Mike Poteshman, Exec. VP & CFO September 2014/media/Files/T/TupperWare-IR/... · *Full Year 2013 ....
Transcript of Mike Poteshman, Exec. VP & CFO September 2014/media/Files/T/TupperWare-IR/... · *Full Year 2013 ....
March 2013
Building C O N F I D E N C E
Together
Mike Poteshman, Exec. VP & CFO September 2014
We are making some forward looking statements today that use words like “outlook” or “target” or similar predictive words. Such forward looking statements involve risks and uncertainties detailed in our recent periodic reports as filed in accordance with the Securities and Exchange Act of 1934. These risks and uncertainties may cause actual results to differ materially from our statements today.
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www.tupperwarebrands.com
Forward Looking Statements
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Our Going Forward Objective
Sustain Tupperware Brands position as the premier, relationship-based global marketer of
quality innovative products and brands.
Commonly Asked Questions
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Organizational Structure - how are you organized, by country, by region and globally; and what is your level of visibility into the business
Levers for sustainable growth and to mitigate external forces
Runway left in the business…near term…next decade
Uses of Cash
How the Business is Organized
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Market: Managing Director
• Head of Sales • Head of Marketing • Head of Finance
3 Global Regions: • Americas • Europe Africa & Middle East • Asia Pacific Group President Heads of major functional areas
Corporate: CEO – Leadership Development & Strategic focus COO – Day to day operations Heads of major functional areas
Visibility
Weekly: Reporting & Calls from markets Monthly: Monthly Performance Review, Formalized calls with markets
Weekly / Daily contact Managing Directors
Daily contact Sales Force
Decentralized Structure
Typical Country Structure Distributor Model
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TUPPERWARE GERMANY Est. 1962
Headquarters in Frankfurt/Main
Logistics center in Eppertshausen
Approx. 270 Team Leaders
130 Distributors Each controls a specific geography
Approx. 4,050 Unit Managers
Approx. 62,000 Demonstrators
Belgium Manufacturing & Warehouse
Tours Manufacturing
Germany Distributor Structure
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2 Team Leaders
450 Demonstrators
Average German distributor has
30 Unit Managers
Sales per Distributor varies by market
Levers for Sustainable Growth
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Multi Local System Formula Based on 4 Drivers:
Product Innovation
Entertaining & Informative Selling Method
Compelling Sales Force Opportunity & Structure
Solid Business Fundamentals
Selling Method
RELATIONSHIP BASED
VALUE ADDED DEMONSTRATION
PERPETUATES PENETRATION
Fundamentals
PRIMARY DRIVERS: RECRUIT, TRAIN,
MOTIVATE
REINFORCED BY: CONTACT, COMPETITION,
RECOGNITION
Real Opportunity
SALES OR SALES MANAGEMENT
SUPPLEMENTAL INCOME TO SERIOUS MONEY
Brand & Product
TRUSTED AND POWERFUL BRAND
HIGH QUALITY, INNOVATIVE AND DEMONSTRABLE PRODUCTS
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Tupperware Business Model
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Product Innovation
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ENGAGED LEADERSHIP
FAMILY BUSINESS
FOCUSED TERRITORY
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BAKING & OVENWARE
KITCHEN TOOLS & GADGETS
FOOD STORAGE
Approximately 25% of Sales each year to come from new products (products introduced in the last 2 years)
MICROWAVE ON-THE-GO & WATER
KITCHEN PREP
TABLE TOP & SERVING
CUTLERY & COOKWARE
Entertaining & Informative Selling Method
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Group Presentation = Party Party every 1.3 seconds
Advertising Retail Rent
Compelling Sales Force Opportunity & Structure
Earnings Opportunity Career Opportunity
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Part-time Supplemental
Income
Super Seller
Demonstrator
Unit Manager
Team Leader
Distributor
Solid Direct Sales Fundamentals
• Training • Recognition • Competition • Motivation
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Levers to Mitigate External Forces
