Q4 2020 Tupperware Brands Corp Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Tupperware Brands Corporation fourth quarter, two charges and 'twenty earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session chassis question and you will need to press star one on your telephone.
Now I'd like to hand, the conference over to your Speaker today, James Girard, Vice President of Investor Relations. Please go ahead.
Welcome to Tupperware brands fourth quarter 2020 earnings conference call.
With me on today's call are Miguel Fernandez, our president and CEO and Sandra Harris, our chief financial and operations Officer.
Earlier. This morning, we issued a press release announcing our financial results for the fourth quarter ended December 'twenty, six 2020.
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 todays call and 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 adjusted measures can also be found in our press release.
Any reference to sales and this 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 to 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 Jim and good morning, everyone. In 2020, we're sort of down a path to modernize the company.
Let me summarize key wins for us in 2020.
We right sized our business with gross cost savings in excess of 190 million and we've revamped our leadership team and reorganized the company, we strengthened our balance sheet and improved cash flow and restructured and refinanced our debt, we initiated a new growth strategy to lots of power and consumer acceptance.
Net.
And we sort of executing on our new defined purpose to nurture a better future every day put and our environmentally friendly reusable message front and center.
As a result of this performance we have now achieved two quarters from improving performance on our way to turn around the company.
With sales growth of 28% and the last two quarters, we relinquished change the negative trends from prior years.
COVID-19.
Got to disruption and we will have to deal with in 2020 on the negative side, we estimate a negative top line impact of about $62 million due to forced closures and other restrictions from the positive from for US, we certainly consumer trend emerge around the world and <unk>.
120, more people have been sustained comp due to the pandemic, which led to more cooking at home more timing and the kitchen and morroco offer and a worsening awareness to prepare and minimize food waste and increase their use of products mirror with single use flow materials.
Couple of products, where a solution to these consumer needs to overcome the restrictions related to the global protecting our sales force accelerated their adoption of digital tools and methods and so.
And so they were able to modernize how they reach and service their customers and how the.
We demonstrated our innovative products.
Our kitchen and shift for us in 2020 was that our sales force realize the geography was not longer hindered factor in growing their business.
By utilizing social media platforms, and digital tools, they've been able to reach beyond their physical neighborhood and leverage with expensive reach of their online and social network.
While it is still early and the transition to embracing digital selling tools and methods. We're confident we can build upon the success gained in 2020 and accelerate widespread adoption in 2020 one.
We believe our more detailed the equipped sales force will enable greater engagement and interest productivity as we move forward with our other growth initiatives.
Highlighting a few of our key markets and the <unk>.
And kind of a market sales increased 83% in the fourth quarter.
Cost of service improvements during the quarter the company's backlog dropped.
And 1 million this backlog attributed 47% of sales growth, leaving our sales increase of 36% without it.
The U S and Canada sales groups continue to embrace detailed demonstration tools.
More efficient and productive selling situations.
And they are currently testing, our new VTOL online pointing to.
Our total innovation continues to appeal to the consumer needs.
Recurring sales it efficiently and reduce energy waste.
We featured two products and the fourth quarter, including a two speed and mixer, which kind of with and mixed mentally without the use of electricity and enhanced fertilizer, which for license vegetables quickly and easily.
Tupperware, Mexico contributed sales growth, 8% and the fourth quarter, Mexico grew 9% and average active sales force behind the increased use of mobile and mobile apps and our programs targeted promotions during the quarter products contributing strongly to sales included three on the go products two new water bottle.
And on the go coffee Cup demonstrating that our brand has permission to sell products.
And just asking to put storage.
And Brazil sales increased 58 percentage, which was achieved through a coordinated use of data merchandising products and communication and the.
And the top future products, and Brazil, where similar to Mexico, and the undergo category, including new water bottles and lunch gets the entertaining category contributed strongly to sales in the fourth quarter and as well.
And lastly, a key market for us China declined 11%.
Contributing factor was a decrease of 600 <unk> two and the year at around 5700, and we believe China could be a key growth driver for us as we plan to expand into new product categories and channels. We're happy to welcome our new President of China, and Vietnam, Kenny Young who joins US from particular price tools has done that Pepsico here.
And the number of businesses and J D Dot com and spent 10 years with Walmart before that we believe can spirits will help us expand our retail stood a presence in China accelerate new product innovation and increased focus on transformational E Commerce strategy.
