The Simply Good Foods Company · NASDAQ:SMPL
The Simply Good Foods — Merger or Acquisition (August 2019)
25 slides from The Simply Good Foods's merger presentation, Aug 21, 2019
Slide 1: Acquisition of Quest
Acquisition of August 21, 2019
Slide 2: Disclaimer
Disclaimer Forward Looking Statements Certain statements made in this presentation are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied b
Slide 3: Today's Agenda
Today’s Agenda Speakers Discussion Topics Joe Scalzo SMPL Performance Recap Chief Executive Officer Introduction to Quest Nutrition Todd Cunfer Chief Financial Officer Investment Highlights Mark Pogharian Financial Highlights Vice President Investor Relations, Treasury and Business Development Q&A 2
Slide 4: Becoming a Leading Nutritional Snacking Company
Becoming a Leading Nutritional Snacking Company Quest is a fast-growing ~$345mm lifestyle brand with highly-engaged consumer base Expands SMPL’s On-trend nutritional philosophy: high-protein, minimal sugars and low net carbs Attractive Nutritional Minimal consumer overlap with Atkins; signific
Slide 5: Quest Overview
QUEST OVERVIEW JOE SCALZO PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 6: A Unique and Fast-Growing Active Nutrition Brand
: A Unique and Fast-Growing Active Nutrition Brand Business Overview 2019E Quest Annual Revenue1 Healthy lifestyle food brand with the mission of Product Geography making foods people crave work for them, not against Cookies 8% Powders All Oth. International them 10% 8% 6% Diverse array of produ
Slide 7: Quest Has a Broad Consumer Base
Has a Broad Consumer Base Brand resonates broadly across different consumer needs, demographics, motivations, life stages and lifestyles Diverse Consumers… …Diverse Motivations… 100% <2x per wk All Other 80% Male Daily Gain Daily Meal 60% 35 - 44 2-3x per Strength Nutrition Replacement week 40% …and
Slide 8: Quest's Bar Credentials Are a Strong Hook To Consumers
’s Bar Credentials Are a Strong Hook To Consumers Quest’s positioning, flavors, quality Broad Consumption Patterns1 ingredients, and label provide the ability to play across entire bar category Occasion Time of Day Treat or Mid- Evening Dessert afternoon Breakfast Meal Replacement Snack Lunch Mid- m
Slide 9: Quest's Nutritional Ideals Apply Across Categories
’s Nutritional Ideals Apply Across Categories Typical Snacks Quest Flipping Carbs Protein nutritionals to deliver Sugar Fat craveable foods with minimal Fat Sugar sugar and Protein Carbs net carbs Nutritional ideals can Traditional Traditional Traditional Tortilla be deployed Cookie Pizza Chip acros
Slide 10: On-Trend Nutritional Snacking is Winning Consumers
On-Trend Nutritional Snacking is Winning Consumers Point-of-Sale Growth Rates That Have Consistently Outpaced the Industry 13-Week Growth 52-Week Growth 2-Year Growth 25.9% 25.1% 20.5% 17.6% 16.9% 15.0% 8.4%% 7.2% 8.3% 2.7% 2.2% 0.2% Packaged Nutritional Packaged Nutritional Packaged Nutritional Foo
Slide 11: Investment Highlights
INVESTMENT HIGHLIGHTS JOE SCALZO PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 12: SMPL Presents a Compelling Investment Thesis
SMPL Presents a Compelling Investment Thesis 1 Large and Fast-Growing Nutritional Snacking Category 2 Highly Attractive Portfolio of Nutritional Snacking Brands 3 Scalable Growth-Oriented Platform 4 Synergies of Scale and Complementary Capabilities 5 Proven Strategy to Expand the Quest Brand 11
Slide 13: Our Business Aligns With Consumer Mega Trends
Our Business Aligns With Consumer Mega Trends Health Concerns Continue to 80% Of Consumers Trying Consensus Building on Nutrition… Grow… to Limit / Avoid Sugars3 US Obesity Rate1: Limiting/Avoiding Sugars: Over 100 scientific studies showing the benefits of 20% 14% the Atkins approach to eating lowe
Slide 14: Large and Fast-Growing Nutritional Snacking Category
Large and Fast-Growing Nutritional Snacking Category Nutritional Snacking in Measured Channels1 In IRI measured channels1 alone, $5+ billion Nutritional Snacking segment 2 $5.0bn Consistent and robust annual category growth (double- digits in measured channels) $3.1bn Primarily a branded categ
Slide 15: Highly Attractive Portfolio of Nutritional Snacking Brands
Highly Attractive Portfolio of Nutritional Snacking Brands Low-carb lifestyle brand Sports and active nutrition brand 14
Slide 16: Synergies of Scale and Complementary Capabilities
Synergies of Scale and Complementary Capabilities Cost Synergies Complementary Insights • Similar asset-light business models with in- • Quest to benefit from Simply Good Foods’s network co-manufacturer flexibility knowledge and capabilities within traditional FDM channels • Overlap of sourcing and
Slide 17: Proven Strategy to Expand the Quest Brand
Proven Strategy to Expand the Quest Brand Improved Disciplined Focus on Core Integrated Distribution and Nutrition Philosophy Marketing Innovation Build on key benefits of Improve ROI driven approach Increase velocity of core items clean/good nutrition and to advertising / marketing in existin
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS TODD CUNFER CHIEF FINANCIAL OFFICER
Slide 19: Geographic Portfolio Summary
Geographic Portfolio Summary 1 2 1 LTM (May-2019) FY 2019E Pro Forma Int’l. Int’l. 8% 6% Int’l. 5% North America North America North America 95% 92% 94% $492mm ~$345mm ~$837mm sales sales sales North America-focused nutritional snacking company 1 Reported financials for 12 months ended 5/25/19 2 Man
Slide 20: Channel Portfolio Summary
Channel Portfolio Summary 1 2 LTM (May-2019) FY 2019E Pro Forma Drug AO 2% Club DTC AO / DTC Drug 2% C-Store E-Commerce 2% 1% 2% 4% E-Commerce 4% 5% Specialty 17% 7% Club Mass 11% 28% Mass Mass 38% 45% E-Commerce 10% Food Specialty 34% Food 18% Food 25% 31% Provides better channel balance and a foun
Slide 21: Go-Forward Financial Profile
Go-Forward Financial Profile 1 2 Long-Term FY 2019E LTM (May-2019) Growth Algorithm Revenue ~$345mm $492mm Sustainable + 4% - 6% annual growth with more growth avenues Revenue ~17% 17% Growth 3 Adj. EBITDA ~$50mm $93mm (~$70 with run-rate Long-term EBITDA synergies) growth slightly ahead of sale
Slide 22: Financial Summary and Timing
Financial Summary and Timing Purchase $1.0 billion in cash ($870 million net of the present value of expected tax benefit) Price Net transaction multiple of 12.4x EBITDA¹ Near-term enhancing to SMPL's top-line growth profile (long-term target of 4-6% sales growth) Financial $20 million in id
Slide 23: Concluding Thoughts & Q&A
CONCLUDING THOUGHTS & Q&A [] CHIEF FINANCIAL OFFICER
Slide 24: Combination to Drive Shareholder Value
Combination to Drive Shareholder Value ▪ Atkins core brand growth, profitability and cash flow provides financial flexibility to pursue organic growth and additional M&A opportunities ▪ Acquisition of Quest further enhances Simply Good Foods scale, enhancing value creation ▪ A unique portfolio of le
Slide 25: Q&A
Q&A Simply yGood FOODS COMPANY
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