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1 March 24, 2020 Second Quarter 2020 Results August 6, 2020
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August 6, 2020 · Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast

Sep 03, 2020

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Page 1: August 6, 2020 · Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast

1March 24, 2020

Second Quarter 2020 ResultsAugust 6, 2020

Page 2: August 6, 2020 · Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast

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Cautionary Statements

Safe Harbor StatementThis presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the SecuritiesExchange Act of 1934 and applicable Canadian securities laws conveying management's expectations as to the future based on plans, estimates andprojections at the time the Company makes the statements. Forward-looking statements involve inherent risks and uncertainties and the Company cautionsyou that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Theforward-looking statements in this presentation include but are not limited to statements regarding execution of the Company's strategic priorities and theCompany’s outlook for Q3 2020. The forward-looking statements are based on assumptions regarding management’s current plans and estimates. Factorsthat could cause actual results to differ materially from those described in this presentation include, among others: risks relating to any unforeseen changesto or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects;the effect of economic, competitive, legal, governmental and technological factors on Primo’s business; and the impact of national, regional and globalevents on our business, including the recent COVID-19 outbreak. The foregoing list of factors is not exhaustive. Readers are cautioned not to place unduereliance on these forward-looking statements, which speak only as of the date hereof. Readers are urged to carefully review and consider the variousdisclosures, including but not limited to risk factors contained in the Company's Annual Report in the Form 10-K and its quarterly reports on Form 10-Q, aswell as other periodic reports filed with the securities commissions. The Company does not, except as expressly required by applicable law, undertake toupdate or revise any of these statements in light of new information or future events.

Non-GAAP MeasuresThe Company routinely supplements its reporting of GAAP measures by utilizing certain non-GAAP measures to separate the impact of certain items from itsunderlying business results. Since the Company uses these non-GAAP measures in the management of its business, management believes this supplementalinformation is useful to investors for their independent evaluation and understanding of Primo’s business. The non-GAAP financial measures described aboveare in addition to, and not meant to be considered superior to, or a substitute for, the Company's financial statements prepared in accordance with GAAP. Inaddition, the non-GAAP financial measures included in this presentation reflect management's judgment of particular items, and may be different from, andtherefore may not be comparable to, similarly titled measures reported by other companies. With respect to our expectations of performance of Primo,reconciliations of Q3 2020 estimated adjusted EBITDA are not available, as we are unable to quantify certain amounts that would be required to be includedin the relevant GAAP measures without unreasonable effort. We expect that the unavailable reconciling items, which primarily include taxes, interest coststhat would occur if the company issued debt, and costs to capture synergies, could significantly affect our financial results. These items depend on highlyvariable factors and any such reconciliations would imply a degree of precision that would be confusing or misleading to investors. We expect the variabilityof these factors to have a significant, and potentially unpredictable, impact on our future GAAP financial results. A copy of this presentation may be found onwww.primowatercorp.com. Please see Appendix to this presentation and the exhibits to the earnings release for the second quarter ended June 27, 2020 forreconciliations to the most directly comparable GAAP measures.

Page 3: August 6, 2020 · Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast

Agenda

COVID-19 Update

2020 Key Focus Area Updates

Q2 & YTD 2020 Consolidated Results

Q2 Reporting Segment Results

Q3 2020 Outlook

Long-Term View

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Q2 and YTD 2020 Consolidated Results – Continuing Operations

Source: Primo management.*See appendix for non-GAAP reconciliations

($ in millions) Q2 2020 Q2 2019 Change YTD 2020 YTD 2019 Change

Net Revenue, adjusted* $456.8 $455.6 +0.3% $931.0 $876.1 +6.3%

Adjusted EBITDA* $82.5 $74.7 +10.4% $152.9 $128.4 +19.1%

Adjusted EBITDA Margin* 18.1% 16.4% +170bps 16.4% 14.7% +170bps

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Reaching consumers with our product offerings whenever, wherever and however they want

Source: Primo Management

2020 Key Focus AreasUpdate on Customer Experience Initiatives

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2020 Key Focus AreasUpdate on Customer Experience Initiatives

U.S. Nationwide Rollout of No Contact / Work From Home Campaign• Website Rotator• Landing page• Email messaging

• Promotional• Triggered

• Social Media ads• Digital banner ads

Website rotator

Landing Page

Emails

Banner ads

Social media ads

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Sustainability is at the Heart of our Operations

