Newell Brands at 2025 dbAccess Conference: Strategic Turnaround Insights

On Wednesday, 04 June 2025, Newell Brands (NYSE:NWL) presented at the 2025 dbAccess Global Consumer Conference, outlining its strategic turnaround and future growth plans. Led by CEO Chris Peterson and CFO Mark Ersig, the company detailed its focus on brand consolidation, supply chain efficiency, and international expansion. While emphasizing improvements in gross margins and operating cash flow, Newell also addressed challenges in market growth and tariff impacts.

Key Takeaways

• Newell Brands has reduced its brand portfolio from 80 to 55, focusing on top-performing brands.
• The company achieved a significant gross margin expansion of 610 basis points over seven quarters.
• Operating cash flow is expected to reach between $400 million and $500 million in 2025.
• Newell aims to reduce its leverage ratio to 4.5 times by the end of 2025, targeting an investment-grade debt rating.
• The company is leveraging tariff advantages and resuming strategic purchases from China.

Financial Results

• Gross Margin:

- Achieved a trailing twelve-month normalized gross margin of 34.4%, a 610 basis point increase.

• Cash Flow:

- Recorded a $750 million improvement in operating cash flow in 2024 compared to 2022.

- Reduced net debt by $175 million in 2024.

- Expects $400 million to $500 million in operating cash flow for 2025.

• EBITDA:

- Normalized EBITDA grew over 15% in 2024, reaching $900 million.

• Debt & Leverage:

- Completed two oversubscribed debt offerings.

- Aims for a year-end leverage ratio of approximately 4.5 times in 2025.

• Revenue:

- Core sales trends have improved sequentially since the strategy’s implementation.

- Learning and development and international segments posted five consecutive quarters of positive core sales growth.

Operational Updates

• Brand Portfolio:

- Streamlined from 80 to approximately 55 brands.

• Supply Chain:

- Achieved a global fill rate exceeding 95% in 2024 and 97% in Q1 2025.

- Reduced customer penalties and shortages in the US by 66% since 2022.

• Manufacturing:

- Invested over $2 billion in factory automation over seven years.

- Reduced dependence on China from 35% to less than 10%.

• Technology:

- Implemented 75 AI applications across the company.

• Workforce:

- Reduced total headcount by 14% since 2022.

Future Outlook

• Evergreen Targets:

- Reaffirms low single-digit core sales growth.

- Targets 50 basis points of operating margin improvement annually.

- Aims for free cash flow productivity around 90%.

• Tariff Advantages:

- Focus on shifting market share in 19 tariff-advantaged categories.

- Secured wins in four categories: Rubbermaid food storage, food saver, writing markers, and home fragrance.

• Market Growth:

- Expects market growth to be minus 1% to minus 2% for the year.

• Strategic Focus:

- Concentrates on high-return internal growth opportunities.

- Plans to maintain a dividend payout ratio of 30% to 35%.

• Productivity:

- Anticipates approximately 4% of COGS savings from productivity initiatives in 2025.

Q&A Highlights

• Market Conditions:

- Aims to grow faster than market growth by 1% to 2% annually.

• Tariff Impact:

- Resumed purchases from China, particularly in the baby business.

- Retailers are shifting away from China-based sourcing, favoring US manufacturing.

• Innovation:

- Launching new wet erase segment for Expo dry erase markers to drive market growth.

• Consumer Trends:

- Focused on MPP (Mid Price Point) and HPP (High Price Point) offerings to capitalize on trends among higher-income consumers.

Readers are encouraged to refer to the full transcript for more detailed insights into Newell Brands’ strategic initiatives and financial performance.

Full transcript - 2025 dbAccess Global Consumer Conference:

Christopher Barnes, Part of Deutsche Bank’s US consumer packaged goods research team, Deutsche Bank: Alright. Good morning, and welcome back to Deutsche Bank’s Global Consumer Conference. My name is Christopher Barnes, and I’m part of Deutsche Bank’s US consumer packaged goods research team. It’s my pleasure this morning to welcome back Newell Brands to our stage. President and chief executive officer, Chris Peterson and chief financial officer, Mark Ersig, will lead us through a presentation, after which we’ll dive into some quick q and a as time allows.

And without further delay, floor is yours, Chris.

