PRMW - Earnings call transcript Q2 2021

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Operator

Good morning. My name is Collin, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Primo Water Corporation Second Quarter 2021 Results Conference Call. [Operator Instructions] I'll now turn the call over to Jon Kathol, Vice President, Investor Relations. Please go ahead.

Jon Kathol

Corporation's XXXX Water Conference Primo to Second Earnings Quarter Call. Welcome mode. are currently participants in All listen-only This no will call end a.m. later than XX:XX Eastern Time. is on live will a being at there call playback weeks. and for be Primo's X for www.primowatercorp.com available The website webcast statements, forward-looking future statements concerning contains financial call the operational and conference including This performance. company's report the and release be in this statements reports considered should cautionary and statements XX-Q filings harbor company's connection with and XX-K statements with earnings safe press on and on Form These securities in disclaimers quarterly the annual contained Form in other morning's regulators. actual differ performance The these company's could statements. from materially And as duty expressly no to except applicable by forward-looking law. statements, the company required update undertakes these measures capable of the financial of A any this in the company's earnings being the of Investor measures with at non-GAAP on call earlier released section GAAP, quarter is morning company's data second during or the when the www.primowatercorp.com. included most announcement in is reconciliation discussed accordance estimated, comparable with website the Relations am Chief Primo's by Officer. Officer; Financial Chief and Jay Wells, I Harrington, Executive Tom Primo's accompanied

to of and that, offer to year long-term for this will by call, in review performance the Q&A. part ahead outlook our second XXXX update of back the the on greater assist of Jay call financial turn second our handing discuss the Tom and Then throughout will I provide deck Tom today's call was detail, work provide designed conference www.primowatercorp.com our high-level third With a quarter over a we to you a now synergy the before have discussion. Tom. start our progress will quarter online providing ongoing As a at view the to call and included that quarter of full strategic an initiatives.

Tom Harrington

everyone. morning, good and Jon, you, Thank

results our forecast. offering, to quarter demonstrate Our pure-play for financial second performance strength our of as our quarter the the continue water exceeded

not consistent been has water consistent EBITDA reliable validates as well financial with of line, there and continue sticky, shift from first XX% Consumption second gradually as restrictions adjusted we of our year, top expansion by adjusted is BXB million variable year. to correlation in high-quality momentum recover our continued our the business, that our financial associates commercial to customers from again these quality growth. and performance we a are the levels The customer the direct coupled experience, we adopt BXB our results experienced encouraged pleased focus to that top EBITDA the be our a should It our our both of upon strong be healthier with highly during the the with Revenue along from prior trade-off year our residential $XXX of customers. EBITDA to of second base to of improved ongoing long-term very all also performance. during company of million to of customer the half our belief incremental customers in our of from and the as line up from quarter. new these the on across further drivers during consumers most continued commercial execution strong pandemic signed as beyond. one-for-one remain the customers. commercial consumers of demand important results grew trends margin with contributing to they and between by to and base benefits dedication our more quarter positions One thank results growth remainder improvement pure-play to BXB and the months for purpose and this water. residential our initial We our improving proving through inspiring our customer This demand our base to XX%. predictable, want structure, adjusted and cost us lives $XXX I'm now through their continues our once build means I our better compared The footprint.

most the second the service started points the XX.X% that quit of is on remain XX residential new improved customers Primo by will during confidence our pandemic evidenced Our which that during rate global loyal cooler customers to early the basis quarter.

are our rate downward North revenue improvements. In has a several quarter. in as and residential remained last customer-facing the on X% quarters customer grew consumers investments Our our America, trend second from tools the over yielding experience the by during quit significant

progress XX%, was as American up steady BXB lifting North commercial of the channel. seeing we the are Our on and revenue across restrictions

