The Vita Coco Company, Inc. · NASDAQ:COCO
The Vita Coco — Q3 2023 Earnings Presentation
21 slides from The Vita Coco's earnings presentation, Oct 31, 2023
Slide 1: Building the Better Beverage Platform of the Future: 2023 Third Quarter Results
BUILDING THE BETTER BEVERAGE PLATFORM OF THE FUTURE 2023 THIRD QUARTER RESULTS
Slide 2: Disclaimer
DISCLAIMER Non-GAAP Financial Measures In addition to disclosing results determined in accordance with U.S. GAAP, The Vita Coco Company, Inc. (the “Company”) also discloses certain non-GAAP results of operations, including, but not limited to, Adjusted EBITDA, that include certain adjustments or exc
Slide 3: 2023 Third Quarter Performance Highlights
2023 THIRD QUARTER PERFORMANCE HIGHLIGHTS NET SALES % GROWTH VS. PRIOR YEAR (PY) NET SALES: $138MM / +11% vs. PY • Q3 2023 Net Sales growth of +11% Americas International driven by strong Vita Coco Coconut Water (VCCW) growth of +8% vs. GROSS PROFIT: Q3 2022, including +9% VCCW Net $56MM / 41% margi
Slide 4: Our Vision
OUR VISION To be the leading platform for brands in the functional beverage category, and help our consumers… EAT A LITTLE BETTER, DRINK A LITTLE BETTER, LIVE A LITTLE BETTER We believe in democratizing health and wellness, while using business as a force for good to drive positive impact in our com
Slide 5: Building the Better Beverage Platform of the Future
BUILDING THE BETTER BEVERAGE PLATFORM OF THE FUTURE A PUBLIC BENEFIT CORPORATION GLOBAL SUPPLY CHAIN – COCONUT COMMITTED TO GIVING BACK WATER AT SOURCE – SUPPORTED RESPONSIBLE DIFFERENTIATED BY CO-PACK IN MARKET BUSINESS, ASSET-LITE CULTURE & VALUES SUPPLY CHAIN OMNICHANNEL BUSINESS WITH BLUE- CHIP
Slide 6: Investing to Expand Occasions in >$30B Better-For-You Functional Hydration Category
INVESTING TO EXPAND OCCASIONS FOR OUR BRANDS IN >$30B BETTER-FOR-YOU FUNCTIONAL HYDRATION CATEGORY Large Better-For-You Functional Capturing Opportunities Hydration Category Expand the core by increasing Sports Drinks consumption occasions of Coconut $12B Water and gaining share from retail executio
Slide 7: Vita Coco and Coconut Water Outpacing Other Beverage Categories
VITA COCO AND COCONUT WATER OUTPACING OTHER BEVERAGE CATEGORIES; STRONG VOLUME GROWTH, LESS DEPENDENT ON PRICING VS OTHER CATEGORIES VOLUME (OZ) SOLD: TOTAL US MULO+C % CHANGE VS PY DOLLAR $: TOTAL US MULO+C % CHANGE VS PY YTD THROUGH 10/1/23 YTD THROUGH 10/1/23 5.1% 4.4% 11.0% 9.2% 17.2% 8.3% 7.2%
Slide 8: Vita Coco Coconut Water Strong Growth in Q3 2023, Growing Faster Than Category
VITA COCO COCONUT WATER STRONG GROWTH IN Q3 2023, GROWING FASTER THAN CATEGORY; FOUR YEAR GROWTH REMAINS VERY STRONG IN Q3 2023, VITA COCO +23% AND GROWING SHARE TO 51% LONG-TERM TRENDS REMAIN STRONG TOTAL US MULO+C $ % CHANGE VS PY TOTAL US MULO+C $ % CHANGE VS 4 YR AGO L52W, L26W, AND L13W THROUGH
Slide 9: Q3 2023 Growth Across All Circana Reported Channels Driven by Velocity & Distribution
Q3 2023 GROWTH ACROSS ALL CIRCANA REPORTED CHANNELS DRIVEN BY GAINS IN VELOCITY & DISTRIBUTION VITA COCO COCONUT WATER $ % CHANGE VS PY THROUGH 10/1/2023 Q3 ’23 $/(ACV) GROWTH +21% +17% +30% +21% Q3 ’23 AVG WKLY TDP GROWTH +25% +21% +37% +9% 9 Source: Custom Research by The Vita Coco Company, Vita C
Slide 10: Key 2023 Vita Coco Commercial Drivers Fueling Incremental $ Growth
KEY 2023 VITA COCO COMMERCIAL DRIVERS ARE FUELING INCREMENTAL $ GROWTH WHILE BASE SKUS REMAIN STRONG; ACV OPPORTUNITIES REMAIN ACV Performance Total US – MULO ACV Q3 ’22 Q3 ‘23 1L – $0.8 500mL 1ct Base 82 81 500mL – $1.5 1L Base 75 77 330mL – $7.5 500mL MPs 65 67 330mL MPs 11 53 1L MPs 31 45 Farmers
