Acco Brands Corporation

a presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I will now hand over to your host, Chris McGinnis, Senior Director of Investor Relations to begin. Please go ahead.

Good morning, and welcome to the ACCO Brands fourth quarter and full year 2024 conference call. This is Chris McGinnis, Senior Director of Investor Relations. Speaking on the call today is Tom Thetford, President and Chief Executive Officer of Akko Brands Corporation. Tom will provide an overview of our fourth quarter and full year results and outline our 2025 priorities. Also speaking today is Deb O'Connor, Executive Vice President and Chief Financial Officer, who will provide greater detail on our fourth quarter and full year results and provide our initial outlook for full year 2025 and the first quarter. We will then open the line for questions. Slides that accompany this call have been posted to the investor relations section of accobrands.com. When speaking about our results, we may refer to adjusted results. Adjusted results exclude amortization and restructuring costs, non-cash goodwill and intangible asset impairment charges, and other non-recurring items and unusual tax items, and include adjustments to reflect the estimated annual tax rate on quarterly earnings. Schedules of adjusted results and other non-GAAP financial measures and a reconciliation of these measures to the most directly comparable GAAP measures are in the earnings release and slides that accompany this call. Due to the inherent difficulty in forecasting and quantifying certain amounts, we do not reconcile our forward-looking non-GAAP measures. Forward-looking statements made during this call are based on the beliefs and assumptions of management based on information available to us at the time the statements are made. Our forward-looking statements are subject to risks and uncertainties, and our actual results could differ materially. Please refer to our earnings release and SEC filings for an explanation of certain risk factors and assumptions. Our forelooking statements are made as of today, and we assume no obligation to update them going forward. Now, I will turn the call over to Tom Thetford.

Thank you, Chris. Good morning, everyone, and welcome to ACCO Brands' year-end 2024 earnings call. Last night, we reported full-year sales and adjusted EPS in line with our outlook, excluding greater-than-expected foreign currency headwinds. We delivered free cash flow of $132 million for the year in line with our outlook. While the operating environment remains challenging, I am proud of our team's successful execution of our strategic initiatives to reset our cost structure and position ACCO Brands for better revenue outcomes in the future. Free cash flow was a bright spot in 2024, aided by both our cost actions and improved working capital management as we reduced inventory levels by 17% for the year and collected a significant amount of receivables in Brazil. given the timing of their sales. Our consistent cash flow and commitment to debt reduction has improved our financial position, with net debt down $94 million for the year. The improvement in our balance sheet allowed us to expand our capital allocation program to include share repurchases while continuing to support our quarterly dividend and debt repayment. We are well positioned to consider accretive M&A opportunities as well. In addition, during the year, we refinanced our bank credit facilities, extending maturity dates going out to 2029. Let me transition to a brief recap of the year, highlighting the progress we made against my first year objectives and our updated strategy. At the beginning of 2024, we implemented decisive actions to reset and optimize our cost structure through the introduction of a $60 million multi-year cost reduction program. This program has simplified the organization, delayed our management structure, and rationalized our global footprint through a reduction of our manufacturing facilities. During the year, we realized approximately $25 million in savings from the program. Our proactive approach to cost management allowed us to deliver improved operating margins as gross margins expanded 70 basis points versus the prior year and SG&A costs were almost $30 million lower than a year ago. We anticipate continued headwinds and uncertainties in 2025 and have expanded the scope of our cost savings program. We are now targeting $100 million in total savings by the end of 2026, increasing our current program target by $40 million. Decisions of this nature are inherently challenging, yet essential to enable us to address external challenges, protect our profitability, and ensure we have an operating model that will scale with volumes. As we improve our revenue outcomes, both organic and inorganic, we will be able to leverage this optimized cost structure for profit expansion. Our priorities have not exclusively focused on cost savings. Our work includes restoring sales growth through new product development, accretive acquisitions, price and promotional excellence, brand building, and other initiatives. However, revenue initiatives take longer to implement and realize the benefits. Our teams are focused on understanding consumer insights and finding innovative product solutions to solve unmet needs. We are partnering with our customers to unlock value for them with our leading brands and we are aggressively defending leading category positions in our key markets. We have positioned key business leaders closer to customers, leading to strengthen customer relationships, which has opened additional growth opportunities. We have refocused our efforts related to innovation and new product development, and have laid a solid foundation to improve our rate of new and refreshed product introductions. We have several exciting new and refreshed product launches across our portfolio of categories, including celebrating the 100th year of Swingline staplers, a new high-speed inline commercial lamination solution, and we are expanding our line of more sustainable computer products. In 2024, we successfully entered adjacent categories, such as ergonomics, and we will continue to build on this progress. We are committed to investments in our leading brands. Our category shares remain strong in 2024, with many of our brands either maintaining or growing share. Our brands resonate with both consumers and our channel partners. These investments provide the fuel to maintain our leadership position while also driving additional share gain opportunities. We are identifying more opportunities across the portfolio and have other introductions planned, like a Beyond Console initiative within our gaming accessories business. We also shared with you the early success of broadening distribution across channels and categories. In 2024, we tested various products and new channels and are expanding on our initial success. Our near-term 2025 outlook assumes the demand environment remains highly volatile due to uncertainties around global economies, potential additional tariffs, soft consumer demand, and a strong U.S. dollar. The magnitude of impact from these factors on our business remains unpredictable. We anticipate 2025 sales to be down in the low to mid single digits, but improving throughout the year on a year-over-year basis. I also want to address how we are handling the recent enacted tariffs that will impact certain products imported from China. Over the last number of years, we have taken a proactive approach to lessen our dependence on Chinese imports. We are in discussions with our customers and suppliers as we enact our plans to counter the potential impact from the latest round of US tariffs. With the improvement in the balance sheet and our ability to consistently generate strong cash flow, we are actively exploring acquisition-based growth opportunities. We have a long history of successfully integrating acquisitions and will be prudent with our approach to M&A. We will evaluate highly synergistic and accretive opportunities which will leverage our lower cost structure and provide scale and strengthen our company. In closing, we have aggressively managed our cost structure so that our organic and inorganic growth initiatives will enhance our profitability and cash flow. I remain excited about the opportunities ahead of us at Akko Brands. Our experienced leadership team has shown its ability to navigate dynamic operating environments while also implementing meaningful change. Our strong balance sheet with no debt maturities until 2029 and low fixed interest rates on more than half of our debt put us in sound financial position as we invest in growth and improve productivity for a brighter future for ACCO Brands. I will now hand it over to Deb, and we'll come back to answer your questions. Deb?