Food Business News - May 15, 2018 - 10
Post Holdings returns to
profitability in second quarter
continues to review
how it will divest
its private brands
BOB EVANS FARMS L.L.C. AND WEETABIX LTD.
©MARILYN BARBONE, SAVANNO AND THANKSFORBUYING - STOCK.ADOBE.COM
Sales surge with Weetabix, Bob Evans acquisitions;
i.p.o. plans move forward
ST. LOUIS - Post Holdings, Inc. is "making
good progress" in reviewing strategic alternatives for its private brands business,
said Robert V. Vitale, president and chief
executive officer. The company on March
28 took a first step toward a possible
initial public offering of the business by
filing a draft registration statement on
Form S-1 to the U.S. Securities and Exchange Commission. The filing came less
than three months after Post announced
plans to combine its private brands
businesses, which produce nut butter,
healthy snacks and pasta, and explore a
range of alternatives.
"The process includes a dual path
evaluation of a carve-out i.p.o. and
transactions that include third parties,"
Mr. Vitale said during a May 4 earnings
call to discuss second-quarter results.
"We will have further announcements as
Consolidated net earnings available
to common shareholders of Post Holdings in the three months ended March
31 were $88.9 million, or $1.33 per share
on the common stock, which compared
with a loss of $5.5 million in the prior-year period. Net sales increased 26%
to $1,586.1 million from $1,255.4 million.
On a pro forma basis, which includes
pre-acquisition sales from Weetabix and
Bob Evans in the year-ago period, net
sales increased 7.5% to $1,601.6 million
from $1,490.2 million.
"We had a solid quarter with adjusted EBITDA of $314 million, in line with
Food Business News
our expectations," Mr. Vitale said. "We
continue to expect full-year results of
$1.22 billion to $1.25 billion in adjusted
EBITDA with modest favorability toward
the fourth quarter."
Competitive pressures remain high
in the U.S. cereal category as manufacturers explore new alternatives for growth
Robert V. Vitale, Post Holdings, Inc.
such as bagged cereals, Mr. Vitale said.
Segment profit for the Post Consumer
Brands segment, which includes North
American ready-to-eat cereal brands
such as Pebbles, Honey Bunches of Oats
and Malt-O-Meal, increased 1.1% to $91.1
million on net sales of $462.3 million, up
7.2% from the comparable quarter and up
0.4% on a pro forma basis.
While the Weetabix North America integration is proceeding well, Mr.
Vitale said, results in the Weetabix U.K.
business fell short in the quarter. Segment profit was $15.7 million on net sales
of $109 million in the quarter. Pro forma
net sales increased 15%, as a favorable
foreign exchange translation rate offset a
decline in volumes.
"This is our first year of ownership;
we had some seasonality," Mr. Vitale
said. "We expect a meaningful lift in adjusted EBITDA from first to second half,
but with only a 1% increase in volume
compared to prior year."
In the Refrigerated Food segment,
which includes Michael Foods egg,
potato and cheese businesses and the
recently acquired Bob Evans Farms business, segment profit grew 69% to $62.7
million on net sales of $600 million, a
32% increase over the prior-year period.
The Active Nutrition segment,
which includes PowerBar, Premier
Protein and Dymatize brands, generated
profit of $26.1 million, up 23% from the
comparable quarter. Net sales increased
16% to $205.2 million, reflecting improved velocities, expanded distribution
and new products, Mr. Vitale said.
The Private Brands segment profit
declined 6% to $14.2 million on sales of
$212.6 million, which were up 10% from the
year-ago period. Volumes grew more than
9%, driven by increases in all product lines.
"We continue to be optimistic with
respect to our mix of businesses," Mr.
Vitale said. "We have an attractive blend
of high cash-generative businesses and
Additionally, the company continues to explore merger and acquisition
opportunities, he said, adding, "However,
as you may anticipate, integration activity
of Michael Foods, Bob Evans and Post
Consumer Brands, along with the ongoing
private brands process, render significant
M.&A. a lower near-term priority.
"Be assured that if a great opportunity develops, we will respond, but
we are not aggressively pursuing such
In the six months ended March 31,
Post had net earnings of $380.4 million,
or $5.73 per share, up from $92.9 million,
or $1.35, in the comparable period. Net
sales increased 21% to $3,019.2 million
from $2,505.2 million. FBN
May 15, 2018