Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from Debt

Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

ea86c10098eb77e0e1f5de740e29f3756c0adc2d8a61cdafde5e56d27ece007b

| Metric (in millions USD) | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Global Segment           | **692.8**  **[0001558370-23-000048_lw-20221127x10q.htm:21]**  | **648.5**  **[0001558370-23-005546_lw-20230226x10q.htm:22]**  | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Foodservice Segment      | **357.9**  **[0001558370-23-000048_lw-20221127x10q.htm:21]**  | **360.0**  **[0001558370-23-005546_lw-20230226x10q.htm:22]**  | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Retail Segment           | **191.5**  **[0001558370-23-000048_lw-20221127x10q.htm:21]**  | **216.0**  **[0001558370-23-005546_lw-20230226x10q.htm:22]**  | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Other Segment            | **34.3**  **[0001558370-23-000048_lw-20221127x10q.htm:21]**  | **29.1**  **[0001558370-23-005546_lw-20230226x10q.htm:22]**  | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Total Net Sales          | **1,276.5**  **[0001558370-23-000048_lw-20221127x10q.htm:21]**  | **1,253.6**  **[0001558370-23-005546_lw-20230226x10q.htm:22]**  | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |

b4978867be3bd752e0507a6d98cd33574cee830dbcb759fcaaf5f55c2e9437a3

| Metric (Unit: USD Million) | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| North America Revenue      | N/A     | N/A     | 1,160.5  **[0001558370-23-015258_lw-20230824xex99d1.htm:0]**  | 1,135.4  **[0001558370-23-016256_lw-20230827x10q.htm:16]**  | 1,167.1  **[0001558370-24-000050_lw-20231126x10q.htm:19]**  | 947.5  **[0001679273-24-000021_lw-20240225.htm:11]** **[0001679273-24-000021_lw-20240225.htm:20]**  | 1,113.2  **[0001679273-24-000034_a8k-lwx20240526xexx991fy24.htm:18]**  | 1,103.7  **[0001679273-24-000073_lw-20240825.htm:9]** **[0001679273-24-000073_lw-20240825.htm:16]**  |
| International Revenue      | N/A     | N/A     | 534.4  **[0001558370-23-015258_lw-20230824xex99d1.htm:0]**  | 529.9  **[0001558370-23-016256_lw-20230827x10q.htm:16]**  | 565.0  **[0001558370-24-000050_lw-20231126x10q.htm:19]** **[0001558370-24-000050_lw-20231126x10q.htm:20]**  | 510.8  **[0001679273-24-000021_lw-20240225.htm:11]** **[0001679273-24-000021_lw-20240225.htm:20]**  | 498.7  **[0001679273-24-000034_a8k-lwx20240526xexx991fy24.htm:18]**  | 550.4  **[0001679273-24-000073_lw-20240825.htm:9]** **[0001679273-24-000073_lw-20240825.htm:16]**  |
| Total Net Sales            | N/A     | N/A     | 1,694.9  **[0001558370-23-015258_lw-20230824xex99d1.htm:0]**  | 1,665.3  **[0001558370-23-016256_lw-20230827x10q.htm:16]**  | 1,732.1  **[0001558370-24-000050_lw-20231126x10q.htm:19]**  | 1,458.3  **[0001679273-24-000021_lw-20240225.htm:11]** **[0001679273-24-000021_lw-20240225.htm:20]**  | 1,611.9  **[0001679273-24-000034_a8k-lwx20240526xexx991fy24.htm:18]**  | 1,654.1  **[0001679273-24-000073_lw-20240825.htm:9]** **[0001679273-24-000073_lw-20240825.htm:16]**  |

7bc0a12a476fdd4c67afc33744263603e99b03fc371970c941570cbb9dd4ca03

c514de0211f4a37c8b31114bf9c74d8b87666a5009b37868b292986bf73fb89a

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

822636c664b1909c61bc3a26026f99cb80b9ceb75fe73fe0d61bfd30bd8f7a4e

Lamb Weston Holdings, Inc. is a leading global producer, distributor, and marketer of value-added frozen potato products, with French fries representing the majority of their product portfolio **[0001558370-24-000050_lw-20231126x10q.htm:17]** **[0001679273-24-000073_lw-20240825.htm:14]** **[0001679273-24-000036_lw-20240526.htm:7]**. The company operates in two reportable segments: North America and International **[0001679273-24-000036_lw-20240526.htm:7]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:6]**. In North America, their products are sold to quick service and full-service restaurants, foodservice distributors, non-commercial channels, and retailers, under brands such as Lamb Weston, Grown in Idaho, and Alexia **[0001679273-24-000036_lw-20240526.htm:7]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:6]**. Internationally, they sell similar products through various channels, including direct sales to restaurant chains and through importers or small local distributors **[0001679273-24-000036_lw-20240526.htm:7]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:6]**. Lamb Weston has a strong presence in over 100 countries and is the number one supplier of value-added frozen potato products in North America, with a significant presence in high-growth emerging markets **[0001558370-24-000050_lw-20231126x10q.htm:17]** **[0001679273-24-000036_lw-20240526.htm:7]**.

1. **French Fries** - Produces and markets a wide range of French fries, which are the primary product and major contributor to the company's revenue.
2. **Frozen Potatoes** - Offers a variety of frozen potato products beyond French fries, catering to diverse culinary needs.
3. **Commercial Ingredients** - Supplies potato-based ingredients for use in commercial food production and preparation.
4. **Appetizers** - Provides a selection of frozen appetizers, expanding their product offerings beyond potatoes.

