Starboard Value LP, which owns approximately 3.8 percent of Newell Brands, announced that the company has released a detailed presentation outlining the opportunity to create meaningful value at Newell. Starboard’s presentation provides an in-depth analysis of the multiple initiatives that Newell’s management and reconstituted Board of Directors can implement to drive operational improvements while overseeing Newell’s asset divestiture program.
Starboard’s presentation is available for viewing at the following link:
In the presentation, Starboard stated its analysis shows that Newell’s EBITDA margins are significantly below management’s targets and best-in-class peers, despite its product portfolio consisting of valuable brands in large, growing and unconsolidated global categories.
Starboard believes that Newell owns many valuable assets and should evaluate strategic alternatives for them, but the strategic review must be comprehensive and weigh ALL options to determine what is best for long-term shareholder value creation.
Based on the operational improvement plan, 2019 EBITDA would increase to about $3.1 billion (with Working Capital ultimately decreasing by about $800 million to $1.1 billion), resulting in a significantly higher value for Newell. The presentation identifies specific opportunities to increase annual EBITDA by between $585 to $966 million by focusing on reducing SG&A as well as enhancing procurement and logistics.
Jeffrey C. Smith of Starboard stated, “As part of our campaign to drive significant change at Newell, we have conducted a tremendous amount of research to understand the company’s issues and opportunities. We were pleased to reach a settlement with Newell, which resulted in a Board that will be comprised of nine of twelve new directors. For the benefit of the newly reconstituted board, the management team, the employees and the shareholders, we feel it is important to share our material findings and recommendations. We believe the released presentation illustrates the significant value creation opportunity at Newell. We expect management and the Board will carefully review our presentation alongside their own internal findings and observations to coalesce on an extensive operational turnaround plan at Newell, with the goal of maximizing value for all shareholders.”
Newell Brands include Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Coleman, Jostens, Marmot, Rawlings, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, Contigo, First Alert, Waddington and Yankee Candle.
Newell’s Play segment overall includes Berkley, Shakespeare, Abu Garcia, Penn, Ugly Stik, Rawlings, Coleman, Contigo, Marmot, Aerobed, Camping and Sterns.