Post Holdings (POST) Q4 2018 earnings summary

Executive summary

• FY18 net sales rose 20% to $6,257.2M; operating profit reached $587.5M and net earnings available to common shareholders were $457.3M, including a substantial Tax Act benefit. Adjusted EBITDA was $1,230.7M.

• Nearly $500M of free cash flow was generated; the Bob Evans acquisition and 8th Avenue transaction reshaped the portfolio, while Active Nutrition growth remained a strategic opportunity.

Financial highlights

• Net sales were $6,257.2M, up $1,031.4M, or 20% YoY; gross profit was $1,866.8M and operating profit was $587.5M, up 13%.

• Net earnings available to common shareholders were $457.3M vs. $34.8M; diluted EPS was $6.16 vs. $0.50. Adjusted net earnings were $309.6M and adjusted diluted EPS was $4.08.

• Adjusted EBITDA increased to $1,230.7M from $989.1M; operating cash flow rose to $719.3M from $386.7M.

• Interest expense was $387.3M, up 23%; reported results also included a $31.1M debt-extinguishment loss and $124.9M impairment charge.

Outlook and guidance

• FY19 outlook balanced optimism with operating challenges; each business was described as having growth opportunities and cash-generation capacity.

• An initial public offering of Active Nutrition was announced as an intention, subject to execution and market conditions; completion and value realization were uncertain.

• Weetabix pricing was course-corrected after a difficult, largely self-inflicted pricing year; Brexit remained a near-term source of uncertainty and volatility.