The ODP (ODP) Sidoti Small-Cap Virtual Conference 2025 summary

Business evolution and strategic focus

• Executing a B2B pivot, leveraging supply chain, procurement, and distribution strengths to expand into new industry sectors beyond traditional office supplies.

• Three business units: B2B distribution (ODP Business Solutions), supply chain (VEYER), and B2C retail (Office Depot/OfficeMax).

• B2B segment serves over 120,000 customers, including 60% of the Fortune 100, with half of revenue from adjacent categories like janitorial, tech, and furniture.

• Supply chain subsidiary supports internal and third-party customers, offering 98.5% next-day delivery coverage nationwide.

• Retail business optimized for cash generation, with a shrinking but profitable store footprint and average lease life under three years.

Recent developments and growth initiatives

• 2024 was challenging, but new business wins and improved pipeline are expected to drive B2B traction.

• Secured the largest B2B enterprise customer in company history with a $1.5 billion deal and launched warehousing services for a major e-commerce platform.

• Entered the $16 billion hospitality market, signing a major agreement with a leading hotel management company.

• Optimize for Growth plan focuses capital and resources on B2B expansion while reducing consumer/retail exposure.

• Hospitality segment offers high barriers to entry and potential for further expansion into adjacent markets like cruise lines.

Financial outlook and operational targets

• Hospitality contract went live three weeks prior; ramp-up expected in the second half of the year and into 2026.

• Guidance updates anticipated mid-year as buying patterns become clearer.

• Free cash flow expected to increase year-over-year; leverage remains low.

• Large hospitality win is generating inbound interest from other hotel groups and strengthening supplier partnerships.

• Additional large contracts, including a $150 million/year CoreTrust deal, will help offset 2024 deleverage and drive fixed cost absorption.