Acco Brands Corporation

Hello, everyone, and thank you for joining us today for the Akko Brands Q4 and 2025 Year-End Earnings Conference Call. My name is Sammy, and I'll be coordinating your call today. During the 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 on your telephone keypad to remove yourself from the question queue. I'll now hand over to your host, Chris McGuinness, Director of Investor Relations, to begin. Please go ahead, Chris.

Thank you. Good morning and welcome to the ACCO Brands conference call to review our fourth quarter and full year 2025 results. Speaking on the call today is Tom Tefford, President, Chief Executive Officer of ACCO Brands, and Jaganath Babji, Senior Vice President, Global Financial Planning and Analysis and Treasurer. Deb O'Connor, Executive Vice President and Chief Financial Officer, will not be joining today due to a personal matter, but is expected to return in a few weeks. Slides of the company this fall 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, restructuring costs, non-cash goodwill, 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 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 financial measures. Forward-looking statements made during the 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 forward-looking 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 Tedford.

Thank you, Chris. Good morning, everyone, and thank you for joining us today for Echobrand's fourth quarter and full year 2025 earnings call. This morning, we reported full year 2025 sales and adjusted EPS in line with our outlook. I'm pleased with how our team executed while navigating significant disruptions throughout 2025. Despite continued demand challenges globally and tariff-related disruptions in the U.S., Echobrand's maintained or grew its market position in most categories. demonstrating the resilience and strength of our brand portfolio. We continue to invest in higher growth categories as we reposition the company for improved revenue performance. We have refined the company's strategy to focus on the growing technology peripherals market. The acquisition of ePost represents a strategic move and broadens our technology peripherals portfolio, which now represents approximately 25% of the company's projected revenues. The EPOS line of premium audio solutions strengthens our enterprise computer accessories business with key third party certifications across unified communications platforms. The acquisition aligns well with our strategy of targeting value enhancing transactions and is complimentary to our Kensington business. Our teams have proven their ability to realize cost synergies from acquisitions. We expect to realize $15 million in annual cost synergies from this transaction. We are pleased with early integration efforts and are excited about adding this growth category to our portfolio. Our expected solid cash flow and improving leverage will allow for a more aggressive and organic growth approach. An accomplishment I am proud of in 2025 was our team's quick response to U.S. tariffs and trade disruptions. Our proactive China plus one strategy prevented significant disruptions to our business, we have a flexible supply chain that enables competitive costs value added products and provides category leading service levels to our customers. We continued the solid implementation of our multi year cost reduction program delivering $35 million of savings in 2025. bringing the cumulative total to over $60 million since its inception in early 2024 and are on track to deliver $100 million in savings by the end of 2026. In the fourth quarter, revenue trends improved sequentially in the Americas segment, led by impressive growth in our technology accessories categories. The PowerA brand performed well during the fourth quarter, with sales strengthened by our leading new product offerings supporting the Nintendo Switch 2.0 launch and holiday retail placements. Kensington also had a good quarter in the segment, driven by a strong pipeline and new product introductions. The international segment faced challenges from continued weakness in EMEA, which was partially offset by growth in Australia. Results were challenged in Europe due to difficult comparable sales comps to Q4 of 2024 and lower demand of traditional business essentials. Looking ahead to 2026, we expect the combination of the EPOS acquisition, improved demand in many categories, and favorable foreign exchange to drive revenue growth. And technology accessories we're excited about our pipeline of new products from kensington as we expand our breadth of offering to support enterprise level customers. Our is expected to benefit from the recent launch of Nintendo switch 2.0 and an increase in new gaming titles in the marketplace in 2026 especially grand theft auto six which is anticipated to be released late in the year. In learning and creative, our solid market share performance in North America during 2025 positions us well for the 2026 back-to-school season, with initial orders indicating an improvement year over year. Within Latin America, Brazil's 2025 results were lower than expected, resulting from adverse mix and market trade-down due to lower-priced products. We are working to reposition our product offering to Brazilian consumers reflecting the challenging consumer dynamics. Additionally, we are focused on managing the gross margin impact of the adverse product mix by addressing our cost structure. In our international segment, we expect the rate of decline to moderate in 2026, aided by execution on growth initiatives. We remain optimistic about the Bureau acquisition and are using acquired capabilities to expand into categories like ergonomic gaming chairs. In EMEA, we continue to focus on enhancing our ergonomic product offering, which is driving incremental sales and accretive gross margins. We remain focused on improving revenue performance while maintaining expense discipline. We will closely manage expenses in 2026 and expect to deliver the balance of savings against our $100 million cost reduction program. Overall, we are expecting a better year on the demand front in 2026, with EPS and cash flow also expected to improve. While external challenges persist, I'm confident in our strategy and our team's ability to execute. We're building a more focused, efficient, and growth-oriented company. Our transformation towards Technology peripherals, combined with our operational excellence and strong financial position, creates multiple pathways for value creation. The foundation we have been building positions us well for profitable growth in the years ahead. Before I hand the call over to JB, I want to thank our employees for their dedication and resilience throughout a challenging year. I am proud of our team and the work we are doing to transform our company. I will come back to answer your questions. JB.