Chris Peterson, President and Chief Executive Officer, Newell Brands: Alright. Thank you. It’s exciting to be back at the Deutsche Bank conference as always. Before we get started, we have put a forward looking statement in our presentation deck. It’s on our website for those that are interested.

I thought I would start with just a little bit of background overview of Newell. Newell is about a $7,600,000,000 company. We generate about $900,000,000 a year of trailing twelve month EBITDA. We have 25 brands that represent 90% of the company’s sales, 10 countries that represent 90% of our sales. About 62% of our business is in The US, Thirty Eight Percent is international.

You may not have heard of Newell Brands, but you’ve heard of our brands. Our top 10 brands include brands like Rubbermaid, Graco, Coleman, Sharpie, Papermate, Yankee Candle, and Oster to name a few. We have a diverse portfolio that’s organized into three segments, the home and commercial segment, the learning and development segment, and the outdoor and rec segment. And our business is pretty globalized, as I mentioned, with The US being the largest market at 62%, but 38% spread regionally relatively evenly around the world. Key messages for the presentation today.

In 02/2023, we conducted a capability assessment of capabilities that were required to win in consumer products. From that capability assessment, we deployed a new corporate strategy actually at this conference two years ago today with a clear set of where to play and how to win choices. That strategy was then fully implemented over the course of the last two years with a new operating model, critical talent upgrades, and a culture redesign. We believe that we now are in the position where we have the right capability success set to successfully compete and win with consumers and leading retailers, and we’ll talk through why we believe that’s the case. And we believe we have evidence now that the new strategy is working as our top line trends have improved since we put the new strategy in play in place.

We have dramatically improved our gross margins. We’ve improved gross margins seven quarters in a row. We’ve had strong operating cash flow, and we believe we’ve got significant runway for future value creation. So let’s start with the capability assessment. The time we did the capability assessment, these were the 11 capabilities that we thought were required to win in consumer products.

We subdivided these into, on average, about five subcapabilities each. We did a database analysis comparison of where Newell stacked up versus best in class consumer product companies. And from that, we put in place the strategy and a capability assess or capability improvement plan. That led to this strategy, which is a fairly simple strategy, but a complicated strategy to actually execute. We have five where to play choices focused on distorting investment to our largest and most profitable brands, expanding distribution in our fastest growing channels, and winning retailers.

From a geographic standpoint, we want The US as the top priority given at 62% of our revenue, but we wanted to grow internationally as one Newell. We’ll talk more about that. We wanted to disproportionately invest in mid and high price point segments within the categories in which we competed as opposed to opening price point segments and target millennial and Gen Z consumers disproportionately because they represent the the majority of the purchases in the categories in which we compete. From a how to win standpoint, it was very much around building capability in in the core areas that are required to win, Things like consumer understanding, superior innovation, brand building and brand communication, go to market retail expertise, supply chain, and importantly, becoming a high performance organization. The new operating model we installed had some significant changes that we put in place in 02/2024.

First and foremost, the company put in place a consumer first global brand management organization, which did not exist prior to the new strategy. We standardized the international operating model to move from going to market by business, by country, to a one new integrated operating model where we go to market as a company in each of the top 10 countries. We centralized US selling and created a new business development team. We took the supply chain finance and HR functions and fully centralized those where we thought we could drive scale and cost efficiency, and we continued what had been a very aggressive simplification agenda. We installed a new team.

On the leadership side, we reduced over 20% of the company’s management roles that are at the VP and above level. Of the remaining roles, we brought in 25 new people, into those roles to upgrade the talent in the leadership organization. The marketing side was probably the biggest change that we made. Not only did we institute brand management, but we then put in place an exceptional performance standard that we measured brand management against. And as a result of that, we wound up turning over and bringing in from the outside about 50% new marketing talent from academy oriented companies.

And then underpinning this, we put in place a high performing, high about accountability culture as the goal of what we were trying to establish. Relative to the new culture, we defined the culture that we were looking to transform the company to by three vectors. We wanted to be high performance. We wanted to be innovative, and we wanted to be inclusive. And those are the three things that we’re striving for.