• One of our 5-gallon bottles can be sanitized and re-used up to 50 times

before being recycled, which saves about 1,500 plastic 500-ml water

bottles

• European business has been carbon-neutral for eight consecutive years,

and our European offices are entirely powered by renewable energy

• We have shifted our new route truck purchasing to propane powered

trucks to reduce carbon emissions

2020 Key Focus AreasSustainability Leadership

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8Source: Primo Management

Note: Amounts may not add due to rounding

Q2 Consolidated Results – Continuing OperationsNet Revenue Analysis

Q2 2019 WaterDirect / Water

Exchange

Other Water

WaterDispensers

FX Q2 2020 WaterRefill / Water

Filtration

$428M

$474M

All Other

$456M $457M

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Source: Primo Management(1) Relates to the Cott Beverages LLC business, which was sold on February 8, 2019.

Note: Amounts may not add due to rounding

YTD Consolidated Results – Continuing OperationsNet Revenue Analysis

YTD 2019 WaterDirect / Water

Exchange

Other Water

WaterDispensers

FX YTD 2020 WaterRefill / Water

Filtration

All Other Divestiture(1)

$883M

$931M

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10Source: Primo Management

Note: Amounts may not add due to rounding

North America – Reporting Segment PerformanceSecond Quarter Net Revenue Analysis

Q2 2019 WaterDirect / Water

Exchange

Other WaterWaterDispensers

FX Q2 2020 WaterRefill / Water

Filtration

$428M

$474M

$324M

$364M

Other

$324M

$364M

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11Source: Primo Management

Note: Amounts may not add due to rounding

Rest of World (ROW) – Reporting Segment PerformanceSecond Quarter Net Revenue Analysis

Q2 2019 WaterDirect

WaterFiltration

Other Water FX Q2 2020

$132M

$93M

Other

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Third Quarter 2020 Outlook

Source: Primo management.

Q3 GuidanceRange

($ in millions) Low HighRevenue $480 $500

Adjusted EBITDA $100 $105

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13Source: Primo Management Estimates.

Pro-Forma Primo Water Corporation Long-Term Growth AlgorithmPrior to COVID-19 Pandemic

Pro Forma Financial Drivers

Revenue

Total Revenue Growth 5%

Water Direct / Exchange : 4% to 5% Water Filtration / Refill: 5% to 7% Water Dispensers: 8%

EBITDA Organic: $12M to $15M per year Accretive tuck-ins: $5M to $10M per year

EBITDA 20 to 30bps expansion per year

Synergies $35M through year 2022

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2020 Key Focus Areas

Prioritize the health and safety of our associates and customers

Customer experience initiatives

Increase penetration of the European residential base

Accelerate extension of our Water Refill, Water Exchange and Water Dispenser 4R model to Europe

Cost containment efforts to enhance margins

Free Cash Flow management, staple dividend, and compliance with our credit agreements and covenants

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Appendix

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Adjusted Revenue and Pro forma Adjusted RevenueNon-GAAP Reconciliation - Unaudited

Source: Primo Management

(a) Solely attributable to the Legacy Primo business for the three and six months ended June 30, 2019.(b) Includes elimination of DS Services sales to Legacy Primo as well as the removal of Legacy Primo's divested Ice business.

(in millions of U.S. dollars) For the Three Months Ended For the Six Months Ended

June 27, 2020 June 29, 2019 Change $ Change % June 27, 2020 June 29, 2019 Change $ Change %

Revenue, net as reported $ 456.8 $ 455.6 $ 1.2 0.3% $ 931.0 $ 883.3 $ 47.7 5.4%

(-) Divested Cott Beverages LLC business - - - n.a - (7.2) 7.2 -100%

Adjusted revenue $ 456.8 $ 455.6 $ 1.2 0.3% $ 931.0 $ 876.1 $ 54.9 6.3%

(+) Legacy Primo (a) - 79.3 (79.3) - 149.3 (149.3)

(-) Eliminations (b) - (13.4) 13.4 - (25.0) 25.0

(-) Legacy Primo's revenue contribution for the two months ended February 28, 2019 - - - - (44.1) 44.1

(+) Impact of reversing elimination adjustments for the two months ended February 28, 2019 - - - - 6.9 (6.9)

