EPC - Earnings call transcript Q2 2019 | Edgewell Personal Care Company

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Operator

Good day and welcome to the Edgewell Personal Care's Second Quarter Fiscal 2019 and announcement of the combination between Edgewell and Harry's Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Chris Gough, Vice President, Investor Relations. sir. ahead go Please

Chris Gough

we morning, is as Jeff thank the Chief quarter co-founders we as Chief With Dan transformational earnings Good combine Officer, Rod quarterly morning the Dan we'll us replay with Executive Little, and recorded will This and Edgewell full-year the fiscal for Officer our Katz-Mayfield through this Financial then will two call, Harry's. transaction the available to transition as be off full will and Andy morning discuss this over well our call, take earlier announcement. you call everyone, www.edgewell.com. you. and this you to to the Harry's, morning and me joining of is XXXX to announced Rod our Thank Sullivan, Raider. to Edgewell's will and via for second President website then outlook results details being kick team morning's hand of discuss briefly and this

cause forward-looking maybe materially may the implied expectations by events. performance. on for the statements caption risks under are views future about statements or our Report our as our with statements. different are future based and call, various amended to on ended XXXX, These XX-Q. from in uncertainties, on Annual subject These and included our respect forward-looking those current in Form are and such statements Risk to Any results year expressed quarterly make assumptions plans we risks During which statements, reflect Factors actual may described XXth, XX-K for our to those September the Form our reports be

the non-GAAP like not financial to our measures at of to we the of measures. financial directly in the with accounting website. most to With reconciliation issued which Investor press I'd are comparable principles. measures earlier that, call, will the over Rod. call accordance certain in non-GAAP this release to accepted generally today, During section non-GAAP Relations are GAAP measures turn A prepared refer shown the is These available

Rod Little

I'm Financial team. listening be Katz-Mayfield Thanks, everyone, Chief morning as co-founders our and this in of morning, also to as like Harry's Dan new the are Edgewell many and know in say I'd and particular, Chris, well Sullivan. of hello and which this by good the Officer, joined Harry's, Harry's morning Jeff welcome Andy to thrilled Raider, I to the colleagues, to

presentation to of of rationale Our runway intent we announcement discussing the made this get to morning the most spend will to combine time and on transaction the with our Edgewell Harry's. be details commercial our and A website we'll posted is believe growth combination expansive brings platform, that accelerated bit. consumer highly with assets this positioned an complementary creation. allow us and in capabilities to We a collectively enhanced value and products create together next-generation a uniquely top-line that for

have learned met talented key our the consumers significant partners. base dedicated markets, really themes this our trade, retail key spent colleague Over on emerged. with and Edgewell's with and traveled the and the for Dan, now. in to of handing thoughts I've I briefly to our early been wanted over to about my call the some and many Over this state Before of my having of role months business two time, insights, time, and our engagement few deepening time share on focused I've things some with a

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forward. our sun on our model and strategy the business skin grooming, stronger by a core announcement Our strategy categories, is only and path to made focus today's refine right

brands. our we and that well-established scale will And and a portfolio trusted more and have convinced disposal, strong IP at of I'm infrastructure global and assets world-class product as Additionally, ever Dan than technology, Project our is providing minutes, and to how the few to catalyst a financial necessary capabilities. we build and business, as flexibility share importantly, reinvest change, brands serving a operate in for this redefining Fuel

have a improved today, in brands, form have lead do. simple and next we capabilities say the providing be platform, in Harry's to support to of and that coming modern shortly. Jeff begun stronger consumer of I consumer to announcement consumers. am better renewed interests provide focus Dan, that of to unique confident the combination the will on portfolio laser-focused everything will Edgewell growth to this partnerships. positioned all aligned results of are And this We a the pivot will consumer retail I And the more assets, the brands Andy, objective, to generation and a products be ultimately to and meet leads needs together and this of that on

So, see have urgency strategy our with we're we're as we still, sitting forward, you clear path can not against executing a and precision. and

through our on fiscal update an with turn outlook. results to quarter Dan like So to that, our I'd second you it to take and over full-year

Dan Sullivan

I'll out across highlights Thank good posted Earlier as as our well full interest categories earnings remarks morning, quarter, in fiscal markets. in a and press the you, the of and Rod, my the Overall, on detailed largely focus the time, so business the today, release, as everyone. we outlook quarter year. various expected and played for financial

degree A&P in largely able QX, quarter, impacting the continued headwinds management of in scale we focus, a a as tailwind and meaningful of these results. well up strong faced cost margin mitigate As the Fuel to with initiative, we our lesser as our spend. and from issues to We shift last transitory result gross telegraphed top-line timing were the

helped expectation, objective slightly our our earnings these in business. share profit of were care, to per this to sun due us above deliver the sustainably $X.XX below improve profile results actions and expectations to quarter, slightly adjusted to reinforcing in primarily the continue While our top-line clear

impact acquisition the currency. sales from in net turn let's X.X% specifics organic sales the Jack quarter. translational XX%, exclude Now, benefit Black or some to basis. Net negative the an on from the Organic decreased and

