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Jefferies 2014 Global Industrials Conference August 12, 2014

Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

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Page 1: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Jefferies 2014

Global Industrials ConferenceAugust 12, 2014

Page 2: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Certain statements contained in this presentation are forward looking based on

assumptions of future events which may not prove to be accurate. They involve

risk and uncertainty. Actual results may differ materially from those expected or

implied. We direct you to the cautionary statements detailed in recent news

releases and SEC filings.

Cautionary Statements

2

Page 3: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Blount International, Inc.Headquartered in Portland, Oregon

(NYSE: BLT)

Business: We design, manufacture, and market

replacement parts and equipment for consumers

and professionals in select global end markets,

including forestry, lawn, and garden (“FLAG”);

farm, ranch, and agriculture (“FRAG”); and

concrete cutting and finishing (“CCF”).

Overview

3

Financial Performance 1

3-Year Stock Price 2

1) Pro forma for certain adjustments; 2011 and 2012 pro forma (PF) include full twelve months of results for SpeeCo, KOX, PBL, and Woods.

2) Outdoor Power Equipment Index includes Husqvarna, Emak, Toro, Briggs & Stratton, and Alamo Group.

$ millions

$657

$976 $928

$901 $948

$127 $169

$136 $123 $138

19.4%17.3%

14.7% 13.7% 14.5%

$-

$200

$400

$600

$800

$1,000

$1,200

Pro Forma2010

Pro Forma2011

2012 2013 2014 Outlook

Net Sales Adjusted EBITDA Adjusted EBITDA Margin

Page 4: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Business Segments

4

Concrete Cutting and Finishing

Farm, Ranch, and Agriculture

Forestry, Lawn, and Garden

• LTM 6/30/14 sales of $28 million (3% of total)

• Cost effective way to cut concrete and ductile iron

• Presented in Corporate and Other

• Chain saws and diamond-coated saw chain for cutting concrete

and ductile iron pipe

• Pentruder® high-performance concrete cutting systems

distribution added in the first quarter of 2014

• LTM 6/30/14 sales of $623 million (68% of total)

• Market leader in saw chain and guide bars

• Revenues are approximately 75% – 80% replacement

• Wide-ranging geographic sales mix with approximately 70% of

sales outside of North America

• LTM 6/30/14 sales of $265 million (29% of total)

• Woods and TISCO sell direct to approximately 11,000 dealers in

North America, giving the FRAG segment meaningful presence

• Adjacent distribution to FLAG segment provides cross-selling

opportunities

• Nearly all sales are in North America, representing longer-term

opportunities for international expansion

Page 5: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Core Competencies

We have significant assets and competitive advantages in the following

core competencies:

5

Page 6: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Global Sales & Distribution Network

6

• Global distribution reaches all end-use segments

− Traditional two-step distribution through

distributor/dealer network

− Dealer direct in select regions

− Mass merchants

− End-user direct

− OEMs globally

• Diversified end-user base

Page 7: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

• Forestry sales are approximately 80% of FLAG segment

• Blount manufactures and sells saw chain, guide bars, sprockets, other accessories, and cordless power equipment

− Sales are approximately 75% replacement (primarily traditional dealer channel) and 25% OEM

− OREGON® is largest brand; also market under Carlton® and KOX brands

− Largest competitor is a chain saw OEM; many small competitors offer low-end products

− Largest producer of saw chain globally

• Global sales and distribution network is key success factor

− Long-term relationships with 35+ OEMs and 300+ distributors

− KOX acquisition (2011) expanded distribution channel to end-user direct

• Design and engineering capabilities ensure we are continually innovating

• Global manufacturing

− Capacity for nearly 220 million feet of chain / more than 15 million guide bars