Pro forma adjusted revenue $ 456.8 $ 521.5 $ (64.7) -12.4% $ 931.0 $ 963.2 $ (32.2) -3.3%

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Adjusted and Pro forma Adjusted Revenue by Reporting SegmentNon-GAAP Reconciliation - Unaudited

Source: Primo Management

(a) During the second quarter of 2020, we implemented a restructuring program intended to optimize synergies from the Company’s transition to a pure-play water company following the Legacy Primo Acquisition and, as a result, reorganized into two reporting segments: North America (which includes our DS Services of America, Inc., Aquaterra Corporation, Mountain Valley Spring Company and Legacy Primo businesses) and Rest of World (which includes our Eden Springs Nederland B.V., Aimia Foods Limited, Decantae Mineral Water Limited and John Farrer & Company Limited businesses). Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast to reflect these changes for all periods presented.(b) Solely attributable to the Legacy Primo business for the three and six months ended June 30, 2019.(c) Includes elimination of DS Services sales to Legacy Primo as well as the removal of Legacy Primo's divested Ice business.

(in millions of U.S. dollars) For the Three Months Ended June 27, 2020 For the Three Months Ended June 29, 2019

North America Rest of World All Other Total North America Rest of World All Other Total

Net Revenue, as reported (a) $ 363.9 $ 92.9 $ - $ 456.8 $ 323.5 $ 132.1 $ - $ 455.6

(+) Legacy Primo (b) - - - - 79.3 - - 79.3(-) Eliminations (c) - - - - (13.4) - - (13.4)Pro forma adjusted revenue, net $ 363.9 $ 92.9 $ - $ 456.8 $ 389.4 $ 132.1 $ - $ 521.5

For the Six Months Ended June 27, 2020 For the Six Months Ended June 29, 2019North America Rest of World All Other Total North America Rest of World All Other Total

Net Revenue, as reported (a) $ 714.6 $ 216.4 $ - $ 931.0 $ 621.6 $ 254.5 $ 7.2 $ 883.3

(-) Divested Cott Beverages LLC business - - - - - - (7.2) (7.2)(+) Legacy Primo (b) - - - - 149.3 - - 149.3(-) Eliminations (c) - - - - (25.0) - - (25.0)(-) Legacy Primo's revenue contribution for the two months ended February 28, 2019 - - - - (44.1) - - (44.1)(+) Impact of reversing elimination adjustments for the two months ended February 28, 2019 - - - - 6.9 - - 6.9Pro forma adjusted revenue, net $ 714.6 $ 216.4 $ - $ 931.0 $ 708.7 $ 254.5 $ - $ 963.2

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(a) Includes $0.2 million and $0.4 million of share-based compensation costs for the three and six months ended June 29, 2019 related to awards granted in connection with the acquisition of our Eden business.(b) Revenue excluding divested operations of the Cott Beverages LLC business, which was sold on February 8, 2019.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)Non-GAAP Reconciliation - Unaudited

Source: Primo Management

(in millions of U.S. dollars) For the Three Months Ended For the Six Months EndedJune 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Net (loss) income from continuing operations $ (131.7) $ 2.7 $ (159.1) $ (20.0)Interest expense, net 20.7 18.8 40.4 38.1Income tax (benefit) expense (1.4) 2.2 (4.7) 0.8Depreciation and amortization 52.8 42.9 97.8 82.6EBITDA $ (59.6) $ 66.6 $ (25.6) $ 101.5

Acquisition and integration costs (a) 4.3 2.7 25.1 7.4Share-based compensation costs 4.9 3.0 7.3 6.1COVID-19 costs 15.4 - 16.8 -Goodwill and intangible asset impairment charges 115.2 - 115.2 -Foreign exchange and other (gains) losses, net (1.1) (0.7) 5.2 0.3Loss on disposal of property, plant and equipment, net 2.5 1.7 3.9 3.6(Gain) loss on sale of business (0.6) 0.6 (0.6) 6.0Other adjustments, net 1.5 0.8 5.6 3.5Adjusted EBITDA $ 82.5 $ 74.7 $ 152.9 $ 128.4

Revenue, adjusted (b) $ 456.8 $ 455.6 $ 931.0 $ 876.1

Adjusted EBITDA Margin% 18.1% 16.4% 16.4% 14.7%

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(a) Results solely attributable to the Legacy Primo business.