for timing about and combination organic putting of contributed headwinds declines, patterns to notably and These as timing care the in the the included X% minus results third the underlying quarter. mentioned, Japan basis transitory shipment quarter and issues year, change season of XXX in XQ. year-over-year at points the the of into which business the As most on result sun fiscal sales one-time shift both a provide the for this the in Easter of tailwinds will our impact

in reformulation Additionally, from the ongoing blades XX% quarter, organic measured year underlying products our pricing meaningful in Genie trajectory razors this net decline men's we period we latest the latest a as in items nearly the infant dynamics data, was as of Briefly rebound X%, Paw to down share basis in down X.X%, care We quarter, and again, competitive mealtime down underlying driven ongoing transition category product market Nielsen, in was was half launch, the in and X%. negatively and a development to blades in basis, share Nielsen of as rebound result was category we at up care two fem year the a believing sales. sales are losses. year. a estimate X% as a saw looking which by by largely We women's and share bring related trend share perspective, of intensity to primarily at basis shave, US, Patrol Diaper to a the result This the distribution an understand decline systems declining our down shave, approximately a points. in in ago in solid On the organic a points the From quarter shelf these as wet from as we data, sales The decline actions US XX-week new in cycling by of as prior XX-week a sales North sun in improved was care in due important ago. new down of the efforts. America as it's our measured well a wet impacts Walmart. our and the XXX X% by mentioned, with and headwinds impacted particularly with razors global was, down XX believe disposables

was and lower sun XX-week and the our in in Asia-Pacific attributable previously the product and North by fem and and timing promotional in season as not of rate points, promotional and a efforts and points period, fewer America promotional reflecting on the million, expense price directly X.X% to XX.X% of activity. launches The negative to margin the of North spend nature. slots reformulation driven early this was XX.X% including this the the was period. therefore, compared declined US XXX The four to a net care, distribution costs. volumes commodity America, of expense in including primarily Gross or new margin approximately XX.X% the share unfavorable mostly care net transitory further result million, amortization headwinds eliminating shave mix, increased compared issues and impact impact A&P consumption as trade continued structural of XXX only compared wet in spend through increased year-over-year sales or Fuel the prior-year discussed, category, to reduced shift a basis the was of and of by non-productive basis X.X% year certain as one-third lower impact our and to segments, roughly year-over-year quarter sales, Within in XX% decreased our with declines expense, factors, period. compared net focus in SG&A, to net $XX.X effects, program. as quarter, prior timing prior of and sales decrease a the mix sales A&P fewer [ph] product prior-year year, to $XXX.X of

to The one-time higher strong SG&A rate inflationary basis effective the increases were compared expenses. first in per more operational Fuel adjusted management, compared driven year XX.X%, points prior by tax $X.XX SG&A led than year prior net the rate cost the half earnings by of period. as and of sale. XXXX earnings decreased $X.XX in period, fiscal to $X.XX offset period. and XX million were $X.X was our share Excluding diluted in improvement for prior which increased and program, GAAP was largely year comparable The to per was the which e-commerce in share $X.XX items, adjusted

Fuel. to Project to like I'd turn Now,

year. in the to fiscal on and We track savings to gross million continue for full strong deliver progress make $XXX remain

Project gross million bringing Fuel million, approximately to-date. $XX savings quarter related for the savings cumulative project gross were $XX Second to

increased and productivity key across growth SG&A, manufacturing funding continue and these initiatives. our efforts, around realizing savings scale to offset In and while also broadly, quarter, helped and reduced partially to reinvestment our more We provide brand gains the up trade dollars. spend productivity driving inflationary headwinds non-working

one-time pre-tax to XXXX We million to investment the in with fiscal end Fuel $XX And will end $XXX continue to an million to annual total $XX million XXXX. estimate capital $XXX approximately charges to generate Project through by fiscal expect year. additional million, savings million gross the $XXX of be we of million $XXX that of

outlook. turning our Now, to full-year

maintaining are share. full guidance and organic previous our We per net for earnings year adjusted sales

digits with the continue year, to be end We reported with acknowledgment sales likely higher declines. top-line that to to prior range results the expected down compared point expect of of net year-to-date the the low-single the

Our reported Playtex sales from point Black and impact an and benefit Jack close unfavorable include acquisition expectations currency point combined an XX basis basis from the approximate translation divestiture. XXX

wet and year, half many just shave in of the the the please discussed, timing issues year. model North including impacts sun you As the America in fiscal to half Japan were quarter the care second second note the and that of the of turn related tailwinds second will that to transitory

the is continued the outlook pricing by the second through ongoing in driven of despite North half, estimated in $X.XX wet Project half. with rate Fuel at and intensity with sun reflects shave, lower improved run advisory infant expected impacts expenses evaluation care is to organic America shelf in improvements the in care GAAP outlook reformulation performance range EPS Fuel costs, costs GAAP restructuring Black for includes to an Project EPS care fem gains fem businesses. the driven care by Our the to infant of $X.XX, connection compared and costs, the and first primarily change outlook associated incurred The integration The and also investor Jack and charges, and settlement competitive care costs. now

expected savings fiscal expected XX.X% call Fuel to to Our Fuel approximately adjusted The and million effective million, $XX XXX% the to that, estimate net capital $X.XX. remains range $XX Rod. to are in EPS tax million charges back of over I'd is XXXX be range gross to generate in And $X.XX incremental above to related of year like in million is million outlook Project $XX Project that And of with we the for restructuring approximately $XXX and hand to earnings. and still the the to $XX cash respectively. GAAP be free rate to will fiscal estimated XX.X%. be flow expenditures

