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Post Holdings, Inc. (POST)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid topline and stronger GAAP profitability: net sales $2.01B (+3.3% YoY), operating profit $190.9M (+24.8% YoY), net earnings $81.6M (+24.2% YoY); Adjusted EBITDA was $348.7M (-0.1% YoY) as non-GAAP adjustments normalized versus the prior year’s unusual items .
  • Segment mix: Foodservice volumes grew 3.6% with mix shifting to higher value-added eggs/potatoes; PCB (cereal + pet) benefitted from Perfection Pet ($67M) while co-manufactured pet food volumes declined; Weetabix saw FX tailwinds; Refrigerated Retail showed volume growth in sides/sausage offset by egg/cheese distribution losses .
  • FY2025 guidance initiated: Adjusted EBITDA $1.41–$1.46B and CapEx $380–$420M; management later affirmed the EBITDA range despite an HPAI incident, noting impact remains within guidance tolerances .
  • Management highlighted multi-year execution priorities: premium pet brand relaunch (Nutrish), cereal network optimization (Lancaster closure completed), aseptic shake ramp now targeted to reach run-rate in 2H FY25; optionality from refinancings and sizable buyback capacity ($472.3M remaining) supports capital allocation flexibility .

What Went Well and What Went Wrong

What Went Well

  • Foodservice delivered volume growth (+3.6%) and favorable mix; precooked egg products up 7.5%, helping offset HPAI headwinds and softer QSR traffic. “Our highest margin precooked egg products led the way, up 7.5%” .
  • PCB showed profit resilience, aided by Perfection Pet contribution and disciplined manufacturing/supply chain performance; segment Adjusted EBITDA rose to $203.7M (+2% YoY) .
  • Capital allocation agility: debt maturity ladder extended and liquidity increased; buybacks totaled ~3.0M shares in FY24, with $472.3M remaining authorization. “Refinancings…added significant runway to our maturity ladder and increased liquidity” .

What Went Wrong

  • Refrigerated Retail faced distribution losses in lower margin egg and cheese, limiting net sales growth despite sides/sausage volume gains; segment net sales fell 2.9% YoY to $226.5M .
  • Weetabix volumes declined in non-biscuit branded and private label (ex-Deeside), with ERP conversion expected to pressure sequential margins near term. “We are now live on our new ERP…we would expect in the back half of the year to regain momentum” .
  • Aseptic shake co-manufacturing (BellRing) remains below expected output, with run-rate now pushed roughly a year to 2H FY25 due to equipment, parts lead times, and labor issues .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Net Sales ($USD Billions)$1.945 $1.999 $1.948 $2.010
Gross Profit Margin %28.3% 29.0% 29.6% 28.6%
Diluted EPS ($)$1.01 $1.48 $1.53 $1.28
Adjusted Diluted EPS (non-GAAP) ($)$1.63 $1.51 $1.54 $1.53
Adjusted EBITDA ($USD Millions)$349.0 $345.2 $350.2 $348.7
Adjusted EBITDA Margin %17.9% 17.3% 18.0% 17.3%
Consensus Revenue (S&P Global)N/A*N/A*N/A*N/A*
Consensus EPS (S&P Global)N/A*N/A*N/A*N/A*

*Estimates unavailable; values were intended to be retrieved from S&P Global.

Segment breakdown

Segment MetricQ4 2023Q2 2024Q3 2024Q4 2024
PCB Net Sales ($MM)$1,008.0 $1,065.5 $1,008.1 $1,047.4
PCB Adjusted EBITDA ($MM)$199.7 $199.0 $193.5 $203.7
Weetabix Net Sales ($MM)$134.9 $138.0 $136.1 $140.0
Weetabix Adjusted EBITDA ($MM)$24.9 $27.8 $34.2 $32.4
Foodservice Net Sales ($MM)$569.5 $554.8 $589.1 $596.1
Foodservice Adjusted EBITDA ($MM)$117.0 $101.7 $120.4 $107.5
Refrigerated Retail Net Sales ($MM)$233.3 $240.4 $214.4 $226.5
Refrigerated Retail Adjusted EBITDA ($MM)$30.7 $40.5 $23.3 $31.6