132ff3316b2e5d2c69ba1ae5bc47d8e695ff26d5c2676ba76287f86165de4c0f

1. Given the ongoing challenging restaurant traffic trends and your recent capacity reductions, can you elaborate on how you plan to balance supply and demand if industry demand remains weak over the next year? Are further capacity adjustments anticipated?  **[LW_3402579_21]** 

2. You've announced a restructuring plan to improve operating efficiency and protect profitability, including reducing your adjusted SG&A target. Could you provide more specifics on where these cost savings will come from, and how they might impact your operations and future growth initiatives?  **[LW_3402579_7]** 

3. With the anticipated increase in your effective tax rate due to a higher proportion of income from your International segment and other discrete items, how confident are you in achieving your updated adjusted EBITDA and EPS targets in this challenging environment?  **[LW_3402579_7]** 

4. Regarding the estimated $500 million in environmental capital expenditures over the next five years for wastewater capital investments, can you provide more details on what is driving these costs, how they will impact your free cash flow, and whether there are opportunities to mitigate or offset these expenses?  **[LW_3402579_11]** 

5. As you have idled certain production lines due to lower demand, how are you managing the fixed cost deleverage, and what impact do you expect this to have on your gross margins in both the short term and if the demand environment doesn't improve in the long term? Do you have potential to further mitigate fixed cost deleverage beyond the incremental cost savings announced for next year?  **[LW_3402579_16]** 

0abdef5b69fe5520d616d0bb2326d70a383f061de4fa6dadddd86f26ff2931de

North America

International

Foreign Net Sales

Total Revenue

e69a26413511fbb90a8a434bbcf703e9636f88f7f6d4fffb0cf83557756c7df2

- Agristo NV
- Aviko B.V.
- Cavendish Farms Corporation
- Clarebout Potatoes NV
- Farm Frites International B.V.
- J.R. Simplot Company
- The Kraft Heinz Company
- McCain Foods Limited

These competitors are part of the highly competitive value-added frozen potato products industry in North America, Europe, and other international markets. They include large North American and European companies that compete globally, as well as local and regional companies. Some competitors are larger and have substantially more financial, sales and marketing, and other resources than Lamb Weston  **[0001679273-24-000036_lw-20240526.htm:10]** .

88dfb44084212311fe543d06a536d7e01ef353d478e803d6460783c2164499f5

Volume for the total company (percentage)

Price/mix for the total company (percentage)

Volume for the North America segment (percentage)

Price/mix for the North America segment (percentage)

Volume for the International segment (percentage)

Price/mix for the International segment (percentage)

12ce44555ea7562ec32d48347044e04dfa108aea83db46c5f50e8c8f24fc3025

Global

Foodservice

Retail

Other

- Vegetable

- Byproducts

- Dairy

34f855ed1e2a326264fe3903539762076868b272f064a56e37ef39b171df3bef

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Net Sales**: $6.6 billion to $6.8 billion, growth of 2% to 5%  **[LW_3402579_6]** .
  2. **Adjusted EBITDA**: Low end of $1.38 billion to $1.48 billion  **[LW_3402579_6]** .
  3. **Adjusted SG&A**: $680 million to $690 million  **[LW_3402579_7]** .
  4. **Interest Expense**: Approximately $185 million  **[LW_3402579_7]** .
  5. **Effective Tax Rate**: Approximately 25%  **[LW_3402579_7]** .
  6. **Adjusted Diluted EPS**: $4.15 to $4.35  **[LW_3402579_7]** .
  7. **Capital Expenditures**: Approximately $750 million  **[LW_3402579_6]** .
  8. **Environmental Capital Projects**: Approximately $150 million  **[LW_3402579_6]** .
  9. **Restructuring Savings**: Approximately $55 million  **[LW_3402579_5]** .
  10. **Leverage Ratio**: Current at 3x, target 3.5x  **[LW_3402579_29]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Sales**: $6.6 billion to $6.8 billion, growth of 2% to 5%  **[LW_3394126_6]** .
  2. **Adjusted EBITDA**: $1.38 billion to $1.48 billion  **[LW_3394126_6]** .
  3. **Diluted EPS**: $4.35 to $4.85  **[LW_3394126_6]** .
  4. **Adjusted SG&A Expenses**: $740 million to $750 million  **[LW_3394126_6]** .
  5. **Depreciation and Amortization Expense**: $375 million  **[LW_3394126_6]** .
  6. **Interest Expense**: About $180 million  **[LW_3394126_7]** .
  7. **Effective Tax Rate**: Approximately 24%  **[LW_3394126_7]** .
  8. **Capital Expenditures**: Approximately $850 million  **[LW_3394126_7]** .
  9. **Volume and Price/Mix**: Volume decline in first half, increase in second half  **[LW_3394126_6]** .
  10. **First Quarter Specifics**: Sales down mid- to high single digits  **[LW_3394126_7]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EBITDA**: $350 million to $375 million for Q4  **[LW_3379571_7]** .
  2. **Adjusted Diluted EPS**: $5.50 to $5.65  **[LW_3379571_7]** .
  3. **Capital Expenditures**: $950 million  **[LW_3379571_7]** .
  4. **Annual Effective Tax Rate**: Around 23%  **[LW_3379571_7]** .
  5. **Depreciation and Amortization Expense**: $300 million  **[LW_3379571_7]** .
  6. **Interest Expense**: $140 million  **[LW_3379571_7]** .
  7. **Annual Net Sales**: $6.54 billion to $6.6 billion  **[LW_3379571_6]** .
  8. **Fourth Quarter Sales**: $1.69 billion to $1.75 billion  **[LW_3379571_6]** .
  9. **Fourth Quarter Volume**: Decline mid-single digits  **[LW_3379571_6]** .
  10. **Adjusted EBITDA for the Year**: $1.48 billion to $1.51 billion  **[LW_3379571_6]** .
  11. **Capital Expenditures for Fiscal 2025**: 12% to 13% of sales  **[LW_3379571_14]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Annual Net Sales Target**: $6.8 billion to $7 billion  **[LW_3369761_5]** .
  2. **Price/Mix**: Up low double digits for the full year  **[LW_3369761_5]** .
  3. **Volume**: Down mid-single digits for the full year  **[LW_3369761_5]** .
  4. **Adjusted EBITDA**: $1.54 billion to $1.62 billion  **[LW_3369761_5]** .
  5. **Adjusted Diluted EPS**: $5.70 to $6.15  **[LW_3369761_5]** .
  6. **SG&A**: $745 million to $755 million  **[LW_3369761_5]** .
  7. **Interest Expense**: $140 million  **[LW_3369761_5]** .
  8. **Depreciation and Amortization Expense**: $305 million  **[LW_3369761_5]** .
  9. **Capital Expenditures**: $900 million to $950 million  **[LW_3369761_5]** .

