Welcome to the Post Holdings 4th Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Daniel O'Rourke, Investor Relations for POST.

Good morning. Thank you for joining us today for Fiscal 2025 Earnings Call. I'm joined this morning by Rob Vitale, our President and CEO. Jeff Zadix, our COO, and Matt Maynard, our CFO. The press release that supports these remarks is posted on both the investors and the SEC filings portions of our website and is also available on the SEC. As a reminder, this call is being recorded and an audio replay will be available on our website at postholdings.com. Before we continue, I would like to remind you that this call will contain certain forward-looking statements, which are subject to risks and uncertainties that should be carefully considered by investors, as actual results could differ materially. 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 reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. I will turn the call over to Rob.

Thanks, Daniel, and good morning, everyone. We had a good FY25, and we ended with a strong quarter. It was an interesting year as we navigated regulatory changes, tariffs, avian flu, and uncertain consumer sentiment. Despite this challenging environment, our portfolio of businesses displayed resilience and delivered strong results. Benefits of our diversification will allow us to navigate an environment of continued uncertainty, to continued volume growth in our food service business and our highest value products. In retail, we remain disciplined in the face of a very challenging volume landscape, keeping our focus on cost reduction and profitable brand investments. Jeff and Matt will provide detail on our FY26 outlook, but we will focus on what we can control, and from that perspective, I like our positioning. I expect food service to provide volume growth and our retail businesses to generate considerable cash flow to fund both organic and inorganic opportunities. In that vein, a highlight of FY25 was our strong operating cash flow, which allowed us to maintain flat net leverage while making key capital investments, completing two tactical acquisitions, and buying back over 11% of the company. With a step down in capital spending and the benefits from the new tax law, we expect a meaningful increase in FY26 free cash flow. Coupled with our long-dated debt maturity ladder, we can be opportunistic with our capital allocation decisions. We continue to review M&A opportunities, and we benchmark them against buying back our own shares. I would like to thank all of our employees for another successful year. The strength and diversification of our operating model combines with dedicated employees give me a great deal of confidence in continuing our track record of value creation. Before I turn the call over to Jeff, I want to make a personal. Bill has been a mentor, business partner, and friend for nearly 30 years, and I expect that to continue regardless of titles. Jeff.

Good job, and good morning, everyone. We delivered strong, consolidated results in Q4. our cold chain businesses did a fantastic job in navigating HPAI. In addition, across the entire portfolio, cost reductions and manufacturing execution combined to more than offset the impact of lower retail volumes. At post-consumer brands, our branded and private-labeled cereal businesses experienced consumption declines resulting from challenging category dynamics. In Pat, our volume consumption was down versus a flat category driven primarily by Nutrish. As a reminder, we are adjusting the value proposition and messaging for this brand with changes to be in market by the end of fiscal Q2. A bright spot in PET was Kibbles and Bits, which had a strong consumption volume versus the prior year. In spite of the volume challenges, we were successful in growing our consumer brand's EBITDA margin, excluding 8th Avenue, by 100 basis points, driven by improved mix in cereal and strong cost management across the segment. Our upcoming cereal plant closures will further help to alleviate the impact of cereal category declines. Setting aside HPAI, food service had strong underlying performance driven by growth in both egg and potato volumes. While a portion of Q4 egg volume growth was related to timing from improved egg availability and customer inventory replenishment, we continue to see strong demand, in particular for our higher value-added products. Volumes for these higher-margin egg products grew nearly 9% in the quarter and approximately 6% for the full year. Our HPAI impacted egg supply came back online as expected in Q4, allowing us to continue gradually winding down pricing adders. As we enter fiscal 26, we are well-positioned to continue the normalized growth trend in this business. In refrigerated retail, dinnersides grew volumes in the quarter driven by targeted promotions and new private label offerings that began shipping toward the end of the quarter. Private label offerings are expected to contribute low single-digit volume growth in FY26. Segment profitability had some continued tailwinds from HPAI pricing adders again this quarter. At Weedabix, our flagship yellow box product consumption performed in line with the improving cereal category, which was down less than 1%. The noticeable improvement in the U.K. cereal category over recent quarters is an encouraging trend. Meanwhile, we continue to execute against our identified cost-out opportunities as we consolidate our private label production, resulting in a plant closure in mid-fiscal year. Turning to FY26, we have planned for a more normalized environment in our coal chain businesses as we begin the year with egg supply back in balance, allowing us to focus on driving volume growth in both food service and refrigerated retail. For the balance of our portfolio, we're projecting some improvement in the silver category as we lap certain FY25 pressures. However, we do not expect a full return to historical trends. To support volumes across the entire company, we will make targeted investments, including innovation, where we see profitable opportunities. However, as Rob mentioned, we remain focused on protecting margins and our strong cash flow. With that, I'll turn the call over to Matt.

