Core Changes in Newell - Newell has undergone significant changes over the past 2.5 years under the leadership of the new CEO, including a comprehensive assessment of its business capabilities and a strategic overhaul [1] - The company evaluated its 11 core capabilities necessary for success in the consumer products sector, identifying weaknesses in half of these areas, which were rated as "red" or worst in class [1] - A new strategy was implemented in June 2023, focusing on clear choices regarding market positioning and competitive advantages [1] Capability Improvement Initiatives - The assessment led to the initiation of a capability improvement project list aimed at enhancing performance in identified weak areas [1] - A new operating model was established, emphasizing the creation of global segments responsible for managing the profit and loss (P&L) [1]

Financial Data and Key Metrics Changes - The company has seen a significant improvement in core sales growth compared to two and a half years ago, although it is still negative this year, it is less negative than in previous years [5] - Gross margin has increased by almost 600 basis points over the past two years, which is a notable achievement [5] - The net leverage ratio has been reduced, and the balance sheet has improved, contributing to strong cash flow [5] Business Line Data and Key Metrics Changes - The company has established a new operating model focused on global segments managing P&L for brands, which has led to improved core sales growth [4] - The company has ramped up its innovation pipeline, with a significant increase in Tier one and Tier two innovations, leading to improved distribution and market share [32][33] Market Data and Key Metrics Changes - The company expects category growth to decline by about 2% this year, with no catalysts for improvement in the second half [9][10] - The lower-income and middle-income consumers are under pressure, leading to a focus on value, while high-income consumers remain strong [11][12] Company Strategy and Development Direction - The company has implemented a new strategy since June 2023, focusing on capability improvement and a new operating model [3][4] - The company is optimistic about category growth improving next year, driven by a potential decrease in interest rates and positive GDP growth [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing pressure on consumers, particularly those in lower and middle-income brackets, but believes that focusing on value will help navigate the environment [51][52] - There is cautious optimism regarding the macro environment, with expectations for improved category growth next year [13] Other Important Information - The company has created a trade expertise center to manage tariff impacts effectively, reducing reliance on China for sourcing [14][15] - The company has taken proactive measures to mitigate tariff impacts, including price adjustments and overhead cost management [17][18] Q&A Session Summary Question: What drove the change in category growth expectations? - The company reset its guidance to reflect sustained category growth decline due to tariffs and consumer dynamics, with no recent changes observed [10] Question: How is the back-to-school season performing? - The back-to-school season has shown flat category growth, with no significant price increases observed, indicating a stable environment [41][42] Question: What are the expectations for Q4 core sales? - Management expects Q4 to be significantly better than Q3 due to stronger innovation, a one-time inventory reduction impact in Q3, and pronounced tariff advantage selling [50] Question: How does the company view divestitures? - The company does not see divestitures as a path to value creation, believing it can win in its current categories, including Outdoor and Rec [68][70] Question: Will acquisitions be considered in the future? - While near-term acquisitions are unlikely, the company is open to medium-sized acquisitions in the future to create value [73][74]

