2014 masco company overview and strategy

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Masco Corporation Company Overview & Strategy

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Masco Company Overview and Strategy

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Page 1: 2014 Masco Company Overview and Strategy

Masco Corporation

Company Overview & Strategy

Page 2: 2014 Masco Company Overview and Strategy

Masco – Strong Brands with Industry Leading Positions

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BUSINESS SEGMENT

Cabinets and Related Products

Plumbing Products

Installation and Other Services

Decorative Architectural Products

$1.0B

$3.2B

$1.4B

$1.9B

REVENUE 2013

$8.2B Total company

Other Specialty Products

$0.7B

LEADING POSITIONS

§  Leading U.S. kitchen and bath cabinetry brands

§  #1 worldwide in faucets, fittings, showerheads

§  #1 in spas

§  #1 insulation contractor for homebuilders

§  Leading DIY paint and stain provider

§  #1 in vinyl windows in the western U.S.

Page 3: 2014 Masco Company Overview and Strategy

2013 Segment Mix*

R&R = % of sales to repair and remodel channels NC = % of sales to new construction channels NA = % of sales within North America Int’l = % of sales outside North America *Based on Company estimates.

Business Segment

Plumbing Products

Installation and Other Services

Decorative Architectural Products

$3.2B

$1.4B

$1.9B

Revenue 2013 % of Total

39%

23%

17%

$8.2B 100% Total Company

Other Specialty Products $0.7B 9%

R&R% vs. NC NA% vs. Int’l

82% 59%

99% 100%

18% 100%

74% 76%

72% 81%

Cabinets and Related Products $1.0B 12% 57% 93%

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Page 4: 2014 Masco Company Overview and Strategy

2013 International Revenue Split*

*Based on Company estimates.

International Sales Accounted for ~20% of Total 2013 Masco Sales

23%  

7%  

6%  

31%  

9%  

14%  

10%  

UK  Northern  Europe  Southern  Europe  Central  Europe  Eastern  Europe  Emerging  markets  Other  

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Page 5: 2014 Masco Company Overview and Strategy

MASCO PERFORMANCE Masco Drove Improvement During the Downturn

Reduced fixed costs

Strengthened management

Improved underperformers

Refined portfolio

•  Installation profitable Q4 2012

•  Cabinets profitable on an adjusted basis Q2 2013

•  Reduced fixed gross costs by ~$600M, lowered breakeven

•  Divested Danish cabinet business

•  Aligned organization with strategic goal setting and improved planning process

•  Topgraded talent at several BUs

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Page 6: 2014 Masco Company Overview and Strategy

Masco Strengths

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1 Unparalleled brand strength

2 Customer focused innovation

3 Broad market coverage

Page 7: 2014 Masco Company Overview and Strategy

MASCO STRENGTHS 1. Unparalleled Brand Strength Drives Share Gains

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Masco Cabinetry (cabinet manufacturer

in U.S.)

Delta (faucet brand

in North America)

Masco Contractor Services (installer of

insulation in U.S.)

Behr (DIY architectural

coatings in North America)

Milgard (vinyl window

brand in Western U.S.)

Hansgrohe (global faucet & mixer brand)

Arrow, Liberty, BrassCraft and

Watkins (in their respective market categories)

#2

#1

#1

#1 #1

#1

#2

Page 8: 2014 Masco Company Overview and Strategy

MASCO STRENGTHS 2. Customer Focused Innovation

8 * Percentage of 2013 gross sales of manufactured products attributable to new products introduced in trailing 36 months

30%*

Examples of New Products/Technologies

Existing Products

2013 2012 2011

70%

Hansgrohe SelectTM

Collection

KraftMaid New Design Launch

2013 Revenues

BehrPro® Paint

Masco Cabinetry’s ProCision® Process

Kilz PRO-X® Paint

Delta® Toilets

Paint & Primer in One with Advanced Stain

Blocking Formula

KraftMaid® Vanities

Behr DeckOver®

Coating

Page 9: 2014 Masco Company Overview and Strategy

MASCO STRENGTHS 3. Broad Coverage Across Segments, Price Points and Channels

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Segments Price Points Channels

New construction

28%

Repair / remodel 72%

International 19%

N. America 81%

•  Low ticket value ~$20

•  High ticket luxury ~$20K

•  Direct-to-Builder

•  Big box retail

•  Wholesale / dealer trade

Page 10: 2014 Masco Company Overview and Strategy

Masco Opportunities

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2. Leverage

opportunities across our portfolio

1. Drive full

potential of our core businesses

3. Actively manage portfolio

O P P O RT U N I T I E S

Page 11: 2014 Masco Company Overview and Strategy

MASCO OPPORTUNITIES 1. Drive Full Potential of Our Core Businesses

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Current Examples:

●  Extended Delta® brand to toilets and showers based on the power of the brand

●  Increased Behr marketing to the professional painter to add a new channel

●  Extended Hansgrohe into new international markets

1.

Page 12: 2014 Masco Company Overview and Strategy

MASCO OPPORTUNITIES 2. Leverage Opportunities Across Our Portfolio

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●  Improved supply chain by implementing best practices across our portfolio

●  Reduced material costs from integrated purchasing

●  Applied value engineering across businesses

Current Examples:

2.

Page 13: 2014 Masco Company Overview and Strategy

MASCO OPPORTUNITIES 3. Actively Manage Portfolio

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●  Divested underperforming Danish cabinet business

●  Integrated Alsons® showerheads into Delta to provide cost savings and brand extensions

●  Acquired opening price point spa business to augment Watkins’ spas

Current Examples:

3.