Legacy Primo – Pro forma Adjusted EBITDANon-GAAP Reconciliation - Unaudited

Source: Primo Management

(in millions of U.S. dollars) June 30, 2019(a)Three Months

EndedSix Months

Ended

Net income (loss) $ 0.9 $ (0.4)Interest expense, net 2.7 5.3Income tax (benefit) expense - -Depreciation and amortization 7.3 13.8EBITDA $ 10.9 $ 18.7

Non-cash, stock-based compensation expense 1.0 2.5Acquisition and integration costs and other items, net 1.2 1.4Impairment charges and other 0.3 0.5Adjusted EBITDA - January 1, 2019 to June 30, 2019 $ 13.4 $ 23.1

(-) Adjusted EBITDA for the two months ended February 29, 2019 - (5.5)

Adjusted EBITDA - March 1, 2019 to June 30, 2019 $ 13.4 $ 17.6

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(a) Results solely attributable to the Legacy Primo business.

Pro forma Adjusted EBITDANon-GAAP Reconciliation - Unaudited

Source: Primo Management

(in millions of U.S. dollars) For the Three Months Ended For the Six Months Ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Continuing operations adjusted EBITDA $ 82.5 $ 74.7 $ 152.9 $ 128.4

(+) Legacy Primo adjusted EBITDA - March 1, 2019 to June 30, 2019 (a) - 13.4 - 17.6

Pro forma adjusted EBITDA $ 82.5 $ 88.1 $ 152.9 $ 146.0

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Adjusted EBITDA by Reporting Segment*Non-GAAP Reconciliation - Unaudited

(a) EBITDA by reporting segment is derived from operating income as operating income is the performance measure regularly reviewed by the chief operating decision maker when evaluating performance of our reportable segments.

Source: Primo Management*During the second quarter of 2020, we implemented a restructuring program intended to optimize synergies from the Company’s transition to a pure-play water company following the Legacy Primo Acquisition and, as a result, reorganized into two reporting segments: North America (which includes our DS Services of America, Inc., Aquaterra Corporation, Mountain Valley Spring Company and Legacy Primo businesses) and Rest of World (which includes our Eden Springs Nederland B.V., Aimia Foods Limited, Decantae Mineral Water Limited and John Farrer & Company Limited businesses). Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast to reflect these changes for all periods presented.

For the Three Months Ended June 27, 2020 For the Three Months Ended June 29, 2019(in millions of U.S. dollars) North America Rest of World All Other Total North America Rest of World All Other Total

Operating income (loss) $ 24.4 $ (126.6) $ (11.8) $ (114.0) $ 21.9 9.0 (9.4) $ 21.5 Other (income) expense, net (0.4) (0.6) (0.6) (1.6) (0.9) (0.3) (1.0) (2.2)Depreciation and amortization 38.0 14.3 0.5 52.8 29.1 13.8 - 42.9EBITDA (a) $ 62.8 $ (111.7) $ (10.7) $ (59.6) $ 51.9 $ 23.1 $ (8.4) $ 66.6

Acquisition and integration costs 2.4 1.0 0.9 4.3 1.0 1.8 (0.1) 2.7Share-based compensation costs 1.6 0.4 2.9 4.9 0.6 0.2 2.2 3.0COVID-19 costs 7.2 7.9 0.3 15.4 - - - -Goodwill and intangible asset impairment charges 1.2 114.0 - 115.2 - - - -Foreign exchange and other (gains) losses, net (0.5) (0.5) (0.1) (1.1) (0.6) 1.6 (1.7) (0.7)Loss on disposal of property, plant and equipment, net 2.2 0.3 - 2.5 1.7 - - 1.7(Gain) loss on sale of business - - (0.6) (0.6) - - 0.6 0.6Other adjustments, net 0.7 0.6 0.2 1.5 1.5 (1.1) 0.4 0.8Adjusted EBITDA $ 77.6 $ 12.0 $ (7.1) $ 82.5 $ 56.1 $ 25.6 $ (7.0) $ 74.7

For the Six Months Ended June 27, 2020 For the Six Months Ended June 29, 2019North America Rest of World All Other Total North America Rest of World All Other Total