As we move into 2020, one we will accelerate our consumer centric focus.
And you know.
And we do.
With this in mind, we recently announced and insurance internally that we're realigning our resources against the priorities that will help us drive our future to expand availability of our products around the world and reach consumers wherever they choose to purchase with organize our commercial efforts into two streams, the traditional direct selling business and the new Omnichannel business.
Cash.
Patricio Cuesta worldwide commercial person, who has over 16 years of experience running directionally and markets and regions will lead our direct selling business and will continue to focus on improving their corp.
This includes and.
And bridges use of data and analytics to help us make better decisions.
And our digital transformation to create a seamless experience for our sales force to become more efficient and productive.
And expansion into new products and categories, given our sales force the opportunity to excite existing customers and attract new ones with these efforts. We believe we can create a more sustainable and predictable business.
A total of summer pressing and commercial business expansion will lead our Omnichannel strategy. He brings deep international experience and developing various business models that support and complement our direct selling model.
Im confident and the ability of our new litter leadership team to execute on our priorities. Our focus in 2021 will be to expand their skill set and the company to be more data driven and explore new channels of distribution.
And a potential conflict with our current direct sales channel by introducing tupperware sub brands and or penetrating into different product categories, where we know the consumer and give us permission to enter.
We believe the execution of these priorities will create meaningful value for our shareholders for years to come.
Now, let me turn the call over to Sandra Harris.
Our CFO and COO for a review of our financial statements.
Thanks Neil.
Turnaround plan and accelerated as we move through 2020 and is now well underway.
And 2020, we established a firm financial foundation by right sizing the cost structure refinancing the 2021 debt obligations and trading liquidity.
<unk>, the finance and accounting organization and strengthening our control environment.
Our fourth quarter sales and prayed, 20% compared with last year.
The majority of our markets posted improved sales and the quarter North America increased 50%.
South America increased 55% and Europe increased 8%.
Asia declined in the quarter down, 5%, China was a major contributor.
And the last three months, we've established new leadership and strategically important markets in Asia that we believe will drive future growth.
And you're starting with weak sales trends from 2019 carrying into the first quarter, coupled with the no significant impact of COVID-19.
<unk> and sales declines and the high teens for the first quarter and second quarter with high single digit sales declines.
And the second half the pivot and the business was evident with growth of 20% and both the third and.
And fourth quarters, finishing the year, 3% higher than 2019.
If you exclude the net negative impact of COVID-19.
Revenue would have exceeded the prior year by 7%.
And we believe this performance is evidence that the actions of our turnaround plan and are beginning to take hold.
And with two months completed and the first quarter of 2021, we are seeing continued strong revenue growth and a low to mid teens compared to our easiest comps and 2020.
Turning now to profit.
Gross margins and the quarter and pre a 500 basis points to 68, 2%.
240 basis points were attributable to favorable manufacturing costs, reflecting efficiencies due to higher volumes.
220 basis points are reflective of our turnaround plan and cost savings and 40 basis points or from lower resin cost.
SG&A as a percentage of sales was 54, 1% and a quarter before.
Reflecting an improvement of 520 basis point year over year, reflecting the benefits from our right size and cost savings.
This improvement is even more significant considering an increase and our bonus accrual due to progressively improve performance.
And higher distribution expenses, primarily in the U S and Canada related to small package surcharges small order sizes and increased demand.
Adjusted segment profit of $106 million or 21, 7% of cells and Trent 1090 basis points vs.
Prior year of 10, 8%.
Three of our regions all achieved operating returns in excess of 25%, while North America, representing 31% of our revenues and the quarter ended the quarter and a 10% return on sales, but delivering $15 4 million of profit versus a loss last year.
The shift and country mix to lower margin regions can impact the overall company adjusted segment margins.
Overall for the quarter adjusted income before taxes and proved over 189% to $68 1 million.
Before I discuss EPS, let me take a few minutes to address the abnormally high tax rate 72, 9% effective rate for the quarter.
As we noted during the Q3 call, we expected and our fourth quarter tax rate would be unusually high due to the timing of certain non operating events associated with the sale of noncore assets and early retirement of debt.
In the third quarter, our tax rate was lower due to the benefit from guilty credits and foreign tax credits and used to offset the tax liability related to the gain on the debt extinguishment.
The full year effective tax rate of 47% improved significantly from the 88% and 2019.
