POST HOLDINGS, INC. 2014 ANNUAL REPORT Extending Our Reach MORE CUSTOMERS. MORE CHOICES. MORE PLACES. Net Sales Adjusted EBITDA(1) Operating Cash Flow (in millions) (in millions) (in millions) $3,000 $400 $200 183.1 2,411.1 344.5 144.0 $300 $150 $2,000 119.2 214.6 216.7 $200 $100 958.9 1,034.1 $1,000 $100 $50 2012 2013 2014 2012 2013 2014 2012 2013 2014 $0 $0 $0 Net Sales by Category 53% 35% MICHAEL FOODS 12% CONSUMER BRANDS GROUP POTATOES AND GROUP CHEESE 23% POST FOODS READY-TO-EAT CEREAL 12% PROTEIN BARS, POWDERS AND 35%EGG PRODUCTS SHAKES 12% 1 100%READY-TO-EAT CEREAL PRIVATE LABEL Fiscal year ended 9/30/12. PEANUT BUTTER 6% AND GRANOLA 2 Last twelve months ended PASTA 12% 9/30/14; proforma to include all closed acquisitions PRIVATE LABEL GROUP as of 12/1/14 including both pre- and post-acquisition $959mm1 $4.3bn2 periods. 2012 2014 Financial Highlights (in millions except per share data) 2012 2013 2014 NET SALES $ 958.9 $ 1,034.1 $ 2,411.1 GROSS PROFIT 428.9 424.9 621.2 OPERATING PROFIT (LOSS) 139.1 107.8 (207.7) NET EARNINGS (LOSS) AVAILABLE TO COMMON STOCKHOLDERS 49.9 9.8 (358.6) DILUTED NET EARNINGS (LOSS) PER COMMON SHARE $ 1.45 $ 0.30 $ (9.03) OPERATING CASH FLOW 144.0 119.2 183.1 ADJUSTED EBITDA(1) 214.6 216.7 344.5 ADJUSTED NET EARNINGS (LOSS) AVAILABLE TO COMMON STOCKHOLDERS(1) 52.7 31.1 (16.6) ADJUSTED DILUTED NET EARNINGS (LOSS) PER COMMON SHARE(1) $ 1.53 $ 0.94 $ (0.42) Post Holdings, Inc. 2014 Annual Report 1 Post has grown from a single operating unit to a diversified consumer packaged goods holding company competing in multiple categories with dynamic growth prospects and a strong cash flow model. TO OUR SHAREHOLDERS: In many ways, fiscal 2014 marked the completion of the manner of channels of distribution, product form, the first chapter of Post’s renewal. From the middle of fis- package, macronutrient and consumption location/porta- cal 2013 through fiscal 2014, Post recreated itself. When bility. Our M&A focus has been in pursuit of key trends in we separated from Ralcorp in 2012, Post was 100% a consumer behavior – less processed food offerings, higher branded ready-to-eat (RTE) cereal company with no protein and increased portability – all while continuing to diversification and little opportunity for organic growth deliver value to the consumer. in a challenged category. During fiscal 2014, we com- Today, approximately 25% of revenue comes from pleted four acquisitions and announced two additional the RTE cereal category with the balance of our revenue acquisitions, which were completed in fiscal 2015. The coming from various categories with growth rates in low total capital committed to these transactions was approx- to mid-single digits. While our reconstruction has not imately $3.9 billion. Needless to say, fiscal 2014 was an been without operating challenges, we are very pleased extraordinarily busy year. with the portfolio we have. With organization changes The portfolio of assets we have acquired positions made at the beginning of fiscal 2015, we are now fully Post for the future by building a diversified business char- focused on executing behind three platforms – Consumer acterized not only by reliable free cash flow, but with Brands, Michael Foods and Private Label – each with sustainable growth, modest required capital investment growth potential. and broad diversification. That diversification comes in Our reorganization into three platforms was driven by four objectives: • To maximize business unit autonomy with respect to customer and consumer facing activities; • To leverage scale across the organization without com- promising decision-making effectiveness; O. • To share valuable assets across the businesses, including brands, plants, human capital or knowledge resources; NMARKET SHARE IN1 EGG WHITES AND and REFRIGERATED POTATO PRODUCTS • To overlay a reporting, forecasting and governance model that provides the ability to maintain an effective Michael Foods holds leading market control environment and to allocate capital to its positions in value-added egg products best use. and refrigerated potato products in With this reorganization, we believe Post’s portfolio the foodservice and retail channels. is well positioned to execute against its growth opportuni- ties and to capitalize on acquisition opportunities as Source: Nielsen US-Grocery for the 52 weeks ended 10/11/14 and management estimates. they arise. Post Holdings, Inc. 2014 Annual Report 2 CONSUMER BRANDS GROUP the Michael Foods management team. We believe this will Consumer Brands, led by Jim Holbrook, is comprised of lead to other opportunities to cross-sell products currently the Post Foods cereal business plus the acquired active in the Post Holdings portfolio across multiple channels. nutrition brands. Post Foods, the third largest cereal brand, continues to drive strong reliable free cash flow. The active PRIVATE LABEL GROUP nutrition brands include PowerBar, Premier Protein, Private Label is comprised of the Golden Boy and the Dymatize