Newell Brands Looks To Reduce Global Footprint
Shares in Newell Brands have plummeted by nearly 20% after it revealed a plan to halve its global factory footprint by 2019.
The company announced it would be implementing an accelerated transformation strategy which includes focusing on the group’s nine core consumer divisions and looking at divestment options for its industrial and commercial assets and consumer businesses.
This could result in a 50% reduction to its international factories and warehouses as well as the consolidation of 80% of its global sales into two platforms by the end of next year. The move would also reduce its customer base by half.
If fully actioned, the group expects to improve its margins and growth potential as it shrinks its portfolio to around $11 billion in expected net sales and EBITDA of $2 billion.
Newell Brands CEO Michael Polk commented: “We are committed to achieving our transformation objectives and are taking decisive action with speed to adapt our agenda to the unprecedented volatility in our retailer landscape.”
He added: “We believe that exiting non-strategic assets, reducing complexity and focusing on our key consumer-focused brands will make us more effective at unlocking value and responding to the fast-changing retail environment.”
In preliminary results for 2017, Newell slashed its previous forecasts. It now expects sales growth of around 0.8%, down from 1.5-2%.
This was despite double-digit growth in its e-commerce business and an increased market share.
It said it would be providing more information in its Q4 results and FY2017 report in February.
In related news, Ian Ashken, Domenico De Sole and Martin Franklin have resigned from the board of directors, effective immediately.
Chairman Michael Cowhig said: “With our first full year as Newell Brands behind us, this is a natural time for the board to evolve. While there is still much work to be done, Domenico, Martin, and Ian have helped management and the board bring these two great companies together into one of the leading branded goods companies.”
Source: OPI.net