Post Q3 2024 Earnings Call Transcript

There are 11 speakers on the call.

Operator

Welcome to the Post Holdings Third Quarter 2020 Earnings Conference Call and Webcast. At this time, all participants have been placed on a listen only mode and the floor will be opened for questions following the presentation. I would now like to turn the call over to Daniel O'Rourke, Investor Relations for Post.

Speaker 1

Good morning. Thank you for joining us today for Post's Q3 fiscal 2024 earnings call. I'm joined this morning by Rob Vitale, our President and CEO Jeff Zadoks, our COO and Matt Maynor, 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 is being recorded and an audio replay will be available on our website at postholdings.com.

Speaker 1

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 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.

Speaker 2

Thank you, Daniel. In Q3, we delivered another quite solid quarter. That enabled us to increase our full year guidance. While never fully satisfied, we are quite pleased with the business performance, including recent acquisitions. I'm certain you noticed we have been aggressive in purchasing our own shares.

Speaker 2

This solid performance is against a challenging and transitioning consumer environment. Inflation is cooling, but so are labor markets. Meanwhile, rapid cumulative change in pricing over the last couple of years has impacted consumer behavior across channels. We expect to work through this reference price phenomenon in both retail and foodservice channels over the next year. Key highlights of the quarter include strong consumption of both our branded and private label cereal products, ongoing outperformance in our pet business versus our underwriting case, significant mix improvement in value added eggs.

Speaker 2

We expect these highlights to be sustained in FY 'twenty five. On the other side of the ledger, our refrigerator retail segment underperformed as trade investment cannibalized base volume without sufficient incremental lift. We are addressing appropriate level of trade spending. Looking ahead to 'twenty five, we expect a more stable consumer environment, which along with lapping 'twenty four will support more favorable volume trends. The capital markets and the M and A market support further strategic action.

Speaker 2

Our leverage is at historically low levels and we will tend to be reactive with capital allocation. Our business model and our diversification enable us to adapt to changing conditions and we will remain clear eyed as we consider the best allocation of your capital. Now Jeff will provide more context on the quarter.

Speaker 3

Thanks, Rob, and good morning, everyone. Starting with PCB, both our grocery and pet food products contributed to another strong quarter of profit performance. Within grocery, cereal volumes were challenged, although we performed better than the category as we slightly increased branded share in both dollars and pounds. Carryover pricing combined with excellent operating and supply chain performance continued to be the main this quarter, we continue to expect category volumes will normalize to the historical CAGR of down approximately 1% to 2%. For the pet food business, our category share remained fairly flat in total and across our brands.

Speaker 3

Recall, however, in the last half of the prior fiscal year, our pet food sales revenues and volumes benefited from a one time replenishment of customer as we improved customer fill rates from the low 70s to the low 90s. Strong manufacturing performance continued to drive our results. The closure of our Lancaster, Ohio cereal plant and our pet integration continue to remain on track with a planned exit from the Smucker's TSA in the first half of fiscal year twenty twenty five. Moving to Foodservice, we had a good quarter with very strong product mix. In addition, we benefited from the final run out of Avian Influenza pricing related to the November 2023 outbreak as well as elevated customer promotions in the quarter.

Speaker 3

Overall, egg volumes were flat despite slowing restaurant foot traffic. However, our mix continued to improve with 15% volume growth in our highest margin pre cooked egg products. Lastly, we continue to encounter some delays in achieving our full RTD shape manufacturing run rate. The ramp up has been slower than we anticipated, but we made significant progress during the quarter. Recognizing that it is hard to track the impact of Avian Influenza quarter to quarter, we will share that our expectation for foodservice adjusted EBITDA in the 4th quarter is approximately $100,000,000 Our Refrigerator Retail business had a significant pullback in profitability.

Speaker 3

While we were encouraged to see dinner and breakfast size volumes up 4% and 6% respectively, this growth came with significantly higher than expected trade costs. We are recalibrating these investments and anticipate sequential segment profit improvement in the 4th quarter. From a commodity standpoint, sale prices were a significant headwind versus prior year further pressuring Q3 adjusted EBITDA for the segment. On the positive side, we continue to see strong manufacturing and cost management performance across the network. Turning to Weetabix, UK cereal category volumes moderated to a decline of 1% and we saw flat volumes within our branded and private label biscuits.

