Hello, and welcome to WD-40 Company's 2023 Annual Meeting of Stockholders. Please note that today's meeting is being recorded. During the meeting, we'll have a question and answer session. You can submit questions or comments at any time by clicking on the Q&A message icon. It is now my pleasure to turn today's meeting over to Mr. Gregory Sandfort, Chairman of WD-40 Company. Mr. Sandfort, the line is yours.
Thank you very much. Good morning, and welcome to WD-40 Company's 2023 Annual Meeting of Stockholders. I am Gregory Sandfort, WD-40 Company's Non-Executive Chairman of the Board. I'm very happy to welcome you to this year's Annual Meeting of Stockholders. Before calling the meeting to order, I would like to introduce today's meeting participants. The following directors are in virtual attendance today: Cynthia Burks, served most recently as Chief People Officer and Culture Officer at Genentech, Inc. Daniel Carter, served as Executive Vice President and Chief Financial Officer of BevMo! Inc. Dan is the Chair of our Audit Committee. Eric Etchart, served as Senior Vice President of the Manitowoc Company Inc. Eric is the Chair of our Corporate Governance Committee. Lara Lee, served as President of Orchard Supply Company. Edward Magee, currently serves as Vice President of Strategic Operations for Belmont University.
Trevor Mihalik is Executive Vice President and Group President at Sempra Energy. Trevor is the Chair of our Finance Committee. Graciela Monteagudo served as President and CEO of Lala US Inc. David Pendarvis served as Chief Administrative Officer, Global General Counsel, and Secretary of ResMed Inc. And Ms. Anne Saunders served as President, US of NakedWines.com and is the Chair of our Compensation Committee. Also participating on our call today are Steve Brass, our President and Chief Executive Officer, Phenix Kiamilev, our General Counsel and Corporate Secretary, Sara Hyzer, our Chief Financial Officer, and Wendy Kelley, our Vice President of Stakeholder and Investor Engagement. I would also like to introduce Steve Embry and Kathleen Hopley from PricewaterhouseCoopers LLP, the company's auditors. They will be available to answer questions during the question and answer session at the end of the meeting. For business purposes to be conducted here today, I will act as Chairman of this meeting, Phenix will act as Secretary of the meeting, and we will now officially start the meeting by confirming that proper notice of the meeting has been given and that we have a quorum.
Thank you. I'm pleased to announce that proper notice of the meeting has been given, and that at least 12,643,964 shares are represented in person or by proxy, constituting a quorum.
Thank you, Phenix. I now call this meeting to order. Following the secretary's introduction of the matters to be acted upon by shareholder vote at this meeting, our management team will share a strategic business update. Then we will take questions from the online audience, and thereafter, the formal meeting of the stockholders will adjourn.
There are 5 matters for stockholder consideration and voting at today's meeting: the election of directors, an advisory vote to approve executive compensation, an advisory vote on the frequency of future advisory votes on executive compensation, to approve the Company's amended and restated 2016 Stock Incentive Plan, and the ratification of the selection of our independent auditors. Stockholders have been encouraged to vote in advance of the meeting. However, if you've not yet voted or would like to change your vote, any stockholder attending the virtual meeting today who has entered the meeting with a control number, may vote at any time prior to the adjournment of today's meeting. If you need a copy of the annual report or the proxy statement, the links are provided online as well. Instructions for voting and/or changing a previously submitted vote are provided on the Computershare Meeting Center website.
The following matters are presented for stockholder approval. The first matter is the election of directors. I'm pleased to report that all the nominees have received sufficient votes to be elected to serve as directors until their successors are elected and qualified. With respect to the advisory vote to approve executive compensation, I'm pleased to announce that at least 10,653,710 shares have been voted to approve executive compensation. The third matter presented for stockholder approval is the advisory vote on the frequency of future advisory votes on executive compensation. I'm pleased to announce that at least 10,775,710 shares have been voted to approve one year as a frequency for future advisory votes.
With respect to the Company's amended and restated 2016 Stock Incentive Plan, I'm pleased to announce that at least 10,778,377 shares have been voted for approval of the amended and restated WD-40 Company 2016 Stock Incentive Plan. The fifth matter presented for stockholder approval is the ratification of the Audit Committee's selection of PricewaterhouseCoopers LLP as the Company's independent accountants for fiscal year 2024.
