Primo Water — Primo Brands — Q2 2024 Earnings Presentation
24 slides from Primo Water's earnings presentation, Aug 8, 2024
Slide 1: 2nd Quarter 2024 Results
2nd QUARTER 2024 RESULTS August 8, 2024
Slide 2: Cautionary Statements
Cautionary Statements Safe Harbor Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and applicable Canadian securities laws conveying management's expectations as to the
Slide 3: Q2 2024 Financial Presentation: Presenters and Agenda
Q2 2024 Financial Presentation Today’s Presenters Tom Harrington Tom Harrington Robbert Rietbroek David Hass CHIEF EXECUTIVE CHIEF EXECUTIVE CHIEFOFFICER EXECUTIVE CHIEF FINANCIAL OFFICER OFFICER OFFICER • Q2 2024 Financial Summary • Must Win Priorities AGENDA • Q2 2024 Reported Results • 2024 Finan
Slide 4: Q2 2024 Financial Summary
Q2 2024 Financial Summary Financial Performance for Continuing Operations (in millions) Continuing Operations Q2 2024 Q2 2023 Change Revenue $485.0 $450.6 7.6% Adj. EBITDA1 $112.9 $98.3 14.9% Adj. EBITDA Margin %1 23.3% 21.8% 150 bps Q2 2024 Highlights • 7.6% revenue growth of 3.1% volume and 4.5% p
Slide 5: "Must Win" Priorities
"Must Win" Priorities Superior Customer Experience • Organic customer base growth • Increase high impact customers • Enhance customer touch points Be the Partner of Choice • Deepening relationship with top-tier retailers • Increase presence, penetration, and volume • Create connectivity Operational
Slide 6: Superior Customer Experience
Superior Customer Experience Value Offering - Multiple Price Tiers Mountain Valley • Mountain Valley retail and on premise revenue increased 87% • High demand for 9-pack 16oz aluminum bottles (-) Price per Gallon (+) Price per Gallon (-) Time / Convenience (+) Time / Convenience Customer Recruitment
Slide 7: Preferred Water Solutions Partner
Preferred Water Solutions Partner Customer and Volume Growth Strategic Partners Investors Key investor themes include: • Customer and volume growth starts • Associate workplace upgrades • European asset sale update with increasing the number of • Community Involvement • North American focus customer
Slide 8: Operational Excellence
Operational Excellence Operational Updates • Implementation of 6- and 7-day delivery schedules • Continued installation of high-efficiency production lines • Focus on delivering the previously announced business optimization program U.S. Water Direct & Exchange U.S. Water Direct & Exchange Revenue 1
Slide 9: Q2 2024 Reported Results – Continuing Operations
Q2 2024 Reported Results – Continuing Operations For the Three Months Ended (in millions of U.S. dollars) June 29, 2024 July 1, 2023 $ Change % Change % Volume 1 % Price 1 Revenue, net Water Direct/Water Exchange $368.2 $342.9 $25.3 7.4% 2.2% 5.2% Water Refill/Water Filtration 61.8 55.4 6.4 11.6% 10
Slide 10: Dispenser Sell-Through - Continuing Operations
Dispenser Sell-Through - Continuing Operations It All Starts with Dispenser Sell-Through Annual Sell-Through 1 Trailing Twelve Month Sell-Through 1 1,100K 1,059K Tariff In Place 1,100K 995K 982K 1,060K 1,059K 1,054K 1,000K 1,050K 1,022K 887K 902K 1,007K 1,017K 1,008K 900K 995K 998K 998K 1,000K 982K9
Slide 11: 2024 Financial Outlook - Continuing Operations Only
2024 Financial Outlook - Continuing Operations Only Financial Outlook Q3 2024 Range 1 FY 2024 Range1 ($ in millions) Low High Low High Revenue $485 $495 $1,870 $1,890 Adj. EBITDA $115 $125 $420 $440 Cash Taxes $35 $45 Cash Interest, Net 2 $25 $45 CAPEX 3 ~ 7% of Revenue + $22.5M Strategic Investment
Slide 12: Capital Allocation
Capital Allocation • Stable & recurring cash flow generation platform Organic Growth • Opportunities to fund growth via organic initiatives, acquisitions as well as capital projects to drive efficiencies Accretive M&A • Improve financial profile and returned excess capital to shareowners Capital Pro
