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Jun 30, 2021
Reynolds Q2 2021 Earnings Report
Second quarter 2021 financial results reported, showing revenue increase but earnings decline due to cost pressures.
Key Takeaways
Reynolds Consumer Products reported a 6% increase in net revenues to $873 million for Q2 2021. However, net income decreased by 29% to $80 million, and Adjusted EBITDA decreased by 23% to $148 million due to material cost increases outpacing price increases.
Net revenues increased by 6% to $873 million compared to Q2 prior year.
Net income decreased by 29% to $80 million.
Adjusted EBITDA decreased by 23% to $148 million.
Earnings Per Share was $0.38, and Adjusted Earnings Per Share was $0.39.
Reynolds
Reynolds
Reynolds Revenue by Segment
Revenue by Segment
Reynolds Cooking & Baking Revenue
CapyFin.comHefty Waste & Storage Revenue
CapyFin.comHefty Tableware Revenue
CapyFin.comPresto Products Revenue
CapyFin.comUnallocated Revenue
CapyFin.com Forward Guidance
The Company continues to expect high single-digit revenue growth for fiscal 2021, underpinned by pricing, at-home consumption, improvements in our Tableware segment as a result of increases in social gatherings, innovation, and retail replenishment.
Positive Outlook
- Two rounds of price increases have been successfully implemented across the Company, and a third round has been announced, to be effective during the third quarter.
- The Company is expecting high single-digit revenue growth in its third quarter, reflecting recently implemented price increases and volume anticipated to be similar to Q3 2020 levels.
- Premium innovations are driving improved mix
- Expanded Reyvolution cost savings to further offset cost pressures
- Expects a substantial sequential improvement in profitability in the fourth quarter on the basis of announced pricing and an anticipated easing of commodity rates.
Challenges Ahead
- The Company is facing estimated 2021 cost pressures in excess of $400 million, driven primarily by increases in resin and aluminum.
- The Company expects short-term earnings pressure in the third quarter, primarily driven by increases in resin and aluminum costs in excess of price increases going into effect during the third quarter.
- Lowering expected 2021 earnings to reflect the timing of pricing by comparison to cost increases.
- Volume decline was primarily due to lapping of last year’s elevated consumption for Reynolds Cooking & Baking
- Volume decline was primarily due to the lapping of pantry loading at the onset of COVID-19 for Presto Products
Revenue & Expenses
Visualization of income flow from segment revenue to net income