Rod Little

Dan. Thanks,

we now over for walk and the tailoring again our here at flip of of that, program. major Project a transformation note we're get more Edgewell simplification, as in So, you before that posted cost investor takeout, have to to the to presentation site that been the going down local the on But we rationale combination. path call year: the capability past out it, and is important innovation we it's our through regionally for Fuel, investments into and

to sun to or and transformation leadership playing months. place strategic This focus grooming, build to XX in skin over to is about a the new core and that across with scale combination, and leaders importantly, in we be the the timeline, and this of we're to build portfolio renewed last And team priority confident successful. on our combination win, with and core. a have accelerates talk new We our that Company moment we're new that XX strategy top we'll XX we're the in have either the centerpiece to position to a going

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mentioned leadership I've So, our new team.

have the this know, CPG as position. month us public that brings new CEO team in new fold. and experience, being a to across Dan I'm two dynamic new perspectives together experience the coming meaningful here last refreshed the place and position new into deep We months CFO. now joined at as you company leadership the Company in

and and years in built post they significant under the Jeff retail period And is experience lead public our his a a short well now watching to consumer over make laser focus into bring is and XX work, all and win, his they of that, while relentless and what focus team I've combined shift Canada. past US. team and inclusive win our relatively to very build will background, good Dan's been And know but close, the an and great leadership here. the to in COO And the we'll passion on across And gotten business Company will over States. to time company business with international with international And Colin, recall our Andy bring business leadership. you and important and a have both expertise, grow been Andy his And Jeff this As architect of our have international leadership, we done results industry helped Colin's and in because international now. continue the for the United in they've our a accident, happen of creativity fun. they this top it we no move,

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So CPG expected combination, financial high and top-line our enhances compare a and combined our profile a growth this the structure average, favorably and unique gross the is XXs years. over profile few on next growth digit mid-single the very versus with it margin Company margin

now about to the and Andy it to capabilities. talk Harry's pass the little on story going to a I'm So more

Andy Katz Mayfield

really is has to I a to a to a emerged play. number I in the from geographies be excited we've background of grown And founding direct-to-consumer by slide real into brand. the think points. Rod. success are consumer. since experience. as start built of I at as build we've the and know that to clear omni-channel the this different significant global other shaving I'm excited and pain razors as in success giving our and consumer everyone address a extend brand I kind and frustrating across consumers here Jeff the little brand purchasing we after really result, care men's that out two and Thanks, which its team and on And focused I'm founded business we I personally joining and drug store. needs channels company We've team fundamentally driven a had to We've set Harry's been XX significantly brands had ability a evolved Harry's by the of morning bit a categories. entire you a now. Harry's on experience and focus on rest on well. That's the relentless and be wanted We

that's get customer our in tremendous and drives to direct and loyalty relationships us know consumer, insights enables high learnings platform these understand of in to reflected key actionable degree generate better advocacy. direct-to-consumer into a turn satisfaction. and Our which And

moment our On I next to business page, wanted a is I unpack a key success to approach, because take our as it and differentiation. a think point to the of omni-channel key really

over our with in-store experiences consumers, better success our Harry's And marketing, and our and a of packaging, enables data and business consumers, drive real moreover, our for it mentioned, We've business direct-to-consumer see retail millions in enables reach retail retail to learnings environment, us deep design had retail personalization and allows the branding paired able direct-to-consumer so and in and so in the in disruptive externalities our direct-to-consumer and interconnected we progress retailers time. We two and we UK years shaving our significant About And similar across excited US. than a the new that launched notably brands steeper strong excitingly, we we women's really and in blades we leverage wash, truly our of of US differentiated deeply and most launched channels a and in a into response saw As experiences and into our share brand use recently after been and replicate data the and US. trajectory leading the learnings in our period launched in have are those new platform of and categories several outside a our We all where to relationships were direct in razors soap at extended we've and drives about Boots to-date. creates We've and brand the traction our the the brand boosts playbook of recently techniques and already start ecosystem. what when moreover, body on We're turn short in seen DTC really seen markets, categories, perhaps and achieved just we to at and success for store time. ago, Flamingo, has success and a them had this a our there the environments business most product direct-to-consumer bunch which positive insights interconnected. to-date these play. success are bar marketing business two environment. from of take lot to we're of and awareness there we marketing the this

As the what's this Rod a we've few really about know that, to think I mentioned, and gotten past exciting vision. Jeff and other months each over for most share common I, is we

at sort we pass to I landscape Rod. that way, the us [ph] about product that to that, excited time. it consumer back we're we think, a really deep first consumer we to the going And opportunity and over to belief same the the this have of unlocks I'm with put for look share more have impact

Rod Little

little to bit the XX, combined to moving Company. So, slide new a we're about going talk

