Investor Presentation Q4 FY2016

Q4 & FY 2016

October 19, 2016

Earnings Results

2

Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal

entities. WD-40 Company markets maintenance products (“MP”) under the WD-40®, 3-IN-ONE® and GT85® brand names. Currently

included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKETM product lines. WD-40

Company markets the following homecare and cleaning (”HCCP”) brands: X-14® mildew stain remover and automatic toilet bowl cleaners,

2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and no vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet

stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners.

Except for the historical information contained herein, this presentation contains “forward-looking statements” within the meaning of the Private

Securities Litigation Reform Act of 1995. Such statements reflect the Company’s current expectations with respect to currently available

operating, financial and economic information. These forward-looking statements are subject to certain risks, uncertainties and assumptions

that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements.

Our forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: growth

expectations for maintenance products; expected levels of promotional and advertising spending; plans for and success of product innovation,

the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; and forecasted foreign

currency exchange rates and commodity prices. Our forward-looking statements are generally identified with words such as “believe,”

“expect,” “intend,” “plan,” “could,” “may,” “aim,” “anticipate,” “estimate” and similar expressions.

The Company's expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis,

but there can be no assurance that the Company's expectations, beliefs or forecasts will be achieved or accomplished.

Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not

limited to, those identified in Part I―Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended August

31, 2016 which the Company expects to file with the SEC on October 24, 2016.

All forward-looking statements included in this presentation should be considered in the context of these risks. All forward-looking statements

speak only as of October 19, 2016 and we undertake no obligation to update or revise any forward-looking statements, whether as a result of

new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-

looking statements.

Forward-Looking Statements

3

Q4 FY16 RESULTS

4

Q4 FY16 Results

• Top-line sales growth was impacted by foreign currency exchange

rates in Q4 FY16

• When you take both translation (or “constant currency”) and

transaction exposure into consideration, the impacts of foreign

currency exchange rates reduced our total net sales by approximately

$2.8 million

Q4 FY16 Q4 FY15 % Change

Net Sales $97.2 $92.0 6%

Gross Profit (%) 57.4% 54.3% 310 bps

Operating Income $17.6 $15.8 12%

Net Income $14.2 $11.7 21%

EPS (Diluted) $0.99 $0.80 24%

5

Functional currencyMain currency in which

subsidiaries conduct

business; typically the same

as that of the country in

which the subsidiary is

headquartered

Transaction currencyCurrency in which sales,

costs, expenses are

transacted; typically the

same as that of the country in

which the sales transaction

takes place

Reporting currencyAs a U.S. based company

the reporting currency of

WD-40 Company is the

U.S. dollar Conversion

from

transaction

currency to

subsidiaries’

functional

currency

Translation

from

functional

currency to

WD-40

Company’s

reporting

currency

Foreign Currency Impact

Translation

Impact

Transaction

Impact

Subsidiary

(Functional Currency)

UK – GBP

CANADA- CAD

AUSTRALIA- AUD

CHINA- CNY

Subsidiary

(Non-Functional Currency)

UK – USD & EUR

6

Q4 FY16 net sales at Q4 FY16 FX rates Q4 FY16 net sales at Q4 FY15 FX rates Q4 FY16 net sales at Q4 FY15 FX rates

Q4 FY16 Foreign Currency Exchange Impact

In total

changes in FX

rates reduced

net sales by

~$2.8M in 4Q

FY16

$97.2

$102.9

$100.0

Reported Net Sales Translation Impact Transaction Impact

Translation Impact(Functional Currency)

Translation and

Transaction ImpactReporting Currency

Q4 FY16 Net Sales(In millions)

(constant currency) (constant currency plus transaction impacts)(as reported)

$5.7$2.9

7

$7.3 $8.1

$44.3 $40.0

Q4 FY16 Q4 FY15

Americas Net Sales(in millions)

Maintenance Products Homecare and Cleaning Products

Americas Segment

Americas – Q4 FY16 vs. Q4 FY15

$51.6$48.1

• Total reported segment sales ▲ 7%

• Segment makes up 53% of global sales

• Maintenance product sales ▲ 11%

• HCCP sales ▼ 10%

• Maintenance Product (MP) sales:

• U.S. MP sales ▲ 13%

• Driven by higher level of promotional

activities and expanded distribution of

WD-40 EZ-REACH Flexible Straw™.

