Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Merger or Acquisition (October 2012)
25 slides from Spectrum Brands's merger presentation, Oct 9, 2012
Slide 1: Acquisition of HHI
Acquisition of October 9, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain matters discussed in this presentation and other oral and written statements by representatives of the Company regarding the HHI acquisition and matters such as expected sales, adjusted EBITDA, other measures of financial performance, and the financial impact of th
Slide 3: Non-GAAP Measurements
Non-GAAP Measurements Non-GAAP Measurements Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results for the Company, current results for HHI, and current results on a pro-forma basis of the c
Slide 4: Speakers
Speakers Spectrum Brands David Lumley – Chief Executive Officer Hardware & Home Improvement Group Greg Gluchowski – President 4
Slide 5: Transaction Overview
DRAFT Transaction Overview David Lumley
Slide 6: Transaction Overview
Transaction Overview Spectrum Brands, Inc. to acquire Hardware & Home Improvement Group ("HHI") of Stanley Black & Decker for $1.4 billion in cash HHI is leading maker of residential locksets, residential builders’ hardware, and faucets – Transaction also includes assets from Tong Lung, leading
Slide 7: Transaction Rationale
Transaction Rationale Adds leading maker of residential locksets, residential builders’ hardware and faucets with #1 positions in key North American markets and portfolio of renowned brands Increases Spectrum Brands’ top-line growth and margins and is expected to be significantly and immediately
Slide 8: Spectrum Brands Overview
Spectrum Brands Overview David Lumley
Slide 9: Spectrum's Diverse, Unrivalled Brand Portfolio
Spectrum’s Diverse, Unrivalled Brand Portfolio Global Batteries & Appliances Global Pet Supplies Home & Garden LTM 7/1/12 Net Sales $2.26B; LTM 7/1/12 Net Sales $603M; LTM 7/1/12 Net Sales $382M; Adjusted EBITDA $306M (a)(b) Adjusted EBITDA $105M (a)(b) Adjusted EBITDA $87M (a)(b) Global Batteries P
Slide 10: Providing Quality & Value to Retailers and Consumers Worldwide
Providing Quality & Value to Retailers and Consumers Worldwide Diverse Portfolio Across Attractive Categories Net sales and adjusted EBITDA of $3.25 billion and $473 million for LTM 7/1/12(a) Home & Global Garden Batteries & Value Model drives success of strong, well- 12% Appliances 70% recogniz
Slide 11: Successful track record of deleveraging
Successful track record of deleveraging Track record of using strong free cash flow generation to reduce debt Proven Integrator: management team successfully integrated Russell Hobbs, exceeding synergy goals as well as more recent add-ons Furminator and Black Flag Significant NOLs and limited
Slide 12: HHI Business Review
HHI Business Review Greg Gluchowski
Slide 13: HHI Group Overview
HHI Group Overview Est. 1910 Est. Est.1946 1946 Est. Est.1904 1904 Est. Est.1946 1946 Est. Est.1843 1843 Est. 1901 Est. 1901 Est. 1947 Est. 1947 Est. Est.1910 1910 Est. 194 Revenue by Segment (6/30/12 LTM) 6/30/12 LTM Financial Highlights Revenue by Geography (6/30/12 LTM) Tong Lung RoW 5% Latin 7%
Slide 14: Leading Market Positions
Leading Market Positions HHI Market Shares • Largest tubular lock manufacturer globally U.S. Residential Lockset Market Canada Residential Lockset Market • #1 U.S. lockset 39% 42% Other Other • #1 Canadian lockset Other 54% Other 54% 55% 55% • #1 U.S. luxury hardware 1% 6% 1% 2% • #1 U.S. residentia
Slide 15: Strong Distribution & Channel Penetration
Strong Distribution & Channel Penetration Installed base, strong product and brand presence drives pull through demand in all channels • Large install base Brands Est. 1910 Est. 1946 Est. 1904 Est. 1946 Est. 1843 Est. 1901 Est. 1947 • Strong builder Est. 1910 Est. 1946 Est. 1904 Est. 1946 relations
Slide 16: Spectrum HHI's Growth Opportunities
Spectrum HHI’s Growth Opportunities Recovery in Residential Construction Market Innovation & Technology Adoption • U.S. housing starts still substantially below long term • HHI is recognized as an innovation leader, having average of one million per year pioneered residential keypad electronic deadb
Slide 17: The Combined Company
The Combined + Company David Lumley 17
Slide 18: Powerful Roster of Renowned Consumer Brands
Powerful Roster of Renowned Consumer Brands Category Select Key Brands Market Position #3 (North America / fast growing) Consumer batteries #2 (Europe) #1 (Latin America) #2 (North America, UK, Australia) Electric shaving and grooming #2 / #3 (Continental Europe) #1 (Australia) Electrical personal c
Slide 19: Transaction Significantly Increases Scale and Cash Flow
Transaction Significantly Increases Scale and Cash Flow… Financial Scale – LTM 7/1/12 Revenue ($mm) Adjusted EBITDA ($mm)(a)(b) $4.2 $661 +30% +40% $3.2 $473 Standalone Combined Standalone Combined (a) See table on slide 25 for reconciliation of non-GAAP metrics. Includes results of Tong Lung Metal
Slide 20: Product Breadth and Product Diversification
…Product Breadth and Product Diversification… Product Diversification Geographic Balance Revenues by product line Revenues by geography Home & Garden Pre HHI- Post Pre Post 12% Locks & Hardware RoW RoW 18% 44% 39% Pet Supplies HHI- 18% Faucets 5% Home & Garden 9% Pet Batteries & Batteries & Supplies
Slide 21: Improves Channel Mix and Provides Deeper Penetration in Key Accounts
…Improves Channel Mix and Provides Deeper Penetration in Key Accounts… Spectrum HHI Combined 2011 SPB Revenue Breakdown 2011 HHI Revenue Breakdown 2011 Combined Revenue Breakdown #1 Customer: #1 Customer: HC #1: 25% Others: Others: ~19% 24% 54% ~66% Others: HC #1: ~8% 58% HC #2: 21% Top 2-10 : 18% H
Slide 22: And Enhances Margins with Robust FCF Profile
…And Enhances Margins with Robust FCF Profile 7/1/12 LTM Adjusted EBITDA margins 19.1% 15.6% 14.6% SPB HHI Combined 7/1/12 LTM Adjusted EBITDA – Capital Expenditures(b) ($mm) $5 $605 $169 $431 (b) SPB HHI Estimated year 1 synergies PF SPB (a) Includes results of Tong Lung Metal Industry Co. Ltd. for
Slide 23: Transaction Rationale Summary
+ Adds leading maker of residential locksets, residential builders’ hardware and faucets with #1 positions in key North American markets and portfolio of renowned brands Increases Spectrum Brands’ top-line growth and margins and is expected to be significantly and immediately accretive to EPS, E
Slide 24: Appendix
BRANDS 0} Spectrum Appendix
Slide 25: TABLE A: Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
TABLE A: Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA LTM July 1, LTM July 1, LTM July 1, LTM July 1, LTM July 1, LTM June 30, LTM June 30, LTM June 30, 2012 2012 2012 2012 2012 2012 YE Dec. 31 2011 2012 2012 CORP/ HHI (excl. Tong HHI (inc. Tong GBA PET H&G Unallocated SPB Long) Tong
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