Edgewell Personal Care Company

Good day and welcome to Edgewell's fourth quarter and fiscal year 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Chris Goff, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us this morning for Edgewell's fourth quarter and fiscal year 2024 earnings call. With me this morning are Rod Little, our President and Chief Executive Officer, and Dan Sullivan, our Chief Operating and Financial Officer. Rod will kick off the call, then hand it over to Dan to discuss our 2024 results and full year fiscal 2025 outlook before we transition to Q&A. This call is being recorded and will be available for replay via our website, www.edgewell.com. During the call, we may make statements about our expectations for future plans and performance. This might include future sales, earnings, advertising and promotional spending, product launches, savings and costs related to restructuring and repositioning actions, acquisitions and integrations, changes to our working capital metrics, currency fluctuations, commodity costs, category value, future plans for return of capital to shareholders, and more. Any such statements are forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. which reflect our current views with respect to future events, plans, or prospects. These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the caption risk factors in our annual report on Form 10-K for the year ended September 30th, 2023, as may be amended in our quarterly reports on Form 10-Q, which is on file with the SEC. These risks may cause our actual results to be materially different from those expressed or implied by our forward-looking statements. We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances except as required by law. During this call, we will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued earlier today, which is available at the investor relations section of our website. This non-GAAP information is provided as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. However, management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business. With that, I'd like to turn the call over to Rob.

Thank you, Chris. Good morning, everyone, and thanks for joining us on our fourth quarter and fiscal 2024 year-end earnings call. Our results in fiscal 2024 further demonstrate the progress we are making in transforming our business and the effectiveness of the strategy and business model we launched four years ago. For fiscal 2024, we achieved slight organic net sales growth, meaningfully expanded adjusted gross margins, and delivered double-digit adjusted earnings per share growth at constant currency for the second consecutive year. In the face of a heightened competitive landscape and an increasingly cautious consumer, we accelerated organic growth across our international businesses, introduced category-leading innovation in the U.S. sun care category, and deepened our participation globally across the men's and women's grooming segments. As inflation normalized, we saw meaningful flow through from our productivity and pricing initiatives, both key pillars of our business model in which collectively drove gross margin accretion and strong bottom line results. We delivered healthy earnings growth and our substantial cash flow generation supported our efforts to both de-lever and buy back shares. In 2024, we delivered our fourth consecutive year of organic net sales growth, although the growth was less than recent years and slightly below our expectations. Importantly, our top line results were underpinned by compelling performance in three distinct areas of the business. First, our international markets, which grew over 7% and now make up about 40% of our total revenue. Second, our right to win portfolio in North America grew over 3% with our leading sun care and grooming portfolios both growing mid-single digits. And third, the Billy brand continued to win in women's shave, gaining 260 basis points of share while beginning its journey towards becoming what we believe will be the preeminent women's lifestyle brand as it entered select women's grooming categories with Walmart. Together, these businesses representing nearly 70% of total company sales grew mid-single digits for the year, which we believe represents a clear path for durable growth moving forward. So, while work remains across select areas of our U.S. shave and PEMCARE portfolios, the majority of our business is healthy, growing, and performing well in market. While the top-line growth profile for the year was below our expectations, gross margin accretion outperformed And the strength of our operating model was clear as we delivered 18% adjusted earnings per share growth. As part of our transformation, we've been relentless on productivity efforts, disciplined on cost and cash management, and increasingly agile in price and revenue management, all of which will continue to be at the core of how we will manage this business going forward. While the results we posted this year demonstrate that our strategy is gaining increasing traction, our journey and transformation of the business is ongoing. As a result, last quarter we announced a series of leadership, team, and organizational changes designed to strengthen our operating model, streamline decision making, and improve enterprise execution, all of which we believe will better position us to deliver on our overarching strategy to drive sustainable top and bottom line growth. More specifically, these changes are critical to our five primary priorities as we enter the new fiscal year. First and foremost, our focus is on strengthening our right to play, that's shave and fem categories in the United States, to better compete and win over the longer term. We have elevated the priority of winning in U.S. shave and fem care And our increased focus here will lead to an improved trends and competitiveness. A big part of this renewed focus around winning in these categories in the U.S. begins with leadership. We've recently announced a new leader for North America, Jessica Spence, and I'm thrilled to welcome Jess to our team. She's a seasoned and accomplished leader with an impressive brand building and operational background, balanced with a strong track record of driving revenue and profit growth. I'm confident that she will strengthen our North American business and position us as a key innovator, brand builder, and retail partner within the industry. Second, we must continue to fortify and accelerate our consumer-centric innovation platform. As we increase our focus on the consumer and accelerate our speed to market, our near-term pipeline remains robust. After launching category-leading innovation in US SunCare in 2024, with our Banana Boat 360 spray products, we are seeing the intended impact when we reshaped our innovation engine just over a year ago and created a more locally driven agile platform. Our outlook for the coming year includes meaningful top-line contribution from innovation with the expansion of Wilkinson Sword Master Brand in Europe, the launch of the Schick First brand in Japan, further shave and body expansion for the Billy and Cremo brands, and broader product introductions for the banana boat and Hawaiian Tropic brands in the United States. Our third priority is to continue to strengthen and leverage growth across our international businesses. We've significantly improved our leadership capability across our international markets. We now have a very talented set of leaders and teams in place to deliver consistent growth and value creation as we move forward. Our local leadership teams have a broader voice in innovation, ample investment, and are now executing on the strategies that they have developed. And we ended 2024 with a three-year cumulative average growth rate of over 6%, which tells us that our new operating model is working. And we believe we have a long runway for growth internationally, including another year of mid-single-digit organic growth for the business in fiscal 25. Our fourth priority is related to operations. and the work of our supply chain. We're doubling down on a clear strength and accelerating efforts to drive meaningful year-on-year gross margin accretion as a catalyst to increase marketing and commercial investment and profit recovery. We are confident that we can continue to drive 200 to 300 basis points per year in productivity savings, and we remain committed to returning the business to pre-COVID gross margin levels of 45 plus percent. We are equally committed to improving service levels as we continue on our path to becoming a world-class supply chain organization and ultimately a preferred partner of our customers. Dan is now overseeing all aspects of this effort, and I am confident that under his leadership and with the already demonstrated strength we have in this area that we will meet these objectives. And lastly, we are focused on our people. We have significantly improved our talent, capabilities, and company profile. Our employer brand is much stronger than it was four years ago. We start the new fiscal year with record engagement scores with a nearly 80% positivity rate across the organization and having been recognized externally as the second best company to work for in America out of 400 ranked in the midsize company category. We're proud of this recognition and we are seeing it play out not only in our engagement scores, but also in record low levels of employee turnover. Importantly, such external recognition serves as an important enabler in terms of recruiting top talent to the organization that we have seen in leadership roles across Europe, Japan, and China, and most recently with Jess's arrival last month in North America. So as we think about the future and our ability to deliver on our commitments, I have never been more confident than I am now that we can deliver consistent and reliable growth and value creation over the coming years. And so we're excited about the year ahead. As we look to fiscal 2025 with good momentum across our international businesses and right to win portfolio in the U S a strength and leadership team and increased focus on excellent execution across the organization. We anticipate low single-digit organic top-line growth, further gross margin and profit expansion, and ultimately increased value creation for our shareholders. And now I'd like to ask Dan to take you through our fourth quarter of fiscal year results and discuss our outlook for fiscal 25. Dan?