The WhiteWave Foods Company (WWAV, Financial) is a leading consumer packaged food and beverage company that manufactures, markets, distributes and sells branded plant-based foods and beverages, coffee creamers and beverages, premium dairy products and organic produce throughout North America and Europe. The company also holds a 49% ownership interest in a joint venture that manufactures, markets, distributes and sells branded plant-based beverages in China.
The company's widely recognized, leading brands distributed in North America include Silk, So Delicious and Vega plant-based foods and beverages, International Delight and Land O'Lakes coffee creamers and beverages, Horizon Organic and Wallaby Organic premium dairy products and Earthbound Farm organic salads, fruits and vegetables. Its popular plant-based foods and beverages brands in Europe include Alpro and Provamel, and its plant-based beverages in China are sold under the Silk ZhiPuMoFang brand.
WhiteWave Foods reported record third-quarter results and strong growth momentum. The company’s market-leading brands and industry-leading innovation continue to drive strong organic growth across all businesses resulting in 11% adjusted organic constant currency net sales growth in the quarter. It also continued to execute strategic initiatives by closing on Vega and Wallaby acquisitions, and strategically modified credit facility to support continued growth plans. The company delivered another quarter of double-digit top and bottom line growth resulting from strong sales across all platforms. It also strengthened the balance sheet by increasing and extending senior credit facilities.
Strong third quarter
Adjusted diluted earnings per share were 33 cents, excluding operating costs associated with its China joint venture. Including joint venture costs, WhiteWave reported third quarter 2015 adjusted diluted earnings per share of 31 cents.
Adjusted net sales for third quarter 2015 were $1.0 billion, which marked a 17% increase from net sales of $857 million during the prior year quarter. On a constant currency basis, adjusted net sales increased 20% in third quarter 2015 over the same period in 2014. Excluding acquisitions, adjusted organic constant currency net sales increased 11% in third quarter 2015 over the same period in 2014.
Adjusted operating income for third quarter 2015 increased by 25% and was $102 million ($82 million in the prior-year quarter).
Americas Foods & Beverages segment
WhiteWave’s Americas Foods & Beverages segment consists of three platforms: Plant-based Foods and Beverages, Coffee Creamers and Beverages and Premium Dairy. In third quarter 2015, net sales for Americas Foods & Beverages were $723 million, an increase of 23% from the prior-year quarter.
Adjusted operating income for Americas Foods & Beverages increased by 31% and was $89 million during the third quarter 2015.
Europe Foods & Beverages segment
Net sales in the segment increased 20% on a constant currency basis and 4% on a reported basis in third quarter 2015 as compared to the prior-year quarter.
Operating income increased by 39% on a constant currency and reported basis during third quarter 2015.
Management
WhiteWave recently announced that it has appointed Anthony (Tony) J. Magro to its board of directors. Magro brings decades of leadership experience in the investment and corporate advisory services industry to WhiteWave’s board of directors. Magro is a senior adviser of Evercore, an independent investment banking advisory firm where he was senior managing director, Corporate Advisory from 2011 to 2015. Prior to this role, he held various positions with Bank of America Merrill Lynch from 2001 to 2011, including vice chairman of Global Investment Banking from 2009 to 2011 and group head and managing director of Global Investment Banking for Bank of America Securities from 2001 to 2009.
(Source: Company’s website)
Strong attributes of the quarter
- Higher productivity levels.
- Cost curtailment.
- Increased levels of contributions from completed acquisitions.
- Double-digit top- and bottom-line growth.
- Strong sales across all platforms.
Acquisitions
WhiteWave completed the acquisition of Wallaby Yogurt Company Inc., on Aug. 31, 2015, for a purchase price of approximately $125 million in cash. Founded in 1994 and based in American Canyon, California, Wallaby is a leading manufacturer and distributor of organic dairy yogurt products that include Greek and Australian yogurts and Kefir beverages.
WhiteWave completed the acquisition of Vega on Aug. 1, 2015, for a purchase price of approximately $550 million in cash. Based in Vancouver, British Columbia, Vega is a pioneer and leader in plant-based nutritional products.
On a concluding note
WhiteWave is focused on providing consumers with innovative, great-tasting food and beverage choices that meet their increasing desires for nutritious, flavorful, convenient and responsibly produced products. Investors should consider adding this company to their portfolios. It is going to create shareholder returns.
Disclosure: I do not hold any position in the company.
