Newell Brands Inc.

Good morning and welcome to Newell Brands' third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open up the call for questions. In order to stay within the time schedule for the call, please limit yourself to one question during the Q&A session. Today's conference call is being recorded. A live webcast of this call is available at ir.newellbrands.com. I will now turn the call over to Joanne Freiberger, VP of Investor Relations. Ms. Freiberger, you may begin.

Thank you. Good morning, everyone, and welcome to Newell Brand's third quarter earnings call. On the call with me today are Chris Peterson, our president and CEO, and Mark Erceg, our CFO. Before we begin, I'd like to inform you that during today's call, we will be making forward-looking statements which involve risks and uncertainties. Actual results and outcomes may differ materially, and we undertake no obligation to update forward-looking statements. I refer you to the cautionary language and risk factors available in our earnings release, our Form 10-K, Form 10-Q, and other SEC filings available on our Investor Relations website for a further discussion of the factors affecting forward-looking statements. Please also recognize that today's remarks will refer to certain non-GAAP financial measures, including those referred to as normalized measures. We believe these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non-GAAP measures are available and reconciliations between GAAP and non-GAAP measures can be found on today's earnings release and tables that were furnished to the SEC. Thank you, and now I'll turn the call over to Chris.

Thank you, Joanne. Good morning, everyone, and welcome to our third quarter earnings call. Before we begin, I want to welcome Joanne, who recently joined us as our new vice president of investor relations and will be Newell's primary investor contact going forward. With that, let's turn to the results. We had a strong third quarter and executed well against our new corporate strategy, which we rolled out in June of 2023. Results came in at the high end or ahead of plan across most of our key metrics. Core sales year-over-year performance continued to improve sequentially. Gross margin increased versus last year for the fifth consecutive quarter as outstanding productivity results more than offset inflation. Normalized operating margin came in well above plan once again, despite planned higher A&P investments. Normalized earnings per share was at the high end of plan, driven by strong operational performance. We reduced Newell's cash conversion cycle versus a year ago, and we significantly de-levered the balance sheet to under five times. The strong performance in the first nine months of 2024 gives us confidence to once again raise our outlook for the full year. We are increasing our full year expectations on normalized operating margin improvement, normalized earnings per share, and operating cash flow. Mark will share the specifics later in the call. Over a year ago, we announced our new corporate strategy, which focuses on disproportionately investing in innovation, brand building, and go-to-market excellence in our largest and most profitable brands and markets, while driving further standardization and scale efficiencies across the supply chain and back office functions. And just nine months ago, we transitioned into a new operating model, which is designed to accelerate the new strategy by enhancing organization effectiveness and agility while creating a high-performing, innovative, and inclusive culture. While we are still in relatively early days, we believe the new strategy and operating model changes are clearly beginning to yield results, as evidenced by improving top-line trends, margin expansion, and strong cash flow. Since introducing the new strategy, we have now reported five quarters of results, and we have improved the rate of core sales growth sequentially in each period. We also delivered year-to-date positive core sales growth in our most profitable segment, learning and development, as well as our combined international business. We have improved normalized gross margins for five quarters in a row versus prior year, and are up 500 basis points year-to-date versus year ago. We have improved year-to-date normalized operating margin by over 200 basis points versus last year, despite significantly increasing investment in A&P. We've reduced net debt by over $560 million in the past five quarters. Normalized EBITDA has increased by 22% on a trailing 12-month basis versus prior year, from $739 million to $903 million. We have taken a turn and a half out of Newell's leverage ratio, going from 6.5 times in June of 2023 down to 4.9 times this quarter. And we continue to make significant progress improving the company's front-end capabilities of consumer understanding, innovation, brand building, and go-to-market. From a segment perspective, Learning and Develop delivered a third consecutive quarter of positive core sales growth driven by the baby business, and Home and Commercial improved core sales growth by 200 basis points sequentially. The outdoor and recreation segment, which is the smallest segment in Newell's portfolio, improved core sales growth sequentially, moving to negative 16.8% year-over-year in the third quarter versus 18.2% year-over-year decline in the second quarter. While performance has been challenged and we believe it will take additional time before we fully unlock the