Post Holdings finishes year with solid performance

By Gill Hyslop contact

- Last updated on GMT

Post Consumer Brands is the third largest cereal company in the US with a broad cereal portfolio. Pic: ©iStock/S Hoss
Post Consumer Brands is the third largest cereal company in the US with a broad cereal portfolio. Pic: ©iStock/S Hoss
Despite a drop in Q4 operating profit, Post Holdings reported a 156.6% increase for the 2016 fiscal year.

The US consumer packaged goods holding company stated it experienced a $49m decline in Q4 net sales, of $1,260.8m from the year before. This was due to a decline in sales the Michael Foods Group segment, which included the $90m acquisition of Willamette Egg Farms in September 2015.

However, this was offset by growth in Active Nutrition, as well as reductions in costs undertaken in the Consumer Brands division, resulting in an increased operating profit.

“We finished the year with solid performance and are encouraged heading into 2017,”​ said Robert Vitale, president and CEO.

Increase in operating profit

Senior VP and CFO Jeff Zadoks reiterated Vitale’s sentiment, reporting Q4 net sales of $1.3bn and fiscal year revenue of $5bn. Operating profit was $545.7m, an increase of $333m, or 156.6%, compared to the prior year, he said.

“We expect adjusted EBITDA for 2017 to range between $910-$950m,”​ added Zadoks.

Through its four business divisions, Post Holdings covers a diverse range of sectors in the food and beverage market.

In 2012, it acquired MOM Brands Company, a cereal manufacturer, and combined it with Post Foods to form Post Consumer Brands, focussing on ready-to-eat (RTE) branded and private label cereals.

Michael Foods Group supplies egg, potato, cheese and pasta products to retailers, while Active Nutrition distributes protein beverages, bars and nutritional supplement.

Finally, the company’s Private Brands business manufactures private label nut butters, dried fruits, baking and snacking nuts, cereal and granola.

Sector profits and losses

According to the company’s website, Post Consumer Brands is the third-largest cereal company in the US with a broad cereal portfolio. However, four core products – Honey Bunches of Oats, Pebbles, Great Grains and MOM – make up 80% of sales.

While the division saw a decline in net sales over the past year, it did benefit from a growth felt by Malt-O-Meal, Great Grains and Pebbles, reported Zadocks.

Ultimately, the sector saw an increase in profit of $290.4m, compared to $205.5m in 2015, and Vitale described the company’s outlook on the cereal category as “cautiously optimistic.”

The Private Brands division comprises two businesses. Golden Boy manufactures conventional peanut and other nut butters, as well as processing baking nuts, dried fruits and trail mixes. Attune Foods produces non-GMO granolas, cereals and snacks.

Again, this division saw profits and losses. Granola and cereal sales were up, but this was undermined by a 2% decline in nut and dried fruit net sales, resulting in a drop in 2016 profit for the Private Brands division to $40.5m from $41.5m in 2015, said Zadoks.

Related topics: Cereal & Cereal Bars, Manufacturers

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