PREMIUM BRANDS HOLDINGS CORPORATION REPORTS RECORD FOURTH QUARTER SALES AND ADJUSTED EBITDA, ANNOUNCES ACQUISITION AND DECLARES FIRST QUARTER DIVIDEND
VANCOUVER, BC, March 21, 2025 /CNW/ - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the fourth quarter of 2024.
FOURTH QUARTER HIGHLIGHTS
Record fourth quarter revenue of $1.64 billion representing a 5.4%, or $84.4 million, increase as compared to the fourth quarter of 2023
Solid progress on Specialty Foods' core U.S. growth initiatives in protein and baked goods, which for the quarter generated organic volume growth rates of 21.9% and 22.4%, respectively. Specialty Foods' sandwich sales were relatively flat as volume growth in the club store channel and higher selling prices were offset by consumer demand related challenges in the foodservice channel
Record fourth quarter adjusted EBITDA1 of $148.7 million representing an 8.4%, or $11.5 million, increase as compared to the fourth quarter of 2023
Fourth quarter adjusted EPS1 of $1.05 per share representing a 23.5%, or $0.20 per share, increase as compared to the fourth quarter of 2023
2025 sales and adjusted EBITDA1 guidance ranges of $7.2 billion to $7.4 billion, and $680 million to $700 million, respectively
Declared a dividend of $0.85 per common share for the first quarter of 2025
Subsequent to the quarter, completed the acquisition of Denmark Sausage, LLC
2024 HIGHLIGHTS
Record revenue of $6.47 billion representing a 3.3%, or $209.5 million, increase as compared to 2023
Record adjusted EBITDA1 of $593.7 million representing a 6.2%, or $34.6 million, increase as compared to 2023
Adjusted EBITDA margin1 of 9.2%, up from 8.9% in 2023
Adjusted EPS1 of $3.98 per share representing a 1.2%, or $0.05 per share, decrease as compared to 2023
1
The Company reports its financial results in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Standards). Adjusted EBITDA and adjusted EPS are non-IFRS financial measures. Reconciliations and explanations for all non-IFRS measures are included in the Non-IFRS Financial Measures section of this press release.
QUESTIONS AND ANSWERS SESSION
The Company will hold a Q&A session on its fourth quarter 2024 results today at 10:30 a.m. Vancouver time (1:30 p.m. Toronto time). Management's pre-recorded remarks and an investor presentation that will be referenced on the conference call are available here or by navigating through the Company's website at www.premiumbrandsholdings.com.
Access to the Q&A session may be obtained by calling the operator at (289) 514-5100 or (800) 717-1738 (Conference ID: 60180) up to ten minutes prior to the scheduled start time. For those who are unable to participate, a recording of the conference call will be available through to 11:59 p.m. Toronto time on April 21, 2025 at (289) 819-1325 or (888) 660-6264 (passcode: 60180#). Alternatively, a recording of the conference call will be available on the Company's website at www.premiumbrandsholdings.com.
SUMMARY FINANCIAL INFORMATION(In millions of dollars except per share amounts and ratios)
13 weeks
ended
Dec 28,
2024
13 weeks
ended
Dec 30,
2023
52 weeks
ended
Dec 28,
2024
52 weeks
ended
Dec 30,
2023
Revenue
1,639.1
1,554.7
6,470.5
6,261.0
Adjusted EBITDA1
148.7
137.2
593.7
559.1
Earnings
37.3
15.0
121.5
94.2
EPS
0.84
0.34
2.73
2.12
Adjusted earnings1
46.3
37.9
176.5
179.1
Adjusted EPS1
1.05
0.85
3.98
4.03
Trailing Four Quarters Ended
Dec 28,
2024
Dec 30,
2023
Free cash flow1
250.8
253.0
Free cash flow per share
5.65
5.70
Declared dividends
151.8
137.5
Declared dividend per share
3.40
3.08
Payout ratio1
60.5 %
54.3 %
1
Reconciliations for all non-IFRS measures are included in the Non-IFRS Financial Measures section of this press release.
"2024 finished on a strong note driven by our Protein and Bakery Groups' US sales initiatives, which generated approximately $50 million in sales volume growth in the quarter. We also saw an improved consumer environment in the Canadian market with our Premium Food Distribution segment's Canadian businesses generating 2.4% in organic volume growth for the quarter," said Mr. George Paleologou, President and CEO.
"Our Sandwich Group continued to make progress on a variety of growth initiatives including solid growth in the club store channel. This was, however, more than offset by the impact of challenges being faced by one of its major foodservice customers. On a positive note, this impact was less than we experienced in the third quarter and we remain confident that this headwind is temporary, and that sales to this customer will recover and eventually return to their historic growth rates," added Mr. Paleologou.
"With most of our major production capacity projects now complete, and our businesses starting to generate solid momentum in executing on their robust sales pipelines, we expect 2025 to be a major inflection point for our Company and are very well positioned to meet or exceed our 2027 sales and adjusted EBITDA targets of $10 billion and $1 billion, respectively.
