A PORTFOLIO GROWTH STORY - 2018 New Hire Orientation
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August 2018
New Hire Orientation
A PORTFOLIO
2018GROWTH STORY
Maximizing Shareholder Value Through Strong Core Businesses
+ Incremental Capital Deployment
All figures are on a before charges/gains basis for continuing operations unless otherwise indicated. Refer to Investor Center section of FBHS.com website
for reconciliations of non-GAAP figures.
DISCLAIMER
This presentation contains certain “forward-looking statements” regarding business strategies, market potential,
future financial performance and other matters, including all statements with respect to “Continued
Performance,“ “Expected Growth,” “Outlook,” “Future”, “Potential” and "guidance" and statements with words
such as "will," “capability,” "should," "could," "expects," "potential,“ “estimates” or "projected" or the letter “E”.
Where, in any forward-looking statement, we express an expectation or belief as to future results or events,
such expectation or belief is based on the current plans and expectations at the time of this presentation.
Although we believe that these statements are based on reasonable assumptions, they are subject to
numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially
different from those indicated in such statements, including the risks described in our Annual Report on Form
10-K as filed with the Securities and Exchange Commission. Except as required by law, we undertake no
obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence
of anticipated or unanticipated events, new information or changes to future results over time or otherwise.
This presentation includes financial measures, including Net Debt to EBITDA, operating income before
charges/gains, operating margin before charges/gains, and diluted EPS before charges/gains, that are derived
on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles
(GAAP). We offer these measures to assist investors in assessing our financial performance and liquidity under
GAAP, but investors should not rely on these measures as a substitute for any GAAP measure, including net
income or operating income. In addition, these measures may be inconsistent with similarly titled measures
presented by other companies. All financial information presented herein is unaudited. For more information,
including reconciliations of these non-GAAP financial measures to the most comparable GAAP measures,
please visit the “Investor Center” section of the Company’s website at www.FBHS.com.
2
OUR PORTFOLIO
PLUMBING CABINETS DOORS SECURITY
FY17 Sales: $1.7B $2.5B $0.5B $0.6B
FY17 OI*: $366M $272M $75M $89M
*Represents
operating income before charges/gains and reflects adoption of 3
ASU 2017-07 accounting change during first quarter of 2018.
ATTRACTIVE CATEGORIES & PARTS OF MARKET
1
Consumer Involved Categories
• Products consumers can see and touch result in higher
levels of excitement & engagement
• Get paid for faster pace of innovation
• Strong brands + leveraging of consumer insights and
marketing creates higher sales and margin potential
2
Robust Housing Markets
• Strong share positions in the most
attractive housing markets in the
world: United States, Canada and
China Canada
China USA
4
PORTFOLIO GROWTH: The Early Years (2012 – 2016)
• In first 5 years post-spin, sales and profit grew significantly within each segment
• As volumes grew, cabinets was the major engine of overall company growth
% of Total FBHS
Operating Income(1) ($M)
Net Sales ($B) & Margin(1) (%) 2012-2016 2012-2016
Sales Growth Op. Income
10.8%
Growth(1)
$2.4 $260
Cabinets $1.3 3.0%
2012 2016
$40
58% 49%
2012 2016
20.9%
15.4%
$1.5 $321
Plumbing $1.1 $169 23% 34%
2012 2016 2012 2016
13.2%
Doors $0.3
$0.5 1.9% $62 8% 12%
$6
2012 2016 2012 2016
13.7%
14.1%
Security $0.4
$0.6
$55
$80 11% 5%
2012 2016 2012 2016 1) Represents Operating Income & Margin before
charges/gains and reflects adoption of ASU 2017-07 5
Accounting Change during first quarter of 2018. Growth
rates exclude Corporate G&A expense.
PORTFOLIO GROWTH: The Next Chapter (2017 – 2021E)
• We expect to drive similar or higher levels of overall sales and profit growth in next 5 yr. period
• Now, Plumbing will be the engine for growth as we accelerate our highest margin business
Expected % of Total FBHS
Operating Income(1,2) ($M)
Net Sales(2) ($B) & Margin(1,2) (%)
2017-2021E 2017-2021E Op.