As a result of that, we also changed the company’s values that we are ascribing to how we wanna do this focused on integrity, passion for winning, leadership, ownership, and teamwork. Previously, the company’s values had elements of integrity and teamwork but was really missing passion for winning, leadership, and ownership, which we felt are important values to get the company back on the right track. We also have simplified our brand portfolio. We started the journey. We had 80 brands across the company.

Today, we have about 55 brands. So we have disgorged about 25 brands. So the quality of the portfolio that we’re operating with today, we believe, is much stronger than what we were doing several years ago. If you look at how we disgorged the brands, there were several brands that we sold. There were a few that we licensed, and then there were a number where we just shut down the brand because they were small, insignificant, not making much money, and we thought that we could capture that volume either in other brands in the portfolio.

The way we determined which of these vectors to go after was really focused on net present value, what was the best net present value to to do that. If you look today then at the top 25 brands, I mentioned we operate in three segments. These are the top 25 brands by segment that we go after. And so you can see in learning and development, the writing and baby brands. In home and commercial, you can see the commercial, the home fragrance, and the kitchen brands.

And in outdoor and rec, you can see Coleman, Contigo, and and Camping Gas, which is a big brand here in in Europe. What’s important about this is that we believe that these brands all fit together well under the Newell umbrella for a couple of reasons. First, the same core competencies are required to win across all of these brands. So if you think about the capability assessment that we went through and the capabilities that we’re driving of consumer understanding, innovation, brand building, brand communication, all of those things are important for each of these brands. Second thing is the vast majority of these brands are sold in common retail channels around the world, so there’s significant synergy in going to market with them as one portfolio.

Part of what Newell was doing in the past was going to market without them in one bag or in one sales organization, but in a dispersed set of sales organizations. As we’ve now put the sales organizations together, we are seeing significant synergy by going to market with all of these in a common sales force. We also have integrated the supply chain and back office, and this is leading to significant cost synergy. As an example, a few years ago in The US, we were we were supplying The US market with about 20% of our volume moving in full truckloads. Today, about 80% of our volume moves in full truckloads.

So we have dramatically consolidated. We’ve moved to mixed distribution centers that can support all of the brands so we can deliver a single order with a single invoice to a single retailer and and carry each of the brands in that. We believe we now have the rate the right capability set to successfully compete and win with consumers and leading retailers. And I’ll just spend a minute on each of them and give you a snapshot of of where I think we are in this journey. So this was the capability set that we showed previously that we started with.

If I just spend a second on each of these, I’ll start with consumer and customer understanding. This is foundational work that all consumer product companies need. The company did not have a great consumer insights organization. We we built and hired a new internal consumer insights organization. That organization has now mapped 37 different consumer segments across 17 countries with 76,000 respondents.

The one I’m showing here is an example of a cooking segmentation. So if you think about how people cook, there are seven segments within that. The reason why this is important is if you are trying to put a brand strategy together, it’s important to know which of the consumer segments are you going after with your brand because each of these consumer segments are looking for something different. And so if you don’t understand what the segmentation is, it’s hard to come up with new product innovation and compelling brand building. This work is now complete and has been done across all of the top 25 brands across the company, which is foundational work required for good brand management.

In terms of brand building, we’ve installed a new Newell Brands brand academy with best in class training. We’ve made a significant investment in upskilling, as I mentioned, the marketing organization. We’ve now put a rigorous training course to really move the capability and improve the skill set of the marketing organization. That is enabling the global brand management operating model to operate in a much more effective way. We’ve also created a center of expertise in marketing that’s focused on data driven marketing and enhanced media capabilities that is driving higher ROI across the company’s marketing investment.

As an example, brand communication is an area that we’ve made meaningful progress focused on driving awareness, engagement, and conversion across different elements like public relations, paid media, brand owned marketing, shopper marketing, and influencer marketing. This is an example of the Rubbermaid EasyStore innovation that’s set to launch later this summer in the Rubbermaid food storage business. And and you’ll see as we’re going to market with the new innovation, we now have a holistic 360 degree marketing campaign across all of the relevant touch points to drive the brand communication in a more productive and effective and efficient manner. On innovation, we had major work to do to improve the company’s innovation capability. And I’ll just give you a few examples quickly of innovation that is launching this year that is dramatically better than what we’ve had previously.