5f22a645a61e6e3f7e33ddf23eeeb9f6cf653ae6ab3f86f664bd4ff596f1c5c1

| Name                   | Position                                      | Start Date          | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|------------------------|-----------------------------------------------|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Thomas P. Werner       | Director, President, and CEO                  | November 2016       | Thomas P. Werner has served as the President and CEO of Lamb Weston Holdings, Inc. since November 2016. He was previously the President of Commercial Foods at Conagra  **[0001679273-24-000036_lw-20240526.htm:14]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:14]** **[0001679273-24-000042_lw-20240730.htm:16]** **[0001679273-24-000048_lw-20240808.htm:16]** .                                                                                                                                                    |
| Bernadette M. Madarieta| Chief Financial Officer                       | August 2021         | Bernadette M. Madarieta has been the CFO of Lamb Weston since August 2021. She joined the company in October 2016 as Vice President and Controller and Principal Accounting Officer  **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:14]** .                                                                                                                                                |
| Sharon L. Miller       | President, North America                      | May 29, 2023        | Sharon L. Miller has served as President, North America at Lamb Weston since May 29, 2023. She was previously the Senior Vice President and General Manager of the Global Business Unit  **[0001679273-24-000036_lw-20240526.htm:14]** **[0001558370-23-012203_lw-20230528x10k.htm:12]** .                                                                                                                                        |
| Sukshma Rajagopalan    | Chief Information and Digital Officer         | June 2023           | Sukshma Rajagopalan has been the Chief Information and Digital Officer at Lamb Weston since June 2023. She previously held roles at Avantor, Inc. and PepsiCo, Inc.  **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:15]** **[0001679273-24-000036_lw-20240526.htm:14]** **[0001558370-23-012203_lw-20230528x10k.htm:12]** .                                                                                                                                                        |
| Marc Schroeder         | President, International                      | May 2023            | Marc Schroeder has served as President, International at Lamb Weston since May 2023. He joined Lamb Weston in February 2023 after the acquisition of LW EMEA  **[0001679273-24-000036_lw-20240526.htm:15]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:16]** **[0001558370-23-012203_lw-20230528x10k.htm:12]** **[0001679273-24-000036_lw-20240526.htm:14]** .                                                                                                                                                           |
| Michael J. Smith       | Chief Operating Officer                       | May 29, 2023        | Michael J. Smith has been the COO of Lamb Weston since May 29, 2023. He was previously the Senior Vice President and General Manager of Foodservice, Retail, Marketing, and Innovation  **[0001679273-24-000036_lw-20240526.htm:15]** **[0001558370-23-012203_lw-20230528x10k.htm:13]** .                                                                                                                                          |
| Eryk J. Spytek         | General Counsel and Chief Compliance Officer  | October 2016        | Eryk J. Spytek has served as the General Counsel and Chief Compliance Officer at Lamb Weston since October 2016. He was previously Of Counsel at Winston & Strawn LLP  **[0001679273-24-000036_lw-20240526.htm:15]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:16]** **[0001558370-23-012203_lw-20230528x10k.htm:13]** .                                                                                                                                                       |
| Steven J. Younes       | Chief Human Resources Officer                 | January 2022        | Steven J. Younes has been the Chief Human Resources Officer at Lamb Weston since January 2022. He was previously the Executive Vice President and Chief Human Resources Officer at Loews Hotels & Co.  **[0001679273-24-000036_lw-20240526.htm:15]** **[0001679273-24-000051_lambwestonholdingsinc_x2.htm:16]** **[0001558370-23-012203_lw-20230528x10k.htm:13]** .                                                                                                                      |
| Norman Prestage        | Director, Member of Audit and Finance Committee| September 26, 2024  | Norman Prestage was appointed as a director on the Board of Lamb Weston Holdings, Inc. and as a member of the Audit and Finance Committee on September 26, 2024. He was previously a partner at Ernst & Young, LLP  **[0001679273-24-000064_lw-20240926.htm:1]** **[0001679273-24-000064_lw-20240927xexx991annualme.htm:0]** .                                                                                                             |

