Ravi Saligram
President and Chief Executive Officer at Newell Brands
Thank you, Sofya. Good morning, everyone and welcome to our year end call. We continued our growth momentum for the past five quarters into the fourth quarter, which helped us achieve an important milestone in 2021. As we return the company to core sales growth with strong results across each business unit and geographic region. Despite a challenging and disruptive operating backdrop as well as significant inflationary pressures we delivered over 12% growth in both core sales and normalized operating income, in 2021, with further progress in complexity reduction, productivity, cash conversion cycle and a robust innovation pipeline. Let me share some highlights from fiscal 2021.
Core sales increased 12.5% as each business unit grew versus last year and on a two-year stack basis. This was fueled by strong consumption in the US relative to both 2020 and 2019. Domestic consumption increased across all eight business units relative to 2019 with Writing, Food, Baby, Commercial, Home Appliances and Home Fragrances in the double digits. Even as mobility is returning and some trends are moderating from peak levels, we are seeing stickiness in consumer behavior versus pre-pandemic levels. We believe that the strategic work we've done to rejuvenate our iconic brands sharpen brand positioning, strengthen our marketing and innovation muscle while leveraging consumer insights and foresights is enabling us to better capitalize on consumer trends.
Our major brands are healthy. And in 2021, each of our top 10 brands grew with Graco, Oster, Coleman, Yankee Candle, Sharpie and Paper Mate each registering double-digit growth. 2021 was also a stellar year for all our regions as each one delivered double-digit topline growth with International outpacing North America. We continue to believe that the international markets abound in opportunity, and we just appointed Maria Fernanda Mejia as CEO, International. Maria Fernanda has three decades of international CPG experience at firms such as Kellogg's and Colgate and has a track record of accelerating growth and profit. She will join Newell at the end of this month with a goal of fully unlocking International's growth potential and accelerating profit by leveraging scale, reducing fragmentation and building our brand franchises outside of the US.
Strong omnichannel execution allowed us to attract shoppers across all channels. Despite consumers return to brick and mortor stores through the year, Newell's global e-commerce sales grew at a low double-digit pace in 2021 as digital penetration for the Company remained at about 22% of net sales similar to 2020 and significantly ahead of prior years. Our go-to-market strategy is yielding strong results and enabling us to forge stronger connections both with our consumers and customers. Although our service levels were challenged due to the supply environment, we saw excellent growth at our top customers and developed strong joint business plans.
We're also building momentum on our Innovation operating model with tighter integration of consumer insights and forsights into the process. This is yielding more impactful launches. Not only, our innovations becoming a larger contributor to sales, we also see opportunity to continuing to scale, many of the franchises such as Sharpie S Gel, Mr. Coffee Iced, FoodSaver, VS line [Phonetic], Rubbermaid Brilliance. In 2021, although Newell's normalized operating margin declined about 10 basis points to 11%, normalized operating profit grew more than 12% despite approximately a 700 basis point inflationary headwind which was 9% of COGS. Offsetting levels was strong fuel productivity, pricing and tight cost control. Normalized earnings per share grew nearly 2% versus 2020. On a tax-adjusted basis, that would represent over 20% increase in normalized EPS, a remarkable result, particularly in this environment.
Our cash conversion cycle improved by five days year-over-year to 68 from a high of 115 in 2018. Strong cash generation despite strategic inventory, both allowed us to delever our balance sheet to 3.0 times. As we focus on driving sustainable and profitable growth, we are placing significant emphasis on building operational excellence throughout the organization with project Ovid and automation being two major initiatives that we are implementing. We also significantly improved our employee engagement. Based on a Glint employee survey, the Company's engagement score moved up significantly to 75 at benchmarks indicating that culture is becoming a competitive advantage for us.
