On August 7, 2024, Reynolds Consumer Products Inc (REYN, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Reynolds Consumer Products Inc is a provider of household products, engaged in the production and sales of cooking products, waste and storage products, and tableware. It operates through four reportable segments: Reynolds Cooking and Baking, Hefty Waste and Storage, Hefty Tableware, and Presto Products.
Q2 2024 Financial Highlights
Reynolds Consumer Products Inc reported net revenues of $930 million, slightly below the $940 million reported in Q2 2023. However, retail net revenues increased by 1% to $892 million, surpassing company expectations. Non-retail net revenues decreased by $16 million to $39 million.
Net income and adjusted net income rose significantly to $97 million, a 47% increase from $66 million in Q2 2023. Adjusted EBITDA also saw a 15% increase, reaching $172 million compared to $150 million in the same period last year. Earnings per share (EPS) and adjusted EPS were $0.46, up from $0.32 in Q2 2023, exceeding the analyst estimate of $0.42.
Segment Performance
Reynolds Cooking & Baking: Net revenues decreased by $17 million to $304 million, driven by lower non-retail revenues. Adjusted EBITDA increased by $16 million to $56 million due to increased production and lower operational costs.
Hefty Waste & Storage: Net revenues increased by $9 million to $238 million, with adjusted EBITDA rising by $7 million to $69 million. Volume increased by 2%, driven by successful product innovations and a shift towards a sustainable portfolio.
Hefty Tableware: Net revenues decreased by $6 million to $245 million, while adjusted EBITDA decreased by $6 million to $39 million. Despite the revenue decline, the segment outperformed its categories, driven by multiple products including party cups and plates.
Presto Products: Net revenues increased by $5 million to $150 million, with adjusted EBITDA reaching a record $37 million, driven by volume growth and lower operational costs.
Balance Sheet and Cash Flow
As of June 30, 2024, Reynolds Consumer Products Inc had cash and cash equivalents of $101 million and total debt of $1,784 million, resulting in net debt of $1,683 million. The company reduced its net debt to trailing twelve months adjusted EBITDA ratio from 2.7x at the end of 2023 to 2.4x. Operating cash flow for the first six months of 2024 was $183 million, driven by strong profitability and disciplined working capital management.
Outlook and Guidance
Reynolds Consumer Products Inc has raised its full-year 2024 guidance. The company now expects net revenues to be between $3,590 million and $3,670 million, up from the previous range of $3,530 million to $3,640 million. Adjusted EBITDA is projected to be between $670 million and $685 million, up from the prior range of $660 million to $680 million. EPS is expected to be between $1.65 and $1.71, compared to the previous range of $1.62 to $1.70.
| Metric | Prior Full Year 2024 Outlook | Current Full Year 2024 Outlook |
|---|---|---|
| Net Revenues | $3,530 to $3,640 million | $3,590 to $3,670 million |
| Net Income and Adj Net Income | $341 to $357 million | $346 to $358 million |
| Adjusted EBITDA | $660 to $680 million | $670 to $685 million |
| Earnings Per Share and Adj Earnings Per Share | $1.62 to $1.70 | $1.65 to $1.71 |
"Strong retail revenue performance in each of our business units resulted in RCP outperforming our categories during the quarter," said Lance Mitchell, CEO and President of Reynolds Consumer Products. "As a result, we delivered another quarter of strong financial results demonstrating our marketplace leadership as well as our effectiveness in driving operational excellence."
Reynolds Consumer Products Inc's robust performance in Q2 2024, driven by strong retail revenue and operational efficiency, positions the company well for continued growth. The raised full-year guidance reflects confidence in sustained performance and strategic initiatives aimed at long-term growth.
Explore the complete 8-K earnings release (here) from Reynolds Consumer Products Inc for further details.
