Plan to Accelerate Where to Play / How to Win Strategy Choices and Reduce Overhead Cost
Expect Annualized Pre-Tax Savings of $65 Million to $90 Million, Net of Reinvestment
ATLANTA--(BUSINESS WIRE)--Jan. 8, 2024-- Newell Brands (NASDAQ: NWL) today announced an organizational realignment, which is expected to strengthen the company’s front-end commercial capabilities, such as consumer understanding and brand communication, in support of the Where to Play / How to Win choices the company unveiled in June of 2023. In addition to improving accountability, Newell’s organizational realignment should further unlock operational efficiencies and cost savings, reduce complexity and free up funds for reinvestment.
“In June 2023, we introduced a comprehensive corporate strategy, which has been cascaded enterprise-wide and integrated into Business, Region, Brand and Functional strategies. After a thorough assessment, we identified opportunities to strengthen Newell’s front-end commercial capabilities, which are critical to returning the company to sustainable and profitable growth. To support our strategic choice to disproportionately invest in the largest and most profitable brands, we are implementing a brand management model within the three existing global segments with full P&L ownership and four regional go-to-market commercial organizations,” said President and Chief Executive Officer Chris Peterson. “Through the organizational design changes, we expect to maximize accountability and ownership of financial results, drive consistency in how we work, reduce overhead cost structure and complexity, while investing in the capabilities we need to win. These actions will enable the company to operate with greater speed and agility. We appreciate our employees’ continued efforts during this transition as we take the difficult but necessary actions to strengthen and reshape the organization for sustainable, long-term competitive advantage and value creation.”
As part of the organizational realignment, the company is making several organizational design changes, which entail: standing up a cross-functional brand management organization, realigning business unit finance to fully support the new global brand management model, further simplifying and standardizing regional go-to-market organizations, and centralizing domestic retail sales teams, the digital technology team, business-aligned accounting personnel, the Manufacturing Quality team, and the Human Resources functions into the appropriate center-led teams to drive standardization, efficiency and scale with a One Newell approach. The company will also further optimize Newell’s real estate footprint and pursue other cost reduction initiatives. These actions are expected to be substantially implemented by the end of 2024.
Once organizational design changes are fully executed, the company expects to realize annualized pre-tax savings in the range of $65 million to $90 million, net of reinvestment, with $55 million to $70 million expected in 2024. Restructuring and related charges associated with these actions are estimated to be in the range of $75 million to $90 million and are expected to be substantially incurred by the end of 2024. The company plans to reduce its office roles by approximately 7%, with most of these actions expected to be complete by the end of 2024, subject to local law and consultation requirements.
The company will share additional information about organizational realignment in a Form 8-K filed today with the Securities and Exchange Commission and during its fourth quarter and full-year 2023 earnings call on February 9, 2024.
About Newell Brands
Newell Brands (NASDAQ: NWL) is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex and Campingaz. Newell Brands is focused on delighting consumers by lighting up everyday moments.
This press release and additional information about Newell Brands are available on the company’s website, www.newellbrands.com.
Caution Concerning Forward-Looking Statements
Some of the statements in this press release, including, but not limited to, those statements relating to the expected benefits of and timing of completion of the organizational realignment; pre-tax savings from organizational realignment; the number of positions eliminated pursuant to the organizational realignment; the expected costs, charges and cash expenditures associated with the organizational realignment; unlocking operational efficiencies; returning the company to sustainable and profitable growth; and reshaping the organization for sustainable, long-term competitive advantage and value creation, are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on the company’s current plans, assumptions, beliefs, and expectations. Forward-looking statements are subject to the occurrence of many events outside of the company’s control. Actual results and the timing of events may differ materially from those expressed or implied in the forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things, the risks and uncertainties included in the company’s reports on Forms 10-K, 10-Q and 8-K and in other filings the company makes with the U.S. Securities and Exchange Commission from time to time, available at www.sec.gov. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements contained herein speak only as of the date hereof. The company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments.
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Source: Newell Brands