and Supreme Protein. PowerBar, acquired in recently acquired American Blanching Company peanut October 2014, is an iconic brand in the active nutrition and other nut butters, fruit and nut businesses, as well as industry with a high awareness among bar users. Premier the cereal, granola and snacks businesses of Attune Foods. Protein, acquired in September 2013, markets ready-to- drink protein shakes and protein bars. Dymatize and Supreme Protein were acquired in February 2014. Dymatize markets protein powders and supplements to elite athletes through specialty retail channels and online. Supreme Protein markets protein for everyday bars in traditional retail channels. $4.3bn2014 ANNUALIZED NET SALES1 Post Foods has an outstanding sales force and mar- keting organization. By combining the active nutrition Through acquisitions, Post grew brands under a common organization with Post Foods, we are best able to leverage the retail talents and assets of the dramatically between 2012 and combined organization in a manner that ensures the high- 2014 with net sales growing ~4.5x est probability of success in the most efficient manner. With to an annualized $4.3 billion. the exception of Dymatize, these brands are sold through 1 Last twelve months ended 9/30/14; annualized to include all closed acquisitions as of the same channels of distribution as the Post Foods RTE 12/1/14 including both pre- and post-acquisition periods. cereal brands. As a result of Dymatize’s separate channel structure, it is being managed on a stand-alone basis within Consumer Brands. MICHAEL FOODS GROUP Golden Boy, acquired in February 2014, is a North The Michael Foods Group, led by Jim Dwyer, is comprised American manufacturer of private label peanut and other of Michael Foods, acquired in June 2014, and Dakota nut butters, as well as dried fruit and baking and snacking Growers Pasta Company, acquired in January 2014. nuts. Golden Boy is a key supplier to the U.S. and Cana- Michael Foods is a leading producer of value-added egg dian retail and foodservice channels and participates in products, refrigerated potato products and cheese and the rapidly growing natural and organic packaged foods dairy products, operating in the foodservice, retail and category. American Blanching, acquired in November food ingredient channels. We estimate Michael Foods 2014, is a manufacturer of peanut butter for national holds the number one position in value-added eggs in the brands, private label retail and industrial markets and pro- foodservice channel. Dakota is a leading provider of pasta vides peanut blanching, granulation and roasting services products to the foodservice and ingredient industry and for the commercial peanut industry. produces a number of private label pasta products. Attune Foods was acquired in fiscal 2013. It has a pri- In acquiring Michael Foods, we now have a strong marily private label focus and competes in the natural and position in the foodservice and food ingredient channels. organic channel. The combination of Dakota and Michael Foods will test This group combines predominately private label our premise that Michael Foods can become a broadline products, sold in similar channels across both conven- provider of multiple categories into the foodservice and tional and natural channel retailers, further diversifying ingredient channels. We have a great deal of confidence in Post’s product offerings and channels of sale. Post Holdings, Inc. 2014 Annual Report 3 Consumer Brands Group POST FOODS PREMIER NUTRITION DYMATIZE POWERBAR The Consumer Brands Group spans from center-of-the-store with the Post Foods cereal brands to active nutrition and offers a broad range of choices to meet the taste and nutritional needs of a variety of consumers, including those on-the-go and those seeking more specialty solutions. Michael Foods Group Private Label Group MICHAEL FOODS DAKOTA GROWERS GOLDEN BOY ATTUNE FOODS The Michael Foods Group supplies value-added egg The Private Label Group manufactures private label products, refrigerated potato products, cheese and cereal, granola, peanut butter and other nut butters, other dairy case products and dry pasta products to dried fruits and baking and snacking nuts and the private label retail, foodservice and ingredient distributes to conventional and natural retailers. channels and markets branded retail products. Post Holdings, Inc. 2014 Annual Report 4 Dymatize too fell short of expectations – in its case by a large margin. Our diligence failed to identify certain Post’s diversified portfolio addresses operating deficiencies which constrained our ability to key trends in consumer behavior, meet otherwise strong demand for the product. These which include: deficiencies are being addressed, but we expect the busi- ness to underperform until the end of fiscal 2015. LESS PROCESSED For fiscal 2014, Post Holdings had net sales and INCREASED PORTABILITY Adjusted EBITDA(1) of $2.4 billion and $344.5 million, HIGHER PROTEIN respectively.