PYYX - Earnings call transcript Q4 2024 | Pyxus International, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to today's Pyxus International Fiscal Year 2024 Conference Call.

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Mr. Tomas Grigera. Mr. begin. may you Grigera,

Tomas Grigera

me Flavia Pieter Landsberg, With and our CEO; and our today you. Sikkel, is President Thank CFO.

points. Before results, we few I financial would like begin to cover discussing our a

of may this expectation You intention as fact. not well that as during statements the or call express a hear that belief, are historical those course

are materially that actual events uncertainties and statements and a in involve risks cause These described forward-looking number of These to SEC, Form with may and differ from our along are forward-looking risks these statements. XX-K. and filing most recent other uncertainties in uncertainties detail, results including with and risks the our

as United A to Generally and in GAAP alternative EBITDA, Principles U.S. measures or undertake a not including these call not today Accounting Accepted operations available assumptions measurements, interest, or any are on to not statements the results including forward-looking any circumstances this on do to which before that of and our to other is website and statements based. considered call of disclosures on as under should change measurements. amortization, conference be any non-GAAP financial our these Included an in made of and financial earnings expectations commonly depreciation referred change reconciliation We reflect are may regarding in non-GAAP table, update States management's EBITDA adjusted measures discussion be at taxes, in www.pyxus.com.

aware reproduction conference strictly not prohibited. an as of Any authorized is not by should accurate has this may call, be Pyxus been contents. replay, conference other than rebroadcast, transcript provided call that the of replay other its or be of unauthorized reproduction and reflection this any Investors International,

call I'll over Pieter. to hand the Now

J. Sikkel

today. Good for everyone, our thank you and call joining morning to

working and operating achieved an capital consistently concluded to and year shipments, cycle successful increased have performance. improved was profitability, through exceptional the year. This strong acceleration and of times financial have operational efficiency delivered throughout the pleased We

Our by XX.X% XXXX. increased throughout tremendous illustrate to to our fiscal fiscal year full gross our sales to in financial We X.X% billion, supply footprint year our from full leveraging year margin highlights profit conditions. under global XX.X% progress XXXX. $X offset We grew diverse

year income operating a year. over million the for of was sizable $XXX.X Our last increase XX.X%

Full million, year million was adjusted initial the guidance well $XXX.X $XXX our our recent guidance. prior XX.X% up This of EBITDA to to at and compared $XXX above year. million high end of most the was

fiscal by These teams our improved globe million and year. also coordinated resulting collective in while our long-term objectives income $XX.X efforts strategic the net goals. results of toward reflect simultaneously short-term to for achieve and We income positive our ability progressing demonstrate the net the around

began we and to fiscal with capture XXXX opportunities. recall, you'll growth a As margin plan

scale-related global efficiency. needs from volume shifted the results and global geographies mix improving satisfied and a which we In especially our and customer cases, to in crop of We implemented capital better plan use our market due mix increasingly growth. where saw other is by Africa, footprint, successfully our to favorable important sourcing to we

opportunities, our our strategic take benefited created We pricing margins also shifted of mix our favorable for to advantage value and customers. which

the long-term and throughout liquidity. capital management continued our working total year, We improving available on our cash focus

had preserve liquidity into ample purchase El Nino availability XXXX. environment our in of going and acquire for inventory result, a additional still an to necessary we As fiscal Brazil, liquidity market to flexibility early and

million our total notes debt X.X% were loans. for senior agreement to $XX.X a senior $XXX.X and closing, As million the of million of of repurchase an an fiscal to includes secured year average subordinated discount up $XXX.X XX.X%. million, $XX.X was to of pleased our term This we reach of

completed, Once actions notes secured $XX.X will will We eliminate when August debt another reached million our senior long-term XXXX. long-term XX% and of $XXX.X million repurchase debt. retire these maturity retirements of also in

made we the improvements We our capital reflect both yet on sheet. cost company's not the does of believe business in balance and have our

Now our credit spread towards interest debt. work expect on to utilize that our variable improved our cost a better fixed to profile debt, we've we rate rate reduced

Over time, a to overall lower there's we believe borrowing significant cost. our opportunity

which In our our the improving important our addition financial and to in fiscal we social to to of environmental remained business. strength XXXX, business, attentive tremendously performance, are

In have February, and the the authority clear environmental our for recognition to from and transparent received progress for our unified continued CDP, leading Pyxus recognition We global approach sustainable earned disclosure. action.

