# To Our Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NYSE_POST_2021/NYSE_POST_2021.mmd` · pages 3-9_

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To Our Shareholders

Fiscal 2021 was a challenging year as the impact of COVID-19 and public policy reactions caused unusual patterns in consumer demand, labor markets and supply chain efficacy. During fiscal 2021, the value of your shares increased by 28.1%. From the time Post began trading as an independent company in 2012 to year-end, Post's share price has grown at a compounded annual growth rate of 15.7%. While we are proud of the value creation during that time frame, the more recent years, including fiscal 2021, have been operationally challenging, and our business has underperformed its potential. The share price appreciation this year is largely a result of recovery from the decline incurred from the impact of COVID-19 that occurred in our fiscal 2021.

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## OUR
BUSINESSES

Foodservice

![](images/4_0.jpg)

#1

foodservice provider of value-added egg and potato products \( ^{(4)} \) 

## Post Consumer Brands

![](images/4_1.jpg)

#3

ready-to-eat U.S. cereal manufacturer \( ^{(2)} \) 

Refrigerated Retail

![](images/4_2.jpg)

13%

household penetration of Bob Evans branded side dish products \( ^{(5)} \) 

## Weetabix

![](images/4_3.jpg)

16%

value market share in the U.K. \( ^{(3)} \) 

BellRing Brands

![](images/4_4.jpg)

26%

fiscal year 2021 net sales growth

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## Post's Hub and Spoke Ecosystem

An ecosystem with the holding company at the center of each operating company providing strategic oversight, capital allocation and shared corporate services

(%) Post Holdings ownership

![](images/5_0.jpg)

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## "

THROUGHOUT THE YEAR,
BUT MOST ACUTELY IN
THE FOURTH QUARTER,
WE EXPERIENCED
PRESSURE ON OUR
SUPPLY CHAINS THAT
HAVE NO RECENT
PRECEDENT."

## NEVER BREAK THE CHAIN

We realize the song is not about our supply chain, but it served as a useful reminder this year. Our supply chains did not break, but they did bend. Throughout the year, but most acutely in the fourth quarter, we experienced pressure on our supply chains that have no recent precedent. The root cause certainly is traced to the global pandemic, but it has multiple tentacles, including the ongoing management of COVID-19 itself, the logistical disruptions it caused around the world, pent-up consumer demand, public policy response and, most ambiguously, changes in the way we think about the dynamics of work and life balance.
The global pandemic continued to impact demand for our products during fiscal 2021. Recall that last year we saw a substantial increase in demand for food consumed at home and a near collapse in demand for food consumed on-premise. That trend reversed in 2021 as mobility returned closer to pre-pandemic level. In general, demand for at-home consumption products remained above 2019 levels and demand for on-premise consumption remained a bit shy of 2019. We continued to see weakness in certain channels such as travel and lodging, and business cafeterias. Within our at-home consumption businesses, demand remained consistently strong with one notable exception. Value-priced products have seen reduced demand since the pandemic started. In part, this was driven by supply shortages last year. More recently, we believe record consumer liquidity has changed consumer

![](images/6_0.jpg)

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During fiscal 2021, we acquired

4.0M

shares of our common stock for a total of

## $393.6M

behavior in favor of more premium products. We expect these trends to revert to mean during the upcoming year.

## NEVER (?) GOING BACK AGAIN

Since our separation from Ralcorp in 2012, we have operated in a low-inflation environment. There have been periods of certain agricultural commodities having price volatility, but we have not seen widespread inflation. That changed in fiscal 2021. Virtually every input cost saw significant inflation, and we took pricing actions accordingly. The great question of the hour is what historical pattern will we track? Are we in a post-pandemic and stimulus-driven burst of pent-up demand similar to the transitory inflation following World War II? Or are we in the beginning stages of structural inflation more akin to the 1970s? Either way, the current environment requires us to be vigilant on cost and price management. However, how we think about capital allocation is informed by expectations around the long-term cost of capital. We do not have the answer, but we are tracking the question.

## GO YOUR OWN WAY

In 2013, Post acquired Premier Protein for $180 million. At the time, this business had Adjusted EBITDA \( ^{(1)} \)  of 18 million. We believed it was a great

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product and a so-so brand. In 2014, we added Dymatize and PowerBar to the business to create the Active Nutrition segment of Post Holdings.

In October 2019, we formed BellRing Brands ("BellRing") from this segment and sold approximately 29% of the segment to the public. This business has continued to perform remarkably, with sales and Adjusted EBITDA \( ^{(1)} \)  this year of 1.247 billion and 233.9 million, respectively. In August 2021, we announced our intent to fully distribute our remaining interest in BellRing to Post shareholders. We believe this will enable each company to develop its separate capital and operating plans in the most optimal manner and will add liquidity to BellRing shares as they become fully distributed.

## MONEY (CAPITAL ALLOCATION)

Because of challenges related directly and indirectly to COVID-19, Post's business performance has lagged its long-term potential. This has created opportunities to acquire shares at reasonable prices. During fiscal 2021, we acquired 4.0 million shares of our common stock for a total of 393.6 million. In addition, we issued 1.8 billion in principal value of 4.5% senior notes due in September 2031. The proceeds were largely used to redeem our 5.0% senior notes due in August 2026. With these transactions, our bond maturity ladder was extended to 2031 and our first maturities are not until 2027. We were also successful this year in adding some attractive businesses at decent prices. In fiscal 2021,

## Fiscal Year 2021 Acquisitions

![](images/8_0.jpg)

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![](images/9_0.jpg)

we acquired Peter Pan, Egg Beaters, the ready-to-eat cereal business of TreeHouse Foods and Almark Foods. During fiscal 2022, we expect to exit transition services agreements and begin to deliver the resulting synergies.

## SPAC ODDITY

In May 2021, Post created Post Holdings Partnering Corporation, the first consumer-focused, corporate-sponsored SPAC (special purpose acquisition company). In fact, there are only a handful of corporate SPACs in any sector. The SPAC market has had its share of turbulence. However, we believe the structure extends our reach by using creative corporate finance—one of our key capabilities. We anticipate that this activity will generate attractive risk-adjusted return for Post. IN FISCAL 2021, WE ACQUIRED PETER PAN, EGG BEATERS, THE READY-TO-EAT CEREAL BUSINESS OF TREEHOUSE FOODS AND ALMARK FOODS."

We want to close by thanking our colleagues across each of Post's businesses. We are blessed to live in interesting times and to share those times with terrific people. As always, we appreciate your support.

William P. Stiritz
Chairman of the Board

Robert V. Vitale
President and Chief Executive Officer