Q4 2021 Newell Brands Inc Earnings Call

Good morning, and welcome to Newell Brands' fourth quarter and full year 2021 earnings conference call. At this time all participants are in listen only mode. After a brief discussion by management, we will open up the call for questions.

Speaker 1: Good morning and welcome to Newell-Bran's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open up the call for questions. In order to stay within the time schedule for the call, please limit yourself to one question during the Q&A session. As a reminder, today's conference is being recorded.

Or just stay within the time scheduled for the call. Please limit yourself to one question during the Q&A session.

A reminder, today's conference is being recorded a live webcast of this call is available or newer bands dotcom I would like to turn the call over to Soviet Smith VP of Investor Relations.

Speaker 1: A live webcast of this call is available at ir.newellgrants.com. I will now turn the call over to Sophie Elsonas, VP of Investor Relations. Ms. Elsonas, you may begin.

You may begin.

Speaker 2: Thank you. Good morning everyone. Welcome to Newell Brands fourth quarter and full year earnings call. On the call with me today are Ravi Soligram our president and CEO and Chris Peterson our CFO and president business operation.

Thank you good morning, everyone welcome to nail brands fourth quarter and full year earnings call on the call with me today are Ravi solid Graham, our president and CEO and Chris Peterson, our CFO and President business operations.

Speaker 2: Before we begin, I'd like to inform you that during the course of today's call, we will be making forward looking statements, which involve risks and uncertainties. Actual results and outcomes made different materially, and we undertake no obligation to update forward looking statements. I refer you to the cautionary language and risk factors available in our earnings release, our Form 10-K , Forms 10-Q, and other SEC filings available in our investor relations website for further discussion of the factors detecting forward looking statements.

Before we begin I'd like to inform you that during the course of today's call, we will be making forward looking statements, which involve risks and uncertainties actual results and outcomes may differ materially and we undertake no obligation to update forward looking statements.

I refer you to the cautionary language and risk factors are available in our earnings release, our Form 10-K Form 10-Q , and other SEC filings are available on our Investor Relations website for further discussion of the factors affecting forward looking statements.

Please also recognize that today's remarks will refer to certain non-GAAP financial measures, including those who we refer to as normalized measures. We believe these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP explanations of these non-GAAP measures and available reconciliations between GAAP and non-GAAP measure.

Speaker 2: Please also recognize that today's remarks will refer to certain non-GAAP financial measures, including those who refer to as normalized measures. We believe these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non-GAAP measures and available reconciliations between GAAP and non-GAAP measures can be found in today's earnings release and tables, as well as in other materials on your Investor Relations website. Thank you, and now I'll turn the call over to Robyn.

These can be found in today's earnings release and tables as well as in other materials and Neil investors Relations website. Thank you and now I'll turn the call over to Ravi.

Speaker 3: Thank you Sophia. Good morning everyone and welcome to our year-end call.

Thank you Sophie and good morning, everyone.

Welcome to our year end call.

Speaker 3: We continued our growth momentum from the past five quarters into the fourth quarter, which helped us achieve an important milestone in 2021, as we returned the company to core sales growth with strong results across each business unit and geographic region.

We continued our growth momentum from the past five quarters into the fourth quarter, which helped us achieve an important milestone in 2021 as we return the company to core sales growth with strong results across each business unit by geographic region.

Speaker 3: Despite a challenging and disruptive operating backdrop, as well as significant inflationary pressures, we delivered over 12% growth in both core sales and normalized operating income in 2021, with further progress in complexity reduction, productivity, cash conversion cycle, and a robust innovation pipeline. Let me share some highlights from fiscal.

Despite a challenging and disruptive operating backdrop as well as significant inflationary pressures, we delivered over 12% growth in both core sales and normalized operating income.

In 2021.

Further progress in complexity reduction productivity cash conversion cycle and robust innovation pipeline.

Let me share some highlights from fiscal 2021.

Core sales increased 12, 5%.

Speaker 3: Core sales increased 12.5% as each business unit grew versus last year and on a two-year stack basis.

Each business unit grew versus last year and on a two year stack basis. This was fueled by strong consumption in the U S relative to about 2020 and 2019.

Speaker 3: This was fueled by strong consumption in the U.S. relative to both 2020 and 2019.

Speaker 3: Domestic consumption increased across all eight business units relative to 2019 with writing, food, baby, commercial, home appliances and home fragrances in the

Domestic consumption increased across all business units relative to 2019 with writing food baby commercial home appliances and home fragrances.

In the double digits, even ask mobility is returning and some trends are moderating from peak levels, we are seeing stickiness and consumer behavior versus pre pandemic levels. We believe that the strategic work, we've done to rejuvenate our iconic brands sharpen brand positioning strengthen our marketing and innovation must.

Speaker 3: even as mobility is returning and some trends are moderating from peak levels, we are seeing stickiness in consumer behavior versus pre-pandemic levels.

Speaker 3: We believe that the strategic work we've done to rejuvenate our iconic brands, sharpen brand positioning, strengthen our marketing and innovation muscle, while leveraging consumer insights and foresight is enabling us to better capitalize on consumer trends.

While leveraging consumer insights and foresight is enabling us to better capitalize on consumer trends.

Our major brands are healthy and in 2021 each of our top 10 brands grew with Greg.

Speaker 3: Our major brands are healthy, and in 2021, each of our top 10 brands grew with Graco, Oster, Coleman, Yankee Candle, Sharpie, and Papermint, each registering double-digit growth.

Coleman Yankee candle sharpie and paper mate, each registering double digit growth.

2021 results are stellar yes for all our regions as each one delivered double digit top line growth with international Outpacing North America. We continue to believe that the international markets found an opportunity and we just appointed Maria Fernanda Mejia as CEO International.

Speaker 3: 2021 was also a stellar year for all our regions as each one delivered double digit top line growth with international outpacing North America. We continue to believe that the international markets abound in opportunity. And we just appointed Maria Fernanda Mayor as CEO International.

Speaker 3: Maria Fernanda has three decades of international CPG experience at firms such as Kellogg's and Colgate and has a track record of accelerating growth and profit. She'll join Mule at the end of this month with the goal of fully unlocking international growth potential and accelerating profit by leveraging scale, reducing fragmentation, and building up brand franchises outside of the U.S.

Maria Fernanda has three decades of international CPG experience at Fabs, such as Kellogg's and Colgate and has a track record of accelerating growth and profit she'll join you at the end of this month with the goal of fully unlocking international growth potential and accelerating profit by leveraging scale reduce.

<unk> fragmentation and building our brand franchises outside of the U S.

Strong omnichannel execution allowed us to attract shop us across all channels, despite consumers return to brick and mortar stores through the year yields global ecommerce sales grew at a low double digit pace in 2021 as digital penetration for the company remained at about 22% of our net sales similar to two.

Speaker 3: strong omni-channel execution, allowed us to attract shoppers across all channels. Despite consumers' return to brick and mortar stores through the year, Newell's global e-commerce sales grew at a low double-digit pace in 2021, as digital penetration for the company remained at about 22% or net sales, similar to 2020 and significantly ahead of prior years.

Training and significantly ahead of prior yes.

Our go to market strategy is yielding strong results and enabling us to forge stronger connections, both with our consumers and customers.

Speaker 3: our go-to-market strategy yielding strong results and enabling us to forge stronger connections, both with our consumers and customers. Although our service levels were challenged due to the supply environment, we saw excellent growth at our top customers and developed strong joint business plans. We're also building momentum on our innovation operating model with tighter integration of consumer insights and foresights into the process.

Our service levels were challenged due to the supply environment, we saw excellent growth at our top customers and develop strong joint business plans. We're also building momentum on our innovation operating model with tighter integration of consumer insights and a core sites into the process.

This is yielding more impactful launches not only innovations, becoming a larger contributor to sales we also see opportunity to.

Speaker 3: This is yielding more impactful launches, not only are innovations becoming a larger contributor to sales, we also see opportunity to continue to scale many of the franchises such as Sharpie, Eschel, Mr. Coffee, Iced, Food Saver, BS Line, and Rubbermaid Bread.

<unk> to scale many of the franchises such as sharp ESTO, Mr. Coffee, Iced foods say, where obs liner rubbermaid brilliance and.

In 2021, although new world's normalized operating margin declined about 10 basis points to 11% normalized operating profit grew more than 12%. Despite approximately a 700 basis points inflationary headwind, which was 9% of costs.

Speaker 3: In 2021, although Newell's normalized operating margin declined about 10 basis points to 11%, normalized operating profit grew more than 12% despite approximately a 700 basis point inflationary headwind, which was 9% of cast.

Speaker 3: offsetting levels with strong fuel productivity, pricing, and tight cost control.

Offsetting levels was strong fuel productivity pricing and tight cost control.

Normalized earnings per share grew nearly 2% versus 2020 on a tax adjusted basis that would represent.

Speaker 3: normalized earnings per share grew nearly 2% versus 2020. On a tax-adjusted basis, that would represent over 20% increase in normalized EPS, a remarkable result, particularly in this environment. Our cash conversion cycle improved by five days, year-over-year, to 68 from a high of 115 in 2018.

20% increase in normalized EPS, a remarkable result, particularly in this environment.

Our cash conversion cycle improved by five days year over year to 68 from Ohio 115 in 2018 strong cash generation, despite strategic inventory build allowed us to delever, our balance sheet to 3.0 times.

Speaker 3: Strong cash generation, despite strategic inventory bill, allowed us to de-level our balance sheet to 3.0 times.

As we focus on driving sustainable and profitable growth, we're placing significant emphasis on building operational excellence throughout the organization with project, Amit and automation being two major initiatives that we're implementing.

Speaker 3: As we focus on driving sustainable and profitable growth, we're placing significant emphasis on building operational excellence throughout the organization, with Project AVID and Automation being two major initiatives that we are implementing.

We also significantly improved our employee engagement based on a blend to employee survey the company's engagement score moved up significantly to 75 at benchmarks, indicating that culture is becoming a competitive advantage for us we continue to strengthen our commitment to.

Speaker 3: We also significantly improved our employee engagement. Based on a Glint employee survey, the company's engagement score moved up significantly to 75 at benchmarks, indicating that culture is becoming a competitive advantage for us. We continue to strengthen our commitment to corporate citizenship, sustainability, as well as diversity, inclusion, and belonging, guided by our core values of truth, transparency, teamwork, and trust.

Corporate citizenship sustainability as well as diversity inclusion and belonging guided by our core values of true transparency teamwork and trust I am pleased to share that newer brands has been named one of Fortune's 2022 world's most admired company. The company was also recognized on several of.

Speaker 3: I'm pleased to share that Neobrands has been named one of Fortune's 2022 World's Most Admired Companies.

Speaker 3: The company was also recognized on several other lists, such as the Wall Street Journal Management's Top 250 Best Managed Companies of 2021.

The list such as the Wall Street Journal Management Top 250, best managed companies of 2021 for Forbes was stopped female friendly companies and for anyone Forbes' best employers for diversity and training for anymore. Newsweek America's most responsible companies in 2022 and was awarded 100% from the human rights.

Speaker 3: Forbes World's Top Female-Friendly Companies in 2021, Forbes Best Employers for Diversity in 2021, Newsweek America's Most Responsible Companies in 2022, and was awarded 100% on the Human Rights Capital Foundation's Corporate Equality Index in both 21 and 22. Last year, we also continued to give back to our communities, donating products worth nearly $17 million.

Capital Foundation corporate equality index in both 'twenty, one and training to last year. We also continued to give back to our communities donating products worth nearly $17 million.

Let me share some insights on 2021 results for each business unit, writing had a terrific year with double digit growth almost double the rate of the total company and market share gains across each geographic region as schools came back to a more normal cadence we saw strong domestic consumption relative.

Speaker 3: Let me share some insights on 2021 results for each business unit.

Speaker 3: Writing had a terrific year with double-digit growth almost double the rate of the total company and market share gains across each geographic region as schools came back to a more normal cadence. We saw strong domestic consumption relative to both 2020 and 2019. On a two-year stack basis, writing core sales grew despite the delayed return of the commercial channel as new variants continued to disrupt back-to-office plans.

To both training training in 2019 on a two year stack basis, writing core sales grew despite the delayed return of the commercial channel as new variants continue.

Dropped back to office plans.

The rebound in the writing category in combination with excellent market share gains in the U S, Canada, UK and Australia drove excellent results for the business in 2021 in the U S neuro outpaced the marketing.

Speaker 3: The rebound in the writing category in combination with excellent market share gains in the U.S., Canada, U.K. and Australia drove excellent results for the business in 2021. In the U.S., Newell outpaced the marketing market, delivering a seven plus year high in market share and over two points in share gains and writing.

Market delivering a seven plus year high in market share and over two points in share gains and writing instruments.

Sharpies gel continued turbocharge our share in <unk> for the second straight year, resulting in U S share gains for nearly 500 basis points in this important category <unk> share of the writing category also improved by more than two points in Australia, and Canada and almost one point in the UK we are confident.

Speaker 3: Sharpey SGL continued to turbocharge our share in pens for the second straight year, resulting in U.S. share gains of nearly 500 basis points in this important category. Newell's share of the writing category also improved by more than two points in Australia and Canada and almost one point in the U.K. We're confident writing is well-positioned for a great 2022 when we expect more of a rebound in the commercial charts.

Writing is well positioned for a great 2022, when we expect more operating bound in the commercial channel.