Thanks, Jeff, and good morning, everyone. Fourth quarter consolidated net sales were $2.2 billion and adjusted EBITDA was $425 million. Sales increased 12% driven by our acquisition of 8th Avenue. Excluding the acquisition, net sales declines, driven by lower pet food, by avian influenza-driven pricing, and egg volume growth. Contribution from 8th Avenue decreased 13%, driven by 8% due to category, and 13% driven by lost private label business we mentioned last quarter. And we are continuing to experience consumption declines as we reset our nutrition brain. Adjusted EBITDA increased 2%, which includes a $20 million contribution from 8th Avenue. Excluding 8th Avenue, adjusted EBITDA decreased 8% versus prior year as the impact of low NSG&A. Excluding the impact of our PPI acquisitions, volumes increased 9% pricing drove the revenue increase. Adjusted EBITDA increased 50% driven by avian influenza driven pricing and the previously mentioned volume growth in our value rated retail net sales were flat and volumes excluding the impact of PPI fell 4%. The volume decline was driven by sausage and eggs, which experienced elasticities due to pricing to off-adjusted EBITDA increased 44%, benefiting from avian influenza pricing adders 4% versus the prior year. Foreign currency represented the tailwinds, or core yellow box product volumes declined by 6%, which was up 41% versus the prior year. Segment-adjusted EBITDA increased 1% versus prior year due to currency tailwinds, partially offset by lower volumes and increased inflation-driven costs. Turning to cash flow in the quarter, we generated $301 million from operations. Our free cash flow for the quarter was approximately $150 million as we invested in key projects in both PCB and food service businesses. Free cash flow for the full year was nearly $500 million driven by strong operating cash flow net of elevated capex. We repurchased our fiscal 25 total repurchases to active in-share repurchase following the end of quarter, buying back approximately 1 million shares. Net leverage is flat to how we began the year. Before we get to Q&A, I have a few comments on our Fiscal 26 guidance. As stated in our earnings release last night, including two months of PASTA contribution, we expect our FY26 adjusted EBITDA to be in the range of $1.50 billion to $1.54 billion. This range reflects approximately a 1% to 4% growth rate to a normalized FY25. Relative to FY25 Q4, we expect Q1 adjusted EBITDA to decrease meaningfully, driven by HPAI declines in U.S. and U.K. cereal, partially offset by seasonality benefits in refrigerated retail. For the full year, we expect since the $350 million to $390 million is down notably from FY25 as we completed key investments within PCB and food service. FY26 will continue to see elevated spending in food service as we invest behind growth for both pre-cooked and cage-free. Thank you for joining us today.

The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank you. Our first question comes from Andrew Lazar with Barclays. Please go ahead. Your line is open.

Good morning. Thanks so much. Maybe, Rob, to start off, we've certainly seen industry volume remain sort of challenged. We can see some of that reflected in your PCB segment and in Cereal and Pet. You've been aggressively buying back your own shares in lieu of, I guess, more interesting portfolio opportunities. The last time valuations in the group were really under this much pressure was sort of the late 90s. And the group got out of it through larger scale M&A. Perhaps this time is different. I think some investors maybe see the current weaknesses maybe more structural rather than cyclical. And I guess I'm curious how this dynamic sort of informs your capital allocation decisions. And is M&A still the right approach given how cheap assets are? Or is buying back stock at these levels more sensible if one believes the terminal growth rate of potential acquisition candidates is simply lower going forward i guess what i'm asking is whether this represents another buying opportunity in the space like the late 90s or or is it somewhat different well if the ultimate question is it structural or cyclical i think you have to tell us how long the cycle will last um i think it's interest uh different in the following manner i think the big difference is the cost of capital has changed dramatically.

