Q4 2024 Post Holdings Inc Earnings Call

In This Article:

Participants

Daniel O'Rourke; Investor Relations; Top Holdings Inc

Robert Vitale; President, Chief Executive Officer, Director; Post Holdings Inc

Jeff Zadoks; Executive Vice President and Chief Operating Officer; Top Holdings Inc

Matt Mainer; Senior Vice President, Chief Financial Officer & Treasurer; Top Holdings Inc

Andrew Lazar; Analyst; Barclays Bank

Ken Goldman; Analyst; JPMorgan Chase & Co

Matt Smith; Analyst; Stifel, Nicolaus & Company, Incorporated

Michael Lavery; Analyst; Piper Sandler & Co.

David Palmer; Analyst; Evercore ISI Institutional Equities

John Baumgartner; Analyst; Mizuho Securities USA

Rob Dickerson; Analyst; Jefferies

Marc Torrente; Analyst; Wells Fargo Securities

Presentation

Operator

Welcome to the Post Holdings fourth quarter 2024 earnings conference call and webcast. (Operator Instructions) I would now like to turn the call over to Daniel O'Rourke, Investor Relations for Post. Please go ahead.

Daniel O'Rourke

Good morning. Thank you for joining us today for Post's fourth quarter fiscal 2024 earnings call. I'm joined this morning by Rob Vitale, our President and CEO; and Jeff Zadoks, our COO; and Matt Mainer, our CFO and Treasurer. Rob, Jeff and Matt will make prepared remarks, and afterwards, we'll answer your questions.
The press release that supports these remarks is posted on both the investors and the SEC filings portions of our website and is also available on the SEC's website. As a reminder, this call is being recorded, and an audio replay will be available on our website at postholdings.com.
Before we continue, I would like to remind you that this call will contain forward-looking statements, which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements.
These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. This call will discuss certain non-GAAP measures. For a reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Rob.

Robert Vitale

Thank you, Daniel. Good morning, everyone. We finished fiscal '24 with a strong fourth quarter and are proud of the results for the full year. The last 2 years have seen a step change in adjusted EBITDA growing by 45%. Roughly half of this resulted from organic growth and half from the pet acquisitions contribution. In addition, we converted this growth into strong free cash flow, generating approximately $1 billion over the past 2 years.
In FY24, pricing caught up to input costs. We made continued improvement in our manufacturing supply chains and sustain the remarkable start for our pet business at over 2x our acquisition case. Meanwhile, our diversified portfolio, price points and value-added product offerings continue to provide volume offsets to a challenging consumer backdrop. We are now in an attractive position to return to algorithmic growth with a high degree of optionality provided by our capital structure.
Between the profit growth and cash flow generation I highlighted, we have reduced net leverage by more than a full turn over the last 2 years. In FY25, we expect a more normalized operating environment. Inflation has leveled, but has not receded, consumers and therefore, volumes remain under pressure. We believe the degree of category declines we experienced in FY24 will be with the recent cereal category performance is a good reference point.
From a capital allocation standpoint, we continue to evaluate M&A opportunities. And while I have lately described our pipeline, it's very deep. We remain extremely disciplined with respect to valuation. If the right opportunity fairly priced presents itself, we're well positioned to react. Meanwhile, competitive uses of capital are always available. Sometimes overlooked is the option value created by the refinancings we executed in FY24. They added significant runway to our maturity ladder and increased liquidity, providing for more opportunities for aggressive capital allocation.
Finally, I would like to thank all our employees for a very successful 2024. The strength of our operating model, our diverse product offering and our exceptional management team continue to give me a great deal of confidence in our 2025 plan.
And lastly, before turning it over to Jeff, I want to congratulate Matt on his promotion that we announced in yesterday's press release. Jeff?