And 2020, our operating tax rate for the year was also 47%.
As part of our turnaround plan, we have started the implementation of a five year tax strategy that we expect will result in an overall effective tax rate for 2021, and the mid 30% range and even lower in 2022.
You can expect from volatility and the ongoing operating tax rate within the quarters based on the timing of various noncore asset sales and country mix.
Now to EPS.
For the quarter GAAP diluted EPS of 41 cents compared to a loss of $1 47 and 2019 the.
And the improvement is reflective of the benefits from the turnaround play and cost savings.
Profitable growth and the quarter and a gain on sale of noncore assets, partially offset by higher unallocated and operational expenses and taxes.
Operationally adjusted EPS was <unk> 14 versus a 69 net loss last year.
While we achieved our planned turnaround cost savings and the quarter net.
<unk> included 13 cents of incremental annual incentive plan accruals due to exceeding the original operating plan.
Additionally, pandemic related Fedex surcharges of seven cents.
Three sets for additional inventory reserves, and Mexico, and 11 related to the absence of China government grant normally receive and the fourth quarter negatively impacted the EPS.
We do expect that the grant will be received and the first quarter of 2021, albeit at a lower amount.
Additionally, as mentioned the quarter was heavily impacted by an unusually high tax rate.
We indicated last quarter that at a sales level of $475 million, we would expect EPS in the range of one dollar to $1.20 at and operating tax rate of 28%.
And we reassert that this is a normalized adjusted EPS for those assumptions.
The items discussed above affected the quarter by 17 million or 34 cents.
If the current quarters results were adjusted for these items and at an operating tax rate of 28%. The EPS would have been higher by another 68 cents delivering $1 16 versus the 14 adjusted EPS.
Based on the timing of our tax strategy work, we anticipate we can achieve the assumed tax rate of 28% and 2022.
Before we discuss the strength of our balance sheet net income for 2020, with almost 100 million better than the prior year as we delivered $192 million of our 180 million planned turnaround cost savings goal.
As a reminder, 75% of these cost savings are expected to annualize and 2021 and some of the savings where pandemic related and will be required to be reinvested to support 2021 sales growth.
Let me now address improvements and liquidity.
And our efforts associated with strengthening our capital structure and reducing our debt.
Free cash flow was $89 million and the quarter and $198 million year to date, representing $137 million improvement over last year.
And free of profitability and working capital were major contributors we.
We achieved and inventory turnover days an improvement of 18.
And the DSO improved to 'twenty, one from 'twenty, four and 2019.
Additionally, the year included $59 4 million and proceeds from sale of noncore assets, partially offset by capital expenditures of $27 9 million.
We do expect capital spending to return to normalized levels of $60 million to $70 million in 2020 one as we've looked at celebrate product innovation and we therefore believe you can expect a 2021 free cash flow similar to 2020.
And December we successfully retire the remainder of our $600 million, 475% senior notes with two $275 million term loans and cash on hand.
At the end of the quarter, our debt balance was $702 million versus $875 million last year, and we ended 2020 with a debt to EBITDA ratio of 299 versus three six and one last year and well below our covenant requirement of four five.
As part of our turnaround plan and we're committed to exiting and divesting non core assets.
Already in 2021, we completed the sale of average claim beauty business on February 26 for proximately $34 million.
And we closed on the sale of a plant in France for $9 4 million U S dollar with the receipt of proceeds spread through the third quarter of 2021.
And we will use the proceeds to eliminate debt further strengthening our balance sheet.
On February 12.
We filed an 8-K regarding our ongoing plans to divest of excess non core land and Orlando.
We continue to work with the O'connor group or others on divesting the remaining Orlando real estate valued at approximately $40 million.
We believe that the results reported today provide proof that our initial efforts to turnaround the company are working.
Our strong growth through our core business.
Right sizing the company and strengthening our balance sheet to support future growth.
As a result, we believe we are creating a stronger more competitive company for the future.
I will now turn the call back to Miguel for another update.
Thanks Sondra today, we also announced the appointment of three New Board members effective March 15.
We're excited to add these new three members, whose strength experiences we believe will improve our ability to successfully execute our three year growth strategy.
I will now turn the call back over to Q&A.
Yeah.
Yeah.
Yeah.
Ladies and gentlemen, as a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad again to ask a question. Please press Star then the number.
One on your telephone keypad.
Okay.