• Latin America MP sales flat

• Canadian MP sales ▲ 7%

8

$33.1 $31.4

$1.5

$1.9

Q4 FY16 Q4 FY15

EMEA Net Sales(in millions)


EMEA SegmentEMEA – Q4 FY16 vs. Q4 FY15

$33.3$34.6



• Changes in foreign currency exchange rates

had an unfavorable impact on sales

• Net sales adjusted for both transaction and

translation impact ▲ 11%



• EMEA direct market sales ▼ 4%

• 66% of segment sales came from direct

markets

• In GBP-based markets sales ▼ 1% in GBP

• In EUR-based markets sales ▲ 1% in EUR

• EMEA distributor market sales ▲ 23%

• 34% of segment sales came from distributor

markets

• Sales increase driven by improving market

conditions in Eastern Europe

9

$9.2 $8.9

$1.8 $1.7

Q4 FY16 Q4 FY15

Asia-Pacific Net Sales(in millions)


Asia-Pacific Segment

Asia-Pacific – Q4 FY16 vs. Q4 FY15

$10.6$11.0

• Total reported Asia-Pacific sales ▲ 4%



• HCCP sales ▲ 3%

• Australia sales ▲ 9%

• In functional currency (AUD) sales ▲ 12%

• China sales ▲ 12%

• In functional currency (RMB) sales ▲ 22%

• Asia distributor market sales ▼ 18%

• Primarily due to a significant decrease in

sales in driven by timing of customer orders

10

FY16 RESULTS

11

FY16 FY15 % Change

Net Sales $380.7 $378.2 1%

Gross Profit (%) 56.3% 52.9% 340 bps


Net Income $52.6 $44.8 17%

EPS (Diluted) 3.64 3.04 20%

FY16 Results

• Top-line sales growth was impacted by foreign currency exchange

rates in FY16

• When you take both translation (or “constant currency”) and

transaction exposure into consideration, the impacts of foreign

currency exchange rates reduced our total net sales by approximately

$11.7 million

12

FY16 Net Sales at FY16 FX Rates FY16 Net Sales at FY15 FX Rates FY16 Net Sales at FY15 FX Rates

FY16 Foreign Currency Exchange Impact

In total

changes in FX

rates reduced

net sales by

~$11.7M in

FY16

$380.7

$395.9

$392.3

Reported Net Sales Translation Impact Transaction Impact

Translation Impact(Functional Currency)

Translation and

Transaction ImpactReporting Currency

FY16 Net Sales(In millions)

(constant currency) (constant currency plus transaction impacts)(as reported)

$15.2 $3.5

13

$163.7 $156.9

$27.7 $30.4

FY16 FY15

Americas Net Sales(in millions)


Americas Segment

Americas – FY16 vs. FY15

$191.4 $187.3





• Maintenance Product (MP) sales:

• U.S. MP sales ▲ 6%

• Latin America MP sales ▲ 3%

• Canadian MP sales ▼ 14%

• Due to timing of promotional programs

and unstable market and economic

conditions in Western Canada

14

$129.2 $129.7

$6.0 $7.2

FY16 FY15

EMEA Net Sales(in millions)


EMEA SegmentEMEA – FY16 vs. FY15

$136.9$135.2

• Total reported segment sales ▼ 1%


• Changes in foreign currency exchange rates

had an unfavorable impact on sales

• Net sales adjusted for both transaction and

translation impact ▲ 4%

• Maintenance product sales flat


• EMEA direct market sales ▲ 1%

• 66% of segment sales came from direct

markets

• In GBP-based markets sales ▲ 1% in GBP

• In EUR-based markets sales ▲ 11% in EUR

• EMEA distributor market sales ▼ 6%

• 34% of segment sales came from distributor

markets

• Sales decline due primarily to unstable

market conditions in Eastern Europe over full

fiscal year

15

$47.1 $46.7

$6.9 $7.3

FY16 FY15

Asia-Pacific Net Sales(in millions)