2000, and training wireless a solid year for the baby business. Both on the good care sites as core sales grew at low double digit rate due to distribution gains innovation increased stimulus and child tax credit funding and continued strength in E. Commerce, we saw strong momentum in domestic consumption.

Speaker 3: 2021 was a solid year for the baby business, both on the gear and care sides, as core sales grew at low double-digit rate due to distribution gains, innovation, increased stimulus, and child tax credit funding, and continued strength in e-commerce. We saw strong momentum in domestic...

Speaker 3: There was lots of great innovations throughout 2021. And I'm pleased to share that Newell Baby Gear won four awards at the annual Juvenile Products Manufacturing Association Awards, the most of any company, including the tried and true award for the Graco for forever and green and environmentally friendly for centuries.

Lots of great innovation throughout 2021, and I am pleased to share that fuel baby gear won four awards at the annual juvenile products Manufacturing Association awards. The most of any company, including the tried and true award for the Graco for forever and Green and environmentally friendly for century.

Speaker 3: Along with rating, Home Fragrance was the best-performing business unit during 2021 as consumers' focus on their well-being in homes drove strong double-digit core sales growth, supported by healthy consumption relative to both 2020 and 2019. Net sales for the Home Fragrance business reached record levels in 2021, despite closure of underperforming retail locations and exit from the fundraising business in 2020.

Along with writing home fragrance was the best performing business units during 2021 as consumers focus on their well being and homes drove strong double digit core sales growth supported by healthy consumption relative to training training and training 19 net sales for the home fragrance business reached record.

Levels in 2021, despite closure of underperforming retail locations and exit from the fund raising business in 2012.

Speaker 3: We saw a really strong performance from Yankee Candle retail stores this year with positive comps as consumers returned to in-store shopping.

We saw really strong performance from Yankee candle retail stores this year with positive comps as consumers return to in store shopping the 2021 launch of the Yankee candle signature collection as well as added distribution points helped drive modest share gains in the capital category and track channel.

Speaker 3: The 2021 launch of the Yankee Candle Signature Collection, as well as added distribution points, helped drive modest share gains in the candle category in track channels.

Speaker 3: In EMEA, we delivered strong growth across all territories, leveraging e-commerce and added distribution.

In EMEA, we delivered strong growth across all territories, leveraging e-commerce and added distribution points.

Speaker 3: Moving on to food, 2021 was another strong top-line year for the food business, even as performance moderated in the second half against very challenging comparisons, and we experienced supply challenges across some businesses.

Moving on to improve 2021 was another strong top line year for the business, even as performance moderated in the second half against very challenging comparisons when we experience supply challenges across some businesses domestic Pos was significantly ahead of 2019 and slightly below elevated year ago levels.

Speaker 3: Domestic POS was significantly ahead of 2019 and slightly below elevated year-ago levels.

In 2021, too far brands ball in foods segment achieved record sales.

Speaker 3: In 2021, two of our brands, Ball and FoodSaver, achieved record sales. And Ball continued to drive significant share gains in the canning category, benefiting from the 2021 launches of Ball storage latch pantry jars, as well as the nesting jars. We also saw share gains in the Rubbermaid brand, drawing upon the successful expansion of the Brilliance line into glass and pantry category.

<unk> continued to drive significant share gains in the coming category benefiting from the 2021 launches.

All the storage latch factory jobs as well as fitness thing Josh. We also saw share gains in the rubbermaid brand drawing upon the successful expansion of the brilliance line into glass and pantry categories or products are also getting external validation as good housekeeping named Californians best.

Speaker 3: Our products are also getting external validation as Good Housekeeping named Calphon Best Non-Stick Cookware, Rubbermaid Brilliant Glass was named Best Food Storage, and FoodSaver was recognized as Best Vacuum Cleaner for 2021.

Nonstick cookware Rubbermaid brilliance class was named best food storage and fluids say what was recognized as best vacuum cleaner for 2021, we continue to believe that in a world where hybrid work environments are likely to prevail at home cooking and food consumption occasions.

Speaker 3: We continue to believe that in a world where hybrid work environments are likely to prevail, at-home cooking and food consumption occasions will remain above pre-pandemic levels and have an exciting lineup of new products for 2020.

Maine, a bio premium pandemic levels and have an exciting lineup of new products for 2022.

In 2021 core sales growth for home appliances accelerated relative to our already elevated 2020 levels led by Latin America, North America, and EMEA domestic consumption was.

Speaker 3: In 2021, core sales growth for home appliances accelerated relative to already elevated 2020 levels led by Latin America, North America, and the EMEA. Domestic construction was

Speaker 3: up significantly ahead of 2019 levels and up modestly versus 2020. Due to strong demand, we hit an all-time record production of blenders, as those two blenders celebrated their 75th anniversary in both the U.S. and Latin America.

Up significantly ahead of 2019 levels and up modestly versus 2012 due to strong demand we hit an all time record protect production of blenders as those tail blenders celebrated the 70 <unk> anniversary in both the U S and Latin America in 2021 outdoor.

Speaker 3: In 2021, our outdoor and recreation business grew core sales in each quarter, demonstrating momentum and the strength of the turnaround strategy we began 18 months ago. For the full year, core sales improved across all regions, with robust growth driven by Japan, U.S., Europe , and Latin America. The iconic and largest brand in the O&R portfolio, Coleman, led this growth, showing a lifestyle brand building focus is working.

<unk> business grew core sales in each quarter, demonstrating momentum and the strength of the turnaround strategy. We began 18 months ago for the full year core sales improved across all regions with robust growth driven by Japan U S Europe , and Latin America, the iconic and large largest brand in the one <unk>.

Portfolio of Coleman led this growth showing a lifestyle brand building focus is working we also strong saw strong results from our portable beverage category with both configure and Bubba drive growing double digits key product innovations in outdoor.

Speaker 3: We also saw strong results from our portable beverage category, with both Contigo and Baba Drive growing double digits.

Speaker 3: key product innovations in outdoor and recreation, including include the Coleman Peak One Platform, Coleman 1900 Collection, Contigo Hydration, and a new camping gas grill in Europe .

Recreation.

Including include the colon peak, one platform Goldman 1900 collection, contango hydration and a new campaign gas grill in Europe , a global marketing campaign with Coleman. The outside his colleagues is resonating well with our outdoor enthusiast consumer as Brian sentiment and brand health scores.

Speaker 3: a global marketing campaign with Coleman. The outside is calling, is resonating well with our outdoor enthusiast consumer as brand sentiment and brand health scores continue to rise and helping us win new distribution for 2022 across various channels, including outdoor specialties.

Continue to rise and helping us win new distribution for 2022 across various channels, including outdoor speciality.

And beverage the contiguous treatable desk, Mark which was introduced in 'twenty. One has become the number one market in the coffee mug category and contango is restoring its leadership position.

Speaker 3: In beverage, the Contigo's Treatable Desk Mug, which was introduced in 21, has become the number one mug in the coffee mug category. And Contigo is restoring its leadership position.

I'm also encouraged by the progress in margins both in outdoor recreation and home appliances. In 2022, we will exit some lower margin categories, such as bedding fans and air events, which would be a headwind to top line, but helped make further inroads on improving profitability.

Speaker 3: I'm also encouraged by the progress in margins, both in outdoor and recreation and home appliances. In 2022, we will exit some lower margin categories, such as beddings, fans, and airbeds, which will be headwind to top line, but will help make further inroads on improving profitability.

From a topline perspective 2021 was another solid year for the commercial business as core sales grew on top of a very difficult comparison fueled by consumption growth. We saw strong consumption performance across major categories with the exception of warfarin, which serves as a year ago due to the pandemic, while the business has been amongst the <unk>.

Speaker 3: From a top line perspective, 2021 was another solid year for the commercial business.

Speaker 3: as core sales grew on top of very difficult comparisons fueled by consumption growth. We saw strong consumption performance across major categories, with the exception of washrooms, which surged a year ago due to the pandemic. While the business has been amongst the hardest hit by inflation,

Hardest hit by inflation. The team has done an outstanding job in implementing a series of price increases to help mitigate the impact given our expectations that resin prices have stabilized where our confidence that we will restore gross margins and drive strong operating growth operating profit.

Speaker 3: The team has done an outstanding job in implementing a series of price increases to help mitigate the impact. Given our expectations that resin prices have stabilized, we're confident that we will restore gross margins and drive strong operating profit growth in 2020.

Growth in 2022 lastly.

Lastly, core sales for connected home and security increased in 2021, driven by strong domestic consumption.

Speaker 3: Lastly, core sales for connected home and security increased in 2021 driven by strong domestic concerns.

Earlier this week, we announced an agreement to sell the CHS business <unk> technologies and it is consistent with our strategy of tuck out divestitures, we are confident that <unk> the right strategic owner for this business and believe this transaction will enable <unk> to realize it.

Speaker 3: Earlier this week, we announced an agreement to sell the CH&S business to Residio Technologies, and it is consistent with our strategy of tuck-out divestment.

Speaker 3: We're confident that Residio is the right strategic owner for this business and believe this transaction will enable CH&S to realize its full potential. At the same time, it allows us to bring even greater focus to our core businesses where we see the highest potential for value creation.

<unk> full potential at the same time it allows us to bring even greater focus to our core businesses, where we see the highest potential for value creation.

Speaker 3: Since CH&S was not integrated with the rest of NEO, we do not expect this transaction to be disrupted.

Since <unk> was not integrated with the rest of <unk>, we do not expect this transaction to be disruptive.

Speaker 3: We're exiting 2021 from a position of strength. And I am confident that the strategic investments behind brand rejuvenation, omnichannel, and social media listening capability, as well as supply chain resiliency, position us well for driving sustainable, profitable growth.

We're exiting 2021 from a position of strength and I am confident that the strategic investments behind the brand rejuvenation, Omnichannel and social media listening capability as well as supply chain resiliency position us well for driving sustainable profitable growth.

Speaker 3: As we look to 2022, an overall theme is that if 2021 was a year of top line growth, 2022 will be a year of margin.

As we look through 2022 and overall team inside of 2021 was a year of topline growth 2022 will be a year of margins. We're focused on five key priorities.

Speaker 3: We're focused on five key priorities. First, laser focus on improving gross margins as we double down on our efforts to mitigate the significant inflationary pressures and supply chain challenges while improving customer service levels. The strength of our brands has allowed us to take the appropriate pricing actions on all our businesses while ensuring they remain a good value for consumers.

Laser focus on improving gross margins as we double down on our efforts to mitigate the significant inflationary pressures on supply chain challenges, while improving customer service levels. The strength of our brands has allowed us to take the appropriate pricing actions on all our businesses while ensuring.

There remain a good value for consumers. In addition, we will continue to optimize promotional spend pricey innovations to be gross margin accretive direct A&P spend towards higher gross margin categories and drive productivity.

Speaker 3: In addition, we'll continue to optimize promotional spend, price the innovations to be gross margin accretive, direct A&P spend towards higher gross margin categories, and drive productivity.

Second we will continue to drive core sales growth and innovations focus on mastering the 360 degree consumer journey and delight consumers at each touch point with compelling storytelling.

Speaker 3: Second, we'll continue to drive core sales growth and innovations. Focus on mastering the 360 degree consumer journey and delight consumers at each touch point with compelling storytelling and joyous brand experience.

And joyous brand experiences I genuinely believe we are making the shift to becoming a consistent gross company.

Speaker 4: I genuinely believe we are making the shift to becoming a consistent growth company.

Speaker 3: Third, turbocharge international to accelerate growth and profits. Fourth, continue investing in transforming our supply chain through Project Orbit and automation. Fifth, and last but not least, continue to strengthen the One Newell culture and build on our employee engagement momentum.

Third turbocharge internationally to accelerate growth and profits for continued investing in transforming our supply chain. Some project, albeit on automation first and last but not least continuing to strengthen the one new culture and build on our employee engagement momentum.

Folks it is a new new.

Speaker 4: Folks, it is a new new rule. Our can-do teams delivered over 12% core sales growth and normalized operating profit growth in 2021. In 22, we're committed to rebuilding gross margins and delivering top and bottom line growth despite a tough macro environment. I'd like to express my sincere gratitude to our employees whose grit, hard work, and agility make it possible for us to deliver on our commitments and pivot as needed.

Can new teams delivered over 12% core sales growth and normalized operating profit growth in 2021, and 'twenty. Two we're committed to rebuilding gross margins and delivering top and bottom line growth. Despite a tough macro environment I'd like to express my sincere gratitude to our employees whose.

Grid Hopper and agility make it possible for us to deliver on our commitments and pivot as necessary.

Speaker 4: I continue to believe that Yule's best days are ahead of us and that our focused and deliberate actions will drive sustainable and profitable growth, achieve strong shareholder returns, while being a force for good. Onwards and upwards. And now I'll turn it over to Chris.

Continue to believe that <unk> best days are ahead of us and that are focused and deliberate actions will drive sustainable and profitable growth achieved stronger shareholder returns, while being a force for good onwards, and upwards and now I will turn it over to Chris.

Thank you Ravi and good morning, everyone. The decisive actions we have taken over the past three years as we have executed on Newell's turnaround in combination with strong financial discipline and consumer demand.

Speaker 5: Thank you, Ravi, and good morning, everyone. The decisive actions we have taken over the past three years as we have executed on Newell's turnaround, in combination with strong financial discipline and consumer demand, have driven more effective and agile operations at the company.