So many of you heard us talk about last year in writing, we launched Sharpie creative markers. This year, we’re launching round sort of the extension of that with new earth tone colors and a new fine tip tip size. Since we launched Creative Markers, we went from zero percent market share in paint markers to 35% market share in paint markers. So it’s been a strong innovation based on superior product, and we are extending it with additional innovation coming this year. This is a good example.

This is one of my favorite. The Sharpie brand back in 2020 was a permanent marker brand. We decided to enter gel pens. On the left, what you can see, when we first entered gel pens, we came with a terrific product that was MSRP of about $10 for an eight pack, a dollar 25 per pen. We then, in ’21, extended with metal barrel pens, which allowed us to move the price point per pen from a dollar 25 to $2 and 50 or or double the price per pen.

And then last year, we launched the Sharpie s gel copper pen at $10 per pen. And so we are driving category growth through innovation that is delighting consumers, and this is a good example of how we’re doing that. We are launching as we speak on Expo. Expo is our our dry erase brand, which has about 80% market share, a upgrade to the ink on that’s used on expo to make it much more vibrant colors so that people can see across the room when you’re when you’re writing on a whiteboard. In addition to this, we’re also launching a wet erase segment, which is a new to the world segment that is permanent until you don’t want it to be.

So one of the challenges with dry erase is you rub up against the whiteboard and it rubs off. With with wet erase, you can write it, and it won’t rub off unless you put water on it. And so we believe that’s that’s gonna open up a whole new set of usage occasions and drive growth on the Expo brand. On baby care, we’ve talked about the SmartSense, which we’ve launched toward the end of last year, and we will be activating aggressively this year, both a soothing swing and bassinet that respond to babies’ cries. This is off to a terrific start, and we believe we’ve got significant opportunity for growth behind these products.

We also are launching or have just launched a 360 degree turning car seat under the Graco brand. That’s a two in one convertible car seat that we believe is going to be a game changer for the industry in in The US, and we’re off to a strong start on that product as well. On kitchen, we’ve just launched a extreme mixed blender. This is our first foray into, in The US, at least, into performance blenders. The Oster blender business is a very strong business in Latin America, which is the primary market, but The US has been more of a white space for us.

We’re off to a good start. This blender is competitive with the best performance blenders in The US market. In fact, as we were traveling over here, Food and Wine magazine just came out in The US and named the extreme mix blender the best best blender available in The United States. So outperforming Vitamix, Shark Ninja’s product, and and others. So we’re excited to get in the game in The US.

I will also mention on the blender business, our blenders are self manufactured in Mexico in a facility that’s USMCA compliant. So we also are not subject to tariffs, which is a unique advantage that we have in this category versus the vast majority of our competitive set, which is made in Asia. On Rubbermaid Commercial, we’ve done work to launch a set of farm products under the Brut brand name that we’re pretty excited about. So the team has gone and looked at farms, and we’ve determined that we’ve got a big opportunity to disrupt this category with Brute products that are indestructible by large animals. And so we’re launching a whole lineup.

The one pictured here is a is a water or feed bowl that that will replace what historically has been a metal product that’ll last about thirty days. This product will last ten years. And so we think it’s a game changing product for the farm art community. Fragrance. This is our largest innovation of the year.

This product is set to launch in about thirty days in The US. We’re doing a complete restage of the Yankee Candle brand with significantly improved soy wax formulation for a cleaner burn, a significantly improved fragrance formulation and significantly improved graphics and packaging behind a new advertising campaign. In addition to that, we’re gonna be off launching a new premium candle offering to get the in in the game at more premium levels. We’re pretty excited about this. The response from the consumer testing we’ve done has been terrific, and more to come as we get into the back half of the year.

On Coleman, we’ve launched a set of Coleman coolers called Coleman Pro that launched earlier this year, which are injection molded coolers, which are much higher end coolers. So these coolers compete with much higher performance oriented coolers, and they represent a superior value to those coolers. We’re off to a strong start in this brand, but this is this is an example a good example of how we’re trying to bring the Coleman brand out of the opening price point in The US up into more of a lifestyle aspirational type of brand. Innovation has been a multiyear journey. When we were here two years ago at this conference, we said that we needed a complete reset of the innovation process, people, objectives, everything.

