The ODP Corporation hosted a virtual investor meeting on November 2: Unlocking Our Potential, to highlight its newly realigned business unit structure and capital allocation plan, outline its strategy to unlock the power of its assets, and showcase its path to drive sustained value for shareholders.

“Over the past two years, we’ve worked to complete our transformation into four distinct, synergistic business units that positions us to better meet customers’ needs, drive a more stable foundation to pursue growth, and expand our margins,” said Gerry Smith, chief executive officer for The ODP Corporation. “This realigned framework builds on our track record of delivering strong operating results and generating consistent free cash flow, even in times of challenging market conditions.”

Smith continued, “Our efforts have led us to where we are today: a much stronger company with a strong balance sheet, a low-cost business model, and a newly realigned operating foundation designed to improve our ability to pursue profitable growth opportunities and more fully reflect the power of our businesses. As a key component of our commitment to returning value to shareholders, we announced a $1 billion share repurchase plan through 2025.”

Financial Outlook Through 2025

On a consolidated basis, the realigned operating structure is forecasted to result in steady revenue growth, while increasing Adjusted EBITDA and significantly increasing Adjusted EPS – representing a meaningful financial transformation.

Specifically, over the next three years, the Company is forecasting:

  • Revenue: Revenue increasing from approximately $8.45-8.60 billion in 2022 to $8.5-8.7 billion in 2025, representing a CAGR of approximately 1%.
  • Adjusted EBITDA Margin: Adjusted EBITDA Margin expansion by 2025 of 100 bps, greater than 6%.
  • Adjusted EPS: Adjusted earnings per share increasing from approximately $4.10-4.50 in 2022 to approximately $7.00-8.00 in 2025, representing a CAGR of approximately 15-25%.

ODP highlighted how the realigned four business unit structure enables the Company to prioritize high value opportunities across its operations and return capital to shareholders, while also providing greater transparency into the performance of each unit to allow investors to value them appropriately.

Smith concluded, “This adds up to a very compelling investor story. We will generate stable cash flows from our core operations, maximize the unique value of all our assets, and when combined with our commitment to returning capital to shareholders via our $1 billion authorization, lead to significant EPS growth. Today [November 2] marks the start of the reimagined ODP, Unlocking Our Potential.”

Source: ODP Corp