53e7a89d42c1043476e9fdcf393fa9cfda839ed7c075b50b230e8b601a50dee4

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | **December 19, 2024**  **[0001679273-24-000087_lw-20241124.htm:11]** **[0001679273-24-000087_lw-20241124.htm:41]**  |
| End Date/Duration        | **No expiration date**  **[0001679273-24-000087_lw-20241124.htm:11]** **[0001679273-24-000087_lw-20241124.htm:41]**  |
| Total additional amount  | **$250 million**  **[0001679273-24-000087_lw-20241124.htm:11]** **[0001679273-24-000087_lw-20241124.htm:41]**  |
| Remaining authorization amount | **$558 million**  **[0001679273-24-000087_lw-20241124.htm:11]** **[0001679273-24-000087_lw-20241124.htm:41]**  |
| Details                  | The program allows repurchase of shares at the company's discretion on the open market or through privately negotiated transactions.  **[0001679273-24-000087_lw-20241124.htm:11]**  |

4f432a31afd92290ea60cd4e2941319101a587c2d6f81922f043557e6a8de0f7

**Annual guidance for FY 2025:**
- **Net Sales**: $6.35B to $6.45B  **[LW_3411948_6]**  (lowered from $6.6B to $6.8B  **[LW_3402579_6]** )  
- **Adjusted EBITDA**: $1.17B to $1.21B  **[LW_3411948_6]**  (lowered from $1.38B to $1.48B  **[LW_3402579_6]** )  
- **Capital Expenditures**: $750M  **[LW_3411948_7]**  (no change from $750M  **[LW_3402579_6]** )  
- **Leverage Ratio**: 3.5x  **[LW_3411948_31]**  (no change from 3.5x  **[LW_3402579_29]** )

**Other guidance (no prior comparable metrics):**
- **Second Half Sales**: $3.1B to $3.2B  **[LW_3411948_6]**  (no prior guidance)  
- **Second Half Adjusted EBITDA**: $600M to $640M  **[LW_3411948_7]**  (no prior guidance)  
- **EBITDA Margin**: 19% to 20%  **[LW_3411948_26]**  (no prior guidance)  
- **Dividend**: $0.37 per share  **[LW_3411948_8]**  (no prior guidance)  
- **Share Repurchase Authorization**: $560M  **[LW_3411948_8]**  (no prior guidance)  
- **Free Cash Flow**: Positive inflection expected in FY 2026  **[LW_3411948_7]**  (no prior guidance)  
- **Volume Growth (FY 2025)**: Low single-digit increase  **[LW_3411948_6]** **[LW_3411948_7]**  (no prior guidance)  
- **Price/Mix (FY 2025)**: Low- to mid-single-digit decline  **[LW_3411948_6]** **[LW_3411948_7]**  (no prior guidance)  

81047b9094408ef5ad56bb5654fba63e52f20f8ae34e7156ebc7753fd595602a

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 2016  **[0001679273-24-000036_lw-20240526.htm:73]**    | Present  | Current auditor   |

d2a855962faf43b69bcbd46961806d57538c199513796af5c98d60c75a82d11a

56b6bcf424a726199f3647a481b068416cecfda630eddc8f333e199fa82ced3a

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $1,600.9 million (-8% YoY)  **[0001558370-24-000050_lw-20231126x10q.htm:1]** **[0001558370-24-000050_lw-20231126x10q.htm:6]** **[0001679273-24-000087_lw-20241124.htm:1]** **[0001679273-24-000087_lw-20241124.htm:4]** **[0001679273-24-000087_lw-20241124.htm:32]** **[0001679273-24-000087_lw-20241124.htm:31]**   
- North America: $1,072.1 million (-8% YoY)  **[0001558370-24-000050_lw-20231126x10q.htm:12]** **[0001679273-24-000087_lw-20241124.htm:21]**   
- International: $528.8 million (-6% YoY)  **[0001558370-24-000050_lw-20231126x10q.htm:12]** **[0001679273-24-000087_lw-20241124.htm:21]**   
- COGS: $1,323.1 million (+5% YoY)  **[0001558370-24-000050_lw-20231126x10q.htm:1]** **[0001558370-24-000050_lw-20231126x10q.htm:6]** **[0001679273-24-000087_lw-20241124.htm:1]** **[0001679273-24-000087_lw-20241124.htm:4]** **[0001679273-24-000087_lw-20241124.htm:32]** **[0001679273-24-000087_lw-20241124.htm:31]**   
- SG&A: $184.7 million (up from $17 million in Q2 2024; >900% YoY)  **[0001558370-24-000050_lw-20231126x10q.htm:1]** **[0001558370-24-000050_lw-20231126x10q.htm:6]** **[0001679273-24-000087_lw-20241124.htm:1]** **[0001679273-24-000087_lw-20241124.htm:4]** **[0001679273-24-000087_lw-20241124.htm:32]** **[0001679273-24-000087_lw-20241124.htm:31]**   
- **Operating Income: $18.5 million (-94% YoY)**  **[0001558370-24-000050_lw-20231126x10q.htm:1]** **[0001558370-24-000050_lw-20231126x10q.htm:6]** **[0001679273-24-000087_lw-20241124.htm:1]** **[0001679273-24-000087_lw-20241124.htm:4]** **[0001679273-24-000087_lw-20241124.htm:32]** **[0001679273-24-000087_lw-20241124.htm:31]**   
- **Net Income: -$36.1 million (down from $215 million YoY)**  **[0001558370-24-000050_lw-20231126x10q.htm:1]** **[0001558370-24-000050_lw-20231126x10q.htm:6]** **[0001679273-24-000087_lw-20241124.htm:1]** **[0001679273-24-000087_lw-20241124.htm:4]** **[0001679273-24-000087_lw-20241124.htm:32]** **[0001679273-24-000087_lw-20241124.htm:31]**   

