Newell Brands, parent company of Rubbermaid Commercial Products, has announced its intention to retain the Rubbermaid business following the release of its second quarter 2019 financial results.
The company said the decision to keep the business, which has been classified as held for sale and discontinued operations, was based on the strength of the Rubbermaid Commercial Products brand, its competitive position in a large and growing category, and its track record of strong cash flow generation, sales growth and strong margins that it said will further enhance the value creation opportunity for Newell Brands.
The company reported net sales of $2.1 billion, a 3.9 per cent decline compared to the prior year period, while core sales from continuing operations declined 1.1 percent from the prior year period.
Reported operating margin was 8.4 per cent compared with 3.8 per cent in the prior year period. Normalised operating margin was 11.3 per cent compared to 9.7 per cent in the prior year period.
Newell Brands interim CEO and CFO, Chris Peterson, said the results showed another quarter of progress as it continues to transform Newell Brands into a “next-generation consumer products company”.
“Encouraging first half results and the green shoots of progress we are driving across the business give us the confidence to reiterate our outlook for full year core sales, operating margin and earnings per share and to raise our full year outlook for operating cash flow to between $600 and $800 million.
“While still early in the organization’s turnaround, we believe our decisive and strategic actions to strengthen our performance will drive further improvement going forward, as we work to transform Newell Brands into a leading next-generation consumer products company.”
Beginning in the third quarter, the financial results of the Rubbermaid Commercial Products business will be reflected in continuing operations, rather than recorded in discontinued operations. The retention of Rubbermaid Commercial Products will be accretive to operating margins, normalised earnings per share and operating cash flow in 2020 and future years.
Newell also announced it would be moving its corporate headquarters to Atlanta. Last month the company appointed Ravi Saligram as its new president and CEO, effective October 1. Saligram succeeds Peterson, who has been serving as interim CEO following the retirement of Michael Polk earlier this year.
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