Even more effective and agile operations of the company.

This has enabled us to successfully navigate the current environment and deliver full year top and bottom line results that are well ahead of the outlook, we shared a year ago, despite significant escalation in inflation and ongoing challenges across the supply chain that are impacting all companies.

Speaker 5: This has enabled Newell to successfully navigate the current environment and deliver full year top and bottom line results that are well ahead of the outlook we shared a year ago, despite significant escalation in inflation and ongoing challenges across the supply chain that are impacting all companies.

Speaker 5: Before discussing fourth quarter results, let me provide some insights into the operating environment, as we expect many of the dynamics from 2021 to persist in 2022.

Before discussing fourth quarter results, let me provide some insights into the operating environment as we expect many of the dynamics from 2021 to persist in 2022.

In 2021 neural experienced unprecedented inflationary costs, largely driven by resin ocean freight sourced finished goods and labor cost inflation.

Speaker 5: In 2021, Newell experienced unprecedented inflationary costs, largely driven by resin, ocean freight, source-finished goods, and labor costs.

Speaker 5: Inflation accounted for about 9% of cost of goods sold. To mitigate these inflationary headwinds, we accelerated our productivity initiatives, which accounted for close to 4% of cost of goods sold, successfully implemented price increases across each of our business units, with six of our business units communicating several pricing rounds.

Inflation accounted for about 9% of cost of goods sold.

To mitigate these inflationary headwinds, we accelerated our productivity initiatives, which accounted for close to 4% of cost of goods sold successfully implemented price increases across each of our business units with.

With six of our business units communicating several pricing rounds.

Speaker 5: continued to maintain tight cost controls, optimized effectiveness of promotional spend, and leveraged strong top-line trends. While these actions helped mitigate the impact from inflation in 2021, Newell has not yet realized the full benefits from them, particularly as it relates to pricing, which lags inflation.

Continued to maintain tight cost controls optimized effectiveness of promotional spend and leveraged strong topline trends.

These actions helped mitigate the impact from inflation in 2021, <unk> has not yet realized the full benefits from them, particularly as it relates to pricing, which lags inflation.

In addition to the carryover impact from last year's pricing actions each of our business units are implementing further pricing increases in 2022 as we expect this to be another year of high inflation.

Speaker 5: In addition to the carryover impact from last year's pricing actions, each of our business units are implementing further pricing increases in 2022, as we expect this to be another year of high inflation. While prices for some commodities, such as resin, came off their peak, we expect source finished goods, ocean freight, and wages to be major sources of inflation this year.

While prices for some commodities such as resin came off their peak, we expect sourced finished goods ocean freight and wages to be major sources of inflation this year.

Speaker 5: At this point, we forecast inflation to account for about 8% of cost of goods sold in 2022.

At this point, we forecast inflation to account for about 8% of cost of goods sold in 2022 <unk>.

Importantly, we plan to more than offset this through pricing and productivity with gross margin expected to bounce back from 2021 levels.

Speaker 5: Importantly, we plan to more than offset this through pricing and productivity, with gross margin expected to bounce back from 2021 level.

The supply chain backdrop remains challenging and we expect the disruption from longer lead times for source products Port congestion limited container availability as well as shortages in components labor and truck drivers to continue throughout 2022.

Speaker 5: The supply chain backdrop remains challenging and we expect the disruption from longer lead times for source products, port congestion, limited container availability, as well as shortages in components, labor, and truck drivers to continue throughout 2022.

Speaker 5: To deal with this, we continue to implement a number of offsetting measures that enabled us to deliver a $1.2 billion increase in net sales in 2021 and secure supply in constrained markets.

To deal with this we continue to implement a number of offsetting measures that enabled us to deliver a $1 $2 billion increase in net sales in 2021 and secure supply and constrained markets. These.

Speaker 5: These actions include enhancing the forecasting process and extending planning windows to account for longer lead times.

These actions include enhancing the forecasting process and extending planning windows to account for a longer lead times.

Speaker 5: Building an inventory on top-selling and high-priority SKUs, diversifying our supplier base and qualifying alternatives to critical components where possible, accelerating automation across our facilities,

Building inventory on top selling and high priority Skus diversifying our supplier base and qualifying alternatives to critical components, where possible accelerating automation across our facilities.

Speaker 5: diversifying ports of entry through Project AVID, and enhancing compensation benefits, training opportunities, and working conditions for our frontline employees.

<unk> ports of entry through project Ahmed and enhancing compensation benefits training opportunities and working conditions for our frontline employees.

Although we expect supply bottlenecks to persist we remain confident that we are taking the necessary actions to both effectively manage them and create more agility within our supply chain in the future.

Speaker 5: Although we expect supply bottlenecks to persist, we remain confident that we are taking the necessary actions to both effectively manage them and create more agility within our supply chain in the future.

In 2021, we kicked off project off at a major supply chain initiative, which we expect to transform North Dakota market capabilities enhanced customer service levels and drive operational efficiencies we.

Speaker 5: In 2021, we kicked off Project AVID, a major supply chain initiative, which we expect to transform NOOL's go-to-market capabilities, enhance customer service levels, and drive operational efficiency.

We are planning to optimize the Companys distribution network in the U S by consolidating 23 business unit centric supply chains into a single integrated supply chain.

Speaker 5: We are planning to optimize the company's distribution network in the U.S. by consolidating 23 business-unit-centric supply chains into a single integrated supply chain. In 2021, we completed the detailed concept, design, and build phases of the project. The start of this year, we shifted to the testing, refining, and implementation stage, and recently completed the first round of systems integration testing.

In 2021, we completed the detailed concept design and build phases of the project. The start of this year, we shifted to the testing refining and implementation stage and recently completed the first round of systems integration testing.

Speaker 5: I'm very pleased to share that our new distribution center in Newville, Pennsylvania, is on track to start receiving initial shipments in March. This summer, we plan to stand up Newell Brands Distribution Company, which will allow us to accept one order, send one invoice, and receive one payment from customers while shipping our products on one truck. OVID will enhance Newell's supply chain resiliency and agility.

I am very pleased to share that our new distribution center in Newbuild, Pennsylvania is on track to start receiving initial shipments in March.

This summer we plan to standup Newell brands distribution company, which will allow us to accept one order send one invoice and received one payment from customers while shipping our products on one truck.

Avid will enhance <unk> supply chain resiliency and agility.

Speaker 5: As we build operational excellence throughout the organization, it's important to recognize the meaningful progress we've made on the operational front.

As we build operational excellence throughout the organization. It is important to recognize the meaningful progress we've made on the operational front.

Which has considerably simplified our way of working and put us in a stronger position to manage through this challenging environment.

Speaker 5: which has considerably simplified our way of working and put us in a stronger position to manage through this challenging environment. For example, we ended 2021 with about 36,000 SKUs, which represents a 65% reduction from 2018, with plans in place to continue to simplify our SKU portfolio in 2022.

For example, we ended 2021 with about 36000, Skus, which represents a 65% reduction from 2018 with plans in place to continue to simplify our SKU portfolio in 2022.

Speaker 5: We completed another four ERP conversions in 2021 and now expect 95% of Newell's sales to be on two platforms going forward.

We completed another four ERP conversions in 2021, and now expect 95% of normal sales to be on two platforms going forward.

Let me now move to fourth quarter results.

Speaker 5: In Q4, net sales increased 4.3% to $2.8 billion, as core sales grew 5.8% on top of 4.9% a year ago. This was partially offset by unfavorable foreign exchange, as well as business and retail store exits.

Q4, net sales increased four 3% to $2 8 billion.

As core sales grew five 8% on top of four 9% a year ago. This was partially offset by unfavorable foreign exchange as well as business and retail store exits core sales increased <unk> six of eight business units and across every major geographic region on a two year stack basis core sales increased in every business.

Speaker 5: core sales increased in six of eight business units and across every major geographic region. On a two-year stack basis, core sales increased in every business unit.

Sure.

Normalized gross margin contracted 280 basis points year over year to 31% as approximately 700 basis points of inflationary headwind more than offset the contribution from pricing and fuel productivity savings normalized operating margin declined 150 basis points year over year to nine nine <unk>.

Speaker 5: Normalized gross margin contracted 280 basis points year-over-year to 30.1 percent, as approximately 700 basis points of inflationary headwind more than offset the contribution from pricing and fuel productivity savings.

Speaker 5: normalized operating margin declined 150 basis points year over year to 9.9 percent, reflecting the reduction in gross margin, which was partially offset by SG&A cost leverage.

Reflecting the reduction in gross margin, which was partially offset by SG&A cost leverage.

Speaker 5: Net interest expense came down by $10 million year-over-year to $59 million due to debt paydown.

Net interest expense came down by $10 million year over year to $59 million due to debt paydown the.

The normalized tax rate of 17, 4% was significantly above last year's tax benefit of two 6% due to a lower contribution from discrete items.

Speaker 5: The normalized tax rate of 17.4% was significantly above last year's tax benefit of 2.6% due to a lower contribution from discrete items.

Speaker 5: Normalized diluted earnings per share came in at $0.42 versus $0.56 a year ago, with the tax rate difference representing an $0.11 delta.

Normalized diluted earnings per share came in at 42 versus <unk> 56, a year ago with the tax rate difference, representing an 11 delta.

Speaker 5: Normalized diluted EPS exceeded our outlook on stronger top line tighter control over expenses and a slightly lower than anticipated tax

Normalized diluted EPS exceeded our outlook on stronger topline tighter control over expenses and a slightly lower than anticipated tax rate.

Speaker 5: Turning to segment performance, core sales for the commercial solution segment increased 1.7% against a very difficult year ago comparison of 13.8% with both commercial and connected home and security business units up relative to a year ago.

Turning to segment performance core sales for the commercial solutions segment increased one 7% against a very difficult year ago comparison of 13, 8% with both commercial and connected home and security business units up relative to year ago.

Speaker 5: Core sales for home appliances grew 5.6% on top of mid-single-digit growth in the prior year, reflecting strong performance in both North America and Latin America.

Core sales for home appliances grew five 6% on top of mid single digit growth in the prior year, reflecting strong performance in both North America and Latin America.

Core sales for the home solutions segment increased three 2%.

Speaker 5: Core sales for the home solution segment increased 3.2%, lapping a difficult low double-digit comp.

Wrapping a difficult low double digit comp strong growth in home fragrance, particularly in Yankee candle retail stores and in the EMEA region, offset a slight decline in food, which faced a tough comp.

Speaker 5: strong growth in home fragrance, particularly in Yankee Candle retail stores and in the EMEA region, offset a slight decline in food, which faced a tough comp.

Core sales for the learning and development segment grew five 3% as double digit growth in writing, which continued to rebound was offset by a decline in the baby business, which lapped its toughest comparison of the year.

Speaker 5: Core sales for the learning and development segment grew 5.3% as double-digit growth in writing, which continued to rebound, was offset by a decline in the baby business, which lapped its toughest comparison of the year.

Speaker 5: Core sales in the outdoor and rec segment increased 23.9% versus last year on very strong consumption in the quarter and in improving supply chain situation with broad-based strength across all regions.

Core sales in the outdoor and Rec segment increased 23, 9% versus last year on very strong consumption in the quarter and an improving supply chain situation with broad based strength across all regions.

Speaker 5: In 2021, Newell generated operating cash flow of $884 million, below our outlook of about a billion dollars. As a result of the aforementioned challenges across the supply chain and strong consumer demand for our products, we decided to strategically build inventories on top-selling SKUs.

In 2021, Newell generated operating cash flow of $884 million below our outlook of about $1 billion. As a result of the aforementioned challenges across the supply chain and strong consumer demand for our products, we decided to strategically build inventories on top selling skus.

While the temporary investment in inventory resulted in a miss to our forecast on cash.

Speaker 5: While the temporary investment in inventory resulted in a miss to our forecast on cash, we believe it was prudent as it puts the company in a much better position to service customers and meet consumer demand going forward. Despite the temporary increase in inventory, we improved the cash conversion cycle by another four days versus a year ago.

We believe it was prudent as it puts the company in a much better position to service customers and meet consumer demand going forward <unk>.

Despite the temporary increase in inventory, we improved the cash conversion cycle by another four days versus year ago.

Through our proactive deleveraging efforts the company's balance sheet is significantly stronger today than several years ago <unk> leverage ratio came down to three <unk> times at the end of 2021 from three five times, a year ago, reflecting a $721 million reduction in gross debt during the year as <unk>.

Speaker 5: Through our proactive deleveraging efforts, the company's balance sheet is significantly stronger today than several years ago. Newell's leverage ratio came down to 3.0 times at the end of 2021 from 3.5 times a year ago, reflecting a $721 million reduction in gross debt during the year, as well as about 11.5% growth in normalized EBITDA.

Well as about 11, 5% growth in normalized EBITDA.

Speaker 5: Before going into the outlooks for full year 2022 in Q1, I'd like to provide some context for the forecast and discuss the connected home and security transaction.

Before going into the outlooks for full year 2022 in Q1, I'd like to provide some context for the forecast and discuss the connected home and security transaction.

Our planning stance is that the divestiture will be completed at the end of the first quarter. So that Q1 results still include the contribution from this business.

Speaker 5: Our planning stance is that the divestiture will be completed at the end of the first quarter so that Q1 results still include the contribution from this business.