We continue to strengthen our commitment to corporate citizenship, sustainability as well as diversity inclusion and belonging guided by our core values of truth, transparency, teamwork and trust. I'm pleased to share that Newell Brands has been named one of Fortune's 2022 World's Most Admired Companies. The Company was also recognized on several other lists such as the Wall Street Journal Management's top 250 best-managed companies of 2021, Forbes World's Top Female Friendly companies in '21, Forbes Best Employers for Diversity in 2021, Newsweek America's Most Responsible Companies in 2022, and was awarded 100% on the Human Rights Capital Foundation's Corporate Equality Index in both '21 and '22. Last year, we also continue to give back to our communities donating products worth nearly $17 million.
Let me share some insights on 2021 results for each business unit. Writing had a terrific year with double-digit growth, almost double the rate of the total company and market check gains across each geographic region as schools came back to a more normal cadence. We saw strong domestic consumption relative to both 2020 and 2019.
On a two-year stack basis, Writing core sales grew, despite the delayed return of the commercial channel as new variants continue to disrupt back-to-office plans. The rebound in the Writing category in combination with excellent market share gains in the US, Canada, UK and Australia drove excellent results for the business in 2021. In the US Newell outpaced the market, delivering a seven-plus year high in market share and over two points in share gains and writing instruments.
Sharpie S-Gel continued to turbocharge our share in pens for the second straight year, resulting in US share gains of nearly 500 basis points in this important category. Newell's share of the Writing category also improved by more than two points in Australia and Canada and almost one point in the U K. We're confident Writing is well positioned for a great 2022, when we expect more of a rebound in the commercial channel.
2021 was a solid year for the Baby business, both on the gear and the care sides as core sales grew at low double-digit rate due to distribution gains, innovation, increased stimulus and child tax credit funding and continued strength in e-commerce. We saw strong momentum in domestic consumption.
There was lots of great innovations throughout 2021, and I'm pleased to share that Newell baby gear won four awards at the annual Juvenile Products Manufacturing Association Awards, the most of any Company, including the Tried & True award for the Graco forever and green and environmentally friendly for Century.
Along with Writing, Home Fragrance was the best-performing business unit during 2021 as consumers focus on their well-being in homes, drove strong double-digit core sales growth supported by healthy consumption relative to both 2020 and 2019. Net sales for the Home Fragrance business reached record levels in 2021, despite closure of underperforming retail locations and exit from the fundraising business in 2020.
We saw really strong performance from Yankee Candle retail stores this year with positive comps as consumers return to in-store shopping. The 2021 launch of the Yankee Candle Signature Collection, as well as added distribution points helped drive modest share gains in the candle category in track channel. In EMEA, we delivered strong growth across all territories, leveraging e-commerce and added distribution points.
Moving on to Food. 2021 was another strong topline year for the Food business, even as performance moderated in the second half against very challenging comparisons, and we experienced supply challenges across some businesses.
Domestic POS was significantly ahead of 2019 and slightly below elevated year ago levels. In 2021, two of our brands, Ball and FoodSaver achieved record sales and Ball continues to drive significant share gains in the canning category, benefiting from the 2021 launches of all storage latch pantry jars as well as the nesting jars. We also saw share gains in the Rubbermaid brand growing upon the successful expansion of the Brilliance line into glass and pantry categories.
Our products are also getting external validation as Good Housekeeping name Calphalon best non-stick cookware, Rubbermaid Brilliance Glass was named best food storage and food saver was recognized as best vacuum cleaner for 2021. We continue to believe that in a hybrid work environments are likely to prevail, at-home cooking and food consumption occasions will remain about pre-pandemic levels and have an exciting lineup of new products for 2022.
In 2021, core sales growth for home appliances accelerated relative to already elevated 2020 levels led by Latin America, North America and EMEA. Domestic consumption was up significantly ahead of 2019 levels and up modestly versus 2020. Due to strong demand, we hit an all-time record production of blenders as Oster blenders celebrated the 75th anniversary in both the US and Latin America.