XX%. Our fact the that performance total is In office from the countries businesses, performance weighted customer BXB and each of customers tied The and is base residential these by serve. Rest the to not direct from in expectation to awarded our was forward for from quarter. of continue we large supported consumers up commercial spaces. segment, or small customers going to XX% for revenue base relative revenue level of the up of BXB restrictions our towards and was World mobility increased commercial remains customer improve consumer Revenue XX%

for highlight balance we're to measure continue with to of segment key further mix. base towards customer Rest see the the our our the efficient rollout coupled World from improved this efforts organic in better of customer performance residential ongoing improve rate, to quit the benefits A and an and our core consumption is in adds in the an in beginning We products low-cost When diversify services region. work to operating and Europe cooler of quarter.

the past in Globally, to services have leaves in a of discussed our existing second us knowledge we believe As over capture great grew we quarter. market in to water X.X opportunities and revenue base position Europe our million we in the footprint customer quarters, the have identified.

million the residential and to As XX estimated I X-gallon between growing. quarter, is million U.S. X- XX be addressable mentioned last alone of and market households to

these our XR, on capitalize households to revenue sales recurring provide Our model. Water entry razor/razorblade Dispenser an and important point access

Our new previous XX% are to of internal existing among to million dispenser dispenser that dispenser replacing an category, XX% and or North their of research American units, X are remaining the the residence. sell-through secondary the last additional respondents year's indicates sales an adding XX% are

has XR future We share residential household, of a Although become their preference Water and research remains it's indicates our growth to XX% prefer continue to as of Exchange other strategic dispenser residences as a to XX% water their Refill. advantages. switch Water consumption likely our Primo more opportunity market now. penetration increased X-gallon one returnable XX% capture prefer for formats Water Direct, is The for this The X-gallon our focusing household that model installed on fair may be should X to water tap that water service. versus existing and potential use X- the or returnable is base. increasing from likely sales and Xx today's penetration of across X- category complement

to is and on journey educate goal to first Our consumers from X- second. dispenser purchase the X-gallon water

have In we added water As ESG, has in Standards, Last January. been neutrality certified on position new X the source for December, second it leadership business a we and to relates Alliance under And carbon remain our water efforts first a in carbon in on achieved our spring years. sustainability. our clean finding year, European and company issues we our operations. we to consecutive water for U.S. Water became water the ways environmental elevating our commitment honor and focused to to neutral Stewardship

the we We I'm and of announce global she to ESG neutral expect of President also this tremendous position. X leader to our to latest did quarter, of Officer. recently in in named and most becoming this our where advance leadership as I'm Diversity end pleased critical Affairs Government locations of successes And confident we carbon ESG, XXXX. the in I'm Shayron by sustainability for is this operations excited Barnes-Selby for certify additional last ours. Under Inclusion our future introduced goal umbrella year. role focus Vice new have Shayron the as her she that our work Chief the XXX% served and ESG, of

governance Resources wealth Corporation Arch Singh ESG of a be independent the and Board. resources of management existing human to has and an member Committee announced yesterday, team. Archana and Singh We as executive of focus skill welcome Compensation efforts. talent currently From Human Primo Ms. our a extensive director leadership Board brings of recruiting She We leader global proven will is Board a appointment and experience for "Arch" to are an the the to the set. of with our complement to a excellent we serve a and Water go-forward Directors. perspective, continue the

$XX by in full $XXX to again driven first second coupled Our and million our year pure-play our growing with results, $XXX to our financial confidence million. steady our quarter range now raise EBITDA water and model, adjusted outlook have and decision between half million

organic grow by revenue strategy. to additional revenue approximately plus M&A growth expect our X% tuck-in We from

plan our review to the reiterating to detail. to our greater quarter at also over the are million to XXXX. the to call of range second I'd results in M&A $XX Jay of We like investment financial million $XX in higher be turn end

Jay Wells

with compared Tom, million. you, everyone. results. Starting $XXX $XXX Thank to morning, Revenue and second good our XX% million to increased quarter consolidated

foreign in Exchange and by driven Dispenser of Water channels. gains our Excluding partially declines our Refill revenue XX%. the offset Water exchange, and by largely by were increased impact Direct businesses, Water The

was X% quarter. segment increased and World X%, XX%. up with North experience the of was residential in up of residential to continue We consumers revenue American revenue residential from growth the Rest revenue