We've been in a long-term decline. And now we're in what could be an inflection point where we see more increased pressure than decrease. And I think that starts to develop the strategy. And I think in lieu of a position of we're just going to use M&A to get bigger, it needs to be a little more thoughtful and perhaps a little bit more focused around focus so that we can look at opportunities to be better rather than just bigger. And that sounds a little bit cliche, but I think it's opportunities to be more focused in some area that I think we should take them, and where there are opportunities to be more efficient in other areas, we should take them. from our perspective necessarily differentiate between M&A and buybacks. What we try to do is compare them from a potential return perspective and a risk perspective and then compare them. So, you know, we really don't look at it and say, you know, buyback shares, we're going to shrink or look at our multiple difference. We look at that and say, you know, what is the best risk return adjusted way to use our capital?

Great. Thank you for that. I know on the last earnings call, I think you talked about all the asset optimization efforts, right, that you're undertaking in ready to eat cereal and that those could kind of get plant utilization maybe back up to around the mid-80s. But that, you know, if the cereal category continued to be weak or below its historic rate of decline, And maybe further actions on the cost side sort of would need to be considered. And I guess I'm curious, what sort of actions could we be talking about? And maybe are you considering any additional ones, given, I think, your comments in the prepared remarks that were, you know, don't see the category in fiscal 26 necessarily getting back to what's been its longer or historical rate of decline? Thanks so much.

Certainly there are additional opportunities we can take on cost reduction. But I think the magnitudes start to get smaller as the bigger things like plant closure have occurred. So we are looking at things like line optimization rather than plant optimization. So they continue to be good opportunities, but we've obviously taken the larger ones first.

Thank you.

And we'll move next to Tom Palmer with J.P. Morgan. Please go ahead.

Good morning, and thanks for the question. You have normalized growth outlooks you've given for your segments, and I guess maybe thinking through those segments for fiscal 26, which ones do you kind of see as being more consistent with that normalized outlook after we adjust for M&A and avian flu, and maybe which ones are light? I mean, I know there was the PCB commentary, but kind of curious, I guess, in the other areas.

Sure. So I think when we look at the PCB legacy business, we see that as more flat, so not growing the 2% we have in our algorithm this year, given what we've got going on in cereal, but also the new trish reset that won't take place until mid-year. And then the balance of the portfolio, honestly, we see in line with the- Thank you for that.

And I guess a follow-up on the Agos. a quarter ago you talked about in food service around 115 million EBITDA being like a normalized run rate. We have seen real volume strength in that segment, and I appreciate, you know, the past year had some avian flu, but why is 115 still the right number, or should we be thinking about something maybe a bit higher to start out the year?

No, I mean, we think 115 is the right number, and that was really a benchmark we put last quarter. Fiscal 25, fiscal 26, so by the end of the year would be, you know, obviously something more like 120. But again, I think we're to some normalcy so we can get a better read on that. As you pointed out, there's a lot of noise with even influenza. We definitely had some catch up this past quarter with customer inventory levels given some of the challenges with AI, but really do see the base business continue to perform quite well. So I think we'll revisit in another quarter, but how we benchmarked normal and normalized run rate was against that 115 and then growing 5% in fiscal 26.

Correct. Thank you.

We'll go next to Matt Smith with Stiefel. Please go ahead.

Hi, good morning. I wanted to ask about the performance in refrigerator retail. You had a nice 20% EBITDA margin in the quarter, but you called out some AI pricing benefits there. As we look forward, is this a business that's on solid footing to maintain a kind of a high teensy bedob margin in a normal environment?

Sure. So we definitely, similar to food service, but on a much smaller scale, we had some pricing benefits that fell away at the end of the quarter. So that was a little bit inflated because of that, but we are seeing better performance and better volume performance around private label which is improving capacity utilization I think with that said in the holiday season for them we've always had significant seasonality I think high teens is reasonable when you talk about those periods in our slower part of the year you're going to return to more you know it's not going to be a high team and Rob as a follow-up to some of the commentary about the industry we are seeing private label trends vary across post categories gaining some

share in pet categories while, you know, having a softer performance in the cereal category currently. Is there anything to read through in terms of category by category, how consumers are trading down into private label, any observation you have, whether it's price gap dependent or really category dependent? Thank you.