Speaker 3

Continued improvement with supply chain and service levels combined with incremental pricing on some private label products drove sequential margin improvement from Q2. In addition, the business successfully completed Phase 1 of its ERP conversion and is on track for the 2nd larger Phase 2 in the fall. With that, I'll turn the call over to Matt.

Speaker 4

Thanks, Jeff, and good morning. 3rd quarter consolidated net sales were 1,900,000,000 dollars and adjusted EBITDA was $350,000,000 Net sales increased 5% driven by recent acquisitions. Excluding acquisitions, sales declined 5%, driven by lower overall volumes in our retail businesses and the impact of food service pricing of our food service pricing pass through model. Supply chain performance and fill rates remain strong, while commodity inflation on balance is neutral. Finally, SG and A increased as we continued targeted marketing investments in our retail businesses.

Speaker 4

Excluding the benefit of pet food acquisitions from both the current and prior year quarters, Post Consumer Brands net sales decreased 3% and volumes decreased 6%. Average net pricing, excluding pet food, increased 3%. Volumes declined primarily in non retail and branded cereal. Segment adjusted EBITDA increased 28% versus prior year as we benefited from the strong contribution of pet food and improved grocery performance. Weetabix net sales increased 1% year over year.

Speaker 4

Sales benefited from the D side acquisition and a nominal foreign currency tailwind of 80 basis points from a stronger British pound. On a currency and acquisition neutral basis, net sales decreased 5 percent and volumes decreased 6% driven by a decline in non biscuit products. Segment adjusted EBITDA increased 24% versus prior year, led by the easing of commodity pressures and improved manufacturing leverage as we built inventory in the quarter ahead of our ERP go live. Foodservice net sales decreased 5%, while volumes increased 2%. Revenue reflects the pass through of lower grain costs and then a net reduction in pricing due to the wind down of avian influenza price centers from last year.

Speaker 4

Volumes reflect increases in both egg products and potato products. Adjusted EBITDA decreased 17% as we lap the benefit of egg market imbalances elevated avian influenza price adders in the prior year. These headwinds were partially offset by favorable mix shift to higher margin pre cooked eggs. Refrigerated retail net sales decreased 7% while volumes were flat. Average net prices declined as a result of increased trade in the portfolio, primarily for dinner sides.

Speaker 4

Favorable side dish volumes were offset by distribution loss in egg products. Segment adjusted EBITDA decreased 37%, reflecting lower net pricing and a significantly higher sell cost compared to prior year. Turning to cash flow. In the Q3, we generated $272,000,000 from operations, driven by strong profit performance and its sequential improvements to working capital. Capital expenditures in the quarter were approximately $110,000,000 driven by continued investments in pet food capacity and the expansion of our Norwalk Iowa pre cooked egg facility.

Speaker 4

For the last 12 months, cash flow from operations was 966,000,000 dollars and capital expenditures were $391,000,000 netting to $575,000,000 of free cash flow. Given the strong cash flow, we maintained our net leverage at 4.3x in the quarter, while repurchasing 2,000,000 shares at an average price of approximately $104 per share. In the month of July, we repurchased an additional 300 begins next week. Finally, given the strong performance in the begins next week. Finally, given the strong performance in the quarter, we again raised our guidance to a new range of $13.70 to $13.90 With that, I will turn the call back over to the operator for Q and A.

Operator

Thank you. And the floor is now open for questions. Thank you. And our first question will come from Andrew Lazar with Barclays. Please go ahead.

Speaker 1

Good morning, everybody. Good morning. Good

Speaker 5

morning. On Foodservice, I'm curious, you spoke to the ongoing run rate in EBITDA in that segment, I think, last quarter of around $95,000,000 but sort of acknowledge that it had kind of been running above that, but didn't sort of formally change it at that point. I'm curious where you see the ongoing run rate for Foodservice EBITDA now. And partly I asked that because as we think ahead to fiscal 2025, trying to get a sense of whether that could be a year over year headwind, right, lapping what was a strong year in Foodservice next year or if you think the ongoing run rate is somewhat higher or more consistent with what we've seen this year?

Speaker 4

Sure. Andrew, we think the run rate is around $105,000,000 and again the difference between that and the $100,000,000 is pressure we're going to see in Q4 related to avian influenza costs we're going to incur ahead of pricing kicking in.

Speaker 5

Yes, got it. And then in measured channel data for Pet, which certainly does not tell the whole story, it looked like consumption decelerated pretty meaningfully on a sequential basis in

Speaker 2

the quarter.