Your first question comes from day line of Linda Bolton Weiser from D. A Davidson you may now ask your question.
Okay.
Hi, how are you congratulations on a strong quarter I guess my first question has to do with topline growth, which was very strong and the quarter and it did exceed our expectations. However, it did slow a bit from the third quarter and it looks like mainly Europe.
Was the area, where the growth actually slowed can you talk about whether that was pandemic closures or any particular market in Europe and also Asia.
Was a little was kind of worst than and the third quarter as well so was that something other than China and Asia. Thank you.
Hi, Linda Thanks, Yeah. This is Sandra so for Europe, and the difference between Q3, and Q4 was predominantly related to B to B business and Q3, we had almost $11 million and b to b that did not happen and in Q4 and so that's the largest difference in Europe and if you actually look at the core business day.
Growth was relatively the same and and the profitability also improved and in Europe, and then for APAC and and maybe I'll, let Miguel expand upon what were doing there, yes, China had an impact but we still do have some from continued.
Challenges and and other parts of Asia, and specifically, you know and Indonesia and in both locations. You know we've made strategic choices on leadership, so I'll turn that over to Miguel to talk about what we're doing and Asia.
Co index so.
Hunter was seen.
Facing challenges and various market.
We recently announced.
Leadership changes from pretty much and the biggest markets and deeper I think they were reported by more fiberglass.
The other big market and Nathan got impacted by Covid West Philippines, because as you know we have a maybe a E retail type of a model and those are the ones that got hit that greatly.
Greatly.
Right.
And.
And that we were consistent with our strategy.
And the one that we've been talking about under one do we have another countries that we know that we're working which is we do have the right players. So we can execute appropriately and in those countries.
Okay. Thank you and then can you just talk about I mean, you've talked about I'm kind of going a little bit more to our good better best pricing strategy to capture more consumers are you implementing that kind of starting up.
And in 2020, one and if so.
And would that be expected to impact gross margin in 2020. One you had very good gross margin performance you know here and the fourth quarter. So kind of what can we expect along those you know in that line and up in 2020 one.
So we already we already started with some pilots around the world and.
And we've seen a lot of positive momentum and positive response, obviously.
And some cases, the gross margin gets a little bit lower but we've been able to offset it even more with the higher volume. So one important factor is that the sales force ends up making you know.
A lot more money moving with the C.
And matter of preference, which is which was key for us and with our children and these new price points, we're actually becoming more relevant because our products are getting to more consumers.
And in every single experiment or a pilot that we did around the world. So this is something that got us very excited and we're going to continue to do.
We're learning through the past.
But but very excited with that with a publicly we've run and so far.
Okay. Thank you and then.
You've done really great on the cost reduction in 2020 and your your margins have come around very nicely really across the board.
Are there additional actions that you were looking at I mean, you've talked about being able to maintain margins kind of going forward, but are there additional actions that you are kind of looking at and longer term and are you looking at more like ongoing productivity or maybe another cost reduction program or what what's kind of the thought there.
Thank you.
And so Linda and when we talk about is that 75% of low cost savings would carry into 2020, one and annualize. The other 25% were largely related to the furlough programs and other E reductions and travel and incentive trips and things of that nature that will start to come back on as we start to see some relief from Covid and we did assume debt.
5% of that would come back into the business as cost for 'twenty 'twenty, one and the other thing that I think we've reiterated is that we do need to invest and the business and so you know our intentions are that were carrying forward that cost savings and the future and.
Investments that were making in the business and we do need to make investments and our.
And your digital strategy, that's really what contributed to the growth and a quarter and you know quite frankly, the last half of this year and yeah. We have investments that we want to make to continue offering great products that excite consumers and you know, we'll also be working through and no.
Other investments net are you focused on this new business expansion that we're working on with that said, we are very committed to continuing our efforts and we realize that the SG&A percentage is still very high and so you know we're continuing to.
Focus on leveraging throughout the business and where we can we have a global business services initiative that we've been working on as we started to separate the back and functions from the front and function.
And we're starting to stand those up and in three different geographies around the world and we do expect that we'll be able to scale.
Scaled the organization and a more efficient and effective cost and leverage costs across the board and.
We also know that we had challenges this year and supply chain and so we're committed to you know to the extent and we can the whole world is being impacted by the fed ex surcharges and so you know those types of things, we can't necessarily effect, but what we can do is to become more efficient and effective and within our distribution footprint within our manufacturing footprint and we'll continue.