In 2021, our Outdoor & Recreation business grew core sales in each quarter demonstrating momentum and the strength of the turnaround strategy we began 18 months ago. For the full year, core sales improved across all regions with robust growth driven by Japan, US, Europe and Latin America. The iconic and largest brand in the -- on our portfolio of Coleman led this growth, showing our lifestyle brand-building focus is working.
We also saw strong results from our portable beverage category with both Contigo and bubba drive growing double digits. Key product innovations in Outdoor & Recreation including -- include the Coleman Peak 1 Platform, Coleman 1900 Collection, Contigo Hydration and a new camping gas grill in Europe. Our global marketing campaign with Coleman, the Outside Is Calling, is resonating well with our outdoor enthusiast consumer as brand sentiment and brand health scores continue to rise and helping us win new distribution for 2022 across various channels, including outdoor specialty.
In beverage, the Contigo Streeterville desk mug which was introduced in '21 has become the number 1 mug in the coffee mug category and Contigo is restoring its leadership position. I'm also encouraged by the progress in margins, both in Outdoor & Recreation and Home Appliances. In 2022, we will exit some lower-margin categories, such as beddings, pans and airbeds, which will be a headwind to topline, but will help make further inroads on improving profitability.
From a topline perspective, 2021 was another solid year for the commercial business as core sales grew on top of very difficult comparison fueled by consumption growth. We saw strong consumption performance across major categories with the exception of washroom, which surged a year ago due to the pandemic. While the business has been amongst the hardest hit by inflation, the team has done an outstanding job in implementing a series of price increases to help mitigate the impact, given our expectations that resin prices have stabilized, we're confident that we will restore gross margins and drive strong operating growth -- operating profit growth in 2022.
Lastly, core sales for Connected Home & Security increased in 2021 driven by strong domestic consumption. Earlier this week, we announced an agreement to sell the CH&S business to Resideo Technologies, and it is consistent with our strategy of tuck-out divestitures. We're confident that Resideo is the right strategic owner for this business and believe this transaction will enable CH&S to realize its full potential. At the same time, it allows us to bring even greater focus to our core businesses where we see the highest potential for value creation.
Since CH&S was not integrated with the rest of Newell, we do not expect this transaction to be disruptive. We're exiting 2021 from a position of strength and I am confident that the strategic investments behind brand rejuvenation, omni-channel and social media listening capabilities as well as supply chain resiliency position us well for driving sustainable profitable growth.
As we look to 2022, an overall theme is that in 2021 was a year of topline growth, 2022 will be a year of margins. We are focused on five key priorities. First, laser focus on improving gross margins as we double down on our efforts to mitigate the significant inflationary pressures and supply chain challenges, while improving customer service levels. The strength of our brands has allowed us to take the appropriate pricing actions on all our businesses, while ensuring they remain a good value for consumers. In addition, we will continue to optimize promotional spend, price the innovations to be gross margin accretive, direct A&P spend towards higher gross margin categories and drive productivity.
Second, we'll continue to drive core sales growth and innovations, focus on mastering the 360-degree consumer journey and delight consumers at each touch point with compelling storytelling and joyous brand experiences. I genuinely believe we are making the shift to becoming a consistent growth Company.
Third, turbocharge International to accelerate growth in profits. Fourth, continue investing in transforming our supply chain through project Ovid automation. Fifth and last but not least, continuing to strengthen the One Newell culture and build on our employee engagement momentum. Folks, it is a new Newell. Our Candle teams delivered over 12% core sales growth and normalized operating profit growth in 2021. In 2022, we are committed to rebuilding gross margins and delivering top and bottom line growth despite a tough macro environment.
I'd like to express my sincere gratitude to our employees, whose grit, hard work and agility make it possible for us to deliver on our commitments and pivot as necessary. I continue to believe that Newell's best days are ahead of us and that our focused and deliberate actions will drive sustainable and profitable growth, achieve strong shareholder returns while being a force for good, onwards and upwards.
And now I'll turn it over to Chris.