And so we really did a sort of a full stop of what the company had previously been doing, which was launching a a lot of SKUs that were not really driving any type of financial result that were not consumer oriented. We’ve been working over the last two years to build a healthy pipeline of products, and we believe we’ve made significant progress on that. And our innovation launches this year will be the strongest that the company has had from a financial standpoint in in eight years since the Jarden acquisition. And we’ve got a great pipeline coming for the following year. So we believe that we are now finally at the point where we have good innovation that’s investable, which is required to get the company fully back to core sales growth.

From a go to market and retail execution standpoint, this is an example of a major US mass retailer that we’re working with to do a an aisle reinvention. And so on the left, you see what their what their shelf looked like previously. The right is what it looks like in the test. The test results came back. We grew the category with the aisle reinvention by 470 basis points for this retailer.

Importantly, Newell grew by almost 1,200 basis points, so our market share went up because we have the leading brands. And that retailer, which expanded the test in October 24, has now committed to roll across their entire line, which will reset in October of twenty five. So this is an example of how we’re trying to play the category leadership role where we have category leadership positions, which we had not been doing previously. On the international side, I mentioned Oster in Latin America. This is an example of a hundred year anniversary program across multiple touch points that we ran from a commercial innovation standpoint and a good example of what we’re trying to do from a go to market standpoint.

From a supply chain and procurement standpoint, we believe we have a competitively advantaged global trade expertise center. And I I would probably wouldn’t have put this slide in if if maybe three months ago. But with the political landscape that we’re operating in now, I feel very good about having this. So we have a dedicated team of people that has over five hundred years of experience. We operate four free trade zones in The US, which is unique.

We don’t believe many of our competitors operate any. We have real time data on all of the goods movement. We’ve shown a picture here. I could pull it up on my computer and show you where any of our containers in the world are at any moment on any ship, and we can quickly maneuver based on trade and tariff policy to maximize profitability and flow of goods. From a supply chain standpoint, we’ve done a lot of work investing in the company’s supply chain chain.

We have 42 manufacturing plants around the world. We’ve invested over $2,000,000,000 in capital over the last seven years to automate these factories. And so if you look at the factories today, we are operating with highly efficient, highly automated factories. We’ve improved the company’s global fill rate to over 95%, which is the highest in the history of the company. And we’ve reduced our dependence on China from what was 35% several years ago to less than 10%.

We have 19 tariff advantage categories that are produced either in The US for The US or in Mexico for The US. This gives you a sense of where they are. Eight of Newell’s top 10 brands are manufactured in North America, so we believe we are advantaged from a tariff standpoint in more categories than we are disadvantaged. And then lastly, from an artificial intelligence standpoint, this is one of the areas we got started on as well from a capability assessments or from a capability standpoint two years ago. We started by put standing up a governance team and going aggressively after artificial intelligence use cases or applications.

Today, we’ve got about 75 apps live across the company that we are using every day across marketing, across supply chain, and across our consumer service, customer service, and back office functions. Where we’re moving to is AgenTic AI, which we believe is the next frontier. We’ve got a few agents started, but we believe there’s more to go there to drive capability improvement. In closing, we believe over the past two years, we’ve really fundamentally transformed the company. We started with the capability assessment and the new corporate strategy.

We put in place the new team, the new culture, the new operating model, simplified the brand portfolio. Today, we believe we have the capabilities in place to really accelerate performance. Mark will talk a few minutes more about that. Thanks, Chris.

Mark Ersig, Chief Financial Officer, Newell Brands: So Chris just discussed how the capabilities we have built and the interventions we have made in support of our new corporate strategy have put Newell Brands in a position for the first time in a long time to successfully compete and win with consumers and leading retailers. What we’d like to do now is highlight the significant progress we have made in operationalizing and monetizing our new corporate strategy as evidenced by improving top line trends, dramatic margin expansion, and strong operating cash flow. Newell’s new strategy and capability set provides us with sick significant runway for value creation, which is why over the past two years, we’ve been maniacally focused on top line acceleration, margin expansion, and driving strong cash flow. So let’s go a bit deeper into each of these areas starting with top line acceleration. As you can see on slide 39, total company core sale trends have improved sequentially and meaningfully during each subsequent six month period since the adoption and implementation of our new corporate strategy.

