September Mike Poteshman. Executive VP & CFO

Transcription

1 September 2016 Mike Poteshman Executive VP & CFO

2 Forward looking statements 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 These risks and uncertainties may cause actual results to differ materially from our statements today. Visit 2

3 Agenda Business Model Diversified Portfolio Growth Opportunities Financial Performance Uses of Cash 3

4 Powerful Business Model Brands & Products Group Demonstration Selling Sales Force Opportunity Business Fundamentals 4

5 Power of our brand The well known, aspirational Tupperware brand along with the channel is powerful: Relatively low product line competition In our category, low channel competition Allows maintenance of a strong gross margin supported by innovation & unique features & benefits Ability to sell flanker & subcategories 5

6 Innovative and demonstrable product OVENWARE FAST MICROWAVE COOKING CHEF COOKING DRINKING SOLUTIONS FOOD CONSERVATION MOVE / ON THE GO KITCHEN ESSENTIALS KITCHEN ESSENTIALS 6

7 Power of demonstration selling Demonstration Unlocks Features & Benefits Education plus Entertainment Allows Selling of High Price Point Items Increases Hourly Earnings Brand Building Sales Force Additions Access to New Hostesses & Consumers 7

8 Sales Force Opportunity Independent Business Owners can choose to earn a Part or Full-Time Income Distributor Consultant Manager Team Leader Demonstrates & sells product Income based on Personal sales Builds a team of 3 5 Consultants Income based on Total team sales Personal sales Develops Managers within her group Income based on Sales of the group Total team sales Personal sales Leads & Builds a Sales Organization Income based on Organizational sales 8

9 Business Fundamentals Grow the Sales Force Support Consistent Activity Find new sellers Meetings & Events Train new sellers Group Demonstration Leadership Development Recognition & Rewards 9

10 Diversified Global Portfolio Share of 2015 Sales Americas* 39% Europe 27% 36% in 2006 Asia Pacific 34% 44% in % in 2006 *Americas includes Tupperware North America, 15%, Beauty North America, 11% and South America, 13% 10

11 Emerging Market Growth Emerging Markets 66% of Sales 12% CAGR from 2006 to 2015* Established Market 34% of Sales (2)% CAGR from 2006 to 2015* * sales restated at September 2015 exchange rates 11

12 Seven units over $100 million in 2015 sales Over $200 Million Brazil Indonesia Over $100 Million China Fuller Mexico Germany Tupperware Mexico Tupperware U.S. & Canada 12

13 Basket of Global Currencies Key Sales and Profit Currencies Brazilian real Chinese renminbi Euro Indonesian rupiah Mexican peso 91% of 2015 sales and 100% of net profit from outside the U.S. 13

14 Growth Opportunities 1 2 Increase Penetration in Emerging Markets Strengthen the Core Business Model 3 Extend our Reach 14

15 1 Increase Penetration in Emerging Markets 85% of the world s population & 66% of sales in 2015 Growing Middle Class Lower Employment of Women outside the home Direct Sales Channel Growth of 4-5% annually through 2019* *Based on data found on Euromonitor 15

16 Biggest Penetration Opportunities China Over $100 million sales in ,500 studios 20,000 studio potential India Less than $100 million sales in consultant per 4,900 people More penetrated units: 1 per 1,000 16

17 Strengthen the Core Business Model Extend our Reach 17

18 2 Strengthen the Core Business Model Onboarding Success Formulas Demonstration Selling Consistent global program of training, support, activities, and rewards for new consultants to learn fundamentals that will increase productivity & longevity Roadmap of weekly activities for all levels of the sales force, which lead to desired earnings and career opportunities Greater penetration of demonstration selling Brochure 1 on 1 demo 1 on 1 group demo Group demo culinary Brazil and Germany Pilot +Single digit increase in productivity Mexico Pilot Leaders performing 90% activities +11% Leaders performing 1/2 activities +6% Mexico Pilot Party average increase low single digit 18

19 3 Extend our Reach Party + Experience Studios Brand Ambassador Blending of the live, in home party and e-commerce through video technology Partnering with sales force leaders to establish modern contact centers more accessible to our sales force and consumers Opportunity to engage former sellers through the use of more consistent marketing efforts including digital Tupperware U.S. Pilot +1-2 guests per party 2x order size than pure ecommerce U.S. & Canada 30 remodeled or new studios to open in Europe Units Pilot testing begins 19

20 The Studio 20

21 The Studio 21

22 Vision 2020 Strategies Timeline Late 2013 Group Formed 1 st Half 2014 Selection of areas of focus 2 nd Half 2014 Creation of best practices & toolkits 1 st Half 2015 Proof of concept begins 2 nd Half 2015 First results for Pilots captured Refinement of toolkits 2016 Integration of Onboarding & Success Formula initiatives Proof of concept for Extend the Reach initiatives 2017 Strengthen the Core & Extend the Reach More widely adopted 22

23 Strong history of growth 4% to 9%* local currency sales growth each year % to 12.8%** pretax ROS in 2003 & bps** annual average margin improvement from 2003 to 2015 *See appendix for the Company s reported sales from 2007 to 2015 and annual basis point improvement in local currency **Pre-tax ROS shown is excluding items. See GAAP to non-gaap reconciliation in the appendix 23

24 Cash producer - free cash flow $300 $250 $200 $150 $100 $50 GAAP Net Income includes impact of non-cash purchase accounting asset impairment charges GAAP Net Income includes impact of Venezuelan devaluations from balance sheet items $ * Net Cash Flow before Financing Activities (Free Cash Flow) GAAP Net Income *Outlook as of July 20, 2016 earnings release 24