North leverage BXB million. and and Adjusted commercial residential million World $XXX improvements up with increased EBITDA operating XX%, compared for BXB to also revenue XX% Rest up continued consumers, demand driven BXB pricing, revenue while growth. products commercial demand, and increase was American XX%. BXB The strong the revenue was and ongoing from XX% of improved by was and commercial to and was realization. global Our services synergy commercial $XX increased

result volume the will by to increased operating demonstrated basis to points variable margin SG&A to million. of XX EBITDA growth, compared we our $XXX adjusted increase and The $XXX structure. the to supports continue X% selling and Our increased cost costs, million expenses organic tightly highly was which incremental XX.X%. manage

our segment quarter. to America, Turning million. level compared $XXX for X% North to the million In revenue to $XXX increased performance

Water Excluding strong realization. partially and XX% pricing in operating EBITDA continued driven improvements Dispenser ongoing the impact synergy our increased and Water increased by volumes by was to Refill revenue leverage of from The channels. revenue increased revenue Direct increased due by and $XX exchange, our higher Adjusted lower to driven increase X%. offset by Water foreign pricing, million business,

Turning segment. to of by million. Revenue increased our Rest $XXX to World XX%

in by the foreign volumes segment improved the operating in The increased commercial impact was resulting consumers Excluding by revenue and million as growth of exchange, return to Adjusted and a XXX% in increase EBITDA across favorable residential leverage. our XX%. continued increased business. of driven all BXB improved channels, $XX

liquidity Turning position of position for ended $XXX a sheet. our to flow million total combined a net liquidity and quarter We capacity of cash on balance of our borrowing with million the revolver and balance available million. $XXX cash $XXX

Our net X.Xx. leverage ratio is

targeting less of are than leverage a We net X.Xx. ratio

Turning to synergies.

of progress $X ahead the capture the provided in We acquisition. continue work and quarter. legacy our another the synergies million realizing XXXX good quarter of XXXX, well to million schedule another remain the cost and Primo we second make approximately of realized the $X first After roughly of million synergy in on $XX in time we at

XXXX to $X million to the for the XXXX. per balance We remainder million in of $X expect quarter realize and

$XX realize all completed needed have of synergies. expected the benefit We million actions to in

less strength second our levels reopenings. BXB customers of are said, and as customers, reopen, active commercial our Tom and with grappling local As to by more pleased see quarter our albeit capacity with fully the how Residential than still of still results commercial starting business. we but are to are and delayed pre-pandemic at Many abide they consuming we restrictions

revenue Looking currently on quarter, us we we continuing be between to as to to have of consolidated $XXX million operations and information the from the available today, million. third $XXX based expect

will that expect also adjusted our million to quarter third million. in the $XXX EBITDA be We $XXX range of

by EBITDA now year grow organically XXXX, we revenue $XXX X%, million million. the is between to approximately our and projected outlook raising for full are $XX by and adjusted and million $XXX now For

million around $XX taxes, expect $XX also We around well million. as capital of expenditures million of interest cash of as $XXX

close pipeline of and respect robust end announced dividend expanding Board shares The we've Turning part for the disciplined target to of With on are strong repurchase September Directors of Yesterday, have quarter on a customer August to second our share accelerating our acquisition approach of cash share. payable Waters of million program. the common purchased of of as Recently, base $XX focused as in this as potential. to tuck-in million we of of dividend quarterly EarthXO, capital our XXX,XXX We authorized ability our roughly remain per Health examples our in of XXXX XX, Pennsylvania. $XX These during of higher at $X.XX been us. well million M&A, the X, opportunities and shareowners on is have achieve business deployment. acquisitions in front $XX million great record maintained of XXXX. our year. $XX earnings to the tuck-ins to confident of We the

I now terms $X In to per adjusted EBITDA inorganic an XX algorithm year, after will back to to points margin growth from by call of revenue the annually million roughly incremental grow expect Tom. of to and basis add we still accretive XX acquisitions. improvement XXXX, X% turn of incremental EBITDA generate $XX annually our an million tuck-in organic

