Herbalife Ltd.

Good afternoon, and thank you for joining the first quarter 2024 earnings conference call for Herbalife Limited. During the company's opening remarks, all participants will be in a listen-only mode. Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference call is being recorded. I would now like to turn the call over to Erin Bayans, Vice President and Head of Investor Relations, to begin today's call. You may begin.

Thank you, Tawanda, and good afternoon and good evening, everyone. Joining us today are Michael Johnson, our chairman and chief executive officer, Stefan Graziani, our president, and John D. Simone, our chief financial officer. Before we begin today's call, I would like to direct you to the cautionary statement regarding forward-looking statements on page two of our presentation and in our earnings release issued earlier today, which are both available under the investor relations section of our website. The presentation and earnings release include a discussion of some of the more important factors that could cause results to differ from those expressed in any forward-looking statement within the meaning of the Private Securities Litigation Reform Act. As is customary, the content of today's call and presentation will be governed by this language. In addition, during today's call, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures exclude certain unusual or non-recurring items that management believes impact the comparability of the period's reference. Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure. And with that, I will now turn the call over to Chairman and CEO, Michael Johnson.

Good afternoon and good evening, everyone. Thank you very much for joining us today. In the last six months, we've undertaken a complete transformation at Herbalife. We've built an executive team to take Herbalife to the next level and deep into the future. We're almost complete with our reorganization. We've strengthened our balance sheet. We've improved our margins. We've increased distributor recruiting and entered a strategic alliance with the top business and personal development thought leader in the direct selling industry. As you will see, we are seeing the positive results of our efforts. Those results include the positive trends we saw continue in quarter one. For the second consecutive quarter, we achieved year-over-year sales growth with a net sales of $1.3 billion. Our adjusted EBITDA of $138 million exceeded our guidance, and we are raising our full year adjusted EBITDA expectations. Adjusted EBITDA margin was up 60 basis points year-on-year. in April, we strengthened our balance sheet with a $1.6 billion refinancing. We reduced our total leverage ratio from 3.9 times at the end of the year to 3.6 times at the end of March. And we are committed to reducing our total leverage ratio to three times by the end of 2025. In relation to our restructuring, I believe we have the best executive team in the direct selling industry. We've developed a new operating model with our major markets reporting directly to our President, Stefan Graziani, who is leveraging his 32 years experience as a top Herbalife distributor. This restructuring also reduces layers and increases span of control, thereby improving efficiency and profitability. Most of the restructuring will be completed by the end of June, and we expect It will deliver approximately $40 million in savings in 2024 and at least $80 million in annual savings beginning in 2025. In addition, John DeSimone and his team are focused on identifying additional opportunities to reduce costs and expand margins. In March, we engaged approximately 4,300 of our top and most influential distributor leaders from 80 countries in Lisbon, Portugal for our Summit 2024. which is our annual leadership training and recognition event. Significant new initiatives were unveiled, including enhanced leadership development opportunities, elevated entrepreneurial skills training, and a program to drive increased sales and recruitment globally called the Herbalife Premier League. Stefan will provide more information on the effects of these initiatives. Following Summit, Stefan and I returned to China, where we continued our work with distributors and staff to support them in growing their business. We also shared our vision and reinforced tremendous opportunity we have in the market at their extravaganza. We had approximately 14,000 attendees at the event, which is a 25% increase in attendance versus last year. On the topic of extravaganzas, Registration numbers for our North America extravaganza are tracking well above the totals we saw last year at this time, and we believe total attendance will exceed last year's numbers. This is further evidence of renewed energy, excitement, and engagement at Herbalife. To support that renewed energy and engagement, we continue to work on Herbalife One, where the foundation has been laid for enhanced digital capabilities globally for distributors and customers. For example, we recently launched our all-new distributor e-commerce platform to our distributors in the UK and Spain, and we continue to roll out the Herbalife.com websites to an additional 22 markets since our last call. In addition to Herbalife One, our China team is rolling out some incredible technology, including wearables and a virtual buddy that leverages artificial intelligence, or AI. On the product side, we continue to build our product portfolio and have exciting products in our pipeline that leverage market trends in the weight loss, wellness, and beauty categories. We are also launching products in a variety of formats, such as single-serve options for on-the-go use and repackaging our products to reduce our use of plastics and improve our carbon footprint. Turning to the GLP-1 trend, we continue to believe the best approach for Herbalife is to leverage our distributors' core strengths. which is to help people make behavioral changes for sustainable results and provide products that complement the GLP-1 users, such as our GLP-1 Nutrition Companion product combos. While we are still in the early stages of the GLP-1 product combo launch, the data we have so far indicates that the products have been successful at attracting new customers. Our focus on behavior change and community, well, it's what sets us apart. We have multiple ways to help people change their behaviors for long-term results, including healthy active lifestyle workouts, weight loss challenges, and nutrition clubs. And it's our nutrition clubs that truly differentiate us from others in our industry. We have approximately 67,000 nutrition clubs globally. They offer an extraordinary business opportunity for distributors to provide a healthy meal for customers on the go and create a supportive community for people who are on a health and wellness journey. It is this community aspect that leads to accountability and behavior change and sets us apart. As you heard last quarter, we are focused on leveraging our nutrition clubs as well as other initiatives to drive sales, increase our recruitment, train and support distributors, and leverage technology. I'll conclude my opening remarks by saying something you've heard me say time and time again. I'm more passionate about Herbalife now than ever before. We are unique in our industry, and we believe in our products, our business model, our distributors, and our employees. And working together, we believe in our ability to truly change people's lives. We have the best team in our industry focused on growing our top and bottom lines, bolstering our balance sheet, engaging our distributors, and delivering a transformational opportunity for our customers. Now, let me turn it over to Stefan. who will provide more details that will reinforce why we're more confident than ever in our future.