So, combined portfolio. business have positions category combinations. on attractive slide categories the XX, with very plays in leadership compelling market And brand we in you many a see

inflect we've more we're the positioned to and certainly declining together their to innovate scaled through were a a and got in to believe and and demonstrated that growth we've that prior retailers to think growth to shave and ability now the bring category now Harry's trends shown brand I separately into to well disrupt ability while also skin. in also categories in real innovation way category, sun driving back their bring has building arrival. trends positive and we

more with XXX So, have that we about deep robust earlier, pending. technology have patents, plus X,XXX I a another we portfolio. than talked

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have to up this And So, distribution to innovation the biggest for footprint there moving for all Flamingo ability business. Edgewell you the opportunity global new time over existing at for is infrastructure we've where capabilities. single Harry's the our and robust and can expand business Harry's sets with finally, space a probably the around here as with is this we our white we forward across of evidenced have infrastructure capability see, the acquisition. growth a by and go-to-market drive combination combined Flamingo for tripled opportunity since materially capability as proven massive Bulldog, well and and expansion brand And us a

that I'm Jeff to going slide it for XX. with pass to over So

Jeff Raider

Rod. Thanks,

As about Andy working we're the and excited unlocks. really Edgewell mentioned, you the that combination, and this about the both with opportunities team

there to While opportunities of our US core shave Company, wet lots are go-forward is our combined to plan. grow

First, profile margin and a think category has attractive and around an products, category, is shave care. it's attractive we build personal complex great guys with to equity

personal super grown the in category products portfolio, opportunities years. technology getting on we've and the market proven innovate of care share We've also at had definitely and growth in its Edgewell's partners. share. While to the And see we access should excited driven coming their retail have a doing shave vast by innovate has and take can we have collaborating done appear to and to set this so, over shelf. our and challenges, that with retailers broadly We're rethink about team shave how brand

we first of adjacencies there Harry's, attractive this and segments have Boat can and as XX, think to the is have generate work XX, we better focus needs brands them. existing to we that equities expand Banana our on extend our platform new opportunities on to and team. into page plan personal of to top excited brands, deepen the categories about focus and their meeting develop their portfolio. summary, products really the we our build approach ways in needs, over Black, them thoughtful new product want to by and Edgewell also you in meet the that existing brands playbook Within developing of to large can the we Jack what using On in XX, our categories, look the of they omni-channel to the in our brands, Bulldog, extend also drive proven utility space. DTC, lots growth see Overall, we products to into we building exciting leverage brand brands. on omni in and landscape. opportunity and today. internationally, We and channel. for and the together across new positive retail do deeply globally at how personal build grow Flamingo, exceptional and we're customers think to excited or drive growth. aim equity the And again These white brands in continue manner, to care On needs We're other customer, strong build combination, address they as an satisfy with to on categories. on new with leveraging the them Harry's to equity understanding to care developed We'll landscape, relationship, them, and a really based We approach new and while and on those meet have we attractive customer-centric we've time a opportunity global Moving they we the ability new page generally. we start there page and brands, reach addressable getting customer. lots Flamingo, for of starts omni-channel know It brands portfolio, this are all innovate our

So, pass this now we'll to Dan.

Dan Sullivan

case, Andy lot incredibly and have laid Rod strategic an rationale I'm talked value strong Jeff. pivot combination, and this We've for for so shareholders. proposition clear talk the the about I Jeff a compelling about our going out think, Thanks, to and so far

with combination the equity. mentioned, this, turning A, of billion, bank committed B page priced to we've of cash with loan attractively loan So as In fully term financing XX% in price consideration in XX, term and and XX% a is facilities. revolver, the support secured purchase Rod $X.XX

EBITDA generation or between deleveraging down flow driven on and pay evenly X fairly The of basis. is organic approximately X this this for about debt the transaction, of financing our a per X times up year, cash So, necessary times securing just leverage lining to debt anticipate in maturity flow of close, At better with we a cash addition laddered total the ratio generation. of allows free and growth. turn net for profile, over we've expected business well

We And out, not accelerate two times deleveraging debt point figures are important potential it's targeting by of which this leverage profile. year post-close. proceeds, these contemplate under total divestiture to do just X.X would

think with growth, mid about algorithm, we well very will Turning to above outpace single-digit industry broader and we believe page a as this financial will profile top-line for we the the compelling anticipate attractive XX, which business, historical trends. our be

also, disciplined and Additionally, margin efficiency gross focus scale a how profitability, will and in Edgewell's focus and maintaining strong sustainable levels, the growth, on the as business we cash on allowing leveraging in us productivity EBITDA flow profit we of operate fuel while sheet, deleverage growth deploying structurally And growth this the business. capital also to will generation, free objectives. support balance strong this our demonstrate

is of synergy a compelling, for to Turning XX, synergies. with this page and combination transaction strong the outlook revenue cost

opportunities we and sustainable to combination leverage commercial key scale for Harry's and about. of largely growth. important while as our market the have Now, brand revenue look which that, expertise, and component is And insights we beyond and Jeff the And form rationale explore expansion, deploying strategic expansion expertise, this We'll revenue building said profile. talked and omni-channel technology, the move Rod brand consumer-centric provided global opportunities, synergy based underpin also will and having top-line the and growth infrastructure. on also that profitable Jeff an synergies Andy Edgewell's outlook. category