~14% Sales Growth(2) Income Growth(1,2)
11.0%
Cabinets $2.5 ~$3B ~$400+
$272
2017A 2021 Potential 2017A 2021 Potential
~25% ~25%
~21%
21.3%
Plumbing $1.7
~$3B+
$366
~$650+
~60% ~60%
2017A 2021 Potential 2017A 2021 Potential
~17%
14.8%
Doors $0.5
~$0.7B
$75
~$125+ ~10% ~10%
2017A 2021 Potential 2017A 2021 Potential
~18%
~$0.7B
14.9%
~$130+
~5% ~5%
Security $0.6 $89
1) 2017 Operating Income & Margin before charges/gains
2017A 2021 Potential 2017A 2021 Potential revised to reflect adoption of ASU 2017-07 Accounting 6
Change during first quarter of 2018.
2) Includes growth from potential acquisitions.
PORTFOLIO EPS POTENTIAL: Led by Plumbing &
Value-Creating Capital Deployment
Earnings Per Share1
• Stable core businesses;
housing continues elongated
recovery
• Plumbing sales acceleration
• Strong sales & margin
growth across segments • ~$4B Capital Deployment
• Led by Cabinets
• $3.5B+ Capital Deployment
$~6.00
$3.08
$0.57
2011 2017 2021E
1Before Charges/Gains on a Continuing Operations Basis.
7
INCREMENTAL GROWTH: Significant EPS Tailwind
Based on solid growth in our core businesses, strong market share positions and continued
housing market recovery, we believe we have potential to deploy additional ~$4B over the next
4 years on acquisitions, share repurchases and dividends with reasonable leverage
($ in millions)
CAPITAL DEPLOYMENT DEPLOYMENT POTENTIAL
2012 – 2018 YTD(1) REMAINDER OF 2018 – 2021(2)
Cash Deployed Cash Available to Drive Incremental Value
Source: Source:
Cash 2,055 Cash 2,700
Added Debt 1,733 Debt 1,300 – 2,200
Total 3,788 Total 4,000 - 4,900
Capital Allocation Potential Capital Allocation
Acquisitions 1,510 Acquisitions & Share
~3,500 – 4,400
Repurchases
Share Repurchases 1,794
Dividend 484
Dividend ~500
Total 3,788
Total 4,000 - 4,900
Net Debt to EBITDA1 2.1x Net Debt to EBITDA 2.0x to 2.5x
1) Before Charges/Gains on a Continuing Operations Basis. Data period 12/31/11
through 6/30/18. 8
2) Assumes housing market recovers to 1.5 million new construction starts in 2021.HOUSING: A FAVORABLE MARKET
BACKDROPA STRONG FOUNDATION: U.S. Housing Market
We expect an elongated recovery in the housing market to an estimated steady state
of ∼1.5M new construction starts by 2020-21 based on supply meeting demand trends
DEMAND SUPPLY
Favorable Demographics for Home Ownership Labor & Land Constraints
Baby Boomers – Retaining, increasing Governing pace
Millennials – 5 year delays in marriage/child but gradually improving
placing upward pressure on future formations 10A STRONG FOUNDATION: Repair & Remodel (R&R)
We expect R&R to stabilize at about 5% in all of our categories
ANNUAL R&R GROWTH TO STEADY STATE SCENARIO
5% ~5%+
5% 5% 5%
4.5%
4%
2012 2013 2014 2015 2016 2017 2020-
2022 E
Pent-up demand Consumers more Well-positioned to
build in 2007-11: willing to invest capture growth
growth was below in their homes Two thirds of our home
historical averages Employment segments’ sales are
Early in the recovery big- Home prices driven by R&R
ticket projects lagged even Access to credit Growth of GPG and
further large embedded base of
Moen products
Increased median age of
homes has increased; now Leading share of the
around 50 years cabinet dealer channel
11GROWTH ACROSS OUR CORE PORTFOLIO OF COMPANIES
GLOBAL PLUMBING GROUP
The Highlights: 2017 Sales Mix: Leading Brands:
• Potential to accelerate sales
growth to ~$3.0B by 2021
• Maintain already-high (~21%) 26%
portfolio operating margin(1)
45%
• Stronger management team
Wholesale
with broader market experience