Slide 11: Third Quarter 2023 Financial Highlights
THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS Growth Growth % vs. % vs. Prior Year Prior Period Q3 2023 Year Versus Q3 2022: Period Volume (CE) Growth of +12% Net Sales Growth of +11% Gross Margin Gross Margin improvement of 1442bps Adj. EBITDA* increase of $15MM 11 *For all non-GAAP information throughou
Slide 12: Gross Margin Recovered to Historical Levels
GROSS MARGIN RECOVERED TO HISTORICAL LEVELS BENEFITING PRIMARILY FROM TRANSPORTATION COST REDUCTIONS AND BRANDED PRICING INCREASES PRIOR PERIODS Q3 YTD Volume (CE) 36MM 43MM 47MM 13MM 15MM 37MM 42MM Q3 2023 Versus Q3 2022: $32MM Impact* Gross Margin % increase driven $67MM largely by improvements in
Slide 13: Updated 2023 Full Year Guidance
UPDATED 2023 FULL YEAR GUIDANCE KEY HIGHLIGHTS NET • Net Sales guidance reflects mid-teens growth for VCCW SALES +13-15% and Private Label Net Sales GROWTH1 • FY gross margin between 35-37%, reflecting benefits from the easing of transportation costs and 2022 branded pricing increases • SG&A growing
Slide 14: Long-Term Growth Algorithm
LONG-TERM GROWTH ALGORITHM LONG-TERM TARGET RANGE1 KEY INVESTMENT THEMES o Established beverage platform with strong balance sheet, built for long term growth BRANDED MID o Branded Net Sales2 growth primarily driven NET SALES2 TEENS by Vita Coco Coconut Water including GROWTH contributions from inno
Slide 15: Appendix
APPENDIX 15
Slide 16: Q3 2023 P&L Summary
Q3 2023 P&L SUMMARY $ & CE UNITS IN MM Q3 2023 Q3 2022 VS. PY VOLUME (CE) 14.9 13.3 12% 1.6 NET SALES 138.1 124.0 11% 14.1 GROSS PROFIT / % MARGIN 56.2 / 40.7% 32.6 / 26.3% 72% 23.6 SG&A 32.6 24.0 36% 8.6 INCOME FROM OPERATIONS 23.5 8.6 173% 14.9 NET INCOME / % MARGIN 15.2 /11.0% 7.3 / 5.9% 109% 7.9
Slide 17: YTD 2023 P&L Summary
YTD 2023 P&L SUMMARY $ & CE UNITS IN MM YTD 2023 YTD 2022 VS. PY VOLUME (CE) 42.2 37.4 13% 4.8 NET SALES 387.5 335.8 15% 51.7 GROSS PROFIT / % MARGIN 140.9 / 36.4% 80.9 / 24.1% 74% 60.0 SG&A 89.9 73.0 23% 16.9 INCOME FROM OPERATIONS 51.1 7.9 547% 43.2 NET INCOME / % MARGIN 39.9 / 10.3% 10.6 / 3.2% 2
Slide 18: Q1 2023 and 2022 Net Income to Adjusted EBITDA Reconciliation
Q1 2023 AND 2022 NET INCOME TO ADJUSTED EBITDA RECONCILIATION Three Months Ended March 31, $MM 2023 2022 NET INCOME $6.7 $2.2 Depreciation & Amortization 0.2 0.5 Interest Income / Expense — — Income Tax Expense 1.8 0.6 EBITDA 8.7 3.3 Stock-Based Compensation 2.2 2.4 Unrealized (Gain) / Loss on Deriv
Slide 19: Q2 2023 and 2022 Net Income to Adjusted EBITDA Reconciliation
Q2 2023 AND 2022 NET INCOME TO ADJUSTED EBITDA RECONCILIATION Three Months Ended June 30, $MM 2023 2022 NET INCOME $18.0 $1.1 Depreciation & Amortization 0.2 0.5 Interest Income (0.3) — Interest Expense — 0.1 Income Tax Expense 4.3 0.6 EBITDA 22.2 2.2 Stock-Based Compensation 2.1 1.8 Unrealized (Gai
Slide 20: Q3 2023 and 2022 Net Income to Adjusted EBITDA Reconciliation
Q3 2023 AND 2022 NET INCOME TO ADJUSTED EBITDA RECONCILIATION Three Months Ended September 30, $MM 2023 2022 NET INCOME $15.2 $7.3 Depreciation & Amortization 0.2 0.5 Interest Income (0.8) 0.0 Interest Expense 0.0 0.1 Income Tax Expense 4.0 1.8 EBITDA 18.5 9.7 Stock-Based Compensation 2.9 1.5 Unreal
Slide 21: YTD 2023 and 2022 Net Income to Adjusted EBITDA Reconciliation
YTD 2023 AND 2022 NET INCOME TO ADJUSTED EBITDA RECONCILIATION Nine Months Ended September 30, $MM 2023 2022 NET INCOME $39.9 $10.6 Depreciation & Amortization 0.5 1.4 Interest Income (1.1) 0.0 Interest Expense 0.0 0.2 Income Tax Expense 10.1 3.0 EBITDA 49.4 15.3 Stock-Based Compensation 7.1 5.7 Unr
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