25 Capital Allocation Policy Cash Flow from Operating net of Investing Activities Dividend payout based on 50% of trailing year s EPS without items Manage Debt under leverage target of 1.75x Net Debt to EBITDA Repurchase shares in the open market with remaining cash and debt capacity Allows Flexibility 25

26 Uses of Cash 2016 Guidance Cash Flow from Operating Net of Investing Activities Guidance: $195 to $205 million Includes $28 million in potential Q3 land proceeds Dividends 68 cents per share quarterly Yield 4.2%** Improve Leverage Ratio Toward 1.75X Target through moderate EBITDA growth & debt repayment* *As of July 20, 2016 earnings release **Yield based on $2.72 annual dividend and closing share price of $65.53 on August 31,

27 Why Invest Competitive Business Model Diversified Portfolio for Sustainable Performance Opportunities for Above Average Growth Significant Return of Capital to Shareholders 27

28 Appendix 28

29 Non-GAAP Financial Reconciliation Net Income (GAAP) $47.9 $86.9 $85.4 $94.2 $116.9 $161.4 $175.1 Adjustments: Gains on disposal of assets including insurance recoveries (3.6) (13.1) (4.0) (12.3) (11.8) (24.9) (21.9) Re-engineering and other restructuring costs Debt refinancing costs associated with Sara Lee acquisition 29.1 Acquired intangible asset amortization Purchase accounting intangibles and goodwill impairment Cumulative effect of accounting change 0.8 Costs associated with implementing 2007 credit agreement 9.6 Income tax impact of adjustments (2.4) 2.5 (36.9) (4.9) (7.4) Net Income (Adjusted) $48.8 $83.3 $90.5 $109.6 $141.2 $169.7 $

30 Non-GAAP Financial Reconciliation Q Q Q3 2016* 2016* Net Income (GAAP) $225.6 $218.3 $193.0 $274.2 $214.4 $185.8 $43.4 $52.4 $50.4 $217.1 Adjustments: Gains on disposal of assets including insurance recoveries (0.2) (3.8) (7.9) (0.7) (2.7) (13.7) (0.1) (0.8) (22.4) (23.3) Re-engineering and other restructuring costs (includes Pension Settlement costs) Impact of Venezuelan bolivar devaluation from balance sheet positions Acquired intangible asset amortization Swap impairment and debt cost write-off 19.8 Purchase accounting intangibles and goodwill impairment Income tax impact of adjustments (3.3) (9.6) (4.8) (3.5) (4.8) 1.5 (0.7) (1.2) 7.0 (3.9) Net Income (Adjusted) $237.9 $273.3 $281.4 $288.3 $274.6 $220.5 $45.9 $58.7 $41.4 $220.8 Pre tax Adjusted ROS 13.9% 13.9% 14.1% 14.1% 13.9 % 12.8% 11.7% 13.7% 10.5% 13.1% Average number of diluted shares (millions) * High end of guidance range provided in July 20, 2016 Earnings Release. Includes Q3 land transaction projected to generate about $28 million proceeds and EPS of 27 cents. Impact of changes in foreign currency versus prior year are updated monthly and posted on: 30

31 Reported Sales * ** Sales $2,162 $2,128 $2,300 $2,585 $2,584 $2,672 $2,606 $2,284 $2,266 Reported Sales Growth 9% (2)% 8% 12% 0% 3% (2)% (12)% 0% Local Currency Sales Growth*** 8% 6% 6% 9% 5% 6% 5% 4% 4% * 2011 included 53 weeks. ** High-end of guidance range included in July 20, 2016 earnings release, including 53 rd week in Q4 ***Calculated by comparing sales with prior year translated at the current year exchange rate 31

32 Outlook* Third Quarter 2016 Guidance 2016 Full Year Guidance USD Sales +1% 3% (2)% (1)% GAAP EPS $0.94 $0.99 $4.18 $4.28 GAAP Pre-tax ROS 13.1% 13.5% 12.9% 13.1% Local Currency Sales +2% 4% +3% 4% EPS, excluding items ** $0.77 $0.82 $4.25 $4.35 Pre-tax ROS, excluding items 10.0% 10.5% 12.9% 13.1% FX Impact on EPS comparison, excluding items ($0.02) ($0.34) *Guidance provided in July 20, 2016 Earnings Release. Includes Q3 land transaction projected to generate $28 million in proceeds and EPS of 27 cents. ** GAAP to non-gaap reconciliation on slide 28 32

33 Return on Sales Guidance* 2016 Third Quarter High End Guidance 2016 Full Year High End Guidance 2015 Pretax ROS 10.2% 12.8% Translation FX -- (40) bp 2015 Pretax ROS (constant currency) 10.2% 12.4% LC Operating Margin Improvement 40 bp 60 bp Net Interest Expense (10) Pretax ROS (high end guidance)** 10.5% 13.1% * High end of guidance range provided in July 20, 2016 Earnings Release. **GAAP to non-gaap reconciliation on slide 28 33

34 Full Year 2016 EPS Outlook* (diluted) 2 cent decrease in Reported $ 8% increase in Local Currency** $4.50 $4.37 ($0.34) $0.35 $0.04 $4.35 $4.00 $4.03 ($0.04) ($0.03) $ FX 2015 at 2016 Rates Tax Shares Ops Unallocated 2016 * Excluding items. See Non-GAAP reconciliation on slide 28. ** High end of guidance range provided in July 20, 2016 Earnings Release. 34

35 September 2016 Mike Poteshman Executive VP & CFO