Investor Presentation. February 2007

Transcription

1 Investor Presentation February

2 Cautionary Statement Cautionary Note about Forward-Looking Statements: Please note that in this presentation, we may discuss events or results that have not yet occurred or been realized, commonly referred to as forward-looking statements. Such discussion and statements will often contain words as expect, anticipate, believe, intend, plan and estimate. This presentation contains "forward-looking statements" within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements regarding our repurchases of shares of common stock from time to time under our stock repurchase program, the outlook for Jarden's markets and the demand for its products, estimated sales, earnings per share, segment earnings, cash flows from operations, future revenues and margin requirement and expansion, the success of new product introductions, growth or savings in costs and expenses and the impact of acquisitions, divestitures, restructurings and other unusual items, including Jarden s ability to integrate and obtain the anticipated results and synergies from its acquisitions. These projections and statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results which may differ materially from forward-looking statements will be dependent upon various factors and risks, including those described from time to time in the Company s periodic and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to make any revisions to the statements contained in our remarks or to update them to reflect events or circumstances occurring after the presentation. 2

3 Jarden Today Outdoor Solutions 23% Consumer Solutions 48% FY 2006A Net Sales By Segment* Branded Consumables 21% Process Solutions 8% FY 2006A Consolidated Segment Earnings* Outdoor Solutions 17% Consumer Solutions 51% $3.85 billion Branded Consumables 24% Process Solutions 7% World-class consumer products company with a diverse product line and a global footprint Strong brand equity Leading market positions Products with recurring revenue streams Broad distribution through mass, home improvement, specialty, grocery and club channels in over 100 countries Low-cost manufacturing and sourcing operations Over 20,000 employees with operations in 16 countries $442 million * Fiscal year ended December 31, Net Sales percentages exclude intercompany eliminations, while Consolidated Segment Earnings (defined on page 18) percentages exclude corporate/unallocated. 3

4 Touching Consumers at Home and Outdoors Every Day Branded Consumables Consumer Solutions Outdoor Solutions Process Solutions 4

5 Investment Highlights Diversified portfolio of highly recognized brands and products with leadership positions in their respective niche markets Strong and sustainable organic growth driven by: Strong brand equity Continuous investments in product innovation Brand extensions International product line expansions Leveragable infrastructure Significant opportunities for margin expansion and earnings growth Proven, robust business model that generates strong and consistent free cash flow Track record of disciplined, value-enhancing acquisitions Supported by management bench that allows for successful integration Experienced, proven management team with successful track record and significant equity ownership 5

6 Strong Consistent Track Record of Achieving Results Objectives Status Achieve record revenues, Consolidated Segment Earnings and cash flow in FY 2006 Deliver organic sales growth of 3% 5% per year through product innovations and brand extensions Grow through international expansion and leveraging relationships with retailers Identify and successfully integrate accretive acquisitions Realize cost savings of $75 - $110 million in 0 36 months* On track Generate strong free cash flow, continuously improve working capital trends and continue to delever Maintain conservative leverage metrics * Cost savings run rate of $70 million as of 9/30/06. 6

7 Company Overview 7

8 Branded Consumables Overview Net Sales Contribution Branded Consumables 21% Core Consumer Categories Boxed Plastic Cutlery Firelogs Home Canning Matches & Toothpicks Playing Cards Rope & Cordage Products Smoke & CO Alarms Market Position Segment Overview FY 2006A Net Sales of $812 million and Segment Earnings of $118 million* Highest margin business for Jarden with further margin expansion opportunities Distribution channels include mass merchants, hardware, warehouse clubs, drug, grocery, convenience stores, home centers and international * Fiscal year ended December 31, Strategic Direction / Growth Drivers Develop new products - Tundra fire suppressant by First Alert, Learn to Draw kits, plastic freezer jars, and All Natural Java Logs Extend brands - Bee / Bicycle in casinos, Lehigh / Coleman rope, Coleman / Diamond fire logs, First Alert safety & security Enhance marketing investments Expand geographically (Canada, Europe and China) 8

9 Consumer Solutions Overview Net Sales Contribution Core Consumer Categories Market Position Consumer Solutions 48% Blenders Coffee Makers Air Purifiers / Humidifiers Slow Cookers Vacuum Packaging Warming Blankets Animal Hair Clippers #2 Segment Overview FY 2006A Net Sales of $1.9 billion and Segment Earnings of $250 million* Strong portfolio of brands with leading positions in core categories Distribution channels include mass merchants, warehouse clubs, specialty retailers, direct-to-consumer and international Strategic Direction / Growth Drivers Develop new products - Margaritaville Frozen Concoction Maker, Sunbeam Rocket Grill, Zarafina Tea Maker Target new distribution in specialty channels to enhance gross margins (e.g., DRTV, specialty catalog) Invest in brands to promote unit growth and improve Average Selling Price Continue to expand geographically (Latin America and Europe) * Fiscal year ended December 31,

10 Outdoor Solutions Overview Net Sales Contribution Outdoor Solutions 23% Core Consumer Categories Camp Stoves Fuel Lanterns (Fueled and Battery) Sleeping Bags Tents Airbeds Chest and Personal Coolers Market Position #2 #2 Segment Overview FY 2006A Net Sales of $901 million and Segment Earnings of $84 million* Strong international platform with leadership in Europe and Japan Strategic licensing focus Distribution channels include mass merchants, sporting goods, specialty and grocery * Fiscal year ended December 31, Strategic Direction / Growth Drivers Accelerate new product development with emphasis on gross margin expansion - Roadtrip Grill LXE, UV Tents, marine products and inflatable products Reinvigorate marketing focus and investment in brands; Let s Go Outside campaign Enhance relationship with specialty retailers in support of Up the Mountain strategy Achieve additional margin improvement from synergies in 2007 &