− United States, Canada, Brazil, China

Forestry End Market

7

Representative Products

Saw Chain Outdoor Power EquipmentGuide Bars Sprockets

Page 8: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Electric Gas

Chain Saw Growth

• Growing global market with an estimated 17.3

million power head units sold in 2012,

representing a compound annual growth rate

of 7.4% since 2000

− Gas saws growing at 8.2%

− Electric saws growing at 5.3%

• Blount benefits from initial sale, plus recurring

replacement stream

Forestry Market Drivers

8

Source: Management estimates

Total Saw Chain Market Share

Global Saw Chain Market:• 2011 – 375 million feet

• 2012 – 390 million feet

Saw Chain Market Size

• 2012 estimated market size of

approximately 390 million feet

− 25-year CAGR of 4% – 5%

− Growth driven by consumer penetration

and shift toward chain saw cutting

(vs. hand cutting)

• Blount is the largest global producer of

saw chain

− Competitor A is a chain saw OEM

− Low cost country manufacturers have

gained share over the past decade

Chain Saw Market – 2000 to 2012

1

1) As of 2012 full year data.

Page 9: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

• Lawn and Garden sales – Approximately 20% of FLAG segment

• Outdoor power equipment replacement parts and lawnmower/edger blades

− Manufactures lawnmower/edger blades in Kansas City, Missouri, USA, and Civray, France facilities

− Other products and accessories sourced from third parties

− Sales roughly 35% lawnmower blades and 65% parts/accessories

− Approximately 10,000 SKUs; most non-blade SKUs are vended

• PBL acquisition (Q3 2011) expanded blade manufacturing capacity

• Leverages Blount’s global procurement, sales and distribution network

• Approximately 6% global market share; approximately 9% U.S. market share

− Market consolidation opportunities exist

Lawn and Garden End Market

9

Representative Products

Lawnmower Blades Edger Blades Trimmer Heads, Nylon

Trimmer Line

Air Filters, Spindles,

and Other

Replacement Parts

Page 10: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

• FRAG division created with acquisition of SpeeCo (2010). Woods/TISCO and PBL acquisitions

(2011) expanded product offering

− Products include tractor attachments and implements, tractor parts, log splitters, diggers, augers, three-

point linkage equipment, accessories, OEM custom components, and agricultural blade manufacturing

− Today, more than 90% of sales are in the United States

• FRAG business unit offers opportunities in cross-selling, sourcing, supply chain, and back-office

− ~70% of FRAG end market users own chain saws; large replacement parts / accessories component

− Distribution adjacencies and overlap with FLAG

− Further geographic expansion opportunities in Europe and the Americas

• Positive macro dynamics

− Growing size and affluence of world population increasing global food demand

− Ruralist trends increasing number of small farms in U.S.

Farm, Ranch, and Agriculture End Market

10

Representative Products

Log splitters 3-Point Digger Tractor PartsTractor Attachments 3-Point Linkage

Components

Page 11: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

• Concrete cutting and finishing business addresses the professional concrete-cutting, municipal

water utilities, and contractor markets

− Product expansion into ductile iron pipe cutting (sewage, utility) with PowerGrit®

− Leveraged Blount’s knowledge of chain saws and saw chain design/manufacturing

• Specialized hydraulic and gas chain saws provide alternative to cut-off saw

− Diamond saw chain grinds through concrete and rebar with a plunge cut

− Advantages vs. cut-off saw are: square corners without overcutting, deeper cuts, time efficient

− Replacement saw chain business provides recurring sales stream

• Growth opportunities

− Geographic expansion in Europe and China

− Exclusive distribution rights for Pentruder Concrete Cutting System in the Americas acquired in Q1 2014