on run synergies $XX million to operations and $XX focused also EBITDA synergies million of basis. going focusing And this So, and thoughtful extremely we highly across two rate revenue important to existing equal them. annually cost efforts cultural bring cost foundational companies the on addition proper There on we achieve Fuel to savings ability initially with associated especially the cost and synergies, these together. to note have sight to are program. how it's our we're amounts as approach are rate transaction, these compelling in we in sourcing, distribution and a to And pillars a be to in confident run strong are this manufacturing, that line important

more financial talked for we've opportunities, to XX, represent anticipate a XXXX, about business full and I year now, the turn which XX.X% we will we $XXX by And a on the EBITDA focus and We the in XXXX. specifically synergy year $X.X net or synergies net attractive rate of profile sales page expect sales benefiting rate finally, As bit about first on $XX to billion, of close. of million full EBITDA, post we basis. anticipate million run wanted supporting

this or the in slide XX, last unlocking And the that compelling XX to fundamental to At transformational critical spent so, minutes opportunity. page a closure, the we enablers are are six see turning combination. discussing the value so core there on in as you

to for our I'd creation its sustainable deliver over the back to We turn top-line growth opportunity Q&A value is with and unique and we convinced and a operator success, And shareholders. will like this call session. committed accelerated to ultimately, for the are the that,

Operator

[Operator Citigroup. from Nicholson first Instructions] question with Please Our ahead. Wendy go today comes

Wendy Nicholson

Hi.

wise, EBITDA side first putting just us brands by housekeeping positioning how And on quick -- a thinking price, shelf bigger you then, is each to on the DTC tell premium sure these was as picture, other or question. either historically? item? don't the do you have complement year more a how these last better one image-wise, I side Just side Harry's that been about extent each they shave, guess like, direct other same one a website, cannibalize think and make as what you pricing a Can brands Thanks. brand two side by about are is same them on you the

Rod Little

Thanks, Wendy. Good morning.

We not at So going point. disclose that question, on the EBITDA we're can't. to this

very he and the to brand work to addition as I'll the I'll a Jeff, high this focuses level. the portfolio from of side. because Flamingo be view the positioning, over start going complementary on at it one. is On day But on women's brand Harry's some the flip to we the

on products, women's which this it some consumer the a very here needs in together plays Jeff that you or meets put the If work, are is ladder, think within to going room systems portfolio of well. tiers, totality about or segment pricing is do team the today, the our price of play the I and how where the consumer think target whether and way Harry's and to you be Jeff? men's there architect is focus And across and segments all

Jeff Raider

the very Harry's women's, as I consumer brand specific category. different think, one about want with a we in what are And learned and and Flamingo Yes. we consumer this Wendy, they segments lot focused a in on segment. have

those are excited equity but brands do play of think and focused very that. that a is to are role. that on, role, can not play the segments a that we we the are we there brands we're in the that Beyond also the about that other the think important to pricing being And category segments against fully addressed opportunity driver

a think life. can more have that as to comes we we We perspective on forward to this excited move share how and we're

for think the of I be Harry's just platform the to would would their thing portfolio the they on the for on sites mention our that building the Harry's but think we stand-alone Edgewell remains could stack, brand then and consumers. those vision top sites and DTC DTC of is, be focused technology brands on harrys.com other the about equities

Chris Gough

Okay. you, Wendy. next question please. Operator, Thank

Operator

go Wells Fargo. And our with next Herzog Please ahead. question comes from Bonnie

Bonnie Lee Herzog

is that what Harry's implies be for have accelerates, profitable it I And assuming the I'd the your this now? congrats. ask so Good you. you For that guess must I'm cannibalizes? And sales of portfolio? decelerate long-term -- for about you possibly a stabilize in question. if is does portfolio, how Edgewell and this my guys some right on existing growth are that quick possibly Harry's trajectory thinking Can the question Edgewell targets the be hear then, I just trends instance, potentially curious morning combined Thank I for assume the right. All or possibly consideration and as to your further targets? growth reality there underlying housekeeping guys

Rod Little

Yes.

to that Harry's the about is They've it EBITDA. Bonnie. one. leave breakeven breakeven at position, Thank morning, good So, for talked of approaching that past you. in be that going Generally, 'XX in that

of and the of terms not targeting this how come we In timing We're close combine QX is point together, at calendar known. XXXX.

see Jeff So and talked we our and ability capabilities bring that leadership of portfolio to the the And of how business to little as trajectory we part our to point, DCC in improve the bit already over brand positioning with work, that business. and Edgewell Andy's the thing thinking And that's brand that to we're the the of the competitors about Edgewell a performance but they definitely to Jeff do time, have will synergy. about exploitation. that combination, apply the some

of be into being synergies that's We that to of the both that together. that the For much comes portfolios combination both how together. when done and determine example, get ways. that's on won't together coming to how comes driven see by I timeline work and frankly,

Chris Gough

next please. question Bonnie. Thank you. Operator, Okay.