Speaker 5: core sales outlooks for both Q1 and full year exclude CH&S.

Core sales outlooks for both Q1 and full year excludes CHS.

The company expects to use after tax proceeds to both repay debt and buy back shares with the goal of maintaining Newell's current leverage ratio considering.

Speaker 5: The company expects to use after-tax proceeds to both repay debt and buy back shares with the goal of maintaining Newell's current leverage ratio. Considering the anticipated use of proceeds, the divestiture is expected to have an approximately neutral impact on the company's normalized earnings per share in 2022.

Considering the anticipated use of proceeds the divestitures is expected to have an approximately neutral impact on the company's normalized earnings per share in 2022.

We are entering 2022 from a position of strength, we've seen healthy topline momentum early in the year and are encouraged by the quality of our innovation funnel, although consumer behavior will continue to evolve as mobility improves and government stimulus has lapped we think many of the recent habits will persist even as.

Speaker 5: We are entering 2022 from a position of strength. We've seen healthy top line momentum early in the year and are encouraged by the quality of our innovation funnel. Although consumer behavior will continue to evolve as mobility improves and government stimulus is lapped, we think many of the recent habits will persist even as some categories continue to normalize.

Sub categories continued to normalize.

We are assuming a moderate level of volume elasticity from price increases, although thus far we have not seen much of an impact on the cost side, we expect inflation to remain elevated, albeit slightly below 2021 levels. We also.

Speaker 5: We are assuming a moderate level of volume elasticity from price increases, although thus far we have not seen much of an impact. On the cost side, we expect inflation to remain elevated, albeit slightly below 2021 levels.

Speaker 5: We also anticipate continuation of the supply chain challenges that plagued the industry throughout 2021. As previously discussed, we have mitigating actions in place to address both inflationary and supply-related dynamics.

Dissipate continuation of the supply chain challenges that plagued the industry throughout 2021.

As previously discussed we are mitigating actions in place to address both inflationary and supply related dynamics.

Speaker 5: We will maintain disciplined cost and cash management throughout the year and continue to build operational excellence as we accelerate automation and move into the implementation stage of OVIT.

We will maintain disciplined cost and cash management throughout the year and continue to build operational excellence as we accelerate automation and move into the implementation stage of Aman.

Speaker 5: For full year 2022, we are forecasting net sales of $9.93 to $10.13 billion as compared to $10.59 billion in 2021. This outlook assumes core sales are flat to up 2% and a more than 6% headwind from the sale of the CH&S business, exits from low-margin categories, particularly in the outdoor and rec and home appliance businesses.

For full year 2022, we are forecasting net sales of $9 93 to $10, one 3 billion as compared to $10 $5 9 billion.

2021.

Outlook assumes core sales are flat to up 2% and our more than 6% headwind from the sale of the CHS business.

Exit from low margin categories, particularly in the outdoor and rec and home appliance businesses.

Speaker 5: closure of some Yankee Candle retail stores, as well as unfavorable currency.

<unk> have some Yankee candle retail stores as well as unfavorable currency.

We expect normalized operating margin to expand about 50 to 80 basis points versus last year to 10, five to 11, 5% to 11, 8% ahead of our evergreen target.

Speaker 5: We expect normalized operating margin to expand about 50 to 80 basis points versus last year to 10.5 or to 11.5 to 11.8% ahead of our evergreen target. This outlook assumes that pricing along with productivity and mix optimization actions more than offset a roughly 500 basis point headwind from inflation, as well as higher investment in advertising and promotion.

This outlook assumes that pricing along with productivity and mix optimization actions more than offset a roughly 500 basis point headwind from inflation as well as higher investment in advertising and promotion spending.

For 2022, we are forecasting normalized earnings per share of $1 85 to $1 93 versus $1 82 in 2021, reflecting a mid teens normalized effective tax rate and a 1% to 2% reduction in diluted shares outstanding as we deploy deal proceeds.

Speaker 5: For 2022, we are forecasting normalized earnings per share of $1.85 to $1.93 versus $1.82 in 2021, reflecting a mid-teens normalized effective tax rate and a 1-2% reduction in diluted shares outstanding as we deploy deal proceeds.

Speaker 5: We are budgeting for operating cash flow in the $800 million to $850 million range, which includes the year-over-year headwind from the loss of profits on CH&S once the divestiture is completed, and one-time cash tax payment on this transaction.

We are budgeting for operating cash flow in the $800 million to $850 million range, which includes the year over year headwind from the loss of profits on CHS. Once the divestiture is completed.

And one time cash tax payment on this transaction.

We expect to continue to improve <unk> cash conversion cycle with a particular focus on drawing down on the strategic inventory build in 2021.

Speaker 5: We expect to continue to improve Newell's cash conversion cycle with a particular focus on drawing down on the Strategic Inventory Build in 2021.

Capital expenditures for 2022, our estimated around $350 million above normal levels due to onetime capital costs supporting infrastructure build for project all of it.

Speaker 5: Capital expenditures for 2022 are estimated around $350 million above normal levels due to one-time capital costs supporting infrastructure bill for Project OVID.

Speaker 5: For Q1, our outlook assumes net sales of $2.25 to $2.3 billion as core sales growth of 2% to 4% is offset by a 3% to 4% unfavorable impact from currency, exits from low margin categories, and closure of some Yankee Candle retail stores.

For Q1, our outlook assumes net sales of 225 to $2 3 billion as core sales growth of 2% to 4% is offset by a 3% to 4% unfavorable impact from currency.

That's from low margin categories and closure of some Yankee candle retail stores do.

Speaker 5: Due to external dynamics, some retailers have accelerated their orders on seasonal merchandise into Q1, which is reflected in this outlook.

Due to external dynamics, some retailers have accelerated their orders on seasonal merchandise into Q1, which is reflected in this outlook.

We are forecasting normalized operating margin of eight 9% to nine 3% as compared to 10, 1% in the year ago period.

Speaker 5: We are forecasting normalized operating margin of 8.9% to 9.3% as compared to 10.1% in the year ago period. Although in Q1 inflation is still expected to exceed pricing and productivity, the gap is much narrower than Q4 2021, and we expect operating margin performance to turn positive in Q2 2022.

Although in Q1 inflation is still expected to exceed pricing and productivity. The gap is much narrower than Q4, 2021, and we expect operating margin performance to turn positive in Q2 2022.

Our Q1 outlook assumes a normalized effective tax rate in the low 20% range and normalized earnings per share in the 26% to 28% range.

Speaker 5: Our Q1 outlook assumes a normalized effective tax rate in the low 20% range and normalized earnings per share in the 26 to 28 cent range.

Speaker 5: We have driven significant progress over the past several years and continue to see tremendous opportunity for value creation ahead. We believe Knoll is a much stronger company today and better equipped to successfully navigate the external dynamics with a focus on driving sustainable and profitable growth. Operator, let's now open the call for Q&A.

We have driven significant progress over the past several years and continue to see tremendous opportunity for value creation ahead. We believe <unk> is a much stronger company today.

And better equipped to successfully navigate the external dynamics with a focus on driving sustainable and profitable growth operator, let's now open the call for Q&A.

Speaker 1: Thank you, and if you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. Again, that is star 1 to enter the queue for questions.

Thank you and if you'd like to ask a question. Please signal by pressing star one on your telephone keypad again that is star one to enter the queue for questions.

We will now take our first question from Peter Grom of UBS. Please go ahead.

Speaker 1: We will now take our first question from Peter Grom of UBS, please go ahead.

Hey, good morning, everyone and I hope Youre doing well, so I kind of just wanted to ask around the comfort.

Speaker 6: Hey, good morning everyone and I hope you're doing well. So.

Speaker 6: I kind of just wanted to ask around the comfort or, you know, around the core sales guidance for the year, there just seems to be.

Around the core sales guidance for the year, there just seems to be a lot of uncertainty out there around price elasticity pull forward of demand across many of your categories and kind of what the health of the consumer looks like as we lap stimulus in the coming weeks here. So.

Speaker 6: you know, a lot of uncertainty out there around price elasticity, you know, pull forward of demand across many of your categories and kind of what the health of the consumer looks like as we last stimulus in the coming weeks here. So, you know, what gives you confidence around delivering growth against these tough comps given the uncertainty that lies ahead? And I guess, you know, is there enough flex in the range should things deteriorate from here that this, you know, core sales outlook would still be achievable?

What gives you confidence around delivering growth against these tough comps given the uncertainty that lies ahead and I guess is there enough flex in the range should things deteriorate from here the core sales outlook would still be achievable.

So Peter good morning, and happy new year.

Speaker 3: So Peter, good morning and happy new year, both Chinese and regular.

But China <unk> regular.

So.

Speaker 7: Um, what I would say is, yes, we had 12 and a half percent.

What I would say is yes, we had 12, 5%.

Speaker 7: growth in 21, which is quite awesome. And when you look at the top end of our range, it's, say, 2% or so. We're talking a stack growth of nearly 15, and then against 19, about 14, against 20, about 14%. So yeah, it is definitely high numbers. But look, here's the thing.

Both in 'twenty one enriches.

Quiet awesome and when you look at the top end of our range, let's say, 2% or so we're talking a stacked growth of nearly 15 and then against.

19 about 14.

Again spending about 14% so yes it is.

Definitely high numbers, but Crockett Reese.

Speaker 7: We strongly believe we've turned the corner to becoming a sustainable growth company. The strength of our brands is, I think, quite high. We've got robust innovation pipelines. And then when you look at the full year 21.

We strongly believe we have turned the corner to becoming a sustainable growth company. The strength of brands is I think quite high.

We've got robust innovation pipelines and then when you look at the full year 'twenty one.

Speaker 7: our consumption levels were pretty high. We're also gaining market share.

Our consumption levels.

Pretty high we're all.

Also gaining market share. So when you look at that and then we had some supply challenges I think some of those will get mitigated not all but some.

Speaker 4: So when you look at that, and then we had some supply challenges, I think some of those will get mitigated, not all, but some. And so when you look at all of that, we feel pretty comfortable. The other thing is, there are certain consumer behaviors.

And so when you look at all of that.

We feel pretty comfortable the other thing is there are certain consumer behavior is that started in after the pandemic that we believe it will continue so on one hand you have.

Speaker 7: That started in after the pandemic that we believe will continue. So on one hand, you have homeless.

<unk> hub.

Speaker 7: And the hybrid work environment, I think, is here to say most companies, I think, are adopting like a flex schedule three to three weeks, three days a week or so. So that means in-home cooking will continue. And so I do think that is a positive. And then on the writing business.

And the hybrid work environment I think is here to say most companies I think are adopting like a flight schedule III two three.

<unk> three days a week or so so that means in home cooking will continue and so I do think that as a positive and then on the writing business.

Speaker 4: On the other hand, even though the opposite side, which is the hybrid, at least people are going back, that will help us to bring some growth on the commercial channel.

And the other hand, even though the opposite side, which is the hybrid at least people are going back that will help us to bring some growth on the commercial channel than the other business I'd point out is outdoor which we were really struggling in the past that.

Speaker 7: Then the other business I point out is outdoor, which we were really struggling in the past.

Speaker 4: The team has really done a remarkable job of moving forward. Our Coleman brand is sort of back to its iconic days with this lifestyle positioning. And the fact that we grew almost 25% in fourth quarter, which is not the steeply high business, is just, I think, terrific. The Contigo and Bubba businesses in beverage are doing very well. So when I look at all of that,

The team has really done.

A remarkable job of moving forward, our Goldman brand is sort of back to its iconic days this lifestyle positioning and the fact that we grew almost 25% in fourth quarter, which is not the seasonally high business is just terrific.

Contigo and Bubba businesses in beverage are doing very well.

Look at all of that.

Speaker 7: I think the only places where there are two businesses which there was some, I think, forward acceleration from both consumers and customers, which would be appliances.

I think the only places where that two two businesses, which there was some I think forward acceleration.

From both consumers and customers, which would be appliances and so there were more muted and then of course baby really had a breakout year last year because of the stimulus. So I think those two will be a bit softer.

Speaker 7: And so there we are more muted. And then, of course, baby really had a breakout here last year because of the stimulus.

Speaker 7: So I think those will be a bit softer. So but other businesses, I feel very good. And look on the candle business, the consumption was just incredible with this whole tranquility thing. So that may be a bit more muted, but we're launching so many innovations and expanding geographically. And that's another thing you should look at as my final comment.

So, but other businesses I feel very good and look on the camera business. The consumption was just incredible with this whole tranquility thing so that may be a bit more muted, but we're launching so many innovations and expanding geographically and thats. Another thing you should look at as my final comment.

Speaker 7: We're turbocharging international, so that should help the growth. So look, I feel pretty comfortable with our stance. If anything, I'm hoping that there is some upside.

Turbocharging International so that should help the growth setup I feel pretty comfortable with our stance.

If anything I am hoping that there is some upside.

Peter I would just add one comment which is.

Speaker 5: And I've alluded to it in the prepared remarks, which is we are expecting a significant impact from pricing in our top line this year in 22, and we have assumed that there is volume elasticity. So we've assumed that, you know, because of the pricing, that volume is going to be down.

And I alluded to it in the prepared remarks, which is.

We are expecting a significant impact from pricing and our top line.

This year in 'twenty, two and we have assumed.

There is volume elasticity, so we've assumed that because of the pricing that volume is going to be down.

