Masco 2015 Investor Day - Keith ceo address

The New Masco Keith Allman, CEO

K E Y M E S S A G E S T O D A Y

The New Masco: Transformation, Focus, Results

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A Transforming

Business

Delivering

Strengthened

Performance

Clear Strategic

Focus

Organization

Operational Excellence

Portfolio and Capital

Allocation

A Transforming Business

Formed a new management team

Implemented talent framework

Instituted a center led business model

Restructured HQ

Made key business unit management changes

Increased dividend

Authorized share buy back of 50 million shares

Announced spin off of TopBuild

Reduced costs and increased efficiencies

Standardized planning processes

Prioritized capability building

Drove cost improvement culture

Transformational Initiatives

3

Revenue Breakdown – R&R vs. New Home Construction*

Revenue Breakdown – International vs. North America*

R E S U L T S

Creating a Less Cyclical Business

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N. America

81%

Int’l

19%

R&R

71%

New home

29%

N. America

77%

Int’l

23%

R&R

82%

New home

18%

Post-Spin

More Global Diversification

Less Cyclicality

Post-Spin

Pre-Spin

Pre-Spin

*Based on 2014 revenue and company estimates. See appendix for GAAP reconciliation



5

A Transforming

Business

Delivering

Strengthened

Performance

Clear Strategic

Focus

Drive full potential of our

core businesses

Clear Strategic Focus

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Leverage opportunities across

our portfolio

Actively manage portfolio


core businesses

S T R A T E G I C F O C U S # 1 D R I V E F U L L P O T E N T I A L O F O U R C O R E B U S I N E S S

Leverage Our Brands

7

Masco Cabinetry (cabinet manufacturer

in U.S.)

Delta® (faucet brand

in North America)

Behr® (DIY architectural

coatings in

North America)

Milgard® (vinyl window

brand in Western U.S.)

Hansgrohe® (global faucet

and mixer brand)

Arrow®, Liberty®, BrassCraft® and

Watkins® (in their respective

categories)

#2

#1

#1 #1

#1

#2


Lead in Innovation

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30%*

Examples of New Products / Technologies

Existing

Products

2014 2013 2012

70%

Hansgrohe SelectTM

Collection

KraftMaid® New Design Launch

2014 Revenues

Delta® Toilets

Paint & Primer in One

KraftMaid® Vanities

Behr DeckOver®

Coating

KraftMaid® VantageTM Cabinetry

Behr Marquee®

Coating

Delta Temp2OTM

Showerhead

2015

Hansgrohe® Rain XLTM

Showerhead

Behr Textured DeckOver™

Coating

Axor® Starck V Collection

*Based on company estimates

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Drive Operational Excellence

Aligned

on Key

Financial

Metrics

Capitalize on

our Strong

Operating

Leverage

Strong

Management

Team

Culture of

Accountability


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core businesses


our portfolio

Actively manage portfolio


our portfolio

S T R A T E G I C F O C U S # 2 L E V E R A G E A C R O S S O U R P O R T F O L I O

Leverage Opportunities Across Our Portfolio

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• Talent • Purchasing • Innovation • Sales • Brands

Actively manage portfolio Actively manage portfolio


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core businesses


our portfolio

• Financially attractive

• Differentiated / leadership position

• Aligned with other Masco businesses

• Attractive end markets*

• Accelerate organic strategies

• Meet financial hurdles

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S T R A T E G I C F O C U S # 3 A C T I V E L Y M A N A G E P O R T F O L I O

Disciplined Portfolio Management

*Repair and Remodel, Global Segments, Low Cyclicality, Brand and Innovation Drive Value

Driving

Value

Creation

Portfolio Refinements

Strategic Acquisitions

+



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A Transforming

Business

Delivering

Strengthened

Performance

Clear Strategic

Focus

Delivering Strengthened Performance:

Consistent Profitability

15

$7.5

$8.2

$8.5

2012 2013 2014

Revenues ($B)

$500

$721

$851

2012 2013 2014

$0.37

$0.77

$1.02

2012 2013 2014

EPS* ($)

Operating Profit* ($M)

6.5%

CAGR 30%

CAGR 66%

CAGR

*Operating Profit as adjusted, excluding intangible assets, litigation, rationalization and other charges ($198M in 2012, $48M in 2013 and $63M in 2014). Operating profit as reported was $302M in

2012, $673M in 2013 and $788M in 2014. EPS as reported was ($0.16) in 2012, $0.83 in 2013 and $2.39 in 2014.

Delivering Strengthened Performance: Strong FCF

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Invest in the business

Pay down debt

Bolt on acquisitions

Return Capital to

Shareholders

Disciplined

capital

deployment of

~$2B FCF

2015 - 2017

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ROIC WACC

ROIC exceeded WACC by 160 bps in 2014

H I G H P E R F O R M A N C E

Delivering Strengthened Performance: Solid Returns

3.8%

5.8%

9.2% 10.6%

0%

2%

4%

6%

8%

10%

12%

2011 2012 2013 2014

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Note: Future performance reflects company estimates and excludes the Installation Segment.

7% CAGR

15% CAGR

26% CAGR

Revenue* ($B)

Operating Profit* ($B)

EPS* ($)

$6.8

$8.3

2014 2017

$0.91

$1.80

2014 2017

$0.8

$1.15

2014 2017

*2014 revenue and operating profit uses a $1.10 Euro to USD foreign exchange rate . See appendix for GAAP reconciliation

Delivering Strengthened Performance:

Profitable Growth

+

+

New Masco. Positioned to Outperform

Leveraging a portfolio of industry leading

global brands with compelling growth

strategies

Aligned management team with a clear

strategic focus

Strong free cash flow generation and capital

management driving value to shareholders

+

Transformative actions have delivered

strengthened results

19

Positioned to

Outperform

Masco 2015 Investor Day - Keith ceo address

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Transcript of Masco 2015 Investor Day - Keith ceo address