Request-Investor Presentation Q2 2010 GOR Final
-
Upload
jonesdave48 -
Category
Documents
-
view
223 -
download
0
Transcript of Request-Investor Presentation Q2 2010 GOR Final
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
1/41
econ uartersca
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
2/41
Exceptforthehistoricalinformationcontainedherein,thisnewsreleasecontainsforwardlooking
statementsconcerningWD40Company'soutlookforsales,earnings,dividendsandotherfinancial
results.Thesestatementsarebasedonanassessmentofavarietyoffactors,contingenciesand
.
anduncertainties,whichmaycauseactualresultstodiffermateriallyfromtheforwardlooking
statements,including
impacts
of
promotional
programs,
impacts
of
line
extensions
and
the
uncertaintyofmarketconditions,bothintheUnitedStatesandinternationally.Thecompany's
expectations,beliefsandprojectionsareexpressedingoodfaithandarebelievedbythecompany
tohaveareasonablebasis,buttherecanbenoassurancethatthecompany'sexpectations,beliefs
orprojectionswillbeachievedoraccomplished.
Therisks
and
uncertainties
are
detailed
from
time
to
time
in
reports
filed
by
WD
40
Company
with
theSEC includin Forms8K 10 and10K andreadersareur edtocarefull reviewtheseand
otherdocuments.
TheinformationcontainedinthispresentationisareviewoftheCompanysfiscal2009results
endedAugust31,2009andsecondquarterfiscal2010resultsendedFebruary28,2010. Weurge
nves ors
o
s ay
n orme
an
up a e
on
e
ompany s
eve opmen s
y
rev ew ng
e
Companysquarterlypressreleasesandconferencecallsastheyarepostedonthewebsite:
www.wd40company.com (InvestorRelations).
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
3/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
4/41
Guiding PrinciplesVision
Our brands will create positive lasting memories as they become solutions that doersand on-the-job users around the world turn to first to get the job done. By doing so, wewill provide attractive economic returns for our stakeholders and meaningful work andopportunity for our tribe.
Our purpose is to deliver unique, high value and easy-to-use solutions for a widevariety of maintenance needs of doer and on-the job users by leveraging and
Mission- .
brands readily accessible to end-users primarily through automotive, hardware, DIY,and industrial channels, categories, or departmentswherever they are sold.
Values
We value doing the right thing. (Trust) We value creating positive lasting memories in all our relationships. (Relationships) We value making it better than it is today. (Creative Innovation) We value succeeding as a team while excelling as individuals. (Teamwork) . We value sustaining the WD-40 Company economy. (Economic Value)
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
5/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
6/41
- -
Results in a tribalculture that values:
Servant leadership with edgeVision
ar ng
Candor
Accountability
Responsibility
ValuesLearning
What mountain do
we want to climb?
Learning
my paper
help me get
that guide ourbehavior
Review
Planningomen an A
2010 The Learning Moment Inc.
Typhoon ZoneExecutionAll rights reserved. Do not duplicate.
thelearningmoment.net
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
7/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
8/41
Your FORTRESS of Brands!Created
the spraylubricantmarket.
Created theaerosol carpetstain remover
Created theUK carpet
stainremover
Created thefirst
industrialrade
80% share
of USconsumermarket.
#1 brand.
.non toxic,
biodegradable,VOC free
trigger spray.
market.
40% shareof UKconsumer
market. #1
silicone
applicationwith NSFH1 & H2
registration.
Created the drip oil
market in the US.Strong presence in
Created
Australianheavy-duty
Created the
US heavy-duty
.
urope a n mer ca. an c eanermarket. #1 brand in Grocery.
Created the Created theCreated rug
.brand in Grocery.
-
ATBC market.#1 brand.
removermarket.
market. #2brand, #1 inaerosol.
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
9/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
10/41
The Industrial Professional
Consumer?
The IndustrialProfessional
The Trades Professional
The Trades
The Doer
The Doer
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
11/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
12/41
Sell to the consumer & make it easy to buy!
Dollar stores
Auto Parts
Office Supply
Home Improvement
Industrial Supply
Sporting Goods
GroceryDiscount Stores
Plumbing Clubs Hardware
Dru Stores
MilitaryElectrical
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
13/41
STRATEGIC DRIVERS
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
14/41
Establish the WD-40 brand in identifiedemerging and
Euro e, Asia & Latin America as a whole, with focus on
Direct European Markets
Direct Asia Markets Global emerging distributor markets
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
15/41
Maximize our position in multi-purposemaintenance products
-
The Industrial Maintenance Repair Specialist The Tradesman
The Doer
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
16/41
acquisitions, joint ventures & licensing
Make targeted acquisitions in our markets andsegment of strength
Partner with others to combine our strengths to
cultivate new opportunities
Seek out licensing options that provide additional
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
17/41
-
WD-40 brand exploration is a strategicinitiative to understand how we mightleveragethe trust the WD-40 brand has
established with its wide end-user base togrow revenue and profits without harming thecore brand.
