WH Group (288) Q3 2024 earnings summary

Executive summary

• Revenue for the first nine months of 2024 was $18.87 billion, down 3.2% year-over-year, while EBITDA rose 38.9% to $2.25 billion and operating profit increased 71.4% to $1.79 billion.

• Profit attributable to owners surged 90% to $1.08 billion.

• Packaged meats accounted for 52.5% of revenue and 93.8% of operating profit, remaining the core business.

Financial highlights

• Packaged meats sales volume declined 4.4% year-over-year; pork volume fell 7.6%.

• Basic EPS rose 90% to 8.43 US cents.

• U.S. and Mexico contributed 52.5% of revenue, China 33%, and Europe 14.5%.

• China operating profit was $729 million (down 7.5%), North America $841 million (up 589%), and Europe $225 million (up 64.2%).

Outlook and guidance

• China hog prices expected to decline in Q4 2024 and trend lower in 2025, with less volatility than 2024.

• Packaged meats volume in China projected to increase significantly in Q4 2024 due to a low base and market measures.

• U.S. hog production profit in Q4 2024 anticipated to be better than last year, with seasonal trends expected in 2025.

• U.S. packaged meats volume growth expected to be sluggish in Q4, but margins to be maintained through pricing and mix.

• Europe aims to further improve packaged meats profitability and pursue M&A in packaged meats and poultry.

• Plans to consolidate global resources, adjust pricing, improve product mix, and control costs to maintain market leadership.

• China operations will focus on channel transformation, digital upgrades, and expanding sales networks.

• U.S. and Mexico to optimize business structure, reduce hog production, and focus on packaged meats growth.

• Europe to enhance profitability through product mix optimization, channel innovation, and integrating new businesses.

• U.S. pork segment expected to continue positive momentum due to favorable market dynamics and operational reforms.

• Core packaged meats business anticipated to remain strong and resilient.

• Pork business financial results projected to grow significantly for the year.

• Company aims for a good recovery in overall profitability in 2024 and steady future development.