wd-40 company -...

WD-40 Company “We only see one market, and it is

global.”

Except for the historical information contained herein, this news release contains forward-looking statements concerning WD-40 Company's outlook for sales, earnings, dividends and other financial results. These statements are based on an assessment of a variety of factors, contingencies and uncertainties considered relevant by WD-40 Company. Forward-looking statements involve risks and uncertainties, which cause actual results to differ materially from the forward-looking statements, including impacts of promotional programs, impacts of line extensions and the uncertainty of market conditions, both in the United States and internationally. The company's expectations, beliefs and projections 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 projections will be achieved or accomplished.The risks and uncertainties are detailed from time to time in reports filed by WD-40 Company with the SEC, including Forms 8-K, 10-Q, and 10-K, and readers are urged to carefully review these and other documents.

The information contained in this presentation is a review of the Company’s fiscal 2007 results ending August 31, 2007. We urge investors to stay informed and updated on the Company’s developments by reviewing the Company’s quarterly press releases and conference calls as they are posted on the website: www.wd40.com/ir (Investor Relations).

WD-40 Company is…• A global consumer products innovation, marketing

and distribution company.• A company with values that focus on the long term

growth of its people, brands and profits.• A company of amazing, strong brands.• A company of unique broad, distribution.• A specialist in niche markets or segments.

WDFC Investment ProfileGlobal, diverse business…

WD-40 sold in more than 160 countries worldwide.

More than half of WD-40 sales were outside the US.

Brands sold in multiple channels: retail, industrial, institutional.

Portfolio of 9 brands.

Efficient Operation…Sales per employee of $1.1

million.Net income per employee of

$113,000. (at FY07)

Asset light strategy…Capex annual needs of $3mm

past 5 years.Outsourced manufacturing and

distribution.

Current and long-term return to shareholders...

Dividend yield of ~2.8%.* Dividend increases of 14% in

Dec. 06 and 10% in Mar. 05.

Focused on creating value…ROIC emphasis. ROIC was

17.1% in FY06 and 20.1% in FY07.Employee bonuses tied to profit

drivers and ROIC.

Priority in new product development (NPD) investment…

NPD touched every brand.NPD delivered more than $134

million in sales from FY05-FY07.

Small Market Cap…~$630 million*17.3 million shares outstanding*

Ownership…Insiders: � 5.5%Institutions: 72%*Top holders: NWQ, Allianz,

Barclays Global, Champlain, Wells Capital, Vanguard, Parnassus

(at 11-7-07)

*at 8-31-07

A simple focusWe are in the

•Squeak

•Smell

•Dirt&

business

Your FORTRESS of Brands!

Created the drip oil Market in the US. #1 brand.

Created Australian heavy-duty hand cleaner

market. #1 brand in Grocery.

Created the long-duration ATBC market. #1 brand.

Created the mildew stain remover market.

Created rug deodorizer mkt. #2 brand, #1 in aerosol.

Created the US heavy-duty

hand cleaner market. #1 brand in Grocery.

Created the spray lubricant market. 80% share of US consumer

market. #1 brand.

Created the aerosol carpet stain remover market. 50% share of US consumer

market. #1 brand.

Created the UK carpet

stain remover market. 40% share of UK consumer

market. #1 brand.

Everyday products meeting everyday consumer needs

The core strengths of WD-40 Company

• A Clear Vision• Outsourcing business model• Diversification – more ways to win

Brands – nine leading brandsBorders – 160 plus countriesBusiness channels – 62 plus trade channels

Ha

rdw

are

Ha

rdw

are

PliersPliers

ScrewdriversScrewdrivers

TapesTapes

ChiselsChiselsWrenchesWrenches

LevelsLevels

One trade channelOne trade channel

One brandOne brand

StanleyStanley

HammersHammers

HandHand SawsSaws

Auto PartsAuto Parts

Mass MerchantsMass Merchants

Industrial SupplyIndustrial SupplySporting Goods Sporting Goods

GroceryGroceryDiscount Stores Discount Stores MilitaryMilitary Office SupplyOffice Supply

PlumbingPlumbing

ElectricalElectricalClubsClubs

HardwareHardwareHome ImprovementHome Improvement

Drug StoresDrug Stores

Dollar storesDollar stores

Farm SupplyFarm Supply

Sell the consumer & make it easy to buy!

Net Sales trend 1998 - 2007

Net Sales trend 1998 - 2007

$0

$50

$100

$150

$200

$250

$300

$350

in U

S$ m

illio

ns

FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

HHCL - Rest of the WorldHHCL - USAHDHC - Rest of the WorldHDHC - USALubes - Rest of the WorldLubes - USA

Comparison of 7 Year Cumulative Return

* $100 invested on 8/31/00 in stock or index-including reinvestment of dividends. FY ending August 31.

