ACCO Brands Corporation Announces Cost Reduction Program Targeting Annualized Pre-Tax Savings of at least $60 Million
ACCO Brands Corporation (NYSE: ACCO) has announced a multi-year restructuring and cost savings program, aiming for annualized pre-tax cost savings of at least $60 million. The program includes initiatives to simplify the operating structure, reduce costs through headcount reductions and supply chain optimization, and improve sourcing capabilities. The company also plans to file a Form 8-K with the SEC disclosing its restructuring charges. ACCO Brands' President and CEO, Tom Tedford, expressed confidence in the long-term growth prospects of the company, citing geographically diverse operations and leading brands. The company will operate and report under two segments: the Americas and International segments. Effective January 1, 2024, Cezary Monko and Patrick Buchenroth have been appointed as Presidents of the International and Americas segments, respectively.
The announcement by ACCO Brands Corporation of a significant restructuring and cost savings program underscores a strategic shift aimed at bolstering long-term profitability. The anticipated pre-tax cost savings of at least $60 million annually are substantial, representing a sizeable reduction in operating expenses. This move is likely a response to the slow demand environment and a proactive measure to enhance the company's competitive edge.
From a financial perspective, the program's success hinges on execution and maintaining operational efficiency amidst the reduction in workforce and supply chain adjustments. Investors should monitor the restructuring charges disclosed in the upcoming Form 8-K filing, as these will impact short-term financials and could influence stock performance. The realignment into two reportable segments could also signal a more focused approach to managing diverse geographic markets, potentially leading to improved segment-specific performance tracking and strategic decision-making.
ACCO Brands' restructuring indicates a strategic pivot towards innovation and new product development, which could resonate well with changing consumer preferences and market demands. The emphasis on simplifying the company's operating structure and bringing leaders closer to the customers suggests a move towards a more agile and customer-centric business model. This could enhance the company's ability to respond to market trends and capture growth opportunities.
However, the impact on the company's brand portfolio and customer relationships due to headcount reductions should be carefully assessed. The company's preliminary results showing improved sales and cash flows above the outlook for the year signal a positive trajectory, yet the market will need to see sustained evidence of growth and margin improvement to fully endorse the restructuring strategy.
The operational changes announced by ACCO Brands, such as supply chain optimization and global footprint rationalization, are critical for maintaining cost-effectiveness in a competitive landscape. The reduction in complexity through delayering could lead to faster decision-making and better alignment with market conditions. However, the transition must be managed to minimize disruption to the supply chain and customer service.
Effective January 1, 2024, the segment realignment will necessitate a keen focus on operational excellence within each segment to ensure that the restructuring yields the intended benefits. The expertise and track record of the newly appointed segment leaders, Cezary Monko and Patrick Buchenroth, will be pivotal in executing this strategy and achieving the desired cost savings without compromising product quality or market responsiveness.
01/30/2024 - 06:55 AM
LAKE ZURICH, Ill. --(BUSINESS WIRE)--
ACCO Brands Corporation (NYSE: ACCO) announces a multi-year restructuring and cost savings program, with anticipated annualized pre-tax cost savings of at least $60 million
“The actions we are announcing today will better position the Company for long-term sustainable profitable growth. The cost reduction actions, as well as a renewed focus on innovation and new product development, will provide fuel for reinvestment and an improved growth trajectory for the long-term. During 2023, we were able to restore the Company’s margin profile and strengthen the balance sheet despite a slow demand environment. Our preliminary results indicate that we ended the year with reported sales and cash flows above our previously communicated outlook. I remain confident in the long-term growth prospects of the Company given our geographically diverse operating platform and our collection of leading brands” said ACCO Brands’ President and Chief Executive Officer, Tom Tedford.
The Company will operate and report under two segments. The Americas reportable segment will include the U.S. , Canada , Brazil , Mexico and Chile and the International reportable segment will include EMEA, Australia , New Zealand and Asia . The Company will report on this basis for the fiscal year commencing January 1, 2024.
As a result of the segment realignment, effective January 1, 2024, Cezary Monko has been appointed Executive Vice President and President of the International segment and Patrick Buchenroth, has been appointed Executive Vice President and President of the Americas segment. These leaders have a long-established, successful history with the Company.
The Company will provide additional details about the restructuring program during its upcoming fourth quarter and full year 2023 earnings call.
About ACCO Brands Corporation
ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, play and thrive. Our widely recognized brands include AT-A-GLANCE® , Five Star® , Kensington® , Leitz® , Mead® , PowerA® , Swingline® , Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com .
Forward-Looking Statements
Statements contained in this press release, other than statements of historical fact, particularly statements relating to cost reductions and the anticipated pre-tax savings from the cost reduction program, restructuring costs, footprint rationalization, simplifying and streamlining our operations, reducing complexity, enhancing the speed of decision-making, leveraging our sourcing capabilities and the timing of implementation and completion of the cost reduction program, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to us at the time such statements are made. These statements, which are generally identifiable by the use of the words “will,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “forecast,” “project,” “plan,” and similar expressions, are subject to certain risks and uncertainties, are made as of the date hereof, and we undertake no duty or obligation to update them. Forward-looking statements are subject to the occurrence of many events outside the company’s control and actual results and the timing of events may differ materially from those suggested or implied by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties.
Factors that could affect our results or cause our plans, actions and results to differ materially from current expectations described in this press release include, among others, our ability to successfully execute the actions identified as part of the cost reduction program and realize the anticipated cost savings and operational synergies as well as other risks and uncertainties described in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, and in other reports we file with the SEC. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements when deciding whether to buy, sell or hold the company’s securities.
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Christopher McGinnis
Kori Reed
Source: ACCO Brands Corporation
What is the purpose of ACCO Brands Corporation's multi-year restructuring and cost savings program?
ACCO Brands Corporation aims to achieve annualized pre-tax cost savings of at least $60 million through initiatives to simplify its operating structure, reduce costs, and improve sourcing capabilities.
Who is the President and CEO of ACCO Brands Corporation?
The President and CEO of ACCO Brands Corporation is Tom Tedford.
What segments will ACCO Brands Corporation operate and report under?
ACCO Brands Corporation will operate and report under two segments: the Americas and International segments.
Who has been appointed as the President of the International segment of ACCO Brands Corporation?
Cezary Monko has been appointed as the President of the International segment of ACCO Brands Corporation.
Who has been appointed as the President of the Americas segment of ACCO Brands Corporation?
Patrick Buchenroth has been appointed as the President of the Americas segment of ACCO Brands Corporation.