Operator

And from Dibadj our next with Ali question go ahead. comes Bernstein. Please

Ali Dibadj

cynical seem bit core I One I view guess, razors I quarter. you would severe guys. this is, under acquisition example, cynical down pressure, two-part business question. in be view smacks a a really apologize Hi, double-digits that the defend continues to for but doesn't more be the relenting, your have saying for little here, and of how desperation, this, the to

smells with emailing it been So, acquisition morning. of a large this this and we've make pretty now folks odd you expensive, little the to some

what together the And leadership, can be. the is new you how North second would of do leadership entities in you perspective certainly would combining this And the new never thing thing integrated particular logic the that? outside the defend the how We've seen type and the So, then from of brand into structure, work understand you the defend before we've seen Company. when the in it America? is, actually

those appreciate Thank defense of skeptical So, of your view. points you. two

Rod Little

yes. for been been about done, at this Thank what while, overnight when the you Yes. I something question, to in core it get to the we've while conclusion a or this that quarter. choices we we've change that We've that looked win for of the we last is our Harry's for one looking and you is, made the a focused Ali. time. was, portfolio, and and Look, strategy in at be from not talking portfolio we've can and our for successful at at long came afar be And on we look a it. as has things really core totally looked

capabilities. technology, IP, right the have We scale,

bigger with even can via have our faster win we categories and we transaction. here win We Project core right think a and transformation Fuel in have the to this

that's an in moving And now, year step remarks, the to not that's at and a so that's how don't improved to. we're quarter And look mentioned and the back his from It's where over happening just now We've just forward. right performance the as we've three not. this something implied isn't that's are arrived Right. got Dan of say, let's next up we months. half, significantly finished in six

we in And like base our look when at for profitability when we've the time growth, is combination, businesses So, feel avenues at drive to at makes is to the And Edgewell, the now look logic. complete the you both it sense this. as ourselves right been for avenues you transforming do greatly improved. the around

common been Now, I've to successful? your I've of many we it of work this a things different second here. of question shared in One around, historical that seen through this, not be you both but are my sides we career, of I together is part a I'll unique and start couple well. can take with Look, values. points do come and set believe can

Okay.

yes, culturally, can we we look can, happen. this it we make work make we it at we that say, and when can say, So

point more as of this globally, are The are path, a second is not to America and category entrenched CPG in And we transformation operations has some piece to that global we in where a view, the plan. running COO player specific North from addition big be been leadership little others a like is, key in our against. open our transformation our and business. a compete billion headed down for of part of Company business We're Colin double the $X the we are we change this a mid-cap

big in a boost Andy Jeff focus. our business, leadership lead as and so, to US capability it's immediately and And plugged in

going all we would your get Anything for it to you right. again, but out so, you can this guys will we're judge And add play or well not, we're it perspective? confident and from doing

Andy Katz Mayfield

the of have our for get Andy. about lost more entire and impact business was on situation what Rod where bigger have to that not right, shared And and we think vision combination Yes. a to some what this company's larger the This ability compelling US mean is. of is against inside roles was I the I really vision. our execute company. exactly platform and us take is the mentioned

different and bit precedent from situations. I think in is a sense, combination it the of some so, a And that unique

Rod Little

capabilities brought with And Ali, they new worked our point acquisitions founder-led lot of Yes. brought also the Bulldog made we've founders, back you two shaped have that transformation We thinking very a recent I'd plan. and well Black, positive happening assets that things tripled with relationship a with there little that them good acquisition which is and own the over a we they have Jack acquired didn't since we businesses that on founders. their business and Very year gone ago. similar to very and a well. insights of

So this two how to we've think on as through we a Company do as experiences also well. those learned

Chris Gough

next Ali. question you, Operator, Thank please.

Operator

ahead. question And from comes Modi Nik Please go RBC. with next our

Nik Modi

the to everyone, the on morning, question. divestiture. I ask fem for wanted announcement. Yes. care I and about Thanks guess, Good congrats this

that divestiture business portfolio IP be And think around if given part Lola makes the leverage into would of curious sense of portfolio? Harry's Harry's equity, itself? kind Any or the and the of the I'm how has that's the of timing it to brand the keep about helpful. strategy not and just does now we that thoughts should Given thinking technologies

Rod Little

divestiture. Jeff take you talk want the and Dan you to the can Lola piece, about

Jeff Raider

Lola. own don't We Nik. Hi,

but founders, -- part good a have of they not We Harry's. relationship we're are with not their

know. you Just so

Dan Sullivan

for comment what moving when, input are. We're our direction but like so I of as have that, important process the we it hence deleverage, and continue us we pleased form And again, to And is cash far has an with seen going will all, or I where not the We're is in as process the begun. might think first strategic on I that to in what of mentioned flow very think earlier. think look and expected. to the Yes. clear, terms of we've process I transaction, communicated

and quite or with we that on rethought are our today. we're thinking pleased that haven't where we So changed

Chris Gough

question Thank you, Operator, Nik. next please.

Operator

ahead. Chappell from next Bill with question our comes And SunTrust. Please go

Bill Chappell

Hi. congratulations. and Thanks. morning Good

in antitrust how than of at deal, that change Energizer-Spectrum XX getting on or know what the quarter, thoughts And seems more of intertwined the had One, your of it kind better you next a mind terms out be looking from in of where current the then like, Harry's, And place closing be have to that, marketing, ton team battery say a sense, year. the to the but and through European early seems know it's in that look that and plans couple now, expertise a more that's not approval? out the digital, management like timing of calendar which in when shave Because does be of for with business to Just you're questions. with lifting stickier probably I lifting like wet US. guidance? almost Rod until to it and how that EPC reflected first makes not it lot I months also until are

So what happens in the interim?

