Hain Celestial (HAIN) Announces Reimagined Plan to Aid Growth
The Hain Celestial Group, Inc. HAIN is focused on its global strategic goals and continues to make marketing investments in key brands. In latest developments, the company has revealed its Hain Reimagined strategy to drive profitable growth. This is a multi-year transformation plan created to boost sustainable growth in the long term and maximize shareholder returns.
Management further stated that fiscal 2024 highlights the foundational year of the plan for simplifying the business, resetting the global operating model, initiating Fuel Program, investing in jumpstart critical capabilities and starting pivot to growth.
Detailing Strategy
The Hain Reimagined strategy revolves around four pillars to drive growth. These pillars are focus, grow, build and fuel.
Management remains focused on the portfolio of five consumer-centric global BFY platforms, which include BFY Snacks, BFY Baby & Kids, BFY Beverages, BFY Meal Prep, and BFY Personal Care. The company looks forward to materially simplify its footprint with direct presence across five major markets, comprising United States, Canada, UK, Ireland, and Europe. It will further align its global operating model as well as leverage scale and generate synergies across businesses.
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The grow pillar involves growth buoyed by three important platforms such as BFY Snacks, BFY Baby & Kids, and BFY Beverages. This pillar is created to deliver share gain in major platforms via expanded channel reach and acceleration in the innovation pipeline. The build pillar consists of efforts related to brand building, channel expansion and innovation. Hain Celestial looks to elevate its approach toward brand building, improve effectiveness of marketing spending and widen its reach across the under-penetrated margin-accretive channels like away from home and omnichannel e-commerce.
This presently Zacks Rank #3 (Hold) company’s Fuel Program includes three main levers, which are revenue growth management, working capital management, and operational efficiency. This program is likely to deliver 400-500 basis points of adjusted gross margin expansion and achieve $400 million as cumulative free cash flow by fiscal 2027.
By fiscal 2027, management anticipates accomplishing sustained revenue and profit growth with a reimagined supply chain and advanced digital infrastructure. The company’s outlook for the long term includes organic net sales CAGR of plus 3%, adjusted EBITDA CAGR of plus 10%, adjusted EBITDA margin of plus 12% and net debt leverage ratio of 2-3x by fiscal 2027.
Relatable to the aforesaid strategy, management has unveiled a formal restructuring program to boost operating margins via the optimization of its portfolio, organization, supply chain and working capital. This restructuring program has a goal of generating $130-$150 million of annualized savings and a $165 million conversion of working capital cash by fiscal 2027. The one-time restructuring and related costs are anticipated to be in the bracket of $115-$125 million across fiscal 2024 and fiscal 2025. The savings from this program will be utilized for the company’s transformation.
What Else?
In a separate press release, management has unveiled a new company logo and introduced "The Hain Way," including its new purpose, mission, vision and values.
Management views 2024 as an inflection point, where it will reset the foundation and return to top-line growth. For fiscal 2024, adjusted net sales are likely to increase 2-4% year over year and adjusted EBITDA is expected to be in the band of $155-$165 million. It projects balanced growth across the portfolio along with the North America and International segments both registering low-single digit organic net sales growth.
Shares of this manufacturer, marketer, distributor and seller of organic and natural products have lost 16.3% in the past three months compared with the industry’s 8.1% decline.
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