Core Insights - India is experiencing a gradual shift towards menstrual cups (m-cups), driven by cost savings and ease of use, which also contributes to reducing waste generated from disposable menstrual products [1][2][3] Industry Overview - Approximately 12.3 billion disposable menstrual pads are used annually in India, with a significant portion being non-biodegradable, leading to a projected waste burden of 130,000 tonnes by 2030 [2] - The market for menstrual hygiene products is evolving, with commercial product penetration increasing from 17% in 2017 to around 40% today, while sanitary pads still dominate 92% of the market [8] Adoption Rates - A study found that over 90% of Indian women are willing to switch to m-cups when informed about their benefits, with acceptance rates varying across states: 85% in Maharashtra, 80% in Telangana and Jharkhand, and 75% in Karnataka [3][5][6] - The HLL survey indicated that 91.5% of women were open to using m-cups after attending an awareness session [5] Market Dynamics - The m-cup market is projected to grow from $38 million in 2024 to over $56 million by 2030, indicating a significant opportunity for companies in this sector [9] - Monthly sales of m-cups have surged from 2,000 pieces pre-COVID to over 50,000 today, reflecting a growing consumer preference for sustainable products [9] Economic Considerations - The cost of disposable sanitary pads can accumulate to thousands of rupees over the years, while a single m-cup, priced between ₹250 and ₹1,800, can last 5-10 years, representing a substantial long-term saving [11][12] Social Impact - Initiatives like the Karnataka Government's 'Maitri' scheme and Reliance Foundation's "Simply Periods" are promoting the distribution of m-cups and raising awareness among women [14] - The growing acceptance of m-cups highlights the importance of accurate information in driving sustainable choices among women [15] Challenges and Concerns - Medical experts emphasize the importance of proper usage of m-cups to avoid health issues, while concerns about the quality of low-cost m-cups in the market have been raised [16][17]

Financial Data and Key Metrics Changes - For the full year 2024, the company achieved double-digit sales growth and increased adjusted EBITDA by more than 30% [10] - Consolidated net sales for Q4 were $620.3 million, representing a 13.8% increase year-over-year [36] - Adjusted EBITDA in Q4 was $118 million, a 29% increase compared to the same period in 2023 [38] Business Line Data and Key Metrics Changes - The consumer vertical saw pro forma revenues grow double digits, with adjusted EBITDA increasing by over 27% [25] - Lugano reported annual sales growth of more than 50% and adjusted EBITDA of $195 million, a 76.4% increase year-over-year [26] - The industrial segment experienced flat sales and a modest decline in adjusted EBITDA as the company focused on long-term repositioning [29] Market Data and Key Metrics Changes - The CODI Momentum Index, a gauge of economic activity, currently reads 1.06%, indicating a stable outlook despite a slight decline from year-end levels [18] - Consumer spending remains steady, particularly among higher-income consumers, which is expected to benefit the company's portfolio [19] Company Strategy and Development Direction - The company is shifting focus to more innovative and disruptive businesses to drive long-term value creation [11] - Strategic acquisitions included the purchase of Honey Pot and Lifoam, while divesting Ergobaby and the Crosman airgun business to optimize long-term focus [12] - The company aims to identify and support strong businesses with innovative and sustainable models, guided by a buy, build, and grow philosophy [21] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about prospects for 2025, expecting resilience and growth in the economy [17] - The company is monitoring geopolitical uncertainties and believes its subsidiaries are well-positioned to navigate the evolving tariff landscape [20] - The outlook for 2025 includes expected adjusted EBITDA between $570 million and $610 million, with a focus on growth investments [43] Other Important Information - The company raised over $115 million in preferred equity in 2024 to improve its capital structure [13] - A revised management services agreement aims to reduce long-term costs for shareholders and align management compensation with shareholder interests [15] Q&A Session Summary Question: Guidance on branded and industrial growth - Management indicated that growth from Lugano is expected to continue, but they have a more modest overall growth forecast [53][54] Question: Impact of PFAS charge on 5.11% - The $11 million charge related to PFAS regulations was noted, and management confirmed that adjusted EBITDA would have been significantly higher without this charge [57][58] Question: Tariff exposure and portfolio positioning - Management discussed the proactive steps taken to diversify supply chains and mitigate tariff impacts, feeling well-positioned compared to competitors [66][70] Question: M&A activity outlook for 2025 - Management expressed optimism about the M&A environment improving slightly in 2025, with a focus on acquiring innovative and disruptive businesses [72][74] Question: Performance of Lugano and EBITDA margins - Management attributed strong EBITDA margins at Lugano to operational leverage and effective buying strategies, while also noting potential margin dilution from new salon openings [86][88]