leadership the CDP's as As importance climate pleased well stakeholder regulatory difficult to evolve. X achievement. our in overstate of is status, particularly engagement. scored to of level were of XX,XXX In supplier to companies global by sustainability as and as CDP, highest business, be the category rapidly requirements we worldwide awarded It change

with adopted directly For which some and will business directive, example, Union the Corporate impacts European suppliers consequently, going Pyxus recently customers like our due diligence forward. conduct the Sustainability those how of customers

our the environmental across business wide to and range manage an of and Our social competitive of culture. important effectively clear a operating is part priorities ability is a advantage

like I Officer. our over turn call to Financial now the Chief would Landsberg, to Flavia

Flavia Landsberg

year and I Pieter, would our of XXXX. like to you, of details morning, cover financial in strong few performance important good the everyone. Thank a fiscal

of of an was partially X.X%. an by lower Our in XX.X%, X.X% driven sales increase volumes full year pricing average growth of by offset

Our XX.X% the Africa. the from in improved to service volumes first, full main to X in due factors: gross increase XX.X% crop margin an

Africa America. markets. compared expenses due profit third, in in cost increase and and SG&A year, of increase $X.XX an million $XXX.X $X.XX and processing third-party an shift utilization fixed per volumes held gross better to We to increased X.X%, footprint XXXX. for dilution to in And South kilo mix customer compensation. performance-based Average with certain of mainly the in fiscal the to increased favorable the Second, for regional year in

of expense $XXX.X significantly and $XXX.X income, most end EBITDA margin guidance Adjusted million increase last XX.X% above which substantial top improved was our our recent the at year's a efficiency gross for million. million the was Our range enable year. in $XXX.X and of operating

as to are outperform consistently mentioned, And year. Pieter the the plan we over course pleased our of

that of debt, million $X.X X in to includes we expense net on in debt income We quarter items discrete provided Our which the million full recorded the our third income. income extinguishment of basis, nonrecurring than more $X.X long-term fourth net pension of of million of the related year million $XX.X a offset $XX quarter. reported

credit operational of To cycle update growth footprint In to the fiscal better and of general, on our is capture global our key push success couple a controls, effective expense XXXX of times. working in opportunities, our utilization capital our result our shorten discipline, ratios. of

both X.Xx compared ratio which leverage progress the to X.Xx year-end at with year. improved pleased continued our are in total to We last

improved our also, ratio And coverage which last year. interest X.Xx with X.Xx to compared to

results later partially of year organization. anticipated increased benefits additional in certain to across top reflect year, business. continued fiscal Asia pressure We of our in from progress value-added growth the in for line El margin the volumes some expect We offset with Nino and full XXXX business year and by Africa

$XXX For for for sales in $XXX year, the the our of adjusted and to the full range is range guidance billion in to of $X.X EBITDA million. million $X.X billion

turn remarks. will I closing back for Pieter And to you. Thank

J. Sikkel

fiscal and we forward Flavia. was Fiscal into XXXX. for expect to year XXXX you, our carry pivotal Thank Pyxus, a momentum

to ability and well market make confident navigate environment. results, El continued in Nino we to We our the solid progress post are prepared and are

it our challenges, have and pattern navigate presents El of deep experience is a teams with a will level While cyclical confidence. that weather handling Nino

capital to number as structure. as costs make a strategic a the expect balanced well including continued across of more We progress reduction areas, of our buying

simultaneously past the over And increasingly and well results flow we and in questions. can and years our several Thank this move our I As demonstrated teams goals growth, cash as the years positioned deliver ahead. initiatives forward leave our on achieve take to short-term have now past believe ready to that we're you. operator, year, show, profitability us

Operator

with Reddy go Instructions] first [Operator We'll BNP Paribas. to Chris

Chris Reddy

a quarter. of insight you bit Great demand and just us supply into the equation. give Could little

We as would what pricing year the you dynamics have the for imply? now forward that and well do as going expect

J. Sikkel

Yes.

all at all and definitely we in in is stronger think varities and can much supply pretty I we deal. than point geographies demand time see this in definitely which

We that's this are facing crop America, reduced situation. year, South the in some -- in particularly sizes exacerbating

inflationary that to we're for year. leading costs highly product the this terms of that's acquiring of purchasing in the pretty And

seeing we're as forward. increases pricing are going we So

extraordinarily demand is. when which that Our how really levels through sizes see And expecting a fiscal into uncommitted were we some when crop is are start of key show -- demand, we we strong you low, in year but to really fiscal that not factor 'XX to recover. only and year see 'XX, continuing fact,

Operator

next we'll with go Bruce to [Operator Northeast Investors. Monrad Instructions]

Bruce Monrad

A questions buyback. of on the debt couple

if and I a taxes gains to see, paid been let's right? there on have that got paid So is that be

Flavia Landsberg

the gains. on pretty Yes. then exchange taxes, it's it's we Sticking calculated, the small elevate an taxes base. in did Remember, and

to specifically expect . taxes we So buyback very minimal

Bruce Monrad

Right.

you So on reported too? or go the accretion discount it's can the reported that And market discount. the Is of your or put the OID of so your the we see OID because that, a there away interest -- market does you from also number it? -- -- right, would expense interest would then off that from So that expense.