Tom Harrington

Jay. Thanks,

our As we see you continue the growth and the half first our during main of very execution with across can to drivers business. the happy momentum tell, year of the we're

is areas and transition differentiated Water water model executing to and factor of including the about and focused focus We're We Way Your our platform a operating us. to success the opportunities XR business. model the consistent our as our pure-play excited results. of key critical itself remain ahead Our in the our driver model success, drive a and a proving differentiating on key predictable of

be of suppliers. associates, Our and priority our will all the and safety to continue health, customers well-being

XXXX. growth We drive pure-play revenue in will X% leverage to approximately water our model organic by

through experience We solution. will diverse customer out e-commerce the tools customer-facing building and enhance more improving a to continue

residential Refill, diversify We to demand are rate acquisition Exchange and Water quit channels, base Water our developing growing Water retention. our cooler improve customer businesses new acquisition further Europe, In the strategies customer accelerating and diversify capture reduce Dispenser our and in we're to customer market. our

health accretive protecting growth identifying an North and initiatives across Europe Supporting and focus predictable while to sustainability and improve support more line America and ways and leveraging tailwinds category. and and the toward health and of The elevate growth are that hydration wellness in highly and as structural are our areas tuck-in standing and consumers solutions. of of their the efficiency to our broader category our prospects beverage executing include COVID healthy our thematic gaining conversation, Additional increasingly reliable consumers and improvement our maintaining top wellness are highly structure, leader. cost well-being. variable to the new driving health share continues seeking continues our conscious acquisitions overall further ESG

tap which decline. In quality perception our municipal the well services. growth the primary is is addition, of and expected the declining continue water source as documented, drinking supports of to to Tap the of water products

revenue noted, and $XXX quarter Lastly, EBITDA we adjusted million consolidated as $XXX $XXX and million to Jay million between and be to third expect our for $XXX be between our million.

to of approximately year X% adjusted growth $XXX in full of range revenue be million the forecasting we're and to million. forecast $XXX EBITDA our For XXXX, raised

from We Water commercial improvement progress year. and BXB Direct residential we customer Direct Exchange an expect from the to base Water our as our see customer sustained base, and through strength

move turn on the we XXXX. to these We tuck-in would pipeline also second to results Again, in business strong associates of I'll With to the thus call to the like maintain M&A a which during of us that, thank the over Q&A. delivering expect for far the candidates, across Water Jon year. back Primo solid half I execute to

Jon Kathol

Tom. Thanks,

X X of we person. Thank we as of During you. ask question Q&A, a would per ensure hear possible, the as from to can for many follow-up and limit you

Operator

from Kevin Instructions] from [Operator Jefferies. comes Your Grundy question first

Kevin Grundy

strong results here. Congrats on the

on if guidance, up we could. the I Let's guess, pick

a implies about more how is sort the flowing organic here could, would full year second the It respect the the of great. to up line recovers. lower even similar of year, you of if as outlook. a in of and half through upside been the you maybe half sort growth has quarter demand level raised the front thinking growth, return notwithstanding organic the year good, which that you're rates back about, the Jay, the your top commercial commercial bit of Residential saw you So that sort basically outlook, the Talk in quit you're with little work, residential flare recently of to people to between balance And in back then, EBITDA business the of virus. half slowly with the it here as the seem the year.

could a the year. to thinking about the just back you then on and So the from not more the year respect how favorable as of comment And a follow-up. Maybe that of anything margin have I some of well, back necessarily you're half with level perhaps conservatism perspective. half

Tom Harrington

see Thanks, really let and and that of those have levels. slower Direct residential the success take consumer EBITDA. in at course, on to has as Jay opened. is that -- Rest talk of World, think a to continue Exchange America I'll elevated in We expect of businesses would Kevin. let's I'll the We lot current to the And continue where the well about a I'll first the on expect would we've which what good performance grow to with had the half, year-to-date. refer our in base about more Europe residential North primarily small in business Water BXB commercial. And to performed recovery

will, the or it pretty performance terms have balance of we and we in So baked of revenue outside our of whatever us COVID in the for think continued strike, headwinds, growth anticipated have the on you year. we strong if provides Delta but all expected

