Financial Data and Key Metrics Changes - The company has experienced a decline in performance this year, breaking a nine-year streak of increasing sales, EBITDA, and EPS [4][5][13] - The company is targeting a 1% to 3% CAGR for EBITDA over the next three years, with a focus on improving the quality of earnings and reducing exceptional items [39][50] Business Line Data and Key Metrics Changes - The frozen food category remains strong, with the company maintaining a leading position in Europe, but has faced challenges due to weather conditions impacting sales [2][36] - The company is focusing on innovation and renovation, with plans to accelerate product launches in key categories like fish fingers and pizza [11][21] Market Data and Key Metrics Changes - The frozen food category has shown growth over the last decade, but recent unusual weather patterns have led to a decline in growth numbers [36][37] - The company has seen a stabilization of value share and growth in volume share in the second quarter of 2025, despite earlier declines [36] Company Strategy and Development Direction - The company is implementing a €200 million productivity program over the next three years, focusing on supply chain efficiencies and overhead reductions [41][46] - The strategy includes a significant emphasis on brand investment, product quality, and innovation to maintain competitive positioning in the healthy food category [41][49] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges faced this year, including inflation and supply chain issues, but remains optimistic about future growth opportunities in the frozen food category [6][13] - The company is committed to learning from past experiences and adapting its strategies to better respond to market conditions [10][12] Other Important Information - The company is launching a new master brand advertising campaign aimed at maximizing media efficiency across various markets [17][20] - The company has a strong focus on health and nutrition, with a significant portion of its revenue coming from fish, protein, and vegetables [16] Q&A Session Summary Question: What has changed regarding long-term targets for revenue and EBITDA growth? - Management indicated that the previous targets were too tight given the volatile environment and emphasized the need for a larger savings program alongside lower EBITDA guidance [55][56] Question: Are the targeted cost savings real, and where will they be allocated? - Management clarified that the $200 million savings target is a cumulative increase and will be reinvested into product quality and innovation [60][62] Question: How does the company plan to manage pricing actions while minimizing market share loss? - Management explained that they have developed a revenue growth management tool to make more informed pricing decisions by category and country [67][70] Question: What is the outlook for capital allocation given strong free cash flow? - Management stated that they will continue to evaluate capital allocation strategies, including share buybacks and dividends, in light of current valuations [71]

Financial Data and Key Metrics Changes - The company reported 2.4% organic growth in the second quarter, excluding the impact of private label products [3] - The company expects 2025 to be at the low end of the 2% to 4% organic growth range communicated previously [5] - The company has seen sequential dollar earnings per share growth during the 2025 strategy cycle [7] Business Line Data and Key Metrics Changes - The company has increased advertising investment over the last five years, which has improved brand penetration and health [6] - Elmex toothpaste has become one of the fastest-growing products in the European market, contributing to record market share [11] - The anti-cavity segment in India is a significant part of the franchise, with new technology combining amino acids and arginine to strengthen teeth [12] Market Data and Key Metrics Changes - The company has seen growth in both North America and emerging markets, ensuring broad-based growth across all categories [5] - In China, 40% of the market is online, with 80% of media being digital, indicating a shift in consumer purchasing behavior [28] - The company has successfully increased sales at Sam's Club by 30 times through targeted advertising and data integration [32] Company Strategy and Development Direction - The company is focused on leveraging its 2025 strategy to drive consistent top-line growth and is preparing to execute its 2030 strategy starting December 31 [2][4] - Key themes for the 2030 strategy include global brand penetration, investment in key geographies, and enhancing data and analytics capabilities [24][26] - The company aims to implement omni demand generation to better integrate online and offline marketing strategies [30][41] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer uncertainty is the primary driver for category vitality, leading to cautious purchasing behavior [59] - The company anticipates that discretionary spending will suffer in the latter half of the year, affecting overall category growth [62] - Management emphasized the importance of continuous innovation across all product segments to maintain consumer interest and drive growth [63] Other Important Information - The company has announced a new productivity initiative to streamline operations and fund strategic initiatives [3][46] - The company has invested significantly in its supply chain to optimize operations and meet consumer demands for customization [51] - Hill's pet food brand continues to outperform the category due to disciplined brand management and significant advertising investments [53][55] Q&A Session Summary Question: What areas of the 2025 strategic plan were most successful and where can improvements be made? - The company successfully focused on dollar top-line growth and building long-term capabilities, particularly