"While they did not make any meaningful contribution to our fourth quarter results, we are pleased to welcome three new businesses to our family: NSP Quality Meats, Casa Di Bertacchi and Italia Salami. NSP and Casa will play significant roles in supporting our U.S. focused growth initiatives in cooked protein while Italia will support our very successful Italian charcuterie initiatives in Canada. Looking forward, our acquisition pipeline remains full and in fact we recently completed the acquisition of Arizona's premium fresh sausage business, Denmark Sausage.
"In regard to the tariff related issues dominating today's headlines, we are pleased to report that our strategic focus on generally manufacturing in the jurisdictions that we sell has positioned us relatively well to manage any tariff headwinds. Some of our businesses do ship products across borders, however, we are confident that we will be able to largely mitigate the impact of tariffs on these sales. In terms of our Specialty Foods segment, its diversified network of production facilities across Canada and the U.S. will enable it to shift production of many of its products crossing a border to the jurisdiction in which they are sold. In terms of our Premium Foods Distribution segment, processed lobster is the primary product crossing a border, however, this is produced from a scarce resource and as a result customers have very limited supply options. Furthermore, our Premium Food Distribution segment has major lobster processing operations in both Canada and the U.S.," said Mr. Paleologou.
FIRST QUARTER 2025 DIVIDEND
The Company also announced that its Board of Directors approved a cash dividend of $0.85 per common share for the first quarter of 2025, which will be payable on April 15, 2025 to shareholders of record at the close of business on March 31, 2025.
Unless indicated otherwise in writing at or before the time the dividend is paid, each dividend paid by the Company in 2025 or a subsequent year is an eligible dividend for the purposes of the Enhanced Dividend Tax Credit System.
ABOUT PREMIUM BRANDS
Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations across Canada and the United States.
www.premiumbrandsholdings.com
RESULTS OF OPERATIONS
The Company reports on two reportable segments, Specialty Foods (SF) and Premium Food Distribution (PFD), as well as non-segmented investment income and corporate costs (Corporate). The Specialty Foods segment consists of the Company's specialty food manufacturing businesses while the Premium Food Distribution segment consists of the Company's differentiated distribution and wholesale businesses as well as certain seafood processing businesses. Investment income includes interest and management fees generated from the Company's businesses that are accounted for using the equity method.
Revenue
(in millions of dollars except percentages)
13 weeks ended
Dec 28, 2024
%
(1)
13 weeks ended
Dec 30, 2023
%
(1)
52 weeks ended
Dec 28, 2024
%
(1)
52 weeks ended
Dec 30, 2023
%
(1)
Revenue by segment:
Specialty Foods
1,075.9
65.6 %
1,005.2
64.7 %
4,282.4
66.2 %
4,097.0
65.4 %
Premium Food Distribution
563.2
34.4 %
549.5
35.3 %
2,188.1
33.8 %
2,164.0
34.6 %
Consolidated
1,639.1
100.0 %
1,554.7
100.0 %
6,470.5
100.0 %
6,261.0
100.0 %
(1) Expressed as a percentage of consolidated revenue.
Specialty Foods' (SF) revenue for the quarter increased by $70.7 million or 7.0% primarily due to: (i) organic volume growth of $34.7 million representing an organic volume growth rate (OVGR) of 3.5%; (ii) a $22.2 million increase in the translated value of sales generated by SF's U.S. based businesses due to a weaker Canadian dollar; (iii) selling price increases of $11.2 million, which were put into place to address rising chicken, beef and egg costs; and (iv) business acquisitions, which generated $3.6 million in growth. These factors were partially offset by the shutdown of SF's Creekside Custom Foods business as its capacity is transitioned to support the growth of its Global Gourmet kettle business, this resulted in $1.0 million of lost sales, primarily in the fresh sandwich category.
SF's OVGR of 3.5% was driven by: (i) a variety of protein, sandwich and baked goods growth initiatives in the U.S. which generated organic volume growth of $55.4 million; and (ii) stabilization of its Canadian sales, which grew at an OVGR of approximately 1%. These increases were partially offset by: (i) a decline in sales to a major foodservice customer resulting from reduced consumer spending in the customer's stores, albeit at a lesser rate than SF experienced in the third quarter of 2024; and (ii) generally weaker consumer spending in the convenience store channel.
SF's revenue for 2024 increased by $185.4 million or 4.5% primarily due to: (i) organic volume growth of $146.1 million representing an OVGR of 3.6%; (ii) a $37.6 million increase in the translated value of sales generated by SF's U.S. based businesses due to a weaker Canadian dollar; (iii) selling price inflation of $4.5 million; and (iv) business acquisitions, which generated $3.6 million in growth. These factors were partially offset by the shutdown of SF's Creekside Custom Foods business that resulted in $6.4 million of lost sales.