Jay Wells

of procurement complete did flowing pricing that and see the And and little QX this our the think in saw actually in year, as incremental activities we'll capture. got the we really then dated that right, I quarter, of continue the you Kevin, back beginning year through it on to related We next actions in were of benefit to the into to a synergy year. EBITDA, remainder update the some did

So we you we did update that, And look guidance the of did guidance variant. our remainder about the at year, when you good for did quarter had. update for our the talk the Delta

continue to our forecasted. line progress top see as We

continue we until the current line continue very see like costs back. going, through variants line are is manage But come world going to we're in we tightly. our operate to just get with we to really top how where and manage We our costs and see the the

Kevin Grundy

Got it.

you're I surcharges. on quick on of next other cost a for the margins which X that costs environment, on Maybe putting as follow-up What's I Can pass the certainly has from ability just just up there? well. is on P&L? to from months within but next XX the -- the just and just the labor am me, of Just supply it And the then comment sort maybe down obviously think months, company sort I'll moment chain. a probably you of of on pass through spend that aware a expectations even not lot that on. pressure sort the and embedded

Tom Harrington

wage Kevin. certainly, we're inflation. And Thanks, experiencing

to that into America like are the experiencing also cost that along come very addressed many that cost. of specific each our on and, local ocean terms of We've in labor frankly, forecast that subset also that freight, some the force. we've have dispensers taken. into We the obviously market taken each related North Europe. actions which pricing China baked incremental of to with We've really is component from others, in We,

place, but business. inflation in we appropriate which that place, offset about these have of We course, the the that be the acted be that terms about The of upon on the of our we're our in in of have the we in that we've says then wildcard, ocean pricing freight of in will then piece how impact to we be New it. balance next through have fuel, going energy costs, if to think certainly year, confident think that are taken year, seen. actions fine remains I forecast of into also baked and and frankly, for fees, not all where you are put read wage Everything post so that next surcharge And year. the actions Chinese pretty And delivery think to be ease me, is freight. QX should ocean Year pricing

Operator

Andrea from from Your next question comes JPMorgan. Teixeira

Andrea Teixeira

that you good against to likewise, levels? follow Can if impact about XXXX of And Can using for been in very that, volume supportive lot you those and X You be back. X us that commercial please I the month of then I up. gave relative coming But think, on us mentioned customers the these on average. update customers? from about a from numbers update you residential have X.X a information previously, to here customers bottles is QX can on bottles I will back -- had

Tom Harrington

is of I'll of on Direct than QX high give of which Water it's XX% business. lower in numbers and than of you obviously higher And World, 'XX. is Exchange, our a the percentage XX% America Rest couple XXXX. Water the North of QX

different the rest think about business XX% EBITDA, XXX aggregated, back when the that XXXX. it's in you And we're if as slower you up obviously world, baked over asked forma a we're adjusted On revenue, XXXX, still pro about commercial company is is -- a that or or pro very better for to in X% waiting our basis fact happen. If forecast. which And about points. it's into the come of than forma recovery roughly the

albeit the pure play a basis. water a So good to different is performance give pretty a 'XX, versus business you on for flavor X-year

Andrea Teixeira

super That's helpful.

double go Just click -- to ahead, sorry.

Jay Wells

your specific -- consumption. on per unit you asked commercial on just Sorry,

back We bottles on the a fractions of basis. side come commercial on have unit per seen

it's but pre-pandemic yet. back see are small we levels we So to in to traffic foot businesses the not service, starting more

Andrea Teixeira

both commercial? lower is What XX% encouraging. the combined, and of I'm U.S. the the said is think, assuming No, high you that that's I Yes. only in about or just the actually, world, rest this XX% and commercial in residential

Tom Harrington

base America that's customer I'd mix. correct. And No, residential of a had higher terms North in say,

different North the fact a that business has something me, mix Jay, commercial. XX% half -- like it's in in the residential. from that we roughly benefiting America are we had correct And Europe, customer know we So

numbers those the of one Then So strategy, key post-pandemic, our the or with if mix to is world, going shift fit of It's context. in of the outcomes in learnings residential will. that growth obviously, forward. rest you that

