Tupperware Brands Corporation

Good day, and thank you for standing by. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Jane Girard, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, operator. Welcome to Tupperware Brands' second quarter 2021 earnings conference call. With me on today's call are Miguel Fernandez, our president and CEO, and Sondra Harris, our chief financial and operations officer. Earlier this morning, we issued a press release announcing our financial results for the second quarter into June 26, 2021. The press release is available on our company website on our investor relations page. We will begin with our safe harbor statement. During the course of today's call, we will make forward-looking statements that are subject to risks and uncertainties as described in our press release and in our SEC filings. You should listen to today's call in the context of that information. We will also discuss some of our results for the quarter on a non-GAAP basis. Reconciliations between GAAP and non-GAAP measures can also be found in our press release. Any reference to sales in the discussion today is referring to local currency sales, which compares results between periods as if current period foreign exchange rates had been the exchange rates in the prior period. You can access the release and our forward-looking statement language through the investor relations section of the company website where you can also access a webcast replay of this call later today. I will now turn the call over to Miguel for his remarks.

Thank you, Jane, and good morning, everyone. We're now over 15 months into our three-year turnaround plan, and we continue to make progress across many areas of the business, cost structure, capital structure, fixing our core direct selling business, and creating the ability to take our iconic brand into new channels of distribution. During the quarter, we continue to make the necessary investments that we believe will drive our future growth in both our current direct selling business and our business expansion efforts. We're adding new talent and investing in our core infrastructure, such as marketing, sales, and support functions to evolve to a consumer-centric and omnichannel business. We right-sized the business and strengthened our balance sheet in 2020 to make the needed investments in 2021 that will enable us to accelerate growth in 2022. As we continue to attract new investors to our turnaround story, I would like to remind you of the key elements of our strategic growth plans that are well underway today. We're pivoting from a distributor push to a consumer pull and distributor push model. We're updating our brand architecture to allow us to segment branding, products, channels, and pricing to appeal to a broader consumer base while minimizing potential channel conflict. We're expanding into new product categories where consumers give us permission. We're aligning product development efforts to address the needs of all consumer social subsegments. We're expanding distribution and access points to meet consumers where they shop. And most importantly, we're continuing to fix the core direct selling business with proven methods. The Tupperware brand is iconic. We have been around for 75 years, and that is for one primary reason. Our products have been loved and trusted in homes around the world for generations. We're making new investments to build an omnichannel business, one that grows our direct selling channel, provides new consumers new ways to access our products, and gives our brand a bigger platform to nurture a better future every day. Let me first provide you with a progress we've made in modernizing our core direct selling business. Over the last year, we have implemented a suite of tools to enable our Salesforce to reach their customers in new and more efficient ways. And honestly, it's all about virtualizing our Salesforce journey by looking at the experience from end to end and delivering the right technologies for Salesforce to start, grow, and sustain their businesses. Our most advanced digital tool is called TopSocial. and it makes it easy for Salesforce to grab and share social media content to better market their businesses and product offerings. We have now expanded this technology into 23 markets with two more planned for later this year. We're also rolling out technology tools like Tupperware Live, formerly called VTOP, that enables our Salesforce to host virtual parties and it allows their customers to purchase in the moment. We have launched this in 12 markets so far with five more countries coming online by year end. Our most recent technology addition is an onboarding tool. It helps to drive retention and performance where our consultants can find resources for communication as well as continuing education and training. It has been launching two key markets so far with five more upcoming by the end of 2021. Additionally, we now have e-commerce direct to consumer functionality available in 13 markets. Now, let me turn to our business expansion whose sales are 18% of year-to-date revenue and include distribution channels such as business-to-business loyalty programs, sustainability, specialty retail such as QVC, importers, and retail studios in China, Korea, and Vietnam. Our efforts to dramatically expand this business is rooted in our brand strategy to build a branded house. We believe creating sub-brands such as Tupperware Essentials and Tupperware Pro Chef will allow us to develop the right product mix, the right pricing, and expand into new channels of distribution while minimizing channel conflict. Let me explain a bit more about our business expansion and drill down on some specifics around more developed pillars. Our B2B relationships support loyalty programs of major retailers while improving our brand presence. We're making good progress developing more relationships with large retailers in Brazil, Mexico, and Europe. Our B2B sales have historically been between 30 and 35 million annually, and we expect this to be over 50 million this year. Another important part of the business expansion strategy is moving into new markets through an important model whereby we don't have physical business presence. Rather, we sell stopover branded products into markets through an agreement with an important distributor. These products are being distributed through direct selling and, in some cases, through omni-channel strategies. Prior to this quarter, we sold into 18 markets through this model. Beginning in the third quarter, we opened two new important markets, Honduras and Panama. We hope to finalize an agreement to open a very promising market, the UK, before the end of the year. These important markets are strategically important and provide incremental profitability. In this quarter, we saw the best profitability in the last 10 years, specifically in the important markets. In the sustainability pillar, we're now selling our limited edition national park-themed product as part of our partnership here in the U.S. The product line includes products intended to be taken on the go to help reduce waste in the parks. A number of national park-themed products are made with our EcoPlus material, which is made with innovative sustainable materials using mixed plastic or renewable recycled materials. These products can also be found for sale at some national parks across the country for a limited time. Now, let me provide a product update. As you know, product innovation is important to us to meet and address the needs of all consumer social subsegments, and we are making some good progress in this area. For the second quarter, the percentage of sales for new products in Mexico was 11.6%, up 52% from prior year's second quarter. Brazil new products contributed 8.3% of sales, up 41%. And U.S. and Canada contributed 3.8%, which is 38% higher than last year. Our largest product category continues to be food conservation at 27.5% of sales, and it is 17% higher than last year, followed by entertainment category at 16% of sales, up 18%. Kitchen preparation is about flat versus last year at 15.2%, and on-the-go category is 13.2% of our revenue and was down slightly versus last year. I would also like to give a brief update on our ESG environmental, social, and governance strategy. We have made great strides in the last quarter to refine our ESG goals, including aligning that with our employees' performance objectives. We have developed an internal cross-functional working group, together with the support of our board of directors, to take our ESG efforts to the next level. Our goal is honing on our sustainability focus, social impact, and government efforts to align our brand purpose to nurture a better future every day. As our work in this area progresses, I look forward to sharing more on our long-term ESG targets, social impact initiatives, and training and education in this area. Looking to the next few quarters, our key priorities in 2021 are the following. First, to strengthen our direct selling business in the areas of digital and product investment, segmentation of our Salesforce, introducing preferred customer loyalty programs around the world, use of data to identify best practices, use of data to upsell and cross-sell to our preferred customers, and to ensure competitive service and cost. And in the business expansion, our priorities are the following. to explore new channels of distribution, avoiding a potential conflict with our current direct selling channel, introduce Tupperware sub-brands, and penetrate into different product categories where we know the consumers give us permission to enter. We believe the execution of these priorities is building a strong foundation that will create meaningful value for our shareholders for years to come. Let me now turn the call over to Sandra Harris, our CFO and COO, for a review of our financial statements.