You took the words right out of my mouth. It's really price gap dependent. We're starting to see consumers be a little bit more gone to promotional activity. And it moves inversely to that.

And our next question comes from Scott Marks with Jeffries. Please go ahead.

Hey, good morning. Thanks so much for taking our questions. First thing I wanted to ask about in the prepared comments, you mentioned making targeted investments in 2026 with some innovation potential.

Just wondering if you can kind of share some details about how you're thinking about some of those investments and maybe what categories you would like to invest in and anything else you can you can comment on that thanks it's the typical type of investment for brand innovation that you have seen historically we took a pause on some of those during the pandemic and it's been something that we haven't been quick to renew in the last couple of years but it's going to be line extensions in in really every retail category so in cereal as an example we're going to be bringing some protein products we're going to be bringing some granola products which are areas of the category that are more that are growing better than the rest of the category but you're going to see that sort of thing in our refrigerator retail business as well. And in Pettit, a lot of that is directed towards the Nutrish relaunch, although we'll see some smaller innovations in some of the other brands as well.

Got it. Thanks for that. Next question for me, just as we look at the food service business and some of the demand for some of those value-add products, it sounds like you're expecting some of that momentum to sustain as we get into next fiscal year. Maybe what gives you confidence that some of your operator partners will continue to demand these products at these high levels? And just any comments you can share about the overall backdrop for your operators right now?

So there's a couple of things we would point to one is it really a long history of that business moving customers up the value chain so starting from lower value added products moving them up to higher value added products and the value proposition that they see when doing so it's a function of the labor dynamic in their operations when they move up the value chain so that's been a multi-year almost decade long maybe multi-decade long trajectory of the category which we don't see any slowdown in that happening. The one more you perhaps unique situation with avian influence and the pricing that has the pricing dynamic that has been caused by that in shell eggs has caused some customers to convert to liquid eggs the ones that are able to convert, because over this period of time, liquid eggs have been less expensive than shell eggs. What we have seen in the past, probably on a smaller scale than what we've seen this last cycle, is that there's some stickiness to people who have converted to liquid eggs initially just for the pure price play, because they find that the efficiency in their operations is such that even if the prices are more competitive with one another between liquid and shell eggs, that they find efficiencies in remaining with liquid eggs. So we have some belief that, given what we've seen over the last 12 to 18 months, that the stickiness of those customers that have converted will continue.

Thanks so much. We'll pass them on.

We'll go next to Michael Lavery with Piper Sandler. Please go ahead.

Thank you. Just going, Pat, can you maybe unpack some of the key moving parts there and maybe just remind us the cadence of some of the private label cuts and distribution losses or the come-in cuts and when you've got those and just how to think about the puts and takes through the year?

Sure. So a year ago, we were, you know, working our way through fiscal 25 through some profit-enhancing decisions we had made. And we've fully lapped those in as, you know, we've developed during 25 as we lost some private label. We continue to pursue opportunities there, but we won't lap that until we get to the midpoint of the fiscal year. So I think as we think about the business and the volume trajectory, half of the year, see single digits. And then as we get to the midpoint of the year and Nutrish is on shelf and we lap that private label, some slight growth.

And then you touched on some of the price gaps. Maybe just specifically for cereal, can you help us understand what you're seeing there, how rational does pricing seem, and maybe any sense of why you're not seeing a little bit more benefit from trading down?

We've had some competitive pressure and promotional activities over the last several months. They seem to be changing. And, you know, I think it's no more complicated than that. As some of our competitors have been more promotional, the private label offering has been less competitive.

Okay, thanks.

We'll go next to Mark Turrente with Wells Fargo Securities. Please go ahead.

Hey, good morning, and thank you for the questions. I guess first on the EBITDA bridge into 26, any changes to your underlying assumptions for the go-forward 8th Avenue business? I think you previously called out 45 to 50 million EBITDA annualized plus the 15 million synergies exiting the year. And then any color on contribution baked in for the pasta business for the first quarter top line in the EBITDA?

Sure. So no change to the outlook. 45 to 50 is how we think about fiscal 26. And then do you have confidence in getting to a run rate in synergies by the end of the year? It's going to take some time, given all that's going on there. And then in terms of the pasta business in Q4, we called out about $20 million contribution from 8th Avenue. Again, we're expecting just two months of pasta contribution this fiscal year, so two-thirds before we close on the transaction in December.