Speaker 5: We haven't seen that so far and so you know I think that also gives us comfort that our guidance we view is prudent and not something that

We haven't seen that so far.

So I think that also gives us comfort that our guidance, we view as prudent.

And not something that.

As likely that.

Speaker 5: uh... is is likely that uh... uh... you know is is uh... is very aggressive

It.

As is very aggressive.

Thanks for that and I'll pass it on.

We will take our next question from Kevin Grundy of Jefferies. Please go ahead.

Speaker 1: We'll take our next question from Kevin Grundy of Jeffries, please go ahead.

Great. Thanks, Good morning, everyone and congratulations on a strong year, particularly in this environment.

Speaker 8: Great, thanks. Good morning, everyone, and congratulations on a strong year, particularly in this environment. Question for Ravi, just on satisfaction with the portfolio, you know, the organization obviously went through a period of

Question for Ravi just on satisfaction with the portfolio. The organization, obviously went through a period of great change and went from a $16 billion company post the merger roughly half of that was.

Speaker 8: Great change. You went from a $16 billion company post the merger. Roughly half of that was divested through a period of sort of a fire sale period, almost, if you will. You came in, you and Chris have done a great job of sort of mending the culture and stabilizing the portfolio. So, you know, the divestiture is sort of noteworthy, I think, within that context of the home security business. So can you just comment overall on your level of satisfaction with the portfolio as it stands? Should we expect further divestitures? What's kind of the role in M&A?

Divested through.

Period, as sort of a fire sale period, almost if you will you came in you and Chris has done a great job sort of amending the culture and stabilizing the portfolio. So.

The divestitures sort of noteworthy I think within that context of the home security business. So can you just comment overall on your level of satisfaction with the portfolio as it stands should we expect further divestitures, what's kind of the role in M&A and then Chris I have to ask to just sort of the role of buybacks and share repurchases here and how you are sort of weighing that relative to M&A.

Speaker 8: And then, Chris, I have to ask, too, just sort of the role of buybacks and share repurchases here and how you're sort of weighing that relative to M&A as you sort of look at the portfolio more broadly. And then I have a quick follow-up.

As you sort of look at the portfolio more broadly and then I have a quick follow up thank you.

Great.

Speaker 7: Right. Let me start and then Chris can address a buyback question.

Let me start and then Chris can address.

The address the buyback question.

Overall I am.

Speaker 4: I think we've got a really resilient and good portfolio.

I think we've got a really resilient portfolio.

Speaker 4: And the good news about this portfolio is that they feed off of each other, but we've got like.

And the good news about this portfolio is.

That they feed off of each other but.

We've got like think about cyber training.

Speaker 3: Think about summer training, when the pandemic hit, the food business and commercial business really grew.

The pandemic hit the food business and commercial business scaling grew.

Speaker 4: and as did appliances, and writing suffered because of all the school closures. 21, you've seen writing have a blockbuster year, food and commercial a bit more muted. So I think this portfolio where each business helps the other out, and our aim is that all our businesses grow, they may just grow at different levels.

<unk>.

Appliances.

And writing suffer because of all the school approaches trading one <unk> seen writing.

Blockbuster yet food.

<unk> and commercial a bit more muted. So I think this portfolio, where each business helps the other out and our aim is that all of our businesses grow they may just grow at different levels.

Second we went through a strategic planning process and classified our businesses into three buckets.

Speaker 7: Second, we went through a strategic planning process.

Speaker 7: and classified our businesses into three buckets. First being the value accelerator growth engines and those for food, home fragrances, and riding. And clearly those are the businesses that we have higher gross margins.

Buckets first being the value accelerates our growth engines and those.

Food home fragrances, and writing and clearly those are the businesses that we have higher gross margins very satisfied with that and the innovation funnel on all of those businesses is very robust. So feel very good. The second was we had said baby.

Speaker 4: very satisfied with that and the innovation funnel on all of those businesses is very robust, so feel very good. The second was we had said Baby and CH&S, which are sort of solid and commercial, which are solid businesses, steady-eddy businesses.

<unk>, which are subtle solid and commercial which are solid businesses steady Eddy businesses.

And.

Speaker 7: So in that CH&S, the issue for us there was, it was really not core and didn't connect with the rest of the businesses, but a solid business nevertheless. So we just felt, look, that, hey, divesting that was, we had always said, we'll look at tuck-in acquisitions and tuck-out divestitures. And so we decided to do that. But we're a very happy commercial business.

So in that CHS the issue for US there was it was really not core and didn't connect with the rest of the businesses, but solid business. Nevertheless, so we just felt block that hey, divesting that was we had already said, we'll look at tuck in acquisitions and divestitures.

And so we decided to do that but we're very happy commercial business I really think it has got tremendous potential in the long term as this baby So and then outdoor and appliances. These for a couple of businesses, but the teams have done a marvelous job and we've identified hey, what is the.

Speaker 7: I really think it has got tremendous potential in the long term, as does Bailey.

Speaker 4: So, and then outdoor and appliances, these for our troubled business.

Speaker 4: but the teams have done a marvelous job. And we've identified, hey, what is the big issue on these businesses? It's all about.

The big issue on these businesses.

It's all about gross margins.

Speaker 7: And so it's a tale of two cities in both those businesses, U.S. versus international. International, both outdoor and apart.

And so it's a tale of two cities in both both of those businesses U S versus international International both outdoor and appliances flourish that is a huge gap between gross margins. So our job is how do we improve and thats because the brands are a lot stronger, but I think the teams are now really.

Speaker 7: There is a huge gap between growth margins. So our job is how do we improve? And that's because the brands are a lot stronger. But I think the teams are now really doing some real good work.

Doing some real good work that you are seeing I was a little concerned about appliances in October and I started and both teams in this year outdoor has really lived up to my expectations. So I would say overall I feel very good about this portfolio and we.

Speaker 7: As you've seen, I was a little concerned about appliances and outdoor when I started.

Speaker 4: and both teams and this year outdoor has really lived up to my expectations.

Speaker 7: So I would say overall, I feel very good about this portfolio.

Speaker 7: And we think we've got enough juice here to really continue to drive.

We think we've got enough juice here to really continue to drive shareholder value. So with that and then look we'll always look at tuck in acquisitions.

Speaker 4: So with that, and then look, we'll always look at tuck-in acquisitions as we, with especially our top tier. It'll be more on, are there some complementary businesses? But I think we're just, you know, those are going to be small and we'll wait for the appropriate time. There's, we've got plenty of great brands to work on internally before we go on the acquisition machine.

As we are.

Especially our top tier it'll be more on are there some complementary businesses, but I think we are.

Those are going to be small in.

We'll wait for the appropriate time, there's we've got plenty of great brands to work on internally before we go on the acquisition machine.

Just on the capital allocation question I think our stance on capital allocation remains.

Speaker 5: Yeah, just on the capital allocation question, I think our stance on capital allocation remains consistent, which is, we think we've got significant opportunity to drive continued strong operating cash flow, because we continue to see opportunity to reduce the cash conversion cycle of the company. With that operating cash flow, our first priority is to invest in the business where we see strong opportunities to drive high returns.

Consistent which is we think we've got significant opportunity to drive continued strong operating cash flow because we continue to see opportunity to reduce the cash conversion cycle of the company with that operating cash flow. Our first priority is to invest in the business, where we see strong.

Opportunities to drive high returns.

Speaker 5: Beyond that, we expect to pay the dividend and maintain the dividend at the current level for the foreseeable future, and then beyond that, I think that's where we get into share repurchase.

And that we expect to pay the dividend and maintain the dividend at the current level for the foreseeable future and then beyond that I think that's where we get into share repurchase.

Speaker 5: and or tuck-in acquisition. I think you'll see share repurchase feature more prominently in the near term versus tuck-in acquisition. And the other comment that I would make is

And <unk> tuck in acquisition I think youll see share repurchase feature more prominently in the near term versus tuck in acquisition.

And the other comment that I would make is.

Speaker 5: We also think that after having paid down $721 million of debt last year, and after we finish the allocation of proceeds from CH&S, we think our level of gross debt will remain consistent, and we'll start to move into share repurchase going forward.

We also think that after having paid down $721 million of debt last year.

And with after we finish the allocation of proceeds from CHS, we think our level of gross debt will remain consistent and we will start to move into share repurchase going forward.

<unk>.

<unk>.

Speaker 5: and get our net debt to EBITDA leverage ratio from the 3.0 down to the 2.5 long-term target through EBITDA growth rather than debt reduction.

And get our net debt to EBITDA leverage ratio from the three point down.

Down to the $2 five long term target through EBITDA growth rather than.

Debt reduction.

Makes sense, if I could just slip one more because I think it's important to run the long term margin opportunity, Chris you've spoken a lot about this and your team has done a good job.

Speaker 8: Makes sense, good to hear. If I could just flip in one more, because I think it's important around the long-term margin opportunity. Chris, you've spoken a lot about this and your team has done a good job.

Speaker 8: And so, you know, kind of taking a step back, understanding the volatility of the environment we were in last year that we're still in this year, you know, there's an opportunity for margins here to be, keep it down margin 17, 18% versus 13% now. How big of a priority is that for the organization? What's the timeline you think you can achieve it? You know, assuming we sort of get to sort of a more steady state in the environment looking out to next year, and how are you sort of balancing that with strategic investment and top line growth? So thank you for that. I'll pass it on.

So kind of taking a step back understanding the volatility of the environment were in last year that were still in this year. There is an opportunity for margins to be EBITDA margin 17, 18% versus 13% now how big of a priority is that for the organization.

Whats the timeline you think you can achieve it.

Assuming we sort of get to sort of a more steady state in the environment looking out to next year, and how you're sort of balancing that with strategic investment in top line growth. So thank you for that I'll pass it on.

Yes, so I would say, we see that opportunity. It is a major focus of the company and the organization.

Speaker 5: Yeah, so I would say we we see that opportunity. It is a major focus of the company and the organization. You know, we've done a couple of things. We've changed the company's compensation system this year to bonus business units on gross margin in addition to top line growth and operating income to put a more more specific focus on it.

We've done a couple of things we've changed the company's compensation system this year too.

Two bonus business units on gross margin. In addition to top line growth and operating income to put a more a more specific focus on it.

Speaker 5: You've seen a lot of the actions we're taking, whether it's skew count reduction, whether it's the comments Ravi made around margin accretive innovation. The low margin category exits are all designed to drive the company's margin up. We also are continuing to aggressively go after overhead. We've taken the company's overhead rate down by, I think, 450 basis points from 2018 to where we ended this year.

You've seen a lot of the actions, we're taking whether it's SKU count reduction whether it's the comments Ravi made around margin accretive innovation.

The low margin category exits are all designed to drive the company's margin up.

We also are continuing to aggressively go after overhead we've taken the company's overhead rate down by I think 450 basis points from 2018 to where we ended this year.

Speaker 5: And we still see opportunity ahead of us there. So we think margin improvement is a major source of opportunity for the company for the next three to five year period at a minimum.

And and we still see opportunity ahead of us there so.

We think margin improvement as a as a major source of opportunity for the company.

For the for the next three to five year period at a minimum.

But I don't see.

Top line growth versus margin improvement is being either or we have to walk and chew gum at the same time and our teams realize that and the key is it kind of just the growth for the sake of growth. It really has to be profitable growth and thats. What we have emphasized to all our VP of marketing and is putting the gross margin and <unk>.

Speaker 4: top-line growth versus margin improvement as being either-or. We have to walk and chew gum at the same time, and our teams realize that. The key is, it can't just be growth for the sake of growth. It really has to be profitable growth. That's what we've emphasized to all our VPs of marketing and this putting the gross margin in. If there's one focus in this company right now, if there's one word you ask people, it is gross margin. That's great to hear.

If there's one focus in this company right now if theres, one where do you ask people. It is gross margin.

That's great to hear thank you both good luck.

We will take our next question from Lauren Lieberman with Barclays. Please go ahead.

Speaker 1: We'll take our next question from Lauren Lieberman of Barclays. Please go ahead.

Great. Thanks, good morning.

Speaker 9: I was curious, I was really overwhelmed when you were running through, Chris, all the progress made on Ovid over the last six plus, I guess, six to 12 months, and it just kind of struck for me because I think productivity in general has been an area that companies have really, whether it's struggled with, you know, or...

I was curious I was really overwhelmed when you were running through all of the progress made on all of it.

Over the last six plus I guess six to 12 months.

And it just kind of struck for me because I think productivity in general has been an area that companies have really.

Whether it's struggled with or.

Speaker 9: had to take a step back from in order to just focus on, you know, making product and getting it from point A to point B. So I was curious if you could comment a bit, I guess, on how it is that you've been able to make so much progress. Same goes for the productivity in the quarter itself. And as you look out over 22, I mean, what's the risk that focusing

Had to take a step back from in order to just focus on making product and getting it from point a to point B. Just curious if you could comment a bit I guess on how it is that you've been able to make so much progress.

Same goes for the productivity in the quarter itself and as you look out over 2002, I mean, what's the risk that focusing on these.

Speaker 9: you know, very important operational changes for the long term.

Very important operational changes for the long term.

Speaker 9: um you know sort of divert attention from from the here and now you know and just again this this necessity to you know keep up with um with with the current the current pace of play given all the the challenges coming at you thanks

And sort of diverted attention from the here and now and just again this necessity til.

Keep up with that with the current the current peso play given all the challenges coming at you.

