Investor presentation, Nov 2012

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Investor presentation, Nov 2012

  1. 1. Investor PresentationNovember 2012 1
  2. 2. Forward-looking statementStatements in this presentation that are not historical in nature constitute forward-looking statements. These forward-looking statementsrelate to information or assumptions about the effects of sales, income/(loss), earnings per share, operating income, operating or grossmargin improvements or declines, Project Renewal, the European Transformation Plan, capital and other expenditures, cash flow,dividends, restructuring and restructuring-related costs, costs and cost savings, inflation or deflation, particularly with respect tocommodities such as oil and resin, debt ratings, and managements plans, projections and objectives for future operations andperformance. These statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate" andsimilar expressions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Importantfactors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are notlimited to, our dependence on the strength of retail, commercial and industrial sectors of the economy in light of the continuation orescalation of the global economic slowdown or regional sovereign debt issues; currency fluctuations; competition with othermanufacturers and distributors of consumer products; major retailers strong bargaining power; changes in the prices of raw materialsand sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability todevelop innovative new products and to develop, maintain and strengthen our end-user brands; our ability to expeditiously close facilitiesand move operations while managing foreign regulations and other impediments; our ability to implement successfully informationtechnology solutions throughout our organization; our ability to improve productivity and streamline operations; changes to our creditratings; significant increases in the funding obligations related to our pension plans due to declining asset values, declining interest ratesor otherwise; the imposition of tax liabilities greater than our provisions for such matters; the risks inherent in our foreign operations andthose factors listed in the company’s latest quarterly report on Form 10-Q and Exhibit 99.1 thereto filed with the Securities and ExchangeCommission. Changes in such assumptions or factors could produce significantly different results. The information contained in thispresentation is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in thispresentation as a result of new information or future events or developments. This presentation contains non-GAAP financial measureswithin the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in this presentation is areconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance withGAAP.INVESTOR RELATIONS CONTACTS: Nancy O’Donnell Alisha Pennix VP, Investor Relations Sr. Manager, Investor Relations (770) 418-7723 (770) 418-7706 nancy.odonnell@newellco.com alisha.pennix@newellco.com 2
  3. 3. $6 billion business of leading brands 3
  4. 4. strong competitive positions 4
  5. 5. good year-to-date performance* through 9/30/12 2.2% Core Sales Growth +20 bps Normalized Operating Margin +6.7% Normalized EPS Growth $67M Shares Repurchased 88% Increase in Quarterly Dividend 5
  6. 6. affirmed full year guidance FY 2012 OutlookCore Sales 2% to 3%Currency Translation -1.5% to -2%Total Sales Growth 0% to 1.5% Up to +20 bps“Normalized” Operating Margin $1.63 to $1.69“Normalized” EPS* +3% to +6%versus last year:Cash Flow from Operations + $550 to $600Mversus last year: about flat* See reconciliation included in the Appendix. 6 6
  7. 7. driving delivery and driving change Indirect Project SAP/EPC Procurement Renewal EMEA Program New US Working Strengthened Customer Capital Balance Development Reduction Sheet Organization Initiative 7
  8. 8. good progress...much more to do We are here Delivery Strategic Acceleration Consistently do Shape the Accelerate what we say future performance 8
  9. 9. next chapter more growth dependent than last 9
  10. 10. growth unlocks higher earnings Sources of EPS growth Other Margin PURPOSE Newell Rubbermaid helps people flourish every da where they live, learn, work and playNWL is a growing brand-led business with a strong home in the United WIN Growth CT&A, IP&S, LABELING, COMMERCIAL PRODUCTSStates and global ambition BIGGER FINE WRITING WHERE TO PLAYOur Consumer brands win at the point of decision through excellence in WRITING & CREATIVE EXPREperformance, design and innovationOur Professional brands win the loyalty of the chooser by improving the WIN HOME ORGANIZATION & STproductivity and performance of the user WHERE CULINARY LIFESTYLES WE ARE HARDWARE* Assumes performance in line and customer partners across For total We collaborate with our supplier with long term objectives. the illustrative use only – not to be construed as guidance. enterprise in a shared commitment to growth and creating value INCUBATE BABY & PARENTING We deliver competitive returns to our shareholders through consistent, FOR ENDICIA, MIMIO sustainable and profitable growth GROWTH RUBBERMAID MEDICAL SOL 10