11 Optimizing Manufacturing and Sourcing Combination of domestic and international sourcing and manufacturing creates a competitive advantage in the marketplace Constantly evaluating sourcing strategies by product line Optimizing sourcing locations Cost of Goods Sold - Manufactured versus Sourced Product* Other Costs of Goods Sold Warehouse and 6% Distribution Costs 6% Sourced Product 44% Manufactured Product 44% Raw Material 70% Labor 11% Other 19% Existing manufacturing operations in nine countries: - Canada - China - France - Italy - Mexico - Spain - U.K. - U.S. - Venezuela * As of December 31,

12 Building Blocks For Future Growth Free Cash Flow to Delever and/or Fund Acquisitions Margin Expansion Opportunities International and Channel Expansion Leverage Brand Strengths New Product Introductions 12

13 Organic Growth Opportunities New Product Introductions Multiple new product introductions across all of our businesses Over 700 new SKU s introduced in 2006 Leverage Brand Strengths Continue to increase investment behind key brands Leverage brands and customer relationships for product introductions Lehigh Rope at mass merchants under Coleman brand Innovate product lines as well as packaging and coloration International and Channel Expansion Leverage distribution channels in Asia, Latin America and Europe Grow as major domestic retailers expand internationally China manufacturing know-how Enhance distribution and channel expansion (Cross-Selling, Direct-to- Consumer) New products in specialty retailers and specialty catalogs FoodSaver distribution in Latin America & Europe; Bionare fan distribution in Latin America Universal Jarden logo on all new packaging 13

14 Margin Expansion Opportunities Sales Mix and Price New product innovation allows for pricing and gross margin enhancements Brand leadership allows for pricing adjustment in challenging macroeconomic environment Realizable Synergies Supply Chain transportation, raw materials 16 th largest U.S. importer of 40-ft. containers Vertical Integration internal manufacturing within Jarden Asia Integration shared sourcing and quality control, Tech Center Real Estate Optimization distribution center & lease reductions, ongoing global consolidation Enhancing Productivity Continuing to leverage D&W model Reducing distribution points Focusing on improving manufacturing efficiency Modifying products to reduce raw material cost components Ongoing evaluation of outsourcing opportunities 14

15 Disciplined Acquisition Strategy Acquisition Criteria History of Significant Acquisitions Strong cash flow characteristics Date Target Trans. Value ($ million) Category leading positions in niche markets Sept 2006 $153 Products that generate recurring revenue July 2005 $625 Attractive historical margins Jan 2005 American Household, Inc. $846 Accretive to earnings (pre-synergies) June 2004 $238 Acquisition multiples historically in the 5x 8x EBITDA range (pre-synergies) Sept 2003 $155 Feb 2003 $108 Jarden s acquisitions create channel, cross-selling, supply chain and margin expansion opportunities April 2002 $160 15

16 Financial Overview 16

17 Financial Highlights Organic growth of approximately 4% in 2005 and over 5% in 2006 Attractive Consolidated Segment Earnings margins in niche businesses; margin expansion opportunities Strong free cash flow Relatively low capex and cash taxes Prudent balance sheet management Target Net Debt / Consolidated Segment Earnings ratio of 3.5x or better Equity market capitalization in excess of $2.4 billion, with 60% / 40% equity-to-debt ratio Net book value of over $1.0 billion and total assets of over $3.5 billion The Wall Street Journal reported Jarden was the best performing consumer stock over the last 5 years with a compound annual growth rate of 58%* * WSJ article dated February 27, 2006; 5-year period from January 1, 2001 through December 31,

18 Q4 / FY 2006 Highlights The Company announced final Q4 / FY 2006 results on February 14, 2007 FY 2006 highlights: Strong net sales growth driven by strong organic sales and tuck-in acquisitions Approximately $3.85 billion Strong Consolidated Segment Earnings* Approximately $442 million Robust cash flow from operations Approximately $236 million (including cash reorganization costs of approximately $37 million) Taking into consideration the Company s $203 million of cash on hand at year-end, net indebtedness of $1,238 million Capital expenditures of approximately $69 million * Consolidated Segment Earnings represent the Company s performance measurement under SFAS 131. The measurement is the Company s earnings before interest, taxes and depreciation and amortization, excluding reorganization, acquisition and integration related costs ($42 million), stock based compensation ($23 million), and profit in inventory ($10 million). 18

19 Summary Segment Financials (Dollars in millions) Year Ended December 31, Branded Consumables Consumer Solutions Outdoor Solutions Process Solutions Net Sales $812 $685 $1,892 $1,518 $901 $821 $309 $234 Growth 18.5% 24.6% 9.8% 32.4% Segment Earnings $118 $95 $250 $190 $84 $77 $34 $29 Growth 24.3% 31.6% 9.5% 15.4% Margin 14.6% 13.9% 13.2% 12.5% 9.4% 9.4% 10.9% 12.5% 19

20 Investment Highlights Diversified portfolio of highly recognized brands and products with leadership positions in their respective niche markets Strong and sustainable organic growth driven by: Strong brand equity Continuous investments in product innovation Brand extensions International product line expansions Leveragable infrastructure Significant opportunities for margin expansion and earnings growth Proven, robust business model that generates strong and consistent free cash flow Track record of disciplined, value-enhancing acquisitions Supported by management bench that allows for successful integration Experienced, proven management team with successful track record and significant equity ownership 20

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