Tear Sheet: Primo Water Corp.

Primo utilized the $575 million proceeds from the sale of its European business to repay $132 million of outstanding balance on its revolving credit facility. It ended the year with improved S&P Global Ratings-adjusted leverage of 3.6x compared with 4.0x in the prior year. We believe improving profitability prospects will further strengthen its S&P Global Ratings-adjusted leverage to the low-3x area in fiscal 2024, improving incrementally to high-2x area over future years. Furthermore, we anticipate its S&P Global ratings-adjusted EBITDA margin will increase about 140 basis points compared with 22.5% in 2023, which will underpin healthy reported free cash flow generation of $80 million-$100 million. We believe this, along with $238.3 million availability under the revolving credit facility, will help

...Foreign currency issuer credit rating B+/Positive/-- Local currency issuer credit rating B+/Positive/-- Business risk Weak Country risk Very Low Industry risk Low Competitive position Weak Financial risk Significant Cash flow/leverage Significant Anchor ##- Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Adequate (no impact) Management and governance Moderately Negative (no impact) Comparable rating analysis Negative (-1 notch) Stand-alone credit profile b+...

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