Primo Brands (PRMB) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 7.6% year-over-year to $485 million, driven by 3.1% volume and 4.5% price increases, with organic growth at 6.6%.

• Adjusted EBITDA rose 14.9% to $113 million, with margin expanding to 23.3%.

• Revenue and Adjusted EBITDA exceeded guidance, prompting a raised annual outlook.

• Customer experience initiatives improved Google ratings by 8% and Net Promoter Score by 12%.

• The company is preparing for a merger with BlueTriton Brands, expected to close in the first half of 2025.

Financial highlights

• Gross margin increased 110 basis points to 65.6%, with gross profit for Q2 at $318 million.

• Adjusted free cash flow for Q2 was $73 million, up $34 million year-over-year.

• Net leverage ratio improved to 1.6x adjusted EBITDA; cash and cash equivalents over $600 million.

• Water dispenser business declined 21% in Q2 but is up 2% year-to-date on volume.

• SG&A expenses increased to $264 million in Q2, mainly due to higher labor and insurance costs.

Outlook and guidance

• Q3 2024 revenue guidance: $485–$495 million; adjusted EBITDA: $115–$125 million.

• Full-year 2024 revenue guidance raised to $1.87–$1.89 billion; adjusted EBITDA to $420–$440 million.

• Adjusted free cash flow guidance raised to $180–$190 million.

• CapEx guidance maintained at 7% of revenue plus $22.5 million strategic CapEx.

• Business optimization program targeting $20 million run-rate improvement by year-end 2024.