Lamb Weston Holdings, Inc. (NYSE:LW) Q3 2023 Earnings Call Transcript

Adam Samuelson: Good morning. So, the first question is on Europe and as you can kind of roll that now into the consolidated business. Bernadette, you alluded to the fourth quarter guidance for the business, kind of, reflecting, kind of, learning consistent with that pre-pandemic EUR100 million given our run rate. Do you have the actual trailing 12-months or what the fiscal €˜23 EBITDA would be for the JV on a 100% basis just as a point of reference? And as we think about moving into fiscal €˜24, seem like fiscal €˜23 is above that pre-pandemic run rate, kind of, reasons why, kind of, profitability would — could be lower year-on-year or higher? Just help us think about, kind of, some of the key moving pieces you’re thinking about the European business over the next 12-months?

Bernadette Madarieta: Yes, thanks for the question, Adam. A couple of responses to that, I would say first, as we look at the fourth quarter guidance, that’s what I would take to look at the normalized amount for this year in terms of being that EUR100 million on a run rate basis. And then certainly there’s going to be a number of things as we bring EMEA into our operations that we’re looking forward to having that one phase to the customer, introducing our revenue growth management capabilities and bringing in our supply chain common methodologies and ways of working that we’re looking to work on over time as we integrate this business with ours to bring in more upside as we continue to progress. But it’s not going to happen overnight, it’s going to happen over time. But those are some of the opportunities that we see to be able to continue to grow this business.

Tom Werner: Yes. And I’ll just add, Adam. We have a tremendous management team running that business and they’ve managed it through a tremendous amount of volatility over the last 15 months with all the things that are going on. And we — I’m more confident now with the trajectory of EMEA in that business and the foundation that the management team has put in place and the overall global reach we now have to serve our customers in all the international markets. So we have a lot to do to get that business integrated into one global team. And over time, I’m super confident where the capabilities is going to allow us to really serve our customers in a different manner than we ever have. So it’s a tremendous accomplishment what the team has done with that business. I can’t emphasize that enough. We got a great leadership team over there and I’m excited and looking forward to what we’re going to do as we integrate that business going forward.

Adam Samuelson: All right. That’s helpful color. And then just on the CapEx, which with one quarter left in the year was a pretty sizable, kind of, increase in the outlook even inclusive of the Groningen CapEx at the JV that you are now, kind of, consolidating. Does this change any of the timing around the Argentine, Idaho or Chinese capacity or the things you’re doing in the rest of the network or capabilities around coatings or battering that, kind of, you’re pulling forward. Just help us think about, kind of, magnitude of that CapEx step up? Well, how it’s been, kind of, timing of new capacity and what should we think about as a range for the consolidated CapEx for next year even at a low high level?