November 2017 Mike Poteshman Executive VP & CFO

Transcription

1 November 2017 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

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

4 Sales Force Opportunity Independent Business Owners can choose to earn a Part or Full-Time Income Consultant Manager Team Leader Distributor 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 and personal sales Leads & builds a sales organization Income based on organizational sales

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 and unique features & benefits Ability to sell flanker & subcategories

6 Award-Winning Product Designs FOOD CONSERVATION MOVE / ON THE GO

7 OVENWARE FAST MICROWAVE COOKING CHEF COOKING DRINKING SOLUTIONS Innovative Products FOOD CONSERVATION MOVE / ON THE GO KITCHEN ESSENTIALS KITCHEN ESSENTIALS

8 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

9 Business Fundamentals Grow the Sales Force + Support Consistent Activity Recruit New Sellers Meetings & Events Onboarding & Training Group Demonstration Leadership Development Recognition & Rewards

10 Diversified Global Portfolio Share of 2016 Sales Americas* 41% Europe 25% 36% in 2006 Asia Pacific 34% 44% in % in 2006 *Americas includes Tupperware North America, 16%, Beauty North America, 9% and South America, 16% 10

11 Seven units over $100 million in 2016 sales $200 + M U.S. & Canada $100 + M China $100 + M $100 + M Indonesia Tupperware Mexico $100 + M Fuller Mexico $200 + M Brazil $100 + M Germany 11

12 Basket of Global Currencies Key Sales and Profit Currencies: Brazilian real Chinese renminbi Euro Indonesian rupiah Mexican peso 91% of 2016 sales and 100% of net profit from outside the U.S.

13 Growth Opportunities Increase Penetration in Emerging Markets Strengthen the Core Business Model Extend our Reach

14 Increase Penetration in Emerging Markets 85% of the world s population & 66% of sales in 2016 Growing Middle Class Lower Employment of Women outside the home Direct Sales Channel Growth of 4-5% annually through 2019* Increase Penetration in Emerging Markets *Based on data found on Euromonitor 14

15 Emerging Market Growth Emerging Markets 66% of Sales in % CAGR from 2007 to 2016* Established Markets 34% of Sales in 2016 (2)% CAGR from 2007 to 2016* * sales restated in constant currency. 15

16 Penetration Opportunities Top 5 Populations United States & Canada: 360 million Brazil: 200+ million India: 1.3 billion China: 1.4 billion Indonesia: 260 million 16 16

17 Biggest Penetration Opportunity - China China Over $100 million sales in ,900 experience studios and growing Membership Growth: 62% YoY Q Leverage digital marketing Population: 1.4 Billion Brazil: 200 million people; $260M sales in

18 China Experience Studios 5,900 Studios: HSD to LDD YOY growth Distributor Program Leadership Pipeline Organic rotation: More Residential Sites with digitally Savvy Owners Residential: 67% Commercial: 25% Showcases/Kiosks: 8% 18

19 Electronic Engagement Recruit Contact Engage Purchase Buy any Drink Flask or Thermal Bottle Buy any Member Kit TUP Member Social Media Lifestyle Content Videos Recipes Online Games Promotional Offers Scan QR code VIP Member Social Media or Walk In First Purchase Membership Invite (70% of Sales from Members) Digital Engagement Future Purchases 19

20 Convergence: Online + Offline Delivery ONLINE Customers WeChat Order & Outlet Pay APP Data Company Plant E-Marketing Relationship Demonstrate Sell Deliver OFFLINE Pay Data Order Walk-in Outlet Company Plant Delivery

21 Strengthen the Core Business Model Extend our Reach 21

22 Strengthen the Core Business Model Onboarding Success Formulas Demonstration Selling Consistent execution of training, support and development of our Sales Force Roadmap of weekly activities that tie to professional goals Hands-on culinary experiences to engage party guests 22

23 Extend our Reach Digital Tools Contact Points Brand Ambassador Leveraging e-commerce and digital tools to enhance personal relationships and consumer engagement Branded locations that are close and convenient to the Sales Force and Consumers Mining relationship equity = Fractional monetization 23

24 Strong history of growth 5% CAGR* local currency sales 5.0% to 13.4%** pretax ROS in 2003 & bps** annual average Pretax ROS improvement from 2003 to 2016 *See appendix for the Company s reported sales from 2007 to 2016 and annual basis point improvement in local currency **Pre-tax ROS shown is excluding items. See GAAP to non-gaap reconciliation in the appendix 24

25 Cash producer - free cash flow $300 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 GAAP Net Income includes impact of non-cash goodwill impairment and re-engineering charges $250 $200 $150 $100 $50 $ * Net Cash Flow before Financing Activities (Free Cash Flow) GAAP Net Income *High-end outlook as of October 25, 2017 earnings release 25

