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Other Specialty Products Segment Overview
3
Masco Corp. (Breakdown of 2014 Revenue)
Rest of
Masco
Other
Specialty
Products
Segment
8% 92%
Revenue $0.7B
Margin as Adjusted* 6.8%
% of Masco EBIT as Adjusted* 6%
% Revenue outside N. America 26%
12/31/2014
Currency Exposure USD / GBP
Commodity Exposure TiO2 / Resins
/ Glass
% Repair & Remodel Sales 74%
*Operating profit, as adjusted excludes $1M of rationalization charges for Other Specialty Products and $63M of net
rationalization charges for Masco.
Record of Growth
$4
$24
$41
$48
2011 2012 2013 2014
5
Adjusted Operating Profit ($M)
129% CAGR
*Excludes business rationalization charges for 2014, 2013, 2012, and 2011 of $1 million, $6 million, $1 million and $31 million, respectively. Excludes
2012 warranty expense and other intangible asset impairment charge of $12 million and $42 million, respectively. Excludes 2011 goodwill and other
intangible asset impairment charge of $374 million.
• Pursue geographic expansion with Milgard
• Extend Milgard’s leadership position in Western U.S.
• Extend UK Window Group’s leadership position
Segment Strategic Priorities
7
1
2
3
8
Western U.S. Window
& Patio Door Industry
$1.2B
Strong Revenue Growth
vs. Industry (2011 – 2017 CAGR)
7.5%
12%
Industry Milgard
Milgard
S T R A T E G Y # 1 E X T E N D M I L G A R D ’ S L E A D E R S H I P P O S I T I O N I N W E S T E R N U S
Milgard’s Leadership Position Provides Strong Platform for Growth
Source: Bain Consulting and Company Estimates
#1
9 Source: Bain Consulting and Company Estimates
California Washington Colorado Oregon Arizona SmallerWestern States*
*Smaller Western States include MT, HI, AL, UT, WY, NV, NM
2.4M
.6M .6M
.4M .4M
.8M
Milgard share
Total
Addressable
Units
Breakdown of Milgard
Addressable Units
S T R A T E G Y # 1 E X T E N D M I L G A R D ’ S L E A D E R S H I P P O S I T I O N I N W E S T E R N U S
Despite Leadership Position Significant Opportunities Exist in Underpenetrated Geographies
10
Trusted Partner Innovation Best Warranty Customer Service
S T R A T E G Y # 1 E X T E N D M I L G A R D ’ S L E A D E R S H I P P O S I T I O N I N W E S T E R N U S
Milgard’s Value Proposition is a Differentiator for Window Dealers
SmartTouch®
Examples of New Products
11
Essence Wood Windows & Doors – “Re-imagined”
Premium Painted Vinyl
Moving Glass Wall Systems
Vinyl Swing Door
New Products Last 3 Years
as % of 2014 Sales
14%
S T R A T E G Y # 1 E X T E N D M I L G A R D ’ S L E A D E R S H I P P O S I T I O N I N W E S T E R N U S
Innovation will Continue to be a Driver of Success
12
Estimated
Sales Opportunity:
~$150-$185M
over the next
three years
S T R A T E G Y # 1 E X T E N D M I L G A R D ’ S L E A D E R S H I P P O S I T I O N I N W E S T E R N U S
Key Execution Initiatives
+
+
Grow in underpenetrated geographies
Leverage Milgard’s value proposition
and innovation
Target key dealers
13
First Target: Texas
Western U.S.
Texas
S T R A T E G Y # 2 P U R S U E G E O G R A P H I C E X P A N S I O N I N T E X A S
Texas Represents a Compelling Organic Growth Opportunity
1.3M Addressable Window Units
Source: Bain Consulting and Company Estimates
Estimated
Sales Opportunity:
~$10-$15M
over the next
three years
+
+
Build manufacturing in Texas
Leverage innovation
Grow Texas dealer base
14
S T R A T E G Y # 2 P U R S U E G E O G R A P H I C E X P A N S I O N
Key Execution Initiatives
15
83%
Masco’s Leading Position in UK Vinyl / Composite
17%
2014 Palmer Market Report
S T R A T E G Y # 3 E X T E N D U K W I N D O W G R O U P ’ S L E A D E R S H I P P O S I T I O N
Masco’s UK Window Group Holds a Leadership Position in the Most Attractive Segment of the UK Window Market
6.9M addressable window units
All other
competitors #1
Masco
16
S T R A T E G Y # 3 E X T E N D U K W I N D O W G R O U P ’ S L E A D E R S H I P P O S I T I O N
Key Execution Initiatives
Estimated
Sales Opportunity:
~$40-$50M
over the next
three years
+
+
Grow the core
Accelerate innovation
Grow in new sales channels
Other Specialty Products 3 Year Outlook
17
The Segment is expected to generate 10-13% operating margins in 2017
with sales growing at 9-11% CAGR during the next 3 years
2014 OtherSpecialty Products
Net Sales
2017 OtherSpecialty Products
Net Sales
$701M
$150M-$185M $40M-$50M
$10M-$15M
~$905M -
~$955M
Core Sales Growth
Milgard Geographic Expansion
UKWG
I N S U M M A R Y
Other Specialty Products is a Growth Segment for Masco
18
• Milgard Windows – leader in most attractive segment of
the Western US window industry – compelling opportunities for growth
• Milgard uniquely positioned to deliver profitable growth – by leveraging its strong brand, value proposition and innovation
• Masco’s UK Window Group is the leader in UK vinyl and
composite window market – with clear strategies to leverage its leadership position for
greater growth
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