e22df163b661601378fed6218012de818ba1ff9911d01a8733551eff38bd1590

6bb7d6c7152552ffc1ad899cd8a8ed4aa2e54fca77658ebaa773e8a7f0e028d5

| Year  | Amount Due (in millions) | Debt Type                  | Interest Rate | % of Total Debt |
|-------|--------------------------|----------------------------|---------------|-----------------|
| 2024  | $320.5                   | Short-term Borrowings      | N/A           | 8.0% = (320.5 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:2]** **[0001679273-24-000087_lw-20241124.htm:10]** |
| 2027  | $145.1                   | RMB Loan Facility          | 4.19%         | 3.6% = (145.1 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:10]** **[0001679273-24-000087_lw-20241124.htm:10]** |
| 2028  | $500.0                   | 4.875% Senior Notes        | 4.875%        | 12.5% = (500.0 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:10]** **[0001679273-24-000087_lw-20241124.htm:10]** |
| 2029  | $545.8                   | Term A-4, RMB, Euro Loans  | Various       | 13.6% = (545.8 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:10]** **[0001679273-24-000087_lw-20241124.htm:10]** |
| 2030  | $1,386.3                 | Term A-3, 4.125% Notes     | Various       | 34.5% = (1,386.3 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:10]** **[0001679273-24-000087_lw-20241124.htm:10]** |
| 2031  | $500.0                   | Term A-5 Loan Facility     | 5.62%         | 12.5% = (500.0 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:10]** **[0001679273-24-000087_lw-20241124.htm:10]** |
| 2032  | $700.0                   | 4.375% Senior Notes        | 4.375%        | 17.4% = (700.0 / 4,014.1) * 100 **[0001679273-24-000087_lw-20241124.htm:10]** **[0001679273-24-000087_lw-20241124.htm:10]** |

059d94c6b84131bbda8f3da4e2de121e1fc432fc05dad9366ab2a53b94cadf95

3db5fd35d490542ffc7d122c9fa41c0f6e702812234172136834822daef8154e

- **Lamb Weston experienced worsening market share losses in Q4, particularly with higher-margin customers, due to both increased competition offering better prices and execution issues, including customer service challenges related to ERP implementation. Reversing these losses may be challenging.**  **[LW_3394126_22]** **[LW_3394126_17]**
- **The company is facing soft global demand, including declining restaurant traffic in key markets, leading to higher available industry capacity and pricing pressures. This challenging operating environment may impact volumes and margins in the near term.**  **[LW_3394126_20]** **[LW_3394126_22]**
- **Due to the soft demand environment, Lamb Weston is evaluating cost management measures across the company, including possible adjustments to asset utilization rates and rephasing capital investments, indicating potential operational downsizing or underutilization of new capacities.**  **[LW_3394126_20]** **[LW_3394126_11]**

68bebc0f3ecf77672923078904c6b527de0b20a566bbd7e3ff0d6941dc8ac1b2

- **Lamb Weston is experiencing an increasingly competitive environment leading to customer losses**, which were more significant than expected. Bernadette acknowledged that the competition was "more competitive than we originally thought it was going to be" ( **[LW_3411948_14]** ).
- **The company lost another chain customer in North America** and is taking longer than anticipated to regain lost accounts, indicating ongoing challenges in customer relationships. Thomas Werner stated, "it's taken us more time than what we had previously anticipated to regain some of those accounts" ( **[LW_3411948_19]** ).
- **An activist investor is calling for significant board changes or for Lamb Weston to be sold**, and management is not addressing these concerns publicly. When asked, Thomas Werner declined to comment, saying "I'll leave it at that" ( **[LW_3411948_16]** ).

dca48b7e364197c704846839dd039eceabc4e15167e26fec5e350d8840251933

- **Strong confidence in long-term growth and resilience of the category**: The CEO believes in the long-term resilience of the industry and expects global demand to return and grow, even through current softness.  **[LW_3379571_30]** **[LW_3379571_19]**
- **Active pursuit of international acquisition opportunities**: The company continues to evaluate international acquisition opportunities to drive future growth, indicating a proactive expansion strategy.  **[LW_3379571_29]**
- **Maintained strong customer relationships despite challenges**: Despite recent operational challenges, the company has maintained good relationships with major customers, with no significant fallout, demonstrating strong customer trust and loyalty.  **[LW_3379571_27]**

87f91a5a26aaa5555561eec6c3c429c7e04c878db887069e306be9ded3fc51f5

1. **Capacity Utilization & Market Imbalance**  
   **Q:** What's your capacity utilization and view on supply-demand imbalance?  
   **A:** Management declined to provide current capacity utilization rates  **[LW_3394126_9]** , noting that they have two new facilities becoming operational in China and American Falls.  **[LW_3394126_9]**  They expect to gradually ramp up capacity over the next **18 months**, but the current demand environment may stretch that out.  **[LW_3394126_9]**  They acknowledged losing higher-margin customers during the ERP transition and face a competitive environment due to incremental supply and softening restaurant traffic trends.  **[LW_3394126_9]** **[LW_3394126_10]**  Quick Service Restaurants (QSRs), accounting for **80% of french fry consumption**, are experiencing continued deceleration in traffic, making contracting more challenging than ever.  **[LW_3394126_9]** 

2. **Pricing Concessions & Reinvestment**  
   **Q:** Are you making pricing concessions to regain customers?  
   **A:** Management is making strategic choices to invest back with customers and win their business back.  **[LW_3394126_10]**  They are not commenting on ongoing contract negotiations.  **[LW_3394126_10]**  The challenges during the ERP implementation significantly impacted independent restaurants, leading to substantial share loss.  **[LW_3394126_10]**  They acknowledge a competitive environment with incremental supply and softening restaurant traffic trends.  **[LW_3394126_10]** **[LW_3394126_9]** 