Yeah. Thanks, Lauren So I'll just make a couple of I'll give you a couple of thoughts I think one of the things that we did as part of the turnaround plan when we put it in place back in at the beginning of 2019 is we really wanted to go after productivity and we knew that we needed to change the culture to truck to try to.

Speaker 5: Yep, thanks, Lauren. So I'll just make a couple of or give you a couple of thoughts. I think one of the things that we did as part of the turnaround plan, when we put it in place back in at the beginning of 2019, is we really wanted to go after productivity. And we knew that we needed to change the culture to try to unlock the productivity and change the culture in a way that that we enabled ideas from the bottom up.

Unlock the productivity and change the culture and the way that we enabled ideas from the bottom up.

Speaker 5: And so we went through this journey that we internally call peak, where we effectively have enabled people throughout the organization to come with productivity initiatives. So when we look at the productivity savings from last year of 4% of cost of goods sold in 21, that is a remarkable achievement, but it comprises probably 2,000 or 2,500 different projects.

And so we went through this journey that we internally call peak, where we effectively have enabled people throughout the organization to come with productivity initiatives. So when we look at the productivity savings from last year of 4% of cost of goods sold in 'twenty one.

That is a remarkable achievement, but it comprises probably 2000 or 2500 different projects and it's important that in.

Speaker 5: And it's important that, and it's not one thing that's driving it, it's the people, the person who's running a factory line, who knows the factory line better than others, is coming with an idea. And we've created a culture now that encourages that person to come with an idea and then enables us to act on it at pace.

It's not one thing thats driving it its the people the person who is running a factory line, who knows the factory line better than others.

Is coming with an idea and we've created a culture now that that encourages that person to come with an idea and then enables us to act on it.

At pace and so it is a broad program that's embedded in the culture throughout the organization and I think that's what's enabled us to sustain it.

Speaker 5: and so it's a broad program that's embedded in the culture throughout the organization and I think that's what's enabled us to sustain it.

Speaker 5: To your point, for 2022, I would mention that we are seeing, in our plan, we have assumed a little bit of a step back in 22 on productivity, and let me describe that. We think on manufacturing and distribution productivity, we're going to have another very strong year. We think on...

To your point.

For 2022, I would mention that we are seeing in our in our plan, we have assumed a little bit of a step back in 'twenty two on productivity.

Let me describe that we think about manufacturing and distribution productivity, we're going to have another very strong year, we think on.

Speaker 5: on what we call value-add, value-engineering of products, we're going to have a very strong year in line with the last few years. But on the sourcing side, our plan assumes that we have a little bit below average here because of the inflationary pressure. It's unlikely that we're going to be able to drive as much cost reduction from suppliers because of the inflation that they're fearing.

On what we call value add value engineering, our products, we're going to have in a very strong year in line with the last few years, but on the sourcing side.

Our plan assumes that we have a little bit below average year because of the inflationary pressure, it's unlikely that we're going to be able to drive as much cost reduction from suppliers because of the inflation that they're feeling and so what we're doing instead is we're pivoted to this is the year of implementation of it.

Speaker 5: feeling. And so what we're doing instead is we're pivoted to this is the year of implementation on OVID. And we think that that will set us up to then bounce back with another very strong productivity year in 2023.

And we think that that will set us up to then bounce back with another very strong productivity year in 2023.

Relative to Ahmed itself.

Speaker 5: Relative to OVID itself,

We are being very prudent in our approach.

Speaker 5: We are being very prudent in our approach. We've got an incredibly robust testing program. I mentioned that we completed in the month of January our systems integration testing, which went very well. We've got our first distribution center, new distribution center starting up at the beginning of March to receive product. We already have product that's on the water from China now being shipped to the East coast for the first time.

We've got an incredibly robust testing program I mentioned that we completed in.

In the month of January our systems integration testing, which went very well.

Our first distribution center, new distribution centers, starting up at the beginning of March to receive product we already have product that's on the water from China.

Now being shipped to the east coast for the first time.

So.

Speaker 5: When we look at that, we actually think it's going to enable us to navigate the current supply environment better, and I'll just give you one example.

When we look at that we actually think it's going to enable us to navigate the current supply environment better and I'll just give you. One example.

Speaker 5: Last year, we shipped 80% of our imports from Asia shipped through LA and Long Beach.

Last year, we shipped 80% of our imports from Asia shipped through La and long Beach.

Speaker 5: Once we get fully into the OVID model, we're going to be 50-50 between the West Coast and the East Coast. So our ability to navigate.

Once we get fully into the AMA model, we're going to be 50, 50 between the west coast and the east coast, So our ability to navigate.

Speaker 5: different ports of entry, and move product to the ports that are most equipped to receive our product is going to go up substantially.

Different ports of entry and move product to the ports that are most.

Equipped to receive our product is going to go up substantially. We also are going to move as I mentioned previously from less than truckload shipments to full truckload shipments and it is much easier to secure a full truck delivery than our less than truckload delivery.

Speaker 5: We also are going to move, as I mentioned previously, from less-than-truckload shipments to full-truckload shipments, and it is much easier to secure a full-truck delivery than a less-than-truckload delivery in the current environment.

In the current environment, So we think that.

Speaker 5: Uh, we're being rigorous on the testing. We think as we move into the new model, it actually systemically makes things easier for us to navigate.

We're being rigorous on the testing we think as we move into the new AMA model. It actually systemically makes things easier for us to navigate.

Speaker 4: I'll just add one thing, Lauren, which is sort of stepping back, really to see change in the company.

I'll just add one thing.

And which is sort of stepping back really the sea change in the company.

Speaker 4: which is enabling us to really walk and chew gum at the same time, regardless of which area.

Which is enabling us to really walk and chew gum at the same time, regardless of which have yet.

Is that the culture, we have ignited the passion of our people and when you look at the score like 75.

Speaker 4: is that the culture we have ignited the passion of our people and when you look at a score like 75 and uh on engagement

Sure.

On engagement.

Speaker 4: And it came up, I mean, it used to be a few years ago, about like 45, and when you look at our frontline workers, their engagement was actually at 78, which is pretty incredible in this environment. And so what's really happening in this company, our hybrid structure, and creating alignment against the vision of what we're trying to do.

And it came up I mean, it used to be.

Yes ago by like 45.

And when you look at our frontline workers their engagement was actually it's heaven Ta, which is pretty incredible in this environment and.

So what's really happening in this company on a hybrid structure.

<unk>.

Creating alignment against the vision of what we're trying to do empowering.

Speaker 4: On the front side, with consumers for the business units, on the back unifying, we have 600 people involved in ARBIT for instance.

On the front side with consumers for the business units on the back of unifying.

We have <unk>.

600 people involved it Amit for instance.

And laser focus on execution.

Speaker 4: and laser focus on execution. I think that those are the things, because you asked the question, hey, how do you also do the day-to-day? I think we just have to do these things, and the secret sauce is our people and our leadership teams that are driving this.

Those are the things because you asked the question Hey, how do you also do the day to day I think we just have to do these things and the secret sauce is our people and our leadership teams that are driving this.

Okay. That's really helpful. And then the one other thing I was going to ask because I think Chris back at our conference of it you'd mentioned I think give us a 30% reduction in miles driven if there was something specific you David is an output.

Speaker 9: Okay, that's really helpful. And then the one other thing I was going to ask, because I think, Chris, back at our conference, you're talking about OVID, you've mentioned, I think it was like a 30% reduction in miles driven. There was something specific you gave it as an output on the logistics side of OVID. And I was just wondering, you know,

The logistics side.

Amit and I was just wondering.

When you think about payback.

Speaker 9: When you think about payback, given elevated transportation logistics costs, which I think it's a consensus view that it's not going the other way. How is how is the current environment change the payback, you know, or payback period on this work? I'd love to hear anything about that you can offer.

Given elevated transportation logistics costs, which I think is.

This view that it's not going the other way.

And how does the current environment change the payback or payback period.

This work.

Do you hear anything about that you can offer.

Yes, just just at a high level.

Speaker 5: Yeah, just at a high level, the statistic we shared at the conference was 40% reduction in miles driven, we believe, in the U.S. once we get fully into the OVID network model. What we've seen is that the savings from OVID are actually now going to be higher than what we originally thought when we started the project. And the reason for that is there's a significant amount of savings in transportation, and with the rates being up,

The statistic we shared at the conference was 40% reduction in miles driven we believe in the U S is over once we get fully into the network model.

What we've seen is that the savings from Amit are actually now going to be higher than what we originally thought when we started the project and the reason for that is there is a significant amount of savings in transportation and with the rates being up the amount of money that we expect to save is going to be higher now I will say that.

Speaker 5: the amount of money that we expect to save is going to be higher. Now I will say that the capital investment is also a little bit higher because the cost to

The capital investment is also a little bit higher because of the cost to build.

Speaker 5: Build the two new distribution centers, not build them, we're leasing them, but the cost to put racking in and buy equipment has also gone up.

Build the two new distribution centers, not build a more leasing them, but the cost too.

Put racking in and buy equipment has also gone up but I would say the payback overall from the program.

Speaker 5: But I would say the payback overall from the program...

Speaker 5: is looking even better than when we first started the program. So we were fortuitous in starting it at the time we did.

Looking even better than when we first started the program so.

It's we were fortuitous and starting a at the time, we did it.

Speaker 5: And I think the program is going to deliver better than what we thought in terms of financial return.

And I think the program is going to deliver.

Better than what we thought in terms of financial return.

Okay, great. Thank you so much.

We'll take our next question from Andrea Teixeira of Jpmorgan. Please go ahead.

Speaker 1: We'll take our next question from Andrea Taxeira of JP Morgan. Please go ahead.

Speaker 10: Thank you, and congrats on your results. I wanted to just go back to your comments on balancing pricing, elasticity, and margin progression. Could you share some of data points on volume share across all channels, most recent against the levels that you had in 2020, or perhaps even before COVID? I understand that you also started taking pricing in some categories back in the second quarter of last year. So I think for investors, probably would be useful to see how you could retain some volume share there. And related to that, I know your appliances business grew well in LATAM, and it became a pretty strong area for you within that segment. And I think Maria Fernanda probably will be part of that initiative. So I was wondering if.

Thank you and congrats on your results I wanted to just go back to your comments on balancing pricing elasticity margin progression.

Could you share some data points on volume share across all channels. Most recent against the levels that you had in 2020 and or perhaps even before COVID-19 .

And that you also started taking pricing some categories back in the second quarter of last year. So I think for investors probably will be useful to see how you.

You could retain some volume some volume.

Where they are.

And related to that I know youre appliances business grew well in Latam and it became.

Pretty sure it's.

A strong area for you within that segment and I think my answer and probably it will be part of that initiative. So I was wondering is.

Obviously, there is a high inflationary environment that we all know us for.

Speaker 10: Obviously, there is a high inflationary environment that we all know of for, I mean, a good part of my whole lifespan. So is this something that you are accounting for in terms of elasticity, in terms of, like, what Ravitch comments were? And I think, Chris, you, too, alluded to some elasticity embedded in your guide. So I was wondering if you can kind of, like, help us bridge all of that. Thank you so much.

Part of my life.

Lifespan.

Is this something that you are accounting for in terms of elasticity.

In terms of like what Robert's comments were.

And I think Chris you to alluded to some elasticity embedded in your guide. So I was wondering if you can kind of like help US bridge all of that thank you so much.

Yeah.

Speaker 3: Yeah, let me take a shot at that, Andrea. Look, when we look at.

Let me.

Take a shot at that Andrew.

Look.

When we look at.

Speaker 4: 21 and versus 20 versus 19. Definitely in a lot of our categories.

21.

<unk> versus <unk> versus 19 definitely in a lot of our categories.

Speaker 4: We've been gaining dollar share and the writing business, the food business, many of the brands that I cited in my prepared remarks.

We have been gaining dollar share and.

The writing business the food business many of the brands that I cited in my prepared remarks so.

Speaker 4: and growing better than the categories. When we look at consumption trends, clearly last year

And in growing better than the categories. When we look at consumption trends clearly last year, we had very strong consumption along with sales.

Speaker 4: very strong consumption along with sales. So sales and consumption keeping sort of a track, but it's not just last year on a, when we look at pre pandemic first to 19 as well, there's been consumption growth. So, and we've participated in all of that. So I think that really sets the brands and pretty good health.

So sales and consumption keeping sort of track, but it's not just last year.

When we look at pre Pan.

Dynamic versus 19 as well.

Consumption growth, so and we are participating.

Participated in all of that so I think that really sets of brands and pretty good health.

When we then look at <unk>.

Speaker 3: When we then look at 22, it's very early.

<unk> two it's very early and in our planning, but we did expect January to be a little soft because there was a huge surge last year and everyone all of the REIT.

Speaker 3: And in our planning, we did expect January to be a little tough because

Speaker 3: There was a huge surge last year and everyone, all the retail industry expected some softness because of what would happen. But in the early weeks of February , we're seeing pick back up. So it's right now very early to tell where all of this is gonna land. But we're just confident that with sort of the overall trends we're seeing.

Industry expected some softness because of what would happen but in the early weeks of February were seeing pick backup. So it's right now very early to tell where all of this is going to land, but we are just confident that.

With sort of the overall trends we're seeing.

Speaker 7: And so when we look at, for instance.

And.

So when we look at for instance.