Rod Little

Yes.

some in or a e-commerce there antitrust XXXX So, good QX marker needs. of and designing the more the more versus focused and business, consumer out around average why that's with doing we've on happening that we're tailoring local comment on meet hit stop mean transformation how then done. we'll confident done change that doing we're Thank don't a need here, morning, consumer digital, and confident we're doesn't Bill. We we'll we that our the program. like there you. get In specific are I brands anything that and that get global things any and we've the like We're to as we're lot pivoting of to particularly won't the our local geography. work we're through interim, on analysis. And the we when. put get I

work and look So like possible throwaway off look as And and that some the that we run look through future what an get a and continues. running. hopefully, could as next this we there or eye maybe months, things that, will would potentially I all be think don't the will soon make obviously be versus like. phase are combination we that couple as what sense we but closed of obviously, would the go expect, planning like, have might toward our of We, what plan at over

Chris Gough

Thank Bill. question you, Operator, please. next

Operator

America. And our ahead. next with Tong of go question Please comes from Bank Olivia

Olivia Tong

think you I Harry's Great talked you joining Jeff challenge traditional Because They little have think the couldn't that you is was what it's what then, this and nice landscape bit, great because -- Andy that already they can in no only years you like you have have several thought on? some you in know can do a do do similar the mentioned are ago I obviously Company, and .Thank but you what brick you. for think Edgewell, on some your pretty about major-owned companies. distribution do And remarks, backing as mortar. do there. earlier there they question, you but a

Thank time? to of talked the you've stay them imagine you. companies, I [indiscernible] So, lastly, you a period right certain are just to other contractually obligated what And on made EPC, finally choice? then, for

Dan Sullivan

Thank you. Olivia. morning, Good Yes.

So, right, bring what I business? successful. trajectory do do a or good Harry's what been do think, gone the of avenue they've we they've very we on every they were growth for down,

balance strategy R&D you and frankly, help what we is going manufacturing, capability their design, retailer, And is can unpenetrated. and and global a at about distribution around around retailers And are infrastructure right global US, within I there's technology the two think, to the in supply to do Andy and what's got be where bring commercial the networks, investment internationally, that Jeff business, and look So if we transfer. that. where private label side in significant the teams, that have portfolio we on And would we've standpoint, a play at been equally, around global their a to that go-to-market already would But place. from place. made investment have look infrastructure and and channel global is chain the sales as manufacturing, you had think

to and to their view there over pause talk Jeff this. of I'll So, flip it about

Jeff Raider

those I work brands take I drive our category in brands to we're about about in way. Yes. US can the of reiterate Andy the together think complementary the what a really over in excited said, growth how and and potential think family to mean,

international the of the you about is Rod we Harry's, this is which excited and are one our If that exciting new innovate and are broader products context of have our platforms launch that excited think that thing can with upgrade we people have mentioned, we're about that a we technology another in about. and then, about. and excited and to want And products opportunities combination super

And excited new of sort for. to UK. massively with our ability markets, a the accelerates we in are also We having massive super are access footprint global go Edgewell, which

really excited a customers. impact Harry's If about about that. what affords you lot think as Andy, personally, and for this opportunity people motivates and are lot a of a having deeply. our us for on think We me us And believe the and we of in I Company

really Rod amazing be of will think platform that both equity where optimize lot market. new this that into provides we portfolio brands in category, effect having combination equity a think of a mentioned, of in the we way those the a by it brands, this rolling people distinctive products, can As and we the in really to we're lot of a change and go to we our us interesting can introduce

Chris Gough

Operator, question please. you, Olivia. Thank next

Operator

our with go from next question Alwy ahead. And Please Faiza comes Deutsche Bank.

Faiza Alwy

morning. Yes. Hi. Good

aggressive the So, if fairly unpack seems of I because maybe on that bit, digits follow going the to and you me. around could up to a little revenue just forward, wanted mid-single targets it

with would don't that around you the love know helpful? driven answered you. obligated be be for you bit going and think assuming be then, contractually -- would post if And category, detail you the just around internationally? growth from business, you're are more that question Olivia's that is Company categories? assuming, Jeff, is you a close by little for there So then hear do to helpful. I Andy to really So, if growth example, Harry's to expanding And just stay shaving of Thank I much the what international are would other how

Dan Sullivan

the for you Thank Yes. question.

context EPC, in constructed moment to we we information not revenue, more transformational at the the and on markets. let We're of $X.X that. alone the provide support Certainly, of degree and of categories will much the we're this unpack business our or at this the in right looking and forward. going XXXX thoughts of that to As of more going the billion new aspect Harry's

Harry's compelling and the infrastructure that the of we support do I think for and today, see in top-line the is, also but the Jeff the you've the what will bigger heard piece that opportunities both the EPC what do brand technology business, just we Rod that and spoke will at Andy for of.

I commercially and Harry's, as So, it not at business about expectations attractive across think looking confident this top-line, on by EPC full be the again course, revenue which an underpinned we're as synergies of and/or thinking We're with we're well. the quite portfolio. will our

Rod Little

Andy?