And while we have admittedly not yet seen total company core sale trends turn positive, it is important to point out that both the learning and development segment, which is our most profitable segment, and our international business, which represents nearly 40% of Newell’s total sales, each posted positive core sales growth for five consecutive quarters. Looking forward, brand category exits are now largely in the past. Our front end capabilities and our inventions program in particular are getting stronger every day, and we have numerous tariff advantage categories where we are aggressively pursuing incremental sales opportunities. Turning to margin expansion on slide 40, you can see we have dramatically improved the underlying structural economics of our business. In fact, trailing twelve month normalized gross margin has expanded meaningfully in each of the seven full quarters since the implementation of Newell’s new corporate strategy and now stands at 34.4%, which is 610 basis points higher than it was just seven quarters ago.

We’ve achieved this level of gross margin expansion without the benefit of any unit volume leverage or fixed cost absorption, which suggests at least to us that when the top line turns positive, there’s potential for even larger gross margin expansion gains. Because Newell’s gross margin expansion has been so dramatic, let’s spend a little more time talking about what has made that possible. The first significant source of normalized gross margin improvement comes from a reimagined, unified, and optimized global plant network, where meaningful investments in automation and shop floor digitization are transforming Newell supply chain into a sustainable source of competitive advantage. From a cultural standpoint, we have a strong frontline engagement program focused on continuous improvement, which we refer to as PEEK, which is a mountain climbing metaphor which connotes a never ending climb to the summit of continual improvement. Within peak, there are six levels of attainment, and each level generally takes twelve to twenty four months depending on the phase, size, and complexity of the site to complete.

Phase one is referred to as foundations. Phase two is base camp. Phases three through five are designated as climb one, two, or three. Finally, phase six is the summit where continual improvement has become the cultural norm and as such is fully embedded everything we do. Now with respect to our 42 plants, 15 of our smaller plants have not started their journey.

Seven are in phase one and ten plants are in both phases two and three. This means we don’t have any plants that have reached phases four through six yet, so we have tremendous upside potential remaining. That is why, in consistent with last year, we continue to expect one to one and a half points of COGS savings per year from plant network optimization going forward. We also expect procurement as depicted on slide 42 to remain a major source of gross margin improvement and strategic advantage for Newell Brands. In 2024, Newell reduced its supplier base by approximately 14%, which brings the total cumulative reduction to about 45% since 2020.

And this year, 2025, we expect another 10% reduction as part of our never ending continuous improvement mindset. Reducing the number of suppliers is all about aggregating our global purchase pools in order to lower costs, improve supplier payment terms, and reduce working capital requirements with a smaller but more capable set of strategic suppliers, which we can leverage to supplement internal r and d ideation with supplier led innovation as we proactively shift our portfolio towards MPP and HPP segments. We continue to expect procurement related savings to amount to two to three percentage points of COGS per year. The third area we’d like to discuss in more detail on slide 43 is distribution and transportation. Since implementing the second go live wave of project Ovid in 2023, we have further optimized the one new system in The US, and frankly, the results have exceeded our expectations.

For example, our global fill rate in 2024 exceeded 95%, which was the highest level Newell has ever achieved since the Jarden acquisition. And during q one of this year, our global fill rate was 97%. Consistent with this, we have reduced customer penalties and shortages in The US by 66% versus 2022. On the international front, we’ve reduced the number of distributors across Latin America, Europe, and emerging Asian markets by more than 40% since 2022 with additional, albeit smaller levels of reduction expected in the future. With a long list of additional continuous improvement efforts already identified, we remain confident that we can generate up to one half of 1% of COG savings each year from our distribution and transportation systems.

The three areas we just covered, Newell’s plant network, procurement team, and distribution and transportation systems, are all governed by an ongoing company wide productivity initiative called FUEL, which stands for finding untapped efficiencies and leverage. In the early days following the Jarden acquisition, Newell Brands’ overall level of fuel productivity savings was relatively low. Then starting with 2019 and moving through 2022, we captured annual COGS savings in the 3% range as our capabilities improved, which based on our benchmarking work put Newell Brands on par with what best in class companies typically achieve. More recently, we have dramatically outperformed what would be considered best in class productivity attainment, having saved on average approximately 6% of COGS during 2023 and 2024. In 2025, we expect our level of attainment to be about 4%, and looking forward, we see a very long margin expansion runway in front of us.