Retail
• Enhanced capabilities 29% International
Performance: Past & Future Potential
Net Sales ($B) Operating Income(1) ($M) Operating Margin(1) (%)
~$3.0+ ~$650+ 21% ~21%
$1.7 $366 15%
$1.1 $169
2012A 2017A 2021E 2012A 2017A 2021E 2012A 2017A 2021E
1) 2012 and 2017 Operating Income & Margin before charges/gains, and revised to 13
reflect impact of ASU 2017-07 Accounting Change during first quarter of 2018GLOBAL PLUMBING GROUP
Competitive Advantages that Drive Value
Leading
Enhanced Leverage
Brands Leverage
Innovation Our Scale
Consumer
Dedicated Insights
Sales Channels
Platform to Acquire
Adjacent Brands &
Categories Flexible Global
Enter New Own Critical
Sell More Supply Chains
Geographies Parts of
Through Current (U.S., Mexico,
Customers Manufacturing China, & S.E. Asia)
Process
Digital Marketing &
Analytics
How we grow sales and …and create pricing
margin over time… power to offset inflation 14PLUMBING EVOLUTION DRIVING FASTER GROWTH
Strong Brand
Who We Were - 2015 High Margins
Exclusive Builder Contracts
Large Installed Base
Global Supply Chain
Who We Are Today
Grow Multiple Brands Simultaneously
Added Products, Price Points, & Geographies
Leverage Supply Chain & Distribution Over
Expanded Product and Brand Set
Supports New Acquisitions & JVs
New Go-to-Market Concept: House of ROHL
New Capabilities: E-Commerce, Marketing &
Data Analytics
15CABINETS
The Highlights: 2017 Sales Mix: Leading Brands:
• Multi-brand strategy across price Dealer
points, styles and channels with Retail: In-Stock
7%
flexibility to pivot in alignment 8% Retail: Special Order
with market demands Builder
• Sales growth in the most 14% Canada
49%
attractive areas of the market
today: value and in-stock
22%
• Dealer channel leader
Performance: Past & Future Potential
Net Sales ($B) Operating Income(1) ($M) Operating Margin(1) (%)
$2.5 ~$3.0 ~$400+ ~14%
$272 11%
$1.3
$40 3%
2012A 2017A 2021E 2012A 2017A 2021E 2012A 2017A 2021E
1) Before Charges/Gains. 16CABINETS
Competitive Advantages that Drive Value
Multi-brand
strategy Regional supply
chain for semi-
Flexibility to shift
5000+ dealers custom products
focus when
consumer and market
Positioned across dynamics change
price, products,
channels and Dedicated in-
Consumer categories to manage stock vanity
innovation growth in most
supply chain
attractive areas
How we grow sales and …and create pricing
margin over time… power to offset inflation 17CABINETS PIVOT: To Consumer Demand & Our Strengths
• Consumer & Builder demand strong for Value Cabinetry and In-Stock Cabinets & Vanities
• Rationalizing select capacity, expanding capacity and product range in best-selling segments
Target Operating Margin: + another ~300 bps
as we pivot toward lower volatility/scale
Operating Margin +300 bps Operating Margin +300 bps parts of business with predictable volumes
17%
Cabinet Product Mix
33% Grew Investing In-Stock
Value
Mid-Tier
40% Pared Back Premium
Rationalizing
10% Maintained Maintaining
2014A 2017A 2021E
Cabinet Channel Mix
37%
Growth Dealer
Growth
Focus Focus HC In-Stock
17%
Builder Direct
15%
HC Special Order
Selective
23% Margin Partnerships Canada
Focus & Segments
8%
18
2014A 2017A 2021EDOORS
The Highlights: 2017 Sales Mix: Leading Brands:
• Above market sales growth in
fiberglass entry doors 3%
• Continued operating margin 23%
expansion
• Enhanced R&D and innovation
capabilities and cadence Wholesale
• Trailing 12 month sales and margin 74% Retail
growth well above peers Other
Performance: Past & Future Potential