− Acquisition opportunities in concrete cutting and finishing products

Construction End Market

11

Representative Products

Whole Goods Diamond Saw Chain PowerGrit®

1) Registered trademark of Tractive AB

1

Page 12: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

$220.4$235.4

$32.0 $34.8

Q2 13 Q2 14

Net Sales Adjusted EBITDA

Second Quarter 2014 Financial Performance

• Sales increased 7% compared to Q2 2013

• We operated well and our profitability improved

• Margins improved due to plant utilization and

restructuring efforts in 2013

$ millions

12

North America Q2 2014

Sales $119.8

vs. 2013 11.9% Europe/Russia Q2 2014

Sales $61.4

vs. 2013 6.0%

Latin America/Other Q2 2014

Sales $22.1

vs. 2013 9.2%

Asia Pacific Q2 2014

Sales $32.2

vs. 2013 -8.7%

LTM LTM

Sales by Category 12/31/13 6/30/14

Forestry $502 $509

Lawn and Garden 111 113

Farm, Ranch, and Agriculture 260 265

Construction 27 28

Total Sales $901 $915

$ millions

Sales up 7%

year-over-year

Profit up 9%

Page 13: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Second Quarter 2014 Results by Segment

13

FLAG

FRAG

___________________1) Reflects segment contribution to operating income

2) Amounts may not sum due to rounding

3) LTM 6/30/2014 contribution to profit includes $21.6 million non cash impairment of purchased intangible assets

• Year-over-year FLAG sales increased $9.4

million, or 6.2%, compared to Q2 2013

• Adjusted EBITDA increased $2.9 million

− Lower costs from closure of a higher cost

FLAG manufacturing plant and improved plant

utilization

− Higher SG&A spend for incentive

compensation, advertising, and professional

fees

• FRAG sales increased $4.7 million, or 7.4%,

versus Q2 2013

− Higher sales volumes and stronger average

pricing

• Adjusted EBITDA increased $0.4 million

− Higher volumes and improved average pricing

− Conversion costs were unfavorable as a result of

marginally higher labor costs

− Product sales mix included relatively lower

margin products compared to 2013

$ millions 2

LTM

Q2 13 Q2 14 $ % 6/30/14

Sales $150.8 $160.1 $9.4 6.2% $622.5

Contribution to Profit1 $20.7 $23.8 $3.1 15.2% $89.9

% of Sales 13.7% 14.9% 14.4%

Adjusted EBITDA $27.4 $30.3 $2.9 10.6% $119.8

% of Sales 18.2% 18.9% 19.2%

Year-over-Year Change

$ millions 2

LTM3

Q2 13 Q2 14 $ % 6/30/14

Sales $62.7 $67.3 $4.7 7.4% $264.6

Contribution to Profit1 $2.0 $2.6 $0.6 29.6% ($17.9)

% of Sales 3.2% 3.9% -6.7%

Adjusted EBITDA $6.4 $6.8 $0.4 5.5% $21.0

% of Sales 10.3% 10.1% 8.0%

Year-over-Year Change

Page 14: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

$127.4 $168.7 $136.4 $123.5 $137.5

$656.6

$975.5

$927.7$900.6

$947.5

2010Pro Forma

2011Pro Forma

2012Actual

2013Actual

2014Outlook

Mid-point

EBITDA Sales

2014 Outlook

14

• 2014 full-year sales range $935 million – $960 million

− FLAG sales projected to increase 3% – 6% versus 2013 full year

− FRAG sales projected to increase 6% – 8% versus 2013 full year

• Full-year Adjusted EBITDA expected to range between $135 million – $140 million

• Full-year Free Cash Flow of $32 million to $38 million

• Net leverage 2.6x EBITDA excluding share repurchase

Page 15: Jefferies 2014 Global Industrials Conference€¢ PBL acquisition (Q3 2011) expanded blade manufacturing capacity • Leverages Blount’s global procurement, sales and distribution

Strategy

• Leverage our channel and geographic resources to sell existing and new, innovative

products for profitable growth

• Build a high performance organization

• Prudently allocate capital

− Share repurchase program recently authorized by Blount’s Board of Directors

− Potential acquisitions to accelerate growth

Targets

• Organic growth to $1.1 billion in revenue and $175 million Adjusted EBITDA

• Generate substantial free cash flow to strengthen balance sheet

Strategy and Five-Year Targets

15

$901

$1,100

$123 $175

2013Actual

2018Target

Net Sales Adjusted EBITDA