KPIs and cash/capex

KPIValuePeriod
Operating Cash Flow ($MM)$931.7 FY 2024
Capital Expenditures ($MM)$429.5 FY 2024
Free Cash Flow ($MM)$502.2 FY 2024
Cash & Cash Equivalents ($MM)$787.4 9/30/2024
Share Repurchases0.4M shrs; $48.2M @ $107.48 avg Q4 2024
Notes Redemption UpdateIntent to redeem $464.9M of 5.625% 2028s (Dec 2, 2024) Post-Q4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (non-GAAP)FY 2025N/A$1,410–$1,460M Initiated
Adjusted EBITDA (non-GAAP)FY 2025 (as of Dec 9)$1,410–$1,460M$1,410–$1,460M Maintained/Affirmed
Capital ExpendituresFY 2025N/A$380–$420M; includes PCB ($90–$100M) and Foodservice ($80–$90M) focus areas Initiated
Adjusted EBITDA (non-GAAP)FY 2024 (historical)Raised to $1,370–$1,390M (Aug 1) Actual FY 2024: $1,403.6M Outperformed prior guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Pet Food integration & premium relaunchIntegration on track; trade-down aiding value pet; margins sustainably low-teens; Perfection adds western footprint Nutrish relaunch starting calendar Q1; premium brands stabilizing; exited Smucker TSA with early positive cutover Stabilization to strengthening; brand investments ramping
Foodservice volumes & HPAIStrong value-added proposition; run-rate ~$95–105M/qtr EBITDA; scenario planning for HPAI Volumes +3.6%, precooked eggs +7.5%; mix favorable; HBAI supply cost timing managed; foot traffic a swing factor Resilient volumes/mix; HPAI remains uncertainty
Aseptic shakes (BellRing co-man)Start-up challenges, targeted run-rate by end of FY24 initially Run-rate now targeted 2H FY25 due to equipment/parts/labor delays Delay; output improving but under plan
Cereal category & private labelCereal decline normalizing as SNAP laps; competition rational; private label exposure beneficial Cereal category decline slowed to ~2.6%; environment rational; network optimization ongoing (Lancaster closure complete) Normalization underway; continued optimization
Weetabix margin recovery & ERPCost-out identified; FX tailwind; private label mix ERP conversion live; near-term margin pressure; multi-year path back toward ~30% margin Execution over multi-year horizon
Capital allocation/M&A optionalityDeep pipeline; disciplined valuation; debt refinancings increased runway/liquidity Optionality highlighted; comfortable with high end of FY25 range; buybacks ongoing High flexibility; opportunistic stance

Management Commentary

  • “The last 2 years have seen a step change in adjusted EBITDA growing by 45%…we converted this growth into strong free cash flow, generating approximately $1 billion over the past 2 years” — Robert Vitale, CEO .
  • “Within cereal, we saw the rate of category decline slow to 2.6%…our branded portfolio outperformed the category and private label continued to grow” — Jeff Zadoks, COO .
  • “We completed the closure of our Lancaster cereal plant on time and on budget…we exited the Smucker’s TSA and moved the pet business onto our own systems” — Jeff Zadoks, COO .
  • “We had another strong quarter, generating $235 million from operations and approximately $100 million in free cash flow…we issued $1.8 billion in debt…pushed out our 2028 bond maturity to 2034 while maintaining net leverage at 4.3x” — Matt Mainer, CFO .
  • “We expect to get to the [shake] run rate closer to the second half of FY ‘25, which is a year later than we expected” — Robert Vitale, CEO .

Q&A Highlights

  • Topline vs margin trajectory: Management will “manage out lower margin business” and continue cereal network optimization; volume declines become an issue only when plants become deleveraged, which they are “quite a ways from” given flexibility .
  • Private label dynamics: No erosion seen in private label penetration; expect reversion to norm as inflation settles; category-by-category effects .
  • Eggs/HPAI pricing: Value-added model mitigates volatility; pricing or allocation used depending on cost pressures; prepared for multiple contingencies .
  • FY25 range drivers: ERP conversions and Bob Evans sides pressure are watchpoints; “high end of our range, we’re very comfortable” with the algorithm .
  • Foodservice levers: QSR foot traffic and mix toward value-added products are key; upside if large coffee/QSR customers’ traffic improves, with mix benefits .
  • Pet network optimization: Perfection adds western manufacturing/distribution; likely shrink some co-man business and move footprint west; additional benefits more in FY26 .
  • Weetabix margins: Multi-year cost-out and simplification path back toward ~30% margins; ERP conversion creates near-term pressure .

Estimates Context

  • We attempted to retrieve S&P Global consensus EPS and revenue for Q4 2024 and prior quarters; data was unavailable due to access limits. As a result, we cannot precisely assess beats/misses versus Wall Street consensus for this recap. Future comparisons will anchor on S&P Global consensus when accessible.

Key Takeaways for Investors

  • Portfolio resilience with disciplined mix: Foodservice continues to shift toward higher-margin precooked eggs; PCB benefits from pet network investments while shedding lower-margin co-manufactured volumes .
  • FY2025 outlook balanced and reaffirmed despite HPAI: EBITDA $1.41–$1.46B and elevated CapEx ($380–$420M) support network optimization (PCB, cage-free expansion) and growth platforms (pre-cooked eggs), with affirmed guidance post-HPAI event .
  • Execution focus near term: Watch Nutrish relaunch and shelf resets, Weetabix ERP stabilization, and the aseptic shake ramp now targeted for 2H FY25; these are pivotal for margin trajectory and growth algorithm delivery .
  • Capital allocation optionality: Extended maturities, higher liquidity, and remaining buyback capacity ($472.3M) create tactical flexibility for M&A or repurchases; redemption of 2028 notes reduces near-term debt stack .
  • Cereal normalization: Category declines moderating (~2.6% rate), competitive environment rational; network optimization should support margins even if volumes remain pressured .
  • Foodservice sensitivity to QSR traffic: Upside optionality if large customers’ traffic improves; mix benefits amplify volume recovery in value-added offerings .
  • Risk monitoring: HPAI, ERP conversions, sides category elasticity, and premium pet brand investments are the main variables that could skew results within guidance bounds .