(By Mani) Newell Rubbermaid, Inc. (NYSE:NWL) is steadily evolving into a solid multi-year growth story, helped by Project Renewal restructuring program and new growth game plan. This would lead to both acceleration in sustainable top and bottom-line growth, as well as multiple expansion over time.
Under CEO Mike Polk, who arrived last summer, the company has made dramatic changes to its organizational structure, the manner in which it allocates resources, its strategy to attack developing market opportunities and the way it interacts with key customers, thereby putting Newell on a faster and sustainable growth trajectory.
Polk came to Newell with a very impressive track record in the consumer packaged goods arena, having spent nearly 30 years at Procter & Gamble (NYSE:PG), Kraft and Unilever.
"While the company's financial performance has stabilized and the stock has responded positively, we would argue this is due largely to trends under way prior to Mr. Polk's arrival," Oppenheimer analyst Joseph Altobello wrote in a note to clients.
Under Project Renewal, the company's ongoing restructuring program announced last October. Newell has begun to streamline the organization, including reducing the number of global business units (GBUs) from 13 to nine, while also structuring the company along Consumer and Professional segments.
In addition to streamlining the organization, on a more basic level, Project Renewal should also help to free up resources and provide the fuel for future growth, as it is expected to deliver roughly $100 million in cost savings by the first half of 2013. To that end, savings from Project Renewal totaled about $8 million in the first quarter and are expected to ramp up rather quickly, with $65 million in savings targeted for this year and the remaining $35 million in 2013.
Recently, the company announced a partnership with IBM on its indirect procurement costs, which total about $1.1 billion, with the potential for annualized savings of perhaps $50 million beginning in 2014.
With the organization now properly structured and cost savings identified, in February of this year Newell introduced what it refers to as its "growth game plan," designed to provide a road map for the delivery of consistent and sustainable results.
Among more dramatic changes brought about by the growth game plan was the way in which the company allocated resources across its different businesses.