Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Investor Presentation (September 2019)
34 slides from Spectrum Brands's investor presentation, Sep 12, 2019
Slide 1: Detroit Investors
Detroit Investors September 12, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains, and certain oral and written statements made by our representatives from time to time may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements m
Slide 3: Reconciliation of Non-GAAP Financial Measurements
Reconciliation of Non-GAAP Financial Measurements Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Management believes that organic net sales pr
Slide 4: Portfolio of Leading Brands
Portfolio of Leading Brands 4
Slide 5: Spectrum 20/20
Spectrum 20/20 Culture of Sustainable Cash Flow Accountability Focus Customer-Driven with Operational Outstanding Service Excellence Experienced Invest in the Leadership Team Business 5
Slide 6: The New Spectrum Brands TTM Financials
The New Spectrum Brands TTM Financials Net Sales $3.8 billion Adjusted EBITDA* $559 million 6 * Total Company Adjusted EBITDA includes (5%) of corporate costs not allocated to the segments. .
Slide 7: The New Spectrum Brands
The New Spectrum Brands* Hardware & Home Improvement ▪ 36% of Net Sales ▪ 45% of Adjusted EBITDA** Home & Personal Care ▪ 28% of Net Sales ▪ 17% of Adjusted EBITDA** Global Pet Care ▪ 22% of Net Sales ▪ 24% of Adjusted EBITDA** Home & Garden ▪ 14% of Net Sales ▪ 19% of Adjusted EBITDA** 7 * TTM fina
Slide 8: Strong Capital Structure
Strong Capital Structure SECURED DEBT NET LEVERAGE ELIMINATED Secured TERMDebt Bank LOAN REDUCED CAPITAL LEASES STRENGTHENED NetBALANCE SHEET Leverage 5.2 $1,530 3.5 or lower $226 9/30/18 9/30/19 Est. 9/30/18 6/30/19 8
Slide 9: Top Brands Driving Customer and Consumer Value
Top 15 Brands Driving Customer and Consumer Value Represents ~80% of FY18 pro forma* revenues of $3.8 billion from continuing operations 9 * Pro forma FY18 as of September 30, 2018 – end of FY18 Q4. .
Slide 10: Global Reach
Global Reach ($2,806 million*) ($203 million*) ($654 million*) ($121 million*) 10 * TTM sales by geographic region. .
Slide 11: Significant FY 2019 Innovation
Significant FY 2019 Innovation Hardware & Home Improvement Home & Personal Care Global Pet Care Home & Garden 11
Slide 12: Smarter Living Durable Commercial Grade Hardware
Smarter Living Durable Commercial Grade Hardware Aura Bluetooth smart lock gives you control of your door with Introducing the SmartCode 955 commercial grade electronic lever. your smartphone – it’s as simple as that. SmartCode’s 955 durability and convenience allows you to focus on your day to day.
Slide 13: Tenet and Rhen collections
The modern Tenet collection is for the true minimalist who finds beauty in The Rhen collection’s initial muse was an heirloom wedding gown interwoven simplicity and values precise functionality. Each fixture sits tightly flush, a with flowing drapery details. Its sculpturesque design, artisan crafts
Slide 14: Introducing Toaster Oven
INTRODUCING TOASTER OVEN Anniversary 2018 BLACK+DECKER Air Fry Toaster Oven Success #5 Toaster Oven SKU in total market 2018 NEW Air Fry Toaster Oven SKUs launching in 2019 Fall 2019 on-shelf for Holiday *#1 Brand in Toaster Ovens in the USA– Source: NPD POS, data as of Nov. 2018.
Slide 15: Remington hair straightener launch
• 3x more protection for healthier hair and less damage* • Patented heat protection sensor and micro-conditioning coating infused with Keratin and almond oil • Launched AW17 EU & AW18 UK • Continued YoY growth of circa 40% Net Sales Value • Supported two years running with full Above-The-Line campai
Slide 16: Nature's Miracle Advanced Platinum Disinfectant Line
Nature’s Miracle Advanced Platinum Disinfectant Line ❖ Disinfectant formulas that specifically target pet viruses ❖ June 2019 on-shelf ❖ Estimated $3M Annual POS ❖ Search, social and influencer campaigns, and in-store displays & videos to support
Slide 17: Patented, innovative design in pet treats
Patented, innovative design in pet treats Entire line listed at U.S. mass channel and others April 2019 on-shelf Estimated $3M Annual POS Social, digital & influencer media to support the launch
Slide 18: Hot Shot Ant, Roach & Spider Killer
Hot Shot Ant, Roach & Spider Killer • Our strongest formula ever! • Providing customers and consumers with exactly what they need • TV, digital, search and social campaigns, online content and videos, along with in-store displays & support • Launched in April 2019, driving total ant & roach aerosol
Slide 19: Spectracide Weed Stop For Lawns
Spectracide Weed Stop For Lawns • Our fastest-working lawn weed killer ever! • Broad national distribution and additional in- store displays & support • TV, digital, search and social campaigns, online content and videos • Launched in March 2019, driving total selective herbicide segment growth