Financial Data and Key Metrics Changes - The company has seen a significant improvement in core sales growth compared to two and a half years ago, although it remains negative this year, it is less negative than in previous years [5] - Gross margin has increased by almost 600 basis points over the past two years, indicating strong financial performance [5] - The net leverage ratio has been reduced, and the balance sheet has improved, contributing to strong cash flow [5] Business Line Data and Key Metrics Changes - The company has established global segments to manage P&L for brands, focusing on brand management and scaling supply chain operations [4] - The Writing business, a key segment, has shown flat category growth this year compared to last year, which is seen as a positive sign [43] Market Data and Key Metrics Changes - The company expects category growth rates to decline by about 2% this year, with no catalysts for improvement in the second half [9] - Lower-income consumers are under pressure, leading to a demand for more value, while high-income consumers remain strong [10][11] Company Strategy and Development Direction - A new strategy was implemented in June 2023, focusing on capability improvement and a new operating model [4] - The company is optimistic about category growth improving next year, driven by a potential decrease in interest rates and positive GDP growth [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing pressure on consumers, particularly in lower and middle-income brackets, but believes that focusing on value will help navigate the current environment [53] - There is cautious optimism for improved category growth next year, with expectations that the company can outperform the market if it executes well [56] Other Important Information - The company has created a trade expertise center to manage tariff impacts effectively, reducing reliance on Chinese sourcing from 35% to less than 10% [14] - The company has secured $35 million in incremental sales from tariff-advantaged categories, with expectations for further growth next year [21] Q&A Session Summary Question: What drove the change in category growth expectations? - The company reset its guidance to reflect sustained category growth rates of minus 2% for the year, based on first-half performance and lack of consumer catalysts [9] Question: How is the company addressing tariff impacts? - The company has implemented pricing strategies and cost management to offset the $155 million cash impact from tariffs, with pricing fully in place [16][19] Question: What is the outlook for the back-to-school season? - The back-to-school season has shown flat category growth, with no significant price increases observed, indicating a stable market environment [44] Question: What are the expectations for Q4? - Management expects Q4 to be significantly better than Q3 due to stronger innovation, a one-time inventory reduction impact in Q3, and tariff advantages becoming more pronounced [52] Question: How does the company view potential divestitures? - The company does not see a path for divestitures to create value, believing it can win in its current categories, including Outdoor and Rec [72] Question: Will acquisitions be considered in the future? - While near-term acquisitions are unlikely, the company is open to medium-sized acquisitions in the future to create synergies [76] Question: What excites management about the company's future? - Management is excited about the progress made in complexity reduction and the implementation of AI to improve capabilities and drive top-line growth [78]

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1] - The analyst holds certifications such as FMVA and FPWMP, which enhance their ability to analyze financial statements and build valuation models [1] - Participation in the CFA Research Challenge provided practical experience in equity analysis and industry research, showcasing the analyst's capability to present investment recommendations effectively [1] Company and Industry Focus - The analyst has prepared investment reports across various sectors, including healthcare, consumer staples, and industrials, demonstrating versatility in evaluating companies across different industries [1] - The consumer staples sector is highlighted as a particular area of interest, suggesting that it may present stable investment opportunities due to its defensive nature [1] - The analyst's educational background includes a degree in Finance with a strong academic performance, which supports their analytical capabilities in the investment field [1]

Financial Data and Key Metrics Changes - The company reported net flows of $15.8 billion for FY 2025, representing a 40.4% increase compared to the previous year [2][27] - Funds Under Administration (FUA) grew to a record $112.8 billion, a 28.2% increase [3][28] - Total income reached $324.4 million, reflecting a 27.1% increase year-on-year [3][28] - EBITDA was $163.5 million, with an EBITDA margin of 50.4%, up 3.2% from the previous year [3][28] - Net Profit After Tax (NPAT) increased by 39.8% to CAD 116.5 million [3][28] Business Line Data and Key Metrics Changes - Managed accounts grew by 33.5%, while managed funds increased by 21.9% [4] - Domestic trade volume rose by 28.5%, and international trade volume surged by 121.9% [5] - Ancillary fee income grew by 32.8% [8] Market Data and Key Metrics Changes - The company increased its market share to 8.7%, a 1.1% increase [18] - The platform market is growing at $1.2 trillion with a two-year CAGR of 10.2% [19] Company Strategy and Development Direction - The company aims to continue investing in wealth solutions, wealth tech, insights, and analytics [10][12] - A focus on enhancing digital experiences and user interfaces has been emphasized [12][13] - The company plans to launch new products tailored for high net worth and ultra-high net worth clients [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth, citing strong demand for complex financial advice and a robust pipeline of new advisory relationships [41][42] - The company anticipates maintaining strong net flows similar to the previous year [41][42] - There is a focus on leveraging technology and AI to improve efficiency and service delivery [21][22] Other Important Information - The company declared a final dividend of $0.21 per share, a 50% increase from the previous year [36] - The Rule of 40 score exceeded 77, indicating a strong combination of growth and profitability [36] Q&A Session Summary Question: Can you provide the actual number of flows? - Management indicated that the flows were in the vicinity of about 45% [47] Question: What drove the elevated trading fees? - Management noted that significant tailwinds from the shift to T+1 for U.S. equity settlements and elevated market volatility contributed to increased trading activity [50][51] Question: What is the organic growth rate from existing clients? - Management stated that most firms are experiencing organic growth rates between 15-20% [53] Question: How do you manage the intersection of growth and margin versus investment? - Management emphasized the importance of investing appropriately to maximize efficiencies while also pursuing growth opportunities [61] Question: What is the outlook for revenue margins into FY 2026? - Management expects some continuing trends but noted that transaction fee growth may not replicate the previous year's performance [108]

