Herbalife Ltd.

Good afternoon, and thank you for joining the fourth quarter and full year 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 Aaron Banyas, Vice President and Head of Investor Relations, to begin today's call.

Thank you, and good afternoon, good evening, everyone. Joining us today are Michael Johnson, our Chairman and Chief Executive Officer, Stefan Graziani, our President, and John DeSimone, 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 2 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 of 1995. 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.

Thanks, Erin, and good afternoon, everyone, and thank you for joining us today. Today, I have three pieces of good news to share with you. First, something I'm very excited about, the appointment of Stefan Graziani as the CEO of Herbalife, effective May 1. Next, I'm equally excited to announce that Rob Levy will be stepping in the role of President of Worldwide Markets. And our third piece of good news is our positive financial results and improving distributor trends. Let's start with the Q4 results, which were excellent. We delivered net sales growth on a constant currency basis for both the fourth quarter and the full year. On a reported basis, net sales for the fourth quarter were $1.2 billion, slightly below the fourth quarter of 2023. FX moved a lot during the fourth quarter. Had FX rates in November and December remained consistent with the FX rates inherent in our fourth quarter guidance, net sales for the fourth quarter would have been up 1% year over year, and at the end of a very high end of guidance. In addition to our good sales results in the fourth quarter, we also delivered strong adjusted EBITDA results, which significantly exceeded guidance in prior year. During 2024, we also paid down $250 million in debt and reduced our total average ratio to 3.2 times from 3.9 times at the end of last year. John will go into more detail about the results in 2025 guidance later on the call. When I returned to Herbalife in October of 2022 for the third time as CEO, I promised the board and myself to focus deeply and thoroughly on how we best go about succession and appoint the next CEO of this great company. Herbalife operates in over 90 markets as a public company in the multi-level direct selling business. We offer science-backed, high-quality nutrition and skincare products and a business opportunity through Herbalife Independent Distributors that generated $5 billion in revenue and $635 million in adjusted EBITDA in 2024. We are the second largest direct selling company in the world. The nature of our global business and distribution method creates enormous opportunities and unique challenges. When I joined Herbalife in 2003 from Disney, I had zero experience in direct selling. My skill set was in retail, marketing, branding, and global business management. My learning curve here was steep. The early days as a private equity company afforded me the opportunity to adapt my skills to Herbalife's business. I made my share of mistakes, but I also set a vision for the brand, product, and distribution that saw us grow in sales and open new markets. The best distribution ideas came from those closest to the markets, our Herbalife independent distributors. Today's market has changed from where I started 22 years ago next month. Distributors then and now are key to our growth and success. Knowing what makes our distributors tick and setting in motion a vision and strategy to offer distributors and customers of Herbalife a health and wellness community and a platform to operate from is our next frontier. Years ago, I entertained the idea of bringing the distributor into the executive team of Herbalife. Mark Hughes was the first Herbalife distributor and the first CEO of Herbalife. Mark's understanding of our distributors and business got Herbalife off the ground and running in 1980. Today, we are moving forward with our second distributor, should I say former distributor, as our new CEO, Stephan Graziani. Stephan, as I said earlier, will formally begin his tenure as CEO on May 1st. This journey to CEO began 33 and a half years ago when Stephan started his Herbalife distributorship in France. His technical skills, his grit, and his gut in combination with his fraternal sensibilities, saw him climb and create one of the largest Herbalife worldwide distributorships. After my unsuccessful attempt in 2011, we succeeded in bringing Stephan aboard as chief strategy officer in 2023. The impact was immediate. Through his and his colleagues' implementation, we reversed the post-COVID years recruiting decline, reduced the decline in our top line, and alongside the work of John DeSimone and our finance team greatly improved our income and solidified our balance sheet. As Stefan rose to president last year and worked with John and the team to define and soon implement a robust transformative digital strategy, the rise to CEO was a matter of time. The board and I carefully thought through this decision. Distributors and employees worldwide were important factors in our thinking, We know that we have the right CEO at the right time to build on our vision of being the world's premier health and wellness company, community, and platform. I'm super honored to welcome Stephan as Herbalife's next CEO. I'm also honored to announce Rob Leafy has accepted the new role of President of Worldwide Markets. Rob, a good friend, has been with Herbalife for 30 years and has at one time or another run every one of our regions. He's played a key role in opening more than 35 markets around the world, has been responsible for numerous corporate functions, including our distributor-facing businesses, sales and marketing, and distributor operations. Rob is respected in the industry and is committed to the success of our distributors and our employees. He's been an integral part of our leadership team and a trusted advisor to Stephan and to me. He's known and respected by distributors around the world. And just like Stefan, he's the right person at the right time, and there's no one better prepared and more capable of working alongside Stefan to lead Herbalife into the future. I'm personally excited to continue my involvement with Herbalife and looking forward to transitioning the role as executive chairman and continue my role on the board of directors where I will lead the board to support our executive team and focus on shareholder value. As I mentioned earlier, our company founder, Mark Hughes, was a distributor who had a vision to improve lives of people around the world. This month marks our 45th anniversary, and it's only fitting we're announcing the appointment of a former distributor as our new CEO and a president who worked directly with Mark. Our company is in much better position than it's been in a long time. And under Stefan and Rob and our team's leadership, we have an incredibly bright future. So now, Let me turn it over to our incoming CEO. Stefan, take it away.