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Reynolds
🇺🇸 NASDAQ:REYN
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•
Mar 31, 2020

Reynolds Q1 2020 Earnings Report

Reported strong financial results for Q1 2020, exceeding expectations despite COVID-19 challenges, and provided an updated annual outlook for 2020.

Key Takeaways

Reynolds Consumer Products reported a strong start to the year with net revenues of $730 million and earnings per share of $0.14. The company experienced increased demand due to the COVID-19 pandemic, which drove volume increases. The company is managing the business to ensure continued long term earnings growth for shareholders.

Net revenues increased to $730 million, up from $665 million in the prior year period.

Earnings Per Share (EPS) reached $0.14, with an adjusted EPS of $0.30.

Net income increased to $26 million, and Adjusted EBITDA was $135 million.

The company increased its guidance on all profit measures and reduced its Net Debt target for fiscal year 2020.

Total Revenue
$730M
Previous year: $665M
+9.8%
EPS
$0.3
Previous year: $0.11
+172.7%
Adjusted EBITDA
$135M
Previous year: $110M
+22.7%
Gross Profit
$189M
Previous year: $173M
+9.2%
Cash and Equivalents
$200M
Free Cash Flow
-$278M
Previous year: -$111M
+150.5%
Total Assets
$4.59B

Reynolds

Reynolds

Reynolds Revenue by Segment

Forward Guidance

Reynolds Consumer Products updated its fiscal year 2020 guidance due to increased demand related to the COVID-19 pandemic and anticipated benefit from lower interest rates. The company expects COVID-19 operational-related cost increases to offset the impact of the increased demand resulting in its Adjusted EBITDA forecast for Q2 – Q4 2020 remaining in line with its previous guidance.

Positive Outlook

  • Net Income to be in the range of $335 million to $355 million
  • Earnings Per Share to be in the range of $1.60 to $1.69 per share
  • Adjusted EBITDA to be in the range of $695 million to $715 million
  • Adjusted Net Income to be in the range of $388 million to $403 million
  • Adjusted Earnings Per Share to be in the range of $1.85 to $1.92 per share

Challenges Ahead

  • The magnitude and duration of increased demand remains uncertain.
  • The greatest challenge it faces as a result of the pandemic is its ability to maintain the level of supply needed to keep up with the increased demand.
  • COVID-19 related volume increases in 2020 will make it more challenging to show year over year improvement in Adjusted EBITDA in 2021.
  • The current operating environment necessitates additional costs.
  • Net Debt to be in the range of $1.9 billion to $2.1 billion

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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