... A representative of PricewaterhouseCoopers LLP is in attendance and has been offered the opportunity to make a statement and can respond to appropriate questions. If any questions for the auditors are submitted prior to adjournment at the meeting, a PricewaterhouseCoopers LLP representative will respond. I'm pleased to announce that at least 10,837,372 shares were voted in favor of ratification of the selection of PricewaterhouseCoopers LLP as the company's independent accountants for the current fiscal year.
At this moment, I'd like to thank all of our stockholders for their continued support. Management will now share an update with you on the company and where it is headed in the future. Following management's presentation, we will answer questions from stockholders in attendance. Questions or comments may be submitted at any time during the virtual meeting by clicking on the Q&A message icon on the right-hand side of the Computershare Meeting Center website. We will collate all appropriate answers for a response, and before we proceed, I'm going to ask Wendy to get us started on our business update and provide our required notices.
Thank you, Greg. Good morning, and thanks to everyone for joining us today. I would like to ask our virtual audience to please turn your attention to the slides being webcast simultaneously through the Computershare Meeting Center website. As a reminder, today's call includes forward-looking statements about our expectations for the company's future performance. Of course, actual results could differ materially. The company's expectations, beliefs, and projections are expressed in good faith, but there can be no assurance that they will be achieved or accomplished. Please refer to the risk factors detailed in our SEC filings for further discussion. On today's call, we will discuss certain non-GAAP measures. The descriptions and reconciliations of these non-GAAP measures are available in our SEC filings as well as our earnings presentation.
Finally, for anyone listening to a webcast replay or reviewing a written transcript of this call, please note that all information presented is current only as of today's date, December 12, 2023. With that, I'd now like to turn the meeting over to Steve.
Thank you, Wendy, and good morning. As we celebrate our 70th anniversary as a company, we reflect on our strong legacy and prepare to innovate for tomorrow. The WD-40 brand has always had a chameleon-like ability to adapt over the decades as old uses die out and new ones emerge. We see exciting opportunities ahead for both usage innovation on our core products, as well as product innovation in future high-growth areas such as wind turbines, drone technology, robotics, and other electromechanical areas such as electric vehicles. We will continue to reinvent ourselves in order to adapt to these emerging, fast-growing opportunities. Innovation is in our DNA. The founding fathers of our company back in 1953 made 39 attempts at finding the perfect multi-use product formula before perfecting Water Displacement, 40th Formula or WD-40.
We intend to build upon that culture of experimentation and persistence as we innovate for tomorrow's growth opportunities. We exist to create positive, lasting memories in all our relationships. We want to be a preferred supplier to our customers and a preferred customer of our suppliers. We want to delight our end users and fuel stories of how our products help our end users solve problems in factories, homes, and workshops all around the world. We are part of the cultural fabric in many countries around the world. We are a values-driven organization, and we like to do business like ladies and gentlemen. Our values are hierarchical, beginning with our number one value of doing the right thing. Our values serve as decision-making guides and enable us to push accountability down the organization.
Leaders are held to extremely high levels of accountability in terms of demonstrating our values each and every day. We're very clear where our focus lies, on our maintenance products that account for 94% of our sales. Focus equals power, and we'll be further de-emphasizing our household brands that account for 6% of our sales in order to create even greater focus on our core maintenance products, as well as creating headspace for innovation in our core areas. We have a strong and highly experienced leadership team with a collective 230 years experience in building our business around the world. Our Global Strategic Council is a diverse group representing 6 nationalities and with 50% female representation. We strongly believe that diversity of experience, cultural background, expertise, and gender drive better decision-making and ultimately a better business.
We take succession planning extremely seriously at WD-40 Company and have a strong ethos of internal talent development. Several leaders you see here are new to their roles but have many years' experience at WD-40 Company. In our FY 2023, we created new global leadership roles in global learning, ESG, innovation, supply chain, and IT that will drive global strategy in these key areas for our future. Internal candidates have also moved into new trading bloc leadership roles in both EMEA and Asia Pacific over the past year or so.... At WD-40 Company, we have five key sources of competitive advantage that support our right to win. The WD-40 brand is one of the most iconic, widely distributed, and consistently executed brands out there. We deliver great products that exceed customer expectations at extremely good value.