Speaker 3: Contigo as just an example, you look at four weeks, 13 weeks, gaining share, gaining consumption as we're driving those innovations.

Contango is just an example, youll look at four weeks 13 weeks gaining share gaining consumption as we are driving those innovations. So yes, we have in our models put in some.

Speaker 4: So yeah, we have, in our models, put in some volume shortfalls because the price increases. The big question will be, how much is that going to be? That's a bit of an unknown. Tough for us to tell. But overall, we feel pretty confident in the guidance we've given, as I mentioned earlier. Next one, I'll just quickly hit on your Latin America question. Look, the thing about Latin America, especially on appliances.

Volume shortfalls, because the price increases the big question will be how much is that going to be that's a bit of an unknown top products for talent, but overall, we feel pretty confident in the guidance, we've given as I mentioned earlier.

Next one I'll just quickly hit on your Latin America question look the thing about the Latin America, especially on appliances.

Speaker 4: As you would know, Oster is such a strong brand. And that's the big difference. Oster is really considered a MPP low HPP brand. It's been driving innovations for so many years. We had record production of blenders. And so we're able to manage the inflationary environments with the right levels of pricing just because of our brand strength and the innovations we're driving. Chris, was there anything you wish to add? OK.

As you would know poster is such a strong brand and that's the big difference bolster is really considered a MTB low HCP brand.

Driving innovation for so many as we had record production of blenders and so we're able to manage the inflationary environments with the right levels of pricing just because of our brand strength and the innovations we're driving Christmas day anything you wish to add okay. Thank you.

Robert.

We will now take our next question from Olivia Tong with Raymond James. Please go ahead.

Speaker 1: We will now take our next question from Olivia Tong of Raymond James. Please go ahead.

Speaker 11: Great, thanks. Just first on pricing, if you could just talk a little bit about when you expect the pricing to sort of layer in, sort of range of pricing, maybe from top to bottom, since obviously lots of different businesses in there, and then.

Great. Thanks, just with some pricing if you could just talk a little bit about when you expect.

The pricing just sort of layer in.

Sort of a range of pricing maybe from top to bottom.

Let me see.

Different businesses in there.

And then.

And then with respect to sales.

Speaker 11: And then with respect to sales, can you talk a little bit about, you know, the flat to plus two in aggregate? But my sense is there's going to be a fairly wide range of growth expectations by business. So can you just talk about that? You know, obviously the home-related category.

Can you talk a little bit about.

The flat to plus two in aggregate, but my sense is there's going to be a fairly wide range on growth expectations by business. So can you just talk about that.

We see the home related categories.

Larry as we hopefully get to spend more time outside of the home.

Speaker 11: as we hopefully get to spend more time outside of the home. But it sounds like you don't think it will fall off meaningfully. Can you talk a little bit about what commercial looks like if you, you know, once connected home security is out and then, you know, your views in terms of back to school for 22 and timing of return to office. Thank you.

It sounds like you don't think it will follow up meaningfully can you talk a little bit about what commercial looks like.

Once connected home Securities out and then your views in terms of back to school for 'twenty two.

And in.

And timing of return to office.

Just wanted to start with pricing I will hit the <unk>.

Speaker 12: Chris, why don't you start with pricing and I'll hit some of the categories. So on pricing, and maybe this will be helpful, the 12.5% core sales growth that we reported for 2021 had about three or four points of pricing in it. And, you know, the balance was volume and mix that were contributing to the growth.

We're a category so on pricing.

And maybe this will be helpful. The the 12, 5% core sales growth that we reported for 2021 had about three or four points of pricing on it.

And the balance was volume and mix that we're contributing to the growth with respect to our outlook for 2022.

Speaker 5: With respect to our outlook for 2022.

Speaker 5: You know, we're expecting the pricing contribution to be in the high single-digit range.

We're expecting the pricing contribution to be.

In the high single digit range.

Speaker 5: And so it's a much bigger contribution from pricing to the top line in 22 than it was in 21. Most of that pricing has already been announced. I think in our plans

So it's a much bigger contribution from pricing to the top line in 'twenty two than was in 'twenty. One most of that pricing has already been announced I think in our plans virtually all of our pricing will be announced by the end of the first quarter and so what youll see is that in.

Speaker 5: virtually all of our pricing will be announced by the end of the first quarter. And so what you'll see is that in Q1, not all of the pricing is yet effective, but in Q2, the vast majority of the pricing will be in effect. And that's why in the guidance...

Q1, not all of the pricing has yet effective but in Q2, the vast majority of the pricing will be in effect and that's why in the guidance.

Speaker 5: We're expecting in Q2 our operating margin performance to turn positive. And as we said, I think in the third quarter call, the third quarter was sort of the low point relative to operating margin trend versus prior year. It got better in Q4. It's going to get better in Q1, and then it will start to turn positive in Q2.

We're expecting in Q2, our operating margin performance to turn positive.

And as we said I think in the third quarter call. The third quarter was sort of the low point relative to operating margin trend versus prior year. It got better in Q4, it's going to get better in Q1, and then it will start to turn positive in Q2, So that's where we are on pricing.

Speaker 5: So that's where we are on pricing. You know, I would say broadly the range this year is sort of high single digits.

I would say broadly the range. This year is sort of high single digits on average across the company as the financial impact.

Speaker 5: on average across the company is the financial impact. So let me quickly go through the businesses to just highlight our quick views.

So let me quickly go through the businesses.

Just highlight.

<unk> views.

Writing, we think is going to have.

Speaker 7: Another great year. We're in fact seeing acceleration of retailer orders in anticipation of a strong BTS.

Another great year.

We are in fact seeing acceleration of retailer orders in anticipation of a strong bts and so and our brand is very strong.

Speaker 7: and so and our brands are very strong. The big upside and it'll all depend on how the offices open is the commercial channel and so we'll need to see where the offices will open up and that's a significant portion that we didn't have.

A big upside and then long depends on how.

The offices open.

The commercial channel and.

So we will need to see although the offices will open up and Thats a significant portion that we didn't have.

For 'twenty.

Speaker 7: for 20 and 21, so I feel very good about our prospects and writing.

In 'twenty one so.

I feel very good about our prospects in driving on you asked about the commercial business.

Speaker 4: on you asked about the commercial business right now other than.

Right now other than work through lot of the categories on commercial actually did very well in 'twenty, one and we were comping on training because of all the hygiene issues. The washroom side that cut in 2020 one as offices open.

Speaker 4: washroom. A lot of the categories on commercial actually did very well in in 21 and we were comping on 20 because of all the hygiene issues the washroom surge occurred in 20. So in 21 as offices open open up as well as the hospitality sector opens up we think that the commercial business should be in good stead as well.

<unk> as well as the hospitality sector opens up we think that the commercial business should be in good stead as well on home fragrance.

Speaker 4: On home fragrance, consumption could be a little bit more muted, just because during the pandemic and after that, there was a lot of fragrance use. But then we're innovating into a lot of new categories outside of candles, and we're also geographically driving it, so we expect that to be a good business.

Consumption could be a little bit more muted.

Because during the pandemic and after that there was a lot of fragrance use but then.

And for a lot of new categories outside of candles.

And we're also geographically driving it so we expect that to be a good business food I think we've got a lot of innovation and as I said in a hybrid model people are going to continue to cook so and.

Speaker 3: Food, I think we've got a lot of innovations. And as I said, in a hybrid model, people are gonna continue to cook. So, and this Rubbermaid bakeware that we're launching is gonna be great. We're doing a big restage on Calphalon. I think that should help. So I feel pretty good about that.

This is Robert made bakeware that we're launching.

It's going to be great. We're doing a big restage on <unk> I think that should help so I feel pretty good about that.

Speaker 3: So the two businesses, and then O&R, look, it's on a tear. And as you said, people are gonna go outdoors and we're seeing that. So I feel, and given that we're making the turnaround, the one brand left there to turn around is Marmot, which we're now making some progress. But Contigo, Baba, and Coleman are all in great shape, both domestically and internationally. So those five businesses feel very good about their prospects. The two businesses.

The two businesses and then ONR look it is on a tear and as you said people are going to grow our doors and we're seeing that so I feel and given that we're making the turnaround. The one brand left there to turn around is <unk>, which we are now, making some progress, but contango Bubba and Coleman, our all in great shape.

Both domestically and internationally. So those five businesses feel very good about their prospects the two businesses.

Baby, because the very strong comps the stimulus that chow.

Speaker 4: baby because the very strong comps, the stimulus, the child tax credit, etc. is not going to be there this year, so that I'm a little bit more muted. And then home appliances, there was just consumer so much acceleration and just given that these are long purchase cycles, so that could be a little bit muted. But our goal...

Tax credits et cetera is not going to be day. This year. So that's a little bit more muted and then home appliances that was just consume up so much acceleration and just given that these are.

Long purchase cycles, so that could be a little bit muted, but our goal is to try and grow each business. They may just grow at different paces. So we feel.

Speaker 4: is to try and grow each business. They may just grow at different paces. So we feel, and look, all the businesses have taken price increases.

And look all of those businesses have taken price increases so.

Great. Thanks, so much.

We'll take our next question from Chris Carey of Wells Fargo Securities. Please go ahead.

Speaker 1: We'll take our next question from Chris Carey of Wells Fargo Securities. Please go ahead.

Hi, good morning.

Speaker 5: Good morning, morning. Can I just follow up on that? That. You know, Olivia's question there, and so I guess I'm just trying to.

Good morning.

Good morning can I just follow up on that.

Olivia's question, there, so I guess I'm just trying to.

Speaker 13: um you know understand maybe the the level of elasticity that you're building in or if it's about comps because i mean high single digit pricing and

Understand maybe the level of elasticity that youre building in or if it's about comps because I mean <unk>.

High single digit pricing and it sounds like.

I think you said.

Speaker 13: You know, I think he said, you know, inflation is 500 basis points to gross margin. I mean, pricing is going to be well ahead of that. It sounds like you're almost implying that, you know, volumes are going to be down 68 points, which seems quite a bit more than modest elasticity. And so I guess.

Inflation is 500 basis points of gross margin.

Pricing is going to be well ahead of that it sounds like youre, almost implying that volumes are going to be down six to eight points, which seems quite a bit more than modest elasticity and so I guess.

Speaker 13: You know, I'm trying to understand if you're seeing something in the business, which it doesn't sound like you're sitting on elasticity, if you're concerned about, you know, the, the, the trajectory on on comps, and basically what I'm trying to do here is just to dimensionalize. You know, the comment on modest elasticity, I think, in the prepared remarks with what seems like pretty significant elasticity. If you kind of take the outlook on pricing. So thanks so much for that.

I'm trying to understand if you're seeing something in the business, which doesn't sound like you're seeing on the elasticity. If you are concerned about the trajectory on on comps and basically what I'm trying to do here is just to dimensionalize.

The comment on modest elasticity I think in the prepared remarks, with what seems like pretty significant elasticity. If you kind of take the outlook on pricing. So thanks, so much for that.

I'll just hit one quick point and then Chris can elaborate.

Speaker 4: I'll just hit one quick point, and then Chris can elaborate. Don't forget we are also exiting some businesses which affect core sales in terms of because there may be particular SKUs because they're low margin. So we did talk about some of that. And so with that, Chris, why don't you? Yeah, so what I would say overall is that, you know.

Don't forget we are also exiting some businesses, which affect cross sales in terms of because.

There may be particular, skus, because they're low margin. So we did talk about some of that and so as that Chris went into.

Yes, so what I would say overall is that.

<unk>.

The high single digit pricing that we've got in the plan. If you were to back into core sales would say that our planning for volume is sort of down mid single digits.

Speaker 5: The high single-digit pricing that we've got in the plan, if you were to back into core sales, would say that, you know, our planning for volume is sort of down mid-single digits, and pricing, we expect to more than compensate for the volume down mid-singles. Now, the down mid-singles on volume...

And pricing we expect to.

More than compensate for the volume down mid singles now the down mid singles on volume.

I think as a.

Speaker 5: I think is an assumption on our part, as we talked about, relative to volume elasticity. We have not seen that so far, so we have not seen...we've seen volume growth and continued volume growth.

An assumption on our part as we talked about relative to volume elasticity, we have not seen that so far. So we have not seen we've seen volume growth and continued volume growth, but we also are trying to be prudent in our planning.

Speaker 5: But we also are trying to be prudent in our planning for the fact that stimulus is coming off. As Robbie mentioned, we have a couple of categories that we expect trends to normalize in. And we know that pricing is going to have some impact on the consumer at some point.

For the fact that stimulus is coming off.

Ravi mentioned, we have a couple of categories that we expect trends to normalize.

And.

And we know that pricing is going to have some impact on the consumer at some point.

Speaker 5: you know, if we continue to see no volume impact from pricing or limited elasticity, we would have upside to our guidance range on top line.

If we if we continue to see.

No volume impact from pricing or limited elasticity.

Have upside to our guidance range on top line.

Speaker 5: But we don't think that it's reasonable to assume no impact on volume elasticity, and so we've tried to set

But we don't think that it's reasonable to assume no impact on volume elasticity and so we've tried to set.

Speaker 5: that in sort of a prudent range, recognizing the comps, recognizing the pricing, and recognizing the macro environment.

That in a sort of a prudent range.

Recognizing the comps recognizing the pricing and recognizing the macro environment.

