By Geography NEWELL BRANDS INC. CURRENCY ANALYSIS BY GEOGRAPHY ACTUAL AND ADJUSTED PRO FORMA BASIS (UNAUDITED) For the periods ended September 30, 2016 and 2015 $ in Millions Quarter to date Increase/(Decrease) 2016 2015 Net Sales Acquisitions/ Net Sales Currency 2016 Net Sales Di
Slide 29: Q3 YTD 2016 Core Sales By Geography
Q3 YTD 2016 Core Sales By Geography NEWELL BRANDS INC. CURRENCY ANALYSIS BY GEOGRAPHY ACTUAL AND ADJUSTED PRO FORMA BASIS (UNAUDITED) For the periods ended September 30, 2016 and 2015 $ in Millions Year to date Increase/(Decrease) 2016 2015 Net Sales Acquisitions/ Net Sales Currency 2016 Net Sales D
Slide 30: Q3 2016 Net Debt
Q3 2016 Net Debt Reconciliation of Net Debt at September 30, 2016: $ in Millions Short term debt and current portion of long term debt $ 704.5 Long term debt 12,043.3 Gross debt 12,747.8 Less: Cash and cash equivalents 670.0 NET DEBT $ 12,077.8 The Company defines net debt as total debt less the tot
Slide 31: 2016 Normalized EPS Guidance
2016 Normalized EPS Guidance Year Ending December 31, 2016 Diluted earnings per share $ 1.15 to $ 1.20 Tools sale - tax on basis difference $ 0.33 to $ 0.35 Project Renewal and Project Lean restructuring and other costs $ 0.09 to $ 0.11 Integration costs to drive synergies $ 0.28 to $ 0.32 Estimated
Slide 32: FY 2016 Core Sales Growth Guidance
FY 2016 Core Sales Growth Guidance Year Ending December 31, 2016 Estimated net sales growth (GAAP) 122.5% to 128.0% Less: Jarden net sales growth included in pro forma base 115.0% to 120.0% Net sales growth, Adjusted Pro Forma (1) 7.5% to 8.0% Less: Currency -1.0% to -2.0% Acquisitions, net of dives