Fortune Brands(US:FBIN)2025-02-06 21:07Financial Performance - Q4 2024 sales were $1.1 billion, a decrease of 5% compared to Q4 2023; organic sales excluding the impact of China and one-time disruptions were down 1%[3] - Q4 2024 earnings per share (EPS) were $0.84, an increase of 31% year-over-year; EPS before charges/gains were $0.98, an increase of 3% compared to Q4 2023[3] - Full-year 2024 sales were $4.6 billion, flat compared to 2023; organic sales excluding the impact of China and one-time disruptions were down 2%[3] - Net income for the fifty-two weeks ended December 28, 2024, increased to $471.9 million, up 16% from $404.5 million in the previous year[33] - The company reported a total GAAP net sales of $4,609.0 million for the fifty-two weeks ended December 28, 2024, compared to $4,626.2 million in the previous year[48] Cash Flow and Debt Management - The company generated $668 million of operating cash flow and $475 million of free cash flow for the full year, representing over a 100% cash conversion ratio[9] - The company exited Q4 2024 with net debt of $2.3 billion and a net debt to EBITDA ratio of 2.4x[10] - Long-term debt decreased to $2,173.7 million from $2,670.1 million, indicating improved financial leverage[27] - Free cash flow for the fifty-two weeks ended December 28, 2024, was $474.5 million, a decrease of 41% from $799.3 million in the prior year, with an estimated range of $580 to $620 million for 2025[30] - The cash conversion ratio for the fifty-two weeks ended December 28, 2024, was 101%, with an estimated range of 115% to 125% for 2025[30] Shareholder Value and Future Guidance - The company announced a new $1 billion share repurchase authorization, reflecting confidence in cash generation and commitment to long-term shareholder value[3] - Full-year 2025 guidance indicates net sales growth of flat to 3% and EPS before charges/gains between $4.15 and $4.45[15] - The company expects the global market to decline by 2% to 1% and the China market to decline by 15% to 10% in 2025[14] Segment Performance - Water Innovations segment reported net sales of $2.565 billion for 2024, with an operating margin of 23.2%[8] - The Water segment reported net sales of $644.6 million, down $18.4 million or 3% year-over-year, while the Outdoors segment saw a decrease of $6.2 million or 2% to $303.0 million[24] - The Security segment experienced a significant decline in operating income before charges/gains, dropping to $14.6 million, down $18.0 million or 55% from $32.6 million in the previous year[25] - The Outdoors segment saw a significant operating income increase of 641% to $54.1 million for the thirteen weeks ended December 28, 2024, from $7.3 million in the prior year[43] Operating Income and Margins - Operating income before charges/gains for the total company was $181.6 million for the thirteen weeks ended December 28, 2024, a decrease of $2.0 million or 1% compared to $183.6 million in the prior year[25] - Operating income increased by 33% to $178.3 million for the thirteen weeks ended December 28, 2024, compared to $134.0 million in the same period of 2023[43] - The company reported a total operating income of $737.9 million for the fifty-two weeks ended December 28, 2024, representing a 20% increase from $614.9 million in the previous year[43] - Operating margin for the total company improved by 460 basis points to 16.1% for the thirteen weeks ended December 28, 2024, compared to 11.5% in the same period of 2023[46] Asset Management - Total assets as of December 28, 2024, were $6,561.8 million, a slight decrease from $6,565.0 million as of December 30, 2023[27] - Cash and cash equivalents increased to $381.1 million from $366.4 million year-over-year, reflecting a positive cash flow position[27] - The company reported a total equity of $2,422.0 million, up from $2,293.4 million, showing a strengthening balance sheet[27] Charges and Impairments - The company experienced a significant reduction in asset impairment charges, reporting none for the fifty-two weeks ended December 28, 2024, compared to $33.5 million in the previous year[33] - Restructuring charges decreased by 39% to $2.2 million for the thirteen weeks ended December 28, 2024, from $3.6 million in the same period of 2023[44] - Other charges decreased significantly by 88% to $1.1 million for the thirteen weeks ended December 28, 2024, compared to $9.4 million in the prior year[44] Sales Trends - Total net sales for the thirteen weeks ended December 28, 2024, were $1,104.1 million, a decrease of $57.2 million or 5% compared to $1,161.3 million for the same period in 2023[24] - The company reported a 5% decrease in net sales for the fifty-two weeks ended December 28, 2024, totaling $4.609 billion, compared to $4.626 billion in the previous year[33] - Organic net sales excluding the impact of acquisitions for the total company decreased by $64.0 million, or 6%, for the thirteen weeks ended December 28, 2024[48] - The Security segment experienced a significant decline, with GAAP net sales down by $32.6 million, or 17%, for the thirteen weeks ended December 28, 2024[48]