Slide 13: Q&A
Q&A 13
Slide 14: Appendix
APPENDIX 14 14
Slide 15: Continuing Operations Historical and Forecasted Financials
Continuing Operations Historical and Forecasted Financials Revenue 1 Adj. EBITDA 2 Normalized Revenue Exclusions Adj. EBITDA Adj. EBITDA Margin $1,880.0 $430.0 $1,771.8 $380.7 $1,693.2 $343.8 22.9% $1,576.4 $48.4 $304.3 21.5% $155.7 $1,644.8 20.3% $1,420.7 19.3% 2021A 2022A 2023A 2024 2021A 2022A 20
Slide 16: 2023 EBITDA and Free Cash Flow by Quarter - Continuing Operations
2023 EBITDA and Free Cash Flow by Quarter - Continuing Operations Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) For the Fiscal Year Ended December 30, 2023 First Quarter 1 Second Quarter 1 Third Quarter 2 Fourth Quarter 1 Total 1 Revenue, net $ 412.5 $ 450.6 $ 470.0 $ 438.7 $ 1,7
Slide 17: Q2 EBITDA and Adjusted EBITDA - Combined
Q2 EBITDA and Adjusted EBITDA - Combined Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) For the Three Months Ended June 29, 2024 July 1, 2023 Continuing Discontinued Combined Continuing Discontinued Combined Operations 1 Operations 2 Operations 1 Operations 2 Revenue, net $ 485.0
Slide 18: Q2 YTD EBITDA and Adjusted EBITDA - Combined
Q2 YTD EBITDA and Adjusted EBITDA - Combined Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) For the Six Months Ended June 29, 2024 July 1, 2023 Continuing Discontinued Combined Continuing Discontinued Combined Operations 1 Operations 2 Operations 1 Operations 2 Revenue, net $ 937.
Slide 19: Price/Volume Growth - Continuing Operations
Price/Volume Growth - Continuing Operations (in millions of U.S. dollars) Fiscal Year 2023 Year-to-Date 2024 Q1 Q2 Q3 Q4 Full Year Q1 Q2 YTD Water Direct/Water Exchange1 Price 9.7% 5.5% 4.7% 5.2% 6.1% 6.0% 5.2% 5.6% Volume 2.6% 1.3% 1.9% 2.7% 2.1% 2.6% 2.2% 2.4% Total Water Direct/Water Exchange1 Ch
Slide 20: Normalized Revenue Growth - Continuing Operations
Normalized Revenue Growth - Continuing Operations Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) Fiscal Year 2023 Year-to-Date 2024 Q1 Q2 Q3 Q4 Full Year Q1 Q2 YTD Prior Year Revenue (as reported) $ 399.9 $ 440.3 $ 447.9 $ 405.1 $ 1,693.2 $ 412.5 $ 450.6 $ 863.1 Impact of Retail &
Slide 21: Q2 Free Cash Flow and Adjusted Free Cash Flow - Combined
Q2 Free Cash Flow and Adjusted Free Cash Flow - Combined Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) For the Three Months Ended June 29, 2024 July 1, 2023 Continuing Discontinued Combined Continuing Discontinued Combined Operations 1 Operations 2 Operations 1 Operations 2 Net c
Slide 22: Q2 YTD Free Cash Flow and Adjusted Free Cash Flow - Combined
Q2 YTD Free Cash Flow and Adjusted Free Cash Flow - Combined Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) For the Six Months Ended June 29, 2024 July 1, 2023 Continuing Discontinued Combined Continuing Discontinued Combined Operations 1 Operations 2 Operations 1 Operations 2 Net
Slide 23: Q3 2023 Free Cash Flow and Adjusted Free Cash Flow
Q3 2023 Free Cash Flow and Adjusted Free Cash Flow Non-GAAP Reconciliation - Unaudited (in millions of U.S. dollars) For the Fiscal Year Ended December 30, 2023 1 Less: Less: Less: Full Year Third Quarter 2 First Quarter 1 Second Quarter 1 Fourth Quarter 1 Net cash provided by operating activities $
Slide 24: Interest Coverage Ratio and Net Leverage Ratio from Continuing Operations
Interest Coverage Ratio and Net Leverage Ratio from Continuing Operations Continuing Operations - Non-GAAP Reconciliation - Unaudited (-) (+) (in millions of U.S. dollars, except FY 2023 Q2 2023 Q2 2024 financial ratios) YTD YTD Q2 2024 LTM Adjusted EBITDA $ 380.7 $ (173.9) $ 206.8 $ 413.6 Interest