Premium Food Distribution's (PFD) revenue for the quarter increased by $13.7 million or 2.5% due to: (i) selling price inflation of $34.0 million relating primarily to lobster and to a lesser extent beef and salmon products; (ii) a $3.0 million increase in the translated value of sales generated by PFD's U.S. based businesses due to a weaker Canadian dollar; and (iii) business acquisitions, which generated $0.7 million in growth. These factors were partially offset by a sales volume contraction of $24.0 million.
The contraction in PFD's sales volume was primarily due to lower lobster product sales resulting from: (i) the timing of customer orders which resulted in approximately $11.5 million of traditional fourth quarter sales being recognized in the first quarter of 2025; and (ii) a poor Maine lobster fishery which resulted in high lobster selling prices that in turn lowered demand in the U.S. and China markets due to generally weaker consumer environments. These factors were partially offset by stabilization of PFD's Canadian distribution sales, which grew at an OVGR of approximately 2.4%.
PFD's revenue for 2024 increased by $24.1 million or 1.1% primarily due to: (i) selling price inflation of $79.4 million relating primarily to lobster, beef and to a lesser extent salmon products; (ii) business acquisitions, which generated $18.4 million in growth; and (iii) a $5.0 million increase in the translated value of sales generated by PFD's U.S. based businesses due to a weaker Canadian dollar. These factors were partially offset by a sales volume contraction of $78.7 million.
Gross Profit
(in millions of dollars except percentages)
13 weeks ended
Dec 28, 2024
%
(1)
13 weeks ended
Dec 30, 2023
%
(1)
52 weeks ended
Dec 28, 2024
%
(1)
52 weeks ended
Dec 30, 2023
%
(1)
Gross profit by segment:
Specialty Foods
238.5
22.2 %
210.5
20.9 %
950.7
22.2 %
882.0
21.5 %
Premium Food Distribution
82.0
14.6 %
84.7
15.4 %
341.9
15.6 %
326.4
15.1 %
Consolidated
320.5
19.6 %
295.2
19.0 %
1,292.6
20.0 %
1,208.4
19.3 %
(1) Expressed as a percentage of the corresponding segment's revenue.
SF's gross profit as a percentage of its revenue (gross margin) for the quarter increased by 130 basis points primarily due to: (i) production efficiency gains; and (ii) sales leveraging benefits associated with its organic volume growth. These factors were partially offset by: (i) additional plant overhead costs associated with new production capacity; and (ii) higher promotion costs that have been recorded as a reduction in selling prices.
SF's gross margin for 2024 increased by 70 basis points primarily due to the impact of improved production efficiencies and sales leveraging benefits associated with SF's sales growth partially offset by: (i) additional plant overhead costs associated with new production capacity being brought online; (ii) rising chicken and beef raw material costs in the first three quarters of the year; and (iii) higher promotion costs that have been recorded as a reduction in selling prices.
PFD's gross margin for the quarter decreased by 80 basis points primarily due to: (i) selling prices for lobster and certain beef products not rising as fast as the cost of the associated commodity inputs. PFD's selling price increases for these items in dollar terms did, however, exceed the increase in the cost of the commodity inputs; (ii) sales mix changes as reduced sales of higher margin lobster products were partially offset by growth in lower margin distributive beef and seafood sales; and (iii) sales deleveraging challenges resulting from a contraction in processed lobster sales. These factors were partially offset by production efficiencies in PFD's Canadian lobster processing facility.
PFD's gross margin for 2024 increased by 50 basis points primarily due to: (i) higher margins on processed lobster in the third quarter of 2024, resulting from favorable inventory positions; and (ii) a variety of efficiency improvement and cost reduction initiatives. These factors were partially offset by the margin challenges experienced in the fourth quarter.
Selling, General and Administrative Expenses (SG&A)
(in millions of dollars except percentages)
13 weeks ended
Dec 28, 2024
%
(1)
13 weeks ended
Dec 30, 2023
%
(1)
52 weeks ended
Dec 28, 2024
%
(1)
52 weeks ended
Dec 30, 2023
%
(1)
SG&A by segment:
Specialty Foods
130.8
12.2 %
118.0
11.7 %
516.4
12.1 %
482.5
11.8 %
Premium Food Distribution
50.4
8.9 %
51.4
9.4 %
204.0
9.3 %
199.3
9.2 %
Corporate
4.4
3.9
31.7
28.4
Consolidated
185.6
11.3 %
173.3
11.1 %
752.1
11.6 %
710.2
11.3 %
(1) Expressed as a percentage of the corresponding segment's revenue.
SF's SG&A as a percentage of sales (SG&A ratio) for the quarter increased by 50 basis points primarily due to higher discretionary compensation accruals and promotional activity, partially offset by sales leveraging benefits associated with its sales growth.
SF's SG&A as a percentage of sales (SG&A ratio) for 2024 increased by 30 basis points primarily due to: (i) higher outside storage costs, which were mostly the result of providing a major customer with additional services, the cost of which is recovered through increased selling prices on applicable products; (ii) wage inflation; and (iii) higher discretionary compensation accruals. These factors were partially offset by sales leveraging benefits associated with SF's ...