Asia-Pacific Segment

Asia-Pacific – FY16 vs. FY15

$54.0$54.0

• Total reported Asia-Pacific sales flat




• Australia sales ▼ 4%

• In functional currency (AUD) sales ▲ 7%

• China sales ▲ 1%

• In functional currency (RMB) sales ▲ 7%

• Asia distributor market sales ▲ 3%

16

THE 55/30/25 RULE

17

Gross Margin

Gross margin can be impacted positively and negatively by things not under the Company’s

control like changes in foreign currency exchange rates and input costs

FY16

56%

FY15

53%

FY14

52%

Gross Margin – 54.3% Q4 FY15 vs. 57.4% Q4 FY16 (+3.1pp)

• Changes in petroleum-based specialty chemicals and aerosol cans (+1.6pp)

• Changes in foreign currency exchange rates in EMEA (+1.2pp)

• Sales mix and miscellaneous (+0.3pp)

• Price increases in EMEA (+0.1pp)

• Lower advertising and promotional discounts (-0.1pp)

Gross Margin – 52.9% FY15 vs. 56.3% FY16 (+3.4pp)

• Changes in petroleum-based specialty chemicals and aerosol cans (+2.4pp)

• Changes in foreign currency exchange rates in EMEA (+0.4pp)

• Sales mix and miscellaneous (+0.4pp)

• Price increases in Asia-Pacific and EMEA (+0.2pp)

• Lower advertising and promotional discounts (+0.1pp)

• Warehousing and in-bound freight costs (-0.1pp)

18

Fiscal Year 55/30/25 Results

* See appendix for descriptions and reconciliations of these non-GAAP measures.

Note: Percentages may not aggregate to EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on the Company’s

consolidated statement of operations are not included as an adjustment to earnings in the Company’s EBITDA calculation.

55/30/25 Business Model Target FY16

Actuals

FY15

Actuals

FY14

Actuals

Gross Margin 55% 56% 53% 52%

Cost of Doing Business 30% 36% 34% 34%

EBITDA 25% 21% 19% 18%

19

GUIDANCE

20

Diluted EPS

Net Income

A&P Investment

Gross Margin

Net Sales

Sales Growth Between 4% and 6%

Between $395 and $404 million

Near 56%

Near 6.0% of net sales

Between $51.3 and $52.3 million

Between $3.64 and $3.71 based on 14.1

million shares outstanding

* As of 10/19/16. The net sales projections for fiscal year 2017 reflect the recent and significant deterioration of the British pound sterling. The

foreign currency exchange rate for the British pound sterling against the U.S. dollar has recently declined by approximately 15 percent from the

average exchange rates in fiscal year 2016. This guidance does not include any future acquisitions or divestitures and assumes that foreign

currency exchange rates and crude oil prices will remain close to current levels for fiscal year 2017. In addition, this guidance does not assume any

significant impact in other income from future balance sheet remeasurements as the Company experienced in fiscal year 2016.

Fiscal Year 2017 Guidance*

21

APPENDIX

22

Q4 FY16 CC* Q4 FY15 % Change

Net Sales $102.9 $92.0 12%


Net Income $15.6 $11.7 33%

EPS (Diluted) $1.08 $0.80 35%

Q4 FY16 Q4 FY15 % Change

Net Sales $97.2 $92.0 6%

Gross Profit (%) 57.4% 54.3% 310 bps


Net Income $14.2 $11.7 21%

EPS (Diluted) $0.99 $0.80 24%

Foreign Currency Translation Impact or“Constant Currency” – Q4 FY16

Financial ResultsAs reported

Financial ResultsConstant currency basis

*Q4 FY16 results translated at Q4 FY15 foreign currency exchange rates

($ in millions; except % change and EPS)