Operating income (loss) $ 48.1 $ (127.1) $ (39.0) $ (118.0) $ 32.1 $ 14.3 $ (24.2) $ 22.2 Other expense (income), net 1.3 4.7 (0.6) 5.4 (1.2) (0.5) 5.0 3.3Depreciation and amortization 68.6 28.6 0.6 97.8 55.8 26.7 0.1 82.6EBITDA (a) $ 115.4 $ (103.2) $ (37.8) $ (25.6) $ 89.1 $ 41.5 $ (29.1) $ 101.5

Acquisition and integration costs 6.5 2.1 16.5 25.1 1.9 3.3 2.2 7.4Share-based compensation costs 2.5 0.7 4.1 7.3 1.3 0.4 4.4 6.1COVID-19 costs 7.7 8.8 0.3 16.8 - - - -Goodwill and intangible asset impairment charges 1.2 114.0 - 115.2 - - - -Foreign exchange and other losses (gains), net 0.6 4.6 - 5.2 (0.9) 2.0 (0.8) 0.3Loss on disposal of property, plant and equipment, net 3.5 0.4 - 3.9 3.6 - - 3.6(Gain) loss on sale of business - - (0.6) (0.6) - - 6.0 6.0Other adjustments, net 3.0 1.3 1.3 5.6 1.6 (0.6) 2.5 3.5Adjusted EBITDA $ 140.4 $ 28.7 $ (16.2) $ 152.9 $ 96.6 $ 46.6 $ (14.8) $ 128.4

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Pro forma Adjusted EBITDA by Reporting Segment*Non-GAAP Reconciliation - Unaudited

(in millions of U.S. dollars) For the Three Months Ended June 27, 2020 For the Three Months Ended June 29, 2019North America Rest of World All Other Total North America Rest of World All Other Total

Adjusted EBITDA $ 77.6 $ 12.0 $ (7.1) $ 82.5 $ 56.1 $ 25.6 $ (7.0) $ 74.7

(+) Legacy Primo adjusted EBITDA - April 1, 2019 to June 30, 2019 (a) - - - - 13.4 - - 13.4Pro forma adjusted EBITDA $ 77.6 $ 12.0 $ (7.1) $ 82.5 $ 69.5 $ 25.6 $ (7.0) $ 88.1

For the Six Months Ended June 27, 2020 For the Six Months Ended June 29, 2019North America Rest of World All Other Total North America Rest of World All Other Total

Adjusted EBITDA $ 140.4 $ 28.7 $ (16.2) $ 152.9 $ 96.6 $ 46.6 $ (14.8) $ 128.4

(+) Legacy Primo adjusted EBITDA - March 1, 2019 to June 30, 2019 (a) - - - - 17.6 - - 17.6Pro forma adjusted EBITDA $ 140.4 $ 28.7 $ (16.2) $ 152.9 $ 114.2 $ 46.6 $ (14.8) $ 146.0

(a) Results solely attributable to the Legacy Primo business.

Source: Primo Management*During the second quarter of 2020, we implemented a restructuring program intended to optimize synergies from the Company’s transition to a pure-play water company following the Legacy Primo Acquisition and, as a result, reorganized into two reporting segments: North America (which includes our DS Services of America, Inc., Aquaterra Corporation, Mountain Valley Spring Company and Legacy Primo businesses) and Rest of World (which includes our Eden Springs Nederland B.V., Aimia Foods Limited, Decantae Mineral Water Limited and John Farrer & Company Limited businesses). Our corporate oversight function and other miscellaneous expenses are aggregated and included in the All Other category. Segment reporting results have been recast to reflect these changes for all periods presented.

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Legacy Primo – Pro forma SG&ANon-GAAP Reconciliation - Unaudited

(in millions of U.S. dollars) June 30, 2019(a)

Three Months Ended Six Months Ended

Selling, general and administrative expenses (b) $ 23.5 $ 46.7

(-) Selling, general and administrative expenses for the two months ended February 29, 2019 - (15.3)

Selling, general and administrative expenses March 1, 2019 to June 30, 2019 $ 23.5 $ 31.4

(a) Results solely attributable to the Legacy Primo business.(b) Certain historical financial information of Legacy Primo has been reclassified to conform to the presentation of historical selling, general and administrative expenses of the Company. Adjustments include: reclassification of certain shipping and handling costs from cost of sales to selling, general and administrative expenses; reclassification of applicable depreciation and amortization into selling, general and administrative expenses; reclassification of certain special items to selling, general and administrative expenses.