Financial Data and Key Metrics Changes - Net flows for FY 2025 were $15,800,000,000, a 40.4% increase from the prior corresponding period [2] - Funds under administration (FUA) grew to $112,800,000,000, a 28.2% increase [3] - Total income reached $324,400,000, representing a 27.1% increase [3] - EBITDA was $163,500,000, resulting in an EBITDA margin of 50.4%, a 3.2% increase from the previous year [3] - NPAT surged to CAD116.5 million, a 39.8% increase [3] Business Line Data and Key Metrics Changes - Managed accounts grew by 33.5%, while managed funds increased by 21.9% [4] - Domestic trade volume increased by 28.5%, and international trade volume surged by 121.9% [5] - Ancillary fee income grew by 32.8% [6] Market Data and Key Metrics Changes - The company’s market share increased to 8.7%, up 1.1% [18] - The platform market is growing at $1,200,000,000,000 with a two-year CAGR of 10.2% [18] - There are 7,200,000 Australians with complex financial circumstances seeking advice, with only 10,000 to 11,000 advisors available [19] Company Strategy and Development Direction - The company’s strategy focuses on wealth solutions, wealth tech, insights and analytics, and partnerships [9][10] - Plans to enhance digital capabilities and user experience through a major upgrade to the user interface [12][13] - The company aims to create capacity internally and reduce reliance on third-party systems [21] Management's Comments on Operating Environment and Future Outlook - The company expects strong flows and account growth, with a well-diversified pipeline [44] - Management is optimistic about new offerings and investments in key market segments [45] - The outlook for full net flows is expected to be similar to the previous year, with strong profitability and cash generation [46][47] Other Important Information - The company declared a final dividend that is 50% higher than the previous year, equating to a 90% payout ratio [37] - The company added over 80 employees, with 55% focused on growth initiatives [38] Q&A Session Summary Question: Can you provide the actual number of flows? - The exact number was not disclosed, but it was in the vicinity of about 45% [50] Question: What drove the elevated trading fees? - Significant tailwinds from the shift to T+1 for U.S. equity trading and elevated volatility contributed to increased transaction volumes [52][53] Question: What is the organic growth rate from existing clients? - Most firms are experiencing organic growth rates between 15-20% [55] Question: How do you manage the intersection of growth and margin versus investment? - The company aims to invest appropriately to maximize efficiencies while optimizing opportunities [63] Question: What are the expectations for revenue margins into FY 2026? - Transaction fees are expected to be good, but some one-off benefits from the previous year may not be replicated [104] Question: What is the outlook for operating expenses? - Expected operating expenses are around $190,000,000, excluding any potential impacts from ongoing investigations [75]

Financial Highlights - Netwealth's total Funds Under Administration (FUA) reached $118.5 billion as of August 18, 2025[19, 125, 129] - FUA net flows increased by 40.4% from FY24 to $15.8 billion in FY25[19, 77] - Total income grew by 27.1% to $324.4 million in FY25[19, 77] - EBITDA increased by 31.1% to $163.5 million, with an EBITDA margin of 50.4%, a 3.2% increase[19] - Net Profit After Tax (NPAT) increased by 39.8% to $116.5 million[19, 77] Business Growth and Diversification - Managed Account FUM grew by 33.5% and Managed Funds FUM grew by 21.9%[30] - Domestic trade volume increased by 28.5%, while international trade volume increased significantly by 121.9%[30] - The number of financial intermediaries increased by 5.6% to 3,971, leading to a 13.3% increase in the number of accounts to 162,234[32] Revenue and Customer Segments - Transaction fee income increased by 47.7%, representing 14.0% of Platform Revenue[26, 84] - Management fee income increased by 31.1%, representing 6.1% of Platform Revenue[23, 84] - High Net Worth (HNW) FUA increased from 22.4% to 23.4%, and Ultra High Net Worth (UHNW) & Family Office FUA increased from 10.2% to 11.6%[52]