And you to look for opportunities to optimize them and that way the other thing and.
I'll see if and again I want to expand on it further but we're also looking at segmenting, our customer sat right and offer and different promotional cadences and.
And between preferred buyer is versus a business builder and yeah that will also have a and impact on our margins as we offer different promotions to the different segments of our business and Miguel do you want to expand on that yes, everything is based out of our segmentation strategy.
And with the use of data, where you know understanding who's here from the business and who's here from the product and.
With that knowledge, we're being able to segment and promotions, which obviously the return of the dosing basis is way higher so you can argue that.
A good way too low and SG&A, just by increasing the top line and being more so from a lot more sophisticated and the promotional strategy that were carrying around the company and.
And that's again, that's one of the things that are.
Not getting a lot of traction and we see a lot of promising results and.
And the initial efforts that we've done around the markets and then Linda one final time and historically, we've noted that our b to B businesses are more profitable and you know as we knew.
Move toward more of business expansion and our business and we do anticipate that in general those would deliver a higher margin.
Great. Thank you and then finally Hum do you have and outlook for Europe plastic resin costs in 2020 one.
Yeah, we are seeing some slight increases and resin costs and we anticipate that we can offset those through other cost savings and throughout the supply chain and or through pricing and specific markets.
Relatively small single digit increases and we are seeing some increases in revenue.
Yeah.
Okay. Thank you very much.
Your next question comes from the line of Steve O'hara with Sidoti and company. Your line is open.
Good morning, Thanks for taking my questions.
And.
And I was hoping just in terms of the free cash flow outlook for next year.
Is that just.
Just want to make sure I understand what you're including in that it's kind of operating cash flow and then you know any disposals.
Property and and so forth less capex with the.
Fishing is.
Yeah. So your free cash flow is our operating cash flow net of investing so it would be clear and include all the cash flow coming from operations and then you know as I noted and the commentary and we do expect to return to a more normal capital expenditure levels. So I'm you know we spent roughly $28 million this year and we intend to go back to somewhere around 60 to the <unk>.
$70 million in 2020 one.
But yet we still do believe that through our continued work on working capital and also through the growth of the company and the operating cash flow improvement and we can deliver and roughly around where we ended this year, you know and that 200 million range.
Okay, and then just on the.
The outlook for divestitures things like that I mean, what are you baking and next year for that.
For this year I guess for on that line.
And so I'll I'll reaffirm our commitment and we want to focus on our core business. So and you know we made the announcement that we successfully divested and in 2021 average land. We continue to look at all of our non core assets and.
Even in our real estate, which will continue to make efforts on and we have learned that obviously and it's unpredictable as to when transactions can close, especially in a COVID-19 world. There's a whole lot of administrative work that delays timelines around those and so you know it just at this juncture, it's still part of our strategy and our goal, but we did and we haven't necessarily.
Predicting the timing around the remaining seller of the land here in Orlando, nor future divestitures and.
Okay. Okay, that's fair.
And then just wanted to jump back to the unallocated expenses and I think you laid out you know kind of what was in there but.
But could you just remind me just on E.
Adjusted it looks like a $30 3 million.
And that's up you know obviously almost three ex from last year, and and I'm just kind of curious what what's in there exactly and I mean is that you know, what's really going to think about unallocated going forward.
Yeah. So one of the largest components you'll ever hear of that as that you know obviously based on the performance. This year, we are able to pay out our annual incentive program, which is something that hasn't been done and over two years, where tupperware. So.
And the performance became evident during the second half and and we had to modify quickly our reserves, which is why there was a 13th and impact on EPS and the fourth quarter of this year versus last year from that annual incentive plan and.
So that's probably the biggest increase we have made investments and more and the unallocated area as we separated the back and from the front and so you heard the announcement.
And our commercial leaders like Patricia and and Hector and so we are building centers of excellence around digital and other items it would fall and allocated a bit overtime that costs will come back out of the markets as we work on a more standardized approach for that so those are really the two biggest components I think and unallocated and yeah, we hope and anticipate.
And at our annual incentive plan continues.
And and obviously on a go forward basis that would be built into our our 'twenty 'twenty, one and and your numbers as we develop that it was just something that was not expected as we entered into this year and so it was a delta.
Okay. Okay.
And so yeah, I mean I guess.
Yeah.