Speaker 5

And I guess I'm trying to get a sense of whether something sort of changed in terms of maybe not seeing as much trade down to mainstream in Pet as you had been seeing. And if the planned reinvestment has sort of started to kick in yet or if that's still to come?

Speaker 4

Yes. Andrew, really 2 drivers there. 1, there's actually seasonality in the pet food category. So you do see a pullback between Q2 and Q3 every year. The other piece for us though specifically was we had new distribution gains in Q2.

Speaker 4

So there was a pipeline fill in particular for 9 lives. So those are the 2 components of lastly, just

Speaker 5

last quarter, I think Rob, you mentioned having seen a meaningful increase in sort of the M and A pipeline. You mentioned private equity owned assets have sort of aged and such. And trying to get a sense, obviously, leverage is now lower than it's been in a while and you've been taking advantage of that around share repo. But any change to sort of that M and A landscape one way or the other that you've seen since last quarter?

Speaker 2

No. If anything, it's accelerated in terms of the amount of opportunities we've been considering. Obviously, we take our time in considering those and the pipeline may take a long time to mature to a deal, but the market feels very active right now.

Speaker 5

Thanks so much.

Speaker 1

Thank you.

Operator

Our next question will come from David Palmer with Evercore ISI. Please go ahead.

Speaker 6

Thanks and good morning. I'm just only going to continue on that line of questioning about how you're feeling heading into fiscal 2025. I'm wondering how you're feeling about pet synergies, productivity, visibility, anything that kind of gives you dry powder for what seems to be a starting point where you're going to want to stabilize volume. Post consumer brands volume is down 6 percent. I would imagine that you'll want to dial up promotion spending to address that.

Speaker 6

So I'm just thinking about things that could be incremental. You mentioned the TSA sunsetting with Smucker. Any thoughts about how the gives and takes for 2025 would be helpful? Thanks.

Speaker 4

Yes. So on the cereal side, obviously, we've got the Lancaster closing that's on track to be a contribution to the positive. Obviously, that's rightsizing some capacity or overcapacity we have now. And then, I would say beyond that, in post consumer brands, just your comment about down 6%, there were a couple of factors in the quarter around cereal volumes. We were really in line with the category.

Speaker 4

Beyond that, we saw a discontinuation on our side with some SKU rationalization in Canada. And then also, we had we've seen just a general pullback in KCCO or government volumes in terms of bid business across the board, but those are really the 2 outliers relative to category performance and our own. But I would say Lancaster's the positive offset some of what you talked about in potential volume pressures.

Speaker 6

Any you want to give us an estimate of what that could mean to EBITDA and the timing of that in fiscal 'twenty five?

Speaker 4

We talked about Lancaster as being a 25,000,000 dollars contribution for the full year and we're on track to be there. So again, to your point, there's volume pressures that they persist. There could be promotional, although we're pretty rational in terms of our promotional outlook.

Speaker 6

Great. Thank you.

Operator

Our next question will come from Ken Goldman with JPMorgan. Please go ahead.

Speaker 7

Hi. Two quick ones to start, if I may. 1, I didn't quite hear you on the TSA timing. Is that shifting the exit into 2020 5 now? I think it was previously scheduled for the Q4 of this year.

Speaker 7

Please correct me if that's not right. And then I also was hoping for an update on the timing of the Michael plant. I wasn't sure if we had heard that.

Speaker 3

So the TSA was marker. There's no change in the timing. There's a part of the co pack arrangement that lingers into the 1st part of fiscal 'twenty five, but we're on target to exit the back office TSA at the end of our fiscal year. And then the question about foodservice, could you say that again?

Speaker 7

I just didn't understand if there was any change in the guidance on the timing of the Michael plant opening?

Speaker 3

No, we didn't. Our prepared remarks didn't comment about that, but the timing of Norwalk, if that's what you're talking about, the expansion of Norwalk?

Speaker 1

I'm talking

Speaker 8

about the

Speaker 2

protein shakes.

Speaker 7

Thank you. I'm not saying it clearly, but yes, thank you.

Speaker 3

Yes. No, the plant is open. It's the it's just our ramp up has been slower than we expected. So I guess the way to put it is, yes, the profitability from that or expected profitability from that has been delayed beyond what we had previously communicated.