Okay, thank you. And then just a little more on the volume trends and core grocery, any color on progress through the quarter and how things have trended into the first quarter? Have you seen any incremental pressure, perhaps from SNAP? And then just what's factored into your outlook for this year?

Yeah, so I think what we factored, again, I think we believe there's, we'll see some category improvement as we lap some challenges in the back half of next year, given some of the, I should say, given that some of the challenges we saw, the marginal improvement, what we saw in Q3 and Q4, and then seeing some improvement in Q3 and Q4 is what's baked in our guidance.

Okay, thank you.

And once again, if you do have a question, you may press star 1 on your telephone keypad at this time. We'll go next to John Baumgartner with Mizuho Securities. Please go ahead.

Thanks for the question.

Thanks, John.

I wanted to go back, Rob, to some of your comments around strategy and cyclical versus structural. Over the years, Post has built this portfolio that's tilted more to value, whether it's cereal, pet food, the 8th Avenue business here again. And, I mean, value has held up well against the macro over time. So it's been prudent. But I'm curious, given the headwinds now for lower-middle-income consumers, higher debt, snap reductions, and you're seeing the consistency from the premium eggs, does it maybe warrant more initiatives in terms of addressing premium products, higher-income households? How do you think about that in terms of future M&A or organic innovation and the capacity to tilt the portfolio differently going forward?

I think I would disagree that the portfolio is built around value. I think the portfolio is built around choice, because if you look at each line we are in, we have an array of price points, and that is true of eggs, cereal, potatoes. So what we really like to do is appeal to an array of consumers, And I think that the trends that you're raising, rather than dictating the construct of the portfolio in total, really dictate the direction of innovation. And I think in that context, it does suggest if we have the opportunity to do so to innovate more towards higher or middle-income consumers.

Okay. And then maybe just, you know, building on that in the refrigerated retail business, you know, thinking about, you know, some of the side dishes. I think, you know, that's been an area where private label has been a little bit of a challenge the last year or two. As we look forward now, you know, supply chain issues have been, you know, cleared away. How do you think about investing in that business, you know, in terms of a vehicle for innovation, you know, hitting the convenience angle for consumers, expanding, you know, distribution growth? Where does your plan sort of sit for that side dishes business going forward now?

So, John, you've got a long history with us. So we went through a period of time when we first acquired the business that it was in private label and branded. So to Rob's comment, we were participating up and down the value of that segment, different price points. Then we went through a period of time when we did not have enough capacity to meet our branded demand. So we exited private label so that we could focus on the brand. In the meantime, some competitive private brand products got some traction, and we have now gotten to the point where we have our capacity better aligned to the point where we have capacity that can meet both private label and branded demand. And because of that, we're choosing to pick and choose where we go, but to go after attractive private label opportunities in that category while also maintaining the brand and continuing to invest in the brand. So the longer-term or medium-term goal in that category would be to do exactly what Rob said, play at the multiple price points, not to be the omnipresent party in private label, but to be the party that wins where private label is most relevant at those retailers.

Gotcha. Thanks, Jeff.

Thank you.

Our last question comes from Carla Casella with J.P. Morgan. Please go ahead.

Hi. We talked a lot about the M&A as part of the strategy over the past. I'm just wondering how that environment looks today and if there are a lot of opportunities. And then also, if you're focused more on opportunities within any of your key segments, or would you add another leg to the stool?

We tend to be entirely optimistic on the last part of your question. You know, I think in order to have a successful transaction, we obviously need a counterparty. And I think with the multiples where they are today, we've seen some reluctance to transact. And, again, we don't necessarily look at M&A as an objective in and of itself. We look at it as something, an allocation that we can use compared back or paying down debt.

Okay. Okay, and given the 8th Avenue is behind you, any thoughts on coming to market to refinance some of the draw and the revolver that you used for 8th Avenue?

Yeah, so we continue to monitor, Carla. Obviously, we keep a close eye on that and the bond market, but we'll continue to look for the right pocket to do that.

Okay, great. Thank you.

Thank you. This concludes today's question and answer session, as well as post-holding's fourth quarter 2025 earnings conference call and webcast. Please disconnect your line at this time and have a wonderful day.