23

(1) This presentation contains certain non-GAAP (accounting principles generally accepted in the United States of America) measures, that our

management believes provide our stockholders with additional insights into WD-40 Company’s results of operations and how it runs its business. Our

management uses these non-GAAP financial measures in order to establish financial goals and to gain an understanding of the comparative performance

of the Company from year to year or quarter to quarter. The non-GAAP measures referenced in this presentation, which include EBITDA (earnings before

interest, income taxes, depreciation and amortization) and the cost of doing business, are supplemental in nature and should not be considered in isolation

or as alternatives to net income, income from operations or other financial information prepared in accordance with GAAP as indicators of the Company’s

performance or operations. Reconciliations of these non-GAAP financial measures to the WD-40 Company financials as prepared under GAAP are as

follows:

Non-GAAP Reconciliation – Q4 FY16

Note: Percentages may not aggregate to EBITDA percentage due to rounding

Cost of doing business:

Total operating expenses - GAAP $ 38,159 $ 34,178

Amortization of definite-lived intangible assets (734) (759)

Depreciation (in operating departments) (696) (683)

Cost of doing business $ 36,729 $ 32,736

Net sales $ 97,152 $ 91,981

Cost of doing business as a percentage of net sales 38% 35%

EBITDA:

Net income - GAAP $ 14,232 $ 11,723

Provision for income taxes 5,073 4,063

Interest income (166) (159)

Interest expense 481 293

Amortization of definite-lived intangible assets 734 759

Depreciation 838 881

EBITDA $ 21,192 $ 17,560

Net sales $ 97,152 $ 91,981

EBITDA as a percentage of net sales 22% 19%

Three Months Ended

8/31/2016 8/31/2015

24

FY16 CC* FY15 % Change

Net Sales $395.9 $378.2 5%


Net Income $55.4 $44.8 24%

EPS (Diluted) $3.83 $3.04 26%

FY16 FY15 % Change

Net Sales $380.7 $378.2 1%

Gross Profit (%) 56.3% 52.9% 340 bps


Net Income $52.6 $44.8 17%

EPS (Diluted) 3.64 3.04 20%

Foreign Currency Translation Impact or“Constant Currency” – FY16

Financial ResultsAs reported

Financial ResultsConstant currency basis

FY16 results translated at FY15 foreign currency exchange rates

($ in millions; except % change and EPS)

25

(1) This presentation contains certain non-GAAP (accounting principles generally accepted in the United States of America) measures, that our

management believes provide our stockholders with additional insights into WD-40 Company’s results of operations and how it runs its business. Our

management uses these non-GAAP financial measures in order to establish financial goals and to gain an understanding of the comparative performance

of the Company from year to year or quarter to quarter. The non-GAAP measures referenced in this presentation, which include EBITDA (earnings before

interest, income taxes, depreciation and amortization) and the cost of doing business, are supplemental in nature and should not be considered in isolation

or as alternatives to net income, income from operations or other financial information prepared in accordance with GAAP as indicators of the Company’s

performance or operations. Reconciliations of these non-GAAP financial measures to the WD-40 Company financials as prepared under GAAP are as

follows:

Non-GAAP Reconciliation – FY16

Note: Percentages may not aggregate to EBITDA percentage due to rounding

Cost of doing business:

Total operating expenses - GAAP $ 143,021 $ 134,788

Amortization of definite-lived intangible assets (2,976) (3,039)

Depreciation (in operating departments) (2,744) (2,664)

Cost of doing business $ 137,301 $ 129,085

Net sales $ 380,670 $ 378,150

Cost of doing business as a percentage of net sales 36% 34%

EBITDA:

Net income - GAAP $ 52,628 $ 44,807

Provision for income taxes 20,161 18,303

Interest income (683) (584)

Interest expense 1,703 1,205

Amortization of definite-lived intangible assets 2,976 3,039

Depreciation 3,489 3,425

EBITDA $ 80,274 $ 70,195

Net sales $ 380,670 $ 378,150

EBITDA as a percentage of net sales 21% 19%

Twelve Months Ended

8/31/2016 8/31/2015

Investor Presentation Q4 FY2016

Investor Relations

Transcript of Investor Presentation Q4 FY2016