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
18/41
PLATFORM
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
19/41
Investment SnapshotGlobal, diverse business
WD-40 sold in more than 160countries worldwide.
Asset light strategy
Average annual capex needs of$3.8M FY07-FY09.
Focused on creating value
ROIC emphasis. ROIC was15.5% in FY08 and 15.8% in FY09.
outside the US.
Brands sold in multiple channels:retail, industrial, institutional.
Portfolio of 10 brands.
distribution.
Currentandlongtermreturnto
shareholders...
*
and profit drivers.
Priority in new productdevelopment (NPD) investment
Efficient Operation
310 employees during FY09.
Sales per employee of $0.9M.
Net income per employee of
. .
Dividend payout ratio of 60%.
1.0M shares repurchased inFY07 and FY08, totaling $35M.
Open ended share buy-back plan
.
NPD delivered more than $120Min sales from FY07-FY09.
Ownership
*$84,800. (at FY09) o approve roug12/8/2010.
Small Market Cap
$545.5M*
16.6M shares outstandin *
.
Institutions: 70.5%*
Institutions holding 5% or moreshares : BlackRock GlobalInvestors, Parnassus Investments,
Financial Foundation
Strong balance sheet
*as of 4-1-2010 Source: Nasdaq Online13F Report date 12-31-09
rong ree cas ow
Strong liquidity & access tocapital
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
20/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
21/41
esu s vs.
($M) FY10 FY09 Change
Sales 80.6$ 61.8$ 30.3%
Gross Profit % 52.4% 49.6% 5.6%
Op Income 16.6 5.3 211.4%e ncome . . .
EPS 0.64$ 0.25$ 156.0%
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
22/41
Constant Currency Basis*
($M) FY10 CC FY09 Change
a es . . .
Op Income 15.6 5.3 194.3%
. . .
EPS 0.60$ 0.25$ 139.5%
*
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
23/41
Q2 FY10 Com ared to Q2 FY09Sales $80.6M, Up 30.3%
Multi-purpose maintenance products up
Gross Margin 52.4% vs. 49.6% (+2.8pp)
Price increases (+0.1pp)39.4%
Homecare & Cleaning segment up 1.1% Americas up 18.7%, Europe up 46.5%, and
Lower discounts (+1.4pp)
Lower oil-based material costs (+0.7pp)
Higher aerosol can costs (-1.5pp).
Operating Expense - $25.6M, Up 1.2%
SG&A up $2.3M due to both higher people
mpacts re ate to sourc ng c anges(+1.4pp)
Sales mix and other impacts (+0.7pp)
related expenses and unfavorable FX impact
A&P up $0.8M
Q2 FY09 included a $2.8M impairment
FX Impact Constant Currency vs.Reported
At Q2 FY09 FX rates, sales and netincome would have been lower b $3.9M
c arge no repea e nand $0.7M, respectively
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
24/41
esu s vs.
($M) FY10 FY09 Change
Sales 158.3$ 145.4$ 8.8%
Gross Profit % 51.9% 47.7% 8.8%
Op Income 31.3 17.4 80.0%e ncome . . .
EPS 1.20$ 0.71$ 69.0%
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
25/41
Constant Currency Basis*
($M) FY10 CC FY09 Change
a es . . .
Op Income 30.8 17.4 77.0%
. . .
EPS 1.18$ 0.71$ 66.1%
*YTD FY10 results translated at YTD FY09 exchange rates
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
26/41
YTD FY10 Com ared to YTD FY09Sales $158.3M, Up 8.8%
Multi-purpose maintenance products up
Gross Margin 51.9% vs. 47.7% (+4.2pp)
Price increases (+0.8pp)
11.8%
Homecare & Cleaning segment down 1.6%
Americas up 6.2%, Europe up 12.5%, and
Lower discounts (+1.2pp)
Lower oil-based material costs (+2.2pp)
Higher aerosol can costs (-2.4pp)
s a ac c s up .