Jay Wells

World Keep down we're is XX%. a -- more office that being in of Rest mind, greater, type traditional business. with And

there still So customers of to they that is delivering probably have percent we reopened it. XX-plus are not our not because during

So not XX% being servicing plus XX% of positive down when very we're a customers, our still only sign. I view as it

Andrea Teixeira

Of give better believe course. relate? like like I much And does then number the that for first XX%, that that if is the probably -- quarter. in cadence us How the you can quarter, from higher mid-teens getting the was

Jay Wells

It than Eastern for is performing better call it's at, obviously in turns than sequentially, that's we're baked out. -- X, QX right? is that We XX let's better for So X the QX. it, Europe But of, and we'll and countries Europe. Western expectation where see our aggregation improving how and

and we're So the are we're continue quite a at rate. to with pleased and where we sequentially it making, progress reasonable we expect

Andrea Teixeira

make that are same And the and to in that also we just topic. -- sure

in don't reopen? side, the On of think -- your and you're supportive a either, the residential you're of numbers, we deceleration the as not residential side from for seeing right, is that, commentary much I seeing U.S., the

Jay Wells

Yes, we're business deterioration the X% seeing residential our not in was up quarter. because the

a one-for-one. as So -- as not lot, it Tom says seeing a it's we're

mentioned, deterioration side. and the half residential same that seeing that not back regain the on we're a we per unit bottle comes commercial As you

Tom Harrington

were And is Andrea, signed was importantly, that in we really residential, early sticky. which on script the customers it largely pandemic, and in the referenced the are

later, we continue call part a with plus why which see residential the is to still customers those many So we're base. are that it let's year quite pleased of that, in that of growth us,

Operator

question Lessard next TD Your comes from from Derek Securities.

Derek Lessard

strong Congrats on quarter. another

Tom Harrington

Thank you, Derek.

Derek Lessard

guess, some in, me for growth the that what talk other business? revenue And strong had Dispenser could side you maybe in the that. maybe, just also on Water about weakness question the maybe you wondering flip I'm just saw that, and was Refill you I of of driving the categories. is, One

Tom Harrington

on We Let's had the large -- side. the the business I'll with a start of refill loss anticipated customer. top

that it is the was. pantry So loading, we -- I is cycles And thing loss. with really that. other part of it can't that anticipated year-over-year then that are but We call experiencing

think of business you if was year our about water. So meaningfully a impacted source as a QX ago, refill good

So vending machine in we're business, will. you if with pantry that less dealing some loading

X really big of So those are opportunity. drivers the

Jay Wells

hit On it You the a want very dispensers, me unusual to timing. yes, the dispensers? was on year

You at of in last in was very look we growth dispensers the had QX year, high. it

look XX% X months I year last a this And first our is the dispenser me, For basis sales year-to-date for year-over-year. versus up on year.

positive. helps it So also just very dispensers up there last on being the pantry looking was year-to-date, as loading to take XX%, timing out But noise year. at

Derek Lessard

Yes.

you? that's from is So and very have X-month impact so had any the -- shipping delays very the is number what strong, Jay. What -- have you

Tom Harrington

a And when a the -- working the and of we will on people on yes. every when we the it that booked, do shipping day have container is it is to have team ship, answer lanes The are port. get you

real all is that So management, in active daily team to time. and that would the be of reacting

have complex pretty efforts we demand environment. situation satisfying physical in a inventory, but within through a because the of fewer working So of the rising we're cost probably team

Derek Lessard

And Okay. one maybe me. just for last one

As execute returning between and wondering earnings, balance you deliver shareholders. to lower relatively on leverage guys your thoughts capital just stable and continue to the about

Tom Harrington

Yes.

lower. I or is X.Xx continue to we we work out towards think and pointed in where we Jay's that that Xx today are script,

as also obviously, our to to terms debt benefit growth or deleverage continues paydown grow. frankly, the in from tuck-ins EBITDA actually, our would either that current of So and revenue plan, be the of of benefit

Jay Wells

it. behind have program. stock executing We're And mean, bought been quarter, we our quarter. where what our share on buyback, this far I thus we talked I about has last

million to $XX And $XX have I continue to probably the throughout continued million behind it on the to have goal execute is execute remainder We the left program. it. on about of our year.