in AI and digital innovation [36][37] Question: Why was omnichannel demand generation emphasized in the new strategy? - The complexity of the consumer journey necessitates a more integrated approach to marketing that targets both online and offline consumers effectively [40][41] Question: What will be the biggest changes as the company transitions to the new strategy? - Key changes will include increased innovation, resource allocation to key growth regions, and a focus on omni demand generation [43][44] Question: How does the company plan to address the slowdown in category growth? - The company will continue to innovate and bring excitement to both premium and mid-price segments to drive consumer engagement [63] Question: Is the company experiencing destocking issues? - Destocking is primarily a function of consumer behavior, with online retailers managing inventory more aggressively than brick-and-mortar stores [64][65]

Financial Data and Key Metrics Changes - The company is focused on consistent organic volume growth and margin expansion as primary business aspirations [3][4] - The outlook for category growth this year was initially expected to decline in low single digits, but the company has outperformed the categories slightly [13][14] - Aluminum prices have increased from approximately $1.2 per pound to $1.9, prompting the company to implement a third price increase in the Reynolds Cooking and Baking business [40] Business Line Data and Key Metrics Changes - The company operates through four segments: Reynolds Cooking and Baking, Hefty Waste and Storage, Hefty Tableware, and Presto products [9][10][11] - The foam category is experiencing double-digit declines, impacting overall category expectations, while other categories are expected to remain flat [13] - The Hefty brand enjoys a 98% level of consumer awareness and has been a serial innovator, contributing to long-term share gains in the trash category [28] Market Data and Key Metrics Changes - The U.S. consumer is under pressure due to declining consumer confidence and rising debt levels, impacting overall market dynamics [38] - There is a trend towards larger pack sizes and lower opening price points across most categories [39] - The company has a U.S.-centric business model, with 90% of revenues coming from the U.S., which insulates it from tariff impacts compared to competitors relying on international supply chains [50][51] Company Strategy and Development Direction - The company aims to build a world-class team and elevate the finance team to become business partners driving results [5][6] - Innovation and marketing are critical for driving category growth, with a focus on aligning products with evolving consumer needs [15][16] - The company sees the brand and store brand business as complementary, allowing for better consumer segmentation and price point management [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current operating environment is challenging, with commodity volatility and consumer pressure being significant factors [7][38] - The company is optimistic about its ability to manage costs and drive earnings stability through a more agile team [7][8] - Future capital allocation will focus on high-return opportunities, including automation and innovation [68][69] Other Important Information - The company has made significant progress in offering sustainable alternatives across all major categories, addressing consumer demand for sustainability [58] - The company has not pursued M&A since its last investor day but has focused on organic growth and brand extension into adjacent areas [60][61] Q&A Session Summary Question: What are the long-term growth drivers for the trash category? - The Hefty brand's strong consumer awareness, innovation, and effective marketing have driven long-term share gains in the trash category [27][29] Question: How does the company view the competitive dynamics in the market? - The competitive landscape is rational, with promotional activities resembling pre-pandemic levels, and the company is focused on maintaining its brand strength [19][31] Question: What is the company's approach to managing input costs and tariffs? - The company has seen a decrease in direct tariff exposure and is focusing on onshoring production to mitigate costs [46][50]

Financial Data and Key Metrics Changes - The company reported net revenues of $818 million for Q1 2025, with retail revenues of $767 million, reflecting a decrease of $28 million compared to Q1 2024 due to retailer destocking and declines in the foam category [13][14] - Adjusted EBITDA was $117 million, down from $122 million in the prior year, primarily driven by lower retail sales [14] - Adjusted earnings per share (EPS) remained unchanged at $0.23 compared to Q1 2024 [14] - The company expects 2025 net revenues to decline low single digits compared to 2024 and adjusted EBITDA in the range of $650 million to $670 million [14][15] Business Line Data and Key Metrics Changes - The company outperformed its categories by two points at retail, capturing share in household foil, waste bags, food bags, and non-foam disposable tableware [7] - Non-retail revenues increased by $12 million [14] - The company introduced new products, including hefty compostable cutlery and Reynolds Kitchen air fryer cups, to drive innovation and connect with younger consumers [7][12] Market Data and Key Metrics Changes - Retail volumes are expected to be down 2% to 5% in Q2 2025 compared to Q2 2024, driven by lower volumes and partially offset by pricing [17] - The company anticipates more pressure on its categories, with lower consumer confidence and retailers managing inventory levels contributing to the challenges [15][31] Company Strategy and Development Direction - The company is focused on driving growth at or above its categories, expanding margins, and investing in a more stable earnings growth model [6][7] - Strategic