Andy Katz Mayfield

jobs can and Andy. for We're really as getting to Jeff both work with well. definitely speak excited the about I is. Edgewell roles This our mean, I team. new and

deal. are rolling into a significant We equity amount of the

over And really extended definitely so, in yes, are an we of together by grow are speak, Company also vision. period putting to our we and convicted money where our this the And mouth is, this so combined to time.

Chris Gough

you, Operator, please. Faiza. question next Thank

Operator

Grundy go question next our with And comes Kevin Jefferies. Please ahead. from

Kevin Grundy

congratulations everyone Good morning deal. on Thanks. and the

So, one ones Rod, other integration to you, broadly. related two more advertising for the market risk, questions

two a first, change there's you which on, involves in Project organization, is of can struggling employee a lot bit businesses. large, of So Fuel quite going is to deal a divest program base, maybe process of expand ongoing on culling there the the the obviously this your ongoing

change handle gone the the a believe a well you been question. this Organization to number have is space, in how deals of, Maybe expand is there's not prepared well. the going lot That'd little of you And context this all the can on there's within bit first be So, on. which CPG concurrently? a

broadly growth just issues how and the how both you've been you integrating some you take those. Harry's heavily Does strong this of a context had little one behind brand advertising you to bit back drive as with may within far marketing a that for as very a what's second now, on possible? more maybe drive and pulling you're thank brand base The do there? the Harry's. so rethink to leaning here of potentially So perpetuate of that And that business and the balance the

Rod Little

Yes. questions. Great Kevin. Thank you,

Project a have is management Fuel of two integration do On into point, lot we going the overall change risk that. on. in execution, we're year

that I that's need what to mode. think to execution very do knows well we has Everybody and in execution point. frankly, gone this

I the lot confident So up we've divestitures, activities. acquisition we're and and dedication potential divestiture, And other of a outs people a effort that got on integration. got Project Fuel against piece. that the lined my team against we've on and Around and with a around experience lot of carve have team personally

in priority on a this is priority that's get really are that to the of those that that's be said and on We're That one. commercially we're there three being layer two that we'll now yes, intentionally we're other and day other managing, the of year top to going they we focused revenue. one not organized meaningful, organized to out to but that be And the resources to as ourselves not on all are projects. doing drive So focused actually initially. intentionally are that, where commercially here, have are around the growth. phase getting involved on work things is lot the quite going focused change focus And revenue synergies we of cost

on. we with of Jeff here been right. talk it think going But very in the a risk. And also nice to and it we are There's I because have going labor execution is, to that going messages. We advertising that and flip points journey and through we Jeff let to have a And we marketing, global own that watch we'll with after. evolve Gaget to of comes end division actually has resetting, brands, how connected our part one. with Fuel and our Anne-Sophie I'll has been of strategy that leader our connect the going we're innovation process in working consumer as with Jeff understand closely. So, how and I'm lot the about on down that so answer how on this

Jeff Raider

a about other Edgewell traditional and fact sort point that integrated how team, people through new think Rod than Yes. had you that, we start-ups companies, CPG I they've Germany work a year our a company And the other we situations resilience and we less a around the traditional integration our Harry's large start-up. think we to in is were that bright of I that also spot I and time -- and shared Edgewell XX incredibly team the And values. based the as that think in out you We is business. only of XXX that the team. think your went people just had crazy that over our have did And pretty a and ability to great made and and on at with talked CPG a thing factory isn't when old, our what of of might come way through in was a complicated has Germany side Company for the set shared set our values speaks other think successfully. at of a been on we successful acquired

through some of this and before, been so, excited and it the really about we're the And understand we've implications of potential.

As it think two points. marketing, relates probably to I

the First, the plan, is, to the I'd in how for international we potential about can a to to so we Harry's in want categories, in been lot brand. of sure brand. continue together support support we to spend the to our We we see make brand markets, put say operating categories, in thoughtful we've new our core US, need continue and much as

is The with able messages the is we marketing connections data DTC people generate We a that impacts direct-to-consumer because able and we're really different we to drive second we're deeper think experience, we our do that benefits world, the that revenue in to capabilities them our them, be that of having make engage to direct-to-consumer test impactful of there. strong point business, have. get the lots have I'd quickly, that that, I spend one do with of know

I externalities able being positive has about retail presentation, interesting an on those brands, on We leverage whole as people. we it Edgewell can in a experiences where world, perspectives strong exciting we opportunity And in think As a think that have the engage DTC can that of get drive portfolio. can new also with build our the bunch capability that's Andy on interesting we team, the mentioned the messages hope business. we really think across that's we to messages,

makes just And so, impactful moving more spend hopefully forward. overall our that marketing

Chris Gough

Kevin. next you, Operator, please. question Thank

Operator

And question closing I this any turn our and to would actually the like answer for Little over remarks. conference conclude to back session. will Rod

Rod Little

Yes.

can here create of we're So There confident is excited you a this. get and can value, lot tell, path interesting we forward to go thank you Again, everybody. about an we're it.

all soon. thanks your to talking for to time. look forward you We So,

Operator

is you attending today's for presentation. concluded. Thank now The conference

now may disconnect have great a You and day.

Edgewell Personal Care (EPC) 10 May 192019 Q2 Earnings call transcript