$-

$50

$100

$150

$200

$250

$300

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

WD-40 CompanyS&P 500S&P Smallcap 600Russell 2000Peer Group

Growth of WDFC…

$240

$250

$260

$270

$280

$290

$300

$310

'05 '06 '07$24$25$26

$27$28$29$30$31$32

'05* '06 '07

Net Income$MM

+5.8%

+12.2%Sales

*Pro forma net income reflecting the expense of stock options in2005. After-tax expense would have been $1.2mm in 2005.

$MM

+9.0%

+7.3%

Sales by Geographic Segment

$0 $50 $100 $150 $200America

s

Europe

Asia-P

ac

'07 '06 '05

• Asia-Pacific• Asia, Australia, Pacific Islands• 8% of total business in FY07• Sales of WD-40, 3-IN-ONE, Solvol, No Vac• Direct market opened in China

• Europe• Europe, Middle East, Africa• 31% of total business in FY07• Sales of WD-40, 3-IN-ONE, 1001• Sales CAGR of 19.9% since 2002

• Americas• North, Central & South America• 61% of total business in FY07• Sales of all brands except 1001 and Solvol

Sales $MM

Sales by Product Category

• Hand Cleaners• Lava and Solvol brands• 2% of total sales• Profitable segment, minimal investment

• Household Products• Carpet Fresh, No Vac, X-14, 2000 Flushes, Spot

Shot, and 1001 brands• 28% of total sales• Dynamic business, reliant on NPD

• Lubricants• WD-40 and 3-IN-ONE brands• 70% of total sales• Strong growth in developing markets and due

to NPD$0 $50 $100 $150 $200

Lubricants

HouseholdProducts

HandCleaners

'07 '06 '05

$Millions

Lubricant sales CAGR 10.0% since 2002

($MM) FY07 FY06 change

Sales 307.8$ 286.9$ 7.3%Op Inc 49.0 46.0 6.5%Net Income 31.5 28.1 12.2%EPS 1.83$ 1.66$ 10.2%

Annual Results FY07 vs. FY06

FY07 Compared to FY06

Sales•Lubricants +13.6%•Hand cleaners –3.3%•Household Products –5.3%

Selling, General & Admin•+9.4% vs. FY06•25.5% of sales in FY07, +0.5pp•Due primarily to increased employee related costs, and changes in foreign exchange rates

Gross Margin• 48.4% of sales; +0.2pp vs.

FY06 Mainly due to price increases in Q3-FY06 mitigating higher underlying COGS

Advertising & Promotion• +$0.6mm at $20.7mm• 6.7% of sales; -0.3pp vs. FY06

Fiscal Year 2008 Guidance

Net sales growth of 7% - 10% to $329 - $339 million.

Advertising & Promotion investment between 6.5% and 8.5% of sales.

Net income of $31.1 - $32.8 million.

EPS between $1.83 to $1.93 based on an estimated 17.0 million shares outstanding.

Major Concerns in 2007 & 2008

• Continued high raw material costs – particularly steel and petroleum-based products and components

• Continued high fuel costs and the impact on distribution expense

• Household Products Categories

Goal: FY06 – FY10

Build = WD-40 brand globally and other brands selectively.Defend = All brands, all markets.

Acquire = Inquisitive for the right acquisition

Shares outstanding2006 16.9 mm2010 17.5 mm

FY06-FY10Segment Sales ($MM) FY06 FY07 FY08 FY09 FY10 CAGR

Lubricants 190$ 216$ $255 - $275 7.6% - 9.7%

Household Products 90$ 85$ $113 - $123 5.9% - 8.1%

Hand Cleaners 7$ 6$ $7 - $9 0% - 6.5%

Total Sales 287$ 308$ $375 - $407 6.9% - 9.1%

Net Income 28.2$ 31.5$ $40.1 - $43.6 9.2% - 11.5%

EPS 1.66$ 1.83$ $2.30 - $2.50 8.5% - 10.8%

The WDFC Value Fortress…

Exceptional People

Brand Portfolio

Operational Excellence

FinancialDiscipline

IncreaseROIC

ImproveMargins

Drive ProfitableGrowth

Creating Long-term Value

Exceptional People are the foundation of WD-40 Company…

“The WD-40 Company tribe is an investment…not an expense.”

• Culture of learning and coaching is embedded in organization.

– WD-40 Leadership Academy– President’s Path to Leadership annual scholarships– Leaders Coaching Leaders – mentor program– Ongoing executive coaching program

People - Products - Passion

Typhoon ZoneReview

Values

Planning

Execution

Vision

Servant leadership with edge

Learning Moment

LearningDon’t mark my paper

help me get an “A”

Results in a tribal culture that values:

•Caring

•Candor

•Accountability

•Responsibility

What mountain do we want to climb?

Values are principles that guide

our behavior

© 2006 The Learning Moment Inc. All rights reserved. Do not duplicate

thelearningmoment.net

WD-40 Company Values…

1. We value doing the right thing.2. We value creating positive lasting memories in all of

our relationships.3. We value making it better than it is today. 4. We value succeeding as a team while excelling as

individuals. 5. We value owning it and passionately acting on it. 6. We value sustaining the WD-40 economy.


