The Scotts Miracle-Gro (SMG) The 44th Annual William Blair Growth Stock Conference summary

Market Position, Brand Strength, and Innovation

• Holds leading market shares in lawn, garden, and hydroponics with iconic brands like Miracle-Gro, Ortho, and Roundup, supported by scale, innovation, and retailer partnerships.

• Expanded portfolio includes live goods, plant foods, new controls, and organic product lines, with increased marketing investment by 33% in peak season 2024.

• Four R&D centers and high-return innovation investments drive category expansion and product launches.

• Omnichannel presence and strong supply chain enable 95% on-time, in-full order fulfillment.

• Committed to sustainability, associate development, and community engagement as part of GroMoreGood purpose.

Strategic Initiatives and Partnerships

• Launched new organic lines, innovative campaigns with Martha Stewart, and Healthy Plus Lawn Food with dual benefits.

• Deepening omnichannel and retailer relationships, including Amazon and major home centers, with 2,000+ seasonal associates for in-store presence.

• Hawthorne Collective continues strategic cannabis investments, including a new stake in RIV Capital and Cansortium.

• Retail partnerships and in-store associates drive category growth and consumer engagement.

• Focused on disciplined capital allocation and declining leverage.

Financial Performance and Outlook

• FY24 objectives include improving adjusted gross margin by at least 250 bps, generating $560M free cash flow, and advancing the Hawthorne strategy.

• Updated FY24 guidance projects mid single-digit US Consumer net sales growth and total company adjusted EBITDA of $530M–$540M, a ~20% increase over FY23.

• Inventory drawdown and a new AR Facility are expected to drive record free cash flow and enable over $350M in debt reduction by year-end.

• Further margin expansion is anticipated in FY25, leveraging cost savings and favorable product mix.

• Focused on returning to pre-pandemic EBITDA levels and maintaining dividends.