Masco (MAS) Jefferies Global Industrial Conference 2024 summary

Business overview and segment performance

• Focuses on repair and remodeling (R&R) with 90% of sales in this segment and 10% in new construction.

• Operates two main segments: Plumbing (Delta, Hansgrohe, Watkins Wellness) and Decorative Architectural Products (Behr, hardware, lighting).

• Plumbing segment generated just under $5B in 2023 with 18% margins, guided to 19% in 2024.

• Decorative Architectural Products delivered over $3B in 2023 with 17.8% margins, guided to 18% in 2024.

• Announced sale of Kichler Lighting business to focus on core platforms.

Strategic portfolio management and capital allocation

• Portfolio streamlined to focus on higher-quality, consumer-facing products by exiting cabinets, windows, and doors.

• Kichler Lighting divestiture aims to sharpen focus on plumbing, coatings, and wellness; expected to be modestly accretive to margins.

• Capital allocation prioritizes reinvestment (2–2.5% of sales), maintaining investment-grade credit, dividends (30% payout, 11 years of increases), and share buybacks (targeting $600M in 2024, pre-Kichler proceeds).

Growth opportunities and innovation

• Organic growth driven by new product development, targeting 25% of revenue from products launched in the last three years.

• Recent launches include a reverse osmosis water filtration system under Delta.

• Inorganic growth focuses on bolt-on acquisitions aligned with core platforms; recent examples include Steamist (steam showers) and Sauna360 (saunas).