Helen of Troy : Investor Presentation October 2021
HELE
Investor Presentation
October 2021
Invest in
Leadership
Brands
Optimize
Capital
Deployment
Maximize
Operating
Efficiency
Accelerate
Shared Service
Excellence
Unify,
Include &
Elevate the
Best People
Double
Down on
International
Selective
& Strategic
M&A
Consumer
Centric
Forward Looking Statements and Reconciliation of Non-GAAP Financial Measures
Forward Looking Statements:
Certain written and oral statements made by the Company and subsidiaries of the Company may constitute "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this presentation. Generally, the words "anticipates", "believes", "expects", "plans", "may", "will", "would", "should", "seeks",
"estimates", "project", "predict", "potential", "currently", "continue", "intends", "outlook", and other similar words identify forward-looking statements. All statements that address operating results, events or developments that the Company expects or anticipates will occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon its current expectations and various assumptions. The Company believes there is a reasonable basis for these expectations and assumptions, but there can be no assurance that the Company will realize these expectations or that these assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, the Company cautions readers not to place undue reliance on forward-looking statements. The forward-looking statements contained in this press release should be read in conjunction with, and are subject to and
qualified by, the risks described in the Company's Form 10-Q for the fiscal quarter ended August 31, 2021, and in the
Company's other filings with the SEC. Investors are urged to refer to the risk factors referred to above for a description of these risks. Such risks include, among others, the Company's ability to successfully manage the demand, supply, and operational challenges associated with the actual or perceived effects of COVID-19 and any similar future public health crisis, pandemic or epidemic, the Company's ability to deliver products to its customers in a timely manner and according to their fulfillment standards, actions taken by large customers that may adversely affect the Company's gross profit and operating results, the Company's dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including from the effects of COVID-19, the Company's dependence on sales to several large customers and the risks associated with any loss of, or substantial decline in, sales to top customers, expectations regarding recent acquisitions and any future acquisitions or divestitures, including the Company's ability to realize related synergies along with its ability to effectively integrate acquired businesses or disaggregate divested businesses, the Company's reliance on its Chief Executive Officer and a limited number of other key senior officers to operate its business, obsolescence or interruptions in the operation of the Company's central global Enterprise Resource Planning systems and other peripheral information systems, occurrence of cyber incidents or failure by the Company or its third-party service providers to maintain cybersecurity and the integrity of confidential internal or customer data, the Company's dependence on third-party manufacturers, most of which are located in the Asia Pacific market, and any inability to obtain products from such manufacturers, risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors, the geographic concentration and peak season capacity of certain U.S. distribution facilities which increase its risk to disruptions that could affect the Company's ability to deliver products in a timely manner, risks associated with the use of licensed trademarks from or to third parties, the Company's ability to develop and introduce a continuing stream of innovative new products to meet changing consumer preferences, the risks associated with trade barriers, exchange controls, expropriations, and other risks associated with domestic and foreign operations, the risks associated with significant changes in or the Company's compliance with regulations, interpretations or product certification requirements, the risks associated with the Company's discussions with the EPA on the implementation of compliance plans related to certain of its products within the Health & Home segment, the risks associated with global legal developments regarding privacy and data security that could result in changes to its business practices, penalties, increased cost of operations,
or otherwise harm the business, the risks associated with accounting for tax positions and the resolution of tax disputes, the risks of potential changes in laws and regulations, including environmental, health and safety and tax laws, and the costs and complexities of compliance with such laws, the Company's ability to continue to avoid classification as a Controlled Foreign Corporation, the risks associated with legislation enacted in Bermuda and Barbados in response to the European Union's review of harmful tax competition, the risks of significant tariffs or other restrictions being placed on imports from China or Mexico or any retaliatory trade measures taken by China or Mexico, the risks associated with product recalls, product liability and other claims against the Company, and associated financial risks including but not limited to, significant impairment of the Company's goodwill, indefinite-lived and definite-lived intangible assets or other long-lived assets, risks associated with foreign currency exchange rate fluctuations, increased costs of raw materials, energy and transportation, projections of product demand, sales and net income, which are highly subjective in nature, and from which future sales and net income could vary in a material amount, the risks to the Company's liquidity or cost of capital which may be materially adversely affected by constraints or changes in the capital and credit markets and limitations under its financing arrangements. The Company undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.