Exceptional People

Brand Portfolio


FinancialDiscipline

IncreaseROIC

ImproveMargins



Brand Portfolio: Driving profitable growth…

• Geographic Development• Trade Channel Development• New Product Development• Acquisition

Geographic development: China

• WD-40 has been sold in China for years through an independent distributor.

• Faster growth potential can be achieved through direct operations.

• Our subsidiary, Wu Di Shanghai Trading began functioning in March 2007.

• SG&A costs for direct operations in China totaled $1.4 million in FY07, or 5.4 cents per share after tax.

• WD-40 is yielding immediate results from direct operations -China sales grew by 50.3% in the year.

Geographic development: Europe

Continued expansion in Europe• Our long-standing investment in Europe is paying off as

our European sales have grown at a CAGR of 19.9% since 2002.

• Direct operations now in: Austria, Denmark, France, Germany, Italy, Netherlands, Portugal, Spain, UK.– European Direct grew by 21.6% in FY07.

• Exclusive distributors in Eastern & Northern Europe and the Middle East.– European Distributors grew by 22.8% in FY07.

• We continue to see substantial growth opportunities across Europe in the years ahead.

Geographic development: Latin America

Continued expansion in Latin America• Sales up 6.5% in FY2007.• Continued development and significant sales in Mexico. - Home Depot

now there with 60+ stores.• High growth in South America, with >20% sales increases in Brazil,

Argentina, Peru, and Venezuela in FY2007.

Geographic development: Asia

Continued expansion in Asia• Total Asian Sales (including China) were up 8.0% in FY2007.• Sales are primarily WD-40 brand.• Sales growth in Philippines, India, Indonesia, Thailand and Singapore. • Managed through our offices in Kuala Lumpur, Malaysia and Shanghai,

China.

Growing across trade channels…

• New points of sale opportunities are available due to innovation and line extensions like WD-40 No-Mess Pen and Spot Shot Pet Clean

– Janitorial– Hobby/Crafts– Office Supplies

• Expanding distribution from professional end-users in developing markets to consumers and do-it-yourselfers

Growing through new product development (NPD)…

• Formation of Team Tomorrow in 2002.• Enhanced investment in R&D since, including $3.8 million in fiscal 2007.• Two aspects of our NPD:

– Innovation: creation in better form – Renovation: improving an existing product

• Past NPD have touched every single brand.• NPD introduced in past three years yielded close to $134 million in sales

during the same period.

•Permanently attached straw

•Sprays two ways

•Innovative, high-tech design

•Solves the #1 consumer complaint - Losing the straw!

US market conversion in Q3 2008

Leveraging new product development (NPD)…

• Smart Straw conversion in Q3 FY08.• U.S. converting mid-size cans to new delivery system.• Better margin opportunities for WD-40 as well as our customers, while

delivering value to the consumer. • Opportunity to optimize the WD-40 SKU portfolio, as well as discounts,

allowances, and cost of goods.• Significant investment in capital equipment and advertising and promotion

to support conversion.• Will not see the full impact of conversion until fiscal 2009.

3-IN-ONE Professional: Garage Door Lubewith Smart Straw technology

• Unique lubricant with built-in straw• Sprays two ways• Waterproofs metal surfaces,

preventing rust & corrosion• Stops squeaks & prevents sticking

Old X-14 Family New X-14 Family

The Brand Renovation of X-14

Acquisitions

• We will continue to actively search for acquisition opportunities that meet both our financial and strategic criteria.

• Brands that we can roll up into our business infrastructure and that would benefit from our marketing, innovation and distribution competencies.

• …and can be acquired at the right price.


Exceptional People

Brand Portfolio


FinancialDiscipline

IncreaseROIC

ImproveMargins



Operational Excellence: Focus on improving margins

• Cost Reduction & Containment Team• Global Sourcing & Supply Chain Evolution• Innovation• Price increases as necessary• Acquisition

Operational Excellence: Focus on improving operating leverage

• Constant drive for operational efficiency• Discipline in operating expenses• Utilizing global structure• Continued development of people, processes, and systems


Exceptional People

Brand Portfolio


FinancialDiscipline

IncreaseROIC

ImproveMargins



Financial Discipline

• Utilizing an asset light strategy• “Sweating the assets” – to gain improved returns on

existing investments• Improving operating leverage is a priority• Focus on total shareholder return• Goal to increase the Return on Invested Capital

(ROIC)

Focus:•Managing our business with rigor

•Paying close attention to the balance of sales and profit growth

•Helping our people get an “A” –not marking their paper

• Being positive• Being realistic• Being responsive• Being responsible• Being accountable• Being candid • Living our values

More informationon the web at

www.wd40.com

Visit us atwd40.com

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