Slide 20: Global Pet Care Marketing Initiatives
Global Pet Care Marketing Initiatives ‐ Full-circle online campaigns engage consumers to build awareness and drive trial ‐ Best-in-class content drives partnership with omni-channel retailers Video Display Movie Theatre Social Influencer Paid Search/Ratings Website 20
Slide 21: Major FY 2019 Distribution Wins
Major FY 2019 Distribution Wins • Category: Outdoor controls • Channels: Big box, mass and food Home & Garden • Region: U.S. • Category: Dog chews/treats • Channel: Mass • Region: U.S. Global Pet Global PetCare Care • Category: Aquatics • Channels: Mass, pet specialty, online • Region: U.S. 21
Slide 22: Major FY 2019 Distribution Wins (cont'd)
Major FY 2019 Distribution Wins (cont’d) Hardware • Category: Builders’ hardware & Home • Channel: Big box Improvement • Region: U.S. • Category: Appliances • Channel: Mass • Region: Europe Home & Personal Care • Category: Hair care & grooming • Channel: Food • Region: Europe Personal Care 22
Slide 23: Accelerating E-Commerce Sales by Enhancing Internal Capabilities
Accelerating E-Commerce Sales by Enhancing Internal Capabilities ‐ Increasing dedicated staff and expanding toolsets and cross-divisional cooperation ‐ Amazon a top 5 customer in FY 2018 ‐ Attractive margin structure ‐ Greater price-value transparency, ratings and reviews E-Commerce Share of TTM U.S
Slide 24: Global Productivity Improvement Plan (GPIP)
Global Productivity Improvement Plan (GPIP) ▪ 24-to-36 month initiative with substantial portion of the savings reinvested in the business ▪ $20 million Phase I investment captured about $35 million of annualized sourcing savings primarily to be realized in FY20 Strategic Sourcing Implement and exec
Slide 25: Capital Allocation Priorities
Capital Allocation Priorities ▪ Strong cash flow generation and improved balance sheet resulting in capital allocation optionality Opportunistic Share Reinvest Profitably Maintain Strong Uses of Cash Debt Paydown Disciplined M&A Repurchases in the Business Dividend Repurchased $250 Improved balance
Slide 26: FY 2019 Outlook
FY 2019 Outlook ▪ Year of stabilization and focus following transformational and transitional FY 2018 ▪ Adjusted EBITDA from continuing operations expected to be between $560–$580 million ▪ Significant increase in advertising, marketing, selling, R&D and innovation spending ▪ Cap-X from continuing o
Slide 27: Appendix
CRA Pky Mm Brands Appendix
Slide 28: Reconciliations
Reconciliations Spectrum Brands Holdings, Inc. Reconciliation of Pre-Tax Income From Continuing Operations to Adjusted EBITDA For the Fiscal Year Ended September 30, 2018 (in millions, unaudited) HHI HPC PET H&G CORP TOTAL Pre-tax income from continuing operations $ 156 $ 94 $ 35 $ 88 $ (407) $ (34)
Slide 29: Spectrum Brands Q3 2019 Overview
Spectrum Brands Q3 2019 Overview SPB Q3 2019 Financials Net Sales $1.022 billion 0.7% decrease Adjusted EBITDA $172.9 million 2.7% decrease • Organic sales increased 0.8% ‐ Strong Global Pet Care sales were partially offset by lower revenues from HHI, HPC and H&G • We affirmed our full-year adjusted
Slide 30: Hardware & Home Improvement Q3 2019 Overview
Hardware & Home Improvement Q3 2019 Overview HHI Q3 2019 Financials Net Sales $354.6 million 4.8% decrease Adjusted EBITDA $67.7 million 8.4% decrease • Lower U.S. residential security and builders’ hardware sales were negatively impacted by $20 million of higher Kansas backlog shipments in the prio
Slide 31: Home & Personal Care Q3 2019 Overview
Home & Personal Care Q3 2019 Overview HPC Q3 2019 Financials Net Sales $243.4 million 4.3% decrease Adjusted EBITDA $18.2 million 15.0% decrease • Organic sales were essentially flat • Adjusted EBITDA declined due to higher transaction foreign exchange and input costs, partially offset by productivi
Slide 32: Global Pet Care Q3 2019 Overview
Global Pet Care Q3 2019 Overview GPC Q3 2019 Financials Net Sales $221.7 million 13.9% increase Adjusted EBITDA $39.0 million 11.7% increase • Organic sales grew a strong 15.7% ‐ Significantly higher sales were attributable to continued strong growth in U.S. companion animal along with modest growth
Slide 33: Home & Garden Q3 2019 Overview
Home & Garden Q3 2019 Overview H&G Q3 2019 Financials Net Sales $202.5 million 2.6% decrease Adjusted EBITDA $53.3 million 6.5% decrease • Sales decreased from unfavorable weather conditions during most of the quarter ‐ Reduced sales in household insect and outdoor controls were partially offset by
Slide 34: Spectrum Brands
Spectrum Brands (BLACK+DECKER) € Breadman @ifiiZ? Q\NGo Digestecse Qs WeewMS sceTRITION EP YEUKANUBA EZSET Ga] FARBERWARE len ish io FORTIS eeeshlRam/ts <eReINSI> GEORGE FOREMAN GLOFish yealthy*Higg se . IAMS® InstantQcear” Juiceman Jagr Kwikset Maid Sum —— ’ ey . . MARINELAND. National NARAGLS "Cha
Spectrum Brands Holdings — Investor Presentation (September 2019) on 6ix