initiatives include targeted distribution gains, prioritizing larger scale innovation, and reallocating promotional spend to higher return opportunities [11][12] - The company is adapting to a dynamic macro environment by investing in high return programs and leveraging competitive advantages [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted that retailer destocking is expected to be a permanent change rather than a temporary adjustment [23][24] - The company is not altering its strategic direction despite recent tariff announcements and a challenging retail environment, emphasizing the need to control its own destiny through innovation and distribution gains [12] - Management expressed confidence in the innovation pipeline, highlighting new product launches and the potential for growth [62] Other Important Information - The company successfully refinanced its term loan facility, enhancing financial flexibility [19] - The updated segment reporting now reflects the international business based on product category alignment [18] Q&A Session Summary Question: Can you discuss the retailer destocking piece? - Management indicated that retailer destocking is expected to be a permanent change and will flow through the balance of the year [23][24] Question: Can you clarify the strategic expenses related to revenue growth management? - Management explained that strategic investments focus on evaluating revenue growth management, cost out work, and supply chain efficiency [25][26] Question: What is the guidance for category growth? - The guidance now contemplates a greater quantum of pricing due to lower expectations of retail volumes, with retailer destocking being a significant factor [30][31] Question: Can you elaborate on the tariff pressure? - Management noted that direct tariff exposure is a single-digit percentage of overall COGS, with significant indirect impacts from commodities like aluminum [38][39] Question: How has consumption performed exiting the quarter? - Management reported that retail business performed as expected, with destocking impacting the P&L, but March showed better performance than January and February [49][50] Question: How is the innovation pipeline looking for this year? - Management expressed confidence in the innovation pipeline, highlighting new product launches and the potential for growth [62]

Financial Data and Key Metrics Changes - The company reported net revenues of $818 million for Q1 2025, with retail revenues of $767 million, reflecting a decrease of $28 million compared to Q1 2024, primarily due to retailer destocking and declines in the foam category [13][14] - Adjusted EBITDA for the quarter was $117 million, down from $122 million in the prior year, driven by lower retail sales [14] - Adjusted earnings per share (EPS) remained unchanged at $0.23 compared to Q1 2024 [14] Business Line Data and Key Metrics Changes - The company outperformed its categories by two points at retail, capturing market share in household foil, waste bags, food bags, and non-foam disposable tableware [7][8] - Non-retail revenues increased by $12 million, indicating growth in segments outside traditional retail channels [14] Market Data and Key Metrics Changes - The company anticipates net revenues for 2025 to decline by low single digits compared to 2024, with adjusted EBITDA expected in the range of $650 million to $670 million [15][16] - The impact of tariffs is estimated to create cost headwinds of $100 million to $200 million annually, with pricing strategies expected to offset these costs [16][38] Company Strategy and Development Direction - The company is focused on driving growth above category levels, expanding margins, and investing in a stable earnings growth model [6][7] - Strategic initiatives include targeted distribution gains, prioritizing larger-scale innovations, and optimizing supply chain efficiencies [11][12] - The company has updated its segment reporting to better align international business with product categories, reflecting a shift in strategy to enhance growth [18][40] Management's Comments on Operating Environment and Future Outlook - Management noted that retailer destocking is expected to persist throughout the year, impacting revenue expectations [23][24] - The company remains committed to innovation and distribution gains, despite challenges from tariffs and a dynamic retail environment [12][20] - Management expressed confidence in the underlying health of the business and the ability to recover gross profit through pricing and productivity measures [9][10] Other Important Information - The company successfully refinanced its term loan facility, enhancing financial flexibility and supporting strategic priorities [19] - Capital spending is expected to increase by $20 million to $40 million in 2025 to drive growth and margin expansion [19] Q&A Session Summary Question: Can you discuss the retailer destocking impact? - Management indicated that retailer destocking is expected to be a permanent adjustment rather than a temporary phenomenon, affecting the full year outlook [23][24] Question: What is the guidance for category growth? - The guidance reflects lower expectations for retail volumes due to destocking and consumer pressure, with pricing adjustments factored in [30][31] Question: Can you elaborate on tariff pressures? - Direct tariff exposure is a single-digit percentage of overall COGS, with significant indirect impacts from commodities like aluminum [36][38] Question: How is the innovation pipeline looking? - The company is optimistic about its innovation pipeline, with new product launches such as hefty compostable cutlery and additional scents in existing product lines [63][64] Question: What are the pricing mechanics and impact of destocking? - Pricing adjustments typically take two to six months to reflect in retail, and destocking has altered the usual timeline for pricing realization [67][71]