Speaker 7

Okay. Thank you. And then one more if I can, just on SG and A. Broadly over the last 12 months, your SG and A has grown much more rapidly than your sales. And I know you've talked about increasing marketing, but it brings now your SG and A as a percentage of sales over the last 12 months back up to kind of the range it was for many years around that kind of mid-eighteen percent until it dipped the last couple of years.

Speaker 7

I'm just curious, is it fair to kind of think about this percentage as a good number to model ahead, understanding it will never stay exactly there? Are there reasons to kind of think that SG and A dollars will continue to rise at a meaningfully faster pace than revenue?

Speaker 4

Yes. I think a couple of things. You mentioned A and C, we definitely have some targeted additional investments there that we may recalibrate. Also given the over performance in the portfolio, there's some definitely some elevated step or bonus within some of our segments as well that would reset next year.

Speaker 6

Okay. Thank you.

Operator

Our next question will come from Matt Smith with Stifel. Please go ahead.

Speaker 9

Hi, good morning. I wanted to go back to the foodservice business. You have capacity coming online at Norwalk. Could you remind us when that capacity comes online and your visibility into the pipeline of filling that capacity and

Speaker 1

what it could mean for further distribution opportunities?

Speaker 4

Yes. We still have another year of construction or so on Norwalk. So that would really be fiscal 'twenty six when that would come online and then there'd be a ramp period that's typically could be as long as 12 months in terms of filling that plan.

Speaker 9

Thank you for that. And if we could move to the Refrigerator retail business, you invested in some promotional activity to bring consumers back into or to induce trial and get consumers to trade back up into your brands. Can you talk about the why the lift wasn't as strong as you had anticipated and you go from here to improve your volume trajectory?

Speaker 4

Sure. So again, as we mentioned, we're recalibrating that. Honestly, we just we overshot. There's a bit of a look back in that as well. It's kind of a 6 month tail.

Speaker 4

So some of this is Q2 related as well. But, we get the full tally of the spends there. We just didn't see the lifts in Q2 and Q3 to support the amount we spent in terms of promo. Again, we're recalibrating that. But I think what happened essentially is, this quarter, as an example, was 4% increase in sides.

Speaker 4

I think to support that level of spend, we would have expected something north of 10%. And instead, we subsidized some base sales that were on promotion, which deteriorated profitability.

Speaker 9

And you mentioned a longer look back period for those promotional events. Are you able to recalibrate that fairly quickly? Or does that take a couple

Speaker 1

of quarters to pull planned promotions out of the market?

Speaker 4

Yes, we are. I mean, I think with the knowledge of that, again, I think as a reminder, just as cereal, I think is a good analogy as cereal is a very mature category with a lot of history behind promotions. As a reminder, we haven't been able to promote in refrigerated retail a much different category than cereal. We just don't have that history. So definitely underestimated the level of promotional activity that happens.

Speaker 4

But we have recalibrated the accrual and our expectations in the quarter. So we feel like we have it ring fenced and adjusting that going forward. So we feel like we've got a good handle on it.

Speaker 9

Thank you, Matt. I'll pass it on.

Operator

Our next question will come from Michael Lavery with Piper Sandler. Please go ahead.

Speaker 1

Thank you. Good morning. Good morning. You mentioned how branded cereal is performing private label, but we keep also hearing so much about how the consumer is stretched. How do you maybe just reconcile the cereal dynamics?

Speaker 1

And I

Speaker 9

think you also said you expect

Speaker 1

a little bit more stable the consumer to be in a maybe stable at least or a little bit better place in fiscal 'twenty five. Is there some better read through from cereal or how do we think about where the consumer is there?

Speaker 2

Let me start with the initial comment. Private label outperformed branded in

Speaker 1

the quarter. So Sorry, okay. I misheard that.

Speaker 2

And I think the comment around the consumer behavior going forward is more about the acceptance of the pricing environment that has moved so rapidly and it's taken some time to grow accustomed to. So it feels like we intentionally use the word that the consumers in a transitional mode in that we are now going from a super hot labor market to a cooling labor market, cooling inflation. So I think that it should be generally constructive for volumes to get past the reference price adjustment And it should be constructive for more value products as we see a bit of a cooling in the labor market. So we tend to think that the consumer environment will be more constructive next year on balance, but there are certainly some puts and takes.

Speaker 1

And would you characterize that as likely across all your categories? Or do you have somewhere you would call out maybe more likely to see extended pressure?

