request-investor presentation q2 2010 gor final

8/2/2019 Request-Investor Presentation Q2 2010 GOR Final

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econ uartersca


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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).


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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)


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- -

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


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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.


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The Industrial Professional

Consumer?

The IndustrialProfessional

The Trades Professional

The Trades

The Doer

The Doer


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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


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STRATEGIC DRIVERS


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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


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Maximize our position in multi-purposemaintenance products

-

The Industrial Maintenance Repair Specialist The Tradesman

The Doer


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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


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-

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.


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PLATFORM


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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


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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%


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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%

*


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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


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esu s vs.


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%


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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


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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


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2010


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* 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


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Continued lobal economic recover

Gross Margin

Stability in key input costs oil & steel

Less volatile foreign currency exchange rates


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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


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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


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Sales Net Income$M $M

$320

30

$32+3.0%

$290

$300$28

-12.4%- 7.9%

-4.8%

$270

$280

' ' '

$24

' '


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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


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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


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Sales Comparison - Constant Currenc

$180

$200

FY08 FY09 FY09CC

$140

$160

Sales $M

$80

$100

$20

$40

$60

$0Americas Europe AsiaPac


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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


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vs.


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%


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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


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a es . . .

Op Inc 46.1 42.7 8.0%

. . .EPS 1.84$ 1.64$ 12.5%

*


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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

request-investor presentation q2 2010 gor final

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