potential of the iconic brands such as Coleman, we believe the business bottomed earlier in the year and it is encouraging to see our trends improve sequentially starting in the third quarter. Newell's focus on new product innovation continues. Last quarter, we shared several that we have recently launched or were soon to be launched. Touching on a few today, we will continue with brand investment and 360-degree support for these new MPP HPP product additions, including Graco SmartSense Soothing Bassinet and Swing, which detect and respond to babies' cries in seconds with soothing sound and motion. We have had strong performance at launch as these innovative products deliver enhanced benefits at a much better value than the leading competitor. Mr. Coffee Perfect Brew, its most advanced coffee maker yet to help home brewers create barista quality beverages at home. This new pod-free coffee maker uses intelligent technology to automatically adjust brew time, temperature, and water to unlock best-tasting coffee and tea flavors certified by experts. The Mr. Coffee Perfect Brew is one of the few at-home brewers certified by the Specialty Coffee Association and recognized by professional coffee tasters as the gold standard for at-home brewing. And this month, in time for peak season for the holidays, we introduced a new FoodSaver Handheld Plus machine, which is the first to market cordless handheld and countertop vacuum sealer-in-one with unmatched versatility. Combining the power of a countertop vacuum sealer with the convenience of a cordless handheld vacuum, this innovative sealer keeps food fresh up to five times longer compared to ordinary storage methods and helps prevent freezer burn. As the only vacuum sealing system on the market to include a detachable cordless handheld unit, users can easily vacuum seal, heat seal, and marinate all with one device. The investments we are making in key brands are on trend in creating positive results. A couple of recent programs include Contigo's debut of a new limited edition water bottle collection designed in partnership with renowned fitness expert Allie Love. This collaboration comes as the first of many as Contigo is adding Allie to its C-suite as the brand's first ever chief hydration officer. In this role, Allie will bring her love for fitness, fashion, and hydration to Contigo to create an unbeatable hydration experience. Over the next three years, Allie will serve as Contigo's head product stylist, collaborating closely with the brand to develop trendy, reliable water bottles that encourage healthy hydration habits. Some of you may have seen that Coleman launched a new campaign on Thursday Night Football on Amazon Prime, marking the first time Coleman has done a TV spot in more than 10 years. The early measurable results are encouraging with a strong double digit increase in sales in the days after the ad aired versus a year ago. The new campaign focuses on addressing the broader outdoor market instead of the traditional camping subsection, consistent with our strategy reset for the brand. We continue to make progress on new business development, expanding our brand's distribution across both new and existing retailers, which has been one of the drivers of the strengthened top line results in recent quarters. International continues to be a growth engine for the company, and we have positive core sales growth in the first nine months of 2024. Before turning the call over to Mark, I want to provide some perspective on recent consumer trends and behavior. We continue to see the broader general merchandise market is down low single digits this year, consistent with our expectations. This is an improvement to the high single digit decline last year. Importantly, within that, we are seeing a market bifurcation in consumer dynamics between low income versus higher income households. At lower income levels, there has been a significant decrease in unit volume compared with pre-pandemic market levels, as these households are prioritizing spending on basic needs like food, rent, and insurance due to the cumulative impact of inflation outpacing wage increases. Conversely, the higher-income households have increased spending significantly in both units and dollars as these consumers are benefiting from home price appreciation and stock market gains. With higher income consumers driving the market, we are seeing stronger demand for more premium price products that represent a good consumer value. Our strategy to focus on our largest brands with superior innovation targeting MPP and HPP price points positions us well to capitalize on this trend. Since implementing the new corporate strategy, we've taken bold and decisive actions that have improved the company's top line progression towards growth, significantly increased margins through productivity, delevered the balance sheet, and improved cash flow performance. Strong results have allowed us to increase our outlook twice in 2024. We deployed our new corporate strategy five quarters ago, and based on the results today, Newell's business transformation is well underway. While we still have much more work to do, we are confident in our ability to continue to strengthen the company's performance and create value for our shareholders over time. I would like to thank our talented employees for their continued commitment to operating with excellence and delighting our consumers by lighting up everyday moments. I'll now hand the call over to Mark.