That, in turn, drives extremely high brand loyalty and brand advocacy scores that rival the strongest brands in many countries. Our values-driven culture and highly engaged workforce are a true source of advantage in executing our strategy. Committed, passionate people simply execute more effectively, and our values ensure we do business in the right way. We strongly believe that being available to buy in more outlets than any other brand is a huge source of advantage. WD-40 Company brands are available to buy in 62+ trade channels across 176 countries and territories around the globe. Finally, it takes decades to build up the kind of global infrastructure we have in place.
We are the only true global brand in our category, and increasingly we see sharing learnings more rapidly across markets as a truly unique source of significant competitive advantage, what we call learning faster to grow faster. We are proud of our strong long-term growth trajectory and see significant opportunities ahead to build upon and accelerate our trajectory. Historic growth rates at constant currency and our focused maintenance products have grown on average at a compound annual growth rate of 5.9% over the last 10 years. Our business is both relatively predictable and highly resilient. Going forward, we expect to continue and improve upon that historic growth rate, targeting future growth in the mid- to high-single digits. Our Americas business is our largest segment, representing 50% of sales.
We still see growth ahead in our largest market of the US, where we have strong growth opportunities on WD-40 Specialist and in the industrial and e-commerce channels. Canada is a key market for premiumization growth, and Latin America has both a strong track record of growth in recent years, as well as significant opportunity for further expansion. Our growth expectations for the Americas is for growth of 5%-8%. In our second-largest segment, EMEA, we have very significant opportunities to grow across almost all markets, but especially in India, Turkey, Middle East, Germany, and Africa. We expect EMEA to grow between 8%-11% annually. Our Asia Pacific region is our smallest segment at 14% of revenues, but offers the opportunity for the fastest percentage growth, with very significant growth opportunities almost universally across the region, but particularly in China, Indonesia, and Japan.
We expect double-digit growth from Asia Pacific of 10%-13%. I'm proud to introduce to you to our new Four-by-Four Strategic Framework , which is tied to our purpose and values and will guide our future performance. Our Four-by-Four Strategic Framework was developed to drive profitable growth for sustainable value creation. There are two main elements of our strategic framework. The first element, which we refer to as our Must -Win Battles, focuses on what we do to increase sales of our maintenance products. This is an area of focus we've discussed with investors for several years.
Our Must-Win Battles include growing WD-40 Multi-Use Product sales through geographic expansion, growing sales and gross margin through the premiumization of WD-40 Multi-Use Product, growing the WD-40 Specialist product line through category leadership, and accelerating our capabilities in building our brand digitally and maximizing our global digital commerce presence. We're also introducing the second element of our strategic framework, which we refer to as our Strategic Enablers. These four Strategic Enablers focus on operational excellence and support how we will achieve our Must -Win Battles and include ensuring a people-first mindset, where we can attract, develop, and engage outstanding employees, building a sustainable business for the future, achieving operational excellence in supply chain, and driving productivity via enhanced systems.
These are the primary areas that make up our four by, excuse me, that make up our Four-by-Four Strategic Framework and where we will continue to focus our time, talent, and treasure to be successful in achieving our long-term financial and operational goals. Our largest growth opportunity and first Must -Win Battles is the geographic expansion of the blue and yellow can with a little red top. We estimate the potential global growth opportunity for WD-40 Multi-Use Product to be approximately $1 billion, and we are laser-focused on delivering long-term growth in our top 20 growth markets around the world. We're very clear on where our largest geographic growth opportunities lie, and we are doubling down on our plans to further accelerate growth in this key area for our future. Our Must -Win Battles number two is to accelerate premiumization.
Our Smart Straw delivery system has been our most successful innovation in the company's 70-year history and is loved by end users around the world. Our EZ-REACH delivery system provides our end users with even more options to solve problems in factories, workshops, and homes. For us, premiumization is a major contributor to our revenue growth as well as gross margin expansion, and also delights our end users. Over the last five years, we've achieved a compound annual growth rate for net sales of premiumized products, 7.3% in reported currency and 8.2% on a constant currency basis. We have now implemented the WD-40 Smart Straw next-generation capacity within the Americas, and are in the process of doing so in EMEA. As a result, we expect to accelerate the sales of WD-40 Multi-Use products, premiumized formats.