26 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 for Flexibility 26

27 Restructuring Actions* Estimated $100-$110 million costs through 2019 Cash cost: $90 - $100 million, before proceeds from sale of excess fixed assets Up to $35 million proceeds from fixed assets not included Estimated annual savings ~ $35 million: About two-thirds to be realized in 2018; Plus $6 million of avoided losses at Beauticontrol beginning 3Q 2017 * Restructuring Update as of October 25,

28 Outlook* Fourth Quarter 2017 Guidance Full Year 2017 Guidance USD Sales +0% - 2% +2% - 3% GAAP EPS $ $1.01 $ $2.20 GAAP Pre-tax ROS 12.8% % 8.1% - 8.2% Local Currency Sales** (3)% - (1)% +2% EPS, excluding items *** $ $1.53 $ $4.79 Pre-tax ROS, excluding items 17.0% % 14.4% FX Impact on EPS comparison, excluding items $0.06 $0.08 * Guidance provided in October 25, 2017 Earnings Release. ** 2016 included 53 weeks with 14 weeks in Q4. In 2017, there is a 1% negative impact in 2017 with 5.5% impact in Q4 2017, including calendar shifts from Q Additionally, Q includes a 2% negative impact from Beauticontrol wind-down. *** Excluding items. GAAP to non-gaap reconciliation on slide

29 Uses of Cash 2017 Guidance Cash Flow from Operating Net of Investing Activities Guidance*: $165 to $175 million Excluding potential land proceeds and land related capex Dividends 68 cents per share quarterly Yield 4.7%** Position for future share repurchases with year-end capacity under the Company s 1.75X Leverage Target* *As of October 25, 2017 earnings release **Yield based on $2.72 annual dividend and closing share price of $57.73 on November 7,

30 Why Invest Competitive Business Model Diversified Portfolio for Sustainable Performance Opportunities for Above Average Growth Significant Return of Capital to Shareholders 30

31 Appendix 31

32 Non-GAAP Financial Reconciliation Net Income (GAAP) $47.9 $86.9 $85.4 $94.2 $116.9 $161.4 $175.1 $225.6 Adjustments: Gains on disposal of assets including insurance recoveries (3.6) (13.1) (4.0) (12.3) (11.8) (24.9) (21.9) (0.2) 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) (3.3) Net Income (Adjusted) $48.8 $83.3 $90.5 $109.6 $141.2 $169.7 $196.1 $

33 Non-GAAP Financial Reconciliation Q Q2 Q Q Q4 2017* 2017* Net Income (GAAP) $218.3 $193.0 $274.2 $214.4 $185.8 $223.6 $47.4 $(17.7) $31.4 $51.7 $112.9 Adjustments: Gains on disposal of assets including insurance recoveries (3.8) (7.9) (0.7) (2.7) (13.7) (27.3) (0.1) (3.1) (4.1) (7.3) Other Income from real estate operations sold (0.9) 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 (9.6) (4.8) (3.5) (4.8) (0.8) (16.1) (8.8) Net Income (Adjusted) $273.3 $281.4 $288.3 $274.6 $220.5 $222.5 $51.7 $62.5 $52.7 $78.4 $245.2 Pre tax Adjusted ROS 13.9% 14.1% 14.1% 13.9 % 12.8% 13.4% 12.5% 14.6% 13.1% 17.2% 14.4% Average number of diluted shares (millions) * High end of guidance range provided in October 25, 2017 Earnings Release. Impact of changes in foreign currency versus prior year are updated monthly and posted on: 33

34 Sales * * 2017** Sales $2,162 $2,128 $2,300 $2,585 $2,584 $2,672 $2,606 $2,284 $2,213 $2,278 Reported Sales Growth 9% (2)% 8% 12% 0% 3% (2)% (12)% (3)% 3% Local Currency Sales Growth*** 8% 6% 6% 9% 5% 6% 5% 4% 2% 2% * 2011 and 2016 included 53 weeks assessed to have a 1-point impact on year-over-year comparisons. ** High-end of guidance range included in October 25, 2017 earnings release. ***Calculated by comparing sales with prior year translated at the current year exchange rate. 34

35 Return on Sales Guidance* Fourth Quarter 2017 Guidance Full Year 2017 Guidance 2016 Pretax ROS 16.3% 13.4% Translation FX 20 bp 10 bp 2016 Pretax ROS (constant currency) 16.5% 13.5% LC Operating Margin Improvement 60 bp 80 bp Net Interest Expense 10 bp 10 bp 2017 Pretax ROS (high end guidance) 17.2% 14.4% * High-end of guidance range provided in October 25, 2017 Earnings Release. **See GAAP to non-gaap reconciliation included herein 35

36 Full Year 2017 EPS Outlook Excluding Items* (diluted) 40 cent increase in Reported $ 7% increase in Local Currency * Excluding items. See Non-GAAP reconciliation included herein. ** High end of guidance range provided in October 25, 2017 Earnings Release. 36

37 November 2017 Mike Poteshman Executive VP & CFO