TSX:PRMW - Post Discussion
Post by
retiredcf on May 06, 2021 11:08am
TD
This is a flash report so there's certainly potential for them to raise their current US$19.00 target. GLTA
Primo Water Corporation
(PRMW-N, PRMW-T) US$16.41 | $20.12
Q1/21 First Look: Another Beat, Boosts 2021 EBITDA Guidance Event
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Primo reported Q1/21 adj. EBITDA of $76.2mm vs. $70.4mm LY, up ~8% y/y, above our $71.3mm estimate and 3% above consensus of $74mm (range of $70mm to $76mm). Guidance range was $70mm-$75mm.
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10:00 a.m. ET conference call (1-888-231-8191 conference ID: 2174707).
Impact: POSITIVE
These are solid results, which we argue continue to point to more consistent execution and more predictable earnings going forward. The recent divestitures of non-core assets and the acquisition of the legacy Primo business have been the biggest drivers.
Here are what we believe to be the initial highlights:
1. Top line a touch above consensus: Revenue was up ~1% y/y (~-1% excl. impact of forex) to $478mm, ~4% higher than our $461mm estimate. Consensus was at $477mm. Guidance range was $455mm to $485mm.
Management pointed to strong performance in its Water Direct/
Exchange residential customer base and the legacy Primo acquisition.
We will be looking to get more colour on the performance of the commercial business.
European revenues, which is more weighted to commercial, were down 9% (~$11mm) y/y. This was a similar decline to Q4/20 but these results show that the pressure is slowly easing when compared to Q2/20 where revenues plummeted 30%.
2. EBITDA ~3% above consensus and very strong: We largely attribute the beat to stronger revenue performance, better operating leverage, and the benefit from the legacy Primo acquisition. Adjusted EBITDA margin increased 108bps y/y to 15.9%.
Outlook
Overall, we would characterize Q2/21 guidance as in line, but management did boost its 2021 full year EBITDA guidance by $10mm. Specifically:
Q2/22 Guidance
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