Operator

Your next Doumet George from question from comes Scotiabank.

George Doumet

good on the quarter. Congrats

Tom Harrington

Thank you.

George Doumet

tell I that little down that a maybe much a us for organic X% bit of Can put is how how is growth little consumption, the you maybe that algorithm bit. guys talk much about that break much of a new how pricing, that Tom, off customers? Just that to of bit you year. little wanted is

Tom Harrington

Think roughly Yes. and XX% price volume X% that's our at volume and about revenues and impacting price mix. at

channels. shifts across it So

Jay Wells

Direct, That quarter. that was was water Water in this -- and

George Doumet

sorry, for the for year? the algorithm maybe, And

Tom Harrington

are Yes. this. of I And let at easy we the mean look mean, take what I'll comps commercial on through you I the -- business. me call side the year it, lapping

you're being of say probably would I talking X/X and the the -- talking -- being X/X year average. an price we're sorry, X/X of X% full growth price volume the So X/X, what the average of being price being X/X, on

George Doumet

helpful, last guys. just one on That's And one me.

look at been an XXXX Israel maybe is how market trending give has opened you maybe you months us now. to levels? update above for what and that is on consumption extent X If obviously Can about

Tom Harrington

PET Certainly, It's level. to the elevated of good which an business a that has continued to retail perform frankly, supermarket business, combination performance, is at right, goes homes.

Our roughly overall base is residential customer XX%. mix

There's in the benefited from we've market. continues. growth it customer and significant that, So pretty

recovery. nice very So

to growth it the think didn't we quarter. XX% contributor on June, of referenced in the It or I XX% in a at grow was order something April. solid second but in May

Operator

Moore Dan next Your comes from from question CJS.

Stefanos Crist

for Dan. Crist in This is calling Stefanos

the there? in recent your you on initial home said you're us Could calls traction getting good first, Europe, exchange give and with an So initiatives. on already delivery you e-commerce update sides

Tom Harrington

Yes.

It's e-commerce quarter contributor those XXXX. the up important stood by was R, countries through XX went no halfway -- to and a in in sell year, further -- third that's roll year, countries it sites base a And call from then fashion did consumer And home we at that, for would we the Rest out Europe. our to residential year. probably time be see we the us to an we'll website residential finished XX%. let's obviously, it's World the both was dispensers and the we across site you month. that out countries the We of Germany the in end countries think begin expect first to the, developing site our our up actually a site Netherlands, Germany. month-over-month you'll in U.K., the of And we build residential this the by to, same recall, these site began So a in frankly, as last site in in of our last it, the the

Stefanos Crist

notable On you just follow-up. competitive a under ownership? changes the seen ReadyRefresh, just new then any have And dynamics in Great.

Tom Harrington

Nothing notable.

certainly point I to get business trying the to think be at it it's this arms So -- usual, in their time. business think and around would just I appear they're as

Operator

CIBC. from question next John Your from comes Zamparo

John Zamparo

any incremental mean, I customers residential customers some that, well? those customers you on one-for-one wanted Water I comments. dive And that you the the residential business, small them overlap get Direct either are new of a are recovering in of adding, a now And example? to commercial -- there sense are business, commercial you're bit deeper versus between is the who how there or their are in ones? they're returning customers do for adding by And as do service the sense and many to

Tom Harrington

residential businesses Yes. We that small be says started are don't in in firsthand that who would way, experience service independent it there operators know track consumers And service would residential. but the we start to who are there BXB. that that that

is us. normal that course So for

is revenue America, continues pretty from And stick to which commercial Our grow. says to I base they're reopening. significantly. The residential North up

which on we a at you will, earlier, stores, So lower of of that in XX% reopen. direct growth number right, believe, growth if referenced reopening those related was is to QX, order little Jay that the as foot something consumption bit which the is, traffic revenue