Speaker 5: Obviously, it's a more challenging planning environment heading into this year, but we think it's important to set the top line in a place that still allows us to deliver very strong profit growth, earnings per share growth, and not overbuild working capital.

Obviously, it's a more challenging planning environment heading into this year.

But we think it's important to set the top line and a place that still allows us to deliver very strong profit growth earnings per share growth and not overbuild working capital.

Speaker 5: And if we see the top line coming in stronger, we'll be in a position to react to that and supply it.

And if we see the top line coming in stronger will be in a position to react to that and and supplier.

Speaker 13: I appreciate the perspective. Can I ask just one quick follow-up? Great.

I appreciate the perspective.

Can I ask just one quick follow up very quick.

Yes.

From a gross margin perspective, obviously operating margins up.

Speaker 13: From a gross margin perspective, obviously operating margins seen up this year. You know, there's a comment around laser focus on gross margins, and I appreciate this bit commentary on various kind of puts and takes as we get through the year. But with this level of pricing, would you expect gross margins to build and also be up for the year? I apologize if I missed that earlier in the call, but I don't recall hearing it. Thanks.

This year.

A comment around laser focus on gross margins and I appreciate the.

Commentary on various kind of puts and takes as we get through the year, but with this level of pricing would you expect gross margins to build and also be up for the year I apologize if I missed that earlier in the call, but I don't recall hearing it.

Yes, so just maybe some additional perspective and obviously, we don't we don't guide gross margin, specifically, but we've guided operating margin to be up 50 to 80 basis points and I think our.

Speaker 5: Yes. So just maybe some additional perspective. And obviously, we don't guide gross margin specifically, but we've got an operating margin to be up 50 to 80 basis points. And I think our expectation is gross margin will be up more than that, because we are planning higher investment in advertising and promotion as well.

Our expectation is gross margin will be up more than that.

We are planning.

Higher investment in advertising and promotion as well.

Thanks, so much.

We'll take our next question from Wendy Nicholson with Citi. Please go ahead.

Speaker 1: We'll take our next question from Wendy Nicholson of CIFI. Please go ahead. Hi. Thanks for...

Hi, Thanks very much.

Just a housekeeping question, Chris maybe on home fragrance I mean, the growth there has turned out to be I think better than a lot of us expected, but can you just remind us are you finished with the distribution changes the closing of the stores and pulling back in some locations. So are the headwinds there now behind US and are you happy with.

Speaker 14: Just a housekeeping question, Chris, maybe on home fragrance. I mean, the growth there has turned out to be, I think, better than a lot of us expected. But can you just remind us, are you finished with the distribution changes, the closing of the stores, and pulling back in some locations? So are the headwinds there now behind us, and are you happy with?

Speaker 14: where your distribution sits today. But then my second bigger picture question is just on international. It's exciting that you're now kind of moving forward, but can you just, number one, give a sort of.

Where your distributions sits today, but then my second bigger picture question is just on international it's exciting that you are now kind of moving forward, but can you just number one give us sort of.

Speaker 14: you know, a 20,000 foot view of.

20000 foot view.

Which markets you think are the ones that have the most potential how quickly can you move to build out that international business and is there any risk to your margin expansion goals over the next couple of years as you maybe invest in some of those newer markets. Thanks.

Speaker 14: which market you think are the ones that have the most potential how quickly can you move to build up that international business

Speaker 14: And is there any risk to your margin expansion goals over the next couple of years as you maybe invest in some of those newer markets? Thanks.

Sure I'll hit home fragrance, and then Ravi can.

Speaker 5: I'll hit Home Fragrance and then Ravi can come on international. On Home Fragrance, we feel very good about the transition that we've made in that business to an omni-channel business. We have a very strong and growing direct-to-consumer business with our online website. We have rationalized our store footprint, and I'll come back to that specifically in a minute, and we've grown our business with leading retailers.

Come on international on home fragrance, we feel very good about the transition that we've made in that business to an omni channel business, we have a very strong and growing direct to consumer business with our online website.

We have rationalized, our store footprint and I'll come back to that specifically in a minute and we've grown our business with leading retailers.

Speaker 5: and feel very good about the position. That change has allowed us to not only get the business back to growth, but to dramatically improve profitability in the business. From a store's perspective, when we started this journey, I think in 2017 or 18, we had over 500 stores.

And feel very good about the position that change has allowed us to not only get the business back to growth, but to dramatically improve profitability in the business from a stores perspective. When we started this journey I think in 2017 or 18, we had over 500 stores. We ended this year.

Speaker 5: We ended this year with about 300 stores.

With about 300 stores.

Speaker 5: in 2021, and I think our plan is to close maybe 30 stores or something in that range in 2022. So the pace of store closures is clearly slowing down, and I think, you know, you'll see that most of that store rationalization is behind us at this point, although there is still a little bit to go.

In 2021, and I think our plan is to close maybe 30 stores or something in that range in 'twenty. Two so the pace of store closures is clearly slowing down and.

Youll see that most of that store rationalization is behind us at this point, although there is still a little bit to go.

So Andy on international.

Speaker 3: So Wendy, on international, yes, it is exciting. And look, as my past life having been a president of international twice, for me, it's a natural bias. I think we have a lot of opportunity here. I think the thing about it is.

Yes, it is exciting in <unk>.

My past life, having been president of international price for me, it's a natural bias I think we have a lot of opportunity here I think the thing of it is for US we actually see this not only as a growth opportunity, but a profit improvement opportunity.

Speaker 4: For us, we actually see this not only as a growth opportunity, but a profit improvement opportunity. Right now, our gross margins actually in international are slightly better than the U.S., and particularly when you look at outdoor and appliances. So I think, but here's the

Write down our gross margins actually in international are slightly better than the U S and.

Particularly when you look at outdoor and appliances.

So I think but here's the issue.

Speaker 4: Whereas we're becoming more and more one-year-old in the United States.

Well, it's we're becoming more and more one <unk> in the United States. We are still very fragmented internationally. So we will have each.

Speaker 3: We're still very fragmented internationally, so we'll have each.

Speaker 4: We've got a lot of offices that have been rationalizing them, but you don't have that one mule view. So it's a lot of fragmentation, and we don't go to market leveraging our strengths. So in the UK, we'll have different sales forces calling on the same retailers.

We've got a lot of offices that we have been rationalizing them, but you don't have that one youll view. So there's a lot of fragmentation and we don't go to market leveraging our strengths in the U K will have different sales forces, calling on the different on the same retailers and so.

Speaker 3: And so one of the opportunities is, hey, leverage our scale and go to market to those retailers as one New York.

One of the opportunities is hey leverage our scale and go to market to those retailers as one Neil.

Speaker 4: And so, or on the other hand, we have a very strong infrastructure of people, you know, great country management systems in Latin America, but it's all on appliances.

And so are on the other hand, we have a very strong infrastructure of people or no.

Great Country management systems in Latin America, but it's all on appliances, we have not really leverage that for our other businesses. So close business Adjacencies food, how can you drive that and so it is really leveraging our current infrastructure and people as well as.

Speaker 3: We have not really leveraged that for other businesses, so close.

Speaker 4: business adjacency food. How can you drive that in. So it is really leveraging our current infrastructure and people as well as so to drive top line the way we will focus. I think there's tremendous opportunity in Latin America to take our existing stuff to drive the writing business the outdoor business and the food business.

So to drive top line the way, we would focus I think there's tremendous opportunity in Latin America to take our existing staff to drive the writing business the outdoor business in the food business.

Speaker 3: And but when you also have specific countries, one of our big focus points will be.

But when you all saw specific countries one of our big focus points will be focus on the top 10 countries with our kinds of brands you need countries, which are developed and have good discretionary income. So places like for US UK, Canada, Australia, and New Zealand, France, Brazil, Mexico, Japan.

Speaker 3: focus on the top 10 countries. You know, with our kinds of brands, you need countries which are developed and have good discretionary.

Speaker 3: Incomes for places like for us, UK, Canada, Australia, New Zealand, France, Brazil, Mexico, Japan.

These are the kinds of places that we're putting on.

Speaker 3: These are the kinds of places that we're putting a lot of focus on because we already have infrastructures there.

A lot of focus on because we already have infrastructure is there and so it's not a lot about hey, let us go make huge investments into developing markets being very focused in fact, we were properly exit.

Speaker 4: And so it's not a lot about, hey, let us go make huge investments into developing markets. It's being very focused. In fact, we'll probably exit.

Speaker 4: certain countries and also move to a distributor model in many countries. We don't think we need to be in as many countries. So it's all about depth rather than breadth. So and now we've got the right person who's done this many times. Maria Fernanda is just amazing. I think she will really turbocharge this. Terrific.

Countries and also moved to a distributor model in many countries. We don't think we need to be in as many countries. So it's all about depth rather than breadth. So and now we've got the right person who has done this many times Maria Fernanda is just amazing I think Sheila really turbocharge. This.

Terrific sounds exciting thanks, so much.

And our final question comes from Nik Modi of RBC capital markets. Please go ahead.

Speaker 1: Our final question comes from Nick Mori of RBC Capital Markets. Please go ahead.

Yes, thanks, good morning, everyone.

Speaker 15: Yeah, thanks. Good morning, everyone. So, Robbie, I just want to ask you, I mean, Newell historically has competed in very fragmented markets. A lot of your competitors are much smaller in scale, and obviously the environment's been tough for everyone, but more so for smaller companies that don't have the resources or the capabilities to kind of manage and navigate what's been going on. So, I just wanted to get kind of your state of the union on what you've seen in the competitive environment, and if that could foster even better market shares as we kind of move forward in a more normalized environment.

So Robert I, just wanted to ask you I mean, you will historically has competed very fragmented markets larger competitors are much smaller in scale and obviously the environment's been tough for everyone, but more so for small companies that don't have the resources and capabilities to manage and navigate what's been going on so I just wanted to get kind of your state of the union on what you've seen in the competitive environment.

And if that could foster even better market shares as we kind of move forward in a more normalized environment.

Speaker 3: Yeah, I think, look, yeah, it's both a plus and a minus because the key is never to get complacent and because sometimes a smaller competitor can be more agile. And then if we get complacent with our size, we can get knocked as has happened maybe back in the past. So I always have our teams be a little paranoid and say, who's gonna disrupt you and let's disrupt ourselves first. I do think.

Yes, I think.

Look.

Yes.

It's both a plus in our mind us because.

He is never to get complacent and <unk>.

Because sometimes a smaller competitor can be more agile and then if we get complacent with our size. We can get knocked us has happened maybe in the back in the past. So I always have our teams b, a little paranoid and say who is going to disrupt your it and thats disrupt ourselves plus I do thing.

One of the biggest advantages that <unk> had not taken.

Speaker 4: One of the biggest advantages that Newell had not taken advantage of in the past is that...

Advantage you have in the past is that we.

Speaker 3: We didn't take advantage of our scale. We acted like eight, now it's seven, but eight sort of billion dollar plus companies instead of being a $10 billion company. And we didn't take our cloud to drive it with customers. We didn't use that to come up with, so we had very fragmented distribution.

We did take advantage of our scale we acted like.

<unk> seven <unk> eight.

Sort of a $1 billion plus companies instead of being a $10 billion company and we didn't take our cloud to drive it but customers we didn't use that to come up and so we had very fragmented distribution.

Speaker 3: So, in many ways, we competed with the competitors just coming down to their size, as opposed to really being leveraging the scale size that we have today. Avid is a perfect example.

Networks. So in many ways. We competed with the competitors just coming down to their site as opposed to really being leveraging the scale size that we have today of it is the perfect example, what Chris has talked about 23 supply chain into one.

Speaker 3: Chris has talked about 23 supply chains into one.

Speaker 4: this whole concept, one truck, one invoice, one order, because our customers in the past have gone nuts a little bit saying, gee, we have eight people calling on us and it's so many different mules. So I think that is changing now. I think that'll really help us. And also this very.

This whole concept one invoice one order because our customers in the past have gone a little bit, saying Gee, we have eight people, calling on us and it's so many different newell's. So I think that is changing now I think that will really help us and also this varies focused way of saying where are we going to take our.

Speaker 3: focused way of saying where are we going to take our N.P. spend and put it against really those high growth margin businesses. I think that will give us traction as we're doing. And that's why you're seeing shots on the show again.

Our A&P spend and put it against really those high gross margin businesses I think that will give us traction as we are doing and thats why youre seeing shows on these share gains so rather than just being sort of peanut butter spreading it all across so I think but roughly the spec our competitors you've got to be very we look at each category.

Speaker 3: So rather than just being sort of peanut butter and spreading it all across. So I think, but look, we respect our competitors. You've got to be very, we look at each category and fight it out. But the fact that we're seeing share gains in so many different brands and that all our top 10 brands grew in 2021 and 13 out of our top 15 group is all really positive for us. And I think we'll bring that strength as we go forward. And I think we'll bring that strength as we go forward.

Right.

And fight it out, but the fact that we're seeing share gains in so many different brands and that all of our top 10 brands grew in 2021.

13 out of our top 15 group is all really positive for us and I think we'll bring that strength as we go forward.

Excellent. Thank you Robert.

Thank you Nick.

Speaker 16: Thank you.

Yeah.

A replay of today's call will be available later today on our website.

Speaker 1: A replay of today's call will be available later today on our website, ir.newellbrands.com. This concludes our conference. You may now disconnect.

O'brien Satcom. This concludes our conference you may now disconnect.

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