3. **Operational Adjustments & Capacity Rightsizing**  
   **Q:** Are you considering capacity rightsizing or closing older facilities?  
   **A:** Management is evaluating various options across the company to manage costs based on current operating conditions.  **[LW_3394126_11]**  While not commenting specifically on potential capacity rightsizing, they are looking at all areas to adjust as needed.  **[LW_3394126_11]** 

dc6c6e0cf7b35ea26e7eb2f0e82b2934adb06b69a9b0a56989c66f830dad7544

1. **Slowing Restaurant Traffic and Capacity**  
   **Q:** How will slowing restaurant traffic affect pricing?  
   **A:** Management acknowledges that restaurant traffic trends have been **soft** but expects this to be a **temporary outlier**.  **[LW_3379571_9]**  They plan to manage incoming capacity carefully, as they have in the past, and remain confident in the long-term trajectory of the category, expecting growth to return to **2% to 4%** at a minimum.  **[LW_3379571_9]** 

2. **Volume Decline and Outlook**  
   **Q:** What's causing the current volume decline?  
   **A:** The company experienced a **16% decline** in volume for the quarter, with **8 points** due to the ERP transition.  **[LW_3379571_11]**  Underlying volumes declined **4% to 5%** due to softer traffic trends, which are expected to remain soft in Q4.  **[LW_3379571_11]** **[LW_3379571_16]**  The decline is more industry-driven, with softer restaurant traffic impacting volumes.  **[LW_3379571_16]** 

3. **Confidence in Long-term Outlook**  
   **Q:** Does soft traffic change your long-term expectations?  
   **A:** Management remains confident in their long-term growth algorithm despite current softer traffic.  **[LW_3379571_19]**  They believe the category will continue to grow and see no reason to adjust their rhythm at this point.  **[LW_3379571_19]**  They are confident in the long-term resilience of the category and expect global markets to return.  **[LW_3379571_30]** 

4. **CapEx Plans and Capital Allocation**  
   **Q:** How will you manage CapEx amid slower demand?  
   **A:** The company maintains elevated CapEx levels for this year and next, committed to projects in the Netherlands and Argentina.  **[LW_3379571_14]**  CapEx in fiscal '25 is expected to be **12% to 13% of sales**, consistent with prior guidance.  **[LW_3379571_14]** 

5. **Non-recurring Costs and EBITDA**  
   **Q:** Will non-recurring costs impact next year's EBITDA?  
   **A:** Management acknowledges absorbing certain costs in fiscal '24, such as inventory write-offs and ERP disruption costs.  **[LW_3379571_10]**  Excluding these non-recurring costs could bring EBITDA closer to **$1.7 billion** as a base for fiscal '24.  **[LW_3379571_10]**  They will assess restaurant traffic trends' impact on volume moving forward.  **[LW_3379571_10]** 

6. **Regaining Market Share Post-ERP**  
   **Q:** How will you recover lost market share?  
   **A:** Management is working to win back customers after the ERP transition impacted service.  **[LW_3379571_13]**  They have activated their direct sales force of **300 salespeople** and are confident in their plan, but acknowledge it will take time.  **[LW_3379571_13]**  Rebuilding relationships will take several months, coinciding with contracting cycles.  **[LW_3379571_26]** 

7. **Price/Mix Improvement**  
   **Q:** Will price/mix improve in upcoming quarters?  
   **A:** Price/mix is expected to improve sequentially in Q4  **[LW_3379571_12]** , as they resume fulfilling higher-margin orders previously impacted by order fulfillment issues.  **[LW_3379571_12]**  In fiscal '25, favorable mix impact is anticipated due to new capacity allowing for more premium products.  **[LW_3379571_24]** 

8. **Potato Costs and Pricing**  
   **Q:** How will lower potato costs affect pricing?  
   **A:** Potato costs are expected to decrease by **2% to 3%** for the 2024 crop.  **[LW_3379571_22]**  However, previous years saw significant increases, and inflationary pressures persist in other input costs.  **[LW_3379571_22]**  The company does not expect double-digit inflation but will still deal with some inflation.  **[LW_3379571_22]** 

9. **M&A Plans**  
   **Q:** Are you still pursuing M&A opportunities?  
   **A:** International acquisition opportunities are not off the table.  **[LW_3379571_29]**  The company continues to evaluate potential deals and will proceed if opportunities arise, despite the ongoing ERP implementation.  **[LW_3379571_29]** 

10. **Dividends and Share Buybacks**  
    **Q:** What's your approach to dividends and buybacks?  
    **A:** The company is committed to the dividend and will evaluate share buybacks as they assess CapEx.  **[LW_3379571_20]**  They will consider buybacks, especially given current equity price pressures.  **[LW_3379571_20]** 

707b3824177d5d429aa6f2e0676280d908dfe779def2b702169d4848748bc60c

1. **Capacity Reductions Impact**  
   **Q:** Will capacity cuts balance supply-demand if demand stays weak?  
   **A:** Management emphasized that recent capacity reductions, including closing the Connell facility (about **5% of North America capacity**  **[LW_3402579_22]** ), are decisions made to manage the current environment of challenged restaurant traffic.  **[LW_3402579_20]**  They believe these are short-term measures and expect the category to rebound, but declined to speculate on whether these actions alone would balance supply and demand if demand remains unchanged.  **[LW_3402579_21]** 

