Post(US:POST)2021-08-06 18:13Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2021 were $1.6 billion, a 19% increase compared to the prior year, including $78.5 million from recent acquisitions [16] - Adjusted EBITDA was $302.6 million, reflecting a decrease of 23% compared to the prior year but was roughly flat to 2019 [16][18] - The top end of the guidance range was lowered from $620 million to $610 million for the full year [7] Business Line Data and Key Metrics Changes - Post Consumer Brands experienced an 11% decline in net sales and volumes, attributed to a temporary consumer shift towards premium purchasing and the exit from low-margin businesses [17] - Weetabix net sales increased by 10%, driven by a stronger British Pound, while volumes decreased by 2% [19] - The Foodservice business saw net sales and volume growth of 80% and 56% respectively, although total volumes remain below pre-pandemic levels [20] - Refrigerated Retail net sales and volumes decreased by 12% and 10% respectively, impacted by labor shortages and reduced service levels [21] Market Data and Key Metrics Changes - Post branded products achieved a market share of 12.5%, primarily driven by the performance of the Pebbles brand [8] - The company noted extraordinary volatility in shop pricing and significant pricing actions taken to offset inflation [10] Company Strategy and Development Direction - The company is focusing on capital allocation through M&A, having acquired assets from TreeHouse and the Egg Beaters brand from Conagra [14] - A full distribution of the position in BellRing Brands is planned, allowing shareholders to choose greater exposure to BellRing [15] - The company is navigating a challenging environment with supply chain issues and is working on productivity opportunities and management strength [13] Management Comments on Operating Environment and Future Outlook - Management expects the current challenging environment to persist through Q4 and into fiscal 2022, with a focus on navigating labor and supply chain issues [6][12] - The outlook for the cereal business is clouded by unusual consumer behavior, but management remains optimistic about long-term defensibility [33] - Management anticipates a gradual recovery in the Foodservice segment, particularly in breakfast and lunch categories [35] Other Important Information - The company is facing challenges with labor availability and supply chain inefficiencies, which have impacted manufacturing capacity [9][12] - Adjusted EBITDA for the Refrigerated Retail segment decreased to $33 million due to lower volumes and increased costs [21] Q&A Session Summary Question: What advantages will the BellRing share distribution provide to Post shareholders? - Management explained that the distribution allows for direct investment into different segments, providing clarity and transparency for shareholders [26] Question: What is the outlook for sustainable profitable growth? - Management acknowledged the challenging environment but emphasized the strength of their brands and the potential for margin expansion [32] Question: How does the company view the cereal business outlook? - Management indicated that the cereal category is facing headwinds but remains optimistic about long-term growth, particularly in branded portfolios [33] Question: What are the company's plans regarding labor issues and capital allocation? - Management confirmed ongoing efforts to identify capital projects that reduce reliance on labor and improve productivity [47] Question: How is the company addressing inflation and pricing across its portfolio? - Management stated that they have taken pricing actions across the portfolio, but volatility in commodity prices remains a concern [82]