Overheads are also an area where we have focused on reducing costs as much as possible. As you can see on slide 45, we’ve reduced total headcount by 14% and office expenses by 25% since 2022. We’ve also continued to make progress on simplifying our ERP systems. Our goal remains to have 97% of our total company sales on one unified system by the end of twenty twenty six. During 2024, we reduced our legal entities down to 227, which is a remarkable achievement considering that number was more than 500 just a few years ago.

In addition, from 2018 through 02/2024, we’ve reduced office space by just over 1,000,000 square feet, and we are on pace to finish fiscal twenty twenty six with less than 70 corporate office locations versus a 22 in 02/2018. For 2025, we expect to deliver about $60,000,000 in overhead savings while simultaneously building essential capabilities. Now when we combine all the individual top line and margin expansion building blocks Chris and I just shared, we believe there’s additional upside because of the symbiotic relationship that exists between some of the elements. For example, innovation drives sales, but it’s also gross margin accretive, particularly if the innovation is targeted towards MPP or HPP offerings. Pricing and revenue growth management, when done correctly, can grow the top line and have a dramatic positive impact on Newell’s structural economics.

New business development expands the top line, drives fixed cost leverage throughout the entire supply chain, and helps defray corporate and segment overhead expenses. And our international business has gross margins that are higher than the company average, so international growth is also gross margin accretive. This cumulative effect can be seen on slide 46, which shows the significant expansion in normalized gross margin for each of the seven full quarters since our new strategy was put in place. It also shows that on a two year stacked basis, the normalized gross margin expansion has been even more impressive at 590, eight hundred, and 540 basis points for q three twenty four, q 04/24, and q one twenty five, respectively. A strict adherence to Newell’s new strategy is also strengthening our balance sheet and improving cash flow.

On slide 47, you can see we’ve driven a $750,000,000 improvement in operating cash flow and a thirty plus day improvement in our cash conversion cycle in 2024 versus 2022 and paid down approximately 500 and a hundred and $75,000,000 of net debt in 2023 and 2024 respectively. From a debt maturity standpoint, we have conducted two highly oversubscribed debt offerings, one last fall and one just a few weeks ago, which gives us a clear runway out to September of twenty twenty seven when we have a $500,000,000 of debt maturing, which based on our internal modeling, we currently plan to pay off with cash on hand and available credit facilities. We expect 2025 to be another strong cash flow year with operating cash flow expected in the range of 400 to $500,000,000. Turning to slide 48. In 2024, we reported normalized EBITDA growth of over 15%, bringing trailing twelve month normalized EBITDA up to $900,000,000.

Strong growth in normalized EBITDA and an eight day improvement in our cash conversion cycle drove a meaningful reduction in our leverage ratio, allowing us to end fiscal twenty twenty four at 4.9 times. We expect to finish this year, fiscal twenty twenty five, with a year end leverage ratio about four and a half times, which should move us closer to our longer term ambition of being an investment grade debt issuer at some point in the future. Two years ago, when we unveiled Newell’s new strategy at this very conference, we shared slide 49, which laid out our annual evergreen financial targets, low single digit core sales growth, 50 basis points of operating margin improvement, and free cash flow productivity of about 90%. Over the past two years, we’ve dramatically improved our core sale trends and drove both operating margin and free cash flow productivity at rates well in excess of these targets. Nonetheless, we continue to believe that these financial targets are appropriate, so we are not considering any changes at this time.

Our capital allocation strategy has also served us well, so we will continue funding high return internal growth opportunities, deleveraging the balance sheet to achieve investment grade status, and strive to maintain a dividend payout ratio in the 30 to 35% range. So with that, we’d like to stop where we started. In 2023, we initiated a capability based multiyear turnaround strategy. And over the course of the past two years, we’ve been putting new operating models in place, strengthening the management team through a series of critical talent upgrades, and redesigning Newell’s culture to be high performance, inclusive, and innovative. As we stand here today in 2025, we now believe we have the right set of capabilities to successfully compete and win with consumers and leading retailers.

And most importantly, there’s clear evidence in the form of multiple proof points that Newell’s strategy is working. And we believe we still have significant runway ahead of ourselves for future value creation. Thank you for your time and your interest in Newell Brands, and I believe we have time for just maybe a few questions.