2. **Gross Margin Outlook**  
   **Q:** Why is gross margin being impacted by capacity curtailments?  
   **A:** The temporary idling of lines leads to **fixed cost deleveraging**, as fixed costs are spread over fewer pounds produced.  **[LW_3402579_16]** **[LW_3402579_18]**  While the permanent closure of Connell is beneficial, the temporary curtailments result in higher per-pound manufacturing costs.  **[LW_3402579_13]** **[LW_3402579_16]**  They expect gross margins to improve once volumes return and lines are brought back up.  **[LW_3402579_13]** 

3. **Capital Expenditures and Environmental Costs**  
   **Q:** What's the plan for the $500 million environmental CapEx?  
   **A:** The company expects to spend **$500 million** over the next five years on environmental improvements, primarily wastewater capital investments needed to maintain current capacity levels.  **[LW_3402579_11]**  They are exploring opportunities for government incentives to help reduce these costs.  **[LW_3402579_11]**  For next year, total CapEx is estimated to be around **$550 million**, including **$150 million** for environmental initiatives.  **[LW_3402579_14]** **[LW_3402579_15]** 

4. **Pricing Outlook**  
   **Q:** Will pricing turn negative for the rest of the year?  
   **A:** Management expects greater pricing investment in the balance of the year, leading to **negative price/mix**.  **[LW_3402579_20]**  The overall pricing environment is competitive but disciplined, and pricing investments are on track with expectations.  **[LW_3402579_20]**  They anticipate this as part of their strategy to retain customers, especially in the Foodservice channel.  **[LW_3402579_9]** **[LW_3402579_20]** 

5. **Cost-Saving Initiatives**  
   **Q:** How will cost-saving plans affect SG&A and future savings?  
   **A:** The company expects **$55 million** in savings this year, with an additional **$30 million** next year for a total of **$85 million** in savings.  **[LW_3402579_14]** **[LW_3402579_17]**  About two-thirds of this year's savings will reduce SG&A expenses, primarily through people-related costs.  **[LW_3402579_17]** 

6. **Impact of Idled Capacity on Future Margins**  
   **Q:** Will margins stay lower if idled lines aren't restarted?  
   **A:** Management views the current margin impact from idled lines as a **short-term issue**.  **[LW_3402579_16]**  They believe margins will improve when demand rebounds and volumes return, allowing them to leverage fixed costs more effectively.  **[LW_3402579_16]** **[LW_3402579_18]**  They are confident in their modernized footprint to support future growth.  **[LW_3402579_13]** **[LW_3402579_16]** 

7. **ERP Implementation Delay**  
   **Q:** Does delaying ERP implementation affect medium-term targets?  
   **A:** Delaying the ERP implementation will postpone the benefits, but management does not foresee any major impact on medium-term financial targets.  **[LW_3402579_12]**  They plan to restart ERP work after completing capital spending and major expansions by the end of this year.  **[LW_3402579_12]** 

8. **Share Loss Recovery**  
   **Q:** How is share regain progressing after ERP disruptions?  
   **A:** The company is winning back business, expecting to see benefits starting in **Q3 and Q4** of this fiscal year.  **[LW_3402579_21]**  However, challenged restaurant traffic is impacting volumes across key accounts, which may cloud the overall recovery.  **[LW_3402579_21]** 

9. **International Growth Prospects**  
   **Q:** What is driving strong international volume trends?  
   **A:** Strong volume growth in the **Asia-Pacific** region and **Latin America** is driven by customer wins and new capacity coming online, such as the upcoming plant in Argentina expected in spring next year.  **[LW_3402579_24]**  International customer wins will begin to impact results in the third quarter.  **[LW_3402579_24]** 

10. **Supplier Contract Negotiations**  
    **Q:** Will lower volumes change supplier contract terms?  
    **A:** Management does not expect changes in how they negotiate supplier contracts despite paying for contracted potatoes they won't use due to curtailments.  **[LW_3402579_26]** **[LW_3402579_27]**  They are currently in negotiations and will provide insights at the appropriate time.  **[LW_3402579_27]** 

11. **Leverage Targets**  
    **Q:** Any changes to the current leverage target?  
    **A:** There are **no changes** to the leverage target of **3.5x** net debt to EBITDA.  **[LW_3402579_28]**  Currently, leverage stands at **3.0x**, providing optionality.  **[LW_3402579_28]** 

47b1a31a28c686d4e66ddf578f541c17677ad0bcfdaa28a379fc18f747e8d4a0

- **Lamb Weston plans to opportunistically buy back shares due to increased free cash flow in the back half of the year, bolstered by an additional $250 million share repurchase authorization**.  **[LW_3411948_15]**
- **Despite short to medium-term challenges, Lamb Weston expects EBITDA margins to remain strong at 19% to 20%, with plans to expand margins over the longer term by pricing to offset inflation**.  **[LW_3411948_10]**
- **The company remains confident in the long-term growth of the industry, citing continued category growth and positive french fries attachment rates, and is proactively managing its business to navigate the current environment**.  **[LW_3411948_11]**

00a13957053ae3088fc3f3b2b59ec50828720f297b675fbb5e6e55444ba539b5

- **Maintaining Leverage Target at 3.5x, Currently at 3x Providing Optionality**  **[LW_3402579_29]** : The company remains committed to its leverage target of **3.5x**, and is currently at **3x**, allowing flexibility for future opportunities.
- **Proactive Capacity Management to Address Supply-Demand Imbalance**  **[LW_3402579_10]** **[LW_3402579_21]** : Lamb Weston is taking decisive actions to adjust capacity in response to challenging restaurant traffic trends, which may improve industry supply-demand balance and enhance profitability.
- **Stabilized Pricing Environment with Better-than-Expected Price/Mix**  **[LW_3402579_9]** : Despite a competitive environment, the company has stabilized pricing, achieved a better mix, and pricing was in line with expectations.