Net Sales ($B) Operating Income(1) ($M) Operating Margin(1) (%)
~$0.7 ~$125+ 15% ~17%
$0.5 $75
$0.3
$6 2%
2012A 2017A 2021E 2012A 2017A 2021E
2012A 2017A 2021E
1) Before Charges/Gains on a Continuing Operations Basis. 19DOORS
Competitive Advantages that Drive Value
Leading Fiberglass Door Brand in
Fastest Growing Segment of the Full System
Large-scale with Wide
Market Manufacturing Range of
Choices
Increased Pace
Best Fabrication Engineered
of innovation Owned,
Network in Material
Dedicated
N. America Capability
Supply Chain
How we grow sales and …and create pricing
margin over time… power to offset inflation 20SECURITY
The Highlights: 2017 Sales Mix: Leading Brands:
• Sales growth above GDP driven
by innovation, pricing and
international expansion 25%
• Continued operating margin
expansion 48%
• Lower cost global supply chain Retail
International
27%
Commercial
Performance: Past & Future Potential
Net Sales ($B) Operating Income(1) ($M) Operating Margin(1) (%)
$0.6 ~$0.7 ~$130+ 15% ~18%
$89 14%
$0.4 $54
2012A 2017A 2021E 2012A 2017A 2021E 2012A 2017A 2021E
1) 2012 and 2017 Operating Income & Margin before charges/gains, and revised to 21
reflect adoption of ASU 2017-07 Accounting Change during first quarter of 2018.SECURITY
Competitive Advantages that Drive Value
Leading Brands
Strong Share Position
Across Channels &
Stable Growth Customers Strategic Sourced
Based on GDP Components
Increased Pace
Flexible, Global
of innovation
Supply Chain
How we grow sales and …and create pricing
margin over time… power to offset inflation 22MANAGING THE PORTFOLIO FOR
VALUE CREATIONA STRONG FOUNDATION: Our Business Model
We have a strong foundation that enables us to deliver profitable growth including
experienced leaders, channel leadership, operational excellence, innovation and leading
brands.
Performance-Driven Differentiated Consumer
Culture Approach & Attributes Focused
Drive: People who want to Competitive Attractive Categories
win and deliver results in our Advantages: Unique & Brands: Consumer-
performance-driven, team- aspect of each involved purchases in
based culture company; drives markets with long-term
Operational Excellence: growth, share gains & growth
Accountability, transparency margin Innovation: Fresh, on-
and autonomy in a Strong Capital trend product lines;
decentralized structure Structure: Low debt excites consumers
Team & Talent from diverse leverage & strong cash
backgrounds, experiences flow to support growth
and industries
24CONSISTENT PORTFOLIO GROWTH
Since October of 2011, we have consistently grown sales, margins and EPS through
active management of our business segments, as well as aggressive management of
capital and resources against our best internal and external opportunities.
Total Net Sales Operating Margin
(in billions) (OM %)
$5.0 $5.3 ~$5.6 12.9% 13.6% ~13.9%
$3.7 $4.0 $4.6 9.0% 10.1% 11.4%
$3.1 6.7%
2012 2013 2014 2015 2016 2017 2018E 2012 2013 2014 2015 2016 2017 2018E
Earnings Per Share
($/share)
~$3.67
$2.75 $3.08
$2.07
$1.37 $1.74
$0.83
2012 2013 2014 2015 2016 2017 2018E
All chart data is before charges/gains on a continuing operations basis. Operating margin reflects impact of ASU 2017-07 accounting change during first
quarter of 2018. 2018 estimates represent guidance, and midpoint of company guidance for Net Sales and EPS as of 7/26/18. Operating Margin
estimate represents 25 to 50 basis points increase vs. FY 2017 result of 13.6%. The company undertakes no duty to update this information. 25You can also read