Operating Expense - $50.8M, Down 2.2%
mpacts re ate to sourc ng c anges(+1.7pp)
Sales mix and other impacts (+0.7pp)
.
people related expenses
A&P up $0.6M
FY09 included $2.8M impairment charge
FX Impact Constant Currency vs.Reported
At YTD FY09 FX rates, sales and netincome would have been lower b $2.1M
not repeated in FY10 and $0.4M, respectively
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
27/41
2010
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
28/41
* Sales growth between 5.5% and 9.9%, with Net Sales of
-
A&P investment in the range of 6.5% to 8.0% of Net Sales
Net Income of $32.2 - $33.8 million
EPS of $1.92 to $2.01 based on estimated 16.8 millionweighted average shares outstanding
*Guidance as of April 2010
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
29/41
Continued lobal economic recover
Gross Margin
Stability in key input costs oil & steel
Less volatile foreign currency exchange rates
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
30/41
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
31/41
Impacts to Recent Results
Sales impacted by unfavorable global economic
Significant decline in US Homecare & Cleaningproducts, with signs of stabilization in FY10
Steady gross margin improvement driven by price,
High volatility experienced in major input costs,articularl oil-based materials and aerosol cans
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
32/41
Im acts to Recent Results Significant impact from foreign currency exchange rates
(FX) in FY09
Sales and profits from international segments were negativelyimpacted when converted to US dollars
Stron US dollar created rice increases in some internationalmarkets
Product sourced in the US and purchased by international
se ments effectivel became more ex ensive
Non-cash impairment charges in FY08 and FY09 across
e arpe res an - ran s o a ng m on
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
33/41
Sales Net Income$M $M
$320
30
$32+3.0%
$290
$300$28
-12.4%- 7.9%
-4.8%
$270
$280
' ' '
$24
' '
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
34/41
Multi-Purpose Maintenance Products
Sales $MCore business with CAGR of 8% since 2003
WD-40 and 3-IN-ONE brands
77% of total sales
Strong growth in developing markets and dueMPMP
to NPD
Homecare & Cleaning Products
HCCP
Carpet Fresh, No Vac, X-14, 2000 Flushes,Spot Shot, 1001, Lava and Solvol brands
23% of total sales
$0 $50 $100 $150 $200
'07 '08 '09
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
35/41
Sales b Geo ra hic Se mentAsia, Australia, Pacific Islands9% of total business in FY09
WD-40, 3-IN-ONE, Solvol, No VacSales $M
Direct market in China
Europe, Middle East, Africa
33% of total business in FY09
WD-40, 3-IN-ONE, 1001
Organic sales CAGR of 14% sinceFY03
$0 $50 $100 $150 $200North, Central & South America
58% of total business in FY09
'07 '08 '09 All brands except 1001 and Solvol
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
36/41
Sales Comparison - Constant Currenc
$180
$200
FY08 FY09 FY09CC
$140
$160
Sales $M
$80
$100
$20
$40
$60
$0Americas Europe AsiaPac
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
37/41
Sales Recover in Second Half$80.0
$100.0
$40.0
$60.0
$0.0
.
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
FY08 $79.2 $78.9 $82.1 $76.9
Sales $M
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
38/41
vs.
($M) FY09 FY08 Change
Sales 292.0$ 317.1$ -7.9%
Gross Profit % 49.5% 46.8% 5.8%
Op Income 39.8 42.7 -6.7%
e ncome . . - .
EPS 1.58$ 1.64$ -3.9%
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
39/41
FY09 Com ared to FY08Sales $292.0M, Down 7.9%
MPMP down 5% and HCP down 18%,including negative FX impact
YTD Gross Margin 49.5% vs. 46.8%(+2.7pp)
Price increases (+4.7pp)
Americas down 5%, Europe down 12%,
and Asia Pacific down 12%
g er aeroso can cos s - . pp
Impact from sourcing changes andproduct conversions (+0.5pp)
Unfavorable foreign exchange impact to- . ,
0.8%
SG&A expense down $5.8M due to FX
impact and lower freight, partially offset by
cost of products (-0.6pp)
Sales mix (-0.4pp)
g er peop e an cos s
A&P down $0.4M due to timing andfavorable FX impact
Higher brand impairment of $5.4M vs.
.Reported
AtFY08FXrates,FY09saleswouldhavebeen$29.9Mhigherthantheactualreported
FY08 related to Carpet Fresh & X-14
.
thanthe
actual
reported
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
40/41
Constant Currency Basis*
($M) FY09 CC FY08 Change
a es . . .
Op Inc 46.1 42.7 8.0%
. . .EPS 1.84$ 1.64$ 12.5%
*
-
8/2/2019 Request-Investor Presentation Q2 2010 GOR Final
41/41
Managing our business Being positivew t r gor Being realistic
Being responsive
the balance of sales and
profit growth
Being responsible
Being accountable
Helping our people get an
Living our values