Reconciliation of Non-GAAP Financial Measures:
This presentation includes non-GAAP financial measures. Adjusted Operating Income, Adjusted Operating Margin, Adjusted Income, Adjusted Diluted Earnings per Share ("EPS"), Core and Non-Core Adjusted Diluted EPS, Free Cash Flow, Free Cash Flow per Diluted Share, and Outlook for Consolidated, Core and Non-Core Net Sales Revenue, Diluted
EPS and Adjusted Diluted EPS Excluding Impact of the EPA Matter ("Non-GAAP Financial Measures") that are
discussed in this presentation or in the accompanying tables may be considered non-GAAP financial information as contemplated by SEC Regulation G, Rule 100. Accordingly, the Company is providing the tables within this presentation which reconcile these measures to their corresponding GAAP-based measures. The Company believes that these non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. The Company believes that these non- GAAP financial measures, in combination with the Company's financial results calculated in accordance with GAAP, provide investors with additional perspective regarding the impact of certain charges and benefits on applicable income, margin and earnings per share measures. The Company also believes that these non-GAAP measures facilitate a more direct comparison of the Company's performance with its competitors. The Company further believes that including the excluded charges and benefits would not accurately reflect the underlying performance of the Company's operations for the period in which the charges and benefits are incurred, even though such charges and benefits may be incurred and reflected in the Company's GAAP financial results in the near future. The material limitation associated with the use of the non-GAAP measures is that the non-GAAP measures do not reflect the full economic impact of the Company's activities. These non-GAAP measures are not prepared in accordance with GAAP, are not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, undue reliance should not be placed on non-GAAP information.
Evolution of Transformation Strategy
Phase I: FY15-FY19
Phase II: FY20-FY24
Invest in
Leadership
Brands
Optimize
Double
Down on
Capital
International
Deployment
Maximize
Selective
Operating
& Strategic
Efficiency
M&A
Accelerate
Consumer
Shared Service
Centric
ExcellenceUnify,
Include &
Elevate the
Best People
3
Phase I Generated Excellent Results and Phase II Continuing Strong
Revenue
($ in Millions)
Adjusted Operating Income ($ in Millions)
$2,099
$334
$1,707
$269
$239
$1,564
$224
$1,479
$210
$183
$188
$194
$1,383
$1,398
$1,308
$1,335
Adjusted
14.0%
14.1%
14.0%
15.0%
15.1%
15.3%
15.8%
15.9%
YOY Growth
1.5%
2.1%
3.6%
1.0%
5.8%
5.8%
9.2%
22.9%
Operating
Margin
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Free Cash Flow ($ in Millions)
Non-GAAP Adjusted Diluted EPS
$254
$11.65
$197
$205
$174
$215
$9.30
$166
$154
$8.06
$7.24
$114
$6.49
Free Cash Flow
$5.71
$5.50
$5.78
$3.51
$5.71
$5.34
$7.06
$7.52
$6.62
$10.01
$8.55
per Diluted Share
$4.50
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
4
Phase I
Phase II
Strong Portfolio of Leadership Brands
Differentiated Market Leader
Higher Margin
Growth Adjacencies
Asset Efficient
Leadership Brand Progression
˜44%
˜56%
˜19%
˜81%
Leadership
Leadership
Brands
Brands
Beginning of
FY21
Phase I
Phase II
Transformation
Transformation
FY2014
Leadership Brand Net Sales Growth CAGR
17.1%*
11.1%
Phase I
Phase II to Date
(FY14 - FY19)
(FY20 - FY21)
* Fiscal 2021 includes a full year of net sales revenue from Drybar Products LLC, acquired on January 23, 2020, compared to approximately five weeks of net sales revenue in fiscal 2020.
5
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Disclaimer
Helen of Troy Limited published this content on 25 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2021 16:13:03 UTC.