Source: Primo Management

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Adjusted SG&A and Pro forma Adjusted SG&ANon-GAAP Reconciliation - Unaudited

Source: Primo Management

For the Three Months Ended June 27, 2020 For the Three Months Ended June 29, 2019

(in millions of U.S. dollars) North America Rest of World All Other Total North America Rest of World All Other Total

Selling, general and administrative expenses, as reported $ 175.5 $ 60.1 $ 11.1 $ 246.7 $ 171.8 $ 64.4 $ 9.5 $ 245.7

(-) COVID-19 related costs (7.2) (7.9) (0.3) (15.4) - - - -Selling, general and administrative expenses, adjusted $ 168.3 $ 52.2 $ 10.8 $ 231.3 $ 171.8 $ 64.4 $ 9.5 $ 245.7

(+) Legacy Primo selling, general and administrative expenses - April 1, 2019 to June 30, 2019 - - - - 23.5 - - 23.5Pro forma selling, general and administrative expenses, adjusted $ 168.3 $ 52.2 $ 10.8 $ 231.3 $ 195.3 $ 64.4 $ 9.5 $ 269.2

For the Six Months Ended June 27, 2020 For the Six Months Ended June 29, 2019

North America Rest of World All Other Total North America Rest of World All Other Total

Selling, general and administrative expenses, as reported $ 352.7 $ 126.7 $ 22.4 $ 501.8 $ 334.4 $ 124.8 $ 22.3 $ 481.5

(-) Divested Cott Beverages LLC - - - - - - (1.3) (1.3)(-) COVID-19 related costs (7.7) (8.8) (0.3) (16.8) - - - -Selling, general and administrative expenses, adjusted $ 345.0 $ 117.9 $ 22.1 $ 485.0 $ 334.4 $ 124.8 $ 21.0 $ 480.2

(+) Legacy Primo selling, general and administrative expenses - March 1, 2019 to June 30, 2019 - - - - 31.4 - - 31.4Pro forma selling, general and administrative expenses, adjusted $ 345.0 $ 117.9 $ 22.1 $ 485.0 $ 365.8 $ 124.8 $ 21.0 $ 511.6

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Pro forma LTM Interest Coverage Ratio and Net Leverage RatioNon-GAAP Reconciliation - Unaudited

(a) Refer to the Company’s public filings for the respective 2019 period. (b) Refer to Legacy Primo’s public filings for the respective 2019 period as found in the SEC website under CIK 0001365101. (c) Synergy adjustment assumes capture of half of projected synergies.(d) Pro forma impact to interest expense due to the divestiture of the S&D business and the addition of the Legacy Primo business assumed immaterial to LTM pro forma interest expense.(e) Total debt as of June 27, 2020 of $1,509.8 million adjusted to exclude $49.2 million of finance lease obligations and $12.9 million of unamortized debt costs.(f) Unrestricted cash defined as cash and cash equivalents as of June 27, 2020 of $211.1 million adjusted to exclude $12.9 million of restricted cash held in escrow accounts by third party agents.(g) Pro forma LTM coverage ratio defined as pro forma LTM adjusted EBITDA divided by LTM interest expense.(h) Pro forma LTM net leverage ratio defined as net debt (total debt, as adjusted, minus unrestricted cash) divided by pro forma LTM adjusted EBITDA.(i) Refer to earnings release presentation posted in the investor relations section of the Company’s website for the quarter ended March 28, 2020.

Source: Primo Management

(in millions of U.S. dollars except financial ratios) Q3 2019 Q4 2019 Q1 2020 (i) Q2 2020Pro forma

Q2 2020 LTM

Adjusted EBITDA (a) $ 96.4 $ 85.4 $ 70.4 $ 82.5 $ 334.7 (-) S&D contribution to Adjusted EBITDA (a) (9.8) (13.3) - - (23.1)(+) Legacy Primo Adjusted EBITDA (b) 15.4 12.8 7.4 - 35.6(+) Synergy adjustment ( c) 17.5Pro forma Adjusted EBITDA $ 102.0 $ 84.9 $ 77.8 $ 82.5 $ 364.7

Interest expense as reported (d) $ 20.2 $ 19.6 $ 19.7 $ 20.7 $ 80.2

Total debt (e) $ 1,473.5

Unrestricted cash (f) $ 198.2

Pro forma LTM Interest coverage ratio (g) 4.5x

Pro forma LTM Net Leverage ratio (h) 3.5x