  11. 11. Growth Game Plan directing actions AMBITION PURPOSE Newell Rubbermaid helps people flourish every day, where they live, learn, work and play CT&A, IP&S, LABELING, NWL is a growing brand-led business with a strong home in the United WIN COMMERCIAL PRODUCTS States and global ambition BIGGER FINE WRITING BUSINESS MODEL WHERE TO PLAY Our Consumer brands win at the point of decision through excellence in WRITING & CREATIVE EXPRESSION performance, design and innovation Our Professional brands win the loyalty of the chooser by improving the WIN HOME ORGANIZATION & STYLE productivity and performance of the user WHERE CULINARY LIFESTYLES WE ARE HARDWARE We collaborate with our supplier and customer partners across the total enterprise in a shared commitment to growth and creating value INCUBATE BABY & PARENTING We deliver competitive returns to our shareholders through consistent, FOR ENDICIA, MIMIO sustainable and profitable growth GROWTH RUBBERMAID MEDICAL SOLUTIONS MAKE OUR BRANDS BUILD AN EXECUTION UNLOCK TRAPPED DEVELOP THE TEAM EXTEND BEYOND REALLY MATTER POWERHOUSE CAPACITY FOR GROWTH FOR GROWTH OUR BORDERS Sharpen brand Launch new USA Deliver European Drive performance Accelerate Latin America 5 WAYS TO WIN strategies on highest customer development Transformation, Project culture aligned to and Asia in Win Bigger impact growth levers organization Renewal savings, and business strategy Categories. working capital reduction Partner to win with Develop joint business Simplify everything to Build a more global Strategic insight customers and suppliers plans for new channel release costs for perspective and program in China penetration and growth talent base broader distribution EDGE: EVERY DAY GREAT EXECUTION 11
  12. 12. sharper portfolio choices Win bigger Win where we are Incubate for growth 12
  13. 13. resources focused to portfolio roles Win Writing Fine Commercial CT&A IP&S Labeling bigger Writing Products Win where Home Org Culinary Hardware we are & Style Lifestyles Incubate for Baby Mimio Endicia Medical growth Solutions consumer facing professional facing 13
  14. 14. growth accelerated by portfolio choices 5 Year Growth Contribution Win Bigger Win Where Are Incubate 75% 15% 10% 14
  15. 15. growth accelerated by wider footprint North10 year absolute growth America APAC and L America > 30% of revenue APAC N America ~60% of revenue Latin America EMEA ~10% of revenue EMEA revenue 15
  16. 16. requires reset of our algorithmoperating income margin % full portfolio, local needs and local price points investment in sales and marketing emerging developed enabled by reducing high cost in developed world 16
  17. 17. confidence to accelerate transformation Delivery Strategic Acceleration Consistently do Shape the Accelerate what we say future performance 17
  18. 18. fast return projects enable reinvestment Project Renewal Actual to date Phase I Phase II Total $Millions Q312 RenewalRestructuring Cost $63 $90 - $100 $250 - $275 $340 - $375 On Plan Savings $90 - $100 $180 - $225 $270 - $325 ($46M to date) Payback ~1.5 years 18
  19. 19. five key work streams organization – align structure to strategy EMEA transformation best cost finance best cost back office supply chain footprint 19
  20. 20. Project Renewal: expected outcomes Flatter and simplified organization with strengthened capabilities in Brand & Category Development and Execution & Delivery Accelerated release of costs, the majority of which will be invested in faster growth and the geographic expansion of our leading brands A greater line of sight to earnings and operating cash flow growth while the company invests to accelerate performance Strengthened leadership team that can drive faster implementation of Growth Game Plan 20
  21. 21. aligning structure with strategy Make brands really matter Build an execution powerhouse Unlock trapped capacity for growth Extend our boundaries Develop a growth team 21
  22. 22. two capabilities of equal stature Interdependent and Equal in Importance development delivery • strategic customer • big brand ideas • high impact specific management • strategic channel innovation responsibilities management • superior products • market-leading and design supply chain • e-brand building shared • superior service at • e-commerce accountability best cost 22
  23. 23. six new business segments writing tools industrial home solutions commercial products baby specialty office 23 23
