Newell Brands (NWL) investor relations material

Strategic initiatives and productivity plan

• Announced a new productivity plan with a 10% reduction in professional clerical employees, enabled by prior complexity reduction and AI adoption.

• Plan leverages prior reductions in brands, legal entities, ERP systems, and SKUs, as well as over 100 AI use cases implemented company-wide.

• U.S. implementation is occurring immediately, with international completion expected by mid-next year.

• Expected to deliver $110–$130 million in pre-tax cost savings, mainly from employee reductions and operational efficiencies.

• Overhead as a percent of sales is projected to decline by 100 basis points by 2026, supporting long-term margin goals.

Financial performance and margin outlook

• Operating margin is targeted to grow by 50 basis points next year, consistent with evergreen financial targets.

• Long-term goal is to increase operating margin from 6% in 2023 to 12–15%, with gross margin targeted at 37–38%.

• Overhead as a percent of sales is aimed for 17–18%, with A&P spending rising to 6–7% of sales.

• Recent gross margin improved from 29.5% to 34.5% in two years, despite no unit volume growth.

• Cash flow is expected to strengthen in 2026, aided by lower CapEx, improved working capital, and reduced cash taxes.

Organizational transformation and operational progress

• Major organizational changes include AI-enabled consumer insights, brand management teams for top 25 brands, and a fully integrated global supply chain.

• ERP consolidation from 42 to 6 systems, with full global integration expected by 2026.

• CapEx investments have supported transformation, with spending expected to decrease next year, boosting free cash flow.

• Supply chain re-domestication reduced China imports from 30% to under 10% of global business.

• Lean Six Sigma and automation have driven 4–5% annual COGS reduction.