In This Article:
Release Date: March 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Premium Brands Holdings Corp (PRBZF) anticipates significant revenue growth in 2025, with a substantial portion driven by US growth programs.
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The company has a strong pipeline of US growth initiatives, with planned launches expected to contribute significantly in the latter half of the year.
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Premium Brands Holdings Corp (PRBZF) has made strategic acquisitions that are expected to be accretive and enhance competitiveness without deteriorating the balance sheet.
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The company has redundant manufacturing capacity across borders, allowing flexibility to mitigate potential tariff impacts.
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Premium Brands Holdings Corp (PRBZF) expects record levels of free cash flow in 2025, driven by past capital investments and improved operational efficiencies.
Negative Points
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The company faces ongoing challenges with wage inflation and incremental plant overhead costs, which could impact margins.
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There are concerns about consumer confidence in Canada, which could affect organic revenue growth.
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Premium Brands Holdings Corp (PRBZF) has paused dividend increases due to macroeconomic uncertainties, which may concern investors.
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The company has experienced delays in facility projects, which could impact the timing of capacity expansions.
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There is uncertainty regarding the impact of potential tariffs on cross-border operations, particularly in the lobster and cooked protein segments.
Q & A Highlights
Q: Can you explain the components of your 2025 revenue guidance, particularly the organic growth and the impact of US growth programs? A: Will Kalutycz, CFO, stated that 60-65% of the organic growth is expected from the US, with the remainder from Canada and some exports to Asia. The timing of growth initiatives is heavily weighted towards the latter half of the year, with major launches planned from late Q2 to early Q3.
Q: Your 2025 EBITDA guidance seems to assume a lower contribution margin. Are you being conservative, or have assumptions changed? A: Kalutycz explained that while they are conservative, the blended contribution margin should be around 27-28%. Factors like wage inflation, new plant overheads, and increased selling and marketing expenses are impacting margins, but these costs should normalize by 2026.
Q: Can you provide more details on the sandwich organic volume growth and the timing of new product launches? A: Kalutycz mentioned that growth is tied to planned limited-time offers (LTOs) and new listings with major retail customers, with launches expected between late Q2 and early Q3. CEO George Paleologou added that despite challenges, they had a record year in sandwiches in 2024.