Does it make sense to think about that line as you know.
Percentage of saying and our segment profit.
And I mean $32 million and $19 60 per share I mean, its something kind of splitting the difference.
Maybe the better way to think about it in terms of you know.
And if results improve and in 2021 and you get more.
And its based comp and things like that and growth initiatives does that maybe not as high as this year because of the step up where the accrual was behind.
Yeah, I mean, I can tell you that traditionally you know obviously, we've reported the unallocated as a tupperware and method I would tell you that my focus is more on the SG&A.
Since the majority of that and allocated sits and our SG&A number. So the fact that you know this year, we continue to improve our SG&A I'm you know for the quarter last year was at 59, 3%, we dropped to 54, 1% and and then and and for the full year. We've also had improvement from 55.6 to $54 five so.
Again, we've acknowledged before that being in that 50% range is not where we'd like to be there will continue to make efforts on that and unallocated and as a part of that and so we're balancing this now on a global basis versus where in the past and our unallocated was largely what was considered a worldwide, but we're looking at it from a holistic global perspective, and it's continuing to optimize our cost.
And.
Okay.
And I mean, you know you know.
You said Oh.
And that ranges and where you Wanna be Missouri.
And of the <unk>.
Long term thinking around where that could get to.
Everything's up and running.
And you hope and.
And I don't know if your peers are.
And our range peers are in but I mean is there a way to think about that longer term.
And what level that SG&A could get to.
Yeah, and I think I may have said and capacity, but I mean over a three to five year period, we anticipate that we get into the Forty's, that's where we'd like to be and not not hanging out and the fifty's, but yeah, we are going to reinvest and the business and so we're trying to balance out as we reinvest and make those digital investments and investments, we're making and the segmentation work and so you know we would like to be and the 14th.
We're over our strategic long term plan period, but we're going to balance that so that we can continue to grow this business on the top line.
Okay, Great and then maybe just on the I think last quarter you guys noted some supply chain issues.
But I didn't hear I mean, it sounded like you guys fulfill the backlog and North America and that was Oh, So did something happen kind of inter quarter that relieve those issues or are there still supply chain issues going forward and maybe they're less acute.
Yeah, and we're excited that we were able to make significant progress and our backlog and again you know the backlog was created and valued by basically three reasons and he wanted to increase and demand it was and you're outside of what we had been able to forecast and fix that and that's really positive and the other thing is that just within our distribution network you know the change and the business model and also.
You know to meet the backlog and this is what caused the increase and distribution expense.
And is that you know we were shipping and whenever it became available so since the demand created product shortages, we were shipping more packages as soon as we can get them to ensure that we continue to the white ourselves force and.
And so you know that that's something that added to it and then the.
And the other piece of the backlog is just investing in new leadership, and new talent and the supply chain that understand what consumers want and how we need to you know.
And I improve every day and our distribution centers on the efficiencies of how we pick pack and ship and so yeah that new leadership came on board early in the fourth quarter and you know you saw the results at 21 million and the backlog got shipped in the fourth quarter and so and we continue to see the deficiencies and improvements happening as we invested and that new leadership.
Okay, alright, great. Thanks for the time.
Thanks, Steve.
Your next question comes from day line of Wendy Nicholson with Citibank Human and ask your question.
Hi, Good morning, first two questions just housekeeping and Sanford did you offer a sort of a target tax rate for 2020 one.
Yes, I did it was we're gonna be and the mid thirties as what we're predicting for 2021.
And it perfect sorry about that and then just a part of the dividend I know you suspended that which made sense, but obviously you've made huge progress on debt pay down any plans to reinstate the dividend.
Yeah, our priority right now and Wendy and we have obviously, we're excited about the turnaround plan as part of the turnaround plan and our goal was to rightsize. This business and also start to grow the topline and so are our first priority is reinvesting in the business and so we'll do that with the sale of the non core assets and we're committed to paying down our debt even.
Further so we've made tremendous progress on our overall debt.
Obviously, improving our leverage ratio every day, but we'd like to become a much healthier company from that perspective, and so and we've committed and also the term loans. Obviously you had a higher interest burden on them. So you know as we sell the non core assets. Our focus there is to start to pay down the debt and then you know what hopefully will renegotiate that to a healthier.
Level at the right point and time once we do those two and we're absolutely open to looking at parts of the share buybacks or dividends, but I'm you know it would be and outerwear.
