Herbalife Nutrition Executive Team Shares Growth Strategies at 2021 Virtual Investor Day
Herbalife Nutrition hosted a virtual investor day focusing on its long-term growth strategy and shareholder value maximization. Key presentations highlighted the addition of 3.4 million new U.S. customers over the past year and strategic objectives including local product innovation, nutrition club expansion, and digital transformation. The company projects mid to high-single digit organic net sales growth and high-single digit adjusted EBITDA growth in the long term. Management announced a share repurchase program intending to buy back over $200 million in shares this year.
- Addition of 3.4 million new U.S. customers over the past four quarters.
- Projected mid to high-single digit organic net sales growth in the long term.
- High-single digit growth expected for adjusted EBITDA.
- Share repurchase program with plans to buy back over $200 million in shares.
- Volume points in North America decreased by 14.8% year-over-year.
- Asia-Pacific region sales increased by only 10.9% year-over-year.
- China's sales declined by 35.6% year-over-year.
“With a renewed focus on driving shareholder value, our long-term strategy will open up a whole new chapter of growth,” said
Agwunobi kicked off the day with an overview of the Company’s strategy, long-term growth outlook, and focus on maximizing shareholder value. Then, the Company’s President,
“Over the past four quarters, the
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Local Product Innovation expands the Company’s commitment to quality and product choice with a greater focus on local market product development. The Company’s investment in science, manufacturing and improved speed to market has reduced the launch times for some new products by
22% .
Expanded local product development will enable the Company to develop products that resonate with local target audiences. The Company also expects to launch a vegan line next year as well as other clean label options.
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Nutrition Club Expansion is an important area of global growth for the Company.
Nutrition Clubs , which are brick-and-mortar locations owned and operated by distributors, are rapidly expanding in number around the world.-
The clubs create a sense of community and offer a location to consume products and experience the value that our distributor coaches create. Currently, there are approximately 11,000 locations in the
U.S. and more than 72,000 globally. -
In the
U.S. , single servings prepared at clubs represented approximately33% of totalU.S. sales in Q2 2021.
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The clubs create a sense of community and offer a location to consume products and experience the value that our distributor coaches create. Currently, there are approximately 11,000 locations in the
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Digital Transformation. The Company is investing significantly to provide distributors with knowledge, insights, and technology to help them be more efficient and more effective, grow their businesses and better connect with their customers. These technology investments will be designed to use data-driven capabilities to enable distributors to cross-sell and upsell in an intelligent way, while leveraging analytics and AI.
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In the
U.S. , the Company captures virtually all customer transactions and currently has detailed information on more than 58.9 million customer transactions from the last four quarters. The Company plans to extend similar data gathering programs globally in order to better predict customer behaviors, which in turn will help improve customer experience, customer activity and retention.
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In the
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Enhanced Trust in the Brand is another important strategic focus as the Company focuses on further strengthening its reputation, respect and credibility in society.- A strategic refresh of the Company’s brand reflecting the unique value proposition that the Company and its distributors present will be introduced at its large global distributor event in 2022
- The Company’s Environmental, Social, and Governance (ESG) strategy elevates its position as a leader in nutrition and in providing economic opportunities to expand the Company’s commitment and impact related to important global issues.
- A presentation highlighted the Company’s effort to further strengthen its relationship with “Gen Z” and “Millennial” entrepreneurs. During the second quarter of 2021, two-thirds of our new distributors and preferred customers where GenZ or Millennials.
Executive presentations wrapped up with a financial presentation by Chief Financial Officer
The presentation explained why the Company expects long-term organic annual net sales growth in the mid to high-single digit range, believes annual adjusted EBITDA growth in the high-single digit range is achievable, and believes adjusted earnings per share growth is on track to be in the double-digit range. It is important to note that the growth rate estimates for net sales, adjusted EBITDA and adjusted diluted EPS assume a constant currency environment.
“Consumer demand for our nutrition products has created momentum in our business that puts us in a position of strength for long-term growth. This opportunity is reflected in our long-term growth algorithm which we believe presents an attractive investment opportunity for investors,” said Amezquita.
The Company’s capital allocation policy has enabled it to service its debt, invest for the future and return approximately
The event concluded with a financial update and a live Q&A session with the Company’s CEO, President and CFO. During the Q&A session, management confirmed that as part of its ongoing share repurchase program, the Company expects to repurchase more than
Additionally, management provided the following volume points by region for the third quarter-to-date through
REGIONAL VOLUME POINT METRICS |
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Third Quarter-to-Date Through |
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|
|
|
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Region |
2021 (mil) |
2020 (mil) |
% Change |
|||
|
298.0 |
349.7 |
- |
|||
|
325.3 |
293.2 |
|
|||
EMEA |
258.1 |
285.1 |
- |
|||
|
62.9 |
97.6 |
- |
|||
|
144.4 |
159.3 |
- |
|||
South and |
82.4 |
98.4 |
- |
|||
Worldwide |
1,171.1 |
1,283.3 |
- |
|||
Year-to-Date Through |
||||||
|
|
|
|
|||
Region |
2021 (mil) |
2020 (mil) |
% Change |
|||
|
1,269.3 |
1,198.1 |
|
|||
|
1,305.3 |
1,055.6 |
|
|||
EMEA |
1,127.8 |
1,028.5 |
|
|||
|
270.4 |
366.9 |
- |
|||
|
576.9 |
582.6 |
- |
|||
South and |
332.3 |
334.1 |
- |
|||
Worldwide |
4,882.0 |
4,565.8 |
|
Trends through the first part of September have been consistent with that seen in the first two months of the quarter.
The Company’s third quarter ending
About
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Additionally, many of these risks and uncertainties are, and may continue to be, amplified by the COVID-19 pandemic. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include the following:
- the potential impacts of the COVID-19 pandemic on us; our Members, customers, and supply chain; and the world economy;
- our ability to attract and retain Members;
- our relationship with, and our ability to influence the actions of, our Members;
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our noncompliance with, or improper action by our employees or Members in violation of, applicable
U.S. and foreign laws, rules, and regulations; - adverse publicity associated with our Company or the direct-selling industry, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;
- changing consumer preferences and demands;
- the competitive nature of our business and industry;
- legal and regulatory matters, including regulatory actions concerning, or legal challenges to, our products or network marketing program and product liability claims;
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the Consent Order entered into with the
FTC , the effects thereof and any failure to comply therewith; -
risks associated with operating internationally and in
China ; - our dependence on increased penetration of existing markets;
- any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, cybersecurity incidents, pandemics and/or other acts by third parties;
- noncompliance by us or our Members with any privacy laws, rules, or regulations or any security breach involving the misappropriation, loss, or other unauthorized use or disclosure of confidential information;
- contractual limitations on our ability to expand or change our direct-selling business model;
- our reliance on our information technology infrastructure and manufacturing facilities and those of our outside manufacturers;
- the sufficiency of our trademarks and other intellectual property;
- product concentration;
- our reliance upon, or the loss or departure of any member of, our senior management team;
- restrictions imposed by covenants in the agreements governing our indebtedness;
- risks related to our convertible notes;
- changes in, and uncertainties relating to, the application of transfer pricing, customs duties, value added taxes, and other tax laws, treaties, and regulations, or their interpretation;
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our incorporation under the laws of the
Cayman Islands ; and - share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.
We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Non-GAAP Measures
The Company has included in this release adjusted diluted EPS and adjusted EBITDA, performance measures that the
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