On a go-forward basis, we'll be targeting a compound annual growth rate for net sales of premiumized products of greater than 10% in reported currency. Our third Must-Win Battle is to drive WD-40 Specialist growth. However, we see this as much more than an incremental revenue opportunity. Driving WD-40 Specialist growth focuses on achieving category leadership by leveraging our core brand equity and taking advantage of our strong moat. It's about taking competitors off the shelf and increasing our market share. Fiscal year 2023, sales of WD-40 Specialist products were just under $67 million, up 11%. Over the last five years, we've achieved a compound annual growth rate for net sales of WD-40 Specialist of 14.4% in reported currency and 15.4% on a constant currency basis.
On a go-forward basis, we'll be targeting a compound annual growth rate for net sales of WD-40 Specialist of greater than 15% in reported currency. Our final Must-Win Battle, number 4, is to turbocharge digital commerce. Our ambition here is to engage with end users at scale and become the global leader in our category within the digital commerce platform. Must-Win Battle number 4 is about much more than selling products online. We view it as the accelerator for all of our other Must-Win Battles. Digital commerce is about brand building. It drives awareness of our brands by leveraging digital media to teach end users how to use our solutions, in addition to driving online sales.
We believe the greatest benefit of this Must -Win Battles is to increase brand awareness and engagement online, which will lead to an improved shopping experience and higher sales across all channels, both in-store and online. As part of our digital commerce strategy in 2023, we launched our first global online marketing campaign, Repair, Don't Replace. This campaign further expands our opportunity to inspire millions of doers, makers, fixers, and builders to use our solutions, not only to extend the lifespan of their tools or equipment, but also supports global efforts to reduce waste, preserve resources, and leave a positive handprint for future generations. I'll now hand over the call to Sara Hyzer, who will walk through our strategic enablers and our financial performance.
Thanks, Steve. I am briefly going to walk you through the second element of our strategic framework, which we refer to as our strategic enablers. These four strategic enablers focus on operational excellence and support how we will achieve our future success. Our first strategic enabler all starts with our people, because we believe our people are what makes us great. With over 600 employees worldwide, we strive to be an employer of choice by attracting, developing, and engaging talent who bring their best and genuine selves to work. We measure this strategic enabler through a number of quantitative metrics to help us find ways to foster a culture of belonging, which we believe helps us retain employees longer. We believe this gives us a competitive advantage to drive more consistent execution and strategy and enhance learnings over past experiences.
Strategic enabler number 2 is focused on building a sustainable business for the future. In line with our core values, we believe building a sustainable business for the future is the right thing to do for all our stakeholders, including our employees, our stockholders, and the planet we share. We are philosophically aligned with the vision to reach net zero greenhouse gas emissions by 2050, and are working on developing actions and measures for us to track going forward, which we will share more as part of our next ESG report, scheduled to come out in late calendar year 2024. We will strive to be a leader in our category with high-performing, safe, and sustainable products, and we now have a team in place who wake up every day thinking of new ways for us to explore how we will be a more environmentally sustainable enterprise.
Like many other organizations, this will not happen overnight, and we expect to make small steps over a number of years to bridge the gap from where we are today to our more sustainable future. We are committed to making science-based decisions with a balance between economic growth, environmental care, and social well-being. Beginning this year, our CEO, along with a number of other key leaders within the organization, will have a portion of their incentive compensation tied to ESG measures. Our ultimate goal here is to create and protect long-term stakeholder value. Our third enabler is focused on operational excellence within our supply chain, which WD-40 has prided ourselves on for many, many years. The COVID pandemic tested our supply chain network, and we learned how important having a best-in-class supply chain is to support the overall growth of the business.
Last year, we created a new role overseeing our global supply chain, providing headspace with a focus on long-term strategic thinking. We believe having a global view can bring synergies between our operating regions through the use of global tools and processes, helping us scale faster as a business, while also presenting new opportunities for cost savings and ESG initiatives. Our goal under this enabler are to achieve on-time delivery of greater than 95% and manage our inventory on hand to less than 90 days, while pivoting our supply chain towards a more sustainable future. Finally, our fourth enabler is focused on IT, and with an employee base of just over 600 people, we need to strive to provide them with the best IT systems to allow them to do their jobs more efficiently and effectively.