  24. 24. a new Newell Executive team Chief Executive Officer Michael B. Polk Chief Chief Legal Chief Operating Chief Financial Chief Human Development Officer/EMEA Officer Officer Resource Officer Officer Lead Bill Burke Doug Martin Jim Sweet Mark Tarchetti John Stipancich Chief Supply Chief Design Chief Chain Officer and R&D Officer Information Meri Stevens Chuck Jones Officer Gordon Steele Chief Customer Chief Marketing Officer & Insights Joe Cavaliere Officer Richard Davies 24
  25. 25. Key leadership appointments William A. Burke III Mark Tarchetti Chief Operating Officer Chief Development Officer 25
  26. 26. Key leadership appointments Joe Cavaliere Meredith Stevens Chief Customer Officer Chief Supply Chain Officer 26
  27. 27. Key leadership appointments Richard Davies Chuck JonesChief Marketing & Insights Officer Chief Design and R&D Officer 27
  28. 28. Compelling value creation story Delivery Strategic Acceleration Consistently do Shape the Accelerate what we say future performance 2012/2013 2013/2014 2015 and beyond Consistent growth (sales, EPS) Accelerated growth (sales, EPS) Strengthened leverage metrics Strong earnings and cash flow Increased dividends Increased dividends Repurchased shares Surplus cash 28
  29. 29. Strong cash flow and increased borrowing capacityenables value creation flexibility for shareholders Next 5 years* ~$3.5B ~$3.5B Uncommitted free cash Dividends flow provides flexibility $0.7B ~$1.5 billion in Share repurchase uncommitted free cash 1. Acceleration in $0.3B flowemerging markets over next 5 years Operating 2. Accelerated cost provides flexibility for: cash flow Capex reductions Operating $1.0B • Accelerated structural cost $3.5B 3. Increased dividends cash flow reductions $3.5B and/or share • Increased dividends repurchases •4.Share repurchase Bolt-on acquisitions $1.5B • Bolt-on acquisitions Uncommitted Free Cash Flow Increased borrowing capacity adds even more flexibility* Assumes performance in line with long term objectives. For illustrative use only – not to be construed as guidance. 29
  30. 30. Investment thesis strong Growth Game Plan will drive accelerated performance Driven by sharper portfolio choices and strengthened capabilities Opportunity to release unproductive costs to fund investment Strong, growing free cash flow provides fuel for accelerated performance and returns to shareholders 30
  31. 31. Appendix 31
  32. 32. Reconciliation: Q3 YTD 2012 andQ3 YTD 2011 Core Sales Newell Rubbermaid Inc. RECONCILIATION OF NON-GAAP INFORMATION Core Sales (dollars in millions) Core Sales Nine months ended Q1 2012 Q2 2012 Q3 2012 September 30, 2012Sales as reported $ 1,332.4 $ 1,516.2 $ 1,535.3 $ 4,383.9Currency Impact 7.8 34.9 38.5 81.2Core Sales (1) $ 1,340.2 $ 1,551.1 $ 1,573.8 $ 4,465.1 Nine months ended Q1 2011 Q2 2011 Q3 2011 September 30, 2011Sales as reported $ 1,274.2 $ 1,545.3 $ 1,549.9 $ 4,369.4Including Currency 0.3%Excluding Currency 2.2%Currency impact (1.9)%(1) "Core Sales" is determined by applying the prior year monthly exchange rates to the current year local currency monthly sales amounts,with the difference in the current year reported sales and Core Sales representing changes attributable to foreign currency translation,reported in the table as "Currency Impact". 32 32
  33. 33. Reconciliation: Q3 YTD 2012 and Q3 YTD 2011 Operating Income, As Reported, to Normalized Operating Income $ millions Q3 YTD 2012 Q3 YTD 2011Net sales $4,383.9 $4,369.4Operating income (as reported) $498.1 $131.7CEO transition costs $- $4.4Impairment charges $- $382.6Restructuring and restructuring-related costs $66.6 $38.1Operating income (normalized) $564.7 $556.8Operating margin (normalized) 12.9% 12.7% 33 33
  34. 34. Reconciliation: Q3 YTD 2012 andQ3 YTD 2011 “Normalized” EPS Q3 YTD 2012 Q3 YTD 2011* Diluted earnings per share (as reported): $1.02 $0.15 Impairment charges $0.00 $1.03 Restructuring and restructuring-related costs $0.18 $0.12 Discontinued operations ($0.01) $0.03 CEO transition costs $0.00 $0.01 Income tax - discrete contingencies, expiration of statutes of limitation and resolution of examinations $0.07 ($0.17) Loss related to the extinguishment of debt $0.01 $0.01 "Normalized" EPS $1.27 $1.19 * totals may not add due to rounding 34 34
  35. 35. Reconciliation: Full Year 2012Outlook for “Normalized” EPS FY 2012 Diluted earnings per share $1.27 to $1.33 Restructuring and restructuring-related costs [ 1 ] $0.27 to $0.32 Discontinued operations ($0.01) Income tax - discrete contingencies, expiration of statutes of limitation and resolution of examinations $0.07 Loss related to the extinguishment of debt $0.01 "Normalized" EPS $1.63 to $1.69 [ 1 ] Restructuring and restructuring-related costs include impairment charges, employee termination benefits and other costs associated with the European Transformation Plan and Project Renewal. 35 35

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