Foreign Currency Raw Material Pricing Inflation
Compression in consumer spending
Hedge transaction FX exposure/ Manage business in local currency
Global Purchasing Council We own the shelf / Price with consumer inflation We are Sellers
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Balanced Global Portfolio
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Europe, 30%
Asia Pacific, 31%
TW North America, 13%
Beauty North America, 11%
South America, 15%
June 2014 YTD Segment Sales as % of Total
Emerging AND Established Markets Established Markets 14% WORLD POPULATION
Emerging Markets 86% WORLD POPULATION
WE'RE AN
AND STORY! 16
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Tupperware AND Beauty
*Full Year 2013
79% Tupperware Branded Housewares
21% Beauty & Personal Care Products
TWB – Supported by Social Media
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Tupperware Hostesses and
Fans
Host 2 Parties per Year
− Affiliation − Allegiance − Advocate
Promoters of Brand & Products
− No Rent − No Advertising
Interactive Selling System
− 2.9M Sales Force − Party every 1.3 sec − Driven by Earning
Opportunity and Career path
Social Network
iTup
(Think Rosetta Stone)
Sales Force Webinars
Living Cook Books
Longer Term Growth Drivers
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Emerging Market Penetration
Emerging Middle Class* Asia Pacific expected to triple in size to 1.7B and Central & South America to grow 40% by 2020
Growing Millennial Population** More entrepreneurial and relationship driven. Expected to be 50% of workforce by 2020
Urbanization: Under served urban centers and populations
Technology
*Source: OECD, The Emerging Middle Class in Developing Countries, January 2010 **Source: Barrons, “Millennials on the Rise,” April 2013
Dynamic Emerging Market Sales
EMERGING MARKETS 66% OF
JUNE 2014 YTD SALES
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+12% LC June 2014 YTD
Argentina +43%
TW Mexico +4%
Brazil +22%
Turkey +23% China
+29%
Indonesia +20%
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Avroy Shlain +22%
Basket of Global Currencies
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Key Sales & Profit Currencies
• Euro • Indonesian Rupiah • Mexican Peso • Brazilian Real • Malaysian Ringgit
>90% of 2013 sales and profit from outside the U.S.
Consistently Growing Sales & EPS
$0
$1
$2
$3
$4
$5
$6
$7
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2009 2010 2011 2012 2013 2014*Sales Diluted EPS Adjusted Diluted EPS
Sales $million Diluted EPS includes impact of non-cash purchase accounting asset impairment charges
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EPS $Dollar
*High end of guidance range provided in July 23, 2014 Earnings Release. Impact of changes in foreign currency versus prior year are updated monthly and posted on: http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm
Diluted EPS includes impact of Venezuelan devaluation from balance sheet items
Free Cash Flow (as Reported)
$0
$50
$100
$150
$200
$250
$300
2009 2010 2011 2012 2013 2014*
$Milli
ons
Net Cash Flow before Financing Activities (Free Cash Flow) GAAP Net Income
* High end of guidance range provided in July 23, 2014 Earnings Release. Impact of changes in foreign currency versus prior year are updated monthly and posted on: http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm 23
GAAP Net Inc. includes Impact of non-cash
Purchase Accounting Asset impairment
charges
GAAP Net Inc. includes impact from Venezuelan devaluation on balance sheet items
Business Use of Cash
Quarterly Dividends Declared
72% increase
$2.48 per share annualized
$128M
Open Market Share
Repurchases
$375M in 2013
4.6 Million Shares
Quarterly Dividends Declared
10% increase
$2.72 per share annualized
$135M
Open Market Share
Repurchases
$130M in 2014
Invest in the Business Invest in the Business
Full Year 2013 Full Year 2014
Cash Returned to Shareholders $9.54* Cash Returned to Shareholders $5.20*
*Based on full year diluted shares and for 2014 guidance provided on July 23, 2014 24
Quarterly Dividends Declared
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$0.22 $0.25
$0.30
$0.36
$0.62
$0.68
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
1996-2009 2010 2011 2012 2013 2014*
Dividend per Share
+14%
Announce 50% Payout
target on trailing EPS ex. items