Fair enough. Okay. Thanks, and then and Miguel for you maybe sort of bigger picture strategic question, just thinking about you know the benefit that the business clearly saw during COVID-19 and and some of the things that you're working on in terms of new products and and and all of them backwards.
Just as we think kind of high level about our revenue outlook for 2021, I know you don't want to give too much and the way of guidance at this point, but is there any reason, we shouldn't think of kind of close to $2 billion is a reasonable topline forecast for 2020. One I'm just just taking the puts and takes of so.
Tough comps and some markets all that kind of good stuff, but but but high level or are we still running and that kind of 480, 490 and sales per per quarter and you're in your mind.
So Wendy and Youre not going to like my answer because you know that we don't we're not giving guidance, but what I can tell us debt.
The things that we implemented the ones that you know investing and detail and making sure that they're as adoption there.
Sandro said, we're investing and that we're investing in new products, we are investing and the brand we are investing in India and the data and all those things are getting traction.
So so we're very confident and feel really good about all the things that we are you can put it into the system.
Obviously, obviously for the last part of the year, we have a difficult comps, but overall for ebix fatigue.
Our point of view, we were and we're on course, where.
Where exactly we want to be probably even a little bit ahead of where we expect it to be at the very beginning.
So we're very excited about the future and.
And I.
Yeah, and Wendy just to reiterate what I said is that you know for the first two months, we are seeing the low to mid teens and the first quarter, but that is our easiest comp of the year and so as we go throughout the year and we've been effective as comps get much more difficult, but and that's where we're tracking at this juncture.
And can you and again I E. I don't mean to push but just in terms of maybe in the U S where there are some parts of the country that are really kind of back to normal for the most part people and gone back to work people are back and school etcetera, etcetera can you talk about or do you have any visibility into.
Those areas are those regions or are your sales still running up that strongly I'm, just and I think bottom line. What we're all worried about or thinking about is as people go back to their normal day job is are they going to leave their part time job selling tupperware south. So so that's kind of what we're all thinking about.
So so let me just let me tell you something hopefully and we felt.
One of the key reasons why we we experienced is a great growth and that during last year was obviously the different difference and consumer behavior, but also the adoption of digital tools for free.
From our sales force.
And as you've heard me, saying before this is like the horse in the car.
Once people start train the color on day, so that it was safer when from further faster. They never went back to the horse. So it's the same with a lot of those segments of our sales force. They are using their new tools. They are falling in love with the new tools and they realize that they're more productive and efficient. So there's no. There's no reason why they would go.
Back to the old way of doing business and that's.
That's why we keep on investing and I'm seeing about D E.
Due to world because that's that actually improve the whole tupperware proposition into any market not only the U S.
Because with less if where you can actually earn more from the sales from one point of view.
Fair enough that's hugely helpful. Thank you so much.
And we have a follow up question from Steve O'hara with Sidoti and company. Your line is open.
Yeah, Thanks for taking the follow up.
And back to you.
Free cash flow forecast for 'twenty one.
I'm just curious.
I'm not sure does your guidance include some level of Basel.
Or does that guidance for free cash flow only include the capex.
Yes, and I'll, just say it again and then on the divestiture side and any of our businesses and at this point, we have not predicted the timeline associated with that we're still focused on it and.
We're not necessarily including you know any type of proceeds from continued and.
Divestitures other than other than the ones that you know we talked about I mean, obviously adversely and fell into 'twenty 'twenty, one and so we provided that number at around 34 million of proceeds and then we did have and the sale of our French manufacturing site in February and it was roughly around $9 million at that cash proceeds will come and.
And of course of our three quarters, which is what we agreed to with with the potential acquirer. So we close the deal. It's just the 9 million would come over three quarters.
Okay, great. Thank you very much.
All right that concludes.
Any session of today's call I will hand, the call back over to Mike and Miguel Fernandez for final remarks.
Thank you I'm pleased that we finished 2000 twenty's stronger than initially expected I feel confident that we're now entering into the foundational phases of our turnaround plan, where we can begin executing on our vision for the company.
We expect to build a consumer centric company, one that is stronger more resilient with the right processes technologies, and mindsets and place to expand our iconic brands into the future.
Thank you very much for your time today.
Thank you for sensors and thank you, ladies and gentlemen for joining us.
On today's call you may now disconnect.
Yeah.
Okay.
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Yes.
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