Q3 2024 Results
and Outlook
November 12, 2024
© 2024 TreeHouse Foods, Inc. 1
Forward Looking Statement
From time to time, we and our representatives may provide information, whether orally or in writing, which are deemed to be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.
The words "believe," "estimate," "project," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could," and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, or intended. We do not intend to update these forward-looking statements following the date of this presentation.
In accordance with the provisions of the Litigation Reform Act, we are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this presentation and other public statements we make. Such factors include, but are not limited to: risks related to quality issues, disruptions, or inefficiencies in our supply chain and/or operations; loss or consolidation of key suppliers; raw material and commodity costs due to inflation; labor strikes or work stoppages; multiemployer pension plans; labor shortages and increased competition for labor; success of our growth, reinvestment, and restructuring programs; our level of indebtedness and related obligations; disruptions in the financial markets; interest rates; changes in foreign currency exchange rates; customer concentration and consolidation; competition; our ability to execute on our business strategy; our ability to continue to make acquisitions and execute on divestitures or effectively manage the growth from acquisitions; impairment of goodwill or long lived assets; changes and developments affecting our industry, including customer preferences and the prevalence of weight loss drugs; the outcome of litigation and regulatory proceedings to which we and/or our customers may be a party; product recalls; changes in laws and regulations applicable to us; shareholder activism; disruptions in or failures of our information technology systems; geopolitical events; changes in weather conditions, climate changes, and natural disasters; and other risks that are set forth in the Risk Factors section, the Legal Proceedings section, the Management's Discussion and Analysis of Financial Condition and Results of Operations section, and other sections of our Annual Report on Form 10-K for the year ended December 31, 2023, and from time to time in our filings with the Securities and Exchange Commission ("SEC").
© 2024 TreeHouse Foods, Inc. 2
Key Takeaways
1 | Delivered midpoint of Q3 Adjusted EBITDA of $103 million despite |
lower-than-expected Adjusted Net Sales of $854 million | |
2 | Operating environment is challenging in the near-term with |
decelerating consumer trends, though fundamental private brands | |
opportunity remains intact | |
3 | Successfully executing supply chain and margin management |
initiatives to drive profitability improvement despite a slower | |
consumption environment | |
4 | Revising FY24 Adjusted Net Sales growth outlook of -2% to -1%, |
Adjusted EBITDA outlook of $335 to $345 million and Free Cash |
Flow of at least $120 million
© 2024 TreeHouse Foods, Inc. 3
Griddle Business Update
- Initiated a voluntary recall of frozen griddle products manufactured at Brantford, Ontario, Canada facility in October 2024 out of commitment to food safety and quality
- Temporarily closed facility to conduct and confirm effectiveness of sanitation and hygienic restoration procedures
- Expect the Brantford, Ontario, Canada facility to restart manufacturing in Q1 2025
© 2024 TreeHouse Foods, Inc. 4
Q3 2024 Results
Metric | Guidance | Result |
Adjusted | $865 million to $895 million $854 million |
Net Sales | |
Adjusted | $98 million to $108 million $103 million |
EBITDA | |
Key Highlights
- Sequential improvement of organic net sales trend
- Drove strong adjusted gross profit margin of 18.9% on softer volume due to successful execution of supply chain savings initiatives
- Delivered adjusted EBITDA margin of 12%
Adjusted Net Sales, adjusted EBITDA , organic net sales, adjusted gross profit, and adjusted EBITDA margin are non-GAAP financial measures. See "Comparison of Non-GAAP Information to GAAP Information" in the Appendix for the definition of the non-GAAP measures, information concerning certain items affecting comparability, and reconciliation of the non-GAAP measures to the most directly comparable GAAP measures.
© 2024 TreeHouse Foods, Inc. 5
Consumption Trends Have Softened in TreeHouse Foods Categories
5%
4%
Private Brand Unit Growth in THS Categories
(Shown in percentage points)
Recent Trends
3%
5%
4%
4%
2%
1%
0%
-1%
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 |
3%3%
2% | 1% | |||
1% | ||||
0% | ||||
-1% | ||||
-1% | ||||
July | August | September | October | |
2024 | 2024 | 2024 | 2024 |
Charts not drawn to scale. Circana syndicated point of sale 13, 4, and 5 week Mulo+ data for TreeHouse Foods categories (October ended 10/27/24).
© 2024 TreeHouse Foods, Inc. 6
Private Brands Continue to Gain Unit Share Supported by Price Gaps and Lower Levels of Promotional Activity Relative to Recent History
Private Brands Gained Unit Share in the Third Quarter in THS Categories
2019 | 2023 | 2024 |
24%
22%
20%
18%
Q1 Q2 Q3 Q4
Private Brands % Price Gap Elevated in THS Categories vs Historical Levels
2019 | 2023 | 2024 |
30%
28%
26%
24%
22%
20%
18%
Dec
Nov
Oct
Sept
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
Promotional Activity Has Not Returned to Historical Levels in THS Categories
2019 | 2023 | 2024 | |
40% | |||
38% | |||
36% | |||
34% | |||
32% | |||
30% | |||
28% | |||
26% | |||
24% | |||
Q1 | Q2 | Q3 | Q4 |
Charts not drawn to scale. Left chart: Circana syndicated point of sale 13-week Mulo+ data for TreeHouse Foods categories. Middle chart: Circana syndicated point of sale 4- and 5- week Mulo+ data for TreeHouse Foods categories. Right chart: Circana syndicated point of sale 13- week data for national brand sales in TreeHouse categories. Current and historical data was restated for Mulo+ to include additional retailers.
© 2024 TreeHouse Foods, Inc. 7
Private Brands Growth is a Long-Term Fact in North America
2006-2024 YTD Private Brands Dollar Share of Consumer-Packaged Goods
23% | ||||||||||||||||||
22% | ||||||||||||||||||
21% | ||||||||||||||||||
20% | ||||||||||||||||||
19% | ||||||||||||||||||
18% | ||||||||||||||||||
17% | ||||||||||||||||||
16% | ||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
YTD |
Source: IRI Market Reports Recession-Proof Your Business (Part 1 & Part 4); Private Label & National Brands: Paving the Path to Growth Together; Private Label: The Journey to Growth
Along Roads Less Traveled; CPG Growth Leaders (2019-2021). YTD data through 9/30/2024. MULO and Convenience Outlet. Internal Analysis. Chart not drawn to scale.
© 2024 TreeHouse Foods, Inc. 8
Grocery Retailers Are Investing in Private Brands
Private Brands is an Important Element within Grocery Retailers' Strategies
Launched largest food | Launched new |
& beverage private | |
private brand | |
brand in 20 years | |
'Overjoyed' | |
+800 | ~$56B |
stores to be added by | brand launched |
end of 2028 | in 1995 |
Sources: Walmart: Walmart Press Release dated April 30, 2024. Albertsons: Albertsons press release dated September 4, 2024; Kirkland: Wahba, P. (2024, June 4).
How Costco built its $56 billion Kirkland store brand that's bigger than Nike and Coca-Cola. Fortune. Aldi: Aldi press release dated March 7, 2024.
© 2024 TreeHouse Foods, Inc. 9
Executing Initiatives to Drive Profitability
TMOS
Procurement
Logistics & Distribution Network
Supply Chain | Margin |
Initiatives | Management |
Capacity Allocation
Pricing Architecture
© 2024 TreeHouse Foods, Inc. 10
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TreeHouse Foods Inc. published this content on November 12, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 12, 2024 at 12:01:06.416.
