Premium Brands Holdings Corp T.PBH.DB.G

Primary Symbol: T.PBH Alternate Symbol(s): PRBZF | T.PBH.DB.H | T.PBH.DB.I

Consumer Defensive Packaged Foods

Premium Brands Holdings Corporation is a Canada-based company, which owns a range of specialty food manufacturing and differentiated food distribution businesses with operations across Canada and the United States. The Company operates through two segments: Specialty Foods and Premium Food Distribution. The Specialty Foods segment consists of its specialty food manufacturing businesses. The Premium Food Distribution segment consists of its differentiated distribution and wholesale businesses as well as certain seafood processing businesses. It provides servicing to approximately 22,000 customers. The logo and its family of brands and businesses includes Harvest Meats, Hempler's, Piller's, Grimm's Fine Foods, Freybe, Isernio's, Expresco and SJ Fine Foods. The Company operates in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia and in Arizona, Minnesota, Mississippi, Nevada, Ohio and Washington.

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Premium Brands Holdings Corp

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Post by retiredcfon May 06, 2022 10:20am

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Post# 34661923

TD

Currently have a $160.00 target. GLTA

Premium Brands Holding Corp.

(PBH-T) C$104.59

Slight Beat, Guidance Unchanged Event

PBH reported Q1/22 adj. EBITDA of $95.8mm vs. $82.5mm last year (+16%), slightly above consensus of $95mm (range of $93mm to $97mm).
Management has maintained its 2022 sales and EBITDA guidance of $5.6 billion to $5.85 billion and $510 million to $530 million, respectively.
CC Details: 1:30 p.m. ET today. Dial-in # (833) 300-9218. ID: 3093083

Impact: POSITIVE

Despite broad-based operating challenges, we believe PBH delivered solid results overall. Here are what we believe to be some of the initial key Q1/22 takeaways:

Revenues (beat): Price inflation accounted for ~50% of y/y growth in both segments. Organic volume growth rates (OVGR) were 4.3% in Specialty Foods (SF) and -0.2% in Premium Food Distribution (PFD), mostly driven by:
- SF: Growth initiatives in artisan sandwich and meat snack in the U.S. were
  
  the main drivers. Absent supply chain disruptions and labour shortages, OVGR would have been closer to 8% (i.e. ~$22.8mm in lost sales opportunities).
- PFD: The remainder ~50% of growth came mostly from M&A. OVGR would have been ~3% after normalizing for i) lobster initiatives ahead of the stronger spring/summer selling season, ii) supply chain disruptions, and iii) less featuring of premium products.
Adjusted EBITDA (slight beat to consensus): SF EBITDA beat our estimate by ~13%, driven by a strong top line and better-than-expected margin performance. PFD EBITDA was ~18% below our estimate, mostly tied to lag in price increases and seasonally lower margin contribution from the recently acquired Westmorland.
No new acquisitions announced but the M&A pipeline remains full.

It's been challenging to predict stock movements around quarterly results. However, what we do believe is that these results reflect strong execution (EBITDA has exceeded consensus estimates for the last 10 quarters) that should translate into a much stronger second half (i.e. we are forecasting H2/22 EBITDA growth of 28% versus 11% in H1/22), particularly once the benefits of pricing, new product introductions, and production efficiencies kick in. The shares are now trading at ~12.0x forward EBITDA vs. their two-year average of ~14.5x which we argue is good value given the strong growth outlook.