Speaker 2

Certainly, in cereal, given its maturity, we continue to believe within the Bob Evans brand, there are opportunities to do considerably better. Again, as Matt mentioned, we let our trade skills get a bit rusty, having been through a period of which we didn't really try to create demand. Value added eggs continues to outperform the overall, volume trends broadly across food, both away from home and in home. So I think the comments would be most applicable to cereal with varying degrees of application to the other categories.

Speaker 1

Trajectory and how kind of thinking about just timing and where that's directed in terms of kind of which brands and how that's playing out?

Speaker 2

And when you say spending trajectory, you mean of incremental investment in things like advertising?

Speaker 1

Exactly, yes.

Speaker 2

It's mostly around our more premium brands that are larger. So, I don't want to get into details around particular cadence and spend, but I mean you can look at the portfolio and into it where we would choose to invest.

Speaker 1

Okay. Thanks so much.

Speaker 6

Thank you.

Operator

Our next question comes from John Baumgartner with Mizuho Securities. Please go ahead.

Speaker 6

Good morning. Thanks for the questions. Sure. Maybe first off, coming back to Refrigerated Retail and the trade promo, just to clarify on that. If I remember correctly, last quarter, I think there were some customer funded promotions that I think seem promising in terms of the consumer response.

Speaker 6

And you mentioned the dust is still settling here on Q3, but were there any material changes in terms of type of outlet, type of program or maybe even geography relative to the customer funds that approached in Q2?

Speaker 4

No. The comment on customer was really around Q1 and that was during the holiday season. So that would be maybe the different dynamic is that's the peak season where we're seeing really good volumes and then a little bit of seasonality in Q2 and then there is no seasonality benefit in Q3. But I would say that's really the difference, which is Q1 is

Speaker 5

a very, very strong quarter.

Speaker 6

Okay. And then okay. Thanks for that. And then Rob, I wanted to come back to Foodservice and the volume growth there. Are there certain segments within Away From Home where your distribution growth is skewing in particular?

Speaker 6

And then for your existing business, the exposure to breakfast, are you seeing any sort of shift within that daypart where precooked eggs are particularly resilient or if there's more trading down to less expensive items? You mentioned eggs are outperforming, but I'm not sure if that's just due to a smaller base effect relative to other offerings that are out there. Maybe it's too granular, but just curious if you have any observations on sell through more broadly at retail? Thank you.

Speaker 2

Yes. The precooked business, which is the highest value add and highest margin businesses, continuing to perform very well. In fact, grew 50% volumetrically over the quarter. We are seeing changes in some of the foot traffic patterns across restaurants and QSRs, which I am sure you have seen reported by some of the larger value

Speaker 1

proposition

Speaker 2

of that particular product is such that it's a value proposition of that particular product is such that it's a great way to take labor out of back of house operations and we think it will continue a long term trend irrespective of the short term vagaries of some of the foot traffic issues.

Speaker 10

Thanks, Rob. Thanks, Matt.

Operator

And our next question comes from Rob Dickerson with Jefferies. Please go ahead.

Speaker 1

Great. Thanks so much. Rob, just around the commodity complex as you kind of think through next year, are there any potential kind of offsetting benefits, maybe in some of the grain, the more grain based categories in which you play that could help support profitability kind of despite seeing this volume pressure that weren't to correct immediately on top of, let's say, some of the rightsizing of capacity?

Speaker 3

As we look at it right now, there's fairly balanced benefits, as you mentioned, from grains, but then there's some offsetting inflationary items such as packaging and sugar as a couple of examples. So I don't think we see it as a huge benefit. At the same time, we're not currently expecting it to be a huge detriment either. So fairly balanced as we head into the next fiscal year.

Speaker 1

All right. Cool. And then just quickly on Weetabix, you called out in the release and comments just the margin uptick off of some, I guess, pricing, it sounds like maybe part of that portfolio. The margin uptick was impressive, right, on a sequential but then also on a year over year basis. And I'm just curious, again, as we think through, let's say, Q4, even next year, is that step up like somewhat sustained?

Speaker 1

Like is that kind of more of a new margin kind of base for that business? Or could there be some other flow through impacts that would kind of bring that back down?

Speaker 3

Thanks. Yes. A couple of things. As Matt said in his prepared remarks, there's a benefit this quarter because of inventory build. So we have an ERP conversion that is going to hit at the beginning of next fiscal year.

