rick goings, chairman & ceo november 2013 - tupperware …/media/files/t/...nov 19, 2013 ·...
TRANSCRIPT
March 2013
Rick Goings, Chairman & CEO
November 2013
Building Confidence Changing Lives
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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.
www.tupperwarebrands.com
Forward Looking Statements
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Sustain Tupperware Brands
Position as the Premier, Direct
to Consumer, Global Marketer
of Quality Innovative Products
Our Going Forward Objective:
Our Model is Actually a Multi-
Local System
• Product Innovation
• Entertaining & Informative Selling
Method
• Compelling Sales Force
Opportunity/Structure
• Solid Direct Selling Fundamentals
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Typical Country Structure
Distributor Model
TUPPERWARE GERMANY Est. 1962
Headquarters in Frankfurt/Main
Logistics center in Eppertshausen
Approx. 260 Team Leaders
135 Distributors Each controls a specific geography
Approx. 3,850 Unit Managers
Approx. 60,000 Demonstrators
Belgium Manufacturing & Warehouse
Tours Manufacturing
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Germany Distributor Structure
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2 Team Leaders
440 Demonstrators
Average German
distributor has
28 Unit Managers
Sales per Distributor varies by
market
Our Formula…
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PRODUCT INNOVATION
ENTERTAINING AND
INFORMATIVE SELLING METHOD
COMPELLING SALES FORCE
OPPORTUNITY/ STRUCTURE
SOLID DIRECT SELLING
FUNDAMENTALS
Product Innovation
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Food
Storage
Kitchen
Tools &
Gadgets
Table Top & Serving
Kitchen
Prep
Cutlery &
Cookware
Microwave
Baking &
Ovenware
Approximately 25% of Sales each year to come from new products
(products introduced in the last 2 years)
On-the-Go & Water
Entertaining & Informative
Selling Method
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Group Presentation = Party
Party every 1.4 seconds
Advertising Retail Rent
Compelling Sales Force
Opportunity & Structure
Earning Opportunity Career Opportunity
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Part Time
Supplemental
Income
Super
Seller
Demonstrator
Unit
Manager
Team
Leader
Distributor
Solid Direct Selling
Fundamentals • Training
• Recognition
• Competition
• Motivation
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A Balanced Global Portfolio
Established Markets 39% of 2012 Sales 14% world population
Emerging Markets 61% of 2012 Sales 86% world population
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76% Tupperware
Brand
Housewares
24% Beauty &
Personal Care
Products
Tupperware AND Beauty
*Full Year 2012
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TWB – supported by Social Media
iTUP (think Rosetta
Stone)
Sales Force Webinars
Living Cook Books
Tupperware
Hostesses
and Fans
Host 2 Parties
per Year
− Affiliation
− Allegiance
− Advocate
Promoters of
Brand & Products − No Rent
− No Advertising
Interactive
Selling System
− 2.8M Sales Force
− Party every 1.4 sec
− Driven by Earning Opportunity and Career path
Social Network
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Asia Pacific • Middle Class expected to grow from 500 million
to 1.7 billion by 2020
Central & South America • Middle Class expected to grow 70M, almost
40%, by 2020
Source OECD, The Emerging Middle Class in Developing Countries, January 2010
Emerging Market Penetration
Global Middle Class expected to
grow from 1.8B to 3.2B by 2020
Key Levers for Growth…
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Dynamic Emerging Markets
Growth Is Happening NOW!
Brazil +30%
Indonesia
+35%
Venezuela +28%
Malaysia/ Singapore
+8%
Turkey +34%
India +17%
Tupperware Mexico
+4%
China +23%
Total Emerging Markets +13% 16
Q3 2013 Year to Date (local currency)
Basket of Global Currencies
Key Sales & Profit Currencies
• Euro
• Indonesian Rupiah
• Mexican Peso
• Brazilian Real
• Malaysian Ringgit
90% of 2012 sales from outside the U.S.
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Consistently Growing Sales & Profit
$0
$50
$100
$150
$200
$250
$300
$350
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2005* 2006 2007 2008 2009 2010 2011 2012 2013**
Sales GAAP Net Income Net Income-excluding items
* Acquired Sara Lee direct selling businesses December 2005 ** High end of guidance range provided in October 23, 2013 Earnings Release
$million
GAAP Net Inc. includes impact of non-cash purchase accounting asset impairment charges
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Our Pre-Tax Return on Sales is also
Growing
5.0%
7.8% 8.4%
7.1%
8.7% 9.6%
12.1% 13.7%
13.9% 14.2% 14.3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*
GAAP Pre-Tax ROS Pre-Tax ROS Excluding Items**
* High end of guidance range provided in October 23, 2013 Earnings Release
** GAAP to non-GAAP reconciliation provided in Appendix 19
Free Cash Flow is Strong!
$0
$50
$100
$150
$200
$250
$300
2007 2008 2009 2010 2011 2012 2013*
Net Cash Flow before Financing Activities (Free Cash Flow) GAAP Net Income
* High end of guidance range provided in October 23, 2013 Earnings Release.
Large VAT &
FX hedge
contract payments
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Financially Sound with
Strong Cash Flow
• Strong and improving ROS
• Uses of Cash:
– Invest in the business
– Growing dividend:
• Payout ratio 50% of diluted EPS excluding items
• Likely will increase in line with earnings growth as achieved
– Share repurchases:
• Debt/EBITDA leverage targeted at 1.75X
Between Dividend and anticipated Share Repurchases
in 2013, we expect to pay out almost $10 per share
to our shareholders. 21
Local Currency Sales: +6% to 7% • Emerging markets up low teens
• Established markets down low single digit
EPS Excluding Items: $5.45 - $5.50 • Up 14-15% LC, 9-10% USD, vs. $4.99 in 2012
• GAAP $5.17 to $5.22
• 19 cents negative FX on EPS excluding items
Pre-Tax ROS, excluding items: 14.3% • GAAP pre-tax ROS 13.6%
• Longer range ROS increase target 50 bp
Incremental 2013 interest (new debt) -20
2013 vs. 2012 translation FX -20
High end pretax ROS fcst +10 bp
* As of October 23, 2013 Earnings Release without current confirmation/update
2013 Full Year Outlook*
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* Specific guidance for 2014 to be provided in January 2014 earnings release
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
• Share repurchases
Longer Range Outlook
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Appendix: Non-GAAP Financial Measures Reconciliation
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*
Net Income (GAAP) 47.9 86.9 85.4 94.2 116.9 161.4 175.1 225.6 218.3 193.0 276.9
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) (3.8) (7.9) (1.1)
Re-engineering and other restructuring costs 6.9 7.0 14.3 7.6 9.0 9.0 8.0 7.6 9.6 22.1 10.4
Impact of Venezuelan bolivar devaluation on balance sheet positions 4.2
Swap impairment and debt cost write-off 19.8
Debt refinancing costs associated with Sara Lee
acquisition 29.1
Acquired intangible asset amortization 1.8 25.0 13.6 11.9 5.1 3.9 2.9 2.1 4.8
Purchase accounting intangibles and goodwill impairment 11.3 9.0 28.1 4.3 36.1 76.9
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 1.7 (3.3) (9.6) (4.8) (3.5)
Net Income (Adjusted) 48.8 83.3 90.5 109.6 141.2 169.7 196.1 237.9 273.3 281.4 291.7
* High end of 2013 outlook provided in October 23, 2013 Earnings Release
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March 2013
Building Confidence Changing Lives