We've gotten very far with the systems we have today, but those systems will not be what we need to reach our longer term growth goals. We have been investing more in the past few years, and additional investment will be needed to support this enabler. We recently created a new role to oversee our global IT strategy, reporting into me, with a focus on identifying opportunities to streamline our tools and processes across our regions, while at the same time driving strategic investments in IT, in partnership with global stakeholders to support the growth of the organization. Like many organizations, leveraging data and running analytics in new and enhanced ways are becoming the norm, and we need to make it easier for our people to extract consistent and accurate data in order to allow for more real-time decisions grounded in data.
We are very close to going live with a new ERP system in the U.S., which is a big step for our organization, and I want to personally thank the team that has been working on this project for the past few years. So now let's pivot to discussing the financial health of WD-40 Company. We believe we have a long runway for growth, supported by our Must -Win Battles, and with more focus now on our Strategic Enablers, we can continue to deliver strong returns to our shareholders. Our asset-light strategy and strong free cash flow provide us the opportunity to invest in our brand and our people, creating a strong balance sheet that has weathered numerous storms.
As a global company, we operate in a volatile world, which brings challenges, but by operating in so many countries and trade channels, our global diversification helps us manage through those unpredictable times. It takes a lot to go wrong in a lot of different places, all at the same time, to make us wobble. WD-40, WD-40 business model has helped the company maintain a healthy financial position for years and continues to be our guiding light. We are focused on recovering our business model, as it has been under pressure the past couple of years as we have navigated a high inflationary environment. The first step is recovering our gross margins to our target of 55% by driving premiumization, geographic expansion, optimizing our supply chain, and tactical price increases.
Our Cost of Doing Business, which is defined as total operating expense plus adjustments for certain non-cash expenses, is how we measure how efficient we are operating the business. We target a Cost of Doing Business measure at 30% of net sales. In the past five years, our Cost of Doing Business has ranged between 31% and 35%. Investments in our brand, our people, ESG, and IT systems all impact our Cost of Doing Business and therefore will fluctuate. But over time, we believe those investments are necessary to support the growth, and over time, we will scale the business to our target of 30%. Finally, long term, we target EBITDA at 25% of net sales. In the past five years, our EBITDA margin has ranged between 18% and 21%.
Beginning this year, certain key leaders, including myself and our CEO, will have a portion of our incentive compensation tied to making progress to recovering our EBITDA margins, initially back to 20%-22% over the midterm. Driving top-line revenue growth, recovering our gross margins, and managing our costs are key drivers to recovering our overall EBITDA margins. Now let's turn to our capital allocation strategy. In general, we first review targets for overall growth and target both revenue and earnings growth in the mid to high single digits. Next, we look to our maintenance capital expenditure needs. We typically require maintenance capital expenditures of only 1%-2% of net sales per fiscal year. Then we fund our dividend payments, which we target to be greater than 50% of earnings. Any excess capital is then allocated to the alternatives with the highest return.
Our capital allocation strategy works to both balance investing in long-term growth while providing strong returns to our shareholders. We target a return on invested capital of greater than 25%. Our historical cash returns to shareholders have included regular dividends and share repurchases. On the top of this slide, you will see a history of our dividend payments over the last five years, including the dividend payout ratios of each of those years. The company has a long history, stretching back over 40 years of paying dividends without interruption. We are committed to continuing to return capital to stockholders through regular dividends. On the bottom of this slide, you will see the amount of share repurchases we've completed over that same period. Going forward, our objective is to return cash to investors in the most accretive manner.
Higher interest rates may mean share buybacks are not as accretive as they were in the past. However, we will continue to be active in the market, and we expect to repurchase at least enough shares to offset shares issued for equity compensation. Overall, WD-40's business model is characterized by a strong focus on learning, a commitment to financial discipline, and a willingness to innovate and adapt to changing market conditions. Matching our iconic brand with a highly engaged employee base to drive execution against our Four-by-Four Strategic Framework will drive long-term, profitable growth and continue to generate significant free cash flow to maximize stockholder returns, making WD-40 Company a compelling investment opportunity. With that, I now will pass it back to our chairman.
Thank you, Sara. Wendy has been monitoring the online questions being submitted. We will now be pleased to answer any questions from our virtual audience at this time.
We have no questions from the virtual audience. Back to you, Mr. Chairman.
Okay, thank you. This concludes the WD-40 Company's 2023 Annual Meeting of Stockholders. I would like to thank everyone for the participation. The meeting is now adjourned. This concludes the meeting.