Flavia Landsberg

Yes.

X debt. to long-term when then on savings this $XXX long-term the million the whole have million, $XX.X finish to be So What's the we XX% , tax that important deleveraging is debt let -- the right? a But the achievement. it's that's It's to related debt. long-term going thing, the a a is savings on going me will thing things, have separate more the up about about an on we incredible be to the savings is related company almost deleveraging of --

Bruce Monrad

by right? Okay. lines, certain And it other obviously, you funded on though, drawing

Flavia Landsberg

No.

went million inventory, thing lines completely do between inventory. the long-term going $XXX seasonal the up that's debt. we linkages look that's we this the and basically inventory see lines one levels, to the different deal seasonal see Related is -- how up And seasonal at the use we if then how you about seasonal lines. is to lines seasonal with XXX, and buy the lines inventory One we with thing. what you and So our in

Bruce Monrad

Okay.

there it customer are times Okay. And release? fees And the customary you what the X what's of purchase? expenses . the press and were What to the magnitude? in related order repeated

Flavia Landsberg

] the Can question? should [ your I you understand question? repeat

Bruce Monrad

And buybacks, the with debt customary you're release? were what -- referenced what are you was that magnitude? that in press the and the the expenses Well, associated fees

Flavia Landsberg

I that. I have sure. on am get back to to not you

J. Sikkel

fees, minimal can in up-to-date the about. transaction interest basic what time Yes, relatively Yes, I up paying the obviously and were purchase. just you're costs transaction, the talking see of customary the they until

Flavia Landsberg

fee brokerage no And either.

J. Sikkel

fees. extraordinary no Yes,

Bruce Monrad

last one. just As

you Can color if back growth. a to go March could you that over March inventory on just more? add little the So year-over-year, bit

J. Sikkel

Yes.

there. it's a factor twin I think

cost. started in was crop the at higher size lower tobacco the earlier seasons Firstly, than Brazil, with prior acquired market early in a and

of half customers. been half a about represents increase. boat the the that of other shipped and on majority of to the end quarter, put And And inventory missed committed actually really vast that So just a which the as that's well. positive the is already actually, has

the really, So how items really that X that that's compose inventory different increase.

Operator

next Intermarket. go with Joseph to Meister We'll Instructions] [Operator Von

Joseph Von Meister

engaged refi -- to you are structure? is, capital help question have My your you investment you banker

J. Sikkel

think appropriate on and clearly, the Yes. order the us. the constantly as time opportunities is future. team engage This And to Look, continue discussing. focused Board move very for management help those is will up to our us at our right we're capital we we I results in the and the structure, And that improve advisers obviously, open forward. something

Joseph Von Meister

improved leverage, your over point Xx credit profile than less the sharply very basis spread. high is with XXX But

several on of paying your debt. You're tranches

like be execute should you in something future. relatively on focus could and that that it near So seems the

Flavia Landsberg

Absolutely.

options looking the I we also that use see seasonal lines. to the it -- near to for, the the Not our for lower objective, the and profile, profile think we're And tremendously, opportunities only debt, there's and but credit on our that's improved cost. opportunities long-term future. on is that

Operator

any turn [Operator like call. remarks. Instructions] the question-and-answer the Pieter today's Sikkel back would conclude does I closing to for call portion This of to over

J. Sikkel

for us morning. this Yes. you, joining this everybody, for Thank meeting

the extreme weather we Brazil, would acknowledge close, we recent Sul had to on impact I obviously significant people have Grande in in as which Rio has do really and the area communities of well Before like an operations. that Southern

ground relief simultaneously but the farmers there. our maintain I and extraordinary really efforts to on providing contracted local the continuity following both for would teams floods, their like to commend affected to also our colleagues, communities business there

to committed will as well-being company to Our supporting those remains prioritize devastating this the of continue event. and it region the impacted transcends

you thank very everybody, look So forward much, earnings talking next call. you and to at to our

Operator

This your call. does you conclude today's for participation. Thank

You may now disconnect.

Pyxus International (PYYX) 6 Jun 242024 Q4 Earnings call transcript