1Q 2024 Earnings Presentation
Results through March 31, 2024 | May 2, 2024 |
Important Information
Forward-Looking Statements and Other Information
This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical fact are forward-looking statements, including but not limited to statements regarding our guidance as to our future financial and operational results and the timing and magnitude of restructuring charges. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will" or "would" or the negative of these words or other similar terms or expressions. Forward-looking statements are subject to various risks and uncertainties. Accordingly, there are important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this presentation. The results, events and circumstances reflected in the forward-looking statements made herein may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on any forward-looking statements. For additional information on these and other factors that could cause our actual results to differ materially from those set forth in this presentation, please see our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, to be filed with the Securities and Exchange Commission.
All information contained herein speaks only as of the date of this presentation, except where otherwise stated. Except as required by law, we undertake no duty to update or revise the information contained herein, publicly or otherwise, including any forward-looking statements.
Non-GAAP Financial Measures
In addition to U.S. GAAP financial measures, this presentation includes references to Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Net Debt and the Net Leverage Ratio, which are non-GAAP financial measures. All references to Adjusted EBITDA refer to Adjusted EBITDA from continuing operations. All references to Adjusted EPS refer to Adjusted EPS from continuing operations.
We define Adjusted EBITDA as our net (loss) income from continuing operations calculated in accordance with GAAP plus the sum of income tax expense (benefit), net interest expense, depreciation and amortization and further adjusted to exclude certain items, including but not limited to restructuring, asset impairment and other related charges, gains on the sale of businesses and noncurrent assets, non-cash pension income (expense), operational process engineering-related consultancy costs, business acquisition and integration costs and purchase accounting adjustments, unrealized gains or losses on derivatives, foreign exchange losses on cash, executive transition charges and gains or losses on certain legal settlements. We define Adjusted EPS as diluted (loss) earnings per share ("EPS") from continuing operations calculated in accordance with GAAP adjusted for the after tax effect of certain items, including but not limited to restructuring, asset impairment and other related charges, gains on the sale of businesses and noncurrent assets, non-cash pension income (expense), operational process engineering-related consultancy costs, business acquisition and integration costs and purchase accounting adjustments, unrealized gains or losses on derivatives, foreign exchange losses on cash, executive transition charges and gains or losses on certain legal settlements. We define Free Cash Flow as net cash provided by operating activities less capital expenditures. W e define Net Debt as the sum of current and long-term debt, less cash and cash equivalents. W e define the Net Leverage Ratio as Net Debt divided by Adjusted EBITDA for the last 12 months, which we refer to as LTM Adjusted EBITDA.
These non-GAAP measures are in addition to, and not a substitute for or superior to, measures prepared in accordance with GAAP.
A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is set forth in the Appendix to this presentation.
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Today's Presenters
Michael King | Jon Baksht | |
President & Chief Executive Officer | Chief Financial Officer | |
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Agenda
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Key Themes &
Strategic Priorities
Update
2
1Q 2024 Financial | 3 |
Performance | |
and 2024 Outlook |
Conclusion and Q&A
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1Q 2024 Key Messages
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2
3
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Delivered solid financial results, including Adjusted EBITDA(1) of
$168M for 1Q'24
Broader market environment remains mixed with slowing trajectory of inflation improvement
Focused on managing costs; taking strategic actions to build 2H'24
momentum and position for sustainable growth
Reiterate financial guidance for FY'24; encouraged by recent cost
actions and operational improvements
(1) Adjusted EBITDA is a non-GAAP measure. See reconciliation to GAAP measures in the Appendix.
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Current Company and Market Dynamics
Consumer Demand / Volume
- Consumers gradually adapting to structurally higher food prices and trading down where possible
- Recent inflation resurgence muting near- term demand catalysts
- Impact from severe weather largely absorbed in 1Q
Pricing / Mix
- Customers less able to continue pushing price; increasing focus on cost structures
- Volatility in oil prices impacting near-term resin prices
- Overall lower raw material cost environment compared to last two years
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1Q 2024 Financial
Performance and
2024 Outlook
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Delivered Financial Results In Line with Expectations
1Q'23 4Q'23 1Q'24 YoY% QoQ%
($ in millions, except per share amounts)
Net Revenues | $1,431 | $1,274 | $1,252 | (13%) | (2%) |
Adj. EPS(1) | $0.13 | $0.33 | $0.14 | 8% | (58%) |
Adj. EBITDA(1) | $189 | $207 | $168 | (11%) | (19%) |
Free Cash | $25 | ($26) | ($74) | NM | NM |
Flow(1) | |||||
YoY Commentary
- Revenues impacted by prior year exit of Canton paper mill, lower pricing due to the pass through of lower material costs and lower sales volume
- Volumes mainly impacted by strategic value over volume decisions and the market softening amid inflationary pressures
- Q1 Adj. EBITDA Margin(2) of 13.4%, ~20bps increase
- Free Cash Flow(1) impacted by seasonal inventory build ahead of summer season
- Adjusted EPS, Adjusted EBITDA and Free Cash Flow are non-GAAP measures. See the reconciliations to GAAP measures in the Appendix.
- Adjusted EBITDA Margin is a non-GAAP financial measure, calculated as Adjusted EBITDA divided by Net Revenues.
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Foodservice Segment Highlights
1Q | 4Q | 1Q | YoY % | QoQ % | |
($ in millions) | 2023 | 2023 | 2024 | ||
Net Revenues | $614 | $626 | $597 | (3%) | (5%) |
Adjusted | $106 | $112 | $90 | (15%) | (20%) |
EBITDA | |||||
YoY Commentary
Net Revenues down 3%
- Volume down 1%
- Price/mix down 2%, mainly due to lower pricing, largely due to the pass through of lower material costs, and unfavorable product mix
Adjusted EBITDA down 15%
- Decrease in Adjusted EBITDA was mainly due to unfavorable product mix, higher manufacturing costs and lower pricing, net of material costs passed through
QoQ Commentary
Net Revenues down 5%
- Volume down 5%
- Price/mix flat
Adjusted EBITDA down 20%
- Decrease in Adjusted EBITDA was due to lower sales volume and higher manufacturing costs
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Food and Beverage Merchandising Segment Highlights
1Q | 4Q | 1Q | YoY % | QoQ % | |
($ in millions) | 2023 | 2023 | 2024 | ||
Net Revenues | $850 | $653 | $660 | (22%) | 1% |
Adjusted | $101 | $113 | $100 | (1%) | (12%) |
EBITDA | |||||
YoY Commentary
Net Revenues down 22%
- Volume down 14% due to closure of Canton mill; down 4% excluding Canton mill
- Price/mix down 5% largely due to the pass through of lower material costs
Adjusted EBITDA down 1%
- Decrease in Adjusted EBITDA was primarily due to lower sales volume, unfavorable product mix and lower pricing, net of material costs passed through, partially offset by lower manufacturing costs
QoQ Commentary
Net Revenues up 1%
- Volume up 1%
- Price/mix flat
Adjusted EBITDA down 12%
- Decrease in Adjusted EBITDA reflects higher manufacturing and material costs, partially offset by lower transportation costs
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Pactiv Evergreen Inc. published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 20:08:16 UTC.