+20% +20%
+72%
+10%
Annualized Dividend 2011 $1.20 2012 1.44 2013 2.48 2014 2.72
Local Currency Sales: +4% to 5% • Emerging Markets: up high single-digit • Established markets: down low single-digit
EPS Excluding Items: $5.40 - $5.50 • Up 9 to 11% LC, -1 to 1% USD, vs. $5.43 in 2013 • GAAP $4.12 to $4.22 • 48 cents negative FX on EPS excluding items
Pre-Tax ROS, excluding items: 13.9% • GAAP pre-tax ROS 11.3% • Longer range ROS increase target: 50 bp • 2013 Pre-Tax ROS 14.1% 2014 vs. 2013 translation FX -56 bp 2014 LC Operating Margin Improvement +60 bp Incremental 2014 interest -30 bp 2014 High end pretax ROS 13.9%
2014 Full Year Outlook*
26 *Guidance range provided in July 23, 2014 Earnings Release. ROS high end. Impact of changes in foreign currency versus prior year are updated monthly and posted on: http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm
Outlook* Q3 2014 Full-year 2014
USD Sales* -2% to Even -2% to Even
GAAP EPS $0.54 - $0.59 $4.12 – $4.22
GAAP Pre-tax ROS 7.2 – 7.7% 11.2 – 11.3%
Local Currency Sales 3% to 5% +4 to 5%
EPS, excluding items** $0.89 - $0.94 $5.40 - $5.50
Pre-tax ROS, excluding items 10.1 – 10.5% 13.9%
FX Impact on EPS comparison, excluding items
($0.12) ($0.48)
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*Venezuelan operating activity at 6.3, 10.8 and 50 bolivars/$ in 1Q, 2Q and 2H respectively
**GAAP to non-GAAP reconciliation attached to 2Q earnings release 27
Full Year 2014 EPS* Outlook
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$5.43 ($0.48)
($0.12) ($0.05) $0.06
$0.44
$0.22 $5.50
$4.50
$4.70
$4.90
$5.10
$5.30
$5.50
$5.70
$5.90
$6.10
2013 FX 2013 at2014 Rates
Int Exp Tax Unalloc Ops Shares 2014
*High end of 2014 outlook range excluding items, GAAP to non-GAAP reconciliation on slide 30
$4.95
1% Increase
11% Increase
* As of July 23, 2014. 2016 and beyond. Plan to announce 2015 Guidance in January 2015.
Double Digit EPS Growth driven by:
• Local Currency Sales: +6% to 8% • Emerging markets about 10% • Established markets low single digit
• Pre-Tax ROS, excluding items: 50 bps improvement per year into the mid- to high-teens
• Some offset from tax rate: going to 27-28% over time
• Share repurchases
Longer Range Outlook*
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Non-GAAP Financial Measures Reconciliation
2011 2012 2013 Q1 2014 Q2 2014 Q3 2014* 2014* Net Income (GAAP) $218.3 $193.0 $274.2 $52.2 $47.6 $30.2 $214.7
Adjustments: Gains on disposal of assets including insurance recoveries (3.8) (7.9) (0.7) (1.8) (0.5) (2.3) Re-engineering and other restructuring costs 9.6 22.1 9.3 3.9 4.2 2.2 11.8 Impact of Venezuelan bolivar devaluation from balance sheet positions 4.2 13.4 22.2 11.9 48.0 Swap impairment and debt cost write-off 19.8 Acquired intangible asset amortization 2.9 2.1 4.8 2.9 3.0 3.0 12.0 Purchase accounting intangibles and goodwill impairment 36.1 76.9 Income tax impact of adjustments (9.6) (4.8) (3.5) (3.7) (1.4) 0.6 (4.0)
Net Income (Adjusted) $273.3 $281.4 $288.3 $66.9 $75.1 $47.9 $280.2
Adjusted ROS 13.9% 14.1% 14.1% 13.5% 14.7% 10.5% 13.9% Average number of diluted shares (millions) 61.4 56.4 53.1 51.1 51.1 51.0 50.9
30 *High end of guidance range provided in July 23, 2014 Earnings Release. Impact of changes in foreign currency versus prior year are updated monthly and posted on: http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm
Venezuela Impact
• Mid-June: Mandated 55% average reduction in prices
• FX impact on Profit comparison for 2Q of 4 cents on EPS
Items • $29 million pretax hit for from
translating net monetary assets from 6.3 to 10.8 Bolivars/$ in 1Q and then to 50.0 Bolivars/$ in 2Q
• $6 million comparison hit from inventory in cost of sales at 6.3 versus 10.8 Bs/$ exchange rate
• Large FX impact on Sales & Profit comparison for 2H
• 3 point FX impact on sales • 18 cents on EPS
• Profit ex “items” at breakeven: Incremental 3 cent impact after FX
• $12 million comparison hit from inventory in cost of sales at 10.8 versus 50.0 Bs/$
1H 2014 2H 2014
31 *In 1H 2014, sales and segment profit for Venezuela were $57M and $19M respectively. At the 50.0 bolivar/$ exchange rate, this will generate FX comparison hits in 1H 2015 v. 1H 2014 of $47M and $16M ($0.21/share)
March 2013
Building C O N F I D E N C E
Together
Mike Poteshman, Exec. VP & CFO September 2014