Group 1 - Newell Brands' shares are yielding above 5% based on its quarterly dividend of $0.28, with the stock trading as low as $5.55 [1] - Historically, dividends have contributed significantly to the total return of the stock market, exemplified by the iShares Russell 3000 ETF, which showed a 0.6% decrease in share price over twelve years but provided $10.77 per share in dividends, resulting in a total return of 13.15% [1] - Collecting a yield above 5% is considered attractive if it is sustainable, especially in comparison to the average annual total return of about 1.0% when dividends are reinvested [1] Group 2 - Dividend amounts are generally unpredictable and fluctuate with each company's profitability, making historical analysis important for assessing the likelihood of continued dividends [2]

Core Insights - Newell Brands Inc. reported adjusted earnings per share of 24 cents for the second quarter, aligning with analyst expectations [1] - Quarterly sales reached $1.935 billion, reflecting a 4.8% decline year-over-year, which fell short of the analyst consensus estimate of $1.947 billion [1] - The company anticipates third-quarter adjusted EPS between 16 to 19 cents, below the consensus of 26 cents, and has revised its full-year 2025 adjusted EPS guidance down to 66 to 70 cents from 70 to 76 cents due to increased tariff-related inventory costs [2] Management Commentary - Chris Peterson, President and CEO, emphasized the company's progress towards becoming a world-class consumer products company, highlighting that net sales, core sales, normalized operating margin, and normalized EPS were all within the guidance ranges provided in the previous quarter [2] - The management expressed confidence in their strategy to enhance core sales growth, improve margins, and generate strong cash flow despite a challenging macroeconomic environment [2] Stock Performance and Analyst Ratings - Following the earnings announcement, Newell Brands shares increased by 5.4%, trading at $5.01 [3] - JP Morgan analyst Andrea Teixeira maintained an Overweight rating on Newell Brands but reduced the price target from $8 to $7 [5] - Canaccord Genuity analyst Brian McNamara also maintained a Buy rating while lowering the price target from $11 to $9 [5]

Core Insights - Newell Brands Inc. (NWL) reported a decline in net sales and earnings for Q2 2025, with normalized EPS of 24 cents, down 31.4% year over year, matching consensus estimates [1][9] - The company experienced a 4.8% decrease in net sales to $1.9 billion, attributed to lower core sales, business exits, and adverse foreign exchange impacts [2] - Despite margin improvements, the overall performance disappointed investors, leading to a 5% drop in share price during premarket trading [4] Financial Performance - Normalized gross margin increased by 80 basis points to 35.6%, marking the eighth consecutive quarter of year-over-year growth [3] - Normalized operating margin rose by 10 basis points to 10.7%, while normalized EBITDA was reported at $280 million, slightly down from $282 million in the previous year [3] - The company ended the quarter with cash and cash equivalents of $219 million, long-term debt of $4.5 billion, and total outstanding debt of $5.1 billion [11] Segment Performance - The Home & Commercial Solutions segment saw net sales of $892 million, a 7.3% decline year over year, driven by a 6.0% drop in core sales [7] - The Learning and Development segment reported net sales of $809 million, down 0.5% from the previous year, with core sales also declining by 0.5% [8] - The Outdoor and Recreation segment's net sales were $234 million, down 9.3% year over year, with core sales falling by 10.9% [10] Future Outlook - For Q3 2025, Newell Brands anticipates a decline in net and core sales between 4% and 2%, with normalized EPS expected to be between $0.16 and $0.19 [12] - The company revised its full-year 2025 guidance, projecting a net and core sales decline of 3% to 2%, and normalized EPS between $0.66 and $0.70 [13] - An incremental cash tariff cost of approximately $155 million is expected compared to 2024, leading to a revision in operating cash flow guidance to a range of $400 million to $450 million [13]