8c4de453021de7fd4cb6c5c30f75490116d0d46ec3f03f22e6286d6d7c5683fa

- **Lamb Weston expects volume growth in the second half of fiscal 2025 due to recent customer contract wins and a strong sales pipeline, with some share gains already committed.**  **[LW_3394126_17]**
- **Management is confident in regaining market share and is seeing wins in the marketplace today, which gives confidence in driving future growth.**  **[LW_3394126_22]**
- **The company has resumed shipping to customers after the voluntary product withdrawal, indicating resolved operational issues and potential recaptured sales.**  **[LW_3394126_27]**

732b613bc1a032b99b72fdfe9fbc5576a59f730c275924e6e532d51c5b1fc794

- **Lamb Weston expects mid-single-digit volume declines in Q4 due to softer restaurant traffic trends** in North America and key international markets, which may impact sales and profitability.  **[LW_3379571_16]**
- **Consumers are adjusting to higher menu prices, leading to decreased restaurant traffic**, and it will take time for traffic to recover, potentially prolonging the negative impact on the company's performance.  **[LW_3379571_21]**
- **Recent ERP system transition issues caused significant operational disruptions**, including shipment delays and canceled orders; although service levels have been restored, **some customers may temporarily secure supply from alternative sources**, affecting future volumes and customer relationships.  **[LW_3379571_30]** **[LW_3379571_16]**

caf257152dea7dae7f688fcb26fe649db7039f942daa9314c29a8fba2bc98d6b

- **Declining volumes and higher costs led to a significant drop in adjusted EBITDA, decreasing by $123 million to $290 million compared to the prior year quarter.**  **[LW_3402579_4]**
- **The company anticipates approximately $500 million in environmental compliance capital expenditures over the next 5 years, primarily for wastewater investments needed to continue operating at current capacity levels, which may pressure cash flows.**  **[LW_3402579_11]**
- **Increased pricing investments in a competitive North American market are expected to result in negative price/mix for the remainder of the year, potentially impacting margins.**  **[LW_3402579_20]**

c84eb01b05aaa72824162733829fc9b001f5678f56682bc3f8f6aa11ea7a684a

1. **EBITDA Margin Outlook**  
   **Q:** What's the new normalized EBITDA margin?  
   **A:** Management expects normalized EBITDA margins of **19% to 20%** in the short to medium term, due to ongoing pressures. They aim to expand margins over time by offsetting inflation through pricing initiatives ( **[LW_3411948_10]** ,  **[LW_3411948_26]** ).

2. **Weak Demand Reasons**  
   **Q:** Why is consumer demand weak? Is GLP-1 impacting it?  
   **A:** The decline in demand is primarily due to reduced restaurant traffic amid persistent inflation, leading consumers to trade down. They have not seen a significant impact from GLP-1 weight loss drugs and don't expect it to affect long-term demand. Importantly, fry attachment rates remain steady ( **[LW_3411948_22]** ).

3. **Industry Overcapacity**  
   **Q:** Why is there industry overcapacity?  
   **A:** Companies expanded capacity based on historical demand growth, but restaurant slowdowns have led to excess capacity. Management views this as a transitory situation and believes some capacity additions may be delayed or not materialize ( **[LW_3411948_11]** ,  **[LW_3411948_20]** ).

4. **Customer Losses**  
   **Q:** What's causing customer losses? Any reputation risk?  
   **A:** Customer losses were mainly due to competitive pricing pressures, not service issues or ERP challenges. The company is working to regain lost accounts by focusing on consistency, quality, innovation, and customer service. Relationships with large customers are improving, though it's taking longer than expected ( **[LW_3411948_14]** ,  **[LW_3411948_19]** ,  **[LW_3411948_25]** ).

5. **Operational Challenges**  
   **Q:** What's behind production inefficiencies and gross margin declines?  
   **A:** Production challenges, including inefficiencies and unplanned downtime, have impacted margins. A new Chief Supply Chain Officer is addressing these issues, and improvements are being seen. They expect to return to normal efficiency levels over time ( **[LW_3411948_13]** ,  **[LW_3411948_27]** ,  **[LW_3411948_28]** ).

6. **International Pressures**  
   **Q:** What's affecting international markets in Europe and Asia?  
   **A:** In Europe, competitive pressure and difficulties in passing through inflation due to a better-than-expected potato crop are causing challenges. In Asia, increased competition and prior ERP issues have led to pressure, but the company is making progress in regaining business in these markets ( **[LW_3411948_12]** ).

7. **Capital Allocation**  
   **Q:** Any plans for share buybacks or CapEx changes?  
   **A:** The company extended its share buyback program with an additional **$250 million** authorization and plans to opportunistically repurchase shares as free cash flow increases. CapEx guidance remains at **$550 million**, focusing on maintenance and modernization ( **[LW_3411948_15]** ,  **[LW_3411948_21]** ,  **[LW_3411948_31]** ).

8. **Activist Investor Concerns**  
   **Q:** Will there be board changes or a sale of the company?  
   **A:** Management did not comment on potential board changes or a sale, stating they are focused on earnings, business outlook, and leadership transition ( **[LW_3411948_16]** ).

9. **Leverage Target**  
   **Q:** Has the leverage target changed?  
   **A:** The company maintains its leverage target of **3.5x**, with no changes planned despite adjustments in capital spending and shareholder returns ( **[LW_3411948_31]** ).

fc76eb45b08148fe55e4b903686bdcafc4370f5947bd3a6e3e28f844f2596dcb

Lamb Weston Holdings Inc (LW)

Financials