Speaker 3

And in preparation for that, we're building inventory to manage through any bumps in the road that might occur. And because of that, we had an absorption benefit in the Q3 that you wouldn't expect on an ongoing basis. With that said, we certainly expect that Q2 and Q1 of this year were more of the trough and that our expectation is that we'll begin migrating towards the more historical margin profile of that business. But to be fair, Q3 was a step up. That's more of a step than we would expect on the trajectory that we eventually get to.

Speaker 3

So maybe a clear way to say it, expect a little bit of a step down, but still the trend line will be better than where it was at the beginning of this fiscal year.

Speaker 2

Okay, very helpful. Thank you.

Operator

Our next question comes from Mark Parente with Wells Fargo Securities. Please go ahead.

Speaker 10

Hey, good morning. Thank you for the questions. First on Pet, you talked through some of the drivers of the sequential slowdown in sales from Q2. Just doing some simple math implies some further expansion on margins even as you're stepping up advertising around the premium brands. So maybe just a little more color on the margin progress there.

Speaker 4

Yes. So I mean, I think a lot of our margin progress has been more around just the flow through of the manufacturing efficiencies that we've had and the stabilization there is the bigger driver. We've taken some of those dollars and reinvested behind the brands and ramped A and C, but I'd say manufacturing performance and costs are really the keys for the margin improvement.

Speaker 10

Okay. And then CapEx stepped up this year with the Ag and Pet Investments as well as the Shake Manufacturing ramp. How much of these projects carry into next year? You spoke to 8 facility timing. Just any context there and how we should think about CapEx levels for 2025, I guess, thinking through free cash flow conversion ahead?

Speaker 10

Thanks.

Speaker 4

Yes. These are definitely multiyear projects, certainly Norwalk and Bloomfield. And I think the way we've talked about it is we expect 25 to be very similar to 24 in terms of the CapEx range we have in spend.

Operator

And Mr. Trente, did this answer your questions?

Speaker 9

Yes. Thank you.

Operator

Thank you. And we will take our final question from Carla Casella with JPMorgan. Please go ahead.

Speaker 8

Great. Thank you. A couple of follow ups, just you talked about the environment both in Foodservice and Retail, but is your expectation that we should see trade spending pick up as we go into the back half of this year? And is it consistent across categories? Are you seeing more need for trade spend in 1 versus another?

Speaker 8

And then I have one question on M and A.

Speaker 2

I think we will likely see a little bit of an

Speaker 3

uptick in trade spend, but it

Speaker 2

will be targeted and not knee jerk reactive. I think the best example being the way we spent in our Bob Evans brand. We need to make sure we get the lift that is intended with the trade spend. And I'm sorry, what was your other question?

Speaker 8

Well, I wonder is it more targeted in 1 category versus another or one category in one of those?

Speaker 2

No. Where we think there are pricing opportunities to benefit from trade spend across the portfolio, we'll execute there. As we go in, the primary focus is on potatoes, side dishes.

Operator

Okay. And then

Speaker 8

the other question was on

Speaker 1

the M and A environment. And if you could

Speaker 8

just talk to the deal flow, any opportunities are getting more interesting, our levels coming into more fair. I think in the past you just talked about the rational type levels of for the sellers.

Speaker 2

I'm sorry, Carly. You're a bit echoing. So I'm not sure I got all the question, but I'll do my best. I think we've seen a period of time in which there have been lower than average PE exits. So we're seeing more opportunities from PE owners of consumer assets.

Speaker 2

We always are of the opinion that corporate owners should do portfolio pruning. So there are some opportunities in that area. So I would say same thing I said in my prior comments that the quantum of opportunities has increased significantly year over year and even sequentially. That doesn't mean anything will happen because we want to be very disciplined with respect to how we allocate capital. And as long as we're trading beneath the average of the multiples of which we can acquire on a post synergy basis, we will just stay the course and allocate capital into our shares.

Speaker 2

So good environment, well, a plentiful environment from an opportunity perspective, whether that converts to anything or not, too early to

Speaker 8

say. Okay, great. Thank you.

Speaker 9

Thank you.

Operator

And we have now reached the conclusion of the question and answer session. This will conclude today's Post Holdings Third Quarter 2024 Earnings Conference Call and Webcast. Please disconnect your line at this time and have a wonderful day.

Earnings Conference Call
Post Q3 2024
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