So we're residential continue. to pretty confident and expect

more commercial. are restarting, really are will, as our versus you just on We on basis. of a year-over-year today And customers seeing residential new customers

John Zamparo

in couple Okay. you that recently. expect either the you And or on announced color sales And them that add tuck-in with purchase give you of is transactions Were these? valuations? on Can follow-up my to any of Got add? materiality it. they line sense price can a then you on traditional

Tom Harrington

Yes, M&A I'll be for take the would first footprint. our us fair part. existing standard These cut center inside small

the and benefits of to will that. in terms overlap These density. about the think provide route leads customer that So you density businesses

Jay Wells

integrate just million. there $X definitely know questions say talking X of going And to probably would announced. EarthXO a to on of is slower included the our million X to respect on X. guidance setup. -- it, the the we are what's revenue the certain combined, I larger little EarthXO, to couple $X about a you're just I with be we're in

to integrate We do have some work to it.

X So the the $X.X probably year is of in for EBITDA say half back I'd the million.

Operator

Your next question Canaccord comes from from Genuity. Dley Derek

Derek Dley

during mean, a packing of the level? an Just Has on you what channel? per could that ranks business. Can you question you're if stayed COVID you up did just seeing a of bit on update same tick period? on the adds there? on e-commerce growth color where see digital perhaps or this your I give in little order at new give it the And

Tom Harrington

high the in we the are digital the in result investments for business in which business XX% a the Europe, of seeing residential you the up website. give level. That direct I'll -- is The quarter. growth Obviously, was

codes, retailer, seeing good We're right? U.S. talked that and before. about stickiness XX,XXX the currently in of that the large about beginning sequential customer. and on are and We see to available Amazon the then e-commerce growth period-over-period, ZIP in growth to we're frequency which We've we'll gets get

of fits, beginning terms sell dispensers it think the in if razors, to strategically, you important about In pretty Europe. particularly the where it's

should to to of over frankly time. says solution a America works of websites some us feed for in have revenue continue story, as order for the and Water know, looking work the which XX% And terms -- them that web the feed in are to residential easier also Direct, enhance growth We make on we growth of to customer our really or volume which something script, the buy. shops in referenced North then starts, once I it

Operator

Raymond James. Instructions] from question from Molchanov [Operator next Your comes Pavel

Pavel Molchanov

You U.S. opportunity on Europe. M&A about And minute wanted ask ago. the to set in touched I a the in

tuck-in acquisition landscape the like last XXXX, your for looking expand? that think very What's I beginning to you there of in at was Europe pre-COVID. the

Tom Harrington

number we are the in a pipeline. Pavel, -- we of Yes. opportunities have

some. Some We'll on likely relatively be short are closing order. frankly, in,

North A in our number opportunity, America. So items in overlaps footprint the of important an versus U.S. pretty balanced in country. Europe are debt

frankly we about are quite pleased the before execute we're many So out. is year how where and will

roll So them we business. the through a call timing as the it as of that just timing,

Pavel Molchanov

bit weeks XXXX. going what can't a political asking plastics in curious to so? ago process of was banning question you little any that XX on I I'm that months approved of a referendum And help or California. is about about state kind few next look the single-use the Understood. a The by perspective about over like essentially the just have if you

Tom Harrington

that prognosticate We and solution our XX X- revenue. It's very next the our over returnable a a is sweet high Yes. of can't months. I us X-gallon know for -- spot and percentage

size business single-use challenges we'll benefit, we So that terms frankly, of to plastic knitting in continue our will in our time. there to that against and as my stick opinion, of are over growing

Operator

There are back time. I'll this remarks. further turn closing questions no Tom it at to for

Jon Kathol

Thank This call. Primo's all results second quarter for concludes you attending.

Operator

this conference Ladies and you for your today. please for ask gentlemen, We that your disconnect and participating concludes call thank you lines.

Primo Water (PRMW) 7 Aug 212021 Q2 Earnings call transcript