Christopher Barnes, Part of Deutsche Bank’s US consumer packaged goods research team, Deutsche Bank: Well, I guess, I’ll I’ll start where, I guess, we just left off. So, like, over the past couple of years, Duo’s undergone, like, many restructuring optimization initiatives and overhauled your commercial strategy and revamped the go to market model, simplified the organization and supply chain. I guess just relative to your evergreen targets, how much, like, how much of, like, returning to that evergreen growth is a function of just some level of normalized and stable underlying market conditions versus strategic and tactical decisions that are directly within your control?

Chris Peterson, President and Chief Executive Officer, Newell Brands: Yeah. There’s a there’s a there we are certainly subject to macro conditions and market growth conditions. But what we’re trying to do is develop a plan and a set of capabilities that allow us to grow faster than market growth by a point or two consistently every year. And we think if we can grow faster than the market by a point or two every year, that’s how we get back with a normalized market to the long term algorithm from a top line standpoint. The other thing I would say is that some of market growth in some of our categories is in our control.

So if you look, for example, at the Expo dry erase marker that I mentioned where we have an 80% market share, what’s important for us on that business is not do we go from 80% market share to 81. What’s important for us on that business is can we get the category growing faster? That’s why we’re launching the wet erase segment, which is a completely new segment that opens up new use cases that we believe will drive market growth.

Mark Ersig, Chief Financial Officer, Newell Brands: This is an important point, so I wanna just expand on it just a little bit. The other thing that we have found is while we may have categories that are down a couple points, within those categories, there’s typically a bifurcation between what’s happening with higher income consumers and lower income consumers. And so as we migrate our strategy to be more MPP and HPP, we believe that we can grow within categories that, generally speaking, may be in decline in total dollars, but there’s certainly pockets within it where innovation will still drive net sales, you know, in a favorable manner.

Christopher Barnes, Part of Deutsche Bank’s US consumer packaged goods research team, Deutsche Bank: Got it. That’s that’s very helpful. And then I guess maybe just thinking about the near term, I mean, we’ve heard a lot about a challenged consumer environment at this conference so far. Are you able to comment on how consumption trends have performed, I guess, since you last reported last month? Is there is it generally in line behind better than your down two to down 1% market assumption?

Chris Peterson, President and Chief Executive Officer, Newell Brands: Yeah. So at the on our last quarter earnings call, we updated our outlook for the year to say we were expecting market growth to be minus one to minus 2% this year. And nothing as we sit here today changes that outlook from the consumption patterns that we’ve that we’ve seen. So we as we sit here today, I think we’re still very much on track with what we said at the last at the last quarterly call. Got it.

Christopher Barnes, Part of Deutsche Bank’s US consumer packaged goods research team, Deutsche Bank: And then just related to the tariff environment, I like, today and even at your at your last earnings call, you you mentioned a lot of opportunities for market share to and distribution to shift to your brands and your portfolio just given your advantage supply chain. Like, as we’ve seen a moderation in the rate of tariffs on China, like, have you seen any, like, shifts in those, like, expected plans, expected wins? And, relatedly, with your own business, have you resumed purchases from China? Or just I’d love to hear any updated perspective there. So so number one, we’ve resumed purchases from China, particularly on the baby business, which is our most

Chris Peterson, President and Chief Executive Officer, Newell Brands: tariff exposed business. That that whole baby gear industry is is tariff exposed in China. On the on the flip side, on our advantaged categories, we are gaining strong traction on that. When we announced our earnings call, we said of the 19 categories where we were tariff advantaged, there were two of them that we had already secured wins. Since that time, we’ve secured wins on two more.

So we now have four of them, which includes Rubbermaid food storage, the food saver, fresh preserving, the the writing markers business, and home fragrance where we have US manufacturing capability. And what we’re hearing is that retailers are shifting from China and Asia based sourcing and wanting to move derisk their supply chain to favor US manufacturing, which we think is a good idea, and we’re taking advantage of that aggressively with our sales pitch with retailers as we speak. And we think we’ve got more to come. We’re in process on the other 15 categories that we’re aggressively pitching.

Christopher Barnes, Part of Deutsche Bank’s US consumer packaged goods research team, Deutsche Bank: Perfect. And we’ll leave it there. Thank you guys very much. Thank you.

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